INVESTORS
LIFE INSURANCE COMPANY
OF NORTH AMERICA
(Herein called Investors Life)
SEPARATE ACCOUNT I
FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
This report is submitted for the general information of owners of Investors Life
Insurance Company of North America Separate Account I variable annuity
contracts. This report is not authorized for distribution to prospective
purchasers of such contracts unless it is accompanied by a current prospectus.
Investors Life Insurance
Company of North America
Administrative Offices: Austin, TX
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INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT I
COMBINED BALANCE SHEET
06/30/99
ASSETS
Investments at Market Value (Notes 1 and 2):
Portfolios of Putnam Variable Trust:
Putnam Variable Trust Money Market
1,221,829 qualified shares (Cost $1,221,829) $1,221,829
2,156,620 non-qualified shares (Cost $2,156,620) 2,156,620
Putnam Variable Trust Income Fund (formerly U.S. Government and
High Quality Bond)
207,092 qualified shares (Cost $2,809,252) 2,592,795
464,651 non-qualified shares (Cost $6,132,721) 5,817,429
Putnam Variable Trust Growth and Income
662,847 qualified shares (Cost $15,476,655) 19,341,872
83,524 shares owned by Investors Life (Cost $1,950,193) 2,437,243
327,373 non-qualified shares (Cost $7,483,116) 9,552,727
83,704 shares owned by Investors Life (Cost $1,913,320) 2,442,489
Putnam Variable Trust Voyager
16,684 qualified shares (Cost $491,297) 800,138
45,519 shares owned by Investors Life (Cost $1,340,460) 2,183,104
15,685 non-qualified shares (Cost $456,958) 752,227
45,466 shares owned by Investors Life (Cost $1,324,636) 2,180,557
Total Assets $51,479,030
CONTRACT OWNERS' EQUITY
Contract Owners' Equity (Notes 3 and 7):
Putnam Variable Trust Money Market
537,945 qualified accumulation
units outstanding ($2.2712890 Per Unit) $1,221,829
956,308 non-qualified accumulation
units outstanding ($2.2551524 Per Unit) 2,156,620
Putnam Variable Trust Income Fund (formerly U.S. Government and
High Quality Bond)
730,839 qualified accumulation
units outstanding ($3.5476966 Per Unit) 2,592,795
1,659,354 non-qualified accumulation
units outstanding ($3.5058399 Per Unit) 5,817,429
Putnam Variable Trust Growth and Income
2,027,456 qualified accumulation
units outstanding ($9.5399712 Per Unit) 19,341,872
255,477 Investors Life equity ($9.5399712 Per Unit) 2,437,243
1,167,194 non-qualified accumulation
units outstanding ($8.1843522 Per Unit) 9,552,727
298,434 Investors Life equity ($8.1843522 Per Unit) 2,442,489
Putnam Variable Trust Voyager
183,257 qualified accumulation
units outstanding ($4.3662072 Per Unit) 800,138
500,000 Investors Life equity ($4.3662072 Per Unit) 2,183,104
172,485 non-qualified accumulation
units outstanding ($4.3611136 Per Unit) 752,227
500,000 Investors Life equity ($4.3611136 Per Unit) 2,180,557
Contract Owners' Equity $51,479,030
The accompanying notes are an integral part of these financial statements
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INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT I
INDIVIDUAL STATEMENTS OF OPERATIONS
Period Ended June 30, 1999
Putnam Putnam
Variable Trust Variable Trust
Money Money
Market Market
Qualified Non-Qualified
Investment Income:
Dividends $28,263 $48,713
Expenses:
Mortality risk and expense
fees guarantees (Notes 1 and 3) 7,710 12,731
Investment income - net 20,553 35,982
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized capital gain distributions 0 0
Net realized gain (loss) on investments:
Proceeds from sale of shares 132,353 40,637
Cost of shares sold 132,353 40,637
Net realized gain on investments 0 0
Net unrealized gain (loss) on investments 0 0
Net realized and unrealized
gain (loss) on investments 0 0
Net Increase (Decrease) in Net Assets
from Investment Operations $20,553 $35,982
Putnam Variable Putnam Variable
Trust Income Fund Trust Income Fund
(formerly U.S. (formerly U.S.
