<PAGE>
Registration No. 33-7723
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Post-Effective Amendment No. 11/ X /
---
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 11 /___/
--
Massachusetts Mutual Variable Annuity Separate Account 2
--------------------------------------------------------
(Exact Name of Registrant)
Massachusetts Mutual Life Insurance Company
-------------------------------------------
(Name of Depositor)
1295 State Street, Springfield, Massachusetts 01111
----------------------------------------------------
(Address of Depositor's Principal Executive Offices)
(413) 788-8411
Thomas F. English
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: May 1, 1996.
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485.
- -----
X on May 1, 1996 pursuant to paragraph (b) of Rule 485.
- -----
60 days after filing pursuant to paragraph (a) of Rule 485.
- -----
on (date) pursuant to paragraph (a) of Rule 485.
- -----
STATEMENT PURSUANT TO RULE 24f-2
The Registrant has registered an indefinite number or amount of its variable
annuity contracts under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ended December 31, 1995 was filed on or about February 22, 1996.
<PAGE>
CONTENTS OF POST-EFFECTIVE Amendment No. 11
TO THE REGISTRATION STATEMENT
This Amendment is comprised of the following:
The Facing Sheet.
The Cross Reference Sheet.
Part A, the Prospectus consisting of 21 pages.
Part B, the Statement of Additional Information consisting of 22 pages.
Part C, Other Information.
The Signatures.
Exhibit 3 (i)(a) Form of Distribution Agreement
Exhibit 3 (i)(b) Form of Co-Underwriting Agreement
Exhibit 10 Consent of Independent Accountants
Exhibit 13 Schedule of Computation of Performance
Exhibit 15 Powers of Attorney
Exhibit 27 Financial Data Schedule
<PAGE>
CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-4
N-4 Item Caption in Prospectus
- -------- ---------------------
1............................................... Cover Page
2............................................... Glossary
3............................................... Table of Fees and Expenses
4............................................... Condensed Financial
Information; Performance
Measures
5............................................... MassMutual, the Separate
Accounts and the Trust
6............................................... Contract Charges;
Distribution
7............................................... Miscellaneous Provisions;
An Explanation of the
Contracts; Reservation of
Rights; Contract Owner's
Voting Rights
8............................................... The Annuity (Pay-Out)
Period
9............................................... The Death Benefit
10.............................................. The Accumulation (Pay-In)
Period; Distribution
11.............................................. Right to Return Contract;
Redemption Privilege
12.............................................. Federal Tax Status
13.............................................. None
14.............................................. Additional Information
<PAGE>
Caption in Statement of
Additional Information
----------------------
15.............................................. Cover Page
16.............................................. Table of Contents
17.............................................. General Information
18.............................................. Service Arrangements and
Distribution
19.............................................. Service Arrangements and
Distribution
20.............................................. Service Arrangements and
Distribution
21.............................................. Performance Measures
22.............................................. Contract Value Calculations
23.............................................. Reports of Independent
Accountants and Financial
Statements
<PAGE>
PROSPECTUS
MAY 1, 1996
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
FLEX EXTRA
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
(FOR TAX QUALIFIED ARRANGEMENTS)
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 2
(FOR NON-TAX QUALIFIED ARRANGEMENTS)
This prospectus (the "Prospectus") describes two flexible purchase payment,
individual, multiple fund variable annuity contracts and two single purchase
payment, individual, multiple fund variable annuity contracts (the "Contracts")
issued by Massachusetts Mutual Life Insurance Company ("MassMutual").
These Contracts provide for the accumulation of contract values prior to
maturity and for the distribution of annuity benefits thereafter.
Purchase payments may be allocated among the Divisions of a Separate Account and
the Guaranteed Principal Account, which is part of MassMutual's general account.
Purchase payments allocated to a Division of a Separate Account will be invested
in a corresponding fund (a "Fund") of the MML Series Investment Fund (the "MML
Trust"), or the Oppenheimer Variable Account Funds (the "Oppenheimer Trust").
The annuity benefits can be either fixed or variable amounts or a combination of
both. The Contract value prior to maturity, except for amounts allocated to the
Guaranteed Principal Account ("GPA"), and the amount of any variable annuity
payments thereafter, will vary with the investment performance of the Funds
which You have selected. MassMutual serves as depositor for the Separate
Accounts.
The Prospectuses for the MML Trust and the Oppenheimer Trust, which are attached
to this Prospectus, describe the investment objectives and risks of investing in
the Funds: MML Equity Fund; MML Money Market Fund; MML Managed Bond Fund; MML
Blend Fund; Oppenheimer Capital Appreciation Fund; Oppenheimer Global Securities
Fund; and Oppenheimer Strategic Bond Fund.
This Prospectus provides the information about Separate Accounts 1 and 2 that a
prospective investor should know before investing. Certain additional
information about the Separate Accounts is contained in a Statement of
Additional Information dated May 1, 1996, which has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. The
Table of Contents for the Statement of Additional Information appears on page
21 of this prospectus. The Statement of Additional Information is
available upon written or oral request and without charge from the VA Service
Unit, C351, 1295 State Street, Springfield, Massachusetts 01111, (413) 788-8411.
THIS PROSPECTUS MUST BE ACCOMPANIED BY THE PROSPECTUSES FOR MML SERIES
INVESTMENT FUND AND OPPENHEIMER VARIABLE ACCOUNT FUNDS, WHICH ARE ATTACHED
HERETO.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED FOR SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
(413) 788-8411
The effective date of this prospectus is May 1, 1996.
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents
Page
----
<S> <C>
Special Terms......................................................... 4
Special Information................................................... 4
Table of Fees and Expenses............................................ 5
Condensed Financial Information....................................... 7
MassMutual, OppenheimerFunds, Inc., the Separate Accounts,
and The Trusts........................................................ 8
- MassMutual......................................................... 8
- OppenheimerFunds, Inc.............................................. 8
- The Separate Accounts.............................................. 8
- The Trusts......................................................... 8
- Investments and Objectives....................................... 9
- Possible Conflicts............................................... 9
An Explanation of the Contracts....................................... 10
- General............................................................ 10
- The Accumulation (Pay-In) Period................................... 10
- How Contracts May Be Purchased................................... 10
- Initial Purchase................................................. 11
- Subsequent Purchases............................................. 11
- Wire Transfers................................................... 11
- Allocation of Purchase Payments.................................. 11
- Transfers Among Divisions and the Guaranteed Principal Account... 11
- Automatic Transfers.............................................. 12
- Right to Return Contracts........................................ 12
- The Death Benefit................................................ 12
- The Annuity (Pay-Out) Period....................................... 12
- Annuity Benefits................................................. 12
- Fixed Annuity.................................................... 12
- Variable Monthly Annuity......................................... 12
- Payment Options.................................................. 13
- Fixed Time Payment Option........................................ 13
- Life Income Payments............................................. 13
- Joint and Survivor Life Income Payments.......................... 13
- Joint and Survivor Life Income Payments (Two Thirds to the
Survivor)....................................................... 13
- Payments After Death of Variable Annuitant....................... 13
- Special Limitations.............................................. 13
- Redemption Privilege............................................... 13
- Automatic Partial Redemptions.................................... 14
- Tax Sheltered Annuity Redemption Restrictions.................... 14
- Election of Right to Make Loans for TSAs......................... 14
Charges and Deductions................................................ 14
- Asset Charge..................................................... 14
- Administrative Charge............................................ 15
- Sales Charge..................................................... 15
- Premium Taxes.................................................... 17
The Guaranteed Principal Account...................................... 17
Distribution.......................................................... 17
Miscellaneous Provisions.............................................. 17
- Termination of Liability......................................... 17
- Adjustment of Units and Unit Values.............................. 17
- Periodic Statements.............................................. 17
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Contract Owner's Voting Rights........................................ 17
Reservation of Rights................................................. 18
Federal Tax Status.................................................... 18
- Introduction..................................................... 18
- Tax Status of MassMutual......................................... 18
- Taxation of Contracts In General................................. 18
- Penalty Taxes.................................................... 19
- Annuity Distribution Rules of Section 72(s)...................... 19
- Tax Withholding.................................................. 19
- Tax Reporting.................................................... 19
- Taxation of Qualified Plans, TSAs and IRAs....................... 20
Performance Measures.................................................. 20
- Standardized Average Annual Total Return......................... 20
- Additional Performance Measures.................................. 20
Additional Information................................................ 21
</TABLE>
3
<PAGE>
Special Terms
As used in this Prospectus, the following terms mean:
You or Your refers to the Contract Owner.
Accumulated Value: The value of a Contract on or prior to the maturity date
equal to:
(1) the value of the Accumulation Units credited to a Contract in each Division
of a Separate Account, plus
(2) the value of amounts credited to a Contract in the Guaranteed Principal
Account.
Accumulation Unit: A unit of measurement used in determining the value of
amounts credited to a Contract in a Division of a Separate Account on or prior
to the Contract maturity date.
Annuitant: The person on whose life the Contract is issued.
Annuity Unit: A unit of measurement used in determining the amount of each
Variable Monthly Annuity payment.
Contract Owner: The owner of a Contract. The Contract Owner could be the
Annuitant, an employer, a trust, a custodian or any entity specified in an
employee benefit plan. However, if the Contract is issued for use in
arrangements other than retirement plans which qualify for special federal tax
treatment, the Contract Owner may only be the annuitant, a custodian for a minor
annuitant under the Uniform Gifts (or Transfers) to Minors Act, or a
non-individual third party. If the Contract is issued under Section 403(b),
Section 408(b) or Section 408(k) of the Internal Revenue Code, the Contract
Owner must be the Annuitant.
Contract Year: A period of 12 months starting on the effective date of Your
Contract and on each anniversary of the effective date.
Division: A sub-account of a Separate Account, the assets of which consist of
shares of a specified Fund.
Fixed Annuity: A benefit providing for periodic payments of a fixed-dollar
amount throughout the annuity period. The benefit does not vary with or reflect
the investment performance of any Division of a Separate Account.
Funds: The separate series of shares of MML Series Investment Fund, and the
Oppenheimer Variable Account Funds, each of which are open-end, diversified
management investment companies in which the Divisions of the Separate Accounts
invest and any other investment companies in which Divisions may invest.
Home Office: Massachusetts Mutual Life Insurance Company, 1295 State Street,
Springfield, MA 01111.
Guaranteed Principal Account ("GPA"): A part of MassMutual's general account
which credits interest at a rate declared periodically in advance but not less
than 3 1/2% per year.
Maturity Date: The date designated by the Contract Owner as of which Variable
Monthly Annuity payments (or, if elected, Fixed Annuity payments or a payment in
one sum) will begin.
Purchase Payment: An amount paid to MassMutual by or on behalf of the Annuitant.
Valuation Date: Every day on which the net asset value of the shares of any of
the Funds is determined.
Valuation Period: The period, consisting of one or more days, from one Valuation
Time to the next Valuation Time.
Valuation Time: The time of the close of the New York Stock Exchange on a
Valuation Date. All actions which are to be performed on a Valuation Date will
be performed as of the Valuation Time.
Variable Monthly Annuity: A benefit providing for periodic payments which vary
with and reflect the investment performance of one or more Divisions of a
Separate Account.
Special Information
. The Contracts are subject to a contingent deferred sales charge at a maximum
rate of 8% of the amount redeemed or the Maturity Value, as well as certain
other charges more fully described under CHARGES AND DEDUCTIONS on page
14.
. Certain distributions under the Contracts may be subject to a penalty tax of
10% of the amount of the distribution that is includable in gross income as
described in the FEDERAL TAX STATUS section on page 18.
. Partial or full redemption of a Contract may require MassMutual to withhold
20% of the amount redeemed as more fully described in the Taxation of Qualified
Plans, TSAs and IRAs section on page 19.
. The Contracts entitle the purchaser to a 10-day revocation right, as more
fully described under Right to Return Contracts on page 12.
4
<PAGE>
Table Of Fees And Expenses
SINGLE PURCHASE PAYMENT CONTRACT
<TABLE>
<CAPTION>
Contract Owner Transaction Expenses
- -----------------------------------
<S> <C>
Sales Load Imposed on Purchases...................................................... None
Deferred Sales Load (as a percentage of amount redeemed)............................. 5%, 4%, 3%, 2%, 1% for Contract Years 1-5
respectively and 0% thereafter*
Transfer Fee......................................................................... None
Annual Administrative Charge......................................................... $30
- ----------------------------
Separate Account Annual Expenses (as a percentage of average account values)
- ---------------------------------------------------------------------------
Mortality and Expense Risk Fee.................................................. 1.15%
Account Fees and Expenses....................................................... 0.15%
----
Total........................................................................... 1.30%
Investment Fund Annual Expenses (as a percentage of Fund average net assets)**
- ---------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees............ 0.40% 0.50% 0.49% 0.37% 0.74% 0.74% 0.75%
Other Expenses............. 0.01% 0.04% 0.03% 0.01% 0.04% 0.15% 0.10%
Total...................... 0.41% 0.54% 0.52% 0.38% 0.78% 0.89% 0.85%
</TABLE>
Example
You would pay the following cumulative expenses on a $1,000 investment assuming
a 5% annual return on assets:
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
If Your Contract is
redeemed at end of year:***
1.......................... $ 64 $ 66 $ 65 $ 64 $ 68 $ 69 $ 69
3.......................... 85 89 88 84 96 99 98
5.......................... 106 113 112 104 125 130 128
10......................... 207 221 219 204 246 257 253
If Your Contract is
not redeemed at end of year:***
1.......................... 18 19 19 18 22 23 22
3.......................... 55 59 59 54 67 70 69
5.......................... 95 102 101 94 114 120 118
10......................... 207 221 219 204 246 257 253
</TABLE>
*Sales charges are subject to certain limitations. On the first redemption
in each Contract Year no Sales Charge will be deducted on an amount up to 10% of
the accumulated value. See CHARGES AND DEDUCTIONS - SALES CHARGE for further
information.
**The expenses listed are for the year ended December 31, 1995.
***The figures shown include a portion of the $30 Annual Administrative Charge,
pro-rated for a Contract with $60,000 in Accumulated Value. Expenses You would
bear if the Contract were annuitized will be the same as either the "redeemed"
or "not redeemed" Contract expenses shown in the Examples above, depending upon
the particular situations outlined in the CHARGES AND DEDUCTIONS - SALES CHARGE
section of the Prospectus.
The purpose of the table set forth above is to assist You in understanding the
various costs and expenses that Contract Owners bear directly or indirectly. The
table is based on estimated amounts for the most recent fiscal year and reflects
expenses of the Separate Account as well as MML Series Investment Fund and
Oppenheimer Variable Account Funds (see CHARGES AND DEDUCTIONS in the Prospectus
and INVESTMENT MANAGER in the MML Series Prospectus). The table does not include
any premium tax expenses which may apply. Premium taxes currently range up to
3.5% of premiums paid (see CHARGES AND DEDUCTIONS - PREMIUM TAXES).
The above examples should not be considered representative of past or future
expenses; actual expenses may be greater or less than those shown.
5
<PAGE>
Table Of Fees And Expenses
FLEXIBLE PURCHASE PAYMENT CONTRACT
<TABLE>
<CAPTION>
Contract Owner Transaction Expenses
- -----------------------------------
<S> <C>
Sales Load Imposed on Purchases................................................... None
Deferred Sales Load (as a percentage of amount redeemed).......................... 8%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1% for
Contract Years 1-9 respectively and 0%
thereafter*
Transfer Fee...................................................................... None
Annual Administrative Charge...................................................... $35
- ----------------------------
Separate Account Annual Expenses (as a percentage of average account values)
- ---------------------------------------------------------------------------
Mortality and Expense Risk Fee............................................... 1.15%
Account Fees and Expenses.................................................... 0.15%
----
Total........................................................................ 1.30%
</TABLE>
Investment Fund Annual Expenses (as a percentage of Fund average net assets)**
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees............. 0.40% 0.50% 0.49% 0.37% 0.74% 0.74% 0.75%
Other Expenses.............. 0.01% 0.04% 0.03% 0.01% 0.04% 0.15% 0.10%
Total....................... 0.41% 0.54% 0.52% 0.38% 0.78% 0.89% 0.85%
</TABLE>
Example
You would pay the following cumulative expenses on a $1,000 investment assuming
a 5% annual return on assets:
If Your Contract is redeemed at end of year:***
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
1.......................... $ 94 $ 95 $ 95 $ 94 $ 97 $ 98 $ 98
3.......................... 130 133 133 129 140 143 142
5.......................... 157 163 162 156 174 180 178
10......................... 225 239 237 222 264 275 271
If Your Contract is not
redeemed at end of year:***
1.......................... 20 21 21 19 23 24 24
3.......................... 61 65 64 60 72 75 74
5.......................... 104 111 110 103 123 129 127
10......................... 225 239 237 222 264 275 271
</TABLE>
*Sales charges are subject to certain limitations. On the first redemption
in each Contract Year no Sales Charge will be deducted on an amount up to 10% of
the accumulated value. See CHARGES AND DEDUCTIONS - SALES CHARGE for further
information.
**The expenses listed are for the year ended December 31, 1995.
***The figures shown include a portion of the $35 Annual Administrative Charge,
pro-rated for a Contract with $15,909 in Accumulated Value. Expenses You would
bear if the Contract were annuitized will be the same as either the "redeemed"
or "not redeemed" Contract expenses shown in the Examples above, depending upon
the particular situations outlined in the CHARGES AND DEDUCTIONS - SALES CHARGE
section of the Prospectus.
The purpose of the table set forth above is to assist You in understanding the
various costs and expenses that Contract Owners bear directly or indirectly. The
table is based on estimated amounts for the most recent fiscal year and reflects
expenses of the Separate Account as well as MML Series Investment Fund and
Oppenheimer Variable Account Funds (see CHARGES AND DEDUCTIONS in the Prospectus
and INVESTMENT MANAGER in the MML Series Prospectus). The table does not include
any premium tax expenses which may apply. Premium taxes currently range up to
3.5% of premiums paid (see CHARGES AND DEDUCTIONS - PREMIUM TAXES).
The above examples should not be considered representative of past or future
expenses; actual expenses may be greater or less than those shown.
6
<PAGE>
Condensed Financial Information
ACCUMULATION UNIT VALUES (AUDITED)
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Massachusetts Mutual Variable Annuity Equity Market Bond Blend
Separate Account 1 - Flex Extra (Qualified) Division Division Division Division
Accumulation Unit Values -------- -------- -------- --------
<S> <C> <C> <C> <C>
December 31, 1995................ $2.45 $1.47 $1.96 $2.25
December 31, 1994................ $1.89 $1.41 $1.67 $1.85
December 31, 1993................ $1.84 $1.37 $1.75 $1.83
December 31, 1992................ $1.70 $1.35 $1.59 $1.69
December 31, 1991................ $1.56 $1.33 $1.50 $1.56
December 31, 1990................ $1.26 $1.27 $1.30 $1.28
December 31, 1989................ $1.28 $1.19 $1.22 $1.26
December 31, 1988................ $1.05 $1.10 $1.09 $1.06
December 31, 1987................ $0.92 $1.04 $1.03 $0.95
April 27, 1987*.................. $1.00 $1.00 $1.00 $1.00
Number of Accumulation
Units Outstanding December 31, 1995.............. 323,311,630 41,803,874 49,720,989 546,216,626
December 31, 1994.............. 274,538,937 34,934,809 44,101,201 516,939,760
December 31, 1993.............. 226,395,300 27,346,264 46,476,619 459,927,890
December 31, 1992.............. 167,299,926 30,143,450 32,608,913 366,588,916
December 31, 1991.............. 119,606,024 30,802,372 23,155,232 291,461,762
December 31, 1990.............. 86,652,182 28,833,250 13,552,756 233,186,010
December 31, 1989.............. 63,973,864 18,921,173 11,056,959 183,241,336
December 31, 1988.............. 43,673,023 14,579,716 7,121,006 135,808,617
December 31, 1987.............. 14,857,250 3,152,811 1,635,713 43,923,410
<CAPTION>
MML MML
MML Money Managed MML
Massachusetts Mutual Variable Annuity Equity Market Bond Blend
Separate Account 2 - Flex Extra (Non-Qualified) Division Division Division Division
Accumulation Unit Values -------- -------- -------- --------
<S> <C> <C> <C> <C>
December 31, 1995.............. $2.45 $1.47 $1.96 $2.25
December 31, 1994.............. $1.89 $1.41 $1.67 $1.85
December 31, 1993.............. $1.84 $1.37 $1.75 $1.83
December 31, 1992.............. $1.70 $1.35 $1.59 $1.69
December 31, 1991.............. $1.56 $1.33 $1.50 $1.56
December 31, 1990.............. $1.26 $1.27 $1.30 $1.28
December 31, 1989.............. $1.28 $1.19 $1.22 $1.26
December 31, 1988.............. $1.05 $1.10 $1.09 $1.06
December 31, 1987.............. $0.92 $1.04 $1.03 $0.95
April 27, 1987*................ $1.00 $1.00 $1.00 $1.00
Number of Accumulation
Units Outstanding December 31, 1995.............. 82,979,376 14,727,577 18,010,100 131,775,179
December 31, 1994.............. 66,002,110 10,382,571 14,779,667 120,091,837
December 31, 1993.............. 53,470,696 6,200,284 13,569,146 103,639,596
December 31, 1992.............. 36,953,003 6,801,988 8,584,172 73,543,842
December 31, 1991.............. 24,025,061 6,283,056 5,488,369 50,732,821
December 31, 1990.............. 14,021,402 7,585,350 2,563,303 35,967,762
December 31, 1989.............. 8,500,208 2,803,156 1,737,144 28,308,970
December 31, 1988.............. 5,828,761 1,505,726 1,003,419 22,798,777
December 31, 1987.............. 3,765,522 775,041 122,240 10,586,164
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Global Strategic
Massachusetts Mutual Variable Annuity Appreciation Securities Bond
Separate Account 1 -Flex Extra (Qualified) Division Division Division
Accumulation Unit Values -------- -------- --------
<S> <C> <C> <C>
December 31, 1995.............. $1.32 $0.91 $1.12
December 31, 1994.............. $1.01 $0.90 $0.98
September 12, 1994............. $1.00 $1.00 $1.00
Number of Accumulation
Units Outstanding December 31, 1995.............. 49,284,518 59,946,410 16,545,444
December 31, 1994.............. 10,580,565 19,122,038 3,515,388
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Global Strategic
Massachusetts Mutual Variable Annuity Appreciation Securities Bond
Separate Account 2 - Flex Extra (Non-Qualified) Division Division Division
Accumulation Unit Values -------- -------- ---------
<S> <C> <C> <C>
December 31, 1995.............. $1.32 $0.91 $1.12
December 31, 1994.............. $1.01 $0.90 $0.98
September 12, 1994............. $1.00 $1.00 $1.00
Number of Accumulation
Units Outstanding December 31, 1995.............. 15,969,333 20,647,408 11,113,034
December 31, 1994.............. 4,250,795 6,903,141 1,621,487
</TABLE>
- --------------
* Commencement of Public Offerings.
7
<PAGE>
MassMutual, OppenheimerFunds, Inc., The Separate Accounts
and The Trusts
MassMutual
MassMutual is a mutual life insurance company chartered in 1851 under the laws
of Massachusetts. Its Home Office is located in Springfield, Massachusetts.
MassMutual is licensed to transact a life, accident and health insurance
business in all fifty states of the United States, the District of Columbia and
certain provinces of Canada.
On February 29, 1996, the merger of Connecticut Mutual Life Insurance Company
("Connecticut Mutual") with and into MassMutual was completed. The separate
existence of Connecticut Mutual has ceased. MassMutual continues its corporate
existence under its current name. The merger does not affect any provisions of,
or rights or obligations under, policies or contracts previously issued by
MassMutual. As a result of the merger, MassMutual has estimated statutory assets
in excess of $50 billion, and estimated total assets under management in excess
of $103 billion.
MassMutual's audited Financial Statements are contained in the
Statement of Additional Information.
OPPENHEIMERFUNDS, INC.
OppenheimerFunds, Inc. ("OFI") is an investment adviser organized under the laws
of Colorado as a corporation; it was initially organized in 1959. (Prior to
January 5, 1996, OFI was known as Oppenheimer Management Corporation.) It
(including a subsidiary) advises U.S. investment companies with assets
aggregating over $42 billion as of December 31, 1995, and with more than 2.8
million shareholder accounts. OFI is owned by Oppenheimer Acquisition
Corporation, a holding company owned in part by senior management of OFI and
ultimately controlled by MassMutual. OFI serves as investment adviser to the
Oppenheimer Variable Account Funds ("Oppenheimer Trust"). OFI is registered as
an investment adviser under the Investment Advisers Act of 1940.
The Separate Accounts
Massachusetts Mutual Variable Annuity Separate Account 1 ("Separate Account 1")
was established for qualified plans on April 8, 1981. Massachusetts Mutual
Variable Annuity Separate Account 2 ("Separate Account 2") was established for
non-qualified plans on October 14, 1981. Each is a separate account of
MassMutual registered with the Securities and Exchange Commission as a unit
investment trust.
Each Separate Account is divided into seven Divisions:
(1) The MML Equity Division - invests in shares of MML Equity Fund (the "Equity
Fund"),
(2) The MML Money Market Division - invests in shares of MML Money Market Fund
(the "Money Market Fund"),
(3) The MML Managed Bond Division - invests in shares of MML Managed Bond Fund
(the "Managed Bond Fund") and
(4) The MML Blend Division - invests in shares of MML Blend Fund (the "Blend
Fund").
(5) The Oppenheimer Capital Appreciation Division - invests in shares of
Oppenheimer Capital Appreciation Fund, a series of the Oppenheimer Trust;
(6) The Oppenheimer Global Securities Division - invests in shares of
Oppenheimer Global Securities Fund, a series of the Oppenheimer Trust; and
(7) The Oppenheimer Strategic Bond Division - invests in shares of Oppenheimer
Strategic Bond Fund, also a series of the Oppenheimer Trust.
The value of both Accumulation Units and Annuity Units in each Division reflects
the investment results of its underlying Fund.
Although the assets of each Separate Account are owned by MassMutual, assets of
each Separate Account equal to the reserves and other Contract liabilities,
which depend on the investment performance of the Separate Account, are not
chargeable with liabilities arising out of any other business MassMutual may
conduct. The income and capital gains and losses, realized or unrealized, of
each Division of a Separate Account are credited to or charged against such
Division, without regard to the income and capital gains and losses of the other
Divisions or other accounts of MassMutual. This state law provision has been
supported in several recent decisions in states reviewing this issue. All
obligations arising under the Contracts, however, are general corporate
obligations of MassMutual.
Audited Financial Statements of the Separate Accounts are contained in
the Statement of Additional Information.
THE TRUSTS
Each of the Trusts described below has separate assets and liabilities and a
separate net asset value per share. An investor's interest in a Separate Account
is limited to the Fund(s) in which shares are held. Since market risks are
inherent in all securities to varying degrees, assurance cannot be given that
the investment objective of any of the Funds will be met.
Audited Financial Statements for the MML Trust and for the Oppenheimer
Trust are contained in their respective Statements of Additional
Information.
Additional information concerning the investment objectives and policies of the
Funds can be found in the current prospectuses for the Trusts which are attached
to this prospectus and should be read carefully before making any decision
concerning allocation of premium payments.
The Separate Accounts purchase and redeem shares of the Funds at their net asset
value without the imposition of any sales or redemption charge. Distributions
made on the shares of each Fund held by a Division of a Separate Account are
immediately reinvested in shares of the Fund at net asset value,
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which shares are added to the assets of the appropriate Division of the Separate
Account.
The MML Trust
The MML Trust is an open-end, diversified management investment company
consisting of four separate series of shares (the "MML Funds"), each having its
own investment objectives and policies. MassMutual serves as investment manager
of MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund, and MML Blend
Fund. Accordingly, MassMutual is responsible for providing all necessary
investment advisery, management and administrative services needed by these
Funds pursuant to investment management agreements.
MassMutual has entered into investment sub-advisery agreements with Concert
Capital Management, Inc. ("Concert Capital"), a second tier, wholly-owned
subsidiary of MassMutual. These agreements provide that Concert Capital manages
the investment and reinvestment of the assets of MML Equity Fund and the assets
of the Equity Sector of the MML Blend Fund. Both MassMutual and Concert Capital
are registered as investment advisers under the Investment Advisers Act of 1940.
THE OPPENHEIMER TRUST
The Oppenheimer Trust is an open-end diversified management investment company
consisting of separate series of shares known as Funds. Each Fund has its own
investment objectives and policies. The Oppenheimer Divisions will invest in
corresponding shares of the Oppenheimer Trust.
Investments and Objectives:
(1) The MML Equity Fund.
The assets of the MML Equity Fund are invested primarily in common stocks and
other equity-type securities. The primary investment objective of the MML Equity
Fund is to achieve a superior total rate of return over an extended period of
time from both capital appreciation and current income. A secondary investment
objective is the preservation of capital when business and economic conditions
indicate that investing for defensive purposes is appropriate.
(2) The MML Money Market Fund.
The assets of the MML Money Market Fund are invested in short-term debt
instruments, including but not limited to commercial paper, certificates of
deposit, bankers' acceptances and obligations issued, sponsored or guaranteed by
the United States government, its agencies or instrumentalities. The investment
objectives of the MML Money Market Fund are to achieve high current income, the
preservation of capital, and liquidity.
(3) The MML Managed Bond Fund.
The assets of the MML Managed Bond Fund are invested primarily in publicly
issued, readily marketable, fixed income securities of such maturities as
MassMutual, as investment manager, deems appropriate from time to time in light
of market conditions and prospects. The investment objective of the MML Managed
Bond Fund is to achieve as high a total rate of return on an annual basis as is
considered consistent with the preservation of capital values.
(4) The MML Blend Fund.
The assets of the MML Blend Fund are invested in a portfolio of common stocks
and other equity-type securities, bonds and other debt securities with
maturities generally exceeding one year, and money market instruments and other
debt securities with maturities generally not exceeding one year. The investment
objective of the MML Blend Fund is to achieve as high a total rate of return
over an extended period of time, as is considered consistent with prudent
investment risk and the preservation of capital values.
(5) Oppenheimer Capital Appreciation.
Oppenheimer Capital Appreciation Fund seeks to achieve a capital appreciation by
investing in "growth-type" companies.
(6) Oppenheimer Global Securities Fund.
Oppenheimer Global Securities Fund seeks long-term capital appreciation by
investing a substantial portion of assets in securities of foreign issuers,
"growth-type" companies, cyclical industries, and special situations which are
considered to have appreciation possibilities. Current income is not an
objective. The Fund's investments may be considered to be speculative.
(7) Oppenheimer Strategic Bond Fund.
Oppenheimer Strategic Bond Fund seeks both a high level of current income
principally derived from interest on debt securities and to enhance such income
by writing covered call options on debt securities. The Fund invests
principally in: (i) foreign government and corporate debt securities; (ii) U.S.
Government securities; and (iii) lower-rated high yield debt securities. This
Fund's investments may be considered to be speculative.
A description of the MML Funds and the Oppenheimer Funds, their investment
objectives, policies and restrictions, their expenses, the risks attendant to
investment therein, and other aspects of their operations are contained in the
Prospectuses for MML Series Investment Fund and Oppenheimer Variable Accounts
Fund. An investor should carefully read these prospectuses before investing.
Possible Conflicts
Assets of variable life insurance separate accounts are also invested in the MML
Trust. It is possible that under this arrangement, conflicts could arise between
the interests of Contract Owners and owners of variable life insurance policies.
The Trustees of the MML Trust will follow monitoring procedures to determine
whether material conflicts have arisen.
If an irreconcilable material conflict exists, the assets of the variable life
insurance separate accounts may be invested solely in shares of mutual funds
which offer their shares exclusively to variable life insurance separate
accounts, unless the owners of the variable life insurance policies and the
variable annuity contracts vote otherwise.
The Oppenheimer Trust was established by OFI for use as an investment vehicle by
variable contract separate accounts such as the Separate Accounts. Since the
Oppenheimer Trust is used
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by other separate accounts, it is possible that a material irreconcilable
conflict may develop between the interests of Contract Owners and other separate
accounts investing in the Oppenheimer Trust. The Board of Trustees of the
Oppenheimer Trust (the "Board") will monitor the Oppenheimer Funds for the
existence of any such conflicts. If it is determined that a conflict exists, the
Board will notify MassMutual, and appropriate action will be taken to eliminate
such irreconcilable conflict. Such steps may include: (1) withdrawing the assets
allocable to some or all of the Separate Accounts from the particular
Oppenheimer Fund and reinvesting such assets in a different investment medium,
including (but not limited to) another Oppenheimer Fund; (2) submitting the
question of whether such segregation should be implemented to a vote of all
affected Contract Owners; and (3) establishing a new registered management
investment company or managed separate account.
For a discussion of other separate accounts investing in the MML Trust and
the Oppenheimer Trust and possible conflicts arising from such an arrangement,
see the Statement of Additional Information.
An Explanation Of The
Contracts
The principal provisions of the Contracts are described below. For additional
information, refer to the Contracts and to the Statement of Additional
Information. For a complete understanding of Your rights, You should also review
any applicable employee benefit plan documents.
General
The Contracts described herein are individual variable annuity contracts issued
by MassMutual. The flexible purchase payment Contracts and the single purchase
payment Contracts are the same except:
(1) different sales and administrative charges will apply (see CHARGES AND
DEDUCTIONS); and
(2) different minimum purchase payment amounts are required (see The
Accumulation (Pay-In) Period.)
Otherwise, the Contracts are identical, except for differences associated with
tax-qualified plans.
Contracts issued by Separate Account 1 are sold for use in the following
retirement plans. These plans qualify (with necessary endorsement) for special
federal tax treatment under the Internal Revenue Code of 1986, as amended (the
"Code"):
(1) pension and profit-sharing plans qualified under Section 401(a) or 403(a) of
the Code ("Qualified Plans"), which may also constitute participant-directed
individual account plans under Section 404(c) of ERISA;
(2) annuity purchase plans adopted by public school systems and certain
tax-exempt organizations pursuant to Section 403(b) of the Code ("Tax Sheltered
Annuities" or "TSAs");
(3) deferred compensation plans for state and local governments and tax-exempt
organizations established under the provisions of Section 457 of the Code; and
(4) Individual Retirement Annuities established in accordance with Section 408
of the Code ("IRAs"), including those established by employer contributions
under a Simplified Employee Pension Plan arrangement. At MassMutual's request,
the Internal Revenue Service has issued to MassMutual favorable opinion letters
approving specific versions of the Contract. IRA Contract Owners with these
Contracts will receive a copy of the favorable opinion letter. The Internal
Revenue Service approval is a determination only as to the form of the Contract
for use as an IRA and does not represent a determination of the merits of the
Contract as an IRA.
Under tax-qualified retirement plans, except Tax Sheltered Annuities and IRAs,
participants may not be the Contract Owners and, therefore, may have no Contract
Owners' rights. Under Section 457 deferred compensation plans, the state or
political subdivision or tax-exempt organization must be the Contract Owner. A
plan participant will have no secured interest in the Contract and must be a
general unsecured creditor of the state or political subdivision or tax-exempt
organization.
Contracts issued by Separate Account 2 are sold for use in arrangements other
than retirement plans which qualify for special federal tax treatment. They
may also be purchased by Charitable Remainder Trusts.
The following discussion applies to Contracts issued by both Separate
Accounts unless otherwise indicated:
Unless restricted by endorsement or the terms of the Contract, the Contract
Owner has all rights in the Contract prior to the maturity date, including the
right:
. to make a partial or full redemption of the Contract;
. to designate and change the beneficiaries who will receive the proceeds at the
death of the annuitant before the Maturity Date;
. to transfer amounts among the Divisions of a Separate Account and the
Guaranteed Principal Account; and
. to designate a payment option to begin on the Maturity Date.
Normally the Annuitant is the Contract Owner, unless the Contract was purchased
by an employer or a pension trust for use in a tax-qualified plan. Pension plans
may, under certain circumstances, obtain a Contract on the life of a substitute
Annuitant by executing an "Annuitant Exchange Rider."
The Accumulation (Pay-In) Period
How Contracts May Be Purchased. The minimum initial purchase payment for
flexible purchase payment Contracts is $600 divided by the number of
installments (not more than 12) which You expect to make each year. If You
intend to make only one purchase payment over the lifetime of the flexible
purchase payment Contract, however, Your minimum initial purchase payment must
be at least $2,000. After making Your initial payment under a flexible purchase
payment Contract, You may make as many or as few subsequent purchase payments of
at least $50 as You desire.
The purchase payment for single purchase payment Contracts must be at least
$25,000. The Contract permits MassMutual
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to establish a maximum on the total purchase payments which can be made under
any Contract. This maximum will not be less than $500,000.
Initial Purchase
You may place Your initial purchase payment, accompanied by a completed
Application, with Your registered representative.
Subsequent Purchases
You may make subsequent purchase payments by mailing Your check, clearly
indicating Your name and Contract number, to:
MASSMUTUAL VA
P.O. Box 92714
Chicago, IL 60675-2714
Wire Transfers
You may make purchase payments by instructing Your bank to wire funds to:
Chase Manhattan Bank, New York, New York
ABA #021000021
MassMutual Account #910-2-517290
Ref: VA Income Contract #
Name: (Contract Owner)
Allocation of Purchase Payments. You may direct that Your purchase payments
(after deducting any applicable premium taxes) be allocated among the Guaranteed
Principal Account ("GPA") and the Divisions of a Separate Account. Such
allocation will be effective as of the Valuation Date which is on or next
follows the date a written designation is received in good order at the Home
Office. Purchase payments allocated to a Division will be applied to purchase
Accumulation Units in that Division at its Accumulation Unit value on the date
of purchase. These Accumulation Units will be used in determining the value of
amounts held in a Division of a Separate Account credited to a Contract on or
prior to the maturity date. The value of the Accumulation Units in each Division
will vary with and will reflect the investment performance of that Division
(which in turn will reflect the investment performance and expenses of the Fund
in which the assets of that Division are invested), any applicable taxes, and
the applicable Asset Charge. A more detailed description of how the value of an
Accumulation Unit is calculated is contained in the Statement of Additional
Information.
The value of the Accumulation Units which You purchase is determined as of the
Valuation Time on the date on which MassMutual receives Your payment in good
order by mail at its Home Office or at a designated bank lock box, or by wire
transfer, provided that Your Contract application is complete. If the date of
receipt is not a Valuation Date, the value of the Accumulation Units purchased
will be determined as of the next Valuation Time after the date of receipt. If
an initial purchase payment is not applied to purchase Accumulation Units within
five business days after receipt (due to incomplete or ambiguous application
information, for example), the payment amount will be refunded unless specific
consent to retain the payment for a longer period is obtained from the
prospective purchaser.
Transfers Among Divisions and the Guaranteed Principal Account. You may transfer
funds among the Divisions and into the GPA without charge, prior to 30 days
before the Maturity Date. MassMutual reserves the right to limit transfers to
not more than one every 90 days. To make a transfer among the Divisions, You may
direct MassMutual to cancel all or part of the Accumulation Units in any
Division of a Separate Account and use the value thereof to acquire Accumulation
Units in any other Division of the same Separate Account. Any such acquisition
will be made at the value of an Accumulation Unit in that Division determined on
the date the transfer is effective. Such transfers will be effective as of the
Valuation Date which is on, or next follows, the date Your written direction is
received in good order at the Home Office.
MassMutual has available, an automated, toll-free telephone system enabling
certain Contract Owners (with authorization and amendment forms on file) to
perform transfers and to obtain information concerning Contract account values.
To elect this service, a Contract Owner must complete an authorization and
return it to MassMutual. Normal transfer restrictions apply. Contract Owners who
use this system are required to authorize MassMutual to complete any transfer
requested. MassMutual will not be liable for complying with any telephone
instructions it reasonably believes to be genuine, nor for any loss, damage,
cost or expense in acting on telephone instructions. MassMutual will employ
reasonable procedures to ensure the legitimacy of telephone transfer requests.
Such procedures may include, among others, requiring forms of personal
identification prior to acting upon telephone instructions, providing written
confirmation of such transactions to the Contract, and/or tape recording of
telephone transfer request instructions received from a Contract Owner. If we
fail to follow such procedures, we may be liable for losses due to unauthorized
or fraudulent instructions. The availability of the automated telephone
transfer system is also subject to state insurance department approval. This
service is not available to Contracts owned by custodians, guardians, or
trustees.
Transfers of amounts out of the GPA to the Divisions of a Separate Account are
limited to one each Contract Year. Annual transfers out of the GPA cannot exceed
25% of amounts in the GPA on the date the transfer is made. If 25% is taken from
the GPA for three consecutive years, however, the fourth consecutive annual
transfer may be for the entire amount in the GPA, provided that no payments or
transfers have been made into the GPA during the period. (If the Contract is a
TSA with a right to make loans, the maximum value of any transfer from the GPA
is the lesser of: 25% of the fixed value of the Contract on the date the
transfer is made; or the fixed value of the Contract on the date of the
transfer, less the amount of any outstanding Contract loan.)
MassMutual reserves the right to limit any transfer or partial redemption from
the GPA during any Contract Year to not more than 25% (including all previous
and concurrent partial redemptions and transfers from the GPA) of the amounts in
the GPA on the date that the first transfer or partial redemption from the GPA
is made during that Contract Year. MassMutual further reserves the right to
prohibit transfers from the GPA to the Money Market Division of a Separate
Account.
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You may not transfer amounts during the annuity (Pay-Out) phase or during the
period 30 days before the Maturity Date.
