JNL VARIABLE FUND V LLC
497, 1999-12-22
Previous: BIOINCUBATION CORP, 10SB12G/A, 1999-12-22
Next: ZAP COM CORP, 3, 1999-12-22



                           JNL(R) VARIABLE FUND V LLC



<PAGE>


                                   PROSPECTUS

                                November 23, 1999

                           JNL(R) VARIABLE FUND V LLC
                 225 West Wacker Drive o Chicago, Illinois 60606

This Prospectus  provides you with the basic  information you should know before
investing in the JNL Variable Fund V LLC (Fund).

The  interests of the Fund are sold to Jackson  National  Separate  Account V to
fund the  benefits of variable  annuity  contracts.  The Fund  currently  offers
interests in the following Series:


JNL/First Trust The DowSM Target 10 Series


THE  SECURITIES  AND EXCHANGE  COMMISSION  HAS NOT APPROVED OR  DISAPPROVED  THE
FUND'S  SECURITIES,  OR  DETERMINED  WHETHER  THIS  PROSPECTUS  IS  ACCURATE  OR
COMPLETE. IT IS A CRIMINAL OFFENSE TO STATE OTHERWISE.

The  Fund's  Statement  of  Additional  Information  (SAI)  contains  additional
information about the Fund and the Series.



<PAGE>


"Dow Jones", "Dow Jones Industrial AverageSM",  "DJIASM", and "The Dow 10SM" are
service  marks of Dow  Jones &  Company,  Inc.  (Dow  Jones).  Dow  Jones has no
relationship to the Fund,  other than the licensing of the Dow Jones  Industrial
Average  (DJIA) and its service marks for use in  connection  with the JNL/First
Trust The Dow Target 10 Series.

DOW JONES DOES NOT:

o    Sponsor,  endorse,  sell or promote the  JNL/First  Trust The Dow Target 10
     Series.
o    Recommend  that any person invest in the JNL/First  Trust The Dow Target 10
     Series or any other securities.
o    Have any  responsibility  or liability for or make any decisions  about the
     timing, amount or pricing of the JNL/First Trust The Dow Target 10 Series.
o    Have any responsibility or liability for the administration,  management or
     marketing of the JNL/First Trust The Dow Target 10 Series.
o    Consider the needs of the  JNL/First  Trust The Dow Target 10 Series or the
     owners  of the  JNL/First  Trust The Dow  Target 10 Series in  determining,
     composing or calculating the DJIA or have any obligation to do so.

- --------------------------------------------------------------------------------

DOW JONES WILL NOT HAVE ANY LIABILITY IN CONNECTION WITH THE JNL/FIRST TRUST THE
DOW TARGET 10 SERIES.
SPECIFICALLY,

o    DOW JONES DOES NOT MAKE ANY  WARRANTY,  EXPRESS OR  IMPLIED,  AND DOW JONES
     DISCLAIMS ANY WARRANTY ABOUT:

     o    THE RESULTS TO BE OBTAINED  BY THE  JNL/FIRST  TRUST THE DOW TARGET 10
          SERIES,  THE OWNERS OF THE JNL/FIRST TRUST THE DOW TARGET 10 SERIES OR
          ANY OTHER PERSON IN  CONNECTION  WITH THE USE OF THE DJIA AND THE DATA
          INCLUDED IN THE DJIA;

     o    THE ACCURACY OR COMPLETENESS OF THE DJIA AND ITS DATA;

     o    THE MERCHANTABILITY AND THE FITNESS FOR A PARTICULAR PURPOSE OR USE OF
          THE DJIA AND ITS DATA;

o    DOW JONES WILL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR INTERRUPTIONS
     IN THE DJIA OR ITS DATA;

o    UNDER NO  CIRCUMSTANCES  WILL DOW JONES BE LIABLE  FOR ANY LOST  PROFITS OR
     INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF DOW
     JONES KNOWS THAT THEY MIGHT OCCUR.

THE  LICENSING  AGREEMENT  BETWEEN  FIRST TRUST  ADVISORS  L.P. AND DOW JONES IS
SOLELY FOR THEIR  BENEFIT AND NOT FOR THE BENEFIT OF THE OWNERS OF THE JNL/FIRST
TRUST THE DOW TARGET 10 SERIES OR ANY OTHER THIRD PARTIES.
- --------------------------------------------------------------------------------

 "JNL(R)",  "Jackson  National(R)" and "Jackson National Life(R)" are trademarks
of Jackson National Life Insurance Company.



<PAGE>


                                TABLE OF CONTENTS

About the JNL/First Trust The DowSM Target 10 Series......................1

         Investment Objective.............................................1

         Principal Investment Strategies..................................1

         Principal Risks of Investing in The Dow Target 10 Series.........1

         Additional Information About the Principal Investment
           Strategies, Other Investments and Risks of The Dow
           Target 10 Series...............................................1

Management of the Fund....................................................3

         Investment Adviser...............................................3

         Investment Sub-Adviser...........................................4

         Portfolio Management.............................................5

Administrative Fee........................................................5

Investment in Fund Interests..............................................5

Redemption of Fund Interests..............................................5

Tax Status................................................................6

         General..........................................................6

         Internal Revenue Services Diversification Requirements...........6

Hypothetical Performance Data for Target Strategy.........................7

Financial Highlights......................................................9


<PAGE>


              ABOUT THE JNL/FIRST TRUST THE DOWSM TARGET 10 SERIES

INVESTMENT OBJECTIVE

The investment  objective of the JNL/First Trust The DowSM Target 10 Series (The
Dow Target 10 Series) is a high total return  through a  combination  of capital
appreciation and dividend income.

PRINCIPAL INVESTMENT STRATEGIES

The  Dow  Target  10  Series  seeks  to  achieve  its   objective  by  investing
approximately equal amounts in the common stock of the ten companies included in
the Dow Jones Industrial AverageSM (DJIA) which have the highest dividend yields
on or about the business day before each Stock Selection Date. The ten companies
will be  selected  annually,  beginning  July 1,  1999,  and on  each  one  year
anniversary thereof (Stock Selection Date). The sub-adviser generally uses a buy
and hold strategy,  trading only on each Stock Selection Date and when cash flow
activity occurs in the Series.

PRINCIPAL RISKS OF INVESTING IN THE DOW TARGET 10 SERIES

An investment in The Dow Target 10 Series is not guaranteed.  As with any mutual
fund,  the value of The Dow Target 10 Series'  shares  will change and you could
lose money by investing in this Series.  A variety of factors may  influence its
investment performance, such as:

         o    Market  risk.   Because  The  Dow  Target  10  Series  invests  in
              U.S.-traded equity securities, it is subject to stock market risk.
              Stock  prices  typically  fluctuate  more than the values of other
              types  of  securities,  typically  in  response  to  changes  in a
              particular company's financial condition and factors affecting the
              market in general. For example,  unfavorable or unanticipated poor
              earnings  performance  of a company may result in a decline in its
              stock's  price,  and a  broad-based  market  drop may also cause a
              stock's price to fall.

         o    Non-diversification. The Dow Target 10 Series is "non-diversified"
              as such term is defined in the Investment  Company Act of 1940, as
              amended,  which means that the Series may hold a smaller number of
              issuers than if it were  "diversified."  With a smaller  number of
              different  issuers,  The Dow  Target 10 Series is  subject to more
              risk than another fund holding a larger  number of issuers,  since
              changes in the  financial  condition or market  status of a single
              issuer may cause greater  fluctuation in The Dow Target 10 Series'
              total return and share price.

         o    Limited  management.   The  Dow  Target  10  Series'  strategy  of
              investing in ten companies  according to criteria  determined on a
              Stock  Selection  Date  prevents  The Dow  Target 10  Series  from
              responding  to market  fluctuations.  As compared to other  funds,
              this could subject The Dow Target 10 Series to more risk if one of
              the selected stocks declines in price or if certain sectors of the
              market, or the United States economy,  experience  downturns.  The
              investment strategy may also prevent The Dow Target 10 Series from
              taking advantage of opportunities available to other funds.

In  addition,  the  performance  of The Dow  Target  10  Series  depends  on the
sub-adviser's ability to effectively implement the investment strategies of this
Series.

ADDITIONAL  INFORMATION  ABOUT  THE  PRINCIPAL  INVESTMENT   STRATEGIES,   OTHER
INVESTMENTS AND RISKS OF THE DOW TARGET 10 SERIES

The Dow Target 10 Series  invests in the common stock of ten companies  included
in The DJIA.  The ten common  stocks will be chosen on or about the business day
before each Stock Selection Date as follows:

         o    the  sub-adviser  will determine the dividend yield on each common
              stock in The DJIA on or about the  business  day  before the Stock
              Selection Date;

         o    the sub-adviser will allocate  approximately  equal amounts of The
              Dow  Target 10 Series to the ten  companies  in The DJIA that have
              the highest dividend yield;

         o    the sub-adviser will determine the percentage relationship between
              the number of shares of each of the ten common stocks selected.

Between Stock Selection  Dates,  The Dow Target 10 Series will purchase and sell
common stocks approximately  according to the percentage  relationship among the
common stocks established on the prior Stock Selection Date.

The stocks in The Dow Target 10 Series are not  expected  to reflect  the entire
DJIA nor track the movements of The DJIA.

It is generally not possible for the sub-adviser to purchase round lots (usually
100 shares) of stocks in amounts that will  precisely  duplicate the  prescribed
mix of  securities.  Also, it usually will be  impossible  for The Dow Target 10
Series to be 100% invested in the  prescribed  mix of securities at any time. To
the extent that The Dow Target 10 Series is not fully invested, the interests of
the interest  holders may be diluted and total return may not directly track the
investment results of the prescribed mix of securities. To minimize this effect,
the  sub-adviser  will  generally  try,  as much as  practicable,  to maintain a
minimum cash  position at all times.  Normally,  the only cash items held by The
Dow Target 10 Series will be amounts  expected  to be  deducted as expenses  and
amounts too small to purchase additional round lots of the securities.

The  sub-adviser  will  attempt to  replicate  the  percentage  relationship  of
securities when selling  securities for The Dow Target 10 Series. The percentage
relationship  among the number of  securities in The Dow Target 10 Series should
therefore  remain  relatively  stable.  However,  given the fact that the market
price of such  securities  will  vary  throughout  the  year,  the  value of the
securities  of each of the  companies as compared to the total assets of The Dow
Target 10 Series will fluctuate  during the year, above and below the proportion
established on the annual Stock  Selection Date. At the Stock Selection Date for
The Dow Target 10 Series,  new securities  will be selected and a new percentage
relationship will be established among the number of securities for the Series.

