<PAGE>
SEC File No. 33-
SEC File No. 811-2047
As filed with the Securities and Exchange Commission
on February , 1996
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11 [X]
(Check appropriate box or boxes)
MBL VARIABLE CONTRACT ACCOUNT-2
(Previously known as Mutual Benefit Variable Contract Account-2)
(Exact name of Registrant)
MBL LIFE ASSURANCE CORPORATION
Successor to The Mutual Benefit Life Insurance Company
(Name of Depositor)
520 Broad Street
Newark, New Jersey 07102-3111
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (201) 481-8000
Judith C. Keilp, Esq.
Counsel
MBL Life Assurance Corporation
520 Broad Street
Newark, New Jersey 07102-3111
(Name and Address of Agent for Service)
_________________________________________________________________
Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of the Registration Statement under the
Securities Act of 1933.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, an
indefinite amount of securities is being registered by this Registration
Statement. The filing fee of $500 required by Rule 24f-2 is paid
herewith.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
previously known as
MUTUAL BENEFIT VARIABLE CONTRACT ACCOUNT-2
________________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Prospectus of
information required by the Items in Part A of Form N-4.
Item Number Heading in Prospectus
1 Cover Page
2 Index of Terms
3 Summary of Group Variable Annuity Contracts
4 Performance Related Information,
Accumulation Unit Values
5 The Account, The Fund
6 Charges and Expenses
7 Accumulation Account;
General Rights; Other Contract Provisions
8 Annuity
9 Accumulation Accounts - Death
Benefit
10 Accumulation Accounts
11 Accumulation Account - Redemption
12 Federal Income Tax Status
13 Legal Developments
14 Table of Contents -
Statement of Additional Information
____________________________________________________________
* Indicates inapplicable or negative.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
MBL Life Assurance Corporation
520 Broad Street, Newark, New Jersey 07102-3111
, 1996
The group variable annuity contracts (the "Contracts") described in
this Prospectus were issued by The Mutual Benefit Life Insurance Company
("Mutual Benefit Life") and assumptively reinsured by MBL Life Assurance
Corporation ("MBL Life") to provide for retirement payments and other
benefits for persons covered ("Participants") under plans qualified for
federal income tax advantages ("Qualified Plans") under Section 401,
403(b), 408 or 457 of the Internal Revenue Code of 1986, as amended (the
"Code"). Contracts were issued to employers or associations which
established Qualified Plans or to trustees or custodians serving in
conjunction with such Plans ("Contract Holders"). The Contracts provide
benefits for Participants covered under those Plans and their
beneficiaries. In most cases, a Group Fixed Annuity Companion Contract
(the "Companion Contract"), which is not described in this Prospectus, was
also issued to the Contract Holder.
Sales of new Contracts ceased July 16, 1991. MBL Life does not
intend to resume sales of new Contracts. As of the effective date of this
Prospectus, however, additional purchase payments are being accepted from
existing and new Participants under the Contracts.
Under the Contracts, purchase payments will be accumulated before
retirement ("Accumulation Period"), and annuity payments can be received
after retirement ("Annuity Period"), on a variable basis. Variable
accumulations and variable annuity payments are funded through MBL
Variable Contract Account-2 (the "Account"), which is a "separate account"
of MBL Life. The Account invests in shares of MBL Growth Fund, Inc. (the
"Fund"), a mutual fund with the primary investment objective of long-term
appreciation of capital.
Existing Contracts, issued by Mutual Benefit Life, were assumed and
reinsured as of May 1, 1994 by MBL Life, in accordance with the
Rehabilitation Plan of Mutual Benefit Life as approved by the Superior
Court of New Jersey. Substantially all of the assets and certain
liabilities, including all insurance liabilities, of Mutual Benefit Life
were transferred to MBL Life as of May 1, 1994 (the "Transfer"). In
addition, the assets and liabilities of the Account were transferred to a
new separate account of MBL Life. MBL Life agreed to assume all the
assets and liabilities of the Account. (See "The Account - Legal
Developments".)
This Prospectus sets forth concisely the information about the
Account that Contract Holders and Participants should know before
investing. Additional information about the Account has been filed with
the Securities and Exchange Commission (the "SEC") including a Statement
of Additional Information which is incorporated herein by reference. The
Statement of Additional Information is available upon request and without
charge from MBL Life. Write to: Group Pension Operations, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-3111,
Attn: MBL VARIABLE CONTRACT ACCOUNT-2, or telephone: 1-800-435-3191.
Contract Holder or Participant inquiries may be made to the same address
or telephone number. The table of contents for the Statement of
Additional Information appears on page 27.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS IS
VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS OF MBL GROWTH FUND,
INC.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
The date of the Statement of Additional Information
is , 1996.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF GROUP VARIABLE ANNUITY CONTRACTS
Fee Table . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Eligible Contract Holders . . . . . . . . . . . . . . . . . . . 5
Basic Provisions. . . . . . . . . . . . . . . . . . . . . . . . 5
Variable Accumulation Account . . . . . . . . . . . . . . . . . 5
Variable Annuity . . . . . . . . . . . . . . . . . . . . . . . 6
Assumption of Risks . . . . . . . . . . . . . . . . . . . . . . 6
Redemption and Death Benefit. . . . . . . . . . . . . . . . . . 6
ACCUMULATION UNIT VALUES. . . . . . . . . . . . . . . . . . . . 7
FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . 7
PERFORMANCE RELATED INFORMATION . . . . . . . . . . . . . . . . 7
THE ACCOUNT
Organization. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Legal Developments . . . . . . . . . . . . . . . . . . . . . . 8
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Administration and Distribution . . . . . . . . . . . . . . . .10
THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CHARGES AND EXPENSES
Premium Tax . . . . . . . . . . . . . . . . . . . . . . . . . 11
Charges for Expense Risk, Mortality Risk and
Minimum Death Benefit . . . . . . . . . . . . . . . . . . . 11
Investment Advisory Fee . . . . . . . . . . . . . . . . . . . 12
Other Charges . . . . . . . . . . . . . . . . . . . . . . . . .12
ACCUMULATION ACCOUNT
Purchase Payments . . . . . . . . . . . . . . . . . . . . . . .12
Variable Accumulation Account . . . . . . . . . . . . . . . . .12
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . .15
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . .16
ANNUITY
Annuity Commencement Date . . . . . . . . . . . . . . . . . . .16
Purchase of Annuity . . . . . . . . . . . . . . . . . . . . . .17
Forms of Annuity. . . . . . . . . . . . . . . . . . . . . . . .17
Annuity Payments. . . . . . . . . . . . . . . . . . . . . . . .18
Variable Annuity Unit Value . . . . . . . . . . . . . . . . . .18
GENERAL RIGHTS
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . .19
Confirmation of Transactions. . . . . . . . . . . . . . . . . .20
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . .20
457 Plan Participant. . . . . . . . . . . . . . . . . . . . . .20
FEDERAL INCOME TAX STATUS
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . .20
Taxation of MBL Life. . . . . . . . . . . . . . . . . . . . . .21
Tax Status of the Contract. . . . . . . . . . . . . . . . . . .21
Retirement Plans. . . . . . . . . . . . . . . . . . . . . . . .22
Taxation of Distribution. . . . . . . . . . . . . . . . . . . .24
Withholding . . . . . . . . . . . . . . . . . . . . . . . . . .25
Possible Changes in Taxation. . . . . . . . . . . . . . . . . .25
Other Tax Consequences . . . . . . . . . . . . . . . . . . . .25
OTHER CONTRACT PROVISIONS
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . .25
Non-Assignability . . . . . . . . . . . . . . . . . . . . . . .25
Portability . . . . . . . . . . . . . . . . . . . . . . . . . .25
Failure of Plan to Qualify. . . . . . . . . . . . . . . . . . .26
Discontinuance. . . . . . . . . . . . . . . . . . . . . . . . .26
Transfer to New Funding Agency. . . . . . . . . . . . . . . . .26
Changes in Contract . . . . . . . . . . . . . . . . . . . . . .27
Other Changes . . . . . . . . . . . . . . . . . . . . . . . . .27
TABLE OF CONTENTS - STATEMENT OF ADDITIONAL INFORMATION . . . .28
INDEX OF TERMS
The following terms are explained on the pages indicated.
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Accumulation Period . . . . . . . . . . . . . . . . . . . . . . 1
Annuity Commencement Date . . . . . . . . . . . . . . . . . . .16
Annuity Period. . . . . . . . . . . . . . . . . . . . . . . . . 1
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . .25
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Companion Contract. . . . . . . . . . . . . . . . . . . . . . . 1
Contract Holder . . . . . . . . . . . . . . . . . . . . . . . . 1
IRA Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5, 23
First Priority. . . . . . . . . . . . . . . . . . . . . . . . 10
401 Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5, 22
403(b) Plan . . . . . . . . . . . . . . . . . . . . . . . . 5, 23
457 Plan . . . . . . . . . . . . . . . . . . . . . . . . . 5, 23
MBL Life . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mutual Benefit Life . . . . . . . . . . . . . . . . . . . . . . 1
Net Purchase Payment. . . . . . . . . . . . . . . . . . . . . . 5
1940 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Participant . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Qualified Plan. . . . . . . . . . . . . . . . . . . . . . . . . 1
Rehabilitation Plan . . . . . . . . . . . . . . . . . . . . . . 1
SEC . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Valuation Date. . . . . . . . . . . . . . . . . . . . . . . . .13
Variable Accumulation Account . . . . . . . . . . . . . . . . . 5
Variable Accumulation Unit. . . . . . . . . . . . . . . . . . .12
Variable Annuity. . . . . . . . . . . . . . . . . . . . . . . . 6
Variable Annuity Unit . . . . . . . . . . . . . . . . . . . . .18
SUMMARY OF GROUP VARIABLE ANNUITY CONTRACTS
Fee Table
The purpose of the Fee Table is to help Contract Holders and
Participants (see "Basic Provisions") understand the various Account and
Fund expenses which they will bear, directly or indirectly. The Fee
Table, including the Example below, shows the expenses that are deducted
from both the Account and the Fund. For a description of the Account's
expenses, see "Charges and Expenses". For a description of the Fund's
expenses, see "Management" in the Fund Prospectus.
Account Annual Expenses
(as a percentage of average daily Account value)
Expense Risk Charge 0.25%
Mortality Risk and Death Benefit Charge 0.12%
Total Account Annual Expenses 0.37%
Fund Annual Expenses
(as a percentage of Fund's daily average net assets)
Management Fees 0.37%
Other Expenses 0.49%
Total Fund Expenses * 0.86%
Example
A $1,000 investment in the Account would be subject to the expenses
indicated, assuming (1) a 5.0% annual return and (2) redemption at the end
of each time period shown; **
1 year 3 years 5 years 10 years
$13 $39 $68 $149
This example should not be considered a representation of past or
future expenses for the Account.
Actual expenses may be greater or less than those shown above.
Similarly, the annual rate of return assumed in the Example is not an
estimate or guarantee of future investment performance.
The expenses listed above do not include premium taxes, currently
charged by various states of up to 3.5%, which will be deducted and paid
to the states as required. (See "Charges and Expenses - Premium Tax".)
_____________________________________
* The Fund's investment adviser has agreed to assume all operating
expenses of the Fund which, on an annual basis, exceed 1.5% of the
first $30 million of the Fund's average daily net asset value and
which exceed 1% of any amount in excess of $30 million. The
operating expenses of the Fund did not exceed these limits during the
1995 fiscal year; therefore, the amount of expenses incurred has not
been affected.
** There are no charges imposed upon redemption.
Eligible Contract Holders
The Contracts described in this Prospectus are designed to provide
variable benefits for the following Qualified Plans:
1. employees covered under annuity purchase arrangements adopted
pursuant to Section 403(b) of the Code by public school systems and
non-profit organizations described in Section 501(c)(3) of the Code
("403(b) Plans"), including former employees who have been covered under
other such annuity purchase arrangements and have not withdrawn their
account balances;
2. employees covered under plans maintained by corporations,
partnerships and sole proprietorships which are qualified under Section
401 of the Code ("401 Plans");
3. employees covered under deferred compensation plans qualified
under Section 457 of the Code ("457 Plans");
4. employees covered under individual retirement account plans
qualified under Section 408 of the Code ("IRA Plans" or "408 Plans").
The Code affords certain federal income tax advantages to employers,
employees and beneficiaries covered under these plans. (See "Federal
Income Tax Status".)
Basic Provisions
Net Purchase Payments made for or by Participants are invested during
the Accumulation Period before retirement. "Net Purchase Payment" means
the amount of a purchase payment for a Participant, less any premium tax.
