<PAGE>
Registration No. 33-19605
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 10
to
Form S-6
FOR REGISTRATION UNDER THE SECURITIES
ACT OF 1933 OF SECURITIES OF
UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
A. Exact name of Trust: MML Bay State Variable Life Separate Account I
B. Name of Depositor: MML Bay State Life Insurance Company
C. Complete address of 1295 State Street
Depositor's principal Springfield, MA 01111
executive offices:
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485.
- ----------
X on May 1, 1998 pursuant to paragraph (b) of Rule 485.
- ----------
60 days after filing pursuant to paragraph (a) of Rule 485.
- ----------
on (date) pursuant to paragraph (a) of Rule 485.
- ----------
- ----------------------------
STATEMENT PURSUANT TO RULE 24F-2
The Registrant has registered an indefinite number or amount of its variable
life insurance contracts under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. The Rule 24f-2 Notice for Registrant's
fiscal year ending December 31, 1997 was filed on March 20, 1998.
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
1 Cover Page; Basic Questions and Answers About Us and Our Policy
2 Cover Page; The Separate Account
3 Not Applicable
4 Sales and Other Agreements
5 The Separate Account
6 The Separate Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 General Provisions of the Policy; Death Benefits Under the Policies; Free
Look Provision; Account Value and Cash Surrender Value; Policy Loan
Privilege; The Separate Account; The Guaranteed Principal Account;
Charges Under the Policy; Sales and Other Agreements; When We Pay
Proceeds; Payment Options; Our Rights; Your Voting Rights; Basic
Questions and Answers About Us and Our Policy
11 The Separate Account
12 The Separate Account; Sales and Other Agreements
13 The Separate Account; Charges Under the Policy
14 Basic Questions and Answers About Us and Our Policy; The Separate
Account; Sales and Other Agreements
15 Basic Questions and Answers About Us and Our Policy; General Provisions
of the Policy
16 The Separate Account; Investment Return
17 Cash Surrender Value; Withdrawal
18 The Separate Account
19 Service Agreement; Records and Reports
20 Not Applicable
21 Policy Loan Privilege
22 Not Applicable
23 Bonding Arrangement
24 Limits on Our Right to Challenge the Policy; Suicide; Misstatement of Age
or Sex; Assignment; Beneficiary; Our Rights; The Separate Account
25 Basic Questions and Answers About Us and Our Policy
26 Not Applicable
27 Basic Questions and Answers About Us and Our Policy
28 Directors and Principal Officers of MML Bay State Life Insurance Company
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
29 Basic Questions and Answers About Us and Our Policy
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Basic Questions and Answers About Us and Our Policy
36 Not Applicable
37 Not Applicable
38 Sales and Other Agreements
39 Sales and Other Agreements
40 Sales and Other Agreements
41 Sales and Other Agreements
42 Not Applicable
43 Sales and Other Agreements
44 The Separate Account; Investment return; Charges for Federal Income Tax;
General Provisions of the Policy
45 Not Applicable
46 The Separate Account; Investment Return
47 The Separate Account
48 The Separate Account; Investment Return
49 Not Applicable
50 The Separate Account
51 Cover Page; Basic Questions and Answers About Us and Our Policy
52 The Separate Account; Our Rights
53 Federal Income Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Report of Independent Accountants and Financial Statements
<PAGE>
MML BAY STATE LIFE INSURANCE COMPANY
Variable Life Plus
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY*
ISSUED BY MML BAY STATE LIFE INSURANCE COMPANY
This Prospectus describes a flexible premium variable whole life insurance
policy being offered by MML Bay State Life Insurance Company ("MML Bay State").
The Policy provides lifetime insurance protection and has flexibility with
respect to premium payments and Death Benefits. Each Policyowner also has
several investment alternatives. Allocations of premium may be made among a
Guaranteed Principal Account ("GPA") and one or more of the four divisions (the
Equity Division, the Money Market Division, the Managed Bond Division, and the
Blend Division) of the Variable Life Plus segment of MML Bay State Variable Life
Separate Account I (the "Separate Account"), after certain deductions have been
made.
The Death Benefit may, and Cash Surrender Value of a Policy will, vary up or
down depending on the investment performance of the Separate Account divisions.
While there is no guaranteed minimum Cash Surrender Value for a Policy invested
in the Separate Account, a Policy's Death Benefit will never be less than its
Selected Face Amount. Furthermore, the Policy will not lapse provided there are
sufficient funds available to pay certain monthly charges.
The divisions of the Separate Account have distinct investment portfolios. The
Equity Division of the Separate Account invests in shares of MML Equity Fund.
This fund invests primarily in common stocks and other equity securities. The
Money Market Division invests in shares of MML Money Market Fund. This fund
invests primarily in short-term debt instruments. The Managed Bond Division
invests in shares of MML Managed Bond Fund. This fund invests primarily in
publicly issued, readily marketable, fixed-income securities. The Blend Division
invests in shares of MML Blend Fund. This fund invests in a portfolio of common
stocks and other equity-type securities, bonds and other debt securities with
maturities generally exceeding one year, and money market instruments and other
debt securities with maturities generally not exceeding one year.
All Policies are serviced through MML Bay State's Principal Administrative
Office. The Principal Administrative Office is located in Springfield,
Massachusetts. The mailing address is MML Bay State Life Insurance Company, 1295
State Street, Springfield, Massachusetts 01111. The telephone number is (413)
788-8411.
May 1, 1998
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE PROSPECTUS OF MML SERIES
INVESTMENT FUND.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FURTHER REFERENCE.
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR
A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO
OR COMPARABLE TO A MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN.
REPLACING EXISTING INSURANCE WITH THE POLICY DESCRIBED IN THIS PROSPECTUS MAY
NOT BE TO YOUR ADVANTAGE.
This Prospectus does not constitute an offer of, or solicitation of an offer to
acquire, any interest or participation in the flexible premium variable whole
life insurance policies offered by this Prospectus in any jurisdiction to anyone
to whom it is unlawful to make such an offer or solicitation in such
jurisdiction.
* Title may vary in some jurisdictions.
1
<PAGE>
Table Of Contents
Page
----
Definition of Terms .................................................. 3
Basic Questions and Answers About Us
and Our Policy .................................................... 4
What are MML Bay State and MassMutual? ............................... 4
What variable life insurance policy were we offering? ................ 4
Availability ......................................................... 4
What is the Account Value of the Policy? ............................. 4
What are the divisions of the Separate Account? ...................... 4
What is the Guaranteed Principal Account? ............................ 4
Is the level of the Death Benefit guaranteed? ........................ 4
Is the Death Benefit subject to income taxes? ........................ 5
Does the Policy have a Cash Surrender Value? ......................... 5
What is a modified endowment contract? ............................... 5
Can this policy become a modified endowment
contract? ........................................................ 5
What about Premiums? ................................................. 5
Premium Payments ..................................................... 5
When are Premiums put into the Guaranteed
Principal Account or the Separate Account? ....................... 5
How can the Net Premium and the Account Value of the
Policy be allocated among the Guaranteed Principal
Account and the Separate Account divisions? ...................... 5
How long will the Policy remain in force? ............................ 5
Are there charges against the Policy? ................................ 6
What is the loan privilege and how does a loan
affect the Policy's Death Benefit and Cash
Surrender Value? ................................................. 6
Do I have a right to cancel? ......................................... 6
Can the Policy be exchanged for a fixed benefit policy? .............. 6
Charges Under the Policy ............................................. 6
Deductions from Premiums ............................................. 6
Sales Charge ....................................................... 6
State Premium Tax Charge ........................................... 6
Account Value Charges ................................................ 7
Monthly Administrative Charge ...................................... 7
Charge for Cost of Insurance Protection ............................ 7
Separate Account Charges ............................................. 7
Charges for Mortality and Expense Risks ............................ 7
Charges for Federal Income Taxes ................................... 7
Surrender Charges .................................................... 7
The Separate Account ................................................. 8
Investments of the Separate Account .................................. 8
Rates of Return ...................................................... 9
Performance Illustration ............................................. 10
General Provisions of the Policy ..................................... 13
Premiums ............................................................. 13
Planned Premiums ..................................................... 13
The Minimum Initial Premium .......................................... 13
Minimum and Maximum Premium Payments ................................. 13
Termination .......................................................... 13
Grace Period ......................................................... 13
Death Benefit Under the Policy ....................................... 13
Selected Face Amount Changes ......................................... 14
Account Value and Cash Surrender Value ............................... 14
Account Value ........................................................ 14
Investment Return .................................................... 14
Cash Surrender Value ................................................. 14
Withdrawals .......................................................... 14
Policy Loan Privilege ................................................ 15
Source of Loan ....................................................... 15
If Loans Exceed the Policy Account Value ............................. 15
Interest ............................................................. 15
Repayment ............................................................ 15
Interest on Loaned Value ............................................. 15
Effect of Loan ....................................................... 15
Free Look Provision .................................................. 15
Your Voting Rights ................................................... 16
Our Rights ........................................................... 16
Directors and Principal Officers of
MML Bay State .................................................... 16
The Guaranteed Principal Account ..................................... 18
Federal Income Tax Considerations .................................... 18
MML Bay State-Tax Status ............................................. 18
Policy Proceeds, Premiums and Loans .................................. 18
Modified Endowment Contracts ......................................... 19
Qualified Plans ...................................................... 20
Diversification Standards ............................................ 20
Additional Provisions of the Policy .................................. 20
Reinstatement Option ................................................. 20
Payment Options ...................................................... 21
Fixed Amount Payment Option .......................................... 21
Fixed Time Payment Option ............................................ 21
Interest Payment Option .............................................. 21
Lifetime Payment Option .............................................. 21
Joint Lifetime Payment Option ........................................ 21
Joint Lifetime Payment Option with Reduced
Payments ......................................................... 21
Withdrawal Rights under Payment Options .............................. 21
Additional Benefits You Can Get by Rider ............................. 21
Waiver of Monthly Charges Rider .................................... 21
Accidental Death Benefit Rider ..................................... 21
Insurability Protection Rider ...................................... 21
Accelerated Death Benefit Rider .................................... 21
Beneficiary .......................................................... 22
Assignment ........................................................... 22
Limits on Our Right to Challenge the Policy .......................... 22
Misstatement of Age or Sex ........................................... 22
Suicide .............................................................. 22
When We Pay Proceeds ................................................. 22
Records and Reports .................................................. 22
Sales and Other Agreements ........................................... 22
Commissions Schedule ................................................. 23
Bonding Arrangement .................................................. 23
Legal Proceedings .................................................... 23
Experts .............................................................. 23
Financial Statements ................................................. 23
Appendix A
Illustrations of Death Benefits, Cash Surrender Values
and Accumulated Premiums ......................................... A
2
<PAGE>
Definition Of Terms
Account Value: The sum of the Variable Account Value and the Fixed Account Value
of the Policy.
Beneficiary: The person or persons specified by the Policyowner to receive
insurance proceeds after the Insured dies.
Cash Surrender Value: The amount payable to a Policy-owner upon surrender of the
Policy. It is equal to the Account Value less any surrender charges and less any
Policy Debt.
Death Benefit: The amount payable to the named Beneficiary when the Insured
dies. It equals the greater of the Selected Face Amount or the Minimum Face
Amount in effect on the date of death less Policy Debt, plus unearned or minus
unpaid monthly deductions.
Effective Annual Rate of Return: The interest rate which, if applied to the
value of an investment at the beginning of a stated period and compounded
annually, would result in the value of that investment at the end of the period.
Fixed Account Values: Account Values which are allocated to the Guaranteed
Principal Account.
Insured: Person whose life this Policy insures.
Issue Date: The same as the Policy Date.
Minimum Face Amount: An amount equal to Account Value times the Minimum Face
Amount percentage. These percentages depend upon the Insured's age, sex, and
smoking classification.
Monthly Calculation Date: The date on which the monthly deductions under the
Policy are deducted from the Account Value. The first Monthly Calculation Date
will be the Policy Date, and subsequent monthly deductions will be on the same
date of each succeeding calendar month.
Net Premium: Premium paid less sales expense and premium tax charges.
Policy: The flexible premium variable whole life insurance policy offered by MML
Bay State that is described in this Prospectus.
Policy Anniversary: The anniversary of the Policy Date.
Policyowner: The person who owns the Policy.
Policy Date: The date shown in the Policy which is the starting point for
determining Policy Anniversary Dates, Policy Years and Monthly Calculation
Dates.
Policy Debt: The amount of the obligation from a Policyowner to MML Bay State
from outstanding loans to the Policyowner under the Policy. This amount includes
any loan interest accrued to date.
Policy Year: The twelve month period commencing with the Policy Date, and each
twelve month period thereafter.
Premiums: The total dollar amount paid for the Policy.
Premium Tax: The amount of premium tax, if any, charged by a state or other
governmental authority.
Principal Administrative Office: The administrative office of MML Bay State,
which is located at: 1295 State Street, Springfield, Massachusetts 01111.
Register Date: The date the Company allocates the initial premium less certain
deductions to the Guaranteed Principal Account and/or the divisions of the
Separate Account. The Register Date cannot be prior to the Policy Date.
Selected Face Amount: The amount of insurance coverage originally chosen or as
subsequently changed by the Policyowner.
Separate Account: The segregated asset account called "MML Bay State Variable
Life Separate Account I" established by MML Bay State under the laws of
Missouri, maintained under the laws of Connecticut and registered as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act"). The Separate Account is used to receive and invest premiums for this
Policy and for other variable life insurance policies issued by MML Bay State.
For each such policy there is a designated segment of the Separate Account.
Surrender: A surrender by the Policyowner of all rights under the Policy in
exchange for the entire Cash Surrender Value under the Policy.
Valuation Date: Any date on which the value of the net assets of the shares of
the Funds is determined. Generally, this will be any day on which the New York
Stock Exchange is open for trading.
Valuation Period: The period, consisting of one or more days, from one Valuation
Time to the next succeeding Valuation Time.
Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. New York time) on a Valuation Date. All actions which are to be
performed on a Valuation Date will be performed as of the Valuation Time.
Variable Account Values: Account Values which are allocated to any of the
divisions of the Separate Account.
Withdrawal: A withdrawal of Account Value by the Policyowner. A withdrawal is
subject to certain limitations, and may not be made until the Policy has been in
force for six months.
3
<PAGE>
Basic Questions and Answers
About Us and Our Policy
What are MML Bay State and MassMutual? MML Bay State was organized under the
laws of Missouri in 1894 and is now domiciled in Connecticut. MML Bay State
currently is licensed to transact life (including flexible premium variable
whole life), accident, and health insurance business in the District of Columbia
and all states except New York.
Massachusetts Mutual Life Insurance Company ("MassMutual") purchased all of the
issued and outstanding stock of Western Life Insurance Company of America on
December 30, 1981. Our name was changed to MML Bay State Life Insurance Company
in March of 1982.
As of December 31, 1997, MassMutual had estimated total assets under management
of $152.5 billion and total unconsolidated MassMutual assets in excess of $57.5
billion.
What variable life insurance policy were we offering? This Prospectus describes
a Flexible Premium Variable Whole Life Insurance Policy (the "Policy") that was
offered by MML Bay State. The Policy is no longer offered for sale to the
public. Policyowners may continue, however, to make premium payments under the
Policies.
We issued this Policy to provide for a Death Benefit, Cash Surrender Value, loan
privileges and flexible premiums. It is called "flexible" because the
Policyowner, subject to certain limitations, may select the timing and amount of
premium payments and adjust the Death Benefit by increasing or decreasing the
Selected Face Amount. It is called "variable" because, unlike the fixed benefits
of a traditional whole life policy, the Death Benefits may, and Cash Surrender
Values most likely will vary to the extent that Account Value under the Policy
is allocated to the division(s) of the Separate Account.
The Policy is a legal contract between the Policyowner and MML Bay State. The
entire contract consists of the application for the Policy (the "Application")
and the Policy, which includes any riders the Policy has.
Availability. The Policy was available to Policyowners who were purchasing a
Policy in connection with retirement plans which qualify for tax benefits under
the Internal Revenue Code (the "qualified market") and other Policyowners (the
"nonqualified market"). The minimum Selected Face Amount of a Policy you could
have applied for varied with the Insured's age. In the nonqualified market, the
minimum Selected Face Amount is $50,000 for ages 0-35; $40,000 for ages 36-40;
$30,000 for ages 41-45; $20,000 for ages 46-50; and $15,000 for ages 51 or
above. Increases in Selected Face Amounts must be for at least $15,000. In the
qualified market or when simplified underwriting methods are used, the minimum
Selected Face Amount is $15,000 for ages 0-55; $14,000 for age 56; $13,000 for
age 57; $12,000 for age 58; $11,000 for age 59; and $10,000 for ages 60 and
above. Increases must be for at least $5,000. The Insured may not be older than
age 82 as of the Policy Date or the date of any increase in Selected Face
Amount.
In Massachusetts and Montana, this Policy was issued on a unisex basis, and any
reference in this Prospectus which makes a distinction based on the sex of the
Insured shall be disregarded. Likewise, all references to the mortality tables
applicable to this Policy are deleted for Massachusetts and Montana Policies and
"1980 Commissioners Standard Ordinary Mortality Table B, Smoker or Non-Smoker"
are substituted therefor.
