As filed with the Securities and Exchange Commission on April 27, 2000.
File Nos. 333-31288
811-09227
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 /x/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7 /x/
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
(Exact Name of Registrant)
ALLSTATE LIFE INSURANCE COMPANY
(Name of Depositor)
3100 SANDERS ROAD, NORTHBROOK, ILLINOIS 60062
1-800/390-1277
(Principal Executive Offices and Telephone Number of Depositor)
MICHAEL J. VELOTTA
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY
3100 SANDERS ROAD, NORTHBROOK, ILLINOIS 60062
(Name and Address of Agent for Service)
Copies to:
Richard T. Choi, Terry R. Young, Esquire
Esquire Allstate Distributors, L.L.C.
Freedman, Levy, Kroll & 3100 Sanders Road, J5B
Simonds Northbrook, Illinois 60062
1050 Connecticut Avenue, N.W., Suite 825
Washington, D.C. 20036-5366
Approximate date of proposed public offering: As soon as practicable after the
effective date of the registration statement.
Title of Securities Being Registered: Units of interest in the Allstate Life
Insurance Company Separate Account A under flexible premium deferred variable
annuity contracts.
<PAGE>
THE PUTNAM ALLSTATE ADVISOR
Allstate Life Insurance Company Prospectus dated April 28, 2000
3100 Sanders Road
Northbrook, Illinois 60062
Telephone Number: 1-800-390-1277
Allstate Life Insurance Company ("Allstate") is offering the following
individual and group flexible premium deferred variable annuity contracts (each,
a "Contract"):
o Putnam Allstate Advisor
o Putnam Allstate Advisor Apex (formerly known as Putnam Allstate Advisor - A)
o Putnam Allstate Advisor Plus
o Putnam Allstate Advisor Preferred
This prospectus contains information about each Contract that you should know
before investing. Please keep it for future reference. Not all Contracts may be
available in all states or through your sales representative. Please check with
your sales representative for details.
Each Contract currently offers several investment alternatives ("investment
alternatives"). The investment alternatives include up to 3 fixed account
options ("Fixed Account Options"), depending on the Contract, and include 24
variable sub-accounts ("Variable Sub-Accounts") of the Allstate Life Insurance
Company Separate Account A ("Variable Account"). Each Variable Sub-Account
invests exclusively in the class IB shares of one of the following mutual fund
portfolios ("Funds") of Putnam Variable Trust:
<TABLE>
<CAPTION>
<S> <C> <C>
Putnam VT American Government Income Fund Putnam VT International Growth and Income Fund
Putnam VT Asia Pacific Growth Fund Putnam VT International New Opportunities Fund
Putnam VT Diversified Income Fund Putnam VT Investors Fund
Putnam VT The George Putnam Fund of Boston Putnam VT Money Market Fund
Putnam VT Global Asset Allocation Fund Putnam VT New Opportunities Fund
Putnam VT Global Growth Fund Putnam VT New Value Fund
Putnam VT Growth and Income Fund Putnam VT OTC & Emerging Growth Fund
Putnam VT Growth Opportunities Fund Putnam VT Research Fund
Putnam VT Health Sciences Fund Putnam VT Small Cap Value Fund
Putnam VT High Yield Fund Putnam VT Utilities Growth and Income Fund
Putnam VT Income Fund Putnam VT Vista Fund
Putnam VT International Growth Fund Putnam VT Voyager Fund
</TABLE>
For Putnam Allstate Advisor Plus Contracts, each time you make a purchase
payment, we will add to your Contract value ("Contract Value") a credit
enhancement ("Credit Enhancement") equal to 4% of such purchase payment.
Expenses for this contract may be higher than a Contract without the Credit
Enhancement. Over time, the amount of the Credit Enhancement may be more than
offset by the fees associated with the Credit Enhancement.
We (Allstate) have filed a Statement of Additional Information, dated April 28,
2000, with the Securities and Exchange Commission ("SEC"). It contains more
information about each Contract and is incorporated herein by reference, which
means that it is legally a part of this prospectus. Its table of contents
appears on page __ of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
<PAGE>
The Securities and Exchange Commission has not approved
or disapproved the securities described in this
prospectus, nor has it passed on the accuracy or the
adequacy of this prospectus. Anyone who tells you
otherwise is committing a federal crime.
The Contracts may be distributed through broker-dealers
that have relationships with banks or other
IMPORTANT financial institutions or by employees of such banks.
NOTICES However, the Contracts are not deposits, or obligations
of, or guaranteed by such institutions or any federal
regulatory agency.
Investment in the Contracts involves investment risks,
including possible loss of principal.
The Contracts are not FDIC insured.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- -----------------------------------------------------------------------------------------------------------------------------------
Page
<S> <C> <C> <C>
Important Terms........................................................................
The Contracts At A Glance .............................................................
Overview How The Contracts Work.................................................................
Expense Table..........................................................................
Financial Information..................................................................
The Contracts..........................................................................
Purchases..............................................................................
Contract Value.........................................................................
Contract Features Investment Alternatives................................................................
The Variable Sub-Accounts.....................................................
The Fixed Account.............................................................
Transfers.....................................................................
Expenses...............................................................................
Access To Your Money...................................................................
Income Payments........................................................................
Death Benefits.........................................................................
More Information........................................................................
Other Information Taxes...................................................................................
Performance Information.................................................................
Statement of Additional Information Table of Contents..................................
Appendix A..............................................................................
Appendix B..............................................................................
Appendix C..............................................................................
Appendix D..............................................................................
</TABLE>
<PAGE>
IMPORTANT TERMS
- --------------------------------------------------------------------------------
This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Accumulation Phase...............................................................................
Accumulation Unit ...............................................................................
Accumulation Unit Value .........................................................................
Allstate ("We")..................................................................................
Annuitant........................................................................................
Automatic Additions Program......................................................................
Automatic Fund Rebalancing Program...............................................................
Beneficiary .....................................................................................
Cancellation Period .............................................................................
*Contract .......................................................................................
Contract Anniversary.............................................................................
Contract Owner ("You") ..........................................................................
Contract Value ..................................................................................
Contract Year ...................................................................................
Credit Enhancement...............................................................................
Dollar Cost Averaging Program....................................................................
Due Proof of Death...............................................................................
Enhanced Beneficiary Protection Option...........................................................
Fixed Account Options............................................................................
Free Withdrawal Amount ..........................................................................
Funds............................................................................................
Guarantee Period ...............................................................................
Income Base......................................................................................
Income Plan .....................................................................................
Investment Alternatives .........................................................................
Issue Date ......................................................................................
Maximum Anniversary Value........................................................................
Payout Phase.....................................................................................
Payout Start Date ...............................................................................
Retirement Income Guarantee Rider................................................................
Right to Cancel .................................................................................
SEC..............................................................................................
Settlement Value ...............................................................................
Standard Fixed Account Option....................................................................
Systematic Withdrawal Program ...................................................................
Valuation Date...................................................................................
Variable Account ................................................................................
Variable Sub-Account ............................................................................
</TABLE>
* In certain states a Contract may be available only as a group
Contract. If you purchase a group Contract, we will issue you a
certificate that represents your ownership and that summarizes the
provisions of the group Contract. References to "Contract" in this
prospectus include certificates, unless the context requires otherwise.
References to "Contract" also include all four Contracts listed on the
cover page of this prospectus, unless otherwise noted. However, we
administer each Contract separately.
<PAGE>
Overview of Contracts
- --------------------------------------------------------------------------------
The Contracts offer many of the same basic features and benefits. They differ
primarily with respect to the charges imposed, as follows:
o The Putnam Allstate Advisor Contract has a mortality and expense risk
charge of 1.25%, an annual contract maintenance charge of $30, a withdrawal
charge of up to 7% with a 7 year withdrawal charge period, and an annual
Free Withdrawal Amount.
o The Putnam Allstate Advisor Apex Contract has a front-end sales charge of
up to 5.75% of purchase payments, a lower mortality and expense risk charge
(0.80%), no contract maintenance charge, a lower withdrawal charge (0.50%)
with a shorter withdrawal charge period (1 year), but no Free Withdrawal
Amount.
o The Putnam Allstate Advisor Plus Contract offers a 4% Credit Enhancement on
purchase payments, a higher mortality and expense risk charge (1.60%), no
contract maintenance charge, a higher withdrawal charge (up to 8%) with a
longer withdrawal charge period (8 years), and an annual Free Withdrawal
Amount.
o The Putnam Allstate Advisor Preferred Contract has a higher mortality and
expense risk charge (1.65%), no contract maintenance charge, a lower
withdrawal charge (up to 2%) with a shorter withdrawal charge period (2
years), but no Free Withdrawal Amount.
Other differences among the Contracts relate to the minimum initial purchase
payment, the maximum age of Contract owners and Annuitants, available Fixed
Account Options, and available withdrawal charge waivers, and available employee
endorsements. For a side-by-side comparison of these differences, please turn to
Appendix D of this prospectus.
<PAGE>
THE CONTRACTS AT A GLANCE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The following is a snapshot of the Contracts. Please read the remainder of this
prospectus for more information.
<S> <C> <C> <C>
Flexible Payments You can purchase each Contract with as little as:
o $1,000 for Putnam Allstate Advisor Contracts
o $1,000 for Putnam Allstate Advisor Apex Contracts
o $10,000 for Putnam Allstate Advisor Plus Contracts
o $10,000 for Putnam Allstate Advisor Preferred Contracts
Putnam Allstate Advisor and Putnam Allstate Advisor Apex Contracts that are Qualified
Contracts, which are Contracts issued with a qualified plan, can be purchased with an
initial purchase payment of $500 or more. You can add to your Contract as often and
as much as you like, but each subsequent payment must be at least $500 ($50 for
automatic payments). We may limit the amount of any additional purchase payment
to a maximum of $1,000,000. You must maintain a minimum account size of $1,000.
For Putnam Allstate Advisor Plus Contracts, each time you make a purchase payment, we
will add to your Contract Value a Credit Enhancement equal to 4% of such purchase
payment.
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Right to Cancel You may cancel your Contract within 20 days of receipt or any longer
period as your state may require ("Cancellation Period"). Upon
cancellation, we will return your purchase payments adjusted, to the
extent federal or state law permits, to reflect the investment experience
of any amounts allocated to the Variable Account. If you exercise your
Right to Cancel the Contract, the amount we refund to you will not include
any Credit Enhancement. See "Right to Cancel" for details.
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Expenses Each Fund pays expenses that you will bear indirectly if you
invest in a Variable Sub-Account. You also will bear the
following expenses:
Putnam Allstate Advisor Contracts
o Annual mortality and expense risk charge equal to
1.25% of average daily net assets
o Annual contract maintenance charge of $30 (waived in certain cases)
o Withdrawal charges ranging from 0% to 7% of purchase payments
withdrawn (with certain exceptions)
Putnam Allstate Advisor Apex Contracts
o Annual mortality and expense risk charge equal to
0.80% of average daily net assets
o Front end sales charge ranging from 5.75% to 0.50% of the amount of
purchase payments
o Withdrawal charge equal to 0.50% of purchase payments withdrawn during the
first Contract Year (currently only assessed on Contracts that have total
purchase payments of at least $1,000,000)
Putnam Allstate Advisor Plus Contracts
o Annual mortality and expense risk charge equal to 1.60%
of average daily net assets.
o Withdrawal charges ranging from 0% to 8% of purchase payments
withdrawn (with certain exceptions)
Putnam Allstate Advisor Preferred Contracts
o Annual mortality and expense risk charge equal to 1.65%
of average daily net assets
o Withdrawal charges ranging from 0% to 2% of purchase payments
withdrawn (with certain exceptions)
All Contracts
o An additional 0.15% applies to the annual mortality and expense risk
charge if you select the Enhanced Beneficiary Protection Option
o If you select a Retirement Income Guarantee Rider you would pay an
additional fee at the annual rate of 0.05% or 0.30% (depending on the
option you select) of the Income Base in effect on a Contract anniversary
("Contract Anniversary")
o Transfer fee equal to 0.50% of the amount transferred after 12th
transfer in any year
o State premium tax (if your state imposes one)
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Investment Each Contract offers several investment alternatives including:
Alternatives o a Standard Fixed Account Option that credits interest at rates we
guarantee, and
o 24 Variable Sub-Accounts investing in Funds offering professional money
management by Putnam Investment Management, Inc.
Putnam Allstate Advisor and Putnam Allstate Advisor Apex Contracts offer 2 additional
Fixed Account Options that credit interest at rates we guarantee.
To find out current rates being paid on the Fixed Account Option(s), or to find out how
the Variable Sub-Accounts have performed, please call us at 1-800/390-1277.
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Special Services For your convenience, we offer these special services:
o Automatic Fund Rebalancing Program
o Automatic Additions Program
o Dollar Cost Averaging Program
o Systematic Withdrawal Program
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Income Payments You can choose fixed income payments, variable income payments, or a
combination of the two. You can receive your income payments in one of the
following ways:
o life income with guaranteed payments
o a joint and survivor life income with guaranteed payments
o guaranteed payments for a specified period (5 to 30 years)
Allstate also offers two Retirement Income Guarantee Riders that allow you to lock in
a dollar amount that you can apply towards fixed income payments.
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Death Benefits If you die before income payments begin, we will pay the death benefit
described in the Contract. We also offer an Enhanced Beneficiary Protection Option.
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Transfers Before the Payout Start Date, you may
transfer your Contract Value among the
investment alternatives, with certain
restrictions. The minimum amount you may
transfer is $100 or the amount remaining in
the investment alternative, if less.
A charge may apply after the 12th transfer
in each Contract year ("Contract Year"),
which we measure from the date we issue
your Contract or a Contract Anniversary.
---------------------------------- --------------------------------------------------------------------------------
---------------------------------- --------------------------------------------------------------------------------
Withdrawals You may withdraw some or all of your
Contract Value at anytime during the
Accumulation Phase and during the Payout
Phase in certain cases. In general, you
must withdraw at least $50 at a time
($1,000 during the Payout Phase). A 10%
federal tax penalty may apply if you
withdraw before you are 59 1/2 years old. A
withdrawal charge also may apply.
---------------------------------- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
HOW THE CONTRACTS WORK
- --------------------------------------------------------------------------------
Each Contract basically works in two ways.
First, each Contract can help you (we assume you are the "Contract
Owner") save for retirement because you can invest in your Contract's investment
alternatives and pay no federal income taxes on any earnings until you withdraw
them. You do this during what we call the "Accumulation Phase" of the Contract.
The Accumulation Phase begins on the date we issue your Contract (we call that
date the "Issue Date") and continues until the Payout Start Date, which is the
date we apply your money to provide income payments. During the Accumulation
Phase, you may allocate your purchase payments to any combination of the
Variable Sub-Accounts and/or Fixed Account Options. If you invest in a Fixed
Account Option, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your investment
return will vary up or down depending on the performance of the corresponding
Funds.
Second, each Contract can help you plan for retirement because you can
use it to receive retirement income for life and/or for a pre-set number of
years, by selecting one of the income payment options (we call these "Income
Plans") described on page __. You receive income payments during what we call
the "Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Funds. The amount of money you accumulate under
your Contract during the Accumulation Phase and apply to an Income Plan will
determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Issue Payout Start
Date Accumulation Phase Date Payout Phase
- ---------------------------------------------------------------------------------------------------------------------------------
^ ^ ^ ^ - >
| | | | |
You save for retirement
You buy You start receiving income You can receive Or you can
a Contract payments or receive a lump income payments receive income
sum payment for a set period payments for life
</TABLE>
As the Contract Owner, you exercise all of the rights and privileges
provided by the Contract. If you die, any surviving Contract Owner or, if there
is none, the Beneficiary will exercise the rights and privileges provided by the
Contract. See "The Contract." In addition, if you die before the Payout Start
Date, we will pay a death benefit to any surviving Contract Owner or, if there
is none, to your Beneficiary. See "Death Benefits."
Please call us at 1-800-390-1277 if you have any question about how the
Contracts work.
<PAGE>
EXPENSE TABLE
- --------------------------------------------------------------------------------
The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes that may be imposed by the state where you reside. For more
information about Variable Account expenses, see "Expenses," below. For more
information about Fund expenses, please refer to the accompanying prospectus for
the Funds.
-----------------------------------------------------------------------------
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CONTRACT OWNER TRANSACTION EXPENSES
-----------------------------------------------------------------------------
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<TABLE>
<CAPTION>
Sales Charge Imposed on Purchases (as a percentage of purchase payments)
Contract:
--------
<S> <C> <C> <C>
Putnam Allstate Advisor.....................................................None
Putnam Allstate Advisor Apex Purchase Payment Amount Sales Charge Percentage
----------------------- -----------------------
Less than $50,000 5.75%
At least $50,000 but less than $100,000 4.50%
At least $100,000 but less than $250,000 3.50%
At least $250,000 but less than $500,000 2.50%
At least $500,000 but less than $1,000,000 2.00%
At least $1,000,000 0.50%
Putnam Allstate Advisor Plus............................................None
Putnam Allstate Advisor Preferred ......................................None
-----------------------------------------------------------------------------
<PAGE>
-----------------------------------------------------------------------------
Withdrawal Charge (as a percentage of purchase payments withdrawn)*
Contract: Number of Complete Years Since We Received Payment Being Withdrawn/
-------- -------------------------------------------------------------------
Applicable Charge:
------------------
Putnam Allstate Advisor 0 1 2 3 4 5 6 7+
7% 7% 6% 5% 4% 3% 2% 0%
Putnam Allstate Advisor Apex 0 1+
0.5%** 0%
Putnam Allstate Advisor Preferred 0 1 2+
2% 1% 0%
Putnam Allstate Advisor Plus 0 1 2 3 4 5 6 7 8+
8% 8% 8% 7% 6% 5% 4% 3% 0%
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Under Putnam Allstate Advisor and Putnam Allstate Advisor Plus Contracts, each
Contract Year, you may withdraw up to the Free Withdrawal Amount offered under
your Contract without incurring a withdrawal charge. See "Withdrawal Charges,"
for more information.
** Currently assessed on Contracts that have total purchase payments of at least
$1,000,000.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Annual Contract Maintenance Charge
Contract:
--------
Putnam Allstate Advisor......................................... $30***
Putnam Allstate Advisor Apex...................................... None
Putnam Allstate Advisor Plus...................................... None
Putnam Allstate Advisor Preferred................................. None
-----------------------------------------------------------------------------
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Transfer Fee....................................... 0.50% of the amount
transferred****
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*** Waived in certain cases. See "Expenses."
**** Applies solely to the 13th and subsequent transfers within a Contract Year,
excluding transfers due to dollar cost averaging and automatic fund rebalancing.
-----------------------------------------------------------------------------
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VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net asset value deducted from each Variable
Sub-Account)
-----------------------------------------------------------------------------
--------------------------------------------------- ---------------------- --
<TABLE>
<CAPTION>
Mortality and Expense Total Variable
Risk Charge* Administrative Charge Account Annual
Contract ------------------ --------------------- Expenses
-------- --------
<S> <C> <C> <C>
1.25% 0.00% 1.25%
Putnam Allstate Advisor 0.80% 0.00% 0.80%
Putnam Allstate Advisor Apex 1.65% 0.00% 1.65%
Putnam Allstate Advisor Preferred 1.60% 0.00% 1.60%
Putnam Allstate Advisor Plus
</TABLE>
--------------------------------------------------- ---------------------- --
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* If you select the Enhanced Beneficiary Protection Option, the mortality and
expense risk charge will be an additional 0.15%.
-----------------------------------------------------------------------------
<PAGE>
------------------------------------------------------------------------------
Retirement Income Guarantee Rider Expenses
If you select a Retirement Income Guarantee Rider, you would pay an
additional fee at the annual rate of 0.05% or 0.30% (depending on the Option
you select) of the Income Base in effect on a Contract Anniversary. See
"Retirement Income Guarantee Riders" for details.
-----------------------------------------------------------------------------
<PAGE>
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FUND ANNUAL EXPENSES (After Voluntary Reductions and Reimbursements) (as a
percentage of Fund average daily net assets)(1)
<TABLE>
<CAPTION>
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses(1)
<S> <C> <C> <C> <C>
Putnam VT American Government Income Fund(2) 0.41% 0.15% 0.49% 1.05%
Putnam VT Asia Pacific Growth Fund 0.80% 0.15% 0.33% 1.28%
Putnam VT Diversified Income Fund 0.68% 0.15% 0.10% 0.93%
Putnam VT The George Putnam Fund of Boston 0.65% 0.15% 0.18% 0.98%
Putnam VT Global Asset Allocation Fund 0.65% 0.15% 0.12% 0.92%
Putnam VT Global Growth Fund 0.61% 0.15% 0.12% 0.88%
Putnam VT Growth and Income Fund 0.46% 0.15% 0.04% 0.65%
Putnam VT Growth Opportunities Fund 0.70% 0.15% 0.20% 1.05%
Putnam VT Health Sciences Fund 0.70% 0.15% 0.13% 0.98%
Putnam VT High Yield Fund 0.65% 0.15% 0.07% 0.87%
Putnam VT Income Fund 0.60% 0.15% 0.07% 0.82%
Putnam VT International Growth Fund 0.80% 0.15% 0.22% 1.17%
Putnam VT International Growth and Income Fund 0.80% 0.15% 0.18% 1.13%
Putnam VT International New Opportunities Fund 1.08% 0.15% 0.33% 1.56%
Putnam VT Investors Fund 0.63% 0.15% 0.08% 0.86%
Putnam VT Money Market Fund 0.41% 0.15% 0.08% 0.64%
Putnam VT New Opportunities Fund 0.54% 0.15% 0.05% 0.74%
Putnam VT New Value Fund 0.70% 0.15% 0.10% 0.95%
Putnam VT OTC & Emerging Growth Fund(3) 0.53% 0.15% 0.37% 1.05%
Putnam VT Research Fund(3) 0.54% 0.15% 0.31% 1.00%
Putnam VT Small Cap Value Fund 0.53% 0.15% 0.76% 1.44%
Putnam VT Utilities Growth and Income Fund 0.65% 0.15% 0.06% 0.86%
Putnam VT Vista Fund 0.65% 0.15% 0.10% 0.90%
Putnam VT Voyager Fund 0.53% 0.15% 0.04% 0.72%
(1) Figures shown in the table are based on the Funds' last fiscal year ended
December 31, 1999, except that the figures for the Putnam VT Small Cap
Value Fund, which commenced operations on April 30, 1999, and Putnam VT
American Government Income Fund and Putnam VT Growth Opportunities Fund,
which commenced operations on January 31, 2000 are based on estimates for
the Funds' current fiscal year. Figures shown in the table include amounts
paid through expense offset and brokerage service arrangements. See the
prospectus for the Putnam Variable Trust for more information about Rule
12b-1 fees payable under the Funds' distribution plan.
(2) Absent voluntary reductions and reimbursements, the estimated management
fees, Rule 12b-1 fees, other expenses, and total annual fund expenses for
the Putnam VT American Government Income Fund expressed as a percentage of
average net assets of the Fund would have been as follows:
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses
Putnam VT American Government Income Fund 0.65% 0.15% 0.49% 1.29%
(3) Absent voluntary reductions and reimbursements for certain Funds (including
amounts paid through expense offset and brokerage service arrangements),
management fees, Rule 12b-1 fees, other expenses, and total annual Fund
expenses expressed as a percentage of average net assets of the Funds would
have been as follows:
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses
Putnam VT OTC & Emerging Growth Fund 0.70% 0.15% 0.37% 1.22%
Putnam VT Research Fund 0.65% 0.15% 0.31% 1.11%
</TABLE>
<PAGE>
EXAMPLE 1
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested a $1,000 in a Variable Sub-Account,
o earned a 5% annual return on your investment,
o surrendered your Contract, or began receiving income payments for a
specified period of less than 120 months, at the end of each time period
(no withdrawal charge is included in the calculations for the Putnam
Allstate Advisor Apex Contracts because no withdrawal charge applies after
one year);
o elect the Enhanced Beneficiary Protection Option; and
o elect Retirement Income Guarantee Rider 2 (assuming Income Base B).
The example assumes that any fund expense waivers or reimbursement arrangements
described in footnote 2 above are in effect for the time periods presented
below. The example does not include any taxes or tax penalties you may be
required to pay if you surrender your Contract.
<TABLE>
<CAPTION>
Putnam Allstate Putnam Allstate Putnam Allstate Putnam Allstate
Advisor Advisor Apex Advisor Plus Advisor Preferred
SUB-ACCOUNT 1 Year 3 Year 1 Year 3 Year 1 Year 3 Year 1 Year 3 Year
- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Putnam American Government $88 $132 $80 $127 $100 $157 $40 $90
Income
Putnam Asia Pacific Growth $91 $139 $82 $134 $102 $164 $42 $97
Putnam Diversified Income $87 $128 $79 $124 $99 $154 $38 $87
The George Putnam Fund $88 $129 $79 $125 $99 $155 $39 $88
Putnam Global Asset Allocation $87 $128 $79 $123 $99 $153 $38 $87
Putnam Global Growth $87 $126 $78 $122 $98 $152 $38 $85
Putnam Growth and Income $84 $119 $76 $115 $96 $145 $35 $78
Putnam Growth Opportunities $88 $132 $80 $127 $100 $157 $40 $90
Putnam Health Sciences $88 $129 $79 $125 $99 $155 $39 $88
Putnam High Yield $87 $126 $78 $122 $98 $152 $38 $85
Putnam Income $86 $124 $78 $120 $98 $150 $37 $83
Putnam International Growth $90 $135 $81 $131 $101 $161 $41 $94
Putnam International Growth $89 $134 $81 $129 $101 $160 $40 $93
and Income
Putnam International New $94 $147 $85 $142 $105 $173 $45 $106
Opportunities
Putnam Investors $87 $126 $78 $122 $98 $151 $38 $85
Putnam Money Market $84 $119 $76 $115 $96 $145 $35 $78
Putnam New Opportunities $85 $122 $77 $118 $97 $148 $36 $81
Putnam New Value $87 $128 $79 $124 $99 $154 $39 $87
Putnam OTC & Emerging $88 $132 $80 $127 $100 $157 $40 $90
Growth
Putnam Research $88 $130 $80 $126 $99 $156 $39 $89
Putnam Small Cap Value $92 $143 $84 $138 $104 $169 $44 $102
Putnam Utilities Growth and $87 $126 $78 $122 $98 $151 $38 $85
Income
Putnam Vista $87 $127 $79 $123 $98 $153 $38 $86
Putnam Voyager $85 $121 $77 $117 $96 $147 $36 $80
<PAGE>
EXAMPLE 2
Same assumptions as Example 1 above, except that you decide not to surrender
your Contract, or you began receiving income payments for at least 120 months if
under an Income Plan for a specified period, at the end of each period.
Putnam Allstate Putnam Allstate Putnam Allstate
Advisor Advisor Plus Advisor Preferred
SUB-ACCOUNT 1 Year 3 Year 1 Year 3 Year 1 Year 3 Year
- ----------- ------ ------ ------ ------ ------ ------
Putnam American Government $29 $89 $32 $98 $30 $90
Income
Putnam Asia Pacific Growth $31 $96 $34 $105 $32 $97
Putnam Diversified Income $28 $85 $31 $94 $28 $87
The George Putnam Fund $28 $87 $31 $96 $29 $88
Putnam Global Asset Allocation $28 $85 $31 $94 $28 $87
Putnam Global Growth $27 $84 $30 $93 $28 $85
Putnam Growth and Income $25 $77 $28 $86 $25 $78
Putnam Growth Opportunities $29 $89 $32 $98 $30 $90
Putnam Health Sciences $28 $87 $31 $96 $29 $88
Putnam High Yield $27 $84 $30 $92 $28 $85
Putnam Income $27 $82 $30 $91 $27 $83
Putnam International Growth $30 $93 $33 $101 $31 $94
Putnam International Growth $30 $91 $33 $100 $30 $93
and Income
Putnam International New $34 $105 $37 $113 $35 $106
Opportunities
Putnam Investors $27 $83 $30 $92 $28 $85
Putnam Money Market $25 $76 $28 $85 $25 $78
Putnam New Opportunities $26 $80 $29 $88 $26 $81
Putnam New Value $28 $86 $31 $95 $29 $87
Putnam OTC & Emerging $29 $89 $32 $98 $30 $90
Growth
Putnam Research $28 $87 $31 $96 $29 $89
Putnam Small Cap Value $33 $101 $36 $110 $34 $102
Putnam Utilities Growth and $27 $83 $30 $92 $28 $85
Income
Putnam Vista $27 $84 $30 $93 $280 $859
Putnam Voyager $26 $79 $28 $88 $261 $803
</TABLE>
Please remember that you are looking at examples and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return may be lower or greater than 5%,
which is not guaranteed. The above examples assume the election of the Enhanced
Beneficiary Protection Option and the Retirement Income Guarantee Rider 2 and
that Income Base B is applied. If one or both of these features were not
elected, the expense figures shown above would be slightly lower. To reflect the
contract maintenance charge in the examples (for Putnam Allstate Advisor
Contracts only), we estimated an equivalent percentage charge, based on an
assumed average Contract size of $45,000. The figures for the Putnam Allstate
Advisor Apex Contract assume a 5.75% sales charge.
<PAGE>
FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "Accumulation Unit Value." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
Accumulation Unit Values for Putnam Allstate Advisor and Putnam Allstate Advisor
Apex Contracts appear in Appendix C. No Accumulation Unit Values are shown for
the Putnam Allstate Advisor Plus and Putnam Allstate Advisor Preferred Contracts
which were first offered as of February 4, 2000 and April 28, 2000 respectively.
The financial statements of Allstate and the Variable Account appear in the
Statement of Additional Information.
<PAGE>
THE CONTRACT
- --------------------------------------------------------------------------------
CONTRACT OWNER
Each Contract is an agreement between you, the Contract Owner, and Allstate, a
life insurance company. As the Contract Owner, you may exercise all of the
rights and privileges provided to you by the Contract. That means it is up to
you to select or change (to the extent permitted):
o the investment alternatives during the Accumulation and Payout Phases,
o the amount and timing of your purchase payments and withdrawals,
o the programs you want to use to invest or withdraw money,
o the income payment plan you want to use to receive retirement income,
o the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
o the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract Owner or the Annuitant
dies, and
o any other rights that the Contract provides, including restricting income
payments to beneficiaries.
If you die, any surviving joint Contract Owner or, if none, the Beneficiary will
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person. The maximum age of any Contract owner on the Issue Date for each
Contract is as follows:
90 - Putnam Allstate Advisor
90 - Putnam Allstate Advisor Apex
80 - Putnam Allstate Advisor Plus
80 - Putnam Allstate Advisor Preferred
If you select the Enhanced Beneficiary Protection Option, the maximum age of any
owner on the date we issue the Contract rider is 75.
You can use the Contract with or without a qualified plan. A qualified plan is a
retirement savings plan, such as an IRA or tax-sheltered annuity, that
meets the requirements of the Internal Revenue Code. Qualified plans may limit
or modify your rights and privileges under the Contract. We use the term
"Qualified Contract" to refer to a Contract issued with a qualified plan. See
"Tax Qualified Contracts" on page __.
You may change the Contract Owner at any time. Once we have received a
satisfactory written request for a change of Contract Owner, the change will
take effect as of the date you signed it. We are not liable for any payment we
make or other action we take before receiving any written request for a change
from you.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plans with guaranteed payments for a specified period). You
may name a new Annuitant only upon the death of the current Annuitant. You may
designate a joint Annuitant, who is a second person on whose life income
payments depend, at the time you select an Income Plan. The maximum age of any
Annuitant on the Issue Date for each Contract is as follows:
90 - Putnam Allstate Advisor
90 - Putnam Allstate Advisor Apex
80 - Putnam Allstate Advisor Plus
80 - Putnam Allstate Advisor Preferred
If you select an Income Plan that depends on the Annuitant or a joint
Annuitant's life, we may require proof of age and sex before income payments
begin and proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract Owner if the sole surviving Contract Owner dies before
the Payout Start Date. If the sole surviving Contract Owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us before income payments
begin, unless you have designated an irrevocable Beneficiary. We will provide a
change of Beneficiary form to be signed and filed with us. Any change will be
effective at the time you sign the written notice. Until we receive your written
notice to change a Beneficiary, we are entitled to rely on the most recent
Beneficiary information in our files. We will not be liable as to any payment or
settlement made prior to receiving the written notice. Accordingly, if you wish
to change your Beneficiary, you should deliver your written notice to us
promptly.
If you did not name a Beneficiary or unless otherwise provided in the
Beneficiary designation, if a Beneficiary predeceases the owner and there are no
other surviving Beneficiaries, the new Beneficiary will be:
o your spouse or, if he or she is no longer alive,
o your surviving children equally, or if you have no surviving children,
o your estate.
If more than one Beneficiary survives you, we will divide the death benefit
among your Beneficiaries according to your most recent written instructions. If
you have not given us written instructions, we will pay the death benefit in
equal amounts to the Beneficiaries. If one of the Beneficiaries dies before you,
we will divide the death benefit among the surviving Beneficiaries.
MODIFICATION OF THE CONTRACT
Only an Allstate officer may approve a change in or waive any provision of the
Contract. Any change or waiver must be in writing. None of our agents has the
authority to change or waive the provisions of the Contract. We may not change
the terms of the Contract without your consent, except to conform the Contract
to applicable law or changes in the law. If a provision of the Contract is
inconsistent with state law, we will follow state law.
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. No Beneficiary may assign benefits under the Contract until
they are due. We will not be bound by any assignment until the assignor signs it
and files it with us. We are not responsible for the validity of any assignment.
Federal law prohibits or restricts the assignment of benefits under many types
of retirement plans and the terms of such plans may themselves contain
restrictions on assignments. An assignment may also result in taxes or tax
penalties. You should consult with an attorney before trying to assign your
Contract.
<PAGE>
PURCHASES
- --------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
The minimum initial purchase payment for each Contract is as follows:
o $1,000 for Putnam Allstate Advisor Contracts
o $1,000 for Putnam Allstate Advisor Apex Contracts
o $10,000 for Putnam Allstate Advisor Plus Contracts
o $10,000 for Putnam Allstate Advisor Preferred Contracts
The minimum initial purchase payment for Qualified Contracts is $500, $10,000
for Putnam Allstate Advisor Plus and Putnam Allstate Advisor Preferred
Contracts. All subsequent purchase payments under a Contract must be $500 or
more. You may make purchase payments at any time prior to the Payout Start Date.
The most we accept without our prior approval is $1 million. We reserve the
right to limit the availability of the investment alternatives for additional
investments. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your sales representative for detailed information.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. For Putnam Allstate Advisor
Apex Contracts, each purchase payment allocated to an investment alternative
will be reduced by the applicable sales charge. The allocation you specify on
your application will be effective immediately. All allocations must be in whole
percents that total 100% or in whole dollars. You can change your allocations by
calling 1-800-390-1277.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes, usually 4 p.m. Eastern Time (3 p.m. Central Time). If we receive your
purchase payment after 3 p.m. Central Time on any Valuation Date, we will credit
your purchase payment using the Accumulation Unit Values computed on the next
Valuation Date.
CREDIT ENHANCEMENT (Putnam Allstate Advisor Plus Contracts only)
Each time you make a purchase payment, we will add to your Contract Value a
Credit Enhancement equal to 4% of the purchase payment. If you exercise your
Right to Cancel the Contract, the amount we refund to you will not include any
Credit Enhancement. See "Right to Cancel" below for details. The Putnam Allstate
Advisor Plus Contract may not be available in all states.
We will allocate any Credit Enhancements to the investment alternatives
according to the allocation instructions you have on file with us at the time we
receive your purchase payment. We will allocate each Credit Enhancement among
the investment alternatives in the same proportions as the corresponding
purchase payment. For purposes of determining the death benefit and the amount
applied to an Income Plan, Credit Enhancements will be included with purchase
payments. We do not consider Credit Enhancements to be investments in the
Contract for income tax purposes.
We use a portion of the withdrawal charge and mortality and expense risk charge
to help recover the cost of providing the Credit Enhancement under the Contract.
See "Expenses." Under certain circumstances (such as a period of poor market
performance) the cost associated with the Credit Enhancement may exceed the sum
of the Credit Enhancement and any related earnings. You should consider this
possibility before purchasing the Contract.
RIGHT TO CANCEL
You may cancel your Contract by returning it to us within the Cancellation
Period, which is the 20 day period after you receive the Contract, or such
longer period that your state may require. You may return it by delivering it or
mailing it to us. If you exercise this "Right to Cancel," the Contract
terminates and we will pay you the full amount of your purchase payments
allocated to the Fixed Account. We also will return your purchase payments
allocated to the Variable Account adjusted, to the extent federal or state law
permits, to reflect investment gain or loss that occurred from the date of
allocation through the date of cancellation.
For Putnam Allstate Advisor Plus Contracts, we are applying for regulatory
relief to enable us to recover the amount of any Credit Enhancement applied to
Contracts that are cancelled during the Cancellation Period. Until we receive
such relief, we will return, upon cancellation, the amount you would have
received had there been no Credit Enhancement. After we receive the requested
regulatory relief, the amount we return to you upon exercise of this Right to
Cancel will not include any Credit Enhancement or the amount of charges deducted
prior to cancellation but will reflect, except in states where we are required
to return the amount of your purchase payments, any investment gain or loss
associated with your Variable Account purchase payments and with the Credit
Enhancement. We reserve the right to allocate your purchase payments to the
Putnam Money Market Variable Sub-Account during the Cancellation Period.
<PAGE>
CONTRACT VALUE
- --------------------------------------------------------------------------------
On the Issue Date, the Contract Value is equal to:
o your initial purchase payment for Putnam Allstate Advisor Contracts
o your initial purchase payment less applicable sales charge for Putnam
Allstate Advisor Apex Contracts
o your initial purchase payment plus the Credit Enhancement for Putnam
Allstate Advisor Plus Contracts
o your initial purchase payment for Putnam Allstate Advisor Preferred
Contracts
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus the value of your interest in the Fixed
Account Option(s) offered by your Contract.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. For Putnam Allstate Advisor Plus Contracts, we
also would credit you with an additional 40 Accumulation Units of the Variable
Sub-Account to reflect the 4% Credit Enhancement on your purchase payment. See
"Credit Enhancement." For Putnam Allstate Advisor Apex Contracts, please
remember that a sales charge will reduce the amount of the purchase payment
allocated. Withdrawals and transfers from a Variable Sub-Account would, of
course, reduce the number of Accumulation Units of that Sub-Account allocated to
your Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
for each Contract will rise or fall to reflect:
o changes in the share price of the Fund in which the Variable Sub-Account
invests, and
o the deduction of amounts reflecting the mortality and expense risk charge,
and any provision for taxes that have accrued since we last calculated the
Accumulation Unit Value.
We determine withdrawal charges, Retirement Income Guarantee charges (if
applicable), transfer fees, and contract maintenance charges (if applicable)
separately for each Contract. They do not affect the Accumulation Unit Value.
Instead, we obtain payment of those charges and fees by redeeming Accumulation
Units. For details on how we compute Accumulation Unit Values, please refer to
the Statement of Additional Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account
for each Contract on each Valuation Date. We also determine separate sets of
Accumulation Unit Values for each Contract that reflect the cost of the Enhanced
Beneficiary Protection Option described on page __ below.
You should refer to the prospectus for the Funds that accompanies this
prospectus for a description of how the assets of each Fund are valued, since
that determination directly bears on the Accumulation Unit Value of the
corresponding Variable Sub-Account and, therefore, your Contract Value.
<PAGE>
INVESTMENT ALTERNATIVES: The Variable Sub-Accounts
- --------------------------------------------------------------------------------
You may allocate your purchase payments to up to 24 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Fund. Each Fund
has its own investment objective(s) and policies. We briefly describe the Funds
below.
For more complete information about each Fund, including expenses and risks
associated with the Fund, please refer to the accompanying prospectus for the
Fund. You should carefully review the Fund prospectuses before allocating
amounts to the Variable Sub-Accounts. Putnam Investment Management, Inc.
("Putnam Management") serves as the investment adviser to each Fund.
<TABLE>
<CAPTION>
<S> <C>
Fund: Each Fund Seeks:
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT American Government Income Fund High current income with preservation of capital as a
secondary objective
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Diversified Income Fund High current income consistent with capital preservation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston To provide a balanced investment composed of a well
diversified portfolio of stocks and bonds that will produce
both capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Global Asset Allocation Fund A high level of long-term total return consistent with
preservation of capital
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Global Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Growth and Income Fund Capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Growth Opportunity Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Health Sciences Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT High Yield Fund High current income. Capital growth is a secondary
objective when consistent with high current income.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Income Fund Current income consistent with preservation of capital
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International Growth Fund Capital growth
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International Growth and Income Fund Capital growth. Current income is a secondary objective.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International New Opportunities Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Investors Fund Long-term growth of capital and any increased income that
results from this growth
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Money Market Fund As high a rate of current income as Putnam Management
believes is consistent with preservation of capital
and maintenance of liquidity.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT New Opportunities Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT New Value Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Research Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Small Cap Value Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund Capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Vista Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Voyager Fund Capital appreciation
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Funds in which those Variable Sub-Accounts invest. You bear the investment
risk that the Funds might not meet their investment objectives. Shares of the
Funds are not deposits, or obligations of, or guaranteed or endorsed by any bank
and are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
<PAGE>
INVESTMENT ALTERNATIVES: The Fixed Account
- --------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. The Fixed Account Options available under each Contract are as follows:
<TABLE>
<CAPTION>
Advisor Advisor Apex Advisor Plus Advisor Preferred
<S> <C> <C> <C> <C>
Standard Fixed Account Option Yes Yes Yes Yes
6 Month Dollar Cost Averaging Option Yes Yes No No
12 Month Dollar Cost Averaging Option Yes Yes No No
</TABLE>
We may offer additional Fixed Account options in the future. We will credit a
minimum annual interest rate of 3% to money you allocate to any of the Fixed
Account Options available under your Contract. The Fixed Account Options may not
be available in all states. In addition, Allstate may limit the availability of
the Standard Fixed Account Option. Please consult with your representative for
current information. The Fixed Account supports our insurance and annuity
obligations. The Fixed Account consists of our general assets other than those
in segregated asset accounts. We have sole discretion to invest the assets of
the Fixed Account, subject to applicable law. Any money you allocate to the
Fixed Account does not entitle you to share in the investment experience of the
Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTIONS (Putnam Allstate Advisor and Putnam
Allstate Advisor Apex Contracts only)
The Dollar Cost Averaging Fixed Account Options are two of the investment
alternatives that you can use to establish a Dollar Cost Averaging Program, as
described on page __. These options allow you to allocate purchase payments to
the Fixed Account either for up to 6 months (the "6 Month Dollar Cost Averaging
Option") or for up to 12 months (the "12 Month Dollar Cost Averaging Option").
Your purchase payments will earn interest for the period you select at the
current rates in effect at the time of allocation. Rates may differ from those
available for the Standard Fixed Account Option described below. For Putnam
Allstate Advisor Apex Contracts, please remember that the applicable sales
charge will reduce the amount of your purchase payment allocated.
You must transfer all of your money out of the 6 or 12 Month Dollar Cost
Averaging Options to other investment alternatives in equal installments. At the
end of the applicable 6 or 12 month period, we will transfer any remaining
amounts in the 6 or 12 Month Dollar Cost Averaging Options to the Putnam Money
Market Variable Sub-Account unless you request a different investment
alternative. Transfers out of the 6 or 12 Month Dollar Cost Averaging Options do
not count towards the 12 transfers you can make without paying a transfer fee.
You may not transfer money from other investment alternatives to either the 6 or
12 Month Dollar Cost Averaging Options.
The 6 or 12 Month Dollar Cost Averaging Options may not be available in your
state. Please check with your representative for availability.
STANDARD FIXED ACCOUNT OPTION
Each purchase payment or transfer allocated to the Standard Fixed Account Option
earns interest at the current rate in effect at the time of allocation. For
Putnam Allstate Advisor Apex Contracts, please remember that the applicable
sales charge will reduce the amount of your purchase payment allocated. For
Putnam Allstate Advisor Plus Contracts each purchase payment plus the
appropriate portion of the Credit Enhancement allocated to the Standard Fixed
Account Option earns interest at the current rate in effect at the time of
allocation.
We guarantee that rate for a period of years we call Guarantee Periods. We are
currently offering Guarantee Periods of 1 year in length. In the future we may
offer Guarantee Periods of different lengths or stop offering some Guarantee
Periods. You select a Guarantee Period for each purchase or transfer. After the
initial Guarantee Period, we will guarantee a renewal rate.
We will credit interest daily at a rate that will compound over the year to the
annual interest rate we guaranteed at the time of allocation.
<PAGE>
INVESTMENT ALTERNATIVES: Transfers
- -------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. We do not permit transfers into any Dollar Cost
Averaging Fixed Account Option. You may request transfers in writing on a form
that we provided or by telephone according to the procedure described below.
You may make 12 transfers per Contract Year without charge. A transfer fee equal
to 0.50% of the amount transferred applies to each transfer after the 12th
transfer in any Contract Year.
The minimum amount that you may transfer from the Standard Fixed Account Option
or a Variable Sub-Account is $100 or the total remaining balance in the Standard
Fixed Account Option or the Variable Sub-Account, if less. These limitations do
not apply to the 6-month or 12-month Dollar Cost Averaging Fixed Account
Options.
The most you can transfer from the Standard Fixed Account Option during any
Contract Year is the greater of (i) 30% of the Standard Fixed Account Option
balance as of the last Contract Anniversary or (ii) the greatest dollar amount
of any prior transfer from the Standard Fixed Account Option. This limitation
does not apply to the Dollar Cost Averaging Program. Also, if the interest rate
on any renewed Guarantee Period is at least one percentage point less than the
previous interest rate, you may transfer up to 100% of the monies receiving that
reduced rate within 60 days of the notification of the interest rate decrease.
We will process transfer requests that we receive before 3:00 p.m. Central Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 3:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Options for up to 6 months from the date
we receive your request. If we decide to postpone transfers from any Fixed
Account Option for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date we receive the
transfer request to the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may make up to 12 transfers per
Contract Year. You may not convert any portion of your fixed income payments
into variable income payments. You may make transfers from the Variable
Sub-Accounts to increase the proportion of your income payments consisting of
fixed income payments if Income Plan 3, described below, is in effect.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-390-1277. The cut off time
for telephone transfer requests is 3:00 p.m. Central time. In the event that the
New York Stock Exchange closes early, i.e., before 3:00 p.m. Central Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
EXCESSIVE TRADING LIMITS
We reserve the right to limit transfers in any Contract Year, or to refuse any
transfer request for a Contract Owner or certain Contract Owners, if:
o we believe, in our sole discretion, that excessive trading by such
Contract Owner or Owners, or a specific transfer request or group of
transfer requests, may have a detrimental effect on the Accumulation
Unit Values of any Variable Sub-Account or the share prices of the
corresponding Funds or would be to the disadvantage of other Contract
Owners; or
o we are informed by one or more of the corresponding Funds that they
intend to restrict the purchase or redemption of Fund shares because of
excessive trading or because they believe that a specific transfer or
group of transfers would have a detrimental effect on the prices of
Fund shares.
We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract Owners.
DOLLAR COST AVERAGING PROGRAM
You may automatically transfer a set amount from any Variable Sub-Account or
from any Fixed Account Option available under your Contract to any of the other
Variable Sub-Accounts through our Dollar Cost Averaging Program. The Program is
available only during the Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market.
AUTOMATIC FUND REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Fund Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
Example:
Assume that you want your initial purchase payment split among 2
Variable Sub-Accounts. You want 40% to be in the Putnam Income Variable
Sub-Account and 60% to be in the Putnam Global Growth Variable
Sub-Account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first
quarter, the Putnam Income Variable Sub-Account now represents 50% of
your holdings because of its increase in value. If you choose to have
your holdings in a Contract or Contracts rebalanced quarterly, on the
first day of the next quarter we would sell some of your units in the
Putnam Income Variable Sub-Account for the appropriate Contract(s) and
use the money to buy more units in the Putnam Global Variable
Sub-Account so that the percentage allocations would again be 40% and
60% respectively.
The Automatic Fund Rebalancing Program is available only during the Accumulation
Phase. The transfers made under the program do not count towards the 12
transfers you can make without paying a transfer fee, and are not subject to a
transfer fee. We may sometimes refer to this Program as the "Putnam Automatic
Rebalancing Program."
Fund rebalancing is consistent with maintaining your allocation of investments
among market segments, although it is accomplished by reducing your Contract
Value allocated to the better performing segments.
<PAGE>
EXPENSES
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As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE (Putnam Allstate Advisor Contracts only)
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Putnam Money
Market Variable Sub-Account. If there are insufficient assets in that Variable
Sub-Account, we will deduct the charge proportionally from the other Variable
Sub-Accounts. We also will deduct this charge if you withdraw your entire
Contract Value, unless your Contract qualifies for a waiver. During the Payout
Phase, we will deduct the charge proportionately from each income payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract Owners and
regulatory agencies. We cannot increase the charge. We will waive this charge
if:
o your total Contract Value is greater than $50,000 on a Contract Anniversary
or on the Payout Start Date, or
o all of your money is allocated to the Fixed Account Options on a Contract
Anniversary or all income payments are fixed income payments.
We also reserve the right to waive this charge if you own more than one Contract
and the Contracts meet certain minimum dollar amount requirements. In addition,
we reserve the right to waive this charge for all Contracts.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily from the net assets you have
invested in the Variable Sub-Accounts. The annual rate of the charge is:
o 1.25% for Putnam Allstate Advisor Contracts
o 0.80% for Putnam Allstate Advisor Apex Contracts
o 1.60% for Putnam Allstate Advisor Plus Contracts
o 1.65% for Putnam Allstate Advisor Preferred Contracts
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will be sufficient in the future to
cover the cost of administering the Contract. The mortality and expense risk
charge also helps pay for the cost of the Credit Enhancement under the Putnam
Allstate Advisor Plus Contracts. If the charges under the Contract are not
sufficient, then Allstate will bear the loss. If you select the Enhanced
Beneficiary Protection Option, the mortality and expense risk charge will
include an additional 0.15% for the Option.
Allstate reserves the right to raise the Enhanced Beneficiary Protection Option
charge to up to 0.25%. However, once your Option is in effect, Allstate cannot
change the fee that applies to your Contract. We charge the additional fee for
the Enhanced Beneficiary Protection Option to compensate us for the additional
risk that we accept by providing the Option.
We guarantee the mortality and expense risk charge and we cannot increase it. We
assess the mortality and expense risk charge during both during the Accumulation
Phase and the Payout Phase.
RETIREMENT INCOME GUARANTEE CHARGE
We impose a separate charge for each Retirement Income Guarantee Rider. The
charges equal, on an annual basis, 0.05% of the income base for Retirement
Income Guarantee Rider 1 and 0.30% of the income base for Retirement Income
Guarantee Rider 2. We reserve the right to change the Rider fee. However, once
we issue your Rider, we cannot change the Rider fee that applies to your
Contract. The Rider 1 fee will never exceed 0.15% and the Rider 2 fee will never
exceed 0.50%. See "Retirement Income Guarantee Riders" for details.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The fee
is equal to 0.50% of the dollar amount transferred. We will not charge a
transfer fee on transfers that are part of a Dollar Cost Averaging Program or
Automatic Fund Rebalancing Program.
SALES CHARGE (Putnam Allstate Advisor Apex Contracts only)
We may assess a sales charge on all purchase payments ranging from 0.50% to
5.75% of the amount of the purchase payment. The sales charge percentage will
vary based upon the amount of the purchase payment(s) received. A schedule
showing how the sales charge is assessed appears on page __, above.
We use the amounts obtained from the sales charge to pay sales commissions and
other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the sales charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including any profit which may arise from the mortality
and expense risk charge or any other charges or fee described above, to make up
any difference.
Reduction of Sales Charge. You may also be entitled to a reduced sales charge if
you (1) sign a letter of intent and invest a combined purchase payment amount of
$50,000 or more within a 13-month period; and/or (2) have related contracts with
us that qualify for rights of accumulation privileges. See "Rights of
Accumulation" below. In addition, no sales charge will apply to purchase
payments made under Contracts issued to employees of Allstate, certain other
eligible organizations, and to certain customers of participating financial
services corporations in conjunction with a new or existing asset based
brokerage account program such as a "wrap fee" or "fee based" program in states
where approved.
Letter of Intent: A letter of intent allows you to set your own investment goal
of $50,000 or more over a 13-month period. We base the sales charge on the
purchase payments you make during the 13-month period on your investment goal.
In essence, we reduce your sales charge on purchase payments made during the
13-month period as though you invested the total amount of purchase payments
(your investment goal) in one lump sum.
Example:
Assume as part of your Contract application you sign a letter of
intent indicating an investment goal of $50,000 over a 13-month
period. The sales charge corresponding to your investment goal is
4.50%. You make an initial purchase payment of $20,000. We deduct a
reduced sales charge of 4.50% from your initial purchase payment.
Two months later you make a subsequent purchase payment of $30,000.
We again deduct a reduced sales charge of 4.50% from your purchase
payment. Without a letter of intent the sales charge for each
purchase payment would have been 5.75%.
You may elect to participate in the letter of intent program at any time.
However, we do not retroactively reduce sales charges on purchase payments made
before we receive your letter of intent. If you choose to participate in this
program at the time you apply for the Contract, you must complete the letter of
intent section on the application. If you elect to participate in the program
after your Contract is issued, you must complete the appropriate form. The
letter of intent form is available by calling our Annuity Service Center at
1-800/390-1277.
You are not obligated to reach your investment goal. If you do not achieve your
investment goal by the end of the 13-month period or upon a full surrender prior
to the end of the 13-month period, we will deduct from your Contract the
difference between (1) the sales charge applicable to the actual amount of
purchase payments you made during the period and (2) the sales charge you
actually paid. These charges will be deducted from your Contract proportionately
from each investment alternative at the end of the 13-month period.
If you exceed your investment goal and reach the next breakpoint, the sales
charge deducted on the next payment is based on the next breakpoint level.
However, we do not retroactively reduce sales charges on previous purchase
payments.
At any time during the 13-month period, you may increase your investment goal.
You must inform us in writing. We include purchase payments received during the
90 days prior to your notice in determining the sales charge on purchase
payments made from the date of notice through the end of the original 13-month
period.
We reserve the right to modify, suspend or terminate this program at any time.