At retirement, the current value of the accumulation may be used to buy
annuities designed to provide Participants with monthly payments for life
or shorter specified periods, during the Annuity Period following
retirement.
The Companion Contract, which is not described in this Prospectus,
was issued to the Contract Holder in conjunction with each Contract
issued. The charges and benefits under the Companion Contract are
included in the terms of that contract, which is separate from the
Contracts described in this Prospectus.
New Participants, who enroll after the effective date of this
Prospectus, participating in plans qualified under Section 408 of the Code
and, for residents of New York, plans qualified under Section 403(b), are
entitled to a return of their initial premium payments without cost within
ten days of purchase under a ten-day revocation provision.
Variable Accumulation Account. Under the Contract, Net Purchase Payments
and/or permitted transfers from the Companion Contract and/or MBL Variable
Contract Account-7 ("VCA-7") are allocated to an Account established on
behalf of a Participant ("Variable Accumulation Account"). (See
"Transfers".) Amounts allocated to a Variable Accumulation Account are
placed in the Account. The assets of the Account are invested in shares
of the Fund, a mutual fund with the primary investment objective of
long-term appreciation of capital. The value of a Participant's Variable
Accumulation Account varies up or down from day to day, depending on the
value of the securities owned by the Fund, and no assurance of investment
results is made.
Variable Annuity. The funds used to buy a variable annuity remain in the
Account. Since the Account invests in shares of the Fund, the dollar
amount of variable annuity payments varies up and down from month to
month, depending on the value of the securities owned by the Fund, and no
assurance of investment results is made.
Assumption of Risks
MBL Life assumes the expense and mortality risks under the Contracts.
In doing so, it agrees (1) to pay all expenses during the life of the
Contracts, even if the charges made under the Contracts do not cover the
actual expenses incurred, (2) to continue making life annuity payments
under the Contracts, even if Annuitants, as a class, live longer than
actuarially assumed, and, (3) to pay the minimum death benefit due. (See
"Accumulation Account - Death Benefit".) A charge is imposed on the
Account for MBL Life's assumption of these risks. (See "Charges and
Expenses - Risk and Death Benefit Charges".)
Redemption and Death Benefit
Subject to any Qualified Plan restriction, the current value of a
Participant's Variable Accumulation Account may be withdrawn, in whole or
in part, at any time before the annuity payments begin (the "Annuity
Commencement Date") under a Contract. (See "Accumulation Account -
Redemption".) A penalty and/ or tax may be incurred under the Code upon
withdrawal of amounts accumulated under the Contracts offered by this
Prospectus, including a 10% penalty generally imposed on the taxable
amount of withdrawals prior to age 59 1/2 (subject to certain exceptions).
(See "Federal Income Tax Status".)
If a Participant dies before retirement, his or her beneficiary
receives the greater of either (1) the current value of the Participant's
Variable Accumulation Account as of the date MBL Life receives due proof
of death, or (2) the full amount of all purchase payments less all
transfers and redemptions made for the Participant.
ACCUMULATION UNIT VALUES
The Accumulation Unit values as of the beginning of the period and
the end of the period for each of the last ten fiscal years, as well as
the total number of Accumulation Units outstanding at the end of each
fiscal year, are as follows:
<TABLE>
<CAPTION>
Accumulation Accumulation Number of
Unit Value- Unit Units
Beginning Value-End Outstanding
Year Ending of Period of Period End of Period
<S> <C> <C> <C>
December 31, 1995 $86.596 $116.231 307,509
December 31, 1994 85.055 86.596 328,954
December 31, 1993 75.010 85.055 354,251
December 31, 1992 65.668 75.010 379,590
December 31, 1991 53.234 65.668 494,857
December 31, 1990 56.416 53.234 1,014,455
December 31, 1989 44.032 56.416 909,129
December 31, 1988 34.625 44.032 810,345
December 31, 1987 35.483 34.625 794,267
December 31, 1986 29.344 35.483 717,772
December 31, 1985 22.813 29.344 767,545
</TABLE>
FINANCIAL STATEMENTS
The financial statements for the Account (as well as the auditor's
report thereon) may be found in the Account's 1995 Annual Report to
Contract Holders and Participants. The Account will furnish without
charge an additional copy of these Reports upon request made to Group
Pension Operations, MBL Life Assurance Corporation, 520 Broad Street,
Newark, New Jersey 07102-3111, Attn: MBL VARIABLE CONTRACT ACCOUNT-2, or
by telephoning 1-800-435-3191.
The financial statements of MBL Life may be found in the Statement of
Additional Information.
PERFORMANCE RELATED INFORMATION
The Account may from time to time advertise "average annual total
return". Average annual total return measures the change in the value of
an investment in the Account's Variable Accumulation Units over the
periods illustrated. (See "Variable Accumulation Account".) This
performance-related information is based upon the Account's past
performance. The investment return and principal value on an investment
in the Account's units will fluctuate so that the units, when redeemed,
may be worth more or less than their original cost.
When the Account advertises its average annual total return, it will
be calculated for one year, five years and ten years and will assume a
total redemption at the end of each period. Average annual total return
is calculated by comparing the value of a hypothetical $1,000 investment
in the Account at the beginning of the relevant period to the value of the
investment at the end of the period assuming a redemption of all Variable
Accumulation Units (see "Variable Accumulation Account") at the end of the
period. (See the Account's Statement of Additional Information,
"Calculation of Performance Data".) There are no nonrecurring charges to
be deducted upon a redemption of all units.
Average annual total return at the Account level includes all
recurring Contract charges currently applicable. As of the date of this
Prospectus, the only Contract charge currently applicable is 1) a charge
of 0.37%, of which 0.25% is allocated for MBL Life's assumption of expense
risks and 0.12% is allocated for its assumption of mortality risks and the
provisions of the minimum death benefit (see "Charges and Expenses -
Charges for Expense Risk, Mortality Risk and Minimum Death Benefit", and
"Accumulation Account - Death Benefit"). The one-time Participant
enrollment fee (up to $15.00) and annual administration charge (up to
$10.00 and up to $0.50 per purchase payment and transfer, or 2.00% of
accumulation accounts, if less) which were deducted until December 31,
1988, and which were eliminated as of January 1, 1989, are included in the
average annual total return figures illustrated. The total return
figures, as illustrated, do not take into account any sales charge which
would have been deducted from the purchase payment, if made prior to
January 1, 1989. The inclusion of the sales charge in the total figures
would have reduced the average annual total return illustrated for each
period.
The Account may from time to time advertise a comparison of its
average annual total return to the Standard and Poor's 500 Stock Index
(S&P 500) which represents an unmanaged, weighted index of 500 industrial,
transportation, utility and financial companies widely regarded by
investors as representative of the stock market. As a benchmark, this
index is not subject to any charges for investment advisory or other
expenses of the type charged at either the Account or the Fund level.
Therefore, the comparison shown in any advertising by the Account, with
this benchmark, may be of limited use.
To calculate the average annual total return, the value of a Variable
Accumulation Account terminated on December 29, 1995 is divided by the
$1,000 purchase payment made by a Participant at the beginning of each
period illustrated. The result of that calculation is the total growth
rate for that period. The total growth rate is then "annualized" to
obtain the average annual percentage increase (decrease) during the period
illustrated. An annualized rate assumes that a single rate of return,
applied each year during the period illustrated, will produce the ending
value, taking into account the effect of compounding.
THE ACCOUNT
Organization
The Account is registered with the SEC as an investment company, in
the form of a "unit investment trust", under the Investment Company Act of
1940 (the "1940 Act"). Registration under the 1940 Act involves
regulation by the SEC, but does not involve supervision or management of
investment practices or policies of either the Account or the Registrant.
The Account was established in 1969 under New Jersey law pursuant to a
resolution of the Board of Directors of Mutual Benefit Life. The assets
and liabilities of the Account were transferred to a separate account of
MBL Life as of May 1, 1994 pursuant to a resolution of the Board of
Directors of MBL Life.
MBL Life is a New Jersey stock life insurance company, incorporated
in 1972, with its principal office at 520 Broad Street, Newark, New
Jersey. Its stock is held in a Stock Trust, pursuant to the
Rehabilitation Plan of Mutual Benefit Life, MBL Life's former parent.
Legal Developments
The Account was originally a separate account of Mutual Benefit Life.
On July 16, 1991, the Superior Court of New Jersey ("Court") entered an
Order ("Order") appointing the Insurance Commissioner of the State of New
Jersey as Rehabilitator of Mutual Benefit Life, thereby granting the
Rehabilitator immediate exclusive possession and control of, and title to,
the business and assets of Mutual Benefit Life, including those of the
Account.
In view of the terms and conditions of the Order, on July 16, 1991,
Mutual Benefit Life, on behalf of the Account, immediately ceased
acceptance of applications for new Contracts and additional purchase
payments under existing Contracts. The cessation of additional purchase
payments continued from July 16, 1991 until the effective date of this
Prospectus. Because the Account was a separate account of Mutual Benefit
Life, the assets and liabilities of the Account were maintained separate
and apart from Mutual Benefit Life's general account assets and
liabilities. Transfers to the VCA-7 Contract were temporarily suspended.
Transfers from the Account to the Companion Contract were temporarily
prohibited and withdrawals from the Companion Contract were restricted
during the Rehabilitation Period. Death benefit payments upon the death
of each Participant continued to be made to the beneficiaries.
A Rehabilitation Plan was developed the Rehabilitator, the terms of
which were subsequently approved and confirmed by the Court in January
1994. Certain terms and conditions of the Rehabilitation Plan have been
appealed by parties to the Rehabilitation Plan, and litigation brought
against Mutual Benefit Life, the ultimate resolution of which cannot be
determined at this time.
The Rehabilitation Plan stipulated that the assets and liabilities of
the Account would be transferred from Mutual Benefit Life to a separate
account of MBL Life. The transfer was effected pursuant to an assumption
reinsurance transaction on May 1, 1994. Under the Rehabilitation Plan,
MBL Life assumed substantially all of the business, assets and liabilities
of Mutual Benefit Life. MBL Life will operate under and is governed by
the terms and conditions of the Rehabilitation Plan until the termination
of the Rehabilitation Period, not later than December 31, 1999. While the
Rehabilitation Plan was developed based on the Rehabilitator's best
estimates, no assurance can be provided that the Rehabilitation Plan will
ultimately be successful. For more information, see the financial
statements of MBL Life contained in the Statement of Additional
Information.
As of May 1, 1994, all of the issued and outstanding shares of MBL
Life were placed in a Stock Trust which is to terminate at the end of the
Rehabilitation Period. The Commissioner of Insurance was appointed
Trustee of the Stock Trust. On July 5, 1995, Alan J. Bowers was appointed
President and Chief Executive Officer of MBL Life.
MBL Life reserves all rights regarding the use of its name, or any
part of its name, including the right to withdraw its use by the Account
or to grant its use to any other investment company or entity.
Assets
The assets placed in the Account include (1) amounts allocated to
provide Variable Accumulation Accounts or variable annuities under the
Contracts and (2) advances made by MBL Life for support of its obligations
under the Contracts.
While the Account is an asset of MBL Life, it is held separately from
all other assets of MBL Life. The Contracts provide that any income,
gains or losses, whether or not realized, from assets allocated to the
Account, in accordance with the Contract, are credited to or charged
against the Account without regard to any other income, gains or losses of
MBL Life. The assets of the Account may not be charged with liabilities
arising out of any other business of MBL Life. The Contracts also provide
that MBL Life shall maintain the assets of the Account in an amount at
least equal to the amount required for MBL Life to meet its obligations
under the Contracts, as determined at least once each year. MBL Life will
transfer cash from its general account to make up any deficiency in the
Account and, conversely, may transfer any excess assets in cash from the
Account to its general account or hold any such excess in the Account.
Advances made to the Account by Mutual Benefit Life prior to December
31, 1989 in connection with the operation of the Account were not subject
to deductions for the enrollment fee, the sales charge and the
administrative charge then in effect. To the extent that the 1940 Act
requires MBL Life to hold voting rights with respect to such amounts, MBL
Life, as a matter of policy, will cast its votes on each matter in the
same proportion as those cast by Contract Holders.
Administration and Distribution
The Account has no directors, officers, or employees. First Priority
Investment Corporation ("First Priority") serves as the Account's
principal underwriter. First Priority is a wholly-owned indirect
subsidiary of MBL Life. First Priority also serves as principal
underwriter for MBL Variable Contract Account-3, and MBL Variable Contract
Account-7, which are other separate accounts of MBL Life, and as
distributor for mutual funds sponsored by MBL Life. First Priority also
engages in the sale of other investment company securities and other
financial products. Administrative services necessary for the operation
of the Account and the Contracts are provided by MBL Life. These
administrative services include, but are not limited to, processing
purchase payments, annuity payments, redemptions and transfers; making
commission payments; furnishing confirmation notices and periodic reports;
preparing prospectuses, voting materials and tax reports; and providing or
arranging for accounting, actuarial and legal services.