What is the Account Value of the Policy? The Account Value is determined by the
amount and frequency of premium payments, the investment experience of the
divisions chosen by the Policyowner (the Variable Account Value), the interest
earned on Account Value allocated to the GPA (the Fixed Account Value), and any
withdrawals or charges imposed in connection with the Policy. The Policyowner
bears the investment risk associated with appreciation or depreciation in value
of the underlying assets of the Separate Account divisions.
What are the divisions of the Separate Account? The designated segment of the
Separate Account has four divisions: the Equity Division, the Money Market
Division, the Managed Bond Division and the Blend Division. Each division of the
Separate Account invests only in the shares of a single investment company or a
single series of an investment company. The divisions are designed to provide
money to pay benefits under the Policy but they do not guarantee a minimum
interest rate nor guarantee against asset depreciation.
The Equity Division invests in shares of MML Equity Fund. The Money Market
Division invests in shares of MML Money Market Fund. The Managed Bond Division
invests in shares of MML Managed Bond Fund. The Blend Division invests in shares
of MML Blend Fund. MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund
and MML Blend Fund (the "Funds") are separate series of shares of MML Series
Investment Fund (the "Trust"), a no-load, open-end, management investment
company. MassMutual (or its wholly-owned subsidiaries) acts as investment
manager for the Trust.
What is the Guaranteed Principal Account ("GPA")? As an alternative to the
Separate Account, you may allocate or transfer all or part of your funds to the
GPA. Such amounts become part of MML Bay State's general account assets. The
Policyowner is not entitled to share in the investment experience of those
assets. Rather, MML Bay State guarantees a rate of return on the allocated
amount equal to the greater of: (a) 4% and (b) the rate determined by the
Treasury Bill Index. Although MML Bay State is not obligated to credit interest
at a rate higher than this minimum, it may declare a higher rate applicable for
such periods as it deems appropriate. For details see THE GUARANTEED PRINCIPAL
ACCOUNT.
Is the level of the Death Benefit guaranteed? So long as the Policy remains in
force, the Death Benefit will be the greater of the Policy's Selected Face
Amount or the Minimum Face Amount in effect on the date of death of the Insured.
Death Benefit proceeds will, however, be reduced by
4
<PAGE>
any outstanding Policy Debt, plus or minus unearned or unpaid monthly
deductions, or increased by any additional benefits added by rider.
Is the Death Benefit subject to income taxes? A Death Benefit paid under a
Policy may be fully excludable from the gross income of the Beneficiary for
federal income tax purposes.
For details see FEDERAL INCOME TAX CONSIDERATIONS - Policy Proceeds, Premiums
and Loans.
Does the Policy have a Cash Surrender Value? The Policyowner may surrender the
Policy at any time and receive its Account Value less any Policy Debt less any
applicable surrender charge. Withdrawals are also allowed subject to certain
restrictions. The Cash Surrender Value of a Policy fluctuates with the
investment performance of the Separate Account divisions in which the Policy has
Account Value and the amount held in the GPA. It may increase or decrease daily.
For federal income tax purposes, the Policyowner usually is not taxed on
increases in the Cash Surrender Value until fully surrendering the Policy. In
connection with certain withdrawals of Account Value and loans on the Policy,
however, the Policyowner may be taxed on all or a part of the amount
distributed.
For details see CASH SURRENDER VALUE and FEDERAL INCOME TAX CONSIDERATIONS -
Policy Proceeds, Premiums and Loans.
What is a modified endowment contract? A modified endowment contract (as defined
by the Internal Revenue Code) is a life insurance policy under which the
premiums paid during the first seven contract years exceed the cumulative
premiums payable under a policy providing for guaranteed benefits upon the
payment of seven level annual premiums. Certain changes to the policy can
subject it to retesting for a new seven-year period. During the Insured's
lifetime, distributions from a modified endowment contract, including collateral
assignments, loans and withdrawals, are taxable to the extent of any income in
the contract and may also incur a penalty tax if the Policyowner is not 59 1/2.
Can this Policy become a modified endowment contract? Since this Policy permits
flexible premium payments, it may become a modified endowment contract. The
Company currently has the systems capacity to test a Policy at issue to
determine whether it will be classified as a modified endowment contract. This
at-issue test examines the Policy for the first seven contract years, based on
the Policy application and the initial premium requested, and based on the
assumption that there were no increases in premium during the period. The
Company has instituted procedures to monitor whether a Policy may become a
modified endowment contract after issue.
For details see FEDERAL INCOME TAX CONSIDERATIONS - Modified Endowment
Contracts.
What about Premiums? There are two concepts which are important to the
discussion of premiums for this Policy: the minimum initial premium; and the
planned premium. These terms are used throughout this Prospectus.
A minimum initial premium was payable either at the time you submitted your
Application or at some time prior to the delivery of the Policy. The planned
premium is elected on the Application and becomes the basis for the Policy's
premium billing. The amount and timing originally selected in the Application
may be changed at any time upon written request.
For details see GENERAL PROVISIONS OF THE POLICY - Premiums.
Premium Payments. You may make premium payments by mailing your check, clearly
indicating your name and policy number, to the address indicated on the billing
notice.
Wire Transfer. You may also make premium payments by instructing your bank to
wire funds to:
Chase Manhattan Bank, New York, New York
ABA #021000021
MML Bay State Life Account #910-2-481026
Ref: Contract #
Name: (Contract Owner)
When are Premiums put into the Guaranteed Principal Account or the Separate
Account? The Register Date is the day we received the first premium under the
Policy or the day you provided us with a completed Part 1 of the Application,
whichever is latest. On the Register Date, we put the premium paid less certain
deductions (the "Net Premium") into the GPA and/or one or more of the divisions
of the Separate Account as you chose. (Deductions are described in greater
detail in Are there charges against the Policy?)
How can the Net Premium and the Account Value of the Policy be allocated among
the Guaranteed Principal Account and the Separate Account divisions? When you
applied for a Policy you chose the percentages of your premiums to be allocated
to the divisions of the Separate Account and the GPA. You were allowed to choose
any whole percentages as long as the total was 100%. The allocation of future
net premiums may be changed at any time without charge.
The Account Value of the Policy may be transferred between the GPA or divisions
of the Separate Account by written request. The Account Value may be transferred
by amount or by percentage, subject to restrictions.
How long will the Policy remain in force? The Policy does not automatically
terminate for failure to pay planned premiums. Payment of these amounts does not
guarantee the Policy will remain in force. The Policy terminates only when the
Account Value less any Policy Debt is insufficient to pay the monthly deduction,
and a grace period expires without sufficient payment.
5
<PAGE>
Are there charges against the Policy? Certain charges are made against the
Policy. Two charges are deducted from each premium payment. A sales charge of 5%
is used to partially cover sales expenses. A deduction of 2.5% is also made for
state premium taxes. Each premium, net of these charges, is allocated to the GPA
or the divisions of the Separate Account and becomes a part of the Account
Value.
For details see DEDUCTIONS FROM PREMIUMS.
Certain monthly charges are deducted directly from the Policy's Account Value on
each Monthly Calculation Date. There will be a monthly deduction equal to the
sum of a mortality charge, the cost of optional benefits added by rider and an
administrative charge.
Some deductions are made on a daily basis against the assets of the Separate
Account divisions. A daily charge calculated at an annual rate to .40% of the
value of the assets of each division is charged for mortality and expense risks.
Similarly, tax assessments are calculated daily. Currently, we are not making
any charges for income taxes, but we may make charges in the future against the
Separate Account divisions for federal income taxes attributable to them.
Cost of insurance charges under Policies insuring healthy lives are generally
higher when the simplified underwriting procedure is used than if the Policy is
fully underwritten. Cost of insurance charges for fully underwritten Policies
will not exceed the maximum charges established by the 1980 Commissioners
Standard Ordinary Mortality Tables. So cost of insurance charges for Policies
issued under simplified underwriting procedures will not exceed 125% of the
maximum charges so established for comparable fully underwritten Policies.
There are also certain charges when a Policyowner surrenders a Policy, decreases
the Policy's Selected Face Amount or makes a Withdrawal of Account Value. Upon
surrender or a decrease in Selected Face Amount, a surrender charge is assessed.
The charge has a sales load component and an administrative component. The
surrender charge is deducted from the Account Value at the time of surrender or
decrease.
Withdrawals of Account Value are permitted subject to certain restrictions. A
charge equal to the lesser of $25 or 2.0% of the amount withdrawn is imposed for
each Withdrawal.
For details see SEPARATE ACCOUNT CHARGES, and FEDERAL INCOME TAX CONSIDERATIONS.
What is the loan privilege and how does a loan affect the Policy's Death Benefit
and Cash Surrender Value? While the Policy is in force after the first Policy
Year, a loan may be made on the Policy, provided that total Policy Debt does not
exceed our limit. This limit is 90% (100% where required by law) of the total of
the Policy's current Account Value less the then applicable surrender charge.
Do I have a right to cancel? Under the Free Look Provision the Policyowner has a
limited right to return the Policy and receive a refund. This right expires on
the latest of the following:
. Ten days after the date you receive the Policy; or
. Ten days after we mail you a Notice of Withdrawal Right; or
. 45 days after Part 1 of the Policy Application was signed.
You have a similar right after an increase in Selected Face Amount, but it
applies only to the increase.
The Policy may be returned to our Principal Administrative Office, to any of our
agency offices, or to the agent who sold you the Policy. For details see FREE
LOOK PROVISION.
Can the Policy be exchanged for a fixed benefit policy? You have a right to
transfer all of your Account Value into the GPA at any time after issue. The
transfer will take effect when we receive a suitable written request.
For details see EXCHANGE PRIVILEGE.
CHARGES UNDER THE POLICY
Certain charges are deducted to compensate MML Bay State for providing the
insurance benefits under the Policy and any riders, for administering the
Policy, for assuming certain risks, and for incurring certain expenses in
distributing the Policy.
DEDUCTIONS FROM PREMIUMS
Prior to the allocation of the premium payment to the Account Value, a deduction
is made for sales expenses and premium taxes.
Sales Charge. The sales charge component of the premium deduction is 5.0% and
does not vary by year or amount paid. The amount of the sales charge in a Policy
Year is not necessarily related to our actual sales expenses for that particular
year. To the extent that sales expenses are not covered by the sales charge and
the sales load surrender charge (for a discussion of the sales load surrender
charge, see SURRENDER CHARGES), they will be recovered from MML Bay State
surplus, including any amounts derived from the mortality and expense risk
charge or the cost of insurance charge. For a discussion of the commissions paid
under the Policy, see SALES AND OTHER AGREEMENTS Commissions Schedule.
State Premium Tax Charge. Various states and jurisdictions impose a tax on
premiums received by insurance companies. These charges vary from state to
state. We deduct 2.5% of each premium to cover state premium taxes. During 1997,
the aggregate amount of such deductions from premiums was $2,317,369 for sales
charges and $1,158,685 for state premium tax charges.
6
<PAGE>
ACCOUNT VALUE CHARGES
On each Monthly Calculation Date, a monthly administrative charge, a cost of
insurance charge, and a rider charge for the cost of any additional riders are
deducted from the Variable Account Value and Fixed Account Value in proportion
to the non-loaned Account Value in the Separate Account and the GPA.
Monthly Administrative Charge. Each month a $4 per Policy charge for
nonqualified Policies and $5.25 per Policy charge for qualified Policies and
Policies issued under our simplified underwriting procedures is deducted to
compensate MML Bay State for costs incurred in providing certain administrative
services including premium collection, recordkeeping, processing claims and
communicating with Policyowners. This charge is not designed to produce a
profit. Although this charge may increase or decrease, it will never exceed $8
per month. During 1997, the aggregate amount of such charges was
$1,344,921.
Charge for Cost of Insurance Protection. A charge for the cost of insurance
protection is deducted on each Monthly Calculation Date and is based on the sex,
smoker class, underwriting procedures class, rating class and attained age of
the Insured. The charge varies monthly because it is determined by multiplying
the applicable cost of insurance rates by the amount at risk each Policy month.
Charges for any optional benefits added by rider are also deducted from the
Account Value.
When there is an increase in Selected Face Amount, the increased segment may
have different ratings than the original contract amount. Each segment has its
own such issue age, cut-off premium level, mortality charges, surrender charges,
and commissions. Elected decreases in Selected Face Amount reduce or cancel
prior segments and their associated cost of insurance rates on a
last-in-first-out basis. During 1997, the aggregate amount of deductions for the
charge for cost of insurance protection was $17,207,408.
SEPARATE ACCOUNT CHARGES
Charges for Mortality and Expense Risks. We charge the Separate Account
divisions for the mortality and expense risks we assume. We deduct a daily
charge at an effective annual rate of 0.40% of the value of each division's
assets that come from the Policy. The aggregate amount of such charges, which
are paid quarterly, against the Separate Account divisions in 1997 was
$863,352.
The mortality risk we assume is that the group of lives insured under our
Policies may, on average, live for shorter periods of time than we estimated.
The expense risk we assume is that our costs of issuing and administering
Policies may be more than we estimated.
If all the money we collect from this charge is not needed to cover Death
Benefits and expenses, it will be our gain and will be used for any proper
purpose, including payment of sales commissions. Conversely, even if the money
we collect is insufficient, we will provide for all Death Benefits and expenses.
Charges for Federal Income Taxes. Although we do not currently make any charge
against the Separate Account divisions for federal income taxes attributable to
them, we may make such a charge eventually in order to provide for the future
federal income tax liability of the Separate Account divisions. For more
information on charges for federal income taxes, see FEDERAL INCOME TAX
CONSIDERATIONS - MML Bay State - Tax Status.
SURRENDER CHARGES
If you surrender the Policy (or the surrender value is applied under a
settlement option), we will deduct an amount equal to the sum of the surrender
charges for the original Selected Face Amount and all increases in the Selected
Face Amount. These charges have both an Administrative and Sales Load component.
The surrender charge at any time is the sum of these parts.
The Administrative Surrender Charge is determined separately for each insurance
segment in force. The charge begins at $5 per $1000 of the Policy's Selected
Face Amount and grades down over 10 years to zero. This portion of the charge
varies only by the Selected Face Amount and duration of the Policy. It is to
partially reimburse MML Bay State for expenses it incurs in processing
Applications for the Policies, including conducting medical examinations and
determining insurability.
The Sales Load Surrender Charge is also determined separately for each insurance
segment in force and is based on the surrender charge band for that segment. The
surrender charge band set forth in the Policy is an amount generally calculated
on the basis of the Selected Face Amount and varies by the age and sex of the
Insured at the time of the purchase. Once determined, the band for a segment is
not changed as the result of any subsequent decreases in Selected Face Amount.
During the first 10 years following the issue of a segment, the charge is equal
to 25% of the premiums paid for that segment up to the surrender change band for
that segment, plus 5% of premiums paid in excess of one band but less than two
bands, plus 4% of premiums in excess of two but less than three bands. In each
case the surrender charge is in addition to the 5% sales charge deducted from
each premium. Assuming a segment is surrendered during the first 10 years, the
total sales charge is, therefore, equal to 30% of the premiums paid for that
segment up to the band for that segment, plus 10% of premiums paid in excess of
one band but less than two bands, plus 9% of premiums in excess of two but less
than three bands, and 5% of all subsequent payments.
Surrender Charge Bands Per $1,000
of Selected Face Amount
Age 25 Age 40 Age 55
------ ------ ------
$6.12 $11.90 $24.66
The Sales Load Surrender Charge, as calculated above, remains level for the
first 10 years. In years 11 through 15, it reduces to zero in accordance with
the percentages set forth in your Policy. Premiums paid are allocated to each
insurance segment in proportion to the respective guideline annual
7
<PAGE>
premiums. This charge is designed to reimburse MML Bay State for expenses it
incurs in distributing the Policies, prospectuses and sales literature.
Surrender charges for an insurance segment are also deducted when insurance
segments are cancelled under a decrease in Selected Face Amount. Insurance
segments are cancelled on a last purchased, first surrendered basis. If only a
portion of an insurance segment is cancelled, a pro rata portion of the full
surrender charge for the segment will be imposed.
A charge is assessed for each Withdrawal under the Policy. This charge is equal
to the lesser of $25 or 2% of the amount withdrawn from the Policy. It is
deducted from the amount withdrawn and the balance goes to the Policyowner. A
Withdrawal will not be allowed if to do so would reduce the Account Value to an
amount less than the cumulative sum of the Policy's minimum planned premiums to
date.
THE SEPARATE ACCOUNT
The Separate Account was established on June 9, 1982 as a separate investment
account of MML Bay State by MML Bay State's Board of Directors in accordance
with the provisions of Chapter 376 of the Missouri Statutes. The Separate
Account is registered under the Investment Company Act of 1940 as a unit
investment trust. Registration does not involve supervision of the management or
investment practices or policies of the Separate Account or of MML Bay State.