Gov't and Gov't and
High Quality Bond) High Quality Bond)
Qualified Non-Qualified
Investment Income:
Dividends $171,708 $383,277
Expenses:
Mortality risk and expense
fees guarantees (Notes 1 and 3) 16,005 36,110
Investment income - net 155,703 347,167
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized capital gain distributions 15,104 33,714
Net realized gain (loss) on investments:
Proceeds from sale of shares 164,541 471,136
Cost of shares sold 151,332 426,247
Net realized gain on investments 13,209 44,889
Net unrealized gain (loss) on investments (255,969) (586,348)
Net realized and unrealized
gain (loss) on investments (227,656) (507,745)
Net Increase (Decrease) in Net Assets
from Investment Operations ($71,953) ($160,578)
The accompanying notes are an integral part of these financial statements
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Putnam Variable Putnam Variable
Trust Growth Trust Growth
and Income and Income
Qualified* Non-Qualified*
Investment Income:
Dividends $526,077 $279,419
Expenses:
Mortality risk and expense
fees guarantees (Notes 1 and 3) 129,337 68,952
Investment income - net 396,740 210,467
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized capital gain distributions 1,232,297 654,519
Net realized gain (loss) on investments:
Proceeds from sale of shares 2,127,087 765,448
Cost of shares sold 1,268,615 460,326
Net realized gain on investments 858,472 305,122
Net unrealized gain (loss) on investments (412,026) (73,243)
Net realized and unrealized
gain (loss) on investments 1,678,743 886,398
Net Increase (Decrease) in Net Assets
from Investment Operations $2,075,483 $1,096,865
Putnam Putnam
Variable Trust Variable Trust
Voyager Voyager
Qualified * Non-Qualified *
Investment Income:
Dividends $3,042 $2,913
Expenses:
Mortality risk and expense
fees guarantees (Notes 1 and 3) 16,868 16,119
Investment income - net (13,826) (13,206)
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized capital gain distributions 243,942 233,561
Net realized gain (loss) on investments:
Proceeds from sale of shares 165,172 43,417
Cost of shares sold 84,756 21,500
Net realized gain on investments 80,416 21,917
Net unrealized gain (loss) on investments 57,612 115,869
Net realized and unrealized
gain (loss) on investments 381,970 371,347
Net Increase (Decrease) in Net Assets
from Investment Operations $368,144 $358,141
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
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INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT I
INDIVIDUAL STATEMENTS OF CHANGES IN TOTAL ASSETS
Period Ended June 30, 1999
Putnam Putnam
Variable Trust Variable Trust
Money Money
Market Market
Qualified Non-Qualified
Investment Operations:
Investment income-net $20,553 $35,982
Realized capital gain distributions 0 0
Net realized gain (loss) on investments 0 0
Net unrealized gain (loss) on investments 0 0
Net increase (decrease) in net assets
from investment operations 20,553 35,982
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 1,674 56
Net contract surrenders
and transfers out (Note 3) (121,956) (3,536)
Benefit payments to annuitants (4,008) (24,427)
Net increase (decrease)
from accumulation unit transactions (124,290) (27,907)
Net Increase (Decrease) in Net Assets (103,737) 8,075
Net assets at December 31, 1998 1,325,566 2,148,545
Net assets at June 30, 1999 $1,221,829 $2,156,620
Putnam Variable Putnam Variable
Trust Income Fund Trust Income Fund
(formerly US (formerly US
Gov't and Gov't and
High Quality Bond) High Quality Bond)
Qualified Non-Qualified
Investment Operations:
Investment income-net $155,703 $347,167
Realized capital gain distributions 15,104 33,714
Net realized gain (loss) on investments 13,209 44,889
Net unrealized gain (loss) on investment (255,969) (586,348)
Net increase (decrease) in net assets
from investment operations (71,953) (160,578)
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 1,003 268
Net contract surrenders
and transfers out (Note 3) (140,864) (400,258)
Benefit payments to annuitants (8,583) (35,036)
Net increase (decrease)
from accumulation unit transactions (148,444) (435,026)
Net Increase (Decrease) in Net Assets (220,397) (595,604)
Net assets at December 31, 1998 2,813,192 6,413,033
Net assets at June 30, 1999 $2,592,795 $5,817,429
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
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Putnam Variable Putnam Variable
Trust Growth Trust Growth
and Income and Income
Qualified* Non-Qualified*
Investment Operations:
Investment income-net $396,740 $210,467
Realized capital gain distributions 1,232,297 654,519
Net realized gain (loss) on investments 858,472 305,122
Net unrealized gain (loss) on investments (412,026) (73,243)
Net increase (decrease) in net assets
from investment operations 2,075,483 1,096,865
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 80,669 336
Net contract surrenders
and transfers out (Note 3) (1,988,910) (627,439)
