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SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM N-8B-2
REGISTRATION STATEMENT OF UNIT INVESTMENT TRUST
WHICH ARE CURRENTLY ISSUING SECURITIES
Dated August 6, 1999
Pursuant to Section 8(b) of the Investment Company Act of 1940
SEPARATE ACCOUNT IMO
OF ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
(Name of Unit Investment Trust)
440 Lincoln Street
Worcester MA 01653
(Address of Principal Office of Registrant)
Issuer of periodic payment plan certificates only for purposes of information
provided herein.
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I I. ORGANIZATION AND GENERAL INFORMATION
1. (a) FURNISH NAME OF THE TRUST AND THE INTERNAL REVENUE
SERVICE EMPLOYER IDENTIFICATION NUMBER.
The trust is the Separate Account IMO of Allmerica
Financial Life Insurance and Annuity Company ("Separate
Account"). The Separate Account is a separate investment
account of Allmerica Financial Life Insurance and
Annuity Company (the "Company") and has no employer
identification number.
(b) FURNISH TITLE OF EACH CLASS OR SERIES OF SECURITIES
ISSUED BY THE TRUST.
The securities are individual or group flexible payment
variable life insurance policies and the Certificates
thereunder (collectively, the "Policies" unless the
context requires otherwise).
2. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
DEPOSITOR OF THE TRUST.
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, Massachusetts 01653
FEIN: 04-6145677
3. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
CUSTODIAN OR TRUSTEE OF THE TRUST INDICATING FOR WHICH CLASS OR
SERIES OF SECURITIES EACH CUSTODIAN OR TRUSTEE IS ACTING.
The Company will hold all of the securities in its own custody.
4. FURNISH NAME AND PRINCIPAL BUSINESS ADDRESS AND ZIP CODE AND THE
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER OF EACH
PRINCIPAL UNDERWRITER CURRENTLY DISTRIBUTING SECURITIES OF THE
TRUST.
Distribution of the Policies has not yet commenced. When
distribution commences, the principal underwriter will be:
Allmerica Investments, Inc.
440 Lincoln Street
Worcester MA 01653
FEIN: 04-2448927.
5. FURNISH NAME OF STATE OR OTHER SOVEREIGN POTHE COMPANYR, THE
LAWS OF WHICH GOVERN WITH RESPECT TO THE ORGANIZATION OF THE
TRUST.
Delaware.
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6. (a) FURNISH THE DATES OF EXECUTION AND TERMINATION OF
AGREEMENT CURRENTLY IN EFFECT UNDER THE TERMS OF WHICH
THE TRUST WAS ORGANIZED AND ISSUED OR PROPOSES TO ISSUE
SECURITIES.
The Separate Account was authorized under Massachusetts
law pursuant to a resolution of the Board of Directors
of the Company on June 13, 1996. The resolution
authorizing the Separate Account will continue until
amended by the Board of Directors of the Company. The
Policies will be issued pursuant to this resolution.
(b) FURNISH THE DATES OF EXECUTION AND TERMINATION OF ANY
INDENTURE OR AGREEMENT CURRENTLY IN EFFECT PURSUANT TO
WHICH THE PROCEEDS OF PAYMENTS ON SECURITIES ISSUED OR
TO BE ISSUED BY THE TRUST ARE HELD BY THE CUSTODIAN OR
TRUSTEE.
None.
7. FURNISH IN CHRONOLOGICAL ORDER THE FOLLOWING INFORMATION WITH
RESPECT TO EACH CHANGE OF NAME OF THE TRUST SINCE JANUARY 1,
1930. IF THE NAME HAS NEVER BEEN CHANGED, SO STATE.
The name of the Separate Account has never been changed.
8. STATE THE DATE ON WHICH THE FISCAL YEAR OF THE TRUST ENDS.
December 31.
MATERIAL LITIGATION
9. FURNISH A DESCRIPTION OF ANY PENDING LEGAL PROCEEDINGS, MATERIAL
WITH RESPECT TO THE SECURITY HOLDERS OF THE TRUST BY REASON OF
THE NATURE OF THE CLAIM OR THE AMOUNT THEREOF, TO WHICH THE
TRUST, THE DEPOSITOR, OR THE PRINCIPAL UNDERWRITER IS A PARTY OR
OF WHICH THE ASSETS OF THE TRUST ARE THE SUBJECT, INCLUDING THE
SUBSTANCE OF THE CLAIMS INVOLVED IN SUCH PROCEEDING AND THE
TITLE OF THE PROCEEDING. FURNISH A SIMILAR STATEMENT WITH
RESPECT TO ANY PENDING ADMINISTRATIVE PROCEEDING COMMENCED BY A
GOVERNMENTAL AUTHORITY OR ANY SUCH PROCEEDING OR LEGAL
PROCEEDING KNOWN TO BE CONTEMPLATED BY A GOVERNMENTAL AUTHORITY.
INCLUDE ANY PROCEEDINGS WHICH, ALTHOUGH IMMATERIAL ITSELF, IS
REPRESENTATIVE OF, OR ONE OF, A GROUP WHICH IN THE AGGREGATE IS
MATERIAL.
There are no current or pending legal or administrative
proceedings to which the Separate Account, the Company, or
Allmerica Investments Inc. is a party and which are material
with respect to the security holders of the Separate Account.
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE
RIGHTS OF HOLDERS.
10. FURNISH A BRIEF STATEMENT WITH RESPECT TO THE FOLLOWING MATTERS
FOR EACH CLASS OR SERIES OF SECURITIES ISSUED BY THE TRUST.
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(a) WHETHER THE SECURITIES ARE OF THE REGISTERED OR BEARER
TYPE.
The Policies are variable life insurance policies and,
as such, are "registered" in the name of the Policyowner
and the records concerning the Policyowner are
maintained by or on behalf of the Company.
(b) WHETHER THE SECURITIES ARE OF THE CUMULATIVE OR
DISTRIBUTIVE TYPE.
The Policies are of the cumulative type, providing for
no distribution of income, dividends or capital gains
except in connection with a voluntary surrender or
partial withdrawal of Policy value by a Policyowner, or
in connection with the payment of death benefits.
(c) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO
WITHDRAWAL OR REDEMPTION.
A Policy may be surrendered at any time, subject to the
possible imposition of a contingent deferred
administrative charge and a contingent deferred sales
charge. See Item 13(a) "Surrender Charge" and Item 17(a)
"Surrender."
After the first Policy year, partial withdrawals in a
minimum amount of $500 may be made from the Policy value
at any time upon written request filed at the Company's
Principal Office. A transaction charge, which is the
smaller of 2% of the amount withdrawn or $25.00, will be
assessed in all cases. A partial withdrawal charge may
also be deducted. The partial withdrawal charge will not
exceed the surrender charge, and the outstanding
surrender charge will be reduced by the amount of the
partial withdrawal charges. See Item 13(a) "Charges on
Partial Withdrawal" and Item 17(a) "Partial Withdrawal."
The transaction fee applies to all partial withdrawals,
including a Withdrawal without a surrender charge.
(d) THE RIGHTS OF SECURITY HOLDERS WITH RESPECT TO
CONVERSION, TRANSFER, PARTIAL-REDEMPTION, AND SIMILAR
MATTERS.
TRANSFER - The Policies permit net premiums to be
allocated either to the Company's General Account or to
the Sub-Accounts of the Separate Account. Each
Sub-Account invests exclusively in a corresponding
investment portfolio ("Underlying Fund") of the
Allmerica Investment Trust ("AIT"), managed by Allmerica
Institutional Services, Inc., the Variable Insurance
Products Fund ("Fidelity VIP"), managed by Fidelity
Management and Research Company ("Fidelity Management"),
or the T. Rowe Price International Series, Inc. ("T.
Rowe Price"), managed by Rowe Price-Fleming
International.
Subject to the consent of the Company, the Policyowner
may transfer amounts among all of the Sub-Accounts and
between the Sub-Accounts and the General Account,
subject to certain restrictions.
The Contract Owner may apply for automatic transfers
from Sub-Account investing in the Money Market Fund and
Fixed Account to one or more of the other Sub-Accounts.
Automatic transfers may be made at intervals of one,
three, six or twelve months. Each automatic transfer
must be at least $100. If the Sub-Account from which the
automatic transfer is to be made is reduced to $0
(zero), the automatic transfer will cease. The Contract
Owner must then reapply for any future automatic
transfers. The Contract
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Owner may also apply for automatic account rebalancing,
in order to reallocate Contract Value among the
Sub-Accounts at intervals of one, three, six or twelve
months.
The first 12 transfers in a Contract year are free.
Thereafter, the Company may deduct a transfer charge
(not to exceed $25) from amounts transferred in that
Contract year. Each subsequent automatic transfer is
free and does not reduce the remaining number of
transfers that are free in a Contract year. Any
transfers made for a conversion privilege, Contract loan
or material change in investment policy will not count
toward the 12 free transfers.
The transfer privilege is subject to the Company's
consent. The Company reserves the right to impose limits
on transfers including, but not limited to, the:
- Minimum amount that may be transferred;
- Minimum amount that may remain in a Sub-Account
following a transfer from that Sub-Account;
- Minimum period between transfers involving the
Fixed Account; and
- Maximum amounts that may be transferred from
the Fixed Account.
Transfers to and from the Fixed Account are subject to
the following restrictions:
- The Policy Owner may make only one transfer
involving the Fixed Account in each policy quarter
- The amount transferred from the Fixed Account in
each transfer does not exceed the lesser of
$100,000 or 25% of the Contract Value.
These rules are subject to change by the Company.
CONVERSION PRIVILEGE - During the first 24 Policy months
after the date of issue, subject to certain
restrictions, the Policyowner may convert the Policy to
a flexible premium fixed Policy by transferring all
Policy value in the Sub-Accounts to the General Account
and by simultaneously changing the allocation of future
premiums to the General Account. A similar conversion
privilege is in effect for 24 Policy months after the
date of an increase in face amount, under which the
Policyowner may convert by transferring all or part of
Policy value in the Sub-Accounts to the General Account
and by simultaneously changing the allocation of all or
part of future premiums to the General Account.
FREE LOOK PRIVILEGE - The Policy provides for an initial
Free Look Period. The Policyowner may cancel the Policy
until 10 days after the Policyowner receives the Policy,
unless a longer period is required by state law. Upon
returning the Policy, the Policyowner will be sent
within 7 days a refund equal to the premiums paid. The
refund of any premium paid by check, however, may be
delayed until the check has cleared the Policyowner's
bank.
A free look privilege also applies following a requested
increase in face amount. The Policyowner has the right
to cancel the increase within 10 days after receipt of
the new specification pages issued for the increase.
Upon canceling the increase, the Policyowner will
receive a credit to the Policy value of charges which
would not have been deducted but for the increase. The
amount to be credited will be refunded if the
Policyowner so requests. The Company will also waive any
surrender charge calculated for the increase.
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The Policyowner may make surrenders and partial
withdrawals as described in Items 10(c), 13(a) and
17(a).
(e) IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES THE SUBSTANCE OF THE PROVISIONS OF ANY
INDENTURE OR AGREEMENTS WITH RESPECT TO LAPSES OR
DEFAULTS BY SECURITY HOLDERS IN MAKING PRINCIPAL
PAYMENTS, AND WITH RESPECT TO REINSTATEMENT.
CONTRACT LAPSE AND REINSTATEMENT - The failure to make
premium payments will not itself cause a Policy to lapse
unless: (1) the Policy value less debt is insufficient
to cover the next monthly deduction plus loan interest
accrued, if any.
A 62- day grace period applies to each situation. Subject to
certain conditions (including Evidence of Insurability showing
that the Insured is insurable according to the Company's
underwriting rules and the payment of sufficient premium) a
Certificate may be reinstated at any time within 3 years after
the expiration of the grace period and prior to the Final
Premium Payment Date. The reinstatement takes effect on the
Monthly Processing Date following the date the Contract Owner
submits to the Company:
- Written application for reinstatement;
- Evidence of Insurability showing that the Insured
is insurable according to the Company's current
underwriting rules;
- A Payment that is large enough to cover the cost
of all Contract charges that were due and unpaid
during the grace period and that is large enough
to keep the Contract in force for three months;
and
- A Payment or reinstatement of any loan against the
Contract that existed at the end of the grace
period.
POLICY VALUE ON REINSTATEMENT - The Policy Value on the date of
reinstatement is:
- The net payment made to reinstate the Policy and
interest earned from the date the payment was
received at our Principal Office PLUS
- The Policy Value less any outstanding loan on the
date of default (not to exceed the surrender
charge on the date of reinstatement) MINUS
- The Monthly Deductions due on the date of
reinstatement
(f) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENTS WITH RESPECT TO VOTING RIGHTS, TOGETHER WITH
THE NAMES OF ANY PERSONS OTHER THAN SECURITY HOLDERS
GIVEN THE RIGHT TO EXERCISE VOTING RIGHTS PERTAINING TO
THE TRUST'S SECURITIES OR THE UNDERLYING SECURITIES AND
THE RELATIONSHIP OF SUCH PERSONS TO THE TRUST.
To the extent required by law, the Company will vote
shares held by each Sub-Account in accordance with
instructions received from the Policyowners with Policy
value in such Sub-Account. Each person having a voting
interest will be provided with proxy materials together
with an appropriate form with which to give voting
instructions to the Company. Shares held in each
Sub-Account for which no timely instructions are
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received will be voted in proportion to the instructions
received from all persons with an interest in the
Sub-Account furnishing instructions to the Company with
respect to the Underlying Funds. The Company will also
vote shares held in the Separate Account that it owns
and which are not attributable to the Policies in the
same proportion.
The number of votes which a Policyowner may cast will be
determined by the Company as of the record date
established for the Underlying Fund. The number of
shares held in each Sub-Account deemed attributable to
each Policyowner is determined by dividing Policy value
in the Sub-Account, if any, by the net asset value of
one share in the corresponding Underlying Fund in which
the assets of the Sub-Account are invested. Fractional
votes will be counted.
If the 1940 Act or any rules thereunder should be
amended or if the present interpretation of the 1940 Act
or such rules should change, and as a result the Company
determines that it is permitted to vote shares of the
Fund in its own right, whether or not such shares are
attributable to the Policies, the Company reserves the
right to do so.
The Company, when required by state insurance regulatory
authorities, may disregard voting instructions if the
instructions require that Fund shares be voted so as (1)
to cause to change in the sub-classification or
investment objective of one or more of the Funds, or (2)
to approve or disapprove an investment advisory contract
for the Funds. In addition, the Company may disregard
voting instructions that are in favor of any change in
the investment policies or in any investment adviser or
principal underwriter if the change has been initiated
by Contract Owners or the Trustees. Our disapproval of
any such change must be reasonable and, in the case of a
change in investment policies or investment adviser,
based on a good faith determination that such change
would be contrary to state law or otherwise is
inappropriate in light of the objectives and purposes of
the Funds. In the event, the Company does disregard
voting instructions, a summary of and the reasons for
that action will be included in the next periodic report
to Contract Owners.
(g) WHETHER SECURITY HOLDERS MUST BE GIVEN NOTICE OF ANY
CHANGES IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Company reserves the right, subject to
applicable law, to make additions to, deletions
from, or substitutions for the shares that are
held in the Sub-Accounts of the Separate Account
or that the Sub-Accounts of the Separate Account
may purchase. If the shares of an Underlying
Fund are no longer available for investment or
if in the Company's judgment further investment
in any Underlying Fund should become
inappropriate in view of the purposes of the
Separate Account or the affected Sub-Account,
the Company may redeem the shares of that
Underlying Fund and substitute shares of another
registered open-end management company. The
Company will not substitute any shares
attributable to a Policy interest in a
Sub-Account without notice and prior approval of
the SEC and state insurance authorities, to the
extent required by the 1940 Act or other
applicable law.
The Company also reserves the right to establish
additional Sub-Accounts of the Separate Account,
each of which would invest in shares
corresponding to a new Underlying Fund or in
shares of another investment company having a
specified
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investment objective. Subject to applicable law
and any required Commission approval, the
Company may, in its sole discretion, establish
new Sub-Accounts or eliminate one or more
Sub-Accounts if marketing needs, tax
considerations or investment conditions warrant.
Any new Sub-Accounts may be made available to
existing Policyowners on a basis to be
determined by the Company.
