<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 2000
REGISTRATION NO. 333-19123
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
(Exact Name of Registrant)
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
1000 WOODBURY ROAD
WOODBURY, NEW YORK 11797
(Name and Address of principal executive office of depositor)
------------------------
STEWART D. GREGG
COUNSEL
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MN 55440
------------------------
Copy to:
GREGORY A. OLSON
ASSOCIATE COUNSEL
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MN 55440
------------------------
It is proposed that this filing will become effective
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on May 1, 2000 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
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
------------------------
TITLE OF SECURITIES BEING REGISTERED:
VARIABLE LIFE CONTRACTS ISSUED BY A REGISTERED SEPARATE ACCOUNT.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE SEPARATE ACCOUNT I
CROSS REFERENCE SHEET
(RECONCILIATION AND TIE SHEET)
<TABLE>
<CAPTION>
ITEM NUMBER OF
FORM N-8B-2 HEADING IN THE PROSPECTUS
- -------------- -------------------------
<C> <S>
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 ReliaStar Life Insurance Company of New York; The Variable
Account
6 The Variable Account
7 Not Applicable
8 Not Applicable
9 Not Applicable
10 Summary; Death Benefit; Payment and Allocation of Premiums;
Death Benefit Guarantee; Accumulation Value; Policy Lapse
and Reinstatement; Surrender Benefits; Additional
Information on the Investments of the Variable Account;
Transfers; Policy Loans; Free Look and Conversion Rights;
Voting Rights; General Provisions; Appendix A; Appendix B
11 Deductions and Charges; Additional Information on the
Investments of the Variable Account
12 Additional Information on the Investments of the Variable
Account
13 Deductions and Charges
14 The Policies; General Provisions; Distribution of the
Policies
15 Payment and Allocation of Premiums; Additional Information
on the Investments of the Variable Account
16 Payment and Allocation of Premiums; Surrender Benefits;
Additional Information on the Investments of the Variable
Account
17 Surrender Benefits; Policy Loans; Free Look and Conversion
Rights; General Provisions
18 The Variable Account; Additional Information on the
Investments of the Variable Account; Payment and Allocation
of Premiums
19 Voting Rights; General Provisions
20 Not Applicable
21 Policy Loans
22 Not Applicable
23 Bonding Arrangements
24 Definitions; General Provisions
25 ReliaStar Life Insurance Company of New York
26 Not Applicable
27 ReliaStar Life Insurance Company of New York
28 Management
29 ReliaStar Life Insurance Company of New York
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Applicable
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NUMBER OF
FORM N-8B-2 HEADING IN THE PROSPECTUS
- -------------- -------------------------
<C> <S>
41 Distribution of the Policies
42 Management
43 Not Applicable
44 Additional Information on the Investments of the Variable
Account; Payment and Allocation of Premiums; Deductions and
Charges
45 Not Applicable
46 Additional Information on the Investments of the Variable
Account; Deductions and Charges
47 Additional Information on the Investments of the Variable
Account
48 ReliaStar Life Insurance Company of New York; State
Regulation
49 Not Applicable
50 The Variable Account
51 Cover Page; The Policies; Death Benefit; Payment and
Allocation of Premiums; Deductions and Charges; Policy Lapse
and Reinstatement; General Provisions; Free Look and
Conversion Rights
52 Additional Information on the Investments of the Variable
Account
53 Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
</TABLE>
<PAGE> 4
[RELIASTAR LOGO]
ReliaStar Life Insurance Company of New York
1000 Woodbury Road
Woodbury, New York 11797
-------------------------------------
SELECTQLIFE NY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
ISSUED BY
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
OF
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
ReliaStar Life Insurance Company of New York is offering the flexible
premium variable life insurance policy (SelectQLife NY) described in this
prospectus. ReliaStar designed the Policy to provide (1) a death benefit payable
when the insured person dies; and (2) maximum flexibility regarding premium
payments and death benefits. Subject to certain restrictions, Policy owners may:
- vary the frequency and amount of premium payments;
- increase or decrease the level of death benefits payable under the
policy; and
- allocate premiums to:
-- the Fixed Account, an account that provides a minimum specified
rate of interest; and
-- Sub-Accounts of ReliaStar Life Insurance Company of New York
Variable Life Separate Account I, a Variable account allowing you
to invest in certain portfolios of the following Funds:
AIM Variable Insurance Funds, Inc.
The Alger American Fund
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
Janus Aspen Series
Neuberger Berman Advisers Management Trust
Pilgrim Variable Products Trust
OCC Accumulation Trust
Putnam Variable Trust
If you allocate net premiums to Sub-Accounts of ReliaStar Life Insurance
Company of New York Variable Life Separate Account I, the amount of the Policy's
death benefit may, and the total value attributed to a Policy will, vary to
reflect the investment performance of the Sub-Accounts you select.
The Policy's purpose is to provide insurance protection for the
beneficiary. ReliaStar does not claim that investing in the Policy is in any way
similar or comparable to a systematic investment plan or a mutual fund.
Generally, the Policy will remain in force as long as the cash surrender
value (that is, the amount that ReliaStar would pay if you surrender the Policy)
is sufficient to pay certain monthly charges. However, under certain
circumstances the Policy provides a death benefit guarantee that allows the
Policy to remain in force without regard to the cash surrender value. See "Death
Benefit Guarantee."
Interests in the Policies and shares of the Funds are not deposits or
obligations of or guaranteed by a bank, and are not Federally insured by the
Federal Deposit Insurance Corporation or any other government agency.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED THESE SECURITIES OR
DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE.
CALL 1-800-456-6965 TO OBTAIN A CURRENT PROSPECTUS FOR ANY OF THE FUNDS. A
CURRENT PROSPECTUS FOR EACH OF THE FUNDS MUST ACCOMPANY THIS PROSPECTUS AND
SHOULD BE READ IN CONJUNCTION WITH THIS PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS MAY 1, 2000.
<PAGE> 5
<TABLE>
<S> <C>
DEFINITIONS................................................. 5
PART 1. SUMMARY
The Policy................................................ 7
Free Look Rights.......................................... 8
Premium Payments.......................................... 8
The Variable Account...................................... 8
The Fixed Account......................................... 8
The Funds................................................. 8
Charges Against the Accumulation Value.................... 11
Charges Upon Lapse or Total Surrender of the Policy....... 11
Surrenders................................................ 11
Partial Withdrawals....................................... 11
Loans..................................................... 11
Transfers................................................. 12
Death Benefit Overview.................................... 12
Adjusting the Death Benefit............................... 12
Death Benefit Guarantee................................... 12
Lapse..................................................... 12
Taxation of Death Benefit Proceeds........................ 12
Taxation of the Policy.................................... 13
PART 2. DETAILED INFORMATION
ReliaStar Life Insurance Company of New York.............. 13
The Policies.............................................. 13
Deductions and Charges................................. 13
Premium Expense Charge................................. 14
Monthly Deduction...................................... 14
Cost of Insurance.................................... 14
Monthly Administrative Charge........................ 14
Monthly Mortality and Expense Risk Charge............ 15
Optional Insurance Benefit Charges................... 15
Surrender Charge....................................... 15
Partial Withdrawal and Transfer Charges................ 16
Modification of Charges................................ 16
Investment Advisory Fees and Other Fund Expenses....... 17
Fund Expenses.......................................... 17
The Variable Account...................................... 18
Investments of the Variable Account.................... 19
Performance Information................................ 19
Death Benefit............................................. 20
Death Benefit Options.................................. 20
Level Amount Option.................................. 20
Variable Amount Option............................... 21
Which Death Benefit Option to Choose................... 22
Requested Changes in Face Amount.......................... 22
Increases.............................................. 22
Decreases.............................................. 22
Effect of Requested Changes in Face Amount............. 22
Insurance Protection...................................... 23
Changing the Death Benefit Option......................... 24
Accelerated Benefit Rider................................. 24
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C>
Payment and Allocation of Premiums........................ 25
Issuing the Policy..................................... 25
Coverage............................................. 25
Minimum Initial Premium.............................. 25
Allocating Premiums.................................... 25
Crediting Net Premiums............................... 25
Refunding Premiums................................... 26
Amount and Timing of Premiums.......................... 26
Planned Periodic Premiums.............................. 26
Paying Premiums by Mail................................ 27
Death Benefit Guarantee................................... 27
Requirements for the Death Benefit Guarantee........... 27
Accumulation Value........................................ 28
Illustration of Policy Benefits........................... 29
Specialized Uses of the Policy............................ 29
Policy Lapse and Reinstatement............................ 29
Lapse.................................................. 29
Reinstatement.......................................... 30
Surrender Benefits........................................ 30
Total Surrender........................................ 30
Partial Withdrawal..................................... 30
Effect of Partial Withdrawal......................... 31
Transfers................................................. 31
Telephone/Fax Instructions............................. 32
Dollar Cost Averaging Service.......................... 32
Portfolio Rebalancing Service.......................... 33
Transfer Limits........................................ 33
Transfer Charges....................................... 33
Policy Loans.............................................. 33
General................................................ 33
Immediate Effect of Policy Loans....................... 34
Effect on Investment Performance....................... 34
Effect on Policy Coverage.............................. 34
Interest............................................... 35
Repayment of Loan Amount............................... 35
Tax Considerations..................................... 35
Free Look and Conversion Rights........................... 35
Free Look Rights....................................... 35
Conversion Rights...................................... 35
General Option....................................... 35
Additional Information on the Investments of the
Variable Account...................................... 36
Investment Limits.................................... 36
Addition, Deletion, or Substitution of Investments... 36
Voting Rights............................................. 37
Disregarding Voting Instructions....................... 37
Benefits at Age 95........................................ 38
General Provisions........................................ 38
Ownership.............................................. 38
Proceeds............................................... 38
Beneficiary............................................ 38
Postponement of Payments............................... 39
Settlement Options..................................... 39
Interest on Settlement Options....................... 39
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
Incontestability....................................... 40
Misstatement of Age and Sex............................ 40
Suicide................................................ 40
Termination............................................ 40
Amendment.............................................. 40
Reports................................................ 41
Annual Statement..................................... 41
Projection Report.................................... 41
Other Reports........................................ 41
Dividends.............................................. 41
Collateral Assignment.................................. 41
Optional Insurance Benefits............................ 41
Accelerated Benefit Rider............................ 41
Accidental Death Benefit Rider....................... 41
Additional Insured Rider............................. 41
Waiver of Monthly Deduction Rider.................... 41
Cost of Living Increase Rider........................ 41
Total Disability Specified Premium Rider............. 41
Federal Tax Matters....................................... 42
Introduction........................................... 42
Tax Status of the Policy............................... 42
Tax Treatment of Policy Benefits....................... 42
In General........................................... 42
Modified Endowment Contracts......................... 42
Distributions from Modified Endowment Contracts...... 43
Distributions from Policies That Are Not Modified
Endowment Contracts................................. 43
Policy Loans......................................... 43
Multiple Policies.................................... 43
Taxation of ReliaStar Life Insurance Company of New
York.................................................. 43
Possible Changes in Taxation........................... 44
Other Considerations................................... 44
Legal Developments Regarding Employment-Related Benefit
Plans................................................. 44
Distribution of the Policies.............................. 44
Management................................................ 45
Directors and Officers................................. 45
State Regulation.......................................... 48
Legal Proceedings......................................... 48
Bonding Arrangements...................................... 49
Legal Matters............................................. 49
Experts................................................... 49
Registration Statement Contains Further Information....... 49
Financial Statements...................................... 49
Appendices................................................ A-1
</TABLE>
THE POLICY MAY NOT BE AVAILABLE IN ALL JURISDICTIONS. THIS PROSPECTUS
CONSTITUTES AN OFFERING OR SOLICITATION ONLY IN THOSE JURISDICTIONS WHERE SUCH
OFFERING OR SOLICITATION MAY LAWFULLY BE MADE.
RELIASTAR HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS REGARDING THE POLICY OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR THE ACCOMPANYING FUND PROSPECTUSES. DO NOT RELY ON ANY SUCH
INFORMATION OR REPRESENTATIONS.
4
<PAGE> 8
DEFINITIONS
ACCUMULATION VALUE. The total value attributable to a specific Policy, which
equals the sum of the Variable Accumulation Value (the total of the values
in each Sub-Account of the Variable Account) and the Fixed Accumulation
Value (the value in the Fixed Account). See "Accumulation Value" at page 28
and Appendix B.
AGE. The Insured's age at the last birthday determined as of the beginning of
each Policy Year.
CASH SURRENDER VALUE. The Accumulation Value less any Surrender Charge, Loan
Amount and unpaid Monthly Deductions.
CASH VALUE. The Accumulation Value less any Surrender Charge.
CODE. Internal Revenue Code of 1986, as amended.
DEATH BENEFIT. The amount determined under the applicable Death Benefit Option.
We will reduce the proceeds payable to the beneficiary upon the Insured's
death by any Loan Amount and any unpaid Monthly Deductions. See "Death
Benefit" at page 20.
DEATH BENEFIT GUARANTEE. A feature of the Policy guaranteeing that the Policy
will not lapse during the Death Benefit Guarantee Period specified in your
Policy if, on each Monthly Anniversary, the total premiums paid on the
Policy, less any partial withdrawals and any Loan Amount, equals or exceeds
the total required Minimum Monthly Premium payments specified in your
Policy. See "Death Benefit Guarantee" at page 27.
DEATH BENEFIT OPTION. Either of two death benefit options available under the
Policy (the Level Amount Option and the Variable Amount Option). See "Death
Benefit -- Death Benefit Options" at page 20.
FACE AMOUNT. The minimum Death Benefit under the Policy as long as the Policy
remains in force. See "Death Benefit" at page 20.
FIXED ACCOUNT. ReliaStar Life Insurance Company of New York's assets other than
those allocated to the Variable Account or any other separate account. See
Appendix A.
FIXED ACCUMULATION VALUE. The value attributable to a specific Policy based upon
amounts in the Fixed Account. Unlike the Variable Accumulation Value, the
Fixed Accumulation Value will not reflect the investment performance of the
Funds. See "Accumulation Value" at page 28 and Appendix B.
FUNDS. Any open-end management investment company (or portfolio thereof) or unit
investment trust (or series thereof) in which a Sub-Account invests. See
"Investments of the Variable Account" at page 19.
INSURED. The person upon whose life we issue the Policy.
ISSUE DATE. The date insurance coverage under a Policy begins.
LOAN AMOUNT. The sum of all unpaid Policy loans including unpaid interest due
thereon. See "Policy Loans" at page 33.
MINIMUM MONTHLY PREMIUM. A monthly premium amount that we determine when we
issue the Policy. Your Policy will specify this amount. See "Death Benefit
Guarantee" at page 27.
MONTHLY ANNIVERSARY. The same date in each succeeding month as the Policy Date.
If the Monthly Anniversary falls on a date other than a Valuation Date,
then the Monthly Anniversary will be the next Valuation Date. The first
Monthly Anniversary is on the Policy Date.
MONTHLY DEDUCTION. A monthly charge that we deduct from the Accumulation Value
of the Policy. See "Deductions and Charges -- Monthly Deduction" at page
14.
NET PREMIUM. The premium you pay less a Premium Expense Charge.
PLANNED PERIODIC PREMIUM. The scheduled premium you select of a level amount at
a fixed interval. The Policy will show the initial Planned Periodic Premium
you select. See "Payment and Allocation of Premiums -- Planned Periodic
Premiums" at page 26.
POLICY. SelectQLife NY, the flexible premium variable life insurance policy
described in this prospectus.
POLICY ANNIVERSARY. The same date in each succeeding year as the Policy Date. If
the Policy Anniversary falls on a date other than a Valuation Date, the
Policy Anniversary will be the next Valuation Date.
5
<PAGE> 9
POLICY DATE. The date shown on your Policy that ReliaStar uses to determine
Policy Years, Policy Months, Monthly Anniversaries and Policy
Anniversaries.
POLICY MONTH. A one-month period beginning on a Monthly Anniversary.
POLICY YEAR. A 12-month period beginning on a Policy Anniversary.
PREMIUM EXPENSE CHARGE. An amount (currently 5%) ReliaStar deducts from each
premium payment, resulting in the Net Premium. See "Deductions and
Charges -- Premium Expense Charge" at page 14.
RATE CLASS. A group of Insureds we determine based on our expectation that they
will have similar mortality experience.
SEC. Securities and Exchange Commission.
SIGNATURE GUARANTEE. A guarantee of your signature by a member firm of the New
York, American, Boston, Midwest, Philadelphia, or Pacific Stock Exchange,
or by a commercial bank which is a member of the Federal Deposit Insurance
Corporation, or, in certain cases, by a member firm of the National
Association of Securities Dealers, Inc. that has entered into an
appropriate agreement with us.
SUB-ACCOUNT. A sub-division of the Variable Account that invests exclusively in
the shares of a specified Fund.
SURRENDER CHARGE. A charge imposed upon total surrender or lapse of the Policy
during the first 15 Policy Years and the first 15 years following any
requested increase in Face Amount. See "Deductions and Charges -- Surrender
Charge" at page 15.
SURRENDER CHARGE WHOLE LIFE PREMIUM. An amount used in calculating the Premium
Related Surrender Charge Reduction. The Surrender Charge Whole Life Premium
will equal the amount obtained by dividing the Face Amount or the amount of
a requested increase, as the case may be, by $1,000, and multiplying the
result by the applicable factor from Appendix D. See "Deductions and
Charges -- Surrender Charge" at page 15.
UNIT VALUE. The unit measure by which we determine the value of the Policy's
interest in each Sub-Account. See Appendix B.
VALUATION DATE. Each day the New York Stock Exchange is open for business except
for days that a Sub-Account's corresponding Fund does not value its shares.
The New York Stock Exchange is currently closed on weekends and on the
following holidays: New Year's Day; Rev. Dr. Martin Luther King, Jr. Day;
Presidents' Day; Good Friday; Memorial Day; July Fourth; Labor Day;
Thanksgiving Day; and Christmas Day. See Appendix B.
VALUATION PERIOD. The period beginning at the close of business on a Valuation
Date and ending at the close of business on the next Valuation Date. See
Appendix B.
VARIABLE ACCOUNT. ReliaStar Life Insurance Company of New York Variable Life
Separate Account I, a separate investment account we established to receive
and invest Net Premiums paid under the Policy and other variable life
insurance policies that we issue. See "The Variable Account" at page 18.
VARIABLE ACCUMULATION VALUE. The value attributable to a specific Policy based
upon amounts in the Variable Account. See "Accumulation Value" at page 28
and Appendix B.
WE, US, OUR, THE COMPANY, OR RELIASTAR. ReliaStar Life Insurance Company of New
York.
YOU, YOUR. The Policy owner as designated in the application for the Policy or
as subsequently changed. If a Policy has been absolutely assigned, the
assignee is the Policy owner. A collateral assignee is not the Policy
owner.
6
<PAGE> 10
PART 1. SUMMARY
This is a brief summary of the Policy's features. Please read the entire
Prospectus and the Policy for more detailed information.
THE POLICY
SelectQLife NY is a flexible premium variable life insurance contract with
death benefits, cash, values, and other features of traditional life insurance
contracts. The Policies are:
- "flexible premium" because you do not have to pay premiums according to a
fixed schedule: and
- "variable" because Accumulation Values and, under certain circumstances,
the Death Benefit, will increase and decrease based on the investment
performance of the Funds corresponding to the Sub-Accounts to which you
allocate your premium payments.
Under current Federal tax law, as long as the Policy qualifies as life
insurance, Accumulation Value increases will be subject to the same Federal
income tax treatment as traditional life insurance cash values. Therefore, any
increases should accumulate on a tax deferred basis until you request a
distribution. See "Federal Tax Matters -- Tax Status of the Policy." The
following chart outlines the various features, charges and expenses of the
Policies. Additional detailed information pertaining to charges and expenses is
contained in this Summary and in "Deductions and Charges."
FLOW CHART
7
<PAGE> 11
FREE LOOK RIGHTS - If you return the Policy to us by midnight of
the 20th day after you receive it, we will send
you a refund of all premiums paid, unless
otherwise stipulated by state law. See "Free
Look and Conversion Rights -- Free Look Rights."
PREMIUM PAYMENTS - You choose when to pay and how much to pay.
- We may refuse to accept any premium less than
$25.
- You cannot pay additional premiums after age 95.
- We may refuse any premium that would disqualify
your Policy as life insurance under Section 7702
of the Code.
- You may pay enough premiums to maintain the
Death Benefit Guarantee in order to keep the
Policy in force during at least the first
several Policy Years. See "Death Benefit
Guarantee" and "Payment and Allocation of
Premiums -- Amount and Timing of Premiums."
- We deduct a Premium Expense Charge (5.00% of
each premium payment) and credit the remaining
premium (the Net Premium) to the Variable
Account or the Fixed Account according to your
instructions. See "Deductions and
Charges -- Premium Expense Charge."
THE VARIABLE ACCOUNT
(RELIASTAR
LIFE INSURANCE COMPANY OF
NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I) - ReliaStar Life Insurance Company of New York
Variable Life Separate Account I is one of our
separate accounts and consists of several
Sub-Accounts. We only invest premiums from our
variable life insurance policies in the Variable
Account.
- We invest any Net Premiums you allocate to each
Sub-Account in shares of the Fund related to
that Sub-Account.
- Variable Accumulation Value will vary with the
investment performance of the Funds and the
charges deducted from the Variable Accumulation
Value. See "Accumulation Value."
THE FIXED ACCOUNT - Consists of all of our assets other than those
in our separate accounts (including the Variable
Account).
- We credit interest of at least 4% per year on
any amounts you allocate to the Fixed Account.
- We may, in our sole discretion, credit interest
in excess of 4%. See Appendix A, "The Fixed
Account."
THE FUNDS - You can instruct ReliaStar to place your Net
Premium in, or transfer to, up to 17 of 34
investment portfolios over the lifetime of your
Policy.
8
<PAGE> 12
The following chart lists the currently available Funds and outlines
certain of their important characteristics.
INVESTMENT FUNDS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GROWTH
ADVISER/ MONEY FIXED &
FUND GROUP FUND SUBADVISER MARKET INCOME INCOME INTERNATIONAL
<C> <C> <C> <S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
AIM AIM V.I. Dent A I M
Variable Demographic Advisors, Inc./
Insurance Trends Fund H.S. Dent Advisors,
Funds, Inc. Inc.
Houston, TX
- ----------------------------------------------------------------------------------------------------------------------
Alger American Alger American Growth Fred Alger
New York, N.Y. Portfolio Management, Inc.
---------------------------------------------------------------------------------------------------
Alger American Fred Alger
Leveraged All Cap Management, Inc.
Portfolio
---------------------------------------------------------------------------------------------------
Alger American MidCap Fred Alger
Growth Portfolio Management, Inc.
---------------------------------------------------------------------------------------------------
Alger American Small Fred Alger
Capitalization Management, Inc.
Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Fidelity VIP Fidelity Management
Investments(R) Equity-Income & Research Company
Boston, Mass. Portfolio -- Initial X
Class
---------------------------------------------------------------------------------------------------
VIP Growth Fidelity Management
Portfolio -- & Research Company
Initial Class
---------------------------------------------------------------------------------------------------
X
VIP Fidelity Management
High Income & Research Company
Portfolio --
Initial Class
---------------------------------------------------------------------------------------------------
X
VIP Fidelity Management
Money Market & Research Company
Portfolio -- Initial
Class
---------------------------------------------------------------------------------------------------
VIP II Contrafund(R) Fidelity Management
Portfolio -- Initial & Research Company
Class
---------------------------------------------------------------------------------------------------
X
VIP II Fidelity Management
Index 500 Portfolio -- & Research Company
Initial Class
---------------------------------------------------------------------------------------------------
Fidelity VIP II Fidelity Management
Investments(R) Investment Grade Bond & Research Company
is a Portfolio -- Initial
registered Class
trademark of
FMR Corp. X
- ----------------------------------------------------------------------------------------------------------------------
Janus Aspen Series Janus Capital
Denver, Colo. Aggressive Corporation
Growth Portfolio
---------------------------------------------------------------------------------------------------
Aspen Series Growth Janus Capital
Portfolio Corporation
---------------------------------------------------------------------------------------------------
X
Aspen Series Janus Capital
International Growth
Portfolio
---------------------------------------------------------------------------------------------------
X
Aspen Series Worldwide Janus Capital
Growth Portfolio Corporation
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------- -----------------------------------------------------------------------------------
AGGRESSIVE PRIMARY
FUND GROUP BALANCED GROWTH GROWTH OBJECTIVE(S) INVESTMENTS
<C> <C> <C> <C> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------
AIM Long-term growth Securities of
Variable of capital companies that are
Insurance likely to benefit
Funds, Inc. from changing
Houston, TX X demographic,
economic and
lifestyle trends
- -------------- -----------------------------------------------------------------------------------
Alger American Long-term capital Equity securities
New York, N.Y. X appreciation of large companies
-----------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
X
Long-term capital Equity securities
appreciation of companies of any
size
-----------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
X
Long-term capital Equity securities
appreciation within the range of
S&P(R) MidCap 400
Index
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Equity securities
appreciation within the range of
Russell(R) 2000
Growth or S&P(R)
SmallCap 600
Indexes
- -------------- -----------------------------------------------------------------------------------
Fidelity Reasonable Income-producing
Investments(R) income; also equity securities
Boston, Mass. considers and debt
potential for obligations
capital
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Common stocks
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
High current Income-producing
income debt securities,
preferred stocks
and convertible
securities, with an
emphasis on lower-
quality debt
securities
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
High current U.S. dollar-
income consistent denominated money
with preservation market securities
of capital and
liquidity
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Securities of
appreciation companies whose
value the adviser
believes is not
fully recognized by
the public
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Total return that Common stocks of
corresponds to S&P 500
that of S&P 500
Index
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Fidelity High current Investment-grade
Investments(R) income consistent intermediate fixed
is a with preservation income securities
registered of capital
trademark of
FMR Corp.
- -------------- -----------------------------------------------------------------------------------
Janus Long-term growth Nondiversified
Denver, Colo. X of capital portfolio of common
stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Diversified common
growth stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital Foreign and
growth domestic common
stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital Foreign and
growth domestic common
stocks
- -------------- -----------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 13
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
GROWTH
ADVISER/ MONEY FIXED &
FUND GROUP FUND SUBADVISER MARKET INCOME INCOME INTERNATIONAL
<C> <C> <C> <S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Neuberger Advisers Management Neuberger Berman
Berman Trust Limited Maturity Management Inc./
New York, N.Y. Bond Portfolio Neuberger Berman, X
LLC
---------------------------------------------------------------------------------------------------
Advisers Management Neuberger Berman
Trust Partners Management Inc./
Portfolio Neuberger Berman
LLC
---------------------------------------------------------------------------------------------------
Advisers Management Neuberger Berman
Trust Socially Management Inc./
Responsive Portfolio Neuberger Berman,
LLC
- ----------------------------------------------------------------------------------------------------------------------
OCC OCC Accumulation Trust OpCap Advisors
New York, N.Y. Equity Portfolio
---------------------------------------------------------------------------------------------------
X
OCC Accumulation Trust OpCap Advisors
Global Equity
Portfolio
---------------------------------------------------------------------------------------------------
OCC Accumulation Trust OpCap Advisors
Managed Portfolio
---------------------------------------------------------------------------------------------------
OCC Accumulation Trust OpCap Advisors
Small Cap Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Pilgrim Pilgrim VP Growth Pilgrim
Phoenix, Ariz. Opportunities Investments, Inc.
Portfolio
---------------------------------------------------------------------------------------------------
Pilgrim VP Growth + Pilgrim
Value Portfolio Investments,
Inc./Navellier Fund
Management, Inc.
---------------------------------------------------------------------------------------------------
X
Pilgrim VP High Yield Pilgrim
Portfolio Investments, Inc.
---------------------------------------------------------------------------------------------------
X
Pilgrim VP Pilgrim
International Value Investments,
Portfolio Inc./Brandes
Investment
Partners, L.P.
---------------------------------------------------------------------------------------------------
Pilgrim VP MagnaCap Pilgrim
Portfolio Investments, Inc.
---------------------------------------------------------------------------------------------------
Pilgrim VP MidCap Pilgrim
Opportunities Investments, Inc.
Portfolio
---------------------------------------------------------------------------------------------------
Pilgrim VP Research Pilgrim
Enhanced Index Investments,
Portfolio Inc./J.P. Morgan
Investment
Management Inc.
---------------------------------------------------------------------------------------------------
Pilgrim VP SmallCap Pilgrim
Opportunities Investments, Inc.
Portfolio
- ----------------------------------------------------------------------------------------------------------------------
Putnam Putnam VT Growth and Putnam Investment
Investments, Income Fund -- Class Management, Inc.
Inc. IA Shares
Boston, Mass. X
---------------------------------------------------------------------------------------------------
Putnam VT New Putnam Investment
Opportunities Fund -- Management, Inc.
Class IA Shares
---------------------------------------------------------------------------------------------------
Putnam VT Voyager Putnam Investment
Fund -- Class IA Management, Inc.
Shares
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------- -----------------------------------------------------------------------------------
AGGRESSIVE PRIMARY
FUND GROUP BALANCED GROWTH GROWTH OBJECTIVE(S) INVESTMENTS
<C> <C> <C> <C> <C> <C> <C>
- -------------- -----------------------------------------------------------------------------------
Neuberger Highest current Short-to-
Berman income consistent intermediate term
New York, N.Y. with low risk to investment-grade
principal and debt securities
liquidity and
secondarily total
return
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital growth Common stocks of
medium-to-large
capitalization
companies
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Common stocks of
growth companies that meet
both financial and
social criteria
- -------------- -----------------------------------------------------------------------------------
OCC Long-term capital Securities of
New York, N.Y. X appreciation undervalued
companies
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital Global investments
appreciation in equity
securities
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Growth of capital Common stocks,
bonds and cash
equivalents
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Equity securities
appreciation of companies under
$1 billion
- -------------- -----------------------------------------------------------------------------------
Pilgrim Long-term capital Common stocks of
Phoenix, Ariz. X growth large cap, mid cap
or small cap
companies
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Equity securities
appreciation from
investing in a
diversified
portfolio of
equity securities
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
High current High-yield bonds
yield and capital
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Long-term capital International
appreciation equities
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital growth Common stocks
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Common stocks of
appreciation mid-sized U.S.
companies
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Common stocks
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Common stocks
appreciation
- -------------- -----------------------------------------------------------------------------------
Putnam Capital growth Value stocks
Investments, and current
Inc. income
Boston, Mass.
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Long-term capital Growth stocks
appreciation
-----------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
X
Capital Growth stocks
appreciation
- -------------- -----------------------------------------------------------------------------------
</TABLE>
For each Fund's expenses, see "Investment Advisory Fees and Other Fund
Expenses."
10
<PAGE> 14
CHARGES AGAINST THE ACCUMULATION VALUE
The Accumulation Value of the Policy is subject to the Monthly Deduction
charges. Except for the Monthly Mortality and Expense Risk Charge, we will
deduct the Monthly Deduction each month from both the Fixed Accumulation Value
and the Variable Accumulation Value on a proportionate basis depending on their
relative Accumulation Values at that time. We will deduct the Monthly Mortality
and Expense Risk Charge on a proportionate basis from each Sub-Account of the
Variable Account depending on their relationship to the Variable Accumulation
Value at that time. See "Deductions and Charges -- Monthly Deduction."
The Monthly Deduction includes:
- A charge for the cost of insurance -- varies based on the Insured's sex,
Age, Rate Class and Face Amount.
- Monthly Administrative Charge -- currently $7.50 per month and guaranteed
not to exceed the product of $5.00 and the ratio (not to exceed 2.00) of
(a) the Consumer Price Index (for all urban households) for the preceding
September to (b) the Consumer Price Index for September 1985.
- Monthly Mortality and Expense Risk Charge -- currently equal to .60 of 1%
(.60%) of the Variable Accumulation Value and guaranteed not to exceed
.90 of 1% (.90%) of the Variable Accumulation Value.
- Any charges for optional insurance benefits -- vary depending upon the
benefit(s) selected.
CHARGE UPON LAPSE OR TOTAL SURRENDER OF THE POLICY
- We assess a Surrender Charge if your Policy lapses or if you surrender
the Policy during the first 15 Policy Years (or during the first 15 years
following a Face Amount increase).
- We will determine the maximum Surrender Charge for the initial Face
Amount and any requested increases in Face Amount on the Policy Date and
on the effective date of any such requested increase.
- The Surrender Charge for the initial Face Amount will depend on the
initial Face Amount, the Insured's Age on the Policy Date, and the
Insured's sex and Rate Class.
- You do not pay this charge if the Policy remains in force during the
entire relevant 15-year period. See "Deductions and Charges -- Surrender
Charge."
SURRENDERS - In general, you will receive the Cash Surrender Value if
you surrender the Policy.
- To determine the Cash Surrender Value, we reduce your
Accumulation Value by the Surrender Charge, if any, and
any Loan Amount and unpaid Monthly Deductions. See
"Surrender Benefits -- Total Surrender."
PARTIAL WITHDRAWALS - Once each Policy Year after the first Policy Year, you
can withdraw part of your Cash Surrender Value.
- You will not incur a Surrender Charge, but partial
withdrawals are subject to a processing charge (currently
$10, guaranteed not to exceed $25). See "Surrender
Benefits -- Partial Withdrawal."
LOANS - After the first Policy Year, you can borrow up to 100% of
your Policy's Cash Value less any existing Loan Amount.
- Interest is payable in advance for each Policy Year and
accrues daily at an effective annual rate that will not
exceed 5.66%.
- After the 10th Policy Year, we currently charge interest
at an annual rate of 3.85% on the portion of your Loan
Amount that is not in excess of (1) the Accumulation
Value, less (2) the total of all premiums paid net of all
partial withdrawals. We will charge interest at an annual
rate of 5.66% on any excess of this amount.
11
<PAGE> 15
TRANSFERS - Currently, you can transfer all or part of your
Accumulation Value among the investment options.
- We currently do not limit the number of transfers per
Policy Year. We reserve the right to limit you to 12
transfers per year.
- There are certain restrictions on transfers from the
Fixed Account.
- We currently assess a charge of $25 for each transfer in
excess of 24 transfers per Policy Year. See "Transfers."
DEATH BENEFIT OVERVIEW
You may choose one of two Death Benefit Options:
- Level Amount Option -- whereby the Death Benefit until Age 95 is the
greater of the Face Amount or the corridor percentage of Accumulation
Value; or
- Variable Amount Option -- whereby the Death Benefit until Age 95 is equal
to the greater of the Face Amount plus the Accumulation Value, or the
corridor percentage of Accumulation Value.
The Death Benefit until Age 95 under the Level Amount Option and the
Variable Amount Option will never be less than the Face Amount as long as the
Policy is in force and there is no Loan Amount or unpaid Monthly Deductions.
We will reduce the proceeds payable upon the death of the Insured under any
Death Benefit Option by any Loan Amount and any unpaid Monthly Deductions.
Under certain circumstances, you may receive a part of the Death Benefit
when the Insured has been diagnosed as having a terminal illness. See "Death
Benefit -- Accelerated Benefit Rider."
ADJUSTING THE DEATH BENEFIT
Although we reserve the right to limit Face Amount increases and decreases
during the first two Policy Years, you have flexibility to adjust the Death
Benefit by increasing or decreasing the Face Amount. You cannot decrease the
Face Amount below the Minimum Face Amount shown in the Policy. Any increase in
the Face Amount may require additional evidence of insurability satisfactory to
us and will result in additional charges. See "Death Benefit -- Requested
Changes in Face Amount."
Generally, you may also change the Death Benefit Option at any time after
the second Policy Year. See "Death Benefit -- Changing the Death Benefit
Option."
See "Death Benefit -- Insurance Protection" for a discussion of available
techniques to adjust the amount of insurance protection to satisfy changing
insurance needs.
DEATH BENEFIT GUARANTEE
If you meet the requirements for the Death Benefit Guarantee, we will not
lapse your Policy during the Death Benefit Guarantee Period even if the Cash
Surrender Value is not sufficient to cover the Monthly Deduction that is due.
See "Death Benefit Guarantee."
LAPSE
If the Death Benefit Guarantee is not in effect, the Policy will lapse if
the Cash Surrender Value is less than the Monthly Deduction due and if you do
not make a sufficient payment during the grace period of 61 days. See "Policy
Lapse and Reinstatement."
TAXATION OF DEATH BENEFIT PROCEEDS
Under current Federal tax law, as long as the Policy qualifies as life
insurance, the Death Benefit under the Policy will be subject to the same
Federal income tax treatment as proceeds of traditional life insurance.
12
<PAGE> 16
Therefore, the Death Benefit should not be taxable income to the beneficiary.
See "Federal Tax Matters -- Tax Status of the Policy."
TAXATION OF THE POLICY
The Company intends for the Policy to satisfy the definition of a life
insurance contract under Section 7702 of the Code. Under certain circumstances,
a Policy could be treated as a "modified endowment contract." The Company will
monitor Policies and will attempt to notify an owner on a timely basis if his or
her Policy is in jeopardy of becoming a modified endowment contract. See
"Federal Tax Matters" for further discussion of the tax status of a Policy and
the tax consequences of being treated as a life insurance contract or a modified
endowment contract.
A Policy lapse, surrender, partial withdrawal or loan may have adverse tax
consequences in certain circumstances. See "Federal Tax Matters."
PART 2. DETAILED INFORMATION
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
ReliaStar Life Insurance Company of New York is a stock life insurance
company incorporated under the laws of the State of New York in 1917. We are a
wholly-owned subsidiary of ReliaStar Financial Corp. We offer individual life
insurance and annuities. Our home office is located at 1000 Woodbury Road, Suite
102, P.O. Box 9004, Woodbury, New York 11797.
From time to time, we may publish in advertisements, sales literature, and
reports the ratings and other information assigned to us by one or more
independent rating organizations such as A.M. Best Company, Standard & Poor's,
Moody's, and Duff & Phelps. The purpose of the ratings is to reflect our
financial strength and/or claims-paying ability. They should not be considered
as bearing on the investments held in the Variable Account. Each year the A.M.
Best Company reviews the financial status of many insurers, culminating in the
assignment of Best's Ratings. These ratings reflect their current opinion of the
relative financial strength and operating performance of an insurance company in
comparison to the norms of the life/health insurance industry. We have been
assigned a rating of A+ by A.M. Best, which is a rating assigned to companies
demonstrating superior overall performance and a very strong ability to meet
obligations to Policy holders over a long period. Such ratings do not reflect
the investment in the Variable Account.
ReliaStar is a charter member of the Insurance Marketplace Standards
Association ("IMSA"). Companies that belong to IMSA subscribe to a rigorous set
of standards that cover the various aspects of sales and service for
individually sold life insurance and annuities. IMSA members have adopted
policies and procedures that demonstrate a commitment to honesty, fairness and
integrity in all customer contacts involving sales and service of individual
life insurance and annuity products.
THE POLICIES
The Policies are flexible premium variable life insurance contracts with
death benefits, cash values, and other features of traditional life insurance
contracts.
DEDUCTIONS AND CHARGES
We deduct certain charges in connection with the Policy to compensate us
for (1) providing the insurance benefits of the Policy (including any riders),
(2) administering the Policy, (3) assuming certain risks in connection with the
Policy, and (4) incurring expenses in distributing the Policy.
We deduct some of these charges from each premium payment. We deduct
certain other charges monthly from both the Fixed Account and the Variable
Account, or from the Variable Account only. We also assess a charge for each
partial withdrawal and a charge for each transfer in excess of 24 transfers per
Policy Year.
13
<PAGE> 17
We may realize a profit on one or more of these charges, such as the
Mortality and Expense Risk Charge. We may use any such profits for any proper
corporate purpose, including, among other things, payments of sales expenses.
The Surrender Charge usually exceeds the Accumulation Value in the early
Policy Years. This occurs because the Surrender Charge is usually more than the
accumulated Minimum Monthly Premiums less Policy charges in the early Policy
Years.
PREMIUM EXPENSE CHARGE
We deduct the Premium Expense Charge from each premium payment. The Premium
Expense Charge equals 5.00% of each premium payment. The amount remaining after
we deduct the Premium Expense Charge is called the Net Premium.
MONTHLY DEDUCTION
We deduct the charges described below from the Accumulation Value of the
Policy on a monthly basis. The total of these charges is called the Monthly
Deduction.
We will deduct the Monthly Deduction on each Monthly Anniversary from the
Fixed Account and the Sub-Accounts of the Variable Account on a proportionate
basis depending on their relative Accumulation Values at that time. For purposes
of determining these proportions, we reduce the Fixed Accumulation Value by the
Loan Amount. Because the Cost of Insurance portion of the Monthly Deduction can
vary from month to month, the Monthly Deduction itself will vary in amount from
month to month.
If the Cash Surrender Value is not sufficient to cover the Monthly
Deduction on a Monthly Anniversary, the Policy may lapse. See "Death Benefit
Guarantee" and "Policy Lapse and Reinstatement."
COST OF INSURANCE. We will determine the monthly Cost of Insurance by
multiplying the applicable Cost of Insurance rate or rates by the net amount at
risk under the Policy. The net amount at risk under the Policy for a Policy
Month is (1) the Death Benefit at the beginning of the Policy Month divided by
1.004074 (which reduces the net amount at risk, solely for purposes of computing
the Cost of Insurance, by taking into account assumed monthly earnings at an
annual rate of 5%), less (2) the Accumulation Value at the beginning of the
Policy Month (reduced by any charges for rider benefits). As a result, the net
amount at risk may be affected by changes in the Accumulation Value or in the
Death Benefit.
The Rate Class of an Insured may affect the Cost of Insurance. We currently
place Insureds into standard Rate Classes or into substandard Rate Classes that
involve a higher mortality risk. In an otherwise identical Policy, an Insured in
a standard Rate Class will have a lower Cost of Insurance than an Insured in a
Rate Class with higher mortality risks.
If there is an increase in the Face Amount and the Rate Class applicable to
the increase is different from that for the initial Face Amount or any prior
requested increases in Face Amount, the net amount at risk will be calculated
separately for each Rate Class. For purposes of determining the net amount at
risk for each Rate Class, we will first assume the Accumulation Value to be part
of the initial Face Amount. If the Accumulation Value is greater than the
initial Face Amount, it will then be assumed to be part of each increase in
order, starting with the first increase.
We base Cost of Insurance rates on the sex, Age, Policy Year and Rate
Class(es) of the Insured. The actual monthly Cost of Insurance rates will
reflect our expectations as to future experience. They will not, however, be
greater than the guaranteed Cost of Insurance rates shown in the Policy, which
are based on the Commissioner's 1980 Standard Ordinary Mortality Tables for
smokers or nonsmokers, respectively.
MONTHLY ADMINISTRATIVE CHARGE. Each month we deduct an administrative
charge of $7.50 which is guaranteed not to exceed the product of $5.00 and the
ratio (not to exceed 2.00) of (a) the Consumer Price Index (for all urban
households) for the preceding September to (b) the Consumer Price Index for
September 1985.
14
<PAGE> 18
MONTHLY MORTALITY AND EXPENSE RISK CHARGE. We currently anticipate that
each month we will deduct this charge at an annual rate of .60 of 1% (.60%) of
the Variable Accumulation Value but in no event will it exceed .90 of 1% (.90%).
The mortality and expense risk we assume is that our Cost of Insurance charges
and other expense charges are not sufficient to cover our costs of death
benefits, and any other expenses incurred in issuing and administering the
Policies.
OPTIONAL INSURANCE BENEFIT CHARGES. Each month we deduct charges for any
optional insurance benefits added to the Policy by rider. See "General
Provisions -- Optional Insurance Benefits."
SURRENDER CHARGE
During the first 15 years the Policy is in force and the first 15 years
following a requested increase in the Face Amount, there is a Surrender Charge
if you surrender the Policy or the Policy lapses. We will determine the maximum
Surrender Charge for the initial Face Amount or any requested increase in Face
Amount on the Policy Date or on the effective date of any requested increase.
The Surrender Charge remains level for the first five years in the relevant 15
year period, and then reduces in equal monthly increments until it becomes zero
at the end of 15 years. Thus, if the Policy remains in force during the entire
relevant 15-year period, you do not pay the Surrender Charge. The Surrender
Charge will vary depending on the Insured's Age, sex, and Rate Class on the
Policy Date or on the effective date of an increase in Face Amount. The maximum
amount of the Surrender Charge is $37.30 per $1,000 of Face Amount for a female
Insured at Issue Age 65.
The Surrender Charge for the initial Face Amount or any requested increase
in Face Amount is determined by multiplying (1) the applicable Surrender Charge
per $1,000 of Face Amount from Appendix C by (2) the initial Face Amount or the
Face Amount of the increase, as applicable, and by (3) the applicable percentage
from the Surrender Charge Percentage Table below, and then dividing this amount
by 1000. Then the Surrender Charge is reduced by the Premium Related Surrender
Charge Reduction.
The Premium Related Surrender Charge Reduction will apply only to the
Surrender Charge for the initial Face Amount when the cumulative premiums are
less than the Surrender Charge Whole Life Premium. The Premium Related Surrender
Charge Reduction will be zero when the cumulative premiums equal or exceed the
Surrender Charge Whole Life Premium. The Premium Related Surrender Charge
Reduction also will be zero for any requested increase in Face Amount. The
Premium Related Surrender Charge Reduction for the initial Face Amount is
calculated by multiplying 70% by the excess of (i) the Surrender Charge Whole
Life Premium over (ii) the cumulative premiums. The Surrender Charge Whole Life
premium is calculated by multiplying (i) the applicable Surrender Charge Whole
Life premium per $1000 of Face Amount from Appendix D by (ii) the initial Face
Amount, and then dividing by 1000.
Example. The following example illustrates how we determine the Surrender
Charge. Assume that a male nonsmoker, Age 35 buys a Policy with an initial Face
Amount of $100,000 and surrenders the Policy during the third Policy Year at
which time he has paid cumulative premiums of $2,000.
Based on these assumptions the Surrender Charge will be the result of
multiplying (1) $16.20 (from Appendix C for a male nonsmoker Age 35) by (2)
$100,000 (the initial Face Amount) and by (3) 100% (the applicable percentage
from the Surrender Charge Percentage Table), and then dividing by 1000, which
results in a Surrender Charge of $1,620 ($16.20 x $100,000 x 100% / 1000).