This program may not be available in all states.
Rights Of Accumulation: You may qualify for a reduced sales charge through
rights of accumulation. Rights of accumulation involves combining your current
purchase payment with your current Contract Value of your Putnam Allstate
Advisor Apex Contract and/or the current Contract Values of eligible related
contracts. If through accumulation you reach the next breakpoint level, we
reduce your sales charge accordingly.
Related contracts include certain other Putnam Allstate Advisor Apex Contracts
owned by you. There may be other requirements for qualification. For information
on which related contracts qualify for rights of accumulation privileges, please
contact your investment representative.
In order to use rights of accumulation to reduce your sales charge, for each
purchase payment, you or your investment representative must inform us in
writing of the related contracts.
The sales charge for purchase payments will be based on the breakpoint
corresponding to the sum of (1) your new purchase payment; and (2) your current
Contract Value; and (3) the current Contract Value(s) of your eligible related
contract(s).
Example:
Assume your Contract has a current Contract Value of $20,000. You
have a second Contract with us that qualifies for rights of
accumulation that has a current Contract Value of $25,000. You make
a $5,000 purchase payment to your current Contract and include your
rights of accumulation number with your payment. To determine the
sales charge applicable to your purchase payment we first calculate
the sum of (1) your current Contract Value ($20,000); (2) the
current Contract Value of your related Contract ($25,000); and (3)
your current purchase payment ($5,000). The sum of these values is
$50,000. We deduct the sales charge corresponding to a $50,000
purchase payment, or 4.50%, from your $5,000 purchase payment.
We reserve the right to modify, suspend or terminate this program
at any time. This program may not be available in all states.
WITHDRAWAL CHARGE
We may assess a withdrawal charge from the purchase payment(s) you withdraw. The
amount of the charge will depend on the number of years that have elapsed since
we received the purchase payment being withdrawn. A schedule showing the charge
applicable for each Contract appears on page ___, above. The Contracts differ in
the following respects:
Putnam Allstate Advisor Contracts
Under Putnam Allstate Advisor Contracts, you can withdraw up to the Free
Withdrawal Amount each Contract Year without paying the withdrawal charge. The
Free Withdrawal Amount is the greater of earnings not previously withdrawn, or
15% of purchase payments. Unused portions of this 15% "Free Withdrawal Amount"
are not carried forward to future Contract Years.
Putnam Allstate Advisor Apex Contracts
The withdrawal charge for Putnam Allstate Advisor Apex Contracts currently
applies only to Contracts that have total purchase payments of at least
$1,000,000. There is no Free Withdrawal Amount under Putnam Allstate Advisor
Apex Contracts.
Putnam Allstate Advisor Plus Contracts
Under Putnam Allstate Advisor Plus Contracts, you can withdraw up to the Free
Withdrawal Amount each Contract Year without paying the withdrawal charge. The
Free Withdrawal Amount is 15% of total purchase payments. Unused portions of
this 15% "Free Withdrawal Amount" are not carried forward to future Contract
Years. Credit Enhancements are not considered Purchase Payments when determining
the Free Withdrawal Amount.
Putnam Allstate Advisor Preferred Contracts
There is no Free Withdrawal Amount under Putnam Allstate Advisor Preferred
Contracts.
All Contracts
We will deduct withdrawal charges, if applicable, from the amount paid. For
purposes of the withdrawal charge, we will treat withdrawals as coming from the
oldest purchase payments first. However, for federal income tax purposes,
earnings are considered to come out first, which means you pay taxes on the
earnings portion of your withdrawal.
We do not apply a withdrawal charge in the following situations:
o on the Payout Start Date (a withdrawal charge may apply if you elect to
receive income payments for a specified period of less than 120 months);
o the death of the Contract Owner or Annuitant (unless the Settlement Value
is used);
o withdrawals taken to satisfy IRS minimum distribution rules for the
Contract; or
o withdrawals that qualify for one of the waivers described below.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts, and to help defray the cost of the Credit Enhancement for the Putnam
Allstate Advisor Plus Contracts. To the extent that the withdrawal charge does
not cover all sales commissions and other promotional or distribution expenses,
or the cost of the Credit Enhancement, we may use any of our corporate assets,
including potential profit which may arise from the mortality and expense risk
charge or any other charges or fee described above, to make up any difference.
Withdrawals also may be subject to tax penalties or income tax. You should
consult your own tax counsel or other tax advisers regarding any withdrawals.
The following waivers are available for Putnam Allstate Advisor and Putnam
Allstate Advisor Plus Contracts only.
Confinement Waiver. We will waive the withdrawal charge on any withdrawal taken
prior to the Payout Start Date under your Contract if the following conditions
are satisfied:
1) you or the Annuitant, if the Contract Owner is not a living
individual, are first confined to a long term care facility or a
hospital for at least 90 consecutive days. You or the Annuitant must
enter the long term care facility or hospital at least 30 days after
the Issue Date,
2) we receive your request for withdrawal and written proof of the stay
no later than 90 days following the end of your or the Annuitant's stay
at the long term care facility or hospital, and
3) a physician must have prescribed the stay and the stay must be
medically necessary (as defined in the Contract).
Terminal Illness Waiver. We will waive the withdrawal charge on any withdrawal
under your Contract taken prior to the Payout Start Date if:
1) you or the Annuitant, if the Contract Owner is not a living
individual, are diagnosed by a physician as having a terminal illness
(as defined in the Contract) at least 30 days after the Issue Date,
and
2) you provide adequate proof of diagnosis to us before or at the time
you request the withdrawal.
Unemployment Waiver. We will waive the withdrawal charge on one partial or full
withdrawal from your Contract, if you meet the following requirements:
1) you or the Annuitant, if the Contract Owner is not a living
individual, become unemployed at least one year after the Issue Date,
2) you or the Annuitant receive unemployment compensation (as defined in
the Contract) for at least 30 days as a result of that unemployment,
and
3) you or the Annuitant claim this benefit within 180 days of your or the
Annuitant's initial receipt of unemployment compensation.
You may exercise this benefit once before the Payout Start Date.
Please refer to your Contract for more detailed information about the terms and
conditions of these waivers. These waivers are not available for Putnam Allstate
Advisor Apex and Putnam Allstate Advisor Preferred Contracts.
The laws of your state may limit the availability of these waivers and may also
change certain terms and/or benefits available under the waivers. You should
consult your Contract for further details on these variations. Also, even if you
do not need to pay our withdrawal charge because of these waivers, you still may
be required to pay taxes or tax penalties on the amount withdrawn. You should
consult your tax adviser to determine the effect of a withdrawal on your taxes.
PREMIUM TAXES
Some states and other governmental entities (e.g., municipalities) charge
premium taxes or similar taxes. We are responsible for paying these taxes and
will deduct them from your Contract Value. Some of these taxes are due when the
Contract is issued, others are due when income payments begin or upon surrender.
Our current practice is not to charge anyone for these taxes until income
payments begin or when a total withdrawal occurs including payment upon death.
We may some time in the future discontinue this practice and deduct premium
taxes from the purchase payments. Premium taxes generally range from 0% to 4%,
depending on the state.
At the Payout Start Date, we deduct the charge for premium taxes from each
investment alternative in the proportion that the Contract Owner's value in the
investment alternative bears to the total Contract Value.
OTHER EXPENSES
Each Fund deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Fund whose shares are held by
the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectus for the Funds. For a summary of current estimates of
those charges and expenses, see pages ___ above. We may receive compensation
from the Funds' investment adviser, distributor, or their affiliates for
administrative services we provide to the Funds.
<PAGE>
ACCESS TO YOUR MONEY
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You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page __.
The amount payable upon withdrawal is the Contract Value next computed after we
receive the request for a withdrawal at our home office, less any applicable
withdrawal charges, income tax withholding, any applicable contract maintenance
charge, any applicable Retirement Guarantee Rider fee, and any premium taxes. We
will pay withdrawals from the Variable Account within 7 days of receipt of the
request, subject to postponement in certain circumstances.
You can withdraw money from the Variable Account or the Fixed Account Option(s)
available under your Contract. To complete a partial withdrawal from the
Variable Account, we will cancel Accumulation Units in an amount equal to the
withdrawal and any applicable withdrawal charge and premium taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time. If you request a total
withdrawal, we may require that you return your Contract to us.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1) the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2) an emergency exists as defined by the SEC, or
3) the SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Option(s)
available under your Contract for up to 6 months or shorter period if required
by law. If we delay payment or transfer for 30 days or more, we will pay
interest as required by law.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. Please consult your sales representative or call us at 1-800-390-1277 for
more information. Depending on fluctuations in the value of the Variable
Sub-Accounts and the value of the Fixed Account Option(s) available under your
Contract, systematic withdrawals may reduce or even exhaust the Contract Value.
Income taxes may apply to systematic withdrawals. Please consult your tax
adviser before taking any withdrawal.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce the Contract Value to less
than $1,000, we may treat it as a request to withdraw your entire Contract
Value. Your Contract will terminate if you withdraw all of your Contract Value.
We will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less withdrawal and other charges and taxes.
<PAGE>
INCOME PAYMENTS
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PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value to an Income
Plan. The Payout Start Date must be at least 30 days after the Issue Date and on
or before the later of:
o the Annuitant's 90th birthday, or
o the 10th Contract Anniversary.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
You may choose and change your choice of Income Plan until 30 days before the
Payout Start Date. If you do not select an Income Plan, we will make income
payments in accordance with Income Plan 1 with guaranteed payments for 10 years.
After the Payout Start Date, you may not make withdrawals (except as described
below) or change your choice of Income Plan.
Three Income Plans are available under the Contract. Each is available to
provide:
o fixed income payments;
o variable income payments; or
o a combination of the two.
The three Income Plans are:
Income Plan 1 -- Life Income with Guaranteed Payments. Under this plan,
we make periodic income payments for at least as long as the Annuitant
lives. If the Annuitant dies before we have made all of the guaranteed
income payments, we will continue to pay the remainder of the
guaranteed income payments as required by the Contract.
Income Plan 2 -- Joint and Survivor Life Income with Guaranteed
Payments. Under this plan, we make periodic income payments for at
least as long as either the Annuitant or the joint Annuitant, named at
the time the plan was selected, is alive. If both the Annuitant and the
joint Annuitant die before we have made all of the guaranteed income
payments, we will continue to pay the remainder of the guaranteed
income payments as required by the Contract.
Income Plan 3 -- Guaranteed Payments for a Specified Period (5 Years to
30 Years). Under this plan, we make periodic income payments for the
period you have chosen. These payments do not depend on the Annuitant's
life. Income payments for less than 120 months may be subject to a
withdrawal charge (does not apply to Putnam Allstate Advisor Apex
Contracts). We will deduct the mortality and expense risk charge from
the assets of the Variable Sub-Accounts supporting this Plan even
though we may not bear any mortality risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amount of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant are alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving income payments that do not
depend on the life of the Annuitant (such as under Income Plan 3). In that case
you may terminate all or part of the income payments at any time and receive a
lump sum equal to the present value of the remaining payments associated with
the amount withdrawn. To determine the present value of any remaining variable
income payments being withdrawn, we use a discount rate equal to the assumed
annual investment rate that we use to compute such variable income payments. The
minimum amount you may withdraw under this feature is $1,000. A withdrawal
charge may apply. Income payments to Beneficiaries may be subject to
restrictions established by the Contract owner. We also deduct applicable
premium taxes from the Contract Value at the Payout Start Date.
We may make other Income Plans available. You may obtain information about them
by writing or calling us.
You must apply at least the Contract Value in the Fixed Account on the Payout
Start Date to fixed income payments. If you wish to apply any portion of your
Fixed Account balance to provide variable income payments, you should plan ahead
and transfer that amount to the Variable Sub-Accounts prior to the Payout Start
Date. If you do not tell us how to allocate your Contract Value among fixed and
variable income payments, we will apply your Contract Value in the Variable
Account to variable income payments and your Contract Value in the Fixed Account
to fixed income payments.
We will apply your Contract Value, less applicable taxes, to your Income Plan on
the Payout Start Date. We can make income payments in monthly, quarterly,
semi-annual or annual installments, as you select. If the Contract Owner has not
made any purchase payments for at least 2 years preceding the Payout Start Date,
and the Contract Value is less than $2,000, or not enough to provide an initial
payment of at least $20, and state law permits, we may:
o terminate the Contract and pay you the Contract value, less any
applicable taxes, in a lump sum instead of the periodic payments you
have chosen, or
o reduce the frequency of your payments so that each payment will be at
least $20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Funds; and (b) the Annuitant could live longer or shorter than we
expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. (We reserve the right to
offer other assumed investment rates.) If the actual net investment return of
the Variable Sub-Accounts you choose is less than this assumed investment rate,
then the dollar amount of your variable income payments will decrease. The
dollar amount of your variable income payments will increase, however, if the
actual net investment return exceeds the assumed investment rate. The dollar
amount of the variable income payments stays level if the net investment return
equals the assumed investment rate. Please refer to the Statement of Additional
Information for more detailed information as to how we determine variable income
payments.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1) deducting any applicable premium tax; and
2) applying the resulting amount to the greater of (a) the appropriate
value from the income payment table in your Contract or (b) such other
value as we are offering at that time.
We may defer making fixed income payments for a period of up to 6 months or
whatever shorter time state law may require. If we defer payments for 30 days or
more, we will pay interest as required by law from the date we receive the
withdrawal request to the date we make payment.
RETIREMENT INCOME GUARANTEE RIDERS
For owners up to and including age 75, you have the option to add to your
Contract one of two Retirement Income Guarantee Riders (Rider 1 or Rider 2).
Each Rider guarantees a minimum dollar amount (we call the "guaranteed income
benefit") to be applied to an Income Plan. You may exercise this benefit up to
the your latest Payout Start Date. The Riders may not be available in all
states.
Eligibility. To qualify for this benefit, you must meet the following conditions
as of the Payout Start Date:
o You must elect a Payout Start Date that is on or after the 10th
anniversary of the date we issued the Rider (the "Rider Date");
o The Payout Start Date must occur during the 30 day period following a
Contract Anniversary;
o You must elect to receive fixed income payments; and
o The Income Plan you have selected must provide for payments guaranteed
for either a single life or joint lives with a specified period of at
least:
o 10 years, if the youngest Annuitant's age is 80 or less on the date
the amount is applied, or
o 5 years, if the youngest Annuitant's age is greater than 80 on the
date the amount is applied.
Retirement Income Guarantee Rider 1. This Rider guarantees that the amount you
apply to an Income Plan will not be less than the total of your purchase
payments, including any Credit Enhancements applied under Putnam Allstate
Advisor Plus Contracts, less any withdrawals and any applicable taxes.
The current charge for this Rider, on an annual basis, is 0.05% multiplied by
the Income Base in effect on each Contract Anniversary. We deduct the fee only
from your assets in the Variable Sub-Account(s). In the case of a full
withdrawal of the Contract Value on any date other than the Contract
Anniversary, we will deduct from the amount paid upon withdrawal a Rider fee
equal to 0.05% multiplied by the Income Base immediately prior to the withdrawal
pro rated to reflect the number of days the Rider was in effect during the
current Contract Year.
We calculate the Income Base that we use to determine the value of the
guaranteed income benefit as follows:
1) On the Rider Date, the Income Base is equal to the Contract Value.
2) After the Rider Date, we recalculate the Income Base when a purchase
payment or withdrawal is made as follows:
(a) For purchase payments, the Income Base is equal to the most recently
calculated Income Base plus the purchase payment (and any Credit
Enhancement in the case of Putnam Allstate Advisor Plus Contracts).
(b) For withdrawals, the Income Base is equal to the most recently
calculated Income Base reduced by a withdrawal adjustment, described
below.
In the absence of any withdrawals or purchase payments, the Income Base will be
equal to the Contract Value as of the Rider Date.
The withdrawal adjustment is equal to (1) divided by (2), with the result
multiplied by (3), where:
1) = withdrawal amount,
2) = the Contract Value immediately prior to the withdrawal, and
3) = the most recently calculated Income Base.
See Appendix B for an example of how the withdrawal adjustment applies.
The guaranteed income benefit amount is determined by applying the Income Base,
less any applicable taxes, to the guaranteed rates for the Income Plan that you
select. On the Payout Start Date, the income payment will be the greater of (i)
the income payment produced by the guaranteed income benefit and (ii) the income
payment provided in the fixed amount income payment provision of the Contract.
Retirement Income Guarantee Rider 2. This Rider guarantees that the amount you
apply to an Income Plan will not be less than the greater of Income Base A or
Income Base B described below.
The current annual charge for this Rider is 0.30% multiplied by the Income Base
in effect on each Contract Anniversary. We deduct the fee only from the Variable
Sub-Account(s). In the case of a full withdrawal of the Contract Value on any
date other than the Contract Anniversary, we will deduct from the amount paid
upon withdrawal a Rider fee equal to 0.30% multiplied by the Income Base
immediately prior to the withdrawal pro rated to reflect the number of days the
Rider was in effect during the current Contract Year.
The Income Base is the greater of Income Base A and Income Base B. We determine
each Income Base as follows:
Income Base A. On the Rider Date, Income Base A is equal to the
Contract Value. After the Rider Date, we recalculate Income Base A as follows on
the Contract Anniversary and when a purchase payment or withdrawal is made:
1) For purchase payments, Income Base A is equal to the most recently
calculated Income Base plus the purchase payment (and any Credit
Enhancement in the case of Putnam Allstate Advisor Plus Contracts).
2) For withdrawals, Income Base A is equal to the most recently
calculated Income Base reduced by a withdrawal adjustment.
3) On each Contract Anniversary, Income Base A is equal to the greater of
the Contract Value on that date or the most recently calculated Income
Base A.
In the absence of any withdrawals or purchase payments, Income Base A will be
equal to the greatest Contract Value as of the Rider Date and all Contract
Anniversary Contract Values between the Rider Date and the Payout Start Date. We
will recalculate Income Base A for purchase payments, for withdrawals and on
Contract Anniversaries until the first Contract Anniversary after the 85th
birthday of the oldest Contract Owner or, if no Contract Owner is a living
individual, the oldest Annuitant. After that date, we will recalculate Income
Base A for purchase payments and withdrawals.
Income Base B. On the Rider Date, Income Base B is equal to the
Contract Value. After the Rider Date, Income Base B, plus any subsequent
purchase payments (and any Credit Enhancement in the case of Putnam Allstate
Advisor Plus Contracts) and less a withdrawal adjustment for any subsequent
withdrawals, will accumulate daily at a rate equal to 6% per year until the
first day of the month following the oldest Contract Owner's or, if the Contract
Owner is not a living individual, the Annuitant's 85th birthday.
For purposes of computing Income Base A or B, the withdrawal adjustment is equal
to (1) divided by (2), with the result multiplied by (3), where:
1) = withdrawal amount,
2) = the Contract Value immediately prior to the withdrawal, and
3) = the most recently calculated Income Base.
See Appendix B for an example of how the withdrawal adjustment applies.
We determine the guaranteed income benefit amount by applying the Income Base,
less any applicable taxes, to the guaranteed rates for the Income Plan that you
select. On the Payout Start Date, the income payment will be the greater of (i)
the income payment provided by the guaranteed income benefit and (ii) the income
payment provided in the fixed amount income payment provision of the Contract.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age, except in
states that require unisex tables. We reserve the right to use income payment
tables that do not distinguish on the basis of sex to the extent permitted by
applicable law. In certain employment-related situations, employers are required
by law to use the same income payment tables for men and women. Accordingly, if
the Contract is to be used in connection with an employment-related retirement
or benefit plan and we do not offer unisex annuity tables in your state, you
should consult with legal counsel as to whether the purchase of a Contract is
appropriate.
<PAGE>
DEATH BENEFITS
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We will pay a death benefit if, prior to the Payout Start Date:
1) any Contract Owner dies, or
2) the Annuitant dies.
We will pay the death benefit to the new Contract Owner as determined
immediately after the death. The new Contract Owner would be a surviving
Contract Owner or, if none, the Beneficiary. In the case of the death of the
Annuitant, we will pay the death benefit to the current Contract Owner.
Death Benefit Amount
Prior to the Payout Start Date, the death benefit is equal to the greatest of
the following death benefit alternatives:
1) the Contract Value as of the date we determine the death benefit, or
2) the sum of all purchase payments (and Credit Enhancements in the case
of Putnam Allstate Advisor Plus Contracts), less withdrawals, or
3) the most recent Maximum Anniversary Value prior to the date we
determine the death benefit (see "Maximum Anniversary Value" below).
We will determine the value of the death benefit as of the end of the Valuation
Date on which we receive a complete request for payment of the death benefit. If
we receive a request after 3 p.m. Central Time on a Valuation Date, we will
process the request as of the end of the following Valuation Date. A request for
payment of the death benefit must include Due Proof of Death. We will accept the
following documentation as "Due Proof of Death":
o a certified copy of a death certificate,
o a certified copy of a decree of a court of competent jurisdiction as
to the finding of death, or
o other documentation as we may accept in our sole discretion.
Maximum Anniversary Value. On the Issue Date, the Maximum Anniversary Value is
equal to the initial purchase payment (including Credit Enhancement in the case
of Putnam Allstate Advisor Plus Contracts). After the Issue Date, we recalculate
the Maximum Anniversary Value when a purchase payment or withdrawal is made or
on a Contract Anniversary as follows:
1) For purchase payments, the Maximum Anniversary Value is equal to
the most recently calculated Maximum Anniversary Value plus the
purchase payment (including Credit Enhancement in the case of
Putnam Allstate Advisor Plus Contracts).
2) For withdrawals, the Maximum Anniversary Value is equal to the
most recently calculated Maximum Anniversary Value reduced by a
withdrawal adjustment, as defined below.
3) On each Contract Anniversary, the Maximum Anniversary Value is
equal to the greater of the Contract Value or the most recently
calculated Maximum Anniversary Value.
In the absence of any withdrawals or purchase payments, the Maximum Anniversary
Value will be the greatest of all Contract Anniversary Contract Values on or
prior to the date we calculate the death benefit.
We will recalculate the Maximum Anniversary Value until the first Contract
Anniversary after the 80th birthday of the oldest Contract Owner or, if no
Contract Owner is a living individual, the Annuitant. After that date, we will
recalculate the Maximum Anniversary Value only for purchase payments and
withdrawals. The Maximum Anniversary Value will never be greater than the
maximum death benefit allowed by any applicable state non-forfeiture laws.
Withdrawal Adjustment. The withdrawal adjustment is equal to (a) divided by (b),
with the result multiplied by (c), where:
(a) = the withdrawal amount,
(b) = the Contract Value immediately prior to the withdrawal, and
(c) = the value of the applicable death benefit alternative immediately
prior to the withdrawal.
See Appendix A for an example of a withdrawal adjustment.
ENHANCED BENEFICIARY PROTECTION OPTION
For Contract Owners up to and including age 75, the Enhanced Beneficiary
Protection Option is an optional benefit that you may elect. If you elect the
Option, the death benefit will be the greater of the death benefit alternatives
(1) through (3) listed above, or (4) the Enhanced Beneficiary Protection Option.
The Enhanced Beneficiary Protection Option may not be available in all states.
We will issue a rider to your Contract if you elect the Option. The Enhanced
Beneficiary Protection Option on the date we issue the Contract rider ("Rider
Date") is equal to the Contract Value on that date. After the Rider Date, the
Enhanced Beneficiary Protection Option, plus any subsequent payments (including
Credit Enhancements in the case of Putnam Allstate Advisor Plus Contracts) and
less a withdrawal adjustment (computed as described above), will accumulate
daily at the rate of 5% per year until the earlier of:
1) the date we determine the death benefit, or
2) the first Contract Anniversary following the 80th birthday of the
oldest Contract Owner or, if no Contract Owner is a living individual,
the 80th birthday of the oldest Annuitant.
We will determine the death benefit under the Enhanced Beneficiary Protection
Option in the same manner as described under "Death Benefit Amount."
Death Benefit Payments
Death of Contract Owner. Within 180 days of the date of your death, the new
Contract Owner may elect to:
1) receive the death benefit in a lump sum, or
2) apply an amount equal to the death benefit to one of the available
Income Plans described above. The Payout Start Date must be within one
year of the date of your death. Income payments must be:
(a) over the life of the new Contract Owner,
(b) for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of the new Contract Owner, or
(c) over the life of new Contract Owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy
of the new Contract Owner.
Otherwise, the new Contract Owner will receive the Settlement Value. The
"Settlement Value" is the Contract Value, less any applicable withdrawal charge,
premium tax and, in the case of Putnam Allstate Advisor Contracts, contract
maintenance charge. The new Contract Owner may make a single withdrawal of any
amount within one year of the date of death without incurring a withdrawal
charge. We will calculate the Settlement Value as of the end of the Valuation
Date coinciding with the requested distribution date for payment or on the
mandatory distribution date of 5 years after the date of your death, whichever
is earlier. If we receive a request after 3 p.m. Central Time on a Valuation
Date, we will process the request as of the end of the following Valuation Date.
We are currently waiving the 180 day limit, but we reserve the right to enforce
the limitation in the future.
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the new Contract Owner is your spouse, then he or she may elect one of the
options listed above or may continue the Contract in the Accumulation Phase as
if the death had not occurred. On the date the Contract is continued, the
Contract Value will equal the amount of the death benefit as determined as of
the Valuation Date on which we received Due Proof of Death (the next Valuation
Date if we receive Due Proof of Death after 3 p.m. Central Time). The Contract
may only be continued once. If the surviving spouse continues the Contract in
the Accumulation Phase, the surviving spouse may make a single withdrawal of any
amount within 1 year of the date of death without incurring a withdrawal charge.
Prior to the Payout Start Date, the death benefit of the continued Contract will
be the greater of:
o the sum of all purchase payments (including Credit Enhancements
in the case of Putnam Allstate Advisor Plus Contracts) less any
withdrawals; or
o the Contract Value on the date we determine the death benefit; or
o the Maximum Anniversary Value as defined in the "Death Benefit
Amount" section, with the following changes:
o "Issue Date" is replaced by the date the Contract is continued,
o "initial purchase payment" (including Credit Enhancements in the
case of Putnam Allstate Advisor Plus Contracts) is replaced with
the death benefit as described at the end of the Valuation Period
during which we received Due Proof of Death.
For Contracts with the optional Enhanced Beneficiary Protection Option:
o the Enhanced Beneficiary Protection value as defined in the
Rider, with the following changes:
o "Rider Date" is replaced by the date the Contract is continued,
o "Contract Value" is replaced with the death benefit as described
at the end of the Valuation Period during which we received Due
Proof of Death.
If the new Contract Owner is a corporation, trust, or other non-natural person,
then the new Contract Owner may elect, within 180 days of your death, to receive
the death benefit in a lump sum or may elect to receive the Settlement Value in
a lump sum within 5 years of death. We are currently waiving the 180 day limit,
but we reserve the right to enforce the limitation in the future.
Death of Annuitant. If the Annuitant who is not also the Contract Owner dies
prior to the Payout Start Date, the Contract Owner must elect one of the
applicable options described below.
If the Contract Owner is a natural person, the Contract Owner may elect to
continue the Contract as if the death had not occurred, or, if we receive Due
Proof of Death within 180 days of the date of the Annuitant's death, the
Contract Owner may choose to:
1) receive the death benefit in a lump sum; or
2) apply the death benefit to an Income Plan that must begin within 1
year of the date of death.
If the Contract Owner elects to continue the Contract or to apply the death
benefit to an Income Plan, the new Annuitant will be the youngest Contract
Owner, unless the Contract Owner names a different Annuitant.
If the Contract Owner is a non-natural person, the non-natural Contract Owner
may elect, within 180 days of the Annuitant's date of death, to receive the
death benefit in a lump sum or may elect to receive the Settlement Value payable
in a lump sum within 5 years of the Annuitant's date of death. If the
non-natural Contract Owner does not make one of the above described elections,
the Settlement Value must be withdrawn by the non-natural Contract Owner on or
before the mandatory distribution date 5 years after the Annuitant's death. We
are currently waiving the 180 day limit, but we reserve the right to enforce the
limitation in the future.
<PAGE>
MORE INFORMATION
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ALLSTATE
Allstate is the issuer of the Contract. Allstate is an Illinois stock life
insurance company organized in 1957.
Allstate is licensed to operate in the District of Columbia, Puerto Rico, and
all states except New York. We intend to offer the Contract in those
jurisdictions in which we are licensed. Our home office is located at 3100
Sanders Road, Northbrook, Illinois, 60062.
Allstate is a wholly owned subsidiary of Allstate Insurance Company, a stock
property-liability insurance company incorporated under the laws of Illinois.
All of the outstanding capital stock of Allstate Insurance Company is owned by
The Allstate Corporation.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns A+ (Superior) to Allstate. Standard & Poor's Insurance Rating
Services assigns an AA+ (Very Strong) financial strength rating and Moody's
assigns an Aa2 (Excellent) financial strength rating to Allstate. These ratings
do not reflect the investment performance of the Variable Account. We may from
time to time advertise these ratings in our sales literature.
VARIABLE ACCOUNT
Allstate established the Allstate Life Insurance Company Separate Account A on
January 27, 1999. We have registered the Variable Account with the SEC as a unit
investment trust. The SEC does not supervise the management of the Variable
Account or Allstate.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under Illinois law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate.
The Variable Account consists of 24 Variable Sub-Accounts, each of which invests
in a corresponding Fund. We may add new Variable Sub-Accounts or eliminate one
or more of them, if we believe marketing, tax, or investment conditions so
warrant. We do not guarantee the investment performance of the Variable Account,
its Sub-Accounts or the Funds. We may use the Variable Account to fund our other
annuity contracts. We will account separately for each type of annuity contract
funded by the Variable Account.
THE FUNDS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Funds in shares of the
distributing Funds at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Funds held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Funds that we hold
directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Fund as of the record date of
the meeting. After the Payout Start Date the person receiving income payments
has the voting interest. The payee's number of votes will be determined by
dividing the reserve for such Contract allocated to the applicable Sub-Account
by the net asset value per share of the corresponding Fund. The votes decrease
as income payments are made and as the reserves for the Contract decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro-rata basis to reduce the votes
eligible to be cast.
We reserve the right to vote Fund shares as we see fit without regard to voting
instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.
Changes in Funds. If the shares of any of the Funds are no longer available for
investment by the Variable Account or if, in our judgment, further investment in
such shares is no longer desirable in view of the purposes of the Contract, we
may eliminate that Fund and substitute shares of another eligible investment
fund. Any substitution of securities will comply with the requirements of the
Investment Company Act of 1940. We also may add new Variable Sub-Accounts that
invest in additional mutual funds. We will notify you in advance of any change.
Conflicts of Interest. The Funds sell their shares to separate accounts
underlying both variable life insurance and variable annuity contracts. It is
conceivable that in the future it may be unfavorable for variable life insurance
separate accounts and variable annuity separate accounts to invest in the same
Fund. The board of directors of the Funds monitors for possible conflicts among
separate accounts buying shares of the Funds. Conflicts could develop for a
variety of reasons. For example, differences in treatment under tax and other
laws or the failure by a separate account to comply with such laws could cause a
conflict. To eliminate a conflict, the Funds' board of directors may require a
separate account to withdraw its participation in a Fund. A Fund's net asset
value could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
Distribution. ALFS, Inc., (formerly known as Allstate Life Financial Services
Inc.) ("ALFS"), located at 3100 Sanders Road, Northbrook, IL 60062-7154, will
serve as principal underwriter of the Contracts until May 1, 2000. ALFS is a
wholly owned subsidiary of Allstate. Beginning May 1, 2000, Allstate
Distributors, L.L.C. ("Allstate Distributors"), a broker-dealer jointly owned by
Allstate and Putnam Investments, will serve as principal underwriter of the
Contracts. ALFS and Allstate Distributors are each a registered broker dealer
under the Securities and Exchange Act of 1934, as amended, ("Exchange Act") and
a member of the National Association of Securities Dealers, Inc. Contracts are
sold by registered representatives of unaffiliated broker-dealers or bank
employees who are licensed insurance agents appointed by Allstate, either
individually or through an incorporated insurance agency and have entered into a
selling agreement with ALFS (until May 1, 2000) or Allstate Distributors
(beginning May 1, 2000) to sell the Contract.
We will pay commissions to broker-dealers who sell the Contracts. Commissions
paid may vary, but we estimate that the total commission paid on all Contract
sales will not exceed 6% of all purchase payments. From time to time, we may pay
or permit other promotional incentives, in cash or credit or other compensation.
The commission is intended to cover distribution expenses. In some states,
Contracts may be sold by representatives or employees of banks.
Allstate may pay Allstate Distributors a commission for distribution of the
Contracts. The underwriting agreement with Allstate Distributors provides that
we will reimburse Allstate Distributors for expenses incurred in distributing
the Contracts, including any liability to Contract Owners arising out of
services rendered or Contracts issued.
For Putnam Allstate Advisor Contracts issued to employees of Allstate and
certain other eligible organizations, and in lieu of Allstate paying any
commissions on sales of those Contracts, the Contract Owner will receive a
credit of 6% of the amount of each purchase payment that will be applied to each
purchase payment. Allstate will allocate this credit in the same allocation as
your most recent instruction. If you exercise your Right to Cancel your Contract
as described in this prospectus, we will return to you the amount you would have
received had there been no credit. Unless we are required by law to return your
purchase payments, this amount also will include any charges deducted that
reduced your Contract Value prior to cancellation, plus any investment gain on
the credit. The credit may not be available in all states. We do not consider
the credit to be an "investment in the contract" for income tax purposes.
For Putnam Allstate Advisor Apex Contracts issued to employees of Allstate and
certain other eligible organizations, and in lieu of Allstate paying any
commissions on sales of those Contracts, the sales charge will be waived.
Administration. We have primary responsibility for all administration of the
Contracts and the Variable Account.
We provide the following administrative services, among others:
o issuance of the Contracts;
o maintenance of Contract Owner records;
o Contract Owner services;
o calculation of unit values;
o maintenance of the Variable Account; and
o preparation of Contract Owner reports.
We will send you Contract statements and transaction confirmations at least
annually. You should notify us promptly in writing of any address change. You
should read your statements and confirmations carefully and verify their
accuracy. You should contact us promptly if you have a question about a periodic
statement. We will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.
We will also provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, waivers of withdrawal
charges, death benefits, Payout Start Dates, income payments, and other Contract
features. In addition, adverse tax consequences may result if qualified plan
limits on distributions and other conditions are not met. Please consult your
qualified plan administrator for more information.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate on
certain federal securities law matters. All matters of Illinois law pertaining
to the Contracts, including the validity of the Contracts and Allstate's right
to issue such Contracts under Illinois insurance law, have been passed upon by
Michael J. Velotta, General Counsel of Allstate.
<PAGE>
TAXES
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The following discussion is general and is not intended as tax advice. Allstate
makes no guarantee regarding the tax treatment of any Contract or transaction
involving a Contract.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.
Taxation of Annuities in General
Tax Deferral. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
1) the owner is a natural person,
2) the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
3) Allstate is considered the owner of the Variable Account assets for
federal income tax purposes.
Non-natural Owners. As a general rule, annuity contracts owned by non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for contracts owned by non-natural
persons.
Diversification Requirements. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the owner during the taxable year.
Although Allstate does not have control over the Funds or their investments, we
expect the Funds to meet the diversification requirements.
Ownership Treatment. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of the Variable Account investments may cause an investor to be
treated as the owner of the Variable Account. The Treasury Department also
stated that future guidance would be issued regarding the extent that Owners
could direct sub-account investments without being treated as Owners of the
underlying assets of the separate account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract Owners were not Owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Allstate does not know what standards will
be set forth in any regulations or rulings which the Treasury Department may
issue. It is possible that future standards announced by the Treasury Department
could adversely affect the tax treatment of your Contract. We reserve the right
to modify the Contract as necessary to attempt to prevent you from being
considered the federal tax owner of the assets of the Variable Account. However,
we make no guarantee that such modification to the Contract will be successful.
Taxation of Partial and Full Withdrawals. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a partial withdrawal
under a Qualified Contract, the portion of the payment that bears the same ratio
to the total payment that the investment in the Contract (i.e., nondeductible
IRA contributions, after tax contributions to qualified plans) bears to the
Contract Value, is excluded from your income. If you make a full withdrawal
under a non-Qualified Contract or a Qualified Contract, the amount received will
be taxable only to the extent it exceeds the investment in the Contract.
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than five taxable years after the taxable year of the first
contribution to any Roth IRA and which are:
o made on or after the date the individual attains age 59 1/2,
o made to a beneficiary after the Contract Owner's death,
o attributable to the Contract Owner being disabled, or
o for a first time home purchase (first time home purchases are subject to a
lifetime limit of $10,000).
If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive as a loan under a Contract, and any assignment
or pledge (or agreement to assign or pledge) of the Contract Value is treated as
a withdrawal of such amount or portion.
Taxation of Annuity Payments. Generally, the rule for income taxation of annuity
payments received from a nonqualified contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the Contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.
Taxation of Annuity Death Benefits. Death of a Contract Owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included in income as follows:
1) if distributed in a lump sum, the amounts are taxed in the same manner as a
full withdrawal, or
2) if distributed under an Income Plan, the amounts are taxed in the same
manner as an income payment. Please see the Statement of Additional
Information for more detail on distribution at death requirements.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1) made on or after the date the Contract Owner attains age 59 1/2,
2) made as a result of the Contract Owner's death or disability,
3) made in substantially equal periodic payments over the Contract Owner's
life or life expectancy,
4) made under an immediate annuity, or
5) attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts
issued by Allstate (or its affiliates) to the same Contract Owner during any
calendar year will be aggregated and treated as one annuity contract for
purposes of determining the taxable amount of a distribution.
Tax Qualified Contracts
The income on qualified plan and IRA investments is tax deferred, and the income
on variable annuities held by such plans does not receive any additional tax
deferral. You should review the annuity features, including all benefits and
expenses, prior to purchasing a variable annuity in a qualified plan or IRA.
Contracts may be used as investments with certain qualified plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Code; o Roth IRAs under Section 408A of the Code; o Simplified Employee Pension
Plans under Section 408(k) of the Code; o Savings Incentive Match Plans for
Employees (SIMPLE) Plans under Section 408(p) of the Code; o Tax Sheltered
Annuities under Section 403(b) of the Code; o Corporate and Self Employed
Pension and Profit Sharing Plans; and o State and Local Government and
Tax-Exempt Organization Deferred Compensation Plans.
In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract. The income on
qualified plan and IRA investments is tax deferred and variable annuities held
by such plans do not receive any additional tax deferral. You should review the
annuity features, including all benefits and expenses, prior to purchasing a
variable annuity in a qualified plan or IRA. Allstate reserves the right to
limit the availability of the Contract for use with any of the Qualified Plans
listed above.
Restrictions Under Section 403(b) Plans. Section 403(b) of the Tax Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only on or after the date the employee:
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
o on account of hardship (earnings on salary reduction contributions may not
be distributed on the account of hardship).
These limitations do not apply to withdrawals where Allstate is directed to
transfer some or all of the contract value to another 403(b) plan.
Income Tax Withholding
Allstate is required to withhold federal income tax at a rate of 20% on all
"eligible rollover distributions" unless you elect to make a "direct rollover"
of such amounts to an IRA or eligible retirement plan. Eligible rollover
distributions generally include all distributions from Qualified Contracts,
excluding IRAs, with the exception of:
(1) required minimum distributions, or
(2) a series of substantially equal periodic payments made over a period of at
least 10 years, or,
(3) over the life (joint lives) of the participant (and beneficiary).
Allstate may be required to withhold federal and state income taxes on any
distributions from non-Qualified Contracts or Qualified Contracts that are not
eligible rollover distributions, unless you notify us of your election to not
have taxes withheld.
<PAGE>
PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------
We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Total return represents the change, over a
specified period of time, in the value of an investment in a Variable
Sub-Account after reinvesting all income distributions. Yield refers to the
income generated by an investment in a Variable Sub-Account over a specified
period. All performance advertisements will include, as applicable, standardized
yield and total return figures that reflect insurance charges, withdrawal
charges and the following (as applicable):
o contract maintenance charge for Putnam Allstate Advisor Contracts
o sales charge for Putnam Allstate Advisor Apex Contracts
o Credit Enhancement for Putnam Allstate Advisor Plus Contracts
Performance advertisements also may include total return figures that reflect
the deduction of insurance charges, but not withdrawal charges or the contract
maintenance charge for Putnam Allstate Advisor Contracts. However, any total
return figures that reflect the Credit Enhancement will also reflect applicable
withdrawal charges to the extent required. The deduction of such charges would
reduce the performance shown. In addition, performance advertisements may
include aggregate, average, year-by-year, or other types of total return
figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Funds for the periods beginning with the inception dates of the Funds and
adjusted to reflect current Contract expenses. You should not interpret these
figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
<S> <C>
ADDITIONS, DELETIONS, OR SUBSTITUTIONS OF INVESTMENTS......................................
THE CONTRACTS..............................................................................
PERFORMANCE INFORMATION....................................................................
CALCULATION OF ACCUMULATION UNIT VALUES....................................................
CALCULATION OF VARIABLE INCOME PAYMENTS....................................................
GENERAL MATTERS............................................................................
FEDERAL TAX MATTERS........................................................................
Qualified Plans............................................................................
EXPERTS....................................................................................
FINANCIAL STATEMENTS.......................................................................
APPENDIX A.................................................................................
APPENDIX B.................................................................................
APPENDIX C.................................................................................
APPENDIX D.................................................................................
-----------------------------------------------
</TABLE>
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. We do not authorize anyone to provide
any information or representations regarding the offering described in this
prospectus other than as contained in this prospectus.
<PAGE>
<TABLE>
<CAPTION>
Appendix A
Withdrawal Adjustment Example - Death Benefits*
Issue Date: January 1, 2000
Initial Purchase Payment: $50,000 (For Putnam Allstate Advisor Plus Contracts, a
$2,000 Credit Enhancement would apply)
- --------- ------------ ------------- ------------ ------------ -------------------------------------------------------------
Death Benefit Amount
-------------------------------------------------------------
----------------------- ------------ ------------------------
Purchase Payment Value Enhanced Beneficiary
- -------- Beginning Contract Maximum Value
Type of Contract Transaction Value Anniversary
Occurrence Value Amount After Value
Date Occurrence
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------- ------------ ------------- ------------ ------------ ----------------------- ------------ ------------------------
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ -----------
Advisor, Advisor,
Apex, and Apex, and
Preferred Plus Preferred Plus
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ -----------
1/1/01 Contract
Anniversary $55,000 $55,000 $50,000 $52,000 $55,000 $52,500 $54,600
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ -----------
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ -----------
7/1/01 Partial
Withdrawal $60,000 $15,000 $45,000 $35,000 $37,000 $41,250 $40,347 $41,961
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ -----------
The Purchase Payment Value is reduced by the amount of the withdrawal. The
withdrawal adjustment reduces the Maximum Anniversary Value and Enhanced
Beneficiary Value by the same proportion as the Contract Value.
</TABLE>
<TABLE>
<CAPTION>
Advisor, Plus
Apex, and
Preferred
Purchase Payment Value Death Benefit
<S> <C> <C> <C>
Partial Withdrawal Amount (a) $15,000 $15,000
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (b) $50,000 $52,000
Adjusted Death Benefit (c) $35,000 $37,000
Maximum Anniversary Value Death Benefit
Partial Withdrawal Amount (a) $15,000 $15,000
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (c) $55,000 $55,000
Withdrawal Adjustment [(a)/(b)]*(c) $13,750 $13,750
Adjusted Death Benefit $41,250 $41,250
Enhanced Beneficiary Protection Value Death Benefit
Partial Withdrawal Amount (a) $15,000 $15,000
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
Value of Death Benefit Amount Immediately Prior to Partial Withdrawal (c) $53,796 $55,948
(assumes half years worth of Interest)
Withdrawal Adjustment [(a)/(b)]*(c) $13,449 $13,987
Adjusted Death Benefit $40,347 $41,961
* For purposes of illustrating the withdrawal adjustment calculation, the
example assumes the same Contract Values and Maximum Anniversary Value for all
four Contracts. Actual Contract Values and Maximum Anniversary Values will
differ due to the different fees and charges under each Contract and the Credit
Enhancement available under the Putnam Allstate Advisor Plus Contract.
</TABLE>
<PAGE>
Appendix B
Withdrawal Adjustment Example - Income Benefits*
Issue Date: January 1, 2000
Initial Purchase Payment: $50,000 (For Putnam Allstate Advisor Plus Contracts, a
$2,000 Credit Enhancement would apply)
<TABLE>
<CAPTION>
- --------- ------------ ------------- ------------ ------------ ------------------------------------------------------------
Income Benefit Amount
------------------------------------------------------------
----------------------- ------------ -----------------------
Purchase Payment Value 6% Roll-Up Value
Beginning Contract Maximum
Type of Contract Transaction Value Anniversary
Date Occurrence Value Amount After Value
Occurrence
<S> <C> <C> <C> <C> <C> <C> <C>
- --------- ------------ ------------- ------------ ------------ ----------------------- ------------ -----------------------
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ ----------
Advisor, Advisor,
Apex, and Apex, and
Preferred Plus Preferred Plus
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ ----------
1/1/01 Contract
Anniversary $55,000 $55,000 $50,000 $52,000 $55,000 $53,000 $55,120
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ ----------
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ ----------
7/1/01 Partial
Withdrawal $60,000 $15,000 $45,000 $37,500 $39,000 $41,250 $40,925 $42,562
- --------- ------------ ------------- ------------ ------------ ----------- ----------- ------------ ------------ ----------
The withdrawal adjustment reduces the Purchase Payment Value, the Maximum
Anniversary Value and the 6% Roll-Up Value by the same proportion as the
Contract Value.
Advisor Apex, Plus
and Preferred
Purchase Payment Value Income Benefit
Partial Withdrawal Amount
Contract Value Immediately Prior to Partial Withdrawal
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal
Withdrawal Adjustment
Adjusted Income Benefit
(a) $15,000 $15,000
(b) $60,000 $60,000
(c) $50,000 $52,000
[(a)/(b)]*(c) $12,500 $13,000
$37,500 $39,000
Maximum Anniversary Value Income Benefit
Partial Withdrawal Amount (a) $15,000 $15,000
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (c) $55,000 $55,000
Withdrawal Adjustment [(a)/(b)]*(c) $13,750 $13,750
Adjusted Income Benefit $41,250 $41,250
6% Roll-Up Value Income Benefit
Partial Withdrawal Amount (a) $15,000 $15,000
Contract Value Immediately Prior to Partial Withdrawal (b) $60,000 $60,000
Value of Income Benefit Amount Immediately Prior to Partial Withdrawal (c) $54,567 $56,750
(assumes half years worth of interest)
Withdrawal Adjustment [(a)/(b)]*(c) $13,642 $14,187
Adjusted Income Benefit $40,925 $42,562
* For purposes of illustrating the withdrawal adjustment calculation, the
example assumes the same Contract Values and Maximum Anniversary Value for all
four Contracts. Actual Contract Values and Maximum Anniversary Values will
differ due to the different fees and charges under each Contract and the Credit
Enhancement available under the Putnam Allstate Plus Contract.
<PAGE>
APPENDIX C
Accumulation Unit Values for the Putnam Allstate Advisor Contracts for
the period April 30, 1999 (date Contracts first offered) through
December 31, 1999 are set out below:
Accumulation Unit Values and Number of Accumulation Units Outstanding for
Each Variable Sub-Account*
---------------------------------------------------------- ---------------------- -------------------------------
With the Enhanced Beneficiary
SUB-ACCOUNTS Basic Policy** Protection Option***
------------ -------------- --------------------
Asia Pacific Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 17.436886 17.419179
Number of Units Outstanding, End of Period 241,341 32,678
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Diversified Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.866141 9.856084
Number of Units Outstanding, End of Period 1,112,113 408,577
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
The George Putnam Fund of Boston
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.299008 9.289512
Number of Units Outstanding, End of Period 2,629,405 487,965
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Global Asset Allocation
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.69758 10.686682
Number of Units Outstanding, End of Period 216,789 44,565
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Global Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 15.664991 15.649055
Number of Units Outstanding, End of Period 809,571 274,617
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.171812 9.162457
Number of Units Outstanding, End of Period 10,446,547 3,225,308
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Health Sciences
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.596764 10.58596
Number of Units Outstanding, End of Period 1,037,948 293,891
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
High Yield
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.933858 9.923723
Number of Units Outstanding, End of Period 688,505 223,608
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.714014 9.7041
Number of Units Outstanding, End of Period 994,313 271,083
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 14.427139 14.412463
Number of Units Outstanding, End of Period 1,416,491 429,465
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.968143 10.956967
Number of Units Outstanding, End of Period 515,493 136,651
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International New Opportunities
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 18.134432 18.11602
Number of Units Outstanding, End of Period 389,045 133,941
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Investors
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 12.167781 12.155375
Number of Units Outstanding, End of Period 5,517,617 1,309,524
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Money Market
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.231419 10.220995
Number of Units Outstanding, End of Period 1,261,646 386,731
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
New Opportunities
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 15.692325 15.676352
Number of Units Outstanding, End of Period 2,351,890 730,176
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
New Value
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 8.795115 8.786127
Number of Units Outstanding, End of Period 626,817 137,044
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
OTC & Emerging Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 19.837583 19.817403
Number of Units Outstanding, End of Period 697,007 181,669
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Research
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 11.597614 11.585792
Number of Units Outstanding, End of Period 1,575,893 369,070
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Small Cap Value
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.301654 10.291145
Number of Units Outstanding, End of Period 451,498 140,296
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Utilities Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.986611 9.976417
Number of Units Outstanding, End of Period 585,124 153,652
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Vista
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 14.08793 14.073581
Number of Units Outstanding, End of Period 824,655 202,009
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Voyager
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 14.325845 14.311263
Number of Units Outstanding, End of Period 6,006,888 1,752,111
---------------------------------------------------------- ---------------------- -------------------------------
* No Accumulation Unit Values are shown for the Putnam VT
American Government Income and Growth Opportunities
Sub-Accounts, because they were offered as of February 4,
2000.
** The Accumulation Unit Values in this column reflect a mortality and
expense risk charge of 1.25%.
*** The Accumulation Unit Values in this column reflect a mortality and
expense risk charge of 1.40%.
<PAGE>
Accumulation Unit Values for the Putnam Allstate Advisor Apex Contracts
for the period October 25, 1999 (date Contracts first offered) through
December 31, 1999 are set out below:
Accumulation Unit Values and Number of Accumulation Units Outstanding for
Each Variable Sub-Account*
---------------------------------------------------------- ---------------------- -------------------------------
With the Enhanced Beneficiary
SUB-ACCOUNTS Basic Policy** Protection Option***
---------------------------------------------------------- ---------------------- -------------------------------
Asia Pacific Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 13.36408 13.360614
Number of Units Outstanding, End of Period 1,911 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Diversified Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.191844 10.189182
Number of Units Outstanding, End of Period 409 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
The George Putnam Fund of Boston
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 9.777516 9.774957
Number of Units Outstanding, End of Period 2,578 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Global Asset Allocation
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.00000 10.00000
Accumulation Unit Value, End of Period 10.650241 10.647465
Number of Units Outstanding, End of Period - -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Global Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 13.563279 13.559763
Number of Units Outstanding, End of Period 1,404 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 9.685588 9.683049
Number of Units Outstanding, End of Period 11,859 1,229
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Health Sciences
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 10.628529 10.625756
Number of Units Outstanding, End of Period 4,191 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
High Yield
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 10.379612 10.376902
Number of Units Outstanding, End of Period 691 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 9.946392 9.943792
Number of Units Outstanding, End of Period - -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 12.85899 12.855652
Number of Units Outstanding, End of Period 5,440 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 10.576858 10.574094
Number of Units Outstanding, End of Period 1,515 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
International New Opportunities
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 14.530054 14.526295
Number of Units Outstanding, End of Period 2,774 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Investors
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 11.613439 11.610406
Number of Units Outstanding, End of Period 7,389 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Money Market
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 10.074512 10.07188
Number of Units Outstanding, End of Period 938 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
New Opportunities
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 13.467912 13.464415
Number of Units Outstanding, End of Period 4,105 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
New Value
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 9.707587 9.705049
Number of Units Outstanding, End of Period - -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
OTC & Emerging Growth
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 15.156053 15.15214
Number of Units Outstanding, End of Period 312 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Research
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 11.061395 11.058511
Number of Units Outstanding, End of Period 3,617 808
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Small Cap Value
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 10.775309 10.772498
Number of Units Outstanding, End of Period 2,352 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Utilities Growth and Income
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 9.606396 9.603884
Number of Units Outstanding, End of Period 106 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Vista
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 13.011521 13.008145
Number of Units Outstanding, End of Period 1,448 -
---------------------------------------------------------- ---------------------- -------------------------------
---------------------------------------------------------- ---------------------- -------------------------------
Voyager
---------------------------------------------------------- ---------------------- -------------------------------
Accumulation Unit Value, Beginning of Period 10.0000 10.00000
Accumulation Unit Value, End of Period 12.949953 12.946585
Number of Units Outstanding, End of Period 9,326 694
---------------------------------------------------------- ---------------------- -------------------------------
* No Accumulation Unit Values are shown for the Putnam VT American
Government Income and Growth Opportunities Sub-Accounts, because they
were offered as of February 4, 2000.
** The Accumulation Unit Values in this column reflect a mortality and
expense risk charge of 0.80%.
*** The Accumulation Unit Values in this column reflect a mortality and
expense risk charge of 0.95%.