THE FUND
The primary objective of the Account is to provide annuity payments
which are designed to guard against adverse changes in the cost of living
both during the Accumulation Period and during the Annuity Period. In
seeking to achieve this objective, the assets of the Account are invested
in shares of the Fund, a mutual fund investing primarily in common stocks
and other equity type investments. Information about the Fund, including
its investment objectives and policies, is set out in the Fund prospectus
which should be read together with this Prospectus. The investor should
read the Fund's prospectus carefully before investing. Copies of the
Fund's Prospectus and Statement of Additional Information are available
upon request and without charge from MBL Life. Write to: Corporate
Benefits Administration, MBL Life Assurance Corporation, 520 Broad Street,
Newark, New Jersey 07102-3111, Attn: MBL Variable Contract Account-2, or
telephone: 1-800-435-3191.
The Fund's investment adviser is Markston Investment Management
("Markston"), a partnership between Markston International, Inc. and MBL
Sales Corporation ("MBL Sales"). MBL Sales is a wholly-owned indirect
subsidiary of MBL Life.
Historically, the value of a sizeable and representative group of
common stocks, held for an extended period of time, has tended to rise,
particularly during periods of rising costs. However, there has been no
exact correlation, and for some periods, the value of common stocks has
fallen, while the cost of living was rising. Accordingly, no assurance
can be given that the Account will achieve its objective.
The Account buys Fund shares with no sales load. Any dividend or
capital gains distribution received from the Fund is ordinarily credited
in the form of additional Fund shares. To the extent necessary to make
payments promised under the Contracts, the Account redeems Fund shares at
net asset value with no redemption fee.
CHARGES AND EXPENSES
Premium Tax
Premium taxes, ranging up to 3.50%, are currently levied by various
states. If premium taxes are incurred by an Account, a charge for the
amount of these taxes will be made when the taxes are incurred.
Charges for Expense Risk, Mortality Risk and Minimum Death Benefit
A charge at the annual rate of 0.37% is made daily against each
Participant's Variable Accumulation Account and against each Annuitant's
variable annuity. The allocation of the charge during the Accumulation
Period is 0.25% for MBL Life's assumption of expense risks and 0.12% for
its assumption of mortality risks and the provision of the minimum death
benefit. After the commencement of annuity payments, all of this 0.37% is
for mortality risks. MBL Life reserves the right to alter the allocation
of the charge between these items, based on its experience in
administering the Contracts.
If these charges are less than the expenses assumed, MBL Life may
suffer a loss. However, if the charges are more than the expenses assumed
by MBL Life, then there will be a contribution to MBL Life's surplus,
which may be used for any legitimate corporate purpose, including
distribution of the Contracts.
Investment Advisory Fee
For the investment advisory services of Markston, the Fund pays a
periodic fee based on a percentage of net assets. The fee is reflected in
the net asset value computation for the Fund, computed and accrued daily
and paid quarterly.
The investment advisory compensation arrangement as well as the
expenses of the Fund are fully described in the Fund's prospectus and the
Fund's Statement of Additional Information.
Other Charges
Currently, no charges are made against the Account for MBL Life's
federal income taxes, or provisions for such taxes, that may be
attributable to the Account. MBL Life may charge the Account for its
portion of any income tax charged to MBL Life on the Account or its
assets. Under present laws, MBL Life may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are
not significant. If they increase, however, MBL Life may decide to make
charges for such taxes, or provisions for such taxes, against the Account.
Any charges made against the Account could have an adverse effect on the
investment experience of the Account.
ACCUMULATION ACCOUNT
Purchase Payments
Initial Net Purchase Payments are invested at the value next
computed, not later than two business days, after an application in good
order and payment has been received by MBL Life at its Home Office in
Newark, New Jersey (the "Home Office").
The Contracts offer flexible purchase payment arrangements which may
be tailored for individual plans as follows:
Frequency. Purchase payments may be made for active Participants
whenever desired, except not more frequently than every two weeks.
Amount. Under 403(b), 408, and 457 Plans, the annuity purchase
agreement or salary reduction agreement, respectively, between each
Participant and his or her employer must specify that contributions on the
Participant's behalf will be at least $240 during each year under the
Plan.
Continuity. Purchase payments for a Participant may be discontinued
at any time, without any effect on the Participant's rights under the
Contract. Purchase payments may be resumed at a later date at no
additional charge.
Variable Accumulation Account
Net Purchase Payments are allocated to a Participant's Variable
Accumulation Account and transfers from VCA-7 are applied to purchase
Variable Accumulation Units. Each Variable Accumulation Unit represents a
proportionate interest in the assets of the Account. The investment
performance of the Fund and deduction of charges and expenses (see
"Charges and Expenses") affect the value of the Variable Accumulation
Units as described below.
The number of Variable Accumulation Units purchased is equal to each
Net Purchase Payment, divided by the current dollar value of a Variable
Accumulation Unit, after the initial purchase payment, at the value next
computed after receipt of each purchase payment.
The value of a Variable Accumulation Unit was $10 for January 21,
1971, the day when sales of the Contracts commenced. For a list of the
Variable Accumulation Unit values on the last Valuation Date of each
quarter for each of the last ten fiscal years, see the Account's Statement
of Additional Information. For a list of the Variable Accumulation Unit
values on the last Valuation Date of each of the last ten fiscal years,
see "Accumulation Unit Values".
The Variable Accumulation Unit is calculated as of the end of each
Valuation Date, which is a day when the New York Stock Exchange is open
for trading. For any Valuation Date, the Variable Accumulation Unit value
is equal to the value for the preceding Valuation Date multiplied by the
Net Investment Factor for the current Valuation Date. For any day which
is not a Valuation Date, the Variable Accumulation Unit value is equal to
the value for the following Valuation Date. The Variable Accumulation
Unit value may vary either up or down on each Valuation Date.
The Net Investment Factor for any Valuation Date is equal to the
Gross Investment Factor less a deduction at an effective annual rate of
0.37% for the expense and mortality risk and death benefit charges. The
Gross Investment Factor as of a Valuation Date is equal to (1) the net
asset value of a Fund share computed as of the close of regular trading on
the New York Stock Exchange on that date, plus the per share amount of any
dividends and other distributions made by the Fund since the preceding
Valuation Date, less a deduction for any applicable taxes (at present, no
such federal tax is payable), divided by (2) the net asset value of a Fund
share computed as of such close on the preceding Valuation Date. For a
hypothetical example illustrating the computation of the Variable
Accumulation Unit value and the Net Investment Factor, see the Account's
Statement of Additional Information. In effect, each Net Purchase Payment
(after the first) is invested in Variable Accumulation Units at the value
next computed after receipt of such payment by MBL Life at its Home
Office. Thereafter, Variable Accumulation Units credited under a Contract
will vary up or down in value, depending on the value of the Fund shares
held by the Account.
Transfers
Transfers between the Companion Contract and the Variable
Accumulation Account will be subject to the transfer provisions contained
in the Companion Contract, including any limitations or restrictions
contained in that contract. Transfers may be made only on a Valuation
Date as defined in this Prospectus. All transfers will be based on the
Variable Accumulation Unit value calculated on the effective date of the
transfer.
MBL Life reserves the right to impose restrictions upon the transfer
privilege at any time, upon 30 days written notice to each Contract Holder
affected. In such event, transfers will be permitted only once a quarter.
This restriction may only be applied to Contracts to the extent that (1)
the expected total annual deposit by a Contract Holder on behalf of all
Participants to both the Variable Accumulation Account and the Companion
Contract and VCA-7 Contract, if any, is $3 million or more, or (2) there
are existing plan assets under the Contracts representing purchase
payments made by the employer, association or corporation sponsoring the
plan, other than as a result of a Participant salary reduction
arrangement, or (3) the plan sponsor controls the allocation of
contributions among this VCA-2 Contract, the Companion Contract, and the
VCA-7 Contract, or (4) the plan sponsor controls transfers among the VCA-2
Contracts, the Companion Contract and the VCA-7 Contract before imposing
such a restriction. MBL Life will submit appropriate changes to the
Contract to the state insurance commissions for approval.
To the extent that a VCA-2 Contract Holder also holds a contract for
VCA-7, the Contract Holder may provide Qualified Plan Participants the
opportunity to provide for retirement and other benefits through pooled
investments in short-term debt instruments. The objective of VCA-7 is to
provide as high a level of current income as is consistent with
preservation of capital and maintenance of liquidity.
If a VCA-7 Contract was issued, amounts may be transferred between a
Qualified Plan Participant's Variable Accumulation Account under the VCA-2
Contract to the VCA-7 Contract as described under "Transfers" except that
transfers to the VCA-7 Contract may not exceed once a quarter. Transfers
to the VCA-7 Contract are subject to the charges, limitations and
restrictions contained in the VCA-7 Contract. Amounts transferred to a
VCA-2 Contract from a VCA-7 Contract will be subject to charges imposed
under those contracts.
Until the termination of the Rehabilitation Period, no later than
December 31, 1999, transfers from the Variable Accumulation Account under
the VCA-2 Contract to the Companion Contract may only be made upon
retirement. (See "The Account - Legal Developments".)
Variable Accumulation Account values will also be transferred to the
Companion Contract upon the death of a Participant (see "Accumulation
Account - Death Benefit"), or if a Qualified Plan fails to qualify under
the Code (see "Other Contract Provisions - Failure of Plan to Qualify").
MBL Life reserves the right to impose restrictions upon the transfer
privilege at any time, upon 30 days written notice to each Contract Holder
affected, as described under "Transfers".
A VCA-7 prospectus is available upon request made to Group Pension
Operations, MBL Life Assurance Corporation, 520 Broad Street, Newark, New
Jersey 07102-3111, Attn: MBL VARIABLE CONTRACT ACCOUNT-7 or by telephoning
1-800-435-3191.
Redemption
The current value of a Participant's Variable Accumulation Account
may be withdrawn or transferred to another tax qualified investment, in
whole or in part, at any time before his or her Annuity Commencement Date
under the Contract. However, under 401, 403(b) or 457 Plans, the
withdrawal right may be restricted in accordance with applicable federal
income tax law. (See "Federal Income Tax Status".)
Certain plans may require forfeiture of non-vested employer
contributions, such as upon termination of employment, and may also
provide that certain contributions may not be withdrawn until the
occurrence of a specified event, such as attainment of age 59 1/2. The
terms of your plan should be reviewed to determine if contributions on
your behalf are so restricted. Any partial redemption must amount to at
least $240.
Redemption is effected by canceling a sufficient portion of the
Variable Accumulation Account to pay the amount requested. The number of
units canceled in the Variable Accumulation Account is based on their
value next computed after receipt of a written request by MBL Life at its
Home Office. Requests may be made on forms provided to Contract Holders
by MBL Life, or by letter. Forms may be obtained by calling 1-800-435-
3191.
A request for partial redemption of a Participant's Variable
Accumulation Account is treated as a request for complete redemption if
the total value of the account would otherwise be less than $240, or if
the redemption request is for an amount which exceeds the value of the
account. After complete redemption of a Participant's Variable
Accumulation Account, no further purchase payments may be made for the
Participant without the consent of MBL Life.
Payment of the amount redeemed is made within seven days after
receipt of request, unless (1) the New York Stock Exchange is closed (for
reasons other than holidays and weekends), or trading on the New York
Stock Exchange is restricted, (2) an emergency exists, as determined by
the SEC, so that valuation of the assets of the Account, or redemption of
the Fund shares held by the Account, is not reasonably practicable, or
(3) the SEC permits postponement by order.
The withdrawal of funds from the Account may adversely affect tax
benefits otherwise available under the Code. (See "Federal Income Tax
Status".) Under 403(b) Plans, current restrictions imposed by the Code
limit withdrawals. (See "Federal Income Tax Status - 403(b) Plans".)
The preceding discussion of redemption applies only to the Variable
Accumulation Account. Redemption of amounts under the Companion Contract
will be subject to the redemption provisions contained in the Companion
Contract, including any limitations or charges specified in that contract.