Benefit payments to annuitants (50,075) (69,392)
Net increase (decrease)
from accumulation unit transactions (1,958,316) (696,495)
Net Increase (Decrease) in Net Assets 117,167 400,370
Net assets at December 31, 1998 21,661,948 11,594,846
Net assets at June 30, 1999 $21,779,115 $11,995,216
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
Putnam Putnam
Variable Trust Variable Trust
Voyager Voyager
Qualified * Non-Qualified *
Investment Operations:
Investment income-net ($13,826) ($13,206)
Realized capital gain distributions 243,942 233,561
Net realized gain (loss) on investments 80,416 21,917
Net unrealized gain (loss) on investments 57,612 115,869
Net increase (decrease) in net assets
from investment operations 368,144 358,141
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 31,126 200
Net contract surrenders
and transfers out (Note 3) (150,700) (27,499)
Benefit payments to annuitants (4,523) 0
Net increase (decrease)
from accumulation unit transactions (124,097) (27,299)
Net Increase (Decrease) in Net Assets 244,047 330,842
Net assets at December 31, 1998 2,739,195 2,601,942
Net assets at June 30, 1999 $2,983,242 $2,932,784
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
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INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT I
INDIVIDUAL STATEMENTS OF CHANGES IN TOTAL ASSETS
Year Ended December 31, 1998
Putnam Putnam
Variable Trust Variable Trust
Money Money
Market Market
Qualified Non-Qualified
Investment Operations:
Investment income-net $56,991 $92,738
Realized capital gain distributions 0 0
Net realized gain (loss) on investments 0 0
Net unrealized gain (loss) on investments 0 0
Net increase (decrease) in net assets
from investment operations 56,991 92,738
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 198,798 436,426
Net contract surrenders
and transfers out (Note 3) (394,261) (618,288)
Benefit payments to annuitants (7,075) (34,277)
Net increase (decrease)
from accumulation unit transactions (202,538) (216,139)
Net Increase (Decrease) in Net Assets (145,547) (123,401)
Net assets at December 31, 1997 1,471,113 2,271,946
Net assets at December 31, 1998 $1,325,566 $2,148,545
Putnam Variable Putnam Variable
Trust U.S. Gov't Trust U.S. Gov't
and High Quality and High Quality
Bond Bond
Qualified* Non-Qualified*
Investment Operations:
Investment income-net $126,862 $285,132
Realized capital gain distributions 0 0
Net realized gain (loss) on investments 73,516 72,798
Net unrealized gain (loss) on investments (3,021) 81,679
Net increase (decrease) in net assets
from investment operations 197,357 439,609
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 119,096 15,992
Net contract surrenders
and transfers out (Note 3) (614,443) (612,664)
Benefit payments to annuitants (23,515) (99,141)
Net increase (decrease)
from accumulation unit transactions (518,862) (695,813)
Net Increase (Decrease) in Net Assets (321,505) (256,204)
Net assets at December 31, 1997 3,134,697 6,669,237
Net assets at December 31, 1998 $2,813,192 $6,413,033
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
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Putnam Variable Putnam Variable
Trust Growth Trust Growth
and Income and Income
Qualified* Non-Qualified*
Investment Operations:
Investment income-net $568,935 $314,487
Realized capital gain distributions 1,899,116 1,038,467
Net realized gain (loss) on investments 1,168,549 632,438
Net unrealized gain (loss) on investments (842,800) (471,025)
Net increase (decrease) in net assets
from investment operations 2,793,800 1,514,367
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 217,936 261,081
Net contract surrenders
and transfers out (Note 3) (2,719,592) (1,493,533)
Benefit payments to annuitants (106,044) (128,522)
Net increase (decrease)
from accumulation unit transactions (2,607,700) (1,360,974)
Net Increase (Decrease) in Net Assets 186,100 153,393
Net assets at December 31, 1997 21,475,848 11,441,453
Net assets at December 31, 1998 $21,661,948 $11,594,846
Putnam Putnam
Variable Trust Variable Trust
Voyager Voyager
Qualified * Non-Qualified *
Investment Operations:
Investment income-net ($23,657) ($20,804)
Realized capital gain distributions 141,877 126,718
Net realized gain (loss) on investments 99,378 76,938
Net unrealized gain (loss) on investments 292,657 302,163
Net increase (decrease) in net assets
from investment operations 510,255 485,015
Accumulation Unit Transactions:
Net contract considerations
and transfers in (Note 3) 33,436 229,908
Net contract surrenders
and transfers out (Note 3) (106,935) (148,405)
Benefit payments to annuitants (3,988) 0
Net increase (decrease)
from accumulation unit transactions (77,487) 81,503
Net Increase (Decrease) in Net Assets 432,768 566,518
Net assets at December 31, 1997 2,306,427 2,035,424
Net assets at December 31, 1998 $2,739,195 $2,601,942
The accompanying notes are an integral part of these financial statements
*Includes shares owned by Investors Life.
