<PAGE> 1
'33 ACT FILE NO. 33-61370
'40 ACT FILE NO. 811-3365
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 16 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 107 [X]
SECURITY FIRST LIFE SEPARATE ACCOUNT A
(EXACT NAME OF REGISTRANT)
SECURITY FIRST LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
11365 WEST OLYMPIC BOULEVARD, LOS ANGELES, CALIFORNIA 90064
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 312-6100
RICHARD C. PEARSON
PRESIDENT AND GENERAL COUNSEL
SECURITY FIRST LIFE INSURANCE COMPANY
11365 WEST OLYMPIC BOULEVARD, LOS ANGELES, CALIFORNIA 90064
(NAME AND ADDRESS OF AGENT FOR SERVICE)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE SPACE)
[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (b) OF RULE 485
[ ] ON [DATE] PURSUANT TO PARAGRAPH (b) OF RULE 485
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (a) OF RULE 485
[X] ON MAY 1, 1999 PURSUANT TO PARAGRAPH (a) OF RULE 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
THE COMPANY HAS ELECTED PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT
OF 1940 TO REGISTER AN INDEFINITE NUMBER OF SECURITIES. THE MOST RECENT RULE
24F-2 NOTICE WAS FILED ON __________, 1999.
<PAGE> 2
SECURITY FIRST LIFE SEPARATE ACCOUNT A
CROSS REFERENCE SHEET
PART A - PROSPECTUS
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption in Prospectus
- ----------------------- ---------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Definitions Definitions
3. Synopsis or Highlights Synopsis of the Contracts
4. Condensed Financial Information Condensed Financial Information;
Financial Information
5. General Description of Registrant, Description of Security First Life
Depositor, and Portfolio Companies Insurance Company, The Separate Account
and The Funds; Voting Rights; Servicing
Agent
6. Deductions and Expenses Contract Charges
7. General Description of Variable Description of the Contracts
Annuity Contracts
8. Annuity Period Annuity Period
9. Death Benefit Death Benefits
10. Purchases and Contract Value Description of the Contracts;
Accumulation Period; Principal
Underwriter
11. Redemptions Accumulation Period
12. Taxes Federal Income Tax Status
13. Legal Proceedings Legal Proceedings
14. Table of Contents of the Statement of Table of Contents of the Statement of
Additional Information Additional Information
</TABLE>
<PAGE> 3
PART B - STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C> <C>
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History The Insurance Company; The Separate
Account; The Funds
18. Services Servicing Agent; Safekeeping of
Securities; Independent Auditors
19. Purchase of Securities Being Offered Purchase of Securities Being Offered
20. Underwriters Distribution of the Contracts
21. Calculation of Yield Quotations of Not Applicable
Money Market Subaccounts
22. Annuity Payments Annuity Payments
23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this registration statement.
<PAGE> 4
May 1, 1999
GROUP FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
issued through
SECURITY FIRST LIFE SEPARATE ACCOUNT A
by
SECURITY FIRST LIFE INSURANCE COMPANY
----------------------------------------------------------------------
This Prospectus gives you important information about the group flexible payment
fixed and variable annuity contracts issued through Security First Life Separate
Account A by Security First Life Insurance Company (the "Contracts"). The
Contracts were previously issued by the Capitol Life Insurance Company and
assumed by Security First Life Insurance Company. Please read this Prospectus
carefully before you invest and keep it for future reference. The Contracts
provide annuity benefits through distributions made from certain retirement
plans that qualify for special Federal income tax treatment ("qualified plans").
You decide how to allocate your money among the available investment choices.
You may choose to allocate your payments to the General Account, which is a
fixed account (not described in this Prospectus) that offers an interest rate
guaranteed by Security First Life Insurance Company ("Security First Life"), or
to Separate Account A (the "Separate Account"). The Separate Account, in turn,
invests in the following underlying mutual funds:
<PAGE> 5
Security First Trust
Bond Series
T. Rowe Price Growth & Income Series
T. Rowe Price Growth Stock Fund
T. Rowe Price Prime Reserve Fund, Inc.
Variable Insurance Products Fund
Money Market Portfolio
You can choose any combination of these investment choices if the Contract is
issued to certain state and local governments pursuant to Section 457 of the
Internal Revenue Code (the Code). If you are participating in a plan qualifying
under Section 403(b) of the Code or an IRA under Section 408, you may only
invest in the Bond Series, the T. Rowe Price Growth & Income Series or the Money
Market Portfolio. Your Account Value will vary daily to reflect the investment
experience of the funding options selected. These mutual funds are described in
detail in the fund prospectuses that are attached to or delivered with this
Prospectus. Please read these prospectuses carefully before you invest. This
Prospectus is not valid unless accompanied by these mutual fund prospectuses.
For more information:
If you would like more information about the Security First Life or the
Contracts, you can obtain a copy of the Statement of Additional Information
(SAI) dated May 1, 1999. The SAI is legally considered a part of this Prospectus
as though it were included in the Prospectus. The Table of Contents of the SAI
appears on page ____ of the Prospectus. To request a free copy of the SAI or to
ask questions, write or call:
Security First Life Insurance Company
P.O. Box 92193
Los Angeles, California 90009
Phone: (800) 284-4536
The Securities and Exchange Commission ("SEC") has a website
(http://www.sec.gov) which you may visit to view this Prospectus, the SAI, or
additional material that also is legally considered a part of this Prospectus,
as well as other information.
The SEC has not approved or disapproved these securities nor determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
2
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Glossary
Summary of the Contracts
Fee Tables and Examples
Condensed Financial Information
Financial and Performance Information
Description of Security First Life Insurance Company, The General Account
The Separate Account, The Funds and Service Providers
The Insurance Company
The General Account
The Separate Account
The Funds
Principal Underwriter
Servicing Agent
Custodian
Contract Charges
Annual Policy Fee
Premium Taxes
Surrender Charge
Administration Fees
Mortality and Expense Risk Charge
Federal, State and Local Taxes
Free Look Period
Description of the Contracts
Assignment
Purchase Payments
Transfers
Dollar Cost Averaging
Reallocation Election
Modification of the Contracts
Accumulation Period
Crediting Accumulation Units in the Separate Account
Surrender from the Separate Account
Account Statements
Annuity Benefits
Variable Annuity Payments
Election of Annuity Date and Form of Annuity
Frequency of Payment
Level Payments Varying Annually
Annuity Unit Values
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
Death Benefits
Death Before the Annuity Date
Death After the Annuity Date
Federal Tax Considerations
General Taxation of Annuities
Non-qualified Contracts
Qualified Contracts
Withholding
Voting Rights
Year 2000 Issue
Legal Proceedings
Additional Information
Table of Contents of Statement of Additional Information
</TABLE>
Security First Life does not intend to offer the Contracts anywhere or to anyone
to whom they may not lawfully be offered or sold. Security First Life has not
authorized any information or representations about the Contracts other than the
information in this Prospectus, the attached prospectuses, or supplements to the
prospectuses or any supplemental sales material Security First Life
authorizes.
4
<PAGE> 8
GLOSSARY
These terms have the following meanings when used in this Prospectus:
ACCUMULATION UNIT - A measuring unit used to determine the value of your
interest in a Separate Account Series under a Contract at any time before
Annuity payments commence.
ANNUITANT - The person on whose life Annuity payments under a Contract are
based.
ANNUITY - A series of income payments made to an Annuitant for a defined period
of time.
ANNUITIZATION or ANNUITY DATE - The date on which Annuity payments begin.
ANNUITY UNIT - A measuring unit used to determine the amount of Variable Annuity
payments based on a Separate Account Series under a Contract after such payments
have commenced.
ASSUMED INVESTMENT RETURN - The investment rate selected by the Annuitant for
use in determining the Variable Annuity payments.
BENEFICIARY - The person who has the right to a Death Benefit upon your death.
BUSINESS DAY - Each Monday through Friday except for days the New York Stock
Exchange is not open for trading.
CERTIFICATE - The form you are given which describes your rights under the
Contract. No Certificates are issued for certain deferred compensation or
qualified retirement plans.
CERTIFICATE DATE - The date you are issued a Certificate. If you are not issued
a Certificate, this is the date when your Account is established.
CERTIFICATE YEAR - A 12 month period starting on the Certificate Date and on
each anniversary of the certificate date.
CONTRACT - The agreement between the group contract owner and Security First
Life covering your rights.
FIXED ANNUITY - An Annuity providing guaranteed level payments. These payments
are not based upon the investment experience of the Separate Account.
5
<PAGE> 9
FREE LOOK PERIOD - The 20-day period after the Contract is first received by the
Owner. During this time period, the Contract may be canceled for a full refund
of all Purchase Payments (or the greater of Purchase Payments or the value of
the Participant's Account).
FREE WITHDRAWAL AMOUNT - The amount that can be withdrawn in a Contract Year
without incurring a surrender charge.
FUND - A diversified, open-end management investment company, or series thereof,
registered under the Investment Company Act of 1940 ("1940 Act") which serves as
the underlying investment medium for a Series in the Separate Account.
GENERAL ACCOUNT - All assets of Security First Life other than those in the
Separate Account or any of its other segregated asset accounts.
NORMAL ANNUITY DATE- The first day of the month coincident with or immediately
preceding the date on which a distribution must begin under the terms of the
Plan to which the Contract is issued, but in no event later than the later of
the month in which you attain age 75 or the 10th anniversary of the Certificate
Date.
OWNER - The person who has title to the Contract.
PARTICIPANT - You, the person who makes Purchase Payments, or the person for
whom Purchase Payments are made.
PARTICIPANT'S ACCOUNT - The sum of your interest in the Separate Account Series
and your interest in the General Account. Your interest in the Separate Account
Series is the sum of the values of the Accumulation Units. Your interest in the
General Account is the accumulated value of the amounts allocated to the General
Account plus credited interest as guaranteed in the Contract, less any prior
withdrawals and/or amounts applied to Annuity options.
PLAN - The 403(b) plan, deferred compensation plan, qualified retirement plan,
or individual retirement annuity to which the Contract is issued.
PURCHASE PAYMENT - The amounts paid by or for you to Security First Life in
order to provide benefits under the Contract.
SEPARATE ACCOUNT - The segregated asset account entitled "Security First Life
Separate Account A" which has been established by Security First Life under
Delaware law to receive and invest amounts allocated by your and by other
contract owners and to provide Variable Annuity benefits under the Contracts.
The Separate Account is registered as a unit investment trust under the 1940
Act.
6
<PAGE> 10
SERIES - The Accumulation Unit values and Annuity Unit values maintained
separately for the General Account and each Fund whose securities are owned by
the Separate Account.
SURRENDER CHARGE - A percentage charge which is deducted when you transfer funds
from the General to the Separate Account.
TRANSFER PAYMENT - Any amount received by Security First for you which is
transferred from another annuity contract or is not part of the schedule of
payments elected by you.
VALUATION DATE - Any Business Day used by the Separate Account to determine the
value of part or all of its assets for purposes of determining Accumulation and
Annuity Unit values for the Contract. Accumulation Unit values will be
determined each Business Day. There will be one Valuation Date in each calendar
week for Annuity Unit values. Security First Life will establish the Valuation
Date at its discretion, but until notice to the contrary is given, that date
will be the last Business Day in a week.
VALUATION PERIOD - The period of time from one Valuation Date through the next
Valuation Date.
VARIABLE ANNUITY - An Annuity providing payments that will vary annually in
accordance with the net investment experience of the applicable Separate Account
Series.
7
<PAGE> 11
SUMMARY OF THE CONTRACTS
The Contracts
The Contracts may be offered to:
- Qualified Plans such as:
- Section 403(b) tax-sheltered annuities
- Section 457 deferred compensation plans
- Section 401 pension and profit sharing plans
- traditional Individual Retirement Account ("IRAs")
This prospectus applies only to the variable portion of the Contract
[Side Bar: Please see the section "Qualified Contracts" on page ____ for more
information.]
