A MESSAGE TO VARIABLE ANNUITY CONTRACT
OWNERS
The Stock Markets witnessed significant increases during 1995, with the
S&P 500 achieving a total return of 37.6% for the year, compared to a
total return of 1.2% for 1994. At the same time long term interest
rates have significantly declined since the beginning of the year.
At December 31, 1994, the 30 year treasury bond yielded 7.9%, compared
to a yield of 5.9% at December 31, 1995.
Short term rates are somewhat lower than a year ago, with the 3 month
Treasury Bill ending the year at 5.1% compared to 5.7% at the beginning
of the year.
The U.S. Gross Domestic Product for 1995 increased by nearly 3%.
Inflation remained low with the Consumer Price Index increasing by
approximately 2.6% this year, a slight reduction from 1994.
THE OUTLOOK. For 1996, we expect moderate economic growth and
continuing low inflation with interest rates remaining near current
levels. At the time of this report, macroeconomics indicators are
showing mixed signs. While the expansion is slowing, business profits
are expected to continue to improve, albeit at a slower rate than in
1995.
Respectfully,
Thomas Y. Moon
President
Bankers Security Life Insurance Society
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
Oppenheimer
--------------------------------------------------------------------
NON-QUALIFIED FUNDS - (P) Capital High Multiple Global
Money Appreciation Income Strategies Securities
ASSETS Fund 144 Fund 145 Fund 146 Fund 147 Fund 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 4,515,891 $ 21,969,901 $ 14,028,974 $ 21,576,180 $ 11,351,280
Net receivable from Bankers Security for contract
charges and reserve transfers.................. - - 853,029 - -
------------- ------------- ------------- ------------- -------------
4,515,891 21,969,901 14,882,003 21,576,180 11,351,280
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 59,946 200,805 - 23,005 61,495
------------- ------------- ------------- ------------- -------------
Net Assets $ 4,455,945 $ 21,769,096 $ 14,882,003 $ 21,553,175 $ 11,289,785
============= ============= ============= ============= =============
Accumulation Units Outstanding 2,852,045 8,372,729 5,723,847 9,941,909 7,628,233
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.49 $ 2.60 $ 2.60 $ 2.15 $ 1.48
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 4,515,891 642,207 1,319,753 1,482,899 756,752
Net Asset Value $ 1.00 $ 34.21 $ 10.63 $ 14.55 $ 15.00
Cost $ 4,515,891 $ 12,086,267 $ 12,244,685 $ 16,929,602 $ 8,458,704
Oppenheimer Alliance
----------------------------------------- ---------------------------
NON-QUALIFIED FUNDS - (P) Strategic Short-Term Growth and
Bond Bond Growth Multi-Market Income
ASSETS Fund 150 Fund 151 Fund 152 Fund 149 Fund 143
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 3,201,904 $ 33,993 $ 1,474,371 $ 660,340 $ 2,680,210
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 41,717 31,385 - - 14,174
------------- ------------- ------------- ------------- -------------
3,243,621 65,378 1,474,371 660,340 2,694,384
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 4,344 895 -
------------- ------------- ------------- ------------- -------------
Net Assets $ 3,243,621 $ 65,378 $ 1,470,027 $ 659,445 $ 2,694,384
============= ============= ============= ============= =============
Accumulation Units Outstanding 2,896,090 62,265 1,176,022 610,597 1,716,168
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.12 $ 1.05 $ 1.25 $ 1.08 $ 1.57
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 652,119 2,871 62,606 62,414 169,741
Net Asset Value $ 4.91 $ 11.84 $ 23.55 $ 10.58 $ 15.79
Cost $ 3,108,065 $ 33,597 $ 1,316,006 $ 747,186 $ 1,868,856
Fidelity
---------------------------------------------------------------------
NON-QUALIFIED FUNDS - (P) Investment Asset Equity Index
Grade Manager Income 500 Growth
ASSETS Fund 174 Fund 175 Fund 172 Fund 176 Fund 171
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 61,427 $ 186,259 $ 1,556,438 $ 468,796 $ 1,840,272
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 12 17 - - -
------------- ------------- ------------- ------------- -------------
61,439 186,276 1,556,438 468,796 1,840,272
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 308 16 191
------------- ------------- ------------- ------------- -------------
Net Assets $ 61,439 $ 186,276 $ 1,556,130 $ 468,780 $ 1,840,081
============= ============= ============= ============= =============
Accumulation Units Outstanding 57,961 167,816 1,330,026 400,667 1,600,070
