<PAGE>
As filed with the Securities and Exchange Commission on April 29, 1997
File No. 2-77283
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM N-4
REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933 /X/
-
Pre-Effective Amendment No. ___ / /
Post-Effective Amendment No. 22 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT of 1940 /X/
Amendment No. 19 /X/
--------------
Penn Mutual Variable Annuity Account III
(Exact Name of Registrant)
--------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
(Name of Depositor)
--------------
600 Dresher Road
Horsham, Pennsylvania 19044
(Address of Principal Executive Offices of Depositor)
Depositor's Telephone Number: 215-956-8000
--------------
Richard F. Plush
Vice President, Products and Programs
The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, Pennsylvania 19044
(Name and Address of Agent for Service)
Copy to:
Richard W. Grant
C. Ronald Rubley
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103-6993
--------------
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b) of Rule 485
[_] on (date) pursuant to paragraph (b) of Rule 485
[_] 60 days after filing pursuant to paragraph (a) of Rule 485
[_] on (date) pursuant to paragraph (a) of Rule 485
The registrant has registered an indefinite amount of securities pursuant to
Rule 24f-2 under the Investment Company Act of 1940, as amended. The Rule 24f-2
Notice for the fiscal year ending December 31, 1996 was filed on February 11,
1997.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Location in Statement of
Form N-4 Item Number Location in Prospectuses Additional Information
- -------------------- ------------------------ ----------------------
<S> <C> <C> <C>
Item 1. Cover Page Cover Page N/A
Item 2. Definitions Special Terms N/A
Item 3. Synopsis Cover Page; Expenses N/A
or Highlights
Item 4. Condensed Condensed Financial N/A
Financial Information
Information
Item 5. General The Penn Mutual Life N/A
Description Insurance Company;
of Registrant, The Separate Account
Depositor and
Portfolio
Companies
Item 6. Deductions The Contract - Deductions N/A
and Expenses and Expenses
Item 7. General The Contract N/A
Description
of Variable
Annuity
Contracts
Item 8. Annuity Period The Contract - Annuity N/A
Options
Item 9. Death Benefit The Contract - Payment N/A
On Death
Item 10. Purchases and The Contract - Purchases; N/A
Contract The Contract - Accumulation
Value Unit Value
Item 11. Redemptions The Contract - Withdrawals N/A
Item 12. Taxes Federal Income Tax N/A
Considerations
Item 13. Legal N/A N/A
Proceedings
</TABLE>
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Location in Statement of
Form N-4 Item Number Location in Prospectuses Additional Information
- -------------------- ------------------------ ----------------------
<S> <C> <C> <C>
Item 14. Table of Table of Contents of N/A
Contents of Statement of Additional
Statement of Information
Additional
Information
Item 15. Cover Page N/A Cover Page
Item 16. Table of N/A Cover Page
Contents
Item 17. General N/A N/A
Information
and History
Item 18. Services N/A Administrative and
Recordkeeping
Services; Custodian;
Auditors
Item 19. Purchase of The Contract - Purchases; Distribution of
Securities The Contract - Transfers; Contracts and
Being Offered The Contract - Deductions Certificates
and Expenses
Item 20. Underwriters N/A Distribution of
Contracts and
Certificates
Item 21. Calculation of N/A Performance Data
Performance
Data
Item 22. Annuity N/A Variable Annuity
Payments Payments
Item 23. Financial N/A Financial Statements
Statements
</TABLE>
<PAGE>
May 1, 1997
The Penn Mutual Life Insurance Company
Philadelphia, PA
DIVERSIFIER II
- --------------------------------------------------------------------------------
PROFILE OF PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
This profile is a summary of some of the more important points that you should
consider and know before purchasing the Contracts. The Contracts are more fully
described in the prospectus which accompanies this Profile. Please read the
prospectus carefully
- --------------------------------------------------------------------------------
1. THE ANNUITY CONTRACTS
- -----------------------------------
The Contracts offered in this prospectus are a combination variable and fixed
annuity contract ("Variable/Fixed Contract") and a variable annuity contract
("Variable Contract") between you, the owner, and The Penn Mutual Life Insurance
Company. The Contracts provide a means for you to invest in one or more of the
available investment funds listed in Section 4, or (for the "Variable/Fixed
Contract" only) one or more of the fixed interest accounts guaranteed and funded
by The Penn Mutual Life Insurance Company through its general account.
You determine (1) the amount and frequency of purchase payments, (2) the
investment funds, (3) transfers between the investment funds, (4) the type of
annuity to be paid after the accumulation period, (5) the beneficiary to whom
death benefits are to be paid, and (6) the amount and frequency of withdrawals.
Purchase payments and investment gains allocated to the variable accounts vary
up and down with the investment experience of the underlying investment funds.
The investment risk is high or low, depending on the variable account selected.
Refer to section 8 to see calendar year performance of the investment funds
which will show you the range of historical returns.
2. ANNUITY PAYMENTS
- -----------------------------------
You may choose (1) an annuity for a specified number of years, (2) a life
annuity, (3) a life annuity with payments guaranteed for 10 or 20 years, (4) a
joint and survivor life annuity or (5) another form of an annuity that we may
agree upon. You may select any one of those as a variable annuity, a fixed
annuity, or a combination of both.
3. PURCHASE
- -----------------------------------
The Contracts may be purchased by individuals, corporations and other business
associations. They may be purchased under retirement plans that qualify for
special tax treatment under the Internal Revenue Code (Qualified Plan), or as a
Non-Qualified Plan.
<TABLE>
<CAPTION>
Variable/Fixed Contract Variable Contract
Minimum Minimum Minimum Minimum
Initial Subsequent Initial Subsequent
Payment Payment Payment Payment
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Qualified Plan $250 $50 $250 $40
Non-Qualified Plan $2,500 $300 $1,500 $300
</TABLE>
4. INVESTMENT OPTIONS
- -----------------------------------
Independence Capital
Management, Inc.
Growth Equity Fund
Quality Bond Fund
Money Market Fund
OpCap Advisors
Value Equity Fund
Small Capitalization Fund
Morgan Stanley Asset Management
Emerging Markets Equity (Int'l) Portfolio
Fidelity Investments
VIP Equity Income Portfolio
VIP Growth Portfolio
VIP II Asset Manager Portfolio
VIP II Index 500 Portfolio
American Century Investment Management, Inc.
VP Capital Appreciation Portfolio
Vontobel USA, Inc.
International Equity Fund
Neuberger & Berman Management Incorporated
AMT Limited Maturity Bond Portfolio
AMT Balanced Portfolio
AMT Partners Portfolio
T. Rowe Price Associates, Inc.
Flexibly Managed Fund
High Yield Bond Fund
ICMI/Robertson Stephens
Emerging Growth Fund
<PAGE>
5. EXPENSES
- -----------------------------------
Each year Penn Mutual deducts a contract administration charge of the lesser
of $30 or 2% of the variable account value. We deduct a daily expense risk
charge equal to an annual rate of 0.5% of the daily net asset value of the
variable account and a daily mortality risk charge equal to an annual rate of
0.75% of the daily net asset value of the variable account. The investment funds
underlying the variable accounts also incur expenses, which range from 0.28% to
1.75% of the fund's average daily value.
A contingent deferred sales charge may be deducted if you make a full or
partial withdrawal. For the Variable/Fixed Contract, the deferred sales charge
will equal:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
No Purchase Payments After 1st Contract Year
- ----------------------------------------------------------------
Deferred Sales Charge
Withdrawal During as a Percentage of
Contract Year Amount Withdrawn
- ----------------------------------------------------------------
<S> <C>
1 7.0%
2 6.0%
3 5.0%
4 4.0%
5 3.0%
6 2.0%
7 1.0%
8 and later No Charge
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
Purchase Payments After 1st Contract Year
- ----------------------------------------------------------------
Deferred Sales Charge
Withdrawal During as a Percentage of
Contract Year Amount Withdrawn
- ----------------------------------------------------------------
<S> <C>
1 7.0%
2 6.0%
3 5.0%
4 4.0%
5 3.5%
6 3.0%
7 2.5%
8 2.0%
9 1.5%
10 1.0%
11 and later No Charge
</TABLE>
No deferred sales charge will be made on the portion of the first withdrawal
of each contract year that does not exceed 10% of the contract value
For the Variable Contract, the contingent deferred sales charge will be the
lesser of (a) 5% of the purchase payments made for the past seven years or (b)
5% of the amount withdrawn. Under no circumstances will the charge ever exceed
5% of the total purchase payments. No deferred sales charge will be made on the
portion of the first withdrawal that does not exceed 10% of the sum of purchase
payments made one or more years prior to the withdrawal. Further, no charge will
be made under the Variable Contract on that portion of the first withdrawal in
the eighth, ninth and tenth contract years that does not exceed the following
percentages of your contract value:
<TABLE>
<CAPTION>
Contract Year Percentage
<S> <C>
Eighth 25%
Ninth 50%
Tenth 75%
</TABLE>
The following table is designed to help you understand the charges in your
Contract. The column "Total Annual Charges" shows the annual percentage charge
for contract administration (which is represented as .05%), insurance charges
and investment charges. The next columns show you two examples of the charges,
in dollars, you would pay under your Contract. The examples assume that you
invested $1,000 in a Contract which earns 5% annually and that you withdraw your
money at the end of the applicable period. The premium tax is assumed to be 0%
in both examples.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Examples:
Total Annual
Expenses at the End of:
Total Total (Variable
Annual Annual Total /Fixed (Variable
Insurance Portfolio Annual Contract Contract
Fund Charges Charges Charges 1 Year 1 Year 10 Years
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Equity 1.30% 0.80% 2.10% $86 $68 $246
Value Equity 1.30 0.78 2.08 86 68 243
Flexibly Managed 1.30 0.77 2.07 86 68 242
Small Capitalization 1.30 0.99 2.29 88 70 265
Emerging Growth 1.30 1.15 2.45 90 71 281
International Equity 1.30 1.17 2.47 90 71 283
Quality Bond 1.30 0.77 2.07 86 68 243
High Yield Bond 1.30 0.84 2.14 87 68 250
Money Market 1.30 0.73 2.03 86 67 238
VP Capital Appreciation 1.30 1.00 2.30 86 70 266
AMT Limited Maturity Bond 1.30 0.78 2.08 89 68 243
AMT Balanced 1.30 1.09 2.39 85 71 275
AMT Partners 1.30 0.95 2.25 88 69 261
VIP Equity Income 1.30 0.56 1.86 84 66 222
VIP Growth 1.30 0.67 1.97 86 67 234
VIP II Asset Manager 1.30 0.73 2.03 86 67 239
VIP II Index 500 1.30 0.28 1.58 81 63 190
Emerging Markets Equity (Int'l) 1.30 1.75 3.05 95 77 339
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
6. TAXES
- -----------------------------------
Your gains under the Contracts are not taxed until you take them out. If you
take money out, earnings come out first and are taxed as income. If you are
younger than 59 1/2 when you take money out, you may be charged a 10% federal
tax penalty on the earnings. Payments during the income phase are considered
partly a return of your original investment. That part of each payment is not
taxable as income.
7. WITHDRAWALS
- -----------------------------------
You may withdraw all or part of your money at any time during the accumulation
phase. Once in each contract year on or after the last day of the first contract
year you may withdraw up to 10% of the Contract Value (determined as of the date
of withdrawal) free of the contingent deferred sales charge. A premature
withdrawal charge may be deducted from the money earned on the fixed interest
accounts if you take the money prior to maturity of your fixed interest account.
8. PERFORMANCE
- -----------------------------------
The value of the Contract will fluctuate depending upon the investment
performance of the fund(s) you choose. The following chart shows total returns
for each fund for the time periods shown. These numbers reflect the insurance
company charges and the investment charges of the fund, but do not reflect any
withdrawal charges, which would reduce the performance if they were applied.
Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Calendar Year
Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence Capital
Growth Equity 18.08% 24.68% -9.42% 10.85% 4.46% 33.02% -12.30% 29.60% 11.21% 3.90%
Quality Bond 2.67 18.46 -6.63 10.09 5.06 14.15 6.62 11.28 6.13 n/a
OpCap Advisors
Value Equity 23.40 35.55 1.48 5.57 13.24 26.08 -9.30 11.44 27.87 n/a
Small Capitalization 18.06 n/a n/a n/a n/a n/a n/a n/a n/a n/a
T. Rowe Price
Flexibly Managed 14.68 20.57 2.67 20.57 14.68 20.08 -2.16 19.50 17.29 21.93
High Yield Bond 12.27 14.78 -8.64 18.09 14.16 35.17 -10.03 -1.92 16.35 -2.19
ICMI/Robertson Stephens
Emerging Growth n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Vontobel
International Equity 15.20 12.21 -7.63 36.19 n/a n/a n/a n/a n/a n/a
American Century
VP Capital Appreciation -5.68 29.26 -2.57 8.77 -2.74 40.09 -2.53 27.19 -3.54 n/a
Neuberger & Berman
AMT Limited Maturity Bond 2.84 9.38 -1.56 5.12 -3.69 9.96 6.98 9.39 5.83 1.61
AMT Balanced 5.38 22.03 -4.72 4.55 6.53 21.14 0.67 n/a n/a n/a
AMT Partners 28.45 35.30 n/a n/a n/a n/a n/a n/a n/a n/a
Fidelity Investments
VIP Equity Income 12.64 32.36 4.96 16.63 15.24 29.80 -16.35 15.88 21.17 -2.37
VIP Growth 13.05 33.47 -1.43 17.69 7.78 43.69 -12.85 29.87 14.13 2.36
VIP II Asset Manager 12.99 15.32 -7.42 19.53 10.13 21.03 5.39 n/a n/a n/a
VIP II Index 500 21.65 36.01 0.17 8.79 n/a n/a n/a n/a n/a n/a
Morgan Stanley
Emerging Markets Equity (Int'l) n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
9. DEATH BENEFIT
- -----------------------------------
If you die prior to the Annuity Date we will pay the beneficiary the greatest
of (1) the sum of all purchase payments, adjusted for withdrawals and contract
transfers, (2) the Contract Value for the period that proof of death is received
or (3) the sum of the Fixed Account Value (if any) on the date of death and the
Variable Account Value as of the contract date or, if later, the most recent
seven-year contract anniversary occurring prior to the Contract Owner's 81st
birthday, adjusted for subsequent purchase payments and adjusted for withdrawals
and contract transfers.
If you die after the Annuity Date, the beneficiary may elect to have the
payments continue for the specified or guaranteed period or to receive in lump
sum the present value of the remaining payments.
10. OTHER INFORMATION
- -----------------------------------
Free Look. If you cancel your Contract within 10 days after receiving it
----------
(or whatever period is required in your state), we will send your money
back without assessing a withdrawal charge. You will receive whatever your
Contract is worth on the day we receive your request. This may be more or
less than your original payment.
No Probate. In most cases, when you die, the person you choose as your
-----------
beneficiary will receive the death benefit without going through probate.
Systematic Withdrawals. You can arrange to have up to 10% of your contract
-----------------------
value automatically sent to you on a modal basis while your Contract is
still in the accumulation phase. Of course, you'll have to pay taxes on
money you receive.
Disability. Under certain circumstances, you will have the ability to
-----------
withdraw your money free from the contingent deferred sales charge if you
become disabled.
Dollar Cost Averaging. You can arrange to have a regular amount of money
----------------------
automatically invested in the investment funds monthly or quarterly.
Automatic Asset Rebalancing. You can elect to have your investments
----------------------------
automatically rebalanced on a quarterly basis to maintain a specified
percentage allocation among your selected investment funds, which will not
include the fixed interset account.
11. INQUIRIES
- -----------------------------------
If you need more information, please contact us at:
The Penn Mutual Life Insurance Company
Customer Service Group
Philadelphia, PA 19172
1-800-523-0650
<PAGE>
PART A
------
Information Required in a Prospectus
------------------------------------
<PAGE>
PROSPECTUSES
Penn Mutual Variable Annuity Account III
May 1, 1997
DIVERSIFIER II
A Flexible Premium Variable And Fixed Annuity
Penn Series Funds, Inc.
May 1, 1997
Investment Advisers
T. Rowe Price Associates, Inc.
OpCap Advisors
Independence Capital Management, Inc.
Vontobel USA, Inc.
Robertson Stephens Investment Management, Inc.
American Century Variable Portfolios, Inc.
May 1, 1997
Investment Adviser:
American Century Investment Management, Inc.
Neuberger & Berman
Advisers Management Trust
May 1, 1997
Investment Adviser
Neuberger & Berman Management Incorporated
Fidelity Investments'
Variable Insurance Products Fund
Variable Insurance Products Fund II
April 30, 1997
Investment Adviser:
Fidelity Management & Research Company
Morgan Stanley Universal Funds, Inc.
May 1, 1997
Investment Adviser:
Morgan Stanley Asset Management
[LOGO OF PENN MUTUAL APPEARS HERE]
Investment Choices,
Retirement Opportunities
<PAGE>
No offering is made hereby in any jurisdiction in which
such offering may not lawfully be made.
No person is authorized to make any representations in
connection with this offering other than those
representations contained in the Prospectuses.
<PAGE>
PROSPECTUS -- MAY 1, 1997
INDIVIDUAL ANNUITY CONTRACTS WITH VARIABLE BENEFIT PROVISIONS--FLEXIBLE
PURCHASE PAYMENTS
- --------------------------------------------------------------------------------
DIVERSIFIER II
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
THE PENN MUTUAL LIFE INSURANCE COMPANY
PHILADELPHIA, PA 19172 . TELEPHONE (215) 956-8000
- --------------------------------------------------------------------------------
This prospectus describes two forms of annuity contracts -- a combination
variable and fixed annuity contract and a variable annuity contract. The
contracts provide for accumulation of values and for the payment of annuities.
Through Penn Mutual Variable Annuity Account III (referred to herein as the
"Separate Account"), purchase payments and annuity payment reserves may be
invested under the contracts in one or more of the following Funds:
<TABLE>
<S> <C>
PENN SERIES FUNDS, INC. MANAGERS
Growth Equity Fund Independence Capital Management, Inc. (a
subsidiary of Penn Mutual)
Value Equity Fund OpCap Advisors
Small Capitalization Fund OpCap Advisors
Emerging Growth Fund Independence Capital Management, Inc./
Robertson Stephens Investment Management Inc.
Flexibly Managed Fund T. Rowe Price Associates, Inc.
International Equity Fund Vontobel USA Inc. (a subsidiary of Vontobel Holding Ltd.)
Quality Bond Fund Independence Capital Management, Inc.
High Yield Bond Fund T. Rowe Price Associates, Inc.
Money Market Fund Independence Capital Management, Inc.
- --------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Capital Appreciation Portfolio American Century Investment Management, Inc.
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Limited Maturity Bond Portfolio Neuberger & Berman Management Incorporated
Balanced Portfolio Neuberger & Berman Management Incorporated
Partners Portfolio Neuberger & Berman Management Incorporated
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND
Growth Portfolio Fidelity Management and Research Company
Equity Income Portfolio Fidelity Management and Research Company
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio Fidelity Management and Research Company
Index 500 Portfolio Fidelity Management and Research Company
- --------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
Emerging Markets Equity Morgan Stanley Asset Management Inc.
(International) Portfolio
- --------------------------------------------------------------------------------
</TABLE>
Contract values and annuity payments based upon investment in one or more of
the investment funds vary in accordance with the investment experience of the
selected Funds.
Under the combination variable and fixed annuity contract, purchasers may al-
locate their contract value to fixed interest accounts funded through Penn
Mutual's general account, as well as to one or more of the Funds.
The variable annuity contract is offered only to owners of a companion fixed
annuity contract issued by Penn Mutual.
Under some circumstances, early withdrawals from the combination variable and
fixed annuity contract may be subject to a contingent deferred sales charge
ranging from 7% on withdrawals made in the first contract year to 1% on with-
drawals made in the tenth contract year and early withdrawals from the variable
annuity contract may be subject to a 5% contingent deferred sales charge. In
addition, early withdrawals from both contracts may be subject to a 10% addi-
tional income tax.
The combination variable and fixed annuity contract may be returned within
ten days of receipt for a full refund of the variable account value and a full
refund of purchase payments credited to the fixed interest accounts. The vari-
able annuity contract may be returned within ten days of receipt for a full re-
fund of the contract value. Longer free look periods and full refund of pur-
chase payments are required for contracts sold in some states.
This prospectus sets forth concisely the information a prospective investor
should know before investing. It should be retained for future reference.
A statement of additional information dated the same as this prospectus has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. It is available, at no charge, by writing The Penn Mutual
Life Insurance Company, Customer Service Group, Philadelphia, PA 19172. Or, you
can call, toll free, 1-800-523-0650. The table of contents of the statement of
additional information is at the end of this prospectus.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY OR PRECEDED BY A CURRENT
PROSPECTUS FOR EACH APPLICABLE FUND.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
SPECIAL TERMS............................................................... 3
- --------------------------------------------------------------------------------
EXPENSES.................................................................... 4
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION............................................. 8
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY...................................... 13
The Separate Account...................................................... 13
Penn Series Funds, Inc.................................................... 13
American Century Variable Portfolios, Inc................................. 14
Neuberger & Berman Advisers Management Trust.............................. 14
Fidelity Investments' Variable Insurance Products Fund.................... 14
Fidelity Investments' Variable Insurance Products Fund II................. 15
Morgan Stanley Universal Funds, Inc. ..................................... 15
- --------------------------------------------------------------------------------
THE CONTRACTS............................................................... 15
Purchases................................................................. 16
Accumulation Units........................................................ 16
Annuity Payments.......................................................... 16
Payment on Death.......................................................... 17
Transfers................................................................. 18
Withdrawals............................................................... 18
Deferment of Payments and Transfers....................................... 19
Deductions and Expenses................................................... 19
- --------------------------------------------------------------------------------
THE FIXED INTEREST OPTIONS.................................................. 21
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS........................................... 22
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION CONTENTS................................ 24
- --------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL TERMS
As used in this prospectus, the following terms have the indicated meaning:
ACCUMULATION UNIT: With respect to the Variable/Fixed Contract, a unit of
measure used to compute the Variable Account Value prior to the Annuity
Date; with respect to the Variable Contract, a unit of measure used to
compute the Contract Value prior to the Annuity Date.
ANNUITANT: The person during whose life annuity payments are made.
ANNUITY DATE: The date on which annuity payments start.
CONTRACT: The combination variable and fixed annuity contract or the
variable annuity contract described in this prospectus.
CONTRACT OWNER: The person specified in the Contract as the contract owner.
CONTRACT VALUE: With respect to the Variable/Fixed Contract, the sum of the
Variable Account Value and the Fixed Account Value; with respect to the
Variable Contract, the value of amounts held under the Contract in all
subaccounts of the Separate Account.
FIXED ACCOUNT VALUE: The value of amounts held under the Variable/Fixed
Contract in all fixed interest options.
SEPARATE ACCOUNT: Penn Mutual Variable Annuity Account III, a separate
account of The Penn Mutual Life Insurance Company that is registered as a
unit investment trust under The Investment Company Act of 1940.
VARIABLE ACCOUNT VALUE: The value of amounts held under the Variable/ Fixed
Contract in all subaccounts of the Separate Account.
VARIABLE CONTRACT: The variable annuity contract described in this
prospectus.
VARIABLE/FIXED CONTRACT: The combination variable and fixed annuity contract
described in this prospectus.
WE: A reference to "we" or "us" denotes The Penn Mutual Life Insurance
Company.
3
<PAGE>
- -------------------------------------------------------------------------------
EXPENSES
<TABLE>
- ------------------------------------------------------------------------------
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchase Payments............................... None
Maximum Contingent Deferred Sales Load
Variable/Fixed Contract.............................................. 7%*
Variable Contract.................................................... 5%**
Exchange Fee.......................................................... None
MAXIMUM ANNUAL CONTRACT ADMINISTRATION CHARGE......................... $30
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF VARIABLE ACCOUNT
VALUE)
Mortality and Expense Risk Charge..................................... 1.25%
Account Fees and Expenses............................................. None
-----
Total Separate Account Annual Expenses................................ 1.25%
</TABLE>
- -----------------------
* As a percentage of the amount withdrawn, provided the charge will never be
more than 8 1/2% of the total of all purchase payments credited to the Sep-
arate Account. After the first contract year, the charge will not be made
on the first withdrawal in a contract year to the extent the withdrawal
does not exceed 10% of the contract value. See "Deductions and Expenses" in
this prospectus for information on the decline in the percentage charge
over time and other limitations on the charge.
** As a percentage of the sum of all purchase payments made within seven years
of withdrawal or as a percentage of the amount withdrawn, whichever is
less. The charge will not be made on that portion of the first withdrawal
in a contract year that does not exceed 10% of purchase payments made one
year or more prior to the withdrawal. See "Deductions and Expenses" in this
prospectus for information on the decline in the percentage charge over
time and other limitations on the charge.
- -------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.**
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT ADMINISTRATIVE TOTAL
FEES (AFTER AND CORPORATE ACCOUNTING OTHER FUND
WAIVER) SERVICES FEES FEES EXPENSES EXPENSES
----------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Growth Equity........... 0.50% 0.15% 0.08% 0.07% 0.80%
Value Equity............ 0.50% 0.15% 0.07% 0.06% 0.78%
Small Capitalization.... 0.50% 0.15% 0.27% 0.07% 0.99%
Emerging Growth......... 0.80% 0.15% 0.07% 0.13% 1.15%
Flexibly Managed........ 0.50% 0.15% 0.06% 0.06% 0.77%
International Equity.... 0.75% 0.15% 0.09% 0.18% 1.17%
Quality Bond............ 0.45% 0.15% 0.08% 0.09% 0.77%
High Yield Bond......... 0.50% 0.15% 0.08% 0.11% 0.84%
Money Market............ 0.40% 0.15% 0.08% 0.10% 0.73%
</TABLE>
- -----------------------
** The expenses presented are for the last fiscal year, except expenses for
the Emerging Growth Fund, a new Fund, are estimated. In the absence of vol-
untary fee waivers by the investment adviser, the total expenses of the
Growth Equity and Quality Bond Funds would have been 0.81% and 0.78% re-
spectively. In the absence of voluntary fee waivers by the investment ad-
viser and administrator of the Fund, the total expenses of the Money Market
and the Small Capitalization Funds would have been 0.74% and 1.06%, respec-
tively.
4
<PAGE>
- -------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES 12B-1 FEES EXPENSES EXPENSES
---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Capital Appreciation.................. 1.00% None None 1.00%
</TABLE>
- -------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST***
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT,
ADVISORY AND
ADMINISTRATION OTHER TOTAL FUND
FEES EXPENSES EXPENSES
-------------- -------- ----------
<S> <C> <C> <C>
Limited Maturity Bond........................ 0.65% 0.13% 0.78%
Balanced..................................... 0.85% 0.24% 1.09%
Partners Fund................................ 0.84% 0.11% 0.95%
</TABLE>
- -----------------------
*** Neuberger & Berman Advisers Management Trust (the "Trust") is divided into
portfolios ("Portfolios"), each of which invests all of its net investable
assets in a corresponding series ("Series") of Advisers Managers Trust.
Expenses in the table reflect expenses of the Portfolios and include each
Portfolio's pro rata portion of the operating expenses of each Portfolio's
corresponding Series. The Portfolios pay Neuberger & Berman Management
Inc. ("NBMI") an administration fee based on the Portfolio's net asset
value. Each Portfolio's corresponding Series pays NBMI a management fee
based on the Series' average daily net assets. Accordingly, this table
combines management fees at the Series level and administration fees at
the Portfolio level in a unified fee rate. Total Annual Expenses for each
portfolio have been restated based upon current administration fees for
the Portfolio and management fees for its corresponding Series. See "Ex-
penses" in the Trust's Prospectus.
- -------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND++
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity-Income.................................... 0.51% 0.05% 0.56%
Growth........................................... 0.61% 0.06% 0.67%
</TABLE>
- -----------------------
++ The expenses presented are for the last fiscal year. A portion of the bro-
kerage commissions the fund paid was used to reduce its expenses. Without
this reduction, total expenses would have been 0.58% for the Equity Income
Portfolio and 0.69% for the Growth Portfolio.
- -------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
++Asset Manager.................................. 0.64% 0.09% 0.73%
+++Index 500..................................... 0.13% 0.15% 0.28%
</TABLE>
- -----------------------
++ The expenses presented are for the last fiscal year. A portion of the bro-
kerage commissions the fund paid was used to reduce its expenses. Without
this reduction, total expenses would have been 0.74% for the Asset Manager
Portfolio.
+++ The expenses presented are for the last fiscal year. In the absence of
voluntary fee waivers by the investment adviser, total expenses would have
been 0.43% for the Index 500 Portfolio.
- -------------------------------------------------------------------------------
MORGAN STANLEY UNIVERSAL FUNDS, INC.
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Emerging Markets Equity (International) Portfo-
lio............................................ 1.25% 0.50% 1.75%
</TABLE>
- -------------------------------------------------------------------------------
The purpose of this foregoing table is to assist Contract Owners in
understanding the various costs and expenses that a Contract Owner will bear
directly and indirectly. The table shows Contract expenses and underlying Fund
expenses. See the accompanying prospectuses of Penn Series Funds, Inc.,
American Century Variable Portfolios, Inc., Neuberger & Berman Advisers
Management Trust, Fidelity Investments' Variable Insurance Products Fund,
Fidelity Investments' Variable Insurance Products Fund II and Morgan Stanley
Universal Funds, Inc. for information on expenses.
Premium taxes may be applicable. See Deductions and Expenses in this
prospectus.
5
<PAGE>
- --------------------------------------------------------------------------------
EXAMPLE
If you own a Variable/Fixed Contract, make purchase payments only during the
first year and surrender your contract at the end of the applicable period, you
would pay the following expenses on each $1,000 invested, assuming 5% annual
return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund........................... $86 $113 $142 $238
Penn Series Quality Bond Fund........................... $86 $115 $144 $243
Penn Series High Yield Bond Fund........................ $87 $117 $147 $250
Penn Series Growth Equity Fund.......................... $86 $115 $145 $246
Penn Series Value Equity Fund........................... $86 $115 $144 $243
Penn Series Flexibly Managed Fund....................... $86 $115 $144 $242
Penn Series International Equity Fund................... $90 $126 $163 $283
Penn Series Small Capitalization Fund................... $88 $121 $155 $265
Penn Series Emerging Growth Fund........................ $90 $126 $162 $281
Capital Appreciation Portfolio.......................... $86 $115 $144 $243
Neuberger & Berman Limited Maturity Bond Portfolio...... $89 $124 $159 $275
Neuberger & Berman Balanced Portfolio................... $85 $112 $140 $234
Neuberger & Berman Partners Portfolio................... $88 $120 $153 $261
Fidelity's Growth Portfolio............................. $85 $112 $140 $234
Fidelity's Equity Income Portfolio...................... $84 $109 $134 $222
Fidelity's Asset Manager Portfolio...................... $86 $114 $142 $239
Fidelity's Index 500.................................... $81 $100 $119 $190
Morgan Stanley Emerging Markets Equity (International)
Portfolio.............................................. $95 $143 $191 $339
- -------------------------------------------------------------------------------
</TABLE>
EXAMPLE
If you own a Variable/Fixed Contract, make purchase payments in any contract
year after the first and surrender your contract at the end of the applicable
period, you would pay the following expenses on each $1,000 invested on the
date the Contract was purchased, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund........................... $86 $113 $147 $250
Penn Series Quality Bond Fund........................... $86 $115 $149 $255
Penn Series High Yield Bond Fund........................ $87 $117 $152 $262
Penn Series Growth Equity Fund.......................... $86 $115 $150 $258
Penn Series Value Equity Fund........................... $86 $115 $149 $255
Penn Series Flexibly Managed Fund....................... $86 $115 $149 $254
Penn Series International Equity Fund................... $90 $126 $168 $295
Penn Series Small Capitalization Fund................... $88 $121 $160 $277
Penn Series Emerging Growth Fund........................ $90 $126 $167 $293
Capital Appreciation Portfolio.......................... $86 $115 $149 $255
Neuberger & Berman Limited Maturity Bond Portfolio...... $89 $124 $165 $287
Neuberger & Berman Balanced Portfolio................... $85 $112 $145 $246
Neuberger & Berman Partners Portfolio................... $88 $120 $158 $273
Fidelity's Growth Portfolio............................. $86 $114 $147 $251
Fidelity's Equity Income Portfolio...................... $84 $109 $139 $235
Fidelity's Asset Manager Portfolio...................... $86 $114 $147 $251
Fidelity's Index 500.................................... $81 $100 $124 $202
Morgan Stanley Emerging Markets Equity (International)
Portfolio.............................................. $95 $143 $196 $350
</TABLE>
6
<PAGE>
- --------------------------------------------------------------------------------
EXAMPLE
If you own a Variable Contract and surrender your contract at the end of the
applicable period, you would pay the following expenses on each $1,000 invest-
ed, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund........................... $67 $114 $160 $238
Penn Series Quality Bond Fund........................... $68 $115 $163 $243
Penn Series High Yield Bond Fund........................ $68 $117 $166 $250
Penn Series Growth Equity Fund.......................... $68 $116 $164 $246
Penn Series Value Equity Fund........................... $68 $115 $163 $243
Penn Series Flexibly Managed Fund....................... $68 $115 $162 $242
Penn Series International Equity Fund................... $71 $127 $183 $283
Penn Series Small Capitalization Fund................... $70 $121 $174 $265
Penn Series Emerging Growth Fund........................ $71 $126 $182 $281
Capital Appreciation Portfolio.......................... $70 $122 $174 $266
Neuberger & Berman Limited Maturity Bond Portfolio...... $68 $115 $163 $243
Neuberger & Berman Balanced Portfolio................... $71 $124 $179 $275
Neuberger & Berman Partners Portfolio................... $69 $120 $172 $261
Fidelity's Growth Portfolio............................. $67 $113 $158 $234
Fidelity's Equity Income Portfolio...................... $66 $110 $153 $222
Fidelity's Asset Manager Portfolio...................... $67 $114 $161 $239
Fidelity's Index 500.................................... $63 $100 $137 $190
Morgan Stanley Emerging Markets Equity (International)
Portfolio.............................................. $77 $143 $211 $339
</TABLE>
- --------------------------------------------------------------------------------
EXAMPLE
If you own either a Variable/Fixed Contract or a Variable Contract and do not
surrender your contract, or you elect an annuity option at the end of the ap-
plicable time period, you would pay the following expenses on each $1,000 in-
vested, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund........................... $21 $64 $110 $238
Penn Series Quality Bond Fund........................... $21 $66 $113 $243
Penn Series High Yield Bond Fund........................ $22 $68 $116 $250
Penn Series Growth Equity Fund.......................... $22 $66 $114 $246
Penn Series Value Equity Fund........................... $21 $66 $113 $243
Penn Series Flexibly Managed Fund....................... $21 $66 $112 $242
Penn Series International Equity Fund................... $25 $78 $133 $283
Penn Series Small Capitalization Fund................... $23 $72 $124 $265
Penn Series Emerging Growth Fund........................ $25 $77 $132 $281
Capital Appreciation Portfolio.......................... $21 $66 $113 $243
Neuberger & Berman Limited Maturity Bond Portfolio...... $24 $75 $129 $275
Neuberger & Berman Balanced Portfolio................... $20 $63 $108 $234
Neuberger & Berman Partners Portfolio................... $23 $71 $122 $261
Fidelity's Growth Portfolio............................. $21 $65 $111 $239
Fidelity's Equity Income Portfolio...................... $19 $60 $103 $222
Fidelity's Asset Manager Portfolio...................... $21 $65 $111 $239
Fidelity's Index 500.................................... $16 $50 $ 87 $190
Morgan Stanley Emerging Markets Equity (International)
Portfolio.............................................. $31 $95 $161 $339
</TABLE>
The examples are based upon data for the fiscal year ended December 31, 1996
and assume an average Variable Account Value or Contract Value of approximately
$8,200. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES UNDER YOUR CONTRACT; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN
THOSE SHOWN.
7
<PAGE>
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
The following tables show Accumulation Unit values and the number of
Accumulation Units outstanding for each of the subaccounts of the Separate
Account for the specified periods. The financial data included in the tables
should be read in conjunction with the financial statements and the related
notes included in the Statement of Additional Information.
- --------------------------------------------------------------------------------
PENN SERIES GROWTH EQUITY FUND SUBACCOUNT (A)
Values of an Accumulation Unit Outstanding Throughout Each Period for Qualified
and Nonqualified Retirement Plans
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
NON- NON- NON- NON- NON-
QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit
Value, beginning
of period........ $ 32.596 $ 32.327 $ 26.102 $ 25.887 $ 28.766 $ 28.528 $ 25.906 $ 25.692 $ 24.756 $ 24.552
Accumulation Unit
Value, end of pe-
riod............. $ 38.550 $ 38.235 $ 32.596 $ 32.327 $ 26.102 $ 25.887 $ 28.766 $ 28.528 $ 25.906 $ 25.692
Number of Accumu-
lation Units out-
standing, end of
period........... 1,830,081 620,903 1,991,646 674,290 2,119,836 717,328 2,042,023 685,110 2,004,015 669,679
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------------
NON- NON- NON- NON- NON-
QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit
Value, beginning
of period........ $ 18.605 $ 18.451 $ 21.204 $ 21.029 $ 16.356 $ 16.221 $ 14.702 $ 14.581 $ 14.145 $ 14.029
Accumulation Unit
Value, end of
period........... $ 24.756 $ 24.552 $ 18.605 $ 18.451 $ 21.204 $ 21.029 $ 16.356 $ 16.221 $ 14.702 $ 14.581
Number of
Accumulation
Units
outstanding, end
of period........ 1,680,322 518,717 1,470,210 439,287 1,284,583 333,486 1,309,408 360,185 1,366,286 306,559
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Growth Stock Fund Subaccount prior to November 1, 1992.
8
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES VALUE EQUITY FUND SUBACCOUNT (A)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(B)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation
Unit Value
beginning of
period......... $ 24.928 $ 18.361 $ 18.062 $ 17.080 $ 15.058 $ 11.939 $ 13.157 $ 11.802 $ 9.226 $ 10.000
Accumulation
Unit Value, end
of period...... $ 30.819 $ 24.928 $ 18.361 $ 18.062 $ 17.080 $ 15.058 $ 11.939 $ 13.157 $ 11.802 $ 9.226
Number of
Accumulation
Units
outstanding,
end of period.. 4,907,784 4,235,839 3,886,404 3,693,652 2,865,294 2,207,661 1,883,581 1,802,897 918,020 349,261
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Equity Income Fund Subaccount prior to November 1, 1992.
(b) For the period March 17, 1987 (date subaccount was established) through De-
cember 31, 1987.
- --------------------------------------------------------------------------------
PENN SERIES FLEXIBLY MANAGED FUND SUBACCOUNT (A)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Val-
ue, beginning of pe-
riod................. $ 42.865 $ 35.496 $ 34.514 $ 30.179 $ 27.893 $ 23.215 $ 23.712 $ 19.832 $16.898 $13.851
Accumulation Unit
Value, end of period. $ 49.262 $ 42.865 $ 35.496 $ 34.514 $ 30.179 $ 27.893 $ 23.215 $ 23.712 $19.832 $16.898
Number of Accumulation
Units outstanding,
end of period........ 5,711,843 4,946,240 4,198,305 3,143,601 2,327,829 1,664,751 1,237,347 1,129,858 853,647 623,017
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Capital Appreciation Fund Subaccount prior to November 1, 1992.
- --------------------------------------------------------------------------------
PENN SERIES INTERNATIONAL EQUITY FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------
1996 1995 1994 1993 1992(A)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period....... $ 14.434 $ 12.843 $ 13.880 $ 10.175 $10.00
Accumulation Unit Value,
end of period............. $ 16.659 $ 14.434 $ 12.843 $ 13.880 $10.175
Number of Accumulation
Units outstanding, end of
period.................... 4,012,762 3,388,479 3,556,098 1,847,892 92,386
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period November 2, 1992 (date subaccount was established) through
December 31, 1992.
9
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES QUALITY BOND FUND SUBACCOUNT (A)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(B)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Val-
ue, beginning of pe-
riod................. $ 18.465 $ 15.562 $ 16.639 $ 15.088 $ 14.336 $ 12.558 $ 11.776 $ 10.580 $ 9.968 $10.000
Accumulation Unit
Value, end of period. $ 18.990 $ 18.465 $ 15.562 $ 16.639 $ 15.088 $ 14.336 $ 12.558 $ 11.776 $ 10.580 $ 9.968
Number of Accumulation
Units outstanding,
end of period........ 1,664,378 1,869,975 1,890,869 1,953,188 1,337,087 1,229,163 1,075,187 769,467 274,657 130,130
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Fixed Income Fund Subaccount prior to November 1, 1992.
(b) For the period March 17, 1987 (date subaccount was established) through De-
cember 31, 1987.
- --------------------------------------------------------------------------------
PENN SERIES HIGH YIELD BOND FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value
beginning of period.... $ 26.033 $ 22.644 $ 24.742 $ 20.918 $ 18.291 $ 13.534 $ 15.035 $ 15.325 $ 13.193 $ 13.461
Accumulation Unit Value
end of period.......... $ 29.276 $ 26.033 $ 22.644 $ 24.742 $ 20.918 $ 18.291 $ 13.534 $ 15.035 $ 15.325 $ 13.193
Number of Accumulation
Units outstanding, end
of period.............. 1,185,318 1,194,944 1,264,890 1,257,271 705,414 594,530 613,408 817,147 708,838 469,236
</TABLE>
- --------------------------------------------------------------------------------
PENN SERIES SMALL CAPITALIZATION FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------
1996 1995(A)
- -------------------------------------------------------------------------------
<S> <C> <C>
Accumulation Unit Value, beginning of period........... $ 11.171 $ 10.000
Accumulation Unit Value, end of period................. $ 13.211 $ 11.171
Number of Accumulation Units outstanding, end of peri-
od.................................................... 587,385 137,653
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period May 1, 1995 (date subaccount was established) through Decem-
ber 31, 1995.
- --------------------------------------------------------------------------------
PENN SERIES MONEY MARKET FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $ 18.148 $ 17.416 $17.003 $ 16.791 $ 16.491 $ 15.732 $ 14.893 $ 13.844 $ 13.089 $12.482
Accumulation Unit Value,
end of period.......... $ 18.817 $ 18.148 $17.416 $ 17.003 $ 16.791 $ 16.491 $ 15.732 $ 14.893 $ 13.844 $13.089
Number of Accumulation
Units outstanding, end
of period.............. 1,192,388 1,062,385 825,274 658,620 698,584 769,958 965,117 753,052 319,671 242,494
</TABLE>
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN CENTURY CAPITAL APPRECIATION PORTFOLIO SUBACCOUNT (a)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------
1996 1995 1994 1993(b)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulation Unit Value, beginning of
period................................. $ 14.057 $ 10.857 $ 11.124 $ 10.000
Accumulation Unit Value, end of period.. $ 13.282 $ 14.057 $ 10.857 $ 11.124
Number of Accumulation Units outstand-
ing, end of period..................... 2,183,381 2,157,888 1,791,799 716,404
</TABLE>
- --------------------------------------------------------------------------------
(a) TCI Growth Portfolio Subaccount prior to May 1, 1997
(b) For the period May 1, 1993 (date subaccount was established) through Decem-
ber 31, 1993
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN LIMITED MATURITY BOND PORTFOLIO SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------
1996 1995 1994 1993(a)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulation Unit Value, beginning of peri-
od......................................... $ 10.999 $ 10.039 $10.181 $ 10.000
Accumulation Unit Value, end of period...... $ 11,330 $ 10.999 $10.039 $ 10.181
Number of Accumulation Units outstanding,
end of period.............................. 459,223 444,986 448,825 311,665
</TABLE>
- --------------------------------------------------------------------------------
(a) For the period May 1, 1993 (date subaccount was established) through Decem-
ber 31, 1993
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN BALANCED PORTFOLIO SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------
1996 1995 1994 1993(a)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Accumulation Unit Value, beginning of
period................................. $ 12.488 $ 10.218 $ 10.706 $ 10.000
Accumulation Unit Value, end of period.. $ 13.182 $ 12.488 $ 10.218 $ 10.706
Number of Accumulation Units outstand-
ing, end of period..................... 1,535,496 1,468,254 1,223,496 621,326
- -------------------------------------------------------------------------------
</TABLE>
(a) For the period May 1, 1993 (date subaccount was established) through
December 31, 1993
- --------------------------------------------------------------------------------
FIDELITY INVESTMENT'S EQUITY INCOME FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------
1996 1995(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Accumulation Unit Value, beginning of period.......... $ 11.920 $ 10.000
Accumulation Unit Value, end of period................ $ 13.453 $ 11.920
Number of Accumulation Units outstanding, end of peri-
od................................................... 2,498,343 581,691
- --------------------------------------------------------------------------------
(a) For the period May 1, 1995 (date subaccount was established) through Decem-
ber 31, 1995.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' GROWTH FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<CAPTION>
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------
1996 1995(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Accumulation Unit Value, beginning of period.......... $ 12.359 $ 10.000
Accumulation Unit Value, end of period................ $ 14.000 $ 12.359
Number of Accumulation Units outstanding, end of peri-
od................................................... 2,620,543 690,602
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period May 1, 1995 (date subaccount was established) through Decem-
ber 31, 1995.
11
<PAGE>
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' ASSET MANAGER FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
- --------------------------------------------------------------------------------
1996 1995(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Accumulation Unit Value, beginning of period.................. $ 11.153 $ 10.000
Accumulation Unit Value, end of period........................ $ 12.623 $ 11.153
Number of Accumulation Units outstanding, end of period....... 383,267 117,290
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period May 1, 1995 (date subaccount was established) through Decem-
ber 31, 1995.
The financial statements of the Separate Account for the year ended December
31, 1996 are included in the statement of additional information referred to on
the cover page of this prospectus.
- --------------------------------------------------------------------------------
In advertisements of the Contracts, Penn Mutual may provide information on
total return performance and on annual changes in accumulation unit values. We
may also provide information on "yields" and "effective yields" on investments
in the Money Market Fund subaccount.
Information on total return performance will include average annual rates of
total return for one, five and ten year periods, or lesser periods depending on
how long the subaccount has been in existence. Average annual total return
figures will show the average annual rates of increase or decrease in
investments in the subaccounts, assuming a $1,000 investment at the beginning
of the period, withdrawal of the investment at the end of the period, and the
deduction of all applicable charges. We may also show average annual rates of
total return, assuming other amounts invested at the beginning of the period
and no withdrawal at the end of the period. Average annual total return figures
which assume no withdrawal at the end of the period will reflect all recurring
charges, but will not reflect the contingent deferred sales charge (if
applicable, the contingent deferred sales charge would reduce the amount that
may be withdrawn under the Contracts).
The "yield" on an investment in the Money Market Fund subaccount refers to
the income generated by the investment over a 7-day period. This income is then
annualized. That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
subaccount is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.
12
<PAGE>
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THE PENN MUTUAL LIFE INSURANCE COMPANY
The Penn Mutual Life Insurance Company ("Penn Mutual") is a Pennsylvania
mutual life insurance company. We were chartered in 1847 and have been
continuously engaged in the life insurance business since that date. Our home
office is located at The Penn Mutual Life Insurance Company, Philadelphia, PA
19172.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT
Penn Mutual Variable Annuity Account III was established as a separate account
of Penn Mutual on April 13, 1982. The Separate Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940 and qualifies as a "separate account" within the
meaning of the federal securities laws.
The Separate Account is divided into subaccounts for investment in investment
portfolios of Penn Series Funds, Inc., American Century Variable Portfolios,
Inc., Neuberger & Berman Advisers Management Trust, Fidelity Investments'
Variable Insurance Products Fund, Variable Insurance Products Fund II and
Morgan Stanley Universal Funds, Inc. In addition, there are two subaccounts for
investment in shares of the Growth Equity Fund of Penn Series Funds, Inc.--one
for Contracts which were issued in connection with tax qualified retirement
plans and one for Contracts which were not issued in connection with such
plans. Income, gains and losses, realized or unrealized, of a subaccount are
credited to or charged against the subaccount without regard to any other
income, gains or losses of Penn Mutual. Assets equal to the reserves and other
contract liabilities with respect to each subaccount are not chargeable with
liabilities arising out of any other business of Penn Mutual. Penn Mutual is
obligated to pay all benefits and make all payments provided under the
Contracts.
Assets held in the Separate Account under the Contracts described in this
prospectus are invested, at the direction of the Contract Owner, in one or more
Funds of Penn Series Funds, Inc., Neuberger & Berman Advisers Management Trust,
American Century Variable Portfolios, Inc., Fidelity Investments' Variable
Insurance Products Fund, Variable Insurance Products Fund II and Morgan Stanley
Universal Funds, Inc.
Under the Investment Company Act of 1940, as currently interpreted, Contract
Owners and persons receiving annuity payments have the right to instruct Penn
Mutual as to the voting of the various Fund shares held in the Separate Account
pursuant to the Contracts. The number of shares of a Fund for which voting
instructions may be given by a Contract Owner is determined by dividing the
Contract Owner's interest in the applicable subaccount of the Separate Account
by the net asset value per share of the Fund. The number of shares of a Fund
for which voting instructions may be given by a person receiving annuity
payments is determined by dividing the reserve allocated to the applicable
subaccount by the net asset value per share of the Fund. Should the applicable
law, or interpretations thereof, change so as to permit us to vote shares of
the mutual funds in our own right, we may elect to do so. Further, we reserve
the right to modify the manner in which we calculate the weight to be given to
pass through voting instructions where such a change is necessary to comply
with federal law or interpretations thereof.
Shares of Penn Series are sold not only to the Separate Account, but also to
other separate accounts of Penn Mutual and its subsidiary, The Penn Insurance
and Annuity Company, that fund benefits under variable annuity and variable
life insurance contracts. Shares of American Century Variable Portfolios, Inc.,
Neuberger & Berman Advisers Management Trust, Fidelity Investments' Variable
Insurance Products Fund, Variable Insurance Products Fund II and Morgan Stanley
Universal Funds, Inc. are offered not only to variable annuity and variable
life separate accounts of Penn Mutual, but also to such accounts of other
insurance companies unaffiliated with Penn Mutual and, in the case of Neuberger
& Berman Advisers Management Trust, directly to qualified pension and
retirement plans. For a discussion of possible conflicts involved in the
Separate Account investing in Funds that are so offered, see the accompanying
Fund prospectuses.
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PENN SERIES FUNDS, INC.:
GROWTH EQUITY FUND - seeks long term growth of capital and increase of future
income by investing primarily in common stocks of well established growth
companies;
VALUE EQUITY FUND - seeks to maximize total return (capital appreciation and
income) primarily by investing in equity securities of companies believed to be
undervalued considering such factors as assets, earnings, growth potential and
cash flows;
SMALL CAPITALIZATION FUND - seeks capital appreciation through investment in
a diversified portfolio of securities consisting primarily of equity securities
of companies with market capitalizations under $1 billion.
13
<PAGE>
EMERGING GROWTH FUND - seeks capital appreciation by investing primarily in
common stocks of emerging growth companies with above-average growth prospects;
FLEXIBLY MANAGED FUND - seeks to maximize total return (capital appreciation
and income) by investing in common stocks, other equity securities, corporate
debt securities, and/or short term reserves, in proportions considered
appropriate in light of the availability of attractively valued individual
securities and current and expected economic and market conditions;
INTERNATIONAL EQUITY FUND - seeks to maximize capital appreciation by
investing in a carefully selected diversified portfolio consisting primarily of
equity securities. The investments will consist principally of equity
securities of European and Pacific Basin countries;
QUALITY BOND FUND - seeks the highest income over the long term consistent
with the preservation of principal through investment primarily in marketable
investment grade debt securities;
HIGH YIELD BOND FUND - seeks high current income by investing primarily in a
diversified portfolio of long term high-yield/high-risk fixed income securities
in the medium to lower quality ranges; capital appreciation is a secondary
objective; such securities, which are commonly referred to as "junk" bonds,
generally involve greater risks of loss of income and principal than higher
rated securities (see accompanying Penn Series prospectus);
MONEY MARKET FUND - seeks to preserve capital, maintain liquidity and achieve
the highest possible level of current income consistent therewith, by investing
in high quality money market instruments; an investment in the Fund is neither
insured nor guaranteed by the U.S. Government and there can be no assurance
that the Fund will be able to maintain a stable net asset value of $1.00 per
share;
Independence Capital Management, Inc., Horsham, Pennsylvania, is investment
adviser to the Growth Equity, Quality Bond and Money Market Funds. OpCap
Advisors (formerly Quest for Value Advisors), New York, New York, is investment
adviser to the Value Equity and Small Capitalization Funds. T. Rowe Price
Associates, Baltimore, Maryland, is investment adviser to the Flexibly Managed
and High Yield Bond Funds. Vontobel USA Inc., New York, New York, is investment
adviser to the International Equity Fund. Independence Capital Management, Inc.
is also investment adviser, and Robertson Stephens Investment Management, Inc.,
San Francisco, California is investment sub-adviser to the Emerging Growth
Fund.
- --------------------------------------------------------------------------------
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.:
CAPITAL APPRECIATION PORTFOLIO - seeks capital growth by investing primarily
in common stocks believed to have better-than-average prospects for
appreciation.
American Century Investment Management, Inc., Kansas City, Missouri, is
investment adviser to the Capital Appreciation Portfolio.
- --------------------------------------------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
LIMITED MATURITY BOND PORTFOLIO - seeks highest current income consistent
with low risk to principal and liquidity, primarily by investing in a
diversified portfolio of limited maturity debt securities. A secondary
objective is capital appreciation. The portfolio invests all of its assets in a
series of Advisers Managers Trust (a diversified open-end management investment
company) with identical investment objectives, policies and limitations.
BALANCED PORTFOLIO - seeks long-term capital growth and reasonable current
income without undue risk to principal through investment in common stock and
debt securities. The portfolio invests all of its assets in a series of
Advisers Managers Trust (a diversified open-end management investment company)
with identical investment objectives, policies and limitations.
PARTNERS PORTFOLIO - seeks capital growth by investing primarily in common
stocks of established companies, using the value oriented investment approach.
Neuberger & Berman reserves the right to make changes in the investment
objective, but will notify shareholder thirty days in advance of any proposed
material change.
Neuberger & Berman Management Incorporated, New York, New York, is investment
adviser to each series of Advisers Managers Trust underlying the Limited
Maturity Bond Portfolio and the Balanced Portfolio.
- --------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND:
EQUITY-INCOME PORTFOLIO - seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the fund will
also consider the potential for capital appreciation. The fund's goal is to
achieve a yield which exceeds the composite yield on the securities comprising
the Standard & Poor's 500 Composite Stock Price Index.
14
<PAGE>
GROWTH PORTFOLIO - seeks to achieve capital appreciation. The fund normally
purchases common stocks, although its investments are not restricted to any
one type of security. Capital appreciation may also be found in other types of
securities, including bonds and preferred stocks.
Fidelity Management & Research Company, Boston, Massachusetts, is investment
adviser to the Equity-Income Portfolio and the Growth Portfolio.
- -------------------------------------------------------------------------------
FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II:
ASSET MANAGER PORTFOLIO - seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks, bonds
and short-term fixed income investments.
INDEX 500 PORTFOLIO - seeks to match the total return of the S&P 500 while
keeping expenses low. The S&P 500 is an index of 500 common stocks, most of
which trade on the New York Stock Exchange.
Fidelity Management & Research Company, Boston, Massachusetts, is investment
adviser to the Asset Manager Portfolio.
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MORGAN STANLEY UNIVERSAL FUNDS, INC.:
MORGAN STANLEY EMERGING MARKETS EQUITY (INTERNATIONAL) PORTFOLIO - seeks
long term capital appreciation by investing primarily in equity securities of
emerging market country issuers. The Portfolio will focus on economies which
are developing strongly and in which the markets are becoming more
sophisticated.
Morgan Stanley Asset Management Inc. is investment adviser to the Emerging
Markets Equity (International) Portfolio.
- -------------------------------------------------------------------------------
FOR MORE INFORMATION ON THE FUNDS AND PORTFOLIOS IN WHICH THE SUBACCOUNTS
INVEST, SEE THE ACCOMPANYING PROSPECTUSES FOR PENN SERIES FUNDS, INC.,
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST, AND FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND,
VARIABLE INSURANCE PRODUCTS FUND II AND MORGAN STANLEY UNIVERSAL FUNDS, INC.
INVESTORS SHOULD READ THE PROSPECTUSES FOR THE FUNDS IN WHICH THEY ARE
INTERESTED BEFORE INVESTING.
- -------------------------------------------------------------------------------
THE CONTRACTS
The Contracts offered in this prospectus are a combination variable and fixed
annuity contract ("Variable/Fixed Contract") and a variable annuity contract
("Variable Contract").
The Variable/Fixed Contract provides for investment, through the Separate
Account, in one or more of the available Funds of Penn Series Funds, Inc.,
American Century Variable Portfolios, Inc., Neuberger & Berman Advisers
Management Trust, and Fidelity Investments' Variable Insurance Products Fund,
Variable Insurance Products Fund II and Morgan Stanley Universal Funds, Inc.
It also provides for investment in one or more fixed interest accounts. The
fixed interest accounts are guaranteed and funded by Penn Mutual through its
general account. See FIXED INTEREST OPTIONS in this prospectus. Currently,
over the life of the Variable/Fixed Contract, you may invest in one or more of
18 Funds and fixed interest accounts.
The Variable Contract provides exclusively for investment, through the
Separate Account, in one or more of the available Funds of Penn Series Funds,
Inc., American Century Variable Portfolios, Inc., Neuberger & Berman Advisers
Management Trust, and Fidelity Investments' Variable Insurance Products Fund,
Variable Insurance Products Fund II and Morgan Stanley Universal Funds, Inc.
Owners of Variable Contracts who wish to invest in a fixed annuity contract
may transfer amounts or allocate purchase payment to a companion fixed annuity
contract offered by Penn Mutual. The Variable Contract is currently offered
only to owners of a companion fixed annuity contract issued by Penn Mutual.
Unless otherwise indicated, the term "Contracts," as used in this prospectus,
refers to both the Variable/Fixed Contract and the Variable Contract.
The Contract Owner determines (1) the amount and frequency of the purchase
payments to be made to Penn Mutual, (2) the accounts to which the purchase
payments are to be allocated, (3) transfers among investment accounts, (4) the
form of annuity to be paid after the accumulation period, (5) the beneficiary
to whom death benefits are to be paid, and (6) the amount and frequency of
withdrawals from the Contract Value.
During the annuity period, the person entitled to the annuity may transfer
Annuity Unit values among subaccounts of the Separate Account. Further, if the
annuity is for a specified number of years (under Option 1 in the Contract),
the person entitled to the annuity may withdraw the present value of annuity
payments remaining to be paid.
Upon death of the Annuitant prior to the Annuity Date, the beneficiary may
elect to receive a death benefit in a lump sum or in the form of an annuity.
15
<PAGE>
The Contracts may be amended at any time to conform to applicable laws or
governmental regulations. If, in our judgment, investment in any of the
underlying funds becomes inappropriate to the purposes of the Contracts, we
may, with approval of the Securities and Exchange Commission and the governing
state insurance department, substitute another fund for existing and future
investments.
Contract Owner inquiries may be made by writing The Penn Mutual Life
Insurance Company, Customer Service Group, Philadelphia, PA 19172. Or, you can
call, toll free, 1-800-523-0650.
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PURCHASES
A completed application, together with a check for the first purchase
payment, is forwarded to our service office. Normally, a completed application
form received at our service office will be accepted within two business days.
If an incomplete application is not completed and acted upon within five
business days, the purchase payment will be returned unless the Contract Owner
requests that we retain it while he or she completes the application. All
subsequent purchase payments are sent directly to our service office.
For Variable/Fixed Contracts issued in connection with qualified retirement
plans, the minimum first purchase payment is $250 and the minimum for each
subsequent purchase payment is $50. The minimum first purchase payment for
Variable/Fixed Contracts which are not issued in connection with qualified
retirement plans is $2,500 and the minimum for each subsequent purchase payment
is $300. Total purchase payments credited to a Variable/Fixed Contract may not
exceed $1,000,000 in any calendar year without the consent of Penn Mutual.
For Variable Contracts issued in connection with retirement plans qualifying
for special tax treatment under the Internal Revenue Code, the minimum first
purchase payment is $250 and the minimum for each subsequent purchase payment
is $40. The minimum first purchase payment for Variable Contracts which are not
issued in connection with qualified retirement plans is $1,500 and the minimum
for each subsequent purchase payment is $300.
We may, at our discretion, reduce the minimum requirements for initial and
subsequent purchase payments under the Contracts.
Purchase payments allocated to the Separate Account are credited in the form
of Accumulation Units of the subaccount selected. The number of Accumulation
Units credited is determined by dividing the purchase payment allocated to the
Separate Account by the value of the Accumulation Unit at the end of the
valuation period in which the purchase payment is received at our service
office or, in a case of the first purchase payment, is accepted by us.
The principal underwriter of the Contracts (under federal securities laws) is
Hornor, Townsend & Kent, Inc., 600 Dresher Road, Horsham, PA 19044, a wholly
owned subsidiary of Penn Mutual.
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ACCUMULATION UNITS
For each subaccount of the Separate Account, the value of an Accumulation
Unit was set at $10 when the subaccount was established. The value of an
Accumulation Unit may increase or decrease from one valuation period to the
next.
A valuation period is the period from one valuation to the next. Valuation is
performed on each day the New York Stock Exchange is open for trading.
The value of an Accumulation Unit for a valuation period is determined by
multiplying the value of an Accumulation Unit for the prior valuation period by
the net investment factor for the subaccount for the current valuation period.
The net investment factor is a measure of (1) investment performance of Fund
shares held in the subaccount, (2) any taxes on income or gains from
investments held in the subaccount and (3) the mortality and expense risk
charges assessed against the subaccount. Under current law, no taxes are levied
against income or gain from investments held in a subaccount.
- --------------------------------------------------------------------------------
ANNUITY PAYMENTS
Contract Owners may choose (1) an annuity for a specified number of years
(not less than 5 or more than 25 for a Variable/Fixed Contract and not less
than 5 or more than 30 for the Variable Contract), (2) a life annuity, (3) a
life annuity with payments guaranteed for 10 or 20 years, (4) a joint and
survivor life annuity or (5) such other form of annuity as we may agree upon.
Annuity payments do not start until an annuity option is chosen by the Contract
Owner.
The level of the variable annuity payments is determined by various factors,
including the form of annuity chosen, the expected duration of the annuity
period, the performance of the applicable investment accounts, and the annuity
purchase rates and charges specified in the Contract.
16
<PAGE>
The mortality and expense risk charges specified in the Contracts are as-
sessed during both the accumulation and annuity pay-out phases of the Contract.
We continue to assess the charges during payment of a variable annuity not in-
volving a life contingency although we no longer bear any mortality risk on
such payment obligation.
The variable annuity purchase rates assume an annual net investment return of
4%. If the annual net investment return is greater than 4%, the level of the
annuity payments increases. If the annual net investment return is less than
4%, the level of the annuity payments decreases.
The level of fixed annuity payments under a Variable/Fixed Contract is deter-
mined by various factors, including the form of annuity chosen, the expected
duration of the annuity period and the amount accumulated and applied under the
contract to the fixed annuity.
Unless the Contract Owner specifies otherwise, the Annuity Date will be the
first day of the next month after the Annuitant's 85th birthday for Contracts
which are not issued under qualified retirement plans and the first day of
April in the calendar year following the year in which the Annuitant attains
the age of 70 1/2 for Contracts which are issued under qualified retirement
plans. The Contract Owner or the Contract Owner's surviving beneficiary may
change the Annuity Date or annuity option by giving written notice at our serv-
ice office at least 30 days prior to the current Annuity Date. The Annuity Date
under the Variable/Fixed Contract may not be earlier than the first contract
anniversary.
If the Contract Value of a Variable/Fixed Contract is less than $5,000, or if
the Contract Value of a Variable Contract is less than $2,000, we may elect to
pay such amount in lump sum in place of an annuity. Annuity payments generally
are made on the first day of each month starting with the Annuity Date. Howev-
er, if any payment would be less than $50, we may change the frequency of annu-
ity payments so that payments are at least $50 each.