Purchase Payments
Purchase Payments under the Contracts are initially directed to the General
Account. The minimum monthly purchase payment is $20, and there is an annual
minimum of $240. There is no initial sales charge; however, the charges and
deductions described under "Contract Charges" on page ___ will be deducted from
the Participant's Account. These charges include an annual administrative charge
that is $27.50 plus $2.50 for each Series in which you invest. These charges
will range from a minimum of $30 to a maximum of $40. This amount is deducted
from the General and Separate Accounts on a pro rata basis on the Certificate's
anniversary each year until Annuitization. Security First has agreed to waive a
part of the administrative charge for certain Contracts issued to fund deferred
compensations plans for state and local government employees described in
Section 457 of the Internal Revenue Code. As a result, the charge will be $12
for a single Series plus $2.50 for each additional Series and will range from
$12 to $22.
You can immediately transfer amounts allocated to the General Account to the
Separate Account:
- with a valid written election. The minimum amount of any
immediate transfer is $20.00.
8
<PAGE> 12
Later, unless the Contract was issued to certain state and local government
units pursuant to section 457 of the Code, you can transfer up to 48% of the
value of your interest in the Separate Account to the Separate Account in equal
monthly installments of not less than $50 each for a period of at least 48
months from the date of election if they were not previously transferred to the
General Account.
All transfers from the General Account to the Separate Account are subject to a
0% to 7% refundable sales charge depending upon the length of time the amounts
to be transferred remained in the General Account. This charge will be restored,
in whole or in part, as an Annuity Bonus when annuity payments begin under the
Contract.
You can transfer amounts allocated to the Separate Account:
- if you are a Participant of a 457 Plan between any of the mutual
fund investment choices, at any time and as many times as you
choose
- If you are a Participant of a 403(b) or IRA under section 408,
amounts transferred to the Separate Account may be invested only
in three Series: the Bond Series, the T. Rowe Price Growth
and Income Series of Security First Trust, and the Money Market
Portfolio
- to the General Account only to provide fixed annuity benefits.
[Side Bar: Please see "Transfers" on page ____ for more information.]
Separate Account
Purchase Payments allocated to the Separate Account are invested at net asset
value in Accumulation Units in one or more of five Series, each of which invests
in one of the following five Funds:
<TABLE>
<CAPTION>
Funds Advisers/Subadvisers
----------------------------------------------------------------------------------------------
<S> <C>
SECURITY FIRST TRUST Security First Investment Management
Corporation
----------------------------------------------------------------------------------------------
The Bond Series Subadviser: Neuberger & Berman , LLC
----------------------------------------------------------------------------------------------
T. Rowe Price Growth & Income Series Subadviser: T. Rowe Price Associates, Inc.
----------------------------------------------------------------------------------------------
T. ROWE PRICE
----------------------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund Advisor: T. Rowe Price Associates, Inc.
----------------------------------------------------------------------------------------------
T. Rowe Price Prime Reserve Fund, Inc. Advisor: T. Rowe Price Associates, Inc.
----------------------------------------------------------------------------------------------
Variable Insurance Products Fund
Money Market Portfolio Advisor: Fidelity Management & Research
Company
</TABLE>
9
<PAGE> 13
[Side Bar: Please see "The Separate Account" on page ____ and "The Funds" on
page ____ for more information.]
Charges and Deductions
The following fees and expenses apply to your Contract:
<TABLE>
<CAPTION>
Fee or expense Amount of fee
- --------------------------------------------------------------------------------
<S> <C>
Daily deduction
- Mortality and Expense risks .0000244%
(.89% per year)
Withdrawal Charge
- Deducted from each Series $10.
when you make a withdrawal
Refundable sales charge (contingent deferred sales charge)
- Deducted on transfers from General 7% 1st Calendar
Account to Separate Account Year; declining 1%
each Calendar Year
to 0% after the 5th
Calendar year.
</TABLE>
This charge will be restored in whole or in part when annuity payments begin.
Transfer Charge
- Deducted when transfer of Accumulation or Annuity Units
from any one series to another
$10.00 per transfer
<TABLE>
<S> <C>
Premium Taxes
- Payable to a state or government 0% - 2.35%
agency with respect to your Contract. (3.50% in Nevada)
It may be deducted on or after the date
the tax is incurred.
Currently, Security First Life
deducts these taxes upon
annuitization.
</TABLE>
10
<PAGE> 14
[Side Bar: Please see "Charges and Deductions" on page ___ for more
information.]
Variable Annuity Payments
You select the Annuity Date, an Annuity payment option and an assumed investment
return. You may change any of your selections before your Annuity Date. Your
monthly Annuity payments will start on the Annuity Date and will vary from year
to year based on a comparison of the assumed investment returns you selected
with the actual investment experience of the Series in which the Participant's
Account is invested.
If your monthly payments from a particular Series are less than $50, Security
First Life may change the frequency of your payments so that each payment will
be at least $50 from that Series.
Surrender
The Internal Revenue Code limits withdrawals from 403(b) Annuity Contracts to
circumstances only:
- when you attain age 59 1/2,
- separate from service,
- die,
- become disabled (within the meaning of Section 72(m)(7) of the
Code),
- hardship.
Withdrawals for hardship are restricted to the portion of your Account Value
which represents contributions made by you and does not include any investment
results. The limitations on withdrawals apply only to:
- salary reduction contributions made after December 31, 1988;
- income attributable to such contributions;
- income attributable to amounts held as of December 31, 1988.
The limitations on withdrawals do not affect rollovers or exchanges between
retirement plans which receive favorable tax treatment under the Code. Tax
penalties may also apply.
However, subject to these limitations, you may surrender all or part of your
Participant's Account before the Annuity Date. You may not make a partial
withdrawal if:
11
<PAGE> 15
- it would cause your interest in any Series to fall below $200
(unless you are surrendering your entire interest in a Series)
However, if you are withdrawing the entire amount allocated to a Series; these
restrictions do not apply.
You may be assessed a surrender charge. In addition, any earnings surrendered
will be taxed as ordinary income and may be subject to a penalty tax under the
Internal Revenue Code. Certain restrictions apply for qualified Contracts.
[Side Bar: Please see "Surrender Charge" on page ___ and "Federal Tax
Considerations" on page ___ for more information.
Death Benefit
If you die before the Annuity Date, your Beneficiary(ies) will receive a death
benefit that is equal to the Participant's Account at settlement.
Your Beneficiary(ies) may choose to receive this benefit in a lump sum or to
apply it to certain of the available annuity forms contained in this Contract.
[Side Bar: Please see "Death Benefits" on page ____ for more information.]
FEE TABLE AND EXAMPLES
The purpose of these fee tables and examples is to assist you in understanding
the various costs and expenses that you will bear, directly or indirectly, under
your Contract.
Expense Data
The table reflects expenses of the Separate Account as well as expenses of the
underlying Funds that make up the investment options for the Separate Account.
In addition to the expenses listed below, premium taxes may be applicable.*
Please see the attached Fund prospectuses for a more complete description of the
various costs and expenses of the Funds.
* Under State law, premium taxes may be deducted from each Purchase Payment or
upon annuitization. At this time Security First Life deducts the premium tax
only from amounts annuitized.
12
<PAGE> 16
The following information assumes that the entire Participant's Account is in
the Separate Account:
FEE TABLES
Your Expenses
<TABLE>
<CAPTION>
Calendar Years Percentage
<S> <C> <C>
Surrender Charge (Deferred Sales Charge) (as a 1 7%
percentage of amounts accumulated with respect 2 6%
to a purchase payment) 3 5%
4 4%
5 3%
6 and after 0%
</TABLE>
<TABLE>
<S> <C>
Withdrawal Charge $10 for each Series from which withdrawal is made
Transfer Charge (from a Series to another) $10 per transfer
Annual Administration Charge (may be reduced Minimum - $30 Maximum - $40
for certain contracts)
</TABLE>
Separate Account Expenses
(As a percentage of average Participant's Account.
Deducted daily from the Separate Account.)
<TABLE>
<S> <C>
Mortality and Expense Risk Fees .89% per year
Total Separate Account Annual .89% per year
Expenses
</TABLE>
13
<PAGE> 17
Fund Annual Expenses
(As a percentage of average net assets)
(Net of reimbursement)
<TABLE>
<CAPTION>
Security First Variable
Trust T. Rowe T. Rowe Price Insurance Products
Security First Price Growth & Prime Reserve T. Rowe Price Fund Money
Trust Bond Series Income Series Fund, Inc. Growth Stock Fund Market Portfolio
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
(a) Management Fee % % % %
- ----------------------------------------------------------------------------------------------------------------------------------
(b) Other Expenses % % % % %
- ----------------------------------------------------------------------------------------------------------------------------------
(c) Total Annual Expenses % % % % %
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Examples
<TABLE>
<CAPTION>
CONDITIONS TIME PERIODS
<S> <C> <C> <C> <C> <C>
SEPARATE ---------------------------------------------------
ACCOUNT You would pay the following expenses 1 Year 3 Years 5 Years 10 Years
SERIES on a $1,000 investment assuming 5% annual
return on assets: ---------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Bond Series (a) upon surrender at the end of the stated (a)
time period
(b)
(b) if the Contract WAS NOT surrendered
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth SAME (a)
& Income Series
(b)
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth SAME (a)
Stock Fund
(b)
- ----------------------------------------------------------------------------------------------------------------------------
T. Rowe Price Prime SAME (a)
Reserve Fund, Inc.
(b)
- ----------------------------------------------------------------------------------------------------------------------------
Variable Insurance SAME (a)
Products Fund
Money Market (b)
Portfolio
</TABLE>
14
<PAGE> 18
EXPLANATION OF FEE TABLE AND EXAMPLES
1. The purpose of these tables and examples is to assist you in understanding
the various costs and expenses that you will bear directly or indirectly. The
table reflects expenses of the Separate Account as well as the underlying Funds.
For additional information see "Contract Charges," beginning on page ____. The
examples do not illustrate the tax consequences of surrendering a Contract.
2. The examples assume that the initial transfer from the General Account to the
Separate Account occurred during the first Certificate Year and that, therefore,
the maximum sales charge of 7% is applied against the initial $1,000 investment.
The 7% charge, however, should not be considered an expense if the Certificate
is not surrendered since that amount is placed in your fixed account to be
refunded upon annuitization and payable in the form of a fixed annuity. Thus,
for example, if you began an annuity payout at any of the time periods indicated
in the examples, you would receive an additional value (based upon the $1,000
hypothetical investment) of : 1 year $74, 3 years $81, 5 years $89, and 10 years
$114 to be applied to a fixed annuity. In the case of an annuitization, the
examples of expense incurred would be as follows:
<TABLE>
<CAPTION>
Series 1 Year 3 Years 5 Years 10 Years
------ ------ ------- ------- --------
<S> <C> <C> <C> <C>
Bond Series
T. Rowe Price
Growth & Income
T. Rowe Price
Growth Stock Fund
T. Rowe Price
Prime Reserve Fund
Money Market Portfolio
</TABLE>
3. For purposes of the amounts reported in the examples, annual Administrative
Charges are estimated by dividing the total amount of contract fees collected
during the year by the total average net assets.
4. NEITHER THE TABLE NOR THE EXAMPLES ARE REPRESENTATIONS OF FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
15
<PAGE> 19
CONDENSED FINANCIAL INFORMATION
The following table, which sets forth condensed financial information of
the Separate Account, was prepared by The Capitol Life Insurance Company which
issued the Contracts funded in the Separate Account prior to the assumptive
reinsurance of the Contracts and the transfer of the Separate Account to
Security First Life effective February 18, 1992. The financial statements for
the nine years ended December 31, 1997, have been audited by Ernst & Young LLP,
independent auditors. The financial statement for the year ended December 31,
1998 and the financial statements for each of the two years in the period ended
December 31, 1989 have been audited by Deloitte & Touche, independent auditors.
The information should be read in conjunction with the financial statements,
related notes and other financial information in the Statement of Additional
Information.