If any of these substitutions or changes are
made, the Company may by appropriate endorsement
change the Policy to reflect the substitution or
change and will notify Policyowners of all such
changes. If the Company deems it to be in the
best interest of Policyowners, and subject to
any approvals that may be required under
applicable law, the Separate Account or any
Sub-Account(s) may be operated as a management
company under the 1940 Act, may be deregistered
under that Act if registration is no longer
required, or may be combined with other
Sub-Accounts or other Separate Accounts of the
Company.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES
ISSUED BY THE TRUST.
No change in the terms and conditions of the
Policies that affect the Policyowner's rights
will be made without notice to Policyowner to
the extent required by law.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF
THE TRUST.
No notice to or consent from Policyowners is
required for any change in the Company's
resolution establishing the Separate Account.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR
CUSTODIAN.
The depositor of the Separate Account cannot be
changed.
The Separate Account has no Trustees.
Notice to Policyowners need not be given for the
custodian to be changed.
(h) WHETHER THE CONSENT OF SECURITY HOLDERS IS REQUIRED IN
ORDER FOR ACTION TO BE TAKEN CONCERNING ANY CHANGE IN:
(1) THE COMPOSITION OF THE ASSETS OF THE TRUST.
The Policies do not require consent of the
Policyowners when changing the underlying
securities of the Separate Account, except as
may be required by currently applicable law or
regulation.
(2) THE TERMS AND CONDITIONS OF THE SECURITIES
ISSUED BY THE TRUST.
Except as appropriate to comply with federal or
state law or regulation the terms and conditions
of a Policy cannot be changed without the
consent of the Policyowner.
(3) THE PROVISIONS OF ANY INDENTURE OR AGREEMENT OF
THE TRUST.
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No consent is required.
(4) THE IDENTITY OF THE DEPOSITOR, TRUSTEE OR
CUSTODIAN.
The depositor of the Separate Account cannot be
changed.
The Separate Account has no Trustees.
The consent of security holders is not required
to change the custodian.
(i) ANY OTHER PRINCIPAL FEATURE OF THE SECURITIES ISSUED BY
THE TRUST OR ANY OTHER PRINCIPAL RIGHT, PRIVILEGE OR
OBLIGATION NOT COVERED BY SUBDIVISIONS (A) TO (G) OR BY
ANY OTHER ITEM IN THIS FORM.
(1) PREMIUM PAYMENTS - SEE Items 14 and 15.
(2) QUALIFICATION AS LIFE INSURANCE
Federal tax law requires a Guideline Minimum
Death Benefit in relation to Policy Value for a
Contract to qualify as life insurance. Under
current Federal tax law, either the Guideline
Premium Test or the Cash Value Accumulation Test
can be used to determine if the Contract
complies with the definition of "life insurance"
under the Code. At the time of application, the
Policy Owner may elect either of the tests. If
the Policy Owner elects the Guideline Premium
Test, the Policy Owner will have the choice of
electing the Death Benefit Option 1 or the Death
Benefit Option 2. If the Policy Owner elect the
Cash Value Accumulation Test, the Death Benefit
Option 3 will apply.
GUIDELINE PREMIUM TEST AND CASH VALUE
ACCUMULATION TEST. There are two main
differences between the Guideline Premium Test
and the Cash Value Accumulation Test. First, the
Guideline Premium Test limits the amount of
premium that may be paid into a Contract, while
no such limits apply under the Cash Value
Accumulation Test. Second, the factors that
determine the Guideline Minimum Death Benefit
relative to the Policy Value are different.
The Guideline Premium Test limits the amount of
premiums payable under a Contract to a certain
amount for an Insured of a particular age and
sex. Under the Guideline Premium Test, the
Policy Owner may choose between the Death
Benefit Option 1 or the Death Benefit Option 2.
After issuance of the Contract, the Policy Owner
may change the selection from the Death Benefit
Option 1 to the Death Benefit Option 2, or vice
versa.
The Cash Value Accumulation Test requires that
the Death Benefit must be sufficient so that the
cash Surrender Value does not at any time exceed
the net single premium required to fund the
future benefits under the Contract. Under the
Cash Value Accumulation Test, required increases
in the Guideline Minimum Death Benefit (due to
growth in Policy Value) will generally be
greater than under the Guideline Premium Test.
If the Policy Owner chooses the Cash Value
Accumulation Test, ONLY the Death Benefit Option
3 is available.
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Under the Death Benefit Option 1, the death
benefit is the greater of either the Face Amount
of insurance or the Guideline Minimum Sum
Insured. Under the Death Benefit Option 2, the
death benefit is the greater of either (a) the
Face Amount of insurance PLUS Policy value or
(b) the guideline minimum sum Insured. The
guideline minimum sum Insured is calculated by
multiplying the applicable percentage from the
following table for the Insured person's age
(nearest birthday) at the beginning of the
Policy year of determination to the-policy
value.
Death Benefit Option 3 (Cash Value Accumulation
Test). Under Option 3, the Death Benefit will
equal the greater of (1) the Face Amount or (2)
the Policy Value multiplied by the applicable
factor, as set forth in the Policy. The
applicable factor depends upon the Underwriting
Class, sex (unisex if required by law), and
then-attained age of the Insured. The factors
decrease slightly from year to year as the
attained age of the Insured increases.
(3) NET DEATH BENEFIT
If the Policy is in force on the Insured's
death, the Company, with due proof of death, pay
the Net Death Benefit to the named beneficiary.
The Company will normally pay the Net Death
Benefit within seven days of receiving due proof
of the Insured's death, but the Company may
delay payment of Net Death Benefits The
beneficiary may receive the Net Death Benefit in
a lump sum or under a payment option.
The Net Death Benefit depends on the current
Face Amount and the Death Benefit Option that is
in effect on the date of death. Before the Final
Payment Date, the Net Death Benefit is:
- The death benefit provided under the
Death Benefit Option 1, Death Benefit
Option 2, or Death Benefit Option 3,
whichever is elected and in effect on
the date of death, plus
- Any other insurance on the Insured's
life that is provided by Rider, minus
- Any outstanding loan, any partial
withdrawals, partial withdrawal costs,
and due and unpaid monthly charges
through the Policy month in which the
Insured dies.
After the Final Payment Date, if the Guaranteed
Death Benefit Rider is not in effect, the Net
Death Benefit is the Policy Value minus any
outstanding loan.
(4) GUARANTEED DEATH BENEFIT RIDER
An optional Guaranteed Death Benefit Rider is
available only at issue of the Policy. If this
rider is in effect, the Company guarantees that
the Policy will not lapse regardless of the
investment performance of the Variable Account
and provides a guaranteed net death benefit.
In order to maintain the Guaranteed Death
Benefit rider, certain minimum
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premium payment tests must be met on each policy
anniversary and within 48 months following the
Date of Issue and/or the date of any increase in
Face Amount, as described below. In addition, a
one-time administrative charge of $25 will be
deducted from Policy Value when the rider is
elected. Certain transactions, including policy
loans, partial withdrawals, and changes in Death
Benefit Options, can result in the termination
of the rider. If this rider is terminated, it
cannot be reinstated.
GUARANTEED DEATH BENEFIT
If the Guaranteed Death Benefit Rider is in
effect on the Final Premium Payment Date,
guaranteed Death Proceeds will be provided as
long as the rider is in force. The Death
Proceeds will be the greater of the Face Amount
as of the Final Premium Payment Date; or the
Policy Value as of the date due proof of death
is received by the Company.
TERMINATION OF THE GUARANTEED DEATH BENEFIT
RIDER
The Guaranteed Death Benefit rider will end and
may not be reinstated on the first to occur of
the following:
- foreclosure of a Policy Loan; or
- the date on which the sum of the Policy
owner r payments does not meet or exceed
the applicable Guaranteed Death Benefit
test (above); or
- any Policy change that results in a
negative guideline level premium; or
- the effective date of a change from
Death Benefit Option 2 to Death Benefit
Option 1, if such changes occurs within
5 policy years of the Final Premium
Payment Date; or
- a request for a partial withdrawal or
preferred loan is made after the Final
Premium Payment Date.
It is possible that the Policy Value will not be
sufficient to keep the Policy in force on the
first Monthly Payment Date following the date
the rider terminates
(5) CALCULATION OF CASH VALUE - SEE Items 44(a),
44(c), and 46(a).
(6) LOAN PROVISIONS. SEE Item 21.
(7) PAYMENT OPTIONS - Upon written request, the
surrender value or part of the Death Proceeds
may be placed under one or more of the payment
options offered by the Company. If the
Policyowner does not make an election, the
Company will pay the benefits in a single sum. A
certificate will be provided to the payee
describing the payment option selected. If a
payment option is selected, the beneficiary may
pay to the Company an amount that would
otherwise be deducted from the Death Benefit.
The amount applied under any one payment option
for any one payee must be at least $5,000. The
periodic payments for any one payee must be at
least $50.
(8) OPTIONAL INSURANCE BENEFIT - Subject to certain
requirements, one or more of the following
additional insurance benefits may be added by
rider: Waiver of Premium Rider, Other Insured
Rider, Term Rider, Option to Accelerate Benefits
Rider, or Guaranteed Death Benefit Rider. The
cost of these optional
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insurance benefits will be deducted from Policy
value as part of the monthly deduction, except
that a one-time charge not to exceed $25 is made
when the Guaranteed Death Benefit Rider is
elected upon issue of the Policy.
INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES
11. DESCRIBE BRIEFLY THE KIND OR TYPE OF SECURITIES COMPRISING THE
UNIT OF SPECIFIED SECURITIES IN WHICH SECURITY HOLDERS HAVE AN
INTEREST.
The Policies permit net premiums to be allocated either to the
Company's General Account or to the Separate Account. The
Separate Account is currently comprised of 15 investment
divisions ("Sub-Accounts"). Each Sub-Account invests exclusively
in a corresponding Underlying Fund of AIT, Fidelity VIP, and T.
Rowe Price, which are no-load, open-end, diversified series
management investment companies. AIT currently offers to the
Policies eleven different investment portfolios (each a "Fund").
Fidelity VIP currently offers to the Policies three different
investment portfolios (each a "Portfolio"). T. Rowe Price
currently offers to the Policies one investment portfolio
("Series").
Each of the Underlying Funds operates pursuant to different
investment objectives, which are summarized below:
SELECT EMERGING MARKETS FUND - seeks long-term growth of capital
by investing in the world's emerging markets. The Sub-Adviser
for the Select Emerging Markets Fund is Schroder Investment
Management North America Inc.
SELECT INTERNATIONAL EQUITY FUND - seeks maximum long-term total
return (capital appreciation and income) primarily by investing
in common stocks of established non-U.S. companies. The
Sub-Adviser for the Select International Equity Fund is Bank of
Ireland Asset Management (U.S.) Limited.
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO - seeks long-term
growth of capital through investments primarily in common stocks
of established, non-U.S. companies. The Manager of the Portfolio
is Rowe Price-Fleming International, Inc.
SELECT AGGRESSIVE GROWTH FUND - seeks above-average capital
appreciation by investing primarily in common stocks of
companies that are believed to have significant potential for
capital appreciation. The Sub-Adviser for the Select Aggressive
Growth Fund is Nicholas-Applegate Capital Management, L.P.
SELECT CAPITAL APPRECIATION FUND - seeks long-term growth of
capital. Realization of income is not a significant investment
consideration and any income realized on the Fund's investments
will be incidental to its primary objective. The Fund will
invest primarily in common stock of industries and companies
which are experiencing favorable demand for their products and
services, and which operate in a favorable competitive
environment and regulatory climate. The Sub-Adviser for the
Select Capital Appreciation Fund is T. Rowe Price Associates,
Inc.
SELECT VALUE OPPORTUNITY FUND - seeks long-term growth of
capital by investing primarily in a diversified portfolio of
common stocks of small and mid-size companies, whose securities
at the time of purchase are considered by the Sub-Adviser to be
undervalued. The Sub-Adviser for the Select Value Opportunity
Fund is Cramer Rosenthal McGlynn, LLC.
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<PAGE>
SELECT GROWTH FUND - seeks to achieve growth of capital by
investing in a diversified portfolio consisting primarily of
common stocks selected for their long-term growth potential. The
Sub-Adviser for the Select Growth Fund is Putnam Investment
Management, Inc.
SELECT STRATEGIC GROWTH FUND - seeks long-term growth of capital
by investing primarily in common stocks of established
companies. The Sub-Adviser for the Select Strategic Growth Fund
is Cambiar Investors, Inc.
EQUITY INDEX FUND - seeks to provide investment results that
correspond to the aggregate price and yield performance of a
representative selection of United States publicly traded common
stocks. The Equity Index Fund seeks to achieve its objective by
attempting to replicate the aggregate price and yield
performance of the Standard & Poor's Composite Index of 500
Stocks.
FIDELITY VIP GROWTH PORTFOLIO - seeks to achieve capital
appreciation. The Portfolio normally purchases common stocks,
although its investments are not restricted to any one type of
security. Capital appreciation may also be found in other types
of securities, including bonds and preferred stocks.
SELECT GROWTH AND INCOME FUND - seeks a combination of long-term
growth of capital and current income. The fund will invest
primarily in dividend-paying common stocks and securities
convertible into common stocks. The Sub-Adviser for the Select
Growth and Income Fund is J. P. Morgan Investment Management
Inc.
FIDELITY VIP EQUITY-INCOME PORTFOLIO - seeks reasonable income
by investing primarily in income-producing equity securities. In
choosing these securities, the Portfolio will also consider the
potential for capital appreciation. The Portfolio's goal is to
achieve a yield that exceeds the composite yield on the
securities comprising S&P 500.
FIDELITY VIP HIGH INCOME PORTFOLIO - seeks to obtain a high
level of current income by investing primarily in high-yielding,
low-rated fixed-income securities (commonly referred to as "junk
bonds"), while also considering growth of capital. These
securities are often considered to be speculative and involve
greater risk of default or price changes than securities
assigned a high quality rating. For more information about these
low-rated securities, see the Fidelity VIP prospectus.
SELECT INCOME FUND - seeks a high level of current income. The
fund will invest primarily in investment grade, fixed-income
securities. The Sub-Adviser for the Select Income Fund is
Standish, Ayer & Wood, Inc.
INVESTMENT GRADE INCOME FUND - seeks to invest in a diversified
portfolio of fixed income securities with the objective of
seeking as high a level of total return (including both income
and realized and unrealized capital gains) as is consistent with
prudent investment management.
MONEY MARKET FUND - seeks to obtain maximum current income
consistent with the preservation of capital and liquidity.
Allmerica Asset Management, Inc. is the Sub-Adviser of the Money
Market Fund.
12. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES
AND IF ANY UNDERLYING SECURITIES THE COMPANYRE ISSUED BY ANOTHER
INVESTMENT COMPANY, FURNISH INFORMATION FOR EACH SUCH COMPANY:
(b) NAME AND PRINCIPAL ADDRESS OF DEPOSITOR.
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<PAGE>
Allmerica Financial Life Insurance and Annuity Company
(formerly SMA Life Assurance Company, until October 1,
1995), 440 Lincoln Street, Worcester, MA 01653 is the
depositor of AIT.
Fidelity Investments, 82 Devonshire Street, Boston, MA
is the depositor of VIPF.
T. Rowe Price Associates, Inc. 100 East Pratt Street,
Baltimore, Maryland, 21202, is the depositor of T. Rowe
Price.
(c) NAME AND PRINCIPAL BUSINESS ADDRESS OF TRUSTEE OR
CUSTODIAN:
Chase Manhattan Bank, N.A., Avenue of the Americas, 39th
Floor, New York, New York is the Custodian of the assets
of AIT.
Shawmut Bank of Boston, N.A., One Federal Street,
Boston, MA is the Custodian of the assets of VIPF.
(d) NAME AND PRINCIPAL BUSINESS ADDRESS OF
PRINCIPAL-UNDERWRITER
The principal underwriter of AIT is Allmerica
Investments, Inc., 440 Lincoln Street, Worcester,
Massachusetts, 01653.
The principal underwriter of VIPF is Fidelity
Distributors Corporation, 82 Devonshire Street, Boston,
MA.
The principal underwriter of T. Rowe Price is T. Rowe
Price Investment Services, Inc. 100 East Pratt Street,
Baltimore, Maryland, 21202.
(e) THE PERIOD DURING WHICH THE SECURITIES OF SUCH COMPANY
HAVE BEEN THE UNDERLYING SECURITIES.