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PAYMENT ON DEATH
Variable/Fixed Contracts sold in most states provide that if the Annuitant
(or Contract Owner in some cases, if different) dies prior to the Annuity Date,
we will pay the beneficiary the greatest of (1) the sum of all purchase pay-
ments, adjusted for withdrawals and contract transfers, (2) the Contract Value
for the valuation period in which proof of death and any other required infor-
mation needed to make payment is received at our service office or (3) the sum
of the Fixed Account Value (if any) on the date of death and the Variable Ac-
count Value as of the contract date or, if later, the most recent seven-year
contract anniversary occurring prior to the Contract Owner's 81st birthday, ad-
justed for subsequent purchase payments and adjusted for withdrawals and con-
tract transfers. Similarly, Variable Contracts sold in most states provide that
if the Annuitant (or Contract Owner in some cases, if different) dies prior to
the Annuity Date, we will pay the beneficiary the greatest of (1) the sum of
all purchase payments, adjusted for withdrawals and contract transfers, (2) the
Contract Value for the valuation period in which proof of death and any other
required information needed to make payment is received at our service office
or (3) the Contract Value as of the contract date or, if later, the most recent
seven year contract anniversary occurring prior to the Contract Owner's 81st
birthday, adjusted for subsequent purchase payments and adjusted for withdraw-
als and contract transfers. With respect to Contracts sold in Texas, if the An-
nuitant (or the Contract Owner in some cases, if different) dies prior to the
Annuity Date, Penn Mutual will pay the greater of (1) the sum of all purchase
payments, adjusted for withdrawals and contract transfers or (2) the Contract
Value for the valuation period in which proof of death and any other required
information needed to make payment is received at Penn Mutual's service office.
"Proof of death" in the foregoing means a death certificate or other official
document establishing death.
Payment generally will be in a lump sum and must be paid within five years of
the date of death. If the beneficiary is not the decedent's spouse, the benefi-
ciary may elect an annuity option for death payments in lieu of receiving a
lump sum payment. If an annuity option is selected, payments must commence
within one year of the decedent's death and must be made over a period not
longer than the beneficiary's life or over a period not longer than the
beneficiary's life expectancy. If the beneficiary is the spouse of the dece-
dent, the beneficiary may elect an annuity option that was available to the de-
cedent. Further, a spousal beneficiary may apply to become the owner of the
Contract.
If the Annuitant dies on or after the Annuity Date and the annuity is for a
specified number of years or for life with payments guaranteed for 10 or 20
years, the beneficiary may elect to have the payments continue for the speci-
fied or guaranteed period or to receive in lump sum the present value of the
remaining payments.
Contract Owners may designate a beneficiary in their purchase applications.
Owners of Variable/Fixed Contracts may change the beneficiary at any time be-
fore the death of the Contract Owner or Annuitant, whichever occurs first. Own-
ers of Variable Contracts may change the beneficiary while the Annuitant is
alive.
17
<PAGE>
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TRANSFERS
Owners of Variable/Fixed Contracts may transfer Accumulation and Annuity Unit
Values from one subaccount of the Separate Account to another subaccount of the
Separate Account. The minimum amount that may be transferred is $250 or, if
less, the amount held in the account. Contract Owners may make no more than two
transfers in any calendar month and no more than twelve transfers in any
calendar year. We reserve the right to charge a fee for transfers in excess of
six per calendar year. Within certain additional limitations stated in the
Contract, owners of Variable/Fixed Contracts also may transfer Accumulation
Unit Values to the Fixed Account and transfer amounts from the Fixed Account to
the Variable Account or to another fixed interest option within the Fixed
Account.
Owners of Variable/Fixed Contracts may transfer all or part of the Contract
Value to another annuity contract issued by Penn Mutual if both contracts are
owned under the same qualified plan by the trustee under the plan.
Owners of Variable Contracts may transfer Accumulation and Annuity Unit
values from one subaccount of the Separate Account to another, subject to a
limit of six transfers during a calendar year.
Owners of a Variable Contract may transfer all or part of the Contract Value
to another contract issued by us containing a reciprocal transfer provision,
subject to the following conditions. The owner, annuitant and beneficiary must
be the same under both contracts. No more than six such transfers may be made
in a calendar year and no transfer may be made after the thirtieth day before
the Annuity Date. Subject to such lesser amounts we may establish, the minimum
for transfers to contracts which are not issued in connection with qualified
retirement plans is $1,000 and the minimum for all other transfers is $250. For
partial transfers, the remaining Contract Value must be at least $250.
Transfers may be made to a Contract from other contracts we have issued to
the extent provided in such contracts. Withdrawals from the Contract,
attributable to amounts transferred from other contracts with front end sales
charges, will not be subject to a deferred sales charge.
A written request for transfer (or, if authorized in writing, a telephone
request for transfer) must be received at our service office and all other
administrative requirements for transfer must be met to make the transfer. The
Account and Penn Mutual will not be liable for following instructions
communicated by telephone that we reasonably believe to be genuine. We require
certain personal identifying information to process a telephone transfer.
DOLLAR COST AVERAGING: If you have a Contract Value of at least $10,000, you
may elect to have flat dollar amounts ($100 minimum) transferred monthly or
quarterly from one source account to other accounts ($50 minimum per account).
These transfers may be made only from one of the following accounts: Money
Market Subaccount, Limited Maturity Bond Subaccount, Quality Bond Subaccount,
or Fixed Holding Account. The dollar cost averaging term may run from 12 to 60
months, or until you give notice of a change in allocation or cancellation of
the feature.
AUTOMATIC REBALANCING: You may elect to have your investments in subaccounts
of the Separate Account automatically rebalanced. We will transfer funds under
your Contract on a quarterly (calendar) basis among the subaccounts to maintain
a specified percentage allocation among your selected variable investment
options. Dollar cost averaging and automatic rebalancing may not be in effect
at the same time.
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WITHDRAWALS
Prior to the earlier of the death of the Annuitant (or the Contract Owner) or
the Annuity Date, the Contract Owner may withdraw all or part of the Contract
Value. After the Annuity Date, a Contract Owner who has chosen an annuity for a
specified number of years under Option 1 of the Contract (or other person
receiving such annuity), may withdraw the present value of the annuity.
Withdrawals will be based on values at the end of the valuation period in which
the written request for withdrawal (and the Contract, in case of full
withdrawal) are received at our service office. Payment will normally be made
within seven days of receipt of the written request and the Contract, if
required. A partial withdrawal must be at least $250 and the remaining Contract
Value must be at least $250.
With respect to Contracts qualifying under Section 403(b) of the Internal
Revenue Code, there are certain restrictions on withdrawals. Withdrawals
attributable to purchase payments made after December 31, 1988 pursuant to a
salary reduction agreement may be made only if the Contract Owner is over the
age of 59 1/2, leaves the employment of the employer, dies or becomes disabled
as defined in the Code. Withdrawals (other than withdrawals attributable to
income earned on purchase payments) may also be possible in the case of
hardship as defined in the Code. The restrictions do not apply to transfers
among subaccounts and may also not apply to transfers to other investments
qualifying under Section 403(b). The restrictions on withdrawals under Section
403(b) Contracts are imposed in reliance upon a no-action letter issued by the
Chief of the Office of
18
<PAGE>
Insurance Products and Legal Compliance of the Securities and Exchange
Commission to the American Council of Life Insurance dated November 28, 1988.
Penn Mutual will comply with the conditions set forth in that letter.
- --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS AND TRANSFERS
We reserve the right to defer a withdrawal, a transfer of values or annuity
payments funded by the Separate Account if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings); (b) trading on the
Exchange is restricted; (c) an emergency exists such that it is not reasonably
practical to dispose of securities held in the Separate Account or to determine
the value of its assets; or (d) the Securities and Exchange Commission by order
so permits for the protection of investors. Conditions described in (b) and (c)
will be decided by, or in accordance with rules of, the Commission.
- --------------------------------------------------------------------------------
DEDUCTIONS AND EXPENSES
Each year on the date specified in the Contract (and on the date the Variable
Account Value or Contract Value is withdrawn in full if other than the date
specified), we deduct a contract administration charge of $30 or 2% of the
current value of the variable accounts, whichever is less, from the amount held
under the Contract in the Separate Account. This charge is made solely to
reimburse us for expenses we incur in administering the Contracts and the
Separate Account. The charge is made by canceling Accumulation Units credited
to the Contract.
We deduct a daily expense risk charge equal to an annual rate of 0.5% of the
daily net asset value of the Separate Account. This charge is made to
compensate us for the risk of guaranteeing not to increase the annual contract
administration charge to more than $30 regardless of actual administrative
costs.
We deduct a daily mortality risk charge equal to an annual rate of 0.75% of
the daily net asset value of the Separate Account (prior to September 1, 1990
the charge was 0.8%). This charge is to compensate us for the mortality-related
guarantees (e.g. guarantees that the annuity factors will never be decreased
even if mortality experience is substantially different than originally
assumed) we make under the Contract.
A contingent deferred sales charge may be deducted in the event of full or
partial withdrawal of the Contract Value or withdrawal of the present value of
remaining annuity payments. This charge is made to cover sales expenses that we
have incurred. Sales expenses which are not covered by the deferred sales
charge are paid from the surplus of Penn Mutual, which may include proceeds
from the expense and mortality risk charges.
19
<PAGE>
With respect to the Variable/Fixed Contract, if the contingent deferred sales
charge applies, it will be calculated in accordance with the following
schedules. First, if no purchase payments have been made after the first
contract year, the deferred sales charge will equal:
<TABLE>
<CAPTION>
WITHDRAWAL DURING DEFERRED SALES CHARGE AS A
CONTRACT YEAR PERCENTAGE OF AMOUNT WITHDRAWN
------------------------------------------------------------------------
<S> <C>
1 7.0%
------------------------------------------------------------------------
2 6.0%
------------------------------------------------------------------------
3 5.0%
------------------------------------------------------------------------
4 4.0%
------------------------------------------------------------------------
5 3.0%
------------------------------------------------------------------------
6 2.0%
------------------------------------------------------------------------
7 1.0%
------------------------------------------------------------------------
8 and later No Charge
------------------------------------------------------------------------
Second, if purchase payments have been made in any contract year after the
first, the deferred sales charge will equal:
<CAPTION>
WITHDRAWAL DURING DEFERRED SALES CHARGE AS A
CONTRACT YEAR PERCENTAGE OF AMOUNT WITHDRAWN
------------------------------------------------------------------------
<S> <C>
1 7.0%
------------------------------------------------------------------------
2 6.0%
------------------------------------------------------------------------
3 5.0%
------------------------------------------------------------------------
4 4.0%
------------------------------------------------------------------------
5 3.5%
------------------------------------------------------------------------
6 3.0%
------------------------------------------------------------------------
7 2.5%
------------------------------------------------------------------------
8 2.0%
------------------------------------------------------------------------
9 1.5%
------------------------------------------------------------------------
10 1.0%
------------------------------------------------------------------------
11 and later No Charge
------------------------------------------------------------------------
</TABLE>
Once in each contract year on or after the last day of the first contract
year the Owner of a Variable/Fixed Contract may withdraw 10% of the Contract
Value (determined as of the date of withdrawal) free of the contingent deferred
sales charge. The Contract Owner may also elect to receive scheduled partial
withdrawals free of the contingent deferred sales charge, provided that the sum
of the scheduled payments and any single unscheduled withdrawals do not exceed
10% of the contract value (determined as of the date of withdrawal). The total
sum of the contingent deferred sales charges deducted from amounts withdrawn
from the Separate Account will never exceed 8 1/2% of the total of all purchase
payments credited to the Separate Account.
With respect to the Variable Contract, if the contingent deferred sales
charge applies, it will equal the lesser of (a) 5% of the sum of purchase pay-
ments made within seven years prior to the date of withdrawal or (b) 5% of the
amount withdrawn. Under no circumstances will the charge ever exceed 5% of to-
tal purchase payments. No charge will be made on that portion of the first
withdrawal in a contract year that does not exceed 10% of total purchase pay-
ments made one year or more prior to the withdrawal. Further, no charge will be
made under the Variable Contract on that portion of the first withdrawal in the
eighth, ninth and tenth contract years that does not exceed the following per-
centages of the Contract Value:
<TABLE>
<CAPTION>
CONTRACT YEAR PERCENTAGE
------------------------------------------------------------------------
<S> <C>
Eighth 25%
------------------------------------------------------------------------
Ninth 50%
------------------------------------------------------------------------
Tenth 75%
------------------------------------------------------------------------
</TABLE>
No charge will be made on the first withdrawal in any contract year after the
tenth contract year.
The Contract Owner may elect to receive scheduled partial withdrawals free of
the contingent deferred sales charge, provided that the sum of the scheduled
payments and any single unscheduled withdrawal do not exceed 10% of total pur-
chase payments made one year or more prior to the first withdrawal.
20
<PAGE>
The Contract Owner may at any time withdraw all or any part of the Contract
Value free from the contingent deferred sales charge if (i) the Contract Owner
(or Annuitant under a qualified retirement plan) is disabled as defined in Sec-
tion 72 (m) (7) of the Internal Revenue Code and as applied under the Social
Security Act, (ii) the disability began after the Contract Date and (iii) the
disability has continued without interruption for four months.
The contingent deferred sales charge may be reduced on Contracts sold to a
trustee, employer or similar party pursuant to a retirement plan or to a group
of individuals, if such sales are expected to involve reduced sales expenses.
The amount of reduction will depend upon such factors as the size of the group,
any prior or existing relationship with the purchaser or group, the total
amount of purchase payments and other relevant factors that might tend to re-
duce expenses incurred in connection with such sales. The reduction will not be
unfairly discriminatory to any Contract Owners.
Some states and municipalities impose premium taxes on purchase payments
received by insurance companies. Any premium taxes payable will be deducted
upon annuitization. Currently, they range from 0% to 3.5%.
- --------------------------------------------------------------------------------
THE FIXED INTEREST OPTIONS
BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN PENN MUTUAL'S
GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940. THE GENERAL ACCOUNT AND ANY INTERESTS HELD IN
THE GENERAL ACCOUNT ARE THEREFORE NOT SUBJECT TO THE PROVISIONS OF THESE ACTS.
PENN MUTUAL HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING TO THE
FIXED ACCOUNT. DISCLOSURE REGARDING THE FIXED ACCOUNT, HOWEVER, MAY BE SUBJECT
TO GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO
THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN THIS PROSPECTUS.
Owners of Variable/Fixed Contracts may allocate or transfer all or part of
the amount credited to their Contracts to one or more of the following fixed
interest options in the Fixed Account: (1) the Fixed Holding Account; (2) the
One Year Guaranteed Account; (3) the Three Year Guaranteed Account; (4) the
Five Year Guaranteed Account; and (5) the Seven Year Guaranteed Account. The
minimum amount for an allocation to the Fixed Holding Account is $50; the
minimum amount for an allocation to the One Year Guaranteed Account or the
Three Year Guaranteed Account is $250; and the minimum amount for an allocation
to the Five Year Guaranteed Account or the Seven Year Guaranteed Account is
$5,000. We periodically declare an effective annual interest rate applicable to
allocations to the various fixed interest options. For each amount allocated to
the Fixed Holding Account, interest will be credited at an effective annual
interest rate declared by us on the first day of each calendar year. The
declared rate of interest will apply through the end of the calendar year in
which an allocation is made to the Fixed Holding Account at which time a new
rate will be declared by Penn Mutual. For each amount allocated to the One Year
Guaranteed Account, the Three Year Guaranteed Account, the Five Year Guaranteed
Account or the Seven Year Guaranteed Account, interest will be credited at an
annual effective interest rate declared by us each month. The declared rate of
interest will apply through the end of the twelve month, thirty-six month,
sixty month or eighty-four month period, as applicable, which begins on the
first day of the calendar month in which the allocation is made. We guarantee
an effective annual rate of interest on allocations to all fixed interest
options of not less than 4%. In addition, rates declared during the first seven
contract years for the One Year Guaranteed Account will not be less than the 52
week Treasury Bill discount rate obtained from the most recent regularly
scheduled auction.
Owners of Variable/Fixed Contracts may transfer Fixed Account funds to the
Separate Account or to another fixed interest option within the Fixed Account,
subject to the conditions and limitations in the fixed account provisions of
the Contract. A premature withdrawal charge may be deducted from the interest
earned on any amount that is withdrawn from the Three Year Guaranteed Account,
the Five Year Guaranteed Account or the Seven Year Guaranteed Account during
the period for which an interest rate is guaranteed. In no event will the pre-
mature withdrawal charge invade the Contract Owner's principal investment in
the applicable fixed interest option. In accordance with state law, we may de-
fer a withdrawal or transfer from the Fixed Account for up to six months if we
reasonably determine that investment conditions are such that an orderly sale
of assets in Penn Mutual's general account is not feasible.
Owners of Variable/Fixed Contracts qualifying under Section 403(b) of the
Code may be able to borrow against a portion of the amount credited under their
Contract, provided the loan privilege has been approved in the applicable
state. The loan will be made from the general account of Penn Mutual. Because
this prospectus generally is limited to describing the variable portion of the
Contract, you should review the Contract loan endorsement or consult your Penn
Mutual representative for a complete description of the terms of the loan priv-
ilege, including minimum and maximum loan amounts, repayment terms, and re-
strictions on prepayments. The following paragraphs describe how exercise of
the loan privilege may relate to the Variable Account Value.
21
<PAGE>
First, at the time a contract loan is made and in accordance with the Con-
tract Owner's direction, an amount equal to the initial loan amount will be
transferred from the Contract's investment options to an account in Penn
Mutual's general account called the "Restricted Account." Amounts transferred
from investment options to the Restricted Account will not participate in the
investment experience of those investment options. Amounts transferred to the
Restricted Account will generally earn interest at a rate 2 1/2 percentage
points less than the rate of interest charged on the loan.
Second, on a Contract anniversary, the accrued interest in the Restricted Ac-
count will be transferred to the Contract Owner's investment options in accor-
dance with the Contract Owner's current payment allocation instructions.
Third, loan repayments, which are due quarterly, will result in the transfer
of an amount equal to the principal portion of the repayment from the Re-
stricted Account to the Fixed Holding Account. Contract Owners may then trans-
fer amounts from the Fixed Holding Account to the other investment options of-
fered under the Contract.
Fourth, if a payment or the entire loan is in default as defined in the Con-
tract, Penn Mutual will report the amount of the default to the Internal Reve-
nue Service as a taxable distribution and, if the Owner is under age 59 1/2, as
a premature distribution. Subject to restrictions in Section 403(b) of the
Code, the amount of any missed payment, plus interest, or the entire loan bal-
ance, plus interest, if the entire loan is in default, plus any applicable con-
tingent deferred sales charge, will be withdrawn by Penn Mutual from the Con-
tract's investment options in accordance with the Contract Owner's direction in
the Loan Request and Agreement. The net proceeds from the withdrawal will be
used to repay the loan. If a withdrawal is restricted under the Code, the out-
standing loan balance will continue to accrue interest and the amount due will
be withdrawn when a withdrawal becomes permissible. Thus, when an event takes
place which makes withdrawal from the Contract permissible under the Code, such
as attainment of age 59 1/2, disability or death, the Contract will be checked
to determine if there is an outstanding loan balance for which one or more pay-
ments have been missed. If so, funds necessary to pay the overdue amount, plus
any applicable contingent deferred sales charge, will be withdrawn from the
Contract's investment options in the order set forth in the preceding para-
graph. While a loan balance is outstanding, any withdrawal or death benefit
proceeds must first be used to pay the loan.
Loans are subject to the terms of the Contract, the Code and the Employee Re-
tirement Income Security Act of 1974, all of which may impose restrictions.
Penn Mutual reserves the right to suspend, modify or terminate the availability
of loans. Where there is a plan fiduciary, it is the responsibility of the fi-
duciary to ensure that any Contract loans comply with plan qualification re-
quirements, including ERISA.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS
The following brief discussion of federal income tax considerations is based
on the law as in effect on the date of this prospectus. The Government Account-
ing Office and the Treasury Department have submitted congressionally mandated
studies of the tax treatment of life insurance and annuities. Whether these
studies will result in any subsequent legislative changes in the tax treatment
of annuity contracts is uncertain. It is anticipated, however, that any legis-
lative changes will be prospective in nature.
Under current law, no federal income taxes are imposed on increases in the
value of a Contract until distribution occurs, either in the form of a with-
drawal or death benefit or as annuity payments under an annuity option.
For a withdrawal or death benefit, the taxable portion is generally the
amount in excess of the cost basis of the Contract. Amounts withdrawn by the
Contract Owner or received as a death benefit by the designated beneficiary are
treated first as taxable income to the extent of the excess of the Contract
Value over the purchase payments made under the Contract. Such taxable portion
is taxed at ordinary income tax rates. Designation of a beneficiary who is ei-
ther 37 1/2 years younger than the Contract Owner or a grandchild of the Con-
tract Owner may have Generation Skipping Transfer Tax consequences under Sec-
tion 2601 of the Internal Revenue Code.
For annuity payments, the taxable portion is generally determined by a for-
mula that establishes the ratio of the cost basis of the Contract (as adjusted
for any refund feature) to the expected return under the Contract. The taxable
portion, which is the amount of the annuity payment in excess of the cost ba-
sis, is taxed at ordinary income tax rates.
An additional income tax of 10% may be imposed on the taxable portion of an
early withdrawal or distribution unless one of several exceptions apply. There
will be no additional income tax on early withdrawals which are part of a
series of substantially equal periodic payments (not less frequently than
annually) made for life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of the taxpayer and a beneficiary, or on
withdrawals made on or after age 59 1/2. There also will be no additional tax
on distributions made after death or on withdrawals attributable to total and
permanent disability (as defined in the Code). Further, there will be no
additional tax on distributions within certain other exceptions to the general
rule.
22
<PAGE>
The transfer of a Contract may result in the transferor incurring tax. If the
transfer is for less than adequate consideration the taxable portion would be
the Contract Value at the time of transfer over the investment in the Contract
at such time. This rule does not apply to transfers between spouses or to
transfers incident to a divorce.
Subject to certain exceptions, a Contract must be held by or on behalf of a
natural person in order to be treated as an annuity contract under federal in-
come tax law and to be accorded the tax treatment described in the preceding
paragraphs. If a Contract is not treated as an annuity contract for federal in-
come tax purposes, the income on the Contract is treated as ordinary income re-
ceived or accrued by the Contract Owner during the taxable year.
Section 817(h) of the Code provides that the investments of a separate
account underlying a variable annuity contract which is not purchased under a
qualified retirement plan or certain other types of plans (or the investments
of a mutual fund, the shares of which are owned by the variable annuity
separate account) must be "adequately diversified" in order for the contract to
be treated as an annuity contract for tax purposes. The Treasury Department has
issued regulations prescribing such diversification requirements. The Separate
Account, through each of the available Funds of Penn Series, American Century
Variable Portfolios, Inc., Neuberger & Berman Advisers Management Trust and
Fidelity Investments' Variable Insurance Products Fund, Variable Insurance
Products Fund II and Morgan Stanley Universal Funds, Inc., intends to comply
with those requirements. The requirements are briefly discussed in the
accompanying prospectuses for the underlying Funds.
The Treasury Department has indicated that in regulations or revenue rulings
under Section 817(d) (relating to the definition of a variable contract), it
will provide guidance on the extent to which contract owners may direct their
investments to particular subaccounts without being treated as owners of the
underlying shares. It is possible that when such regulations or rulings are
issued, certain of the Contracts may need to be modified to comply with them.
The Contracts may be used in connection with retirement plans that qualify
for special tax treatment under the Code. The plans include individual retire-
ment annuities qualified under Section 408(b) of the Code (referred to as
IRAs), simplified employee pension plans qualified under Section 408(k) of the
Code, tax deferred annuities qualified under Section 403(b) of the Code, state
and local government deferred compensation plans qualified under Section 457 of
the Code, pension or profit sharing plans for self-employed individuals quali-
fied under Section 401 of the Code (referred to as H.R. 10 or Keogh plans) and
corporate pension or profit sharing plans qualified under Section 401 of the
Code or annuity plans qualified under Section 403(a) of the Code. Special pro-
visions are required in some Contracts for qualification under the Code.
For some types of qualified retirement plans, there may be no cost basis in
the Contract. In this case, the total payments received may be taxable. Before
purchasing a Contract under a qualified retirement plan, the tax law provisions
applicable to the particular plan should be considered.
Generally, under a nonqualified annuity or individual retirement annuity
qualified under Section 408(b), unless the Contract Owner elects to the
contrary, any amounts that are received under the Contract that Penn Mutual
believes are includable in gross income for tax purposes will be subject to
withholding to meet federal income tax obligations. The same treatment will
apply to distributions from a qualified plan or Section 403(b) annuity that are
payable as an annuity for the life or life expectancy of one or more
individuals, or for a period of at least 10 years, or are required minimum
distributions. Other distributions from a qualified plan or a Section 403(b)
annuity are subject to mandatory 20% federal income tax withholding, unless an
election is made to make a direct transfer to another eligible retirement plan.
Distributions from a Section 457 deferred compensation plan are wages subject
to general income tax withholding requirements.
It should be understood that the foregoing description of federal income
taxes is not exhaustive and that special rules and considerations may be appli-
cable. For further information, a prospective purchaser should consult quali-
fied tax counsel.
23
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
VARIABLE ANNUITY PAYMENTS.................................................. B-2
First Variable Annuity Payments.......................................... B-2
Subsequent Variable Annuity Payments..................................... B-2
Annuity Units............................................................ B-2
Value of Annuity Units................................................... B-2
Net Investment Factor.................................................... B-2
Assumed Interest Rate.................................................... B-3
Valuation Period......................................................... B-3
- --------------------------------------------------------------------------------
PERFORMANCE DATA........................................................... B-4
Average Annual Total Return.............................................. B-4
Annual Changes in Accumulation Unit Values............................... B-11
Yields (Money Market Fund)............................................... B-11
- --------------------------------------------------------------------------------
DISTRIBUTION OF CONTRACTS AND CERTIFICATES................................. B-12
- --------------------------------------------------------------------------------
CUSTODIAN.................................................................. B-12
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS.................................................... B-12
- --------------------------------------------------------------------------------
LEGAL MATTERS.............................................................. B-13
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS....................................................... B-13
- --------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
[LOGO OF PENN MUTUAL APPEARS HERE]
The Penn Mutual Life Insurance Company
Independence Square, Philadelphia, PA 19172
EB 1474 5/97
<PAGE>
PROSPECTUS -- MAY 1, 1997
CERTIFICATES ISSUED UNDER GROUP VARIABLE AND FIXED ANNUITY CONTRACTS --
FLEXIBLE PURCHASE PAYMENTS
- --------------------------------------------------------------------------------
OPTIMIZER
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
THE PENN MUTUAL LIFE INSURANCE COMPANY
PHILADELPHIA, PA 19172 . TELEPHONE (215) 956-8000
- --------------------------------------------------------------------------------
The variable account provisions of the group variable and fixed annuity
contracts described in this prospectus provide for accumulation of values and
for the payment of annuities. Through Penn Mutual Variable Annuity Account III
(referred to herein as the "Separate Account"), accumulation values and annuity
payment reserves are invested, at the direction of the account owner, in one or
more of the following Funds of Penn Series Funds, Inc.
PENN SERIES FUNDS, INC. MANAGERS
Growth Equity Fund Independence Capital Management, Inc. (a
subsidiary of The Penn Mutual Life
Insurance Company)
Value Equity Fund
Flexibly Managed Fund
OpCap Advisors
International Equity Fund T. Rowe Price Associates, Inc.
Quality Bond Fund Vontobel USA Inc. (a subsidiary of
High Yield Bond Fund Vontobel Holding Ltd.)
Money Market Fund Independence Capital Management, Inc.
T. Rowe Price Associates, Inc.
Independence Capital Management, Inc.
The accumulation value and annuity payments vary in accordance with the
investment experience of the Funds.
Under some circumstances, early withdrawals from a Contract may be subject to
a 5% contingent deferred sales charge and/or a 10% additional income tax.
A certificate issued under a contract may be returned within ten days of
receipt for a full refund of the account value. Longer free look periods and
full refund of purchase payments are required in some states.
This prospectus sets forth concisely the information a prospective investor
should know before investing. It should be retained for future reference.
A statement of additional information dated the same as this prospectus has
been filed with the Securities and Exchange Commission and is incorporated
herein by reference. It is available, at no charge, by writing The Penn Mutual
Life Insurance Company, Customer Service Group, Philadelphia, PA 19172. Or, you
can call, toll free, 1-800-523-0650. The table of contents of the statement of
additional information is at the end of this prospectus.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUS OF
PENN SERIES FUNDS, INC.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
SPECIAL TERMS............................................................... 3
- --------------------------------------------------------------------------------
EXPENSES.................................................................... 4
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION............................................. 6
Penn Series Growth Equity Fund............................................ 6
Penn Series Value Equity Fund............................................. 7
Penn Series Flexibly Managed Fund......................................... 7
Penn Series International Equity Fund..................................... 7
Penn Series Quality Bond Fund............................................. 7
Penn Series High Yield Bond Fund.......................................... 8
Penn Series Money Market Fund............................................. 8
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY...................................... 9
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT........................................................ 9
- --------------------------------------------------------------------------------
THE CONTRACT................................................................ 10
Purchases................................................................. 10
Accumulation Units........................................................ 11
Annuity Payments.......................................................... 11
Payment on Death.......................................................... 11
Transfers................................................................. 11
Withdrawals............................................................... 12
Deferment of Payments and Transfers....................................... 12
Deductions and Expenses................................................... 12
- --------------------------------------------------------------------------------
THE FIXED INTEREST OPTIONS.................................................. 13
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS........................................... 14
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION CONTENTS................................ 16
- --------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL TERMS
As used in this prospectus, the following terms have the indicated meaning:
CERTIFICATE: A certificate issued under the Contract which sets forth
provisions of the Contract.
CONTRACT: The group variable and fixed annuity contract described in this
prospectus.
ACCUMULATION UNIT: A unit of measure used to compute a Participant's
Variable Account Value prior to the Annuity Date.
ANNUITY DATE: The date on which annuity payments start.
OWNER: The Participant or other person specified in the Certificate.
PARTICIPANT: A person on whose behalf purchase payments are made under the
Contract.
PARTICIPANT'S VARIABLE ACCOUNT: An account established and maintained for a
Participant.
PARTICIPANT'S VARIABLE ACCOUNT VALUE: The value of all Accumulation Units
credited to the Participant's Variable Account.
3
<PAGE>
- -------------------------------------------------------------------------------
EXPENSES
<TABLE>
- ------------------------------------------------------------------------------
<S> <C>
CONTRACT OWNER TRANSACTION EXPENSES
Sales Load Imposed on Purchase Payments................................. None
Deferred Sales Load, as percentage of the amount withdrawn.............. 5%*
Exchange Fee............................................................ None
- -----------------------
* The deferred sales charge will not be made on that portion of the first
withdrawal in an enrollment year that does not exceed specified percentages
of the sum of the Participant's Variable Account Value and the Participant's
fixed account value. See "Deductions and Expenses" in this prospectus.
ANNUAL CONTRACT ADMINISTRATION CHARGE................................... $30
SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE VARIABLE
ACCOUNT VALUE)
Mortality and Expense Risk Charge....................................... 1.25%
Account Fees and Expenses............................................... None
-----
Total Separate Account Annual Expenses.................................. 1.25%
</TABLE>
- -------------------------------------------------------------------------------
PENN SERIES FUNDS, INC.**
UNDERLYING FUND ANNUAL EXPENSES (AS A % OF PORTFOLIO AVG. NET ASSETS)
<TABLE>
<CAPTION>
MANAGEMENT ADMINISTRATIVE
FEES AND CORPORATE TOTAL
(AFTER SERVICES FEES ACCOUNTING OTHER FUND
WAIVER) (AFTER WAIVER) FEES EXPENSES EXPENSES
---------- -------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Growth Equity............ 0.50% 0.15% 0.08% 0.07% 0.80%
Value Equity............. 0.50% 0.15% 0.07% 0.06% 0.78%
Flexibly Managed......... 0.50% 0.15% 0.06% 0.06% 0.77%
International Equity..... 0.75% 0.15% 0.09% 0.18% 1.17%
Quality Bond............. 0.45% 0.15% 0.08% 0.09% 0.77%
High Yield Bond.......... 0.50% 0.15% 0.08% 0.11% 0.84%
Money Market............. 0.40% 0.15% 0.08% 0.10% 0.73%
</TABLE>
- -----------------------
** The expenses presented are for the last fiscal year. In the absence of
voluntary fee waivers by the investment adviser, the total expenses of the
Growth Equity and Quality Bond Funds would have been 0.81% and 0.78%
respectively. In the absence of voluntary fee waivers by the investment
adviser and administrator, the total expenses of the Money Market Fund would
have been 0.74%.
- -------------------------------------------------------------------------------
The purpose of this foregoing table is to assist Contract Owners in
understanding the various costs and expenses that a Contract Owner will bear
directly and indirectly. The table shows Contract expenses and underlying Fund
expenses. See the accompanying prospectus of Penn Series Funds, Inc. for
information on expenses.
Premium taxes may be applicable. SEE DEDUCTIONS AND EXPENSES in this
prospectus.
4
<PAGE>
- --------------------------------------------------------------------------------
EXAMPLE
If you own certificates and surrender your certificates at the end of the
applicable period, you would pay the following expenses on each $1,000
invested, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund............................ $67 $113 $163 $255
Penn Series Quality Bond Fund............................ $68 $115 $165 $259
Penn Series High Yield Bond Fund......................... $68 $117 $168 $266
Penn Series Growth Equity Fund........................... $68 $115 $166 $262
Penn Series Value Equity Fund............................ $68 $115 $165 $260
Penn Series Flexibly Managed Fund........................ $68 $115 $164 $259
Penn Series International Equity Fund.................... $71 $126 $184 $299
Penn Series Emerging Growth Fund......................... $71 $126 $183 $297
</TABLE>
- --------------------------------------------------------------------------------
EXAMPLE
If you own certificates and do not surrender your certificates, or you elect
an annuity option at the end of the applicable time period, you would pay the
following expense on each $1,000 invested, assuming 5% annual return on assets:
<TABLE>
<CAPTION>
ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
---- ----- ----- -----
<S> <C> <C> <C> <C>
Penn Series Money Market Fund............................ $21 $64 $110 $238
Penn Series Quality Bond Fund............................ $21 $66 $113 $243
Penn Series High Yield Bond Fund......................... $22 $68 $116 $250
Penn Series Growth Equity Fund........................... $22 $66 $114 $246
Penn Series Value Equity Fund............................ $21 $66 $113 $243
Penn Series Flexibly Managed Fund........................ $21 $66 $112 $242
Penn Series International Equity Fund.................... $25 $78 $133 $283
Penn Series Emerging Growth Fund......................... $25 $77 $132 $281
</TABLE>
The example is based upon data for the fiscal year ended December 31, 1996
and assumes an average Participant's Variable Account Value of approximately
$8,200. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES UNDER THE CONTRACT; ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN
THOSE SHOWN.
5
<PAGE>
- --------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
The following tables show Accumulation Unit values and the number of
Accumulation Units outstanding for each of the subaccounts of the Separate
Account for the specified periods. The financial data included in these tables
should be read in conjunction with the financial statements and the related
notes included in the Statement of Additional Information.
- --------------------------------------------------------------------------------
PENN SERIES GROWTH EQUITY FUND SUBACCOUNT (a)
Values of an Accumulation Unit Outstanding Throughout Each Period for Qualified
and Nonqualified Retirement Plans
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
- -------------------------------------------------------------------------------------------------------------------
NON- NON- NON- NON- NON-
QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $32.596 $32.327 $26.102 $25.887 $28.766 $28.528 $25.906 $25.692 $24.756 $24.552
Accumulation Unit Value,
end of period.......... $38.550 $38.235 $32.596 $32.327 $26.102 $25.887 $28.766 $28.528 $25.906 $25.692
Number of Accumulation
Units outstanding, end
of period.............. 1,830,081 620,903 1,991,646 674,290 2,119,836 717,328 2,042,023 685,110 2,004,015 669,679
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------
1991 1990 1989 1988 1987
- -------------------------------------------------------------------------------------------------------------------
NON- NON- NON- NON- NON-
QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL QUAL
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $18.605 $18.451 $21.204 $21.029 $16.356 $16.221 $14.702 $14.581 $14.145 $14.029
Accumulation Unit Value,
end of period.......... $24.756 $24.552 $18.605 $18.451 $21.204 $21.029 $16.356 $16.221 $14.702 $14.581
Number of Accumulation
Units outstanding, end
of period.............. 1,680,322 518,717 1,470,210 439,287 1,284,583 333,486 1,309,408 360,185 1,366,286 306,559
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Growth Stock Fund Subaccount prior to November 1, 1992.
6
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES VALUE EQUITY FUND SUBACCOUNT (a)
Values of an Accumulation Unit Outstanding Throughout The Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(b)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit
Value,
beginning of period.. $24.928 $18.361 $18.062 $17.080 $15.058 $11.939 $13.157 $11.802 $9.226 $10.000
Accumulation Unit
Value,
end of period........ $30.819 $24.928 $18.361 $18.062 $17.080 $15.058 $11.939 $13.157 $11.802 $9.226
Number of Accumulation
Units outstanding,
end of period........ 4,907,784 4,235,839 3,886,404 3,693,652 2,865,294 2,207,661 1,883,581 1,802,897 918,020 349,261
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Equity Income Fund Subaccount prior to November 1, 1992.
(b) For the period March 17, 1987 (date subaccount was established) through De-
cember 31, 1987.
- --------------------------------------------------------------------------------
PENN SERIES FLEXIBLY MANAGED FUND SUBACCOUNT (a)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit
Value, beginning of
period............... $42.865 $35.496 $34.514 $30.179 $27.893 $23.215 $23.712 $19.832 $16.898 $13.851
Accumulation Unit
Value, end of period. $49.262 $42.865 $35.496 $34.514 $30.179 $27.893 $23.215 $23.712 $19.832 $16.898
Number of Accumulation
Units outstanding,
end of period........ 5,711,843 4,946,240 4,198,305 3,143,601 2,327,829 1,664,751 1,237,347 1,129,858 853,647 623,017
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Capital Appreciation Fund Subaccount prior to November 1, 1992.
- --------------------------------------------------------------------------------
PENN SERIES INTERNATIONAL EQUITY FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------
1996 1995 1994 1993 1992(a)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value, begin-
ning of period................ $14.434 $12.843 $13.880 $10.175 $10.000
Accumulation Unit Value, end of
period........................ $16.659 $14.434 $12.843 $13.880 $10.175
Number of Accumulation Units
outstanding, end of period.... 4,012,762 3,388,479 3,556,098 1,847,892 92,386
- --------------------------------------------------------------------------------
</TABLE>
(a) For the period November 2, 1992 (date subaccount was established) through
December 31, 1992.
- --------------------------------------------------------------------------------
PENN SERIES QUALITY BOND FUND SUBACCOUNT (a)
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(b)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $18.465 $15.562 $16.639 $15.088 $14.336 $12.558 $11.776 $10.580 $9.968 $10.000
Accumulation Unit Value,
end of period.......... $18.990 $18.465 $15.562 $16.639 $15.088 $14.336 $12.558 $11.776 $10.580 $9.968
Number of Accumulation
Units outstanding, end
of period.............. 1,664,378 1,869,975 1,890,869 1,953,188 1,357,087 1,229,163 1,075,187 769,467 274,657 130,130
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Fixed Income Fund Subaccount prior to November 1, 1992.
(b) For the period March 17, 1987 (date subaccount was established) through De-
cember 31, 1987.
7
<PAGE>
- --------------------------------------------------------------------------------
PENN SERIES HIGH YIELD BOND FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $26.033 $22.644 $24.742 $20.918 $18.291 $13.534 $15.035 $15.325 $13.193 $13.461
Accumulation Unit Value,
end of period.......... $29.276 $26.033 $22.644 $24.742 $20.918 $18.291 $13.534 $15.035 $15.325 $13.193
Number of Accumulation
Units outstanding, end
of period.............. 1,185,318 1,194,944 1,264,890 1,257,271 705,414 594,530 613,408 817,147 708,838 469,236
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PENN SERIES MONEY MARKET FUND SUBACCOUNT
Values of an Accumulation Unit Outstanding Throughout Each Period
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation Unit Value,
beginning of period.... $18.148 $17.416 $17.003 $16.791 $16.491 $15.732 $14.893 $13.844 $13.089 $12.482
Accumulation Unit Value,
end of period.......... $18.817 $18.148 $17.416 $17.003 $16.791 $16.491 $15.732 $14.893 $13.844 $13.089
Number of Accumulation
Units outstanding, end
of period.............. 1,192,388 1,062,385 825,274 658,620 698,584 769,958 965,117 753,052 319,671 242,494
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The financial statements of the Separate Account for the year ended December
31, 1996 are included in the statement of additional information referred to on
the cover page of this prospectus.
- --------------------------------------------------------------------------------
In advertisements of the Contracts and Certificates thereunder, Penn Mutual
may provide information on total return performance and on annual changes in
accumulation unit values. We may also provide information on "yields" and
"effective yields" on investments in the Money Market Fund subaccount.
Information on total return performance will include average annual rates of
total return for one, five and ten year periods, or lesser periods depending on
how long the subaccount has been in existence. Average annual total return
figures will show the average annual rates of increase or decrease in
investments in the subaccounts, assuming a $1,000 investment at the beginning
of the period, withdrawal of the investment at the end of the period, and the
deduction of all applicable charges. We may also show average annual rates of
total return, assuming other amounts invested at the beginning of the period
and no withdrawal at the end of the period. Average annual total return figures
which assume no withdrawal at the end of the period will reflect all recurring
charges, but will not reflect the contingent deferred sales charge (if
applicable, the contingent deferred sales charge would reduce the amount that
may be withdrawn under the Contracts.)
The "yield" on an investment in the Money Market Fund subaccount refers to
the income generated by the investment over a 7-day period. This income is then
annualized. That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
subaccount is assumed to be reinvested. The effective yield will be slightly
higher than the yield because of the compounding effect of this assumed
reinvestment.
8
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
The Penn Mutual Life Insurance Company ("Penn Mutual" is a Pennsylvania mutual
life insurance company. We were chartered in 1847 and have been continuously
engaged in the life insurance business since that date. Our home office is
located at The Penn Mutual Life Insurance Company, Philadelphia, PA 19172.
- --------------------------------------------------------------------------------
THE SEPARATE ACCOUNT
Penn Mutual Variable Annuity Account III was established as a separate account
of Penn Mutual on April 13, 1982. The Separate Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940 and qualifies as a "separate account" within the
meaning of the federal securities laws.
The Separate Account is divided into subaccounts for investment in shares of
different Funds of Penn Series Funds, Inc. In addition, there are two
subaccounts for investment in shares of the Growth Equity Fund of Penn Series
Funds, Inc.--one for Contracts which were issued in connection with tax
qualified retirement plans and one for Contracts which were not issued in
connection with such plans. Income, gains and losses, realized or unrealized,
of a subaccount are credited to or charged against the subaccount without
regard to any other income, gains or losses of Penn Mutual. Assets equal to the
reserves and other contract liabilities with respect to each subaccount are not
chargeable with liabilities arising out of any other business of Penn Mutual.
Penn Mutual is obligated to pay all benefits and make all payments provided
under the Contracts.
Assets held in the Separate Account under a Contract are invested, at the
direction of the Owner, in one or more of the following Funds of Penn Series
Funds, Inc.:
GROWTH EQUITY FUND - seeks long-term growth of capital and increase of future
income by investing primarily in common stocks of well established growth
companies;
VALUE EQUITY FUND - seeks to maximize total return (capital appreciation and
income) primarily by investing in equity securities of companies believed to be
undervalued considering such factors as assets, earnings, growth potential and
cash flows;
FLEXIBLY MANAGED FUND - seeks to maximize total return (capital appreciation
and income) by investing in common stocks, other equity securities, corporate
debt securities, and/or short term reserves, in proportions considered
appropriate in light of the availability of attractively valued individual
securities and current and expected economic and market conditions;
INTERNATIONAL EQUITY FUND - seeks to maximize capital appreciation by investing
in a carefully selected diversified portfolio consisting primarily of equity
securities. The investments will consist principally of equity securities of
European and Pacific Basin Countries;
QUALITY BOND FUND - seeks the highest income over the long term consistent with
the preservation of principal by investing primarily in marketable investment
grade debt securities;
HIGH YIELD BOND FUND - seeks high current income by investing primarily in a
diversified portfolio of long term high-yield fixed income securities in the
medium to lower quality ranges; capital appreciation is a secondary objective;
such securities, which are commonly referred to as "junk" bonds, generally
involve greater risks of loss of income and principal than higher rated
securities (see accompanying Penn Series prospectus);
MONEY MARKET FUND - seeks to preserve capital, maintain liquidity and achieve
the highest possible level of current income consistent therewith, by investing
in high quality money market instruments; an investment in the Fund is neither
insured nor guaranteed by the U.S. Government and there can be no assurance
that the Fund will be able to maintain a stable net asset value of $1.00 per
share.
Independence Capital Management, Inc., Horsham, Pennsylvania, is investment
adviser to the Growth Equity, Quality Bond and Money Market Funds. OpCap
Advisors, New York, New York, is investment adviser to the Value Equity Fund.
T. Rowe Price Associates, Inc., Baltimore, Maryland, is investment adviser to
the Flexibly Managed and High Yield Bond Funds. Vontobel USA Inc., New York,
New York, is investment adviser to the International Equity Fund.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON PENN SERIES FUNDS, INC., SEE THE ATTACHED PENN SERIES
PROSPECTUS. INVESTORS SHOULD READ THE PENN SERIES PROSPECTUS CAREFULLY BEFORE
INVESTING.
9
<PAGE>
Under the Investment Company Act of 1940, as currently interpreted, Owners
and persons receiving annuity payments have the right to instruct Penn Mutual
as to the voting of shares of Penn Series Funds, Inc. held in the Separate
Account pursuant to the Contracts. The number of shares of a Fund for which
voting instructions may be given by an Owner is determined by dividing the
Owner's interest in the applicable subaccount of the Separate Account by the
net asset value per share of the Fund. The number of shares of a Fund for which
voting instructions may be given by a person receiving annuity payments is
determined by dividing the reserve allocated to the applicable subaccount by
the net asset value per share of the Fund. Should the applicable law, or
interpretations thereof, change so as to permit us to vote shares of the mutual
funds in our own right, we may elect to do so. Further, we reserve the right to
modify the manner in which we calculate the weight to be given to pass-through
voting instructions where such a change is necessary to comply with federal law
or interpretations thereof.
Shares of Penn Series are sold not only to the Separate Account, but also to
other separate accounts of Penn Mutual that fund benefits under variable
annuity and variable life insurance contracts. See "General Information" in the
Penn Series prospectus for a discussion of possible risks associated with the
sale of shares to other separate accounts.
- --------------------------------------------------------------------------------
THE CONTRACT
The Owner determines (1) the amount and frequency of the purchase payments to
be made to Penn Mutual, (2) the Funds of Penn Series Funds, Inc. in which the
purchase payments are invested, (3) transfers among subaccounts of the Separate
Account and to the fixed account provided under the Contract, (4) the form of
annuity to be paid after the accumulation period, (5) the beneficiary to whom
death benefits are to be paid, and (6) the amount and frequency of withdrawals
from the Participant's Variable Account Value.
During the annuity period, the person entitled to the annuity may transfer
annuity values among subaccounts of the Separate Account. Further, if the
annuity is for a specified number of years (under Option 1 in the Contract),
the person entitled to the annuity may withdraw the present value of annuity
payments remaining to be paid.
Upon death of the Participant prior to the Annuity Date, the beneficiary
will receive the death benefit in a lump sum (or in the form of an annuity
under some circumstances).
The Contracts may be amended at any time to conform to applicable laws or
governmental regulations. If, in our judgment, investment in any of the Penn
Series Funds becomes inappropriate to the purposes of the Contracts, we may,
with approval of the Securities and Exchange Commission and the governing state
insurance department, substitute another fund for existing and future
investments.
Owner inquiries may be made by writing The Penn Mutual Life Insurance
Company, Customer Service Group, Philadelphia, PA 19172. Or, you can call, toll
free, 1-800-523-0650.
- --------------------------------------------------------------------------------
PURCHASES
A completed application for participation in a Contract, together with a
check for the first purchase payment, is forwarded to our service office.
Normally, a completed application form received at our service office will be
accepted within two business days. If an incomplete application is not
completed and acted upon within five business days, the purchase payment will
be returned unless the Owner requests that we retain it while he or she
completes the application. All subsequent purchase payments are sent directly
to our service office.
The minimum purchase for a Participant is $25 (or such lesser amounts we may
establish). Total purchase payments in a calendar year for a Participant may
not exceed $1,000,000 without our consent.
Purchase payments are credited to a Participant's Variable Account in the
form of Accumulation Units of the subaccount selected. The number of
Accumulation Units credited is determined by dividing the purchase payment by
the value of the Accumulation Unit at the end of the valuation period in which
the purchase payment is received at our service office or, in a case of the
first purchase payment, is accepted by us.
The principal underwriter of the Contracts and Certificates (under federal
securities laws) is Hornor, Townsend & Kent, Inc., 600 Dresher Road, Horsham,
PA 19044 and CBL Equities, Inc., Twenty-Sixth Century Boulevard, Nashville, TN
37214. Hornor, Townsend & Kent, Inc. is a wholly owned subsidiary of Penn
Mutual. CBL Equities, Inc. is a wholly owned subsidiary of Willis Corroon
Corporation.
10
<PAGE>
- --------------------------------------------------------------------------------
ACCUMULATION UNITS
For each subaccount of the Separate Account the value of an Accumulation
Unit was set at $10 when the subaccount was established. The value of an
Accumulation Unit may increase or decrease from one valuation period to the
next.
A valuation period is the period from one valuation to the next. Valuation
is performed each day the New York Stock Exchange is open for trading.
The value of an Accumulation Unit for a valuation period is determined by
multiplying the value of an Accumulation Unit for the prior valuation period by
the net investment factor for the subaccount for the valuation period.
The net investment factor is a measure of (1) investment performance of Fund
shares held in the subaccount, (2) any taxes on income or gains from
investments held in the subaccount and (3) the mortality and expense risk
charges assessed against the subaccount. Under current law, no taxes are levied
against income or gain from investments held in a subaccount.
- --------------------------------------------------------------------------------
ANNUITY PAYMENTS
The Owner may choose (1) an annuity for a specified number of years (not
less than 5 or more than 30), (2) a life annuity, (3) a life annuity with
payments guaranteed for 10 or 20 years, (4) a joint and survivor annuity or (5)
such other form of annuity as we may agree upon. Annuity Payments do not start
until an annuity option is chosen by the Owner.
The level of the annuity payments are determined by various factors,
including the form of annuity chosen, the age and expected duration of the
annuity period, the performance of the applicable investment accounts, and the
annuity purchase rates and charges specified in the Contract.
The mortality and expense risk charges specified in the Contracts are
assessed during both the accumulation and annuity pay-out phases of the
Contract. We continue to assess the charges during payment of a variable
annuity not involving a life contingency although we no longer bear any
mortality risk on such payment obligation.
The annuity purchase rates assume an investment return of 4%. If the
investment return on a share of the applicable Penn Series Fund is greater than
4%, the level of the annuity payments increases. If the investment return is
less than 4%, the level of the annuity payments decreases.
The Annuity Date selected by the Owner may not be later than the first day
of the next month after the Annuitant's 85th birthday. Annuity payments will be
made on the first day of each month starting with the Annuity Date. The Owner
may change the annuity option or Annuity Date by giving written notice at our
service office at least 30 days prior to the Annuity Date.
If the Participant's Variable Account Value is less than $2,000, we may
elect to pay such amount in lump sum in place of an annuity. Annuity payments
generally are made monthly; however, if any payment would be less than $50, we
may change the frequency so that payments are at least $50 each.
- --------------------------------------------------------------------------------
PAYMENT ON DEATH
If the Participant dies prior to the Annuity Date, we will pay the
beneficiary the greater of the sum of all purchase payments, adjusted for
withdrawals and Contract transfers, or the Participant's Variable Account Value
for the valuation period in which proof of death and any other required
information needed to make payment is received at our service office. Payment
will be in a lump sum. In lieu of receiving a lump sum payment, the beneficiary
may elect an annuity option, provided that payment is made within five years or
payment commences within one year of death and is made over the beneficiary's
life or over a period not longer than the beneficiary's life expectancy. If the
beneficiary is the Participant's spouse, the beneficiary may elect an annuity
option that was available to the deceased Participant. "Proof of death" in the
foregoing means a death certificate or other official document establishing
death.
If the Participant dies on or after the Annuity Date and the annuity is for
a specified number of years or for life with payments guaranteed for 10 or 20
years, the beneficiary may elect to have the payments continue for the
specified or guaranteed period or to receive in lump sum the present value of
the remaining payments.
- --------------------------------------------------------------------------------
TRANSFERS
The Owner or person entitled to the annuity may transfer Accumulation and
Annuity Unit values from one subaccount of the Separate Account to another,
subject to a limit of four transfers during a calendar year.
11
<PAGE>
The Owner may transfer all or part of the Participant's Variable Account
Value to the fixed account provided under the Contract, subject to the
following conditions. No more than four such transfers may be made in a
calendar year. A written request (or, if authorized, a telephone request) must
be received at our service office, and all applicable requirements for transfer
must be met, prior to death of the Participant. No transfer may be made after
the thirtieth day before the Annuity Date. The minimum transfer amount is $250
and for a partial transfer the remaining balance in the Participant's Variable
Account must be $250. The Separate Account and Penn Mutual will not be liable
for following instructions communicated by telephone that we reasonably believe
to be genuine. We require certain personal identifying information to process a
telephone transfer.
The Owner may transfer amounts from the fixed account to the Participant's
Variable Account to the extent provided in the fixed account provisions of the
Contract.
- --------------------------------------------------------------------------------
WITHDRAWALS
Prior to the earlier of the death of the Participant or the Annuity Date,
the Owner may withdraw all or part of the Participant's Variable Account Value.
After the Annuity Date, an Owner who has chosen an annuity for a specified
number of years under Option 1 of the Contract (or other person receiving such
annuity), may withdraw the present value of the annuity. Withdrawals will be
based on values at the end of the valuation period in which the written request
for withdrawal (and the Certificate, in case of full withdrawal) are received
at our service office. Payment will normally be made within seven days of
receipt of the written request and the Certificate, if required. A partial
withdrawal must be at least $250 and the remaining Participant's Variable
Account Value must be at least $250.
With respect to Contracts qualifying under Section 403(b) of the Internal
Revenue Code, there are certain restrictions on withdrawals. Withdrawals
attributable to purchase payments made after December 31, 1988 pursuant to a
salary reduction agreement may be made only if the Owner is over the age of 59
1/2, leaves the employment of the employer, dies or becomes disabled as defined
in the Code. Withdrawals (other than withdrawals attributable to income earned
on purchase payments) may also be possible in the case of hardship as defined
in the Code. The restrictions do not apply to transfers among subaccounts and
may also not apply to transfers to other investments qualifying under Section
403(b). The restrictions on withdrawals under Section 403(b) Contracts are
imposed in reliance upon a no-action letter issued by the Chief of the Office
of Insurance Products and Legal Compliance of the Securities and Exchange
Commission to the American Council of Life Insurance dated November 28, 1988.
Penn Mutual will comply with the conditions set forth in that letter.
- --------------------------------------------------------------------------------
DEFERMENT OF PAYMENTS AND TRANSFERS
We reserve the right to defer a withdrawal, a transfer of values or annuity
payments if (a) the New York Stock Exchange is closed (other than customary
weekend and holiday closings); (b) trading on the Exchange is restricted; (c)
an emergency exists such that it is not reasonably practical to dispose of
securities held in the Separate Account or to determine the value of its
assets; or (d) the Securities and Exchange Commission by order so permits for
the protection of investors. Conditions described in (b) and (c) will be
decided by, or in accordance with rules of, the Commission.
- --------------------------------------------------------------------------------
DEDUCTIONS AND EXPENSES
Each year on the date specified in the Certificate (and on the date the
Participant's Variable Account Value is withdrawn in full if other than the
date specified), we deduct a variable account administration charge of $30 from
the Participant's Variable Account Value. This charge is made to reimburse us
for expenses relating to administration of the Contracts and is made by
canceling Accumulation Units credited to the Participant's Variable Account.
We deduct a daily expense risk charge equal to an annual rate of 0.5% of the
daily net asset value of the Separate Account. This charge is made to
compensate us for the risk of guaranteeing not to increase the contract
administration charge regardless of actual administrative costs.
We deduct a daily mortality risk charge equal to an annual rate of 0.75% of
the daily net asset value of the Separate Account (prior to September 10, 1990
the charge was 0.8%). This charge is to compensate us for the mortality
guarantees (e.g. guarantees that the annuity factors will never be decreased
even if mortality experience is substantially different than originally
assumed) we make under the Contract.
A contingent deferred sales charge may be deducted in the event of full or
partial withdrawal of the Participant's Variable Account Value or withdrawal of
the present value of remaining annuity payments. This charge is made to cover
sales expenses
12
<PAGE>
that we have incurred. Sales expenses which are not covered by the deferred
sales charge are paid from the surplus of Penn Mutual, which may include
proceeds from the expense and mortality risk charges.
If the contingent deferred sales charge applies, it will be 5% of the amount
withdrawn and will be made by canceling Accumulation Units credited to the
Participant's Variable Account. No charge will be made on a withdrawal if the
Participant has provided due proof of disability. Further, no charge will be
made on that portion of the first withdrawal made during an enrollment year
that does not exceed the following percentages of the sum of the Participant's
Variable Account Value and the Participant's fixed account value under the
Contract:
<TABLE>
<CAPTION>
PARTICIPANT'S
ENROLLMENT YEAR PERCENTAGE
-------------------------------------------
<S> <C>
Second through Seventh 10%
-------------------------------------------
Eighth 25%
-------------------------------------------
Ninth 50%
-------------------------------------------
Tenth 75%
-------------------------------------------
</TABLE>
No charge will be made on any withdrawal after the Participant has been
enrolled for ten years.
Some states and municipalities impose premium taxes on purchase payments
received by insurance companies. Any premium taxes payable will be deducted at
the Annuity Date. Currently, they range from 0% to 3.5%.
- --------------------------------------------------------------------------------
THE FIXED INTEREST OPTIONS
BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN PENN MUTUAL'S
GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940. THE GENERAL ACCOUNT AND ANY INTERESTS HELD IN
THE GENERAL ACCOUNT ARE THEREFORE NOT SUBJECT TO THE PROVISIONS OF THESE ACTS.
PENN MUTUAL HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT REVIEWED THE DISCLOSURE IN THIS PROSPECTUS RELATING TO THE
FIXED ACCOUNT. DISCLOSURE REGARDING THE FIXED ACCOUNT, HOWEVER, MAY BE SUBJECT
TO GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO
THE ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN THIS PROSPECTUS.
Owners of Contracts may allocate or transfer all or part of the
Participants' Variable Account to one or more of the following fixed interest
options in the Fixed Account: (1) the Fixed Holding Account; (2) the One Year
Guaranteed Account; and (3) the Three Year Guaranteed Account. The minimum
amount for an allocation to the Fixed Holding Account is $50; the minimum
amount for an allocation to the One Year Guaranteed Account or the Three Year
Guaranteed Account is $250. We periodically declare an effective annual
interest rate applicable to allocations to the various fixed interest options.
For each amount allocated to the Fixed Holding Account, interest will be
credited at an effective annual interest rate declared by us on the first day
of each calendar year. The declared rate of interest will apply through the end
of the calendar year in which an allocation is made to the Fixed Holding
Account at which time a new rate will be declared by Penn Mutual. For each
amount allocated to the One Year Guaranteed Account and the Three Year
Guaranteed Account, interest will be credited at an annual effective interest
rate declared by us each month. The declared rate of interest will apply
through the end of the twelve month and thirty-six month period, as applicable,
which begins on the first day of the calendar month in which the allocation is
made. We guarantee an effective annual rate of interest on allocations to all
fixed interest options of not less than 4%. In addition, rates declared during
the first seven contract years for the One Year Guaranteed Account will not be
less than the 52 week Treasury Bill discount rate obtained from the most recent
regularly scheduled auction.
Owners may transfer Fixed Account funds to the Separate Account or to
another fixed interest option within the Fixed Account, subject to the
conditions and limitations in the fixed account provisions of the Contract. A
premature withdrawal charge may be deducted from the interest earned on any
amount that is withdrawn from the Three Year Guaranteed Account during the
period for which an interest rate is guaranteed. In no event will the premature
withdrawal charge invade the Participant's principal investment in the
applicable fixed interest option. In accordance with state law, we may defer a
withdrawal or transfer from the Fixed Account for up to six months if we
reasonably determine that investment conditions are such that an orderly sale
of assets in Penn Mutual's general account is not feasible.
Participants under Contracts qualifying under Section 403(b) of the Internal
Revenue Code may be able to borrow against a portion of the amount credited to
them under the Contract, provided the loan privilege has been approved in the
applicable state. The loan will be made from the general account of Penn
Mutual. Because the prospectus generally is limited to describing the variable
portion of the Contract, you should review the Contract loan endorsement or
consult your Penn Mutual representative for a complete description of the terms
of the loan privilege, including minimum and maximum loan amounts,
13
<PAGE>
repayment terms, and restrictions on prepayments. The following paragraphs
describe how exercise of the loan privilege may relate to the Participant's
Variable Account Value.
First, at the time a contract loan is made and in accordance with the
Participant's direction, an amount equal to the initial loan amount will be
transferred from the Contract's investment options to an account in Penn
Mutual's general account called the "Restricted Account." Amounts transferred
from investment options to the Restricted Account will not participate in the
investment experience of those investment options. Amounts transferred to the
Restricted Account will generally earn interest at a rate 3 percentage points
less than the rate of interest charged on the loan.
Second, on the anniversary of the Participant's participation in the
Contract, the accrued interest in the Restricted Account will be transferred to
the Participant's investment options in accordance with the Participant's
current payment allocation instructions.
Third, loan repayments, which are due quarterly, will result in the transfer
of an amount equal to the principal portion of the repayment from the
Restricted Account to the Fixed Holding Account. Participant may then transfer
amounts from the Fixed Holding Account to the other investment options offered
under the Contract.
Fourth, if a payment or the entire loan is in default as defined in the
Contract, Penn Mutual will report the amount of the default to the Internal
Revenue Service as a taxable distribution and, if the Participant is under age
59 1/2, as a premature distribution. Subject to restrictions in Section 403(b)
of the Code, the amount of any missed payment, plus interest, or the entire
loan balance, plus interest, if the entire loan is in default, plus any
applicable contingent deferred sales charge, will be withdrawn by Penn Mutual
from the Contract's investment options in the following order: (a) Fixed
Holding Account; (b) One Year Guaranteed Account; (c) pro rata from the
Subaccounts of the Variable Account; and (d) Three Year Guaranteed Account. The
net proceeds from the withdrawal will be used to repay the loan. If a
withdrawal is restricted under the Code, the outstanding loan balance will
continue to accrue interest and the amount due will be withdrawn when a
withdrawal becomes permissible. Thus, when an event takes place which makes
withdrawal from the Contract permissible under the Code, such as attainment of
age 59 1/2, disability or death, the Contract will be checked to determine if
there is an outstanding loan balance for which one or more payments have been
missed. If so, funds necessary to pay the overdue amount, plus any applicable
contingent deferred sales charge, will be withdrawn from the Contract's
investment options in the order set forth in the preceding paragraph. While a
loan balance is outstanding, any withdrawal or death benefit proceeds must
first be used to pay the loan.
Loans are subject to the terms of the Contract, the Code and the Employee
Retirement Income Security Act of 1974, all of which may impose restrictions.
Penn Mutual reserves the right to suspend, modify or terminate the availability
of loans. Where there is a plan fiduciary, it is the responsibility of the
fiduciary to ensure that any Contract loans comply with plan qualification
requirements, including ERISA.
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS
The following brief discussion of federal income tax considerations is based on
the law in effect on the date of this prospectus. The Government Accounting
Office and the Treasury Department have submitted congressionally mandated
studies of the tax treatment of life insurance and annuities. Whether these
studies will result in any subsequent legislative changes in the tax treatment
of annuity contracts is uncertain. It is anticipated, however, that any
legislative changes will be prospective in nature.
Under current law, no federal income taxes are imposed on increases in the
value of a Participant's Variable Account until distribution occurs, either in
the form of a withdrawal or death benefit or as annuity payments under an
annuity option.
For a withdrawal or death benefit, the taxable portion is generally the
amount in excess of the cost basis of the Participant's Variable Account.
Amounts withdrawn by the Owner or received as a death benefit by the designated
beneficiary are treated first as taxable income to the extent of the excess of
the Participant's Variable Account Value over the purchase payments made by or
on behalf of the Participant. Such taxable portion is taxed at ordinary income
tax rates. Designation of a beneficiary who is either 37 1/2 years younger than
the Owner or a grandchild of the Owner may have Generation Skipping Transfer
Tax consequences under Section 2601 of the Internal Revenue Code.
For annuity payments, the taxable portion is generally determined by a
formula that establishes the ratio of the cost basis of the Participant's
Variable Account (as adjusted for any refund feature) to the expected return
under the Contract. The taxable portion, which is the amount of the annuity
payment in excess of the cost basis, is taxed at ordinary income tax rates.