Death Benefit
If a Participant dies before the Annuity Commencement Date, MBL Life
will cancel the Participant's Variable Accumulation Account and transfer
the value of such account, or, if greater, the full amount of all purchase
payments less transfers and redemptions made for the Participant, as of
the date MBL Life receives satisfactory written notice of death, to the
Companion Contract where the proceeds will be held at the interest rate
specified in the Companion Contract until final disposition. (See "The
Account - Legal Development".) No sales charges will be imposed on the
transfer of the Variable Accumulation Account to the Companion Contract.
In lieu of transferring the Participant's Variable Accumulation Account to
the Companion Contract, MBL Life may pay all of such account value to the
beneficiary in a single sum, if the beneficiary has made a written request
for such payment. The Contracts require the beneficiary to make the
written request within 90 days of the Participant's death. If the
beneficiary is a spouse, the Variable Accumulation Account may be
continued at the spouse's election; however, no further purchase payments
may be made.
In general, the rights of beneficiaries are subject to the same
conditions as corresponding rights of Participants. In addition, the
rights of a beneficiary may be subject to restrictions imposed by the
Participant in designating his or her beneficiary.
ANNUITY
Annuity Commencement Date
A Participant's Variable Accumulation Account Value generally must
begin to be distributed in accordance with Code Section 403(b)(10) no
later than April 1 of the calendar year following the calendar year in
which the Participant reaches age 70 1/2. A surviving spouse who has made
the election in Section 4.3(c) of the Contract must begin to receive the
Variable Accumulation Account Value no later than April 1 of the calendar
year following the calendar year in which the Participant would have
reached age 70 1/2.
Where the Participant is a public school employee, the above required
distribution date may, generally, be extended to the April 1 of the
calendar year following the later of (1) the calendar year in which the
Participant reaches age 70 1/2, or (2) retires from such employment.
Distributions will be made in accordance with the terms of the Contract.
The preceding distribution requirement does not apply to tax-deferred
annuity account balances accrued before January 1, 1987.
A Participant may elect to apply all or part of his or her Account
Value as consideration for the purchase of an annuity ("Annuity
Consideration"). The date on which such annuity is to begin, as elected
by the Participant, shall be specified in a written notice to MBL Life,
provided however, that such date may not be earlier than 15 days after the
date of receipt by MBL Life of such notice.
Purchase of Annuity
Effective on a Participant's Annuity Commencement Date, as specified
in the written notice to MBL Life, the Participant's Annuity Consideration
shall be applied to provide an annuity for the Participant subject to the
following:
(a) Any premium tax on Annuity Consideration that MBL Life is
required to pay, based on the state of residence of the
Participant, will be deducted from the Annuity Consideration.
(b) The amount remaining after deduction of the premium tax will be
applied to provide an annuity. Unless the use of another table
of amounts of annuity shall have been agreed to in writing by
the Contract Holder and MBL Life, the amount of each monthly
payment of the annuity will be determined by dividing the
remaining Annuity Consideration by the appropriate rate
determined in accordance with the Variable Annuity Table (Table
1 of the Contract) according to the form of annuity and the age
of the annuitant on the Annuity Commencement Date.
If a Participant's first annuity payment would be less than $20, the
value of the Variable Accumulation Account may be paid to the Participant
in a lump sum as a complete redemption, at the discretion of MBL Life.
MBL Life will issue a certificate to each Annuitant at the time the
first annuity payment becomes payable, describing the Participant's rights
under the annuity. Once any life annuity takes effect, it may not be
redeemed or changed to any other form of annuity.
Forms of Annuity
The Participant may elect one of the alternate forms listed below:
(a) Period-Certain and Life Annuity
The Period-Certain and Life Option provides a monthly annuity to
the Participant during the Participant's lifetime, the first 60,
120, 180 or 240 payments of which, as specified by the
Participant in the notice of election of this option, shall be
period-certain payments. If at the death of the Participant any
period-certain payments remain unpaid, such unpaid period-
certain payments shall be continued to the Participant's
beneficiary.
(b) Contingent Annuitant With Ten Years Certain
The Contingent Annuitant Option provides a monthly annuity
payable to the Participant during his or her lifetime, and
payable after his or her death to the Contingent Annuitant
designated by the Participant at the time of election of this
option, during such Contingent Annuitant's lifetime. The first
120 payments are designated as period-certain payments.
If at the death of the second to die of the Participant and his
or her Contingent Annuitant any period-certain payments remain
unpaid, such unpaid period-certain payments shall be continued
to the Participant's beneficiary. The amount of monthly annuity
payable to the Contingent Annuitant may be 100%, 67%, or 50% of
the reduced annuity payable to the Participant, as specified in
the notice of election of this option. Regardless of the
selected percentage, however, the annuity payable to the
Contingent Annuitant, before 120 payments have been made, shall
be equal to 100% of the annuity payable to the Participant.
(c) Period-Certain Annuity
The Period-Certain Annuity provides a monthly annuity payable
for a period-certain of 60, 120 or 180 months as selected by the
Participant. Upon expiration of the period-certain payments, no
further payments are due. If at the death of the Participant
any period-certain payments remain unpaid, they shall be
continued to the Participant's beneficiary until the total
period-certain payments selected have been made to the
Participant and the beneficiary.
(d) Other Forms
Other forms of annuity may be selected by the Participant with
the written consent of MBL Life.
Annuity Payments
The first annuity payment is payable on the Annuitant's Annuity
Commencement Date under the Contract. The second and subsequent annuity
payments are payable monthly thereafter. The method for determining the
amount of the first, second and subsequent annuity payments is described
in the Account's Statement of Additional Information.
Variable Annuity Unit Value
The value of a Variable Annuity Unit for any month is calculated as
of the end of the fourteenth day preceding the first day of the month. It
is equal to the Variable Annuity Unit value for the previous month
multiplied by the product of .997137 and the ratio of (1) the Variable
Accumulation Unit value for the fourteenth day preceding the first day of
the month, divided by (2) the Variable Accumulation Unit value for the
fourteenth day preceding the first day of the previous month. The
Variable Annuity Unit value may vary either up or down each month.
The factor of .997137, applied each month, reflects an assumed
investment result at an effective annual rate of 3 1/2%. This assumed
investment result is also used in determining the rates which appear in
the tables in the Contracts and which are used to determine the amount of
the first payment under a variable annuity. An assumed investment result
higher than 3 1/2% may be used for a particular group in order to provide
larger variable annuity payments during the initial months, by mutual
agreement between the Contract Holder and MBL Life. However, a higher
assumed investment result also means a lower factor than .997137 in the
determination of the Variable Annuity Unit values for that particular
group. For example, if the assumed investment result is 4 1/2% instead of
3 1/2%, the variable annuity payments to a retired male Participant, age
65, under a life annuity with 120 monthly payments certain will start
about 8% higher, but this advantage will steadily diminish, and the
payments after the eighth year (approximately) will become lower with the
4 1/2% assumption than they would be with the 3 1/2% assumption.
The Variable Annuity Unit value will vary up or down each month only
to the extent that the actual net investment results are more or less
favorable than the assumed investment results. The actual net investment
results include both income and market value changes of the Account value,
as reflected in the ratio of the two applicable Variable Accumulation Unit
values. For a hypothetical example illustrating the computation of the
Variable Annuity Unit value and a list of the Variable Annuity Unit values
for the last month of each quarter for each of the last ten fiscal years,
see the Account's Statement of Additional Information.
GENERAL RIGHTS
Voting Rights
Contract Holders have the right to instruct MBL Life as to voting
Fund shares held by the Account on all matters to be voted on by Fund
shareholders. The number of votes attributed to each Contract Holder is
determined by dividing the value of all Variable Accumulation Accounts
under the Contract by the net asset value of one Fund share. The number
of Fund shares attributable to Annuitants under the Contract is determined
by dividing the reserves maintained in the Account to meet variable
annuity obligations under the Contract by the net asset value of one Fund
share.
During the Accumulation Period, Participants have the right to
instruct Contract Holders as to casting applicable votes with respect to
Variable Accumulation Accounts under 403(b) Plans or their own purchase
payments under Qualified Plans. During the Annuity Period, Annuitants
have similar rights with respect to the variable annuities. The number of
votes attributable to an Annuitant decreases as variable annuity payments
are made.
MBL Life furnishes Fund proxy material and voting instruction forms
to each Contract Holder and Participant. Fund shares held by the Account
for which MBL Life receives no voting instructions will be voted on each
matter in the same proportion as such shares for which voting instructions
are received. Fund shares held by MBL Life will also be voted on each
matter in the same proportion as such shares for which voting instructions
are received.
Confirmation of Transactions
Within five business days after the end of each calendar quarter, a
quarterly statement will be sent to each Participant detailing all
activity in the Participant's Variable Accumulation Account for the
previous quarter, including purchase payments, redemptions and transfers,
the dates of each such transaction, the amounts allocated to the Variable
Accumulation Account, the sales and other charges deducted, and the total
account value at the end of the period. New Participants will be sent a
confirmation upon receipt of the first purchase payment, and quarterly
statements thereafter. In some cases, confirmations may be sent more
frequently than quarterly.
Reports
During the Accumulation Period, MBL Life furnishes a quarterly report
for each Participant showing as of a specified date (1) the number of
units in his or her Variable Accumulation Account and (2) the Variable
Accumulation Unit value. During the Annuity Period, MBL Life will include
with each variable annuity payment a statement showing the number of
Variable Annuity Units and the Variable Annuity Unit value used in
determining the amount of the annuity payment.
In addition, MBL Life will furnish, for each Participant and
Annuitant, a semi-annual report showing the financial position of the
Account, and a schedule of the common stocks and other investments held by
the Fund.
457 Plan Participants
The rights and benefits of employees participating in a 457 Plan
differ from those of Participants covered under Contracts issued under
other circumstances. Under a 457 Plan, the Contract Holder is usually the
employer, and the assets of such Plan are part of the general assets of
the employer. A Participant must look exclusively to his or her employer
and the employer's financial resources for any benefits to which the
Participant is entitled. Accordingly, all rights of 457 Plan Participants
referred to or described in this Prospectus are vested in the Contract
Holder.
FEDERAL INCOME TAX STATUS
Introduction
The following discussion is a general discussion of federal income
tax considerations relating to the Contract and is not intended as tax
advice. This discussion is not intended to address the tax consequences
resulting from all of the situations in which a person may be entitled to
or may receive a distribution under the Contract. Any person concerned
about these tax implications should consult a competent tax advisor before
initiating any transaction. This discussion is based upon MBL Life's
understanding of the present federal income tax laws as they are currently
interpreted by the Internal Revenue Service ("IRS"). No representation is
made as to the likelihood of the continuation of the present federal
income tax laws or of the current interpretation by the IRS. Moreover, no
attempt has been made to consider any applicable state or other tax laws.
The Contract may be purchased on a non-tax qualified basis ("Non-
Qualified Contract") or purchased and used in connection with certain
retirement arrangements entitled to special income tax treatment under
Section 401(a) 403(b), 408(b) or 457 of the Code ("Qualified Contracts").
Taxation of MBL Life
MBL Life is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Account is not an entity separate
from the Company, and its operation forms a part of the MBL Life, it will
not be taxed separately as a "regulated investment company" under
Subchapter M of the Code. Investment income and realized capital gains
are automatically applied to increase reserves under the Contracts. Under
existing federal income tax law, MBL Life believes that the Account
investment income and realized net capital gains will not be taxed to the
extent that such income and gains are applied to increase the reserves
under the Contracts.
Accordingly, MBL Life does not anticipate that it will incur any
federal income tax liability attributable to the Separate Account and,
therefore, MBL Life does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof
result in MBL Life being taxed on income or gains attributable to the
Account, then MBL Life may impose a charge against the Account (with
respect to some or all Contracts) in order to set aside provisions to pay
such taxes.
Tax Status of the Contract
Diversification. Section 817(h) of the Code requires that with
respect to certain contracts, the investments of the Account must be
"adequately diversified", in accordance with Treasury Regulations in order
for those Contracts to qualify as annuity contracts under federal tax law.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of
the separate accounts used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has
stated in published rulings that a variable contract owner will be
considered the owner of separate account assets if the contract owner
possesses incidents of ownership in those assets, such as the ability to
exercise investment control over the assets. The Treasury Department has
also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control for the investments
of a segregated asset account may cause the investor [i.e., the owner],
rather than the insurance company, to be treated as the owner of the
assets in the account". This announcement also stated that guidance would
be issued by way of regulations or rulings on the "extent to which
policyholders may direct their investments to particular Sub-Accounts
without being treated as owners of the underlying assets." As of the date
of this Prospectus, no guidance has been issued.