Shares of the Underlying Funds will be purchased by the
Separate Account only after the effective date of the
Separate Account's registration statement under the
Securities Act of 1933.
INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES
13. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
LOAD, FEE, EXPENSE OR CHARGE TO WHICH (1) PRINCIPAL
PAYMENTS; (2) UNDERLYING SECURITIES; (3) DISTRIBUTIONS;
(4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME; AND
(5) REDEEMED OR LIQUIDATED ASSETS OF THE TRUST'S
SECURITIES ARE SUBJECT:
(A) THE NATURE OF SUCH LOAD, FEE, EXPENSE OR CHARGE;
(B) THE AMOUNT THEREOF:
(C) THE NAME OF THE PERSON TO WHOM SUCH AMOUNTS ARE
PAID AND HIS RELATIONSHIP TO THE TRUST:
(D) THE NATURE OF THE SERVICES PERFORMED BY SUCH
PERSON IN CONSIDERATION FOR SUCH LOAD, FEE,
EXPENSE OR CHARGE.
(1) UNDER THE POLICIES
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MONTHLY FEDUCTION -- On each monthly processing
date, the Company will deduct certain following
monthly charges (the "Monthly Deduction") from
Policy Value. The Policy owner may allocate the
Monthly Deduction to one sub-account. If the
Policy owner makes no allocation, the Company
will make a pro-rata allocation. If the
sub-account the Policy owner chose does not have
sufficient funds to cover the Monthly Deduction,
the Company will make a pro-rata allocation.
The following charges comprise the Monthly
Deduction:
- Monthly Insurance Protection Charges --
Before the Final Payment Date, the Company will
deduct a Monthly Insurance Protection charge
from the Policy owner's Policy Value. This
charge is the cost for insurance protection
under the Policy. The Company deduct the Monthly
Insurance Protection charge on each monthly
processing date starting with the date of issue.
The Company will deduct no Monthly Insurance
Protection charges on or after the Final Payment
Date.
- Monthly Expense Charge - The Monthly
Expense Charge will be charged on the monthly
processing date for the first ten years after
issue or an increase in Face Amount. This charge
reimburses the Company for underwriting and
acquisition costs. The charge is equal to a
specified amount that varies with the age, sex,
and underwriting class of the Insured for each
$1,000 of the Policy's Face Amount.
- Monthly Administration Fee - A deduction
of $7.50 will be taken from the Policy Value on
each monthly processing date up to the Final
Payment Date to reimburse the Company for
expenses related to issuance and maintenance of
the Contract.
- Monthly Mortality and Expense Risk
Charge - This charge is currently equal to an
annual rate of 0.35% of the Policy Value in each
sub-account for the first 10 Policy years and an
annual rate of 0.05% for Policy Year 11 and
later. The charge is based on the Policy Value
in the sub-accounts as of the prior Monthly
Processing Date. The Company may increase this
charge, subject to state and federal law, to an
annual rate of 0.60% of the Policy Value in each
sub-account for the first 10 Policy years and an
annual rate of 0.30% for Policy Year 11 and
later. The charge is made after the Final
Payment Date.
This charge compensates us for assuming
mortality and expense risks for variable
interests in the Policies. The mortality risk
the Company assume is that Insureds may live for
a shorter time than anticipated. If this
happens, the Company will pay more Net Death
Benefits than anticipated. The expense risk the
Company assume is that the expenses incurred in
issuing and administering the Policies will
exceed those compensated by the administrative
charges in the Policies. If the charge for
mortality and expense risks is not sufficient to
cover mortality experience and expenses, the
Company will absorb the losses. If the charge
turns out to be higher than mortality and
expense risk expenses, the difference will be a
profit to us. If the charge provides us with a
profit, the profit will be available for our use
to pay distribution, sales and other expenses.
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<PAGE>
- Monthly Rider Charges - Rider Charges
will vary depending upon the rider
selected, and by the sex, underwriting
classification of the Insured.
SURRENDER CHARGES -- The Company will assess a
surrender charge on a withdrawal exceeding the
"Free 10% Withdrawal" deducted from Policy Value
for up to 10 years from Date of Issue of the
Policy or from the date of increase in Face
Amount. This charge applies only on a full
surrender or decrease in Face Amount within ten
years of the date of issue or of an increase in
Face Amount. The maximum Surrender Charge is
equal to a specified amount that based on with
the age, sex, and underwriting class of the
Insured, for each $1,000 of the Policy's Face
Amount. The amount of the Surrender Charges
decreases by one-ninth (11.11%) annually to 0%
by the 10th Contract year. The surrender charge
is designed to partially reimburse us for the
administrative costs of product research and
development, underwriting, Policy
administration, and for distribution expenses,
including commissions to our representatives,
advertising, and the printing of prospectuses
and sales literature.
In the event of a decrease, the surrender charge
deducted is a fraction of the charge that would
apply to a full surrender of the Policy. The
fraction will be determined by dividing the
amount of the decrease by the current face
amount and multiplying the result by the
surrender charge. If more than one surrender
charge is in effect (i.e., pursuant to one or
more increases in the face amount of a Policy),
the surrender charge will be applied in the
following order: (1) the most recent increase,
followed by (2) the next most recent increases
successively, and (3) the initial face amount.
Where a decrease causes a partial reduction in
an increase or in the initial face amount, a
proportionate share of the surrender charge for
that increase or for the initial face amount
will be deducted.
CHARGES ON PARTIAL WITHDRAWAL - A transaction
charge which is the smaller of 2% of the amount
withdrawn or $25.00 will be assessed in all
cases.
A partial withdrawal charge may also be imposed
upon a partial withdrawal. For each partial
withdrawal the Policyowner may withdraw an
amount equal to 10% of the Policy value on the
date the written withdrawal request is received
by the Company less the total of any prior
withdrawals in that Policy year which were not
subject to the partial withdrawal charge,
without incurring a partial withdrawal charge.
Any partial withdrawal in excess of this amount
("excess withdrawal") will be subject to the
partial withdrawal charge. The partial
withdrawal charge is equal to 5% of the excess
withdrawal up to the amount of the surrender
charge(s) on the date of withdrawal. There will
be no partial withdrawal charge if there is no
surrender charge on the date of withdrawal
(I.E., 10 years have passed from the date of
issue and from the effective date of any
increase in the face amount).
The Policy's outstanding surrender charge will
be reduced by the amount of the partial
withdrawal charge deducted. The partial
withdrawal charge deducted will decrease
existing surrender charges in the following
order:
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<PAGE>
- first, the surrender charge for the most
recent increase in face amount;
- second, the surrender charges for the
next most recent increases successively;
and
- last, the surrender charge for the
initial face amount.
(2) UNDERLYING SECURITIES
AIT
The Trustees of AIT have entered into a
Management Agreement with Allmerica Financial
Investment Management Services, Inc. ("AFIMS"),
an indirect wholly owned subsidiary of the
Company, to handle the day-to-day affairs of the
Trust.
Pursuant to the Management Agreement with the
Trust, AFIMS has entered into agreements
("Sub-Adviser Agreements") with other investment
advisers ("Sub-Advisers") under which each
Sub-Adviser manages the investments of one or
more of the Funds. Under the Sub-Adviser
Agreement, the Sub-Adviser is authorized to
engage in portfolio transactions on behalf of
the applicable Fund, subject to such general or
specific instructions as may be given by the
Trustees.
For providing its services under the management
agreement, AFIMS receives a fee, computed daily
at an annual rate based on the average daily net
asset value of each fund as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Select Emerging Markets Fund * 1.35%
Select International Equity Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Aggressive Growth Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Capital Appreciation Fund First $100 million 1.00%
Next $150 million 0.90%
Over $250 million 0.85%
Select Value Opportunity Fund First $100 million 1.00%
Next $150 million 0.85%
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<PAGE>
Next $250 million 0.80%
Next $250 million 0.75%
Over $750 million 0.70%
Select Growth Fund First $250 million 0.85%
Next $250 million 0.80%
Next $250 million 0.75%
Over $750 million 0.70%
Select Strategic Growth Fund * 0.85%
Equity Index Fund First $50 million 0.35%
Next $200 million 0.30%
Over $250 million 0.25%
Investment Grade Income Fund First $50 million 0.50%
Next $50 million 0.45%
Over $100 million 0.40%
Select Income Fund First $50 million 0.60%
Next $50 million 0.55%
Over $100 million 0.45%
Money Market Fund First $50 million 0.35%
Next $200 million 0.25%
Over $250 million 0.20%
</TABLE>
* For the Select Emerging Markets Fund and the
Select Strategic Growth Fund, the investment
management fee does not vary according to the
level of assets in the Fund.
Pursuant to the Management Agreement with the
Trust, AFIMS has entered into agreements
("Sub-Adviser Agreements") with other investment
advisers ("Sub-Advisers") under which each
Sub-Adviser manages the investments of one or
more of the Funds. Under the Sub-Adviser
Agreements, the Sub-Advisers are authorized to
engage in portfolio transactions on behalf of
the applicable Fund, subject to such general or
specific instructions as may be given by the
Trustees. AFIMS is solely responsible for the
payment of all fees for investment management
services to the Sub-Advisers. Sub-Adviser fees,
described in the Trust's prospectus, in no way
increase the costs that the funds, Variable
Account and Policy owners bear.
INVESTMENT ADVISORY SERVICES TO FIDELITY VIP
For managing investments and business affairs,
each Portfolio pays a monthly management fee to
FMR. The prospectus of VIP contains additional
information concerning the Portfolios, including
information concerning additional expenses paid
by the Portfolios, and should be read in
conjunction with this Prospectus.
The fee for each fund is calculated by adding a
group fee rate to an individual fund fee rate,
multiplying the result by the fund's monthly
average net assets, and dividing by tthe
Companylve.
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<PAGE>
The Fidelity VIP High Income Portfolio's annual
fee rate is made up of the sum of two
components:
1. A group fee rate based on the average net
assets of all the mutual funds advised by FMR.
On an annual basis, this rate cannot rise above
0.37%, and drops as total assets under
management increase.
2. An individual fund fee rate of 0.45% for
the Fidelity VIP High Income Portfolio.
The Fidelity VIP Growth and the Fidelity VIP
Equity-Income Portfolios' annual fee rates are
each made up of two components:
1. A group fee rate based on the average net
assets of all the mutual funds advised by FMR.
On an annual basis, this rate cannot rise above
0.52%, and drops as total assets under
management increase.
2. An individual fund fee rate 0.30% for the
Fidelity VIP Growth Portfolio and 0.20% for the
Fidelity VIP Equity-Income Portfolio.
Thus, the Fidelity VIP High Income Portfolio may
have a fee as high as 0.82%. The Fidelity VIP
Growth Portfolio may have a fee of as high as
0.82% of its average net assets. The Fidelity
VIP Equity-Income Portfolio may have a fee as
high as 0.72% of its average net assets.
INVESTMENT ADVISORY SERVICES TO T. ROTHE COMPANY
PRICE
To cover investment management and operating
expenses, the T. Rothe Company Price
International Stock Portfolio pays Price-Fleming
a single, all-inclusive fee of 1.05% of its
average daily net assets.
(3) DISTRIBUTIONS
No distributions are made to Policyowners except
voluntary surrenders or partial withdrawals, and
upon payment of death proceeds. Surrenders and
partial withdrawals may be subject to the
surrender and partial withdrawal charges
described in 13(a)(1), above. Also SEE Item 21.
(4) CUMULATED OR REINVESTED DISTRIBUTIONS OR INCOME
Distributions from the Underlying Funds are
reinvested by Sub-Accounts of the Separate
Account in additional shares of the respective
Underlying Fund, without charge, at net asset
value.
(5) REDEEMED OR LIQUIDATED ASSETS OF THE TRUST'S
SECURITIES
See "Surrender Charge" and "Charges on Partial
Withdrawals" under Item 13(a)(1) above.
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<PAGE>
(b) FOR EACH INSTALLMENT PAYMENT TYPE OF PERIODIC PAYMENT
PLAN CERTIFICATE OF THE TRUST, FURNISH INFORMATION WITH
RESPECT TO SALES LOAD AND OTHER DEDUCTIONS FROM
PRINCIPAL PAYMENTS.
A deduction of 6.35% is made from each premium payment
under a Policy to compensate the Company for premium
taxes paid to the states and local jurisdictions
(2.50%), for DAC taxes (1.00%), and for front-end sales
load (3.0%). No other deductions are made from premiums
prior to allocation to the Company's General Account or
the Separate Account. All other charges and deductions
are made from Policy value, net assets of the Separate
Account, or upon certain surrenders, partial
withdrawals, and decreases in face amount.
(c) STATE (1) THE AMOUNT OF SALES LOAD AS A PERCENTAGE OF
THE NET AMOUNT INVESTED, AND (2) THE AMOUNT OF TOTAL
DEDUCTIONS AS A PERCENTAGE OF THE NET AMOUNT INVESTED
FOR EACH TYPE OF SECURITY ISSUED BY THE TRUST.
Of the 6.35% payment expense deduction, 3.0% is for
sales load, as described in (b), above. A contingent
deferred sales load is calculated at issuance of the
Policy and for increases in face amounts, but is
deducted if at all, only upon surrender or decreases in
face amount within 10 Policy years or less. Also, a
transaction charge and partial withdrawal charge may be
deducted on partial withdrawals.
(d) EXPLAIN FULLY THE REASONS FOR ANY DIFFERENCE IN THE
PRICE AT WHICH SECURITIES ARE OFFERED FOR ANY CLASS OF
TRANSACTIONS TO ANY CLASS OR GROUP OF OFFICERS,
INCLUDING OFFICERS, DIRECTORS OR EMPLOYEES OF THE
DEPOSITION TRUSTEE, CUSTODIAN OR PRINCIPAL UNDERWRITER.
Not Applicable.
(e) FURNISH A BRIEF DESCRIPTION OF ANY LOADS, FEES, EXPENSES
OR CHARGES NOT COVERED IN ITEM 13(a) WHICH MAY BE PAID
BY SECURITY HOLDERS IN CONNECTION WITH THE TRUST OR ITS
SECURITIES.
The Company reserves the right to impose a charge for
changing the net premium allocation instructions, for
changing the allocation of any monthly deductions, or
for a projection of values. No such charges are
currently imposed and any such charge is guaranteed not
to exceed $25.00.
(f) STATE WHETHER THE DEPOSITOR, PRINCIPAL UNDERWRITER,
CUSTODIAN OR TRUSTEE, OR ANY AFFILIATED PERSON OF THE
FOREGOING, MAY RECEIVE PROFITS OR OTHER BENEFITS NOT
INCLUDED IN ANSTHE COMPANYR TO ITEM 13(a) OR 13(d)
THROUGH THE SALE OR PURCHASE OF THE TRUST'S SECURITIES
OR INTERESTS IN SUCH SECURITIES, OR UNDERLYING
SECURITIES OR INTERESTS IN UNDERLYING SECURITIES, AND
DESCRIBE FULLY THE NATURE AND EXTENT OF SUCH PROFITS OR
BENEFITS.
Neither the Company, Allmerica Investments, Inc. nor any
affiliated person of the foregoing may receive any
profit or any other benefit from premium payments under
the Policy or tie investments held in the Separate
Account not included in the answer to Item 13(a) or (d)
through the sale of purchase of the Policy or shares of
the Underlying Funds, except that (1) the Company may
receive a profit to the extent that the cost of
insurance built into the Policy exceeds the actual cost
of insurance needed to pay benefits; (2) favorable
mortality or expense experience may cause the insurance
provided to be profitable to the Company; (3) the
Company will compensate certain others (including the
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<PAGE>
company agents), for services rendered in connection
with the distribution of the Policy, as described in
Item 38, but such payments will be made from the
Company's General Account; and (4) the investment
advisers of the respective Underlying Funds will receive
an advisory fee, as described in Item 13(a)(2).
(g) STATE THE PERCENTAGE THAT THE AGGREGATE ANNUAL CHARGES
AND DEDUCTIONS FOR MAINTENANCE AND OTHER EXPENSES OF THE
TRUST BEAR TO THE DIVIDEND AND INTEREST INCOME FROM THE
TRUST PROPERTY DURING THE PERIOD COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH.
Not Applicable. The Separate Account has no assets as of
the date of this filing.