An additional income tax of 10% may be imposed on the taxable portion of an
early withdrawal or distribution unless one of several exceptions apply. There
will be no additional income tax on early withdrawals which are part of a
series of substantially equal periodic payments (not less frequently than
annually) made for life (or life expectancy) of the taxpayer or the joint lives
(or joint life expectancies) of the taxpayer and a beneficiary, or on
withdrawals made on or after age 59 1/2. There
14
<PAGE>
also will be no additional tax on distributions made after death or on
withdrawals attributable to disability. Further, there will be no additional
tax on distributions within certain other exceptions to the general rule.
The transfer of a Participant's Variable Account for less than adequate
consideration may result in the transferor incurring tax. The taxable portion
would be the Participant's Variable Account Value at the time of transfer over
the investment in the Account at such time. This rule does not apply to
transfers between spouses or to transfers incident to a divorce.
Subject to certain exceptions, a Contract must be held by or on behalf of a
natural person in order to be treated as an annuity contract under federal
income tax law and to be accorded the tax treatment described in the preceding
paragraphs. If a Contract is not treated as an annuity contract for federal
income tax purposes, the income on the Contract is treated as ordinary income
received or accrued by the Contract Owner during the taxable year.
Section 817(h) of the Internal Revenue Code provides that the investments of
a separate account underlying a variable annuity contract which is not
purchased under a qualified retirement plan (or the investments of a mutual
fund, the shares of which are owned by the variable annuity separate account)
must be "adequately diversified" in order for the contract to be treated as an
annuity contract for tax purposes. The Treasury Department has issued
regulations prescribing such diversification requirements. The Separate
Account, through each of the Funds of Penn Series, intends to comply with those
requirements. The requirements are briefly discussed in the accompanying
prospectus for Penn Series.
The Treasury Department has indicated that in regulations or revenue rulings
under Section 817(d) (relating to the definition of a variable contract), it
will provide guidance on the extent to which contract owners may direct their
investments to particular subaccounts without being treated as owners of the
underlying shares. It is possible that when such regulations or rulings are
issued certain of the Contracts may need to be modified to comply with them.
The Contracts may be used in connection with retirement plans that qualify
for special tax treatment under the Code. The plans include individual
retirement annuities qualified under Section 408(b) of the Code (referred to as
IRAs), simplified employee pension plans qualified under Section 408(k) of the
Code, tax deferred annuities qualified under Section 403(b) of the Code, state
and local government deferred compensation plans qualified under Section 457 of
the Code, pension or profit sharing plans for self-employed individuals
qualified under Section 401 of the Code (referred to as H.R. 10 or Keogh plans)
and corporate pension or profit sharing plans qualified under Section 401 of
the Code, or annuity plans qualified under Section 403(a) of the Code. Special
provisions are required in some Contracts for qualification under the Code.
For some types of qualified retirement plans, there may be no cost basis in
the Contract. In this case, the total payments received may be taxable. Before
participating in a Contract under a qualified retirement plan, the tax law
provisions applicable to the particular plan should be considered.
Generally, under a nonqualified annuity or individual retirement annuity
qualified under Section 408(b), unless the Participant elects to the contrary,
any amounts that are received under the Contract that Penn Mutual believes are
includable in gross income for tax purposes will be subject to withholding to
meet federal income tax obligations. The same treatment will apply to
distributions from a qualified plan or Section 403(b) annuity that are payable
as an annuity for the life or life expectancy of one or more individuals, or
for a period of at least 10 years, or are required minimum distributions. Other
distributions from a qualified plan or a Section 403(b) annuity are subject to
mandatory 20% federal income tax withholding, unless an election is made to
make a direct transfer to another eligible retirement plan. (Depending upon
applicable State law, however, mandatory withholding may not apply to
distributions from a Section 403(b) annuity plan maintained by a State or local
government until 1994.) Distributions from a Section 457 deferred compensation
plan are wages subject to general income tax withholding requirements.
It should be understood that the foregoing description of federal income
taxes is not exhaustive and that special rules and considerations may be
applicable. For further information, a prospective purchaser should consult
qualified tax counsel.
15
<PAGE>
PART B
------
Information Required in a Statement
-----------------------------------
of Additional Information
-------------------------
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION -- MAY 1, 1997
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
THE PENN MUTUAL LIFE INSURANCE COMPANY
PHILADELPHIA, PA 19172 . TELEPHONE (215) 956-8000
- --------------------------------------------------------------------------------
This statement of additional information is not a prospectus. It should be
read in conjunction with the current prospectus for Penn Mutual Diversifier II
Variable/Fixed Contracts and Penn Mutual Diversifier II Variable Contracts or
the current prospectus for Penn Mutual Optimizer Group Variable and Fixed
Annuity Contracts, both dated May 1, 1997. The Contracts are funded through
Penn Mutual Variable Annuity Account III (referred to herein as the "Separate
Account"). To obtain a prospectus you may write to The Penn Mutual Life
Insurance Company, Customer Service Group, Philadelphia, PA 19172. Or, you may
call, toll free, 1-800-523-0650.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
VARIABLE ANNUITY PAYMENTS.................................................. B-2
First Variable Annuity Payment........................................... B-2
Subsequent Variable Annuity Payments..................................... B-2
Annuity Units............................................................ B-2
Value of Annuity Units................................................... B-2
Net Investment Factor.................................................... B-2
Assumed Interest Rate.................................................... B-3
Valuation Period......................................................... B-3
- --------------------------------------------------------------------------------
PERFORMANCE DATA........................................................... B-4
Average Annual Total Return.............................................. B-4
Annual Changes in Accumulation Unit Values............................... B-11
Yields (Money Market Fund)............................................... B-11
- --------------------------------------------------------------------------------
DISTRIBUTION OF CONTRACTS AND CERTIFICATES................................. B-12
- --------------------------------------------------------------------------------
CUSTODIAN.................................................................. B-12
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS.................................................... B-12
- --------------------------------------------------------------------------------
LEGAL MATTERS.............................................................. B-13
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS....................................................... B-13
- --------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE>
- --------------------------------------------------------------------------------
VARIABLE ANNUITY PAYMENTS
- --------------------------------------------------------------------------------
FIRST VARIABLE ANNUITY PAYMENT
The dollar amount of the first monthly annuity payment will be determined by
applying the net contract or variable account value to the annuity table set
forth in the contract for the annuity option chosen. The annuity tables show
the amount of the first monthly income payment under each annuity option for
each $1,000 of value applied. The annuity tables for the Diversifier II
Variable/Fixed Contracts are based on the 1983 Individual Annuity Mortality
Tables and the annuity tables for the Diversifier II Variable Contracts and the
Penn Mutual Optimizer Group Variable and Fixed Annuity Contracts are based on
the 1971 Individual Annuity Mortality Tables. The tables assume a rate of
interest of 4%. The amount of the first monthly income for each $1,000 of value
is shown at various ages.
The United States Supreme Court has ruled that life annuity payments under an
employer's retirement plan may not be based upon sex-distinct mortality tables.
Where this decision applies or where otherwise required by law, Penn Mutual
will provide annuity payments based upon unisex tables.
- --------------------------------------------------------------------------------
SUBSEQUENT VARIABLE ANNUITY PAYMENTS
The dollar amount of subsequent variable annuity payments will vary in
accordance with the investment experience of the subaccount(s) of the Separate
Account applicable to the annuity. Each subsequent variable annuity payment
will equal the number of annuity units credited, multiplied by the value of the
annuity unit for the valuation period. Penn Mutual guarantees that the amount
of each subsequent annuity payment will not be affected by variations in
expense or mortality experience.
- --------------------------------------------------------------------------------
ANNUITY UNITS
For each subaccount selected, the number of annuity units is the amount of
the first annuity payment allocated to the subaccount divided by the value of
an annuity unit for the subaccount on the annuity date. The number will not
change as a result of investment experience.
- --------------------------------------------------------------------------------
VALUE OF ANNUITY UNITS
For each subaccount selected, the value of an annuity unit was arbitrarily
set at $10 when the subaccount was established. The value may increase or
decrease from one valuation period to the next. For a valuation period, the
value of an annuity unit for a subaccount is the value of an annuity unit for
the subaccount for the last prior valuation period multiplied by the net
investment factor for the subaccount for the valuation period. The result is
then multiplied by a factor to neutralize the assumed interest rate of 4%
included in the annuity tables.
- --------------------------------------------------------------------------------
NET INVESTMENT FACTOR
For any subaccount the net investment factor for a valuation period is
determined by dividing (a) by (b) and subtracting (c):
Where (a) is:
The net asset value per share of the Fund held in the subaccount, as of the
end of the valuation period
plus
----
The per share amount of any dividend or capital gain distributions by the
Fund if the "ex-dividend" date occurs in the valuation period
plus or minus
-------------
A per share charge or credit, as we may determine as of the end of the
valuation period, for provision for taxes (if applicable).
B-2
<PAGE>
Where (b) is:
The net asset value per share of the Fund held in the subaccount as of the
end of the last prior valuation period
plus or minus
-------------
The per share charge or credit for provision for taxes as of the end of the
last prior valuation period (if applicable).
Where (c) is:
The sum of the daily expense risk charge and the daily mortality risk
charge. On an annual basis, the sum of such charges equals 1.25% of the
daily net asset value of the Separate Account.
- --------------------------------------------------------------------------------
ASSUMED INTEREST RATE
A 4% assumed annual interest rate is included in the annuity tables in the
contracts. A higher assumption would mean a higher first annuity payment but
more slowly rising and more rapidly falling subsequent payments. A lower
assumption would have the opposite effect. If the actual net investment rate is
4% on an annual basis, annuity payments will be level.
- --------------------------------------------------------------------------------
VALUATION PERIOD
Valuation period is the period from one valuation to the next. Valuation is
performed each day the New York Stock Exchange is open for trading.
B-3
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE DATA
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
The returns calculated below reflect a hypothetical return as if the Separate
Account had invested in the underlying funds for the indicated periods.
However, certain of the funds were not offered to the Separate Account until
the effective date of this registration statement.
Tables 1A, 1B, 1C and 1D show the average annual rates of total return on
hypothetical investments of $1,000, through the Separate Account, in Funds of
Penn Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger
and Berman Advisers Management Trust, Fidelity Investments' Variable Insurance
Products Fund, Variable Insurance Products Fund II and Morgan Stanley Universal
Funds, Inc., for periods ended December 31, 1996, and assume withdrawal of the
investments at the end of the period.
TABLE 1A -- DIVERSIFIER II VARIABLE/FIXED ANNUITY CONTRACTS
(ASSUMING NO PURCHASE PAYMENTS MADE AFTER FIRST CONTRACT YEAR)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 12/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a)...... 08/11/83 10.41% 8.29% 10.26% 10.35%
Nonqualified Plans (a)... 06/01/83 10.41% 8.29% 10.26% 10.12%
(Independence Capital
Management, Inc.)
Value Equity (a).......... 03/17/87 15.40% 14.39% N/A 11.70%
(OpCap)
Small Capitalization (a).. 03/01/95 10.76% N/A N/A 12.79%
(OpCap)
Flexibly Managed (a)...... 07/31/84 6.99% 10.85% 13.12% 13.34%
(T. Rowe Price Associ-
ates, Inc.)
International Equity (a).. 11/01/92 7.78% N/A N/A 11.95%
(Vontobel USA, Inc.)
Quality Bond (a).......... 03/17/87 -3.80% 5.05% N/A 6.62%
(Independence Capital
Management, Inc.)
High Yield Bond (a)....... 08/06/84 5.16% 9.09% 7.91% 8.91%
(T. Rowe Price Associ-
ates, Inc.)
Capital Appreciation Port-
folio (b)................ 11/20/87 -11.68% 3.90% N/A 9.17%
(American Century Invest-
ment Management, Inc.)
Balanced Portfolio (c).... 02/28/89 -1.21% 5.99% N/A 8.74%
(Neuberger & Berman)
Limited Maturity Bond (c). 09/10/84 -3.52% 3.41% 5.33% 6.94%
(Neuberger & Berman)
Partners Fund (c)......... 03/22/94 20.19% N/A N/A 18.53%
(Nerberger & Berman)
Equity Income (d)......... 10/09/86 5.64% 15.63% 12.17% 11.87%
(Fidelity Investments)
Growth Portfolio (d)...... 10/09/86 5.99% 12.98% 13.62% 13.30%
(Fidelity Investments)
Asset Manager (e)......... 09/06/89 6.02% 9.24% N/A 10.29%
(Fidelity Investments)
Index 500 (e)............. 08/27/92 13.82% N/A N/A 15.18%
(Fidelity Investments)
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Fidelity Investments' Variable Insurance Products Fund
(e) Fidelity Investments' Variable Insurance Products Fund II
B-4
<PAGE>
- --------------------------------------------------------------------------------
TABLE 1B -- DIVERSIFIER II VARIABLE/FIXED ANNUITY CONTRACTS
(ASSUMING PURCHASE PAYMENTS MADE AFTER FIRST CONTRACT YEAR)
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 12/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a).... 08/11/83 10.41% 8.18% 10.16% 10.35%
Nonqualified Plans (a). 06/01/83 10.41% 8.18% 10.16% 10.12%
(Independence Capital
Management, Inc.)
Value Equity (a)........ 03/17/87 15.40% 14.28% N/A 11.60%
(OpCap)
Small Capitalization
(a).................... 03/01/95 10.76% N/A N/A 12.79%
(OpCap)
Flexibly Managed (a).... 07/31/84 6.99% 10.74% 13.02% 13.34%
(T. Rowe Price Associ-
ates, Inc.)
International Equity
(a).................... 11/01/92 7.78% N/A N/A 11.83%
(Vontobel USA, Inc.)
Quality Bond (a)........ 03/17/87 -3.80% 4.96% N/A 6.52%
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 08/06/84 5.16% 8.99% 7.82% 8.91%
(T. Rowe Price Associ-
ates, Inc.)
Capital Appreciation
Portfolio (b).......... 11/20/87 -11.68% 3.81% N/A 9.06%
(American Century In-
vestment Management,
Inc.)
Balanced Portfolio (c).. 02/28/89 -1.21% 5.89% N/A 8.49%
(Neuberger & Berman)
Limited Maturity Bond
(c).................... 09/10/84 -3.52% 3.31% 5.23% 6.94%
(Neuberger & Berman)
Partners Fund (c)....... 03/22/94 20.19% N/A N/A 18.53%
(Neuberger & Berman)
Equity Income (d)....... 10/09/86 5.64% 15.52% 12.06% 11.87%
(Fidelity Investments)
Growth Portfolio (d).... 10/09/86 5.99% 12.88% 13.52% 13.30%
(Fidelity Investments)
Asset Manager (e)....... 09/06/89 6.02% 9.14% N/A 10.01%
(Fidelity Investments)
Index 500 (e)........... 08/27/92 13.82% N/A N/A 15.06%
(Fidelity Investments)
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Fidelity Investments' Variable Insurance Products Fund
(e) Fidelity Investments' Variable Insurance Products Fund II
B-5
<PAGE>
- --------------------------------------------------------------------------------
TABLE 1C -- DIVERSIFIER II VARIABLE CONTRACT
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 12/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a).... 08/11/83 12.86% 8.16% 10.05% 10.35%
Nonqualified Plans (a). 06/01/83 12.86% 8.16% 10.05% 10.12%
(Independence Capital
Management, Inc.)
Value Equity (a)........ 03/17/87 18.19% 14.44% N/A 11.51%
(OpCap)
Small Capitalization
(a).................... 03/01/95 13.21% N/A N/A 13.83%
(OpCap)
Flexibly Managed (a).... 07/31/84 9.23% 10.80% 12.95% 13.34%
(T. Rowe Price Associ-
ates, Inc.)
International Equity
(a).................... 11/01/92 10.05% N/A N/A 11.86%
(Vontobel USA, Inc.)
Quality Bond (a)........ 03/17/87 -1.97% 4.82% N/A 6.33%
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 08/06/84 7.52% 8.99% 7.66% 8.91%
(T. Rowe Price Associ-
ates, Inc.)
Capital Appreciation
Portfolio (b).......... 11/20/87 -9.95% 3.62% N/A 8.90%
(American Century In-
vestment Management,
Inc.)
Balanced Portfolio (c).. 02/28/89 0.67% 5.79% N/A 8.38%
(Neuberger & Berman)
Limited Maturity Bond
(c).................... 09/10/84 -1.68% 3.11% 5.01% 6.94%
(Neuberger & Berman)
Partners Fund (c)....... 03/22/94 23.28% N/A N/A 19.21%
(Neuberger & Berman)
Equity Income (d)....... 10/09/86 7.75% 15.71% 11.99% 11.87%
(Fidelity Investments)
Growth Portfolio (d).... 10/09/86 8.13% 12.99% 13.46% 13.30%
(Fidelity Investments)
Asset Manager (e)....... 09/06/89 8.15% 9.15% N/A 9.92%
(Fidelity Investments)
Index 500 (e)........... 08/27/92 16.48% N/A N/A 15.20%
(Fidelity Investments)
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
(b) American Century Variable Portfolios, Inc.
(c) Neuberger and Berman Advisers Management Trust
(d) Fidelity Investments' Variable Insurance Products Fund
(e) Fidelity Investments' Variable Insurance Products Fund II
B-6
<PAGE>
- --------------------------------------------------------------------------------
TABLE 1D -- PENN MUTUAL OPTIMIZER GROUP VARIABLE ANNUITY CONTRACT
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 12/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Quality Plans (a)...... 08/11/83 12.54% 7.88% 10.12% 10.35%
Nonqualified Plans (a). 06/01/83 12.54% 7.88% 10.12% 10.12%
(Independence Capital
Management, Inc.)
Value Equity (a)........ 03/17/87 17.62% 13.96% N/A 11.18%
(OpCap)
Flexibly Managed (a).... 07/31/84 9.06% 10.43% 12.98% 13.34%
(T. Rowe Price Associ-
ates, Inc.)
Quality Bond (a)........ 03/17/87 -1.95% 4.66% N/A 6.12%
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 08/06/84 7.19% 8.68% 7.78% 8.91%
(T. Rowe Price Associ-
ates, Inc.)
International Equity
(a).................... 11/01/92 9.85% N/A N/A 11.45%
(Vontobel USA, Inc.)
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc.
The average annual rates of total return shown in Tables lA, 1B, 1C and 1D
are computed by finding the average annual compounded rates of return over the
periods shown that would equate the initial amount invested to the withdrawal
value, in accordance with the following formula: P(1 + T)n = ERV. In the
formula, P is a hypothetical investment payment of $1,000; T is the average
annual total return; n is the number of years; and ERV is the withdrawal value
at the end of the periods shown. The contract or account administration charge
is prorated among the investment options available under the contract according
to the average number of contracts and accounts that have money allocated to
the investment option and the sum of the average number of contracts and
accounts that have money allocated to each of the investment options, except in
the case of the new Fidelity Investments' investment options offered under the
Diversifier II contracts. Since the Fidelity Investments' investment options
were not made available until May 1, 1995, the contract administrative charge
was pro-rated to those investment options by assuming that money and contracts
were allocated equally among all of the investment options.
B-7
<PAGE>
- --------------------------------------------------------------------------------
Table 2 shows the average annual rates of total return on hypothetical
investments of $1,000, through the Separate Account, in Funds of the Penn
Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger and
Berman Advisers Management Trust, Fidelity Investments' Variable Insurance
Products Fund, Variable Insurance Products Fund II and Morgan Stanley Universal
Funds, Inc., for periods ended December 31, 1996, and assumes the investments
are not withdrawn at the end of the period.
TABLE 2 -- DIVERSIFIER II VARIABLE/FIXED CONTRACTS
DIVERSIFIER II VARIABLE CONTRACTS
PENN MUTUAL OPTIMIZER GROUP VARIABLE AND FIXED ANNUITY CONTRACTS
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 12/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a).... 08/11/83 17.86% 8.88% 10.26% 10.35%
Nonqualified Plans (a). 06/01/83 17.86% 8.88% 10.26% 10.12%
(Independence Capital
Management, Inc.)
Value Equity (a)........ 03/17/87 23.19% 15.02% N/A 11.70%
(OpCap)
Small Capitalization
(a).................... 03/01/95 18.21% N/A N/A 16.24%
(OpCap)
Flexibly Managed (a).... 07/31/84 14.23% 11.46% 13.12% 13.34%
(T. Rowe Price Associ-
ates, Inc.)
International Equity
(a).................... 11/01/92 15.05% N/A N/A 12.69%
(Vontobel USA, Inc.)
Quality Bond (a)........ 03/17/87 2.68% 5.63% N/A 6.62%
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 08/06/84 12.25% 9.69% 7.91% 8.91%
(T. Rowe Price Associ-
ates, Inc.)
Capital Appreciation
Portfolio (b).......... 11/20/87 -5.73% 4.48% N/A 9.17%
(American Century In-
vestment Management,
Inc.)
Balanced Portfolio (c).. 02/28/89 5.44% 6.57% N/A 8.74%
(Neuberger & Berman)
Limited Maturity Bond
(c).................... 09/10/84 2.97% 3.98% 5.33% 6.94%
(Neuberger & Berman)
Partners Fund (c)....... 03/22/94 28.28% N/A N/A 20.52%
(Neuberger & Berman)
Equity Income (d)....... 10/09/86 12.75% 16.26% 12.17% 11.87%
(Fidelity Investments)
Growth Portfolio (d).... 10/09/86 13.13% 13.60% 13.62% 13.30%
(Fidelity Investments)
Asset Manager (e)....... 09/06/89 13.15% 9.84% N/A 10.29%
(Fidelity Investments)
Index 500 (e)........... 08/27/92 21.48% N/A N/A 15.91%
(Fidelity Investments)
</TABLE>
- -----------------------
* Represents the date the underlying Fund was established.
(a) Penn Series Funds, Inc. (some Funds not currently available to Penn Mutual
Optimizer Group Variable and Fixed Annuity Contracts).
(b) American Century Variable Portfolios, Inc. (not currently available to Penn
Mutual Optimizer Group Variable and Fixed Annuity Contracts).
(c) Neuberger and Berman Advisers Management Trust (not currently available to
Penn Mutual Optimizer Group Variable and Fixed Annuity Contracts).
(d) Fidelity Investments' Variable Insurance Products Fund (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
(e) Fidelity Investments' Variable Insurance Products Fund II (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
B-8
<PAGE>
- --------------------------------------------------------------------------------
Table 3 shows the average annual rates of total return on hypothetical
investments of $10,000, through the Separate Account, in Funds of the Penn
Series Funds, Inc., American Century Variable Portfolios, Inc., Neuberger and
Berman Advisers Management Trust and Fidelity Investments' Variable Insurance
Products Fund, Variable Insurance Products Fund II and Morgan Stanley Universal
Funds, Inc., for period ended December 31, 1996, and assumes the investments
are not withdrawn at the end of the period.
TABLE 3 -- DIVERSIFIER II VARIABLE/FIXED CONTRACTS
DIVERSIFIER II VARIABLE CONTRACTS
PENN MUTUAL OPTIMIZER GROUP VARIABLE AND FIXED ANNUITY CONTRACTS
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------------------------
FROM INCEPTION
INCEPTION ONE YEAR FIVE YEARS TEN YEARS DATE THROUGH
FUND (MANAGER) DATE* ENDED 12/31/96 ENDED 2/31/96 ENDED 12/31/96 12/31/96
- -------------- --------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a).... 08/11/83 18.22% 9.22% 10.51% 10.57%
Nonqualified Plans (a). 06/01/83 18.22% 9.22% 10.51% 10.34%
(Independence Capital
Management, Inc.)
Value Equity (a)........ 03/17/87 23.58% 15.35% N/A 11.99%
(OpCap)
Small Capitalization
(a).................... 03/01/95 18.25% N/A N/A 16.28%
(OpCap)
Flexibly Managed (a).... 07/31/84 14.85% 11.98% 13.48% 13.66%
(T. Rowe Price Associ-
ates, Inc.)
International Equity
(a).................... 11/01/92 15.37% N/A N/A 13.00%
(Vontobel USA, Inc.)
Quality Bond (a)........ 03/17/87 2.82% 5.76% N/A 6.73%
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 08/06/84 12.43% 9.84% 8.06% 9.03%
(T. Rowe Price Associ-
ates, Inc.)
Capital Appreciation
Portfolio (b).......... 11/20/87 -5.54% 4.65% N/A 9.31%
(American Century In-
vestment Management,
Inc.)
Balanced Portfolio (c).. 02/28/89 5.54% 6.66% N/A 8.81%
(Neuberger & Berman)
Limited Maturity Bond
(c).................... 09/10/84 3.00% 4.00% 5.35% 6.95%
(Neuberger & Berman)
Partners Fund (c)....... 03/22/94 28.43% N/A N/A 20.66%
(Neuberger & Berman)
Equity Income (d)....... 10/09/86 12.84% 16.34% 12.23% 11.94%
(Fidelity Investments)
Growth Portfolio (d).... 10/09/86 13.26% 13.71% 13.70% 13.38%
(Fidelity Investments)
Asset Manager (e)....... 09/06/89 13.17% 9.86% N/A 10.31%
(Fidelity Investments)
Index 500 (e)........... 08/27/92 21.63% N/A N/A 16.05%
(Fidelity Investments)
</TABLE>
- -----------------------
* Represents the date the underlying fund was established.
(a) Penn Series Funds, Inc. (some Funds not currently available to Penn Mutual
Optimizer Group Variable and Fixed Annuity Contracts).
(b) American Century Variable Portfolios, Inc. (not currently available to Penn
Mutual Optimizer Group Variable and Fixed Annuity Contracts)
(c) Neuberger and Berman Advisers Management Trust (not currently available to
Penn Mutual Optimizer Group Variable and Fixed Annuity Contracts).
(d) Fidelity Investments' Variable Insurance Products Fund (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
(e) Fidelity Investments' Variable Insurance Products Fund II (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
B-9
<PAGE>
The average annual rates of total return shown in Tables 2 and 3 are computed
by finding the average annual compounded rates of return over the periods shown
that would equate the initial amount invested to the Contract account value at
the end of the periods shown, in accordance with the following formula: P(1 +
T)n = FV. In the formula, P is a hypothetical investment of $1,000 in Table 2
and $10,000 in Table 3; T is the average annual total return; n is the number
of years; and FV is the Contract account value at the end of the periods shown.
The contract or account administration charge is prorated among the investment
options available under the contract according to the average number of
contracts and accounts that have money allocated to the investment option and
the sum of the average number of contracts and accounts that have money
allocated to each of the investment options, except in the case of the new
Fidelity Investments' investment options offered under the Diversifier II
contracts. Since the Fidelity Investments' investment options were not made
available until May 1, 1995, the contract administrative charge was pro-rated
to those investment options by assuming that money and contracts were allocated
equally among all of the investment options. The average annual rates of total
returns reflect all recurring charges, but do not reflect the contingent
deferred sales charge ranging from 7% to 1% in the case of the Diversifier II
Variable/Fixed Contracts or the contingent deferred sales charge of 5% in the
case of the Diversifier II Variable Contracts and the Penn Mutual Optimizer
Group Variable and Fixed Annuity Contracts which, if applicable, would reduce
the amount that may be withdrawn under the Contract.
B-10
<PAGE>
- --------------------------------------------------------------------------------
ANNUAL CHANGES IN ACCUMULATION UNIT VALUES
Table 4 shows the changes in values of accumulation units issued for each of
the Funds of the Penn Series Funds, Inc., American Century Variable Portfolios,
Inc., Neuberger and Berman Advisers Management Trust and Fidelity Investment's
Variable Insurance Product Fund and Fund II for each of the calendar years 1987
through 1996 for which the investment option was offered. Accumulation unit
values do not reflect the $30 annual contract or account administration charge
or the contingent deferred sales charge that may be applicable to a withdrawal
from the Contract. Changes in values of accumulation units for Funds added
after the commencement of 1996 are not included.
TABLE 4 -- DIVERSIFIER II VARIABLE/FIXED CONTRACTS
DIVERSIFIER II VARIABLE CONTRACT
PENN MUTUAL OPTIMIZER GROUP VARIABLE AND FIXED ANNUITY CONTRACTS
<TABLE>
<CAPTION>
ANNUAL RATE OF CHANGE IN ACCUMULATION UNIT VALUES
-------------------------------------------------------------------------
FUND (MANAGER) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- -------------- ----- ----- ----- ------ ----- ------ ------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Equity
Qualified Plans (a).... 18.27% 24.88% 9.26% -11.00% 4.60% -33.10% 12.30% 29.60% 11.30% 3.90%
Nonqualified Plans (a). 18.27% 24.88% 9.26% -11.00% 4.60% -3.10% 12.30% 29.60% 11.30% 3.90%
(Independence Capital
Management)
Value Equity (a)........ 23.63% 35.77% 1.65% 5.70% 13.40% 26.10% 9.30% -11.50% 27.90% --
(OpCap)
Small Capitalization
(a).................... 18.26% 11.71% N/A N/A N/A N/A N/A N/A N/A --
(OpCap)
Flexibly Managed (a).... 14.92% 20.76% 2.85% 14.40% 8.20% 20.10% 2.10% -19.60% 17.40% 22.10%
(T. Rowe Price
Associates, Inc.)
International Equity
(a).................... 15.41% 13.39% 7.47% -36.40% N/A N/A N/A N/A N/A N/A
(Vontobel USA, Inc.)
Quality Bond (a)........ 2.84% 18.65% 6.47% -10.30% 5.20% 14.20% 6.60% 11.30% 6.10% N/A
(Independence Capital
Management, Inc.)
High Yield Bond (a)..... 12.46% 14.97% 8.48% -18.30% 14.40% 35.20% -10.00% 1.90% -16.20% -2.0%
(T. Rowe Price Associ-
ates, Inc.)
Money Market (a)........ 3.69% 4.21% 2.43% 1.30% 1.80% 4.60% 5.60% 7.60% 5.80% 4.90%
(Independence Capital
Management, Inc.)
Capital Appreciation
Portfolio (b).......... 5.51% 29.47% -2.40% N/A N/A N/A N/A N/A N/A N/A
(American Century
Investment Management,
Inc.)
Balanced Portfolio (c).. 5.56% 22.22% -4.56% N/A N/A N/A N/A N/A N/A N/A
(Neuberger & Berman)
Limited Maturity Bond
(c).................... 3.01% 9.56% -1.39% N/A N/A N/A N/A N/A N/A N/A
(Neuberger & Berman)
Equity Income (d)....... 12.86% 19.20% N/A N/A N/A N/A N/A N/A N/A N/A
(Fidelity Investors Re-
search)
Growth (d).............. 13.28% 23.59% N/A N/A N/A N/A N/A N/A N/A N/A
(Fidelity Investors Re-
search)
Asset Manager (e)....... 13.18% 11.53% N/A N/A N/A N/A N/A N/A N/A N/A
(Fidelity Investors Re-
search)
</TABLE>
- -----------------------
(a) Penn Series Funds, Inc. (some Funds not currently available to Penn Mutual
Optimizer Group Variable and Fixed Annuity Contracts).
(b) American Century Variable Portfolios, Inc. (not currently available to
Penn Mutual Optimizer Group Variable and Fixed Annuity Contracts).
(c) Neuberger and Berman Advisers Management Trust (not currently available to
Penn Mutual Optimizer Group Variable and Fixed Annuity Contracts).
(d) Fidelity Investments' Variable Insurance Products Fund (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
(e) Fidelity Investments' Variable Insurance Products Fund II (not currently
available to Penn Mutual Optimizer Group Variable and Fixed Annuity
Contracts).
- --------------------------------------------------------------------------------
YIELDS (MONEY MARKET FUND)
The "yield" and "effective yield" of the Money Market Fund subaccount for the
seven days ended December 31, 1996 were 3.15% and 3.20%, respectively.
B-11
<PAGE>
The yield is computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical preexisting account having a balance of
one accumulation unit of the subaccount at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from Contract Owner
accounts, and dividing the difference by the value of the account at the
beginning of the base period to obtain the base period return, and then
multiplying the base period return by (365/7) with the resulting figure carried
to at least the nearest hundredth of 1%. The hypothetical charge reflects
deductions from Contract Owners' accounts in proportion to the length of the
base period. The contract or variable account administration charge is prorated
among investment options available under the contract. It is prorated according
to the average number of contracts or accounts that have money allocated to the
investment option in proportion to the sum of the average number of contracts
or accounts that have money allocated to each of the investment options
available under the same kind of contract.
The effective yield is obtained by taking the base period return as computed
above, and then compounding the base period return by adding 1, raising the sum
to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula: Effective Yield = [(base period return +
1)/365/7/] - 1.
The yields do not reflect the contingent deferred sales charge ranging from
7% to 1% in the case of the Diversifier II Variable/Fixed Contracts or 5% in
the case of the Diversifier II Variable Contracts and the Penn Mutual Optimizer
Group Variable and Fixed Annuity Contracts. The deferred sales charge may or
may not be applicable to a withdrawal from a Contract, depending on when the
withdrawal is made.
THE YIELDS ON AMOUNTS HELD IN THE MONEY MARKET SUBACCOUNT NORMALLY WILL
FLUCTUATE ON A DAILY BASIS. THEREFORE, THE STATED YIELDS FOR ANY GIVEN PERIOD
ARE NOT AN INDICATION OR REPRESENTATION OF FUTURE YIELDS.
--------------------------------
THE PERFORMANCE INFORMATION SET FORTH ABOVE IS FOR PAST PERFORMANCE AND IS
NOT AN INDICATION OR REPRESENTATION OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
DISTRIBUTION OF CONTRACTS AND CERTIFICATES
Hornor, Townsend & Kent, Inc. (formerly Penn Mutual Equity Services, Inc.), a
wholly owned subsidiary of Penn Mutual, serves as principal underwriter of the
combination variable and fixed annuity contracts and the variable annuity
contracts. The address of Hornor, Townsend & Kent, Inc. is 600 Dresher Road,
Horsham, PA 19044. For 1996, 1995 and 1994, Penn Mutual paid Hornor, Townsend &
Kent, Inc. underwriting commissions of $403,603.91, $357,316 and $396,927
respectively.
Hornor, Townsend & Kent, Inc. and CBL Equities, Inc. serve as principal
underwriters of certificates issued under the group variable and fixed annuity
contracts. CBL Equities, Inc. is a wholly owned subsidiary of Willis Corroon
Corporation. The address of CBL Equities, Inc. and Willis Corroon Corporation
is Twenty-Sixth Century Boulevard, Nashville, TN 37214. For 1995 and 1994, Penn
Mutual paid CBL Equities, Inc. underwriting commissions of approximately,
$19,896 and $25,064 respectively. For 1996, Penn Mutual paid no underwriting
commissions to CBL Equities, Inc.
Applications for combination variable and fixed annuity contracts and the
variable annuity contracts and for certificates issued under group variable and
fixed annuity contracts are solicited on a continuous basis by life insurance
agents of Penn Mutual. The life insurance agents are broker-dealers or
associated with broker-dealers under federal securities laws. Agents are paid
commissions. Other allowances and overrides may also be paid. Total commissions
paid on purchase payments made under the contracts will not exceed 6%.
- --------------------------------------------------------------------------------
CUSTODIAN
Penn Mutual is custodian of the assets held in the Separate Account.
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
The statement of assets and liabilities of Penn Mutual Variable Annuity Account
III as of December 31, 1996, and the related statement of operations for the
year then ended, and the statements of changes in net assets for each of the
two years or periods in the period then ended and the statutory statements of
financial condition of The Penn Mutual Life Insurance Company as of December
31, 1996 and 1995, and the related statutory statements of operations, surplus
and cash flows for the three years in the period ended December 31, 1996
included in this Statement of Additional Information have been audited by
Coopers & Lybrand L.L.P., independent accountants. The reports and the
financial statements have been included upon the authority of said firm as
experts in accounting and auditing.
B-12
<PAGE>
- --------------------------------------------------------------------------------
LEGAL MATTERS
Morgan, Lewis & Bockius LLP of Philadelphia, Pennsylvania, has provided advice
on certain matters relating to the federal securities laws and the offering of
the Contracts and Certificates.
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
The financial statements of the Separate Account and Penn Mutual are set forth
on the following pages. The financial statements of Penn Mutual should be
distinguished from the financial statements of the Separate Account and should
be considered only as bearing upon Penn Mutual's ability to meet its
obligations under the Contracts.
B-13
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE PENN MUTUAL LIFE INSURANCE COMPANY AND CONTRACT OWNERS
OF PENN MUTUAL VARIABLE ANNUITY ACCOUNT III:
We have audited the accompanying statement of assets and liabilities of the
Penn Mutual Variable Annuity Account III [comprising, respectively, Money
Market Fund, Quality Bond Fund, High Yield Bond Fund, Growth Equity Fund--
Qualified, Growth Equity Fund--Non-Qualified, Value Equity Fund, Flexibly
Managed Fund, Small Capitalization Fund, International Equity Fund, Balanced
Portfolio, Limited Maturity Bond Portfolio, Capital Appreciation Portfolio
(formerly TCI Growth Portfolio) Equity Income Portfolio, Growth Portfolio, and
Asset Manager Portfolio] as of December 31, 1996, and the related statement of
operations for the year then ended, and the statements of changes in net assets
for each of the two years or periods in the period then ended. These financial
statements are the responsibility of the management of Penn Mutual Variable
Annuity Account III. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1996 by
correspondence with the transfer agents. 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 Penn Mutual Variable Annuity
Account III as of December 31, 1996, the results of its operations for the year
then ended and its changes in net assets for each of the two years or periods
in the period then ended in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 7, 1997
B-14
<PAGE>
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1996
<TABLE>
<CAPTION>
GROWTH EQUITY
MONEY MARKET QUALITY BOND HIGH YIELD FUND
TOTAL FUND+ FUND+ BOND FUND+ QUALIFIED+
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT IN COMMON
STOCK:
Number of shares....... 22,338,989 3,161,674 3,895,794 3,288,732
Identified cost........ $705,813,655 $22,338,989 $32,364,847 $37,128,722 $62,064,559
ASSETS:
Investments at value... $820,018,580 $22,338,989 $31,616,743 $34,711,525 $70,576,187
Dividends receivable... 90,184 90,184 0 0 0
LIABILITIES:
Due to (from) The Penn
Mutual Life Insurance
Company............... 249,086 (6,950) 9,946 10,688 22,330
------------ ----------- ----------- ----------- -----------
NET ASSETS.............. $819,859,678 $22,436,123 $31,606,797 $34,700,837 $70,553,857
============ =========== =========== =========== ===========
Variable annuity accumu-
lation units........... 1,192,388 1,664,378 1,185,318 1,830,081
Accumulation unit val-
ues.................... $ 18.82 $ 18.99 $ 29.28 $ 38.55
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
GROWTH EQUITY
MONEY MARKET QUALITY BOND HIGH YIELD FUND
TOTAL FUND+ FUND+ BOND FUND+ QUALIFIED+
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 20,696,055 $ 1,024,770 $ 1,970,299 $ 2,531,187 $ 316,577
EXPENSE:
Mortality and expense
risk charges.......... 9,163,988 265,455 425,420 411,546 859,446
------------ ----------- ----------- ----------- -----------
Net investment income
(loss)................ 11,532,067 759,315 1,544,879 2,119,641 (542,869)
------------ ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS:
Realized gains (losses)
from redemption of
fund shares........... 773,663 0 150,371 118,824 396,588
Capital gains distribu-
tions................. 37,196,249 0 0 0 7,028,128
------------ ----------- ----------- ----------- -----------
Net realized gains..... 37,969,912 0 150,371 118,824 7,424,716
Net change in
unrealized apprecia-
tion (depreciation) of
investments........... 46,904,331 0 (824,626) 1,586,645 4,297,206
------------ ----------- ----------- ----------- -----------
Net realized and
unrealized gains
(losses) on
investments........... 84,874,243 0 (674,255) 1,705,469 11,721,922
------------ ----------- ----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULT-
ING FROM OPERATIONS... $ 96,406,310 $ 759,315 $ 870,624 $ 3,825,110 $11,179,053
============ =========== =========== =========== ===========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust.
+++ Investment in American Century Variable Portfolios, Inc. .(TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-15
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH EQUITY FLEXIBLY SMALL INTERNATIONAL LIMITED
FUND VALUE EQUITY MANAGED CAPITALIZATION EQUITY BALANCED MATURITY BOND
NON-QUALIFIED+ FUND+ FUND+ FUND+ FUND+ PORTFOLIO++ PORTFOLIO++
- -------------- ------------ ------------ -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
1,106,594 7,831,289 15,019,682 619,514 4,283,657 1,271,785 370,420
$21,436,832 $105,851,269 $237,979,433 $7,257,726 $57,559,236 $19,552,323 $5,348,005
$23,747,503 $151,300,503 $281,468,841 $7,762,509 $66,867,886 $20,246,811 $5,204,400
0 0 0 0 0 0 0
7,514 46,378 88,525 2,414 20,416 6,214 1,620
----------- ------------ ------------ ---------- ----------- ----------- ----------
$23,739,989 $151,254,125 $281,380,316 $7,760,095 $66,847,470 $20,240,597 $5,202,780
=========== ============ ============ ========== =========== =========== ==========
620,903 4,907,784 5,711,843 587,385 4,012,762 1,535,496 459,223
$ 38.23 $ 30.82 $ 49.26 $ 13.21 $ 16.66 $ 13.18 $ 11.33
- -------------------------------------------------------------------------------------------------
<CAPTION>
GROWTH EQUITY FLEXIBLY SMALL INTERNATIONAL LIMITED
FUND VALUE EQUITY MANAGED CAPITALIZATION EQUITY BALANCED MATURITY BOND
NON-QUALIFIED+ FUND+ FUND+ FUND+ FUND+ PORTFOLIO++ PORTFOLIO++
- -------------- ------------ ------------ -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 106,593 $ 1,663,053 $ 9,100,274 $ 42,157 $ 2,936,044 $ 444,255 $ 448,138
289,682 1,625,718 3,146,150 58,254 739,842 251,577 67,309
----------- ------------ ------------ ---------- ----------- ----------- ----------
(183,089) 37,335 5,954,124 (16,097) 2,196,202 192,678 380,829
----------- ------------ ------------ ---------- ----------- ----------- ----------
163,021 5,973 9,970 1,484 4,504 11,456 12,163
2,366,416 6,210,011 11,871,325 290,281 2,203,993 2,470,491 0
----------- ------------ ------------ ---------- ----------- ----------- ----------
2,529,437 6,215,984 11,881,295 291,765 2,208,497 2,481,947 12,163
1,444,325 20,554,315 16,655,730 511,160 4,008,191 (1,619,401) (235,270)
----------- ------------ ------------ ---------- ----------- ----------- ----------
3,973,762 26,770,299 28,537,025 802,925 6,216,688 862,546 (223,107)
----------- ------------ ------------ ---------- ----------- ----------- ----------
$ 3,790,673 $ 26,807,634 $ 34,491,149 $ 786,828 $ 8,412,890 $ 1,055,224 $ 157,722
=========== ============ ============ ========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-16
<PAGE>
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 1996 (CONT'D)
<TABLE>
<CAPTION>
CAPITAL
APPRECIATION EQUITY INCOME GROWTH ASSET MANAGER
PORTFOLIO+++ PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT IN COMMON
STOCK
Number of shares....... 2,833,733 1,598,747 1,178,494 285,842
Identified cost........ $ 27,573,607 $30,533,269 $34,415,869 $4,408,969
ASSETS:
Investments at value... $ 29,017,423 $33,621,652 $36,698,309 $4,839,299
Dividends receivable... 0 0 0 0
LIABILITIES:
Due to (from) The Penn
Mutual Life Insurance
Company............... 17,285 10,389 10,822 1,495
------------ ----------- ----------- ----------
NET ASSETS.............. $ 29,000,138 $33,611,263 $36,687,487 $4,837,804
============ =========== =========== ==========
Variable annuity accu-
mulation units........ 2,183,381 2,498,343 2,620,543 383,267
Accumulation unit val-
ues................... $ 13.28 $ 13.45 $ 14.00 $ 12.62
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 1996 (CONT'D.)
<CAPTION>
CAPITAL
APPRECIATION EQUITY INCOME GROWTH ASSET MANAGER
PORTFOLIO+++ PORTFOLIO++++ PORTFOLIO++++ PORTFOLIO++++
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 0 $ 15,452 $ 30,496 $ 66,760
EXPENSE:
Mortality and expense
risk charges.......... 387,639 279,844 314,679 41,427
------------ ----------- ----------- ----------
Net investment income
(loss)................ (387,639) (264,392) (284,183) 25,333
------------ ----------- ----------- ----------
REALIZED AND UNREALIZED
GAINS (LOSSES) ON
INVESTMENTS:
Realized gains (losses)
from redemption of
fund
shares................ (95,467) (2,032) (5,088) 1,896
Capital gains distribu-
tions................. 3,487,573 442,968 770,015 55,048
------------ ----------- ----------- ----------
Net realized gains..... 3,392,106 440,936 764,927 56,944
Net change in
unrealized apprecia-
tion (depreciation) of
investments........... (4,797,632) 2,674,214 2,293,958 355,516
------------ ----------- ----------- ----------
Net realized and
unrealized gains
(losses) on
investments........... (1,405,526) 3,115,150 3,058,885 412,460
------------ ----------- ----------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULT-
ING FROM OPERATIONS... $ (1,793,165) $ 2,850,758 $ 2,774,702 $ 437,793
============ =========== =========== ==========
</TABLE>
- -----------------------
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust.
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth Port-
folio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-17
<PAGE>
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
STATEMENTS OF CHANGES IN NET ASSETS FOR - THE YEARS ENDED DECEMBER 31, 1996 AND
1995
<TABLE>
<CAPTION>
TOTAL MONEY MARKET FUND+ QUALITY BOND FUND+
-------------------------- ------------------------- ------------------------
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 11,532,067 $ 8,441,912 $ 759,315 $ 648,003 $ 1,544,879 $ 1,562,124
Net realized gain
(loss) from
investment
transactions......... 37,969,912 24,670,608 0 0 150,371 71,119
Net change in
unrealized
appreciation
(depreciation) of
investments.......... 46,904,331 69,875,494 0 0 (824,626) 3,759,594
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net as-
sets resulting from
operations............ 96,406,310 102,988,014 759,315 648,003 870,624 5,392,837
------------ ------------ ------------ ----------- ----------- -----------
VARIABLE ANNUITY ACTIV-
ITIES:
Purchase payments
under variable
annuity contracts.... 251,158,386 77,587,218 27,162,076 8,771,642 6,765,457 2,453,615
Surrender benefits.... (50,680,346) (34,698,835) (4,072,749) (1,708,626) (3,808,199) (2,011,032)
Net transfers......... (80,968,012) 20,273,647 (20,416,508) (2,665,534) (6,221,731) (280,451)
Death benefits........ (2,139,229) (2,369,383) (142,708) (34,313) (115,236) (184,002)
Contract administra-
tion charges......... (743,327) (642,187) (17,054) (16,259) (29,245) (31,981)
Deferred sales
charges.............. (771,701) (672,390) (41,242) (27,491) (62,768) (47,106)
Annuity benefits...... (2,442,928) (1,281,020) (75,424) (59,711) (320,805) (189,666)
------------ ------------ ------------ ----------- ----------- -----------
Net increase (decrease)
in net assets result-
ing from variable an-
nuity activities...... 113,412,843 58,197,050 2,396,391 4,259,708 (3,792,527) (290,623)
------------ ------------ ------------ ----------- ----------- -----------
Total increase (de-
crease) in net as-
sets................ 209,819,153 161,185,064 3,155,706 4,907,711 (2,921,903) 5,102,214
NET ASSETS:
Beginning of period... 610,040,525 448,855,461 19,280,417 14,372,706 34,528,700 29,426,486
------------ ------------ ------------ ----------- ----------- -----------
END OF PERIOD......... $819,859,678 $610,040,525 $ 22,436,123 $19,280,417 $31,606,797 $34,528,700
============ ============ ============ =========== =========== ===========
<CAPTION>
GROWTH EQUITY FUND+ GROWTH EQUITY FUND+
HIGH YIELD BOND FUND+ QUALIFIED NON-QUALIFIED
-------------------------- ------------------------- ------------------------
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 2,119,641 $ 2,318,049 $ (542,869) $ (532,434) $ (183,089) $ (174,240)
Net realized gain
(loss) from
investment
transactions......... 118,824 128,692 7,424,716 8,927,236 2,529,437 2,876,393
Net change in
unrealized
appreciation
(depreciation) of
investments.......... 1,586,645 1,679,183 4,297,206 5,026,395 1,444,325 1,712,271
------------ ------------ ------------ ----------- ----------- -----------
Net increase in net as-
sets resulting from
operations............ 3,825,110 4,125,924 11,179,053 13,421,197 3,790,673 4,414,424
------------ ------------ ------------ ----------- ----------- -----------
VARIABLE ANNUITY ACTIV-
ITIES:
Purchase payments
under variable
annuity contracts.... 7,610,868 2,547,820 7,716,325 5,446,648 2,314,525 568,384
Surrender benefits.... (2,415,269) (2,132,204) (6,856,237) (5,623,602) (1,678,052) (995,989)
Net transfers......... (5,087,882) (1,838,084) (5,990,576) (3,202,517) (2,254,703) (572,409)
Death benefits........ (135,215) (11,530) (105,136) (186,731) (153,472) (125,564)
Contract administra-
tion charges......... (33,369) (35,262) (104,241) (111,047) (17,455) (17,899)
Deferred sales
charges.............. (34,353) (45,719) (118,248) (101,767) (21,783) (25,359)
Annuity benefits...... (137,094) (144,799) (86,906) (54,068) (37,834) (16,821)
------------ ------------ ------------ ----------- ----------- -----------
Net increase (decrease)
in net assets result-
ing from variable an-
nuity activities...... (232,314) (1,659,778) (5,545,019) (3,833,084) (1,848,774) (1,185,657)
------------ ------------ ------------ ----------- ----------- -----------
Total increase (de-
crease) in net as-
sets................ 3,592,796 2,466,146 5,634,034 9,588,113 1,941,899 3,228,767
NET ASSETS:
Beginning of period... 31,108,041 28,641,895 64,919,823 55,331,710 21,798,090 18,569,323
------------ ------------ ------------ ----------- ----------- -----------
END OF PERIOD......... $ 34,700,837 $ 31,108,041 $ 70,553,857 $64,919,823 $23,739,989 $21,798,090
============ ============ ============ =========== =========== ===========
</TABLE>
- -----------------------
(a) For the period from May 1, 1995 (date funds became available for investment
to contract owners) to December 31, 1995.
+ Investment in Penn Series Funds, Inc.
++ Investment in Newberger & Berman Advisers Management Trust
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth
Portfolio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-18
<PAGE>
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY-ACCOUNT III
STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1996 AND
1995 (CONT'D.)
<TABLE>
<CAPTION>
SMALL
VALUE EQUITY FUND+ FLEXIBLY MANAGED FUND+ CAPITALIZATION FUND+
---------------------------- ---------------------------- -------------------------
1996 1995 1996 1995 1996 1995(a)
------------- ------------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 37,335 $ 324,750 $ 5,954,124 $ 3,814,084 $ (16,097) $ 6,784
Net realized gain
(loss) from invest-
ment transactions.... 6,215,984 5,429,564 11,881,295 7,278,972 291,765 31,190
Net change in
unrealized
appreciation
(depreciation) of
investments.......... 20,554,315 20,695,460 16,655,730 22,379,827 511,160 (6,377)
------------- ------------- ------------- ------------- ------------ -----------
Net increase in net
assets resulting from
operations............ 26,807,634 26,449,774 34,491,149 33,472,883 786,828 31,597
------------- ------------- ------------- ------------- ------------ -----------
VARIABLE ANNUITY ACTIV-
ITIES:
Purchase payments un-
der variable annuity
contracts............ 35,030,873 8,872,997 64,098,837 28,450,036 6,357,984 560,354
Surrender benefits.... (8,798,687) (5,589,166) (15,678,381) (10,136,231) (209,690) (15,648)
Net transfers......... (6,534,934) 5,501,620 (11,363,445) 12,950,139 (698,991) 961,830
Death benefits........ (294,674) (618,712) (802,242) (906,304) 0 (85)
Contract administra-
tion charges......... (116,868) (96,737) (259,447) (220,042) (3,494) (328)
Deferred sales
charges.............. (104,693) (102,162) (230,482) (190,920) (2,503) (5)
Annuity benefits...... (327,102) (182,722) (899,490) (418,286) (7,754) 0
------------- ------------- ------------- ------------- ------------ -----------
Net increase (decrease)
in net assets result-
ing from variable an-
nuity activities...... 18,853,915 7,785,118 34,865,350 29,528,392 5,435,552 1,506,118
------------- ------------- ------------- ------------- ------------ -----------
Total increase (de-
crease) in net as-
sets................ 45,661,549 34,234,892 69,356,499 63,001,275 6,222,380 1,537,715
NET ASSETS:
Beginning of period... 105,592,576 71,357,684 212,023,817 149,022,542 1,537,715 0
------------- ------------- ------------- ------------- ------------ -----------
END OF PERIOD......... $ 151,254,125 $ 105,592,576 $ 281,380,316 $ 212,023,817 $ 7,760,095 $ 1,537,715
============= ============= ============= ============= ============ ===========
<CAPTION>
LIMITED MATURITY CAPITAL EQUITY INCOME
BOND PORTFOLIO++ APPRECIATION PORTFOLIO+++ PORTFOLIO++++
---------------------------- ---------------------------- -------------------------
1996 1995 1996 1995 1996 1995(a)
------------- ------------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)............... $ 380,829 $ 193,971 $ (387,639) $ (302,687) $ (264,392) $ 29,393
Net realized gain
(loss) from invest-
ment transactions.... 12,163 9,224 3,392,106 16,768 440,936 651
Net change in
unrealized
appreciation
(depreciation) of
investments.......... (235,270) 221,946 (4,797,632) 6,268,045 2,674,214 414,169
------------- ------------- ------------- ------------- ------------ -----------
Net increase in net
assets resulting from
operations............ 157,722 425,141 (1,793,165) 5,982,126 2,850,758 444,213
------------- ------------- ------------- ------------- ------------ -----------
VARIABLE ANNUITY ACTIV-
ITIES:
Purchase payments un-
der variable annuity
contracts............ 1,719,265 611,343 9,581,789 4,678,063 26,675,848 2,349,355
Surrender benefits.... (188,216) (1,263,358) (1,543,486) (1,740,845) (499,331) (19,798)
Net transfers......... (1,309,181) 670,831 (7,344,134) 2,162,323 (2,196,161) 4,164,428
Death benefits........ (26,031) (16,238) (98,132) (98,451) (24,282) (86)
Contract administra-
tion charges......... (3,677) (3,886) (35,108) (28,544) (14,190) (865)
Deferred sales
charges.............. (3,176) (7,582) (35,717) (44,419) (11,243) (45)
Annuity benefits...... (38,247) (27,852) (65,668) (30,932) (104,124) (3,214)
------------- ------------- ------------- ------------- ------------ -----------
Net increase (decrease)
in net assets result-
ing from variable an-
nuity activities...... 150,737 (36,742) 459,544 4,897,195 23,826,517 6,489,775
------------- ------------- ------------- ------------- ------------ -----------
Total increase (de-
crease) in net as-
sets................ 308,459 388,399 (1,333,621) 10,879,321 26,677,275 6,933,988
NET ASSETS:
Beginning of period... 4,894,321 4,505,922 30,333,759 19,454,438 6,933,988 0
------------- ------------- ------------- ------------- ------------ -----------
END OF PERIOD......... $ 5,202,780 $ 4,894,321 $ 29,000,138 $ 30,333,759 $ 33,611,263 $ 6,933,988
============= ============= ============= ============= ============ ===========
</TABLE>
- -----------------------
(a) For the period from May 1, 1995 (date funds became available for investment
to contract owners) to December 31, 1995.
+ Investment in Penn Series Funds, Inc.
++ Investment in Newberger & Berman Advisers Management Trust.
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth Port-
folio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
The accompanying notes are an integral part of these financial statements.
B-19
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND+ BALANCED PORTFOLIO++
- ------------------------------ -----------------------------
1996 1995 1996 1995
- ------------- ------------- ------------ ------------
<S> <C> <C> <C>
$ 2,196,202 $ 539,966 $ 192,678 $ 45,888
2,208,497 (181,261) 2,481,947 81,462
4,008,191 4,887,624 (1,619,401) 2,774,061
- ------------- ------------- ------------ ------------
8,412,890 5,246,329 1,055,224 2,901,411
- ------------- ------------- ------------ ------------
16,887,411 6,138,208 5,405,171 2,746,683
(2,870,226) (2,835,474) (1,105,007) (528,250)
(4,015,394) (5,032,885) (3,239,725) 928,069
(173,872) (65,950) (67,321) (121,242)
(65,435) (60,126) (20,861) (17,685)
(59,387) (65,303) (21,260) (13,775)
(178,697) (86,198) (101,428) (60,583)
- ------------- ------------- ------------ ------------
9,524,400 (2,007,728) 849,569 2,933,217
- ------------- ------------- ------------ ------------
17,937,290 3,238,601 1,904,793 5,834,628
48,910,180 45,671,579 18,335,804 12,501,176
- ------------- ------------- ------------ ------------
$ 66,847,470 $ 48,910,180 $ 20,240,597 $ 18,335,804
============= ============= ============ ============
</TABLE>
<TABLE>
<CAPTION>
GROWTH ASSET MANAGER
PORTFOLIO++++ PORTFOLIO++++
- ---------------------------- ----------------------------
1996 1995(a) 1996 1995(a)
- ------------ ----------- ----------- -----------
<S> <C> <C> <C>
$ (284,183) $ (26,504) $ 25,333 $ (5,235)
764,927 709 56,944 (111)
2,293,958 (11,518) 355,516 74,814
- ------------ ----------- ----------- -----------
2,774,702 (37,313) 437,793 69,468
- ------------ ----------- ----------- -----------
30,085,364 2,816,988 3,746,593 575,082
(859,014) (94,193) (97,802) (4,419)
(3,748,070) 5,857,679 (546,577) 668,608
(908) (90) 0 (85)
(20,135) (1,167) (2,748) (359)
(22,973) (737) (1,873) 0
(56,653) (5,993) (5,702) (175)
- ------------ ----------- ----------- -----------
25,377,611 8,572,487 3,091,891 1,238,652
- ------------ ----------- ----------- -----------
28,152,313 8,535,174 3,529,684 1,308,120
8,535,174 0 1,308,120 0
- ------------ ----------- ----------- -----------
$ 36,687,487 $ 8,535,174 $ 4,837,804 $ 1,308,120
============ =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-20
<PAGE>
- --------------------------------------------------------------------------------
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 1.
The significant accounting policies of Penn Mutual Variable Annuity Account
III (Account III) are as follows:
GENERAL - Account III was established by The Penn Mutual Life Insurance
Company (Penn Mutual) under the provisions of the Pennsylvania Insurance
Law. Penn Mutual has structured Account III as a unit investment trust
registered under the Investment Company Act of 1940. Account III offers
units to variable annuity contract owners to provide for the accumulation
of value and for the payment of annuities. The preparation of the
accompanying financial statements requires management to make estimates and
assumptions that affect the reported values of assets and liabilities as of
December 31, 1996 and the reported amounts from operations and contract
transactions during 1996 and 1995. Actual results could differ from those
estimates.
INVESTMENTS - Assets of Account III are invested in shares of Penn Series
Funds, Inc. (Penn Series): Money Market, Quality Bond, High Yield Bond,
Growth Equity, Value Equity, Flexibly Managed, International Equity Funds
and Small Capitalization Funds; Neuberger and
- --------------------------------------------------------------------------------
NOTE 2.
For the years ended December 31, 1996 and 1995, share transactions of
Account III were as follows:
<TABLE>
<CAPTION>
HIGH YIELD
MONEY MARKET FUND+ QUALITY BOND FUND+ BOND FUND+
------------------------- ---------------------- ----------------------
1996 1995 1996 1995 1996 1995
------------ ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 17,593,852 12,453,799 330,924 352,662 484,617 296,961
Shares received from re-
investment of:
Net investment income. 1,023,642 820,099 197,030 192,405 284,084 319,782
Capital gains distri-
bution............... 0 0 0 0 0 0
------------ ----------- ---------- ---------- ---------- ----------
Total shares acquired... 18,617,494 13,273,898 527,954 545,067 768,701 616,743
Shares redeemed......... (15,436,953) (8,418,094) (738,839) (427,974) (559,349) (537,976)
------------ ----------- ---------- ---------- ---------- ----------
Net increase (decrease)
in shares owned........ 3,180,541 4,855,804 (210,885) 117,093 209,352 78,767
Shares owned beginning
of period.............. 19,158,448 14,302,644 3,372,559 3,255,466 3,686,442 3,607,675
------------ ----------- ---------- ---------- ---------- ----------
Shares owned end of pe-
riod................... 22,338,989 19,158,448 3,161,674 3,372,559 3,895,794 3,686,442
============ =========== ========== ========== ========== ==========
Cost of shares acquired. $ 18,617,494 $13,273,898 $5,361,098 $5,531,251 $6,874,436 $5,272,237
============ =========== ========== ========== ========== ==========
Proceeds from shares re-
deemed................. $ 15,436,953 $ 8,418,094 $7,605,105 $4,256,372 $4,982,181 $4,611,481
============ =========== ========== ========== ========== ==========
<CAPTION>
INTERNATIONAL LIMITED MATURITY
EQUITY FUND+ BOND PORTFOLIO++ BALANCED PORTFOLIO++
------------------------- ---------------------- ----------------------
1996 1995 1996 1995 1996 1995
------------ ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........ 715,483 321,422 96,495 128,705 215,796 226,636
Shares received from re-
investment of:
Net investment income. 141,191 76,567 33,269 18,582 29,112 16,504
Capital gains distri-
bution............... 188,087 0 0 0 161,893 5,305
------------ ----------- ---------- ---------- ---------- ----------
Total shares acquired... 1,044,761 397,989 129,764 147,287 406,801 248,445
Shares redeemed......... (141,812) (528,180) (92,124) (135,944) (181,758) (63,375)
------------ ----------- ---------- ---------- ---------- ----------
Net increase (decrease)
in shares owned........ 902,949 (130,191) 37,640 11,343 225,043 185,070
Shares owned beginning
of period.............. 3,380,708 3,510,899 332,780 321,437 1,046,742 861,672
------------ ----------- ---------- ---------- ---------- ----------
Shares owned end of pe-
riod................... 4,283,657 3,380,708 370,420 332,780 1,271,785 1,046,742
============ =========== ========== ========== ========== ==========
Cost of shares acquired. $ 16,162,996 $ 5,475,849 $1,802,687 $2,108,317 $6,351,229 $4,080,178
============ =========== ========== ========== ========== ==========
Proceeds from shares re-
deemed................. $ 2,226,649 $ 6,940,160 $1,270,338 $1,950,836 $2,835,387 $1,021,029
============ =========== ========== ========== ========== ==========
</TABLE>
The cost of net redemptions is determined on a last-in, first-out basis.
- -----------------------
(a) For the period May 1, 1995 (date funds became available for investment to
contractholders) to December 31, 1995.
+ Investment in Penn Series Funds, Inc.
++ Investment in Neuberger & Berman Advisers Management Trust.
+++ Investment in American Century Variable Portfolios, Inc. (TCI Growth Port-
folio changed to Capital Appreciation Portfolio as of May 1, 1997).
++++ Investment in Fidelity Investments' Variable Insurance Products Funds I
and II.
- --------------------------------------------------------------------------------
NOTE 3.
Operations are charged for mortality and expense risks assumed by Penn Mutual
as determined daily at an annual rate of 1.25% of the average value of Account
III. As reimbursement for expenses incurred in administering the contract, Penn
Mutual receives $30 per year from each annuity contract prior to the contract's
date of maturity. The $30 charge is waived on certain contracts.
B-21
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTE 1., CONT'D.
Berman Advisers Management Trust (AMT): Limited Maturity Bond and Balanced
Portfolios; American Century Variable Portfolios, Inc. (American Century):
Capital Appreciation Portfolio; and Fidelity Investments' Variable
Insurance Products (Fidelity): Equity Income, Growth, and Asset Manager
Portfolios. Penn Series, AMT, American Century, and Fidelity are open-end
diversified investment companies. The shares are carried at market value as
determined by the underlying net asset value of the respective funds or
portfolios. Dividend income is recorded on the ex-dividend date. Investment
transactions are accounted for on a trade date basis.
FEDERAL INCOME TAXES - Penn Mutual is taxed under federal law as a life
insurance company. Account III is part of the Penn Mutual's total
operations and is not taxed separately. Under existing federal law, no
taxes are payable on investment income and realized gains of Account III.