Automatic Transfers. MassMutual has four automatic transfer options including:
(i) dollar cost averaging; (ii) asset allocation; (iii) an interest sweep
option; and (iv) GPA liquidation. They are available any time before the
Maturity Date. Only one of the automatic transfer options may be in effect at a
time. All options are subject to the transfer rules discussed above. Although no
charge is currently anticipated for this service, MassMutual reserves the right
to impose a fee in the future.
Right to Return Contracts. You may return Your Contract to MassMutual any time
within 10 days (unless a longer period is required pursuant to applicable state
law) after the Contract has been delivered to You. If You exercise this right
and Your Contract is an IRA, You will receive the greater of:
(a) the Accumulated Value of the Contract plus any deductions for premium taxes
which have been made from purchase payments; or
(b) the amount of purchase payments made, less the net amount of any partial
redemptions (in Connecticut this amount will also apply for non-IRAs).
If You exercise this right and Your Contract is not an IRA, You will receive the
Accumulated Value of the Contract plus any premium tax deductions, except where
state law requires us to return the amount of purchase payment(s), less any
partial redemptions. For this purpose the Accumulated Value of the Contract will
be determined as of the Valuation Time on the date the Contract is received at
MassMutual's Home Office or at the next Valuation Time after receipt if the
Contract is received on other than a Valuation Date.
The Death Benefit. If the Annuitant dies prior to the Maturity Date, the
beneficiary named in the Contract will receive the greater of:
(a) the total of all purchase payments made to the Contract, less the amount of
all partial redemptions; or
(b) the Accumulated Value of the Contract, determined as of the Valuation Date
which is on or next follows the date on which due proof of death is received at
MassMutual's Home Office (and less, in either case, the amount of any applicable
premium tax and the amount of any outstanding Contract debt if the Contract is a
TSA).
The death benefit may be paid in one sum within seven days after receipt of due
proof of death and all other requirements have been received by MassMutual at
its Home Office. With MassMutual's consent, the death benefit may be applied
under one or more of the payment options provided by the Contract (see Payment
Options). No sales charge is imposed upon the death benefit.
A beneficiary who is the surviving spouse of the Owner of a Contract issued as
an IRA may elect to treat the Contract as if he or she were the Contract Owner.
The Annuity (Pay-Out) Period
Annuity Benefits. You may elect the Maturity Date of Your Contract. The Maturity
Date, however, may not be later than the Contract anniversary nearest the
Annuitant's 85th birthday. Where state law permits, the Maturity Date may be
deferred to age 90 if the Automatic Partial Redemption program is elected. In
states where available, the Maturity Date may be deferred to age 100 on
Contracts purchased by a Charitable Remainder Trust. In general, in order to
avoid adverse tax consequences, distributions, either by partial redemptions
or by maturing the Contract, from a Contract issued as an IRA, as a Tax
Sheltered Annuity or under a qualified plan should begin for the calendar year
in which the Annuitant reaches age 70 1/2. Distributions should be made
each year thereafter in an amount no less than the Accumulated Value of the
Contract at the end of the previous year, divided by the applicable life
expectancy (see Taxation of Qualified Plans, TSAs and IRAs for additional
information). You may elect to defer the Maturity Date to any permissible date
after the previously specified Maturity Date, provided that MassMutual receives
written notice within 90 days before the Maturity Date then in effect. You also
may elect to advance the Maturity Date to a date prior to the specified Maturity
Date or prior to any new Maturity Date You may have selected, provided that
written notice is received at MassMutual's Home Office at least 30 days before
the Maturity Date elected. For additional rules regarding TSAs, see Redemption
Privilege - Tax Sheltered Annuity Redemption Restrictions.
When Your Contract approaches its Maturity Date, You may choose to receive
either Fixed Annuity payments, (referred to as the "Fixed Income Option" in
Your Contract), Variable Monthly Annuity payments (referred to as the "Variable
Income Option" in Your Contract) or a combination of the two. You also may elect
to receive the Accumulated Value in one sum. A sales charge may be deducted from
the Accumulated Value of Your Contract in certain circumstances (see CHARGES AND
DEDUCTIONS). If applicable, a premium tax or any outstanding Contract debt may
also be deducted from the Accumulated Value (see CHARGES AND DEDUCTIONS -
PREMIUM TAXES and FEDERAL TAX STATUS - Taxation of Qualified Plans). If You have
made no election within a reasonable time after the maturity date, the Contract
will automatically pay a Variable Monthly Annuity under a life income option
with payments guaranteed for 10 years.
Fixed Annuity. If You select a Fixed Annuity, each annuity payment will be for a
fixed-dollar amount and will neither vary with nor reflect the investment
performance of a Separate Account or its Divisions. Refer to Your Contract for
further information regarding the Fixed Annuity and the payment options
thereunder.
Variable Monthly Annuity. If You select a Variable Monthly Annuity, amounts held
in the GPA which are to be used to provide Variable Monthly Annuity payments
will be credited to the Divisions of the Separate Account on a pro rata basis
unless the Contract Owner instructs MassMutual otherwise. Each annuity payment
will be based upon the value of the Annuity Units credited to Your Contract. The
number of Annuity Units in each Division to be credited to Your Contract is
based on the value of the Accumulation Units in that Division and the applicable
Purchase Rate. The Purchase Rate
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will differ according to the payment option You have elected and takes into
account the age of the Annuitant(s). The value of the Annuity Units will vary
with, and reflect the investment performance of, each Division to which Annuity
Units are credited, based on an Assumed Investment Rate of 4% per year. This
Rate is a fulcrum rate around which Variable Monthly Annuity payments will vary.
An actual net rate of return for a Division for the month greater than the
Assumed Investment Rate will increase Variable Monthly Annuity payments
attributable to that Division. An actual net rate of return for a Division for
the month less than the Assumed Investment Rate will decrease Variable Monthly
Annuity payments attributable to that Division.
For a more detailed description of how the value of an Annuity Unit and the
amount of Variable Monthly Annuity payments are calculated, see the Statement
of Additional Information.
Payment Options. You may elect either a Fixed or a Variable Monthly Annuity
payment option by submitting a written request in a form satisfactory to
MassMutual. MassMutual must receive this request at the Home Office prior to the
maturity date of the Contract. For a description of payment options available in
connection with Fixed Annuity benefits, refer to Your Contract. Below is a
description of Variable Monthly Annuity options which You may elect.
Variable Monthly Annuity payments may be received under several different
payment options. If the value of a Contract applied to any payment option is
less than $2,000 or produces an initial Variable Monthly Annuity payment of less
than $20, MassMutual may discharge its obligation by paying the value applied,
less any applicable Sales Charge, in one sum to the person entitled to receive
the first annuity payment.
Upon Your request, MassMutual will endorse a Contract to eliminate or restrict
any payment option in order that the plan pursuant to which the Contract is
issued remains qualified under the Code, provided such endorsement is not
otherwise contrary to law. MassMutual may make payment options available in
addition to those set forth in the Contract.
You may not change Your Variable Monthly Annuity payment option or transfer
amounts among the Divisions and the GPA after the Maturity Date (under the
fixed-time payment option, however, remaining unpaid Variable Monthly Annuity
payments may be withdrawn as described below).
Fixed Time Payment Option.
If You elect this option, Variable Monthly Annuity payments will be made for any
period selected, up to 30 years. If provided in the payment option election, You
may withdraw the full amount, subject to any applicable sales charge (see
CHARGES AND DEDUCTIONS), of the then present value of the remaining unpaid
Variable Monthly Annuity payments. The present value will be calculated using an
assumed investment rate of 4% per year unless a lower rate is required by state
law. A mortality risk charge continues to be assessed against Contract values
under this option (see CHARGES AND DEDUCTIONS) even though the Contract Owner
derives no further benefit from this risk charge since payments under this
option are not based upon the life expectancy of the Annuitant.
Life Income Payments.
If You elect this option, Variable Monthly Annuity payments will be
made during the lifetime of the Annuitant, either:
(1) without any guaranteed number of payments; or
(2) with a guaranteed number of payments on an "installment refund" basis; or
(3) with a guaranteed number of payments for 5 or 10 years.
Of these three alternatives, alternative (1) offers the maximum level of monthly
payments since there is no guarantee of a minimum number of payments or
provision for payments to the beneficiary upon the death of the Annuitant. Since
there is no such guarantee, however, it would be possible to receive only one
annuity payment if the Annuitant died prior to the due date of the second
annuity payment, two if he or she died before the third annuity payment date,
etc. Alternative (2) provides for a guaranteed number of payments for a term
equal to the nearest whole number of months determined by dividing the value
applied under a Contract by the dollar amount of the first Variable Monthly
Annuity payment.
Joint and Survivor Life Income Payments.
If You elect this option, Variable Monthly Annuity payments will be made during
the joint lifetime of the two Annuitants and thereafter during the lifetime of
the survivor, either:
(1) without a guaranteed number of payments; or
(2) with a guaranteed number of payments for 10 years.
Joint and Survivor Life Income Payments (Two-Thirds to the Survivor).
If You elect this option, Variable Monthly Annuity payments will be made during
the joint lifetime of the two Annuitants and, thereafter, at two-thirds the
prior rate during the lifetime of the survivor, in both cases without a
guaranteed number of payments.
Payments After Death of Variable Annuitant.
Generally, if a payment option with a guaranteed number of payments is elected,
and the Annuitant(s) should die before the guaranteed number of payments have
been completed, MassMutual will continue making the guaranteed payments to the
designated beneficiary.
Special Limitations.
Where the Contract is issued pursuant to a Tax Sheltered Annuity or as an IRA,
there are special limitations on the types of payment options which You may
elect.
Redemption Privilege
Subject to the special rules regarding tax sheltered annuities discussed below,
You may redeem all or part of the Accumulated Value of a Contract on or prior to
its Maturity Date if the Annuitant is alive. The amount of any partial
redemption, however, must be at least $100. Requests for a partial redemption
which would reduce the Accumulated Value of the Contract to less than $500 will
be treated as a request for a full
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redemption. You may incur a sales charge upon redemption. (See CHARGES AND
DEDUCTIONS on page 14) Any partial redemption will be paid in one sum. If the
entire Contract is redeemed, the cash redemption value may be paid in one sum or
applied under one or more of the payment options. You must designate the
Division(s) or the GPA from which any partial redemption is to be made. A
partial redemption from a Division will reduce the number of Accumulation Units
in that Division by an amount equal to the sum of the redemption payment plus
any sales charge, divided by the Accumulation Unit Value. (See PREMIUM TAXES for
information concerning a possible refund of premium tax.)
For flexible purchase payment Contracts, MassMutual reserves the right to limit
any partial redemption from the GPA during any Contract Year to not more than
25% of the amounts in the GPA on the date that the first transfer or partial
redemption from the GPA is made during the Contract Year. Included in the 25%
cap would be all previous partial redemptions and all previous and concurrent
transfers out of the GPA during that Contract Year.
The Accumulation Unit value on redemption is determined as of the Valuation Time
on the date on which the written request for redemption is received in good
order at MassMutual's Home Office or, if that date is not a Valuation Date, on
the next Valuation Date after receipt.
Redemption payments from a Separate Account will be made within seven days (or a
shorter period if required by law) after receipt of the necessary written
request at MassMutual's Home Office. The right of redemption, however, may be
suspended or payments postponed whenever:
(1) the New York Stock Exchange is closed, except for holidays and weekends;
(2) the Securities and Exchange Commission has determined that trading on the
New York Stock Exchange is restricted;
(3) the Securities and Exchange Commission permits suspension or postponement
and so orders; or
(4) an emergency exists, as defined by the Securities and Exchange Commission,
so that valuation of the assets of each Separate Account or disposal of
securities held by it is not reasonably practicable.
In addition, a purchase payment amount is not available to satisfy a
redemption request until the check, or other instrument by which the purchase
payment was made, has been honored.
Automatic Partial Redemptions. MassMutual has introduced, on a limited
basis, an automatic partial redemption program permitting certain Contract
Owners to elect to receive automatic partial redemptions on a periodic basis.
This systematic withdrawal program is available only during the accumulation
phase of the Contract. Amounts withdrawn may be includable in the gross income
of the Contract Owner in the year in which the withdrawal occurs. Additionally,
a 10% tax penalty may be applicable (as described more fully in the Penalty
Taxes section on page 19). Although no charge is currently imposed for
use of this service, we reserve the right to deduct a service fee, not to exceed
$3.00 from each scheduled redemption. Redemptions paid during each Contract Year
under the Automatic Partial Redemption program will be considered to be one
redemption for such Contract Year and if no prior redemption has occurred in the
Contract Year the 10% free corridor (as described more fully in the Sales Charge
section on page 15) will be applied on a cumulative basis for redemptions under
this program. (See CHARGES AND DEDUCTIONS - SALES CHARGE, pages 15-16).
Redemption payments may be subject to federal income tax and elective and/or
mandatory tax withholding. (See FEDERAL TAX STATUS).
Tax Sheltered Annuity Redemption Restrictions. The redemption of Internal
Revenue Code Section 403(b) annuities (Tax Sheltered Annuities, "TSAs") may be
restricted. Specifically, salary reduction contributions after 1988 and
post-1988 earnings on all salary reduction contributions may not be distributed
to the Annuitant until age 59 1/2, death, disability, or separation from
service with the TSA employer. Such salary reduction contributions may be
withdrawn, however, for "hardship". No redemptions may be made in connection
with a Contract issued pursuant to the Texas Optional Retirement Program for
faculty members of Texas public institutions of higher learning prior to the
Annuitant's termination of employment in all such institutions, retirement,
death or attainment of age 70 1/2.
For TSAs with the right to make a loan (see the following section), certain
further limitations apply to the redemption privilege. If a Contract Owner
wishes to redeem the entire Accumulated Value of such a TSA, any outstanding
Contract debt will be deducted from the redeemed amount. If the Contract Owner
redeems only part of the Accumulated Value, the Accumulated Value remaining in
the Contract after the redemption must not be less than the amount of any
outstanding Contract loan, interest on the loan for 12 months based on the loan
interest rate then in effect and any sales charges that would apply to such an
amount if redeemed. Amounts held in the GPA equal to the amount of any
outstanding Contract loan will not be available for partial redemption.
Election of Right to Make Loans for TSAs. If the Contract is a (non-ERISA and
non-Texas ORP) TSA, an elective right to make a loan may be available in certain
states. This loan right is structured so that the Contract will continue to
comply with Code requirements and thereby preserve its preferred tax status.
There are limitations on the amount available for a loan and there is a required
repayment schedule. Should the Contract Owner default in making scheduled
repayments, the outstanding Contract debt will be deemed a taxable distribution
and the Company may redeem sufficient Contract values to repay the Contract
debt, to the extent such redemptions are not restricted under the Code.
Charges And Deductions
The Separate Accounts do not bear any expenses other than the charges stated
below.
1. Asset Charge
MassMutual receives a daily-computed charge from the Separate Accounts for:
(1) assuming the risks that its estimates of longevity will be inadequate and
that its sales charge may be insufficient to cover
14
<PAGE>
the sales expenses associated with the Contracts; and (2) for other
administrative expenses.
This charge is currently equal to 1.30% on an annual basis of the net asset
value of the Separate Account assets attributable to the Contracts. The
mortality and expense risk part of this charge will be computed daily at an
annual rate which is currently equal to 1.15% and which will not exceed 1.25%
(.40% is for assuming mortality risks and .85% is for assuming expense risks) of
the net asset value of the Separate Account assets attributable to the
Contracts. The administrative expense part of this charge will be computed daily
at an annual rate of .15%. The total asset charge will not exceed 1.40%.
MassMutual, as the investment manager of each of the MML Series Funds, also
receives a quarterly fee from each MML Series Funds at the annual rate of .50%
of the first $100,000,000 of the Fund's average daily net asset value, .45% of
the next $200,000,000, .40% of the next $200,000,000 and .35% of any excess over
$500,000,000. These charges are described in greater detail in the attached
prospectus for the MML Series Fund. Similarly,OFI serves as investment adviser
for the Oppenheimer Funds. OFI receives a monthly management fee in its capacity
as investment adviser to the Oppenheimer Funds. This fee is computed separately
on the net assets of each Fund as of the close of each business day. Except as
stated below, the management fee rate is .75% of the first $200 million of net
assets, .72% of the next $200 million, .69% of the next $200 million, .66% of
the next $200 million and .60% of the net excess of $800 million. Strategic Bond
Fund's management fee rate is .75% on the first $200 million of net assets, .72%
on the next $200 million, .69% on the next $200 million, .66% on the next $200
million, .60% on the next $200 million, and .50% on the net assets in excess of
$1 billion.
2. Administrative Charge
In addition to that portion of the Asset Charge assigned to administrative
expenses, each year on the Contract anniversary date a charge is imposed against
each Contract to reimburse MassMutual for administrative expenses relating to
the issuance and maintenance of the Contract. The charge is currently $30 per
year on single purchase payment Contracts and $35 per year on flexible purchase
payment Contracts and will not be increased above $50 per year. This charge will
be deducted from the Divisions in the order listed in Your contract and then
from the GPA. The charge imposed against amounts in the GPA will not be greater
than 1% of the value of such amounts on the Contract anniversary date (before
the deduction of the charge).
The administration expenses portion of the Asset Charge and the annual
Administrative Charge have been set at a level that will recover no more than
the actual costs associated with administering the Contracts.
3. Sales Charge
Sales charges are not deducted from purchase payments. To reimburse MassMutual
for sales expenses for commissions, sales literature and related costs, a sales
charge may be imposed upon a full or partial redemption and upon the Accumulated
Value at the Maturity Date of the Contract.
The amount of any sales charge depends on when the Contract matures or is
redeemed (see table below). Though the sales
charge declines over time as a percentage of the amount redeemed or the
Accumulated Value of the Contract at maturity, the actual dollar amount may not
necessarily decline.
For flexible purchase payment Contracts, the sales charge will be:
. 8% of the amount redeemed or the Accumulated Value of the Contract at maturity
in the first two Contract Years,
. 7% in the third Contract Year;
. 6% in the fourth Contract Year;
. 5% in the fifth Contract Year;
. 4% in the sixth Contract Year;
. 3% in the seventh Contract Year;
. 2% in the eighth Contract Year; and
. 1% in the Ninth Contract Year.
Thereafter, there is no sales charge.
For single purchase payment Contracts, the sales charge will be:
. 5% of the amount redeemed or the Accumulated Value of the Contract at maturity
in the first Contract Year;
. 4% in the second Contract Year;
. 3% in the third Contract Year,
. 2% in the fourth Contract Year; and
. 1% in the fifth Contract Year.
Thereafter, there is no sales charge.
15
<PAGE>
Sales Charge
<TABLE>
<CAPTION>
Contract Year of
Redemption or Flexible Purchase Single Purchase
Maturity Payment Contracts Payment Contracts
----------------- -----------------
<S> <C> <C>
First Contract Year................ 8% 5%
Second Contract Year............... 8% 4%
Third Contract Year................ 7% 3%
Fourth Contract Year............... 6% 2%
Fifth Contract Year................ 5% 1%
Sixth Contract Year................ 4% No Charge
Seventh Contract Year.............. 3% No Charge
Eighth Contract Year............... 2% No Charge
Ninth Contract Year................ 1% No Charge
Tenth and Subsequent Years......... No Charge No Charge
</TABLE>
The amount deducted for sales charges at any time, plus any sales charges
previously deducted, will not be more than 8.5% of the total purchase payments
made to that time. Further, on the first redemption in each Contract Year, and
on maturity if no partial redemption has been made in that Contract Year, no
sales charge will be deducted on an amount up to 10% of the Accumulated Value of
the Contract on the date of redemption or maturity. Any unused portion of this
10% "free corridor" is noncumulative and therefore cannot be carried over to
any later redemption or maturity.
Subject to state availability, for any contract purchased by a Charitable
Remainder Trust, no sales charge will be imposed on redemptions in each Contract
Year equal to the greater of:
1. 10% of the accumulated value of the Contract on the date of the first
redemption in the Contract Year; or
2. Any amounts in excess of the net purchase payments made at that time.
No sales charge will be imposed upon a death benefit nor upon a full redemption
or maturity of the Contract if the annuitant is age 59 1/2 or older and the
entire redemption or Accumulated Value of the Contract is:
(1) applied under a fixed lifetime payment option;
(2) applied under a fixed annuity, fixed time payment option, with payments for
10 years or more;
(3) applied to purchase a single premium immediate life annuity issued by
MassMutual or by a MassMutual affiliate; or
(4) applied to purchase a single premium immediate annuity certain, with
payments guaranteed for 10 years or more, sold by MassMutual or by a MassMutual
affiliate.
No sales charge will be imposed upon a full redemption or maturity of the
Contract if all proceeds of the Contract are:
(1) applied under a variable lifetime payment option; or
(2) applied under a variable fixed-time payment option, with payments for 10
years or more.
No sales charge will be imposed on the redemption of the present value of
remaining unpaid payments under a variable fixed-time-payment option if a sales
charge was imposed at redemption or maturity. Additionally, until April 30,
1997, no sales charge will be imposed upon redemption of a Contract where
the proceeds of such redemption are applied to the purchase of certain
new MassMutual group annuity contracts. This does not eliminate
applicable charges under the particular group contract, and upon surrender of
the group contract, charges may apply.
No sales charge will be imposed on the redemption of "excess contributions" to a
plan qualifying for special income tax treatment ("Qualified Plan"), TSAs or
IRAs. "Excess contributions" (including excess aggregate contributions) will be
defined as provided in the Internal Revenue Code and applicable regulations.
If, at any time prior to maturity, the effective annual interest rate credited
to any Contract amount allocated to the GPA falls below the Specified Interest
Rate for a calendar quarter, the Contract may be fully redeemed or may mature
without any deduction for sales charges. New York State requires values to be in
the GPA in order to be redeemed under this provision. The Specified Interest
Rate is equivalent to the average discount rate on 91-day United States Treasury
bills during the preceding quarter, reduced by 1.40%. Within 10 days following
the date that the effective annual interest credited to the GPA falls below the
Specified Interest Rate, we will send a written notice to the Contract Owner
indicating that redemption or maturity without a sales charge can be elected
until 60 days after such notice is mailed.
Under Contracts purchased by exchanging a previously issued MassMutual variable
annuity contract which provides for a deferred sales charge, the Contract Year
for purposes of assessing a sales charge percentage upon a redemption or
maturity will be based on the effective date of the exchanged contract. A
deferred sales charge will not be assessed, however, against any Contract if the
Contract was purchased by exchanging a previously issued MassMutual variable
annuity contract under which sales charges were waived due to an earlier
exchange or which was subject to an initial sales charge. If a fixed annuity
contract which has no surrender charge and has more than 60 days prior to its
maturity date, is allowed to be exchanged to a single purchase payment Contract,
then the Contract which is issued will not be subject to a sales charge upon
redemption or maturity.
To the extent sales expenses are not covered by the sales charge, they will be
recovered from MassMutual surplus,
16
<PAGE>
which may include proceeds derived from the asset charge described above.
Any available waiver of sales charges will be applied on a non-discriminatory
basis.
4. Premium Taxes
Any applicable premium tax will be deducted from purchase payments when received
by MassMutual or at the time of surrender, death, maturity or annuitization,
depending on the rules for the Annuitant's state of residence. Premium taxes on
annuities currently range up to 3.5%. This charge may increase or decrease to
reflect either any change in the tax or any change of residence. You should
notify MassMutual of any change in residence. Any change in this charge would be
effective immediately. MassMutual does not expect to make a profit from this
charge.
Lump sum payments upon a full or partial redemption of a Contract, or upon
the death of the Annuitant prior to the maturity date of a Contract, may result
in a reduction in the amount of premium tax paid by MassMutual with respect to
that Contract. In such event, in addition to the dollar amount redeemed or
Accumulated Value of the Contract upon death, MassMutual will make payment of
the lesser of: (1) the amount by which its premium tax is reduced; or (2) the
amount previously deducted from purchase payments for the premium tax.
The Guaranteed Principal Account
Because of exemptive and exclusionary provisions contained in the federal
securities laws, interests in MassMutual's general account (which include
interests in the GPA) have not been registered under the Securities Act of 1933
and the general account has not been registered as an investment company under
the Investment Company Act of 1940. Accordingly, neither the general account nor
any interests therein are subject to the provisions of these Acts and MassMutual
has been advised that the staff of the Securities and Exchange Commission
(the "SEC") has not reviewed the disclosures in this Prospectus relating to
the general account. Disclosures regarding the general account may, however, be
subject to certain generally applicable provisions of the federal securities
laws relating to the accuracy and completeness of statements made in
prospectuses.
A Contract Owner may allocate or transfer all or part of the amount credited to
his or her Contract to the GPA. Such amounts shall become part of MassMutual's
general account assets. The allocation or transfer of amounts to the GPA does
not entitle a Contract Owner to share in the investment experience of those
assets. Instead, MassMutual guarantees that those amounts allocated to the GPA
will accrue interest daily at an effective annual rate of not less than 3.5%.
Although MassMutual is not obligated to credit interest at a rate higher than
3.5%, it may declare a higher rate applicable for such periods as it deems
appropriate. The crediting rate declared by MassMutual is an effective annual
rate. Upon request MassMutual will inform Contract Owners of the then applicable
rate.
For TSAs, MassMutual credits interest on loaned amounts held in the GPA at a
daily rate equivalent to the greater of an annual rate of 3.5% or the annual
loan interest rate in effect, less not more than 4%.
Distribution
Effective May 1, 1996, MML Distributors, LLC ("MML Distributors"), 1414
Main Street, Springfield, MA 01144-1013, is the principal underwriter of the
Contracts pursuant to an Underwriting and Servicing Agreement to which MML
Distributors, MassMutual and the Separate Account are parties. Prior to May 1,
1996, MML Investors Services, Inc. ("MMLISI"), also located at 1414 Main
Street, Springfield, MA 01144-1013, served as the principal underwriter of the
Contracts. Effective May 1, 1996, MMLISI serves as the co-underwriter of the
Contracts. Both MML Distributors and MMLISI are registered with the SEC as
broker-dealers under the Securities Exchange Act of 1934 and are members of the
National Association of Securities Dealers, Inc (the "NASD").
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the SEC and are members of the NASD ("selling
brokers"). Contracts are sold through agents who are licensed by state
insurance officials to sell the Contracts. These agents are also registered
representatives of selling brokers or of MMLISI.
MML distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota and Washington; and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio and West Virginia.
Miscellaneous Provisions
Termination of Liability. MassMutual's liability under a Contract terminates on
the death of the Annuitant(s) and on the completion of any guaranteed payments.
There is no liability for any proportionate monthly annuity payment from the
date of the last payment to the date of death.
Adjustment of Units and Unit Values. MassMutual reserves the right in its sole
discretion to split or consolidate the number of Accumulation Units or Annuity
Units for any Division and correspondingly decrease or increase the Accumulation
or Annuity Unit values for any Division whenever it deems such action to be
desirable. Any such adjustment will have no adverse effect on rights under the
Contracts.
Periodic Statements. While a Contract is in force prior to the Maturity Date and
before the death of the Annuitant, MassMutual will furnish to the Contract Owner
at least semiannually a status report showing the number of Accumulation Units
credited to each Division of the Contract, the corresponding Accumulation Unit
values, the value of amounts in the GPA and the Accumulated Value of the
Contract.
Contract Owner's Voting Rights
As long as a Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Contract Owner during the lifetime
of the Annuitant, or the beneficiary after the Annuitant's death, will be
entitled to give instructions as to how the shares of the Funds held in the
Separate Account (or other securities held in lieu of such
17
<PAGE>
shares) deemed attributable to the Contract should be voted at meetings of
shareholders of the Funds or the Trust. Those persons entitled to give voting
instructions will be determined as of the record date for the meeting.
The number of Fund shares held in a Separate Account deemed attributable to a
Contract prior to its Maturity Date and during the lifetime of the Annuitant
will be determined on the basis of the value of Accumulation Units credited to
the Contract in the corresponding Division of the Separate Account as of the
record date. After the Maturity Date or after the death of the Annuitant, the
number of Fund shares deemed attributable to the Contract will be based on the
liability for future Variable Monthly Annuity payments under the Contract as of
the record date and thus the voting rights will decrease as payments are made.
Contract Owners or beneficiaries will receive proxy material and a form with
which voting instructions may be given. Fund shares held by a Separate Account
as to which no effective instructions have been received or which are
attributable to assets transferred from MassMutual's general account will be
voted for or against any proposition in the same proportion as the shares as to
which instructions have been received.
In situations where the Annuitant is not the Contract Owner, the Annuitant will
have the right to instruct the Contract Owner with respect to the votes
attributable to any vested interest he has in the Contract. MassMutual's
obligation in this instance will be to make available to the Contract Owner
copies of the proxy material for distribution to the Annuitant. Votes
representing interests as to which the Contract Owner is not instructed may, in
turn, be voted by the Contract Owner in his discretion.
The Contract Owner is a member of MassMutual and is entitled to vote at all
meetings of the members of MassMutual.
Reservation Of Rights
MassMutual may, at any time, make any change in a Contract to the extent that
such change is required in order to make the Contract conform with any law or
regulation issued by any governmental agency to which MassMutual is subject. If
shares of any Fund should not be available or, if in the judgment of MassMutual,
investment in shares of a Fund is no longer appropriate in view of the purposes
of a Division of a Separate Account, shares of other series of the Trust or of
other registered, open-end investment companies may be substituted for such Fund
shares. Payments received after a date specified by MassMutual may be applied to
the purchase of shares of another Trust series or company in lieu of shares of
that Fund. In either event, approval of the Securities and Exchange Commission
must be obtained. MassMutual reserves the right to change the name of a Separate
Account or to add Divisions to a Separate Account for the purpose of investing
in additional investment vehicles.
Federal Tax Status
Introduction
The ultimate effect of federal income taxes on the value of the Contract, on
annuity payments, and on the economic benefit to the Contract Owner, Annuitant
or beneficiary depends on a variety of factors, including the type of retirement
plan for which the Contract is purchased and the tax and employment status of
the individual concerned. The discussion contained herein is general in nature
and is not intended as tax advice. Each person concerned should consult a
competent tax adviser for complete information and advice. No attempt is made to
consider any applicable state or other local tax laws. Moreover, the discussion
herein is based upon MassMutual's understanding of current federal income tax
laws as they are currently interpreted. No representation is made regarding the
likelihood of continuation of those current federal income tax laws or of the
current interpretations by the Internal Revenue Service (the "IRS").
Tax Status of MassMutual
Under existing federal law, no taxes are payable on investment income and
realized capital gains of the Separate Accounts credited to the Contracts.
Accordingly, MassMutual does not intend to make any charge to the Separate
Accounts to provide for company income taxes. MassMutual may, however, make such
a charge in the future if an unanticipated construction of current law or a
change in law results in a company tax liability attributable to the Separate
Accounts.
MassMutual may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, charges for such taxes attributable to the Separate Accounts may be
made.
Taxation of Contracts in
General
Under Section 817(h) of the Code, a Contract (other than one used in a
tax-qualified retirement plan) will not be treated as an annuity contract and
will be taxed on the annual increase in earnings, if, as of the end of any
quarter, the Funds or the Fund on which the Contract is based are not adequately
diversified in accordance with regulations prescribed by the Treasury
Department. The Funds anticipate complying with the diversification
requirements.
Subject to certain annuity distribution rules (see Annuity Distribution Rules of
Section 72(s)), annuity payments under the Contracts are taxable under Section
72 of the Code. For contributions made after February 28, 1986, a Contract Owner
that is not a natural person will be taxed on the annual increase in the
earnings of a Contract unless the Contract Owner holds the Contract as agent for
a natural person. Otherwise, increases in the value of a Contract are not
subject to tax until actually or constructively received.
Amounts received prior to the maturity date from Contracts under non-tax
qualified arrangements (see Taxation of Qualified Plans for a discussion of
Contracts used in the qualified plan market) are subject to tax to the extent of
any earnings
18
<PAGE>
or gains in the Contract. Amounts received which are in excess of such earnings
or gains are considered a return of capital. Similarly, amounts borrowed upon
assignment or pledge of the Contract will be treated as amounts received under
the Contract and will be taxable to the same extent. For Contracts entered into
after October 21, 1988, all annuity contracts issued by the same insurer and its
affiliates to the same Contract Owner within the same calendar year must be
aggregated in determining the amount of gain realized on a withdrawal from any
one.
If the Contract is obtained in a tax-free exchange of contracts under Section
1035 of the Code, different tax rules may apply. If a distribution prior to the
Maturity Date of a Contract obtained in such an exchange is entirely
attributable to investments in the surrendered contract prior to August 14,
1982, the distribution will first be considered a return of capital to the
extent of those investments. Only the amounts received in excess of those
investments will be regarded as taxable earnings or gains.
Penalty Taxes
In addition to the foregoing tax consequences, certain distributions under the
Contract will be subject to a penalty tax under Code Sections 72(q) (for non-tax
qualified Contracts) or 72(t) (for Contracts in tax qualified plans - see
Taxation of Qualified Plans, IRAs and TSAs) of 10% of the amount of the
distribution that is includable in gross income. However, the following
distributions from non-tax qualified Contracts are not subject to the penalty
tax:
(1) withdrawals made after the Contract Owner is 59 1/2 years old;
(2) payments made to a beneficiary (or to the estate of an Annuitant) on or
after the death of the Annuitant;
(3) payments attributable to a Contract Owner becoming disabled; or
(4) substantially equal periodic payments made (at least annually) for the
lifetime (or life expectancy) of the Contract Owner or for the joint lifetimes
(or joint life expectancies) of the Contract Owner and the beneficiary.
When monthly annuity payments commence, they are taxable as ordinary income in
the year of receipt to the extent that they exceed that portion of the
"investment in the Contract" which is allocable to that year. The investment in
the Contract will equal the gross amount of purchase payments made under the
Contract less any amount that was previously received under the Contract but was
not included in gross income. The investment in the Contract would also be
increased by any amount that was previously included in gross income under the
Contract but was not received. This amount, divided by the anticipated number of
monthly annuity payments, gives the "excludable amount", which is the portion
of each annuity payment considered to be a return of capital and, therefore, not
taxable. Under this exclusion ratio the total amount excluded from payments
actually received is limited to the investment in the Contract. The rules for
determining the excludable amount are contained in Section 72 of the Code and
regulations thereunder and require adjustment when the payment option elected
provides a feature such as a guaranteed number of payments.
Annuity Distribution Rules of
Section 72(s)
Annuity distribution requirements are imposed under Section 72(s) of the Code.
MassMutual understands that these requirements do not apply to Contracts issued
to or under Qualified Plans.
Under Section 72(s), a Contract will not be treated as an annuity subject to
Section 72 of the Code, unless it provides for certain required distributions
from and after the date of death of the Contract Owner. The Contracts will be
endorsed before issue to provide that annuity payments be made only in
accordance with these distribution requirements, as applicable.
Tax Withholding
Certain tax withholding is imposed on payments that are made under the Contracts
(for Contracts in tax qualified plans see - Taxation of Qualified Plans, IRAs
and TSAs). Withheld amounts do not constitute an additional tax but are fully
creditable on the individual tax return of each payee who is affected by tax
withholding. Furthermore, no payments will be subject to the withholding if
(1) it is reasonable to believe that the payments are not includable in gross
income, or
(2) the payee elects not to have withholding apply.
The payee may make such an election either by filing an election form with
MassMutual or, in the case of redemptions, by following procedures that
MassMutual has established to enable payees to elect out of withholding. These
forms and procedures will be provided to payees by MassMutual upon a request for
payment.
Unless the Payee elects not to have withholding apply (for Contracts in tax
qualified plans see - Taxation of Qualified Plans, IRAs and TSAs), MassMutual is
required to withhold, for federal income tax purposes, 10% of the taxable
portion of any redemption payment or non-periodic distribution under the
Contracts. Periodic annuity payments under the Contracts are subject to
withholding at the payee's wage base rate. If the payee of these annuity
payments does not file an appropriate withholding certificate (obtainable from
any local IRS office) with MassMutual, it will be presumed that the payee is
married claiming three exemptions.
Tax Reporting
MassMutual is required to report all taxable payments and distributions to the
IRS and to the payees. Payees will receive reports of taxable payments and
distributions by January 31 of the year following the year of payment.
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<PAGE>
Taxation of Qualified Plans,
TSAs and IRAs
The tax rules applicable to participants in retirement plans which qualify for
special federal income tax treatment ("Qualified Plans") vary according to the
type of plan and its terms and conditions.
Increases in the value of a Contract are not subject to tax until received by
the employee or his beneficiary. Monthly annuity payments under Qualified Plans
are taxed as described above (see Taxation of Contracts in General), except that
the "investment in the Contract" under a Qualified Plan is normally the gross
amount of purchase payment made by the employee under the Contract or made by
the employer on the employee's behalf and included in the employee's taxable
income when made.
If the Annuitant receives a distribution which qualifies as a "lump sum
distribution" under the Code, he or she may be eligible for special "5-year
averaging" treatment of the funds received (or "10-year averaging" treatment if
he or she was age 50 or older on January 1, 1986). TSAs and IRAs are not
eligible for the "lump sum distribution" rules.
Certain TSA contributions may not be distributed to the Annuitant until age
59 1/2 death, disability, separation of service or hardship (see Redemption
Privilege). Distributions from Qualified Plans, IRAs and TSAs may be subject to
a 10% penalty tax on amounts withdrawn before age 59 1/2. However, the
following distributions from Qualified Plans (and TSAs and IRAs except as
otherwise noted) are not subject to the penalty:
(1) payments made to a beneficiary (or estate of an Annuitant) on or after the
death of the Annuitant;
(2) payments attributable to an Annuitant becoming disabled;
(3) substantially equal periodic payments made (at least annually) for the
lifetime (or life expectancy) of the Annuitant or for the joint lifetimes (or
joint life expectancies) of the Annuitant and the beneficiary (for Qualified
Plans and TSAs, payments can only begin after the employee separates from
service);
(4) payment for certain medical expenses (not applicable to IRAs);
(5) payment after age 55 and separation from service (not applicable to IRAs);
and
(6) payments to an alternate payee pursuant to a qualified domestic relations
order under Code Section 414(p) (not applicable to IRAs). Excess retirement
accumulations may be subject to a 15% penalty tax. Excess distributions may be
subject to a 15% excise tax.
IRAs are subject to limitations on the amount which may be contributed. The
deductibility of contributions by individuals or their spouses who are active
participants in an employer-maintained pension or profit-sharing plan may be
reduced based on the individual's adjusted gross income. In addition, certain
distributions from Qualified Plans and TSAs may be placed on a tax-deferred
basis into an IRA.
In general, tax law requires that minimum distributions be made from qualified
plans, TSAs and IRAs beginning at age 70 1/2. To avoid penalty taxes of 50
percent or more, required distributions, including distributions which should
have been distributed in prior years, should not be rolled over to IRAs.
Distributions from Qualified Plans and TSAs are subject to mandatory federal
income tax withholding. MassMutual is required to withhold 20% when a payment
from a Qualified Plan or TSA is an "eligible rollover distribution" and such
payment is not directly rolled over to another Qualified Plan, TSA or IRA. In
general, an "eligible rollover distribution" is any taxable distribution other
than:
(1) payments for the life (or life expectancy) of the Annuitant, or for joint
life (or joint life expectancies) of the Annuitant and the beneficiary;
(2) payments made over a period of ten years or more; and
(3) required minimum distributions (see above). Plan Administrators should be
able to tell annuitants what other payments are not "eligible rollover
distributions."
Taxable distributions which are not "eligible rollover distributions" are
subject to the withholding rules for annuities (see - Tax Withholding).
Performance Measures
MassMutual may show the performance under the Contracts in the following ways:
Standardized average annual
total return
MassMutual will show the Standardized Average Annual Total Return for the
Divisions of the Separate Account which have been in existence for more than one
year. As prescribed by the rules of the SEC, the Standardized Average
Annual Total Return is the effective annual compounded rate of return that would
have produced the cash redemption value over the stated period had the
performance remained constant throughout. The Standardized Average Annual Total
Return assumes a single $1000 payment made at the beginning of the period and
full redemption at the end of the period. It reflects a deduction for the
contingent deferred sales charge, the annual administrative charge and all other
Fund, Separate Account, and Contract level charges except premium taxes, if any.
The annual administrative charge is apportioned among the Divisions of the
Separate Account based upon the percentages of inforce Contracts investing in
each of the Divisions.
Additional Performance
Measures
The performance figures discussed below are calculated on the basis of the
historical performance of the Funds, and may assume the Contracts were in
existence prior to April 27, 1987 (which they were not). Beginning April 27,
1987 (inception date), actual Accumulation Unit values are used for the
calculations for the MML Trust. The Oppenheimer Variable Account Funds were
added to the Contracts on September 12, 1994.
20
<PAGE>
For these funds, calculations may be based on the premise that they were part of
the contract from December 31, of the inception year of each fund. Beginning
September 12, 1994, actual Accumulation Unit Values are used for the
calculations for the Oppenheimer Trust. The difference between the first set of
additional performance measures, PERCENTAGE CHANGE and ANNUALIZED RETURNS on
Accumulation Unit Values, and the second set, the NON-STANDARDIZED ANNUAL and
AVERAGE ANNUAL TOTAL RETURNS, is that the second set is based on specified
premium patterns and includes the deduction of the annual Administrative Charge,
the first set does not. Additional details follow.
ACCUMULATION UNIT VALUES: PERCENTAGE CHANGE AND ANNUALIZED RETURNS.