<PAGE>
Appendix D
Putnam Allstate Advisor Contract Comparison Chart
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Feature Advisor Advisor Apex Advisor Plus Advisor Preferred
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Maximum Age of Contract 90 90 80 80
Owner and Annuitant on the
Issue Date
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Minimum Initial Purchase $1,000 $1,000 $10,000 $10,000
Payment
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Fixed Account Options o Standard Fixed o Standard Fixed o Standard Fixed o Standard Fixed
Account Option Account Option Account Option Account Option
o 6 Month Dollar o 6 Month Dollar
Cost Averaging Cost Averaging
Option Option
o 12 Month o 12 Month Dollar
Dollar Cost Cost Averaging
Averaging Option Option
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Credit Enhancement None None 4% applied to all None
purchase payments
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Sales Load None 5.75% - 0.50% of None None
premiums
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Contract Maintenance Charge $30 per year, full None None None
amount on surrender
(waived in certain
cases)
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Mortality and Expense Risk 1.25% 0.80% 1.60% 1.65%
Charge (without optional
benefit)
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Free Withdrawal Amount greater of earnings None 15% of purchase payments None
(each Contract Year) not previously
withdrawn, or 15% of
purchase payments
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Withdrawal Charge (measured Year: 0 1 2 3 4 5 6 7+ Year: 0 1+ Year: 0 1 2 3 4 5 6 7 8+ Year: 0 1 2+
from number of complete %: 7 7 6 5 4 3 2 0 %: 0.5 0 %: 8 8 8 7 6 5 4 3 0 %: 2 1 0
years since we received the
purchase payment)(as a (currently only
percentage of purchase assessed on Contracts
payments withdrawn in excess that have total
of the Free Withdrawal purchase payments of at
Amount) least $1,000,000)
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Withdrawal Charge Waivers Yes No Yes No
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
Employee Endorsement 6% Credit Enhancement Sales load waived None None
- ---------------------------- ------------------------ ------------------------- ------------------------- -------------------------
</TABLE>
<PAGE>
THE PUTNAM ALLSTATE ADVISOR CONTRACTS
Allstate Life Insurance Company Statement of Additional Information
3100 Sanders Road dated April 28, 2000
Northbrook, Illinois 60062
1-800-390-1277
This Statement of Additional Information supplements the information in the
prospectus for the following Contracts:
o Putnam Allstate Advisor
o Putnam Allstate Advisor Apex (formerly known as Putnam Allstate Advisor - A)
o Putnam Allstate Advisor Plus
o Putnam Allstate Advisor Preferred
Not all Contracts may be available in all states or through your sales
representative. Please check with your sale representative for details. This
Statement of Additional Information does not constitute an offer of any Contract
in such cases.
This Statement of Additional Information is not a prospectus. You should read it
with the prospectus dated April 28, 2000 for each Contract. You may obtain a
prospectus by calling or writing us at the address or telephone number listed
above.
For convenience, we use the terms "Contract" and "Contracts" to refer generally
to all four Contracts, except as specifically noted. In addition, this Statement
of Additional Information uses the same defined terms as the prospectus for each
Contract that we offer, except as specifically noted.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Description Page
Additions, Deletions or Substitutions of Investments
The Contracts
Performance Information
Calculation of Accumulation Unit Values
Calculation of Variable Income Payments
General Matters
Federal Tax Matters
Qualified Plans
Experts
Financial Statements
Appendix A A-1
Appendix B B-1
Appendix C C-1
Appendix D D-1
</TABLE>
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
- --------------------------------------------------------------------------------
We may add, delete, or substitute the Fund shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any Fund
with those of another Fund of the same or different mutual fund if the shares of
the Fund are no longer available for investment, or if we believe investment in
any Fund would become inappropriate in view of the purposes of the Variable
Account.
We will not substitute shares attributable to a Contract Owner's interest in a
Variable Sub-Account until we have notified the Contract Owner of the change,
and until the SEC has approved the change, to the extent such notification and
approval are required by law. Nothing contained in this Statement of Additional
Information shall prevent the Variable Account from purchasing other securities
for other series or classes of contracts, or from effecting a conversion between
series or classes of contracts on the basis of requests made by Contract Owners.
We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Fund of the same or different mutual fund. We may establish new Variable
Sub-Accounts when we believe marketing needs or investment conditions warrant.
We determine the basis on which we will offer any new Variable Sub-Accounts in
conjunction with the Contract to existing Contract Owners. We may eliminate one
or more Variable Sub-Accounts if, in our sole discretion, marketing, tax or
investment conditions so warrant.
We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Funds. If we believe
the best interests of persons having voting rights under the Contracts would be
served, we may operate the Variable Account as a management company under the
Investment Company Act of 1940 or we may withdraw its registration under such
Act if such registration is no longer required.
<PAGE>
THE CONTRACTS
- --------------------------------------------------------------------------------
The Contracts are primarily designed to aid individuals in long-term financial
planning. You can use them for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.
PURCHASE OF CONTRACTS
We offer the Contracts to the public through banks as well as brokers licensed
under the federal securities laws and state insurance laws. ALFS, Inc. (formerly
known as Allstate Life Financial Services, Inc.) ("ALFS"), an affiliate of
Allstate, will serve as the principal underwriter for the Variable Account and
distribute the Contracts until May 1, 2000. Commission income of ALFS for the
last fiscal year is $61,588,893. Beginning May 1, 2000, Allstate Distributors,
L.L.C. ("Allstate Distributors"), a broker-dealer jointly owned by Allstate and
Putnam Investments, will serve as the principal underwriter for the Variable
Account and distribute the Contracts. The offering of the Contracts is
continuous. We do not anticipate discontinuing the offering of the Contracts,
but we reserve the right to do so at any time.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a Contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code ("Code"). Except as required by federal law in calculating the basis of the
Contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract Owner
contemplating any such exchange, rollover or transfer of a Contract should
contact a competent tax adviser with respect to the potential effects of such a
transaction.
<PAGE>
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract Owner. Also please note that the
performance figures shown do not reflect any applicable taxes.
STANDARDIZED TOTAL RETURNS
A Variable Sub-Account's standardized total return represents the average annual
total return of that Sub-Account over a particular period. We compute
standardized total return by finding the annual percentage rate that, when
compounded annually, will accumulate a hypothetical $1,000 purchase payment to
the redeemable value at the end of the one, five or ten year period, or for a
period from the date of commencement of the Variable Sub-Account's operations,
if shorter than any of the foregoing. We use the following formula prescribed by
the SEC for computing standardized total return:
1000(1 + T)n = ERV
where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment
(plus $40 credit thereon for Putnam Allstate Advisor Plus
Contracts only) made at the beginning of 1, 5, or 10 year
periods or shorter period
n = number of years in the period
1000 = hypothetical $1,000 investment (plus $40 credit thereon
for Putnam Allstate Advisor Plus Contracts only)
When factoring in the withdrawal charge assessed upon redemption, we exclude the
Free Withdrawal Amount, which is the amount you can withdraw from the Contract
without paying a withdrawal charge. (The Free Withdrawal Amount is not
applicable with the Putnam Allstate Advisor Apex and Putnam Allstate Advisor
Preferred Contracts.) We also use the withdrawal charge that would apply upon
redemption at the end of each period. Thus, for example, when factoring in the
withdrawal charge for a one year standardized total return calculation, we would
use the withdrawal charge that applies to a withdrawal of a purchase payment
made one year prior. For Putnam Allstate Advisor Apex Contracts, we also assume
that the maximum sales charge of 5.75% is deducted from the initial $1,000
payment.
When factoring the contract maintenance charge (only applicable to the Putnam
Allstate Advisor Contract), we pro rate the charge by dividing (a) the contract
maintenance charge by (b) an assumed contract size of $45,000. We then multiply
the resulting percentage by a hypothetical $1,000 investment.
When factoring the charge for the optional Retirement Income Guarantee Rider 2,
we assume that Income Base B applies and that there are no additional purchase
payments or withdrawals.
The standardized total returns for the Variable Sub-Accounts, for the periods
ended December 31, 1999, are set out in Appendices A through D to this Statement
of Additional Information. The Putnam Allstate Advisor Apex, Putnam Allstate
Advisor Plus, and Putnam Allstate Advisor Preferred Contracts were first offered
to the public on October 25, 1999, February 4, 2000, and as of the date of this
Statement of Additional Information, respectively. Accordingly, performance
shown for periods prior to those dates reflects the performance of the Variable
Sub-Accounts, adjusted to reflect the current charges under the Contracts that
would have applied had they been in existence at the time.
NON-STANDARDIZED TOTAL RETURNS
From time to time, we also may quote rates of return that reflect changes in the
values of each Variable Sub-Account's accumulation units. We may quote these
"non-standardized total returns" on an annualized, cumulative, year-by-year, or
other basis. These rates of return take into account asset-based charges, such
as the mortality and expense risk charge and administration charge. However,
these rates of return do not reflect withdrawal charges or the contract
maintenance charge under the Putnam Allstate Advisor Contracts. Such charges, if
reflected, would reduce the performance shown. Non-standardized total returns
also do not take into account the amount of any applicable Credit Enhancement
under the Putnam Allstate Advisor Plus Contracts. When factoring the charge for
the optional Retirement Income Guarantee Rider 2, we assume that Income Base B
applies and that there are no additional purchase payments or withdrawals.
Annualized returns reflect the rate of return that, when compounded annually,
would equal the cumulative rate of return for the period shown. We compute
annualized returns according to the following formula:
Annualized Return = (1 + r)1/n -1
Where:
r = cumulative rate of return for the period shown,
and:
n = number of years in the period.
The method of computing annualized rates of return is similar to that for
computing standardized performance, described above, except that rather than
using a hypothetical $1,000 investment and the ending redeemable value thereof,
we use the changes in value of an accumulation unit.
Cumulative rates of return reflect the cumulative change in value of an
accumulation unit over the period shown. Year-by-year rates of return reflect
the change in value of an accumulation unit during the course of each year
shown. We compute these returns by dividing the accumulation unit value at the
end of each period shown, by the accumulation unit value at the beginning of
that period, and subtracting one. We compute other total returns on a similar
basis.
We may quote non-standardized total returns for 1, 3, 5 and 10 year periods, or
period since inception of the Variable Sub-Account's operations, as well as
other periods, such as "year-to-date" (prior calendar year end to the day stated
in the advertisement); "year to most recent quarter" (prior calendar year end to
the end of the most recent quarter); the prior calendar year; and the "n" most
recent calendar years.
The non-standardized total returns for the Variable Sub-Accounts, for the
periods ended December 31, 1999, are set out in Appendices A through D to this
Statement of Additional Information. The Putnam Allstate Advisor Apex, Putnam
Allstate Advisor Plus, and Putnam Allstate Advisor Preferred Contracts were
first offered to the public on October 25, 1999, February 4, 2000, and as of the
date of this Statement of Additional Information, respectively. Accordingly,
performance shown for periods prior to those dates reflects the performance of
the Variable Sub-Accounts, adjusted to reflect the current charges under the
Contracts that would have applied had they been in existence at the time.
ADJUSTED HISTORICAL TOTAL RETURNS
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We calculate such "adjusted
historical total returns" using the same method that we use to compute
standardized total returns, except that instead of using the Variable
Sub-Account inception dates, we use the inception dates of the underlying Funds
and adjust such performance to reflect the current level of charges that apply
to the Variable Sub-Accounts under each Contract.
The adjusted historical total returns for the Variable Sub-Accounts, for the
periods ended December 31, 1999, for each Contract are set out in Appendices A
through D to this Statement of Additional Information.
<PAGE>
CALCULATION OF ACCUMULATION UNIT VALUES
- -------------------------------------------------------------------------------
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Fund shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 3:00 p.m. Central Time).
The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period
equals the Accumulation Unit Value as of the immediately preceding Valuation
Period, multiplied by the Net Investment Factor (described below) for that
Sub-Account for the current Valuation Period.
NET INVESTMENT FACTOR
The Net Investment Factor for a Valuation Period is a number representing the
change, since the last Valuation Period, in the value of Variable Sub-Account
assets per Accumulation Unit due to investment income, realized or unrealized
capital gain or loss, deductions for taxes, if any, and deductions for the
mortality and expense risk charge and administrative expense charge. We
determine the Net Investment Factor for each Variable Sub-Account for any
Valuation Period by dividing (A) by (B) and subtracting (C) from the result,
where:
(A) is the sum of:
(1) the net asset value per share of the Fund underlying the Variable
Sub-Account determined at the end of the current Valuation Period; plus,
(2) the per share amount of any dividend or capital gain distributions made by
the Fund underlying the Variable Sub-Account during the current Valuation
Period;
(B) is the net asset value per share of the Fund underlying the Variable
Sub-Account determined as of the end of the immediately preceding Valuation
Period; and
(C) is the mortality and expense risk charge corresponding to the portion of the
current calendar year that is in the current Valuation Period.
<PAGE>
CALCULATION OF VARIABLE INCOME PAYMENTS
- --------------------------------------------------------------------------------
We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.
CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular Fund in
which the Variable Sub-Account invests. We calculate the Annuity Unit Value for
each Variable Sub-Account at the end of any Valuation Period by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-Account's Net Investment Factor
(described in the preceding section) for the Period; and then
o dividing the product by the sum of 1.0 plus the assumed investment rate for
the Valuation Period.
The assumed investment rate adjusts for the interest rate assumed in the income
payment tables used to determine the dollar amount of the first variable income
payment, and is at an effective annual rate which is disclosed in the Contract.
We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states or tax qualified plans that require the use of unisex tables.
<PAGE>
GENERAL MATTERS
- --------------------------------------------------------------------------------
INCONTESTABILITY
We will not contest the Contract after we issue it.
SETTLEMENTS
The Contract must be returned to us prior to any settlement. We must receive due
proof of the Contract Owner(s) death (or Annuitant's death if there is a
non-natural Contract Owner) before we will settle a death claim.
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Fund shares held by
each of the Variable Sub-Accounts.
The Funds do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the Funds'
prospectuses for a more complete description of the custodian of the Funds.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract Owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts.
TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
<PAGE>
FEDERAL TAX MATTERS
- -------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on the individual circumstances
of each person. If you are concerned about any tax consequences with regard to
your individual circumstances, you should consult a competent tax adviser.
TAXATION OF ALLSTATE LIFE INSURANCE COMPANY
Allstate is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. Since the Variable Account is not an entity separate
from Allstate, and its operations form a part of Allstate, it will not be taxed
separately as a "Regulated Investment Company" under Subchapter M of the Code.
Investment income and realized capital gains of the Variable Account are
automatically applied to increase reserves under the Contract. Under existing
federal income tax law, Allstate believes that the Variable Account investment
income and capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the Contract. Accordingly,
Allstate does not anticipate that it will incur any federal income tax liability
attributable to the Variable Account, and therefore Allstate does not intend to
make provisions for any such taxes. If Allstate is taxed on investment income or
capital gains of the Variable Account, then Allstate may impose a charge against
the Variable Account in order to make provision for such taxes.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity contracts held by
a non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the Contract as agent for a
natural person. However, this special exception will not apply in the case of an
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees. Other exceptions to the
non-natural owner rule are: (1) Contracts acquired by an estate of a decedent by
reason of the death of the decedent; (2) certain Qualified Contracts; (3)
Contracts purchased by employers upon the termination of certain qualified
plans; (4) certain Contracts used in connection with structured settlement
agreements, and (5) Contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
In order to be considered an annuity contract for federal income tax purposes,
the Contract must provide: (1) if any Contract Owner dies on or after the Payout
Start Date but before the entire interest in the Contract has been distributed,
the remaining portion of such interest must be distributed at least as rapidly
as under the method of distribution being used as of the date of the Owner's
death; (2) if any Contract Owner dies prior to the Payout Start Date, the entire
interest in the Contract will be distributed within 5 years after the date of
the Owner's death. These requirements are satisfied if any portion of the
Contract Owner's interest that is payable to (or for the benefit of) a
designated Beneficiary is distributed over the life of such Beneficiary (or over
a period not extending beyond the life expectancy of the Beneficiary) and the
distributions begin within 1 year of the Owner's death. If the Contract Owner's
designated Beneficiary is the surviving spouse of the Owner, the Contract may be
continued with the surviving spouse as the new Contract Owner. If the Contract
Owner is a non-natural person, then the Annuitant will be treated as the
Contract Owner for purposes of applying the distribution at death rules. In
addition, a change in the Annuitant on a Contract owned by a non-natural person
will be treated as the death of the Contract Owner.
<PAGE>
QUALIFIED PLANS
- -------------------------------------------------------------------------------
The Contract may be used with several types of qualified plans. Allstate
reserves the right to limit the availability of the Contract for use with any of
the Qualified Plans listed below. The tax rules applicable to participants in
such qualified plans vary according to the type of plan and the terms and
conditions of the plan itself. Adverse tax consequences may result from excess
contributions, premature distributions, distributions that do not conform to
specified commencement and minimum distribution rules, excess distributions and
in other circumstances. Contract Owners and participants under the plan and
Annuitants and Beneficiaries under the Contract may be subject to the terms and
conditions of the plan regardless of the terms of the Contract.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (IRA).
Individual Retirement Annuities are subject to limitations on the amount that
can be contributed and on the time when distributions may commence. Certain
distributions from other types of qualified plans may be "rolled over" on a
tax-deferred basis into an Individual Retirement Annuity. An IRA generally may
not provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid and the Contract's Cash Value. The Contract
provides a death benefit that in certain circumstances may exceed the greater of
the payments and the Contract Value. It is possible that the death benefit could
be viewed as violating the prohibition on investment in life insurance contracts
with the result that the Contract would not be viewed as satisfying the
requirements of an IRA.
ROTH INDIVIDUAL RETIREMENT ANNUITIES
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth Individual
Retirement Annuity. Roth Individual Retirement Annuities are subject to
limitations on the amount that can be contributed and on the time when
distributions may commence. "Qualified distributions" from Roth Individual
Retirement Annuities are not includible in gross income. "Qualified
distributions" are any distributions made more than five taxable years after the
taxable year of the first contribution to the Roth Individual Retirement
Annuity, and which are made on or after the date the individual attains age 59
1/2, made to a beneficiary after the owner's death, attributable to the owner
being disabled or for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000). "Nonqualified distributions" are
treated as made from contributions first and are includible in gross income to
the extent such distributions exceed the contributions made to the Roth
Individual Retirement Annuity. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The taxable portion of a conversion or rollover distribution is
includible in gross income, but is exempted from the 10% penalty tax on
premature distributions. SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the
employees to their individual retirement annuities. Employers intending to use
the Contract in connection with such plans should seek competent advice.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase annuity contracts for them, and subject
to certain limitations, to exclude the purchase payments from the employees'
gross income. An annuity contract used for a Section 403(b) plan must provide
that distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
on or after the date the employee attains age 59 1/2, separates from service,
dies, becomes disabled or on the account of hardship (earnings on salary
reduction contributions may not be distributed for hardship). These limitations
do not apply to withdrawals where Allstate is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to establish
various types of tax favored retirement plans for employees. The Self-Employed
Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R.
10" or "Keogh") permits self-employed individuals to establish tax favored
retirement plans for themselves and their employees. Such retirement plans may
permit the purchase of annuity contracts in order to provide benefits under the
plans.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION
DEFERRED COMPENSATION PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the Contract has the sole right to the proceeds of the
Contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.
<PAGE>
EXPERTS
- -------------------------------------------------------------------------------
The consolidated financial statements of Allstate as of December 31, 1999 and
1998 and for each of the three years in the period ended December 31, 1999 and
related financial statement schedules that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
<PAGE>
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended, the financial statements of
Allstate as of December 31, 1999 and 1998 and for each of the three years in the
period ended December 31, 1999, the related financial statement schedules and
the accompanying Independent Auditors' Reports appear in the pages that follow.
The financial statements and schedules of Allstate included herein should be
considered only as bearing upon the ability of Allstate to meet its obligations
under the Contacts.
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
ALLSTATE LIFE INSURANCE COMPANY:
We have audited the accompanying Consolidated Statements of Financial Position
of Allstate Life Insurance Company and subsidiaries (the "Company", an affiliate
of The Allstate Corporation) as of December 31, 1999 and 1998, and the related
Consolidated Statements of Operations, Comprehensive Income, Shareholder's
Equity and Cash Flows for each of the three years in the period ended
December 31, 1999. Our audits also included Schedule I - Summary of Investments
other than Investments in Related Parties, Schedule III - Supplementary
Insurance Information, Schedule IV - Reinsurance, and Schedule V - Valuation
Allowance and Qualifying Accounts. These financial statements and financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Allstate Life Insurance Company and
subsidiaries as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999 in conformity with generally accepted accounting principles.
Also, in our opinion, Schedule I - Summary of Investments other than Investments
in Related Parties, Schedule III - Supplementary Insurance Information, Schedule
IV - Reinsurance, and Schedule V - Valuation Allowance and Qualifying Accounts,
when considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 25, 2000
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
REVENUES
Life and annuity premiums (net of reinsurance ceded of $241,
$178 and $194) $ 838 $ 889 $ 955
Life and annuity contract charges 723 630 547
Property-liability insurance premiums (net of reinsurance
ceded of $3, $1 and $3) 289 268 275
Net investment income 2,265 2,139 2,118
Realized capital gains and losses 195 332 192
------ ------ -------
4,310 4,258 4,087
------ ------ -------
COSTS AND EXPENSES
Life and annuity contract benefits (net of reinsurance
recoveries of $161, $52 and $75) 1,251 1,225 1,239
Interest credited to contractholders' funds 1,260 1,190 1,167
Property-liability insurance claims and claims expense (net
of reinsurance recoveries of $36, $14 and $4) 222 195 179
Amortization of deferred policy acquisition costs 409 412 333
Operating costs and expenses 387 370 368
------ ------ -------
3,529 3,392 3,286
------ ------ -------
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE 781 866 801
Income tax expense 270 310 284
------ ------ -------
NET INCOME $ 511 $ 556 $ 517
====== ====== =======
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
- --------------------------------------------------------------------------------
($ IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
NET INCOME $ 511 $556 $517
OTHER COMPREHENSIVE (LOSS) INCOME, AFTER-TAX
Changes in:
Unrealized net capital gains and losses (644) 73 250
Unrealized foreign currency translation adjustments 7 1 (8)
----- ---- ----
OTHER COMPREHENSIVE (LOSS) INCOME, AFTER-TAX (637) 74 242
----- ---- ----
Comprehensive (loss) income $(126) $630 $759
===== ==== ====
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
- --------------------------------------------------------------------------------
($ IN MILLIONS EXCEPT PAR VALUE)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1999 1998
------------- -------------
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value (amortized
cost $27,354 and $24,630) $ 27,523 $ 26,858
Mortgage loans 3,801 3,285
Equity securities, at fair value (cost $503 and
$446) 743 748
Short-term 711 742
Policy loans 606 569
Other 25 26
------------ ------------
Total investments 33,409 32,228
Cash 71 109
Deferred policy acquisition costs 2,695 2,195
Reinsurance recoverables 495 254
Accrued investment income 394 360
Other assets 252 296
Separate Accounts 13,857 10,098
------------ ------------
TOTAL ASSETS $ 51,173 $ 45,540
============ ============
LIABILITIES
Contractholder funds $ 23,995 $ 21,133
Reserve for life-contingent contract benefits 7,148 7,601
Reserve for property-liability insurance claims and
claims expense 368 313
Unearned premiums 155 152
Payable to affiliates, net 51 59
Other liabilities and accrued expenses 854 940
Deferred income taxes 171 452
Separate Accounts 13,857 10,098
------------ ------------
TOTAL LIABILITIES 46,599 40,748
------------ ------------
COMMITMENTS AND CONTINGENT LIABILITIES(NOTE 10)
SHAREHOLDER'S EQUITY
Redeemable preferred stock - series A, $100 par
value, 1,500,000 shares authorized, 663,650 and
579,990 shares issued and outstanding 66 58
Redeemable preferred stock - series B, $100 par
value, 1,500,000 shares authorized, 1,170,000
shares issued and outstanding 117 117
Common stock, $227 and $214 par value, 23,800 and
22,700 shares authorized, issued and outstanding 5 5
Additional capital paid-in 617 617
Retained income 3,565 3,154
Accumulated other comprehensive income:
Unrealized net capital gains 220 864
Unrealized foreign currency translation
adjustments (16) (23)
------------ ------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 204 841
------------ ------------
TOTAL SHAREHOLDER'S EQUITY 4,574 4,792
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 51,173 $ 45,540
============ ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
REDEEMABLE PREFERRED STOCK - SERIES A
Balance, beginning of year $ 58 $ 45 $ 32
Issuance of shares 8 13 13
------ ------ ------
Balance, end of year 66 58 45
------ ------ ------
REDEEMABLE PREFERRED STOCK - SERIES B
Balance, beginning of year $ 117 $ 117 $ 117
Issuance of shares - - -
------ ------ ------
Balance, end of year 117 117 117
------ ------ ------
COMMON STOCK
Balance, beginning of year $ 5 $ 4 $ 2
Issuance of shares - - 1
Adjustment to par value - 1 1
------ ------ ------
Balance, end of year 5 5 4
------ ------ ------
ADDITIONAL CAPITAL PAID-IN
Balance, beginning of year $ 617 $ 618 $ 619
Adjustment to par value - (1) (1)
------ ------ ------
Balance, end of year 617 617 618
------ ------ ------
RETAINED INCOME
Balance, beginning of year $3,154 $2,706 $2,322
Net income 511 556 517
Dividends (100) (108) (133)
------ ------ ------
Balance, end of year 3,565 3,154 2,706
------ ------ ------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year $ 841 $ 767 $ 525
Change in unrealized net capital gains and losses (644) 73 250
Change in unrealized foreign currency translation
adjustments 7 1 (8)
------ ------ ------
Balance, end of year 204 841 767
------ ------ ------
Total shareholder's equity $4,574 $4,792 $4,257
====== ====== ======
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
($ IN MILLIONS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1999 1998 1997
-------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 511 $ 556 $ 517
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization and other non-cash items (145) (118) (105)
Realized capital gains and losses (195) (332) (192)
Interest credited to contractholder funds 1,260 1,190 1,167
Changes in:
Policy benefit and other insurance reserves (3) (55) (55)
Unearned premiums 3 (11) (45)
Deferred policy acquisition costs (267) (252) (236)
Reinsurance recoverables (78) (39) (16)
Income taxes payable 73 27 38
Other operating assets and liabilities (91) 117 (36)
-------- ------- -------
Net cash provided by operating activities 1,068 1,083 1,037
-------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales
Fixed income securities 4,832 2,495 2,293
Equity securities 1,070 765 697
Real estate - 309 -
Investment collections
Fixed income securities 2,928 2,984 3,056
Mortgage loans 392 432 598
Investment purchases
Fixed income securities (10,261) (6,216) (6,267)
Equity securities (953) (529) (607)
Mortgage loans (906) (780) (409)
Change in short-term investments, net 10 (330) 172
Change in other investments, net (36) (95) 35
-------- ------- -------
Net cash used in investing activities (2,924) (965) (432)
-------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of redeemable preferred stock 8 13 13
Contractholder fund deposits 5,594 3,275 2,657
Contractholder fund withdrawals (3,684) (3,306) (3,076)
Dividends paid (100) (108) (133)
-------- ------- -------
Net cash provided by (used in) financing activities 1,818 (126) (539)
-------- ------- -------
NET (DECREASE) INCREASE IN CASH (38) (8) 66
CASH AT BEGINNING OF YEAR 109 117 51
-------- ------- -------
CASH AT END OF YEAR $ 71 $ 109 $ 117
======== ======= =======
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. GENERAL
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Allstate Life Insurance Company ("ALIC") and its wholly owned subsidiaries
(collectively referred to as the "Company"). ALIC is wholly owned by
Allstate Insurance Company ("AIC"), a wholly owned subsidiary of The
Allstate Corporation (the "Corporation"). These consolidated financial
statements have been prepared in conformity with generally accepted
accounting principles. All significant intercompany accounts and
transactions have been eliminated.
NATURE OF OPERATIONS
The Company is engaged principally in the life and savings business in the
United States. The Company owns a subsidiary, Allstate Insurance Company of
Canada ("AICC"), which operates in Canada and sells property-liability
insurance.
The Company's life and savings ("Life and Savings") segment markets a broad
line of life insurance and savings products countrywide, accounting for
approximately 97% of the Company's 1999 statutory premiums and deposits.
Statutory premiums and deposits are determined in accordance with accounting
principles prescribed or permitted by the insurance department of the
applicable domiciliary state and include premiums and deposits for all
products. Life insurance consists of traditional products, including term
and whole life, interest-sensitive life, immediate annuities with life
contingencies, variable life and indexed life insurance. Savings products
include deferred annuities and immediate annuities without life
contingencies. Deferred annuities include fixed rate, market value adjusted,
indexed and variable annuities. Group pension savings products include
contracts with fixed or indexed rates and fixed terms, such as guaranteed
investment contracts and funding agreements, and deferred and immediate
annuities also referred to as retirement annuities. In 1999, annuity
premiums and deposits represented approximately 79% of Life and Savings
total statutory premiums and deposits.
The Company is authorized to sell life and savings products in all 50
states, the District of Columbia and Puerto Rico. The Company is also
authorized to sell certain insurance products in various foreign countries.
The top geographic locations in the United States for statutory premiums and
deposits for the Life and Savings segment were California, Florida,
Illinois, and Pennsylvania for the year ended December 31, 1999. No other
jurisdiction accounted for more than 5% of statutory premiums and deposits
for Life and Savings. The Company distributes its life and savings products
using Allstate agents, which include life specialists and financial
advisors, as well as banks, independent agents, securities firms and through
direct response methods. Although the Company currently benefits from
agreements with financial services entities who market and distribute its
products, change in control of these non-affiliated entities with which the
Company has alliances could negatively impact Life and Savings sales.
The Company's property-liability ("Property-Liability") segment is
principally engaged in private passenger auto and homeowners insurance in
Canada, writing approximately 3% of the Company's total 1999 statutory
premiums. Statutory premiums are determined in accordance with accounting
principles prescribed or permitted by the insurance department of the
applicable domiciliary province.
The Company distributes property-liability products in Canada. The top
provinces for statutory premiums earned by the Property-Liability segment
were Ontario, Quebec, Alberta, and New Brunswick for the year ended
December 31, 1999. No other province accounted for more than 5% of statutory
premiums earned for Property-Liability. The Company distributes
property-liability products through Allstate agents, primarily employee
agents, but also utilizes independent agents and specialized brokers to
expand market reach.
The Company monitors economic and regulatory developments which have the
potential to impact its business. Recently enacted federal legislation will
allow for banks and other financial organizations to have greater
participation in securities and insurance businesses. This legislation may
present an increased level of competition for sales of the Company's
products. Furthermore, the market for deferred annuities and
interest-sensitive life insurance is enhanced by the tax incentives
available under current law. Any legislative changes which lessen these
incentives are likely to negatively impact the demand for these products.
7
<PAGE>
Additionally, traditional demutualization of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies
to convert to a hybrid structure known as a mutual holding company could
have a number of significant effects on the Company by (1) increasing
industry competition through consolidation caused by mergers and
acquisitions related to the new corporate form of business; and (2)
increasing competition in the capital markets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds, mortgage-backed and asset-backed
securities, and redeemable preferred stocks. All fixed income securities are
carried at fair value and may be sold prior to their contractual maturity
("available for sale"). The difference between the amortized cost and fair
value, net of deferred income taxes, certain life and annuity deferred
policy acquisition costs, and certain reserves for life-contingent contract
benefits, is reflected as a component of shareholder's equity. Provisions
are recognized for declines in the value of fixed income securities that are
other than temporary. Such writedowns are included in realized capital gains
and losses.
Mortgage loans are carried at outstanding principal balance, net of
unamortized premium or discount and valuation allowances. Valuation
allowances are established for impaired loans when it is probable that
contractual principal and interest will not be collected. Valuation
allowances for impaired loans reduce the carrying value to the fair value of
the collateral or the present value of the loan's expected future repayment
cash flows, discounted at the loan's original effective interest rate.
Valuation allowances on loans not considered to be impaired are established
based on consideration of the underlying collateral, borrower financial
strength, current and expected market conditions, and other factors.
Equity securities include common and non-redeemable preferred stocks and
real estate investment trusts which are carried at fair value and limited
partnerships which are recorded based on the equity method. The difference
between cost and fair value of equity securities, less deferred income
taxes, is reflected as a component of shareholder's equity.
Short-term investments are carried at cost or amortized cost, which
approximates fair value, and includes collateral received in connection with
securities lending activities.
Policy loans are carried at unpaid principal balances. Other investments
consist primarily of real estate investments, which are accounted for by the
equity method if held for investment, or depreciated cost, net of valuation
allowances, if the Company has an active plan to sell.
Investment income consists primarily of interest, dividends, and gains and
losses for certain derivative transactions. Interest is recognized on an
accrual basis and dividends are recorded at the ex-dividend date. Interest
income on mortgage-backed and asset-backed securities is determined on the
effective yield method, based on estimated principal repayments. Accrual of
income is suspended for fixed income securities and mortgage loans that are
in default or when the receipt of interest payments is in doubt. Realized
capital gains and losses are determined on a specific identification basis.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments include swaps, futures, forwards, and
options, including caps and floors. When derivatives meet specific criteria
they may be designated as accounting hedges and accounted for on either a
fair value, deferral, or accrual basis, depending upon the nature of the
hedge strategy, the method used to account for the hedged item and the
derivative used. Derivatives that are not designated as accounting hedges
are accounted for on a fair value basis.
If, subsequent to entering into a hedge transaction, the derivative becomes
ineffective (including if the hedged item is sold or otherwise extinguished
or the occurrence of a hedged anticipatory transaction is no longer
probable), the Company terminates the derivative position. Gains and losses
on these terminations are reported in realized capital gains and losses in
the period they occur. The Company may also terminate derivatives as a
result of other events or circumstances. Gains and losses on these
terminations are deferred and amortized over the remaining life of either
the hedge or the hedged item, whichever is shorter.
FAIR VALUE ACCOUNTING Under fair value accounting, realized and unrealized
gains and losses on derivatives are recognized in either earnings or
shareholder's equity when they occur.
The Company accounts for certain of its interest rate swaps, equity-indexed
options, equity-indexed futures, and foreign currency swaps and forwards as
hedges on a fair value basis when specific criteria are met. For swaps or
options, the derivative must reduce the primary market risk exposure (e.g.,
interest rate risk, equity price risk or foreign currency risk) of the
hedged item in conjunction with the specific hedge strategy; be designated
as a hedge at the inception of the
8
<PAGE>
transaction; and have a notional amount and term that does not exceed the
carrying value and expected maturity, respectively, of the hedged item. In
addition, options must have a reference index (e.g., S&P 500) that is the
same as, or highly correlated with, the reference index of the hedged item.
For futures or forward contracts, the derivative must reduce the primary
market risk exposure on an enterprise or transaction basis in conjunction
with the hedge strategy; be designated as a hedge at the inception of the
transaction; and be highly correlated with the fair value of, or interest
income or expense associated with, the hedged item at inception and
throughout the hedge period.
For such interest rate swaps, equity-indexed options, foreign currency
swaps, and forwards, changes in fair value are reported net of tax in
shareholder's equity, exclusive of interest accruals. Changes in fair value
of certain equity-indexed options are reflected as an adjustment of the
hedged item. Accrued interest receivable and payable on swaps are reported
in net investment income. Premiums paid for certain equity-indexed options
are reported as equity securities and amortized to net investment income
over the lives of the agreements.
The Company also has certain derivatives which are used for risk management
purposes for which hedge accounting is not applied and are therefore
accounted for on a fair value basis. These derivatives primarily consist of
equity-indexed instruments and certain interest rate futures. Based upon
certain interest rate or equity price risk reduction strategies, gains and
losses on these derivatives are recognized in net investment income,
realized gains or losses or interest credited to contractholders' balances
during the period on a current basis.
DEFERRAL ACCOUNTING Under deferral accounting, gains and losses on
derivatives are deferred and recognized in earnings in conjunction with
earnings on the hedged item. The Company accounts for interest rate futures
and certain foreign currency forwards as hedges using deferral accounting
for anticipatory investment purchases, sales and capital infusions, when the
criteria for futures and forwards (discussed above) are met. In addition,
anticipated transactions must be probable of occurrence and their
significant terms and characteristics identified.
Changes in fair values of these derivatives are initially deferred and
reported as other liabilities and accrued expenses. Once the anticipated
transaction occurs, the deferred gains or losses are considered part of the
cost basis of the asset and reported net of tax in shareholder's equity or
recognized as a gain or loss from disposition of the asset, as appropriate.
The Company reports initial margin deposits on futures in short-term
investments. Fees and commissions paid on these derivatives are also
deferred as an adjustment to the carrying value of the hedged item.
ACCRUAL ACCOUNTING Under accrual accounting, interest income or expense
related to the derivative is accrued and recorded as an adjustment to the
interest income or expense on the hedged item. The Company accounts for
certain interest rate swaps, caps and floors, and certain foreign currency
swaps as hedges on an accrual basis when the criteria for swaps or options
(discussed above) are met.
Premiums paid for interest rate caps and floors are reported as investments
and amortized to net investment income over the lives of the agreements.
RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS, AND INTEREST CREDITED
Traditional life insurance products consist principally of products with
fixed and guaranteed premiums and benefits, primarily term and whole life
insurance products. Premiums from these products are recognized as revenue
when due. Benefits are recognized in relation to such revenue so as to
result in the recognition of profits over the life of the policy and are
reflected in contract benefits.
Interest-sensitive life contracts are insurance contracts whose terms are
not fixed and guaranteed. The terms that may be changed include premiums
paid by the contractholder, interest credited to the contractholder account
balance and one or more amounts assessed against the contractholder.
Premiums from these contracts are reported as deposits to contractholder
funds. Life and annuity contract charges consist of fees assessed against
the contractholder account balance for cost of insurance (mortality risk),
contract administration and surrender charges. Contract benefits include
interest credited to contracts and claims incurred in excess of the related
contractholder account balance.
Immediate annuities with life contingencies and single premium life
insurance products are limited payment contracts, as these contracts provide
insurance protection over a period that extends beyond the period during
which premiums are collected. Gross premiums in excess of the net premium on
limited payment contracts are deferred and recognized over the contract
period. Contract benefits are recognized in relation to such revenue so as
to result in the recognition of profits over the life of the policy.
Contracts that do not subject the Company to significant risk arising from
mortality or morbidity are referred to as investment contracts. Fixed rate
annuities, market value adjusted annuities, indexed annuities, immediate
annuities without life contingencies, certain guaranteed investment
contracts and funding agreements are considered investment
9
<PAGE>
contracts. Deposits received for such contracts are reported as deposits to
contractholder funds. Life and annuity contract charges for investment
contracts consist of charges assessed against the contractholder account
balance for contract administration and surrenders. Contract benefits
include interest credited and claims incurred in excess of the related
contractholder account balance.
Crediting rates for fixed rate annuities and interest sensitive life
contracts are adjusted periodically by the Company to reflect current market
conditions. Crediting rates for indexed annuities and indexed life products
are based on an interest rate index, such as LIBOR or an equity index, such
as the S&P 500.
Investment contracts also include variable annuity, variable life and
certain guaranteed investment contracts which are sold as Separate Accounts
products. The assets supporting these products are legally segregated and
available only to settle Separate Accounts contract obligations. Deposits
received are reported as Separate Accounts liabilities. Life and annuity
contract charges for these contracts consist of charges assessed against the
Separate Accounts fund balances for contract maintenance, administration,
mortality, expense and surrenders.
Property-liability premiums written are deferred and earned on a pro rata
basis over the terms of the policies. The portion of premiums written
applicable to the unexpired terms of the policies is recorded as unearned
premiums. Claims and claims expense for property-liability include paid
losses and changes in claim reserves.
DEFERRED POLICY ACQUISITION COSTS
Certain costs which vary with and are primarily related to acquiring life
and savings business, principally agents' and brokers' remuneration, premium
taxes, certain underwriting costs and direct mail solicitation expenses, are
deferred and amortized into income. Deferred policy acquisition costs are
periodically reviewed as to recoverability and written down where necessary.
For traditional life insurance and limited payment contracts, these costs
are amortized in proportion to the estimated revenue on such business.
Assumptions relating to estimated revenue, as well as to all other aspects
of the deferred acquisition costs and reserve calculations, are determined
based upon conditions as of the date of policy issue and are generally not
revised during the life of the policy. Any deviations from projected
business inforce, resulting from actual policy terminations differing from
expected levels, and any estimated premium deficiencies change the rate of
amortization in the period such events occur. Generally, the amortization
period for these contracts approximates the estimated lives of the policies.
For interest-sensitive life and investment contracts, these costs are
amortized in proportion to the estimated gross profits on such business over
the estimated lives of the contract periods. Gross profits are determined at
the date of policy issue and comprise estimated investment, mortality,
expense margins and surrender charges. Assumptions underlying the gross
profits are periodically updated to reflect actual experience, and changes
in the amount or timing of estimated gross profits will result in
adjustments to the cumulative amortization of these costs.
The present value of future profits inherent in acquired blocks of insurance
is classified as a component of deferred policy acquisition costs. The
present value of future profits is amortized over the life of the blocks of
insurance using current crediting rates.
To the extent unrealized gains or losses on fixed income securities carried
at fair value would result in an adjustment of estimated gross profits had
those gains or losses actually been realized, the related unamortized
deferred acquisition costs, including the present value of future profits,
are adjusted together with unrealized net capital gains included in
shareholder's equity.
Certain costs which vary with and are primarily related to acquiring
property-liability insurance business, principally agents' remuneration,
premium taxes and inspection costs, are deferred and amortized to income as
premiums are earned. Future investment income is considered in determining
the recoverability of deferred policy acquisition costs.
REINSURANCE RECOVERABLE
In the normal course of business, the Company seeks to limit aggregate and
single exposure to losses on large risks by purchasing reinsurance from
other insurers (see Note 8). The amounts reported in the consolidated
statements of financial position include amounts billed to reinsurers on
losses paid as well as estimates of amounts expected to be recovered from
reinsurers on incurred losses that have not yet been paid. Reinsurance
recoverables on unpaid losses are estimated based upon assumptions
consistent with those used in establishing the liabilities related to the
underlying reinsured contracts. Insurance liabilities, including life
contingent policy reserves, are reported gross of reinsurance recoverables.
Prepaid reinsurance premiums are deferred and reflected in income in a
manner consistent with the recognition of premiums on the reinsured
contracts. Reinsurance does not extinguish the Company's primary liability
10
<PAGE>
under the policies written and therefore reinsurers and amounts recoverable
therefrom are regularly evaluated by the Company and allowances for
uncollectible reinsurance are established as appropriate.
INCOME TAXES
The income tax provision is calculated under the liability method. Deferred
tax assets and liabilities are recorded based on the difference between the
financial statement and tax bases of assets and liabilities at the enacted
tax rates. The principal assets and liabilities giving rise to such
differences are insurance reserves and deferred policy acquisition costs.
Deferred income taxes also arise from unrealized capital gains and losses on
equity securities and fixed income securities carried at fair value, and
unrealized foreign currency translation adjustments.
SEPARATE ACCOUNTS
The Company issues deferred variable annuities, variable life contracts and
certain guaranteed investment contracts, the assets and liabilities of which
are legally segregated and recorded as assets and liabilities of the
Separate Accounts. Absent any guarantees wherein the Company contractually
guarantees either a minimum return or account value to the beneficiaries of
the contractholders in the form of a death benefit, variable annuity and
variable life contractholders bear the investment risk that the Separate
Accounts' funds may not meet their stated investment objectives.
The assets of the Separate Accounts are carried at fair value. Separate
Accounts liabilities represent the contractholders' claim to the related
assets and are carried at the fair value of the assets. In the event that
the asset value of certain contractholder accounts are projected to be below
the value guaranteed by the Company, a liability is established through a
charge to earnings. Investment income and realized capital gains and losses
of the Separate Accounts accrue directly to the contractholders and
therefore, are not included in the Company's consolidated statements of
operations. Revenues to the Company from the Separate Accounts consist of
contract maintenance and administration fees, and mortality, surrender and
expense risk charges.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of individual or group policies
and contracts that include an investment component, including most fixed
annuities, interest-sensitive life policies and certain other investment
contracts. Deposits received are recorded as interest-bearing liabilities.
Contractholder funds are equal to deposits received, net of commissions, and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Detailed information on
crediting rates and surrender and withdrawal protection on contractholder
funds are outlined in Note 7.
RESERVES FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to
traditional life insurance, group retirement annuities and immediate
annuities with life contingencies is computed on the basis of assumptions as
to mortality, future investment yields, terminations and expenses at the
time the policy is issued. These assumptions, which for traditional life
insurance are applied using the net level premium method, include provisions
for adverse deviation and generally vary by such characteristics as type of
coverage, year of issue and policy duration. Detailed reserve assumptions
and reserve interest rates are outlined in Note 7. To the extent that
unrealized gains on fixed income securities would result in a premium
deficiency had those gains actually been realized, the related increase in
reserves is recorded as a reduction of the unrealized net capital gains
included in shareholder's equity.
PROPERTY-LIABILITY CLAIMS AND CLAIMS EXPENSE
The property-liability reserve for claims and claims expense is the
estimated amount necessary to settle both reported and unreported claims of
insured property-liability losses, based upon the facts in each case and the
Company's experience with similar cases. Estimated amounts of salvage and
subrogation are deducted from the reserve for claims and claims expense. The
establishment of appropriate reserves, including reserves for catastrophes,
is an inherently uncertain process. Reserve estimates are regularly reviewed
and updated, using the most current information available. Any resulting
adjustments are reflected in current operations (see Note 7). These
adjustments may be material.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to invest, commitments to extend mortgage loans and credit
guarantees have only off-balance-sheet risk because their contractual
amounts are not recorded in the Company's consolidated statements of
financial position. The contractual amounts and fair values of these
instruments are outlined in Note 5.
11
<PAGE>
FOREIGN CURRENCY TRANSLATION
The Company has a foreign subsidiary, AICC, where the local currency is
deemed to be the functional currency in which AICC operates. The financial
statements of AICC are translated into U.S. dollars at the exchange rate in
effect at the end of a reporting period for assets and liabilities and at
the average exchange rates during the period for results of operations. The
unrealized gains or losses from the translation of the net assets are
recorded as unrealized foreign currency translation adjustments, and
included in accumulated other comprehensive income in the consolidated
statements of financial position. Changes in unrealized foreign currency
translation adjustments are included in other comprehensive income. Gains
and losses from foreign currency transactions are reported in operating
costs and expenses and have not been significant.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
PENDING ACCOUNTING STANDARDS
In June, 1999, the Financial Accounting Standards Board ("FASB") delayed the
effective date of Statement of Financial Accounting Standard ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS
133 replaces existing pronouncements and practices with a single, integrated
accounting framework for derivatives and hedging activities. This statement
requires that all derivatives be recognized on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of derivatives will either be offset
against the change in fair value of the hedged assets, liabilities, or firm
commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. Additionally, the change in
fair value of a derivative which is not effective as a hedge will be
immediately recognized in earnings. The delay was effected through the
issuance of SFAS 137, which extends the SFAS No. 133 requirements to fiscal
years beginning after June 15, 2000. As such, the Company expects to adopt
the provisions of SFAS No. 133 as of January 1, 2001. The impact of this
statement is dependent upon the Company's derivative positions and market
conditions existing at the date of adoption. Based on existing
interpretations of the requirements of SFAS No. 133, the impact of adoption
of this statement is not expected to be material to financial position,
however, may be material to results of operations.
3. RELATED PARTY TRANSACTIONS
BUSINESS OPERATIONS
The Company utilizes services performed and business facilities owned or
leased and operated by AIC in conducting its business activities. In
addition, ALIC and its domestic subsidiaries share the services of employees
with AIC. The Company reimburses AIC for the operating expenses incurred on
behalf of the Company. The Company is charged for the cost of these
operating expenses based on the level of services provided. Operating
expenses, including compensation, retirement and other benefit programs
allocated to the Company were $199 million, $166 million, and $140 million
in 1999, 1998 and 1997, respectively. A portion of these expenses relate to
the acquisition of business which are deferred and amortized into income.
STRUCTURED SETTLEMENT ANNUITIES
The Company issued $61 million, $64 million and $52 million of structured
settlement annuities, a type of immediate annuity, in 1999, 1998 and 1997,
respectively, at prices determined based upon interest rates in effect at
the time of purchase, to fund structured settlements in matters involving
AIC. Of these amounts, $17 million, $23 million and $17 million relate to
structured settlement annuities with life contingencies and are included in
premium income for 1999, 1998, and 1997, respectively. In most cases, these
annuities were issued under a "qualified assignment," which means the
Company assumed AIC's obligation to make the future payments.
AIC has issued surety bonds, in return for premiums of $476 thousand, $469
thousand, $396 thousand in 1999, 1998 and 1997, respectively, to guarantee
the payment of structured settlement benefits assumed and funded by certain
annuity contracts issued by the Company (from both AIC and non-related
parties). The Company has entered into a General Indemnity Agreement
pursuant to which it has indemnified AIC for any losses associated with the
surety bonds and has granted AIC certain collateral security rights with
respect to the annuities and certain other rights in the event of any
defaults covered by the surety bonds.
12
<PAGE>
Reserves recorded by the Company for annuities related to the surety bonds
were $4.50 billion and $4.14 billion at December 31, 1999 and 1998,
respectively.
REINSURANCE TRANSACTIONS
The Company has entered into a modified coinsurance contract with Allstate
Reinsurance, Ltd. ("Allstate Re"), an affiliate of the Company, to cede 50%
of certain fixed annuity business issued under a distribution agreement with
PNC Bank NA. Under the terms of the contract, a trust has been established
to provide protection to the Company for ceded liabilities. This agreement
is continuous but may be terminated by either party with 60 days notice.
The Company has entered into a contract to reinsure 100% of all credit
insurance written by AIC. This agreement is continuous but may be terminated
by either party with 60 days notice.
The Company enters into certain intercompany reinsurance transactions with
its wholly owned subsidiaries within the Life and Savings segment. The
Company enters into these transactions in order to maintain underwriting
control and spread risk among various legal entities. These reinsurance
agreements have been approved by the appropriate regulatory authorities. All
significant intercompany transactions have been eliminated in consolidation.
At December 31, 1999, $1.98 billion of the Company's investments are held in
a trust for the benefit of Northbrook Life Insurance Company, a wholly owned
subsidiary, to permit it to meet policyholder obligations under its
reinsurance agreement with the Company.
AICC has entered into an excess of loss reinsurance agreement with AIC
covering certain property policies. Under the current contract, the
aggregate limit for which AIC would indemnify AICC for all loss occurrences
during the term of the current contract is $66 million. The amount has been
translated into U.S. dollars utilizing the exchange rate as of December 31,
1999.
Starting January 1, 1999, AICC has entered into a contract to reinsure
personal automobile business written by Pembridge Insurance Company
("Pembridge"), a subsidiary of the Corporation. Under the renewable excess
of loss contract, AICC reinsures Pembridge for personal auto business that
provides third party and accident coverages. For each loss occurrence, the
contract contains two layers of loss. In the first layer of loss protection,
losses in excess of $1 million up to $3 million will be covered by AICC. In
the second layer of loss protection, AICC covers losses in excess of the
first $3 million layer up to $7 million. For each loss occurrence, the
maximum amount AICC will indemnify Pembridge in both layers for third party
liability is $689 thousand. All amounts have been translated into U.S.
dollars utilizing the exchange rate as of December 31, 1999.
The impact to the Company's consolidated statement of operations from
related party reinsurance transactions are as follows:
($ in millions)
<TABLE>
<CAPTION>
ASSUMED: CEDED:
---------------------------- ----------------------------
CLAIMS AND CLAIMS CLAIMS AND CLAIMS
YEAR ENDED EXPENSE AND EXPENSE AND
DECEMBER 31, PREMIUMS CONTRACT BENEFITS PREMIUMS CONTRACT BENEFITS
- ------------------------ -------- ----------------- -------- -----------------
<S> <C> <C> <C> <C>
1999 $ 25 $23 $2 $ 1
1998 23 20 1 10
1997 117 15 2 -
</TABLE>
The reinsurance recoverable and reinsurance payable balances pertaining to
related party reinsurance agreements were not material at December 31, 1999
and 1998, respectively.
DEBT
The Company has entered into an intercompany loan agreement with the
Corporation. The amount of funds available to the Company at a given point
in time is dependent upon the debt position of the Corporation. There was no
outstanding balance at December 31, 1999 and 1998, respectively.
The Company has access to two credit facilities maintained by the
Corporation as a potential source of funds to manage short-term liquidity.
These include a $1.50 billion, five-year revolving line of credit, expiring
in 2001 and a $50 million, one-year revolving line of credit expiring in
2000. The ability of the Company to borrow from the five-year line of credit
is predicated upon AIC maintaining a specified statutory surplus level and
the Corporation's debt to equity ratio (as
13
<PAGE>
defined in the agreement) must not exceed a designated level. The Company
has not drawn upon either credit facility during 1999 or 1998.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for
fixed income securities are as follows:
($ in millions)
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ----------------- FAIR
COST GAINS LOSSES VALUE
--------- ------- ------- -------
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1999
U.S. government and agencies $ 1,957 $ 225 $ (9) $ 2,173
Municipal 736 10 (15) 731
Corporate 16,059 430 (434) 16,055
Foreign government 536 15 (9) 542
Mortgage-backed securities 5,612 86 (110) 5,588
Asset-backed securities 2,389 6 (24) 2,371
Redeemable preferred stock 65 - (2) 63
------- ------ ----- -------
Total fixed income securities $27,354 $ 772 $(603) $27,523
======= ====== ===== =======
AT DECEMBER 31, 1998
U.S. government and agencies $ 2,022 $ 751 $ (1) $ 2,772
Municipal 552 47 - 599
Corporate 13,595 1,223 (76) 14,742
Foreign government 264 6 - 270
Mortgage-backed securities 5,773 237 (1) 6,009
Asset-backed securities 2,355 36 (6) 2,385
Redeemable preferred stock 69 12 - 81
------- ------ ----- -------
Total fixed income securities $24,630 $2,312 $ (84) $26,858
======= ====== ===== =======
</TABLE>
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at
December 31, 1999:
($ in millions)
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- -------
<S> <C> <C>
Due in one year or less $ 693 $ 694
Due after one year through five years 5,519 5,538
Due after five years through ten years 6,425 6,291
Due after ten years 6,716 7,041
------- -------
19,353 19,564
Mortgage- and asset-backed securities 8,001 7,959
------- -------
Total $27,354 $27,523
======= =======
</TABLE>
Actual maturities may differ from those scheduled as a result of prepayments
by the issuers.