Under Missouri law, however, both MML Bay State and the Separate Account are
subject to regulation by the Division of Insurance of the State of Missouri. A
designated segment of the Separate Account is also used to receive and invest
premiums for other variable life insurance policies issued by MML Bay State.
Although the assets of the Separate Account are assets of MML Bay State, that
portion of the Separate Account assets equal to the reserves and other
liabilities of the Separate Account attributable to the Policies may not be used
to satisfy any obligations that may arise out of any other business we may
conduct. They may, however, be subject to liabilities arising from other
variable life insurance policies which are funded by the Separate Account. In
addition, we may from time to time at our discretion transfer to our general
account those assets which exceed the reserves and other liabilities of the
Separate Account. Such transfers will not adversely affect the Separate Account.
Income, realized gains or losses and unrealized gains or losses from each
division of the Separate Account are credited to or charged against that
division without regard to any of our other income, gains or losses.
MML Bay State may accumulate in the Separate Account the charge for expense and
mortality risks, monthly charges assessed against the Policy and investment
results applicable to those assets that are in excess of net assets supporting
the Policies.
Investments of the Separate Account. The Separate Account has four divisions
attributable to the Policy, each of which invests in the shares of a single Fund
of the Trust. The divisions of the Separate Account are:
. The Equity Division - Amounts credited to this division are invested in shares
of MML Equity Fund, or its successor;
. The Money Market Division - Amounts credited to this division are invested in
shares of MML Money Market Fund, or its successor;
. The Managed Bond Division - Amounts credited to this division are invested in
shares of MML Managed Bond Fund, or its successor; and
. The Blend Division - Amounts credited to this division are invested in shares
of MML Blend Fund, or its successor.
The shares of the underlying Fund purchased by each division of the Separate
Account will be held by MML Bay State as custodian for the Separate Account.
The Trust is an open-end, diversified, management investment company registered
under the Investment Company Act of 1940, consisting of the four Funds described
above, each of which has its own investment objectives and policies. MassMutual
established the Trust for the purpose of providing a vehicle for the investment
of assets of various separate investment accounts, including the Separate
Account, established by MassMutual and life insurance company subsidiaries of
MassMutual. Shares of the Funds are not offered to the general public, but
solely to separate investment accounts established by MassMutual and its life
insurance company subsidiaries. The Separate Account purchases and redeems
shares of the Funds at their net asset value which is determined at the time of
the receipt of the purchase order or redemption request without the imposition
of any sales or redemption charge.
The primary investment objective of MML Equity Fund is to achieve a superior
total rate of return over an extended period of time of both capital
appreciation and current income. A secondary investment objective is the
preservation of capital when business and economic conditions indicate that
investing for defensive purposes is appropriate. The assets of this Fund are
normally expected to be invested primarily in common stocks and other
equity-type securities.
The investment objectives of MML Money Market Fund are to achieve high current
income, the preservation of capital, and liquidity. The assets of this Fund are
invested in short-term debt instruments, including but not limited to commercial
paper, certificates of deposit, bankers' acceptances, and obligations of the
United States government, its agencies and instrumentalities.
The investment objective of MML Managed Bond Fund is to achieve as high a total
rate of return on an annual basis as is considered consistent with the
preservation of capital values. The assets of this Fund are invested primarily
in publicly issued, readily marketable, fixed income securities of such
maturities as MassMutual deems appropriate from time to time in light of market
conditions and prospects.
8
<PAGE>
The investment objective of MML Blend Fund is to achieve as high a level of
total rate of return over an extended period of time as is considered consistent
with prudent investment risk and the preservation of capital values. This Fund
invests in a portfolio of common stocks and other equity-type securities, bonds
and other debt securities with maturities generally exceeding one year, and
money market instruments and other debt securities with maturities generally not
exceeding one year.
Citibank, N.A., with its home office located at 111 Wall Street, New York, NY
10005, acts as custodian for each of the Funds.
MassMutual serves as investment manager of each of the Funds pursuant to a
separate investment management agreement executed by MassMutual and each Fund.
Pursuant to such agreements, MassMutual is paid a quarterly fee at the annual
rate of .50% of the first $100,000,000 of the Fund's average daily net asset
value, .45% of the next $200,000,000, .40% of the next $200,000,000 and .35% of
any excess over $500,000,000. During 1997, MassMutual earned the following
investment management fee from each of the following funds:
<TABLE>
<S> <C>
MML Equity Fund................................................ $8,082,863
MML Money Market Fund.......................................... $ 703,344
MML Managed Bond Fund.......................................... $ 913,026
MML Blend Fund................................................. $8,933,947
</TABLE>
Concert Capital Management, Inc. ("Concert") served as the investment
sub-adviser to MML Equity Fund and the Equity Sector of the MML Blend Fund from
1993-1996. Concert merged with and into David L. Babson & Company, Inc.
("Babson") effective December 31, 1996. Both Concert and Babson are wholly-owned
subsidiaries of Babson Acquisition Corporation, which is a controlled subsidiary
of MassMutual. Thus, effective January 1, 1997, Babson serves as the investment
sub-adviser to MML Equity Fund and the Equity Sector of the MML Blend Fund. Both
MassMutual and Babson are registered investment advisers under the Investment
Advisers Act of 1940.
Additional information regarding the Funds may be found in the accompanying
Prospectus for the Trust.
MassMutual is also the investment adviser to MassMutual Corporate Investors and
MassMutual Participation Investors, closed-end investment companies; certain
wholly-owned subsidiaries of MassMutual; and various employee benefit plans.
MassMutual is the investment sub-adviser to Oppenheimer Investment Grade Bond
Fund and Oppenheimer Value Stock Fund, each, open-end management investment
companies.
The assets of certain variable annuity separate accounts for which MassMutual or
an affiliate is the depositor are invested in shares of the Funds. Since these
separate accounts are invested in the same underlying Funds it is possible that
material conflicts could arise between owners of the Policies and owners of the
variable annuity contracts. Possible conflicts could arise if: (i) state
insurance regulators should disapprove or require changes in investment
policies, investment advisers or principal underwriters or if MML Bay State
should be permitted to act contrary to actions approved by holders of the
Policies under rules of the Securities and Exchange Commission; (ii) adverse tax
treatment of the Policies or the variable annuity contracts would result from
utilizing the same underlying Funds; (iii) different investment strategies would
be more suitable for the variable annuity contracts than for the Policies; or
(iv) state insurance laws or regulations or other applicable laws would prohibit
the funding of both the Separate Account and other investment accounts by the
same Funds. The Board of Trustees of the Trust will follow monitoring procedures
which have been developed to determine whether material conflicts have arisen.
Such Board will have a majority of trustees who are not interested persons of
the Trust or MassMutual and determinations whether or not a material conflict
exists will be made by a majority of such disinterested trustees. If a material
irreconcilable conflict exists, MassMutual and MML Bay State will take such
action at their own expense as may be required to cause the Separate Account to
be invested solely in shares of mutual funds which offer their shares
exclusively to variable life insurance separate accounts unless, in certain
cases, the holders of both the Policies and the variable annuity contracts vote
not to effect such segregation.
Rates of Return. The following tables show the Effective Annual Rates of Return
based on the actual investment performance (after deduction of investment
management fees and direct operating expenses) of the Fund underlying each
division of the Separate Account. Table 1 shows figures for periods ended
December 31, 1997; Table 2 shows December 31 annualized figures. These rates of
return do not reflect the mortality and expense risk charges assessed against
the Separate Account. Also, they do not reflect deductions from premiums or
administrative and cost of insurance charges assessed against the account value
of the Policies, nor do they reflect the Policy's surrender charges. (See
CHARGES UNDER THE POLICY - DEDUCTIONS FROM PREMIUMS, ACCOUNT VALUE CHARGES AND
SURRENDER CHARGES). Therefore, these rates are not illustrative of how actual
investment performance will affect the benefits under the Policy (but see
ACCOUNT VALUE AND CASH SURRENDER VALUE - Performance Illustration). An
individualized hypothetical illustration may be available. The rates of return
shown are not necessarily indicative of future performance. However, they may be
considered in assessing the competence and performance of MassMutual and Babson
as the Fund's investment advisers.
Effective Annual Rates of Return
<TABLE>
<CAPTION>
20 15 10 5 1
Fund Years Years Years Years Year
- ---- ----- ----- ----- ----- ----
<S> <C> <C> <C> <C> <C>
Equity 16.20% 16.19% 16.44% 18.25% 28.59%
Money Market -- 6.44 5.63 4.47 5.18
Managed Bond -- 9.73 9.08 7.79 9.91
Blend -- 13.67* 13.68 13.81 20.89
</TABLE>
*From inception.
9
<PAGE>
ANNUALIZED ONE YEAR TOTAL RETURNS
MML MML
For the MML Money Managed MML
year ended Equity Market Bond Blend
---------- ------ ------ ---- -----
1997 28.59% 5.18% 9.91% 20.89%
1996 20.25% 5.01% 3.25% 13.95%
1995 31.13% 5.58% 19.14% 23.28%
1994 4.10% 3.84% (3.76%) 2.48%
1993 9.52% 2.75% 11.81% 9.70%
1992 10.48% 3.48% 7.31% 9.36%
1991 25.56% 6.01% 16.66% 24.00%
1990 (0.51%) 8.12% 8.38% 2.37%
1989 23.04% 9.16% 12.83% 19.96%
1988 16.68% 7.39% 7.13% 13.40%
1987 2.10% 6.49% 2.60% 3.12%
1986 20.15% 6.60% 14.46% 18.30%
1985 30.54% 8.03% 19.94% 24.88%
1984 5.40% 10.39% 11.69% 8.24%*
1983 22.85% 8.97% 7.26% -
1982 25.67% 11.12%* 22.79%* -
1981 6.67% - - -
1980 27.62% - - -
1979 19.54% - - -
1978 3.71% - - -
1977 (0.52%) - - -
1976 24.77% - - -
1975 32.85% - - -
1974 (17.61%)* - - -
* The figures shown are from inception of the Funds. The Money Market and
Managed Bond Funds received initial funding on December 16, 1981. The Blend
Fund received initial funding on February 3, 1984. The Equity Fund received
initial funding September 15, 1971 (performance information prior to 1974 is
not available).
Performance Illustration. The following tables show how the actual investment
performance of the Funds of the Trust would have affected the Death Benefits and
Cash Surrender Values of hypothetical Policies. Each table illustrates a Policy
as of the earliest date for which performance figures are available for the
illustrated Fund. Each table assumes that the illustrated Policy was issued to a
male smoker age 35; insurance costs will vary under different mortality
assumptions. The Policy in each table is issued for a Selected Face Amount of
$100,000, with annual premiums of $1,200 paid at the beginning of each year and
the full Account Value continuously reinvested in the Separate Account division
corresponding with the particular Fund illustrated. Separate columns are shown
for the current schedule of charges and for guaranteed mortality and expense
charges and current fund level expenses.
10
<PAGE>
<TABLE>
<CAPTION>
MML Equity Fund
Using Guaranteed Schedule of
Using Current Schedule Mortality and Expense Charges
of Charges and Current Fund Level Expenses
----------------------- -------------------------------
Cash Cash
Calendar Total Annual Surrender Death Surrender Death
Year Premiums Value Benefit Value Benefit
---- -------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C>
1974 $1,200 $0 $100,000.00 $0 $100,000.00
1975 $2,400 $1,289.37 $100,000.00 $1,089.68 $100,000.00
1976 $3,600 $2,844.89 $100,000.00 $2,492.69 $100,000.00
1977 $4,800 $3,648.87 $100,000.00 $3,203.31 $100,000.00
1978 $6,000 $4,646.11 $100,000.00 $4,081.22 $100,000.00
1979 $7,200 $6,626.48 $100,000.00 $5,833.45 $100,000.00
1980 $8,400 $9,604.07 $100,000.00 $8,461.78 $100,000.00
1981 $9,600 $11,052.72 $100,000.00 $9,710.97 $100,000.00
1982 $10,800 $14,911.88 $100,000.00 $13,081.89 $100,000.00
1983 $12,000 $19,257.20 $100,000.00 $16,860.94 $100,000.00
1984 $13,200 $20,967.09 $100,000.00 $18,296.52 $100,000.00
1985 $14,400 $28,307.62 $100,000.00 $24,651.10 $100,000.00
1986 $15,600 $34,813.51 $100,000.00 $30,252.05 $100,000.00
1987 $16,800 $36,148.21 $100,000.00 $31,327.17 $100,000.00
1988 $18,000 $42,906.21 $100,420.98 $37,088.64 $100,000.00
1989 $19,200 $53,382.19 $121,177.57 $46,091.18 $104,626.98
1990 $20,400 $53,427.08 $118,073.85 $46,089.45 $101,857.68
1991 $21,600 $67,483.75 $145,090.06 $58,146.80 $125,015.62
1992 $22,800 $74,690.14 $156,102.39 $64,216.72 $134,212.94
1993 $24,000 $81,811.97 $166,896.42 $70,140.37 $143,086.35
1994 $25,200 $85,053.46 $169,256.39 $72,673.58 $144,620.42
1995 $26,400 $111,300.42 $215,922.81 $94,755.85 $183,826.35
1996 $27,600 $133,118.06 $251,593.13 $112,867.22 $213,319.05
1997 $28,800 $169,894.56 $314,304.94 $143,428.08 $265,341.95
</TABLE>
<TABLE>
<CAPTION>
MML Money Market Fund
Using Guaranteed Schedule of
Using Current Schedule Mortality and Expense Charges
of Charges and Current Fund Level Expenses
---------------------- -------------------------------
Cash Cash
Calendar Total Annual Surrender Death Surrender Death
Year Premiums Value Benefit Value Benefit
---- -------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C>
1982 $1,200 $220.02 $100,000 $132.61 $100,000
1983 $2,400 $1,200.74 $100,000 $1,015.34 $100,000
1984 $3,600 $2,321.05 $100,000 $2,019.97 $100,000
1985 $4,800 $3,466.49 $100,000 $3,041.47 $100,000
1986 $6,000 $4,602.68 $100,000 $4,045.23 $100,000
1987 $7,200 $5,776.62 $100,000 $5,072.30 $100,000
1988 $8,400 $7,057.99 $100,000 $6,182.19 $100,000
1989 $9,600 $8,546.98 $100,000 $7,464.20 $100,000
1990 $10,800 $10,030.36 $100,000 $8,724.57 $100,000
1991 $12,000 $11,355.84 $100,000 $9,829.96 $100,000
1992 $13,200 $12,388.52 $100,000 $10,658.89 $100,000
1993 $14,400 $13,332.71 $100,000 $11,396.16 $100,000
1994 $15,600 $14,434.67 $100,000 $12,252.16 $100,000
1995 $16,800 $15,822.70 $100,000 $13,330.35 $100,000
1996 $18,000 $17,167.33 $100,000 $14,341.47 $100,000
1997 $19,200 $18,473.56 $100,000 $15,272.20 $100,000
</TABLE>
11
<PAGE>
MML Managed Bond Fund
<TABLE>
<CAPTION>
Using Guaranteed Schedule of
Using Current Schedule Mortality and Expense Charges
of Charges and Current Fund Level Expenses
------------------------- -------------------------------
Cash Cash
Calendar Total Annual Surrender Death Surrender Death
Year Premiums Value Benefit Value Benefit
---- -------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C>
1982 $1,200 $332.75 $100,000 $240.37 $100,000
1983 $2,400 $1,289.08 $100,000 $1,100.65 $100,000
1984 $3,600 $2,456.92 $100,000 $2,149.47 $100,000
1985 $4,800 $4,100.83 $100,000 $3,626.60 $100,000
1986 $6,000 $5,724.35 $100,000 $5,073.43 $100,000
1987 $7,200 $6,689.01 $100,000 $5,913.34 $100,000
1988 $8,400 $8,016.32 $100,000 $7,066.74 $100,000
1989 $9,600 $9,937.95 $100,000 $8,738.37 $100,000
1990 $10,800 $11,564.05 $100,000 $10,129.92 $100,000
1991 $12,000 $14,347.65 $100,000 $12,527.29 $100,000
1992 $13,200 $16,082.87 $100,000 $13,978.80 $100,000
1993 $14,400 $18,694.60 $100,000 $16,179.46 $100,000
1994 $15,600 $18,512.96 $100,000 $15,932.26 $100,000
1995 $16,800 $22,784.46 $100,000 $19,514.98 $100,000
1996 $18,000 $24,084.08 $100,000 $20,509.99 $100,000
1997 $19,200 $26,951.06 $100,000 $22,798.72 $100,000
</TABLE>
MML Blend Fund
<TABLE>
<CAPTION>
Using Guaranteed Schedule of
Using Current Schedule Mortality and Expense Charges
of Charges and Current Fund Level Expenses
------------------------- -------------------------------
Cash Cash
Calendar Total Annual Surrender Death Surrender Death
Year Premiums Value Benefit Value Benefit
---- -------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C>
1984 $1,200 $192.27 $100,000 $106.12 $100,000
1985 $2,400 $1,467.98 $100,000 $1,263.23 $100,000
1986 $3,600 $2,864.05 $100,000 $2,521,86 $100,000
1987 $4,800 $3,831.53 $100,000 $3,381.67 $100,000
1988 $6,000 $5,359.03 $100,000 $4,741.20 $100,000
1989 $7,200 $7,506.98 $100,000 $6,648.40 $100,000
1990 $8,400 $8,466.31 $100,000 $7,472.16 $100,000
1991 $9,600 $11,546.06 $100,000 $10,178.97 $100,000
1992 $10,800 $13,433.58 $100,000 $11,805.21 $100,000
1993 $12,000 $15,508.04 $100,000 $13,580.69 $100,000
1994 $13,200 $16,523.43 $100,000 $14,402.16 $100,000
1995 $14,400 $21,214.29 $100,000 $18,428.89 $100,000
1996 $15,600 $24,890.07 $100,000 $21,544.73 $100,000
1997 $16,800 $30,855.47 $100,000 $26,622.73 $100,000
</TABLE>
These illustrations are not necessarily indicative of future performance. They
assume the Policies were issued standard based on full underwriting and that
there have been no increases or decreases in Selected Face Amounts, no Policy
loans and that no transaction charges have been incurred. The Cash Surrender
Values shown reflect the deduction of all charges made against premiums, Account
Value charges, Separate Account charges and surrender charges. An individualized
hypothetical illustration may be available. See
SEPARATE ACCOUNT CHARGES UNDER THE POLICY, DEDUCTIONS FROM PREMIUMS, ACCOUNT
VALUE CHARGES, SEPARATE ACCOUNT CHARGES, AND SURRENDER CHARGES.