MassMutual will show the PERCENTAGE CHANGE in the value of an Accumulation Unit
for a Division of the Separate Account with respect to one or more periods. The
ANNUALIZED RETURN, or average annual change in Accumulation Unit Values, may
also be shown with respect to one or more periods. For a one year period, the
PERCENTAGE CHANGE and the ANNUALIZED RETURN are effective annual rates of return
and are equal. For periods greater than one year, the ANNUALIZED RETURN is the
effective annual compounded rate of return for the periods stated. Since the
value of an Accumulation Unit reflects the Separate Account, the MML Series Fund
expenses and the Oppenheimer Fund expenses (See Table of Fees and Expenses), the
PERCENTAGE CHANGE and ANNUALIZED RETURN also reflect these expenses. These
percentages, however, do not reflect the annual Administrative Charge and the
contingent deferred sales charge or premium taxes (if any), which if included
would reduce the percentages reported.
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Division of the Separate
Account is the effective annual rate of return that would have produced the
ending Accumulated Value of the stated one year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Division of the Separate
Account is the effective annual compounded rate of return that would have
produced the ending Accumulated Value over the stated period had the performance
remained constant throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the
NON-STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same
period due to the effect of the annual Administrative Charge. Additionally, the
magnitude of this difference will depend on the size of the Accumulated Value
from which the annual Administrative Charge is deducted.
YIELD AND EFFECTIVE YIELD. MassMutual may also show yield and effective yield
figures for the Money Market Division of the Separate Account. "Yield" refers
to the income generated by an investment in the Money Market Division over a
seven-day period, which is then "annualized". That is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of the investment. The
"effective yield" is calculated similarly but, when annualized, the income
earned by an investment in the Money Market Division is assumed to be
re-invested. Therefore the effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvestment. These
figures do not reflect the annual Administrative Charge, the contingent deferred
sales charge or premium taxes (if any), which if included would reduce the
yields reported.
The performance measures discussed above reflect results of the Funds and are
not intended to indicate or predict future performance. For more detailed
information see the Statement of Additional Information.
Performance information for the Separate Account Divisions may be compared to
other variable annuity separate accounts or other investment products surveyed
by Lipper Analytical Services, a nationally recognized independent reporting
service which ranks mutual funds and other investment companies by overall
performance, investment objectives and assets. Performance may also be tracked
by other ratings services, companies, publications or persons who rank separate
accounts or other investment products on overall performance or other criteria.
Performance figures will be calculated in accordance with standardized methods
established by each reporting service.
MassMutual may also show the application of general mathematical
principles in connection with the Contracts.
Additional Information
For further information about the Contracts, You may obtain a Statement
of Additional Information prepared by MassMutual.
The Table of Contents of this Statement is as follows:
1. General Information and History
2. Service Arrangements and Distribution
3. Contract Value Calculations and Annuity Payments
4.Performance Measures
5. Reports of Independent Accountants and Financial Statements.
21
<PAGE>
This Prospectus sets forth the information about Separate Accounts 1 and 2 that
a prospective investor ought to know before investing. Certain additional
information about the Separate Accounts is contained in a Statement of
Additional Information dated May 1, 1996 which has been filed with the SEC and
is incorporated herein by reference. The Table of Contents for the Statement of
Additional Information appears on page 21 of this Prospectus. To obtain a copy,
return this request form to the address shown below or telephone (413) 788-8411.
- --------------------------------------------------------------------------------
To: Massachusetts Mutual Life Insurance Company
VA Service Unit, C351
1295 State Street
Springfield, Massachusetts 01111
Please send me a Statement of Additional Information for MassMutual Flex Extra.
Name __________________________________________
Address __________________________________________
__________________________________________
City __________________ State _____________ Zip __________
Telephone __________________________________
<PAGE>
FLEX EXTRA
- --------------------------------------------------------------------------------
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(DEPOSITOR)
- --------------------------------------------------------------------------------
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 2
(REGISTRANTS)
STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the prospectus of Massachusetts Mutual Variable Annuity
Separate Accounts 1 and 2 dated May 1, 1996 (the "Prospectus"). The Prospectus
may be obtained from Massachusetts Mutual Life Insurance Company, Variable
Annuity Services C-351, 1295 State Street, Springfield, Massachusetts 01111,
(413) 788-8411.
Dated May 1, 1996
<PAGE>
TABLE OF CONTENTS
General Information and History........................................... 1
Service Arrangements and Distribution..................................... 7
Contract Value Calculations
For Amounts Allocated to an Investment
Division of a Separate Account............................................ 9
Performance Measures...................................................... 15
Reports of Independent
Accountants and Financial
Statements....................................................... Final Pages
<PAGE>
GENERAL INFORMATION
MassMutual
----------
Massachusetts Mutual Life Insurance Company ("MassMutual") is a mutual life
insurance company specially chartered by the Commonwealth of Massachusetts on
May 14, 1851. Its Home Office is located in Springfield, Massachusetts.
MassMutual is registered as an investment adviser under the Investment Advisers
Act of 1940 MassMutual serves as investment adviser for the MML Series
Investment Fund which is comprised of: MML Money Market Fund, MML Managed Bond
Fund, the MML Blend Fund and the MML Equity Fund (collectively the MML "Funds").
MassMutual has entered into sub-advisery agreements with Concert Capital
Management, Inc. ("Concert Capital"), a wholly-owned subsidiary of MassMutual.
These agreements provide that Concert Capital manages the investment and
reinvestment of the assets of the MML Equity Fund and the assets of the Equity
Sector of the MML Blend Fund. Both MassMutual and Concert Capital are
registered as investment advisers under the Investment Advisers Act of 1940.
The Separate Accounts
---------------------
Massachusetts Mutual Variable Annuity Separate Account 1 ("Separate Account 1")
was established as a separate investment account of MassMutual on April 8, 1981
in accordance with the provisions of Chapter 175 of the Massachusetts General
Laws. Massachusetts Mutual Variable Annuity Separate Account 2 ("Separate
Account 2") was established as a separate investment account of MassMutual on
October 14, 1981 in accordance with the provisions of Chapter 175 of the
Massachusetts General Laws. Each Separate Account is registered as a unit
investment trust under the Investment Company Act of 1940. A unit investment
trust is a type of investment company which invests its assets in the shares of
one or more management investment companies rather than directly in its own
portfolio of investment securities. Registration under the Investment Company
Act of 1940 does not involve supervision of the management or investment
practices or policies of the Separate Accounts or of MassMutual. Under
Massachusetts law, however, both
1
<PAGE>
MassMutual and each Separate Account are subject to regulation by the Division
of Insurance of the Commonwealth of Massachusetts.
Each Separate Account is divided into seven Divisions. The MML Equity Division
invests in shares of MML Equity Fund, the MML Money Market Division invests in
shares of MML Money Market Fund, the MML Managed Bond Division invests in shares
of MML Managed Bond Fund and the MML Blend Division invests in shares of MML
Blend Fund. Each MML Fund is a series of MML Series Investment Fund (the "MML
Trust"). The Oppenheimer Global Securities Division invests in shares of
Oppenheimer Global Securities Fund. The Oppenheimer Capital Appreciation
Division invests in shares of Oppenheimer Capital Appreciation Fund, and the
Oppenheimer Strategic Bond Division invests in shares of Oppenheimer Strategic
Bond Fund. Each Oppenheimer Fund is a series of Oppenheimer Variable Account
Funds (the "Oppenheimer Trust").
The value of both Accumulation Units (see "The Accumulation (Pay-In) Period"
---
section) and Annuity Units (see "The Annuity (Pay Out) Period" section) in each
---
Division reflects the investment results of its underlying Fund.
Although the assets of each Separate Account are assets of MassMutual, assets of
each Separate Account equal to the reserves and other annuity contract
liabilities which depend on the investment performance of the Separate Account
are not chargeable with liabilities arising out of any other business MassMutual
may conduct. The income and capital gains and losses, realized or unrealized,
of each Division of a Separate Account are credited to or charged against such
Division without regard to the income and capital gains and losses of the other
Divisions or other accounts of MassMutual. All obligations arising under the
Flex Extra Contracts (the "Contracts"), however, are general corporate
obligations of MassMutual.
The Trusts
----------
a. MML Trust
The MML Trust is a no-load, open-end, diversified management investment company
consisting of four separate series of shares--MML Equity Fund, MML Money Market
Fund, MML Managed Bond Fund, and MML Blend Fund (the MML "Funds") each of which
has its own investment objectives and policies. MassMutual organized the MML
2
<PAGE>
Trust for the purpose of providing vehicles for the investment of assets held in
various separate investment accounts, including the Separate Accounts,
established by MassMutual or life insurance company subsidiaries of MassMutual.
A Separate Account purchases and redeems shares of the MML Funds at their net
asset value without the imposition of any sales or redemption charge.
Distributions made on the shares of each Fund held by a Division of a Separate
Account are immediately reinvested in shares of the MML Fund at net asset value,
which shares are added to the assets of the appropriate Division of the Separate
Account. MassMutual serves as investment manager of each of the MML Funds
pursuant to separate investment management agreements executed by MassMutual and
each of the MML Funds. Concert Capital manages the investment and reinvestment
of the assets of the MML Equity Fund and the Equity Sector of MML Blend Fund
pursuant to an Investment Sub-advisery Agreement entered into between Concert
Capital and MassMutual. Both MassMutual and Concert Capital are registered as
investment advisers under the Investment Advisers Act of 1940. The MML Trust's
Prospectus and Statement of Additional Information contains a description of the
MML Funds, their investment objectives, policies and restrictions, their
expenses, the risks attendant therein, and aspects of their operation.
b. The Oppenheimer Trust
---------------------
Like the MML Trust, the Oppenheimer Trust is a no-load, open-end, diversified
management investment company consisting of separate series of shares known as
Funds. The Oppenheimer Trust was established for use as an investment vehicle by
variable contract separate accounts such as the Separate Accounts.
OppenheimerFunds, Inc. ("OFI") serves as investment adviser to the Oppenheimer
Trust. (Prior to January 5, 1996, OFI was known as Oppenheimer Management
Corporation.)
OFI is organized under the laws of Colorado as a corporation; it was initially
organized in 1959. It (including a subsidiary) advises U.S. investment
companies with assets aggregating over $42 billion as of December 31, 1995, and
with more than 2.8 million shareholder accounts. OFI is owned by Oppenheimer
Acquisition Corporation, a holding company owned in part by senior management of
OFI and ultimately controlled by
3
<PAGE>
MassMutual. OFI is registered as an investment adviser under the Investment
Advisers Act of 1940. The Oppenheimer Trust's Prospectus and Statement of
Additional Information contains a description of the Oppenheimer Funds, their
investment objectives, policies, restrictions, their expenses, risks associated
with the Funds, and aspects of their operation.
Possible Conflicts
------------------
Assets of Massachusetts Mutual Variable Life Separate Accounts I and II,
registered separate investment accounts of MassMutual and MML Bay State Variable
Life Separate Account I, a registered separate investment account of MML Bay
State Life Insurance Company ("MML Bay State"), a Missouri corporation and a
wholly-owned subsidiary of MassMutual, are invested in the MML Funds. Because
Separate Account 1, Separate Account 2, Massachusetts Mutual Variable Annuity
Separate Account 3, and MML Bay State Variable Annuity Separate Account 1 are
also invested in the MML Funds, it is possible that material conflicts could
arise between owners of the Contracts and owners of variable life insurance
policies funded by the separate accounts listed above. Possible conflicts could
arise if: (i) state insurance regulators should disapprove of or require
changes in investment policies, investment advisers or principal underwriters,
or if MassMutual or MML Bay State should be permitted to act contrary to actions
approved by holders of the variable life insurance policies under rules of the
Securities and Exchange Commission ("SEC"); (ii) adverse tax treatment of the
Contracts or the variable life insurance policies would result from utilizing
the same Funds; (iii) different investment strategies would be more suitable for
the Contracts than for the variable life insurance policies; or (iv) state
insurance laws or regulations or other applicable laws would prohibit the
funding of variable annuity separate accounts and variable life separate
accounts by the same MML Funds. The Board of Trustees of the MML Trust will
follow monitoring procedures which have been developed to determine whether
material conflicts have arisen. Such Board will have a majority of Trustees who
are not interested persons of the MML Trust or MassMutual, and determinations
whether or not a material conflict exists will be made by a majority of such
disinterested Trustees. If a material
4
<PAGE>
irreconcilable conflict exists, MassMutual and MML Bay State will take such
action at their own expense as may be required to cause Massachusetts Mutual
Variable Life Separate Accounts I and II and MML Bay State Variable Life
Separate Account I , to be invested solely in shares of mutual funds which offer
their shares exclusively to variable life insurance separate accounts unless, in
certain cases, the holders of both the variable life insurance policies and the
variable annuity Contracts vote not to effect such segregation.
The Oppenheimer Trust was established for use as an investment vehicle by
variable contract separate accounts such as the Separate Accounts. Accordingly,
it is possible that a material irreconcilable conflict may develop between the
interests of Contract Owners and other separate accounts investing in the
Oppenheimer Trust. The Board of Trustees of the Oppenheimer Trust (the "Board")
will monitor the Oppenheimer Funds for the existence of any such conflicts. If
it is determined that a conflict exists, the Board will notify MassMutual and
appropriate action will be taken to eliminate such irreconcilable conflict.
Such steps may include: (1) withdrawing the assets allocable to some or all of
the separate accounts from the particular Oppenheimer Fund and reinvesting such
assets in a different investment medium, including (but not limited to) another
Oppenheimer Fund; (2) submitting the question of whether such segregation should
be implemented to a vote of all affected Contract Owners; and (3) establishing a
new registered management investment company or managed separate account.
Assignment of Contract
----------------------
MassMutual will not be charged with notice of any assignment of a Contract or of
the interest of any beneficiary or of any other person unless the assignment is
in writing and the original or MassMutual receives at its Home Office a true
copy thereof. MassMutual assumes no responsibility for the validity of any
assignment.
While the Contracts are generally assignable, all non-tax qualified (Separate
Account 2) Contracts must carry a non-transferability endorsement which
precludes their assignment. For qualified (Separate Account 1) Contracts, the
following exceptions and provisions should be noted:
(1) No person entitled to receive annuity payments under a Contract or
part or all of the Contract's value will be permitted
5
<PAGE>
to commute, anticipate, encumber, alienate or assign such amounts, except upon
the written authority of the Contract Owner given during the Annuitant's
lifetime and received in good order by MassMutual at its Home Office. To the
extent permitted by law, no Contract nor any proceeds or interest payable
thereunder will be subject to the Annuitant's or any other person's debts,
contracts or engagements, nor to any levy or attachment for payment thereof;
(2) If an assignment of a Contract is in effect on the maturity date,
MassMutual reserves the right to pay to the assignee in one sum the amount of
the Contract's maturity value to which he is entitled, and to pay any balance of
such value in one sum to the Contract Owner, regardless of any payment options
which the Contract Owner may have elected. Moreover, if an assignment of a
Contract is in effect at the death of the Annuitant prior to the maturity date,
MassMutual will pay to the assignee in one sum, to the extent that he is
entitled, the greater of (a) the total of all purchase payments, less the net
amount of all partial redemptions, and (b) the Accumulated Value of the
Contract, and any balance of such value will be paid to the beneficiary in one
sum or applied under one or more of the payment options elected;
(3) Contracts used in connection with a tax-qualified retirement plan must
be endorsed to provide that they may not be sold, assigned or pledged for any
purpose unless they are owned by the trustee of a trust described in Section
401(a) or by the administrator of an annuity plan described under Section 403(a)
of the Code;
(4) Contracts used in connection with annuity purchase plans adopted by
public school systems and certain tax-exempt organizations pursuant to Section
403(b) of the Code ("tax-sheltered annuities" or "TSAs") must be endorsed to
provide that they are non-transferable. Non-ERISA TSA values may be pledged,
however, as collateral for Contract loans; and
(5) Contracts issued under a plan for an Individual Retirement Annuity
pursuant to Section 408 of the Code must be endorsed to provide that they are
non-transferable. Such Contracts may not be sold, assigned, discounted, or
pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose by the Annuitant to any person or party
other than MassMutual, except to a former spouse of the Annuitant in accordance
with the terms of a divorce decree or other written instrument incident to a
divorce.
Assignments may be subject to federal income tax.
6
<PAGE>
RESTRICTIONS ON REDEMPTION
Redemptions of TSAs may be restricted as required by Section 403(b)(11) of the
Internal Revenue Code (see, "Tax-Sheltered Annuity Redemption Restrictions" in
the prospectus for details). In restricting any such redemption, MassMuutal
relies on the relief from sections 22(e), 27(c) and 27(d) of the Investment
Company Act of 1940 granted in American Council of Life Insurance [1988 Transfer
Binder] Fed. Sec. L. Rep (CCH) 78,904 (November 22, 1988) (the "No Action
Letter"). In relying on such relief, MassMutual hereby represents that it
complies with the provisions of paragraphs (1)-(4) as set forth in the No Action
Letter.
SERVICE ARRANGEMENTS AND DISTRIBUTION
Custodian of Assets of the Funds
--------------------------------
Citibank N.A., with its home office located at 111 Wall Street, New York, New
York 10005, acts as custodian for the MML Funds. The Bank of New York, with its
home office located at One Wall Street, New York, New York 10015, acts as
custodian for the Oppenheimer Funds. The Custodians' responsibilities include
safeguarding and controlling the respective Funds' cash and securities, handling
the receipt of delivery of securities, and collecting interest and dividends on
the Funds' investments.
Independent Accountants
-----------------------
The financial statements of the Separate Accounts and the supplemental financial
statements of MassMutual included in this Statement of Additional Information
have been included herein in reliance on the reports of Coopers & Lybrand
L.L.P., Springfield, Massachusetts 01101, independent accountants, given on the
authority of that firm as experts in accounting and auditing. Coopers &
Lybrand's report on the supplemental financial statements of MassMutual includes
explanatory paragraphs relating to the retroactive effect of the merger of
MassMutual and Connecticut Mutual Life Insurance Company, and the pending sale
of a wholly-owned insurance subsidiary.
Distribution and Administration
-------------------------------
7
<PAGE>
Effective May 1, 1996, MML Distributors, LLC ("MML Distributors"), a wholly
owned subsidiary of MassMutual, is the principal underwriter for each Separate
Account pursuant to a Underwriting and Servicing Agreement among MassMutual, MML
Distributors and the Separate Accounts. Prior to May 1, 1996, MML Investors
Services, Inc. ("MMLISI"), also a wholly-owned subsidiary of MassMutual, served
as principal underwriter for each Separate Account. Effective May 1, 1996,
MMLISI serves as co-underwriter for each Separate Account.
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the SEC as broker-dealers under the Securities
Exchange Act of 1934 and are members of the National Association of Securities
Dealers, Inc. ("selling brokers"). The Contracts are sold through agents who
are licensed by state insurance department officials to sell the Contracts.
These agents are also registered representatives of selling brokers or MMLISI.
The Contracts are offered in all states and the District of Columbia.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters for each
Separate Account. Compensation paid to MMLISI in 1995 was $307,636. No
compensation was paid to MML Distributors in 1995. Commissions will be paid
through MMLISI and MML Distributors to agents and selling brokers for selling
the Contracts. During 1995, 1994, and 1993, commission payments amounted to
$27,288,843, $23,948,009 and $25,596,266 respectively.
Under Administration Agreements, MassMutual has agreed to provide,
8
<PAGE>
or provide for, and assume: (1) all services and expenses required for the
administration of those Contracts which depend in whole or in part on the
investment performance of the Separate Accounts; and (2) all services and
expenses required for the administration of the Separate Accounts other than the
services and expenses referred to in (1). MassMutual also has agreed to provide,
or provide for, and assume all services and expenses required for the Separate
Accounts' management-related services. MassMutual receives no compensation for
such services apart from the various charges against the Contracts described in
the Prospectus.
These Servicing and Administration Agreements may be terminated by the parties
without the payment of any penalty upon sixty days' written notice. The
agreements immediately terminate in the event of their assignment (within the
meaning of the Investment Company Act of 1940). The agreements may be amended
at any time by the
9
<PAGE>
mutual consent of the parties. Contract Owners will not receive notice with
respect to changes in the agreements.
The offering of the Contracts is continuous.
Purchase of Securities Being Offered
------------------------------------
Interests in the Separate Account are sold to Contract Owners as accumulation
units. Charges associated which such securities are described in the Prospectus
at pages 14 through 17. Until April 30, 1997, deferred contingent sales charges
that may otherwise have been applicable will be waived upon the surrender of a
Contract where the proceeds of such redemption are used to purchase certain new
MassMutual group contracts. Charges applicable to the particular group
contract, including any surrender charges, will continue to apply.
CONTRACT VALUE CALCULATIONS FOR AMOUNTS ALLOCATED TO AN
INVESTMENT DIVISION OF A SEPARATE ACCOUNT
The Accumulation (Pay-In) Period
--------------------------------
Valuation Date, Valuation Time and Valuation Period
---------------------------------------------------
Each day on which the net asset value of the shares of any of the Funds is
determined is a "Valuation Date." The value of shares of the Funds held in each
Separate Account is determined as of the "Valuation Time," which is the time of
the close of trading on the New York Stock Exchange (currently 4:00 p.m. New
York time) on a Valuation Date. A "Valuation Period" is the period, consisting
of one or more days, from one Valuation Time to the next succeeding Valuation
Time.
Accumulation Unit Value
-----------------------
The value of an Accumulation Unit (the "Accumulation Unit Value") for each
Division of the Separate Account will vary from Valuation Date to Valuation
Date. The initial Accumulation Unit Value for each Division was set at
$1.00000000. The Accumulation Unit Value for each Division on any date
thereafter is equal to the product of the "Net Investment Factor" for that
Division (as defined below) for the Valuation Period which includes such date
and the Accumulation Unit Value for that Division on the preceding Valuation
Date.
Purchase of Accumulation Units in a Division
--------------------------------------------
10
<PAGE>
of a Separate Account
---------------------
You may allocate purchase payments among the available investment Divisions of a
Separate Account and the Guaranteed Principal Account. At the end of each
Valuation Period, MassMutual will apply Your purchase payment (after deducting
any applicable premium taxes) to each Separate Account Division that you have
allocated in order to purchase Accumulation Units of the designated Division(s).
These Accumulation Units will be used in determining the value of amounts in the
Separate Account credited to the Contract on or prior to the maturity date and
the amount of variable annuity benefits at maturity. The value of the
Accumulation Units in each Division will vary with and will reflect the
investment performance and expenses of that Division (which in turn will reflect
the investment performance of the Fund in which the assets of the Division are
invested), any applicable taxes and the applicable Asset Charge.
The Accumulation Unit Value is determined as of the Valuation Time. Provided
that the Contract application is complete, Accumulation Units are purchased at
their Accumulation Unit Value within two days of the date on which a purchase
payment is received in good order in the mail or by wire transfer at the Home
Office or a designated bank lock box. If such date is not a Valuation Date, or
if the purchase payment is received after the Valuation Time or other than by
mail or wire transfer, the value of the Accumulation Units purchased will be
determined as of the next Valuation Time following the date the payment is
received. If an initial purchase payment is not applied to purchase
Accumulation Units within five business days after receipt (due to incomplete or
ambiguous Application information, for example) the payment amount will be
refunded unless specific consent to retain the payment for a longer period is
obtained from the prospective purchaser.
Net Investment Factor
---------------------
The Net Investment Factor for each Division for any Valuation Period is equal to
the sum of the Gross Investment Rate for that Division (as defined below) for
the Valuation Period and 1.00000000, decreased by the applicable Asset Charge.
The Net Investment Factor may be greater than or less than 1.00000000.
Gross Investment Rate
---------------------
The Gross Investment Rate for each Division of a Separate Account
11
<PAGE>
is equal to the net earnings of that Division during the Valuation Period,
divided by the value of the net assets of that Division at the beginning of the
Valuation Period. The net earnings of each Division are equal to the accrued
investment income and capital gains and losses (realized and unrealized) of that
Division and an adjustment for taxes paid or provided for. The Gross Investment
Rate will be determined in accordance with generally accepted accounting
principles and applicable laws, rules and regulations. The Gross Investment Rate
may be positive or negative.
The policy of each Separate Account is to take dividends and capital gain
distributions on shares of the Funds held by each Separate Account in additional
shares and not in cash.
See the General Formulas section below for the general formulas used to compute
----------------
the value of an Accumulation Unit for any Division of a Separate Account, and
for a hypothetical illustration using such formulas.
The Annuity (Pay-Out) Period
----------------------------
When your Contract approaches its maturity date, you may choose to have the
Accumulated Value of the Contract provide you at maturity with either Fixed
Annuity payments (referred to as the "Fixed Income Option" in your Contract),
Variable Monthly Annuity payments (referred to as the "Variable Income Option"
in your Contract), or a combination of the two. You also may elect to receive
the Accumulated Value in one lump sum. A Sales Charge (as described in the
Prospectus) may be deducted from the Accumulated Value of your Contract at
maturity. Fixed or Variable Monthly Annuity payments may be received under
several different payment options. If you have made no election within a
reasonable time after the maturity date, the Contract will provide you with the
automatic payment of a Variable Monthly Annuity under a life income option with
payments guaranteed for 10 years.
Fixed Annuity
-------------
If you select a Fixed Annuity, then each annuity payment will be for a fixed-
dollar amount and will not vary with or reflect the investment performance of a
Separate Account or its Divisions. For further information regarding the type
of annuity benefit and the payment options available thereunder, you should
refer to the Contracts.
12
<PAGE>
Variable Monthly Annuity
------------------------
If you select a Variable Monthly Annuity, then each annuity payment will be
based upon the value of the Annuity Units. This value will vary with and
reflect the investment performance of each Division to which Annuity Units are
credited. The number of Annuity Units will not vary, but will remain fixed
during the annuity period unless a joint and survivor Payment Option with
reduced survivor income (as described in the Prospectus) is elected. Variable
Monthly Annuity payments will be made by withdrawal of assets from the Separate
Account.
Annuity Units and Monthly Payments
----------------------------------
The number of Annuity Units in each Division to be credited to a Contract is
determined in the following manner. First, the value of amounts attributable to
a Contract to each Division of a Separate Account is determined by multiplying
the number of Accumulation Units credited to a Division on the maturity date of
the Contract by the Accumulation Unit Value of that Division on the Payment
Calculation Date for the first Variable Monthly Annuity payment. Such value is
then multiplied by the "purchase rate" (as defined below) to determine the
amount of the first Variable Monthly Annuity payment attributable to each
Division. Finally, the amount of the first Variable Monthly Annuity payment
attributable to each Division is divided by the Annuity Unit Value for that
Division on the Payment Calculation Date for such payment to determine the
number of Annuity Units for that Division.
The dollar amount of each Variable Monthly Annuity payment (other than the first
payment under a Contract) is equal to the sum of the products obtained by
multiplying the number of Annuity Units in each Division credited to the
Contract by their value (the "Annuity Unit Value") on the Payment Calculation
Date.
Purchase Rate
-------------
The purchase rate for each Division is the amount of Variable Monthly Annuity
payment purchased by $1,000 of Accumulated Value at maturity date applied to
that Division. The purchase rates which will be applied will be those specified
in the Contract or those in use by MassMutual when the first Variable Monthly
Annuity payment is due, whichever provides the higher income. The purchase rate
will differ according to the payment option which you elect and takes into
account the age and year of birth of the Annuitant or
13
<PAGE>
Annuitants. The sex of the Annuitant or Annuitants will also be considered
unless the Contract is issued on a unisex basis, including cases issued in
connection with an employer-sponsored plan covered by the United States Supreme
Court case of Arizona Governing Committee v. Norris.
-------------------------------------
Assumed Investment Rates
------------------------
The Assumed Investment Rate for each Separate Account Division will be 4% per
annum unless a lower rate is required by state law. The Assumed Investment Rate
will affect the amount by which Variable Monthly Annuity payments will vary from
month to month. If the actual net investment performance for a Division for the
period between the date any Variable Monthly Annuity payment is determined and
the date the next Variable Monthly Annuity payment is determined is equivalent
on an annual basis to an investment return at the Assumed Investment Rate, then
the amount of the next payment attributable to that Division will be equal to
the amount of the last payment. If such net investment performance for a
Division is equivalent to an investment return greater than the Assumed
Investment rate, the next payment attributable to that Division will be larger
than the last; if such net investment performance for a Division is equivalent
to a return smaller than the Assumed Investment Rate, then the next payment
attributable to that Division will be smaller than the last.
Annuity Unit Value
------------------
The Annuity Unit Value for a Division depends on the Assumed Investment Rate and
on the Net Investment Factor for that Division. The initial Annuity Unit Value
for each Division was set at $1.00000000. An Annuity Unit Value for a Division
on any date thereafter is equal to the Net Investment Factor for the Valuation
Period which includes such date divided by the sum of 1.00000000 plus the rate
of interest for the number of days in such Valuation Period at an effective
annual rate equal to the Assumed Investment Rate, and multiplied by the Annuity
Unit Value for the Division on the preceding Valuation Date.
General Formulas
----------------
General Formulas to Determine Accumulation Unit Value and
---------------------------------------------------------
Annuity Unit Value for any Division of a Separate Account
---------------------------------------------------------
Gross Investment = Net Earnings during Valuation Period
14
<PAGE>
Rate Value of Net Assets at beginning of
Valuation Period
Net Investment = Gross Investment Rate + 1.00000000 - Asset
Factor Charge
Accumulation = Accumulation Unit Value on Preceding Valuation
Unit Value Date X Net Investment Factor
Annuity Unit Value on Preceding Valuation
Date X Net Investment Factor
-----------------------------------------
Annuity Unit = 1.00000000 + rate of interest for number of
Value days in current Valuation Period at Assumed
Investment Rate
Illustration of Computation of Accumulation
-------------------------------------------
and Annuity Unit Value Using Hypothetical Example
-------------------------------------------------
The above computations may be illustrated by the following hypothetical example:
Assume that the net earnings of the Division for the Valuation Period were
$11,760; that the value of net assets at the beginning of the Valuation Period
was $30,000,000; that the Asset Charge was .00003562 per day; that the values of
an Accumulation Unit and an Annuity Unit in the Division of the Separate Account
on the preceding Valuation Date were $1.13500000 and $1.06700000, respectively,
that the corresponding Assumed Investment Rate was 4% and that the Valuation
Period was one day.
The Gross Investment Rate for the Valuation Period would be .00039200 ($11,760
divided by $30,000,000). The Net Investment Factor would be 1.00035638
(.00039200 plus 1.00000000 minus .00003562). The new Accumulation Unit Value
would be $1.13540449 ($1.13500000 x 1.00035638). At an effective annual rate of
4%, the rate of interest for one day is .00010746, and the new Annuity Unit
Value would be $1.06726557 ($1.06700000 x 1.00035638 divided by 1.00010746).
General Formulas to Determine Variable Monthly Annuity
------------------------------------------------------
Payments and Number of Annuity Units for any Division of a
----------------------------------------------------------
Separate Account
----------------
First Variable Accumulation Units Applied X Accumulation Unit
Monthly Annuity = Value on Payment Calculation Date for First
Payment Variable Monthly Annuity Payment X Purchase
Rate
15
<PAGE>
First Variable Monthly Annuity Payment
--------------------------------------
Number of = Annuity Unit Value on Payment Calculation Date
Annuity Units for First Variable Monthly Annuity Payment
Amount of
Subsequent = Number of Annuity Units X Annuity Unit Value
Variable Monthly on the Applicable Payment Calculation Date
Annuity Payments
Illustration of Computation of Variable Monthly Annuity
-------------------------------------------------------
Payments for a Contract Using Hypothetical Example
--------------------------------------------------
The above computations may be illustrated by the following hypothetical example:
Assume that 35,000 Accumulation Units in a Division of a Separate Account were
to be applied; that the purchase rate for the Assumed Investment Rate and
payment option elected was $5.65 per $1,000; that the Accumulation Unit Value of
such Division on the Payment Calculation Date for the first Variable Monthly
Annuity payment was $1.35000000; and that the Annuity Unit Value of such
Division on the Payment Calculation Date for the first Variable Monthly Annuity
payment was $1.20000000 and for the second Variable Monthly Annuity payment was
$1.20050000.
The first Variable Monthly Annuity payment would be $266.96 (35,000 x 1.35000000
x .00565). The number of Annuity Units of such Division credited would be
222.467 ($266.96 divided by $1.20000000). The amount of the second Variable
Monthly Annuity payment would be $267.07 (222.467 x $1.20050000). If the
Contract has Annuity Units credited in more than one Division of a Separate
Account, the above computation would be made for each Division and the Variable
Monthly Annuity Payment would be equal to the sum thereof.
PERFORMANCE MEASURES
MassMutual may show the performance for the Divisions of the Separate Account in
the following ways:
Standardized Average Annual Total Return
----------------------------------------
MassMutual will show the "Standardized Average Annual Total Return," formulated
as prescribed by the rules of the SEC, for each Division of the Separate
Account. The
16
<PAGE>
Standardized Average Annual Total Return is the effective annual compounded rate
of return that would have produced the cash redemption value over the stated
period had the performance remained constant throughout. The calculation assumes
a single $1,000 payment made at the beginning of the period and full redemption
at the end of the period. It reflects a deduction for the contingent deferred
sales charge, the annual administrative charge and all other Fund, Separate
Account and Contract level charges except premium taxes, if any. The annual
administrative charge is apportioned among the Divisions of the Separate Account
based upon the percentages of in force Contracts investing in each of the
Divisions.
The following tables show the Standardized Average Annual Total Return for the
Divisions of the Separate Accounts for the period ended December 31, 1995.
Flexible Purchase Payment Contract
<TABLE>
<CAPTION>
1995 5 Year (4/27/87)*
---- ------ ----------
<S> <C> <C> <C>
Equity Division 19.81% 12.47% 9.97%
Managed Bond Division 8.94 7.53 7.78
Blend Division11 .83 10.07 8.72
Money Market Division (3.37) 2.14 4.34
<CAPTION>
1995 5 Year (9/12/94)*
---- ------ ----------
<S> <C> <C> <C>
Oppenheimer Capital
Appreciation Division 22.14% N/A 17.20%
Oppenheimer Global
Securities Division (6.60) N/A (12.58)
Oppenheimer Strategic
Bond Division 5.64 N/A 2.70
</TABLE>
* Since availability of Funds for use with the contract
17
<PAGE>
Single Purchase Payment Contract
<TABLE>
<CAPTION>
1995 5 Year (4/27/87)*
---- ------ ----------
<S> <C> <C> <C>
Equity Division 23.86% 13.44% 10.13%
Managed Bond Division 13.20 8.35 7.90
Blend Division 16.19 11.05 8.90
Money Market Division .39 2.90 4.45
<CAPTION>
1995 5 Year (9/12/94)*
---- ------ ----------
<S> <C> <C> <C>
Oppenheimer Capital
Appreciation Division 25.97% N/A 19.98%
Oppenheimer Global
Securities Division (2.94) N/A (9.96)
Oppenheimer Strategic
Bond Division 9.74 N/A 5.76
</TABLE>
* Since availability of Funds for use with the contract
Additional Performance Measures
-------------------------------
The performance figures discussed below, are calculated on the basis of the
historical performance of the Funds, and may assume the Contracts were in
existence prior to April 27, 1987 (which they were not). Beginning April 27,
1987 (inception date), actual Accumulation Unit values are used for the
calculations for the MML Funds. The Oppenheimer Variable Account Funds were
added to the contracts on September 12, 1994. For these funds, the calculations
may be based on the premise that they were part of the contract from the
inception date of each fund. Beginning September 12, 1994, actual accumulation
unit values are used for the calculations for the Oppenheimer Trust.
The difference between the first set, PERCENTAGE CHANGE and ANNUALIZED RETURNS
on Accumulation Unit Values, and the second set, the NON-STANDARDIZED ANNUAL and
AVERAGE ANNUAL TOTAL RETURNS, is that the second set is based on specified
premium patterns and includes the deduction of the annual Administrative Charge,
whereas the first set does not. Additional details follow.
Accumulation Unit Values: Percentage Change
--------------------------------------------
and Annualized Returns.
----------------------
MassMutual will show the PERCENTAGE CHANGE in the value of an
18
<PAGE>
Accumulation Unit for a Division of the Separate Account with respect to one or
more periods. The ANNUALIZED RETURN, or average annual change in Accumulation
Unit values, may also be shown with respect to one or more periods. For one
year, the Percentage Change and the Annualized Return are effective annual rates
of return and are equal. For periods greater than one year, the Annualized
Return is the effective annual compounded rate of return for the periods stated.
Since the value of an Accumulation Unit reflects the Separate Account and Fund
expenses (See Table of Fees and Expenses--pages 5-6 of the Flex Extra
Prospectus), the Percentage Change and Annualized Returns also reflect these
expenses. However, these percentages do not reflect the annual Administrative
---
Charge and the contingent deferred sales charge or premium taxes (if any), which
if included would reduce the percentages reported by MassMutual.
Percentage Change in Accumulation Unit Values
---------------------------------------------
For Periods Ending 12/31/95
---------------------------
<TABLE>
<CAPTION>
Since Inception
1 Year 5 Years 4/27/87
------ ------- -------
<S> <C> <C> <C>
Equity Division 29.50% 94.61% 145.17%
Money Market Division 4.23 15.87 46.76
Managed Bond Division 17.63 50.53 95.89
Blend Division 21.73 76.32 124.84
Oppenheimer Capital
Appreciation 30.89 N/A 31.70
Oppenheimer Global
Securities .93 N/A (9.27)
Oppenheimer Strategic
Bond 13.87 N/A 11.60
</TABLE>
Annualized Accumulation Unit Value Return
-----------------------------------------
For Periods Ending 12/31/95
---------------------------
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years
------ ------- -------
<S> <C> <C> <C>
Equity Division 29.50% 12.89% 14.24%
Money Market Division 4.23 2.71 2.99
Managed Bond Division 17.63 7.24 8.52
Blend Division 21.73 10.07 12.01
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years
------ ------- -------
<S> <C> <C> <C>
Oppenheimer Capital
Appreciation Division 30.89% 14.48% 21.16%
Oppenheimer Global
Securities Division .93 16.45 8.12
Oppenheimer Strategic
Bond Division 13.87 N/A N/A
</TABLE>
The NON-STANDARDIZED ANNUAL TOTAL RETURN for a Division of the Separate Account
is the effective annual rate of return that would have produced the ending
Accumulated Value of the stated one-year period.
The NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN for a Division of the Separate
Account is the effective annual compounded rate of return that would have
produced the ending Accumulated Value over the stated period had the performance
remained constant throughout.
Note: The NON-STANDARDIZED ANNUAL TOTAL RETURN will be less than the NON-
STANDARDIZED ANNUALIZED RETURN on Accumulation Unit values for the same period
due to the effect of the annual Administrative Charge. Additionally, the
magnitude of this difference will depend on the size of the Accumulated Value
from which the annual Administrative Charge is deducted.
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
YIELD AND EFFECTIVE YIELD
MassMutual may advertise yield figures for the Equity, Managed Bond and Blend
Divisions, calculated based upon a 30-day period ended on December 31, 1995.
The yields are determined by dividing the net investment income per Accumulation
Unit earned during the period by the maximum offering price per Unit on the last
day of the period.
MassMutual may also show yield and effective yield figures for the Money Market
Division of the Separate Account. "Yield" refers to the income generated by an
investment in the Money Market Division over a seven-day period, which is then
"annualized." That is, the amount of income generated by the investment during
that week is
20
<PAGE>
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective" yield is calculated similarly but,
when annualized, the income earned by an investment in the Money Market Division
is assumed to be re-invested. Therefore the effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.
These figures reflect a deduction for all Fund, Separate Account, and Contract
level charges, assuming the Contract remains in force. The figures do not
reflect the $30 (for single purchase payment Contracts) or $35 (for flexible
purchase payment Contracts) annual administrative charge, the contingent
deferred sales charge or premium tax deductions (if any), which if included
would reduce the percentages reported.
The following tables show the 7-day Yield and Effective Yield for the Money
Market Division of the Separate Accounts for the periods ended December 31,
1995:
7-Day Yield:
- -----------
Separate Account 1 (Tax-Qualified Contracts)...... 3.94%
Separate Account 2 (Non-Tax Qualified Contracts).. 3.94%
7-Day Effective Yield:
- ---------------------
Separate Account 1 (Tax-Qualified Contracts)...... 4.02%
Separate Account 2 (Non-Tax-Qualified Contracts).. 4.02%
The performance figures discussed above reflect historical results of the Funds
and are not intended to indicate or to predict future performance.
Performance information for the Separate Account Divisions may be compared to
other variable annuity separate accounts or other investment products surveyed
by Lipper Analytical Services, a nationally recognized independent reporting
service which ranks mutual funds and other investment companies by overall
performance, investment objectives and assets, or tracked by other ratings
services, companies, publications or persons who rank separate accounts or other
investment products on overall performance or other criteria. Performance
figures will be calculated in accordance with standardized methods established
by each reporting service.