The Surrender Charge Whole Life Premium is determined by multiplying (i)
$11.64 (from Appendix D for a male nonsmoker Age 35) by (ii) $100,000 (the
initial Face Amount), and then dividing by 1000, which results in a Surrender
Charge Whole Life Premium of $1,164 ($11.64 x $100,000 / 1000). The Surrender
Charge Whole Life Premium of $1,164 is less than the cumulative premium of
$2,000, so the Premium Related Surrender Charge Reduction is zero.
15
<PAGE> 19
The additional Surrender Charge for requested increases in Face Amount will
be calculated in the same manner as illustrated in the example above, except
that the Premium Related Surrender Charge is zero for requested increases in
Face Amount.
SURRENDER CHARGE PERCENTAGE TABLE
<TABLE>
<CAPTION>
IF SURRENDER OR LAPSE OCCURS THE FOLLOWING PERCENTAGE OF THE
IN THE LAST MONTH OF POLICY YEAR SURRENDER CHARGE WILL BE PAYABLE:
- -------------------------------- ---------------------------------
<S> <C>
1 through 5 100%
6 90%
7 80%
8 70%
9 60%
10 50%
11 40%
12 30%
13 20%
14 10%
15 and later 0%
</TABLE>
For requested increases, years are measured from the date of the increase.
The percentages reduce equally for each Policy Month during the years shown. For
example, during the seventh Policy Year, the percentage reduces equally each
month from 90% at the end of the sixth Policy Year to 80% at the end of the
seventh Policy Year.
PARTIAL WITHDRAWAL AND TRANSFER CHARGES
We currently make no charge for the first 24 transfers in Policy Year and
assess a $10 charge for each partial withdrawal. These charges are guaranteed
not to exceed $25 per transfer in excess of twelve transfers per Policy Year, or
$25 per partial withdrawal, for the duration of the Policy. The transfer charge
will not be imposed on transfers that occur as a result of Policy loans, the
exercise of conversion rights, the Dollar Cost Averaging or Portfolio
Rebalancing Service, or automatic withdrawals.
MODIFICATION OF CHARGES
ReliaStar may modify any of the charges under the Policy, as well as the
minimum Face Amount set forth in this Prospectus, because of special
circumstances that result in lower sales, administrative, or mortality expenses.
For example, special circumstances may exist in connection with sales to our
policyholders or those of affiliated insurance companies, or sales to employees
or clients of members of our affiliated group of insurance companies. The amount
of any reductions will reflect the reduced sales effort and administrative costs
resulting from, or the different mortality experience expected as a result of,
the special circumstances. Reductions will not be unfairly discriminatory
against any person, including the affected Policy owners and owners of all other
policies funded by the Variable Account.
16
<PAGE> 20
INVESTMENT ADVISORY FEES AND OTHER FUND EXPENSES
Because the Variable Account purchases shares of the Funds, the net asset
value of the Variable Account's investments will reflect the investment advisory
fees and other expenses incurred by the Funds. Set forth below is information
provided by each Fund on its total 1999 annual expenses as a percentage of the
Fund's average net assets. See the prospectuses for the Funds for more
information concerning these expenses.
FUND EXPENSES
(BEFORE WAIVERS)
<TABLE>
<CAPTION>
TOTAL INVESTMENT
MANAGEMENT OTHER FUND ANNUAL
FUND FEE EXPENSES EXPENSES
---- ---------- -------- ----------------
<S> <C> <C> <C>
AIM V.I. Dent Demographic Trends Funds (a)................ 0.85% 0.55% 1.40%
Alger American Growth Portfolio (a)....................... 0.75% 0.04% 0.79%
Alger American Leveraged All Cap Portfolio (a)............ 0.85% 0.08% 0.93%
Alger American MidCap Growth Portfolio (a)................ 0.80% 0.05% 0.85%
Alger American Small Capitalization Portfolio (a)......... 0.85% 0.05% 0.90%
Fidelity VIP Equity-Income Portfolio -- Initial Class (a)
(b)..................................................... 0.48% 0.09% 0.57%
Fidelity VIP Growth Portfolio -- Initial Class (a) (b).... 0.58% 0.08% 0.66%
Fidelity VIP High Income Portfolio -- Initial Class (a)... 0.58% 0.11% 0.69%
Fidelity VIP Money Market Portfolio -- Initial Class...... 0.18% 0.09% 0.27%
Fidelity VIP II Contrafund(R) Portfolio -- Initial Class
(a) (b)................................................. 0.58% 0.09% 0.67%
Fidelity VIP II Index 500 Portfolio -- Initial Class (a)
(b)..................................................... 0.24% 0.10% 0.34%
Fidelity VIP II Investment Grade Bond Portfolio -- Initial
Class (a)............................................... 0.43% 0.11% 0.54%
Janus Aspen Aggressive Growth Portfolio (a) (c)........... 0.65% 0.02% 0.67%
Janus Aspen Growth Portfolio (a) (c)...................... 0.65% 0.02% 0.67%
Janus Aspen International Growth Portfolio (a) (c)........ 0.65% 0.11% 0.76%
Janus Aspen Worldwide Growth Portfolio (a) (c)............ 0.65% 0.05% 0.70%
Neuberger Berman Advisers Management Trust Limited
Maturity Bond Portfolio (a)............................. 0.65% 0.11% 0.76%
Neuberger Berman Advisers Management Trust Partners
Portfolio (a)........................................... 0.80% 0.07% 0.87%
Neuberger Berman Advisers Management Trust Socially
Responsive Portfolio (a) (d)............................ 0.85% 8.19% 9.04%
OCC Accumulation Trust Equity Portfolio (a) (e)........... 0.80% 0.11% 0.91%
OCC Accumulation Trust Global Equity Portfolio (a) (e).... 0.80% 0.30% 1.10%
OCC Accumulation Trust Managed Portfolio (a) (e).......... 0.77% 0.06% 0.83%
OCC Accumulation Trust Small Cap Portfolio (a) (e)........ 0.80% 0.09% 0.89%
Pilgrim VP Trust Growth Opportunities Portfolio (f) (g)... 0.75% 0.34% 1.09%
Pilgrim VP Trust Growth + Value Portfolio (f)............. 0.75% 0.22% 0.97%
Pilgrim VP Trust High Yield Bond Portfolio (f)............ 0.75% 0.36% 1.11%
Pilgrim VP Trust International Value Portfolio (f)........ 1.00% 0.52% 1.52%
Pilgrim VP Trust MagnaCap Portfolio (f) (g)............... 0.75% 0.34% 1.09%
Pilgrim VP Trust MidCap Portfolio (f) (g)................. 0.75% 0.34% 1.09%
Pilgrim VP Trust Research Enhanced Index Portfolio (f).... 0.75% 0.51% 1.26%
Pilgrim VP Trust SmallCap Opportunities Portfolio (f)..... 0.75% 0.34% 1.09%
Putnam VT Growth and Income Fund -- Class IA Shares....... 0.46% 0.04% 0.50%
Putnam VT New Opportunities Fund -- Class IA Shares....... 0.54% 0.05% 0.59%
Putnam VT Voyager Fund -- Class IA Shares................. 0.53% 0.04% 0.57%
</TABLE>
- ---------------
(a) The Company or its affiliates may receive compensation from an affiliate or
affiliates of certain of the Funds based upon an annual percentage of the
average net assets held in that Fund by the Company and by certain of the
Company's insurance company affiliates. These amounts are intended to
compensate the
17
<PAGE> 21
Company or the Company's affiliates for administrative, record keeping, and
in some cases distribution, and other services provided by the Company and
its affiliates to Funds and/or the Funds' affiliates. Payments of such
amounts by an affiliate or affiliates of the Funds do not increase the fees
paid by the Funds or their shareholders. The percentage paid may vary from
one Fund company to another.
(b) A portion of the brokerage commissions that certain Portfolios pay was used
to reduce Portfolio expenses. In addition, certain Portfolios have entered
into arrangements with their custodian whereby credits realized as a result
of uninvested cash balances are used to reduce custodian expenses. Including
these reductions, the total operating expenses presented in the table would
have been 0.56% for Fidelity VIP Equity-Income Portfolio, 0.65% for Fidelity
VIP Growth Portfolio; 0.28% for Fidelity VIP II Index 500 Portfolio; and
0.65% for Fidelity VIP II Contrafund(R) Portfolio.
(c) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in the management fee for Growth,
Aggressive Growth, International Growth and Worldwide Growth Portfolios. All
expenses are stated without the effect of any expense offset arrangements.
(d) Neuberger Berman Management Inc. ("NBMI") has undertaken to reimburse the
Socially Responsive Portfolio for certain operating expenses, including the
compensation of Neuberger Berman Advisers Management Trust and excluding
taxes, interest, extraordinary expenses, brokerage commissions and
transaction costs, that exceed in the aggregate, 1.50% of the average daily
net asset value of the Socially Responsive Portfolio. Expenses were 1.53%
for the fiscal period ending December 31, 1999, after reimbursement. There
can be no assurance that this policy will be continued after May 1, 2001.
See "Expense Limitation" in the Socially Responsive Portfolio prospectus for
further information.
(e) Management Fees reflect effective management fees after taking into effect
any waiver. Other Expenses are shown before expense offsets afforded the
Portfolios. Total Portfolio Expenses for the Equity, Small Cap and Managed
Portfolios are limited by OpCap Advisors so that their respective annualized
operating expenses (net of expense offsets) do not exceed 1.00% of average
daily net assets. Total Portfolio Expenses for the Global Equity Portfolio
are limited to 1.25% of average daily net assets (net of expense offsets).
(f) The investment adviser to the Pilgrim Variable Products Trust has agreed to
reimburse the Growth + Value Portfolio and High Yield Bond Portfolio for any
expenses in excess of 0.80% of each Portfolio's average daily net assets. It
has also agreed to reimburse the SmallCap Opportunities Portfolio, Research
Enhanced Index Portfolio, Growth Opportunities Portfolio, MagnaCap
Portfolio, and MidCap Opportunities Portfolio for amounts in excess of
0.90%. It has agreed to reimburse International Value Portfolio for amounts
in excess of 1.00%. After the investment adviser's expense reimbursements,
the Total Fund Annual Expenses that were paid by each Portfolio during its
fiscal year ended December 31, 1999 were: Growth + Value Portfolio: 0.80%;
High Yield Bond Portfolio: 0.80%; International Value Portfolio: 1.00%;
Research Enhanced Index Portfolio: 0.89%; SmallCap Opportunities Portfolio:
0.90%. Expense reimbursements are voluntary. There is no assurance of
ongoing reimbursement.
(g) This portfolio had not commenced operations as of December 31, 1999 and,
therefore, these expenses are estimated.
THE VARIABLE ACCOUNT
On March 23, 1982, we established the ReliaStar Life Insurance Company of
New York Variable Life Separate Account I as one of our separate accounts
pursuant to the laws of the State of New York. The Variable Account:
- will receive and invest the Net Premiums paid and allocated to it under
this Policy;
- currently receives and invests net premiums for other classes of flexible
premium variable life insurance policies we issue and may do so for
additional classes in the future;
- meets the definition of a "separate account" under the Federal securities
laws; and
18
<PAGE> 22
- is registered with the SEC as a unit investment trust under the
Investment Company Act of 1940 ("1940 Act"). Such registration does not
involve supervision by the SEC of the management or investment policies
or practices of the Variable Account, us, or the Funds.
We own the Variable Account's assets. However, New York law provides that
we cannot charge the Variable Account with liabilities arising out of any other
business we may conduct. We are required to maintain assets which are at least
equal to the reserves and other liabilities of the Variable Account. We may
transfer assets which exceed these reserves and liabilities to our general
account (the Fixed Account).
INVESTMENTS OF THE VARIABLE ACCOUNT
There are currently 34 investment options (Funds) available under the
Variable Account. However, we only permit you to participate in a maximum of 17
investment options over the lifetime of your Policy. The Summary and "Additional
Information on the Investments of the Variable Account" section describe the
Funds currently offered. You also should read the Funds' prospectuses for more
detailed information, particularly because several of the Funds and portfolios
may have objectives that are quite similar. Please call the telephone number
listed on the first page of this Prospectus to request a Fund's prospectus.
THERE IS NO ASSURANCE THAT ANY FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE(S).
PERFORMANCE INFORMATION
Performance information for the Sub-Accounts of the Variable Account and
the Funds available for investment by the Variable Account may appear in
advertisements, sales literature, or reports to Policy owners or prospective
purchasers. Such performance information for the Sub-Accounts will reflect
deductions of Fund expenses and be adjusted to reflect the Mortality and Expense
Risk Charge, but will not reflect deductions for the cost of insurance or the
Surrender Charge. We will accompany quotations of performance information for
the Funds by performance information for the Sub-Accounts. Performance
information for the Funds will take into account all fees and charges at the
Fund level, but will not reflect any deductions from the Variable Account.
Performance information reflects only the performance of a hypothetical
investment during a particular time period in which the calculations are based.
We may provide performance information showing total returns and average annual
total returns for periods prior to the date a Sub-Account commenced operation.
We will calculate such performance information based on the assumption that the
Sub-Accounts were in existence for the same periods as those indicated for the
Funds, with the level of charges at the Variable Account level that were in
effect at the inception of the Sub-Accounts.
We may also provide individualized hypothetical illustrations of
Accumulation Value, Cash Surrender Value and Death Benefit based on historical
investment returns of the Funds. These illustrations will reflect deductions for
Fund expenses and Policy and Variable Account charges, including the Monthly
Deduction, Premium Expense Charge and the Surrender Charge. We will base these
hypothetical illustrations on the actual historical experience of the Funds as
if the Sub-Accounts had been in existence and a Policy issued for the same
periods as those indicated for the Funds.
We may compare performance of the Sub-Accounts and/or the Funds in
advertisements and sales literature:
- to other variable life insurance issuers in general
- to the performance of particular types of variable life insurance
policies investing in mutual funds
- to investment series of mutual funds with investment objectives similar
to each of the Sub-Accounts, whose performance is reported by Lipper
Analytical Services, Inc. and Morningstar, Inc. (independent services
that monitor and rank the performances of variable life insurance issuers
in each of the major categories of investment objectives on an
industry-wide basis), or reported by other series, companies, individuals
or other industry or financial publications of general interest, such as
Forbes, Money, The Wall Street Journal, Business Week, Barron's,
Kiplinger's, and Fortune.
19
<PAGE> 23
- to the Standard & Poor's Index of 500 common stocks and the Dow Jones
Industrial, which are widely used measures of stock market performance
We may also compare the performance of each Sub-Account to other widely
recognized indices. Unmanaged indices may assume the reinvestment of dividends,
but typically do not reflect any "deduction" for the expense of operating or
managing an investment portfolio.
DEATH BENEFIT
If the Insured dies while the Policy is in force, we will pay the Death
Benefit reduced by any Loan Amount and unpaid Monthly Deductions. This amount is
called the proceeds. We may pay all or part of the proceeds in cash to your
beneficiaries or under one or more of the settlement options we offer. See
"General Provisions -- Settlement Options."
DEATH BENEFIT OPTIONS
The policy provides two Death Benefit Options as shown below. You choose
the Death Benefit Option on the application for the Policy. Subject to certain
limitations, you can change the Death Benefit Option after issuance of the
Policy. See "Death Benefit -- Change in Death Benefit Option."
LEVEL AMOUNT OPTION. (OPTION A.) The Death Benefit is the greater of the
current Face Amount of the Policy or the Corridor Percentage of Accumulation
Value on the Valuation Date on or next following the date of the Insured's
death. Under the Level Amount Option, the Death Benefit will remain level unless
the corridor percentage of Accumulation Value exceeds the current Face Amount,
in which case the amount of the Death Benefit will vary as the Accumulation
Value varies.
ILLUSTRATION OF LEVEL AMOUNT OPTION. For purposes of this illustration,
assume that the Insured is under Age 40, and that there is no Loan Amount. Under
the Level Amount Option, a Policy with a $100,000 Face Amount will generally
have a $100,000 Death Benefit. However, because the Death Benefit must be equal
to or be greater than 250% of the Accumulation Value, any time the Accumulation
Value of the Policy exceeds $40,000, the Death Benefit will exceed the $100,000
Face Amount. Each additional dollar added to the Accumulation Value above
$40,000 will increase the Death Benefit by $250. Thus, if the Accumulation Value
exceeds $40,000 and increases by $100 because of investment performance or
premium payments, the Death Benefit will increase by $250. A Policy owner with
an Accumulation Value of $50,000 will be entitled to a Death Benefit of $125,000
($50,000 X 250%); an Accumulation Value of $75,000 will yield a Death Benefit of
$187,500 ($75,000 X 250%); and an Accumulation Value of $100,000 will yield a
Death Benefit of $250,000 ($100,000 X 250%).
Similarly, as long as the Accumulation Value exceeds $40,000, each dollar
taken out of the Accumulation Value will reduce the Death Benefit by $250. If,
for example, the Accumulation Value is reduced from $75,000 to $70,000 because
of partial withdrawals, charges, or negative investment performance, the Death
Benefit will be reduced from $187,500 to $175,000. If at any time, however, the
Accumulation Value multiplied by the corridor percentage is less than the Face
Amount, the Death Benefit will equal the current Face Amount of the Policy.
The corridor percentage becomes lower as the Insured's Age increases. If
the current Age of the Insured in the illustration above were, for example, 50
(rather than under Age 40), the corridor percentage would be 185%. The Death
Benefit would not exceed the $100,000 Face Amount unless the Accumulation Value
exceeded approximately $54,055 (rather than $40,000), and each $1 then added to
or taken from the Accumulation Value would change the Death Benefit by $1.85
(rather than $2.50).
20
<PAGE> 24
CORRIDOR PERCENTAGE TABLE
<TABLE>
<CAPTION>
INSURED'S CORRIDOR INSURED'S CORRIDOR INSURED'S CORRIDOR
AGE ON PERCENTAGE OF AGE ON PERCENTAGE OF AGE ON PERCENTAGE OF
PREVIOUS POLICY ACCUMULATION PREVIOUS POLICY ACCUMULATION PREVIOUS POLICY ACCUMULATION
ANNIVERSARY VALUE ANNIVERSARY VALUE ANNIVERSARY VALUE
- --------------- ------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
40 or younger 250% 54 157% 68 117%
41 243 55 150 69 116
42 236 56 146 70 115
43 229 57 142 71 113
44 222 58 138 72 111
45 215 59 134 73 109
46 209 60 130 74 107
47 203 61 128 75-90 105
48 197 62 126 91 104
49 191 63 124 92 103
50 185 64 122 93 102
51 178 65 120 94 101
52 171 66 119 95 100
53 164 67 118
</TABLE>
VARIABLE AMOUNT OPTION. (Option B.) The Death Benefit is equal to the
greater of the current Face Amount plus the Accumulation Value of the Policy, or
the corridor percentage of the Accumulation Value on the Valuation Date on or
next following the date of the Insured's death. Under the Variable Amount
Option, the amount of the Death Benefit will always vary as the Accumulation
Value varies.
ILLUSTRATION OF VARIABLE AMOUNT OPTION. For purposes of this illustration,
assume that the Insured is under Age 40 and that there is no Loan Amount. Under
the Variable Amount Option, a Policy with a Face Amount of $100,000 will
generally pay a Death Benefit of $100,000 plus the Accumulation Value. Thus, for
example, a Policy with an Accumulation Value of $20,000 will have a Death
Benefit of $120,000 ($100,000 + $20,000); an Accumulation Value of $40,000 will
yield a Death Benefit of $140,000 ($100,000 + $40,000). The Death Benefit,
however, must be at least 250% of the Accumulation Value. As a result, if the
Accumulation Value of the Policy exceeds approximately $66,667, the Death
Benefit will be greater than the Face Amount plus the Accumulation Value. Each
additional dollar of the Accumulation Value above $66,667 will increase the
Death Benefit by $250. Thus, if the Accumulation Value exceeds $66,667 and
increases by $100 because of investment performance or premium payments, the
Death Benefit will increase by $250. A Policy owner with an Accumulation Value
of $75,000 will be entitled to a Death Benefit of $187,500 ($75,000 X 250%); an
Accumulation Value of $100,000 will yield a Death Benefit of $250,000 ($100,000
X 250%); and an Accumulation Value of $125,000 will yield a Death Benefit of
$312,500 ($125,000 X 250%).
Similarly, any time the Accumulation Value exceeds $66,667, each dollar
taken out of the Accumulation Value will reduce the Death Benefit by $250. If,
for example, the Accumulation Value is reduced from $75,000 to $70,000 because
of partial withdrawals, charges, or negative investment performance, the Death
Benefit will be reduced from $187,500 to $175,000. If at any time, however, the
Accumulation Value multiplied by the corridor percentage is less than the Face
Amount plus the Accumulation Value, then the Death Benefit will be the current
Face Amount plus the Accumulation Value of the Policy.
The corridor percentage becomes lower as the Insured's Age increases. If
the current Age of the Insured in the illustration above were, for example, 50
(rather than under 40), the corridor percentage would be 185%. The amount of the
Death Benefit would be the sum of the Accumulation Value plus $100,000 unless
the Accumulation Value exceeded approximately $117,647 (rather than $66,667),
and each $1 then added to or taken from the Accumulation Value would change the
Death Benefit by $1.85 (rather than $2.50).
21
<PAGE> 25
WHICH DEATH BENEFIT OPTION TO CHOOSE
If you prefer to have premium payments and favorable investment performance
reflected partly in the form of an increasing Death Benefit, you should choose
the Variable Amount Option. If you are satisfied with the amount of your
existing insurance coverage and prefer to have premium payments and favorable
investment performance reflected to the maximum extent in the Accumulation Value
and lower cost of insurance charges, you should choose the Level Amount Option.
REQUESTED CHANGES IN FACE AMOUNT
Subject to certain limitations, you may request an increase or decrease in
the Face Amount. No increase or decrease in the Face Amount will be permitted
during the first Policy Year.
INCREASES. For an increase in the Face Amount, you must submit a written
request to us. We may also require additional evidence of insurability
satisfactory to us. The effective date of the increase will be the Monthly
Anniversary on or next following our approval of the increase. The increase may
not be less than $5,000. We will currently permit increases to the Insured's Age
75. We will deduct any charges associated with the increase (the increases in
the Cost of Insurance and the Surrender Charge upon lapse or total
surrender -- see "Effect of Requested Changes in Face Amount" below) from the
Accumulation Value, whether or not you pay an additional premium in connection
with the increase. You will be entitled to limited conversion rights with
respect to requested increases in Face Amount. See "Free Look and Conversion
Rights."
DECREASES. For a decrease in the Face Amount, a written request must also
be submitted to us. Any decrease in the Face Amount will be effective on the
Monthly Anniversary on or next following our receipt of a written request. The
Face Amount remaining in force after any requested decrease may not be less than
the Minimum Face Amount shown in the Policy. Under our current rules, the
Minimum Face Amount is $25,000, but we reserve the right to establish a
different Minimum Face Amount in the future. If, following a decrease in Face
Amount, the Policy would no longer qualify as life insurance under Federal tax
law (see "Federal Tax Matters -- Tax Status of the Policy"), we will limit the
decrease to the extent necessary to meet these requirements.
For purposes of determining the Cost of Insurance, decreases in the Face
Amount will be applied to reduce the current Face Amount in the following order:
(1) The Face Amount provided by the most recent increase;
(2) The next most recent increases successively; and
(3) The Face Amount when the Policy was issued.
By reducing the current Face Amount in this manner, the Rate Class
applicable to the most recent increase in Face Amount will be eliminated first,
then the Rate Class applicable to the next most recent increase, and so on, for
the purposes of calculating the Cost of Insurance. This assumption will affect
the Cost of Insurance under the Policy only if different Rate Classes have been
applied to the current Face Amount. We currently place Insureds into standard
Rate Classes or into substandard Rate Classes that involve a higher mortality
risk (for example, a 200% Rate Class or a 300% Rate Class). In an otherwise
identical Policy, an Insured in the standard Rate Class will have a lower Cost
of Insurance than an Insured in a substandard Rate Class with higher mortality
risks. See "Deductions and Charges -- Monthly Deduction."
For example, assume that the initial Face Amount was $50,000 with a
standard Rate Class, and that successive increases of $25,000 (at a Rate Class
of 200%) and $50,000 (at a Rate Class of 300%) were added. If a decrease of
$50,000 or less is requested, the amount of insurance at a 300% Rate Class will
be reduced first. If a decrease of more than $50,000 is requested, the amount at
a 300% Rate Class will be eliminated, and the excess over $50,000 will next
reduce the amount of insurance at a 200% Rate Class.
EFFECT OF REQUESTED CHANGES IN FACE AMOUNT. An increase or decrease in Face
Amount will affect the Monthly Deduction because the Cost of Insurance depends
upon the Face Amount. The charge for certain
22
<PAGE> 26
optional insurance benefits may also be affected. See "Deductions and
Charges -- Monthly Deduction." An increase in the Face Amount will increase the
Surrender Charge, but a decrease in the Face Amount will not reduce the
Surrender Charge. The Surrender Charge is, however, imposed only upon lapse or
total surrender of the Policy and not upon a requested decrease in Face Amount.
See "Deductions and Charges -- Surrender Charge."
An increase in the Face Amount will increase the Minimum Monthly Premium as
of the effective date of the increase. Therefore, additional premium payments
may be required to maintain the Death Benefit Guarantee. A decrease in the Face
Amount will reduce the Minimum Monthly Premium as of the effective date of the
decrease. See "Death Benefit Guarantee."
The additional Surrender Charge on a requested increase in the Face Amount
will reduce the Cash Surrender Value (which is the Accumulation Value less any
Surrender Charge, Loan Amount and unpaid Monthly Deductions). If the resulting
Cash Surrender Value is not sufficient to cover the Monthly Deduction, the
Policy may lapse unless the Death Benefit Guarantee is in effect. See "Policy
Lapse and Reinstatement -- Lapse" and "Death Benefit Guarantee."
INSURANCE PROTECTION
As your insurance needs change, you may increase or decrease the pure
insurance protection provided by the Policy (that is, the difference between the
Death Benefit and the Accumulation Value) in one of several ways. These ways
include
- increasing or decreasing the Face Amount of insurance, changing the level
of premium payments, and,
- making a partial withdrawal under the Policy.
Although the consequences of each of these methods will depend upon the
individual circumstances, they may be generally summarized as follows:
- AN INCREASE IN THE FACE AMOUNT (which is generally subject to
underwriting approval -- see "Death Benefit -- Requested Changes in Face
Amount") will likely increase the amount of pure insurance protection,
depending on the amount of Accumulation Value and the resultant corridor
percentage limitation. If the insurance protection is increased, the
Policy charges generally will increase as well.
- A DECREASE IN THE FACE AMOUNT will, subject to the corridor percentage
limitations (see "Death Benefit -- Death Benefit Options"), decrease the
pure insurance protection without reducing the Accumulation Value. If the
Face Amount is decreased, the Cost of Insurance charges generally will
decrease as well. (Note that the Surrender Charge will not be reduced.
See "Deductions and Charges -- Surrender Charge.")
- A CHANGE IN THE LEVEL OF PREMIUM can have a variety of effects as
follows.
Under the Level Amount Option, until the corridor percentage of
Accumulation Value exceeds the Face Amount, (a) an increased level of
premium payments will reduce the amount of pure insurance protection, and
(b) a reduced level of premium payments will increase the amount of pure
insurance protection.
Under the Variable Amount Option, until the corridor percentage of
Accumulation Value exceeds the Face Amount plus the Accumulation Value,
the level of premium payments will not affect the amount of pure
insurance protection. (However, both the Accumulation Value and the Death
Benefit will be increased if premium payments are increased, and reduced
if premium payments are reduced.)
Under any Death Benefit Option, if the Death Benefit is the corridor
percentage of Accumulation Value, then (a) an increased level of premium
payments will increase the amount of pure insurance protection (subject
to underwriting approval -- see "Payment and Allocation of
Premiums -- Amount and Timing of Premiums"), and (b) a reduced level of
premium payments will reduce the pure insurance protection.
23
<PAGE> 27
- A PARTIAL WITHDRAWAL will reduce the Death Benefit. See "Surrender
Benefits -- Partial Withdrawal." However, it has a limited effect on the
amount of pure insurance protection and charges under the Policy, because
the decrease in the Death Benefit is usually equal to the amount of
Accumulation Value withdrawn. The primary use of a partial withdrawal is
to withdraw Accumulation Value. Furthermore, it results in a reduced
amount of Accumulation Value and increases the possibility that the
Policy will lapse.
You should consider the techniques described in this section for changing
the amount of pure insurance protection under the Policy (for example, changing
the Face Amount, making a partial withdrawal, and changing the amount of premium
payments) together with the other restrictions and considerations described
elsewhere in this prospectus.
CHANGING THE DEATH BENEFIT OPTION
After the first two Policy Years and at least two years after any increase
in Face Amount, you may change the Death Benefit Option once each Policy Year.
You must submit a written request to change the Death Benefit Option. A change
in the Death Benefit Option will also change the Face Amount. If the Death
Benefit Option is changed from the Level Amount Option to the Variable Amount
Option, the Face Amount will be decreased by an amount equal to the Accumulation
Value on the effective date of the change. You cannot change from the Level
Amount Option to the Variable Amount Option if the resulting Face Amount would
fall below the minimum Face Amount (currently $25,000).
If you request to change the Death Benefit Option from the Variable Amount
Option to the Level Amount Option, we will increase the Face Amount by an amount
equal to the Policy's Accumulation Value on the effective date of the change.
An increase or decrease in Face Amount resulting from a change in the Death
Benefit Option will affect the future Monthly Deductions because the Cost of
Insurance depends upon the Face Amount. A change in the Face Amount resulting
from a change in the Death Benefit Option may also affect the charge for certain
optional insurance benefits. See "Deductions and Charges -- Monthly Deduction."
However, a Face Amount change resulting from a Death Benefit Option change will
not affect the Surrender Charge.
Changes in the Death Benefit Option do not currently require additional
evidence of insurability.
ACCELERATED BENEFIT RIDER
Under certain circumstances, the Accelerated Benefit Rider allows a Policy
owner to accelerate benefits from the Policy that we otherwise would pay upon
the Insured's death. The benefit may vary state-by-state and you should consult
your registered representative as to whether and to what extent the rider is
available in a particular state and on any particular Policy. Generally, we will
provide an Accelerated Benefit if the Insured has a terminal illness that will
result in the death of the Insured within 12 months as certified by a physician.
The Accelerated Benefit will not be more than 50% of the amount that would be
payable at the death of the Insured. The Accelerated Benefit will first be used
to pay off any outstanding Policy loans and interest due. The remainder of the
Accelerated Benefit will be paid in a lump sum to the Policy owner. Limitations,
as described in the Accelerated Benefit Rider, may apply.
We will establish a lien against the Policy for the amount of the
Accelerated Benefit plus an administrative charge, plus interest on the lien. We
will first use any proceeds from the Policy to repay this lien. We will reduce
your access to the Cash Value by the amount of the lien. We also will reduce the
proceeds payable to the beneficiary by the amount of the lien. We may assess an
administrative charge of up to $300 at the time we pay the Accelerated Benefit.
The Accelerated Benefit will not affect the premium payable on the Policy.
Receipt of a benefit under the Accelerated Benefit Rider may give rise to
Federal or state income tax. Consult a competent tax advisor for further
information.
24
<PAGE> 28
The above information is not a complete summary of the Rider. All of the
terms and provisions of the Accelerated Benefit Rider are set forth in the
Rider, and you should refer to the Rider in order to fully ascertain its
benefits and limitations.
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUING THE POLICY
An individual applying for a Policy must complete an application and
personally deliver it to our licensed agent. We will generally only issue a
Policy to an applicant Age 75 or less who supplies evidence of insurability
satisfactory to us. The minimum Face Amount is currently $25,000, but we reserve
the right to specify a different minimum Face Amount in the future for issuing a
new Policy. Acceptance is subject to our underwriting rules and we reserve the
right to reject an application for any reason permitted by law.
COVERAGE. Coverage under a Policy begins on the later of the Issue Date or
the date we receive at least the minimum initial premium (see immediately
following section). In general, if the applicant pays at least the minimum
initial premium with the application, the Issue Date will be the later of the
date of the application or the date of any medical examination required by our
underwriting procedures. However, if underwriting approval has not occurred
within 45 days after we receive the application or if you authorize premiums to
be paid by bank account monthly deduction, the Issue Date will be the date of
underwriting approval.
If you authorize premiums to be paid by government allotment, the Issue
Date generally will be, subject to our underwriting approval, the first day of
the month in which we receive the first Minimum Monthly Premium through
government allotment, whether or not a Minimum Monthly Premium is collected with
the application. If a Minimum Monthly Premium is collected with the application,
it will be allocated to the Sub-Accounts of the Variable Account and the Fixed
Account on the Valuation Date next following the Issue Date.
MINIMUM INITIAL PREMIUM. The minimum initial premium is three Minimum
Monthly Premiums. See "Death Benefit Guarantee." If, however, you authorize
premiums to be paid by bank account monthly deduction or government allotment,
we will accept one Minimum Monthly Premium together with the required
authorization forms. The Minimum Monthly Premium is specified in the Policy and
determines the payments required to maintain the Death Benefit Guarantee.
ALLOCATING PREMIUMS
You choose the initial allocation of your Net Premiums (your gross premiums
less the Premium Expense Charge) to the Fixed Account and the Sub-Accounts of
the Variable Account on the application for the Policy. You may change the
allocation at any time by notifying us in writing. Changes will not be effective
until the date we receive your request and will only affect premiums we receive
on or after that date. The premium allocation may be 100% to the Fixed Account
or the Sub-Accounts or divided among the Fixed Account and the Sub-Accounts in
whole percentage points totaling 100%. We reserve the right to adjust any
allocation to eliminate fractional percentages. Changing the Net Premium
allocation will not affect the allocation of existing Accumulation Value.
CREDITING NET PREMIUMS. We will credit Net Premiums on the latest of the
following dates:
- The Valuation Date following the date of underwriting approval.
- The Valuation Date on or next following the Policy Date.
- The Valuation Date on or next following the date we have received at
least the required minimum initial premium payment.
- In the case of Policies issued under government allotment programs, the
Valuation Date next following the Issue Date.
25
<PAGE> 29
Until the date on which Net Premiums are credited as described above, we
will hold premium payments in our General Account. No interest will be earned on
these premium payments during this period of time.
REFUNDING PREMIUMS. We will return all premiums paid without interest if
any of the following occur:
- We send notice to the applicant that the insurance is declined.
- The applicant refuses an offer for an alternative policy.
- The applicant does not supply required medical exams or tests within 30
days of the date of the application.
- The applicant returns the Policy under the limited free look right. See
"Free Look and Conversion Rights -- Free Look Rights."
AMOUNT AND TIMING OF PREMIUMS
The amount and frequency of premium payments will affect the Accumulation
Value, the Cash Surrender Value, and how long the Policy will remain in force
(including affecting whether the Death Benefit Guarantee is in effect -- see
"Death Benefit Guarantee"). After the initial premium, you may determine the
amount and timing of subsequent premium payments within the following
restrictions:
- In most cases, we will require that you pay cumulative premiums
sufficient to maintain the Death Benefit Guarantee to keep the Policy in
force during at least the first several Policy Years. See "Death Benefit
Guarantee."
- We may choose not to accept any premium less than $25.
- We reserve the right to limit the amount of any premium payment. In
general, during the first Policy Year we will not accept total premium
payments in excess of $250,000 on the life of any Insured, whether such
payments are received on a Policy or on any other insurance policy
issued by us or our affiliates. Also, we will not accept any premium
payment in excess of $50,000 on any Policy after the first Policy Year.
We may waive any of these premium limitations.
- We may require additional evidence of insurability satisfactory to us if
any premium would increase the difference between the Death Benefit and
the Accumulation Value (that is, the net amount at risk). A premium
payment would increase the net amount at risk if at the time of payment
the Death Benefit would be based upon the applicable corridor percentage
of Accumulation Value. See "Death Benefit -- Death Benefit Options."
- In no event may the total of all premiums paid, both scheduled and
unscheduled, exceed the current maximum premium payments allowed for
life insurance under Section 7702 of the Code. If at any time you pay a
premium which would result in total premiums exceeding the current
maximum premiums allowed, we will only accept that portion of the
premium which would make total premiums equal the maximum. We will
return any part of the premium in excess of that amount, and we will not
accept further premiums until allowed by the current maximum premium
limitations.
- You may pay additional premiums (other than Planned Periodic Premiums)
at any time while the Policy is in force. We may limit the number and
amount of these additional payments.
- If you want to make a large premium payment under this Policy, and you
wish to avoid Modified Endowment Contract classification, you may
contact us in writing before making the payment and we will tell you the
maximum amount which can be paid into the Policy. See "Federal Tax
Matters -- Tax Status of the Policy."
PLANNED PERIODIC PREMIUMS
You may choose a Planned Periodic Premium schedule which indicates a
preference as to future amounts and frequency of payment. You may pay Planned
Periodic Premiums annually, semi-annually, quarterly or, if
26
<PAGE> 30
you choose, you can pay the Planned Periodic Premiums by bank account monthly
deduction or government allotment.
Your Policy will show the amount and frequency of your initial Planned
Periodic Premium. You may change the Planned Periodic Premium at any time by
written request. We may limit the amount of any increase if such an increase
would result in planned periodic premiums that are larger than (a) the maximum
premium we would accept under the terms of the Amount and Timing of Premium
Payments provision in the Policy or (b) the planned periodic premium which would
total more than $50,000 per year. Failure to make any Planned Periodic Premium
payment will not, however, necessarily result in lapse of the Policy. On the
other hand, making Planned Periodic Premium payments will not guarantee that the
Policy remains in force. See "Death Benefit Guarantee" and "Policy Lapse and
Reinstatement."
PAYING PREMIUMS BY MAIL
Planned Periodic Premiums and Unscheduled Additional Premiums may be paid
to the Company by mailing them to:
ReliaStar Life Insurance Company of New York
NW 7353
P.O. Box 1450
Minneapolis, Minnesota 55485-7353
DEATH BENEFIT GUARANTEE
If you meet the requirements described below, we guarantee that we will not
lapse the Policy even if the Cash Surrender Value is not sufficient to cover the
Monthly Deduction that is due. This feature of the Policy is called the "Death
Benefit Guarantee." The Death Benefit Guarantee expires at the Insured's Age 65
or five Policy Years if longer.
In general, the two most significant benefits from the Death Benefit
Guarantee are as follows:
- First, during the early Policy Years, the Cash Surrender Value will
generally not be sufficient to cover the Monthly Deduction, so that the
Death Benefit Guarantee will be necessary to avoid lapse of the Policy.
See "Policy Lapse and Reinstatement." This occurs because the Surrender
Charge usually exceeds the Accumulation Value in these years. In this
regard, you should consider that if you request an increase in Face
Amount, an additional Surrender Charge would apply for the 15 years
following the increase, which could create a similar possibility of
lapse as exists during the early Policy Years.
- Second, to the extent the Cash Surrender Value declines due to poor
investment performance, or due to an additional Surrender Charge after a
requested increase, the Cash Surrender Value may not be sufficient even
in later Policy Years to cover the Monthly Deduction, so that the Death
Benefit Guarantee may also be necessary in later Policy Years to avoid
lapse of the Policy.
Thus, even though the Policy permits premium payments that are less than
the Minimum Monthly Premiums, you may lose the significant protection provided
by the Death Benefit Guarantee by paying less than the Minimum Monthly Premiums.
REQUIREMENTS FOR THE DEATH BENEFIT GUARANTEE
The Death Benefit Guarantee will be in effect if the sum of all premiums
paid minus any partial withdrawals and any loans are equal to or greater than
the sum of the Minimum Monthly Premiums since the Policy Date. You must satisfy
the requirements for the Death Benefit Guarantee as of each Monthly Anniversary,
even though you do not have to pay premiums monthly.
EXAMPLE: The Policy Date is January 1, 2000. The Minimum Monthly Premium
is $100 per month. No Policy loans or partial withdrawals are taken and no Face
Amount changes have occurred.
Case 1. You pay $100 each month. The Death Benefit Guarantee is
maintained.
27
<PAGE> 31
Case 2. You pay $1,000 on January 1, 2000. The $1,000 maintains the Death
Benefit Guarantee without your paying any additional premiums for
the next 10 months (through October 31, 2000). However, you must
pay at least $100 by November 1, 2000 to maintain the Death
Benefit Guarantee through November 30, 2000.
We will determine (and the Policy will indicate) the amount of the initial
Minimum Monthly Premium at issuance of the Policy. The initial Minimum Monthly
Premium will depend upon the Insured's sex, Age at issue, Rate Class, optional
insurance benefits added by rider, and the initial Face Amount.
The following Policy changes may change the Minimum Monthly Premium:
- A requested increase or decrease in the Face Amount. See "Death
Benefit -- Requested Changes in Face Amount."
- A change in the Death Benefit Option. See "Death Benefit -- Changing the
Death Benefit Option."
- The addition or termination of a Policy rider. See "General
Provisions -- Optional Insurance Benefits."
We will notify you in writing of any changes in the Minimum Monthly
Premium.
If, as of any Monthly Anniversary, you have not made sufficient premium
payments to maintain the Death Benefit Guarantee, we will send you notice of the
premium payment required to maintain it. If we do not receive the required
premium payment within 61 days from the date of our notice, the Death Benefit
Guarantee will terminate. THE DEATH BENEFIT GUARANTEE CANNOT BE REINSTATED.
Even if the Death Benefit Guarantee terminates, the Policy will not
necessarily lapse. For a discussion of the circumstances under which the Policy
may lapse, see "Policy Lapse and Reinstatement."
ACCUMULATION VALUE
The Accumulation Value of the Policy (that is, the total value attributable
to a specific Policy in the Variable Account and the Fixed Account) is equal to
the sum of the Variable Accumulation Value (the amount attributable to the
Variable Account) plus the Fixed Accumulation Value (the amount attributable to
the Fixed Account). You should distinguish the Accumulation Value from the Cash
Surrender Value that would actually be paid to you upon total surrender of the
Policy, which is the Accumulation Value less any Surrender Charge, Loan Amount
and unpaid Monthly Deductions. See "Surrender Benefits -- Total Surrender." You
should also distinguish the Accumulation Value from the Cash Value, which
determines the amount available for Policy loans, and is the Accumulation Value
less any Surrender Charge. See "Policy Loans."
The Variable Accumulation Value will generally vary daily and will increase
or decrease to reflect the investment performance of the Funds in which
Sub-Accounts of the Variable Account have been invested.
We will increase the Variable Accumulation Value by:
- any Net Premiums credited to the Variable Account, and
- any transfers from the Fixed Account.
We will reduce the Variable Accumulation Value by:
- the Monthly Deduction attributable to the Variable Account,
- partial withdrawals from the Variable Account,
- any transfer and partial withdrawal charges attributable to the Variable
Account, and
- any amounts transferred from the Variable Account to the Fixed Account
(including amounts transferred from the Variable Account to the Fixed
Account as security for Policy loans -- see "Policy Loans").
28
<PAGE> 32
We will increase the Fixed Accumulation Value by:
- any Net Premiums credited to the Fixed Account,
- any interest credited to the Fixed Account (determined at our
discretion, but guaranteed not to be less than 4%), and
- any amounts transferred from the Variable Account to the Fixed Account
(including amounts transferred to the Fixed Account as security for
Policy loans -- see "Policy Loans").
We will reduce the Fixed Accumulation Value by:
- the Monthly Deduction attributable to the Fixed Account,
- partial withdrawals from the Fixed Account,
- any transfer and partial withdrawal charges attributable to the Fixed
Account, and
- any amounts transferred from the Fixed Account to the Variable Account.
See Appendix B for a detailed discussion of the calculation of Accumulation
Value.
ILLUSTRATION OF POLICY BENEFITS
In order to help you understand how your Policy values would vary over time
under different sets of assumptions, we will provide you with certain
personalized illustrations upon request. These will be based on the age and
insurance risk characteristics of the insured under your Policy and such factors
as the specified face amount, death benefit option, premium payment amounts and
rates of return (within limits) that you request. You can request such
illustrations at any time.
We have also filed an example of such illustration as an exhibit to the
registration statement referred to on page 49 of this Prospectus. This form of
illustration is available to you upon request and is incorporated herein by
reference.
SPECIALIZED USES OF THE POLICY
Because the Policy provides for an accumulation of Cash Surrender Value as
well as a Death Benefit, the Policy can be used for various individual and
business financial planning purposes. Purchasing the Policy in part for such
purposes entails certain risks. For example, if the investment performance of
the Sub-Accounts to which Accumulation Value is allocated is poorer than
expected or if sufficient premiums are not paid, the Policy may lapse or may not
accumulate sufficient Accumulation Value or Cash Surrender Value to fund the
purpose for which the Policy was purchased. Withdrawals and Policy loans may
significantly affect current and future Accumulation Value, Cash Surrender
Value, or Death Benefit proceeds. Depending upon Sub-Account investment
performance and the amount of a Policy loan, the loan may cause a Policy to
lapse. Because the Policy is designed to provide benefits on a long-term basis,
before purchasing a Policy for a specialized purpose a purchaser should consider
whether the long-term nature of the Policy is consistent with the purpose for
which it is being considered. Using a Policy for a specialized purpose may have
tax consequences. See "Federal Tax Matters."
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike traditional life insurance policies, the failure to make a
Planned Periodic Premium will not by itself cause the Policy to lapse
(terminate). If the Death Benefit Guarantee is not in effect, the Policy will
lapse only if, as of any Monthly Anniversary, the Cash Surrender Value is less
than the Monthly Deduction due, and a grace period of 61 days expires without a
sufficient premium payment.
During the early Policy Years, the Cash Surrender Value will generally not
be sufficient to cover the Monthly Deduction, so that premium payments
sufficient to maintain the Death Benefit Guarantee will be required to avoid
lapse. See "Death Benefit Guarantee."
29
<PAGE> 33
The Policy does not lapse, and the insurance coverage continues, until the
expiration of a 61-day grace period which begins on the date we send you written
notice indicating that the Cash Surrender Value is less than the Monthly
Deduction due. Our written notice will indicate the amount of the payment
required to avoid lapse. If you do not make a sufficient premium payment within
the grace period, then the Policy will lapse without value.