(h) OTHER
The Company will recoup commission and other sales
expense through a combination of surrender and partial
withdrawal charges, and the investment earnings in
excess of the interest credited on amounts allocated to
the General Account.
INFORMATION CONCERNING THE OPERATIONS OF THE TRUST
14. DESCRIBE THE PROCEDURE WITH RESPECT TO THE APPLICATIONS (IF ANY)
AND THE ISSUANCE AND AUTHENTICATION OF THE TRUST'S SECURITIES,
AND STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT PERTAINING THERETO.
Individuals wishing to purchase a Policy must submit a completed
application to an authorized registered agent or to the
Company's Principal Office. The Company generally will issue a
Policy only on the lives of Insureds age 85 and under, who
supply evidence of insurability satisfactory to the Company.
Acceptance is subject to the Company's underwriting rules, and
the Company reserves the right to reject an application for any
reason.
Within limits, applicants may choose the amount of the initial
premium desired and the initial face amount of the Policy.
Currently, the minimum specified face amount of insurance for
which a Policy may be issued is $50,000.
The Policy will be effective on the date of issue only after all
outstanding delivery requirements are satisfied and the Company
has received sufficient premium. The date of issue is the date
used to determine all future periodic transactions under the
Policy, e.g., monthly payment date, Policy months and Policy
years. Within limits, the Company may establish an earlier date
of issue.
If a premium payment equivalent to at least one minimum monthly
payment is received with the application, and there has been no
material misrepresentation on the application, fixed,
conditional insurance of up to the amount applied for but not to
exceed $500,000, will start as of the date of the application
and will generally continue for a maximum of 90 days. If a
medical examination of a person to be Insured is required by the
Company's underwriting rules, coverage on that person will not
start until completion of the examination. In no event will a
death benefit be provided under the conditional insurance
agreement if death is by suicide.
If the Applicant does not wish to make any payment until the
Policy is issued, or if the amount of money paid on a prepaid
application is not sufficient to place the Policy in force, the
Company will require payment upon delivery of the Policy of
sufficient premium to place the Policy in force upon delivery of
the Policy. If the Policy is not issued, the premiums will be
returned to the
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<PAGE>
Applicant, WITHOUT INTEREST. No Policy will be in force until
sufficient premium is paid.
15. DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT OF PAYMENTS
FROM PURCHASERS OF THE TRUST'S SECURITIES AND THE HANDLING OF
THE PROCEEDS THEREOF, AND STATE THE SUBSTANCE OF THE PROVISIONS
OF ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
PREMIUM PAYMENTS - Premium Payments are payable only to the
Company, and may be mailed to the Principal Office or paid
through an authorized agent of the Company. All premium payments
after the initial premium payment are credited to the Separate
Account or General Account as of date of receipt at the
Principal Office.
The Policyowner may establish a schedule of planned premiums
which will be billed by the Company at regular intervals.
Failure to pay planned premiums, however, will not itself cause
the Policy to lapse. The Policyowner may also make unscheduled
premium payments at any time or skip planned premium payments
subject to the maximum and minimum premium limitations described
below.
The Policyowner may also elect to pay premiums by means of a
monthly automatic payment ("MAP") procedure. Under a MAP
procedure, amounts will be deducted each month, generally on the
Monthly Payment Date, from the Policyowner's checking account
and applied as a premium under a Policy. The minimum payment
permitted under MAP is $50.
Premiums are not limited as to frequency and number. However, no
premium payment may be less than $100 without the Company's
consent. Moreover, premium payments must be sufficient to
provide a positive surrender value at the end of each Policy
month, or the Policy may lapse.
The total of all premiums paid can never exceed the then-current
maximum premium limitation determined by Internal Revenue
Service rules. Thus, the Company may limit the premiums received
in any Policy year to an amount not less than the "guideline
level premium" determined by the Company with respect to the
Policy. In addition, the sum of the premiums paid, less any
partial withdrawals, may not exceed the greater of the guideline
single premium or the sum of the guideline level premiums to the
date of payment. The guideline premium amounts will change
whenever there is any change in the face amount, the addition or
deletion of a rider, or a change in the Death Benefit option.
These premium limitations do not apply to the extent necessary
to prevent lapse of the Policy during a Policy year.
If at any time a premium is paid that would result in total
premiums exceeding the then current maximum premium limitation,
the Company will accept only that portion of the premium that
would make total premiums equal the maximum limitation. Premiums
in excess of that amount will be refunded to the Policyowner,
and no further premiums will be accepted until allowed by the
current maximum premium limitation prescribed by Internal
Revenue Service rules.
16. DESCRIBE THE PROCEDURE WITH RESPECT TO THE ACQUISITION OF
UNDERLYING SECURITIES AND THE DISPOSITION THEREOF, AND STATE THE
SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
Each Sub-Account of the Separate Account invests its assets in
shares of a corresponding Underlying Fund. Purchases and
redemptions of such shares are made at net asset value, with no
deduction for sales load.
Amounts of net purchase payments allocated to a Sub-Account,
transfers to that Sub-Account, and reserve adjustment transfers,
if any, will be netted as of each valuation date against amounts
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withdrawn from the Sub-Account in connection with Policy
surrenders, partial withdrawals, transfers, and death benefits,
as well as the asset charge and amounts paid to the Company in
lieu of taxes, if any. A net purchase or sale of Underlying Fund
shares will be made for a Sub-Account at net asset value. All
income, dividends and realized gain distributions of a
Underlying Fund will be reinvested in shares of the respective
Underlying Fund at net asset value. Valuation dates currently
occur on each day on which the New York Stock Exchange is open
for trading, and on such other days where there is a sufficient
degree of trading in a Underlying Fund's securities such that
the current net asset value of the Sub-Accounts may be
materially affected.
17. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO WITHDRAWAL OR
REDEMPTION BY SECURITY HOLDERS.
SURRENDER - A Policyowner may at any time surrender the
Policy and receive its surrender value (i.e., Policy
value, less Debt and applicable surrender charges and
any first-year monthly administrative charges not yet
deducted) upon written request signed by the Policyowner
and return of the Policy to the Principal Office. The
surrender value will be based on the Policy value as of
the valuation date on which the request and Policy are
received at the Principal Office. A surrender charge may
be deducted when a Policy is surrendered. See Item
13(a), "Surrender."
The surrender value is normally payable within seven
days following the Company's receipt of the surrender
request. The Company reserves the right to defer
surrenders and partial withdrawals of amounts funded by
each Sub-Account during any period when (1) trading on
the New York Stock Exchange is restricted as determined
by the SEC or such Exchange is closed for other than
weekends and holidays, (2) the SEC has by order
permitted such suspension, or (3) an emergency, as
determined by the SEC, exists such that disposal of
portfolio securities or valuation of assets of each
Sub-Account is not reasonably practicable.
The right is reserved by the Company to defer surrenders
and partial withdrawal of amounts allocated to the
Company's General Account for a period not to exceed six
months.
PARTIAL WITHDRAWAL - At any time after the first Policy
year, a Policyowner may redeem a portion of the Policy
value of his or her Policy, subject to the limits stated
below, upon written request signed by the Policyowner
and filed at the Principal Office. Where allocations
have been made to more than one account, a percentage of
the partial withdrawal may be allocated to each such
account. The written request must indicate the dollar
amount the Policyowner wishes to receive and the account
from which such amount is to be redeemed.
The Policyowner may allocate the amount withdrawn among
the Sub-Accounts and the General Account. If no
allocation instructions are provided, the Company will
make a pro rata allocation.
A partial withdrawal from a Sub-Account will result in
cancellation of a number of Accumulation Units
equivalent in value to the amount withdrawn, computed as
of the valuation date that the request is received at
the Company's Principal Office. The amount withdrawn
equals the amount requested by the Policyowner plus any
applicable charges. The Company will normally pay the
amount of the partial withdrawal within seven days, but
may delay payment under certain circumstances described
above under
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"Surrender." See Item 13(a), "Partial Withdrawals."
(b) FURNISH THE NAMES OF ANY PERSONS WHO MAY REDEEM OR
REPURCHASE, OR ARE REQUIRED TO REDEEM OR REPURCHASE, THE
TRUST'S SECURITIES OR UNDERLYING SECURITIES FROM
SECURITY HOLDERS, AND THE SUBSTANCE OF THE PROVISIONS OF
ANY INDENTURE OR AGREEMENT PERTAINING THERETO.
The Company is required to process all surrender and
partial withdrawal requests as described in Item 17(a).
The Underlying Funds will redeem their shares upon the
Company's request in accordance with the Investment
Company Act of 1940. Redeemed shares may later be
reissued.
(c) INDICATE WHETHER REPURCHASED OR REDEEMED SECURITIES WILL
BE CANCELLED OR MAY BE RESOLD.
If a Policy is surrendered, the Policy will be cancelled
and may not be reissued. If a Policy terminates due to
lapse or foreclosure, the Policy may be reinstated as
provided below. Unless the Guaranteed Death Benefit
rider is in effect, the Policy will terminate if:
- Surrender value is insufficient to cover the
next monthly insurance protection charge plus
loan interest accrued; or
- Outstanding loan exceeds the policy value less
surrender charges
If one of these situations occurs, the Policy will be in
default. The Policy owner will then have a grace period
of 62 days, measured from the date of default, to pay a
premium sufficient to prevent termination. On the date
of default, the Company will send a notice to the Policy
owner and to any assignee of record. The notice will
state the premium due and the date by which it must be
paid.
Failure to pay a sufficient premium within the grace
period will result in Policy termination. If the Insured
dies during the grace period, the Company will deduct
from the net death benefit any monthly insurance
protection charges due and unpaid through the Policy
month in which the Insured dies and any other overdue
charge.
During the first 48 Policy months following the date of
issue or an increase in the face amount, a guarantee may
apply to prevent the Policy from terminating because of
insufficient surrender value. This guarantee applies if,
during this period, the Policy owner pays premiums that,
when reduced by partial withdrawals and partial
withdrawal costs, equal or exceed specified minimum
monthly payments. The specified minimum monthly payments
are based on the number of months the Policy, increase
in face amount or policy change that causes a change in
the minimum monthly payment has been in force. A policy
change that causes a change in the minimum monthly
payment is a change in the face amount or the addition
or deletion of a rider. Except for the first 48 months
after the date of issue or the effective date of an
increase, payments equal to the minimum monthly payment
do not guarantee that the Policy will remain in force.
If the option Guaranteed Death Benefit rider is in
effect, the Policy will not lapse regardless of the
investment performance of the Variable Account. See
"Guaranteed Death Benefit Rider."
TERMINATION- The failure to make premium payments will
not cause the Policy to
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lapse unless: (a) the Policy Value is insufficient to
cover the next Monthly Deduction plus loan interest
accrued; or (b) if Debt exceeds the Policy value. If one
of these situations occurs, the Policy will be in
default. The Policy owner will then have a grace period
of 62 days, measured from the date of default, to make
sufficient payments to prevent termination. On the date
of default, the Company will send a notice to the Policy
owner and to any assignee on record. The notice will
state the amount of premium due and the date on which it
is due. Failure to make a sufficient payment within the
grace period will result in termination of the Policy
without any Policy value. If the Insured dies during the
grace period, the Death Proceeds will still be payable,
but any Monthly Deductions due and unpaid through the
Policy month in which the Insured dies and any other
overdue charge will be deducted from the Death Proceeds.
Except for the situation described in (b) above, if,
during the first 48 months after the date of issue or
the effective date of an increase in face amount, the
Policy owner makes premium payments, less Debt, partial
withdrawal charges, at least equal to the sum of the
minimum monthly factors for the number of months the
Policy, increase or Policy change which causes a change
in the minimum monthly factor has been in force, the
Policy is guaranteed not to lapse during that period. A
Policy change which causes a change in the minimum
monthly factor is a change in the face amount or the
addition or deletion of a rider. Except for the first 48
months after the date of issue or the effective date of
an increase, payments equal to the minimum monthly
factor do not guarantee that the Policy will remain in
force.
REINSTATEMENT -- A terminated Policy may be reinstated
within three years of the date of default and before the
final payment date. The reinstatement takes effect on
the monthly processing date following the dates the
Policy owner submits to us: (1) Written application for
reinstatement; (2) Evidence of insurability showing that
the Insured is insurable according to our underwriting
rules; and (3) a payment that, after the deduction of
the payment expense charge, is large enough to cover the
minimum amount payable. Policies that have been
surrendered may not be reinstated.
MINIMUM AMOUNT PAYABLE -- If reinstatement is requested,
the Policy owner must pay the minimum monthly payment
for the three months beginning on the date of
reinstatement.
SURRENDER CHARGE -- The surrender charge on the date of
reinstatement is the surrender charge that was in effect
on the date of termination.
POLICY VALUE ON REINSTATEMENT -- The policy value on the
date of reinstatement is: the net payment made to
reinstate the Policy and interest earned from the date
the payment was received at our principal office; plus
the policy value less any outstanding loan on the date
of default (not to exceed the surrender charge on the
date of reinstatement); minus the monthly deductions due
on the date of reinstatement. The Policy owner may
reinstate any outstanding loan.
18. (a) DESCRIBE THE PROCEDURE WITH RESPECT TO THE RECEIPT,
CUSTODY AND DISPOSITION OF THE INCOME AND OTHER
DISTRIBUTABLE FUNDS OF THE TRUST AND STATE THE SUBSTANCE
OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT
PERTAINING THERETO.
Distributions with respect to the shares of a Underlying
Fund held by a Sub-Account are reinvested in shares of
that Underlying Fund at net asset value. Such shares are
added to
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the assets of the respective Sub-Account.
(b) DESCRIBE THE PROCEDURE, IF ANY, WITH RESPECT TO THE
REINVESTMENT OF DISTRIBUTIONS TO SECURITY HOLDERS AND
STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT PERTAINING THERETO.
No distributions are made to Policy owners other than in
connection with a death benefit or with a Policy
owner-initiated loan, partial withdrawal or surrender of
the Policy. See Items 13(a) and 21.
(c) IF ANY RESERVES OR SPECIAL FUNDS ARE CREATED OUT OF
INCOME OR PRINCIPAL, STATE WITH RESPECT TO EACH SUCH
RESERVE OR FUND THE PURPOSE AND ULTIMATE DISPOSITION
THEREOF, AND DESCRIBE THE MANNER OF HANDLING SAME.
Net premiums placed in the Separate Account constitute
certain reserves for benefits under the Policy.
(d) SUBMIT A SCHEDULE SHOWING THE PERIODIC AND SPECIAL
DISTRIBUTIONS WHICH HAVE BEEN MADE TO SECURITY HOLDERS
DURING THE THREE YEARS COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH. STATE FOR EACH SUCH
DISTRIBUTION THE AGGREGATE AMOUNT AND AMOUNT PER SHARE.
IF DISTRIBUTIONS FROM SOURCES OTHER THAN CURRENT INCOME
HAVE BEEN MADE, IDENTIFY EACH SUCH OTHER SOURCE AND
INDICATE WHETHER SUCH DISTRIBUTION REPRESENTS THE RETURN
OF PRINCIPAL PAYMENTS TO SECURITY HOLDERS. IF PAYMENTS
OTHER THAN CASH THE COMPANYRE MADE, DESCRIBE THE NATURE
THEREOF, THE ACCOUNT CHARGED AND THE BASIS OF
DETERMINING THE AMOUNT OF SUCH CHARGE.
Not Applicable. The Separate Account has not begun
business operations.
19. DESCRIBE THE PROCEDURE WITH RESPECT TO THE KEEPING OF RECORDS
AND ACCOUNTS OF THE TRUST, THE MAKING OF REPORTS AND THE
FURNISHING OF INFORMATION TO SECURITY HOLDERS, AND THE SUBSTANCE
OF THE PROVISIONS OF ANY INDENTURE OR AGREEMENT PERTAINING
THERETO.
The Company will maintain the records and books of the Separate
Account. The Company will also maintain records for each Policy,
including the number and value of accumulation units of each
Sub-Account credited to each Policy and the value of
accumulations in the General Account.
Issuance and transfer of Underlying Fund shares will be by book
entry only. Stock certificates will not be issued to the Company
or Separate Account. Shares ordered from the Underlying Funds
will be recorded in an appropriate title for the Separate
Account or appropriate Sub-Account.