<TABLE>
<CAPTION>
Twelve Twelve Twelve Twelve Twelve Twelve Twelve
Months Months Months Months Months Months Months
Ended Ended Ended Ended Ended Ended Ended
Separate Account A* Series 12/31/88 12/31/89 12/31/90 12/31/91 7/31/92 7/31/93 12/31/93
-------------------------- --------- --------- --------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
B (formerly L)
Beg. AUV $ ............ 10.60 11.14 12.24 12.65 14.39 14.92 16.21
End. AUV $............. 11.14 12.24 12.65 14.39 14.92 16.21 16.48
End. No. Qualified
AUs (000)............ 631.8 583.2 153.0 131.15 126.7 122.0 116.0
G (formerly V)
Beg. AUV $ ............ 13.09 15.69 19.55 17.24 21.67 23.34 25.16
End. AUV $............. 15.69 19.55 17.24 21.67 23.34 25.16 26.64
End. No. Qualified
AUs (000)............ 1597.8 1501.5 796.2 689.2 684.2 661.70 11.0
T Beg. AUV $ ............ 11.92 12.48 15.60 14.70 19.60 19.41 21.12
End. AUV $............. 12.48 15.60 14.70 19.60 19.41 21.12 23.45
End. No. Qualified
AUs (000)............ 1857.2 1543.9 136.1 116.9 112.8 108.0 106.8
P Beg. AUV $............. 9.04 9.61 10.36 11.08 11.60 11.79 12.00
End. AUV $............. 9.61 10.36 11.08 11.60 11.79 12.00 12.07
End. No. Qualified
AUs (000)............ 1947.9 1825.5 251.7 209.5 188.7 168.8 157.7
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Twelve Twelve Twelve Twelve Twelve
Months Months Months Months Months
Ended Ended Ended Ended Ended
Separate Account A* Series 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------------------------- ----------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
B (formerly L)
Beg. AUV $ ............ 16.48 15.77 18.25 18.60
End. AUV $............. 15.77 18.25 18.60 20.11
End. No. Qualified
AUs (000)............ 105.3 101.8 103.0 100.1
G (formerly V)
Beg. AUV $ ............ 26.64 27.17 35.31 42.57
End. AUV $............. 27.17 35.31 42.57 53.68
End. No. Non-Qualified
AUs (000) ........... -- -- 8.6 26.7
End. No. Qualified
AUs (000)............ 607.2 580.5 562.5 583.5
T Beg. AUV $ ............ 23.45 23.44 30.44 36.72
End. AUV $............. 23.44 30.44 36.72 46.06
End. No. Qualified
AUs (000)............ 108.4 115.2 113.8 118.90
P Beg. AUV $ ............ 12.07 12.40 12.97 13.49
End. AUV $............. 12.40 12.97 13.49 14.05
End. No. Qualified
AUs (000)............ 122.0 113.1 103.0 75.4
Yield ................. 4.01% 4.07%
FM Beg. AUV $ (1/6/94)... 5.00 5.16 5.42 5.66
End. AUV $............. 5.16 5.42 5.66 5.92
End No. Non-Qualified
AUs (000)............ 2.6 2.6
End. No. Qualified
AUs (000)............ 92.3 104.7 81.4 61.2
Yield ................. 4.81% 4.40% 4.36% 4.71%
- ------------------------------------------------------------------------------------
AUV -- Accumulation Unit Value
AUs -- Accumulation Units
* Represents amounts accumulated in Capitol Life Separate Account A prior to February 18, 1992 and,
from that date, in Security First Life Separate Account B.
</TABLE>
16
<PAGE> 20
FINANCIAL INFORMATION
Financial Statements of the Separate Account and Security First Life are
contained in the Statement of Additional Information. Please see the first page
of this Prospectus for information on how to obtain a copy of the Statement.
DESCRIPTION OF SECURITY FIRST LIFE INSURANCE COMPANY, THE GENERAL ACCOUNT, THE
SEPARATE ACCOUNT, THE FUNDS AND SERVICE PROVIDERS
Security First Life Insurance Company
Security First Life is a stock life insurance company founded in 1960 and
organized under the laws of the State of Delaware. Its principal executive
offices are located at 11365 West Olympic Boulevard, Los Angeles, California
90064. Security First Life is authorized to transact the business of life
insurance, including annuities, and is currently licensed to do business in 49
states and the District of Columbia. Security First Life is a wholly-owned
subsidiary of Security First Group, Inc. ("SFG"). SFG in turn is a wholly-owned
subsidiary of Metropolitan Life Insurance Company ("MetLife"), a New York mutual
life insurance company.
MetLife is one of the world's largest financial services companies and the
second largest life insurance company in the United States in terms of total
assets, with approximately $___ billion worth of assets as of December 31, 1998.
As a mutual insurance company, MetLife has no shareholders. However, MetLife
announced in November 1998 its intention to convert to a stock company. The
"demutualization" plan will be subject to approval by the board of directors,
the State of New York Insurance Department and policyholders. As of May 1, 1999,
MetLife does not know the details of the plan or when or if it will take effect.
The General Account
All of the assets of Security First Life, except for those in the Separate
Account and other segregated asset accounts, make up the assets of the General
Account. Amounts are allocated to the General Account when your Certificate is
purchased or you may transfer amounts from the Separate Account at a later date.
Amounts allocated to the General Account are credited with interest at an
interest rate that is guaranteed by Security First Life. Instead of you bearing
the risk of fluctuations in the value of the assets as is the case for amounts
invested in the Separate Account, Security First Life bears the full investment
risk for amounts in the
17
<PAGE> 21
General Account. Security First Life has sole discretion to invest the assets of
the General Account, subject to applicable law. The General Account provisions
of the Contract are not intended to be offered by this Prospectus.
The Separate Account
Security First Life established the Separate Account on May 29, 1980 in
accordance with the Delaware Insurance Code. The purpose of the Separate Account
is to hold the variable assets that underlie the Security First Annuity
Contracts and some other variable annuity contracts that Security First Life
offers. The Separate Account is registered with the SEC as a unit investment
trust under the Investment Company Act of 1940.
The assets of the Separate Account are held in Security First Life's name on
behalf of the Separate Account and legally belong to Security First Life.
Although the Separate Account, and each of the Series that make up the Separate
Account, are considered as part of Security First Life's general business, the
Separate Account's assets are solely for the benefit of those who invest in the
Separate Account and no one else, including Security First Life's creditors. All
the income, gains and losses (realized and unrealized) resulting from these
assets are credited to or charged against the Contracts issued from this
Separate Account without regard to Security First Life's other business. Under
state law and the terms of the Contract, the assets of the Separate Account will
not be responsible for liabilities arising out of Security First Life's other
business. Furthermore, Security First Life is obligated to pay all money it owes
under the Contracts even if that amount exceeds the assets in the Separate
Account. However, while Security First is obligated to make variable annuity
payments under the contracts, the amount of these payments is guaranteed only to
the extent of the level amount calculated at the beginning of each annuity year.
The Separate Account is divided into a number of investment Series of
Accumulation and Annuity Units. Five of these Series are available under the
Contracts as investment choices for 457 Plans. Each Series invests in the shares
of only one of the Funds.
If your Certificate is issued in connection with a 401, 403(b) Plan, or IRA, you
may invest in only three of the Series: the Bond Series, the T. Rowe Price
Growth & Income Series and the Money Market Portfolio.
18
<PAGE> 22
The Funds
Your investment choices are:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
Fund Investment Objective Investment Adviser
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bond Series The Fund seeks to achieve the Security First Investment
highest investment income over the Management Corporation; Neuberger
long-term consistent with the & Berman LLC (subadviser)
preservation of principal through
investment primarily in marketable
debt instruments. A secondary
objective is growth of principal
and income with respect to those
Fund assets that are invested in
common and preferred stocks.
--------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth & Income Series The Fund seeks capital growth and Security First Investment
production of income. Management Corporation; T. Rowe
Conservation of principal is a Price Associates, Inc.
secondary objective. While this (subadviser)
Fund will generally invest in
common stocks and other equities,
it may, depending on economic
conditions, reduce such
investments and substitute fixed
income instruments.
--------------------------------------------------------------------------------------------------------------
T. Rowe Price Growth Stock Fund The Fund seeks long-term growth of T. Rowe Price Associates, Inc.
capital through investments,
primarily in common stocks of
growth companies.
--------------------------------------------------------------------------------------------------------------
T. Rowe Price Prime Reserve Fund The Fund seeks the highest T. Rowe Price Associates, Inc.
possible levels of current income
while preserving capital and
maintaining liquidity by investing
primarily in money market
(short-term debt) instruments.
--------------------------------------------------------------------------------------------------------------
Money Market Portfolio The Fund seeks to obtain as high Fidelity Management & Research
a level of current income as is Company
consistent with preserving capital
and providing liquidity. The
Portfolio will invest only in high
quality U.S. dollar denominated
money market securities of domestic
foreign issuers.
</TABLE>
Each Series buys and sells shares of the corresponding mutual fund. These Funds
invest in stocks, bonds and other investments as indicated above. All dividends
declared by the Funds are earned by the Separate Account and reinvested.
Therefore, no dividends are distributed to you under the Contract. Instead,
dividends generally increase the Accumulation or Annuity Unit Value. You pay no
transaction expenses (i.e., front-end or back-end load sales charges) as a
result of the Separate Account's purchase or sale of these mutual fund shares.
The Bond Series and the T. Rowe Price Growth and Income Series are available
only by purchasing annuities and life insurance policies offered by Security
First Life or by
19
<PAGE> 23
other insurance companies and are never sold directly to the public. The shares
of each Fund are purchased, without sales charge, for the corresponding Series
at the next net asset value per share determined by a Fund after your payment is
received by Security First Life. Fund shares will be redeemed by the Series to
the extent necessary for Security First Life to make annuity or other payments
under the Contracts.
Each of the Funds is an open-end management investment company, or portfolio or
series thereof, registered with the SEC under the Investment Company Act of
1940. Registration does not involve supervision by the SEC of the investment or
investment policies of the Funds. There can be no guarantee that a Fund will
meet its investment objectives.
The Funds are available to other registered separate accounts offering variable
annuity and variable life products in addition to Security First Life's Separate
Account. In the future, a conflict may develop between one or more separate
account invested in the same Fund. The conflict could develop due to change in
the law affecting variable annuity products or from differences in voting
instructions of owners of the different separate accounts. Security First Life
monitors the Series for this type of conflict and will remedy the situation if
such a conflict develops. This may include the withdrawal of amounts invested in
the Funds by you and other Contract Owners.
Substitution of Fund shares
Security First Life may substitute shares of another fund for Fund shares
directly purchased and apply future Purchase Payments under the Contracts to the
purchase of these substituted shares if the shares of a Fund are no longer
available or further investment in such shares is determined to be inappropriate
by Security First Life's management in view of the purposes of the Contracts.
However, no substitution is allowed unless a majority of the Owners entitled to
vote and the SEC approve the substitution under the 1940 Act.
[Side Bar: The Funds are more fully described in the Fund prospectuses and their
Statements of Additional Information. The prospectuses are provided
with this Prospectus. The Statements of Additional Information are
available upon your request.]
Principal Underwriter
Security First Financial, Inc., 11365 West Olympic Boulevard, Los Angeles,
California 90064, a broker-dealer registered under the Securities Exchange Act
of 1934 and a member of the National Association of Securities Dealers, Inc., is
the
20
<PAGE> 24
principal underwriter for the Contracts. Security First Financial, Inc. is a
Delaware corporation and a subsidiary of SFG.
Servicing Agent
SFG provides Security First Life with administrative services, including: office
space, supplies, utilities, office equipment, travel expenses and periodic
reports.
Custodian
Security First Life is the custodian of the assets of the Separate Account. The
assets of each Series will be physically segregated by Security First Life and
held separate from the assets of the other Series and of any other firm, person
or corporation. The assets of the Separate Account are further protected by
fidelity bonds which cover all of Security First Life's officers and employees.
CONTRACT CHARGES
Security First Life deducts the charges described below. Security First Life
represents that the charges are reasonable for the service and benefits
provided, costs and expenses incurred, and risks assumed under the Contracts.
Services and benefits Security First Life provides include:
- the ability for you to make withdrawals and surrenders
under the Contracts;
- the death benefit paid at your death;
- the available funding options;
- administration of the annuity options available under
the Contracts; and
- the distribution of various reports to Contract owners
and participants.
Costs and expenses incurred by Security First Life include:
- losses associated with various overhead and other
expenses from providing the services and benefits under
the Contracts;
- sales and marketing expenses; and
- other costs of doing business.