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.06 $ 1.11 $ 1.17 $ 1.17 $ 1.15
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 4,922 11,796 80,770 6,192 63,023
Net Asset Value $ 12.48 $ 15.79 $ 19.27 $ 75.71 $ 29.20
Cost $ 59,162 $ 177,619 $ 1,448,643 $ 431,174 $ 1,873,746
</TABLE>
Northstar
---------------------------
NON-QUALIFIED FUNDS - (P) Income and High
Growth Yield Bond
ASSETS Fund 120 Fund 127
------------- -------------
Investments (see below)...........................$ 9,158 $ 25,059
Net receivable from Bankers Security for contract
charges and reserve transfers.................. - -
------------- -------------
9,158 25,059
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 3 73
------------- -------------
Net Assets $ 9,155 $ 24,986
============= =============
Accumulation Units Outstanding 8,477 24,739
============= =============
Accumulation Unit Value $ 1.08 $ 1.01
============= =============
Investments basis data:
Shares Owned 804 4,972
Net Asset Value $ 11.39 $ 5.04
Cost $ 9,052 $ 24,759
<TABLE>
Oppenheimer
---------------------------------------------------------------------
QUALIFIED FUNDS - (Q) Capital High Multiple Global
Money Appreciation Income Strategies Securities
ASSETS Fund 044 Fund 045 Fund 046 Fund 047 Fund 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 2,093,920 $ 24,638,487 $ 12,965,804 $ 31,002,573 $ 9,740,355
Net receivable from Bankers Security for contract
charges and reserve transfers................. 75,529 - - - -
------------- ------------- ------------- ------------- -------------
2,169,449 24,638,487 12,965,804 31,002,573 9,740,355
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - 1,488,152 257,049 290,120 88,592
------------- ------------- ------------- ------------- -------------
Net Assets $ 2,169,449 $ 23,150,335 $ 12,708,755 $ 30,712,453 $ 9,651,763
============= ============= ============= ============= =============
Accumulation Units Outstanding 1,475,816 8,254,376 4,795,757 14,609,651 6,517,492
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.47 $ 2.80 $ 2.65 $ 2.10 $ 1.48
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 2,093,920 720,213 1,219,737 2,130,761 649,357
Net Asset Value $ 1.00 $ 34.21 $ 10.63 $ 14.55 $ 15.00
Cost $ 2,093,920 $ 14,742,368 $ 11,534,191 $ 25,087,365 $ 7,395,113
Oppenheimer Alliance
---------------------------------------- ----------------------------
QUALIFIED FUNDS - (Q) Strategic Short-Term Growth and
Bond Bond Growth Multi-Market Income
ASSETS Fund 050 Fund 051 Fund 052 Fund 049 Fund 043
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 1,426,527 $ 74,959 $ 485,318 $ 243,837 $ 2,865,380
Net receivable from Bankers Security for contract
charges and reserve transfers................. - 118 468 - -
------------- ------------- ------------- ------------- -------------
1,426,527 75,077 485,786 243,837 2,865,380
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 68,822 - - 4,388 16,627
------------- ------------- ------------- ------------- -------------
Net Assets $ 1,357,705 $ 75,077 $ 485,786 $ 239,449 $ 2,848,753
============= ============= ============= ============= =============
Accumulation Units Outstanding 1,201,509 67,637 382,509 221,712 1,778,121
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.13 $ 1.11 $ 1.27 $ 1.08 $ 1.59
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 290,535 $ 6,331 20,608 23,047 181,468
Net Asset Value $ 4.91 $ 11.84 $ 23.55 $ 10.58 $ 15.79
Cost $ 1,371,771 $ 73,170 $ 428,900 $ 224,698 $ 1,977,328
Fidelity
---------------------------------------------------------------------
QUALIFIED FUNDS - (Q) Investment Asset Equity Index
Grade Manager Income 500 Growth
ASSETS Fund 074 Fund 075 Fund 072 Fund 076 Fund 071
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 5,940 $ 184,301 $ 736,326 $ 351,597 $ 1,068,749
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 70 656 825 586 802
------------- ------------- ------------- ------------- -------------
6,010 184,957 737,151 352,183 1,069,551
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - - - -
------------- ------------- ------------- ------------- -------------
Net Assets $ 6,010 $ 184,957 $ 737,151 $ 352,183 $ 1,069,551
============= ============= ============= ============= =============
Accumulation Units Outstanding 5,779 166,628 635,475 301,011 906,399
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.04 $ 1.11 $ 1.16 $ 1.17 $ 1.18
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 476 11,672 38,211 4,644 36,601