The ownership rights under the Contract are similar to, but different
in certain respects from those described by the IRS in rulings in which it
was determined that contract owners were not owners of separate account
assets. These differences could result in an owner being treated as the
owner of a pro rata portion of the assets of the Account. In addition,
MBL Life does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects
to issue. MBL Life therefore reserves the right to modify the Contract as
necessary to attempt to prevent an owner from being considered the owner
of a pro rata share of the assets of the Account.
Retirement Plans
In General. The Contract is designed for use with several types of
retirement plans. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and
the terms and conditions of the plan. Special favorable tax treatment may
be available for certain types of contributions and distributions.
Adverse tax consequences may result from contributions in excess of
specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement
and minimum distribution rules; aggregate distributions in excess of a
specified annual amount; and in other specified circumstances. For
example, a 10% penalty generally will be imposed on the taxable amount of
withdrawals prior to age 59 1/2, subject to certain exceptions.
MBL Life makes no attempt to provide more than general information
about use of the Contracts with the various types of retirement plans.
Owners and participants under retirement plans as well as annuitants and
beneficiaries are cautioned that the rights of any person to any benefits
under Contracts may be subject to the terms and conditions of the plans
themselves, regardless of the terms and conditions of the Contracts issued
in connection with such a plan. The ultimate effect of federal income
taxes on the amounts held under a Contract, on annuity payments, and on
the economic benefit to the Contract owner, the annuitant, or the
beneficiary may depend on the tax status of the individual concerned.
Some retirement plans are subject to distribution and other requirements
that are not incorporated in the administration of the Contracts. Owners
are responsible for determining that contributions, distributions and
other transactions with respect to the Contracts satisfy applicable law.
Owners, participants and beneficiaries should consult their legal counsel
and tax advisor regarding the use of the Contract under the retirement
plan.
Corporate Pension and Profit-Sharing and H.R. 10 Plans. Code Section
401(a) permits employers to establish various types of retirement plans
for employees, and permits self-employed individuals to establish
retirement plans for themselves and their employees. These retirement
plans may permit the purchase of the contracts to accumulate retirement
savings under the plans. Adverse tax consequences to the plan, to the
participant or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments.
Section 403(b) Plans. Under Code Section 403(b), payments made by
public school systems and certain tax exempt organizations to purchase
annuity contracts for their employees are excludible from the gross income
of the employee, subject to certain limitations. However, these payments
may be subject to FICA (Social Security) taxes and state income taxes.
Code Section 403(b)(11) restricts the distribution under Code Section
403(b) annuity contracts of: (1) elective contributions made in years
beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings in such years on amounts held as of the last year
beginning before January 1, 1989. Distribution of those amounts may only
occur upon death of the employee, attainment of age 59 1/2, separation
from service, disability, or financial hardship. In addition, income
attributable to elective contributions may not be distributed in the case
of hardship.
Individual Retirement Annuities and Simplified Employee Pension
Plans. Sections 219 and 408 of the Code permit eligible individuals to
contribute to an individual retirement program known as an Individual
Retirement Annuity or Individual Retirement Account, each hereinafter
referred to as an "IRA". IRAs are subject to limitations on the amount
that may be contributed and deducted and the time when distributions may
commence. Also, distributions from certain other types of qualified plans
may be "rolled over" on a tax-deferred basis into an IRA. Employers may
establish Simplified Employee Pension (SEP) Plans to provide IRA
contributions on behalf of their employees. The sale of a Contract for
use with an IRA may be subject to special disclosure requirements of the
Internal Revenue Service. Purchasers of a Contract for use with IRAs will
be provided with supplemental information required by the Internal Revenue
Service or other appropriate agency. Such purchasers will have the right
to revoke their purchase within 7 days of the earlier of the establishment
of the IRA or their purchase.
Deferred Compensation Plans. Code Section 457 provides for certain
deferred compensation plans. These plans may be offered with respect to
service for state governments, local governments, political subdivisions,
agencies, instrumentalities and certain affiliates of such entities, and
tax exempt organizations. These plans are subject to various restrictions
on contributions and distributions. The plans may permit participants to
specify the form of investment for their deferred compensation account.
In general, all investments are owned by the sponsoring employer and are
subject to the claims of the general creditors of the employer. Depending
on the terms of the particular plan, the employer may be entitled to draw
on deferred amounts for purposes unrelated to its Section 457 plan
obligations. In general, all amounts received under a Section 457 plan
are taxable and are subject to federal income tax withholding as wages.
Restrictions under Qualified Contracts. Other restrictions with
respect to the election, commencement, or distribution of benefits may
apply under Qualified Contracts or under the terms of the plans in respect
of which Qualified Contracts are issued.
Taxation of Distributions
Section 72 of the Code governs taxation of distributions from Section
401, 403(b) and 408 retirement plans in general. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the
Account Value or any portion of an interest in the retirement plan
generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is
taxable as ordinary income.
In the case of a withdrawal, a ratable portion of the amount received
is taxable, generally based on the ratio of the "investment in the
contract" to the individual's total accrued benefit under the retirement
plan. The "investment in the contract" generally equals the amount of any
non-deductible purchase payments paid by or on behalf of any individual.
For a Contract issued in connection with retirement plans, the "investment
in the contract" will most likely be zero. Special tax rules may be
available for certain withdrawals.
Although the tax consequences may vary depending on the annuity
payment elected under the Contract, in general, only the portion of the
annuity payment that represents the amount by which the Account Value
exceeds the "investment in the contract" will be taxed; after the
"investment in the contract" is recovered, the full amount of any
additional Annuity payments is taxable. For variable annuity payment, the
taxable portion is generally determined by an equation that establishes a
specific dollar amount of each payment that is not taxed. The dollar
amount is determined by dividing the "investment in the contract" by the
total number of expected periodic payments. However, the entire
distribution will be taxable once the recipient has recovered the dollar
amount of his or her "investment in the contract". For Fixed Annuity
payments, in general there is no tax on the portion of each payment which
represents the same ratio that the "investment in the contract" bears to
the total expected value of the Annuity payments for the term of the
payments; however, the remainder of each Annuity payment is taxable. Once
the "investment in the contract" has been fully recovered, the full amount
of any additional Annuity payments is taxable. If Annuity payments cease
as a result of an Annuitant's death before full recovery of the
"investment in the contract", consult a competent tax advisor regarding
deductibility of the unrecovered amount.
Amounts may be distributed from the Contract because of the death of
a retirement plan participant. Generally, such amounts are includible in
the income of the recipient as follows: (1) if distributed in a lump sum,
they are taxed in the same manner as a full surrender as described above,
or (2) if distributed under an Annuity Option, they are taxed in the same
manner as Annuity payments, as described above.
Withholding
Retirement distributions generally are subject to withholding for the
recipient's federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Under certain
circumstances, recipients generally are provided the opportunity to elect
not to have tax withheld from distributions. Certain distributions from
Section 401(a) plans and Section 403(b) annuities are subject to mandatory
federal income tax withholding.
Possible Changes in Taxation
In past years, legislation has been proposed that would have
adversely modified the federal taxation of certain annuities. For
example, one such proposal would have changed the tax treatment of non-
qualified annuities that did not have "substantial life contingencies" by
taxing income as it is credited to the annuity. Although as of the date
of this Prospectus Congress is not actively considering any legislation
regarding the taxation of annuities, there is always the possibility that
the tax treatment of annuities could change by legislation or other means
(such as IRS regulations, revenue rulings, judicial decisions, etc.).
Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect
to other tax situations not discussed in this Prospectus. Further, the
federal income tax consequences discussed herein reflect MBL Life's
understanding of the current law and the law may change. Federal estate
and gift tax consequences of ownership or receipt of distributions under
the Contract depend on the individual circumstances of each Owner or
recipient of a distribution. A competent tax advisor should be consulted
for further information.
OTHER CONTRACT PROVISIONS
Beneficiary
The Participant may select a beneficiary to receive any benefit at
death, and may change the beneficiary by proper written notice to MBL
Life.
Non-Assignability
To the extent permitted by law, the right to benefits or payments
under the Contract is neither assignable nor subject to the claim of any
creditor, except as may be allowed under 457 Plans.
Portability
A Participant under a 403(b) Plan who becomes employed by a new
employer which is eligible under Section 403(b) of the Code, may enter
into an annuity purchase agreement with the new employer, at no additional
charge, so that purchase payments will be continued under the Contract by
the new employer on behalf of the Participant, if the Contract so provides
and if MBL Life consents.
Failure of Plan to Qualify
If a previously issued Qualified Plan fails to qualify under the
Code, MBL Life has the right, without prior notice to or consent of the
Contract Holder, to transfer any amounts held in Variable Accumulation
Accounts to the Companion Contract, and to convert any amounts of variable
annuity to a fixed annuity under the Companion Contract on the basis of
equivalence as of the date of transfer and conversion. Thereafter, the
Contract shall be considered terminated. Proof of qualification may be
required by MBL Life.
Discontinuance
Purchase payments under a Contract will no longer be accepted by MBL
Life when any of the following events occurs:
(1) The Contract Holder so notifies MBL Life in writing;
(2) MBL Life so notifies the Contract Holder in writing after an
investment adviser other than Markston (or an affiliate) is selected
for the Fund. Such a notice would be sent to all other Contract
Holders participating in the Account;
(3) After receipt of an amendment or modification of the Plan, MBL Life
gives the Contract Holder written notice that the effect of the
amendment, in MBL Life's judgment based on underwriting principles
then in effect, might be detrimental to MBL Life, and the Contract
Holder and MBL Life are unable to reach a mutual agreement within 30
days after the written notice. If discontinuance occurs for this
reason, the amendment will not be given effect under the Contract;
Effective with any such discontinuance, no further purchase payment
will be accepted by MBL Life under the Contract. However, MBL Life will
continue to maintain Participants' existing accumulation accounts unless
otherwise requested, as explained below under "Transfer to New Funding
Agency". Discontinuance of purchase payments will have no effect on the
rights of Annuitants.
Transfer to New Funding Agency
If MBL Life ceases to accept purchase payments, a Contract Holder may
designate a new funding agency to receive amounts to be transferred in
accordance with the following paragraphs.
With respect to a 403(b) Plan, or IRA Plan, each Participant has the
right to direct MBL Life, by proper written request to cancel his or her
accumulation account and transfer such dollar value to the new funding
agency, after deducting the administration charge. All such transfers
will be made in the aggregate and valued as of a single transfer date,
which will be 90 days after receipt by MBL Life of the Contract Holder's
notice.
With respect to a 401 or 457 Plan, the Contract Holder has the right,
with respect to all Participants, to direct MBL Life, by proper written
notice of the selection of a new funding agency, to cancel each
Participant's accumulation account and transfer such aggregate dollar
value to the new funding agency. The value of such accounts will be
determined as of the day MBL Life receives the Contract Holder's notice at
its Home Office, or any later transfer date specified in the notice.
For any Plan, the aggregate transfer payment will be paid within
seven days after the transfer date.
Changes in Contract
MBL Life has the right, subject to compliance with the law as
currently applicable or subsequently changed, to give written notice to
the Contract Holder, at least 6 months in advance, of a change to be
effective on or after the fifth Contract anniversary in (1) the tables of
annuity rates, and (2) any of the charges specified in the Contract.
Participants will be informed of any such change.
Any such change which has an adverse effect on any Participant will
not apply to any amounts credited to accumulation accounts, or to any
annuities bought before the effective date of such change, except that a
change in the risk and death benefit charges may apply uniformly to all
Variable Accumulation Units, including those credited before the effective
date of the change (but not retroactively). Because the tables of annuity
rates remain in effect with respect to purchase payments made before a
change is effective, until such purchase payments are applied on the
Participant's Annuity Commencement Date, this rate guarantee may extend
many years into the future.
The Contract may also be changed in any other respect at any time by
an agreement between the Contract Holder and MBL Life, but no such change
will be made without the consent of the persons entitled to receive
benefits under the Contract, unless (1) the change will have no adverse
effect on their rights with respect to the Variable Accumulation Account
balance already credited or annuities already bought, or (2) the change is
required to comply with a law or governmental regulation or (3) the Plan
is a 457 Plan. Such persons will be informed of any such change which
materially affects their rights.
Other Changes
MBL Life reserves the right, subject to compliance with the law as
currently applicable or subsequently changed, (1) to substitute the shares
of any other registered investment company for the shares of the Fund held
by the Account, subject to prior approval by the SEC, (2) to discontinue
submitting certain matters for approval by persons having voting rights
under the Contracts, (3) to fund additional classes of contracts through
the Account, (4) to transfer assets, determined by MBL Life to be assigned
to the class of contracts to which the Contracts belong from the Account
to another separate account by withdrawing the same percentage of each
investment in the Account, with appropriate adjustments to avoid odd lots
and fractions, and (5) to operate the Account as another form of
registered investment company or unregistered entity. Contract Holders
will be given prompt notice after any action which results in a change in
the composition of the Account's assets.
