<PAGE>
Registration No. 333-01363
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 3 / X /
----
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 14 / X /
----
(Check appropriate box or boxes.)
PANORAMA SEPARATE ACCOUNT
(Exact Name of Registrant)
Massachusetts Mutual Life Insurance Company
-------------------------------------------
(Name of Depositor)
1295 State Street, Springfield, Massachusetts 01111
---------------------------------------------------
(Address of Depositor's Principal Executive Offices)
1-800-234-5606
Depositor's Telephone Number, including Area Code
Thomas F. English, Esquire
--------------------------
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
/ / on pursuant to paragraph (a) of Rule 485.
- ----
/ / 60 days after filing pursuant to paragraph (a) of Rule 485.
- ----
/ / immediately after filing pursuant to paragraph (b) of Rule 485.
- ----
/ X / on May 1, 1998 pursuant to paragraph (b) of Rule 485.
- ----
STATEMENT PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of its variable
annuity contracts under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ended December 31, 1997 was filed on or about March 20, 1998.
1
<PAGE>
CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-4
N-4 Item Caption in Prospectus
- -------- ---------------------
1 ............................................. Cover Page
2 ............................................. Definitions
3 ............................................. Fee Table
4 ............................................. Condensed Financial
Information; Performance
Measures
5 ............................................. MassMutual and the Separate
Account
6 ............................................. Contract Charges;
Distribution
7 ............................................. Miscellaneous Provisions;
An Explanation of the
Contracts; Reservation of
Rights; Contract Owner's
Voting Rights
8 ............................................. The Annuity (Pay-Out)
Period
9 ............................................. The Death Benefit
10 ............................................ The Accumulation (Pay-In)
Period; Distribution
11 ............................................ Right to Return Contract;
Redemption Privilege
12 ............................................ Federal Tax Status
13 ............................................ None
14 ............................................ Additional Information
2
<PAGE>
Caption in Statement of
Additional Information
----------------------
15 ........................................... Cover Page
16 ........................................... Table of Contents
17 ........................................... General Information
Underwriting Arrangements
19 ........................................... Performance Measures
20 ........................................... Contract Value Calculations
21 ........................................... Reports of Independent
Accountants and Financial
Statements
3
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
4
<PAGE>
PANORAMA SEPARATE ACCOUNT
Individual Deferred and Immediate
Variable Annuity Contracts Issued by
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
1295 State Street, Springfield, Massachusetts
1-800-234-5606
------------
May 1, 1998
Qualified and Non-Qualified Annuity Plans
Individual deferred and immediate variable annuity contracts with single or
periodic purchase payments (the "Contracts") described in this prospectus
provide for accumulation of contract values and annuity payments on a fixed or
variable basis. The Contracts are designed for use by individuals on a
tax-qualified or non-tax qualified basis.
This Prospectus sets forth concise information about the Panorama Separate
Account (the "Account") that a prospective investor should know before
investing. Four Portfolios, each with a distinct investment objective, are
available. The Money Market and Income sub-accounts invest in the Money and Bond
Funds of Oppenheimer Variable Account Funds ("OVAF"), respectively. The Total
Return and Growth sub-accounts invest in the Total Return and Growth Portfolios
of Panorama Series Fund, Inc. ("Panorama Fund"), respectively. A Statement of
Additional Information concerning the Account has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. It is available
upon written or oral (1-800-343- 5629) request from the Annuity Service Center.
The Securities and Exchange Commission (SEC) maintains a Web site
(http://www.sec.gov) that contains the Statement of Additional Information,
material incorporated by reference and other information regarding registrants
that is filed with the SEC electronically.
---------
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE OPPENHEIMER
VARIABLE ACCOUNT FUNDS AND THE PANORAMA SERIES FUND, INC. WHICH CONTAIN FULL
DESCRIPTIONS OF THE RESPECTIVE FUND. THIS PROSPECTUS SHOULD BE READ AND RETAINED
FOR FUTURE REFERENCE.
---------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------
THE CONTRACTS DESCRIBED IN THIS PROSPECTUS ARE NOT DEPOSITS OR OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
1
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents
<S> <C>
Definitions..................................................................................................... 4
Summary......................................................................................................... 5
Panorama Fee Table
Immediate Contracts..................................................................................... 7
Panorama Fee Table
Deferred Contracts...................................................................................... 8
Panorama Separate Account Of Massachusetts Mutual Life Insurance Company
Condensed Financial Information................................................................................. 9
The Contracts And The Panorama Separate Account................................................................. 10
What are the Panorama contracts?........................................................................ 10
Who can buy these contracts?............................................................................ 11
Are there special considerations if I purchase a contract in
connection with an IRA?................................................................................ 11
What is the Panorama Separate Account and how does it operate?.......................................... 11
May I transfer assets among sub-accounts?............................................................... 12
May I make transfers between sub-accounts on a regularly
scheduled basis?....................................................................................... 12
Charges Under The Contracts..................................................................................... 13
How are charges determined under these contracts?....................................................... 13
How much are the deductions for sales charges under
deferred contracts?.................................................................................... 13
What are the deductions for sales charges under immediate contracts?.................................... 13
What do the sales charges cover?........................................................................ 14
What are the Annual Maintenance Charge and the Transaction Charge
and what do they cover?................................................................................ 14
Are all contracts subject to these charges?............................................................. 14
Are the sales charges ever waived?...................................................................... 14
What is the mortality and expense risk charge?.......................................................... 14
How much are the deductions for premium taxes on these contracts?....................................... 14
Operation Of The Contracts...................................................................................... 15
How is my Purchase Payment credited?.................................................................... 15
May I make changes in the amounts of my Purchase Payments?.............................................. 15
What happens if I fail to make Purchase Payments?....................................................... 15
May I assign or transfer my contract?................................................................... 15
How do I know what my deferred contract is worth?....................................................... 15
How is the Accumulation Unit value determined?.......................................................... 16
How are the underlying Portfolio shares valued?......................................................... 16
Payment Of Benefits............................................................................................. 16
What would my beneficiary receive as death proceeds?.................................................... 16
What contract options are available if the Annuitant ceases to be eligible under a retirement plan?..... 16
How can a deferred contract be redeemed or surrendered?................................................. 16
May I make withdrawals on a regularly scheduled basis?.................................................. 16
May I surrender my contract once life Annuity Payments have started?.................................... 17
Are there special restrictions if I participate in the Texas Optional Retirement Program?............... 17
Are there restrictions under Section 403(b) plans?...................................................... 17
Can payment of the redemption or Surrender Value ever be postponed?..................................... 17
What Annuity options are available under deferred contracts?............................................ 17
What is the minimum amount that I may use for an Annuity option?........................................ 17
What are the available Annuity options under deferred contracts?........................................ 18
Are there any other options available at retirement under deferred contracts?........................... 18
What are the available optional retirement forms under an immediate contract?........................... 18
How are Annuity Payments determined?.................................................................... 19
Massachusetts Mutual Life Insurance Company, MML Investors Services, Inc.
MML Distributors, LLC, And The Funds............................................................................ 19
Tell me about Massachusetts Mutual Life Insurance Company............................................... 19
Tell me about MML Investor Services, Inc................................................................ 19
Tell me about MML Distributors, LLC..................................................................... 19
Tell me about the Funds................................................................................. 20
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Performance Data................................................................................................ 20
How are yields and total returns calculated for the sub-accounts?....................................... 20
Standardized average annual total return................................................................ 20
Additional Performance Measures......................................................................... 20
Accumulation Unit Values - Annualized Returns........................................................... 20
Miscellaneous................................................................................................... 21
What are my voting rights?.............................................................................. 21
Tell me about the Administrator......................................................................... 21
Federal Tax Status.............................................................................................. 21
Introduction............................................................................................ 21
Tax Status Of MassMutual................................................................................ 21
Taxation Of Contracts In General................................................................................ 22
Penalty Taxes........................................................................................... 22
Annuity Distribution Rules of Section 72(S)............................................................. 22
Spousal Continuance..................................................................................... 22
Tax Withholding......................................................................................... 22
Tax Reporting........................................................................................... 23
Taxation of Qualified Plans, TSAs, IRAs and Roth IRAs................................................... 23
Taxation of Section 457 Plans........................................................................... 24
Are there any material legal proceedings affecting the Account?......................................... 24
IRA Disclosure Statement - Appendix A........................................................................... 25
Additional Information.......................................................................................... 28
</TABLE>
3
<PAGE>
Definitions
As used in this Prospectus the following terms have the indicated meanings:
Account: Panorama Separate Account.
Accumulated Value: The value of all Accumulation Units credited to a contract.
Accumulation Unit: An accounting method used to measure the value of a contract
before Annuity Payments begin.
Age: The age of any Contract Owner or Annuitant on his/her birthday nearest the
date for which age is being determined. For purposes of contract issuance, age
shall be considered that which was achieved on the Contract Owner's or
Annuitant's last birthday ("Attained Age").
Annuitant: The person on whose life the Annuity contract is issued.
Annuity: A contract promising a series of payments for life; for life with
either a minimum number of payments or a determinable unit refund benefit; for
the joint lifetime of the Annuitant and another person and thereafter during the
lifetime of the survivor (life Annuity Payments) or for a period not measured by
a life or lives (non-life Annuity Payments).
Annuity Payments: The periodic payments made to an Annuitant or other person.
Annuity Service Center: The office at which the administration of the Contract
occurs. Prior to July 1, 1998, the Service Center for the Contract will be
located at P.O. Box 13217, Kansas City, MO 64199 (800) 343-5629. Effective July
1, 1998, the Service Center will be relocated. After July 1, 1998, please direct
all requests and/or inquiries to: Annuity Service Center, H563, P.O. Box 9067,
Springfield, MA 01102-9067 (800) 343-5629.
Annuity Unit: An accounting method used to calculate the amount of variable
life Annuity Payments.
Contract Maturity Date: The date on which Annuity Payments are scheduled to
commence.
Contract Owner: See Owner.
Deferred Annuity: An Annuity in which Annuity Payments commence at some time
in the future.
Fixed Annuity: An Annuity providing for payments which remain fixed throughout
the payment period.
Funds: Panorama Separate Account invests in shares of various investment
Portfolios/Funds of two investment companies the Panorama Series Fund, Inc.
("Panorama Fund") the Oppenheimer Variable Account Funds ("OVAF"). Panorama Fund
and OVAF are diversified, open-end management investment companies. The
following four (4) Portfolios are available under the Contract: the Oppenheimer
Money Fund ("Money Portfolio") and the Oppenheimer Bond Fund ("Bond Portfolio")
of OVAF, and the Total Return Portfolio and the Growth Portfolio of the Panorama
Fund.
Immediate Annuity: An Annuity in which Annuity Payments commence immediately.
Owner: The owner specified in the contract. The owner may be the Annuitant, an
employer, a trust or any other entity.
Plan: A retirement plan under which benefits are to be provided pursuant to an
Annuity.
Portfolio: One of the classes of common stock of each Fund.
Purchase Payments: Amount paid to MassMutual by or on behalf of an Annuitant.
Surrender Value: The cash value payable to the Contract Owner upon termination
of the contract.
Systematic Withdrawals: The withdrawal of fixed dollar amounts from the
contract at regular intervals.
Valuation Date: A day on which the common stock of the Portfolios of the Funds
are valued.
Valuation Period: The period, consisting of one or more days, beginning with a
day following a Valuation Date and ending on the next succeeding Valuation Date.
Generally, any day on which the New York Stock Exchange ("NYSE") and
Massachusetts Mutual Life Insurance Company are open for business, except any
day on which trading on the NYSE is restricted due to the existence of an
emergency as determined by the SEC or other regulatory authority.
Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. New York time) on a Valuation Date. All actions which are to be
performed on a Valuation Date will be performed as of the Valuation Time.
Variable Annuity: An Annuity in which the sum available for payments or the
payments vary in amount in accordance with the investment experience of a
separate account.
4
<PAGE>
Summary
Contracts Offered
Individual deferred and immediate variable annuity contracts with single or
periodic purchase payments (the "Contracts") described in this prospectus
provide for accumulation of contract values and annuity payments on a fixed or
variable basis. The Contracts are designed for use by individuals on a
tax-qualified or non-tax qualified basis. The maximum issue age for deferred and
immediate contracts is Attained Age 75. The minimum initial purchase payment on
a deferred contract is $500. For an immediate contract the minimum purchase
payment is $10,000. From time to time the required minimum purchase payment may
be reduced. However, this minimum initial purchase payment may be waived in the
case of certain group-billed arrangements or Automatic Investment Plans, in
which case the minimum contribution will be $40 per month per participant. All
contracts allow participation in all of the sub-accounts of the Account.
Each sub-account of the Separate Account is invested in a corresponding
Portfolio. Four Portfolios are available and each has a different investment
policy. OppenheimerFunds, Inc., ("Oppenheimer") is the investment adviser to
each of the four Portfolios. Oppenheimer is an indirect subsidiary of
Massachusetts Mutual Life Insurance Company ("MassMutual"). Oppenheimer
continuously reviews and, from time to time, changes the portfolio holdings of
each of the Portfolios in pursuit of the objective of each Portfolio.
The investment objective of each available Portfolio is as follows:
Oppenheimer Money Fund - seeks the maximum current income from investments in
"money market" securities consistent with low capital risk and the maintenance
of liquidity. There can be no assurance that the Money Fund will maintain a
stable net asset value per share of $1, and the Money Fund is not insured or
guaranteed by the U.S. Government.
Oppenheimer Bond Fund - seeks a high level of current income by investing
primarily in debt securities. As a secondary investment objective, the Bond Fund
seeks capital growth when consistent with its primary objective.
Panorama Total Return Portfolio - to maximize the total investment return
(including capital appreciation and income) by allocating its assets among
stocks, corporate bonds, securities issued by the U.S. Government and its
instrumentalities, and money market instruments according to changing market
conditions.
Panorama Growth Portfolio - to achieve long-term growth of capital by investing
primarily in common stocks with low price-earnings ratios and better than
anticipated earnings.
For a more complete description of the investment objectives, underlying
securities and risk considerations of the Portfolios, please see the
accompanying prospectuses of the Panorama Fund and OVAF.
Sales Charges
No deductions are made from Purchase Payments under deferred contracts, except
for premium taxes where applicable. Rather, a deduction for sales charges, if
applicable, under deferred contracts is taken from the proceeds of redemptions
or amounts applied to provide variable Annuity Payments.
During the first ten (10) 12-month periods ("contract years") that a deferred
contract is in existence, the deduction applies against the total amount
redeemed in excess of 10% of the Accumulated Value of the contract as of the
close of business on December 31st of the prior calendar year. Sales charges
decrease over this ten-year period. If a redemption is made before the beginning
of the sixth contract year, a sales charge of 5% is assessed on the redemption
proceeds that are in excess of the 10% allowable amount. A 4% sales charge is
assessed in the sixth through the tenth contract year. No sales charges are
assessed after the tenth contract year. There are two circumstances where the
commencement of variable Annuity Payments gives rise to a sales charge. First,
amounts paid under the non-life variable Annuity option (Option E) are treated
as partial redemptions for purposes of deducting sales charges, as set forth
above. Second, if payments under a variable life Annuity option commence during
the first three (3) years after the contract is issued, a reduced sales charge
applies. The maximum sales charge, which would occur if the amount was paid in
the first year, is 3% of the amount applied to provide a variable payout. The
charges decrease to 2% in the second year, 1% in the third year, and are no
longer assessed after the end of the third year.
A deduction for sales charges under single payment immediate Annuity contracts
is taken from the Purchase Payment. A policy fee of $70 is also deducted from
the Purchase Payment, as are any applicable premium taxes. The deduction for
sales charges as a percentage of the amount remaining after deduction of the
Policy Fee and any premium taxes is 3% of the first $10,000, 2% of the next
$90,000, and 1% of amounts over $100,000.
To the extent sales expenses are not covered by these charges, they will be
recovered from MassMutual's surplus, which may include proceeds derived from
other charges described here.
Other Charges
There are other charges and deductions from the current value of the assets in
the Account. These charges include deductions for the mortality and expense
risk, the charge for
5
<PAGE>
the Annual Maintenance Fee on a deferred contract, and the possible imposition
of a Transaction Charge which is currently being waived under certain specified
conditions. (See "CHARGES UNDER THE CONTRACTS," for a detailed discussion of the
charges and deductions).
Redemption
Prior to the commencement of life Annuity Payments, a deferred contract may be
surrendered or redeemed in whole or in part by a written request from the Owner
to MassMutual. (See "PAYMENT OF BENEFITS - How can a deferred contract be
redeemed or surrendered").
Penalty Tax on Premature Distributions
An Owner who withdraws the proceeds from the Account may be subject to a 10%
penalty tax. (See "FEDERAL TAX STATUS").
Ten-Day Free Look Opportunity
Subject to applicable state laws the contract may be surrendered by the Owner
within ten (10) days (unless a different period is specified under applicable
law) after purchase without incurring a sales charge.
PANORAMA FEE TABLE
Immediate Contracts
Owner Transaction Expenses
Sales Load Imposed on Purchase............ 3%
Transfer Fee.............................. 0
One-Time Policy Fee.......................
(deducted from Purchase Payment) $70 per policy
Separate Account Annual Expenses
(as a % of average Account value)
Mortality and Expense Risk Fees........... 0.73%
-----
Total Separate Account Annual Expenses 0.73%
<TABLE>
<CAPTION>
Total
Money Bond Return Growth
Fund Fund Portfolio Portfolio
<S> <C> <C> <C> <C>
Portfolio Annual Expenses
(as a % of average net assets)
Management Fee............................. 0.44% 0.73% 0.54% 0.53%
Other Expenses............................. 0.04% 0.05% 0.01% 0.01%
---- ---- ---- ----
Total Portfolio Annual Expenses............ 0.48% 0.78% 0.55% 0.54%
==== ==== ==== ====
</TABLE>
The Portfolio expenses are actual expenses for each Portfolio for the fiscal
year ended December 31, 1997.
The purpose of this table is to assist the Owner in understanding the various
costs and expenses that an Owner will bear directly and indirectly. The table
reflects charges and expenses of the Account as well as the Portfolio for the
year ended December 31, 1997; future expenses may be higher or lower. For more
information on the charges described in this table, see "CHARGES UNDER THE
CONTRACTS", and the prospectus for the Funds which accompanies this Prospectus.
Premium taxes will be deducted from some contracts, in accordance with
applicable state law.
6
<PAGE>
PANORAMA FEE TABLE
Deferred Contracts
Owner Transaction Expenses
Sales Load Imposed on Purchases...............
5% for contract years 1-5,
Maximum Contingent Deferred Sales Load 4% years 6-10, and
(as a % of Policy Value Withdrawn) 0% thereafter
Surrender Fees................................ 0
Transaction Charge............................ $10
Annual Maintenance Charge..................... $40 per policy
Separate Account Annual Expenses
(as a % of average Account value)
Mortality and Expense Risk Fees............... 0.73%
----
Total Separate Account Annual Expenses........ 0.73%
<TABLE>
<CAPTION>
Total
Money Bond Return Growth
Fund Fund Portfolio Portfolio
Portfolio Annual Expenses
(as a % of average net assets)
<S> <C> <C> <C> <C>
Management Fee................................... 0.44% 0.73% 0.54% 0.53%
Other Expenses................................... 0.04% 0.05% 0.01% 0.01%
---- ---- ---- ----
Total Portfolio Annual Expenses.................. 0.48% 0.78% 0.55% 0.54%
</TABLE>
The Portfolio expenses are actual expenses for each Portfolio for the fiscal
year ended December 31, 1997.
The purpose of this table is to assist the Owner in understanding the various
costs and expenses that an Owner will bear directly and indirectly. The table
reflects charges and expenses of the Account as well as the Portfolio for the
year ended December 31, 1997, future expenses may be higher or lower. For more
information on the charges described in this table, see "CHARGES UNDER THE
CONTRACTS" and the prospectus for the Funds which accompanies this Prospectus.
Premium taxes will be deducted from some contracts, in accordance with
applicable state law.
Examples
An Owner of the contract would pay the following expenses on a $1,000
investment, assuming a 5% annual return on assets,
1. If you surrender your contract at the end of the applicable time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth Sub-Account......................................................... $66 $ 94 $130 $219
Money Market Sub-Account................................................... $65 $ 93 $127 $212
Income Sub-Account......................................................... $68 $102 $142 $244
Total Return Sub-Account................................................... $66 $ 95 $131 $220
2. If you annuitize your contract at the end of the applicable time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Growth Sub-Account......................................................... $45 $55 $76 $167
Money Market Sub-Account................................................... $45 $53 $73 $160
Income Sub-Account......................................................... $48 $63 $89 $194
Total Return Sub-Account................................................... $45 $56 $77 $168
3. If you do not surrender or annuitize your contract:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Growth Sub-Account......................................................... $14 $44 $76 $167
Money Market Sub-Account................................................... $14 $42 $73 $160
Income Sub-Account......................................................... $17 $52 $89 $194
Total Return Sub-Account................................................... $14 $44 $77 $168
</TABLE>
THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE
EXPENSES AND THE ACTUAL EXPENSES PAID MAY BE GREATER OR LESSER THAN THOSE SHOWN.
7
<PAGE>
PANORAMA SEPARATE ACCOUNT OF
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
CONDENSED FINANCIAL INFORMATION
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
Dec. 31, Dec. 31, Dec. 31, Dec.31, Dec. 31,
Sub-Account 1988 1989 1990 1991 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income
Qualified $ 2.200132 $ 2.487982 $ 2.615843 $ 3.072358 $ 3.267301
Non-Qualified 2.063561 2.333544 2.453465 2.881652 3.064477
Growth
Qualified 2.852420 3.845654 3.516048 4.800445 5.354570
Non-Qualified 2.559376 3.450568 3.154832 4.307275 4.804471
Money-Market
Qualified 1.663746 1.800207 1.929917 2.025824 2.078427
Non-Qualified 1.663746 1.800207 1.929917 2.025824 2.078427
Total Return
Qualified 2.178012 2.659125 2.652928 3.391910 3.710830
Non-Qualified 2.077204 2.536068 2.530171 3.234955 3.539112
<CAPTION>
Dec. 31, Dec. 31, Dec. 31, Dec 31, Dec 31,
Sub-Account 1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income
Qualified $ 3.636070 $ 3.465955 $ 4.078803 $ 4.166877 $ 4.519364
Non-Qualified 3.410353 3.250807 3.825614 3.908213 --
Growth
Qualified 6.441387 6.374619 8.706503 10.292858 12.912257
Non-Qualified 5.779640 5.719724 7.812045 9.235434 --
Money-Market
Qualified 2.118784 2.183169 2.287780 2.386915 2.495743
Non-Qualified 2.118784 2.183169 2.287780 2.386915 --
Total Return
Qualified 4.275618 4.183148 5.171950 5.641525 6.653722
Non-Qualified 4.077758 3.989561 4.932613 5.380456 --
</TABLE>
On November 28, 1997, the Company eliminated the distinction between the
Panorama qualified and nonqualified sub-accounts. From that date forward, all
Contracts in the accumulation phase have one unit value whose historical basis
is the qualified value. On November 28, 1997, units were reduced to maintain a
constant dollar value for nonqualified Contracts in the accumulation phase while
reflecting the higher unit value. The difference had been caused by a difference
in tax treatment that was eliminated in 1984.
As of December 31, 1997, a distinction remained for qualified and non-qualified
unit values for Contracts in the Annuity Payment phase.
ACCUMULATION UNITS OUTSTANDING
<TABLE>
<CAPTION>
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1988 1989 1990 1991 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income
Qualified 8,653,238 10,203,747 11,292,500 12,036,628 14,143,333
Non-Qualified 2,802,336 3,400,958 3,549,129 4,861,572 6,574,546
Growth
Qualified 8,982,917 9,141,764 9,509,994 10,641,800 12,433,926
Non-Qualified 2,302,616 2,206,724 2,625,671 3,012,101 4,143,844
Money Market
Qualified 23,605,954 28,045,051 33,570,489 29,261,142 22,097,803
Non-Qualified 6,857,008 8,100,278 9,916,368 8,410,761 6,486,440
Total Return
Qualified 66,722,916 66,070,313 68,016,583 70,304,994 79,608,133
Non-Qualified 18,528,604 17,350,244 18,906,950 20,117,223 26,163,888
<CAPTION>
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income
Qualified 15,073,893 13,871,625 12,557,687 10,741,696 14,108,226
Non-Qualified 7,908,608 7,418,128 6,881,942 6,038,091 21,099
Growth
Qualified 14,737,084 17,220,047 19,024,051 20,751,788 32,579,232
Non-Qualified 5,804,690 8,112,342 10,364,426 11,812,124 31,437
Money Market
Qualified 17,590,977 16,994,675 16,334,145 14,263,683 17,065,734
Non-Qualified 5,512,931 6,528,538 6,227,229 6,442,517 0
Total Return
Qualified 89,157,511 95,758,769 96,555,427 92,523,786 121,488,969
Non-Qualified 34,510,874 41,329,166 41,857,538 40,974,027 207,509
</TABLE>
Prior to June 1, 1996, the Condensed Financial Information reflected the Money
Market and Income sub-accounts investment in the Money Market and Income
Portfolios of Panorama Fund, respectively. On June 1, 1996, shares of OVAF Money
and Bond Funds were substituted for shares of Panorama Fund's Money Market and
Income Portfolios, respectively. Therefore, effective June 1, 1996, the
Condensed Financial Information reflects the Money Market and Income
sub-accounts investment in the Money and Bond Funds of OVAF, respectively.
Financial Statements
For financial statements and other information concerning the financial
condition of Panorama Separate Account and MassMutual, see the Statement of
Additional Information.
8
<PAGE>
The Contracts And The
Panorama Separate Account
What are the Panorama contracts?
The variable Annuity contracts offered through the Panorama Separate Account
(the "Account") are designed for use by individuals on a tax-qualified or
non-tax qualified basis. There are no deductions from Purchase Payments under a
deferred contract so the entire Purchase Payment is invested in the sub-account
selected. In a single premium immediate contract, the Purchase Payment net of
the sales charge is used to provide an immediate Annuity. Four Portfolios, each
with a distinct investment objective, are available. The Money Market
sub-account invests in the OVAF Money Fund, the Income sub-account invests in
the OVAF Bond Fund. The Total Return sub-account and the Growth sub-account
invest in the Total Return and Growth Portfolios of the Panorama Fund,
respectively. You pick the Portfolios you wish. You may use any or all of them.
You determine the percentage of your Purchase Payments that are put into each
Portfolio. You may transfer assets among the Portfolios. The result is an
investment program selected to meet your specific and, perhaps, changing
investment needs.
Shares of the Funds are also offered to certain separate accounts funding
variable life insurance policies offered by MassMutual and its wholly-owned
subsidiaries, MML Bay State Life Insurance Company and C.M. Life Insurance
Company, or by unaffiliated insurance companies. Although we do not anticipate
any inherent difficulties arising from the Fund offering its shares to issuers
of both variable annuities and variable life insurance policies, it is possible
that due to differences in tax treatment or other considerations, the interest
of owners of various contracts participating in the Funds might at some time be
in conflict. The Board of Directors of the Funds, the Funds' Investment Advisers
and the insurance companies whose separate accounts are investing in the Funds
are required to monitor events to identify any material conflicts that arise.
During the payout or Annuity phase of the contract, Annuity Payments will vary
in accordance with the investment performance of the Portfolios selected. The
contract allows the Owner to change Portfolios after Annuity Payments have
commenced. This means the Owner is not required to pick a set of investment
objectives in advance for the life of the contract.
There are some limitations on the frequency with which selections may be made
and there are administrative charges for transferring assets from one Portfolio
to another. These limitations are described below and in the Statement of
Additional Information. (See "CHARGES UNDER THE CONTRACTS".)
Annuity Payments under a deferred contract normally commence on a Contract
Maturity Date which you elect on your application. The earliest Contract
Maturity Date you may choose is presented in the table below.
Regardless of the Contract Maturity Date elected on your application, you may
choose to receive Annuity Payments at any time prior to the elected Contract
Maturity Date, or you may delay the commencement up to ten (10) years after that
date. Such a change must be made in writing prior to the Contract Maturity Date
elected on your application. The maximum Contract Maturity Date which may be
elected is Attained Age 80.
Annuitant's Age Earliest Contract
Plan Type at Issue Maturity Date
--------- --------------- -------------
Non-Qualified Under age 60 Age 65
Age 60 or older 5 years after the contract issue date
Qualified Under age 54 1/2 Age 59 1/2
Age 54 1/2 or older 5 years after the contract issue date
Who can buy these contracts?
The Contracts are designed: (1) for use in connection with tax-qualified plans,
including plans qualified under Sections 401(a) or 403(a) of the Code; plans
established by persons entitled to the benefits of the Self-Employed Individuals
Tax Retirement Act of 1962, as amended, known as "Keogh" or "H.R. 10 Plans"
("Qualified Plans"); annuity purchase plans ("TSAs") adopted by public school
systems and certain tax-exempt organizations according to Section 403(b) of the
Code; Individual Retirement Annuities ("IRAs") under Section 408 of the Code,
including Roth IRAs; and governmental plans as defined in Section 414(d)
of the Code, including employee pension plans established for employees by a
state, a political subdivision of a state, or an agency or instrumentality of
either a state or a political subdivision of a state, and certain eligible
deferred compensation plans of those and other tax-exempt entities as defined in
Section 457 of the Code; (2) for use in conjunction with retirement plans which
are not qualified under these sections; or (3) as a tax deferred investment.
Joint ownership of a contract is not permitted. The maximum issue age for
immediate and deferred contracts is age 75. The Purchase Payment for the
immediate contract may not exceed $1,000,000 without the prior approval of
MassMutual.
9
<PAGE>
Are there special considerations if I purchase a contract in connection with an
IRA?
The contract can be used to establish a contributory IRA, or a contribution may
represent a transfer or rollover from an existing IRA. Annual contributions can
also be made in conjunction with an IRA established to accept rollovers from
other types of tax-qualified plans, but all amounts will be commingled. As a
result, such an IRA would not be considered a conduit IRA, and no future
transfer or rollover could be made to any tax-qualified plan other than another
IRA.
If you wish to set up a spousal IRA, subject to the $500 minimum, you will need
to purchase a separate Panorama contract for the spousal IRA. After the Tax
Reform Act of 1986, the tax-deductibility of IRA contributions depends on
certain factors, such as participation in other tax-qualified plans. You should
consult a competent tax adviser for rules regarding deductibility. (See also the
"IRA DISCLOSURE STATEMENT" of the Appendix to this Prospectus for more
information.)
What is the Panorama Separate Account and how does it operate?
Panorama Separate Account was established on June 23, 1981, in accordance with
authorization by the Board of Directors of Connecticut Mutual Life Insurance
Company ("CML"). On February 29, 1996, CML merged with and into MassMutual and
MassMutual assumed ownership of the Account. The Account is the separate account
to which MassMutual allocates Purchase Payments (net of charges). The Account is
registered as a unit investment trust under the Investment Company Act of 1940,
as amended, (the "1940 Act").
Under Massachusetts law, the assets of the Account are held for the benefit of
the Owners of, and the persons entitled to payments under, the contracts. The
assets in the Account are not chargeable with liabilities arising out of other
businesses conducted by MassMutual. In addition, the assets of the Account will
not be affected by the income, gains or losses from assets in the general
account of MassMutual, nor by the investment performance of any of the other
separate accounts created by MassMutual. However, all obligations arising under
the contracts are general corporate obligations of MassMutual.
Purchase Payments are allocated to one or more sub-accounts of the Account. Each
sub-account is invested exclusively in the assets of one of the Portfolios of
the Panorama Fund or OVAF. MassMutual does not guarantee the investment results
of the sub-accounts or of any Portfolio. There is no assurance that the value of
a contract during the years prior to the commencement of Annuity Payments, or
the aggregate amount of the variable Annuity Payments, will equal the total of
Purchase Payments made under the contract. Since each Portfolio has different
investment objectives, each is subject to different risks. These risks are more
fully described in the accompanying prospectuses of the Panorama Fund and OVAF.
This assumption of investment risk by the Owner of a contract is the chief
difference between this type of Annuity (a variable Annuity) and a fixed
Annuity, where MassMutual places Purchase Payments in its general account and
guarantees the investment results.
Since the contract may not be surrendered once variable Annuity Payments
commence under a life Annuity, investment must be carefully considered prior to
the purchase of an immediate Annuity or the election of a variable Annuity
payout under a deferred Annuity.
MassMutual reserves the right, subject to applicable law, to substitute the
shares of any other registered investment company for the shares of any
Portfolio held in a sub-account of the Account, to offer additional sub-accounts
with differing investment objectives, to operate the Account as a different form
of registered investment company or unregistered entity, or to transfer
contracts to a different separate account. Current law may require notification
to the contract holders of any such change or substitution, and approval of the
Securities and Exchange Commission.
May I transfer assets among sub-accounts?
Yes, you may transfer the values credited to your contract in one or more
sub-accounts to one or more other sub-accounts. The transfer must be requested
using the Notification of Change Authorization form or by telephone after
completing the Panorama Telephone Authorization form. These forms are available
from your registered representative or from the Annuity Service Center, and must
be signed by the Owner.
By completing the Panorama Telephone Authorization form the Owner and, if
authorized by the Owner, the Annuitant, may request transfers of contract values
among the available sub-accounts of the Account, and changes in the allocation
of future Purchase Payments (but only in combination with a transfer). To effect
these changes, call the Annuity Service Center, between the hours of 8:30 a.m.
and 4:00 p.m., Eastern Time. Not all states permit telephone transfers.
The Annuity Service Center will use the social security number or tax
identification number of the Owner or of the Annuitant as a personal
identification code. All telephone requests must include the personal
identification code and will be recorded on voice recorder equipment. The
Annuity Service Center will honor telephone requests believed to be authentic,
and will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, but
10
<PAGE>
neither the Account nor the Annuity Service Center is responsible for
determining the authenticity of such calls, nor will either be liable for any
loss, cost, expense or liability for acting in accordance with such instructions
believed to be genuine. MassMutual may, however, be liable for any losses due to
unauthorized or fraudulent telephone transactions if it, in fact, does not
employ such reasonable procedures to confirm the genuineness of telephone
instructions given.
Telephone requests must be received at the Annuity Service Center no later than
4:00 p.m., Eastern Time, to assure same-day pricing. Telephone requests received
at the Annuity Service Center after that time will be processed on the next
Valuation Date. Telephone requests will not be accepted at MassMutual at any
time. The ability to transfer among sub-accounts by telephone may be
discontinued at any time.
Transfer requests prior to the Contract Maturity Date are generally subject to a
$10 charge for each sub-account from which funds are withdrawn. A certain number
of transfers may not be subject to this charge. (See "Are all contracts subject
to these charges?") Only one transfer request per calendar year may be made
after the life Annuity commencement date. There is no limit on the number of
transfers which may be made during the accumulation period or during a period in
which non-life Annuity Payments are being made.
Transfers between sub-accounts during the accumulation period are based on the
Accumulated Values on the Valuation Date coincident with or next following the
date the transfer instructions are received at the Annuity Service Center.
May I make transfers between sub-accounts on a regularly scheduled basis?
Yes. The Contract Owner may direct the transfer of fixed dollar amounts at
regular intervals from any one sub-account to one or more other sub-account(s).
Transfers must be at least $100 per transferee sub-account. This election is
called Dollar Cost Averaging ("DCA").