Illustrations of Death Benefits, Cash Surrender Values and Accumulated Premiums
based on assumed hypothetical gross annual investment returns of 0%, 6% and 12%
are shown in APPENDIX A. The APPENDIX also describes, in more detail, the
assumptions underlying this illustration.
12
<PAGE>
GENERAL PROVISIONS OF THE POLICY
This section of the Prospectus describes the general provisions of the Policy,
and is subject to the terms of the Policy. You may review a copy of the Policy
upon request.
Premiums. The Policyowner selects a premium payment schedule in the Application
and is not bound by an inflexible premium schedule. Two premium concepts are
very important under the Policy: the planned premium and minimum initial
premium.
Planned Premiums. Planned premiums are elected at the time of application and
may be changed at any time. Planned premiums are subject to a minimum which
depends upon the Selected Face Amount of the Policy, the Insured's age and the
amount of the initial premium paid. In addition, the annual planned premium for
the Policy cannot be less than $300.
The Minimum Initial Premium. You paid a minimum initial premium along with your
Application or at any time prior to the delivery of the Policy. The amount of
the initial premium depended on the minimum initial premium on an annual basis
for the Selected Face Amount of the Policy and the proposed frequency of planned
premiums. Thereafter, subject to the minimum and maximum premium limitations
described below, you may make unscheduled premium payments at any time and in
any amount. The minimum initial premium for the Policy with annual planned
premiums is equal to the minimum planned premium for the Policy.
There is no penalty if the planned premium is not paid. Payment of this amount
does not guarantee coverage for any period of time. Instead, the duration of the
Policy depends upon the Policy's Account Value. Even if planned premiums are
paid, the Policy terminates when the Account Value becomes insufficient to pay
certain monthly charges and a grace period expires without sufficient payment.
For details see TERMINATION.
The following sample table shows the minimum annual planned premium per $1,000
of Selected Face Amount.
Minimum Annual Planned Premium
Per $1,000 of Selected Face Amount
Male, Female Smoker and Nonsmoker Classes
Age 10 Age 25 Age 40
------ ------ ------
$3.16 $4.80 $7.44
Minimum and Maximum Premium Payments. While the Policy is in force, premiums may
be paid at any time before the death of the Insured subject to certain
restrictions. The minimum premium payment is $10.00. The maximum premium which
may be paid in any year without evidence of insurability is the greater of: (i)
the premium which will not increase the net amount at risk under the Policy; and
(ii) twice the Policy's minimum planned premium, plus $100.00 (where required by
law, this maximum is not less than the Policy's annual planned premium for that
year). Premium payments should be sent to our Principal Administrative Office or
to the address indicated for payment on the notice.
Termination. This Policy does not terminate for failure to pay premiums since
payments, other than the initial premium, are not specifically required. Rather,
if on a Monthly Calculation Date, the Account Value less any Policy Debt is
insufficient to cover the total monthly deduction, the Policy will enter a
61-day grace period.
Grace Period. We allow 61 days to pay any premium necessary to cover the overdue
monthly deduction (or $10 if greater). You will receive a notice from us which
sets forth this amount. During the grace period, the Policy remains in force. If
the payment is not made within 61 days after we mail the written notice, the
Policy terminates without value.
DEATH BENEFIT UNDER THE POLICY
The Death Benefit is the amount payable to the Beneficiary when the Insured
dies. Upon receiving due proof of death, we pay the Beneficiary the Death
Benefit amount determined as of the date the Insured dies. All or part of the
Death Benefit can be paid in cash or applied under one or more of our payment
options described under ADDITIONAL PROVISIONS OF THE POLICY - Payment Options.
In the Application, the applicant selects a Selected Face Amount. The Death
Benefit is the greater of the Selected Face Amount in effect on the date of
death or the Minimum Face Amount in effect on the date of death with certain
additions or deductions. The Minimum Face Amount is equal to Account Value times
the Minimum Face Amount percentage. The percentages depend upon the Insured's
age, sex and smoking classification. The percentages are set forth on the
schedule page of your Policy. Added to the greater of the Selected Face Amount
or Minimum Face Amount is the value of any additional benefits provided by
rider. We will also add that part of any monthly deduction applicable for the
period beyond the date of death. We pay interest on the Death Benefit from the
date of death to the date the Death Benefit is paid or a payment option becomes
effective. The interest rate equals the rate determined under the Interest
Payment Option as described in ADDITIONAL PROVISIONS OF THE POLICY - Payment
Options. We then subtract any outstanding Policy Debt and any unpaid monthly
deductions if the death occurs during the 61-day Grace Period. The Death Benefit
is unaffected by investment experience unless the Death Benefit is based on the
Minimum Face Amount.
Example. The following example shows how the Death Benefit varies as a result of
investment performance:
Policy A Policy B
-------- --------
Selected Face Amount $ 100,000 $ 100,000
Account Value on Date of Death $ 50,000 $ 40,000
Minimum Face Amount
Percentage On Date of Death 240% 240%
13
<PAGE>
For Policy A, the Death Benefit will equal $120,000 which is the greater of the
$100,000 Selected Face Amount or the Account Value times the Minimum Face Amount
percentage. For Policy B, the Death Benefit would equal the $100,000 Selected
Face Amount.
Selected Face Amount Changes. An increase in coverage must be for at least
$15,000 in the non-qualified market and $5,000 in the qualified market or when
simplified underwriting procedures are used. Evidence of insurability must be
submitted with the application except for any increase elected under the
insurability protection rider. No increase in the Selected Face Amount can be
elected within six months after the Policy Date or any previous increase, or
after the Policy Anniversary Date nearest the Insured's 82nd birthday. These
limitations do not apply to increases elected in accordance with the
insurability protection rider.
All increases are effective on the date shown on the endorsement to the Policy.
Increases are allowed only on a Monthly Calculation Date. An increase in
Selected Face Amount may affect the net amount at risk which may affect a
Policyowner's cost of insurance charge.
Decreases in coverage are allowed in certain circumstances, although MML Bay
State believes that such decreases are generally not in the best interests of a
Policyowner. The Selected Face Amount will be reduced by canceling insurance
segments on a last purchased, first cancelled basis and the appropriate
surrender charge will be deducted from the Account Value. (For a discussion of
the charges associated with a decrease, see SURRENDER CHARGES.) A decrease in
Selected Face Amount is effective on the Monthly Calculation Date following the
receipt of a written request. The Selected Face Amount may not be decreased to
less than the minimum Selected Face Amount for a Policy. We reserve the right to
terminate the option of decreasing the Selected Face Amount in the future.
ACCOUNT VALUE AND CASH SURRENDER VALUE
Account Value. The Account Value of the Policy is the sum of all premium
payments adjusted by periodic charges and credits. It is the amount provided for
investment in the Separate Account and the GPA. The Account Value of the Policy
is held in one or more divisions of the Separate Account and the GPA. Initially,
this value equals the net amount of the first premium paid under the Policy.
This amount is allocated among the GPA and the divisions according to the
allocation percentages requested in the Application.
All or part of the Account Value may be transferred among divisions by written
request. Transfers between divisions of the Separate Account may be by amount or
by percentage. MML Bay State reserves the right to limit transfers to not more
than one every 90 days in connection with compliance with Section 404(c) of
ERISA. However, Policyowners may transfer all funds in the Separate Account to
the GPA at any time regardless of the number of transfers previously made.
Transfers from the GPA to the Separate Account may be made only once during each
Policy Year. Each such transfer may not exceed 25% of the Account Value in the
GPA at the time of the transfer. More than 25% may be transferred after 3
consecutive 25% transfers have been made, provided no value has been allocated
or transferred to the GPA by the Policyowner in the prior 3 Policy Years. The
Account Value in the GPA equal to any Policy Debt cannot be transferred to the
Separate Account. Any transfer is effective on the Valuation Date on or
following the date we receive a written request in good order at our Principal
Administrative Office. All transfers made on one Valuation Date are considered
one transfer.
Investment Return. The investment return of a Policy is based on:
. The Account Value held in each division of the Separate Account for that
Policy,
. The investment experience of each division as measured by its actual net rate
of return, and
. The interest rate credited on Account Values held in the GPA.
The investment experience of a division of the Separate Account reflects
increases or decreases in the net asset value of the shares of the underlying
Fund, any dividend or capital gains distributions declared by the Fund, and any
charges against the assets of the division. This investment experience is
determined each day on which the net asset value of the underlying Fund is
determined - that is, on each Valuation Date. The actual net rate of return for
a division measures the investment experience from the end of one Valuation Date
to the end of the next Valuation Date.
Cash Surrender Value. The Policy may be surrendered for its Cash Surrender Value
at any time before the Insured dies. Unless a later effective date is selected,
surrender is effective on the date we receive the Policy and a written request
in good order at our Principal Administrative Office. The Policy and written
request for surrender are deemed received on the date on which they are received
by mail at our Principal Administrative Office. If the date on which a request
is received is not a Valuation Date, or if a request is received other than
through the mail after the closing of the New York Stock Exchange (a "valuation
time"), the request is deemed received on the next Valuation Date. The Cash
Surrender Value is the Account Value less any surrender charges and outstanding
Policy Debt.
Withdrawals. Subject to certain conditions, after the Policy has been in force
for six months you can make a Withdrawal from the Policy on any Monthly
Calculation Date by sending a written request to our Principal Administrative
Office. The minimum amount of a Withdrawal is $100 (before deducting the
withdrawal fee); the maximum amount is the Cash Surrender Value. The Withdrawal
also may not reduce the Account Value to an amount less than the cumulative sum
of the Policy's
14
<PAGE>
minimum planned premiums to date. The amount of the Withdrawal is deducted from
the Policy's Account Value at the end of the Valuation Period applicable to the
Monthly Calculation Date on which the Withdrawal is made. The Policyowner must
specify the GPA or the division (or divisions) from which the Withdrawal is to
be made. The Withdrawal amount attributable to a division or the GPA may not
exceed the non-loaned Account Value of that division or GPA. A 2% fee, not to
exceed $25.00, is deducted from each Withdrawal. The Account Value and Selected
Face Amount will automatically be reduced by the amount of the Withdrawal unless
otherwise requested and satisfactory evidence of insurability is provided. A
surrender charge is not charged for this decrease in the Selected Face Amount.
POLICY LOAN PRIVILEGE
The Policy provides a loan privilege. After the first Policy Year (or in the
first Policy Year if required by law), loans can be made on the Policy at any
time before the Insured dies. The maximum loan is an amount equal to 90% (100%
where required by law) of the total of the Account Value at the time of the loan
less the then applicable surrender charge, less any outstanding Policy Debt. The
Policy must be properly assigned as collateral for the loan.
Source of Loan. The loan amount requested is taken from divisions of the
Separate Account and the GPA in proportion to the non-loaned Account Value of
each on the date of the loan. Shares taken from the divisions are liquidated and
the resulting dollar amounts are transferred to the GPA. The Policy loan is then
taken against the value in the GPA. We may delay the granting of any loan
attributable to the GPA for up to six months. We may also delay the granting of
any loan attributable to the Separate Account during any period that the New
York Stock Exchange is closed (other than customary weekend and holiday
closings) or trading is restricted, or the Securities and Exchange Commission
determines that a state of emergency exists; or the Securities and Exchange
Commission permits MML Bay State to delay payment for the protection of our
Policyowners.
If Loans Exceed the Policy Account Value. Policy Debt (which includes accrued
interest) must not equal or exceed 90% of the Account Value less any surrender
charges. If this limit is reached, we may terminate the Policy. To terminate for
this reason we will notify the Policyowner in writing. This notice states the
amount necessary to bring the Policy Debt back within the limit. If we do not
receive a payment within 31 days after the date we mailed the notice, and if
Policy Debt exceeds the Account Value less any surrender charges at the end of
those 31 days, the Policy terminates without value. Termination of a policy
under these circumstances could cause the policyowner to recognize gross income
in the amount of any excess of the Policy Debt over the sum of the policyowner's
previously unrecovered premium contributions.
Interest. On the Application, the Policyowner may select a loan interest rate of
6% or (in all jurisdictions except Arkansas) an adjustable loan rate. MML Bay
State each year will set the adjustable rate that will apply for the next Policy
Year. The maximum rate is based on the monthly average of the composite yield on
seasoned corporate bonds as published by Moody's Investors Service or, if it is
no longer published, a substantially similar average. The maximum rate is the
published monthly average for the calendar month ending two months before the
Policy Year begins, or 5%, whichever is higher. If the maximum limit is not at
least 1/2% higher than the rate in effect for the previous year, we will not
increase the rate. If the maximum limit is at least 1/2% lower than the rate in
effect for the previous year, we will decrease the rate.
Interest accrues daily and becomes part of the Policy Debt as it accrues. It is
due on each Policy Anniversary. If not paid when due, the interest will be added
to the loan and, as part of the loan, will bear interest at the same rate. Any
interest capitalized on a Policy Anniversary will be treated the same as a new
loan and will be taken from the divisions of the designated segment of the
Separate Account and the GPA in proportion to the non-loaned Account Value in
each.
Repayment. All or part of any Policy Debt may be repaid at any time while the
Insured is living and while the Policy is in force. All repayments are allocated
to the GPA. Any repayment results in the transfer of values equal to the
repayment from the loaned portion of the GPA to the non-loaned portion of the
GPA but does not result in a transfer to the divisions of the Separate Account.
If the loan is not repaid, we deduct the amount due from any amount payable from
a full surrender or upon the death of the Insured.
Interest on Loaned Value. Any loaned amount is held in the GPA and earns
interest at a rate determined by MML Bay State, which is the greater of: (i) 4%,
and (ii) the Policy loan rate less not more than 2% (the current rate is 1.5%).
Effect of Loan. A Policy loan affects the Policy since the Death Benefit and
Cash Surrender Value under a Policy are reduced by the amount of the loan.
Repayment of the loan increases the Death Benefit and Cash Surrender Value under
the Policy by the amount of the repayment.
As long as a loan is outstanding, a portion of the Policy's Account Value equal
to the loan is held in the GPA. This amount is not affected by the Separate
Account's investment performance. The Account Value is also affected because the
portion of the Account Value equal to the Policy loan is credited with an
interest rate declared by MML Bay State rather than a rate of return reflecting
the investment performance of the Separate Account.
FREE LOOK PROVISION
The Policyowner may cancel the Policy within 10 days (or within a longer period
if required by state law) after the Policyowner receives it, or 10 days after
MML Bay State mails or delivers a written notice of withdrawal right to the
15
<PAGE>
Policyowner or within 45 days after signing Part 1 of the Application, whichever
is latest. Also, a Policyowner may cancel increases in the Selected Face Amount
under the same time limitations. To exercise these rights, the Policyowner
should mail or deliver the Policy and Policy delivery receipt either to MML Bay
State or to the agent who sold the Policy or to one of our agency offices. If
the Policy is cancelled in this fashion, a refund will be made to the
Policyowner. The refund equals the sum of: (i) the difference between the
premiums paid and the amounts allocated to any division(s) and the GPA under the
Policy; (ii) the total amount of monthly deductions made and any other charges
imposed on amounts allocated to the division(s) and the GPA; and (iii) the value
of amounts allocated to the division(s) or the GPA on the date we receive the
returned Policy. For cancelled increases in the Selected Face Amount, the refund
equals the sum of: (i) the difference between the premiums paid attributable to
the increase and the amounts allocated to any division(s) and the GPA under the
Policy; (ii) the total amount of monthly deductions and any other charges
imposed on amounts attributable to the increase allocated to the division(s) and
the GPA; and (iii) the value on the day we receive the returned Policy of any
amounts attributable to the increase allocated to the division(s) for the GPA.