The sub-adviser may, but will not necessarily,  utilize derivative  instruments,
such  as  options,  futures  contracts,  forward  contracts,  warrants,  indexed
securities and repurchase agreements, for hedging and risk management.

Derivative  instruments involve special risks. The value of derivatives may rise
or fall more rapidly than other  investments,  which may increase the volatility
of the Series  depending  on the nature  and  extent of the  derivatives  in the
Series'  portfolio.   Additionally,  if  the  sub-adviser  uses  derivatives  in
attempting to manage or "hedge" the overall risk of the Series'  portfolio,  the
strategy  might not be successful,  for example,  due to changes in the value of
the derivatives  that do not correlate with prices  movements in the rest of the
portfolio.

The  investment  objectives  and  policies  of The Dow  Target 10 Series are not
fundamental  and may be changed by the Board of  Managers  of the Fund,  without
interest holder approval.

Certain  provisions of the  Investment  Company Act of 1940 limit the ability of
the Series to invest  more than 5% of the Series'  total  assets in the stock of
any company  that derives more than 15% of its gross  revenues  from  securities
related activities  (Securities Related Companies).  The Fund has applied to the
Securities and Exchange  Commission  (SEC) for an exemption from this limitation
so that The Dow  Target 10 Series may  invest up to 10.5% of the  Series'  total
assets in the stock of Securities  Related  Companies.  Accordingly,  until such
time as the Fund receives approval of its exemption request, or other applicable
relief,  the investment  strategy of The Dow Target 10 Series will be subject to
modification  if the stock  selection  methodology for the Series results in the
selection of one or more Securities Related Companies.  In such an instance, the
Series  will  only  invest  up to 5% of its  total  assets  in  each  applicable
Securities  Related  Company and will invest its  remaining  assets in the other
selected companies in approximately equal amounts.

The SAI  has  more  information  about  The Dow  Target  10  Series'  authorized
investments and strategies, as well as the risks and restrictions that may apply
to them.

DESCRIPTION OF INDEX. The stocks included in The Dow Jones Industrial  AverageSM
are chosen by the editors of The Wall Street  Journal as  representative  of the
broad market and of American industry.  The companies are major factors in their
industries  and their stocks are widely held by  individuals  and  institutional
investors.

The  portfolio  of The Dow Target 10 Series  consists  of the  common  stocks of
companies listed on the DJIA. Except as previously  described,  the publisher of
the DJIA has not granted the Fund or the Fund's investment  adviser a license to
use its index. The Dow Target 10 Series is not designed or intended to result in
prices  that  parallel or  correlate  with the  movements  in the DJIA and it is
expected that its prices will not parallel or correlate with such movements. The
publisher  of the DJIA has not  participated  in any way in the  creation of the
Fund or the Series or in the selection of stocks in the Series.

YEAR 2000 AND EURO ISSUES.  Apart from the particular risks described above, the
Fund could be  adversely  affected if the  computer  systems  used by the Fund's
investment  adviser,  sub-adviser  or its other service  providers are unable to
process and calculate  date-related  information because they are not programmed
to distinguish  between the year 2000 and the year 1900.  This is commonly known
as the "Year 2000 Problem."

The Fund relies entirely on outside service  providers for the processing of its
business.  To the extent that a service provider  utilizes  computers to process
the Fund's business,  the smooth operation of the Fund depends on the ability of
those computers to continue to function properly.

The Fund has  contacted  each of its service  providers to ascertain the service
provider's  state of readiness for the year 2000. Each of the service  providers
has indicated to the Fund that,  at this time, it is either Year 2000  compliant
or that  it has  identified  its  systems  which  are not  currently  Year  2000
compliant and that it intends to make such systems compliant before December 31,
1999.  The Fund  intends  to  continue  to monitor  the Year 2000  status of its
service providers.

Based on the information  currently available,  the Fund does not anticipate any
material impact on the delivery of services to and by the Fund.  However,  since
the Fund must rely on the information  provided to it by its service  providers,
there can be no  assurance  that the steps  taken by the  service  providers  in
preparation  for the Year 2000 will be sufficient to avoid any adverse impact on
the Fund.

Similarly,  the  companies  and other  issuers in which The Dow Target 10 Series
invests could be adversely affected by year 2000 computer-related  problems, and
there can be no assurance that the steps taken, if any, by these issuers will be
sufficient to avoid any adverse impact on the Series.

LEGISLATION.  At any time after the date of the  Prospectus,  legislation may be
enacted  that could  negatively  affect  the  common  stock in The Dow Target 10
Series or the issuers of such common  stock.  Further,  changing  approaches  to
regulation may have a negative  impact on certain  companies  represented in The
Dow  Target  10  Series.  There can be no  assurance  that  future  legislation,
regulation or deregulation will not have a material adverse effect on the Series
or will not impair the  ability of the  issuers of the common  stock held in the
Series to achieve their business goals.



<PAGE>


                             MANAGEMENT OF THE FUND

INVESTMENT ADVISER

Under  Delaware  law and the  Fund's  Certificate  of  Formation  and  Operating
Agreement,  the  management  of the  business  and  affairs  of the  Fund is the
responsibility of the Board of Managers of the Fund.

Jackson National Financial Services,  LLC (JNFS), 5901 Executive Drive, Lansing,
Michigan 48911, is the investment adviser to the Fund and provides the Fund with
professional  investment  supervision  and  management.  JNFS is a wholly  owned
subsidiary of Jackson  National Life Insurance  Company (JNL),  which is in turn
wholly owned by  Prudential  Corporation  plc, a life  insurance  company in the
United Kingdom. JNFS is a successor to Jackson National Financial Services, Inc.
which  served as an  investment  adviser to the JNL Series  Trust,  a registered
investment  company,  from its inception until July 1, 1998, when it transferred
its duties as  investment  adviser  and its  professional  staff for  investment
advisory services to JNFS.

JNFS has  selected  First  Trust  Advisors  L.P.  as  sub-adviser  to manage the
investment  and  reinvestment  of the  assets of the  Series  of the Fund.  JNFS
monitors the compliance of the  sub-adviser  with the investment  objectives and
related  policies of The Dow Target 10 Series and reviews the performance of the
sub-adviser  and  reports  periodically  on such  performance  to the  Board  of
Managers of the Fund.

As compensation for its services,  JNFS receives a fee from the Fund. The fee is
stated as an annual  percentage of the net assets of the Series.  The fee, which
is accrued daily and payable monthly,  is calculated on the basis of the average
net  assets of The Dow  Target 10  Series.  Once the  average  net assets of the
Series exceed specified amounts, the fee is reduced with respect to such excess.

The Dow Target 10 Series is obligated to pay JNFSLLC the following fee:

     ASSETS                                                          FEES

     $0 to $500 million.............................................. .75%
     $500 million to $1 billion...................................... .70%
     Over $1 billion................................................. .65%

INVESTMENT SUB-ADVISER

First Trust Advisors L.P. (First Trust), an Illinois limited  partnership formed
in 1991 and an investment  adviser  registered with the SEC under the Investment
Advisers Act of 1940,  is the  sub-adviser  for The Dow Target 10 Series.  First
Trust's address is 1001 Warrenville Road, Lisle,  Illinois 60532. First Trust is
a limited  partnership with one limited partner,  Grace Partners of Dupage L.P.,
and one general partner, Nike Securities  Corporation.  Grace Partners of Dupage
L.P.  is a  limited  partnership  with  one  general  partner,  Nike  Securities
Corporation, and a number of limited partners. Nike Securities Corporation is an
Illinois corporation controlled by Robert Donald Van Kampen.

As of the date of this  Prospectus,  The Dow Target 10 Series had not  commenced
investment operations.  However, First Trust is also the portfolio supervisor of
certain  unit  investment   trusts  sponsored  by  Nike  Securities  L.P.  (Nike
Securities) which are substantially  similar to the Series in that they have the
same investment  objectives as the Series but have a life of  approximately  one
year. Nike Securities specializes in the underwriting,  trading and distribution
of unit investment  trusts and other  securities.  Nike Securities,  an Illinois
limited partnership formed in 1991, acts as sponsor for successive series of The
First Trust Combined Series, The First Trust Special Situations Trust, the First
Trust Insured  Corporate Trust,  The First Trust of Insured  Municipal Bonds and
the First Trust GNMA.

Under the terms of the  Sub-Advisory  Agreement  between  First  Trust and JNFS,
First Trust manages the  investment  and  reinvestment  of the assets of The Dow
Target 10 Series, subject to the oversight and supervision of JNFS and the Board
of Managers of the Fund. First Trust formulates a continuous  investment program
for the Series  consistent with its investment  objectives and policies outlined
in this Prospectus.  First Trust implements such programs by purchases and sales
of  securities  and  regularly  reports to JNFS and the Board of Managers of the
Fund with respect to the implementation of such programs.

As compensation for its services,  First Trust receives a fee from JNFS,  stated
as an annual  percentage of the net assets of The Dow Target 10 Series.  The SAI
contains a schedule of the  management  fees JNFS  currently is obligated to pay
First Trust out of the advisory fee it receives from The Dow Target 10 Series.

PORTFOLIO MANAGEMENT

There  is no one  individual  primarily  responsible  for  portfolio  management
decisions  for the  Series.  Investments  are  made  under  the  direction  of a
committee.

                               ADMINISTRATIVE FEE

In addition to the  investment  advisory  fee,  The Dow Target 10 Series pays to
JNFS an  Administrative  Fee of .10% of the  average  daily  net  assets  of the
Series.  In  return  for the  fee,  JNFS  provides  or  procures  all  necessary
administrative  functions  and  services  for the  operation  of the Series.  In
addition, JNFS, at its own expense,  arranges for legal, audit, fund accounting,
custody,  printing  and  mailing,  and  all  other  services  necessary  for the
operation  of the  Series.  The  Series  is  responsible  for  trading  expenses
including  brokerage  commissions,  interest and taxes, and other  non-operating
expenses.

                          INVESTMENT IN FUND INTERESTS

Interests in the Fund are currently sold to Jackson National Separate Account V,
a separate  account of JNL, 5901 Executive  Drive,  Lansing,  Michigan 48911, to
fund the benefits under certain  variable  annuity  contracts  (Contracts).  The
Separate  Account  purchases  interests  in the Series at net asset  value using
premiums  received on  Contracts  issued by JNL.  Purchases  are effected at net
asset  value next  determined  after the  purchase  order,  in proper  form,  is
received by the Fund's transfer agent. There is no sales charge.