<TABLE>
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
SMALL
CAPITALIZATION
GROWTH EQUITY FUND+ VALUE EQUITY FUND+ FLEXIBILITY MANAGED FUND+ FUND+
- ---------------------------- ----------------------- -------------------------- ----------------------
1996 1995 1996 1995 1996 1995 1996 1995(a)
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
169,060 165,899 1,164,470 706,599 2,076,707 1,909,325 485,158 138,561
19,719 17,339 86,079 91,497 485,607 353,198 3,365 1,082
437,770 571,396 321,429 332,378 633,475 417,253 23,236 2,844
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
626,549 754,634 1,571,978 1,130,474 3,195,789 2,679,776 511,759 142,487
(567,813) (456,843) (227,840) (275,894) (363,469) (304,008) (32,572) (2,160)
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
58,736 297,791 1,344,138 854,580 2,832,320 2,375,768 479,187 140,327
4,336,590 4,038,799 6,487,151 5,632,571 12,187,362 9,811,594 140,327 0
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
4,395,326 4,336,590 7,831,289 6,487,151 15,019,682 12,187,362 619,514 140,327
============= ============= =========== ========== ============ ============ ========== ==========
$ 13,550,324 $ 15,244,644 $29,281,270 $9,472,800 $ 59,505,713 $ 45,850,893 $6,110,211 $1,567,584
============= ============= =========== ========== ============ ============ ========== ==========
$ 12,259,901 $ 9,537,239 $ 4,151,661 $4,688,111 $ 6,762,719 $ 5,227,508 $ 397,931 $ 23,250
============= ============= =========== ========== ============ ============ ========== ==========
<CAPTION>
CAPITAL EQUITY ASSET
APPRECIATION PORTFOLIO+++ INCOME PORTFOLIO++++ GROWTH PORTFOLIO++++ MANAGER PORTFOLIO++++
- ---------------------------- ----------------------- -------------------------- ----------------------
1996 1995 1996 1995(a) 1996 1995(a) 1996 1995(a)
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
412,781 544,314 1,248,554 362,089 879,192 294,937 220,911 83,857
0 2,462 819 2,757 1,098 0 4,421 0
326,246 0 23,487 0 27,718 0 3,646 0
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
739,027 546,776 1,272,860 364,846 908,008 294,937 228,978 83,857
(420,995) (143,709) (34,010) (4,949) (21,860) (2,591) (25,995) (998)
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
318,032 403,067 1,238,850 359,897 886,148 292,346 202,983 82,859
2,515,701 2,112,634 359,897 0 292,346 0 82,859 0
- ------------- ------------- ----------- ---------- ------------ ------------ ---------- ----------
2,833,733 2,515,701 1,598,747 359,897 1,178,494 292,346 285,842 82,859
============= ============= =========== ========== ============ ============ ========== ==========
$ 8,096,102 $ 6,094,633 $24,711,104 $6,606,484 $ 26,546,059 $ 8,622,762 $3,580,092 $1,248,666
============= ============= =========== ========== ============ ============ ========== ==========
$ 4,525,040 $ 1,497,448 $ 696,843 $ 86,095 $ 673,136 $ 75,436 $ 406,541 $ 15,032
============= ============= =========== ========== ============ ============ ========== ==========
</TABLE>
- -------------------------------------------------------------------------------
NOTE 3. CONT'D.
If a policy is surrendered within the first 11 years, a contingent deferred
sales charge may be assessed. This charge will be deducted before any
surrender proceeds are paid. See original contract documents for special
charges assessed.
B-22
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES OF
THE PENN MUTUAL LIFE INSURANCE COMPANY
PHILADELPHIA, PENNSYLVANIA
We have audited the accompanying statutory statements of financial condition of
The Penn Mutual Life Insurance Company as of December 31, 1996 and 1995, and
the related statutory statements of operations, surplus and cash flows for the
three years in the period ended December 31, 1996. These statutory 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.
As described more fully in Note 1 to the financial statements, the Company
prepared these financial statements using accounting practices prescribed or
permitted by the Insurance Department of the Commonwealth of Pennsylvania
(SAP), which practices differ from generally accepted accounting principles
(GAAP). The effects on the financial statements of the variances between SAP
and GAAP are described in Note 1 to the financial statements.
In our report dated January 26, 1996, we expressed our opinion that the 1995
and 1994 financial statements, prepared using SAP, presented fairly, in all
material respects, the financial position of The Penn Mutual Life Insurance
Company as of December 31, 1995, and the results of its operations, and its
cash flows for the two years then ended in conformity with GAAP. As described
in Note 1 to the financial statements, financial statements of mutual life
insurance enterprises issued or reissued after 1996, which are prepared in
accordance with SAP, are no longer considered to be presented in conformity
with GAAP. Accordingly, our present opinion on the 1995 and 1994 financial
statements as presented herein is different from that expressed in our previous
report.
In our opinion, because of the effects of the matter discussed in the second
preceding paragraph, the financial statements referred to above do not present
fairly, in conformity with GAAP, the financial position of The Penn Mutual Life
Insurance Company as of December 31, 1996 and 1995, or the results of its
operations or its cash flows for the three years in the period ended December
31, 1996.
In our opinion, the statutory financial statements referred to above present
fairly, in all material respects, the financial condition of The Penn Mutual
Life Insurance Company as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the three years in the period ended December
31, 1996, on the basis of accounting described in Note 1.
As discussed in Note 2 to the financial statements, during 1995, the Company
changed its accounting method for certain components of the federal income tax
expense. Also as discussed in Note 2, in 1996 and 1995, the Company changed the
reserve valuation basis for disability income and certain annuity contracts,
respectively.
Coopers & Lybrand L.L.P
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 28, 1997
B-23
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
DECEMBER 31, 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
(in thousands of dollars)
ASSETS
Bonds.................................................... $4,541,972 $3,695,516
Stocks
Preferred............................................... 13,042 15,049
Common--affiliated...................................... 205,574 171,193
--unaffiliated.................................... 160 8,182
Mortgage loans........................................... 117,046 960,692
Real estate.............................................. 99,575 138,329
Policy loans............................................. 409,344 422,865
Cash and short-term investments.......................... 14,532 75,962
Other invested assets.................................... 76,500 59,561
---------- ----------
TOTAL CASH AND INVESTED ASSETS.......................... 5,477,745 5,547,349
Investment income due and accrued........................ 83,573 94,350
Premiums due and deferred................................ 25,297 26,926
Other assets............................................. 36,479 41,082
Separate account assets.................................. 1,225,038 911,683
---------- ----------
TOTAL ASSETS............................................ $6,848,132 $6,621,390
========== ==========
LIABILITIES
Reserves and funds for payment of future life and annuity
benefits................................................ $4,948,254 $5,064,298
Dividends to policyholders payable in the following year. 69,445 72,653
Policy claims in process................................. 25,626 27,241
Interest maintenance reserve............................. 18,716 36,084
Asset valuation reserve.................................. 77,408 83,157
Other liabilities........................................ 103,871 77,063
Separate account liabilities............................. 1,225,038 905,960
---------- ----------
TOTAL LIABILITIES....................................... 6,468,358 6,266,456
---------- ----------
SURPLUS
Special surplus funds.................................... 1,629 1,576
Unassigned surplus....................................... 378,145 353,358
---------- ----------
TOTAL................................................... 379,774 354,934
---------- ----------
TOTAL LIABILITIES AND SURPLUS.......................... $6,848,132 $6,621,390
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-24
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS AND SURPLUS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1996 1995 1994
- ---------------------------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C> <C>
INCOME
Premium and annuity considerations.......... $ 641,183 $ 710,442 $ 771,547
Net investment income....................... 455,278 456,108 446,354
Other income................................ 3,340 (5,632) 10,497
---------- ---------- ----------
TOTAL INCOME............................... 1,099,801 1,160,918 1,228,398
---------- ---------- ----------
BENEFITS AND EXPENSES
Benefits paid to policyholders and benefi-
ciaries.................................... 816,583 859,798 766,598
Increase (decrease) in reserves and funds
for payment of future life and annuity
benefits................................... (135,705) (50,775) 54,380
Commissions................................. 37,487 38,044 45,579
Operating expenses.......................... 110,194 116,673 124,920
Net transfers to separate accounts.......... 125,532 86,944 128,773
---------- ---------- ----------
TOTAL BENEFITS AND EXPENSES................ 954,091 1,050,684 1,120,250
---------- ---------- ----------
INCOME FROM OPERATIONS BEFORE DIVIDENDS AND
FEDERAL INCOME TAXES...................... 145,710 110,234 108,148
Dividends to policyholders.................. 65,996 70,057 69,098
---------- ---------- ----------
INCOME FROM OPERATIONS BEFORE FEDERAL IN-
COME TAXES................................ 79,714 40,177 39,050
Federal income tax expense (benefit)........ 13,073 (52,442) 197
---------- ---------- ----------
INCOME FROM OPERATIONS..................... 66,641 92,619 38,853
Net realized capital losses, net of taxes... 40,736 91,890 37,399
---------- ---------- ----------
NET INCOME................................. 25,905 729 1,454
SURPLUS
Change in asset valuation reserve........... 5,749 28,728 29,060
Change in net unrealized capital gains and
losses..................................... 5,433 2,395 (3,376)
Changes in accounting methods, net of taxes. (14,773) 7,984 --
Other....................................... 2,526 (223) 8,618
---------- ---------- ----------
TOTAL CONTRIBUTION TO SURPLUS.............. 24,840 39,613 35,756
Surplus, Beginning of Year................. 354,934 315,321 279,565
---------- ---------- ----------
SURPLUS, END OF YEAR....................... $ 379,774 $ 354,934 $ 315,321
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-25
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1996 1995 1994
- ---------------------------------------------------------------------------------
(in thousands of dollars)
<S> <C> <C> <C>
CASH PROVIDED
Net cash from operations:
Premium and annuity considerations.......... $ 642,997 $ 708,301 $ 767,017
Net investment income....................... 429,532 439,508 420,917
Other income................................ 76,756 (2,511) 15,704
---------- ---------- ----------
1,149,285 1,145,298 1,203,638
Benefits to policyholders................... 816,297 871,983 750,019
Commissions................................. 37,456 38,139 45,540
Operating expenses and taxes................ 107,115 152,907 96,050
Net transfers to separate accounts.......... 165,495 86,944 129,858
Dividends to policyholders.................. 69,204 69,804 70,246
Net decrease in policy loans................ (12,884) (15,202) (22,361)
---------- ---------- ----------
NET CASH FROM OPERATIONS................... (33,398) (59,277) 134,286
---------- ---------- ----------
Investments sold, matured or repaid:
Bonds....................................... 1,079,993 1,410,126 1,038,593
Stocks...................................... 27,131 95,347 197,503
Mortgage loans.............................. 819,237 102,394 45,255
Real estate and other invested assets....... 36,968 10,837 12,701
---------- ---------- ----------
Total investments sold, matured or repaid.. 1,963,329 1,618,704 1,294,052
Taxes on realized investment gains........... (3,694) 3,253 (17,722)
Other cash provided.......................... 5,852 4,275 10,035
---------- ---------- ----------
1,965,487 1,626,232 1,286,365
---------- ---------- ----------
TOTAL CASH PROVIDED........................ 1,932,089 1,566,955 1,420,651
---------- ---------- ----------
CASH APPLIED
Cost of investments acquired:
Bonds....................................... 1,916,791 1,357,008 1,218,880
Stocks...................................... 15,035 26,114 131,248
Mortgage loans.............................. 38,768 100,466 71,427
Real estate and other invested assets....... 17,456 8,970 14,909
---------- ---------- ----------
Total cost of investments acquired......... 1,988,050 1,492,558 1,436,464
Other cash applied........................... 5,469 6,231 24,452
---------- ---------- ----------
TOTAL CASH APPLIED......................... 1,993,519 1,498,789 1,460,916
---------- ---------- ----------
Net change in cash and short-term invest-
ments....................................... (61,430) 68,166 (40,265)
Cash and short-term investments:
Beginning of year........................... 75,962 7,796 48,061
---------- ---------- ----------
END OF YEAR................................. $ 14,532 $ 75,962 $ 7,796
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-26
<PAGE>
- -------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(IN THOUSANDS OF DOLLARS)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
NATURE OF OPERATIONS
The Penn Mutual Life Insurance Company (the "Company"), is a mutual life
insurance company which concentrates primarily in the sale of individual life
insurance and annuity products. The primary products that the Company
currently markets are traditional whole life, yearly renewable term, universal
life, variable life, immediate annuities and deferred annuities, both fixed
and variable. The Company markets its products through a network of career
agents, independent agents, and independent marketing organizations. The
Company sells its products in all fifty states and the District of Columbia.
BASIS OF PRESENTATION
The financial statements of the Company have been prepared in conformity with
accounting principles prescribed or permitted by the Insurance Department of
the Commonwealth of Pennsylvania (SAP). Prescribed SAP include state laws,
regulations, and general administrative rules, as well as a variety of
publications of the National Association of Insurance Commissioners (NAIC).
Permitted SAP encompass all accounting practices that are not prescribed.
These principles were considered to be in conformity with generally accepted
accounting principles (GAAP) prior to the issuance of Financial Accounting
Standards Board Interpretation No. 40, "Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and other Enterprises," (FIN
No. 40) and Statement of Financial Accounting Standards (SFAS) No. 120,
"Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long-Duration Participating Contracts".
Effective for fiscal years beginning after December 15, 1995, in accordance
with FIN No. 40, the financial statements of mutual life insurance companies
which are prepared on the basis of SAP can no longer be described as prepared
in conformity GAAP. Therefore, as required by generally accepted auditing
standards, the opinion expressed by our independent accountants on the 1995
and 1994 financial statements is different from that expressed in their
previous report.
In financial statements prepared in conformity with SAP, the accounting
treatment of certain items is different than for financial statements issued
in conformity with GAAP. Significant differences include:
. Policy acquisition costs, such as commissions and other costs incurred in
connection with acquiring new and renewal business, are expensed when in-
curred; under GAAP, such costs are deferred and amortized over the expected
premium paying period.
. Premiums for universal life and investment-type products are recognized as
revenue when due; under GAAP, they are accounted for as deposits and ex-
cluded from revenue.
. Policy reserves are based on statutory mortality and interest requirements
and without consideration of withdrawals and are reported net of reinsurance
reserve credits; under GAAP, the reserves are based on expected investment
yield, mortality and withdrawals and are reported gross of reinsurance re-
serve credits. Changes in reserves on account of change in valuation basis
during the year are charged directly to surplus rather than reflected in the
net gain from operations, as is the case under GAAP.
. No provision is made for deferred income taxes; under GAAP, deferred taxes
result from temporary differences between the tax basis of assets and lia-
bilities and their reported amounts in the financial statements.
. An asset valuation reserve (AVR) is established as a liability to offset po-
tential investment losses and changes in the AVR are charged or credited to
surplus; under GAAP, reserves are established for invested assets based on
evaluation of impairment and are recorded through realized gains/(losses).
. An interest maintenance reserve (IMR) is established as a liability to cap-
ture gains and losses, net of tax, on the sale of fixed maturities resulting
from changes in the general level of interest rates; no such reserve is re-
quired under GAAP.
. Investments in bonds and preferred stocks are generally carried at amortized
cost; under GAAP, investments in bonds and preferred stocks, other than
those classified as held to maturity, are carried at fair value.
. Certain assets, designated as nonadmitted, are excluded from assets by a di-
rect charge to surplus; under GAAP, such assets are carried on the statement
of financial condition with appropriate valuation allowances.
B-27
<PAGE>
- -------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
. Pension expense for the qualified noncontributory pension plan (Plan) is
recognized when pension contributions are deductible for federal income tax
purposes, rather than incurred over the service lives of employees partici-
pating in the Plan, as is the case under GAAP.
. Postretirement benefits are recognized for vested employees and current re-
tirees, rather than accruing an obligation over the service period for all
eligible employees, as is the case under GAAP.
. In accordance with Pennsylvania Insurance Laws and Regulations, the Company's
subsidiaries are not consolidated for statutory filing purposes; under GAAP,
majority-owned subsidiaries are consolidated.
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
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.
VALUATION OF INVESTMENTS
Bonds and stocks are carried in the accompanying Statements of Financial
Condition at values prescribed by the NAIC. In general, bonds are stated at
amortized cost, preferred stocks at cost and unaffiliated common stocks at
market value. The Company's subsidiaries are carried on the equity basis with
the net income from subsidiaries recorded in net investment income. Real
estate is carried at cost less encumbrances and accumulated depreciation. Real
estate acquired through foreclosure is recorded at the lower of cost or market
value at the time of foreclosure. Real estate is depreciated using the
straight-line method. Mortgage loans are carried at the unpaid principal
amount, less any unamortized discount. Policy loans are stated at the unpaid
principal balance less amounts unsecured by cash surrender and dividend
accumulation values. Cash and short-term investments include cash on deposit
and securities purchased with a maturity date of less than one year. Short-
term investments are valued at cost, which approximates market. Other invested
assets include joint venture real estate partnerships, which are valued on the
equity basis, and venture capital limited partnerships, which are carried at
market value. Certain assets which are considered to be non-admitted for
statutory purposes have been excluded from the Statement of Financial
Condition by a direct charge to surplus.
Financial instruments utilized to hedge the Company's assets are recorded
using a valuation method consistent with the valuation method of the assets
hedged. Gains and losses on financial futures contracts used as hedges against
interest rate fluctuations are deferred and recognized in the Statements of
Operations over the remaining life of the hedged securities. Changes in the
market value of financial futures contracts used as hedges against market
fluctuations of equity securities are reported as unrealized gains or losses.
They are recognized as realized gains or losses when the hedged securities are
sold.
Statutory accounting principles require insurance companies to hold an Asset
Valuation Reserve (AVR) and an Interest Maintenance Reserve (IMR). The purpose
of the AVR is to maintain consistent and prescribed valuation reserves for
invested assets. Changes in the AVR are recorded directly to surplus. The
purpose of the IMR is to defer recognition of realized gains and losses which
result from interest rate movements and to amortize these gains and losses
into income over the original expected life of the investment sold.
Amortization of gains and losses included in the IMR are reflected as a
component of net investment income.
Realized gains and losses are determined on the specific identification method
and presented in the Statements of Operations net of taxes and excluding net
gains and losses transferred to the IMR. Unrealized gains and losses are
accounted for as direct increases or decreases to surplus.
RESERVES AND FUNDS FOR THE PAYMENT OF FUTURE LIFE AND ANNUITY BENEFITS
Reserves and funds for the payment of future life and annuity benefits are
developed using actuarial methods based on statutory mortality and interest
requirements. Reserves for life insurance are computed principally on the net
level, modified preliminary term or CRVM methods using the 1941, 1958 and 1980
Commissioners' Standard Ordinary Mortality and American Experience Tables and
assumed interest rates ranging from 2.25% to 4.5%. Reserves for annuity
contracts are based principally on the 1949, 1971 and 1983 Individual Annuity
Mortality Tables for individual annuities and the 1971 and 1983 Group Annuity
Mortality Tables for group annuities and assumed interest rates ranging from
2.25% to 13.25%. Policy claims in process include provisions for payments to
be made on reported claims and claims incurred but not reported. Any
adjustments
B-28
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
that are made to the reserve balances are reflected in the Statements of
Operations in the year in which such adjustments are made, with the exception
of changes in valuation bases which are accounted for as a charge or credit to
surplus.
REVENUE AND RELATED EXPENSE RECOGNITION
Premiums are recognized as income over the premium payment period of the
related policies. Annuity considerations are recognized as income as they are
received. Premium and annuity considerations are recorded net of reinsurance
premiums. Benefits are reported net of the amounts received from reinsurers.
Commissions and other expenses related to the acquisition of new policies are
charged to operations as incurred.
FEDERAL INCOME TAXES
The Company files a consolidated federal income tax return with its insurance
and non-insurance subsidiaries. Each subsidiary's tax liability or refund is
accrued on a separate company basis. The Company reimburses subsidiaries for
losses utilized in the consolidated return based on inter-company tax
allocation agreements. In accordance with statutory accounting practices, no
deferred taxes are provided for temporary differences between pre-tax
accounting income and taxable income.
POLICYHOLDER DIVIDENDS
All insurance policies are participating. A liability for the dividends to be
paid or credited to policyholders during the following calendar year is
established at each year end. The amount of dividends to be paid is approved
annually by the Board of Trustees.
SEPARATE ACCOUNTS
Separate Account assets and liabilities represent segregated funds administered
and invested by the Company primarily for the benefit of variable life
insurance policyholders and annuity and pension contractholders, including
certain of the Company's benefit plans. The value of the assets in the Separate
Accounts reflects the actual investment performance of the respective accounts
and is not guaranteed by the Company. The carrying value for Separate Account
assets and liabilities approximates the estimated fair value of the underlying
assets.
RECLASSIFICATIONS
Certain 1995 and 1994 amounts have been reclassified to conform with the 1996
presentation.
NOTE 2 - ACCOUNTING CHANGES:
During 1996, the Company changed its valuation basis for disability income and
certain other contracts. The increase in reserves of $14,773, net of taxes, was
taken as a direct charge to surplus.
The sections of the Internal Revenue Code (IRC) applicable to mutual life
insurance companies require that mutual, but not stock, life insurance
companies include the Differential Earnings Amount (DEA) in each year's taxable
income. This amount is computed by multiplying the Company's average taxable
equity base by a rate that represents the difference between stock and mutual
companies' earnings rates. Under the IRC, the enacted DEA rate for the current
year is an Internal Revenue Service (IRS) estimate and is recomputed in the
following year to reflect the actual industry results.
Prior to 1995, the Company recorded its federal income tax expense for the DEA
based on the enacted IRS rates for the current year along with any adjustment
to the DEA related to the recomputation of the prior year's estimate. The
portion of the Company's federal income tax expense associated with the DEA was
recorded directly to surplus.
In 1995, the Company changed its method of accounting for the DEA to record the
tax based on management's best estimate of the final DEA rates. The impact of
this accounting change resulted in a $16,723 direct charge to surplus in 1995.
In addition, in 1995 the Company began recording the portion of its federal
income tax expense associated with the DEA in the Statement of Operations.
B-29
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
During 1995, the Company changed the reserve valuation bases for certain of its
annuity products. These changes resulted in the release of $24,707 of
policyholder reserves and a corresponding credit directly to surplus.
NOTE 3 - INVESTMENTS:
DEBT SECURITIES
The following summarizes the statement value and estimated fair value of the
Company's investment in debt securities, including redeemable preferred stocks,
as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------------------------------
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
United States Government........... $ 15,541 $ 549 $ -- $ 16,090
Other governmental units........... 34,451 1,601 -- 36,052
Public utility..................... 415,874 28,379 2,020 442,233
Industrial and other............... 2,102,134 100,466 8,138 2,194,462
Mortgage and other asset-backed se-
curities.......................... 1,973,972 24,969 15,587 1,983,354
---------- -------- ------- ----------
4,541,972 155,964 25,745 4,672,191
Redeemable preferred stocks........ 3,575 -- 266 3,309
---------- -------- ------- ----------
TOTAL............................. $4,545,547 $155,964 $26,011 $4,675,500
========== ======== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-------------------------------------------
GROSS GROSS ESTIMATED
STATEMENT UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
United States Government........... $ 63,477 $ 1,875 $ -- $ 65,352
Other governmental units........... 103,090 2,893 -- 105,983
Public utility..................... 509,120 51,946 347 560,719
Industrial and other............... 2,184,414 197,075 13,208 2,368,281
Mortgage and other asset-backed se-
curities.......................... 835,415 32,504 3,951 863,968
---------- -------- ------- ----------
3,695,516 286,293 17,506 3,964,303
Redeemable preferred stocks........ 3,964 -- 237 3,727
---------- -------- ------- ----------
TOTAL............................. $3,699,480 $286,293 $17,743 $3,968,030
========== ======== ======= ==========
</TABLE>
The following summarizes the statement value and estimated fair value of debt
securities as of December 31, 1996 by contractual maturity.
<TABLE>
<CAPTION>
ESTIMATED
STATEMENT FAIR
VALUE VALUE
---------- ----------
<S> <C> <C>
Maturity:
Within one year......................................... $ 211,786 $ 211,591
After one year through five years....................... 621,748 631,662
After five years through ten years...................... 296,615 307,622
After ten years through twenty years.................... 435,475 478,638
After twenty years...................................... 1,002,376 1,059,324
Mortgage and other asset-backed securities.............. 1,973,972 1,983,354
---------- ----------
4,541,972 4,672,191
Redeemable preferred stocks.............................. 3,575 3,309
---------- ----------
TOTAL................................................... $4,545,547 $4,675,500
========== ==========
</TABLE>
B-30
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
Expected maturities may differ from contractual maturities because certain
borrowers have the right to call or prepay obligations with or without call or
prepayment penalties. Mortgage and other asset-backed securities consist of
commercial and residential mortgage pass-through holdings and securities backed
by credit card receivables, auto loans and home equity and manufactured housing
loans. These securities follow a structured principal repayment schedule and
are of high credit quality. These securities are rated investment grade, other
than $60,547 in commercial mortgage-backed securities retained from the
securitization of the Company's commercial mortgage loan portfolio. The
mortgage and other asset-backed securities portfolio is presented separately in
the maturity schedule due to the potential for prepayment. The weighted average
life of this portfolio is 7.6 years.
During 1996, 1995 and 1994, proceeds from dispositions of investments in debt
securities amounted to $1,079,993, $1,410,126, and $1,038,593, respectively.
The gross gains realized on those dispositions were $13,794, $57,295 and
$5,876, and the gross losses realized on those dispositions were $6,535,
$10,069 and $27,348 during 1996, 1995 and 1994, respectively. Total net
realized losses, net of taxes, transferred to the IMR in 1996 were $16,208.
Total net realized gains, net of taxes, transferred to the IMR in 1995 were
$32,211. Total net realized losses, net of taxes, transferred to the IMR, in
1994 were $14,089. Amortization of the IMR included in net investment income
amounted to $1,160, $1,482 and $1,056 in 1996, 1995 and 1994, respectively.
The Company's investment portfolio of debt securities is comprised
predominantly of investment grade securities. As of December 31, 1996 and 1995,
debt securities totaling $168,313 and $100,013, respectively, were classified
by the NAIC as less than investment grade. The Company did not hold any debt
securities which were non-income producing for the preceding twelve months as
of December 31, 1996 and 1995.
MORTGAGE LOANS
On August 29, 1996, the Company securitized the majority of its mortgage loan
portfolio, by transferring mortgage loans with a principal value of $715,712
and a book value of $715,121 to a trust which qualifies as a REMIC (Real Estate
Mortgage Investment Conduit) under the Internal Revenue Code. The trust issued
sixteen classes of Commercial Mortgage Pass-Through Certificates with a total
par value of $715,912. The certificates evidence the entire beneficial
ownership interest in the trust. The cash flow from the mortgages will be used
to repay the certificates over an average life of 4.28 years. The actual date
on which the principal amount of the notes may be paid in full could be
substantially earlier or later based on performance of the mortgages. The cash
flows of the assets of the trust will be the sole source of payments on the
notes. The Company has not guaranteed these certificates or the mortgage loans
held by the trust. As a result of this transaction, the Company recognized a
loss of $23,029 upon the transfer of the mortgages to the trust, representing
the difference between the fair market value of the certificates and the book
value of the mortgage loans transferred to the trust. This loss was deferred
through the Interest Maintenance Reserve (IMR), net of related taxes, and will
be amortized into income over the remaining life of the mortgages sold.
Included in the Company's bond portfolio are the highest quality classes of
certificates with a par value of $655,055 and a fair market value of $672,643
at the time of the securitization, which the Company retained. The Company sold
the lowest rated classes of certificates with a par value of $60,857 and a fair
market value of $22,752.
The mortgage loans which were not included in the securitization were retained
by the Company and had a book value of $152,480 and an estimated fair value of
$140,691 on the date of the securitization. Loans which the Company intends to
dispose of within a period of 6 to 24 months were written down to their
estimated net realizable value. These loans had a book value of $83,428 and an
estimated net realizable value of $67,642, which resulted in a credit-related
realized loss of $15,786. The Company intends to hold mortgage loans with a
book value of $69,052 on the date of the securitization, through their
remaining terms. The Company has discontinued the origination of commercial
mortgage loans.
B-31
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
The following summarizes the statement value of mortgage loans, by property
type and geographic concentration, as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Property Type
Office buildings.............................................. $ 40,243 $296,976
Retail........................................................ 39,090 230,902
Dwellings..................................................... 33,539 223,192
Other......................................................... 4,174 209,622
-------- --------
Total........................................................ $117,046 $960,692
======== ========
Geographic Concentration
Northeast..................................................... $ 43,552 $328,397
Midwest....................................................... 17,539 358,203
South......................................................... 20,715 132,382
West.......................................................... 35,240 139,979
Canada........................................................ -- 1,731
-------- --------
Total........................................................ $117,046 $960,692
======== ========
</TABLE>
The Company's investments at December 31, 1996 included $12,983 of mortgage
loans delinquent over 60 days and no mortgage loans which were non-income
producing for the preceding twelve months as of December 31, 1996. The
Company's investments at December 31, 1995 included $27,295 of mortgage loans
delinquent over 60 days, including $8,033 of mortgage loans which were non-
income producing for the preceding twelve months as of December 31, 1995. The
mortgage loan portfolio includes $7,110 and $19,928 of restructured mortgage
loans as of December 31, 1996 and 1995, respectively. Restructured mortgage
loans include commercial loans for which the basic terms, such as interest
rate, amortization, maturity date, or collateral have been changed as a result
of actual or anticipated delinquency. Restructures do not include mortgages
refinanced prior to or upon maturity at or above current market terms.
REAL ESTATE
As of December 31, 1996 and 1995, accumulated depreciation on real estate
amounted to $32,592 and $43,069, respectively. Depreciation expense on real
estate totaled $5,769, $10,019 and $8,445 for the years ended December 31,
1996, 1995 and 1994, respectively. The Company's investments include $14,330
and $27,944 of foreclosed real estate as of December 31, 1996 and 1995,
respectively. The statement value of the Company's largest real estate
investment amounted to $49,923 and $54,858 as of December 31, 1996 and 1995,
respectively. During 1996, the Company wrote down the statement value of this
property by $16,000 to its current estimated fair value based on changes in
future valuation assumptions. During 1995, the Company wrote down the statement
value of this property by $76,500 to its estimated fair value at that date.
This write down reflected the Company's determination that the value of the
property was permanently impaired due in part to the notification by the major
tenant that it did not intend to exercise lease extension options. In addition,
as of 1995, the Company no longer intended to hold this property as a long-term
investment.
NOTE 4 - RESERVES AND FUNDS FOR PAYMENT OF FUTURE LIFE AND ANNUITY BENEFITS:
The following summarizes the withdrawal characteristics of the Company's
reserve and deposit funds as of December 31, 1996.
<TABLE>
<CAPTION>
STATEMENT
VALUE
-----------
<S> <C>
Total policyholders' reserves and funds, including separate ac-
count liabilities................................................ $ 6,173,292
Amounts not subject to discretionary withdrawal................... (1,207,000)
-----------
Amounts subject to discretionary withdrawal...................... $ 4,966,292
===========
</TABLE>
B-32
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
Of the total reserves and deposit funds which are subject to discretionary
withdrawal, $1,958,656, which is net of applicable policy loans, may be
withdrawn without the policyholder incurring surrender charges or market value
adjustments to those funds.
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS AND OFF-BALANCE-SHEET RISK:
The following table summarizes the statement value and estimated fair value of
the Company's financial instruments as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
--------------------- ---------------------
STATEMENT ESTIMATED STATEMENT ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS:
Debt securities
Bonds............................. $4,541,972 $4,672,192 $3,695,516 $3,964,303
Redeemable preferred stocks....... 3,575 3,309 3,964 3,727
Equity securities
Common stock--unaffiliated........ 160 160 8,182 8,182
Non-redeemable preferred stocks... 9,467 12,112 11,085 13,607
Mortgage loans
Commercial........................ 117,046 120,281 958,079 1,000,003
Residential....................... -- -- 2,613 2,930
Policy loans....................... 409,344 387,562 422,865 405,721
Venture capital limited partner-
ships............................. 37,792 37,792 30,325 30,325
Separate account assets............ 1,225,038 1,225,038 911,683 911,683
FINANCIAL LIABILITIES:
Investment-type contracts
Individual annuities.............. 1,216,161 1,246,695 $1,248,138 $1,287,644
Guaranteed investment contracts... 111,276 112,300 222,991 226,255
Other group annuities............. 188,565 189,853 216,686 219,857
Dividends to policyholders payable
in the following year............. 69,445 69,445 72,653 72,653
Separate account liabilities....... 1,225,038 1,225,038 905,960 905,960
</TABLE>
The estimated fair values for the Company's investments in debt and equity
securities are based on quoted market prices, where available. In situations
where market prices are not readily available, primarily private placements,
fair values are estimated using a formula pricing method based on fair values
of securities with similar characteristics. The fair value of currently
performing mortgage loans is estimated by discounting the cash flows associated
with the investments, using an interest rate currently offered for similar
loans to borrowers with similar credit ratings. Loans with similar credit
quality, characteristics and time to maturity are aggregated for purposes of
estimating fair value. Assumptions regarding credit risk, cash flows and
discount rates are determined using the available market and borrower-specific
information. The estimated fair value for non-performing loans is based on the
estimated fair value of the underlying real estate, which is based on recent
appraisals or other estimation techniques. The estimated fair value of policy
loans is calculated by discounting estimated future cash flows using interest
rates currently being offered for similar loans. Loans with similar
characteristics are aggregated for purposes of estimating fair value. The
statement values of cash and short-term investments and separate account assets
approximate their fair values. The estimated fair value for venture capital
limited partnerships is based on values determined by the partnerships'
managing general partners. The resulting estimated fair values may not be
indicative of the value negotiated in an actual sale.
The fair values of the Company's liabilities for individual annuities,
guaranteed investment contracts and other group annuities are estimated by
discounting the cash flows associated with the contracts, using an interest
rate currently offered for similar contracts with maturities similar to those
remaining for the contracts being valued. The statement value for certain of
the other group annuities, totaling $34,803 and $43,490 as of December 31, 1996
and 1995, respectively, approximates the fair value due
B-33
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
to the nature of the contracts. The statement values of dividends to
policyholders payable in the following year and separate account liabilities
approximate their fair values.
Currently, disclosure of estimated fair values is not required for all of the
Company's assets and liabilities. Therefore, presentation of the estimated fair
value of a significant portion of assets without a corresponding valuation of
liabilities associated with insurance contracts can be misinterpreted. The
continuing management of the relationship between the maturities of the
Company's investments and the amounts due under insurance contracts reduces the
Company's exposure to changing interest rates.
The Company is exposed to interest rate risk on its interest sensitive
products. The Company's investment strategy is designed to minimize interest
risk by managing the duration of both assets and liabilities and anticipated
cash flows of the Company's assets and liabilities.
To minimize exposure and reduce risk from exchange and interest rate
fluctuations in the normal course of business, the Company is party to
financial instruments with off-balance-sheet risk. As of December 31, 1996 and
1995, the Company had interest rate swaps with aggregate notional amounts equal
to $115,000, with average unexpired terms of 29 and 39 months, respectively.
Interest rate swap agreements involve the exchange of fixed and floating rate
interest payment obligations without an exchange of the underlying notional
principal amounts. During the term of the swap, the net settlement amount is
accrued as an adjustment to interest income. If the counterparty defaults, the
Company is exposed only to the loss of the interest rate differential. If the
positions were closed as of December 31, 1996 and 1995, the Company would have
recognized gains of $7,605 and $12,880, respectively. The fair values for
interest rate swaps and futures contracts are based on dealers' quotes and
represent the estimated amount the Company would receive to terminate the
contracts taking into account current interest rates and the creditworthiness
of the counterparties, where appropriate.
In the normal course of business, the Company loans securities under
arrangements in which collateral is obtained in amounts greater than the
current market value of loaned securities. This collateral is held in the form
of cash, cash equivalents or securities issued or guaranteed by the United
States Government. The Company is at risk to the extent the value of loaned
securities exceeds the value of the collateral obtained. The Company controls
this risk by requiring collateral of the highest quality and requiring that
additional collateral be deposited when the market value of loaned securities
increases in relation to the collateral held or the value of the collateral
decreases in relation to the value of the loaned securities. The Company had no
loaned securities outstanding as of December 31, 1996 and 1995.
NOTE 6 - BENEFIT PLANS:
The Company maintains both qualified and non-qualified defined benefit plans as
well as qualified defined contribution plans covering substantially all of its
employees and full-time agents. The total pension expense related to these
plans, including amounts allocated to the Company's subsidiaries, amounted to
$8,310, $8,848 and $7,757 in 1996, 1995 and 1994, respectively.
DEFINED BENEFIT PLANS
The Company's expense and funding policy for the qualified defined benefit plan
is to contribute an amount between the minimum required contribution and the
maximum deductible amount in accordance with the Internal Revenue Code. The
benefits for the plan are based on years of service and the employee's
compensation prior to termination of employment.
The following summarizes the accumulated plan benefits, calculated using the
projected unit credit method and plan net assets for the Company's qualified
defined benefit plan as of December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Actuarial present value of accumulated plan benefits:
Vested........................................................ $32,572 $29,744
Non-vested.................................................... 935 763
------- -------
TOTAL........................................................ $33,507 $30,507
======= =======
Net assets available for plan benefits......................... $37,938 $34,067
======= =======
</TABLE>
B-34
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
The actuarial present value of accumulated plan benefits was determined using a
7.5% and a 7.0% assumed discount rate for December 31, 1996 and 1995,
respectively.
The Company also sponsors defined benefit plans for certain employees in excess
of limits for qualified retirement plans. Pension assets are maintained in the
Company's general account. As of December 31, 1996, the plans' total
accumulated benefit obligation, determined in accordance with SFAS No. 87 and
based on a 7.5% assumed discount rate amounted to $16,439. As of December 31,
1995, the plans' total accumulated benefit obligation, determined in accordance
with SFAS No. 87 and based on an 7.0% assumed discount rate amounted to
$17,609. The additional obligation for future salary increases was $1,899 and
$2,539 as of December 31, 1996 and 1995, respectively.
DEFINED CONTRIBUTION PLANS
Defined contribution plan benefits are based on the participant's account
balance. Designated contributions of up to 8% of each employee's annual
compensation are eligible to be matched by the Company. As of December 31, 1996
and 1995, the estimated fair value of the defined contribution plans' assets
was $134,778 and $126,378, respectively.
POSTRETIREMENT BENEFITS
The Company also provides certain health care and life insurance benefits
(postretirement benefits) for retired employees. Substantially all employees
become eligible for these benefits if they reach retirement age eligibility
while working for the Company.
The Company accounts for the costs of postretirement benefits using an accrual
method and is amortizing a transition obligation of $33,744 over 20 years. As
of December 31, 1996 and 1995, the unamortized transition obligation was
$26,996 and $28,683, respectively.
Postretirement benefit expense for the year ended December 31, 1996, 1995 and
1994 was $3,778, $4,426, and $4,346 respectively, which includes the expected
cost of postretirement benefits for vested employees, interest cost, service
cost, and amortization of the transition obligation and the unrecognized
gains/(losses) on the obligation. The interest cost, service cost and
amortization of the unrecognized gain on the obligation were $1,948, $590 and
$447, respectively, for the year ended December 31, 1996. The interest cost and
service cost were $2,471 and $268, respectively, for the year ended December
31, 1995. The interest cost and service cost were $2,366 and $293,
respectively, for the year ended December 31, 1994. There was no unrecognized
gain/(losses) on the obligation in 1995 and 1994. The Company made
contributions to the plans of $2,107, $2,629 and $2,438 in 1996, 1995 and 1994,
respectively, as claims were incurred.
As of December 31, 1996 and 1995, the unfunded postretirement benefit
obligation for retirees and other fully eligible or vested plan participants
was $25,960 and $36,150, respectively. For December 31, 1996 the discount rate
used in determining the accumulated postretirement benefit obligation was 7.5%,
and the health care cost trend rate was 8.5%, graded to 5% over 8 years. For
December 31, 1995, the discount rate used in determining the accumulated
postretirement benefit obligation was 7.0%, and the health care cost trend rate
was 9.0%, graded to 5.0% over 9 years.
The health care cost trend rate assumption has a significant effect on the
amount reported. To illustrate, increasing the assumed health care cost trend
rate by one percentage point in each year would increase the postretirement
benefit obligation as of January 1, 1996 by $1,833 and the estimated
eligibility cost and interest cost components of net periodic postretirement
benefit cost for the year ended December 31, 1996 by $135.
NOTE 7 - FEDERAL INCOME TAXES:
The provision for federal income taxes is computed in accordance with the
sections of the Internal Revenue Code applicable to mutual life insurance
companies.
The taxable income reflected in the Company's federal tax return differs from
statutory income as reflected in the accompanying Statements of Operations.
Significant differences relate to the DEA, treatment of policy acquisition
costs, differences in policy reserve valuation methods, and settled tax issues.
B-35
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
The IRS has examined the Company's income tax returns through the year 1990 and
is currently examining years 1991 through 1994. Management believes that an
adequate provision has been made for potential assessments.
In 1995, the Company settled various tax issues with the IRS, including an
issue with the tax treatment of certain traditional life insurance policy
updates. As a result of these settlements, the 1995 federal income tax expense
was decreased in the Statement of Operations by approximately $57,000.
NOTE 8 - REINSURANCE:
The Company has assumed and ceded reinsurance on certain life and annuity
contracts under various agreements. The Company remains primarily liable as the
direct insurer on all risks reinsured, and performs due diligence to ensure
that amounts due from reinsurers are collectable. The table below includes the
reinsurance amounts recorded in the accompanying financial statements, which
are presented net of reinsurance activity.
<TABLE>
<CAPTION>
ASSUMED CEDED TO
GROSS FROM OTHER OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996:
Life Insurance in-force.......... $26,822,820 $7,829,755 $5,517,369 $29,135,206
Premium and annuity considera-
tions........................... 656,437 17,831 33,085 641,183
Reserves and funds for payment of
future life and annuity bene-
fits............................ 5,942,388 3,945 320,167 5,626,166
DECEMBER 31, 1995:
Life Insurance in-force.......... $26,290,414 $7,668,076 $4,982,235 $28,976,255
Premium and annuity considera-
tions........................... 724,188 19,762 33,508 710,442
Reserves and funds for payment of
future life and annuity bene-
fits............................ 5,364,721 3,937 304,360 5,064,298
</TABLE>
During 1994, the Company had gross premiums of $772,461, assumed premiums of
$40,418 and ceded premiums of $41,332.
Under reinsurance agreements with The Penn Insurance and Annuity Company (PIA),
a wholly-owned subsidiary, the Company has assumed and ceded certain risks. As
a result of these reinsurance agreements with PIA, net life insurance in-force
ceded to PIA totaled $327,897 and $342,694 as of December 31, 1996 and 1995,
respectively. The Company reduced its reserves by $243,426 and $242,691 as of
December 31, 1996 and 1995, respectively. Net premium and annuity
considerations ceded to PIA were $11,620 and $11,056, which include an
experience refund paid of $4,461 and $2,257 in 1996 and 1995, respectively. Net
premium and annuity considerations assumed from PIA in 1994 were $10,069.
During 1995, PIA recaptured its single premium immediate annuity business which
it had previously ceded entirely to the Company. The transaction resulted in
the transfer of approximately $31,000 of invested assets and policyholder
liabilities from the Company to PIA.
During 1995, the Company recaptured the portion of its disability income
business that was previously reinsured under a quota share and excess
reinsurance agreement with the Monarch Life Insurance Company ("Monarch"). As a
result of this recapture, approximately $21,200 of cash and policyholder
reserves were transferred to the Company from Monarch.
B-36
<PAGE>
- --------------------------------------------------------------------------------
THE PENN MUTUAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(IN THOUSANDS OF DOLLARS)
NOTE 9 - RELATED PARTIES:
The following summarizes the statement value of the Company's unconsolidated
subsidiaries and affiliates as of December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Independence Square Properties, Inc. ........................ $108,817 $ 88,607
PIA.......................................................... 82,102 65,601
Other affiliates............................................. 14,655 16,985
-------- --------
TOTAL....................................................... $205,574 $171,193
======== ========
</TABLE>
The Company's unconsolidated subsidiaries had combined assets of $1,545,888 and
$1,373,745, and combined liabilities of $1,340,314 and $1,202,552 as of
December 31, 1996 and 1995, respectively. The Company records earnings from
these subsidiaries through investment income. The majority of the earnings of
$37,981, $23,642 and $24,311 for the years ended December 31, 1996, 1995 and
1994, respectively, relate to broker/dealer subsidiaries.
As of December 31, 1996 and 1995, bonds include notes receivable from
subsidiaries of $27,304 and $31,130, respectively. Investment income on notes
receivable from subsidiaries amounted to $1,989, $3,118 and $2,527 for 1996,
1995 and 1994, respectively.
NOTE 10 - COMMITMENTS AND CONTINGENCIES:
The Company and its subsidiaries are respondents in a number of proceedings,
some of which involve extra-contractual damage in addition to other damages. In
addition, insurance companies are subject to assessments, up to statutory
limits, by state guaranty funds for losses of policyholders of insolvent
insurance companies. In the opinion of management, the outcome of the
proceedings and assessments are not likely to have a material adverse effect on
the financial position of the Company.
The Company has undertaken to its wholly-owned subsidiary, PIA, to provide
sufficient financial support so that PIA will have adequate capital and surplus
as required by applicable laws to meet its obligations to its policyholders
under the terms of PIA's policies and contracts.
The Company, in the ordinary course of business, extends commitments relating
to its investment activities. As of December 31, 1996, the Company had
outstanding commitments totaling $13,079 relating to these investment
activities. The fair value of these commitments approximates the face amount.
As of December 31, 1996, unused lines of credit available to the Company
amounted to $40,000.
B-37
<PAGE>
PART C
------
Other Information
-----------------
<PAGE>
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements included in Part B:
Financial Statements of Penn Mutual Variable Annuity
Account III:
Report of Independent Accountants
Statement of Assets and Liabilities - December 31, 1996
Statement of Operations - For the years ended
December 31, 1996 and 1995
Statements of Changes in Net Assets - For the years ended
December 31, 1996 and 1995
Notes to Financial Statements
Financial Statements of The Penn Mutual Life Insurance
Company:
Report of Independent Accountants
Statements of Financial Condition at December 31, 1996
and 1995
Statements of Operations and Surplus for the years
ended December 31, 1996, 1995 and 1994
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994
Notes to Financial Statements
(b) Exhibits
1. (a) Resolution of Executive Committee of Board of
Trustees of The Penn Mutual Life Insurance
Company authorizing the establishment of the
Registrant. Incorporated by reference to
Exhibit 1A(1) to this Registration Statement
on Form S-6 filed on April 30, 1982.
(b) Resolution of Executive Committee of Board of
Trustees of The Penn Mutual Life Insurance
Company authorizing Registrant to invest in
shares of Penn Series Funds, Inc., Neuberger &
Berman Advisers Management Trust, TCI
Portfolios, Inc. and Fidelity Investments'
Variable Insurance Products Fund and Variable
Insurance Products Fund II. Incorporated by
reference to Exhibit 1(b) to Post-Effective
Amendment No. 20 to this Registration
Statement on Form N-4 filed on April 27, 1995.
2. Not applicable.
3. (a) Sales Support Agreement between The Penn
Mutual Life Insurance Company and Horner,
Townsend & Kent, Inc., a wholly-owned
subsidiary of Penn Mutual. Incorporated by
reference to Exhibit 3
C-1
<PAGE>
to Post-Effective Amendment No. 9 to this
Registration Statement on Form N-4 filed on
February 26, 1987.
(b) Form of Distribution Agreement between The
Penn Mutual Life Insurance Company and Horner,
Townsend & Kent, Inc., a wholly-owned
subsidiary of Penn Mutual). Incorporated by
reference to Exhibit 3 to Post-Effective
Amendment No. 6 to this Registration Statement
on Form N-4 filed in February 1986.
(c) Form of Broker's Contract between The Penn
Mutual Life Insurance Company and CBL
Equities, Inc. Incorporated by reference to
Exhibit A(3)(a) to Post-Effective Amendment
No. 3 to this Registration Statement on Form
S-6 filed on July 12, 1984.
(d) Form of Agent's Agreement relating to
broker-dealer supervision. Incorporated by
reference to Exhibit 3(h) to Post-Effective
Amendment No. 11 to this Registration
Statement filed on April 27, 1989.
(e) Form of Broker-Dealer Selling Agreement (for
broker-dealers licensed to sell variable
annuity contracts and/or variable life
insurance contracts under state insurance
laws). Incorporated by reference to Exhibit
3(g) to Post-Effective Amendment No. 15 to
this Registration Statement on Form N-4 filed
in April 1992.
(f) Form of Broker-Dealer Selling Agreement (for
broker-dealers with affiliated corporations
licensed to sell variable annuity contracts
and/or variable life insurance contracts under
state insurance laws. Incorporated by
reference to Exhibit 3(h) to Post-Effective
Amendment No. 15 to this Registration
Statement on Form N-4 filed in April 1992.
(g) Form of Broker-Dealer Selling Agreement (for
broker-dealers with affiliated individual
licensed to sell variable annuity contracts
and/or variable life insurance contracts under
state insurance laws). Incorporated by
reference to Exhibit 3(i) to Post-Effective
Amendment No. 15 to this Registration
Statement on Form N-4 filed in April 1992.
4. (a) Endorsement No. 1373-86 to Individual Variable
Annuity Contract. Incorporated by reference to
Exhibit (4)(a) to Post-Effective Amendment No.
6 to this Registration Statement on Form N-4
filed on February 28, 1986.
(b) Endorsement No. 1447-803 to Individual
Variable Annuity Contract. Incorporated by
reference to Exhibit (4)(b) to
C-2
<PAGE>
Post-Effective Amendment No. 6 to this
Registration Statement on Form N-4 filed on
February 28, 1986.
(c) Individual Variable Annuity Contract (Form DI-
783-V). Incorporated by reference to Exhibit
(4)(c) to Post-Effective Amendment No. 6 to
this Registration Statement on Form N-4 filed
on February 28, 1986.
(d) Group Variable and Fixed Annuity Contract
(primarily for Section 403(b) retirement
plans) (Form GDI-385) and Certificate issued
under the Contract (Form EB 1611).
Incorporated by reference to Exhibit (4)(d) to
Post-Effective Amendment No. 6 to this
Registration Statement on Form N-4 filed on
February 28, 1986.
(e) Group Variable and Fixed Annuity Contract
(primarily for Sections 401 and 457 retirement
plans) (Form GDI-1085) and Certificate issued
under the Contract (Form EB 1650).
Incorporated by reference to Exhibit (4)(e) to
Post-Effective Amendment No. 6 to this
Registration Statement on Form N-4 filed on
February 28, 1986.
(f) Endorsement No. 1457-80 to Individual Variable
Annuity Contract. Incorporated by reference to
Exhibit 4(f) to Post-Effective Amendment No.
10 to this Registration Statement on Form N-4
filed in April 1988.
(g) Individual Variable Annuity Contract (Form DI-
1182-V). Incorporated by reference to Exhibit
4(g) to Post-Effective Amendment No. 11 to
this Registration Statement filed on April 27,
1989.
(h) Group Variable and Fixed Annuity Contract (for
Section 403(b) retirement plans) (Form GDI-
784) and Certificate issued under the Contract
(Form EB 1555). Incorporated by reference to
Exhibit A(5) to Post-Effective Amendment No. 2
to this Registration Statement on Form S-6
filed on May 15, 1984.
(i) Endorsement No. 1309-82 to Individual Variable
Annuity Contract. Incorporated by reference to
Exhibit 4(i) to Post-Effective Amendment No.
11 to this Registration Statement filed on
April 27, 1989.
(j) Individual Variable and Fixed Annuity
Contract -Flexible Purchase Payments (Form DV-
790). Incorporated by reference to Exhibit
4(j) to Post-Effective Amendment No. 13 to
this Registration Statement filed June 29,
1990.
C-3
<PAGE>
(k) Endorsement No. 1499-91 to Individual Variable
Annuity Contract. Incorporated by reference to
Exhibit 4(k) to Post-Effective Amendment No.
13 to this Registration Statement filed June
29, 1990.
(l) Endorsement No. 1510-92 to Individual Variable
and Fixed Annuity Contract. Incorporated by
reference to Exhibit 4(l) to Post-Effective
Amendment No. 15 to this Registration
Statement filed April 1992.
(m) Endorsement No. 1534-90 to Individual Variable
and Fixed Annuity Contract. Incorporated by
reference to Exhibit 4(m) to Post-Effective
Amendment No. 19 to this Registration
Statement filed on April 20, 1994.
(n) Endorsement No. 1536-90 to Individual Variable
and Annuity Contract. Incorporated by
reference to Exhibit 4(n) to Post-Effective
Amendment No. 19 to this Registration
Statement filed on April 20, 1994.
5. (a) Application (Form EB 1510) for Individual
Variable Annuity Contract. Incorporated by
reference to Exhibit 5(a) to Post-Effective
Amendment No. 11 to this Registration
Statement filed on April 27, 1989.
(b) Application (Form EB 1610) for participation
in Group Variable and Fixed Annuity Contract.
Incorporated by reference to Exhibit 5(b) to
Post-Effective Amendment No. 11 to this
Registration Statement filed on April 27,
1989.
(c) Application (Form EB 1554) for participation
in Group Variable and Fixed Annuity Contract.
Incorporated by reference to Exhibit 5(c) to
Post-Effective Amendment No. 11 to this
Registration Statement filed on April 27,
1989.
(d) Application (Form EB 1652) for participation
in Group Variable and Fixed Annuity Contract.
Incorporated by reference to Exhibit 5(d) to
Post-Effective Amendment No. 11 to this
Registration Statement filed on April 27,
1989.
(e) Application (Form EB 1866 3/90) for Individual
Variable and Fixed Annuity Contract.
Incorporated by reference to Exhibit 5(e) to
Post-Effective Amendment No. 18 to this
Registration Statement filed on April 26,
1993.
(f) Application (Form EB 1891 5/90) for Individual
Variable and Fixed Annuity Contract.
Incorporated by reference to
C-4
<PAGE>
Post-Effective Amendment No. 17 to this
Registration Statement filed August 27, 1992.
(g) Application (Form PM3502 11/94) for Individual
Variable and Fixed Annuity Contract. Filed
herewith.
6. (a) Charter of The Penn Mutual Life Insurance
Company (May 1983). Incorporated by reference
to Exhibit 6(a) to Post-Effective Amendment
No. 10 to this Registration Statement on Form
N-4 filed in April 1988.
(b) By-laws of The Penn Mutual Life Insurance
Company, as amended through December 8, 1989.
Incorporated by reference to Exhibit 6(b) to
Post-Effective Amendment No. 12 to this
Registration Statement filed on April 30,
1990.
7. None.
8. (a) Fund Participation Agreement among The Penn
Mutual Life Insurance Company, TCI Portfolios,
Inc.(renamed American Century Variable
Portfolios, Inc., effective May 1, 1997) and
Investors Research Corporation (renamed
American Century Investment Mangement, Inc.,
effective May 1, 1997).. Incorporated by
reference to Exhibit 8(a) to Post-Effective
Amendment No. 18 to this Registration
Statement filed on April 26, 1993.
(b) Sales Agreement between The Penn Mutual Life
Insurance Company and Neuberger & Berman
Advisers Management Trust. Filed as exhibit
and incorporated by reference to Exhibit A8(b)
to Post-Effective Amendment No. 1 to the
Registration Statement of Penn Mutual Variable
Life Account I (33-87276) filed on April 26,
1996.
(c) Sales Agreement between The Penn Mutual Life
Insurance Company and Penn Series Funds, Inc.
Incorporated by reference to Exhibit 1A(8)(a)
to Pre-Effective Amendment No. 1 to the
Registration Statement of Penn Mutual Variable
Life Account I (File No. 33-87276) filed on
April 13, 1995.
(d) Participation Agreement between The Penn
Mutual Life Insurance Company and Fidelity
Investments' Variable Insurance Products Fund.
Incorporated by reference to Exhibit 1A(8)(d)
to Pre-Effective Amendment No. 1 to the
Registration Statement of Penn Mutual Variable
Life Account I (File No. 33-87276) filed on
April 13, 1995.
C-5
<PAGE>
(e) Participation Agreement between The Penn
Mutual Life Insurance Company and Fidelity
Investments' Variable Insurance Products Fund
II. Incorporated by reference to Exhibit
1A(8)(e) to Pre-Effective Amendment No. 1 to
the Registration Statement of Penn Mutual
Variable Life Account I (File No. 33-87276)
filed on April 13, 1995.
(f) Participation Agreement between The Penn
Mutual Life Insurance Company and Morgan
Stanley Universal Funds, Inc. Filed herewith.
(g) Assignment and Modification Agreement between
Neuberger & Berman Management Incorporated,
Neuberger & Berman Advisers Management Trust
and The Penn Mutual Life Insurance Company.
Incorporated by reference to Exhibit
A(8)(b)(2) to Post-Effective Amendment No. 4
to the Registration Statement of Penn Mutual
Variable Life Account I (File No. 33-54662)
filed on April 29, 1996.
(h) Amendment to Sales Agreement between The Penn
Mutual Life Insurance Company and Neuberger &
Berman Advisers Management Trust. Incorporated
by reference to Exhibit A(8)(b)(3) to Post-
Effective Amendment No. 5 to the Registration
Statement of Penn Mutual Variable Life Account
I (File No. 33-54662) filed on April 29 1997.
9. Opinion of C. Ronald Rubley, Associate General
Counsel of The Penn Mutual Life Insurance Company.
Incorporated by reference to Exhibit 9 to Post-
Effective Amendment No. 13 to this Registration
Statement filed June 29, 1990.
10. (a) Consent of Coopers & Lybrand L.L.P.,
Independent Certified Public Accountants.
Filed herewith.
(b) Consent of Morgan, Lewis & Bockius LLP. Filed
herewith.
11. None.
12. None.
13. Schedule for Computation of Performance Quotations.
Filed herewith.
14. Powers of Attorney of Trustees. Filed herewith.
Item 25. Directors and Officers of the Depositor
---------------------------------------
C-6
<PAGE>
The following table sets forth the names of the officers and trustees of the
Depositor who are engaged directly or indirectly in activities relating to the
Registrant or the variable annuity contracts offered by the Registrant and the
executive officers of the Depositor who report to the chief executive officer.
Robert E. Chappell
Chairman of the Board and Chief
Executive Officer and Member of
the Board of Trustees
Daniel J. Toran
President and Chief Operating
Officer and Member of the Board of
Trustees
Nancy S. Brodie
Executive Vice President and
Chief Financial Officer
Peter M. Sherman
Senior Vice President and
Chief Investment Officer
L. Stockton Illoway
Senior Vice President, Marketing
and Sales Support
Richard J. Liburdi
Senior Vice President, Career
Agency System
Harold E. Maude, Jr.
Senior Vice President,
Independence Financial Network
James A. Clary
Vice President and Product Manager
George J. Limbach
Vice President, Individual Annuity Products
Frederick M. Rockovan
Vice President, Customer Service
James D. Benson
Manager, Financial Reporting
Steven M. Herzberg
Director of Financial Planning
and Treasurer
James McElwain
Assistant Vice President,
Retirement and Investment Sales
Operations
Peter R. Schaefer
Vice President and Actuary
The business address of the director and officers is The Penn Mutual Life
Insurance Company, Philadelphia, PA 19172.
Item 26. Persons Controlled By or Under Common Control with the Depositor or
-------------------------------------------------------------------
Registrant
----------
The Penn Mutual Life Insurance Company ("Penn Mutual") is the
record and beneficial owner of 100% of the outstanding common
stock of the following corporations: The Penn Insurance and
Annuity Company, a Delaware corporation; and Penn CMO Corp., a
Delaware corporation.
C-7
<PAGE>
Penn Mutual is the owner of 100% of the outstanding common stock
of Penn Series Funds, Inc. (registered investment company), a
Maryland corporation. For further information on the ownership of
the outstanding common stock of the Registrant, see "General
Information" in the Prospectus and "Ownership of Shares" in the
Statement of Additional Information, both of which are included
in this Post-Effective Amendment and are incorporated herein by
reference.
Penn Mutual is the record and beneficial owner of 100% of the
outstanding common stock of Independence Capital Management,
Inc., a Pennsylvania corporation and registered investment
adviser.
Penn Mutual is the record and beneficial owner of all of the
outstanding common stock of Penn Janney Fund, Inc. Penn Janney
Fund, Inc. is a Pennsylvania corporation and invests in new
businesses.
Penn Mutual is the record and beneficial owner of 100% of the
outstanding common stock of Independence Square Properties, Inc.,
a holding corporation incorporated in Delaware.
Independence Square Properties, Inc. is the record and beneficial
owner of 100% of the outstanding common stock of the following
corporations: Penn Glenside Corp., Penn Wayne Corp., St. James
Realty Corp., Investors' Mortgage Corp., and Christie Street
Properties, Inc., all Pennsylvania corporations; and Indepro
Corp., Economic Resources Associates, Inc. and WPI Investment
Company, both Delaware corporations.
Independence Square Properties, Inc. also is the record and
beneficial owner of 100% of the outstanding common stock of the
following corporations: Hornor, Townsend and Kent, Inc.
(registered broker-dealer and investment adviser), a Pennsylvania
corporation; Penn Tallahassee Corp. (real estate investment), a
Florida corporation.
Independence Square Properties is the record and beneficial owner
of 100% of the outstanding common stock of Janney Montgomery
Scott Inc. (registered broker-dealer and investment adviser), a
Delaware corporation.
Indepro Corp. is the record and beneficial owner of 100% of the
following corporations: Indepro Property Fund I Corp.; Indepro
Property Fund II Corp.; Commons One Corp.; and West Hazleton
Inc., all Delaware corporations.
Janney Montgomery Scott Inc. is the record and beneficial owner
of 100% of the outstanding common stock of the following
corporations: Addison Capital Management, Inc. (investment
adviser), a Pennsylvania corporation; JMS
C-8
<PAGE>
Resources, Inc. (oil and gas development), a Pennsylvania
corporation; and JMS Investor Services, Inc. (insurance sales), a
Delaware corporation.
Item 27. Number of Contract Owners
-------------------------
As of March 1, 1997, there were:
24,819 owners of qualified individual variable annuity contracts;
29 owners of qualified group variable annuity contracts;
460 owners of certificates issued under qualified group variable
annuity contracts; and
6,533 owners of nonqualified individual variable annuity
contracts.
Item 28. Indemnification
---------------
Section 6.2 of the By-laws of The Penn Mutual Life Insurance
Company provides that, in accordance with the provisions of the
Section, the Company shall indemnify trustees and officers
against expenses (including attorneys' fees), judgments, fines,
excise taxes and amounts paid in settlement actually and
reasonably incurred in connection with actions, suits and
proceedings, to the extent such indemnification is not prohibited
by law, and may provide other indemnification to the extent not
prohibited by law. The By-laws are filed as Exhibit 6(b) to Post-
Effective Amendment No. 12 to this Registration Statement and are
incorporated in this Post-Effective Amendment by reference.
Pennsylvania law (15 Pa. C.S.A. (S)(S) 1741-1750) authorizes
Pennsylvania corporations to provide indemnification to
directors, officers and other persons.
Penn Mutual owns a directors and officers liability insurance
policy covering liabilities directors and officers of Penn Mutual
and its subsidiaries may incur in acting as directors and
officers.
Selling Agreements entered into by The Penn Mutual Life Insurance
Company ("Penn Mutual") and its subsidiary, Hornor, Townsend &
Kent, Inc. ("HTK") with securities brokers and insurance agents
generally provide for indemnification of Penn Mutual and HTK and
their directors and officers in the event of liability resulting
from unauthorized acts of the brokers and insurance agents.
Insofar as indemnification for liability arising under the
Securities Act of 1933 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
C-9
<PAGE>
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.
Item 29. Principal Underwriters
----------------------
Hornor Townsend & Kent, Inc. and CBL Equities, Inc. serve as
principal underwriters of the securities of the Registrant.
Hornor Townsend & Kent, Inc. serves as principal underwriter for
Addison Capital Shares, Inc., a registered investment company.