14
<PAGE>
($ in millions)
<TABLE>
<CAPTION>
NET INVESTMENT INCOME 1999 1998 1997
YEAR ENDED DECEMBER 31, ------ ------ ------
<S> <C> <C> <C>
Fixed income securities $1,947 $1,860 $1,825
Mortgage loans 279 253 265
Equity securities 17 32 18
Other 67 40 46
------ ------ ------
Investment income, before expense 2,310 2,185 2,154
Investment expense 45 46 36
------ ------ ------
Net investment income $2,265 $2,139 $2,118
====== ====== ======
</TABLE>
($ in millions)
<TABLE>
<CAPTION>
REALIZED CAPITAL GAINS AND LOSSES 1999 1998 1997
YEAR ENDED DECEMBER 31, ---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ 11 $ 92 $ 43
Equity securities 94 59 123
Other investments 90 181 26
---- ---- ----
Realized capital gains and losses 195 332 192
Income taxes 69 121 67
---- ---- ----
Realized capital gains and losses, after-tax $126 $211 $125
==== ==== ====
</TABLE>
Excluding calls and prepayments, gross gains of $120 million, $68 million
and $41 million and gross losses of $109 million, $32 million and $44
million were realized on sales of fixed income securities during 1999, 1998
and 1997, respectively.
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income and equity securities included
in shareholder's equity at December 31, 1999, are as follows:
($ in millions)
<TABLE>
<CAPTION>
GROSS UNREALIZED
COST/ ----------------- UNREALIZED
AMORTIZED COST FAIR VALUE GAINS LOSSES NET GAINS
-------------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C>
Fixed income securities $27,354 $27,523 $ 772 $(603) $ 169
Equity securities 503 743 264 (24) 240
------- ------- ------ ----- -----
Total $27,857 $28,266 $1,036 $(627) 409
======= ======= ====== =====
Deferred income taxes, deferred policy
acquisition costs and other (189)
-----
Unrealized net capital gains $ 220
=====
</TABLE>
At December 31, 1998, equity securities had gross unrealized gains of
$320 million and gross unrealized losses of $18 million.
($ in millions)
<TABLE>
<CAPTION>
CHANGE IN UNREALIZED NET CAPITAL GAINS AND LOSSES 1999 1998 1997
YEAR ENDED DECEMBER 31, ------- ----- -----
<S> <C> <C> <C>
Fixed income securities $(2,059) $ 317 $ 743
Equity securities (62) (30) 116
------- ----- -----
Total (2,121) 287 859
Deferred income taxes, deferred policy acquisition costs
and other 1,477 (214) (609)
------- ----- -----
(Decrease) increase in unrealized net capital gains $ (644) $ 73 $ 250
======= ===== =====
</TABLE>
15
<PAGE>
INVESTMENT LOSS PROVISIONS AND VALUATION ALLOWANCES
Pretax provisions for investment losses, principally relating to other than
temporary declines in value of fixed income securities and equity
securities, and valuation allowances on mortgage loans were $20 million, $17
million and $15 million in 1999, 1998 and 1997, respectively.
MORTGAGE LOAN IMPAIRMENT
A mortgage loan is impaired when it is probable that the Company will be
unable to collect all amounts due according to the contractual terms of the
loan agreement.
The components of impaired loans at December 31 are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Impaired loans
With valuation allowances $25 $35
Less: valuation allowances (7) (9)
Without valuation allowances 11 36
--- ---
Net carrying value of impaired loans $29 $62
=== ===
</TABLE>
The net carrying value of impaired loans at December 31, 1999 and 1998
comprise $22 million and $60 million, respectively, measured at the fair
value of the collateral, and $7 million and $2 million, respectively,
measured at the present value of the loan's expected future cash flows
discounted at the loan's effective interest rate. Impaired loans without
valuation allowances include collateral dependent loans where the fair value
of the collateral is greater than the recorded investment in the loans.
Interest income is recognized on a cash basis for impaired loans carried at
the fair value of the collateral, beginning at the time of impairment. For
other impaired loans, interest is accrued based on the net carrying value.
The Company recognized interest income of $2 million, $5 million and $8
million on impaired loans during 1999, 1998 and 1997, respectively, of which
$2 million, $5 million and $7 million was received in cash during 1999, 1998
and 1997, respectively. The average balance of impaired loans was $43
million, $53 million and $103 million during 1999, 1998 and 1997,
respectively.
Valuation allowances for mortgage loans at December 31, 1999, 1998 and 1997,
were $13 million, $15 million and $32 million, respectively. For the years
ended December 31, 1998 and 1997, releases of mortgage loan valuation
allowances for dispositions of impaired mortgage loans were $1 million and
$8 million, respectively. No mortgage loans valuation allowances were
released due to dispositions of impaired mortgage loans during 1999. For the
years ended December 31, 1999, 1998 and 1997, net reductions to mortgage
loan valuation allowances were $2 million, $16 million, $25 million,
respectively.
INVESTMENT CONCENTRATION FOR COMMERCIAL MORTGAGE PORTFOLIOS AND OTHER
INVESTMENT INFORMATION
The Company's mortgage loans are collateralized by a variety of commercial
real estate property types located throughout the United States.
Substantially all of the commercial mortgage loans are non-recourse to the
borrower. The states with the largest portion of the commercial mortgage
loan portfolio are listed below. Except for the following, holdings in no
other state exceeded 5% of the portfolio at December 31, 1999:
(% OF COMMERCIAL MORTGAGE PORTFOLIO CARRYING VALUE)
<TABLE>
<CAPTION>
1999 1998
----- -----
<S> <C> <C>
California 20.6% 23.7%
Illinois 7.9 7.8
Florida 7.9 5.8
New York 7.4 9.2
Texas 5.8 4.9
New Jersey 5.7 4.1
Pennsylvania 5.1 4.9
</TABLE>
16
<PAGE>
The types of properties collateralizing the commercial mortgage loans at
December 31, are as follows:
(% OF COMMERCIAL MORTGAGE PORTFOLIO CARRYING VALUE)
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Office buildings 31.5% 26.5%
Retail 26.9 31.2
Apartment complex 17.2 17.1
Warehouse 16.8 17.0
Industrial 2.2 2.6
Other 5.4 5.6
------ ------
100.0% 100.0%
====== ======
</TABLE>
The contractual maturities of the commercial mortgage loan portfolio as of
December 31, 1999, for loans that were not in foreclosure are as follows:
($ in millions)
<TABLE>
<CAPTION>
NUMBER CARRYING
OF LOANS VALUE PERCENT
-------- -------- -------
<S> <C> <C> <C>
2000 40 $ 239 6.3%
2001 50 214 5.6
2002 63 273 7.2
2003 71 282 7.4
2004 55 280 7.4
Thereafter 515 2,513 66.1
--- ------ ------
Total 794 $3,801 100.0%
=== ====== ======
</TABLE>
In 1999, $190 million of commercial mortgage loans were contractually due.
Of these, 81.4% were paid as due, 15.9% were refinanced at prevailing market
terms, 0.3% were foreclosed or are in the process of foreclosure, and 2.4%
were in the process of refinancing or restructuring discussions.
At December 31, 1999, there were no investments, excluding equity
securities, that were non-income producing during 1999.
At December 31, 1999, fixed income securities with a carrying value of $61
million were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving derivative financial instruments and other off-balance-sheet
financial instruments. The fair value estimates of financial instruments
presented below are not necessarily indicative of the amounts the Company
might pay or receive in actual market transactions. Potential taxes and
other transaction costs have not been considered in estimating fair value.
The disclosures that follow do not reflect the fair value of the Company as
a whole since a number of the Company's significant assets (including
deferred policy acquisition costs and reinsurance recoverables) and
liabilities (including traditional life, interest-sensitive life and
property-liability reserves and deferred income taxes) are not considered
financial instruments and are not carried at fair value. Other assets and
liabilities considered financial instruments such as accrued investment
income and cash are generally of a short-term nature. Their carrying values
are assumed to approximate fair value.
17
<PAGE>
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Fixed income securities $27,523 $27,523 $26,858 $26,858
Mortgage loans 3,801 3,704 3,285 3,483
Equity securities 743 743 748 748
Short-term investments 711 711 742 742
Policy loans 606 606 569 569
Separate Accounts 13,857 13,857 10,098 10,098
</TABLE>
CARRYING VALUE AND FAIR VALUE INCLUDE THE EFFECTS OF DERIVATIVE FINANCIAL
INSTRUMENTS WHERE APPLICABLE.
Fair values for fixed income securities are based on quoted market prices
where available. Non-quoted securities are valued based on discounted cash
flows using current interest rates for similar securities. Equity securities
are valued based principally on quoted market prices. Mortgage loans are
valued based on discounted contractual cash flows. Discount rates are
selected using current rates at which similar loans would be made to
borrowers with similar characteristics, using similar properties as
collateral. Loans that exceed 100% loan-to-value are valued at the estimated
fair value of the underlying collateral. Short-term investments are highly
liquid investments with maturities of less than one year whose carrying
value are deemed to approximate fair value.
The carrying value of policy loans are deemed to approximate fair value. The
Separate Accounts assets are carried in the consolidated statements of
financial position at fair value based on quoted market prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31,
are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------------------ ------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Contractholder funds on investment contracts $18,587 $17,918 $16,757 $16,509
Separate Accounts 13,857 13,857 10,098 10,098
</TABLE>
The fair value of contractholder funds on investment contracts is based on
the terms of the underlying contracts. Reserves on investment contracts with
no stated maturities (single and flexible premium deferred annuities) are
valued at the account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed
terms is estimated using discounted cash flow calculations based on interest
rates currently offered for contracts with similar terms and durations.
Separate Accounts liabilities are carried at the fair value of the
underlying assets.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments include swaps, futures, forwards and
options, including caps and floors. The Company primarily uses derivative
financial instruments to reduce its exposure to market risk (principally
interest rate, equity price and foreign currency risk) and in conjunction
with asset/liability management, in the Life and Savings segment. The
Company does not hold or issue these instruments for trading purposes.
18
<PAGE>
The following table summarizes the contract or notional amount, credit
exposure, fair value and carrying value of the Company's derivative
financial instruments at December 31, as follows:
($ in millions)
<TABLE>
<CAPTION>
1999
--------------------------------------------
CARRYING
CONTRACT VALUE
/NOTIONAL CREDIT FAIR ASSETS/
AMOUNT EXPOSURE VALUE (LIABILITIES)
--------- -------- ----- -------------
<S> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swap agreements
Pay floating rate, receive fixed rate $ 409 $ 9 $ 7 $ 3
Pay fixed rate, receive floating rate 1,170 37 37 19
Pay floating rate, receive floating rate 71 - - -
Financial futures and forward contracts 2,466 - (1) 4
Interest rate cap and floor agreements 1,861 4 4 2
------ ---- ---- ----
Total interest rate contracts 5,977 50 47 28
EQUITY AND OTHER CONTRACTS
Options, warrants and financial futures 1,120 116 99 99
FOREIGN CURRENCY CONTRACTS
Foreign currency swap agreements 535 - (1) -
------ ---- ---- ----
Total derivative financial instruments $7,632 $166 $145 $127
====== ==== ==== ====
</TABLE>
($ in millions)
<TABLE>
<CAPTION>
1998
--------------------------------------------
CARRYING
CONTRACT VALUE
/NOTIONAL CREDIT FAIR ASSETS/
AMOUNT EXPOSURE VALUE (LIABILITIES)
--------- -------- ----- -------------
<S> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swap agreements
Pay floating rate, receive fixed rate $ 474 $ 14 $ 30 $ 24
Pay fixed rate, receive floating rate 965 - (32) (17)
Pay floating rate, receive floating rate 73 - (1) -
Financial futures and forward contracts 227 - - -
Interest rate cap and floor agreements 3,049 2 2 3
------ ---- ---- ----
Total interest rate contracts 4,788 16 (1) 10
EQUITY AND OTHER CONTRACTS
Options, warrants and financial futures 723 205 205 205
FOREIGN CURRENCY CONTRACTS
Foreign currency swap agreements 79 - (3) (3)
------ ---- ---- ----
Total derivative financial instruments $5,590 $221 $201 $212
====== ==== ==== ====
</TABLE>
CREDIT EXPOSURE INCLUDES THE EFFECTS OF LEGALLY ENFORCEABLE MASTER NETTING
AGREEMENTS.
CREDIT EXPOSURE AND FAIR VALUE INCLUDE ACCRUED INTEREST WHERE APPLICABLE.
CARRYING VALUE IS REPRESENTATIVE OF DEFERRED GAINS AND LOSSES, UNAMORTIZED
PREMIUM, ACCRUED INTEREST AND/OR UNREALIZED GAINS AND LOSSES DEPENDING ON
THE ACCOUNTING FOR THE DERIVATIVE FINANCIAL INSTRUMENT.
The contract or notional amounts are used to calculate the exchange of
contractual payments under the agreements and are not representative of the
potential for gain or loss on these agreements.
Credit exposure represents the Company's potential loss if all of the
counterparties failed to perform under the contractual terms of the
contracts and all collateral, if any, became worthless. This exposure is
measured by the fair value of contracts with a positive fair value at the
reporting date reduced by the effect, if any, of master netting agreements.
19
<PAGE>
The Company manages its exposure to credit risk by utilizing highly rated
counterparties, establishing risk control limits, executing legally
enforceable master netting agreements and obtaining collateral where
appropriate. To date, the Company has not incurred any losses on derivative
financial instruments due to counterparty nonperformance.
Fair value is the estimated amount that the Company would receive (pay) to
terminate or assign the contracts at the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer and
exchange quotes are used to value the Company's derivatives.
INTEREST RATE SWAP AGREEMENTS involve the exchange, at specified intervals,
of interest payments calculated by reference to an underlying notional
amount. The Company generally enters into swap agreements to change the
interest rate characteristics of existing assets to more closely match the
interest rate characteristics of the corresponding liabilities.
The Company did not record any material deferred gains or losses on swaps
nor realize any material gains or losses on swap terminations in 1999, 1998
or 1997.
The Company paid a weighted average floating interest rate of 5.3% and 5.6%
and received a weighted average fixed interest rate of 7.1% and 6.8% in 1999
and 1998, respectively. The Company paid a weighted average fixed interest
rate of 5.7% and 6.5% and received a weighted average floating interest rate
of 5.0% and 6.0% in 1999 and 1998, respectively.
FINANCIAL FUTURES AND FORWARD CONTRACTS are commitments to either purchase
or sell designated financial instruments at a future date for a specified
price or yield. They may be settled in cash or through delivery. As part of
its asset/liability management, the Company generally utilizes futures and
forward contracts to manage its market risk related to fixed income
securities, equity securities, certain annuity contracts and anticipatory
investment purchases and sales. Futures and forwards used as hedges of
anticipatory transactions pertain to identified transactions which are
probable to occur and are generally completed within 90 days. Futures
contracts have limited off-balance-sheet credit risk as they are executed on
organized exchanges and require security deposits, as well as the daily cash
settlement of margins.
INTEREST RATE CAP AND FLOOR AGREEMENTS give the holder the right to receive
at a future date, the amount, if any, by which a specified market interest
rate exceeds the fixed cap rate or falls below the fixed floor rate, applied
to a notional amount. The Company purchases interest rate cap and floor
agreements to reduce its exposure to rising or falling interest rates
relative to certain existing assets and liabilities in conjunction with
asset/liability management.
EQUITY-INDEXED OPTION CONTRACTS AND EQUITY-INDEXED FINANCIAL FUTURES provide
returns based on a specified equity index applied to the instrument's
notional amount. The Company utilizes these instruments to achieve equity
appreciation, to reduce the market risk associated with certain annuity
contracts and for other risk management purposes. Where required,
counterparties post collateral to minimize credit risk.
DEBT WARRANTS provide the right to purchase a specified new issue of debt at
a predetermined price. The Company purchases debt warrants to protect
against long-term call risk.
FOREIGN CURRENCY CONTRACTS involve the future exchange or delivery of
foreign currency on terms negotiated at the inception of the contract. The
Company enters into these agreements primarily to manage the currency risk
associated with investing in securities and issuing obligations which are
denominated in foreign currencies.
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. Market risk exists for all of the
derivative financial instruments that the Company currently holds, as these
instruments may become less valuable due to adverse changes in market
conditions. The Company mitigates this risk through established risk control
limits set by senior management. In addition, the change in the value of the
Company's derivative financial instruments designated as hedges is generally
offset by the change in the value of the related assets and liabilities.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
A summary of the contractual amounts and fair values of off-balance-sheet
financial instruments at December 31, follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
CONTRACTUAL FAIR CONTRACTUAL FAIR
AMOUNT VALUE AMOUNT VALUE
----------- ----- ----------- -----
<S> <C> <C> <C> <C>
Commitments to invest $28 - $34 -
Commitments to extend mortgage loans 95 1 87 1
Credit guarantees 89 - 93 -
</TABLE>
20
<PAGE>
Except for credit guarantees, the contractual amounts represent the amount
at risk if the contract is fully drawn upon, the counterparty defaults and
the value of any underlying security becomes worthless. Unless noted
otherwise, the Company does not require collateral or other security to
support off-balance-sheet financial instruments with credit risk.
Commitments to invest generally represent commitments to acquire financial
interests or instruments. The Company enters into these agreements to allow
for additional participation in certain limited partnership investments.
Because the equity investments in the limited partnerships are not actively
traded, it is not practicable to estimate the fair value of these
commitments.
Commitments to extend mortgage loans are agreements to lend to a borrower
provided there is no violation of any condition established in the contract.
The Company enters these agreements to commit to future loan fundings at
predetermined interest rates. Commitments generally have fixed expiration
dates or other termination clauses. Commitments to extend mortgage loans,
which are secured by the underlying properties, are valued based on
estimates of fees charged by other institutions to make similar commitments
to similar borrowers.
Credit guarantees written represent conditional commitments to exchange
identified AAA or AA rated credit risk for identified A rated credit risk
upon bankruptcy or other event of default of the referenced credits. The
Company receives fees, which are reported in net investment income over the
lives of the commitments, for assuming the referenced credit risk. The
Company enters into these transactions in order to achieve higher yields
than if the referenced credits were directly owned.
The Company's maximum amount at risk, assuming bankruptcy or other default
of the referenced credits and the value of the referenced credits becomes
worthless, is the fair value of the identified AAA or AA rated securities.
The identified AAA or AA rated securities had a fair value of $88 million at
December 31, 1999. The Company includes the impact of credit guarantees in
its analysis of credit risk, and the referenced credits were current with
respect to their contractual terms at December 31, 1999
6. DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring business which were deferred and amortized for
the years ended December 31, 1999 and 1998 are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
YEAR ENDED DECEMBER 31: ------ ------
<S> <C> <C>
Balance, beginning of year $2,195 $1,992
Acquisition costs deferred 677 666
Amortization charged to income (366) (343)
Adjustment from unlocking (43) (69)
Effect on DPAC from unrealized gains/(losses) 231 (50)
Foreign currency translation 1 (1)
------ ------
Balance, end of year $2,695 $2,195
====== ======
</TABLE>
7. INSURANCE LIABILITIES
At December 31, the reserve for life-contingent contract benefits consists
of the following:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------ ------
<S> <C> <C>
Immediate annuities:
Structured settlement annuities $4,254 $4,694
Other immediate annuities 1,513 1,669
Traditional life 1,267 1,125
Other 114 113
------ ------
Total reserve for life-contingent contract benefits $7,148 $7,601
====== ======
</TABLE>
The assumptions for mortality generally utilized in calculating reserves
include, the U.S. population with projected calendar year improvements and
age setbacks for impaired lives for structured settlement annuities; the
1983 group
21
<PAGE>
annuity mortality table for other immediate annuities; and actual Company
experience plus a provision for adverse deviation for traditional life.
Interest rate assumptions vary from 3.5% to 11.7% for immediate annuities
and 4.0% to 11.3% for traditional life. Other estimation methods used
include the present value of contractually fixed future benefits for
structured settlement annuities, the present value of expected future
benefits based on historical experience for other immediate annuities and
the net level premium reserve method using the Company's withdrawal
experience rates for traditional life.
Premium deficiency reserves are established, if necessary, and have been
recorded for certain immediate annuities with life contingencies, to the
extent the unrealized gains on fixed income securities would result in a
premium deficiency had those gains actually been realized. A liability of
$65 million and $933 million is included in the reserves for life-contingent
contract benefits with respect to this deficiency for the years ended
December 31, 1999 and 1998, respectively. The decrease in this liability in
1999 reflects declines in unrealized capital gains on fixed income
securities.
At December 31, contractholder funds consists of the following:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
Interest-sensitive life $ 5,036 $ 4,395
Fixed annuities:
Immediate annuities 1,748 1,641
Deferred annuities 12,695 10,874
Guaranteed investment contracts 2,953 3,233
Other investment contracts 1,563 990
------- -------
Total contractholder funds $23,995 $21,133
======= =======
</TABLE>
Contractholder funds are equal to deposits received, net of commissions, and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Interest rates credited range
from 4.0% to 8.5% for interest-sensitive life contracts; 3.5% to 10.0% for
immediate annuities; 1.6% to 26.2% for deferred annuities (which include
equity-indexed annuities that are hedged, see Note 2 and Note 5); 4.9% to
9.9% for guaranteed investment contracts and 5.3% to 6.6% for other
investment contracts. Withdrawal and surrender charge protection includes i)
for interest-sensitive life, either a percentage of account balance or
dollar amount grading off generally over 20 years; and, ii) for deferred
annuities not subject to a market value adjustment, either a declining or a
level percentage charge generally over nine years or less. Approximately 10%
of deferred annuities are subject to a market value adjustment.
PROPERTY-LIABILITY CONTRACTS
For the Property-Liability segment, the Company establishes reserves for
claims and claims expense on reported and unreported claims of insured
losses. These reserve estimates are based on known facts and interpretation
of circumstances, including the Company's experience with similar cases and
historical trends involving claim payment patterns, loss payments, pending
levels of unpaid claims and product mix, as well as other factors including
court decisions, economic conditions and public attitudes. The effects of
inflation are implicitly considered in the reserving process.
The establishment of appropriate reserves, including reserves for
catastrophes, is an inherently uncertain process. The Company regularly
updates its reserve estimates as new facts become known and further events
occur which may impact the resolution of unsettled claims. Changes in prior
year reserve estimates, which may be material, are reflected in the results
of operations in the period such changes are determinable.
22
<PAGE>
Activity in the reserve for property-liability insurance claims and claims
expense is summarized as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Balance at January 1 $313 $348 $387
Less reinsurance recoverables 20 16 15
---- ---- ----
Net balance at January 1 293 332 372
Incurred claims and claims expense related to:
Current year 247 233 227
Prior years (25) (38) (48)
---- ---- ----
Total incurred 222 195 179
Claims and claims expense paid related to:
Current year 144 148 129
Prior years 73 64 73
---- ---- ----
Total paid 217 212 202
Foreign currency translation adjustment 17 (22) (17)
---- ---- ----
Net balance at December 31 315 293 332
Plus reinsurance recoverables 53 20 16
---- ---- ----
Balance at December 31 $368 $313 $348
==== ==== ====
</TABLE>
Incurred claims and claims expense represents the sum of paid losses and
reserve changes in the calendar year. This expense includes losses from
catastrophes of $6 million, $31 million and $6 million in 1999, 1998 and
1997, respectively. A "catastrophe" is defined by the Company as an event
that produces pretax losses before reinsurance in excess of $1 million, and
involves multiple first party policyholders. Catastrophes are an inherent
risk of the property-liability insurance business and could contribute to
material year-to-year fluctuations in the Company's results of operations
and financial position.
The level of catastrophe loss experienced in any year cannot be predicted
and could be material to results of operations and financial position.
Catastrophe exposures for AICC primarily comprise wind, hail, earthquakes,
and ice. The major areas in Canada with exposure to potential earthquake
losses include areas surrounding faults in British Columbia and Quebec. The
Company continues to evaluate alternative business strategies to more
effectively manage its exposure to catastrophe losses in these and other
areas.
Management believes that the reserve for claims and claims expense, net of
reinsurance recoverables, at December 31, 1999 and 1998 is appropriately
established in the aggregate and adequate to cover the ultimate net cost of
reported and unreported claims arising from losses which had occurred by
that date.
The Property-Liability segment has exposure to environmental, asbestos and
other mass tort claims that stem principally from commercial business
written from 1972 through 1985, including substantial general liabilities on
Canadian Fortune 500 equivalent companies. Reserves for environmental claims
were $4 million, net of reinsurance recoverables of $2 million, and $3
million at December 31, 1999 and 1998, respectively. Reserves for asbestos
claims were $2 million and $2 million at December 31, 1999 and 1998,
respectively.
Management believes its net loss reserves for environmental, asbestos and
other mass tort claims are appropriately established based on available
facts, technology, laws and regulations. However, due to the risks inherent
in major litigation and other uncertainties, the ultimate cost of these
claims may vary materially from the amounts currently recorded, resulting in
an increase in the loss reserves. In addition, while the Company believes
improved actuarial techniques and databases have assisted in its ability to
estimate environmental, asbestos and other mass tort net loss reserves,
these refinements may subsequently prove to be inadequate indicators of the
extent of probable loss. Due to the uncertainties and factors described
above, management believes it is not practicable to develop a meaningful
range for any such additional net loss reserves that may be required.
8. REINSURANCE
The Company purchases reinsurance to limit aggregate and single losses on
large risks. The Company continues to have primary liability as a direct
insurer for risks reinsured. Estimating amounts of reinsurance recoverable
is impacted by the
23
<PAGE>
uncertainties involved in the establishment of loss reserves. Failure of
reinsurers to honor their obligations could result in losses to the
Company.
The Company's Life and Savings' segment assumes risk from, and reinsures
certain of its risks to other reinsurers under yearly renewable term,
coinsurance, and modified coinsurance agreements. Yearly renewable term and
coinsurance agreements result in the passing of a portion of the risk to the
reinsurer. Generally, the reinsurer receives a proportionate amount of the
premiums less commissions and is liable for a corresponding proportionate
amount of all benefit payments. Modified coinsurance is similar to
coinsurance except that the cash and investments that support the liability
for contract benefits are not transferred to the assuming company, and
settlements are made on a net basis between the companies.
The Company cedes 90% of the mortality risk on certain term life policies to
a pool of ten reinsurers. Beginning in November, 1998, the Company cedes
mortality risk on new business in excess of $2 million per life for
individual coverage. For business sold prior to October, 1998, the Company
ceded mortality risk in excess of $1 million per life for individual life.
As of December 31, 1999 $102.15 billion of life insurance in force was ceded
to other companies.
During 1998, the Company entered into an administrative services agreement
with respect to a block of variable annuity contracts. Pursuant to the terms
of the agreement, the Company is to provide insurance contract
administration and financial services. As part of the agreement, the Company
assumed via coinsurance 100% of the general account portion of these
contracts (85% for business written in New York) with an aggregate account
value of $32 million as of December 31, 1999. The Company paid $65 million,
which was capitalized as present value of future profits and will be
subsequently amortized into income over 20 years, for the right to receive
future contract charges and fees on the block of variable annuity contracts,
which has an aggregate account value of $1.77 billion as of December 31,
1999. During 1999, the Company earned contract charges and fees assessed to
contractholders' fund balances of $15 million.
The Company's Property-Liability segment cedes certain of its risks to AIC
under excess of loss reinsurance agreements. These agreements provide that
for certain premiums, the Company will be reimbursed by AIC for losses in
excess of predetermined amounts. See Note 4 "Related Parties" for more
information on these agreements. The Property-Liability segment also ceded
certain commercial business risks under excess of loss agreements to third
party reinsurers. Although the Company stopped writing commercial business
in 1992, related claims continue to be submitted and settlements are
pending.
The Company has entered into reinsurance agreements in conjunction with the
disposition of certain blocks of business.
Amounts recoverable from reinsurers are estimated based upon assumptions
consistent with those used in establishing the liabilities related to the
underlying reinsured contracts. Management believes the recoverables are
appropriately established. No single reinsurer has a material obligation to
the Company nor is the Company's business substantially dependent upon any
reinsurance contract.
24
<PAGE>
The effects of reinsurance on premiums written and earned for the years
ended December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
LIFE AND ANNUITY PREMIUMS
Direct $1,042 $1,043 $1,032
Assumed 37 24 117
Ceded (241) (178) (194)
------ ------ ------
Life insurance premiums, net of reinsurance $ 838 $ 889 $ 955
====== ====== ======
LIFE AND ANNUITY CONTRACT CHARGES
Direct $ 706 $ 625 $ 547
Assumed 17 5 -
Ceded - - -
------ ------ ------
Life insurance contract charges, net of reinsurance $ 723 $ 630 $ 547
====== ====== ======
PROPERTY-LIABILITY PREMIUMS WRITTEN
Direct $ 317 $ 280 $ 276
Assumed 1 1 -
Ceded (3) (1) (3)
------ ------ ------
Property-Liability premiums written, net of reinsurance $ 315 $ 280 $ 273
====== ====== ======
PROPERTY-LIABILITY PREMIUMS EARNED
Direct $ 291 $ 268 $ 278
Assumed 1 1 -
Ceded (3) (1) (3)
------ ------ ------
Property-Liability premiums earned, net of reinsurance $ 289 $ 268 $ 275
====== ====== ======
</TABLE>
Reinsurance recoverables in the Company's consolidated statements of
financial position, at December 31, were as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Life and Savings $434 $230
Property-Liability 61 24
---- ----
Total $495 $254
==== ====
</TABLE>
9. CORPORATION RESTRUCTURING
On November 10, 1999 the Corporation announced a series of strategic
initiatives to aggressively expand its selling and service capabilities.
The Corporation also announced that it is implementing a program to reduce
expenses by approximately $600 million. The reduction will result in the
elimination of approximately 4,000 current non-agent positions, across all
employment grades and categories by the end of 2000, or approximately 10%
of the Corporation's non-agent work force. The impact of the reduction in
employee positions is not expected to materially impact the results of
operations of the Company.
These cost reductions are part of a larger initiative to redeploy the cost
savings to finance new initiatives including investments in direct access
and internet channels for new sales and service capabilities, new
competitive pricing and underwriting techniques, new agent and claim
technology and enhanced marketing and advertising. As a result of the cost
reduction program, the Corporation recorded restructuring and related
charges of $81 million pretax during the fourth quarter of 1999. The
Corporation anticipates that additional pretax restructuring related charges
of approximately $100 million will be expensed as incurred throughout 2000.
The Company's allocable share of these expenses were immaterial in 1999 and
are expected to be immaterial in 2000.
25
<PAGE>
10. COMMITMENTS AND CONTINGENT LIABILITIES
LEASES
The Company leases certain office facilities and computer equipment. Total
rent expense for all leases was $16 million, $18 million and $13 million in
1999, 1998 and 1997, respectively.
Minimum rental commitments under noncancelable operating leases with an
initial or remaining term of more than one year as of December 31, are as
follows:
($ in millions)
<TABLE>
<CAPTION>
1999
----
<S> <C>
2000 $ 5
2001 4
2002 3
2003 2
2004 1
---
$15
===
</TABLE>
SHARED MARKETS
As a condition of its license to do business in various Canadian provinces,
AICC is required to participate in mandatory property-liability shared
market mechanisms or pooling arrangements, which provide various insurance
coverages to individuals or other entities that otherwise are unable to
purchase such coverage voluntarily from private insurers. Underwriting
results related to these organizations have been immaterial to the results
of operations.
GUARANTY FUNDS
Under state insurance guaranty fund laws, insurers doing business in a state
can be assessed, up to prescribed limits, for certain obligations of
insolvent insurance companies to policyholders and claimants. The Company's
expenses related to these funds have been immaterial.
REGULATION AND LEGAL PROCEEDINGS
The Company's business is subject to the effects of a changing social,
economic and regulatory environment. Public and regulatory initiatives have
varied and have included employee benefit regulation, controls on medical
care costs, removal of barriers preventing banks from engaging in the
securities and insurance business, tax law changes affecting the taxation of
insurance companies, the tax treatment of insurance products and its impact
on the relative desirability of various personal investment vehicles, and
proposed legislation to prohibit the use of gender in determining insurance
rates and benefits. The ultimate changes and eventual effects, if any, of
these initiatives are uncertain.
From time to time the Company is involved in pending and threatened
litigation in the normal course of business in which claims for monetary
damages are asserted. In the opinion of management, the ultimate
responsibility, if any, arising from such pending or threatened litigation
is not expected to have a material effect on the results of operations,
liquidity or financial position of the Company.
MARKETING AND COMPLIANCE ISSUES
Companies operating in the insurance and financial services markets have
come under the scrutiny of regulators with respect to market conduct and
compliance issues. Under certain circumstances, companies have been held
responsible for providing incomplete or misleading sales materials and for
replacing existing policies with policies that were less advantageous to the
policyholder. The Company monitors its sales materials and enforces
compliance procedures to mitigate any exposure to potential litigation. The
Company's life insurance subsidiaries are members of the Insurance
Marketplace Standards Association, an organization which advocates ethical
market conduct.
11. INCOME TAXES
Eligible domestic subsidiaries of the Company (the "Allstate Life Group")
join with the Corporation (the "Allstate Group") in the filing of a
consolidated federal income tax return and are party to a federal income
tax allocation agreement (the "Allstate Tax Sharing Agreement"). Under the
Allstate Tax Sharing Agreement, the Allstate Life Group pays to or receives
from the Corporation the amount, if any, by which the Allstate Group's
federal income tax liability is affected by virtue of inclusion of the
Allstate Life Group in the consolidated federal income tax return.
Effectively, this
26
<PAGE>
results in the Allstate Life Group's annual income tax provision being
computed, with adjustments, as if the Allstate Life Group filed a separate
return. Foreign subsidiaries of the Company file a tax return in their
respective country.
Prior to June 30, 1995, the Corporation was a subsidiary of Sears Roebuck &
Co. ("Sears") and, with its eligible domestic subsidiaries, was included in
the Sears consolidated federal income tax return and federal income tax
allocation agreement. Effective June 30, 1995, the Corporation and Sears
entered into a new tax sharing agreement, which governs their respective
rights and obligations with respect to federal income taxes for all periods
during which the Corporation was a subsidiary of Sears, including the
treatment of audits of tax returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the
Corporation's federal income tax returns through the 1993 tax year. Any
adjustments that may result from IRS examinations of tax returns are not
expected to have a material impact on the financial position, liquidity or
results of operations of the Company.
The components of the deferred income tax assets and liabilities at
December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
----- -------
<S> <C> <C>
DEFERRED ASSETS
Life and annuity reserves $ 606 $ 589
Other assets 86 115
----- -------
Total deferred assets 692 704
DEFERRED LIABILITIES
Deferred policy acquisition costs (722) (665)
Unrealized net capital gains (119) (463)
Other liabilities (22) (28)
----- -------
Total deferred liabilities (863) (1,156)
----- -------
Net deferred liability $(171) $ (452)
===== =======
</TABLE>
The components of income tax expense for the year ended December 31, are as
follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Current $213 $282 $272
Deferred 57 28 12
---- ---- ----
Total income tax expense $270 $310 $284
==== ==== ====
</TABLE>
The Company paid income taxes of $198 million, $284 million, and $180
million in 1999, 1998 and 1997, respectively. The Company had a current
income tax liability of $36 million and $24 million at December 31, 1999 and
1998, respectively.
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is
as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
----- ----- -----
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
Dividends received deduction (1.3) (1.0) (.4)
Other .9 1.8 .9
----- ----- -----
Effective income tax rate 34.6% 35.8% 35.5%
===== ===== =====
</TABLE>
Prior to January l, 1984, the Company was entitled to exclude certain
amounts from taxable income and accumulate such amounts in a "policyholder
surplus" account. The balance in this account at December 31, 1999,
approximately $94 million, will result in federal income taxes payable of
$33 million if distributed by the Company. No provision for taxes has been
made as the Company has no plan to distribute amounts from this account. No
further additions to the account have been permitted since the Tax Reform
Act of 1984.
27
<PAGE>
12. PREFERRED STOCK
The Company has issued two series of non-voting, redeemable preferred
stock. Series A preferred stock was issued to a subsidiary of AIC, while
Series B preferred stock was issued directly to AIC. Both series of
preferred stock are redeemable at the option of the Company at any time
five years after the issuance date at a price of $100 per share plus
cumulative accrued and unpaid dividends. If the Company is liquidated or
dissolved, holders of the preferred stock will be entitled to payments of
$100 per share plus cumulative accrued and unpaid dividends.
For Series A preferred stock, the Company's Board of Directors declare and
pay a cash dividend from time to time, but not more frequently than
quarterly. The dividend is based on the three month LIBOR rate. Dividends of
$4 million, $3 million and $2 million were paid during 1999, 1998, and 1997,
respectively. Accrued and unpaid dividends were $349 thousand on Series A
preferred stock at December 31, 1999.
For Series B preferred stock, cash dividends of 6.9% per annum are payable
annually in arrears on the last business day of each year to the shareholder
of record on the immediately preceding business day. Dividends of
$8 million were paid in 1999, 1998 and 1997. There were no accrued and
unpaid dividends for Series B preferred stock at December 31, 1999.
13. STATUTORY FINANCIAL INFORMATION
The following table reconciles consolidated net income for the year ended
December 31, and shareholder's equity at December 31, as reported herein in
conformity with generally accepted accounting principles with combined
statutory net income and capital and surplus of ALIC and its domestic
subsidiaries, determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities:
($ in millions)
<TABLE>
<CAPTION>
SHAREHOLDER'S
NET INCOME EQUITY
--------------------- ---------------
1999 1998 1997 1999 1998
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Balance per generally accepted accounting principles $ 511 $ 556 $ 517 $4,574 $4,792
Undistributed net income of certain subsidiaries (5) (8) (11) (196) (179)
Unrealized gain/loss on fixed income securities - - - (284) (2,336)
Deferred policy acquisition costs (262) (254) (218) (2,675) (2,181)
Deferred income taxes 104 35 51 192 469
Employee benefits 1 (6) (6) (11) (4)
Reserves and non-admitted assets (72) 60 70 1,441 1,972
Other 27 3 (33) (471) (108)
----- ----- ----- ------ ------
Balance per statutory accounting practices $ 304 $ 386 $ 370 $2,570 $2,425
===== ===== ===== ====== ======
</TABLE>
AICC is a foreign subsidiary of the Company; accordingly, its net income is
not included in the statutory basis net income of the Company. However, the
Company's investment in AICC is reflected in the statutory capital and
surplus of the Company.
PERMITTED STATUTORY ACCOUNTING PRACTICES
ALIC and each of its domestic subsidiaries prepare their statutory financial
statements in accordance with accounting practices prescribed or permitted
by the insurance department of the applicable state of domicile. Prescribed
statutory accounting practices include a variety of publications of the
National Association of Insurance Commissioners ("NAIC"), as well as state
laws, regulations and general administrative rules. Permitted statutory
accounting practices encompass all accounting practices not so prescribed.
Certain domestic subsidiaries of the Company follow permitted statutory
accounting practices which differ from those prescribed by regulatory
authorities. The use of such permitted statutory accounting practices does
not have a significant impact on statutory surplus or statutory net income.
The NAIC's codification initiative has produced a comprehensive guide of
revised statutory accounting principles, which the Company will implement in
January 1, 2001. The requirements are not expected to have a material impact
on the statutory surplus of ALIC and its domestic subsidiaries.
28
<PAGE>
DIVIDENDS
The ability of ALIC to pay dividends is dependent on business conditions,
income, cash requirements of ALIC, receipt of dividends from its
subsidiaries and other relevant factors. The payment of shareholder
dividends by ALIC to AIC without the prior approval of the state insurance
regulator is limited to formula amounts based on net income and capital and
surplus, determined in accordance with statutory accounting practices, as
well as the timing and amount of dividends paid in the preceding twelve
months.
In the twelve month period beginning January 1, 1999, ALIC paid dividends of
$100 million. Based on 1999 ALIC statutory net income, the maximum amount of
dividends ALIC will be able to pay under Illinois insurance law without the
approval of Illinois Department of Insurance during 2000 is $267 million.
RISK-BASED CAPITAL
The NAIC has a standard for assessing the solvency of domestic insurance
companies, which is referred to as risk-based capital ("RBC"). The
requirement consists of a formula for determining each insurer's RBC and a
model law specifying regulatory actions if an insurer's RBC falls below
specified levels. The RBC formula for life insurance companies establishes
capital requirements relating to insurance, business, asset and interest
rate risks. At December, 31 1999, RBC for each of the Company's domestic
insurance subsidiaries was significantly above levels that would require
regulatory action.
14. BENEFIT PLANS
PENSION AND OTHER POSTRETIREMENT PLANS
Defined benefit pension plans, sponsored by AIC, cover domestic full-time
employees and certain part-time employees. Benefits under the pension plans
are based upon the employee's length of service, average annual compensation
and estimated social security retirement benefits. AIC's funding policy for
the pension plans is to make annual contributions in accordance with
accepted actuarial cost methods. The cost (benefit) to the Company included
in net income was $(1) million, $9 million, and $8 million for the pension
plans in 1999, 1998, 1997, respectively.
AIC also provides certain health care and life insurance benefits for
retired employees. Qualified employees may become eligible for these
benefits if they retire in accordance with AIC's established retirement
policy and are continuously insured under AIC's group plans or other
approved plans for ten or more years prior to retirement. AIC shares the
cost of the retiree medical benefits with retirees based on years of
service, with AIC's share being subject to a 5% limit on annual medical cost
inflation after retirement. AIC's postretirement benefit plans currently are
not funded. AIC has the right to modify or terminate these plans. The cost
to the Company included in net income was $1 million, $3 million and $3
million for postretirement benefits other than pension plans in 1999, 1998,
and 1997 respectively.
AICC has its own defined benefit pension plans which cover its full-time
employees and certain part-time employees. Benefits under the pension plans
are based upon the employee's length of service, average annual compensation
and estimated social security retirement benefits. AICC's funding policy for
the pension plans is to make annual contributions in accordance with
accepted actuarial cost methods. The net periodic benefit cost (benefit) for
AICC pension plans was $1 million, $(1) million and $(1) million for the
years ended December 31, 1999, 1998, and 1997, respectively. The projected
benefit obligation for the AICC pension plans was $108 million and $107
million at December 31, 1999 and 1998, respectively. The fair value of
pension plan assets supporting the projected benefit obligation was $130
million and $123 million at December 31, 1999 and 1998, respectively.
AICC also provides certain health care and life insurance benefits for
retired employees. Qualified employees may become eligible for these
benefits if they retire in accordance with AICC's established retirement
policy and are continuously insured under AICC's group plans or other
approved plans for ten or more years prior to retirement. AICC pays the cost
of the retiree medical benefits not provided by the government plans. AICC's
postretirement benefit plans are currently not funded. AICC has the right to
modify or terminate these plans. The net periodic benefit cost for AICC's
postretirement plans was $2 million for the years ended December 31, 1999,
1998, and 1997, respectively. The projected benefit obligation for the AICC
postretirement plans was $16 million and $17 million at December 31, 1999
and 1998, respectively.
PROFIT SHARING FUND
Employees of the Corporation and its domestic subsidiaries, including the
Company are also eligible to become members of The Savings and Profit
Sharing Fund of Allstate Employees ("Allstate Plan"). The Corporation's
contributions are based on the Corporation's matching obligation and
performance.
29
<PAGE>
The Company paid $4 million, $12 million and $3 million in 1999, 1998 and
1997, respectively for profit sharing.
Employees of AICC participate in the Allstate Canada Employees' Profit
Sharing Program ("Allstate Canada Plan"). The Allstate Canada Plan is a cash
plan based on AICC's performance as well as the employees' level of
performance and length of service.
Profit sharing expense under the Allstate Canada Plan was $1 million,
$2 million, and $3 million in 1999, 1998, and 1997, respectively.
15. BUSINESS SEGMENTS
The Company's management is organized around products and services, and
this structure was considered in identifying its two reportable segments.
These segments and their respective operations are as follows:
Life and Savings markets a broad line of life and savings products primarily
in the United States. Life insurance products primarily include traditional
life, including term and whole-life, and interest-sensitive life insurance.
Savings products consist of fixed annuity products, including indexed,
market value adjusted and immediate annuities, as well as variable
annuities. Revenues generated outside the United States were immaterial with
respect to Life and Savings' total revenue for the years ended December 31,
1999, 1998 and 1997, respectively. The Company evaluates the results of this
segment based upon invested asset growth, face amounts of policies in force
and net income.
Property-Liability sells primarily private passenger auto and homeowners
insurance to individuals in Canada. The Company evaluates the results of
this segment based upon premium growth and underwriting results.
Management reviews assets at the Life and Savings and Property-Liability
levels for decision making purposes.
The accounting policies of the business segments are the same as those
described in Note 2. The effects of certain intersegment transactions are
excluded from segment performance evaluation and therefore eliminated in the
segment results.
Summarized revenue data for each of the Company's business segments for the
year ended December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
------ -------- ------
<S> <C> <C> <C>
REVENUES
LIFE AND SAVINGS
Premiums $ 838 $ 889 $ 955
Contract charges 723 630 547
Net investment income 2,239 2,113 2,074
Realized capital gains and losses 192 323 194
------ -------- ------
Total Life and Savings 3,992 3,955 3,770
PROPERTY-LIABILITY
Premiums earned 289 268 275
Net investment income 26 26 44
Realized capital gains and losses 3 9 (2)
------ -------- ------
Total Property-Liability 318 303 317
------ -------- ------
Consolidated $4,310 $ 4,258 $4,087
====== ======== ======
</TABLE>
30
<PAGE>
Summarized financial performance data for each of the Company's reportable
segments for the year ended December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
NET INCOME FROM OPERATIONS
LIFE AND SAVINGS
Premiums $ 838 $ 889 $ 955
Contract charges 723 630 547
Net investment income 2,239 2,113 2,074
Realized capital gains and losses 192 323 194
Contract benefits 1,251 1,225 1,239
Interest credited 1,260 1,190 1,167
Operating costs and expenses 712 702 619
------ ------ ------
Life and Savings income from operations before income
taxes 769 838 745
PROPERTY-LIABILITY
Underwriting income (loss) (17) (7) 14
Net investment income 26 26 44
Realized capital gains and losses 3 9 (2)
------ ------ ------
Property-Liability income from operations before income
taxes 12 28 56
------ ------ ------
Consolidated $ 781 $ 866 $ 801
====== ====== ======
</TABLE>
Additional significant financial performance data for each of the Company's
reportable segments for the year ended December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS
Life and Savings $367 $377 $298
Property-Liability 42 35 35
---- ---- ----
Consolidated $409 $412 $333
==== ==== ====
INCOME TAX EXPENSE
Life and Savings $265 $298 $257
Property-Liability 5 12 27
---- ---- ----
Consolidated $270 $310 $284
==== ==== ====
</TABLE>
Capital expenditures for long-lived assets are generally made by AIC. A
portion of the long-lived assets are leased by entities included in the Life
and Savings and Property-Liability segments.
31
<PAGE>
Summarized data for total assets and investments for each of the Company's
reportable segments as of December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998
------- -------
<S> <C> <C>
AT DECEMBER 31,
ASSETS
Life and Savings $50,463 $44,926
Property-Liability 710 614
------- -------
Consolidated $51,173 $45,540
======= =======
INVESTMENTS
Life and Savings $32,879 $31,749
Property-Liability 530 479
------- -------
Consolidated $33,409 $32,228
======= =======
</TABLE>
16. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax
basis for the year ended December 31, are as follows:
($ in millions)
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------- ------------------------------- -------------------------------
PRETAX TAX AFTER-TAX PRETAX TAX AFTER-TAX PRETAX TAX AFTER-TAX
-------- -------- --------- -------- -------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNREALIZED CAPITAL
GAINS AND LOSSES:
Unrealized holding
gains (losses) arising
during the period $(808) $283 $(525) $349 $(122) $227 $513 $(180) $333
Less: reclassification
adjustments 183 (64) 119 237 (83) 154 128 (45) 83
----- ---- ----- ---- ----- ---- ---- ----- ----
Unrealized net capital
gains (losses) (991) 347 (644) 112 (39) 73 385 (135) 250
UNREALIZED FOREIGN
CURRENCY TRANSLATION
ADJUSTMENTS:
Unrealized foreign
currency translation
adjustments arising
during the period 11 (4) 7 2 (1) 1 (12) 4 (8)
----- ---- ----- ---- ----- ---- ---- ----- ----
Other comprehensive
income $(980) $343 $(637) $114 $ (40) $ 74 $373 $(131) $242
===== ==== ===== ==== ===== ==== ==== ===== ====
</TABLE>
32
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
FAIR CARRYING
TYPE OF INVESTMENT COST VALUE VALUE
- ------------------ ------- ------- --------
<S> <C> <C> <C>
Fixed Income Securities, Available for Sale:
Bonds:
United States government, government agencies and
authorities $ 1,957 $ 2,173 $ 2,173
States, municipalities and political subdivisions 736 731 731
Foreign governments 536 542 542
Public utilities 1,704 1,750 1,750
Convertibles and bonds with warrants attached 458 519 519
All other corporate bonds 13,897 13,786 13,786
Mortgage-backed securities 5,612 5,588 5,588
Asset-backed securities 2,389 2,371 2,371
Redeemable preferred stocks 65 63 63
------- ------- -------
Total fixed income securities 27,354 $27,523 27,523
------- ======= -------
Equity Securities:
Common Stocks:
Public utilities 7 $ 6 6
Banks, trusts and insurance companies 22 31 31
Industrial, miscellaneous and all other 412 654 654
Nonredeemable preferred stocks 62 52 52
------- ------- -------
Total equity securities 503 $ 743 743
------- ======= -------
Mortgage loans on real estate 3,801 3,801
Policy loans 606 606
Other long-term investments 25 25
Short-term investments 711 711
------- -------
Total investments $33,000 $33,409
======= =======
</TABLE>
33
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
- --------------------------------------------------------------------------------
($ IN MILLIONS)
<TABLE>
<CAPTION>
AT DECEMBER 31,
---------------------------------------------
DEFERRED
POLICY RESERVES FOR CLAIMS,
ACQUISITION CLAIMS EXPENSE AND UNEARNED
SEGMENT COSTS CONTRACT BENEFITS PREMIUMS
- ------- ----------- -------------------- --------
<S> <C> <C> <C>
1999
Life and savings operations $2,675 $31,143 $ 18
Property-liability operations 20 368 137
------ ------- ----
Total $2,695 $31,511 $155
====== ======= ====
1998
Life and savings operations $2,181 $28,734 $ 47
Property-liability operations 14 313 105
------ ------- ----
Total $2,195 $29,047 $152
====== ======= ====
1997
Life and savings operations $1,982 $27,482 $ 64
Property-liability operations 10 349 100
------ ------- ----
Total $1,992 $27,831 $164
====== ======= ====
</TABLE>
34
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
- --------------------------------------------------------------------------------
($ IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------------------
CLAIMS,
PREMIUM CLAIMS
REVENUE EXPENSE AMORTIZATION OTHER
AND NET AND OF POLICY OPERATING PREMIUMS
CONTRACT INVESTMENT CONTRACT ACQUISITION COSTS AND WRITTEN
SEGMENT CHARGES INCOME BENEFITS COSTS EXPENSES (EXCLUDING LIFE)
- ------- -------- ---------- ----------- ------------ --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
1999
Life and savings operations $1,561 $2,239 $2,511 $367 $345 $ -
Property-liability operations 289 26 222 42 42 315
------ ------ ------ ---- ---- ----
Total $1,850 $2,265 $2,733 $409 $387 $315
====== ====== ====== ==== ==== ====
1998
Life and savings operations $1,519 $2,113 $2,415 $377 $325 $ -
Property-liability operations 268 26 195 35 45 280
------ ------ ------ ---- ---- ----
Total $1,787 $2,139 $2,610 $412 $370 $280
====== ====== ====== ==== ==== ====
1997
Life and savings operations $1,502 $2,074 $2,406 $298 $321 $ -
Property-liability operations 275 44 179 35 47 273
------ ------ ------ ---- ---- ----
Total $1,777 $2,118 $2,585 $333 $368 $273
====== ====== ====== ==== ==== ====
</TABLE>
35
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
- --------------------------------------------------------------------------------
($ in millions)
<TABLE>
<CAPTION>
PERCENT
OF
CEDED ASSUMED AMOUNT
GROSS TO OTHER FROM OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
-------- --------- ----------- -------- -------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Life insurance in force $307,225 $102,153 $ 1 $205,073 0.0%
======== ======== ==== ========
Premiums and contract charges:
Life insurance $ 1,511 $ 221 $ 18 $ 1,308 1.4%
Accident-health insurance 237 20 36 253 14.2%
Property-liability insurance 291 3 1 289 0.3%
-------- -------- ---- --------
Total premiums and contract charges $ 2,039 $ 244 $ 55 $ 1,850 3.0%
======== ======== ==== ========
YEAR ENDED DECEMBER 31, 1998
Life insurance in force $276,029 $ 73,769 $ 7 $202,267 0.0%
======== ======== ==== ========
Premiums and contract charges:
Life insurance $ 1,433 $ 176 $ 5 $ 1,262 0.4%
Accident-health insurance 235 2 24 257 9.3%
Property-liability insurance 268 1 1 268 0.4%
-------- -------- ---- --------
Total premiums and contract charges. $ 1,936 $ 179 $ 30 $ 1,787 1.7%
======== ======== ==== ========
YEAR ENDED DECEMBER 31, 1997
Life insurance in force $247,048 $ 52,760 $144 $194,432 0.1%
======== ======== ==== ========
Premiums and contract charges:
Life insurance $ 1,427 $ 193 $ -- $ 1,234 --%
Accident-health insurance 152 1 117 268 43.7%
Property-liability insurance 278 3 -- 275 0.0%
-------- -------- ---- --------
Total premiums and contract charges $ 1,857 $ 197 $117 $ 1,777 6.6%
======== ======== ==== ========
</TABLE>
36
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE V - VALUATION ALLOWANCE AND QUALIFYING ACCOUNTS
- --------------------------------------------------------------------------------
($ IN MILLIONS)
<TABLE>
<CAPTION>
ADDITIONS
-------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
DESCRIPTION OF PERIOD EXPENSES ADDITIONS DEDUCTIONS (1) OF PERIOD
----------- ---------- ----------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Allowance for estimated losses on mortgage
loans and real estate $15 $ 2 $ 4 $13
Allowance for deferred tax assets -- 1 -- 1
YEAR ENDED DECEMBER 31, 1998
Allowance for estimated losses on mortgage
loans and real estate $37 $ (16) $ 6 $15
YEAR ENDED DECEMBER 31, 1997
Allowance for estimated losses on mortgage
loans and real estate $72 $ (22) $13 $37
</TABLE>
(1) Deductions in allowance for estimated losses on mortgage loans include
amounts transferred to real estate. Deductions in allowance for reinsurance
recovered represent write-offs, net of recoveries, of amounts determined to
be uncollectible.