21
<PAGE>
FLEX EXTRA HYPOTHETICAL PROJECTIONS
<TABLE>
<CAPTION>
Money Market Division Money Market Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1985
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 2,000 2,076 3.80% 3.80% 12/31/86 50,000 52,620 5.24% 5.24%
12/31/87 4,000 4,255 4.39% 4.19% 12/31/87 50,000 55,289 5.07% 5.16%
12/31/88 6,000 6,606 5.61% 4.89% 12/31/88 50,000 58,624 6.03% 5.45%
12/31/89 8,000 9,250 7.48% 5.89% 12/31/89 50,000 63,184 7.78% 6.03%
12/31/90 10,000 11,984 6.52% 6.10% 12/31/90 50,000 67,450 6.75% 6.17%
12/31/91 12,000 14,602 4.42% 5.64% 12/31/91 50,000 70,568 4.62% 5.91%
12/31/92 14,000 16,925 1.95% 4.74% 12/31/92 50,000 72,059 2.11% 5.36%
12/31/93 16,000 19,160 1.24% 3.99% 12/31/93 50,000 73,057 1.38% 4.85%
12/31/94 18,000 21,655 2.34% 3.68% 12/31/94 50,000 74,858 2.47% 4.59%
12/31/95 20,000 24,621 4.08% 3.75% 12/31/95 50,000 77,994 4.19% 4.55%
</TABLE>
<TABLE>
<CAPTION>
Equity Division Equity Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1985
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 2,000 2,343 17.15% 17.15% 12/31/86 50,000 59,303 18.61% 18.61%
12/31/87 4,000 4,305 -0.87% 5.01% 12/31/87 50,000 59,165 -0.23% 8.78%
12/31/88 6,000 7,222 14.54% 9.56% 12/31/88 50,000 68,019 14.96% 10.80%
12/31/89 8,000 11,181 21.24% 13.85% 12/31/89 50,000 82,661 21.53% 13.39%
12/31/90 10,000 12,923 -1.96% 8.67% 12/31/90 50,000 81,198 -1.77% 10.18%
12/31/91 12,000 18,471 23.78% 12.47% 12/31/91 50,000 100,665 23.97% 12.37%
12/31/92 14,000 22,292 8.90% 11.66% 12/31/92 50,000 109,763 9.04% 11.89%
12/31/93 16,000 26,231 7.98% 10.92% 12/31/93 50,000 118,649 8.10% 11.41%
12/31/94 18,000 28,973 2.63% 9.40% 12/31/94 50,000 121,886 2.73% 10.41%
12/31/95 20,000 40,077 29.39% 12.34% 12/31/95 50,000 157,818 29.48% 12.18%
</TABLE>
22
<PAGE>
FLEX EXTRA HYPOTHETICAL PROJECTIONS
<TABLE>
<CAPTION>
Managed Bond Division Managed Bond Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1985
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ----------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 2,000 2,236 11.80% 11.80% 12/31/86 50,000 56,627 13.25% 13.25%
12/31/87 4,000 4,257 0.50% 4.22% 12/31/87 50,000 57,269 1.13% 7.02%
12/31/88 6,000 6,591 5.34% 4.77% 12/31/88 50,000 60,574 5.77% 6.60%
12/31/89 8,000 9,543 11.08% 7.18% 12/31/89 50,000 67,471 11.39% 7.78%
12/31/90 10,000 12,328 6.80% 7.06% 12/31/90 50,000 72,200 7.01% 7.63%
12/31/91 12,000 16,471 14.96% 9.12% 12/31/91 50,000 83,149 15.16% 8.85%
12/31/92 14,000 19,534 5.75% 8.34% 12/31/92 50,000 88,059 5.91% 8.42%
12/31/93 16,000 23,735 10.22% 8.72% 12/31/93 50,000 97,174 10.35% 8.66%
12/31/94 18,000 24,409 -5.15% 6.04% 12/31/94 50,000 92,268 -5.05% 7.04%
12/31/95 20,000 31,031 17.50% 7.85% 12/31/95 50,000 108,509 17.60% 8.06%
</TABLE>
<TABLE>
<CAPTION>
Blend Division Blend Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1985
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/86 2,000 2,308 15.40% 15.40% 12/31/86 50,000 58,426 16.85% 16.85%
12/31/87 4,000 4,356 1.11% 5.82% 12/31/87 50,000 59,451 1.75% 9.04%
12/31/88 6,000 7,085 11.47% 8.55% 12/31/88 50,000 66,524 11.90% 9.99%
12/31/89 8,000 10,737 18.18% 12.12% 12/31/89 50,000 78,807 18.46% 12.05%
12/31/90 10,000 12,850 0.89% 8.48% 12/31/90 50,000 79,662 1.08% 9.76%
12/31/91 12,000 18,152 22.24% 11.96% 12/31/91 50,000 97,534 22.43% 11.78%
12/31/92 14,000 21,723 7.80% 11.00% 12/31/92 50,000 105,273 7.93% 11.22%
12/31/93 16,000 25,656 8.15% 10.43% 12/31/93 50,000 113,980 8.27% 10.85%
12/31/94 18,000 27,938 1.02% 8.69% 12/31/94 50,000 115,257 1.12% 9.72%
12/31/95 20,000 36,410 21.62% 10.66% 12/31/95 50,000 140,275 21.71% 10.87%
</TABLE>
23
<PAGE>
FLEX EXTRA HYPOTHETICAL PROJECTIONS
<TABLE>
<CAPTION>
Capital Appreciation Division Capital Appreciation Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1986
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 2,000 2,227 11.35% 11.35% 12/31/87 50,000 56,399 12.80% 12.80%
12/31/88 4,000 4,702 11.24% 11.28% 12/31/88 50,000 63,107 11.89% 12.34%
12/31/89 6,000 8,409 25.47% 17.86% 12/31/89 50,000 79,435 25.87% 16.68%
12/31/90 8,000 8,517 -18.18% 2.52% 12/31/90 50,000 65,190 -17.93% 6.86%
12/31/91 10,000 16,026 52.38% 16.16% 12/31/91 50,000 99,529 52.68% 14.76%
12/31/92 12,000 20,502 13.74% 15.54% 12/31/92 50,000 113,364 13.90% 14.62%
12/31/93 14,000 28,246 25.53% 17.64% 12/31/93 50,000 142,444 25.65% 16.13%
12/31/94 16,000 27,554 -8.90% 12.00% 12/31/94 50,000 129,902 -8.80% 12.68%
12/31/95 18,000 38,647 30.77% 15.02% 12/31/95 50,000 169,993 30.86% 14.56%
</TABLE>
<TABLE>
<CAPTION>
Global Securities Division Global Securities Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1990
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/91 2,000 2,006 0.30% 0.30% 12/31/91 50,000 50,996 1.99% 1.99%
12/31/92 4,000 3,638 -9.19% -6.16% 12/31/92 50,000 46,729 -8.37% -3.33%
12/31/93 6,000 9,444 67.51% 24.47% 12/31/93 50,000 78,534 68.06% 16.24%
12/31/94 8,000 10,614 -7.25% 11.64% 12/31/94 50,000 73,047 -6.99% 9.94%
12/31/95 10,000 12,696 0.65% 8.07% 12/31/95 50,000 73,696 0.89% 8.07%
</TABLE>
<TABLE>
<CAPTION>
Strategic Bond Division Strategic Bond Division
$2,000 purchase payment made each December 31 $50,000 single purchase payment made December 31, 1993
Values prior to current Non-Standardized Values prior to current Non-Standardized
year's purchase payment ---------------- year's purchase payment ------------------
----------------------- One Average ----------------------- One Average
Year Annual Year Annual
Cumulative Accumulated Total Total Cumulative Accumulated Total Total
Date Payments Value Return Return Date Payments Value Return Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/94 2,000 1,865 -6.75% -6.75% 12/31/94 50,000 47,459 -5.08% -5.08%
12/31/95 4,000 4,365 12.94% 5.97% 12/31/95 50,000 54,010 13.80% 3.93%
</TABLE>
24
<PAGE>
Report Of Independent Accountants
To the Contract Owners of Massachusetts Mutual Variable Annuity Separate Account
1 and the Board of Directors of Massachusetts Mutual Life Insurance Company
We have audited the statement of assets and liabilities of the Flex Extra
segment (Qualified) of Massachusetts Mutual Variable Annuity Separate Account 1
(comprising, respectively, the MML Equity Division, MML Money Market Division,
MML Managed Bond Division, MML Blend Division, Oppenheimer Capital Appreciation
Division, Oppenheimer Global Securities Division and Oppenheimer Strategic Bond
Division - the "Divisions") as of December 31, 1995, and the related
statements of operations and changes in net assets for the periods indicated
thereon. These financial statements are the responsibility of the Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included verification of investments owned as of December 31, 1995, by
examination of the records of MML Series Investment Fund and by confirmation
with Oppenheimer Variable Account Funds. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
Divisions constituting the Flex Extra segment (Qualified) of Massachusetts
Mutual Variable Annuity Separate Account 1 as of December 31, 1995, the results
of their operations and the changes in their net assets for the periods
indicated thereon, in conformity with generally accepted accounting principles.
Also, in our opinion, based upon these audits and our previous audits, made in
accordance with generally accepted auditing standards, of the financial
statements of Massachusetts Mutual Variable Annuity Separate Account 1 for each
respective period indicated thereon, and upon which we expressed an unqualified
opinion, the financial information under the caption "Condensed Financial
Information" for each date appearing in the Prospectus, is fairly stated in all
material respects in relation to the financial statements from which it has been
derived.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 9, 1996
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -- Flex Extra
(Qualified)
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment
Number of shares (Note 2)....... 29,491,330 60,637,217 7,707,589 58,231,207 1,904,496 3,635,531 3,751,820
============ =========== =========== ============== =========== =========== ===========
Identified cost (Note 3B)....... $591,329,720 $60,637,217 $94,549,349 $1,003,065,961 $54,673,630 $55,017,578 $17,885,439
============ =========== =========== ============== =========== =========== ===========
Value (Note 3A)................. $764,530,429 $60,637,217 $95,945,542 $1,194,884,564 $65,152,816 $54,532,965 $18,421,436
Dividends receivable............. 29,005,691 266,246 1,485,021 35,364,617 -- -- --
Receivable for accumulation
units sold...................... 528,087 447,482 40,802 593,296 98,029 115,855 --
Divisional transfers pending
settlement...................... (67,460) 20,738 14,826 16,283 10,539 5,074 --
Other assets..................... 881 -- 130 3,095 -- -- 51,419
------------ ----------- ----------- -------------- ----------- ----------- -----------
Total assets.................... 793,997,628 61,371,683 97,486,321 1,230,821,855 65,261,384 54,653,894 18,472,855
------------ ----------- ----------- -------------- ----------- ----------- -----------
LIABILITIES
Redemptions pending settlement... 947,248 1,877 35,058 1,926,778 338,124 253,831 184
Annuitant mortality fluctuation
reserve (Note 3D)............... 7,202 373 1,018 17,318 -- -- --
Payable to Massachusetts Mutual
Life Insurance Company.......... 137,371 7,017 17,353 177,380 11,027 8,656 2,065
------------ ----------- ----------- -------------- ----------- ----------- -----------
Total liabilities............... 1,091,821 9,267 53,429 2,121,476 349,151 262,487 2,249
------------ ----------- ----------- -------------- ----------- ----------- -----------
NET ASSETS....................... $792,905,807 $61,362,416 $97,432,892 $1,228,700,379 $64,912,233 $54,391,407 $18,470,606
============ =========== =========== ============== =========== =========== ===========
Net Assets consist of:
Accumulation units - value....... $792,665,729 $61,349,984 $97,398,945 $1,228,123,119 $64,912,233 $54,391,407 $18,470,606
Annuity reserves (Note 3E)....... 240,078 12,432 33,947 577,260 -- -- --
------------ ----------- ----------- -------------- ----------- ----------- -----------
Net assets...................... $792,905,807 $61,362,416 $97,432,892 $1,228,700,379 $64,912,233 $54,391,407 $18,470,606
============ =========== =========== ============== =========== =========== ===========
Accumulation units (Note 7)
Contractowners.................. 323,311,630 41,803,874 49,720,989 546,216,626 49,284,518 59,946,410 16,545,444
Massachusetts Mutual Life
Insurance Company............... -- -- -- -- 5,000 5,000 5,000
------------ ----------- ----------- -------------- ----------- ----------- -----------
Total units...................... 323,311,630 41,803,874 49,720,989 546,216,626 49,289,518 59,951,410 16,550,444
============ =========== =========== ============== =========== =========== ===========
NET ASSET VALUE PER ACCUMULATION
UNIT
December 31, 1995............... $2.45 $1.47 $1.96 $2.25 $1.32 $ .91 $1.12
December 31, 1994............... 1.89 1.41 1.67 1.85 1.01 .90 .98
December 31, 1993............... 1.84 1.37 1.75 1.83 -- -- --
December 31, 1992............... 1.70 1.35 1.59 1.69 -- -- --
December 31, 1991............... 1.56 1.33 1.50 1.56 -- -- --
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -- Flex Extra
(Qualified)
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
------------ ---------- ----------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B)................... $ 29,027,053 $3,054,819 $ 5,574,776 $ 69,058,477 $ 107,072 $753,816 $ 876,250
Expenses
Mortality and expense risk fees and
administrative expenses (Note 4).... 8,474,377 730,404 1,091,437 14,199,631 437,870 488,568 130,378
------------ ---------- ----------- ------------ ----------- -------- ----------
Net investment income (loss)
(Note 3C)............................ 20,552,676 2,324,415 4,483,339 54,858,846 (330,798) 265,248 745,872
------------ ---------- ----------- ------------ ----------- -------- ----------
Net realized and unrealized gain
(loss) on investments
Net realized gain (loss) on
investments
(Notes 3B, 3C and 6)................. 4,668,022 -- 109,224 10,951,610 206,286 (62,818) 349
Net change in unrealized
appreciation/depreciation
of investments....................... 141,018,117 -- 8,886,210 147,158,889 10,311,411 367,280 645,457
------------ ---------- ----------- ------------ ----------- -------- ----------
Net gain on investments............... 145,686,139 -- 8,995,434 158,110,499 10,517,697 304,462 645,806
------------ ---------- ----------- ------------ ----------- -------- ----------
Net increase in net assets
resulting from operations............ $166,238,815 $2,324,415 $13,478,773 $212,969,345 $10,186,899 $569,710 $1,391,678
============ ========== =========== ============ =========== ======== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -- Flex Extra
(Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
------------- ------------- ------------ --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
Operations:
Net investment income (loss).. $ 20,552,676 $ 2,324,415 $ 4,483,339 $ 54,858,846 $ (330,798) $ 265,248 $ 745,872
Net realized gain (loss)
on investments............... 4,668,022 -- 109,224 10,951,610 206,286 (62,818) 349
Net change in unrealized
appreciation/depreciation
of investments............... 141,018,117 -- 8,886,210 147,158,889 10,311,411 367,280 645,457
------------ ------------ ----------- -------------- ----------- ----------- -----------
Net increase in net assets
resulting from operations.... 166,238,815 2,324,415 13,478,773 212,969,345 10,186,899 569,710 1,391,678
------------ ------------ ----------- -------------- ----------- ----------- -----------
Capital transactions: (Note 7)
Net contract payments (Note 5) 151,822,584 44,573,255 21,014,026 183,282,466 29,949,571 28,232,406 11,430,965
Transfer to Guaranteed
Principal Account............ (3,293,914) (3,529,465) (597,641) (7,188,331) (144,983) (229,866) (22,610)
Withdrawal of funds........... (53,018,488) (7,195,621) (7,227,853) (94,798,994) (2,140,828) (2,308,910) (250,910)
Reimbursement (payment) of
accumulation unit value
fluctuation.................. 297,179 (36,540) 13,525 96,276 106,547 (13,968) 9,180
Net charge (credit) to
annuitant mortality
fluctuation reserve (Note 3D) (19,292) 198 6,036 10,573 -- -- --
Annuity benefit payments...... (16,496) (1,219) (1,767) (51,475) -- -- --
Withdrawal due to
administrative and contingent
deferred sales charges
(Note 5)..................... (2,164,257) (150,868) (610,253) (3,779,770) (57,196) (42,380) (6,504)
Divisional transfers.......... 13,204,278 (23,823,309) (2,087,808) (17,128,209) 16,366,153 10,995,557 2,473,338
------------ ------------ ----------- -------------- ----------- ----------- -----------
Net Increase in net assets
resulting from capital
transactions................. 106,811,594 9,836,431 10,508,265 60,442,536 44,079,264 36,632,839 13,633,459
------------ ------------ ----------- -------------- ----------- ----------- -----------
Total Increase................. 273,050,409 12,160,846 23,987,038 273,411,881 54,266,163 37,202,549 15,025,137
NET ASSETS, at beginning of
the year...................... 519,855,398 49,201,570 73,445,854 955,288,498 10,646,070 17,188,858 3,445,469
------------ ------------ ----------- -------------- ----------- ----------- -----------
NET ASSETS, at end of the year. $792,905,807 $ 61,362,416 $97,432,892 $1,228,700,379 $64,912,233 $54,391,407 $18,470,606
============ ============ =========== ============== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -- Flex Extra
(Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1994 and *For the Period September 12, 1994
(Date of Commencement of Operations) through December 31, 1994
<TABLE>
<CAPTION>
MML MML *Oppenheimer *Oppenheimer *Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
Operations:
Net investment income (loss).. $ 14,130,205 $ 1,104,290 $ 4,073,568 $ 42,999,115 $ (17,854) (30,626) 59,421
Net realized gain (loss)
on investments............... 3,125,395 -- 630,653 6,881,393 9 (11,608) (419)
Net change in unrealized
appreciation/depreciation
of investments............... (4,417,062) -- (8,712,464) (38,848,261) 167,774 (851,893) (109,460)
------------ ----------- ------------ ------------ ----------- ----------- -----------
Net increase (decrease) in
net assets resulting from
operations................... 12,838,538 1,104,290 (4,008,243) 11,032,247 149,929 (894,127) (50,458)
------------ ----------- ------------ ------------ ----------- ----------- -----------
Capital transactions: (Note 7)
Net contract payments (Note 5) 124,150,361 19,732,690 19,996,770 192,185,098 4,030,374 6,970,266 2,379,129
Transfer from Massachusetts
Mutual Life Insurance Company. -- -- -- -- 5,000 5,000 5,000
Transfer to Guaranteed
Principal Account............ (3,394,728) (2,213,761) (2,022,755) (5,753,617) (6,594) (14,971) --
Withdrawal of funds........... (35,997,525) (6,989,310) (4,955,527) (70,345,066) (16,725) (25,617) (10,799)
Reimbursement (payment) of
accumulation unit value
fluctuation.................. 157,736 2,572 (11,969) 179,968 3,387 (25,694) (1,180)
Net charge to annuitant
mortality fluctuation reserve
(Note 3D).................... 12,165 2,197 121 2,781 -- -- --
Annuity benefit payments...... (10,259) (1,996) (752) (46,158) -- -- --
Withdrawal due to administrative
and contingent deferred sales
charges (Note 5)............. (1,703,947) (145,446) (511,218) (3,462,017) (1,358) (859) (35)
Divisional transfers.......... 6,510,249 70,996 (16,531,669) (8,830,305) 6,482,057 11,174,860 1,123,812
------------ ----------- ------------ ------------ ----------- ----------- -----------
Net increase (decrease) in
net assets resulting from
capital transactions......... 89,724,052 10,457,942 (4,036,999) 103,930,684 10,496,141 18,082,985 3,495,927
------------ ----------- ------------ ------------ ----------- ----------- -----------
Total increase (decrease)...... 102,562,590 11,562,232 (8,045,242) 114,962,931 10,646,070 17,188,858 3,445,469
NET ASSETS, at beginning of
the year/period............... 417,292,808 37,639,338 81,491,096 840,325,567 -- -- --
------------ ----------- ------------ ------------ ----------- ----------- -----------
NET ASSETS, at end of the year. $519,855,398 $49,201,570 $73,445,854 $955,288,498 $10,646,070 $17,188,858 $3,445,469
============ =========== ============ ============ =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 1 -- Flex Extra
(Qualified)
Notes To Financial Statements
1. HISTORY
Massachusetts Mutual Variable Annuity Separate Account 1 ("Separate Account
1") is a separate investment account established on April 8, 1981 by
Massachusetts Mutual Life Insurance Company ("MassMutual"). Separate
Account 1 operates as a registered unit investment trust pursuant to the
Investment Company Act of 1940 and the rules promulgated thereunder.
MassMutual maintains three segments within Separate Account 1. The segments
are Variable Annuity Fund 4, Flex-Annuity IV (Qualified) and Flex Extra
(Qualified.) These notes and the financial statements presented herein,
with the exception of Note 8, describe and consist only of the Flex Extra
(Qualified) segment (the "Segment").
On September 13, 1994, MassMutual paid $15,000 to provide the initial
capital for the Segment's three new divisions: 1,516 shares were purchased
in the management investment company described in Note 2 supporting the
three new Oppenheimer divisions of the Segment.
2. INVESTMENT OF THE SEGMENT'S ASSETS
The Segment maintains seven divisions. The MML Equity Division invests in
shares of MML Equity Fund, the MML Money Market Division invests in shares
of MML Money Market Fund, the MML Managed Bond Division invests in shares
of MML Managed Bond Fund, the MML Blend Division invests in shares of MML
Blend Fund, the Oppenheimer Capital Appreciation Division invests in shares
of Oppenheimer Capital Appreciation Fund, the Oppenheimer Global Securities
Division invests in shares of Oppenheimer Global Securities Fund and the
Oppenheimer Strategic Bond Division invests in shares of Oppenheimer
Strategic Bond Fund.
MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend
Fund are the four series of shares of MML Series Investment Fund (the "MML
Trust"). The MML Trust is a no-load, registered, open-end, diversified
management investment company for which MassMutual acts as investment
manager. Concert Capital Management Company, Inc. ("Concert Capital"), a
wholly-owned subsidiary of DLB Acquisition Corporation, which is a
controlled subsidiary of MassMutual, serves as investment sub-advisor to
the MML Equity Fund and the equity sector of the MML Blend Fund.
Oppenheimer Capital Appreciation Fund, Oppenheimer Global Securities Fund
and Oppenheimer Strategic Bond Fund (the "Oppenheimer Funds") are part of
the Oppenheimer Variable Account Funds (the "Oppenheimer Trust"). The
Oppenheimer Trust is a registered, open-end, diversified management
investment company, for which Oppenheimer Management Corporation ("OMC")
acts as investment advisor, (effective January 5, 1996, the name of OMC was
changed to OppenheimerFunds, Inc.).
In addition to the seven divisions of the Segment, a contractowner may also
allocate funds to the Guaranteed Principal Account, which is part of
MassMutual's general account. Because of exemptive and exclusionary
provisions, interests in the Guaranteed Principal Account, which is part of
MassMutual's general account, are not registered under the Securities Act
of 1933; and the general account is not registered as an investment company
under the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
The investments in MML Trust and Oppenheimer Trust are each stated at
market value which is the net asset value of each of the respective
underlying funds.
B. Accounting for Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the
ex-dividend date.
<PAGE>
Notes To Financial Statements (Continued)
C. Federal Income Taxes
Operations of the Segment form a part of the total operations of
MassMutual, and the Segment is not taxed separately. MassMutual is taxed as
a life insurance company under the provisions of the 1986 Internal Revenue
Code, as amended. The Segment will not be taxed as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. Under existing
federal law, no taxes are payable on investment income and realized capital
gains attributable to contracts which depend on the Segment's investment
performance (the "Contracts"). Accordingly, no provision for federal income
tax has been made. MassMutual may, however, make such a charge in the
future if an unanticipated change of current law results in a company tax
liability attributable to the Segment.
D. Annuitant Mortality Fluctuation Reserve
The Segment maintains a reserve as required by regulatory authorities to
provide for mortality losses incurred. The reserve is increased quarterly
for mortality gains and its proportionate share of any increases in value.
The reserve is charged quarterly for mortality losses and its proportionate
share of any decreases in value. Transfers to or from MassMutual are then
made quarterly to adjust the Segment. Net transfers from MassMutual to the
Segment totaled $4,751 and $14,379 for the year ended December 31, 1995 and
1994, respectively. The reserve is subject to a maximum of 3% of the
Segment's annuity reserves. Any mortality losses in excess of this reserve
will be assumed by MassMutual. The reserve is not available to owners of
Contracts except to the extent necessary to cover mortality losses under
the Contracts.
E. Annuity Reserves
Annuity reserves are developed by using accepted actuarial methods and are
computed using the 1971 Individual Annuity Mortality Table, as modified.
F. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
4. CHARGES FOR MORTALITY AND EXPENSE RISKS AND ADMINISTRATIVE EXPENSES
Daily charges are made which are equivalent on an annual basis to 1.30% of
the net asset value of the Segment (the "Net Asset Value"). The mortality
and expense risk part of this charge is made daily at an annual rate which
is currently equal to 1.15%, and will not exceed 1.25% of the Net Asset
Value. The administrative expense part of this charge is made daily at an
annual rate of 0.15% of the Net Asset Value.
5. CHARGES/DEDUCTIONS FOR ADMINISTRATIVE CHARGES, CONTINGENT DEFERRED SALES
CHARGES AND PREMIUM TAXES
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
------------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract payments............ $151,878,157 $44,589,570 $21,021,718 $183,349,554 $29,960,534 $28,242,740 $11,435,149
Less deduction for premium taxes... 55,573 16,315 7,692 67,088 10,963 10,334 4,184
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net contract payments.............. $151,822,584 $44,573,255 $21,014,026 $183,282,466 $29,949,571 $28,232,406 $11,430,965
============ =========== =========== ============ =========== =========== ===========
Administrative and contingent
deferred sales charges........... $ 2,164,257 $ 150,868 $ 610,253 $ 3,779,770 $ 57,196 $ 42,380 $ 6,504
============ =========== =========== ============ =========== =========== ===========
</TABLE>
<PAGE>
Notes To Financial Statements (Continued)
<TABLE>
<CAPTION>
For the Year Ended December 31,
1994 and *For the Period MML MML Oppenheimer Oppenheimer Oppenheimer
September 12, 1994 MML Money Managed MML Capital Global Strategic
(Date of Commencement of Operations) Equity Market Bond Blend Appreciation Securities Bond
through December 31, 1994 Division Division Division Division Division Division Division
------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract
payments........................... $124,199,438 $ 19,740,490 $20,004,675 $192,261,069 $ 4,031,967 $ 6,973,021 $ 2,380,069
Less deduction for premium taxes..... 49,077 7,800 7,905 75,971 1,593 2,755 940
------------ ------------ ----------- ------------ ----------- ----------- -----------
Net contract payments................ $124,150,361 $ 19,732,690 $19,996,770 $192,185,098 $ 4,030,374 $ 6,970,266 $ 2,379,129
============ ============ =========== ============ =========== =========== ===========
Administrative charges and
contingent deferred sales charges.. $ 1,703,947 $ 145,446 $ 511,218 $ 3,462,017 $ 1,358 $ 859 $ 35
============ ============ =========== ============ =========== =========== ===========
</TABLE>
6. Purchases and Sales of Investments
<TABLE>
<CAPTION>
For the Year Ended Cost of Proceeds
December 31, 1995 Purchases from Sales
----------------- --------- ----------
<S> <C> <C>
MML Equity Fund.............................................................................. $ 132,155,448 $ 12,863,575
MML Money Market Fund........................................................................ 41,228,358 29,505,741
MML Managed Bond Fund........................................................................ 19,850,600 5,098,707
MML Blend Fund............................................................................... 149,036,317 38,437,118
Oppenheimer Capital Appreciation Fund........................................................ 45,224,493 1,184,145
Oppenheimer Global Securities Fund........................................................... 37,926,490 785,346
Oppenheimer Strategic Bond Fund.............................................................. 15,050,050 637,749
</TABLE>
7. Net Increase (Decrease) in Accumulation Units
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
----------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased................. 69,805,040 31,553,182 11,492,855 89,689,954 26,275,918 31,405,388 10,919,028
Units withdrawn and transferred
to Guaranteed Principal
Account........................ (27,009,124) (8,148,539) (4,647,340) (51,873,389) (2,048,460) (2,920,128) (299,608)
Units transferred between
divisions...................... 6,031,280 (16,535,578) (1,214,131) (8,529,788) 14,481,495 12,344,112 2,415,636
Units transferred to annuity
reserves....................... (54,503) -- (11,596) (9,911) -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase.................... 48,772,693 6,869,065 5,619,788 29,276,866 38,708,953 40,829,372 13,035,056
Units, at beginning of the
year........................... 274,538,937 34,934,809 44,101,201 516,939,760 10,580,565 19,122,038 3,515,388
------------ ------------ ------------ ------------ ------------ ------------ ------------
Units, at end of the year....... 323,311,630 41,803,874 49,720,989 546,216,626 49,289,518 59,951,410 16,550,444
============ ============ ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended
December 31, 1994 and
*For the Period
September 12, 1994 MML MML Oppenheimer Oppenheimer Oppenheimer
(Date of Commencement of MML Money Managed MML Capital Global Strategic
Operations) through Equity Market Bond Blend Appreciation Securities Bond
December 31, 1994 Division Division Division Division Division Division Division
----------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased................. 66,782,269 14,244,007 11,836,669 105,679,251 4,088,409 7,419,594 2,397,419
Units withdrawn and
transferred to Guaranteed
Principal Account.............. (22,042,825) (6,731,283) (4,456,747) (43,844,167) (25,065) (45,289) (10,913)
Units transferred
between divisions.............. 3,414,611 75,821 (9,755,340) (4,795,238) 6,517,221 11,747,733 1,128,882
Units transferred to annuity
reserves....................... (10,418) -- -- (27,976) -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)......... 48,143,637 7,588,545 (2,375,418) 57,011,870 10,580,565 19,122,038 3,515,388
Units, at beginning of the
year/period.................... 226,395,300 27,346,264 46,476,619 459,927,890 -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------
Units, at end of the year....... 274,538,937 34,934,809 44,101,201 516,939,760 10,580,565 19,122,038 3,515,388
============ ============ ============ ============ ============ ============ ============
</TABLE>
<PAGE>
Notes To Financial Statements (Continued)
8. CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 1
As discussed in Note 1, the financial statements only represent activity of
the Flex Extra (Qualified) segment of Separate Account 1. The combined net
assets as of December 31, 1995 for Separate Account 1, including the
segments pertaining to Variable Annuity Fund 4, Flex-Annuity IV (Qualified),
and Flex Extra (Qualified), are as follows:
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
----------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Assets.................. $906,582,836 $74,969,000 $114,336,772 $1,473,113,184 $65,261,384 $54,653,894 $18,472,855
Total Liabilities............. 1,121,284 16,763 60,048 2,191,982 349,151 262,487 2,249
------------ ----------- ------------ -------------- ----------- ----------- -----------
Net Assets.................... $905,461,552 $74,952,237 $114,276,724 $1,470,921,202 $64,912,233 $54,391,407 $18,470,606
============ =========== ============ ============== =========== =========== ===========
Net Assets Consist of:
Accumulation Units - Value.... $904,960,382 $74,846,594 $114,120,444 $1,470,084,849 $64,912,233 $54,391,407 $18,470,606
Annuity Reserves.............. 501,170 105,643 156,280 836,353 -- -- --
------------ ----------- ------------ -------------- ----------- ----------- -----------
Net Assets.................... $905,461,552 $74,952,237 $114,276,724 $1,470,921,202 $64,912,233 $54,391,407 $18,470,606
============ =========== ============ ============== =========== =========== ===========
</TABLE>
9. Distribution Agreement
MML Investors Services, Inc. ("MMLISI"), a wholly-owned subsidiary of
MassMutual, acts as the principal underwriter of the Contracts. MMLISI is
registered as a broker-dealer under the Securities Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc. The
Contracts are sold by registered representatives of MMLISI who are also
insurance agents of MassMutual under state insurance law.
<PAGE>
Report Of Independent Accountants
To the Contract Owners of Massachusetts Mutual Variable Annuity Separate
Account 2 and the Board of Directors of Massachusetts Mutual Life Insurance
Company
We have audited the statement of assets and liabilities of the Flex Extra
segment (Non-Qualified) of Massachusetts Mutual Variable Annuity Separate
Account 2 (comprising, respectively, the MML Equity Division, MML Money Market
Division, MML Managed Bond Division, MML Blend Division, Oppenheimer Capital
Appreciation Division, Oppenheimer Global Securities Division and Oppenheimer
Strategic Bond Division - the "Divisions") as of December 31, 1995, and the
related statements of operations and changes in net assets for the periods
indicated thereon. These financial statements are the responsibility of the
Account's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included verification of investments owned as of December 31, 1995, by
examination of the records of MML Series Investment Fund and by confirmation
with Oppenheimer Variable Account Funds. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
Divisions constituting the Flex Extra segment (Non-Qualified) of Massachusetts
Mutual Variable Annuity Separate Account 2 as of December 31, 1995, the results
of their operations and the changes in their net assets for the periods
indicated thereon, in conformity with generally accepted accounting principles.
Also, in our opinion, based upon these audits and our previous audits, made in
accordance with generally accepted auditing standards, of the financial
statements of Massachusetts Mutual Variable Annuity Separate Account 2 for each
respective period indicated thereon, and upon which we expressed an unqualified
opinion, the financial information under the caption "Condensed Financial
Information" for each date appearing in the Prospectus, is fairly stated in all
material respects in relation to the financial statements from which it has been
derived.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 9, 1996
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 2 - Flex Extra
(Non-Qualified)
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment
Number of shares (Note 2)....... 7,558,445 21,481,411 2,776,075 14,030,273 614,046 1,247,546 2,503,408
============ =========== =========== ============ =========== =========== ===========
Identified cost (Note 3B)....... $158,096,025 $21,481,411 $33,956,609 $250,230,426 $17,783,365 $18,886,351 $11,905,678
============ =========== =========== ============ =========== =========== ===========
Value (Note 3A)................. $195,944,397 $21,481,411 $34,557,120 $287,886,796 $21,006,528 $18,713,182 $12,291,734
Dividends receivable............. 7,433,978 89,757 534,866 8,520,779 -- -- --
Receivable for accumulation units
sold............................ 272,946 150,050 225,914 185,256 42,795 20,346 111,607
Divisional transfers pending
settlement...................... 47,237 (35,824) (9,382) (4,031) 1,000 1,000 --
Other assets..................... 1,838 -- 15 827 -- -- --
------------ ----------- ----------- ------------ ----------- ----------- -----------
Total assets................. 203,700,396 21,685,394 35,308,533 296,589,627 21,050,323 18,734,628 12,403,341
------------ ----------- ----------- ------------ ----------- ----------- -----------
LIABILITIES
Redemptions pending settlement... 16,562 12,385 -- 13,753 1,832 -- --
Annuitant mortality fluctuation
reserve (Note 3D)............... 6,524 1,666 706 7,441 432 -- --
Payable to Massachusetts Mutual
Life Insurance Company.......... 18,636 2,099 4,114 34,774 2,703 6,535 6,566
------------ ----------- ----------- ------------ ----------- ----------- -----------
Total liabilities............ 41,722 16,150 4,820 55,968 4,967 6,535 6,566
------------ ----------- ----------- ------------ ----------- ----------- -----------
NET ASSETS $203,658,674 $21,669,244 $35,303,713 $296,533,659 $21,045,356 $18,727,993 $12,396,775
============ =========== =========== ============ =========== =========== ===========
Net Assets consist of:
Accumulation units - value....... $203,441,205 $21,613,705 $35,280,167 $296,285,642 $21,030,944 $18,727,993 $12,396,775
Annuity reserves (Note 3E)....... 217,469 55,539 23,546 248,017 14,412 -- --
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net assets................... $203,658,674 $21,669,244 $35,303,713 $296,533,659 $21,045,356 $18,727,993 $12,396,775
============ =========== =========== ============ =========== =========== ===========
Accumulation units (Note 7)
Contractowners.................. 82,979,376 14,727,577 18,010,100 131,775,179 15,964,333 20,642,408 11,108,034
Massachusetts Mutual Life
Insurance Company.............. -- -- -- -- 5,000 5,000 5,000
------------ ----------- ----------- ------------ ----------- ----------- -----------
Total units...................... 82,979,376 14,727,577 18,010,100 131,775,179 15,969,333 20,647,408 11,113,034
============ =========== =========== ============ =========== =========== ===========
NET ASSET VALUE PER ACCUMULATION
UNIT
December 31, 1995............... $2.45 $1.47 $1.96 $2.25 $1.32 $ .91 $1.12
December 31, 1994............... 1.89 1.41 1.67 1.85 1.01 .90 .98
December 31, 1993............... 1.84 1.37 1.75 1.83 -- -- --
December 31, 1992............... 1.70 1.35 1.59 1.69 -- -- --
December 31, 1991............... 1.56 1.33 1.50 1.56 -- -- --
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 2 - Flex Extra
(Non-Qualified)
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income
Dividends (Note 3B).............. $ 7,439,180 $ 880,528 $ 1,944,892 $ 16,392,423 $ 34,239 $ 225,165 $ 581,617
Expenses
Mortality and expense risk
fees and administrative
expenses (Note 4)............... 2,076,882 210,877 376,293 3,327,321 141,551 158,022 86,206
------------ ------------ ------------- ------------ ------------ ------------ ------------
Net investment income (loss)
(Note C)........................ 5,362,298 669,651 1,568,599 13,065,102 (107,312) 67,143 495,411
------------ ------------ ------------- ------------ ------------ ------------ ------------
Net realized and unrealized
gain (loss) on investments
Net realized gain (loss) on
investments (Notes 3B, 3C
and 6).......................... 1,554,530 -- (44,762) 2,519,294 170,354 (100,374) (1,942)
Change in net unrealized
appreciation/depreciation
of investments................. 33,768,936 -- 3,111,870 34,277,378 3,155,742 137,434 441,853
------------ ------------ ------------- ------------ ------------ ------------ ------------
Net gain on investments.......... 35,323,466 -- 3,067,108 36,796,672 3,326,096 37,060 439,911
------------ ------------ ------------- ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations....... $40,685,764 $ 669,651 $ 4,635,707 $ 49,861,774 $ 3,218,784 $ 104,203 $ 935,322
============ ============ ============= ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 2 - Flex Extra
(Non-Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
------------ ----------- ----------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
Operations:
Net investment income (loss).. $ 5,362,298 $ 669,651 $ 1,568,599 $ 13,065,102 $ (107,312) $ 67,143 $ 495,411
Net realized gain (loss)
on investments.............. 1,554,530 -- (44,762) 2,519,294 170,354 (100,374) (1,942)
Change in net unrealized
appreciation/depreciation
of investments.............. 33,768,936 -- 3,111,870 34,277,378 3,155,742 137,434 441,853
------------ ----------- ----------- ------------ ----------- ---------- ----------
Net increase in net assets
resulting from operations... 40,685,764 669,651 4,635,707 49,861,774 3,218,784 104,203 935,322
------------ ----------- ----------- ------------ ----------- ---------- ----------
Capital transactions: (Note 7)
Net contract payments
(Note 5)................... 39,732,947 16,427,475 7,615,589 41,088,235 10,141,274 9,762,193 9,272,678
Transfer to Guaranteed
Principal Account............ (918,951) (385,908) (245,777) (1,173,515) (31,812) (29,799) (41,245)
Withdrawal of funds.......... (5,561,082) (420,467) (1,259,499) (11,545,884) (293,306) (294,919) (193,739)
Reimbursement (payment) of
accumulation unit value
fluctuation................ 54,493 (2,313) (1,338) 67,822 20,250 (14,029) 1,008
Net charge (credit) to
annuitant mortality
fluctuation
reserve (Note 3D).......... (9,504) 705 -- (7,868) (5,529) -- --
Annuity benefit payments (21,041) (6,184) (1,713) (18,844) (625) -- --
Withdrawal due to
administrative and contingent
deferred sales charges
(Note 5).................... (302,371) (15,657) (136,011) (569,650) (9,339) (8,178) (3,563)
Divisional transfers......... 4,882,414 (9,275,448) 63,361 (3,239,220) 3,728,547 3,003,268 837,078
------------ ----------- ----------- ------------ ----------- ---------- ----------
Net increase in net assets
resulting from capital
transactions............... 37,856,905 6,322,203 6,034,612 24,601,076 13,549,460 12,418,536 9,872,217
------------ ----------- ----------- ------------ ----------- ---------- ----------
Total increase................. 78,542,669 6,991,854 10,670,319 74,462,850 16,768,244 12,522,739 10,807,539
------------ ----------- ----------- ------------ ----------- ---------- ----------
NET ASSETS, at beginning of
the year....................... 125,116,005 14,677,390 24,633,394 222,070,809 4,277,112 6,205,254 1,589,236
------------ ----------- ----------- ------------ ----------- ---------- ----------
NET ASSETS, at end of the year. $203,658,674 $21,669,244 $35,303,713 $296,533,659 $21,045,356 $18,727,993 $12,396,775
============ =========== =========== ============ =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 2 - Flex Extra
(Non-Qualified)
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended December 31, 1994 and *For the Period Ended
September 12, 1994 (Date of Commencement of Operations) through
December 31, 1994
<TABLE>
<CAPTION>
MML MML *Oppenheimer *Oppenheimer *Oppenheimer
MML Money Managed MML Capital Global Strategic
Equity Market Bond Blend Appreciation Securities Bond
Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net
assets
Operations:
Net investment income (loss).. $ 3,399,510 $ 265,656 $ 1,357,551 $ 9,929,275 $ (7,225) $ (11,196) $ 31,555
Net realized gain (loss)
on investments............... 1,543,681 -- (53,935) 1,886,851 1,517 (1,212) (868)
Net change in unrealized
appreciation/depreciation
of investments............... (1,906,475) -- (2,572,839) (9,367,035) 67,421 (310,602) (55,796)
------------ ----------- ----------- ------------ ---------- ---------- ----------
Net increase (decrease) in
net assets resulting from
operations................... 3,036,716 265,656 (1,269,223) 2,449,091 61,713 (323,010) (25,109)
------------ ----------- ----------- ------------ ---------- ---------- ----------
Capital transactions: (Note 7)
Net contract payments
(Note 5)..................... 28,987,603 7,700,289 6,495,627 46,404,188 2,100,518 3,476,199 1,249,539
Transfer from Massachusetts
Mutual Life Insurance
Company...................... -- -- -- -- 5,000 5,000 5,000
Transfer to Guaranteed
Principal Account............ (353,860) (754,911) (653,202) (2,118,111) (7) (7) --
Withdrawal of funds........... (4,475,140) (538,333) (1,273,879) (11,121,493) (11,592) (91,601) (773)
Reimbursement (payment) of
accumulation unit value
fluctuation.................. (36,411) 348 12,587 (185,474) (9,137) (20,593) (44)
Net charge (credit) to
annuitant mortality
fluctuation reserve
(Note 3D).................... 1,189 746 (98) (519) -- -- --
Annuity benefit payments...... (18,779) (6,356) (1,623) (16,762) -- -- --
Withdrawal due to
administrative and contingent
deferred sales charges
(Note 5)..................... (264,665) (18,195) (132,583) (525,012) (619) (475) --
Divisional transfers.......... (439,289) (551,230) (2,354,729) (2,306,352) 2,131,236 3,159,741 360,623
------------ ----------- ----------- ------------ ---------- ---------- ----------
Net increase in net assets
resulting from capital
transactions.................. 23,400,648 5,832,358 2,092,100 30,130,465 4,215,399 6,528,264 1,614,345
------------ ----------- ----------- ------------ ---------- ---------- ----------
Total increase................. 26,437,364 6,098,014 822,877 32,579,556 4,277,112 6,205,254 1,589,236
NET ASSETS, at beginning of
the year/period............... 98,678,641 8,579,376 23,810,517 189,491,253 -- -- --
------------ ----------- ----------- ------------ ---------- ---------- ----------
NET ASSETS, at end of the year. $125,116,005 $14,677,390 $24,633,394 $222,070,809 $4,277,112 $6,205,254 $1,589,236
============ =========== =========== ============ ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
<PAGE>
Massachusetts Mutual Variable Annuity Separate Account 2
Notes To Financial Statements
1. HISTORY
Massachusetts Mutual Variable Annuity Separate Account 2 ("Separate Account
2") is a separate investment account established on October 14, 1981 by
Massachusetts Mutual Life Insurance Company ("MassMutual"). Separate Account
2 operates as a registered unit investment trust pursuant to the Investment
Company Act of 1940 and the rules promulgated thereunder.