Hornor, Townsend & Kent, Inc. - Directors and Officers
John J. Gray, Director and Chairman of the Board
Harold E. Maude, Jr., Director
Norman T. Wilde, Jr., Director
Daniel J. Toran, Director
Ronald C. Zimmerman, President and Chief Executive Officer
Michael D. Sweeney, Assistant Vice President, Director of
Compliance and Secretary
C. Ray Smith, Executive Vice President, Sales and Marketing
Laura M. Ritzko, Assistant Secretary
Henry Buck, Assistant Vice President and Assistant Treasurer
Barbara S. Wood, Senior Vice President, Finance and Treasurer
Bruce Ohrenich, Vice President, Sales
Joseph R. Englert, Assistant Vice President, Director of
Operations
William H. Pentz, Counsel
Constance Flavillo, Assistant Secretary
The principal business address of Messrs. Gray and Wilde is
Janney, Montgomery, Scott Inc., 1801 Market Street, Philadelphia,
Pennsylvania. The principal business address of Ms. Ritzko and
Mr. Pentz is The Penn Mutual Life Insurance Company,
Philadelphia, PA 19172. The principal business address of the
other directors and officers is Hornor, Townsend & Kent, Inc.,
600 Dresher Road, Horsham, Pennsylvania.
CBL Equities, Inc. - Directors and Officers
-------------------------------------------
<TABLE>
<S> <C>
Rich Hauch, Director
Brian D. Johnson, Director
Bob Cross, Director
B. J. Ralston President
</TABLE>
C-10
<PAGE>
<TABLE>
<S> <C>
Tracey Bowman Vice President
Eric Klopfer Vice President and
Secretary
Bart Schwartz Vice President and
Assistant Secretary
Jane Nutson Assistant Vice President
and Assistant Secretary
Peter Fontaine Treasurer
Janet Rocco Assistant Treasurer
</TABLE>
The principal address for the directors and officer, except for
Mr. Nutson, is CBL Equities, Inc., Twenty-Sixth Century Blvd.,
Nashville, TN 37214. The principal address for Mr. Nutson is
Willis Corroon Corporation, Wall Street Plaza, New York, NY
10005.
Commissions and Other Compensation Received By Each Principal
-------------------------------------------------------------
Underwriter During Last Fiscal Year
-----------------------------------
<TABLE>
<CAPTION>
Net Underwriting
Name of Principal Discounts and Compensation Brokerage Other
Underwriter Commissions on Redemption Commissions Compensation
- ---------------------- -------------------- ----------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Hornor, Townsend $403,603.91 0 0 0
& Kent, Inc.
CBL Equities, Inc. 0 0 0 0
</TABLE>
C-11
<PAGE>
Item 30. Location of Accounts and Records
--------------------------------
The name and address of the person who maintains physical possession
of each account, book or other documents required by Section 31(a)
of the Investment Company Act of 1940 is as follows:
The Penn Mutual Life Insurance Company
600 Dresher Road
Horsham, Pennsylvania 19044
Item 31. Management Services
-------------------
See "Administrative and Recordkeeping Services" in Part B of this
Registration Statement.
Item 32. Undertakings
------------
The Penn Mutual Life Insurance Company hereby undertakes:
---------------------------------------------------------
(a) to file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement
are never more than 16 months old for so long as payments
under the variable annuity contracts may be accepted;
(b) to include either (1) as part of any application to purchase
a contract or account offered by the prospectus, a space
that an applicant can check to request a statement of
additional information, or (2) a post card or similar
written communication affixed to or included in the
prospectus that the applicant can remove to send for a
statement of additional information;
(c) to deliver any statement of additional information and any
financial statements required to be made available under
Form N-4 promptly upon written or oral request.
Restrictions on withdrawals under Section 403(b) Contracts are
imposed in reliance upon, and in compliance with, a no-action letter
issued by the Chief of the Office of Insurance Products and Legal
Compliance of the Securities and Exchange Commission to the American
Council of Life Insurance on November 28, 1988.
C-12
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets the requirements of
Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment
No. 22 of this Registration Statement and has caused this Post-Effective
Amendment No. 22 to be signed on its behalf, in the Township of Horsham and
Commonwealth of Pennsylvania on this 28th day of April, 1997.
PENN MUTUAL VARIABLE ANNUITY ACCOUNT III
(Registrant)
By: THE PENN MUTUAL LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Robert E. Chappell
Robert E. Chappell
Chairman of the Board of Trustees
and Chief Executive Officer
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons, in the capacities indicated,
on the 28th day of April, 1997.
<TABLE>
<CAPTION>
Signature Title
- --------- -----
<S> <C>
/s/ Robert E. Chappell Chairman of the Board of Trustees
- ------------------------- and Chief Executive Officer
Robert E. Chappell
/s/ Nancy S. Brodie Executive Vice President and
- ------------------------- Chief Financial Officer
Nancy S. Brodie
*JAMES A. HAGEN Trustee
*PHILLIP E. LIPPINCOTT Trustee
*JOHN F. MCCAUGHAN Trustee
*ALAN B. MILLER Trustee
*DANIEL J. TORAN Trustee
*NORMAN T. WILDE, JR. Trustee
*WESLEY S. WILLIAMS, JR. Trustee
*By:/s/ Robert E. Chappell
---------------------------
Robert E. Chappell,
attorney-in-fact
</TABLE>
<PAGE>
EXHIBIT INDEX
EX-99.B8(f) Participation Agreement between The Penn Mutual Life
Insurance Company and Morgan Stanley Universal Funds, Inc.
EX-99.B 10(a) Consent of Coopers & Lybrand L.L.P.
EX-99.B 10(b) Consent of Morgan, Lewis & Bockius.
EX-99.B 13 Schedule for Computation of Performance Quotations.
EX-99.B 14 Powers of Attorney for Trustees.
C-15
<PAGE>
EXHIBIT 99.B8(f)
PARTICIPATION AGREEMENT
Among
MORGAN STANLEY UNIVERSAL FUNDS, INC.,
MORGAN STANLEY ASSET MANAGEMENT INC.
MILLER ANDERSON & SHERRERD, LLP
and
THE PENN MUTUAL LIFE INSURANCE COMPANY
DATED AS OF
MARCH __, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
- ----------------- ----
<S> <C> <C>
ARTICLE I. Purchase of Fund Shares 2
ARTICLE II Representations and Warranties 4
ARTICLE III. Prospectuses, Reports to Shareholders
and Proxy Statements, Voting 6
ARTICLE IV. Sales Material and Information 8
ARTICLE V. Fees and Expenses 9
ARTICLE VI. Diversification 10
ARTICLE VII. Potential Conflicts 10
ARTICLE VIII. Indemnification 12
ARTICLE IX. Applicable Law 18
ARTICLE X. Termination 18
ARTICLE XI. Notices 20
ARTICLE XII. Miscellaneous 21
SCHEDULE A Separate Accounts and Contracts A-1
SCHEDULE B Proxy Voting Procedures B-1
</TABLE>
<PAGE>
THIS AGREEMENT, made and entered into as of the __ day of March, 1997
by and among The Penn Mutual Life Insurance Company (hereinafter the
"Company"), a Pennsylvania life insurance company, on its own behalf and on
behalf of each separate account of the Company set forth on Schedule A
hereto as may be amended from time to time (each such account hereinafter
referred to as the "Account"), and MORGAN STANLEY UNIVERSAL FUNDS, INC.
(hereinafter the "Fund"), a Maryland corporation, and MORGAN STANLEY ASSET
MANAGEMENT INC. and MILLER ANDERSON & SHERRERD, LLP (hereinafter
collectively the "Advisers" and individually the "Adviser"), a Delaware
corporation and a Pennsylvania limited liability partnership, respectively.
WHEREAS, the Fund engages in business as an open-end management investment
company and is available to act as (i) the investment vehicle for separate
accounts established by insurance companies for individual and group life
insurance policies and annuity contracts with variable accumulation and/ or
pay-out provisions (hereinafter referred to individually and/or collectively as
"Variable Insurance Products") and (ii) the investment vehicle for certain
qualified pension and retirement plans (hereinafter "Qualified Plans"); and
WHEREAS, insurance companies desiring to utilize the Fund as an investment
vehicle under their Variable Insurance Contracts enter into participation
agreements with the Fund and the Advisers (the "Participating Insurance
Companies");
WHEREAS, shares of the Fund are divided into several series of shares, each
representing the interest in a particular managed portfolio of securities and
other assets, any one or more of which may be made available under this
Agreement, as may be amended from time to time by mutual agreement of the
parties hereto (each such series hereinafter referred to as a "Portfolio"); and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission, dated September 19, 1996 (File No. 812-10118), granting
Participating Insurance Companies and Variable Insurance Product separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a), and
15(b) of the Investment Company Act of 1940, as amended (hereinafter the "1940
Act"), and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent
necessary to permit shares of the Fund to be sold to and held by Variable
Annuity Product separate accounts of both affiliated and unaffiliated life
insurance companies and Qualified Plans (hereinafter the "Shared Funding
Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
<PAGE>
WHEREAS, each Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and
WHEREAS, each Adviser manages certain Portfolios of the Fund; and
WHEREAS, Morgan Stanley & Co. Incorporated (the "Underwriter") is
registered as a broker/dealer under the Securities Exchange Act of 1934, as
amended (hereinafter the "1934 Act"), is a member in good standing of the
National Association of Securities Dealers, Inc. (hereinafter "NASD") and serves
as principal underwriter of the shares of the Fund; and
WHEREAS, the Company has registered or will register certain Variable
Insurance Products under the 1933 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution or under authority of the Board of
Directors of the Company, on the date shown for such Account on Schedule A
hereto, to set aside and invest assets attributable to the aforesaid Variable
Insurance Product; and
WHEREAS, the Company has registered or will register each Account as a unit
investment trust under the 1940 Act; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Variable Insurance Products and
the Underwriter is authorized to sell such shares to each such Account at net
asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Purchase of Fund Shares
1.1 The Fund agrees to make available for purchase by the Company shares of
the Fund and shall execute orders placed for each Account on a daily basis at
the net asset value next computed after receipt by the Fund or its designee of
such order. For purposes of this Section 1.1, the Company shall be the designee
of the Fund for receipt of such orders from each Account and receipt by such
designee shall constitute receipt by the Fund; provided that the Fund receives
notice of such order by 10:00 a.m. Eastern time on the next following Business
Day. "Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which the Fund calculates its net asset value pursuant
to the rules of the Securities and Exchange Commission.
2
<PAGE>
1.2. The Fund, so long as this Agreement is in effect, agrees to make
its shares available indefinitely for purchase at the applicable net asset value
per share by the Company and its Accounts on those days on which the Fund
calculates its net asset value pursuant to rules of the Securities and Exchange
Commission and the Fund shall use reasonable efforts to calculate such net asset
value on each day which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter
the "Board") may refuse to permit the Fund to sell shares of any Portfolio to
any person, or suspend or terminate the offering of shares of any Portfolio if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Board acting in good faith and in light of
their fiduciary duties under federal and any applicable state laws, necessary in
the best interests of the shareholders of such Portfolio.
1.3. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts and to certain
Qualified Plans. No shares of any Portfolio will be sold to the general public.
1.4. The Fund will not make its shares available for purchase by any
insurance company or separate account unless an agreement containing provisions
substantially the same as Articles I, III, V, VII and Section 2.5 of Article II
of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt by
the Fund or its designee of the request for redemption. For purposes of this
Section 1.5, the Company shall be the designee of the Fund for receipt of
requests for redemption from each Account and receipt by such designee shall
constitute receipt by the Fund; provided that the Fund receives notice of such
request for redemption on the next following Business Day.
1.6. The Company agrees that purchases and redemptions of Portfolio
shares offered by the then current prospectus of the Fund shall be made in
accordance with the provisions of such prospectus. The Variable Insurance
Products issued by the Company, under which amounts may be invested in the Fund
(hereinafter the "Contracts"), are listed on Schedule A attached hereto and
incorporated herein by reference, as such Schedule A may be amended from time to
time by mutual written agreement of all of the parties hereto. The Company will
give the Fund and the Adviser 45 days written notice of its intention to make
available in the future, as a funding vehicle under the Contracts, any other
investment company.
1.7. The Company shall pay for Fund shares on the next Business Day
after an order purchase Fund shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire. For
purposes of Section 2.10 and 2.11, upon receipt by the Fund of the federal funds
so wired, such funds shall
3
<PAGE>
cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for each
Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio. The
Company reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.10. The Fund shall make the net asset value per share for each Portfolio
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated (normally by 6:30 p.m. Eastern time)
and shall use its best efforts to make such net asset value per share available
by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts are or will be
registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws
and that the sale of the Contracts shall comply in all material respects with
state insurance suitability requirements. The Company further represents and
warrants that it is an insurance company duly organized and in good standing
under applicable law and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under Section 406.2 of the Pennsylvania Insurance Code and has registered or,
prior to any issuance or sale of the Contracts, will register each Account as a
unit investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts.
2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Maryland and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 1940 Act. The Fund shall amend the registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its
shares. The Fund shall register and qualify the shares for sale in
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accordance with the laws of the various states only if and to the extent deemed
advisable by the Fund.
2.3 The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not qualify in the
future.
2.4 The Company represents that the Contracts are currently treated as life
insurance policies or annuity contracts, under applicable provisions of the
Code and that it will make every effort to maintain such treatment and that it
will notify the Fund immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.5 The Fund represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the 1940 Act, the Fund
undertakes to have a 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.
2.6 The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Fund represents that the Fund's investment policies, fees and
expenses are and shall at all times remain in compliance with the laws of the
State of Maryland and the Fund represents that their respective operations are
at all times remain in material compliance with the laws of the State of
Maryland to the extent required to perform the Agreement.
2.7 The Fund represents that it is lawfully organized and validly existing
under the laws of the State of Maryland and that it does and will comply in all
material respects with the 1940 Act.
2.8 Each Adviser represents and warrants that it is and shall remain duly
registered in all material respects under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
compliance in all material respects with the laws of its state of domicile and
any applicable state and federal securities laws.
2.9 The Fund represents and warrants that its directors, officers,
employees, and other individuals/entities dealing with the money and/or
securities of the Fund are and shall 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
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promulgated from time to time. The aforesaid blanket fidelity bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.10. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Fund are covered by a blanket fidelity
bond or similar coverage, in an amount not less $5 million. The aforesaid
includes coverage for larceny and embezzlement is issued by a reputable bonding
company. The Company agrees to make all reasonable efforts to see that this
bond or another bond containing these provisions is always in effect, and agrees
to notify the Fund and the Underwriter in the event that such coverage no longer
applies.
ARTICLE III. Prospectuses, Reports to Shareholders and Proxy Statements; Voting
3.1. The Fund or its designee shall provide the Company with as many
printed copies of the Fund's current prospectus and statement of additional
information as the Company may reasonably request. If requested by the Company,
in lieu of providing printed copies the Fund shall provide camera-ready film or
computer diskettes containing the Fund's prospectus and statement of additional
information, and such other assistance as is reasonably necessary in order for
the Company once each year (or more frequently if the prospectus and/or
statement of additional information for the Fund is amended during the year) to
have the prospectus for the Contracts and the Fund's prospectus printed together
in one document, and to have the statement of additional information for the
Fund and the statement of additional information for the Contracts printed
together in one document. Alternatively, the Company may print the Fund's
prospectus and/or its statement of additional information in combination with
other fund companies' prospectuses and statements of additional information.
3.2. Except as provided in this Section 3.2, all expenses of printing and
distributing Fund prospectuses and statements of additional information shall be
the expense of the Company. For prospectuses and statements of additional
information provided by the Company to its existing owners of Contracts in order
to update disclosure as required by the 1933 Act and/or the 1940 Act, the cost
of printing shall be borne by the Fund. If the Company chooses to receive
camera-ready film or computer diskettes in lieu of receiving printed copies of
the Fund's prospectus, the Fund will reimburse the Company in an amount equal to
the product of x and y where x is the number of such prospectuses distributed to
owners of the Contracts, and y is the Fund's per unit cost of typesetting and
printing the Fund's prospectus. The same procedures shall be followed with
respect to the Fund's statement of additional information. The Company agrees to
provide the Fund or its designee with such information as may be reasonably
requested by the Fund to assure that the Fund's expenses do not include the
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cost of printing any prospectuses or statements of additional information other
than those actually distributed to existing owners of the Contracts.
3.3 The Fund's statement of additional information shall be obtainable
from the Fund, the Company or such other person as the Fund may designate, as
agreed upon by the parties.
3.4. The Fund, at its expense, shall provide the Company with copies of its
proxy statements, reports to shareholders, and other communications (except for
prospectuses and statements of additional information, which are covered in
section 3.1) to shareholders in such quantity as the Company shall reasonably
require for distributing to Contract owners.
3.5. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) Vote the Fund shares in accordance with instructions
received from Contract owners; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of such
Portfolio for which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law. The Fund and the Company shall follow the procedures, and
shall have the corresponding responsibilities, for the handling of proxy and
voting instruction solicitations, as set forth in Schedule B attached hereto and
incorporated herein by reference. Participating Insurance Companies shall be
responsible for ensuring that each of their separate accounts participating in
the Fund calculates voting privileges in a manner consistent with the standards
set forth on Schedule B, which standards will also be provided to the other
Participating Insurance Companies.
3.6. The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
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, the Fund will act in
accordance with the Securities and Exchange Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of directors
and with whatever rules the Commission may promulgate with respect thereto.
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3.7. The Fund shall use reasonable efforts to provide Fund prospectuses,
reports to shareholders, proxy materials and other Fund communications (or
camera-ready equivalents) to the Company sufficiently in advance of the
Company's mailing dates to enable the Company to complete, at reasonable cost,
the printing, assembling and/or distribution of the communications in accordance
with applicable laws and regulations.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund or the Adviser(s) is named, at least ten Business Days prior to
its use. No such material shall be used if the Fund or its designee reasonably
objects to such use within ten Business Days after receipt of such material.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee,
except with the permission of the Fund.
4.3. The Fund or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material in which the Company and/or its separate account(s)
is named at least ten Business Days prior to its use.
No such material shall be used if the Company or its designee
reasonably objects to such use within ten Business Days after receipt of such
material.
4.4. The Fund and the Advisers shall not give any information or make any
representations on behalf of the Company or concerning the Company, each
Account, or the Contracts, other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that
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<PAGE>
relate to the Fund or its shares, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other regulatory
authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no action
letters, and all amendments to any of the above, that relate to the investment
in the Fund under the Contracts, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other regulatory
authorities.
4.7. For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, andy of the following
that refer to the Fund or any affiliate of the Fund: 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), 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, and registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
5.1. The Fund shall pay no fee or other compensation to the Company under
this Agreement, except that if the Fund or any Portfolio adopts and implements a
plan pursuant to Rule 12b-1 to finance distribution expenses, then the
Underwriter may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Underwriter in writing.
5.2. All expenses incident to performance by the Fund under this Agreement
shall be paid by the Fund. The Fund shall see to it that all its shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by the Fund, in accordance with
applicable state laws prior to their sale. The Fund shall bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of
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<PAGE>
all statements and notices required by any federal or state law, and all taxes
on the issuance or transfer of the Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.
ARTICLE VI. Diversification
6.1. The Fund will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable contracts
under the Code and the regulations issued thereunder. Without limiting the scope
of the foregoing, the Fund will at all times comply with Section 817(h) of the
Code and Treasury Regulation 1.817-5, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts and
any amendments or other modifications to such Section or Regulations. In the
event of a breach of this Article VI by the Fund, it will take all reasonable
steps (a) to notify Company of such breach and (b) to adequately diversify the
Fund so as to achieve compliance within the grace period afforded by Regulation
817-5.
ARTICLE VII. Potential Conflicts
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
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 Portfolio are being managed; (e) a difference in voting instructions given
by Variable Insurance Product owners; or (f) a decision by a Participating
Insurance Company to disregard the voting instructions of contract owners. The
Board shall promptly inform the Company if it determines that an irreconcilable
material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of which
it is aware to the Board. The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order, by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever contract owner voting instructions are
disregarded.
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7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their 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 irreconcilable material conflict, up to and including: (1)
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected Contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance policy
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2) establishing, a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision by
the Company to disregard contact owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such Account
(at the Company's expense); provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested members
of the Board.
7.5 If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to the Company conflicts with the
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Fund and terminate this Agreement with respect to
such Account within six months after the Board informs the Company in writing
that it has determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested members of the Board. Until the
end of the foregoing six month period, the Underwriter and Fund shall continue
to accept and implement orders by the Company for the purchase (and redemption)
of shares of the Fund.
7.6 For purposes of Sections 7.3 through 7.6 of this Agreement, a majority
of the disinterested members of the Board shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Fund be required to establish a new funding medium for the Contracts.
The Company shall not be required by Section 7.3 to establish a new funding
medium for the Contracts if an offer to do so has been declined by vote of a
majority of Contract owners materially adversely affected by the irreconcilable
material conflict.
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7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Share Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall
continue in effect only to the extent that terms and conditions substantially
identical to such Sections are contained in such Rule(s) as so amended or
adopted.
ARTICLE VIII. Indemnification
8.1. Indemnification By The Company
------------------------------
8.1(a) The Company agrees to indemnify and hold harmless the Fund and each
member of the Board and officers, and each Adviser and each director and officer
of each Adviser, and each person, if any, who controls the Fund or the Adviser
within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" and individually, "Indemnified Party," for purposes of
this Section 8.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Company)
or litigation (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements are related to the sale or
acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus for the Contracts or contained in
the Contracts or sales literature 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 is such statement or
omission or such alleged statement or omission was made in reliance
upon and in conformity with information furnished to the Company by or
on behalf of the Fund for use in the registration statement or
prospectus for the Contracts or in the Contracts or sales literature
(or any amendment or supplement) or
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otherwise for use in connection with the sale of the Contracts or Fund shares;
or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in the
registration statement, prospectus or sales literature of the Fund not supplied
by the Company, or persons under its control and other than statements or
representations authorized by the Fund or an Adviser) or unlawful conduct of the
Company or persons under its control, with respect to the sale or distribution
of the Contracts or Fund shares; or
(iii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or any amendment thereof
or supplement thereto 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 the Fund by or on behalf of the
Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company, as limited by and in accordance with the provisions of Sections 8.1(b)
and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim 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
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notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action is
brought otherwise than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Company shall be
entitled to participate, at its own expense, in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from the Company to
such party of the Company's election to assume the defense thereof, the
Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.
8.2 Indemnification by the Advisers
-------------------------------
8.2(a) Each Adviser agrees, with respect to each Portfolio that it
manages, to indemnify and hold harmless the Company and each of its directors
and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
and individually, "Indemnified Party," for purposes of this Section 8.2) against
any and all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Adviser) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements
are related to the sale or acquisition of shares of the Portfolio that it
manages or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or sales literature of the
Fund (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
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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 the Fund by or on behalf of the
Company for use in the registration statement or prospectus for
the Fund or in sales literature (or any amendment or supplement)
or otherwise for use in connection with the sale of the Contracts
or Portfolios shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus or sales
literature for the Contracts not supplied by the Fund or persons
under its control and other than statements or representations
authorized by the Company) or unlawful conduct of the Fund,
Adviser(s) or Underwriter or persons under their control, with
respect to the sale or distribution of the Contracts or Portfolio
shares; or
(iii) arise out of or as a result of any untrue statement or
alleged untrue statement of a material fact contained in a
registration statement, prospectus, or sales literature covering
the Contracts, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or
omission was made in reliance upon information furnished to the
Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the terms of
this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Adviser in this
Agreement or arise out of or result from any other material breach
of this Agreement by the Adviser; as limited by and in accordance
with the provisions of Sections 8.2(b) and 8.2(c) hereof.
8.2(b). An Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or
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gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement.
8.2(c). An Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim 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 the Adviser of
any such claim shall not relieve the Adviser from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Adviser to such party of the Adviser's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Adviser will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
8.3. Indemnification by the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless the Company, and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (hereinafter
collectively, the "Indemnified Parties" and individually, "Indemnified Party,"
for purposes of this Section 8.3) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Fund) or litigation (including legal and other expenses) to which the
Indemnified Parties may become subject under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements result from the gross negligence, bad
faith or willful
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misconduct of the Board or any member thereof, are related to the operations of
the Fund and:
(i) arise as a result of any failure by the Fund to
provide the services and furnish the materials under the terms
of this Agreement; or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this Agreement or
arise out of or result from any other material breach of this
Agreement by the Fund;
8.3(b). The Fund shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as may arise from such Indemnified
Party's willful misfeasance, bad faith, or gross negligence in the performance
of such Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations and duties under this Agreement.
8.3(c). The Fund shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Fund in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim 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 the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Fund will be entitled to participate, at its own
expense, in the defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Fund to such party of the Fund's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Fund will not be liable to such party
under this Agreement for any legal or other expenses subsequently incurred by
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.3(d). The Company agrees promptly to notify the Fund of the commencement
of any litigation or proceedings against it or any of its respective officers or
directors in connection with this Agreement, the
17
<PAGE>
issuance or sale of the Contracts, with respect to the operation of either
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the Securities and
Exchange Commission may grant (including, but not limited to, the Shared Funding
Exemptive Order) and the terms hereof shall be interpreted and construed in
accordance therewith.
ARTICLE X. Termination
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason by sixty (60) days advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio based upon the Company's determination
that shares of such Portfolio is not reasonably available to meet the
requirements of the Contracts; or
(c) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event any of the Portfolio's shares
are not registered, issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the Company; or
(d) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such Portfolio ceases to
qualify as a Regulated Investment Company under Subchapter M of the Code or
under any successor or similar provision, or if the Company reasonably believes
that the Fund may fail to so qualify; or
18
<PAGE>
(e) termination by the Company by written notice to the Fund and the
Adviser with respect to any Portfolio in the event that such Portfolio fails to
meet the diversification requirements specified in Article VI hereof; or
(f) termination by either the Fund by written notice to the Company if
the Fund shall determine, in its sole judgment exercised in good faith, that the
Company and/or its affiliated companies has suffered a material adverse change
in its business, operations, financial condition or prospects since the date of
this Agreement or is the subject of material adverse publicity, or
(g) termination by the Company by written notice to the Fund and the
Adviser, if the Company shall determine, in its sole judgment exercised in good
faith, that either the Fund or the Adviser has suffered a material adverse
change in its business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse publicity; or
(h) termination by the Fund or the Adviser by written notice to the
Company, if the Company gives the Fund and the Adviser the written notice
specified in Section 1.6 hereof and at the time such notice was given there was
no notice of termination outstanding under any other provision of this
Agreement; provided, however any termination under this Section 10.1(h) shall be
effective forty five (45) days after the notice specified in Section 1.6 was
given.
10.2 Notwithstanding any termination of this Agreement, the Fund shall
at the option of the 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"). Specifically, without
limitation, the owners of the Existing Contracts shall be permitted to direct
reallocation of investments in the Fund, redemption of investments in the Fund
and/or investment in the Fund upon the making of additional purchase payments
under the Existing Contracts. The parties agree that this Section 10.2 shall not
apply to any terminations under Article VII and the effect of such Article VII
terminations shall be governed by Article VII of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as distinct from Fund shares attributable to the Company's assets
held in the Account) except (i) as necessary to implement Contract Owner
initiated or approved transactions, or (ii) as required by state
19
<PAGE>
and/or federal laws or regulations or judicial or other legal precedent
of general application (hereinafter referred to as a "Legally Required
Redemption") or (iii) as permitted by an order of the Securities and
Exchange Commission pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Fund the opinion of
counsel for the Company (which counsel shall be reasonably satisfactory
to the Fund) to the effect that any redemption pursuant to clause (ii)
above is a Legally Required Redemption. Furthermore, except in cases
where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Portfolio that was
otherwise available under the Contracts without first giving the Fund 90
days prior written notice of its intention to do so.
ARTICLE. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such party set
forth below or at such other address as such party may from time to time
specify in writing to the other party.
If to the Fund:
Morgan Stanley Universal Funds, Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Harold J. Schaaff, Jr., Esq.
If to Adviser:
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
Attention: Harold J. Schaaff, Jr., Esq.
If to Adviser:
Miller Anderson & Sherrerd, LLP
One Tower Bridge
West Conshohocken, Pennsylvania 19428
Attention: Douglas Kugler
If to the Company:
20
<PAGE>
The Penn Mutual Life Insurance Company
Independence Square
Philadelphia, Pennsylvania 19172
Attention: James B. McElwain
ARTICLE XII. Miscellaneous
12.1. All persons dealing with the Fund must look solely to the property
of the Fund for the enforcement of any claims against the Fund as neither the
Board, officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Fund.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information until such time as it may
come into the public domain without the express written consent of the affected
party.
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Securities and Exchange Commission, the National Association of Securities
Dealers and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the California Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may
21
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified above.
THE PENN MUTUAL LIFE INSURANCE COMPANY
By: /s/ James B. McElwain
------------------------------
Name: James B. McElwain
Title: Assistant Vice President
MORGAN STANLEY UNIVERSAL FUNDS, INC.
By:
-------------------------------
Name:
Title:
MORGAN STANLEY ASSET MANAGEMENT INC.
By:
-------------------------------
Name:
Title:
MILLER ANDERSON & SHERRERD, LLP
By:
-------------------------------
Name:
Title:
23
<PAGE>
SCHEDULE A
SEPARATE ACCOUNTS AND CONTRACTS
-------------------------------
Name of Separate Account and Form Number and Name of Contract
Date Established by Board of Directors Funded by Separate Account
- -------------------------------------- --------------------------
Penn Mutual Variable Diversifier II
Annuity Account III - Apr. 13, 1982
Penn Mutual Variable Cornerstone VUL
Life Account I - Jan. 27, 1987 Cornerstone VUL II
Variable Estatemax
A-1
<PAGE>
SCHEDULE B
PROXY VOTING PROCEDURES
-----------------------
The following is a list of procedures and corresponding responsibilities for the
handling of proxies and voting instructions relating to the Fund. The defined
terms herein shall have the meanings assigned in the Participation Agreement
except that the term "Company" shall also include the department or third party
assigned by the Company to perform the steps delineated below.
. The proxy proposals are given to the Company by the Fund as early as
possible before the date set by the Fund for the shareholder meeting to
enable the Company to consider and prepare for the solicitation of
voting instructions from owners of the Contracts and to facilitate the
establishment of tabulation procedures. At this time the Fund will
inform the Company of the Record, Mailing and Meeting dates. This will
be done verbally approximately two months before meeting.
. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contract owner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for account
adjustments made after this date that could affect the status of the
Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in this Step #2. The Company will use its best efforts to call
in the number of Customers to the Fund, as soon as possible, but no
later than two weeks after the Record Date.
. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of voting,
instruction solicitation material. The Fund will provide the last Annual
Report to the Company pursuant to the terms of Section 3.3 of the
Agreement to which this Schedule relates.
. The text and format for the Voting Instruction Cards ("Cards" or "Card")
is provided to the Company by the Fund. The Company, at its expense,
shall produce and personalize the Voting Instruction Cards. The Fund or
it affiliate must approve the Card before it is printed. Allow
approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
B-1
<PAGE>
. name (legal name as found on account registration)
. address
. fund or account number
. coding to state number of units
. individual Card number for use in tracking and verification of
votes (already on Cards as printed by the Fund).
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
. During this time, the Fund will develop, produce and pay for the Notice of
Proxy and the Proxy Statement (one document). Printed and folded notices
and statements will be sent to Company for insertion into envelopes
(envelopes and return envelopes are provided and paid for by the Company).
Contents of envelope sent to Customers by the Company will include:
. Voting Instruction Card(s)
. One proxy notice and statement (one document)
. return envelope (postage pre-paid by Company) addressed to the
Company or its tabulation agent
. "urge buckslip" - optional, but recommended. (This is a small,
single sheet of paper that requests Customers to vote as quickly
as possible and that their vote is important. One copy will be
supplied by the Fund.)
. cover letter - optional, supplied by Company and reviewed and
approved in advanced by the Fund
. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company reviews and
approves the contents of the mailing package to ensure correctness and
completeness. Copy of this approval sent to the Fund.
. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
---
including,) the meeting, counting backwards.
. Collection and tabulation of Cards begins. Tabulation usually takes place
in another department or another vendor depending on process used. An often
used procedure is to sort Cards on arrival by proposal into vote categories
of all yes, no, or mixed replies, and to begin data entry.
B-2
<PAGE>
Note: Postmarks are not generally needed. A need for postmark information would
be due to an insurance company's internal procedure and has not been required by
the Fund in the past.
Signatures on Card checked against legal name on account registration which was
printed on the Card.
Note: For Example, if the account registration is under "John A. Smith,
Trustee," then that is the exact legal name to be printed on the Card and is the
signature needed on the Card.
If Cards are mutilated, or for any reason are illegible or are not signed
properly, they are sent back to Customer with an explanatory letter and a new
Card and return envelope. The mutilated or illegible Card is disregarded and
considered to be not received for purposes of vote tabulation. Any Cards that
--- --------
have been "kicked out" (e.g. mutilated, illegible) of the procedure are "hand
verified," i.e., examined as to why they did not complete the system. Any
questions on those Cards are usually remedied individually.
There are various control procedures used to ensure proper tabulation of votes
and accuracy of that tabulation. The most prevalent is to sort the Cards as they
first arrive into categories depending upon their vote; an estimate of how the
vote is progressing may then be calculated. If the initial estimates and the
actual vote do not coincide, then an internal audit of that vote should occur.
This may entail a recount.
The actual tabulation of votes is done in units which is then converted to
shares. (It is very important that the Fund receives the tabulations stated in
terms of a percentage and the number of shares). The Fund must review and
------
approve tabulation format.
Final tabulation in shares is verbally given by the Company to the Fund on the
morning of the meeting not later than 10:00 a.m. Eastern time. The Fund may
request an earlier deadline if reasonable and if required to calculate the vote
in time for the meeting.
A Certification of Mailing and Authorization to Vote Shares will be required
from the Company as well as an original copy of the final vote. The Fund will
provide a standard form for each Certification.
The Company will be required to box and archive the Cards received from the
Customers. In the event that any vote is challenged or if otherwise necessary
for legal, regulatory, or accounting purposes, the Fund will be permitted
reasonable access to such Cards.
B-3
<PAGE>
. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
B-4
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the following with respect to Post-Effective Amendment No.
22 and Amendment No. 19 to the Registration Statement on Form N-4 (File No. 2-
77283), filed on behalf of The Penn Mutual Life Insurance Company and Penn
Mutual Variable Annuity Account III under the Securities Act of 1933 and the
Investment Company Act of 1940:
1. The inclusion in the Statement of Additional Information of our report
dated January 28, 1997 on our audits of the statutory financial
statements of The Penn Mutual Life Insurance Company as of
December 31, 1996 and 1995 and for the three years in the period ended
December 31, 1996.
2. The inclusion in the Statement of Additional Information of our report
dated April 7, 1997, on our audit of the financial statements of Penn
Mutual Variable Annuity Account III as of December 31, 1996 and for the
year or period then ended.
3. The reference to our Firm under the heading of "Experts" in the
Registration Statement.
/s/ COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 28, 1997
<PAGE>
Exhibit 10(b)
[LETTERHEAD OF MORGAN, LEWIS & BOCKIUS LLP]
April 28, 1997
Board of Trustees
The Penn Mutual Life Insurance Company
Philadelphia, PA 19172
Re: Penn Mutual Variable Annuity Account III
SEC Registration No. 2-77283
----------------------------------------
Dear Ladies and Gentlemen:
We hereby consent to the reference to our name under the caption "Legal Matters"
in the Prospectus filed as part of this Post-Effective Amendment No. 22. In
giving this consent, we do not admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
Morgan, Lewis & Bockius LLP
<PAGE>
<TABLE>
<CAPTION>
Table 1A Diversifier II DIV 2 TABLE 1A
Five Ten From
One Year Years Years Inception
Q=Qualified inception default Ended Ended Ended Through
Fund N=Nonqualified date amount 12/31/96 12/31/96 12/31/96 12/31/96
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALFND Q 2/28/89 $1,000.00 -1.21% 5.99% 0.00% 8.74%
- ------------------------------------------------------------------------------------------------------------------
FIDASM Q 9/6/89 $1,000.00 6.02% 9.24% 0.00% 10.29%
- ------------------------------------------------------------------------------------------------------------------
FIDEQI Q 10/9/86 $1,000.00 5.64% 15.63% 12.17% 11.87%
- ------------------------------------------------------------------------------------------------------------------
FIDGRO Q 10/9/86 $1,000.00 5.99% 12.98% 13.62% 13.30%
- ------------------------------------------------------------------------------------------------------------------
FIDIND Q 8/27/92 $1,000.00 13.82% 0.00% 0.00% 15.18%
- ------------------------------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $1,000.00 6.99% 10.85% 13.12% 13.34%
- ------------------------------------------------------------------------------------------------------------------
GROWEQ N 6/1/83 $1,000.00 10.41% 8.29% 10.26% 10.12%
- ------------------------------------------------------------------------------------------------------------------
GROWEQ Q 6/11/83 $1,000.00 10.41% 8.29% 10.26% 10.35%
- ------------------------------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $1,000.00 5.16% 9.09% 7.91% 8.91%
- ------------------------------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $1,000.00 7.78% 0.00% 0.00% 11.95%
- ------------------------------------------------------------------------------------------------------------------
LIMMAT Q 9/10/84 $1,000.00 -3.52% 3.41% 5.33% 6.94%
- ------------------------------------------------------------------------------------------------------------------
PARTNR Q 3/24/94 $1,000.00 20.19% 0.00% 0.00% 18.53%
- ------------------------------------------------------------------------------------------------------------------
QUALBD Q 3/17/87 $1,000.00 -3.80% 5.05% 0.00% 6.62%
- ------------------------------------------------------------------------------------------------------------------
SMLCAP Q 3/1/95 $1,000.00 10.76% 0.00% 0.00% 12.79%
- ------------------------------------------------------------------------------------------------------------------
TCIGRO Q 11/20/87 $1,000.00 -11.68% 3.90% 0.00% 9.17%
- ------------------------------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $1,000.00 15.40% 14.39% 0.00% 11.70%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1B Diversifier II DIV 2 TABLE 1B
One Five Ten From
Year Years Years Inception
Q = Qualified Inception default Ended Ended Ended Through
Fund N = Nonqualified date amount 12/31/96 12/31/96 12/31/96 12/31/96
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALFND Q 2/28/89 $1,000.00 -1.21% 5.89% 0.00% 8.49%
- -------------------------------------------------------------------------------------------------------------
FIDASM Q 9/6/89 $1,000.00 6.02% 9.14% 0.00% 10.01%
- -------------------------------------------------------------------------------------------------------------
FIDEQI Q 10/9/86 $1,000.00 5.64% 15.52% 12.06% 11.87%
- -------------------------------------------------------------------------------------------------------------
FIDGRO Q 10/9/86 $1,000.00 5.99% 12.88% 13.52% 13.30%
- -------------------------------------------------------------------------------------------------------------
FIDIND Q 8/27/92 $1,000.00 13.82% 0.00% 0.00% 15.06%
- -------------------------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $1,000.00 6.99% 10.74% 13.02% 13.34%
- -------------------------------------------------------------------------------------------------------------
GROWEQ N 6/1/83 $1,000.00 10.41% 8.18% 10.16% 10.12%
- -------------------------------------------------------------------------------------------------------------
GROWEQ Q 8/11/83 $1,000.00 10.41% 8.18% 10.16% 10.35%
- -------------------------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $1,000.00 5.16% 8.99% 7.82% 8.91%
- -------------------------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $1,000.00 7.78% 0.00% 0.00% 11.83%
- -------------------------------------------------------------------------------------------------------------
LIMMAT Q 9/10/84 $1,000.00 -3.52% 3.31% 5.23% 6.94%
- -------------------------------------------------------------------------------------------------------------
PARTNR Q 3/24/94 $1,000.00 20.19% 0.00% 0.00% 18.53%
- -------------------------------------------------------------------------------------------------------------
QUALBO Q 3/17/87 $1,000.00 -3.80% 4.96% 0.00% 6.52%
- -------------------------------------------------------------------------------------------------------------
SMLCAP Q 3/1/95 $1,000.00 10.76% 0.00% 0.00% 12.79%
- -------------------------------------------------------------------------------------------------------------
TCIGRO Q 11/20/87 $1,000.00 -11.68% 3.81% 0.00% 9.06%
- -------------------------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $1,000.00 15.40% 14.28% 0.00% 11.60%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1C Diversifier II DIV 2 TABLE 1C
Five Ten From
One Year Years Years Inception
Q=Qualified Inception default Ended Ended Ended Through
fund N=Nonqualified date inception 12/31/96 12/31/96 12/31/96 12/31/96
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALFND Q 2/28/89 $1,000.00 0.67% 5.79% 0.00% 8.38%
- -------------------------------------------------------------------------------------------------------------------------
FIDASM Q 9/6/89 $1,000.00 8.15% 9.15% 0.00% 9.92%
- -------------------------------------------------------------------------------------------------------------------------
FIDEQI Q 10/9/86 $1,000.00 7.75% 15.71% 11.99% 11.87%
- -------------------------------------------------------------------------------------------------------------------------
FIDGRO Q 10/9/86 $1,000.00 8.13% 12.99% 13.46% 13.30%
- -------------------------------------------------------------------------------------------------------------------------
FIDIND Q 8/27/92 $1,000.00 16.48% 0.00% 0.00% 15.20%
- -------------------------------------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $1,000.00 9.23$ 10.80% 12.95% 13.34%
- -------------------------------------------------------------------------------------------------------------------------
GROWEQ N 6/1/83 $1,000.00 12.86% 8.16% 10.05% 10.12%
- -------------------------------------------------------------------------------------------------------------------------
GROWEQ Q 8/11/83 $1,000.00 12.86% 8.16% 10.05% 10.35%
- -------------------------------------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $1,000.00 7.25% 8.99% 7.66% 8.91%
- -------------------------------------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $1,000.00 10.05% 0.00% 0.00% 11.66%
- -------------------------------------------------------------------------------------------------------------------------
LIMMAT Q 9/10/84 $1,000.00 -1.68% 3.11% 5.01% 6.94%
- -------------------------------------------------------------------------------------------------------------------------
PARTNR Q 3/24/94 $1,000.00 23.26% 0.00% 0.00% 19.21%
- -------------------------------------------------------------------------------------------------------------------------
QUALBD Q 3/17/87 $1,000.00 -1.97% 4.82% 0.00% 6.33%
- -------------------------------------------------------------------------------------------------------------------------
SMLCAP Q 3/1/95 $1,000.00 13.21% 0.00% 0.00% 13.83%
- -------------------------------------------------------------------------------------------------------------------------
TCIGRO Q 11/20/87 $1,000.00 -9.95% 3.62% 0.00% 8.90%
- -------------------------------------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $1,000.00 18.19% 14.44% 0.00% 11.51%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1C Diversifier II DIV 2 TABLE 1D
One Year Years Years Inception
Q=Qualified Inception default Ended Ended Ended Through
fund N=Nonqualified date inception 12/31/96 12/31/96 12/31/96 12/31/96
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWEQ N 6/1/83 $1,000.00 12.54% 7.88% 10.12% 10.12%
- -------------------------------------------------------------------------------------------------------------------------
GROWEQ Q 8/11/83 $1,000.00 12.54% 7.88% 10.12% 10.35%
- -------------------------------------------------------------------------------------------------------------------------
QUALBD Q 3/17/87 $1,000.00 -1.95% 4.66% 0.00% 6.12%
- -------------------------------------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $1,000.00 17.62% 13.96% 0.00% 11.18%
- -------------------------------------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $1,000.00 9.06% 10.43% 12.98% 13.34%
- -------------------------------------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $1,000.00 7.19% 8.68% 7.78% 8.91%
- -------------------------------------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $1,000.00 9.85% 0.00% 0.00% 11.45%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
Table 2 Diversifier II DIV 2 TABLE 2
Five Ten From
One Year Years Years Inception
Q = Qualified inception default Ended Ended Ended Through
Fund N = Nonqualified date amount 12/31/96 12/31/96 12/31/96 12/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALFND Q 2/28/89 $1,000.00 5.44% 6.57% 0.00% 8.74%
- ------------------------------------------------------------------------------------------------------------------------------------
FIDASM Q 9/6/89 $1,000.00 13.15% 9.84% 0.00% 10.29%
- ------------------------------------------------------------------------------------------------------------------------------------
FIDEQI Q 10/9/86 $1,000.00 12.75% 16.26% 12.17% 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
FIDGRO Q 10/9/86 $1,000.00 13.13% 13.60% 13.62% 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
FIDIND Q 8/27/92 $1,000.00 21.48% 0.00% 0.00% 15.91%
- ------------------------------------------------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $1,000.00 14.23% 11.46% 13.12% 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
GROWEQ N 6/1/83 $1,000.00 17.86% 8.88% 10.26% 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
GROWEQ Q 6/11/83 $1,000.00 17.86% 8.88% 10.26% 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $1,000.00 12.25% 9.69% 7.91% 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $1,000.00 15.05% 0.00% 0.00% 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
LIMMAT Q 9/10/84 $1,000.00 2.97% 3.98% 5.33% 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
PARTNR Q 3/24/94 $1,000.00 28.28% 0.00% 0.00% 20.52%
- ------------------------------------------------------------------------------------------------------------------------------------
QUALBO Q 3/17/87 $1,000.00 2.68% 5.63% 0.00% 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
SMLCAP Q 3/1/95 $1,000.00 18.21% 0.00% 0.00% 16.24%
- ------------------------------------------------------------------------------------------------------------------------------------
TCIGRO Q 11/20/87 $1,000.00 -5.73% 4.48% 0.00% 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $1,000.00 23.19% 15.02% 0.00% 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 5
<PAGE>
<TABLE>
<CAPTION>
Table 3 Diversifier DIV 2 TABLE 3
Five Ten From
One Year Years Years Inception
Q=Qualified inception default Ended Ended Ended Through
fund N=Nonqualified date amount 12/31/96 12/31/96 12/31/96 12/31/96
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALFND Q 2/28/89 $10,000.00 5.54% 8.66% 0.00% 6.81%
- ----------------------------------------------------------------------------------------------
FIDASM Q 9/6/89 $10,000.00 13.17% 9.86% 0.00% 10.31%
- ----------------------------------------------------------------------------------------------
FIDEQI Q 10/9/86 $10,000.00 12.84% 16.34% 12.23% 11.94%
- ----------------------------------------------------------------------------------------------
FIDGAO Q 10/9/86 $10,000.00 13.26% 13.71% 13.70% 13.38%
- ----------------------------------------------------------------------------------------------
FIDIND Q 8/27/92 $10,000.00 21.63% 0.00% 0.00% 16.05%
- ----------------------------------------------------------------------------------------------
FLEXMN Q 7/31/84 $10,000.00 14.85% 11.98% 13.48% 13.66%
- ----------------------------------------------------------------------------------------------
GROWEQ N 6/1/83 $10,000.00 18.22% 9.22% 10.51% 10.34%
- ----------------------------------------------------------------------------------------------
GROWEQ Q 8/11/83 $10,000.00 18.22% 9.22% 10.51% 10.57%
- ----------------------------------------------------------------------------------------------
HIBOND Q 8/6/84 $10,000.00 12.43% 9.84% 8.06% 9.03%
- ----------------------------------------------------------------------------------------------
INTLEQ Q 11/1/92 $10,000.00 15.37% 0.00% 0.00% 13.00%
- ----------------------------------------------------------------------------------------------
LIMMAT Q 9/10/84 $10,000.00 3.00% 4.00% 5.35% 6.95%
- ----------------------------------------------------------------------------------------------
PARTNR Q 3/24/94 $10,000.00 28.43% 0.00% 0.00% 20.66%
- ----------------------------------------------------------------------------------------------
QUALBD Q 3/17/87 $10,000.00 2.82% 5.76% 0.00% 6.73%
- ----------------------------------------------------------------------------------------------
SMLCAP Q 3/1/95 $10,000.00 18.25% 0.00% 0.00% 16.28%
- ----------------------------------------------------------------------------------------------
TCIGRO Q 11/20/87 $10,000.00 -5.54% 4.65% 0.00% 9.31%
- ----------------------------------------------------------------------------------------------
VALUEQ Q 3/17/87 $10,000.00 23.58% 15.35% 0.00% 11.99%
- ----------------------------------------------------------------------------------------------
</TABLE>
Page 6
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=Nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 BALFND Q 12/31/95 12.489026 1000.000000 80.070295 0.000000 80.070295 1000.000000 -1.21%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/96 13.181800 1055.470619 80.070295 5.123325 74.946970 987.935970 -1.21%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/95 11.153657 1000.000000 89.656693 0.000000 89.656693 1000.000000 6.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/96 12.622550 1131.696089 89.656693 5.667385 83.989308 1060.159235 6.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/95 11.921222 1000.000000 83.884018 0.000000 83.884018 1000.000000 5.64%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/96 13.453420 1128.526925 83.884018 5.364227 78.519791 1056.359728 5.64%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/95 12.359885 1000.000000 80.906902 0.000000 80.906902 1000.000000 5.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/96 13.999957 1132.693144 80.906902 5.199278 75.707624 1059.903476 5.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/95 8.220260 1000.000000 121.650653 0.000000 121.650653 1000.000000 13.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/96 10.000000 1216.506534 121.650653 7.830991 113.819662 1138.196622 13.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/95 42.867835 1000.000000 23.327514 0.000000 23.327514 1000.000000 6.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/96 49.261868 1149.156891 23.327514 1.608483 21.719030 1069.920007 6.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/95 32.329694 1000.000000 30.931317 0.000000 30.931317 1000.000000 10.41%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/96 38.234636 1182.647630 30.931317 2.054859 28.876457 1104.080830 10.41%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/95 32.598304 1000.000000 30.676443 0.000000 30.676443 1000.000000 10.41%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/96 38.552321 1182.648060 30.676443 2.037927 28.638515 1104.081233 10.41%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/95 26.034837 1000.000000 38.410073 0.000000 38.410073 1000.000000 5.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/96 29.275542 1124.475717 38.410073 2.488493 35.921581 1051.623747 5.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/95 14.435244 1000.000000 69.274894 0.000000 69.274894 1000.000000 7.78%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/96 16.658717 1154.030857 69.274894 4.577420 64.697474 1077.776913 7.78%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/95 10.999577 1000.000000 90.912587 0.000000 90.912587 1000.000000 -3.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/96 11.329532 1029.997063 90.912587 5.751324 85.161262 964.837248 -3.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/95 7.785188 1000.000000 128.449050 0.000000 128.449050 1000.000000 20.19%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/96 10.000000 1284.490497 128.449050 8.259290 120.189760 1201.897595 20.19%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/95 18.466059 1000.000000 54.153407 0.000000 54.153407 1000.000000 -3.80%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/96 18.990158 1028.381746 54.153407 3.496972 50.656435 961.973696 -3.80%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 10.76%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 5.671036 83.840784 1107.642897 10.76%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/95 14.058113 1000.000000 71.133302 0.000000 71.133302 1000.000000 -11.68%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/96 13.282214 944.807742 71.133302 4.637998 66.495304 883.204854 -11.68%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/95 24.930081 1000.000000 40.112184 0.000000 40.112184 1000.000000 15.40%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/96 30.819233 1236.226750 40.112184 2.668538 37.443646 1153.984464 15.40%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 1 YR - Tbl 1b
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=Nonqualified Beginning # of units fee & deferred at end of Ending return for
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 BALFND Q 12/31/95 12.489026 1000.000000 80.070295 0.000000 80.070295 1000.000000 -1.21%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/96 13.181800 1055.470619 80.070295 5.123325 74.946970 987.935970 -1.21%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/95 11.153657 1000.000000 89.656693 0.000000 89.656693 1000.000000 6.02%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/96 12.622550 1131.696089 89.656693 5.667385 83.989308 1060.159235 6.02%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/95 11.921222 1000.000000 83.884018 0.000000 83.884018 1000.000000 5.64%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/96 13.453420 1128.526925 83.884018 5.364227 78.519791 1056.359728 5.64%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/95 12.359885 1000.000000 80.906902 0.000000 80.906902 1000.000000 5.99%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/96 13.999957 1132.693144 80.906902 5.199278 75.707624 1059.903476 5.99%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/95 8.220260 1000.000000 121.650653 0.000000 121.650653 1000.000000 13.82%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/96 10.000000 1216.506534 121.650653 7.830991 113.819662 1138.196622 13.82%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/95 42.867835 1000.000000 23.327514 0.000000 23.327514 1000.000000 6.99%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/96 49.261868 1149.156891 23.327514 1.608483 21.719030 1069.920007 6.99%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/95 32.329694 1000.000000 30.931317 0.000000 30.931317 1000.000000 10.41%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/96 38.234636 1182.647630 30.931317 2.054859 28.876457 1104.080830 10.41%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/95 32.598304 1000.000000 30.676443 0.000000 30.676443 1000.000000 10.41%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/96 38.552321 1182.648060 30.676443 2.037927 28.638515 1104.081233 10.41%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/95 26.034837 1000.000000 38.410073 0.000000 38.410073 1000.000000 5.16%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/96 29.275542 1124.475717 38.410073 2.488493 35.921581 1051.623747 5.16%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/95 14.435244 1000.000000 69.274894 0.000000 69.274894 1000.000000 7.78%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/96 16.658717 1154.030857 69.274894 4.577420 64.697474 1077.776913 7.78%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/95 10.999577 1000.000000 90.912587 0.000000 90.912587 1000.000000 -3.52%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/96 11.329532 1029.997063 90.912587 5.751324 85.161262 964.837248 -3.52%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/95 7.785188 1000.000000 128.449050 0.000000 128.449050 1000.000000 20.19%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/96 10.000000 1284.490497 128.449050 8.259290 120.189760 1201.897595 20.19%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/95 18.466059 1000.000000 54.153407 0.000000 54.153407 1000.000000 -3.80%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/96 18.990158 1028.381746 54.153407 3.496972 50.656435 961.973696 -3.80%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 10.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 5.671036 83.840784 1107.642897 10.76%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/95 14.058113 1000.000000 71.133302 0.000000 71.133302 1000.000000 -11.68%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/96 13.282214 944.807742 71.133302 4.637998 66.495304 883.204854 -11.68%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/95 24.930081 1000.000000 40.112184 0.000000 40.112184 1000.000000 15.40%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/96 30.819233 1236.226750 40.112184 2.668538 37.443646 1153.984464 15.40%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
Table 1C - Diversifier II Variable Contracts
<TABLE>
<CAPTION>
$30 contract Average
Q=qualified fee & # of units Annual Total
N=Nonqualified Beginning # of units deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 BALFND Q 12/31/95 12.489026 1000.000000 80.070295 0.000000 80.070295 1000.000000 0.67%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/96 13.181800 1055.470619 80.070295 3.703101 76.367195 1006.657088 0.67%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/95 11.153657 1000.000000 89.656693 0.000000 89.656693 1000.000000 8.15%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/96 12.622550 1131.696089 89.656693 3.980178 85.676515 1081.456089 8.15%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/95 11.921222 1000.000000 83.884018 0.000000 83.884018 1000.000000 7.75%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/96 13.453420 1128.526925 83.884018 3.796061 80.087957 1077.456925 7.75%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/95 12.359885 1000.000000 80.906902 0.000000 80.906902 1000.000000 8.13%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/96 13.999957 1132.693144 80.906902 3.673583 77.233319 1081.263144 8.13%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/95 8.220260 1000.000000 121.650653 0.000000 121.650653 1000.000000 16.48%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/96 10.000000 1216.506534 121.650653 5.167000 116.483653 1164.836534 16.48%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/95 42.867835 1000.000000 23.327514 0.000000 23.327514 1000.000000 9.23%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/96 49.261868 1149.156891 23.327514 1.153834 22.173680 1092.316891 9.23%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/95 32.329694 1000.000000 30.931317 0.000000 30.931317 1000.000000 12.86%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/96 38.234636 1182.647630 30.931317 1.413901 29.517415 1128.587630 12.86%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/95 32.598304 1000.000000 30.676443 0.000000 30.676443 1000.000000 12.86%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/96 38.552321 1182.648060 30.676443 1.402250 29.274192 1128.588060 12.86%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/95 26.034837 1000.000000 38.410073 0.000000 38.410073 1000.000000 7.25%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/96 29.275542 1124.475717 38.410073 1.776568 36.633505 1072.465717 7.25%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/95 14.435244 1000.000000 69.274894 0.000000 69.274894 1000.000000 10.05%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/96 16.658717 1154.030857 69.274894 3.214533 66.060361 1100.480857 10.05%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/95 10.999577 1000.000000 90.912587 0.000000 90.912587 1000.000000 -1.68%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/96 11.329532 1029.997063 90.912587 4.128136 86.784451 983.227209 -1.68%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/95 7.785188 1000.000000 128.449050 0.000000 128.449050 1000.000000 23.28%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/96 10.000000 1284.490497 128.449050 5.167000 123.282050 1232.820497 23.28%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/95 18.466059 1000.000000 54.153407 0.000000 54.153407 1000.000000 -1.97%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/96 18.990158 1028.381746 54.153407 2.529683 51.823723 980.342659 -1.97%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 13.21%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 3.816440 85.695380 1132.144458 13.21%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/95 14.058113 1000.000000 71.133302 0.000000 71.133302 1000.000000 -9.95%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/96 13.282214 944.807742 71.133302 3.336822 67.796480 900.487355 -9.95%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/95 24.930081 1000.000000 40.112184 0.000000 40.112184 1000.000000 18.19%
- -----------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/96 30.819233 1236.226750 40.112184 1.763834 38.348351 1181.866750 18.19%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1D -Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - 1 YR - TBL 1D
Average
Q=qualified $30 contract # of units Annual Total
N=Nonqualified Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d DIV2 FLEXMN Q 12/31/95 42.867835 1000.000000 23.327514 0.000000 23.327514 1000.000000 9.06%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/96 49.261868 1149.156891 23.327514 1.188588 22.138926 1090.604831 9.06%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/95 32.329694 1000.000000 30.931317 0.000000 30.931317 1000.000000 12.54%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/96 38.234636 1182.647630 30.931317 1.498096 29.433221 1125.368487 12.54%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/95 32.598304 1000.000000 30.676443 0.000000 30.676443 1000.000000 12.54%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/96 38.552321 1182.648060 30.676443 1.485751 29.190691 1125.368898 12.54%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/95 26.034837 1000.000000 38.410073 0.000000 38.410073 1000.000000 7.19%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/96 29.275542 1124.475717 38.410073 1.797111 36.612962 1071.864310 7.19%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/95 14.435244 1000.000000 69.274894 0.000000 69.274894 1000.000000 9.85%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/96 16.658717 1154.030857 69.274894 3.330472 65.944422 1098.549468 9.85%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/95 18.466059 1000.000000 54.153407 0.000000 54.153407 1000.000000 -1.95%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/96 18.990158 1028.381746 54.153407 2.522211 51.631196 980.484568 -1.95%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/95 24.930081 1000.000000 40.112184 0.000000 40.112184 1000.000000 17.62%
- -----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/96 30.819233 1236.226750 40.112184 1.946518 38.165666 1176.236546 17.62%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2-Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 1 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=Nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 1yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 BALFND Q 12/31/95 12.489026 1000.000000 80.070295 0.000000 80.070295 1000.000000 5.44%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/96 13.181800 1055.470619 80.070295 0.078897 79.991399 1054.430619 5.44%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/95 11.153657 1000.000000 89.656693 0.000000 89.656693 1000.000000 13.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/96 12.622550 1131.696089 89.656693 0.019014 89.637679 1131.456089 13.15%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/95 11.921222 1000.000000 83.884018 0.000000 83.884018 1000.000000 12.75%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/96 13.453420 1128.526925 83.884018 0.079534 83.804484 1127.456925 12.75%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/95 12.359885 1000.000000 80.906902 0.000000 80.906902 1000.000000 13.13%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/96 13.999957 1132.693144 80.906902 0.102143 80.804758 1131.263144 13.13%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/95 8.220260 1000.000000 121.650653 0.000000 121.650653 1000.000000 21.48%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/96 10.000000 1216.506534 121.650653 0.167000 121.483653 1214.836534 21.48%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/95 42.867835 1000.000000 23.327514 0.000000 23.327514 1000.000000 14.23%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/96 49.261868 1149.156891 23.327514 0.138850 23.188664 1142.316891 14.23%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/95 32.329694 1000.000000 30.931317 0.000000 30.931317 1000.000000 17.86%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/96 38.234636 1182.647630 30.931317 0.106186 30.825130 1178.587630 17.86%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/95 32.598304 1000.000000 30.676443 0.000000 30.676443 1000.000000 17.86%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/96 38.552321 1182.648060 30.676443 0.105311 30.571131 1178.588060 17.86%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/95 26.034837 1000.000000 38.410073 0.000000 38.410073 1000.000000 12.25%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/96 29.275542 1124.475717 38.410073 0.068658 38.341415 1122.465717 12.25%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/95 14.435244 1000.000000 69.274894 0.000000 69.274894 1000.000000 15.05%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/96 16.658717 1154.030857 69.274894 0.213102 69.061792 1150.480857 15.05%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/95 10.999577 1000.000000 90.912587 0.000000 90.912587 1000.000000 2.97%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/96 11.329532 1029.997063 90.912587 0.023832 90.888755 1029.727063 2.97%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/95 7.785188 1000.000000 128.449050 0.000000 128.449050 1000.000000 28.28%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/96 10.000000 1284.490497 128.449050 0.167000 128.282050 1282.820497 28.28%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/95 18.466059 1000.000000 54.153407 0.000000 54.153407 1000.000000 2.68%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/96 18.990158 1028.381746 54.153407 0.085307 54.068099 1026.761746 2.68%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 18.21%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 0.031791 89.480028 1182.144458 18.21%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/95 14.058113 1000.000000 71.133302 0.000000 71.133302 1000.000000 -5.73%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/96 13.282214 944.807742 71.133302 0.156600 70.976702 942.727742 -5.73%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/95 24.930081 1000.000000 40.112184 0.000000 40.112184 1000.000000 23.19%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/96 30.819233 1236.226750 40.112184 0.141470 39.970714 1231.866750 23.19%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 1YR - Tbl 3
Average
Q=qualified $30 contract # of units Annual Total