21
<PAGE> 25
Risks assumed by Security First Life include:
- risks that Annuitants may live longer than estimated
when the annuity factors under the Contracts were
established;
- that the amount of the death benefit will be greater
than the value of Participant's Account; and
- that the costs of providing the services and benefits
under the contracts will exceed the charges deducted.
Security First Life may also deduct a charge for taxes, if applicable.
Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.
22
<PAGE> 26
These charges may not be changed under the Contract, and Security First Life may
profit from these charges in the aggregate.
Administrative Charge
At the end of each Certificate Year, and on the date your Participant's Account
is canceled as a result of a complete surrender, Security First Life will deduct
an administrative charge of $27.50 plus $2.50 for each General Account and
Separate Account Series for which there are Accumulation Units included in the
value of your account. These charges will range from a minimum of $30 to a
maximum of $40 on an annual basis. For certain Contacts issued to fund deferred
compensation plans for state and local government employees described in section
457 of the Code, Security First has agreed to waive a portion of this annual
administrative charge. Then the charge will be $12 for a single Series, plus
$2.50 for each additional Series and the administrative charges will therefore
range from $12 to $22.
Contract administration charges include:
- the cost of policy issuance
- rent
- stationery and postage
- telephone and travel expenses
- salaries
- legal, administrative, actuarial and accounting fees
- periodic reports
- office equipment, and custodial expenses
Premium Taxes
Some states assess premium taxes on the Purchase Payments you make. Generally,
premium taxes range from 0% to 2.35% (3.50% in Nevada), depending on the state.
The Contracts permit Security First Life to deduct any applicable premium taxes
from the Participant's Account at or after the time they are incurred. Security
First Life currently does not deduct for these taxes at the time you make a
Purchase Payment. However, until further notice, such premium taxes will be
absorbed by Security First Life and not charged against you.
Transfer Charge
A $10 transfer charge is deducted from your account for each allowable election
to transfer Accumulation Units or Annuity Units from any one Series to another.
23
<PAGE> 27
Withdrawal Charge
A $10 withdrawal charge is deducted from a Participant's Account for each
partial surrender to cover the costs of redemption.
Refundable Surrender Charge
When you request a transfer from the General Account to the Separate Account,
this transfer is treated as a surrender. This surrender is subject to a
percentage charge that varies with the time a purchase payment has remained in
the General Account. The charge is not made on earnings in the Separate Account.
The percentage charge is:
<TABLE>
<CAPTION>
Calendar Year
of receipt of
Percentage Purchase Payment
---------- ----------------
<S> <C>
7% Current Year
6% 2nd Year
5% 3rd Year
4% 4th Year
3% 5th Year
0% 6th Year and more
</TABLE>
The surrender charge is calculated by subtracting from the General Account from
which you are withdrawing a Purchase Payment an amount determined as follows:
the surrender amount
1 - the percentage surrender charge expressed as a decimal
Accumulation Units are canceled on a first-in, first-out basis; and the amount
credited to your Participant's Account with respect to each Purchase Payment
will be subject to the surrender charge. In no event will a surrender charge
imposed on Accumulation Units be more than 9% of Purchase Payments allocated to
the Separate Account. The effect of this varying schedule of percentage charges
is that amounts that you leave in the General Account for longer periods of time
are subject to a lower charge than amounts immediately surrendered.
If a Participant's Account is applied to provide Annuity income, all percentage
changes (other than premium taxes, if any) previously imposed on transfers to
the Separate Account will be restored in full or in part as an annuity bonus.
For more information please refer to "Transfers from the General Account to the
Separate Account" on page ___ and "Annuity Payments" on page ___.
24
<PAGE> 28
Mortality and Expense Risk Charge
Security First Life charges a fee for bearing certain mortality and expense
risks under the Contracts. Examples of these risks include a guarantee of
annuity rates, the death benefits, certain Contract expenses, and assuming the
risk that the expense charges and fees are less than actual administrative and
operating expenses. As compensation for assuming these risks, Security First
Life will make a daily deduction from the value of the Separate Account's assets
equal to .89% per year.
If Security First Life has gains from the receipt of the mortality and expense
risk charges over its cost of assuming these risks, it may use the gains as it
sees fit. This may include the reduction of expenses incurred in distributing
the Contracts.
Federal, State and Local Taxes
Security First Life may in the future deduct charges from your Participant's
Account for any taxes it incurs because of the Contracts. However, no deductions
are being made at the present time.
[Side Bar: Please note that deductions are made and expenses paid out of the
underlying Funds' assets, as well. A description of these fees and expenses are
described in each Fund's prospectus which follows this Prospectus.]
25
<PAGE> 29
DESCRIPTION OF THE CONTRACTS
General
The Contracts are group contracts designed to provide annuity benefits to
employees of the following:
- Public School Systems
- Churches
- Certain tax-exempt organizations under Section 403(b) of the
Code
- Employees covered under various types of Section 457 deferred
compensation Plans
- Retirement plans held by trusts which qualify under Section 401
of the Code
These group contracts are also designed for individuals as individual retirement
accounts under Section 408 of the Code (see "Federal Income Tax Status" page
___).
The Contract are designed to fulfill long-term financial needs. They should not
be considered as short-term or temporary investments.
A group Contract is issued to an employer or organization which is the Owner.
This Contract covers all present and future Participants. After completing an
enrollment form and arranging for Purchase Payments to begin, you and all other
Participants will receive a Certificate that gives you a summary of the Contract
provisions. This Certificate also serves as evidence of your participation in
the Plan. Please note that no Certificates are issued to Participants under
deferred compensation or qualified retirement Plans.
The group Contract may be restricted by the Plan as to your exercise of certain
rights provided in the Contract. You should refer to the Plan for information
concerning these restrictions.
Assignment
If permitted by the Plan, you may assign your interest in the Contract by
providing Security First Life with written notice. Where a Contract is issued in
connection with a deferred compensation plan, all rights and powers under the
Contract are vested in the Owner, not you.
26
<PAGE> 30
Purchase Payments
You may make a Purchase Payments on an annual, semi-annual, quarterly, or
monthly basis, or other times as may be agreed to by Security First Life. The
frequency of Purchase Payments may be changed if permitted by the applicable
Plan. The minimum annual Purchase Payment is $240; with each monthly purchase
payment subject to a $20 minimum. Purchase Payments will be invested in the
General Account Series to purchase Accumulation Units at their value on the date
the payment is received by Security First. Security First Life may also accept
Transfer Payments from other annuity contracts. Confirmation of each Purchase
Payment or transfer payment received will be sent to the Owner or you as
appropriate.
Transfers
Transfers from the General Account to the Separate Account
The entire Purchase Payment, minus a 7% sales charge, may be transferred
immediately to the Separate Account if written instructions are received prior
to or at the time of receipt of the payments affected.
With the exception of certain deferred compensation plans described in section
457 of the Code, if Purchase Payments are not transferred immediately,
subsequent elections to transfer are restricted to 48% of the payments and are
transferred in equal monthly installments over a period of at least 48 months.
Each monthly installment is subject to a $50 minimum. Transfers from the General
Account to the Separate Account are not permitted after Annuity payments have
commenced. No monthly transfers may be made from General Account Accumulation
Units which have been subject to any prior transfer election.
All amounts transferred represent the current surrender value of the General
Account Accumulation Units which are canceled. According to your designation,
and certain limitations, amounts transferred to the Separate Account are
invested in Accumulation Units of one or more Series of the Separate Account.
The investment performance of the Fund and deductions of certain changes affect
the Accumulation Unit value. Amounts may also be transferred back from the
Separate Account to the General Account, but only in connection with an election
to apply the resulting General Account values to provide Fixed Annuity benefits.
In addition, all or part of the percentage transfer charge may be restored as an
Annuity bonus upon annuitization.
27
<PAGE> 31
Transfer Among Series
You may transfer either Accumulation Units or Annuity Units from any Separate
Account Series to any one or more other Separate Account Series. Any transfer
must be requested in writing. Transfers may be subject to certain limitations
under a Plan. The minimum amount to be transferred is $1,000 and is based upon
the value of the affected Series at the close of trading on the New York Stock
Exchange (currently 4:00 P.M. Eastern Time) on the Business Day such transfer of
a unit occurs, subject to a transfer charge of $10.
Modification of the Contracts
Security First Life must make Annuity payments involving life contingencies at
no less than the minimum guaranteed Annuity rates incorporated into the
Contracts, even if actual mortality experience is different.
Security First Life is legally bound under the Contract to maintain these
Annuity purchase rates. Security First Life must also abide by the Contract's
provisions concerning:
- death benefits
- deductions from Purchase Payments
- deductions from Participant's Account for transaction charges
- deductions from the Separate Account for mortality and expense
risk and administrative charges
- guaranteed rates with respect to fixed benefits
Security First Life may change such provisions without your consent to the
extent permitted by the Contract, but only:
- with respect to Participants who become covered under a
Contract after the effective date of the change;
- with respect to benefits and values provided by any
Transfer Payment from another tax deferred annuity
contract which is accepted by Security First after the
effective date of the change;
- with respect to benefits and values provided by Purchase
Payments made after the effective date of the change to
the extent that such Purchase Payments in any Contract
Year exceed the first year's Purchase Payments; or
28
<PAGE> 32
- to the extent necessary to conform the Contract to any
Federal or state law, regulation or ruling.
If you have any questions about any of the provisions of your Contract, you may
write or call:
Security First Life Insurance Company
P.O. Box 92193
Los Angeles, California 90009
(310) 312-6100
ACCUMULATION PERIOD
Crediting Accumulation Units in the Separate Account
Security First Life will credit Accumulation Units to a Series upon receipt
of your Purchase Payment or transfer. Security First Life determines the number
of Accumulation Units to be credited to a Series by dividing the net amount
allocated to a Series out of your Purchase Payment by the value of an
Accumulation Unit in the Series next computed following receipt of the Purchase
Payment or transfer.
Separate Account Accumulation Unit current values
The current value of Accumulation Units of a particular Series depends upon the
investment experience of the Fund in which the Series invests its assets. The
value of Accumulation Units is determined each business day at the close of
trading on the New York Stock Exchange (currently 4:00 p.m. Eastern time ). The
value is calculated by multiplying the value of an Accumulation Unit in the
Series on the immediately preceding valuation date by the net investment factor
for the period since that day. You bear the risk that the aggregate current
value invested in the Series may at any time be less than, equal to or more than
the amount that you originally allocated to the Series.
[Side Bar: The net investment factor is an index of the percentage change
(adjusted for distributions by the Fund and the deduction of the administration
fee, mortality and expense risk fee) in the net asset value of the Fund in which
a Series is invested, since the preceding Valuation Date. The net investment
factor may be greater or less than 1 depending upon the Fund's investment
performance.
29
<PAGE> 33
Surrender from the Separate Account
Subject to any limitations in a Plan, you may surrender all or a portion of your
Participant's Account at any time prior to the Annuity Date. A surrender may
result in adverse federal income tax consequences to you including current
taxation on the distribution and a penalty tax on the early withdrawal. These
consequences are discussed in more detail under "Federal Tax Considerations" on
page ___. You should consult your tax adviser before making a withdrawal.
Your interest in the Separate Account prior to the Annuity Date is determined by
multiplying the number of Accumulation Units for each Series credited to your
Participant's Account by the current value of an Accumulation Unit in the
Series. Security First Life will determine the value of the number of
Accumulation Units withdrawn at the next computed Accumulation Unit value.
If you request a partial surrender from more than one Series you must specify
the allocation of the partial surrender among the Series. You may not make a
partial surrender if a withdrawal:
- would cause your interest in any Series to have an after
surrender value of less than $200;
However, if you are withdrawing the entire amount allocated to a Series these
restrictions do not apply. Any partial surrender will be subject to a withdrawal
charge of the lesser of $10 or 2% of the amount of the surrender.
Payment of Surrender Amount
Payment of any amount surrendered from a Series will be made to you within seven
days of the date that Security First Life receives your written request.
Security First Life may suspend surrenders when:
- The SEC restricts trading on the New York Stock Exchange
or the Exchange is closed for other than weekends or
holidays.