If the Insured dies during the grace period, the proceeds payable will
equal the amount of the Death Benefit on the Valuation Date on or next following
the date of the Insured's death, reduced by any Loan Amount and any unpaid
Monthly Deductions.
If the Death Benefit Guarantee is in effect, we will not lapse the Policy.
See "Death Benefit Guarantee."
REINSTATEMENT. Reinstatement means putting a lapsed Policy back in force.
You may reinstate a lapsed Policy by written request any time within five years
after it has lapsed if it has not been surrendered for its Cash Surrender Value.
To reinstate the Policy and any riders, you must submit evidence of
insurability satisfactory to us and you must pay a premium large enough such
that the Net Premium is as large as the sum of the Surrender Charge after
reinstatement, plus the Monthly Deductions for the date of reinstatement and the
following Monthly Anniversary.
The Death Benefit Guarantee cannot be reinstated. See "Death Benefit
Guarantee."
SURRENDER BENEFITS
Subject to certain limitations, you may make a total surrender of the
Policy or a partial withdrawal of the Policy's Cash Surrender Value by sending
us a written request. We will determine the amount available for a total
surrender or partial withdrawal at the end of the Valuation Period when we
receive your written request. Generally, we will pay any amounts from the
Variable Account upon total surrender or partial withdrawal within seven days
after we receive your written request. We may postpone payments, however, in
certain circumstances. See "General Provisions -- Postponement of Payments."
TOTAL SURRENDER
You may surrender the Policy at any time for its Cash Surrender Value by
making a written request. The Cash Surrender Value is the Accumulation Value of
the Policy reduced by any Surrender Charge, Loan Amount and unpaid Monthly
Deductions. If the Cash Surrender Value at the time of a surrender exceeds
$25,000, the written request must include a Signature Guarantee. An illustration
of Accumulation Values, Surrender Charges, Cash Surrender Values, and Death
Benefits assuming different levels of premium payments and investment returns
for selected Ages and Face Amounts is available upon your request. An example of
an illustration has been filed as an exhibit to the registration statement.
PARTIAL WITHDRAWAL
After the first Policy Year, you may also withdraw part of the Cash
Surrender Value by sending us a written request. If the amount being withdrawn
exceeds $25,000, then the written request must include a Signature Guarantee. We
currently allow only one partial withdrawal in any Policy Year. We currently
make a $10 charge for each partial withdrawal. We guarantee that this charge
will not exceed $25 for each partial withdrawal. See "Deductions and Charges --
Partial Withdrawal and Transfer Charges." The amount of any partial withdrawal
must be at least $500 and, during the first 15 Policy Years, may not be more
than 20% of the Cash Surrender Value on the date we receive your written
request. No interest will accrue on amounts represented by uncashed distribution
or redemption checks.
Unless you specify a different allocation, we make partial withdrawals from
the Fixed Account and the Sub-Accounts of the Variable Account on a
proportionate basis based upon the Accumulation Value. We will determine these
proportions at the end of the Valuation Period during which we receive your
written request.
30
<PAGE> 34
For purposes of determining these proportions, we first subtract any outstanding
Loan Amount from the Fixed Accumulation Value.
EFFECT OF PARTIAL WITHDRAWAL. We will reduce the Accumulation Value by the
amount of any partial withdrawal. We will also reduce the Death Benefit by the
amount of the withdrawal, or, if the Death Benefit is based on the corridor
percentage of Accumulation Value (see "Death Benefit -- Death Benefit Options"),
by an amount equal to the corridor percentage times the amount of the partial
withdrawal.
If the Level Amount Option is in effect, we will reduce the Face Amount by
the amount of the partial withdrawal. When increases in the Face Amount have
occurred previously, we reduce the current Face Amount by the amount of the
partial withdrawal in the following order:
(1) The Face Amount provided by the most recent increase;
(2) The next most recent increases successively; and
(3) The Face Amount when the Policy was issued.
(This assumption also applies to requested decreases in Face Amount -- see
"Death Benefit -- Requested Changes in Face Amount.") Thus, partial withdrawals
may affect the way in which the Cost of Insurance is calculated and the amount
of pure insurance protection under the Policy. See "Death Benefit -- Requested
Changes in Face Amount," "Deductions and Charges -- Monthly Deduction" and
"Death Benefit -- Insurance Protection."
We do not allow a partial withdrawal if the Face Amount after a partial
withdrawal would be less than the Minimum Face Amount (currently $25,000).
If the Variable Amount Option is in effect, a partial withdrawal does not
affect the Face Amount.
A partial withdrawal may also cause the termination of the Death Benefit
Guarantee because we deduct the amount of the partial withdrawal from the total
premiums paid in calculating whether you have paid sufficient premiums in order
to maintain the Death Benefit Guarantee.
Like partial withdrawals, Policy loans are a means of withdrawing funds
from the Policy. See "Policy Loans." A partial withdrawal or a Policy loan may
have tax consequences depending on the circumstances of such withdrawal or loan.
See "Federal Tax Matters -- Tax Status of the Policy."
TRANSFERS
You may transfer all or part of the Variable Accumulation Value between the
Sub-Accounts or to the Fixed Account subject to any conditions the Funds whose
shares are involved may impose. You must make your transfer request in writing
unless you have completed a telephone transfer authorization form. You may also
direct us to automatically make periodic transfers under the Dollar Cost
Averaging or Portfolio Rebalancing services as described below.
To transfer all or part of the Variable Accumulation Value from a
Sub-Account, we redeem Accumulation Units and reinvest their values in other
Sub-Accounts, or the Fixed Account, as you direct in your request. We will
effect transfers, and determine all values in connection with transfers, at the
end of the Valuation Period during which we receive your request, except as
otherwise specified for the Dollar Cost Averaging or Portfolio Rebalancing
services. With respect to future Net Premium payments, however, your current
premium allocation will remain in effect unless (1) you have requested the
Portfolio Rebalancing service, or (2) you are transferring all of the Variable
Accumulation Value from the Variable Account to the Fixed Account in exercise of
conversion rights. See "Free Look and Conversion Rights -- Conversion Rights."
31
<PAGE> 35
Transfers from the Fixed Account to the Variable Account are subject to the
following additional restrictions:
- your transfer request must be postmarked no more than 30 days before or
after the Policy Anniversary in any year and only one transfer is
permitted during this period,
- the Fixed Accumulation Value after the transfer must be at least equal to
the Loan Amount,
- you may only transfer up to 50% of the Fixed Accumulation Value, less any
Loan Amount, unless the balance, after the transfer, would be less than
$1,000, in which event you may transfer the full Fixed Accumulation
Value, less any Loan Amount, and
- you must transfer at least the lesser of $500 or the total Fixed
Accumulation Value, less any Loan Amount.
See Appendix A. Some of these restrictions may be waived for transfers due
to the Portfolio Rebalancing service.
TELEPHONE/FAX INSTRUCTIONS. You are allowed to enter certain types of
instructions either by telephone or by fax if you complete a telephone/fax
instruction authorization form. If you complete the form, you can enter the
following types of instructions by telephone or fax:
- transfers between Sub-Accounts
- changes of allocations among fund options
By completing the telephone/fax form, you agree that we will not be liable
for any loss, liability, cost or expense when we act in accordance with the
telephone/fax transfer instructions that we receive or are recorded on voice
recording equipment. If we later determine that you did not make a telephone/fax
transfer request or the request was made without your authorization, and loss
results from such unauthorized transfer, you bear the risk of this loss. We
consider any requests made via fax as telephone requests and such requests are
bound by the conditions in the telephone/fax transfer authorization form you
sign. Any fax request should include your name, daytime telephone number, Policy
number and, in the case of transfers, the names of the Sub-Accounts from which
and to which money will be transferred and the allocation percentage. ReliaStar
will employ reasonable procedures to confirm that instructions communicated by
telephone/fax are genuine. If we do not employ such procedures, we may be liable
for any losses due to unauthorized or fraudulent instructions. Such procedures
may include, among others, requiring forms of personal identification prior to
acting upon telephone/fax instructions, providing written confirmation of such
instructions, and/or tape recording telephone instructions.
DOLLAR COST AVERAGING SERVICE. You may request this service if your Face
Amount is at least $100,000 and your Accumulation Value, less any Loan Amount,
is at least $5,000. If you request this service, you direct us to automatically
make specific periodic transfers of a fixed dollar amount from any of the
Sub-Accounts to one or more of the Sub-Accounts or to the Fixed Account. We do
not permit transfers from the Fixed Account under this service. You may request
that we make transfers of this type on a monthly, quarterly, semi-annual, or
annual basis. This service is intended to allow you to use "Dollar Cost
Averaging," a long term investment method which provides for regular investments
over time. We make no guarantees that Dollar Cost Averaging will result in a
profit or protect against loss. You may discontinue this service at any time by
notifying us in writing.
If you are interested in the Dollar Cost Averaging service, you may obtain
a separate application form and full information concerning this service and its
restrictions from us or our registered representative.
We will discontinue the Dollar Cost Averaging service immediately (1) on
receipt of any request to begin a Portfolio Rebalancing service, (2) if the
Policy is in the grace period on any date when Dollar Cost Averaging transfers
are scheduled, or (3) if the specified transfer amount from any Sub-Account is
more than the Accumulation Value in that Sub-Account.
32
<PAGE> 36
We reserve the right to discontinue, modify, or suspend this service. Any
such modification or discontinuation would not affect any Dollar Cost Averaging
service requests already commenced.
PORTFOLIO REBALANCING SERVICE. You may request this service if your Face
Amount is at least $200,000 and your Accumulation Value, less any Loan Amount,
is at least $10,000. If you request this service, you direct us to automatically
make periodic transfers to maintain your specified percentage allocation of
Accumulation Value, less any Loan Amount, among the Sub-Accounts of the Variable
Account and the Fixed Account. We will also change your allocation of future Net
Premium payments to be equal to this specified percentage allocation. You may
request that we make transfers made under this service on a quarterly, semi-
annual, or annual basis. This service is intended to maintain the allocation you
have selected consistent with your personal objectives.
The Accumulation Value in each Sub-Account of the Variable Account and the
Fixed Account will grow or decline at different rates over time. Portfolio
Rebalancing will periodically transfer Accumulation Values from those accounts
that have increased in value to those accounts that have increased at a slower
rate or declined in value. If all accounts decline in value, it will transfer
Accumulation Values from those that have decreased less in value to those that
have decreased more in value. We make no guarantees that Portfolio Rebalancing
will result in a profit or protect against loss. You may discontinue this
service at any time by notifying us in writing.
If you are interested in the Portfolio Rebalancing service you may obtain a
separate application form and full information concerning this service and its
restrictions from us or our registered representative.
If you are using the Portfolio Rebalancing service, we will discontinue
this service immediately (1) on receipt of any request to change the allocation
of premiums to the Fixed Account and Sub-Account of the Variable Account, (2) on
receipt of any request to begin a Dollar Cost Averaging service, (3) upon
receipt of any request to transfer Accumulation Value among the Fixed Account or
Sub-Accounts, or (4) if the policy is in the grace period or the Accumulation
Value, less any Loan Amount, is less than $7,500 on any Valuation Date when
Portfolio Rebalancing transfers are scheduled.
We reserve the right to discontinue, modify, or suspend this service. Any
such modification or discontinuation could affect Portfolio Rebalancing services
currently in effect, but only after 30 days notice to affected Policy owners.
TRANSFER LIMITS. We currently do not limit the number of transfers in a
Policy Year. We reserve the right to limit you to no more than 12 transfers per
Policy Year. All transfers that are effective on the same Valuation Date will be
treated as one transfer transaction. Transfers made due to the Dollar Cost
Averaging or Portfolio Rebalancing services do not currently count toward the
limit on the number of transfers.
TRANSFER CHARGES. We currently charge a $25 fee per transfer for transfers
in excess of 24 per Policy Year for the duration of the Policy. We reserve the
right to make a charge not to exceed $25 per transfer for any transfers in
excess of 12 per Policy Year. See "Deductions and Charges -- Partial Withdrawal
and Transfer Charges." In no event, however, will we impose any charge in
connection with the exercise of a conversion right, or transfers occurring as
the result of Policy loans, Dollar Cost Averaging, Portfolio Rebalancing, or
automatic withdrawals. All transfers are also subject to any charges and
conditions imposed by the Fund whose shares are involved. We will treat all
transfers that are effective on the same Valuation Date as one transfer
transaction for purposes of assessing any transfer charge.
POLICY LOANS
GENERAL. As long as the Policy remains in effect, you may borrow money from
us at any time after the first Policy Year using the Policy as security for the
loan. The maximum amount you may borrow at any time is equal to the loan value
of the Policy, which is equal to the Cash Value less the existing Loan Amount.
Each Policy loan must be at least $500.
You can make loan requests in writing or by telephoning us on any Valuation
Date. Any loan request in excess of $25,000 will require a Signature Guarantee.
Telephone loan requests cannot exceed $10,000. We
33
<PAGE> 37
currently do not require any election form to make telephone loan requests. We
will employ reasonable procedures to confirm that loan requests made by
telephone are genuine. In the event we do not employ such procedures, we may be
liable for any losses due to unauthorized or fraudulent instructions. Such
procedures may include, among others, requiring forms of personal identification
prior to acting upon telephone instructions, providing written confirmations of
such instructions and/or tape recording telephone instructions.
Policy loans have priority over the claims of any assignee or other person.
You may repay a Policy loan in whole or in part at any time.
We will normally pay the loan proceeds to you within seven days after we
receive your request. We may postpone payment of loan proceeds to you under
certain circumstances. See "General Provisions -- Postponement of Payments."
Payments you make generally will be treated as premium payments, rather
than Policy loan repayments, unless you indicate that we should treat the
payment otherwise or unless we decide, at our discretion, to apply the payment
as a Policy loan repayment. As a result, unless you indicate that a payment is a
loan repayment, all payments you make to the Policy will generally be subject to
the Premium Expense Charge. See "Deductions and Charges -- Premium Expense
Charge."
IMMEDIATE EFFECT OF POLICY LOANS. When we make a Policy loan, we will
segregate an amount equal to the Policy loan (which includes interest payable in
advance) within the Accumulation Value of your Policy and held in the Fixed
Account as security for the loan. As described below, you will pay interest to
us on the Policy loan, but we will also credit interest to you on the amount
held in the Fixed Account as security for the loan. We will include the amount
segregated in the Fixed Account as security for the Policy loan as part of the
Fixed Accumulation Value under the Policy, but we will credit that amount with
interest on a basis different from other amounts in the Fixed Account.
Unless you specify differently, amounts held as security for the Policy
loan will come proportionately from the Fixed Accumulation Value and the
Variable Accumulation Value (with the proportions being determined as described
below). We will transfer assets equal to the portion of the Policy loan coming
from the Variable Accumulation Value from the Sub-Accounts of the Variable
Account to the Fixed Account, THEREBY REDUCING THE ACCUMULATION VALUE HELD IN
THE SUB-ACCOUNTS. We do not treat these transfers as transfers for the purposes
of assessing the transfer charge or calculating the limit on the number of
transfers.
EFFECT ON INVESTMENT PERFORMANCE. Amounts coming from the Variable Account
as security for Policy loans will no longer participate in the investment
performance of the Variable Account. We will credit all amounts held in the
Fixed Account as security for Policy loans (that is, the Loan Amount) with
interest at an effective annual rate currently equal to 4.00%. WE WILL NOT
CREDIT ADDITIONAL INTEREST TO THESE AMOUNTS. On the Policy Anniversary, we will
allocate any interest credited on these amounts to the Fixed Account and the
Variable Account according to the premium allocation then in effect. See
"Payment and Allocation of Premiums -- Allocating Premiums."
Although you may repay Policy loans in whole or in part at any time before
the Insured's Age 95, Policy loans will permanently affect the Policy's
potential Accumulation Value. As a result, to the extent that the Death Benefit
depends upon the Accumulation Value (see "Death Benefit -- Death Benefit
Options"), Policy loans will also affect the Death Benefit under the Policy.
This effect could be favorable or unfavorable depending on whether the
investment performance of the assets allocated to the Sub-Account(s) is less
than or greater than the interest being credited on the assets transferred to
the Fixed Account while the loan is outstanding. Compared to a Policy under
which no loan is made, values under the Policy will be lower when such interest
credited is less than the investment performance of assets held in the
Sub-Account(s).
EFFECT ON POLICY COVERAGE. We will notify you if, on any Monthly
Anniversary, the Loan Amount is greater than the Accumulation Value less the
then applicable Surrender Charge. If we do not receive sufficient payment within
61 days from the date we send notice to you, the Policy will lapse and terminate
without value. Our written notice to you will indicate the amount of the payment
required to avoid lapse. The Policy may, however, later be reinstated. See
"Policy Lapse and Reinstatement."
34
<PAGE> 38
A Policy loan may also cause termination of the Death Benefit Guarantee,
because we deduct the Loan Amount from the total premiums paid in calculating
whether you have paid sufficient premiums in order to maintain the Death Benefit
Guarantee. See "Death Benefit Guarantee."
We will reduce proceeds payable upon the death of the Insured by any Loan
Amount.
INTEREST. The interest rate charged on Policy loans will be an annual rate
of 5.66%, payable in advance. After the tenth Policy Year, we will charge
interest at an annual rate of 3.85%, payable in advance, on that portion of your
Loan Amount that is not in excess of (1) the Accumulation Value, less (2) the
total of all premiums paid and all partial withdrawals. We will charge interest
on any excess of this amount at the annual rate of 5.66%, payable in advance.
Interest is payable in advance (for the rest of the Policy Year) at the
time any Policy loan is made and at the beginning of each Policy Year thereafter
(for that entire Policy Year). If you do not pay interest when due, we will
deduct it from the Cash Surrender Value as an additional Policy loan (see
"Immediate Effect of Policy Loans" above) and we will add it to the existing
Loan Amount.
Because we charge interest in advance, we will refund any interest that we
have not earned to you upon lapse or surrender of the Policy or repayment of the
Policy loan.
REPAYMENT OF LOAN AMOUNT. You may repay the loan amount at any time. If not
repaid, we will deduct the Loan Amount from any amount payable under the Policy.
As described above, unless you provide us with notice to the contrary, we
generally will treat any payments on the Policy as premium payments, which are
subject to the Premium Expense Charge, rather than repayments on the Loan
Amount. Any repayments on the Loan Amount will result in amounts being
reallocated from the Fixed Account and to the Sub-Accounts of the Variable
Account according to your current premium allocation.
TAX CONSIDERATIONS. A Policy loan may have tax consequences depending on
the circumstances of the loan. See "Federal Tax Matters -- Tax Status of the
Policy."
FREE LOOK AND CONVERSION RIGHTS
FREE LOOK RIGHTS
The Policy provides for an initial free look period during which you have a
right to return the Policy for cancellation and receive a refund of all premiums
paid. You must return the Policy to us or your agent and ask us to cancel the
Policy by midnight of the 20th day after receiving it.
CONVERSION RIGHTS
During the first two Policy Years and the first two years following a
requested increase in Face Amount, we provide you with an option to convert the
Policy or any requested increase in Face Amount to a life insurance policy under
which the benefits do not vary with the investment experience of the Variable
Account. This option is made available by permitting you to transfer all or a
part of your Variable Accumulation Value to the Fixed Account.
GENERAL OPTION. You may exercise your conversion right by transferring all
or any part of your Variable Accumulation Value to the Fixed Account. If, at any
time during the first two Policy Years or the first two years following a
requested increase in Face Amount, you request transfer from the Variable
Account to the Fixed Account and indicate that you are making the transfer in
exercise of your conversion right, we will not assess any transfer charge on the
transfer, and the transfer will not count against the limit on the number of
transfers. At the time of such transfer, there is no effect on the Policy's
Death Benefit, Face Amount, net amount at risk, Rate Class(es) or Issue Age --
only the method of funding the Accumulation Value under the Policy will be
affected. See "Death Benefit," "Accumulation Value" and Appendix A, "The Fixed
Account."
If you transfer all of the Variable Accumulation Value from the Variable
Account to the Fixed Account and indicate that you are making this transfer in
exercise of your Conversion Right, we will automatically
35
<PAGE> 39
credit all future premium payments on the policy to the Fixed Account unless you
request a different allocation.
ADDITIONAL INFORMATION ON THE INVESTMENTS OF THE VARIABLE ACCOUNT
INVESTMENT LIMITS
Although the Variable Account currently consists of 34 investment options,
we currently only permit you to participate in a maximum of 17 investment
options over the lifetime of your Policy. You do not have to choose your
investment options in advance, but once you participate in the 17th Fund since
your Policy was issued, you would only be able to transfer within those 17 Funds
already used and which are still available.
The Fund shares may be available to fund benefits under both variable
annuity and variable life contracts and policies. This could result in an
irreconcilable conflict between the interests of the holders of the different
types of variable contracts. The Funds have advised us that they will monitor
for such conflicts and will promptly provide us with information regarding any
such conflicts should they arise or become imminent, and we will promptly advise
the Funds if we become aware of any such conflicts. If any such material
irreconcilable conflict arises, we will arrange to eliminate and remedy such
conflict up to and including establishing a new management investment company
and segregating the assets underlying the variable policies and contracts at no
cost to the holders of the policies and contracts.
There also is a possibility that one Fund might become liable for any
misstatement, inaccuracy or incomplete disclosure in another Fund's prospectus.
The Funds distribute dividends and capital gains. However, we automatically
reinvest distributions in additional Fund shares, at net asset value. The
Sub-Account receives the distributions which are then reflected in the Unit
Value of that Sub-Account. See "Accumulation Value."
ReliaStar has entered into service arrangements with the managers or
distributors of certain of the Funds. Under these arrangements, ReliaStar or its
affiliates may receive compensation from affiliates of the Funds. This
compensation is for providing administrative, recordkeeping, distribution and
other services to the Funds or their affiliates. Such compensation is paid based
upon assets invested in the particular Funds, or based on the aggregated net
asset goals. Payments of such amounts by an affiliate or affiliates of the Funds
do not increase the fees paid by the Funds or their shareholders. The percentage
paid may vary from one Fund to another.
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS
We reserve the right, subject to compliance with applicable law, to make
additions to, deletions from, or substitutions for the shares that are held by
the Variable Account or that the Variable Account may purchase.
- We reserve the right to establish additional Sub-Accounts of the Variable
Account, each of which would invest in a new Fund, or in shares of
another investment company, with a specified investment objective. We may
establish new Sub-Accounts when, in our sole discretion, marketing needs
or investment conditions warrant, and we will make any new Sub-Accounts
available to existing Policy owners on a basis we determine.
- We may eliminate one or more Sub-Accounts, or prohibit additional new
premium or transfers into a Sub-Account, if, in our sole discretion,
marketing, tax, regulatory requirements or investment conditions warrant.
- We reserve the right to eliminate the shares of any of the Funds and to
substitute shares of another Fund or of another open-end, registered
investment company. We will not substitute any shares attributable to
your interest in a Sub-Account of the Variable Account without notice and
prior approval of the SEC, to the extent required by the Investment
Company Act of 1940 or other applicable law.
36
<PAGE> 40
Nothing contained herein shall prevent the Variable Account from:
- Purchasing other securities of other Funds or classes of policies,
- Permitting a conversion between Funds or classes of policies on the basis
of requests made by Policy owners, or
- Substituting the shares of one fund for shares of another fund in the
event of a merger of funds or similar transaction.
In the event of any such substitution, deletion or change, we may
appropriate changes in this and other policies to reflect such substitution,
deletion or change. If you allocated all or a portion of your investments to any
of the current funds that are being substituted for or deleted, you may transfer
the portion of the Accumulation Value affected without paying a transfer charge.
If we deem it to be in the best interests of persons having voting rights
under the Policies, we may:
- operate the Variable Account as a management company under the 1940 Act,
- deregister the Variable Account under the 1940 Act in the event such
registration is no longer required, or
- combine the Variable Account with our other separate accounts.
VOTING RIGHTS
You have the right to instruct us how to vote the Fund shares attributable
to the Policy at regular meetings and special meetings of the Funds. We will
vote the Fund shares held in Sub-Accounts according to the instructions
received, as long as:
- The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940; and
- The Variable Account's assets are invested in Fund shares.
If we determine that, because of applicable law or regulation, we do not
have to vote according to the voting instructions received, we will vote the
Fund shares at our discretion.
All persons entitled to voting rights and the number of votes they may cast
are determined as of a record date, selected by us, not more than 90 days before
the meeting of the Fund. All Fund proxy materials and appropriate forms used to
give voting instructions will be sent to persons having voting interests.
We will vote any Fund shares held in the Variable Account for which we do
not receive timely voting instructions, or which are not attributable to Policy
owners, in proportion to the instructions received from all Policy owners having
a voting interest in the Fund. Any Fund shares held by us or any of our
affiliates in general accounts will, for voting purposes, be allocated to all
separate accounts having voting interests in the Fund in proportion to each
account's voting interest in the respective Fund, and will be voted in the same
manner as are the respective account's votes.
Owning the Policy does not give you the right to vote at meetings of our
stockholders.
DISREGARDING VOTING INSTRUCTIONS. We may, when required by state insurance
regulatory authorities, disregard voting instructions if the instructions
require that the shares be voted so as to cause a change in the
subclassification or investment objective of any Fund or to approve or
disapprove an investment advisory contract for any Fund. In addition, we may
disregard voting instructions in favor of changes initiated by a Policy owner in
the investment policy or the investment adviser of any Fund if we reasonably
disapprove of such changes. We would disapprove a change only if the proposed
change is contrary to state law or prohibited by state regulatory authorities,
or we determine that the change would have an adverse effect on the Variable
Account in that the proposed investment policy for a Fund may result in
speculative or unsound investments.
37
<PAGE> 41
In the event we do disregard voting instructions, we will include a summary of
that action and the reasons for such action in the next annual report to owners.
BENEFITS AT AGE 95
If the Insured is living at Age 95 and the Policy is in force, the Cash
Surrender Value of the Policy will automatically be applied to purchase single
premium paid-up life insurance, unless you notify us in writing on or before the
Insured's attained Age 95 that the Cash Surrender Value should be paid in cash.
While the Cash Surrender Value of the new paid-up policy will be the same as
this Policy, the face amount of the new policy will be whatever the single
premium will purchase.
GENERAL PROVISIONS
OWNERSHIP
While the Insured is alive, subject to the Policy's provisions you may:
- Change the amount and frequency of premium payments.
- Change the allocation of premiums.
- Change the Death Benefit Option.
- Change the Face Amount.
- Make transfers between accounts.
- Surrender the Policy for cash.
- Make a partial withdrawal for cash.
- Receive a cash loan.
- Assign the Policy as collateral.
- Change the beneficiary.
- Transfer ownership of the Policy.
- Enjoy any other rights the Policy allows.
PROCEEDS
At the Insured's death, the proceeds payable include the Death Benefit then
in force:
- Plus any additional amounts provided by rider on the life of the Insured;
- Plus any Policy loan interest that we have collected but not earned;
- Minus any Loan Amount; and
- Minus any unpaid Monthly Deductions.
BENEFICIARY
You may name one or more beneficiaries on the application when you apply
for the Policy. You may later change beneficiaries by written request. You may
also name a beneficiary whom you cannot change without his or her consent
(irrevocable beneficiary). If no beneficiary is surviving when the Insured dies,
we will pay the Death Benefit to you, if surviving, or otherwise to your estate.
38
<PAGE> 42
POSTPONEMENT OF PAYMENTS
We generally make payments from the Variable Account for Death Benefits,
cash surrender, partial withdrawal, or loans within seven days after we receive
all the documents required for the payments.
We may, however, delay making a payment when we are not able to determine
the Variable Accumulation Value because (1) the New York Stock Exchange is
closed, other than customary weekend or holiday closings, or the SEC restricts
trading on the New York Stock Exchange, (2) the SEC by order permits
postponement for the protection of Policyholders, or (3) the SEC determines that
an emergency exists, which makes disposing of securities not reasonably
practicable, or which makes it not reasonably practicable to determine the value
of the Variable Account's net assets. We may also postpone transfers and
allocations to and against any Sub-Account of the Variable Account under these
circumstances.
We may delay any of the payments that we make from the Fixed Account up to
six months from the date we receive the documents required. We will pay interest
at the same rate we are currently paying on proceeds at death from the date of
the request to the date of payment if we delay payment more than 10 days. We
will not credit any additional interest to any delayed payments. The time a
payment from the Fixed Account may be delayed and the rate of interest paid on
such amounts may vary among states.
SETTLEMENT OPTIONS
Settlement Options are ways you can choose to have the Policy's proceeds
paid. These options apply to proceeds paid:
- At the Insured's death.
- On total surrender of the Policy.
We pay the proceeds to one or more payees. We may pay the proceeds in a
lump sum or we may apply the proceeds to one of the following Settlement
Options. You may request that we use a combination of Options. You must apply at
least $2,500 to any option for each payee under that Option. Under an
installment Option, each payment must be at least $25. We may adjust the
interval to make each payment at least $25.
Proceeds applied to any Option no longer earn interest at the rate applied
to the Fixed Account or participate in the investment performance of the Funds.
Option 1 -- Proceeds are left with us to earn interest. Withdrawals and any
changes are subject to our approval.
Option 2 -- Proceeds and interest are paid in equal installments of a
specified amount until the proceeds and interest are all paid.
Option 3 -- Proceeds and interest are paid in equal installments for a
specified period until the proceeds and interest are all paid.
Option 4 -- The proceeds provide an annuity payment with a specified number
of months "certain." The payments are continued for the life of
the primary payee. If the primary payee dies before the certain
period is over, the remaining payments are paid to a contingent
payee.
Option 5 -- The proceeds provide a life income for two payees. When one
payee dies, the surviving payee receives two-thirds of the
amount of the joint monthly payment for life.
Option 6 -- The proceeds are used to provide an annuity based on the rates
in effect when the proceeds are applied. We do not apply this
Option if a similar option would be more favorable to the payee
at that time.
INTEREST ON SETTLEMENT OPTIONS. We base the interest rate for proceeds
applied under Options 1 and 2 on the interest rate we declare on funds that we
consider to be in the same classification based on the Option, restrictions on
withdrawal, and other factors. The interest rate will never be less than an
effective annual rate of 3.50%.
39
<PAGE> 43
In determining amounts we pay under Options 3 and 4, we assume interest at
an effective annual rate of 3.50%. Also, for Option 3 and "certain" periods
under Option 4, we credit any excess interest we may declare on funds that we
consider to be in the same classification based on the Option, restrictions on
withdrawal, and other factors.
INCONTESTABILITY
After the Policy has been in force during the Insured's lifetime for two
years from the Policy's Issue Date, we cannot claim the Policy is void or refuse
to pay any proceeds unless the Policy has lapsed.
If you make a Face Amount increase or a premium payment which requires
proof of insurability, the corresponding Death Benefit increase has its own
two-year contestable period measured from the date of the increase.
If the Policy is reinstated, we measure the contestable period from the
date of reinstatement with respect to statements made on the application for
reinstatement.
MISSTATEMENT OF AGE AND SEX
If the Insured's Age or sex or both are misstated (except where unisex
rates apply), the Death Benefit will be the amount that the most recent cost of
insurance would purchase using the current cost of insurance rate for the
correct Age and sex.
SUICIDE
If the Insured commits suicide within two years of the Policy's Issue Date,
we do not pay the Death Benefit. Instead, we refund all premiums paid for the
Policy and any attached riders, minus any Loan Amounts and partial withdrawals.
If you make a Face Amount increase or a premium payment which requires
proof of insurability, the corresponding Death Benefit increase has its own
two-year suicide limitation for the proceeds associated with that increase. If
the Insured commits suicide within two years of the effective date of the
increase, we pay the Death Benefit prior to the increase and refund the cost of
insurance for that increase.
TERMINATION
The Policy terminates when any of the following occurs:
- The Policy lapses. See "Policy Lapse and Reinstatement."
- The Insured dies.
- You surrender the Policy for its Cash Surrender Value.
- We amend the Policy according to the amendment provision described below
and you do not accept the amendment.
AMENDMENT
We reserve the right to amend the Policy, in order to include any future
changes relating to the following:
- Any SEC rulings and regulations.
- The Policy's qualification for treatment as a life insurance policy
under the following:
-- The Code.
-- Internal Revenue Service rulings and regulations.
-- Any requirements imposed by the Internal Revenue Service.
40
<PAGE> 44
REPORTS
ANNUAL STATEMENT. We will send you an Annual Statement once each year free
of charge, showing the Face Amount, Death Benefit, Accumulation Value, Cash
Surrender Value, Loan Amount, premiums paid, Planned Periodic Premiums, interest
credits, partial withdrawals, transfers, and charges since the last statement.
Additional statements are available upon request. We may make a charge not
to exceed $50.00 for each additional Annual Statement you request.
PROJECTION REPORT. Upon request, we will provide you a report projecting
future results based on the Death Benefit Option you specify, the Planned
Periodic Premiums you specify, the Accumulation Value of your Policy at the end
of the prior Policy Year. We may make a charge not to exceed $50.00 for each
Projection Report you request.
OTHER REPORTS. The Company will mail to you at your last known address of
record at least annually a report containing such information as may be required
by any applicable law. To reduce expenses, only one copy of most financial
reports and prospectuses will be mailed to your household, even if you or other
persons in your household have more than one contract issued by ReliaStar Life
Insurance Company of New York or an affiliate. Call 1-800-456-6965 if you need
additional copies of financial reports, prospectuses, historical account
information, or annual or semi-annual reports, or if you would like to receive
one copy for each contract in all future mailings.
DIVIDENDS
The Policy does not entitle you to participate in our surplus. We do not
pay you dividends under the Policy.
The Sub-Account receives any dividends paid by the related Fund. Any such
dividend is credited to you through the calculation of the Sub-Account's daily
Unit Value.
COLLATERAL ASSIGNMENT
You may assign the benefits of the Policy as collateral for a debt. This
limits your rights to the Cash Surrender Value and the beneficiary's rights to
the proceeds. An assignment is not binding on us until we receive written
notice.
OPTIONAL INSURANCE BENEFITS
The Policy can include additional benefits, in the form of riders to the
Policy, if our requirements for issuing such benefits are met. We currently
offer the following benefit riders:
ACCELERATED BENEFIT RIDER. Under certain circumstances we may pay a part of
the Death Benefit to you when the Insured has been diagnosed as having a
terminal illness. See "Accelerated Benefit Rider."
ACCIDENTAL DEATH BENEFIT RIDER. Provides an additional benefit if the
Insured dies from an accidental injury.
ADDITIONAL INSURED RIDER. Provides a 10 year, guaranteed level premium and
level term coverage for the Insured, the Insured's spouse, or a child of the
Insured.
WAIVER OF MONTHLY DEDUCTION RIDER. The Monthly Deduction for the Policy is
waived while the Insured is totally disabled under the terms of the rider.
COST OF LIVING INCREASE RIDER. Provides optional increases in Face Amount
on the life of the Insured every two years based on the cost of living without
evidence of insurability.
TOTAL DISABILITY SPECIFIED PREMIUM RIDER. Contributes a specified amount of
premium to the Policy each month while the Insured is totally disabled under the
terms of the rider.
41
<PAGE> 45
FEDERAL TAX MATTERS
INTRODUCTION
The following summary provides a general description of the Federal income
tax considerations associated with the Policy and does not purport to be
complete or to cover all tax situations. This discussion is not intended as tax
advice. Counsel or other competent tax advisors should be consulted for more
complete information. This discussion is based upon our understanding of the
present Federal income tax laws. No representation is made as to the likelihood
of continuation of the present Federal income tax laws or as to how they may be
interpreted by the Internal Revenue Service (the "IRS").
Any qualified plan contemplating the purchase of a life policy should
consult a tax advisor.
TAX STATUS OF THE POLICY
In order to qualify as a life insurance contract for Federal income tax
purposes and to receive the tax treatment normally accorded life insurance
contracts under Federal tax law, a Policy must satisfy certain requirements
which are set forth in the Internal Revenue Code. Guidance as to how these
requirements are to be applied is limited. Nevertheless, the Company believes
that a Policy issued on the basis of a standard risk class should satisfy the
applicable requirements. There is less guidance with respect to Policies issued
on a substandard basis (i.e., a premium class involving higher than standard
mortality risk), and it is not clear whether such a Policy would satisfy the
applicable requirements, particularly if the owner pays the full amount of
premiums permitted under the Policy. If it is subsequently determined that a
Policy does not satisfy the applicable requirements, the Company may take
appropriate steps to bring the Policy into compliance with such requirements and
reserves the right to restrict Policy transactions in order to do so.
In certain circumstances, owners of variable life insurance contracts have
been considered for Federal income tax purposes to be the owners of the assets
of the variable account supporting their policies due to their ability to
exercise investment control over these assets. Where this is the case, the
Policy owners have been currently taxed on income and gains attributable to the
variable account assets. There is little guidance in this area, and some
features of the Policies, such as the flexibility of an owner to allocate
premium payments and Policy Accumulation Values, have not been explicitly
addressed in published rulings. While the Company believes that the Policies do
not give owners investment control over Variable Account assets, the Company
reserves the right to modify the Policies as necessary to prevent an owner from
being treated as the owner of the Variable Account assets supporting the Policy.
In addition, the Code requires that the investments of the Variable Account
be "adequately diversified" in order for the Policies to be treated as life
insurance contracts for Federal income tax purposes. It is intended that the
Variable Account, through the Funds, will satisfy these diversification
requirements.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
TAX TREATMENT OF POLICY BENEFITS
IN GENERAL. The Company believes that the Death Benefit under a Policy
should be excludible from the gross income of the Beneficiary. Federal, state
and local transfer, and other tax consequences of ownership or receipt of Policy
proceeds depend on the circumstances of each owner or beneficiary. A tax advisor
should be consulted on these consequences.
Generally, the owner will not be deemed to be in constructive receipt of
the Policy Accumulation Value until there is a distribution. When distributions
from a Policy occur, including payments arising from any maturity benefits, or
when loans are taken out from or secured by (e.g., by assignment) a Policy, the
tax consequences depend on whether the Policy is classified as a "Modified
Endowment Contract."
MODIFIED ENDOWMENT CONTRACTS. Under the Internal Revenue Code, certain life
insurance contracts are classified as "Modified Endowment Contracts," with less
favorable tax treatment than other life insurance
42
<PAGE> 46
contracts. Due to the flexibility of the Policies as to premiums and benefits,
the individual circumstances of each Policy will determine whether it is
classified as a Modified Endowment Contract. The rules are too complex to be
summarized here, but generally depend on the amount of premiums paid during the
first seven Policy Years. Certain changes in a Policy after it is issued could
also cause it to be classified as a Modified Endowment Contract. A current or
prospective owner should consult with a competent advisor to determine whether a
Policy transaction will cause the Policy to be classified as a Modified
Endowment Contract. The Company will monitor the Policies, however, and will
attempt to notify an owner on a timely basis if it believes that such owner's
Policy is in jeopardy of becoming a Modified Endowment Contract.
DISTRIBUTIONS FROM MODIFIED ENDOWMENT CONTRACTS. Policies classified as
Modified Endowment Contracts are subject to the following tax rules:
(1) All distributions, including distributions upon surrender and
withdrawals, will be treated as ordinary income subject to tax up to
an amount equal to the excess (if any) of the unloaned Policy
Accumulation Value (Cash Surrender Value for surrenders) immediately
before the distribution plus prior distributions over the Policy
owner's total investment in the Policy at that time. "Total investment
in the Policy" means the aggregate amount on any premiums or other
considerations paid for a Policy, plus any previously taxed
distributions, minus any credited dividends.
(2) Loans taken from or secured by (e.g., by assignment) such a Policy are
treated as distributions and taxed accordingly.
(3) A 10 percent additional income tax is imposed on the amount included
in income except where distribution is made when the Policy owner has
attained age 59 1/2 or is disabled, or where the distribution is part
of a series of substantially equal periodic payments for the life (or
life expectancy) of the Policy owner or the joint lives (or joint life
expectancies) of the Policy owner and the Policy owner's beneficiary
or designated beneficiary.
DISTRIBUTIONS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT
CONTRACTS. Distributions from a Policy that is not a Modified Endowment Contract
are generally treated first as a recovery of a Policy owner's investment in the
Policy and only after the recovery of all investments in the Policy as taxable
income. However, certain distributions which must be made in order to enable the
Policy to continue to qualify as a life insurance contract for Federal income
tax purposes if Policy benefits are reduced during the first 15 Policy Years may
be treated in whole or in part as ordinary income subject to tax.
Loans from or secured by a Policy that is not a Modified Endowment Contract
are not treated as distributions, except that upon a lapse of a Policy any
outstanding Policy loan will be deemed to be distributed.
Finally, neither distributions from nor loans from or secured by a Policy
that is not a modified Endowment Contract are subject to the 10 percent
additional tax.
POLICY LOANS. In general, interest on a loan from a Policy will not be
deductible. Before taking out a Policy loan, a Policy owner should consult a tax
advisor as to the tax consequences.
MULTIPLE POLICIES. All Modified Endowment Contracts that we (or our
affiliates) issue to the same Policy owner during any calendar year are treated
as one Modified Endowment Contract for purposes of determining the amount
includible in the Policy owner's income when a taxable distribution occurs.
TAXATION OF RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
We do not initially expect to incur any income tax burden upon the earnings
or the realized capital gains attributable to the Variable Account. Based on
this expectation, we currently make no charge to the Variable Account for
Federal income taxes which may be attributable to the Account. If, however, we
determine that we may incur such tax burden, we may assess a charge for such
burden from the Variable Account.
We may also incur state and local taxes, in addition to premium taxes, in
several states. At present these taxes are not significant. If there is a
material change in state or local tax laws, we may make charges for such taxes,
if any, attributable to the Variable Account.
43
<PAGE> 47
POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative changes is uncertain, there is
always the possibility that the tax treatment of the Policy could change by
legislation or other means. Moreover, it is also possible that any change could
be retroactive (that is, effective prior to the date of the change). You should
consult a tax advisor with respect to legislative developments and their effect
on the Policy.
OTHER CONSIDERATIONS
The foregoing discussion is general and is not intended as tax advice. Any
person concerned about these tax implications should consult a competent tax
advisor. This discussion is based on our understanding of the present Federal
income tax laws as they are currently interpreted by the IRS. We make no
representation as to the likelihood of continuation of these current laws and
interpretations. In addition, the foregoing discussion is not exhaustive and
special rules not described in this Prospectus may be applicable in certain
situations. Moreover, we have made no attempt to consider any applicable state
or other tax laws.
LEGAL DEVELOPMENTS REGARDING EMPLOYMENT-RELATED BENEFIT PLANS
The Policy is based on actuarial tables which distinguish between men and
women and therefore provide different benefits to men and women of the same Age.
Employers and employee organizations should consider, in consultation with legal
counsel, the impact of the Supreme Court decision of July 6, 1983 in Arizona
Governing Committee v. Norris. That decision stated that optional annuity
benefits provided under an employee's deferred compensation plan could not,
under Title VII of the Civil Rights Act of 1964, vary between men and women on
the basis of sex. Employers and employee organizations should also consider, in
consultation with legal counsel, the impact of Title VII generally, and
comparable state laws that may be applicable, on any employment-related
insurance or benefit plan for which a Policy may be purchased.
Because of the Norris decision, the charges under the Policy that vary
depending on sex may in some cases not vary on the basis of the Insured's sex.
Unisex rates to be provided by us will apply, if requested on the application,
for tax-qualified plans and those plans where an employer believes that the
Norris decision applies. In this case, references made to the mortality tables
applicable to this Policy are to be disregarded and substituted with an 60% male
40% female blend of the 1980 Commissioner's Standard Ordinary Smoker and
Non-Smoker Mortality Tables, Age Last Birthday.
DISTRIBUTION OF THE POLICIES
We intend to sell the policies in all jurisdictions where we are licensed.
The Policies will be distributed by the general distributor, Washington
Square Securities, Inc. ("WSSI"), a Minnesota corporation, which is an affiliate
of ours. WSSI is a securities broker-dealer registered with the SEC and is a
member of the National Association of Securities Dealers, Inc. ("NASD"). It is
primarily a mutual funds dealer and has dealer agreements under which it markets
shares of many mutual funds. It also markets limited partnerships and other
tax-sheltered or tax-deferred investments, and acts as general distributor
(principal underwriter) for variable annuity products issued by us. The Policies
may also be sold through other broker-dealers authorized by WSSI and applicable
law to do so. Registered representatives of such broker-dealers may be paid on a
different basis than described below.
The Policies will be sold by licensed insurance agents who are also
registered representatives of broker-dealers registered with the SEC under the
Securities Exchange Act of 1934 who are members of the NASD. Registered
representatives who sell the Policies will receive commissions based on a
commission schedule. In the first Policy Year, commissions generally will be no
more than 55% of the premiums paid up to the annualized Minimum Monthly Premium,
plus 3% of any additional premium. In any subsequent Policy Year, commissions
generally will be 3% of premiums paid in that year. We will pay corresponding
commissions upon a requested increase in Face Amount. In addition, we may pay a
commission of .25% of the average monthly Accumulation Value during each Policy
Year. Further, registered representatives may be eligible to receive certain
overrides, and other benefits based on the amount of earned commissions.
44
<PAGE> 48
For all Policies which use the ReliaStar Life Insurance Company of New York
Variable Life Separate Account I, the aggregate amount paid to WSSI under our
Distribution Agreement was $1,345,813 in 1999, $837,517 in 1998 and $49,373 in
1997.
MANAGEMENT
The following is a list of current directors and executive officers of the
Company, their principal occupation and business experience.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
DIRECTORS AND OFFICERS AND BUSINESS EXPERIENCE
---------------------- ------------------------------------------------------------
<S> <C>
William D. Bonneville(3) Senior Vice President and Chief Administrative Officer of
ReliaStar Life Insurance Company of New York since 1998;
Vice President of ReliaStar Life Insurance Company of New
York (formerly known as ReliaStar Bankers Security Life
Insurance Company) from 1996 to 1998; Vice President of
North Atlantic Life Insurance Company from 1992 to 1995
until its merger into ReliaStar Life Insurance Company of
New York.