Upon written request, a Contract Owner may elect DCA to begin at any time prior
to the Contract Maturity Date. There is currently no charge for DCA. However,
MassMutual reserves the right to charge for DCA in the future. A Contract Owner
may not simultaneously participate in both DCA and Systematic Withdrawals or
Option E Specified Payments for a Variable Period. (See "May I make withdrawals
on a regularly scheduled basis?")
DCA will begin when a properly completed written request from the Contract Owner
is received by MassMutual at least five (5) business days prior to the transfer
start date selected by the Contract Owner. If the DCA start date is less than
five (5) days after the date the written request is received by MassMutual,
MassMutual may defer the DCA start date for one month. If no start date has been
selected, MassMutual will automatically start DCA within five (5) business days
after the written request is received.
DCA changes may only be made by written request terminating the existing DCA,
along with a written request providing new DCA elections. DCA will terminate
when any of the following occurs:
(1) the number of designated transfers has been completed;
(2) the value of the sub-account is insufficient to complete the next transfer;
(3) written request from the Contract Owner is received at least five (5)
business days prior to the next transfer date;
(4) on the Contract Maturity Date; or
(5) the contract is terminated.
Except as otherwise provided, DCA is subject to the transfer
provisions of the contract. (See "May I transfer assets
among sub-accounts?")
11
<PAGE>
Charges Under The Contracts
How are charges determined under these contracts?
The charges under the Contract offered by this Prospectus are assessed in
various ways. Listed below are the charges and the source of payment for each
charge.
Charges Sources
------- -------
Sales charges on deferred contracts Payout proceeds
(These charges diminish over time.)
Sales charge on immediate contracts Purchase Payment
Mortality and expense risk charges Daily charge to each sub-account
Annual Maintenance Charge on deferred Deduction from the Accumulated
contracts Value of each contract
Policy fee on immediate contracts Purchase Payment
Transaction charge on deferred contracts Deducted from certain partial
Premium taxes proceeds redemptions and certain transfers
Purchase Payments or payout
(Surrender or at Maturity Date)
In addition, the Portfolios in which the sub-accounts are invested are subject
to charges for investment advisory services and other expenses. (See the
accompanying Panorama Fund and OVAF prospectuses for a discussion of these
fees.)
How much are the deductions for sales charges under deferred contracts?
During the first ten (10) contract years that a deferred contract is in
existence, a sales charge will be applied to any redemption amount in excess of
10% of the closing contract value as of December 31st of the previous year. The
deduction for sales charges, expressed as a percentage of the amount redeemed in
excess of the 10% allowable amount (which will be zero for the remainder of the
calendar year during which the first Purchase Payment is received), and after
any Transaction Charge or Annual Maintenance Charge, is as follows:
Contract Years Deduction
-------------- ---------
1-5......................................... 5%
6-10........................................ 4%
11 and over................................. 0%
In addition, there are two circumstances under which the commencement of Annuity
Payments gives rise to a sales charge. First, amounts paid under the non-life
Variable Annuity option (See "Option E" on page 18) are treated as partial
redemptions for purposes of deducting sales charges, as set forth above. Second,
if payments under a variable life Annuity option commence during the first three
(3) years after the contract is issued, a reduced sales charge applies. This
deduction, expressed as a percentage of the amount applied to provide for
payments, is as follows:
Years Deduction
----- ---------
1..................................... 3%
2..................................... 2%
3..................................... 1%
4 and over............................ 0%
There is no sales charge on redemptions made after the Contract Maturity Date
elected on your application. (See "What are the Panorama contracts")
No sales charge will be imposed on the redemption of "excess contributions" to a
plan qualifying for special income tax treatment ("Qualified Plan"), TSAs or
IRAs. "Excess contributions" (including excess aggregate contributions) will be
defined as provided in the Internal Revenue Code and applicable regulations.
12
<PAGE>
What are the deductions for sales charges
under immediate contracts?
The deduction for sales charges under an immediate contract as a percentage of
the Purchase Payment remaining (after the policy fee of $70) is 3% of the
Purchase Payment up to $10,000, 2% of the next $90,000 of the Purchase Payment,
and 1% of any Purchase Payment over $100,000. On the minimum $10,000 Purchase
Payment, the sales charge of 3% plus the policy fee of $70 is 3.83% of the net
amount invested.
What do the sales charges cover?
The sales charges are designed to cover the commissions payable to the
registered representatives who sell the contracts, in addition to certain costs
allocated to the promotion of sales of the contract.
What are the Annual Maintenance Charge and the Transaction Charge and what do
they cover?
The Annual Maintenance Charge (currently $40) is designed to offset the
administrative costs attributable to deferred contracts, including providing
Owners with periodic reports and other communications, as well as maintaining
contract holder records. It is deducted each contract year, or portion thereof,
that a contract is outstanding.
The Transaction Charge (currently $10) is designed to offset the costs of
processing requests for transfers of the Accumulated Value of a contract among
sub-accounts during the accumulation period, and requests for partial
redemptions.
The Annual Maintenance Charge and the Transaction Charge may be increased to
amounts not in excess of $60 and $20, respectively. The Transaction Charge with
respect to a partial redemption may not be increased without approval of the
Securities and Exchange Commission. These charges are designed not to exceed the
actual expenses incurred in administering the contracts.
Are all contracts subject to these charges?
All deferred contracts are subject to the Annual Maintenance Charge and the
Transaction Charge prior to the commencement of Annuity Payments. These charges
do not apply to immediate contracts or to deferred contracts after the date that
Annuity Payments begin. The Transaction Charge is currently being waived for up
to four (4) sub-account withdrawals made in conjunction with transfers, and one
sub-account withdrawal made in conjunction with a partial redemption in any one
calendar year. Annuity Payments made under the non-life Annuity option are not
treated as partial redemptions for purposes of this charge.
Proceeds of individual variable annuity contracts, or accumulation annuity
contracts issued by MassMutual, which were previously held by, or for the
benefit of, the Contract Owner or Annuitant, may not be subject to sales
charges.
Also, the net proceeds of a surrender of a contract may be reinvested without
being subject to further sales charges within a limited period of time after
surrender. Please see the Statement of Additional Information for a further
discussion of the reinvestment privilege.
Are the sales charges ever waived?
Until April 30, 1999, no sales charge will be imposed upon redemption of a
Contract where the proceeds of such redemption are applied to the purchase of a
new MassMutual group annuity contract. This does not eliminate applicable
charges under the particular group contract, and upon surrender of the group
contract, charges may apply.
What is the mortality and expense risk charge?
MassMutual has set out certain life Annuity tables in each deferred contract,
and promises to continue to make Annuity Payments, determined according to those
tables and other provisions contained in the contract, regardless of how long
the Annuitant lives and regardless of how long all Annuitants as a group live.
The same promise is made to Annuitants in immediate contracts regarding the
table upon which their payments are based. This assures you, as Annuitant, that
neither your own longevity nor an improvement in life expectancy generally will
have any adverse effect on the Annuity Payments received under the contract, and
relieves you from the risk of outliving monies accumulated for retirement. It
transfers that risk to MassMutual. This is termed the mortality risk. In
addition, MassMutual assumes the risk that the maximum charges permitted under
the contract may be insufficient to cover the actual costs incurred by
MassMutual for providing administrative services to the Account and to the
Contract Owners and Annuitants, or to cover actual costs incurred by MML
Distributors or MML Investors Services, Inc. for distribution expenses.
For assuming all of these risks, MassMutual makes a daily charge equal to .002%
(.73% on an annual basis) of the value of the assets in the Account attributable
to the contracts. (Approximately .13% annually may be viewed as covering the
mortality risk and .60% annually for the expense risk, which includes the risk
of a shortfall in meeting distribution expenses.) If this charge is insufficient
to cover the actual cost of the mortality and expense risk, the loss will fall
on MassMutual. Conversely, if the charge proves more than sufficient, any excess
would be retained by MassMutual.
Further information concerning charges under the contract is contained in the
Statement of Additional Information.
13
<PAGE>
How much are the deductions for premium taxes on these contracts?
Deductions for premium taxes payable on contracts issued to residents of certain
states range from 0% to 3.5% of the purchase price of the contract. MassMutual
may pay premium taxes in connection with Purchase Payments under the contract.
Depending upon applicable state law, MassMutual will deduct the premium taxes
paid with respect to a particular contract from the Purchase Payments, from the
Accumulated Value on the Contract Maturity Date (thus reducing the Accumulated
Value), or upon the full surrender of a contract.
Operation Of The Contracts
How is my Purchase Payment credited?
The balance of each Purchase Payment remaining after the deduction of any
applicable premium taxes (and sales charges in the case of immediate contracts)
is credited to your contract as of the Valuation Date on which the payment is
received in good order, unless it is received after the earlier of 4:00 pm or
the close of business on the New York Stock Exchange. In that case it will be
credited to your contract on the next Valuation Date. Amounts are credited to
the sub-accounts(s) elected by you. The election may be changed at any time in
writing, and the change will be effective when received at the Annuity Service
Center in good order. (See "May I transfer assets among sub-accounts", for
circumstances under which telephone requests will be honored.)
In a deferred contract, the number of Accumulation Units to be credited is
determined by dividing the net Purchase Payment being credited to each
sub-account by the value of an Accumulation Unit in that sub-account on that
date. (See "How is the Accumulation Unit value determined".)
In an immediate contract, the number of Annuity Units to be credited is
determined by first multiplying the net Purchase Payment credited to each
sub-account, as of the date of issue, by the Annuity purchase rate. This product
is then divided by the value of an Annuity Unit in that sub-account on the date
of issue to determine the number of Annuity Units in each sub-account on which
payments will be based. (See the Statement of Additional Information for a more
complete description of this procedure.)
No funds are invested until the effective date of your contract. Therefore, if
your contract has not been issued on the date your Purchase Payment is received,
your Purchase Payment will be credited in the manner described above, using the
issue date as the Valuation Date. Ordinarily your contract will be issued within
two (2) business days of the date your application is received. If your contract
cannot be so issued, you will be notified of the reasons. If you at that time so
authorize, your Purchase Payment will be held until the contract can be issued.
If you do not provide such authorization, the Purchase Payment will be refunded
after five (5) business days.
May I make changes in the amounts of my Purchase Payments?
Yes. Subject to the provisions of any plan to which your contract may be
subject, the amount of Purchase Payments under a periodic Purchase Payment
deferred contract may be increased in any year to an amount not in excess of
twice the total Purchase Payments made in the first contract year, or decreased
to an amount of not less than $10 on any date a Purchase Payment is made.
Purchase Payments should be made payable to Massachusetts Mutual Life Insurance
Company and sent to the Annuity Service Center at the address given in the
Definitions section of this Prospectus. Purchase Payments in excess of the
previously described limit may be made, however, with the consent of MassMutual.
MassMutual's current administrative practice is not to accept cumulative
Purchase Payments in excess of $1 million dollars without prior Home Office
approval. Acceptance of such excess payment shall not be construed as a waiver
by MassMutual of its right to restrict or deny such excess Purchase Payments in
the future.
What happens if I fail to make Purchase Payments?
You may discontinue Purchase Payments under a periodic Purchase Payment
contract, and unless surrendered or otherwise reduced to zero value by
redemptions, the contract shall continue in force as a paid-up Annuity contract.
The Annual Maintenance Fee will continue to be charged. Additional periodic (one
or more) Purchase Payments may be made within a three-year period from receipt
of the last Purchase Payment, or at the discretion of the principal underwriter,
at any time thereafter; but in any event any such Purchase Payment must be
received prior to the commencement of Annuity Payments.
May I assign or transfer my contract?
If your contract does not have an endorsement limiting transferability, it may
be assigned or transferred according to its terms. Contracts issued under
tax-qualified plans ordinarily are required to have an endorsement limiting
transferability. A transfer of ownership may result in certain adverse tax
consequences to the Contract Owner that are not discussed herein. The Contract
Owner contemplating any such transfer or assignment of a contract should contact
a competent tax adviser with respect to the potential effects of such a
transaction.
14
<PAGE>
How do I know what my deferred contract is worth?
The Accumulated Value of a deferred contract at any time prior to the
commencement of Annuity Payments can be determined by multiplying the total
number of Accumulation Units credited to the contract in each sub-account by the
then current Accumulation Unit values in each. Each Owner will be advised at
least semi-annually of the number of Accumulation Units credited to his or her
contract, the current Accumulation Unit Value and the total value of the
contract. Accumulation Units are valued each day that shares of the Portfolios
are valued. Contract Owners may at any time obtain the most recent Accumulation
Value from the Annuity Service Center. Any applicable charges for surrendering a
contract must be deducted from this Accumulated Value to determine the amount
that would be received upon a surrender.
How is the Accumulation Unit value determined?
The value of an Accumulation Unit in each sub-account was set at $1.00 on the
Valuation Date on which funds were first placed in the sub-account. The value of
an Accumulation Unit on any subsequent Valuation Date is determined by
multiplying the value of an Accumulation Unit on the immediately preceding
Valuation Date by the net investment factor for the Valuation Period just ended.
The net investment factor is calculated in order to determine the daily
fluctuations of the Accumulation Value due to the investment performance of the
Fund, expenses and fees paid by the Fund, and any charges made against the
Account. An explanation of how the net investment factor is determined, and an
example of how it works, is included in the Statement of Additional Information.
How are the underlying Portfolio shares valued?
The shares of each Portfolio are valued at net asset value on each day the New
York Stock Exchange is open for business. A description of the valuation method
used in valuing shares of each Portfolio may be found in the accompanying
prospectuses for Panorama Fund and OVAF.
Payment Of Benefits
What would my beneficiary receive as death proceeds?
In the event an Annuitant dies prior to the commencement of Annuity Payments,
MassMutual will pay the named beneficiary the Accumulated Value of the contract
determined as of the Valuation Date on which, or next following, both due proof
of death and an election of a single sum cash payment are received at the
Annuity Service Center. If a single sum payment is not elected, an Annuity
option may be elected during the 90-day period following receipt of due proof of
death. If no election has been made, a single sum cash payment will be made at
the end of the 90-day period in an amount equal to the then Accumulated Value.
What contract options are available if the Annuitant ceases to be eligible under
a retirement plan?
Subject to whatever restrictions may be placed on the exercise of the contract
options by the retirement plan, all the Annuity contract options are available
to the Owner of a deferred contract.
If for any reason the Annuitant ceases to be eligible to make further
contributions or to participate in a retirement plan, the Contract Owner may
make one or more of the following elections to the extent permitted under the
retirement plan: (A) the Accumulated Value of the contract may be applied to
provide a fixed or variable Annuity, provided that the amount applied satisfies
the minimum requirements for an Annuity option; (B) the contract may be redeemed
for cash, in whole or in part; or (C) the contract may be transferred to the
Annuitant free from all provisions of the plan; or (D) the contract will
continue to participate in the investment results of the Account.
Upon the Contract Maturity Date, the Annuitant will begin to receive Annuity
Payments under the selected retirement option. At any time prior to the Contract
Maturity Date, the Owner can exercise elections (A) or (B) described in the
previous paragraph.
How can a deferred contract be redeemed or surrendered?
A deferred contract may be redeemed in part or surrendered by a written request
for redemption from the Contract Owner. The Contract Owner will be entitled to
the redemption or Surrender Value computed as of the next valuation of
Accumulation Units following receipt of the request in good order at the Annuity
Service Center. Payment will be made promptly. At the present time MassMutual
remits premium taxes to the states quarterly or annually when due. Therefore, no
refund of previously deducted premium taxes will be made in the event of either
a partial redemption or a surrender. Surrender or partial redemption of a
contract may result in adverse tax consequences. Some of these are described
under "FEDERAL TAX STATUS".
15
<PAGE>
May I make withdrawals on a regularly scheduled basis?
Upon written request, a Contract Owner may elect Systematic Withdrawals ($100
minimum per withdrawal) to begin at any time prior to the Contract Maturity
Date. There is currently no service charge for Systematic Withdrawals. However,
MassMutual reserves the right to charge for Systematic Withdrawals in the
future. A Contract Owner may not simultaneously participate in both Systematic
Withdrawals and Dollar Cost Averaging or Option E Specified Payments for a
Variable Period. (See "May I make transfers between sub-accounts on a regularly
scheduled basis?")
If a Systematic Withdrawals plan is elected, the Contract Owner may withdraw
fixed dollar amounts at regular intervals from the Accumulated Value of the
contract.
Systematic Withdrawals will begin when a properly completed written request from
the Contract Owner is received by MassMutual at least five (5) business days
prior to the Systematic Withdrawals start date selected by the Contract Owner.
If the Systematic Withdrawals start date is less than five (5) days after the
date the written request is received by MassMutual, MassMutual may defer the
Systematic Withdrawals start date for one month. If no Systematic Withdrawals
start date has been selected, MassMutual will automatically start Systematic
Withdrawals within five (5) business days after the written request is received.
Systematic Withdrawals changes may only be made by written request from the
Contract Owner to terminate the existing Systematic Withdrawals election, along
with a written request identifying a new Systematic Withdrawals election.
Systematic Withdrawals will terminate when any of the following occurs:
(1) the number of designated Systematic Withdrawals has
been completed;
(2) the value of the sub-account is insufficient to complete the next
withdrawal;
(3) a written request from the Contract Owner is received at least five (5)
business days prior to the next withdrawal date;
(4) the Contract Maturity Date arrives; or
(5) the contract is terminated.
Except as otherwise provided, Systematic Withdrawals are subject to all of the
provisions of the contract. Further, withdrawals may result in tax liabilities.
See "FEDERAL TAX STATUS".
May I surrender my contract once life Annuity Payments have started?
No. Once life Annuity Payments have commenced a contract cannot be surrendered,
and no further payments will be accepted under that contract.
However, you will be allowed to exchange Annuity Units among sub-accounts. One
such exchange may be made in any calendar year. Under the Specified Payments for
a Variable Period option (Option E), the contract may be surrendered in part or
in full during the payment period, or its value may be applied under a life
Annuity option subject to the applicable charges.
Are there special restrictions if I participate in the Texas Optional Retirement
Program?
Yes. Participants in the Texas Optional Retirement Program may not receive the
proceeds of a redemption in whole or in part or apply them to provide annuity
options prior to retirement, except in the case of death or termination of
employment in all institutions of higher education as defined under Texas law.
Such proceeds may, however, be used to fund another eligible retirement vehicle.
Are there restrictions under Section 403(b) plans?
Similar restrictions apply to annuity contracts used in connection with Code
Section 403(b) retirement plans. Section 403(b) of the Code provides for
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. In accordance with the requirements of the Code,
Section 403(b) annuities generally may not permit distribution of (i) salary
reduction contributions made in years beginning after December 31, 1988, (ii)
earnings on those contributions, and (iii) earnings on amounts attributable to
salary reduction contributions held as of the end of the last year beginning
before January 1, 1989. Distributions of such amounts will be allowed only upon
death of the employee, on or after attainment of age 59 1/2 separation from
service, disability, or financial hardship, except that earnings attributable to
salary reduction contributions may not be distributed in the case of hardship.
Can payment of the redemption or Surrender Value ever be postponed?
Yes. It may be postponed whenever (a) the New York Stock Exchange is closed, or
trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission (the "SEC"); (b) the SEC permits
16
<PAGE>
postponement and so orders; or (c) the SEC determines that an emergency exists
making valuation of the Portfolios or disposal of securities not reasonably
practicable.
What Annuity options are available under deferred contracts?
Deferred contracts provide five (5) variable Annuity retirement options. The
Owner may select, in accordance with any retirement plan that may be in effect,
a retirement date and a retirement option. Subsequent changes in either may be
made up to the date Annuity payments are to commence. Because of certain Code
requirements, each plan will ordinarily specify a minimum and maximum retirement
age, and may limit the number of monthly payments certain which may be elected,
or the election of a joint and last survivor Annuity where the contingent
beneficiary is other than a spouse. If the Owner does not elect otherwise, the
life Annuity option with 120 monthly payments certain will be effective.
What is the minimum amount that I may use for an Annuity option?
The minimum amount which may be applied under such an option is $2,000 and the
minimum Annuity Payment is $20.00. If at any time the Annuity Payments are or
become less than $20.00, MassMutual has the right to change the frequency of
payment to intervals that will result in payments of at least $20.00. If
proceeds payable on the retirement date are less than $2,000, MassMutual may
discharge its obligation by paying the proceeds in one lump sum.
What are the available Annuity options under deferred contracts?
Option A. Life Annuity. A variable Annuity payable monthly while the Annuitant
is alive. Payments will cease with the last monthly payment due preceding the
Annuitant's death.
Option B. Life Annuity With 60, 100, 120 or 240 Monthly Payments Guaranteed. A
variable Annuity payable monthly while the Annuitant is alive. Payments will
cease after the later of:
(1) the last monthly payment due preceding the Annuitant's
death; or
(2) the end of 60, 100, 120 or 240 payments, as elected by the Annuitant.
Option C. Unit Refund Life Annuity. A variable Annuity payable monthly while the
Annuitant is alive. Payments will cease with the last monthly payment due
preceding the Annuitant's death. Upon receipt of proof of the Annuitant's death,
an additional payment may be made. The additional payment will be the then
dollar value of the number of Annuity Units equal to the excess of (a) over (b).
(3) The total amount applied under the option divided by the value of an
Annuity Unit Value at the date Annuity Payments begin.
(4) The product of the number of Annuity Units represented by each monthly
Annuity Payment and the number of Annuity Payments made prior to death.
Option D. Joint Life Income for Annuitant and One Other Person with Two-Thirds
Annuity Units to Survivor. (One Hundred and Twenty Months Certain). A joint
variable Annuity payable monthly to the Annuitant and one other person
designated at the exercise of this option. MassMutual will pay the income for
120 months certain and as long afterwards as the Annuitant and such other person
are living. After the death of the Annuitant and after payment of any remaining
payments certain, monthly payments will continue for life to the designated
person. Such payments will be computed on the basis of two-thirds of the number
of Annuity Units in effect during the joint lifetime.
Option E. Specified Payments for a Variable Period. MassMutual will make equal
payments in the amount specified until the remaining balance is less than the
amount of one payment. Payments may be made on an annual, semiannual, quarterly
or monthly basis.
The remaining balance in the Separate Account at the end of any Valuation Period
is equal to the product of (a) and (b).
(a) The balance at the end of the previous period decreased by the amount of any
payments made during the period.
(b) The net investment factor for the period.
If the remaining balance at any time is less than the amount of one payment, the
balance will be paid as the final payment under this option. You may surrender
this contract for the remaining balance, or redeem a portion thereof, at any
time. Amounts paid under this option during the first ten (10) years a contract
is in existence prior to the Contract Maturity Date are subject to sales
charges.
Upon the request of the Contract Owner, MassMutual will endorse the contract to
eliminate any option thereunder, or in such other fashion as may be required to
maintain qualification of a plan under the Code, provided that such change is
not otherwise contrary to law. Election of Option E will result in adverse
income tax consequences for Contract Owners who have not acquired this contract
under a qualified plan or as an Individual Retirement Annuity. See "FEDERAL TAX
STATUS".
17
<PAGE>
Are there any other options available at retirement under deferred contracts?
Yes. In addition to those retirement options specified in the contract, any mode
of payment or other joint option agreed to by MassMutual, and not in conflict
with the contract, may be selected. MassMutual will generally allow the proceeds
of a partial redemption or a surrender (less any applicable sales or other
charges) to be applied under the retirement options set forth in any fixed
Annuity contract offered by MassMutual at the time of selection, and for which
the purchaser would have been eligible. In the event such a selection is made on
the Contract Maturity Date, the Accumulated Value of the contract less the
Annual Maintenance Fee will be applied in accordance with the terms of such
other contract. Certain options are subject to a policy fee, but no other sales
or administrative charges will be imposed under the fixed option.
What are the available optional retirement forms under an immediate contract?
The single premium immediate contracts are used to provide life Annuities, joint
life Annuities and unit refund life Annuities.
The life Annuity may be in any of the forms outlined as Options A or B for
deferred contracts. The computed value at 3.5% interest compounded annually of
the current dollar amount of any remaining payments certain would constitute the
equivalent lump sum payment to be made to the designated beneficiary if the
remaining payments certain are not to be continued.
The joint life Annuity is as described under Option D for deferred contracts.
The unit refund life Annuity is as described under Option C for deferred
contracts.
How are Annuity Payments determined
The Statement of Additional Information contains a detailed description of how
the Annuity Payments under the contracts are determined.
In that calculation, an assumed investment return of 3.5% is used. This is not
an expected rate of return for the Account. Rather it is an annual interest rate
assumption used in constructing the Annuity table used to determine the first
Annuity Payment. The interest rate assumption of 3.5% would produce level
Annuity Payments if the net investment return remained level at 3.5% on an
annual basis. The actual net investment return will, of course, vary. If higher
than 3.5%, the payments will rise, and if lower than 3.5%, the payments will
fall. If a higher interest rate assumption were used, the initial payment would
be higher but subsequent payments would rise more slowly or fall faster as the
actual investment return varies from that higher assumed rate. A lower
assumption would create the opposite effect.
Massachusetts Mutual Life
Insurance Company, MML
Investors Services, Inc., MML
Distributors, LLC and The
Funds
Tell me about Massachusetts Mutual Life Insurance Company
Massachusetts Mutual Life Insurance Company ("MassMutual") is a mutual life
insurance company specially chartered by the Commonwealth of Massachusetts on
May 14, 1851. It is currently licensed to transact life, accident, and health
insurance business in all states, the District of Columbia, Puerto Rico and
certain provinces of Canada. As of December 31, 1997, the Company had estimated
unconsolidated statutory assets in excess of $57 billion and estimated total
assets under management in excess of $152 billion.
On February 29, 1996, Connecticut Mutual Life Insurance Company ("CML") merged
with and into the Company. Upon the merger, CML's existence ceased and the
Company became the surviving company under the name Massachusetts Mutual Life
Insurance Company. All of the Contracts were issued by CML and, at the time of
the merger, were assumed by the Company. The merger did not affect any
provisions of, or rights or obligations under, the Contracts as originally
issued by CML.
Tell me about MML Investors Services, Inc.
MML Investors Services, Inc. ("MMLISI"), a wholly-owned subsidiary of
MassMutual, is located at 1414 Main Street, Springfield, MA 01144-1013. MMLISI
acts as co-underwriter and distributor of the Contracts. MMLISI is registered as
a broker-dealer with the U.S. Securities and Exchange Commission (the
"Commission") and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Contracts will be sold by registered representatives of MMLISI
who are also licensed to sell MassMutual insurance products under applicable
state insurance laws.
Tell me about MML Distributors, LLC
MML Distributors serves as the principal underwriter and wholesale distributor
of the contracts. It will enter into agreements with other broker-dealers whose
registered representatives will sell the contracts. It is located at 1414
18
<PAGE>
Main Street, Springfield, MA 01144. Sales charges assessed under contracts
described in this Prospectus may be paid to MML Distributors.
MML Distributors does business under different variations of its name including:
"MassMutual Distributors, L.L.C." in Delaware, Idaho, Illinois, Michigan, North
Dakota, Oklahoma, Oregon, and South Dakota, "MML Distributors Limited Liability
Company", in Maine, New Mexico, Ohio and West Virginia, and "MML Distributors,
LLC, L.C." in Florida. MML Distributors is registered with the Commission as a
broker-dealer and is a member of the NASD.
MassMutual will accept, by agreement with a limited number of broker-dealers,
electronic data transmissions of Application information, along with wire
transmittals of initial Purchase Payments from the broker-dealers to the Annuity
Service Center for purchase of the Contract. Please contact the Annuity Service
Center to receive more information about electronic data transmission of
Application information.
Tell me about the Funds
The Panorama Series Fund, Inc. ("Panorama Fund") is an open-end diversified
investment company consisting of seven (7) separate series, two (2) of which are
available for contracts offered by this Prospectus. Oppenheimer Variable Account
Funds ("OVAF") is a diversified open-end investment company consisting of ten
(10) separate series, two (2) of which are available for contracts offered by
this Prospectus. Oppenheimer is the investment adviser to the Funds. Oppenheimer
is an indirect subsidiary of MassMutual and is registered with the Securities
and Exchange Commission as an investment adviser. Oppenheimer (including a
subsidiary) advises U.S. investment companies with assets aggregating over $75
billion as of December 31, 1997, and with more than 3.5 million shareholders
accounts. It is located at Two World Trade Center, New York, New York, and also
has offices at 3410 South Galena Street, Denver, Colorado 80231.
A full description of each Portfolio, their investment policies and
restrictions, risks, charges and expenses and all other aspects of their
operations, is contained in the accompanying prospectuses for Panorama Fund and
OVAF which should be read in conjunction with this Prospectus.
Performance Data
How are yields and total returns calculated for the sub-accounts?
MassMutual may show the performance under the Contracts in the following ways:
Standardized Average Annual
Total Return
MassMutual will show the Standardized Average Annual Total Return for the
sub-accounts of the Separate Account. As prescribed by the rules of the SEC, the
Standardized Average Annual Total Return is the effective annual compounded rate
of return that would have produced the cash redemption value over the stated
period had the performance remained constant throughout. The Standardized
Average Annual Total Return assumes a single $1000 payment made at the beginning
of the period and full redemption at the end of the period. It reflects a
deduction for the contingent deferred sales load, the annual maintenance charge
and all other Fund, Separate Account, and Contract level charges except premium
taxes, if any. The annual maintenance load is apportioned among the sub-accounts
of the Separate Account based upon the percentages of inforce Contracts
investing in each of the sub-accounts.
Additional Performance Measures
The performance figures discussed below are calculated on the basis of the
historical performance of the Funds. The difference between the first set of
additional performance measures, ANNUALIZED RETURNS on Accumulation Unit Values,
and the second set, the NON-STANDARIZED ANNUAL and AVERAGE ANNUAL TOTAL RETURNS,
is that the second set includes the deduction of the annual maintenance charge,
the first set does not. Additional details follow.
Accumulation Unit Values -- Annualized Returns. The ANNUALIZED RETURN, or
average annual change in Accumulation Unit Values, may be shown with respect to
one or more periods. For a one year period, the ANNUALIZED RETURN is the
effective annual rate of return. For periods greater than one year, the
ANNUALIZED RETURN is the effective annual compounded rate of return for the
periods stated. Since the value of an Accumulation Unit reflects the Separate
Account, the Panorama Series Fund expenses and the OVAF expenses (See Table of
Fees and Expenses), the ANNUALIZED RETURN also reflect these expenses. The
returns, however, do not reflect the annual maintenance charge and the sales
charge or premium taxes (if any), which if included would reduce the percentages
reported.
19
<PAGE>
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a sub-account of the Separate
Account is the effective annual rate of return that would have produced the
ending Accumulated Value of the stated one year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a sub-account of the
Separate Account is the effective annual compounded rate of return that would
have produced the ending Accumulated Value over the stated period had the
performance remained constant throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the NON-
STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same period
due to the effect of the annual maintenance charge. Additionally, the magnitude
of this difference will depend on the size of the Accumulated Value from which
the annual maintenance charge is deducted.
Performance information for the Separate Account sub-accounts may be: (a)
compared to other variable annuity separate accounts or other investment
products surveyed by Lipper Analytical Services, a nationally recognized
independent reporting service or similar services that rank mutual funds and
other investment companies by overall performance, investment objectives and
assets; (b) tracked by other ratings services, companies, publications or
persons who rank separate accounts or other investment products on overall
performance or other criteria; and (c) included in data bases that can be used
to produce reports and illustrations by organizations such as CDA Weisenberger.
Performance figures will be calculated in accordance with standardized methods
established by each reporting service.
YIELD AND EFFECTIVE YIELD. MassMutual may show yield and effective yield figures
for the Money Market sub-account of the Separate Account. "Yield" refers to the
income generated by an investment in the Money Market sub-account over a
seven-day period, which is then "annualized". That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Money Market sub-account is assumed to be
re-invested. Therefore the effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. These
figures do not reflect the contingent deferred sales charge or premium taxes (if
any), which if included would reduce the yields reported.
The performance measures discussed above reflect results of the Portfolios and
are not intended to indicate or predict future performance. For more detailed
information see the Statement of Additional Information.
Miscellaneous
What are my voting rights?
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Contract Owner during the lifetime
of the Annuitant, or the beneficiary after the Annuitant's death, will be
entitled to give instructions as to how the shares of the Funds held in the
Separate Account (or other securities held in lieu of such shares) deemed
attributable to the Contract should be voted at meetings of shareholders of the
Funds or the Trusts. Those persons entitled to give voting instructions will be
determined as of the record date for the meeting.
The number of Fund shares held in the Separate Account deemed attributable to a
Contract prior to its Maturity Date and during the lifetime of the Annuitant
will be determined by dividing the Contract's value held in each Sub-Account of
the Separate Account, if any, by $100. Fractional votes are counted. After the
Maturity Date of after the death of the Annuitant, the number of Fund shares
deemed attributable to the Contract will be based on the liability for future
Variable Monthly Annuity payments under the Contract as of the record date and
thus the voting rights will decrease as payments are made.
Contract Owners or beneficiaries will receive proxy material and a form with
which voting instructions may be given. Fund shares held by the Separate Account
as to which no effective instructions have been received or which are
attributable to assets transferred from MassMutual's general account will be
voted for or against any proposition in the same proportion as the shares as to
which instructions have been received.
In situations where the Annuitant is not the Contract Owner, the Annuitant will
have the right to instruct the Contract Owner with respect to the votes
attributable to any vested interest the Contract Owner has in the Contract.
MassMutual's obligation in this instance will be to make available to the
Contract Owner copies of the proxy material for distribution to the Annuitant.
Votes representing interests as to which the Contract Owner is not instructed
may, in turn, be voted by the Contract Owner in his discretion.
Tell me about the Administrator
MassMutual has contracted with Alliance-One Services, L.P. (Alliance-One),
Dwight Building, Second Floor, 1004 Baltimore, Kansas City, Missouri 64105 to
administer the Contracts on its behalf at the Annuity Service Center. In this
capacity, Alliance-One is responsible for the following: processing purchase
payments, annuity payments, death benefits, surrenders, withdrawals and
transfers; preparing confirmation notices and periodic reports; calculating
20
<PAGE>
mortality and expense risk charges; and generally assisting Contract Owners.
However, this contract will terminate on June 30, 1998. Effective July 1, 1998,
the Contracts will be administered at the Annuity Service Center, H305, P.O. Box
9067, Springfield, MA 01101.
Federal Tax Status
Introduction
The ultimate effect of federal income taxes on the value of the Contract, on
annuity payments, and on the economic benefit to the Contract Owner, Annuitant
or Beneficiary depends on a variety of factors including the type of retirement
plan for which the Contract is purchased and the tax and employment status of
the individual concerned. The discussion contained herein is general in nature
and is not intended as tax advice. Each person concerned should consult a
competent tax adviser for complete information and advice. No attempt is made to
consider any applicable state or other local tax laws. Moreover, the discussion
herein is based upon MassMutual's understanding of current federal income tax
laws as they are currently interpreted. No representation is made regarding the
likelihood of continuation of those current federal income tax laws or of the
current interpretations by the Internal Revenue Service ("IRS").
Tax Status Of MassMutual
Under existing federal law, no taxes are payable by MassMutual on investment
income and realized capital gains of the Account credited to the contracts.