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INVESTORS LIFE INSURANCE COMPANY OF NORTH AMERICA
SEPARATE ACCOUNT I
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
Note 1. Organization
Investors Life Insurance Company of North America ("Investors Life") established
Investors Life Insurance Company of North America - Separate Account I (the
"Separate Account") as a unit investment trust registered under the Investment
Company Act of 1940, as amended. Operations of the Separate Account commenced on
September 15, 1982. The Separate Account currently has four Divisions each
corresponding to a portfolio of Putnam Variable Trust (formerly known as Putnam
Capital Manager Trust). Prior to the substitution of shares of Putnam Variable
Trust for shares of CIGNA Annuity Funds Group as the underlying funding vehicle
for the Separate Account (the "Substitution"), the Separate Account contained
five divisions. The Substitution was effective as of April 18, 1995, following
approvals of the Substitution by the U.S. Securities and Exchange Commission and
the contractholders having their contract values determined by the affected
portfolios of the CIGNA Annuity Funds Group. In connection with the
Substitution, the Equity Division was merged with the Growth and Income
Division; thereafter, the Equity Division was renamed the Growth and Income
Division II. Each Division contains two subdivisions, one for the allocation of
tax qualified and one for the allocation of non-tax qualified net payments made
under variable annuity contracts.
Net purchase payments to the Separate Account may be allocated to one or more of
the following classes of shares of the Putnam Variable Trust: Putnam Variable
Trust Money Market Fund, Putnam Variable Trust Income Fund (formerly Putnam
Variable Trust U.S. Government and High Quality Bond Fund), Putnam Variable
Trust Growth and Income Fund or Putnam Variable Trust Voyager Fund. The contract
owners' equity of each subdivision of the Separate Account is affected by the
investment results of the appropriate portfolio(s) of shares of Putnam Variable
Trust designated for the subdivision and the mortality risk and expense fees
guarantees assessed on the Separate Account assets (See Note 3), and the
administrative charge deductions.
Under the current provisions of the Internal Revenue Code (the "Code"),
transfers of contract values from one division of the Separate Account to
another division are not subject to current taxation. There can be no assurance
that future changes in the Code will not subject such transfers to current
taxation.
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Note 2. Significant Accounting Policies
Following is a summary of the significant accounting policies of the Separate
Account:
(a) the market value of the investments is based on closing bid prices (net
asset value) at June 30, 1999; (b) investment transactions are accounted for on
the trade date and income is recorded on the ex-dividend date; (c) the cost of
investments sold is determined on the specific identification method.
See Notes 4 and 5 with respect to income taxes.
Note 3. Contract Owner Transactions
Net contract considerations represent gross contributions under variable annuity
contracts less deductions by Investors Life for any applicable premium taxes.
Net contract considerations for the period ended June 30, 1999, were $76,821
after deductions for premium taxes of $0 . Contract owners have limited rights
to transfer their contract values between Separate Account Divisions. For the
period ended June 30, 1999, the total of all transfers was $38,511 . Contract
surrender benefits amounted to $3,345,829 . Annuity benefits amounted to
$196,043 . Investors Life charges a fee to each Separate Account subdivision for
assuming the mortality risk and expense fees guarantees. The daily equivalent of
the annual charge of 1.2% is made against the average net value of the Separate
Account.