Stephen A. Carb(1) Partner of Carb, Luria, Glassner, Cook & Kufeld LLP (New
York law firm) since 1962.
James G. Cochran(3) Executive Vice President of ReliaStar Life Insurance Company
of New York since 1996; Vice President of ReliaStar Life
Insurance Company in 1999; Senior Vice President of
ReliaStar United Services Life Insurance Company from 1990
to 1996 until its merger into ReliaStar Life Insurance
Company.
Richard R. Crowl(2) Senior Vice President, General Counsel and Secretary of
ReliaStar Financial Corp. since 1996; Senior Vice President
and General Counsel of Security-Connecticut Life Insurance
Company since 1997; Senior Vice President and General
Counsel of ReliaStar Life Insurance Company, Northern Life
Insurance Company, and ReliaStar Life Insurance Company of
New York since 1996; Senior Vice President and General
Counsel of ReliaStar United Services Life Insurance Company
from 1996 to 1998 at which time this company merged into
ReliaStar Life Insurance Company; Senior Vice President and
General Counsel of ReliaStar Investment Research, Inc.
(formerly known as Washington Square Advisers, Inc.) since
1986; Vice President and Associate General Counsel of
ReliaStar Financial Corp. from 1989 to 1996; Vice President
and Associate General Counsel of ReliaStar Life Insurance
Company from 1985 to 1996; Director and Senior Vice
President of various subsidiaries of ReliaStar Financial
Corp.
James R. Gelder(2) President and Chief Executive Officer of ReliaStar Life
Insurance Company of New York since 1999; Executive Vice
President of ReliaStar Life Insurance Company of New York
from 1998 to 1998; President and Chief Executive Officer of
Security-Connecticut Life Insurance Company since 1998;
Executive Vice President and Chief Operating Officer of
Security-Connecticut Life Insurance Company from 1997 to
1998; Vice President of ReliaStar Life Insurance Company
from 1994; Director and Officer of various subsidiaries of
ReliaStar Financial Corp.
</TABLE>
45
<PAGE> 49
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
DIRECTORS AND OFFICERS AND BUSINESS EXPERIENCE
---------------------- ------------------------------------------------------------
<S> <C>
Ambassador Ulric Haynes,
Jr.(1) Dean of the School of Business and Executive Dean for
University International Relations of Hofstra University
since 1991; Director of DYNAX Solutions, Inc. from 2000 to
present; Director of INNCOM International Inc. from 1999 to
present; Director of Pall Corporation from 1994 to present;
Director of HSBC USA Inc. (formerly Marine Midland Bank)
from 1969 to present.
Wayne R. Huneke(2) Senior Executive Vice President of ReliaStar Financial Corp.
and ReliaStar Life Insurance Company since 1999; Senior Vice
President of ReliaStar Financial Corp. and ReliaStar Life
Insurance Company from 1994 to 1999; Chief Financial Officer
and Treasurer of ReliaStar Financial Corp. and ReliaStar
Life Insurance Company from 1994 to 1997; Director and
Officer of various subsidiaries of ReliaStar Financial Corp.
Mark S. Jordahl(2) President and Chief Executive Officer of ReliaStar
Investment Research, Inc. since 1998; Senior Vice President
and Chief Investment Officer of ReliaStar Life Insurance
Company and ReliaStar Financial Corp. since 1998; Senior
Vice President of Security-Connecticut Life Insurance
Company since 1998; Vice President of ReliaStar Life
Insurance Company and ReliaStar Financial Corp from 1987 to
1998; Director and Officer of various subsidiaries of
ReliaStar Financial Corp.
Kenneth U. Kuk(2) Executive Vice President of ReliaStar Financial Corp. and
ReliaStar Life Insurance Company since 1999; Senior Vice
President of ReliaStar Financial Corp. and ReliaStar Life
Insurance Company from 1996 to 1999; Vice President of
ReliaStar Life Insurance Company from 1996 to 1998; Vice
President of ReliaStar Financial Corp. from 1991 to 1998;
President of Washington Square Advisers, Inc. from 1995 to
1998; Chairman of ReliaStar Mortgage Corporation from 1988
to 1998; Director and Officer of various subsidiaries of
ReliaStar Financial Corp.
James R. Miller(2) Senior Vice President, Chief Financial Officer and Treasurer
of ReliaStar Financial Corp. and ReliaStar Life insurance
Company since 1997; Executive Vice President and Chief
Operating Officer of Northern Life Insurance Company from
1992 to 1997; Vice President of ReliaStar Financial Corp.
from 1985 to 1992; Director and Officer of various
subsidiaries of ReliaStar Financial Corp.
Fioravante G. Perrotta(1) Retired 1996; Formerly Senior Partner of Rogers & Wells (New
York law firm) since 1970.
Roger D. Roenfeldt(3) Executive Vice President and Chief Operating Officer of
ReliaStar Life Insurance Company of New York since 1997;
Executive Vice President and Chief Operating Officer of
Lincoln Security Life Insurance Company from 1996 to 1997
until its merger into ReliaStar Life Insurance Company of
New York; President and Chief Executive Officer of The R.E.
Lee Group/US, Inc. from 1991 to 1996.
</TABLE>
46
<PAGE> 50
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
DIRECTORS AND OFFICERS AND BUSINESS EXPERIENCE
---------------------- ------------------------------------------------------------
<S> <C>
Robert C. Salipante(2) Chairman of Security-Connecticut Life Insurance Company
since 2000; President and Chief Operating Officer of
ReliaStar Financial Corp. and ReliaStar Life Insurance
Company since 1999; Senior Vice President of ReliaStar
Financial Corp. and ReliaStar Life Insurance Company from
1996 to 1999; Vice Chairman of ReliaStar Life Insurance
Company of New York since 1999; President and Chief
Executive Officer of ReliaStar Life Insurance Company of New
York from 1998 to 1999; Senior Vice President of ReliaStar
Financial Corp. from 1994 to 1996; Senior Vice President and
Chief Financial Officer of ReliaStar Financial Corp. from
1992 to 1994; Director and Officer of various subsidiaries
of ReliaStar Financial Corp.
John G. Turner(2) Chairman and Chief Executive Officer of ReliaStar Financial
Corp. and ReliaStar Life Insurance Company since 1993;
Chairman of ReliaStar United Services Life Insurance Company
from 1995 until its merger with ReliaStar Life Insurance
Company in 1998; Chairman of ReliaStar Life Insurance
Company of New York since 1995; Chairman of Northern Life
Insurance Company since 1992; Director and Officer of
various subsidiaries of ReliaStar Financial Corp.
Charles B. Updike(1) Partner of Schoeman, Marsh & Updike (New York law firm)
since 1976.
Ross M. Weale(1) President of Waccabuc Enterprise, Inc. (New York management
consulting firm) since 1996; President and Chief Executive
Officer of Country Bank (financial institution) from 1986 to
1996.
</TABLE>
- ---------------
(1) Director of ReliaStar Life Insurance Company of New York
(2) Director and Officer of ReliaStar Life Insurance Company of New York
(3) Officer of ReliaStar Life Insurance Company of New York
The Executive Committee of our Board of Directors consists of Directors Turner,
Salipante, Huneke, Updike, and Weale.
The Compliance Committee of our Board of Directors consists of Directors Weale,
Carb, Conley, Haynes, Perrotta and Updike.
The Compliance Committee of our Board of Directors consists of Directors Weale,
Carb, Conley, Haynes, Perrotta, and Updike.
47
<PAGE> 51
The following is a list of the current directors and executive officers of
the principal underwriter and their business addresses:
<TABLE>
<CAPTION>
NAME AND PRINCIPAL
BUSINESS ADDRESS
- ------------------ POSITION AND OFFICES
<S> <C>
John H. Flittie* Director, Chairman
Anne W. Dowdle* Director
Michael J. Dubes Director
1501 Fourth Avenue
Seattle, Washington 98111
James R. Gelder Director
20 Security Drive
Avon, Connecticut 06001
Wayne R. Huneke* Director
Robert C. Salipante* Director
Jeffrey A. Montgomery* President and Chief Executive Officer
Kenneth S. Cameranesi* Executive Vice President and Chief Operations Officer
Gene Grayson* Vice President, National Sales and Marketing
David Braun* Assistant Vice President
Karin Callanan* Assistant Vice President
Susan M. Bergen* Secretary
Margaret B. Wall* Treasurer and Chief Financial Officer
Loralee A. Renelt* Assistant Secretary
Allen Kidd Assistant Secretary
222 North Arch Road
Richmond, Virginia 23236
</TABLE>
- ---------------
* 20 Washington Avenue South, Minneapolis, Minnesota 55401
STATE REGULATION
We are subject to the laws of the State of New York governing insurance
companies and to regulation and supervision by the Insurance Department of the
State of New York. We file an annual statement in a prescribed form with the
Insurance Department each year, and in each state we do business, covering our
operations for the preceding year and our financial condition as of the end of
that year. Our books and accounts are subject to review by the Insurance
Department and a full examination of our operations is conducted periodically
(usually every three years) by the National Association of Insurance
Commissioners. This regulation does not, however, involve supervision or
management of our investment practices or policies.
In addition, we are subject to regulation under the insurance laws of other
jurisdictions in which we operate.
LEGAL PROCEEDINGS
The Variable Account is not a party to any pending legal proceedings. The
Company is a defendant in various lawsuits in connection with the normal conduct
of its insurance operations. Some of the claims seek to be granted class action
status and many of the claims seek both compensatory and punitive damages. In
the opinion of management, the ultimate resolution of such litigation will not
have a material adverse impact to the financial position of the Company.
48
<PAGE> 52
BONDING ARRANGEMENTS
The Company maintains an insurance company blanket bond providing
$25,000,000 coverage for our officers and employees and those of Washington
Square Securities, Inc., (WSSI), subject to a $500,000 deductible.
LEGAL MATTERS
Legal matters in connection with the Variable Account and the Policy
described in this Prospectus have been passed upon by Gregory A. Olson, Esquire,
Attorney for the Company.
EXPERTS
The financial statements of ReliaStar Life Insurance Company of New York
Variable Life Separate Account I as of and for the years ended December 31,
1999, and December 31, 1998 and for the period from August 8, 1997 (date of
inception) to December 31, 1997 and the annual financial statements of ReliaStar
Life Insurance Company of New York as of December 31, 1999 and for the two years
then ended included in this Prospectus have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their reports which are included herein,
and have been so included in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Steven
P. West, F.S.A., M.A.A.A., as stated in the opinion filed as an exhibit to the
Registration Statement.
REGISTRATION STATEMENT CONTAINS FURTHER INFORMATION
A Registration Statement has been filed with the SEC under the Securities
Act of 1933 with respect to the Policies. This Prospectus does not contain all
information included in the Registration Statement, its amendments and exhibits.
For further information concerning the Variable Account, the Funds, the Policies
and us, please refer to the Registration Statement.
Statements in this Prospectus concerning provisions of the Policy and other
legal documents are summaries. Please refer to the documents as filed with the
SEC for a complete statement of the provisions of those documents.
Information may be obtained from the SEC's principal office in Washington,
D.C., for a fee it prescribes, or examined there without charge.
FINANCIAL STATEMENTS
The financial statements for the Variable Account reflect the operations of
the Variable Account as of and for the years ended December 31, 1999, and
December 31, 1998 and for the period from August 8, 1997 (date of inception) to
December 31, 1997. The financial statements are audited. The periods covered are
not necessarily indicative of the longer term performance of the assets held in
the Variable Account.
The financial statements of ReliaStar Life Insurance Company of New York
which are included in this Prospectus should be distinguished from the financial
statements of the Variable Account and should be considered only as bearing upon
the ability of ReliaStar Life Insurance Company of New York to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in the Variable Account. These
financial statements are as of December 31, 1999 and for each of the two years
in the period ended December 31, 1999. The periods covered are not necessarily
indicative of the longer term performance of the Company.
49
<PAGE> 53
INDEPENDENT AUDITORS' REPORT
Board of Directors
ReliaStar Life Insurance Company of New York:
We have audited the accompanying statement of assets and liabilities of
ReliaStar Life Insurance Company of New York Variable Life Separate Account I as
of December 31, 1999 and the related statements of operations and changes in
policy owners' equity (including the individual sub-accounts which comprise the
Account) for the years ended December 31, 1999, 1998 and 1997. These financial
statements are the responsibility of the management of ReliaStar Life Insurance
Company of New York. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures include
confirmation of the securities owned as of December 31, 1999, by correspondence
with the account custodians. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective
sub-accounts constituting the ReliaStar Life Insurance Company of New York
Separate Account I as of December 31, 1999 and the results of its operations and
changes in its policy owners' equity for the years ended December 31, 1999, 1998
and 1997, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Minneapolis, Minnesota
February 18, 2000
50
<PAGE> 54
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
(In Thousands, Except Shares)
ASSETS:
Investments In Mutual Funds At Market Value:
<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
------- ------ ------------
<S> <C> <C> <C>
THE ALGER AMERICAN FUND:
Alger American Growth Portfolio........................... 7,030 $ 394 $ 453
Alger American MidCap Growth Portfolio.................... 1,866 50 60
Alger American Small Capitalization Portfolio............. 2,144 92 118
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (VIP):
VIP Equity-Income Portfolio -- IC Shares.................. 15,547 390 400
VIP Growth Portfolio -- IC Shares......................... 5,088 232 279
VIP High Income Portfolio -- IC Shares.................... 4,212 47 48
VIP Money Market Portfolio -- IC Shares................... 629,397 629 629
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (VIP II):
VIP II Contrafund Portfolio -- IC Shares.................. 17,601 419 513
VIP II Index 500 Portfolio -- IC Shares................... 5,260 752 881
VIP II Investment Grade Bond Portfolio -- IC Shares....... 4,074 49 50
JANUS ASPEN SERIES:
Aggressive Growth Portfolio............................... 6,456 254 385
Growth Portfolio.......................................... 7,392 211 249
International Growth Portfolio............................ 1,821 43 70
Worldwide Growth Portfolio................................ 10,930 358 522
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST:
AMT Limited Maturity Bond Portfolio....................... 1,187 16 16
AMT Partners Portfolio.................................... 16,757 312 329
AMT Socially Responsive Portfolio......................... 2 -- --
NORTHSTAR GALAXY TRUST:
Northstar Emerging Growth Portfolio....................... 6,112 143 179
Northstar Growth + Value Portfolio........................ 7,015 190 211
Northstar International Value Portfolio................... 4,839 65 71
Northstar Research Enhanced Index Portfolio............... 853 4 4
Northstar High Yield Bond Portfolio....................... 1,375 6 6
OCC ACCUMULATION TRUST:
Equity Portfolio.......................................... 219 8 8
Global Equity Portfolio................................... 4,674 80 77
Managed Portfolio......................................... 665 29 29
Small Cap Portfolio....................................... 1,450 34 33
PUTNAM VARIABLE TRUST:
Putnam VT Diversified Income Fund -- Class IA Shares...... 2,860 30 28
Putnam VT Growth and Income Fund -- Class IA Shares....... 9,984 276 268
Putnam VT New Opportunities Fund -- Class IA Shares....... 366 13 16
Putnam VT Voyager Fund -- Class IA Shares................. 12,579 545 833
------
TOTAL ASSETS............................................ $6,765
======
LIABILITIES AND POLICY OWNERS' EQUITY:
Due from ReliaStar Life Insurance Company of New York..... ($ 1)
Policy Owners' Equity..................................... 6,766
------
TOTAL LIABILITIES AND POLICY OWNERS' EQUITY............. $6,765
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
51
<PAGE> 55
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
ALGER AMERICAN
TOTAL ALL FUNDS GROWTH PORTFOLIO
------------------------------------------ ----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income.... $ 44 $ 6 $ -- $ -- $ -- $ --
Reinvested capital gains...... 193 16 -- 11 3 --
Administrative expenses....... (27) (7) -- (1) -- --
------------ ------------ ------------ ----------- ----------- ------------
Net investment income
(loss) and capital
gains................... 210 15 -- 10 3 --
------------ ------------ ------------ ----------- ----------- ------------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund
shares...................... 240 (8) -- 13 -- --
Increase (decrease) in
unrealized appreciation of
investments................. 856 238 -- 52 7 --
------------ ------------ ------------ ----------- ----------- ------------
Net realized and unrealized
gains (losses)............ 1,096 230 -- 65 7 --
------------ ------------ ------------ ----------- ----------- ------------
Additions (reductions) from
operations................ 1,306 245 -- 75 10 --
------------ ------------ ------------ ----------- ----------- ------------
Policy Owners' transactions:
Net premium payments.......... 3,350 2,298 122 264 45 1
Surrenders.................... (30) (1) -- (14) -- --
Transfers between funds and/or
fixed acct.................. 85 -- -- 103 2 --
Policy loans.................. (1) -- -- -- -- --
Loan collateral interest
crediting................... -- -- -- -- -- --
Death benefits................ -- -- (1) -- -- --
Cost of insurance charges..... (412) (144) (3) (26) (3) --
Monthly Expense Charge........ (36) (12) -- (3) (1) --
------------ ------------ ------------ ----------- ----------- ------------
Additions (reductions) for
policy owners'
transactions............ 2,956 2,141 118 324 43 1
------------ ------------ ------------ ----------- ----------- ------------
Net additions (reductions)
for the year/period..... 4,262 2,386 118 399 53 1
Policy Owners' Equity, beginning
of the year/period............ 2,504 118 -- 54 1 --
------------ ------------ ------------ ----------- ----------- ------------
Policy Owners' Equity, end of
the year/period............... $ 6,766 $ 2,504 $ 118 $ 453 $ 54 $ 1
============ ============ ============ =========== =========== ============
Units Outstanding, beginning of
the year...................... 147,342.662 14,226.238 -- 3,716.345 86.866 --
Units Outstanding, end of the
year.......................... 299,671.163 147,342.662 10,339.628 23,204.017 3,716.345 86.866
Net Asset Value per Unit:....... $ -- $ -- $ -- $ 19.516075 $ 14.592177 $ 9.854808
</TABLE>
The accompanying notes are an integral part of the financial statements.
52
<PAGE> 56
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
ALGER AMERICAN ALGER AMERICAN
MIDCAP GROWTH PORTFOLIO SMALL CAPITALIZATION PORTFOLIO
---------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........ $ -- $ -- $ -- $ -- $ -- $ --
Reinvested capital gains.......... 4 1 -- 6 2 --
Administrative expenses........... -- -- -- (1) -- --
----------- ----------- ------------ ----------- ----------- ------------
Net investment income (loss)
and capital gains........... 4 1 -- 5 2 --
----------- ----------- ------------ ----------- ----------- ------------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares...... -- -- -- 3 -- --
Increase (decrease) in unrealized
appreciation of investments..... 8 2 -- 22 4 --
----------- ----------- ------------ ----------- ----------- ------------
Net realized and unrealized
gains (losses)................ 8 2 -- 25 4 --
----------- ----------- ------------ ----------- ----------- ------------
Additions (reductions) from
operations.................... 12 3 -- 30 6 --
----------- ----------- ------------ ----------- ----------- ------------
Policy Owners' transactions:
Net premium payments.............. 28 20 2 64 27 5
Surrenders........................ -- -- -- (1) -- --
Transfers between funds and/or
fixed acct...................... (1) -- -- (1) 1 --
Policy loans...................... -- -- -- -- -- --
Loan collateral interest
crediting....................... -- -- -- -- -- --
Death benefits.................... -- -- -- -- -- --
Cost of insurance charges......... (3) (1) -- (9) (2) --
Monthly Expense Charge............ -- -- -- (1) -- --
----------- ----------- ------------ ----------- ----------- ------------
Additions (reductions) for
policy owners'
transactions................ 24 19 2 52 26 5
----------- ----------- ------------ ----------- ----------- ------------
Net additions (reductions) for
the year/period............. 36 22 2 82 32 5
Policy Owners' Equity, beginning of
the year/period................... 24 2 -- 37 5 --
----------- ----------- ------------ ----------- ----------- ------------
Policy Owners' Equity, end of the
year/period....................... $ 60 $ 24 $ 2 $ 119 $ 37 $ 5
=========== =========== ============ =========== =========== ============
Units Outstanding, beginning of the
year.............................. 1,885.358 206.735 -- 2,983.060 467.792 --
Units Outstanding, end of the
year.............................. 3,567.836 1,885.358 206.735 7,093.241 2,983.060 467.792
Net Asset Value per Unit:........... $ 16.879516 $ 12.802277 $ 9.825275 $ 16.687171 $ 11.635433 $ 10.071361
</TABLE>
The accompanying notes are an integral part of the financial statements.
53
<PAGE> 57
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
FIDELITY'S VIP FIDELITY'S VIP
EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO
IC SHARES IC SHARES
-------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income.......... $ 4 $ -- $ -- $ -- $ -- $ --
Reinvested capital gains............ 9 -- -- 12 -- --
Administrative expenses............. (2) (1) -- (1) (1) --
----------- ----------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains................. 11 (1) -- 11 (1) --
----------- ----------- ---------- ---------- ---------- ----------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares........ 16 -- -- 19 -- --
Increase (decrease) in unrealized
appreciation of investments....... (9) 19 -- 33 14 --
----------- ----------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)........................ 7 19 -- 52 14 --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations...................... 18 18 -- 63 13 --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................ 201 244 -- 195 99 2
Surrenders.......................... -- -- -- (1) (1) --
Transfers between funds and/or fixed
acct.............................. (41) -- -- (66) 1 --
Policy loans........................ (1) -- -- -- -- --
Loan collateral interest
crediting......................... -- -- -- -- -- --
Death benefits...................... -- -- -- -- -- --
Cost of insurance charges........... (27) (10) -- (18) (7) --
Monthly Expense Charge.............. (2) (1) -- (2) (1) --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) for
policy owners' transactions... 130 233 -- 108 91 2
----------- ----------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period............... 148 251 -- 171 104 2
Policy Owners' Equity, beginning of
the year/period..................... 251 -- -- 106 2 --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period......................... $ 399 $ 251 $ -- $ 277 $ 106 $ 2
=========== =========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................ 10,662.981 5.405 -- 4,087.116 103.336 --
Units Outstanding, end of the year.... 15,974.343 10,662.981 5.405 7,611.339 4,087.116 103.336
Net Asset Value per Unit:............. $ 25.020668 $ 23.531218 $21.080180 $36.733274 $26.727479 $19.160956
</TABLE>
The accompanying notes are an integral part of the financial statements.
54
<PAGE> 58
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
FIDELITY'S VIP FIDELITY'S VIP
HIGH INCOME PORTFOLIO MONEY MARKET PORTFOLIO
IC SHARES IC SHARES
------------------------------------ -------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 2 $ -- $ -- $ 17 $ 1 $ --
Reinvested capital gains............. -- -- -- -- -- --
Administrative expenses.............. -- -- -- (2) -- --
---------- ---------- ---------- ----------- ---------- ----------
Net investment income (loss) and
capital gains.................. 2 -- -- 15 1 --
---------- ---------- ---------- ----------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... -- 2 -- -- -- --
Increase (decrease) in unrealized
appreciation of investments........ 1 -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ----------
Net realized and unrealized gains
(losses)......................... 1 2 -- -- -- --
---------- ---------- ---------- ----------- ---------- ----------
Additions (reductions) from
operations....................... 3 2 -- 15 1 --
---------- ---------- ---------- ----------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 31 131 -- 389 77 1
Surrenders........................... -- -- -- (1) -- --
Transfers between funds and/or fixed
acct............................... 14 (126) -- 194 (7) --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (3) (1) -- (32) (5) --
Monthly Expense Charge............... (1) -- -- (2) (1) --
---------- ---------- ---------- ----------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 41 4 -- 548 64 1
---------- ---------- ---------- ----------- ---------- ----------
Net additions (reductions) for
the year/period................ 44 6 -- 563 65 1
Policy Owners' Equity, beginning of the
year/period.......................... 6 -- -- 66 1 --
---------- ---------- ---------- ----------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 50 $ 6 $ -- $ 629 $ 66 $ 1
========== ========== ========== =========== ========== ==========
Units Outstanding, beginning of the
year................................. 308.121 -- -- 5,112.620 75.083 --
Units Outstanding, end of the year..... 2,913.802 308.121 -- 46,238.678 5,112.620 75.083
Net Asset Value per Unit:.............. $16.349223 $15.116470 $15.800365 $ 13.611549 $12.941412 $12.269546
</TABLE>
The accompanying notes are an integral part of the financial statements.
55
<PAGE> 59
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
FIDELITY'S VIP II FIDELITY'S VIP II
CONTRAFUND PORTFOLIO INDEX 500 PORTFOLIO
IC SHARES IC SHARES
------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income.......... $ 1 $ -- $ -- $ 3 $ -- $ --
Reinvested capital gains............ 8 1 -- 2 -- --
Administrative expenses............. (2) (1) -- (4) (1) --
----------- ---------- ---------- ----------- ----------- ----------
Net investment income (loss) and
capital gains................. 7 -- -- 1 (1) --
----------- ---------- ---------- ----------- ----------- ----------
Realized and unrealized gains
(losses):
Net realized gains (losses) on
redemptions of fund shares........ 18 -- -- 16 1 --
Increase (decrease) in unrealized
appreciation of investments....... 57 37 -- 91 38 --
----------- ---------- ---------- ----------- ----------- ----------
Net realized and unrealized gains
(losses)........................ 75 37 -- 107 39 --
----------- ---------- ---------- ----------- ----------- ----------
Additions (reductions) from
operations...................... 82 37 -- 108 38 --
----------- ---------- ---------- ----------- ----------- ----------
Policy Owners' transactions:
Net premium payments................ 223 182 9 510 265 5
Surrenders.......................... (1) -- -- (7) -- --
Transfers between funds and/or fixed
acct.............................. 20 1 -- 46 2 --
Policy loans........................ -- -- -- -- -- --
Loan collateral interest
crediting......................... -- -- -- -- -- --
Death benefits...................... -- -- -- -- -- --
Cost of insurance charges........... (29) (8) -- (63) (17) (1)
Monthly Expense Charge.............. (2) (1) -- (5) (1) --
----------- ---------- ---------- ----------- ----------- ----------
Additions (reductions) for
policy owners' transactions... 211 174 9 481 249 4
----------- ---------- ---------- ----------- ----------- ----------
Net additions (reductions) for
the year/period............... 293 211 9 589 287 4
Policy Owners' Equity, beginning of
the year/period..................... 220 9 -- 291 4 --
----------- ---------- ---------- ----------- ----------- ----------
Policy Owners' Equity, end of the
year/period......................... $ 513 $ 220 $ 9 $ 880 $ 291 $ 4
=========== ========== ========== =========== =========== ==========
Units Outstanding, beginning of the
year................................ 9,211.711 495.110 -- 10,104.460 203.033 --
Units Outstanding, end of the year.... 17,270.199 9,211.711 495.110 25,257.361 10,104.460 203.033
Net Asset Value per Unit:............. $ 29.708780 $23.909755 $18.395120 $ 34.868839 $ 28.934443 $22.547720
</TABLE>
The accompanying notes are an integral part of the financial statements.
56
<PAGE> 60
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
FIDELITY'S VIP II
INVESTMENT GRADE BOND PORTFOLIO JANUS ASPEN SERIES
IC SHARES AGGRESSIVE GROWTH PORTFOLIO
------------------------------------ -------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 1 $ -- $ -- $ 2 $ -- $ --
Reinvested capital gains............. -- -- -- 3 -- --
Administrative expenses.............. -- -- -- (1) -- --
---------- ---------- ---------- ----------- ---------- ----------
Net investment income (loss) and
capital gains.................. 1 -- -- 4 -- --
---------- ---------- ---------- ----------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... (1) -- -- 42 -- --
Increase (decrease) in unrealized
appreciation of investments........ -- 1 -- 120 11 --
---------- ---------- ---------- ----------- ---------- ----------
Net realized and unrealized gains
(losses)......................... (1) 1 -- 162 11 --
---------- ---------- ---------- ----------- ---------- ----------
Additions (reductions) from
operations....................... -- 1 -- 166 11 --
---------- ---------- ---------- ----------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 42 19 -- 145 51 --
Surrenders........................... -- -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (6) -- -- 35 -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (4) (1) -- (18) (2) --
Monthly Expense Charge............... -- -- -- (2) -- --
---------- ---------- ---------- ----------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 32 18 -- 160 49 --
---------- ---------- ---------- ----------- ---------- ----------
Net additions (reductions) for
the year/period................ 32 19 -- 326 60 --
Policy Owners' Equity, beginning of the
year/period.......................... 19 -- -- 60 -- --
---------- ---------- ---------- ----------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 51 $ 19 $ -- $ 386 $ 60 $ --
========== ========== ========== =========== ========== ==========
Units Outstanding, beginning of the
year................................. 1,362.857 -- -- 4,022.517 2.178 --
Units Outstanding, end of the year..... 3,626.177 1,362.857 -- 11,631.594 4,022.517 2.178
Net Asset Value per Unit:.............. $13.662210 $13.807112 $12.685026 $ 33.167484 $14.714669 $10.960002
</TABLE>
The accompanying notes are an integral part of the financial statements.
57
<PAGE> 61
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
JANUS ASPEN SERIES JANUS ASPEN SERIES
GROWTH PORTFOLIO INTERNATIONAL GROWTH PORTFOLIO
------------------------------------- -----------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income............ $ -- $ 1 $ -- $ -- $ -- $ --
Reinvested capital gains.............. 1 -- -- -- -- --
Administrative expenses............... (1) -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ---------
Net investment income (loss) and
capital gains................... -- 1 -- -- -- --
----------- ---------- ---------- ---------- ---------- ---------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares.......... 24 -- -- 2 -- --
Increase (decrease) in unrealized
appreciation of investments......... 29 9 -- 26 1 --
----------- ---------- ---------- ---------- ---------- ---------
Net realized and unrealized gains
(losses).......................... 53 9 -- 28 1 --
----------- ---------- ---------- ---------- ---------- ---------
Additions (reductions) from
operations........................ 53 10 -- 28 1 --
----------- ---------- ---------- ---------- ---------- ---------
Policy Owners' transactions:
Net premium payments.................. 157 65 -- 26 13 4
Surrenders............................ -- -- -- (1) -- --
Transfers between funds and/or fixed
acct................................ (13) -- -- 6 -- --
Policy loans.......................... -- -- -- -- -- --
Loan collateral interest crediting.... -- -- -- -- -- --
Death benefits........................ -- -- -- -- -- --
Cost of insurance charges............. (18) (4) -- (4) (2) --
Monthly Expense Charge................ (2) -- -- (1) -- --
----------- ---------- ---------- ---------- ---------- ---------
Additions (reductions) for policy
owners' transactions............ 124 61 -- 26 11 4
----------- ---------- ---------- ---------- ---------- ---------
Net additions (reductions) for the
year/period..................... 177 71 -- 54 12 4
Policy Owners' Equity, beginning of the
year/period........................... 71 -- -- 16 4 --
----------- ---------- ---------- ---------- ---------- ---------
Policy Owners' Equity, end of the
year/period........................... $ 248 $ 71 $ -- $ 70 $ 16 $ 4
=========== ========== ========== ========== ========== =========
Units Outstanding, beginning of the
year.................................. 5,105.809 -- -- 1,430.417 427.927 --
Units Outstanding, end of the year...... 12,476.529 5,105.809 -- 3,462.662 1,430.417 427.927
Net Asset Value per Unit:............... $ 19.898078 $13.819668 $10.187114 $20.567965 $11.284244 $9.625377
</TABLE>
The accompanying notes are an integral part of the financial statements.
58
<PAGE> 62
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
NEUBERGER BERMAN
JANUS ASPEN SERIES ADVISERS MANAGEMENT TRUST
WORLDWIDE GROWTH PORTFOLIO LIMITED MATURITY BOND PORTFOLIO
-------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 1 $ 2 $ -- $ 1 $ -- $ --
Reinvested capital gains............. -- 1 -- -- -- --
Administrative expenses.............. (2) (1) -- (1) -- --
----------- ----------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. (1) 2 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... 41 1 -- (1) -- --
Increase (decrease) in unrealized
appreciation of investments........ 150 14 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... 191 15 -- (1) -- --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... 190 17 -- (1) -- --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 224 169 25 77 22 1
Surrenders........................... (1) -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (53) 3 -- (72) -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- (1) -- -- --
Cost of insurance charges............ (33) (15) -- (7) (4) --
Monthly Expense Charge............... (3) (1) -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 134 156 24 (2) 18 1
----------- ----------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ 324 173 24 (3) 18 1
Policy Owners' Equity, beginning of the
year/period.......................... 197 24 -- 19 1 --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 521 $ 197 $ 24 $ 16 $ 19 $ 1
=========== =========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 15,578.182 2,468.532 -- 1,753.632 105.555 --
Units Outstanding, end of the year..... 25,028.565 15,578.182 2,468.532 1,446.569 1,753.632 105.555
Net Asset Value per Unit:.............. $ 20.853866 $ 12.681124 $ 9.836310 $10.862584 $10.704404 $10.254171
</TABLE>
The accompanying notes are an integral part of the financial statements.
59
<PAGE> 63
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
NEUBERGER BERMAN NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST ADVISERS MANAGEMENT TRUST
PARTNERS PORTFOLIO SOCIALLY RESPONSIVE PORTFOLIO
-------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 3 $ -- $ -- $ -- $ -- $ --
Reinvested capital gains............. 5 1 -- -- -- --
Administrative expenses.............. (2) (1) -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. 6 -- -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... 11 (1) -- -- -- --
Increase (decrease) in unrealized
appreciation of investments........ -- 17 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... 11 16 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... 17 16 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 145 258 1 -- -- --
Surrenders........................... (1) -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (74) 1 -- -- -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (22) (10) -- -- -- --
Monthly Expense Charge............... (2) (1) -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 46 248 1 -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ 63 264 1 -- -- --
Policy Owners' Equity, beginning of the
year/period.......................... 265 1 -- -- -- --
----------- ----------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 328 $ 265 $ 1 $ -- $ -- $ --
=========== =========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 24,509.783 55.116 -- -- -- --
Units Outstanding, end of the year..... 28,491.605 24,509.783 55.116 2.542 -- --
Net Asset Value per Unit:.............. $ 11.553436 $ 10.760407 $10.325813 $10.754901 $ -- $ --
</TABLE>
The accompanying notes are an integral part of the financial statements.
60
<PAGE> 64
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
NORTHSTAR GALAXY TRUST NORTHSTAR GALAXY TRUST
EMERGING GROWTH PORTFOLIO GROWTH + VALUE PORTFOLIO
------------------------------------ ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ -- $ -- $ -- $ -- $ -- $ --
Reinvested capital gains............. 24 1 -- 37 -- --
Administrative expenses.............. -- -- -- (1) -- --
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. 24 1 -- 36 -- --
---------- ---------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... 5 -- -- 17 -- --
Increase (decrease) in unrealized
appreciation of investments........ 35 1 -- 14 7 --
---------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... 40 1 -- 31 7 --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... 64 2 -- 67 7 --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 17 13 1 50 38 11
Surrenders........................... -- -- -- -- -- --
Transfers between funds and/or fixed
acct............................... 87 -- -- 54 (4) --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (3) (1) -- (8) (5) --
Monthly Expense Charge............... -- 0 -- (1) -- --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 101 12 1 95 29 11
---------- ---------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ 165 14 1 162 36 11
Policy Owners' Equity, beginning of the
year/period.......................... 15 1 -- 47 11 --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 180 $ 15 $ 1 $ 209 $ 47 $ 11
========== ========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 804.528 49.892 -- 3,924.431 1,076.181 --
Units Outstanding, end of the year..... 3,929.860 804.528 49.892 8,872.444 3,924.431 1,076.181
Net Asset Value per Unit:.............. $45.340005 $18.810805 $16.036372 $23.706151 $12.158465 $10.189337
</TABLE>
The accompanying notes are an integral part of the financial statements.
61
<PAGE> 65
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
NORTHSTAR GALAXY TRUST NORTHSTAR GALAXY TRUST
INTERNATIONAL VALUE PORTFOLIO RESEARCH ENHANCED INDEX PORTFOLIO
------------------------------------ ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 1 $ 1 $ -- $ -- $ -- $ --
Reinvested capital gains............. 7 2 -- -- -- --
Administrative expenses.............. -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. 8 3 -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... 10 -- -- (1) -- --
Increase (decrease) in unrealized
appreciation of investments........ 5 1 -- 1 (1) --
---------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... 15 1 -- -- (1) --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... 23 4 -- -- (1) --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 36 46 9 6 7 1
Surrenders........................... -- -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (30) 1 -- (7) -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (8) (7) (1) (1) (1) --
Monthly Expense Charge............... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... (2) 40 8 (2) 6 1
---------- ---------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ 21 44 8 (2) 5 1
Policy Owners' Equity, beginning of the
year/period.......................... 52 8 -- 6 1 --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 73 $ 52 $ 8 $ 4 $ 6 $ 1
========== ========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 4,281.249 823.667 -- 443.781 29.810 --
Units Outstanding, end of the year..... 4,017.898 4,281.249 823.667 278.069 443.781 29.810
Net Asset Value per Unit:.............. $17.787065 $11.844211 $10.129526 $15.298625 $14.457253 $14.264010
</TABLE>
The accompanying notes are an integral part of the financial statements.
62
<PAGE> 66
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
NORTHSTAR GALAXY TRUST OCC ACCUMULATION TRUST
HIGH YIELD BOND PORTFOLIO EQUITY PORTFOLIO
------------------------------------ ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 1 $ 1 $ -- $ -- $ -- $ --
Reinvested capital gains............. -- -- -- -- -- --
Administrative expenses.............. -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. 1 1 -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... (1) -- -- -- -- --
Increase (decrease) in unrealized
appreciation of investments........ 1 (1) -- (1) 1 --
---------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... -- (1) -- (1) 1 --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... 1 -- -- (1) 1 --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 7 12 -- 6 1 3
Surrenders........................... -- -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (9) (2) -- -- -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (1) -- -- (1) (1) --
Monthly Expense Charge............... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... (3) 10 -- 5 -- 3
---------- ---------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ (2) 10 -- 4 1 3
Policy Owners' Equity, beginning of the
year/period.......................... 10 -- -- 4 3 --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 8 $ 10 $ -- $ 8 $ 4 $ 3
========== ========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 858.616 13.072 -- 304.805 265.451 --
Units Outstanding, end of the year..... 586.534 858.616 13.072 667.165 304.805 265.451
Net Asset Value per Unit:.............. $10.130924 $10.468149 $10.406855 $12.334780 $12.029100 $10.753858
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
<PAGE> 67
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
OCC ACCUMULATION TRUST OCC ACCUMULATION TRUST
GLOBAL EQUITY PORTFOLIO MANAGED PORTFOLIO
----------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income............ $ 1 $ -- $ -- $ 1 $ -- $ --
Reinvested capital gains.............. 11 1 -- 2 1 --
Administrative expenses............... (1) -- -- -- -- --
---------- ---------- --------- ---------- ---------- ----------
Net investment income (loss) and
capital gains................... 11 1 -- 3 1 --
---------- ---------- --------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares.......... 4 -- -- 1 1 --
Increase (decrease) in unrealized
appreciation of investments......... (2) (1) -- (1) 1 --
---------- ---------- --------- ---------- ---------- ----------
Net realized and unrealized gains
(losses).......................... 2 (1) -- -- 2 --
---------- ---------- --------- ---------- ---------- ----------
Additions (reductions) from
operations........................ 13 -- -- 3 3 --
---------- ---------- --------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments.................. 41 29 5 32 38 13
Surrenders............................ -- -- -- -- -- --
Transfers between funds and/or fixed
acct................................ (4) -- -- (45) -- --
Policy loans.......................... -- -- -- -- -- --
Loan collateral interest crediting.... -- -- -- -- -- --
Death benefits........................ -- -- -- -- -- --
Cost of insurance charges............. (4) (1) -- (5) (6) (1)
Monthly Expense Charge................ -- -- -- (1) (1) --
---------- ---------- --------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions............ 33 28 5 (19) 31 12
---------- ---------- --------- ---------- ---------- ----------
Net additions (reductions) for the
year/period..................... 46 28 5 (16) 34 12
Policy Owners' Equity, beginning of the
year/period........................... 33 5 -- 46 12 --
---------- ---------- --------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period........................... $ 79 $ 33 $ 5 $ 30 $ 46 $ 12
========== ========== ========= ========== ========== ==========
Units Outstanding, beginning of the
year.................................. 3,071.262 473.059 -- 4,201.605 1,233.680 --
Units Outstanding, end of the year...... 5,663.042 3,071.262 473.059 2,533.542 4,201.605 1,233.680
Net Asset Value per Unit:............... $13.643299 $10.782965 $9.518205 $11.444770 $10.900163 $10.175476
</TABLE>
The accompanying notes are an integral part of the financial statements.
64
<PAGE> 68
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
PUTNAM VT
OCC ACCUMULATION TRUST DIVERSIFIED INCOME FUND
SMALL CAP PORTFOLIO CLASS IA SHARES
------------------------------------ ------------------------------------
1999 1998 1997 1999 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income............ $ -- $ -- $ -- $ 2 $ -- $ --
Reinvested capital gains.............. -- -- -- -- -- --
Administrative expenses............... -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains................... -- -- -- 2 -- --
---------- ---------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares.......... (4) -- -- (1) -- --
Increase (decrease) in unrealized
appreciation of investments......... 1 (2) -- (1) (1) --
---------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses).......................... (3) (2) -- (2) (1) --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations........................ (3) (2) -- -- (1) --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments.................. 43 42 11 9 25 --
Surrenders............................ -- -- -- -- -- --
Transfers between funds and/or fixed
acct................................ (47) -- -- (2) -- --
Policy loans.......................... -- -- -- -- -- --
Loan collateral interest crediting.... -- -- -- -- -- --
Death benefits........................ -- -- -- -- -- --
Cost of insurance charges............. (6) (5) -- (2) (2) --
Monthly Expense Charge................ -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions............ (10) 37 11 5 23 --
---------- ---------- ---------- ---------- ---------- ----------
Net additions (reductions) for the
year/period..................... (13) 35 11 5 22 --
Policy Owners' Equity, beginning of the
year/period........................... 46 11 -- 22 -- --
---------- ---------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period........................... $ 33 $ 46 $ 11 $ 27 $ 22 $ --
========== ========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year.................................. 4,950.484 4,950.484 -- 1,802.260 16.242 --
Units Outstanding, end of the year...... 3,565.027 4,950.484 1,063.874 2,129.016 1,802.260 16.242
Net Asset Value per Unit:............... $ 9.156366 $ 9.327299 $10.252721 $13.339586 $13.108403 $13.290543
</TABLE>
The accompanying notes are an integral part of the financial statements.
65
<PAGE> 69
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
PUTNAM VT PUTNAM VT
GROWTH AND INCOME FUND NEW OPPORTUNITIES FUND
CLASS IA SHARES CLASS IA SHARES
------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income........... $ 3 $ -- $ -- $ -- $ -- $ --
Reinvested capital gains............. 14 1 -- -- -- --
Administrative expenses.............. (2) (1) -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) and
capital gains.................. 15 -- -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on
redemptions of fund shares......... -- (1) -- -- -- --
Increase (decrease) in unrealized
appreciation of investments........ (18) 10 -- 3 -- --
----------- ---------- ---------- ---------- ---------- ----------
Net realized and unrealized gains
(losses)......................... (18) 9 -- 3 -- --
----------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) from
operations....................... (3) 9 -- 3 -- --
----------- ---------- ---------- ---------- ---------- ----------
Policy Owners' transactions:
Net premium payments................. 141 104 3 14 -- --
Surrenders........................... (1) -- -- -- -- --
Transfers between funds and/or fixed
acct............................... (8) 52 -- 1 -- --
Policy loans......................... -- -- -- -- -- --
Loan collateral interest crediting... -- -- -- -- -- --
Death benefits....................... -- -- -- -- -- --
Cost of insurance charges............ (19) (9) -- (3) -- --
Monthly Expense Charge............... (2) (1) -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Additions (reductions) for policy
owners' transactions........... 111 146 3 12 -- --
----------- ---------- ---------- ---------- ---------- ----------
Net additions (reductions) for
the year/period................ 108 155 3 15 -- --
Policy Owners' Equity, beginning of the
year/period.......................... 158 3 -- -- -- --
----------- ---------- ---------- ---------- ---------- ----------
Policy Owners' Equity, end of the
year/period.......................... $ 266 $ 158 $ 3 $ 15 $ -- $ --
=========== ========== ========== ========== ========== ==========
Units Outstanding, beginning of the
year................................. 6,624.776 161.028 -- -- -- --
Units Outstanding, end of the year..... 11,011.914 6,624.776 161.028 414.168 -- --
Net Asset Value per Unit:.............. $ 24.291674 $23.912286 $20.717931 $38.550963 $23.912286
</TABLE>
The accompanying notes are an integral part of the financial statements.
66
<PAGE> 70
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK VARIABLE LIFE
SEPARATE ACCOUNT I
STATEMENTS OF OPERATIONS AND CHANGES IN POLICY OWNERS' EQUITY, continued
For the years ended December 31, 1999 and 1998 and
the period from August 8, 1997 (date of inception) to December 31, 1997
(In Thousands)
<TABLE>
<CAPTION>
PUTNAM VT
VOYAGER FUND
CLASS IA SHARES
--------------------------------------
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
Net investment income (loss):
Reinvested dividend income................................ $ -- $ -- $ --
Reinvested capital gains.................................. 37 1 --
Administrative expenses................................... (3) -- --
----------- ----------- ----------
Net investment income (loss) and capital gains........ 34 1 --
----------- ----------- ----------
Realized and unrealized gains (losses):
Net realized gains (losses) on redemptions of fund
shares.................................................. 7 (11) --
Increase (decrease) in unrealized appreciation of
investments............................................. 239 49 --
----------- ----------- ----------
Net realized and unrealized gains (losses).............. 246 38 --
----------- ----------- ----------
Additions (reductions) from operations.................. 280 39 --
----------- ----------- ----------
Policy Owners' transactions:
Net premium payments...................................... 227 256 9
Surrenders................................................ (1) -- --
Transfers between funds and/or fixed acct................. 4 75 --
Policy loans.............................................. -- -- --
Loan collateral interest crediting........................ -- -- --
Death benefits............................................ -- -- --
Cost of insurance charges................................. (35) (14) --
Monthly Expense Charge.................................... (4) (2) --
----------- ----------- ----------
Additions (reductions) for policy owners'
transactions........................................ 191 315 9
----------- ----------- ----------
Net additions (reductions) for the year/period........ 471 354 9
Policy Owners' Equity, beginning of the year/period......... 363 9 --
----------- ----------- ----------
Policy Owners' Equity, end of the year/period............... $ 834 $ 363 $ 9
=========== =========== ==========
Units Outstanding, beginning of the year.................... 14,239.896 431.004 --
Units Outstanding, end of the year.......................... 20,705.425 14,239.896 431.004
Net Asset Value per Unit:................................... $ 40.259562 $ 25.445248 $20.460670
</TABLE>
The accompanying notes are an integral part of the financial statements.