Accordingly, MassMutual does not intend to make any charge to the Account to
provide for company income taxes. MassMutual may, however, make such a charge in
the future if an unanticipated construction of current law or a change in law
results in a company tax liability attributable to the Account.
MassMutual 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, charges for such taxes attributable to the Separate Account may be
made.
Taxation Of Contracts In General
Under Section 817(h) of the Internal Revenue Code (the "Code") a Contract (other
than one used in a tax-qualified retirement plan) will not be treated as an
annuity contract and will be taxed on the annual increase in earnings if, as of
the end of any quarter, the Portfolios, or the Portfolio on which the Contract
is based are not adequately diversified in accordance with regulations
prescribed by the Treasury Department.
Subject to certain annuity distribution rules (see "Annuity Distribution Rules
of Section 72(s)") annuity payments under the Contracts are taxable under
Section 72 of the Code. For contributions made after February 28, 1986, a
Contract Owner that is not a natural person will be taxed on the annual increase
in the earnings of a Contract unless the Contract Owner holds the Contract as
agent for a natural person. Otherwise, increases in the value of a Contract are
not subject to tax until actually or constructively received.
Amounts received prior to the Contract Maturity Date from Contracts not under
tax qualified arrangements (see "Taxation of Qualified Plans TSAs, IRAs and Roth
IRAs" for a discussion of Contracts used in the qualified plan market) are
subject to tax to the extent of any earnings or gains in the Contract; amounts
received which are in excess of such earnings or gains are considered a return
of capital. Similarly, amounts borrowed upon the Contract will be treated as
amounts received under the Contract and will be taxable to the same extent. If
an individual Contract Owner transfers ownership, for other than full and
adequate consideration, the Contract Owner will be taxed on the transfer as
though he or she had taken a full redemption of the Contract. If a Contract
Owner elects Option E as the Annuity option for the Contract, the Contract Owner
will be taxed on the Contract Maturity Date as though he or she had taken a full
redemption of the Contract. For Contracts entered into after October 21, 1988,
all annuity contracts issued by the same insurer and its affiliates to the same
Contract Owner within the same calendar year must be aggregated in determining
the amount of gain realized on a withdrawal from any one.
If the Contract is obtained in a tax-free exchange of contracts under Section
1035 of the Code, different tax rules may apply. If a distribution prior to the
Contract Maturity Date of a contract obtained in such an exchange is entirely
attributable to investments in the surrendered contract prior to August 14,
1982, the distribution will first be considered a return of capital to the
extent of those investments and only the amounts received in excess of those
investments will be regarded as taxable earnings or gains.
Penalty Taxes
In addition to the foregoing tax consequences, certain distributions under the
Contract will be subject to a penalty tax under the Code Section 72(q) (for
non-tax qualified Contracts) or 72(t) (for Contracts in tax qualified plans see
"Taxation of Qualified Plans, TSAs, IRAs and Roth IRAs,") of 10% of the amount
of the distribution that is includable in gross income. However, the following
distributions from non-tax qualified Contracts currently are not subject to the
penalty tax: (1) withdrawals made after the Contract Owner is 59 1/2 years old;
(2) payments made to a beneficiary (or to the estate of the Contract Owner) on
or after the death of the Contract Owner; (3) payments attributable to a
Contract Owner becoming totally disabled; or (4) substantially equal periodic
payments made (at least
21
<PAGE>
annually) for the lifetime (or life expectancy) of the Contract Owner or for the
joint lifetimes (or joint life expectancies) of the Contract Owner and the
beneficiary.
When monthly annuity payments commence, they are taxable as ordinary income in
the year of receipt to the extent that they exceed that portion of the
"investment in the Contract" allocable to that year. The investment in the
contract will equal the gross amount of purchase payments made under the
Contract less any amount that was previously received under the Contract but was
not included in gross income. The investment in the contract would also be
increased by any amount that was previously included in gross income under the
Contract but was not received. This amount, divided by the anticipated number of
monthly annuity payments, gives the "excludable amount," which is the portion of
each annuity payment considered to be a return of capital and, therefore, not
taxable. Under this exclusion ratio, the total amount excluded from payments
actually received is limited to the investment in the contract. The rules for
determining the excludable amount are contained in Section 72 of the Code and
regulations thereunder and require adjustment when the payment option elected
provides a feature such as a guaranteed number of payments.
Annuity Distribution Rules of Section 72(S)
Annuity distribution requirements are imposed under Section 72(s) of the Code.
MassMutual understands that these requirements do not apply to Contracts issued
to or under Qualified Plans, TSAs, IRAs and Roth IRAs.
Under Section 72(s), a Contract will not be treated as an annuity subject to
Section 72 of the Code, unless it provides for certain required distributions
from and after the date of death of the Contract Owner.
Spousal Continuance
Where the Annuitant and Owner are the same person and his/her spouse is named
the designated beneficiary of the contract then on the death of the
Annuitant/Owner the designated beneficiary may continue the contract in his/her
own name as Annuitant and Owner. The new Annuitant/Owner has all rights under
the contract including naming a new beneficiary and making additional purchase
payments.
Tax Withholding
Certain tax withholding is imposed on payments that are made under the Contracts
(for Contracts in tax qualified plans, see "Taxation of Qualified Plans, TSAs,
IRAs and Roth IRAs"). Withheld amounts do not constitute an additional tax, but
are fully creditable on the individual tax return of each payee who is subject
to withholding. In addition, no payment will be subject to the withholding if
(1) it is reasonable to believe that the payments are not includable in gross
income, or (2) the payee makes a valid election not to have withholding apply.
The payee may make such an election either by filing an election form with
MassMutual or, in the case of redemptions, by following procedures that
MassMutual has established to afford payees an opportunity to elect out of
withholding. These forms and procedures will be provided to payees by MassMutual
upon a request for payment.
Unless the Payee elects not to have withholding apply, MassMutual is required to
withhold, for federal income tax purposes, 10% of the taxable portion of any
redemption payment or non-periodic distribution under the Contracts. Periodic
annuity payments under the Contracts are subject to withholding at the payee's
wage base rate. If the payee of these annuity payments does not file an
appropriate withholding certificate (obtainable from any local IRS office) with
MassMutual, it will be presumed that the payee is married claiming three
exemptions. Special rules limit the ability of a payee to elect no withholding
where the payee fails to provide a U.S. residence address or a federal taxpayer
identification number.
Tax Reporting
MassMutual is required to report all taxable payments and distributions to the
IRS and to the payees. Payees will receive reports of taxable payments and
distributions by January 31 of the year following the year of payments.
Taxation of Qualified Plans, TSAs, IRAs and Roth IRAs
The tax rules applicable to participants in retirement plans that qualify for
special federal income tax treatment vary according to the type of plan and its
terms and conditions.
Increases in the value of a Contract are not subject to tax until received by
the employee or his beneficiary. Monthly annuity payments under Qualified Plans,
TSAs and IRAs are taxed as described above (see "TAXATION OF CONTACTS IN
GENERAL"), except that the "investment in the Contract" under a Qualified Plan
is normally the gross amount of purchase payment made by the employee under the
Contract or made by the employer on the employee's behalf and included in the
employee's taxable income when made. However, as opposed to the tax treatment
for non-qualified contracts, where available, the election of Option E as an
Annuity option will not cause the employee or his beneficiary to be taxed on any
amount greater than the distributions actually received in a given year.
If the Annuitant receives a distribution that qualifies as a "lump sum
distribution" under the Code, he or she may be eligible for special "5-year
averaging" treatment of the funds received (or "10-year averaging" treatment if
he or
22
<PAGE>
she was age 50 or older on January 1, 1986). TSAs and IRAs are not eligible for
the special treatment under the "lump sum distribution" rules. Five year
averaging of lump sum distributions will no longer be available for calendar
years beginning January 1, 2000.
Certain TSA contributions may not be distributed to the Annuitant until age 59
1/2, death, disability, separation of service or hardship. Distributions from
Qualified Plans, IRAs, TSAs and Roth IRAs may be subject to a 10% penalty tax on
amounts withdrawn before age 59 1/2. However, the following distributions from
Qualified Plans (and TSAs and IRAs except as otherwise noted) are not subject to
the penalty: (1) payments made to a beneficiary (or the estate of an Annuitant)
on or after the death of the Annuitant; (2) payments attributable to an
Annuitant becoming disabled; (3) substantially equal periodic payments made (at
least annually) for the lifetime (or life expectancy) of the Annuitant or for
the joint lifetimes (or joint life expectancies) of the Annuitant and the
beneficiary (for Qualified Plans and TSAs, payments can only begin after the
employee separates from service); (4) payment for certain medical expenses (not
applicable to IRAs); (5) payment after age 55 and separation from service (not
applicable to IRAs); and (6) payments to an alternate payee pursuant to a
qualified domestic relations order under Code Section 414(p) (not applicable to
IRAs); (7) effective for calendar years beginning January 1, 1997, withdrawals
from IRAs by certain unemployed persons for payment of health insurance
premiums; (8) effective for calendar years beginning January 1, 1998,
withdrawals from IRAs for the payment of certain qualified higher education
expenses; and (9) effective for calendar years beginning January 1, 1998,
withdrawals from IRAs for certain first-time homebuyer expenses, subject to a
$10,000 lifetime cap. Qualified distributions from Roth IRAs are not subject to
the penalty tax. The exceptions applicable to IRAs also apply to Roth IRAs.
IRAs, Roth IRAs and contributions under Sections 401, 403(b) and 457 are subject
to limitations on the amount that may be contributed. The deductibility of
contributions by individuals or their spouses who are active participants in an
employer-maintained pension or profit-sharing plan may be reduced based on the
individual's adjusted gross income. Contributions to a Roth IRA are not
deductible. In addition, certain distributions from Qualified Plans and TSAs may
be placed into an IRA on a tax-deferred basis.
In general, tax law requires that minimum distributions be made from Qualified
Plans, TSAs and IRAs beginning at age 70 1/2 or following the death of the
participant. To avoid penalty taxes of 50 percent or more, required
distributions, including distributions which should have been distributed in
prior years, should not be rolled over to IRAs. There are no required minimum
distributions for a Roth IRA.
Certain distributions from Qualified Plans and TSAs are subject to mandatory
federal income tax withholding. MassMutual is required to withhold 20% when a
payment from a Qualified Plan or TSA is an "eligible rollover distribution" and
such payment is not directly rolled over to another Qualified Plan, TSA or IRA.
In general, an "eligible rollover distribution" is any taxable distribution
other than: (1) payments for the life (or life expectancy) of the Annuitant, or
for joint life (or joint life expectancies) of the Annuitant and the
beneficiary; (2) payments made over a period of ten years or more; and (3)
required minimum distributions (see above). Plan administrators should be able
to tell Annuitants what other payments are not "eligible rollover
distributions".
Taxable distributions that are not "eligible rollover distributions" are subject
to the withholding rules for annuities (see "Tax Withholding").
Special rules apply in the case of Roth IRAs. Roth IRAs are specially designated
IRAs. Contributions to Roth IRAs are not deductible and are limited based on
modified adjusted gross income. Contrary to regular IRAs, contributions are
permitted after age 70 1/2.
Qualified distributions from Roth IRAs are not included in income. Distributions
that are not qualified distributions are treated first as a return of investment
to the extent of the individual's contributions to Roth IRAs and as a taxable
distribution to the extent of any excess.
An individual (other than a married individual filing separately) with an
adjusted gross income of $100,000 or less may roll over distributions within 60
days from a regular IRA to a Roth IRA or may convert a regular IRA into a Roth
IRA. While the rollover would be subject to tax, it would not be subject to the
10% premature distribution penalty tax. If the rollover occurs during 1998, the
income is spread out over four tax years.
Taxation of Section 457 Plans
The amount deferred, including interest, under section 457 plans generally will
not be taxable until paid or otherwise made available to the employee, and at
that time will be taxable as ordinary income. Distributions from section 457
plans are not eligible for special income averaging treatment or for rollover to
IRAs.
Section 457 plans are subject to restrictions on the amount that may be
deferred. All investments under the plan, including the Contract, are owned by
the employer, but for state and local governmental 457 plans, amounts have to be
held for the exclusive benefit of plan participants. For 457 plans for
tax-exempt organizations, all Contract Values will be subject to the claims of
the employer's creditors. In either case, the employee is only entitled to
payment in accordance with the Section 457 plan provisions.
In general, tax law prohibits distributions from section 457 plans prior to age
70 1/2 or separation from service with the employer, and requires that minimum
distributions commence at age 70 1/2 or following the death of the participant.
23
<PAGE>
Are there any material legal proceedings affecting the Account
There are no material legal proceedings to which the Account is a party.
24
<PAGE>
APPENDIX A
IRA DISCLOSURE
STATEMENT for use with the
Massachusetts Mutual Life
Insurance Company
Prototype IRA
This statement is designed to assist you in understanding the requirements of
Federal tax law which apply to your Individual Retirement Annuity ("IRA"),
Spousal IRA , Roth IRA, or your Simplified Employee Pension IRA ("SEP-IRA") for
employer contributions. If you desire further information regarding your IRA, it
may be obtained either from your registered representative or from any district
office of the Internal Revenue Service.
The growth in value of the annuity is neither guaranteed nor projected.
Seven-Day Review Period
You have seven (7) days after you sign your application to review this statement
and the Prospectus without obligation. If you notify the company either orally
or in writing within this seven-day period that you do not wish to keep your
contract, your entire Purchase Payment will be refunded to you.
Annuity Service Center
H563
P.O. Box 9067
Springfield, MA 01102-9076
Eligibility Requirements
All persons with earned compensation are eligible for Individual Retirement
Annuities ("IRAs"). Additionally, if you have a spouse who has earned no
compensation (and you file a joint tax return), you may establish an IRA on
behalf of your spouse. Of course, if you have a working spouse who has earned
compensation, that spouse may establish his or her own IRA. Lastly, a divorced
or legally separated spouse may treat taxable alimony or separate maintenance
payments as compensation for purposes of establishing an IRA.
The Annuity as an IRA
When this Annuity is issued as an IRA, the contract is amended to provide that
the contract is both non-transferable and non-forfeitable.
Contributions and Deductions
As a result of significant changes made by the Tax Reform Act of 1986,
contributions to your IRA are limited at two levels. First, there are limits on
the amount of contributions which may be deducted for income tax purposes.
Second, there is a limit with respect to the amount of nondeductible
contributions which can be made. The Small Business Job Protection Act of 1996
and The Taxpayer Relief Act of 1997 may also affect IRA contributions and
withdrawals.
For tax years beginning after 1997, an individual who is not an active
participant in an employer-maintained retirement plan is eligible to make
deductible contributions to an IRA equal to the lesser of 100% of compensation
or $2,000. A spouse who is not an active participant in an employer-maintained
retirement plan during any part of a year but whose spouse is a plan participant
may made a deductible IRA contribution, subject to phase-out at adjusted gross
income between $150,000 and $160,000. Furthermore, an individual who files a
joint return and who has less taxable compensation than his spouse may
contribute to a spousal IRA and deduct the lesser of $2,000 or the sum of (a)
that individual's includable compensation for the tax year plus (b) includable
compensation of the individual's spouse reduced by the spouse's allowable IRA
deduction and Roth IRA contribution for the tax year.
However, if you or your spouse (if you file a joint return) is an active
participant in an employer-maintained retirement plan, your IRA deduction may be
reduced or eliminated entirely at certain levels of adjusted gross income. For
tax years beginning after 1997, phase-out ranges for deductible IRA
contributions increase annually until 2005 or 2007. Specifically, the adjusted
gross income phase-out range in 1998 for individuals with a single or head of
household filing status is $30,000 to $40,000, increasing annually to $50,000 to
$60,000 in 2005. For married individuals filing a joint return, the phase-out
range in 1998 is $50,000 to $60,000, increasing annually to $80,000 to $100,000
in 2007. The phase-out range in any year for a married individual filing
separately is $0 to $10,000. In all cases, the IRA deduction will be phased out
ratably within the respective ranges.
Nevertheless, you may still make designated nondeductible IRA contributions to
the extent of the excess of (1) the lesser of $2,000 ($4,000 in the case of a
Spousal IRA), or 100% of compensation annually, over (2) the applicable IRA
deduction limit. You may also choose to make a contribution nondeductible even
if you could have deducted part or all of the contribution. Interest or other
earnings on your IRA contribution, whether from deductible or nondeductible
contributions, will not be taxed until distributed to you.
For purposes of the above discussion, you are an "active participant" in an
employer-maintained retirement plan, if you are covered by such plan, even if
you are not yet vested in your retirement benefit. However, an individual who is
a participant in an eligible state deferred compensation plan,
25
<PAGE>
as defined in Code section 457(b), is not considered to be an "active
participant".
In order to qualify for a particular tax year, IRA contributions must be made
during such tax year or by the deadline for filing your income tax return for
that year (not including extensions). For calendar year taxpayers the deadline
is generally April 15.
If you make contributions to an IRA, Roth IRA or Education IRA in excess of the
combined deductible and nondeductible limits, you may be liable for a
nondeductible excise tax of 6% of the amount of the excess. You may withdraw an
excess contribution together with the net income attributable to the excess, on
or before the due date (including extensions of time) for filing your Federal
income tax return and the excess amount will be treated as if you never
contributed it, regardless of the size of the contribution. The accompanying
distribution of the net income, however, is includible in income for the year in
which the excess contribution is made. Excess amounts which are not withdrawn by
this method are subject to the 6% excise tax in the year of contribution and are
carried over and taxed each year until the year the excess is reduced.
No contribution may be made by you to your IRA during or after the tax year in
which you attain age 70 1/2, other than rollover distributions.
Special tax rules apply in the case of Roth IRAs.
Spousal IRAs
If your spouse has no compensation for the year and you file a joint return, you
may set up and make contributions to an IRA for your spouse, as well as for
yourself. Subject to the active participant rules discussed above, the maximum
amount that you can deduct for contributions to both IRAs is the lesser of
$4,000, or 100% of compensation reduced by the spouse's allowable IRA deduction
and Roth IRA contribution for the tax year. You may not deduct, however, more
than $2,000 to either IRA for any year.
SEP-IRAs
Under a SEP-IRA agreement, your employer may contribute 15% of your
compensation, up to $30,000, to your IRA each year. The contribution and
interest earned is excludable from your income until such time as it is
distributed to you.
You must withdraw any excess contribution made to your SEP-IRA by your employer
before the date for filing your return. If you do not, you are liable for the 6%
excise tax discussed above. SEP-IRAs are also generally subject to the other
requirements applicable to IRAs.
Roth IRAs
Roth IRAs are specially designated IRAs. Roth IRAs are subject to the same rules
as traditional IRAs except for certain special rules. Contributions to Roth IRAs
are not deductible and are limited based on modified adjusted gross income. You
may make a contribution to a Roth IRA even if you are an active participant in
an employer-maintained retirement plan. You may also make contributions to a
Roth IRA after age 70 1/2.
You may contribute a maximum of $2,000 per year to all IRAs (deductible, non
deductible and Roth IRAs). This $2,000 annual limit does not include rollover
contributions. The $2,000 maximum annual contribution to a Roth IRA phases out
for individuals with a single or head of household filing status with modified
adjusted gross income between $95,000 and $110,000. For married individuals
filing a joint return, the maximum annual contribution to a Roth IRA phases out
with modified adjusted gross income between $150,000 and $160,000.
Qualified distributions from Roth IRAs are not included in income and are not
subject to the 10% tax on premature distributions. To be qualified, a
distribution must not be made before the end of the five year tax period
beginning with the first tax year a contribution to a Roth IRA is made, and the
distribution must be made: (a) on or after the date on which you attain age 59
1/2; or (b) to your beneficiary or your estate after your death; or (c) as a
result of your being disabled; or (d) to pay for qualified first-time homebuyer
expenses.
Distributions that are not qualified distributions are treated first as a return
of investment to the extent of your contributions to Roth IRAs and as a taxable
distribution to the extent of any excess. Roth IRAs are not subject to required
minimum distribution rules or to incidental death benefit rules.
If you are not married filing separately and if your adjusted gross income for a
tax year does not exceed $100,000, you may roll over distributions within 60
days from a traditional IRA to a Roth IRA or you may convert a traditional IRA
into a Roth IRA. While the rollover would be subject to tax, it would not be
subject to the 10% premature distribution penalty tax. If the rollover occurs
during 1998, the taxable amount is included in gross income ratably over four
tax years.
Rollover Contributions and Transfers
You are permitted to withdraw any portion of the value of your IRA and reinvest
it in another individual retirement annuity or account, but not more frequently
than once in any one-year period. Such withdrawals may also be made from other
IRAs and contributed to this contract. Such a withdrawal of funds from one IRA
and subsequent reinvestment in another IRA is called a "rollover contribution".
In order to qualify as a tax-free rollover contribution, the entire portion of
the withdrawal must be reinvested in another IRA within 60 days after the date
it is received. Of course, you will not be allowed a tax deduction for the
amount of any rollover contribution.
A similar type of rollover contribution can be made with the proceeds of an
eligible rollover distribution or a lump-sum
26
<PAGE>
distribution from a qualified retirement plan. Such a distribution must also be
invested in the IRA within 60 days of receipt. A lump sum distribution is one
made from a Qualified Plan: (1) because of your death; (2) after you reached age
59 1/2 ; (3) because you left your job (unless you are self-employed); or (4)
after you become permanently disabled (but only if you are self-employed). To be
considered a lump sum, the distribution must also be made entirely in a single
tax year and must represent the entire value of your account in the retirement
plan (and in all plans of a similar type sponsored by the same employer).
Properly made, such a distribution will not be taxable until you receive
payments from the IRA created with it. Unless you were a self-employed
participant in the distributing plan, you may later roll over such a
contribution to another qualified retirement plan as long as you have not mixed
it with any IRA contributions you have deducted from your income.
Eligible rollover distributions are generally all taxable distributions from
Qualified Plans and Section 403(b) annuities except for: (1) amounts paid over
your life or life expectancy; or (2) installments for periods of years spanning
ten (10) years or more; or (3) required minimum distributions.
Also, if you receive a distribution on account of a plan termination you may
make a rollover contribution to an IRA.
In addition to rollover contributions, you may also have the assets of one IRA
directly transferred (without any distribution to you) to another IRA. Direct
IRA to IRA transfers are not subject to the one-year waiting period applicable
to IRA rollover contributions.
Special tax rules apply to rollover contributions to a Roth IRA.
Withdrawals
If you withdraw an amount from an IRA during a tax year and you have made both
deductible and nondeductible IRA contributions, the part of the withdrawal that
is from nondeductible contributions (not including interest) is excludable from
income. The amount excludable from income for the tax year is the portion of the
amount withdrawn that has the same ratio to the amount withdrawn as your total
nondeductible IRA contributions (of all your IRAs) have to the total balance of
all your IRAs, including rollover IRAs. The remaining portion of the amount
withdrawn for the tax year is includable in income. For purposes of this
calculation, all your IRAs are treated as one contract and all withdrawals you
make during a tax year are treated as one distribution and the value of the
contract (after adding back distributions made during the year), income on the
contract and investment in the contract are computed at the end of the year.
Special tax rules apply to distributions from Roth IRAs.
Premature Distributions
Premature distributions are amounts you withdraw from your IRA before you are
age 59 1/2 Premature distributions which do not qualify for rollover treatment
are subject to a penalty tax equal to 10% of the amount of the distribution
includable in gross income in the tax year, unless you are totally disabled or
receive the distributions in substantially equal payments (at least annually)
for your life or life expectancy or the joint lives or life expectancies of you
and your beneficiary or unless the distributions are made to your beneficiary on
account of your death. In addition, beginning January 1, 1997, withdrawals from
IRAs for payment of certain medical expenses and withdrawals by certain
unemployed persons for payment of health insurance premiums are not subject to
the 10% penalty tax. Furthermore, for calendar years beginning January 1, 1998,
withdrawals from IRAs for payment of certain qualified higher education expenses
and withdrawals for certain first time homebuyer expenses are not subject to the
penalty tax.
The penalty tax is also applicable to income taxable distributions deemed to
have been made upon disqualification of your IRA as a result of a prohibited
transaction (including, in general, the sale or assignment of your interest in
your IRA to anyone), or as a result of borrowing on your IRA, or using your IRA
as security for a loan.
Special tax rules apply to distributions from Roth IRAs.
Inadequate or Under distribution - 50% Tax
Your IRA is intended to provide retirement benefits over your lifetime. Thus,
Federal law requires that you either (1) receive a lump sum distribution from
your IRA not later than April 1st of the year after the year in which you attain
age 70 1/2 or (2) start to receive periodic payments by that date. If you elect
to receive periodic payments, those payments must be sufficient to pay out the
entire value of your IRA during your life or life expectancy (or over the life
or life expectancies of you and your beneficiary). If the payments are not
sufficient to meet these requirements, an excise tax of 50% will be imposed on
the amount of any underpayment.
27
<PAGE>
Death Benefits
If you should die before receiving any benefits from your IRA, your beneficiary
must either elect (1) to receive the balance of your account in a lump sum
within five (5) years of your death, or (2) have the balance applied to purchase
an immediate annuity payable over the life or life expectancy of the
beneficiary. Such annuity must commence within one year of your death. If your
spouse is your beneficiary, however, distributions are not required to be
distributed until the date you would have attained age 70 1/2, and if your
spouse dies before any distribution to him or her commences, your spouse is
treated as the owner of your IRA for purposes of any required distributions.
If you should die after benefits have commenced to you, the remaining portion of
your account must be distributed to your beneficiary as rapidly as under the
method of distribution in effect on the date of your death.
Prohibited Transactions
If you engage in certain prohibited transactions with your IRA, the IRA will
lose its exemption from taxation. Depending on the type of prohibited
transaction, you must include in income all or a portion of the fair market
value of the IRA account. Examples of prohibited transactions are: (1) any
borrowing from the account; (2) use of the account as security for a loan; (3)
receipt by you or certain family members of unreasonable compensation for
managing the IRA.
Prototype Status
The Internal Revenue Service currently has not been asked to review the format
of your Massachusetts Mutual Life Insurance Company ("MassMutual") Prototype IRA
or issue a determination letter regarding the qualification of the prototype
IRA. However, an opinion letter is a determination only as to the form of the
IRA, and does not represent a determination as to its merits.
Reporting to the IRS
If you make a designated nondeductible contribution to an IRA for a taxable year
or receive a distribution from an IRA during a taxable year, you are required to
provide such information as the IRS may prescribe on your tax return for the
taxable year, and, to the extent required, for succeeding taxable years. The
information that may be required includes, but is not limited to: (1) the amount
of designated nondeductible contributions for the taxable year; (2) the total
amount of designated nondeductible contributions for all preceding taxable years
that have not previously been withdrawn; (3) the total balance of all your IRAs
as of the close of the calendar year with or within which the taxable year ends;
and (4) the amount of distributions from your IRAs during the taxable year. If
the required information is not shown on your return, all traditional IRA
contributions are presumed to have been deductible. Therefore, they will be
taxable upon withdrawal from the IRA, unless it can be shown, with satisfactory
evidence, that the contributions were nondeductible when they were made.
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions, or 50% for
underpayments), you must file Form 5329 with the Internal Revenue Service. The
form is to be attached to your income tax return (Form 1040) for the tax year in
which the penalty applies.
Financial Disclosure
The charges which may be made against a contribution to your IRA include the
Custodian's fees (set forth in the Adoption Agreement), and the mortality and
expense risk fee, and other fees for the Separate Account contained in the Fee
Table of the Account Prospectus. The charges which may be made against a
withdrawal are also described in the Prospectus, and you should read the
Panorama Account Prospectus carefully and retain it for your future reference.
Additional Information
For further information about the Contracts, you may obtain a Statement of
Additional Information prepared by MassMutual.
The Table of Contents of this Statement is as follows:
1. Purchase of Contracts
2. Sales Charges
3. How the Charges Under These Contracts are Made
4. Redemptions
5. Contracts That are Subject to Sales Charges
6. Underwriting Arrangements
7. How Annuity Payments are Determined
8. How the Value of the Deferred Contract is Determined
9. How the Accumulation Unit Value is Determined
10. Distribution on Death of Contract Holder
11. Valuing the Underlying Funds Shares
12. Independent Accountants
13. Performance Measures
14. Yield and Effective Yield
15. Appendix - General Formulae
16. Financial Statements
28
<PAGE>
This Prospectus sets forth the information about Panorama Separate Account that
a prospective investor ought to know before investing. Certain additional
information about the Separate Account is contained in a Statement of Additional
Information dated May 1, 1998, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The information is
available upon request and without charge. To obtain this information, return
this request form to the address shown below or telephone 1-800-343-5629. The
table of Contents for the Statement of Additional Information appears on the
last page of this Prospectus.
To: Massachusetts Mutual Life Insurance Company
Annuity Service Center, H563
P.O. Box 9067
Springfield, MA 01102-9067
Please send me a Statement of Additional Information for Panorama.
Name
----------------------------------------------------------------
Address
-------------------------------------------------------------
City State Zip
------------------------------- -------- ---------------
29
<PAGE>
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
PANORAMA SEPARATE ACCOUNT
Individual Deferred and Immediate
Variable Annuity Contracts Issued by
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
1295 State Street, Springfield, Massachusetts 01111
1-800-234-5606
------------
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information should be read in conjunction with the
Prospectus for the Panorama Separate Account dated May 1, 1998, a copy of which
may be obtained by writing Massachusetts Mutual Life Insurance Company, Annuity
Products, H563, P.O. Box 9067, Springfield, Massachusetts 01102-9067 or calling
1 (800) 234-5606.
May 1, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Purchase of Contracts ..................................................... 2
Sales Charges ............................................................. 2
How the Charges Under these Contracts are Made ............................ 2
Redemptions ............................................................... 3
Contracts That Are Subject to Sales Charges ............................... 3
Underwriting Arrangements ................................................. 3
How Annuity Payments are Determined ....................................... 3
How the Value of the Deferred Contract is Determined ...................... 4
How the Accumulation Unit Value is Determined ............................. 4
Distribution on Death of Contract Holder .................................. 5
Valuing the Underlying Fund Shares ........................................ 5
Independent Accountants ................................................... 5
Performance Measures ...................................................... 6
Yield and Effective Yield ................................................. 7
Appendix o General Formulae ............................................... 8
Financial Statements of the Panorama Separate Account and MassMutual ...... Final Pages
</TABLE>
1
<PAGE>
Purchase of Contracts
The contracts offered under the Prospectus are individual variable
annuity contracts for use on a tax-qualified and non- tax qualified basis. They
are offered as periodic payment deferred, single payment deferred and immediate
contracts. The maximum issue age for immediate and deferred contracts is
Attained Age 75. The minimum first contract year purchase payment on a deferred
contract is $500 and for an immediate contract the minimum purchase payment is
$10,000.
However, this minimum initial payment may be waived in the case of
Panorama group-billed arrangements existing prior to January 1, 1986. In those
cases, the minimum initial payment for new participants will be $10 per
participant. For Panorama group-billed arrangements established on or after
January 1, 1986, the minimum purchase payment will be $40 per month per
participant.
Sales Charges
No deductions are made from purchase payments under deferred contracts
beyond the deduction of any applicable premium taxes. A deduction for contingent
deferred sales charge ("Sales Charge") under deferred contracts is taken from
the proceeds of redemptions or amounts applied to provide variable life annuity
payments to the extent, and for the period of time, described below.
During the first ten (10) 12-month periods ("contract years") that a
deferred contract is in existence, a sales charge will be applied to any
redemption amount in excess of 10% of the closing contract value as of December
31st of the prior year. The deduction for sales charges expressed as a
percentage of the amount redeemed in excess of the 10% allowable amount (which
will be zero for the remainder of the Calendar Year during which the first
purchase payment is received) and after any transaction or maintenance charges,
is as follows:
Contract Years Deduction
-------------- ---------
1-5............................................. 5%
6-10............................................ 4%
11 and over..................................... 0%
In addition, there are two (2) circumstances where the commencement of
variable annuity payments gives rise to a sales charge. First, amounts paid
under the non-life variable annuity option (Option E explained in of the
prospectus) are treated as partial redemptions for purposes of deducting sales
charges, as set forth above. Second, if payments under a variable life annuity
option commence during the first three years after the contract is issued, a
reduced sales charge applies. This deduction, expressed as a percentage of the
amount applied to provide a variable payout after the deduction charge, is as
follows:
Contract Years Deduction
-------------- ---------
1 ................................. 3%
2 ................................. 2%
3 ................................. 1%
4 and over......................... 0%
There is no sales charge on redemptions made after the contract maturity
date. Pursuant to an exemption from certain provisions of the Investment Company
Act of 1940, as amended, filed with the Securities and Exchange Commission, the
total deferred sales charges on a deferred contract may not exceed 9% of the
total purchase payments unless and until the Commission removes this
restriction.
A deduction for sales charges under single payment immediate annuity
contracts is taken from the purchase payment. A policy fee of $70 is also
deducted from the purchase payment as are any applicable premium taxes. The
deduction for sales charges as a percentage of the amount remaining after
deduction of the policy fee and any premium taxes is 3% of the first $10,000, 2%
of the next $90,000 and 1% of amounts over $100,000. On the minimum $10,000
purchase payment, the maximum deduction of 3% plus $70 is 3.83% of the net
amount invested.
How the Charges Under These Contracts Are Made
Charges under the contracts are assessed in various ways. The sales
charges under deferred contracts are taken as deductions from redemptions or
from proceeds applied to provide a variable life annuity payout. Massachusetts
Mutual Life Insurance Company (MassMutual) may pay premium taxes under the
Annuity Contracts, or depending on applicable state law, it may deduct premium
taxes paid from premium payments, upon full surrender, or on the Annuity Income
Date. Premium tax charges vary from jurisdiction to jurisdiction. The charge
made for the mortality and expense risk assumed by MassMutual is taken as a
daily charge to each sub-account. The annual maintenance charge is deducted
equally from the sub-accounts by redeeming units on the
2
<PAGE>
anniversary date of the contract. To the extent a sub-account does not have
sufficient value to cover an equal share, any shortfall will be deducted equally
from the other sub-accounts. In the event of a full surrender during a year,
this charge will be deducted from the proceeds of the surrender. The transaction
charges are taken as deductions from the proceeds of the transfer or partial
redemption, as applicable.
Redemptions
Prior to the commencement of life annuity payments, a deferred contract
may be surrendered or redeemed in part by a written request from the owner to
MassMutual. The owner will be entitled to the surrender or redemption value as
of the next valuation of accumulation units following receipt of the request at
the Annuity Service Center. Payment will be made promptly.
Contracts That Are Subject to Sales Charges
All deferred contracts are subject to the maintenance and transactions
charges prior to the contract maturity date unless the proceeds have been
applied under a life annuity option. The transaction charge is currently being
waived for up to four Sub-Account withdrawals made in conjunction with transfers
and one Sub-Account withdrawal made in conjunction with a partial redemption in
any one calendar year. If the proceeds have been applied under the non-life
variable annuity option, the transaction charge will continue to apply after the
contract maturity date except with regard to annuity payments.
Proceeds of individual variable or accumulation annuity contracts with
MassMutual which were previously held by, or for the benefit of, the contract
owner or annuitant, will not be subject to sales charges.
