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 134, 130, 132, 133, 030, 032 AND 033
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
Non-Qualified (P)
----------------------------------------------
ASSETS Fund 134 Fund 130 Fund 132 Fund 133
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Daily Cash Accumulation Fund
(10,252 shares at net asset value of
$1.00 per share; cost $10,252)................$ 10,252
Oppenheimer Money Fund
(2,750,493 shares at net asset value of
$1.00 per share; cost $2,750,493)............. $ 2,750,493
Oppenheimer Capital Appreciation Fund
(81,245 shares at net asset value of
$34.21 per share; cost $994,038).............. $ 2,779,391
Oppenheimer High Income Fund
(69,039 shares at net asset value of
$10.63 per share; cost $627,601).............. $ 733,885
Oppenheimer Money Fund
(380,084 shares at net asset value of
$1.00 per share; cost $380,084)...............
Oppenheimer Capital Appreciation Fund
(90,857 shares at net asset value of
$34.21 per share; cost $1,172,559)............
Oppenheimer High Income Fund
(26,285 shares at net asset value of
$10.63 per share; cost $237,254)..............
Net receivable from Bankers Security for contract
charges and reserve transfers.................. - - 3,944 -
---------- ----------- ----------- -----------
10,252 2,750,493 2,783,335 733,885
LIABILITIES
Net payable to Bankers Security for contract
charges and reserve transfers.................. 31 2,988 - 329
---------- ----------- ----------- -----------
Net Assets $ 10,221 $ 2,747,505 $ 2,783,335 $ 733,556
========== =========== =========== ===========
Accumulation Units Outstanding 4,313 1,157,201 510,219 198,796
========== =========== =========== ===========
Accumulation Unit Value $ 2.37 $ 2.24 $ 5.36 $ 3.69
========== =========== =========== ===========
Qualified (Q)
----------------------------------- Combined
ASSETS Fund 030 Fund 032 Fund 033 P and Q
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Daily Cash Accumulation Fund
(10,252 shares at net asset value of
$1.00 per share; cost $10,252)................ $ 10,252
Oppenheimer Money Fund
(2,750,493 shares at net asset value of
$1.00 per share; cost $2,750,493)............. 2,750,493
Oppenheimer Capital Appreciation Fund
(81,245 shares at net asset value of
$34.21 per share; cost $994,038).............. 2,779,391
Oppenheimer High Income Fund
(69,039 shares at net asset value of
$10.63 per share; cost $627,601).............. 733,885
Oppenheimer Money Fund
(380,084 shares at net asset value of
$1.00 per share; cost $380,084)...............$ 380,084 380,084
Oppenheimer Capital Appreciation Fund
(90,857 shares at net asset value of
$34.21 per share; cost $1,172,559)............ $ 3,108,218 3,108,218
Oppenheimer High Income Fund
(26,285 shares at net asset value of
$10.63 per share; cost $237,254).............. $ 279,410 279,410
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 6,160 - 818 10,922
---------- ----------- ----------- -----------
386,244 3,108,218 280,228 10,052,655
LIABILITIES
Net payable to Bankers Security for contract
charges and reserve transfers.................. - 1,363 - 4,711
---------- ----------- ----------- -----------
Net Assets $ 386,244 $ 3,106,855 $ 280,228 $10,047,944
========== =========== =========== ===========
Accumulation Units Outstanding 194,092 645,916 82,908 2,793,445
========== =========== =========== ===========
Accumulation Unit Value $ 1.99 $ 4.81 $ 3.38
========== =========== ===========
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
Year Ended December 31, 1995
Non-Qualified (P)
----------------------------------------------------------------------------------
Fund 134 Fund 130 Fund 132 Fund 133
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income -
Reinvested dividends..........................$ 2,066 $ 158,068 $ 11,872 $ 70,655
Expenses -
Mortality and expense guarantee fees........... (393) (28,249) (24,063) (6,787)
---------- ----------- ----------- -----------
Net investment income (expense).................. 1,673 129,819 (12,191) 63,868
Net realized gain ............................... - - 16,672 4,306
Net unrealized gain.............................. - - 660,444 52,910
---------- ----------- ----------- -----------
Increase in net assets resulting from operations. 1,673 129,819 664,924 121,084