Net Asset Value $ 12.48 $ 15.79 $ 19.27 $ 75.71 $ 29.20
Cost $ 5,782 $ 173,612 $ 687,956 $ 322,576 $ 1,071,785
Northstar
---------------------------
QUALIFIED FUNDS - (Q) Income and High
Growth Yield Bond Combined
ASSETS Fund 020 Fund 027 (P & Q)
------------- ------------- -------------
<S> <C> <C> <C>
Investments (see below)...........................$ 44,205 $ 35,018 $ 173,603,749
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 605 138 1,020,131
------------- ------------- -------------
44,810 35,156 174,623,880
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 2,564,831
------------- ------------- -------------
Net Assets $ 44,810 $ 35,156 $ 172,059,049
============= ============= =============
Accumulation Units Outstanding 43,087 35,156 85,967,772
============= ============= =============
Accumulation Unit Value $ 1.04 $ 1.00
============= =============
Investments basis data:
Shares Owned 3,881 6,948
Net Asset Value $ 11.39 $ 5.04
Cost $ 43,498 $ 34,739
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1995
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
144 145 146 147 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 308,717 $ 95,215 $ 1,407,975 $ 1,803,482 $ 342,019
Expenses -
Mortality and expense guarantee fees............. (69,694) (230,596) (184,254) (286,370) (157,079)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 239,023 (135,381) 1,223,721 1,517,112 184,940
Net realized gain (loss)........................... - 306,187 90,363 397,552 (432,042)
Net unrealized gain (loss) ........................ - 4,985,498 1,157,816 2,394,473 361,987
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 239,023 5,156,304 2,471,900 4,309,137 114,885
Net contracts purchased............................ 681,182 1,265,872 747,847 1,058,369 713,226
Transfers among funds, net......................... (1,677,501) (2,081,250) 11,275 905,073 (3,212,686)
Reserve transfers from Bankers Security............ 62,214 - - 32,242 -
Payments to contract owners -
surrenders and other benefits.................... (2,338,436) (1,184,523) (4,104,406) (5,630,195) (1,235,437)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. (3,033,518) 3,156,403 (873,384) 674,626 (3,620,012)
Net assets, beginning of year...................... 7,489,463 18,612,693 15,755,387 20,878,549 14,909,797
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 4,455,945 $ 21,769,096 $ 14,882,003 $ 21,553,175 $ 11,289,785
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
150 151 152 149 143
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 135,731 $ 1,184 $ - $ - $ 41,930
Expenses -
Mortality and expense guarantee fees............. (18,635) (184) (7,948) (13,558) (28,188)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 117,096 1,000 (7,948) (13,558) 13,742
Net realized gain (loss)........................... 27 4 (4) 381 5,680
Net unrealized gain (loss) ........................ 93,839 396 158,365 58,090 624,379
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 210,962 1,400 150,413 44,913 643,801
Net contracts purchased............................ 253,733 61,001 550,732 12,698 210,540
Transfers among funds, net......................... 2,778,966 2,977 771,998 (446,422) 211,499
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... (40) - (3,116) (238,102) (248,664)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 3,243,621 65,378 1,470,027 (626,913) 817,176
Net assets, beginning of year...................... - - - 1,286,358 1,877,208
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 3,243,621 $ 65,378 $ 1,470,027 $ 659,445 $ 2,694,384
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
174 175 172 176 171
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ - $ - $ 11,881 $ - $ -
Expenses -
Mortality and expense guarantee fees............. (208) (476) (5,507) (1,816) (6,612)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... (208) (476) 6,374 (1,816) (6,612)
Net realized gain (loss)........................... - - (5) (21) (1,345)
Net unrealized gain (loss) ........................ 2,265 8,640 107,795 37,622 (33,474)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 2,057 8,164 114,164 35,785 (41,431)
Net contracts purchased............................ 34,319 127,865 776,410 311,444 546,943
Transfers among funds, net......................... 25,063 50,253 699,031 121,581 1,353,543
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... - (6) (33,475) (30) (18,974)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 61,439 186,276 1,556,130 468,780 1,840,081