- The SEC permits the suspension of withdrawals.
- The SEC determines that an emergency exists that makes
disposal of portfolio securities or valuation of assets
of the Funds not reasonably practicable.
30
<PAGE> 34
Account Statements
You will receive a written account statement each calendar quarter in which a
transaction occurs before to the Annuity Date. Even if you do not engage in any
transactions you will receive at least one written account statement per year.
The statement shows:
- all transactions for the period being reported
- the number of Accumulation Units that are credited to
your Contract in each Series
- the current Accumulation Unit value for each Series
- your Participant's Account as of the end of the
reporting period
Security First Life is careful to ensure the accuracy of calculations and
transfers to and within the Separate Account. However, errors may still occur.
You should review your statements and confirmations of transactions carefully
and promptly advise Security First Life of any discrepancy. Allocations and
transfers reflected in a statement will be considered final at the end of 60
days from the date of the statement.
ANNUITY BENEFITS
Variable Annuity Payments
Your interest in the Series is applied to provide you with a Variable Annuity.
The dollar amount of the Variable Annuity payments that you receive will reflect
the investment experience of the Series but will not be affected by adverse
mortality experience which may exceed the mortality risk charge established
under the Contract.
Assumed Investment Return
Unless you elect otherwise, the Assumed Investment Return is 4.25% per year. If
the laws and regulations of your State allow, you may elect an Assumed
Investment Return of 3.50%, 5% or 6%. The Assumed Investment Return does not
bear any relationship to the actual net investment experience of the Series.
Your choice of Assumed Investment Return affects the pattern of your Annuity
payments. Your Annuity payments will vary from the Assumed Investment Return
depending on whether the investment experience of the Series in which you have
31
<PAGE> 35
an interest is better or worse than the Assumed Investment Return. The higher
your Assumed Investment Return, the higher your first Annuity payment will be.
Your next payments will only increase in proportion to the amount the investment
experience of your chosen Series exceeds the Assumed Investment Return and
Separate Account charges. Likewise, your payments will decrease if the
investment experience of your chosen Series is less than the Assumed Investment
Return and Separate Account charges. A lower Assumed Investment Return will
result in a lower initial Annuity payment, but subsequent Annuity payments will
increase more rapidly or decline more slowly as changes occur in the investment
experience of the Series. Conversely, a higher Assumed Investment Return would
result in a higher initial payment than a lower Assumed Investment Return, but
later payments will rise more slowly or fall more rapidly.
When your interest in the Separate Account is applied to provide Annuity income
then, if you have made no surrenders (redemptions) from the Separate Account,
Security First will add an Annuity bonus to the amount available to provide
Fixed Annuity benefits under the Contract. The Annuity bonus will be equal to
the sales charges previously deducted from your Participant's Account with
respect to transfers from the General Account to one or more Separate Account
Series, together with interest on such amount. If you have made partial
surrenders from the Separate Account, an Annuity bonus will still be credited
but will be reduced proportionately to reflect those surrenders. The Annuity
bonus will be reduced by the same proportion which the amount of the surrender
then bears to your entire interest in the Separate Account.
Election of Annuity Date and Form of Annuity
You choose the Annuity Date and the form of Annuity payment.
Election of Annuity Date
If you do not choose an Annuity Date at least thirty-one days before
Annuitization, your Normal Annuity Date automatically will be the later of:
- the Contract anniversary nearest to the Annuitant's 75th
birthday, or
- the tenth anniversary of the Certificate Date.
You may select an optional Annuity Date that is earlier than the Normal Annuity
Date described above. This Annuity Date may be the first day of any month before
the Normal Annuity Date.
32
<PAGE> 36
Please note that the Qualified Contracts may require a different Normal Annuity
Date and may prohibit the selection of certain optional Annuity Dates.
Form of Annuity
[Side Bar: There are two people who are involved in payments under your Annuity:
- you, the Participant and Annuitant
- the Beneficiary
Currently, Security First Life provides you with five forms of Annuity payments.
Each Annuity payment option, except Option 5, is available on both a Fixed and
Variable Annuity basis. Option 5 is available on a Fixed basis only.
Option 1 - Life Annuity
You receive Annuity payments monthly during your lifetime. These payments stop
with the last payment due before your death. Because Security First Life does
not guarantee a minimum number of payments under this arrangement, this option
offers the maximum level of monthly payments.
Option 2 - Life Annuity with 120, 180, or 240 Monthly Payments Certain
You receive a guaranteed minimum number of monthly Annuity payments during your
lifetime. In addition, Security First Life guarantees that you, (or your
Beneficiary) will receive monthly payments for the remainder of the period
certain, if you die during that period.
Option 3 - Installment Refund Life Annuity
An Annuity payable monthly during your lifetime. You receive a guaranteed
minimum number of monthly payments which are equal to the amount of your
Participant's Account allocated to this option divided by the first monthly
payment. If you die before receiving the minimum number of payments, the
remaining payments will be made to your Beneficiary.
33
<PAGE> 37
Option 4 - Joint and Last Survivor Life Annuity
You receive Annuity payments monthly during the lifetime of you and another
payee (the joint payee) and during the lifetime of the survivor of the two of
you. Security First Life stops making payments with the last payment before the
death of the last surviving payee. Security First Life does not guarantee a
minimum number of payments under this arrangement. For example, you or other
payee might receive only one Annuity payment if both of you die before the
second Annuity payment. The election of this option is ineffective if either of
you dies before Annuitization. In that case, the survivor becomes the sole
payee, and Security First Life does not pay death proceeds because of the death
of the other payee.
Option 5 - Payments for a Designated Period (Fixed Annuity Only)
Security First Life makes Annuity payments monthly to you or another
properly-designated payee, or to the Beneficiary at you or another payee's
death, for a selected number of years ranging from five to thirty. The amount of
each payment will be based on an interest rate determined by Security First Life
that will not be less than 4.0% per year for periods of 10 to 30 years and 3.0%
per year for periods of 5 to 9 years. If you are age 60 or older on the Annuity
Date, or you have given evidence of your election to begin payments under your
employer's retirement program, you may elect a designated period of 3 years. You
may not commute Fixed Annuity payments to a lump sum under this option.
If you do not choose a form of Annuity payment, Option 2, a life annuity with a
guaranteed minimum of 120 monthly payments, will automatically be applied to
your Contract. You may make changes in the optional form of Annuity payment at
any time until 31 days before the Annuity date.
The first year's Annuity payment described in Options 1 - 4 are calculated on
the basis of:
- the mortality table specified in the Contract
- the age and where permitted the sex of the Annuitant
- the type of Annuity payment option selected, and
- the assumed investment return selected.
The fixed Annuity payments described in Option 5 are calculated on the basis of:
- the number of years in the payment period, and
- the interest rate guaranteed with respect to the option.
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Fixed Annuities are funded through the General Account of Security First Life.
Frequency of Payment
Your payments under all options will be made on a monthly basis unless you and
Security First Life have agreed to a different arrangement.
Payments from each Series must be at least $50 each. If a payment from a Series
will be less than $50, Security First Life has the right to decrease the
frequency of payments so that each payment from a Series will be at least $50.
Level Payments Varying Annually
Your variable Annuity payments are determined yearly rather than monthly. As a
result, you will receive a uniform monthly Annuity payment for each Annuity
year. The level of payments for each year is based on the investment performance
of the Series up to the Valuation Date as of which the payments are determined
for the year. As a result, the amounts of the Annuity payments will vary with
the investment performance of the Series from year to year rather than from
month to month. Your monthly variable Annuity payments for the first year will
be calculated on the last Valuation Date of the second calendar week before the
Annuity date. The amount of your monthly variable Annuity payments will be
calculated using a formula described in the Contract. On each anniversary of the
Annuity date, Security First Life will determine the total monthly payments for
the year then beginning. These payments will be determined by multiplying the
number of Annuity units in each Series from which payments are to be made by the
annuity unit value of that Series for the valuation period in which the first
payment for that period is due.
After calculating the amount due to you, Security First Life transfers the
amount of the year's Variable Annuity payments to a General Account at the
beginning of the year. Although the amount in the Separate Account is credited
to you and transferred to the General Account, you do not have any property
rights in this amount. You do have a contractual right to receive your Annuity
payments.
The monthly Annuity payments for the year are made from the General Account with
interest using the standard assumed investment return of 4.25% or the Assumed
Investment Return that you selected. As a result, Security First Life will
experience profits or losses on the amounts placed in the General Account in
providing level monthly payments to you during the year that meet the Assumed
Investment Return that you selected. For example, if the net investment income
and gains in the General Account are lower than the Assumed Investment Return
selected, Security First Life will experience a loss.
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<PAGE> 39
You will not benefit from any increases or be disadvantaged from any decreases
in any Annuity Unit Values during the year because the Annuity payments for that
year are set at the beginning of the year. These increases and decreases will be
reflected in the calculation of Annuity payments for the following year.
Annuity Unit Values
This is how Security First Life calculates the Annuity Unit Value for each
Series:
- First, Security First Life determines the change in
investment experience (including any investment-related
charge) for the underlying Fund from the previous
trading day to the current trading day.
- Next, it subtracts the daily equivalent of your
insurance-related charge (general administrative expense
and mortality and expense risk charges) for each day
since the last day the Annuity Unit Value was
calculated.
- Then, it divides the result by the quantity of one plus
the weekly equivalent of your Assumed Investment Return.
- Finally, the previous Annuity Unit Value is multiplied
by this result.
DEATH BENEFITS
Death Before the Annuity Date
If you die before the Annuity Date, your Beneficiary(ies) will receive a death
benefit equal to the value of the Participant's Account at the time of
settlement.
Your Beneficiary(ies) receive the death benefit as either:
1) A lump sum that must be made within five (5) years of
your death.
or
2) Annuity income under Annuity Income Options One, Two or
Five described in Article 7 of the Contract.
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<PAGE> 40
If your Beneficiary(ies) chooses one of the Annuity income options:
- Payments must begin within one year of your death
(However, your spouse may delay commencement of payments
to the date that you would have reached 70 1/2.)
- The guaranteed period under Option Two or the designated
period under Option Five may not be longer than the
Beneficiary's life expectancy under applicable tables
specified by the Internal Revenue Service.
- The Participant's Account on the date of the first
Annuity payment will be used to determine the amount of
the death benefit.
If your spouse is your sole Beneficiary, he or she may choose to succeed to your
rights as Owner rather than to take the death benefit. If you have more than one
Beneficiary living at the time of your death, each will share the proceeds of
the death benefit equally unless you elect otherwise.
If you outlive all of your Beneficiaries, the death benefit will be paid to your
estate in a lump sum. No Beneficiary shall have the right to assign or transfer
any future payments under the Options, except as provided in the election or by
law.
You will also be considered to have outlived your Beneficiary(ies) in the
following situations:
- Your Beneficiary(ies) and you die at the same time.
- Your Beneficiary(ies) dies within 15 days of your death
and proof of your death is received by Security First
Life before the date due.
Proof of death includes a certified death certificate, or attending physician's
statement, a decree of a court of competent jurisdiction as to the finding of
death, or other documents that Security First Life agrees to accept as proof of
death.
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<PAGE> 41
Death After the Annuity Date
If you die on or after the Annuity Date, the amounts payable to the
Beneficiary(ies) or other properly designated payees or any continuing payment
under the Annuity Payment option in effect. In this case, the Beneficiary will:
- have all the remaining rights and powers under a
Contract, and
- be subject to all the terms and conditions of the
Contract.
If none of your Beneficiaries survive you, the value of any remaining payments
certain on your death, calculated on the basis of the assumed investment return
that you previously chose, will be paid in a lump sum to your estate unless
other provisions have been made and approved by Security First Life. This value
is calculated on the next day of payment following receipt of due proof of
death.
Unless otherwise restricted, a Beneficiary receiving variable payments under
Option Two or Three may elect at any time to receive the present value of the
remaining number of Annuity payments certain in a lump sum payment after your
death. The present value of the remaining Annuity payments will be calculated on
the basis of the assumed investment return previously selected. This lump sum
payment election is not available to a Beneficiary receiving Fixed Annuity
payments.