If state law does not authorize the calculation above, the refund equals the
total of all premiums paid for the Policy or increase, reduced by any amounts
borrowed or withdrawn.
YOUR VOTING RIGHTS
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Policyowner is entitled to give
instructions as to how shares of the Funds held in the Separate Account (or
other securities held in lieu of such shares) deemed attributable to the Policy
shall be voted at meetings of shareholders of the Funds or the Trust. Those
persons entitled to give voting instructions are determined as of the record
date for the meeting.
The number of shares of the Funds held in the Separate Account deemed
attributable to the Policy during the lifetime of the Insured are determined by
dividing the Policy's Account Value held in each division of the Separate
Account, if any, by $100. Fractional votes are counted.
Policyowners receive proxy material and a form with which such instructions may
be given. Shares of the Funds held by the Separate Account as to which no
effective instructions have been received are voted for or against any
proposition in the same proportion as the shares as to which instructions have
been received.
OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. These actions will be taken in
accordance with applicable laws (including obtaining any required approval of
the Securities and Exchange Commission). If necessary, we will seek approval by
Policyowners.
Specifically, we reserve the right to:
. Create new segments of the Separate Account;
. Create new Separate Accounts;
. Combine any two or more Separate Accounts;
. Make available additional divisions of the Separate Account investing in
additional investment companies;
. Invest the assets of the Separate Account in securities other than shares of
the Funds as a substitute for such shares already purchased or as the securities
to be purchased in the future;
. Operate the Separate Account as a management investment company under the
Investment Company Act of 1940 or in any other form permitted by law; and
. Deregister the Separate Account under the Investment Company Act of 1940 in
the event such registration is no longer required.
MML Bay State also reserves the right to change the name of the Separate
Account.
We have reserved all rights to the name MML Bay State Life Insurance Company or
any part of it. We may allow the Separate Account and other entities to use our
name or part of it, but we may also withdraw this right.
DIRECTORS AND EXECUTIVE OFFICERS OF MML BAY STATE
The directors and executive vice presidents of MML Bay State, their positions
and their other business affiliations and business experience for the past five
years are listed on the following page.
16
<PAGE>
MML BAY STATE LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Paul D. Adornato, Director and Senior Director, since 1987, and Senior Vice President-Operations, since 1996, MML Bay
Vice President-Operations State; Senior Vice President, since 1986, MassMutual
140 Garden Street
Hartford, CT 06154
- ----------------------------------------------------------------------------------------------------------------------------------
Lawrence V. Burkett, Jr., Director, Director, President and Chief Executive Officer, since 1996, MML Bay State;
President and Chief Executive Officer Executive Vice President and General Counsel, since 1993, Senior Vice President
1295 State Street and Deputy General Counsel, 1992-1993, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
John B. Davies, Director Director, MML Bay State, since 1996; Executive Vice President, since 1994,
1295 State Street Associate Executive Vice President, 1994-1994, General Agent, 1982-1993,
Springfield, MA 01111 MassMutual
- ----------------------------------------------------------------------------------------------------------------------------------
Anne Melissa Dowling, Director and Director and Senior Vice President-Large Corporate Marketing, MML Bay State, since
Senior Vice President-Large Corporate 1996; Senior Vice President, MassMutual, since 1996; Chief Investment Officer,
Marketing Connecticut Mutual Life Insurance Company, 1994-1996; Senior Vice President-
140 Garden Street International, Travelers Insurance Co., 1987-1993
Hartford, CT 06154
- ----------------------------------------------------------------------------------------------------------------------------------
Maureen R. Ford, Director and Senior Director and Senior Vice President-Annuity Marketing, MML Bay State, since 1996;
Vice President-Annuity Marketing Senior Vice President, MassMutual, since 1996; Marketing Officer, Connecticut
140 Garden Street Mutual Life Insurance Company, 1989-1996
Hartford, CT 06154
- ----------------------------------------------------------------------------------------------------------------------------------
Isadore Jermyn, Director and Senior Vice Director, since 1990, and Senior Vice President and Actuary, since 1996, MML Bay
President and Actuary State; Senior Vice President and Actuary, since 1995, Vice President and Actuary,
1295 State Street 1980-1995, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
Stuart H. Reese, Director and Senior Vice Director, since 1994, and Senior Vice President-Investments, since 1996, MML Bay
President-Investments State; Senior Vice President, MassMutual, since 1993; Investment Manager, Aetna
1295 State Street Life and Casualty and Affiliates, 1979-1993
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OFFICERS (other than those who are also Directors):
- ----------------------------------------------------------------------------------------------------------------------------------
Edward M. Kline Treasurer, MML Bay State, since 1997; Vice President, since 1989, Treasurer, since
1295 State Street 1997, MassMutual
Springfield, MA 01111
- ----------------------------------------------------------------------------------------------------------------------------------
Ann F. Lomeli Vice President, since 1997, and Secretary, since 1998, MML Bay State; Vice
1295 State Street President, Secretary and Associate General Counsel, since 1998, Associate Secretary,
Springfield, MA 01111 1996-1998, MassMutual; Corporate Secretary and Counsel, Connecticut Mutual Life
Insurance Company, 1988-1996
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
THE GUARANTEED PRINCIPAL ACCOUNT
Because of exemptive and exclusionary provisions, interests in MML Bay State's
general account (which include interests in the Guaranteed Principal Account)
are not registered under the Securities Act of 1933 and the general account is
not registered as an investment company under the Investment Company Act of
1940. Accordingly, neither the general account nor any interests therein are
subject to the provisions of these Acts, and MML Bay State has been advised that
the staff of the Securities and Exchange Commission has not reviewed the
disclosures in the Prospectus relating to the general account. Disclosures
regarding the general account may, however, be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
A Policyowner may allocate or transfer all or part of the net Premium to the
Guaranteed Principal Account at any time, and such amounts shall become part of
MML Bay State's general account assets. The transfer will take effect when we
receive a written request in good order at our Principal Administrative Office.
The allocation or transfer of amounts to the Guaranteed Principal Account does
not entitle a Policyowner to share in the investment experience of those assets.
Instead, MML Bay State guarantees that those amounts allocated to the Guaranteed
Principal Account which are in excess of any Policy loans will accrue interest
daily at an effective annual rate equal to the greater of: a) 4%, and b) the
rate determined by an index defined in the Policy less any tax charge which
reflects the Policy's share of our federal income tax liability. For amounts
equal to any Policy loans, the guaranteed rate is the greater of a) 4% and b)
the Policy loan rate less an MML Bay State declared charge for expenses and
taxes. This charge will not be greater than 2% per year (this charge is
currently 1.5%). Although MML Bay State is not obligated to credit interest at a
rate higher than this minimum, it may declare a higher rate applicable for such
periods as it deems appropriate. Upon request MML Bay State will inform
Policyowners of the then applicable rate. Since MML Bay State takes into account
the need to provide for its expenses and guarantees, the crediting rate declared
by MML Bay State shall be net of charges it imposes against the earnings of the
GPA.
FEDERAL INCOME TAX CONSIDERATIONS
The ultimate effect of federal income taxes on values under this Policy and on
the economic benefit to the Policyowner or Beneficiary depends on MML Bay
State's tax status and upon the tax status of the individual concerned. The
discussion contained herein is general in nature and is not an exhaustive
discussion of all tax questions that might arise under the Policies, and is not
intended as tax advice. Moreover, no representation is made as to the likelihood
of continuation of current federal income tax laws and Treasury Regulations or
of the current interpretations of the Internal Revenue Service. MML Bay State
reserves the right to make changes in the Policy to assure that it continues to
qualify as life insurance for tax purposes. For complete information on federal
and state law considerations, a qualified tax adviser should be consulted. No
attempt is made to consider any applicable state or other tax laws.
MML Bay State - Tax Status. MML Bay State is taxed as a life insurance company
under Subchapter L of the Internal Revenue Code of 1986 (the "Code"). The
Separate Account is not a separate entity from MML Bay State and its operations
form a part of MML Bay State.
Investment income and realized capital gains on the assets of the Separate
Account are reinvested and taken into account in determining Account Values. The
investment income and realized capital gains are automatically applied to
increase book reserves associated with the Policies. Under existing federal
income tax law, the Separate Account's investment income, including net capital
gains, is not taxed to MML Bay State to the extent applied to increase reserves
associated with the Policies. The reserve items taken into account at the close
of the taxable year for purposes of determining net increases or net decreases
must be adjusted for tax purposes by subtracting any amount attributable to
appreciation in the value of assets or by adding any amount attributable to
depreciation. MML Bay State's basis in the assets underlying the Separate
Account's Policies will be adjusted for appreciation or depreciation, to the
extent the reserves are adjusted. Thus, corporate level capital gains and loss,
and the tax effect thereof, are eliminated.
Due to MML Bay State's current tax status, no charge is made to the Separate
Account for MML Bay State's federal income taxes that may be attributable to the
Separate Account. Periodically, MML Bay State reviews the question of a charge
to the Separate Account for MML Bay State's federal income taxes. A charge may
be made for any federal income taxes incurred by MML Bay State that are
attributable to the Separate Account. Depending on the method of calculating
interest on Policy values allocated to the Guaranteed Principal Account (see
preceding section), a charge may be imposed for the Policy's share of MML Bay
State's federal income taxes attributable to that account.
Under current laws, MML Bay State may incur state or local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable state or local tax laws, MML Bay
State reserves the right to charge the Separate Account for such taxes, if any,
attributable to the Separate Account.
Policy Proceeds, Premiums and Loans. MML Bay State believes that the Policy
meets the statutory definition of life insurance under Code Section 7702 and
hence receives the same tax treatment as that accorded to fixed benefit life
insurance. Thus, the Death Benefit under the Policy is generally excludable from
the gross income of the Beneficiary under Section 101(a)(1) of the Code. As an
exception to this general rule, where a Policy has been
18
<PAGE>
transferred for value, only the portion of the Death Benefit which is equal to
the total consideration paid for the Policy may be excluded from gross income.
The Policyowner is not deemed to be in constructive receipt of the cash values,
including increments thereon, under the Policy until a full surrender or partial
withdrawal is made (unless the Policy is a "modified endowment contract," as
discussed below).
Upon a full surrender of a Policy for its Cash Surrender Value the Policyowner
may recognize ordinary income for federal tax purposes. Ordinary income is
computed to be the amount by which the Account Value, unreduced by any
outstanding Policy Debt but less any surrender charges assessed, exceeds the
premiums paid but not previously recovered and any other consideration paid for
the Policy.
Decreases in Selected Face Amount and Withdrawals may be taxable depending on
the circumstances. Code Section 7702(f)(7) provides that where a reduction of
future benefits occurs during the first 15 years after a Policy is issued and
where there is a cash distribution associated with that reduction, the
Policyowner may be taxed on all or a part of the amount distributed. After 15
years, such cash distributions are not subject to federal income tax, except to
the extent they exceed the total amount of premiums paid but not previously
recovered. Where the provisions of Code Section 7702(f) do not cause a taxable
event, a withdrawal is taxable only to the extent that it exceeds the
Policyowner's as yet unrecovered premium contributions. MML Bay State suggests
that you consult with your tax adviser in advance of a proposed decrease in
Selected Face Amount or Withdrawal as to the portion, if any, which would be
subject to federal income tax.
A change of the Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances.
MML Bay State also believes that under current law any loan received under the
Policy will be treated as Policy Debt of a Policyowner, and that no part of any
loan under a Policy will constitute income to the Policyowner unless the Policy
has become a "modified endowment contract." If the Policy is a modified
endowment contract under Code Section 7702A, loans will be fully taxable to the
extent of income in the Policy and could be subject to an additional 10 percent
tax. See the discussion on modified endowment contracts below. Under the
"personal" interest limitation provisions of the Tax Reform Act of 1986,
interest on Policy loans used for personal purposes, which otherwise meet the
requirements of Code Section 264, will no longer be tax deductible. However,
other rules may apply to allow all or part of the interest expense as a
deduction if the loan proceeds are used for "trade or business" or "investment"
purposes. See your tax adviser for further guidance.
If the Policy is owned by a business or corporation, the 1986 Act may impose
additional restrictions. The Act limits the interest deduction available for
loans against a business-owned Policy. It imposes an indirect tax upon the gain
in corporate-owned life insurance policies by way of the corporate alternative
minimum tax, for those corporations subject to the alternative minimum tax. The
corporate alternative minimum tax could also apply to a portion of the amount by
which Death Benefits received exceed the Policy's date of death cash value.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary.
MML Bay State cannot make any guarantee regarding the future tax treatment of
any Policy. For complete information on the impact of changes with respect to
the Policy and federal and state tax considerations, a qualified tax adviser
should be consulted.
Modified Endowment Contracts. Contrary to the rules described above, loans and
other amounts distributed under a "modified endowment contract" are taxable to
the extent of any accumulated income in the Policy. The collateral assignment of
a modified endowment contract is treated as a distribution and subjects the
Policyowner to taxation on the gain accumulated within the Policy. For
successive tax years, as long as the collateral assignment remains on the
Policy, the Policyowner would be subject to current taxation on any increase in
the Policy's accumulated income.
In general, the amount which may be subject to tax is the excess of the Account
Value (both loaned and unloaned) over the previously unrecovered premiums paid.
Appropriate adjustments are made to account for amounts previously taxable as a
result of policy loans or collateral assignments. Death benefits paid under a
modified endowment contract, however, are not taxed any differently from death
benefits payable under other life insurance contracts.
A Policy is a modified endowment contract if it satisfies the definition of life
insurance set out in the Internal Revenue Code, but fails the additional "7-pay
test." A Policy fails this test if the accumulated amount paid under the
contract at any time during the first seven contract years exceeds the total
premiums that would have been payable under a policy providing for guaranteed
benefits upon the payment of seven level annual premiums. A Policy which would
otherwise satisfy the 7-pay test will still be taxed as a modified endowment
contract if it is received in exchange for a modified endowment contract.
Certain changes will require a Policy to be retested to determine whether it has
become a modified endowment contract. For example, a reduction in death benefits
during the first seven contract years will cause the Policy to be retested as if
it had originally been issued with the reduced death benefit. If the premiums
actually paid into the Policy exceed the limits under the 7-pay test for a
policy with the reduced death benefit, the Policy will become a modified
endowment contract. This change is effective retroactively to the contract year
in which the actual premiums paid exceed the new 7-pay limits.
19
<PAGE>
In addition, a "material change" occurring at any time while the Policy is in
force will require the Policy to be retested to determine whether it continues
to meet the 7-pay test. A material change starts a new 7-pay test period. The
term "material change" includes many increases in death benefits. A material
change does not include an increase in death benefits which is attributable to
the payment of premiums necessary to fund the lowest level of death benefits
payable during the first seven contract years, or which is attributable to the
crediting of interest with respect to such premiums.
Since the Policy provides for flexible premium payments, the Company has
instituted procedures to monitor whether increases in death benefits or
additional premium payments cause either the start of a new seven-year test
period or the taxation of distributions and loans. All additional premium
payments will have to be considered.
If any amount is taxable as a distribution of income under a modified endowment
contract, it will also be subject to a 10% penalty tax. Limited exceptions from
the additional penalty tax are available for individual Policyowners. The
penalty tax will not apply to distributions: (i) that are made on or after the
date the taxpayer attains age 59 1/2; or (ii) that are attributable to the
taxpayer's becoming disabled; or (iii) that are part of a series of
substantially equal periodic payments (made not less frequently than annually)
made for the life or life expectancy of the taxpayer. For complete information
with respect to modified endowment contract status, a qualified tax adviser
should be consulted.
Once a Policy fails the 7-pay test, loans and distributions occurring in the
year of failure and thereafter become subject to the rules for modified
endowment contracts. In addition, a recapture provision applies to loans and
distributions received in anticipation of failing the 7-pay test. Any
distribution or loan made within two years prior to failing the 7-pay test is
considered to have been made in anticipation of the failure.
Under certain circumstances, a loan or other distribution under a modified
endowment contract may be taxable even though it exceeds the amount of income
accumulated in the Policy. For purposes of determining the amount of income
received from a modified endowment contract, the law requires the aggregation of
all modified endowment contracts issued to the same Policyowner by an insurer
and its affiliates within the same calendar year. Therefore, loans and
distributions from any one such Policy are taxable to the extent of the income
accumulated in all the contracts required to be aggregated.
Qualified Plans. The Policy may be used in conjunction with certain
tax-qualified employee benefit plans. Since the rules governing such use are
complex, a purchaser should not use the Policy in conjunction with any such
qualified plan until he has consulted a competent tax adviser. The Policy may
not be used in conjunction with an Individual Retirement Account (IRA).
Diversification Standards. To comply with final regulations under Code Section
817(h) ("Final Regulations"), each Fund of the Trust is required to diversify
its investments. The Final Regulations generally require that on the last day of
each quarter of a calendar year no more than 55% of the value of the Trust's
assets is represented by any one investment, no more than 70% is represented by
any two investments, no more than 80% is represented by any three investments,
and no more than 90% is represented by any four investments. A "look-through"
rule applies to treat a pro-rata portion of each asset of the Trust as an asset
of the Separate Account. All Securities of the same issuer are treated as a
single investment. However, each government agency or instrumentality is treated
as a separate issuer.