Also, the net proceeds of a surrender of a contract may be reinvested
without being subject to further sales charges if the following conditions are
met. First, the purchase payment covering the reinvestment must be received by
MML Distributors LLC, ("MML Distributors") within 30 days of the date of the
surrender. Second, the owner must not have previously made a reinvestment
pursuant to this privilege. This reinvestment privilege is contingent on
MassMutual's issuance of a new contract, which will not be done if the owner is
not eligible for a contract at the time the reinvestment is tendered. The
reinvestment may be subject to premium taxes. The maintenance fee will be added
back to the amount reinvested unless the period between surrender and
reinvestment includes the first contract's anniversary date.
Underwriting Arrangements
As of March 1, 1996, MML Distributors serves as the principal underwriter
and MML Investors Services, Inc. ("MMLISI") serves as co-underwriter for
Panorama Separate Account Contracts. These contracts are offered continuously.
G.R. Phelps & Co., Inc. ("Phelps"), a subsidiary of Connecticut Mutual Life
Insurance Company, served as underwriter for the contracts during part of 1995.
For 1995 the amount paid to Phelps for underwriting expenses was $580,188. MML
Distributors replaced Phelps as underwriter for the contracts as of August 1,
1995 and was paid $8,054 for underwriting expenses in 1995. The amount paid to
MMLISI in 1996 and 1997 was $41,240 and $20,000 respectively.
MML Distributors performs sales and administrative functions relative to
the Account including the keeping of all records not maintained by MassMutual.
It has been registered as a broker/dealer under the Securities Exchange Act of
1934. MML Distributors is an indirect wholly owned subsidiary of MassMutual, is
located at Monarch Place, 1414 Main Street, Springfield, MA 01144. MML
Distributors has contracted with Continuum Company, Inc. to administer the
Contracts on its behalf at the Annuity Service Center. No compensation was paid
to MML Distributors in 1997.
Commissions will be paid through MMLISI and MML Distributors to agents
and selling brokers for selling the Contracts. During 1997 and 1996, commission
payments amounted to $1,914,113 and $2,016,628 respectively.
How Annuity Payments are Determined
The dollar amount of annuity payments and the number of annuity units
under deferred contracts in force more than three years are determined in three
steps.
FIRST, a purchase rate per $1,000 of accumulated value is determined
according to the Progressive Annuity Table (as adjusted for year of birth) using
the age on the first payment date, and an assumed interest rate of 3 1/2% per
year.
SECOND, the product of the accumulated value (divided by 1,000) and the
purchase rate is divided by the value of an annuity unit on the first payment
date to determine the number of annuity units in each Sub-Account. This number
remains fixed for the life of the contract except in the case of certain joint
annuities or if there is a transfer from one Sub-Account to another.
3
<PAGE>
THIRD, the dollar amount of each annuity payment is determined by
multiplying the number of annuity units by the annuity unit value or values as
of the date on which the payment is made. This amount may increase or decrease
from payment to payment.
For the annuity payments and reserve values to increase, the earnings of
the participation must be at a rate higher than the total charges made against
the Sub-Account plus the assumed interest rate used in constructing the annuity
table.
For Contracts issued prior to July 1, 1988 adjustments to the Progressive
Annuity Table are made by an adjustment of one year in the annuitant's age for
each twenty (20) calendar years in birth date as shown in the following table:
Year of Birth Adjusted Age
------------- ------------
Before 1900............................... Actual Age + 1
1900 - 1919............................... Actual Age
1920 - 1939............................... Actual Age - 1
1940 - 1959............................... Actual Age - 2
1960 - 1979............................... Actual Age - 3
Adjustments for years of birth after 1979 are made in a consistent
manner.
The same procedure is followed for immediate contracts based on the net
purchase payment and the value of an annuity unit on the issue date. If more
than one Sub-Account is to be used to fund an annuity, the procedure would be
repeated for each Sub-Account and annuity payments would be the total of those
generated in each Sub-Account.
For deferred contracts annuitizing under a life annuity option during the
first three years after issuance, the accumulated value will be subject to a
sales charge. (See "How much are the deductions for sales charges under deferred
contracts? " in the Prospectus)
Upon receipt of an election to exchange all or a portion of the annuity
units of one Sub-Account for those of another, MML will determine the dollar
value of the next annuity payment from the first Sub-Account on its due date,
multiply that value by the percentage of the annuity units to be transferred and
then credit the applicant with the number of annuity units in the Sub-Account to
which the transfer is being made, which would give an equal dollar value. The
number of annuity units equal to that dollar value would then be canceled in the
original Sub-Account. Subsequent payments would reflect the changes in annuity
unit values based on the changed number of annuity units in each Sub-Account.
How the Value of the Deferred Contract is Determined
The accumulated value of the deferred contract at any time prior to the
commencement of annuity payments can be determined by multiplying the total
number of accumulation units credited to the contract in each Sub-Account by the
then current accumulation unit values in each. Each owner will be advised at
least semi-annually of the number of accumulation units credited to each
contract owned, the current accumulation unit values and the total value of each
contract. Accumulation units are valued for each day that shares of the Fund are
valued and any contract owner may at any time obtain the most recent values from
the Annuity Service Center. Any applicable sales charges for surrendering the
contract must be deducted from this accumulated value to determine the amount
that would be received upon a surrender.
How the Accumulation Unit Value is Determined
The value of an accumulation unit in each Sub-Account was set at $1.00 on
the valuation date on which funds were first placed in the Sub-Account. The
value of an accumulation unit on any subsequent valuation date is determined by
multiplying the value of an accumulation unit on the immediately preceding
valuation date by the net investment factor for the valuation period just ended.
Before describing how this net investment factor is determined, we would
like to refer you to Appendix A of this Statement of Additional Information,
where an example is given of how the factor works. The factor's purpose is
essentially to provide a means of determining the daily fluctuations of the
accumulation unit values due to the investment performance of the Fund and any
charges made against the Sub-Account. The actual determination of the net
investment factor is as follows.
4
<PAGE>
At each valuation date, a net investment factor for each Sub-Account is
determined from the investment performance of the underlying Portfolio of the
Fund for the valuation period just ended. The net investment factor is
calculated by dividing (a) by (b) and then subtracting (c), where
(a) is the net asset value per share of the Portfolio at the end of the
valuation period, plus the amount per share of any dividend or capital gain
distribution made by the Fund for the Portfolio if the ex-dividend date occurs
during the valuation period, minus the amount per Portfolio share of any
realized or unrealized capital losses, minus the reserve per Portfolio share for
taxes on realized and unrealized capital gains;
(b) is the net asset value per Portfolio share at the beginning of the
valuation period, minus the reserve per Portfolio share for taxes at the
beginning of the valuation period;
(c) is .000020 multiplied by the number of days in the valuation period.
Since the net investment factor may be less than one if the combined
capital losses and deductions for any applicable taxes and daily charges exceed
the investment income and capital gains, the value of an accumulation unit on
any valuation date may be less than the value on the previous valuation date.
Distribution on Death of Contract Holder
The Deficit Reduction Act of 1984 ("DRA") requires that affected annuity
contracts issued after January 18, 1985 contain specific provisions for
distribution of the policy proceeds upon the death of the contract holder. In
order to be treated as an annuity contract for federal income tax purposes, the
Code requires that contracts provide that if the contract owner dies on or after
the retirement date and before the entire interest in the contract has been
distributed, the remaining portion must be distributed at least as rapidly as
under the method in effect on the contract owner's death. If the contract owner
dies before the retirement date, the entire interest in the contract must
generally be distributed within five (5) years after the contract owner's date
of death or be used to purchase an immediate annuity under which payments will
begin within one year of the contract owner's death and will be made for the
life of the beneficiary or for a period not extending beyond the life expectancy
of the beneficiary. If the beneficiary is the contract owner's surviving spouse,
the contract may be continued with the surviving spouse as the new contract
owner. Contracts issued after January 18, 1985, contain endorsements intended to
comply with these requirements of the Code. No regulations interpreting these
requirements of the Code have yet been issued and thus no assurance can be given
that the provisions contained in contracts issued after January 18, 1985,
satisfy all such Code requirements. The provisions contained in contracts issued
after January 18, 1985 will be reviewed and modified if necessary to assure that
they comply with the Code requirements when clarified by regulation or
otherwise.
As a result of the technical corrections to the DRA effective for
Contracts issued on or after January 19, 1985 (the effective date of the
original distribution provision under the DRA), the death of contract owner
distribution rules will not apply to annuity contracts under qualified plans,
qualified annuities, Keoghs, Tax Sheltered Annuities ("TSAs") and Individual
Retirement Annuities ("IRAs"). (However, these plans are subject to similar
required distribution rules.)
For Contracts issued on or after April 23, 1987, the following changes
apply. Where the contract owner is not an individual, the primary annuitant is
considered the holder for purposes of the rules discussed in this section. The
primary annuitant is defined as the individual, the events in whose life which
are of primary importance in affecting the timing and amount of the payout under
the Contract. In addition, when an individual is not the contract holder, a
change in the primary annuitant is treated as the death of the holder. Finally,
in the case of joint contract holders, the distribution rules will be applied at
the death of the first of the holders.
Valuing the Underlying Funds Shares
The shares of the Funds are valued at net asset value as of the end of
each Valuation Period. Each Fund's custodian provides these values daily. A
complete description of the valuation method used in valuing Fund shares may be
found in the prospectus of the respective Fund.
Independent Accountants
The audited financial statements of Panorama Separate Account and the statutory
financial statements of MassMutual included in this Statement of Additional
Information have been so included in reliance on the report of Coopers & Lybrand
L.L.P., Springfield, Massachusetts, independent accountants, given on the
authority of that firm as experts in accounting and auditing. Coopers &
Lybrand's report on the statutory financial statements of MassMutual includes
explanatory paragraphs relating to the use of statutory accounting practices
rather than generally accepted accounting principles.
5
<PAGE>
The statutory statements of income, changes in policyholders' contingency
reserves and cash flows of Connecticut Mutual Life Insurance Company for the
year ended December 31, 1995 (not presented separately herein) have been audited
by Arthur Andersen LLP, Hartford, Connecticut. This registration statement
includes their report of independent public accountants, given upon the
authority of said firm as experts in giving said reports.
PERFORMANCE MEASURES
MassMutual may show the performance for the Sub-Accounts Divisions of the
Separate Account in the following ways:
Standardized Average Annual Total Return
----------------------------------------
MassMutual will show the "Standardized Average Annual Total Return," formulated
as prescribed by the rules of the SEC, for each Division of the Separate
Account. The Standardized Average Annual Total Return is the effective annual
compounded rate of return that would have produced the cash redemption value
over the stated period had the performance remained constant throughout. The
calculation assumes a single $1,000 payment made at the beginning of the period
and full redemption at the end of the period. It reflects a deduction for the
sales charge, the Annual Contract Maintenance Charge and all other Fund,
Separate Account and Contract level charges except premium taxes, if any. The
Annual Contract Maintenance Charge is apportioned among the Sub-Accounts based
upon the percentages of in force Contracts investing in each of the
Sub-Accounts.
The following tables show the Standardized Average Annual Total Return for the
Sub-Accounts of the Separate Account for the period ended December 31, 1997.
1 Year 5 Years 10 Years
------ ------- --------
Growth 18.65% 17.52% 17.81%
Total Return 10.46% 9.68% 11.54%
Income 3.12% 6.27% 8.40%
Money Market - 0.44% 2.91% 4.79%
Additional Performance Measures
-------------------------------
The performance figures discussed below, are calculated on the basis of the
historical performance of the Funds.
The difference between the first set, ANNUALIZED RETURNS on Accumulation Unit
Values, and the second set, the NONSTANDARDIZED ANNUAL and AVERAGE ANNUAL TOTAL
RETURNS, is that the second set is based on specified premium patterns and
includes the deduction of the Annual Contract Maintenance Charge, whereas the
first set does not. Additional details follow.
Accumulation Unit Values: Annualized Returns
--------------------------------------------
MassMutual will show the ANNUALIZED RETURN, or average annual change in
Accumulation Unit values, with respect to one or more periods. For one year, the
Annualized Return is the effective annual rate of return. For periods greater
than one year, the Annualized Return is the effective annual compounded rate of
return for the periods stated. Since the value of an Accumulation Unit reflects
the Separate Account and Fund expenses (see Fee Table of the Panorama
Prospectus), the Percentage Change and Annualized Returns also reflect these
expenses. However, these percentages do not reflect the Annual Contract
Maintenance Charge and the sales charge or premium taxes (if any), which if
included would reduce the percentages reported by MassMutual.
6
<PAGE>
Annualized Accumulation Unit Value Return
-----------------------------------------
For Periods Ending 12/31/97
---------------------------
<TABLE>
<CAPTION>
Portfolio Since
(Inception) 1 Year 3 Years 5 Years 10 Years Inception
----------- ------ ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Growth (1/21/82) 25.45% 26.53% 19.25% 17.80% 17.42%
Total Return (9/30/82) 17.94% 16.73% 12.39% 12.97% 13.22%
Oppenheimer Bond (4/3/85) 8.46% 9.43% 7.44% 8.71% 8.48%
Oppenheimer Money (4/3/85)* 4.56% 4.61% 3.93% 5.01% 4.37%
</TABLE>
*Although the Oppenheimer Money Fund commenced operations on 4/3/85, the
information necessary to calculate returns is available only for 1987 and later
years.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Sub-Account of the Separate
Account is the effective annual rate of return that would have produced the
ending Accumulated Value of the stated one-year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Sub-Account is the
effective annual compounded rate of return that would have produced the ending
Accumulated Value over the stated period had the performance remained constant
throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the NON-
STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same period
due to the effect of the Annual Contract Maintenance Charge. Additionally, the
magnitude of this difference will depend on the size of the Accumulated Value
from which the Annual Contract Maintenance Charge is deducted.
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
Performance information for the Separate Account Divisions may be: (a) compared
to other variable annuity separate accounts or other investment products
surveyed by Lipper Analytical Services, a nationally recognized independent
reporting service or similar services that rank mutual funds and other
investment companies by overall performance, investment objectives and assets;
(b) tracked by other ratings services, companies, publications or persons who
rank separate accounts or other investment products on overall performance or
other criteria; and (c) included in data bases that can be used to produce
reports and illustrations by organizations such as CDA Wiesenberger. Performance
figures will be calculated in accordance with standardized methods established
by each reporting service.
YIELD AND EFFECTIVE YIELD
MassMutual may show yield and effective yield figures for the Money Market
Sub-Account. "Yield" refers to the income generated by an investment in the
Money Market Sub-Account over a seven-day period, which is then "annualized."
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective" yield is calculated similarly but,
when annualized, the income earned by an investment in the Money Market
Sub-Account is assumed to be re-invested. Therefore the effective yield will be
slightly higher than the yield because of the compounding effect of this assumed
reinvestment.
These figures reflect a deduction for all Fund, Separate Account and Contract
level charges, assuming the Contract remains in-force. The figures do not
reflect the contingent deferred sales load or premium tax deductions (if any),
which if included would reduce the percentages reported.
The following table shows the 7-day Yield and Effective Yield for the Money
Market Sub-Account for the period ended December 31, 1997:
Before Annual Maintenance Charge After Annual Maintenance Charge
(Annual Maintenance Charge is 0.114%)
7-Day Yield:................. 3.76% 7-Day Yield:................ 3.65%
7-Day Effective Yield........ 3.83% 7-Day Effective Yield....... 3.72%
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
7
<PAGE>
APPENDIX
GENERAL FORMULAE
(1) Hypothetical Example of the Calculation of the Accumulation Unit Value
for a Sub-Account.
Assume that the accumulation unit value of a sub-account at the beginning
of a valuation period was $1.135000 and that the valuation period was a day.
Suppose that at the end of that day the net asset value per fund share is
$1.250000 and that there is a capital gain of $.000066 per fund share and a
capital loss per fund share of $.000003 for that day, and that the reserve per
fund share for taxes is $.000020 at the end of that day. Also assume that at the
beginning of the valuation period the net asset value per fund share was
$1.249536 and the reserve per fund share was $.000002.
The net investment factor for the sub-account for this valuation period
would be:
1.250000 + 000066 - 000003 - 000020
----------------------------------- - .000020 = 1.000387
1.249536 - 000002
The accumulation unit value at the end of the valuation period would be
equal to the value at the beginning of the
period ($1.135000 multiplied by the net
investment factor for the period
(1.000387), which is $1.135439.
(2) General Formulae for Computing the Amounts of the Monthly Annuity Payments
under Deferred Contracts.
Number of Annuity Accumulated Value on the Maturity Date
Units = divided by 1,000 x Purchase Rate
------------------------------------
Annuity Unit Value on the Maturity Date
<TABLE>
<S> <C> <C> <C> <C>
Net Investment Factor for
the Preceding Valuation Period
Value of Annuity Unit on Preceding ------------------------------
Annuity Unit Value = Valuation Date x 1.00 plus rate of interest
for number of days in
current Valuation Period
at 3.5% yearly rate.
Dollar Amount of = Number of Annuity Units in each Sub- x Annuity Unit Value on
Annuity Payment Account Payment Date in
each Sub-Account
</TABLE>
The determination of the Annuity Unit value and the annuity payment may
be illustrated by the following hypothetical example.
Assume that the accumulation value is $34,500. The annuitant is 70 years
old on the first payment date, and the date of birth is 1907. He desires
a straight life variable annuity, using one sub-account.
As described under "How are immediate contract annuity payments
determined?", the age 70 rate ($6.37/thousand) is used. It is unadjusted
for year of birth since the year of birth is between 1900 and 1919.
If the value of a sub-account annuity unit on the date of issue is
$1.100000, then the number of annuity units is 6.37 times 34.5 divided by
$1.100000 or 199.786.
Assume that the sub-account net investment factor for the valuation
period preceding the Valuation Date at which an annuity payment is being
calculated is 1.000179. Suppose the Annuity Unit value on the preceding
Valuation Date is $1.105000. The product of the net investment factor and
this Annuity Unit value is $1.105198. This is then divided by 1.000094
which is 1.00 plus the rate of interest for a one day valuation period to
neutralize the assumed investment rate of 3.5% per annum already taken
into account in determining the number of Annuity Units, producing a
current Annuity Unit value of $1.105094.
8
<PAGE>
The current monthly payment is then determined by multiplying the fixed
number of Annuity Units by the current Annuity Unit value or 199.786
times $1.105094, which produces a current monthly payment of $220.78.
This process would be repeated for each sub-account if more than one were
to be used and the amounts arrived at would be totaled.
(3) General Formulae and Hypothetical Illustration of Additional Benefit
under Option C Unit Refund Life Annuity.
Following the annuitant's death, the designated beneficiary will receive
an additional payment under Option C of the then dollar value of a number
of Annuity Units equal to (a) minus (b), if such difference is positive
where:
Accumulated Value on the Maturity Date
(a) = --------------------------------------
Annuity Unit Value on the Maturity Date
(b) = number of Annuity Units represented by each monthly annuity
payment made x number of monthly payments made
For example, if $10,000 were applied to the purchase of an annuity under
this option, the value of an Annuity Unit was $2.00 on the date applied,
the number of Annuity Units represented by each monthly payment was 30.5,
10 monthly payments were made prior to the date of death, and the value
of an Annuity Unit on the valuation date following receipt of proof of
the annuitant's death was $2.05, the amount paid to the beneficiary would
be $9,624.75 computed as follows:
<TABLE>
<S> <C> <C><C> <C> <C>
{($10,000 : $2.00) - (30.5 x 10)} x $2.05 =
(5,000 - 305) x $2.05 =
4,695 x $2.05 = $9,624.75
</TABLE>
9
<PAGE>
Panorama Hypothetical Projections
GROWTH
------
$2,000 purchase payment made each December
31
First payment made on Dec. 31, 1987
Values prior to current Non-Standardized
--------------------
year's purchase payment One Average
-----------------------
Year Annual
Cumulative Accumu- Total Total
lated
Date Payments Value Return Return
- -----------------------------------------------------
12/31/88 $2,000 $2,233 11.63% 11.63%
12/31/89 $4,000 $5,666 33.88% 25.59%
12/31/90 $6,000 $6,969 -9.09% 7.68%
12/31/91 $8,000 $12,206 36.08% 17.63%
12/31/92 $10,000 $15,806 11.26% 15.67%
12/31/93 $12,000 $21,379 20.07% 16.77%
12/31/94 $14,000 $23,097 -1.21% 12.55%
12/31/95 $16,000 $34,238 36.42% 16.79%
12/31/96 $18,000 $42,801 18.11% 17.01%
12/31/97 $20,000 $56,162 25.36% 18.20%
INCOME
------
$2,000 purchase payment made each December
31
First payment made on Dec. 31, 1987
Values prior to current Non-Standardized
----------------------
year's purchase payment One Average
-----------------------
Year Annual
Cumulative Accumu- Total Total
lated
Date Payments Value Return Return
- ---------------------------------------------------------
12/31/88 $2,000 $2,124 6.18% 6.18%
12/31/89 $4,000 $4,599 11.53% 9.67%
12/31/90 $6,000 $7,030 6.53% 8.13%
12/31/91 $8,000 $10,504 16.33% 11.20%
12/31/92 $10,000 $13,180 5.41% 9.35%
12/31/93 $12,000 $16,995 11.95% 10.04%
12/31/94 $14,000 $18,451 -2.86% 6.91%
12/31/95 $16,000 $23,713 15.95% 8.70%
12/31/96 $18,000 $26,710 3.88% 7.81%
12/31/97 $20,000 $31,099 8.32% 7.89%
TOTAL RETURN
------------
$2,000 purchase payment made each December
31
First payment made on Dec. 31, 1987
Values prior to current Non-Standardized
---------------------
year's purchase payment One Average
----------------------- Year Annual
Cumulative Accumu- Total Total
lated
Date Payments Value Return Return
- ---------------------------------------------------------
12/31/88 $2,000 $2,177 8.83% 8.83%
12/31/89 $4,000 $5,059 21.13% 16.72%
12/31/90 $6,000 $7,003 -0.80% 7.93%
12/31/91 $8,000 $11,470 27.41% 14.95%
12/31/92 $10,000 $14,697 9.11% 13.12%
12/31/93 $12,000 $19,198 14.98% 13.60%
12/31/94 $14,000 $20,700 -2.35% 9.79%
12/31/95 $16,000 $28,025 23.46% 12.38%
12/31/96 $18,000 $32,712 8.95% 11.77%
12/31/97 $20,000 $40,899 17.83% 12.69%
MONEY MARKET
------------
$2,000 purchase payment made each December
31
First payment made on Dec. 31, 1987
Values prior to current Non-Standardized
-----------------------
year's purchase payment One Average
----------------------- Year Annual
Cumulative Accumu- Total Total
lated
Date Payments Value Return Return
- --------------------------------------------------------------
12/31/88 $2,000 $2,084 4.18% 4.18%
12/31/89 $4,000 $4,393 7.57% 6.41%
12/31/90 $6,000 $6,817 6.64% 6.52%
12/31/91 $8,000 $9,254 4.95% 5.91%
12/31/92 $10,000 $11,571 2.82% 4.90%
12/31/93 $12,000 $13,858 2.11% 4.13%
12/31/94 $14,000 $16,365 3.20% 3.90%
12/31/95 $16,000 $19,226 4.69% 4.07%
12/31/96 $18,000 $22,113 4.18% 4.09%
12/31/97 $20,000 $25,172 4.39% 4.14%
10
<PAGE>
Report Of Independent Accountants
To the Contract Owners of Panorama Separate Account and
The Board of Directors of Massachusetts Mutual Life Insurance Company
We have audited the statements of assets and liabilities of the Panorama Total
Return Sub-Account, Panorama Growth Sub-Account, Oppenheimer (formerly Panorama)
Money Market Sub-Account and Oppenheimer (formerly Panorama) Income Sub-Account
(the "Sub-Accounts") of the Panorama Separate Account as of December 31, 1997,
the related statements of operations for the year then ended, and the statements
of changes in net assets for each of the two years in the period then ended.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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. Our procedures included
verification of securities owned as of December 31, 1997, by confirmation with
Panorama Series Fund, Inc. and Oppenheimer Variable Account Funds. 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 audits provide 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 each of the Sub-Accounts of the
Panorama Separate Account as of December 31, 1997, the results of their
operations for the year then ended and the changes in net assets for each of the
two years in the period then ended, in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
March 11, 1998
1
<PAGE>
Panorama Separate Account
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments, at Market (Notes 3A and 3B):
Panorama Total Return Sub-Account
405,104,509 shares (Cost $683,425,685) $ 810,209,019
Panorama Growth Sub-Account
112,119,903 shares (Cost $304,502,575) 421,313,664
---------------------
1,231,522,683
---------------------
Oppenheimer Money Market Sub-Account
42,539,829 shares (Cost $42,539,829) 42,539,829
Oppenheimer Income Sub-Account
5,364,553 shares (Cost $61,669,475) 63,891,831
---------------------
106,431,660
---------------------
Total assets 1,337,954,343
---------------------
LIABILITIES
Due to Massachusetts Mutual Life Insurance Company 823,860
---------------------
NET ASSETS $ 1,337,130,483
---------------------
Net assets consisted of: Units Unit values Net assets
----- ----------- ----------
Panorama Total Return Sub-Account
Tax-Qualified Plan Contracts 121,266,585 6.653722 $ 806,874,144
Non Tax-Qualified Plan Contracts 41,179 6.286498 258,872
Annuity Reserve Tax-Qualified Plan Contracts 222,384 6.653722 1,479,681
Annuity Reserve Non Tax-Qualified Plan Contracts 166,330 6.286498 1,045,633
Panorama Growth Sub-Account
Tax-Qualified Plan Contracts 32,527,443 12.912257 $ 420,002,704
Non Tax-Qualified Plan Contracts 7,258 11.458962 83,169
Annuity Reserve Tax-Qualified Plan Contracts 51,789 12.912257 668,713
Annuity Reserve Non Tax-Qualified Plan Contracts 24,179 11.458962 277,066
Oppenheimer Money Market Sub-Account
Tax-Qualified Plan Contracts 16,944,911 2.495743 $ 42,290,143
Annuity Reserve Tax-Qualified Plan Contracts 120,823 2.495743 301,543
Oppenheimer Income Sub-Account
Tax-Qualified Plan Contracts 14,063,584 4.519364 $ 63,558,455
Non Tax-Qualified Plan Contracts 1,921 4.199566 8,067
Annuity Reserve Tax-Qualified Plan Contracts 44,642 4.519364 201,754
Annuity Reserve Non Tax-Qualified Plan Contracts 19,178 4.199566 80,539
---------------
$ 1,337,130,483
===============
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Panorama Separate Account
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama Panorama Oppenheimer Oppenheimer
Total Return Growth Money Market Income
Sub-Account Sub-Account Sub-Account Sub-Account
Investment Income ----------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Dividends (Note 3B) $ 88,303,302 $ 28,612,190 $ 2,401,174 $ 4,096,604
Expenses
Mortality and expense risk fees (Note 4) 5,649,389 2,546,053 367,737 471,384
-------------- -------------- -------------- --------------
Net investment income (Note 3C) 82,653,913 26,066,137 2,033,437 3,625,220
-------------- -------------- -------------- --------------
Net realized and unrealized gain on investments
Net realized gain on investments (Notes 3B, 3C and 6) 18,660,334 17,760,731 -- 315,231
Change in net unrealized appreciation of investments 27,950,467 40,828,264 -- 1,203,968
-------------- -------------- -------------- --------------
Net gain on investments 46,610,801 58,588,995 -- 1,519,199
-------------- -------------- -------------- --------------
Net increase in net assets resulting from operations $ 129,264,714 $ 84,655,132 $ 2,033,437 $ 5,144,419
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Panorama Separate Account
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Panorama Panorama Oppenheimer Oppenheimer
Total Return Growth Money Market Income
Sub-Account Sub-Account Sub-Account Sub-Account
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income $ 82,653,913 $ 26,066,137 $ 2,033,437 $ 3,625,220
Net realized gain on investments 18,660,334 17,760,731 -- 315,231
Change in net unrealized appreciation of investments 27,950,467 40,828,264 -- 1,203,968
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations 129,264,714 84,655,132 2,033,437 5,144,419
------------- ------------- ------------- -------------
Capital transactions:
Net contract payments 31,550,419 24,973,448 4,406,459 2,605,851
Withdrawal of funds (80,508,418) (31,100,491) (12,013,799) (9,934,486)
Divisional transfers (15,191,952) 19,317,582 (1,639,706) (2,564,414)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from
capital transactions (64,149,951) 13,190,539 (9,247,046) (9,893,049)
------------- ------------- ------------- -------------
Total increase (decrease) 65,114,763 97,845,671 (7,213,609) (4,748,630)
NET ASSETS, beginning of the year 744,543,567 323,185,981 49,805,295 68,597,445
------------- ------------- ------------- -------------
NET ASSETS, end of the year $ 809,658,330 $ 421,031,652 $ 42,591,686 $ 63,848,815
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Panorama Separate Account
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
Sub-Accounts
----------------------------------------------------------------
Total Return Growth Money Market
------------- ------------- -------------------------------
Panorama Panorama Panorama Oppenheimer
Total Return Growth Money Market/(1)/ Money/(2)/
------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss) $ 1,064,477 $ 519,974 $ 893,394 $ 1,222,646
Net realized gain (loss) on investments 18,777,130 9,904,086 - -
Change in net unrealized appreciation/depreciation
of investments 43,204,346 37,566,389 - -
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations 63,045,953 47,990,449 893,394 1,222,646
------------- ------------- ------------- -------------
Capital transactions:
Net contract payments 44,282,826 29,342,565 4,027,322 2,404,808
Withdrawal of funds (61,217,274) (18,707,315) (2,940,988) (4,330,183)
Divisional transfers (9,387,095) 17,549,767 (54,002,573) 50,508,024
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting from
capital transactions (26,321,543) 28,185,017 (52,916,239) 48,582,649
------------- ------------- ------------- -------------
Total increase (decrease) 36,724,410 76,175,466 (52,022,845) 49,805,295
NET ASSETS, at beginning of the year 707,819,157 247,010,515 52,022,845 -
------------- ------------- ------------- -------------
NET ASSETS, at end of the year $ 744,543,567 $ 323,185,981 $ - $ 49,805,295
============= ============= ============= =============
<CAPTION>
Sub-Accounts
-------------------------------
Income
-------------------------------
Panorama Oppenheimer
Income/(3)/ Bond/(4)/
------------- -------------
<S> <C> <C>
Increase (decrease) in net assets Operations:
Net investment income (loss) $ (182,470) $ 2,877,907
Net realized gain (loss) on investments (4,403,059) 69,777
Change in net unrealized appreciation/depreciation
of investments 1,897,300 1,018,389
------------- -------------
Net increase (decrease) in net assets resulting from operations (2,688,229) 3,966,073
------------- -------------
Capital transactions:
Net contract payments 2,519,006 1,720,002
Withdrawal of funds (5,245,363) (4,781,129)
Divisional transfers (72,360,622) 67,692,499
------------- -------------
Net increase (decrease) in net assets resulting from
capital transactions (75,086,979) 64,631,372
------------- -------------
Total increase (decrease) (77,775,208) 68,597,445
NET ASSETS, at beginning of the year 77,775,208 -
------------- -------------
NET ASSETS, at end of the year $ - $ 68,597,445
============= =============
</TABLE>
/(1)/ For the period 1/1/96-5/31/96, the Money Market Sub-Account invested in
shares of the Panorama Series Money Market Portfolio which has since been
liquidated.
/(2)/ For the period 6/1/96-12/31/96, the Money Market Sub-Account invested in
shares of the Oppenheimer Money Fund.
/(3)/ For the period 1/1/96-5/31/96, the Income Sub-Account invested in shares
of the Panorama Series Income Portfolio which has since been liquidated.
/(4)/ For the period 6/1/96-12/31/96, the Income Sub-Account invested in shares
of the Oppenheimer Bond Fund.
See Notes to Financial Statements.
F-5
<PAGE>
Panorama Separate Account
Notes To Financial Statements
1. HISTORY
Panorama Separate Account (the "Separate Account") was established as a
separate investment account of Connecticut Mutual Life Insurance Company
("CML"). On February 29, 1996, CML merged with and into Massachusetts Mutual
Life Insurance Company ("MassMutual"). Upon the merger, CML's existence
ceased and MassMutual became the surviving company under the name
Massachusetts Mutual Life Insurance Company. The Separate Account became a
separate account of MassMutual. The Separate Account operates as a registered
unit investment trust pursuant to the Investment Company Act of 1940 ("the
1940 Act") and the rules promulgated thereunder.
2. INVESTMENT OF THE SEPARATE ACCOUNT'S ASSETS
The Separate Account maintains four Sub-Accounts. Each Sub-Account invests in
shares of certain investment portfolios of two investment companies: the
Panorama Series Fund, Inc. ("Panorama Fund") (prior to May 1, 1996 named
Connecticut Mutual Financial Services Series Fund I, Inc.) and the
Oppenheimer Variable Account Funds ("Oppenheimer Trust"). Panorama Fund is a
registered, open-end, diversified management, investment company with two of
its portfolios currently available to Panorama contract owners: Total Return
and Growth. Oppenheimer Trust is a registered, open-end, diversified
management, investment company with two of its funds currently available to
Panorama contract owners: Oppenheimer Money and Oppenheimer Bond.
OppenheimerFunds, Inc., a controlled subsidiary of MassMutual, serves as the
investment adviser for the Panorama Fund and Oppenheimer Trust.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Separate Account in preparation of the financial
statements in conformity with generally accepted accounting principles.
A. Investment Valuation
Investments in Panorama Fund and Oppenheimer Trust are each stated at market
value which is the net asset value per share of each of the respective
underlying portfolios.
B. Accounting for Investments
Investment transactions are accounted for on the trade date and identified
cost is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
C. Federal Income Taxes
Operations of the Separate Account form a part of the total operations of
MassMutual and the Separate Account is not taxed separately. MassMutual is
taxed as a life insurance company under the provisions of the 1986 Internal
Revenue Code, as amended. The Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains attributable to contracts which depend on the
Separate Account's investment performance. Accordingly, no provision for
federal income tax has been made. MassMutual may, however, make such a charge
in the future if an unanticipated change of current law results in a company
tax liability attributable to the Separate Account.
D. Annuity Reserves
Annuity reserves are developed by using accepted actuarial methods and are
computed using the 1971 Individual Annuity Mortality Table of the 1983
Individual Annuity Mortality Table (a), depending on the year of issue.
6
<PAGE>
Notes To Financial Statements (Continued)
E. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires that management 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 amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
4. CHARGES
On immediate contracts (contracts in which annuity payments commence
immediately), deductions for sales charges and premium taxes, on contracts
issued to residents of certain states, are made from contract payments at the
time of purchase. This is in addition to a one-time policy fee of $70.
All deferred contracts (contracts in which annuity payments commence in the
future) are subject to the annual maintenance charge (currently $40) and the
transaction charge (currently $10.) The maintenance charge is made to cover
the administrative costs while the transaction charge is designed to offset
the costs of processing requests for transfers of the accumulated value of a
contract among sub-accounts during the accumulation period, and requests for
partial redemptions. The transaction charge may be waived if certain
withdrawal criteria are met.
For assuming mortality and expense risks, MassMutual deducts a charge equal,
on an annual basis, to .73% of the daily net asset value of the Separate
Account's assets.