Policy owners will be sent promptly statements of significant
transactions such as premium payments (other than payments made
pursuant to the Monthly Automatic Premium payment procedure),
changes in specified face amount, change in Death Benefit
Option, transfers among Sub-Accounts and the General Account,
partial withdrawals, increases in loan amount by the Policy
owner, loan repayments, lapse, termination for any reason, and
reinstatement. An annual statement will also be sent to the
Policy owner within 30 days after a Policy year. The annual
statement will summarize all of the above transactions and
deductions of charges during the Policy year. It will also set
forth the status of the death benefit, Policy value, surrender
value, amounts in the Sub-Accounts and General Account, and any
Policy loan(s).
In addition, the Policy owner will be sent semi-annual reports
containing financial statements and
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other information for the Separate Account, AIT, Fidelity VIP
and T. Rowe Price, as required by the 1940 Act.
20. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT CONCERNING THE TRUST WITH RESPECT TO THE FOLLOWING:
(a) AMENDMENTS TO SUCH INDENTURE OR AGREEMENT.
Not Applicable.
(b) THE EXTENSION OR TERMINATION OF SUCH INDENTURE OR
AGREEMENT.
Not Applicable.
(c) THE REMOVAL OR RESIGNATION OF THE TRUSTEE OR CUSTODIAN,
OR THE FAILURE OF THE TRUSTEE OR CUSTODIAN TO PERFORM
ITS DUTIES, OBLIGATIONS AND FUNCTIONS.
The Company will act as custodian of assets of the
Separate Account. The Company may appoint another
custodian. In such event, the custodial agreement will
provide that the assets owned by the Separate Account
shall be delivered directly by the Company to a
successor custodian.
(d) THE APPOINTMENT OF A SUCCESSOR TRUSTEE AND THE PROCEDURE
IF A SUCCESSOR TRUSTEE IS NOT APPOINTED.
Not Applicable.
(e) THE REMOVAL OR RESIGNATION OF THE DEPOSITOR, OR THE
FAILURE OF THE DEPOSITOR TO PERFORM ITS DUTIES,
OBLIGATIONS AND FUNCTIONS.
There is no such provision in an indenture or agreement.
Under Delaware law, the Company may not abrogate its
obligation under the Policies.
(f) THE APPOINTMENT OF A SUCCESSOR DEPOSITOR AND THE
PROCEDURE IF A SUCCESSOR DEPOSITOR IS NOT APPOINTED.
There is no such provision in any indenture or
agreement.
21. (a) STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT WITH RESPECT TO LOANS TO SECURITY HOLDERS.
Loans may be obtained by request to the Company on the
sole security of the Policy. The total amount which may
be borrowed is the loan value. The loan value is 90% of
an amount equal to Policy value minus surrender charges.
A Policy loan may be allocated among the General Account
and one or more Sub-Accounts. If the Policy owner does
not make an allocation, the Company will allocate the
loan among the accounts in the same proportion that the
Policy value in the General Account, less Debt, and the
Policy value in each Sub-Account bear to the total
Policy value, less Debt, on the date the Company
receives the loan request. Policy value in each
Sub-Account equal to the Policy loan allocated to such
Sub-Account will be transferred to
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the General Account, and the number of Accumulation
Units equal to Policy value so transferred will be
cancelled. Amounts transferred to or held in the General
Account to secure Debt will earn interest at a rate
equal to an effective annual yield of at least 4.00%.
After due and unpaid interest is added to loan amount,
if the new loan amount exceeds the Policy value in the
General Account, the Company will transfer Policy value
equal to that excess Debt from each Sub-Account to the
General Account as security for the excess Debt. The
Company will allocate the amount transferred among the
Sub-Accounts in the same proportion that the Policy
value in each Sub-Account bears to the total Policy
value in all Sub-Accounts.
PREFERRED LOAN OPTION. The option is automatically
available, unless otherwise requested by the Policy
owner. The guaranteed annual interest rate credited to
the Policy value securing a preferred loan will be
4.00%.
LOAN INTEREST CHARGED - The Company charges interest on
the loan, which accrues daily and is payable in arrears
at the current annual rate of 4.80% (4.00% for preferred
loans). The current annual rate of interest charged on
loans may change, but is guaranteed not to exceed 6.00%
(4.50% for preferred loans). Interest is payable at the
end of each Policy year or on a pro rata basis for such
shorter period as the loan may exist. Interest not paid
when due will be added to the loan principal and bear
interest at the same rate of interest.
REPAYMENT OF DEBT - Loans may be repaid at any time
prior to the lapse of the Policy. Upon repayment of
Debt, the portion of the Policy value that is in the
General Account securing Debt will be transferred to the
various Sub-Accounts and increase the Policy value in
such accounts in accordance with the Policy owner's
instructions. If the Policy owner does not make a
repayment allocation, the Company will allocate Policy
value in accordance with the Policy owner's most recent
premium allocation instructions; provided, however, that
loan repayments allocated to the Separate Account cannot
exceed Policy value previously transferred from the
Separate Account to secure the Debt.
FORECLOSURE - If Debt exceeds the amount needed to pay
the next monthly deductions, the Policy will terminate.
A notice of such pending termination will be mailed to
the last known address of the Policy owner and any
assignee. If the excess Debt is not paid within 62 days
after this notice is mailed, the Policy will terminate
with no value. A Policy may be reinstated following loan
foreclosure.
(b) FURNISH A BRIEF DESCRIPTION OF ANY PROCEDURE OR
ARRANGEMENT BY WHICH LOANS ARE MADE AVAILABLE TO
SECURITY HOLDERS BY THE DEPOSITOR, PRINCIPAL
UNDERWRITER, TRUSTEE OR CUSTODIAN, OR ANY AFFILIATED
PERSON OF THE FOREGOING.
See Items 10(i) and 21(a), above. No other loans are
made, except under the terms of life insurance policies
which may be issued by the depositor or affiliated
insurance companies.
(c) IF SUCH LOANS ARE MADE, FURNISH THE AGGREGATE AMOUNT OF
LOANS OUTSTANDING AT THE END OF THE LAST FISCAL YEAR,
THE AMOUNT OF INTEREST COLLECTED DURING THE LAST FISCAL
YEAR ALLOCATED TO THE DEPOSITOR, PRINCIPAL UNDERWRITER,
TRUSTEE OR CUSTODIAN OR AFFILIATED PERSON OF THE
FOREGOING, AGGREGATE AMOUNT OF LOANS IN DEFAULT AT THE
END OF THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH.
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Not Applicable.
22. STATE THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE OR
AGREEMENT WITH RESPECT TO LIMITATIONS ON THE LIABILITIES OF THE
DEPOSITOR, TRUSTEE OR CUSTODIAN, OR ANY OTHER PARTY TO SUCH
INDENTURE OR AGREEMENT.
The Policies provide that the Company shall not be charged with
notice of any assignment of the Policy unless it is in writing
and filed at the Company's Principal Office. The Company assumes
no liability for the validity of any assignment.
23. DESCRIBE ANY BONDING ARRANGEMENT FOR OFFICERS, DIRECTORS,
PARTNERS OR EMPLOYEES OF THE DEPOSITOR OR PRINCIPAL UNDERWRITER
OF THE TRUST, INCLUDING THE AMOUNT OF COVERAGE AND THE TYPE OF
BOND.
The Company and Allmerica Investments, Inc. are named Insureds
under a blanket bond in the amount of $20 million, issued by
Lloyds of London. The bond covers officers, directors, and
employees of the Company and Allmerica Investments, Inc., all of
whom are employees of State Mutual.
AIT maintains a fidelity bond pursuant to Rule 17(g) under the
1940 Act, in the amount of $3.1 million, issued by Underwriters
at Lloyds and other Lordon Companies. The bond covers directors
and officers of AIT, who may also be director or officers of the
depositor and principle underwriter, and employees of First
Allmerica who are "access persons" of AIT.
24. STATE THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF ANY
INDENTURE OR AGREEMENT CONCERNING THE TRUST OR ITS SECURITIES
AND A DESCRIPTION OF ANY OTHER MATERIAL FUNCTIONS OR DUTIES OF
THE DEPOSITOR, TRUSTEE OR CUSTODIAN NOT STATED IN ITEM 10 OR
ITEMS 14 TO 23 INCLUSIVE.
PARTICIPATION AGREEMENT. The Company and Separate Account will
enter into Participation Agreements with AIT, Fidelity VIP, and
T. Rowe Company, which define the terms under which the
Sub-Accounts of Separate Account invest in the Underlying Funds.
POLICY OWNER - The Policy owner is the Insured unless another
Policy owner has been named in the application for the Policy.
The Policy owner is generally entitled to exercise all rights
under a Policy while the Insured is alive, subject to the
consent of any irrevocable beneficiary (the consent of a
revocable beneficiary is not required). The consent of the
Insured is required whenever the face amount of insurance is
increased.
BENEFICIARY - The beneficiary is the person or persons to whom
the insurance proceeds are payable upon the Insured's death.
Unless otherwise stated in the Policy, the beneficiary has no
rights in the Policy before the death of the Insured. While the
Insured is alive, the Policy owner may change any beneficiary
unless the Policy owner has declared a beneficiary to be
irrevocable. If no beneficiary is alive when the Insured dies,
the owner (or the owner's estate) will be the -----------
beneficiary. If more than one beneficiary is alive when the
Insured dies, they will be paid in equal shares, unless the
Policy owner has chosen otherwise. Where there is more than one
beneficiary, the interest of a beneficiary who dies before
Insured will pass to surviving beneficiaries proportionately.
INCONTESTABILITY - The Company will not contest the validity of
a Policy after it has been in force during the Insured's
lifetime for two years from the date of issue. The Company will
not contest the validity of any increase in the face amount
after such increase or rider has been in force during the
Insured's lifetime for two years from its effective date.
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SUICIDE - The Death Proceeds will not be paid if the Insured
commits suicide, while sane or insane, generally within two
years from the date of issue. Instead, the Company will pay the
beneficiary an amount equal to all premiums paid for the Policy,
without interest, less any outstanding Debt and less any partial
withdrawals. If the Insured commits suicide, while sane or
insane, generally within two years from the effective date of
any increase in the Death Benefit, the Company's liability with
respect to such increase will be limited to a refund of the cost
thereof. The beneficiary will receive the monthly insurance
protection charges plus monthly expense charges paid for such
increase.
AGE AND SEX - If the Insured's age or sex as-stated in the
application for a Policy is not correct, benefits under a Policy
will be adjusted to reflect the correct age and sex. The
adjusted benefit will be that which the most recent cost of
insurance charge would have purchased for the correct age and
sex. In no event will the Death Benefit be reduced to less than
the guideline minimum Death Benefit.
ASSIGNMENT - The Policy owner may assign a Policy as collateral
or make an absolute assignment of the Policy. All rights under
the Policy will be transferred to the extent of the assignee's
interest. When recorded, the assignment will take effect as of
the date the written request was signed. The Company is not
bound by an assignment or release thereof, unless it is in
writing and is recorded at the Company's Principal Office. Any
rights created by the assignment will be subject to any payments
made or actions taken by the Company before the assignment is
recorded. The Company is not responsible for the validity of any
assignment or release.
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
ORGANIZATION AND OPERATIONS OF DEPOSITOR
25. STATE THE FORM OF ORGANIZATION OF THE DEPOSITOR OF THE TRUST,
THE NAME OF THE STATE OR OTHER SOVEREIGN POTHE COMPANYR UNDER
THE LAWS OF WHICH THE DEPOSITOR WAS ORGANIZED AND THE DATE OF
ORGANIZATION.
The Company is a stock life insurance company organized as a
corporation under the laws of the State of Delaware on July 26,
1974. Prior to January 1, 1982, the Company was known as the
"American Variable Annuity Life Assurance Company." The Company
is the successor in interest by virtue of merger to a life
insurance company of that name which was organized under the
laws of the State of Arkansas in January 1967. Effective October
1, 1995, the Company changed its name to "Allmerica Financial
Life Insurance and Annuity Company."
As of July 1, 1999, the Company is a direct subsidiary of First
Allmerica Financial Life Insurance Company ("First Allmerica"),
which in turn is a wholly-owned subsidiary of Allmerica
Financial Corporation, 440 Lincoln Street, Worcester,
Massachusetts, 01653.
26. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ALL
FEES RECEIVED BY THE DEPOSITOR OF THE TRUST IN
CONNECTION WITH THE EXERCISE OF ANY FUNCTIONS OR DUTIES
CONCERNING SECURITIES. OF THE TRUST DURING THE PERIOD
COVERED BY THE FINANCIAL STATEMENTS FILED HEREWITH:
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY
FEE OR ANY PARTICIPATION IN FEES RECEIVED BY THE
DEPOSITOR FROM ANY UNDERLYING INVESTMENT COMPANY OR ANY
AFFILIATED PERSON OR INVESTMENT ADVISER OF SUCH COMPANY:
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The Company has entered into Service Agreements with
from the investment advisers or other service providers
of certain Funds, pursuant to which the Company will
receive fees in return for providing certain services to
Policy owners. Currently, the Company receives service
fees with respect to the Fidelity VIP Equity-Income
Portfolio, Fidelity VIP Growth Portfolio, and Fidelity
VIP High Income Portfolio, at an annual rate of 0.10% of
the aggregate net asset value, respectively, of the
shares of such Funds held by the Variable Account. With
respect to the T. Rowe Price International Stock
Portfolio, the Company receives service fees at an
annual rate of 0.15% per annum of the aggregate net
asset value of shares held by the Variable Account. The
Company may in the future render services for which it
will receive compensation from the investment advisers
or other service providers of other Funds.
The Company has not received any such fee or
participation with respect to the Separate Account or
the Policies.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION.
See 26(b), above.
(2) THE NAME OF THE PERSON MAKING PAYMENTS.
See 26(b), above.
(3) THE NATURE OF THE SERVICES RENDERED IN
CONSIDERATION FOR SUCH FEE OR PARTICIPATION.
See 26(b), above.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST
FISCAL YEAR COVERED BY THE FINANCIAL STATEMENTS
FILED HEREWITH.
Not Applicable.
27. DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS ENGAGED IN BY THE
DEPOSITOR INCLUDING A STATEMENT AS TO ANY BUSINESS OTHER THAN
THAT OF DEPOSITOR OF THE TRUST. IF THE DEPOSITOR ACTS OR HAS
ACTED IN ANY CAPACITY WITH RESPECT TO ANY INVESTMENT COMPANY OR
COMPANIES OTHER THAN THE TRUST, STATE THE NAME OR NAMES OF SUCH
COMPANY OR COMPANIES, THEIR RELATIONSHIP, IF ANY, TO THE TRUST,
AND THE NATURE OF THE DEPOSITOR'S ACTIVITIES THEREWITH. IF THE
DEPOSITOR HAS CEASED TO ACT IN SUCH NAMED CAPACITY, STATE THE
DATE OF AND CIRCUMSTANCES SURROUNDING SUCH CESSATION.
The Company is licensed to write life insurance, health
insurance, and variable contracts in the District of Columbia,
Puerto Rico, the Virgin Islands, and all states except New York.
The Company offers variable life and annuity Contracts through
other of its Separate Accounts, all of which are registered as
unit investment trusts under the Investment Company Act of 1940.
The Company served as investment adviser for its Separate
Account VA-A (formerly the "American Variable Annuity Fund")
from 1967 until 1969. The Company also served as principal
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underwriter for Separate Account VA-A from 1967 until 1972.
OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR
28. (a) FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING
INFORMATION WITH RESPECT TO THE DEPOSITOR OF THE TRUST,
WITH RESPECT TO EACH OFFICER, DIRECTOR, OR PARTNER OF
THE DEPOSITOR, AND WITH RESPECT TO EACH NATURAL PERSON
DIRECTLY OR INDIRECTLY OWING OR HOLDING WITH POWER TO
VOTE 5% OR MORE OF THE OUTSTANDING VOTING SECURITIES OF
THE DEPOSITOR.
(i) NAME AND PRINCIPAL BUSINESS ADDRESS.
(ii) NATURE OF RELATIONSHIP OR AFFILIATION WITH
DEPOSITOR OF THE TRUST;
(iii) OWNERSHIP OF ALL SECURITIES OF THE DEPOSITOR;
(iv) OWNERSHIP OF ALL SECURITIES OF THE TRUST;
(v) OTHER COMPANIES OF WHICH EACH PERSON NAMED ABOVE
IS PRESENTLY OFFICER, DIRECTOR OR PARTNER.