Note 4. Income Taxes
Investors Life is taxed as a life insurance company under the Code. The Separate
Account is taxed as a part of Investors Life. Under the current provisions of
the Code, no federal income taxes are payable by Investors Life with respect to
the operations of the Separate Account when such operations are used to
determine the contract values of the Separate Account. Investors Life retains
the right to make adjustments for taxes to Separate Account assets should future
changes in the Internal Revenue Code so warrant.
Note 5. Diversification Requirements
Under the provisions of Section 817(h) of the Code, a variable annuity contract,
other than a contract issued in connection with certain types of employee
benefit plans, will not be treated as an annuity contract for federal tax
purposes for any period for which the investments of the segregated asset
account on which the contract is based are not adequately diversified. The Code
provides that the "adequately diversified" requirement may be met if the
underlying investments satisfy either a statutory safe harbor test or
diversification requirements set forth in regulations issued by the Secretary of
Treasury.
The Internal Revenue Service has issued regulations under section 817(h) of the
Code. Investors Life believes that the Separate Account satisfies the current
requirements of the regulations.
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Note 6. Accumulation Unit Transactions
The changes in the number of accumulation units (the measure of ownership in the
Separate Account) during the period ended June 30, 1999, and units outstanding
at June 30, 1999 were as follows:
Putnam Putnam
Variable Trust Variable Trust
Money Money
Market Market
Qualified Non-Qualified
Units outstanding at December 31, 1998 593,464 968,809
Units purchased and transfers in 745 25
Benefits, surrenders and transfers out (56,264) (12,526)
Units outstanding at June 30, 1999 537,945 956,308
* Includes shares owned by Investors Life
Putnam Variable Putnam Variable
Trust Income Fund Trust Income Fund
(formerly US Gov't (formerly US Gov't
High Quality Bond) High Quality Bond)
Qualified Non-Qualified
Units outstanding at December 31, 1998 772,236 1,781,007
Units purchased and transfers in 173 75
Benefits, surrenders and transfers out (41,570) (121,728)
Units outstanding at June 30, 1999 730,839 1,659,354
* Includes shares owned by Investors Life
Putnam Variable Putnam Variable
Trust Growth Trust Growth
and Income and Income
Qualified* Non-Qualified*
Units outstanding at December 31, 1998 2,497,011 1,557,788
Units purchased and transfers in 9,172 43
Benefits, surrenders and transfers out (223,250) (92,203)
Units outstanding at June 30, 1999 2,282,933 1,465,628
* Includes shares owned by Investors Life
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Putnam Putnam
Variable Trust Variable Trust
Voyager Voyager
Qualified * Non-Qualified *
Units outstanding at December 31, 1998 714,343 679,382
Units purchased and transfers in 7,925 48
Benefits, surrenders and transfers out (39,011) (6,945)
Units outstanding at June 30, 1999 683,257 672,485
* Includes shares owned by Investors Life
The accumulation units for seven of the subdivisions include units applicable to
contract owners who are "on benefit annuitants." At June 30, 1999 the number of
accumulation units, the aggregate value of the subdivisions' equity and the
number of monthly annuity units and value per unit of "on benefit annuitants"
are as follows:
Accumulation Aggregate
Units Value
Putnam Variable Trust
Money Market, Qualified 39,541 $89,810
Putnam Variable Trust
Money Market, Non-Qualified 185,327 $417,941
Putnam Variable Trust
Growth and Income II, Qualified 118,461 $1,130,115
Putnam Variable Trust
Growth and Income II, Non-Qualified 79,492 $650,591
Putnam Variable Trust
Income Fund, Qualified 76,215 $270,388
Putnam Variable Trust
Income Fund, Non-Qualified 167,558 $587,432
Putnam Variable Trust Voyager, Qualified 29,281 $127,847
Monthly Annuity
Annuity Units Unit Value
Putnam Variable Trust Money Market, Qualified 774 $0.8062832
Putnam Variable Trust Money Market, Non-Qualified 4,707 $0.8067143
Putnam Variable Trust
Growth and Income II, Qualified 4,883 $2.0908616
Putnam Variable Trust
Growth and Income II, Non-Qualified 5,706 $2.2434376
Putnam Variable Trust Income Fund, Qualified 1,466 $1.3467681
Putnam Variable Trust Income Fund, Non-Qualified 4,707 $1.3440979
Putnam Variable Trust Voyager, Qualified 462 $1.1925225