5. DISTRIBUTION AGREEMENTS
MML Distributors, LLC ("MML Distributors"), a wholly-owned subsidiary of
MassMutual, serves as principal underwriter of the contracts pursuant to an
underwriting and servicing agreement among MML Distributors, MassMutual and
Panorama Separate Account (prior to May 1, 1996, MML Distributors was known
as Connecticut Mutual Financial Services, LLC). MML Distributors is
registered with the Securities and Exchange Commission (the "SEC") as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"). MML
Distributors may enter into selling agreements with other broker-dealers who
are registered with the SEC and are members of the NASD in order to sell the
contracts.
Effective March 1, 1996, MML Investors Services, Inc. ("MMLISI") serves as
co-underwriter of the contracts pursuant to underwriting and servicing
agreements among MMLISI, MassMutual and Panorama Separate Account. MMLISI is
registered with the SEC as a broker dealer under the Securities Exchange Act
of 1934 and is a member of the NASD. Registered representatives of MMLISI
sell the contracts as authorized variable life insurance agents under
applicable state insurance laws.
Pursuant to underwriting and servicing agreements, commissions or other fees
due to registered representatives for selling and servicing the contracts are
paid by MassMutual on behalf of MML Distributors or MMLISI. MML Distributors
and MMLISI also receive compensation for their actions as underwriters of the
contracts.
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
Panorama Panorama Oppenheimer Oppenheimer
For The Year Ended Total Return Growth Money Market Income
December 31, 1997 Sub-Account Sub-Account Sub-Account Sub-Account
----------------- --------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
Cost of purchases $ 56,983,554 $ 63,520,550 $ 28,077,827 $ 7,633,684
Proceeds from sales $ 60,632,105 $ 77,657,318 $ 35,313,340 $ 8,487,165
</TABLE>
7
<PAGE>
Notes To Financial Statements (Continued)
7. NET DECREASE IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
Panorama Panorama Oppenheimer Oppenheimer
For The Year Ended Total Return Growth Money Market Income
December 31, 1997 Sub-Account Sub-Account Sub-Account Sub-Account
- ----------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Units purchased $ 5,212,786 $ 2,242,880 $ 1,770,473 $ 630,428
Units withdrawn (13,094,143) (2,712,766) (4,919,198) (2,350,706)
Units transferred between divisions (4,308,692) 440,675 (612,564) (994,004)
------------- ------------- ------------- -------------
Net decrease $ (12,190,049) $ (29,211) $ (3,761,289) $ (2,714,282)
Units, at beginning of the year 133,497,813 32,563,912 20,706,200 16,779,787
------------- ------------- ------------- -------------
Units, at end of the year $ 121,307,764 $ 32,534,701 $ 16,944,911 $ 14,065,505
============= ============= ============= =============
</TABLE>
8
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
STATUTORY FINANCIAL STATEMENTS
as of December 31, 1997 and 1996
and for the years ended December 31, 1997, 1996 and 1995
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders of
Massachusetts Mutual Life Insurance Company
We have audited the accompanying statutory statements of financial position of
Massachusetts Mutual Life Insurance Company as of December 31, 1997 and 1996,
and the related statutory statements of income, changes in policyholders'
contingency reserves, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the statutory
financial statements of Connecticut Mutual Life Insurance Company ("Connecticut
Mutual") for the year ended December 31, 1995, which statements reflect total
revenue and net gain from operations constituting 26% and 22% of the related
Company totals after restatement for the merger of the two companies. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amounts included for Connecticut
Mutual, is based solely on the report of the other auditors.
We conducted our audits 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 audits and the report of the other auditors provide a
reasonable basis for our opinion.
As described more fully in Note 1, these financial statements were prepared in
conformity with statutory accounting practices of the National Association of
Insurance Commissioners and the accounting practices prescribed or permitted by
the Division of Insurance of the Commonwealth of Massachusetts and, for the
pre-merger balances of Connecticut Mutual, the Department of Insurance of the
State of Connecticut (collectively "statutory accounting practices"), which
practices differ from generally accepted accounting principles. The effects on
the financial statements of the variances between the statutory basis of
accounting and generally accepted accounting principles, although not reasonably
determinable at this time, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of Massachusetts Mutual Life Insurance Company at December 31, 1997 and 1996, or
the results of its operations or its cash flows for each of the three years in
the period ended December 31, 1997.
In our opinion, based upon our audits and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Massachusetts Mutual Life Insurance Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, on the
statutory basis of accounting described in Note 1.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 6, 1998
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1997 1996
---- ----
(In Millions)
Assets:
Bonds............................................. $23,890.3 $24,299.3
Common stocks..................................... 354.7 336.6
Mortgage loans.................................... 4,863.7 4,852.8
Real estate....................................... 1,697.7 1,840.9
Other investments................................. 1,963.8 1,425.6
Policy loans...................................... 4,950.4 4,752.3
Cash and short-term investments................... 1,941.2 1,075.4
--------- ---------
39,661.8 38,582.9
Investment and insurance amounts receivable....... 1,064.9 1,102.4
Other assets...................................... 104.8 97.9
--------- ---------
40,831.5 39,783.2
Separate account assets........................... 16,803.1 13,563.5
--------- ---------
$57,634.6 $53,346.7
========= =========
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION, Continued
December 31,
1997 1996
---- ----
(In Millions)
Liabilities:
Policyholders' reserves and funds................. $33,783.2 $33,341.5
Policyholders' dividends.......................... 954.1 885.3
Policyholders' claims and other benefits.......... 353.4 373.8
Federal income taxes.............................. 436.5 440.7
Asset valuation reserve........................... 840.6 689.2
Investment reserves............................... 132.8 208.4
Amounts due on investments puchased and
other liabilities................................ 1,457.9 1,206.1
--------- ---------
37,958.5 37,145.0
Separate account reserves and liabilities......... 16,802.8 13,563.1
--------- ---------
54,761.3 50,708.1
Policyholders' contingency reserves............... 2,873.3 2,638.6
--------- ---------
$57,634.6 $53,346.7
========= =========
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Revenue:
Premium income............................................ $6,764.8 $6,328.6 $5,727.7
Net investment and other income........................... 2,904.4 2,861.1 2,898.4
-------- -------- --------
9,669.2 9,189.7 8,626.1
-------- -------- --------
Benefits and expenses:
Policy benefits and payments.............................. 6,597.3 6,048.2 5,152.2
Addition to policyholder's reserves and funds............. 720.8 854.7 1,205.4
Commissions and operating expenses........................ 766.1 763.5 833.7
State taxes, licenses and fees............................ 81.5 96.4 89.4
Merger restructuring costs................................ - 66.1 44.0
-------- -------- --------
8,165.7 7,828.9 7,324.7
-------- -------- --------
Net gain before federal income taxes and dividends........ 1,503.5 1,360.8 1,301.4
Federal income taxes...................................... 284.4 276.7 206.2
-------- -------- --------
Net gain from operations before dividends................. 1,219.1 1,084.1 1,095.2
Dividends to policyholders................................ 919.5 859.9 819.0
-------- -------- --------
Net gain from operations.................................. 299.6 224.2 276.2
Net realized capital gain (loss).......................... (42.5) 40.3 (85.8)
-------- -------- --------
Net income................................................ $ 257.1 $ 264.5 $ 190.4
======== ======== ========
</TABLE>
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CHANGES
IN POLICYHOLDERS' CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Policyholder's contingency reserves, beginning of year.... $2,638.6 $2,600.9 $2,569.1
-------- -------- --------
Increases (decreases) due to:
Net income............................................... 257.1 264.5 190.4
Net unrealized capital gain (loss)....................... 119.1 (1.7) 88.7
Merger restructuring costs, net of fax................... - - (45.4)
Change in asset valuation and investment reserves........ (76.0) (142.4) (75.6)
Change in prior year policyholders' reserves............. (55.4) (72.2) (108.2)
Change in non-admitted assets and other.................. (10.1) (10.5) (18.1)
-------- -------- --------
234.7 37.7 31.8
-------- -------- --------
Policyholders' contingency reserves, end of year.......... $2,873.3 $2,638.6 $2,600.9
======== ======== ========
</TABLE>
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Operating acitivites:
Net income............................................... $ 257.1 $ 264.5 $ 190.4
Addition to policyholders' reserves and funds,
net of transfers to separate accounts................... 421.3 426.7 575.8
Net realized capital (gain) loss......................... 42.5 (40.3) 85.8
Other changes............................................ (58.1) (232.8) (25.2)
--------- --------- ---------
Net cash provided by operating activities................ 662.8 418.1 826.8
--------- --------- ---------
Investing activities:
Purchases of investments and loans....................... (12,292.7) (10,171.5) (10,364.2)
Sales or maturities of investments and receipts
from repayment of loans................................. 12,545.7 8,539.3 9,671.1
--------- --------- ---------
Net cash provided by (used in) investing activities...... 253.0 (1,632.2) (693.1)
--------- --------- ---------
Financing activities:
Repayments of long-term debt............................. (50.0) (53.3) (46.4)
--------- --------- ---------
Net cash used by financing activities.................... (50.0) (53.3) (46.4)
--------- --------- ---------
Increase (decrease) in cash and short-term investments... 865.8 (1,267.4) 87.3
Cash and short-term investments, beginning of year....... 1,075.4 2,342.8 2,255.5
--------- --------- ---------
Cash and short-term investments, end of year............. $ 1,941.2 $ 1,075.4 $ 2,342.8
========= ========= =========
</TABLE>
See Notes to Statutory Financial Statements.
<PAGE>
Notes To Statutory Financial Statements
Massachusetts Mutual Life Insurance Company ("the Company") is a mutual life
insurance company and as such has no shareholders. The Company's primary
business is individual life insurance, annuity and disability income products
distributed primarily through career agents. The Company also provides a wide
range of pension products and services, as well as investment services to
individuals, corporations and institutions in all 50 states and the District of
Columbia.
On March 1, 1996, the operations of the former Connecticut Mutual Life Insurance
Company ("Connecticut Mutual") were merged into the Company. This merger was
accounted for under the pooling of interests method of accounting. For the
purposes of this presentation, these financial statements reflect historical
amounts giving retroactive effect as if the merger had occurred on January 1,
1995 in conformity with the practices of the National Association of Insurance
Commissioners and the accounting practices prescribed or permitted by the
Division of Insurance of the Commonwealth of Massachusetts. In 1996,
merger-related expenses totaling $66.1 million were recorded in the Statutory
Statement of Income. In 1995, merger-related expenses incurred by Massachusetts
Mutual (the Company prior to the merger) of $44.0 million, were recorded in the
Statutory Statement of Income and the expenses incurred by Connecticut Mutual of
$45.4 million, net of tax, were recorded as a component of changes in
policyholders' contingency reserves, as permitted by each company's regulatory
authority. On the merger date, policyholders' reserves attributable to
disability income contracts were strengthened by $75.0 million, investment
reserves for real estate were increased by $49.8 million and net prepaid pension
assets were increased by $10.4 million with all adjustments reflected as a
change to policyholders' contingency reserves. The separate results of each
company prior to the merger for the year ended December 31, 1995, were as
follows: (a) revenue was $6,443.8 million for Massachusetts Mutual and $2,182.3
million for Connecticut Mutual; (b) net income was $160.7 million for
Massachusetts Mutual and $29.6 million for Connecticut Mutual and (c)
policyholders' contingency reserves increased by $143.7 million for
Massachusetts Mutual and decreased by $112.0 million for Connecticut Mutual.
On March 31, 1996, the Company sold MassMutual Holding Company Two, Inc., a
wholly-owned subsidiary, and its subsidiaries, including Mirus Life Insurance
Company (formerly the MML Pension Insurance Company; currently doing business as
"UniCARE"), which comprised the Company's group life and health business, to
WellPoint Health Networks, Inc. The Company received total consideration of
$402.2 million ($340.0 million in cash and $62.2 million in notes receivable)
and recognized a before tax gain of $187.9 million. The Company, pursuant to a
1994 reinsurance agreement, cedes its group life, accident and health business
to UniCARE. The Company's investment in MassMutual Holding Company Two, Inc.
amounted to $187.8 million at December 31, 1995; its gain from operations
included a $41.0 million dividend received from MIRUS in 1995. Additionally,
this investment produced an unrealized gain of $13.9 million in 1995.
1. SUMMARY OF ACCOUNTING PRACTICES
The accompanying statutory financial statements, except as to form, have been
prepared in conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Division of Insurance of the Commonwealth of
Massachusetts and, for the pre-merger balances of Connecticut Mutual, the
Department of Insurance of the State of Connecticut (collectively "statutory
accounting practices"), which practices were at one time also considered to be
in conformity with generally accepted accounting principles ("GAAP").
The accompanying statutory financial statements are different in some respects
from GAAP financial statements. The more significant differences are as follows:
(a) acquisition costs, such as commissions and other costs directly related to
acquiring new business, are charged to current operations as incurred, whereas
GAAP would require these expenses to be capitalized and recognized over the life
of the policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requests they be valued at fair value; (d)
deferred income taxes are not provided for book-tax timing differences as would
be required by GAAP, and (e) payments received for universal and variable life
products, variable annuities and investment related products are reported as
premium revenue, whereas under GAAP, these payments would be recorded as
deposits to policyholders' account balances.
The NAIC is currently engaged in an extensive project ("Codification") to codify
statutory accounting principles with a goal of providing a comprehensive guide
of statutory accounting principles for use by insurers in all states. This
comprehensive guide, which has not been approved by the NAIC or any state
insurance department, includes seventy-two Statements of Statutory Accounting
Principles ("SSAPs") and is expected to be effective no earlier than January 1,
1999. The effect of adopting these SSAPs shall be reported as an adjustment to
surplus on the effective date. Management is currently reviewing the impact of
Codification. However, since the SSAPs have not been finalized, the ultimate
impact cannot be determined at this time.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities at the date of the
financial statements. Management must also make estimates and assumptions that
affect the amounts of revenues and expenses during the reporting period. Future
events, including changes in the levels of mortality, morbidity, interest rates
and asset valuations, could cause actual results to differ from the estimates
used in these financial statements.
The following is a description of the Company's principal accounting policies
and practices.
A. Investments
Bonds and stocks are valued in accordance with rules established by the National
Association of Insurance Commissioners. Generally, bonds are valued at amortized
cost, preferred stocks in good standing at cost, and common stocks, except for
unconsolidated subsidiaries, at fair value.
Mortgage loans are valued at unpaid principal less unamortized discount. Real
estate is valued at cost less accumulated depreciation, impairment allowances
and mortgage encumbrances. Encumbrances totaled $14.2 million in 1997 and $27.3
million in 1996. Depreciation on investment real estate is calculated using the
straight-line and constant yield methods.
Policy loans are carried at the outstanding loan balance less amounts unsecured
by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
Investments in unconsolidated subsidiaries and affiliates, joint ventures and
other forms of partnerships are included in other investments on the Statutory
Statement of Financial Position and are accounted for using the equity method.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve and an Interest Maintenance Reserve. The Asset Valuation
Reserve and other investment reserves stabilize the policyholders' contingency
reserves against fluctuations in the value of stocks, as well as declines in the
value of bonds, mortgage loans and real estate investments.
The Interest Maintenance Reserve captures after-tax realized capital gains and
losses which result from changes in the overall level of interest rates for all
types of fixed income investments, as well as other financial instruments,
including financial futures, U.S. Treasury purchase commitments, options,
interest rate swaps, interest rate caps and interest rate floors. These interest
rate related gains and losses are amortized into income using the grouped method
over the remaining life of the investment sold or over the remaining life of the
underlying asset. Net realized after tax capital gains of $95.4 million in 1997,
$73.1 million in 1996, and net realized after tax capital losses of $130.7
million in 1995 were charged to the Interest Maintenance Reserve. Amortization
of the Interest Maintenance Reserve into net investment income amounted to $31.0
million in 1997, $26.9 million in 1996, and $5.0 million in 1995.
Realized capital gains and losses, less taxes, not includable in the Interest
Maintenance Reserve, are recognized in net income. Realized capital gains and
losses are determined using the specific identification method. Unrealized
capital gains and losses are included in policyholders' contingency reserves.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of pension, variable annuity and
variable life insurance contract holders. Assets consist principally of
marketable securities reported at fair value. Premiums, benefits and expenses of
the separate accounts are reported in the Statutory Statement of Income. The
Company receives administrative and investment advisory fees from these
accounts.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally certain fixed assets,
receivables and Interest Maintenance Reserve, when in a net loss deferral
position) are excluded from the Statutory Statement of Financial Position by an
adjustment to policyholders' contingency reserves.
<PAGE>
Notes To Statutory Financial Statements (Continued)
D. Policyholders' Reserves and Funds
Policyholders' reserves for life contracts are developed using accepted
actuarial methods computed principally on the net level premium and the
Commissioners' Reserve Valuation Method bases using the American Experience and
the 1941, 1958 and 1980 Commissioners' Standard Ordinary mortality tables with
assumed interest rates ranging from 2.5 to 6.0 percent.
Reserves for individual annuities, guaranteed investment contracts and deposit
administration and immediate participation guarantee funds are based on accepted
actuarial methods principally at interest rates ranging from 2.25 to 11.25
percent. Reserves for policies and contracts considered investment contracts
have a carrying value of $8,077.9 million and $9,073.8 million at December 31,
1997 and 1996, respectively (fair value of $8,250.0 million and $9,324.6 million
at December 31, 1997 and 1996, respectively as determined by discounted cash
flow projections). Accident and health policy reserves are generally calculated
using the two-year preliminary term, net level premium and fixed net premium
methods and various morbidity tables.
The Company made certain changes in the valuation of policyholders' reserves of
$55.4 million in 1997 and $72.2 million in 1996. The effects of these changes
were recorded as a decrease to policyholders' contingency reserves.
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary date of
the policy. Annuity premium is recognized when received. Accident and health
premiums are recognized as revenue when due. Commissions and other costs related
to issuance of new policies, maintenance and settlement costs are charged to
current operations when incurred.
F. Policyholders' Dividends
The Board of Directors annually approves dividends to be paid in the following
year. These dividends are allocated to reflect the relative contribution of each
group of policies to policyholders' contingency reserves and consider investment
and mortality experience, expenses and federal income tax charges. The liability
for policyholders' dividends is equal to the estimated amount of dividends to be
paid in the following calendar year.
G. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers all
highly liquid investments purchased with a maturity of twelve months or less to
be cash and short-term investments.
2. POLICYHOLDERS' CONTINGENCY RESERVES
Policyholders' contingency reserves represent surplus of the Company as reported
to regulatory authorities and are intended to protect policyholders against
possible adverse experience.
The Company issued surplus notes of $100.0 million at 7 1/2 percent and $250.0
million at 7 5/8 percent in 1994 and 1993, respectively. These notes are
unsecured and subordinate to all present and future indebtedness of the Company,
policy claims and prior claims against the Company as provided by the
Massachusetts General Laws. Issuance was approved by the Commissioner of
Insurance of the Commonwealth of Massachusetts ("the Commissioner").
All payments of interest and principal are subject to the prior approval of the
Commissioner. Sinking fund payments are due as follows: $62.5 million in 2021,
$87.5 million in 2022, $150.0 million in 2023 and $50.0 million in 2024.
Interest on the notes issued in 1994 is scheduled to be paid on March 1 and
September 1 of each year, to holders of record on the preceding February 15 or
August 15, respectively. Interest on the notes issued in 1993 is scheduled to be
paid on May 15 and November 15 of each year, to holders of record on the
preceding May 1 or November 1, respectively. Interest expense is not recorded
until approval for payment is received from the Commissioner. Interest of $26.6
million was approved and paid in 1997, 1996 and 1995.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The proceeds of the notes, less a $28.3 million reserve in 1997, and a $32.2
million reserve in 1996 for contingencies associated with the issuance of the
notes, are recorded as a component of the Company's policyholders' contingency
reserves as approved by the Commissioner. These reserves, as permitted by the
Division of Insurance, are included in investment reserves on the Statutory
Statement of Financial Position.
3. EMPLOYEE BENEFIT PLANS
The Company's employee benefit plans include plans in place for the employees of
Massachusetts Mutual and Connecticut Mutual prior to the merger. Employees
previously covered by the Connecticut Mutual pension plans will continue
coverage under these plans. All other employees, including employees hired after
the merger date, will be covered by the Massachusetts Mutual benefit plans.
A. Pension
The Company has two non-contributory defined benefit plans covering
substantially all of its employees. One plan includes employees previously
employed by Connecticut Mutual; the other includes all other eligible employees.
Benefits are based on the employees' years of service, compensation during the
last five years of employment and estimated social security retirement benefits.
The Company accounts for these plans following Financial Accounting Standards
Board Statement No. 87, "Employers' Accounting for Pensions." Accordingly, as
permitted by the Massachusetts Division of Insurance, the Company has recognized
a pension asset of $157.4 million and $97.2 million at December 31, 1997 and
1996, respectively. On the merger date, the accounting for Connecticut Mutual
pension plans was conformed to the Company's policy of recording pension plan
assets and liabilities, resulting in a $10.4 million increase in policyholders'
contingency reserves. Company policy is to fund pension costs in accordance with
the requirements of the Employee Retirement Income Security Act of 1974 and,
based on such requirements, no funding was required for the years ended December
31, 1997, 1996 and 1995. The assets of the plans are invested in the Company's
general account and separate accounts.
The benefit status of the defined benefit plans as of December 31 is as follows:
1997 1996
---- ----
(In Millions)
Accumulated benefit obligation $ 663.1 $ 611.5
Vested benefit obligation 653.8 606.5
Projected benefit obligation 713.9 665.5
Plan assets at fair value 1,154.2 1,201.7
The following assumptions were used in determining the actuarial present value
of both the accumulated and projected benefit obligations.
MassMutual Connecticut Mutual
Plan Plan
---- ----
Discount rate - 1997 7.25% 7.25%
Discount rate - 1996 7.75 7.75
Increase in future compensation levels 4.00 5.00
Long-term rate of return on assets 10.00 9.00
In 1997, there was a significant reduction in plan participants in the
Connecticut Mutual Plan which resulted in recognition of a pension plan
curtailment gain of $10.7 million.
As a result of the sale of Mirus Life Insurance Company, there was a significant
reduction in plan participants which resulted in recognition of a pension plan
curtailment gain of $15.3 million in 1996.
The Company also has defined contribution plans for employees and agents. The
expense credited to operations for all pension plans is $38.9 million in 1997,
$32.7 million in 1996 and $10.9 million in 1995.
<PAGE>
Notes To Statutory Financial Statements (Continued)
B. Life and Health
Certain life and health insurance benefits are provided to retired employees and
agents through group insurance contracts. Substantially all of the Company's
employees may become eligible for these benefits if they reach retirement age
while working for the Company. The Company adopted the National Association of
Insurance Commissioners' accounting standard for post-retirement life and health
benefit costs, requiring these benefits to be accounted for using the accrual
method for employees and agents eligible to retire and current retirees.
The following assumptions were used in determining the accumulated
postretirement benefit liability.
MassMutual Connecticut Mutual
Plan Plan
---- ----
Discount - 1997 7.25% 7.25%
Discount - 1996 7.75 7.75
Assumed increases in medical cost
rates in the first year 6.25 - 6.75 9.50
declining to 4.75 5.00
within 5 years 5 years
The initial transition obligation of $137.9 million is being amortized over
twenty years through 2012. At December 31, 1997 and 1996, the net unfunded
accumulated benefit obligation was $124.2 million and $124.1 million,
respectively, for employees and agents eligible to retire or currently retired
and $34.7 million and $33.8 million, respectively, for participants not eligible
to retire. A Retired Lives Reserve Trust was funded to pay life insurance
premiums for certain retired employees. Trust assets available for benefits were
$21.7 million and $23.0 million at December 31, 1997 and 1996, respectively.
As a result of the sale of Mirus Life Insurance Company, there was a significant
reduction in plan participants which resulted in recognition of a life and
health plan curtailment loss of $13.9 million in 1996.
The expense for 1997, 1996 and 1995 was $16.5 million, $17.6 million, and $22.9
million, respectively. A one percent increase in the annual assumed increase in
medical cost rates would increase the 1997 accumulated postretirement benefit
liability and benefit expense by $10.9 million and $1.4 million, respectively.
4. RELATED PARTY TRANSACTIONS
Pursuant to two 1994 reinsurance agreements with Mirus Life Insurance Company
(Mirus) whereby the Company assumed all of the single premium immediate annuity
business written by Mirus and ceded all of its group life, accident and health
business to Mirus. A gain from operations of this business was reflected in 1995
as a $41.0 million dividend received from Mirus, which was recorded as net
investment income on the Statutory Statement of Income. As previously discussed,
on March 31, 1996, the Company sold MassMutual Holding Company Two, Inc. a
wholly-owned subsidiary, and its subsidiaries, including Mirus Life Insurance
Company to WellPoint Health Networks, Inc.
The Company has a modified coinsurance quota-share reinsurance agreement with a
wholly-owned subsidiary, C.M. Life Insurance Company, whereby the Company
assumes 75% of the premiums on certain universal life policies issued by C.M.
Life. The Company pays a stipulated expense allowance, death and surrender
benefits, and a modified coinsurance adjustment. Reserves for payment of future
benefits are retained by C.M. Life.
5. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's best estimate of
its current tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of equity tax (essentially a reduction in the
deduction for policyholder dividends) and miscellaneous temporary differences,
such as reserves, acquisition costs and restructuring costs, resulted in
effective tax rates which differ from the statutory tax rate.
The Internal Revenue Service has completed examining the Company's income tax
returns through the year 1992 for Massachusetts Mutual and 1991 for Connecticut
Mutual, and is currently examining Massachusetts Mutual for the years 1993 and
1994, and Connecticut Mutual for the years 1992 through 1995. The Company
believes any adjustments resulting from such examinations will not materially
affect its financial statements.
<PAGE>
Notes to Statutory Financial Statements (Continued)
Components of the formula authorized by the Internal Revenue Service for
determining deductible policyholder dividends have not been finalized for 1997
or 1996. The Company records the estimated effects of anticipated revisions in
the Statutory Statement of Income.
The Company plans to file its 1997 federal income tax return on a consolidated
basis with its life and non-life affiliates with the exception of C.M. Life
Insurance Company. The Company and its eligible life and non-life affiliates
are subject to a written tax allocation agreement, which allocates the group's
consolidated tax liability for payment purposes. Generally, the agreement
provides that members with losses shall be compensated for the use of their
losses and credits by other members.
The Company made federal tax payments of $353.4 million in 1997, $330.7 million
in 1996 and $147.3 million in 1995.
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment. In the
normal course of business, the Company enters into commitments to purchase
privately placed bonds and to issue mortgage loans.
A. Bonds
The carrying value and estimated fair value of bonds are as follows:
December 31, 1997
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U.S. Treasury securities $ 6,241.0 $ 470.5 $10.3 $ 6,701.2
and obligations of U.S.
government corporations
and agencies
Debt securities issued by
foreign governments 83.5 4.4 3.0 84.9
Mortgage-backed securities 3,390.8 187.9 9.0 3,569.7
State and local governments 361.9 23.9 .6 385.2
Corporate debt securities 12,148.9 765.2 46.9 12,867.2
Utilities 871.8 100.1 2.2 969.7
Affiliates 792.4 2.8 1.0 794.2
--------- -------- ----- ---------
TOTAL $23,890.3 $1,554.8 $73.0 $25,372.1
========= ======== ===== =========
December 31, 1996
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 8,042.6 $ 344.0 $ 56.3 $ 8,330.3
Debt securities issued by 95.2 10.2 .5 104.9
foreign governments
Mortgage-backed securities 3,014.0 119.0 43.3 3,089.6
State and local governments 173.2 13.1 2.1 184.2
Corporate debt securities 11,675.2 528.0 133.3 12,069.9
Utilities 975.0 87.0 18.5 1,043.5
Affiliates 324.1 4.3 3.5 324.9
--------- -------- ------ ---------
TOTAL $24,299.3 $1,105.6 $257.5 $25,147.3
========= ======== ====== =========
<PAGE>
Notes To Statutory Financial Statements (Continued)
The carrying value and estimated fair value of bonds at December 31, 1997 by
contractual maturity are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
Estimated
Carrying Fair
Value Value
----- -----
(In Millions)
Due in one year or less $ 519.7 $ 523.0
Due after one year through five years 3,972.1 4,104.6
Due after five years through ten years 7,423.3 7,838.1
Due after ten years 5,254.9 5,888.1
--------- ---------
17,170.0 18,353.8
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 6,720.3 7,018.3
--------- ---------
TOTAL $23,890.3 $25,372.1
========= =========
Proceeds from sales of investments in bonds were $11,427.8 million during 1997,
$6,390.7 million during 1996 and $8,068.8 million during 1995. Gross capital
gains of $200.7 million in 1997, $188.8 million in 1996 and $255.5 million in
1995 and gross capital losses of $68.8 million in 1997, $255.5 million in 1996
and $67.1 million in 1995 were realized on those sales, portions of which were
included in the Interest Maintenance Reserve. The estimated fair value of
non-publicly traded bonds is determined by the Company using a pricing matrix.
B. Stocks
Preferred stocks in good standing had fair values of $145.5 million in 1997 and
$150.8 million in 1996, using a pricing matrix for non-publicly traded stocks
and quoted market prices for publicly traded stocks. Common stocks, except for
unconsolidated subsidiaries, had a cost of $250.3 million in 1997 and $249.2
million in 1996.
C. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for
non-performing loans, approximated carrying value.
The Company had restructured loans with book values of $202.3 million, and
$383.5 million at December 31, 1997 and 1996, respectively. These loans
typically have been modified to defer a portion of the contracted interest
payments to future periods. Interest deferred to future periods totaled $5.1
million in 1997, $2.2 million in 1996 and $2.5 million in 1995.
D. Other
The carrying value of investments which were non-income producing for the
preceding twelve months was $5.7 million and $23.1 million at December 31, 1997
and 1996, respectively. The Company made voluntary contributions to the Asset
Valuation Reserve of $6.8 million 1996. No additional voluntary contribution to
the Asset Valuation Reserve was made in 1997.
It is not practicable to determine the fair value of policy loans as they do not
have a stated maturity.
7. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks, primarily to reduce interest rate and
duration imbalances determined in asset/liability analyses. The fair values of
these instruments, described below, which are not recorded in the financial
statements, are based upon market prices or prices obtained from brokers. The
Company does not hold or issue these financial instruments for trading purposes.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The notional amounts described do not represent amounts exchanged by the parties
and, thus, are not a measure of the exposure of the Company. The amounts
exchanged are calculated on the basis of the notional amounts and the other
terms of the instruments, which relate to interest rates, exchange rates,
security prices or financial or other indexes.
The Company enters into financial futures contracts for the purpose of managing
interest rate exposure. Margin requirements are met with the deposit of
securities. Futures contracts are generally settled with offsetting
transactions. Gains and losses on financial futures contracts are recorded when
the contract is closed and amortized through the Interest Maintenance Reserve
over the remaining life of the underlying asset. As of December 31, 1997 and
1996, the Company did not have any open financial futures contracts.
The Company utilizes interest rate swap agreements, options, and purchased caps
and floors to reduce interest rate exposures arising from mismatches between
assets and liabilities and to modify portfolio profiles to manage other risks
identified. Under interest rate swaps, the Company agrees to an exchange, at
specified intervals, between streams of variable rate and fixed rate interest
payments calculated by reference to an agreed-upon notional principal amount.
Net amounts receivable and payable are accrued as adjustments to interest income
and included in investment and insurance amounts receivable on the Statutory
Statement of Financial Position. Gains and losses realized on the termination of
contracts are amortized through the Interest Maintenance Reserve over the
remaining life of the associated contract. At December 31, 1997 and 1996, the
Company had swaps with notional amounts of $3,220.2 million and $2,090.3
million, respectively. The fair values of these instruments were $20.9 million
at December 31, 1997 and $14.8 million at December 31, 1996.
Options grant the purchaser the right to buy or sell a security or enter into a
derivative transaction at a stated price within a stated period. The Company's
option contracts have terms of up to fifteen years. The amounts paid for options
purchased are included in other investments on the Statutory Statement of
Financial Position. Gains and losses on these contracts are recorded at the
expiration or termination date and are amortized through the Interest
Maintenance Reserve over the remaining life of the option contract. At December
31, 1997 and 1996, the Company had option contracts with notional amounts of
$5,388.2 million and $1,928.4 million, respectively. The Company's credit risk
exposure was limited to the unamortized costs of $59.0 million and $18.1
million, which had fair values of $99.6 million and $19.2 million at December
31, 1997 and 1996, respectively.
Interest rate cap agreements grant the purchaser the right to receive the excess
of a referenced interest rate over a given rate calculated by reference to an
agreed upon notional amount. Interest rate floor agreements grant the purchaser
the right to receive the excess of a given rate over a referenced interest rate
calculated by reference to an agreed upon notional amount. Amounts paid for
interest rate caps and floors are amortized into interest income over the life
of the asset on a straight-line basis. Unamortized costs are included in other
investments on the Statutory Statement of Financial Position. Amounts receivable
and payable are accrued as adjustments to interest income and included in the
Statutory Statement of Financial Position as investment and insurance amounts
receivable. Gains and losses on these contracts, including any unamortized cost,
are recognized upon termination and are amortized through the Interest
Maintenance Reserve over the remaining life of the associated cap or floor
agreement. At December 31, 1997 and 1996, the company had agreements with
notional amounts of $3,348.6 million and $3,859.6 million, respectively. The
Company's credit risk exposure on these agreements is limited to the unamortized
costs of $18.2 million and $22.0 million at December 31, 1997 and 1996,
respectively. The fair values of these instruments were $23.4 million and $15.2
million at December 31, 1997 and 1996, respectively.
The Company utilizes asset swap agreements to reduce exposures, such as currency
risk and prepayment risk, built into certain assets acquired. Cross-currency
interest rate swaps allow investment in foreign currencies, increasing access to
additional investment opportunities, while limiting foreign exchange risk. The
net cash flows from asset and currency swaps are recognized as adjustments to
the underlying assets' interest income. Gains and losses realized on the
termination of these contracts adjusts the bases of the underlying asset.
Notional amounts relating to asset and currency swaps totaled $225.6 million and
$364.7 million at December 31, 1997 and 1996, respectively. The fair values of
these instruments were an unrecognized loss of $1.7 million at December 31, 1997
and an unrecognized gain of $7.8 million at December 31, 1996.
<PAGE>
Notes To Statutory Financial Statements (Continued)
Equity swap agreements are utilized to hedge exposure to market risk on public
and private equity positions held in the Company's investment portfolio. Under
equity swaps, the Company agrees to an exchange, at points in time specified in
each contract, between streams of variable or fixed rate interest payments and
the change in an underlying index, equity or basket of equities. The change in
the underlying item is calculated by reference to the level of such item
specified in the agreement. Net amounts receivable and payable are accrued as
adjustments to interest income and included in investment and insurance amounts
receivable on the Statutory Statement of Financial Position. Changes in the
value of these contracts are recorded as realized gains and losses in the
Statutory Statement of Income when contracts are closed. At December 31, 1997
and 1996, the Company had equity swap contracts with notional amounts of $160.0
million and $149.2 million, respectively. The fair values of these instruments
were an unrealized loss of $5.1 million at December 31, 1997 and an unrealized
gain of $11.9 million at December 31, 1996.