FEDERAL TAX CONSIDERATIONS
The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.
General Taxation of Annuities
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (the Code) governs how this money is ultimately taxed.
There are different rules for qualified and non-qualified Contracts and
depending on how the money is distributed, as briefly described below.
You generally will not be taxed on increases in the value of your Contract until
a distribution occurs -- either as a withdrawal or as an Annuity payment. This
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<PAGE> 42
concept is known as tax deferral. In addition, Security First Life will not be
taxed on the investment income and capital gains of the Separate Account.
[Side Bar: A qualified Contract is a Contract that is purchased under certain
types of tax-advantaged retirement plans.
Qualified plans include:
- SECTION 401 PLANS (self-employed and corporate pension and
profit-sharing plans)
- SECTION 403 PLANS (tax-deferred annuities)
- SECTION 457 PLANS (deferred compensation plans)
- TRADITIONAL IRAS
- ROTH IRAS
A NON-QUALIFIED CONTRACT is a Contract that is purchased on an individual basis
with after-tax dollars and not under one of the programs listed above in the
description of a qualified Contract. The Contracts are not offered on a
non-qualified basis.]
[SIDE BAR: Please note that the terms of a particular plan may limit your rights
otherwise available under the Contract.]
QUALIFIED CONTRACTS
The full amount of all distributions received from a Section 401, 403(b), 457
plan or traditional IRA (except for a return of non-deductible employee
contributions) are included in your gross income and are taxed at ordinary
income rates unless the distribution is transferred to an eligible rollover
account or Contract. In certain cases, distributions received from a Roth IRA
are also included in gross income.
Generally, distributions are included in your income in the year in which they
are paid. However, in the case of a Section 457 plan, a distribution is
includible in the
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<PAGE> 43
year it is paid or when it is made available, depending upon whether certain
Code requirements are met. In very limited situations, a lump sum distribution
from a Section 401 plan may qualify for special forward income averaging or may
qualify for special long term capital gain treatment.
MANDATORY MINIMUM DISTRIBUTIONS
If you are a participant in a Section 401, 403(b), 457 plan or traditional IRA,
you generally must begin receiving withdrawals from your Contract value or
Annuity payments for life or a period not exceeding the life expectancy of you
or you and a beneficiary by April 1 of the calendar year following the later of:
- the year you turn 70 1/2
- the year you retire
WITHDRAWALS BEFORE AGE 59 1/2
If you receive a taxable distribution from your Contract before you reach age 59
1/2, this amount may be subject to a 10% penalty tax in addition to ordinary
income taxes. Section 457 plans are not subject to this 10% penalty tax.
As indicated in the chart below, some distributions prior to age 59 1/2 are
exempt from the penalty. Some of these exceptions include any amounts received:
<TABLE>
<CAPTION>
Type of Plan
-------------------------------------
401 403(b)* 457 IRA
--- ------- --- ---
<S> <C> <C> <C> <C>
After you die X X X
After you become totally disabled
(as defined in the Code) X X X
Faced with an unforeseeable emergency X
Pursuant to a domestic relations x x x
order
</TABLE>
* These restrictions only apply to 403(b) contributions and
earnings made after December 31, 1988. These restrictions do
not apply to Contract values attributable to contributions or
earnings made before January 1, 1989.
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<PAGE> 44
ROLLOVERS OF PLAN CONVERSIONS
You may roll over distributions (other than required distributions) from one
plan to another plan without incurring any Federal income tax under some
circumstances. These circumstances are as follows:
<TABLE>
<CAPTION>
Distribution Issued from: May be Rolled into:
------------------------- -------------------
<S> <C>
- Section 401 plan Another Section 401 plan;
or an IRA
- Section 403(b) plan Another Section 403(b) plan;
or an IRA
- IRA Another IRA;
a Roth IRA (under certain conditions);
a Section 401 or 403(b) plan
if the IRA contains only
permissible rollover amounts
</TABLE>
DEDUCTIONS FOR PLAN CONTRIBUTIONS
You may deduct your contributions to Section 401 plans and Section 403(b)
annuities in the year when made up to the limits specified in the Code. These
plans may also permit non-deductible employee contributions. Any non-deductible
employee contribution that you make will be received tax free as a portion of
each Annuity payment.
TAXATION OF DEATH BENEFITS
Any distributions under Section 401 and 403(b) plans and IRAs must meet minimum
incidental death benefit requirements under the Code. However, if you are a
participant in a Section 401 plan and your spouse is your designated
beneficiary, these death benefit requirements do not apply.
Similar requirements apply to Section 457 plans for the tax years beginning
after December 31, 1988.
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<PAGE> 45
WITHHOLDING
MANDATORY 20% WITHHOLDING FOR "ELIGIBLE ROLLOVER DISTRIBUTIONS"
If you are participating in a Section 401 retirement plan or a Section 403(b)
tax-deferred annuity (including lump sum distributions), Security First Life is
required to withhold 20% of the taxable portion of your withdrawal that
constitutes an "eligible rollover distribution" for Federal income tax purposes.
An "eligible rollover distribution" is any taxable amount that you receive from
your Contract, except for taxable distributions that are:
- a life or life expectancy annuity (individual or joint)
- an annuity with a designated period of 10 years or more
- withdrawals to satisfy minimum distribution requirements
Other exceptions to the definition of eligible rollover distribution exist. The
requirements discussed below under "Other Withholding" will apply to any
distribution that is not an eligible rollover distribution.
You may not elect out of the 20% withholding requirement. However, Security
First Life is not required to withhold the money if an eligible rollover
distribution is rolled over into a traditional IRA or other eligible retirement
plan in a direct trustee-to-trustee transfer.
OTHER TAX WITHHOLDING
Different withholding rules apply to taxable withdrawals such as Annuity
payments, lump sum distributions, and partial withdrawals that are not eligible
rollover distributions.
The withholding rules are determined at the time of payment. You may elect out
of these withholding requirements. You may revoke an election made in regard to
Annuity payments at any time and tax withholding will begin again at that time.
Security First Life will notify you at least annually of your right to revoke
your election.
TAXPAYER IDENTIFICATION NUMBER ("TIN")
You are required by law to provide Security First Life (as payor) with your
correct TIN. If you are an individual, the TIN is your social security number.
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<PAGE> 46
VOTING RIGHTS
As the owner of the Separate Account, Security First Life is the legal owner of
the shares of the funding options. Based upon Security First Life's current view
of applicable law, the Owner has voting interests under the Contract concerning
Fund shares and is entitled to vote on Fund proposals at all regular and special
shareholders meetings. Therefore, the Owner is entitled to give us instructions
for the number of shares which are deemed attributable to the Contract.
Security First Life will vote all shares of the underlying Funds as directed by
Contract Owners who have voting interests in the Funds. Security First Life will
send Contract Owners, at a last known address, all periodic reports, proxy
materials and written requests for instructions on how to vote those shares.
When Security First Life receives these instructions, it will vote all of the
shares in proportion to the instructions. If Security First Life does not
receive the Owner's voting instructions, it will vote the Owner's interest in
the same proportion as represented by the votes it receives from the other
Owners. If Security First Life determines that it is permitted to vote the
shares in its own right due to changes in the law or in the interpretation of
the law it may do so.
Security First Life is under no duty to inquire into voting instructions or into
the authority of the person issuing such instructions. All instructions will be
valid unless Security First Life has actual knowledge that they are not.
There are certain circumstances under which Security First Life may disregard
voting instructions. However, in this event, a summary of our action and the
reasons for such action will appear in the next semiannual report.
The number of votes that the Owner receives is determined on a record date that
is set no more than 90 days before the meeting. Voting instructions will be
requested at least 10 days before the meeting. Only Owners on the record date
may vote.
The number of shares to which the Owner is entitled to vote is calculated by
dividing the portion of all of the Participant's Accounts allocated to that Fund
on the record date by the net asset value of a Fund share on the same date.
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<PAGE> 47
YEAR 2000 ISSUE
Security First Life and its service providers, including the underlying Fund
options, depend on the smooth operation of their computer systems. Many computer
and software systems in use today cannot recognize the Year 2000, but revert to
1900 or some other date, due to the manner in which dates were encoded and
calculated. That failure could have a negative impact on Security First Life and
the Separate Account, including the calculation of your interest in the Series,
on the Funds' handling of securities trades, pricing and account services, as
well as on the companies in which the Funds will invest. Security First Life is
monitoring the efforts of the service providers to prepare their systems for the
Year 2000 and expects that each Series service providers will be adapted before
that date. There can be no guarantee, however, that Security First Life or its
service providers will be successful or that the steps taken by Security First
Life will be sufficient to avoid any adverse impact on the Separate Account and
each of its Series.
LEGAL PROCEEDINGS
There are no present or pending material legal proceedings affecting the
Separate Account. Security First Life, in the ordinary course of its business,
is engaged in litigation of various kinds which in its judgment is not of
material importance in relation to its total assets.
ADDITIONAL INFORMATION
You may contact Security First Life at the address and phone number on the cover
of this Prospectus for further information. A copy of the Statement of
Additional Information, dated May 1, 1999, which provides more detailed
information about the contracts, may also be obtained. The table of contents for
the Statement of Additional Information is attached at page ____.
A Registration Statement has been filed with the SEC under the Securities Act of
1933 for the Contracts offered by this Prospectus. This Prospectus does not
contain all of the information in the Registration Statement. Please refer to
this Registration Statement for further information about the Separate Account,
Security First Life and the Contracts. Any statements in this Prospectus about
the contents of the Contracts and other legal instruments are only summaries.
Please see the filed versions of these documents for a complete statement of any
terms.
44
<PAGE> 48
'33 Act File No. 33-61370
STATEMENT OF
ADDITIONAL INFORMATION
SECURITY FIRST LIFE SEPARATE ACCOUNT A
--------------------------------------------------------------------
GROUP FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
--------------------------------------------------------------------
SECURITY FIRST LIFE INSURANCE COMPANY
MAY 1, 1999
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus. A copy of the prospectus, dated May 1, 1999,
may be obtained without charge by writing Security First Life Insurance Company,
P.O. Box 92193, Los Angeles, California 90009 or by calling 1-310-477-1059 (in
California) or 1-800-992-9785 (outside California).
SF 1700
<PAGE> 49
TABLE OF CONTENTS
PAGE
The Insurance Company 3
The Separate Account 3
Net Investment Factor 3
Annuity Payments 4
Additional Federal Income Tax Information 6
Distribution of the Contracts 9
Voting Rights 9
Safekeeping of Securities 9
Independent Auditors 10
Legal Matters 10
State Regulation of Security First Life 10
Financial Statements 10
2
<PAGE> 50
THE INSURANCE COMPANY
Security First Life Insurance Company ("Security First Life") is a stock life
insurance company founded in 1960 and organized under the laws of the State of
Delaware. Its principal executive offices are located at 11365 West Olympic
Boulevard, Los Angeles, California 90064. Security First Life is a wholly-owned
subsidiary of Security First Group, Inc. ("SFG"). SFG, the parent company of
Security First Life, is a wholly-owned subsidiary of Metropolitan Life Insurance
Company ("MetLife"), a New York mutual life insurance company. MetLife, with
assets of $_______ billion at June 30, 1998, is the second largest life
insurance company in the United States in terms of total assets. As a mutual
life insurance company, MetLife has not shareholders. However, MetLife announced
in November 1998 its intention to convert to a stock company. The
"demutualization" plan will be subject to approval of the Board of Directors,
the state of New York Insurance Department, and policyholders. As of May 1,
1999, MetLife does not know the details of the plan or when or if it will take
place.
THE SEPARATE ACCOUNT
The Security First Life Separate Account A ("Separate Account") presently funds
the Contracts described in this Prospectus and individual and group variable
annuity contracts on Forms SF135R2V, SF135R2C, SF224FL, SF226R1, SF230, SF234,
and SF236. These variable annuity contracts are described in other prospectuses.
The Separate Account is registered as a unit investment trust under the
Investment Company Act of 1940. Registration with the Securities and Exchange
Commission does not involve supervision of the management or investment
practices or policies of the Separate Account or Security First Life by the
Commission.