Net assets, beginning of year...................... - - - - -
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 61,439 $ 186,276 $ 1,556,130 $ 468,780 $ 1,840,081
============= ============= ============= ============= =============
</TABLE>
NON-QUALIFIED FUNDS - (P) Fund Fund
120 127
------------- -------------
Income -
Reinvested dividends............................$ 341 $ 1,214
Expenses -
Mortality and expense guarantee fees............. (35) (86)
------------- -------------
Net investment income (expense).................... 306 1,128
Net realized gain (loss)........................... - -
Net unrealized gain (loss) ........................ 106 300
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 412 1,428
Net contracts purchased............................ 8,743 23,558
Transfers among funds, net......................... - -
Reserve transfers from Bankers Security............ - -
Payments to contract owners -
surrenders and other benefits.................... - -
------------- -------------
Net increase (decrease) in net assets.............. 9,155 24,986
Net assets, beginning of year...................... - -
------------- -------------
Net assets, end of year...........................$ 9,155 $ 24,986
============= =============
<TABLE>
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1994
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
144 145 146 147 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 341,002 $ 2,347,070 $ 1,226,382 $ 1,140,285 $ 235,425
Expenses -
Mortality and expense guarantee fees............. (113,899) (216,228) (180,288) (273,755) (181,855)
------------- ------------- ------------- ------------- -------------
Net investment income.............................. 227,103 2,130,842 1,046,094 866,530 53,570
Net realized gain (loss)........................... - (277,296) (88,139) (52,152) (279,966)
Net unrealized loss ............................... - (3,637,398) (1,566,200) (1,520,836) (1,241,239)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 227,103 (1,783,852) (608,245) (706,458) (1,467,635)
Net contracts purchased............................ 1,974,999 2,419,715 2,546,011 2,281,668 3,839,231
Transfers among funds, net......................... 800,298 (1,196,284) 84,209 (454,708) 995,699
Payments to contract owners -
surrenders and other benefits.................... (1,048,726) (1,164,447) (1,485,331) (1,780,219) (842,745)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 1,953,674 (1,724,868) 536,644 (659,717) 2,524,550
Net assets, beginning of year...................... 5,535,789 20,337,561 15,218,743 21,538,266 12,385,247
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 7,489,463 $ 18,612,693 $ 15,755,387 $ 20,878,549 $ 14,909,797
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund
149 143
Income - ------------- -------------
Reinvested dividends............................. $ 69,106 $ 41,582
Expenses -
Mortality and expense guarantee fees............. (21,089) (22,843)
------------- -------------
Net investment income.............................. 48,017 18,739
Net realized gain (loss)........................... 23,509 (2,100)
Net unrealized loss ............................... (178,660) (49,907)
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... (107,134) (33,268)
Net contracts purchased............................ 38,135 359,991
Transfers among funds, net......................... (178,128) 24,123
Payments to contract owners -
surrenders and other benefits.................... (305,573) (136,518)
------------- -------------
Net increase (decrease) in net assets.............. (552,700) 214,328
Net assets, beginning of year...................... 1,839,058 1,662,880
------------- -------------
Net assets, end of year............................ $ 1,286,358 $ 1,877,208
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
YEAR ENDED DECEMBER 31, 1995
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
044 045 046 047 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 178,527 $ 111,627 $ 1,280,419 $ 2,283,891 $ 282,598
Expenses -
Mortality and expense guarantee fees............. (40,392) (260,575) (154,887) (377,774) (134,920)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 138,135 (148,948) 1,125,532 1,906,117 147,678
Net realized gain (loss)........................... - (172,992) (51,148) 172,578 (436,789)
Net unrealized gain (loss) ........................ - 6,248,990 1,136,063 3,493,622 393,144
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 138,135 5,927,050 2,210,447 5,572,317 104,033