67
<PAGE> 71
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION:
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
("Separate Account I") was established by ReliaStar Life Insurance Company of
New York ("ReliaStar Life of New York"), previously ReliaStar Bankers Security
Life Insurance Society, in 1986 under the New York insurance laws. Separate
Account I operates as a unit investment trust under the Investment Company Act
of 1940 and is used to fund certain benefits for variable life insurance
policies issued by ReliaStar Life of New York. The assets of Separate Account I
and its sub-accounts are the property of ReliaStar Life of New York. The portion
of Separate Account I assets applicable to the variable life policies will not
be charged with liabilities arising out of any other business ReliaStar Life of
New York may conduct. The net assets maintained in the sub-accounts provide the
basis for the periodic determination of the amount of increased or decreased
benefits under the policies. The net assets may not be less than the amount
required under the state insurance law to provide for death benefits (without
regard to the minimum death benefit guarantee) and other policy benefits.
Additional assets are held in ReliaStar Life of New York's general account to
cover the contingency that the guaranteed minimum death benefit might exceed the
death benefit which would have been payable in the absence of such guarantee.
Payments received under the policies are allocated to sub-accounts of the
account, each of which invested in one of the following funds during the year:
<TABLE>
<CAPTION>
THE ALGER AMERICAN FUND FIDELITY'S VIP FIDELITY'S VIP II
----------------------- -------------- -----------------
<S> <C> <C>
Growth Portfolio VIP Equity-Income Portfolio -- IC VIP II Contrafund Portfolio -- IC Shares
Shares
Mid Cap Growth Portfolio VIP Growth Portfolio -- IC Shares VIP II Index 500 Portfolio -- IC Shares
Small Capitalization Portfolio VIP High Income Portfolio -- IC Shares VIP II Investment Grade Bond Portfolio -- IC
Shares
VIP Money Market Portfolio -- IC
Shares
</TABLE>
<TABLE>
<CAPTION>
JANUS ASPEN SERIES NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST NORTHSTAR GALAXY TRUST
- ------------------ ------------------------------------------ ----------------------
<S> <C> <C>
Aggressive Growth Portfolio AMT Limited Maturity Bond Portfolio Emerging Growth Portfolio
Growth Portfolio AMT Partners Portfolio Growth + Value Portfolio
International Growth Portfolio AMT Socially Responsive Portfolio International Value Portfolio
Worldwide Growth Portfolio Research Enhanced Index Portfolio
High Yield Bond Portfolio
</TABLE>
<TABLE>
<CAPTION>
OCC ACCUMULATION TRUST PUTNAM VARIABLE TRUST
---------------------- ---------------------
<S> <C>
Equity Portfolio Putnam VT Diversified Income Fund -- Class IA Shares
Global Equity Portfolio Putnam VT Growth and Income Fund -- Class IA Shares
Managed Portfolio Putnam VT New Opportunities Fund -- Class IA Shares
Small Capitalization Portfolio Putnam VT Voyager Fund -- Class IA Shares
</TABLE>
Fred Alger Management, Inc. is the investment adviser for the three portfolios
of The Alger American Fund and is paid fees for its services by The Alger
American Fund Portfolios. Fidelity Management & Research Company is the
investment adviser for Fidelity's Variable Insurance Products Fund (VIP) and
Variable Insurance Products Fund II (VIP II) and is paid for its services by the
VIP and VIP II Portfolios. Janus Capital Corporation is the investment adviser
for the four portfolios of Janus Aspen Series and is paid fees for its services
by the Janus Aspen Series Portfolios. Neuberger Berman Management Inc. is the
investment manager for the three portfolios of the Neuberger Berman Advisers
Management Trust and is paid fees for its services by the Neuberger Berman
Advisers Management Trust Portfolios. Pilgrim Advisors, Inc., an affiliate of
ReliaStar Life Insurance Company of New York, is the investment adviser for the
five Northstar Galaxy Trust Portfolios and is paid fees for its services by the
Galaxy Trust portfolios. OpCap Advisors is the investment adviser for the four
portfolios of the OCC Accumulation Trust and is paid fees for its services by
the OCC Accumulation Trust Funds.
68
<PAGE> 72
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. ORGANIZATION: -- (Continued)
Putnam Investment Management, Inc. is the investment adviser for Putnam Variable
Trust and is paid fees for its services by Putnam Variable Trust. The related
Funds' prospectuses contain further information.
Fidelity VIP II Contrafund Portfolio is a registered trademark to FMMR
Corporation.
On August 8, 1997, Sub-Accounts investing in The Alger American Fund, Fidelity
VIP and VIP II, Janus Aspen Series, Neuberger Berman Advisers Management Trust,
Northstar Galaxy Trust and OCC Accumulation Trust were made available to
ReliaStarLife of New York policies.
On July 29, 1998, Northstar Variable Trust Portfolio's changed its name to
Northstar Galaxy Trust Portfolios (GT). Also on July 29, 1998, the Northstar
Variable Trust Growth Portfolio changed its name to Northstar Galaxy Trust
Growth + Value Portfolio.
On November 9, 1998, Northstar Galaxy Trust Income and Growth Portfolio changed
its name to Northstar Galaxy Trust Emerging Growth Portfolio.
On April 30, 1999, sub-accounts investing in Neuberger Berman Advisers
Management Trust Socially Responsive Portfolio and Putnam VT New Opportunities
Fund were made available to purchasers of ReliaStar Life of New York's Separate
Account I contracts. Also on April 30, 1999, Northstar Galaxy Trust Multi-Sector
Bond Portfolio changed its name to Northstar Galaxy Trust Research Enhanced
Index Portfolio and sub-accounts investing in the Putnam VT Diversified Income
Fund were closed to new premium and transfers.
On November 1, 1999, Northstar Investment Management Corporation changed its
name to Pilgrim Advisors, Inc. Substantially the same personnel are performing
the investment advisory services on behalf of Pilgrim Advisors, Inc.
2. SIGNIFICANT ACCOUNTING POLICIES:
SECURITIES VALUATION TRANSACTIONS AND RELATED INVESTMENT INCOME:
The market value of investments in the sub-accounts is based on the closing net
asset values of the fund shares held at the end of the year. Investment
transactions are accounted for on the trade date (date the order to purchase or
redeem is executed) and dividend income and capital gain distributions are
recorded on the exdividend date. Net realized gains and losses on redemptions of
shares of the funds are determined on the basis of specific identification of
fund share costs.
3. FEDERAL INCOME TAXES:
ReliaStar Life of New York is taxed as a life insurance company under the
Internal Revenue Code of 1986, as amended (the "Code"). Since the Separate
Account I is not a separate entity from ReliaStar Life of New York, and its
operations form a part of ReliaStar Life of New York, it is not taxed separately
as a "regulated investment company" under Sub-chapter M of the Code. Under
existing Federal income tax law, investment income of the Separate Account I, to
the extent that it is applied to increase reserves under a contract, is not
taxed and may be compounded through reinvestment without additional tax to
ReliaStar Life of New York.
4. POLICY CHARGES:
Certain charges are made by ReliaStar Life of New York to policy owners'
Variable Accumulation Values in the Account in accordance with the terms of the
policies. These charges are set forth in the policies and may include: cost of
insurance; a monthly expense charge; death benefit guarantee charge; optional
insurance benefit charges; surrender charges and sales charge refunds.
69
<PAGE> 73
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS, CONTINUED
5. INVESTMENTS:
For the year ended December 31, 1999, investment activity in the funds was as
follows (in thousands):
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
--------- ----------
<S> <C> <C>
INVESTING FUND
- ------------------------------------------------------------
THE ALGER AMERICAN FUND:
Alger American Growth Portfolio........................... $ 411 $ 77
Alger American MidCap Growth Portfolio.................... 37 9
Alger American Small Capitalization Portfolio............. 96 38
FIDELITY'S VIP:
VIP Equity-Income Portfolio -- IC Shares.................. 290 148
VIP Growth Portfolio -- IC Shares......................... 256 138
VIP High Income Portfolio -- IC Shares.................... 64 22
VIP Money Market Portfolio -- IC Shares................... 804 241
FIDELITY'S VIP II:
VIP II Contrafund Portfolio -- IC Shares.................. 309 91
VIP II Index 500 Portfolio -- IC Shares................... 580 98
VIP II Investment Grade Bond Portfolio -- IC Shares....... 55 23
JANUS ASPEN SERIES:
Aggressive Growth Portfolio............................... 265 101
Growth Portfolio.......................................... 227 101
International Growth Portfolio............................ 39 13
Worldwide Growth Portfolio................................ 326 192
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST:
AMT Limited Maturity Bond Portfolio....................... 84 86
AMT Partners Portfolio.................................... 188 134
AMT Socially Responsive Portfolio......................... -- --
NORTHSTAR GALAXY TRUST:
Northstar Emerging Growth Portfolio....................... 140 16
Northstar Growth + Value Portfolio........................ 189 57
Northstar International Value Portfolio................... 103 98
Northstar Research Enhanced Index Portfolio............... 6 8
Northstar High Yield Bond Portfolio....................... 7 10
OCC ACCUMULATION TRUST:
Equity Portfolio.......................................... 5 --
Global Equity Portfolio................................... 72 30
Managed Portfolio......................................... 76 93
Small Cap Portfolio....................................... 77 87
PUTNAM VARIABLE TRUST:
Putnam VT Diversified Income Fund -- Class IA Shares...... 13 6
Putnam VT Growth and Income Fund -- Class IA Shares....... 175 47
Putnam VT New Opportunities Fund -- Class IA Shares....... 14 1
Putnam VT Voyager Fund -- Class IA Shares................. 320 95
------ ------
Total..................................................... $5,228 $2,060
====== ======
</TABLE>
70
<PAGE> 74
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholder
ReliaStar Life Insurance Company of New York
(A Wholly Owned Subsidiary of Security-Connecticut Life Insurance Company)
Woodbury, New York
We have audited the accompanying balance sheets of ReliaStar Life Insurance
Company of New York (the Company) as of December 31, 1999 and 1998, and the
related statements of income, shareholder's equity and comprehensive income, and
cash flows for each of the two years in the period ended December 31, 1999.
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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ReliaStar Life Insurance
Company of New York as of December 31, 1999 and 1998 and the results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1999 in conformity with generally accepted accounting principles.
Minneapolis, Minnesota
February 1, 2000
71
<PAGE> 75
BALANCE SHEETS
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF SECURITY-CONNECTICUT LIFE INSURANCE COMPANY)
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Fixed Maturity Securities (Amortized Cost: 1999, $1,489.6;
1998, $1,503.9) $1,473.0 $1,585.6
Equity Securities (Cost: 1999, $5.3; 1998, $5.5) 5.5 5.7
Mortgage Loans on Real Estate 318.2 288.9
Real Estate .6 2.8
Policy Loans 83.8 81.6
Other Invested Assets 5.3 8.0
Short-Term Investments 14.4 35.9
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS 1,900.8 2,008.5
Cash .9 --
Accounts and Notes Receivable 10.1 7.8
Reinsurance Receivable 50.1 43.2
Deferred Policy Acquisition Costs 141.7 134.4
Present Value of Future Profits 79.4 68.2
Property and Equipment, Net 1.1 1.7
Accrued Investment Income 26.7 26.4
Goodwill 33.7 34.6
Other Assets -- 5.3
Assets Held in Separate Accounts 687.5 529.3
- ----------------------------------------------------------------------------------
TOTAL ASSETS $2,932.0 $2,859.4
- ----------------------------------------------------------------------------------
LIABILITIES
Future Policy and Contract Benefits $1,672.8 $1,736.3
Pending Policy Claims 26.4 27.7
Other Policyholder Funds 36.0 17.6
Income Taxes 10.8 33.4
Other Liabilities 59.4 56.3
Liabilities Related to Separate Accounts 685.0 526.8
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES 2,490.4 2,398.1
- ----------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY
Common Stock (Shares Issued: 1.4) 2.8 2.8
Additional Paid-In Capital 235.2 235.2
Retained Earnings 213.0 181.2
Accumulated Other Comprehensive Income (Loss) (9.4) 42.1
- ----------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY 441.6 461.3
- ----------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $2,932.0 $2,859.4
- ----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
72
<PAGE> 76
STATEMENTS OF INCOME
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF SECURITY-CONNECTICUT LIFE INSURANCE COMPANY)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
REVENUES
Premiums $ 42.8 $ 41.7
Net Investment Income 149.7 157.0
Realized Investment Gains (Losses), Net (.3) 4.9
Policy and Contract Charges 100.7 95.5
Other Income 3.8 3.5
- ------------------------------------------------------------------------------
TOTAL 296.7 302.6
- ------------------------------------------------------------------------------
BENEFITS AND EXPENSES
Benefits to Policyholders 156.2 166.9
Sales and Operating Expenses 47.7 54.5
Amortization of Deferred Policy Acquisition Costs and
Present Value
of Future Profits 30.1 37.7
Dividends and Experience Refunds to Policyholders .9 2.4
- ------------------------------------------------------------------------------
TOTAL 234.9 261.5
- ------------------------------------------------------------------------------
Income Before Income Taxes 61.8 41.1
Income Tax Expense 22.0 14.7
- ------------------------------------------------------------------------------
NET INCOME $ 39.8 $ 26.4
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
73
<PAGE> 77
STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF SECURITY-CONNECTICUT LIFE INSURANCE COMPANY)
<TABLE>
<CAPTION>
COMPREHENSIVE
SHAREHOLDER'S EQUITY INCOME
-------------------- ---------------
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK
Beginning and End of Year $ 2.8 $ 2.8
- -------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL
Beginning and End of Year 235.2 235.2
- -------------------------------------------------------------------------------
RETAINED EARNINGS
Beginning of Year 181.2 154.8
Net Income 39.8 26.4 $ 39.8 $26.4
Dividends to Shareholder (8.0) --
- -------------------------------------------------------------------------------
End of Year 213.0 181.2
- -------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Beginning of Year 42.1 40.1
Change for the Year (51.5) 2.0 (51.5) 2.0
- -------------------------------------------------------------------------------
End of Year (9.4) 42.1
- --------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS) $(11.7) $28.4
- --------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY $441.6 $461.3
- --------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
74
<PAGE> 78
STATEMENTS OF CASH FLOWS
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF SECURITY-CONNECTICUT LIFE INSURANCE COMPANY)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 39.8 $ 26.4
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities
Interest Credited to Insurance Contracts 70.0 74.1
Future Policy Benefits (117.8) (115.7)
Capitalization of Policy Acquisition Costs (29.2) (29.0)
Amortization of Deferred Policy Acquisition Costs and
Present Value of Future Profits 30.1 37.7
Deferred Income Taxes 3.4 (2.3)
Net Change in Receivables and Payables 12.2 25.6
Other Assets 8.5 (1.1)
Realized Investment (Gains) Losses, Net .3 (4.9)
Other (2.4) (5.3)
- --------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 14.9 5.5
- --------------------------------------------------------------------------------
INVESTING ACTIVITIES
Proceeds from Sales of Fixed Maturity Securities 137.8 71.9
Proceeds from Maturities or Repayment of Fixed Maturity
Securities 188.7 173.0
Cost of Fixed Maturity Securities Acquired (311.0) (182.5)
Sales (Purchases) of Equity Securities, Net -- (3.0)
Proceeds of Mortgage Loans Sold, Matured or Repaid 43.2 64.3
Cost of Mortgage Loans Acquired (72.6) (62.8)
Sales (Purchases) of Real Estate, Net 2.8 (1.4)
Policy Loans Issued, Net (2.2) (.9)
Sales of Other Invested Assets, Net 2.7 2.4
Sales (Purchases) of Short-Term Investments, Net 21.5 (30.7)
- --------------------------------------------------------------------------------
Net Cash Provided by Investing Activities 10.9 30.3
- --------------------------------------------------------------------------------
FINANCING ACTIVITIES
Deposits to Insurance Contracts 146.9 144.0
Maturities and Withdrawals from Insurance Contracts (163.8) (182.3)
Dividends to Shareholder (8.0) --
- --------------------------------------------------------------------------------
Net Cash Used in Financing Activities (24.9) (38.3)
- --------------------------------------------------------------------------------
Increase (Decrease) in Cash .9 (2.5)
Cash at Beginning of Year -- 2.5
- --------------------------------------------------------------------------------
Cash at End of Year $ .9 $ --
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
75
<PAGE> 79
NOTES TO FINANCIAL STATEMENTS
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF SECURITY-CONNECTICUT LIFE INSURANCE COMPANY)
NOTE 1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
ReliaStar Life Insurance Company of New York (the Company) is principally
engaged in the business of providing life insurance and related financial
services products. The Company provides and distributes individual life
insurance and annuities; employee benefit products and services; retirement
plans and life and health reinsurance. The Company operates primarily in the
United States and is authorized to conduct business in all 50 states.
BASIS OF PRESENTATION
The Company is a wholly-owned subsidiary of Security-Connecticut Life Insurance
Company (Security-Connecticut) which is a wholly-owned subsidiary of ReliaStar
Life Insurance Company (ReliaStar Life) whose parent is ReliaStar Financial
Corp. (ReliaStar). Effective January 1, 1998, Lincoln Security Life Insurance
Company (Lincoln Security), an affiliate, merged with and into the Company
pursuant to a statutory merger.
USE OF 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, the 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.
During 1998, the Company updated certain assumptions affecting deferred policy
acquisition costs and present value of future profits for interest sensitive
products. The change in assumptions reduced the deferred policy acquisition
costs and present value of future profit balances by approximately $3 million in
1998.
During 1998, ReliaStar approved a plan to consolidate its five individual life
insurance and annuity service center operations into one new center. This
consolidation is expected to be substantially complete by the end of the year
2000 and affects approximately 60 positions at the Company's current service
center operation. Estimated costs of $4.3 million (pre-tax) were recorded by the
Company primarily for employee-related termination and non-cancelable lease
contracts costs associated with vacated facilities. The remaining liability as
of December 31, 1999, was $4.1 million and reflects payments of $.2 million made
during 1999.
INVESTMENTS
Fixed maturity securities (bonds and redeemable preferred stocks) are classified
as available-for-sale and are carried at fair value.
Equity securities (common stocks and nonredeemable preferred stocks) are carried
at fair value.
Mortgage loans on real estate are carried at amortized cost less an impairment
allowance for estimated uncollectible amounts.
Real estate acquired through foreclosure is carried at the lower of fair value
less estimated costs to sell or cost.
Short-term investments are carried at amortized cost, which approximates fair
value.
Unrealized investment gains and losses on equity securities and fixed maturity
securities, net of related deferred policy acquisition costs (DAC), present
value of future profits (PVFP) and tax effects, are accounted for as a direct
increase or decrease to the accumulated other comprehensive income (loss)
component of shareholder's equity.
Realized investment gains and losses enter into the determination of net income.
Realized investment gains and losses on sales of securities are determined on
the specific identification method. Write-offs of investments
76
<PAGE> 80
that decline in value below cost on other than a temporary basis and the change
in the allowance for mortgage loans and wholly owned real estate are included
with realized investment gains and losses in the Statements of Income.
The Company records write-offs or allowances for its investments based upon an
evaluation of specific problem investments. The Company periodically reviews all
invested assets (including marketable bonds, private placements, mortgage loans
and real estate investments) to identify investments where the Company has
credit concerns. Investments with credit concerns include those the Company has
identified as problem investments, which are issues delinquent in a required
payment of principal or interest, issues in bankruptcy or foreclosure and
restructured or foreclosed assets. The Company also identifies investments as
potential problem investments, which are investments where the Company has
serious doubts as to the ability of the borrowers to comply with the present
loan repayment terms.
INTEREST RATE SWAP AGREEMENTS
Interest rate swap agreements are used as hedges for asset/liability management
of adjustable rate and short-term invested assets. The Company does not enter
into any interest rate swap agreements for trading purposes. The interest rate
swap transactions involve the exchange of fixed and floating rate interest
payments without the exchange of underlying principal amounts and do not contain
other optional provisions. The Company utilizes the settlement method of
accounting for its interest rate swap agreements whereby the difference between
amounts paid and amounts received or accrued on interest rate swap agreements is
reflected in net investment income.
The characteristics (notional amount, maturity and payment dates) of the
interest rate swap agreements are similar to the characteristics of the
designated hedged assets. Interest rate swaps are carried at fair value, and
changes in fair value are recorded as a direct increase or decrease in the
accumulated other comprehensive income component of shareholder's equity. In the
event an interest rate swap agreement would cease to qualify for hedge
accounting, changes in fair value of the affected swap would be recorded as
income or expense. There were no terminations of interest rate swap agreements
during 1999 and 1998.
POLICY ACQUISITION COSTS
Those costs of acquiring new business, which vary with and are primarily related
to the production of new business, have been deferred to the extent that such
costs are deemed recoverable. Such costs include commissions, certain costs of
policy issuance and underwriting and certain variable agency expenses.
Costs deferred related to traditional life insurance products are amortized over
the premium paying period of the related policies, in proportion to the ratio of
annual premium revenues to total anticipated premium revenues. Such anticipated
premium revenues are estimated using the same assumptions used for computing
liabilities for future policy benefits.
Costs deferred related to universal life-type policies and investment contracts
are amortized over the lives of the policies, in relation to the present value
of estimated gross profits from mortality, investment, surrender and expense
margins.
PRESENT VALUE OF FUTURE PROFITS
The present value of future profits reflects the estimated fair value of
acquired insurance business in force and represents the portion of the
acquisition cost that was allocated to the value of future cash flows from
insurance contracts existing at the date of acquisition. Such value is the
present value of the actuarially determined projected net cash flows from the
acquired insurance contracts. PVFP is amortized over the lives of the acquired
insurance business in force in a manner consistent with amortization of policy
acquisition costs.
77
<PAGE> 81
An analysis of the PVFP asset account is presented below:
<TABLE>
<CAPTION>
(IN MILLIONS) 1999 1998
- ----------------------------------------------------------------------------
<S> <C> <C>
Balance, Beginning of Year $68.2 $79.1
Acquisition -- .8
Imputed Interest 5.3 5.9
Amortization (12.3) (21.3)
Impact of Net Unrealized Investment Losses 18.2 3.7
- ----------------------------------------------------------------------------
BALANCE, END OF YEAR $79.4 $68.2
- ----------------------------------------------------------------------------
</TABLE>
Based on current conditions and assumptions as to future events on acquired
policies in force, the Company expects that the net amortization of the December
31, 1999 PVFP balance will be between 7% and 11% in each of the years 2000
through 2004. The interest rates used to determine the amount of imputed
interest on the unamortized PVFP balance ranged from 5% to 8%.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost, net of accumulated depreciation of
$3.4 million and $2.9 million at December 31, 1999 and 1998, respectively. The
Company provides for depreciation of property and equipment using straight-line
and accelerated methods over the estimated useful lives of the assets.
Depreciation expense for the years ending December 31, 1999 and 1998, totaled
$.5 million and $.8 million, respectively.
GOODWILL
Goodwill is the excess of the amount paid to acquire a company over the fair
value of the net assets acquired and is amortized on a straight-line basis over
40 years. The carrying value of goodwill is monitored for indicators of
impairment of value. No events or circumstances were identified which warrant
consideration of impairment or a revised estimate of useful lives.
SEPARATE ACCOUNTS
The Company operates separate accounts. The assets and liabilities of the
separate accounts are primarily related to variable annuity, variable life and
401(k) contracts and represent policyholder-directed funds that are separately
administered. The assets (primarily investments) and liabilities (primarily to
contractholders) of each account are clearly identifiable and distinguishable
from other assets and liabilities of the Company. Assets are carried at fair
value. Revenues from these separate account contracts consist primarily of
charges for mortality risk and expenses, cost of insurance, contract
administration and surrender charges. Revenue for these products is recognized
when due.
FUTURE POLICY AND CONTRACT BENEFITS
Liabilities for future policy benefits for traditional life contracts are
calculated using the net level premium method and assumptions as to investment
yields, mortality, withdrawals and dividends. The assumptions are based on
projections of past experience and include provisions for possible unfavorable
deviation. These assumptions are made at the time the contract is issued or, for
purchased contracts, at the date of acquisition.
Liabilities for future policy and contract benefits on universal life-type and
investment contracts are based on the policy account balance.
The liabilities for future policy and contract benefits for group disabled life
reserves and long-term disability reserves are based upon interest rate
assumptions and morbidity and termination rates from published tables, modified
for Company experience.
INCOME TAXES
The provision for income taxes includes amounts currently payable and deferred
income taxes resulting from the cumulative temporary differences in the assets
and liabilities determined on a tax return and financial statement basis.
78
<PAGE> 82
The Company files a consolidated tax return with certain of its affiliates. The
method by which the total consolidated federal income tax for each entity is
allocated to each of the companies is subject to a written agreement approved by
the Company's Board of Directors. Allocation is based upon a separate return
calculation such that each company in the consolidated return pays the same tax
or receives the same refunds it would have paid or received had it consistently
filed separate federal income tax returns. Intercompany tax balances are settled
within a reasonable time after filing of the consolidated federal income tax
returns with the Internal Revenue Service.
PREMIUM REVENUE AND BENEFITS TO POLICYHOLDERS
Recognition of Traditional Life, Group and Annuity Premium Revenue and Benefits
to Policyholders -- Traditional life insurance products include those products
with fixed and guaranteed premiums and benefits and consist principally of term
and whole life insurance policies and certain annuities with life contingencies
(immediate annuities). Life insurance premiums and immediate annuity premiums
are recognized as premium revenue when due. Group insurance premiums are
recognized as premium revenue over the time period to which the premiums relate.
Benefits and expenses are associated with earned premiums so as to result in
recognition of profits over the life of the contracts. This association is
accomplished by means of the provision for liabilities for future policy
benefits and the amortization of DAC and PVFP.
Recognition of Universal Life-Type Contract Revenue and Benefits to
Policyholders -- Universal life-type policies are insurance contracts with terms
that are not fixed and guaranteed. The terms that may be changed could include
one or more of the amounts assessed the policyholder, premiums paid by the
policyholder or interest accrued to policyholder balances. Amounts received as
deposits to such contracts are not reported as premium revenues.
Revenues for universal life-type policies consist of charges assessed against
policy account values for deferred policy loading and the cost of insurance and
policy administration. Policy benefits and claims that are charged to expense
include interest credited to contracts and benefit claims incurred in the period
in excess of related policy account balances.
Recognition of Investment Contract Revenue and Benefits to
Policyholders -- Contracts that do not subject the Company to risks arising from
policyholder mortality or morbidity are referred to as investment contracts.
Retirement plan contracts and certain deferred annuities are considered
investment contracts. Amounts received as deposits for such contracts are not
reported as premium revenues.
Revenues for investment products consist of investment income and charges
assessed against contract account values for policy administration. Contract
benefits that are charged to expense include benefit claims incurred in the
period in excess of related contract balances, and interest credited to contract
balances.
CHANGES IN ACCOUNTING PRINCIPLES
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities.
Effective for transactions occurring on or after January 1, 1998, the Company
adopted those provisions of Statement of Financial Accounting Standards (SFAS)
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which were deferred by SFAS No. 127, "Deferral
of the Effective Date of Certain Provisions of FASB Statement No. 125." SFAS No.
125 requires a company to recognize the financial and servicing assets it
controls and the liabilities it has incurred and to derecognize financial assets
when control has been surrendered in accordance with the criteria provided in
SFAS No. 125. The adoption of this standard had no effect on the financial
results of the Company.
Reporting Comprehensive Income
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for the reporting and
display of comprehensive income and its components in a company's full set of
financial statements. Comprehensive income encompasses all changes in
shareholder's equity from transactions and other events and circumstances from
nonowner sources. Adoption of this standard had no effect on the financial
results of the Company.
79
<PAGE> 83
Employers' Disclosures about Pensions and Other Postretirement Benefits
Effective December 31, 1998, the Company adopted SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
requires new disclosures relating to a company's pension and other
postretirement benefit plans. Adoption of this standard had no effect on the
financial results of the Company.
Accounting for the Cost of Computer Software Developed or Obtained for Internal
Use
Effective January 1, 1998, the Company adopted Statement of Position (SOP) No.
98-1, "Accounting for the Cost of Computer Software Developed or Obtained for
Internal Use." SOP No. 98-1 provides guidance on accounting for costs associated
with computer software developed or obtained for internal use. Adoption of this
standard did not have a significant effect on the financial results of the
Company
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to current year
presentation.
NOTE 2. INVESTMENTS
FIXED MATURITY SECURITIES
The amortized cost and fair value of investments in fixed maturity securities by
type of investment were as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ----------------- FAIR
DECEMBER 31, 1999 (IN MILLIONS) COST GAINS (LOSSES) VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States Government and Government Agencies
and Authorities $ 13.1 $ .4 -- $ 13.5
States, Municipalities and Political Subdivisions 1.9 .1 $ (.5) 1.5
Foreign Governments 8.3 .1 (.1) 8.3
Public Utilities 97.9 2.7 (1.0) 99.6
Corporate Securities 984.8 12.6 (23.7) 973.7
Mortgage-Backed/Structured Finance 382.4 4.2 (11.0) 375.6
Redeemable Preferred Stock 1.2 -- (.4) .8
- -------------------------------------------------------------------------------------------------
TOTAL $1,489.6 $20.1 $(36.7) $1,473.0
- -------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ----------------- FAIR
DECEMBER 31, 1998 (IN MILLIONS) COST GAINS (LOSSES) VALUE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
United States Government and Government Agencies
and Authorities $ 24.4 $ 2.2 -- $ 26.6
States, Municipalities and Political Subdivisions 7.4 .3 -- 7.7
Foreign Governments 17.1 1.9 -- 19.0
Public Utilities 105.7 11.0 -- 116.7
Corporate Securities 1,016.4 59.7 $ (7.0) 1,069.1
Mortgage-Backed/Structured Finance 331.7 14.5 (.7) 345.5
Redeemable Preferred Stock 1.2 -- (.2) 1.0
- -------------------------------------------------------------------------------------------------
TOTAL $1,503.9 $89.6 $ (7.9) $1,585.6
- -------------------------------------------------------------------------------------------------
</TABLE>
80
<PAGE> 84
The amortized cost and fair value of fixed maturity securities 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 call or prepayment penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
DECEMBER 31, 1999 (IN MILLIONS) COST VALUE
- -----------------------------------------------------------------------------------
<S> <C> <C>
Maturing in:
One Year or Less $ 58.5 $ 58.2
One to Five Years 537.1 539.4
Five to Ten Years 376.5 369.1
Ten Years or Later 135.1 130.6
Mortgage-Backed/Structured Finance 382.4 375.7
- -----------------------------------------------------------------------------------
TOTAL $1,489.6 $1,473.0
- -----------------------------------------------------------------------------------
</TABLE>
The fair values for the actively traded marketable bonds are determined based
upon the quoted market prices. The fair values for marketable bonds without an
active market are obtained through several commercial pricing services which
provide the estimated fair values. Fair values of privately placed bonds which
are not considered problems are determined using a matrix-based pricing model.
The model considers the current level of risk-free interest rates, current
corporate spreads, the credit quality of the issuer and cash flow
characteristics of the security. Using this data, the model generates estimated
market values which the Company considers reflective of the fair value of each
privately placed bond. Fair values for privately placed bonds which are
considered problems are determined through consideration of factors such as the
net worth of the borrower, the value of collateral, the capital structure of the
borrower, the presence of guarantees and the Company's evaluation of the
borrower's ability to compete in their relevant market.
At December 31, 1999, the largest industry concentration in the private
placement portfolio was mortgage-backed/structured finance, where 22.2% of the
portfolio was invested, and the largest industry concentration in the marketable
bond portfolio was mortgage-backed/structured finance where 26.8% of the
portfolio was invested.
EQUITY SECURITIES
The cost and fair value of investments in equity securities were as follows:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Cost $ 5.3 $ 5.5
Gross Unrealized Gains .3 .4
Gross Unrealized Losses (.1) (.2)
- ------------------------------------------------------------------------------
FAIR VALUE $ 5.5 $ 5.7
- ------------------------------------------------------------------------------
</TABLE>
81
<PAGE> 85
MORTGAGE LOANS ON REAL ESTATE
Investments in mortgage loans on real estate were as follows:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Mortgage Loans, Non-Impaired $316.8 $288.1
Mortgage Loans, Impaired 2.6 2.0
- ------------------------------------------------------------------------------
319.4 290.1
- ------------------------------------------------------------------------------
Allowance for Credit Losses, Beginning of Year (1.2) (1.2)
Increases -- --
Decreases -- --
- ------------------------------------------------------------------------------
Allowances for Credit Losses, End of Year (1.2) (1.2)
- ------------------------------------------------------------------------------
TOTAL $318.2 $288.9
- ------------------------------------------------------------------------------
Average Investment in Impaired Mortgage Loans on Real Estate $ 1.3 $ 1.0
- ------------------------------------------------------------------------------
</TABLE>
The Company does not accrue interest income on impaired mortgage loans when the
likelihood of collection is doubtful, rather income is recognized for these
loans as payments are received. Interest income recognized on impaired mortgage
loans during the years ended December 31, 1999 and 1998, was $.2 million and $.2
million, respectively.
At December 31, 1999, the largest geographic concentration of commercial
mortgage loans was in the Midwest region of the United States, where
approximately 36.1% of the commercial mortgage loan portfolio was invested.
INVESTMENT INCOME
Investment income summarized by type of investment was as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Fixed Maturity Securities $119.4 $126.7
Equity Securities .3 .1
Mortgage Loans on Real Estate 24.9 23.7
Real Estate .4 .3
Policy Loans 5.7 6.1
Other Invested Assets -- .9
Short-Term Investments 1.9 2.1
- ------------------------------------------------------------------------------
Gross Investment Income 152.6 159.9
Investment Expenses 2.9 2.9
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME $149.7 $157.0
- ------------------------------------------------------------------------------
</TABLE>
82
<PAGE> 86
REALIZED INVESTMENT GAINS AND LOSSES
Net pretax realized investment gains (losses) were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Net Gains (Losses) on Sales
Fixed Maturity Securities
Gross Gains $ 3.5 $ 3.9
Gross Losses (1.4) (1.1)
Other 2.8 2.7
- ------------------------------------------------------------------------------
4.9 5.5
- ------------------------------------------------------------------------------
Provisions for Losses
Fixed Maturity Securities (3.5) (.4)
Real Estate (1.7) (.2)
- ------------------------------------------------------------------------------
(5.2) (.6)
- ------------------------------------------------------------------------------
PRETAX REALIZED INVESTMENT GAINS (LOSSES) $ (.3) $ 4.9
- ------------------------------------------------------------------------------
</TABLE>
OTHER INVESTMENT INFORMATION
Invested assets which were nonincome producing (no income received for the 12
months preceding the balance sheet date) were as follows:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Fixed Maturity Securities $ .7 $ .1
Mortgage Loans on Real Estate -- .1
Real Estate 1.6 .7
- ------------------------------------------------------------------------------
TOTAL $ 2.3 $ .9
- ------------------------------------------------------------------------------
</TABLE>
Allowances for losses on investments are reflected on the Balance Sheets as a
reduction of the related assets and were as follows:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Mortgage Loans $ 1.2 $ 1.2
Real Estate .5 1.1
- ------------------------------------------------------------------------------
</TABLE>
The components of net unrealized investment gains (losses) included in the
accumulated other comprehensive income (loss) component of shareholder's equity
are shown below:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Unrealized Investment Gains (Losses) $(14.8) $ 84.5
DAC/PVFP Adjustment .4 (19.7)
Deferred Income Taxes 5.0 (22.7)
- ------------------------------------------------------------------------------
TOTAL $ (9.4) $ 42.1
- ------------------------------------------------------------------------------
</TABLE>
83
<PAGE> 87
The change in net unrealized investment gains and losses included in the change
in accumulated other comprehensive income (loss) consisted of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Unrealized Investment Gains (Losses) Arising During The
Period(1) $(63.3) $ (.6)
Reclassification Adjustments(2) (1.3) (1.9)
Change in DAC/PVFP Adjustment(3) 13.1 4.5
- ------------------------------------------------------------------------------
TOTAL $(51.5) $ 2.0
- ------------------------------------------------------------------------------
</TABLE>
(1) Net of income taxes totaling $(34.0) million and $(.4) million for 1999 and
1998, respectively.
(2) Net of income taxes totaling $(.7) million and $(1.0) million for 1999 and
1998, respectively.
(3) Net of income taxes totaling $7.0 million and $2.5 million for 1999 and
1998, respectively.
NOTE 3. INCOME TAXES
The income tax liability reported on the Balance Sheets consisted of the
following:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Current Income Taxes $ 5.6 $ 3.9
Deferred Income Taxes 5.2 29.5
- ------------------------------------------------------------------------------
TOTAL $ 10.8 $ 33.4
- ------------------------------------------------------------------------------
</TABLE>
Deferred income taxes reflect the impact for financial statement reporting
purposes of "temporary differences" between the financial statement carrying
amounts and tax bases of assets and liabilities. The "temporary differences"
that give rise to the net deferred tax liability relate to the following:
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Future Policy and Contract Benefits $(33.3) $(43.8)
Net Unrealized Investment Losses (5.0) --
Investment Write-Offs and Allowances (8.2) (.9)
Other (4.3) (6.0)
- ------------------------------------------------------------------------------
Gross Deferred Tax Asset (50.8) (50.7)
- ------------------------------------------------------------------------------
Deferred Policy Acquisition Costs 26.2 24.0
Present Value of Future Profits 27.8 30.2
Net Unrealized Investment Gains -- 16.2
Other 2.0 9.8
- ------------------------------------------------------------------------------
Gross Deferred Tax Liability 56.0 80.2
- ------------------------------------------------------------------------------
NET DEFERRED TAX LIABILITY $ 5.2 $ 29.5
- ------------------------------------------------------------------------------
</TABLE>
The provision for income taxes reported on the Statements of Income consisted of
the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Currently Payable $ 18.6 $ 17.0
Deferred 3.4 (2.3)
- ------------------------------------------------------------------------------
TOTAL $ 22.0 $ 14.7
- ------------------------------------------------------------------------------
</TABLE>
84
<PAGE> 88
The difference between the U.S. federal income tax rate and the consolidated tax
provision rate is summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Statutory Tax Rate 35.0% 35.0%
Other .6 .8
- ------------------------------------------------------------------------------
EFFECTIVE TAX RATE 35.6% 35.8%
- ------------------------------------------------------------------------------
</TABLE>
Federal income tax regulations allowed certain special deductions for 1983 and
prior years which are accumulated in a memorandum tax account designated as
"policyholders' surplus." Generally, this policyholders' surplus account will
become subject to tax at the then current rates only if the accumulated balance
exceeds certain maximum limitations or if certain cash distributions are deemed
to be paid out of the account. At December 31, 1999, the Company had accumulated
approximately $11.3 million in its separate policyholders' surplus accounts.
Deferred taxes have not been provided on this temporary difference.
The Internal Revenue Service has completed its review of the Company's tax
return for all years through 1995.
Cash paid for federal income taxes was $16.9 million and $12.8 million for the
years ended December 31, 1999 and 1998, respectively.
NOTE 4. EMPLOYEE BENEFIT PLANS
SUCCESS SHARING PLAN AND ESOP
The Success Sharing Plan and ESOP (Success Sharing Plan) was designed to
increase employee ownership and reward employees when certain ReliaStar
performance objectives are met. Essentially all employees are eligible to
participate in the Success Sharing Plan. The Success Sharing Plan has both
qualified and nonqualified components.
The nonqualified component is equal to 25% of the annual award and is paid in
cash to employees. The qualified component is equal to 75% of the annual award
which is contributed to the ESOP portion of the Success Sharing Plan.
In addition, the Success Sharing Plan has a 401(k) feature whereby participants
may elect to contribute a percentage of their eligible earnings to the plan.
Beginning in 1999, the Company matched participants' 401(k) contributions up to
6% of eligible earnings.
Costs charged to expense for the Success Sharing Plan were $.5 million and $.5
million for the years ended December 31, 1999 and 1998, respectively.
PENSION AND OTHER POSTRETIREMENT BENEFITS
The Company participates in funded and unfunded noncontributory defined benefit
retirement plans, sponsored by ReliaStar Life, which provide benefits to all
employees upon retirement. Effective December 31, 1998, the qualified defined
benefit retirement plan was amended to suspend the accrual of additional
benefits for future services. Eligible employees retain all of their accrued
benefits as of December 31, 1998, which will be paid monthly at retirement
according to the provisions of the plan. Employees meeting certain age and
service requirements will receive certain transition benefits until retirement.
A curtailment gain was recorded in 1998 to reflect the impact of this plan
amendment and the impact of employee reductions resulting from the transfer of
certain accident and health administrative operations to a third party.
The Company provides certain health care and life insurance benefits to retired
employees and their eligible dependents through plans sponsored by ReliaStar
Life. The postretirement health care plan is contributory, with retiree
contribution levels adjusted annually; the life insurance plan provides a flat
amount of noncontributory coverage and optional contributory coverage.
The net periodic pension benefit allocated to the Company for all plans was $.3
million and $.3 million for the years ended December 31, 1999 and 1998,
respectively.
85
<PAGE> 89
STOCK INCENTIVE PLAN
Officers and key employees of the Company participate in the stock incentive
plans of ReliaStar. ReliaStar applies Accounting Principles Board Opinion No. 25
and related interpretations in accounting for its plans. Accordingly, the
Company has recorded no compensation expense for its stock-based compensation
plans other than for restricted stock and performance-based awards.
NOTE 5. UNPAID ACCIDENT AND HEALTH CLAIMS
The change in the liability for unpaid accident and health claims and claim
adjustment expenses is summarized as follows:
<TABLE>
<CAPTION>
(IN MILLIONS) 1999 1998
- ----------------------------------------------------------------------------
<S> <C> <C>
Balance at January 1 $13.6 $ 9.3
Less Reinsurance Recoverables 9.1 3.1
- ----------------------------------------------------------------------------
Net Balance at January 1 4.5 6.2
Incurred Related to:
Current Year .5 .9
Prior Years .7 .8
- ----------------------------------------------------------------------------
Total Incurred 1.2 1.7
Paid Related to:
Current Year .3 .4
Prior Years .5 3.0
- ----------------------------------------------------------------------------
Total Paid .8 3.4
Net Balance at December 31 4.9 4.5
Plus Reinsurance Recoverables 10.9 9.1
- ----------------------------------------------------------------------------
BALANCE AT DECEMBER 31 $15.8 $13.6
- ----------------------------------------------------------------------------
</TABLE>
The liability for unpaid accident and health claims and claim adjustment
expenses is included in Future Policy and Contract Benefits on the Balance
Sheets.
NOTE 6. SHAREHOLDER'S EQUITY
SHARE DATA
The authorized capital stock of the Company consists of 1,377,863 common shares
with a par value of $2.00 per share, all of which are issued and outstanding.
DIVIDEND RESTRICTIONS
The Company's ability to pay cash dividends to its parent is restricted by law
or subject to approval of the insurance regulatory authorities of the State of
New York. These authorities recognize only statutory accounting practices for
determining the ability of an insurer to pay dividends to its shareholders.
Under New York insurance law regulating the payment of dividends by the Company,
any such payment must be paid solely from the earned surplus of the Company and
advance notice thereof must be provided to the Superintendent of the New York
Department of Insurance (the Superintendent). Earned surplus means the earned
surplus as determined in accordance with statutory accounting practices
(unassigned funds), less the amount of such earned surplus which is attributable
to unrealized capital gains. Further, without approval of the Superintendent,
the Company may not pay in any calendar year any dividend which, when combined
with other dividends paid within the preceding 12 months, exceeds the lesser of
(i) 10% of the Company's statutory surplus at the prior year end or (ii) 100% of
the Company's statutory net investment income for the prior calendar year.
86
<PAGE> 90
STATUTORY SURPLUS AND NET INCOME
Net income of the Company, as determined in accordance with statutory accounting
practices, was $30.9 million and $19.6 million for 1999 and 1998, respectively.
The Company's statutory capital and surplus was $221.8 million and $202.4
million at December 31, 1999 and 1998, respectively.
NOTE 7. REINSURANCE
The Company is a member of reinsurance associations established for the purpose
of ceding the excess of life insurance over retention limits.
Reinsurance contracts do not relieve the Company from its obligations to
policyholders. Failure of reinsurers to honor their obligations could result in
losses to the Company; consequently, allowances are established for amounts
deemed uncollectible. The amount of the allowance for uncollectible reinsurance
receivables was immaterial at December 31, 1999 and 1998. The Company evaluates
the financial condition of its reinsurers and monitors concentrations of credit
risk to minimize its exposure to significant losses from reinsurer insolvencies.
The Company's retention limit is $300,000 per insurable life for individual
coverage. For group coverage and reinsurance assumed, the retention is $300,000
per life with per occurrence limitations, subject to certain maximums.
As of December 31, 1999, approximately 59% of the Company's reinsurance ceded,
based on inforce, was ceded to one reinsurer. As of December 31, 1999, $3.8
billion of life insurance in force was ceded to other companies. The Company had
assumed $2.7 billion of life insurance in force as of December 31, 1999.