On December 1, 1993, Security First Life Separate Account B, another segregated
asset account of Security First Life, was merged with and into the Separate
Account. See the section in the prospectus entitled "Description of Security
First Life and the Separate Account - Merger of Former Security First Life
Separate Account B with and into Security First Life Separate Account A". The
Contracts described in this Statement of Additional Information which were
formerly funded in Security First Life Separate Account B are now funded in the
Separate Account.
Amounts allocated to the Separate Account under the Contract are invested in the
securities of five Funds: the Bond Series and the T. Rowe Price Growth and
Income Series of the Security First Trust; the T. Rowe Price Growth Stock Fund;
the T. Rowe Price Prime Reserve Fund; and the Money Market Portfolio of the
Variable Insurance Products Fund. The Separate Account is divided into Series
which correspond, respectively, to these five Funds.
NET INVESTMENT FACTOR
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<PAGE> 51
The Separate Account net investment factor is an index of the percentage change
(adjusted for distributions by the Fund and the deduction of the actuarial risk
fee) in the net asset value of the Fund in which the Series is invested, since
the preceding Business Day. The Separate Account net investment factor for each
Series of Accumulation Units is determined for any Business Day by dividing (i)
the net asset value of a share of the Fund which is represented by such Series
at the close of business on such day, plus the per share amount of any
distributions made by such Fund on such day by (ii) the net asset value of a
share of such Fund determined as of the close of business on the preceding
Business Day and then subtracting from this result an amount based upon the
actuarial risk fee factor of 0.0000244 for each calendar day between the
preceding Business Day and the end of the current Business Day.
ANNUITY PAYMENTS
Basis of Variable Annuity Benefits
The Variable Annuity benefit rates used in determining Annuity payments under
the Contracts are based on actuarial assumptions, reflected in tables in the
Contracts, as to the expected mortality of a large group of Annuitants of the
same sex, where permitted, and adjusted age and the form of Annuity selected.
The mortality basis for these tables is a Modified Select Annuity Mortality
Table, projected to the year 2000 on Projection Scale C, with interest at 4.25%
for all functions involving life contingencies and the portion of any period
certain beyond 10 years, and 3.25% for the first 10 years of any certain period.
Adjusted age in those tables means actual age to the nearest birthday at the
time the first payment is due, adjusted according to the following table:
<TABLE>
<CAPTION>
Calendar Year Adjusted
of Birth Age Is
------------- --------
<S> <C>
Before 1916 Actual Age
1916-1935 Actual Age Minus 1
1936-1955 Actual Age Minus 2
1956-1975 Actual Age Minus 3
1976-1995 Actual Age Minus 4
</TABLE>
Determination of Amount of Monthly Variable Annuity Payments for First Year
The Separate Account value used to establish the monthly payment for the first
payment year consists of the value of Accumulation Units of each Series of the
Separate Account held in the Participant's Account on the last day of the second
calendar week before the Annuity Date. The Contracts contain tables showing
monthly payment factors and Annuity premium rates per $1,000 of Separate Account
value to be applied under Options 1 through 4.
At the beginning of the first payment year an amount is transferred from the
Separate Account to the General Account and level monthly Annuity payments for
the year are made out of the General Account for that year. The amount
transferred is determined by multiplying the Annuity
4
<PAGE> 52
premium rate per $1,000 set forth in Contract tables by the number of thousands
of dollars of Separate Account value in the individual's account. The level
monthly payment for the first payment year is then determined by multiplying the
amount transferred (the Annuity premium) by the monthly payment factor in the
same table. In the event the account involved has Separate Account Accumulation
Units in more than one Series of the Separate Account, the total monthly Annuity
payment for the first year is the sum of the monthly Annuity payments,
determined in the same manner as above, for each Separate Account Series.
At the time the first year's monthly payments are determined, a number of
Annuity Units for each Separate Account Series is also established for the
Annuitant by dividing the monthly payment derived from that Series for the first
year by the Separate Account Annuity Unit values for the Series on the last
Business Day of the second calendar week before the first Annuity payment is
due. The number of Annuity Units remains fixed during the Annuity period unless
Annuity Units are converted to another Series.
Determination of Amount of Monthly Variable Annuity Payments for Second and
Subsequent Years
As of each anniversary of the Annuity Date, Security First Life will determine
the amount of the monthly Variable Annuity payments for the year then beginning.
Separate determinations will be made for each Separate Account Series in which
the Annuitant has Annuity Units, with the total Annuity payment being the sum of
the payments derived from the Series. The amount of monthly payments for any
Separate Account Series for any year after the first will be determined by
multiplying the number of Annuity Units for that Series by the Annuity Unit
value for that Series for the Valuation Period in which the first payment for
the year is due. It will be Security First Life's practice to mail Variable
Annuity payments no later than seven days after the last day of the Valuation
Period upon which they are based or the monthly anniversary thereof.
Annuity Unit Values
The value of an Annuity Unit was, or will be, set at $5 for each Series for the
first Valuation Period as of which the first Variable Annuity payment from such
Series was or is made. The value of an Annuity Unit for each Series on any later
date is determined by multiplying the value of an Annuity Unit at the end of the
preceding Valuation Period by the "Annuity change factor" for the second
preceding Valuation Period. The Annuity change factor is an adjusted measurement
of the investment performance of the Fund since the end of the preceding
Valuation Period. The Annuity change factor is determined by dividing the value
of an Accumulation Unit at the end of the Valuation Period by the value of an
Accumulation Unit at the end of the preceding Valuation Period and multiplying
the result by a neutralization factor.
Variable Annuity payments for each year after the first reflect variations in
the investment performance of the Separate Account above and below an assumed
investment rate (see below). This assumed investment rate is included for
purposes of actuarial computations and does not relate to the actual investment
performance of the underlying fund. Therefore, the assumed
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<PAGE> 53
investment rate must be "neutralized" in computing the Annuity change factor.
For weekly Valuation Periods and a 4.25% assumed investment rate, the
neutralization factor is 0.9991999.
Alternate Assumed Investment Rates
The choice of the assumed investment rate affects the pattern of Annuity
payments. Over a period of time, if the Separate Account achieved a net
investment result equal to the assumed investment rate applicable to a
particular option, the Annuity Unit would not change in value, and the amount of
the Annuity payments would be level. However, if the Separate Account achieved a
net investment result greater than the assumed investment rate, the Annuity Unit
would increase in value and the amount of the Annuity payments would increase
each year. Similarly, if the Separate Account achieved a net investment result
smaller than the assumed investment rate, the Annuity Unit would decrease in
value and the amount of the Annuity payments would decrease each year. Although
a higher initial payment would be received under a higher assumed investment
rate, there is a point in time after which payments under a lower assumed
investment rate would be greater, assuming payments continue through that point
in time. The effect of a higher or lower assumed investment rate can be
summarized as follows: a higher assumed investment rate will result in a larger
initial payment but more slowly rising or more rapidly falling subsequent
payments than a lower assumed investment rate.
The objective of a variable annuity contract is to provide level payments during
periods when the economy is relatively stable and to reflect as increased
payments only the excess of investment results flowing from inflation or an
increase in productivity. The achievement of this objective will depend in part
upon the validity of the assumption that the net investment rate of the Separate
Account equals the assumed investment rate during periods of stable prices.
Subsequent years' payments will be smaller than, equal to or greater than the
first year's payments depending on whether the actual net investment rate for
the Separate Account is smaller than, equal to or greater than the assumed
investment rate.
ADDITIONAL FEDERAL INCOME TAX INFORMATION
Qualified Plans
Certain tax advantages are available when the Contract is issued under a
retirement plan which meets the qualification requirements of sections 401, 403,
or 408 of the Internal Revenue Code ("Code") ("qualified plan"). Security First
Life does not purport to render tax advice; however, a general discussion
regarding Security First Life's understanding of the current federal income tax
aspects of the various types of qualified plans is set forth below. A purchaser
should consult his or her tax adviser regarding the tax implications of an
investment in the Contract.
Public School Systems, Churches and Certain Tax-Exempt Organizations
Under section 403(b) of the Code, purchase payments made to purchase annuities
by public school systems, churches, or certain tax-exempt organizations for
their employees are excludible
6
<PAGE> 54
from the gross income of the employee to the extent that aggregate purchase
payments for the employee do not exceed certain limitations imposed by the Code.
Effective January 1, 1989, the Code limits withdrawals from 403(b) Annuity
Contracts to the following circumstances only: when the Participant attains age
59 1/2, separates from service, dies, becomes disabled (within the meaning of
section 72(m)(7) of the Code), or in the case of hardship. Withdrawals for
hardship are restricted to the portion of the Participant's Account Value which
represents contributions made by the Participant and does not include any
investment results. The limitations on withdrawals apply only to: (1) salary
reduction contributions made after December 31, 1988; (2) income attributable to
such contributions; and (3) income attributable to amounts held as of December
31, 1988. The limitations on withdrawals do not affect rollovers or exchanges
between retirement plans which receive favorable tax treatment under the Code.
Pension, Profit-Sharing, and Annuity Plans for Corporations and Unincorporated
Businesses
Purchase payments for a Contract issued under a pension or profit sharing plan
qualified under section 401(a) of the Code are currently deductible. Subject to
certain limitations, an employee may also be permitted to make nondeductible
voluntary payments under the Contract. Earnings on both the employer and
employee contributions are not currently taxable to the employee, but are
taxable only on actual distribution. Employee contributions, however, are
subject to FICA withholding when made.
The tax treatment of pension and profit sharing plans established by
self-employed individuals (known as "Keogh" or "H.R. 10" plans) is essentially
the same as corporate plans. Some special restrictions apply to self-employed
individuals who are "owner-employees." An owner employee is a sole proprietor or
a partner who owns more than a specified percentage of a capital or profits
interest in the partnership.
Eligible Deferred Compensation (section 457) Plans
The Code permits employees and independent contractors of state and local
government units and tax-exempt organizations under "eligible deferred
compensation plans" to defer compensation up to certain amounts.
In the case of a section 457 plan, the employer is the owner of the Contract and
has all of the rights and powers attributable to such ownership. These include
the exclusive right to partially or fully terminate any Participant's Account
under such a Contract and to receive all payments under the Contract, including
Annuity payments. Employees participating in such plans are referred to as
Participants in such Contracts and in this prospectus solely for the purpose of
establishing a method of recording allocations applicable to such employees'
accounts. Such employees have no elective rights under the Contracts.
Employees receiving amounts under such section 457 plans from their employers
include such amounts in income in the year they are received or made available
and pay ordinary income taxes
7
<PAGE> 55
thereon. Amounts may not be made available to any employee except upon
separation from service or for an unforeseeable emergency.
Individual Retirement Annuities ("IRAs")
Any individual is permitted to establish an individual retirement arrangement
described in section 408 of the Code. Of these, only the individual retirement
Annuity described in section 408(b) is available in connection with the
Contract.
The annual limits on purchase payments do not apply to tax-free rollovers to an
IRA from another qualified retirement plan. An individual can roll over: all or
a portion of a termination or lump sum, or partial distribution from a section
401(a) plan, excluding nondeductible employee contributions; all or a portion of
a lump sum or partial distribution from a section 403(b) Annuity plan; or all or
a portion of a distribution received from another IRA or from an individual
retirement account, but only once a year. An individual must make a rollover to
the IRA within 60 days after receiving the distribution from the other plan if
it is to be considered to be tax free. Under particular circumstances involving
qualified total distributions the rollover may be subject to a mandatory 20%
withholding unless the transfer is "trustee to trustee".
Withholding on Annuity Payments and Other Distributions
Security First Life is required to withhold federal income tax on Contract
distributions (such as Annuity payments, lump sum distributions or partial
surrenders). However, except for qualified total distributions, recipients of
Contract distributions are allowed to make an election not to have federal
income tax withheld. After such election is made with respect to Annuity
payments, an Annuitant may revoke the election at any time, and thereafter
commence withholding. In such a case, Security First Life will notify the payee
at least annually of his or her right to change such election.