Net contracts purchased............................ 294,904 1,663,338 1,307,706 1,811,501 855,562
Transfers among funds, net......................... (1,479,439) (1,692,185) (504,794) 2,428,172 (2,924,746)
Reserve transfers from Bankers Security............ - 45 - 5,948 703
Payments to contract owners -
surrenders and other benefits.................... (555,713) (4,286,192) (2,517,478) (5,052,251) (1,540,007)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. (1,602,113) 1,612,056 495,881 4,765,687 (3,504,455)
Net assets, beginning of year...................... 3,771,562 21,538,279 12,212,874 25,946,766 13,156,218
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 2,169,449 $ 23,150,335 $ 12,708,755 $ 30,712,453 $ 9,651,763
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
050 051 052 049 043
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 69,702 $ 2,192 $ 668 $ - $ 45,965
Expenses -
Mortality and expense guarantee fees............. (10,439) (348) (2,781) (5,263) (30,062)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 59,263 1,844 (2,113) (5,263) 15,903
Net realized gain (loss)........................... 1,279 229 409 565 6,527
Net unrealized gain (loss) ........................ 54,756 1,789 56,418 21,618 679,794
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 115,298 3,862 54,714 16,920 702,224
Net contracts purchased............................ 68,595 31,462 153,426 7,296 248,183
Transfers among funds, net......................... 1,282,435 39,768 290,304 (91,928) 247,265
Reserve transfers from Bankers Security............ - - - - (552)
Payments to contract owners -
surrenders and other benefits.................... (108,623) (15) (12,658) (224,057) (367,438)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 1,357,705 75,077 485,786 (291,769) 829,682
Net assets, beginning of year...................... - - - 531,218 2,019,071
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 1,357,705 $ 75,077 $ 485,786 $ 239,449 $ 2,848,753
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
074 075 072 076 071
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ - $ - $ 6,510 $ - $ -
Expenses -
Mortality and expense guarantee fees............. (12) (717) (2,378) (1,294) (2,793)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... (12) (717) 4,132 (1,294) (2,793)
Net realized gain (loss)........................... - 9 58 129 (1,949)
Net unrealized gain (loss) ........................ 158 10,689 48,370 29,021 (3,036)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 146 9,981 52,560 27,856 (7,778)
Net contracts purchased............................ 5,226 90,952 313,279 101,983 262,907
Transfers among funds, net......................... 638 84,972 372,505 222,442 820,266
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... - (948) (1,193) (98) (5,844)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 6,010 184,957 737,151 352,183 1,069,551
Net assets, beginning of year...................... - - - - -
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 6,010 $ 184,957 $ 737,151 $ 352,183 $ 1,069,551
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Combined
020 027 (P & Q)
------------- ------------- -------------
<S> <C> <C> <C>
Income -
Reinvested dividends............................$ 1,622 $ 1,781 $ 8,415,191
Expenses -
Mortality and expense guarantee fees............. (171) (150) (2,036,202)
------------- ------------- -------------
Net investment income (expense).................... 1,451 1,631 6,378,989
Net realized gain (loss)........................... - - (114,318)
Net unrealized gain (loss) ........................ 707 279 22,130,479
------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 2,158 1,910 28,395,150
Net contracts purchased............................ 4,377 583 14,605,762
Transfers among funds, net......................... 38,292 32,678 (1,319,955)
Reserve transfers from Bankers Security............ - - 100,600
Payments to contract owners -
surrenders and other benefits.................... (17) (15) (29,707,951)
------------- ------------- -------------
Net increase (decrease) in net assets.............. 44,810 35,156 12,073,606
Net assets, beginning of year...................... - - 159,985,443
------------- ------------- -------------
Net assets, end of year...........................$ 44,810 $ 35,156 $ 172,059,049
============= ============= =============
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
YEAR ENDED DECEMBER 31, 1994