MassMutual maintains two segments within Separate Account 2. The segments are
Flex-Annuity IV (Non-Qualified), and Flex Extra (Non-Qualified). These notes
and the financial statements presented herein, with the exception of Note 8,
describe and consist only of the Flex Extra (Non-Qualified) segment, (the
"Segment").
On September 13, 1994, MassMutual paid $15,000 to provide the initial capital
for the Segment's three new divisions: 1,516 shares were purchased in the
management investment company described in Note 2 supporting the three new
Oppenheimer divisions of the Segment.
2. INVESTMENT OF THE SEGMENT'S ASSETS
The Segment maintains seven divisions. The MML Equity Division invests in
shares of MML Equity Fund, the MML Money Market Division invests in shares of
MML Money Market Fund, the MML Managed Bond Division invests in shares of MML
Managed Bond Fund, the MML Blend Division invests in shares of MML Blend
Fund, the Oppenheimer Capital Appreciation Division invests in shares of
Oppenheimer Capital Appreciation Fund, the Oppenheimer Global Securities
Division invests in shares of Oppenheimer Global Securities Fund and the
Oppenheimer Strategic Bond Division invests in shares of Oppenheimer
Strategic Bond Fund.
MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend
Fund are the four series of shares of MML Series Investment Fund (the "MML
Trust"). The MML Trust is a no-load, registered, open-end, diversified
management investment company for which MassMutual acts as investment
manager. Concert Capital Management Company, Inc. ("Concert Capital"), a
wholly-owned subsidiary of DLB Acquisition Corporation, which is a controlled
subsidiary of MassMutual, serves as investment sub-advisor to the MML Equity
Fund and the equity sector of the MML Blend Fund.
Oppenheimer Capital Appreciation Fund, Oppenheimer Global Securities Fund and
Oppenheimer Strategic Bond Fund (the "Oppenheimer Funds") are part of the
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"). The Oppenheimer
Trust is a registered, open-end, diversified management investment company,
for which Oppenheimer Management Corporation ("OMC") acts as investment
advisor, (effective January 5, 1996, the name of OMC was changed to
OppenheimerFunds, Inc.).
In addition to the seven divisions of the Segment, a contractowner may also
allocate funds to the Guaranteed Principal Account, which is part of
MassMutual's general account. Because of exemptive and exclusionary
provisions, interests in the Guaranteed Principal Account, which is part of
MassMutual's general account, are not registered under the Securities Act of
1933 and the general account is not registered as an investment company under
the Investment Company Act of 1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Segment in preparation of the financial statements in
conformity with generally accepted accounting principles.
A. Investment Valuation
The investments in MML Trust and Oppenheimer Trust are each stated at market
value which is the net asset value of each of the respective underlying
funds.
B. Accounting for Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
<PAGE>
Notes To Financial Statements (Continued)
C. Federal Income Taxes
Operations of the Segment form a part of the total operations of MassMutual,
and the Segment is not taxed separately. MassMutual is taxed as a life
insurance company under the provisions of the 1986 Internal Revenue Code, as
amended. The Segment will not be taxed as a "regulated investment company"
under Subchapter M of the Internal Revenue Code. Under existing federal law,
no taxes are payable on investment income and realized capital gains
attributable to contracts which depend on the Segment's investment
performance (the "Contracts"). Accordingly, no provision for federal income
tax has been made. MassMutual may, however, make such a charge in the future
if an unanticipated change of current law results in a company tax liability
attributable to the Segment.
D. Annuitant Mortality Fluctuation Reserve
The Segment maintains a reserve as required by regulatory authorities to
provide for mortality losses incurred. The reserve is increased quarterly for
mortality gains and its proportionate share of any increases in value. The
reserve is charged quarterly for mortality losses and its proportionate share
of any decreases in value. Transfers to or from MassMutual are then made
quarterly to adjust the Segment. Net transfers from the Segment to MassMutual
totaled $20,526 for the year ended December 31, 1995 and net transfers from
MassMutual to the Segment totaled $10 for the year ended December 31, 1994.
The reserve is subject to a maximum of 3% of the Segment's annuity reserves.
Any mortality losses in excess of this reserve will be assumed by MassMutual.
The reserve is not available to owners of Contracts except to the extent
necessary to cover mortality losses under the Contracts.
E. Annuity Reserves
Annuity reserves are developed by using accepted actuarial methods and are
computed using the 1971 Individual Annuity Mortality Table, as modified.
F. Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
4. CHARGES FOR MORTALITY AND EXPENSE RISKS AND ADMINISTRATIVE EXPENSES
Daily charges are made which are equivalent on an annual basis to 1.30% of
the net asset value of the Segment (the "Net Asset Value"). The mortality and
expense risk part of this charge is made daily at an annual rate which is
currently equal to 1.15%, and will not exceed 1.25% of the Net Asset Value.
The administrative expense part of this charge is made daily at an annual
rate of 0.15% of the Net Asset Value.
5. CHARGES/DEDUCTIONS FOR ADMINISTRATIVE CHARGES, CONTINGENT DEFERRED SALES
CHARGES AND PREMIUM TAXES
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
------------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract payments.............. $39,793,885 $16,452,670 $7,627,269 $41,151,252 $10,156,830 $9,777,165 $9,286,899
Less deduction for premium taxes..... 60,938 25,195 11,680 63,017 15,554 14,972 14,221
----------- ----------- ---------- ----------- ----------- ---------- ----------
Net contract payments................ $39,732,947 $16,427,475 $7,615,589 $41,088,235 $10,141,276 $9,762,193 $9,272,678
=========== =========== ========== =========== =========== ========== ==========
Administrative and contingent
deferred sales charges.............. $ 302,371 $ 15,657 $ 136,011 $ 569,650 $ 9,339 $ 8,178 $ 3,563
=========== =========== ========== =========== =========== ========== ==========
</TABLE>
<PAGE>
Notes To Financial Statements (Continued)
<TABLE>
<CAPTION>
For the Year Ended December 31, MML MML *Oppenheimer *Oppenheimer *Oppenheimer
1994 and *For the Period September MML Money Managed MML Capital Global Strategic
12, 1994 (Date of Commencement of Equity Market Bond Blend Appreciation Securities Bond
Operations) through December 31, 1994 Division Division Division Division Division Division Division
------------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross contract
payments......................... $ 29,036,971 $ 7,713,403 $ 6,506,689 $ 46,483,218 $ 2,104,095 $ 3,482,119 $1,251,667
Less deduction for premium taxes... 49,368 13,114 11,062 79,030 3,577 5,920 2,128
------------ ----------- ----------- ----------- ----------- ----------- ----------
Net contract payments.............. $ 28,987,603 $ 7,700,289 $ 6,495,627 $ 46,404,188 $ 2,100,518 $ 3,476,199 $1,249,539
============ =========== =========== ============ =========== =========== ==========
Administrative charges and contingent
deferred sales charges............ $ 264,665 $ 18,195 $ 132,583 $ 525,012 $ 619 $ 475 $ --
============ =========== =========== ============ =========== =========== ==========
</TABLE>
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
For the Year Ended Cost of Proceeds
December 31, 1995 Purchases from Sales
------------------ ------------ ------------
<S> <C> <C>
MML Equity Fund....................................................... $45,582,307 $5,081,983
MML Money Market Fund................................................. 19,286,487 12,413,729
MML Managed Bond Fund................................................. 9,402,218 2,132,058
MML Blend Fund........................................................ 44,781,803 8,816,169
Oppenheimer Capital Appreciation Fund................................. 14,628,536 1,097,004
Oppenheimer Global Securities Fund.................................... 13,630,287 1,019,634
Oppenheimer Strategic Bond Fund....................................... 12,258,351 1,995,695
</TABLE>
7. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
------------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased..................... 17,916,248 11,386,818 4,115,036 19,762,011 8,800,567 10,789,436 8,899,205
Units withdrawn and transferred to
Guaranteed Principal Account...... (3,139,770) (604,506) (905,078) (6,462,251) (280,904) (365,903) (228,731)
Units transferred
between divisions................. 2,216,906 (6,437,306) 20,475 (1,599,514) 3,215,238 3,320,734 821,073
Units transferred
to annuity reserves............... (16,118) -- -- (16,904) (16,363) -- --
------------ ----------- ----------- ----------- ----------- ----------- ----------
Net increase........................ 16,977,266 4,345,006 3,230,433 11,683,342 11,718,538 13,744,267 9,491,547
Units, at beginning of the year..... 66,002,110 10,382,571 14,779,667 120,091,837 4,250,795 6,903,141 1,621,487
------------ ----------- ----------- ----------- ----------- ----------- ----------
Units, at end of the year........... 82,979,376 14,727,577 18,010,100 131,775,179 15,969,333 20,647,408 11,113,034
============ =========== =========== =========== =========== =========== ==========
<CAPTION>
For the Year Ended December 31, MML MML Oppenheimer Oppenheimer Oppenheimer
1994 and *For the Period September MML Money Managed MML Capital Global Strategic
12, 1994 (Date of Commencement of Equity Market Bond Blend Appreciation Securities Bond
Operations) through December 31, 1994 Division Division Division Division Division Division Division
------------------------------------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units purchased..................... 15,509,880 5,525,819 3,842,302 25,306,048 2,125,714 3,682,950 1,259,583
Units withdrawn and transferred to
Guaranteed Principal Account...... (2,727,097) (945,414) (1,224,941) (7,581,302) (12,291) (98,103) (779)
Units transferred
between divisions................. (244,004) (398,118) (1,404,765) (1,252,074) 2,137,372 3,318,294 362,683
Units transferred
to annuity reserves............... (7,365) -- (2,075) (20,431) -- -- --
------------ ----------- ----------- ----------- ----------- ----------- ----------
Net increase........................ 12,531,414 4,182,287 1,210,521 16,452,241 4,250,795 6,903,141 1,621,487
Units, at beginning of the
year/period....................... 53,470,696 6,200,284 13,569,146 103,639,596 -- -- --
------------ ----------- ----------- ----------- ----------- ----------- ----------
Units, at end of the year........... 66,002,110 10,382,571 14,779,667 120,091,837 4,250,795 6,903,141 1,621,487
============ =========== =========== =========== =========== =========== ==========
</TABLE>
<PAGE>
Notes To Financial Statements (Continued)
8. CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 2
As discussed in Note 1, the financial statements only represent activity of
the Flex Extra (Non-Qualified) segment of Separate Account 2. The combined
net assets as of December 31, 1995 for Separate Account 2, including the
segments pertaining to Flex-Annuity IV (Non-Qualified) and Flex Extra
(Non-Qualified), are as follows:
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer Oppenheimer
MML Money Managed MML Capital Global Strategic
For the Year Ended Equity Market Bond Blend Appreciation Securities Bond
December 31, 1995 Division Division Division Division Division Division Division
------------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Assets........................ $215,176,284 $26,993,362 $37,607,095 $324,752,460 $21,050,323 $18,734,528 $12,403,341
Total Liabilities................... 46,686 17,071 6,670 64,497 4,967 6,535 6,566
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net Assets.......................... $215,129,598 $26,976,291 $37,600,425 $324,687,963 $21,045,356 $18,727,993 $12,396,775
============ =========== =========== ============ =========== =========== ===========
Net Assets Consist of:
Accumulation Units - Value.......... $214,773,901 $26,905,338 $37,518,691 $324,252,008 $21,030,944 $18,727,993 $12,396,775
Annuity Reserve..................... 355,697 70,953 81,734 435,955 14,412 -- --
------------ ----------- ----------- ------------ ----------- ----------- -----------
Net Assets.......................... $215,129,598 $26,976,291 $37,600,425 $324,687,963 $21,045,356 $18,727,993 $12,396,775
============ =========== =========== ============ =========== =========== ===========
</TABLE>
9. DISTRIBUTION AGREEMENT
MML Investors Services, Inc. ("MMLISI"), a wholly-owned subsidiary of
MassMutual, acts as the principal underwriter of the Contracts. MMLISI is
registered as a broker-dealer under the Securities Exchange Act of 1934 and
is a member of the National Association of Securities Dealers, Inc. The
Contracts are sold by registered representatives of MMLISI who are also
insurance agents of MassMutual under state insurance law.
Offered through MML Investors Services, Inc., Springfield, Massachusetts
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
---------------
AUDIT OF SUPPLEMENTAL FINANCIAL STATEMENTS
for the years ended December 31, 1995, 1994 and 1993
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Policyholders of
Massachusetts Mutual Life Insurance Company
We have audited the supplemental statement of financial position of
Massachusetts Mutual Life Insurance Company as of December 31, 1995 and 1994,
and the related supplemental statements of income, changes in policyholders'
contingency reserves and cash flows for each of the years in the three-year
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The supplemental financial statements give retroactive effect to the merger
of Massachusetts Mutual Life Insurance Company and Connecticut Mutual Life
Insurance Company on March 1, 1996, which has been accounted for as a pooling of
interests as described in the notes to the supplemental financial statements.
Generally accepted accounting principles preclude giving effect to a consummated
business combination accounted for by the pooling of interests methods in
financial statements that do not include the date of consummation. These
financial statements do not extend through the date of consummation; however,
they will become the historical consolidated financial statements of
Massachusetts Mutual Life Insurance Company after financial statements covering
the date of consummation of the business combination are issued. We did not
audit the financial statements of Connecticut Mutual Life Insurance Company
which statements reflect total assets of 25% as of December 31, 1995 and 1994,
revenue of 26%, 26%, and 24% and net gain from operations of 22%, 6% and 17% for
each of the three years in the period ended December 31, 1995, respectively.
Those statements were audited by other auditors whose reports have been
furnished to us, and our opinion, insofar as it relates to the amounts included
for Connecticut Mutual Life Insurance Company, is based solely on the report of
other auditors.
1
<PAGE>
In our opinion, based on our audits and the reports of other auditors, the
supplemental financial statements referred to above present fairly, in all
material respects, the financial position of Massachusetts Mutual Life Insurance
Company at December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
1995 in conformity with generally accepted accounting principles applicable
after financial statements are issued for a period which includes the date of
consummation of the business combination.
As discussed in Note 10 to the financial statements, Massachusetts Mutual
Life Insurance Company entered into a definitive agreement for the sale of a
wholly-owned insurance subsidiary.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
March 1, 1996
2
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENTAL STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
December 31,
1995 1994
-------- --------
(In Millions)
<S> <C> <C>
Assets:
Bonds $23,625.1 $23,298.2
Stocks 416.1 246.1
Mortgage loans 3,872.4 4,066.2
Real Estate:
Investments 1,502.8 1,673.7
Other 107.1 108.8
Other investments 1,489.9 1,218.4
Policy loans 4,518.4 4,259.8
Cash and short-term investments 2,342.8 2,255.5
Investment and insurance amounts receivable 1,059.3 1,069.7
Separate account assets 11,309.5 8,530.5
Other assets 174.6 153.3
--------- ---------
$50,418.0 $46,880.2
========= =========
</TABLE>
See notes to supplemental financial statements.
3
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENTAL STATEMENT OF FINANCIAL POSITION, Continued
<TABLE>
<CAPTION>
December 31,
1995 1994
-------- --------
(In Millions)
<S> <C> <C>
Liabilities:
Policyholders' reserves and funds $32,893.1 $32,295.1
Policyholders' dividends 832.6 837.5
Policy claims and other benefits 395.5 415.9
Federal income taxes 338.5 229.9
Asset valuation reserve 566.8 470.5
Investment reserves 109.9 130.8
Separate account reserves and liabilities 11,309.6 8,529.5
Amounts due on investments purchased and
other liabilities 1,371.1 1,401.9
--------- ---------
47,817.1 44,311.1
Policyholders' contingency reserves 2,600.9 2,569.1
--------- ---------
$50,418.0 $46,880.2
========= =========
</TABLE>
See notes to supplemental financial statements.
4
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENTAL STATEMENT OF INCOME
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Income:
Premium income $5,727.7 $6,177.2 $6,408.3
Net investment and other income 2,898.4 2,803.1 2,885.7
-------- -------- --------
8,626.1 8,980.3 9,294.0
-------- -------- --------
Benefits and expenses:
Policy benefits and payments 5,152.2 5,449.6 5,652.9
Addition to policyholders' reserves and
funds 1,205.4 1,263.2 1,291.1
Commissions and operating expenses 833.7 959.3 953.5
State taxes, licenses and fees 89.4 105.6 114.9
Merger restructuring costs 44.0 0.0 0.0
-------- -------- --------
7,324.7 7,777.7 8,012.4
-------- -------- --------
Net gain before federal income taxes and
dividends 1,301.4 1,202.6 1,281.6
Federal income taxes 206.2 139.7 211.8
-------- -------- --------
Net gain from operations before dividends 1,095.2 1,062.9 1,069.8
Dividends to policyholders 819.0 824.7 817.5
-------- -------- --------
Net gain from operations 276.2 238.2 252.3
Net realized capital loss (85.8) (164.3) (96.0)
-------- -------- --------
Net income $ 190.4 $ 73.9 $ 156.3
======== ======== ========
</TABLE>
See notes to supplemental financial statements.
5
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENTAL STATEMENT OF CHANGES IN
POLICYHOLDERS' CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Policyholders' contingency reserves, beginning
of year $2,569.1 $2,470.2 $2,131.2
-------- -------- --------
Increases (decreases) due to:
Net income 190.4 73.9 156.3
Net unrealized capital gain 88.7 29.5 67.9
Merger restructuring costs, net of tax (45.4) 0.0 0.0
Surplus notes 0.0 100.0 250.0
Change in asset valuation and investment
reserves (75.6) (38.2) (133.3)
Change in accounting for mortgage-backed
securities 0.0 44.5 0.0
Change in valuation bases of policyholders'
reserves (108.2) (51.1) 0.0
Change in non-admitted assets and other (18.1) (59.7) (1.9)
-------- -------- --------
Policyholders' contingency reserves, end of
year $2,600.9 $2,569.1 $2,470.2
======== ======== ========
</TABLE>
See notes to supplemental financial statements.
6
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SUPPLEMENTAL STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31,
1995 1994 1993
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Operating activities:
Net income $ 190.4 $ 73.9 $ 156.3
Addition to policyholders' reserves and
funds, net of transfers to separate
accounts 575.8 546.9 389.6
Net realized capital loss 85.8 164.3 96.0
Other changes (25.2) 124.2 131.1
--------- -------- --------
Net cash provided by operating activities 826.8 909.3 773.0
--------- -------- --------
Investing activities:
Loans and purchases of investments 10,364.2 8,351.6 8,715.1
Sales or maturities of investments and
receipts from repayment of loans 9,671.1 7,468.7 7,607.3
--------- -------- --------
Net cash used in investing activities 693.1 882.9 1,107.8
--------- -------- --------
Financing activities:
Issuance of surplus notes 0.0 100.0 250.0
Repayment of notes payable and other
borrowings (46.4) (125.0) (100.0)
Proceeds from issuance of notes payable
and other borrowings 0.0 0.0 120.3
--------- -------- --------
Net cash provided by (used in) financing
activities (46.4) (25.0) 270.3
--------- -------- --------
Increase (decrease) in cash and
short-term investments 87.3 1.4 (64.5)
Cash and short-term investments,
beginning of year 2,255.5 2,254.1 2,318.6
--------- -------- --------
Cash and short-term investments, end of
year $ 2,342.8 $2,255.5 $2,254.1
========= ======== ========
</TABLE>
See notes to supplemental financial statements.
7
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS
Massachusetts Mutual Life Insurance Company ("the Company") is a mutual life
insurance company and as such has no shareholders. The Company's primary
business is individual life insurance, annuity and disability products
distributed through career agents. The Company also provides a wide range of
group life, health and pension products and services, as well investment
services to individuals, corporations and institutions in all 50 states and the
District of Columbia.
On March 1, 1996, the operations of the former Connecticut Mutual Life Insurance
Company ("Connecticut Mutual") were merged into the Company. For the purposes
of this presentation, these supplemental financial statements give retroactive
effect as if the merger had occurred on January 1, 1993 in conformity with the
practices of the National Association of Insurance Commissioners and the
accounting practices prescribed or permitted by the Division of Insurance of the
Commonwealth of Massachusetts and the Department of Insurance of the State of
Connecticut. This merger was accounted for under the pooling of interests
method of accounting. The financial information is not necessarily indicative
of the results that would have been recorded had the merger actually occurred on
January 1, 1993, nor is it indicative of future results. After the merger,
future sales of new products will be predominantly those developed by
Massachusetts Mutual. Additionally, as part of the merger plan, employee
positions have been or will be eliminated over a three-year period,
predominantly through voluntary terminations. In 1995, charges for employee
separation and transaction expenses directly attributable to the merger were
$44 million for Massachusetts Mutual (the Company prior to the merger) and $45
million, net of tax, for Connecticut Mutual. The expenses incurred by
Massachusetts Mutual were recorded in the statement of income and the expenses
incurred by Connecticut Mutual were recorded as a component of changes in
policyholders' contingency reserves, as permitted by each company's regulatory
authority. The Company estimates an additional $58 million of merger-related
expenses will be incurred after the merger date.
It is believed the Company will achieve operating cost savings through
consolidation of certain operations and the elimination of redundant costs. In
particular, the Company expects expense savings in 1996 and 1997 will more than
offset the merger costs, and the level of annual savings will continue to grow
in 1998 and beyond at the rate of inflation. The extent to which cost savings
will be achieved will be influenced by many factors, including economic
conditions, inflation and unanticipated changes in business activities.
Accordingly, there can be no assurance the benefits anticipated to arise out of
the merger will, in fact, be achieved.
These financial statements do not extend through to the date of the merger;
however, they will become the historical financial statements of the Company
after financial statements covering the date of the merger have been issued, but
do not include the adjustments that have been permitted by insurance regulatory
authorities to be made as of the date of the merger. Policyholder reserves
attributable to the disability income line of business will be strengthened by
approximately $67 million, real estate valuation reserves will increase by $50
million and the prepaid pension asset will increase by $39 million.
1. Summary of Accounting Practices
The accompanying supplemental financial statements, except as to form, have
been prepared in conformity with the practices of the National Association
of Insurance Commissioners and the accounting practices prescribed or
permitted by the Division of Insurance of the
8
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
Commonwealth of Massachusetts and the Department of Insurance of the State
of Connecticut, which are currently considered generally accepted accounting
principles for mutual life insurance companies and their life insurance
subsidiaries.
The Financial Accounting Standards Board, which has no role in establishing
regulatory accounting practices, issued Interpretation 40, Applicability of
Generally Accepted Accounting Principles to Mutual Life Insurance and Other
Enterprises, and Statement of Financial Accounting Standards No. 120,
Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long-Duration Participating Contracts.
The American Institute of Certified Public Accountants, which also has no
role in establishing regulatory accounting practices, issued Statement of
Position 95-1, Accounting for Certain Insurance Activities of Mutual Life
Insurance Enterprises. These pronouncements will require mutual life
insurance companies to modify their financial statements in order to
continue to be in accordance with generally accepted accounting principles,
effective for financial statements issued for 1996 and prior periods
presented. The manner in which policy reserves, new business acquisition
costs, asset valuations and related tax effects are recorded will change.
Management has not determined the impact of such changes on the Company's
Statement of Income, but believes implementation of these pronouncements
will cause policyholders' contingency reserves to increase.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosures of contingent assets and liabilities,
at the date of the financial statements. Management must also make
estimates and assumptions that affect the amounts of revenues and expenses
during the reporting period. Future events, including changes in the levels
of mortality, morbidity, interest rates and asset valuations, could cause
actual results to differ from the estimates used in the financial
statements.
The following is a description of the Company's current principal
accounting policies and practices.
a. Investments
Bonds and stocks are valued in accordance with rules established by the
National Association of Insurance Commissioners. Generally, bonds are
valued at amortized cost, preferred stocks in good standing at cost,
and common stocks, except for unconsolidated subsidiaries, at fair
value based upon quoted market value.
As promulgated by the National Association of Insurance Commissioners,
Massachusetts Mutual adopted the retrospective method of accounting for
amortization of premium and discount on mortgage backed securities as
of December 31, 1994. Prepayment assumptions for mortgage backed
securities were obtained from a prepayment model, which factors in
mortgage type, seasoning, coupon, current interest rate and the
economic environment. The effect of this change, $44.5 million, was
recorded as of December 31, 1994 as an increase to policyholders'
contingency reserves on the Statement of Financial Position and had no
material effect on 1995 net income. Through December 31, 1994,
MassMutual amortized premium and discount on bonds
9
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
into investment income over the stated lives of the securities.
Connecticut Mutual used the retrospective method of amortization.
Mortgage loans are valued at principal less unamortized discount. Real
estate is valued at cost less accumulated depreciation, impairments and
mortgage encumbrances. Encumbrances totaled $2.9 million in 1995 and
$16.1 million in 1994. Depreciation on investment real estate is
calculated using the straight-line and constant yield methods.
Policy loans are carried at the outstanding loan balance less amounts
unsecured by the cash surrender value of the policy. Short-term
investments are stated at amortized cost, which approximates fair
value.
Investments in unconsolidated subsidiaries, joint ventures and other
forms of partnerships are included in other investments on the
Statement of Financial Position and are accounted for using the equity
method.
On July 15, 1994, DHC Inc., a wholly-owned subsidiary of Connecticut
Mutual, sold its 100 percent ownership in GroupAmerica Insurance
Company to Veritus, Inc. for $52.1 million in cash.
In compliance with regulatory requirements, the Company maintains an
Asset Valuation Reserve and an Interest Maintenance Reserve. The Asset
Valuation Reserve and other investment reserves, as prescribed or
permitted by the regulatory authorities, stabilize the policyholders'
contingency reserves against fluctuations in the value of stocks, as
well as declines in the value of bonds, mortgage loans and real estate
investments.
The Interest Maintenance Reserve captures after-tax realized capital
gains and losses which result from changes in the overall level of
interest rates for all types of fixed income investments, as well as
other financial instruments, including financial futures, U.S. Treasury
purchase commitments, options, interest rate swaps, interest rate caps
and interest rate floors. These interest rate related gains and losses
are amortized into income using the grouped method over the remaining
life of the investment sold or over the remaining life of the
underlying asset. Net realized after tax capital gains of $110.5
million in 1995, net realized after tax capital losses of $152.6
million in 1994 and net realized after-tax capital gains of $127.2
million in 1993 were charged to the Interest Maintenance Reserve.
Amortization of the Interest Maintenance Reserve into net investment
income amounted to $5.0 million in 1995, $45.8 million in 1994 and
$71.6 million in 1993. In 1994, the Company's Interest Maintenance
Reserve resulted in a net loss deferral. In accordance with the
practices of the National Association of Insurance Commissioners, the
1994 balance was recorded as a reduction of policyholders' contingency
reserves.
Realized capital gains and losses, less taxes, not includable in the
Interest Maintenance Reserve, are recognized in net income. Realized
capital gains and losses are determined using the specific
identification method. Unrealized capital gains and losses are included
in policyholders' contingency reserves.
10
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
b. Separate Accounts
Separate account assets and liabilities represent segregated funds
administered and invested by the Company for the benefit of
pension, variable annuity and variable life insurance contract
holders. Assets consist principally of publicly traded marketable
securities reported at fair value. Premiums, benefits and expenses
of the separate accounts are reported in the Statement of Income.
The Company receives administrative and investment advisory fees
from these accounts.
c. Non-admitted Assets
Assets designated as "non-admitted" (principally prepaid pension costs,
certain fixed assets, receivables and Interest Maintenance Reserve,
when in a net loss deferral position) are excluded from the Statement
of Financial Position by an adjustment to policyholders' contingency
reserves.
d. Policyholders' Reserves and Funds
Policyholders' reserves for life contracts are developed using
accepted actuarial methods computed principally on the net level
premium and the Commissioners' Reserve Valuation Method bases using
the American Experience and the 1941, 1958 and 1980 Commissioners'
Standard Ordinary mortality tables with assumed interest rates
ranging from 2.5 to 6.0 percent.
Reserves for individual annuities, guaranteed investment contracts
and deposit administration and immediate participation guarantee
funds are based on accepted actuarial methods computed principally
using the 1951, 1971, 1983 group and individual annuity tables with
assumed interest rates ranging from 2.25 to 11.25 percent. Reserves
for policies and contracts considered investment contracts have a
carrying value of $10,290.5 million (fair value of $10,508.9
million as determined by discounted cash flow projections).
Accident and health policy reserves are generally calculated using
the two-year preliminary term, net level premium and fixed net
premium methods and various morbidity tables.
During 1995 and 1994, the Company changed its valuation basis for
certain disability income contracts. The effects of these changes,
$108.2 million in 1995 and $51.1 million in 1994, were recorded as
decreases to policyholders' contingency reserves.
e. Premium and Related Expense Recognition
The Company recognizes life insurance premium revenue annually on
the anniversary date of the policy. Annuity premium is recognized
when received. Accident and health premiums are recognized as
revenue when due. Premiums are recognized when due for the policies
issued by Connecticut Mutual. Commissions and other costs related
to issuance of new policies, maintenance and settlement costs are
charged to current operations.
f. Policyholders' Dividends
The Board of Directors annually approves dividends to be paid in
the following year.
11
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
These dividends are allocated to reflect the relative contribution of
each group of policies to policyholders' contingency reserves and
consider investment and mortality experience, expenses and federal
income tax charges.
g. Cash and Short-term Investments
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid short-term investments purchased with a maturity of
twelve months or less to be cash equivalents.
2. Policyholders' Contingency Reserves
Policyholders' contingency reserves represent surplus of the Company as
reported to regulatory authorities and are intended to protect
policyholders against possible adverse experience.
a. Surplus Notes
The Company issued surplus notes of $100.0 million at 7 1/2 percent and
$250.0 million at 7 5/8 percent in 1994 and 1993, respectively. These
notes are unsecured and subordinate to all present and future
indebtedness of the Company, policy claims and prior claims against the
Company as provided by the Massachusetts General Laws. Issuance was
approved by the Commissioner of Insurance of the Commonwealth of
Massachusetts ("the Commissioner").
All payments of interest and principal are subject to the prior
approval of the Commissioner. Sinking fund payments are due as follows:
$62.5 million in 2021, $87.5 million in 2022, $150.0 million in 2023
and $50.0 million in 2024.
Interest on the notes issued in 1994 is scheduled to be paid on March 1
and September 1 of each year, beginning on September 1, 1994, to
holders of record on the preceding February 15 or August 15,
respectively. Interest on the notes issued in 1993 is scheduled to be
paid on May 15 and November 15 of each year, beginning on May 15, 1994,
to holders of record on the preceding May 1 or November 1,
respectively. In accordance with regulations of the National
Association of Insurance Commissioners, interest expense is not
recorded until approval for payment is received from the Commissioner.
Interest of $26.6 million and $22.8 million was approved and paid in
1995 and 1994, respectively.
The proceeds of the notes, less a $35 million reserve in 1995 and 1994
and a $25 million reserve in 1993 for contingencies associated with the
issuance of the notes, are recorded as a component of the Company's
policyholders' contingency reserves as approved by the Commissioner.
These reserves, as permitted by the Massachusetts Division of
Insurance, are included in investment reserves on the Statement of
Financial Position.
b. Other Policyholders' Contingency Reserves
As required by regulatory authorities, contingency reserves established
to protect group life and annuity policyholders are $37.8 million in
1995 and $36.3 million in 1994.
12
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
3. Employee Benefit Plans
The Company's employee benefit plans include plans in place for the
employees of Massachusetts Mutual and Connecticut Mutual prior to the
merge. These plans, which were managed separately, reflect different
assumptions for 1995 and 1994. The separate plans will continue into 1996
using similar assumptions where appropriate. Employees previously covered
by the Connecticut Mutual plans will continue coverage under these plans.
All other employees, including employees hired after the merger date, will
be covered by the Massachusetts Mutual benefit plans.
a. Pension
The Company has two non-contributory defined benefit plans covering
substantially all of its employees. One plan includes employees
employed by MassMutual prior to December 31, 1995 and the other
includes employees previously employed by Connecticut Mutual. Benefits
are based on the employees' years of service, compensation during the
last five years of employment and estimated social security retirement
benefits. The Company accounts for these plans following Financial
Accounting Standards Board Statement No. 87, Employers' Accounting for
Pensions. Accordingly, as permitted by the Massachusetts Division of
Insurance, the Company has recognized a pension asset of $37.7 million
and $37.6 million in 1995 and 1994, respectively. The net pension asset
of $34 million associated with the Connecticut Mutual plan has been
non-admitted in the financial statements in accordance with Connecticut
insurance regulations. Company policy is to fund pension costs in
accordance with the requirements of the Employee Retirement Income
Security Act of 1974 and, based on such requirements, no funding was
required for the years ended December 31, 1995 and 1994. The assets of
the Plan are invested in the Company's general account and separate
accounts.
The benefit status of the defined benefit plans as of December 31 is as
follows:
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In Millions)
<S> <C> <C>
Accumulated benefit obligation $537.5 $451.9
Vested benefit obligation 525.7 437.4
Projected benefit obligation 622.5 529.5
Plan assets at fair value 941.3 814.7
</TABLE>
The following rates were used in determining the actuarial present
value of both the accumulated and projected benefit obligation.
<TABLE>
<CAPTION>
MassMutual Connecticut Mutual
Plan Plan
---------- ------------------
<S> <C> <C>
Discount rate - 1995 7.5% 7.75%
Discount rate - 1994 8.0 8.5
Increase in future compensation levels 5.0 5.0
</TABLE>
13
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
Long-term rate of return on assets 10.0 9.0
The Company also has defined contribution plans for employees and
agents. The expense credited to operations for all pension plans is
$10.9 million in 1995, as compared to charged to operation of $5.0
million in 1994 and $4.0 million in 1993.
b. Life and Health
Certain life and health insurance benefits are provided to retired
employees and agents through group insurance contracts. Substantially
all of the Company's employees may become eligible for these benefits
if they reach retirement age while working for the Company. In 1993,
the Company adopted the National Association of Insurance
Commissioners' accounting standard for postretirement benefit costs,
requiring these benefits to be accounted for using the accrual method
for employees and agents eligible to retire and current retirees.
The following rates were used in determining the accumulated
postretirement benefit liability.
<TABLE>
<CAPTION>
MassMutual Connecticut Mutual
---------- ------------------
Plan Plan
---------- ------------------
<S> <C> <C>
Discount rate - 1995 7.5% 8.5%
Discount rate - 1994 8.0 7.5
Assumed increases in medical cost rates
in the first year
(for all) 7.5
(for those born prior to 1965) 12.0
(for those born after 1965) 9.5
declining to
(for all) 5.0
(for those born prior to 1965) 6.0
(for those born after 1965) 5.5
within 6 years 7 years
</TABLE>
The initial transition obligation of $137.9 million is being amortized
over twenty years through 2012. At December 31, 1995 and 1994, the net
unfunded accumulated benefit obligation was $109.2 million and $108.1
million, respectively, for employees and agents eligible to retire or
currently retired and $42.7 million and $36.9 million, respectively,
for participants not eligible to retire. A Retired Lives Reserve Trust
was funded to pay life insurance premiums for certain retired
employees. Trust assets available for benefits were $22.5 million in
1995.
The expense for 1995, 1994 and 1993 was $22.9 million, $19.8 million
and $23.4 million, respectively. A one percent increase in the annual
assumed increase in medical
14
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
cost rates would increase the 1995 accumulated postretirement benefit
liability and benefit expense by $8.5 million and $1.4 million,
respectively.
4. Related Party Transactions
At the end of 1994, the Company executed two reinsurance agreements with
its subsidiary, MML Pension Insurance Company ("MML Pension"). In the first
of these contracts, the Company assumed all of the single premium immediate
annuity business written by MML Pension through either an assumption
provision or a coinsurance provision. The second contract ceded the
Company's group life, accident and health business to MML Pension.
Additionally, a reinsurance agreement previously in place, ceding all of
the Company's single premium immediate annuity business, was terminated.
These contracts were concurrently executed at the end of business on
December 31, 1994 and were accounted for as a bulk reinsurance transaction.
Accordingly, assets were transferred at fair value and liabilities were
transferred at statutory carrying value. These transfers did not impact the
1994 Statement of Income of either company. The net effect of these
transactions decreased the Company's assets and liabilities by $174.6
million in 1994. During 1995, the gain from operations of this business was
reflected as a $41 million dividend received from the subsidiary which was
recorded as net investment income on the Statement of Income.
5. Federal Income Taxes
Provision for federal income taxes is based upon the Company's best
estimate of its tax liability. No deferred tax effect is recognized for
temporary differences that may exist between financial reporting and
taxable income. Accordingly, the reporting of equity tax, using the most
current information, and other miscellaneous temporary differences, such as
reserves, acquisition costs, and restructuring costs, resulted in an
effective tax rate which is other than the statutory tax rate.
The Internal Revenue Service has completed examining the Company's income
tax returns through the year 1989 for Massachusetts Mutual and 1991 for
Connecticut Mutual, and is currently examining Massachusetts Mutual for the
years 1990 through 1992. The Company believes any adjustments resulting
from such examinations will not materially affect its financial statements.
Components of the formula authorized by the Internal Revenue Service for
determining deductible policyholder dividends have not been finalized for
1995 and 1994. The Company records the estimated effects of anticipated
revisions in the Statement of Income.
Massachusetts Mutual and Connecticut Mutual plan to file their 1995 federal
income tax returns on a consolidated basis with their life and non-life
affiliates. The Companies' and their life and non-life affiliates are
subject to a written tax allocation agreement which allocates tax liability
in a manner permitted under Treasury regulations. Generally, the agreement
provides that loss members shall be compensated for the use of their losses
and credits by other members.
Federal tax payments were $175.2 million in 1995 and $291.1 million in
1993. In 1994, the Company had federal tax refunds of $23.4 million. At
December 31, 1995 and 1994, the
15
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
Company established a liability for federal income taxes of $338.5 million
and $229.9 million, respectively.
6. Investments
The Company maintains a diversified investment portfolio. Investment
policies limit concentration in any asset class, geographic region,
industry group, economic characteristic, investment quality or individual
investment.
a. Bonds
The carrying value and estimated fair value of bonds are as follows:
<TABLE>
<CAPTION>
December 31, 1995
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
(In Millions)
<S> <C> <C> <C> <C>
U.S. Treasury Securities $9,391.5 $837.0 $43.3 $10,185.2
and Obligations of U. S.
Government Corporations
and Agencies
Debt Securities issued by
Foreign Governments 261.9 27.9 0.1 289.7
Mortgage-backed securities 3,265.4 176.3 9.4 3,432.3
State and local governments 106.0 15.2 0.1 121.1
Industrial securities 9,030.7 762.8 57.8 9,735.7
Utilities 1,417.6 152.4 2.9 1,567.1
Affiliates 152.1 4.4 1.2 155.3
--------- -------- ------ ---------
TOTAL $23,625.2 $1,976.0 $114.8 $25,486.4
<CAPTION>
December 31, 1994
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
-------- ---------- ---------- ---------
(In Millions)
<S> <C> <C> <C> <C>
U.S. Treasury Securities $7,362.0 $154.4 $388.3 $7,128.1
and Obligations of U. S.