The withholding rate followed by Security First Life will be applied only
against the taxable portion of Contract distributions. This rate will be
determined based upon the nature of the distribution. Federal tax will be
withheld from Annuity payments pursuant to the recipient's withholding
certificate. If no withholding certificate is filed with Security First Life,
federal tax will be withheld from Annuity payments on the basis that the payee
is married with three withholding exemptions. Federal tax on the taxable portion
of partial or total surrenders generally will be withheld at the rate specified
by the Code and regulations thereunder. If the balance to the credit of a
Participant in a qualified plan is distributed within one taxable year to the
recipient ("qualified total distribution"), the payor is required to withhold
20% of the income portion of the distribution unless the transfer is made by the
closing plan trustee to the replacement trustee directly. If a qualified total
distribution is made from a qualified plan or a tax-sheltered annuity contract
on account of the Participant's death, the amount of withholding will reflect
the exclusion from federal income tax for employer-provided death benefits.
Payees are required by law to provide Security First Life (as payor) with their
correct taxpayer
8
<PAGE> 56
identification number ("TIN"). If the payee is an individual, the TIN is his or
her social security number. If the payee elects not to have federal income tax
withheld on an Annuity payment or a non-periodic distribution and a correct TIN
has not been provided, such election is ineffective, and such payment will be
subject to withholding as noted above.
Obtaining Tax Advice
It should be recognized that the federal income tax information in this
Statement of Additional Information is not exhaustive and is for information
purposes only. The description does not purport to cover all situations
involving the purchase of an Annuity or the election of an option under the
Contract. Tax results may vary depending upon individual situations and special
rules may apply in certain cases. State and local tax results may also vary. For
these reasons a qualified tax adviser should be consulted.
DISTRIBUTION OF THE CONTRACTS
The Contracts will be sold as a continuous offering by individuals who are
appropriately licensed as insurance agents of Security First Life for the sale
of life insurance and variable annuity contracts in the state where the sale is
made. Commissions on sales of contracts by such agents are paid from the General
Account of Security First Life and bear no direct relationship to any of the
charges under the Contracts. In addition, these individuals will be registered
representatives of the principal underwriter, Security First Financial, Inc., or
of other broker-dealers registered under the Securities Exchange Act of 1934
whose registered representatives are authorized by applicable law to sell
variable annuity contracts issued by Security First Life. It is expected that
the Contracts will be sold in all jurisdictions where Security First Life is
licensed to do business and where it has the requisite variable contract
authority. No direct underwriting commissions are paid to Security First
Financial, Inc.
VOTING RIGHTS
Unless otherwise restricted by the plan under which a Contract is issued, each
Participant will have the right to instruct Security First Life with respect to
voting the Fund shares which are the assets underlying his interest in the
Separate Account, at all shareholders meetings. An Annuitant's voting power with
respect to Fund shares held by the Separate Account declines during the time he
is receiving a Variable Annuity based on the investment performance of the
Separate Account, because amounts attributable to his interest are being
transferred annually to the General Account to provide the variable payments.
SAFEKEEPING OF SECURITIES
All assets of the Separate Account are held for safekeeping by Security First
Life. The assets of each Separate Account Series will be kept physically
segregated by Security First Life and held separate from the assets of any other
firm, person, or corporation. Additional protection for the assets of the
Separate Account is afforded by fidelity bonds covering all of Security First
Life's
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<PAGE> 57
officers and employees.
INDEPENDENT AUDITORS
The consolidated financial statements of Security First Life Insurance Company
at December 31, 1998 and the financial statements of Security First Life
Separate Account A were audited by Deloitte & Touche, independent auditors, as
set forth in their reports thereon appearing elsewhere herein, and are included
in reliance upon such reports given on their authority of such firm as experts
in accounts and auditing. The consolidated financial statements of Security
First Life Insurance Company at December 31, 1997 and 1996 and the 1997 and 1996
financial statements of Security First Life Separate Account A were audited by
Ernst & Young, LLP, independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such reports given
on their authority of such firm as experts in accounts and auditing.
LEGAL MATTERS
Legal matters concerning federal securities laws applicable to the issue and
sale of the Contracts have been passed upon by Sullivan & Worcester, LLP, 1025
Connecticut Avenue, N.W., Washington D.C. 20036. Subsequently such matters were
passed upon by Routier and Johnson, P.C., 1700 K Street, N.W., Suite 1003,
Washington, D.C. 20006 prior to January 31, 1998.
STATE REGULATION OF SECURITY FIRST LIFE
Security First Life is subject to the laws of the State of Delaware governing
insurance companies and to regulation by the Delaware Commissioner of Insurance.
An annual statement, in a prescribed form, is filed with the Commissioner on or
before March 1 each year covering the operations of Security First Life for the
preceding year and its financial condition on December 31 of such year. Security
First Life's books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is usually conducted by the National Association of Insurance
Commissioners at least once in every three years. Security First Life was last
examined as of December 31, 1993. While Delaware insurance law prescribes
permissible investments for Security First Life, it does not prescribe
permissible investments for the Separate Account, nor does it involve
supervision of the investment management or policy of Security First Life.
In addition, Security First Life is subject to the insurance laws and
regulations of other jurisdictions in which it is licensed to operate. State
insurance laws generally provide regulations for the licensing of insurers and
their agents, govern the financial affairs of insurers, require approval of
policy forms, impose reserve requirements and require filing of an annual
statement. Generally, the insurance departments of these other jurisdictions
apply the laws of Delaware in determining permissible investments for Security
First Life.
FINANCIAL STATEMENTS
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<PAGE> 58
The financial statements of Security First Life included herein should be
considered only as bearing upon the ability of Security First Life to meet its
obligations under the Contracts. The financial statements of the Separate
Account are also included in this Statement of Additional Information.
11
<PAGE> 59
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements contained herein
(1) Security First Life Separate Account A
Part A - Condensed Financial Information
Part B - Statement of Assets and Liabilities, Statement of
Operations, Statement of Changes in Net Assets,
Statement of Investments
(2) Security First Life Insurance Company
Part B - Depositor's financial statements with notes
(b) Exhibits
(10) Consent of Independent Auditors
(13) Organizational Chart
All previously filed Exhibits to Security First Life Separate Account A
registration statement and all post-effective amendments thereto are
specifically incorporated herein by reference.
Item 25. Directors and Officers of the Depositor
The officers and directors of Security First Life Insurance Company are listed
below. Their principal business address is 11365 West Olympic Boulevard, Los
Angeles, California 90064.
<TABLE>
<CAPTION>
Name Position and Offices with Depositor
- ---- -----------------------------------
<S> <C>
David A. Levene Chairman of the Board and Director
John K. Bruins Director
Steven T. Cates Director
Terence Lennon Director
Gail A. Praslick Director
Joseph A. Reali Director
Anthony J. Williamson Director
Richard C. Pearson Director, President and General Counsel
Howard H. Kayton Executive Vice President and Chief
Actuary
Brian J. Finneran Senior Vice President
Jane F. Eagle Senior Vice President and Chief
Financial Officer
Peter R. Jones Senior Vice President
Cheryl M. MacGregor Senior Vice President
Alex H. Masson Senior Vice President
Anthony J. Williamson Senior Vice President, Chief Investment
Officer
George R. Bateman Vice President
</TABLE>
<PAGE> 60
<TABLE>
<CAPTION>
Name Position and Offices with Depositor
- ---- -----------------------------------
<S> <C>
James C. Turner Vice President
Leo Brown Assistant Vice President
Steven J. Brash Assistant Vice President
Ronald Mare Assistant Vice President
Cheryl J. Finney Associate General Counsel, Vice
President, and Assistant Secretary
Patrizia DiMolfetta Controller
James Bossert Assistant Controller
George J. Olah Treasurer
Louis Ragusa Secretary
Richard G. Mandel Assistant Secretary
Eugene A. Capobianco Assistant Vice President
Joseph A. Zdeb Assistant Vice President
Thomas V. Reedy Assistant Vice President
Ataollah Azarshahi Assistant Vice President
Harold B. Leff Assistant Vice President
Robert E. Dehais Assistant Vice President
</TABLE>
Item 26. Persons Controlled by or under Common Control with Depositor of
Registrant
The Registrant is a Separate Account of Security First Life Insurance Company
("depositor"). For a complete listing and diagram of all persons directly or
indirectly controlled by or under common control with the depositor, see Exhibit
13.
Item 27. Number of Contractowners
As of __________, 1999 there were ____________ owners of the Contracts which are
the subject of this post-effective amendment.
Item 28. Indemnification
None
Item 29. Principal Underwriters
Security First Financial, Inc. is the principal underwriter for Security First
Life Separate Account A.
The following are the directors and officers of Security First Financial, Inc.
Their principal business address is 11365 West Olympic Boulevard, Los Angeles,
California 90064.
<TABLE>
Name Position with Underwriter
- ---- -------------------------
<S> <C>
Richard C. Pearson Director, President, and General Counsel
Jane Frances Eagle Director, Senior Vice President, Treasurer,
and Chief Financial Officer
Brian J. Finneran Senior Vice President
Peter R. Jones Senior Vice President
Howard H. Kayton Senior Vice President and Chief Actuary
</TABLE>
<PAGE> 61
<TABLE>
<S> <C>
James C. Turner Vice President and Assistant Secretary
Cheryl J. Finney Vice President and Assistant Secretary
*Gary A. Virnick Director of Compliance
</TABLE>
*not an officer
<PAGE> 62
<TABLE>
<CAPTION>
Net
Underwriting Compensation on
Name of Principal Discount and Redemption or Brokerage
Underwriter Commissions* Annuitization Commission Compensation
- ----------- ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C>
Security First None None None None
Financial, Inc.
</TABLE>
*Fee paid by Security First Life Insurance Company for serving as underwriter.
Item 30. Location of Accounts and Records
Security First Financial, Inc., underwriter for the registrant, is located at
11365 West Olympic Boulevard, Los Angeles, California 90064. It maintains those
accounts and records required to be maintained by it pursuant to Section 31(a)
of the Investment Company Act of 1940 and the rules promulgated thereunder.
Security First Life Insurance Company, the depositor for the registrant, is
located at 11365 West Olympic Boulevard, Los Angeles, California 90064. It
maintains those accounts and records required to be maintained by it pursuant to
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder and as custodian of the Registrant.
Security First Group, Inc. performs substantially all of the recordkeeping and
administrative services in connection with the Registrant. Security First Group,
Inc. is located at 11365 West Olympic Boulevard, Los Angeles, California 90064.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Registrant makes the following undertaking:
Security First Life represents that the fees and charges deducted under the
Contracts described herein this registration statement are, in the aggregate,
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by Security First.
<PAGE> 63
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it has duly caused this amended
Registration Statement to be signed on its behalf in the City of Los Angeles
and State of California on this 1st day of March, 1999.
SECURITY FIRST LIFE SEPARATE ACCOUNT A
(Registrant)
By SECURITY FIRST LIFE INSURANCE COMPANY
(Sponsor)
By /s/ Richard C. Pearson
------------------------------------
Richard C. Pearson, President
As required by the Securities Act of 1933, this amended Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard C. Pearson President, General Counsel, March 1, 1999
- ------------------------------ & Director
Richard C. Pearson, President
/s/ Jane F. Eagle Senior Vice President & March 1, 1999
- ------------------------------ Chief Financial Officer
Jane F. Eagle
David F. Levene* Director and March 1, 1999
- ------------------------------ Chairman of the Board
David F. Levene
John K. Bruins* Director March 1, 1999
- ------------------------------
John K. Bruins
Steven T. Cates* Director March 1, 1999
- ------------------------------
Steven T. Cates
Director __________, 1999
- ------------------------------
Joseph J. Jordan
</TABLE>
<PAGE> 64
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Terence I. Lennon* Director March 1, 1999
- ----------------------------
Terence I. Lennon
Gail A. Praslick* Director March 1, 1999
- ----------------------------
Gail A. Praslick
Joseph A. Reali* Director March 1, 1999
- ----------------------------
Joseph A. Reali
Anthony J. Williamson* Director March 1, 1999
- ----------------------------
Anthony J. Williamson
/s/ Richard C. Pearson
- ----------------------------
*(Richard C. Pearson as
Attorney-in-Fact for each
of the persons indicated)
</TABLE>