The effect of reinsurance on premiums and recoveries was as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (IN MILLIONS) 1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Direct Premiums $ 71.5 $ 76.7
Reinsurance Assumed 2.4 2.5
Reinsurance Ceded (31.1) (37.5)
- ------------------------------------------------------------------------------
NET PREMIUMS $ 42.8 $ 41.7
- ------------------------------------------------------------------------------
REINSURANCE RECOVERIES $ 18.0 $ 18.6
- ------------------------------------------------------------------------------
</TABLE>
NOTE 8. RELATED PARTY TRANSACTIONS
The Company and its affiliates have entered into agreements whereby affiliates
and the Company provide certain management, administrative, legal, and other
services for each other. The net amounts billed to the Company were $25.3
million and $20.5 million in 1999 and 1998, respectively. The net costs
allocated to the Company under these agreements may not be indicative of costs
the Company might incur if these services were not provided by the Company's
affiliates. During 1999, the Company paid cash dividends of $8.0 million to
Security-Connecticut.
ReliaStar Life and Security-Connecticut reinsure certain life policies written
by the Company. Premiums ceded under these agreements were $14.4 million and
$15.6 million for the years ended December 31, 1999 and 1998, respectively; and
the net amount recoverable by the Company under these agreements were $14.1
million and $10.5 million as of December 31, 1999 and 1998, respectively.
NOTE 9. COMMITMENTS AND CONTINGENCIES
LITIGATION
The Company is a defendant in a number of lawsuits arising out of the normal
course of its business. Some of the claims may seek to be granted class action
status and many of the claims seek both compensatory and punitive damages. In
the opinion of management, the ultimate resolution of such litigation will not
have a material adverse impact to the financial position of the Company. It
should be noted, however, that a number
87
<PAGE> 91
of financial services companies have been subjected to significant awards in
connection with punitive damages claims and the Company can make no assurances
that it will not be subjected to such an award.
FINANCIAL INSTRUMENTS
The Company is a party to financial instruments with on and off-balance-sheet
risk in the normal course of business to reduce its exposure to fluctuations in
interest rates. These financial instruments include commitments to extend credit
and interest rate swaps. Those instruments involve, to varying degrees, elements
of credit, interest rate or liquidity risk in excess of the amount recognized in
the Balance Sheets.
The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual amount of those instruments. The Company uses the
same credit policies in making commitments and conditional obligations as it
does for on-balance-sheet instruments. For interest rate swap transactions, the
contract or notional amounts do not represent exposure to credit loss. For
swaps, the Company's exposure to credit loss is limited to those swaps where the
Company has an unrealized gain.
Unless otherwise noted, the Company does not require collateral or other
security to support financial instruments with credit risk.
<TABLE>
<CAPTION>
DECEMBER 31 (IN MILLIONS) 1999 1998
- ---------------------------------------------------------------------------
<S> <C> <C>
CONTRACT OR NOTIONAL AMOUNT
Financial Instruments Whose Contract Amounts Represent
Credit Risk
Commitments to Extend Credit $5.9 $16.2
Financial Instruments Whose Notional or Contract Amounts
Exceed the Amount of Credit Risk
Interest Rate Swap Agreements 50.0 62.0
- ---------------------------------------------------------------------------
</TABLE>
Commitments to Extend Credit -- Commitments to extend credit are legally binding
agreements to lend to a customer. Commitments generally have fixed expiration
dates or other termination clauses and may require payment of a fee. They
generally may be terminated by the Company in the event of deterioration in the
financial condition of the borrower. Since some of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future liquidity requirements. The Company evaluates each
customer's creditworthiness on a case-by-case basis.
Interest Rate Swap Agreements -- The Company enters into interest rate swap
agreements to manage interest rate exposure. The primary reason for the interest
rate swap agreements is to extend the duration of adjustable rate investments.
Interest rate swap transactions generally involve the exchange of fixed and
floating rate interest payment obligations without the exchange of the
underlying principal amounts. Changes in market interest rates impact income
from adjustable rate investments and have an opposite (and approximately
offsetting) effect on the reported income from the swap portfolio. The risks
under interest rate swap agreements are generally similar to those of futures
contracts. Notional principal amounts are often used to express the volume of
these transactions but do not represent the much smaller amounts potentially
subject to credit risk. The amount subject to credit risk is approximately equal
to the unrealized gain on the agreements. At December 31, 1999, there was no
unrealized gain on the agreements.
LEASES
The Company has operating leases for office space and certain computer
processing and other equipment. Rental expense for these items was $1.8 million
for both 1999 and 1998.
Future minimum aggregate rental commitments at December 31, 1999, for operating
leases were as follows:
<TABLE>
<CAPTION>
(IN MILLIONS)
- ---------------------------------------------------------------------------------------
<S> <C>
2000 - $1.8 2003 - $.7
2001 - $1.8 2004 - $.7
2002 - $1.2 2005 and thereafter - $.7
- ---------------------------------------------------------------------------------------
</TABLE>
88
<PAGE> 92
NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures are made in accordance with the requirements of SFAS
No. 107, "Disclosures about Fair Value of Financial Instruments." SFAS No. 107
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate that value. In cases where quoted market prices are not available, fair
values are based on estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions used, including
the discount rate and estimates of future cash flows. In that regard, the
derived fair value estimates, in many cases, could not be realized in immediate
settlement of the instrument.
SFAS No. 107 excludes certain financial instruments and all nonfinancial
instruments from its disclosure requirements. Accordingly, the aggregate fair
value amounts presented do not represent the underlying value of the Company.
The fair value estimates presented herein are based on pertinent information
available to Management as of December 31, 1999 and 1998, respectively. Although
Management is not aware of any factors that would significantly affect the
estimated fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since those dates;
therefore, current estimates of fair value may differ significantly from the
amounts presented herein.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
FIXED MATURITY SECURITIES -- The estimated fair value disclosures for fixed
maturity securities satisfy the fair value disclosure requirements of SFAS No.
107 (see Note 2).
EQUITY SECURITIES -- Fair value equals carrying value as these securities are
carried at quoted market value.
MORTGAGE LOANS ON REAL ESTATE -- The fair values for mortgage loans on real
estate are estimated using discounted cash flow analyses and rates currently
being offered in the marketplace for similar loans to borrowers with similar
credit ratings. Loans with similar characteristics are aggregated for purposes
of the calculations.
CASH, SHORT-TERM INVESTMENTS AND POLICY LOANS -- The carrying amounts for these
assets approximate the assets' fair values.
OTHER FINANCIAL INSTRUMENTS REPORTED AS ASSETS -- The carrying amounts for these
financial instruments (primarily premiums and other accounts receivable and
accrued investment income) approximate those assets' fair values.
INVESTMENT CONTRACT LIABILITIES -- The fair value for deferred annuities was
estimated to be the amount payable on demand at the reporting date, as those
investment contracts have no defined maturity and are similar to a deposit
liability. The amount payable at the reporting date was calculated as the
account balance less applicable surrender charges.
The fair values for supplementary contracts without life contingencies and
immediate annuities were estimated using discounted cash flow analyses. The
discount rate was based upon treasury rates plus a pricing margin.
The carrying amounts reported for other investment contracts, which includes
retirement plan deposits, approximate those liabilities' fair value.
CLAIM AND OTHER DEPOSIT FUNDS -- The carrying amounts for claim and other
deposit funds approximate the liabilities' fair value.
OTHER FINANCIAL INSTRUMENTS REPORTED AS LIABILITIES -- The carrying amounts for
other financial instruments (primarily normal payables of a short-term nature)
approximate those liabilities' fair values.
89
<PAGE> 93
The carrying amounts and estimated fair values of the Company's financial
instruments were as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
DECEMBER 31 (IN MILLIONS) AMOUNT VALUE AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL INSTRUMENTS RECORDED AS ASSETS
Fixed Maturity Securities $1,473.0 $1,473.0 $1,585.6 $1,585.6
Equity Securities 5.5 5.5 5.7 5.7
Mortgage Loans on Real Estate
Commercial 266.8 265.2 247.1 262.8
Residential and Other 51.4 51.2 41.8 42.8
Policy Loans 83.8 83.8 81.6 81.6
Cash and Short-Term Investments 15.3 15.3 35.9 35.9
Other Financial Instruments Recorded as Assets 33.4 33.4 39.1 39.1
FINANCIAL INSTRUMENTS RECORDED AS LIABILITIES
Investment Contracts
Deferred Annuities (654.0) (635.8) (747.2) (729.1)
Supplementary Contracts and Immediate
Annuities (31.4) (31.6) (31.9) (33.1)
Other Investment Contracts (11.8) (11.8) (11.8) (11.8)
Claim and Other Deposit Funds (9.3) (9.3) (7.1) (7.1)
Other Financial Instruments Recorded as
Liabilities (39.1) (39.1) (51.0) (51.0)
- ------------------------------------------------------------------------------------------------
</TABLE>
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates do not reflect any premium or discount that could result from offering
for sale at one time the Company's holdings of a particular financial
instrument. Because no market exists for a significant portion of the Company's
financial instruments, fair value estimates are based on judgments regarding
future expected loss experience, current economic conditions, risk
characteristics of various financial instruments and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing on and off-balance sheet financial
instruments without attempting to estimate the value of anticipated future
business and the value of assets and liabilities that are not considered
financial instruments. In addition, the tax ramifications related to the
realization of the unrealized gains and losses can have a significant effect on
fair value estimates and have not been considered in the estimates.
90
<PAGE> 94
APPENDIX A
THE FIXED ACCOUNT
The Fixed Account consists of all of our assets other than those in our
separate accounts. We have complete ownership and control of all of the assets
of the Fixed Account.
Because of exemptions and exclusions contained in the Securities Act of
1933 and the Investment Company Act of 1940, the Fixed Account has not been
registered under these acts. Neither the Fixed Account nor any interest in it is
subject to the provisions of these acts and as a result the SEC has not reviewed
the disclosures in this Prospectus relating to the Fixed Account. However,
disclosures relating to the Fixed Account are subject to generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
We guarantee both principal and interest on amounts credited to the Fixed
Account. We credit interest at an effective annual rate of at least 4%,
independent of the investment experience of the Fixed Account. From time to
time, we may guarantee interest at a rate higher than 4%.
ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS
OF 4% PER YEAR WILL BE DETERMINED AT OUR SOLE DISCRETION. YOU ASSUME THE RISK
THAT INTEREST CREDITED TO THE FIXED ACCOUNT MAY NOT EXCEED THE MINIMUM GUARANTEE
OF 4% FOR A GIVEN YEAR.
We do not use a specific formula for determining excess interest credits.
However, we consider the following:
- General economic trends,
- Rates of return currently available on our investments,
- Rates of return anticipated in our investments, regulatory and tax
factors, and
- Competitive factors.
We are not aware of any statutory limitations to the maximum amount of
interest we may credit and our Board of Directors has not set any limitations.
The Fixed Accumulation Value of the Policy is the sum of the Net Premiums
credited to it in the Fixed Account. It is increased by transfers and Loan
Amounts from the Variable Account, and interest credits. It is decreased by
Monthly Deductions and partial withdrawals taken from it in the Fixed Account
and transfers to the Variable Account. The Fixed Accumulation Value will be
calculated at least monthly on the monthly anniversary date.
You may transfer all or part of your Fixed Accumulation Value to the
Sub-Accounts of the Variable Account, subject to the following transfer
limitations:
- The request to transfer must be postmarked no more than 30 days before
the Policy Anniversary and no later than 30 days after the Policy
Anniversary. Only one transfer is allowed during this period.
- The Fixed Accumulation Value after the transfer must be at least equal to
the Loan Amount.
- No more than 50% of the Fixed Accumulation Value (minus any Loan Amount)
may be transferred unless the balance, after the transfer, would be less
than $1,000. If the balance would be less than $1,000, the full Fixed
Accumulation Value (minus any Loan Amount) may be transferred.
- You must transfer at least:
-- $500, or
-- the total Fixed Accumulation Value (minus any Loan Amount) if less
than $500.
We make the Monthly Deduction from your Fixed Accumulation Value in
proportion to the total Accumulation Value of the Policy.
The Surrender Charge described in the Prospectus applies to the total
Accumulation Value, which includes the Fixed Accumulation Value. If the Owner
surrenders the Policy for its Cash Surrender Value, the Fixed Accumulation Value
will be reduced by any applicable Surrender Charge, any Loan Amount and unpaid
Monthly Deductions applicable to the Fixed Account.
A-1
<PAGE> 95
APPENDIX B
CALCULATION OF ACCUMULATION VALUE
The Accumulation Value of the Policy is equal to the sum of the Variable
Accumulation Value plus the Fixed Accumulation Value.
VARIABLE ACCUMULATION VALUE
The Variable Accumulation Value is the total of your values in each
Sub-Account. The value for each Sub-Account is equal to:
1 multiplied by 2, where:
1
Is your current number of Accumulation Units (described below).
2
Is the current Unit Value (described below).
The Variable Accumulation Value will vary from Valuation Date to Valuation
Date (described below) reflecting changes in 1 and 2 above.
ACCUMULATION UNITS. When transactions are made which affect the Variable
Accumulation Value, dollar amounts are converted to Accumulation Units. The
number of Accumulation Units for a transaction is found by dividing the dollar
amount of the transaction by the current Unit Value.
The number of Accumulation Units for a Sub-Account increases when:
- Net Premiums are credited to that Sub-Account; or
- Transfers from the Fixed Account or other Sub-Accounts are credited to
that Sub-Account.
The number of Accumulation Units for a Sub-Account decreases when:
- You take out a Policy loan from that Sub-Account;
- You take a partial withdrawal from that Sub-Account;
- We take a portion of the Monthly Deduction from that Sub-Account; or
- Transfers are made from that Sub-Account to the Fixed Account or other
Sub-Accounts.
UNIT VALUE. The Unit Value for a Sub-Account on any Valuation Date is equal
to the previous Unit Value times the Net Investment Factor for that Sub-Account
(described below) for the Valuation Period (described below) ending on that
Valuation Date. The Unit Value was initially set at $10 when the Sub-Account
first purchased Fund shares.
NET INVESTMENT FACTOR. The Net Investment Factor is a number that reflects
charges to the Policy and the investment performance during a Valuation Period
of the Fund in which a Sub-Account is invested. If the Net Investment Factor is
greater than one, the Unit Value is increased. If the Net investment Factor is
less than one, the Unit Value is decreased. The Net Investment Factor for a
Sub-Account is determined by dividing 1 by 2.
(1/2), where:
1
Is the result of:
- The net asset value per share of the Fund shares in which the Sub-Account
invests, determined at the end of the current Valuation Period;
B-1
<PAGE> 96
- Plus the per share amount of any dividend or capital gain distributions
made on the Fund shares in which the Sub-Account invests during the
current Valuation Period;
- Plus or minus a per share charge or credit for any taxes reserved which
we determine has resulted from the investment operations of the
Sub-Account and to be applicable to the Policy.
2
Is the result of:
- The net asset value per share of the Fund shares held in the Sub-Account,
determined at the end of the last prior Valuation Period;
- Plus or minus a per share charge or credit for any taxes reserved for
during the last prior Valuation Period which we determine resulted from
the investment operations of the Sub-Account and was applicable to the
Policy.
VALUATION DATE; VALUATION PERIOD. A Valuation Date is each day the New York
Stock Exchange is open for business except for a day that a Sub-Account's
corresponding Fund does not value its shares. A Valuation Period is the period
between two successive Valuation Dates, commencing at the close of business of a
Valuation Date and ending at the close of business on the next Valuation Date.
FIXED ACCUMULATION VALUE
The Fixed Accumulation Value on the Policy Date is your Net Premium
credited to the Fixed Account on that date minus the Monthly Deduction
applicable to the Fixed Accumulation Value for the first Policy Month.
After the Policy Date, the Fixed Accumulation Value is calculated as:
1 + 2 + 3 + 4 - 5 - 6, where:
1
Is the Fixed Accumulation Value on the preceding Monthly Anniversary, plus
interest from the Monthly Anniversary to the date of the calculation.
2
Is the total of your Net Premiums credited to the Fixed Account since the
preceding Monthly Anniversary, plus interest from the date premiums are credited
to the date of the calculation.
3
Is the total of your transfers from the Variable Account to the Fixed Account
since the preceding Monthly Anniversary, plus interest from the date of transfer
to the date of the calculation.
4
Is the total of your Loan Amount transferred from the Variable Account since the
preceding Monthly Anniversary.
5
Is the total of your transfers to the Variable Account from the Fixed Account
since the preceding Monthly Anniversary, plus interest from the date of transfer
to the date of the calculation.
6
Is the total of your partial withdrawals from the Fixed Account since the
preceding Monthly Anniversary, plus interest from the date of withdrawal to the
date of the calculation.
If the date of the calculation is a Monthly Anniversary, we also reduce the
Fixed Accumulation Value by the applicable Monthly Deduction for the Policy
Month following the Monthly Anniversary.
The minimum interest rate applied in the calculation of the Fixed
Accumulation Value is an effective annual rate of 4%. Interest in excess of the
minimum rate may be applied in the calculation of your Fixed Accumulation Value
in a manner which our Board of Directors determines.
B-2
<PAGE> 97
APPENDIX C
MAXIMUM SURRENDER CHARGE PER $1,000 OF FACE AMOUNT
<TABLE>
<CAPTION>
INSURED'S AGE AT INSURED'S AGE AT
POLICY DATE OR POLICY DATE OR
EFFECTIVE DATE OF CHARGE PER $1,000 OF FACE AMOUNT EFFECTIVE DATE OF CHARGE PER $1,000 OF FACE AMOUNT
INCREASE, AS (INITIAL FACE AMOUNT OR AMOUNT OF INCREASE, AS (INITIAL FACE AMOUNT OR AMOUNT OF
APPROPRIATE REQUESTED INCREASE) APPROPRIATE REQUESTED INCREASE)
- ----------------- --------------------------------- ----------------- ---------------------------------
MALE FEMALE MALE FEMALE
NONSMOKER NONSMOKER NONSMOKER NONSMOKER
AND STANDARD AND STANDARD AND STANDARD AND STANDARD
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
0 6.00 6.00 38 17.40 16.10
1 6.10 6.00 39 17.80 16.50
2 6.20 6.00 40 18.30 16.80
3 6.30 6.00 41 18.80 17.20
4 6.40 6.00 42 19.30 17.60
5 6.50 6.00 43 19.80 18.10
6 6.60 6.00 44 20.40 18.50
7 6.80 6.00 45 20.90 19.00
8 7.00 6.00 46 21.60 19.50
9 7.20 6.20 47 22.20 20.00
10 7.50 6.40 48 22.90 20.60
11 7.80 6.60 49 23.70 21.20
12 8.00 6.80 50 24.50 21.80
13 8.20 7.00 51 25.30 22.40
14 8.50 7.20 52 26.20 23.10
15 8.80 7.40 53 27.20 23.90
16 9.00 7.60 54 28.20 24.60
17 9.20 7.80 55 29.30 25.50
18 9.50 8.00 56 30.40 26.30
19 9.80 8.20 57 31.60 27.20
20 10.00 8.50 58 32.90 28.20
21 10.30 8.90 59 34.30 29.30
22 10.90 9.20 60 35.70 30.40
23 11.30 9.50 61 37.30 31.60
24 11.90 10.00 62 39.00 32.90
25 12.50 10.50 63 40.70 34.30
26 12.80 11.10 64 42.60 35.80
27 13.40 11.70 65 44.60 37.30
28 13.80 12.30 66 46.70 38.90
29 14.40 12.70 67 48.90 40.60
30 14.70 13.00 68 48.60 42.40
31 15.00 13.60 69 48.30 44.40
32 15.30 14.20 70 48.10 46.60
33 15.60 14.60 71 47.80 47.90
34 15.90 14.80 72 47.60 47.50
35 16.20 15.10 73 47.40 47.10
36 16.60 15.40 74 47.20 46.70
37 17.00 15.80 75 46.90 46.20
</TABLE>
- --------------------------------------------------------------------------------
C-1
<PAGE> 98
APPENDIX D
SURRENDER CHARGE WHOLE LIFE PREMIUM PER $1,000 OF FACE AMOUNT
The following table provides the Surrender Charge Whole Life Premium factors
that are used in determining the Premium Related Surrender Charge Reduction. See
section entitled "Surrender Charge" in the Prospectus.
<TABLE>
<CAPTION>
SURRENDER CHARGE WHOLE LIFE SURRENDER CHARGE WHOLE LIFE
INSURED'S AGE PREMIUM PER $1,000 OF INITIAL INSURED'S AGE PREMIUM PER $1,000 OF INITIAL
AT POLICY DATE FACE AMOUNT AT POLICY DATE FACE AMOUNT
- -------------- ----------------------------- -------------- -----------------------------
MALE FEMALE MALE FEMALE
NONSMOKER NONSMOKER NONSMOKER NONSMOKER
AND SMOKER AND SMOKER AND SMOKER AND SMOKER
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
0 $ 3.31 $ 2.81 38 $ 13.31 $11.43
1 3.34 2.85 39 13.93 11.94
2 3.45 2.94 40 14.58 12.47
3 3.55 3.04 41 15.27 13.02
4 3.67 3.13 42 16.00 13.61
5 3.79 3.24 43 16.77 14.22
6 3.92 3.35 44 17.58 14.87
7 4.06 3.46 45 18.44 15.55
8 4.21 3.58 46 19.36 16.27
9 4.36 3.71 47 20.32 17.03
10 4.53 3.85 48 21.35 17.83
11 4.70 3.99 49 22.44 18.67
12 4.87 4.13 50 23.60 19.57
13 5.05 4.29 51 24.84 20.52
14 5.24 4.45 52 26.15 21.52
15 5.42 4.61 53 27.55 22.59
16 5.61 4.78 54 29.04 23.71
17 5.80 4.96 55 30.63 24.91
18 6.00 5.14 56 32.31 26.18
19 6.21 5.33 57 34.11 27.54
20 6.42 5.53 58 36.03 28.99
21 6.65 5.74 59 38.08 30.55
22 6.89 5.96 60 40.28 32.23
23 7.14 6.19 61 42.63 34.03
24 7.41 6.44 62 45.15 35.98
25 7.69 6.69 63 47.84 38.06
26 8.00 6.96 64 50.72 40.29
27 8.32 7.24 65 53.79 42.67
28 8.66 7.53 66 57.09 45.23
29 9.02 7.84 67 60.62 47.98
30 9.40 8.16 68 64.41 50.96
31 9.80 8.50 69 68.50 54.21
32 10.22 8.86 70 72.90 57.75
33 10.67 9.24 71 77.65 61.62
34 11.14 9.63 72 82.75 65.84
35 11.64 10.05 73 88.20 70.41
36 12.17 10.49 74 94.00 75.36
37 12.73 10.95 75 100.17 80.71
</TABLE>
- --------------------------------------------------------------------------------
D-1
<PAGE> 99
(This Page Intentionally Left Blank)
<PAGE> 100
UNDERTAKINGS TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities and
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
Insofar as indemnification for liability arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant 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, the Registrant 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 Act and will
be governed by the final adjudication of such issue.
"REASONABLENESS" REPRESENTATION PURSUANT TO 26(e)(2)(A)
OF THE INVESTMENT COMPANY ACT OF 1940
Depositor represents that the fees and charges deducted under the flexible
premium variable life insurance policy, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by ReliaStar Life Insurance Company of New York.
II-1
<PAGE> 101
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, Registrant certifies that it meets all of the requirements
of effectiveness of Post-Effective Amendment No. 5 to this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
caused this Amendment to this Registration Statement to be signed on its behalf,
in the City of Minneapolis, and State of Minnesota, on this 7th day of April,
2000.
RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK
VARIABLE LIFE SEPARATE ACCOUNT I
(Registrant)
By: RELIASTAR LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ ROBERT C. SALIPANTE
------------------------------------
Robert C. Salipante
Vice Chairman
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Depositor has caused Post-Effective Amendment No. 5 to this Registration
Statement to be signed on its behalf, in the City of Minneapolis and State of
Minnesota, on this 7th day of April, 2000.
RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK
(Depositor)
By: /s/ ROBERT C. SALIPANTE
------------------------------------
Robert C. Salipante
Vice Chairman
As required by the Securities Act of 1933, Post-Effective Amendment No. 5 to
this Registration Statement has been signed on this 7th day of April, 2000 by
the following directors and officers of Depositor in the capacities indicated:
<TABLE>
<C> <S>
/s/ ROBERT C. SALIPANTE Vice Chairman
- --------------------------------------------------------
Robert C. Salipante
/s/ JAMES R. MILLER Vice President, Treasurer and Controller
- --------------------------------------------------------
James R. Miller
</TABLE>
Stephen A. Carb
R. Michael Conley
Richard R. Crowl
James R. Gelder
Ambassador Ulric Haynes, Jr.
Wayne R. Huneke
Mark S. Jordahl
Kenneth U. Kuk
James R. Miller
Fioravante G. Perrotta
Robert C. Salipante
John G. Turner
Charles B. Updike
Ross M. Weale
- ---------------
* A majority of the Board of Directors
* Gregory A. Olson, by signing his name hereto, does hereby sign this document
on behalf of each of the above-named directors of ReliaStar Life Insurance
Company of New York pursuant to powers of attorney duly executed by such
persons.
/s/ GREGORY A. OLSON
--------------------------------------
Gregory A. Olson, Attorney-In-Fact
II-2
<PAGE> 102
PART II
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The Facing Sheet
The general form of Prospectus, consisting of 96 pages.
Undertaking to file reports.
Rule 484 Undertaking.
"Reasonableness" representation pursuant to Section 26(e)(2)(A) of the
Investment Company Act of 1940.
The signatures.
Written consents of the following persons:
1. Gregory A. Olson -- Filed as part of Ex-99.2
2. Steve P. West, FSA, MAAA -- Filed as Ex-99.C.6
3. Independent Auditor's Consent of Deloitte & Touche -- Filed as Ex-99.C.1
The following exhibits:
1. The following exhibits correspond to those required by Paragraph A
of the instructions as to exhibits in Form N-8B-2:
<TABLE>
<C> <S> <C>
(1) (a) Resolution of Board of Directors of ReliaStar Life Insurance
Company of New York ("RLICNY") establishing the RLICNY
Variable Life Separate Account I.(1)
(b) Resolution of Board of Directors of RLICNY changing the name
of RLICNY changing the name of RLICNY Separate Account I.(4)
(2) Not applicable.
(3) (a) Form of General Distributor Agreement between Washington
Square Securities Inc. and RLICNY.(2)
(b) Specimens of WSSI Selling Agreements.(2)
(4) Not applicable.
(5) (a) Form of Policy available (together with available Policy
riders).(4)
(b) Policy Illustration.
(6) (a) Amended Charter of RLICNY.(4)
(b) Amended Bylaws of RLICNY.(4)
(7) Not applicable.
(8) (a) Form of Participation Agreement by and between RLICNY and
Fred Alger Management, Inc.(3)
Exhibit -- Form of Amendment to Participation Agreement.
(b) Form of Amendment No. 1 to Participation Agreement by and
between Depositor and Fred Alger Management, Inc.(5)
(c) Participation Agreement with Fidelity's Variable Insurance
Products Fund and Fidelity Distributors Corporation and Form
of Amendment No. 1.(1)
(d) Form of Amendment Nos. 2 and 3 to Participation Agreement
with Fidelity's Variable Insurance Products Fund and
Fidelity Distributors Corporation.(4)
(e) Form of Amendment No. 4 to Participation Agreement among
Depositor and Fidelity's Variable Insurance Products Fund
and Fidelity Distributors Corporation.(5)
(f) Participation Agreement with Fidelity's Variable Insurance
Products Fund II and Fidelity Distributors Corporation and
Form of Amendment No. 1.(1)
</TABLE>
II-3
<PAGE> 103
<TABLE>
<C> <S> <C>
(g) Form of Amendment Nos. 2 and 3 to Participation Agreement with Fidelity's Variable Insurance Products
Fund II and Fidelity Distributors Corporation.(4)
(h) Form of Amendment No. 4 to Participation Agreement among Depositor and Fidelity's Variable Insurance
Products Fund II and Fidelity Distributors Corporation.(5)
(i) Form of Participation Agreement by and between RLICNY and Janus Aspen Series.(3)
(j) Form of Amendment No. 1 to Participation by and between Depositor and Janus Aspen Series.(5)
(k) Form of Participation Agreement by and between RLICNY, Neuberger Berman Advisers Management Trust,
Advisers Managers Trust and Neuberger Berman Management Inc.(3)
(l) Amendment No. 1 to Participation Agreement by and among Depositor, Neuberger Berman Advisers
Management Trust, Advisers Managers Trust and Neuberger Berman Management Inc.(5)
(m) Form of Participation Agreement by and between RLICNY and OpCap Advisors.(3)
(n) Amendment No. 1 to Participation Agreement by and between Depositor and OpCap Advisors.(5)
(o) Form of Participation Agreement with Putnam Variable Trust (formerly known as Putnam Capital Manager
Trust) and Putnam Mutual Funds Corp.(2)
(p) Form of Service Agreement by and between RLICNY and Janus Capital Corporation.(3)
(q) Form of Amendment No. 1 to Participation Agreement with Putnam Variable Trust and Putnam Mutual Funds
Corp.(4)
(r) Form of Amendment No. 2 to Participation Agreement among Depositor and Putnam Variable Trust and
Putnam Mutual Funds Corp.(5)
(s) Form of Service Agreement by and RLICNY and Fred Alger Management, Inc.(3)
(t) Form of Service Contract with Fidelity Distributors Corporation.(2)
(u) Form of Service Agreement with Fidelity Investments Institutional Operations Company, Inc.(2)
(v) Form of Service Agreement by and between RLICNY and Neuberger Berman Management Inc.(3)
(w) Form of Service Agreement by and between RLICNY and OpCap Advisors.(3)
(x) Form of Management Services Agreement with ReliaStar Life Insurance Company.(1)
(y) Form of Participation Agreement by and between AIM Variable Insurance Funds, Inc., A I M Distributors,
Inc., and ReliaStar Life Insurance Company of New York.
(z) Form of Administrative Services Agreement between ReliaStar Life Insurance Company, Northern Life
Insurance Company, ReliaStar Life Insurance Company of New York and A I M Advisors, Inc.
(9) Not applicable.
(10) (a) Policy application.(4)
(b) Supplement to Policy Application Form.
</TABLE>
2. Opinion and consent of Gregory A. Olson, Esquire, as to the legality of
the Securities being registered. Filed as part of EX-99.2.
3. Not applicable.
4. Not applicable.
<TABLE>
<S> <C>
EX-99.C1. Independent Auditors' Consent.
EX-99.C2. Not applicable.
EX-99.C3. Not applicable.
EX-99.C4. See EX-99.2.
EX-99.C5. Not applicable.
EX-99.C6. Actuarial Opinion and Consent.
</TABLE>
II-4
<PAGE> 104
<TABLE>
<S> <C>
EX-99.D1. Memorandum describing RLICNY's issuance, transfer and
redemption procedures for the Policies and RLICNY's
procedure for conversion to a fixed benefit policy.(4)
EX-24. Powers of Attorney.
Stephen A. Carb
R. Michael Conley
Richard R. Crowl
James R. Gelder
Ambassador Ulric Haynes, Jr.
Wayne R. Huneke
Mark S. Jordahl
Kenneth U. Kuk
James R. Miller
Fioravante G. Perrotta
Robert C. Salipante
John G. Turner
Charles B. Updike
Ross M. Weale
</TABLE>
- ---------------
(1) Incorporated by reference to Registrant's Form S-6 Registration Statement,
File No. 333-19123, filed December 31, 1996.
(2) Incorporated by reference to Registrant's Form S-6 Registration Statement,
File No. 333-19123, filed May 9, 1997.
(3) Incorporated by reference to Registrant's Form S-6 Registration Statement,
File No. 333-19123, filed August 1, 1997.
(4) Incorporated by reference to Registrant's Form S-6 Registration Statement,
File No. 333-47527, filed March 6, 1998.
(5) Incorporated by reference to Registration's Form S-6 Registration Statement,
File No. 333-19123, filed on April 30, 1999.
II-5
<PAGE> 105
INDEX TO EXHIBITS
<TABLE>
<S> <C>
EX-99.1.(5)(b) Policy Illustration
EX-99.1(8)(a) Amendment to Participation Agreement
EX-99.1(8)(y) Participation Agreement
EX-99.1(8)(z) Administrative Services Agreement
EX-1(10)(b) Supplemental Application
EX-99.2. Opinion and consent of Gregory A. Olson, Esquire, as to the
legality of the Securities being registered.
EX-99.C1. Independent Auditors' Consent
EX.99-C6. Actuarial Opinion and Consent
EX-24. Powers of Attorney
</TABLE>
<PAGE> 1
Exhibit 99.1.(5)(b)
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
POLICY ILLUSTRATION
Variable Account
The purpose of this illustration is to show how the performance of the
underlying sub-accounts could affect the policy cash value and death benefit
assuming the current policy costs continue. This illustration is hypothetical
and may not be used to project or predict investment results.
Premiums are paid at the beginning of the year. The cash value and death
benefit are shown as of the end of each policy year.
Prepared for:
Male 40 Nonsmoker
Initial Total Face Amount: $100,000
Initial Death Benefit Option: A (Level)
Annual Premium: $1,200.00
<TABLE>
<CAPTION>
------------------------------CURRENT POLICY COSTS-------------------------
0.00% Gross Hypothetical Return 12.00% Gross Hypothetical Return
(-1.39% Net Return) (10.61% Net Return)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End Accum- Cash Accum- Cash
End of Yr Premium ulation Surrender Death ulation Surrender Death
of Yr Age Outlay Value Value Benefit Value Value Benefit
- ----- ----- ------- ------- --------- ------- ------- --------- -------
1 41 1,200 821 0 100,000 937 0 100,000
2 42 1,200 1,616 0 100,000 1,959 129 100,000
3 43 1,200 2,386 556 100,000 3,074 1,244 100,000
4 44 1,200 3,128 1,298 100,000 4,289 2,459 100,000
5 45 1,200 3,841 2,011 100,000 5,614 3,784 100,000
------
6,000
6 46 1,200 4,523 2,876 100,000 7,060 5,413 100,000
7 47 1,200 5,175 3,711 100,000 8,639 7,175 100,000
8 48 1,200 5,794 4,513 100,000 10,365 9,084 100,000
9 49 1,200 6,378 5,280 100,000 12,250 11,152 100,000
10 50 1,200 6,925 6,010 100,000 14,312 13,397 100,000
------
12,000
11 51 1,200 7,432 6,700 100,000 16,567 15,835 100,000
12 52 1,200 7,901 7,352 100,000 19,041 18,492 100,000
13 53 1,200 8,328 7,962 100,000 21,754 21,388 100,000
14 54 1,200 8,709 8,526 100,000 24,732 24,549 100,000
15 55 1,200 9,041 9,041 100,000 28,004 28,004 100,000
------
18,000
20 60 1,200 9,814 9,814 100,000 50,107 50,107 100,000
25 65 1,200 8,707 8,707 100,000 87,234 87,234 107,009
30 70 1,200 4,881 4,881 100,000 148,812 148,812 173,755
35 75 1,200 0 0 0 249,314 249,314 268,826
</TABLE>
________________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 1 of 8
<PAGE> 2
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
<TABLE>
<CAPTION>
------------------------------CURRENT POLICY COSTS-------------------------
0.00% Gross Hypothetical Return 12.00% Gross Hypothetical Return
(-1.39% Net Return) (10.61% Net Return)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End Accum- Cash Accum- Cash
End of Yr Premium ulation Surrender Death ulation Surrender Death
of Yr Age Outlay Value Value Benefit Value Value Benefit
- ----- ----- ------- ------- --------- ------- ------- --------- -------
40 80 1,200 0 0 0 414,715 414,715 439,346
45 85 1,200 0 0 0 681,405 681,405 722,780
50 90 1,200 0 0 0 1,106,226 1,106,226 1,174,902
55 95 1,200 0 0 0 1,800,746 1,800,746 1,842,078
</TABLE>
*Year 34, Month 7
Based on current costs and 0% hypothetical rate of return
illustrated, the policy would lapse and cannot be illustrated.
Additional premiums would be required to continue the coverage.
________________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 2 of 8
<PAGE> 3
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
POLICY ILLUSTRATION
Variable Account
The purpose of this illustration is to show how the performance of the
underlying sub-accounts could affect the policy cash value and death benefit
assuming the maximum policy costs were charged. This illustration is
hypothetical and may not be used to project or predict investment results.
Premiums are paid at the beginning of the year. The cash value and death
benefit are shown as of the end of each policy year.
Prepared for:
Male 40 Nonsmoker
Initial Total Face Amount: $100,000
Initial Death Benefit Option: A (Level)
Annual Premium: $1,200.00
<TABLE>
<CAPTION>
-------------------------MAXIMUM GUARANTEED POLICY COSTS------------------
0.00% Gross Hypothetical Return 12.00% Gross Hypothetical Return
(-1.69% Net Return) (10.31% Net Return)
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End Accum- Cash Accum- Cash
End of Yr Premium ulation Surrender Death ulation Surrender Death
of Yr Age Outlay Value Value Benefit Value Value Benefit
- ----- ----- ------- ------- --------- ------- ------- --------- -------
1 41 1,200 769 0 100,000 882 0 100,000
2 42 1,200 1,510 0 100,000 1,838 8 100,000
3 43 1,200 2,221 391 100,000 2,875 1,045 100,000
4 44 1,200 2,903 1,073 100,000 4,000 2,170 100,000
5 45 1,200 3,553 1,723 100,000 5,220 3,390 100,000
------
6,000
6 46 1,200 4,169 2,522 100,000 6,544 4,897 100,000
7 47 1,200 4,751 3,287 100,000 7,981 6,517 100,000
8 48 1,200 5,297 4,016 100,000 9,541 8,260 100,000
9 49 1,200 5,806 4,708 100,000 11,237 10,139 100,000
10 50 1,200 6,274 5,359 100,000 13,081 12,166 100,000
------
12,000
11 51 1,200 6,700 5,968 100,000 15,086 14,354 100,000
12 52 1,200 7,077 6,528 100,000 17,266 16,717 100,000
13 53 1,200 7,400 7,034 100,000 19,636 19,270 100,000
14 54 1,200 7,663 7,480 100,000 22,212 22,029 100,000
15 55 1,200 7,861 7,861 100,000 25,015 25,015 100,000
------
18,000
20 60 1,200 7,650 7,650 100,000 43,404 43,404 100,000
25 65 1,200 4,475 4,475 100,000 73,073 73,073 100,000
30 70 1,200 0 0 0 122,565 122,565 143,184
35 75 1,200 0 0 0 201,503 201,503 217,375
</TABLE>
________________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 3 of 8
<PAGE> 4
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
<TABLE>
<CAPTION>
-------------------------MAXIMUM GUARANTEED POLICY COSTS-------------------
0.00% Gross Hypothetical Return 12.00% Gross Hypothetical Return
(-1.69% Net Return) (10.31% Net Return)
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End Accum- Cash Accum- Cash
End of Yr Premium ulation Surrender Death ulation Surrender Death
of Yr Age Outlay Value Value Benefit Value Value Benefit
- ----- ----- ------- ------- --------- ------- --------- --------- ---------
40 80 1,200 0 0 0 328,723 328,723 348,396
45 85 1,200 0 0 0 526,152 526,154 558,326
50 90 1,200 0 0 0 823,845 823,845 875,324
55 95 1,200 0 0 0 1,298,421 1,298,421 1,328,706
</TABLE>
*Year 29, Month 6
Based on the maximum guaranteed costs and a 0% hypothetical rate of return
illustrated, the policy would lapse and cannot be illustrated. Additional
premiums would be required to continue the coverage.
________________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 4 of 8
<PAGE> 5
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
- --------------------------------------------------------------------------------
VALUABLE INFORMATION ABOUT YOUR ILLUSTRATION
This is an illustration, not a contract, and must be preceded or accompanied by
a current Prospectus.
This illustration does not recognize that, because of inflation, a dollar in
the future has less value than a dollar today.
The values illustrated comply with the Internal Revenue Code definition of life
insurance.
GROSS HYPOTHETICAL RETURNS. The gross hypothetical returns shown are
illustrative only and should not be deemed a representation of past or future
rates of return. No representation may be made by your agent or ReliaStar Life
Insurance Company of New York that these hypothetical rates of return can be
achieved or sustained over any period of time. The death benefits and cash
surrender values for a policy may be different from those shown, even if the
actual rates of return averaged the hypothetical rate of return illustrated over
a period of years but fluctuated above or below that average at any time during
the period.
NET ANNUAL RETURN. The net rate illustrated reflects a reduction from the gross
rate to cover ReliaStar's mortality and expense risk charge and portfolio
operating expenses. The mortality and expense risk charge on an annual basis is
equal to 0.60% of the Variable Account assets for current costs and 0.90% for
the maximum guaranteed costs. An average portfolio operating expense of 0.76%
is deducted from the gross return. This reflects the recent portfolio operating
expense for the selected sub-account allocation.
SUB-ACCOUNT ALLOCATION. This illustration assumes that the net premiums (after
expense deductions) have been allocated to the Variable Account. Select*Life NY
offers the policy owner the opportunity to select those sub-accounts that most
clearly reflect their own tolerance for risk. Sub-accounts and their allocations
are selected initially and can be changed or transferred between the
sub-accounts of the policy without creating a taxable event. Transfers between
sub-accounts can be made up to 12 times per year without charge. We reserve the
right to limit transfers to 12 per year and charge up to $25.00 per transfer in
excess of 12 per year. The net investment return illustrated assumes the average
portfolio expense for the specified allocation of the following underlying
portfolios:
<TABLE>
<CAPTION>
Sub-Accounts Allocation
------------ ----------
<S> <C>
Alger American Growth Portfolio (AGR) 25%
Fidelity VIP II Contrafund Portfolio (FCF) 25%
Janus Aspen Series Aggressive Growth Portfolio (JAG) 25%
Pilgrim VP Growth + Value Portfolio (NGF) 25%
</TABLE>
FIXED ACCOUNT. A portion of premiums and accumulation values may also be
allocated to the Fixed Account. The Fixed Account is an interest paying account
that offers a guarantee of both principal and interest at a minimum annual rate
of 4% on amounts credited to the account. ReliaStar has complete ownership and
control of all of the assets of the Fixed Account. For current interest
crediting rates on the Fixed Account, ask your Registered Representative.
MINIMUM MONTHLY PREMIUM. A minimum monthly premium of $85.33 is required to
issue the policy and is guaranteed to maintain the base policy death benefit
guarantee. This minimum premium will change if increases or decreases are made
in any of the policy benefits.
DEATH BENEFIT GUARANTEE. A death benefit guarantee is in effect until the
insured reaches age 65 (or for 5 policy years, if longer) provided minimum
premiums (net of policy loans and withdrawals) are paid. The death benefit
guarantee prevents the policy from lapsing even if the cash surrender value is
not sufficient to cover the monthly deduction due. The death benefit guarantee,
while in effect, provides for payment of the policy death benefit regardless of
portfolio performance. Please see the Prospectus for a full explanation of this
provision.
- --------------------------------------------------------------------------------
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 5 of 8
<PAGE> 6
ReliaStar Life of New York
SELECT*LIFE NY 100 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
- --------------------------------------------------------------------------------
DEDUCTIONS AND CHARGES. A premium expense charge is deducted from each premium
paid. The accumulated value of the policy is subject to several charges: a
monthly administration charge, a mortality and expense risk charge, and the
cost of insurance for the base policy and any riders. Surrender charges are
applicable for the first 15 years and the first 15 years following any
requested increase in the face amount.
TAXATION. Tax laws are complex and change frequently. Changes in premium
payments from those illustrated or other changes made to the illustrated policy
after issue may result in classification as a Modified Endowment Contract
(MEC). Distributions from a Modified Endowment Contract, including loans, are
taxable as income in the year received to the extent that the accumulation
value of the policy prior to the distribution exceeds the total premiums paid.
In addition, distributions may be subject to an additional 10% income tax
penalty if taken before age 59-1/2. For complete information on how
distributions from this policy may affect your personal tax situation, always
consult your professional tax advisor.
ISSUER. Select*Life NY is a product of ReliaStar Life Insurance Company of New
York located at 1000 Woodbury Road, Suite 102, Woodbury, NY 11797. The general
distributor is Washington Square Securities, Inc., an affiliate company,
member NASD/SIPC, located at 20 Washington Avenue South, Minneapolis, MN 55401
(612-372-5507). Form #85-251 (may vary by state.)
PREMIUM LIMITS SUMMARY.
<TABLE>
<S> <C>
Minimum First Year Annual Premium: $1,023.96
Initial Guideline Level Premium: $1,662.50
Initial Guideline Single Premium: $18,779.23
Initial MEC 7-pay Premium: $4,440.50
</TABLE>
1YT=102396
- --------------------------------------------------------------------------------
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 6 of 8
<PAGE> 7
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
ILLUSTRATION SUMMARY AND DISCLOSURE
Variable Account
This page summarizes information from the previous ledger pages and outlines
some important policy provisions. Review the information presented below. If
acceptable, sign, date, and return this illustration, along with the
application for insurance, to ReliaStar Life Insurance Company of New York.
Prepared for:
Male 40 Nonsmoker
Initial Total Face Amount: $100,000
Initial Death Benefit Options: A (Level)
Annual Premium: $1,200.00
This summary is based on the premium outlay in the policy illustration. The
cash value and death benefit are shown as of the end of the year.
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
GUARANTEED COSTS CURRENT COSTS
0.00% Gross Annual Return 0.00% Gross Annual Return 12.00% Gross Annual Return
(-1.69% Net Return) (-1.39% Net Return) (10.61% Net Return)
____________________________________________________________________________________________________________________
<S> <C> <C> <C>
Year 10, Age 50
Cash Surrender Value: 5,359 6,010 13,397
Death Benefit: 100,000 100,000 100,000
Year 20, Age 60
Cash Surrender Value: 7,650 9,814 50,107
Death Benefit: 100,000 100,000 100,000
Projected age when
Death Benefit Ends: 68 73 95
____________________________________________________________________________________________________________________
</TABLE>
You may adjust your payment amounts, within limits, to extend or increase the
cash value and death benefit.
I understand that:
PURCHASE OF LIFE INSURANCE. I am buying a flexible premium cash value variable
life insurance policy issued by ReliaStar Life Insurance Company of New York.