37
<PAGE>
ALLSTATE LIFE INSURANCE
COMPANY SEPARATE
ACCOUNT A
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999 AND FOR THE
PERIOD FROM MAY 3, 1999 TO DECEMBER 31, 1999 AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Allstate Life Insurance Company:
We have audited the accompanying statement of net assets of Allstate Life
Insurance Company Separate Account A as of December 31, 1999, (including the
assets of each of the individual sub-accounts which comprise the Account as
disclosed in Note 1), and the related statements of operations and changes in
net assets for the period from May 3, 1999 (date of inception) to December 31,
1999 for each of the individual sub-accounts which comprise the Account.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit 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.
Our procedures included confirmation of securities owned at December 31, 1999
by correspondence with the account custodians. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Allstate Life Insurance Company Separate
Account A as of December 31, 1999 (including the assets of each of the
individual sub-accounts which comprise the Account), and the results of
operations for each of the individual sub-accounts and the changes in their
net assets for the period from May 3, 1999 (date of inception) to December 31,
1999 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 27, 2000
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Allocation to Sub-Accounts investing in the Putnam Variable Trust:
Asia Pacific Growth, 278,466 shares (cost $3,789,956) $ 4,803,532
Diversified Income, 1,514,137 shares (cost $14,764,040) 15,005,098
The George Putnam Fund of Boston, 2,907,045 shares (cost $30,051,532) 29,012,305
Global Asset Allocation, 142,637 shares (cost $2,627,570) 2,795,686
Global Growth, 559,039 shares (cost $12,776,277) 17,000,389
Growth & Income, 4,691,832 shares (cost $128,157,309) 125,506,496
Health Sciences, 1,349,491 shares (cost $13,570,021) 14,156,162
High Yield, 818,296 shares (cost $8,868,651) 9,066,725
Income, 982,477 shares (cost $12,309,230) 12,290,785
International Growth, 1,234,900 shares (cost $21,528,251) 26,698,544
International Growth and Income, 470,967 shares (cost $6,838,545) 7,168,122
International New Opportunities, 409,062 shares (cost $7,108,499) 9,522,959
Investors, 5,495,714 shares (cost $71,619,605) 83,150,151
Money Market, 16,872,573 shares (cost $16,872,573) 16,872,573
New Opportunities, 1,114,500 shares (cost $36,579,176) 48,413,875
New Value, 566,900 shares (cost $6,938,279) 6,717,771
OTC & Emerging Growth, 765,986 shares (cost $12,690,975) 17,433,843
Research, 1,540,836 shares (cost $20,578,934) 22,604,065
Small Cap Value, 594,274 shares (cost $5,970,846) 6,121,017
Utilities Growth and Income, 435,290 shares (cost $7,511,540) 7,378,168
Vista, 701,266 shares (cost $12,342,960) 14,481,152
Voyager, 1,683,119 shares (cost $86,527,295) 111,271,035
----------------
Total Assets 607,470,454
LIABILITIES
Payable to Allstate Life Insurance Company
Accrued contract maintenance charges 68,839
----------------
Net Assets $ 607,401,615
================
</TABLE>
See notes to financial statements
2
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
--------------------------------------------------------------------------------------------
The George
Asia Putnam Fund Global
Pacific Diversified of Asset Global
Growth Income Boston Allocation Growth
----------------- ----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ - $ 603,870 $ 289 $ -
Charges from Allstate Life
Insurance Company:
Mortality and expense risk (8,332) (42,429) (88,415) (7,001) (39,047)
----------------- ----------------- ----------------- ----------------- -----------------
Net investment income (loss) (8,332) (42,429) 515,455 (6,712) (39,047)
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales
of investments:
Proceeds from sales 19,811 36,175 156,014 7,214 109,185
Cost of investments sold 18,686 35,881 156,846 7,217 101,580
----------------- ----------------- ----------------- ----------------- -----------------
Net realized gains (losses) 1,125 294 (832) (3) 7,605
----------------- ----------------- ----------------- ----------------- -----------------
Change in unrealized gains (losses) 1,013,576 241,058 (1,039,227) 168,116 4,224,112
----------------- ----------------- ----------------- ----------------- -----------------
Net gains (losses) on
investments 1,014,701 241,352 (1,040,059) 168,113 4,231,717
----------------- ----------------- ----------------- ----------------- -----------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $1,006,369 $ 198,923 $ (524,604) $ 161,401 $4,192,670
================= ================= ================= ================= =================
</TABLE>
See notes to financial statements.
3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
---------------------------------------------------------------------------------------------
Growth & Health High International
Income Sciences Yield Income Growth
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ 4,849 $ - $ - $ -
Charges from Allstate Life
Insurance Company:
Mortality and expense risk (398,152) (38,903) (25,156) (35,910) (60,294)
------------------ ------------------ ------------------ ------------------ ------------------
Net investment income (loss) (398,152) (34,054) (25,156) (35,910) (60,294)
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales
of investments:
Proceeds from sales 78,513 120,049 736,350 181,921 193,345
Cost of investments sold 126,369 122,899 727,602 182,722 182,340
------------------ ------------------ ------------------ ------------------ ------------------
Net realized gains (losses) (47,856) (2,850) 8,748 (801) 11,005
------------------ ------------------ ------------------ ------------------ ------------------
Change in unrealized gains (losses) (2,650,813) 586,141 198,074 (18,445) 5,170,293
------------------ ------------------ ------------------ ------------------ ------------------
Net gains (losses)
on investments (2,698,669) 583,291 206,822 (19,246) 5,181,298
------------------ ------------------ ------------------ ------------------ ------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ (3,096,821) $ 549,237 $ 181,666 $ (55,156) $5,121,004
================== =================== ================= =================== =================
</TABLE>
See notes to financial statements.
4
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
----------------------------------------------------------------------------------------------
International International
Growth and New Money New
Income Opportunities Investors Market Opportunities
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ - $ - $ 153,816 $ -
Charges from Allstate Life
Insurance Company:
Mortality and expense risk (19,894) (17,878) (217,860) (47,820) (108,364)
------------------ ------------------ ------------------ ------------------ ------------------
Net investment income (loss) (19,894) (17,878) (217,860) 105,996 (108,364)
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales
of investments:
Proceeds from sales 463,154 373,826 129,574 3,625,107 20,054
Cost of investments sold 442,666 346,771 118,977 3,625,107 18,865
------------------ ------------------ ------------------ ------------------ ------------------
Net realized gains (losses) 20,488 27,055 10,597 - 1,189
------------------ ------------------ ------------------ ------------------ ------------------
Change in unrealized gains (losses) 329,577 2,414,460 11,530,546 - 11,834,699
------------------ ------------------ ------------------ ------------------ ------------------
Net gains (losses)
on investments 350,065 2,441,515 11,541,143 - 11,835,888
------------------ ------------------ ------------------ ------------------ ------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 330,171 $2,423,637 $11,323,283 $ 105,996 $11,727,524
================== =================== ================= =================== =================
</TABLE>
See notes to financial statements.
5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
----------------------------------------------------------------------------------------------
OTC & Utilities
New Emerging Small Growth and
Value Growth Research Cap Value Income
------------------ ------------------ ------------------------------------ ------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ 36,702 $ 504,319 $ 17,808 $ -
Charges from Allstate Life
Insurance Company:
Mortality and expense risk (23,561) (30,805) (60,946) (17,840) (21,930)
------------------ ------------------ ------------------------------------ ------------------
Net investment income (loss) (23,561) 5,897 443,373 (32) (21,930)
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales
of investments:
Proceeds from sales 511,204 244,974 104,735 343,642 57,562
Cost of investments sold 537,223 192,485 104,647 357,046 58,296
------------------ ------------------ ------------------------------------ ------------------
Net realized gains (losses) (26,019) 52,489 88 (13,404) (734)
------------------ ------------------ ------------------------------------ ------------------
Change in unrealized gains (losses) (220,508) 4,742,868 2,025,131 150,171 (133,372)
------------------ ------------------ ------------------------------------ ------------------
Net gains (losses)
on investments (246,527) 4,795,357 2,025,219 136,767 (134,106)
------------------ ------------------ ------------------------------------ ------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ (270,088) $4,801,254 $2,468,592 $ 136,735 $ (156,036)
================== =================== ================= =================== =================
</TABLE>
See notes to financial statements.
6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------------------
Putnam Variable Trust Sub-Accounts
---------------------------------------------
Vista Voyager
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 930,830 $ -
Charges from Allstate Life Insurance Company:
Mortality and expense risk (33,727) (273,748)
------------------ ------------------
Net investment income (loss) 897,103 (273,748)
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 96,344 5,467
Cost of investments sold 89,711 7,862
------------------ ------------------
Net realized gains (losses) 6,633 (2,395)
------------------ ------------------
Change in unrealized gains (losses) 2,138,192 24,743,740
------------------ ------------------
Net gains (losses) on investments 2,144,825 24,741,345
------------------ ------------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $3,041,928 $24,467,597
================== ==================
</TABLE>
See notes to financial statements.
7
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
--------------------------------------------------------------------------------------------
The George
Asia Putnam Fund Global
Pacific Diversified of Asset Global
Growth Income Boston Allocation Growth
----------------- ------------------ ------------------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (8,332) $ (42,429) $ 515,455 $ (6,712) $ (39,047)
Net realized gains (losses) 1,125 294 (832) (3) 7,605
Change in unrealized gains (losses) 1,013,576 241,058 (1,039,227) 168,116 4,224,112
----------------- ------------------ ------------------- ---------------- ------------------
Change in net assets resulting
from operations 1,006,369 198,923 (524,604) 161,401 4,192,670
----------------- ------------------ ------------------- --------------- ------------------
FROM CAPITAL TRANSACTIONS
Deposits 2,747,456 5,717,042 12,891,820 1,240,444 6,205,016
Benefit payments - (3,417) - - (378)
Payments on termination (11,734) (161,343) (304,746) (11,684) (63,561)
Contract maintenance charges (544) (1,700) (3,288) (317) (1,926)
Transfers among the sub-accounts
and with the Fixed Account - net 1,061,441 9,253,893 16,949,835 1,405,526 6,666,642
----------------- ------------------ ------------------- ---------------- ------------------
Change in net assets resulting
from capital transactions 3,796,619 14,804,475 29,533,621 2,633,969 12,805,793
----------------- ------------------ ------------------- ---------------- ------------------
INCREASE (DECREASE) IN NET ASSETS 4,802,988 15,003,398 29,009,017 2,795,370 16,998,463
NET ASSETS AT BEGINNING OF PERIOD - - - - -
----------------- ------------------ ------------------- ---------------- ------------------
NET ASSETS AT END OF PERIOD $ 4,802,988 $ 15,003,398 $ 29,009,017 $ 2,795,370 $ 16,998,463
================= ================== =================== ================ =================
</TABLE>
See notes to financial statements.
8
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
---------------------------------------------------------------------------------------------
Growth & Health High International
Income Sciences Yield Income Growth
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (398,152) $ (34,054) $(25,156) $(35,910) $(60,294)
Net realized gains (losses) (47,856) (2,850) 8,748 (801) 11,005
Change in unrealized gains (losses) (2,650,813) 586,141 198,074 (18,445) 5,170,293
------------- ------------- ------------- ------------- -------------
Change in net assets resulting
from operations (3,096,821) 549,237 181,666 (55,156) 5,121,004
------------- ------------- ------------- ------------- -------------
FROM CAPITAL TRANSACTIONS
Deposits 66,564,874 6,876,229 4,841,415 4,349,939 11,178,109
Benefit payments (37,062) (15,210) - - -
Payments on termination (1,216,975) (92,242) (104,534) (95,887) (121,259)
Contract maintenance charges (14,223) (1,604) (1,027) (1,393) (3,025)
Transfers among the sub-accounts
and with the Fixed Account - net 63,292,481 6,838,148 4,148,178 8,091,890 10,520,690
------------- ------------- ------------- ------------- -------------
Change in net assets resulting
from capital transactions 128,589,095 13,605,321 8,884,032 12,344,549 21,574,515
------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS 125,492,274 14,154,558 9,065,698 12,289,393 26,695,519
NET ASSETS AT BEGINNING OF PERIOD - - - - -
------------- ------------- ------------- ------------- -------------
NET ASSETS AT END OF PERIOD $125,492,274 $14,154,558 $9,065,698 $ 12,289,393 $26,695,519
=============== ============== ============ =============== ============
</TABLE>
See notes to financial statements.
9
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
---------------------------------------------------------------------------------------------
International International
Growth and New Money New
Income Opportunities Investors Market Opportunities
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (19,894) $ (17,878) $ (217,860) $ 105,996 $ (108,364)
Net realized gains (losses) 20,488 27,055 10,597 - 1,189
Change in unrealized gains (losses) 329,577 2,414,460 11,530,546 - 11,834,699
----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from operations 330,171 2,423,637 11,323,283 105,996 11,727,524
----------- ----------- ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS
Deposits 3,618,618 3,838,306 36,262,504 10,542,789 21,115,643
Benefit payments - - (30,501) (670,189) (23,210)
Payments on termination (46,787) (23,171) (582,482) (551,414) (181,269)
Contract maintenance charges (812) (1,079) (9,423) (1,912) (5,486)
Transfers among the sub-accounts
and with the Fixed Account - net 3,266,120 3,284,187 36,177,347 7,445,391 15,775,186
----------- ----------- ----------- ----------- -----------
Change in net assets resulting
from capital transactions 6,837,139 7,098,243 71,817,445 16,764,665 36,680,864
----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS 7,167,310 9,521,880 83,140,728 16,870,661 48,408,388
NET ASSETS AT BEGINNING OF PERIOD - - - - -
----------- ----------- ----------- ----------- -----------
NET ASSETS AT END OF PERIOD $7,167,310 $9,521,880 $83,140,728 $16,870,661 $48,408,388
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
-------------------------------------------------------------------------------------
OTC & Utilities
New Emerging Small Growth and
Value Growth Research Cap Value Income
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (23,561) $ 5,897 $ 443,373 $ (32) $(21,930)
Net realized gains (losses) (26,019) 52,489 88 (13,404) (734)
Change in unrealized gains (losses) (220,508) 4,742,868 2,025,131 150,171 (133,372)
----------- ----------- ---------- ---------- ----------
Change in net assets resulting
from operations (270,088) 4,801,254 2,468,592 136,735 (156,036)
----------- ----------- ---------- ---------- ----------
FROM CAPITAL TRANSACTIONS
Deposits 4,631,791 7,611,399 10,121,156 3,738,103 3,637,575
Benefit payments - - (19,019) - (1,534)
Payments on termination (71,977) (58,463) (144,741) (41,066) (64,952)
Contract maintenance charges (761) (1,975) (2,562) (694) (836)
Transfers among the sub-accounts
and with the Fixed Account - net 2,428,045 5,079,652 10,178,077 2,287,245 3,963,115
----------- ----------- ---------- ---------- ----------
Change in net assets resulting
from capital transactions 6,987,098 12,630,613 20,132,911 5,983,588 7,533,368
----------- ----------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS 6,717,010 17,431,867 22,601,503 6,120,323 7,377,332
NET ASSETS AT BEGINNING OF PERIOD - - - - -
----------- ----------- ---------- ---------- ----------
NET ASSETS AT END OF PERIOD $6,717,010 $17,431,867 $22,601,503 $6,120,323 $7,377,332
=========== ============ ============ ============ ==========
</TABLE>
See notes to financial statements.
11
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD BEGINNING MAY 3, 1999 AND ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Putnam Variable Trust Sub-Accounts
---------------------------------------------
Vista Voyager
----------------- --------------------
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 897,103 $ (273,748)
Net realized gains (losses) 6,633 (2,395)
Change in unrealized gains (losses) 2,138,192 24,743,740
----------------- --------------------
Change in net assets resulting from operations 3,041,928 24,467,597
----------------- --------------------
FROM CAPITAL TRANSACTIONS
Deposits 6,530,416 47,654,070
Benefit payments (3,766) (28,233)
Payments on termination (72,861) (760,755)
Contract maintenance charges (1,641) (12,609)
Transfers among the sub-accounts
and with the Fixed Account - net 4,985,435 39,938,356
----------------- --------------------
Change in net assets resulting
from capital transactions 11,437,583 86,790,829
----------------- --------------------
INCREASE (DECREASE) IN NET ASSETS 14,479,511 111,258,426
NET ASSETS AT BEGINNING OF PERIOD - -
----------------- --------------------
NET ASSETS AT END OF PERIOD $14,479,511 $ 111,258,426
================= ====================
</TABLE>
See notes to financial statements.
12
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allstate Life Insurance Company Separate Account A (the "Account"), a unit
investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, is a Separate Account of
Allstate Life Insurance Company ("Allstate"). The assets of the Account
are legally segregated from those of Allstate. Allstate is a wholly owned
subsidiary of Allstate Insurance Company, which is wholly owned by The
Allstate Corporation.
Allstate issues the Putnam Allstate Advisor ("Advisor") and Putnam
Allstate Advisor A ("Advisor A") contracts, the deposits of which are
invested at the direction of contractholders in sub-accounts that comprise
the Account. Absent any contract provisions wherein Allstate contractually
guarantees either a minimum return or account value to the beneficiaries
of the contractholders in the form of a death benefit, the contractholders
bear the investment risk that the sub-accounts may not meet their stated
objectives. The sub-accounts invest in the following underlying mutual
fund portfolios of the Putnam Variable Trust (the "Funds").
Asia Pacific Growth International New Opportunities
Diversified Income Investors
The George Putnam Fund of Boston Money Market
Global Asset Allocation New Opportunities
Global Growth New Value
Growth & Income OTC & Emerging Growth
Health Sciences Research
High Yield Small Cap Value
Income Utilities Growth and Income
International Growth Vista
International Growth and Income Voyager
Allstate provides insurance and administrative services to the
contractholders for a fee. Allstate also maintains a fixed account ("Fixed
Account"), to which contractholders may direct their deposits and receive
a fixed rate of return. Allstate has sole discretion to invest the assets
of the Fixed Account, subject to applicable law.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments consist of shares of the Funds and
are stated at fair value based on quoted market prices at December 31,
1999.
INVESTMENT INCOME - Investment income consists of dividends declared by
the Funds and is recognized on the ex-dividend date.
REALIZED GAINS AND LOSSES - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
13
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FEDERAL INCOME TAXES - The Account intends to qualify as a segregated
asset account as defined in the Internal Revenue Code ("Code"). As such,
the operations of the Account are included with and taxed as a part of
Allstate. Allstate is taxed as a life insurance company under the Code. No
federal income taxes are allocable to the Account as the Account did not
generate taxable income.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. EXPENSES
CONTRACT MAINTENANCE CHARGE - Allstate deducts from the contractholder's
account an annual maintenance charge of $30 on each Advisor contract
anniversary and guarantees that this charge will not increase over the
life of the contract. This charge will be waived if certain conditions are
met. There is no contract maintenance charge on the Advisor A contract.
MORTALITY AND EXPENSE RISK CHARGE - Allstate assumes mortality and expense
risks related to the operations of the Account and deducts charges the
daily based on the average daily net assets of the Account. The mortality
and expense risk charge covers insurance benefits available with the
contract and certain expenses of the contract. It also covers the risk
that the current charges will not be sufficient in the future to cover the
cost of administering the contract. Allstate guarantees that the amount of
this charge will not increase over the life of the contract. At the
contractholder's discretion, additional options, primarily death benefits,
may be purchased for an additional charge.
14
<PAGE>
4. UNITS ISSUED AND REDEEMED
(Units in whole amounts)
<TABLE>
<CAPTION>
Putnam Allstate Advisor
--------------------------------------------------------------------------------------
Unit activity during 1999:
---------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
May 3, 1999 Issued Redeemed December 31, 1999 December 31, 1999
------------------- ---------- ------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Investments in the Putnam Variable
Trust Sub-Accounts:
Asia Pacific Growth - 242,895 (1,554) 241,341 $ 17.44
Diversified Income - 1,129,582 (17,469) 1,112,113 9.87
The George Putnam Fund of Boston - 2,668,746 (39,341) 2,629,405 9.30
Global Asset Allocation - 219,025 (2,236) 216,789 10.70
Global Growth - 818,866 (9,295) 809,571 15.66
Growth and Income - 10,579,710 (133,163) 10,446,547 9.17
Health Sciences - 1,054,327 (16,379) 1,037,948 10.60
High Yield - 757,423 (68,918) 688,505 9.93
Income - 1,020,041 (25,728) 994,313 9.71
International Growth - 1,437,326 (20,835) 1,416,491 14.43
International Growth and Income - 574,760 (59,267) 515,493 10.97
International New Opportunities - 422,689 (33,644) 389,045 18.13
Investors - 5,580,875 (63,258) 5,517,617 12.17
Money Market - 1,735,261 (473,615) 1,261,646 10.23
New Opportunities - 2,379,571 (27,681) 2,351,890 15.69
New Value - 642,694 (15,877) 626,817 8.80
OTC & Emerging Growth - 722,095 (25,088) 697,007 19.84
Research - 1,588,829 (12,936) 1,575,893 11.60
Small Cap Value - 471,685 (20,187) 451,498 10.30
Utilities Growth and Income - 592,529 (7,405) 585,124 9.99
Vista - 835,166 (10,511) 824,655 14.09
Voyager - 6,067,583 (60,695) 6,006,888 14.33
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
15
<PAGE>
4. UNITS ISSUED AND REDEEMED (CONTINUED)
(Units in whole amounts)
<TABLE>
<CAPTION>
Putnam Allstate Advisor with Enhanced Beneficiary Protection
--------------------------------------------------------------------------------------
Unit activity during 1999:
---------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
May 3, 1999 Issued Redeemed December 31, 1999 December 31, 1999
------------------- ---------- ------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Investments in the Putnam Variable
Trust Sub-Accounts:
Asia Pacific Growth - 33,423 (745) 32,678 $ 17.42
Diversified Income - 414,195 (5,618) 408,577 9.86
The George Putnam Fund of Boston - 513,469 (25,504) 487,965 9.29
Global Asset Allocation - 44,571 (6) 44,565 10.69
Global Growth - 284,398 (9,781) 274,617 15.65
Growth and Income - 3,298,917 (73,609) 3,225,308 9.16
Health Sciences - 302,531 (8,640) 293,891 10.59
High Yield - 238,503 (14,895) 223,608 9.92
Income - 286,146 (15,063) 271,083 9.70
International Growth - 439,462 (9,997) 429,465 14.41
International Growth and Income - 137,929 (1,278) 136,651 10.96
International New Opportunities - 137,537 (3,596) 133,941 18.12
Investors - 1,333,984 (24,460) 1,309,524 12.16
Money Market - 463,082 (76,351) 386,731 10.22
New Opportunities - 737,732 (7,556) 730,176 15.68
New Value - 190,246 (53,202) 137,044 8.79
OTC & Emerging Growth - 186,416 (4,747) 181,669 19.82
Research - 375,492 (6,422) 369,070 11.59
Small Cap Value - 165,987 (25,691) 140,296 10.29
Utilities Growth and Income - 156,153 (2,501) 153,652 9.98
Vista - 202,831 (822) 202,009 14.07
Voyager - 1,782,652 (30,541) 1,752,111 14.31
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
16
<PAGE>
4. UNITS ISSUED AND REDEEMED (CONTINUED)
(Units in whole amounts)
<TABLE>
<CAPTION>
Putnam Allstate Advisor A
--------------------------------------------------------------------------------------
Unit activity during 1999:
---------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
May 3, 1999 Issued Redeemed December 31, 1999 December 31, 1999
------------------- ---------- ------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Investments in the Putnam Variable
Trust Sub-Accounts:
Asia Pacific Growth - 1,911 - 1,911 $ 13.36
Diversified Income - 409 - 409 10.19
The George Putnam Fund of Boston - 2,578 - 2,578 9.78
Global Asset Allocation - - - - -
Global Growth - 1,404 - 1,404 13.56
Growth and Income - 11,861 (2) 11,859 9.69
Health Sciences - 4,191 - 4,191 10.63
High Yield - 691 - 691 10.38
Income - - - - -
International Growth - 5,441 (1) 5,440 12.86
International Growth and Income - 1,515 - 1,515 10.58
International New Opportunities - 2,774 - 2,774 14.53
Investors - 7,390 (1) 7,389 11.61
Money Market - 938 - 938 10.07
New Opportunities - 4,105 - 4,105 13.47
New Value - - - - -
OTC & Emerging Growth - 312 - 312 15.16
Research - 3,617 - 3,617 11.06
Small Cap Value - 2,352 - 2,352 10.78
Utilities Growth and Income - 106 - 106 9.61
Vista - 1,448 - 1,448 13.01
Voyager - 9,327 (1) 9,326 12.95
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
17
<PAGE>
4. UNITS ISSUED AND REDEEMED (CONTINUED)
(Units in whole amounts)
<TABLE>
<CAPTION>
Putnam Allstate Advisor A with Enhanced Beneficiary Protection
--------------------------------------------------------------------------------------
Unit activity during 1999:
---------------------------------------------
Accumulated
Units Outstanding Units Units Units Outstanding Unit Value
May 3, 1999 Issued Redeemed December 31, 1999 December 31, 1999
------------------- ---------- ------------ ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Investments in the Putnam Variable
Trust Sub-Accounts:
Asia Pacific Growth - - - - $ -
Diversified Income - - - - -
The George Putnam Fund of Boston - - - - -
Global Asset Allocation - - - - -
Global Growth - - - - -
Growth and Income - 1,229 - 1,229 9.68
Health Sciences - - - - -
High Yield - - - - -
Income - - - - -
International Growth - - - - -
International Growth and Income - - - - -
International New Opportunities - - - - -
Investors - - - - -
Money Market - - - - -
New Opportunities - - - - -
New Value - - - - -
OTC & Emerging Growth - - - - -
Research - 808 - 808 11.06
Small Cap Value - - - - -
Utilities Growth and Income - - - - -
Vista - - - - -
Voyager - 694 - 694 12.95
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
18
<PAGE>
APPENDIX A
PUTNAM ALLSTATE ADVISOR CONTRACT
The performance figures shown reflect the deduction of current Contract charges,
which include a maximum withdrawal charge of 7% that declines to zero after 7
years (not shown for non-standardized total returns), an annual contract
maintenance charge of $30 (not shown for non-standardized total returns), and
total Variable Account annual expenses of:
o 1.25% (without any optional benefit riders), or
o 1.40% with the Enhanced Beneficiary Protection Option.
In addition, where Retirement Income Guarantee Rider 2 is included, the
performance shown reflects the deduction of the annual Rider fee equal to 0.30%
of the Income Base, assuming Income Base B is in effect and assuming no
additional purchase payments or withdrawals.
See the Expense Table in the Prospectus for more details.
Standardized Total Returns
Set out below are the standardized total returns for each Variable Sub-Account
(other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
<S> <C>
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 117.40%
Putnam Diversified Income -10.76%
The George Putnam Fund -18.78%
Putnam Global Asset Allocation 1.43%
Putnam Global Growth 84.18%
Putnam Growth and Income -20.55%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.07%
Putnam High Yield -9.79%
Putnam Income -12.94%
Putnam International Growth 62.08%
Putnam International Growth and Income 5.51%
Putnam International New Opportunities 130.96%
Putnam Investors 24.22%
Putnam Money Market -5.47%
Putnam New Opportunities 84.68%
Putnam New Value -25.70%
Putnam OTC & Emerging Growth 165.19%
Putnam Research 15.20%
Putnam Small Cap Value -4.44%
Putnam Utilities Growth and Income -9.03%
Putnam Vista 56.19%
Putnam Voyager 60.31%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 117.05%
Putnam Diversified Income -10.91%
The George Putnam Fund -18.92%
Putnam Global Asset Allocation 1.27%
Putnam Global Growth 83.89%
Putnam Growth and Income -20.68%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.23%
Putnam High Yield -9.94%
Putnam Income -13.08%
Putnam International Growth 61.82%
Putnam International Growth and Income 5.34%
Putnam International New Opportunities 130.60%
Putnam Investors 24.02%
Putnam Money Market -5.62%
Putnam New Opportunities 84.39%
Putnam New Value -25.82%
Putnam OTC & Emerging Growth 164.78%
Putnam Research 15.02%
Putnam Small Cap Value -4.59%
Putnam Utilities Growth and Income -9.18%
Putnam Vista 55.94%
Putnam Voyager 60.06%
(With Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 116.78%
Putnam Diversified Income -11.22%
The George Putnam Fund -19.23%
Putnam Global Asset Allocation 0.96%
Putnam Global Growth 83.60%
Putnam Growth and Income -20.99%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.55%
Putnam High Yield -10.25%
Putnam Income -13.39%
Putnam International Growth 61.52%
Putnam International Growth and Income 5.03%
Putnam International New Opportunities 130.34%
Putnam Investors 23.71%
Putnam Money Market -5.93%
Putnam New Opportunities 84.10%
Putnam New Value -26.13%
Putnam OTC & Emerging Growth 164.54%
Putnam Research 14.71%
Putnam Small Cap Value -4.91%
Putnam Utilities Growth and Income -9.49%
Putnam Vista 55.64%
Putnam Voyager 59.76%
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 116.44%
Putnam Diversified Income -11.37%
The George Putnam Fund -19.36%
Putnam Global Asset Allocation 0.79%
Putnam Global Growth 83.31%
Putnam Growth and Income -21.12%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.71%
Putnam High Yield -10.39%
Putnam Income -13.53%
Putnam International Growth 61.27%
Putnam International Growth and Income 4.86%
Putnam International New Opportunities 129.97%
Putnam Investors 23.52%
Putnam Money Market -6.09%
Putnam New Opportunities 83.81%
Putnam New Value -26.25%
Putnam OTC & Emerging Growth 164.12%
Putnam Research 14.52%
Putnam Small Cap Value -5.06%
Putnam Utilities Growth and Income -9.64%
Putnam Vista 55.39%
Putnam Voyager 59.51%
</TABLE>
<PAGE>
Non-Standardized Total Returns
Set out below are the non-standardized total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000. The
non-standardized total returns shown below do not reflect withdrawal charges or
the $30 annual contract maintenance charge that may be imposed under the Putnam
Allstate Advisor Contract. No non-standardized performance is shown for
Contracts with Retirement Income Guarantee Rider 2.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
<S> <C>
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.95%
Putnam Diversified Income -1.99%
The George Putnam Fund -10.26%
Putnam Global Asset Allocation 10.57%
Putnam Global Growth 95.17%
Putnam Growth and Income -12.08%
Putnam Growth Opportunities N/A
Putnam Health Sciences 9.02%
Putnam High Yield -0.98%
Putnam Income -4.23%
Putnam International Growth 72.64%
Putnam International Growth and Income 14.76%
Putnam International New Opportunities 142.73%
Putnam Investors 33.95%
Putnam Money Market 3.47%
Putnam New Opportunities 95.67%
Putnam New Value -17.41%
Putnam OTC & Emerging Growth 177.46%
Putnam Research 24.71%
Putnam Small Cap Value 4.53%
Putnam Utilities Growth and Income -0.20%
Putnam Vista 66.63%
Putnam Voyager 70.84%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.60%
Putnam Diversified Income -2.14%
The George Putnam Fund -10.40%
Putnam Global Asset Allocation 10.40%
Putnam Global Growth 94.87%
Putnam Growth and Income -12.22%
Putnam Growth Opportunities N/A
Putnam Health Sciences 8.85%
Putnam High Yield -1.13%
Putnam Income -4.38%
Putnam International Growth 72.38%
Putnam International Growth and Income 14.59%
Putnam International New Opportunities 142.36%
Putnam Investors 33.75%
Putnam Money Market 3.31%
Putnam New Opportunities 95.38%
Putnam New Value -17.53%
Putnam OTC & Emerging Growth 177.04%
Putnam Research 24.52%
Putnam Small Cap Value 4.37%
Putnam Utilities Growth and Income -0.35%
Putnam Vista 66.38%
Putnam Voyager 70.58%
</TABLE>
<PAGE>
Adjusted Historical Total Returns
Set out below are the adjusted historical total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since the Fund's inception through December
31, 1999. Adjusted historical total returns are computed in the same manner as
standardized total returns, except that the performance figures shown are based
on the Funds' historical performance since the inception of the Funds rather
than the inception of the Variable Sub-Accounts.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or a Retirement Income Guarantee Rider)
Ten Years or
Five Years Since Inception*
Variable Sub-Account One Year
<S> <C> <C> <C>
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 98.49% N/A 12.19%
Putnam Diversified Income -5.54% 4.96% 3.36%
The George Putnam Fund -7.67% N/A -3.01%
Putnam Global Asset Allocation 4.35% 15.05% 10.67%
Putnam Global Growth 58.34% 25.35% 15.66%
Putnam Growth and Income -5.82% 17.43% 12.37%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -11.20% N/A -1.95%
Putnam High Yield -1.53% 6.83% 9.25%
Putnam Income -9.40% 5.34% 6.02%
Putnam International Growth 52.02% N/A 27.38%
Putnam International Growth and Income 16.78% N/A 15.39%
Putnam International New Opportunities 94.26% N/A 30.03%
Putnam Investors 22.34% N/A 23.48%
Putnam Money Market -2.62% 3.20% 3.46%
Putnam New Opportunities 60.97% 30.82% 28.33%
Putnam New Value -7.01% N/A 4.78%
Putnam OTC & Emerging Growth 117.61% N/A 59.21%
Putnam Research 20.08% N/A 33.54%
Putnam Small Cap Value N/A N/A -4.44%
Putnam Utilities Growth and Income -8.04% 15.16% 11.02%
Putnam Vista 44.66% N/A 28.27%
Putnam Voyager 50.03% 29.60% 20.57%
- --------------
* Each of the above Funds (Class IB shares) corresponding to the Variable
Sub-Accounts commenced operations on April 30, 1998, except for the Putnam VT
Diversified Income, Growth and Income, and International Growth Funds, which
commenced operations on April 6, 1998, the Putnam VT Research Fund, which
commenced operations September 30, 1998, the Putnam VT Small Cap Value Fund,
which commenced operations April 30, 1999, and the Putnam VT American Government
Fund and Putnam VT Growth Opportunities Fund, which commenced operations on
January 31, 2000. For periods prior to the inception dates of the Funds (Class
IB shares), the performance shown is based on the historical performance of the
Funds (Class IA shares), adjusted to reflect the current expenses of the Funds
(Class IB shares). The inception dates for the Funds (Class IA shares) are as
follows:
Global Asset Allocation, Growth and Income, Income, High Yield, Money
Market, and Voyager commenced operations on February 1, 1988; Global
Growth commenced operations on May 1, 1990; Utilities Growth and Income
commenced operations on May 1, 1992; Diversified Income commenced
operations on September 15, 1993; New Opportunities commenced
operations on May 2, 1994; Asia Pacific Growth commenced operations on
May 1, 1995; International Growth, International Growth and Income,
International New Opportunities, New Value and Vista commenced
operations on January 2, 1997; The George Putnam Fund of Boston, Health
Sciences, Investors and OTC & Emerging Growth commenced operations on
April 30, 1998.
<PAGE>
(With the Enhanced Beneficiary Protection Option)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 98.18% N/A 12.02%
Putnam Diversified Income -5.69% 4.80% 3.20%
The George Putnam Fund -7.82% N/A -3.16%
Putnam Global Asset Allocation 4.19% 14.88% 10.50%
Putnam Global Growth 56.24% 24.87% 15.35%
Putnam Growth and Income -5.97% 17.25% 12.20%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -11.35% N/A -2.11%
Putnam High Yield -1.69% 6.66% 9.09%
Putnam Income -9.55% 5.18% 5.86%
Putnam International Growth 51.78% N/A 27.19%
Putnam International Growth and Income 16.59% N/A 15.21%
Putnam International New Opportunities 93.96% N/A 29.83%
Putnam Investors 22.15% N/A 23.29%
Putnam Money Market -2.78% 3.04% 3.31%
Putnam New Opportunities 60.72% 30.62% 28.13%
Putnam New Value -7.16% N/A 4.61%
Putnam OTC & Emerging Growth 117.27% N/A 58.96%
Putnam Research 19.89% N/A 33.33%
Putnam Small Cap Value N/A N/A -4.59%
Putnam Utilities Growth and Income -8.19% 14.99% 10.85%
Putnam Vista 44.44% N/A 28.07%
Putnam Voyager 49.79% 29.41% 20.38%
- --------------
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option as if that feature had been
available throughout the periods shown.
** The inception dates for the Funds appear in the first footnote to the
preceding table. For periods prior to the inception dates of the Funds
(Class IB shares), the performance shown is based on the historical
performance of the Funds (Class IA shares), adjusted to reflect the current
expenses of the Funds (Class IB shares). The inception dates for the Funds
(Class IA shares) are shown on the first note to the first table above.
<PAGE>
(With Retirement Income Guarantee Rider 2)*
Ten Years or
Five Years Since Fund
Variable Sub-Account One Year Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 98.17% N/A 11.79%
Putnam Diversified Income -5.86% 4.66% 2.98%
The George Putnam Fund -7.99% N/A -3.39%
Putnam Global Asset Allocation 4.04% 14.79% 10.38%
Putnam Global Growth 56.17% 24.78% 15.21%
Putnam Growth and Income -6.14% 17.20% 12.10%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -11.52% N/A -2.36%
Putnam High Yield -1.85% 6.54% 8.99%
Putnam Income -9.72% 5.04% 5.72%
Putnam International Growth 51.70% N/A 27.08%
Putnam International Growth and Income 16.46% N/A 15.09%
Putnam International New Opportunities 93.94% N/A 29.68%
Putnam Investors 22.03% N/A 23.11%
Putnam Money Market -2.94% 2.86% 3.11%
Putnam New Opportunities 60.65% 30.59% 28.08%
Putnam New Value -7.33% N/A 4.47%
Putnam OTC & Emerging Growth 117.29% N/A 58.78%
Putnam Research 19.76% N/A 33.00%
Putnam Small Cap Value N/A N/A -4.91%
Putnam Utilities Growth and Income -8.36% 14.92% 10.72%
Putnam Vista 44.35% N/A 27.98%
Putnam Voyager 49.71% 29.37% 20.33%
- --------------
* Performance figures have been adjusted to reflect the current charge for
Retirement Income Guarantee Rider 2 as if that feature had been available
throughout the periods shown. For purposes of computing the Rider fee, we
assumed that Income Base B applied, that there were no additional purchase
payments or withdrawals, and that the Contract Issue Date coincided with
the inception date of the Fund (Class IA shares).
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares, the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares) are shown on the first
note to the first table above.
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 97.86% N/A 11.62%
Putnam Diversified Income -6.01% 4.49% 2.81%
The George Putnam Fund -8.14% N/A -3.55%
Putnam Global Asset Allocation 3.87% 14.61% 10.21%
Putnam Global Growth 55.93% 24.59% 15.03%
Putnam Growth and Income -6.29% 17.02% 11.93%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -11.67% N/A -2.52%
Putnam High Yield -2.01% 6.37% 8.82%
Putnam Income -9.87% 4.87% 5.56%
Putnam International Growth 51.46% N/A 26.88%
Putnam International Growth and Income 16.27% N/A 14.91%
Putnam International New Opportunities 93.64% N/A 29.48%
Putnam Investors 21.83% N/A 22.91%
Putnam Money Market -3.10% 2.70% 2.95%
Putnam New Opportunities 60.40% 30.39% 27.88%
Putnam New Value -7.48% N/A 4.30%
Putnam OTC & Emerging Growth 116.95% N/A 58.53%
Putnam Research 19.57% N/A 32.79%
Putnam Small Cap Value N/A N/A -5.06%
Putnam Utilities Growth and Income -8.51% 14.74% 10.55%
Putnam Vista 44.12% N/A 27.78%
Putnam Voyager 49.47% 29.17% 20.15%
- --------------
</TABLE>
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option and Retirement Income Guarantee
Rider 2 as if those features had been available throughout the periods
shown.
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares), the performance shown is
based on the historical performance of the Funds (Class IA shares, adjusted
to reflect the current expenses of the Funds (Class IB shares). The
inception dates for the Funds (Class IA shares) are shown on the first note
to the preceding table.
<PAGE>
APPENDIX B
PUTNAM ALLSTATE ADVISOR APEX CONTRACT
Putnam Allstate Advisor Apex Contracts were first offered to the public on
October 25, 1999. Accordingly, performance shown for periods prior to that date
reflects the performance of the Variable Sub-Accounts, adjusted to reflect the
current charges under the Contracts that would have applied had they been in
existence at the time. These Contract charges include a maximum sales charge of
5.75% of purchase payments (not reflected in non-standardized total returns) and
total Variable Account annual expenses of:
o 0.80% (without any optional benefit riders), or
o 0.95% if you select the Enhanced Beneficiary Protection Option.
In addition, where Retirement Income Guarantee Rider 2 is included, the
performance shown reflects the deduction of the annual Rider fee equal to 0.30%
of the Income Base, assuming Income Base B is in effect and assuming no
additional purchase payments or withdrawals.
The performance shown does not reflect the maximum withdrawal charge of 0.50%,
which applies only during the first Contract Year and only to Contracts under
which purchase payments of at least a $1 million have been made. If such charge
were reflected, the performance shown would be lower.
See the Expense Table in the Prospectus for more details.
Standardized Total Returns
Set out below are the standardized total returns for each Variable Sub-Account
(other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000.
<PAGE>
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
<S> <C>
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 281.10%
Putnam Diversified Income -20.80%
The George Putnam Fund -37.74%
Putnam Global Asset Allocation 2.21%
Putnam Global Growth 315.23%
Putnam Growth and Income -41.05%
Putnam Growth Opportunities N/A
Putnam Health Sciences 1.01%
Putnam High Yield -11.95%
Putnam Income -31.24%
Putnam International Growth 204.81%
Putnam International Growth and Income -1.80%
Putnam International New Opportunities 518.95%
Putnam Investors 68.85%
Putnam Money Market -25.94%
Putnam New Opportunities 298.59%
Putnam New Value -40.27%
Putnam OTC & Emerging Growth 690.43%
Putnam Research 27.32%
Putnam Small Cap Value 9.37%
Putnam Utilities Growth and Income -43.79%
Putnam Vista 226.38%
Putnam Voyager 217.53%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 280.53%
Putnam Diversified Income -20.92%
The George Putnam Fund -37.83%
Putnam Global Asset Allocation 2.06%
Putnam Global Growth 314.61%
Putnam Growth and Income -41.14%
Putnam Growth Opportunities N/A
Putnam Health Sciences 0.86%
Putnam High Yield -12.09%
Putnam Income -31.34%
Putnam International Growth 204.35%
Putnam International Growth and Income -1.95%
Putnam International New Opportunities 518.02%
Putnam Investors 68.60%
Putnam Money Market -26.05%
Putnam New Opportunities 297.99%
Putnam New Value -40.36%
Putnam OTC & Emerging Growth 689.25%
Putnam Research 27.12%
Putnam Small Cap Value 9.21%
Putnam Utilities Growth and Income -43.88%
Putnam Vista 225.89%
Putnam Voyager 217.05%
(With Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 275.87%
Putnam Diversified Income -22.22%
The George Putnam Fund -38.90%
Putnam Global Asset Allocation 0.46%
Putnam Global Growth 309.62%
Putnam Growth and Income -42.17%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.73%
Putnam High Yield -13.51%
Putnam Income -32.50%
Putnam International Growth 200.47%
Putnam International Growth and Income -3.50%
Putnam International New Opportunities 511.14%
Putnam Investors 66.19%
Putnam Money Market -27.28%
Putnam New Opportunities 293.16%
Putnam New Value -41.40%
Putnam OTC & Emerging Growth 680.86%
Putnam Research 25.21%
Putnam Small Cap Value 7.51%
Putnam Utilities Growth and Income -44.86%
Putnam Vista 221.78%
Putnam Voyager 213.03%
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 275.31%
Putnam Diversified Income -22.34%
The George Putnam Fund -38.99%
Putnam Global Asset Allocation 0.31%
Putnam Global Growth 309.01%
Putnam Growth and Income -42.26%
Putnam Growth Opportunities N/A
Putnam Health Sciences -0.88%
Putnam High Yield -13.64%
Putnam Income -32.60%
Putnam International Growth 200.02%
Putnam International Growth and Income -3.65%
Putnam International New Opportunities 510.22%
Putnam Investors 65.94%
Putnam Money Market -27.40%
Putnam New Opportunities 292.57%
Putnam New Value -41.49%
Putnam OTC & Emerging Growth 679.69%
Putnam Research 25.02%
Putnam Small Cap Value 7.35%
Putnam Utilities Growth and Income -44.95%
Putnam Vista 221.30%
Putnam Voyager 212.56%
</TABLE>
<PAGE>
Non-Standardized Total Returns
Set out below are the non-standardized total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000. The
non-standardized total returns shown below do not reflect the withdrawal charges
that may be imposed under the Putnam Allstate Advisor Apex Contracts. No
non-standardized performance is shown for Contracts with Retirement Income
Guarantee Rider 2.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
<S> <C>
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 436.60%
Putnam Diversified Income 11.64%
The George Putnam Fund -12.22%
Putnam Global Asset Allocation 44.05%
Putnam Global Growth 484.62%
Putnam Growth and Income -16.90%
Putnam Growth Opportunities N/A
Putnam Health Sciences 42.36%
Putnam High Yield 24.09%
Putnam Income -3.07%
Putnam International Growth 329.25%
Putnam International Growth and Income 38.39%
Putnam International New Opportunities 771.20%
Putnam Investors 137.88%
Putnam Money Market 4.39%
Putnam New Opportunities 461.20%
Putnam New Value -15.80%
Putnam OTC & Emerging Growth 1012.38%
Putnam Research 79.40%
Putnam Small Cap Value 54.13%
Putnam Utilities Growth and Income -20.76%
Putnam Vista 359.60%
Putnam Voyager 347.14%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 435.79%
Putnam Diversified Income 11.47%
The George Putnam Fund -12.35%
Putnam Global Asset Allocation 43.83%
Putnam Global Growth 483.74%
Putnam Growth and Income -17.02%
Putnam Growth Opportunities N/A
Putnam Health Sciences 42.14%
Putnam High Yield 23.91%
Putnam Income -3.21%
Putnam International Growth 328.60%
Putnam International Growth and Income 38.18%
Putnam International New Opportunities 769.90%
Putnam Investors 137.52%
Putnam Money Market 4.24%
Putnam New Opportunities 460.36%
Putnam New Value -15.92%
Putnam OTC & Emerging Growth 1010.72%
Putnam Research 79.13%
Putnam Small Cap Value 53.90%
Putnam Utilities Growth and Income -20.88%
Putnam Vista 358.91%
Putnam Voyager 346.47%
</TABLE>
Adjusted Historical Total Returns
Set out below are the adjusted historical total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since the Fund's inception through December
31, 1999. Adjusted historical total returns are computed in the same manner as
standardized total returns, except that the performance figures shown are based
on the Funds' historical performance since the inception of the Funds rather
than the inception of the Variable Sub-Accounts.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or a Retirement Income Guarantee Rider)
Ten Year or
Five Years Since Fund
Variable Sub-Account One Year Inception**
<S> <C> <C> <C>
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 93.63% N/A 11.83%
Putnam Diversified Income -4.87% 4.66% 3.15%
The George Putnam Fund -6.89% N/A -2.40%
Putnam Global Asset Allocation 4.50% 14.55% 10.56%
Putnam Global Growth 53.86% 24.41% 15.40%
Putnam Growth and Income -5.14% 16.89% 12.26%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -10.23% N/A -1.40%
Putnam High Yield -1.07% 6.49% 9.15%
Putnam Income -8.53% 5.04% 5.92%
Putnam International Growth 49.63% N/A 26.54%
Putnam International Growth and Income 16.26% N/A 14.95%
Putnam International New Opportunities 89.63% N/A 29.12%
Putnam Investors 21.53% N/A 22.77%
Putnam Money Market -2.78% 2.81% 3.31%
Putnam New Opportunities 58.10% 30.09% 27.76%
Putnam New Value -6.26% N/A 4.76%
Putnam OTC & Emerging Growth 111.72% N/A 56.96%
Putnam Research 19.39% N/A 32.27%
Putnam Small Cap Value N/A N/A -3.86%
Putnam Utilities Growth and Income -7.24% 14.66% 10.72%
Putnam Vista 42.67% N/A 27.40%
Putnam Voyager 47.74% 28.88% 20.44%
- --------------
* Each of the above Funds (Class IB shares) corresponding to the Variable
Sub-Accounts commenced operations on April 30, 1998, except for the Putnam VT
Diversified Income, Growth and Income, and International Growth Funds, which
commenced operations on April 6, 1998, the Putnam VT Research Fund, which
commenced operations September 30, 1998, the Putnam VT Small Cap Value Fund,
which commenced operations April 30, 1999, and the Putnam VT American Government
Fund and Putnam VT Growth Opportunities Fund, which commenced operations on
January 31, 2000. For periods prior to the inception dates of the Funds (Class
IB shares), the performance shown is based on the historical performance of the
Funds (Class IA shares), adjusted to reflect the current expenses of the Funds
(Class IB shares). The inception dates for the Funds (Class IA shares) are as
follows:
Global Asset Allocation, Growth and Income, Income, High Yield, Money
Market, and Voyager commenced operations on February 1, 1988; Global Growth
commenced operations on May 1, 1990; Utilities Growth and Income commenced
operations on May 1, 1992; Diversified Income commenced operations on
September 15, 1993; New Opportunities commenced operations on May 2, 1994;
Asia Pacific Growth commenced operations on May 1, 1995; International
Growth, International Growth and Income, International New Opportunities,
New Value and Vista commenced operations on January 2, 1997; The George
Putnam Fund of Boston, Health Sciences, Investors and OTC & Emerging Growth
commenced operations on April 30, 1998.
<PAGE>
(With the Enhanced Beneficiary Protection Option)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 93.34% N/A 11.66%
Putnam Diversified Income -5.02% 4.51% 2.99%
The George Putnam Fund -7.03% N/A -2.55%
Putnam Global Asset Allocation 4.34% 14.38% 10.40%
Putnam Global Growth 53.63% 24.23% 15.22%
Putnam Growth and Income -5.28% 16.71% 12.09%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -10.37% N/A -1.55%
Putnam High Yield -1.22% 6.33% 8.98%
Putnam Income -8.67% 4.88% 5.76%
Putnam International Growth 49.40% N/A 26.35%
Putnam International Growth and Income 16.09% N/A 14.78%
Putnam International New Opportunities 89.34% N/A 28.92%
Putnam Investors 21.35% N/A 22.59%
Putnam Money Market -2.93% 2.66% 3.15%
Putnam New Opportunities 57.86% 29.89% 27.57%
Putnam New Value -6.40% N/A 4.60%
Putnam OTC & Emerging Growth 111.40% N/A 56.72%
Putnam Research 19.21% N/A 32.07%
Putnam Small Cap Value N/A N/A -4.00%
Putnam Utilities Growth and Income -7.38% 14.48% 10.55%
Putnam Vista 42.45% N/A 27.21%
Putnam Voyager 47.52% 28.69% 20.26%
- --------------
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option as if that feature had been
available throughout the periods shown.
** The inception dates for the Funds appear in the first footnote to the
preceding table. For periods prior to the inception dates of the Funds
(Class IB shares, the performance shown is based on the historical
performance of the Funds (Class IA shares, adjusted to reflect the current
expenses of the Funds (Class IB shares). The inception dates for the Funds
(Class IA shares) are shown on the first note to the first table above.
<PAGE>
(With Retirement Income Guarantee Rider 2)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 93.33% N/A 11.44%
Putnam Diversified Income -5.17% 4.37% 2.78%
The George Putnam Fund -7.19% N/A -2.77%
Putnam Global Asset Allocation 4.20% 14.30% 10.28%
Putnam Global Growth 53.56% 24.14% 15.09%
Putnam Growth and Income -5.44% 16.66% 12.00%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -10.53% N/A -1.78%
Putnam High Yield -1.37% 6.21% 8.89%
Putnam Income -8.83% 4.75% 5.63%
Putnam International Growth 49.33% N/A 26.25%
Putnam International Growth and Income 15.96% N/A 14.66%
Putnam International New Opportunities 89.33% N/A 28.78%
Putnam Investors 21.23% N/A 22.42%
Putnam Money Market -3.08% 2.49% 2.96%
Putnam New Opportunities 57.80% 29.86% 27.51%
Putnam New Value -6.56% N/A 4.47%
Putnam OTC & Emerging Growth 111.42% N/A 56.55%
Putnam Research 19.09% N/A 31.76%
Putnam Small Cap Value N/A N/A -4.30%
Putnam Utilities Growth and Income -7.54% 14.42% 10.43%
Putnam Vista 42.37% N/A 27.12%
Putnam Voyager 47.44% 28.65% 20.21%
- --------------
* Performance figures have been adjusted to reflect the current charge for
Retirement Income Guarantee Rider 2 as if that feature had been available
throughout the periods shown. For purposes of computing the Rider fee, we
assumed that Income Base B applied, that there were no additional purchase
payments or withdrawals, and that the Contract Issue Date coincided with
the inception date of the Fund (Class IA shares).
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares), the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares are shown on the first
note to the first table above.
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 93.04% N/A 11.27%
Putnam Diversified Income -5.31% 4.21% 2.62%
The George Putnam Fund -7.33% N/A -2.91%
Putnam Global Asset Allocation 4.04% 14.12% 10.11%
Putnam Global Growth 53.33% 23.95% 14.91%
Putnam Growth and Income -5.58% 16.48% 11.83%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -10.67% N/A -1.93%
Putnam High Yield -1.52% 6.05% 8.73%
Putnam Income -8.96% 4.59% 5.47%
Putnam International Growth 49.10% N/A 26.06%
Putnam International Growth and Income 15.79% N/A 14.49%
Putnam International New Opportunities 89.04% N/A 28.59%
Putnam Investors 21.05% N/A 22.23%
Putnam Money Market -3.23% 2.33% 2.80%
Putnam New Opportunities 57.56% 29.66% 27.32%
Putnam New Value -6.70% N/A 4.31%
Putnam OTC & Emerging Growth 111.10% N/A 56.32%
Putnam Research 18.91% N/A 31.56%
Putnam Small Cap Value N/A N/A -4.44%
Putnam Utilities Growth and Income -7.68% 14.25% 10.26%
Putnam Vista 42.15% N/A 26.93%
Putnam Voyager 47.22% 28.46% 20.03%
- --------------
</TABLE>
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option and Retirement Income Guarantee
Rider 2 as if those features had been available throughout the periods
shown.