N=Nonqualified Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 1yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 BALFND Q 12/31/95 12.489026 10000.000000 800.702953 0.000000 800.702953 10000.000000 5.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/96 13.181800 10554.706188 800.702953 0.078897 800.624056 10553.666188 5.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/95 11.153657 10000.000000 896.566929 0.000000 896.566929 10000.000000 13.17%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/96 12.622550 11316.960886 896.566929 0.019014 896.547915 11316.720886 13.17%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/95 11.921222 10000.000000 838.840179 0.000000 838.840179 10000.000000 12.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/96 13.453420 11285.269245 838.840179 0.079534 838.760646 11284.199245 12.84%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/95 12.359885 10000.000000 809.069016 0.000000 809.069016 10000.000000 13.26%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/96 13.999957 11326.931440 809.069016 0.102143 808.966873 11325.501440 13.26%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/95 8.220260 10000.000000 1216.506534 0.000000 1216.506534 10000.000000 21.63%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/96 10.000000 12165.065339 1216.506534 0.167000 1216.339534 12163.395339 21.63%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/95 42.867835 10000.000000 233.275135 0.000000 233.275135 10000.000000 14.85%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/96 49.261868 11491.568912 233.275135 0.138850 233.136285 11484.728912 14.85%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/95 32.329694 10000.000000 309.313166 0.000000 309.313166 10000.000000 18.22%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/96 38.234636 11826.476304 309.313166 0.106186 309.206979 11822.416304 18.22%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/95 32.598304 10000.000000 306.764426 0.000000 306.764426 10000.000000 18.22%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/96 38.552321 11826.480605 306.764426 0.105311 306.659114 11822.420605 18.22%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/95 26.034837 10000.000000 384.100734 0.000000 384.100734 10000.000000 12.43%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/96 29.275542 11244.757169 384.100734 0.068658 384.032076 11242.747169 12.43%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/95 14.435244 10000.000000 692.748941 0.000000 692.748941 10000.000000 15.37%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/96 16.658717 11540.308567 692.748941 0.213102 692.535840 11536.758567 15.37%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/95 10.999577 10000.000000 909.125869 0.000000 909.125869 10000.000000 3.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/96 11.329532 10299.970626 909.125869 0.023832 909.102038 10299.700626 3.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/95 7.785188 10000.000000 1284.490497 0.000000 1284.490497 10000.000000 28.43%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/96 10.000000 12844.904966 1284.490497 0.167000 1284.323497 12843.234966 28.43%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/95 18.466059 10000.000000 541.534065 0.000000 541.534065 10000.000000 2.82%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/96 18.990158 10283.817462 541.534065 0.085307 541.448758 10282.197462 2.82%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/95 11.171709 10000.000000 895.118195 0.000000 895.118195 10000.000000 18.25%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/96 13.211266 11825.644581 895.118195 0.031791 895.086404 11825.224581 18.25%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/95 14.058113 10000.000000 711.333022 0.000000 711.333022 10000.000000 -5.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/96 13.282214 9448.077420 711.333022 0.156600 711.176421 9445.997420 -5.54%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/95 24.930081 10000.000000 401.121842 0.000000 401.121842 10000.000000 23.58%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/96 30.819233 12362.267495 401.121842 0.141470 400.980371 12357.907495 23.58%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a div2 BALFND q 12/31/91 9.542707 1000.000000 104.792068 0.000000 104.792068 1000.000000 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 12/31/92 10.183039 1067.101714 104.792068 0.102131 104.689937 1066.061714 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/93 10.705679 1120.776863 104.689937 0.097145 104.592793 1119.736863 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/94 10.217587 1068.685958 104.592793 0.101785 104.491007 1067.645958 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/95 12.489026 1304.990907 104.491007 0.083273 104.407734 1303.950907 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/96 13.181800 1376.281871 104.407734 2.897905 101.509829 1338.082260 5.99%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/91 7.882231 1000.000000 126.867634 0.000000 126.867634 1000.000000 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/92 8.695786 1103.213798 126.867634 0.027600 126.840035 1102.973798 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/93 10.411214 1320.558745 126.840035 0.023052 126.816983 1320.318745 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/94 9.655628 1224.497609 126.816983 0.024856 126.792127 1224.257609 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/95 11.153657 1414.195891 126.792127 0.021518 126.770609 1413.955891 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/96 12.622550 1600.168352 126.770609 3.441820 123.328789 1556.723806 9.24%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/91 6.305979 1000.000000 158.579659 0.000000 158.579659 1000.000000 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/92 7.279096 1154.316562 158.579659 0.146996 158.432663 1153.246562 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/93 8.503809 1347.281104 158.432663 0.125826 158.306837 1346.211104 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/94 8.991578 1423.428271 158.306837 0.119000 158.187837 1422.358271 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/95 11.921222 1885.792318 158.187837 0.089756 158.098081 1884.722318 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/96 13.453420 2126.959881 158.098081 4.348182 153.749899 2068.461964 15.63%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/91 7.356310 1000.000000 135.937719 0.000000 135.937719 1000.000000 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/92 7.941793 1079.589223 135.937719 0.180060 135.757659 1078.159223 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/93 9.362411 1271.018997 135.757659 0.152738 135.604920 1269.588997 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/94 9.244314 1253.574463 135.604920 0.154690 135.450231 1252.144463 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/95 12.359885 1674.149273 135.450231 0.115697 135.334534 1672.719273 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/96 13.999957 1894.677652 135.334534 3.756176 131.578358 1842.091356 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 5.015225 174.548652 1745.486524 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/91 27.891899 1000.000000 35.852704 0.000000 35.852704 1000.000000 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/91 30.179495 1082.016502 35.852704 0.226644 35.626060 1075.176502 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/93 34.512855 1229.557046 35.626060 0.198187 35.427873 1222.717046 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/94 35.495155 1257.517846 35.427873 0.192702 35.235171 1250.677846 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/95 42.867835 1510.455484 35.235171 0.159560 35.075611 1503.615484 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/96 49.261868 1727.890095 35.075611 1.085891 33.989719 1674.397063 10.85%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/91 24.552354 1000.000000 40.729292 0.000000 40.729292 1000.000000 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/92 25.692327 1046.430293 40.729292 0.158024 40.571268 1042.370293 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/93 28.528477 1157.436496 40.571268 0.142314 40.428954 1153.376496 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/94 25.886803 1046.576378 40.428954 0.156837 40.272118 1042.516378 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/95 32.329694 1301.985243 40.272118 0.125581 40.146537 1297.925243 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/96 38.234636 1534.988214 40.146537 1.190143 38.956394 1489.483532 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/91 24.756361 1000.000000 40.393659 0.000000 40.393659 1000.000000 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/92 25.905809 1046.430410 40.393659 0.156722 40.236937 1042.370410 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/93 28.765516 1157.436261 40.236937 0.141141 40.095796 1153.376261 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/94 26.101888 1046.575976 40.095796 0.155544 39.940252 1042.515976 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/95 32.598304 1301.984467 39.940252 0.124546 39.815705 1297.924467 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/96 38.552321 1534.987853 39.815705 1.180335 38.635370 1489.483181 8.29%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/91 18.291494 1000.000000 54.670220 0.000000 54.670220 1000.000000 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/92 20.917682 1143.574276 54.670220 0.096091 54.574129 1141.564276 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/93 24.742238 1350.286088 54.574129 0.081238 54.492891 1348.276088 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/94 22.643778 1233.924935 54.492891 0.088766 54.404125 1231.914935 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/95 26.034837 1416.402534 54.404125 0.077204 54.326921 1414.392534 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/96 29.275542 1590.450058 54.326921 1.535485 52.791436 1545.497907 9.09%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 2.845546 94.652403 1576.787595 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/91 9.308744 1000.000000 107.425878 0.000000 107.425878 1000.000000 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/92 9.668718 1038.670523 107.425878 0.027925 107.397953 1038.400523 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/93 10.181385 1093.459910 107.397953 0.026519 107.371434 1093.189910 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/94 10.039372 1077.941770 107.371434 0.026894 107.344540 1077.671770 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/95 10.999577 1180.744534 107.344540 0.024546 107.319994 1180.474534 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/96 11.329532 1215.885303 107.319994 2.921471 104.398522 1182.786400 3.41%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 4.853550 168.722393 1687.223928 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/91 14.336464 1000.000000 69.752207 0.000000 69.752207 1000.000000 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/92 15.087944 1052.417388 69.752207 0.107370 69.644836 1050.797388 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/93 16.638507 1158.786094 69.644836 0.097365 69.547472 1157.166094 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/94 15.562412 1082.326408 69.547472 0.104097 69.443375 1080.706408 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/95 18.466059 1282.345455 69.443375 0.087729 69.355646 1280.725455 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/96 18.990158 1317.074679 69.355646 1.957910 67.397736 1279.893663 5.05%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 2.448610 87.063209 1150.215218 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/91 10.568393 1000.000000 94.621765 0.000000 94.621765 1000.000000 3.90%
- -------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/92 10.296825 974.303756 94.621765 0.202004 94.419761 972.223756 3.90%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/93 11.124183 1050.342701 94.419761 0.186980 94.232781 1048.262701 3.90%
- -------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/94 10.857486 1023.131101 94.232781 0.191573 94.041208 1021.051101 3.90%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 TCIGRO Q 12/31/95 14.058113 1322.041931 94.041208 0.147957 93.893251 1319.961931 3.90%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/96 13.282214 1247.110252 93.893251 2.691718 91.201533 1211.358275 3.90%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/91 15.057650 1000.000000 66.411425 0.000000 66.411425 1000.000000 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/92 17.080465 1134.338028 66.411425 0.255262 66.156163 1129.978028 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/93 18.062234 1194.928098 66.156163 0.241388 65.914775 1190.568098 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/94 18.360853 1210.251502 65.914775 0.237462 65.677314 1205.891502 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/95 24.930081 1637.340750 65.677314 0.174889 65.502425 1632.980750 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/96 30.819233 2018.734484 65.502425 1.910036 63.592389 1959.868653 14.39%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
Table 1b - Diversifier II Variable/Fixed Annuity Contracts
Diversifier II - 5YR - Tbl 1B
(assuming purchase payments made after first contract year)
<TABLE>
<CAPTION>
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b div2 BALFND q 12/31/91 9.542707 1000.000000 104.792068 0.000000 104.792068 1000.000000 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 12/31/92 10.183039 1067.101714 104.792068 0.102131 104.689937 1066.061714 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/93 10.705679 1120.776863 104.689937 0.097145 104.592793 1119.736863 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/94 10.217587 1068.685958 104.592793 0.101785 104.491007 1067.645958 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/95 12.489026 1304.990907 104.491007 0.083273 104.407734 1303.950907 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/96 13.181800 1376.281871 104.407734 3.367740 101.039994 1331.888992 5.89%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/91 7.882231 1000.000000 126.867634 0.000000 126.867634 1000.000000 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/92 8.695786 1103.213798 126.867634 0.027600 126.840035 1102.973798 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/93 10.411214 1320.558745 126.840035 0.023052 126.816983 1320.318745 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/94 9.655628 1224.497609 126.816983 0.024856 126.792127 1224.257609 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/95 11.153657 1414.195891 126.792127 0.021518 126.770609 1413.955891 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/96 12.622550 1600.168352 126.770609 4.012288 122.758321 1549.523049 9.14%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/91 6.305979 1000.000000 158.579659 0.000000 158.579659 1000.000000 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/92 7.279096 1154.316562 158.579659 0.146996 158.432663 1153.246562 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/93 8.503809 1347.281104 158.432663 0.125826 158.306837 1346.211104 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/94 8.991578 1423.428271 158.306837 0.119000 158.187837 1422.358271 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/95 11.921222 1885.792318 158.187837 0.089756 158.098081 1884.722318 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/96 13.453420 2126.959881 158.098081 5.059623 153.038457 2058.890645 15.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/91 7.356310 1000.000000 135.937719 0.000000 135.937719 1000.000000 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/92 7.941793 1079.589223 135.937719 0.180060 135.757659 1078.159223 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/93 9.362411 1271.018997 135.757659 0.152738 135.604920 1269.588997 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/94 9.244314 1253.574463 135.604920 0.154690 135.450231 1252.144463 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/95 12.359885 1674.149273 135.450231 0.115697 135.334534 1672.719273 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/96 13.999957 1894.677652 135.334534 4.365181 130.969353 1833.565306 12.88%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 5.823262 173.740615 1737.406150 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/91 27.891899 1000.000000 35.852704 0.000000 35.852704 1000.000000 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/92 30.179495 1082.016502 35.852704 0.226644 35.626060 1075.176502 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/93 34.512855 1229.557046 35.626060 0.198187 35.427873 1222.717046 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/94 35.495155 1257.517846 35.427873 0.192702 35.235171 1250.677846 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/95 42.867835 1510.455484 35.235171 0.159560 35.075611 1503.615484 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/96 49.261868 1727.890095 35.075611 1.243732 33.831879 1666.621557 10.74%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/91 24.552354 1000.000000 40.729292 0.000000 40.729292 1000.000000 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/92 25.692327 1046.430293 40.729292 0.158024 40.571268 1042.370293 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/93 28.528477 1157.436496 40.571268 0.142314 40.428954 1153.376496 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/94 25.886803 1046.576378 40.428954 0.156837 40.272118 1042.516378 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/95 32.329694 1301.985243 40.272118 0.125581 40.146537 1297.925243 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/96 38.234636 1534.988214 40.146537 1.370802 38.775734 1482.576085 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/91 24.756361 1000.000000 40.393659 0.000000 40.393659 1000.000000 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/92 25.905809 1046.430410 40.393659 0.156722 40.236937 1042.370410 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/93 28.765516 1157.436261 40.236937 0.141141 40.095796 1153.376261 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/94 26.101888 1046.575976 40.095796 0.155544 39.940252 1042.515976 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/95 32.598304 1301.984467 39.940252 0.124546 39.815705 1297.924467 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/96 38.552321 1534.987853 39.815705 1.359506 38.456199 1482.575736 8.18%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/91 18.291494 1000.000000 54.670220 0.000000 54.670220 1000.000000 8.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/92 20.917682 1143.574276 54.670220 0.096091 54.574129 1141.564276 8.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/93 24.742238 1350.286088 54.574129 0.081238 54.492891 1348.276088 8.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/94 22.643778 1233.924935 54.492891 0.088766 54.404125 1231.914935 8.99%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/95 26.034837 1416.402534 54.404125 0.077204 54.326921 1414.392534 8.99%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1b - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 1B
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 HIBOND Q 12/31/96 29.275542 1590.450058 54.326921 1.779956 52.546965 1538.340882 8.99%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 3.284287 94.213662 1569.478737 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/91 9.308744 1000.000000 107.425878 0.000000 107.425878 1000.000000 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/92 9.668718 1038.670523 107.425878 0.027925 107.397953 1038.400523 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/93 10.181385 1093.459910 107.397953 0.026519 107.371434 1093.189910 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/94 10.039372 1077.941770 107.371434 0.026894 107.344540 1077.671770 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/95 10.999577 1180.744534 107.344540 0.024546 107.319994 1180.474534 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/96 11.329532 1215.885303 107.319994 3.404411 103.915582 1177.314916 3.31%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 5.634642 167.941301 1679.413011 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/91 14.336464 1000.000000 69.752207 0.000000 69.752207 1000.000000 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/92 15.087944 1052.417388 69.752207 0.107370 69.644836 1050.797388 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/93 16.638507 1158.786094 69.644836 0.097365 69.547472 1157.166094 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/94 15.562412 1082.326408 69.547472 0.104097 69.443375 1080.706408 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/95 18.466059 1282.345455 69.443375 0.087729 69.355646 1280.725455 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/96 18.990158 1317.074679 69.355646 2.270010 67.085636 1273.966827 4.96%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 2.851413 86.660406 1144.893678 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/91 10.568393 1000.000000 94.621765 0.000000 94.621765 1000.000000 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/92 10.296825 974.303756 94.621765 0.202004 94.419761 972.223756 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/93 11.124183 1050.342701 94.419761 0.186980 94.232781 1048.262701 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/94 10.857486 1023.131101 94.232781 0.191573 94.041208 1021.051101 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/95 14.058113 1322.041931 94.041208 0.147957 93.893251 1319.961931 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/96 13.282214 1247.110252 93.893251 3.114238 90.779013 1205.746279 3.81%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/91 15.057650 1000.000000 66.411425 0.000000 66.411425 1000.000000 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/92 17.080465 1134.338028 66.411425 0.255262 66.156163 1129.978028 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/93 18.062234 1194.928098 66.156163 0.241388 65.914775 1190.568098 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/94 18.360853 1210.251502 65.914775 0.237462 65.677314 1205.891502 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/95 24.930081 1637.340750 65.677314 0.174889 65.502425 1632.980750 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/96 30.819233 2018.734484 65.502425 2.204796 63.297628 1950.784348 14.28%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - 5 YR - Tbl 1C
Q=qualified
N=nonqualified Beginning # of units
- -----------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1c div2 BALFND q 12/31/91 9.542707 1000.000000 104.792068
- -----------------------------------------------------------------------------------------------------------
1c div2 BALFND q 12/31/92 10.183039 1067.101714 104.792068
- -----------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/93 10.705679 1120.776863 104.689937
- -----------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/94 10.217587 1068.685958 104.592793
- -----------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/95 12.489026 1304.990907 104.491007
- -----------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/96 13.181800 1376.281871 104.407734
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/91 7.882231 1000.000000 126.867634
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/92 8.695786 1103.213798 126.867634
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/93 10.411214 1320.558745 126.840035
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/94 9.655628 1224.497609 126.816983
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/95 11.153657 1414.195891 126.792127
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/96 12.622550 1600.168352 126.770609
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/91 6.305979 1000.000000 158.579659
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/92 7.279096 1154.316562 158.579659
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/93 8.503809 1347.281104 158.432663
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/94 8.991578 1423.428271 158.306837
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/95 11.921222 1885.792318 158.187837
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/96 13.453420 2126.959881 158.098081
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/91 7.356310 1000.000000 135.937719
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/92 7.941793 1079.589223 135.937719
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/93 9.362411 1271.018997 135.757659
- -----------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/94 9.244314 1253.574463 135.604920
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/95 12.359885 1674.149273 135.450231
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/96 13.999957 1894.677652 135.334534
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/91 27.891899 1000.000000 35.852704
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/92 30.179495 1082.016502 35.852704
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/93 34.512855 1229.557046 35.626060
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/94 35.495155 1257.517846 35.427873
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/95 42.867835 1510.455484 35.235171
- -----------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/96 49.261868 1727.890095 35.075611
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/91 24.552354 1000.000000 40.729292
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/92 25.692327 1046.430293 40.729292
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/93 28.528477 1157.436496 40.571268
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/94 25.886803 1046.576378 40.428954
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/95 32.329694 1301.985243 40.272118
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/96 38.234636 1534.988214 40.146537
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/91 24.756361 1000.000000 40.393659
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/92 25.905809 1046.430410 40.393659
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/93 28.765516 1157.436261 40.236937
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/94 26.101888 1046.575976 40.095796
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/95 32.598304 1301.984467 39.940252
- -----------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/96 38.552321 1534.987853 39.815705
- -----------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/91 18.291494 1000.000000 54.670220
- -----------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/92 20.917682 1143.574276 54.670220
- -----------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/93 24.742238 1350.286088 54.574129
- -----------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/94 22.643778 1233.924935 54.492891
- -----------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/95 26.034837 1416.402534 54.404125
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified fee & deferred at end of Ending return for
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate sales load period Value 5yr
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1c div2 BALFND q 12/31/91 0.000000 104.792068 1000.000000 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 12/31/92 0.102131 104.689937 1066.061714 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/93 0.097145 104.592793 1119.736863 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/94 0.101785 104.491007 1067.645958 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/95 0.083273 104.407734 1303.950907 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/96 3.872005 100.535729 1325.241871 5.79%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/91 0.000000 126.867634 1000.000000 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/92 0.027600 126.840035 1102.973798 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/93 0.023052 126.816983 1320.318745 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/94 0.024856 126.792127 1224.257609 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/95 0.021518 126.770609 1413.955891 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/96 3.980178 122.790431 1549.928352 9.15%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/91 0.000000 158.579659 1000.000000 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/92 0.146996 158.432663 1153.246562 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/93 0.125826 158.306837 1346.211104 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/94 0.119000 158.187837 1422.358271 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/95 0.089756 158.098081 1884.722318 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/96 3.796061 154.302020 2075.889881 15.71%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/91 0.000000 135.937719 1000.000000 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/92 0.180060 135.757659 1078.159223 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/93 0.152738 135.604920 1269.588997 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/94 0.154690 135.450231 1252.144463 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/95 0.115697 135.334534 1672.719273 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/96 3.673583 131.660951 1843.247652 12.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/92 0.000000 180.320148 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/93 0.276795 180.043352 1086.262579 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/94 0.276319 179.767034 1086.466650 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/95 0.203157 179.563877 1476.061756 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/96 5.167000 174.396877 1743.968771 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/91 0.000000 35.852704 1000.000000 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/92 0.226644 35.626060 1075.176502 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/93 0.198187 35.427873 1222.717046 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/94 0.192702 35.235171 1250.677846 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/95 0.159560 35.075611 1503.615484 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/96 1.153834 33.921777 1671.050095 10.80%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/91 0.000000 40.729292 1000.000000 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/92 0.158024 40.571268 1042.370293 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/93 0.142314 40.428954 1153.376496 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/94 0.156837 40.272118 1042.516378 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/95 0.125581 40.146537 1297.925243 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/96 1.413901 38.732635 1480.928214 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/91 0.000000 40.393659 1000.000000 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/92 0.156722 40.236937 1042.370410 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/93 0.141141 40.095796 1153.376261 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/94 0.155544 39.940252 1042.515976 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/95 0.124546 39.815705 1297.924467 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/96 1.402250 38.413455 1480.927853 8.16%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/91 0.000000 54.670220 1000.000000 8.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/92 0.096091 54.574129 1141.564276 8.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/93 0.081238 54.492891 1348.276088 8.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/94 0.088766 54.404125 1231.914935 8.99%
- --------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/95 0.077204 54.326921 1414.392534 8.99%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II -5YR - Tble 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ---------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load Period Value 5yr
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 HIBOND Q 12/31/96 29.275542 1590.450058 54.326921 1.776568 52.550353 1538.440058 8.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 3.214533 94.283416 1570.640745 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/91 9.308744 1000.000000 07.425878 0.000000 107.425878 1000.000000 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/92 9.668718 1038.670523 07.425878 0.027925 107.397953 1038.400523 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/93 10.181385 1093.459910 07.397953 0.026519 107.371434 1093.189910 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/94 10.039372 1077.941770 07.371434 0.026894 107.344540 1077.671770 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/95 10.999577 1180.744534 07.344540 0.024546 107.319994 1180.474534 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/96 11.329532 1215.885303 07.319994 4.437076 102.882917 1165.615303 3.11%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 73.790453 0.000000 173.790453 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 73.790453 0.214510 173.575943 1351.321351 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 73.575943 5.167000 168.408943 1684.089433 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/91 14.336464 1000.000000 69.752207 0.000000 69.752207 1000.000000 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/92 15.087944 1052.417388 69.752207 0.107370 69.644836 1050.797388 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/93 16.638507 1158.786094 69.644836 0.097365 69.547472 1157.166094 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/94 15.562412 1082.326408 69.547472 0.104097 69.443375 1080.706408 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/95 18.466059 1282.345455 69.443375 0.087729 69.355646 1280.725455 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/96 18.990158 1317.074679 69.355646 2.718250 66.637396 1265.454679 4.82%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 3.816440 85.695380 1132.144458 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/91 10.568393 1000.000000 94.621765 0.000000 94.621765 1000.000000 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/92 10.296825 974.303756 94.621765 0.202004 94.419761 972.223756 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/93 11.124183 1050.342701 94.419761 0.186980 94.232781 1048.262701 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/94 10.857486 1023.131101 94.232781 0.191573 94.041208 1021.051101 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/95 14.058113 1322.041931 94.041208 0.147957 93.893251 1319.961931 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/96 13.282214 1247.110252 93.893251 3.921033 89.972218 1195.030252 3.62%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/91 15.057650 1000.000000 66.411425 0.000000 66.411425 1000.000000 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/92 17.080465 1134.338028 66.411425 0.255262 66.156163 1129.978028 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/93 18.062234 1194.928098 66.156163 0.241388 65.914775 1190.568098 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/94 18.360853 1210.251502 65.914775 0.237462 65.677314 1205.891502 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/95 24.930081 1637.340750 65.677314 0.174889 65.502425 1632.980750 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/96 30.819233 2018.734484 65.502425 1.763834 63.738591 1964.374484 14.44%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1D - Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - 5 YR - Tbl 10
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d DIV2 FLEXMN Q 12/31/91 27.891899 1000.000000 35.852704 0.000000 35.852704 1000.000000 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/92 30.179495 1082.016502 35.852704 0.226644 35.626060 1075.176502 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/93 34.512855 1229.557046 35.626060 0.198187 35.427873 1222.717046 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/94 35.495155 1257.517846 35.427873 0.192702 35.235171 1250.677846 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/95 42.867835 1510.455484 35.235171 0.159560 35.075611 1503.615484 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/96 49.261868 1727.890095 35.075611 1.717252 33.358358 1643.295041 10.43%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/91 24.552354 1000.000000 40.729292 0.000000 40.729292 1000.000000 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/92 25.692327 1046.430293 40.729292 0.158024 40.571268 1042.370293 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/93 28.528477 1157.436496 40.571268 0.142314 40.428954 1153.376496 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/94 25.886803 1046.576378 40.428954 0.156837 40.272118 1042.516378 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/95 32.329694 1301.985243 40.272118 0.125581 40.146537 1297.925243 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/96 38.234636 1534.988214 40.146537 1.912781 38.233756 1461.853744 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/91 24.756361 1000.000000 40.393659 0.000000 40.393659 1000.000000 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/92 25.905809 1046.430410 40.393659 0.156722 40.236937 1042.370410 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/93 28.765516 1157.436261 40.236937 0.141141 40.095796 1153.376261 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/94 26.101888 1046.575976 40.095796 0.155544 39.940252 1042.515976 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/95 32.598304 1301.984467 39.940252 0.124546 39.815705 1297.924467 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/96 38.552321 1534.987853 39.815705 1.897018 37.918687 1461.853400 7.88%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/91 18.291494 1000.000000 54.670220 0.000000 54.670220 1000.000000 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/92 20.917682 1143.574276 54.670220 0.096091 54.574129 1141.564276 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/93 24.742238 1350.286088 54.574129 0.081238 54.492891 1348.276088 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/94 22.643778 1233.924935 54.492891 0.088766 54.404125 1231.914935 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/95 26.034837 1416.402534 54.404125 0.077204 54.326921 1414.392534 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/96 29.275542 1590.450058 54.326921 2.513369 51.813552 1516.869806 8.68%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 4.600509 92.897440 1547.552162 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/91 14.336464 1000.000000 69.752207 0.000000 69.752207 1000.000000 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/92 15.087944 1052.417388 69.752207 0.107370 69.644836 1050.797388 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/93 16.638507 1158.786094 69.644836 0.097365 69.547472 1157.166094 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/94 15.562412 1082.326408 69.547472 0.104097 69.443375 1080.706408 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/95 18.466059 1282.345455 69.443375 0.087729 69.355646 1280.725455 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/96 18.990158 1317.074679 69.355646 3.206311 66.149335 1256.186319 4.66%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/91 15.057650 1000.000000 66.411425 0.000000 66.411425 1000.000000 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/92 17.080465 1134.338028 66.411425 0.255262 66.156163 1129.978028 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/93 18.062234 1194.928098 66.156163 0.241388 65.914775 1190.568098 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/94 18.360853 1210.251502 65.914775 0.237462 65.677314 1205.891502 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/95 24.930081 1637.340750 65.677314 0.174889 65.502425 1632.980750 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/96 30.819233 2018.734484 65.502425 3.089079 62.413345 1923.531433 13.96%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 div2 BALFND q 12/31/91 9.542707 1000.000000 104.792068 0.000000 104.792068 1000.000000 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 12/31/92 10.183039 1067.101714 104.792068 0.102131 104.689937 1066.061714 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/93 10.705679 1120.776863 104.689937 0.097145 104.592793 1119.736863 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/94 10.217587 1068.685958 104.592793 0.101785 104.491007 1067.645958 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/95 12.489026 1304.990907 104.491007 0.083273 104.407734 1303.950907 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/96 13.181800 1376.281871 104.407734 0.078897 104.328838 1375.241871 6.57%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/91 7.882231 1000.000000 126.867634 0.000000 126.867634 1000.000000 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/92 8.695786 1103.213798 126.867634 0.027600 126.840035 1102.973798 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/93 10.411214 1320.558745 126.840035 0.023052 126.816983 1320.318745 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/94 9.655628 1224.497609 126.816983 0.024856 126.792127 1224.257609 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/95 11.153657 1414.195891 126.792127 0.021518 126.770609 1413.955891 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/96 12.622550 1600.168352 126.770609 0.019014 126.751595 1599.928352 9.84%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/91 6.305979 1000.000000 158.579659 0.000000 158.579659 1000.000000 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/92 7.279096 1154.316562 158.579659 0.146996 158.432663 1153.246562 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/93 8.503809 1347.281104 158.432663 0.125826 158.306837 1346.211104 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/94 8.991578 1423.428271 158.306837 0.119000 158.187837 1422.358271 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/95 11.921222 1885.792318 158.187837 0.089756 158.098081 1884.722318 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/96 13.453420 2126.959881 158.098081 0.079534 158.018547 2125.889881 16.26%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/91 7.356310 1000.000000 135.937719 0.000000 135.937719 1000.000000 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/92 7.941793 1079.589223 135.937719 0.180060 135.757659 1078.159223 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/93 9.362411 1271.018997 135.757659 0.152738 135.604920 1269.588997 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/94 9.244314 1253.574463 135.604920 0.154690 135.450231 1252.144463 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/95 12.359885 1674.149273 135.450231 0.115697 135.334534 1672.719273 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/96 13.999957 1894.677652 135.334534 0.102143 135.232391 1893.247652 13.60%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.583877 1476.061756 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 0.167000 179.396877 1793.968771 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/91 27.891899 1000.000000 35.852704 0.000000 35.852704 1000.000000 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/92 30.179495 1082.016502 35.852704 0.226644 35.626060 1075.176502 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/93 34.512855 1229.557046 35.626060 0.198187 35.427873 1222.717046 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/94 35.495155 1257.517846 35.427873 0.192702 35.235171 1250.677846 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/95 42.867835 1510.455484 35.235171 0.159560 35.075611 1503.615484 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/96 49.261868 1727.890095 35.075611 0.138850 34.936761 1721.050095 11.46%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/91 24.552354 1000.000000 40.729292 0.000000 40.729292 1000.000000 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/92 25.692327 1046.430293 40.729292 0.158024 40.571268 1042.370293 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/93 28.528477 1157.436496 40.571268 0.142314 40.428954 1153.376496 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/94 25.886803 1046.576378 40.428954 0.156837 40.272118 1042.516378 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/95 32.329694 1301.985243 40.272118 0.125581 40.146537 1297.925243 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/96 38.234636 1534.988214 40.146537 0.106186 40.040350 1530.928214 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/91 24.756361 1000.000000 40.393659 0.000000 40.393659 1000.000000 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/92 25.905809 1046.430410 40.393659 0.156722 40.236937 1042.370410 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/93 28.765516 1157.436261 40.236937 0.141141 40.095796 1153.376261 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/94 26.101888 1046.575976 40.095796 0.155544 39.940252 1042.515976 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/95 32.598304 1301.984467 39.940252 0.124546 39.815705 1297.924467 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/96 38.552321 1534.987853 39.815705 0.105311 39.710394 1530.927853 8.88%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/91 18.291494 1000.000000 54.670220 0.000000 54.670220 1000.000000 9.69%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/92 20.917682 1143.574276 54.670220 0.096091 54.574129 1141.564276 9.69%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/93 24.742238 1350.286088 54.574129 0.081238 54.492891 1348.276088 9.69%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/94 22.643778 1233.924935 54.492891 0.088766 54.404125 1231.914935 9.69%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/95 26.034837 1416.402534 54.404125 0.077204 54.326921 1414.392534 9.69%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 5yr
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 HIBOND Q 12/31/96 29.275542 1590.450058 54.326921 0.068658 54.258263 1588.440058 9.69%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 0.213102 97.284848 1620.640745 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/91 9.308744 1000.000000 107.425878 0.000000 107.425878 1000.000000 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/92 9.668718 1038.670523 107.425878 0.027925 107.397953 1038.400523 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/93 10.181385 1093.459910 107.397953 0.026519 107.371434 1093.189910 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/94 10.039372 1077.941770 107.371434 0.026894 107.344540 1077.671770 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/95 10.999577 1180.744534 107.344540 0.024546 107.319994 1180.474534 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/96 11.329532 1215.885303 107.319994 0.023832 107.296162 1215.615303 3.98%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 0.167000 173.408943 1734.089433 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/91 14.336464 1000.000000 69.752207 0.000000 69.752207 1000.000000 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/92 15.087944 1052.417388 69.752207 0.107370 69.644836 1050.797388 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/93 16.638507 1158.786094 69.644836 0.097365 69.547472 1157.166094 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/94 15.562412 1082.326408 69.547472 0.104097 69.443375 1080.706408 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/95 18.466059 1282.345455 69.443375 0.087729 69.355646 1280.725455 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/96 18.990158 1317.074679 69.355646 0.085307 69.270339 1315.454679 5.63%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 0.031791 89.480028 1182.144458 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/91 10.568393 1000.000000 94.621765 0.000000 94.621765 1000.000000 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/92 10.296825 974.303756 94.621765 0.202004 94.419761 972.223756 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/93 11.124183 1050.342701 94.419761 0.186980 94.232781 1048.262701 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/94 10.857486 1023.131101 94.232781 0.191573 94.041208 1021.051101 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/95 14.058113 1322.041931 94.041208 0.147957 93.893251 1319.961931 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/96 13.282214 1247.110252 93.893251 0.156600 93.736651 1245.030252 4.48%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/91 15.057650 1000.000000 66.411425 0.000000 66.411425 1000.000000 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/92 17.080465 1134.338028 66.411425 0.255262 66.156163 1129.978028 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/93 18.062234 1194.928098 66.156163 0.241388 65.914775 1190.568098 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/94 18.360853 1210.251502 65.914775 0.237462 65.677314 1205.891502 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/95 24.930081 1637.340750 65.677314 0.174889 65.502425 1632.980750 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/96 30.819233 2018.734484 65.502425 0.141470 65.360954 2014.374484 15.02%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 div2 BALFND q 12/31/91 9.542707 10000.000000 1047.920679 0.000000 1047.920679 10000.000000 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 12/31/92 10.183039 10671.017144 1047.920679 0.102131 1047.818548 10669.977144 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/93 10.705679 11217.609030 1047.818548 0.097145 1047.721404 11216.569030 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/94 10.217587 10705.184595 1047.721404 0.101785 1047.619619 10704.144595 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/95 12.489026 13083.748654 1047.619619 0.083273 1047.536345 13082.708654 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/96 13.181800 13808.414598 1047.536345 0.078897 1047.457449 13807.374598 6.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/91 7.882231 10000.000000 1268.676343 0.000000 1268.676343 10000.000000 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/92 8.695786 11032.137982 1268.676343 0.027600 1268.648743 11031.897982 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/93 10.411214 13208.173559 1268.648743 0.023052 1268.625691 13207.933559 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/94 9.655628 12249.377747 1268.625691 0.024856 1268.600835 12249.137747 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/95 11.153657 14149.538588 1268.600835 0.021518 1268.579318 14149.298588 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/96 12.622550 16012.705868 1268.579318 0.019014 1268.560304 16012.465868 9.86%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/91 6.305979 10000.000000 1585.796591 0.000000 1585.796591 10000.000000 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/92 7.279096 11543.165621 1585.796591 0.146996 1585.649595 11542.095621 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/93 8.503809 13484.061293 1585.649595 0.125826 1585.523769 13482.991293 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/94 8.991578 14256.360636 1585.523769 0.119000 1585.404768 14255.290636 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/95 11.921222 18899.962203 1585.404768 0.089756 1585.315012 18898.892203 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/96 13.453420 21327.908695 1585.315012 0.079534 1585.235479 21326.838695 16.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/91 7.356310 10000.000000 1359.377188 0.000000 1359.377188 10000.000000 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/92 7.941793 10795.892234 1359.377188 0.180060 1359.197128 10794.462234 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/93 9.362411 12725.362139 1359.197128 0.152738 1359.044389 12723.932139 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/94 9.244314 12563.433074 1359.044389 0.154690 1358.889700 12562.003074 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/95 12.359885 16795.720414 1358.889700 0.115697 1358.774003 16794.290414 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/96 13.999957 19022.777610 1358.774003 0.102143 1358.671859 19021.347610 13.71%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/92 5.545692 10000.000000 1803.201476 0.000000 1803.201476 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/93 6.033339 10879.325790 1803.201476 0.276795 1802.924681 10877.655790 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/94 6.043748 10896.422433 1802.924681 0.276319 1802.648362 10894.752433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/95 8.220260 14818.238225 1802.648362 0.203157 1802.445206 14816.568225 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/96 10.000000 18024.452055 1802.445206 0.167000 1802.278206 18022.782055 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/91 27.891899 10000.000000 358.527040 0.000000 358.527040 10000.000000 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/92 30.179495 10820.165024 358.527040 0.226644 358.300396 10813.325024 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/93 34.512855 12365.969630 358.300396 0.198187 358.102209 12359.129630 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/94 35.495155 12710.893430 358.102209 0.192702 357.909507 12704.053430 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/95 42.867835 15342.805695 357.909507 0.159560 357.749947 15335.965695 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/96 49.261868 17623.430661 357.749947 0.138850 357.611097 17616.590661 11.98%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/91 24.552354 10000.000000 407.292922 0.000000 407.292922 10000.000000 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/92 25.692327 10464.302934 407.292922 0.158024 407.134898 10460.242934 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/93 28.528477 11614.938575 407.134898 0.142314 406.992584 11610.878575 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/94 25.886803 10535.736848 406.992584 0.156837 406.835747 10531.676848 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/95 32.329694 13152.875223 406.835747 0.125581 406.710166 13148.815223 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/96 38.234636 15550.415166 406.710166 0.106186 406.603980 15546.355166 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/91 24.756361 10000.000000 403.936588 0.000000 403.936588 10000.000000 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/92 25.905809 10464.304103 403.936588 0.156722 403.779867 10460.244103 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/93 28.765516 11614.936215 403.779867 0.141141 403.638725 11610.876215 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/94 26.101888 10535.732804 403.638725 0.155544 403.483181 10531.672804 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/95 32.598304 13152.867397 403.483181 0.124546 403.358635 13148.807397 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/96 38.552321 15550.411566 403.358635 0.105311 403.253323 15546.351566 9.22%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/91 18.291494 10000.000000 546.702199 0.000000 546.702199 10000.000000 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/92 20.917682 11435.742756 546.702199 0.096091 546.606108 11433.732756 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/93 24.742238 13524.258427 546.606108 0.081238 546.524871 13522.248427 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/94 22.643778 12375.387847 546.524871 0.088766 546.436105 12373.377847 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/95 26.034837 14226.374918 546.436105 0.077204 546.358900 14224.364918 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/96 29.275542 15994.952938 546.358900 0.068658 546.290242 15992.942938 9.84%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/92 10.175420 10000.000000 982.760417 0.000000 982.760417 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/93 13.880468 13641.174517 982.760417 0.255755 982.504662 13637.624517 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/94 12.843173 12618.477344 982.504662 0.276411 982.228250 12614.927344 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 5 YR - Tbl 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 5yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 INTLEQ Q 12/31/95 14.435244 14178.704456 982.228250 0.245926 981.982324 14175.154456 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/96 16.658717 16358.565641 981.982324 0.213102 981.769223 16355.015641 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/91 9.308744 10000.000000 1074.258783 0.000000 1074.258783 10000.000000 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/92 9.668718 10386.705231 1074.258783 0.027925 1074.230858 10386.435231 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/93 10.181385 10937.157942 1074.230858 0.026519 1074.204339 10936.887942 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/94 10.039372 10784.336962 1074.204339 0.026894 1074.177445 10784.066962 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/95 10.999577 11815.497515 1074.177445 0.024546 1074.152898 11815.227515 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/96 11.329532 12169.649634 1074.152898 0.023832 1074.129067 12169.379634 4.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/94 5.754056 10000.000000 1737.904532 0.000000 1737.904532 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/95 7.785188 13529.913508 1737.904532 0.214510 1737.690022 13528.243508 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/96 10.000000 17376.900221 1737.690022 0.167000 1737.523022 17375.230221 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/91 14.336464 10000.000000 697.522067 0.000000 697.522067 10000.000000 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/92 15.087944 10524.173883 697.522067 0.107370 697.414696 10522.553883 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/93 16.638507 11603.939307 697.414696 0.097365 697.317332 11602.319307 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/94 15.562412 10851.939612 697.317332 0.104097 697.213235 10850.319612 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/95 18.466059 12874.780730 697.213235 0.087729 697.125506 12873.160730 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/96 18.990158 13238.523511 697.125506 0.085307 697.040199 13236.903511 5.76%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/95 11.171709 10000.000000 895.118195 0.000000 895.118195 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/96 13.211266 11825.644581 895.118195 0.031791 895.086404 11825.224581 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/91 10.568393 10000.000000 946.217651 0.000000 946.217651 10000.000000 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/92 10.296825 9743.037565 946.217651 0.202004 946.015647 9740.957565 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/93 11.124183 10523.651179 946.015647 0.186980 945.828667 10521.571179 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/94 10.857486 10269.321511 945.828667 0.191573 945.637094 10267.241511 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/95 14.058113 13293.873126 945.637094 0.147957 945.489137 13291.793126 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/96 13.282214 12558.189051 945.489137 0.156600 945.332536 12556.109051 4.65%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/91 15.057650 10000.000000 664.114254 0.000000 664.114254 10000.000000 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/92 17.080465 11343.380275 664.114254 0.255262 663.858992 11339.020275 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/93 18.062234 11990.776454 663.858992 0.241388 663.617604 11986.416454 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/94 18.360853 12184.585279 663.617604 0.237462 663.380142 12180.225279 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/95 24.930081 16538.120686 663.380142 0.174889 663.205253 16533.760686 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/96 30.819233 20439.477230 663.205253 0.141470 663.063783 20435.117230 15.35%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a div2 BALFND q 12/31/89 7.823012 1000.000000 127.828003 0.000000 127.828003 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 12/31/90 7.876448 1006.830617 127.828003 0.132039 127.695964 1005.790617 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 12/31/91 9.542707 1218.565166 127.695964 0.108984 127.586980 1217.525166 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 12/31/92 10.183039 1299.223192 127.586980 0.102131 127.484849 1298.183192 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/93 10.705679 1364.811873 127.484849 0.097145 127.387705 1363.771873 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/94 10.217587 1301.594954 127.387705 0.101785 127.285919 1300.554954 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/95 12.489026 1589.677155 127.285919 0.083273 127.202646 1588.637155 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/96 13.181800 1676.759841 127.202646 0.078897 127.123749 1675.719841 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/89 6.178927 1000.000000 161.840397 0.000000 161.840397 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/90 6.512261 1053.946907 161.840397 0.036854 161.803544 1053.706907 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/91 7.882231 1275.372908 161.803544 0.030448 161.773095 1275.132908 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/92 8.695786 1406.744218 161.773095 0.027600 161.745496 1406.504218 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/93 10.411214 1683.966971 161.745496 0.023052 161.722444 1683.726971 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 12/31/94 9.655628 1561.531756 161.722444 0.024856 161.697588 1561.291756 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/95 11.153657 1803.519432 161.697588 0.021518 161.676070 1803.279432 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/96 12.622550 2040.764280 161.676070 0.019014 161.657057 2040.524280 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/86 4.234943 1000.000000 236.130687 0.000000 236.130687 1000.000000 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/87 4.134969 976.393071 236.130687 0.258769 235.871918 975.323071 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/88 5.010861 1181.921397 235.871918 0.213536 235.658382 1180.851397 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/89 5.806942 1368.454558 235.658382 0.184262 235.474120 1367.384558 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/90 4.857970 1143.926211 235.474120 0.220257 235.253863 1142.856211 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/91 6.305979 1483.505923 235.253863 0.169680 235.084183 1482.435923 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/92 7.279096 1711.200338 235.084183 0.146996 234.937187 1710.130338 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/93 8.503809 1997.860965 234.937187 0.125826 234.811361 1996.790965 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 12/31/94 8.991578 2111.324667 234.811361 0.119000 234.692361 2110.254667 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/95 11.921222 2797.819734 234.692361 0.089756 234.602605 2796.749734 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/96 13.453420 3156.207376 234.602605 0.079534 234.523071 3155.137376 12.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/86 3.869228 1000.000000 258.449489 0.000000 258.449489 1000.000000 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/87 3.961179 1023.764689 258.449489 0.361004 258.088486 1022.334689 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/88 4.521386 1166.917665 258.088486 0.316275 257.772211 1165.487665 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/89 5.872409 1513.743851 257.772211 0.243512 257.528699 1512.313851 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/90 5.118909 1318.265976 257.528699 0.279356 257.249343 1316.835976 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/91 7.356310 1892.405913 257.249343 0.194391 257.054952 1890.975913 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/92 7.941793 2041.477217 257.054952 0.180060 256.874892 2040.047217 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/93 9.362411 2404.968312 256.874892 0.152738 256.722153 2403.538312 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 12/31/94 9.244314 2373.220196 256.722153 0.154690 256.567464 2371.790196 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/95 12.359885 3171.144345 256.567464 0.115697 256.451767 3169.714345 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/96 13.999957 3590.313707 256.451767 0.102143 256.349624 3588.883707 13.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 0.167000 179.396877 1793.968771 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 12/31/86 13.850885 1000.000000 72.197553 0.000000 72.197553 1000.000000 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 12/31/87 16.897963 1219.991575 72.197553 0.404783 71.792770 1213.151575 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 12/31/88 19.831828 1423.781870 71.792770 0.344900 71.447870 1416.941870 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 12/31/89 23.711872 1694.162750 71.447870 0.288463 71.159407 1687.322750 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/90 23.215292 1651.986412 71.159407 0.294633 70.864774 1645.146412 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/91 27.891899 1976.553108 70.864774 0.245232 70.619541 1969.713108 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/92 30.179495 2131.262088 70.619541 0.226644 70.392897 2124.422088 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/93 34.512855 2429.459852 70.392897 0.198187 70.194710 2422.619852 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/94 35.495155 2491.572116 70.194710 0.192702 70.002008 2484.732116 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/95 42.867835 3000.834519 70.002008 0.159560 69.842448 2993.994519 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/96 49.261868 3440.569433 69.842448 0.138850 69.703598 3433.729433 13.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 12/31/86 14.028671 1000.000000 71.282590 0.000000 71.282590 1000.000000 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 12/31/87 14.580816 1039.358326 71.282590 0.278448 71.004142 1035.298326 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 12/31/88 16.220777 1151.742349 71.004142 0.250296 70.753845 1147.682349 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 12/31/89 21.029096 1487.889408 70.753845 0.193066 70.560780 1483.829408 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/90 18.451506 1301.952648 70.560780 0.220036 70.340743 1297.892648 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/91 24.552354 1727.030832 70.340743 0.165361 70.175382 1722.970832 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/92 25.692327 1802.968873 70.175382 0.158024 70.017359 1798.908873 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/93 28.528477 1997.488605 70.017359 0.142314 69.875045 1993.428605 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/94 25.886803 1808.841516 69.875045 0.156837 69.718208 1804.781516 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/95 32.329694 2253.968331 69.718208 0.125581 69.592627 2249.908331 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 GROWEQ N 12/31/96 38.234636 2660.848756 69.592627 0.106186 69.486440 2656.788756 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 12/31/86 14.145229 1000.000000 70.695215 0.000000 70.695215 1000.000000 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 12/31/87 14.701955 1039.357864 70.695215 0.276154 70.419061 1035.297864 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 12/31/88 16.355551 1151.742541 70.419061 0.248234 70.170827 1147.682541 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 12/31/89 21.203830 1487.890289 70.170827 0.191475 69.979352 1483.830289 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/90 18.604812 1301.952693 69.979352 0.218223 69.761129 1297.892693 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/91 24.756361 1727.031697 69.761129 0.163998 69.597131 1722.971697 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/92 25.905809 1802.969980 69.597131 0.156722 69.440409 1798.909980 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/93 28.765516 1997.489204 69.440409 0.141141 69.299268 1993.429204 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/94 26.101888 1808.841734 69.299268 0.155544 69.143724 1804.781734 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/95 32.598304 2253.968127 69.143724 0.124546 69.019177 2249.908127 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/96 38.552321 2660.849483 69.019177 0.105311 68.913866 2656.789483 10.26%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 12/31/86 13.461238 1000.000000 74.287372 0.000000 74.287372 1000.000000 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 12/31/87 13.169271 978.310539 74.287372 0.152628 74.134744 976.300539 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 12/31/88 15.325368 1136.142239 74.134744 0.131155 74.003589 1134.132239 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 12/31/89 15.034710 1112.622503 74.003589 0.133691 73.869899 1110.612503 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/90 13.529719 999.438971 73.869899 0.148562 73.721337 997.428971 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/91 18.291494 1348.473389 73.721337 0.109887 73.611450 1346.463389 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/92 20.917682 1539.780895 73.611450 0.096091 73.515359 1537.770895 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/93 24.742238 1818.934501 73.515359 0.081238 73.434121 1816.924501 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/94 22.643778 1662.825935 73.434121 0.088766 73.345355 1660.815935 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/95 26.034837 1909.534361 73.345355 0.077204 73.268151 1907.524361 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 12/31/96 29.275542 2144.964824 73.268151 0.068658 73.199493 2142.954824 7.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 0.213102 97.284848 1620.640745 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/86 6.726387 1000.000000 148.668223 0.000000 148.668223 1000.000000 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/87 6.834911 1016.134070 148.668223 0.039503 148.628720 1015.864070 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/88 7.233508 1075.107032 148.628720 0.037326 148.591393 1074.837032 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/89 7.913260 1175.842329 148.591393 0.034120 148.557273 1175.572329 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/90 8.465525 1257.615311 148.557273 0.031894 148.525379 1257.345311 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/91 9.308744 1382.584733 148.525379 0.029005 148.496374 1382.314733 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 12/31/92 9.668718 1435.769567 148.496374 0.027925 148.468449 1435.499567 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/93 10.181385 1511.614441 148.468449 0.026519 148.441930 1511.344441 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/94 10.039372 1490.263757 148.441930 0.026894 148.415036 1489.993757 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/95 10.999577 1632.502617 148.415036 0.024546 148.390490 1632.232617 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/96 11.329532 1681.194801 148.390490 0.023832 148.366658 1680.924801 5.33%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 0.167000 173.408943 1734.089433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 12/31/87 9.967727 1000.000000 100.323775 0.000000 100.323775 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 12/31/88 10.580357 1061.461354 100.323775 0.153114 100.170661 1059.841354 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 12/31/89 11.776055 1179.615213 100.170661 0.137567 100.033094 1177.995213 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/90 12.557920 1256.207588 100.033094 0.129002 99.904091 1254.587588 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/91 14.336464 1432.271410 99.904091 0.112999 99.791093 1430.651410 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/92 15.087944 1505.642421 99.791093 0.107370 99.683722 1504.022421 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/93 16.638507 1658.588313 99.683722 0.097365 99.586358 1656.968313 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/94 15.562412 1549.803931 99.586358 0.104097 99.482261 1548.183931 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/95 18.466059 1837.045299 99.482261 0.087729 99.394532 1835.425299 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/96 18.990158 1887.517874 99.394532 0.085307 99.309225 1885.897874 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 0.031791 89.480028 1182.144458 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/87 6.304108 1000.000000 158.626724 0.000000 158.626724 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/88 6.081994 964.766784 158.626724 0.341993 158.284731 962.686784 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/89 7.736741 1224.607967 158.284731 0.268847 158.015884 1222.527967 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/90 7.542668 1191.861351 158.015884 0.275764 157.740119 1189.781351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/91 10.568393 1667.059574 157.740119 0.196813 157.543306 1664.979574 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 12/31/92 10.296825 1622.195853 157.543306 0.202004 157.341302 1620.115853 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/93 11.124183 1750.293438 157.341302 0.186980 157.154322 1748.213438 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/94 10.857486 1706.300852 157.154322 0.191573 156.962749 1704.220852 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/95 14.058113 2206.600065 156.962749 0.147957 156.814792 2204.520065 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/96 13.282214 2082.847625 156.814792 0.156600 156.658192 2080.767625 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a div2 VALUEQ q 12/31/87 9.225971 1000.000000 108.389675 0.000000 108.389675 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 12/31/88 11.801629 1279.174734 108.389675 0.369441 108.020235 1274.814734 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 12/31/89 13.157143 1421.237674 108.020235 0.331379 107.688856 1416.877674 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/90 11.939049 1285.702525 107.688856 0.365188 107.323668 1281.342525 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/91 15.057650 1616.042222 107.323668 0.289554 107.034114 1611.682222 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/92 17.080465 1828.192433 107.034114 0.255262 106.778851 1823.832433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/93 18.062234 1928.664599 106.778851 0.241388 106.537464 1924.304599 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/94 18.360853 1956.118710 106.537464 0.237462 106.300002 1951.758710 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/95 24.930081 2650.067659 106.300002 0.174889 106.125113 2645.707659 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/96 30.819233 3270.694580 106.125113 0.141470 105.983643 3266.334580 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b div2 BALFND q 12/31/89 7.823012 1000.000000 127.828003 0.000000 127.828003 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 12/31/90 7.876448 1006.830617 127.828003 0.132039 127.695964 1005.790617 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 12/31/91 9.542707 1218.565166 127.695964 0.108984 127.586980 1217.525166 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 12/31/92 10.183039 1299.223192 127.586980 0.102131 127.484849 1298.183192 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/93 10.705679 1364.811873 127.484849 0.097145 127.387705 1363.771873 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/94 10.217587 1301.594954 127.387705 0.101785 127.285919 1300.554954 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/95 12.489026 1589.677155 127.285919 0.083273 127.202646 1588.637155 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/96 13.181800 1676.759841 127.202646 1.223720 125.978926 1660.629002 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/89 6.178927 1000.000000 161.840397 0.000000 161.840397 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/90 6.512261 1053.946907 161.840397 0.036854 161.803544 1053.706907 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/91 7.882231 1275.372908 161.803544 0.030448 161.773095 1275.132908 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/92 8.695786 1406.744218 161.773095 0.027600 161.745496 1406.504218 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/93 10.411214 1683.966971 161.745496 0.023052 161.722444 1683.726971 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 12/31/94 9.655628 1561.531756 161.722444 0.024856 161.697588 1561.291756 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/95 11.153657 1803.519432 161.697588 0.021518 161.676070 1803.279432 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/96 12.622550 2040.764280 161.676070 1.474098 160.201972 2022.157401 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/86 4.234943 1000.000000 236.130687 0.000000 236.130687 1000.000000 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/87 4.134969 976.393071 236.130687 0.258769 235.871918 975.323071 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/88 5.010861 1181.921397 235.871918 0.213536 235.658382 1180.851397 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/89 5.806942 1368.454558 235.658382 0.184262 235.474120 1367.384558 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/90 4.857970 1143.926211 235.474120 0.220257 235.253863 1142.856211 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/91 6.305979 1483.505923 235.253863 0.169680 235.084183 1482.435923 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/92 7.279096 1711.200338 235.084183 0.146996 234.937187 1710.130338 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/93 8.503809 1997.860965 234.937187 0.125826 234.811361 1996.790965 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 12/31/94 8.991578 2111.324667 234.811361 0.119000 234.692361 2110.254667 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/95 11.921222 2797.819734 234.692361 0.089756 234.602605 2796.749734 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/96 13.453420 3156.207376 234.602605 2.190957 232.411648 3126.731509 12.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/86 3.869228 1000.000000 258.449489 0.000000 258.449489 1000.000000 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/87 3.961179 1023.764689 258.449489 0.361004 258.088486 1022.334689 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/88 4.521386 1166.917665 258.088486 0.316275 257.772211 1165.487665 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/89 5.872409 1513.743851 257.772211 0.243512 257.528699 1512.313851 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/90 5.118909 1318.265976 257.528699 0.279356 257.249343 1316.835976 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/91 7.356310 1892.405913 257.249343 0.194391 257.054952 1890.975913 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/92 7.941793 2041.477217 257.054952 0.180060 256.874892 2040.047217 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/93 9.362411 2404.968312 256.874892 0.152738 256.722153 2403.538312 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 12/31/94 9.244314 2373.220196 256.722153 0.154690 256.567464 2371.790196 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/95 12.359885 3171.144345 256.567464 0.115697 256.451767 3169.714345 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/96 13.999957 3590.313707 256.451767 2.410209 254.041558 3556.570884 13.52%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 1.783075 177.780802 1777.808022 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 12/31/86 13.850885 1000.000000 72.197553 0.000000 72.197553 1000.000000 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 12/31/87 16.897963 1219.991575 72.197553 0.404783 71.792770 1213.151575 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 12/31/88 19.831828 1423.781870 71.792770 0.344900 71.447870 1416.941870 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 12/31/89 23.711872 1694.162750 71.447870 0.288463 71.159407 1687.322750 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/90 23.215292 1651.986412 71.159407 0.294633 70.864774 1645.146412 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/91 27.891899 1976.553108 70.864774 0.245232 70.619541 1969.713108 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/92 30.179495 2131.262088 70.619541 0.226644 70.392897 2124.422088 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/93 34.512855 2429.459852 70.392897 0.198187 70.194710 2422.619852 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/94 35.495155 2491.572116 70.194710 0.192702 70.002008 2484.732116 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 1b