With respect to variable life insurance contracts, the general diversification
requirements are modified if any of the assets of the Separate Account are
direct obligations of the United States Treasury. In this case, there is no
limit on the investment that may be made in United States Treasury Securities,
and for purposes of determining whether assets other than United States Treasury
Securities are adequately diversified, the generally applicable percentage
limitations are increased based on the value of the Separate Account's
investment in United States Treasury Securities. Notwithstanding this
modification of the general diversification requirements, the Funds of the Trust
will be structured to comply with the general diversification standards because
they serve as an investment vehicle for certain variable annuity contracts which
must comply with the general standards.
In connection with the issuance of the temporary regulations prior to the Final
Regulations, the Treasury announced that such temporary regulations did not
provide guidance concerning the extent to which Policyowners may direct their
investments to particular divisions of a separate account. Regulations in this
regard were not issued in connection with the Final Regulations, however. It is
not clear, at this time, what future regulations might provide. It is possible
that if future regulations are issued, the Policy may need to be modified to
comply with such regulations. For these reasons, MML Bay State reserves the
right to modify the Policy, as necessary, to prevent the Policyowner from being
considered the owner of the assets of the Separate Account.
MML Bay State intends to comply with the Final Regulations to assure that the
Policy continues to qualify as life insurance for federal income tax purposes.
ADDITIONAL PROVISIONS OF THE POLICY
Reinstatement Option. For a period of five (5) years after termination the
Policyowner can request that we reinstate the Policy during the Insured's
lifetime. We will not reinstate the Policy if it has been returned for its Cash
Surrender Value. Note
20
<PAGE>
that a termination or reinstatement may cause the Policy to become a modified
endowment contract.
Before we will reinstate the Policy, we must receive the following:
. A premium payment equal to the amount necessary to produce Account Value equal
to 3 times the total monthly deduction for the Policy on the Monthly Calculation
Date on or next following the date of reinstatement
. Evidence of insurability satisfactory to us, and
. Where necessary, a signed acknowledgement that the Policy has become a
modified endowment contract.
If we do reinstate the Policy, the Selected Face Amount for the reinstated
Policy will be the same as it would have been if the Policy had not terminated.
Payment Options. All or part of the Death Benefit or Cash Surrender Value may be
taken in cash or as a series of level payments. Proceeds applied will no longer
be affected by the investment experience of the Separate Account divisions or
the GPA.
To receive payments, the proceeds to be applied must be at least $2,000. If the
payments under any option are less than $20.00 each, we reserve the right to
make payments at less frequent intervals. Payment options are as described
below.
Fixed Amount Payment Option. Each monthly payment is for an agreed fixed amount
not less than $10.00 for each $1,000.00 applied under the option. Interest of at
least 3% per year is credited each month on the unpaid balance and added to it.
Payments continue until the amount we hold runs out.
Fixed Time Payment Option. Equal monthly payments are made for any period
selected, up to 30 years. The amount of each payment depends on the total amount
applied, the period selected and the interest rate we credit to the unpaid
balance. This interest rate will not be less than 3% per year.
Interest Payment Option. We hold amounts applied under this option and pay
interest on the unpaid balance of at least 3% per year.
Lifetime Payment Option. Equal monthly payments are based on the life of a named
person. Payments continue for the lifetime of that person. Three variations are
available:
. Payments for life only.
. Payments guaranteed for five, ten or twenty years.
. Payments guaranteed for the amount applied.
Joint Lifetime Payment Option. Equal monthly payments are based on the lives of
two named persons. While both named persons are living, one payment will be made
each month. When one of the named persons dies, the same payment continues for
the lifetime of the other. Two variations are available.
. Payment for two lives only. No specific number of payments is guaranteed.
Under this option there may be one payment if the two named persons die prior to
the second payment.
. Payments guaranteed for 10 years.
Joint Lifetime Payment Option with Reduced Payments. Monthly payments are based
on the lives of two named persons. While both named persons are living, one
payment will be made each month. When one dies, payments are reduced by one-
third and will continue for the lifetime of the other.
Withdrawal Rights under Payment Options. If provided in the payment option
election, all or part of the paid balance may be withdrawn or applied under any
other option. Payments which are based on a named person's life may not be
withdrawn.
Additional Benefits You Can Get by Rider. The Policy can include additional
benefits that we approve based on our standards and limits for issuing insurance
and classifying risks. None of these benefits depends on the investment
performance of the Separate Account or the GPA. An additional benefit is
provided by a rider and is subject to the terms of both the Policy and the
rider. The following riders are available.
Waiver of Monthly Charges Rider. This rider provides that the monthly deductions
for the Policy and riders attached to it are waived after the insured has been
totally disabled for six months. The benefit is available to Insureds ages 0-59
and provides coverage up to the Policy Anniversary nearest age 65. For
disabilities which begin prior to age 60, the rider provides benefits for the
life of the Insured. If disability begins after the Policy Anniversary Date
nearest the Insured's 60th birthday and before age 65, we will not waive the
monthly deductions which are due on or after the Policy Anniversary Date nearest
the Insured's 70th birthday.
Accidental Death Benefit Rider. With this rider, we pay an additional Death
Benefit if the Insured dies as a direct result of accidental bodily injury. The
benefit is available to Insureds ages 0-65. Death must occur before the Policy
Anniversary nearest the Insured's 70th birthday.
Insurability Protection Rider. This rider provides the right to increase the
Selected Face Amount of the Policy without evidence of insurability on one or
more regular option dates or on substitute option dates. The benefit is
available to Insured's ages 0-38 and expires on the Policy Anniversary Date
nearest the Insured's 43rd birthday. Substitute option dates occur after the
Insured's marriage or the birth of a child of the Insured. The amount of each
increase cannot be less than $15,000 or more than $100,000.
Accelerated Death Benefit Rider. Subject to state availability, MML Bay State
offers an Accelerated Death Benefit Rider. This rider provides for the payment
of a death benefit to the Beneficiary if the Insured is terminally ill. We
21
<PAGE>
must receive proof of the terminal illness prior to the time when this rider may
be attached.
Beneficiary. A Beneficiary is any person named on our records to receive
insurance proceeds after the Insured dies. You name the Beneficiary when you
apply for the Policy. There may be different classes of beneficiaries, such as
primary and secondary. These classes set the order of payment. There may be more
than one Beneficiary in a class.
Any Beneficiary may be named an irrevocable beneficiary. An irrevocable
beneficiary is one whose consent is needed to change that Beneficiary. The
consent of any irrevocable beneficiary is needed to exercise any Policy right
except the right to:
. Change the frequency of premium payments; and
. Reinstate the Policy after termination.
The Beneficiary may be changed during the Insured's lifetime by forwarding a
request in writing to our Principal Administrative Office. Generally, the change
will take effect as of the date of the request. If no Beneficiary is living when
the Insured dies, unless provided otherwise the Death Benefit is paid to the
Owner or, if deceased, the Owner's estate.
Assignment. The Policy may be assigned as collateral for a loan or other
obligation. But for any assignment to be binding on us, we must receive a signed
copy of it at our Principal Administrative Office. We are not responsible for
the validity of any assignment.
Limits on Our Right to Challenge the Policy. Except for any increases in
Selected Face Amount, we must bring any legal action to contest the validity of
a Policy within two years from its issue Date. After that we cannot contest its
validity, except for failure to pay premiums. For any increase in the Selected
Face Amount, we must bring legal action to contest that increase within two
years from the effective date of the increase or within two years from the Issue
Date of the Insurability Protection Rider, if the increase is provided by that
rider.
Misstatement of Age or Sex. If the Insured's age or sex is misstated in the
Policy application, the Death Benefit payable under the Policy will be adjusted
based on what the Policy would provide according to the most recent mortality
charge for the correct date of birth or correct sex.
Suicide. If the Insured commits suicide within two years from the Issue Date (or
less where required by law), and while the Policy is in force, we pay a limited
Death Benefit in one sum to the Beneficiary. The limited Death Benefit is the
amount of premiums paid for the Policy, less any Policy Debt or amounts
withdrawn. For any increases in the Selected Face Amount, the limited Death
Benefit will be the monthly deductions made for that increase. If the limited
Death Benefit for the entire Policy is payable, there will be no additional
payment for the increase.
When We Pay Proceeds. If the Policy has not terminated, payment of the Cash
Surrender Value, loan proceeds or the Death Benefit are made within 7 days after
we receive any required documents at our Principal Administrative Office. But we
can delay payment of the Cash Surrender Value or any withdrawal from the
Separate Account, loan proceeds attributable to the Separate Account, or the
Death Benefit during any period that:
. It is not reasonably practicable to determine the amount because the New York
Stock Exchange is closed (other than customary week-end and holiday closings),
trading is restricted by the Securities and Exchange Commission, or the SEC
declares that an emergency exists; or
. The SEC, by order, permits us to delay payment in order to protect our
Policyowners.
In addition, a premium payment is not available to satisfy a surrender request
until the check, or other instrument by which the premium payment was made, has
been honored.
We may delay paying any surrender value or loan proceeds based on the GPA for up
to 6 months from the date the request is received at our Principal
Administrative Office. We can delay payment of the entire Death Benefit if
payment is contested. We investigate all death claims arising within the
two-year contestable period. Upon receiving the information from a completed
investigation, we generally make a determination within five days as to whether
the claim should be authorized for payment. Payments are made promptly after
authorization. If payment of a Cash Surrender Value or Withdrawal value is
delayed for 30 days or more, we add interest at an annual rate of 3%. We add
interest to a Death Benefit from the date of death to the date of payment at the
same rate as is paid under the Interest Payment Option.
RECORDS AND REPORTS
All records and accounts relating to the Separate Account and the GPA are
maintained by MassMutual or MML Bay State. Each year within 30 days after the
Policy Anniversary, we will mail you a report showing the Account Value at the
beginning of the previous Policy Year, all premiums paid since that time, all
additions to and deductions from Account Value during the year, and the Account
Value, Death Benefit, Cash Surrender Value and Policy Debt as of the latest
Policy Anniversary. This report contains any additional information required by
any applicable law or regulation.
SALES AND OTHER AGREEMENTS
MML Investors Services, Inc. ("MMLISI"), 1414 Main Street, Springfield, MA
01144-1013 acts as the principal underwriter of the Policies pursuant to a
Servicing Agreement to which MMLISI, MML Bay State, and the Separate Account are
parties. MMLISI is registered with the Securities and Exchange Commission as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc.
22
<PAGE>
The Policies are no longer offered for sale to the public. Policyowners may
continue, however, to make premium payments under existing Policies. MMLISI is
the current broker-dealer for the existing Policies.
Under the Servicing Agreement among MMLISI, MML Bay State, and the Separate
Account, MMLISI receives compensation for its activities as principal
underwriter of the Policies. Compensation paid to MMLISI in 1997 under the
Agreement was $200,000. Commissions were paid through MMLISI to agents and
selling brokers for selling the Policies. During 1997 such payments amounted to
$2,388,339.
Commissions Schedule. Agents or selling brokers receive commissions as a
percentage of the premium payable in each Policy Year. The maximum commission
percentages are shown in the following Table:
Percentage
Commission Above Minimum
Policy Year Percentage Planned Premium
- ----------- ---------- ---------------
1 50% 2%
2-10 6% 2%
11 and after 2% 2%
Agents may receive commissions at lower rates on Policies sold to replace
existing insurance issued by MassMutual or any of its subsidiaries. Lower first
year commission rates apply for issue ages over 65.
Agents under financing agreements with a general agent of MassMutual may be
compensated differently.
Agents who meet certain productivity and persistency standards in selling MML
Bay State and MassMutual policies are eligible for added compensation. General
agents and brokers receive commissions based on different schedules.
Bonding Arrangement. An insurance company blanket bond is maintained providing
$50,000,000 coverage for officers and employees of MassMutual and MML Bay State
(subject to a $350,000 deductible) and $25,000,000 coverage for MassMutual's
general agents and agents (also subject to a $350,000 deductible).
LEGAL PROCEEDINGS
We are not involved in any material legal proceedings.
EXPERTS
The financial statements of the Variable Life Plus Segment of the Separate
Account included in this Prospectus have been included herein in reliance on the
reports of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The audited statements of statutory financial position of MML Bay State as of
December 31, 1997 and 1996 and the related statutory statements of income,
changes in capital stock and surplus and cash flows for each of the years in the
three year period ended December 31, 1997 included in this prospectus have been
so included in reliance on the report of Coopers & Lybrand L.L.P. independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
Actuarial matters in this Prospectus have been examined by Craig Waddington,
FSA, MAAA. An opinion on actuarial matters is filed as an exhibit to the
registration statements we filed with the SEC.
FINANCIAL STATEMENTS
The financial statements of MML Bay State and the Variable Life Plus Segment of
the Separate Account included herein should be considered only as bearing upon
the ability of MML Bay State to meet its obligations under the Policy.
23
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyowners of MML Bay State Life Insurance
Company
We have audited the statements of assets and liabilities of the MML Equity
Division, MML Money Market Division, MML Managed Bond Division and MML Blend
Division of the Variable Life Plus segment of MML Bay State Variable Life
Separate Account I as of December 31, 1997, and the related statements of
operations for the year then ended, and the statements of changes in net assets
for each of the two years in the period then ended. These financial statements
are the responsibility of management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
verification of investments owned as of December 31, 1997 by examination of the
records of MML Series Investment Fund. 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 the MML Equity Division, MML
Money Market Division, MML Managed Bond Division and MML Blend Division of the
Variable Life Plus segment of MML Bay State Variable Life Separate Account I as
of December 31, 1997, the results of their operations for the year then ended,
and the changes in their net assets for each of the two years in the period then
ended, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 3, 1998
F-1
<PAGE>
MML Bay State Variable Life Separate Account I -- Variable Life Plus
STATEMENT OF ASSETS AND LIABILITIES
December 31,1997
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Investment in the MML Series Investment Fund
Number of shares (Note 2) 4,373,959 1,995,142 394,640 2,680,785
=============== =============== =============== ===============
Identified cost (Note 3B) $ 107,809,507 $ 1,995,142 $ 4,719,383 $ 53,611,640
=============== =============== =============== ===============
Value (Note 3A) $ 155,026,874 $ 1,995,142 $ 4,897,084 $ 64,552,188
Dividends receivable 12,500,040 8,779 78,740 4,839,062
Receivable from MML Bay State Life Insurance Company - 10,001 - -
--------------- --------------- --------------- ---------------
Total assets 167,526,914 2,013,922 4,975,824 69,391,250
LIABILITIES
Payable to MML Bay State Life Insurance Company 183,235 - 3,663 171,205
--------------- --------------- --------------- ---------------
NET ASSETS $ 167,343,679 $ 2,013,922 $ 4,972,161 69,220,045
=============== =============== =============== ===============
Net Assets:
For variable life insurance policies $ 167,304,968 $ 1,997,890 $ 4,950,227 $ 69,188,667
Retained in Variable Life Separate Account I by
MML Bay State Life Insurance Company 38,711 16,032 21,935 31,378
--------------- --------------- --------------- ---------------
Net assets $ 167,343,679 $ 2,013,922 $ 4,972,161 $ 69,220,045
=============== =============== =============== ===============
Accumulation units (Note 8)
Policyowners 43,219,423 1,246,174 2,256,813 22,050,369
MML Bay State Life Insurance Company 10,000 10,000 10,000 10,000
--------------- --------------- --------------- ---------------
Total units 43,229,423 1,256,174 2,266,813 22,060,369
=============== =============== =============== ===============
NET ASSET VALUE PER ACCUMULATION UNIT
December 31, 1997 $ 3.87 $ 1.60 $ 2.19 $ 3.14
December 31, 1996 3.02 1.53 2.00 2.61
December 31, 1995 2.52 1.46 1.95 2.30
December 31, 1994 1.93 1.39 1.64 1.87
December 31, 1993 1.86 1.34 1.71 1.83
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
MML Bay State Variable Life Separate Account I -- Variable Life Plus
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 12,501,743 $ 106,009 $ 312,026 $ 6,462,372
Expenses
Mortality and expense risk fees (Note 4) 585,209 8,389 19,062 250,692
-------------- -------------- -------------- --------------
Net investment income (Note 3C) 11,916,534 97,620 292,964 6,211,680
-------------- -------------- -------------- --------------
Net realized and unrealized gain on investments
Net realized gain (loss) on investments (Notes 3 and 6) 3,521,008 - (43,086) 1,108,467
Change in net unrealized appreciation/depreciation of investments 20,304,272 - 182,455 4,240,961
-------------- -------------- -------------- --------------
Net gain on investments 23,825,280 - 139,369 5,349,428
-------------- -------------- -------------- --------------
Net increase in net assets resulting from operations $ 35,741,814 $ 97,620 $ 432,333 $ 11,561,108
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
MML Bay State Variable Life Separate Account I -- Variable Life Plus
STATEMENT OF CHANGES IN NET ASSETS
For The Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997
----------------------------------------------------------------
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 11,916,534 $ 97,620 $ 292,964 $ 6,211,680
Net realized gain (loss)
on investments 3,521,008 - (43,086) 1,108,467
Change in net unrealized
appreciation/depreciation
of investments 20,304,272 - 182,455 4,240,961
------------- ------------ ------------- -------------
Net increase in net assets
resulting from operations 35,741,814 97,620 432,333 11,561,108
------------- ------------ ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 28,357,669 370,219 785,116 11,772,004
Transfer to Guaranteed
Principal Account (22,724) - - (20,713)
Transfer of surrender values (4,776,027) (33,994) (203,043) (1,472,337)
Transfer due to death benefits (127,308) - (5,743) (107,104)
Transfer due to policy loans,
net of repayments (3,952,762) (73,338) (113,501) (1,739,176)
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation (23,339) (369) (976) (33,155)
Withdrawal due to charges for
administrative and insurance
costs (11,901,583) (173,831) (392,070) (5,415,180)
Divisional transfers 980,651 (305,024) (261,865) (413,761)
------------- ------------ ------------- -------------
Net increase (decrease) in net assets
resulting from capital transactions 8,534,577 (216,337) (192,082) 2,570,578
------------- ------------ ------------- -------------
Total increase (decrease) 44,276,391 (118,717) 240,251 14,131,686
NET ASSETS, at beginning
of the year 123,067,288 2,132,639 4,731,910 55,088,359
------------- ------------ ------------- -------------
NET ASSETS, at end
of the year $ 167,343,679 $ 2,013,922 $ 4,972,161 $ 69,220,045
============= ============ ============= =============
<CAPTION>
1996
----------------------------------------------------------------
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 5,057,981 $ 81,931 $ 263,280 $ 3,039,413
Net realized gain (loss)
on investments 2,103,813 - (8,838) 894,768
Change in net unrealized
appreciation/depreciation
of investments 12,069,834 - (130,618) 2,493,656
------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations 19,231,628 81,931 123,824 6,427,837
------------- ------------- ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 30,253,210 479,029 965,175 13,099,759
Transfer to Guaranteed
Principal Account (1,631) (2,710) (4,530) (1,159)
Transfer of surrender values (2,815,182) (28,198) (114,542) (1,190,428)
Transfer due to death benefits (47,935) (1,609) (20,793) (19,767)
Transfer due to policy loans,
net of repayments (2,517,403) (83,415) (100,937) (1,136,293)
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation (7,844) (292) (2,296) 3,513
Withdrawal due to charges for
administrative and insurance
costs (11,654,245) (181,244) (432,135) (5,542,332)
Divisional transfers 1,364,488 (102,281) 33,776 (1,295,983)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from capital transactions 14,573,458 79,280 323,718 3,917,310
------------- ------------- ------------- -------------
Total increase (decrease) 33,805,086 161,211 447,542 10,345,147
NET ASSETS, at beginning
of the year 89,262,202 1,971,428 4,284,368 44,743,212
------------- ------------- ------------- -------------
NET ASSETS, at end
of the year $ 123,067,288 $ 2,132,639 $ 4,731,910 $ 55,088,359
============= ============= ============= =============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
MML Bay State Variable Life Separate Account I - Variable Life Plus
Notes To Financial Statements
1. HISTORY
MML Bay State Variable Life Separate Account I ("Separate Account I") is a
separate investment account established on June 9, 1982 by MML Bay State
Life Insurance Company ("MML Bay State") in accordance with the provisions
of Chapter 376 of the Missouri Statutes. On June 30, 1997, MML Bay State
redomesticated from the state of Missouri to the state of Connecticut. MML
Bay State is a wholly-owned subsidiary of Massachusetts Mutual Life
Insurance Company ("MassMutual").