Net contracts purchased.......................... - 2,351 8,597 150
Transfers among funds, net....................... (79,842) (144,368) 198,864 25,308
Reserve transfers from Bankers Security.......... - 59,042 6,805 -
Payments to contract owners -
surrenders and other benefits.................. (41) (325,592) (230,019) (76,523)
---------- ----------- ----------- -----------
Net increase (decrease) in net assets............ (78,210) (278,748) 649,172 70,019
Net assets, beginning of year.................... 88,431 3,026,253 2,134,163 663,537
---------- ----------- ----------- -----------
Net assets, end of year.........................$ 10,221 $ 2,747,505 $ 2,783,335 $ 733,556
========== =========== =========== ===========
Qualified (Q)
----------------------------------- Combined
Fund 030 Fund 032 Fund 033 P and Q
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income -
Reinvested dividends..........................$ 28,164 $ 15,643 $ 29,728 $ 316,196
Expenses -
Mortality and expense guarantee fees........... (5,079) (30,429) (2,971) (97,971)
---------- ----------- ----------- -----------
Net investment income (expense).................. 23,085 (14,786) 26,757 218,225
Net realized gain ............................... - 367,032 2,425 390,435
Net unrealized gain.............................. - 495,509 21,371 1,230,234
---------- ----------- ----------- -----------
Increase in net assets resulting from operations. 23,085 847,755 50,553 1,838,894
Net contracts purchased.......................... 11,832 86,358 22,031 131,319
Transfers among funds, net....................... (11,924) 13,786 (1,862) (38)
Reserve transfers from Bankers Security.......... - - - 65,847
Payments to contract owners -
surrenders and other benefits.................. (188,093) (768,689) (48,289) (1,637,246)
---------- ----------- ----------- -----------
Net increase (decrease) in net assets............ (165,100) 179,210 22,433 398,776
Net assets, beginning of year.................... 551,344 2,927,645 257,795 9,649,168
---------- ----------- ----------- -----------
Net assets, end of year.........................$ 386,244 $ 3,106,855 $ 280,228 $10,047,944
========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS 134, 130, 132, 133, 030, 032 & 033
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
Year Ended December 31, 1994
Non-Qualified (P)
----------------------------------------------------------------------------------
Fund 134 Fund 130 Fund 132 Fund 133
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income -
Reinvested dividends..........................$ 2,249 $ 131,794 $ 350,833 $ 74,611
Expenses -
Mortality and expense guarantee fees........... (665) (33,351) (24,997) (8,760)
---------- ----------- ----------- -----------
Net investment income............................ 1,584 98,443 325,836 65,851
Net realized gain (loss)......................... - - 197,731 9,417
Net unrealized loss.............................. - - (822,343) (115,308)
---------- ----------- ----------- -----------
Increase (decrease) in net assets resulting from
operations..................................... 1,584 98,443 (298,776) (40,040)
Net contracts purchased.......................... - 1,101 7,967 13,799
Transfers among funds, net....................... 76,516 99,274 (103,752) (63,953)
Payments to contract owners -
surrenders and other benefits.................. (59) (761,092) (365,897) (12,025)
---------- ----------- ----------- -----------
Net increase (decrease) in net assets............ 78,041 (562,274) (760,458) (102,219)
Net assets, beginning of year.................... 10,390 3,588,527 2,894,621 765,756
---------- ----------- ----------- -----------
Net assets, end of year.........................$ 88,431 $ 3,026,253 $ 2,134,163 $ 663,537
========== =========== =========== ===========
Qualified (Q)
----------------------------------- Combined
Fund 030 Fund 032 Fund 033 P and Q
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income -
Reinvested dividends..........................$ 22,393 $ 423,443 $ 26,243 $ 1,031,566
Expenses -
Mortality and expense guarantee fees........... (5,807) (32,888) (3,142) (109,610)
---------- ----------- ----------- -----------
Net investment income............................ 16,586 390,555 23,101 921,956