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 FLEXMN Q 12/31/95 42.867835 3000.834519 70.002008 0.159560 69.842448 2993.994519 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/96 49.261868 3440.569433 69.842448 0.767432 69.075016 3402.764308 13.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 12/31/86 14.028671 1000.000000 71.282590 0.000000 71.282590 1000.000000 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 12/31/87 14.580816 1039.358326 71.282590 0.278448 71.004142 1035.298326 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 12/31/88 16.220777 1151.742349 71.004142 0.250296 70.753845 1147.682349 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 12/31/89 21.029096 1487.889408 70.753845 0.193066 70.560780 1483.829408 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/90 18.451506 1301.952648 70.560780 0.220036 70.340743 1297.892648 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/91 24.552354 1727.030832 70.340743 0.165361 70.175382 1722.970832 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/92 25.692327 1802.968873 70.175382 0.158024 70.017359 1798.908873 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/93 28.528477 1997.488605 70.017359 0.142314 69.875045 1993.428605 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/94 25.886803 1808.841516 69.875045 0.156837 69.718208 1804.781516 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/95 32.329694 2253.968331 69.718208 0.125581 69.592627 2249.908331 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/96 38.234636 2660.848756 69.592627 0.732520 68.860107 2632.841117 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 12/31/86 14.145229 1000.000000 70.695215 0.000000 70.695215 1000.000000 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 12/31/87 14.701955 1039.357864 70.695215 0.276154 70.419061 1035.297864 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 12/31/88 16.355551 1151.742541 70.419061 0.248234 70.170827 1147.682541 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 12/31/89 21.203830 1487.890289 70.170827 0.191475 69.979352 1483.830289 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/90 18.604812 1301.952693 69.979352 0.218223 69.761129 1297.892693 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/91 24.756361 1727.031697 69.761129 0.163998 69.597131 1722.971697 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/92 25.905809 1802.969980 69.597131 0.156722 69.440409 1798.909980 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/93 28.765516 1997.489204 69.440409 0.141141 69.299268 1993.429204 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/94 26.101888 1808.841734 69.299268 0.155544 69.143724 1804.781734 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/95 32.598304 2253.968127 69.143724 0.124546 69.019177 2249.908127 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/96 38.552321 2660.849483 69.019177 0.726484 68.292693 2632.841837 10.16%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 12/31/86 13.461238 1000.000000 74.287372 0.000000 74.287372 1000.000000 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 12/31/87 13.169271 978.310539 74.287372 0.152628 74.134744 976.300539 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 12/31/88 15.325368 1136.142239 74.134744 0.131155 74.003589 1134.132239 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 12/31/89 15.034710 1112.622503 74.003589 0.133691 73.869899 1110.612503 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/90 13.529719 999.438971 73.869899 0.148562 73.721337 997.428971 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/91 18.291494 1348.473389 73.721337 0.109887 73.611450 1346.463389 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/92 20.917682 1539.780895 73.611450 0.096091 73.515359 1537.770895 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/93 24.742238 1818.934501 73.515359 0.081238 73.434121 1816.924501 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/94 22.643778 1662.825935 73.434121 0.088766 73.345355 1660.815935 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/95 26.034837 1909.534361 73.345355 0.077204 73.268151 1907.524361 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 12/31/96 29.275542 2144.964824 73.268151 0.728071 72.540079 2123.650140 7.82%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 1.090583 96.407366 1606.023029 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/86 6.726387 1000.000000 148.668223 0.000000 148.668223 1000.000000 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/87 6.834911 1016.134070 148.668223 0.039503 148.628720 1015.864070 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/88 7.233508 1075.107032 148.628720 0.037326 148.591393 1074.837032 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/89 7.913260 1175.842329 148.591393 0.034120 148.557273 1175.572329 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/90 8.465525 1257.615311 148.557273 0.031894 148.525379 1257.345311 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/91 9.308744 1382.584733 148.525379 0.029005 148.496374 1382.314733 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 12/31/92 9.668718 1435.769567 148.496374 0.027925 148.468449 1435.499567 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/93 10.181385 1511.614441 148.468449 0.026519 148.441930 1511.344441 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/94 10.039372 1490.263757 148.441930 0.026894 148.415036 1489.993757 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/95 10.999577 1632.502617 148.415036 0.024546 148.390490 1632.232617 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/96 11.329532 1681.194801 148.390490 1.359346 147.031144 1665.794048 5.23%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 1.729183 171.846760 1718.467598 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 12/31/87 9.967727 1000.000000 100.323775 0.000000 100.323775 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 12/31/88 10.580357 1061.461354 100.323775 0.153114 100.170661 1059.841354 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 12/31/89 11.776055 1179.615213 100.170661 0.137567 100.033094 1177.995213 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/90 12.557920 1256.207588 100.033094 0.129002 99.904091 1254.587588 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/91 14.336464 1432.271410 99.904091 0.112999 99.791093 1430.651410 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/92 15.087944 1505.642421 99.791093 0.107370 99.683722 1504.022421 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/93 16.638507 1658.588313 99.683722 0.097365 99.586358 1656.968313 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/94 15.562412 1549.803931 99.586358 0.104097 99.482261 1548.183931 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/95 18.466059 1837.045299 99.482261 0.087729 99.394532 1835.425299 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/96 18.990158 1887.517874 99.394532 0.979858 98.414674 1868.910213 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 0.837397 88.674422 1171.501378 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/87 6.304108 1000.000000 158.626724 0.000000 158.626724 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/88 6.081994 964.766784 158.626724 0.341993 158.284731 962.686784 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/89 7.736741 1224.607967 158.284731 0.268847 158.015884 1222.527967 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/90 7.542668 1191.861351 158.015884 0.275764 157.740119 1189.781351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/91 10.568393 1667.059574 157.740119 0.196813 157.543306 1664.979574 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 12/31/92 10.296825 1622.195853 157.543306 0.202004 157.341302 1620.115853 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/93 11.124183 1750.293438 157.341302 0.186980 157.154322 1748.213438 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/94 10.857486 1706.300852 157.154322 0.191573 156.962749 1704.220852 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/95 14.058113 2206.600065 156.962749 0.147957 156.814792 2204.520065 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/96 13.282214 2082.847625 156.814792 1.567934 155.246858 2062.021996 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 12/31/87 9.225971 1000.000000 108.389675 0.000000 108.389675 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 12/31/88 11.801629 1279.174734 108.389675 0.369441 108.020235 1274.814734 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 12/31/89 13.157143 1421.237674 108.020235 0.331379 107.688856 1416.877674 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/90 11.939049 1285.702525 107.688856 0.365188 107.323668 1281.342525 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/91 15.057650 1616.042222 107.323668 0.289554 107.034114 1611.682222 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/92 17.080465 1828.192433 107.034114 0.255262 106.778851 1823.832433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/93 18.062234 1928.664599 106.778851 0.241388 106.537464 1924.304599 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/94 18.360853 1956.118710 106.537464 0.237462 106.300002 1951.758710 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/95 24.930081 2650.067659 106.300002 0.174889 106.125113 2645.707659 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/96 30.819233 3270.694580 106.125113 1.096596 105.028517 3236.898328 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - 10YR - Tbl 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ---------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c div2 BALFND q 12/31/89 7.823012 1000.000000 127.828003 0.000000 127.828003 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 12/31/90 7.876448 1006.830617 127.828003 0.132039 127.695964 1005.790617 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 12/31/91 9.542707 1218.565166 127.695964 0.108984 127.586980 1217.525166 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 12/31/92 10.183039 1299.223192 127.586980 0.102131 127.484849 1298.183192 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/93 10.705679 1364.811873 127.484849 0.097145 127.387705 1363.771873 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/94 10.217587 1301.594954 127.387705 0.101785 127.285919 1300.554954 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/95 12.489026 1589.677155 127.285919 0.083273 127.202646 1588.637155 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/96 13.181800 1676.759841 127.202646 3.872005 123.330641 1625.719841 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/89 6.178927 1000.000000 161.840397 0.000000 161.840397 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/90 6.512261 1053.946907 161.840397 0.036854 161.803544 1053.706907 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/91 7.882231 1275.372908 161.803544 0.030448 161.773095 1275.132908 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/92 8.695786 1406.744218 161.773095 0.027600 161.745496 1406.504218 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/93 10.411214 1683.966971 161.745496 0.023052 161.722444 1683.726971 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 12/31/94 9.655628 1561.531756 161.722444 0.024856 161.697588 1561.291756 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/95 11.153657 1803.519432 161.697588 0.021518 161.676070 1803.279432 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/96 12.622550 2040.764280 161.676070 3.980178 157.695892 1990.524280 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/86 4.234943 1000.000000 236.130687 0.000000 236.130687 1000.000000 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/87 4.134969 976.393071 236.130687 0.258769 235.871918 975.323071 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/88 5.010861 1181.921397 235.871918 0.213536 235.658382 1180.851397 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/89 5.806942 1368.454558 235.658382 0.184262 235.474120 1367.384558 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/90 4.857970 1143.926211 235.474120 0.220257 235.253863 1142.856211 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/91 6.305979 1483.505923 235.253863 0.169680 235.084183 1482.435923 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/92 7.279096 1711.200338 235.084183 0.146996 234.937187 1710.130338 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/93 8.503809 1997.860965 234.937187 0.125826 234.811361 1996.790965 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 12/31/94 8.991578 2111.324667 234.811361 0.119000 234.692361 2110.254667 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/95 11.921222 2797.819734 234.692361 0.089756 234.602605 2796.749734 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/96 13.453420 3156.207376 234.602605 3.796061 230.806544 3105.137376 11.99%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/86 3.869228 1000.000000 258.449489 0.000000 258.449489 1000.000000 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/87 3.961179 1023.764689 258.449489 0.361004 258.088486 1022.334689 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/88 4.521386 1166.917665 258.088486 0.316275 257.772211 1165.487665 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/89 5.872409 1513.743851 257.772211 0.243512 257.528699 1512.313851 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/90 5.118909 1318.265976 257.528699 0.279356 257.249343 1316.835976 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/91 7.356310 1892.405913 257.249343 0.194391 257.054952 1890.975913 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/92 7.941793 2041.477217 257.054952 0.180060 256.874892 2040.047217 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/93 9.362411 2404.968312 256.874892 0.152738 256.722153 2403.538312 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 12/31/94 9.244314 2373.220196 256.722153 0.154690 256.567464 2371.790196 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/95 12.359885 3171.144345 256.567464 0.115697 256.451767 3169.714345 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/96 13.999957 3590.313707 256.451767 3.673583 252.778184 3538.883707 13.46%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 5.167000 174.396877 1743.968771 0.00%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 12/31/86 13.850885 1000.000000 72.197553 0.000000 72.197553 1000.000000 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 12/31/87 16.897963 1219.991575 72.197553 0.404783 71.792770 1213.151575 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 12/31/88 19.831828 1423.781870 71.792770 0.344900 71.447870 1416.941870 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 12/31/89 23.711872 1694.162750 71.447870 0.288463 71.159407 1687.322750 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/90 23.215292 1651.986412 71.159407 0.294633 70.864774 1645.146412 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/91 27.891899 1976.553108 70.864774 0.245232 70.619541 1969.713108 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/92 30.179495 2131.262088 70.619541 0.226644 70.392897 2124.422088 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/93 34.512855 2429.459852 70.392897 0.198187 70.194710 2422.619852 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/94 35.495155 2491.572116 70.194710 0.192702 70.002008 2484.732116 12.95%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - 10YR - Tbl 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 FLEXMN Q 12/31/95 42.867835 3000.834519 70.002008 0.159560 69.842448 2993.994519 12.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/96 49.261868 3440.569433 69.842448 1.153834 68.688614 3383.729433 12.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 12/31/86 14.028671 1000.000000 71.282590 0.000000 71.282590 1000.000000 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 12/31/87 14.580816 1039.358326 71.282590 0.278448 71.004142 1035.298326 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 12/31/88 16.220777 1151.742349 71.004142 0.250296 70.753845 1147.682349 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 12/31/89 21.029096 1487.889408 70.753845 0.193066 70.560780 1483.829408 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/90 18.451506 1301.952648 70.560780 0.220036 70.340743 1297.892648 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/91 24.552354 1727.030832 70.340743 0.165361 70.175382 1722.970832 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/92 25.692327 1802.968873 70.175382 0.158024 70.017359 1798.908873 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/93 28.528477 1997.488605 70.017359 0.142314 69.875045 1993.428605 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/94 25.886803 1808.841516 69.875045 0.156837 69.718208 1804.781516 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/95 32.329694 2253.968331 69.718208 0.125581 69.592627 2249.908331 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/96 38.234636 2660.848756 69.592627 1.413901 68.178726 2606.788756 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 12/31/86 14.145229 1000.000000 70.695215 0.000000 70.695215 1000.000000 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 12/31/87 14.701955 1039.357864 70.695215 0.276154 70.419061 1035.297864 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 12/31/88 16.355551 1151.742541 70.419061 0.248234 70.170827 1147.682541 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 12/31/89 21.203830 1487.890289 70.170827 0.191475 69.979352 1483.830289 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/90 18.604812 1301.952693 69.979352 0.218223 69.761129 1297.892693 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/91 24.756361 1727.031697 69.761129 0.163998 69.597131 1722.971697 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/92 25.905809 1802.969980 69.597131 0.156722 69.440409 1798.909980 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/93 28.765516 1997.489204 69.440409 0.141141 69.299268 1993.429204 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/94 26.101888 1808.841734 69.299268 0.155544 69.143724 1804.781734 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/95 32.598304 2253.968127 69.143724 0.124546 69.019177 2249.908127 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/96 38.552321 2660.849483 69.019177 1.402250 67.616927 2606.789483 10.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 12/31/86 13.461238 1000.000000 74.287372 0.000000 74.287372 1000.000000 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 12/31/87 13.169271 978.310539 74.287372 0.152628 74.134744 976.300539 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 12/31/88 15.325368 1136.142239 74.134744 0.131155 74.003589 1134.132239 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 12/31/89 15.034710 1112.622503 74.003589 0.133691 73.869899 1110.612503 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/90 13.529719 999.438971 73.869899 0.148562 73.721337 997.428971 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/91 18.291494 1348.473389 73.721337 0.109887 73.611450 1346.463389 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/92 20.917682 1539.780895 73.611450 0.096091 73.515359 1537.770895 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/93 24.742238 1818.934501 73.515359 0.081238 73.434121 1816.924501 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/94 22.643778 1662.825935 73.434121 0.088766 73.345355 1660.815935 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/95 26.034837 1909.534361 73.345355 0.077204 73.268151 1907.524361 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 12/31/96 29.275542 2144.964824 73.268151 1.776568 71.491582 2092.954824 7.66%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 3.214533 94.283416 1570.640745 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/86 6.726387 1000.000000 148.668223 0.000000 148.668223 1000.000000 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/87 6.834911 1016.134070 148.668223 0.039503 148.628720 1015.864070 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/88 7.233508 1075.107032 148.628720 0.037326 148.591393 1074.837032 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/89 7.913260 1175.842329 148.591393 0.034120 148.557273 1175.572329 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/90 8.465525 1257.615311 148.557273 0.031894 148.525379 1257.345311 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/91 9.308744 1382.584733 148.525379 0.029005 148.496374 1382.314733 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 12/31/92 9.668718 1435.769567 148.496374 0.027925 148.468449 1435.499567 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/93 10.181385 1511.614441 148.468449 0.026519 148.441930 1511.344441 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/94 10.039372 1490.263757 148.441930 0.026894 148.415036 1489.993757 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/95 10.999577 1632.502617 148.415036 0.024546 148.390490 1632.232617 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/96 11.329532 1681.194801 148.390490 4.437076 143.953413 1630.924801 5.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - 10YR - Tbl 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 5.167000 168.408943 1684.089433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 12/31/87 9.967727 1000.000000 100.323775 0.000000 100.323775 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 12/31/88 10.580357 1061.461354 100.323775 0.153114 100.170661 1059.841354 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 12/31/89 11.776055 1179.615213 100.170661 0.137567 100.033094 1177.995213 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/90 12.557920 1256.207588 100.033094 0.129002 99.904091 1254.587588 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/91 14.336464 1432.271410 99.904091 0.112999 99.791093 1430.651410 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/92 15.087944 1505.642421 99.791093 0.107370 99.683722 1504.022421 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/93 16.638507 1658.588313 99.683722 0.097365 99.586358 1656.968313 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/94 15.562412 1549.803931 99.586358 0.104097 99.482261 1548.183931 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/95 18.466059 1837.045299 99.482261 0.087729 99.394532 1835.425299 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/96 18.990158 1887.517874 99.394532 2.718250 96.676282 1835.897874 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 3.816440 85.695380 1132.144458 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/87 6.304108 1000.000000 158.626724 0.000000 158.626724 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/88 6.081994 964.766784 158.626724 0.341993 158.284731 962.686784 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/89 7.736741 1224.607967 158.284731 0.268847 158.015884 1222.527967 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/90 7.542668 1191.861351 158.015884 0.275764 157.740119 1189.781351 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/91 10.568393 1667.059574 157.740119 0.196813 157.543306 1664.979574 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 12/31/92 10.296825 1622.195853 157.543306 0.202004 157.341302 1620.115853 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/93 11.124183 1750.293438 157.341302 0.186980 157.154322 1748.213438 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/94 10.857486 1706.300852 157.154322 0.191573 156.962749 1704.220852 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/95 14.058113 2206.600065 156.962749 0.147957 156.814792 2204.520065 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/96 13.282214 2082.847625 156.814792 3.921033 152.893759 2030.767625 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 12/31/87 9.225971 1000.000000 108.389675 0.000000 108.389675 1000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 12/31/88 11.801629 1279.174734 108.389675 0.369441 108.020235 1274.814734 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 12/31/89 13.157143 1421.237674 108.020235 0.331379 107.688856 1416.877674 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/90 11.939049 1285.702525 107.688856 0.365188 107.323668 1281.342525 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/91 15.057650 1616.042222 107.323668 0.289554 107.034114 1611.682222 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/92 17.080465 1828.192433 107.034114 0.255262 106.778851 1823.832433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/93 18.062234 1928.664599 106.778851 0.241388 106.537464 1924.304599 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/94 18.360853 1956.118710 106.537464 0.237462 106.300002 1951.758710 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/95 24.930081 2650.067659 106.300002 0.174889 106.125113 2645.707659 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/96 30.819233 3270.694580 106.125113 1.763834 104.361279 3216.334580 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1D -Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - 10 YR - Tbl 1D
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of unis fee & deferred at end of Ending return for
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d div2 FLEXMN q 12/31/86 13.850885 1000.000000 72.197553 0.000000 72.197553 1000.000000 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 12/31/87 16.897963 1219.991575 72.197553 0.404783 71.792770 1213.151575 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 12/31/88 19.831828 1423.781870 71.792770 0.344900 71.447870 1416.941870 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 12/31/89 23.711872 1694.162750 71.447870 0.288463 71.159407 1687.322750 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/90 23.215292 1651.986412 71.159407 0.294633 70.864774 1645.146412 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/91 27.891899 1976.553108 70.864774 0.245232 70.619541 1969.713108 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/92 30.179495 2131.262088 70.619541 0.226644 70.392897 2124.422088 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/93 34.512855 2429.459852 70.392897 0.198187 70.194710 2422.619852 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/94 35.495155 2491.572116 70.194710 0.192702 70.002008 2484.732116 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/95 42.867835 3000.834519 70.002008 0.159560 69.842448 2993.994519 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/96 49.261868 3440.569433 69.842448 1.011880 68.830567 3390.722315 12.98%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 12/31/86 14.028671 1000.000000 71.282590 0.000000 71.282590 1000.000000 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 12/31/87 14.580816 1039.358326 71.282590 0.278448 71.004142 1035.298326 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 12/31/88 16.220777 1151.742349 71.004142 0.250296 70.753845 1147.682349 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 12/31/89 21.029096 1487.889408 70.753845 0.193066 70.560780 1483.829408 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/90 18.451506 1301.952648 70.560780 0.220036 70.340743 1297.892648 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/91 24.552354 1727.030832 70.340743 0.165361 70.175382 1722.970832 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/92 25.692327 1802.968873 70.175382 0.158024 70.017359 1798.908873 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/93 28.528477 1997.488605 70.017359 0.142314 69.875045 1993.428605 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/94 25.886803 1808.841516 69.875045 0.156837 69.718208 1804.781516 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/95 32.329694 2253.968331 69.718208 0.125581 69.592627 2249.908331 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/96 38.234636 2660.848756 69.592627 0.976094 68.616533 2623.528146 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 12/31/86 14.145229 1000.000000 70.695215 0.000000 70.695215 1000.000000 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 12/31/87 14.701955 1039.357864 70.695215 0.276154 70.419061 1035.297864 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 12/31/88 16.355551 1151.742541 70.419061 0.248234 70.170827 1147.682541 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 12/31/89 21.203830 1487.890289 70.170827 0.191475 69.979352 1483.830289 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/90 18.604812 1301.952693 69.979352 0.218223 69.761129 1297.892693 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/91 24.756361 1727.031697 69.761129 0.163998 69.597131 1722.971697 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/92 25.905809 1802.969980 69.597131 0.156722 69.440409 1798.909980 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/93 28.765516 1997.489204 69.440409 0.141141 69.299268 1993.429204 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/94 26.101888 1808.841734 69.299268 0.155544 69.143724 1804.781734 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/95 32.598304 2253.968127 69.143724 0.124546 69.019177 2249.908127 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/96 38.552321 2660.849483 69.019177 0.968051 68.051126 2623.528864 10.12%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 12/31/86 13.461238 1000.000000 74.287372 0.000000 74.287372 1000.000000 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 12/31/87 13.169271 978.310539 74.287372 0.152628 74.134744 976.300539 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 12/31/88 15.325368 1136.142239 74.134744 0.131155 74.003589 1134.132239 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 12/31/89 15.034710 1112.622503 74.003589 0.133691 73.869899 1110.612503 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/90 13.529719 999.438971 73.869899 0.148562 73.721337 997.428971 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/91 18.291494 1348.473389 73.721337 0.109887 73.611450 1346.463389 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/92 20.917682 1539.780895 73.611450 0.096091 73.515359 1537.770895 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/93 24.742238 1818.934501 73.515359 0.081238 73.434121 1816.924501 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/94 22.643778 1662.825935 73.434121 0.088766 73.345355 1660.815935 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/95 26.034837 1909.534361 73.345355 0.077204 73.268151 1907.524361 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/96 29.275542 2144.964824 73.268151 0.984510 72.283641 2116.142763 7.78%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 4.600509 92.897440 1547.552162 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 12/31/87 9.967727 1000.000000 100.323775 0.000000 100.323775 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 12/31/88 10.580357 1061.461354 100.323775 0.153114 100.170661 1059.841354 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 12/31/89 11.776055 1179.615213 100.170661 0.137567 100.033094 1177.995213 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1D -Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - 10 YR - Tbl 1D
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d DIV2 QUALBD Q 12/31/90 12.557920 1256.207588 100.033094 0.129002 99.904091 1254.587588 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/91 14.336464 1432.271410 99.904091 0.112999 99.791093 1430.651410 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/92 15.087944 1505.642421 99.791093 0.107370 99.683722 1504.022421 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/93 16.638507 1658.588313 99.683722 0.097365 99.586358 1656.968313 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/94 15.562412 1549.803931 99.586358 0.104097 99.482261 1548.183931 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/95 18.466059 1837.045299 99.482261 0.087729 99.394532 1835.425299 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/96 18.990158 1887.517874 99.394532 2.570171 96.824362 1838.709927 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 12/31/87 9.225971 1000.000000 108.389675 0.000000 108.389675 1000.000000 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 12/31/88 11.801629 1279.174734 108.389675 0.369441 108.020235 1274.814734 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 12/31/89 13.157143 1421.237674 108.020235 0.331379 107.688856 1416.877674 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/90 11.939049 1285.702525 107.688856 0.365188 107.323668 1281.342525 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/91 15.057650 1616.042222 107.323668 0.289554 107.034114 1611.682222 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/92 17.080465 1828.192433 107.034114 0.255262 106.778851 1823.832433 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/93 18.062234 1928.664599 106.778851 0.241388 106.537464 1924.304599 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/94 18.360853 1956.118710 106.537464 0.237462 106.300002 1951.758710 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/95 24.930081 2650.067659 106.300002 0.174889 106.125113 2645.707659 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/96 30.819233 3270.694580 106.125113 2.794598 103.330515 3184.567215 0.00%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 div2 BALFND q 12/31/89 7.823012 1000.000000 127.828003 0.000000 127.828003 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 12/31/90 7.876448 1006.830617 127.828003 0.132039 127.695964 1005.790617 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 12/31/91 9.542707 1218.565166 127.695964 0.108984 127.586980 1217.525166 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 12/31/92 10.183039 1299.223192 127.586980 0.102131 127.484849 1298.183192 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/93 10.705679 1364.811873 127.484849 0.097145 127.387705 1363.771873 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/94 10.217587 1301.594954 127.387705 0.101785 127.285919 1300.554954 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/95 12.489026 1589.677155 127.285919 0.083273 127.202646 1588.637155 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/96 13.181800 1676.759841 127.202646 0.078897 127.123749 1675.719841 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/89 6.178927 1000.000000 161.840397 0.000000 161.840397 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/90 6.512261 1053.946907 161.840397 0.036854 161.803544 1053.706907 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/91 7.882231 1275.372908 161.803544 0.030448 161.773095 1275.132908 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/92 8.695786 1406.744218 161.773095 0.027600 161.745496 1406.504218 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/93 10.411214 1683.966971 161.745496 0.023052 161.722444 1683.726971 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 12/31/94 9.655628 1561.531756 161.722444 0.024856 161.697588 1561.291756 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/95 11.153657 1803.519432 161.697588 0.021518 161.676070 1803.279432 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/96 12.622550 2040.764280 161.676070 0.019014 161.657057 2040.524280 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/86 4.234943 1000.000000 236.130687 0.000000 236.130687 1000.000000 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/87 4.134969 976.393071 236.130687 0.258769 235.871918 975.323071 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/88 5.010861 1181.921397 235.871918 0.213536 235.658382 1180.851397 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/89 5.806942 1368.454558 235.658382 0.184262 235.474120 1367.384558 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/90 4.857970 1143.926211 235.474120 0.220257 235.253863 1142.856211 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/91 6.305979 1483.505923 235.253863 0.169680 235.084183 1482.435923 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/92 7.279096 1711.200338 235.084183 0.146996 234.937187 1710.130338 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/93 8.503809 1997.860965 234.937187 0.125826 234.811361 1996.790965 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 12/31/94 8.991578 2111.324667 234.811361 0.119000 234.692361 2110.254667 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/95 11.921222 2797.819734 234.692361 0.089756 234.602605 2796.749734 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/96 13.453420 3156.207376 234.602605 0.079534 234.523071 3155.137376 12.17%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/86 3.869228 1000.000000 258.449489 0.000000 258.449489 1000.000000 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/87 3.961179 1023.764689 258.449489 0.361004 258.088486 1022.334689 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/88 4.521386 1166.917665 258.088486 0.316275 257.772211 1165.487665 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/89 5.872409 1513.743851 257.772211 0.243512 257.528699 1512.313851 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/90 5.118909 1318.265976 257.528699 0.279356 257.249343 1316.835976 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/91 7.356310 1892.405913 257.249343 0.194391 257.054952 1890.975913 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/92 7.941793 2041.477217 257.054952 0.180060 256.874892 2040.047217 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/93 9.362411 2404.968312 256.874892 0.152738 256.722153 2403.538312 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 12/31/94 9.244314 2373.220196 256.722153 0.154690 256.567464 2371.790196 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/95 12.359885 3171.144345 256.567464 0.115697 256.451767 3169.714345 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/96 13.999957 3590.313707 256.451767 0.102143 256.349624 3588.883707 13.62%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/92 5.545692 1000.000000 180.320148 0.000000 180.320148 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/93 6.033339 1087.932579 180.320148 0.276795 180.043352 1086.262579 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/94 6.043748 1088.136650 180.043352 0.276319 179.767034 1086.466650 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/95 8.220260 1477.731756 179.767034 0.203157 179.563877 1476.061756 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/96 10.000000 1795.638771 179.563877 0.167000 179.396877 1793.968771 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 12/31/86 13.850885 1000.000000 72.197553 0.000000 72.197553 1000.000000 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 12/31/87 16.897963 1219.991575 72.197553 0.404783 71.792770 1213.151575 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 12/31/88 19.831828 1423.781870 71.792770 0.344900 71.447870 1416.941870 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 12/31/89 23.711872 1694.162750 71.447870 0.288463 71.159407 1687.322750 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/90 23.215292 1651.986412 71.159407 0.294633 70.864774 1645.146412 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/91 27.891899 1976.553108 70.864774 0.245232 70.619541 1969.713108 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/92 30.179495 2131.262088 70.619541 0.226644 70.392897 2124.422088 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/93 34.512855 2429.459852 70.392897 0.198187 70.194710 2422.619852 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/94 35.495155 2491.572116 70.194710 0.192702 70.002008 2484.732116 13.12%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 FLEXMN Q 12/31/95 42.867835 3000.834519 70.002008 0.159560 69.842448 2993.994519 13.12%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/96 49.261868 3440.569433 69.842448 0.138850 69.703598 3433.729433 13.12%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 12/31/86 14.028671 1000.000000 71.282590 0.000000 71.282590 1000.000000 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 12/31/87 14.580816 1039.358326 71.282590 0.278448 71.004142 1035.298326 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 12/31/88 16.220777 1151.742349 71.004142 0.250296 70.753845 1147.682349 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 12/31/89 21.029096 1487.889408 70.753845 0.193066 70.560780 1483.829408 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/90 18.451506 1301.952648 70.560780 0.220036 70.340743 1297.892648 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/91 24.552354 1727.030832 70.340743 0.165361 70.175382 1722.970832 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/92 25.692327 1802.968873 70.175382 0.158024 70.017359 1798.908873 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/93 28.528477 1997.488605 70.017359 0.142314 69.875045 1993.428605 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/94 25.886803 1808.841516 69.875045 0.156837 69.718208 1804.781516 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/95 32.329694 2253.968331 69.718208 0.125581 69.592627 2249.908331 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/96 38.234636 2660.848756 69.592627 0.106186 69.486440 2656.788756 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 12/31/86 14.145229 1000.000000 70.695215 0.000000 70.695215 1000.000000 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 12/31/87 14.701955 1039.357864 70.695215 0.276154 70.419061 1035.297864 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 12/31/88 16.355551 1151.742541 70.419061 0.248234 70.170827 1147.682541 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 12/31/89 21.203830 1487.890289 70.170827 0.191475 69.979352 1483.830289 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/90 18.604812 1301.952693 69.979352 0.218223 69.761129 1297.892693 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/91 24.756361 1727.031697 69.761129 0.163998 69.597131 1722.971697 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/92 25.905809 1802.969980 69.597131 0.156722 69.440409 1798.909980 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/93 28.765516 1997.489204 69.440409 0.141141 69.299268 1993.429204 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/94 26.101888 1808.841734 69.299268 0.155544 69.143724 1804.781734 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/95 32.598304 2253.968127 69.143724 0.124546 69.019177 2249.908127 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/96 38.552321 2660.849483 69.019177 0.105311 68.913866 2656.789483 10.26%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 12/31/86 13.461238 1000.000000 74.287372 0.000000 74.287372 1000.000000 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 12/31/87 13.169271 978.310539 74.287372 0.152628 74.134744 976.300539 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 12/31/88 15.325368 1136.142239 74.134744 0.131155 74.003589 1134.132239 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 12/31/89 15.034710 1112.622503 74.003589 0.133691 73.869899 1110.612503 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/90 13.529719 999.438971 73.869899 0.148562 73.721337 997.428971 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/91 18.291494 1348.473389 73.721337 0.109887 73.611450 1346.463389 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/92 20.917682 1539.780895 73.611450 0.096091 73.515359 1537.770895 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/93 24.742238 1818.934501 73.515359 0.081238 73.434121 1816.924501 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/94 22.643778 1662.825935 73.434121 0.088766 73.345355 1660.815935 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/95 26.034837 1909.534361 73.345355 0.077204 73.268151 1907.524361 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 12/31/96 29.275542 2144.964824 73.268151 0.068658 73.199493 2142.954824 7.91%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/92 10.175420 1000.000000 98.276042 0.000000 98.276042 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/93 13.880468 1364.117452 98.276042 0.255755 98.020287 1360.567452 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/94 12.843173 1258.891498 98.020287 0.276411 97.743875 1255.341498 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/95 14.435244 1410.956688 97.743875 0.245926 97.497949 1407.406688 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/96 16.658717 1624.190745 97.497949 0.213102 97.284848 1620.640745 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/86 6.726387 1000.000000 148.668223 0.000000 148.668223 1000.000000 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/87 6.834911 1016.134070 148.668223 0.039503 148.628720 1015.864070 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/88 7.233508 1075.107032 148.628720 0.037326 148.591393 1074.837032 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/89 7.913260 1175.842329 148.591393 0.034120 148.557273 1175.572329 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/90 8.465525 1257.615311 148.557273 0.031894 148.525379 1257.345311 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/91 9.308744 1382.584733 148.525379 0.029005 148.496374 1382.314733 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 12/31/92 9.668718 1435.769567 148.496374 0.027925 148.468449 1435.499567 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/93 10.181385 1511.614441 148.468449 0.026519 148.441930 1511.344441 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/94 10.039372 1490.263757 148.441930 0.026894 148.415036 1489.993757 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/95 10.999577 1632.502617 148.415036 0.024546 148.390490 1632.232617 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/96 11.329532 1681.194801 148.390490 0.023832 148.366658 1680.924801 5.33%
- ----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/94 5.754056 1000.000000 173.790453 0.000000 173.790453 1000.000000 0.00%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value 10yr
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 PARTNR Q 12/31/95 7.785188 1352.991351 173.790453 0.214510 173.575943 1351.321351 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/96 10.000000 1735.759433 173.575943 0.167000 173.408943 1734.089433 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 12/31/87 9.967727 1000.000000 100.323775 0.000000 100.323775 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 12/31/88 10.580357 1061.461354 100.323775 0.153114 100.170661 1059.841354 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 12/31/89 11.776055 1179.615213 100.170661 0.137567 100.033094 1177.995213 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/90 12.557920 1256.207588 100.033094 0.129002 99.904091 1254.587588 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/91 14.336464 1432.271410 99.904091 0.112999 99.791093 1430.651410 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/92 15.087944 1505.642421 99.791093 0.107370 99.683722 1504.022421 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/93 16.638507 1658.588313 99.683722 0.097365 99.586358 1656.968313 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/94 15.562412 1549.803931 99.586358 0.104097 99.482261 1548.183931 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/95 18.466059 1837.045299 99.482261 0.087729 99.394532 1835.425299 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/96 18.990158 1887.517874 99.394532 0.085307 99.309225 1885.897874 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/95 11.171709 1000.000000 89.511820 0.000000 89.511820 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/96 13.211266 1182.564458 89.511820 0.031791 89.480028 1182.144458 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/87 6.304108 1000.000000 158.626724 0.000000 158.626724 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/88 6.081994 964.766784 158.626724 0.341993 158.284731 962.686784 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/89 7.736741 1224.607967 158.284731 0.268847 158.015884 1222.527967 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/90 7.542668 1191.861351 158.015884 0.275764 157.740119 1189.781351 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/91 10.568393 1667.059574 157.740119 0.196813 157.543306 1664.979574 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 12/31/92 10.296825 1622.195853 157.543306 0.202004 157.341302 1620.115853 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/93 11.124183 1750.293438 157.341302 0.186980 157.154322 1748.213438 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/94 10.857486 1706.300852 157.154322 0.191573 156.962749 1704.220852 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/95 14.058113 2206.600065 156.962749 0.147957 156.814792 2204.520065 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/96 13.282214 2082.847625 156.814792 0.156600 156.658192 2080.767625 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 12/31/87 9.225971 1000.000000 108.389675 0.000000 108.389675 1000.000000 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 12/31/88 11.801629 1279.174734 108.389675 0.369441 108.020235 1274.814734 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 12/31/89 13.157143 1421.237674 108.020235 0.331379 107.688856 1416.877674 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/90 11.939049 1285.702525 107.688856 0.365188 107.323668 1281.342525 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/91 15.057650 1616.042222 107.323668 0.289554 107.034114 1611.682222 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/92 17.080465 1828.192433 107.034114 0.255262 106.778851 1823.832433 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/93 18.062234 1928.664599 106.778851 0.241388 106.537464 1924.304599 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/94 18.360853 1956.118710 106.537464 0.237462 106.300002 1951.758710 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/95 24.930081 2650.067659 106.300002 0.174889 106.125113 2645.707659 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/96 30.819233 3270.694580 106.125113 0.141470 105.983643 3266.334580 0.00%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 div2 BALFND q 12/31/89 7.823012 10000.000000 1278.280028 0.000000 1278.280028 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 12/31/90 7.876448 10068.306172 1278.280028 0.132039 1278.147989 10067.266172 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 12/31/91 9.542707 12196.991762 1278.147989 0.108984 1278.039005 12195.951762 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 12/31/92 10.183039 13014.321034 1278.039005 0.102131 1277.936875 13013.281034 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/93 10.705679 13681.181962 1277.936875 0.097145 1277.839730 13680.141962 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/94 10.217587 13056.438613 1277.839730 0.101785 1277.737945 13055.398613 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/95 12.489026 15957.702412 1277.737945 0.083273 1277.654672 15956.662412 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/96 13.181800 16841.788349 1277.654672 0.078897 1277.575775 16840.748349 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/89 6.178927 10000.000000 1618.403972 0.000000 1618.403972 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/90 6.512261 10539.469070 1618.403972 0.036854 1618.367119 10539.229070 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/91 7.882231 12756.343471 1618.367119 0.030448 1618.336670 12756.103471 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/92 8.695786 14072.709361 1618.336670 0.027600 1618.309071 14072.469361 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/93 10.411214 16848.562053 1618.309071 0.023052 1618.286019 16848.322053 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 12/31/94 9.655628 15625.567794 1618.286019 0.024856 1618.261163 15625.327794 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/95 11.153657 18049.529945 1618.261163 0.021518 1618.239645 18049.289945 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/96 12.622550 20426.310832 1618.239645 0.019014 1618.220631 20426.070832 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/86 4.234943 10000.000000 2361.306870 0.000000 2361.306870 10000.000000 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/87 4.134969 9763.930707 2361.306870 0.258769 2361.048101 9762.860707 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/88 5.010861 11830.883851 2361.048101 0.213536 2360.834565 11829.813851 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/89 5.806942 13709.229392 2360.834565 0.184262 2360.650303 13708.159392 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/90 4.857970 11467.968353 2360.650303 0.220257 2360.430046 11466.898353 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/91 6.305979 14884.822304 2360.430046 0.169680 2360.260366 14883.752304 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/92 7.279096 17180.561791 2360.260366 0.146996 2360.113370 17179.491791 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/93 8.503809 20069.953316 2360.113370 0.125826 2359.987544 20068.883316 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 12/31/94 8.991578 21220.012081 2359.987544 0.119000 2359.868544 21218.942081 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/95 11.921222 28132.516801 2359.868544 0.089756 2359.778788 28131.446801 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/96 13.453420 31747.095140 2359.778788 0.079534 2359.699254 31746.025140 12.23%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/86 3.869228 10000.000000 2584.494891 0.000000 2584.494891 10000.000000 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/87 3.961179 10237.646890 2584.494891 0.361004 2584.133888 10236.216890 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/88 4.521386 11683.866783 2584.133888 0.316275 2583.817613 11682.436783 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/89 5.872409 15173.233806 2583.817613 0.243512 2583.574102 15171.803806 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/90 5.118909 13225.080720 2583.574102 0.279356 2583.294745 13223.650720 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/91 7.356310 19003.516966 2583.294745 0.194391 2583.100354 19002.086966 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/92 7.941793 20514.448311 2583.100354 0.180060 2582.920294 20513.018311 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/93 9.362411 24182.361373 2582.920294 0.152738 2582.767556 24180.931373 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 12/31/94 9.244314 23875.914273 2582.767556 0.154690 2582.612866 23874.484273 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/95 12.359885 31920.798023 2582.612866 0.115697 2582.497169 31919.368023 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/96 13.999957 36154.849320 2582.497169 0.102143 2582.395026 36153.419320 13.70%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/92 5.545692 10000.000000 1803.201476 0.000000 1803.201476 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/93 6.033339 10879.325790 1803.201476 0.276795 1802.924681 10877.655790 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/94 6.043748 10896.422433 1802.924681 0.276319 1802.648362 10894.752433 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/95 8.220260 14818.238225 1802.648362 0.203157 1802.445206 14816.568225 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/96 10.000000 18024.452055 1802.445206 0.167000 1802.278206 18022.782055 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 12/31/86 13.850885 10000.000000 721.975527 0.000000 721.975527 10000.000000 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 12/31/87 16.897963 12199.915745 721.975527 0.404783 721.570745 12193.075745 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 12/31/88 19.831828 14310.066898 721.570745 0.344900 721.225845 14303.226898 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 12/31/89 23.711872 17101.614909 721.225845 0.288463 720.937381 17094.774909 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/90 23.215292 16736.771824 720.937381 0.294633 720.642748 16729.931824 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/91 27.891899 20100.094744 720.642748 0.245232 720.397516 20093.254744 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/92 30.179495 21741.233219 720.397516 0.226644 720.170872 21734.393219 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/93 34.512855 24855.152868 720.170872 0.198187 719.972685 24848.312868 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/94 35.495155 25555.542036 719.972685 0.192702 719.779982 25548.702036 13.48%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - 10 YR - Tbl 3
Q=qualified $30 contract # of units
N=nonqualified Beginning # of units fee & deferred at end of Ending
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 FLEXMN Q 12/31/95 42.867835 30855.409515 719.779982 0.159560 719.620422 30848.569515
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/96 49.261868 35449.846241 719.620422 0.138850 719.481572 35443.006241
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 12/31/86 14.028671 10000.000000 712.825898 0.000000 712.825898 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 12/31/87 14.580816 10393.583255 712.825898 0.278448 712.547450 10389.523255
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 12/31/88 16.220777 11558.073283 712.547450 0.250296 712.297153 11554.013283
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 12/31/89 21.029096 14978.965220 712.297153 0.193066 712.104088 14974.905220
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/90 18.451506 13139.392845 712.104088 0.220036 711.884051 13135.332845
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/91 24.552354 17478.429236 711.884051 0.165361 711.718690 17474.369236
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/92 25.692327 18285.709326 711.718690 0.158024 711.560667 18281.649326
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/93 28.528477 20299.742111 711.560667 0.142314 711.418353 20295.682111
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/94 25.886803 18416.346746 711.418353 0.156837 711.261516 18412.286746
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/95 32.329694 22994.867166 711.261516 0.125581 711.135935 22990.807166
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/96 38.234636 27190.023615 711.135935 0.106186 711.029748 27185.963615
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 12/31/86 14.145229 10000.000000 706.952146 0.000000 706.952146 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 12/31/87 14.701955 10393.578641 706.952146 0.276154 706.675992 10389.518641
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 12/31/88 16.355551 11558.075235 706.675992 0.248234 706.427759 11554.015235
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 12/31/89 21.203830 14978.974102 706.427759 0.191475 706.236284 14974.914102
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/90 18.604812 13139.393288 706.236284 0.218223 706.018061 13135.333288
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/91 24.756361 17478.437984 706.018061 0.163998 705.854062 17474.377984
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/92 25.905809 18285.720524 705.854062 0.156722 705.697341 18281.660524
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/93 28.765516 20299.748150 705.697341 0.141141 705.556200 20295.688150
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/94 26.101888 18416.348901 705.556200 0.155544 705.400655 18412.288901
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/95 32.598304 22994.865005 705.400655 0.124546 705.276109 22990.805005
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/96 38.552321 27190.030947 705.276109 0.105311 705.170798 27185.970947
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 12/31/86 13.461238 10000.000000 742.873724 0.000000 742.873724 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 12/31/87 13.169271 9783.105387 742.873724 0.152628 742.721096 9781.095387
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 12/31/88 15.325368 11382.474114 742.721096 0.131155 742.589941 11380.464114
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 12/31/89 15.034710 11164.624407 742.589941 0.133691 742.456250 11162.614407
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/90 13.529719 10045.224433 742.456250 0.148562 742.307688 10043.214433
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/91 18.291494 13577.916625 742.307688 0.109887 742.197801 13575.906625
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/92 20.917682 15525.057583 742.197801 0.096091 742.101710 15523.047583
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/93 24.742238 18361.257131 742.101710 0.081238 742.020472 18359.247131
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/94 22.643778 16802.146851 742.020472 0.088766 741.931706 16800.136851
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/95 26.034837 19316.071041 741.931706 0.077204 741.854502 19314.061041
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 12/31/96 29.275542 21718.192635 741.854502 0.068658 741.785844 21716.182635
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/92 10.175420 10000.000000 982.760417 0.000000 982.760417 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/93 13.880468 13641.174517 982.760417 0.255755 982.504662 13637.624517
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/94 12.843173 12618.477344 982.504662 0.276411 982.228250 12614.927344
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/95 14.435244 14178.704456 982.228250 0.245926 981.982324 14175.154456
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/96 16.658717 16358.565641 981.982324 0.213102 981.769223 16355.015641
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/86 6.726387 10000.000000 1486.682226 0.000000 1486.682226 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/87 6.834911 10161.340702 1486.682226 0.039503 1486.642723 10161.070702
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/88 7.233508 10753.642031 1486.642723 0.037326 1486.605397 10753.372031
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/89 7.913260 11763.895023 1486.605397 0.034120 1486.571277 11763.625023
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/90 8.465525 12584.606310 1486.571277 0.031894 1486.539383 12584.336310
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/91 9.308744 13837.814561 1486.539383 0.029005 1486.510378 13837.544561
- -------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 12/31/92 9.668718 14372.649648 1486.510378 0.027925 1486.482453 14372.379648
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/93 10.181385 15134.450148 1486.482453 0.026519 1486.455934 15134.180148
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/94 10.039372 14923.084081 1486.455934 0.026894 1486.429040 14922.814081
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/95 10.999577 16350.090677 1486.429040 0.024546 1486.404493 16349.820677
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/96 11.329532 16840.267272 1486.404493 0.023832 1486.380662 16839.997272
- -------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/94 5.754056 10000.000000 1737.904532 0.000000 1737.904532 10000.000000
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Average
Annual Total
return for
- --------------------
amethod 10yr
- --------------------
<S> <C>
3 13.48%
- --------------------
3 13.48%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 10.51%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 8.06%
- --------------------
3 0.00%
- --------------------
3 0.00%
- --------------------
3 0.00%
- --------------------
3 0.00%
- --------------------
3 0.00%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 5.35%
- --------------------
3 0.00%
- --------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return for
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value 10yr
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 PARTNR Q 12/31/95 7.785188 13529.913508 1737.904532 0.214510 1737.690022 13528.243508 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/96 10.000000 17376.900221 1737.690022 0.167000 1737.523022 17375.230221 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 12/31/87 9.967727 10000.000000 1003.237749 0.000000 1003.237749 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 12/31/88 10.580357 10614.613542 1003.237749 0.153114 1003.084635 10612.993542 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 12/31/89 11.776055 11812.379834 1003.084635 0.137567 1002.947068 11810.759834 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/90 12.557920 12594.929044 1002.947068 0.129002 1002.818066 12593.309044 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/91 14.336464 14376.865098 1002.818066 0.112999 1002.705067 14375.245098 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/92 15.087944 15128.757902 1002.705067 0.107370 1002.597697 15127.137902 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/93 16.638507 16681.728794 1002.597697 0.097365 1002.500332 16680.108794 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/94 15.562412 15601.323199 1002.500332 0.104097 1002.396235 15599.703199 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/95 18.466059 18510.308020 1002.396235 0.087729 1002.308507 18508.688020 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/96 18.990158 19033.996906 1002.308507 0.085307 1002.223199 19032.376906 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/95 11.171709 10000.000000 895.118195 0.000000 895.118195 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/96 13.211266 11825.644581 895.118195 0.031791 895.086404 11825.224581 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/87 6.304108 10000.000000 1586.267240 0.000000 1586.267240 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/88 6.081994 9647.667838 1586.267240 0.341993 1585.925247 9645.587838 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/89 7.736741 12269.892883 1585.925247 0.268847 1585.656400 12267.812883 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/90 7.542668 11960.079789 1585.656400 0.275764 1585.380636 11957.999789 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/91 10.568393 16754.925613 1585.380636 0.196813 1585.183822 16752.845613 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 12/31/92 10.296825 16322.360412 1585.183822 0.202004 1584.981818 16320.280412 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/93 11.124183 17631.627800 1584.981818 0.186980 1584.794838 17629.547800 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/94 10.857486 17206.887771 1584.794838 0.191573 1584.603265 17204.807771 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/95 14.058113 22276.531767 1584.603265 0.147957 1584.455308 22274.451767 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/96 13.282214 21045.074477 1584.455308 0.156600 1584.298708 21042.994477 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 12/31/87 9.225971 10000.000000 1083.896752 0.000000 1083.896752 10000.000000 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 12/31/88 11.801629 12791.747340 1083.896752 0.369441 1083.527311 12787.387340 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 12/31/89 13.157143 14256.123780 1083.527311 0.331379 1083.195932 14251.763780 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/90 11.939049 12932.329314 1083.195932 0.365188 1082.830744 12927.969314 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/91 15.057650 16304.886356 1082.830744 0.289554 1082.541190 16300.526356 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/92 17.080465 18490.306914 1082.541190 0.255262 1082.285928 18485.946914 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/93 18.062234 19548.501687 1082.285928 0.241388 1082.044540 19544.141687 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/94 18.360853 19867.260746 1082.044540 0.237462 1081.807079 19862.900746 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/95 24.930081 26969.538098 1081.807079 0.174889 1081.632190 26965.178098 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/96 30.819233 33335.074470 1081.632190 0.141470 1081.490719 33330.714470 0.00%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a div2 BALFND q 2/28/89 6.791578 1000.000000 147.241186 0.000000 147.241186 1000.000000 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 2/28/90 7.572278 1114.951194 147.241186 0.137343 147.103843 1113.911194 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 2/28/91 8.499080 1250.247330 147.103843 0.122366 146.981477 1249.207330 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 2/28/92 9.751932 1433.353367 146.981477 0.106646 146.874831 1432.313367 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 BALFND q 2/28/93 10.022615 1472.069887 146.874831 0.103765 146.771066 1471.029887 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 2/28/94 10.787779 1583.333823 146.771066 0.096405 146.674661 1582.293823 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 2/28/95 10.674849 1565.729853 146.674661 0.097425 146.577235 1564.689853 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 2/28/96 12.804422 1876.836776 146.577235 0.081222 146.496013 1875.796776 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 12/31/96 13.181800 1931.081149 146.496013 0.078897 146.417117 1930.041149 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 BALFND Q 2/28/97 13.816279 2022.939734 146.417117 0.075274 146.341843 2021.899734 8.74%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/89 6.153672 1000.000000 162.504599 0.000000 162.504599 1000.000000 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/90 6.151043 999.572775 162.504599 0.039018 162.465581 999.332775 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/91 7.592009 1233.440154 162.465581 0.031612 162.433969 1233.200154 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/92 8.409222 1365.943305 162.433969 0.028540 162.405429 1365.703305 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/93 9.747655 1583.072090 162.405429 0.024621 162.380808 1582.832090 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDASM q 9/6/94 10.087746 1638.056342 162.380808 0.023791 162.357016 1637.816342 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 9/6/95 10.750516 1745.421701 162.357016 0.022325 162.334692 1745.181701 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 9/6/96 11.579895 1879.818686 162.334692 0.020726 162.313966 1879.578686 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDASM Q 12/31/96 12.622550 2048.816154 162.313966 0.019014 162.294953 2048.576154 10.29%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/86 4.238521 1000.000000 235.931354 0.000000 235.931354 1000.000000 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/87 5.019478 1184.252243 235.931354 0.213170 235.718185 1183.182243 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/88 5.047448 1189.775280 235.718185 0.211988 235.506196 1188.705280 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/89 6.178431 1455.058785 235.506196 0.173183 235.333013 1453.988785 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/90 4.543676 1069.276965 235.333013 0.235492 235.097521 1068.206965 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/91 5.881881 1382.815643 235.097521 0.181915 234.915607 1381.745643 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/92 6.591041 1548.338395 234.915607 0.162342 234.753265 1547.268395 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDEQI q 10/9/93 8.467128 1987.685943 234.753265 0.126371 234.626894 1986.615943 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 10/9/95 11.145047 2614.927761 234.626894 0.096007 234.530887 2613.857761 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 10/9/96 12.785988 2998.709109 234.530887 0.083685 234.447202 2997.639109 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDEQI Q 12/31/96 13.453420 3154.116674 234.447202 0.079534 234.367668 3153.046674 11.87%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/86 3.868619 1000.000000 258.490174 0.000000 258.490174 1000.000000 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/87 4.875669 1260.312530 258.490174 0.293293 258.196881 1258.882530 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/88 4.588422 1184.716251 258.196881 0.311654 257.885227 1183.286251 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/89 6.036553 1556.737843 257.885227 0.236890 257.648337 1555.307843 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/90 4.755716 1225.302319 257.648337 0.300691 257.347646 1223.872319 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/91 6.488444 1669.785792 257.347646 0.220392 257.127255 1668.355792 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/92 6.847898 1760.781212 257.127255 0.208823 256.918431 1759.351212 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FIDGRO q 10/9/93 9.336172 2398.634665 256.918431 0.153168 256.765264 2397.204665 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 10/9/95 12.054638 3095.212304 256.765264 0.118627 256.646637 3093.782304 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 10/9/96 13.936113 3576.656536 256.646637 0.102611 256.544026 3575.226536 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDGRO Q 12/31/96 13.999957 3591.605333 256.544026 0.102143 256.441883 3590.175333 13.30%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 8/27/92 5.232243 1000.000000 191.122622 0.000000 191.122622 1000.000000 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 8/27/93 5.924805 1132.364265 191.122622 0.281866 190.840756 1130.694265 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 8/27/94 6.195486 1182.351232 190.840756 0.269551 190.571205 1180.681232 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 8/27/95 7.447623 1419.302489 190.571205 0.224233 190.346972 1417.632489 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 8/27/96 8.969939 1707.400730 190.346972 0.186177 190.160795 1705.730730 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FIDIND Q 12/31/96 10.000000 1901.607949 190.160795 5.301341 184.859453 1848.594534 15.18%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 7/31/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 7/31/85 11.456214 1145.621400 100.000000 0.597056 99.402944 1138.781400 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 7/31/86 13.905894 1382.286804 99.402944 0.491878 98.911066 1375.446804 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 7/31/87 17.320528 1713.191894 98.911066 0.394907 98.516159 1706.351894 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1a div2 FLEXMN q 7/31/88 19.010671 1872.858291 98.516159 0.359798 98.156361 1866.018291 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 FLEXMN Q 7/31/89 23.634078 2319.835099 98.156361 0.289413 97.866949 2312.995099 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/90 23.917918 2340.773654 97.866949 0.285978 97.580971 2333.933654 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/91 26.982387 2632.967513 97.580971 0.253499 97.327472 2626.127513 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/92 29.524429 2873.538035 97.327472 0.231673 97.095799 2866.698035 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/93 32.307338 3136.906809 97.095799 0.211717 96.884083 3130.066809 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/94 34.745700 3366.305274 96.884083 0.196859 96.687224 3359.465274 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/95 40.713405 3936.466104 96.687224 0.168004 96.519220 3929.626104 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 7/31/96 44.656630 4310.223106 96.519220 0.153169 96.366051 4303.383106 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 FLEXMN Q 12/31/96 49.261868 4747.171708 96.366051 0.138850 96.227202 4740.331708 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/84 9.197711 919.771100 100.000000 0.441414 99.558586 915.711100 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/85 11.236685 1118.708468 99.558586 0.361317 99.197269 1114.648468 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/86 14.477963 1436.174395 99.197269 0.280426 98.916843 1432.114395 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/87 16.408210 1623.048334 98.916843 0.247437 98.669406 1618.988334 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWeq n 6/1/88 15.804408 1559.411550 98.669406 0.256890 98.412516 1555.351550 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/89 19.056625 1875.410406 98.412516 0.213049 98.199466 1871.350406 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/90 21.657087 2126.714387 98.199466 0.187468 98.011999 2122.654387 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/91 22.173661 2173.284837 98.011999 0.183100 97.828899 2169.224837 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/92 24.003105 2348.197329 97.828899 0.169145 97.659754 2344.137329 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/93 26.278724 2566.373721 97.659754 0.154498 97.505256 2562.313721 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/94 25.928673 2528.181908 97.505256 0.156583 97.348673 2524.121908 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/95 28.144778 2739.856789 97.348673 0.144254 97.204419 2735.796789 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 6/1/96 35.760410 3476.069872 97.204419 0.113533 97.090885 3472.009872 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ N 12/31/96 38.234636 3712.234665 97.090885 0.106186 96.984699 3708.174665 10.12%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/84 10.206904 1020.690400 100.000000 0.397770 99.602230 1016.630400 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/85 11.434085 1138.860364 99.602230 0.355079 99.247151 1134.800364 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/86 14.161105 1405.449331 99.247151 0.286701 98.960451 1401.389331 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/87 18.762647 1856.760000 98.960451 0.216387 98.744063 1852.700000 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/88 15.404132 1521.066583 98.744063 0.263566 98.480498 1517.006583 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/89 20.657475 2034.358415 98.480498 0.196539 98.283958 2030.298415 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 GROWEQ q 8/11/90 19.674516 1933.689314 98.283958 0.206358 98.077600 1929.629314 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/91 22.338239 2190.880873 98.077600 0.181751 97.895849 2186.820873 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/92 24.075117 2356.854020 97.895849 0.168639 97.727210 2352.794020 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/93 27.266028 2664.632850 97.727210 0.148903 97.578307 2660.572850 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/94 25.356130 2474.208236 97.578307 0.160119 97.418188 2470.148236 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/95 30.687797 2989.549574 97.418188 0.132300 97.285888 2985.489574 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 8/11/96 34.821598 3387.650074 97.285888 0.116594 97.169293 3383.590074 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 GROWEQ Q 12/31/96 38.552321 3746.101792 97.169293 0.105311 97.063982 3742.041792 10.35%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/85 11.589649 1158.964900 100.000000 0.173431 99.826569 1156.954900 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/86 12.927177 1290.475732 99.826569 0.155486 99.671083 1288.465732 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/87 13.657141 1361.222034 99.671083 0.147176 99.523907 1359.212034 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/88 14.725803 1465.569452 99.523907 0.136495 99.387412 1463.559452 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 HIBOND q 8/6/89 16.193955 1609.475280 99.387412 0.124120 99.263292 1607.465280 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/90 15.419268 1530.567298 99.263292 0.130356 99.132935 1528.557298 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/91 16.997000 1684.962502 99.132935 0.118256 99.014679 1682.952502 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/92 20.228463 2002.914775 99.014679 0.099365 98.915314 2000.904775 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/93 23.456695 2320.226358 98.915314 0.085690 98.829624 2318.216358 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/94 23.555269 2327.958389 98.829624 0.085331 98.744293 2325.948389 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/95 25.023029 2470.881313 98.744293 0.080326 98.663967 2468.871313 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 HIBOND Q 8/6/96 27.461148 2709.425806 98.663967 0.073194 98.590773 2707.415806 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 HIBOND Q 12/31/96 29.275542 2886.298313 98.590773 0.068658 98.522115 2884.288313 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 INTLEQ q 11/1/92 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 11/1/93 13.025039 1302.503900 100.000000 0.272552 99.727448 1298.953900 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 11/1/94 13.785501 1374.792835 99.727448 0.257517 99.469931 1371.242835 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 11/1/95 13.667136 1359.469076 99.469931 0.259747 99.210184 1355.919076 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 11/1/96 15.823754 1569.877545 99.210184 0.224346 98.985838 1566.327545 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 INTLEQ Q 12/31/96 16.658717 1648.977057 98.985838 2.885719 96.100118 1600.904676 11.95%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/84 4.949210 1000.000000 202.052449 0.000000 202.052449 1000.000000 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/85 5.745058 1160.803037 202.052449 0.046997 202.005452 1160.533037 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/86 6.613416 1335.946087 202.005452 0.040826 201.964626 1335.676087 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/87 6.829992 1379.416778 201.964626 0.039532 201.925094 1379.146778 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/88 7.166669 1447.130313 201.925094 0.037674 201.887420 1446.860313 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/89 7.714368 1557.433851 201.887420 0.035000 201.852420 1557.163851 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/90 8.217273 1658.676442 201.852420 0.032858 201.819563 1658.406442 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/91 8.900763 1796.348095 201.819563 0.030334 201.789228 1796.078095 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 LIMMAT q 9/10/92 9.705874 1958.540823 201.789228 0.027818 201.761410 1958.270823 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 9/10/93 10.206569 2059.291752 201.761410 0.026454 201.734956 2059.021752 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 9/10/94 10.070420 2031.555739 201.734956 0.026811 201.708145 2031.285739 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 9/10/95 10.696546 2157.580453 201.708145 0.025242 201.682903 2157.310453 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 9/10/96 11.024991 2223.552194 201.682903 0.024490 201.658414 2223.282194 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 LIMMAT Q 12/31/96 11.329532 2284.695449 201.658414 0.023832 201.634582 2284.425449 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 3/22/94 5.929173 1000.000000 168.657585 0.000000 168.657585 1000.000000 18.53%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 3/22/95 6.137345 1035.109787 168.657585 0.272105 168.385480 1033.439787 18.53%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 3/22/96 8.436252 1420.542347 168.385480 0.197955 168.187525 1418.872347 18.53%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 PARTNR Q 12/31/96 10.000000 1681.875253 168.187525 7.735439 160.452087 1604.520867 18.53%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 3/17/87 10.014650 1000.000000 99.853714 0.000000 99.853714 1000.000000 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 3/17/88 10.319857 1030.476053 99.853714 0.156979 99.696735 1028.856053 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/89 10.562833 1053.079967 99.696735 0.153368 99.543367 1051.459967 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 3/17/90 11.634482 1158.135517 99.543367 0.139241 99.404126 1156.515517 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 QUALBD q 3/17/91 12.757872 1268.185118 99.404126 0.126980 99.277146 1266.565118 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/92 13.917758 1381.715290 99.277146 0.116398 99.160748 1380.095290 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/93 15.783929 1565.146201 99.160748 0.102636 99.058112 1563.526201 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/94 16.204383 1605.175580 99.058112 0.099973 98.958139 1603.555580 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/95 16.500701 1632.878658 98.958139 0.098178 98.859961 1631.258658 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 3/17/96 18.128405 1792.173412 98.859961 0.089363 98.770599 1790.553412 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 QUALBD Q 12/31/96 18.990158 1875.669272 98.770599 0.085307 98.685291 1874.049272 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 SMLCAP q 3/1/95 10.010905 1000.000000 99.891069 0.000000 99.891069 1000.000000 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 3/1/96 11.585005 1157.238531 99.891069 0.036254 99.854815 1156.818531 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 SMLCAP Q 12/31/96 13.211266 1319.208523 99.854815 5.423951 94.430864 1247.551262 12.79%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/87 5.888807 1000.000000 169.813682 0.000000 169.813682 1000.000000 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/88 5.810044 986.624965 169.813682 0.358001 169.455681 984.544965 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/89 7.698169 1304.498473 169.455681 0.270194 169.185487 1302.418473 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/90 6.964679 1178.322610 169.185487 0.298650 168.886837 1176.242610 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/91 9.346041 1578.423307 168.886837 0.222554 168.664283 1576.343307 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 TCIGRO q 11/20/92 10.053957 1695.743452 168.664283 0.206884 168.457400 1693.663452 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 11/20/93 10.849833 1827.734654 168.457400 0.191708 168.265692 1825.654654 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 11/20/94 10.931772 1839.442176 168.265692 0.190271 168.075421 1837.362176 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 11/20/95 13.831774 2324.781232 168.075421 0.150378 167.925042 2322.701232 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 11/20/96 13.573655 2279.356588 167.925042 0.153238 167.771804 2277.276588 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 TCIGRO Q 12/31/96 13.282214 2228.381005 167.771804 0.156600 167.615204 2226.301005 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 3/17/87 10.134586 1000.000000 98.672013 0.000000 98.672013 1000.000000 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 3/17/88 10.617116 1047.612206 98.672013 0.410658 98.261355 1043.252206 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1A - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 1A
(assuming no purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1a DIV2 VALUEQ Q 3/17/89 12.355591 1214.077116 98.261355 0.352877 97.908479 1209.717116 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 3/17/90 12.933143 1266.264353 97.908479 0.337118 97.571360 1261.904353 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a div2 VALUEQ q 3/17/91 13.643553 1331.220023 97.571360 0.319565 97.251795 1326.860023 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 3/17/92 15.775871 1534.231777 97.251795 0.276371 96.975424 1529.871777 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 3/17/93 17.218502 1669.771530 96.975424 0.253216 96.722208 1665.411530 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 3/17/94 18.356274 1775.459350 96.722208 0.237521 96.484687 1771.099350 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 3/17/95 19.989840 1928.713454 96.484687 0.218111 96.266576 1924.353454 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 3/17/96 26.451059 2546.352884 96.266576 0.164833 96.101743 2541.992884 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
1a DIV2 VALUEQ Q 12/31/96 30.819233 2961.782021 96.101743 0.141470 95.960273 2957.422021 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts DIVERSIFIER II - INCEPTION - 1B
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b div2 BALFND q 2/28/89 6.791578 1000.000000 147.241186 0.000000 147.241186 1000.000000 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 2/28/90 7.572278 1114.951194 147.241186 0.137343 147.103843 1113.911194 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 2/28/91 8.499080 1250.247330 147.103843 0.122366 146.981477 1249.207330 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 2/28/92 9.751932 1433.353367 146.981477 0.106646 146.874831 1432.313367 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 BALFND q 2/28/93 10.022615 1472.069887 146.874831 0.103765 146.771066 1471.029887 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 2/28/94 10.787779 1583.333823 146.771066 0.096405 146.674661 1582.293823 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 2/28/95 10.674849 1565.729853 146.674661 0.097425 146.577235 1564.689853 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 2/28/96 12.804422 1876.836776 146.577235 0.081222 146.496013 1875.796776 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 12/31/96 13.181800 1931.081149 146.496013 2.715825 143.780188 1895.281688 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 BALFND Q 2/28/97 13.816279 1986.507198 143.780188 0.075274 143.704915 1985.467198 8.49%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/89 6.153672 1000.000000 162.504599 0.000000 162.504599 1000.000000 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/90 6.151043 999.572775 162.504599 0.039018 162.465581 999.332775 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/91 7.592009 1233.440154 162.465581 0.031612 162.433969 1233.200154 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/92 8.409222 1365.943305 162.433969 0.028540 162.405429 1365.703305 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/93 9.747655 1583.072090 162.405429 0.024621 162.380808 1582.832090 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDASM q 9/6/94 10.087746 1638.056342 162.380808 0.023791 162.357016 1637.816342 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 9/6/95 10.750516 1745.421701 162.357016 0.022325 162.334692 1745.181701 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 9/6/96 11.579895 1879.818686 162.334692 0.020726 162.313966 1879.578686 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDASM Q 12/31/96 12.622550 2048.816154 162.313966 2.940665 159.373301 2011.697463 10.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/86 4.238521 1000.000000 235.931354 0.000000 235.931354 1000.000000 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/87 5.019478 1184.252243 235.931354 0.213170 235.718185 1183.182243 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/88 5.047448 1189.775280 235.718185 0.211988 235.506196 1188.705280 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/89 6.178431 1455.058785 235.506196 0.173183 235.333013 1453.988785 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/90 4.543676 1069.276965 235.333013 0.235492 235.097521 1068.206965 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/91 5.881881 1382.815643 235.097521 0.181915 234.915607 1381.745643 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/92 6.591041 1548.338395 234.915607 0.162342 234.753265 1547.268395 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDEQI q 10/9/93 8.467128 1987.685943 234.753265 0.126371 234.626894 1986.615943 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 10/9/95 11.145047 2614.927761 234.626894 0.096007 234.530887 2613.857761 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 10/9/96 12.785988 2998.709109 234.530887 0.083685 234.447202 2997.639109 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDEQI Q 12/31/96 13.453420 3154.116674 234.447202 0.079534 234.367668 3153.046674 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/86 3.868619 1000.000000 258.490174 0.000000 258.490174 1000.000000 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/87 4.875669 1260.312530 258.490174 0.293293 258.196881 1258.882530 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/88 4.588422 1184.716251 258.196881 0.311654 257.885227 1183.286251 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/89 6.036553 1556.737843 257.885227 0.236890 257.648337 1555.307843 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/90 4.755716 1225.302319 257.648337 0.300691 257.347646 1223.872319 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/91 6.488444 1669.785792 257.347646 0.220392 257.127255 1668.355792 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/92 6.847898 1760.781212 257.127255 0.208823 256.918431 1759.351212 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FIDGRO q 10/9/93 9.336172 2398.634665 256.918431 0.153168 256.765264 2397.204665 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 10/9/95 12.054638 3095.212304 256.765264 0.118627 256.646637 3093.782304 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 10/9/96 13.936113 3576.656536 256.646637 0.102611 256.544026 3575.226536 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDGRO Q 12/31/96 13.999957 3591.605333 256.544026 0.102143 256.441883 3590.175333 13.30%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 8/27/92 5.232243 1000.000000 191.122622 0.000000 191.122622 1000.000000 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 8/27/93 5.924805 1132.364265 191.122622 0.281866 190.840756 1130.694265 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 8/27/94 6.195486 1182.351232 190.840756 0.269551 190.571205 1180.681232 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 8/27/95 7.447623 1419.302489 190.571205 0.224233 190.346972 1417.632489 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 8/27/96 8.969939 1707.400730 190.346972 0.186177 190.160795 1705.730730 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FIDIND Q 12/31/96 10.000000 1901.607949 190.160795 6.157065 184.003730 1840.037298 15.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 7/31/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 7/31/85 11.456214 1145.621400 100.000000 0.597056 99.402944 1138.781400 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 7/31/86 13.905894 1382.286804 99.402944 0.491878 98.911066 1375.446804 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 7/31/87 17.320528 1713.191894 98.911066 0.394907 98.516159 1706.351894 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
1b div2 FLEXMN q 7/31/88 19.010671 1872.858291 98.516159 0.359798 98.156361 1866.018291 13.34%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 FLEXMN Q 7/31/89 23.634078 2319.835099 98.156361 0.289413 97.866949 2312.995099 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/90 23.917918 2340.773654 97.866949 0.285978 97.580971 2333.933654 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/91 26.982387 2632.967513 97.580971 0.253499 97.327472 2626.127513 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/92 29.524429 2873.538035 97.327472 0.231673 97.095799 2866.698035 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/93 32.307338 3136.906809 97.095799 0.211717 96.884083 3130.066809 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/94 34.745700 3366.305274 96.884083 0.196859 96.687224 3359.465274 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/95 40.713405 3936.466104 96.687224 0.168004 96.519220 3929.626104 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 7/31/96 44.656630 4310.223106 96.519220 0.153169 96.366051 4303.383106 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 FLEXMN Q 12/31/96 49.261868 4747.171708 96.366051 0.138850 96.227202 4740.331708 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/84 9.197711 919.771100 100.000000 0.441414 99.558586 915.711100 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/85 11.236685 1118.708468 99.558586 0.361317 99.197269 1114.648468 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/86 14.477963 1436.174395 99.197269 0.280426 98.916843 1432.114395 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/87 16.408210 1623.048334 98.916843 0.247437 98.669406 1618.988334 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWeq n 6/1/88 15.804408 1559.411550 98.669406 0.256890 98.412516 1555.351550 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/89 19.056625 1875.410406 98.412516 0.213049 98.199466 1871.350406 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/90 21.657087 2126.714387 98.199466 0.187468 98.011999 2122.654387 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/91 22.173661 2173.284837 98.011999 0.183100 97.828899 2169.224837 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/92 24.003105 2348.197329 97.828899 0.169145 97.659754 2344.137329 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/93 26.278724 2566.373721 97.659754 0.154498 97.505256 2562.313721 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/94 25.928673 2528.181908 97.505256 0.156583 97.348673 2524.121908 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/95 28.144778 2739.856789 97.348673 0.144254 97.204419 2735.796789 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 6/1/96 35.760410 3476.069872 97.204419 0.113533 97.090885 3472.009872 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ N 12/31/96 38.234636 3712.234665 97.090885 0.106186 96.984699 3708.174665 10.12%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/84 10.206904 1020.690400 100.000000 0.397770 99.602230 1016.630400 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/85 11.434085 1138.860364 99.602230 0.355079 99.247151 1134.800364 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/86 14.161105 1405.449331 99.247151 0.286701 98.960451 1401.389331 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/87 18.762647 1856.760000 98.960451 0.216387 98.744063 1852.700000 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/88 15.404132 1521.066583 98.744063 0.263566 98.480498 1517.006583 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/89 20.657475 2034.358415 98.480498 0.196539 98.283958 2030.298415 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 GROWEQ q 8/11/90 19.674516 1933.689314 98.283958 0.206358 98.077600 1929.629314 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/91 22.338239 2190.880873 98.077600 0.181751 97.895849 2186.820873 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/92 24.075117 2356.854020 97.895849 0.168639 97.727210 2352.794020 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/93 27.266028 2664.632850 97.727210 0.148903 97.578307 2660.572850 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/94 25.356130 2474.208236 97.578307 0.160119 97.418188 2470.148236 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/95 30.687797 2989.549574 97.418188 0.132300 97.285888 2985.489574 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 8/11/96 34.821598 3387.650074 97.285888 0.116594 97.169293 3383.590074 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 GROWEQ Q 12/31/96 38.552321 3746.101792 97.169293 0.105311 97.063982 3742.041792 10.35%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/85 11.589649 1158.964900 100.000000 0.173431 99.826569 1156.954900 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/86 12.927177 1290.475732 99.826569 0.155486 99.671083 1288.465732 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/87 13.657141 1361.222034 99.671083 0.147176 99.523907 1359.212034 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/88 14.725803 1465.569452 99.523907 0.136495 99.387412 1463.559452 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b div2 HIBOND q 8/6/89 16.193955 1609.475280 99.387412 0.124120 99.263292 1607.465280 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/90 15.419268 1530.567298 99.263292 0.130356 99.132935 1528.557298 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/91 16.997000 1684.962502 99.132935 0.118256 99.014679 1682.952502 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/92 20.228463 2002.914775 99.014679 0.099365 98.915314 2000.904775 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/93 23.456695 2320.226358 98.915314 0.085690 98.829624 2318.216358 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/94 23.555269 2327.958389 98.829624 0.085331 98.744293 2325.948389 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/95 25.023029 2470.881313 98.744293 0.080326 98.663967 2468.871313 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 HIBOND Q 8/6/96 27.461148 2709.425806 98.663967 0.073194 98.590773 2707.415806 8.91%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 1B