Government Corporations
and Agencies
Debt Securities issued by 124.5 2.5 7.7 119.3
Foreign Governments
Mortgage-backed securities 3,410.5 55.6 176.7 3,289.4
State and local governments 138.2 5.2 6.4 137.0
</TABLE>
16
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
<TABLE>
<S> <C> <C> <C> <C>
Industrial securities 10,991.4 230.2 436.3 10,785.3
Utilities 1,147.2 71.3 30.6 1,187.9
Affiliates 124.4 9.7 8.6 125.5
--------- ----- ------- ---------
TOTAL $23,298.2 $528.9 $1,054.6 $22,772.5
</TABLE>
The carrying value and estimated fair value of bonds at December 31,
1995 by contractual maturity are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right
to call or prepay obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Carrying Fair
Value Value
-------- ---------
(In Millions)
<S> <C> <C>
Due in one year or less $2,578.8 $2,747.9
Due after one year through five years 3,625.8 3,824.3
Due after five years through ten years 5,356.3 5,857.2
Due after ten years 3,858.0 4,410.9
--------- ---------
15,418.9 16,840.3
Mortgage-backed securities,
including securities
guaranteed by the U.S. Government 8,206.3 8,646.1
--------- ---------
TOTAL $23,625.2 $25,486.4
</TABLE>
Proceeds from sales of investments in bonds were $8,068.8 million
during 1995, $5,624.1 million during 1994 and $5,543.5 million during
1993. Gross capital gains of $255.5 million in 1995, $100.3 million in
1994 and $318.4 million in 1993 and gross capital losses of $67.1
million in 1995, $195.8 million in 1994 and $98.4 million in 1993 were
realized on those sales, a portion of which were included in the
Interest Maintenance Reserve. The estimated fair value of non-publicly
traded bonds is determined by the Company using a pricing matrix.
b. Stocks
Preferred stocks in good standing had fair values of $88.0 million in
1995 and $137.9 million in 1994, using a pricing matrix for non-
publicly traded stocks and quoted market prices for publicly traded
stocks. Common stocks, except for unconsolidated subsidiaries, had a
cost of $547.7 million in 1995 and $273.7 million in 1994.
c. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix
for performing loans and the estimated underlying real estate value for
non-performing loans, approximated carrying value less valuation
reserves held.
The Company acts as mortgage servicing agent and guarantor for $50.1
million of
17
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
mortgage loans sold in 1985. As guarantor, the Company is obligated to
advance unpaid principal and interest on any delinquent loans and to
repurchase mortgage loans under certain circumstances including
mortgagor default.
d. Other
The carrying value of investments which were non-income producing for
the preceding twelve months was $76.9 million and $130.9 million at
December 31, 1995 and 1994, respectively. The Company had restructured
loans with book values of $415.0 million, and $543.7 million at
December 31, 1995 and 1994, respectively. The loans typically have been
modified to defer a portion of the contracted interest payments to
future periods. Interest deferred to future periods totaled $3.4
million in 1995, $5.9 million in 1994 and $10.2 million in 1993. The
Company made voluntary contributions to the Asset Valuation Reserve of
$52.7 million in 1994 and $51.5 million in 1993 for these restructured
loans. No additional voluntary contribution was made in 1995.
It is not practicable to determine the fair value of policy loans as
they do not have a stated maturity.
7. Portfolio Risk Management
The Company manages its investment risks to reduce interest rate and
duration imbalances determined in asset/liability analyses. The fair values
of these instruments, which are not recorded in the financial statements,
are based upon market prices or prices obtained from brokers. The Company
does not hold or issue financial instruments for trading purposes.
The notional amounts described do not represent amounts exchanged by the
parties and, thus, are not a measure of the exposure of the Company. The
amounts exchanged are calculated on the basis of the notional amounts and
the other terms of the instruments, which relate to interest rates,
exchange rates, security prices or financial or other indexes.
The Company is exposed to credit-related losses in the event of
nonperformance by counterparties to financial instruments. This exposure is
limited to contracts with a positive fair value. The amounts at risk in a
net gain position were $84.9 million and $88.4 million at December 31, 1995
and 1994, respectively. The Company monitors exposure to ensure
counterparties are credit worthy and concentration of exposure is
minimized.
The Company enters into financial futures contracts for the purpose of
managing interest rate exposure. The Company's futures contracts are
exchange traded with minimal credit risk. Margin requirements are met with
the deposit of securities. Futures contracts are generally settled with
offsetting transactions. Gains and losses on financial futures contracts
are recorded when the contract is closed and amortized through the Interest
Maintenance Reserve over the remaining life of the underlying asset. As of
December 31, 1995, the Company did not have any open financial futures
contracts.
18
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
The Company utilizes interest rate swap agreements, options, and purchased caps
and floors to reduce interest rate exposures arising from mismatches between
assets and liabilities and to modify portfolio profiles to manage other risks
identified. Under interest rate swaps, the Company agrees to exchange, at
specified intervals, the difference between fixed and floating interest rates
calculated by reference to an agreed-upon notional principal amount. Net
amounts receivable and payable are accrued as adjustments to interest income and
included in investment and insurance amounts receivable on the Statement of
Financial Position. Gains and losses realized on the termination of contracts
amortized through the Interest Maintenance Reserve over the remaining life of
the associated contract. At December 31, 1995 and 1994, the Company had swaps
with notional amounts of $1,841.8 million and $2,819.2 million, respectively.
The fair values of these instruments were $10.1 million at December 31, 1995 and
$49.6 million at December 31, 1994.
Options grant the purchaser the right to buy or sell a security at a stated
price within a stated period. The Company's option contracts have terms of up
to two years. The amounts paid for options purchased are included in other
investments on the Statement of Financial Position. Gains and losses on these
contracts are recorded at the expiration or termination date and are amortized
through the Interest Maintenance Reserve over the remaining life of the
underlying asset. At December 31, 1995 and 1994, the Company had option
contracts with notional amounts of $1,876.2 million and $2,262.1 million,
respectively. The Company's credit risk exposure was limited to the unamortized
costs of $18.4 million and $24.4 million, which had fair values of $48.1 million
and $10.4 million at December 31, 1995 and 1994, respectively.
Interest rate cap agreements grant the purchaser the right to receive the excess
of a referenced interest rate over a given rate. Interest rate floor agreements
grant the purchaser the right to receive the excess of a given rate over a
referenced interest rate. Amounts paid for interest rate caps and floors are
amortized into interest income over the life of the asset on a straight-line
basis. Unamortized costs are included in other investments on the Statement of
Financial Position. Amounts receivable and payable are accrued as adjustments
to interest income and included in the Statement of Financial Position as
investment and insurance amounts receivable. Gains and losses on these
contracts, including any unamortized cost, are recognized upon termination and
are amortized through the Interest Maintenance Reserve over the remaining life
of the associated cap or floor agreement. At December 31, 1995 and 1994, the
company had agreements with notional amounts of $3,366.3 million and $2,617.0
million, respectively. The Company's credit risk exposure on these agreements
is limited to the unamortized costs of $14.0 million and $12.1 million at
December 31, 1995 and 1994, respectively. The fair values of these instruments
were $30.8 million and $6.0 million at December 31, 1995 and 1994, respectively.
The Company utilizes asset swap agreements to reduce exposures, such as currency
risk and prepayment risk, built into certain assets acquired. Cross-currency
interest rate swaps allow investment in foreign currencies, increasing access to
additional investment opportunities, while limiting foreign exchange risk.
Notional amounts relating to asset and currency swaps totaled $323.7 million and
$220.0 million at December 31, 1995 and 1994, respectively.
19
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
The fair values of these instruments were an unrecognized gain of $4.6
million at December 31, 1995 and $2.8 million at December 31, 1994.
The Company enters into forward U.S. Treasury commitments for the purpose
of managing interest rate exposure. The Company generally does not take
delivery on forward commitments. These commitments are instead settled with
offsetting transactions. Gains and losses on forward commitments are
recorded when the commitment is closed and amortized through the Interest
Maintenance Reserve over the remaining life of the asset. At December 31,
1995 and 1994, the Company had U.S. Treasury purchase commitments which
will settle during the following year with contractual amounts of $292.4
million and $1,000.0 million and fair values of $298.8 million and $989.2
million, respectively.
8. Liquidity
The withdrawal characteristics of the policyholders' reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1995 are illustrated below:
<TABLE>
<CAPTION>
(In Millions)
<S> <C>
Total policyholders' reserves and funds and
separate account liabilities $44,474.9
Not subject to discretionary withdrawal (6,640.2)
Policy loans (4,518.4)
---------
Subject to discretionary withdrawal $33,316.3
---------
Total invested assets, including separate
investment accounts $49,184.1
Policy loans and other invested assets (12,383.0)
---------
Readily marketable investments $36,801.1
---------
</TABLE>
9. Business Risks and Contingencies
The Company is subject to insurance guaranty fund laws in the states in
which it does business. These laws assess insurance companies amounts to be
used to pay benefits to policyholders and claimants of insolvent insurance
companies. Many states allow these assessments to be credited against
future premium taxes. The Company believes such assessments in excess of
amounts accrued will not materially affect its financial position, results
of operations or liquidity. In 1995, the Company elected not to admit $17.6
million of guaranty fund premium tax offset receivables relating to prior
assessments.
The Company is involved in litigation arising out of the normal course of
its business. Management intends to defend these actions vigorously. While
the outcome of litigation cannot be foreseen with certainty, it is the
opinion of management, after consultation with legal counsel, that the
ultimate resolution of these matters will not materially affect its
financial position, results of operations or liquidity.
10. Subsequent Events
On January 5, 1996, the Company signed a definitive agreement for the sale
of MassMutual
20
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
Holding Company Two, Inc., a wholly-owned subsidiary, and its
subsidiaries, including MML Pension Insurance Company, which comprises the
Company's group life and health business, to WellPoint Health Networks,
Inc. for $380 million. The closing of the sale is contingent upon approval
by regulatory authorities. Since the transaction is not expected to close
until late in the first quarter of 1996, management has not determined the
final gain on the sale.
The following table presents certain financial information as it pertains
to MassMutual Holding Company Two, Inc. and its effects on the Company's
financial statements.
<TABLE>
<CAPTION>
1995 1994
-------- --------
(In Millions)
<S> <C> <C>
Other Invested Assets $187.8 $173.9
Net Gain From Operations 41.0 0.0
Unrealized Capital Gain (Loss) 13.9 (12.5)
</TABLE>
11. Subsidiaries and Affiliated Companies
Summary of ownership and relationship of the Company and its subsidiaries
and affiliated companies as of December 31, 1995 is illustrated below. The
Company provides management or advisory services to most of these
companies.
Subsidiaries
------------
CM Assurance Company
CM Benefit Insurance Company
CM Financial Services, LLC
CM Financial Services Series Fund I, Inc.
CM Investment Accounts, Inc.
CM Life Insurance Company
CM Transnational, S.A.
DHC, Inc.
MML Bay State Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc.
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
Subsidiaries of MassMutual Holding Company
------------------------------------------
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation
MML Investors Services, Inc.
MML Real Estate Corporation (liquidated during 1995)
21
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
MML Realty Management Corporation
MML Reinsurance (Bermuda) Ltd.
Mass Seguros De Vida S.A. (Chile)
MassLife Seguros De Vida S.A. (Argentina)
MassMutual/Carlson CBO N.V.
MassMutual Corporate Value Limited
MassMutual International (Bermuda) Limited
Oppenheimer Acquisition Corporation
Westheimer 335 Suites, Inc.
22
<PAGE>
NOTES TO SUPPLEMENTAL FINANCIAL STATEMENTS, Continued
Subsidiaries of DHC, Inc.
------------------------
CM Advantage Inc.
CM Insurance Services, Inc.
CM International, Inc.
CM Property Management, Inc.
G.R. Phelps & Company, Inc.
State House 1 Corp.
Urban Properties, Inc.
Subsidiaries of DLB Acquisition Corporation
-------------------------------------------
Concert Capital Management, Inc.
David L. Babson and Company, Inc.
Subsidiaries of MassMutual Corporate Value Limited
--------------------------------------------------
MassMutual Corporate Value Partners Limited
Subsidiaries of MassMutual Holding Company Two, Inc.
----------------------------------------------------
MassMutual Holding Company Two MSC, Inc.
Subsidiaries of MassMutual Holding Company Two MSC, Inc.
--------------------------------------------------------
Benefit Panel Services, Inc.
MML Pension Insurance Company
MassMutual of Ireland, Limited
National Capital Health Plan, Inc.
National Capital Preferred Provider Organization
Sloans Lake Management Corporation
Affiliates
- ----------
MassMutual Corporate Investors
MassMutual Participation Investors
23
<PAGE>
Part C
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Financial Statements Included in Part A
---------------------------------------
Condensed Financial Information
Financial Statements Included in Part B
---------------------------------------
The Registrant
--------------
Report of Independent Accountants
Statement of Assets and Liabilities as of
December 31, 1995
Statement of Operations for the year ended
December 31, 1995
Statement of Changes in Net Assets for the years
ended December 31, 1995 and 1994
Notes to Financial Statements
The Depositor
-------------
Report of Independent Accountants
Supplemental Statement of Financial Position as of
December 31, 1995 and 1994
Supplemental Statement of Income for the years ended
December 31, 1995, 1994 and 1993
Supplemental Statement of Changes in Contingency
Reserves for the years ended December 31, 1995, 1994 and
1993
Supplemental Statement of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Supplemental Financial Statements
(b) Exhibits:
Exhibit 1 Copy of Resolution of the Executive Committee of the Board
of Directors of Massachusetts Mutual Life Insurance
Company, authorizing the establishment of the Registrant,
incorporated by reference to Exhibit A(1) to Registrant's
Registration Statement under the Investment Company Act
<PAGE>
of 1940, File No. 811-3351.
Exhibit 2 None
Exhibit 3 (i)(a) Form of Distribution Agreement between the
Registrant and MML Distributors, LLC.
(i)(b) Form of Co-Underwriting Agreement between the
Registrant and MML Investors Services, Inc.
(ii) None
Exhibit 4 (i) Copy of the form of Flexible Purchase Payment Multi-
Fund Variable Annuity Contract, incorporated by reference
to Exhibit 4 to Registrant's Registration Statement under
the Securities Act of 1933, File No. 33-7723.
Exhibit 5 The form of Application used with the Flexible Purchase
Payment Multi-Fund Variable Annuity Contract in Exhibit 4
above, incorporated by reference to Exhibit 5 to
Registrant's Registration Statement under the Securities
Act of 1933, File No. 33-7723.
Exhibit 6 (i) Copy of the Articles of Incorporation of Massachusetts
Mutual Life Insurance Company, incorporated by reference
to Exhibit A (6)(a) to Registrant's Registration Statement
under the Investment Company Act of 1940, File No. 811-
3351.
(ii) By-laws of Massachusetts Mutual Life Insurance
Company incorporated by reference to Exhibit (6)(ii) to
Registrant's Registration Statement under the Securities
Act of 1933, File No. 811-3351.
Exhibit 7 None
Exhibit 8 None
<PAGE>
Exhibit 9 Opinion of and consent of counsel, incorporated by
reference to Exhibit 9 to Registrant's Registration
statement under the Securities Act of 1933, File
No. 33-7723.
Exhibit 10 Written consent of Coopers & Lybrand L.L.P., independent
accountants.
Exhibit 11 None
Exhibit 12 None
Exhibit 13 Schedule of Computation of Performance
Exhibit 15 Powers of Attorney
Exhibit 27 Financial Data Schedule
Item 25. Directors and Executive Officers of MassMutual
----------------------------------------------
The directors and executive vice presidents of MassMutual, their
positions and their other business affiliations and business
experience for the past five years are listed below.
Directors
ROGER G. ACKERMAN, Director and Member, Auditing and Human Resources
Committees
President and Chief Operating Officer, Corning Incorporated
(manufacturer of specialty materials, communication equipment and
consumer products), One Riverfront Plaza, Corning, New York; Director
(since 1993), Dow Corning Corporation (producer of silicone products),
2200 West Salzburg Road, Midland, Michigan; Director, The Pittson
Company (mining and marketing of coal for electric utility and steel
industries) One Pickwick Plaza, Greenwich, Connecticut.
JAMES R. BIRLE, Director, Chairman, Dividend Policy Committee and
Member, Investment Committee
President and Founder (since 1994), Resolute Partners, Incorporated
(private merchant bank), 2 Greenwich Plaza, Suite 100, Greenwich
Connecticut; General Partner (1988-
<PAGE>
1994), The Blackstone Group; Co-Chairman and Chief Executive Officer,
Wickes Companies, Inc. (diversified manufacturer and distributor),
3340 Ocean Park Boulevard, Santa Monica, California; Director: Drexel
Industries, Inc., Connecticut Health and Education Facilities
Authority, and Transparency International; Trustee, Villanova
University and The Sea Research Foundation; Director (1991-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
FRANK C. CARLUCCI, III, Director and Member, Board Affairs and
Dividend Policy Committee
Chairman (since 1993), Vice Chairman (1989-1993), The Carlyle Group
(merchant banking corporation), 1001 Pennsylvania Avenue, N.W.,
Washington, D.C.; Director: Ashland Inc. (producer of petroleum
products), 1000 Ashland Drive, Russell, Kentucky; BDM International,
Inc. (professional and technical services to public and private
sector), 7915 Jones Branch Drive, McLean, Virginia; Bell Atlantic
Corporation (telecommunications), 1717 Arch Street, Philadelphia,
Pennsylvania; CB Commercial Real Estate Group, Inc. (real estate
broker subsidiary of Carlyle Holding Corporation), 533 Fremont Avenue,
Los Angeles, California; East New York Savings Bank; General Dynamics
Corporation (manufacturer of military equipment), 3190 Fairview Park
Drive, Falls Church, Virginia; Kaman Corporation (diversified
manufacturer), 1332 Blue Hills Avenue, Bloomfield, Connecticut;
Neurogen Corporation; Northern Telecom Ltd. (digital
telecommunications systems), 2920 Matheson Boulevard East,
Mississauga, Ontario, Canada; The Quaker Oats Company (manufacturer of
food products), 321 North Clark Street, Chicago, Illinois; The Rand
Corporation; Sun Resorts Ltd., N.V.; Westinghouse Electric Corporation
(electronic systems, electric power generating equipment and
broadcasting), 11 Stanwix Street, Pittsburgh, Pennsylvania; Director
(1989-1996), Connecticut Mutual Life Insurance Company, 140 Garden
Street, Hartford, Connecticut.
GENE Q. CHAO, Director and Member, Auditing and Dividend Policy
Committees
Chairman and Chief Executive Officer (since 1991), Computer
Projections, Inc. 733 S.W. Vista Avenue, Portland, Oregon; Chairman
and Chief Executive Officer
<PAGE>
(1990), American Leadership Forum (non-profit leadership and community
building organization); Director (1990-1996), Connecticut Mutual Life
Insurance Company, 140 Garden Street, Hartford, Connecticut.
PATRICIA DIAZ DENNIS, Director and Member Auditing and Human Resources
Committee
Senior Vice President and Assistant General Counsel (since 1995), SBC
Communications Inc. (telecommunications), 175 East Houston, San
Antonio, Texas; Special Counsel-Communication Law Matters (1993-1995),
Sullivan & Cromwell (law firm), 1701 Pennsylvania Avenue, N.W.,
Washington, D.C.; Assistant Secretary of State for Human Rights an
Humanitarian Affairs (1992-1993), U.S. Department of State,
Washington, D.C.; Trustee (since 1995), Federal Communications Bar
Association Foundation; Trustee (since 1993), Radio and Television
News Directors Foundation; Director (since 1993), National Public
Radio; Director (since 1991), Reading Is Fundamental; Director (since
1989), Foundation for Women's Resources; Trustee (since 1991), Tomas
Rivera Center; Director (1995-1996), Connecticut Mutual Life Insurance
Company, 140 Garden Street, Hartford, Connecticut.
ANTHONY DOWNS, Director and Member, Dividend Policy and Investment
Committees
Senior Fellow, The Brookings Institution (non-profit policy research
center), 1775 Massachusetts Avenue, N.W., Washington, D.C.; Director:
The Pittway Corporation (publications and security equipment), 200
South Wacker Drive, Suite 700, Chicago, Illinois; National Housing
Partnerships Foundation (non-profit organization to own and manage
rental housing), 1225 Eye Street, N.W., Washington, D.C.; Bedford
Properties, Inc. (real estate investment trust), 3658 Mt. Diable
Boulevard, Lafayette, California; General Growth Properties, Inc.
(real estate investment trust), 215 Keo Way, Des Moines, Iowa; NAACP
Legal and Educational Defense Fund, Inc. (civil rights organization),
99 Hudson Street, New York, New York; Consultant, Aetna Realty
Investors (real estate investments), 242 Trumbull Street, Hartford,
Connecticut; and Salomon Brothers Inc (investment banking), 7 World
Trade Center, New York, New York; Trustee: Urban Institute (public
policy research organization), 2100 M
<PAGE>
Street, N.W., Washington, D.C. and Urban Land Institute (educational
and research organization, 625 Indiana Avenue, N.W., Washington, D.C.
JAMES L. DUNLAP, Director and Member, Human Resources and Board
Affairs Committees
Senior Vice President of Texaco, Inc. (producer of petroleum
products), 2000 Westchester Avenue, White Plains, New York and
President (1987-1994), Texaco USA, 1111 Bagby, Houston, Texas.
WILLIAM B. ELLIS, Director and Member, Auditing and Investment
Committees
Senior Fellow (since 1995) Yale University School of Forestry and
Environmental Studies, New Haven, Connecticut; Chairman (1983-1995)
and Chief Executive Officer (1983-1993), Northeast Utilities (electric
utility), 107 Selden Street, Berlin, Connecticut; Director (since
1991), The Hartford Steam Boiler Inspection and Insurance Company
(property and casualty insurer), One State Street, Hartford,
Connecticut; Director (since 1996), Advest Group, Inc. (financial
services holding company), 280 Trumbull Street, Hartford, Connecticut;
Director (since 1995), Catalytica Combustion Systems, Inc.; Director ,
The National Museum of National History of the Smithsonian
Institution, Washington, D.C.; Director (1985-1996), Connecticut
Mutual Life Insurance Company, 140 Garden Street, Hartford,
Connecticut.
ROBERT M. FUREK, Director and Member, Dividend Policy and Investment
Committees
President and Chief Executive Officer, Heublein, Inc. (beverage
distributor), 450 Columbus Boulevard, Hartford, Connecticut; Director,
The Dexter Corporation (producer of specialty chemicals and papers),
One Elm Street, Windsor Locks, Connecticut; Corporator, Hartford
Hospital and The Bushnell Memorial, Hartford, Connecticut; Trustee,
Colby College, Mayflower Hill Drive, Waterville Maine; Director (1990-
1996), Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
CHARLES K. GIFFORD, Director and Member, Investment and Auditing
Committees
<PAGE>
Chairman and Chief Executive Officer (since 1995) and President, The
First National Bank of Boston and Bank of Boston Corporation (bank
holding company), 100 Federal Street, Boston, Massachusetts; Director,
Member of Audit Committee, Boston Edison Co. (public utility electric
company), 800 Boylston Street, Boston, Massachusetts.
WILLIAM N. GRIGGS, Director, Chairman, Auditing Committee and Member,
Investment Committee
Managing Director, Griggs & Santow Inc. (business consultants) 75 Wall
Street, New York, New York; Director, T/SF Communications, Inc.
(diversified publishing and communications company), Tulsa, Oklahoma,
Trustee (1983-1991), MassMutual Integrity Funds (open-end investment
company advised by MassMutual).
JAMES G. HARLOW, JR., Director and Member, Auditing and Board Affairs
Committee
Chairman, Chief Executive Officer (since 1995), and President (1973-
1995), Oklahoma Gas and Electric Company (electric utility), Corporate
Tower, 101 N. Robinson, Oklahoma City, Oklahoma; Director, Fleming
Companies (wholesale food distributors), 6301 Waterford Boulevard,
Oklahoma City, Oklahoma; Director (since 1994), Associated Electric &
Gas Insurance Services Limited, Harborside Financial Center, 700 Plaza
Two, Jersey City, New Jersey.
GEORGE B. HARVEY, Director, Chairman, Human Resources Committee and
Member, Board Affairs Committee
Chairman, President and Chief Executive Officer, Pitney Bowes, Inc.
(office machines manufacturer), One Elmcroft Road, Stamford,
Connecticut; Director: Merrill Lynch & Co., Inc. (financial services
holding company), 250 Vesey Avenue, World Financial Center, North
Tower, New York, New York; The McGraw Hill Companies (multimedia
publishing and information services), 1221 Avenue of the Americas, New
York, New York; Stamford Hospital, Stamford, Connecticut; Pfizer, Inc.
(pharmaceutical and health-care products), 235 East 42nd Street, New
York, New York; The Catalyst; Member, Board of Overseers, Wharton
School of Finance, University of Pennsylvania; Director (1989-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut.
<PAGE>
BARBARA B. HAUPTFUHRER, Director, Member Board Affairs and Investment
Committees
Director and Member, Compensation, Nominating and Audit Committees,
The Vanguard Group of Investment Companies including among others the
following funds: Vanguard/Windsor Fund, Vanguard/Wellington Fund,
Vanguard/Morgan Growth Fund, Vanguard/Wellesley Income Fund,
Vanguard/Gemini Fund, Vanguard/Explorer Fund, Vanguard Municipal Bond
Fund, Vanguard Fixed Income Securities Fund, Vanguard Index Trust,
Vanguard World Fund, Vanguard/Star Fund, Vanguard Ginnie Mae Fund,
Vanguard/Primecap Fund, Vanguard Convertible Securities Fund, Vanguard
Quantitative Fund, Vanguard/Trustees Commingled Equity Fund,
Vanguard/Trustees Commingled Fund-International, Vanguard Money Market
Trust, Vanguard/Windsor II, Vanguard Asset Allocation Fund and
Vanguard Equity Income Fund (principal offices, Drummers Lane, Valley
Forge, Pennsylvania); Director, Chairman of Retirement Benefits
Committee and Pension Fund Investment Review - USA and Canada and
Member, Audit, Finance and Executive Committees, The Great Atlantic
and Pacific Tea Company, Inc. (operator of retail food stores), 2
Paragon Drive, Montvale, New Jersey; Director, Chairman of Nominating
Committee and Member, Compensation Committee, Knight-Ridder, Inc.
(publisher of daily newspapers and operator of cable television and
business information systems), One Herald Plaza, Miami, Florida;
Director and Member, Compensation Committee, Raytheon Company
(electronics manufacturer), 141 Spring Street, Lexington,
Massachusetts; Director and Member, Executive Committee and Chairman,
Human Resources and Independent Directors Committees, Alco Standard
Corp. (diversified office products and paper distributor), 825
Duportail Road, Valley Forge, Pennsylvania.
SHELDON B. LUBAR, Director, Chairman, Board Affairs Committee and
Member, Investment Committee
Chairman, Lubar & Co. Incorporated (investment management and advisory
company) 777 East Wisconsin Avenue, Milwaukee, Wisconsin; Chairman and
Director, The Christiana Companies, Inc. (real estate development);
Director: Firstar Bank, Firstar Corporation (bank holding company),
SLX Energy, Inc. (oil and gas exploration); Member, Advisory
Committee, Venture Capital Fund, L.P. (principal offices, 777 East
Wisconsin Avenue, Milwaukee,
<PAGE>
Wisconsin); Director: Grey Wolf Drilling Co. (contract oil and gas
drilling), 2000 Post Oak Boulevard, Houston, Texas; Marshall Erdman
and Associates, Inc. (design, engineering, and construction firm),
5117 University Avenue, Madison, Wisconsin; MGIC Investment
Corporation (investment company), MGIC Plaza, 111 E. Kilbourn Avenue,
Milwaukee, Wisconsin; Director (since 1995), Energy Ventures, Inc., 5
Post Oak Park, Houston, Texas; Director (since 1993), Ameritech, Inc.
(regional holding company for telephone companies), 30 South Wacker
Drive, Chicago, Illinois; Director (1989-1995), Prideco, Inc. (drill
collar manufacturer), 6039 Thomas Road, Houston, Texas; Director
(1989-1994), Schwitzer, Inc. (holding company for engine parts
manufacturers), P.O. Box 15075, Asheville, North Carolina; and Briggs
& Stratton (small engine manufacturer) 3300 North 124th Street,
Milwaukee, Wisconsin; Director (1986-1991), Square D Company
(manufacturer of electrical equipment and electronics products),
Executive Plaza, Palatine, Illinois and Milwaukee Insurance Group,
Inc., 809 W. Michigan Street, Milwaukee, Wisconsin; Director (1987-
1991), Lubar Management, Inc. (investment company) 777 East Wisconsin
Avenue, Milwaukee, Wisconsin.
WILLIAM B. MARX, JR., Director and Member, Dividend Policy and Board
Affairs Committees
Senior Executive Vice President (since 1995), Lucent Technologies,
Inc. (public telecommunications systems and software), 600 Mountain
Road, Murray Hill, New Jersey; Executive Vice President and Chief
Executive Officer, Multimedia Products Group (1994-1995) and Network
Systems Group (1993-1994), AT&T (global communications and network
computing company), 295 North Maple Avenue, Basking Ridge, New Jersey;
Group Executive and President (1989-1993), AT&T Network Systems
(manufacturer and marketer of network telecommunications equipment),
475 South Street, Morristown, New Jersey; Member (since 1996),
Advisory Council, Graduate School of Business, Stanford University,
Stanford, California.
JOHN F. MAYPOLE, Director and Member, Board Affairs and Human
Resources Committee
Managing Partner, Peach State Real Estate Holding Company (real estate
investment company), P.O. Box 1223, Toccoa, Georgia; Consultant to
institutional investors; Co-owner
<PAGE>
of family businesses (including Maypole Chevrolet-Geo, Inc. and South
Georgia Car Rentals, Inc.); Director, Chairman, Finance Committee and
Member, Executive Committee and Human Resources Committee on
Directors, Bell Atlantic Corporation (telecommunications), 1717 Arch
Street, Philadelphia, Pennsylvania; Director and Chairman,
Compensation Committee, Briggs Industries, Inc. (plumbing fixtures),
4350 W. Cypress Street, Tampa, Floria; Director, Chairman, Audit
Committee and Member, Compensation Committee, Blodgett Corporation;
Director, Chairman, Products Committee and Member, Compensation and
Audit Committee, Igloo Corporation (portable coolers), 1001 W. Sam
Houston Parkway North, Houston, Texas; Director and Member, Senior
Management Committee, Dan River, Inc. (textile manufacturer), 2291
Memorial Drive, Danville, Virginia; Director, Davies, Turner &
Company; Director (1989-1996), Connecticut Mutual Life Insurance
Company, 140 Garden Street, Hartford, Connecticut.
DONALD F. MCCULLOUGH, Director and Member, Dividend Policy and
Auditing Committees
Retired (since 1988); former Chairman and Chief Executive Officer,
Collins & Aikman Corp. (manufacturer of textile products) 210 Madison
Avenue, New York, New York; Director: Bankers Trust New York Corp.
(bank holding company) and Bankers Trust Company (principal offices,
280 Park Avenue, New York, New York); Melville Corporation (specialty
retailer), One Theall Road, Rye, New York.
JOHN J. PAJAK, Vice Chairman, Director and Member, Dividend Policy and
Investment Committees
Vice Chairman, Director and Chief Administrative Officer (since 1996),
Executive Vice President (1987-1996) of MassMutual; Director (since
1994): MassMutual Holding Company and MassMutual Holding Company Two,
Inc. (wholly-owned holding company subsidiaries of MassMutual);
MassMutual Holding Company Two MSC, Inc. (wholly-owned holding company
subsidiary of MassMutual Holding Company Two, Inc.); and Mirus
Insurance Company (formerly MML Pension Insurance Company, a wholly-
owned insurance subsidiary of MassMutual Holding Company Two MSC,
Inc.) (principal offices, 1295 State Street, Springfield,
Massachusetts); Director (since 1995), National Capital Health Plan,
Inc. (health maintenance organization),
<PAGE>
Washington, D.C.
BARBARA S. PREISKEL, Director and Member, Auditing and Human Resources
Committees
Attorney-at-Law, 60 East 42nd Street, New York, New York; Director:
Textron, Inc. (diversified manufacturing company), 40 Westminster
Street, Providence, Rhode Island; General Electric Company
(diversified manufacturer electrical products), 3135 Easton Turnpike,
Fairfield, Connecticut; The Washington Post Company (publisher of
daily newspaper), Washington, D.C.; American Stores Company (operator
of supermarkets and drugstores), 709 East South Temple, Salt Lake
City, Utah.
DAVID E. SAMS, JR., President, Chief Operating Officer, Director and
Member, Board Affairs, Dividend Policy and Investment Committee
President, Chief Operating Officer and Director (since 1996) of
MassMutual, 1295 State Street, Springfield, Massachusetts; Chairman
(1994-1996), President and Chief Executive Officer (1993-1996),
Connecticut Mutual Life Insurance Company, 140 Garden Street,
Hartford, Connecticut; President and Chief Executive Officer-Agency
Group (1987-1993), Providian Corporation (formerly Capital Holding
Corporation, a holding company for insurance companies), Louisville,
Kentucky; Director (since 1995), Health Insurance of Vermont, Inc. and
Kentucky Medical Insurance Company; Director (1995), United States
Chamber of Commerce; Corporator, Saint Francis Hospital and Medical
Center, Hartford, Connecticut.
THOMAS B. WHEELER, Chairman, Chief Executive Officer, Chairman,
Investment Committee and Member, Dividend Policy and Board Affairs
Committees
Chairman (since 1996), Chief Executive Officer (since 1988), and
President (1987-1996) of MassMutual; Chairman and Chief Executive
Officer (since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Chairman of the Board of Directors (since 1994),
Mirus Insurance Company (formerly MML Pension Insurance Company, a
wholly-owned insurance subsidiary of MassMutual Holding Company Two
MSC, Inc.) (principal offices, 1295 State Street, Springfield,
Massachusetts);
<PAGE>
Director, The First National Bank of Boston and Bank of Boston
Corporation (bank holding company), 100 Federal Street, Boston,
Massachusetts and Massachusetts Capital Resources Company, 545
Boylston Street, Boston, Massachusetts; Chairman and Director,
Oppenheimer Acquisition Corp. (parent of Oppenheimer Management
Corporation, an investment management company), Two World Trade
Center, New York, New York; Director (since 1993), Textron, Inc.
(diversified manufacturing company), 40 Westminster Street,
Providence, Rhode Island; Chairman of the Board of Directors (1992-
1995), Concert Capital Management, Inc. (wholly-owned investment
advisory subsidiary of MassMutual Holding Company), One Memorial
Drive, Cambridge, Massachusetts.
ALFRED M. ZEIEN, Director and Member Board Affairs and Human Resources
Committees
Chairman and Chief Executive Officer, The Gillette Company
(manufacturer of personal care products), Prudential Tower Building,
Boston, Massachusetts; Director: Polaroid Corporation (manufacturer of
photographic products), 549 Technology Square, Cambridge,
Massachusetts; Repligen Corporation (biotechnology), One Kendall
Square, Cambridge, Massachusetts; Bank of Boston Corporation (bank
holding company), 100 Federal Street, Boston, Massachusetts; and
Raytheon Corporation (electronics manufacturer), 141 Spring Street,
Lexington, Massachusetts; Trustee, University Hospital of Boston,
Massachusetts; Trustee (since 1994), Marine Biology Laboratory and
Woods Hole Oceanographic Institute, Woods Hole, Massachusetts.
Executive Vice Presidents
LAWRENCE V. BURKETT, JR., Executive Vice President and General Counsel
Executive Vice President and General Counsel (since 1993), Senior Vice
President and Deputy General Counsel (1992-1993), and Senior Vice
President and Associate General Counsel (1988-1992) of MassMutual;
Director (since 1993), MassMutual Holding Company and Director (since
1994), MassMutual Holding Company Two, Inc. (wholly-owned holding
company subsidiaries of MassMutual); Director (since 1994): MassMutual
Holding Company Two MSC, Inc. (wholly-owned holding company
<PAGE>
subsidiary of MassMutual Holding Company Two, Inc.) and Mirus
Insurance Company (formerly MML Pension Insurance Company, a wholly-
owned insurance subsidiary of MassMutual Holding Company Two MSC,
Inc.) (principal offices, 1295 State Street, Springfield,
Massachusetts); Director (since 1994), Cornerstone Real Estate
Advisers, Inc. (wholly-owned real estate investment adviser subsidiary
of MassMutual Holding Company), 1500 Main Street, Suite 1400,
Springfield, Massachusetts; Director (since 1993), Sargasso Mutual
Insurance Co., Ltd., Victoria Hall, Victoria Street, Hamilton,
Bermuda; MassMutual of Ireland, Ltd. (wholly-owned subsidiary of
MassMutual Holding Company Two MSC, Inc. to provide group insurance
claim services), IDA Industrial Estate, Tipperary Town, Ireland;
Chairman (since 1994), Director (since 1993), MML Reinsurance
(Bermuda) Ltd. (wholly-owned property and casualty reinsurance
subsidiary of MassMutual Holding Company) and Director (since 1995),
MassMutual International (Bermuda) Ltd. (wholly-owned subsidiary of
MassMutual Holding Company that distributes variable insurance
products in overseas markets) (principal offices, 41 Cedar Avenue,
Hamilton, Bermuda).
JOHN B. DAVIES, Executive Vice President
Executive Vice President (since 1994), Associate Executive Vice
President (1993-1994), General Agent (1982-1993) of MassMutual, 1295
State Street, Springfield, Massachusetts; Director (since 1994), MML
Investors Services, Inc. (wholly-owned broker-dealer subsidiary of
MassMutual Holding Company), MML Insurance Agency, Inc. (wholly-owned
subsidiary of MML Investors Services, Inc.), MML Insurance Agency of
Ohio, Inc. (subsidiary of MML Insurance Agency, Inc.) and Director
(since 1995), MML Insurance Agency of Nevada, Inc. (subsidiary of MML
Insurance Agency, Inc.) (principal offices, 1414 Main Street,
Springfield, Massachusetts); Director (since 1994), Cornerstone Real
Estate Advisers, Inc. (wholly-owned real estate investment adviser
subsidiary of MassMutual Holding Company), 1500 Main Street, Suite
1400, Springfield, Massachusetts; Director (since 1994), Life
Underwriter Training Council, 7625 Wisconsin Avenue, Bethseda,
Maryland.
DANIEL J. FITZGERALD, Executive Vice President, Corporate Financial
Operations
<PAGE>
Executive Vice President, Corporate Financial Operations (since 1994),
Senior Vice President (1991-1994) of MassMutual; Vice President (since
1994), Director (since 1993), MassMutual Holding Company; and Vice
President and Director (since 1994), MassMutual Holding Company Two,
Inc. (wholly-owned holding company subsidiaries of MassMutual); Vice
President and Director (since 1994): MassMutual Holding Company Two
MSC, Inc. (wholly-owned holding company subsidiary of MassMutual
Holding Company Two, Inc.); Director (since 1994), Mirus Insurance
Company (formerly MML Pension Insurance Company, a wholly-owned
insurance subsidiary of MassMutual Holding Company Two MSC, Inc.); MML
Bay State Life Insurance Company (wholly-owned insurance subsidiary of
MassMutual); MML Realty Management Corporation (wholly-owned real
estate management subsidiary of MassMutual Holding Company); Director
(since 1995), DLB Acquisition Corporation (holding company for
investment advisers); Director (1994-1995), MML Real Estate
Corporation (wholly-owned real estate management subsidiary of
MassMutual Holding Company) (principal offices, 1295 State Street,
Springfield, Massachusetts); Director (since 1994), Concert Capital
Management, Inc. (wholly-owned investment advisory subsidiary of
MassMutual Holding Company), One Memorial Drive, Cambridge,
Massachusetts; Director and Member, Compensation Committee (since
1994), Cornerstone Real Estate Advisers, Inc., 1500 Main Street, Suite
1400, Springfield, Massachusetts; Director, and Member, Audit and
Compensation Committees (since 1994), MML Investors Services, Inc.
(wholly-owned broker dealer subsidiary of MassMutual Holding Company)
and Director (1992-1993), MML Insurance Agency, Inc. (wholly-owned
subsidiary of MML Investors Services, Inc.) (principal offices, 1414
Main Street, Springfield, Massachusetts) Director (since 1994),
MassMutual of Ireland, Ltd. (wholly-owned subsidiary of MassMutual
Holding Company Two MSC, Inc. to provide group insurance claim
services), IDA Industrial Estate, Tipperary Town, Ireland.
LAWRENCE L. GRYPP, Executive Vice President
Executive Vice President of MassMutual; Director (since 1995), DLB
Acquisition Corporation (holding company for investment advisers)
(principal offices, 1295 State Street, Springfield, Massachusetts);
Chairman and Member Executive and Compensation Committees, MML
Investors
<PAGE>
Services, Inc. (wholly-owned broker-dealer subsidiary of MassMutual
Holding Company) and Director (1991-1993), MML Insurance Agency
(wholly-owned insurance subsidiary of MML Investors Services, Inc.)
(principal offices, 1414 Main Street, Springfield, Massachusetts);
Director, Oppenheimer Acquisition Corp. (parent of Oppenheimer
Management Corporation, an investment management company), Two World
Trade Center, New York, New York: Director (since 1993), Concert
Capital Management, Inc. (wholly-owned investment advisory subsidiary
of MassMutual Holding Company), One Memorial Drive, Cambridge,
Massachusetts; Trustee, The American College, Bryn Mawr, Pennsylvania.
JAMES E. MILLER, Executive Vice President
Executive Vice President of MassMutual; President, Director and Chief
Executive Officer (since 1994), Mirus Insurance Company (formerly MML
Pension Insurance Company, a wholly-owned insurance subsidiary of
MassMutual Holding Company Two MSC, Inc.) (principal offices, 1295
State Street, Springfield, Massachusetts); Chairman (since 1994) and
Director, MassMutual of Ireland Ltd. (wholly-owned subsidiary of
MassMutual Holding Company Two MSC, Inc. to provide group insurance
claim services), IDA Industrial Estate, Tipperary Town, Ireland;
Director (since 1995), National Capital Health Plan, Inc. (health
maintenance organization), Washington, D.C.; Director: Benefit Panel
Services, 888 South Figueroa Street, Los Angeles, California; and
National Capital Preferred Provider Organization, 7979 Old Georgetown
Road, Bethesda, Maryland; Director (since 1994), Sloan's Lake
Management Corp. (preferred provider organization), 1355 South
Colorado Boulevard, Denver, Colorado; Vice President and Treasurer,
Dental Learning Systems, New York, New York; Director (1990-1994), The
Ethix Corporation, 12655 Southwest Center, Suite 180, Beaverton,
Oregon.