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares, the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares are shown on the first
note to the preceding table.
<PAGE>
APPENDIX C
PUTNAM ALLSTATE ADVISOR PLUS CONTRACT
Putnam Allstate Advisor Plus Contracts were first offered to the public on
February 4, 2000. Accordingly, performance shown for periods prior to that date
reflects the performance of the Variable Sub-Accounts, adjusted to reflect the
current charges under the Contracts that would have applied had they been in
existence at the time. These Contract charges include a maximum withdrawal
charge of 8% that declines to zero after seven years (not reflected in
non-standardized total returns), and total Variable Account annual expenses of:
o 1.60% (without any optional benefit riders), or
o 1.75% with the Enhanced Beneficiary Protection Option.
In addition, where Retirement Income Guarantee Rider 2 is included, the
performance shown reflects the deduction of the annual Rider fee equal to 0.30%
of the Income Base, assuming Income Base B is in effect and assuming no
additional purchase payments or withdrawals.
The standardized total returns shown below also include the 4% credit
enhancement available under the Putnam Allstate Advisor Plus Contract.
See the Expense Table in the Prospectus for more details.
Standardized Total Returns
Set out below are the standardized total returns for each Variable Sub-Account
(other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
Variable Sub-Account Since Inception of Sub-Account
<S> <C>
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.62%
Putnam Diversified Income -6.54%
The George Putnam Fund -14.99%
Putnam Global Asset Allocation 6.30%
Putnam Global Growth 97.81%
Putnam Growth and Income -16.84%
Putnam Growth Opportunities N/A
Putnam Health Sciences 4.72%
Putnam High Yield -5.51%
Putnam Income -8.83%
Putnam International Growth 70.24%
Putnam International Growth and Income 10.61%
Putnam International New Opportunities 142.91%
Putnam Investors 30.32%
Putnam Money Market -2.04%
Putnam New Opportunities 94.08%
Putnam New Value -22.27%
Putnam OTC & Emerging Growth 178.99%
Putnam Research 20.82%
Putnam Small Cap Value 0.13%
Putnam Utilities Growth and Income -4.70%
Putnam Vista 64.03%
Putnam Voyager 68.38%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.27%
Putnam Diversified Income -6.69%
The George Putnam Fund -15.13%
Putnam Global Asset Allocation 6.13%
Putnam Global Growth 97.80%
Putnam Growth and Income -16.98%
Putnam Growth Opportunities N/A
Putnam Health Sciences 4.55%
Putnam High Yield -5.67%
Putnam Income -8.98%
Putnam International Growth 69.97%
Putnam International Growth and Income 10.43%
Putnam International New Opportunities 142.53%
Putnam Investors 30.11%
Putnam Money Market -2.20%
Putnam New Opportunities 93.77%
Putnam New Value -22.39%
Putnam OTC & Emerging Growth 178.55%
Putnam Research 20.62%
Putnam Small Cap Value -0.02%
Putnam Utilities Growth and Income -4.85%
Putnam Vista 63.77%
Putnam Voyager 68.11%
(With Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 127.98%
Putnam Diversified Income -7.02%
The George Putnam Fund -15.45%
Putnam Global Asset Allocation 5.80%
Putnam Global Growth 97.19%
Putnam Growth and Income -17.31%
Putnam Growth Opportunities N/A
Putnam Health Sciences 4.22%
Putnam High Yield -6.00%
Putnam Income -9.31%
Putnam International Growth 69.66%
Putnam International Growth and Income 10.10%
Putnam International New Opportunities 142.25%
Putnam Investors 29.79%
Putnam Money Market -2.53%
Putnam New Opportunities 93.46%
Putnam New Value -22.72%
Putnam OTC & Emerging Growth 178.29%
Putnam Research 20.29%
Putnam Small Cap Value -0.35%
Putnam Utilities Growth and Income -5.18%
Putnam Vista 63.45%
Putnam Voyager 67.79%
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 127.62%
Putnam Diversified Income -7.18%
The George Putnam Fund -15.59%
Putnam Global Asset Allocation 5.63%
Putnam Global Growth 97.18%
Putnam Growth and Income -17.44%
Putnam Growth Opportunities N/A
Putnam Health Sciences 4.05%
Putnam High Yield -6.15%
Putnam Income -9.46%
Putnam International Growth 69.39%
Putnam International Growth and Income 9.92%
Putnam International New Opportunities 141.87%
Putnam Investors 29.58%
Putnam Money Market -2.69%
Putnam New Opportunities 93.16%
Putnam New Value -22.85%
Putnam OTC & Emerging Growth 177.85%
Putnam Research 20.10%
Putnam Small Cap Value -0.51%
Putnam Utilities Growth and Income -5.34%
Putnam Vista 63.19%
Putnam Voyager 67.52%
</TABLE>
<PAGE>
Non-Standardized Total Returns
Set out below are the non-standardized total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000. The
non-standardized total returns shown below do not include the 4% credit
enhancement available under the Putnam Allstate Advisor Plus Contract or the
withdrawal charge that may be imposed under the Contract. No non-standardized
performance is shown for Contracts with Retirement Income Guarantee Rider 2.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
Variable Sub-Account Since Inception of Sub-Account
<S> <C>
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.18%
Putnam Diversified Income -2.33%
The George Putnam Fund -10.58%
Putnam Global Asset Allocation 10.17%
Putnam Global Growth 98.57%
Putnam Growth and Income -12.39%
Putnam Growth Opportunities N/A
Putnam Health Sciences 8.63%
Putnam High Yield -1.33%
Putnam Income -4.57%
Putnam International Growth 72.04%
Putnam International Growth and Income 14.35%
Putnam International New Opportunities 141.89%
Putnam Investors 33.47%
Putnam Money Market 2.04%
Putnam New Opportunities 94.98%
Putnam New Value -17.70%
Putnam OTC & Emerging Growth 176.46%
Putnam Research 24.26%
Putnam Small Cap Value 4.17%
Putnam Utilities Growth and Income -0.54%
Putnam Vista 66.04%
Putnam Voyager 70.24%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 127.84%
Putnam Diversified Income -2.48%
The George Putnam Fund -10.71%
Putnam Global Asset Allocation 10.00%
Putnam Global Growth 98.57%
Putnam Growth and Income -12.53%
Putnam Growth Opportunities N/A
Putnam Health Sciences 8.46%
Putnam High Yield -1.48%
Putnam Income -4.72%
Putnam International Growth 71.78%
Putnam International Growth and Income 14.18%
Putnam International New Opportunities 141.53%
Putnam Investors 33.27%
Putnam Money Market 1.89%
Putnam New Opportunities 94.69%
Putnam New Value -17.82%
Putnam OTC & Emerging Growth 176.04%
Putnam Research 24.07%
Putnam Small Cap Value 4.01%
Putnam Utilities Growth and Income -0.69%
Putnam Vista 65.79%
Putnam Voyager 69.98%
</TABLE>
<PAGE>
Adjusted Historical Total Returns
Set out below are the adjusted historical total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since the Fund's inception through December
31, 1999. Adjusted historical total returns are computed in the same manner as
standardized total returns, except that the performance figures shown are based
on the Funds' historical performance since the inception of the Funds rather
than the inception of the Variable Sub-Accounts. The adjusted historical total
returns shown below include the 4% credit enhancement available under the Putnam
Allstate Advisor Plus Contract as well as the applicable withdrawal charge under
the Contract.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or a Retirement Income Guarantee Rider)
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception*
<S> <C> <C> <C>
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 105.16% N/A 12.59%
Putnam Diversified Income -2.68% 5.06% 3.48%
The George Putnam Fund -4.89% N/A -1.36%
Putnam Global Asset Allocation 7.57% 15.31% 10.75%
Putnam Global Growth 63.98% 25.81% 15.80%
Putnam Growth and Income -2.96% 17.72% 12.45%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -8.54% N/A -0.28%
Putnam High Yield 1.47% 6.96% 9.33%
Putnam Income -6.67% 5.45% 6.11%
Putnam International Growth 56.98% N/A 28.35%
Putnam International Growth and Income 20.45% N/A 16.17%
Putnam International New Opportunities 100.77% N/A 31.04%
Putnam Investors 26.22% N/A 25.71%
Putnam Money Market -0.38% 3.12% 3.48%
Putnam New Opportunities 66.25% 31.26% 28.72%
Putnam New Value -4.19% N/A 5.38%
Putnam OTC & Emerging Growth 124.94% N/A 62.22%
Putnam Research 23.87% N/A 36.93%
Putnam Small Cap Value N/A N/A 0.13%
Putnam Utilities Growth and Income -5.26% 15.42% 11.07%
Putnam Vista 49.35% N/A 29.25%
Putnam Voyager 54.91% 30.03% 20.65%
- --------------
* Each of the above Funds (Class IB shares) corresponding to the Variable
Sub-Accounts commenced operations on April 30, 1998, except for the Putnam VT
Diversified Income, Growth and Income, and International Growth Funds, which
commenced operations on April 6, 1998, the Putnam VT Research Fund, which
commenced operations September 30, 1998, the Putnam VT Small Cap Value Fund,
which commenced operations April 30, 1999, and the Putnam VT American Government
Fund and Putnam VT Growth Opportunities Fund, which commenced operations on
January 31, 2000. For periods prior to the inception dates of the Funds (Class
IB shares, the performance shown is based on the historical performance of the
Funds (Class IA shares), adjusted to reflect the current expenses of the Funds
(Class IB shares). The inception dates for the Funds (Class IA shares) are as
follows:
Global Asset Allocation, Growth and Income, Income, High Yield, Money
Market, and Voyager commenced operations on February 1, 1988; Global Growth
commenced operations on May 1, 1990; Utilities Growth and Income commenced
operations on May 1, 1992; Diversified Income commenced operations on
September 15, 1993; New Opportunities commenced operations on May 2, 1994;
Asia Pacific Growth commenced operations on May 1, 1995; International
Growth, International Growth and Income, International New Opportunities,
New Value and Vista commenced operations on January 2, 1997; The George
Putnam Fund of Boston, Health Sciences, Investors and OTC & Emerging Growth
commenced operations on April 30, 1998.
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 104.51% N/A 12.00%
Putnam Diversified Income -3.16% 4.58% 2.92%
The George Putnam Fund -5.37% N/A -1.92%
Putnam Global Asset Allocation 7.07% 14.86% 10.29%
Putnam Global Growth 63.56% 25.35% 15.31%
Putnam Growth and Income -3.45% 17.30% 12.00%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -9.02% N/A -0.86%
Putnam High Yield 0.98% 6.49% 8.90%
Putnam Income -7.16% 4.96% 5.63%
Putnam International Growth 56.40% N/A 27.84%
Putnam International Growth and Income 19.93% N/A 15.68%
Putnam International New Opportunities 100.12% N/A 30.48%
Putnam Investors 25.68% N/A 25.12%
Putnam Money Market -0.88% 2.61% 2.96%
Putnam New Opportunities 65.66% 30.82% 28.26%
Putnam New Value -4.68% N/A 4.89%
Putnam OTC & Emerging Growth 124.25% N/A 61.52%
Putnam Research 23.34% N/A 36.16%
Putnam Small Cap Value N/A N/A -0.51%
Putnam Utilities Growth and Income -5.74% 14.99% 10.60%
Putnam Vista 48.79% N/A 28.75%
Putnam Voyager 54.33% 29.59% 20.22%
- --------------
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option and Retirement Income Guarantee
Rider 2 as if those features had been available throughout the periods
shown.
** The inception dates for the Funds appear in the first footnote to the
preceding table. For periods prior to the inception dates of the Funds
(Class IB shares), the performance shown is based on the historical
performance of the Funds (Class IA shares), adjusted to reflect the current
expenses of the Funds (Class IB shares). The inception dates for the Funds
(Class IA shares) are shown on the first note to the preceding table.
<PAGE>
(With the Enhanced Beneficiary Protection Option)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 104.84% N/A 12.41%
Putnam Diversified Income -2.83% 4.89% 3.32%
The George Putnam Fund -5.04% N/A -1.52%
Putnam Global Asset Allocation 7.402 15.13% 10.58%
Putnam Global Growth 63.89% 25.64% 15.64%
Putnam Growth and Income -3.12% 17.54% 12.28%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -8.69% N/A -0.44%
Putnam High Yield 1.31% 6.79% 9.17%
Putnam Income -6.83% 5.28% 5.94%
Putnam International Growth 56.73% N/A 28.15%
Putnam International Growth and Income 20.26% N/A 15.99%
Putnam International New Opportunities 100.45% N/A 30.84%
Putnam Investors 26.01% N/A 25.51%
Putnam Money Market -0.55% 2.96% 3.33%
Putnam New Opportunities 65.99% 31.06% 28.52%
Putnam New Value -4.35% N/A 5.21%
Putnam OTC & Emerging Growth 124.58% N/A 61.96%
Putnam Research 23.67% N/A 36.71%
Putnam Small Cap Value N/A N/A -0.02%
Putnam Utilities Growth and Income -5.41% 15.24% 10.90%
Putnam Vista 49.12% N/A 29.05%
Putnam Voyager 54.66% 29.83% 20.46%
- --------------
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option as if that feature had been
available throughout the periods shown.
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares), the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares) are shown on the first
note to the first table above.
<PAGE>
(With Retirement Income Guarantee Rider 2)*
Ten Years or
Five Years Since Fund
Variable Sub-Account One Year Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 104.83% N/A 12.18%
Putnam Diversified Income -3.00% 4.74% 3.09%
The George Putnam Fund -5.21% N/A -1.76%
Putnam Global Asset Allocation 7.24% 15.04% 10.46%
Putnam Global Growth 63.65% 25.52% 15.48%
Putnam Growth and Income -3.29% 17.48% 12.18%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -8.87% N/A -0.70%
Putnam High Yield 1.14% 6.66% 9.07%
Putnam Income -7.01% 5.13% 5.80%
Putnam International Growth 56.65% N/A 28.04%
Putnam International Growth and Income 20.12% N/A 15.86%
Putnam International New Opportunities 100.43% N/A 30.69%
Putnam Investors 25.89% N/A 25.33%
Putnam Money Market -0.72% 2.77% 3.12%
Putnam New Opportunities 65.92% 31.02% 28.46%
Putnam New Value -4.52% N/A 5.06%
Putnam OTC & Emerging Growth 124.61% N/A 61.78%
Putnam Research 23.54% N/A 36.38%
Putnam Small Cap Value N/A N/A -0.35%
Putnam Utilities Growth and Income -5.59% 15.17% 10.77%
Putnam Vista 49.02% N/A 28.95%
Putnam Voyager 54.58% 29.79% 20.41%
- --------------
</TABLE>
* Performance figures have been adjusted to reflect the current charge for
Retirement Income Guarantee Rider 2 as if that feature had been available
throughout the periods shown. For purposes of computing the Rider fee, we
assumed that Income Base B applied, that there were no additional purchase
payments or withdrawals, and that the Contract Issue Date coincided with
the inception date of the Fund (Class IA shares).
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares, the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares) are shown on the first
note to the first table above.
<PAGE>
APPENDIX D
PUTNAM ALLSTATE ADVISOR PREFERRED CONTRACT
Putnam Allstate Advisor Preferred Contracts were first offered to the public as
of the date of this Statement of Additional Information. Accordingly,
performance shown for periods prior to that date reflects the performance of the
Variable Sub-Accounts, adjusted to reflect the current charges under the
Contracts that would have applied had they been in existence at the time. These
Contract charges include a maximum withdrawal charge of 2% that declines to zero
after two years (not reflected in non-standardized total returns), and total
Variable Account annual expenses of:
o 1.65% (without any optional benefit riders), or
o 1.80% with the Enhanced Beneficiary Protection Option.
In addition, where Retirement Income Guarantee Rider 2 is included, the
performance shown reflects the deduction of the annual Rider fee equal to 0.30%
of the Income Base, assuming Income Base B is in effect and assuming no
additional purchase payments or withdrawals.
See the Expense Table in the Prospectus for more details.
Standardized Total Returns
Set out below are the standardized total returns for each Variable Sub-Account
(other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000.
<PAGE>
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
Variable Sub-Account Since Inception of Sub-Account
<S> <C>
Putnam American Government Income N/A
Putnam Asia Pacific Growth 124.30%
Putnam Diversified Income -5.33%
The George Putnam Fund -13.49%
Putnam Global Asset Allocation 7.06%
Putnam Global Growth 94.94%
Putnam Growth and Income -15.28%
Putnam Growth Opportunities N/A
Putnam Health Sciences 5.53%
Putnam High Yield -4.34%
Putnam Income -7.54%
Putnam International Growth 68.46%
Putnam International Growth and Income 11.20%
Putnam International New Opportunities 137.94%
Putnam Investors 30.17%
Putnam Money Market -0.99%
Putnam New Opportunities 91.27%
Putnam New Value -20.53%
Putnam OTC & Emerging Growth 172.36%
Putnam Research 21.03%
Putnam Small Cap Value 1.11%
Putnam Utilities Growth and Income -3.55%
Putnam Vista 62.51%
Putnam Voyager 66.67%
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 123.96%
Putnam Diversified Income -5.48%
The George Putnam Fund -13.62%
Putnam Global Asset Allocation 6.89%
Putnam Global Growth 94.93%
Putnam Growth and Income -15.42%
Putnam Growth Opportunities N/A
Putnam Health Sciences 5.37%
Putnam High Yield -4.49%
Putnam Income -7.69%
Putnam International Growth 68.20%
Putnam International Growth and Income 11.03%
Putnam International New Opportunities 137.58%
Putnam Investors 29.96%
Putnam Money Market -1.14%
Putnam New Opportunities 90.98%
Putnam New Value -20.65%
Putnam OTC & Emerging Growth 171.94%
Putnam Research 20.84%
Putnam Small Cap Value 0.95%
Putnam Utilities Growth and Income -3.70%
Putnam Vista 62.25%
Putnam Voyager 66.41%
<PAGE>
(With Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 123.68%
Putnam Diversified Income -5.79%
The George Putnam Fund -13.94%
Putnam Global Asset Allocation 6.57%
Putnam Global Growth 94.35%
Putnam Growth and Income -15.73%
Putnam Growth Opportunities N/A
Putnam Health Sciences 5.05%
Putnam High Yield -4.80%
Putnam Income -8.00%
Putnam International Growth 67.90%
Putnam International Growth and Income 10.71%
Putnam International New Opportunities 137.31%
Putnam Investors 29.65%
Putnam Money Market -1.46%
Putnam New Opportunities 90.69%
Putnam New Value -20.97%
Putnam OTC & Emerging Growth 171.70%
Putnam Research 20.52%
Putnam Small Cap Value 0.63%
Putnam Utilities Growth and Income -4.02%
Putnam Vista 61.95%
Putnam Voyager 66.11%
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 123.34%
Putnam Diversified Income -5.94%
The George Putnam Fund -14.07%
Putnam Global Asset Allocation 6.41%
Putnam Global Growth 94.34%
Putnam Growth and Income -15.86%
Putnam Growth Opportunities N/A
Putnam Health Sciences 4.89%
Putnam High Yield -4.95%
Putnam Income -8.15%
Putnam International Growth 67.64%
Putnam International Growth and Income 10.54%
Putnam International New Opportunities 136.95%
Putnam Investors 29.45%
Putnam Money Market -1.61%
Putnam New Opportunities 90.39%
Putnam New Value -21.09%
Putnam OTC & Emerging Growth 171.28%
Putnam Research 20.34%
Putnam Small Cap Value 0.48%
Putnam Utilities Growth and Income -4.17%
Putnam Vista 61.70%
Putnam Voyager 65.85%
</TABLE>
<PAGE>
Non-Standardized Total Returns
Set out below are the non-standardized total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since its inception through December 31,
1999. All of the Variable Sub-Accounts commenced operations on April 30, 1999
except for the Putnam American Government Income and Putnam Growth Opportunities
Variable Sub-Accounts, which commenced operations on February 4, 2000. The
non-standardized total returns shown below do not reflect the withdrawal charge
that may be imposed under the Putnam Allstate Advisor Preferred Contract. No
non-standardized performance is shown for Contracts with Retirement Income
Guarantee Rider 2.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or Retirement Income Guarantee Rider)
Variable Sub-Account Since Inception of Sub-Account
<S> <C>
Putnam American Government Income N/A
Putnam Asia Pacific Growth 128.07%
Putnam Diversified Income -2.38%
The George Putnam Fund -10.62%
Putnam Global Asset Allocation 10.11%
Putnam Global Growth 98.57%
Putnam Growth and Income -12.44%
Putnam Growth Opportunities N/A
Putnam Health Sciences 8.57%
Putnam High Yield -1.38%
Putnam Income -4.62%
Putnam International Growth 71.95%
Putnam International Growth and Income 14.29%
Putnam International New Opportunities 141.77%
Putnam Investors 33.41%
Putnam Money Market 1.99%
Putnam New Opportunities 94.89%
Putnam New Value -17.74%
Putnam OTC & Emerging Growth 176.32%
Putnam Research 24.20%
Putnam Small Cap Value 4.11%
Putnam Utilities Growth and Income -0.59%
Putnam Vista 65.96%
Putnam Voyager 70.15%
<PAGE>
(With the Enhanced Beneficiary Protection Option)
Variable Sub-Account Since Inception of Sub-Account
Putnam American Government Income N/A
Putnam Asia Pacific Growth 127.73%
Putnam Diversified Income -2.53%
The George Putnam Fund -10.76%
Putnam Global Asset Allocation 9.94%
Putnam Global Growth 98.56%
Putnam Growth and Income -12.57%
Putnam Growth Opportunities N/A
Putnam Health Sciences 8.41%
Putnam High Yield -1.53%
Putnam Income -4.76%
Putnam International Growth 71.69%
Putnam International Growth and Income 14.12%
Putnam International New Opportunities 141.41%
Putnam Investors 33.20%
Putnam Money Market 1.83%
Putnam New Opportunities 94.59%
Putnam New Value -17.86%
Putnam OTC & Emerging Growth 175.90%
Putnam Research 24.01%
Putnam Small Cap Value 3.96%
Putnam Utilities Growth and Income -0.74%
Putnam Vista 65.71%
Putnam Voyager 69.89%
</TABLE>
<PAGE>
Adjusted Historical Total Returns
Set out below are the adjusted historical total returns for each Variable
Sub-Account (other than the Putnam American Government Income and Putnam Growth
Opportunities Variable Sub-Accounts) since the Fund's inception through December
31, 1999. Adjusted historical total returns are computed in the same manner as
standardized total returns, except that the performance figures shown are based
on the Funds' historical performance since the inception of the Funds rather
than the inception of the Variable Sub-Accounts.
<TABLE>
<CAPTION>
(Without the Enhanced Beneficiary Protection Option or a Retirement Income Guarantee Rider)
Ten Years or
Five Years Since Fund
Variable Sub-Account One Year Inception*
<S> <C> <C> <C>
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 101.70% N/A 12.28%
Putnam Diversified Income -1.93% 5.00% 3.23%
The George Putnam Fund -4.05% N/A -0.34%
Putnam Global Asset Allocation 7.92% 14.92% 10.26%
Putnam Global Growth 62.18% 25.17% 15.28%
Putnam Growth and Income -2.21% 17.26% 11.95%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -7.57% N/A 0.69%
Putnam High Yield 2.06% 6.83% 8.85%
Putnam Income -5.77% 5.37% 5.64%
Putnam International Growth 55.40% N/A 27.96%
Putnam International Growth and Income 20.29% N/A 16.24%
Putnam International New Opportunities 97.48% N/A 30.57%
Putnam Investors 25.84% N/A 25.60%
Putnam Money Market 0.26% 3.14% 3.03%
Putnam New Opportunities 64.31% 30.51% 27.99%
Putnam New Value -3.39% N/A 5.94%
Putnam OTC & Emerging Growth 120.71% N/A 60.79%
Putnam Research 23.58% N/A 36.74%
Putnam Small Cap Value N/A N/A 1.11%
Putnam Utilities Growth and Income -4.41% 15.03% 10.62%
Putnam Vista 48.07% N/A 28.83%
Putnam Voyager 53.41% 29.30% 20.11%
- --------------
* Each of the above Funds (Class IB shares) corresponding to the Variable
Sub-Accounts commenced operations on April 30, 1998, except for the Putnam
VT Diversified Income, Growth and Income, and International Growth Funds,
which commenced operations on April 6, 1998, the Putnam VT Research Fund,
which commenced operations September 30, 1998, the Putnam VT Small Cap
Value Fund, which commenced operations April 30, 1999, and the Putnam VT
American Government Fund and Putnam VT Growth Opportunities Fund, which
commenced operations on January 31, 2000. For periods prior to the
inception dates of the Funds (Class IB shares, the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares) are as follows:
Global Asset Allocation, Growth and Income, Income, High Yield, Money
Market, and Voyager commenced operations on February 1, 1988; Global
Growth commenced operations on May 1, 1990; Utilities Growth and
Income commenced operations on May 1, 1992; Diversified Income
commenced operations on September 15, 1993; New Opportunities
commenced operations on May 2, 1994; Asia Pacific Growth commenced
operations on May 1, 1995; International Growth, International Growth
and Income, International New Opportunities, New Value and Vista
commenced operations on January 2, 1997; The George Putnam Fund of
Boston, Health Sciences, Investors and OTC & Emerging Growth commenced
operations on April 30, 1998.
<PAGE>
(With the Enhanced Beneficiary Protection Option)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 101.39% N/A 12.11%
Putnam Diversified Income -2.08% 4.84% 3.07%
The George Putnam Fund -4.20% N/A -0.49%
Putnam Global Asset Allocation 7.75% 14.74% 10.10%
Putnam Global Growth 62.10% 25.01% 15.11%
Putnam Growth and Income -2.36% 17.08% 11.78%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -7.71% N/A 0.53%
Putnam High Yield 1.90% 6.67% 8.68%
Putnam Income -5.92% 5.21% 5.47%
Putnam International Growth 55.16% N/A 27.77%
Putnam International Growth and Income 20.11% N/A 16.06%
Putnam International New Opportunities 97.18% N/A 30.37%
Putnam Investors 25.64% N/A 25.40%
Putnam Money Market 0.10% 2.99% 2.87%
Putnam New Opportunities 64.06% 30.31% 27.80%
Putnam New Value -3.54% N/A 5.77%
Putnam OTC & Emerging Growth 120.37% N/A 60.55%
Putnam Research 23.39% N/A 36.53%
Putnam Small Cap Value N/A N/A 0.95%
Putnam Utilities Growth and Income -4.56% 14.85% 10.45%
Putnam Vista 47.84% N/A 28.63%
Putnam Voyager 53.17% 29.10% 19.93%
- --------------
* Performance figures have been adjusted to reflect the current charge for
the Enhanced Beneficiary Protection Option as if that feature had been
available throughout the periods shown.
** The inception dates for the Funds appear in the first footnote to the
preceding table. For periods prior to the inception dates of the Funds
(Class IB shares), the performance shown is based on the historical
performance of the Funds (Class IA shares), adjusted to reflect the current
expenses of the Funds (Class IB shares). The inception dates for the Funds
(Class IA shares) are shown on the first note to the first table above.
<PAGE>
(With Retirement Income Guarantee Rider 2)*
Ten Years or
Five Years Since Fund
Variable Sub-Account One Year Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 101.38% N/A 11.88%
Putnam Diversified Income -2.25% 4.70% 2.84%
The George Putnam Fund -4.37% N/A -0.72%
Putnam Global Asset Allocation 7.60% 14.66% 9.97%
Putnam Global Growth 61.87% 24.89% 14.96%
Putnam Growth and Income -2.52% 17.03% 11.68%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -7.88% N/A 0.28%
Putnam High Yield 1.74% 6.54% 8.58%
Putnam Income -6.09% 5.07% 5.33%
Putnam International Growth 55.08% N/A 27.66%
Putnam International Growth and Income 19.98% N/A 15.94%
Putnam International New Opportunities 97.16% N/A 30.22%
Putnam Investors 25.52% N/A 25.23%
Putnam Money Market -0.05% 2.81% 2.66%
Putnam New Opportunities 63.99% 30.27% 27.74%
Putnam New Value -3.71% N/A 5.63%
Putnam OTC & Emerging Growth 120.39% N/A 60.37%
Putnam Research 23.26% N/A 36.20%
Putnam Small Cap Value N/A N/A 0.63%
Putnam Utilities Growth and Income -4.73% 14.78% 10.32%
Putnam Vista 47.75% N/A 28.54%
Putnam Voyager 53.09% 29.06% 19.88%
- --------------
* Performance figures have been adjusted to reflect the current charge for
Retirement Income Guarantee Rider 2 as if that feature had been available
throughout the periods shown. For purposes of computing the Rider fee, we
assumed that Income Base B applied, that there were no additional purchase
payments or withdrawals, and that the Contract Issue Date coincided with
the inception date of the Fund (Class IA shares).
** The inception dates for the Funds appear in the first footnote to the first
table under Adjusted Historical Total Returns. For periods prior to the
inception dates of the Funds (Class IB shares), the performance shown is
based on the historical performance of the Funds (Class IA shares),
adjusted to reflect the current expenses of the Funds (Class IB shares).
The inception dates for the Funds (Class IA shares) are shown on the first
note to the first table above.
<PAGE>
(With the Enhanced Beneficiary Protection Option and Retirement Income Guarantee Rider 2)*
Five Years Ten Years or
Variable Sub-Account One Year Since Fund
Inception**
Putnam American Government Income N/A N/A N/A
Putnam Asia Pacific Growth 101.08% N/A 11.71%
Putnam Diversified Income -2.40% 4.54% 2.68%
The George Putnam Fund -4.52% N/A -0.87%
Putnam Global Asset Allocation 7.43% 14.48% 9.80%
Putnam Global Growth 61.78% 24.72% 14.79%
Putnam Growth and Income -2.68% 16.85% 11.51%
Putnam Growth Opportunities N/A N/A N/A
Putnam Health Sciences -8.03% N/A 0.13%
Putnam High Yield 1.58% 6.38% 8.42%
Putnam Income -6.24% 4.91% 5.17%
Putnam International Growth 54.84% N/A 27.47%
Putnam International Growth and Income 19.79% N/A 15.77%
Putnam International New Opportunities 96.86% N/A 30.02%
Putnam Investors 25.32% N/A 25.03%
Putnam Money Market -0.20% 2.65% 2.50%
Putnam New Opportunities 63.74% 30.07% 27.54%
Putnam New Value -3.86% N/A 5.47%
Putnam OTC & Emerging Growth 120.05% N/A 60.12%
Putnam Research 23.07% N/A 35.99%
Putnam Small Cap Value N/A N/A 0.48%
Putnam Utilities Growth and Income -4.88% 14.61% 10.15%
Putnam Vista 47.53% N/A 28.35%
Putnam Voyager 52.86% 28.86% 19.69%
- --------------
</TABLE>
*Performance figures have been adjusted to reflect the current charge
for the Enhanced Beneficiary Protection Option and Retirement Income Guarantee
Rider 2 as if those features had been available throughout the periods shown.
** The inception dates for the Funds appear in the first footnote to
the first table under Adjusted Historical Total Returns. For periods prior to
the inception dates of the Funds (Class IB shares), the performance shown is
based on the historical performance of the Funds (Class IA shares), adjusted to
reflect the current expenses of the Funds (Class IB shares). The inception dates
for the Funds (Class IA shares) are shown on the first note to the preceding
table.
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
The financial statements of Allstate Life Insurance Company ("Allstate" or
"Depositor") and Allstate Life Insurance Company Separate Account A
("Separate Account") are filed herewith in Part B of this Registration
Statement.
24B. EXHIBITS
The following exhibits, correspond to those required by paragraph (b) of item 24
as to exhibits in Form N-4:
(1) Resolution of the Board of Directors of Allstate Life Insurance Company
authorizing establishment of the Allstate Life Insurance Company Separate
Account A*
(2) Not Applicable
(3)(a) Form of Underwriting Agreement with ALFS, Inc. (formerly known as
Allstate Life Financial Services, Inc.)**
(b) Underwriting Agreement with Allstate Distributors, L.L.C
(4) Form of Putnam Allstate Advisor Preferred Contract****
(5) Form of Application for Putnam Allstate Advisor Preferred Contract****
(6)(a) Articles of Incorporation of Allstate Life Insurance Company*
(b) By-laws of Allstate Life Insurance Company*
(7) Not applicable
(8) Participation Agreement among Putnam Variable Trust, Putnam Mutual Funds
Corp., and Allstate Life Insurance Company
(9) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company regarding the legality of the
securities being registered
(10)(a) Independent Auditors' Consent
(b) Consent of Freedman, Levy, Kroll & Simonds
(11) Not applicable
(12) Not applicable
(13) Performance Data Calculations
(14) Not applicable
(99)(a) Powers of Attorney for Thomas J. Wilson, II, Kevin R. Slawin, Casey J.
Sylla, Marla G. Friedman and John C. Lounds*
(b) Power of Attorney for Samuel H. Pilch***
- -----------
* Incorporated herein by reference to the initial filing, dated February
9, 1999, of Registrant's Form N-4 registration statement (File No.
333-72017).
** Incorporated herein by reference to Pre-Effective Amendment No. 1, dated
April 16, 1999, to Registrant's Form N-4 registration statement (File No.
333-72017).
*** Incorporated herein by reference to Post-Effective Amendment No. 1, dated
August 31, 1999, to Registrant's Form N-4 registration statement (File No.
333-72017).
**** Previously filed in the initial filing of this Form N-4 registration
statement (File No. 333-31288) on February 29, 2000.
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Name and Principal Positions and Offices with
Business Address* Depositor of the Separate Account
<TABLE>
<CAPTION>
<S> <C>
Thomas J. Wilson, II Director, Chairman of the Board and President
Michael J. Velotta Director, Senior Vice President, Secretary and General Counsel
Marla G. Friedman Director and Senior Vice President
John L. Carl Director
Richard I. Cohen Director
T. O'Neal Douglas Director
Margaret G. Dyer Director and Senior Vice President
Edward M. Liddy Director
John C. Lounds Director and Senior Vice President
Robert W. Pike Director
J. Kevin McCarthy Director and Senior Vice President
Kevin R. Slawin Director and Senior Vice President
Casey J. Sylla Director and Chief Investment Officer
Charles F. Thalheimer Director and Vice President
B. Eugene Wraith Director and Vice President
John R. Hunter Vice President
Karen C. Gardner Vice President
Patricia A. Coffey Vice President
Moses Hardie Vice President
Mary J. McGinn Vice President and Assistant Secretary
Leonard G. Sherman Vice President
Steven C. Verney Vice President
James P. Zils Treasurer
Samuel H. Pilch Vice President and Controller
C. Nelson Strom Assistant Vice President and Corporate Actuary
Patricia W. Wilson Assistant Vice President, Assistant Secretary and Assistant Treasurer
Denis Bailey Assistant Vice President
Richard L. Baker Vice President
Lisa Cochrane Assistant Vice President
D. Steven Boger Assistant Vice President
Lawrence W. Dahl Assistant Vice President
Sarah R. Donahue Assistant Vice President
Thomas W. Evans Assistant Vice President
Douglas F. Gaer Assistant Vice President
Brent H. Hamann Assistant Vice President
Ronald A. Johnson Assistant Vice President
Robert L. Park Assistant Vice President
Barry S. Paul Assistant Vice President and Assistant Treasurer
Robert E. Rich Assistant Vice President
Linda L. Shumilas Assistant Vice President
Robert E. Transon Assistant Vice President
Timothy N. Vander Pas Assistant Vice President
G. Craig Whitehead Assistant Vice President
Laura R. Zimmerman Assistant Vice President
Joanne M. Derrig Assistant Secretary, Assistant General Counsel
and Chief Compliance Officer
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
</TABLE>
*The principal business address of the foregoing directors and officers is 3100
Sanders Road, Northbrook, Illinois 60062.
<PAGE>
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Information in response to this item is incorporated by reference to the Form
10-K Annual Report of The Allstate Corporation (File #1-11840).
27. NUMBER OF CONTRACT OWNERS
As of the date of this amended Registration Statement, the offering of the
Putnam Allstate Advisor Preferred Variable Annuity had not commenced.
28. INDEMNIFICATION
The by-laws of Allstate provide for the indemnification of its directors,
officers and controlling persons, against expenses, judgments, fines and amounts
paid in settlement as incurred by such person, if such person acted properly. No
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of a duty to Allstate, unless a court determines
such person is entitled to such indemnity.
Insofar as indemnification for liability arising out of the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
ALFS, Inc. (formerly known as Allstate Life Financial Services, Inc.) ("ALFS")
will serve as principal underwriter of the Separate Account until May 1, 2000.
Beginning May 1, 2000, Allstate Distributors, L.L.C. ("Allstate Distributors"),
will serve as principal underwriter of the Separate Account. ALFS also serves as
principal underwriter to the following other investment companies:
Allstate Financial Advisors Separate Account I
Allstate Life of New York Separate Account A
Glenbrook Life and Annuity Company Separate Account A
Glenbrook Life and Annuity Company Variable Annuity Account
Glenbrook Life Variable Life Separate Account A
Glenbrook Life Multi-Manager Variable Account
Glenbrook Life Scudder Variable Account (A)
Glenbrook Life AIM Variable Life Separate Account A
Lincoln Benefit Life Variable Annuity Account
Lincoln Benefit Life Variable Account
Charter National Variable Annuity Account
Charter National Variable Account
Intramerica Variable Annuity Account
Allstate Distributors serves as principal underwriter to the following
investment companies:
Allstate Life Insurance Company Separate Account A
Allstate Life of New York Variable Separate Account A
29B. PRINCIPAL UNDERWRITER
Name and Principal Business Positions and Offices
Address* with Underwriter
Allstate Life Financial Services, Inc.
<TABLE>
<CAPTION>
<S> <C>
Thomas J. Wilson, II Director
Kevin R. Slawin Director
Michael J. Velotta Director and Secretary
John R. Hunter Director, President and Chief Executive Officer
Janet M. Albers Vice President and Controller
Brent H. Hamann Vice President
Andrea J. Schur Vice President
Terry R. Young General Counsel and Assistant Secretary
James P. Zils Treasurer
Lisa A. Burnell Assistant Vice President and Compliance Officer
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
Emma M. Kalaidjian Assistant Secretary
Carol S. Watson Assistant Secretary
Barry S. Paul Assistant Treasurer
</TABLE>
*The principal business address of the foregoing directors and officers is 3100
Sanders Road, Northbrook, Illinois 60062.
Allstate Distributors
<TABLE>
<CAPTION>
<S> <C>
John R. Hunter Executive Committee Member, Chairperson, Managing Director
Brent H. Hamann Executive Committee Member, Secretary, General Manager
Jane M. Mancini Executive Committee Member, Chairperson
Vincent Esposito Executive Committee Member
Thomas Turpin Executive Committee Member
Eric Levy Secretary
Albert Dal Porto Senior Vice President
Karen C. Gardner Vice President
Evelyn Cooper Vice President
Lisa A. Burnell Chief Compliance Officer
Janet M. Albers Controller
Michael J. Velotta Assistant Secretary
James P. Zils Treasurer
Barry S. Paul Assistant Treasurer
</TABLE>
*The principal business address of Jane M. Mancini, Vincent Esposito, Thomas
Turpin and Eric Levy is One Post Office Square, Boston, Massachusetts 02109. The
principal business address of every other foregoing committee member and officer
is 3100 Sanders Road, Northbrook, IL 60062.
29C. COMPENSATION OF PRINCIPAL UNDERWRITER
Not applicable.
30. LOCATION OF ACCOUNTS AND RECORDS
Allstate is located at 3100 Sanders Road, Northbrook, Illinois 60062. The
principal underwriter of the Separate Account (ALFS until May 1, 2000; Allstate
Distributors beginning May 1, 2000) is located at 3100 Sanders Road, Northbrook,
Illinois 60062. Each company maintains those accounts and records required to be
maintained pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None.
32. UNDERTAKINGS
Registrant promises to file a post-effective amendment to the Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in the Registration Statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be accepted.
Registrant furthermore agrees to include either 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 a toll-free number
included in the prospectus that the applicant can use to request for a Statement
of Additional Information. Finally, Registrant agrees to deliver any Statement
of Additional Information and any financial statements required to be made
available under this Form N-4 promptly upon written or oral request.
33. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE
Allstate represents that it is relying upon the letter, dated November 28, 1988,
from the Commission staff to the American Council of Life Insurance and that it
intends to comply with the provisions of paragraphs 1-4 of that letter.
34. REPRESENTATION REGARDING CONTRACT EXPENSES
Allstate represents that the fees and charges deducted under the Contracts
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 Allstate under the Contracts. Allstate bases its representation
on its assessment of all of the facts and circumstances, including such relevant
factors as: the nature and extent of such services, expenses and risks; the need
for Allstate to earn a profit; the degree to which the Contracts include
innovative features; and the regulatory standards for exemptive relief under the
Investment Company Act of 1940 used prior to October 1996, including the range
of industry practice. This representation applies to all Contracts sold pursuant
to this Registration Statement, including those sold on the terms specifically
described in the prospectus contained herein, or any variations therein, based
on supplements, endorsements, or riders to any Contracts or prospectus, or
otherwise.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant, Allstate Life Insurance Company Separate Account A, has caused
this amended Registration Statement to be signed on its behalf, in the Township
of Northfield, State of Illinois, on the 27th day of April, 2000.
ALLSTATE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT A
(REGISTRANT)
BY: ALLSTATE LIFE INSURANCE COMPANY
(DEPOSITOR)
By:/s/ Michael J. Velotta
---------------------------------
Michael J. Velotta
Senior Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been signed below by the following directors and officers of Allstate Life
Insurance Company on the 27th day of April, 2000.
<TABLE>
<CAPTION>
<S> <C>
*/THOMAS J. WILSON, II Chairman of the Board and President, Director
- ----------------------
Thomas J. Wilson, II (Principal Executive Officer)
/s/MICHAEL J. VELOTTA Senior Vice President, Secretary, General
- ---------------------
Michael J. Velotta Counsel and Director
*/KEVIN R. SLAWIN Senior Vice President and Director
- ------------------
Kevin R. Slawin (Principal Financial Officer)
*/CASEY J. SYLLA Chief Investment Officer and Director
- ----------------
Casey J. Sylla
*/SAMUEL H. PILCH Vice President and Controller
- -----------------
Samuel H. Pilch (Principal Accounting Officer)
*/MARLA G. FRIEDMAN Senior Vice President and Director
- -------------------
Marla G. Friedman
*/JOHN C. LOUNDS Senior Vice President and Director
- -----------------
John C. Lounds
</TABLE>
*/ By Michael J. Velotta, pursuant to Powers of Attorney previously filed.
<PAGE>
Exhibit Index
Exhibit No. Exhibit
(3)(b) Form of Underwriting Agreement with Allstate Distributors, L.L.C.
(8) Participation Agreement among Putnam Variable Trust Putnam Mutual Funds
Corp. And Allstate Life Insurance Company
(9) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company regarding the legality of the
securities being registered
(10)(a) Independent Auditors' Consent
(10)(b) Consent of Freedman, Levy, Kroll & Simonds
(13) Performance Data Calculations
Exhibit 3(b)
PRINCIPAL UNDERWRITING AGREEMENT
This Principal Underwriting Agreement (hereinafter "Agreement") is made and
entered into as of this ___ day of ______, 1999, by and between Allstate Life
Insurance Company ( "Allstate Life") a life insurance company organized under
the laws of the state of Illinois on its own and on behalf of each separate
account of Allstate Life set forth on Attachment A, as such Attachment may be
amended from time (each such account herein referred to as the "Account"), and
Allstate Distributors, L.L.C. ("Distributors"), a limited liability corporation
organized under the laws of the state of Delaware.
In consideration of the mutual promises and covenants exchanged by the parties
in this Agreement, Allstate Life grants to Distributors the right to be and
Distributors agrees to serve as Principal Underwriter for the sale of variable
insurance products and other insurance and investment products during the term
of this Agreement and the parties agree as follows:
ARTICLE I
DISTRIBUTORS DUTIES AND OBLIGATIONS
1.01 Distributors, a broker-dealer registered under the Securities Exchange Act
of 1934 (the "1934 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD"), will serve as principal underwriter and distributor for
the variable insurance contracts (contracts listed in Attachment A , herein, the
"Contracts") which will be issued by Allstate Life.
1.02 Distributors shall be duly registered or licensed or otherwise qualified
under the insurance and securities laws of the states in which the Contracts are
authorized for sale.
1.03 Distributors proposes to act as principal underwriter on an agency best
efforts basis in the marketing and distribution of the Contracts. Distributors
will use its best efforts to provide information and marketing assistance to
licensed insurance agents and broker-dealers ("Selling Broker-Dealers") on a
continuing basis.
1.04 Distributors shall be responsible for compliance with the requirements of
state broker-dealer regulations and the 1934 Act as each applies to Distributors
in connection with its duties as distributor of the Contracts. Moreover,
Distributors shall conduct its affairs in accordance with the Rules of Fair
Practice of the NASD.
1.05 As a principal underwriter, Distributors shall permit the offer and sale of
Contracts to the public only by and through persons who are appropriately
licensed under the securities laws and who are appointed in writing by Allstate
Life to be authorized insurance agents (unless such persons are exempt from such
licensing and appointment requirements);
1.06 To the extent that any statements made in the Registration Statement, or
any amendment or supplement thereto, are made in reliance upon and in conformity
with written information furnished to Allstate Life by Distributors expressly
for use therein, such statements will, when they become effective or are filed
with the SEC, as the case may be, conform in all material respects to the
requirements of the 1933 Act and the rules and regulations of the Commission
thereunder, and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
1.07 Subject to agreement with Allstate Life, Distributors may enter into
selling agreements with broker-dealers which are registered under the 1934 Act
and/or authorized by applicable law or exemptions to sell the Contracts. Any
such contractual arrangement is expressly made subject to this Agreement, and
Distributors will at all times be responsible to Allstate Life for supervision
of compliance with federal securities laws regarding distribution of the
Contracts.
ARTICLE II
ALLSTATE LIFE'S DUTIES AND OBLIGATIONS
2.01 Allstate Life is validly existing as a stock life insurance company in good
standing under the laws of the State of Illinois, and has been duly qualified
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business.
2.02 Allstate Life represents that:
a) Registration Statements for each of the Contracts identified in
Attachment A shall have been filed with the Securities and Exchange
Commission ("SEC") in the form previously delivered to Distributors and
that copies of any and all amendments thereto will be forwarded to
Distributors at the time that they are filed with the SEC;
b) Each Account is a duly organized, validly existing separate account,
established by resolution of the Board of Directors of Allstate Life,
on the date shown for such Account on Attachment A, for the purpose of
issuing the Contracts; and
c) Allstate Life has registered or will register the Account as a unit
investment trust under the Investment Company Act of 1940 (the "1940
Act").
2.03 The Registration Statement and any further amendments or supplements
thereto will, when they became effective, conform in all material respects to
the requirements of the Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations of the Commission under such Acts and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall
not apply to any statement or omission made in reliance upon and in conformity
with information furnished in writing to Allstate Life by Distributors expressly
for use therein.
2.04 Allstate Life shall be responsible for the licensing and appointing of
registered representatives of Selling Broker-Dealers as required by state
insurance laws.
ARTICLE III
RECORDS
3.01 Distributors shall keep, in a manner and form approved by Allstate Life and
in accordance with Rules 17a-3 and 17a-4 under the 1934 Act, accurate records
and books of account as required to be maintained by a registered broker-dealer,
acting as principal underwriter, of all transactions entered into on behalf of
Allstate Life with respect its activities under this Agreement. Distributors
shall make such records of account available for inspection by the SEC and
Allstate Life shall have the right to inspect, make copies of or take possession
of such records and books of account at any time upon demand.
3.02 Subject to applicable SEC or NASD restrictions, Allstate Life will send
confirmations of Contract transactions to Contract owners. Allstate Life will
make such confirmations and records of transactions available to Distributors
upon request. Allstate Life will also maintain Contract Owner records on behalf
of Distributors to the extent permitted by applicable securities law.
3.03 Distributors and Allstate Life shall keep confidential the records, books
of account and other information concerning the Contract owners, annuitants,
insureds, beneficiaries or any persons who have rights arising out of the
Contracts. Distributors or Allstate Life may disclose the Records and such
information only if the other has authorized disclosure and if the disclosure is
required by applicable law. In the event Distributors or Allstate Life is served
with a subpoena, court order or demand from a regulatory organization which
mandates disclosure of the Records or such information, such party must notify
the other and allow such other party sufficient time to authorize disclosure or
to intervene in the judicial proceeding or matter so as to protect its interest.
3.04 Unless otherwise agreed to, no party to this Agreement shall voluntarily
disclose to any third party other than Putnam Investments, Inc. and its
affiliates, any books, reference manuals, instructions, information or data
which concern the other party's business and which are exchanged during the
negotiation and performance of this Agreement. When this Agreement terminates or
expires, the parties shall return all such books, reference manuals,
instructions, information or data in their possession.
3.05 For the purpose of determining the other party's compliance with this
Agreement, each party to this Agreement shall have reasonable access during
normal business hours to any records and books of account which concern the
Contracts and which are maintained by the other party.
3.06 Both Allstate Life and Distributors agree to keep all information required
by applicable laws, to maintain the books, accounts and records as to clearly
and accurately disclose the precise nature and details of the transaction and to
assist one another in the timely perpetration of any reports required by law.
3.07 Distributors and Allstate Life shall furnish to the other any reports and
information which the other may request for the purpose of meeting reporting and
recordkeeping requirements under the laws of Illinois or any other state or
jurisdiction.
ARTICLE IV
SALES MATERIALS
4.01 Distributors will utilize the currently effective prospectus relating to
the Contracts in connections with its underwriting, marketing and distribution
efforts. As to other types of sales material, Distributors hereby agrees and
will require Selling Broker-Dealers to agree to use only sales materials which
have been authorized for use by Allstate Life, which conform to the requirements
of federal and state laws and regulations, and which have been filed where
necessary with the appropriate regulatory authorities including the NASD.
4.02 Distributors will not distribute any prospectus, sales literature or any
other printed matter or material in the underwriting and distribution or any
Contract if, to the knowledge of Distributors, any of the foregoing misstates
the duties, obligation or liabilities of Allstate Life or Distributors.
ARTICLE V
COMPENSATION
5.01 Allstate Life shall pay to Distributors commissions described in Attachment
B , attached hereto and made a part hereof. Distributors shall not be obligated
to pay another broker/dealer for sales of Contracts pursuant to its selling
agreement with such broker/dealer until Distributors has received its
commissions for the sale of such Contracts from Allstate Life.
5.02 In compensating Distributors, Allstate Life reserves the right to withhold
commissions from Distributors if it determines Distributors is not paying
commissions to its Selling Broker-Dealers in accordance with applicable laws.
5.03 Distributors shall direct how commissions are paid, provided such direction
is in accordance with applicable law.
5.04 Allstate Life agrees to pay Distributors for direct expenses incurred on
behalf of Allstate Life. Such direct expenses shall include, but not be limited
to, the costs of goods and services purchased from outside vendors, travel
expenses and state and federal regulatory fees incurred on behalf of Allstate
Life.
5.05 Distributors shall present a statement after the end of the quarter showing
the apportionment of services rendered and the direct expenses incurred.
Settlements are due and payable within thirty days.
ARTICLE VI
UNDERWRITING TERMS
6.01 Distributors makes no representations or warranties regarding the number of
contracts to be sold by Selling Broker-Dealer and the registered representatives
of Selling Broker-Dealer or the amount to be paid thereunder. Distributors does,
however, represent that it will actively engage in its duties under this
Agreement on a continuous basis while there is an effective Registration
Statement with the SEC.
6.02 Distributors will use its best efforts to ensure that the Contracts shall
be offered for sale by registered broker-dealers and registered representatives
(who are duly licensed as insurance agents) on the terms described in the
currently effective prospectus describing such Contracts.
6.03 Allstate Life will use its best efforts to assure that the Contracts are
continuously registered under the 1933 Act (and under any applicable state "blue
sky" laws) and to file for approval under state insurance laws when necessary.
ARTICLE VII
LEGAL AND REGULATORY ACTIONS
7.01 Allstate Life agrees to advise Distributors immediately of:
a) any request by the SEC for amendment of the Registration Statement or for
additional information relating to the Contracts;
b) the issuance by the SEC of any stop order suspending the effectiveness of
the Registration Statement relating to the Contracts or the initiation of
any proceedings for that purpose; and
c) the happening of any known material event which makes untrue any statement
made in the Registration Statement relating to the Contracts or which
requires the making of a change therein in order to make any statement made
therein not misleading.
7.02 Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
7.03 During any legal action or inquiry, Allstate Life will furnish to
Distributors such information with respect to the Contracts in such form and
signed by such of its officers as Distributors may reasonably request and will
warrant that the statements therein contained when so signed are true and
correct.
7.04 If changes in insurance laws or regulations could reasonably be expected to
affect the sales and administration of Contracts under this Agreement, Allstate
Life shall notify Distributors within a reasonable time after Allstate Life
receives notice of those changes. Such notice shall be in writing except, if
circumstances so require, the notice may be communicated by telephone or
facsimile and confirmed in writing.
ARTICLE VIII
TERMINATION
8.01 This Agreement shall terminate at either Party's option, without penalty:
(a) without case, on not less than 180 days' prior written notice to
the other Party; (b) upon the mutual written consent of the Parties;
(c) upon written notice of one Party to the other in the event of
bankruptcy or insolvency of the
Party to which notice is given;
(d) upon the suspension or revocation of any material license or
permit held by a Party by the appropriate governmental agency
or authority; however, such termination shall extend only to
the jurisdiction(s) where the Party is prohibited from doing
business; or
(e) upon the finding by any regulatory body in a formal proceeding
of material wrongdoing by a Party regarding its duties under
this Agreement.
8.02 If either Party breaches this Agreement or is in default in the performance
of any of its duties and obligations hereunder (the "defaulting Party"), the
non-defaulting Party may give written notice thereof to the defaulting Party,
and if such breach or default is not remedied within 60 days after such written
notice is given, then the non-defaulting Party may terminate this Agreement by
giving 30 days' prior written notice of such termination to the defaulting
Party.