MML Bay State maintains three segments within Separate Account I. The
initial segment ("Variable Life Segment") is used exclusively for MML Bay
State's limited payment variable whole life insurance policy.
On August 4, 1988, MML Bay State established a second segment ("Variable
Life Plus Segment") within Separate Account I to be used exclusively for MML
Bay State's flexible premium variable whole life insurance policy, known as
Variable Life Plus.
On July 24, 1995, MML Bay State established a third segment ("Variable Life
Select Segment") within Separate Account I to be used exclusively for MML
Bay State's flexible premium variable whole life insurance policy, known as
Variable Life Select.
The Separate Account I operates as a registered unit investment trust
pursuant to the Investment Company Act of 1940 and the rules promulgated
thereunder. MML Bay State paid $40,000 to the Variable Life Plus Segment on
August 4, 1988 to provide initial capital: 12,216 shares were purchased in
the four series of shares of the management investment company described in
Note 2 supporting the divisions of the Variable Life Plus Segment.
2. INVESTMENT OF THE VARIABLE LIFE PLUS SEGMENT'S ASSETS
The Variable Life Plus Segment maintains four divisions. The MML Equity
Division invests in shares of MML Equity Fund, the MML Money Market Division
invests in shares of MML Money Market Fund, the MML Managed Bond Division
invests in shares of MML Managed Bond Fund and the MML Blend Division
invests in shares of MML Blend Fund. MML Equity Fund, MML Money Market Fund,
MML Managed Bond Fund and MML Blend Fund are four series of the MML Series
Investment Fund (the "MML Trust"). The MML Trust is a no-load, registered,
open-end, management investment company for which MassMutual acts as
investment manager. Concert Capital Management, Inc. ("Concert") served as
the investment sub-advisor to MML Equity Fund and the Equity Sector of the
MML Blend Fund from 1993-1996. Concert merged with and into David L. Babson
and Company, Inc. ("Babson") effective December 31, 1996. At such time, both
Concert and Babson were wholly-owned subsidiaries of DLB Acquisition
Corporation, which is a controlled subsidiary of MassMutual. Thus, effective
January 1, 1997, Babson serves as the investment sub-advisor to MML Equity
Fund and the Equity Sector of the MML Blend Fund.
In addition to the four divisions of the Variable Life Plus Segment, a
policyowner may also allocate funds to the Guaranteed Principal Account,
which is part of MML Bay State's general account. Because of exemptive and
exclusionary provisions, interests in the Guaranteed Principal Account, are
not registered under the Securities Act of 1933 and the general account is
not registered as an investment company under the Investment Company Act of
1940.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by the Variable Life Plus Segment in the preparation of the
financial statements in conformity with generally accepted accounting
principles.
A. Investment Valuation
Investments in MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund
and MML Blend Fund are each stated at market value which is the net asset
value per share of each of the respective funds.
F-5
<PAGE>
Notes To Financial Statements (Continued)
B. Accounting For Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
C. Federal Income Taxes
MML Bay State is taxed under federal law as a life insurance company under
the provisions of the 1986 Internal Revenue Code, as amended. The Variable
Life Plus Segment is part of MML Bay State's total operation and is not
taxed separately. The Variable Life Plus Segment will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains of the Variable Life Plus Segment credited to the
policies. Accordingly, MML Bay State does not intend to make any charge to
the Variable Life Plus Segment's divisions to provide for company income
taxes. MML Bay State may, however, make such a charge in the future if an
unanticipated change of current law results in a company tax liability
attributable to the Variable Life Plus Segment.
D. Policy Loan
When a policy loan is made, the Variable Life Plus Segment transfers the
amount of the loan to MML Bay State, thereby decreasing both the investments
and net assets of the Variable Life Plus Segment by an equal amount. The
interest rate charged on any loan is 6% per year or the policyowner may
select an adjustable loan rate, in all jurisdictions except Arkansas, at the
time of application. All loan repayments are allocated to the Guaranteed
Principal Account.
The policyowner earns interest at an annual rate determined by MML Bay
State, which will not be less than 4%, on any loaned amount.
E. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
4. CHARGES
MML Bay State charges the Variable Life Plus Segment divisions for the
mortality and expense risks it assumes. The charge is made daily at an
effective annual rate of 0.40% of the value of each division's net assets.
MML Bay State makes certain deductions from the annual premium before
amounts are allocated to the Variable Life Plus Segment and the Guaranteed
Principal Account. The deductions are for sales charges and state premium
taxes. No additional deductions are taken when money is transferred from the
Guaranteed Principal Account to the Variable Life Plus Segment. MML Bay
State also makes certain charges for the cost of insurance and
administrative costs.
5. SALES AGREEMENTS
MML Investors Services, Inc. ("MMLISI"), a wholly-owned subsidiary of
MassMutual, serves as principal underwriter (as defined in the Investment
Company Act of 1940, as amended) of the policies pursuant to an agreement
among MMLISI, MML Bay State and Separate Account I. MMLISI is registered
with the Securities and Exchange Commission as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The policies are no longer offered for sale to
the public. Policyowners may continue, however, to make premium payments
under existing policies.
Pursuant to underwriting and servicing agreements, commissions, or other
fees due to registered representatives for servicing the policies are paid
by MML Bay State through MMLISI. MMLISI also receives compensation for its
actions as underwriters of the policies.
F-6
<PAGE>
Notes To Financial Statements (Continued)
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For The Year Ended Equity Market Bond Blend
December 31. 1997 Division Division Division Division
----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Cost of purchases $ 21,753,628 $ 643,341 $ 916,565 $ 10,249,050
Proceeds from sales 8,141,608 781,483 816,658 4,310,910
Average monthly value of securities 144,212,770 2,088,790 4,774,157 61,978,485
</TABLE>
7. NET INVESTMENT RETURN
The following table shows the net investment return for each division in
the Variable Life Plus Segment:
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
For the Year Ended: Division Division Division Division
------------------ -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
December 31, 1997 24.57% 4.64% 9.04% 18.52%
December 31, 1996 18.29% 4.47% 2.85% 12.83%
December 31, 1995 26.30% 5.03% 16.89% 20.32%
December 31, 1994 3.72% 3.41% (3.90%) 2.23%
December 31, 1993 8.49% 2.31% 9.91% 8.39%
</TABLE>
The net investment return for each division of the Variable Life Plus
Segment is computed using the net increase in net assets resulting from
operations as compared to the average monthly net assets. The net investment
return figures shown above do not reflect expenses related to insurance
products. Inclusion of such expenses would reduce the net investment return
figures for all periods shown.
F-7
<PAGE>
Notes To Financial Statements (Continued)
8. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For the Year Ended Equity Market Bond Blend
December 31, 1997 Division Division Division Division
- ----------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Units purchased 8,235,720 237,408 379,946 4,113,955
Units withdrawn and transferred to
Guaranteed Principal Account (6,024,705) (179,557) (343,176) (3,054,002)
Units transferred between divisions 293,723 (195,299) (131,838) (143,124)
---------- --------- --------- ----------
Net increase (decrease) 2,504,738 (137,448) (95,068) 916,829
Units, at beginning of the year 40,724,685 1,393,622 2,361,881 21,143,540
---------- --------- --------- ----------
Units, at end of the year 43,229,423 1,256,174 2,266,813 22,060,369
========== ========= ========= ==========
MML MML
MML Money Managed MML
For the Year Ended Equity Market Bond Blend
December 31, 1996 Division Division Division Division
- ----------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Units purchased 11,061,920 321,133 498,819 5,418,933
Units withdrawn and transferred to
Guaranteed Principal Account (6,211,017) (199,230) (347,604) (3,258,016)
Units transferred between divisions 492,311 (76,090) 11,346 (509,444)
----------- --------- --------- ----------
Net increase 5,343,214 45,813 162,561 1,651,473
Units, at beginning of the year 35,381,471 1,347,809 2,199,320 19,492,067
----------- --------- --------- ----------
Units, at end of the year 40,724,685 1,393,622 2,361,881 21,143,540
=========== ========= ========= ==========
</TABLE>
9. CONSOLIDATED MML BAY STATE VARIABLE LIFE SEPARATE ACCOUNT I
As discussed in Note 1, the financial statements only represent activity of
MML Bay State's Variable Life Plus Segment. The combined net assets as of
December 31, 1997 for Separate Account I, which includes the Variable Life,
Variable Life Plus and Variable Life Select Segments, are as follows:
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
-------------- -------------- -------------- --------------
Total assets $262,418,182 $ 5,596,013 $ 8,002,808 $ 97,150,658
Total liabilities 816,281 87,088 11,878 408,037
------------- ------------- ------------- -------------
Net assets $261,601,901 $ 5,508,925 $ 7,990,930 $ 96,742,621
============= ============= ============= =============
Net assets:
For variable life insurance
policies $259,884,304 $ 5,301,355 $ 7,889,341 $ 95,613,924
Retained in Variable Life
Separate Account 1 by
MML Bay State Life
Insurance Company 1,717,597 207,570 101,589 1,128,697
------------- ------------- ------------- -------------
Net assets $261,601,901 $ 5,508,925 $ 7,990,930 $ 96,742,621
============= ============= ============= =============
*Oppenheimer *Oppenheimer *Oppenheimer
Capital *Oppenheimer Global Strategic
Appreciation Growth Securities Bond
Division Division Division Division
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Total assets $ 21,250,607 $ 15,581,317 $ 12,676,506 $ 2,371,037
Total liabilities 72,606 101,795 59,768 6,374
------------- ------------- ------------- -------------
Net assets 21,178,001 $ 15,479,522 $ 12,616,738 $ 2,364,663
============= ============= ============= =============
Net assets:
For variable life insurance
policies $ 21,170,402 $ 15,470,828 $ 12,609,774 $ 2,358,254
Retained in Variable Life
Separate Account 1 by
MML Bay State Life
Insurance Company 7,599 8,694 6,964 6,409
------------- ------------- ------------- -------------
Net assets $ 21,178,001 $ 15,479,522 $ 12,616,738 $ 2,364,663
============= ============= ============= =============
</TABLE>
* Offered to the Variable Life Select Segment only.
F-8
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders of
MML Bay State Life Insurance Company
We have audited the accompanying statutory statements of financial position of
MML Bay State Life Insurance Company as of December 31, 1997 and 1996, and the
related statutory statements of income, changes in capital stock and surplus,
and cash flows for each of the three years in the period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described more fully in Note 1, these financial statements were prepared in
conformity with statutory accounting practices of the National Association of
Insurance Commissioners and the accounting practices prescribed or permitted by
the Department of Insurance of the State of Connecticut, and prior to June 30,
1997, the Department of Insurance of the State of Missouri (collectively
"statutory accounting principles"), which practices differ from generally
accepted accounting principles. The effects on the financial statements of the
variances between the statutory basis of accounting and generally accepted
accounting principles, although not reasonably determinable at this time, are
presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of MML Bay State Life Insurance Company at December 31, 1997 and 1996, or the
results of its operations or its cash flows for each of the three years in the
period ended December 31, 1997.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MML Bay State Life Insurance
Company at December 31, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1997, on
the statutory basis of accounting described in Note 1.
COOPERS & LYBRAND L.L.P.
Springfield, Massachusetts
February 6, 1998
20
<PAGE>
MML Bay State Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1997 1996
---- ----
(In Millions)
Assets:
Bonds ........................................... $ 38.5 $ 44.9
Policy loans .................................... 16.1 10.0
Cash and short-term investments ................. 3.5 7.0
-------- -------
58.1 61.9
Investment and insurance amounts
receivable ..................................... 2.0 2.3
Transfer due from separate account .............. 75.8 50.2
Receivable from parent .......................... -- 1.1
Federal income tax receivable ................... -- 1.1
-------- -------
135.9 116.6
Separate account assets ......................... 1,400.1 706.7
-------- -------
$1,536.0 $ 823.3
======== =======
See notes to statutory financial statements.
21
<PAGE>
MML Bay State Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION, Continued
<TABLE>
<CAPTION>
December 31,
1997 1996
---- ----
($ In Millions Except for Par Value
and Share Amounts)
<S> <C> <C>
Liabilities:
Policyholders' reserves and funds............................... $ 36.2 $ 26.5
Policyholders' claims and other benefits........................ 1.9 1.1
Payable to parent............................................... 21.7 --
Federal income tax payable...................................... 3.9 --
Accrued expenses and taxes...................................... 3.0 6.9
Asset valuation reserve......................................... 0.1 0.2
Other liabilities............................................... 5.0 7.3
-------- ------
71.8 42.0
Separate account reserves and liabilities....................... 1,396.7 703.7
-------- ------
1,468.5 745.7
-------- ------
Capital stock and surplus:
Common stock, $200 par value
25,000 shares authorized
12,501 shares issued and outstanding............................ 2.5 2.5
Paid-in capital and contributed surplus......................... 71.7 71.7
Surplus......................................................... (6.7) 3.4
-------- ------
67.5 77.6
-------- ------
$1,536.0 $823.3
======== ======
</TABLE>
See notes to statutory financial statements.