The Company enters into forward U.S. Treasury commitments for the purpose of
managing interest rate exposure. The Company generally does not take delivery on
forward commitments. These commitments are instead settled with offsetting
transactions. Gains and losses on forward commitments are recorded when the
commitment is closed and amortized through the Interest Maintenance Reserve over
the remaining life of the asset. At December 31, 1997 and 1996, the Company had
U. S. Treasury purchase commitments which will settle during the following year
with contractual amounts of $1,100.7 million and $1,639.4 million with fair
values of $1,117.6 million and $1,627.4 million, respectively including net
unrealized gains of $16.9 million at December 31, 1997 and net unrealized losses
of $12.0 million at December 31, 1996.
The Company is exposed to credit-related losses in the event of nonperformance
by counterparties to derivative financial instruments. This exposure is limited
to contracts with a positive fair value. The amounts at risk in a net gain
position were $146.7 million and $53.9 million at December 31, 1997 and 1996,
respectively. The Company monitors exposure to ensure counterparties are credit
worthy and concentration of exposure is minimized. Additionally, contingent
collateral positions have been obtained with counterparties when considered
prudent.
8. REINSURANCE
The Company cedes all of its group life and health business to UniCARE and has
other reinsurance agreements with other insurance companies in the normal course
of business. Premiums, benefits to policyholders and provisions for future
benefits are stated net of reinsurance. The Company remains liable to the
insured for the payment of benefits if the reinsurer cannot meet its obligations
under the reinsurance agreements. Premiums ceded were $294.6 million in 1997,
$793.5 million in 1996 and $904.1 million in 1995.
9. LIQUIDITY
The withdrawal characteristics of the policyholders' reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1997 are illustrated below:
(In Millions)
Total policyholders' reserves and funds and
separate account liabilities $50,804.2
Not subject to discretionary withdrawal (5,283.7)
Policy loans (4,950.4)
---------
Subject to discretionary withdrawal $40,570.1
=========
Total invested assets, including separate $56,464.7
Policy loans and other invested assets (14,823.3)
---------
Marketable investments $41,641.4
=========
10. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premium taxes. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position, results of operations or liquidity. In
1997 and 1996, the Company elected not to admit $21.4 million and $15.3 million,
respectively, of guaranty fund premium tax offset receivables relating to prior
assessments.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The Company is involved in litigation arising in and out of the normal course of
its business. Management intends to defend these actions vigorously. While the
outcome of litigation cannot be foreseen with certainty, it is the opinion of
management, after consultation with legal counsel, that the ultimate resolution
of these matters will not materially affect its financial position, results of
operations or liquidity.
11. RECLASSIFICATIONS
Certain 1996 and 1995 amounts have been reclassified to conform with the current
year presentation.
12. SUBSIDIARIES AND AFFILIATED COMPANIES
A summary of ownership and relationship of the Company and its subsidiaries and
affiliated companies as of December 31, 1997 is illustrated below. The Company
provides management or advisory services to these companies. Subsidiaries are
wholly-owned, except as noted.
Parent
- ------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
- -----------------------------------------------------------
C.M. Assurance Company
C.M. Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc. (Sold in March 1996)
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps, Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MassMutual Reinsurance Bermuda (Sold in December 1996)
MML Investor Services, Inc.
State House One (Liquidated in December 1996)
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Leveraged Capital Corporation -- 98.5%
Charter Oak Capital Management, Inc. -- 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation -- 84.8%
Oppenheimer Acquisition Corporation -- 88.55%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc. -- (Liquidated in December 1997)
CM International, Inc.
CM Property Management, Inc. -- (Liquidated in December 1997)
High Yield Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
Westheimer 335 Suites, Inc.
<PAGE>
Notes To Statutory Financial Statements (Continued)
Subsidiaries of MassMutual International
----------------------------------------
Compensa de Seguros de Vida S.A. -- 33.5%
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A. -- 33.5%
MassMutual International (Luxemburg) S. A.
MassMutual Holding MSC, Incorporated
MassMutual/Carlson CBO N. V. -- 100%
MassMutual Corporate Value Limited -- 46%
9048 -- 5434 Quebec, Inc.
Affiliates of Massachusetts Mutual Life Insurance Company
- ---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
a. Financial Statements
Financial Statements Included in Part A
---------------------------------------
Condensed Financial Information
Financial Statements Included in Part B
---------------------------------------
The Registrant
--------------
Reports of Independent Accountants.
Statement of Assets and Liabilities as of December 31, 1997.
Statement of Operations for the year ended December 31, 1997.
Statements of Changes in Net Assets for the years ended December 31,
1997 and 1996.
Notes to Financial Statements.
The Depositor
-------------
Report of Independent Accountants.
Statutory Statements of Financial Position as of December 31, 1997 and
1996.
Statutory Statements of Income for the Years Ended December 31, 1997,
1996 and 1995.
Statutory Statements of Changes in Policyholders' Contingency Reserves
for the Years Ended December 31, 1997, 1996 and 1995.
Statutory Statements of Cash Flows for the Years Ended December 31, 1997,
1996 and 1995.
Notes to Statutory Financial Statements.
b. Exhibits
1(a). Resolution of the Board of Directors of Connecticut Mutual Life
Insurance Company ("CML") establishing the Separate Account
(1).
2. Not Applicable.
3(a). Form of Principal Underwriting Agreement between CML and
Connecticut Mutual Financial Services, LLC. (1)
3(b). Form of Underwriting and Servicing Agreement between the Company
and MML Investors Services, Inc. (2)
4(a). Form of Individual Deferred Variable Annuity Contract. (1)
4(b). Form of Individual Immediate Variable Annuity Contract. (1)
5. Form of Application. (1)
6(a). Copy of the Articles of Incorporation of Massachusetts Mutual Life
Insurance Co. (3)
6(b). Copy of the ByLaws of Massachusetts Mutual Life Insurance Co. (3)
7. Not Applicable.
8(a). Copy of the Form of Participation Agreement between Massachusetts
Mutual Life Insurance Company, MML Bay State Life Insurance
Company, C.M. Life Insurance Company, OppenheimerFunds, Inc. and
Oppenheimer Variable Account Funds. (3)
8(b). Copy of the Form of Participation Agreement between Massachusetts
Mutual Life Insurance Company, MML Bay State Life Insurance
Company, C.M. Life Insurance Company, OppenheimerFunds, Inc. and
Panorama Series Funds, Inc. (3)
9. Opinion of and Consent of Counsel. (1)
10 (a). Consent of Coopers & Lybrand L.L.P., Independent Accountants (1)
10 (b). Consent of Arthur Andersen LLP, Independent Public Accountants (1)
10 (c). Report of Arthur Andersen LLP, Independent Public Accountants (1)
10 (d). Powers of Attorney. (3)
11. Not Applicable.
12. Not Applicable.
13. Copy of the Schedule of Computation of Performance (4)
14. None
1
<PAGE>
(1) Filed herewith
(2) Incorporated by Reference to Registrant's Initial Registration
Statement (333-01363) filed March 1, 1996.
(3) Incorporated by Reference to Registration Statement File No. 333-22557,
filed on February 27, 1997.
(4) Incorporated by Reference to Registrant's Post Effective Amendment No.
2 to Registration Statement File No. 333-01363, effective May 1, 1997.
Item 25. Directors and Executive Officers of MassMutual
----------------------------------------------
The directors and executive vice presidents of MassMutual, their
positions and their other business affiliations and business experience
for the past five years are listed below
2
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Roger G. Ackerman, Director Chairman and Chief Executive Officer, since 1996, President and Chief Operating
One Riverfront Plaza, HQE 2 Officer, 1990-1996,
Corning, NY 14831
- ------------------------------------------------------------------------------------------------------------------------------------
James R. Birle, Director Chairman, since 1997, and Founder, since 1994, President, 1994-1997, Resolute Part-
2 Soundview Drive ners, LLC; General Partner, Blackstone Group, 1988-1994
Greenwich, CT 06836
- ------------------------------------------------------------------------------------------------------------------------------------
Gene Chao, Director Chairman, President and CEO, Computer Projections, Inc., since 1991
733 SW Vista Avenue
Portland, OR 97205
- ------------------------------------------------------------------------------------------------------------------------------------
Patricia Diaz Dennis, Director Senior Vice President and Assistant General Counsel, SBC Communications Inc.,
175 East Houston, Room 4-A-70 since 1995; Special Counsel, Sullivan & Cromwell, 1993-1995; Assistant Secretary of
San Antonio, TX 78205 State for Human Rights and Humanitarian Affairs, U.S. Department of State, 1992-1993
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony Downs, Director Senior Fellow, The Brookings Institution, since 1977
1775 Massachusetts Ave., N.W.
Washington, DC 20036-2188
- ------------------------------------------------------------------------------------------------------------------------------------
James L. Dunlap, Director President and Chief Operating Officer, United Meridian Corporation, since 1996;
1201 Louisiana, Suite 1400 Senior Vice President, Texaco, Inc. 1987-1996
Houston, TX 77002-5603
- ------------------------------------------------------------------------------------------------------------------------------------
William B. Ellis, Director Senior Fellow, Yale University School of Forestry and Environmental Studies, since
31 Pound Foolish Lane 1995; Chairman and Chief Executive Officer, Northeast Utilities, 1983-1995
Glastonbury, CT 06033
- ------------------------------------------------------------------------------------------------------------------------------------
Robert M. Furek, Director Chairman, State Board of Trustees for the Hartford School System, since 1997; Presi-
1 State Street, Suite 2310 dent and Chief Executive Officer, Heublein, Inc., 1987-1996
Hartford, CT 06103
- ------------------------------------------------------------------------------------------------------------------------------------
Charles K. Gifford, Director Chairman and Chief Executive Officer, since 1995, and President, 1989-1995, Bank-
100 Federal Street Boston, N.A. and Chairman, since 1998, and Chief Executive Officer, since 1985,
Boston, MA 02110 BankBoston Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
William N. Griggs, Director Managing Director, Griggs & Santow, Inc., since 1983
75 Wall Street, 20(th) Floor
New York, NY 10005
- ------------------------------------------------------------------------------------------------------------------------------------
George B. Harvey, Director Retired Chairman, President and CEO, Pitney Bowes, since 1996
One Landmark Square
Suite 1905, 19(th) Floor
Stamford, CT 06901
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara B. Hauptfuhrer, Director Director of various corporations, since 1972
1700 Old Welsh Road
Huntingdon Valley, PA 19006
- ------------------------------------------------------------------------------------------------------------------------------------
Sheldon B. Lubar, Director Chairman, Lubar & Co. Incorporated, since 1977
700 North Water Street, Suite 1200
Milwaukee, WI 53202
- ------------------------------------------------------------------------------------------------------------------------------------
William B. Marx, Jr., Director Retired Senior Executive Vice President, Lucent Technologies, since 1996; Executive
5 Peacock Lane Vice President and CEO Multimedia Products Group, AT&T, 1994-1996; Executive
Village of Golf, FL 33436-5299 Vice President and CEO, Network Systems Group, 1993-1994; Group Executive and
President, AT&T Network Systems, 1989-1993
- ------------------------------------------------------------------------------------------------------------------------------------
John F. Maypole, Director Managing Partner, Peach State Real Estate Holding Company, since 1984
55 Sandy Hook Road - North
Sarasota, FL 34242
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation(s) During Past Five Years
<S> <C>
John J. Pajak, Director, President and President and Chief Operating Officer, since 1996, Vice Chairman and Chief Admin-
Chief Operating Officer istrative Officer, 1996-1996, Executive Vice President, 1987-1996, MassMutual
1295 State Street
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas B. Wheeler, Director, Chairman Chairman and Chief Executive Officer, since 1996, President and Chief Executive
and Chief Executive Officer Officer, 1988-1996, MassMutual
1295 State Street
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred M. Zeien, Director Chairman and Chief Executive Officer, The Gillette Company, since 1991
Prudential Tower
Boston, MA 02199
- ------------------------------------------------------------------------------------------------------------------------------------
Executive Vice Presidents:
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence V. Burkett, Jr. Executive Vice President and General Counsel, since 1993, Senior Vice President and
1295 State Street Deputy General Counsel, 1992-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Peter J. Daboul Executive Vice President and Chief Information Officer, since 1997, Senior Vice
1295 State Street President, 1990-1997, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Davies Executive Vice President, since 1994, Associate Executive Vice President, 1994-1994,
1295 State Street General Agent, 1982-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel J. Fitzgerald Executive Vice President, since 1994, Corporate Financial Operations, 1994-1997,
1295 State Street Senior Vice President, 1991-1994
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
James E. Miller Executive Vice President, since 1997 and 1987-1996, MassMutual; Senior Vice Presi-
1295 State Street dent, UniCare Life and Health Insurance Company, 1996-1997
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
John V. Murphy Executive Vice President, since 1997, MassMutual; Executive Vice President and
1295 State Street Chief Operating Officer, David L. Babson & Co., Inc., 1995-1997; Chief Operating
Springfield, MA 01111 Officer, Concert Capital Management, Inc., 1993-1995; Senior Vice President and
Chief Financial Officer, Liberty Financial Companies, 1977-1993
- ------------------------------------------------------------------------------------------------------------------------------------
Gary E. Wendlandt Executive Vice President and Chief Investment Officer, since 1993, Executive Vice
1295 State Street President, 1992-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph M. Zubretsky Executive Vice President and Chief Financial Officer, since 1997, MassMutual; Chief
1295 State Street Financial Officer, 1996, HealthSource; Coopers & Lybrand, 1990-1996
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant
The assets of the Registrant, under state law, are assets of MassMutual.
The Registrant may also be deemed to be under common control with other separate
accounts established by MassMutual and its life insurance subsidiaries, C.M.
Life Insurance Company and MML Bay State Life Insurance Company, which are
registered as unit investment trusts under the Investment Company Act of 1940.
LIST OF SUBSIDIARIES AND AFFILIATES
The following entities are, or may be deemed to be, controlled by MassMutual
through the direct or indirect ownership of such entities' stock.
1. CM Assurance Company, a Connecticut life, accident, disability and health
insurer, all the stock of which is owned by MassMutual.
2. CM Benefit Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
3. C.M. Life Insurance Company, a Connecticut life, accident, disability and
health insurer, all the stock of which is owned by MassMutual.
4. MML Bay State Life Insurance Company, a Connecticut life and health
insurer, all the stock of which is owned by MassMutual.
5. MML Distributors, LLC, formerly known as Connecticut Mutual Financial
Services, LLC, a registered broker-dealer incorporated as a limited
liability company in Connecticut. MassMutual has a 99% ownership interest
and G.R. Phelps & Co. has a 1% ownership interest herein.
6. MassMutual Holding Company, a Delaware holding company, all the stock of
which is owned by MassMutual.
7. MassMutual of Ireland, Limited., incorporated in the Republic of Ireland,
to operate a group life and health claim office for MassMutual, all of the
stock of which is owned by MassMutual.
8. MML Series Investment Fund, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares of which are
owned by separate accounts of MassMutual and companies controlled by
MassMutual.
9. MassMutual Institutional Funds, a registered open-end investment company
organized as a Massachusetts business trust, all of the shares are owned by
MassMutual.
10. G.R. Phelps & Company, Inc., Connecticut corporation which formerly
operated as a securities broker-dealer, all the stock of which is owned by
MassMutual Holding Company.
11. MML Investors Services, Inc., registered broker-dealer incorporated in
Massachusetts, MassMutual Holding Company owns 86% of the capital stock and
F.R. Phelps & Co., Inc. owns 14% of the capital stock of MML Investors
Services, Inc..
12. MassMutual Holding MSC, Inc., a Massachusetts corporation, which acts as a
holding company for MassMutual positions in investment entities organized
outside the United States. MassMutual Holding Company owns all the
outstanding shares of MassMutual Holding MSC, Inc.
13. MassMutual Holding Trust I, a Massachusetts business trust, which acts as a
holding company for certain MassMutual investment subsidiaries. MassMutual
Holding Company owns all the outstanding shares of MassMutual Holding Trust
I..
14. MassMutual Holding Trust II, a Massachusetts business trust, which acts as
a holding company for certain MassMutual investment subsidiaries.
MassMutual Holding Company owns all the outstanding shares of MassMutual
Holding Trust II.
15. MassMutual International, Inc., a Delaware corporation that acts as a
holding company of and provides services to international insurance
companies, all of the stock of which is owned by MassMutual Holding
Company.
5
<PAGE>
16. MML Insurance Agency, Inc., a licensed insurance broker incorporated in
Massachusetts, all of the stock of which is owned by MML Investors
Services, Inc.
17. MML Securities Corporation, a "Massachusetts Securities Corporation", of
the stock of which is owned by MML Investors Services, Inc.
18. DISA Insurance Services Agency of America, Inc. (Alabama), a licensed
insurance broker incorporated in Alabama. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
19. Diversified Insurance Services Agency of America, Inc. (Hawaii), a licensed
insurance broker incorporated in Hawaii. MML Insurance Agency, Inc. owns
all the shares of outstanding stock.
20. MML Insurance Agency of Mississippi, P.C., a Mississippi professional
corporation that operates as an insurance broker, and is controlled by MML
Insurance Agency, Inc.
21. MML Insurance Agency of Nevada, Inc., a Nevada corporation that operates as
an insurance broker, all of the stock of which is owned by MML Insurance
Agency, Inc.
22. MML Insurance Agency of Ohio, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Ohio and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through a voting trust agreement.
23. MML Insurance Agency of Texas, Inc., a subsidiary of MML Insurance Agency,
Inc., is incorporated in the state of Texas and operates as an insurance
broker. The outstanding capital stock is controlled by MML Insurance
Agency, Inc. through an irrevocable proxy arrangement.
24. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operated a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each owns 99% of the outstanding
shares.
25. MassMutual Corporate Value Limited, a Cayman Islands corporation that owns
approximately 93% of MassMutual Corporate Value Partners Limited.
MassMutual Holding MSC, Inc. owns 46.19% of the outstanding capital stock
of MassMutual Corporate Value Limited.
26. MassMutual Corporate Value Partners Limited, a Cayman Islands corporation
that operates as a high yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
27. 9048-5434 Quebec, Inc., a Quebec corporation, which operates as the owner
of hotel property in Montreal, Quebec, Canada. MassMutual Holdings MSC,
Inc. owns all the shares of 9048-5434 Quebec, Inc.
28. Antares Leveraged Capital Corp., a Delaware corporation that operates as a
finance company. MassMutual Holding Trust I owns approximately 98.7% of the
capital stock of Antares.
29. Charter Oak Capital Management, Inc., a Delaware corporation that operates
as an investment manager. MassMutual Holding Trust I owns 80% of the
capital stock of Charter Oak.
30. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity real estate
advisory corporation, all the stock of which is owned by MassMutual Holding
Trust I.
31. DLB Acquisition Corporation ("DLB") is a Delaware corporation, which serves
as a holding company for David L. Babson and Company, Incorporated.
MassMutual Holding Trust I owns 83.7% of the outstanding capital stock of
DLB.
32. Oppenheimer Acquisition Corporation ("OAC") is a Delaware corporation,
which serves as a holding company for OppenheimerFunds, Inc. MassMutual
Holding Trust I owns 86% of the capital stock of OAC.
33. David L. Babson and Company, Incorporated, a registered investment adviser
incorporated in Massachusetts, all of the stock of which is owned by DLB.
34. Babson Securities Corporation, a registered broker-dealer incorporated in
Massachusetts, all of the stock of which is owned by David L. Babson and
Company, Incorporated.
6
<PAGE>
35. Babson-Stewart-Ivory International, a Massachusetts general partnership,
which operates as a registered investment adviser. David L. Babson and
Company Incorporated holds a 50% ownership interest in the partnership.
36. Potomac Babson Incorporated, a Massachusetts corporation, is a registered
investment adviser. David L. Babson and Company Incorporated owns 60% of
the outstanding shares of Potomac Babson Incorporated.
37. OppenheimerFunds, Inc., a registered investment adviser incorporated in
Colorado, all of the stock of which is owned by Oppenheimer Acquisition
Corporation
38. Centennial Asset Management Corporation, a Delaware corporation that serves
as the investment adviser and general distributor of the Centennial Funds.
OppenheimerFunds, Inc. owns all the stock of Centennial Asset Management
Corporation.
39. HarbourView Asset Management Corporation, a registered investment adviser
incorporated in New York, all the stock of which is owned by
OppenheimerFunds, Inc.
40. MultiSource Service, Inc., a Colorado corporation that operates as a
clearing broker, 80% of the stock of which is owned by OppenheimerFunds,
Inc.
41. OppenheimerFunds Distributor, Inc., a registered broker-dealer incorporated
in New York, all the stock of which is owned by OppenheimerFunds, Inc.
42. Oppenheimer Partnership Holdings, Inc., a Delaware holding company, all the
stock of which is owned by OppenheimerFunds, Inc.
43. Oppenheimer Real Asset Management, Inc., a commodity pool operator
incorporated in Delaware, all the stock of which is owned by
OppenheimerFunds, Inc.
44. Shareholder Financial Services, Inc., a transfer agent incorporated in
Colorado, all the stock of which is owned by OppenheimerFunds, Inc.
45. Shareholder Services, Inc., a transfer agent incorporated in Colorado, all
the stock of which is owned by OppenheimerFunds, Inc.
46. Centennial Capital Corporation, a Delaware corporation that formerly
sponsor a unit investment trust. Centennial Asset Management Corporation
owns all the outstanding shares of Centennial Capital Corporation.
47. Cornerstone Office Management, LLC, a Delaware limited liability company
that is 50% owned by Cornerstone Real Estate Advisers, Inc. and 50% owned
by MML Realty Management Corporation.
48. Cornerstone Suburban Office Investors, LP, a Delaware limited partnership,
which operates as a real estate operating company. Cornerstone Office
Management, LLC holds a 1% general partnership interest in this fund and
MassMutual holds a 99% limited partnership interest.
49. CM Advantage, Inc., a Connecticut corporation that acts as a general
partner in real estate limited partnerships. MassMutual Holding Trust II
owns all of the outstanding stock.
50. CM International, Inc., a Delaware corporation that holds a mortgage pool
and issues collateralized bond obligations. MassMutual Holding Trust II
owns all the outstanding stock of CM International, Inc.
51. CM Property Management, Inc., a Connecticut real estate holding company,
all the stock of which is owned by MassMutual Holding Trust II.
52. HYP Management, Inc., a Delaware corporation which is the LLC Manager for
MassMutual High Yield Partners LLC and owns 1.28% of the LLC units of such
entity. MassMutual Holding Trust II owns all the outstanding stock of HYP
Management, Inc.
53. MMHC Investment, Inc., a Delaware corporation which is a passive investor
in MassMutual/Darby CBO LLC, MassMutual High Yield Partners LLC and other
MassMutual investments. MassMutual Holding Trust II owns all the
outstanding
7
<PAGE>
stock of MMHC Investment, Inc.
54. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
55. MML Realty Management Corporation, a property manager incorporated in
Massachusetts, all the stock of which is owned by MassMutual Holding Trust
II.
56. 505 Waterford Park Limited Partnership, a Delaware limited partnership,
which holds title to an office building in Minneapolis, Minnesota. MML
Realty Management Corporation holds a 1% general partnership interest in
this partnership and MassMutual holds a 99% limited partnership interest.
57. MassMutual/Darby CBO IM Inc., a Delaware corporation which operates as the
LLC Manager of MassMutual/Darby CBO LLC MMHC Investment, Inc. owns 50% of
the capital stock of this company
58. MassMutual/Darby CBO LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual holds 1.79%, MMHC Investment holds
44.91% and MassMutual High Yield Partners LLC holds 2.39% of the ownership
interest in this company.
59. Urban Properties, Inc., a Delaware real estate holding and development
company, all the stock of which is owned by MassMutual Holding Trust II.
60. Westheimer 335 Suites, Inc., was incorporated in Delaware to serve as a
general partner of the Westheimer 335 Suites Limited Partnership.
MassMutual Holding Trust II owns all the stock of Westheimer 335 Suites,
Inc.
61. Westheimer 335 Suites Limited Partnership, a Texas limited partnership of
which Westheimer 335 Suites, Inc. is the general partner.
62. MassMutual Internacional (Argentina) S.A., an Argentine corporation, which
operates as a holding company. MassMutual International Inc. owns 99.9% of
the outstanding shares and MassMutual Holding Company owns the remaining
0.1% of the shares.
63. MassMutual Internacional (Chile) S.A. a Chilean corporation, which operates
as a holding company. MassMutual International Inc. owns 99% of the
outstanding shares and MassMutual Holding Company owns the remaining 0.1%
of the shares.
64. MassMutual International (Bermuda) Ltd., a Bermuda life insurance company,
all of the stock of which is owned by MassMutual International Inc.
65. MassMutual International (Luxembourg) S.A. a Luxembourg corporation, which
operates as an insurance company. MassMutual International Inc. owns 99.9%
of the outstanding shares and MassMutual Holding Company owns the re-
maining 0.1% of the shares.
66. MassLife Seguros de Vida S.A., a life insurance company incorporated in
Argentina. MassMutual International Inc. owns 99.9% of the outstanding
capital stock of MassLife Seguros de Vida S.A.
67. MassMutual Services, S.A., an Argentine corporation, which operates as a
service company. MassMutual Internacional (Argentina) S.A. owns 99.9% of
the outstanding shares and MassMutual International, Inc. own 0.1% of the
shares.
68. Mass Seguros de Vida S.A., a life insurance company incorporated in Chile.
MassMutual Internacional (Chile S.A.) owns 33.5% of the outstanding capital
stock of Mass Seguros de Vida S.A.
69. Origen Inversiones S.A., a Chilean corporation which operates as a holding
company. MassMutual Internacional (Chile) S.A. holds a 33.5% ownership
interest in this corporation.
70. Compania Seguros de Vida Corp, S.A., a Chilean insurance company. Origen
Inversiones S.A. owns 99% of the outstanding shares of this company
71. Oppenheimer Series Fund Inc., a Maryland corporation and a registered open-
end investment company of which Mass-
8
<PAGE>
Mutual and its affiliates own a majority of the outstanding shares issued
by the fund.
72. Panorama Series Fund, Inc., a registered open-end investment company
organized as a Maryland corporation. Shares of the fund are sold only to
MassMutual and its affiliates.
73. The DLB Fund Group, an open-end management investment company, advised by
David L. Babson and Company Incorporated. MassMutual owns at least 25% of
each series.
MassMutual acts as the investment adviser to each of the following investment
companies and as such may be deemed to control them.
1. MML Series Investment Fund, a registered open-end Massachusetts business
trust, all of the shares are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
2. MassMutual Corporate Investors, a registered closed-end Massachusetts
business trust.
3. MassMutual Corporate Value Partners, Limited, a Cayman Islands corporation
that operates as a high-yield bond fund. MassMutual Corporate Value Limited
holds an approximately 93% ownership interest in this company.
4. MassMutual High Yield Partners LLC, a Delaware limited liability company,
that operates as a high yield bond fund. MassMutual holds 5.28%, MMHC
Investment Inc. holds 35.99%, and HYP Management, Inc. hold 1.28% for a
total of 42.55% of the ownership interest in this company.
5. MassMutual Institutional Funds, a registered open-end Massachusetts
business trust, all of the shares are owned by MassMutual.
6. MassMutual Participation Investors, a registered closed-end Massachusetts
business trust.
7. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation which
operates a collateralized bond obligation fund. MassMutual Holding MSC,
Inc. and Carlson Investment Management Co. each own 50% of the outstanding
shares.
8. MassMutual/Darby CBO, LLC, a Delaware limited liability company that
operates as a fund investing in high yield debt securities of U.S. and
emerging market issuers. MassMutual owns 1.79% , MMHC investment, Inc. owns
44.91% and MassMutual High Yield Partners LLC owns 2.39% of the ownership
interest in this company.
Item 27. Number of Contract Owners
On March 4, 1998 there were 26,153 Contract Owners in the Separate
Account.
Item 28. Indemnification
MassMutual directors and officers are indemnified under its by-laws. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
MassMutual pursuant to the foregoing provisions, or otherwise, MassMutual has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by MassMutual
of expenses incurred or paid by a director, officer or controlling person of
MassMutual in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, MassMutual will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
9
<PAGE>
Item 29. Principal Underwriters
(a) MML Distributors, LLC, a wholly owned subsidiary of MassMutual acts as
principal underwriter for registered separate accounts of MassMutual,
C.M. Life and MML Bay State.
(b)(1) MML Distributors, LLC is the principal underwriter of the Contracts. The
following people are officers and member representatives of the principal
underwriter.
<TABLE>
<CAPTION>
OFFICERS AND MEMBER REPRESENTATIVES
MML DISTRIBUTORS, LLC
<S> <C> <C>
Kenneth M. Rickson Member Representative One Monarch Place
G.R. Phelps & Co., Inc. 1414 Main Street
Springfield, MA 01144-1013
Margaret Sperry Member Representative 1295 State Street
Massachusetts Mutual Springfield, MA 01111-0001
Life Insurance Co.
Kenneth M. Rickson Chief Executive Officer, One Monarch Place
President, and Main OSJ 1414 Main Street
Supervisor Springfield, MA 01144-1013
John E. Forrest Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley Vice President One Monarch Place
Assistant Secretary 1414 Main Street
Springfield, MA 01144-1013
Ronald E. Thomson Vice President One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
James T. Bagley Treasurer 1295 State Street
Springfield, MA 01111
Bruce C. Frisbie Assistant Treasurer 1295 State Street
Springfield, MA 01111-0001
Raymond W. Anderson Assistant Treasurer 140 Garden Street
Hartford, CT 06154
Ann F. Lomeli Secretary 1295 State Street
Springfield, MA 01111-0001
Eileen D. Leo Assistant Secretary One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Marilyn A. Sponzo Chief Legal Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Robert Rosenthal Compliance Officer One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Melissa Thompson Registration Manager One Monarch Place
1414 Main Street
Springfield, MA 01144-1013
Ruth B. Howe Director of Continuing One Monarch Place
Education 1414 Main Street
Springfield, MA 01144-1013
Peter D. Cuozzo Variable Life Supervisor and 140 Garden Street
Hartford OSJ Supervisor Hartford, CT 06154
Maureen Ford Variable Annuity Supervisor 140 Garden Street
Hartford, CT 06154
Anne Melissa Dowling Large Corporate Markets 140 Garden Street
Supervisor Hartford, CT 06154
</TABLE>
(b)(2) MML Investors Services, Inc. is the co-underwriter of the Contracts. The
following people are the officers and directors of the
co-underwriter.
<TABLE>
<CAPTION>
MML INVESTORS SERVICES, INC.
OFFICERS AND DIRECTORS
OFFICER BUSINESS ADDRESS
----------------------------------------------------------------------------------
<S> <C>
Kenneth M. Rickson One Monarch Place
President 1414 Main Street
Springfield, MA 01144-1013
Michael L. Kerley One Monarch Place
Vice President, Chief Legal Officer, 1414 Main Street
Chief Compliance Officer, Assistant Secretary Springfield, MA 01144-1013
Ronald E. Thomson One Monarch Place
Vice President, Treasurer 1414 Main Street
Springfield, MA 01144-1013
Ann F. Lomeli 1295 State Street
Secretary Springfield, MA 01111
John E. Forrest One Monarch Place
Vice President 1414 Main Street
National Sales Director Springfield, MA 01144-1013
Eileen D. Leo One Monarch Place
Assistant Secretary, 1414 Main Street
Assistant Treasurer Springfield, MA 01144-1013
David Deonarine One Monarch Place
Sr. Registered Options Principal 1414 Main Street
Springfield, MA 01144-1013
Nicholas J. Orphan 245 Peach Tree Center Ave., Suite 2330
Regional Supervisor (South) Atlanta, GA 30303
Robert W. Kumming 1295 State Street
Regional Pension Management Supervisor (East/Central) Springfield, MA 01111
Peter J. Zummo 1295 State Street
Regional Pension Management Supervisor (South/West) Springfield, MA 01111
Bruce Lukowiak 6263 North Scottsdale Rd., Suite 222
Regional Supervisor (West) Scottsdale, AZ 85250
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
OFFICER BUSINESS ADDRESS
----------------------------------------------------------------------------------
<S> <C>
Gary L. Greenfield 1 Lincoln Center, Suite 1490
Regional Supervisor (Central) Oakbrook Terrace, IL 60181
Burvin E. Pugh, Jr. 1295 State Street
Chief Agency Field Force Supervisor Springfield, MA 01111
John P. McCloskey 1295 State Street
Regional Supervisor (East) Springfield, MA 01144
Susan Alfano 1295 State Street
Director Springfield, MA 01111
Lawrence V. Burkett, Jr. 1295 State Street
Chairman of the Board of Directors Springfield, MA 01111
Peter Cuozzo, CLU, ChFC 140 Garden Street
Director Hartford, CT 06154
John B. Davies 1295 State Street
Director Springfield, MA 01111
Anne Melissa Dowling 140 Garden Street
Director Hartford, CT 01654
Maureen R. Ford 140 Garden Street
Director Hartford, CT 01654
Gary T. Huffman 1295 State Street
Director Springfield, MA 01111
Douglas J. Jangraw 140 Garden Street
Director Hartford, CT 01654
</TABLE>
(c) See the section captioned "Underwriting Arrangements" in the
Statement of Additional Information.
Item 30. Location of Accounts and Records
Until July 1, 1998, Alliance-One Services, Inc. of Kansas City, Missouri, MML
Investor Services, Inc., 1414 Main Street, Springfield, MA 01144-1013 and MML
Distributors, LLC have possession of the accounts, books or documents of the
Separate Account required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder. Effective July 1,
1998, the Annuity Service Center will be relocated. MassMutual will then assume
responsibility for all administrative functions. MassMutual will process all
business transactions, maintain all records and respond to Contract Owner
inquiries.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Not Applicable.
(b) The registrant undertakes that it will include a post card or
similar written communication affixed to or included in the prospectus that the
applicant can remove and send to the Company for a statement of additional
information.
(c) The registrant undertakes to deliver any statement of additional
information and any financial statements required to be made available under
this Form N-4 promptly upon written or oral request to the Company at the
address or phone number listed in the prospectus.
(d) The Company represents that in connection with its offering of
the contracts as funding vehicles for retirement plans meeting the requirements
of Section 403(b) of the Internal Revenue Code of 1986, it is relying on a no-
action letter dated November 28, 1988, to the American Council of Life Insurance
(Ref. No. IP-6-88) regarding Sections 22(e), 27(c)(1), and 27(d) of the
Investment Company Act of 1940, and that paragraphs numbered (1) through (4) of
that letter will be complied with.
12
<PAGE>
(e) Massachusetts Mutual Life Insurance Company hereby represents that
the fees and charges deducted under the individual variable annuity contracts
described in this Registration Statement in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Massachusetts Mutual Life Insurance Company.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Panorama Separate Account, certifies that it meets all of the requirement for
effectiveness of this Post-Effective Amendment No. 3 pursuant to Rule 485(b)
under the Securities Act of 1933 and has caused this Post-Effective Amendment
No. 3 to Registration Statement No. 333-01363 to be signed on its behalf by the
undersigned thereunto duly authorized, all in the city of Springfield and the
Commonwealth of Massachusetts, on the 10th day of April, 1998.