Interests in the Fund are not available to the general public directly.  The Dow
Target 10 Series is managed by a sub-adviser who manages publicly available unit
investment  trusts having  similar names and  investment  objectives.  While the
Series may be similar to, and may in fact be modeled  after  publicly  available
unit investment trusts, Contract purchasers should understand that the Series is
not otherwise  directly related to any publicly available unit investment trust.
Consequently,  the investment  performance of publicly available unit investment
trusts and the Series may differ substantially.

The net asset value per  interest of The Dow Target 10 Series is  determined  at
the close of regular trading on the New York Stock Exchange (normally 4:00 p.m.,
Eastern time) each day that the New York Stock  Exchange is open.  The net asset
value per interest is calculated by adding the value of all securities and other
assets of the Series,  deducting its liabilities,  and dividing by the number of
interests  outstanding.  Generally,  the  value of  exchange-listed  or  -traded
securities is based on their respective market prices, bonds are valued based on
prices provided by an independent pricing service and short-term debt securities
are valued at amortized cost, which approximates market value.

All investments in the Fund are credited to the interest holder's account in the
form of full and fractional  shares of the Series (rounded to the nearest 1/1000
of a share). The Fund does not issue interest certificates.

                          REDEMPTION OF FUND INTERESTS

Jackson National Separate Account V redeems shares to make benefit or withdrawal
payments under the terms of its Contracts.  Redemptions are processed on any day
on which the Fund is open for  business and are effected at net asset value next
determined after the redemption order, in proper form, is received.

The Fund may suspend the right of redemption  only under the  following  unusual
circumstances:

     o    when the New York Stock  Exchange is closed  (other than  weekends and
          holidays) or trading is restricted;

     o    when an emergency exists,  making disposal of portfolio  securities or
          the valuation of net assets not reasonably practicable; or

     o    during any period when the SEC has by order  permitted a suspension of
          redemption for the protection of shareholders.

                                   TAX STATUS

GENERAL

The Fund is a limited  liability  company with all of its  interests  owned by a
single entity,  Jackson National  Separate Account V.  Accordingly,  the Fund is
taxed  as  part of the  operations  of JNL and is not  taxed  separately.  Under
current tax law, interest, dividend income and capital gains of the Fund are not
currently  taxable when left to accumulate  within a variable annuity  contract.
For a discussion of the tax status of the variable annuity policy,  please refer
to the prospectus for Jackson National Separate Account V.

INTERNAL REVENUE SERVICE DIVERSIFICATION REQUIREMENTS

The Series  intend to comply  with the  diversification  requirements  currently
imposed by the  Internal  Revenue  Service on  separate  accounts  of  insurance
companies as a condition of maintaining  the tax deferred status of the variable
annuity policies issued by Jackson National Separate Account V. The Sub-Advisory
Agreement   requires  the  Series  to  be  operated  in  compliance  with  these
diversification requirements. First Trust, as sub-adviser, reserves the right to
depart from the investment strategy of The Dow Target 10 Series in order to meet
these diversification requirements. See the SAI for more specific information.



<PAGE>


              HYPOTHETICAL PERFORMANCE DATA FOR THE TARGET STRATEGY

As of the date of this  Prospectus,  The Dow Target 10 Series had not  commenced
investment operations.  However,  certain aspects of the investment strategy for
The Dow  Target  10  Series  can be  demonstrated  using  historical  data.  The
following  table  illustrates  the  hypothetical  performance  of the investment
strategy  used by The Dow  Target 10 Series and the  actual  performance  of the
DJIA. The table also shows how performance varies from year to year.

The  information  for the Target  Strategy  assumes  that the Strategy was fully
invested as of the beginning of each year and that each Stock Selection Date was
the first of the year. In addition,  the performance  information  does not take
into  consideration  any sales charges,  commissions,  insurance fees or charges
imposed on the sale of the variable annuity policies,  expenses or taxes. Any of
such charges will lower the returns shown.


The returns  shown below for the Target  Strategy does not represent the results
of  actual  trading  using  client  assets  but  were  achieved  by means of the
retroactive  application  of a strategy  that was  designed  with the benefit of
hindsight. These returns should not be considered indicative of the skill of the
sub-adviser.  The returns may not reflect the impact that any material market or
economic factors might have had if the Strategy had been used during the periods
shown to actually manage client assets.  During a portion of the period shown in
the table below,  the sub-adviser  acted as the portfolio  supervisor of certain
unit investment  trusts which employed  strategies  similar to the  hypothetical
strategy shown below.

The returns  shown below for the Target  Strategy  are not a guarantee of future
performance and should not be used to predict the expected returns on the Target
Strategy.   In  fact,  the  hypothetical  Target  Strategy   underperformed  its
respective index in certain years.

                     HYPOTHETICAL COMPARISON OF TOTAL RETURN

   Year      Target 10       DJIA
              Strategy
- --------      --------      -------

1979              13.01%      10.60%
1980              27.90%      21.90%
1981               7.46%      -3.61%
1982              27.12%      26.85%
1983              39.07%      25.82%
1984               6.22%       1.29%
1985              29.54%      33.28%
1986              35.63%      27.00%
1987               5.59%       5.66%
1988              24.75%      16.03%
1989              26.97%      32.09%
1990              -7.82%      -0.73%
1991              34.20%      24.19%
1992               7.69%       7.39%
1993              27.08%      16.87%
1994               4.21%       5.03%
1995              36.85%      36.67%
1996              28.35%      28.71%
1997              21.68%      24.82%
1998              10.59%      18.03%


(1) The Target 10  Strategy  for any given  period was  selected  by ranking the
dividend  yields for each of the stocks as of the close of the prior  period and
dividing by the stock's  market  value on the last  trading day on the  exchange
where that stock principally trades in the given period.

(2) The total return shown does not take into  consideration  any sales charges,
commissions,  expenses or taxes.  Total return  assumes that all  dividends  are
reinvested  semi-annually,  and all  returns  are  stated in terms of the United
States dollar.  Based on the year-by-year  returns  contained in the table, over
the 20 full years  listed  above,  the Target 10  Strategy  achieved  an average
annual total  return of 19.57%.  In  addition,  over this  period,  the Strategy
achieved a greater average annual total return than that of the DJIA,  which was
17.28%.  Although the Strategy  seeks to achieve a better  performance  than the
DJIA as a whole,  there can be no  assurance  that the  Strategy  will achieve a
better performance.


<PAGE>



                              FINANCIAL HIGHLIGHTS

The  financial  highlights  information  for  the  Fund is not  included  in the
prospectus  because the Fund had not  commenced  operations  as of the effective
date of this prospectus.


<PAGE>



                                   PROSPECTUS

                                November 23, 1999

                           JNL(R) VARIABLE FUND V LLC

You may find more information about the Fund in the Fund's SAI dated October 11,
1999,  which  contains  further  information  about  the  Fund  and the  Series,
particularly the Series' investment practices and restrictions.  The current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into the  Prospectus  by  reference  (which means the SAI is legally part of the
Prospectus).

You  may  obtain  a copy  of the  current  SAI or the  most  recent  Annual  and
Semi-Annual  Reports without charge,  or make other inquiries,  by calling (800)
766-4683,  or writing the JNL  Variable  Fund V LLC  Service  Center,  P.O.  Box
378002, Denver, Colorado 80237-8002.

You may also obtain  information  about the Fund  (including its current SAI and
most  recent  Annual  and  Semi-Annual  Reports)  from the SEC's  Internet  site
(http://www.sec.gov)  and from the SEC's Public  Reference  Room in  Washington,
D.C.  You can find out about the  operation  of the  Public  Reference  Room and
copying charges by calling (800) SEC-0330.


                                                             File No.: 811-09367

<PAGE>


                       STATEMENT OF ADDITIONAL INFORMATION

                                NOVEMBER 23, 1999

                             JNL VARIABLE FUND V LLC



This Statement of Additional Information (SAI) is not a prospectus.  It contains
information  in addition to and more detailed  than set forth in the  Prospectus
and should be read in conjunction  with the JNL Variable Fund V LLC  Prospectus,
dated  November  23,  1999.  The  Prospectus  may be obtained  by calling  (800)
766-4683, or writing P.O.
Box 378002, Denver, Colorado 80237-8002.




                                TABLE OF CONTENTS

General Information and History............................................   2
Common Types of Investments and Management Practices.......................   2
Additional Risk Considerations.............................................   7
Investment Restrictions....................................................   9
Management of the Fund.....................................................   9
Performance................................................................  12
Investment Advisory and Other Services.....................................  13
Purchases, Redemptions and Pricing of Interests............................  17
Additional Information.....................................................  18
Tax Status.................................................................  19
Financial Statements ......................................................  20




<PAGE>


                         GENERAL INFORMATION AND HISTORY

JNL Variable Fund V LLC (Fund) is a non-diversified, open-end management company
organized as a Delaware limited  liability company on January 26, 1999. The Fund
offers interests in the JNL/First Trust The DowSM Target 10 Series (Series).

              COMMON TYPES OF INVESTMENTS AND MANAGEMENT PRACTICES

This section  describes  some of the types of securities  the Series may hold in
its portfolio and the various kinds of investment  practices that may be used in
day-to-day  portfolio  management.  The  Series  may  invest  in  the  following
securities  or  engage  in the  following  practices  to the  extent  that  such
securities and practices are consistent with the Series' investment objective(s)
and policies described in the Prospectus and in this SAI.

BANK  OBLIGATIONS.  The  Series may invest in bank  obligations,  which  include
certificates  of  deposit,  bankers'  acceptances,  and  other  short-term  debt
obligations.  Certificates  of deposit are short-term  obligations of commercial
banks.  A bankers'  acceptance  is a time draft drawn on a commercial  bank by a
borrower,  usually in connection  with  international  commercial  transactions.
Certificates of deposit may have fixed or variable rates.  The Series may invest
in U.S. banks,  foreign branches of U.S. banks,  U.S. branches of foreign banks,
and foreign branches of foreign banks.

BORROWING  AND LENDING.  The Series may borrow money from banks for temporary or
emergency  purposes  in  amounts  up to 25%  of  its  total  assets.  To  secure
borrowings, the Series may mortgage or pledge securities in amounts up to 15% of
its net assets.