8.03 The Parties agree to cooperate and give reasonable assistance to one
another in effecting an orderly transition following termination.
ARTICLE IX
INDEMNIFICATION
9.01 Scope of Indemnification
(a) Each Party (the "Indemnifying Party") agrees to indemnify and hold
harmless the other (the "Indemnified Party") against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damage or expense, and reasonable counsel
fees incurred in connection therewith) arising by reason of any person's
acquiring any Contract, which may be based upon any law:
(i) on the ground that the Indemnifying Party, its directors,
officers, employees, agents, or subcontractors failed to comply with
any applicable laws and regulations in connection with its rendering of
duties or services under this Agreement; or
(ii) on the ground of negligence or misconduct by the
Indemnifying Party or its directors, officers, employees, agents, or
subcontractors, in the performance of its duties hereunder, or breach
by the Indemnifying Party of any representation or warranty hereunder.
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director, officer and employee of the
Indemnified Party and any person controlling or controlled by the Indemnified
Party within the meaning of Section 15 of the Securities Act of 1933 or Section
20 of the 1934 Act.
(b) In no case shall the indemnity in favor of the Indemnified Party,
including such controlling or controlled persons, be deemed to protect the
Indemnified Party against any liability to the Indemnifying Party to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement. In addition, in no case
shall the Indemnifying Party be liable under its indemnity agreement contained
in Section 4.1(a) hereof with respect to any claim made against an Indemnified
Party, unless the Indemnified Party shall have notified the Indemnifying Party
in writing by fax or overnight mail giving information of the nature of the
claim within two (2) business days after the summons or other first legal
process shall have been served upon the Indemnified Party (or after the
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Indemnifying Party of any such claim shall not
relieve it from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of its indemnity agreement
contained in Section 4.1(a) hereof. The Indemnifying Party shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce such liability. If the Indemnifying
Party elects to assume the defense, such defense shall be conducted by counsel
chosen by it and satisfactory to the Indemnified Party. In the event the
Indemnifying Party elects to assume the defense of any such suit and retains
such counsel, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, but, in case the Indemnifying Party does not
elect to assume the defense of any such suit, it shall reimburse the Indemnified
Party for the reasonable fees and expense of any counsel retained by the
Indemnified Party. The Indemnifying Party shall promptly notify the Indemnified
Party of the commencement of any litigation or proceedings against the
Indemnifying Party or any of its officers, directors, employees or
subcontractors in connection with the issuance or sale of the Contracts.
9.02 Limitation on Liability
In no event shall either Party be liable for lost profits or for
exemplary, special, punitive or consequential damages alleged to have been
sustained by the other Party, as opposed to a third party.
9.03 Injunctive Relief
The Parties each agree that monetary damages may be an inadequate
remedy in the event of a breach by either Party of any of the covenants in this
Agreement, and that any such breach by a Party may cause the other Party great
and irreparable injury and damage. Accordingly, nothing in this Agreement shall
limit a Party's right to obtain equitable relief when appropriate.
<PAGE>
ARTICLE X
GENERAL PROVISIONS
10.01 This Agreement shall be subject to the laws of the state of Illinois.
10.02 This Agreement, along with any schedules attached hereto and incorporated
herein by reference, may be amended from time to time by mutual agreement and
consent of the under signed parties.
10.03 In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed, to be effective as of _____________, 1999
Allstate Life Insurance Company
(and the Account(s) set forth on Attachment A)
By: ___________________________ ______________________
Title Date
Allstate Distributors, L. L. C.
By: ___________________________ _______________________
Title Date
<PAGE>
ATTACHMENT A
Separate Account Effective Date Contract Form #
-------------- -------- ------
<PAGE>
ATTACHMENT B
Distributors shall be entitled to remuneration for its services as shown below
for all variable annuity purchase payments received on policies issued by
Allstate Life. Such remuneration shall be reduced by the amount of commissions
payable to broker/dealers receiving compensation pursuant to selling agreements
with Allstate Life and Distributors.
- ------------------------ ----------------------- ---------------------
Schedule A
- ------------------------ ----------------------- ---------------------
Issue Age: 0-80 7.30%
- ------------------------ ----------------------- ---------------------
- ------------------------ ----------------------- ---------------------
81-85 5.80%
- ------------------------ ----------------------- ---------------------
- ------------------------ ----------------------- ---------------------
86-90 4.30%
- ------------------------ ----------------------- ---------------------
<TABLE>
<CAPTION>
- ------------------------ ----------------------- ---------------------
<S> <C> <C> <C>
Schedule B Up-Front Trail
- ------------------------ ----------------------- --------------------- --------------------
Issue Age: 0-80 6.30% 25 bps
- ------------------------ ----------------------- --------------------- --------------------
- ------------------------ ----------------------- --------------------- --------------------
81-85 5.05% 25 bps
- ------------------------ ----------------------- --------------------- --------------------
- ------------------------ ----------------------- --------------------- --------------------
86-90 3.80% 25 bps
- ------------------------ ----------------------- --------------------- --------------------
- ----------------------------------------- -------------------------------------------------------------------
Charge Back Schedule
- ----------------------------------------- -------------------------------------------------------------------
Full or partial Withdrawal 100% Charge Back due to "Right to Cancel" provision.
- ----------------------------------------- -------------------------------------------------------------------
- ----------------------------------------- -------------------------------------------------------------------
Early Annuitization Year 1 Only, Charge Back to Annuitization Level Commission (TBD)
- ----------------------------------------- -------------------------------------------------------------------
An additional 1% override is available up-front to Distributors on sales for the
first $1 billion or through 5/1/2000, if earlier.
</TABLE>
Exhibit 8
PARTICIPATION AGREEMENT
Among
PUTNAM VARIABLE TRUST
PUTNAM MUTUAL FUNDS CORP.
and
ALLSTATE LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 1st day of March, 1999,
among Allstate Life Insurance Company (the "Company"), an Illinois corporation,
on its own behalf and on behalf of each separate account of the Company set
forth on Schedule A hereto, as such Schedule may be amended from time to time
(each such account hereinafter referred to as the "Account"), PUTNAM VARIABLE
TRUST (the "Trust"), a Massachusetts business trust, and PUTNAM MUTUAL FUNDS
CORP. (the "Underwriter"), a Massachusetts corporation.
WHEREAS, the Trust is an open-end diversified management investment company
and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into Participation Agreements with the Trust and
the Underwriter (the "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each designated a "Fund" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission ("SEC"), dated December 29, 1993 (File No. 812-8612), granting the
variable annuity and variable life insurance separate accounts participating in
the Trust exemptions from the provisions of sections 9(a), 13(a), 15(a) and
15(b) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of the Participating Insurance
Companies (the "Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and the sale of its shares is registered under the
Securities Act of 1933, as amended (the " 1933 Act"); and
WHEREAS, the Company has registered or will register certain variable life
and/or variable annuity contracts under the 1933 Act and any applicable state
securities and insurance law; and
WHEREAS, each Account is a duly organized, validly existing separate
account, established by resolution of the Board of Directors of the Company, on
the date shown for such Account on Schedule A hereto, to set aside and invest
assets attributable to one or more variable insurance contracts (the
"Contracts"); and
WHEREAS, the Company has registered or will register the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended (the " 1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in certain Funds
("Authorized Funds") on behalf of each Account to fund certain of the Contracts
and the Underwriter is authorized to sell such shares to unit investment trusts
such as each Account at net asset value;
NOW, THEREFORE, in consideration of the promises herein, the Company, the
Trust and the Underwriter agree as follows:
ARTICLE 1. Sale of Trust Shares
1.1 The Underwriter agrees, subject to the Trust's rights under Section 1.2
and otherwise under this Agreement, to sell to the Company those Trust shares
representing interests in Authorized Funds which each Account orders, executing
such orders on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the order for the shares of the Trust. For
purposes of this Section 1. 1, the Company shall be the designee of the Trust
for receipt of such orders from each Account and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust receives notice of such
order by 8:30 a.m. Eastern time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC. The initial Authorized Funds are set forth in Schedule B, as such
schedule is amended from time to time.
1.2 The Trust agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by the Company and its Accounts on
those days on which the Trust calculates its net asset value pursuant to rules
of the SEC and the Trust shall use reasonable efforts to calculate such net
asset value on each day on which the New York Stock Exchange is open for
trading. Notwithstanding the foregoing, the Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Fund to the Company or any other
person, or suspend or terminate the offering of shares of any Fund if such
action is required by law or by regulatory authorities having jurisdiction over
the Trust or if the Trustees determine, in the exercise of their fiduciary
responsibilities, that to do so would be in the best interests of shareholders.
1.3 The Trust and the Underwriter agree that shares of the Trust will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Fund will be sold to the general public.
1.4 The Trust shall redeem its shares in accordance with the terms of its
then current prospectus. For purposes of this Section 1.4, the Company shall be
the designee of the Trust for receipt of requests for redemption from each
Account and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such request for redemption by 8:30
a.m., Eastern time, on the next following Business Day.
1.5 The Company shall purchase and redeem the shares of Authorized Funds
offered by the then current prospectus of the Trust in accordance with the
provisions of such prospectus.
1.6 The Company shall pay for Trust shares on the next Business Day after
an order to purchase Trust shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
1.7 Issuance and transfer of the Trust's shares will be by book entry only.
Share certificates will not be issued to the Company or any Account. Shares
ordered from the Trust will be recorded as instructed by the Company to the
Underwriter in an appropriate title for each Account or the appropriate
sub-account of each Account.
1.8 The Underwriter shall furnish prompt notice (by wire or telephone,
followed by written confirmation) to the Company of the declaration of any
income, dividends or capital gain distributions payable on the Trust's shares.
The Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Fund shares in additional shares of that
Fund. The Company reserves the right to revoke this election and therefore to
receive all such income dividends and capital gain distributions in cash. The
Underwriter shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.9 The Underwriter shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably practical after
the Trust calculates its net asset value per share and each of the Trust and the
Underwriter shall use its best efforts to make such net asset value per share
available by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that
(a) at all times during the term of this Agreement the Contracts are
or will be registered under the 1933 Act; the Contracts will be issued and
sold in compliance in all material respects with all applicable laws and
the sale of the Contracts shall comply in all material respects with state
insurance suitability laws and regulations. The Company further represents
and warrants that it is an insurance company duly organized and in good
standing under applicable law and that it has legally and validly
established each Account prior to any issuance or sale thereof as a
separate account under applicable law and has registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts; and
(b) the Contracts are currently treated as endowment, annuity or life
insurance contracts, under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make every effort
to maintain such treatment and that it will notify the Trust and the
Underwriter immediately upon having a reasonable basis for believing that
the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.2 The Trust represents and warrants that
(a) it is lawfully organized and validly existing under the laws of
the Commonwealth of Massachusetts and that it does and will comply in all
material respects with the 1940 Act.
(b) it is currently qualified as a Regulated Investment Company under
Subchapter M of the Code, and that it will use its best efforts to maintain
such qualification (under Subchapter M or any successor provision) and that
it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify
in the future; and
(c) at all times during the term of this Agreement Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold by the Trust to the Company in compliance
with all applicable laws, subject to the terms of Section 2.4 below, and
the Trust is and shall remain registered under the 1940 Act. The Trust
shall amend the Registration Statement for its shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify the
shares for sale in accordance with the laws of the various states only if
and to the extent deemed advisable by the Trust or the Underwriter in
connection with their sale by the Trust to the Company and only as required
by Section 2.4;
2.3 The Underwriter represents and warrants that
(a) it is a member in good standing of the NASD;
(b) is registered as a broker-dealer with the SEC;
(c) it will sell and distribute the Trust shares in accordance with
all applicable securities laws, including without limitation, the 1933 Act,
the 1934 Act and the 1940 Act.
2.4 Notwithstanding any other provision of this Agreement, the Trust shall
be responsible for the registration and qualification of its shares and of the
Trust itself under the laws of any jurisdiction only in connection with the
sales of shares directly to the Company through the Underwriter. The Trust shall
not be responsible, and the Company shall take full responsibility, for
determining any jurisdiction in which any qualification or registration of Trust
shares or the Trust by the Trust may be required in connection with the sale of
the Contracts or the indirect interest of any Contract in any shares of the
Trust and advising the Trust thereof at such time and in such manner as is
necessary to permit the Trust to comply.
2.5 The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 The Trust shall provide such documentation (including a camera-ready
copy of its prospectus) and other assistance as is reasonably necessary in order
for the Company once each year (or more frequently if the prospectus for the
Trust is amended) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one or more documents. The cost of printing
prospectuses for the Contracts and the Trust for delivery in connection with the
offering and sale of new Contracts will be at the Underwriter's expense.
Printing of prospectuses for other purposes will be at the Company's expense.
The Company will bear the expense of mailing prospectuses to new purchasers of
Contracts.
3.2 The Trust's Prospectus shall state that the Statement of Additional
Information for the Trust is available from the Underwriter or its designee (or
in the Trust's discretion, the Prospectus shall state that such Statement is
available from the Trust), and the Underwriter (or the Trust), at its expense,
shall print and provide such Statement free of charge to the Company and free of
charge to any owner of a Contract or prospective owner who requests such
Statement.
3.3 The Trust, at its expense, shall provide the Company with copies of its
reports to shareholders, proxy material and other communications to shareholders
in such quantity as the Company shall reasonably require for distribution to the
Contract owners, such distribution shall be at the expense of the Trust,
provided that the Trust and the Company shall bear their proportional share of
the distribution expenses of any report containing both the Trust's and the
Accounts' financial reports.
3.4 The Company shall vote all Trust shares as required by law and the
Shared Funding Exemptive Order. The Company reserves the right to vote Trust
shares held in any separate account in its own right, to the extent permitted by
law and the Shared Funding Exemptive Order. The Company shall be responsible for
assuring that each of its separate accounts participating in the Trust
calculates voting privileges in a manner consistent with all legal requirements
and the Shared Funding Exemptive Order.
3.5 The Trust will comply with all applicable provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Trust is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further,
the Trust will act in accordance with the SEC's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 Without limiting the scope or effect of Section 4.2 hereof, the Company
shall furnish, or shall cause to be furnished, to the Underwriter each piece of
sales literature or other promotional material (as defined hereafter) in which
the Trust, its investment adviser or the Underwriter is named at least 10 days
prior to its use. No such material shall be used if the Underwriter objects to
such use within five Business Days after receipt of such material.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Trust shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in annual or semi-annual reports or proxy statements for the
Trust, or in sales literature or other promotional material approved by the
Trust or its designee or by the Underwriter, except with the written permission
of the Trust or the Underwriter or the designee of either or as is required by
law.
4.3 The Underwriter or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material prepared by the Underwriter in which the Company
and/or its separate account(s) is named at least 10 days prior to its use. No
such material shall be used if the Company or its designee objects to such use
within five Business Days after receipt of such material.
4.4 Neither the Trust nor the Underwriter shall give any information or
make any representations on behalf of the Company concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the written permission of the Company or as is required by
law.
4.5 For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e. any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all registered representatives.
ARTICLE V. Fees and Expenses
5.1 Except as provided in Article VI, the Trust and Underwriter shall pay
no fee or other compensation to the Company under this agreement.
5.2 All expenses incident to performance by the Trust under this Agreement
shall be paid by the Trust. The Trust shall bear the expenses for the cost of
registration and qualification of the Trust's shares, preparation and filing of
the Trust's prospectus and registration statement, proxy materials and reports,
setting the prospectus and shareholder reports in type, setting in type and
printing the proxy materials, distributing reports and proxy statements to
contractholders (provided that if the reports are combined with the Company's
reports the Trust and the Company shall bear such share of the expense as its
proportion of the joint report bears the the whole combined report) and the
preparation of all statements and notices required by any federal or state law,
in each case as may reasonably be necessary for the performance by it of its
obligations under this Agreement.
5.3 The Company shall bear the expenses of printing the Trust's prospectus
(other than those used in connection with the offering and sales of the
Contracts) and of distributing the Trust's prospectuses to new purchasers of
Contracts.
Article VI. Service Fees
6.1 The Underwriter shall pay the Company a service fee (the "Service Fee")
on shares of the Funds held in the Accounts at the annual rates specified in
Schedule B (excluding any accounts for the Company's own corporate retirement
plans), subject to Section 6.2 hereof.
6.2 The Company understands and agrees that all Service Fee payments are
subject to the limitations contained in each Fund's Distribution Plan, which may
be varied or discontinued at any time, and understands and agrees that it will
cease to receive such Service Fee payments with respect to a Fund if the Fund
ceases to pay fees to the Underwriter pursuant to its Distribution Plan.
6.3 (a) The Company's failure to provide the services described in Section
6.4 will render it ineligible to receive Service Fees; and
(b) the Underwriter may, without the consent of the Company, amend
this Article VI to change the amount of Service Fees or the terms on which
Service Fees are paid or to terminate further payments of Service Fees upon
written notice to the Company.
6.4 The Company will provide the following services to the Contract Owners
purchasing Fund shares:
(i) Maintaining regular contact with Contract owners and assisting in
answering inquiries concerning the Funds;
(ii) Assisting in the process of printing and distributing shareholder
reports, prospectuses and other sale and service literature provided by the
Underwriter;
(iii) Assisting the Underwriter and its affiliates in the
establishment and maintenance of Contract owner and shareholder accounts
and records;
(iv) Assisting Contract owners in effecting administrative changes,
such as exchanging shares in or out of the Funds;
(v) Assisting in processing purchase and redemption transactions; and
(vi) Providing any other information or services as the Contract
owners or the Underwriter may reasonably request.
The Company will support the Underwriter's marketing and servicing efforts
by granting reasonable requests for visits to the Company's offices by
representatives of the Underwriter.
6.5 The Company's performance under the service requirement set forth in
this Agreement will be evaluated from time to time by the Underwriter's
monitoring of redemption levels of Fund shares held in any Account and by such
other methods as the Underwriter deems appropriate.
ARTICLE VII. Diversification
7.1 The Trust shall cause each Authorized Fund to maintain a diversified
pool of investments that would, if such Fund were a segregated asset account,
satisfy the diversification provisions of Treas. Reg. ss. 1.817-5(b)(1) or (2).
7.2 The Trust shall annually send the Company a certificate, in the form
mutually agreed, certifying as to its compliance with Section 7.1.
ARTICLE VIII. Potential Conflicts
8.1 The Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Trust. A material irreconcilable conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities law or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Fund are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
The Trust shall promptly inform the Company if the Trustees determine that a
material irreconcilable conflict exists and the implications thereof.
8.2 The Company will report any potential or existing conflicts of which it
is aware to the Trustees. The Company will assist the Trustees in carrying out
their responsibilities under the Shared Funding Exemptive Order, by providing
the Trustees with all information reasonably necessary for the Trustees to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Trustees whenever Contract owner voting
instructions are disregarded.
8.3 If it is determined by a majority of the Trustees, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall to the extent reasonably practicable (as determined by a majority
of the disinterested Trustees), take, at the Company's expense, whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, up to
and including: (1) withdrawing the assets allocable to some or all of the
separate accounts from the Trust or any Fund and reinvesting such assets in a
different investment medium, including (but not limited to) another Fund of the
Trust, or submitting the question whether such segregation should be implemented
to a vote of all affected contract owners and, as appropriate, segregating the
assets of any appropriate group (i.e., annuity contract owners, life insurance
contract owners, or variable contract owners of one or more Participating
Insurance Companies) that votes in favor of such segregation, or offering to the
affected contract owners the option of making such a change; and (2)
establishing a new registered management investment company or managed separate
account.
8.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in one or more Authorized Funds of the Trust and terminate this
Agreement with respect to such Account; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested Trustees. No charge or penalty shall be imposed as a result of
such withdrawal. Any such withdrawal and termination must take place within six
(6) months after the Trust gives written notice that this provision is being
implemented, and until the end of that six month period the Underwriter and
Trust shall, to the extent permitted by law and any exemptive relief previously
granted to the Trust, continue to accept and implement orders by the Company for
the purchase (or redemption) of shares of the Trust.
8.5 If a material irreconcilable conflict arises because of a particular
state insurance regulator's decision applicable to the Company to disregard
Contract owner voting instructions and that decision represents a minority
position that would preclude a majority vote, then the Company may be required,
at the Trust's direction, to withdraw the affected Account's investment in one
or more Authorized Funds of the Trust; provided, however, that such withdrawal
and termination shall be limited to the extent required by the foregoing
material irreconcilable conflict as determined by a majority of the
disinterested Trustees. Any such withdrawal and termination must take place
within six (6) months after the Trust gives written notice that this provision
is being implemented, unless a shorter period is required by law, and until the
end of the foregoing six month period (or such shorter period if required by
law), the Underwriter and Trust shall, to the extent permitted by law and any
exemptive relief previously granted to the Trust, continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Trust. No charge or penalty will be imposed as a result of such withdrawal.
8.6 For purposes of Sections 8.3 through 8.6 of this Agreement, a majority
of the disinterested Trustees shall determine whether any proposed action
adequately remedies any material irreconcilable conflict. Neither the Trust nor
the Underwriter shall be required to establish a new funding medium for the
Contracts, nor shall the Company be required to do so, if an offer to do so has
been declined by vote of a majority of Contract owners materially adversely
affected by the material irreconcilable conflict. In the event that the Trustees
determine that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's investment
in one or more Authorized Funds of the Trust and terminate this Agreement within
six (6) months (or such shorter period as may be required by law or any
exemptive relief previously granted to the Trust) after the Trustees inform the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested Trustees. No charge or penalty will be imposed as a result of such
withdrawal.
8.7 The responsibility to take remedial action in the event of the
Trustees' determination of a material irreconcilable conflict and to bear the
cost of such remedial action shall be the obligation of the Company, and the
obligation of the Company set forth in this Article VIII shall be carried out
with a view only to the interests of Contract owners.
8.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Trust and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 8.1, 8.2, 8.3, 8.4 and 8.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
8.9 The Company has reviewed the Shared Funding Exemption Order and hereby
assumes all obligations referred to therein which are required, including,
without limitation, the obligation to provide reports, material or data as the
Trustees may request as conditions to such Order, to be assumed or undertaken by
the Company.
ARTICLE IX. Indemnification
9.1. Indemnification by the Company
9.1 (a). The Company shall indemnify and hold harmless the Trust and the
Underwriter and each of the Trustees, directors of the Underwriter, officers,
employees or agents of the Trust or the Underwriter and each person, if any, who
controls the Trust or the Underwriter within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
9.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company which consent may not
be unreasonably withheld) or litigation (including reasonable legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation or at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Trust's shares or the
Contracts or the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a Registration
Statement, Prospectus or Statement of Additional Information for the
Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Trust for use in the Registration Statement, Prospectus or Statement
of Additional Information for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations contained in the
Trust's Registration Statement or Prospectus, or in sales literature for
Trust shares not supplied by the Company, or persons under its control) or
wrongful conduct of the Company or persons under its control, with respect
to the sale or distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement, Prospectus, or sales
literature of the Trust or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon
information furnished to the Trust or the Underwriter by or on behalf of
the Company; or
(iv) arise out of or result from any breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or
result from any other breach of this Agreement by the Company, as limited
by and in accordance with the provisions of Sections 9.1(b) and 9.1(c)
hereof.
9.1 (b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party to the extent such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Trust, whichever is applicable.
9.1 (c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), on the basis of which the Indemnified
Party should reasonably know of the availability of indemnity hereunder in
respect of such claim but failure to notify the Company of any such claim shall
not relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate, at its own
expense, in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Company to such Indemnified Party of
the Company's election to assume the defense thereof the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
9.1 (d) The Underwriter shall promptly notify the Company of the
commencement of any litigation or proceedings against the Trust or the
Underwriter in connection with the issuance or sale of the Trust Shares or the
Contracts or the operation of the Trust.
9. 1 (e) The provisions of this Section 9.1 shall survive any termination
of this Agreement.
9.2 Indemnification by the Underwriter
9.2 (a) The Underwriter shall indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act and any director, officer, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section 9.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter which consent may not
be unreasonably withheld) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
regulation or at common law, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Trust's shares or the Contracts or the
performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the sales literature of
the Trust prepared by or approved by the Trust or Underwriter (or any
amendment or supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity
with information furnished to the Underwriter or Trust by or on behalf of
the Company for use in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Trust
shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations contained in the
Registration Statement, Prospectus, Statement of Additional Information or
sales literature for the Contracts not supplied by the Underwriter or
persons under its control) of the Underwriter or persons under its control,
with respect to the sale or distribution of the Contracts or Trust shares;
or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement, Prospectus,
Statement of Additional Information or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Underwriter; or
(iv) arise out of or result from any breach of any representation
and/or warranty made by the Underwriter in this Agreement or arise out of
or result from any other breach of this Agreement by the Underwriter or
result from a breach of Article VII; as limited by and in accordance with
the provisions of Sections 9.2(b) and 9.2(c) hereof.
9.2 (b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party for willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to each Company or the Account, whichever is
applicable.
9.2 (c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent) on the basis of which the Indemnified
Party should reasonably know of the availability of indemnity hereunder in
respect of such claim, but failure to notify the Underwriter of any such claim
shall not relieve the Underwriter from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Underwriter will be entitled to participate, at its
own expense, in the defense thereof. The Underwriter also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Underwriter to such Indemnified Party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof other
than reasonable costs of investigation.
9.2 (d) The Company shall promptly notify the Underwriter of the Trust of
the commencement of any litigation or proceedings against it or any of its
officers or directors, in connection with the issuance or sale of the Contracts
or the operation of each Account.
9.2 (e) The provisions of this Section 9.2 shall survive any termination of
this Agreement.
9.3 Indemnification by the Trust
9.3 (a) The Trust shall indemnify and hold harmless the Company, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act and any director, officer, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section 9.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Trust which consent may not be
unreasonably withheld) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
operations of the Trust and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in a Registration
Statement, Prospectus and Statement of Additional Information of the Trust
(or any amendment or supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Underwriter or Trust by
or on behalf of the Company for use in the Registration Statement,
Prospectus, or Statement of Additional Information for the Trust (or any
amendment or supplement) or otherwise for use in connection with the sale
of the Contracts or Trust shares; or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Trust (including Section 7.1 hereof), as limited by and in accordance with
the provisions of Sections 9.3(b) and 9.3(c) hereof.
9.3 (b) The Trust shall not be liable under the indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party for willful misfeasance, bad faith, or
gross negligence or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company, the Trust, the
Underwriter or each Account, whichever is applicable.
9.3 (c) The Trust shall not be liable under this indemnification provision
with respect to any claim made against any Indemnified Party unless such
Indemnified Party shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent) on the basis of which the Indemnified Party should reasonably
know of the availability of indemnity hereunder in respect of such claim, but
failure to notify the Trust of any such claim shall not relieve the Trust from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, the Trust
will be entitled to participate, at its own expense, in the defense thereof. The
Trust also shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnified Party named in the action. After
notice from the Trust to such Indemnified Party of the Trust's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Trust will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
9.3 (d) The Company agrees promptly to notify the Trust of the commencement
of any litigation or proceedings against it or any of its officers or directors,
in connection with this Agreement, the issuance or sale of the Contracts or the
sale or acquisition of shares of the Trust.
9.3 (e) The provisions of this Section 9.3 shall survive any termination of
this Agreement.
ARTICLE X. Applicable Law
10.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
10.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE XI. Termination
11.1.This Agreement shall terminate:
(a) upon the second anniversary of the termination of the Joint
Venture Agreement, dated March 1, 1999, between Putnam Investments, Inc.
and the Allstate Corporation.
(b) at the option of the Trust upon 180 days prior written notice,
upon a decision by the Trustees of the Trust that termination of the
Agreement is in the best interests of shareholders of the Trust; or
(c) with respect to any Account, upon requisite vote of the Contract
owners having an interest in such Account (or any subaccount) to substitute
the shares of another investment company for the corresponding Fund shares
of the Trust in accordance with the terms of the Contracts for which those
Fund shares had been selected to serve as the underlying investment media.
The Company will give 90 days' prior written notice to the Trust of the
date of any proposed vote to replace the Trust's shares; or
(d) with respect to any Authorized Fund, upon 60 days advance written
notice from the Underwriter to the Company, upon a decision by the
Underwriter to cease offering shares of the Fund for sale.
11.2. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1 (a) may be exercised for any
reason or for no reason.
11.3 No termination of this Agreement shall be effective unless and until
the party terminating this Agreement gives prior written notice to all other
parties to this Agreement of its intent to terminate, which notice shall set
forth the basis for such termination. Such prior written notice shall be given
in advance of the effective date of termination as required by this Article XI.
11.4 Notwithstanding any termination of this Agreement, subject to Section
1.2 of this Agreement, the Trust and the Underwriter shall, at the option of the
Company, continue to make available additional shares of the Trust pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, subject to Section 1.2
of this Agreement, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Trust, redeem investments in the Trust and/or
invest in the Trust upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 11.4 shall not apply to
any termination under Article VIII and the effect of such Article VIII
termination shall be governed by Article VIII of this Agreement.
11.5 The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in either Account) except (i) as necessary to implement Contract owner initiated
transactions, or (ii) as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application (hereinafter referred
to as a "Legally required Redemption"). Upon request, the Company will promptly
furnish to the Trust and the Underwriter an opinion of counsel for the Company,
reasonably satisfactory to the Trust, to the effect that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Contracts, subject to Section 1.2
of this Agreement, the Company shall not prevent Contract owners from allocating
payments to an Authorized Fund that was otherwise available under the Contracts
without first giving the Trust or the Underwriter 90 days notice of its
intention to do.
ARTICLE XII. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Trust:
One Post Office Square
Boston, MA 02109
Attention: John R. Verani
If to the Underwriter:
One Post Office Square
Boston, MA 02109
Attention: General Counsel
If to the Company:
Allstate Life Insurance Company
3100 Sanders Road, Suite J5B
Northbrook, IL 60062
Attention: Michael J. Velotta, Esq.
<PAGE>
ARTICLE XIII. Miscellaneous
13.1 A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of or arising out of this instrument, including without limitation Article VII,
are not binding upon any of the Trustees or shareholders individually but
binding only upon the assets and property of the Trust.
13.2 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
13.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
13.5 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall pertmit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
13.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
13.7 Notwithstanding any other provision of this Agreement, the obligations
of the Trust and the Underwriter are several and, without limiting in any way
the generality of the foregoing, neither such party shall have any liability for
any action or failure to act by the other party, or any person acting on such
other party's behalf.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
ALLSTATE LIFE INSURANCE COMPANY
By its authorized officer,
Name: /s/BRENT HAMANN
Title: Asst. Vice President
PUTNAM VARIABLE TRUST
By its authorized officer,
Name: /s/ JOHN R. VERANI
Title: Vice President
PUTNAM MUTUAL FUNDS CORP.
By its authorized officer,
Name: /s/ ERIC S. LEVY
Title: Senior Vice President
Exhibit 9
ALLSTATE LIFE INSURANCE COMPANY
LAW AND REGULATION DEPARTMENT
3100 Sanders Road, J5B
Northbrook, Illinois 60062
Direct Dial Number 847-402-2400
Facsimile 847-402-4371
Michael J. Velotta
Senior Vice President, Secretary
and General Counsel
April 27, 2000
TO: ALLSTATE LIFE INSURANCE COMPANY
NORTHBROOK, ILLINOIS 60062
FROM: MICHAEL J. VELOTTA
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
RE: FORM N-4 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940
FILE NOS. 333-31288 and 811-09227
PUTNAM ALLSTATE ADVISOR PREFERRED VARIABLE ANNUITY
With reference to the above-mentioned Registration Statement on Form N-4
("Registration Statement") filed by Allstate Life Insurance Company (the
"Company"), as depositor, and Allstate Life Insurance Company Separate Account
A, as registrant, with the Securities and Exchange Commission covering the
Flexible Premium Deferred Variable Annuity Contracts described therein, I have
examined such documents and such law as I have considered necessary and
appropriate, and on the basis of such examination, it is my opinion that as of
April 26, 2000:
1. The Company is duly organized and existing under the laws of the
State of Illinois and has been duly authorized to do business by the
Director of Insurance of the State of Illinois.
2. The securities registered by the Registration Statement when issued
will be valid, legal and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the caption "Legal Matters" in the
Prospectus constituting a part of the Registration Statement.
Sincerely,
/s/ MICHAEL J. VELOTTA
- -------------------------
Michael J. Velotta
Senior Vice President, Secretary and
General Counsel
Exhibit 10(a) INDEPENDENT AUDITORS' CONSENT
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-31288 of Allstate Life Insurance Company Seperate Account A of
Allstate Life Insurance Company on Form N-4 of our report dated February 25,
2000 relating to the consolidated financial statements and the related financial
statement schedules of Allstate Life Insurance Company, and our report dated
March 27, 2000 relating to the financial statements of Allstate Life Insurance
Company Seperate Account A, appearing in the Statement of Additional Information
(which is incorporated by reference in the Prospectus of Allstate Life Insurance
Company Seperate Account A of Allstate Life Insurance Company), which is part of
such Registration Statement, and to the reference to us under the heading
"Experts" in such Statement of Additional Information.
Chicago, Illinois
April 26, 2000
<PAGE>
Exhibit 10(b)
FREEDMAN, LEVY, KROLL & SIMONDS
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in the Form N-4 Registration Statement
(File No. 333-31288) of Allstate Life Insurance Company Separate Account A.
/s/ Freedman, Levy, Kroll & Simonds
- -----------------------------------
FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
April 26, 2000
Exhibit 13
<TABLE>
<CAPTION>
Putnam "L" without RIG
Asia Pacific Growth
36160 NO. YEARS 1
TO
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 4.909021 203.7066
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 203.7066 2037.066
1
FORMULA: 1000*(1+T)= 2037.066 - (1000 * 0.02)
= 2017.066
T = 1.017066
R = 1.017066
Diversified Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.993382 100.0662
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 100.0662 1000.662
1
FORMULA: 1000*(1+T)= 1000.662 - (1000 * 0.02)
= 980.6622
T = -0.01934
R = -0.01934
George Putnam Fund of Boston
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.20997 97.94351
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 97.94351 979.4351
1
FORMULA: 1000*(1+T)= 979.4351 - (1000 * 0.02)
= 959.4351
T = -0.04056
R = -0.04056
Global Asset Allocation
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.097389 109.9216
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 109.9216 1099.216
1
FORMULA: 1000*(1+T)= 1099.216 - (1000 * 0.02)
= 1079.216
T = 0.079216
R = 0.079216
Global Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.090517 164.1897
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 164.1897 1641.897
1
FORMULA: 1000*(1+T)= 1641.897 - (1000 * 0.02)
= 1621.897
T = 0.621897
R = 0.621897
Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.0212 99.78843
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 99.78843 997.8843
1
FORMULA: 1000*(1+T)= 997.8843 - (1000 * 0.02)
= 977.8843
T = -0.02212
R = -0.02212
Health Sciences
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.58992 94.42941
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 94.42941 944.2941
1
FORMULA: 1000*(1+T)= 944.2941 - (1000 * 0.02)
= 924.2941
T = -0.07571
R = -0.07571
High Yield
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.609692 104.0616
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 104.0616 1040.616
1
FORMULA: 1000*(1+T)= 1040.616 - (1000 * 0.02)
= 1020.616
T = 0.020616
R = 0.020616
Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.3928 96.2205
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 96.2205 962.205
1
FORMULA: 1000*(1+T)= 962.205 - (1000 * 0.02)
= 942.205
T = -0.0578
R = -0.0578
International Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.353162 157.4019
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 157.4019 1574.019
1
FORMULA: 1000*(1+T)= 1574.019 - (1000 * 0.02)
= 1554.019
T = 0.554019
R = 0.554019
International Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.176648 122.2995
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 122.2995 1222.995
1
FORMULA: 1000*(1+T)= 1222.995 - (1000 * 0.02)
= 1202.995
T = 0.202995
R = 0.202995
International New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 5.012878 199.4862
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 199.4862 1994.862
1
FORMULA: 1000*(1+T)= 1994.862 - (1000 * 0.02)
= 1974.862
T = 0.974862
R = 0.974862
Investors
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.822206 127.8412
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 127.8412 1278.412
1
FORMULA: 1000*(1+T)= 1278.412 - (1000 * 0.02)
= 1258.412
T = 0.258412
R = 0.258412
Money Market
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.77844 102.2658
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 102.2658 1022.658
1
FORMULA: 1000*(1+T)= 1022.658 - (1000 * 0.02)
= 1002.658
T = 0.002658
R = 0.002658
New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.012689 166.3149
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 166.3149 1663.149
1
FORMULA: 1000*(1+T)= 1663.149 - (1000 * 0.02)
= 1643.149
T = 0.643149
R = 0.643149
New Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.14145 98.60526
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 98.60526 986.0526
1
FORMULA: 1000*(1+T)= 986.0526 - (1000 * 0.02)
= 966.0526
T = -0.03395
R = -0.03395
OTC & Emerging Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 4.490012 222.7166
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 222.7166 2227.166
1
FORMULA: 1000*(1+T)= 2227.166 - (1000 * 0.02)
= 2207.166
T = 1.207166
R = 1.207166
Research
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.962602 125.5871
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 125.5871 1255.871
1
FORMULA: 1000*(1+T)= 1255.871 - (1000 * 0.02)
= 1235.871
T = 0.235871
R = 0.235871
Small Cap Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE!
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
1
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.02)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.24796 97.58036
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 97.58036 975.8036
1
FORMULA: 1000*(1+T)= 975.8036 - (1000 * 0.02)
= 955.8036
T = -0.0442
R = -0.0442
Vista
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.663264 150.0766
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 150.0766 1500.766
1
FORMULA: 1000*(1+T)= 1500.766 - (1000 * 0.02)
= 1480.766
T = 0.480766
R = 0.480766
Voyager
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.434393 155.4148
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 155.4148 1554.148
1
FORMULA: 1000*(1+T)= 1554.148 - (1000 * 0.02)
= 1534.148
T = 0.534148
R = 0.534148
</TABLE>
<TABLE>
<CAPTION>
Putnam "L" without RIG
Asia Pacific Growth
12/30/94
TO NO. YEARS 5
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 5.884266 0
FEE 12/31/96 0 6.304451 0
FEE 12/31/97 0 5.2837 0
FEE 12/31/98 0 4.909021 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Diversified Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.833661 127.6542
FEE 12/31/95 0 9.164446 0
FEE 12/31/96 0 9.79259 0
FEE 12/31/97 0 10.32599 0
FEE 12/31/98 0 9.993382 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 127.6542 1276.542
5
FORMULA: 1000*(1+T)= 1276.542
= 1276.542
T = 0.050043
R = 0.276542
George Putnam Fund of Boston
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 10.20997 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.988305 200.4689
FEE 12/31/95 0 6.10914 0
FEE 12/31/96 0 6.936533 0
FEE 12/31/97 0 8.151802 0
FEE 12/31/98 0 9.097389 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 200.4689 2004.689
5
FORMULA: 1000*(1+T)= 2004.689
= 2004.689
T = 0.149236
R = 1.004689
Global Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 3.253786 307.3343
FEE 12/31/95 0 3.696095 0
FEE 12/31/96 0 4.254112 0
FEE 12/31/97 0 4.77642 0
FEE 12/31/98 0 6.090517 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 307.3343 3073.343
5
FORMULA: 1000*(1+T)= 3073.343
= 3073.343
T = 0.251763
R = 2.073343
Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.509577 221.7503
FEE 12/31/95 0 6.054455 0
FEE 12/31/96 0 7.24886 0
FEE 12/31/97 0 8.837727 0
FEE 12/31/98 0 10.0212 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 221.7503 2217.503
5
FORMULA: 1000*(1+T)= 2217.503
= 2217.503
T = 0.172662
R = 1.217503
Health Sciences
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 10.58992 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
High Yield
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.184307 139.1923
FEE 12/31/95 0 8.34775 0
FEE 12/31/96 0 9.247729 0
FEE 12/31/97 0 10.38396 0
FEE 12/31/98 0 9.609692 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 139.1923 1391.923
5
FORMULA: 1000*(1+T)= 1391.923
= 1391.923
T = 0.068373
R = 0.391923
Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.695397 129.9478
FEE 12/31/95 0 9.102092 0
FEE 12/31/96 0 9.154404 0
FEE 12/31/97 0 9.766532 0
FEE 12/31/98 0 10.3928 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 129.9478 1299.478
5
FORMULA: 1000*(1+T)= 1299.478
= 1299.478
T = 0.053789
R = 0.299478
International Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 5.452375 0
FEE 12/31/98 0 6.353162 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
International Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 7.476127 0
FEE 12/31/98 0 8.176648 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
International New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 4.416088 0
FEE 12/31/98 0 5.012878 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Investors
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 7.822206 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Money Market
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 8.564548 116.7604
FEE 12/31/95 0 8.869972 0
FEE 12/31/96 0 9.153435 0
FEE 12/31/97 0 9.458185 0
FEE 12/31/98 0 9.77844 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 116.7604 1167.604
5
FORMULA: 1000*(1+T)= 1167.604
= 1167.604
T = 0.031476
R = 0.167604
New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.640805 378.6724
FEE 12/31/95 0 3.757084 0
FEE 12/31/96 0 4.064824 0
FEE 12/31/97 0 4.921339 0
FEE 12/31/98 0 6.012689 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 378.6724 3786.724
5
FORMULA: 1000*(1+T)= 3786.724
= 3786.724
T = 0.305127
R = 2.786724
New Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 9.718134 0
FEE 12/31/98 0 10.14145 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 4.490012 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Research
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 7.962602 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Small Cap Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 #VALUE! #VALUE!
FEE 12/31/98 0 #VALUE! #VALUE!
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.965254 201.3996
FEE 12/31/95 0 6.391486 0
FEE 12/31/96 0 7.268243 0
FEE 12/31/97 0 9.071815 0
FEE 12/31/98 0 10.24796 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 201.3996 2013.996
5
FORMULA: 1000*(1+T)= 2013.996
= 2013.996
T = 0.150302
R = 1.013996
Vista
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0 #VALUE! #VALUE!
FEE 12/31/96 0 #VALUE! #VALUE!
FEE 12/31/97 0 5.669309 0
FEE 12/31/98 0 6.663264 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE!
= #VALUE!
T = N/A
R = N/A
Voyager
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.766609 361.4533
FEE 12/31/95 0 3.82194 0
FEE 12/31/96 0 4.240001 0
FEE 12/31/97 0 5.267867 0
FEE 12/31/98 0 6.434393 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 361.4533 3614.533
5
FORMULA: 1000*(1+T)= 3614.533
= 3614.533
T = 0.293035
R = 2.614533
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" without RIG
Asia Pacific Growth
05/01/95
TO NO. YEARS 4.668036
12/31/99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
INIT DEPOSIT 05/01/95 1000 5.822136 171.7583
FEE 05/01/96 0 6.21889 0 0.02
FEE 05/01/97 0 6.144656 0 0.01
FEE 05/01/98 0 5.166593 0 0
05/01/99 0 5.749735 0 0
12/31/99 0 10 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
N/A 0 N/A 0 0
FEE N/A 0 N/A 0 0
FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 171.7583 1717.583
4.668036
FORMULA: 1000*(1+T)= 1717.583
= 1717.583
T = 0.122858
R = 0.717583
Diversified Income
09/15/93
TO NO. YEARS 6.291581
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09/15/93 1000 8.185757 122.1634
1 FEE 09/15/94 0 7.948202 0 0.02
2 FEE 09/15/95 0 8.76222 0 0.01
3 FEE 09/15/96 0 9.391335 0 0
4 09/15/97 0 10.15158 0 0
5 09/15/98 0 9.8408 0 0
6 09/15/99 0 9.805504 0 0
7 12/31/99 0 10 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 122.1634 1221.634
6.291581
FORMULA: 1000*(1+T)= 1221.634
= 1221.634
T = 0.03233
R = 0.221634
George Putnam Fund of Boston
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 9.95769 100.4249
1 FEE 04/30/99 0 10.78338 0 0.02
2 FEE 12/31/99 0 10 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 100.4249 1004.249
1.670089
FORMULA: 1000*(1+T)= 1004.249
= 994.249
T = -0.00345
R = -0.00575
Global Asset Allocation
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.76267 265.7687
FEE 12/31/90 0 3.701615 0
FEE 12/31/91 0 4.326351 0
FEE 12/31/92 0 4.515746 0
FEE 12/31/93 0 5.209692 0
FEE 12/31/94 0 4.988305 0
FEE 12/31/95 0 6.10914 0
FEE 12/31/96 0 6.936533 0
FEE 12/31/97 0 8.151802 0
FEE 12/31/98 0 9.097389 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 265.7687 2657.687
10
FORMULA: 1000*(1+T)= 2657.687 - (0.85 * 1000 * 0)
= 2657.687
T = 0.102682
R = 1.657687
Global Growth
05/01/90
TO NO. YEARS 9.667351
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/90 1000 2.528845 395.4374
1 FEE 05/01/91 0 2.538962 0 0.02
2 FEE 05/01/92 0 2.634264 0 0.01
3 FEE 05/01/93 0 2.814637 0 0
4 05/01/94 0 3.318071 0 0
5 05/01/95 0 3.260566 0 0
6 05/01/96 0 3.953842 0 0
7 05/01/97 0 4.428705 0 0
8 05/01/98 0 5.611953 0 0
9 05/01/99 0 6.309867 0 0
10 12/31/99 0 10 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 395.4374 3954.374
9.667351
FORMULA: 1000*(1+T)= 3954.374
= 3954.374
T = 0.152822
R = 2.954374
Growth & Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.232362 309.3713
FEE 12/31/90 0 3.23653 0
FEE 12/31/91 0 3.783734 0
FEE 12/31/92 0 4.078131 0
FEE 12/31/93 0 4.576157 0
FEE 12/31/94 0 4.509577 0
FEE 12/31/95 0 6.054455 0
FEE 12/31/96 0 7.24886 0
FEE 12/31/97 0 8.837727 0
FEE 12/31/98 0 10.0212 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 309.3713 3093.713
10
FORMULA: 1000*(1+T)= 3093.713 - (0.85 * 1000 * 0)
= 3093.713
T = 0.119562
R = 2.093713
Health Sciences
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 9.789038 102.1551
1 FEE 04/30/99 0 9.46249 0 0.02
2 FEE 12/31/99 0 10 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 102.1551 1021.551
1.670089
FORMULA: 1000*(1+T)= 1021.551
= 1011.551
T = 0.0069
R = 0.011551
High Yield
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 4.280869 233.5974
FEE 12/31/90 0 3.784513 0
FEE 12/31/91 0 5.382771 0
FEE 12/31/92 0 6.289369 0
FEE 12/31/93 0 7.384956 0
FEE 12/31/94 0 7.184307 0
FEE 12/31/95 0 8.34775 0
FEE 12/31/96 0 9.247729 0
FEE 12/31/97 0 10.38396 0
FEE 12/31/98 0 9.609692 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 233.5974 2335.974
10
FORMULA: 1000*(1+T)= 2335.974 - (0.85 * 1000 * 0)
= 2335.974
T = 0.088546
R = 1.335974
Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 5.776642 173.111
FEE 12/31/90 0 6.098838 0
FEE 12/31/91 0 7.02424 0
FEE 12/31/92 0 7.41477 0
FEE 12/31/93 0 8.102765 0
FEE 12/31/94 0 7.695397 0
FEE 12/31/95 0 9.102092 0
FEE 12/31/96 0 9.154404 0
FEE 12/31/97 0 9.766532 0
FEE 12/31/98 0 10.3928 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 173.111 1731.11
10
FORMULA: 1000*(1+T)= 1731.11 - (0.85 * 1000 * 0)
= 1731.11
T = 0.05641
R = 0.73111
International Growth
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 4.780694 209.1747
1 FEE 01/02/98 0 5.480454 0 0.02
2 FEE 01/02/99 0 6.353162 0 0.01
3 FEE 12/31/99 0 10 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 209.1747 2091.747
2.992471
FORMULA: 1000*(1+T)= 2091.747
= 2091.747
T = 0.279691
R = 1.091747
International Growth & Income
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 6.373516 156.8993
1 FEE 01/02/98 0 7.507804 0 0.02
2 FEE 01/02/99 0 8.176648 0 0.01
3 FEE 12/31/99 0 10 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 156.8993 1568.993
2.992471
FORMULA: 1000*(1+T)= 1568.993
= 1568.993
T = 0.162441
R = 0.568993
International New Opportunities
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 4.501127 222.1666
1 FEE 01/02/98 0 4.433384 0 0.02
2 FEE 01/02/99 0 5.012878 0 0.01
3 FEE 12/31/99 0 10 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 222.1666 2221.666
2.992471
FORMULA: 1000*(1+T)= 2221.666
= 2221.666
T = 0.305721
R = 1.221666
Investors
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 6.787468 147.3303
1 FEE 04/30/99 0 8.24078 0 0.02
2 FEE 12/31/99 0 10 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 147.3303 1473.303
1.670089
FORMULA: 1000*(1+T)= 1473.303
= 1463.303
T = 0.256022
R = 0.463303
Money Market
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 7.418123 134.805
FEE 12/31/90 0 7.865913 0
FEE 12/31/91 0 8.18165 0
FEE 12/31/92 0 8.321512 0
FEE 12/31/93 0 8.399995 0
FEE 12/31/94 0 8.564548 0
FEE 12/31/95 0 8.869972 0
FEE 12/31/96 0 9.153435 0
FEE 12/31/97 0 9.458185 0
FEE 12/31/98 0 9.77844 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 134.805 1348.05
10
FORMULA: 1000*(1+T)= 1348.05 - (0.85 * 1000 * 0)
= 1348.05
T = 0.030316
R = 0.34805
New Opportunities
05/02/94
TO NO. YEARS 5.664613
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/02/94 1000 2.470309 404.8077
1 FEE 05/02/95 0 2.824631 0 0.02
2 FEE 05/02/96 0 4.298116 0 0.01
3 FEE 05/02/97 0 3.974521 0 0
4 05/02/98 0 5.696983 0 0
5 05/02/99 0 6.389733 0 0
6 12/31/99 0 10 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 404.8077 4048.077
5.664613
FORMULA: 1000*(1+T)= 4048.077
= 4048.077
T = 0.279972
R = 3.048077
New Value
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 8.414057 118.8487
1 FEE 01/02/98 0 9.750223 0 0.02
2 FEE 01/02/99 0 10.14145 0 0.01
3 FEE 12/31/99 0 10 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 118.8487 1188.487
2.992471
FORMULA: 1000*(1+T)= 1188.487
= 1188.487
T = 0.059403
R = 0.188487
OTC & Emerging Growth
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 4.503377 222.0556
1 FEE 04/30/99 0 5.054763 0 0.02
2 FEE 12/31/99 0 10 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 222.0556 2220.556
1.670089
FORMULA: 1000*(1+T)= 2220.556
= 2210.556
T = 0.607968
R = 1.210556
Research
09/29/98
TO NO. YEARS 1.253936
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09/29/98 1000 6.709075 149.0518
1 FEE 09/29/99 0 8.239571 0 0.02
2 FEE 12/31/99 0 10 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 149.0518 1490.518
1.253936
FORMULA: 1000*(1+T)= 1490.518
= 1480.518
T = 0.367424
R = 0.480518
Small Cap Value
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/99 1000 9.732664 102.7468
1 FEE 12/31/99 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 102.7468 1027.468
0.670773
FORMULA: 1000*(1+T)= 1027.468
= 1007.468
T = 0.011154
R = 0.007468
Utilities Growth & Income
05/01/92
TO NO. YEARS 7.665982
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/92 1000 4.61286 216.7852
1 FEE 05/01/93 0 5.210646 0 0.02
2 FEE 05/01/94 0 5.129627 0 0.01
3 FEE 05/01/95 0 5.339181 0 0
4 05/01/96 0 6.481804 0 0
5 05/01/97 0 7.248349 0 0
6 05/01/98 0 9.399769 0 0
7 05/01/99 0 10.04017 0 0
8 12/31/99 0 10 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 216.7852 2167.852
7.665982
FORMULA: 1000*(1+T)= 2167.852
= 2167.852
T = 0.106201
R = 1.167852
Vista
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 4.68505 213.4449
1 FEE 01/02/98 0 5.631932 0 0.02
2 FEE 01/02/99 0 6.663264 0 0.01
3 FEE 12/31/99 0 10 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 213.4449 2134.449
2.992471
FORMULA: 1000*(1+T)= 2134.449
= 2134.449
T = 0.288363
R = 1.134449
Voyager
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 1.599055 625.3694
FEE 12/31/90 0 1.538441 0
FEE 12/31/91 0 2.207136 0
FEE 12/31/92 0 2.392 0
FEE 12/31/93 0 2.788292 0
FEE 12/31/94 0 2.766609 0
FEE 12/31/95 0 3.82194 0
FEE 12/31/96 0 4.240001 0
FEE 12/31/97 0 5.267867 0
FEE 12/31/98 0 6.434393 0
FEE 12/31/99 0 10 0
RESULTING VALUE 12/31/99 10 625.3694 6253.694
10
FORMULA: 1000*(1+T)= 6253.694 - (0.85 * 1000 * 0)
= 6253.694
T = 0.201195
R = 5.253694
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Base with RIG 2
Asia Pacific Growth
12/31/98 NO. YEARS 1
TO
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 36160 1000 4.909021 203.7066
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 203.3886 2033.886
1
FORMULA: 1000*(1+T)= 2033.886 - (1000 * 0.02)
= 2013.886
T = 1.013886
R = 1.013886
Diversified Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.993382 100.0662
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 99.74822 997.4822
1
FORMULA: 1000*(1+T)= 997.4822 - (1000 * 0.02)
= 977.4822
T = -0.02252
R = -0.02252
George Putnam Fund of Boston
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.20997 97.94351
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 97.62551 976.2551
1
FORMULA: 1000*(1+T)= 976.2551 - (1000 * 0.02)
= 956.2551
T = -0.04374
R = -0.04374
Global Asset Allocation
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.097389 109.9216
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 109.6036 1096.036
1
FORMULA: 1000*(1+T)= 1096.036 - (1000 * 0.02)
= 1076.036
T = 0.076036
R = 0.076036
Global Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.090517 164.1897
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 163.8717 1638.717
1
FORMULA: 1000*(1+T)= 1638.717 - (1000 * 0.02)
= 1618.717
T = 0.618717
R = 0.618717
Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.0212 99.78843
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 99.47043 994.7043
1
FORMULA: 1000*(1+T)= 994.7043 - (1000 * 0.02)
= 974.7043
T = -0.0253
R = -0.0253
Health Sciences
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.58992 94.42941
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 94.11141 941.1141
1
FORMULA: 1000*(1+T)= 941.1141 - (1000 * 0.02)
= 921.1141
T = -0.07889
R = -0.07889
High Yield
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.609692 104.0616
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 103.7436 1037.436
1
FORMULA: 1000*(1+T)= 1037.436 - (1000 * 0.02)
= 1017.436
T = 0.017436
R = 0.017436
Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.3928 96.2205
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 95.9025 959.025
1
FORMULA: 1000*(1+T)= 959.025 - (1000 * 0.02)
= 939.025
T = -0.06098
R = -0.06098
International Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.353162 157.4019
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 157.0839 1570.839
1
FORMULA: 1000*(1+T)= 1570.839 - (1000 * 0.02)
= 1550.839
T = 0.550839
R = 0.550839
International Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.176648 122.2995
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 121.9815 1219.815
1
FORMULA: 1000*(1+T)= 1219.815 - (1000 * 0.02)
= 1199.815
T = 0.199815
R = 0.199815
International New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 5.012878 199.4862
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 199.1682 1991.682
1
FORMULA: 1000*(1+T)= 1991.682 - (1000 * 0.02)
= 1971.682
T = 0.971682
R = 0.971682
Investors
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.822206 127.8412
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 127.5232 1275.232
1
FORMULA: 1000*(1+T)= 1275.232 - (1000 * 0.02)
= 1255.232
T = 0.255232
R = 0.255232
Money Market
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.77844 102.2658
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 101.9478 1019.478
1
FORMULA: 1000*(1+T)= 1019.478 - (1000 * 0.02)
= 999.478
T = -0.00052
R = -0.00052
New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.012689 166.3149
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 165.9969 1659.969
1
FORMULA: 1000*(1+T)= 1659.969 - (1000 * 0.02)
= 1639.969
T = 0.639969
R = 0.639969
New Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.14145 98.60526
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 98.28726 982.8726
1
FORMULA: 1000*(1+T)= 982.8726 - (1000 * 0.02)
= 962.8726
T = -0.03713
R = -0.03713
OTC & Emerging Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 4.490012 222.7166
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 222.3986 2223.986
1
FORMULA: 1000*(1+T)= 2223.986 - (1000 * 0.02)
= 2203.986
T = 1.203986
R = 1.203986
Research
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.962602 125.5871
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 125.2691 1252.691
1
FORMULA: 1000*(1+T)= 1252.691 - (1000 * 0.02)
= 1232.691
T = 0.232691
R = 0.232691
Small Cap Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE!