See 28(b) and 29, below.
(b) FURNISH A BRIEF STATEMENT OF THE BUSINESS
EXPERIENCE DURING THE LAST FIVE YEARS OF EACH
OFFICER, DIRECTOR OR PARTNER OF THE DEPOSITOR.
<TABLE>
<CAPTION>
NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
<S> <C>
Bruce C. Anderson Director of FirsteAllmerica since 1996;
Director Vice President, First Allmerica since 1984
Warren E. Barnes Vice President (since 1996) and Corporate
Vice President and Controller Controller (since 1998) of First Allmerica;
Vice-President and Co0-Controller, First
Allmerica, (1997); Assistant Vice President
and Assistant Controller, First Allmerica
(1995-1996); Assistant Vice President,
Corporate Accounting and Reporting, First
Allmerica (1993 to 1995).
Mary M. Eldridge Secretary of First Allmerica since 1999;
Secretary Attorney, First Allmerica since 1998;
employee of First Allmrica since 1992.
Robert E. Bruce Director and Chief Information Officer of
Director and Chief Information First Allmerica since 1997; Vice President
Officer of First Allmerica since 1995; Corporate
Manager, Digital Equipment Corporation 1979
to 1995
John P. Kavanaugh Director and Chief Investment Officer of
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Director, Vice President and First Allmerica since 1996; Vice President,
Chief Investment Officer First Allmerica since 1991
John F. Kelly Director of First Allmerica since 1996;
Director, Vice General Counsel since 1981; Senior Vice
President since 1986, and Assistant
Secretary, First Allmerica since 1991
J. Barry May Director of First Allmerica since 1996;
Director Director and President, The Hanover
Insurance Company since 1996; Vice
President, The Hanover Insurance Company,
1993 to 1996; General Manager, The Hanover
Insurance Company 1989 to 1993
James R. McAuliffe Director of First Allmerica since 1996;
Director Director of Citizens Insurance Company of
America since 1992; President since 1994 and
CEO since 1996; Vice President, First
Allmerica 1982 to 1994 and Chief Investment
Officer, First Allmerica 1986 to 1994.
John F. O'Brien Director, Chairman of the Board, President
Director, Chairman of the Board and Chief Executive Officer, First Allmerica
since 1989
Edward J. Parry, III Director and Chief Financial Officer of
Director, Vice President, Chief First Allmerica since 1996; Vice President
Financial Officer, and Treasurer and Treasurer, First Allmerica since 1993
Richard M. Reilly Director of First Allmerica since 1996; Vice
Director, President and President, First Allmerica since 1990;
Chief Executive Officer Director, Allmerica Investments, Inc. since
1990; Director and President, Allmerica
Financial Investment Management Services,
Inc. since 1990
Eric A. Simonsen Director of First Allmerica since 1996; Vice
Director, and Vice President President, First Allmerica since 1990; Chief
Financial Officer, First Allmerica 1990 to
1996
Phillip E. Soule Director of First Allmerica since 1996;
-33-
<PAGE>
Director Vice President, First Allmerica since 1987
</TABLE>
COMPANIES OWNING SECURITIES OF DEPOSITOR
29. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION
WITH RESPECT TO EACH COMPANY WHICH DIRECTLY OR INDIRECTLY OWNS,
CONTROLS OR HOLDS WITH POWER TO VOTE 5% OR MORE OF THE
OUTSTANDING VOTING SECURITIES OF DEPOSITOR.
The Company is a wholly owned subsidiary of First Allmerica,
which in turn is a wholly-owned subsidiary of Allmerica
Financial Corporation. All are located at 440 Lincoln Street,
Worcester, Massachusetts. The Company and Allmerica Financial
Corporation are Delaware corporations. First Allmerica is
organized under the laws of the Commonwealth of Massachusetts.
CONTROLLING PERSONS
30. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION
WITH RESPECT TO ANY PERSON OTHER THAN THOSE COVERED BY ITEMS 28,
29, AND 42 WHO DIRECTLY OR INDIRECTLY CONTROLS THE DEPOSITOR.
None.
COMPENSATION OF OFFICERS OF DEPOSITOR
31. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES PAID BY THE DEPOSITOR DURING THE LAST
FISCAL YEAR COVERED FINANCIAL STATEMENTS FILED HEREWITH;
(a) DIRECTLY TO EACH OF THE OFFICERS OR PARTNERS OF THE
DEPOSITOR DIRECTLY RECEIVING THE THREE HIGHEST AMOUNTS
OF REMUNERATION;
None. All officers of the Company are employees of the
Company's parent, First Allmerica, and receive no
remuneration from the Company.
(b) DIRECTLY TO ALL OFFICERS OR PARTNERS OF THE DEPOSITOR AS
A GROUP EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS
INCLUDED UNDER ITEM 31(a), STATING SEPARATELY THE
AGGREGATE AMOUNT PAID BY THE DEPOSITOR ITSELF AND THE
AGGREGATE AMOUNT PAID BY ALL THE SUBSIDIARIES;
None. All officers of the Company are employees of the
Company's parent, First Allmerica, and receive no
remuneration from the Company. The Company has no
subsidiaries.
(c) INDIRECTLY OR THROUGH SUBSIDIARIES TO EACH OF THE
OFFICERS OR PARTNERS OF THE DEPOSITOR;
None. No remuneration is paid indirectly or through
subsidiaries to the officers or partners of the Company.
COMPENSATION OF DIRECTORS
32. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES, EXCLUSIVE OF
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<PAGE>
REMUNERATION REPORTED UNDER ITEM 31, PAID BY THE DEPOSITOR
DURING THE LAST FISCAL YEAR COVERED BY FINANCIAL STATEMENTS
FILED HEREWITH:
(a) THE AGGREGATE DIRECT REMUNERATION TO DIRECTORS;
None. All directors of the Company are employees of the
Company's parent, First Allmerica, and receive no
remuneration from the Company.
(b) INDIRECTLY OR THROUGH SUBSIDIARIES TO DIRECTORS.
None. Directors of the Company receive no remuneration
indirectly or through subsidiaries of the Company.
COMPENSATION TO EMPLOYEES
33. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
AGGREGATE AMOUNT OF REMUNERATION FOR SERVICES OF ALL
EMPLOYEES OF THE DEPOSITOR (EXCLUSIVE OF PERSONS WHOSE
REMUNERATION IS REPORTED IN ITEMS 31 AND 32) WHO
RECEIVED REMUNERATION IN EXCESS OF $10,000 DURING THE
LAST FISCAL YEAR COVERED BY FINANCIAL STATEMENTS FILED
HEREWITH FROM THE DEPOSITOR AND ANY OF ITS SUBSIDIARIES.
None. The Company has no employees. All corporate
services are provided by employees of First Allmerica,
pursuant to the terms of a Service Agreement betthe
Companyen the Company and First Allmerica.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
REMUNERATION FOR SERVICES PAID DIRECTLY DURING THE LAST
FISCAL YEAR COVERED BY FINANCIAL STATEMENTS FILED
HEREWITH TO THE FOLLOWING CLASSES OF PERSONS (EXCLUSIVE
OF THOSE PERSONS COVERED BY ITEM 33(a)): (1) SALES
MANAGERS, BRANCH MANAGERS, DISTRICT MANAGERS AND OTHER
PERSONS SUPERVISING THE SALE OF REGISTRANT'S SECURITIES;
(2) SALESMEN, SALES AGENTS, CANVASSERS AND OTHER PERSONS
MAKING SOLICITATIONS BUT NOT IN SUPERVISORY CAPACITY;
(3) ADMINISTRATIVE AND CLERICAL EMPLOYEES; AND (4)
OTHERS (SPECIFY). IF A PERSON IS EMPLOYED IN MORE THAN
ONE CAPACITY, CLASSIFY ACCORDING TO PREDOMINANT TYPE OF
WORK.
Not applicable.
COMPENSATION TO OTHER PERSONS
34. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
AGGREGATE AMOUNT OF COMPENSATION FOR SERVICES PAID ANY
PERSON (EXCLUSIVE OF PERSONS WHOSE REMUNERATION IS
REPORTED IN ITEMS 31, 32 AND 33), WHOSE AGGREGATE
COMPENSATION IN CONNECTION WITH SERVICES RENDERED WITH
RESPECT TO THE TRUST IN ALL CAPACITIES EXCEED $10,000
DURING THE LAST FISCAL YEAR COVERED BY FINANCIAL
STATEMENTS FILED HEREWITH FROM THE DEPOSITOR AND ANY OF
ITS SUBSIDIARIES.
Not applicable.
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
DISTRIBUTION OF-SECURITIES
-35-
<PAGE>
35. FURNISH THE NAMES OF THE STATES IN WHICH SALES OF THE TRUST'S
SECURITIES (a) ARE CURRENTLY BEING MADE, (b) ARE PRESENTLY
PROPOSED TO MADE, AND (c) HAVE BEEN DISCONTINUED, INDICATING BY
APPROPRIATE LETTER THE STATUS WITH RESPECT TO EACH STATE.
(a) Sale of the Policies has not commenced in any state.
(b) Following the effectiveness of the Separate Account's
registration statement under the Securities Act of 1933,
and obtaining required approvals under state law, the
Company proposes issuing the Contracts in the District
of Columbia, Virgin Islands, and Puerto Rico and in all
states except New York.
(c) Not Applicable.
36. IF SALES OF THE TRUST'S SECURITIES HAVE AT ANY TIME SINCE
JANUARY 1, 1936 BEEN SUSPENDED FOR MORE THAN A MONTH, DESCRIBE
BRIEFLY THE REASONS FOR SUCH SUSPENSION.
Not Applicable.
37. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
INSTANCE WHERE SUBSEQUENT TO JANUARY 1, 1937, ANY
FEDERAL OR STATE GOVERNMENTAL OFFICER, AGENCY, OR
REGULATORY BODY DENIED AUTHORITY TO DISTRIBUTE
SECURITIES OF THE TRUST, EXCLUDING A DENIAL WHICH WAS
MERELY A PROCEDURAL STEP PRIOR TO ANY DETERMINATION BY
SUCH OFFICER, ETC., AND WHICH DENIAL WAS SUBSEQUENTLY
RESCINDED.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF DENIAL
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR DENIAL
Not Applicable.
(b) FURNISH THE FOLLOWING INFORMATION WITH REGARD TO EACH
INSTANCE WHERE, SUBSEQUENT TO JANUARY 1, 1937, THE
AUTHORITY TO DISTRIBUTE SECURITIES OF THE TRUST HAS BEEN
REVOKED BY ANY FEDERAL OR STATE GOVERNMENTAL OFFICER,
AGENCY OR REGULATORY BODY.
(1) NAME OF OFFICER, AGENCY OR BODY
None.
(2) DATE OF REVOCATION
Not Applicable.
(3) BRIEF STATEMENT OF REASONS GIVEN FOR REVOCATION
-36-
<PAGE>
Not Applicable.
38. (a) FURNISH A GENERAL DESCRIPTION OF THE METHOD OF
DISTRIBUTION OF SECURITIES OF THE TRUST.
Allmerica Investments, Inc., a wholly-owned subsidiary
of the Company, will act as principal underwriter of the
Policies pursuant to an Underwriting and Administrative
Services Agreement with the Company and the Separate
Account. Allmerica Investments, Inc. is a broker-dealer
and a member of the National Association of Securities
Dealers, Inc. The policies will be sold by agents of the
Company who are registered representatives of Allmerica
Investments, Inc. or of other unaffiliated
broker-dealers which have selling agreements with
Allmerica Investments, Inc.
(b) STATE THE SUBSTANCE OF ANY CURRENT SELLING AGREEMENT
BETWEEN EACH PRINCIPAL UNDERWRITER AND THE TRUST OR THE
DEPOSITOR, INCLUDING A STATEMENT AS TO THE INCEPTION AND
TERMINATION DATES OF THE AGREEMENT, ANY RENEWAL AND
TERMINATION PROVISIONS, AND MY ASSIGNMENT PROVISIONS.
The Company and Separate Account will execute an
Underwriting and Administrative Services Agreement
("Agreement") with Allmerica Investments, Inc., its
principal underwriter. Unless otherwise terminated, the
Agreement shall continue in effect from year to year.
The Agreement may be terminated by any party at any time
upon giving 60 days' written notice to the other
parties, and terminates automatically in the event of
its assignment.
(c) STATE THE SUBSTANCE OF ANY CURRENT AGREEMENTS OR
ARRANGEMENTS OF EACH PRINCIPAL UNDERWRITER WITH DEALERS,
AGENTS, SALESMEN, ETC., WITH RESPECT TO COMMISSIONS AND
OVERRIDING COMMISSIONS, TERRITORIES, FRANCHISES,
QUALIFICATIONS, AND REVOCATIONS. IF THE TRUST IS THE
ISSUER OF PERIODIC PAYMENT PLAN CERTIFICATES, FURNISH
SCHEDULES OF COMMISSIONS AND THE BASES THEREOF. IN LIEU
OF A STATEMENT CONCERNING SCHEDULES OF COMMISSIONS, SUCH
SCHEDULES OF COMMISSIONS MAY BE FILED AS EXHIBIT
A(3)(c).
Registered representatives of Allmerica Investments,
Inc. who are also agents of the Company will sell the
Policy. Such agents will be required to pass applicable
NASD examinations, and qualify under applicable state
insurance licensing requirements. Agents who sell the
Policy will receive commissions based on a commission
schedule, and Managers who supervise the agents will
receive overriding commissions. After issue of the
Policy or an increase in face amount, commissions
generally will be 90% of the first-year premiums up to a
maximum target premium amount established by the Company
and 4.00% of any excess. Thereafter, in Years 2-10
commissions will generally equal 4% of any additional
premiums.
INFORMATION CONCERNING PRINCIPAL UNDERWRITER
39. (a) STATE THE FORM OF ORGANIZATION OF EACH PRINCIPAL
UNDERWRITER OF SECURITIES OF THE TRUST, THE NAME OF THE
STATE OR OTHER SOVEREIGN POTHE COMPANYR UNDER THE LAWS
OF WHICH EACH UNDERWRITER WAS ORGANIZED AND THE DATE OF
ORGANIZATION.
The principal underwriter of the policies, Allmerica
Investments, Inc. was incorporated under the laws of the
Commonwealth of Massachusetts on March 27, 1969.
(b) STATE WHETHER ANY PRINCIPAL UNDERWRITER CURRENTLY
DISTRIBUTING SECURITIES OF THE TRUST IS A MEMBER OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD).
-37-
<PAGE>
The Policies will be distributed by Allmerica
Investments, Inc., which is a member of the NASD. The
Company is also registered as a broker-dealer, and is
also a member of the NASD.
40. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ALL
FEES RECEIVED BY EACH PRINCIPAL UNDERWRITER OF THE TRUST
FROM THE SALE OF SECURITIES OF THE TRUST AND ANY OTHER
FUNCTIONS IN CONNECTION THEREWITH EXERCISED BY SUCH
UNDERWRITER IN SUCH CAPACITY OR OTHERWISE DURING THE
PERIOD COVERED BY THE FINANCIAL STATEMENT FILED
HEREWITH.
None.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY
FEE OR ANY PARTICIPATION IN FEES RECEIVED BY EACH
PRINCIPAL UNDERWRITER FROM ANY UNDERLYING INVESTMENT
COMPANY OR ANY AFFILIATED PERSON OR INVESTMENT ADVISER
OF SUCH COMPANY:
None.
(1) THE NATURE OF SUCH FEE OR PARTICIPATION.
None.
(2) THE NAME OF THE PERSON MAKING PAYMENT.
None.
(3) THE NATURE OF THE SERVICES RENDERED IN
CONSIDERATION FOR SUCH FEE OR PARTICIPATION.
None.
(4) THE AGGREGATE AMOUNT RECEIVED DURING THE LAST
FISCAL YEAR COVERED BY THE FINANCIAL STATEMENTS
FILED HEREWITH.
None.
41. (a) DESCRIBE THE GENERAL CHARACTER OF THE BUSINESS PRINCIPAL
UNDERWRITER, INCLUDING A STATEMENT AS TO ANY BUSINESS
OTHER THAN THE DISTRIBUTION OF SECURITIES OF THE TRUST.