Net realized gain (loss)......................... - (53,887) 1,986 155,247
Net unrealized loss.............................. - (669,536) (37,493) (1,644,680)
---------- ----------- ----------- -----------
Increase (decrease) in net assets resulting from
operations..................................... 16,586 (332,868) (12,406) (567,477)
Net contracts purchased.......................... 7,077 32,615 - 62,559
Transfers among funds, net....................... 17,045 (8,939) (8,133) 8,058
Payments to contract owners -
surrenders and other benefits.................. (133,351) (517,011) (66,955) (1,856,390)
---------- ----------- ----------- -----------
Net increase (decrease) in net assets............ (92,643) (826,203) (87,494) (2,353,250)
Net assets, beginning of year.................... 643,987 3,753,848 345,289 12,002,418
---------- ----------- ----------- -----------
Net assets, end of year.........................$ 551,344 $ 2,927,645 $ 257,795 $ 9,649,168
========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
Bankers Security Variable Annuity Funds P and Q for The Centennial Annuity Plan
(the "Separate Accounts") were established under the provisions of New York
insurance laws by Bankers Security Life Insurance Society ("Bankers Security")
in July 1980 (Fund 134), December 1981 (Fund 130) and December 1982 (Funds 132,
133, 030, 032, 033). 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.
Bankers Security ceased offering the Separate Account 134 contracts for sale in
September 1981, the date that Revenue Ruling 81-225 was announced by the
Internal Revenue Service. Contract owners of Separate Account 134 are subject
to current taxation on income from fund shares. Bankers Security encourages
contract owners to transfer their balances in this separate account to Separate
Accounts 130, 132 or 133 which are closed to new contract owners but which
continue to accept additional payments from existing contract owners.
Similarly, Separate Accounts 030, 032 and 033 are closed to new contract owners
but continue to accept incremental payments.
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 the beginning of year value and current
market value of investments owned is recorded as 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:
Cost of Shares Proceeds from Cost of Shares Proceeds from
Fund Acquired Shares Sold Fund Acquired Shares Sold
134 $ 2,066 $ 80,391 030 $ 34,333 $ 199,501
130 167,584 507,745 032 79,159 763,923
132 193,429 229,162 033 52,098 53,148
133 150,444 138,414
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.
Beginning in January 1982, contract owners of Bankers Security Variable Annuity
Funds 121, 122, 123, 124, 125, 126 and 134 who were adversely affected by
Internal Revenue Service Revenue Ruling 81-225 were able to exchange their
contracts for Bankers Security Variable Annuity Separate Account 130, 132 or
133 contracts. These contract owners may make such transfers without
incurring a charge or fee for transferring.
NOTE 4 - CHARGES AND TRANSFERS
Bankers Security deducts a daily charge equal to an annual rate of 1.0% of the
daily asset value of the Separate Accounts for mortality and expense risks
assumed by Bankers Security. Where applicable, premium taxes are charged.
The amount of the reserves for contracts in the distribution period is
determined by actuarial assumptions which meet statutory requirements. Gains
or 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 - 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 1986
134 $2.37 $2.28 $2.22 $2.18 $2.13 $2.03 $1.90 $1.76 $1.66 $1.59
130 2.24 2.15 2.09 2.04 1.98 1.89 1.76 1.63 1.53 1.45
132 5.36 4.09 4.46 3.54 3.10 2.03 2.46 1.95 1.74 1.54
133 3.69 3.09 3.23 2.58 2.21 1.67 1.61 1.55 1.35 1.26
030 1.99 1.91 1.86 1.82 1.77 1.68 1.57 1.45 1.36 1.29
032 4.81 3.66 4.00 3.18 2.78 1.82 2.21 1.75 1.56 1.37
033 3.38 2.83 2.96 2.36 2.02 1.52 1.47 1.41 1.24 1.16
<PAGE>
INDEPENDENT AUDITORS' REPORT
To Bankers Security Life Insurance Society and
Bankers Security Variable Annuity Funds P and Q for the Centennial
Annuity 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 Centennial Annuity 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 Centennial Annuity 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