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
044 045 046 047 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 165,703 $ 2,369,636 $ 952,734 $ 1,423,396 $ 186,273
Expenses -
Mortality and expense guarantee fees............. (53,785) (252,668) (137,245) (337,351) (156,657)
------------- ------------- ------------- ------------- -------------
Net investment income.............................. 111,918 2,116,968 815,489 1,086,045 29,616
Net realized gain (loss)........................... - (226,803) (362,902) (81,626) (119,418)
Net unrealized loss ............................... - (3,663,040) (939,711) (1,892,482) (1,014,770)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 111,918 (1,772,875) (487,124) (888,063) (1,104,572)
Net contracts purchased............................ 1,706,431 4,222,899 1,906,540 3,350,261 4,775,010
Transfers among funds, net......................... (1,107,476) 1,254,822 1,016,356 (1,106,208) 873,452
Payments to contract owners -
surrenders and other benefits.................... (618,231) (1,854,124) (1,463,222) (2,753,609) (977,154)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 92,642 1,850,722 972,550 (1,397,619) 3,566,736
Net assets, beginning of year...................... 3,678,920 19,687,557 11,240,324 27,344,385 9,589,482
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 3,771,562 $ 21,538,279 $ 12,212,874 $ 25,946,766 $ 13,156,218
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund
049 043
------------- -------------
<S> <C> <C>
Income -
Reinvested dividends............................. $ 37,377 $ 43,298
Expenses -
Mortality and expense guarantee fees............. (10,564) (23,946)
------------- -------------
Net investment income.............................. 26,813 19,352
Net realized gain (loss)........................... 14,436 (5,091)
Net unrealized loss ............................... (94,532) (45,186)
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... (53,283) (30,925)
Net contracts purchased............................ 62,245 329,393
Transfers among funds, net......................... (387,337) 201,034
Payments to contract owners -
surrenders and other benefits.................... (92,253) (136,403)
------------- -------------
Net increase (decrease) in net assets.............. (470,628) 363,099
Net assets, beginning of year...................... 1,001,846 1,655,972
------------- -------------
Net assets, end of year............................ $ 531,218 $ 2,019,071
============= =============
QUALIFIED FUNDS - (Q) Combined
(P & Q)
-------------
<S> <C>
Income -
Reinvested dividends.............................. $ 10,579,269
Expenses -
Mortality and expense guarantee fees.............. (1,982,173)
-------------
Net investment income............................... 8,597,096
Net realized gain (loss)............................ (1,457,548)
Net unrealized loss ................................ (15,843,961)
-------------
Increase (decrease) in net assets resulting from
operations........................................ (8,704,413)
Net contracts purchased............................. 29,815,529
Transfers among funds, net.......................... 819,852
Payments to contract owners -
surrenders and other benefits..................... (14,658,555)
-------------
Net increase (decrease) in net assets............... 7,269,413
Net assets, beginning of year....................... 152,716,030
-------------
Net assets, end of year............................. $ 159,985,443
=============
See accompanying notes to financial statements.
</TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
Bankers Security Variable Annuity Funds P and Q for The USA Plan (the
"Separate Accounts") were established under the provisions of New York
insurance laws by Bankers Security Life Insurance Society ("Bankers Security")
in April 1987 (Funds 144, 145, 146, 147, 044, 045, 046 and 047), in November
1990 (Funds 148, 149, 048 and 049), in December 1990 (Fund 043), in January
1991 (Fund 143), in April 1995 (Funds 150, 151, 152, 050, 051, and 052), and
in May 1995 (Funds 174, 175, 172, 176, 171, 120, 127, 074, 075, 072, 076, 071,
020 and 027). The Separate Accounts are registered with the Securities and
Exchange Commission as a unit investment trust under the Investment Company
Act of 1940, as amended (the "Act"), and are used to fund certain benefits for
variable annuity policies issued by Bankers Security. The assets of the
Separate Accounts are invested in open-end diversified management investment
companies registered under the Act.