IF A PRINCIPAL UNDERWRITER ACTS OR HAS ACTED IN ANY
CAPACITY WITH RESPECT TO ANY INVESTMENT COMPANY OR
COMPANIES OTHER THAN THE TRUST, STATE THE NAME OR NAMES
OF SUCH COMPANY OR COMPANIES, THEIR RELATIONSHIP, IF
ANY, TO THE TRUST AND THE NATURE OF SUCH ACTIVITIES. IF
A PRINCIPAL UNDERWRITER HAS CEASED TO ACT IN SUCH NAMED
CAPACITY, STATE THE DATE OF AND CIRCUMSTANCES
SURROUNDING SUCH CESSATION.
Allmerica Investments, Inc. is a registered
broker-dealer and a member of the NASD. Allmerica
Investments, Inc. is a retail broker-dealer of variable
contracts (including life and annuities) issued by the
Company and of affiliated and unaffiliated mutual funds.
Allmerica Investments, Inc. acts as principal
underwriter of variable annuity and variable life
contracts issued by Separate Accounts of the Company and
of First Allmerica, which are registered as unit
investment trusts under the 1940 Act in connection with
the issuance of variable annuity and variable life
contracts. Allmerica Investments also acts as principal
underwriter of AIT, which is a management investment
company under the 1940 Act. The variable contracts
issued by the Company are sold through registered
-38-
<PAGE>
representatives of Allmerica Investments, Inc. (or of
broker-dealers which have selling agreements with
Allmerica Investments, Inc.), who are also licensed as
insurance agents of the Company.
(b) FURNISH AS AT LATEST PRACTICABLE DATE THE ADDRESS OF
EACH BRANCH OFFICE OF EACH PRINCIPAL UNDERWRITER
CURRENTLY SELLING SECURITIES OF THE TRUST AND FURNISH
THE NAME AND RESIDENCE ADDRESS OF THE PERSON IN CHARGE
OF SUCH OFFICE.
Not Applicable. The Separate Account is not yet issuing
securities.
(c) FURNISH THE NUMBER OF INDIVIDUAL SALESMEN OF EACH
PRINCIPAL UNDERWRITER THROUGH WHOM ANY OF THE SECURITIES
OF THE TRUST WERE DISTRIBUTED FOR THE LAST FISCAL YEAR
OF THE TRUST COVERED BY THE FINANCIAL STATEMENTS FILED
HEREWITH AND FURNISH THE AGGREGATE AMOUNT OF
COMPENSATION RECEIVED BY SUCH SALESMEN IN SUCH YEAR.
Not Applicable. The Policies have not yet been issued.
42. FURNISH AS AT LATEST PRACTICABLE DATE THE FOLLOWING INFORMATION
WITH RESPECT TO EACH PRINCIPAL UNDERWRITER CURRENTLY
DISTRIBUTING SECURITIES OF THE TRUST AND WITH RESPECT TO EACH OF
THE OFFICERS, DIRECTORS OR PARTNERS OF SUCH UNDERWRITER
(OWNERSHIP OF SECURITIES OF THE TRUST).
Not Applicable. The Policies have not yet been issued.
43. FURNISH, FOR THE LAST FISCAL YEAR COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH, THE AMOUNT OF BROKERAGE COMMISSIONS
RECEIVED BY ANY PRINCIPAL UNDERWRITER WHO IS A MEMBER OF A
NATIONAL SECURITIES EXCHANGE AND WHO IS CURRENTLY DISTRIBUTING
THE SECURITIES OF THE TRUST OR EFFECTING TRANSACTIONS FOR THE
TRUST IN THE PORTFOLIO SECURITIES OF THE TRUST.
Not Applicable.
OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST
44. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
METHOD OF VALUATION USED BY THE TRUST FOR THE PURPOSES
OF DETERMINING THE OFFERING PRICE TO THE PUBLIC OF
SECURITIES ISSUED THE TRUST OR THE VALUATION OF SHARES
OR INTERESTS IN THE UNDERLYING SECURITIES ACQUIRED BY
THE HOLDER OF A PERIODIC PAYMENT PLAN CERTIFICATE.
The net premium equals the premium paid less the 6.35%
payment expense charge. Each net premium is allocated to
the General Account of the Company or to the
Sub-Account(s) selected by the Policy owner. Allocations
to the Sub-Accounts are credited to the Policy in the
form of Accumulation Units. Accumulation Units are
credited separately for each Sub-Account. The number of
Accumulation Units of each Sub-Account credited to the
Policy is equal to the portion of the net premium
allocated to the Sub-Account, divided by the dollar
value of the applicable Accumulation Unit as of the
valuation date the payment is received at the Company's
Principal Office. The number of Accumulation Units
resulting from each net premium will remain fixed unless
changed by a subsequent split of Accumulation Unit
value, transfer, partial withdrawal or surrender. In
addition, if the Company deducts the Monthly Deduction
or other charges from a Sub-Account (as a result of
Policy owner instructions or the pro rata allocation of
charges if the Policy owner has given no instruction),
each such deduction will result in cancellation of a
number of Accumulation Units equal in value to the
charge allocated to the Sub-Account. The dollar
-39-
<PAGE>
value of an Accumulation Unit of each Sub-Account varies
from valuation date to valuation date based on the
investment experience of that Sub-Account. That
experience, in turn, will reflect the investment
performance, expenses and charges of the respective
underlying Funds. The value of an Accumulation Unit is
set at $1.00 on the first Valuation Date of each
Sub-Account.
NET INVESTMENT FACTOR - The net investment factor
measures the investment performance of a Sub-Account of
the Separate Account during the valuation period just
ended. The net investment factor for each Sub-Account is
equal to 1.0000 plus the number arrived at by dividing
(a) by (b) and subtracting (c) and (d) from the result,
where
(a) is the investment income of that Sub-Account for
the valuation period, plus capital gains,
realized or unrealized, credited during the
valuation period; minus capital losses, realized
or unrealized, charged during the valuation
period; adjusted for provisions made for taxes,
if any;
(b) is the value of that Sub-Account's assets at the
beginning of the valuation period;
The net investment factor may be greater or less than
one. Therefore, the value of an Accumulation Unit may
increase or decrease. The Policy owner bears the
investment risk.
Allocations to the General Account are not converted
into Accumulation Units, but are credited interest at a
rate periodically set by the Company.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF
THE OFFERING PRICE OF THE TRUST'S SECURITIES AS OF THE
LATEST PRACTICABLE DATE.
No Policies have been issued or offered for sale to the
public.
(c) IF THERE IS ANY VARIATION IN OFFERING PRICE OF THE
TRUST'S SECURITIES TO ANY PERSON OR CLASSES OF PERSONS
OTHER THAN UNDERWRITERS, STATE THE NATURE AND AMOUNT OF
SUCH VARIATION AND INDICATE THE PERSON OR CLASSES OF
PERSONS TO WHOM SUCH OFFERING IS MADE.
At any time, the "price" of an Accumulation Unit of a
Sub-Account will be the same for all Policy owners.
However, the cost of insurance charges for the Policies
will not be the same for all Policy owners. The
insurance principles of pooling and distribution of
mortality risks is based upon the assumption that each
Policy owner pays a cost of insurance charge
commensurate with the Insured's mortality risk, which is
actuarially determined based upon factors such as age,
sex, health and occupation. In the context of life
insurance, a uniform mortality charge (the "cost of
insurance charge") for all Insureds would discriminate
unfairly in favor of those Insureds representing greater
mortality risks to the disadvantage of those
representing lesser risks. Accordingly, there will be a
different "price" for each actuarial category of Policy
owners because different cost of insurance rates will
apply. The "price" will also vary based on net amount at
risk. The Policies will be offered and sold pursuant to
this cost of insurance schedule, the Company's
underwriting standards, and in accordance with state
insurance laws. Such laws prohibit unfair discrimination
among Insureds, but recognize that premiums must be
based upon factors such as age, health and occupation.
Tables showing the maximum cost of insurance charges
will be delivered as part of the Policy.
-40-
<PAGE>
45. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO ANY SUSPENSION
OF THE REDEMPTION RIGHTS OF THE SECURITIES ISSUED BY THE TRUST
DURING THE THREE FISCAL YEARS COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH:
Not Applicable.
(a) BY WHOSE ACTION REDEMPTION RIGHTS THE COMPANYRE
SUSPENDED.
Not Applicable.
(b) THE NUMBER OF DAYS' WRITTEN NOTICE GIVEN TO SECURITY
HOLDERS PRIOR TO SUSPENSION OF REDEMPTION RIGHTS.
Not Applicable.
(c) REASON FOR SUSPENSION.
Not Applicable.
(d) PERIOD DURING WHICH SUSPENSION WAS IN EFFECT.
Not Applicable.
46. (a) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO THE
METHOD OF DETERMINING THE REDEMPTION OR WITHDRAWAL
VALUATION OF SECURITIES ISSUED BY THE TRUST:
(1) THE SOURCE OF QUOTATIONS USED TO DETERMINE THE
VALUE OF PORTFOLIO SECURITIES.
The Sub-Accounts invest only in shares of the
Underlying Funds. Shares of each are sold and
redeemed at their net asset value as next
computed after receipt of the purchase or
redemption order. Each purchase or redemption is
confirmed in a written statement of the number
of shares purchased or redeemed and the
aggregate number of shares currently held by the
respective-Sub-Accounts. See Item 44(a).
(2) WHETHER OPENING, CLOSING, BID, ASKED OR ANY
OTHER PRICE IS USED.
See 44(a) and 46(a)(1), above.
(3) WHETHER PRICE IS AS OF THE DAY OF SALE OR AS OF
ANY OTHER TIME.
See 44(a) and 46(a)(1), above.
(4) A BRIEF DESCRIPTION OF THE METHODS USED BY
REGISTRANT FOR DETERMINING OTHER ASSETS AND
LIABILITIES INCLUDING ACCRUAL FOR EXPENSES AND
TAXES (INCLUDING TAXES ON UNREALIZED
APPRECIATION).
POLICY VALUE AND SURRENDER VALUE - The Policy
value is the total amount available for
investment and is equal to the sum of the
accumulation in the General Account and the
value of the Accumulation Units in the
Sub-Accounts. The Policy value is used in
determining the surrender value (the Policy
value less any Debt and applicable
-41-
<PAGE>
surrender charges). There is no guaranteed
minimum Policy value. Because Policy value on
any date depends upon a number of variables, it
cannot be predetermined. Policy value and
surrender value will reflect frequency and
amount of net premiums paid, interest credited
to accumulations in the General Account, the
investment performance of the chosen
Sub-Accounts of the Separate Account, any
partial withdrawals, any loans, any loan
repayments, any loan interest paid or credited,
and any charges assessed in connection with the
Policy.
CALCULATION OF POLICY VALUE - The Policy value
is determined first on the date of issue and
thereafter on each valuation date. On the date
of issue, the Policy value will be the net
premiums received, plus any interest earned
during the period when premiums are held in the
General Account (before being transferred to the
Separate Account) less any Monthly Deductions
due. On each valuation date after the date of
issue the Policy value will be:
(a) the aggregate of the values in each of
the Sub-Accounts on the valuation date,
determined for each Sub-Account by
multiplying the value of an Accumulation
Unit in that Sub-Account on that date by
the number of such Accumulations Units
allocated to the Policy; PLUS
(b) the value in the General Account
(including any amounts transferred to
the General Account with respect to a
loan).
Thus, the Policy value is determined by
multiplying the number of Accumulation Units in
each Sub-Account by the value of the applicable
Accumulation Units on the particular valuation
date, adding the products, and adding the amount
of the accumulations in the General Account, if
any. Also see Item 44(a), above.
Because of its current tax status, the Company
does not expect to incur any federal income tax
liabilities that would be charged to the
Separate Account, and the company does not
intend to make a charge for federal income
taxes. The Company may, however, incur state and
local taxes (in addition to premium taxes) in
several states. At present, these taxes are not
significant. If there is a material change in
state or local tax laws, charges for such taxes,
if any, attributable to the Separate Account may
be made.
(5) OTHER ITEMS WHICH REGISTRANT DEDUCTS FROM THE
NET ASSET VALUE IN COMPUTING REDEMPTION VALUE OF
ITS SECURITIES.
Accumulation Units of the Sub-Accounts will be
redeemed at net asset value. However, under the
Policies, a surrender or partial redemption may
be subject to Surrender charges. See 13(a),
"SURRENDER CHARGES" and "PARTIAL WITHDRAWAL"
(6) WHETHER ADJUSTMENTS ARE MADE FOR FRACTIONS.
No adjustments are made for fractions.
(b) FURNISH A SPECIMEN SCHEDULE SHOWING THE COMPONENTS OF
THE REDEMPTION PRICE TO THE HOLDERS OF THE TRUST'S
SECURITIES AS OF THE LATEST PRACTICABLE DATE.
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<PAGE>
No policies have been issued or offered for sale to the
public.
PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO
SECURITY HOLDERS
47. FURNISH A STATEMENT AS TO THE PROCEDURE WITH RESPECT TO THE
MAINTENANCE OF A POSITION IN THE UNDERLYING SECURITIES OR
INTERESTS IN THE UNDERLYING SECURITIES, THE EXTENT AND NATURE
THEREOF AND THE PERSON WHO MAINTAINS SUCH A POSITION. INCLUDE A
DESCRIPTION OF THE PROCEDURE WITH RESPECT TO THE PURCHASE OF
UNDERLYING SECURITIES OR INTERESTS IN THE UNDERLYING SECURITIES
FROM SECURITY HOLDERS WHO EXERCISE REDEMPTION OR WITHDRAWAL
RIGHTS AND THE SALE OF SUCH UNDERLYING SECURITIES AND INTERESTS
IN THE UNDERLYING SECURITIES TO OTHER SECURITY HOLDERS. STATE
WHETHER THE METHOD OF VALUATION OF SUCH UNDERLYING SECURITIES OR
INTERESTS IN UNDERLYING SECURITIES DIFFERS FROM THAT SET FORTH
IN ITEMS 44 AND 46. IF ANY ITEM OF EXPENDITURE INCLUDED IN THE
DETERMINATION OF THE VALUATION IS NOT OR MAY NOT ACTUALLY BE
INCURRED OR EXPENDED, EXPLAIN THE NATURE OF SUCH ITEM AND WHO
MAY BENEFIT FROM THE TRANSACTION.
All purchases and redemptions of shares of the Underlying Funds
are at net asset value. Other Separate Accounts of the Company
currently invest in shares of AIT, and AIT issues shares to
Separate Accounts of Allmerica Financial and may issue shares to
Separate Accounts of other unaffiliated insurance companies.
Fidelity VIP and T. Rowe Company Price may issue shares to
unaffiliated insurance companies. All transactions are at net
asset value. The Company will redeem sufficient shares of the
Underlying Funds to pay certain life insurance proceeds,
benefits at maturity, or surrender proceeds, or for other
purposes contemplated by the Policy.
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. FURNISH THE FOLLOWING INFORMATION AS TO EACH TRUSTEE OR
CUSTODIAN OF THE TRUST.
(a) NAME AND PRINCIPAL ADDRESS:
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
(b) FORM OF ORGANIZATION:
Stock life insurance company.
(c) STATE OR OTHER SOVEREIGN POWER UNDER THE LAWS OF WHICH
THE TRUSTEE OR CUSTODIAN WAS ORGANIZED.
Incorporated under the laws of Delaware.
(d) NAME OF GOVERNMENTAL SUPERVISING OR EXAMINING AUTHORITY.
Delaware Insurance Department. The Company is also
subject to examination by the insurance departments of
each state in which it does business.
49. STATE THE BASIS FOR PAYMENT OF FEES OR EXPENSES OF THE TRUSTEE
OR CUSTODIAN FOR SERVICES RENDERED WITH RESPECT TO THE TRUST AND
ITS SECURITIES, AND THE AMOUNT THEREOF FOR THE LAST FISCAL YEAR.
INDICATE THE PERSON PAYING SUCH FEES OR EXPENSES. IF ANY FEES OR
EXPENSES ARE PREPAID, STATE THE UNEARNED AMOUNTS.
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The Company is not paid a Separate fee for expenses or services
rendered as custodian of the Separate Account.
The contingent surrender charge (See 13(a)) includes a component
for administrative services, which may be deemed to include
custodial services.
50. STATE WHETHER THE TRUSTEE OR CUSTODIAN OR ANY OTHER PERSON HAS
OR MAY CREATE A LIEN ON THE ASSETS OF THE TRUST, AND, IF SO,
GIVE FULL PARTICULARS, OUTLINING THE SUBSTANCE OF THE PROVISIONS
OF ANY INDENTURE OR AGREEMENT WITH RESPECT THERETO.