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 HIBOND Q 12/31/96 29.275542 2886.298313 98.590773 0.068658 98.522115 2884.288313 8.91%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 INTLEQ q 11/1/92 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 11/1/93 13.025039 1302.503900 100.000000 0.272552 99.727448 1298.953900 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 11/1/94 13.785501 1374.792835 99.727448 0.257517 99.469931 1371.242835 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 11/1/95 13.667136 1359.469076 99.469931 0.259747 99.210184 1355.919076 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 11/1/96 15.823754 1569.877545 99.210184 0.224346 98.985838 1566.327545 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 INTLEQ Q 12/31/96 16.658717 1648.977057 98.985838 3.331156 95.654682 1593.484279 11.83%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/84 4.949210 1000.000000 202.052449 0.000000 202.052449 1000.000000 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/85 5.745058 1160.803037 202.052449 0.046997 202.005452 1160.533037 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/86 6.613416 1335.946087 202.005452 0.040826 201.964626 1335.676087 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/87 6.829992 1379.416778 201.964626 0.039532 201.925094 1379.146778 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/88 7.166669 1447.130313 201.925094 0.037674 201.887420 1446.860313 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/89 7.714368 1557.433851 201.887420 0.035000 201.852420 1557.163851 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/90 8.217273 1658.676442 201.852420 0.032858 201.819563 1658.406442 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/91 8.900763 1796.348095 201.819563 0.030334 201.789228 1796.078095 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 LIMMAT q 9/10/92 9.705874 1958.540823 201.789228 0.027818 201.761410 1958.270823 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 9/10/93 10.206569 2059.291752 201.761410 0.026454 201.734956 2059.021752 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 9/10/94 10.070420 2031.555739 201.734956 0.026811 201.708145 2031.285739 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 9/10/95 10.696546 2157.580453 201.708145 0.025242 201.682903 2157.310453 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 9/10/96 11.024991 2223.552194 201.682903 0.024490 201.658414 2223.282194 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 LIMMAT Q 12/31/96 11.329532 2284.695449 201.658414 0.023832 201.634582 2284.425449 6.94%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 3/22/94 5.929173 1000.000000 168.657585 0.000000 168.657585 1000.000000 18.53%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 3/22/95 6.137345 1035.109787 168.657585 0.272105 168.385480 1033.439787 18.53%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 3/22/96 8.436252 1420.542347 168.385480 0.197955 168.187525 1418.872347 18.53%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 PARTNR Q 12/31/96 10.000000 1681.875253 168.187525 7.735439 160.452087 1604.520867 18.53%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 3/17/87 10.014650 1000.000000 99.853714 0.000000 99.853714 1000.000000 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 3/17/88 10.319857 1030.476053 99.853714 0.156979 99.696735 1028.856053 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/89 10.562833 1053.079967 99.696735 0.153368 99.543367 1051.459967 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 3/17/90 11.634482 1158.135517 99.543367 0.139241 99.404126 1156.515517 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 QUALBD q 3/17/91 12.757872 1268.185118 99.404126 0.126980 99.277146 1266.565118 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/92 13.917758 1381.715290 99.277146 0.116398 99.160748 1380.095290 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/93 15.783929 1565.146201 99.160748 0.102636 99.058112 1563.526201 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/94 16.204383 1605.175580 99.058112 0.099973 98.958139 1603.555580 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/95 16.500701 1632.878658 98.958139 0.098178 98.859961 1631.258658 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 3/17/96 18.128405 1792.173412 98.859961 0.089363 98.770599 1790.553412 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 QUALBD Q 12/31/96 18.990158 1875.669272 98.770599 0.974243 97.796356 1857.168248 6.52%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 SMLCAP q 3/1/95 10.010905 1000.000000 99.891069 0.000000 99.891069 1000.000000 12.79%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 3/1/96 11.585005 1157.238531 99.891069 0.036254 99.854815 1156.818531 12.79%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 SMLCAP Q 12/31/96 13.211266 1319.208523 99.854815 5.423951 94.430864 1247.551262 12.79%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/87 5.888807 1000.000000 169.813682 0.000000 169.813682 1000.000000 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/88 5.810044 986.624965 169.813682 0.358001 169.455681 984.544965 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/89 7.698169 1304.498473 169.455681 0.270194 169.185487 1302.418473 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/90 6.964679 1178.322610 169.185487 0.298650 168.886837 1176.242610 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/91 9.346041 1578.423307 168.886837 0.222554 168.664283 1576.343307 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 TCIGRO q 11/20/92 10.053957 1695.743452 168.664283 0.206884 168.457400 1693.663452 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 11/20/93 10.849833 1827.734654 168.457400 0.191708 168.265692 1825.654654 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 11/20/94 10.931772 1839.442176 168.265692 0.190271 168.075421 1837.362176 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 11/20/95 13.831774 2324.781232 168.075421 0.150378 167.925042 2322.701232 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 11/20/96 13.573655 2279.356588 167.925042 0.153238 167.771804 2277.276588 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b DIV2 TCIGRO Q 12/31/96 13.282214 2228.381005 167.771804 1.666547 166.105257 2206.245576 9.06%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 3/17/87 10.134586 1000.000000 98.672013 0.000000 98.672013 1000.000000 11.60%
- ----------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 3/17/88 10.617116 1047.612206 98.672013 0.410658 98.261355 1043.252206 11.60%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1B - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 1B
(assuming purchase payments made after first contract year)
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1b DIV2 VALUEQ Q 3/17/89 12.355591 1214.077116 98.261355 0.352877 97.908479 1209.717116 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 3/17/90 12.933143 1266.264353 97.908479 0.337118 97.571360 1261.904353 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b div2 VALUEQ q 3/17/91 13.643553 1331.220023 97.571360 0.319565 97.251795 1326.860023 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 3/17/92 15.775871 1534.231777 97.251795 0.276371 96.975424 1529.871777 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 3/17/93 17.218502 1669.771530 96.975424 0.253216 96.722208 1665.411530 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 3/17/94 18.356274 1775.459350 96.722208 0.237521 96.484687 1771.099350 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 3/17/95 19.989840 1928.713454 96.484687 0.218111 96.266576 1924.353454 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 3/17/96 26.451059 2546.352884 96.266576 0.164833 96.101743 2541.992884 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
1b DIV2 VALUEQ Q 12/31/96 30.819233 2961.782021 96.101743 1.006386 95.095358 2930.765983 11.60%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - Inception - 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c div2 BALFND q 2/28/89 6.791578 1000.000000 147.241186 0.000000 147.241186 1000.000000 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 2/28/90 7.572278 1114.951194 147.241186 0.137343 147.103843 1113.911194 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 2/28/91 8.499080 1250.247330 147.103843 0.122366 146.981477 1249.207330 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 2/28/92 9.751932 1433.353367 146.981477 0.106646 146.874831 1432.313367 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 BALFND q 2/28/93 10.022615 1472.069887 146.874831 0.103765 146.771066 1471.029887 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 2/28/94 10.787779 1583.333823 146.771066 0.096405 146.674661 1582.293823 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 2/28/95 10.674849 1565.729853 146.674661 0.097425 146.577235 1564.689853 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 2/28/96 12.804422 1876.836776 146.577235 0.081222 146.496013 1875.796776 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 12/31/96 13.181800 1931.081149 146.496013 3.872005 142.624008 1880.041149 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 BALFND Q 2/28/97 13.816279 1970.533087 142.624008 0.075274 142.548734 1969.493087 8.38%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/89 6.153672 1000.000000 162.504599 0.000000 162.504599 1000.000000 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/90 6.151043 999.572775 162.504599 0.039018 162.465581 999.332775 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/91 7.592009 1233.440154 162.465581 0.031612 162.433969 1233.200154 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/92 8.409222 1365.943305 162.433969 0.028540 162.405429 1365.703305 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/93 9.747655 1583.072090 162.405429 0.024621 162.380808 1582.832090 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDASM q 9/6/94 10.087746 1638.056342 162.380808 0.023791 162.357016 1637.816342 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 9/6/95 10.750516 1745.421701 162.357016 0.022325 162.334692 1745.181701 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 9/6/96 11.579895 1879.818686 162.334692 0.020726 162.313966 1879.578686 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDASM Q 12/31/96 12.622550 2048.816154 162.313966 3.980178 158.333788 1998.576154 9.92%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/86 4.238521 1000.000000 235.931354 0.000000 235.931354 1000.000000 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/87 5.019478 1184.252243 235.931354 0.213170 235.718185 1183.182243 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/88 5.047448 1189.775280 235.718185 0.211988 235.506196 1188.705280 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/89 6.178431 1455.058785 235.506196 0.173183 235.333013 1453.988785 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/90 4.543676 1069.276965 235.333013 0.235492 235.097521 1068.206965 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/91 5.881881 1382.815643 235.097521 0.181915 234.915607 1381.745643 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/92 6.591041 1548.338395 234.915607 0.162342 234.753265 1547.268395 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDEQI q 10/9/93 8.467128 1987.685943 234.753265 0.126371 234.626894 1986.615943 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 10/9/95 11.145047 2614.927761 234.626894 0.096007 234.530887 2613.857761 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 10/9/96 12.785988 2998.709109 234.530887 0.083685 234.447202 2997.639109 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDEQI Q 12/31/96 13.453420 3154.116674 234.447202 0.079534 234.367668 3153.046674 11.87%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/86 3.868619 1000.000000 258.490174 0.000000 258.490174 1000.000000 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/87 4.875669 1260.312530 258.490174 0.293293 258.196881 1258.882530 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/88 4.588422 1184.716251 258.196881 0.311654 257.885227 1183.286251 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/89 6.036553 1556.737843 257.885227 0.236890 257.648337 1555.307843 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/90 4.755716 1225.302319 257.648337 0.300691 257.347646 1223.872319 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/91 6.488444 1669.785792 257.347646 0.220392 257.127255 1668.355792 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/92 6.847898 1760.781212 257.127255 0.208823 256.918431 1759.351212 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FIDGRO q 10/9/93 9.336172 2398.634665 256.918431 0.153168 256.765264 2397.204665 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 10/9/95 12.054638 3095.212304 256.765264 0.118627 256.646637 3093.782304 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 10/9/96 13.936113 3576.656536 256.646637 0.102611 256.544026 3575.226536 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDGRO Q 12/31/96 13.999957 3591.605333 256.544026 0.102143 256.441883 3590.175333 13.30%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 8/27/92 5.232243 1000.000000 191.122622 0.000000 191.122622 1000.000000 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 8/27/93 5.924805 1132.364265 191.122622 0.281866 190.840756 1130.694265 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 8/27/94 6.195486 1182.351232 190.840756 0.269551 190.571205 1180.681232 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 8/27/95 7.447623 1419.302489 190.571205 0.224233 190.346972 1417.632489 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 8/27/96 8.969939 1707.400730 190.346972 0.186177 190.160795 1705.730730 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FIDIND Q 12/31/96 10.000000 1901.607949 190.160795 5.167000 184.993795 1849.937949 15.20%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 7/31/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 7/31/85 11.456214 1145.621400 100.000000 0.597056 99.402944 1138.781400 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 7/31/86 13.905894 1382.286804 99.402944 0.491878 98.911066 1375.446804 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 7/31/87 17.320528 1713.191894 98.911066 0.394907 98.516159 1706.351894 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 FLEXMN q 7/31/88 19.010671 1872.858291 98.516159 0.359798 98.156361 1866.018291 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
Page 1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II- Inception - 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 FLEXMN Q 7/31/89 23.634078 2319.835099 98.156361 0.289413 97.866949 2312.995099 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/90 23.917918 2340.773654 97.866949 0.285978 97.580971 2333.933654 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/91 26.982387 2632.967513 97.580971 0.253499 97.327472 2626.127513 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/92 29.524429 2873.538035 97.327472 0.231673 97.095799 2866.698035 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/93 32.307338 3136.906809 97.095799 0.211717 96.884083 3130.066809 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/94 34.745700 3366.305274 96.884083 0.196859 96.687224 3359.465274 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/95 40.713405 3936.466104 96.687224 0.168004 96.519220 3929.626104 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 7/31/96 44.656630 4310.223106 96.519220 0.153169 96.366051 4303.383106 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 FLEXMN Q 12/31/96 49.261868 4747.171708 96.366051 0.138850 96.227202 4740.331708 13.34%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/84 9.197711 919.771100 100.000000 0.441414 99.558586 915.711100 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/85 11.236685 1118.708468 99.558586 0.361317 99.197269 1114.648468 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/86 14.477963 1436.174395 99.197269 0.280426 98.916843 1432.114395 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/87 16.408210 1623.048334 98.916843 0.247437 98.669406 1618.988334 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWeq n 6/1/88 15.804408 1559.411550 98.669406 0.256890 98.412516 1555.351550 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/89 19.056625 1875.410406 98.412516 0.213049 98.199466 1871.350406 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/90 21.657087 2126.714387 98.199466 0.187468 98.011999 2122.654387 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/91 22.173661 2173.284837 98.011999 0.183100 97.828899 2169.224837 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/92 24.003105 2348.197329 97.828899 0.169145 97.659754 2344.137329 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/93 26.278724 2566.373721 97.659754 0.154498 97.505256 2562.313721 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/94 25.928673 2528.181908 97.505256 0.156583 97.348673 2524.121908 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/95 28.144778 2739.856789 97.348673 0.144254 97.204419 2735.796789 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 6/1/96 35.760410 3476.069872 97.204419 0.113533 97.090885 3472.009872 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ N 12/31/96 38.234636 3712.234665 97.090885 0.106186 96.984699 3708.174665 10.12%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/84 10.206904 1020.690400 100.000000 0.397770 99.602230 1016.630400 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/85 11.434085 1138.860364 99.602230 0.355079 99.247151 1134.800364 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/86 14.161105 1405.449331 99.247151 0.286701 98.960451 1401.389331 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/87 18.762647 1856.760000 98.960451 0.216387 98.744063 1852.700000 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/88 15.404132 1521.066583 98.744063 0.263566 98.480498 1517.006583 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/89 20.657475 2034.358415 98.480498 0.196539 98.283958 2030.298415 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 GROWEQ q 8/11/90 19.674516 1933.689314 98.283958 0.206358 98.077600 1929.629314 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/91 22.338239 2190.880873 98.077600 0.181751 97.895849 2186.820873 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/92 24.075117 2356.854020 97.895849 0.168639 97.727210 2352.794020 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/93 27.266028 2664.632850 97.727210 0.148903 97.578307 2660.572850 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/94 25.356130 2474.208236 97.578307 0.160119 97.418188 2470.148236 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/95 30.687797 2989.549574 97.418188 0.132300 97.285888 2985.489574 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 8/11/96 34.821598 3387.650074 97.285888 0.116594 97.169293 3383.590074 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 GROWEQ Q 12/31/96 38.552321 3746.101792 97.169293 0.105311 97.063982 3742.041792 10.35%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/85 11.589649 1158.964900 100.000000 0.173431 99.826569 1156.954900 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/86 12.927177 1290.475732 99.826569 0.155486 99.671083 1288.465732 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/87 13.657141 1361.222034 99.671083 0.147176 99.523907 1359.212034 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/88 14.725803 1465.569452 99.523907 0.136495 99.387412 1463.559452 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c div2 HIBOND q 8/6/89 16.193955 1609.475280 99.387412 0.124120 99.263292 1607.465280 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/90 15.419268 1530.567298 99.263292 0.130356 99.132935 1528.557298 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/91 16.997000 1684.962502 99.132935 0.118256 99.014679 1682.952502 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/92 20.228463 2002.914775 99.014679 0.099365 98.915314 2000.904775 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/93 23.456695 2320.226358 98.915314 0.085690 98.829624 2318.216358 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/94 23.555269 2327.958389 98.829624 0.085331 98.744293 2325.948389 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/95 25.023029 2470.881313 98.744293 0.080326 98.663967 2468.871313 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
1c DIV2 HIBOND Q 8/6/96 27.461148 2709.425806 98.663967 0.073194 98.590773 2707.415806 8.91%
- ------------------------------------------------------------------------------------------------------------------------------
Page 2
</TABLE>
<PAGE>
Table 1C - Diversifier II Variable Contracts Diversifier II - Inception - 1C
<TABLE>
<CAPTION>
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 HIBOND Q 12/31/96 29.275542 2886.298313 98.590773 0.068658 98.522115 2884.288313 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 INTLEQ q 11/1/92 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 11/1/93 13.025039 1302.503900 100.000000 0.272552 99.727448 1298.953900 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 11/1/94 13.785501 1374.792835 99.727448 0.257517 99.469931 1371.242835 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 11/1/95 13.667136 1359.469076 99.469931 0.259747 99.210184 1355.919076 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 11/1/96 15.823754 1569.877545 99.210184 0.224346 98.985838 1566.327545 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 INTLEQ Q 12/31/96 16.658717 1648.977057 98.985838 3.214533 95.771304 1595.427057 11.86%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/84 4.949210 1000.000000 202.052449 0.000000 202.052449 1000.000000 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/85 5.745058 1160.803037 202.052449 0.046997 202.005452 1160.533037 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/86 6.613416 1335.946087 202.005452 0.040826 201.964626 1335.676087 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/87 6.829992 1379.416778 201.964626 0.039532 201.925094 1379.146778 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/88 7.166669 1447.130313 201.925094 0.037674 201.887420 1446.860313 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/89 7.714368 1557.433851 201.887420 0.035000 201.852420 1557.163851 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/90 8.217273 1658.676442 201.852420 0.032858 201.819563 1658.406442 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/91 8.900763 1796.348095 201.819563 0.030334 201.789228 1796.078095 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 LIMMAT q 9/10/92 9.705874 1958.540823 201.789228 0.027818 201.761410 1958.270823 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 9/10/93 10.206569 2059.291752 201.761410 0.026454 201.734956 2059.021752 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 9/10/94 10.070420 2031.555739 201.734956 0.026811 201.708145 2031.285739 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 9/10/95 10.696546 2157.580453 201.708145 0.025242 201.682903 2157.310453 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 9/10/96 11.024991 2223.552194 201.682903 0.024490 201.658414 2223.282194 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 LIMMAT Q 12/31/96 11.329532 2284.695449 201.658414 0.023832 201.634582 2284.425449 6.94%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 3/22/94 5.929173 1000.000000 168.657585 0.000000 168.657585 1000.000000 19.21%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 3/22/95 6.137345 1035.109787 168.657585 0.272105 168.385480 1033.439787 19.21%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 3/22/96 8.436252 1420.542347 168.385480 0.197955 168.187525 1418.872347 19.21%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 PARTNR Q 12/31/96 10.000000 1681.875253 168.187525 5.167000 163.020525 1630.205253 19.21%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 3/17/87 10.014650 1000.000000 99.853714 0.000000 99.853714 1000.000000 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 3/17/88 10.319857 1030.476053 99.853714 0.156979 99.696735 1028.856053 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/89 10.562833 1053.079967 99.696735 0.153368 99.543367 1051.459967 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 3/17/90 11.634482 1158.135517 99.543367 0.139241 99.404126 1156.515517 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 QUALBD q 3/17/91 12.757872 1268.185118 99.404126 0.126980 99.277146 1266.565118 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/92 13.917758 1381.715290 99.277146 0.116398 99.160748 1380.095290 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/93 15.783929 1565.146201 99.160748 0.102636 99.058112 1563.526201 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/94 16.204383 1605.175580 99.058112 0.099973 98.958139 1603.555580 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/95 16.500701 1632.878658 98.958139 0.098178 98.859961 1631.258658 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 3/17/96 18.128405 1792.173412 98.859961 0.089363 98.770599 1790.553412 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 QUALBD Q 12/31/96 18.990158 1875.669272 98.770599 2.718250 96.052348 1824.049272 6.33%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 SMLCAP q 3/1/95 10.010905 1000.000000 99.891069 0.000000 99.891069 1000.000000 13.83%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 3/1/96 11.585005 1157.238531 99.891069 0.036254 99.854815 1156.818531 13.83%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 SMLCAP Q 12/31/96 13.211266 1319.208523 99.854815 3.816440 96.038375 1268.788523 13.83%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/87 5.888807 1000.000000 169.813682 0.000000 169.813682 1000.000000 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/88 5.810044 986.624965 169.813682 0.358001 169.455681 984.544965 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/89 7.698169 1304.498473 169.455681 0.270194 169.185487 1302.418473 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/90 6.964679 1178.322610 169.185487 0.298650 168.886837 1176.242610 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/91 9.346041 1578.423307 168.886837 0.222554 168.664283 1576.343307 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 TCIGRO q 11/20/92 10.053957 1695.743452 168.664283 0.206884 168.457400 1693.663452 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 11/20/93 10.849833 1827.734654 168.457400 0.191708 168.265692 1825.654654 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 11/20/94 10.931772 1839.442176 168.265692 0.190271 168.075421 1837.362176 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 11/20/95 13.831774 2324.781232 168.075421 0.150378 167.925042 2322.701232 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 11/20/96 13.573655 2279.356588 167.925042 0.153238 167.771804 2277.276588 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c DIV2 TCIGRO Q 12/31/96 13.282214 2228.381005 167.771804 3.921033 163.850771 2176.301005 8.90%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 3/17/87 10.134586 1000.000000 98.672013 0.000000 98.672013 1000.000000 11.51%
- -------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 3/17/88 10.617116 1047.612206 98.672013 0.410658 98.261355 1043.252206 11.51%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 1C - Diversifier II Variable Contracts Diversifier II - Inception - 1C
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1c DIV2 VALUEQ Q 3/17/89 12.355591 1214.077116 98.261355 0.352877 97.908479 1209.717116 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 3/17/90 12.933143 1266.264353 97.908479 0.337118 97.571360 1261.904353 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c div2 VALUEQ q 3/17/91 13.643553 1331.220023 97.571360 0.319565 97.251795 1326.860023 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 3/17/92 15.775871 1534.231777 97.251795 0.276371 96.975424 1529.871777 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 3/17/93 17.218502 1669.771530 96.975424 0.253216 96.722208 1665.411530 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 3/17/94 18.356274 1775.459350 96.722208 0.237521 96.484687 1771.099350 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 3/17/95 19.989840 1928.713454 96.484687 0.218111 96.266576 1924.353454 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 3/17/96 26.451059 2546.352884 96.266576 0.164833 96.101743 2541.992884 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
1c DIV2 VALUEQ Q 12/31/96 30.819233 2961.782021 96.101743 1.763834 94.337910 2907.422021 11.51%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
Table 1D - Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - Inception - 1D
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d div2 FLEXMN q 7/31/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 7/31/85 11.456214 1145.621400 100.000000 0.597056 99.402944 1138.781400 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 7/31/86 13.905894 1382.286804 99.402944 0.491878 98.911066 1375.446804 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 7/31/87 17.320528 1713.191894 98.911066 0.394907 98.516159 1706.351894 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 FLEXMN q 7/31/88 19.010671 1872.858291 98.516159 0.359798 98.156361 1866.018291 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/89 23.634078 2319.835099 98.156361 0.289413 97.866949 2312.995099 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/90 23.917918 2340.773654 97.866949 0.285978 97.580971 2333.933654 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/91 26.982387 2632.967513 97.580971 0.253499 97.327472 2626.127513 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/92 29.524429 2873.538035 97.327472 0.231673 97.095799 2866.698035 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/93 32.307338 3136.906809 97.095799 0.211717 96.884083 3130.066809 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/94 34.745700 3366.305274 96.884083 0.196859 96.687224 3359.465274 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/95 40.713405 3936.466104 96.687224 0.168004 96.519220 3929.626104 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 7/31/96 44.656630 4310.223106 96.519220 0.153169 96.366051 4303.383106 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 FLEXMN Q 12/31/96 49.261868 4747.171708 96.366051 0.138850 96.227202 4740.331708 13.34%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/84 9.197711 919.771100 100.000000 0.441414 99.558586 915.711100 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/85 11.236685 1118.708468 99.558586 0.361317 99.197269 1114.648468 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/86 14.477963 1436.174395 99.197269 0.280426 98.916843 1432.114395 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/87 16.408210 1623.048334 98.916843 0.247437 98.669406 1618.988334 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWeq n 6/1/88 15.804408 1559.411550 98.669406 0.256890 98.412516 1555.351550 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/89 19.056625 1875.410406 98.412516 0.213049 98.199466 1871.350406 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/90 21.657087 2126.714387 98.199466 0.187468 98.011999 2122.654387 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/91 22.173661 2173.284837 98.011999 0.183100 97.828899 2169.224837 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/92 24.003105 2348.197329 97.828899 0.169145 97.659754 2344.137329 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/93 26.278724 2566.373721 97.659754 0.154498 97.505256 2562.313721 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/94 25.928673 2528.181908 97.505256 0.156583 97.348673 2524.121908 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/95 28.144778 2739.856789 97.348673 0.144254 97.204419 2735.796789 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 6/1/96 35.760410 3476.069872 97.204419 0.113533 97.090885 3472.009872 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ N 12/31/96 38.234636 3712.234665 97.090885 0.106186 96.984699 3708.174665 10.12%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/84 10.206904 1020.690400 100.000000 0.397770 99.602230 1016.630400 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/85 11.434085 1138.860364 99.602230 0.355079 99.247151 1134.800364 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/86 14.161105 1405.449331 99.247151 0.286701 98.960451 1401.389331 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/87 18.762647 1856.760000 98.960451 0.216387 98.744063 1852.700000 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/88 15.404132 1521.066583 98.744063 0.263566 98.480498 1517.006583 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/89 20.657475 2034.358415 98.480498 0.196539 98.283958 2030.298415 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 GROWEQ q 8/11/90 19.674516 1933.689314 98.283958 0.206358 98.077600 1929.629314 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/91 22.338239 2190.880873 98.077600 0.181751 97.895849 2186.820873 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/92 24.075117 2356.854020 97.895849 0.168639 97.727210 2352.794020 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/93 27.266028 2664.632850 97.727210 0.148903 97.578307 2660.572850 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/94 25.356130 2474.208236 97.578307 0.160119 97.418188 2470.148236 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/95 30.687797 2989.549574 97.418188 0.132300 97.285888 2985.489574 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 8/11/96 34.821598 3387.650074 97.285888 0.116594 97.169293 3383.590074 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 GROWEQ Q 12/31/96 38.552321 3746.101792 97.169293 0.105311 97.063982 3742.041792 10.35%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/85 11.589649 1158.964900 100.000000 0.173431 99.826569 1156.954900 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/86 12.927177 1290.475732 99.826569 0.155486 99.671083 1288.465732 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/87 13.657141 1361.222034 99.671083 0.147176 99.523907 1359.212034 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/88 14.725803 1465.569452 99.523907 0.136495 99.387412 1463.559452 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d div2 HIBOND q 8/6/89 16.193955 1609.475280 99.387412 0.124120 99.263292 1607.465280 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/90 15.419268 1530.567298 99.263292 0.130356 99.132935 1528.557298 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/91 16.997000 1684.962502 99.132935 0.118256 99.014679 1682.952502 8.91%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 1D -Penn Mutual Optimizer Group Variable Annuity Contract Diversifier II - Inception - 1D
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ---------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1d DIV2 HIBOND Q 8/6/92 20.228463 2002.914775 99.014679 0.099365 98.915314 2000.904775 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/93 23.456695 2320.226358 98.915314 0.085690 98.829624 2318.216358 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/94 23.555269 2327.958389 98.829624 0.085331 98.744293 2325.948389 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/95 25.023029 2470.881313 98.744293 0.080326 98.663967 2468.871313 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 8/6/96 27.461148 2709.425806 98.663967 0.073194 98.590773 2707.415806 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 HIBOND Q 12/31/96 29.275542 2886.298313 98.590773 0.068658 98.522115 2884.288313 8.91%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 INTLEQ q 11/1/92 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 11/1/93 13.025039 1302.503900 100.000000 0.272552 99.727448 1298.953900 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 11/1/94 13.785501 1374.792835 99.727448 0.257517 99.469931 1371.242835 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 11/1/95 13.667136 1359.469076 99.469931 0.259747 99.210184 1355.919076 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 11/1/96 15.823754 1569.877545 99.210184 0.224346 98.985838 1566.327545 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 INTLEQ Q 12/31/96 16.658717 1648.977057 98.985838 4.667464 94.318373 1571.223089 11.45%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 3/17/87 10.014650 1000.000000 99.853714 0.000000 99.853714 1000.000000 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 3/17/88 10.319857 1030.476053 99.853714 0.156979 99.696735 1028.856053 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/89 10.562833 1053.079967 99.696735 0.153368 99.543367 1051.459967 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 3/17/90 11.634482 1158.135517 99.543367 0.139241 99.404126 1156.515517 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 QUALBD q 3/17/91 12.757872 1268.185118 99.404126 0.126980 99.277146 1266.565118 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/92 13.917758 1381.715290 99.277146 0.116398 99.160748 1380.095290 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/93 15.783929 1565.146201 99.160748 0.102636 99.058112 1563.526201 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/94 16.204383 1605.175580 99.058112 0.099973 98.958139 1603.555580 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/95 16.500701 1632.878658 98.958139 0.098178 98.859961 1631.258658 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 3/17/96 18.128405 1792.173412 98.859961 0.089363 98.770599 1790.553412 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 QUALBD Q 12/31/96 18.990158 1875.669272 98.770599 4.529984 94.240614 1789.644155 6.12%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 3/17/87 10.134586 1000.000000 98.672013 0.000000 98.672013 1000.000000 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 3/17/88 10.617116 1047.612206 98.672013 0.410658 98.261355 1043.252206 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/89 12.355591 1214.077116 98.261355 0.352877 97.908479 1209.717116 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 3/17/90 12.933143 1266.264353 97.908479 0.337118 97.571360 1261.904353 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d div2 VALUEQ q 3/17/91 13.643553 1331.220023 97.571360 0.319565 97.251795 1326.860023 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/92 15.775871 1534.231777 97.251795 0.276371 96.975424 1529.871777 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/93 17.218502 1669.771530 96.975424 0.253216 96.722208 1665.411530 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/94 18.356274 1775.459350 96.722208 0.237521 96.484687 1771.099350 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/95 19.989840 1928.713454 96.484687 0.218111 96.266576 1924.353454 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 3/17/96 26.451059 2546.352884 96.266576 0.164833 96.101743 2541.992884 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
1d DIV2 VALUEQ Q 12/31/96 30.819233 2961.782021 96.101743 4.466049 91.635695 2824.141830 11.18%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Divsifier II - Inception - 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2 div2 BALFND q 2/28/89 6.791578 1000.000000 147.241186 0.000000 147.241186 1000.000000 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 2/28/90 7.572278 1114.951194 147.241186 0.137343 147.103843 1113.911194 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 2/28/91 8.499080 1250.247330 147.103843 0.122366 146.981477 1249.207330 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 2/28/92 9.751932 1433.353367 146.981477 0.106646 146.874831 1432.313367 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 BALFND q 2/28/93 10.022615 1472.069887 146.874831 0.103765 146.771066 1471.029887 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 2/28/94 10.787779 1583.333823 146.771066 0.096405 146.674661 1582.293823 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 2/28/95 10.674849 1565.729853 146.674661 0.097425 146.577235 1564.689853 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 2/28/96 12.804422 1876.836776 146.577235 0.081222 146.496013 1875.796776 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 12/31/96 13.181800 1931.081149 146.496013 0.078897 146.417117 1930.041149 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 BALFND Q 2/28/97 13.816279 2022.939734 146.417117 0.075274 146.341843 2021.899734 8.74%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/89 6.153672 1000.000000 162.504599 0.000000 162.504599 1000.000000 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/90 6.151043 999.572775 162.504599 0.039018 162.465581 999.332775 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/91 7.592009 1233.440154 162.465581 0.031612 162.433969 1233.200154 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/92 8.409222 1365.943305 162.433969 0.028540 162.405429 1365.703305 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/93 9.747655 1583.072090 162.405429 0.024621 162.380808 1582.832090 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDASM q 9/6/94 10.087746 1638.056342 162.380808 0.023791 162.357016 1637.816342 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 9/6/95 10.750516 1745.421701 162.357016 0.022325 162.334692 1745.181701 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 9/6/96 11.579895 1879.818686 162.334692 0.020726 162.313966 1879.578686 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDASM Q 12/31/96 12.622550 2048.816154 162.313966 0.019014 162.294953 2048.576154 10.29%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/86 4.238521 1000.000000 235.931354 0.000000 235.931354 1000.000000 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/87 5.019478 1184.252243 235.931354 0.213170 235.718185 1183.182243 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/88 5.047448 1189.775280 235.718185 0.211988 235.506196 1188.705280 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/89 6.178431 1455.058785 235.506196 0.173183 235.333013 1453.988785 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/90 4.543676 1069.276965 235.333013 0.235492 235.097521 1068.206965 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/91 5.881881 1382.815643 235.097521 0.181915 234.915607 1381.745643 11.87%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/92 6.591041 1548.338395 234.915607 0.162342 234.753265 1547.268395 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDEQI q 10/9/93 8.467128 1987.685943 234.753265 0.126371 234.626894 1986.615943 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 10/9/95 11.145047 2614.927761 234.626894 0.096007 234.530887 2613.857761 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 10/9/96 12.785988 2998.709109 234.530887 0.083685 234.447202 2997.639109 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDEQI Q 12/31/96 13.453420 3154.116674 234.447202 0.079534 234.367668 3153.046674 11.87%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/86 3.868619 1000.000000 258.490174 0.000000 258.490174 1000.000000 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/87 4.875669 1260.312530 258.490174 0.293293 258.196881 1258.882530 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/88 4.588422 1184.716251 258.196881 0.311654 257.885227 1183.286251 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/89 6.036553 1556.737843 257.885227 0.236890 257.648337 1555.307843 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/90 4.755716 1225.302319 257.648337 0.300691 257.347646 1223.872319 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/91 6.488444 1669.785792 257.347646 0.220392 257.127255 1668.355792 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/92 6.847898 1760.781212 257.127255 0.208823 256.918431 1759.351212 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FIDGRO q 10/9/93 9.336172 2398.634665 256.918431 0.153168 256.765264 2397.204665 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 10/9/95 12.054638 3095.212304 256.765264 0.118627 256.646637 3093.782304 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 10/9/96 13.936113 3576.656536 256.646637 0.102611 256.544026 3575.226536 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDGRO Q 12/31/96 13.999957 3591.605333 256.544026 0.102143 256.441883 3590.175333 13.30%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 8/27/92 5.232243 1000.000000 191.122622 0.000000 191.122622 1000.000000 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 8/27/93 5.924805 1132.364265 191.122622 0.281866 190.840756 1130.694265 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 8/27/94 6.195486 1182.351232 190.840756 0.269551 190.571205 1180.681232 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 8/27/95 7.447623 1419.302489 190.571205 0.224233 190.346972 1417.632489 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 8/27/96 8.969939 1707.400730 190.346972 0.186177 190.160795 1705.730730 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FIDIND Q 12/31/96 10.000000 1901.607949 190.160795 0.167000 189.993795 1899.937949 15.91%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 7/31/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 7/31/85 11.456214 1145.621400 100.000000 0.597056 99.402944 1138.781400 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 7/31/86 13.905894 1382.286804 99.402944 0.491878 98.911066 1375.446804 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 7/31/87 17.320528 1713.191894 98.911066 0.394907 98.516159 1706.351894 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
2 div2 FLEXMN q 7/31/88 19.010671 1872.858291 98.516159 0.359798 98.156361 1866.018291 13.34%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 2
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- -------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 FLEXMN Q 7/31/89 23.634078 2319.835099 98.156361 0.289413 97.866949 2312.995099 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/90 23.917918 2340.773654 97.866949 0.285978 97.580971 2333.933654 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/91 26.982387 2632.967513 97.580971 0.253499 97.327472 2626.127513 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/92 29.524429 2873.538035 97.327472 0.231673 97.095799 2866.698035 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/93 32.307338 3136.906809 97.095799 0.211717 96.884083 3130.066809 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/94 34.745700 3366.305274 96.884083 0.196859 96.687224 3359.465274 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/95 40.713405 3936.466104 96.687224 0.168004 96.519220 3929.626104 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 7/31/96 44.656630 4310.223106 96.519220 0.153169 96.366051 4303.383106 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 FLEXMN Q 12/31/96 49.261868 4747.171708 96.366051 0.138850 96.227202 4740.331708 13.34%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/84 9.197711 919.771100 100.000000 0.441414 99.558586 915.711100 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/85 11.236685 1118.708468 99.558586 0.361317 99.197269 1114.648468 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/86 14.477963 1436.174395 99.197269 0.280426 98.916843 1432.114395 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/87 16.408210 1623.048334 98.916843 0.247437 98.669406 1618.988334 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWeq n 6/1/88 15.804408 1559.411550 98.669406 0.256890 98.412516 1555.351550 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/89 19.056625 1875.410406 98.412516 0.213049 98.199466 1871.350406 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/90 21.657087 2126.714387 98.199466 0.187468 98.011999 2122.654387 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/91 22.173661 2173.284837 98.011999 0.183100 97.828899 2169.224837 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/92 24.003105 2348.197329 97.828899 0.169145 97.659754 2344.137329 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/93 26.278724 2566.373721 97.659754 0.154498 97.505256 2562.313721 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/94 25.928673 2528.181908 97.505256 0.156583 97.348673 2524.121908 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/95 28.144778 2739.856789 97.348673 0.144254 97.204419 2735.796789 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 6/1/96 35.760410 3476.069872 97.204419 0.113533 97.090885 3472.009872 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ N 12/31/96 38.234636 3712.234665 97.090885 0.106186 96.984699 3708.174665 10.12%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/83 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/84 10.206904 1020.690400 100.000000 0.397770 99.602230 1016.630400 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/85 11.434085 1138.860364 99.602230 0.355079 99.247151 1134.800364 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/86 14.161105 1405.449331 99.247151 0.286701 98.960451 1401.389331 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/87 18.762647 1856.760000 98.960451 0.216387 98.744063 1852.700000 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/88 15.404132 1521.066583 98.744063 0.263566 98.480498 1517.006583 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/89 20.657475 2034.358415 98.480498 0.196539 98.283958 2030.298415 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 GROWEQ q 8/11/90 19.674516 1933.689314 98.283958 0.206358 98.077600 1929.629314 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/91 22.338239 2190.880873 98.077600 0.181751 97.895849 2186.820873 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/92 24.075117 2356.854020 97.895849 0.168639 97.727210 2352.794020 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/93 27.266028 2664.632850 97.727210 0.148903 97.578307 2660.572850 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/94 25.356130 2474.208236 97.578307 0.160119 97.418188 2470.148236 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/95 30.687797 2989.549574 97.418188 0.132300 97.285888 2985.489574 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 8/11/96 34.821598 3387.650074 97.285888 0.116594 97.169293 3383.590074 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 GROWEQ Q 12/31/96 38.552321 3746.101792 97.169293 0.105311 97.063982 3742.041792 10.35%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/84 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/85 11.589649 1158.964900 100.000000 0.173431 99.826569 1156.954900 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/86 12.927177 1290.475732 99.826569 0.155486 99.671083 1288.465732 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/87 13.657141 1361.222034 99.671083 0.147176 99.523907 1359.212034 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/88 14.725803 1465.569452 99.523907 0.136495 99.387412 1463.559452 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 div2 HIBOND q 8/6/89 16.193955 1609.475280 99.387412 0.124120 99.263292 1607.465280 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/90 15.419268 1530.567298 99.263292 0.130356 99.132935 1528.557298 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/91 16.997000 1684.962502 99.132935 0.118256 99.014679 1682.952502 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/92 20.228463 2002.914775 99.014679 0.099365 98.915314 2000.904775 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/93 23.456695 2320.226358 98.915314 0.085690 98.829624 2318.216358 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/94 23.555269 2327.958389 98.829624 0.085331 98.744293 2325.948389 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/95 25.023029 2470.881313 98.744293 0.080326 98.663967 2468.871313 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
2 DIV2 HIBOND Q 8/6/96 27.461148 2709.425806 98.663967 0.073194 98.590773 2707.415806 8.91%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 HIBOND Q 12/31/96 29.275542 2886.298313 98.590773 0.068658 98.522115 2884.288313 8.91%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 INTLEQ q 11/1/92 10.000000 1000.000000 100.000000 0.000000 100.000000 1000.000000 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 11/1/93 13.025039 1302.503900 100.000000 0.272552 99.727448 1298.953900 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 11/1/94 13.785501 1374.792835 99.727448 0.257517 99.469931 1371.242835 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 11/1/95 13.667136 1359.469076 99.469931 0.259747 99.210184 1355.919076 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 11/1/96 15.823754 1569.877545 99.210184 0.224346 98.985838 1566.327545 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 INTLEQ Q 12/31/96 16.658717 1648.977057 98.985838 0.213102 98.772736 1645.427057 12.69%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/84 4.949210 1000.000000 202.052449 0.000000 202.052449 1000.000000 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/85 5.745058 1160.803037 202.052449 0.046997 202.005452 1160.533037 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/86 6.613416 1335.946087 202.005452 0.040826 201.964626 1335.676087 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/87 6.829992 1379.416778 201.964626 0.039532 201.925094 1379.146778 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/88 7.166669 1447.130313 201.925094 0.037674 201.887420 1446.860313 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/89 7.714368 1557.433851 201.887420 0.035000 201.852420 1557.163851 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/90 8.217273 1658.676442 201.852420 0.032858 201.819563 1658.406442 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/91 8.900763 1796.348095 201.819563 0.030334 201.789228 1796.078095 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 LIMMAT q 9/10/92 9.705874 1958.540823 201.789228 0.027818 201.761410 1958.270823 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 9/10/93 10.206569 2059.291752 201.761410 0.026454 201.734956 2059.021752 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 9/10/94 10.070420 2031.555739 201.734956 0.026811 201.708145 2031.285739 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 9/10/95 10.696546 2157.580453 201.708145 0.025242 201.682903 2157.310453 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 9/10/96 11.024991 2223.552194 201.682903 0.024490 201.658414 2223.282194 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 LIMMAT Q 12/31/96 11.329532 2284.695449 201.658414 0.023832 201.634582 2284.425449 6.94%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 3/22/94 5.929173 1000.000000 168.657585 0.000000 168.657585 1000.000000 20.52%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 3/22/95 6.137345 1035.109787 168.657585 0.272105 168.385480 1033.439787 20.52%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 3/22/96 8.436252 1420.542347 168.385480 0.197955 168.187525 1418.872347 20.52%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 PARTNR Q 12/31/96 10.000000 1681.875253 168.187525 0.167000 168.020525 1680.205253 20.52%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 3/17/87 10.014650 1000.000000 99.853714 0.000000 99.853714 1000.000000 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 3/17/88 10.319857 1030.476053 99.853714 0.156979 99.696735 1028.856053 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/89 10.562833 1053.079967 99.696735 0.153368 99.543367 1051.459967 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 3/17/90 11.634482 1158.135517 99.543367 0.139241 99.404126 1156.515517 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 QUALBD q 3/17/91 12.757872 1268.185118 99.404126 0.126980 99.277146 1266.565118 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/92 13.917758 1381.715290 99.277146 0.116398 99.160748 1380.095290 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/93 15.783929 1565.146201 99.160748 0.102636 99.058112 1563.526201 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/94 16.204383 1605.175580 99.058112 0.099973 98.958139 1603.555580 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/95 16.500701 1632.878658 98.958139 0.098178 98.859961 1631.258658 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 3/17/96 18.128405 1792.173412 98.859961 0.089363 98.770599 1790.553412 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 QUALBD Q 12/31/96 18.990158 1875.669272 98.770599 0.085307 98.685291 1874.049272 6.62%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 SMLCAP q 3/1/95 10.010905 1000.000000 99.891069 0.000000 99.891069 1000.000000 16.24%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 3/1/96 11.585005 1157.238531 99.891069 0.036254 99.854815 1156.818531 16.24%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 SMLCAP Q 12/31/96 13.211266 1319.208523 99.854815 0.031791 99.823024 1318.788523 16.24%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/87 5.888807 1000.000000 169.813682 0.000000 169.813682 1000.000000 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/88 5.810044 986.624965 169.813682 0.358001 169.455681 984.544965 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/89 7.698169 1304.498473 169.455681 0.270194 169.185487 1302.418473 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/90 6.964679 1178.322610 169.185487 0.298650 168.886837 1176.242610 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/91 9.346041 1578.423307 168.886837 0.222554 168.664283 1576.343307 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 TCIGRO q 11/20/92 10.053957 1695.743452 168.664283 0.206884 168.457400 1693.663452 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 11/20/93 10.849833 1827.734654 168.457400 0.191708 168.265692 1825.654654 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 11/20/94 10.931772 1839.442176 168.265692 0.190271 168.075421 1837.362176 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 11/20/95 13.831774 2324.781232 168.075421 0.150378 167.925042 2322.701232 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 11/20/96 13.573655 2279.356588 167.925042 0.153238 167.771804 2277.276588 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 DIV2 TCIGRO Q 12/31/96 13.282214 2228.381005 167.771804 0.156600 167.615204 2226.301005 9.17%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 3/17/87 10.134586 1000.000000 98.672013 0.000000 98.672013 1000.000000 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 3/17/88 10.617116 1047.612206 98.672013 0.410658 98.261355 1043.252206 11.70%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Diversifier II Variable/Fixed Annuity Contracts
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- --------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $1000 sales load period Value inception
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 DIV2 VALUEQ Q 3/17/89 12.355591 1214.077116 98.261355 0.352877 97.908479 1209.717116 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 3/17/90 12.933143 1266.264353 97.908479 0.337118 97.571360 1261.904353 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 div2 VALUEQ q 3/17/91 13.643553 1331.220023 97.571360 0.319565 97.251795 1326.860023 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 3/17/92 15.775871 1534.231777 97.251795 0.276371 96.975424 1529.871777 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 3/17/93 17.218502 1669.771530 96.975424 0.253216 96.722208 1665.411530 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 3/17/94 18.356274 1775.459350 96.722208 0.237521 96.484687 1771.099350 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 3/17/95 19.989840 1928.713454 96.484687 0.218111 96.266576 1924.353454 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 3/17/96 26.451059 2546.352884 96.266576 0.164833 96.101743 2541.992884 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
2 DIV2 VALUEQ Q 12/31/96 30.819233 2961.782021 96.101743 0.141470 95.960273 2957.422021 11.70%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 div2 BALFND q 2/28/89 6.791578 10000.000000 1472.411861 0.000000 1472.411861 10000.000000 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 2/28/90 7.572278 11149.511940 1472.411861 0.137343 1472.274518 11148.471940 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 2/28/91 8.499080 12512.978907 1472.274518 0.122366 1472.152151 12511.938907 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 2/28/92 9.751932 14356.327674 1472.152151 0.106646 1472.045506 14355.287674 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 BALFND q 2/28/93 10.022615 14753.745368 1472.045506 0.103765 1471.941741 14752.705368 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 2/28/94 10.787779 15878.982198 1471.941741 0.096405 1471.845335 15877.942198 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 2/28/95 10.674849 15711.726704 1471.845335 0.097425 1471.747910 15710.686704 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 2/28/96 12.804422 18844.881316 1471.747910 0.081222 1471.666688 18843.841316 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 12/31/96 13.181800 19399.215947 1471.666688 0.078897 1471.587791 19398.175947 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 BALFND Q 2/28/97 13.816279 20331.867498 1471.587791 0.075274 1471.512518 20330.827498 8.81%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/89 6.153672 10000.000000 1625.045989 0.000000 1625.045989 10000.000000 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/90 6.151043 9995.727754 1625.045989 0.039018 1625.006971 9995.487754 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/91 7.592009 12337.067549 1625.006971 0.031612 1624.975359 12336.827549 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/92 8.409222 13664.778537 1624.975359 0.028540 1624.946819 13664.538537 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/93 9.747655 15839.420982 1624.946819 0.024621 1624.922197 15839.180982 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDASM q 9/6/94 10.087746 16391.802398 1624.922197 0.023791 1624.898406 16391.562398 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 9/6/95 10.750516 17468.496314 1624.898406 0.022325 1624.876082 17468.256314 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 9/6/96 11.579895 18815.894414 1624.876082 0.020726 1624.855356 18815.654414 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDASM Q 12/31/96 12.622550 20509.817975 1624.855356 0.019014 1624.836343 20509.577975 10.31%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/86 4.238521 10000.000000 2359.313544 0.000000 2359.313544 10000.000000 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/87 5.019478 11842.522427 2359.313544 0.213170 2359.100374 11841.452427 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/88 5.047448 11907.436465 2359.100374 0.211988 2358.888386 11906.366465 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/89 6.178431 14574.229128 2358.888386 0.173183 2358.715203 14573.159128 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/90 4.543676 10717.237657 2358.715203 0.235492 2358.479710 10716.167657 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/91 5.881881 13872.296998 2358.479710 0.181915 2358.297796 13871.226998 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/92 6.591041 15543.637462 2358.297796 0.162342 2358.135454 15542.567462 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDEQI q 10/9/93 8.467128 19966.634732 2358.135454 0.126371 2358.009083 19965.564732 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 10/9/95 11.145047 26280.122058 2358.009083 0.096007 2357.913076 26279.052058 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 10/9/96 12.785988 30148.248300 2357.913076 0.083685 2357.829391 30147.178300 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDEQI Q 12/31/96 13.453420 31720.869086 2357.829391 0.079534 2357.749857 31719.799086 11.94%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/86 3.868619 10000.000000 2584.901744 0.000000 2584.901744 10000.000000 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/87 4.875669 12603.125301 2584.901744 0.293293 2584.608451 12601.695301 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/88 4.588422 11859.274278 2584.608451 0.311654 2584.296797 11857.844278 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/89 6.036553 15600.244582 2584.296797 0.236890 2584.059907 15598.814582 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/90 4.755716 12289.055044 2584.059907 0.300691 2583.759216 12287.625044 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/91 6.488444 16764.576982 2583.759216 0.220392 2583.538824 16763.146982 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/92 6.847898 17691.810347 2583.538824 0.208823 2583.330001 17690.380347 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FIDGRO q 10/9/93 9.336172 24118.413222 2583.330001 0.153168 2583.176833 24116.983222 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 10/9/95 12.054638 31139.261615 2583.176833 0.118627 2583.058207 31137.831615 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 10/9/96 13.936113 35997.791054 2583.058207 0.102611 2582.955596 35996.361054 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDGRO Q 12/31/96 13.999957 36161.267271 2582.955596 0.102143 2582.853452 36159.837271 13.38%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 8/27/92 5.232243 10000.000000 1911.226218 0.000000 1911.226218 10000.000000 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 8/27/93 5.924805 11323.642652 1911.226218 0.281866 1910.944352 11321.972652 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 8/27/94 6.195486 11839.228980 1910.944352 0.269551 1910.674801 11837.558980 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 8/27/95 7.447623 14229.985593 1910.674801 0.224233 1910.450568 14228.315593 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 8/27/96 8.969939 17136.625061 1910.450568 0.186177 1910.264391 17134.955061 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FIDIND Q 12/31/96 10.000000 19102.643910 1910.264391 0.167000 1910.097391 19100.973910 16.05%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 7/31/84 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 7/31/85 11.456214 11456.214000 1000.000000 0.597056 999.402944 11449.374000 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 7/31/86 13.905894 13897.591404 999.402944 0.491878 998.911066 13890.751404 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 7/31/87 17.320528 17301.667094 998.911066 0.394907 998.516159 17294.827094 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 FLEXMN q 7/31/88 19.010671 18982.462191 998.516159 0.359798 998.156361 18975.622191 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 FLEXMN Q 7/31/89 23.634078 23590.505299 998.156361 0.289413 997.866949 23583.665299 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/90 23.917918 23866.899854 997.866949 0.285978 997.580971 23860.059854 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/91 26.982387 26917.115813 997.580971 0.253499 997.327472 26910.275813 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/92 29.524429 29445.524135 997.327472 0.231673 997.095799 29438.684135 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/93 32.307338 32213.511009 997.095799 0.211717 996.884083 32206.671009 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/94 34.745700 34637.435274 996.884083 0.196859 996.687224 34630.595274 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/95 40.713405 40578.530604 996.687224 0.168004 996.519220 40571.690604 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 7/31/96 44.656630 44501.190106 996.519220 0.153169 996.366051 44494.350106 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 FLEXMN Q 12/31/96 49.261868 49082.852908 996.366051 0.138850 996.227202 49076.012908 13.66%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/83 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/84 9.197711 9197.711000 1000.000000 0.441414 999.558586 9193.651000 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/85 11.236685 11231.724968 999.558586 0.361317 999.197269 11227.664968 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/86 14.477963 14466.341095 999.197269 0.280426 998.916843 14462.281095 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/87 16.408210 16390.437334 998.916843 0.247437 998.669406 16386.377334 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWeq n 6/1/88 15.804408 15783.378750 998.669406 0.256890 998.412516 15779.318750 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/89 19.056625 19026.372906 998.412516 0.213049 998.199466 19022.312906 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/90 21.657087 21618.092687 998.199466 0.187468 998.011999 21614.032687 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/91 22.173661 22129.579737 998.011999 0.183100 997.828899 22125.519737 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/92 24.003105 23950.991829 997.828899 0.169145 997.659754 23946.931829 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/93 26.278724 26217.225321 997.659754 0.154498 997.505256 26213.165321 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/94 25.928673 25863.987608 997.505256 0.156583 997.348673 25859.927608 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/95 28.144778 28070.156989 997.348673 0.144254 997.204419 28066.096989 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 6/1/96 35.760410 35660.438872 997.204419 0.113533 997.090885 35656.378872 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ N 12/31/96 38.234636 38123.407065 997.090885 0.106186 996.984699 38119.347065 10.34%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/83 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/84 10.206904 10206.904000 1000.000000 0.397770 999.602230 10202.844000 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/85 11.434085 11429.536864 999.602230 0.355079 999.247151 11425.476864 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/86 14.161105 14150.443831 999.247151 0.286701 998.960451 14146.383831 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/87 18.762647 18743.142300 998.960451 0.216387 998.744063 18739.082300 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/88 15.404132 15384.785383 998.744063 0.263566 998.480498 15380.725383 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/89 20.657475 20626.085915 998.480498 0.196539 998.283958 20622.025915 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 GROWEQ q 8/11/90 19.674516 19640.753714 998.283958 0.206358 998.077600 19636.693714 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/91 22.338239 22295.295973 998.077600 0.181751 997.895849 22291.235973 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/92 24.075117 24024.459320 997.895849 0.168639 997.727210 24020.399320 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/93 27.266028 27204.058050 997.727210 0.148903 997.578307 27199.998050 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/94 25.356130 25294.725236 997.578307 0.160119 997.418188 25290.665236 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/95 30.687797 30608.566874 997.418188 0.132300 997.285888 30604.506874 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 8/11/96 34.821598 34727.088274 997.285888 0.116594 997.169293 34723.028274 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 GROWEQ Q 12/31/96 38.552321 38443.190692 997.169293 0.105311 997.063982 38439.130692 10.57%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/84 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/85 11.589649 11589.649000 1000.000000 0.173431 999.826569 11587.639000 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/86 12.927177 12924.935032 999.826569 0.155486 999.671083 12922.925032 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/87 13.657141 13652.648934 999.671083 0.147176 999.523907 13650.638934 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/88 14.725803 14718.792152 999.523907 0.136495 999.387412 14716.782152 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 HIBOND q 8/6/89 16.193955 16184.034780 999.387412 0.124120 999.263292 16182.024780 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/90 15.419268 15407.908498 999.263292 0.130356 999.132935 15405.898498 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/91 16.997000 16982.262502 999.132935 0.118256 999.014679 16980.252502 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/92 20.228463 20208.531475 999.014679 0.099365 998.915314 20206.521475 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/93 23.456695 23431.251858 998.915314 0.085690 998.829624 23429.241858 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/94 23.555269 23527.700489 998.829624 0.085331 998.744293 23525.690489 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/95 25.023029 24991.607413 998.744293 0.080326 998.663967 24989.597413 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 HIBOND Q 8/6/96 27.461148 27424.459006 998.663967 0.073194 998.590773 27422.449006 9.03%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of unis fee & deferred at end of Ending return from
- -----------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value inception
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 HIBOND Q 12/31/96 29.275542 29234.286113 998.590773 0.068658 998.522115 29232.276113 9.03%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 INTLEQ q 11/1/92 10.000000 10000.000000 1000.000000 0.000000 1000.000000 10000.000000 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 11/1/93 13.025039 13025.039000 1000.000000 0.272552 999.727448 13021.489000 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 11/1/94 13.785501 13781.743735 999.727448 0.257517 999.469931 13778.193735 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 11/1/95 13.667136 13659.891476 999.469931 0.259747 999.210184 13656.341476 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 11/1/96 15.823754 15811.256145 999.210184 0.224346 998.985838 15807.706145 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 INTLEQ Q 12/31/96 16.658717 16641.822357 998.985838 0.213102 998.772736 16638.272357 13.00%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/84 4.949210 10000.000000 2020.524488 0.000000 2020.524488 10000.000000 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/85 5.745058 11608.030373 2020.524488 0.046997 2020.477491 11607.760373 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/86 6.613416 13362.258166 2020.477491 0.040826 2020.436665 13361.988166 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/87 6.829992 13799.566257 2020.436665 0.039532 2020.397133 13799.296257 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/88 7.166669 14479.517502 2020.397133 0.037674 2020.359459 14479.247502 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/89 7.714368 15585.796357 2020.359459 0.035000 2020.324459 15585.526357 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/90 8.217273 16601.557630 2020.324459 0.032858 2020.291602 16601.287630 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/91 8.900763 17982.136736 2020.291602 0.030334 2020.261267 17981.866736 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 LIMMAT q 9/10/92 9.705874 19608.401305 2020.261267 0.027818 2020.233449 19608.131305 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 9/10/93 10.206569 20619.652092 2020.233449 0.026454 2020.206995 20619.382092 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 9/10/94 10.070420 20344.332930 2020.206995 0.026811 2020.180184 20344.062930 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 9/10/95 10.696546 21608.950268 2020.180184 0.025242 2020.154942 21608.680268 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 9/10/96 11.024991 22272.190058 2020.154942 0.024490 2020.130453 22271.920058 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 LIMMAT Q 12/31/96 11.329532 22887.132606 2020.130453 0.023832 2020.106621 22886.862606 6.95%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 3/22/94 5.929173 10000.000000 1686.575851 0.000000 1686.575851 10000.000000 20.66%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 3/22/95 6.137345 10351.097868 1686.575851 0.272105 1686.303747 10349.427868 20.66%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 3/22/96 8.436252 14226.083355 1686.303747 0.197955 1686.105791 14224.413355 20.66%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 PARTNR Q 12/31/96 10.000000 16861.057915 1686.105791 0.167000 1685.938791 16859.387915 20.66%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 3/17/87 10.014650 10000.000000 998.537143 0.000000 998.537143 10000.000000 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 3/17/88 10.319857 10304.760526 998.537143 0.156979 998.380164 10303.140526 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/89 10.562833 10545.722945 998.380164 0.153368 998.226796 10544.102945 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 3/17/90 11.634482 11613.851693 998.226796 0.139241 998.087555 11612.231693 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 QUALBD q 3/17/91 12.757872 12733.473271 998.087555 0.126980 997.960575 12731.853271 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/92 13.917758 13889.373770 997.960575 0.116398 997.844176 13887.753770 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/93 15.783929 15749.901635 997.844176 0.102636 997.741540 15748.281635 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/94 16.204383 16167.786056 997.741540 0.099973 997.641567 16166.166056 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/95 16.500701 16461.785210 997.641567 0.098178 997.543390 16460.165210 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 3/17/96 18.128405 18083.870576 997.543390 0.089363 997.454027 18082.250576 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 QUALBD Q 12/31/96 18.990158 18941.809576 997.454027 0.085307 997.368720 18940.189576 6.73%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 SMLCAP q 3/1/95 10.010905 10000.000000 998.910688 0.000000 998.910688 10000.000000 16.28%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 3/1/96 11.585005 11572.385314 998.910688 0.036254 998.874434 11571.965314 16.28%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 SMLCAP Q 12/31/96 13.211266 13196.395850 998.874434 0.031791 998.842643 13195.975850 16.28%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/87 5.888807 10000.000000 1698.136821 0.000000 1698.136821 10000.000000 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/88 5.810044 9866.249650 1698.136821 0.358001 1697.778821 9864.169650 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/89 7.698169 13069.788285 1697.778821 0.270194 1697.508626 13067.708285 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/90 6.964679 11822.602683 1697.508626 0.298650 1697.209977 11820.522683 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/91 9.346041 15862.194027 1697.209977 0.222554 1696.987422 15860.114027 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 TCIGRO q 11/20/92 10.053957 17061.438575 1696.987422 0.206884 1696.780539 17059.358575 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 11/20/93 10.849833 18409.785483 1696.780539 0.191708 1696.588831 18407.705483 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 11/20/94 10.931772 18546.722275 1696.588831 0.190271 1696.398560 18544.642275 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 11/20/95 13.831774 23464.201491 1696.398560 0.150378 1696.248181 23462.121491 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 11/20/96 13.573655 23024.287607 1696.248181 0.153238 1696.094943 23022.207607 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 DIV2 TCIGRO Q 12/31/96 13.282214 22527.896001 1696.094943 0.156600 1695.938343 22525.816001 9.31%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 3/17/87 10.134586 10000.000000 986.720128 0.000000 986.720128 10000.000000 11.99%
- -----------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 3/17/88 10.617116 10476.122064 986.720128 0.410658 986.309471 10471.762064 11.99%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
Table 3 - Diversifier II Variable/Fixed Annuity Contracts Diversifier II - Inception - 3
Average
Q=qualified $30 contract # of units Annual Total
N=nonqualified Beginning # of units fee & deferred at end of Ending return from
- ------------------------------------------------------------------------------------------------------------------------------------
amethod system fund qnonq accdate Unit values Value at $10000 sales load period Value inception
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 DIV2 VALUEQ Q 3/17/89 12.355591 12186.436421 986.309471 0.352877 985.956594 12182.076421 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 3/17/90 12.933143 12751.517624 985.956594 0.337118 985.619476 12747.157624 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 div2 VALUEQ q 3/17/91 13.643553 13447.351556 985.619476 0.319565 985.299911 13442.991556 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 3/17/92 15.775871 15543.964291 985.299911 0.276371 985.023539 15539.604291 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 3/17/93 17.218502 16960.629785 985.023539 0.253216 984.770324 16956.269785 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 3/17/94 18.356274 18076.713885 984.770324 0.237521 984.532803 18072.353885 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 3/17/95 19.989840 19680.653197 984.532803 0.218111 984.314692 19676.293197 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 3/17/96 26.451059 26036.165986 984.314692 0.164833 984.149859 26031.805986 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
3 DIV2 VALUEQ Q 12/31/96 30.819233 30330.743812 984.149859 0.141470 984.008389 30326.383812 11.99%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Wesley S. Williams, Jr., whose signature appears below, does hereby
constitute and appoint Robert E. Chappell and Daniel J. Toran, and each of them
severally, his true and lawful attorneys and agents, with power of substitution
and resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Wesley S. Williams, Jr.
---------------------------
Wesley S. Williams, Jr.
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Norman T. Wilde, Jr., whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and Daniel J. Toran, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Norman T. Wilde, Jr.
------------------------
Norman T. Wilde, Jr.
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Daniel J. Toran, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and Daniel J. Toran, and each of them severally, his
true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Daniel J. Toran
-------------------
Daniel J. Toran
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Alan B. Miller, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and Daniel J. Toran, and each of them severally, his
true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Alan B. Miller
------------------
Alan B. Miller
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Philip E. Lippincott, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and Daniel J. Toran, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Philip E. Lippincott
------------------------
Philip E. Lippincott
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
James A. Hagen, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and Daniel J. Toran, and each of them severally, his
true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ James A. Hagen
------------------
James A. Hagen
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Nancy S. Brodie, whose signature appears below, does hereby constitute and
appoint Robert E. Chappell and Daniel J. Toran, and each of them severally, his
true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Nancy S. Brodie
-------------------
Nancy S. Brodie
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
Robert E. Chappell, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and Daniel J. Toran, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No.2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ Robert E. Chappell
----------------------
Robert E. Chappell
<PAGE>
The Penn Mutual Life Insurance Company
Power of Attorney
-----------------
John F. McCaughan, whose signature appears below, does hereby constitute
and appoint Robert E. Chappell and Daniel J. Toran, and each of them severally,
his true and lawful attorneys and agents, with power of substitution and
resubstitution, to do any and all acts and things and to execute any and all
instruments which said attorney and agents, and each of them, may deem necessary
or advisable or which may be required to enable The Penn Mutual Life Insurance
Company (the "Company") to comply with the Investment Company Act of 1940 and
the Securities Act of 1933, as amended, and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Company's Registration
Statement on Form N-4 (SEC Registration No. 2-77283) pursuant to such Acts,
including specifically, but without limiting the generality of the foregoing,
the power and authority to sign in the name and on behalf of the undersigned as
a trustee and/or officer of the Company such Registration Statement and any and
all amendments and supplements to such Registration Statement filed with the
Securities and Exchange Commission under said Acts, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, and each of them, shall do or cause to be
done by virtue hereof.
Date: April 15, 1997 /s/ John F. McCaughan
---------------------
John F. McCaughan