NOTE 2 - INVESTMENTS
Security transactions are recorded on the trade date at the purchase cost or
sales proceeds, as applicable. Investments owned are valued at closing market
quotations. The difference between beginning of year value and current market
value of investments owned is recorded as an unrealized gain (loss) on
investments. Dividends received are generally recorded as income on the record
date and are reinvested to purchase additional mutual fund shares. The
aggregate cost of shares acquired and the aggregate proceeds from shares sold
for the year ended December 31, 1995, were:
<TABLE>
Cost of Proceeds Cost of Proceeds Cost of Proceeds
Shares from Shares from Shares from
Fund Acquired Shares Sold Fund Acquired Shares Sold Fund Acquired Shares Sold
<S> <C> <C> <S> <C> <C> <S> <C> <C>
144 $9,508,913 $14,986,006 175 $ 177,619 $ - 050 $ 1,516,340 $ 145,848
145 8,360,599 8,013,824 172 1,491,320 42,672 051 87,233 14,292
146 6,895,733 7,500,788 176 435,133 3,938 052 494,496 66,005
147 8,282,284 10,960,144 171 1,889,683 14,592 049 22,263 433,686
148 3,147,993 7,866,686 120 9,052 - 043 586,569 453,027
150 3,119,035 10,997 127 24,759 - 074 5,782 -
151 34,772 1,179 044 4,836,039 7,674,735 075 174,406 803
152 1,466,668 150,658 045 3,236,969 6,689,888 072 695,759 7,861
149 - 685,181 046 4,437,272 3,906,275 076 332,613 10,166
143 505,789 355,775 047 8,056,231 7,158,728 071 1,137,984 64,250
174 59,162 - 048 3,242,073 7,168,353 020 43,498 -
027 34,739 -
NOTE 3 - TAXES
Bankers Security is taxed as a life insurance company under the Internal
Revenue Code of 1986, as amended (the "Code"). Since the Separate Accounts
are not separate entities from Bankers Security, and their operations form a
part of Bankers Security, they will not be taxed separately as a "regulated
investment company" under Sub-chapter M of the Code. Under existing Federal
income tax law, investment income of the Separate Accounts, to the extent that
it is applied to increase reserves under a contract, is not taxed and may be
compounded through reinvestment without additional tax to Bankers Security.
NOTE 4 - CHARGES AND TRANSFERS
Bankers Security does not deduct a sales charge from purchase payments made for
these contracts. All or a portion of the accumulated value may be withdrawn
during the accumulation period. However, purchase payments that are partially
or totally withdrawn from the contract prior to eight years from their date of
payment will be charged (with certain exceptions) a contingent deferred sales
charge of a percentage of the amount of the purchase payment withdrawn. No
such charge will be imposed against withdrawals of purchase payments held for
at least eight years. The withdrawn amounts shall be considered withdrawals
of purchase payments until the total of all purchase payments in the
accumulated value have been withdrawn. A contingent deferred sales charge will
not be made against that portion of withdrawals which are in excess of the
total of all purchase payments.
Within the period applicable to the contingent deferred sales charge for
purchase payments, the contract owner may surrender up to 10% of such purchase
payments held for at least one year, within stated guidelines, without paying a
contingent deferred sales charge. This "free withdrawal" amount is cumulative
to 20% of such purchase payments if no withdrawals are taken for a two year
period.
Bankers Security deducts a daily charge equal to an annual rate of 1.25% of the
daily asset value of the Separate Accounts for mortality and expense risks
assumed. In addition, on each contract anniversary, Bankers Security will
deduct an annual maintenance charge of $30 from the accumulated value of the
contract. Where applicable, premium taxes are charged.
The amount of reserves for contracts in the distribution period is determined
by actuarial assumptions which meet statutory requirements. Gains and losses
resulting from actual mortality experience, the full responsibility for which
is assumed by Bankers Security, are offset by transfers to, or from, Bankers
Security.
NOTE 5 - TRANSFERS AMONG FUNDS
Bankers Security established a fixed fund in 1989 to which contract owners in
the Separate Accounts could transfer all or part of their contract equity.
This fund is reported in the General Account of Bankers Security.
Transfer activity to/from the fixed annuity fund is included in Transfers
Among Funds in the Statements of Operations and Changes in Net Assets. Net
transfers to the fixed fund approximated $1,345,000 for the year ended December
31, 1995.