CASH POSITION. The Series may hold a certain portion of its assets in repurchase
agreements  and money  market  securities  maturing in one year or less that are
rated in one of the two highest  rating  categories  by a nationally  recognized
statistical rating organization.  For temporary,  defensive purposes, the Series
may invest without limitation in such securities. This reserve position provides
flexibility in meeting redemptions, expenses, and the timing of new investments,
and serves as a short-term defense during periods of unusual market volatility.

COMMERCIAL  PAPER. The Series may invest in commercial  paper.  Commercial paper
are  short-term  promissory  notes issued by  corporations  primarily to finance
short-term credit needs. Such notes may have fixed or variable rates.

COMMON AND PREFERRED  STOCKS.  The Series may invest in common and/or  preferred
stocks. Stocks represent shares of ownership in a company. Generally,  preferred
stock has a specified dividend and ranks after bonds and before common stocks in
its claim on income for dividend  payments  and on assets  should the company be
liquidated. After other claims are satisfied, common stockholders participate in
company  profits on a pro rata basis;  profits may be paid out in  dividends  or
reinvested  in the company to help it grow.  Increases and decreases in earnings
are usually  reflected in a company's  stock price,  so common stocks  generally
have the greatest  appreciation  and  depreciation  potential  of all  corporate
securities.  While most preferred stocks pay a dividend, the Series may purchase
preferred  stock  where the issuer  has  omitted,  or is in danger of  omitting,
payment of its  dividend.  Such  investments  would be made  primarily for their
capital  appreciation  potential.  Although  common and preferred  stocks have a
history of  long-term  growth in value,  their  prices tend to  fluctuate in the
short term, particularly those of smaller companies.

FUTURES AND OPTIONS.  Futures  contracts are often used to manage risk,  because
they enable the investor to buy or sell an asset in the future at an agreed upon
price.  Options give the investor the right,  but not the obligation,  to buy or
sell an asset at a  predetermined  price in the  future.  The Series may buy and
sell futures contracts (and options on such contracts) to manage its exposure to
changes in securities prices and foreign currencies and as an efficient means of
adjusting  overall exposure to certain markets.  The Series may purchase or sell
call and put options on  securities  and  financial  indices,  and may invest in
futures contracts on financial indices,  including interest rates or an index of
U.S. Government securities, or equity or fixed-income securities.

Futures contracts and options may not always be successful hedges;  their prices
can be highly volatile; using them could lower the Series' total return; and the
potential loss from the use of futures can exceed the Series' initial investment
in such contracts.  These instruments may also be used for non-hedging  purposes
such as increasing the Series' income.

The Series' use of commodity futures and commodity options trading should not be
viewed as providing a vehicle for shareholder participation in a commodity pool.
Rather, in accordance with regulations  adopted by the Commodity Futures Trading
Commission  (CFTC),  the Series will employ such techniques only for (1) hedging
purposes,  or (2)  otherwise,  to the extent that  aggregate  initial margin and
required premiums do not exceed 5 percent of the Series' net assets.

HYBRID INSTRUMENTS.  The Series may purchase hybrid  instruments,  which combine
the  elements  of futures  contracts  or options  with those of debt,  preferred
equity or a depository instrument. Often these hybrid instruments are indexed to
the price of  commodity,  a particular  currency,  or a domestic  debt or common
stock index. Hybrid instruments may take a variety of forms, including,  but not
limited to, debt instruments  with interest or principal  payments or redemption
terms  determined  by  reference  to the value of a  currency  or  commodity  or
securities index at a future point in time,  preferred stock with dividend rates
determined by reference to the value of a currency,  or  convertible  securities
with the conversion terms related to a particular commodity.

ILLIQUID  SECURITIES.  The  Series  may  hold  illiquid  investments.   Illiquid
investments are  investments  that cannot be sold or disposed of in the ordinary
course of business  within seven days at  approximately  the price at which they
are valued.  Illiquid investments  generally include:  repurchase agreements not
terminable  within seven days;  securities  for which market  quotations are not
readily  available;  restricted  securities  not  determined  to  be  liquid  in
accordance  with  guidelines  established  by  the  Fund's  Board  of  Managers;
over-the-counter  (OTC)  options  and, in certain  instances,  their  underlying
collateral; and securities involved in swap, cap, collar and floor transactions.

MONEY MARKET  FUNDS.  The Fund may invest in shares of money market funds to the
extent permitted by the Investment Company Act of 1940, as amended.

PORTFOLIO  TURNOVER.  To a limited  extent,  the Series may engage in short-term
transactions if such transactions further its investment  objective.  The Series
may sell one security and simultaneously  purchase another of comparable quality
or  simultaneously  purchase  and sell the same  security to take  advantage  of
short-term  differentials  in  bond  yields  or  otherwise  purchase  individual
securities in anticipation  of relatively  short-term  price gains.  The rate of
portfolio  turnover will not be a determining factor in the purchase and sale of
such  securities.   Increased   portfolio   turnover   necessarily   results  in
correspondingly  higher costs including brokerage  commissions,  dealer mark-ups
and other  transaction costs on the sale of securities and reinvestment in other
securities, and may result in the acceleration of taxable gains.

REPURCHASE AGREEMENTS AND REVERSE REPURCHASE  AGREEMENTS.  The Series may invest
in repurchase or reverse repurchase agreements.  A repurchase agreement involves
the purchase of a security by the Series and a simultaneous agreement (generally
by a bank or dealer) to repurchase  that security from the Series at a specified
price and date or upon demand.  This technique offers a method of earning income
on idle cash. A repurchase  agreement may be considered a loan collateralized by
the  underlying  security.  The  Series  must take  physical  possession  of the
security or receive  written  confirmation  of the  purchase  and a custodial or
safekeeping  receipt  from a third  party  or be  recorded  as the  owner of the
security through the Federal Reserve Book Entry System.

The Series may invest in open repurchase  agreements which vary from the typical
agreement in the following respects:  (1) the agreement has no set maturity, but
instead  matures  upon 24 hours'  notice to the seller;  and (2) the  repurchase
price is not  determined  at the time the  agreement  is  entered  into,  but is
instead based on a variable interest rate and the duration of the agreement.  In
addition, the Series, together with other registered investment companies having
management  agreements with a common investment  adviser or its affiliates,  may
transfer  uninvested  cash  balances  into a single  joint  account,  the  daily
aggregate  balance  of  which  will  be  invested  in  one  or  more  repurchase
agreements.

When the Series invests in a reverse repurchase agreement,  it sells a portfolio
security  to another  party,  such as a bank or a  broker-dealer,  in return for
cash,  and agrees to buy the security  back at a future date and price.  Reverse
repurchase  agreements  may be used to provide cash to satisfy  unusually  heavy
redemption  requests or for other  temporary or emergency  purposes  without the
necessity  of  selling  portfolio  securities  or to earn  additional  income on
portfolio securities, such as Treasury bills and notes.

SECURITIES LENDING.  The Series may also lend common stock to broker-dealers and
financial  institutions to realize additional  income. As a fundamental  policy,
the Series will not lend common stock or other assets, if as a result, more than
33 1/3% of the  Series'  total  assets  would  be lent to other  parties.  Under
applicable regulatory  requirements (which are subject to change), the following
conditions apply to securities loans: (a) the loan must be continuously  secured
by liquid  assets  maintained  on a current basis in an amount at least equal to
the market  value of the  securities  loaned;  (b) the Series  must  receive any
dividends or interest paid by the issuer on such securities; (c) the Series must
have the right to call the loan and  obtain  the  securities  loaned at any time
upon notice of not more than five business days, including the right to call the
loan to permit voting of the securities;  and (d) the Series must receive either
interest from the investment of collateral or a fixed fee from the borrower.

Securities lending,  as with other extensions of credit,  involves the risk that
the borrower may default. Although securities loans will be fully collateralized
at all times,  the  Series  may  experience  delays  in, or be  prevented  from,
recovering  the  collateral.  During the period that the Series seeks to enforce
its rights against the borrower, the collateral and the securities loaned remain
subject to fluctuations  in market value.  The Series does not have the right to
vote  securities on loan,  but would  terminate the loan and regain the right to
vote if it were considered important with respect to the investment.  The Series
may also incur expenses in enforcing its rights. If the Series has sold a loaned
security,  it may not be able to settle the sale of the  security  and may incur
potential  liability to the buyer of the security on loan for its costs to cover
the purchase.

SECURITY-RELATED  ISSUERS.  The  Fund  is  seeking  exemptive  relief  from  the
Securities and Exchange Commission to allow the Series to invest more than 5% of
their assets in the  securities  of any issuer that derives more than 15 percent
of its gross revenue from  "securities  related  activities" (as defined in rule
12d3-1 under the Investment Company Act of 1940). Until such relief is received,
despite any investment strategy, the Series will not be able to invest more than
5% of their assets in such issuers.

SHORT SALES. The Series may sell securities short. A short sale is the sale of a
security  the Series does not own. It is "against  the box" if at all times when
the short  position is open the Series owns an equal amount of the securities or
securities  convertible into, or exchangeable without further consideration for,
securities of the same issue as the  securities  sold short.  To the extent that
the  Series  engages  in short  sales  that are not  "against  the box," it must
maintain  asset  coverage in the form of assets  determined  to be liquid by the
sub-adviser in accordance with procedures  established by the Board of Managers,
in a  segregated  account,  or  otherwise  cover its  position in a  permissible
manner.

U.S. GOVERNMENT SECURITIES.  U.S. Government securities are issued or guaranteed
as to principal and interest by U.S. Government  agencies or  instrumentalities.
These include  securities  issued by the Federal National  Mortgage  Association
(Fannie Mae),  Government  National Mortgage  Association  (Ginnie Mae), Federal
Home Loan Bank,  Federal  Land Banks,  Farmers  Home  Administration,  Banks for
Cooperatives,  Federal  Intermediate Credit Banks,  Federal Financing Bank, Farm
Credit  Banks,   the  Small   Business   Association,   Student  Loan  Marketing
Association,  and the Tennessee Valley Authority. Some of these securities, such
as those issued by Ginnie Mae, are supported by the full faith and credit of the
U.S.  Treasury;  others,  such as those of  Fannie  Mae,  are  supported  by the
discretionary  authority  of  the  U.S.  Government  to  purchase  the  agency's
obligations;  and still  others,  such as those of the  Student  Loan  Marketing
Association,  are  supported  only  by the  credit  of the  instrumentality.  No
assurance can be given that the U.S.  Government will provide  financial support
to U.S. Government agencies or  instrumentalities  in the future,  other than as
set forth above, since it is not obligated to do so by law.