PANORAMA SEPARATE ACCOUNT
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Thomas B. Wheeler*
----------------------
Thomas B. Wheeler, Chief Executive Officer
Massachusetts Mutual Life Insurance Company
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 3 to Registration Statement No. 333-01363 has been signed by the following
persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thomas B. Wheeler* Chief Executive Officer and April 10, 1998
- ---------------------- Chairman of the Board
Thomas B. Wheeler
/s/ John J. Pajak* President, Chief Operating Officer April 10, 1998
- ------------------ and Director
John J. Pajak
/s/ Joseph M. Zubretsky* Executive Vice President, April 10, 1998
- ------------------------ Chief Financial Officer &
Joseph M. Zubretsky Chief Accounting Officer
/s/ Roger G. Ackerman Director --
- ---------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 10, 1998
- -------------------
James R. Birle
/s/ Gene Chao* Director April 10, 1998
- --------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 10, 1998
- -------------------------
Patricia Diaz Dennis
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Anthony Downs* Director April 10, 1998
- ------------------
Anthony Downs
/s/ James L. Dunlap* Director April 10, 1998
- --------------------
James L. Dunlap
/s/ William B. Ellis* Director April 10, 1998
- ---------------------
William B. Ellis, Ph.D.
/s/ Robert M. Furek* Director April 10, 1998
- --------------------
Robert M. Furek
/s/ Charles K. Gifford* Director April 10, 1998
- -----------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 10, 1998
- ----------------------
William N. Griggs
/s/ George B. Harvey* Director April 10, 1998
- ---------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director April 10, 1998
- ---------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 10, 1998
- ---------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 10, 1998
- -------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 10, 1998
- --------------------
John F. Maypole
/s/ Alfred M. Zeien* Director April 10, 1998
- --------------------
Alfred M. Zeien
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
</TABLE>
14
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
As counsel to the Registrant, I, James M. Rodolakis, have reviewed this
Post-Effective Amendment No. 3 to Registration Statement No. 333-01363, and
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/ James M. Rodolakis
- ----------------------
James M. Rodolakis
Counsel
Massachusetts Mutual Life Insurance Company
15
<PAGE>
INDEX TO EXHIBITS
Exhibit 1(a) Connecticut Mutual Life Insurance Company Board of Directors
Resolution establishing the Separate Account
Exhibit 3(a) Form of Principal Underwriting Agreement with Connecticut
Mutual Financial Services, LLC
Exhibit 4(a) Form of Individual Deferred Variable Annuity Contract
Exhibit 4(b) Form of Individual Immediate Variable Annuity Contract
Exhibit 5 Form of application used with Individual Variable Annuity
Contracts
Exhibit 9 Opinion of and Consent of Counsel
Exhibit 10(a) Consent of Coopers & Lybrand L.L.P., Independent Accountants
Exhibit 10(b) Consent of Arthur Andersen LLP, Independent Public Accountants
Exhibit 10(c) Report of Arthur Andersen LLP, Independent Public
Accountants
16
<PAGE>
Exhibit 1
Connecticut Mutual Life Insurance Company Board of Directors Resolution
establishing the Separate Account
RESOLUTION AUTHORIZING EXECUTIVE OFFICERS
TO ESTABLISH SEPARATE ACCOUNT
AND OTHERWISE ACT ON BEHALF OF COMPANY
Voted:
to authorize the issuance and distribution of variable annuity contracts
and to authorize the Executive Officers of the Company, in preparation
for or in implementation of such issuance and distribution, to take
whatever action is necessary or desirable towards that end including, but
not necessarily limited to: the establishment of one or more Separate
Accounts, the application for and membership in any national securities
association, and compliance with all federal and state insurance,
securities or other laws, regulations or requirements relating thereto.
The undersigned, the duly selected, qualified Secretary of Connecticut Mutual
Life Insurance Company, a corporation, does hereby certify that the foregoing is
a true and correct copy of a resolution duly adopted by the Board of Directors
on April 5, 1968 at which meeting a quorum was present and votes, and that said
resolution has not been modified, amended or repealed.
Dated: June 26, 1981 /s/ David C. Kline
--------------------------
David C. Kline
Secretary
17
<PAGE>
Exhibit 3(a)
Form of Underwriting Agreement with Connecticut Mutual Financial Services, LLC
PRINCIPAL UNDERWRITING AGREEMENT
--------------------------------
AGREEMENT made as of the 1/st/ day of August, 1995 by and between
Connecticut Mutual Life Insurance Company, a Connecticut corporation ("CML"), on
its own behalf and on behalf of Panorama Separate Account ("Account"), and
Connecticut Mutual Financial Services, LLC, a Connecticut limited liability
Company ("CMFS").
WHEREAS, the Account was established on June 23, 1981 pursuant to
authority of CML's Board of Directors in order to set aside and invest assets
attributable to certain variable annuity contracts ("Contracts") issued by CML;
WHEREAS, CML has registered, and will continue the effectiveness of the
registration of the Account under the Investment Company Act of 1940, as amended
(the "1940 Act") and will register the Contracts under the Securities Act of
1933, as amended (the "1933 Act");
WHEREAS, CMFS is registered as a broker/dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD");
WHEREAS, CML and the Account desire to have Contracts sold and
distributed through CMFS and CMFS is willing to sell and distribute such
Contracts under the terms stated herein; and
WHEREAS, CMFS may desire to appoint CML, the insurer, as its agent to
receive money and perform other services.
WITNESSETH:
In consideration of the covenants hereinafter contained CML and CMFS
agree as follows:
1. Underwriter. CML hereby appoints CMFS as principal underwriter of the
-----------
Contracts during the term of this Agreement. CML reserves the right,
however, to refuse at any time or times to sell any Contracts hereunder for
any reason, and CML maintains ultimate responsibility for the sales of the
Contracts.
2. Undertakings Regarding Sales. CMFS shall use reasonable efforts to sell the
----------------------------
Contracts but does not agree hereby to sell any specific number of
Contracts and shall be free to act as underwriter of other securities. All
premiums for Contracts shall be held in a fiduciary capacity and remitted
promptly (and in any event within 30 days) in full together with such
application, forms and any other required documentation to CML. Checks or
money orders in payment of premiums shall be drawn to the order of "CML".
CMFS agrees to offer the Contracts for sale in accordance with the
prospectus then in effect. CMFS is not authorized to give any information
or to make any representations concerning the Contracts other than those
contained in the current prospectus filed with the SEC or in such sales
literature as may be authorized by CML. CML shall review and approve all
advertising concerning the Contracts.
3. Compliance. CMFS shall conform to the Rules of Fair Practice of the NASD,
----------
and the securities laws of any jurisdiction in which it sells, directly or
indirectly, any Contracts. CMFS shall take reasonable steps to ensure that
its associated persons sell Contracts to persons for whom the Policy is
suitable. CMFS agrees to make timely filings with the SEC, the NASD, and
such other regulatory authorities as may be required of any sales
literature relating to the Contracts and intended for distribution to
prospective investors. CMFS also agrees to furnish to CML sufficient copies
of any agreements or plans it intends to use in connection with any sales
of Contracts. CMFS further agrees to provide information or reports with
respect to its services hereunder pursuant to request by any regulatory
authority having jurisdiction with respect thereto, in order that such
regulatory authority may ascertain whether CML's variable annuity are being
conducted in a manner consistent with applicable laws and regulations.
4. Registration and Qualification of Contracts. CML agrees to execute such
-------------------------------------------
papers and to do such acts and things as shall from time-to-time be
reasonably requested by CMFS for the purpose of qualifying and maintaining
qualification of the Contracts for sale under applicable state law and for
maintaining the registration of the Account and interests therein under the
1933 Act and the 1940 Act, to the end that there will be available for sale
from time-to-time such amount of the Contracts as CMFS may reasonably be
expected to sell. CML shall advise CMFS promptly of (a) any action of the
SEC or any authorities of any state or territory, of which it may be
advised, affecting registration or qualification of the Account, or rights
to offer the Contracts for sales, and (b) the happening of any event which
makes untrue any statement or which requires the statement or prospectus in
order to make the statements therein not misleading.
18
<PAGE>
5. CMFS Independent Contractor. CMFS shall be an independent contractor. CMFS
---------------------------
is responsible for its own conduct and the employment, control and conduct
of its agents and employees and for injury to such agents or employees or
to others through its agent or employees. CMFS assumes full responsibility
for its agents and employees under applicable statutes and agrees to pay
all employer taxes thereunder. All persons selling Contracts shall be duly
licensed as insurance producers pursuant to applicable state laws, and CML
shall have responsibility for arranging for such licensing. CMFS and CML
may jointly enter into sales agreements with other independent
broker-dealers for the sale of Contracts. Notwithstanding the above, CML
expressly reserves to itself the ultimate responsibility and authority for
direction and control of the underwriting services provided hereunder;
including the ultimate right to appoint and discharge agents selling
Contracts, and ultimate control over, and responsibility for, marketing the
Contracts.
6. Expenses Paid by CML. While CMFS continues to act as agent of CML to obtain
--------------------
subscriptions for and to sell Contracts, and provided CMFS receives no
--------
commission for the sale of the Contracts, CML shall pay the following:
(a) all expenses of printing and distributing any prospectus for use in
offering the Contracts for sale, and all other copies of any such
prospectus used by CMFS, and
(b) all other expenses of advertising and of preparing, printing and
distributing all other literature or material for use in connection
with offering the Contracts for sale.
7. Interests in and of CMFS. It is understood that any of the policyholders,
------------------------
directors, officers, employees and agents of CML may be a shareholder,
director, officer employee or agent of, or be otherwise interested in,
CMFS, any affiliated person of CMFS, any organization in which CMFS may
have an interest or any organization which may have an interest in CMFS;
that CMFS, any such affiliated person or any such organization may have an
interest in CML; and that the existence of any such dual interest shall not
affect the validity hereof or of any transaction hereunder except as
otherwise provided in the Charter, Articles of Incorporation, or by-laws of
CML and CMFS, respectively, or by specific provision of applicable law.
8. Compensation for Sales of Contracts and Appointment of CML as Agent of
----------------------------------------------------------------------
CMFS.
----
(a) For sales of the Contracts by associated persons of CMFS and the
continuing obligations of CMFS set forth herein, CML shall pay to full
time Life insurance agents of CML who are also associated persons of
CMFS on behalf of CMFS the commissions set forth in Schedule A to this
Agreement, as such Schedule may be amended from time-to-time. For
Contracts sold under agreements that CMFS and CML enter into with other
broker-dealers, CML shall pay on behalf of CMFS, the commissions set
forth in Schedule B to this Agreement, as such Schedule may be amended
from time-to-time.
(b) CML agrees to maintain all required books of account and related
financial records on behalf of CMFS. All such books and records shall
be maintained and preserved pursuant to Rules 17a-3 and 17a-4 under the
Securities Exchange Act (or the corresponding provisions of any future
federal securities laws or regulations). In addition, CML agrees to
maintain records of all sales commissions paid to the associated
persons of CMFS and any other broker-dealers pursuant to paragraph (a)
above for the sale of the Contracts. All such books and records shall
be owned by and under the control of CML. CML also agrees to send to
CMFS's customers all required confirmations of customer transactions,
and on behalf of CMFS to pay all sales commissions due and payable to
full time Life insurance agents of CML who are also associated persons
of CMFS and/or to other broker-dealers duly authorized by CMFS to sell
the Contracts.
9. Indemnification.
---------------
(a) CML agrees to indemnify and hold harmless CMFS and each director or
officer thereof and each person, if any, who is associated with CMFS
within the meaning of the 1934 Act against any and all loss, liability,
claims, damage, and expenses whatsoever (including any and all expenses
reasonably incurred in investigating or defending against any
litigation commenced or threatened or any claim whatsoever) arising out
of any untrue or alleged untrue registration statement, or sales
material relating to the Contracts prepared by CML or supplied to CMFS
by CML or in any application ("application") filed in any state in
order to qualify the same for sale of the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) CMFS agrees to indemnify and hold harmless CML and each director or
officer thereof, and each person, if any who controls CML within the
meaning of the 1933 Act, its agents, subsidiaries and employees,
against any and all loss, liability, claims, damages, and expense
whatsoever (including but not limited to any and all expenses
reasonably incurred in investigating or defending against any
litigation commenced or threatened or any claim whatsoever) arising out
of any untrue or alleged untrue statement or representation made
(except as such statements may be made in reliance on the prospectus,
registration statement and sales material supplied by CML), the failure
to deliver a currently effective pro-
19
<PAGE>
spectus (provided that CMFS shall be entitled to rely on
representations by CML as to which prospectus is currently effective at
any point in time and CMFS shall not be liable for delivery a
prospectus that is not currently effective at the time of delivery
thereof due to a misrepresentation of the currency thereof by CML or
other failure by CML, to notify CMFS that such prospectus was no longer
effective) or the use of any unauthorized sales literature by CMFS (or
its employees), in connection with the sale of the Contracts.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any such litigation or claim, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section, notify the
indemnifying party under this Section, notify the indemnifying party of
the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability, which it may
have to any indemnified party otherwise than under this Section. In
case any such litigation or claim is brought against any indemnified
party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein
and, to the extent that it may wish, assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than the reasonable cost of
investigation.
10. Liability. Each party shall be liable for its own misconduct and negligence
---------
hereunder.
11. Effective Date and Termination. This Agreement shall become effective as of
------------------------------
August 1, 1995 and shall supersede any prior Principal Underwriting
Agreement which may exist between the parties, and:
(a) shall continue in force from year-to-year, subject to prior termination
as provided herein;
(b) may at any time be terminated on sixty day's written notice to CMFS by
CML;
(c) may at any time be terminated by CML if CMFS fails to perform in a
satisfactory manner;
(d) may be terminated by CMFS on sixty days' written notice to CML.
Termination of this agreement pursuant to this section shall be without
payment of any penalty. In the event of termination for any reason, CML
shall retain all records relating hereto, free from any claim or retention
of rights by CMFS.
12. Confidentiality. CMFS agrees not to disclose or use any records or
---------------
information obtained hereunder in any manner whatsoever except as expressly
authorized herein, and will keep confidential any information obtained
pursuant hereto, and disclose such information only if CML has authorized
such disclosure, or if such disclosure is expressly required by applicable
state or federal regulatory authorities.
13. Amendment. This Agreement may be amended only by mutual consent of the
---------
parties by an instrument in writing.
14. Applicable Law and Liabilities. This Agreement is executed and delivered in
------------------------------
the State of Connecticut and shall be governed by and construed in
accordance with the laws of Connecticut.
This Agreement shall be subject to all applicable provisions of law,
including, without limitation, the applicable provisions of the 1940 Act. To the
extent that any provisions herein contained conflict with any applicable
provisions of law, the latter shall control
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Connecticut Mutual Life Insurance Company
By: /s/ Anne Melissa Dowling
---------------------------------------
Title: Chief Investment Officer
------------------------------------
Connecticut Mutual Financial Services, LLC
By: /s/ Don Pond
---------------------------------------
Title: President
------------------------------------
20
<PAGE>
Schedule A
----------
In connection with the services provided hereunder CMFS shall receive the
following: (a) 0.0060% of the Contract Value of each Panorama Contract
underwritten on behalf of the Company; (2) any Contingent deferred sales charge
received on such Contract; (3) any Annual Contract fee received on such
Contracts; and any exchange fee generated from such Contracts.
21
<PAGE>
Exhibit 4(a)
Form of Individual Deferred Variable Annuity Contract
Massachusetts Mutual Life Insurance Company
Springfield, Massachusetts
ANNUITANT AGE AND SEX
CONTRACT NUMBER MATURITY DATE
CONTRACT DATE
If the Annuitant is living on the Maturity Date,
Massachusetts Mutual Life Insurance Company will
pay a variable life annuity. The annuity will
consist of a series of variable payments to be
paid to the Annuitant. Payments will begin on
the Maturity Date and continue as long as the
Annuitant lives. In no case will payments be
made for less than the Guaranteed Period.
Payments will be subject to all provisions of
this contract.
When annuity payments have begun, the annual
rate of return earned on the assets of the
Separate Account must be equal to or exceed
4.23% for the variable payments not to decrease.
This Contract is issued by the Company at its
Home Office, 1295 State Street, Springfield,
Massachusetts, 01111-0001, on the date of issue.
It is a legal contract between the contract
owner and the insurer.
READ YOUR POLICY CAREFULLY
SECRETARY CHAIRMAN
REGISTRAR
22
<PAGE>
SUMMARY OF REQUIRED PROVISIONS AND OTHER CONTRACT OWNER RIGHTS
The owner of this contract has exclusive rights to assign this contract and
receive every benefit provided. The owner also has exclusive rights to exercise
every right, privilege and option this contract grants or that we allow. The
owner has these rights while the annuitant is alive, unless otherwise provided
in this contract. For example the owner may:
. Change the owner or beneficiary. (Change of Owner and Beneficiary, page 5.)
. Redeem a portion of this contract. (Partial Redemption, page 5.)
. Surrender this contract in full. (Full Surrender, page 5.)
. Stop purchase payments but continue this contract in force as a paid-up
deferred annuity. (Paid-up Annuity, page 6.)
. Change the frequency of purchase payments. (Purchase Payments, page 6.)
. Reinstate the contract after lapse. (Reinstatement, page 6.)
. Modify the maturity date. (Modified Maturity Date, page 6.)
. Instruct the Company how to vote at meetings of the Fund shareholders. (Voting
Rights page 8.)
To exercise any of these rights, communicate with the Company's nearest
representative or directly with the Annuity Service Center. Please notify the
Annuity Service Center promptly of any change of address of the
Owner or the Annuitant.
23
<PAGE>
PANORAMA DEFERRED VARIABLE ANNUITY CONTRACT
Periodic Purchase Payments or Single Purchase Payment
Retirement Income (120 Months Certain) after Maturity Date
Participating
ANNUITY PAYMENTS PROVIDED BY THIS CONTRACT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
P81-106A
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
DEFINITIONS PAGE 5
SEPARATE ACCOUNT PAGE 5
OWNER AND BENEFICIARY PAGE 5
Owner, Beneficiary, Change of Owner or Beneficiary
PARTIAL REDEMPTION OR FULL SURRENDER PAGE 5
PAID-UP ANNUITY PAGE 6
PURCHASE PAYMENT PAGE 6
Increase or Decrease in Purchase Payments, Grace Period,
Reinstatement
DIVIDENDS PAGE 6
MODIFIED MATURITY DATE PAGE 6
ACCUMULATION UNITS AND VALUATION PROVISIONS PAGE 6-7
Net Purchase Payments, Application of Net Purchase Payments,
Accumulation Units, Accumulation Unit Value, Net Investment
Factor, Contract Maintenance Fee
RETIREMENT INCOME PAGE 7
Annuity Units and Payments, Annuity Unit Value, Transfer
of Annuity Units
GENERAL PROVISIONS PAGE 7-8
Incontestability, Age and Sex, Assignment or Transfers of the
Contract, The Contract, Death Proceeds, Payment of Benefits,
Voting Rights, Guarantees, Statements to Owner, Insulation
VARIABLE SETTLEMENT OPTIONS PAGE 8-9
FIXED SETTLEMENT OPTIONS PAGE 9
VARIABLE SETTLEMENT OPTIONS PURCHASE RATES PAGE 9
P81-106A
</TABLE>
24
<PAGE>
SPECIFICATIONS
ANNUITANT AGE AND SEX
CONTRACT NUMBER MATURITY DATE
DATE OF ISSUE
OWNER
BENEFICIARY
BENEFITS AND PURCHASE PAYMENTS
------------------------------
ANNUAL PURCHASE PAYMENT:
PAYABLE TO MATURITY DATE OR UNTIL PRIOR DEATH OF THE ANNUITANT.
ENDORSEMENT RESTRICTING TRANSFERABILITY
---------------------------------------
ANYTHING IN THIS CONTRACT TO THE CONTRARY NOTWITHSTANDING, IF THE CONTRACT OWNER
IS OTHER THAN THE TRUSTEE OF A TRUST ESTABLISHED UNDER SECTION 401 OF THE
INTERNAL REVENUE CODE OF 1954, AS AMENDED, IT MAY NOT BE SOLD, ASSIGNED,
DISCOUNTED, OR PLEDGED AS COLLATERAL FOR A LOAN OR AS SECURITY FOR THE
PERFORMANCE OF AN OBLIGATION OR FOR ANY OTHER PURPOSE, TO ANY PERSON OTHER THAN
THIS COMPANY.
CONTRACT YEARS, MONTHS AND ANNIVERSARIES ARE COMPUTED FROM THE CONTRACT DATE.
PAGE 3
25
<PAGE>
DEFINITIONS
YOU, YOUR-Use of the words "you" or "your" in this contract refers to the owner.
WE, OUR, US-Use of the words "we", "our", or "us" in this contract refers to
Massachusetts Mutual Life Insurance Company and our Annuity Service Center.
VALUATION DATE-means any date the New York Stock Exchange is open for business
and the Separate Account is valued,
VALUATION PERIOD-means the period beginning on the day following any Valuation
Date and ending on the next Valuation Date. It may be one day or more than one
day.
ACCUMULATION UNIT-means a unit used to measure the value of your share of a
sub-account before annuity payments begin.
ACCUMULATED VALUE-means the value of all accumulation units credited to this
contract.
ANNUITY UNIT-means a unit used to determine the amount of each life annuity
payment.
CONTRACT YEAR-means the period from one contract anniversary to the next.
DUE PROOF OF DEATH-means one of the following:
(a) A copy of a certified Death Certificate.
(b) A copy of a certified decree of a court of
competent jurisdiction as to the finding of death.
(c) A written statement by a medical doctor who
attended the deceased.
(d) Any other proof satisfactory to us.
FUND-means the investment company or companies in which the Separate Account
assets are invested.
WRITTEN REQUEST-means a request in writing in a form satisfactory to us and
mailed or delivered to our Annuity Service Center.
ANNUITY SERVICE CENTER-The office to which notices, requests and purchase
payments should be sent. You will be notified in writing of the address of the
service center applicable to your contract.
SEPARATE ACCOUNT
Under this contract, Separate Account means a segregated investment account or
accounts established by the company under Connecticut Law. There will be several
sub-accounts within the Separate Account covered by this contract.
Assets of each sub-account will be invested in Fund shares. We reserve the right
to change investment companies or to substitute other investments for Fund
shares. Purchase payments may be placed in any one sub-account or distributed
among various sub-accounts. You may, by written request, choose any allocation
you wish. You may change the allocation of future purchase payments at any time,
without charge.
Once funds are in the contract, you may transfer all or a portion of the
accumulated values among one or more sub-accounts. We will make such a transfer
upon a written request from you. A transaction charge not to exceed, $20.00 will
be deducted from each sub-account from which a transfer is being made. There is
no limit on the number of transfers that can be made prior to the start of life
income payments.
OWNER AND BENEFICIARY
Owner
The owner or owners named under this contract may die. If so, the owner will be
the executor or administrator of the last owner to die. This assumes this
contract does not provide otherwise.
Beneficiary
The beneficiary or beneficiaries named under this contract may die before the
annuitant. If so, the beneficiary will be the executor or administrator of the
annuitant. This assumes this contract does not provide otherwise.
Change of Owner or Beneficiary
While the annuitant is alive, you can change the owner or beneficiary by written
request.
. The change will take effect on the date you sign the request. The annuitant
does not have to be living when we receive the request at our Annuity Service
Center for the change to be effective. The change will be subject to any
payment made or actions taken by us before receiving the request.
PARTIAL REDEMPTION OR
FULL SURRENDER
You may redeem a portion of this contract or you. may surrender this contract in
full. This may be done at any time on or before life income payments begin.
Partial Redemption
You may request to redeem a portion of the value in this contract. You may
redeem all of the value in a particular sub-account.
. A redemption will be effective on the date of your signed written request.
. We will compute the accumulated value on the valuation date that coincides
with the date we redeem the funds from the sub-account.
. A transaction charge not to exceed $20.00 will be deducted from each
sub-account from which a redemption is made. The charge will be deducted
before any other calculations are made.
. Each calendar year you may redeem up to 10% of the accumulated value in this
contract without penalty. The 10% will apply to the accumulated value at the
beginning of the calendar year. Any amount redeemed in excess of 10% will be
subject to the following surrender charge.
Contract Year Surrender Charge
1-5 5%
6-10 4%
11-15 3%
16+ 0%
. Cash payment will be made within 7 days (plus any additional period the
Federal Government may allow)
26
<PAGE>
after we receive the request at our Annuity Service Center.
Full Surrender
. You may request to surrender this contract for its full surrender value at
any time.
. Surrender will be effective on the date of your written request.
. We will compute the accumulated value on the valuation date that coincides
with the date we redeem the funds from the sub-account.
. When a full surrender is made, the maintenance fee will be deducted at the
time of the surrender. The fee will be deducted before any other calculations
are made.
. Cash payment will be made within 7 days (plus any additional period the
Federal Government may allow) after we receive the request at our Annuity
Service Center.
A) If no partial redemptions have been made during the calendar year you make a
full surrender.
. Ten percent of the accumulated value at the beginning of the calendar
year can be surrendered without penalty. The accumulated value in excess
of 10% will be subject to the following surrender charge:
Contract Year Surrender Charge
1-5 5%
6-10 4%
11-15 3%
16+ 0%
B) If a partial redemption has been made during the calendar year you make a
full surrender.
. The total of all partial redemptions made during the calendar year may be
less than 10% of the accumulated value at the beginning of the contract
year. If so, the balance of the 10% may be surrendered without penalty. The
accumulated value in excess of 10% will be subject to the surrender charge
shown above.
The total of all partial redemptions made during the calendar year may equal or
exceed 10% of the accumulated value at the beginning of the calendar year. If
so, the accumulated value will be subject to the surrender charge shown above.
PAID-UP ANNUITY
If any purchase payment due is not paid by the end of the grace period, we will
automatically continue this contract in force as a paid-up deferred annuity.
This is provided this contract has not been surrendered for its full surrender
value.
. This contract will continue in force, initially, for the number of
accumulation units credited to it as of the due date of the purchase payment
in default. As the maintenance fee is deducted each year, this number of
accumulation units will be reduced.
. While on the paid-up basis, this contract may be partially redeemed or fully
surrendered on or before the maturity date. Redemption or surrender will be in
accordance with the Partial Redemption or Full Surrender provision.
. While on the paid-up basis, you may transfer all or a portion of the
accumulated values among one or more sub-accounts. This is described in the
Separate Account provision.
PURCHASE PAYMENT
This contract is made in consideration of the application and the payment of all
purchase payments due.
. All purchase payments are payable to us at our Annuity Service Center.
. No net purchase payment may be less than $10.00.
. A single purchase payment is due on the date of issue of this contract.
. Purchase payments payable annually are due on the first day of each contract
year.
. Purchase payments payable semi-annually are due on the first day of each
contract year and six months thereafter.
. Purchase payments payable quarterly are due on the first day of each contract
year and every three months thereafter.
. Purchase payments payable monthly are due on the first day of each contract
year and every month thereafter.
. The mode of purchase payment may be changed on any contract anniversary to
annual, semi-annual, quarterly, or monthly.
Increase or Decrease in Periodic Purchase Payments
Periodic purchase payments may be increased or decreased on any purchase payment
due date.
. After the first contract year, increases may be made up to twice the purchase
payment made during the first contract year. Increases in excess of this
amount may be made only with our consent.
Grace Period
For the payment of each periodic purchase payment after the first, we will allow
a grace period of 31 days after the due date. This contract will continue in
force during the grace period.
Reinstatement
This contract may be reinstated at any time during three years after default in
payment of a periodic purchase payment.
. Reinstatement will not be made if this contract has been surrendered for its
full surrender value.
. Reinstatement will be made upon payment of at least one past due purchase
payment.
. Reinstatement will become effective on the valuation date that coincides with
the date we receive payment. If no valuation date coincides, we will use the
next valuation date as the effective date of reinstatement.
27
<PAGE>
. This provision does not apply if this contract was purchased on the single
premium basis.
DIVIDENDS
While this contract is in force, we will credit it with dividends. Dividends are
based on such shares of the divisible surplus (if any) as we may apportion at
the end of each contract year.
. We expect that any contribution to divisible surplus by this contract (thus
making it eligible for dividend credit) will arise in later contract years.
. Any dividends will be of modest amount.
. We will apply dividends to increase the value of the Separate Account, or we
will pay them in cash to you.
MODIFIED MATURITY DATE
This contract may be continued in force beyond the present maturity date. This
can be done upon your written request. Return this contract to our Annuity
Service Center. The above must be done before the present maturity date. We will
then continue this contract in force, during the annuitant's lifetime, until a
modified maturity date.
. The modified maturity date will be the tenth contract anniversary following
the present maturity date. The date may be earlier if required by the language
of any qualified plan.
. Purchase payments may either continue or cease after the present maturity
date.
. You may partially redeem this contract at any time on or before the modified
maturity date. No surrender charge will be applied to a partial redemption
after the present maturity date. A transaction charge, not to exceed $20.00,
will be deducted from each sub-account from which a partial redemption is
made.
. You may fully surrender this contract at any time on or before the modified
maturity date. No surrender charge will be applied to the full surrender after
the present maturity date. The maintenance fee will be deducted at the time of
the full surrender.
. An income may be elected on or before the modified maturity date. The
surrender charge will not apply when a variable or a fixed income is elected
after the present maturity date. However, the maintenance fee will be deducted
when a fixed income is elected.
. On or before the start of life income payments, you may transfer all or a
portion of the accumulated values among one or more sub-accounts. This is
described in the Separate Account provision.
ACCUMULATION UNITS AND VALUATION PROVISIONS
Net Purchase Payments
Each net purchase payment will equal the purchase payment made less any
applicable premium taxes.
Application of Net Purchase Payments
. We will apply each net purchase payment received at our Annuity Service Center
to provide accumulation units in one or more sub-accounts. This will be done
in accordance with a written request from you.
. The minimum amount that may be applied to any sub-account is $10.00.
. You may change your allocation of net purchase payments among sub-accounts
at any time. A written request from you is needed to change the allocation.
The new allocation will be effective after we receive your written request at
our Annuity Service Center.
Accumulation Units
. We will determine the number of accumulation units purchased for each sub-
account. This will be done by dividing the net purchase payment allocated to
the sub-account by the dollar value of one accumulation unit on the date
allocated.
Accumulation Unit Value
. The value of an accumulation unit on any valuation date is the product of
(a) and (b).
(a) The value on the preceding valuation date.
(b) The net investment factor for the sub-account for the valuation period
just ended.
. The dollar value of an accumulation unit may change from one valuation date
to the next.
P81-106A
. The value of an accumulation unit on any date other than a valuation date is
equal to its value on the next valuation date.
Net Investment Factor
A net investment factor has to be calculated for each sub-account. We compute
the net investment factor for a sub-account as follows:
1) We determine the net asset value per share at the end of the valuation
period for the fund in which the sub-account assets are invested.
2) We add to (1) the amount per fund share of any dividend or capital gain
distribution made by the fund if the ex-dividend date occurs during the
valuation period.
3) We subtract from (2) the reserve per fund share for taxes on realized and
unrealized capital gains of the sub-account. We will add a credit to item
(2) for capital losses (realized and unrealized).
4) We divide the result in (3) by the net asset value per fund share at the
beginning of the valuation period less the reserve for taxes per fund share
at that time.
5) We subtract from (4) an amount not to exceed .000020 for each day of the
valuation period.
Contract Maintenance Fee
We will charge an amount not to exceed $30.00 on each December 31st as a
contract maintenance fee. An equal portion of the fee will be deducted from
each sub-account that has sufficient value in it.
. If a full surrender is made, a maintenance fee will be deducted from the
amount being surrendered.
28
<PAGE>
. The maintenance fee will also apply if this contract is under the Modified
Maturity Provision.
. The maintenance fee will not apply if an income is being paid under this
contract.
RETIREMENT INCOME
This contract automatically provides for a variable retirement income (120
months certain and life) to be paid beginning on the maturity date. The income
will be payable during the lifetime of the annuitant.
. Payment of the retirement income will be subject to satisfactory proof of age
of the annuitant.
. We may pay the accumulated value in one sum if it is less than $2,000.
. We may change the payment basis to quarterly, semi-annual or annual. We will
do this if the monthly retirement income is less than $20.00. We will pay 120
monthly payments under this contract. If the annuitant is alive after 120
monthly payments have been made, we will continue to make monthly payments as
long as the annuitant is alive. If the annuitant dies before 120 monthly
payments have been made, we will continue monthly payments to the beneficiary
for the balance of the 120 month period. The beneficiary may, at his/her
option, elect to receive the commuted value of the payments instead of the
monthly income. If so, we will calculate the commuted value of the payments
remaining based on the amount of the last income payment received by the
annuitant before death. The commuted value will be calculated at 3 1/2%
interest per year compounded annually.
The income will be based on the following amount:
1) During the first 3 contract years, the income will be based on the
accumulated value less the following charge:
Contract Year Charge
1 3%
2 2%
3 1%
2) After the 3rd contract year, the income will be based on the accumulated
value.
Annuity Units and Payments
The accumulated value will be used to purchase annuity units. The dollar amount
of annuity payments and the number of annuity units are determined as follows:
. The purchase rate is shown on page 9 of this contract. It is adjusted for the
annuitant's age on the first annuity payment date and year of birth as
described in the Annuity Tables section on page 8 of this contract.
. Calculate the number of annuity units in each sub-account. Do this by dividing
the product of the accumulated value applied to a sub-account and the purchase
rate by the value of one annuity unit in that sub-account on the maturity
date.
. The amount of each annuity payment equals the product of the appropriate
number of annuity units and the annuity unit values on the payment date. The
amount of each payment may vary.
Annuity Unit Value
. The value of an annuity unit in each sub-account on any valuation date is
determined as follows:
1) Multiply the net investment factor for the valuation period just ended by
the value of the annuity unit on the preceding valuation date.
2) Divide the result in (1) by an interest factor. The interest factor equals
1.00 plus the interest rate for the number of days since the preceding
valuation date. Interest is based on an effective annual rate of 3 1/2%.
. The dollar value of an annuity unit may change from one valuation date to the
next.
. The value of an annuity unit on any date other than a valuation date is equal
to its value on the succeeding valuation date.
Transfer of Annuity Units
You may transfer all or a portion of the annuity units among one or more
sub-accounts. The amount transferred will be calculated as described below:
1) We will determine, from the first sub-account, the dollar value of the next
annuity payment on its due date.
2) We will multiply the value in (1) by the percentage of the annuity units to
be transferred.
3) We will then credit you with the number of annuity units in the sub-account
to which the transfer is being made which will give an equal dollar value
for the next annuity payment.
The equivalent number of annuity units equal to the dollar value of the next
annuity payment will be cancelled from the original sub-account. Subsequent
payments will reflect the changes in annuity units in each sub-account.
Only one such transfer may be made each calendar year.
GENERAL PROVISIONS
Incontestability
We cannot contest this contract after it has been in force during the lifetime
of the annuitant for a period of two years from the date of issue.
Age and Sex
If the annuitant's age or sex has been misstated, we will adjust the amount
payable under this contract. It will be the amount the purchase payment would
have purchased using the correct age and sex. The adjustment will be based on
the rates for this contract in effect on the date of issue.
. The annuitant's attained age on any contract anniversary is the age listed on
page 3 increased by the number of contract years elapsed.
. Any overpayments we make on account of misstatement of age or sex will be
charged against the current or next succeeding payments to be made by us.
. Any underpayments we make on account of misstatement of age or sex will be
paid to whomever is entitled.
29
<PAGE>
Assignment or Transfers of the Contract
. Written notice of the terms of a transfer or a copy of an assignment must be
filed at our Annuity Service Center. Until we receive such notice, we will not
be required to take notice of or be responsible for any transfer of interest
in this contract by an assignment, agreement or otherwise.
. We will not be responsible for the validity of any assignments.