RECEIPT OF PROSPECTUS. I received the current Prospectus describing the terms
and operation of the policy and the underlying sub-accounts. I'm keeping the
Prospectus for further reference. I understand the policy has some features
comparable to and others different from a traditional life insurance policy. I
realize this Disclosure Statement highlights some, but not all, of the
important aspects of the policy and that I should examine the Prospectus prior
to purchasing a policy.
INSURANCE PROTECTION. The policy provides insurance protection until age 95, if
the cash surrender value, as explained in the Prospectus, is sufficient to pay
the monthly charges. The policy remains in force during the death benefit
guarantee period, without regard to the cash surrender value, if on each monthly
anniversary as described in the policy the total premiums paid, less any partial
withdrawals or policy loans, equals or exceeds the total required premium
payments specified in the policy.
SUB-ACCOUNT ALLOCATION. I may allocate a net premium (amount remaining after
expense deductions) among one or more sub-accounts, each of which invests in one
of the available portfolios. Each portfolio has a different investment
objective, as described in the current Prospectus. In allocating net premiums to
a sub-account, the investment performance of the underlying portfolios I select
will impact the policy accumulation value and may impact the death benefit.
Thus, the investment risk for those amounts is mine, and no minimum accumulation
value in any sub-account(s) is guaranteed. I may also allocate net premiums to a
Fixed Account, which the Company guarantees both as to principal and interest at
a minimum annual rate of 4.0%.
_______________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 7 of 8
<PAGE> 8
ReliaStar Life of New York
SELECT*LIFE NY 1000 Woodbury Road, Suite 102
A Variable Universal Life Insurance Policy Woodbury, NY 11797
________________________________________________________________________________
SELECTED PORTFOLIO. The sub-accounts I select have varying portfolio operating
expenses. Changes to the selected sub-accounts and the allocation percentages
will have an impact on the policy cash values. This illustration assumes the
average portfolio expense for the specified allocation of the following
underlying portfolios is deducted:
<TABLE>
<CAPTION>
Portfolio Allocation
- --------- -----------
<S> <C>
Alger American Growth Portfolio (AGR) 25%
Fidelity VIP II Contrafund Portfolio (FCF) 25%
Janus Aspen Series Aggressive Growth Portfolio (JAG) 25%
Pilgrim VP Growth + Value Portfolio (NGF) 25%
</TABLE>
ILLUSTRATIONS. The illustrations in the Prospectus present hypothetical
investment results and those presented by the Company's representative will
utilize hypothetical and/or historical investment results. Neither hypothetical
nor historical investment returns are guaranteed. The values set forth are
illustrative only and are not intended to predict actual performance. They are
intended to help explain how the policy operates and are not deemed to represent
future investment results. Actual investment results may be more or less and
depend on a number of factors, as explained in the Prospectus.
CHARGES AND DEDUCTIONS. As described in the Prospectus, there are (a) charges
made against each premium payment and (b) monthly deductions against the
accumulation value for the cost of insurance, administrative charges and
mortality and expense risks assumed by the Company. If I surrender the policy or
allow it to lapse during the first 15 years after issue or an increase, a
surrender charge will be imposed.
LOANS AND WITHDRAWALS. Policy loans and partial cash withdrawals are available,
subject to certain limits and charges as explained in the Prospectus. If, at any
time, the amount of the policy loan exceeds the cash surrender value, the grace
period goes into effect and we may lapse the policy. Policy loans and partial
withdrawals may cause the death benefit guarantee to terminate.
TAX MATTERS. The Company does not provide legal or tax advice in reference to
this life insurance policy. I acknowledge that the section in the Prospectus
"Federal Tax Matters", is not intended to be a complete description of the tax
status of the policy.
- ------------------------------------------------ ---------------------
Applicant or Policy Owner Date
- ------------------ ----------------------
Date of Prospectus Prospectus Form Number
- ------------------------------------------------ ---------------------
Date
________________________________________________________________________________
This illustration is not complete without all pages.
$100,000 Sel*Life NY for Presented by:
Version M3 2.3.0 03/10/2000 10:57 AM
State of Issue: New York Page 8 of 8
<PAGE> 1
EXHIBIT 99.1.(8)(a)
MARCH 28, 2000 AMENDMENT TO
PARTICIPATION AGREEMENT
AMONG
THE ALGER AMERICAN FUND,
FRED ALGER MANAGEMENT, INC., and
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
This amendment to the August 8, 1997 Participation Agreement, among The
Alger American Fund, Fred Alger Management, Inc., and ReliaStar Life Insurance
Company of New York (formerly ReliaStar Bankers Security Life Insurance Company)
is made for the purpose of modifying Schedules A and B thereto by incorporating
all of the following asset accounts to Schedule A therein:
ReliaStar Life Insurance Company of New York-
Variable Life Separate Account I:
Select*Life New York
Variable Estate Design
Survivorship VUL of New York
ReliaStar Life Insurance Company of New York-
Variable Life Separate Account II:
Select Annuity New York
And by including all portfolios of The Alger American Fund in Schedule B,
thereby making all of them available to all asset accounts listed in Schedule A,
as amended, to-wit:
The Alger American Fund
-Alger American Balanced Portfolio
-Alger American Balanced Portfolio
-Alger American Small Capitalization Portfolio
-Alger American Growth Portfolio
-Alger American MidCap Growth Portfolio
-Alger American Leveraged AllCap Portfolio
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
<PAGE> 2
to be executed in its name and on its behalf by its duly authorized
representative as of this date, March 28, 2000.
THE ALGER AMERICAN FUND
By: _________________________
Gregory S. Duch
Treasurer
FRED ALGER MANAGEMENT, INC.
By: _________________________
Gregory S. Duch
Executive Vice President
RELIASTAR LIFE INSURANCE COMPANY
OF NEW YORK
By: _________________________
Name: _______________________
Title: ______________________
RELIASTAR LIFE INSURANCE COMPANY
OF NEW YORK
By: _________________________
Name: _______________________
Title: ______________________
<PAGE> 1
Exhibit 99.1(8)(y)
PARTICIPATION AGREEMENT
BY AND AMONG
AIM VARIABLE INSURANCE FUNDS, INC.,
A I M DISTRIBUTORS, INC.
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK,
ON BEHALF OF ITSELF AND
ITS SEPARATE ACCOUNTS,
AND
WASHINGTON SQUARE SECURITIES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
DESCRIPTION PAGE
<S> <C> <C>
Section 1. Available Funds........................................................................2
1.1 Availability.....................................................................2
1.2 Addition, Deletion or Modification of Funds......................................2
1.3 No Sales to the General Public...................................................2
Section 2. Processing Transactions................................................................3
2.1 Timely Pricing and Orders........................................................3
2.2 Timely Payments..................................................................3
2.3 Applicable Price.................................................................5
2.4 Dividends and Distributions......................................................5
2.5 Book Entry.......................................................................5
Section 3. Costs and Expenses.....................................................................5
3.1 General..........................................................................5
3.2 Parties To Cooperate.............................................................6
Section 4. Legal Compliance.......................................................................6
4.1 Tax Laws.........................................................................6
4.2 Insurance and Certain Other Laws.................................................8
4.3 Securities Laws..................................................................9
4.4 Notice of Certain Proceedings and Other Circumstances...........................11
4.5 LIFE COMPANY To Provide Documents; Information About AVIF.......................12
4.6 AVIF To Provide Documents; Information About LIFE COMPANY.......................13
Section 5. Mixed and Shared Funding..............................................................14
5.1 General.........................................................................14
5.2 Disinterested Directors.........................................................14
5.3 Monitoring for Material Irreconcilable Conflicts................................15
5.4 Conflict Remedies...............................................................16
5.5 Notice to LIFE COMPANY..........................................................17
5.6 Information Requested by Board of Directors.....................................17
5.7 Compliance with SEC Rules.......................................................17
5.8 Other Requirements..............................................................18
Section 6. Termination...........................................................................19
6.1 Events of Termination...........................................................19
6.2 Notice Requirement for Termination..............................................20
6.3 Funds To Remain Available.......................................................20
6.4 Survival of Warranties and Indemnifications.....................................22
6.5 Continuance of Agreement for Certain Purposes...................................22
Section 7. Parties To Cooperate Respecting Termination...........................................22
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
DESCRIPTION PAGE
<S> <C> <C>
Section 8. Assignment............................................................................22
Section 9. Notices...............................................................................22
Section 10. Voting Procedures....................................................................23
Section 11. Foreign Tax Credits..................................................................25
Section 12. Indemnification......................................................................25
12.1 Of AVIF and AIM by LIFE COMPANY and UNDERWRITER.................................25
12.2 Of LIFE COMPANY and UNDERWRITER by AVIF and AIM.................................27
12.3 Effect of Notice................................................................31
12.4 Successors......................................................................31
Section 13. Applicable Law.......................................................................31
Section 14. Execution in Counterparts............................................................31
Section 15. Severability.........................................................................31
Section 16. Rights Cumulative....................................................................31
Section 17. Headings.............................................................................31
Section 18. Confidentiality......................................................................32
Section 19. Trademarks and Fund Names............................................................32
Section 20. Parties to Cooperate.................................................................33
</TABLE>
ii
<PAGE> 4
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the ____ day of _________,
2000 ("Agreement"), by and among AIM Variable Insurance Funds, Inc., a Maryland
corporation ("AVIF"), A I M Distributors, Inc., a Delaware corporation (AIM),
ReliaStar Life Insurance Company of New York , a New York life insurance company
(LIFE COMPANY), on behalf of itself and each of its segregated asset accounts
listed in Schedule A hereto, as the parties hereto may amend from time to time
(each, an "Account," and collectively, the "Accounts"); and Washington Square
Securities, Inc., an affiliate of LIFE COMPANY and the principal underwriter of
the Contracts ("UNDERWRITER") (collectively, the Parties).
WITNESSETH THAT:
WHEREAS, AVIF is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, AVIF currently consists of seventeen separate series
("Series"), shares ("Shares") each of which are registered under the Securities
Act of 1933, as amended (the "1933 Act") and are currently sold to one or more
separate accounts of life insurance companies to fund benefits under variable
annuity contracts and variable life insurance contracts; and
WHEREAS, AVIF will make Shares of each Series listed on Schedule A
hereto as the Parties hereto may amend from time to time (each a "Fund";
reference herein to "AVIF" includes reference to each Fund, to the extent the
context requires) available for purchase by the Accounts; and
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity
contracts and variable life insurance contracts ("Contracts") as set forth on
Schedule A hereto, as the Parties hereto may amend from time to time, which
Contracts (hereinafter collectively, the "Contracts"), if required by applicable
law, will be registered under the 1933 Act; and
WHEREAS, LIFE COMPANY will fund the Contracts through the Accounts,
each of which may be divided into two or more subaccounts ("Subaccounts";
reference herein to an "Account" includes reference to each Subaccount thereof
to the extent the context requires); and
WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each
of which is registered as a unit investment trust investment company under the
1940 Act (or exempt therefrom), and the security interests deemed to be issued
by the Accounts
1
<PAGE> 5
under the Contracts will be registered as securities under the 1933 Act (or
exempt therefrom); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase Shares in one or more of the Funds
on behalf of the Accounts to fund the Contracts; and
WHEREAS, UNDERWRITER is a broker-dealer registered with the SEC under
the Securities Exchange Act of 1934 ("1934 Act") and a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD");
WHEREAS, AIM is a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934 ("1934 Act") and a member in good standing of
the National Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
SECTION 1. AVAILABLE FUNDS
1.1 AVAILABILITY.
AVIF will make Shares of each Fund available to LIFE COMPANY for
purchase and redemption at net asset value and with no sales charges, subject to
the terms and conditions of this Agreement. The Board of Directors of AVIF may
refuse to sell Shares of any Fund to any person, or suspend or terminate the
offering of Shares of any Fund if such action is required by law or by
regulatory authorities having jurisdiction or if, in the sole discretion of the
Directors acting in good faith and in light of their fiduciary duties under
federal and any applicable state laws, such action is deemed in the best
interests of the shareholders of such Fund.
1.2 ADDITION, DELETION OR MODIFICATION OF FUNDS.
The Parties hereto may agree, from time to time, to add other Funds to
provide additional funding media for the Contracts, or to delete, combine, or
modify existing Funds, by amending Schedule A hereto. Upon such amendment to
Schedule A, any applicable reference to a Fund, AVIF, or its Shares herein shall
include a reference to any such additional Fund. Schedule A, as amended from
time to time, is incorporated herein by reference and is a part hereof.
1.3 NO SALES TO THE GENERAL PUBLIC.
2
<PAGE> 6
AVIF represents and warrants that no Shares of any Fund have been or
will be sold to the general public.
SECTION 2. PROCESSING TRANSACTIONS
2.1 TIMELY PRICING AND ORDERS.
(a) AVIF or its designated agent will use its best efforts to provide
LIFE COMPANY with the net asset value per Share for each Fund by 6:00 p.m.
Central Time on each Business Day. As used herein, "Business Day" shall mean any
day on which (i) the New York Stock Exchange is open for regular trading, (ii)
AVIF calculates the Fund's net asset value, and (iii) LIFE COMPANY is open for
business.
(b) LIFE COMPANY will use the data provided by AVIF each Business Day
pursuant to paragraph (a) immediately above to calculate Account unit values and
to process transactions that receive that same Business Day's Account unit
values. LIFE COMPANY will perform such Account processing in a timely manner and
will place corresponding orders to purchase or redeem Shares with AVIF by 9:00
a.m. Central Time the following Business Day; provided, however, that AVIF shall
provide additional time to LIFE COMPANY in the event that AVIF is unable to meet
the 6:00 p.m. time stated in paragraph (a) immediately above. Such additional
time shall be equal to the additional time that AVIF takes to make the net asset
values available to LIFE COMPANY.
(c) With respect to payment of the purchase price by LIFE COMPANY and
of redemption proceeds by AVIF, LIFE COMPANY and AVIF shall net purchase and
redemption orders with respect to each Fund and shall transmit one net payment
in accordance with Section 2.2, below.
(d) If AVIF provides materially incorrect Share net asset value
information (as determined under SEC guidelines), LIFE COMPANY shall be entitled
to an adjustment to the number of Shares purchased or redeemed to reflect the
correct net asset value per Share. Any material error in the calculation or
reporting of net asset value per Share, dividend or capital gain information
shall be reported promptly upon discovery to LIFE COMPANY. Materiality and
reprocessing cost reimbursement shall be determined in accordance with standards
established by the Parties as provided in Schedule B, attached hereto and
incorporated herein.
2.2 TIMELY PAYMENTS.
LIFE COMPANY will wire payment for net purchases to a custodial account
designated by AVIF by 1:00 p.m. Central Time on the same day as the order for
Shares is placed, to the extent practicable. AVIF will wire payment for net
redemptions to an account designated by LIFE COMPANY by 1:00 p.m. Central Time
on the same day as
3
<PAGE> 7
the Order is placed, to the extent practicable, but in any event within five (5)
calendar days after the date the order is placed in order to enable LIFE COMPANY
to pay redemption proceeds within the time specified in Section 22(e) of the
1940 Act or such shorter period of time as may be required by law.
4
<PAGE> 8
2.3 APPLICABLE PRICE.
(a) Share purchase payments and redemption orders that result from
purchase payments, premium payments, surrenders and other transactions under
Contracts (collectively, "Contract transactions) and that LIFE COMPANY receives
prior to the close of regular trading on the New York Stock Exchange on a
Business Day will be executed at the net asset values of the appropriate Funds
next computed after receipt by AVIF or its designated agent of the orders. For
purposes of this Section 2.3(a), LIFE COMPANY shall be the designated agent of
AVIF for receipt of orders relating to Contract transactions on each Business
Day and receipt by such designated agent shall constitute receipt by AVIF;
provided that AVIF receives notice of such orders by 9:00 a.m. Central Time on
the next following Business Day or such later time as computed in accordance
with Section 2.1(b) hereof.
(b) All other Share purchases and redemptions by LIFE COMPANY will
be effected at the net asset values of the appropriate Funds next computed after
receipt by AVIF or its designated agent of the order therefor, and such orders
will be irrevocable.
2.4 DIVIDENDS AND DISTRIBUTIONS.
AVIF will furnish notice by wire or telephone (followed by written
confirmation) on or prior to the payment date to LIFE COMPANY of any income
dividends or capital gain distributions payable on the Shares of any Fund. LIFE
COMPANY hereby elects to reinvest all dividends and capital gains distributions
in additional Shares of the corresponding Fund at the ex-dividend date net asset
values until LIFE COMPANY otherwise notifies AVIF in writing, it being agreed by
the Parties that the ex-dividend date and the payment date with respect to any
dividend or distribution will be the same Business Day. LIFE COMPANY reserves
the right to revoke this election and to receive all such income dividends and
capital gain distributions in cash.
2.5 BOOK ENTRY.
Issuance and transfer of AVIF Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from AVIF will
be recorded in an appropriate title for LIFE COMPANY, on behalf of its Account.
SECTION 3. COSTS AND EXPENSES
3.1 GENERAL.
Except as otherwise specifically provided in Schedule C, attached
hereto and made a part hereof, each Party will bear, or arrange for others to
bear, all expenses incident to its performance under this Agreement.
5
<PAGE> 9
3.2 PARTIES TO COOPERATE.
Each Party agrees to cooperate with the others, as applicable, in
arranging to print, mail and/or deliver, in a timely manner, combined or
coordinated prospectuses or other materials of AVIF and the Accounts.
SECTION 4. LEGAL COMPLIANCE
4.1 TAX LAWS.
(a) AVIF represents and warrants that each Fund is currently qualified
as a regulated investment company ("RIC") under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and represents that it will use
its best efforts to qualify and to maintain qualification of each Fund as a RIC.
AVIF will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.
(b) AVIF represents that it will use its best efforts to comply and to
maintain each Fund's compliance with the diversification requirements set forth
in Section 817(h) of the Code and Section 1.817-5(b) of the regulations under
the Code. AVIF will notify LIFE COMPANY immediately upon having a reasonable
basis for believing that a Fund has ceased to so comply or that a Fund might not
so comply in the future. In the event of a breach of this Section 4.1(b) by
AVIF, it will take all reasonable steps to adequately diversify the Fund so as
to achieve compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code.
(c) Notwithstanding any other provision of this Agreement, LIFE COMPANY
agrees that if the Internal Revenue Service ("IRS") asserts in writing in
connection with any governmental audit or review of LIFE COMPANY or, to LIFE
COMPANY's knowledge, of any Contract owners, annuitants, insureds or
participants (as appropriate) under the Contracts (collectively,
"Participants"), that any Fund has failed to comply with the diversification
requirements of Section 817(h) of the Code or LIFE COMPANY otherwise becomes
aware of any facts that could give rise to any claim against AVIF or its
affiliates as a result of such a failure or alleged failure:
(i) LIFE COMPANY shall promptly notify AVIF of such assertion or
potential claim (subject to the Confidentiality provisions of
Section 18 as to any Participant);
(ii) LIFE COMPANY shall consult with AVIF as to how to minimize any
liability that may arise as a result of such failure or
alleged failure;
(iii) LIFE COMPANY shall use its best efforts to minimize any
liability of AVIF or its affiliates resulting from such
failure, including, without limitation, demonstrating,
pursuant to Treasury Regulations Section
6
<PAGE> 10
1.817-5(a)(2), to the Commissioner of the IRS that such
failure was inadvertent;
(iv) LIFE COMPANY shall permit AVIF, its affiliates and their legal
and accounting advisors to participate in any conferences,
settlement discussions or other administrative or judicial
proceeding or contests (including judicial appeals thereof)
with the IRS, any Participant or any other claimant regarding
any claims that could give rise to liability to AVIF or its
affiliates as a result of such a failure or alleged failure;
provided, however, that LIFE COMPANY will retain control of
the conduct of such conferences discussions, proceedings,
contests or appeals;
(v) any written materials to be submitted by LIFE COMPANY to the
IRS, any Participant or any other claimant in connection with
any of the foregoing proceedings or contests (including,
without limitation, any such materials to be submitted to the
IRS pursuant to Treasury Regulations Section 1.817-5(a)(2)),
(a) shall be provided by LIFE COMPANY to AVIF (together with
any supporting information or analysis); subject to the
confidentiality provisions of Section 18, at least ten (10)
business days or such shorter period to which the Parties
hereto agree prior to the day on which such proposed materials
are to be submitted, and (b) shall not be submitted by LIFE
COMPANY to any such person without the express written consent
of AVIF which shall not be unreasonably withheld;
(vi) LIFE COMPANY shall provide AVIF or its affiliates and their
accounting and legal advisors with such cooperation as AVIF
shall reasonably request (including, without limitation, by
permitting AVIF and its accounting and legal advisors to
review the relevant books and records of LIFE COMPANY) in
order to facilitate review by AVIF or its advisors of any
written submissions provided to it pursuant to the preceding
clause or its assessment of the validity or amount of any
claim against its arising from such a failure or alleged
failure;
(vii) LIFE COMPANY shall not with respect to any claim of the IRS or
any Participant that would give rise to a claim against AVIF
or its affiliates (a) compromise or settle any claim, (b)
accept any adjustment on audit, or (c) forego any allowable
administrative or judicial appeals, without the express
written consent of AVIF or its affiliates, which shall not be
unreasonably withheld, provided that LIFE COMPANY shall not be
required, after exhausting all administrative remedies, to
appeal any adverse judicial decision unless AVIF or its
affiliates shall have provided an opinion of independent
counsel to the effect that a reasonable basis exists for
7
<PAGE> 11
taking such appeal; and provided further that the costs of any
such appeal shall be borne equally by the Parties hereto; and
(viii) If LIFE COMPANY fails to comply with any of the foregoing
clauses (i) through (vii), and such failure can be shown to
have materially contributed to the liability of AVIF or its
affiliates, then AVIF and its affiliates shall have no
liability pursuant to Section 12 hereof as a result of a
Fund's failure or alleged failure to comply with the
diversification requirements of Section 817(h) of the Code.
AVIF and its affiliates shall have no liability as a result of
such failure or alleged failure if LIFE COMPANY fails to
comply with any of the foregoing clauses (i) through (vii),
and such failure could be shown to have materially contributed
to the liability.
Should AVIF or any of its affiliates refuse to give its written consent
to any compromise or settlement of any claim or liability hereunder, LIFE
COMPANY may, in its discretion, authorize AVIF or its affiliates to act in the
name of LIFE COMPANY in, and to control the conduct of, such conferences,
discussions, proceedings, contests or appeals and all administrative or judicial
appeals thereof, and in that event AVIF or its affiliates shall bear the fees
and expenses associated with the conduct of the proceedings that it is so
authorized to control; provided, that in no event shall LIFE COMPANY have any
liability resulting from AVIF's refusal to accept the proposed settlement or
compromise with respect to any failure caused by AVIF. As used in this
Agreement, the term "affiliates" shall have the same meaning as "affiliated
person" as defined in Section 2(a)(3) of the 1940 Act.
(d) LIFE COMPANY represents and warrants that the Contracts currently
are and will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; LIFE COMPANY will notify AVIF immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(e) LIFE COMPANY represents and warrants that each Account is a
"segregated asset account" and that interests in each Account are offered
exclusively through the purchase of or transfer into a "variable contract,"
within the meaning of such terms under Section 817 of the Code and the
regulations thereunder. LIFE COMPANY will use its best efforts to continue to
meet such definitional requirements, and it will notify AVIF immediately upon
having a reasonable basis for believing that such requirements have ceased to be
met or that they might not be met in the future.
4.2 INSURANCE AND CERTAIN OTHER LAWS.
(a) AVIF will use its best efforts to comply with any applicable state
insurance laws or regulations, to the extent specifically requested in writing
by LIFE COMPANY,
8
<PAGE> 12
including, the furnishing of information not otherwise available to LIFE COMPANY
which is required by state insurance law to enable LIFE COMPANY to obtain the
authority needed to issue the Contracts in any applicable state.
(b) LIFE COMPANY represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws of
the State of NewYork and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under New York Insurance Law and the
regulations thereunder, and (iii) the Contracts comply in all material respects
with all other applicable federal and state laws and regulations.
(c) AVIF represents and warrants that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
4.3 SECURITIES LAWS.
(a) LIFE COMPANY represents and warrants that (i) interests in each
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and state laws,
including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and the
law(s) of LIFE COMPANY's state(s) of organization and domicile, (iii) each
Account is and will remain registered under the 1940 Act, to the extent required
by the 1940 Act, (iv) each Account does and will comply in all material respects
with the requirements of the 1940 Act and the rules thereunder, to the extent
required, (v) each Account's 1933 Act registration statement relating to the
Contracts, together with any amendments thereto, will at all times comply in all
material respects with the requirements of the 1933 Act and the rules
thereunder, (vi) LIFE COMPANY will amend the registration statement for its
Contracts under the 1933 Act and for its Accounts under the 1940 Act from time
to time as required in order to effect the continuous offering of its Contracts
or as may otherwise be required by applicable law, and (vii) each Account
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(b) AVIF represents and warrants that (i) Shares sold pursuant to this
Agreement will be registered under the 1933 Act to the extent required by the
1933 Act and duly authorized for issuance and sold in compliance with Maryland
law, (ii) AVIF is and will remain registered under the 1940 Act to the extent
required by the 1940 Act, (iii) AVIF will amend the registration statement for
its Shares under the 1933 Act and itself under the 1940 Act from time to time as
required in order to effect the continuous offering of its Shares, (iv) AVIF
does and will comply in all material respects with the requirements of the 1940
Act and the rules thereunder, (v) AVIF's 1933 Act registration statement,
together with any amendments thereto, will at all times comply in all material
9
<PAGE> 13
respects with the requirements of the 1933 Act and rules thereunder, and (vi)
AVIF's Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) AVIF will at its expense register and qualify its Shares for sale
in accordance with the laws of any state or other jurisdiction if and to the
extent reasonably deemed advisable by AVIF.
(d) AVIF currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act or otherwise,
although it reserves the right to make such payments in the future. To the
extent that it decides to finance distribution expenses
10
<PAGE> 14
(e) pursuant to Rule 12b-1, AVIF undertakes to have its Board of
Directors, a majority of whom are not "interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.
(f) AVIF represents and warrants that all of its trustees, officers,
employees, investment advisers, and other individuals/entities having access to
the funds and/or securities of the Fund are and continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund in an amount not less than the minimal coverage as required currently by
Rule 17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and embezzlement
and is issued by a reputable bonding company.
4.4 NOTICE OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(a) AVIF or AIM will immediately notify LIFE COMPANY of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to AVIF's registration statement
under the 1933 Act or AVIF Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or AVIF Prospectus that may affect the
offering of Shares of AVIF, (iii) the initiation of any proceedings for that
purpose or for any other purpose relating to the registration or offering of
AVIF's Shares, or (iv) any other action or circumstances that may prevent the
lawful offer or sale of Shares of any Fund in any state or jurisdiction,
including, without limitation, any circumstances in which (a) such Shares are
not registered and, in all material respects, issued and sold in accordance with
applicable state and federal law, or (b) such law precludes the use of such
Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY. AVIF and AIM will make every reasonable effort to
prevent the issuance, with respect to any Fund, of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
(b) LIFE COMPANY or UNDERWRITER will immediately notify AVIF of (i) the
issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to each Account's registration
statement under the 1933 Act relating to the Contracts or each Account
Prospectus, (ii) any request by the SEC for any amendment to such registration
statement or Account Prospectus that may affect the offering of Shares of AVIF,
(iii) the initiation of any proceedings for that purpose or for any other
purpose relating to the registration or offering of each Account's interests
pursuant to the Contracts, or (iv) any other action or circumstances that may
prevent the lawful offer or sale of said interests in any state or jurisdiction,
including, without limitation, any circumstances in which said interests are not
registered and, in all material respects, issued and sold in accordance with
applicable state and federal law. LIFE COMPANY and UNDERWRITER will make every
reasonable effort to prevent the issuance of any such stop order, cease and
desist order or similar order and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.
11
<PAGE> 15
4.5 LIFE COMPANY TO PROVIDE DOCUMENTS; INFORMATION ABOUT AVIF.
(a) LIFE COMPANY will provide to AVIF or its designated agent at least
one (1) complete copy of all SEC registration statements, Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to each Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
(b) LIFE COMPANY will provide to AVIF or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which AVIF or any of its affiliates is named, at least five (5)
Business Days prior to its use or such shorter period as the Parties hereto may,
from time to time, agree upon. No such material shall be used if AVIF or its
designated agent objects to such use within five (5) Business Days after receipt
of such material or such shorter period as the Parties hereto may, from time to
time, agree upon. AVIF hereby designates AIM as the entity to receive such sales
literature, until such time as AVIF appoints another designated agent by giving
notice to LIFE COMPANY in the manner required by Section 9 hereof.
(c) Neither LIFE COMPANY nor any of its affiliates, will give any
information or make any representations or statements on behalf of or concerning
AVIF or its affiliates in connection with the sale of the Contracts other than
(i) the information or representations contained in the registration statement,
including the AVIF Prospectus contained therein, relating to Shares, as such
registration statement and AVIF Prospectus may be amended from time to time; or
(ii) in reports or proxy materials for AVIF; or (iii) in published reports for
AVIF that are in the public domain and approved by AVIF for distribution; or
(iv) in sales literature or other promotional material approved by AVIF, except
with the express written permission of AVIF.
(d) LIFE COMPANY shall adopt and implement procedures reasonably
designed to ensure that information concerning AVIF and its affiliates that is
intended for use only by brokers or agents selling the Contracts (i.e.,
information that is not intended for distribution to Participants) ("broker only
materials") is so used, and neither AVIF nor any of its affiliates shall be
liable for any losses, damages or expenses relating to the improper use of such
broker only materials.
(e) For the purposes of this Section 4.5, the phrase "sales literature
or other promotional material includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media, (e.g.,
on-line networks such as the Internet or other electronic messages), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
12
<PAGE> 16
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports, and
proxy materials and any other material constituting sales literature or
advertising under the NASD rules, the 1933 Act or the 1940 Act.
4.6 AVIF TO PROVIDE DOCUMENTS; INFORMATION ABOUT LIFE COMPANY.
(a) AVIF will provide to LIFE COMPANY at least one (1) complete copy of
all SEC registration statements, AVIF Prospectuses, reports, any preliminary and
final proxy material, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to AVIF or the
Shares of a Fund, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.
(b) AVIF will provide to LIFE COMPANY a camera ready or electronic copy
of all AVIF prospectuses and printed copies, in an amount specified by LIFE
COMPANY, of AVIF statements of additional information, proxy materials, periodic
reports to shareholders and other materials required by law to be sent to
Participants who have allocated any Contract value to a Fund. AVIF will provide
such copies to LIFE COMPANY in a timely manner so as to enable LIFE COMPANY, as
the case may be, to print and distribute such materials within the time required
by law to be furnished to Participants.
(c) AVIF will provide to LIFE COMPANY or its designated agent at least
one (1) complete copy of each piece of sales literature or other promotional
material in which LIFE COMPANY, or any of its respective affiliates is named, or
that refers to the Contracts, at least five (5) Business Days prior to its use
or such shorter period as the Parties hereto may, from time to time, agree upon.
No such material shall be used if LIFE COMPANY or its designated agent objects
to such use within five (5) Business Days after receipt of such material or such
shorter period as the Parties hereto may, from time to time, agree upon. LIFE
COMPANY shall receive all such sales literature until such time as it appoints a
designated agent by giving notice to AVIF in the manner required by Section 9
hereof.
(d) Neither AVIF nor any of its affiliates will give any information or
make any representations or statements on behalf of or concerning LIFE COMPANY,
each Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement and
Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by LIFE COMPANY for distribution; or (iii) in sales literature or other
promotional material approved by LIFE
13
<PAGE> 17
COMPANY or its affiliates, except with the express written permission of LIFE
COMPANY.
(e) AVIF shall cause its principal underwriter to adopt and implement
procedures reasonably designed to ensure that information concerning LIFE
COMPANY, and its respective affiliates that is intended for use only by brokers
or agents selling the Contracts (i.e., information that is not intended for
distribution to Participants) ("broker only materials") is so used, and neither
LIFE COMPANY, nor any of its respective affiliates shall be liable for any
losses, damages or expenses relating to the improper use of such broker only
materials.
(f) For purposes of this Section 4.6, the phrase "sales literature or
other promotional material includes, but is not limited to, advertisements (such
as material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media, (e.g., on-line
networks such as the Internet or other electronic messages), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 1940 Act.
SECTION 5. MIXED AND SHARED FUNDING
5.1 GENERAL.
The SEC has granted an order to AVIF exempting it from certain
provisions of the 1940 Act and rules thereunder so that AVIF may be available
for investment by certain other entities, including, without limitation,
separate accounts funding variable annuity contracts or variable life insurance
contracts, separate accounts of insurance companies unaffiliated with LIFE
COMPANY, and trustees of qualified pension and retirement plans (collectively,
"Mixed and Shared Funding"). The Parties recognize that the SEC has imposed
terms and conditions for such orders that are substantially identical to many of
the provisions of this Section 5. Sections 5.2 through 5.8 below shall apply
pursuant to such an exemptive order granted to AVIF. AVIF hereby notifies LIFE
COMPANY that, in the event that AVIF implements Mixed and Shared Funding, it may
be appropriate to include in the prospectus pursuant to which a Contract is
offered disclosure regarding the potential risks of Mixed and Shared Funding.
5.2 DISINTERESTED DIRECTORS.
14
<PAGE> 18
AVIF agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of AVIF within the meaning of Section 2(a)(19) of the 1940 Act and the
rules thereunder and as modified by any applicable orders of the SEC, except
that if this condition is not met by reason of the death, disqualification, or
bona fide resignation of any director, then the operation of this condition
shall be suspended (a) for a period of forty-five (45) days if the vacancy or
vacancies may be filled by the Board;(b) for a period of sixty (60) days if a
vote of shareholders is required to fill the vacancy or vacancies; or (c) for
such longer period as the SEC may prescribe by order upon application.
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
AVIF agrees that its Board of Directors will monitor for the existence
of any material irreconcilable conflict between the interests of the
Participants in all separate accounts of life insurance companies utilizing AVIF
("Participating Insurance Companies"), including each Account, and participants
in all qualified retirement and pension plans investing in AVIF ("Participating
Plans"). LIFE COMPANY agrees to inform the Board of Directors of AVIF of the
existence of or any potential for any such material irreconcilable conflict of
which it is aware. The concept of a "material irreconcilable conflict" is not
defined by the 1940 Act or the rules thereunder, but the Parties recognize that
such a conflict may arise for a variety of reasons, including, without
limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Fund are being managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract Participants or by Participants of
different Participating Insurance Companies;
(f) a decision by a Participating Insurance Company to disregard the
voting instructions of Participants; or
(g) a decision by a Participating Plan to disregard the voting
instructions of Plan participants.
Consistent with the SEC's requirements in connection with exemptive
orders of the type referred to in Section 5.1 hereof, LIFE COMPANY will assist
the Board of
15
<PAGE> 19
Directors in carrying out its responsibilities by providing the Board of
Directors with all information reasonably necessary for the Board of Directors
to consider any issue raised, including information as to a decision by LIFE
COMPANY to disregard voting instructions of Participants. LIFE COMPANY's
responsibilities in connection with the foregoing shall be carried out with a
view only to the interests of Participants.
5.4 CONFLICT REMEDIES.
(a) It is agreed that if it is determined by a majority of the members
of the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, LIFE COMPANY will, if it is a
Participating Insurance Company for which a material irreconcilable conflict is
relevant, at its own expense and to the extent reasonably practicable (as
determined by a majority of the Disinterested Directors), take whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, which
steps may include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the
Accounts from AVIF or any Fund and reinvesting such assets in
a different investment medium, including another Fund of AVIF,
or submitting the question whether such segregation should be
implemented to a vote of all affected Participants and, as
appropriate, segregating the assets of any particular group
(e.g., annuity Participants, life insurance Participants or
all Participants) that votes in favor of such segregation, or
offering to the affected Participants the option of making
such a change; and
(ii) establishing a new registered investment company of the type
defined as a "management company" in Section 4(3) of the 1940
Act or a new separate account that is operated as a management
company.
(b) If the material irreconcilable conflict arises because of LIFE
COMPANY's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at AVIF's election, to withdraw each Account's
investment in AVIF or any Fund. No charge or penalty will be imposed as a result
of such withdrawal. Any such withdrawal must take place within six (6) months
after AVIF gives notice to LIFE COMPANY that this provision is being
implemented, and until such withdrawal AVIF shall continue to accept and
implement orders by LIFE COMPANY for the purchase and redemption of Shares of
AVIF.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to LIFE COMPANY conflicts with
the majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in AVIF within six (6) months after AVIF's Board of
Directors informs LIFE
16
<PAGE> 20
COMPANY that it has determined that such decision has created a material
irreconcilable conflict, and until such withdrawal AVIF shall continue to accept
and implement orders by LIFE COMPANY for the purchase and redemption of Shares
of AVIF. No charge or penalty will be imposed as a result of such withdrawal.
(d) LIFE COMPANY agrees that any remedial action taken by it in
resolving any material irreconcilable conflict will be carried out at its
expense and with a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will AVIF or any of its
affiliates be required to establish a new funding medium for any Contracts. LIFE
COMPANY will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
5.5 NOTICE TO LIFE COMPANY.
AVIF will promptly make known in writing to LIFE COMPANY the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF DIRECTORS.
LIFE COMPANY and AVIF (or its investment adviser) will at least
annually submit to the Board of Directors of AVIF such reports, materials or
data as the Board of Directors may reasonably request so that the Board of
Directors may fully carry out the obligations imposed upon it by the provisions
hereof or any exemptive order granted by the SEC to permit Mixed and Shared
Funding, and said reports, materials and data will be submitted at any
reasonable time deemed appropriate by the Board of Directors. All reports
received by the Board of Directors of potential or existing conflicts, and all
Board of Directors actions with regard to determining the existence of a
conflict, notifying Participating Insurance Companies and Participating Plans of
a conflict, and determining whether any proposed action adequately remedies a
conflict, will be properly recorded in the minutes of the Board of Directors or
other appropriate records, and such minutes or other records will be made
available to the SEC upon request.
5.7 COMPLIANCE WITH SEC RULES.
If, at any time during which AVIF is serving as an investment medium
for variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to Mixed and Shared
17
<PAGE> 21
Funding, AVIF agrees that it will comply with the terms and conditions thereof
and that the terms of this Section 5 shall be deemed modified if and only to the
extent required in order also to comply with the terms and conditions of such
exemptive relief that is afforded by any of said rules that are applicable.
5.8 OTHER REQUIREMENTS.
AVIF will require that each Participating Insurance Company and
Participating Plan enter into an agreement with AVIF that contains in substance
the same provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b),
4.5(a), 5, and 10 of this Agreement.
18
<PAGE> 22
SECTION 6. TERMINATION
6.1 EVENTS OF TERMINATION.
Subject to Section 6.4 below, this Agreement will terminate as to a
Fund:
(a) at the option of any party, with or without cause with respect to
the Fund, upon sixty (60) days advance written notice to the other parties, or,
if later, upon receipt of any required exemptive relief from the SEC, unless
otherwise agreed to in writing by the parties; or
(b) at the option of AVIF upon institution of formal proceedings
against LIFE COMPANY or its affiliates by the NASD, the SEC, any state insurance
regulator or any other regulatory body regarding LIFE COMPANY's obligations
under this Agreement or related to the sale of the Contracts, the operation of
each Account, or the purchase of Shares, if, in each case, AVIF reasonably
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on the Fund with respect to which the Agreement is to be terminated; or
(c) at the option of LIFE COMPANY upon institution of formal
proceedings against AVIF, its principal underwriter, or its investment adviser
by the NASD, the SEC, or any state insurance regulator or any other regulatory
body regarding AVIF's obligations under this Agreement or related to the
operation or management of AVIF or the purchase of AVIF Shares, if, in each
case, LIFE COMPANY reasonably determines that such proceedings, or the facts on
which such proceedings would be based, have a material likelihood of imposing
material adverse consequences on LIFE COMPANY, or the Subaccount corresponding
to the Fund with respect to which the Agreement is to be terminated; or
(d) at the option of any Party in the event that (i) the Fund's Shares
are not registered and, in all material respects, issued and sold in accordance
with any applicable federal or state law, or (ii) such law precludes the use of
such Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY; or
(e) upon termination of the corresponding Subaccount's investment in
the Fund pursuant to Section 5 hereof; or
(f) at the option of LIFE COMPANY if the Fund ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions, or
if LIFE COMPANY reasonably believes that the Fund may fail to so qualify; or
19
<PAGE> 23
(g) at the option of LIFE COMPANY if the Fund fails to comply with
Section 817(h) of the Code or with successor or similar provisions, or if LIFE
COMPANY reasonably believes that the Fund may fail to so comply; or
(h) at the option of AVIF if the Contracts issued by LIFE COMPANY cease
to qualify as annuity contracts or life insurance contracts under the Code
(other than by reason of the Fund's noncompliance with Section 817(h) or
Subchapter M of the Code) or if interests in an Account under the Contracts are
not registered, where required, and, in all material respects, are not issued or
sold in accordance with any applicable federal or state law; or
(i) upon another Party's material breach of any provision of this
Agreement.
6.2 NOTICE REQUIREMENT FOR TERMINATION.
No termination of this Agreement will be effective unless and until the
Party terminating this Agreement gives prior written notice to the other Party
to this Agreement of its intent to terminate, and such notice shall set forth
the basis for such termination. Furthermore:
(a) in the event that any termination is based upon the provision of
Section 6.1(e) hereof, such prior written notice shall be given at least six (6)
months in advance of the effective date of termination unless a shorter time is
agreed to by the Parties hereto;
(b) in the event that any termination is based upon the provisions of
Sections 6.1(b) or 6.1(c) hereof, such prior written notice shall be given at
least ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by the Parties hereto; and
(c) in the event that any termination is based upon the provision of
Section 6.1(a) hereof, such prior written notice shall be given at least sixty
(60) days in advance of the effective date of termination unless a shorter time
is agreed to by the Parties hereto;
(d) in the event that any termination is based upon the provisions of
Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written
notice shall be given as soon as possible within twenty-four (24) hours after
the terminating Party learns of the event causing termination to be required.
6.3 FUNDS TO REMAIN AVAILABLE.
Notwithstanding any termination of this Agreement, AVIF will, at the
option of LIFE COMPANY, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all Contracts in
effect on the effective date of termination of this Agreement (hereinafter
referred to as Existing Contracts).
20
<PAGE> 24
Specifically, without limitation, the owners of the Existing Contracts will be
permitted to reallocate investments in the Fund (as in effect on such date),
redeem investments in the Fund and/or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 6.3 will not apply to any terminations under Section 5 and the
effect of such terminations will be governed by Section 5 of this Agreement.
21
<PAGE> 25
6.4 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
All warranties and indemnifications will survive the termination of
this Agreement.
6.5 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
If any Party terminates this Agreement with respect to any Fund
pursuant to Sections 6.1(b), 6.1(c), 6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i)
hereof, this Agreement shall nevertheless continue in effect as to any Shares of
that Fund that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of the date as
of which an Account owns no Shares of the affected Fund or a date (the "Final
Termination Date") six (6) months following the Initial Termination Date, except
that LIFE COMPANY may, by written notice shorten said six (6) month period in
the case of a termination pursuant to Sections 6.1(d), 6.1(f), 6.1(g), 6.1(h) or
6.1(i).
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
The Parties hereto agree to cooperate and give reasonable assistance to
one another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to Section
6.1(a), the termination date specified in the notice of termination. Such steps
may include combining the affected Account with another Account, substituting
other mutual fund shares for those of the affected Fund, or otherwise
terminating participation by the Contracts in such Fund.
SECTION 8. ASSIGNMENT
This Agreement may not be assigned by any Party, except with the
written consent of each other Party.
SECTION 9. NOTICES
Notices and communications required or permitted will be given by means
mutually acceptable to the Parties concerned. Each other notice or communication
required or permitted by this Agreement will be given to the following persons
at the following addresses and facsimile numbers, or such other persons,
addresses or facsimile numbers as the Party receiving such notices or
communications may subsequently direct in writing:
22
<PAGE> 26
AIM VARIABLE INSURANCE FUNDS, INC.
A I M DISTRIBUTORS, INC.
11 Greenway Plaza, Suite 100
Houston, Texas 77046
Facsimile: (713) 993-9185
Attn: Nancy L. Martin, Esq.
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
1000 Woodbury Road
Woodbury, New York 11797
Facsimile: (713) 993-9185
Attn: Stewart D. Gregg, Esq.
WASHINGTON SQUARE SECURITIES, INC.
20 Washington Avenue South
Minneapolis, Minnesota 55401
Facsimile: 612-342-7531
Attn: Stewart D. Gregg, Esq.
SECTION 10. VOTING PROCEDURES
Subject to the cost allocation procedures set forth in Section 3
hereof, LIFE COMPANY will distribute all proxy material furnished by AVIF to
Participants to whom pass-through voting privileges are required to be extended
and will solicit voting instructions from Participants. LIFE COMPANY will vote
Shares in accordance with timely instructions received from Participants. LIFE
COMPANY will vote Shares that are (a) not attributable to Participants to whom
pass-through voting privileges are extended, or (b) attributable to
Participants, but for which no timely instructions have been received, in the
same proportion as Shares for which said instructions have been received from
Participants, so long as and to the extent that the SEC continues to interpret
the 1940 Act to require pass through voting privileges for Participants. Neither
LIFE COMPANY nor any of its affiliates will in any way recommend action in
connection with or oppose or interfere with the solicitation of proxies for the
Shares held for such Participants. LIFE COMPANY reserves the right to vote
shares held in any Account in its own right, to the extent permitted by law.
LIFE COMPANY shall be responsible for assuring that each of its Accounts holding
Shares calculates voting privileges in a manner consistent with that of other
Participating Insurance Companies or in the manner required by the Mixed and
Shared Funding exemptive order obtained by AVIF. AVIF will notify LIFE COMPANY
of any changes of interpretations or
23
<PAGE> 27
amendments to Mixed and Shared Funding exemptive order it has obtained. AVIF
will comply with all provisions of the 1940 Act requiring voting by
shareholders, and in particular, AVIF either will provide for annual meetings
(except insofar as the SEC may interpret Section 16 of the 1940 Act not to
require such meetings) or will comply with Section 16(c) of the 1940 Act
(although AVIF is not one of the trusts described in Section 16(c) of that Act)
as well as with Sections 16(a) and, if and when applicable, 16(b). Further, AVIF
will act in accordance with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of directors and with whatever
rules the SEC may promulgate with respect thereto.