U.S. GOVERNMENT  OBLIGATIONS.  U.S. Government obligations include bills, notes,
bonds, and other debt securities issued by the U.S.  Treasury.  These are direct
obligations  of the U.S.  Government  and  differ  mainly in the length of their
maturities.

WARRANTS. The Series may invest in warrants. Warrants have no voting rights, pay
no dividends  and have no rights with  respect to the assets of the  corporation
issuing  them.  Warrants  basically  are options to purchase  common  stock at a
specific  price  valid  for a  specific  period of time.  They do not  represent
ownership of the  securities,  but only the right to buy them.  Warrants  differ
from call  options in that  warrants  are  issued by the issuer of the  security
which may be purchased on their exercise, whereas call options may be written or
issued by anyone. The prices of warrants do not necessarily move parallel to the
prices of the underlying securities.

WRITING COVERED OPTIONS ON SECURITIES. The Series may write covered call options
and  covered put options on  optionable  securities  of the types in which it is
permitted  to  invest  from  time  to  time  as the  sub-adviser  determines  is
appropriate in seeking to attain the Series' investment objective.  Call options
written by the Series give the holder the right to buy the  underlying  security
from the Series at a stated  exercise  price;  put  options  give the holder the
right to sell the underlying security to the Series at a stated price.

The Series may only write call options on a covered  basis or for  cross-hedging
purposes  and will  only  write  covered  put  options.  A put  option  would be
considered  "covered"  if the  Series  owns an  option  to sell  the  underlying
security subject to the option having an exercise price equal to or greater than
the exercise price of the "covered"  option at all times while the put option is
outstanding.  A call  option is covered  if the Series  owns or has the right to
acquire the  underlying  securities  subject to the call  option (or  comparable
securities  satisfying the cover  requirements  of securities  exchanges) at all
times during the option period. A call option is for  cross-hedging  purposes if
it is not covered,  but is designed to provide a hedge against another  security
which the Series owns or has the right to acquire. In the case of a call written
for  cross-hedging  purposes  or a put  option,  the Series  will  maintain in a
segregated  account  at the  Series'  custodian  bank  cash or  short-term  U.S.
government  securities  with a  value  equal  to or  greater  than  the  Series'
obligation under the option.  The Series may also write  combinations of covered
puts and covered calls on the same underlying security.

The Series will receive a premium from writing an option,  which  increases  the
Series' return in the event the option expires unexercised or is terminated at a
profit.  The  amount of the  premium  will  reflect,  among  other  things,  the
relationship  of the market  price of the  underlying  security to the  exercise
price of the option,  the term of the option,  and the  volatility of the market
price of the  underlying  security.  By writing a call  option,  the Series will
limit its  opportunity  to profit from any  increase in the market  value of the
underlying  security  above the exercise  price of the option.  By writing a put
option,  the Series will assume the risk that it may be required to purchase the
underlying  security for an exercise  price higher than its then current  market
price,  resulting in a potential  capital loss if the purchase price exceeds the
market price plus the amount of the premium received.

The Series may terminate an option which it has written prior to its  expiration
by entering into a closing purchase  transaction in which it purchases an option
having the same terms as the option  written.  The Series will  realize a profit
(or loss)  from such  transaction  if the cost of such  transaction  is less (or
more)  than  the  premium  received  from the  writing  of the  option.  Because
increases in the market price of a call option will generally  reflect increases
in the market price of the  underlying  security,  any loss  resulting  from the
repurchase  of a call  option  may be offset  in whole or in part by  unrealized
appreciation of the underlying security owned by the Series.

                         ADDITIONAL RISK CONSIDERATIONS

FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS.  The use of futures, options,
forward  contracts,  and swaps  (derivative  instruments)  exposes the Series to
additional  investment risks and transaction  costs. If the sub-adviser seeks to
protect  the Series  against  potential  adverse  movements  in the  securities,
foreign  currency or interest  rate markets  using these  instruments,  and such
markets do not move in a direction  adverse to the Series,  the Series  could be
left in a less  favorable  position than if such  strategies  had not been used.
Risks  inherent  in the use of futures,  options,  forward  contracts  and swaps
include:  (1) the risk that  interest  rates,  securities  prices  and  currency
markets will not move in the directions  anticipated;  (2) imperfect correlation
between the price of derivative  instruments  and movements in the prices of the
securities,  interest rates or currencies being hedged; (3) the fact that skills
needed  to use  these  strategies  are  different  from  those  needed to select
portfolio securities;  (4) the possible absence of a liquid secondary market for
any  particular  instrument  at any  time;  and (5) the  possible  need to defer
closing out certain hedged positions to avoid adverse tax consequences.

HYBRID  INSTRUMENTS.  The risks of  investing  in hybrid  instruments  reflect a
combination  of the risks of  investing  in  securities,  options,  futures  and
currencies, including volatility and lack of liquidity. Reference is made to the
discussion of "Futures,  Options, and Other Derivative Instruments" herein for a
discussion of these risks.  Further, the prices of the hybrid instrument and the
related  commodity or currency may not move in the same direction or at the same
time. Hybrid  instruments may bear interest or pay preferred  dividends at below
market (or even relatively nominal) rates. Alternatively, hybrid instruments may
bear  interest at above  market  rates but bear an  increased  risk of principal
loss.  In addition,  because the purchase and sale of hybrid  instruments  could
take place in an over-the-counter or in a private transaction between the Series
and  the  seller  of  the  hybrid  instrument,   the   creditworthiness  of  the
counter-party  to the transaction  would be a risk factor which the Series would
have to consider.  Hybrid  instruments  also may not be subject to regulation of
the Commodity Futures Trading Commission,  which generally regulates the trading
of commodity  futures by U.S. persons,  the Securities and Exchange  Commission,
which regulates the offer and sale of securities by and to U.S. persons,  or any
other governmental regulatory authority.

INSURANCE  LAW  RESTRICTIONS.  In connection  with the Fund's  agreement to sell
interests in the Fund to Jackson National Separate Account V (Separate Account),
Jackson  National  Financial  Services,  LLC (JNFS) and  Jackson  National  Life
Insurance  Company (JNL) may enter into  agreements  with the Fund,  required by
certain state insurance departments,  under which JNFS may agree to use its best
efforts to assure and to permit JNL to monitor that the Series complies with the
investment  restrictions and limitations  prescribed by state insurance laws and
regulations applicable to the investment of separate account assets in shares of
mutual  funds.  If the  Series  failed  to  comply  with  such  restrictions  or
limitations,  JNL would take appropriate action,  which might include ceasing to
make  investments  in the Fund  and/or  Series  or  withdrawing  from the  state
imposing the limitation.  Such  restrictions and limitations are not expected to
have a significant impact on the Fund's operations.

INVESTMENT  STRATEGY RISKS.  The common stock selected for the Series  generally
share  attributes  that have caused them to have lower  prices or higher  yields
relative to other stocks in their respective index or exchange. The common stock
may, for example, be experiencing  financial  difficulty,  or be out of favor in
the market  because of weak  performance,  poor  earnings  forecasts or negative
publicity;  or they may be reacting to general  market  cycles.  There can be no
assurance that the market factors that caused the relatively low prices and high
dividend  yields of the common stock will change,  that any negative  conditions
adversely  affecting  the stock prices will not  deteriorate,  that the dividend
rates on the common  stock will be  maintained  or that  share  prices  will not
decline  further  during the life of the Series,  or that the common  stock will
continue to be included in the  respective  indices or  exchanges.  Investing in
stocks with the highest dividend yields amounts to a contrarian strategy because
these shares are often out of favor. Such strategy may be effective in achieving
the  Series'  investment  objective  because  regular  dividends  are common for
established  companies  and  dividends  have often  accounted  for a substantial
portion of the total return on stocks of the index as a group. However, there is
no  guarantee  that  either the Series'  objective  will be achieved or that the
Series will provide for capital  appreciation in excess of the Series' expenses.
Because of the contrarian  nature of the Series and the attributes of the common
stock which caused inclusion in the portfolio, the Series may not be appropriate
for investors seeking either  preservation of capital or high current income. In
addition,  the strategy for the Series has  underperformed  its index in certain
years.

LITIGATION.  Certain  of the  issuers  of common  stock may be  involved  in the
manufacture,  distribution  and sale of  tobacco  products.  Pending  litigation
proceedings  against such  issuers in the United  States and abroad cover a wide
range of matters including product  liability and consumer  protection.  Damages
claimed in such litigation  alleging  personal injury (both individual and class
actions), and in health cost recovery cases brought by governments, labor unions
and  similar  entities  seeking  reimbursement  for  health  case  expenditures,
aggregate many billions of dollars.

In November 1998,  certain  companies in the U.S.  tobacco  industry,  including
Philip Morris,  entered into a negotiated  settlement  with several states which
would result in the resolution of significant  litigation and regulatory  issues
affecting  the  tobacco  industry  generally.  The  proposed  settlement,  while
extremely  costly  to  the  tobacco   industry,   would   significantly   reduce
uncertainties facing the industry and increase stability in business and capital
markets.  Future litigation and/or legislation could adversely affect the value,
operating revenues and financial position of tobacco companies.

To the best of the Fund's knowledge, other than tobacco litigation,  there is no
litigation  pending as of the date of this  Statement of Additional  Information
with  respect to any common stock which might  reasonably  be expected to have a
material  adverse  effect  on the  Series.  At any time  after  the date of this
Statement of Additional  Information,  litigation may be instituted on a variety
of grounds with respect to the common  stock held in the Series  portfolio.  The
Fund is unable to predict whether any such litigation will be instituted,  or if
instituted,  whether such litigation might have a material adverse effect on the
Fund.

                             INVESTMENT RESTRICTIONS

FUNDAMENTAL  POLICIES.  The  following  fundamental  policies may not be changed
without  the  affirmative  vote  of  the  majority  of  the  outstanding  voting
securities of the Fund. The Investment  Company Act of 1940 (1940 Act) defines a
majority  vote  as the  vote of the  lesser  of (i)  67% of the  Fund  interests
represented at a meeting at which more than 50% of the outstanding interests are
represented or (ii) more than 50% of the outstanding voting interests.

         (1)      The Series may not issue senior securities.

         (2)      The Series  will not borrow  money,  except for  temporary  or
                  emergency purposes,  from banks. The aggregate amount borrowed
                  shall not exceed 25% of the value of the  Series'  assets.  In
                  the case of any borrowing,  the Series may pledge, mortgage or
                  hypothecate up to 15% of its assets.