None. Under Delaware law, the assets supporting Policy reserves
in the Separate Account may not be charged with any liabilities
arising out of any other business of the Company.
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO INSURANCE OF
HOLDERS OF SECURITIES:
Interests in the Separate Account are sold only to fund the
Policies. Other than the Policies themselves, no insurance is
sold to Policy owners with interests in the Sub-Accounts, in
connection with such interests.
(a) THE NAME AND ADDRESS OF THE INSURANCE COMPANY.
Allmerica Financial Life Insurance and Annuity Company
440 Lincoln Street
Worcester, MA 01653
(b) THE TYPES OF POLICIES AND WHETHER INDIVIDUAL OR GROUP
POLICIES.
The Policies are individual or group flexible premium
variable life insurance policies.
(c) THE TYPES OF RISKS INSURED AND EXCLUDED.
The Policies are offered either on a group basis or as
individual policies, to individuals and businesses in
connection with employer-sponsored insurance.
Participation in a group contract will be accounted for
by the issuance of a certificate describing the
individual's interest under the group contract.
Individual policies may be issued in circumstances where
a group contract is not issued. The terms of a
certificate and an individual policy, whether or not the
individual policy is issued under a group contract, are
substantially the same .
(d) THE COVERAGE OF THE POLICIES.
The Policies provide insurance coverage on the life of
the Insured. The minimum Death Benefit is stated in each
Policy. Death Proceeds will be reduced by any
outstanding Policy Debt and any due and unpaid monthly
deductions.
(e) THE BENEFICIARIES OF SUCH POLICIES AND THE USES TO WHICH
THE PROCEEDS OF POLICIES MUST BE PUT.
The beneficiary is named by the Policy owner to receive
the death proceeds. The interest of any beneficiary will
be subject to any assignment made by the Policy owner.
The Policy
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owner may declare a beneficiary to be revocable (changed
any time by written request) or irrevocable (may be
changed only with the written consent of the
beneficiary). The interest of a beneficiary who dies
before the Insured will pass to surviving beneficiaries.
If all beneficiaries die before the Insured, the death
proceeds will pass to the Policy owner.
(f) THE TERMS AND MANNER OF CANCELLATION AND OF
REINSTATEMENT.
See Item 17(a) for the manner of cancellation and
reinstatement.
(g) THE METHOD OF DETERMINING THE AMOUNT OF PREMIUMS TO BE
PAID BY HOLDERS OF SECURITIES.
See answers to Item 13(a) for amount of charges imposed
and 44(a) and 44(c) for the manner in which the premium
is determined.
(h) THE AMOUNT OF AGGREGATE PREMIUMS PAID TO THE INSURANCE
COMPANY DURING THE LAST FISCAL YEAR.
The Company has not yet begun issuing the Policies.
(i) WHETHER ANY PERSON OTHER THAN THE INSURANCE COMPANY
RECEIVES ANY PART OF SUCH PREMIUMS, THE NAME OF EACH
SUCH PERSON AND THE AMOUNTS INVOLVED, AND THE NATURE OF
THE SERVICES RENDERED THEREFOR.
No person other than the Company receives any part of
the amounts deducted for assumption of mortality and
expense risks. However, the Company may from time to
time enter into reinsurance agreements with other
insurance companies under which certain insurance risks,
premium income and related expenses are assumed by such
other insurance companies.
(j) THE SUBSTANCE OF ANY OTHER MATERIAL PROVISIONS OF ANY
INDENTURE OR AGREEMENT OF THE TRUST RELATING TO
INSURANCE.
None.
VII. POLICY OF REGISTRANT
52. (a) FURNISH THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT WITH RESPECT TO THE CONDITIONS UPON WHICH
AND THE METHOD OF SELECTION BY WHICH PARTICULAR
PORTFOLIO SECURITIES MUST OR MAY BE ELIMINATED FROM THE
ASSETS OF THE TRUST OR MUST OR MAY BE REPLACED BY OTHER
PORTFOLIO SECURITIES. IF AN INVESTMENT ADVISER OR OTHER
PERSON IS TO BE EMPLOYED IN CONNECTION WITH SUCH
SELECTION, ELIMINATION OR SUBSTITUTION, STATE THE NAME
OF SUCH PERSON, THE NATURE OF ANY AFFILIATION TO THE
DEPOSITOR, TRUSTEE OR CUSTODIAN, AND ANY PRINCIPAL
UNDERWRITER, AND THE AMOUNT OF REMUNERATION TO BE
RECEIVED FOR SUCH SERVICES. IF ANY PARTICULAR PERSON IS
NOT DESIGNATED IN THE INDENTURE OR AGREEMENT, DESCRIBE
BRIEFLY THE METHOD OF SELECTION OF SUCH PERSON.
The investment Policy of each Sub-Account of the
Separate Account is to invest in a particular Underlying
Fund.
The Company reserves the right, subject to applicable
law, to make additions to, deletions
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from, or substitutions for the shares that are held in
the Sub-Accounts of the Separate Account or that the
Sub-Accounts of the Separate Account may purchase. If
the shares of an Underlying Fund are no longer available
for investment or if in the Company's judgment further
investment in any Underlying Fund should become
inappropriate in view of the purposes of the Separate
Account or the affected Sub-Account, the Company may
redeem the shares of that Underlying Fund and substitute
shares of another registered open-end management
company. The Company will not substitute any shares
attributable to a Policy interest in a Sub-Account
without notice and prior approval of the SEC and state
insurance authorities, to the extent required by the
1940 Act or other applicable law.
The Company also reserves the right to establish
additional Sub-Accounts of the Separate Account, each of
which would invest in shares corresponding to a new
Underlying Fund or in shares of another investment
company having a specified investment objective. Subject
to applicable law and any required SEC approval, the
Company may, in its sole discretion, establish new
Sub-Accounts or eliminate one or more Sub-Accounts if
marketing needs, tax considerations or investment
conditions warrant. Any new Sub-Accounts may be deemed
available to existing Policy owners on a basis to be
determined by the Company. If the Company deems it to be
in the best interest of Policy owners, and subject to
any approvals that may be required under applicable law,
the Variable Account or Sub-Account may be operated as a
management company under the 1940 Act, may be
deregistered if registration is no longer required, or
may be combined with other Separate Accounts of the
company.
If any of these substitutions or changes are made, the
Company way by appropriate endorsement change the Policy
to reflect the substitution or change.
(b) FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO EACH
TRANSACTION INVOLVING THE ELIMINATION OF ANY UNDERLYING
SECURITY DURING THE PERIOD COVERED BY THE FINANCIAL
STATEMENTS FILED HEREWITH.
Not Applicable.
(c) DESCRIBE THE POLICY OF THE TRUST WITH RESPECT TO THE
SUBSTITUTION AND ELIMINATION OF THE UNDERLYING
SECURITIES OF THE TRUST WITH RESPECT TO:
(1) THE GROUNDS FOR ELIMINATION AND SUBSTITUTION;
See 52(a), above.
(2) THE TYPE OF SECURITIES WHICH MAY BE SUBSTITUTED
FOR ANY UNDERLYING SECURITY;
See 52(a), above.
(3) WHETHER THE ACQUISITION OF SUCH SUBSTITUTED
SECURITY OR SECURITIES WOULD CONSTITUTE THE
CONCENTRATION OF INVESTMENT IN A PARTICULAR
INDUSTRY OR GROUP OF INDUSTRIES OR WOULD CONFORM
TO A POLICY OF CONCENTRATION OF INVESTMENT IN A
PARTICULAR; INDUSTRY OR GROUP OF INDUSTRIES;
Not Applicable.
(4) WHETHER SUCH SUBSTITUTED SECURITIES MAY BE THE
SECURITIES OF ANY OTHER INVESTMENT COMPANY; AND
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See 52(a), above.
(5) THE SUBSTANCE OF THE PROVISIONS OF ANY INDENTURE
OR AGREEMENT WHICH AUTHORIZE OR RESTRICT THE
POLICY OF THE REGISTRANT IN THIS REGARD. See
52(a) above.
(d) FURNISH A DESCRIPTION OF ANY (EXCLUSIVE OF POLICIES
COVERED BY PARAGRAPH (a) AND (b) HEREIN) OF THE TRUST
WHICH IS DEEMED A MATTER OF FUNDAMENTAL POLICY AND WHICH
IS ELECTED TO BE TREATED AS SUCH.
None.
REGULATED INVESTMENT COMPANY
53. (a) STATE THE TAXABLE STATUS OF THE TRUST.
Because of its current tax status, the Company does not
expect to incur any federal income tax liabilities that
would be charged to the Separate Account, and the
Company does not intend to make a charge for federal
income taxes. The Company may, however, incur state and
local taxes (in addition to premium taxes) in several
states. At present, these taxes are not significant. If
there is a material change in state or local tax laws,
charges for such taxes, if any, attributable to the
Separate Account may be made.
See also 46(a), above.
(b) STATE WHETHER THE TRUST QUALIFIED FOR THE LAST TAXABLE
AS A REGULATED INVESTMENT COMPANY AS DEFINED IN SECTION
851 OF THE INTERNAL REVENUE CODE OF 1954, AND STATE ITS
PRESENT INTENTION WITH RESPECT TO SUCH QUALIFICATION
DURING THE CURRENT TAXABLE YEAR.
Not Applicable.
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. IF THE TRUST IS NOT THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH THE FOLLOWING INFORMATION WITH RESPECT TO
EACH CLASS OR SERIES OF ITS SECURITIES.
Not Applicable.
55. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, A TRANSCRIPT OF A HYPOTHETICAL ACCOUNT SHALL BE
FILED IN APPROXIMATELY THE FOLLOWING FORM ON THE BASIS OF THE
CERTIFICATE CALLING FOR THE SMALLEST AMOUNT OF PAYMENTS. THE
SCHEDULE SHALL COVER A CERTIFICATE OF THE TYPE CURRENTLY BEING
SOLD ASSUMING THAT SUCH CERTIFICATE HAD BEEN SOLD AT A DATE
APPROXIMATELY TEN YEARS PRIOR TO THE DATE OF REGISTRATION OR TO
THE APPROXIMATE DATE OF ORGANIZATION OF THE TRUST.
Not Applicable.
56. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH BY YEARS FOR THE PERIOD COVERED BY THE
FINANCIAL STATEMENTS FILED HEREWITH IN RESPECT OF CERTIFICATES
SOLD DURING SUCH PERIOD, THE FOLLOWING INFORMATION FOR EACH
FULLY PAID TYPE AND EACH INSTALLMENT PAYMENT TYPE OF PERIODIC
PAYMENT PLAN CERTIFICATE CURRENTLY BEING ISSUED BY THE TRUST.
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Not Applicable.
57. IF THE TRUST IS THE ISSUER OF PERIODIC PAYMENT PLAN
CERTIFICATES, FURNISH BY YEARS FOR THE PERIOD COVERED BY
FINANCIAL STATEMENTS FILED HEREWITH THE FOLLOWING INFORMATION
FOR EACH INSTALLMENT PAYMENT TYPE OF PERIODIC PAYMENT PLAN
CERTIFICATE CURRENTLY BEING ISSUED BY THE TRUST.
Not Applicable.
58. IF THE TRUST IS THE ISSUER OF PERIODIC PLAN CERTIFICATES FURNISH
THE FOLLOWING INFORMATION FOR EACH INSTALLMENT PERIODIC PAYMENT
PLAN CERTIFICATE OUTSTANDING AS AT THE LATEST PRACTICABLE DATE.
Not Applicable.
59. FINANCIAL STATEMENTS:
FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT
Financial statements, if any, will be contained in the
registration statement for the Policy on Form S-6 filed under
the Securities Act of 1933. They are incorporated herein by
reference.
FINANCIAL STATEMENTS OF THE DEPOSITOR
The Financial Statements of the Company will be contained in the
registration statement on Form S-6 filed by the Registrant
pursuant the Securities Act of 1933. They are incorporated
herein by reference.
IX. EXHIBITS
A. Furnish the most recent form of the following:
(1) Certified Copy of vote of Board of Directors of the Company
dated June 13, 1996, authorizing the establishment of the
Separate Account, is filed herewith.
(2) Not Applicable.
(3) (a) Underwriting and Administrative Services Agreement
between the Company and Allmerica Investments, Inc. was
previously filed on April 16, 1998 in Post-Effective
Amendment No.12 (Registration Statement No. 33-57792),
and is incorporated by reference herein.
(b) Registered Representatives/Agents Agreement was
previously filed on April 16, 1998 in Post-Effective
Amendment No.12 (Registration Statement No. 33-57792),
and is incorporated by reference herein.
(c) Sales Agreements (Select) were previously filed on April
16, 1998 in Post-Effective Amendment No.12 (Registration
Statement No. 33-57792), and are incorporated by
reference herein.
(d) Commission Schedule was previously filed on April 16,
1998 in Post-Effective Amendment No.12 (Registration
Statement No. 33-57792), and is incorporated by
reference herein.
(e) General Agent's Agreement was previously filed on April
16, 1998 in Post-Effective Amendment No.12 (Registration
Statement No. 33-57792), and is incorporated by
reference herein.
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(f) Career Agent Agreement was previously filed on April 16,
1998 in Post-Effective Amendment No.12 (Registration
Statement No. 33-57792), and is incorporated by
reference herein.
(4) Form of Policy has been filed with the Separate Account's
initial registration statement on Form S-6 under the Securities
Act of 1933, and is incorporated by reference herein.
(5) Form of Policy riders have been filed with the Separate
Account's initial registration statement on Form S-6 under the
Securities Act of 1933, and is incorporated by reference herein.
(6) Articles of Incorporation and Bylaws, as amended, of the Company
were previously filed on September 29, 1995 in Post-Effective
Amendment No. 5 (Registration Statement No. 33-5772), and are
incorporated by reference herein.
(7) Not applicable.
(8) (a) Participation Agreement with Allmerica Investment Trust
was previously filed on April 16, 1998 in Post-Effective
Amendment No.12 (Registration Statement No. 33-57792),
and is incorporated by reference herein.
(b) Participation Agreement with Variable Insurance Products
Fund, as amended, was previously filed on April 16, 1998
in Post-Effective Amendment No. 12 (Registration
Statement No. 33-57792), and is incorporated by
reference herein.
(c) Participation Agreement with T. Rowe Price International
Series, Inc. was previously filed on April 16, 1998 in
Post-Effective Amendment No. 12 (Registration Statement
No. 33-57792), and is incorporated by reference herein.
(d) Fidelity Service Agreement, effective as of November 1,
1995, was previously filed on April 30, 1996 in
Post-Effective Amendment No. 6 (Registration Statement
No. 33-57792), and is incorporated by reference herein.
(e) An Amendment to the Fidelity Service Agreement,
effective as of January 1, 1997, was previously filed on
May 1, 1997 in Post-Effective Amendment No. 9
(Registration Statement No. 33-57792), and is
incorporated by reference herein.
(f) Fidelity Service Contract, effective as of January 1,
1997, was previously filed on May 1, 1997 in
Post-Effective Amendment No. 9 (Registration Statement
No. 33-57792), and is incorporated by reference herein.
(g) Service Agreement with T. Rowe-Price Fleming
International, Inc. was previously filed on April 16,
1998 in Post-Effective Amendment No.12 (Registration
Statement No. 33-57792), and is incorporated by
reference herein.
(9) BFDS Agreements for lockbox and mailroom services were
previously filed on April 16, 1998 in Post-Effective Amendment
No.5, and are incorporated by reference herein.
(10) Form of Application is filed herein.
(11) None.
B. (1) None.
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(2) None.
C. None.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, Allmerica
Financial Life Insurance and Annuity Company, the depositor of the Registrant,
has caused this registration statement to be duly signed on behalf of the
Registrant in the City of Worcester and Commonwealth of Massachusetts on the 6th
day of August, 1999.
SEPARATE ACCOUNT IMO
OF ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
(Name of Registrant)
BY: ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
------------------------------------------------------
(Name of Depositor)
By: /s/ Sheila B. St. Hilaire
-------------------------------
Sheila B. St. Hilaire.
Assistant Vice President and Counsel
Attest: /s/ Mary M. Eldridge
---------------------------
Mary Eldridge
SECRETARY
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