JOHN M. NAUGHTON, Executive Vice President
Executive Vice President of MassMutual; Trustee and Member, Investment
Pricing Committee (since 1994), MassMutual Institutional Funds (open-
end investment company); Director (since 1995), DLB Acquisition
Corporation (holding company for investment advisers) (principal
offices, 1295 State Street, Springfield,
<PAGE>
Massachusetts); Chairman (since 1995) and Trustee, Springfield
Institution for Savings, 1441 Main Street, Springfield, Massachusetts;
Trustee, BayState Health Systems, 759 Chestnut Street, Springfield,
Massachusetts; and American International College, 1000 State Street,
Springfield, Massachusetts; Director, Oppenheimer Acquisition Corp.
(parent of Oppenheimer Management Corporation, an investment
management company), Two World Trade Center, New York, New York;
Director (since 1993), Association of Private Pension and Welfare
Plans; Trustee (since 1994), University of Massachusetts, Amherst,
Massachusetts; Director (1992-1995), Concert Capital Management, Inc.
(wholly-owned investment advisory subsidiary of MassMutual Holding
Company), One Memorial Drive, Cambridge, Massachusetts and Colebrook
Group (commercial real estate management and development), 1441 Main
Street, Springfield, Massachusetts.
GARY E. WENDLANDT, Executive Vice President and Chief Investment
Officer
Chief Investment Officer (since 1993), Executive Vice President (since
1992) Senior Vice president (1983-1992) of MassMutual; Chairman (since
1995), Trustee (since 1986) and President (1983-1995), MassMutual
Corporate Investors and Chairman (since 1995), Trustee (since 1988)
and President (1988-1995), MassMutual Participation Investors (closed-
end investment companies); Chairman (since 1995), Vice Chairman and
Trustee (1993-1995) and President (1988-1993), MML Series Investment
Fund (open-end investment company); Chairman, Chief Executive Officer
and Member, Investment Pricing Committee (since 1994), MassMutual
Institutional Funds (open-end investment company); Chairman and Chief
Executive Officer (since 1994), President (since 1993) and Director,
MassMutual Holding Company (wholly-owned holding company subsidiary of
MassMutual); Chairman, President and Chief Executive Officer (since
1994), MassMutual Holding Company Two, Inc. (wholly-owned holding
company subsidiary of MassMutual); Chairman and President (since
1994), Chief Executive officer (since 1995), MassMutual Holding
Company Two MSC, Inc. (wholly-owned holding company subsidiary of
MassMutual Holding Company Two, Inc.); Chairman (since 1994) and
Director (since 1993), MML Realty Management Corporation (wholly-owned
real estate management subsidiary of MassMutual Holding Company);
President and Director (since 1995), DLB
<PAGE>
Acquisition Corporation (holding company for investment advisers);
Chairman (1994-1995) and Director (1993-1995), MML Real Estate
Corporation (wholly-owned real estate management subsidiary of
MassMutual Holding Company) (principal offices, 1295 State Street,
Springfield, Massachusetts); Chairman, Chief Executive Officer and
Member Executive and Compensation Committees (since 1994) and Member,
Audit Committee (since 1995), Cornerstone Real Estate Advisers, Inc.,
1500 Main Street, Springfield, Massachusetts; President and Chief
Executive Officer (since 1994) and Director, Concert Capital
Management, Inc. One Memorial Drive, Cambridge, Massachusetts;
Director, Oppenheimer Acquisition Corporation (parent of Oppenheimer
Management Corporation, an investment management company), Two World
Trade Center, New York, New York; Supervisory Director,
MassMutual/Carlson CBO N.V. (collateralized bond fund), 6 John
Gorsiraweg, P.O. Box 3889, Willemstad, Curacao, Netherlands Antilles;
Director, Merrill Lynch Derivative Products, Inc., World Financial
Center, North Tower, New York, New York; Director (since 1994),
MassMutual Corporate Value Partners Limited (investor in debt and
equity securities) and MassMutual Corporate Value Limited (parent of
MassMutual Corporate Value Partners Limited) (principal offices, c/o
BankAmerica Trust and Banking Corporation, Box 1096, George Town,
Grand Cayman, Cayman Islands, British West Indies); Director (since
1995), Mass Seguros de Vida, S.A., Huerfanos No.770, Santiago, Chile;
President and Director (since 1995), MassMutual International
(Bermuda) Ltd. (wholly-owned subsidiary of MassMutual Holding Company
that distributes variable insurance products in overseas markets), 41
Cedar Avenue, Hamilton, Bermuda.
Item 26. Persons Controlled by or Under Common Control with the Depositor or
-------------------------------------------------------------------
Registrant
----------
The assets of the Registrant, under state law, are assets of
MassMutual.
The Registrant may also be deemed to be under common control with
the following separate accounts which are registered as unit
investment trusts under the Investment Company Act of 1940:
Massachusetts Mutual Variable Annuity Fund 1, Massachusetts Mutual
Variable Annuity Fund 2, Massachusetts Mutual Variable Annuity
Separate Account 1, Massachusetts Mutual Variable Annuity Separate
<PAGE>
Account 2, Massachusetts Mutual Variable Annuity Separate Account 3,
Massachusetts Mutual Variable Life Separate Account I, Massachusetts
Mutual Variable Life Separate Account II, MML Bay State Variable
Annuity Separate Account 1, MML Bay State Variable Life Separate
Account I, Panorama Separate Account, CML Variable Annuity Account A,
CML Variable Annuity Account B, CML Accumulation Annuity Account E,
Connecticut Mutual Variable Life Separate Account I, Panorama Plus
Separate Account, C.M. Multi-Account A, C.M. Life Variable Life
Separate Account A, and CML/OFFITBANK Separate Account. The Registrant
may also be deemed to control MML Series Investment Fund, a
Massachusetts business trust which is registered as an open-end,
diversified, management investment company under the Investment
Company Act of 1940. The Registrant may also be deemed to be under
common control of the following separate accounts which are exempt
from registration requirements of the Investment Company Act of 1940:
MML Bay State Variable Life Separate Account II, MML Bay State
Variable Life Separate Account III, and MML Bay State Variable Life
Separate Account IV.
The following entities are, or may be deemed to be, controlled by
MassMutual through the direct or indirect ownership of such entities'
stock.
1. MassMutual Holding Company, a Delaware corporation, all the
stock of which is owned by MassMutual.
2. MassMutual Holding Company Two, Inc., a Massachusetts
corporation, all the stock of which is owned by MassMutual.
3. MML Series Investment Fund, a registered open-end investment
company organized as a Massachusetts business trust, all of the
shares of which are owned by separate accounts of MassMutual and
companies controlled by MassMutual.
4. MassMutual Institutional Funds, a registered open-end investment
company organized as a Massachusetts business trust, all of the
shares are owned by MassMutual.
<PAGE>
5. MML Bay State Life Insurance Company, a Missouri corporation,
all the stock of which is owned by MassMutual.
6. DHC, Inc., a Connecticut holding company, all the stock of which
is owned by MassMutual.
7. CM Assurance Company, a Connecticut life, accident, disability
and health insurer, all the stock of which is owned by
MassMutual.
8. CM Benefit Insurance Company, a Connecticut life, accident,
disability and health insurer, all the stock of which is owned
by MassMutual.
9. C.M. Life Insurance Company, a Connecticut life, accident,
disability and health insurer, all the stock of which is owned
by MassMutual.
10. CM Transnational, S.A., a Luxembourg corporation that sells life
insurance endowments and annuity contracts. MassMutual owns
99.7% of the outstanding shares and DHC, Inc. owns the remaining
0.3% of the shares.
11. Connecticut Mutual Investment Accounts, Inc., a registered open-
end investment company organized as a Maryland corporation.
MassMutual and its subsidiaries own approximately 30% of the
outstanding shares.
12. Sunriver Properties, Inc., an inactive Oregon corporation, whose
name is associated with a development project. MassMutual owns
all the shares of outstanding stock.
13. Connecticut Mutual Financial Services Series Fund I, Inc., a
registered open-end investment company organized as a Maryland
corporation. Shares of the fund are sold only to MassMutual and
its affiliates.
14. Connecticut Mutual Financial Services, LLC, a registered broker-
dealer incorporated as a limited liability company in
Connecticut. MassMutual has a 99% ownership interest and CM
Strategic Ventures has
<PAGE>
a 1% ownership interest.
15. Cornerstone Real Estate Advisers, Inc., a Massachusetts equity
real estate advisory corporation, all the stock of which is
owned by MassMutual Holding Company.
16. DLB Acquisition Corporation ("DLB"), a Delaware corporation.
MassMutual Holding Company owns 83.7% of the outstanding capital
stock of DLB, which serves as a holding company for certain
investment advisory subsidiaries of MassMutual.
17. MML Investors Services, Inc., registered broker-dealer
incorporated in Massachusetts, all the stock of which is owned
by MassMutual Holding Company.
18. MML Realty Management Corporation, a property manager
incorporated in Massachusetts, all the stock of which is owned
by MassMutual Holding Company.
19. MassMutual International, Inc., a Delaware holding company of
foreign insurance companies. MassMutual Holding Company owns all
of the stock of MassMutual International, Inc.
20. MML Reinsurance (Bermuda) Ltd., a property and casualty
reinsurer incorporated in Bermuda, all of the stock of which is
owned by MassMutual Holding Company.
21. MML International (Bermuda) Ltd., a writer of variable life
insurance for overseas markets that was incorporated in
Bermuda, all of the stock of which is owned by MassMutual
Holding Company
22. Mass Seguros de Vida S.A. (Chile), a life insurance company
incorporated in Chile. MassMutual Holding Company owns 33.5% of
the outstanding capital stock of Mass Seguros de Vida S.A.
23. MassLife Seguros de Vida S.A. (Argentine), a life insurance
company incorporated in Argentine. MassMutual Holding Company
owns 99.99% of the outstanding capital stock of MassLife Seguros
de
<PAGE>
Vida S.A.
24. Oppenheimer Acquisition Corporation is a Delaware corporation
("OAC"). MassMutual Holding Company owns 81.3% of the capital
stock of OAC, which serves as a holding company for
OppenheimerFunds, Inc.
25. Charter Oak Capital Management, Inc., a Delaware corporation, is
a registered investment adviser. MassMutual Holding Company owns
80% of the outstanding shares of Charter Oak Capital Management,
Inc.
26. Westheimer 335 Suites, Inc., was incorporated in Delaware to
serve as a general partner of the Westheimer 335 Suites Limited
Partnership. MassMutual Holding Company owns all the stock of
Westheimer 335 Suites, Inc.
27. CM Advantage, Inc., a Connecticut corporation that acts as a
general partner in real estate limited partnerships. DHC, Inc.
owns all of the outstanding stock.
28. CM Insurance Services, Inc., a licensed insurance broker
incorporated in Connecticut, all of the stock of which is owned
by DHC, Inc.
29. G.R. Phelps & Company, Inc., a registered investment adviser
incorporated in Connecticut, all the stock of which is owned by
DHC, Inc.
30. CM International, Inc., a Delaware corporation that holds a
mortgage pool and issues collateralized bond obligations. DHC,
Inc. owns all the outstanding stock.
31. CM Property Management, Inc., a Connecticut real estate holding
company, all the stock of which is owned by DHC, Inc.
32. State House 1 Corporation, a Delaware corporation, that acts as
a general partner of CML Investments I L.P. and State House I
L.P. DHC, Inc. owns all the outstanding stock.
<PAGE>
33. Urban Properties, Inc., a Delaware real estate holding and
development company, all the stock of which is owned by DHC,
Inc.
34. MassMutual Holding Company Two MSC, Inc., a Massachusetts
corporation, all the stock of which is owned by MassMutual
Holding Company Two, Inc.
35. Mirus Insurance Company, a Delaware life and health insurer, all
the stock of which is owned by MassMutual Holding Company Two
MSC, Inc.
36. MassMutual of Ireland, Ltd., incorporated in the Republic of
Ireland, to operate a group life and health claim office for
MassMutual. MassMutual Holding Company Two MSC, Inc. owns all of
the stock of MassMutual of Ireland, Ltd.
37. National Capital Health Plan, Inc., a Virginia corporation, of
which MassMutual Holding Company Two MSC, Inc. owns 62% of the
outstanding shares of stock.
38. National Capital Preferred Provider Organization, Inc., a
Maryland corporation, of which MassMutual Holding Company Two
MSC, Inc. owns 55% of the outstanding shares of stock.
39. Benefit Panel Services, Inc., a California health-care provider
corporation, of which MassMutual Holding Company Two MSC, Inc.
owns 28% of the outstanding shares of stock.
40. Sloan's Lake Management Corp, a Colorado health-care provider
corporation of which MassMutual Holding Company Two MSC, Inc.
owns 21% of the outstanding shares of stock.
41. Concert Capital Management, Inc., a registered investment
adviser incorporated in Massachusetts, all the stock of which is
owned by DLB Acquisition Corporation.
42. David L. Babson and Company, Incorporated, a registered
investment adviser incorporated in
<PAGE>
Massachusetts, all of the stock of which is owned by DLB
Acquisition Corporation.
43. Babson Securities Corporation, a registered broker-dealer
incorporated in Massachusetts, all of the stock of which is
owned by David L. Babson and Company, Incorporated.
44. Potomac Babson Incorporated, a Massachusetts corporation, is a
registered investment adviser. David L. Babson and Company
Incorporated owns 60% of the outstanding shares of Potomac
Babson Incorporated.
45. MML Insurance Agency, Inc., a licensed insurance broker
incorporated in Massachusetts, all of the stock of which is
owned by MML Investors Services, Inc.
46. MML Securities Corporation, a Massachusetts securities
corporation, all of the stock of which is owned by MML Investors
Services, Inc.
47. MML Insurance Agency of Nevada, Inc., a Nevada corporation,
all of the stock of which is owned by MML Insurance Agency,
Inc.
48. MML Insurance Agency of Ohio, Inc., a subsidiary of MML
Insurance Agency, Inc., is incorporated in the state of Ohio.
The outstanding capital stock is controlled by MML Insurance
Agency, Inc. by means of a voting trust.
49. MML Insurance Agency of Texas, Inc., a subsidiary of MML
Insurance Agency, Inc., is incorporated in the state of Texas.
The outstanding capital stock is controlled by MML Insurance
Agency, Inc. by means of a voting trust.
50. CM Insurance Services, Inc. (Arkansas), a licensed insurance
broker incorporated in Arkansas, all of the stock of which is
owned by CM Insurance Services, Inc.
51. CM Insurance Services, Inc. (Texas) a licensed
<PAGE>
insurance broker incorporated in Texas. CM Insurance Services,
Inc. controls 100% of the shares of outstanding stock by means
of a voting trust.
52. Diversified Insurance Services Agency of America, Inc. (DISA
Ohio), a licensed insurance broker incorporated in Ohio. CM
Insurance Services, Inc. controls 100% of the shares of
outstanding stock by means of a voting trust.
53. Diversified Insurance Services Agency of America, Inc. (DISA
Massachusetts), a licensed insurance broker incorporated in
Massachusetts. CM Insurance Services, Inc. owns all the shares
of outstanding stock.
54. Diversified Insurance Services Agency of America, Inc. (DISA
Alabama), a licensed insurance broker incorporated in Alabama.
CM Insurance Services, Inc. owns all the shares of outstanding
stock.
55. Diversified Insurance Services Agency of America, Inc. (DISA New
York), a licensed insurance broker incorporated in New York. CM
Insurance Services, Inc. owns all the shares of outstanding
stock.
56. Diversified Insurance Services Agency of America, Inc. (DISA
Hawaii), a licensed insurance broker incorporated in Hawaii. CM
Insurance Services, Inc. owns all the shares of outstanding
stock.
57. MassMutual Corporate Value Limited, a Cayman Islands corporation
that owns approximately 93% of MassMutual Corporate Value
Partners Limited. MassMutual Holding Company owns 43.68% of the
outstanding capital stock of MassMutual Corporate Value
Limited.
58. CM Strategic Ventures, Inc., a Connecticut corporation that
serves as general partner in limited partnerships, all of the
stock of which is owned by G. R. Phelps & Co., Inc.
59. CML Investments I Corp., a Delaware corporation organized to
issue and sell notes and bonds secured
<PAGE>
by non-investment grade corporate debt obligations. CML
Investments I L.P. owns all the outstanding stock.
60. Oppenheimer Value Stock Fund ("OVSF) is a series of Oppenheimer
Integrity Funds, a Massachusetts business Trust. OVSF is a
registered open-end investment company of which MassMutual owns
29% of the outstanding shares of beneficial interest.
61. OppenheimerFunds, Inc., a registered investment adviser
incorporated in Colorado, all of the stock of which is owned by
Oppenheimer Acquisition Corporation
62. Centennial Asset Management Corporation, a Delaware corporation
that serves as the investment adviser and general distributor of
the Centennial Funds. Oppenheimer Management Corporation owns
all the stock of Centennial Asset Management Corporation.
63. HarbourView Asset Management Corporation, a registered
investment adviser incorporated in New York, all the stock of
which is owned by Oppenheimer Management Corporation.
64. Main Street Advisers, Inc., a Delaware corporation, all the
stock of which is owned by Oppenheimer Management
Corporation.
65. OppenheimerFunds Distributor, Inc., a registered broker-dealer
incorporated in New York, all the stock of which is owned by
Oppenheimer Management Corporation.
66. Oppenheimer Partnership Holdings, Inc., a Delaware holding
company, all the stock of which is owned by Oppenheimer
Management Corporation.
67. Shareholder Financial Services, Inc., a transfer agent
incorporated in Colorado, all the stock of which is owned by
Oppenheimer Management Corporation.
68. Shareholder Services, Inc., a transfer agent
<PAGE>
incorporated in Colorado, all the stock of which is owned by
Oppenheimer Management Corporation.
69. Centennial Capital Corporation, a former sponsor of unit
investment trust incorporated in Delaware, all the stock of
which is owned by Centennial Asset Management Corporation.
MassMutual is the investment adviser to the following investment
companies, and as such may be deemed to control them.
1. MassMutual Corporate Investors, a registered closed-end
Massachusetts business trust.
2. MassMutual Participation Investors, a registered closed-
end Massachusetts business trust.
3. MML Series Investment Fund, a registered open-end Massachusetts
business trust, all of the shares are owned by separate accounts
of MassMutual and companies controlled by MassMutual.
4. MassMutual Institutional Funds, a registered open-end
Massachusetts business trust, all of the shares are owned by
MassMutual.
5. MassMutual/Carlson CBO N.V., a Netherlands Antilles corporation
that issued Collateralized Bond Obligations on or about May 1,
1991, owned equally by MassMutual interests (MassMutual and
MassMutual Holding Company) and Carlson Investment Management
Co.
6. MassMutual Corporate Value Partners, Ltd., an off-shore
unregistered investment company.
Item 27. Number of Contract Owners
-------------------------
As of February 20, 1996, 28,353 Separate Account 2 Contracts were in
force.
Item 28. Indemnification
---------------
MassMutual directors and officers are indemnified under
<PAGE>
its by-laws. No indemnification is provided with respect to any
liability to any entity which is registered as an investment company
under the Investment Company Act of 1940 or to the security holders
thereof, where the basis for such liability is willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of MassMutual pursuant to the foregoing
provisions, or otherwise, MassMutual has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933,
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
MassMutual of expenses incurred or paid by a director, officer or
controlling person of MassMutual in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
MassMutual will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
Item 29. Principal Underwriters
----------------------
(a) MML Distributors, LLC, a wholly owned subsidiary of MassMutual, also
acts as principal underwriter for Massachusetts Mutual Variable
Annuity Separate Accounts 1, 2 and 3, Massachusetts Mutual Variable
Life Separate Accounts I and II, MML Bay State Variable Life Separate
Account I, MML Bay State Variable Annuity Separate Account 1, Panorama
Separate Account, CML Variable Annuity Account A, CML Variable Annuity
Account B, CML Accumulation Annuity Account E, Connecticut Mutual
Variable Life Separate Account I, Panorama Plus Separate Account, C.M.
Multi-Account A, C.M. Life Variable Life Separate Account A, and
CML/OFFITBANK Separate Account.
<PAGE>
(b) See response to Item 25.
(c) See the section captioned "Service Arrangements and Distribution" in
the Statement of Additional Information.
Item 30. Location of Accounts and Records
--------------------------------
All accounts, books, or other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are maintained by the Registrant through
Massachusetts Mutual Life Insurance Company, 1295 State Street,
Springfield, Massachusetts 01111.
Item 31. Management Related Services
---------------------------
None
Item 32. Undertakings
------------
(a) Registrant undertakes to file a post-effective amendment to this
registration statement as frequently as is necessary to ensure that
the audited financial statements in the Registration Statement are
never more than 16 months old for so long as payments under the
variable annuity contracts may be accepted.
(b) Registrant undertakes to include either (1) as part of any application
to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information,
or (2) a post card or similar written communication affixed to or
included in the prospectus that the applicant can remove to send for a
Statement of Additional Information;
(c) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available
under this Form promptly upon written or oral request.
(d) Registrant asserts that the Separate Account meets the definition of a
separate account under the Investment Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Massachusetts Mutual Variable Annuity Separate Account 2, certifies that it
meets all of the requirements for effectiveness of this Post-Effective Amendment
No. 11 pursuant to Rule 485(b) under the Securities Act of 1933 and has caused
this Post-Effective Amendment No. 11 to Registration Statement No. 33-7723 to be
signed on its behalf by the undersigned thereunto duly authorized, all in the
city of Springfield and the Commonwealth of Massachusetts, on the 24th day of
April, 1996.
MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE ACCOUNT 2
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY (Depositor)
By: /s/ Thomas B. Wheeler*
--------------------------------------------
Thomas B. Wheeler, Chief Executive Officer
Massachusetts Mutual Life Insurance Company
/s/ Richard M. Howe On April 24, 1996, as Attorney-in-Fact pursuant to
- --------------------
*Richard M. Howe powers of attorney filed herewith.
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 11 to Registration Statement No. 33-7723 has been signed by the following
persons in the capacities and on the duties indicated.
Signature Title Date
--------- ----- ----
/s/ Thomas B. Wheeler* Chief Executive Officer April 24, 1996
- ----------------------
Thomas B. Wheeler and Chairman of the Board
/s/ Daniel J. Fitzgerald* Executive Vice President, April 24, 1996
- -------------------------
Daniel J. Fitzgerald Chief Financial Officer &
Chief Accounting Officer
/s/ Roger G. Ackerman* Director April 24, 1996
- -------------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 24, 1996
- -------------------------
James R. Birle
<PAGE>
/s/ Frank C. Carlucci, III* Director April 24, 1996
- -------------------------
Frank C. Carlucci, III
/s/ Gene Chao* Director April 24, 1996
- -------------------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 24, 1996
- -------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director April 24, 1996
- -------------------------
Anthony Downs
/s/ James L. Dunlap* Director April 24, 1996
- -------------------------
James L. Dunlap
/s/ William B. Ellis* Director April 24, 1996
- -------------------------
William B. Ellis, Ph.D.
/s/ Robert M. Furek* Director April 24, 1996
- -------------------------
Robert M. Furek
/s/ Charles K. Gifford* Director April 24, 1996
- -------------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 24, 1996
- -------------------------
William N. Griggs
/s/ James G. Harlow, Jr.* Director April 24, 1996
- -------------------------
James G. Harlow, Jr.
/s/ George B. Harvey* Director April 24, 1996
- -------------------------
George B. Harvey
<PAGE>
/s/ Barbara B. Hauptfuhrer* Director April 24, 1996
- -------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 24, 1996
- -------------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 24, 1996
- -------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 24, 1996
- -------------------------
John F. Maypole
/s/ Donald F. McCullough* Director April 24, 1996
- -------------------------
Donald F. McCullough
/s/ John J. Pajak* Director April 24, 1996
- -------------------------
John J. Pajak
/s/ Barbara S. Preiskel* Director April 24, 1996
- -------------------------
Barbara S. Preiskel
/s/ David E. Sams, Jr.* Director April 24, 1996
- -------------------------
David E. Sams, Jr.
/s/ Alfred M. Zeien* Director April 24, 1996
- -------------------------
Alfred M. Zeien
/s/ Richard M. Howe On April 24, 1996, as Attorney-in-Fact pursuant
- -------------------------
*Richard M. Howe to powers of attorney filed herewith.
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
--------------------------------------
As counsel to the Registrant, I, James Rodolakis, have reviewed this Post-
Effective Amendment No. 11 to Registration Statement No. 33-7723, and represent,
pursuant to the requirement of paragraph (e) of Rule 485 under the Securities
Act of 1933, that this Amendment does not contain disclosures which would render
it ineligible to become effective pursuant to paragraph (b) of said Rule 485.
/s/James Rodolakis
--------------------------
James Rodolakis, Attorney
Massachusetts Mutual Life
Insurance Company
<PAGE>
EXHIBIT LIST
Exhibit 99.3.I.A Form of Distribution Agreement
Exhibit 99.3.I.B Form of Co-Underwriting Agreement
Exhibit 99.C.1 Written consent of Coopers & Lybrand, L.L.P.,
independent accountants
Exhibit 99.5 Powers of Attorney
Exhibit 99.6 Schedule of Computation of Performance
Exhibit 27 Financial Data Schedule
<PAGE>
UNDERWRITING AND
SERVICING AGREEMENT
This UNDERWRITING AND SERVICING AGREEMENT is made this 1st day of May, 1996, by
and between MML Distributors, LLC ("MML DISTRIBUTORS") and Massachusetts Mutual
Life Insurance Company ("MassMutual"), on its own behalf and on behalf of
_______________ Separate Account (the "Separate Account"), a separate account of
MassMutual, as follows:
WHEREAS, the Separate Account was established on _____________ pursuant to
authority of the Board of Directors of MassMutual in order to set aside and
invest assets attributable to certain variable annuity contracts (the
"Contracts") issued by MassMutual; and
WHEREAS, MassMutual has registered the Separate Account under the Investment
Company Act of 1940, as amended, (the "1940 Act") and has registered the
Contracts under the Securities Act of 1933, as amended, (the "1933 Act"); and
WHEREAS, MassMutual will continue the effectiveness of the registrations of the
Separate Account under the 1940 Act and the Contracts under the 1933 Act; and
WHEREAS, MassMutual intends for the Contracts to be sold by agents and brokers
who are required to be registered representatives of a broker-dealer that is
registered with the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934 ("1934 Act") and a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, MassMutual desires to engage MML DISTRIBUTORS, a broker-dealer
registered with the SEC under the 1934 Act and a member of the NASD, to act as
the principal underwriter ("Underwriter") of the Contracts, and to otherwise
perform certain duties and functions that are necessary and proper for the
distribution of the Contracts as required under applicable federal and state
securities laws and NASD regulations, and MML DISTRIBUTORS desires to act as
Underwriter for the sale of the Contracts and to assume such responsibilities;
1
<PAGE>
NOW, THEREFORE, the parties hereto agree as follows:
1. Underwriter. MassMutual hereby appoints MML DISTRIBUTORS as, and MML
DISTRIBUTORS agrees to serve as, Underwriter of the Contracts during the
term of this Agreement for purposes of federal and state securities laws.
MassMutual reserves the right, however, to refuse at any time or times to
sell any Contracts hereunder for any reason, and MassMutual maintains
ultimate responsibility for the sales of the Contracts.
MML DISTRIBUTORS shall use reasonable efforts to sell the Contracts but
does not agree hereby to sell any specific number of Contracts and shall be
free to act as underwriter of other securities. MML DISTRIBUTORS agrees to
offer the Contracts for sale in accordance with the prospectus then in
effect for the Contracts.
2. Services. MML DISTRIBUTORS agrees, on behalf of MassMutual and the Separate
Account, and in its capacity as Underwriter, to undertake at its own
expense except as otherwise provided herein, to provide certain sales,
administrative and supervisory services relative to the Contracts as
described below, and otherwise to perform all duties that are necessary and
proper for the distribution of the Contracts as required under applicable
federal and state securities laws and NASD regulations.
3. Selling Group. MML DISTRIBUTORS may enter into sales agreements for the
sale of the Contracts with independent broker-dealer firms ("Independent
Brokers") whose registered representatives have been or shall be licensed
and appointed as life insurance agents of MassMutual. All such agreements
shall be in a form agreed to by MassMutual. All such agreements shall
provide that the Independent Brokers must assume full responsibility for
continued compliance by itself and its associated persons with the NASD
Rules of Fair Practice (the "Rules") and all applicable federal and state
securities and insurance laws. All associated persons of such Independent
Brokers soliciting applications for the Contracts shall be duly and
appropriately licensed and appointed for the sale of the Contracts under
the Rules and applicable federal and state securities and insurance laws.
2
<PAGE>
4. Compliance and Supervision. All persons who are engaged directly or
indirectly in the operations of MML DISTRIBUTORS and MassMutual in
connection with the offer or sale of the Contracts shall be considered a
"person associated" with MML DISTRIBUTORS as defined in Section 3(a)(18) of
the 1934 Act. MML DISTRIBUTORS shall have full responsibility for the
securities activities of each such person as contemplated by Section 15 of
the 1934 Act.
MML DISTRIBUTORS shall be fully responsible for carrying out all
compliance, supervisory and other obligations hereunder with respect to the
activities of its registered representatives as required by the Rules and
applicable federal and state securities laws. Without limiting the
generality of the foregoing, MML DISTRIBUTORS agrees that it shall be fully
responsible for:
(a) ensuring that no representative of MML DISTRIBUTORS shall offer or
sell the Contracts until such person is appropriately licensed,
registered, or otherwise qualified to offer and sell such Contracts
under the federal securities laws and any applicable securities laws
of each state or other jurisdiction in which such Contracts may be
lawfully sold, in which MassMutual is licensed to sell the Contracts,
and in which such person shall offer or sell the Contracts; and
(b) training and supervising MassMutual's agents and brokers who are also
registered representatives of MML DISTRIBUTORS for purposes of
complying on a continuous basis with the Rules and with federal and
state securities laws applicable in connection with the offering and
sale of the Contracts. In this connection, MML DISTRIBUTORS shall:
(i) jointly conduct with MassMutual such training (including the
preparation and utilization of training materials) as in the
opinion of MML DISTRIBUTORS and MassMutual is necessary to
accomplish the purposes of this Agreement;
(ii) establish and implement reasonable written procedures for
supervision of sales practices of registered representatives of
MML DISTRIBUTORS who sell the Contracts;
3
<PAGE>
(iii) provide a sufficient number of registered principals and an
adequately staffed compliance department to carry out the
responsibilities as set forth herein;
(iv) take reasonable steps to ensure that MassMutual agents and
brokers who are also registered representatives of MML
DISTRIBUTORS recommend the purchase of the Contracts only upon
reasonable grounds to believe that the purchase of the Contracts
is suitable for such applicant; and
(v) impose disciplinary measures on agents of MassMutual who are
also registered representatives of MML DISTRIBUTORS as required.
The parties hereto recognize that any registered representative of MML
DISTRIBUTORS or Independent Broker selling the Contracts as
contemplated by this Agreement shall also be acting as an insurance
agent of MassMutual or as an insurance broker, and that the rights of
MML DISTRIBUTORS and Independent Broker to supervise such persons
shall be limited to the extent specifically described herein or
required under applicable federal or state securities laws or NASD
regulations.
5. Registration and Qualification of Contracts. MassMutual has prepared or
caused to be prepared a registration statement describing the Contracts,
together with exhibits thereto (hereinafter referred to as the
"Registration Statement"). The Registration Statement includes a prospectus
(the "Prospectus") for the Contracts.
MassMutual agrees to execute such papers and to do such acts and things as
shall from time-to-time be reasonably requested by MML DISTRIBUTORS for the
purpose of qualifying and maintaining qualification of the Contracts for
sale under applicable state law and for maintaining the registration of the
Separate Account and interests therein under the 1933 Act and the 1940 Act,
to the end that there will be available for sale from time-to-time such
amounts of the Contracts as MML DISTRIBUTORS may reasonably request.
MassMutual shall advise MML DISTRIBUTORS promptly of any action of the SEC
or any authorities of any state or territory, of which it is aware,
affecting registration or qualification of the Separate Account, or rights
to offer the Contracts for sale.
4
<PAGE>
If any event shall occur as a result of which it is necessary to amend or
supplement the Registration Statement in order to make the statements
therein, in light of the circumstances under which they were or are made,
true, complete or not misleading, MassMutual will forthwith prepare and
furnish to MML DISTRIBUTORS, without charge, amendments or supplements to
the Registration Statement sufficient to make the statements made in the
Registration Statement as so amended or supplemented true, complete and not
misleading in light of the circumstances under which they were made.
6. Representations of MassMutual. MassMutual represents and warrants to MML
DISTRIBUTORS and to the Independent Brokers as follows:
(a) MassMutual is an insurance company duly organized under the laws of
the Commonwealth of Massachusetts and is in good standing and is
authorized to conduct business under the laws of each state in which
the Contracts are sold, that the Separate Account was legally and
validly established as a segregated asset account under the Insurance
Code of Massachusetts, and that the Separate Account has been properly
registered as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account
for the Contracts.
(b) All persons that will be engaging in the offer or sale of the
Contracts will be authorized insurance agents of MassMutual.
(c) The Registration Statement does not and will not contain any
misstatements of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were or are
made, not materially misleading.
(d) MassMutual shall make available to MML DISTRIBUTORS copies of all
financial statements that MML DISTRIBUTORS reasonably requests for use
in connection with the offer and sale of the Contracts.
5
<PAGE>
(e) No federal or state agency or bureau has issued an order preventing or
suspending the offer of the Contracts or the use of the Registration
Statement, or of any part thereof, with respect to the sale of the
Contracts.
(f) The offer and sale of the Contracts is not subject to registration, or
if necessary, is registered, under the Blue Sky laws of the states in
which the Contracts will be offered and sold.
(g) The Contracts are qualified for offer and sale under the applicable
state insurance laws in those states in which the Contracts shall be
offered for sale. In each state where such qualification is effected,
MassMutual shall file and make such statements or reports as are or
may be required by the laws of such state.
(h) This Agreement has been duly authorized, executed and delivered by
MassMutual and constitutes the valid and legally binding obligation of
MassMutual. Neither the execution and delivery of this Agreement by
MassMutual nor the consummation of the transactions contemplated
herein will result in a breach or violation of any provision of the
state insurance laws applicable to MassMutual, any judicial or
administrative orders in which it is named or any material agreement
or instrument to which it is a party or by which it is bound.
7. Representations of MML DISTRIBUTORS. MML DISTRIBUTORS represents and
warrants to MassMutual as follows:
(a) MML DISTRIBUTORS is duly registered as a broker-dealer under the 1934
Act and is a member in good standing of the NASD and, to the extent
necessary to perform the activities contemplated hereunder, is duly
registered, or otherwise qualified, under the applicable securities
laws of every state or other jurisdiction in which the Contracts are
available for sale.
(b) This Agreement has been duly authorized, executed and delivered by MML
DISTRIBUTORS and constitutes the valid and legally binding obligation
of MML DISTRIBUTORS. Neither the execution and delivery of this
Agreement by MML DISTRIBUTORS nor the consummation of the transactions
contemplated herein will result in a breach or violation of any
provision of the federal or state securities laws
6
<PAGE>
or the Rules, applicable to MML DISTRIBUTORS, or any judicial or
administrative orders in which it is named or any material agreement
or instrument to which it is a party or by which it is bound.
(c) MML DISTRIBUTORS shall comply with the Rules and the securities laws
of any jurisdiction in which it sells, directly or indirectly, any
Contracts.
8. Expenses. MML DISTRIBUTORS shall be responsible for all expenses incurred
in connection with its provision of services and the performance of its
obligations hereunder, except as otherwise provided herein.
MassMutual shall be responsible for all expenses of printing and
distributing the Prospectuses, and all other expenses of preparing,
printing and distributing all other sales literature or material for use in
connection with offering the Contracts for sale.
9. Sales Literature and Advertising. MML DISTRIBUTORS agrees to ensure that it
uses and distributes only the Prospectus, statements of additional
information, or other applicable and authorized sales literature then in
effect in selling the Contracts. MML DISTRIBUTORS is not authorized to give
any information or to make any representations concerning the Contracts
other than those contained in the current Registration Statement filed with
the SEC or in such sales literature as may be authorized by MassMutual.
MML DISTRIBUTORS agrees to make timely filings with the SEC, the NASD, and
such other regulatory authorities as may be required of any sales
literature or advertising materials relating to the Contracts and intended
for distribution to prospective investors. MassMutual shall review and
approve all advertising and sales literature concerning the Contracts
utilized by MML DISTRIBUTORS. MML DISTRIBUTORS also agrees to furnish to
MassMutual copies of all agreements and plans it intends to use in
connection with any sales of the Contracts.
10. Applications. All applications for Contracts shall be made on application
forms supplied by MassMutual, and shall be remitted by MML DISTRIBUTORS or
Independent Brokers promptly, together with such forms and any other
required documentation, directly to MassMutual at the address indicated on
such
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application or to such other address as MassMutual may, from time to
time, designate in writing. All applications are subject to acceptance or
rejection by MassMutual at its sole discretion.
11. Payments. All money payable in connection with any of the Contracts,
whether as premiums, purchase payments or otherwise, and whether paid by,
or on behalf of any applicant or Contract owner, is the property of
MassMutual and shall be transmitted immediately in accordance with the
administrative procedures of MassMutual without any deduction or offset for
any reason, including by example but not limitation, any deduction or
offset for compensation claimed by MML DISTRIBUTORS. Checks or money orders
as payment on any Contract shall be drawn to the order of "Massachusetts
Mutual Life Insurance Company." No cash payments shall be accepted by MML
DISTRIBUTORS in connection with the Contracts. Unless otherwise agreed to
by MassMutual in writing, neither MML DISTRIBUTORS nor any of MassMutual's
agents nor any broker shall have an interest in any surrender charges,
deductions or other fees payable to MassMutual as set forth herein.
12. Insurance Licenses. MassMutual shall apply for and maintain the proper
insurance licenses and appointments for each of the agents and brokers
selling the Contracts in all states or jurisdictions in which the Contracts
are offered for sale by such person. MassMutual reserves the right to
refuse to appoint any proposed agent or broker, and to terminate an agent
or broker once appointed. MassMutual agrees to be responsible for all
licensing or other fees required under pertinent state insurance laws to
properly authorize agents or brokers for the sale of the Contracts;
however, the foregoing shall not limit MassMutual's right to collect such
amount from any person or entity other than MML DISTRIBUTORS.
13. Agent/Broker Compensation. Commissions or other fees due all brokers and
agents in connection with the sale of Contracts shall be paid by
MassMutual, on behalf of MML DISTRIBUTORS, to the persons entitled thereto
in accordance with the applicable agreement between each such broker or
agent and MassMutual or a general agent thereof. MML DISTRIBUTORS shall
assist MassMutual in the payment of such amounts as MassMutual shall
reasonably request, provided that MML DISTRIBUTORS shall not be required to
perform any acts that would subject it to registration under the insurance
laws of any state. The
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responsibility of MML DISTRIBUTORS shall include the performance of all
activities by MML DISTRIBUTORS necessary in order that the payment of such
amounts fully complies with all applicable federal and state securities
laws. Unless applicable federal or state securities law shall require,
MassMutual retains the ultimate right to determine the commission rate paid
to its agents.
14. MML DISTRIBUTORS Compensation. As payment for its services hereunder, MML
DISTRIBUTORS shall receive an annual fee that has the following components:
(1) a fixed fee in the amount of $_____ per year, and (2) a variable fee in
the amount of ___ basis points (.000x) per year of new sales of the
Contracts. Payments shall commence and be made no later than December 31 of
the year in which a Contract is issued. The variable component of the fee
shall be paid to MML DISTRIBUTORS's affiliate, MML Insurance Agency, Inc.
("MMLIAI"). The fixed component shall be renegotiated annually commencing
in 1997. The last agreed-to amounts for each of these fees shall remain in
effect until the new fees are mutually agreed upon and are set forth in
schedules attached hereto.
15. Books and Records. MML DISTRIBUTORS and MassMutual shall each cause to be
maintained and preserved for the period prescribed such accounts, books,
and other documents as are required of it by the 1934 Act and any other
applicable laws and regulations. In particular, without limiting the
foregoing, MML DISTRIBUTORS shall cause all the books and records in
connection with the offer and sale of the Contracts by its registered
representatives to be maintained and preserved in conformity with the
requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to the extent
that such requirements are applicable to the Contracts. The books,
accounts, and records of MML DISTRIBUTORS and MassMutual as to all
transactions hereunder shall be maintained so as to disclose clearly and
accurately the nature and details of the transactions. The payment of
premiums, purchase payments, commissions and other fees and payments in
connection with the Contracts by its registered representatives shall be
reflected on the books and records of MML DISTRIBUTORS as required under
applicable NASD regulations and federal and state securities laws
requirements.