         (3)      The Series will not underwrite the securities of other issuers
                  except to the extent the Fund may be considered an underwriter
                  under  the  Securities  Act of  1933  when  selling  portfolio
                  securities.

         (4)      The Series will not  purchase or sell real estate or interests
                  therein.

         (5)      The Series  will not lend any  security or make any other loan
                  if, as a result, more than 33 1/3% of the Series' total assets
                  would be lent to other parties (but this  limitation  does not
                  apply to purchases of  commercial  paper,  debt  securities or
                  repurchase agreements).

         (6)      The Series may invest in  repurchase  agreements  and warrants
                  and engage in futures and options  transactions and securities
                  lending.

The  Series  is not a  "diversified  company,"  as that term is  defined  in the
Investment  Company Act of 1940,  as amended.  There are no  limitations  on the
concentration of the investments  held by the Series in any particular  industry
or group of industries.

                             MANAGEMENT OF THE FUND

The officers of the Fund manage its day to day operations and are responsible to
the  Fund's  Board of  Managers.  The Board of  Managers  of the Fund sets broad
policies for the Series and chooses the Fund's officers. The following is a list
of the  Managers  and  officers  of the Fund and a  statement  of their  present
positions and principal occupations during the past five years.

For  purposes of this  section,  the term "Fund  Complex"  includes  each of the
following  investment  companies:  JNL Series Trust,  JNL Variable Fund LLC, JNL
Variable Fund III LLC, JNL Variable Fund V LLC,  JNLNY  Variable Fund I LLC, and
JNLNY  Variable  Fund II LLC.  Each of the Fund's  Managers is also a Trustee or
Manager of each of the other  funds in the Fund  Complex  and each of the Fund's
officers is also an officer of one or more of the funds in the Fund Complex.

ANDREW B. HOPPING* (Age 40),  5901  Executive  Drive,  Lansing,  Michigan  48911
Member of the Board of  Managers  of the Fund and each of the other funds in the
Fund Complex  President and Chief Executive  Officer of the Fund and each of the
other funds in the Fund Complex JNL Series Trust,  Vice President (8/96 to 8/97)
JNL Series Trust,  Treasurer  (8/96 to 8/97) JNL Series Trust,  Chief  Financial
Officer (8/96 to 8/97) Jackson National Financial Services, LLC, President (3/98
to present)  Jackson National  Financial  Services,  LLC,  Managing Board Member
(3/98 to present)  Jackson  National  Life  Insurance  Company,  Executive  Vice
President  (7/98 to present)  Jackson  National Life  Insurance  Company,  Chief
Financial  Officer (12/97 to present) Jackson  National Life Insurance  Company,
Senior  Vice  President  (6/94  to 7/98)  National  Planning  Corporation,  Vice
President  (5/98 to  7/98)  National  Planning  Corporation,  Director  (6/97 to
present) Jackson National Financial  Services,  Inc., CEO (7/97 to 5/98) Jackson
National Financial Services,  Inc., President (7/97 to 5/98) Countrywide Credit,
Executive Vice President (3/92 to 6/94)

JOSEPH FRAUENHEIM (Age 64), 1405 Cambridge, Lansing, MI  48911
Member of the Board of  Managers  of the Fund and each of the other funds in the
Fund Complex Consultant (1991 to present)

ROBERT A. FRITTS* (Age 50) 5901 Executive Drive, Lansing,  Michigan 48911 Member
of the Board of  Managers  of the Fund and each of the  other  funds in the Fund
Complex Vice President,  Treasurer and Chief  Financial  Officer of the Fund and
each of the  other  funds  in the  Fund  Complex  JNL  Series  Trust,  Assistant
Treasurer (2/96 to August 1997) JNL Series Trust,  Assistant Secretary (12/94 to
2/96) Jackson National Life Insurance Company, Vice President and Controller

THOMAS J. MEYER (Age 52) 5901 Executive Drive, Lansing, Michigan 48911
Vice President, Secretary and Counsel of the Fund and each of the other funds in
the Fund Complex Jackson National Life Insurance Company,  Senior Vice President
(7/98 to present)  Jackson National Life Insurance  Company,  Secretary (9/94 to
present)  Jackson  National Life  Insurance  Company,  General  Counsel (3/85 to
present) Jackson National Life Insurance Company, Vice President (3/85 to 7/98)

RICHARD MCLELLAN (Age 57), 1191 Carriageway North, East Lansing, MI  48823
Member of the Board of  Managers  of the Fund and each of the other funds in the
Fund Complex Dykema Gossett PLLC, Attorney

PETER MCPHERSON (Age 58), 1 Abbott Road, East Lansing, MI  48824
Member of the Board of  Managers  of the Fund and each of the other funds in the
Fund Complex Michigan State University, President (10/93 to present)

MARK D. NERUD (Age 33) 225 West Wacker Drive, Suite 1200, Chicago, IL  60606
Vice  President and Assistant  Treasurer of the Fund and each of the other funds
in the Fund Complex Jackson National  Financial  Services,  LLC, Chief Financial
Officer (3/98 to present) Jackson National  Financial  Services,  LLC,  Managing
Board Member (3/98 to present)  National  Planning  Corporation,  Vice President
(5/98 to present) Jackson National Financial  Services,  Inc., Director (1/98 to
5/98) Jackson National Financial  Services,  Inc., Chief Operating Officer (6/97
to 5/98) Jackson National  Financial  Services,  Inc.,  Treasurer (6/97 to 5/98)
Jackson National Life Insurance Company,  Assistant Vice President - Mutual Fund
Operations (5/97 to present) Jackson National Life Insurance Company,  Assistant
Vice  President  (10/96  to  4/97)  Jackson  National  Life  Insurance  Company,
Assistant  Controller  (10/96 to 4/97) Jackson National Life Insurance  Company,
Senior  Manager  -  Mutual  Fund  Operations  (4/96  to  10/96)  Voyageur  Asset
Management Company, Manager - Mutual Fund Accounting (5/93 to 4/96)

*Managers who are interested persons as defined in the 1940 Act.

The  officers  of the Fund and the  Managers  who are  "interested  persons"  as
designated above receive no compensation from the Fund.  Disinterested  Managers
will be paid  $4,000 for each  meeting of a fund in the Fund  Complex  that they
attend.  It is  estimated  that the  disinterested  Managers  will  receive  the
following  compensation  for services as a Manager  during the fiscal year ended
December 31, 1999:

<TABLE>
<CAPTION>

                                                              PENSION OR RETIREMENT
                            AGGREGATE COMPENSATION FROM    BENEFITS ACCRUED AS PART OF      TOTAL COMPENSATION FROM
                                       FUND*                      TRUST EXPENSES            FUND AND FUND COMPLEX*
         TRUSTEE
- -----------------------    ----------------------------   -----------------------------   ----------------------------
<S>                                  <C>                                   <C>                       <C>
Joseph Frauenheim                      $2,666.66                             0                         $16,000
Richard McLellan                        2,666.66                             0                          16,000
Peter McPherson                         2,666.66                             0                          16,000
</TABLE>

* The  Fund  does  not  directly  compensate  the  disinterested  Managers.  The
disinterested  Managers are  compensated by JNFS pursuant to the  Administration
Agreement between the Fund and JNFS. (See "Administrative Fee").

As of July 22, 1999,  the officers and managers of the Fund,  as a group,  owned
less than 1% of the then outstanding  shares of the Fund. To the extent required
by applicable law, JNL will solicit voting  instructions from owners of variable
insurance or variable annuity contracts.  All shares of the Series will be voted
by JNL in  accordance  with  voting  instructions  received  from such  variable
contract owners. JNL will vote all of the shares which it is entitled to vote in
the same  proportion  as the  voting  instructions  given by  variable  contract
owners,  on the issues  presented,  including  shares which are  attributable to
JNL's interest in the Fund.

                                   PERFORMANCE

The Series' historical  performance may be shown in the form of total return and
yield. These performance  measures are described below.  Performance  advertised
for the Series may or may not reflect the effect of any charges that are imposed
under a variable  annuity  contract  (Contract) that is funded by the Fund. Such
charges,  described in the prospectus for the Contract,  will have the effect of
reducing the Series' performance.

Standardized  average  annual  total  return and  non-standardized  total return
measure  both the net  investment  income  generated  by,  and the effect of any
realized  and  unrealized   appreciation  or  depreciation  of,  the  underlying
investments of the Series.  Yield is a measure of the net investment  income per
share  earned  over a  specific  one  month  or  30-day  period  expressed  as a
percentage of the net asset value.

The Series'  standardized  average annual total return  quotation is computed in
accordance with a standardized  method prescribed by rules of the Securities and
Exchange  Commission (SEC).  Standardized  average annual total return shows the
percentage rate of return of a hypothetical initial investment of $1,000 for the
most recent one-, five- and ten-year periods,  or for a period covering the time
the Series has been in existence if the Series has not been in existence for one
of the prescribed  periods.  Because average annual total returns tend to smooth
out variations in the Series'  returns,  you should  recognize that they are not
the same as actual year-by-year  results.  The standardized average annual total
return  for the  Series  for a  specific  period  is  found  by  first  taking a
hypothetical $1,000 investment (initial investment) in the Series' shares on the
first day of the period, adjusting to deduct the applicable charges, if any, and
computing the redeemable value of that investment at the end of the period.  The
redeemable value is then divided by the initial investment,  and the quotient is
taken to the Nth root (N  representing  the number of years in the period) and 1
is subtracted  from the result,  which is then  expressed as a  percentage.  The
calculation  assumes  that all income and capital  gains  dividends  paid by the
Series have been reinvested at net asset value on the reinvestment  dates during
the period.

The  standardized  average annual total return will be based on rolling calendar
quarters and will cover at least periods of one, five and ten years, or a period
covering  the  time the  Series  has  been in  existence,  if it has not been in
existence for one of the prescribed periods.

Non-standardized  total return may also be  advertised.  Non-standardized  total
return may be for  periods  other than those  required  to be  presented  or may
otherwise differ from standardized average annual total return. Non-standardized
total return for a specific  period is  calculated by first taking an investment
(initial  investment) in the Series on the first day of the period and computing
the end value of that  investment  at the end of the  period.  The total  return
percentage is then  determined by subtracting  the initial  investment  from the
ending value and dividing the remainder by the initial investment and expressing
the result as a percentage.  The calculation assumes that all income and capital
gains  dividends  paid by the Series have been  reinvested at net asset value on
the reinvestment dates during the period. Non-standardized total return may also
be shown as the increased dollar value of the  hypothetical  investment over the
period.