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
Page
Services . . .. . . . . . . . . . . . . . . . . . 2
Purchase and Pricing of Account Units. . . . . . . 2
Annuity Payments . . . . . . . . . . . . . . . . . 3
Calculation of Performance Data. . . . . . . . . . 5
Additional Information . . . . . . . . . . . . . . 6
Financial Statements . . . . . . . . . . . . . . . 6
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
OFFERED BY
MBL LIFE
ASSURANCE CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
1-800-435-3191
DISTRIBUTOR
FIRST PRIORITY INVESTMENT CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
INVESTMENT ADVISER
Markston Investment Management
1 North Lexington Avenue
White Plains, New York 10601-1702
(914) 761-4700
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN
WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO
MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
Business Reply Mail
First Class Permit No.
Newark, NJ
Postage will be paid by
MBL Life Assurance Corporation
Group Pension Operations
MBL Life Assurance Corporation
520 Broad Street
Newark, New Jersey 07102-3111
Attn: MBL Variable Contract Account-2
- -------------------------------------------------------
Please send the current Statement of Additional Information
for MBL Variable Contract Account-2 to:
_________________________________________________
Name
_________________________________________________
Street
_________________________________________________
City State Zip
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
(Previously known as Mutual Benefit Variable Contract Account-2)
____________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Statement of Additional
Information of information required by the Items in Part B of Form N-4.
Heading in Statement of
Item Number Additional Information
15 Cover Page
16 Table of Contents
17 General Information and
History
18 Services
19 Purchase and Pricing of
Account Units; Variable
Accumulation Unit Values
20 *
21 Performance-Related
Information
22 Annuity Payments; Variable
Annuity Unit Values
23 Financial Statements
____________________________________________________________
* Indicates inapplicable or negative.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
MBL Life Assurance Corporation
STATEMENT OF ADDITIONAL INFORMATION
, 1996
This Statement of Additional Information is not a prospectus but has
been incorporated by reference into, and should be read in conjunction
with, the Prospectus of MBL Variable Contract Account-2 dated ,
1996. Terms not defined in this Statement of Additional Information shall
have the same meaning given to them in the incorporated Prospectus. A
copy of the Prospectus may be obtained from Group Pension Operations, MBL
Life Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-
3111, Attn: MBL VARIABLE CONTRACT ACCOUNT-2, telephone number (201) 481-
8564.
TABLE OF CONTENTS
Cross Reference to
Page Section in Prospectus
General Information and The Variable Contract
History . . . . . . . . . . . 2 Account - Organization
Services . . . . . . . . . . . 2 The Variable Contract
Account - Administration
and Distribution
Purchase and Pricing of Account
Units . . . . . . . . . . . . . 2 Accumulation Account
Annuity Payments . . . . . . . 3 Annuity
Calculation of Performance
Data . . . . . . . . . . . . . 5 Performance-Related
Information
Additional Information . . . . 6 --
Financial Statements . . . . . 6 --
GENERAL INFORMATION AND HISTORY
The business history of MBL Variable Contract Account-2 (the
"Account") (previously known as Mutual Benefit Variable Contract Account-
2), is described in its prospectus.
The Depositor, MBL Life Assurance Corporation ("MBL Life"), is a
stock life insurance company and the surviving entity in the
Rehabilitation of Mutual Benefit Life Insurance Company ("Mutual Benefit
Life").
On July 16, 1991, the Superior Court of New Jersey ("Court") entered
an Order ("Order") appointing the Insurance Commissioner of the State of
New Jersey as Rehabilitator of Mutual Benefit Life, thereby granting the
Rehabilitator immediate exclusive possession and control of, and title to,
the business and assets of Mutual Benefit Life, including those of the
Account. As a separate account, the assets and liabilities of the Account
were maintained separate and apart from Mutual Benefit Life's other assets
and liabilities.
In view of the terms and conditions of the Order, on July 16, 1991,
Mutual Benefit Life, on behalf of the Account, immediately ceased
acceptance of applications for new Contracts and additional purchase
payments under existing Contracts. This cessation of additional purchase
payments under existing Contracts continued from July 16, 1991, until the
effective date of the Account's registration statement with the Securities
and Exchange Commission ("SEC"). MBL Life will not issue new Contracts.
Transfers from VCA-2 to the Companion Contract were temporarily prohibited
and restrictions were imposed on withdrawals from the Companion Contract
during the Rehabilitation Period. Payments upon the death of the
Participant continued to be made to the beneficiaries.
In accordance with the Rehabilitation Plan of Mutual Benefit Life, as
approved by the Court on January 28, 1994, certain assets and liabilities
of Mutual Benefit Life were transferred to MBL Life as of May 1, 1994. In
addition, the assets and liabilities of the Account were transferred to a
new separate account of MBL Life.
SERVICES
All administrative services of the Account are provided by MBL Life
as described in the Prospectus under the caption "The Variable Contract
Account - Administration and Distribution", except for sales services,
which are provided by First Priority Investment Corporation ("First
Priority").
PURCHASE AND PRICING OF ACCOUNT UNITS
Net Purchase Payments are allocated to a Participant's Variable
Accumulation Account under the Contract and are applied to purchase
Variable Accumulation Units. The method of calculating the Variable
Accumulation Unit and the Net Investment Factor is described in the
Account's Prospectus under the caption "Variable Accumulation Account",
and is illustrated by the following hypothetical example.
Assume that July 1st and July 2nd of some year are both Valuation
Dates and that the value of a share of MBL Growth Fund, Inc. (the "Fund")
is $10.291111 on July 1st and $10.301112 on July 2nd, as of the time of
the close of trading on the New York Stock Exchange. Assume also that
there are no dividends or other distributions made by the Fund on July 2nd
and that there is no deduction for taxes. To determine the Variable
Accumulation Unit value for July 2nd, first find the ratio of $10.301112
to $10.291111, which is 1.0009718. Then subtract from this ratio of
1.0009718 the factor .0000101 (the daily equivalent of the annual
deduction of 0.37%). The difference of 1.0009617 is the Net Investment
Factor for July 2nd. When multiplied by the Variable Accumulation Unit
value for July 1st, it yields the unit value for July 2nd. For example,
if the value for July 1st were $10.101111, the value for July 2nd would be
$10.110825, which would be rounded to $10.111 for all purposes except in
calculating the unit value for July 3rd.
ANNUITY PAYMENTS
On a Participant's Retirement Date, the value of the Variable
Accumulation Account, less any applicable premium tax, may be applied to
purchase a variable annuity. The amount of the variable annuity payment
depends upon the number and value of the Annuitant's Variable Annuity
Units. The computation of the Variable Annuity Unit value is described in
the Account's Prospectus under the caption "Variable Annuity Unit Value".
The first annuity payment is payable on the Annuitant's Annuity
Commencement Date under the Contract. The second and subsequent annuity
payments are payable monthly thereafter.
The amount of the first variable annuity payment depends on the
amount of funds used to buy the annuity and the applicable annuity
purchase rate. Such funds are equal to the Annuitant's number of Variable
Accumulation Units multiplied by the value of such a Unit on the
fourteenth day before his or her Annuity Commencement Date, less any
applicable premium tax. The purchase rate is set out in a rate table in
the Contract and depends on the form of annuity selected, the age of the
Annuitant and any Contingent Annuitant, an assumed investment result and a
mortality assumption based on the 1951 Group Annuity Mortality Table for
Males.
The amount of the second and subsequent variable annuity payments
depends on the number and value of the Annuitant's Variable Annuity Units.
The number of Variable Annuity Units credited to an Annuitant is
determined by dividing the dollar amount of the Annuitant's first variable
annuity payment by the value of a Variable Annuity Unit for the month of
that payment. This number of Variable Annuity Units remains constant.
However, since the Account invests in shares of the Fund, the dollar value
of a Variable Annuity Unit and hence the dollar amount of the variable
annuity payments varies up or down from month to month, depending on the
value of the securities held by the Fund. The dollar amount of annuity
payments will not be affected by mortality experience or by an increase in
expenses in excess of the charges provided for in the Contracts.
The computation of the first variable annuity payment, the number of
Variable Annuity Units, the Variable Annuity Unit value, and the second
variable annuity payment may be illustrated by the following example.
Assume that a male participant, residing in a state where there is no
premium tax, elects to buy a variable annuity on his 65th birthday and
selects a life annuity with 120 monthly payments certain. Assume also
that, 14 days before his Annuity Commencement Date, the Participant's
Variable Accumulation Account consists of 2,500.000 Variable Accumulation
Units, and the Variable Accumulation Unit Value for the fourteenth day
before his Annuity Commencement Date was $11.600.
The Participant's account has a value of 2,500.000 multiplied by
$11.600 or $29,000.00, for the purpose of buying his variable annuity.
The rate of first monthly payment of variable annuity in this example is
$6.50 per $1,000 applied, so that the first payment is equal to 29.00000
multiplied by $6.50 or $188.50.
If the Variable Annuity Unit Value for the month when the annuity is
bought is $1.125, the number of Variable Annuity Units to be credited to
the Annuitant equals $188.50 divided by $1.125, or 167.56 units. The
dollar amount of each subsequent payment will be equal to 167.56
multiplied by the Variable Annuity Unit Value for the month in which the
payment is due.
To determine the dollar amount of the second variable annuity
payment, assume that the ratio of the Variable Annuity Unit value for the
fourteenth day before the first day of the second month, to the Variable
Annuity Unit value for the fourteenth day before the first day of the
first month, is 1.003780. Then the Variable Annuity Unit value for the
second month is equal to the first month's value of $1.125 multiplied by
.997137 times 1.003780, which is $1.125 multiplied by 1.000906, or $1.126.
Therefore, the second payment equals the number of Variable Annuity Units
(167.56) multiplied by the Variable Annuity Unit value ($1.126) or 188.67.
Calculation of Performance Data
AVERAGE ANNUAL TOTAL RETURN
(Period Ended December 31, 1995)
1 Year 5 Year 10 Year
VCA-2 34.22% 16.90% 14.31%
S & P 500 37.53% 16.55% 14.86%
Average annual total return for the one-year, five-year and ten-year
periods shown above are calculated individually for each period. A
hypothetical initial payment of $1,000 is made to the Account on the first
day of each period. No further payments are made. As of the date of this
Statement of Additional Information, the only Contract charge applied is
the charge for MBL Life's assumption of (1) expense risks (0.25%
annually), and (2) mortality risks and the provision of the minimum death
benefit (0.12% annually). Prior to January 1, 1989, a one-time
Participant enrollment fee (up to $15.00) and an annual administration
charge (up to $10.00 and up to $0.50 per purchase payment and transfer, or
2.00% of accumulation accounts, if greater) were deducted. These charges,
although no longer in effect, are included in the average annual total
return figures illustrated, for the years that such charges were
applicable. All distributions, if any, from the Fund are assumed to be
reinvested. Each Participant is assumed to redeem the total value of his
or her Variable Accumulation Account at the end of each period shown above
for cash, rather than electing to apply the value to purchase an annuity.
The ending redeemable value is the Variable Accumulation Account
value at the end of each period, and is calculated by multiplying the
total number of units at the end of each period by the net asset value on
the last day of the period. Although eliminated as of January 1, 1989 and
no longer charged, the ending redeemable value takes into account the
annual deduction from the Participant's Variable Accumulation Account of
the $10.00 administration charge, for the years that such charges were
applicable.
The average annual total return quotations for the 1, 5, 10 year
periods ended on December 29, 1995 are computed by finding the average
annual compounded rates of return over the 1, 5, and 10 year periods that
would equate the initial amount invested to the ending redeemable value.
The calculation does not take into account any sales charge which
would have been deducted from the purchase payment, if made prior to
January 1, 1989. The inclusion of the sales charge in the calculation
would have reduced the average annual total return illustrated for each
period. The sales charge, enrollment fee, and administration charge
provisions were deleted from all VCA-2 contracts, effective January 1,
1989. The fee and charges are no longer levied.
The performance figures shown above are compared to performance data
for the Standard and Poor's 500 Stock Index ("S & P 500"), which is
described in the Account's prospectus under the caption "Performance
Related Information".
ADDITIONAL INFORMATION
This Statement of Additional Information, and the Prospectus to which
it relates, omit some information contained in the registration statement
filed with the Securities and Exchange Commission, Washington, D.C.
Copies of such information may be obtained from the Commission upon
payment of the prescribed fees.