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
1
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.02)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.24796 97.58036
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 97.26236 972.6236
1
FORMULA: 1000*(1+T)= 972.6236 - (1000 * 0.02)
= 952.6236
T = -0.04738
R = -0.04738
Vista
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.663264 150.0766
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 149.7586 1497.586
1
FORMULA: 1000*(1+T)= 1497.586 - (1000 * 0.02)
= 1477.586
T = 0.477586
R = 0.477586
Voyager
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.434393 155.4148
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 155.0968 1550.968
1
FORMULA: 1000*(1+T)= 1550.968 - (1000 * 0.02)
= 1530.968
T = 0.530968
R = 0.530968
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Base with RIG 2
Asia Pacific Growth
12/30/94
TO NO. YEARS 5
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 34699 1000 #VALUE! #VALUE!
FEE 35064 3.18 5.884266 0.540424
FEE 35430 3.3708 6.304451 0.53467
FEE 35795 3.573048 5.2837 0.67624
FEE 12/31/98 3.787431 4.909021 0.771525
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Diversified Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.833661 127.6542
FEE 12/31/95 3.18 9.164446 0.346993
FEE 12/31/96 3.3708 9.79259 0.344219
FEE 12/31/97 3.573048 10.32599 0.346025
FEE 12/31/98 3.787431 9.993382 0.378994
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 125.8365 1258.365
5
FORMULA: 1000*(1+T)= 1258.365 - (1000 * 0.0)
= 1258.365
T = 0.047035
R = 0.258365
George Putnam Fund of Boston
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 10.20997 0.370954
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.988305 200.4689
FEE 12/31/95 3.18 6.10914 0.520532
FEE 12/31/96 3.3708 6.936533 0.485949
FEE 12/31/97 3.573048 8.151802 0.438314
FEE 12/31/98 3.787431 9.097389 0.416321
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 198.2063 1982.063
5
FORMULA: 1000*(1+T)= 1982.063 - (1000 * 0.0)
= 1982.063
T = 0.146631
R = 0.982063
Global Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 3.253786 307.3343
FEE 12/31/95 3.18 3.696095 0.860367
FEE 12/31/96 3.3708 4.254112 0.792363
FEE 12/31/97 3.573048 4.77642 0.74806
FEE 12/31/98 3.787431 6.090517 0.621857
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 303.9102 3039.102
5
FORMULA: 1000*(1+T)= 3039.102 - (1000 * 0.0)
= 3039.102
T = 0.248961
R = 2.039102
Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.509577 221.7503
FEE 12/31/95 3.18 6.054455 0.525233
FEE 12/31/96 3.3708 7.24886 0.465011
FEE 12/31/97 3.573048 8.837727 0.404295
FEE 12/31/98 3.787431 10.0212 0.377942
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 219.5763 2195.763
5
FORMULA: 1000*(1+T)= 2195.763 - (1000 * 0.0)
= 2195.763
T = 0.170354
R = 1.195763
Health Sciences
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 10.58992 0.357645
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
High Yield
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.184307 139.1923
FEE 12/31/95 3.18 8.34775 0.380941
FEE 12/31/96 3.3708 9.247729 0.3645
FEE 12/31/97 3.573048 10.38396 0.344093
FEE 12/31/98 3.787431 9.609692 0.394126
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 137.3071 1373.071
5
FORMULA: 1000*(1+T)= 1373.071 - (1000 * 0.0)
= 1373.071
T = 0.065464
R = 0.373071
Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.695397 129.9478
FEE 12/31/95 3.18 9.102092 0.34937
FEE 12/31/96 3.3708 9.154404 0.368216
FEE 12/31/97 3.573048 9.766532 0.365846
FEE 12/31/98 3.787431 10.3928 0.364428
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 128.0985 1280.985
5
FORMULA: 1000*(1+T)= 1280.985 - (1000 * 0.0)
= 1280.985
T = 0.050773
R = 0.280985
International Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 5.452375 0.65532
FEE 12/31/98 3.787431 6.353162 0.596149
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
International Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 7.476127 0.477928
FEE 12/31/98 3.787431 8.176648 0.463201
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
International New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 4.416088 0.809098
FEE 12/31/98 3.787431 5.012878 0.75554
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Investors
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 7.822206 0.48419
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Money Market
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 8.564548 116.7604
FEE 12/31/95 3.18 8.869972 0.358513
FEE 12/31/96 3.3708 9.153435 0.368255
FEE 12/31/97 3.573048 9.458185 0.377773
FEE 12/31/98 3.787431 9.77844 0.387325
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 114.8671 1148.671
5
FORMULA: 1000*(1+T)= 1148.671 - (1000 * 0.0)
= 1148.671
T = 0.028109
R = 0.148671
New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.640805 378.6724
FEE 12/31/95 3.18 3.757084 0.846401
FEE 12/31/96 3.3708 4.064824 0.829261
FEE 12/31/97 3.573048 4.921339 0.726032
FEE 12/31/98 3.787431 6.012689 0.629906
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 375.2393 3752.393
5
FORMULA: 1000*(1+T)= 3752.393 - (1000 * 0.0)
= 3752.393
T = 0.302752
R = 2.752393
New Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 9.718134 0.367668
FEE 12/31/98 3.787431 10.14145 0.373461
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 4.490012 0.843524
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Research
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 7.962602 0.475652
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Small Cap Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 #VALUE! #VALUE!
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.965254 201.3996
FEE 12/31/95 3.18 6.391486 0.497537
FEE 12/31/96 3.3708 7.268243 0.463771
FEE 12/31/97 3.573048 9.071815 0.393863
FEE 12/31/98 3.787431 10.24796 0.369579
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 199.2733 1992.733
5
FORMULA: 1000*(1+T)= 1992.733 - (1000 * 0.0)
= 1992.733
T = 0.147862
R = 0.992733
Vista
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 5.669309 0.630244
FEE 12/31/98 3.787431 6.663264 0.568405
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Voyager
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.766609 361.4533
FEE 12/31/95 3.18 3.82194 0.832038
FEE 12/31/96 3.3708 4.240001 0.795
FEE 12/31/97 3.573048 5.267867 0.678272
FEE 12/31/98 3.787431 6.434393 0.588623
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 358.1579 3581.579
5
FORMULA: 1000*(1+T)= 3581.579 - (1000 * 0.0)
= 3581.579
T = 0.290669
R = 2.581579
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Base with RIG 2
Asia Pacific Growth
05/01/95
TO NO. YEARS 4.668036
12/31/99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/95 1000 5.822136 171.7583
1 FEE 05/01/96 3.18 6.21889 0.511345 0.02
2 FEE 05/01/97 3.3708 6.144656 0.548574 0.01
3 FEE 05/01/98 3.573048 5.166593 0.691568 0
4 05/01/99 3.787431 5.749735 0.658714 0
5 12/31/99 4.014677 10 0.401468 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 168.9466 1689.466
4.668036
FORMULA: 1000*(1+T)= 1689.466
= 1689.466
T = 0.118895
R = 0.689466
Diversified Income
09/15/93
TO NO. YEARS 6.291581
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 09/15/93 1000 8.185757 122.1634
1 FEE 09/15/94 3.18 7.948202 0.40009 0.02
2 FEE 09/15/95 3.3708 8.76222 0.384697 0.01
3 FEE 09/15/96 3.573048 9.391335 0.380462 0
4 09/15/97 3.787431 10.15158 0.373088 0
5 09/15/98 4.014677 9.8408 0.407962 0
6 09/15/99 4.255557 9.805504 0.433997 0
7 12/31/99 4.510891 10 0.451089 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 119.332 1193.32
6.291581
FORMULA: 1000*(1+T)= 1193.32
= 1193.32
T = 0.02849
R = 0.19332
George Putnam Fund of Boston
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 9.95769 100.4249
1 FEE 04/30/99 3.18 10.78338 0.294898 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 99.79292 997.9292
1.670089
FORMULA: 1000*(1+T)= 997.9292
= 987.9292
T = -0.00725
R = -0.01207
Global Asset Allocation
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.76267 265.7687
FEE 12/31/90 3.18 3.701615 0.859084
FEE 12/31/91 3.3708 4.326351 0.779132
FEE 12/31/92 3.573048 4.515746 0.791242
FEE 12/31/93 3.787431 5.209692 0.726997
FEE 12/31/94 4.014677 4.988305 0.804818
FEE 12/31/95 4.255557 6.10914 0.696589
FEE 12/31/96 4.510891 6.936533 0.650309
FEE 12/31/97 4.781544 8.151802 0.586563
FEE 12/31/98 5.068437 9.097389 0.557131
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 258.7796 2587.796
10
FORMULA: 1000*(1+T)= 2587.796 - (0.85 * 1000 * 0)
= 2587.796
T = 0.099748
R = 1.587796
Global Growth
05/01/90
TO NO. YEARS 9.667351
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/90 1000 2.528845 395.4374
1 FEE 05/01/91 3.18 2.538962 1.25248 0.02
2 FEE 05/01/92 3.3708 2.634264 1.279598 0.01
3 FEE 05/01/93 3.573048 2.814637 1.269453 0
4 05/01/94 3.787431 3.318071 1.141456 0
5 05/01/95 4.014677 3.260566 1.231282 0
6 05/01/96 4.255557 3.953842 1.076309 0
7 05/01/97 4.510891 4.428705 1.018558 0
8 05/01/98 4.781544 5.611953 0.852029 0
9 05/01/99 5.068437 6.309867 0.803256 0
10 12/31/99 5.372543 10 0.537254 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 384.9758 3849.758
9.667351
FORMULA: 1000*(1+T)= 3849.758
= 3849.758
T = 0.149629
R = 2.849758
Growth & Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.232362 309.3713
FEE 12/31/90 3.18 3.23653 0.982534
FEE 12/31/91 3.3708 3.783734 0.890866
FEE 12/31/92 3.573048 4.078131 0.876148
FEE 12/31/93 3.787431 4.576157 0.827644
FEE 12/31/94 4.014677 4.509577 0.890256
FEE 12/31/95 4.255557 6.054455 0.70288
FEE 12/31/96 4.510891 7.24886 0.62229
FEE 12/31/97 4.781544 8.837727 0.541038
FEE 12/31/98 5.068437 10.0212 0.505771
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 301.9946 3019.946
10
FORMULA: 1000*(1+T)= 3019.946 - (0.85 * 1000 * 0)
= 3019.946
T = 0.116863
R = 2.019946
Health Sciences
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 9.789038 102.1551
1 FEE 04/30/99 3.18 9.46249 0.336064 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 101.4819 1014.819
1.670089
FORMULA: 1000*(1+T)= 1014.819
= 1004.819
T = 0.002883
R = 0.004819
High Yield
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 4.280869 233.5974
FEE 12/31/90 3.18 3.784513 0.840267
FEE 12/31/91 3.3708 5.382771 0.62622
FEE 12/31/92 3.573048 6.289369 0.568109
FEE 12/31/93 3.787431 7.384956 0.512858
FEE 12/31/94 4.014677 7.184307 0.558812
FEE 12/31/95 4.255557 8.34775 0.509785
FEE 12/31/96 4.510891 9.247729 0.487784
FEE 12/31/97 4.781544 10.38396 0.460474
FEE 12/31/98 5.068437 9.609692 0.52743
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 227.9684 2279.684
10
FORMULA: 1000*(1+T)= 2279.684 - (0.85 * 1000 * 0)
= 2279.684
T = 0.085894
R = 1.279684
Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 5.776642 173.111
FEE 12/31/90 3.18 6.098838 0.521411
FEE 12/31/91 3.3708 7.02424 0.479881
FEE 12/31/92 3.573048 7.41477 0.481883
FEE 12/31/93 3.787431 8.102765 0.467425
FEE 12/31/94 4.014677 7.695397 0.521698
FEE 12/31/95 4.255557 9.102092 0.467536
FEE 12/31/96 4.510891 9.154404 0.492756
FEE 12/31/97 4.781544 9.766532 0.489585
FEE 12/31/98 5.068437 10.3928 0.487688
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 168.1638 1681.638
10
FORMULA: 1000*(1+T)= 1681.638 - (0.85 * 1000 * 0)
= 1681.638
T = 0.053351
R = 0.681638
International Growth
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 4.780694 209.1747
1 FEE 01/02/98 3.18 5.480454 0.580244 0.02
2 FEE 01/02/99 3.3708 6.353162 0.53057 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 207.7065 2077.065
2.992471
FORMULA: 1000*(1+T)= 2077.065
= 2077.065
T = 0.276683
R = 1.077065
International Growth & Income
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 6.373516 156.8993
1 FEE 01/02/98 3.18 7.507804 0.423559 0.02
2 FEE 01/02/99 3.3708 8.176648 0.412247 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 155.7062 1557.062
2.992471
FORMULA: 1000*(1+T)= 1557.062
= 1557.062
T = 0.15948
R = 0.557062
International New Opportunities
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 4.501127 222.1666
1 FEE 01/02/98 3.18 4.433384 0.717285 0.02
2 FEE 01/02/99 3.3708 5.012878 0.672428 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 220.4196 2204.196
2.992471
FORMULA: 1000*(1+T)= 2204.196
= 2204.196
T = 0.302281
R = 1.204196
Investors
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 6.787468 147.3303
1 FEE 04/30/99 3.18 8.24078 0.385886 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 146.6074 1466.074
1.670089
FORMULA: 1000*(1+T)= 1466.074
= 1456.074
T = 0.252303
R = 0.456074
Money Market
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 7.418123 134.805
FEE 12/31/90 3.18 7.865913 0.404276
FEE 12/31/91 3.3708 8.18165 0.411995
FEE 12/31/92 3.573048 8.321512 0.429375
FEE 12/31/93 3.787431 8.399995 0.450885
FEE 12/31/94 4.014677 8.564548 0.468755
FEE 12/31/95 4.255557 8.869972 0.479771
FEE 12/31/96 4.510891 9.153435 0.492809
FEE 12/31/97 4.781544 9.458185 0.505546
FEE 12/31/98 5.068437 9.77844 0.518328
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 130.106 1301.06
10
FORMULA: 1000*(1+T)= 1301.06 - (0.85 * 1000 * 0)
= 1301.06
T = 0.026667
R = 0.30106
New Opportunities
05/02/94
TO NO. YEARS 5.664613
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 05/02/94 1000 2.470309 404.8077
1 FEE 05/02/95 3.18 2.824631 1.125811 0.02
2 FEE 05/02/96 3.3708 4.298116 0.784251 0.01
3 FEE 05/02/97 3.573048 3.974521 0.898988 0
4 05/02/98 3.787431 5.696983 0.664813 0
5 05/02/99 4.014677 6.389733 0.628301 0
6 12/31/99 4.255557 10 0.425556 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 400.2799 4002.799
5.664613
FORMULA: 1000*(1+T)= 4002.799
= 4002.799
T = 0.277433
R = 3.002799
New Value
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 8.414057 118.8487
1 FEE 01/02/98 3.18 9.750223 0.326146 0.02
2 FEE 01/02/99 3.3708 10.14145 0.332379 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 117.8329 1178.329
2.992471
FORMULA: 1000*(1+T)= 1178.329
= 1178.329
T = 0.056368
R = 0.178329
OTC & Emerging Growth
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 4.503377 222.0556
1 FEE 04/30/99 3.18 5.054763 0.62911 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 221.0894 2210.894
1.670089
FORMULA: 1000*(1+T)= 2210.894
= 2200.894
T = 0.603756
R = 1.200894
Research
09/29/98
TO NO. YEARS 1.253936
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 09/29/98 1000 6.709075 149.0518
1 FEE 09/29/99 3.18 8.239571 0.385942 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 148.3288 1483.288
1.253936
FORMULA: 1000*(1+T)= 1483.288
= 1473.288
T = 0.362096
R = 0.473288
Small Cap Value
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/99 1000 9.732664 102.7468
1 FEE 12/31/99 3.18 10 0.318 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 102.4288 1024.288
0.670773
FORMULA: 1000*(1+T)= 1024.288
= 1004.288
T = 0.006399
R = 0.004288
Utilities Growth & Income
05/01/92
TO NO. YEARS 7.665982
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 05/01/92 1000 4.61286 216.7852
1 FEE 05/01/93 3.18 5.210646 0.610289 0.02
2 FEE 05/01/94 3.3708 5.129627 0.657124 0.01
3 FEE 05/01/95 3.573048 5.339181 0.669213 0
4 05/01/96 3.787431 6.481804 0.584317 0
5 05/01/97 4.014677 7.248349 0.553875 0
6 05/01/98 4.255557 9.399769 0.45273 0
7 05/01/99 4.510891 10.04017 0.449284 0
8 12/31/99 4.781544 10 0.478154 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 212.3303 2123.303
7.665982
FORMULA: 1000*(1+T)= 2123.303
= 2123.303
T = 0.103208
R = 1.123303
Vista
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 4.68505 213.4449
1 FEE 01/02/98 3.18 5.631932 0.564637 0.02
2 FEE 01/02/99 3.3708 6.663264 0.505878 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 212.0171 2120.171
2.992471
FORMULA: 1000*(1+T)= 2120.171
= 2120.171
T = 0.285476
R = 1.120171
Voyager
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 1.599055 625.3694
FEE 12/31/90 3.18 1.538441 2.067028
FEE 12/31/91 3.3708 2.207136 1.527228
FEE 12/31/92 3.573048 2.392 1.493749
FEE 12/31/93 3.787431 2.788292 1.358334
FEE 12/31/94 4.014677 2.766609 1.451118
FEE 12/31/95 4.255557 3.82194 1.113455
FEE 12/31/96 4.510891 4.240001 1.063889
FEE 12/31/97 4.781544 5.267867 0.907681
FEE 12/31/98 5.068437 6.434393 0.78771
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 613.0619 6130.619
10
FORMULA: 1000*(1+T)= 6130.619 - (0.85 * 1000 * 0)
= 6130.619
T = 0.19881
R = 5.130619
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Enhanced DB w/o RIG
Asia Pacific Growth
04/30/99
TO NO. YEARS 0.670773
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 36280 1000 5.755531 173.7459
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 173.7459 1737.459
0.670773
FORMULA: 1000*(1+T)= 1737.459
= 1717.459
T = 1.239611
R = 0.717459
Diversified Income
36280
TO NO. YEARS 0.670773
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 36280 1000 10.17408 98.28902
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 98.28902 982.8902
0.670773
FORMULA: 1000*(1+T)= 982.8902
= 962.8902
T = -0.05482
R = -0.03711
George Putnam Fund of Boston
36280
TO NO. YEARS 0.670773
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 36280 1000 10.79446 92.64014
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 92.64014 926.4014
0.670773
FORMULA: 1000*(1+T)= 926.4014
= 906.4014
T = -0.13628
R = -0.0936
Global Asset Allocation
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 36280 1000 9.383157 106.5739
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 106.5739 1065.739
0.670773
FORMULA: 1000*(1+T)= 1065.739
= 1045.739
T = 0.068949
R = 0.045739
Global Growth
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 6.310027 158.4779
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 158.4779 1584.779
0.670773
FORMULA: 1000*(1+T)= 1584.779
= 1564.779
T = 0.949368
R = 0.564779
Growth & Income
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 10.94405 91.37384
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 91.37384 913.7384
0.670773
FORMULA: 1000*(1+T)= 913.7384
= 893.7384
T = -0.15421
R = -0.10626
Health Sciences
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 9.472175 105.5724
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 105.5724 1055.724
0.670773
FORMULA: 1000*(1+T)= 1055.724
= 1035.724
T = 0.053722
R = 0.035724
High Yield
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 10.10465 98.9643
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 98.9643 989.643
0.670773
FORMULA: 1000*(1+T)= 989.643
= 969.643
T = -0.04492
R = -0.03036
Income
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 10.3335 96.77263
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 96.77263 967.7263
0.670773
FORMULA: 1000*(1+T)= 967.7263
= 947.7263
T = -0.07692
R = -0.05227
International Growth
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 6.957057 143.7389
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 143.7389 1437.389
0.670773
FORMULA: 1000*(1+T)= 1437.389
= 1417.389
T = 0.682064
R = 0.417389
International Growth & Income
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 9.151351 109.2735
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 109.2735 1092.735
0.670773
FORMULA: 1000*(1+T)= 1092.735
= 1072.735
T = 0.110347
R = 0.072735
International New Opportunities
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 5.534504 180.6847
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 180.6847 1806.847
0.670773
FORMULA: 1000*(1+T)= 1806.847
= 1786.847
T = 1.375833
R = 0.786847
Investors
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 8.249222 121.2236
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 121.2236 1212.236
0.670773
FORMULA: 1000*(1+T)= 1212.236
= 1192.236
T = 0.299696
R = 0.192236
Money Market
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 9.878432 101.2306
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 101.2306 1012.306
0.670773
FORMULA: 1000*(1+T)= 1012.306
= 992.3064
T = -0.01145
R = -0.00769
New Opportunities
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 6.396252 156.3416
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 156.3416 1563.416
0.670773
FORMULA: 1000*(1+T)= 1563.416
= 1543.416
T = 0.909824
R = 0.543416
New Value
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 11.41271 87.62158
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 87.62158 876.2158
0.670773
FORMULA: 1000*(1+T)= 876.2158
= 856.2158
T = -0.2066
R = -0.14378
OTC & Emerging Growth
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 5.059945 197.6306
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 197.6306 1976.306
0.670773
FORMULA: 1000*(1+T)= 1976.306
= 1956.306
T = 1.719435
R = 0.956306
Research
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 8.65484 115.5423
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 115.5423 1155.423
0.670773
FORMULA: 1000*(1+T)= 1155.423
= 1135.423
T = 0.208453
R = 0.135423
Small Cap Value
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 9.742543 102.6426
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 102.6426 1026.426
0.670773
FORMULA: 1000*(1+T)= 1026.426
= 1006.426
T = 0.009595
R = 0.006426
Utilities Growth & Income
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 10.05041 99.49846
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 99.49846 994.9846
0.670773
FORMULA: 1000*(1+T)= 994.9846
= 974.9846
T = -0.03706
R = -0.02502
Vista
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 7.124651 140.3578
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 140.3578 1403.578
0.670773
FORMULA: 1000*(1+T)= 1403.578
= 1383.578
T = 0.622596
R = 0.383578
Voyager
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 36280 1000 7.006384 142.727
1 FEE 36525 0 10 0 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 36525 10 142.727 1427.27
0.670773
FORMULA: 1000*(1+T)= 1427.27
= 1407.27
T = 0.664192
R = 0.40727
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Enhanced DB w/o RIG
Non-Standardized Calculations
Dates:
Current: 12/31/99
3 Months Ago: 9/30/99
End of Last Year: 12/31/98
One Yr Ago: 12/31/98
Two Yrs Ago: 12/31/97
Three Yrs Ago: 12/31/96
Five Yrs Ago: 12/31/94
Ten Yrs Ago: 12/31/89
Inception Inception Ten Yr Five Yr Three Two One Yr YTD
Fund Date AUV AUV AUV AUV AUV AUV AUV
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Asia Pacific Growth 4/30/99 5.755531 N/A N/A N/A N/A N/A N/A
Diversified Income 4/30/99 10.17408 N/A N/A N/A N/A N/A N/A
George Putnam of Boston 4/30/99 10.79446 N/A N/A N/A N/A N/A N/A
Global Asset Allocation 4/30/99 9.383157 N/A N/A N/A N/A N/A N/A
Global Growth 4/30/99 6.310027 N/A N/A N/A N/A N/A N/A
Growth & Income 4/30/99 10.94405 N/A N/A N/A N/A N/A N/A
Health Sciences 4/30/99 9.472175 N/A N/A N/A N/A N/A N/A
High Yield 4/30/99 10.10465 N/A N/A N/A N/A N/A N/A
Income 4/30/99 10.3335 N/A N/A N/A N/A N/A N/A
International Growth 4/30/99 6.957057 N/A N/A N/A N/A N/A N/A
International Growth
& Income 4/30/99 9.151351 N/A N/A N/A N/A N/A N/A
International New
Opportunities 4/30/99 5.534504 N/A N/A N/A N/A N/A 10
Investors 4/30/99 8.249222 N/A N/A N/A N/A N/A 10
Money Market 4/30/99 9.878432 N/A N/A N/A N/A N/A 10
New Opportunities 4/30/99 6.396252 N/A N/A N/A N/A N/A 10
New Value 4/30/99 11.41271 N/A N/A N/A N/A N/A 10
OTC & Emerging Growth 4/30/99 5.059945 N/A N/A N/A N/A N/A 10
Research Fund 4/30/99 8.65484 N/A N/A N/A N/A N/A 10
Small Cap Value 4/30/99 9.742543 N/A N/A N/A N/A N/A 10
Utilities Growth & Income 4/30/99 10.05041 N/A N/A N/A N/A N/A 10
Vista 4/30/99 7.124651 N/A N/A N/A N/A N/A 10
Voyager 4/30/99 7.006384 N/A N/A N/A N/A N/A 10
<PAGE>
3 Months Today's Inception Ten Years Five Years Three Years Two Years
Fund AUV AUV Total Average Total Average Total Average Total Average Total Average
Asia Pacific Growth 7.09309 10 0.737459 1.277319 N/A N/A N/A N/A N/A N/A N/A N/A
Diversified Income 9.82284 10 -0.01711 -0.02538 N/A N/A N/A N/A N/A N/A N/A N/A
George Putnam of Boston 9.955577 10 -0.0736 -0.10765 N/A N/A N/A N/A N/A N/A N/A N/A
Global Asset Allocation 9.117068 10 0.065739 0.099498 N/A N/A N/A N/A N/A N/A N/A N/A
Global Growth 6.791745 10 0.584779 0.985696 N/A N/A N/A N/A N/A N/A N/A N/A
Growth & Income 9.831857 10 -0.08626 -0.12576 N/A N/A N/A N/A N/A N/A N/A N/A
Health Sciences 9.199349 10 0.055724 0.084139 N/A N/A N/A N/A N/A N/A N/A N/A
High Yield 9.683191 10 -0.01036 -0.01539 N/A N/A N/A N/A N/A N/A N/A N/A
Income 10.06998 10 -0.03227 -0.0477 N/A N/A N/A N/A N/A N/A N/A N/A
International Growth 7.420401 10 0.437389 0.716935 N/A N/A N/A N/A N/A N/A N/A N/A
International Growth
& Income 9.405612 10 0.092735 0.141246 N/A N/A N/A N/A N/A N/A N/A N/A
International New
Opportunities 6.394958 10 0.806847 1.414128 N/A N/A N/A N/A N/A N/A N/A N/A
Investors 8.060505 10 0.212236 0.332072 N/A N/A N/A N/A N/A N/A N/A N/A
Money Market 9.920953 10 0.012306 0.018389 N/A N/A N/A N/A N/A N/A N/A N/A
New Opportunities 6.722518 10 0.563416 0.945948 N/A N/A N/A N/A N/A N/A N/A N/A
New Value 9.893328 10 -0.12378 -0.1787 N/A N/A N/A N/A N/A N/A N/A N/A
OTC & Emerging Growth 5.699143 10 0.976306 1.759068 N/A N/A N/A N/A N/A N/A N/A N/A
Research Fund 8.362404 10 0.155423 0.240141 N/A N/A N/A N/A N/A N/A N/A N/A
Small Cap Value 9.630864 10 0.026426 0.039623 N/A N/A N/A N/A N/A N/A N/A N/A
Utilities Growth & Income 10.08147 10 -0.00502 -0.00746 N/A N/A N/A N/A N/A N/A N/A N/A
Vista 7.111053 10 0.403578 0.657113 N/A N/A N/A N/A N/A N/A N/A N/A
Voyager 7.108396 10 0.42727 0.698957 N/A N/A N/A N/A N/A N/A N/A N/A
<PAGE>
One Year YTD Three Months
Fund
Asia Pacific Growth N/A N/A 0.409823
Diversified Income N/A N/A 0.018036
George Putnam of Boston N/A N/A 0.004462
Global Asset Allocation N/A N/A 0.096844
Global Growth N/A N/A 0.472376
Growth & Income N/A N/A 0.017102
Health Sciences N/A N/A 0.087033
High Yield N/A N/A 0.032717
Income N/A N/A -0.00695
International Growth N/A N/A 0.347636
International Growth
& Income N/A N/A 0.063195
International New
Opportunities N/As 0 0.563732
Investors N/A 0 0.240617
Money Market N/A 0 0.007968
New Opportunities N/A 0 0.487538
New Value N/A 0 0.010782
OTC & Emerging Growth N/A 0 0.75465
Research Fund N/A 0 0.195828
Small Cap Value N/A 0 0.038328
Utilities Growth & Income N/A 0 -0.00808
Vista N/A 0 0.406261
Voyager N/A 0 0.406787
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Putnam "L" Enhanced DB & RIG 2
Asia Pacific Growth
12/31/98 NO. YEARS 1
TO
12/31/99
<S> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 36160 1000 4.916426 203.3998
FEE 36525 3.18 10 0.318
RESULTING VALUE 12/31/99 10 203.0818 2030.818
1
FORMULA: 1000*(1+T)= 2030.818 - (1000 * 0.02)
= 2010.818
T = 1.010818
R = 1.010818
Diversified Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.00866 99.91344
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 99.59544 995.9544
1
FORMULA: 1000*(1+T)= 995.9544 - (1000 * 0.02)
= 975.9544
T = -0.02405
R = -0.02405
George Putnam Fund of Boston
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.22557 97.79404
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 97.47604 974.7604
1
FORMULA: 1000*(1+T)= 974.7604 - (1000 * 0.02)
= 954.7604
T = -0.04524
R = -0.04524
Global Asset Allocation
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.111294 109.7539
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 109.4359 1094.359
1
FORMULA: 1000*(1+T)= 1094.359 - (1000 * 0.02)
= 1074.359
T = 0.074359
R = 0.074359
Global Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.093725 164.1032
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 163.7852 1637.852
1
FORMULA: 1000*(1+T)= 1637.852 - (1000 * 0.02)
= 1617.852
T = 0.617852
R = 0.617852
Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.03651 99.63619
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 99.31819 993.1819
1
FORMULA: 1000*(1+T)= 993.1819 - (1000 * 0.02)
= 973.1819
T = -0.02682
R = -0.02682
Health Sciences
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.60609 94.28543
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 93.96743 939.6743
1
FORMULA: 1000*(1+T)= 939.6743 - (1000 * 0.02)
= 919.6743
T = -0.08033
R = -0.08033
High Yield
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.624382 103.9028
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 103.5848 1035.848
1
FORMULA: 1000*(1+T)= 1035.848 - (1000 * 0.02)
= 1015.848
T = 0.015848
R = 0.015848
Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.4087 96.07346
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 95.75546 957.5546
1
FORMULA: 1000*(1+T)= 957.5546 - (1000 * 0.02)
= 937.5546
T = -0.06245
R = -0.06245
International Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.362817 157.1631
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 156.8451 1568.451
1
FORMULA: 1000*(1+T)= 1568.451 - (1000 * 0.02)
= 1548.451
T = 0.548451
R = 0.548451
International Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.189113 122.1133
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 121.7953 1217.953
1
FORMULA: 1000*(1+T)= 1217.953 - (1000 * 0.02)
= 1197.953
T = 0.197953
R = 0.197953
International New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 5.020469 199.1846
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 198.8666 1988.666
1
FORMULA: 1000*(1+T)= 1988.666 - (1000 * 0.02)
= 1968.666
T = 0.968666
R = 0.968666
Investors
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.83414 127.6464
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 127.3284 1273.284
1
FORMULA: 1000*(1+T)= 1273.284 - (1000 * 0.02)
= 1253.284
T = 0.253284
R = 0.253284
Money Market
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.793376 102.1098
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 101.7918 1017.918
1
FORMULA: 1000*(1+T)= 1017.918 - (1000 * 0.02)
= 997.9183
T = -0.00208
R = -0.00208
New Opportunities
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.021843 166.0621
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 165.7441 1657.441
1
FORMULA: 1000*(1+T)= 1657.441 - (1000 * 0.02)
= 1637.441
T = 0.637441
R = 0.637441
New Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.15695 98.4548
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 98.1368 981.368
1
FORMULA: 1000*(1+T)= 981.368 - (1000 * 0.02)
= 961.368
T = -0.03863
R = -0.03863
OTC & Emerging Growth
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 4.496868 222.377
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 222.059 2220.59
1
FORMULA: 1000*(1+T)= 2220.59 - (1000 * 0.02)
= 2200.59
T = 1.20059
R = 1.20059
Research
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 7.974761 125.3956
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 125.0776 1250.776
1
FORMULA: 1000*(1+T)= 1250.776 - (1000 * 0.02)
= 1230.776
T = 0.230776
R = 0.230776
Small Cap Value
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE!
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
1
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.02)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.26356 97.43211
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 97.11411 971.1411
1
FORMULA: 1000*(1+T)= 971.1411 - (1000 * 0.02)
= 951.1411
T = -0.04886
R = -0.04886
Vista
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.673406 149.8485
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 149.5305 1495.305
1
FORMULA: 1000*(1+T)= 1495.305 - (1000 * 0.02)
= 1475.305
T = 0.475305
R = 0.475305
Voyager
12/31/98 NO. YEARS 1
TO
12/31/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 6.444185 155.1787
FEE 12/31/99 3.18 10 0.318
RESULTING VALUE 12/31/99 10 154.8607 1548.607
1
FORMULA: 1000*(1+T)= 1548.607 - (1000 * 0.02)
= 1528.607
T = 0.528607
R = 0.528607
<PAGE>
Putnam "L" Enhanced DB & RIG 2
Asia Pacific Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 34699 1000 #VALUE! #VALUE!
FEE 35064 3.18 5.920195 0.537144
FEE 35430 3.3708 6.333282 0.532236
FEE 35795 3.573048 5.299765 0.67419
FEE 36160 3.787431 4.916426 0.770363
FEE 36525 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Diversified Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.893684 126.6836
FEE 12/31/95 3.18 9.22059 0.34488
FEE 12/31/96 3.3708 9.83756 0.342646
FEE 12/31/97 3.573048 10.35759 0.344969
FEE 12/31/98 3.787431 10.00866 0.378415
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 124.8712 1248.712
5
FORMULA: 1000*(1+T)= 1248.712 - (1000 * 0.0)
= 1248.712
T = 0.045424
R = 0.248712
George Putnam Fund of Boston
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 10.22557 0.370388
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 5.026505 198.9454
FEE 12/31/95 3.18 6.146543 0.517364
FEE 12/31/96 3.3708 6.968363 0.483729
FEE 12/31/97 3.573048 8.176724 0.436978
FEE 12/31/98 3.787431 9.111294 0.415685
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 196.6902 1966.902
5
FORMULA: 1000*(1+T)= 1966.902 - (1000 * 0.0)
= 1966.902
T = 0.144871
R = 0.966902
Global Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 3.275427 305.3037
FEE 12/31/95 3.18 3.715013 0.855986
FEE 12/31/96 3.3708 4.26936 0.789533
FEE 12/31/97 3.573048 4.786221 0.746528
FEE 12/31/98 3.787431 6.093725 0.62153
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 301.8887 3018.887
5
FORMULA: 1000*(1+T)= 3018.887 - (1000 * 0.0)
= 3018.887
T = 0.247296
R = 2.018887
Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.544128 220.0642
FEE 12/31/95 3.18 6.091536 0.522036
FEE 12/31/96 3.3708 7.282121 0.462887
FEE 12/31/97 3.573048 8.864742 0.403063
FEE 12/31/98 3.787431 10.03651 0.377365
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 217.8974 2178.974
5
FORMULA: 1000*(1+T)= 2178.974 - (1000 * 0.0)
= 2178.974
T = 0.168558
R = 1.178974
Health Sciences
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 10.60609 0.3571
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
High Yield
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.239335 138.1342
FEE 12/31/95 3.18 8.398863 0.378623
FEE 12/31/96 3.3708 9.290157 0.362836
FEE 12/31/97 3.573048 10.41572 0.343044
FEE 12/31/98 3.787431 9.624382 0.393525
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 136.2547 1362.547
5
FORMULA: 1000*(1+T)= 1362.547 - (1000 * 0.0)
= 1362.547
T = 0.063825
R = 0.362547
Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.754376 128.9594
FEE 12/31/95 3.18 9.15787 0.347242
FEE 12/31/96 3.3708 9.196449 0.366533
FEE 12/31/97 3.573048 9.796422 0.36473
FEE 12/31/98 3.787431 10.4087 0.363872
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 127.1156 1271.156
5
FORMULA: 1000*(1+T)= 1271.156 - (1000 * 0.0)
= 1271.156
T = 0.049155
R = 0.271156
International Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 5.469004 0.653327
FEE 12/31/98 3.787431 6.362817 0.595244
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
International Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 7.49896 0.476472
FEE 12/31/98 3.787431 8.189113 0.462496
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
International New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 4.42951 0.806646
FEE 12/31/98 3.787431 5.020469 0.754398
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Investors
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 7.83414 0.483452
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Money Market
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 8.630163 115.8727
FEE 12/31/95 3.18 8.924288 0.356331
FEE 12/31/96 3.3708 9.195446 0.366573
FEE 12/31/97 3.573048 9.487108 0.376621
FEE 12/31/98 3.787431 9.793376 0.386734
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 113.9849 1139.849
5
FORMULA: 1000*(1+T)= 1139.849 - (1000 * 0.0)
= 1139.849
T = 0.026525
R = 0.139849
New Opportunities
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.661016 375.7963
FEE 12/31/95 3.18 3.780068 0.841255
FEE 12/31/96 3.3708 4.083448 0.825479
FEE 12/31/97 3.573048 4.936351 0.723824
FEE 12/31/98 3.787431 6.021843 0.628949
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 372.3753 3723.753
5
FORMULA: 1000*(1+T)= 3723.753 - (1000 * 0.0)
= 3723.753
T = 0.300757
R = 2.723753
New Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 9.747848 0.366547
FEE 12/31/98 3.787431 10.15695 0.372891
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 4.496868 0.842238
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Research
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 7.974761 0.474927
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Small Cap Value
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 #VALUE! #VALUE!
FEE 12/31/98 3.787431 #VALUE! #VALUE!
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 5.003242 199.8704
FEE 12/31/95 3.18 6.430564 0.494513
FEE 12/31/96 3.3708 7.301544 0.461656
FEE 12/31/97 3.573048 9.099487 0.392665
FEE 12/31/98 3.787431 10.26356 0.369017
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 197.7511 1977.511
5
FORMULA: 1000*(1+T)= 1977.511 - (1000 * 0.0)
= 1977.511
T = 0.146103
R = 0.977511
Vista
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 3.18 #VALUE! #VALUE!
FEE 12/31/96 3.3708 #VALUE! #VALUE!
FEE 12/31/97 3.573048 5.686604 0.628327
FEE 12/31/98 3.787431 6.673406 0.567541
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (1000 * 0.0)
= #VALUE!
T = N/A
R = N/A
Voyager
12/30/94
TO NO. YEARS 5
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 2.787772 358.7094
FEE 12/31/95 3.18 3.845312 0.826981
FEE 12/31/96 3.3708 4.259428 0.791374
FEE 12/31/97 3.573048 5.283933 0.67621
FEE 12/31/98 3.787431 6.444185 0.587728
FEE 12/31/99 4.014677 10 0.401468
RESULTING VALUE 12/31/99 10 355.4256 3554.256
5
FORMULA: 1000*(1+T)= 3554.256 - (1000 * 0.0)
= 3554.256
T = 0.288694
R = 2.554256
<PAGE>
Putnam "L" Enhanced DB & RIG 2
Asia Pacific Growth
05/01/95
TO NO. YEARS 4.668036
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/95 1000 5.863669 170.5417
1 FEE 05/01/96 3.18 6.253677 0.508501 0.02
2 FEE 05/01/97 3.3708 6.169627 0.546354 0.01
3 FEE 05/01/98 3.573048 5.179677 0.689821 0
4 05/01/99 3.787431 5.755531 0.658051 0
5 12/31/99 4.014677 10 0.401468 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 167.7375 1677.375
4.668036
FORMULA: 1000*(1+T)= 1677.375
= 1677.375
T = 0.117174
R = 0.677375
Diversified Income
09/15/93
TO NO. YEARS 6.291581
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 09/15/93 1000 8.264768 120.9955
1 FEE 09/15/94 3.18 8.012685 0.396871 0.02
2 FEE 09/15/95 3.3708 8.819842 0.382184 0.01
3 FEE 09/15/96 3.573048 9.438747 0.378551 0
4 09/15/97 3.787431 10.18719 0.371784 0
5 09/15/98 4.014677 9.860261 0.407157 0
6 09/15/99 4.255557 9.809885 0.433803 0
7 12/31/99 4.510891 10 0.451089 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 118.1741 1181.741
6.291581
FORMULA: 1000*(1+T)= 1181.741
= 1181.741
T = 0.026897
R = 0.181741
George Putnam Fund of Boston
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 9.983135 100.1689
1 FEE 04/30/99 3.18 10.79446 0.294596 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 99.53726 995.3726
1.670089
FORMULA: 1000*(1+T)= 995.3726
= 985.3726
T = -0.00878
R = -0.01463
Global Asset Allocation
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.820542 261.743
FEE 12/31/90 3.18 3.752805 0.847366
FEE 12/31/91 3.3708 4.379498 0.769677
FEE 12/31/92 3.573048 4.56424 0.782835
FEE 12/31/93 3.787431 5.257607 0.720372
FEE 12/31/94 4.014677 5.026505 0.798701
FEE 12/31/95 4.255557 6.146543 0.69235
FEE 12/31/96 4.510891 6.968363 0.647339
FEE 12/31/97 4.781544 8.176724 0.584775
FEE 12/31/98 5.068437 9.111294 0.556281
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 254.806 2548.06
10
FORMULA: 1000*(1+T)= 2548.06 - (0.85 * 1000 * 0)
= 2548.06
T = 0.098047
R = 1.54806
Global Growth
05/01/90
TO NO. YEARS 9.667351
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 05/01/90 1000 2.563869 390.0355
1 FEE 05/01/91 3.18 2.570199 1.237258 0.02
2 FEE 05/01/92 3.3708 2.662605 1.265978 0.01
3 FEE 05/01/93 3.573048 2.840597 1.257851 0
4 05/01/94 3.787431 3.343571 1.13275 0
5 05/01/95 4.014677 3.280597 1.223764 0
6 05/01/96 4.255557 3.972056 1.071374 0
7 05/01/97 4.510891 4.442324 1.015435 0
8 05/01/98 4.781544 5.620627 0.850714 0
9 05/01/99 5.068437 6.310027 0.803235 0
10 12/31/99 5.372543 10 0.537254 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 379.6399 3796.399
9.667351
FORMULA: 1000*(1+T)= 3796.399
= 3796.399
T = 0.147971
R = 2.796399
Growth & Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.282081 304.6847
FEE 12/31/90 3.18 3.281306 0.969126
FEE 12/31/91 3.3708 3.830233 0.880051
FEE 12/31/92 3.573048 4.121947 0.866835
FEE 12/31/93 3.787431 4.618259 0.820099
FEE 12/31/94 4.014677 4.544128 0.883487
FEE 12/31/95 4.255557 6.091536 0.698602
FEE 12/31/96 4.510891 7.282121 0.619447
FEE 12/31/97 4.781544 8.864742 0.539389
FEE 12/31/98 5.068437 10.03651 0.505
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 297.3655 2973.655
10
FORMULA: 1000*(1+T)= 2973.655 - (0.85 * 1000 * 0)
= 2973.655
T = 0.115139
R = 1.973655
Health Sciences
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 9.814041 101.8948
1 FEE 04/30/99 3.18 9.472175 0.33572 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 101.222 1012.22
1.670089
FORMULA: 1000*(1+T)= 1012.22
= 1002.22
T = 0.001329
R = 0.00222
High Yield
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 4.346672 230.0611
FEE 12/31/90 3.18 3.836827 0.82881
FEE 12/31/91 3.3708 5.44887 0.618624
FEE 12/31/92 3.573048 6.356903 0.562074
FEE 12/31/93 3.787431 7.452884 0.508183
FEE 12/31/94 4.014677 7.239335 0.554564
FEE 12/31/95 4.255557 8.398863 0.506683
FEE 12/31/96 4.510891 9.290157 0.485556
FEE 12/31/97 4.781544 10.41572 0.45907
FEE 12/31/98 5.068437 9.624382 0.526625
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 224.4736 2244.736
10
FORMULA: 1000*(1+T)= 2244.736 - (0.85 * 1000 * 0)
= 2244.736
T = 0.084218
R = 1.244736
Income
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 5.865502 170.4884
FEE 12/31/90 3.18 6.183215 0.514296
FEE 12/31/91 3.3708 7.110552 0.474056
FEE 12/31/92 3.573048 7.494434 0.47676
FEE 12/31/93 3.787431 8.177338 0.463162
FEE 12/31/94 4.014677 7.754376 0.51773
FEE 12/31/95 4.255557 9.15787 0.464689
FEE 12/31/96 4.510891 9.196449 0.490504
FEE 12/31/97 4.781544 9.796422 0.488091
FEE 12/31/98 5.068437 10.4087 0.486942
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 165.5749 1655.749
10
FORMULA: 1000*(1+T)= 1655.749 - (0.85 * 1000 * 0)
= 1655.749
T = 0.051718
R = 0.655749
International Growth
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 4.80256 208.2223
1 FEE 01/02/98 3.18 5.497123 0.578484 0.02
2 FEE 01/02/99 3.3708 6.362817 0.529765 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 206.7567 2067.567
2.992471
FORMULA: 1000*(1+T)= 2067.567
= 2067.567
T = 0.274729
R = 1.067567
International Growth & Income
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 6.402695 156.1842
1 FEE 01/02/98 3.18 7.530671 0.422273 0.02
2 FEE 01/02/99 3.3708 8.189113 0.41162 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 154.993 1549.93
2.992471
FORMULA: 1000*(1+T)= 1549.93
= 1549.93
T = 0.157703
R = 0.54993
International New Opportunities
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 4.521667 221.1574
1 FEE 01/02/98 3.18 4.446822 0.715117 0.02
2 FEE 01/02/99 3.3708 5.020469 0.671411 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 219.4135 2194.135
2.992471
FORMULA: 1000*(1+T)= 2194.135
= 2194.135
T = 0.300291
R = 1.194135
Investors
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 6.804777 146.9556
1 FEE 04/30/99 3.18 8.249222 0.385491 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 146.233 1462.33
1.670089
FORMULA: 1000*(1+T)= 1462.33
= 1452.33
T = 0.250374
R = 0.45233
Money Market
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 7.532203 132.7633
FEE 12/31/90 3.18 7.974713 0.39876
FEE 12/31/91 3.3708 8.282169 0.406995
FEE 12/31/92 3.573048 8.410913 0.424811
FEE 12/31/93 3.787431 8.477279 0.446774
FEE 12/31/94 4.014677 8.630163 0.465191
FEE 12/31/95 4.255557 8.924288 0.476851
FEE 12/31/96 4.510891 9.195446 0.490557
FEE 12/31/97 4.781544 9.487108 0.504004
FEE 12/31/98 5.068437 9.793376 0.517537
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 128.0945 1280.945
10
FORMULA: 1000*(1+T)= 1280.945 - (0.85 * 1000 * 0)
= 1280.945
T = 0.025069
R = 0.280945
New Opportunities
05/02/94
TO NO. YEARS 5.664613
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 05/02/94 1000 2.491743 401.3255
1 FEE 05/02/95 3.18 2.8448 1.117829 0.02
2 FEE 05/02/96 3.3708 4.322192 0.779882 0.01
3 FEE 05/02/97 3.573048 3.990692 0.895345 0
4 05/02/98 3.787431 5.711471 0.663127 0
5 05/02/99 4.014677 6.396252 0.627661 0
6 12/31/99 4.255557 10 0.425556 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 396.8161 3968.161
5.664613
FORMULA: 1000*(1+T)= 3968.161
= 3968.161
T = 0.275474
R = 2.968161
New Value
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 8.452596 118.3068
1 FEE 01/02/98 3.18 9.779954 0.325155 0.02
2 FEE 01/02/99 3.3708 10.15695 0.331871 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 117.2925 1172.925
2.992471
FORMULA: 1000*(1+T)= 1172.925
= 1172.925
T = 0.054747
R = 0.172925
OTC & Emerging Growth
04/30/98
TO NO. YEARS 1.670089
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/98 1000 4.514881 221.4898
1 FEE 04/30/99 3.18 5.059945 0.628465 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 220.5242 2205.242
1.670089
FORMULA: 1000*(1+T)= 2205.242
= 2195.242
T = 0.601289
R = 1.195242
Research
09/29/98
TO NO. YEARS 1.253936
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 09/29/98 1000 6.721925 148.7669
1 FEE 09/29/99 3.18 8.242774 0.385792 0.02
2 FEE 12/31/99 3.3708 10 0.33708 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 148.044 1480.44
1.253936
FORMULA: 1000*(1+T)= 1480.44
= 1470.44
T = 0.359996
R = 0.47044
Small Cap Value
04/30/99
TO NO. YEARS 0.670773
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 04/30/99 1000 9.742543 102.6426
1 FEE 12/31/99 3.18 10 0.318 0.02
2 FEE N/A 0 N/A 0 0.01
3 FEE N/A 0 N/A 0 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 102.3246 1023.246
0.670773
FORMULA: 1000*(1+T)= 1023.246
= 1003.246
T = 0.004843
R = 0.003246
Utilities Growth & Income
05/01/92
TO NO. YEARS 7.665982
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 05/01/92 1000 4.667017 214.2696
1 FEE 05/01/93 3.18 5.263907 0.604114 0.02
2 FEE 05/01/94 3.3708 5.174172 0.651467 0.01
3 FEE 05/01/95 3.573048 5.377306 0.664468 0
4 05/01/96 3.787431 6.518119 0.581062 0
5 05/01/97 4.014677 7.277876 0.551628 0
6 05/01/98 4.255557 9.423674 0.451582 0
7 05/01/99 4.510891 10.05041 0.448827 0
8 12/31/99 4.781544 10 0.478154 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 209.8383 2098.383
7.665982
FORMULA: 1000*(1+T)= 2098.383
= 2098.383
T = 0.101511
R = 1.098383
Vista
01/02/97
TO NO. YEARS 2.992471
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
- INIT DEPOSIT 01/02/97 1000 4.706479 212.4731
1 FEE 01/02/98 3.18 5.649066 0.562925 0.02
2 FEE 01/02/99 3.3708 6.673406 0.505109 0.01
3 FEE 12/31/99 3.573048 10 0.357305 0
4 N/A 0 N/A 0 0
5 N/A 0 N/A 0 0
6 N/A 0 N/A 0 0
7 N/A 0 N/A 0 0
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10 211.0477 2110.477
2.992471
FORMULA: 1000*(1+T)= 2110.477
= 2110.477
T = 0.283509
R = 1.110477
Voyager
12/31/89
TO NO. YEARS 10
12/31/99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 1.62363 615.9039
FEE 12/31/90 3.18 1.5597 2.038854
FEE 12/31/91 3.3708 2.23423 1.508708
FEE 12/31/92 3.573048 2.417678 1.477884
FEE 12/31/93 3.787431 2.813915 1.345965
FEE 12/31/94 4.014677 2.787772 1.440102
FEE 12/31/95 4.255557 3.845312 1.106687
FEE 12/31/96 4.510891 4.259428 1.059037
FEE 12/31/97 4.781544 5.283933 0.904921
FEE 12/31/98 5.068437 6.444185 0.786513
FEE 12/31/99 5.372543 10 0.537254
RESULTING VALUE 12/31/99 10 603.6979 6036.979
10
FORMULA: 1000*(1+T)= 6036.979 - (0.85 * 1000 * 0)
= 6036.979
T = 0.196966
R = 5.036979
</TABLE>