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MML DISTRIBUTORS and MassMutual, from time to time during the term of this
Agreement, shall divide the administrative responsibility for maintaining
and preserving the books, records and accounts kept in connection with the
Contracts; provided, however, in the case of books, records and accounts
kept pursuant to a requirement of applicable law or regulation, the
ultimate and legal responsibility for maintaining and preserving such
books, records and accounts shall be that of the party which is required to
maintain or preserve such books, records and accounts under the applicable
law or regulation, and such books, records and accounts shall be maintained
and preserved under the supervision of that party. MML DISTRIBUTORS and
MassMutual shall each cause the other to be furnished with such reports as
it may reasonably request for the purpose of meeting its reporting and
recordkeeping requirements under such regulations and laws, and under the
insurance laws of the Commonwealth of Massachusetts and any other
applicable states or jurisdictions.
MML DISTRIBUTORS and MassMutual each agree and understand that all
documents, reports, records, books, files and other materials required
under applicable Rules and federal and state securities laws shall be the
property of MML DISTRIBUTORS, unless such documents, reports, records,
books, files and other materials are required by applicable regulation or
law to be also maintained by MassMutual, in which case such material shall
be the joint property of MML DISTRIBUTORS and MassMutual. All other
documents, reports, records, books, files and other materials maintained
relative to this Agreement shall be the property of MassMutual. Upon
termination of this Agreement, all said material shall be returned to the
applicable party.
MML DISTRIBUTORS and MassMutual shall establish and maintain facilities and
procedures for the safekeeping of all books, accounts, records, files, and
other materials related to this Agreement. Such books, accounts, records,
files, and other materials shall remain confidential and shall not be
voluntarily disclosed to any other person or entity except as described
below in section 16.
16. Availability of Records. MML DISTRIBUTORS and MassMutual shall each submit
to all regulatory and administrative bodies having jurisdiction over the
sales of the Contracts, present or future, any information, reports, or
other material that
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any such body by reason of this Agreement may request or require pursuant
to applicable laws or regulations. In particular, without limiting the
foregoing, MassMutual agrees that any books and records it maintains
pursuant to paragraph 15 of this Agreement which are required to be
maintained under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to
inspection by the SEC in accordance with Section 17(a) of the 1934 Act and
Sections 30 and 31 of the 1940 Act.
17. Confirmations. MassMutual agrees to prepare and mail a confirmation for
each transaction in connection with the Contracts at or before the
completion thereof as required by the 1934 Act and applicable
interpretations thereof, including Rule 10b-10 thereunder. Each such
confirmation shall reflect the facts of the transaction, and the form
thereof will show that it is being sent on behalf of MML DISTRIBUTORS or
Independent Broker acting in the capacity of agent for MassMutual.
18. Indemnification. MassMutual shall indemnify MML DISTRIBUTORS, Independent
Brokers, their registered representatives, officers, directors, employees,
agents and controlling persons and hold such persons harmless, from and
against any and all losses, damages, liabilities, claims, demands,
judgments, settlements, costs and expenses of any nature whatsoever
(including reasonable attorneys' fees and disbursements) resulting or
arising out of or based upon an allegation or finding that: (i) the
Registration Statement or any application or other document or written
information provided by or on behalf of MassMutual includes any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, written information furnished to
MassMutual by MML DISTRIBUTORS, Independent Brokers, or their registered
representatives specifically for use in the preparation thereof, or (ii)
there is a misrepresentation, breach of warranty or failure to fulfill any
covenant or warranty made or undertaken by MassMutual hereunder.
MML DISTRIBUTORS will indemnify MassMutual, its officers, directors,
employees, agents and controlling persons and hold such persons harmless,
from and against any and all losses, damages, liabilities, claims, demands,
judgments, settlements, costs and expenses of any nature whatsoever
(including
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reasonable attorneys' fees and disbursements) resulting or arising out of
or based upon an allegation or finding that: (i) MML DISTRIBUTORS or its
registered representatives offered or sold or engaged in any activity
relating to the offer and sale of the Contracts which was in violation of
any provision of the federal securities laws or, (ii) there is a material
misrepresentation, material breach of warranty or material failure to
fulfill any covenant or warranty made or undertaken by MML DISTRIBUTORS
hereunder.
Promptly after receipt by an indemnified party under this paragraph 18 of
notice of the commencement of any action by a third party, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this paragraph 18, notify the indemnifying party
of the commencement thereof; but the omission to notify the indemnifying
party will not relieve the indemnifying party from liability which the
indemnifying party may have to any indemnified party otherwise than under
this paragraph. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under this paragraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
19. Independent Contractor. MML DISTRIBUTORS shall be an independent
contractor. MML DISTRIBUTORS is responsible for its own conduct and the
employment, control and conduct of its agents and employees and for injury
to such agents or employees or to others through its agents or employees.
MML DISTRIBUTORS assumes full responsibility for its agents and employees
under applicable statutes and agrees to pay all employer taxes thereunder.
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20. Termination. Subject to termination as hereinafter provided, this Agreement
shall remain in full force and effect for the initial term of the
Agreement, which shall be for a two year period commencing on the date
first above written, and this Agreement shall continue in full force and
effect from year to year thereafter, until terminated as herein provided.
This Agreement may be terminated by either party hereto upon 30 days
written notice to the other party, or at any time upon the mutual written
consent of the parties hereto. This Agreement shall automatically be
terminated in the event of its assignment. Subject to MassMutual's
approval, however, MML DISTRIBUTORS may delegate any duty or function
assigned to it in this agreement provided that such delegation is
permissible under applicable law. Upon termination of this Agreement, all
authorizations, rights and obligations shall cease except the
obligations to settle accounts hereunder, including the settlement of
monies due in connection with the Contracts in effect at the time of
termination or issued pursuant to applications received by MassMutual prior
to termination.
21. Interpretation. This Agreement shall be subject to the provisions of the
1934 Act and the rules, regulations, and rulings thereunder and of the
NASD, from time to time in effect, and the terms hereof shall be
interpreted and construed in accordance therewith. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule,
or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be interpreted in accordance with the laws of
the Commonwealth of Massachusetts.
22. Non-exclusivity. The services of MML DISTRIBUTORS and MassMutual to the
Separate Account hereunder are not to be deemed exclusive and MML
DISTRIBUTORS and MassMutual shall be free to render similar services to
others so long as their services hereunder are not impaired or interfered
with hereby.
23. Amendment. This Agreement constitutes the entire Agreement between the
parties hereto and may not be modified except in a written instrument
executed by all parties hereto.
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24. Interests in and of MML DISTRIBUTORS. It is understood that any of the
policyholders, directors, officers, employees and agents of MassMutual may
be a shareholder, director, officer, employee, or agent of, or be otherwise
interested in, MML DISTRIBUTORS, any affiliated person of MML DISTRIBUTORS,
any organization in which MML DISTRIBUTORS may have an interest, or any
organization which may have an interest in MML DISTRIBUTORS; that MML
DISTRIBUTORS, any such affiliated person or any such organization may have
an interest in MassMutual; and that the existence of any such dual interest
shall not affect the validity hereof or of any transaction hereunder except
as otherwise provided in the Charter, Articles of Incorporation, or By-Laws
of MassMutual and MML DISTRIBUTORS, respectively, or by specific provision
of applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized and seals to
be affixed, as of the day and year first above written.
ATTEST: MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY, on its behalf
and on behalf of _______________
SEPARATE ACCOUNT
By: ______________________________
ATTEST: MML INVESTORS SERVICES, INC.
By: _______________________________
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<PAGE>
UNDERWRITING AND
SERVICING AGREEMENT
This UNDERWRITING AND SERVICING AGREEMENT is made this 1st day of May, 1996, by
and between MML Investors Services, Inc. ("MMLISI") and Massachusetts Mutual
Life Insurance Company ("MassMutual"), on its own behalf and on behalf of
____________________ Separate Account (the "Separate Account"), a separate
account of MassMutual, as follows:
WHEREAS, the Separate Account was established on ____________________, pursuant
to authority of the Board of Directors of MassMutual in order to set aside and
invest assets attributable to certain variable annuity contracts (the
"Contracts") issued by MassMutual; and
WHEREAS, MassMutual has registered the Separate Account under the Investment
Company Act of 1940, as amended, (the "1940 Act") and has registered the
Contracts under the Securities Act of 1933, as amended, (the "1933 Act"); and
WHEREAS, MassMutual will continue the effectiveness of the registrations of the
Separate Account under the 1940 Act and the Contracts under the 1933 Act; and
WHEREAS, MassMutual intends for the Contracts to be sold by its agents and
brokers who are required to be registered representatives of a broker-dealer
that is registered with the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934 ("1934 Act") and a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, MassMutual desires to engage MMLISI, a broker-dealer registered with
the SEC under the 1934 Act and a member of the NASD, to act as a co-underwriter
("Co-underwriter") in connection with the distribution of the Contracts by the
full-time career contracted agents of MassMutual ("Agents") and certain other
brokers, and in connection therewith, to provide certain services and
supervision to such Agents and brokers who are also registered representatives
of MMLISI and who sell the Contracts, and to otherwise perform certain duties
and functions that are necessary and proper for the distribution of the
Contracts as required under applicable federal and state securities laws and
NASD regulations, and MMLISI desires to act as Co-underwriter for the sale of
the Contracts and to assume such responsibilities;
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NOW, THEREFORE, the parties hereto agree as follows:
1. Underwriter. MassMutual hereby appoints MMLISI as, and MMLISI agrees to
serve as, Co-underwriter of the Contracts during the term of this Agreement
for purposes of federal and state securities laws. MassMutual reserves the
right, however, to refuse at any time or times to sell any Contracts
hereunder for any reason, and MassMutual maintains ultimate responsibility
for the sales of the Contracts.
2. Services. MMLISI agrees, on behalf of MassMutual and in its capacity as Co-
underwriter, to undertake at its own expense except as otherwise provided
herein, to provide certain sales, administrative and supervisory services
relative to the Contracts as described below, and otherwise to perform all
duties that are necessary and proper for the distribution of the Contracts
as required under applicable federal and state securities laws and NASD
regulations.
3. Best Efforts. MMLISI shall use reasonable efforts to sell the Contracts but
does not agree hereby to sell any specific number of Contracts and shall be
free to act as underwriter of other securities. MMLISI agrees to offer the
Contracts for sale in accordance with the prospectus then in effect for the
Contracts.
4. Compliance and Supervision. All persons who are engaged directly or
indirectly in the operations of MMLISI and MassMutual in connection with
the offer or sale of the Contracts shall be considered a "person
associated" with MMLISI as defined in Section 3(a)(18) of the 1934 Act.
MMLISI shall have full responsibility for the securities activities of each
such person as contemplated by Section 15 of the 1934 Act.
MMLISI shall be fully responsible for carrying out all compliance,
supervisory and other obligations hereunder with respect to the activities
of its registered representatives as required by the NASD Rules of Fair
Practice (the "Rules") and applicable federal and state securities laws.
Without limiting the generality of the foregoing, MMLISI agrees that it
shall be fully responsible for:
(a) ensuring that no representative of MMLISI shall offer or sell the
Contracts until such person is appropriately licensed, registered, or
otherwise qualified to offer and
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sell such Contracts under the federal securities laws and any
applicable securities laws of each state or other jurisdiction in
which such Contracts may be lawfully sold, in which MassMutual is
licensed to sell the Contracts, and in which such person shall offer
or sell the Contracts; and
(b) training and supervising MassMutual's Agents and brokers who are also
registered representatives of MMLISI for purposes of complying on a
continuous basis with the Rules and with federal and state securities
laws applicable in connection with the offering and sale of the
Contracts. In this connection, MMLISI shall:
(i) jointly conduct with MassMutual such training (including the
preparation and utilization of training materials) as in the
opinion of MMLISI and MassMutual is necessary to accomplish the
purposes of this Agreement;
(ii) establish and implement reasonable written procedures for
supervision of sales practices of registered representatives of
MMLISI who sell the Contracts;
(iii) provide a sufficient number of registered principals and
an adequately staffed compliance department to carry out the
responsibilities as set forth herein;
(iv) take reasonable steps to ensure that MassMutual Agents and
brokers who are also registered representatives of MMLISI
recommend the purchase of the Contracts only upon reasonable
grounds to believe that the purchase of the Contracts is
suitable for such applicant; and
(v) impose disciplinary measures on agents of MassMutual who are
also registered representatives of MMLISI as required.
The parties hereto recognize that any registered representative of
MMLISI selling the Contracts as contemplated by this Agreement shall
also be acting as an insurance agent of MassMutual or as an insurance
broker, and that the rights of MMLISI to supervise such persons
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<PAGE>
shall be limited to the extent specifically described herein or
required under applicable federal or state securities laws or NASD
regulations. Such persons shall not be considered employees of MMLISI
and shall be considered agents of MMLISI only as and to the extent
required by such laws and regulations. Further, it is intended by the
parties hereto that such persons are and shall continue to be
considered to have a common law independent contractor relationship
with MassMutual and not to be common law employees of MassMutual.
5. Registration and Qualification of Contracts. MassMutual has prepared or
caused to be prepared a registration statement describing the Contracts,
together with exhibits thereto (hereinafter referred to as the
"Registration Statement"). The Registration Statement includes a prospectus
(the "Prospectus") for the Contracts.
MassMutual agrees to execute such papers and to do such acts and things as
shall from time-to-time be reasonably requested by MMLISI for the purpose
of qualifying and maintaining qualification of the Contracts for sale under
applicable state law and for maintaining the registration of the Separate
Account and interests therein under the 1933 Act and the 1940 Act, to the
end that there will be available for sale from time-to-time such amounts of
the Contracts as MMLISI may reasonably be expected to sell. MassMutual
shall advise MMLISI promptly of any action of the SEC or any authorities of
any state or territory, of which it is aware, affecting registration or
qualification of the Separate Account, or rights to offer the Contracts for
sale.
If any event shall occur as a result of which it is necessary to amend or
supplement the Registration Statement in order to make the statements
therein, in light of the circumstances under which they were or are made,
true, complete or not misleading, MassMutual will forthwith prepare and
furnish to MMLISI, without charge, amendments or supplements to the
Registration Statement sufficient to make the statements made in the
Registration Statement as so amended or supplemented true, complete and not
misleading in light of the circumstances under which they were made.
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<PAGE>
6. Representations of MassMutual. MassMutual represents and warrants to MMLISI
as follows:
(a) MassMutual is an insurance company duly organized under the laws of
the Commonwealth of Massachusetts and is in good standing and is
authorized to conduct business under the laws of each state in which
the Contracts are sold, that the Separate Account was legally and
validly established as a segregated asset account under the Insurance
Code of Massachusetts, and that the Separate Account has been properly
registered as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account
for the Contracts.
(b) All persons that will be engaging in the offer or sale of the
Contracts will be authorized insurance agents of MassMutual.
(c) The Registration Statement does not and will not contain any
misstatements of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were or are
made, not materially misleading.
(d) MassMutual shall make available to MMLISI copies of all financial
statements that MMLISI reasonably requests for use in connection with
the offer and sale of the Contracts.
(e) No federal or state agency or bureau has issued an order preventing or
suspending the offer of the Contracts or the use of the Registration
Statement, or of any part thereof, with respect to the sale of the
Contracts.
(f) The offer and sale of the Contracts is not subject to registration, or
if necessary, is registered, under the Blue Sky laws of the states in
which the Contracts will be offered and sold.
(g) The Contracts are qualified for offer and sale under the applicable
state insurance laws in those states in which the Contracts shall be
offered for sale. In each state where such qualification is effected,
MassMutual shall file and make such statements or reports as are or
may be required by the laws of such state.
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<PAGE>
(h) This Agreement has been duly authorized, executed and delivered by
MassMutual and constitutes the valid and legally binding obligation of
MassMutual. Neither the execution and delivery of this Agreement by
MassMutual nor the consummation of the transactions contemplated
herein will result in a breach or violation of any provision of the
state insurance laws applicable to MassMutual, any judicial or
administrative orders in which it is named or any material agreement
or instrument to which it is a party or by which it is bound.
7. Representations of MMLISI. MMLISI represents and warrants to MassMutual as
follows:
(a) MMLISI is duly registered as a broker-dealer under the 1934 Act and is
a member in good standing of the NASD and, to the extent necessary to
perform the activities contemplated hereunder, is duly registered, or
otherwise qualified, under the applicable securities laws of every
state or other jurisdiction in which the Contracts are available for
sale.
(b) This Agreement has been duly authorized, executed and delivered by
MMLISI and constitutes the valid and legally binding obligation of
MMLISI. Neither the execution and delivery of this Agreement by MMLISI
nor the consummation of the transactions contemplated herein will
result in a breach or violation of any provision of the federal or
state securities laws or the Rules, applicable to MMLISI, or any
judicial or administrative orders in which it is named or any material
agreement or instrument to which it is a party or by which it is
bound.
(c) MMLISI shall comply with the Rules and the securities laws of any
jurisdiction in which it sells, directly or indirectly, any Contracts.
8. Expenses. MMLISI shall be responsible for all expenses incurred in
connection with its provision of services and the performance of its
obligations hereunder, except as otherwise provided herein.
MassMutual shall be responsible for all expenses of printing and
distributing the Prospectuses, and all other expenses of preparing,
printing and distributing all other sales literature or material for use in
connection with offering the Contracts for sale.
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<PAGE>
9. Sales Literature and Advertising. MMLISI agrees to ensure that its
registered representatives use only the Prospectus, statements of
additional information, or other applicable and authorized sales literature
then in effect in selling the Contracts. MMLISI is not authorized to give
any information or to make any representations concerning the Contracts
other than those contained in the current Registration Statement filed with
the SEC or in such sales literature as may be authorized by MassMutual.
MMLISI agrees to make timely filings with the SEC, the NASD, and such other
regulatory authorities as may be required of any sales literature or
advertising materials relating to the Contracts and intended for
distribution to prospective investors. MassMutual shall review and approve
all advertising and sales literature concerning the Contracts utilized by
MMLISI. MMLISI also agrees to furnish to MassMutual copies of all
agreements and plans it intends to use in connection with any sales of the
Contracts.
10. Applications. All applications for Contracts shall be made on application
forms supplied by MassMutual, and shall be remitted by MMLISI promptly,
together with such forms and any other required documentation, directly to
MassMutual at the address indicated on such application or to such other
address as MassMutual may, from time to time, designate in writing. All
applications are subject to acceptance or rejection by MassMutual at its
sole discretion.
11. Payments. All money payable in connection with any of the Contracts,
whether as premiums, purchase payments or otherwise, and whether paid by,
or on behalf of any applicant or Contract owner, is the property of
MassMutual and shall be transmitted immediately in accordance with the
administrative procedures of MassMutual without any deduction or offset for
any reason, including by example but not limitation, any deduction or
offset for compensation claimed by MMLISI. Checks or money orders as
payment on any Contract shall be drawn to the order of "Massachusetts
Mutual Life Insurance Company." No cash payments shall be accepted by
MMLISI in connection with the Contracts. Unless otherwise agreed to by
MassMutual in writing, neither MMLISI nor any of MassMutual's Agents nor
any broker shall have an interest in any surrender charges, deductions or
other fees payable to MassMutual as set forth herein.
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<PAGE>
12. Insurance Licenses. MassMutual shall apply for and maintain the proper
insurance licenses and appointments for each of the Agents and brokers
selling the Contracts in all states or jurisdictions in which the Contracts
are offered for sale by such person. MassMutual reserves the right to
refuse to appoint any proposed Agent or broker, and to terminate an Agent
or broker once appointed. MassMutual agrees to be responsible for all
licensing or other fees required under pertinent state insurance laws to
properly authorize Agents or brokers for the sale of the Contracts;
however, the foregoing shall not limit MassMutual's right to collect such
amount from any person or entity other than MMLISI.
13. Agent/Broker Compensation. Commissions or other fees due all brokers and
Agents in connection with the sale of Contracts shall be paid by
MassMutual, on behalf of MMLISI, to the persons entitled thereto in
accordance with the applicable agreement between each such broker or Agent
and MassMutual or a general agent thereof. MMLISI shall assist MassMutual
in the payment of such amounts as MassMutual shall reasonably request,
provided that MMLISI shall not be required to perform any acts that would
subject it to registration under the insurance laws of any state. The
responsibility of MMLISI shall include the performance of all activities by
MMLISI necessary in order that the payment of such amounts fully complies
with all applicable federal and state securities laws. Unless applicable
federal or state securities law shall require, MassMutual retains the
ultimate right to determine the commission rate paid to its Agents.
14. MMLISI Compensation. As payment for its services hereunder, MMLISI shall
receive an annual fee in the amount of $______ per year. Payments shall
commence and be made no later than December 31 of the year in which a
Contract is issued.
15. Books and Records. MMLISI and MassMutual shall each cause to be maintained
and preserved for the period prescribed such accounts, books, and other
documents as are required of it by the 1934 Act and any other applicable
laws and regulations. In particular, without limiting the foregoing, MMLISI
shall cause all the books and records in connection with the offer and sale
of the Contracts by its registered representatives to be maintained and
preserved in conformity with the requirements of Rules 17a-3 and 17a-4
under the 1934 Act, to the extent that such requirements are applicable to
the Contracts. The books, accounts, and records of MMLISI and MassMutual as
to all transactions hereunder shall be
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<PAGE>
maintained so as to disclose clearly and accurately the nature and details
of the transactions. The payment of premiums, purchase payments,
commissions and other fees and payments in connection with the Contracts by
its registered representatives shall be reflected on the books and records
of MMLISI as required under applicable NASD regulations and federal and
state securities laws requirements.
MMLISI and MassMutual, from time to time during the term of this Agreement,
shall divide the administrative responsibility for maintaining and
preserving the books, records and accounts kept in connection with the
Contracts; provided, however, in the case of books, records and accounts
kept pursuant to a requirement of applicable law or regulation, the
ultimate and legal responsibility for maintaining and preserving such
books, records and accounts shall be that of the party which is required to
maintain or preserve such books, records and accounts under the applicable
law or regulation, and such books, records and accounts shall be maintained
and preserved under the supervision of that party. MMLISI and MassMutual
shall each cause the other to be furnished with such reports as it may
reasonably request for the purpose of meeting its reporting and
recordkeeping requirements under such regulations and laws, and under the
insurance laws of the Commonwealth of Massachusetts and any other
applicable states or jurisdictions.
MMLISI and MassMutual each agree and understand that all documents,
reports, records, books, files and other materials required under
applicable Rules and federal and state securities laws shall be the
property of MMLISI, unless such documents, reports, records, books, files
and other materials are required by applicable regulation or law to be also
maintained by MassMutual, in which case such material shall be the joint
property of MMLISI and MassMutual. All other documents, reports, records,
books, files and other materials maintained relative to this Agreement
shall be the property of MassMutual. Upon termination of this Agreement,
all said material shall be returned to the applicable party.
MMLISI and MassMutual shall establish and maintain facilities and
procedures for the safekeeping of all books, accounts, records, files, and
other materials related to this Agreement. Such books, accounts, records,
files, and other materials shall remain confidential and shall not be
voluntarily disclosed to any other person or entity except as described
below in section 16.
9
<PAGE>
16. Availability of Records. MMLISI and MassMutual shall each submit to all
regulatory and administrative bodies having jurisdiction over the sales of
the Contracts, present or future, any information, reports, or other
material that any such body by reason of this Agreement may request or
require pursuant to applicable laws or regulations. In particular, without
limiting the foregoing, MassMutual agrees that any books and records it
maintains pursuant to paragraph 15 of this Agreement which are required to
be maintained under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to
inspection by the SEC in accordance with Section 17(a) of the 1934 Act and
Sections 30 and 31 of the 1940 Act.
17. Confirmations. MassMutual agrees to prepare and mail a confirmation for
each transaction in connection with the Contracts at or before the
completion thereof as required by the 1934 Act and applicable
interpretations thereof, including Rule 10b-10 thereunder. Each such
confirmation shall reflect the facts of the transaction, and the form
thereof will show that it is being sent on behalf of MMLISI acting in the
capacity of agent for MassMutual.
18. Indemnification. MassMutual shall indemnify MMLISI, its registered
representatives, officers, directors, employees, agents and controlling
persons and hold such persons harmless, from and against any and all
losses, damages, liabilities, claims, demands, judgments, settlements,
costs and expenses of any nature whatsoever (including reasonable
attorneys' fees and disbursements) resulting or arising out of or based
upon an allegation or finding that: (i) the Registration Statement or any
application or other document or written information provided by or on
behalf of MassMutual includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading,
unless such statement or omission was made in reliance upon, and in
conformity with, written information furnished to MassMutual by MMLISI or
its registered representatives specifically for use in the preparation
thereof, or (ii) there is a misrepresentation, breach of warranty or
failure to fulfill any covenant or warranty made or undertaken by
MassMutual hereunder.
MMLISI will indemnify MassMutual, its officers, directors, employees,
agents and controlling persons and hold such persons harmless, from and
against any and all losses, damages, liabilities, claims, demands,
judgments, settlements,
10
<PAGE>
costs and expenses of any nature whatsoever (including reasonable
attorneys' fees and disbursements) resulting or arising out of or based
upon an allegation or finding that: (i) MMLISI or its registered
representatives offered or sold or engaged in any activity relating to the
offer and sale of the Contracts which was in violation of any provision of
the federal securities laws or, (ii) there is a material misrepresentation,
material breach of warranty or material failure to fulfill any covenant or
warranty made or undertaken by MMLISI hereunder.
Promptly after receipt by an indemnified party under this paragraph 18 of
notice of the commencement of any action by a third party, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this paragraph 18, notify the indemnifying party
of the commencement thereof; but the omission to notify the indemnifying
party will not relieve the indemnifying party from liability which the
indemnifying party may have to any indemnified party otherwise than under
this paragraph. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election to assume the
defense thereof, the indemnifying party will not be liable to such
indemnified party under this paragraph for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
19. Independent Contractor. MMLISI shall be an independent contractor. MMLISI
is responsible for its own conduct and the employment, control and conduct
of its agents and employees and for injury to such agents or employees or
to others through its agents or employees. MMLISI assumes full
responsibility for its agents and employees under applicable statutes and
agrees to pay all employer taxes thereunder.
11
<PAGE>
20. Termination. Subject to termination as hereinafter provided, this Agreement
shall remain in full force and effect for the initial term of the
Agreement, which shall be for a two year period commencing on the date
first above written, and this Agreement shall continue in full force and
effect from year to year thereafter, until terminated as herein provided.
This Agreement may be terminated by either party hereto upon 30 days
written notice to the other party, or at any time upon the mutual written
consent of the parties hereto. This Agreement shall automatically be
terminated in the event of its assignment. Subject to MassMutual's
approval, however, MMLISI may delegate any duty or function assigned to it
in this agreement provided that such delegation is permissible under
applicable law. Upon termination of this Agreement, all authorizations,
rights and obligations shall cease except the obligations to settle
accounts hereunder, including the settlement of monies due in connection
with the Contracts in effect at the time of termination or issued pursuant
to applications received by MassMutual prior to termination.
21. Interpretation. This Agreement shall be subject to the provisions of the
1934 Act and the rules, regulations, and rulings thereunder and of the
NASD, from time to time in effect, and the terms hereof shall be
interpreted and construed in accordance therewith. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule,
or otherwise, the remainder of this Agreement shall not be affected
thereby. This Agreement shall be interpreted in accordance with the laws of
the Commonwealth of Massachusetts.
22. Non-exclusivity. The services of MMLISI and MassMutual to the Separate
Account hereunder are not to be deemed exclusive and MMLISI and MassMutual
shall be free to render similar services to others so long as their
services hereunder are not impaired or interfered with hereby.
23. Amendment. This Agreement constitutes the entire Agreement between the
parties hereto and may not be modified except in a written instrument
executed by all parties hereto.
24. Interests in and of MMLISI. It is understood that any of the policyholders,
directors, officers, employees and agents of MassMutual may be a
shareholder, director, officer, employee, or agent of, or be otherwise
interested in, MMLISI, any affiliated person of MMLISI, any organization in
which MMLISI
12
<PAGE>
may have an interest, or any organization which may have an interest in
MMLISI; that MMLISI, any such affiliated person or any such organization
may have an interest in MassMutual; and that the existence of any such dual
interest shall not affect the validity hereof or of any transaction
hereunder except as otherwise provided in the Charter, Articles of
Incorporation, or By-Laws of MassMutual and MMLISI, respectively, or by
specific provision of applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized and seals to
be affixed, as of the day and year first above written.
ATTEST: MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY, on its
behalf and on behalf of
_____________SEPARATE ACCOUNT
By: ______________________________
ATTEST: MML INVESTORS SERVICES, INC.
By:_______________________________
13
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Massachusetts Mutual Life Insurance Company
We consent to the inclusion in Post-Effective Amendment No. 11 to the
Registration Statement of Massachusetts Mutual Variable Annuity Separate Account
2 - Flex Extra segment on Form N-4, (Registration No. 33-7723) of our report
dated March 1, 1996 on our audits of the supplemental financial statements of
Massachusetts Mutual Life Insurance Company, which, as more fully described in
our report, give retroactive effect to the merger of Massachusetts Mutual Life
Insurance Company and Connecticut Mutual Life Insurance Company, and which
includes an explanatory paragraph relating to the pending sale of a wholly-owned
insurance subsidiary, and our report dated February 9, 1996 on our audits of
Massachusetts Mutual Variable Annuity Separate Account 1 - Flex Extra segment
and Massachusetts Mutual Variable Annuity Separate Account 2 - Flex Extra
segment. We also consent to the reference to our Firm under the caption
"Independent Accountants" in the Statement of Additional Information.
Springfield, Massachusetts
April 26, 1996
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Daniel J. Fitzgerald, Chief Financial Officer of Massachusetts
Mutual Life Insurance Company("MassMutual"), does hereby constitute and appoint
Lawrence V. Burkett, Thomas F. English, Richard M. Howe, and Michael Berenson,
and each of them individually, as his true and lawful attorneys and agents.
Such attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as Chief Financial Officer of MassMutual that said attorneys and agents may deem
necessary or advisable to enable MassMutual to comply with the Securities Act of
1933, as amended (the "1933 Act"), the Investment Company Act of 1940, as
amended (the "1940 Act"), and any rules, regulations, orders or other
requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as Chief Financial Officer of MassMutual to the Registration
Statements and to any instruments or documents filed or to be filed with the
Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Daniel J. Fitzgerald
- -------------------------------- --------------------------------
Daniel J. Fitzgerald Witness
Chief Financial Officer
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Thomas B. Wheeler, Chief Executive Officer and Chairman of the
Board of Directors of Massachusetts Mutual Life Insurance Company("MassMutual"),
does hereby constitute and appoint Lawrence V. Burkett, Thomas F. English,
Richard M. Howe, and Michael Berenson, and each of them individually, as his
true and lawful attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as Chief Executive Officer and Chairman of the Board of Directors of MassMutual
that said attorneys and agents may deem necessary or advisable to enable
MassMutual to comply with the Securities Act of 1933, as amended (the "1933
Act"), the Investment Company Act of 1940, as amended (the "1940 Act"), and any
rules, regulations, orders or other requirements of the Securities and Exchange
Commission (the "Commission") thereunder. This power of attorney applies to the
registration, under the 1933 Act and the 1940 Act, of shares of beneficial
interest of MassMutual separate investment accounts (the "MassMutual Separate
Accounts"). This power of attorney authorizes such attorneys and agents to sign
the Undersigned's name on his behalf as Chief Executive Officer and Chairman of
the Board of Directors of MassMutual to the Registration Statements and to any
instruments or documents filed or to be filed with the Commission under the 1933
Act and the 1940 Act in connection with such Registration Statements, including
any and all amendments to such statements, documents or instruments of any
MassMutual Separate Account, including but not limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Thomas B. Wheeler
- -------------------------------- --------------------------------
Thomas B. Wheeler Witness
Chief Executive Officer and
Chairman of the Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, John J. Pajak, Vice Chairman of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as Vice Chairman of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as Vice Chairman of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ John J. Pajak
- -------------------------------- --------------------------------
John J. Pajak Witness
Vice Chairman of the Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, James R. Birle, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 16th day of February,
1996.
/s/ James R. Birle
- -------------------------------- --------------------------------
James R. Birle Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Frank C. Carlucci, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Frank C. Carlucci
- -------------------------------- --------------------------------
Frank C. Carlucci Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Gene Chao, a member of the Board of Directors of Massachusetts
Mutual Life Insurance Company("MassMutual"), does hereby constitute and appoint
Lawrence V. Burkett, Thomas F. English, Richard M. Howe, and Michael Berenson,
and each of them individually, as his true and lawful attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Gene Chao
- -------------------------------- --------------------------------
Gene Chao Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Patricia Diaz Dennis, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as her true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
her behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set her hand this 19th day of February,
1996.
/s/ Patricia Diaz Dennis
- -------------------------------- --------------------------------
Patricia Diaz Dennis Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, William B. Ellis, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ William B. Ellis
- -------------------------------- --------------------------------
William B. Ellis Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Robert M. Furek, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Robert M. Furek
- -------------------------------- --------------------------------
Robert M. Furek Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, George B. Harvey, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ George B. Harvey
- -------------------------------- --------------------------------
George B. Harvey Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, John F. Maypole, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ John F. Maypole
- -------------------------------- --------------------------------
John F. Maypole Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, David E. Sams, Jr., a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of attorney
authorizes such attorneys and agents to sign the Undersigned's name on his
behalf as a member of the Board of Directors of MassMutual to the Registration
Statements and to any instruments or documents filed or to be filed with the
Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 19th day of February,
1996.
/s/ David E. Sams, Jr.
- -------------------------------- --------------------------------
David E. Sams, Jr. Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Roger G. Ackerman, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Roger G. Ackerman
- -------------------------------- --------------------------------
Roger G. Ackerman Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Anthony Downs, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Anthony Downs
- -------------------------------- --------------------------------
Anthony Downs Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, James L. Dunlap, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ James L. Dunlap
- -------------------------------- --------------------------------
James L. Dunlap Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Charles K. Gifford, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Charles K. Gifford
- -------------------------------- --------------------------------
Charles K. Gifford Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, William N. Griggs, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 16th day of February,
1996.
/s/ William N. Griggs
- -------------------------------- --------------------------------
William N. Griggs Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, James G. Harlow, Jr., a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ James G. Harlow, Jr.
- -------------------------------- --------------------------------
James G. Harlow, Jr. Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Barbara B. Hauptfuhrer, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as her true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
her behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set her hand this 1st day of March, 1996.
/s/ Barbara B. Hauptfuhrer
- -------------------------------- --------------------------------
Barbara B. Hauptfuhrer Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Sheldon B. Lubar, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Sheldon B. Lubar
- -------------------------------- --------------------------------
Sheldon B. Lubar Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, William B. Marx, Jr., a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ William B. Marx, Jr.
- -------------------------------- --------------------------------
William B. Marx, Jr. Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Donald F. McCullough, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 1st day of March, 1996.
/s/ Donald F. McCullough
- -------------------------------- --------------------------------
Donald F. McCullough Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Barbara Scott Preiskel, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as her true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
her behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set her hand this 1st day of March, 1996.
/s/ Barbara Scott Preiskel
- -------------------------------- --------------------------------
Barbara Scott Preiskel Witness
Member, Board of Directors
<PAGE>
POWER OF ATTORNEY
MASSMUTUAL SEPARATE INVESTMENT ACCOUNTS
---------------------------------------
The Undersigned, Alfred M. Zeien, a member of the Board of Directors of
Massachusetts Mutual Life Insurance Company ("MassMutual"), does hereby
constitute and appoint Lawrence V. Burkett, Thomas F. English, Richard M. Howe,
and Michael Berenson, and each of them individually, as his true and lawful
attorneys and agents.
The attorneys and agents shall have full power of substitution and to take any
and all action and execute any and all instruments on the Undersigned's behalf
as a member of the Board of Directors of MassMutual that said attorneys and
agents may deem necessary or advisable to enable MassMutual to comply with the
Securities Act of 1933, as amended (the "1933 Act"), the Investment Company Act
of 1940, as amended (the "1940 Act"), and any rules, regulations, orders or
other requirements of the Securities and Exchange Commission (the "Commission")
thereunder. This power of attorney applies to the registration, under the 1933
Act and the 1940 Act, of shares of beneficial interest of MassMutual separate
investment accounts (the "MassMutual Separate Accounts"). This power of
attorney authorizes such attorneys and agents to sign the Undersigned's name on
his behalf as a member of the Board of Directors of MassMutual to the
Registration Statements and to any instruments or documents filed or to be filed
with the Commission under the 1933 Act and the 1940 Act in connection with such
Registration Statements, including any and all amendments to such statements,
documents or instruments of any MassMutual Separate Account, including but not
limited to those listed below.
MassMutual Separate Investment Account C
Massachusetts Mutual Variable Annuity Fund 1
Massachusetts Mutual Variable Annuity Fund 2
Massachusetts Mutual Variable Annuity Separate Account 1
Massachusetts Mutual Variable Annuity Separate Account 2
Massachusetts Mutual Variable Annuity Separate Account 3
Massachusetts Mutual Variable Life Separate Account I
Massachusetts Mutual Variable Life Separate Account II
Panorama Separate Account
CML Variable Annuity Account A
CML Variable Annuity Account B
CML Accumulation Annuity Account E
Connecticut Mutual Variable Life Separate Account I
Panorama Plus Separate Account
CML/OFFITBANK Separate Account
The Undersigned hereby ratifies and confirms all that said attorneys and agents
shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the Undersigned has set his hand this 16th day of February,
1996.
/s/ Alfred M. Zeien
- -------------------------------- --------------------------------
Alfred M. Zeien Witness
Member, Board of Directors
<PAGE>
SCHEDULE OF COMPUTATION OF PERFORMANCE
FLEX EXTRA
The following examples are calculated in accordance with the methods described
in the Prospectus and Statement of Additional Information:
1. Standardized Average Annual Total Return
----------------------------------------
Assuming experience from the Equity Division, on a Single Purchase Payment
Contract
$1,000 Purchase Payment on 12/31/94
A $30 Annual Administrative Fee was charged on each contract anniversary.
For this calculation, it is prorated among divisions, with 34% allocated to
the Equity Division.
The Deferred Sales Load for a Single Purchase Payment Contract on 12/31/95
would have been 4%. The 10% free corridor was also applicable.
Dates Accumulation Unit Values
----- ------------------------
12/31/94 1.89314845
12/31/95 2.45170806
The Standardized Average Annual Total Return for the period
12/31/94-12/31/95: 23.86%
Accumulated Value on 12/31/95
([1000/1.89314845] x 2.45170806) - (.34 x 30) $ 1,284.84
Ending Redeemable Value on 12/31/95
1284.84 - (.9 x .04 x 1284.84) $ 1,238.59
Standardized Average Annual Total Return, 12/31/94-12/31/95
([1238.59/1000]- 1) x 100 23.86%
2. Percentage Change in Accumulation Unit Values
---------------------------------------------
Assuming experience from the Blend Division
Unit Value 12/31/94 1.84701880
Unit Value 12/31/95 2.24841768
Percentage Change in Unit Values for 1995: 21.73%
(2.24841768-1.84701880)/1.84701880 x 100
<PAGE>
3. Annualized Accumulation Unit Value(AUV) Return
----------------------------------------------
For a one year period, the annualized AUV return is equal to the percentage
change in accumulation unit values.
For periods greater than one year, the annualized AUV return is an average
annual change in accumulation unit values, based on the percentage change.
Assuming experience from the Blend Division
Unit Value 12/31/92 1.68614356
Unit Value 12/31/95 2.24841768
Percentage Change in Unit Values for the 3 year period ending
12/31/95: 33.35%
(2.24841768 - 1.68614356)/1.68614356 x 100
Annualized AUV Return for the 3 year period ending 12/31/95: 10.07%
([1.3335 *(1/3)] - 1) x 100
The symbol * is being used to denote exponentiation.
4. Non-Standardized Average Annual Total Return
--------------------------------------------
Assuming experience from the Managed Bond Division
Single Purchase Payment 12/31/85 $50,000
Accumulated Value 12/31/95 $108,509
Average Annual Total Return: 8.06%
([108,509/50,000]*[1/10] - 1) x 100
The symbol * is being used to denote exponentiation.
5. One Year Total Return
---------------------
Assuming experience from the Money Market Division
Single Purchase Payment 12/31/85 $50,000
Accumulated Value 12/31/1994 $74,858
Accumulated Value 12/31/1995 $77,994
One Year Total Return: 4.19%
([77,994-74,858]/74,858) x 100
<PAGE>
6. 7-day Money Market Yield and Effective Yield
--------------------------------------------
Assuming experience from the Money Market Division
For the period ending 12/31/95
Unit Value 12/22/95 1.46613464
Unit Value 12/26/95 1.46678162
Unit Value 12/31/95 1.46756696
To get the change in value from 12/22/95 to 12/26/95, take 50% of
the change from 12/22/95 to 12/26/95:
([1.46678162/1.46613464]-1).5) 0.000221
Change in value from 12/26/95 to 12/31/95:
(1.46756696/1.46678162)-1 0.000535
Combine to get change in value from 12/24/95 to 12/31/95:
(0.000221 + 0.000535) 0.000756
Yield: .000756 x (365/7) x 100 = 3.94%
Effective Yield: ([1.000756]*[365/7] - 1) x 100 = 4.02%
The symbol * is being used to denote exponentiation.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 512,339,865
<INVESTMENTS-AT-VALUE> 591,881,168
<RECEIVABLES> 17,588,294
<ASSETS-OTHER> 2,680
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 609,472,142
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 136,728
<TOTAL-LIABILITIES> 136,728
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
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<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 609,335,414
<DIVIDEND-INCOME> 27,498,044
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 6,377,152
<NET-INVESTMENT-INCOME> 21,120,892
<REALIZED-GAINS-CURRENT> 4,097,100
<APPREC-INCREASE-CURRENT> 74,893,213
<NET-CHANGE-FROM-OPS> 100,111,205
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 210,766,214
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 503,952,307
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