. Any assignment made after the annuitant's death will be valid only with our
consent.
The Contract
This contract and the application constitute the entire contract. A copy of the
application is attached to and made a part of this contract.
. All statements in the application will be deemed representations and not
warranties.
. No statement will be used to void this contract or to defend against a claim
under it unless contained in the application.
. Our agents cannot alter or modify any of the terms of this contract. They
cannot waive any of its provisions.
Death Proceeds
. Proceeds payable upon death of the annuitant under this contract before the
maturity date will consist of the accumulated value on the date due proof of
death is received in our Annuity Service Center,
. Death proceeds will include the value of any unapplied dividend credits.
Payment of Benefits
. All sums payable by us under this contract are payable only at our Annuity
Service Center.
. In any settlement, we may require that this contract be returned to our
Annuity Service Center.
Voting Rights
To the extent required to permit this contract to qualify under the Investment
Company Act of 1940 of the United States (and any subsequent amendments), you
have the right to instruct us how to vote the Fund shares underlying
accumulation units you have in any sub-account.
Guarantees
Annuity payments under this contract will not be adversely affected by actual
mortality and expense experience of the Separate Account.
Statements to Owner
We will furnish you a statement containing information required by applicable
state law and the Investment Company Act of 1940 of the United States (or
subsequent amendments).
. In no event will the statement be provided less often than semi-annually.
Insulation
The portion of the assets of the Separate Account equal to the reserve and other
liabilities of the Separate Account will not be charged with liabilities
arising out of any other business we may conduct.
VARIABLE SETTLEMENT OPTIONS
If an income is elected, other than the automatic income, this contract will be
terminated and another contract will be issued in its place,
. Election of an income option must be made in writing on a form satisfactory to
us.
. In the case of death proceeds, the beneficiary may elect an option within the
90 day period following receipt at our Annuity Service Center of due proof of
death. If no election is made, death proceeds will be paid in a single sum at
the end of the 90 day period. Payment will be based on the then accumulation
unit value.
. Applicable state law may not permit annuity payments to be made on a variable
basis. If not, the annuity payments will be payable under the provisions of
the Fixed Settlement Options.
When a life income is elected, it will be based on the following amount:
1) During the first 3 contract years, the life income will be based on the
accumulated value less the following charge:
Contract Year Charge
1 3%
2 2%
3 1%
2) After the 3rd contract year, the life income will be based on the
accumulated value.
Option A. Life Annuity. A variable annuity payable monthly while the payee is
alive. Payments will cease with the last monthly payment due preceding the
payee's death.
Option B. Life Annuity With Guaranteed Period. A variable annuity payable
monthly while the payee is alive. In no case will payments be made for less than
the guaranteed period. The guaranteed period may be 60, 100, 120 or 240 months,
as elected by the payee.
Option C. Unit Refund Life Annuity. A variable annuity payable monthly while the
payee is alive. Upon due proof of the payee's death, an additional payment may
be made. The additional payment is determined by calculating the excess, if any,
of (a) over (b).
(a) The accumulated value divided by the value of an annuity unit on the date
annuity payments begin.
(b) The number of annuity units under this contract times the number of
monthly payments made.
The excess, if any, is multiplied by the value of an annuity unit on the date
the additional payment is made.
Option D. Joint Life Annuity For Payee and One Other Person with Two-Thirds
Annuity Units to Survivor. (One Hundred and Twenty Months Certain.) A joint
variable annuity payable monthly to the payee and one other person named at the
election of this option. We will pay 120 monthly payments under this op-
30
<PAGE>
tion. If both payees are living after 120 monthly payments have been made, we
will continue to make monthly payments as long as both payees live.
If one payee dies before 120 monthly payments have been made, we will continue
payments to the surviving payee for the balance of the 120 month period. At the
end of the 120 month period, payments will continue to the surviving payee for
life. Such payments will be computed on the basis of two-thirds of the number of
annuity units in effect during the joint lifetime.
Option E. Specified Payments for a Variable Period. We will make equal payments
of the accumulated value. Payments may be made on a monthly, quarterly, semi-
annual or annual basis.
Once each calendar year you may change the amount of the payment. This may be
done by sending a written request to us.
This option may be elected prior to the maturity date of this contract. If so,
each calendar year up to 10% of the accumulated value at the beginning of the
calendar year will be paid out without a surrender charge being applied. Any
amount paid out in excess of 10% will be subject to the following surrender
charge.
Contract Year Surrender Charge
1-5 5%
6-10 4%
11-15 3%
16+ 0%
No surrender charge will be applied on or after the maturity date of this
contract.
You may, at any time after this option is elected, withdraw all or a portion of
the remaining accumulated value. If the withdrawal is made prior to the maturity
date of this contract, any amount withdrawn in excess of 10% of the accumulated
value at the beginning of the calendar year will be subject to the surrender
charge shown above.
Payments made during the calendar year of the partial or full withdrawal will be
used in determining the 10%. If the full or partial withdrawal is made after the
maturity date of this contract, no surrender charge will be applied.
Annuity Tables.
The tables on the next page show the dollar amount of the
P81-106A
first monthly annuity payment for each $1000 applied. The accumulation units
applied to an annuity will be at the accumulation unit value on the payment
date. The amounts shown in the tables are based on the Progressive Annuity Table
assuming births in the year 1900. An interest rate of 3 1/2% is used.
. In using the Annuity Tables, the age of the annuitant must be adjusted
depending on his/her year of birth, as shown in the following chart:
Year of Birth Adjusted Age
Before 1900 Actual Age +1
1900-1919 Actual Age
1920-1939 Actual Age - 1
1940-1959 Actual Age - 2
1960-1979 Actual Age - 3
Adjustments for years of birth after 1979 will be made in a manner consistent
with the above.
. If Option D is elected, the sex and adjusted age of the joint payee will also
be used.
Payment Provisions.
. If any variable settlement option payment is less than $20, we may change the
payment basis to equivalent quarterly, semi-annual or annual payments.
. If the amount to be applied under a variable settlement option is less than
$2,000, we may discharge our obligation by paying the amount in one sum.
FIXED SETTLEMENT OPTIONS
The payee of proceeds, may elect to receive annuity payments under our fixed
income settlement options instead of our variable income settlement options. The
income will be based on the following amount:
1) Prior to the maturity date of this contract, the income will be based on
the full surrender value as described on page 5 of this contract.
2) On the maturity date of this contract, the income will be based on the
accumulated value less the maintenance fee.
. Payments will be based on our income settlement rates in our corresponding
qualified or non-qualified contracts being offered for retirement plans at
that time.
. You may use part or all of the accumulated value to provide the fixed income.
. Any accumulated surrender value applied under a fixed settlement option will
be transferred from the Separate Account to our General Assets.
31
<PAGE>
VARIABLE SETTLEMENT OPTIONS
PURCHASE RATES PER $1,000
<TABLE>
<CAPTION>
Age Nearest
Birthday OPTION A OPTION B - No. of Mos. Certain OPTION C
No Period Unit
Male Female Certain 60 100 120 240 Refund
<S> <C> <C> <C> <C> <C> <C> <C>
50 54 $4.74 $4.73 $4.71 $4.69 $4.52 $4.53
51 55 4.84 4.82 4.80 4.78 4.58 4.60
52 56 4.94 4.92 4.89 4.87 4.65 4.67
53 57 5.04 5.03 4.99 4.97 4.71 4.75
54 58 5.16 5.14 5.10 5.07 4.78 4.84
55 59 5.28 5.25 5.21 5.18 4.85 4.93
56 60 5.40 5.38 5.32 5.29 4.91 5.02
57 61 5.54 5.51 5.45 5.41 4.98 5.12
58 62 5.69 5.65 5.58 5.53 5.05 5.22
59 63 5.84 5.80 5.71 5.66 5.11 5.32
60 64 6.01 5.95 5.86 5.79 5.18 5.44
61 65 6.18 6.12 6.01 5.94 5.24 5.56
62 66 6.37 6.30 6.17 6.08 5.30 5.68
63 67 6.57 6.49 6.34 6.24 5.36 5.82
64 68 6.79 6.69 6.52 6.40 5.41 5.96
65 69 7.02 6.91 6.70 6.57 5.46 6.10
66 70 7.27 7.14 6.89 6.74 5.51 6.26
67 71 7.54 7.38 7.10 6.91 5.55 6.43
68 72 7.83 7.64 7.31 7.10 5.59 6.60
69 73 8.14 7.91 7.52 7.28 5.62 6.78
70 74 8.48 8.20 7.75 7.47 5.65 6.98
71 75 8.84 8.51 7.98 7.66 5.68 7.19
72 76 9.23 8.84 8.22 7.85 5.70 7.41
73 77 9.65 9.18 8.46 8.04 5.71 7.65
74 78 10.11 9.55 8.70 8.23 5.72 7.89
75 79 10.61 9.93 8.95 8.41 5.73 8.16
</TABLE>
OPTION D - Age Nearest Birthday
<TABLE>
<CAPTION>
Male 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66
Female 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
50 54 $4.51
51 55 4.54 $4.58
52 56 4.58 4.62 $4.67
53 57 4.62 4.67 4.71 $4.75
54 58 4.66 4.71 4.75 4.80 $4.85
55 59 4.70 4.75 4.80 4.84 4.89 $4.94
56 60 4.75 4.79 4.84 4.89 4.94 4.99 $5.04
57 61 4.79 4.84 4.89 4.94 4.99 5.04 5.10 $5.15
58 62 4.83 4.88 4.93 4.98 5.04 5.09 5.15 5.21 $5.27
59 63 4.87 4.92 4.98 5.03 5.09 5.15 5.20 5.26 5.32 $5.39
60 64 4.91 4.97 5.02 5.08 5.14 5.20 5.26 5.32 5.38 5.45 $5.51
61 65 4.96 5.01 5.07 5.13 5.19 5.25 5.31 5.38 5.44 5.51 5.58 $5.64
62 66 5.00 5.06 5.12 5.18 5.24 5.30 5.37 5.43 5.50 5.57 5.64 5.71 $5.78
63 67 5.04 5.10 5.16 5.22 5.29 5.35 5.42 5.49 5.56 5.63 5.71 5.78 5.85 $5.93
64 68 5.08 5.14 5.21 5.27 5.34 5.41 5.48 5.55 5.62 5.70 5.77 5.85 5.92 6.00 $6.08
65 69 5.12 5.19 5.25 5.32 5.39 5.46 5.53 5.60 5.68 5.76 5.84 5.91 6.00 6.08 6.16 $6.24
66 70 5.17 5.23 5.30 5.36 5.44 5.51 5.58 5.66 5.74 5.82 5.90 5.98 6.07 6.15 6.24 6.32 $6.41
67 71 5.21 5.27 5.34 5.41 5.48 5.56 5.64 5.71 5.80 5.88 5.96 6.05 6.14 6.22 6.31 6.40 6.49
68 72 5.25 5.31 5.38 5.46 5.53 5.61 5.69 5.77 5.85 5.94 6.02 6.11 6.20 6.30 6.39 6.48 6.57
69 73 5.28 5.35 5.43 5.50 5.58 5.65 5.74 5.82 5.91 6.00 6.09 6.18 6.27 6.37 6.46 6.56 6.66
70 74 5.32 5.39 5.47 5.54 5.62 5.70 5.79 5.87 5.96 6.05 6.14 6.24 6.34 6.44 6.54 6.64 6.74
</TABLE>
The purchase rate for any age or combination of ages not shown in the above
tables will be calculated on the same basis as the payments for those shown
and may be obtained from our Annuity Service Center. In addition to the
options set forth above, any mode of payment mutually agreed upon in writing
by the payee and us, not in conflict with any provision in this contract,
may be selected. Purchase rates for other available joint options may be
obtained from our Annuity Service Center.
Page 9 P81-106A
32
<PAGE>
Exhibit 4(b)
Form of Individual Immediate Variable Annuity Contract
Massachusetts Mutual Life Insurance Company
Springfield, Massachusetts
<TABLE>
<CAPTION>
ANNUITANT AGE AND SEX
CONTRACT NUMBER SINGLE PURCHASE PAYMENT
DATE OF ISSUE FIRST PAYMENT DATE
<S> <C> <C>
If the Annuitant is living on the First Annuity Payment
Date, Massachusetts Mutual Life Insurance Company will pay a
variable life annuity. The annuity will consist of a series
of variable payments to be paid to the Annuitant. Payments
will begin on the First Annuity Payment Date and continue as
long as the Annuitant lives. In no case will payments be
made for less than the Guaranteed Period. Payments will be
subject to all provisions of this contract.
The annual rate of return earned on the assets of the
Separate Account must be equal to or exceed 4.23% for the
variable payments not to decrease.
This Contract is issued by the Company at its Home Office,
1295 State Street, Springfield, Massachusetts, 01111-0001,
on the date of issue. It is a legal contract between the
contract owner and the insurer.
</TABLE>
READ YOUR POLICY CAREFULLY
SECRETARY PRESIDENT
REGISTRAR
33
<PAGE>
SUMMARY OF REQUIRED PROVISIONS
AND OTHER CONTRACT OWNER RIGHTS
The owner of this contract has exclusive rights to assign this contract and
receive every benefit provided. The owner also has exclusive rights to exercise
every right, privilege and option this contract grants or that we allow. The
owner has these rights while the annuitant is alive, unless otherwise provided
in this contract. For example the owner may:
. Change the owner or beneficiary. (Change of Owner and Beneficiary, page 5.)
. Instruct the Company how to vote at meetings of the Fund shareholders. (Voting
Rights page 8.)
To exercise any of these rights, communicate with the Company's nearest
representative or directly with the Annuity Service Center. Please notify the
Annuity Service Center promptly of any change of address of the Owner
or the Annuitant.
34
<PAGE>
PANORAMA SINGLE PURCHASE PAYMENT IMMEDIATE VARIABLE ANNUITY CONTRACT
Variable Life Annuity with Guaranteed Period, if any, as Stated on Page 3
Participating
ANNUITY PAYMENTS PROVIDED BY THIS CONTRACT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT
P81-107A
35
<PAGE>
Page 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
DEFINITIONS PAGE 5
SEPARATE ACCOUNT PAGE 5
OWNER AND BENEFICIARY PAGE 5
Owner, Beneficiary, Change of Owner or Beneficiary
PURCHASE PAYMENT PAGE 5
DIVIDENDS PAGE 5
ANNUITY UNITS AND VALUATION PROVISIONS PAGE 5-6
Net Purchase Payment, Application of Net Purchase Payment,
Annuity Units and Payments, Net Investment Factor
GENERAL PROVISIONS PAGE 6
Incontestability, Age and Sex, Assignment or Transfers of the
Contract, The Contract, Payment of Benefits, Voting Rights,
Guarantees, Insulation
</TABLE>
P81-107A
36
<PAGE>
SPECIFICATIONS
ANNUITANT AGE AND SEX
CONTRACT NUMBER SINGLE PURCHASE PAYMENT
DATE OF ISSUE FIRST PAYMENT DATE
OWNER
BENEFICIARY
BENEFITS AND PURCHASE PAYMENTS
------------------------------
ANNUAL PURCHASE PAYMENT:
PAYABLE TO MATURITY DATE OR UNTIL PRIOR DEATH OF THE ANNUITANT.
ENDORSEMENT RESTRICTING TRANSFERABILITY
---------------------------------------
ANYTHING IN THIS CONTRACT TO THE CONTRARY NOTWITHSTANDING, IF THE CONTRACT OWNER
IS OTHER THAN THE TRUSTEE OF A TRUST ESTABLISHED UNDER SECTION 401 OF THE
INTERNAL REVENUE CODE OF 1954, AS AMENDED, IT MAY NOT BE SOLD, ASSIGNED,
DISCOUNTED, OR PLEDGED AS COLLATERAL FOR A LOAN OR AS SECURITY FOR THE
PERFORMANCE OF AN OBLIGATION OR FOR ANY OTHER PURPOSE, TO ANY PERSON OTHER THAN
THIS COMPANY.
CONTRACT YEARS, MONTHS AND ANNIVERSARIES ARE COMPUTED FROM THE CONTRACT DATE.
PAGE 3
37
<PAGE>
DEFINITIONS
YOU, YOUR-Use of the words "you" or "your" in this contract refers to
the owner.
WE, OUR, US-Use of the words "we", "our", or "us" in this contract refers to
Massachusetts Mutual Life Insurance Company and our Annuity Service Center.
VALUATION DATE-means any date the New York Stock Exchange is open for business
and the Separate Account is valued.
VALUATION PERIOD-means the period beginning on the day following any Valuation
Date and ending on the next Valuation Date. It may be one day or more than one
day.
ANNUITY UNIT-means a unit used to determine the amount of each life annuity
payment. CONTRACT YEAR-means the period from one contract anniversary to the
next.
DUE PROOF OF DEATH-means one of the following:
(a) A copy of a certified Death Certificate.
(b) A copy of a certified decree of a court of competent jurisdiction as to
the finding of death.
(c) A written statement by a medical doctor who attended the deceased.
(d) Any other proof satisfactory to us.
FUND-means the investment company or companies in which the Separate Account
assets are invested.
WRITTEN REQUEST-means a request in writing in a form satisfactory to us and
mailed or delivered to our Annuity Service Center.
ANNUITY SERVICE CENTER-The office to which notices and requests should be sent.
You will be notified in writing if the address. You will be notified in writing
of the address.
SEPARATE ACCOUNT
Under this contract, Separate Account means a segregated investment account or
accounts established by the company under Connecticut Law. There will be
several sub-accounts within the Separate Account covered by this contract.
Assets of each sub-account will be invested in Fund shares. We reserve the
right to change investment companies or to substitute other investments for
Fund shares. The single purchase payment may be placed in any one sub-account
or distributed among various sub-accounts. You may, by written request, choose
any allocation you wish.
OWNER AND BENEFICIARY
Owner
The owner or owners named under this contract may die. If so, the owner will be
the executor or administrator of the last owner to die. This assumes this
contract does not provide otherwise.
Beneficiary
The beneficiary or beneficiaries named under this contract may die before the
annuitant. If so, the beneficiary will be the executor or administrator of the
annuitant. This assumes this contract does not provide otherwise.
Change of Owner or Beneficiary
While the annuitant is alive, you can change the owner or beneficiary by written
request.
. The change will take effect on the date you sign the request. The annuitant
does not have to be living when we receive the request at our Annuity Service
Center for the change to be effective. The change will be subject to any
payment made or actions taken by us before receiving the request.
PURCHASE PAYMENT
This contract is made in consideration of the application and the payment of
the single purchase payment.
. The single purchase payment is due on the date of issue of this contract.
DIVIDENDS
While this contract is in force, we will credit it with dividends. Dividends are
based on such shares of the divisible surplus (if any) as we may apportion at
the end of each contract year.
. We expect that any contribution to divisible surplus by this
Page 5
38
<PAGE>
contract (thus making it eligible for dividend credit) will arise in later
contract years.
. Any dividends will be of modest amount.
. We will pay dividends in cash to you.
ANNUITY UNITS AND VALUATION PROVISIONS
Net Purchase Payment
The net purchase payment will equal a percentage of the balance of the single
purchase payment after deducting a $70 policy fee and any applicable premium
taxes.
Balance of Single
Purchase of Payment Percentage
First $10,000 97%
Next $90,000 98%
Excess over $100,000 99%
Application of the Net Purchase Payment
. We will apply each net purchase payment received at our Annuity Service
Center to provide annuity units in one or more sub-accounts. This will be
done in accordance with a written request from you.
Annuity Units and Payments
The dollar amount of annuity payments and the number of annuity units are
determined as follows:
. A purchase rate is used based on the Progressive Annuity Table and an
interest rate of 3 1/2% per year.
. Calculate the number of annuity units in each sub-account. Do this by
dividing the product of the net purchase payment applied to a sub-account
and the purchase rate by the value of one annuity unit in that sub-account
on the issue date. This number of annuity units remains fixed for the life
of the contract.
. The amount of each annuity payment equals the product of the appropriate
number of annuity units and the annuity unit values on the payment date. The
amount of each payment may vary.
The purchase rates are calculated assuming births in the year 1900. The
annuitants age is adjusted depending on his/her year of birth, as shown in the
following chart.
Year of Birth Adjusted Age
Before 1900 Actual Age + 1
1900-1919 Actual Age
1920-1939 Actual Age - 1
1940-1959 Actual Age - 2
1960-1979 Actual Age - 3
. Adjustments for years of birth after 1979 will be made in a manner
consistent with the above.
Annuity Unit Value
. The value of an annuity unit in each sub-account on any valuation date is
determined as follows:
1) Multiply the net investment factor for the valuation period just ended by
the value of the annuity unit on the preceding valuation date.
2) Divide the result in (1) by an interest factor. The interest factor
equals 1.00 plus the interest rate for the number of days since the
preceding valuation date. Interest is based on an effective annual rate
of 3 1/2%.
. The dollar value of an annuity unit may change from one valuation date to
the next.
. The value of an annuity unit on any date other than a valuation date is
equal to its value on the succeeding valuation date.
Net Investment Factor
A net investment factor has to be calculated for each sub-account. We compute
the net investment factor for a sub-account as follows:
1) We determine the net asset value per share at the end of the valuation
period for the fund in which the sub-account assets are invested.
2) We add to (1) the amount per fund share of any dividend or capital gain
distribution made by the fund if the ex-dividend date occurs during the
valuation period.
P81-107A
39
<PAGE>
Page 6
3) We subtract from (2) the reserve per fund share for taxes on realized and
unrealized capital gains of the sub-account. We will add a credit to item
(2) for capital losses (realized and unrealized).
4) We divide the result in (3) by the net asset value per fund share at the
beginning of the valuation period less the reserve for taxes per fund share
at that time.
5) We subtract from (4) an amount not to exceed .000020 for each day of the
valuation period.
Transfer of Annuity Units
You may transfer all or a portion of the annuity units among one or more sub-
accounts. The amount transferred will be calculated as described below:
a) We will determine, from the first sub-account, the dollar value of the next
annuity payment on its due date.
b) We will multiply the value in (a) by the percentage of the annuity units to
be transferred.
c) We will then credit you with the number of annuity units in the sub-account
to which the transfer is being made which will give an equal dollar value
for the next annuity payment.
The equivalent number of annuity units equal to the dollar value of the next
annuity payment will be cancelled from the original sub-account. Subsequent
payments will reflect the changes in annuity units in each sub-account. Only one
such transfer may be made each calendar year.
GENERAL PROVISIONS
Incontestability
We cannot contest this contract after it has been in force during the lifetime
of the annuitant for a period of two years from the date of issue.
Age and Sex
If the annuitant's age or sex has been misstated, we will adjust the amount
payable under this contract. It will be the amount the purchase payment would
have purchased using the correct age and sex. The adjustment will be based on
the rates for this contract in effect on the date of issue.
. Any overpayments we make on account of misstatement of age or sex will be
charged against the current or next succeeding payments to be made by us.
. Any underpayments we make on account of misstatement of age or sex will be
paid to whomever is entitled.
Assignment or Transfer of the Contract
. Written notice of the terms of a transfer or a copy of an assignment must be
filed at our Annuity Service Center. Until we receive such notice, we will not
be required to take notice of or be responsible for any transfer of interest
in this contract by an assignment, agreement or otherwise.
We will not be responsible for the validity of any assignments.
. Any assignment made after the annuitant's death will be valid only with our
consent.
The Contract
This contract and the application constitute the entire contract. A copy of the
application is attached to and made a part of this contract.
. All statements in the application will be deemed representations and not
warranties.
. No statement will be used to void this contract or to defend against a claim
under it unless contained in the application.
. Our agents cannot alter or modify any of the terms of this contract. They
cannot waive any of its provisions.
Payment of Benefits
. All sums payable by us under this contract are payable only at our Annuity
Service Center.
. If any variable payment is less than $20.00, we may change the payment basis
to equivalent quarterly, semi-annual or annual payments.
. In any settlement, we may require that this contract be returned to our
Annuity Service Center.
Voting Rights
To the extent required to permit this contract to qualify under the Investment
Company Act of 1940 of the United States (and any subsequent amendments), you
have the right to instruct us how to vote the Fund shares underlying annuity
units you have in any sub-account.
Guarantees
Annuity payments under this contract will not be adversely affected by actual
mortality and expense experience of the Separate Account.
Insulation
40
<PAGE>
The portion of the assets of the Separate Account equal to the reserve and other
liabilities of the Separate Account will not be charged with liabilities arising
out of any other business we may conduct.
Death of the Annuitant
. The annuitant may die before payments have been made for the Guaranteed
Period. If so, we will continue payments to the beneficiary for the balance of
such Guaranteed Period. Payments will be continued upon receipt of due proof
of the annuitant's death.
. The annuitant and all beneficiaries may die before payments have been made for
the Guaranteed Period. If so, we will pay the commuted value of the current
dollar amount of the remaining payments certain to the executors or
administrators of the last to die of the annuitant and all beneficiaries.
Payment will be made at the time due proof of such death is received at our
Annuity Service Center. The commuted value will be calculated at 3 1/2%
interest compounded annually.
P81-107A
41
<PAGE>
Exhibit 5
Form of Application used with Individual Variable Annuity Contracts
42
<PAGE>
Connecticut Mutual Life Insurance Company
Panorama Variable Annuity Application
<TABLE>
<CAPTION>
[_] Deferred Annuity
[_] Immediate Annuity (Part 9 must be completed) Contract Number
-------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Annuitant Information
- ------------------------------------------------------------------------------------------------------------------------------------
a. Name (First, MI, Last) b. Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
c. Address (No., Street, City, State. Zip) d. Birth Date (Mo/Day/Yr)
- ------------------------------------------------------------------------------------------------------------------------------------
e. Sex f. Occupation g. Telephone Number
( )
- ------------------------------------------------------------------------------------------------------------------------------------
2. Contract Owner Information - (If other than proposed annuitant) NOTE: Joint Ownership not allowed.
- ------------------------------------------------------------------------------------------------------------------------------------
a. Trustee or Plan Sponsor Name/Custodial Registration b. Tax I.D. Soc. Sec. Number
- ------------------------------------------------------------------------------------------------------------------------------------
c. Address (No., Street, City, State, Zip) d. Telephone Number
( )
- ------------------------------------------------------------------------------------------------------------------------------------
e. Exact Qualified Plan Name f. Plan Year (Mo/Day/Yr)
- ------------------------------------------------------------------------------------------------------------------------------------
3. Beneficiary Information
- ------------------------------------------------------------------------------------------------------------------------------------
a. Primary (Full Name) b. Relationship c. Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
d. Address (No., Street, City, State, Zip)
- ------------------------------------------------------------------------------------------------------------------------------------
e. Contingent (Full Name) f. Relationship g. Social Security Number
- ------------------------------------------------------------------------------------------------------------------------------------
h. Address (No., Street, City, State. Zip)
- ------------------------------------------------------------------------------------------------------------------------------------
4. Plan Information 6. Contract Maturity Date (Mo/day/Yr)
-------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
a. Qualified 7. Contract Information
[_] Tax Sheltered Annuity - Section 403(b) Billing Information --------------------------------------------------------------
a. Initial premium payment $_______(if attached)
---------------------------------------------------------- b. Subsequent premium amounts:
Franchise Name $________________ Number of installments: _____________
$________________ Monthly (skip months_________________)
---------------------------------------------------------- $________________ Quarterly
Address $________________ Semi-Annually
[_] Flexible (no billing)
---------------------------------------------------------- [_] Monthly Check Service (submit F584 authorization)
City, State, Zip c. [_] Automatic Investment Plan (submit F8155 authorization)
d. Will this contract replace or change any existing life
[_] Individual Retirement Annuity insurance or annuity?
Tax year in which initial premium payment will be [_] Yes [_] No If yes, please submit required documents.
deducted (if applicable) --------------------------------------------------------------
8. Sub-account Allocation Instructions
_________ Rollover _______ Qualified Pension Plan --------------------------------------------------------------
_________ Transfer _______ Existing IRA
[_] Simplified Employee Pension (SEP/IRA) a. Initial premium payment
[_] Keogh Money Market ______________% Income ______________%
[_] Corporate, Plan Type: ________________ Total Return ______________% Growth ______________%
[_] Deferred Compensation Plan Section 457 b. Subsequent premium amounts (if different than above)
[_] Other: _______________________________ Money Market ______________% Income ______________%
b. Non-Qualified Total Return ______________% Growth ______________%
Individual Plan
c. Franchise number (if applicable)_____________
- ---------------------------------------------------------------------
5. Is Waiver of Premium desired?
- ---------------------------------------------------------------------
[_] Yes [_] No NOTE: Please do not use fractional percentages. Written
authorization is required to change a premium
allocation schedule.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F32a-88
<PAGE>
<TABLE>
<S> <C>
9. Complete the following if an Immediate Annuity has been elected:
- ------------------------------------------------------------------------------------------------------------------------------------
a. [_] Option A-Life Annuity b. [_] Do not withhold any federal income tax from my payments.
[_] Option B -Life Annuity with Period Certain [_] Do not withhold federal income tax from my payments.
(months: __ 6O 100 _ 120_ 240) NOTE: Proof of age must be submitted with application.
[_] Option C -Unit Refund Life Annuity
[_] Option D-Joint and Two-Thirds Survivor Annuity
Second Annuitant:
----------------------------------------
Relationship:
----------------------------------------
Date of Birth:
----------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
10. Miscellaneous Instructions/Comments
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
11. For Home Office Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
Minor corrections (no change will be made in the amount of annuity, amount of premium, classification, age at issue, or benefits
unless agreed to in writing.)
- ------------------------------------------------------------------------------------------------------------------------------------
12. Applicant/Owner (Trustee) Signature
- ------------------------------------------------------------------------------------------------------------------------------------
I hereby represent my answers to the above questions to be correct and true to the best of my knowledge and belief and agree that
this application shall be a part of any contract issued by the Company. ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN
BASED ON INVESTMENT EXPERIENCE OF A VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. I acknowledge
receipt of a current Panorama Separate Account Prospectus and Connecticut Mutual Financial Services Series Fund I Prospectus.
Under penalties of perjury, I, the owner, certify that the taxpayer identification number given on this application is correct.
I also certify that: (Check one)
a. [_] The IRS has not notified me that I am currently subject to b. [_] I am exempt from backup withholding, or
backup withholding, or c. [_] I am currently subject to backup withholding.
Signed at: On:
--------------------- -------------------- --------------
City State Date
Signatures:
--------------------------------------------------- -----------------------------------------------------------
Annuitant's Signature Signature of applicant, if other than annuitant
- ------------------------------------------------------------------------------------------------------------------------------------
13. Agent Replacement Information
- ------------------------------------------------------------------------------------------------------------------------------------
Will this contract replace any existing life insurance or annuity [_] Yes [_] No
If yes. I have complied with all state replacement requirements. Required replacement forms and information must be submitted to the
Company.
This replacement is meant to be a tax-free exchange under Section 1035: [_] Yes [_] No
WITNESS CML 5 Digit Commission
Signature of Licensed Agent(s) Printed Name of Agent Agent Code % Split
(I)
--------------------------------------- -------------------------------- -------------- ------------------
(2)
--------------------------------------- -------------------------------- -------------- ------------------
(3)
--------------------------------------- -------------------------------- -------------- ------------------
----------------------------------------- ----------------------------------- --------------------------------------
GA Name Agency Address City State Zip
( )
- ------------------- -------------------------------
Agency Number Agency Telephone Number
[LOGO OF CONNECTICUT MUTUAL APPEARS HERE]
The Blue Chip Company (R)
Connecticut Mutual
Life Insurance Company
140 Garden Street
Hanford, CT 06154
(800) 234-5606
F32a-88
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 9 Opinion of and Consent of Counsel
April, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Re: Post-Effective Amendment No. 3 to Registration Statement
No. 333-01363 (formerly 2-73050) filed on Form N-4
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 3 to Registration Statement No. 333-01363 (formerly 2-73050) on
Form N-4 under the Securities Act of 1933 for Massachusetts Mutual Life
Insurance Company's ("MassMutual") flexible premium variable annuity contract
(the "Contract"). Panorama Separate Account issues the Contract.
As Attorney for MassMutual, I provide legal advice to MassMutual in connection
with the operation of its variable products. In such role I am familiar with the
Post-Effective Amendment for the Contract. In so acting, I have made such
examination of the law and examined such records and documents as in my judgment
are necessary or appropriate to enable me to render the opinion expressed below.
I am of the following opinion:
1. MassMutual is a valid and subsisting corporation, organized and operated
under the laws of the Commonwealth of Massachusetts and is subject to regulation
by the Massachusetts Commissioner of Insurance.
2. Panorama Separate Account is a separate account validly maintained by
MassMutual in accordance with Massachusetts law.
3. All of the prescribed corporate procedures for the issuance of the Contract
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this Post-Effective
Amendment.
Very truly yours,
/s/ James M. Rodolakis
James M. Rodolakis
Counsel
43
<PAGE>
Exhibit 10(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Massachusetts Mutual Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 3 to the
Registration Statement of Panorama Separate Account on Form N-4 (Registration
No. 333-01363), of our report dated March 11, 1998 on our audits of Panorama
Separate Account, and of our report dated February 6, 1998 on our audits of the
statutory financial statements of Massachusetts Mutual Life Insurance Company,
which includes explanatory paragraphs relating to the use of statutory
accounting practices, which differ from generally accepted accounting
principles. We also consent to the reference to our Firm under the caption
"Independent Accountants."
COOPERS & LYBRAND, L.L.P.
Springfield, Massachusetts
April 24, 1998
44
<PAGE>
Exhibit 10(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
(and to all references to our Firm) included in or made a part of this
registration statement for Panorama Separate Account of Massachusetts Mutual
Life Insurance Company.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
April 24, 1998
45
<PAGE>
Exhibit 10(c)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Policyholders of Connecticut Mutual Life Insurance Company
We have audited the accompanying statutory statement of income, changes in
policyholders' contingency reserves and cash flows of Connecticut Mutual Life
Insurance Company (the Company) for the year ended December 31, 1995 (not
presented separately herein). These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 our audit provides a reasonable basis for our opinion.
In our originally issued report dated February 15, 1996, we expressed an opinion
that the 1995 financial statements, prepared using accounting practices
prescribed or permitted by the Insurance Department of the State of Connecticut,
presented fairly, in all material respects, the financial position of the
Company as of December 31, 1995, and the results of its operations and its cash
flows for the year ended December 31, 1995 in conformity with generally accepted
accounting principles. Pursuant to the provisions of Statement of Financial
Accounting Standards No. 120 (SFAS No. 120), Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Contracts, financial statements of mutual life insurance
enterprises for periods ending on or before December 15, 1996, prepared using
accounting practices prescribed or permitted by insurance regulators (statutory
financial statements) are no longer considered presentations in conformity with
generally accepted accounting principles when presented for comparative purposes
with the enterprise's financial statements for periods subsequent to the
effective date SFAS No. 120. Accordingly, our present opinion on the
presentation of the 1995 financial statements in accordance with generally
accepted accounting principles, as present herein, is different from that
expressed in our previous report.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the results of
operations and cash flows of Connecticut Mutual Insurance Company for the year
ended December 31, 1995.
In our opinion, the financial statements referred to above do present fairly, in
all material respects, the results of operations and cash flows of Connecticut
Mutual Life Insurance Company for the year ended December 31, 1995 in conformity
with accounting practices prescribed or permitted by the Insurance Department of
the State of Connecticut.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 15, 1996
46