24
<PAGE> 28
SECTION 11. FOREIGN TAX CREDITS
AVIF agrees to consult in advance with LIFE COMPANY concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to its shareholders.
SECTION 12. INDEMNIFICATION
12.1 OF AVIF AND AIM BY LIFE COMPANY AND UNDERWRITER.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c),
below, LIFE COMPANY and UNDERWRITER agree to indemnify and hold harmless AVIF,
AIM, their affiliates, and each person, if any, who controls AVIF, AIM, or their
affiliates within the meaning of Section 15 of the 1933 Act and each of their
respective directors and officers, (collectively, the "Indemnified Parties" for
purposes of this Section 12.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
LIFE COMPANY and UNDERWRITER) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses), to which the Indemnified Parties
may become subject under any statute, regulation, at common law or otherwise;
provided, the Account owns or has owned shares of the Fund and insofar as such
losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Account's 1933 Act registration statement, any Account
Prospectus, the Contracts, or sales literature or advertising
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; provided, that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to LIFE COMPANY or UNDERWRITER by or on
behalf of AVIF or AIM for use in any Account's 1933 Act
registration statement, any Account Prospectus, the Contracts,
or sales literature or advertising or otherwise for use in
connection with the sale of Contracts or Shares (or any
amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in AVIF's 1933 Act registration statement, AVIF
Prospectus, sales literature or advertising of AVIF, or any
25
<PAGE> 29
amendment or supplement to any of the foregoing, not supplied
for use therein by or on behalf of LIFE COMPANY, UNDERWRITER
or their respective affiliates and on which such persons have
reasonably relied) or the negligent, illegal or fraudulent
conduct of LIFE COMPANY, UNDERWRITER or their respective
affiliates or persons under their control (including, without
limitation, their employees and "persons associated with a
member," as that term is defined in paragraph (q) of Article I
of the NASD's By-Laws), in connection with the sale or
distribution of the Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in AVIF's 1933
Act registration statement, AVIF Prospectus, sales literature
or advertising of AVIF, or any amendment or supplement to any
of the foregoing, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if
such a statement or omission was made in reliance upon and in
conformity with information furnished to AVIF, AIM or their
affiliates by or on behalf of LIFE COMPANY, UNDERWRITER or
their respective affiliates for use in AVIF's 1933 Act
registration statement, AVIF Prospectus, sales literature or
advertising of AVIF, or any amendment or supplement to any of
the foregoing; or
(iv) arise as a result of any failure by LIFE COMPANY or
UNDERWRITER to perform the obligations, provide the services
and furnish the materials required of them under the terms of
this Agreement, or any material breach of any representation
and/or warranty made by LIFE COMPANY or UNDERWRITER in this
Agreement or arise out of or result from any other material
breach of this Agreement by LIFE COMPANY or UNDERWRITER; or
(v) arise as a result of failure by the Contracts issued by LIFE
COMPANY to qualify as annuity contracts or life insurance
contracts under the Code, otherwise than by reason of any
Fund's failure to comply with Subchapter M or Section 817(h)
of the Code.
(b) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any losses, claims, damages, liabilities or actions
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance by that
Indemnified Party of its duties or by reason of that Indemnified Party's
reckless disregard of obligations or duties (i) under this Agreement, or (ii) to
AVIF or AIM.
26
<PAGE> 30
(c) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this
Section 12.1 with respect to any action against an Indemnified Party unless AVIF
or AIM shall have notified LIFE COMPANY and UNDERWRITER in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the action shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY and
UNDERWRITER of any such action shall not relieve LIFE COMPANY and UNDERWRITER
from any liability which they may have to the Indemnified Party against whom
such action is brought otherwise than on account of this Section 12.1. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, LIFE COMPANY and UNDERWRITER shall be entitled to
participate, at their own expense, in the defense of such action and also shall
be entitled to assume the defense thereof, with counsel approved by the
Indemnified Party named in the action, which approval shall not be unreasonably
withheld. After notice from LIFE COMPANY or UNDERWRITER to such Indemnified
Party of LIFE COMPANY's or UNDERWRITER's election to assume the defense thereof,
the Indemnified Party will cooperate fully with LIFE COMPANY and UNDERWRITER and
shall bear the fees and expenses of any additional counsel retained by it, and
neither LIFE COMPANY nor UNDERWRITER will be liable to such Indemnified Party
under this Agreement for any legal or other expenses subsequently incurred by
such Indemnified Party independently in connection with the defense thereof,
other than reasonable costs of investigation.
12.2 OF LIFE COMPANY AND UNDERWRITER BY AVIF AND AIM.
(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e), below, AVIF and AIM agree to indemnify and hold harmless LIFE COMPANY,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
LIFE COMPANY, UNDERWRITER or their respective affiliates within the meaning of
Section 15 of the 1933 Act and each of their respective directors and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of AVIF and/or AIM) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law, or otherwise; provided, the Account owns or has owned shares of
the Fund and insofar as such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in AVIF's 1933
Act registration statement, AVIF Prospectus or sales
literature or advertising of AVIF (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be
27
<PAGE> 31
stated therein or necessary to make the statements therein not
misleading; provided, that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
AVIF or its affiliates by or on behalf of LIFE COMPANY,
UNDERWRITER or their respective affiliates for use in AVIF's
1933 Act registration statement, AVIF Prospectus, or in sales
literature or advertising or otherwise for use in connection
with the sale of Contracts or Shares (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in any Account's 1933 Act registration statement,
any Account Prospectus, sales literature or advertising for
the Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of
AVIF, AIM or their affiliates and on which such persons have
reasonably relied) or the negligent, illegal or fraudulent
conduct of AVIF, AIM or their affiliates or persons under
their control (including, without limitation, their employees
and "persons associated with a member" as that term is defined
in Section (q) of Article I of the NASD By-Laws), in
connection with the sale or distribution of AVIF Shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any
Account's 1933 Act registration statement, any Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the
foregoing, or the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if
such statement or omission was made in reliance upon and in
conformity with information furnished to LIFE COMPANY,
UNDERWRITER or their respective affiliates by or on behalf of
AVIF or AIM for use in any Account's 1933 Act registration
statement, any Account Prospectus, sales literature or
advertising covering the Contracts, or any amendment or
supplement to any of the foregoing; or
(iv) arise as a result of any failure by AVIF to perform the
obligations, provide the services and furnish the materials
required of it under the terms of this Agreement, or any
material breach of any representation and/or warranty made by
AVIF in this Agreement or arise out of or result from any
other material breach of this Agreement by AVIF.
28
<PAGE> 32
(b) Except to the extent provided in Sections 12.2(c), 12.2(d) and
12.2(e) hereof, AVIF and AIM agree to indemnify and hold harmless the
Indemnified Parties from and against any and all losses, claims, damages,
liabilities (including amounts paid in settlement thereof with, the written
consent of AVIF and/or AIM) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses) to which the Indemnified Parties
may become subject directly or indirectly under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any Fund to
operate as a regulated investment company in compliance with (i) Subchapter M of
the Code and regulations thereunder, or (ii) Section 817(h) of the Code and
regulations thereunder, including, without limitation, any income taxes and
related penalties, rescission charges, liability under state law to Participants
asserting liability against LIFE COMPANY pursuant to the Contracts, the costs of
any ruling and closing agreement or other settlement with the IRS, and the cost
of any substitution by LIFE COMPANY of Shares of another investment company or
portfolio for those of any adversely affected Fund as a funding medium for each
Account that LIFE COMPANY reasonably deems necessary or appropriate as a result
of the noncompliance.
(c) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of such Indemnified Party's reckless disregard of its
obligations and duties (i) under this Agreement, or (ii) to LIFE COMPANY,
UNDERWRITER, each Account or Participants.
(d) Neither AVIF nor AIM shall be liable under this Section 12.2 with
respect to any action against an Indemnified Party unless the Indemnified Party
shall have notified AVIF and/or AIM in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify AVIF or AIM of any such action shall not relieve
AVIF or AIM from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this Section
12.2. Except as otherwise provided herein, in case any such action is brought
against an Indemnified Party, AVIF and/or AIM will be entitled to participate,
at its own expense, in the defense of such action and also shall be entitled to
assume the defense thereof (which shall include, without limitation, the conduct
of any ruling request and closing agreement or other settlement proceeding with
the IRS), with counsel approved by the Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from AVIF and/or
AIM to such Indemnified Party of AVIF's or AIM"s election to assume the defense
thereof, the Indemnified Party will cooperate fully with AVIF and AIM and shall
bear the fees and expenses of any additional counsel retained by it, and AVIF
and AIM will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently
29
<PAGE> 33
incurred by such Indemnified Party independently in connection with the defense
thereof, other than reasonable costs of investigation.
(e) In no event shall AVIF or AIM be liable under the indemnification
provisions contained in this Agreement to any individual or entity, including,
without limitation, LIFE COMPANY, UNDERWRITER or any other Participating
Insurance Company or any Participant, with respect to any losses, claims,
damages, liabilities or expenses that arise out of or result from (i) a breach
of any representation, warranty, and/or covenant made by LIFE COMPANY or
UNDERWRITER hereunder or by any Participating Insurance Company under an
agreement containing substantially similar representations, warranties and
covenants; (ii) the failure by LIFE COMPANY or any Participating Insurance
Company to maintain its segregated asset account (which invests in any Fund) as
a legally and validly established segregated asset account under applicable
state law and as a duly registered unit investment trust under the provisions of
the 1940 Act (unless exempt therefrom); or (iii) the failure by LIFE COMPANY or
any Participating Insurance Company to maintain its variable annuity or life
insurance contracts (with respect to which any Fund serves as an underlying
funding vehicle) as annuity contracts or life insurance contracts under
applicable provisions of the Code.
30
<PAGE> 34
12.3 EFFECT OF NOTICE.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Sections 12.1(c) or 12.2(d) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or responsibility,
and the indemnifying Party will remain free to contest liability with respect to
the claim among the Parties or otherwise.
12.4 SUCCESSORS.
A successor by law of any Party shall be entitled to the benefits of
the indemnification contained in this Section 12.
SECTION 13. APPLICABLE LAW
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with Maryland law, without regard for that state's
principles of conflict of laws.
SECTION 14. EXECUTION IN COUNTERPARTS
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
SECTION 15. SEVERABILITY
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
SECTION 16. RIGHTS CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
SECTION 17. HEADINGS
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
31
<PAGE> 35
SECTION 18. CONFIDENTIALITY
AVIF acknowledges that the identities of the customers of LIFE COMPANY
or any of its affiliates (collectively, the "LIFE COMPANY Protected Parties for
purposes of this Section 18), information maintained regarding those customers,
and all computer programs and procedures or other information developed by the
LIFE COMPANY Protected Parties or any of their employees or agents in connection
with LIFE COMPANY's performance of its duties under this Agreement are the
valuable property of the LIFE COMPANY Protected Parties. AVIF agrees that if it
comes into possession of any list or compilation of the identities of or other
information about the LIFE COMPANY Protected Parties' customers, or any other
information or property of the LIFE COMPANY Protected Parties, other than such
information as may be independently developed or compiled by AVIF from
information supplied to it by the LIFE COMPANY Protected Parties' customers who
also maintain accounts directly with AVIF, AVIF will hold such information or
property in confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with LIFE COMPANY's prior written
consent; or (b) as required by law or judicial process. LIFE COMPANY
acknowledges that the identities of the customers of AVIF or any of its
affiliates (collectively, the "AVIF Protected Parties" for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the AVIF Protected
Parties or any of their employees or agents in connection with AVIF's
performance of its duties under this Agreement are the valuable property of the
AVIF Protected Parties. LIFE COMPANY agrees that if it comes into possession of
any list or compilation of the identities of or other information about the AVIF
Protected Parties' customers or any other information or property of the AVIF
Protected Parties, other than such information as may be independently developed
or compiled by LIFE COMPANY from information supplied to it by the AVIF
Protected Parties' customers who also maintain accounts directly with LIFE
COMPANY, LIFE COMPANY will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with AVIF's prior written consent; or (b) as required by
law or judicial process. Each party acknowledges that any breach of the
agreements in this Section 18 would result in immediate and irreparable harm to
the other parties for which there would be no adequate remedy at law and agree
that in the event of such a breach, the other parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
SECTION 19. TRADEMARKS AND FUND NAMES
(a) Except as may otherwise be provided in a License Agreement among A
I M Management Group, Inc., LIFE COMPANY and UNDERWRITER, neither LIFE COMPANY
nor UNDERWRITER or any of their respective affiliates, shall use any trademark,
trade name, service mark or logo of AVIF, AIM or any of their respective
affiliates, or any variation of any such trademark, trade name, service mark or
logo,
32
<PAGE> 36
without AVIF's or AIM's prior written consent, the granting of which shall be at
AVIF's or AIM's sole option.
(b) Except as otherwise expressly provided in this Agreement, neither
AVIF, its investment adviser, its principal underwriter, or any affiliates
thereof shall use any trademark, trade name, service mark or logo of LIFE
COMPANY, UNDERWRITER or any of their affiliates, or any variation of any such
trademark, trade name, service mark or logo, without LIFE COMPANY's or
UNDERWRITER's prior written consent, the granting of which shall be at LIFE
COMPANY's or UNDERWRITER's sole option.
SECTION 20. PARTIES TO COOPERATE
Each party to this Agreement will cooperate with each other party and
all appropriate governmental authorities (including, without limitation, the
SEC, the NASD and state insurance regulators) and will permit each other and
such authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
SECTION 21. AMENDMENTS
No provision of this Agreement may be amended or modified in any manner
except by a written agreement executed by all parties hereto.
33
<PAGE> 37
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers signing below.
AIM VARIABLE INSURANCE FUNDS, INC.
Attest: ________________________ By: ______________________________________
Name: Nancy L. Martin Name: Robert H. Graham
Title: Assistant Secretary Title: President
A I M DISTRIBUTORS, INC.
Attest: ________________________ By: ______________________________________
Name: Nancy L. Martin Name: Michael J. Cemo
Title: Assistant Secretary Title: President
RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, on behalf of itself and its
separate accounts
Attest: ________________________ By: ______________________________________
Name: ________________________ Name: ____________________________________
Title: ________________________ Title: ___________________________________
WASHINGTON SQUARE SECURITIES, INC.
Attest: ________________________ By: ______________________________________
Name: ________________________ Name: ____________________________________
34
<PAGE> 38
Title: ________________________ Title: ___________________________________
35
<PAGE> 39
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Dent Demographic Trends Fund
SEPARATE ACCOUNTS UTILIZING THE FUNDS
ReliaStar Select Variable Account
ReliaStar Select*Life Variable Account
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS
Select*Annuity III
Advantage SE Variable Annuity
Select*Life II
Select*Life II
SVUL
Flex Design
36
<PAGE> 40
SCHEDULE B
AIM'S PRICING ERROR POLICIES
Determination of Materiality
In the event that AIM discovers an error in the calculation of the Fund's net
asset value, the following policies will apply:
If the amount of the error is less than $.01 per share, it is considered
immaterial and no adjustments are made.
If the amount of the error is $.01 per share or more, then the following
thresholds are applied:
a. If the amount of the difference in the erroneous net asset
value and the correct net asset value is less than .5% of the
correct net asset value, AIM will reimburse the affected Fund
to the extent of any loss resulting from the error. No other
adjustments shall be made.
b. If the amount of the difference in the erroneous net asset
value and the correct net asset value is .5% of the correct
net asset value or greater, then AIM will determine the impact
of the error to the affected Fund and shall reimburse such
Fund (and/or LIFE COMPANY, as appropriate, such as in the
event that the error was not discovered until after LIFE
COMPANY processed transactions using the erroneous net asset
value) to the extent of any loss resulting from the error. To
the extent that an overstatement of net asset value per share
is detected quickly and LIFE COMPANY has not mailed redemption
checks to Participants, LIFE COMPANY and AIM agree to examine
the extent of the error to determine the feasibility of
reprocessing such redemption transaction (for purposes of
reimbursing the Fund to the extent of any such overpayment).
Reprocessing Cost Reimbursement
To the extent a reprocessing of Participant transactions is required pursuant to
paragraph (b), above, AIM shall reimburse LIFE COMPANY for LIFE COMPANY's
reprocessing costs in an amount not to exceed $3.00 per contract affected by $10
or more. The reprocessing costs may be amended upon mutual agreement of the
Parties in writing.
The Pricing Policies described herein may be modified by AVIF as approved by its
Board of Directors. AIM agrees to use its best efforts to notify LIFE COMPANY at
least five (5) days prior to any such meeting of the Board of Directors of AVIF
to consider such proposed changes.
37
<PAGE> 41
SCHEDULE C
EXPENSE ALLOCATIONS
<TABLE>
<CAPTION>
LIFE COMPANY AVIF / AIM
------------ ----------
<S> <C>
Preparing and filing the Account's Preparing and filing the Fund's
registration statement registration statement
Text composition for Account Text composition for Fund prospectuses
prospectuses and supplements and supplements
Text alterations of prospectuses Text alterations of prospectuses (Fund)
(Account) and supplements (Account) and supplements (Fund)
Printing Account and Fund prospectuses Camera ready and HTML Fund prospectus,
and supplements for prospective Printing of Fund prospectus for policy
purchasers owners of record
Text composition and printing Text composition and printing Fund SAIs
Account SAIs
Mailing and distributing Account SAIs Mailing and distributing Fund SAIs to
to policy owners upon request by policy owners upon request by policy
policy owners owners
Mailing and distributing Account Mailing and distributing Fund prospectus
prospectus and Account supplements and Account supplements to policy
to policy owners of record as owners of record as required by Federal
required by Federal Securities Laws Securities Laws
and to prospective purchasers
Text composition, printing, mailing, Text composition, printing, mailing, and
and distributing annual and semi-annual distributing annual and semi-annual
reports for Account reports for Fund
Text composition, printing, mailing, Text composition, printing, mailing,
distributing, and tabulation of proxy distributing and tabulation of proxy
statements and voting instruction statements and voting instruction
solicitation materials to policy owners solicitation materials to policy owners
with respect to proxies related to the with respect to proxies related to the
Account Fund
Preparation, printing and distributing
sales material and advertising relating
to the Funds, insofar as such materials
are prepared by LIFE COMPANY and relate
</TABLE>
38
<PAGE> 42
<TABLE>
<CAPTION>
LIFE COMPANY AVIF / AIM
------------ ----------
<S> <C>
to the Contracts and filing such
materials with and obtaining
approval from, the SEC, the NASD,
any state insurance regulatory
authority, and any other appropriate
regulatory authority, to the extent
required
</TABLE>
39
<PAGE> 1
Exhibit 99.1.(8)(z)
ADMINISTRATIVE SERVICES AGREEMENT
RELIASTAR LIFE INSURANCE COMPANY, NORTHERN LIFE INSURANCE COMPANY,
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK (INSURERS) and A I M ADVISORS, INC.
("AIM) (collectively, the "Parties") mutually agree to the arrangements set
forth in this Administrative Services Agreement (the "Agreement") dated as of
___________, 2000.
WHEREAS, AIM is the investment adviser to AIM Variable Insurance
Funds, Inc. (the "Fund"); and
WHEREAS, AIM has entered into an amended Master Administrative
Services Agreement, dated May 1, 1998, with the Fund ("Master Agreement")
pursuant to which it has agreed to provide, or arrange to provide, certain
administrative services, including such services as may be requested by the
Fund's Board of Directors from time to time; and
WHEREAS, INSURERS issues variable life insurance policies and/or
variable annuity contracts (collectively, the "Contracts"); and
WHEREAS, INSURERS have entered into a participation agreements,
("Participation Agreements") with the Fund, pursuant to which the Fund has
agreed to make shares of certain of its portfolios ("Portfolios") available for
purchase by one or more of INSURERS' separate accounts or divisions thereof
(each, a "Separate Account"), in connection with the allocation by Contract
owners of purchase payments to corresponding investment options offered under
the Contracts; and
WHEREAS, INSURERS and AIM expect that the Fund, and its Portfolios,
can derive substantial savings in administrative expenses by virtue of having
one or more Separate Accounts of INSURERS each as a single shareholder of record
of Portfolio shares, rather than having numerous public shareholders of such
shares; and
WHEREAS, INSURERS and AIM expect that the Fund, and its Portfolios,
can derive such substantial savings because INSURERS performs the administrative
services listed on Schedule A hereto for the Fund in connection with the
Contracts issued by INSURERS; and
WHEREAS, INSURERS have no contractual or other legal obligation to
perform such administrative services, other than pursuant to this Agreement and
the Participation Agreements; and
WHEREAS, INSURERS desire to be compensated for providing such
administrative services; and
<PAGE> 2
WHEREAS, AIM desires that the Fund benefit from the lower
administrative expenses resulting from the administrative services performed by
INSURERS; and
WHEREAS, AIM desires to retain the administrative services of INSURERS
and to compensate INSURERS for providing such administrative services;
NOW, THEREFORE, the Parties agree as follows:
SECTION 1. ADMINISTRATIVE SERVICES; PAYMENTS THEREFOR.
(a) INSURERS shall provide the administrative services set out in
Schedule A hereto and made a part hereof, as the same may be amended from time
to time. For such services, AIM agrees to pay to INSURERS a quarterly fee
("Quarterly Fee") equal to a percentage of the average daily net assets of the
Fund attributable to the Contracts issued by INSURERS ("INSURERS Fund Assets) at
the annual rate of 0.25%.
(b) AIM shall calculate the Quarterly Fee at the end of each calendar
quarter and will make such payment to INSURERS, without demand or notice by
INSURERS, within 30 days thereafter, in a manner mutually agreed upon by the
Parties from time to time.
(c) From time to time, the Parties shall review the Quarterly Fee to
determine whether it exceeds or is reasonably expected to exceed the incurred
and anticipated costs, over time, of INSURERS. The Parties agree to negotiate in
good faith a reduction to the Quarterly Fee as necessary to eliminate any such
excess or as necessary to reflect a reduction in the fee paid by the Fund to AIM
pursuant to the Master Agreement.
SECTION 2. NATURE OF PAYMENTS.
The Parties to this Agreement recognize and agree that AIM's payments
hereunder are for administrative services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution of
Contracts or of Portfolio shares, and are not otherwise related to investment
advisory or distribution services or expenses. INSURERS represent and warrant
that the fees to be paid by AIM for services to be rendered by INSURERS pursuant
to the terms of this Agreement are to compensate the INSURERS for providing
administrative services to the Fund, and are not designed to reimburse or
compensate INSURERS for providing administrative services with respect to the
Contracts or any Separate Account (it being understood that for accounting
purposes INSURER does not allocate fees received to specific services provided
or expenses incurred on a dollar for dollar basis).
SECTION 3. TERM AND TERMINATION.
Any Party may terminate this Agreement, without penalty, on 60 days
written notice to the other Party. Unless so terminated, this Agreement shall
continue in effect for so long as AIM or its successor(s) in interest, or any
affiliate thereof, continues to perform in a similar capacity for the Fund, and
for so long as INSURERS provide the services contemplated hereunder with respect
to
2
<PAGE> 3
Contracts under which values or monies are allocated to a Portfolio.
SECTION 4. AMENDMENT.
This Agreement may be amended upon mutual agreement of the Parties in
writing.
SECTION 5. NOTICES.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
RELIASTAR LIFE INSURANCE COMPANY
20 Washington Avenue South
Minneapolis, Minnesota 55401
Facsimile: (612) 342-7531
Attention: Stewart D. Gregg, Esq.
NORTHERN LIFE INSURANCE COMPANY
Street address
City, State Zip
Facsimile:
Attention:
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
Street address
City, State Zip
Facsimile:
Attention:
A I M ADVISORS, INC.
11 Greenway Plaza, Suite 100
Houston, Texas 77046
Facsimile: (713) 993-9185
Attention: Nancy L. Martin, Esq.
SECTION 6. MISCELLANEOUS.
(a) Successors and Assigns. This Agreement shall be binding upon the
Parties and their transferees, successors and assigns. The benefits of and the
right to enforce this Agreement shall accrue to the Parties and their
transferees, successors and assigns.
(b) Assignment. Neither this Agreement nor any of the rights,
obligations or liabilities of any Party hereto shall be assigned without the
written consent of the other Party.
3
<PAGE> 4
(c) Intended Beneficiaries. Nothing in this Agreement shall be
construed to give any person or entity other than the Parties, as well as the
Fund, any legal or equitable claim, right or remedy. Rather, this Agreement is
intended to be for the sole and exclusive benefit of the Parties, as well as the
Fund.
(d) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall together constitute
one and the same instrument.
(e) Applicable Law. This Agreement shall be interpreted, construed,
and enforced in accordance with the laws of the State of Delaware without
reference to the conflict of law principles thereof.
(f) Severability. If any portion of this Agreement shall be found to
be invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but shall
have the same force and effect as if the invalid or unenforceable portion had
not been inserted.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date of first above written.
RELIASTAR LIFE INSURANCE COMPANY
By: ____________________________________
Title: ____________________________________
NORTHERN LIFE INSURANCE COMPANY
By: ____________________________________
Title: ____________________________________
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
By: ____________________________________
Title: ____________________________________
A I M ADVISORS, INC.
By: ____________________________________
Title: ____________________________________
4
<PAGE> 5
SCHEDULE A
ADMINISTRATIVE SERVICES FOR
AIM VARIABLE INSURANCE FUNDS, INC.
INSURERS shall provide certain administrative services respecting the
operations of the Fund, as set forth below. This Schedule, which may be amended
from time to time as mutually agreed upon by INSURERS and AIM, constitutes an
integral part of the Agreement to which it is attached. Capitalized terms used
herein shall, unless otherwise noted, have the same meaning as the defined terms
in the Agreement to which this Schedule relates.
A. RECORDS OF PORTFOLIO SHARE TRANSACTIONS; MISCELLANEOUS RECORDS
1. INSURERS shall maintain master accounts with the Fund, on behalf of
each Portfolio, which accounts shall bear the name of INSURERS as the record
owner of Portfolio shares on behalf of each Separate Account investing in the
Portfolio.
2. INSURERS shall maintain a daily journal setting out the number of
shares of each Portfolio purchased, redeemed or exchanged by Contract owners
each day, as well as the net purchase or redemption orders for Portfolio shares
submitted each day, to assist AIM, the Fund and/or the Fund's transfer agent in
tracking and recording Portfolio share transactions, and to facilitate the
computation of each Portfolio's net asset value per share. INSURERS shall
promptly provide AIM, the Fund, and the Fund's transfer agent with a copy of
such journal entries or information appearing thereon in such format as may be
reasonably requested from time to time. INSURERS shall provide such other
assistance to AIM, the Fund, and the Fund's transfer agent as may be necessary
to cause various Portfolio share transactions effected by Contract owners to be
properly reflected on the books and records of the Fund.
3. In addition to the foregoing records, and without limitation, INSURERS
shall maintain and preserve all records as required by law to be maintained and
preserved in connection with providing administrative services hereunder.
B. ORDER PLACEMENT AND PAYMENT
1. INSURERS shall determine the net amount to be transmitted to the
Separate Accounts as a result of redemptions of each Portfolio's shares based on
Contract owner redemption requests and shall disburse or credit to the Separate
Accounts all proceeds of redemptions of Portfolio shares. INSURERS shall notify
the Fund of the cash required to meet redemption payments.
2. INSURERS shall determine the net amount to be transmitted to the Fund
as a result of purchases of Portfolio shares based on Contract owner purchase
payments and transfers allocated to the Separate Accounts investing in each
Portfolio. INSURERS shall transmit net purchase payments to the Fund's
custodian.
5
<PAGE> 6
C. ACCOUNTING SERVICES
INSURERS shall perform miscellaneous accounting services as may be
reasonably requested from time to time by AIM, which services shall relate to
the business contemplated by the Participation Agreements between INSURERS and
the Fund, as amended from time to time. Such services shall include, without
limitation, periodic reconciliation and balancing of INSURERS' books and records
with those of the Fund with respect to such matters as cash accounts, Portfolio
share purchase and redemption orders placed with the Fund, dividend and
distribution payments by the Fund, and such other accounting matters that may
arise from time to time in connection with the operations of the Fund as related
to the business contemplated by the Participation Agreements.
D. REPORTS
INSURERS acknowledges that AIM may, from time to time, be called upon by
the Fund's Board of Directors ("Board"), to provide various types of information
pertaining to the operations of the Fund and related matters, and that AIM also
may, from time to time, decide to provide such information to the Board in its
own discretion. Accordingly, INSURERS agree to provide AIM with such assistance
as AIM may reasonably request so that AIM can report such information to the
Fund's Board in a timely manner. INSURERS acknowledges that such information and
assistance shall be in addition to the information and assistance required of
INSURERS pursuant to the Fund's mixed and shared funding SEC exemptive order,
described in the Participation Agreements.
INSURERS further agree to provide AIM with such assistance as AIM may
reasonably request with respect to the preparation and submission of reports and
other documents pertaining to the Fund to appropriate regulatory bodies and
third party reporting services.
E. FUND-RELATED CONTRACT OWNER SERVICES
INSURERS agree to print and distribute, in a timely manner, prospectuses,
statements of additional information, supplements thereto, periodic reports,
proxy materials and any other materials of the Fund required by law or otherwise
to be given to its shareholders, including, without limitation, Contract owners
investing in Portfolio shares. INSURERS further agree to provide telephonic
support for Contract owners, including, without limitation, advice with respect
to inquiries about the Fund and each Portfolio thereof (not including
information about performance or related to sales), communicating with Contract
owners about Fund (and Separate Account) performance, and assisting with proxy
solicitations, specifically with respect to soliciting voting instructions from
Contract owners.
F. MISCELLANEOUS SERVICES
INSURERS shall provide such other administrative support to the Fund as
mutually agreed between INSURERS and AIM or the Fund from time to time. INSURERS
shall, from time to time, relieve the Fund of other usual or incidental
administration services of the type ordinarily borne by mutual funds that offer
shares to individual members of the general public.
6
<PAGE> 1
Exhibit 1.(10)(b)
<TABLE>
<C> <C>
SUPPLEMENTARY LIFE APPLICATION [RELIASTAR LOGO]
Please print all answers in black ink. Reliastar Life Insurance Company of New York
Changes and corrections must be initialed by Applicant. 1000 Woodbury Road, Suite 102
P.O. Box 9004, Woodbury, New York 11797
</TABLE>
1. NAME OF PROPOSED INSURED (First, Middle, Last)
________________________________________________________________________________
2. ALLOCATION OF PREMIUM PAYMENTS: Allocation must be in whole percentage points
totaling 100%
a. [ %] Fixed Account (SFA)
AIM VARIABLE INSURANCE PRODUCTS FUND, INC.
b. [ %] AIM V.I. Dent Demographic
Trends Fund (ADT)
THE ALGER AMERICAN FUND
c. [ %] Alger American Growth
Portfolio (AGR)
d. [ %] Alger American Leveraged
AllCap Portfolio (ALA)
e. [ %] Alger American MidCap
Growth Portfolio (AMG)
f. [ %] Alger American Small
Capitalization Portfolio (ASC)
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
g. [ %] VIP Equity Income
Portfolio (FEI)
h. [ %] VIP Growth
Portfolio (FGP)
i. [ %] VIP High Income
Portfolio (FHI)
j. [ %] VIP Money Market
Portfolio (FMM)
FIDELITY VARIABLE INSURANCE
PRODUCTS FUNDS II
k. [ %] VIP II Contrafund
Portfolio (FCF)
l. [ %] VIP II Index 500
Portfolio (FIN)
m. [ %] VIP II Investment Grade
Bond Portfolio (FIG)
JANUS ASPEN SERIES
n. [ %] Aggressive Growth
Portfolio (JAG)
o. [ %] Growth
Portfolio (JGP)
p. [ %] International Growth
Portfolio (JIG)
q. [ %] Worldwide Growth
Portfolio (JWG)
NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST
r. [ %] Limited Maturity Bond
Portfolio (NLM)
s. [ %] Partners
Portfolio (NPP)
t. [ %] Socially Responsive
Portfolio (NSR)
PILGRIM VARIABLE PRODUCTS TRUST
u. [ %] VP Growth Opportunities
Portfolio (PGO)
v. [ %] VP Growth + Value
Portfolio (NGF)
w. [ %] VP High Yield Bond
Portfolio (NHY)
x. [ %] VP International Value
Portfolio (NIV)
y. [ %] VP MagnaCap
Portfolio (PMP)
z. [ %] VP MidCap Opportunities
Portfolio (PMO)
aa. [ %] VP Research Enhanced
Index Portfolio (NMS)
bb. [ %] VP SmallCap Opportunities
Portfolio (NIG)
OCC ACCUMULATION TRUST
cc. [ %] Equity
Portfolio (OEP)
dd. [ %] Global Equity
Portfolio (OGE)
ee. [ %] Managed
Portfolio (OMP)
ff. [ %] Small Cap
Portfolio (OSC)
PUTNAM VARIABLE TRUST
gg. [ %] Putnam VT Growth &
Income Fund (PGI)
hh. [ %] Putnam VT New
Opportunities Fund (PNO)
ii. [ %] Putnam VT Voyager
Fund (PVY)
We reserve the right to limit
your participation to a total of
seventeen Sub-Account funds
over the lifetime of your Policy.
Upon participation in the
seventeenth Sub-Account fund,
you would be able to allocate
premiums to and transfer
within the seventeen Sub-
Account funds already used
and which are still available,
but could not participate in any
other Sub-Account funds.
________________________________________________________________________________
3. SUITABILITY:
IMPORTANT NOTICE: THE DEATH BENEFIT, CASH SURRENDER VALUE, DURATION OF
COVERAGE, AND ENDOWMENT BENEFITS UNDER THE VARIABLE ACCOUNT MAY INCREASE OR
DECREASE WITH THE INVESTMENT PERFORMANCE OF THE SUB-ACCOUNT FUNDS. REGARDLESS
OF THE INVESTMENT PERFORMANCE, THE DEATH BENEFIT WILL NEVER BE LESS THAN THE
FACE AMOUNT AS LONG AS THERE ARE NO UNPAID MONTHLY DEDUCTIONS, POLICY LOANS
OR PARTIAL WITHDRAWALS. THERE IS NO GUARANTEED CASH SURRENDER VALUE OR
ENDOWMENT BENEFITS FOR AMOUNTS IN THE VARIABLE ACCOUNT, AND THESE AMOUNTS MAY
BE REDUCED TO ZERO. UPON REQUEST, WE WILL FURNISH YOU WITH A COMPARISON OF
BENEFITS OF THE POLICY APPLIED FOR AND A FIXED LIFE INSURANCE POLICY.
a. Did the Proposed Owner receive a Prospectus describing the policy,
investment options, and important features? . . [ ] Yes [ ] No
b. If yes, which Prospectus was delivered? [ ] Internet Website [ ] CD-ROM
[ ] Paper
If delivery was the internet, the Proposed Owner has been given
instructions for accessing the information, and if delivery was in
electronic format, the Proposed Owner consented to delivery in this
format.
c. What is the effective date of the Prospectus? __________________________
Form 4096C (Rev 2-00)
Page 1
<PAGE> 2
3. SUITABILITY (CONTINUED):
<TABLE>
<S> <C>
d. Does the Proposed Owner consent to delivery of future prospectuses,
prospectus supplements, statements of additional information, annual
and semi-annual reports, proxy materials, transactional confirmations,
and periodic statements in one or more of the following forms? (Check
all that apply.)
____ Internet Website
____ CD-ROM
____ E-Mail, and my e-mail address is _______________________________
This consent is valid until revoked by the Proposed Owner in writing.
The Proposed Owner understands that ReliaStar Life Insurance Company
of New York may choose to discontinue delivery of the above types at
any time and may choose to deliver a paper version.
e. Does the Proposed Owner consent to eliminate duplicate mailings of
identical documents to the same household (including prospectuses,
statements of additional information, and annual and semi-annual
reports) if they have more than one ReliaStar Life Insurance Company
of New York policy?......................................................... ____ Yes ____ No
f. Does the Proposed Owner understand that if premiums are allocated to
the Variable Account the Death Benefit may, under certain conditions,
increase or decrease depending on the investment performance of the
Variable Account?........................................................... ____ Yes ____ No
g. Does the Proposed Owner understand the Cash Surrender Value will
increase or decrease reflecting the investment performance of the
Variable Account?........................................................... ____ Yes ____ No
h. Does the Proposed Owner think that this policy will meet his or her
insurance needs and financial objectives?................................... ____ Yes ____ No
</TABLE>
<TABLE>
<S> <C>
i. a. Savings $_____________________________________ b. Current Value of Securities $______________________________
c. Equity in Home $______________________________ d. Assets $___________________________________________________
e. Debts $_______________________________________ f. No. & Ages of Dependents___________________________________
</TABLE>
________________________________________________________________________________
4. DEATH BENEFIT OPTION ___ Option A (Level Amount Option)
___ Option B (Variable Amount Option)
________________________________________________________________________________
5. VARIABLE UNIVERSAL LIFE INSURANCE RIDERS (Check if desired and/or enter
amounts)
<TABLE>
<C> <C>
___ Accelerated Benefit Rider* $________________________
___ Waiver of Monthly Deduction Rider $________________________
___ Total Disability Specified Premium Rider $________________________
___ Additional Insured Rider (on Primary Insured) $________________________
___ Additional Insured Rider (on Additional Insured) $________________________
___ Accidental Death Benefit Rider $________________________
___ Other ______________________________________________________________________ $________________________
___ Other ______________________________________________________________________ $________________________
</TABLE>
* RECEIPT OF ACCELERATED DEATH BENEFITS MAY AFFECT ELIGIBILITY FOR PUBLIC
ASSISTANCE PROGRAMS AND MAY BE TAXABLE. A LIEN WILL BE PLACED AGAINST THE
POLICY FOR THE AMOUNT ADVANCED, PLUS ANY ADMINISTRATIVE CHARGE, NOT TO
EXCEED $300, PLUS ANY ACCRUED INTEREST ON THE LIEN.
I represent that the above statements and answers are true and complete to the
best of my knowledge and belief. It is understood and agreed that this
Supplementary Application, together with Parts One, Two and Three, if
applicable, of my application for life insurance shall form the basis of the
policy applied for. If there is any conflict between the above statements and
answers and those give in Parts One, Two and Three, if applicable, of my
application, the answers herein will control.
<TABLE>
<C> <C>
________________________________________________________ ______________________________________________________________
Signature of Agent Signature of Proposed Insured
________________________________________________________ ______________________________________________________________
Broker Dealer Affiliation Signature of Owner (if other than Proposed Insured)
________________________________________________________ ______________________________________________________________
Signed at: ____________________________________________ ______________________________________________________________
City State Signature of Other Insured
Date: __________________________________________________ ______________________________________________________________
Signature of any Child covered by a Rider (if age 15 or older)
</TABLE>
Form 4096C (Rev 2-00)
Page 2
<PAGE> 1
Gregory A. Olson, Associate Counsel
Phone (612) 372-5792
Fax (612) 342-7531
EX-99.2
March 23, 2000
ReliaStar Life Insurance Company of New York
1000 Woodbury Road, Suite 102
Woodbury, NY 11797
Dear Sir or Madam:
In connection with the proposed registration under the Securities Act of 1933,
as amended, of a flexible premium variable life insurance policy (the "Policy")
and interests in ReliaStar Life Insurance Company of New York Variable Life
Separate Account I (the "Variable Account"), I have examined documents relating
to the establishment of the Variable Account by the Board of Directors of our
affiliated company, ReliaStar Life Insurance Company of New York (the
"Company"), as a separate account for assets applicable to variable contracts,
pursuant to New York Insurance Law Section 4240, as amended, and the
Registration Statement, on form S-6 File No. 333-19123 (the "Registration
Statement") and I have examined such other documents and have reviewed such
matters as I deemed necessary for this opinion, and I advise you that in my
opinion:
1. The Variable Account is a separate account of the company duly created
and validly existing pursuant to the laws of the State of New York.
2. The Policy, when issued in accordance with the Prospectus constituting
a part of the Registration Statement and upon compliance with
applicable local law, will be legal and binding obligations of the
Company in accordance with their respective terms.
3. The portion of the assets held in the Variable Account equal to
reserves and other contract liabilities with respect to the Variable
Accounts are not chargeable with liabilities arising out of any other
business the Company may conduct.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Legal Matters" in the
Prospectus constituting a part of the Registration Statement and to the
references to me wherever appearing therein.
Sincerely,
/s/ Gregory A. Olson
- ------------------------------
Gregory A. Olson
Associate Counsel
<PAGE> 1
EX-99.C1
INDEPENDENT AUDITORS' CONSENT
Board of Directors
ReliaStar Life Insurance Company of New York Variable Life Separate Account I
We consent to the use in the Post-Effective Amendment No. 5 to Registration
Statement No. 333-19123 on Form S-6 of ReliaStar Life Insurance Company of New
York Variable Life Separate Account I filed under the Securities Act of 1933 of
our report dated February 18, 2000 related to the financial statements of
ReliaStar Life Insurance Company of New York Variable Life Separate Account I as
of December 31, 1999 and for the years ended December 31, 1999 and December 31,
1998 and the period from August 8, 1997 (date of inception) to December 31,
1997, and our report dated February 1, 2000 related to the financial statements
of ReliaStar Life Insurance Company of New York Life as of and for the years
ended December 31, 1999 and 1998 appearing in the Prospectus, which is a part of
such Registration Statement, and to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Deloitte & Touche, LLP
Minneapolis, Minnesota
April 4, 2000
<PAGE> 1
EX-99.C6
March 23, 2000
ReliaStar Life Insurance Company of New York
1000 Woodbury Lane, Suite 102
Woodbury, NY 11797
Madam/Sir:
This opinion is furnished in connection with the registration by ReliaStar Life
Insurance Company of New York of a flexible premium variable life insurance
policy (the "Contract") under the Securities Act of 1933, as amended. The
Contract, including variations thereof used in various states, is described in
the Prospectus constituting a part of the Registration Statement on Form S-6,
as amended through and including Post-Effective Amendment No. 5 thereto, File
No. 333-19123.
The form of Contract was reviewed by me, and I am familiar with the Registration
Statement and Exhibits thereto.
In my opinion:
The illustrations of Accumulation Values, Surrender Charges, Cash Surrender
Values, and Death Benefits, shown in this Post-Effective Amendment No. 5 to
the Registration Statement on Form S-6 as Exhibit 1.A.(5)(b) based on the
assumptions stated in the illustrations, are consistent with the provisions
of the Contract. The rate structure of the Contract has not been designed
so as to make the relationship between premiums and benefits, as show in
the illustrations, appear more favorable to prospective purchasers of a
Contract for a male age 40 nonsmoker Rate Class than to prospective
purchasers to the Contract for other ages or rate classes, or for females.
In any state where charges cannot be based upon the insured's sex, the rate
structure of the Contract has not been designed so as to make the
relationship between premium and benefits, as shown in the illustrations,
appear more favorable to a prospective purchaser of the Contract for an
insured age 40 than to prospective purchasers of the Contract for other
ages or Rate Classes.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
Prospectus constituting a part of the Registration Statement.
Sincerely,
/s/ Steve West
- ------------------------------------
Steve West, FSA, MAAA
Assistant Vice President and Actuary
<PAGE> 1
EXHIBIT 24
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand this
17th day of February, 2000.
/s/ Stephen A. Carb
-------------------------------------
Stephen A. Carb
<PAGE> 2
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's hand
this 16th day of February, 2000.
/s/ R. Michael Conley
-------------------------------------
R. Michael Conley
<PAGE> 3
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 18th day of February, 2000.
/s/ Richard R. Crowl
-------------------------------------
Richard R. Crowl
<PAGE> 4
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 16th day of February, 2000.
/s/ James R. Gelder
-------------------------------------
James R. Gelder
<PAGE> 5
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 18th day of February, 2000.
/s/ Ulric Haynes, Jr.
-------------------------------------
Ambassador Ulric Haynes, Jr.
<PAGE> 6
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 15th day of February, 2000.
/s/ Wayne R. Huneke
-------------------------------------
Wayne R. Huneke
<PAGE> 7
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 16th day of February, 2000.
/s/ Mark Jordahl
-------------------------------------
Mark S. Jordahl
<PAGE> 8
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 14th day of February, 2000.
/s/ Kenneth U. Kuk
-------------------------------------
Kenneth U. Kuk
<PAGE> 9
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 15th day of February, 2000.
/s/ James R. Miller
-------------------------------------
James R. Miller
<PAGE> 10
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 17th day of February, 2000.
/s/ Fioravante G. Perrotta
-------------------------------------
Fioravante G. Perrotta
<PAGE> 11
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 15th day of February, 2000.
/s/ Robert C. Salipante
-------------------------------------
Robert C. Salipante
<PAGE> 12
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 15th day of February, 2000.
/s/ John G. Turner
-------------------------------------
John G. Turner
<PAGE> 13
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 18th day of February, 2000.
/s/ Charles B. Updike
-------------------------------------
Charles B. Updike
<PAGE> 14
RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
The undersigned director and/or officer of RELIASTAR LIFE INSURANCE COMPANY OF
NEW YORK, a New York corporation, does hereby make, constitute and appoint
RICHARD R. CROWL, MICHAEL S. FISCHER, STEWART D. GREGG, CHRISTY M. MASON, JAMES
E. NELSON, JAMES M. ODLAND, GREG A. OLSON, JEFFREY A. PROULX, AND LORI
SOMMERFELD, and each or any one of them, the undersigned's true and lawful
attorneys-in-fact, with full power of substitution, for the undersigned and in
the undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of said Company to a Registration Statement
or Registration Statements, under the Securities Act of 1933 (1933 Act) and the
Investment Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments, thereto,
to be filed by said Company with the Securities and Exchange Commission,
Washington DC, in connection with the registration under the 1933 and 1940 Acts,
as amended, of variable annuity and variable life contracts and accumulation
units in related Separate Accounts and to file those Separate Accounts with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 17th day of February, 2000.
/s/ Ross Weale
-------------------------------------
Ross M. Weale