Quotations  of  standardized  average  annual total return and  non-standardized
total  return  are  based  upon  historical  earnings  and will  fluctuate.  Any
quotation of  performance,  therefore,  should not be  considered a guarantee of
future  performance.  Factors  affecting the  performance  of the Series include
general market conditions, operating expenses and investment management.

The yield for the Series is computed in accordance  with a  standardized  method
prescribed by the rules of the SEC. The yield is calculated by assuming that the
income  generated by the investment  during that 30-day period is generated each
30-day  period  over a  12-month  period  and is  shown as a  percentage  of the
investment.  Under this method, yield is computed by dividing the net investment
income per share earned  during the  specified one month or 30-day period by the
offering price per share on the last day of the period.

In computing  the yield,  the Series  follows  certain  standardized  accounting
practices specified by SEC rules. These practices are not necessarily consistent
with  those  that  the  Series  use to  prepare  annual  and  interim  financial
statements in accordance with generally accepted accounting principles.

The Series' performance quotations are based upon historical results and are not
necessarily representative of future performance. The Series' interests are sold
at net asset value.  Returns and net asset value will  fluctuate.  Shares of the
Series are redeemable at the then current net asset value,  which may be more or
less than original cost.

                     INVESTMENT ADVISORY AND OTHER SERVICES

INVESTMENT ADVISER. JNFS, 5901 Executive Drive, Lansing,  Michigan 48911, is the
investment  adviser to the Fund. As investment  adviser,  JNFS provides the Fund
with professional  investment  supervision and management and permits any of its
officers or employees to serve without  compensation  as Managers or officers of
the Fund if elected to such positions. JNFS is a wholly owned subsidiary of JNL,
which is in turn wholly owned by Prudential  Corporation  plc, a life  insurance
company in the United Kingdom.

JNFS acts as investment  adviser to the Fund pursuant to an Investment  Advisory
and  Management  Agreement.  The Investment  Advisory and  Management  Agreement
continues in effect for the Series from year to year after its initial  two-year
term so long as its continuation is approved at least annually by (i) a majority
of the Managers who are not parties to such  agreement or interested  persons of
any such party  except in their  capacity as Managers of the Fund,  and (ii) the
interest holders of the Series or the Board of Managers. It may be terminated at
any time upon 60 days  notice  by either  party,  or by a  majority  vote of the
outstanding  interests  of the Series,  and will  terminate  automatically  upon
assignment.  Additional  Series  may be subject to a  different  agreement.  The
Investment  Advisory and  Management  Agreement  provides that JNFS shall not be
liable  for any error of  judgment,  or for any loss  suffered  by the Series in
connection  with the  matters  to which  the  agreement  relates,  except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
JNFS in the  performance  of its  obligations  and  duties,  or by reason of its
reckless disregard of its obligations and duties under the agreement. The Series
is obligated to pay JNFS the following fees:

          ASSETS                                                     FEES

          $0 to $500 million                                         .75%
          $500 million to $1 billion                                 .70%
          Over $1 billion                                            .65%

SUB-ADVISER.  JNFS has entered into a  Sub-Advisory  Agreement  with First Trust
Advisors L.P.  (First Trust) to manage the  investment and  reinvestment  of the
assets of the Series, subject to JNFS' supervision.

First Trust, an Illinois  limited  partnership  formed in 1991 and an investment
adviser  registered  with the SEC under the Investment  Advisers Act of 1940, is
the sub-adviser for the Series.  First Trust's address is 1001 Warrenville Road,
Lisle,  Illinois 60532.  First Trust is a limited  partnership  with one limited
partner, Grace Partners of Dupage L.P., and one general partner, Nike Securities
Corporation.  Grace  Partners of Dupage L.P. is a limited  partnership  with one
general partner, Nike Securities Corporation,  and a number of limited partners.
Nike  Securities  Corporation  is an Illinois  corporation  controlled by Robert
Donald Van Kampen.  Pursuant to a Sub-Advisory  Agreement with JNFS, First Trust
is responsible for selecting the  investments of the Series  consistent with the
investment  objectives and policies of the Series,  and will conduct  securities
trading for the Series. First Trust discharges its  responsibilities  subject to
the  policies  of the  Board  of  Managers  of the Fund  and the  oversight  and
supervision of JNFS, which pays First Trust's sub-advisory fees.

Under  the  Sub-Advisory  Agreement,   First  Trust  provides  the  Series  with
discretionary investment services.  Specifically, First Trust is responsible for
supervising  and directing the  investments of the Series in accordance with the
Series'  investment  objective,  program,  and  restrictions  as provided in the
Prospectus  and this  Statement of Additional  Information.  First Trust is also
responsible for effecting all security transactions on behalf of the Series.

As  compensation  for its services,  First Trust receives a fee, as disclosed in
the Prospectus,  which is paid by JNFS. The Sub-Advisory Agreement also provides
that First Trust, its directors,  officers, employees, and certain other persons
performing  specific  functions for the Series will only be liable to the Series
for losses resulting from willful misfeasance,  bad faith, gross negligence,  or
reckless disregard of duty.

The Sub-Advisory  Agreement continues in effect for the Series from year to year
after its initial two-year term so long as its continuation is approved at least
annually by a majority of the Managers who are not parties to such  agreement or
interested persons of any such party except in their capacity as Managers of the
Series and by the interest  holders of the Series or the Board of  Managers.  It
may be  terminated  at any time upon 60 days'  notice by either  party,  or by a
majority vote of the  outstanding  interests of the Series,  and will  terminate
automatically  upon  assignment  or  upon  the  termination  of  the  investment
management  agreement  between  JNFS and the  Series.  Additional  Series may be
subject to a different agreement.  The Sub-Advisory Agreement also provides that
First Trust is responsible  for compliance with the provisions of Section 817(h)
of the  Internal  Revenue Code of 1986,  as amended  (Code),  applicable  to the
Series (relating to the diversification  requirements  applicable to investments
in underlying variable annuity contracts).  JNFS is obligated to pay First Trust
out of the advisory fee it receives from the Series the following fees:

        ASSETS                                                            FEES
        $0 to $500 million                                                .35%
        $500 million to $1 billion                                        .30%
        Over $1 billion                                                   .25%

LICENSE  AGREEMENTS.  JNFS,  JNL and the Fund have  entered  into a  Sub-License
Agreement  with  First  Trust  under  the  terms of  which  the Fund and JNL are
permitted  to use and refer to  certain  copyright,  trademark  and  proprietary
rights and trade secrets of Dow Jones & Company.

ADMINISTRATIVE FEE. The Series pays to JNFS an Administrative Fee of .10% of the
average daily net assets of the Series.  In return for the fee, JNFS provides or
procures all necessary  administrative  functions and services for the operation
of the Series.  In addition,  JNFS, at its own expense,  will arrange for legal,
audit, fund accounting,  custody,  printing and mailing,  and all other services
necessary for the operation of the Series. The Series is responsible for trading
expenses  including  brokerage  commissions,   interest  and  taxes,  and  other
non-operating expenses.

CUSTODIAN AND TRANSFER  AGENT.  Boston Safe Deposit & Trust Company,  One Boston
Place, Boston,  Massachusetts 02108, acts as custodian for the Fund. In general,
the  custodian is  responsible  for holding the Fund's cash and  securities  and
attends to the collection of principal and income and payment for and collection
of proceeds of securities bought and sold by the Fund.

JNFS is the transfer agent and dividend-paying agent for the Fund.

INDEPENDENT     ACCOUNTANTS.     The    Series'     independent     accountants,
PricewaterhouseCoopers  LLP, 200 East Randolph Drive,  Chicago,  Illinois 60601,
audit and report on the Series' annual financial  statements,  and perform other
professional accounting, auditing and advisory services when engaged to do so by
the Series.

SERIES TRANSACTIONS AND BROKERAGE. Purchases and sales of newly issued portfolio
securities are usually  principal  transactions  without  brokerage  commissions
effected  directly with the issuer or with an  underwriter  acting as principal.
Other  purchases  and  sales  may  be  effected  on  a  securities  exchange  or
over-the-counter, depending on where it appears that the best price or execution
will be obtained. The purchase price paid by the Series to underwriters of newly
issued  securities  usually  includes  a  concession  paid by the  issuer to the
underwriter,  and  purchases  of  securities  from  dealers,  acting  as  either
principals  or agents in the after  market,  are  normally  executed  at a price
between the bid and asked price, which includes a dealer's mark-up or mark-down.
Transactions on U.S. stock  exchanges and some foreign stock  exchanges  involve
the  payment  of  negotiated  brokerage  commissions.   On  exchanges  on  which
commissions  are negotiated,  the cost of transactions  may vary among different
brokers.  On most foreign  exchanges,  commissions are generally fixed. There is
generally no stated  commission in the case of securities  traded in domestic or
foreign  over-the-counter  markets,  but  the  price  of  securities  traded  in
over-the-counter  markets  includes an undisclosed  commission or mark-up.  U.S.
Government  Securities  are generally  purchased from  underwriters  or dealers,
although  certain  newly  issued U.S.  Government  Securities  may be  purchased
directly from the U.S.  Treasury or from the issuing agency or  instrumentality.
No brokerage  commissions  are  typically  paid on  purchases  and sales of U.S.
Government Securities.

Transactions for the Series may be effected on foreign securities exchanges.  In
transactions  for  securities  not  actively  traded  on  a  foreign  securities
exchange,  the Series will deal  directly  with the dealers who make a market in
the securities  involved,  except in those circumstances where better prices and
execution are available elsewhere.  Such dealers usually are acting as principal
for their own account.  On occasion,  securities may be purchased  directly from
the issuer. Such portfolio securities are generally traded on a net basis and do
not  normally  involve  brokerage  commissions.  Securities  firms  may  receive
brokerage  commissions on certain  portfolio  transactions,  including  options,
futures  and  options  on  futures  transactions  and the  purchase  and sale of
underlying securities upon exercise of options.

The Series may participate, if and when practicable, in bidding for the purchase
of securities for the Series' portfolio directly from an issuer in order to take
advantage of the lower purchase price available to members of such a group.  The
Series will engage in this practice,  however, only when the sub-adviser, in its
sole discretion, believes such practice to be otherwise in the Series' interest.