FINANCIAL STATEMENTS
The Account incorporates by reference into this Statement of
Additional Information its audited Financial Statements and the Report of
Independent Accountants thereon contained in the 1995 Annual Report to
Contract Holders and Participants.
The following financial statements relate to the financial position
and operations of MBL Life. As explained in the Account's Prospectus, the
value of a Contract Holder's interest under the Contracts described herein
is affected solely by the investment results of the Account. The MBL Life
financial statements should be considered by Contract Holders only as
bearing upon the ability of MBL Life to meet its obligations under the
Contract.
Copies of the Account's Financial Statements are mailed to each
Contract Holder semiannually. The Account's annual financial statements
are audited by a firm of independent accountants. The firm of Coopers &
Lybrand L.L.P. has been selected for the current fiscal year. The Account
will furnish, without charge, an additional copy of these Reports upon
request made to: Group Pension Operations, MBL Life Assurance Corporation,
520 Broad Street, Newark, New Jersey 07102-3111, Attn: MBL VARIABLE
CONTRACT ACCOUNT-2, telephone number 1-800-435-3191.
[The Account's and MBL Life's financial statements to be filed by
pre-effective Amendment.]
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
OFFERED BY
MBL LIFE
ASSURANCE CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
(201) 481-8000
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Parsippany, New Jersey
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-2
formerly known as
MUTUAL BENEFIT VARIABLE CONTRACT ACCOUNT-2
_________________________________________________________________
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements
The following Financial Statements are filed pursuant to Item 23 of
Part B of this registration statement:
+ MBL Variable Contract Account-2:
Report of Independent Accountants.
Statement of Assets and Liabilities, December 31, 1995.
Statement of Operations (year ended December 31, 1995).
Statement of Changes in Net Assets (two years ended December 31,
1995).
+ MBL Life Assurance Corporation:
Report of Independent Accountants.
Balance Sheet as of December 31, 1995.
Statement of Operations (year ended December 31, 1995).
Statement of Changes in Capital and Surplus
(year ended December 31, 1995).
Statement of Cash Flows (year ended December 31, 1995).
(b) Exhibits*
(1)(A) Resolution of the Board of Directors of The Mutual Benefit Life
Insurance Company establishing Mutual Benefit Variable Contract
Account-2, incorporated by reference to earlier filing on March 20,
1970, SEC File No. 811-2047, Exhibit #A(1) of Form N-8B-2
Registration Statement of Registrant.
(B) Resolution of the Board of Directors of MBL Life Assurance
Corporation establishing MBL Variable Contract Account-2,
incorporated by reference to earlier filing on April 29, 1994, SEC
File Nos. 2-36664 and 811-2047, Exhibit #(1)(B) to Post-Effective
Amendment No. 41 of Form N-4 Registration Statement.
(2) Not Applicable.
(3)(A) Variable Annuity Supervision Agreement dated January 5,
incorporated by reference to earlier filing on January 6, 1971, SEC
File No. 811-2047, Exhibit #(3)(a) to Post-Effective Amendment No.
1 of Form N-8B-2 Registration Statement.
(B) Form of Variable Contract Agreement For Enrollees, incorporated by
reference to earlier filing on January 6, 1971, SEC File No. 811-
2047, Exhibit #(3)(b) to Post-Effective Amendment No. 1 of Form N-
8B-2 Registration Statement.
(4)(A) Form of Group Tax Deferred Annuity Contract.
(B) Form of Group Tax Deferred Annuity Contract.
Both (A) and (B) incorporated by reference to earlier filing on
March 2, 1987, SEC File No. 2-3664, Exhibit #(4)(a) and (4)(b) to
Post-Effective Amendment No. 33 of Form N-4 Registration Statement.
(C) Form of Group Tax Deferred Annuity Contract.
(D) Form of Group Variable Annuity Contract.
Both (C) and (D) incorporated by reference to earlier filing on
March 3, 1988, SEC File No. 2-36664, Exhibit #(4)(c) and (4)(d) to
Post-Effective Amendment No. 35 of Form N-4 Registration Statement.
(E) Form of Endorsement to Contracts in (4)(A), (4)(B), (4)(C) and
(4)(D).
(F) Form of Amendment to Group Variable Annuity Contracts in (4)(A),
(4)(B), (4)(C) and (4)(D) above, adding the restrictions on
redemption imposed by Section 403(b)(11) of the Internal Revenue
Code of 1986, as amended. Both (E) and (F) incorporated by
reference to earlier filing on April 28, 1989, SEC File No. 2-
36664, Exhibit #(4)(e) and (4)(f) to Post-Effective Amendment No.
37 of Form N-4 Registration Statement.
(G) Form of Group Tax Deferred Variable Annuity Contract, Deposit
Administration, Individual Allocation.
(H) Form of Group Annuity Deposit Administration Individual Allocation
Companion to VCA-2. Both (G) and (H) incorporated by reference to
earlier filing on April 28, 1989, SEC File No. 2-36664, Exhibit
#(4)(g) and (4)(h) to Post-Effective Amendment No. 37 of Form N-4
Registration Statement.
(I) Form of Assumption Certificate (CRT-AC1 and CRT-AA2C), incorporated
by reference to filing of Mutual Benefit Variable Contract Account-
7 on April 29, 1994, SEC File Nos. 2-86722 and 811-3853, Exhibit
(6)(H) and (6)(I), respectively, to Post-Effective Amendment No. 12
of Form N-3 Registration Statement.
(J) Form of Certificate of Participation (CRT-TDAO), incorporated by
reference to filing of Mutual Benefit Variable Contract Account-7
on April 29, 1994, SEC File Nos. 2-86722 and 811-3853, Exhibit
(6)(J) to Post-Effective Amendment No. 12 of Form N-3 Registration
Statement.
(K) Form of Contract GVA-VCA2, incorporated by reference to earlier
filing on April 29, 1994, SEC File Nos. 2-36664 and 811-3853,
Exhibit #(4)(K) to Post-Effective Amendment No. 41 of Form N-4
Registration Statement.
(5)(A) Form of Application used with Contracts under IRC Section 403(b),
incorporated by reference to earlier filing on May 1, 1991, SEC
File No. 2-36664, Exhibit #(5)(A) to Post-Effective Amendment No.
40 of Form N-4 Registration Statement.
(B) Form of Application used with Contracts under IRC Section 408,
incorporated by reference to earlier filing on March 2, 1987, SEC
File No. 2-36664, Exhibit #(5)(b) to Post-Effective Amendment No.
33 of Form N-4 Registration Statement.
(C) Form of Acknowledgement of Statutory TDA Withdrawal Restrictions,
incorporated by reference to earlier filing on April 28, 1989, SEC
File No. 2-36664, Exhibit #(5)(c) to Post-Effective Amendment No.
37 of Form N-4 Registration Statement.
(6)(A) Charter, as amended, of The Mutual Benefit Life Insurance Company.
(B) By-Laws, as amended, of The Mutual Benefit Life Insurance Company.
Both (6)(A) and (6)(B) incorporated by reference to earlier filing
on May 1, 1991, SEC File No. 2-36664, Exhibit # (6)(A) and (6)(B),
respectively, to Post-Effective Amendment No. 40 of Form N-4
Registration Statement.
(C) Second Amended and Restated Articles of Redomestication and
Incorporation of MBL Life Assurance Corporation, incorporated by
reference to filing of Mutual Benefit Variable Contract Account-7
on April 29, 1994, SEC File Nos. 2-86722 and 811-3853, Exhibit
(8)(C) to Post-Effective Amendment No. 12 of Form N-3 Registration
Statement.
(D) Draft By-Laws of MBL Life Assurance Corporation, incorporated by
reference to filing of Mutual Benefit Variable Contract Account-7
on April 29, 1994, SEC File Nos. 2-86722 and 811-3853, Exhibit
(8)(D) to Post-Effective Amendment No. 12 of Form N-3 Registration
Statement.
(7) Not applicable.
(8) Not applicable.
+(9) Opinion of Frank D. Casciano, General Counsel, MBL Life Assurance
Corporation.
+(10) Consent of Coopers & Lybrand L.L.P., Independent Accountants.
Report of Arthur Andersen LLP, Independent Public Accountants;
Consent of Arthur Andersen LLP, Independent Public Accountants;
(11) Not applicable.
(12) Not applicable.
(13) Schedules for computation of each performance quotation.
(i) One-Year Performance.
(ii) Five-Year Performance.
(iii) Ten-Year Performance.
(14) Not applicable.
(15) Mutual Benefit Fund et al. No-Action Letter, dated October 27,
1993, incorporated by reference to filing of Mutual Benefit
Variable Contract Account-7 on April 29, 1994, SEC File Nos. 2-
86722 and 811-3853, Exhibit (19) to Post-Effective Amendment No. 12
of Form N-3 Registration Statement.
(16) Mutual Benefit Life Insurance Company Information Statement Plan of
Rehabilitation and Related Documents, including the Confirmation
Order, dated January 28, 1994, incorporated by reference to filing
of Mutual Benefit Variable Contract Account-7 on April 29, 1994,
SEC File Nos. 2-86722 and 811-3853, Exhibit (20) to Post-Effective
Amendment No. 12 of Form N-3 Registration Statement.
(17) Powers of Attorney.
+(27) Financial Data Schedule.
________________________________________
* Page numbers inserted in manually signed copy only.
+ To be filed with the Pre-Effective Amendment to the Registrant's
Registration Statement on or about April 1, 1996.
Item 25. Directors and Officers of MBL Life Assurance Corporation.
As of May 1, 1994, the assets and liabilities of the Account was
transferred to a new separate account of MBL Life Assurance
Corporation ("MBL Life"), pursuant to the Rehabilitation Plan of
Mutual Benefit Life, as approved by the Court on January 28,
1994. MBL Life is managed by a Board of Directors. The
Directors of MBL Life, their principal business addresses and
their positions and offices with MBL Life, are as follows:
Name and Principal Position and Offices
Business Address with Depositor
Alan J. Bowers Director, President
MBL Life Assurance and Chief Executive
Corporation Officer
520 Broad Street
Newark, NJ 07102
Elizabeth E. Randall Director, Chairman
20 W. State Street of the Board
CN-325
Trenton, NJ 08625
Sheldon Brooks Director
The Prudential Asset
Management Company, Inc.
71 Hanover Road
Florham Park, NJ 07932
Donald Bryan Director
20 W. State Street
CN-325
Trenton, NJ 08625
Harry D. Garber Director
76 Mulberry Avenue
Garden City, NY 11530
John C. Kerr, Jr. Director
20 W. State Street
CN-325
Trenton, NJ 08625
Richard W. Klipstein Director
National Organization
of Life and Health Insurance
Guaranty Association
13873 Park Center Road
Herndon, VA 22071
Karen E. Mitchell Director
20 W. State Street
CN-325
Trenton, NJ 08625
Robert F. Pellecchia Director
20 W. State Street
CN-325
Trenton, NJ 08625
Felix Schirripa Director
The Metropolitan Life
Insurance Company
One Madison Avenue
New York, NY 10010-3690
_____________________________________
Officers (Other than Directors) of MBL Life whose
activities relate to the Account are listed below.
Frank D. Casciano Executive Vice President,
General Counsel and
Secretary
Robert T. Budwick Executive Vice President -
Chief Investment Officer
Kenneth A. Watson Executive Vice President
and Chief Financial
Officer
Kathleen M. Koerber Executive Vice President -
Chief Operating Officer
Kenneth K. Schaefer Second Vice President
and Treasurer
Walter A. Appel Vice President,
Securities Investment
David A. James Senior Vice President,
Securities Investment
Albert W. Leier Vice President
and Controller
William G. Clark Senior Vice President,
Pension and Investment
Products
All of these Officers maintain a principal business address at
520 Broad Street, Newark, New Jersey 07102.
Prior to May 1, 1994, each officer named above maintained a
similar position and/or title with Mutual Benefit Life.
Item 26. Persons Controlled by or Under Common Control with
the Depositor or Registrant.
MBL Variable Contract Account-2 was formerly a separate account
of Mutual Benefit Life. As described above and in accordance
with the Rehabilitation Plan of Mutual Benefit Life, the assets
and liabilities of Mutual Benefit Variable Contract Account-2
were transferred to a separate account of MBL Life.
The Account is a separate account of MBL Life, a stock life
insurance company organized under the laws of New Jersey. The
voting stock of MBL Life was transferred to a Stock Trust
established by the Plan appointing the New Jersey Commissioner
of Insurance as Trustee through the end of the Rehabilitation
Period, scheduled to terminate December 31, 1999.
No person, other than the Trustee, has the direct or indirect
power to control MBL Life except insofar as he or she may have
such power by virtue of his or her capacity as a director.
As of May 1, 1995, those persons under common control with the
Depositor (MBL Life) are illustrated by the chart on page C-7.
The following information relates to that chart.
All corporations are organized under the laws of New Jersey
except where a different state is indicated.
The principal business of certain of the Depositor's affiliates
are as follows:
MBLLAC Holding Corporation is a holding company; First Priority
Investment Corporation is a registered investment adviser and
broker/dealer; Metro IRB, Inc., Fisher Island Corporation,
Pelican Apartment Properties, Inc. and Metro JV, Inc. act as
general partners in joint ventures; Mutual Benefit Marketing
Group, Inc. markets insurance products; EHC Companies, Inc. is a
holding company for Ernst Home Centers, Infotech Corp.,
Extraspace Inc., and EDC, Inc., a home and garden chain, a data
service provider, specialty retail stores, and a warehousing
operation, respectively; and NWD Investment Company is a holding
company for WD Holdings, Inc., a distribution company; Fisher
Island Mortgage Corporation acts as mortgage originator and
holder for residential loans. Markston Investment Management, a
registered investment adviser, is a partnership owned 51 percent
by MBL Sales Corporation; Hawaiian Macadamia Company, Inc., a
processing company; Tong Yang Benefit Life Insurance Company, a
foreign insurance company; Outlet Communications Inc., a
holding company for Outlet Broadcasting Inc., a broadcasting
company; International Corporate Marketing Group, an insurance
broker.
The following page contains an organizational diagram of the direct
and indirect subsidiaries of MBL Life and the mutual funds sponsored by
MBL Life. The diagram indicates the state of incorporation for each
entity and the percentage of voting securities controlled by MBL Life.
MAP-Equity Fund, MBL Growth Fund, Inc. and MAP-Government Fund,
Inc. are investment companies as defined by the Investment
Company Act of 1940. Registrant does not own any controlling
interest in any of the Funds. First Priority Investment
Corporation ("First Priority"), a wholly-owned indirect
subsidiary of Depositor, serves as distributor for the shares of
both MAP-Equity Fund and MBL Growth Fund, Inc. Markston
Investment Management, a partnership between Markston
International, Inc. and MBL Sales Corporation, serves as
investment adviser to MAP-Equity Fund and MBL Growth Fund, Inc.
Shares of MBL Growth Fund, Inc. may be purchased only by
insurance company separate accounts which are registered under
the Investment Company Act of 1940. First Priority also serves
as distributor and investment adviser for MAP-Government Fund,
Inc. The Funds file separate financial statements. Ernst Home
Centers, Inc. and First Priority file independent financial
statements with the Securities and Exchange Commission.
Item 27. Number of Contract Owners.
As of January 2, 1996 - 65
Item 28. Indemnification.
To the extent permitted by law of the State of New Jersey and
subject to all applicable requirements thereof, MBL Life has
undertaken to indemnify each of its directors and officers who
is made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact
that he, his testate or intestate, is or was a director or
officer of MBL Life.
Insofar as indemnification for liability arising under the Act
may be permitted to Directors and Officers pursuant to the
foregoing provisions, or otherwise, MBL Life has been advised
that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in
the Act, and is therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
the payment by MBL Life of expenses incurred or paid by a
Director or Officer in the successful defense of any action,
suit or proceeding) is asserted by such Director or Officer in
connection with the securities being registered, MBL Life will,
unless if in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue. Notwithstanding any agreement or document to the
contrary, MBL Life undertakes not to indemnify any Director or
Officer for any liability, the indemnification of which has been
determined to be prohibited under the Federal securities laws.
Item 29. Principal Underwriter.
(a) First Priority, is the Account's principal underwriter. First
Priority will also serve as principal underwriter for the
following registered investment companies:
MAP-Equity Fund, MBL Growth Fund, Inc., and MAP-Government Fund,
Inc., as well as MBL Variable Contract Account-7, a separate
account of MBL Life.
First Priority will serve as the investment adviser to MAP-
Government Fund, Inc. and MBL Variable Contract Account-7.
(b) Information regarding First Priority's officers and directors:
Name and Principal Positions and Offices
Business Address* with First Priority
William G. Clark Director, President
Frank D. Casciano Director, Vice President
and General Counsel
Robert T. Budwick Director, Vice President
and Chief Investment
Officer
Alan J. Bowers Director
Eugene J. Ciarkowski Director
Kathleen M. Koerber Director
Albert W. Leier Director, Vice President
and Treasurer
Judith C. Keilp Vice President
and Secretary
Christopher S. Auda Vice President,
Operations
James Switlyk Second Vice President
Marketing Support
Roger A. Vellekamp Assistant Secretary
* All of these Officers and Directors maintain a principal business
address at 520 Broad Street, Newark, New Jersey 07102.
(c) Not applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of
1940 and the rules thereunder are maintained at the offices of
the Depositor, 520 Broad Street, Newark, New Jersey 07102.
Item 31. Management Services.
Other than as set forth under the caption "Administration" in
the Prospectus constituting Part A of this Registration
Statement, and under "Services" in the Statement of Additional
Information constituting Part B, the Account is not a party to
any management-related service contract.
Item 32. Undertakings.
(a) Registrant undertakes to file a post-effective amendment to its
Securities Act of 1933 Registration Statement as frequently as
is necessary to ensure that the audited financial statements in
the registration statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be
accepted.
(b) Registrant undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a
space that an applicant can check to request a Statement of
Additional Information, or (2) a post card or similar written
communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional
Information, or (3) the entire text of the Statement of
Additional Information within the Prospectus.
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this form promptly upon written or oral request.
(d) Registrant undertakes to rely upon American Council of Life
Insurance (Ref. No. IP-6-88, pub. avail. November 28, 1988) (the
"Letter"), which permits restrictions on cash distributions to
Participants in retirement plans meeting the requirements of
Section 403(b) of the Internal Revenue Code of 1986, and
represents that the following provisions of the Letter have been
complied with:
(1) That Registrant has included appropriate disclosure regarding
the redemption restrictions imposed by Section 403(b)(11) in
this Registration Statement, including the Prospectus;
(2) That Registrant has included appropriate disclosure regarding
the redemption restrictions imposed by Section 403(b)(11) in all
sales literature used in connection with the offer of the
Contract;
(3) That the Account's Distributor has instructed sales
representatives, who solicit Participants to purchase the
Contract, specifically to bring the redemption restrictions
imposed by Section 403(b)(11) to the attention of potential
Participants;
(4) That Registrant has obtained from each Participant purchasing a
Section 403(b) Contract, prior to or at the time of purchase, a
signed statement acknowledging the Participant's understanding
of: (a) the restrictions on redemption imposed by Section
403(b)(11), and (b) the investment alternatives available under
the employer's Section 403(b) arrangement to which the
Participant may elect to transfer his or her Contract value.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Act of
1940, the Registrant has caused this Registration Statement to be signed
on its behalf, in the City of Newark, and State of New Jersey, on the 16
day of February, 1996
MBL VARIABLE CONTRACT ACCOUNT-2
(Registrant)
By: JUDITH C. KEILP
Judith C. Keilp, Counsel
MBL Life Assurance Corporation
By: MBL LIFE ASSURANCE CORPORATION
(Depositor)
By: FRANK D. CASCIANO
Frank D. Casciano
Executive Vice President,
General Counsel and Secretary
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and
on the dates indicated.
ALAN J. BOWERS Chief Executive Officer February 16, 1996
Alan J. Bowers Director, President
KENNETH A. WATSON Chief Financial Officer February 16, 1996
Kenneth A. Watson
ALBERT W. LEIER Chief Accounting Officer February 16, 1996
Albert W. Leier
Directors:
Elizabeth E. Randall
Sheldon Brooks*
Donald Bryan*
Harry D. Garber*
John Kerr*
Richard W. Klipstein*
Karen E. Mitchell
Robert F. Pellecchia
Felix Schirripa*
By: FRANK D. CASCIANO Date: February 16, 1996
Frank D. Casciano
Attorney-in-Fact
* Executed by Frank D. Casciano, Attorney-in-Fact, on behalf of those
indicated pursuant to the Powers of Attorney, filed herewith.
<PAGE>
EXHIBIT INDEX
Exhibit*
(13) - Schedules for computation of each
performance quotation.
(i) One-Year Performance.
(ii) Five-Year Performance.
(iii) Ten-Year Performance.
(17) - Powers of Attorney
* Page numbers inserted in manually signed copy only.
Item 24, Exhibit (b)(13)(i)
SCHEDULE OF COMPUTATION FOR PERFORMANCE QUOTATIONS
One-Year Period
Initial Enrollment Net
Payment - Fee = Purchase
Payments
$1,000 $0 $1,000
_______________________________________________________________________
Number of Unit Value Gross Annual Ending
Units x at = Surrender - Administration = Redemption
Purchased 12/31/95 Value Charge Value
11.548 $116.231 $1,342 $0 $1,342
TOTAL RETURN FORMULA:
P (1 = T) to the power of n = ERV
$1,000.00 (1 + 34.22%) to the power of 1 = 1,342
Where: P = a hypothetical initial payment (of $1,000) invested
on 6/30/94.
T = average annual total return assuming reinvestment
of dividends and capital gains distributions.
n = A number of years
ERV = ending redeemable value
Item 24, Exhibit (b)(13)(ii)
SCHEDULE OF COMPUTATION FOR PERFORMANCE QUOTATIONS
Five-Year Period
Initial Enrollment Net
Payment - Fee = Purchase
Payment
$1,000 $0 $1,000
______________________________________________________________________
<TABLE>
<CAPTION>
Number Unit Value Gross Annual Ending
of Units x at end of = Surrender - Administration = Redemption
Owned each year Value Charge Value
<S> <C> <C> <C> <C>
18.785 $ 65.668 $1,234 $0 $1,234
18.785 75.010 1,409 0 1,409
18.785 85.055 1,598 0 1,598
18.785 86.596 1,627 0 1,627
18.785 116.231 2,183 0 2,183
</TABLE>
TOTAL RETURN FORMULA:
P (1 = T) to the power of n = ERV
$1,000.00 (1 + 16.90%) to the power of 5 = 2,183
Where: P = a hypothetical initial payment (of $1,000) invested
on 12/31/90.
T = average annual total return assuming reinvestment
of dividends and capital gains distributions.
n = A number of years
ERV = ending redeemable value
Item 24, Exhibit (b)(13)(iii)
SCHEDULE OF COMPUTATION FOR PERFORMANCE QUOTATIONS
Ten-Year Period
Initial Enrollment Net Purchase
Payment - Fee = Payment
$1,000 $15 $985
_______________________________________________________________________
<TABLE>
<CAPTION>
Number Unit Value Gross Annual Ending
of Units x at end = Surrender - Administration = Redemption
Owned of each year Value Charge* Value
<S> <C> <C> <C> <C>
33.567 $ 35.483 $1,191 $10 $1,181
33.284 34.625 1,153 10 1,143
33.011 44.032 1,453 10 1,443
32.772 56.416 1,849 0 1,849
32.772 53.234 1,744 0 1,744
32.772 65.668 2,152 0 2,152
32.772 75.010 2,458 0 2,458
32.772 85.055 2,787 0 2,787
32.772 86.596 2,838 0 2,838
32.772 116.231 3,809 0 3,809
</TABLE>
TOTAL RETURN FORMULA:
P (1 = T) to the power of n = ERV
$1,000.00 (1 + 14.31%) to the power of 10 = 3,809
Where: P = a hypothetical initial payment (of $1,000) invested
on 12/31/85.
T = average annual total return assuming reinvestment
of dividends and capital gains distributions.
n = A number of years
ERV = ending redeemable value
* Represents an annual administration charge of $10.
For purposes of this example, the annual administration charge is
computed by reference to the actual aggregate annual administration
charges as a percentage of total assets held under the Contracts. The
administration charge was eliminated on January 1, 1989.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
SHELDON BROOKS Director January 30, 1996
Sheldon Brooks
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
DONALD BRYAN Director February 1, 1996
Donald Bryan
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
HARRY D. GARBER Director January 31, 1996
Harry D. Garber
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
JOHN C. KERR, JR. Director January 30, 1996
John C. Kerr, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
RICHARD W. KLIPSTEIN Director February 8, 1996
Richard W. Klipstein
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints Alan J. Bowers,
Frank D. Casciano, Kathleen M. Koerber, and Kenneth A. Watson,
his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the
Registration Statement and any and all amendments to the
Registration Statement for MBL Variable Contract Account-2 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Signature Title Date
FELIX SCHIRRIPA Director January 30, 1996
Felix Schirripa