NOTE 6 - RELATED PARTIES
On January 17, 1995, Bankers Security became an indirect wholly-owned
subsidiary of ReliaStar Financial Corp. ("ReliaStar"), an insurance holding
company based in Minneapolis, Minnesota. In conjunction with this merger, in
May 1995, the Northstar Income and Growth, and High Yield Bond Funds were added
as investment options. These Funds are affiliates of Bankers Security
through ReliaStar.
NOTE 7 - SUPPLEMENTARY INFORMATION
Accumulation unit values for a unit of the funds outstanding at December 31,
were:
Fund 1995 1994 1993 1992 1991 1990 1989 1988 1987
144 $ 1.49 $ 1.42 $ 1.38 $ 1.36 $ 1.32 $ 1.26 $ 1.18 $ 1.10 $ 1.03
145 2.60 1.98 2.17 1.73 1.53 1.01 1.22 0.97 0.89
146 2.60 2.19 2.29 1.83 1.58 1.19 1.15 1.11 0.98
147 2.15 1.80 1.85 1.62 1.50 1.30 1.34 1.17 0.99
148 1.48 1.47 1.58 0.94 1.03 1.00 n/a n/a n/a
150 1.12 n/a n/a n/a n/a n/a n/a n/a n/a
151 1.05 n/a n/a n/a n/a n/a n/a n/a n/a
152 1.25 n/a n/a n/a n/a n/a n/a n/a n/a
149 1.08 1.03 1.11 1.06 1.06 1.00 n/a n/a n/a
143 1.57 1.17 1.19 1.08 1.02 n/a n/a n/a n/a
174 1.06 n/a n/a n/a n/a n/a n/a n/a n/a
175 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
172 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
176 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
171 1.15 n/a n/a n/a n/a n/a n/a n/a n/a
120 1.08 n/a n/a n/a n/a n/a n/a n/a n/a
127 1.01 n/a n/a n/a n/a n/a n/a n/a n/a
044 1.47 1.41 1.37 1.35 1.31 1.25 1.17 1.09 1.03
045 2.80 2.14 2.34 1.86 1.64 1.08 1.31 1.04 0.93
046 2.65 2.23 2.33 1.87 1.61 1.22 1.18 1.14 1.00
047 2.10 1.75 1.81 1.58 1.47 1.26 1.30 1.15 0.95
048 1.48 1.47 1.58 0.94 1.03 1.00 n/a n/a n/a
050 1.13 n/a n/a n/a n/a n/a n/a n/a n/a
051 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
052 1.27 n/a n/a n/a n/a n/a n/a n/a n/a
049 1.08 1.03 1.11 1.05 1.06 1.00 n/a n/a n/a
043 1.59 1.18 1.20 1.09 1.02 1.00 n/a n/a n/a
074 1.04 n/a n/a n/a n/a n/a n/a n/a n/a
075 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
072 1.16 n/a n/a n/a n/a n/a n/a n/a n/a
076 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
071 1.18 n/a n/a n/a n/a n/a n/a n/a n/a
020 1.04 n/a n/a n/a n/a n/a n/a n/a n/a
027 1.00 n/a n/a n/a n/a n/a n/a n/a n/a
<PAGE>
INDEPENDENT AUDITORS' REPORT
To Bankers Security Life Insurance Society and
Bankers Security Variable Annuity Funds P and Q for the USA Plan
Contract Owners:
We have audited the accompanying combined statement of assets and
liabilities of the Bankers Security Variable Annuity Funds P and Q for
the USA Plan as of December 31, 1995, and the related combined statement
of operations and changes in net assets for the year ended December 31,
1995. These financial statements are the responsibility of Bankers
Security Life Insurance Society management. Our responsibility is to
express an opinion on these financial statements based on our audits.
The statement of operations and changes in net assets for the year ended
December 31, 1994 and the accumulation unit values for each of the years
in the nine-year period ended December 31, 1994 were audited by other
auditors whose report dated February 9, 1995 expressed an unqualified
opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the combined
funds constituting the Bankers Security Variable Annuity Funds P and Q
for the USA Plan as of December 31, 1995, and the combined results of
operations and the changes in net assets for the year ended December 31,
1995, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Minneapolis, MN
February 12, 1996
</TABLE>