The  primary   consideration  in  portfolio   security   transactions  is  "best
execution,"  i.e.,  execution  at the  most  favorable  prices  and in the  most
effective manner  possible.  JNFS and First Trust always attempt to achieve best
execution and have complete freedom as to the markets in and the  broker/dealers
through which they seek this result.  Subject to the requirement of seeking best
execution,  securities  may be bought  from or sold to  broker/dealers  who have
furnished  statistical,  research,  and other information or services to JNFS or
First Trust.  In placing orders with such  broker/dealers,  JNFS and First Trust
will,  where  possible,  take into account the  comparative  usefulness  of such
information.  Such information is useful to JNFS and First Trust even though its
dollar value may be  indeterminable  and its receipt or  availability  generally
does not reduce JNFS's or First Trust's normal research activities or expenses.

JNFS and First  Trust  are  authorized,  consistent  with  Section  28(e) of the
Securities Exchange Act of 1934, as amended, when placing portfolio transactions
for the  Series  with a broker  to pay a  brokerage  commission  (to the  extent
applicable)  in excess of that  which  another  broker  might have  charged  for
effecting the same transaction on account of the receipt of research,  market or
statistical information.  The term "research, market or statistical information"
includes (a) advice as to (i) the value of securities,  (ii) the advisability of
investing in,  purchasing or selling  securities,  and (iii) the availability of
securities or purchasers or sellers of securities  and (b)  furnishing  analysis
and reports concerning  issuers,  industries,  securities,  economic factors and
trends,  portfolio strategy and the performance of accounts.  Higher commissions
may be paid to firms that provide  research  services to the extent permitted by
law.  JNFS and First Trust may use this  research  information  in managing  the
Fund's assets, as well as the assets of other clients.

Any portfolio  transaction  for the Series may be executed  through brokers that
are affiliated with the Fund, investment adviser and/or sub-adviser,  if, in the
investment  adviser's judgment,  the use of such affiliated brokers is likely to
result in price and execution at least as favorable as those of other  qualified
brokers, and if, in the transaction,  the affiliated broker charges the Series a
commission  rate  consistent  with  those  charged by the  affiliated  broker to
comparable unaffiliated customers in similar transactions. All transactions with
affiliated brokers will comply with Rule 17e-1 under the 1940 Act.

Fund  portfolio  transactions  may be  effected  with  broker/dealers  who  have
assisted  investors  in the  purchase of  policies.  Subject to best  execution,
broker/dealers may be selected based on the volume of interests sold.

There may be occasions when portfolio  transactions  for the Series are executed
as part of concurrent  authorizations  to purchase or sell the same security for
trusts or other accounts served by affiliated  companies of JNFS or First Trust.
Although such concurrent authorizations potentially could be either advantageous
or disadvantageous to the Fund, they are effected only when JNFS and First Trust
believe  that to do so is in the  interest  of the Fund.  When  such  concurrent
authorizations occur the executions will be allocated in an equitable manner.

CODE OF ETHICS.  To mitigate the  possibility  that the Series will be adversely
affected by personal  trading of employees,  the Fund, JNFS and First Trust have
adopted  Codes of Ethics under Rule 17j-1 of the 1940 Act.  These codes  contain
policies  restricting  securities  trading in personal accounts of the portfolio
managers  and  others  who  normally  come into  possession  of  information  on
portfolio transactions.  JNFS' Code complies, in all material respects, with the
recommendations of the Investment Company Institute.

                 PURCHASES, REDEMPTIONS AND PRICING OF INTERESTS

The  Separate  Account may  purchase  interests of the Series at their net asset
value.  Interests are purchased  using premiums  received on policies  issued by
JNL. The Separate Account is funded by interests of the Fund.

All investments in the Fund are credited to the interest holder's account in the
form of full and  fractional  interests  of the Series  (rounded  to the nearest
1/1000 of an interest). The Fund does not issue interest certificates.

As stated in the Prospectus,  the net asset value (NAV) of Series'  interests is
determined  once each day on which the New York  Stock  Exchange  (NYSE) is open
(Business  Day) at the close of the  regular  trading  session  of the  Exchange
(normally 4:00 p.m.,  Eastern Time,  Monday through Friday).  The NAV of Series'
interests is not determined on the days the NYSE is closed, which days generally
are New Year's  Day,  Martin  Luther King Jr.  holiday,  President's  Day,  Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.

The per interest NAV of the Series is  determined by dividing the total value of
the  securities  and other  assets,  less  liabilities,  by the total  number of
interests  outstanding.  In determining NAV,  securities  listed on the national
securities exchanges,  the NASDAQ National Market and foreign markets are valued
at the  closing  prices on such  markets,  or if such price is  lacking  for the
trading period immediately preceding the time of determination,  such securities
are  valued  at their  current  bid  price.  Securities  that are  traded on the
over-the-counter  market  are  valued  at  their  closing  bid  prices.  Foreign
securities and currencies are converted to U.S.  dollars using exchange rates in
effect at the time of valuation.  The Series will  determine the market value of
individual  securities  held by it,  by  using  prices  provided  by one or more
professional  pricing  services  which may provide market prices to other funds,
or, as needed, by obtaining market  quotations from independent  broker-dealers.
Short-term  securities  maturing within 60 days are valued on the amortized cost
basis.  Securities  for which  quotations are not readily  available,  and other
assets,  are valued at fair values  determined  in good faith  under  procedures
established by and under the supervision of the Managers.

The Fund may  suspend  the right of  redemption  for the  Series  only under the
following unusual circumstances:  (a) when the New York Stock Exchange is closed
(other  than  weekends  and  holidays)  or  trading is  restricted;  (b) when an
emergency  exists,  making disposal of portfolio  securities or the valuation of
net  assets not  reasonably  practicable;  or (c)  during  any  period  when the
Securities  and  Exchange  Commission  has by order  permitted a  suspension  of
redemption for the protection of interest holders.

                             ADDITIONAL INFORMATION

DESCRIPTION  OF  SHARES.  The Fund may  issue an  unlimited  number  of full and
fractional  interests of the Series and divide or combine such  interests into a
greater or lesser number of interests without thereby changing the proportionate
interests  in  the  Fund.  Each  interest  of the  Series  represents  an  equal
proportionate interest in the Series with each other interest. The Fund reserves
the right to create and issue any number of series of  interests.  In that case,
the  interests  of  each  series  would  participate  equally  in the  earnings,
dividends,  and assets of the particular Series. Upon liquidation of the Series,
interest  holders are entitled to share pro rata in the net assets of the Series
available for  distribution  to interest  holders.  Each issued and  outstanding
interest in the Series is  entitled  to  participate  equally in  dividends  and
distributions  declared  by the  Series,  and in the net  assets  of the  Series
remaining upon  liquidations or dissolution  after  outstanding  liabilities are
satisfied.  The  interests  of the  Series,  when  issued,  are  fully  paid and
nonassessable.  They have no  preemptive,  conversion,  cumulative  dividend  or
similar  rights.  They are freely  transferable.  Interests in the Series do not
have cumulative  rights.  This means that owners of more than half of the Fund's
interests  voting for election of Managers can elect all the Managers if they so
choose.  Then,  the  remaining  interest  owners  would not be able to elect any
Managers.

VOTING RIGHTS. Interest holders are entitled to one vote for each interest held.
Interest  holders  may vote on the  election of  Managers  and on other  matters
submitted to meetings of interest  holders.  In regard to  termination,  sale of
assets,  or change of investment  restrictions,  the right to vote is limited to
the holders of interests of the Series affected by the proposal. When a majority
is required,  it means the lesser of 67% or more of the  interests  present at a
meeting  when the  holders  of more than 50% of the  outstanding  interests  are
present or represented by proxy, or more than 50% of the outstanding interests.

SHAREHOLDER  INQUIRIES.  All inquiries  regarding the Fund should be directed to
the Fund at the  telephone  number or  address  shown on the  cover  page of the
Prospectus.

                                   TAX STATUS

The Fund is not a  "regulated  investment  company"  under  Subchapter  M of the
Internal Revenue Code of 1986, as amended (Code).  The Fund nonetheless does not
pay federal income tax on its interest,  dividend  income or capital gains. As a
limited liability company whose interests are sold only to Separate Account, the
Fund is  disregarded  as an entity  for  purposes  of federal  income  taxation.
Jackson National Life, through Separate Account, is treated as owning the assets
of the Series directly and its tax obligations  thereon are computed pursuant to
Subchapter L of the Code (which  governs the  taxation of insurance  companies).
Under current tax law,  interest,  dividend income and capital gains of the Fund
are not taxable to the Fund,  and are not currently  taxable to JNL or to policy
owners, when left to accumulate within a variable annuity policy. Tax disclosure
relating to the variable  annuity  policies that offer the Fund as an investment
alternative is contained in the prospectuses for those policies.

Section  817(h) of the Code  imposes  certain  diversification  standards on the
underlying  assets of segregated  asset accounts that fund contracts such as the
variable  annuity  policies  (that is,  the  assets of the  Series).  Failure to
satisfy those  standards  would result in imposition of Federal  income tax on a
variable  annuity  policy owner with respect to the increase in the value of the
variable  annuity policy.  Section  817(h)(2)  provides that a segregated  asset
account that funds contracts such as the variable annuity policies is treated as
meeting  the  diversification  standards  if, as of the  close of each  calendar
quarter,  the assets in the account meet the diversification  requirements for a
regulated  investment  company and no more than 55% of those  assets  consist of
cash, cash items, U.S.  Government  securities and securities of other regulated
investment companies.

The Treasury  Regulations  amplify the  diversification  standards  set forth in
Section  817(h) and provide an  alternative  to the provision  described  above.
Under  the  regulations,  an  investment  portfolio  will be  deemed  adequately
diversified  if (i) no more  than 55% of the  value of the  total  assets of the
portfolio is  represented by any one  investment;  (ii) no more than 70% of such
value is  represented  by any two  investments;  (iii) no more  than 80% of such
value is represented by any three investments; and (iv) no more than 90% of such
value is represented by any four investments.  For purposes of these regulations
all securities of the same issuer are treated as a single  investment,  but each
United  States  government  agency  or  instrumentality  shall be  treated  as a
separate issuer.

The  Series  will  be  managed  with  the  intention  of  complying  with  these
diversification requirements. It is possible that, in order to comply with these
requirements, less desirable investment decisions may be made which could affect
the investment performance of the Series.

                              FINANCIAL STATEMENTS

No financial  statements  for the Fund are included in the prospectus or in this
Statement  of  Additional   Information  because  the  Fund  had  not  commenced
operations  as of the  effective  date  of  this  prospectus  and  Statement  of
Additional Information.




© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission