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Bankers National Life Insurance Company
Semiannual Report
to Contract Owners
June 30, 1999
Bankers National Variable Acoount B
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SEMIANNUAL REPORT TO CONTRACT OWNERS
TABLE OF CONTENTS
JUNE 30, 1999
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BANKERS NATIONAL VARIABLE ACCOUNT B PAGE
Statement of Assets and Liabilities as of June 30, 1999.................................................................. 1
Statements of Operations for the Six Months Ended June 30, 1999, and the Year Ended December 31, 1998.................... 2
Statements of Changes in Net Assets for the Six Months Ended June 30, 1999, and the Year Ended December 31, 1998......... 2
Notes to Financial Statements............................................................................................ 3
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Bankers National Variable Account B
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
(UNAUDITED)
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Net Asset
Value
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Assets:
Investments in portfolio shares (Note 2)
Balanced Portfolio, 146,674 shares, (cost - $1,867,826)........................................................ $ 2,115,693
Equity Portfolio, 311,666 shares, (cost - $6,147,477).......................................................... 7,454,029
Fixed Income Portfolio, 330 shares, (cost - $3,346)............................................................ 3,161
Government Securities Portfolio, 236,919 shares, (cost - $2,817,179)........................................... 2,675,217
Money Market Portfolio, 627,613 shares, (cost - $627,613)...................................................... 627,613
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Total assets............................................................................................... 12,875,713
Liabilities:
Amounts due to Bankers National Life Insurance Company......................................................... 36,552
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Net assets (Note 5)........................................................................................ $ 12,839,161
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Total Value
Units Unit Value of Units
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Net assets attributable to:
Contract owners' deferred annuity reserves:
Contracts issued prior to August 20, 1984:
Government Securities Portfolio................................................. 441.2 $ 30.256866 $ 13,350
Money Market Portfolio.......................................................... 87.7 20.353067 1,786
Contracts issued on or after August 20, 1984:
Balanced Portfolio.............................................................. 58,607.6 35.975337 2,108,430
Equity Portfolio................................................................ 89,350.9 83.110987 7,426,041
Fixed Income Portfolio.......................................................... 231.8 13.596175 3,151
Government Securities Portfolio................................................. 94,782.1 27.111438 2,569,678
Money Market Portfolio.......................................................... 34,161.1 18.262710 623,875
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Net assets attributable to contract owners' deferred annuity reserves...................................... 12,746,311
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Contract owners' annuity payment Reserves:
Equity Portfolio............................................................................................... 5,003
Government Securities Portfolio................................................................................ 87,847
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Net assets attributable to contract owners' annuity payment reserves......................................... 92,850
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Net assets............................................................................................... $ 12,839,161
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The accompanying notes are an integral part of these financial statements.
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Bankers National Variable Account B
STATEMENTS OF OPERATIONS
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Six months ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
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Investment income:
Dividends from investments in portfolio shares.................................................... $ 195,724 $ 1,013,985
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Expenses:
Mortality and expense risk fees................................................................... 81,392 161,782
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Net investment income........................................................................... 114,332 852,203
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Net realized gains (losses) and unrealized appreciation (depreciation) of investments in portfolio shares:
Net realized gains on sales of investments in portfolio shares.................................... 176,862 175,208
Net change in unrealized appreciation of investments in portfolio shares.......................... 451,344 325,739
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Net gains on investments in portfolio shares.................................................... 628,206 500,947
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Net increase in net assets from operations.................................................... $ 742,538 $ 1,353,150
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STATEMENTS OF CHANGES IN NET ASSETS
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Six months ended Year Ended
June 30, 1999 December 31,
(Unaudited) 1998
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Changes from operations:
Net investment income............................................................................. $ 114,332 $ 852,203
Net realized gains on sales of investments in portfolio shares.................................... 176,862 175,208
Net change in unrealized appreciation of investments in portfolio shares.......................... 451,344 325,739
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Net increase in net assets from operations...................................................... 742,538 1,353,150
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Changes from contract owners' transactions:
Net contract purchase payments.................................................................... 15,920 13,631
Contract redemptions.............................................................................. (1,367,518) (1,185,183)
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Net decrease in net assets from contract owners' transactions................................... (1,351,598) (1,171,552)
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Net increase (decrease) in net assets......................................................... (609,060) 181,598
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Net assets, beginning of period...................................................................... 13,448,221 13,266,623
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Net assets, end of period (Note 5)............................................................ $ 12,839,161 $ 13,448,221
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The accompanying notes are an integral part of these financial statements.
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Bankers National Variable Account B
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
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(1) GENERAL
Bankers National Variable Account B (the "Account") is registered under the
Investment Company Act of 1940, as amended, as a unit investment trust. The
Account was established on June 8, 1982, as a segregated investment account for
individual variable annuity contracts issued by Bankers National Life Insurance
Company (the "Company"). The operations of the Account are included in the
operations of the Company pursuant to the provisions of the Texas Insurance
Code. The Company is an indirect wholly owned subsidiary of Conseco, Inc., a
publicly-held specialized financial services holding company listed on the New
York Stock Exchange.
The Account invests solely in shares of the portfolios of Conseco Series
Trust (the "Trust"), a diversified, open-end management investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported increases and decreases in net assets from operations during the
reporting period. Actual results could differ from those estimates.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION, TRANSACTIONS, AND INCOME
Investments in portfolio shares are valued using the net asset value of the
respective portfolios of the Trust at the end of each New York Stock Exchange
business day. Investment share transactions are accounted for on a trade date
basis (the date the order to purchase or redeem shares is executed) and dividend
income is recorded on the ex-dividend date. The cost of investments in portfolio
shares sold is determined on a first-in, first-out basis. The Account does not
hold any investments which are restricted as to resale.
Net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments are allocated to the contracts on
each valuation date based on each contract's pro rata share of the assets of the
Account as of the beginning of the valuation date.
FEDERAL INCOME TAXES
No provision for federal income taxes has been made in the accompanying
financial statements because the operations of the Account are included in the
total operations of the Company, which is treated as a life insurance company
for federal income tax purposes under the Internal Revenue Code. Net investment
income and realized gains (losses) are retained in the Account and are not
taxable until received by the contract owner or beneficiary in the form of
annuity payments or other distributions.
ANNUITY RESERVES
Deferred annuity contract reserves are comprised of net contract purchase
payments less redemptions and benefits. These reserves are adjusted daily for
the net investment income and net realized gains (losses) and unrealized
appreciation (depreciation) on investments.
Annuity payment reserves for the contracts under which the contract owners
are receiving periodic retirement payments are computed according to the 1983
Group Annuity Mortality table. The assumed net investment rate is equal to the
assumed rate of accumulation. The annuity unit values for periodic retirement
payments are as follows:
June 30, December 31,
1999 1998
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Equity Portfolio...................................... $ 1.915 $ 1.768
Government Securities Portfolio....................... $ 1.123 $ 1.177
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(3) PURCHASES AND SALES OF INVESTMENTS IN PORTFOLIO SHARES
The aggregate costs of purchases of investments in portfolio shares for the
six months ended June 30, 1999, and the year ended December 31, 1998, were
$266,070 and $1,220,705 respectively. The aggregate proceeds from sales of
investments in portfolio shares for the six months ended June 30, 1999, and the
year ended December 31, 1998, were $1,505,923 and $1,406,528 respectively.
(4) DEDUCTIONS AND EXPENSES
Although periodic retirement payments to contract owners vary according to
the investment performance of the portfolios, such payments are not affected by
expense or mortality experience because the Company assumes the mortality risk
and the expense risk under the contracts.
The mortality risk assumed by the Company results from the life annuity
payment option in the contracts in which the Company agrees to make annuity
payments regardless of how long a particular annuitant or other payee lives. The
annuity payments are determined in accordance with annuity purchase rate
provisions established at the time the contracts are issued. Based on the
actuarial determination of expected mortality, the Company is required to fund
any deficiency in the annuity payment reserves from its general account assets.
The expense risk assumed by the Company is the risk that the deductions for
contract administrative charges and transfer processing fees may prove
insufficient to cover the actual administrative and transfer processing
expenses.
The Company deducts daily from the Account a fee, which is equal on an annual
basis to 1.25 percent (0.75 percent for those contracts issued prior to August
20, 1984) of the daily value of the total investments of the Account, for
assuming the mortality and expense risks. These fees were $81,392 and $161,782
for the six months ended June 30, 1999, and the year ended December 31, 1998,
respectively.
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Bankers National Variable Account B
NOTES TO FINANCIAL STATEMENTS--CONTINUED
JUNE 30, 1999
(UNAUDITED)
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(4) DEDUCTIONS AND EXPENSES (CONTINUED)
The Company does not deduct a sales charge from purchase payments received on
contracts issued after August 20, 1984. However, upon surrender, the Company,
with certain exceptions, deducts from the contract value a contingent deferred
sales charge equal to the lesser of: (a) 5.0 percent of the total of all
purchase payments made within 72 months prior to the date of the request for
surrender; or (b) 5.0 percent of the amount surrendered. No charge is made for
the portion of a surrender in a contract year that does not exceed 10.0 percent
of the net sum of purchase payments made more than one year prior to the date of
the surrender. A sales charge of 6.5 percent is deducted by the Company on
purchase payments received on contracts issued before August 20, 1984. There
were no sales charges for the six months ended June 30, 1999. Such sales charges
were $1,176 for the year ended December 31, 1998.
An annual contract administrative charge of $30 ($12 on Individual Retirement
Accounts or "IRAs") on contracts issued after August 20, 1984, and $36 ($12 on
IRAs) on contracts issued prior to August 20, 1984, is deducted in units from
each contract owner's account. Such charges were $5,507 and $10,716 for the six
months ended June 30, 1999, and the year ended December 31, 1998, respectively.
A transfer processing fee (currently at $5 and guaranteed not to exceed $15)
for each transfer between portfolios is deducted from the amount transferred.
These fees were $10 and $25 for the six months ended June 30, 1999, and the year
ended December 31, 1998, respectively.
(5) NET ASSETS
Net assets consisted of the following at June 30, 1999:
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Proceeds from sale of units since organization,
less proceeds of units redeemed.............................. $(14,830,439)
Undistributed net investment income............................. 24,339,289
Undistributed net realized gains on sales of investments ....... 1,918,039
Net unrealized appreciation of investments...................... 1,412,272
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Net assets................................................. $12,839,161
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BANKERS NATIONAL VARIABLE ACCOUNT B
SPONSOR
Bankers National Life Insurance Company - Carmel, Indiana.
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP - Indianapolis, Indiana.
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BANKERS NATIONAL LIFE INSURANCE COMPANY IS AN INDIRECT WHOLLY OWNED
SUBSIDIARY OF CONSECO, INC., A FINANCIAL SERVICES ORGANIZATION HEADQUARTERED
IN CARMEL, INDIANA. CONSECO, THROUGH ITS SUBSIDIARY COMPANIES, IS ONE OF
MIDDLE AMERICA'S LEADING SOURCES FOR INSURANCE, INVESTMENT AND LENDING
PRODUCTS, HELPING 12 MILLION CUSTOMERS STEP UP TO A BETTER, MORE SECURE FUTURE.
BANKERS NATIONAL LIFE INSURANCE COMPANY
11815 North Pennsylvania Street
Carmel, Indiana 46032
VA-1001 (8/99) 05960
(C) 1999 Bankers National Life Insurance Company
www.conseco.com
Insurance Investments Lending
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