22
<PAGE>
MML Bay State Life Insurance Company
STATUTORY STATEMENTS OF INCOME
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
Revenue:
Premium income ................................ $606.6 $441.2 $ 92.7
Net investment and other income ............... 10.7 8.4 4.3
Expense allowance on reinsurance ceded ........ -- -- 0.5
------ ------ ------
617.3 449.6 97.5
------ ------ ------
Benefits and expenses:
Policy benefits and payments .................. 34.3 11.0 5.7
Addition to policyholders' reserves, funds
and separate accounts ........................ 489.0 363.5 67.0
Operating expenses ............................ 38.3 24.0 11.2
Commissions ................................... 35.4 28.1 15.1
State taxes, licenses and fees ................ 11.2 9.1 2.5
------ ------ ------
608.2 435.7 101.5
Net gain (loss) from operations
before federal income taxes .................. 9.1 13.9 (4.0)
Federal income taxes .......................... 15.9 11.8 0.6
------ ------ ------
Net gain (loss) from operations ............... (6.8) 2.1 (4.6)
Net realized capital loss ..................... (0.1) (0.1) --
------ ------ ------
Net income (loss) ............................. $ (6.9) $ 2.0 $ (4.6)
====== ====== ======
See notes to statutory financial statements.
23
<PAGE>
MML Bay State Life Insurance Company
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Capital stock and surplus, beginning of year............... $ 77.6 $ 50.3 $ 55.9
------ ------ ------
Increases (decrease) due to:
Net income (loss)......................................... (6.9) 2.0 (4.6)
Change in asset valuation reserve......................... 0.1 (0.1) --
Change in separate account surplus........................ -- -- 0.3
Capital contribution...................................... -- 25.5 --
Change in reserving methodology........................... -- -- (1.3)
Change in non-admitted assets and other................... (3.3) (0.1) --
------ ------ ------
(10.1) 27.3 (5.6)
------ ------ ------
Capital stock and surplus, end of year..................... $ 67.5 $ 77.6 $ 50.3
====== ====== ======
</TABLE>
See notes to statutory financial statements.
24
<PAGE>
MML Bay State Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Operating activities:
Net income (loss) .................................... $(6.9) $ 2.0 $(4.6)
Additions to policyholders' reserves and funds,
net of transfers to separate accounts .............. 10.5 7.0 8.6
Net realized capital loss ............................ 0.1 0.1 -
Change in receivable from
separate accounts .................................... (25.6) (21.2) (7.9)
Change in receivable (payable) to parent ............. 22.8 (0.2) (1.2)
Change in federal taxes receivable (payable) ......... 5.0 (1.0) (1.0)
Other changes ........................................ (9.7) 1.5 (2.6)
----- ----- -----
Net cash used in operating activities ................ (3.8) (11.8) (8.7)
----- ----- -----
Investing activities:
Purchases of investments and loans ................... (20.1) (35.9) (28.4)
Sales and maturities of investments and receipts
from repayments of loans ........................... 20.4 28.7 36.6
----- ----- -----
Net cash provided by (used in) investing activities .. 0.3 (7.2) 8.2
----- ----- -----
Financing activities:
Capital and Surplus contribution ..................... - 25.5 -
----- ----- -----
Net cash provided by financing activities ............ - 25.5 -
----- ----- -----
Increase (decrease) in cash and short-term investments (3.5) 6.5 (0.5)
Cash and short-term investments, beginning of year ... 7.0 0.5 1.0
----- ----- -----
Cash and short-term investments, end of year ......... $ 3.5 $ 7.0 $ 0.5
===== ===== =====
</TABLE>
25
<PAGE>
Notes To Statutory Financial Statements
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
MML Bay State Life Insurance Company ("the Company") is a wholly-owned
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"). The
Company is primarily engaged in the sale of flexible and limited premium
variable whole life insurance and variable annuities distributed through career
agents. On March 1, 1996, the operations of Connecticut Mutual Life Insurance
Company were merged into MassMutual.
The accompanying statutory financial statements, except as to form, have been
prepared in conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Department of Insurance of the State of
Connecticut, and prior to June 30, 1997, the Department of Insurance of the
State of Missouri. On June 30, 1997, the Company redomesticated from the state
of Missouri to the state of Connecticut which did not have any effect on the
accounting practices being followed.
The accompanying statutory financial statements are different in some respects
from GAAP financial statements. The more significant differences are as follows:
(a) acquisition costs, such as commissions and other costs directly related to
acquiring new business, are charged to current operations as incurred, whereas
under GAAP these expenses would be capitalized and recognized over the life of
the policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requires they be valued at fair value; (d)
deferred income taxes are not provided for book-tax timing differences as would
be required by GAAP; and (e) payments received for universal life products and
variable annuities are reported as premium revenue, whereas under GAAP, these
payments would be recorded as deposits to policyholders' account balances.
The NAIC is currently engaged in an extensive project to codify statutory
accounting principles ("Codification") with a goal of providing a comprehensive
guide of statutory accounting principles for use by insurers in all states. This
comprehensive guide, which has not been approved by the NAIC or any state
insurance department, includes seventy-two Statements of Statutory Accounting
Principles ("SSAPs") and is expected to be effective no earlier than January 1,
1999. The effect of adopting these SSAPs shall be reported as an adjustment to
surplus on the effective date. Management is currently reviewing the impact of
Codification. However, since the SSAPs have not been finalized, the ultimate
impact cannot be determined at this time.
The preparation of statutory financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, as well as disclosures of contingent assets and liabilities, at the
date of the statutory financial statements. Management must also make estimates
and assumptions that affect the amounts of revenues and expenses during the
reporting period. Future events, including changes in the levels of mortality,
morbidity, interest rates and asset valuations, could cause actual results to
differ from the estimates used in the statutory financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a description of the Company's principal accounting policies
and practices.
A. Investments
Bonds are valued in accordance with rules established by the National
Association of Insurance Commissioners. Generally, bonds are valued at amortized
cost.
Policy loans are carried at the outstanding loan balance less amounts unsecured
by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve and an Interest Maintenance Reserve. The Asset Valuation
Reserve and other investment reserves stabilize surplus against declines in the
value of bonds.
26
<PAGE>
Notes To Statutory Financial Statements (Continued)
The Interest Maintenance Reserve captures after-tax realized capital gains and
losses which result from changes in the overall level of interest rates for all
types of fixed income investments and amortizes these capital gains and losses
into income using the grouped method over the remaining life of the investment
sold or over the life of the underlying asset. Net realized after tax capital
losses of $0.1 million in 1997 and 1996 and net realized after tax capital gains
of $0.3 million in 1995 were charged to the Interest Maintenance Reserve.
Amortization of the Interest Maintenance Reserve into net investment income
amounted to $0.1 million in 1997, 1996 and 1995. The Interest Maintenance
Reserve is included in other liabilities on the statutory Statement of Financial
Position.
Realized capital gains and losses, less taxes, not includable in the Interest
Maintenance Reserve, are recognized in net income. Realized capital gains and
losses are determined using the specific identification method. Unrealized
capital gains and losses are included in surplus.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of variable annuity and variable
life insurance policyholders. Assets, consisting of holdings in an open-end
series investment fund affiliated with MassMutual, bonds, common stocks, and
short-term investments, are reported at fair value. The transfer due from
separate account represents the policyholders' account values in excess of
statutory benefit reserves. Premiums, benefits and expenses of the separate
accounts are reported in the Statutory Statement of Income. The Company receives
compensation for providing administrative services to the separate account and
for assuming mortality and expense risks in connection with the policies. The
Company had $3.4 million and $3.0 million of its assets invested in the separate
account as of December 31, 1997 and 1996, respectively.
Net transfers to separate accounts of $479.4 million, $356.1 million, and $59.8
million in 1997, 1996 and 1995, respectively, are included in the addition to
policyholders' reserves, funds and separate accounts.
C. Policyholders' Reserves
Policyholders' reserves for life contracts were developed using accepted
actuarial methods computed principally on the net level premium method and the
Commissioners' Reserve Valuation Method using the 1958 and 1980 Commissioners'
Standard Ordinary mortality tables with assumed interest rates ranging from 3.5
to 5.5 percent. Reserves for individual annuities are based on accepted
actuarial methods, principally at interest rates ranging from 5.5 to 6.0
percent.
During 1994, actuarial guidelines requiring additional reserves for immediate
payment of claims became effective. While the Company's aggregate reserves were
sufficient, the reserves for certain products were not recorded. The effect of
correctly recording these reserves was $1.3 million at December 31, 1994 and was
recorded as an adjustment to surplus during 1995.
D. Premium and Related Expense Recognition
Premium revenue is recognized annually on the anniversary date of the policy.
Annuity premium is recognized when received. Commissions and other costs related
to issuance of new policies, maintenance and settlement costs, are charged to
current operations when incurred.
E. Cash and Short-Term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers all
highly liquid short-term investments purchased with a maturity of twelve months
or less to be cash and short-term investments.
27
<PAGE>
Notes To Statutory Financial Statements (Continued)
3. CAPITAL STOCK AND SURPLUS
The Board of Directors of MassMutual has authorized the contribution of funds to
the Company sufficient to meet the capital requirements of all states in which
the Company is licensed to do business. Substantially all of the statutory
capital stock and surplus is subject to dividend restrictions relating to
various state regulations which limit the payment of dividends without prior
approval. Under these regulations, $7.5 million of capital stock and surplus is
available for distribution to the shareholder in 1998 without prior regulatory
approval.
4. RELATED PARTY TRANSACTIONS
MassMutual and the Company have an agreement whereby MassMutual, for a fee, will
furnish the Company, as required, operating facilities, human resources,
computer software development and managerial services. Fees incurred under the
terms of the agreement were $26.8 million, $16.4 million and $6.6 million in
1997, 1996 and 1995, respectively.
The Company had reinsurance agreements with MassMutual in which MassMutual
assumed specific plans of insurance on a coinsurance basis and on a yearly
renewal term basis. The coinsurance agreement was terminated in 1995. A
termination fee of $6.2 million was recorded as an expense and paid to
MassMutual for the right to retain future fees and charges on the reinsurance
business. Premium income and policy benefits and payments are stated net of
reinsurance. Premium income of $5.1 million, $3.8 million and $29.6 million was
ceded to MassMutual in 1997, 1996 and 1995, respectively. Death benefits of $5.5
million, $3.1 million and $1.8 million were ceded to MassMutual in 1997, 1996
and 1995, respectively.
The Company entered into a stop-loss agreement with MassMutual on January 1,
1997, with maximum coverage at $25.0 million, under which the Company cedes
claims which, in aggregate exceed 18% of the covered volume for any year. For
1997, this limit was $15.4 million and it was not exceeded. The Company paid
approximately $1.0 million in premiums under the agreement in 1997.
During 1996, MassMutual contributed additional paid in capital of $25.0 million
cash to the Company and purchased an additional 2,500 shares of common stock for
$0.5 million.
5. FEDERAL INCOME TAXES
The provision for federal income taxes is based upon the Company's best estimate
of its tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of miscellaneous temporary differences, such as
reserves and acquisition costs, resulted in effective tax rates which differ
from the statutory tax rate.
The Company plans to file its 1997 federal income tax return on a consolidated
basis with its parent, MassMutual and MassMutual's other eligible life and
non-life affiliates. The Company and its eligible life and non-life affiliates
are subject to a written tax allocation agreement which allocates the group's
tax liability for payment purposes. Generally, the agreement provides that loss
members shall be compensated for the use of their losses and credits by other
members.
The Internal Revenue Service has completed examining MassMutual's income tax
returns through the year 1992 and is currently examining the Company for the
years 1993 and 1994. The Company believes any adjustments resulting from such
examinations will not materially affect its statutory financial statements.
The Company made federal tax payments of $10.9 million in 1997, $12.8 million in
1996 and $1.9 million in 1995.
28
<PAGE>
Notes To Statutory Financial Statements (Continued)
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment.
A. Bonds
The carrying value and estimated fair value of bonds are as follows:
<TABLE>
<CAPTION>
December 31, 1997
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
<S> <C> <C> <C> <C>
U. S. Treasury securities
and obligations of U. S.
government corporations
and agencies $7.6 $0.1 $ -- $7.7
Mortgage-backed securities 6.5 0.1 -- 6.6
Corporate debt securities 23.9 0.4 -- 24.3
Utilities 0.5 -- -- 0.5
----- ----- ----- -----
TOTAL $38.5 $ 0.6 $ -- $39.1
===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
<S> <C> <C> <C> <C>
U. S. Treasury securities
and obligations of U. S.
government corporations
and agencies $ 7.8 $0.1 $0.1 $ 7.8
Mortgage-backed securities 8.3 -- 0.1 8.2
Corporate debt securities 28.8 0.3 0.1 29.0
----- ---- ----- -----
TOTAL $44.9 $0.4 $ 0.3 $45.0
===== ==== ===== =====
</TABLE>
The carrying value and estimated fair value of bonds at December 31, 1997 by
contractual maturity are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Carrying Fair
Value Value
----- -----
<S> <C> <C>
(In Millions)
Due in one year or less $ 0.1 $ 0.1
Due after one year through five years 18.9 19.2
Due after five years through ten years 7.5 7.7
Due after ten years 2.0 2.0
----- -----
28.5 29.0
Mortgage-backed securities, including
securities guaranteed by the
U.S. government 10.0 10.1
----- -----
TOTAL $38.5 $39.1
===== =====
</TABLE>
29
<PAGE>
Notes To Statutory Financial Statements (Continued)
Proceeds from sales and maturities of investments in bonds were $20.4 million
during 1997, $28.7 million during 1996 and $36.6 million during 1995. Gross
capital gains of $0.1 million in 1997, $0.1 million in 1996 and $0.5 million in
1995 and gross capital losses of $0.1 million in 1997, $0.1 million in 1996, and
$0.1 million in 1995 were realized on those sales, portions of which were
included in the Interest Maintenance Reserve. The estimated fair value of
non-publicly traded bonds is determined by the Company using a pricing matrix.
B. Other
It is not practicable to determine the fair value of policy loans which do not
have a stated maturity.
7. LIQUIDITY
The withdrawal characteristics of the policyholders' reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1997 are illustrated below:
<TABLE>
<CAPTION>
(In Millions)
<S> <C> <C>
Total policyholders' reserves and funds and
separate account liabilities $1,432.9
Not subject to discretionary withdrawal (0.4)
Policy loans (16.1)
--------
Subject to discretionary withdrawal $1,416.4
========
Total invested assets, including separate
investment accounts $1,458.2
Policy loans and other invested assets (16.1)
--------
Marketable investments $1,442.1
========
</TABLE>
8. BUSINESS RISKS AND CONTINGENCIES
Approximately 49% of the Company's premium revenue in 1997 was derived from
three customers and approximately 52% of the Company's premium revenue in 1996,
was derived from two customers.
The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premiums. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position, results of operations or liquidity. In
1997, the Company elected not to admit $0.1 million of guaranty fund premium tax
offset receivables relating to prior assessments.
The Company is involved in litigation arising in and out of the normal course of
its business. Management intends to defend these actions vigorously. While the
outcome of litigation cannot be foreseen with certainty, it is the opinion of
management, after consultation with legal counsel, that the ultimate resolution
of these matters will not materially affect its financial position, results of
operations or liquidity.
9. RECLASSIFICATIONS
Certain 1996 and 1995 amounts have been reclassified to conform with the current
year presentation.
30
<PAGE>
Notes To Statutory Financial Statements (Continued)
AFFILIATED COMPANIES
The relationship of the Company, its parent and affiliated companies as of
December 31, 1997 is illustrated below. Subsidiaries are wholly-owned by the
parent, except as noted.
Parent
------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
-----------------------------------------------------------
C.M. Assurance Company
C.M. Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc. (Sold in March 1996)
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps, Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MassMutual Reinsurance Bermuda (Sold in December 1996)
MML Investors Services, Inc.
State House One (Liquidated in December 1996)
Subsidiaries of MassMutual Holding Trust I
- ------------------------------------------
Antares Leveraged Capital Corporation 98.5%
Charter Oak Capital Management, Inc. 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation 84.8%
Oppenheimer Acquisition Corporation - 88.55%
Subsidiaries of MassMutual Holding Trust II
- -------------------------------------------
CM Advantage, Inc. -- (Liquidated in December 1997)
CM International, Inc.
CM Property Management, Inc. -- (Liquidated in December 1997)
High Yield Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
Westheimer 335 Suites, Inc.
Subsidiaries of MassMutual International
- ----------------------------------------
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A.
MassMutual International (Luxemburg) S. A.
MassMutual Holding MSC, Incorporated
- ------------------------------------
MassMutual/Carlson CBO N. V. - 100%
MassMutual Corporate Value Limited - 46%
9048 -- 5434 Quebec, Inc.
Affiliates of Massachusetts Mutual Life Insurance Company
- ---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
31
<PAGE>
Appendix A
Illustrations of Death Benefits, Cash
Surrender Values and Accumulated
Premiums
The following tables illustrate the way in which a Policy operates. They show
how the death benefit and cash surrender value could vary over an extended
period of time, assuming the Funds experience hypothetical gross rates of
investment return (i.e., investment income and capital gains and losses,
realized or unrealized), equivalent to constant gross annual rates of 0%, 6% and
12%. The tables are based on annual premiums of $1,200 for a nonsmoker male and
female age 35, both issued standard based on full underwriting. Separate tables
are shown for the current and guaranteed schedule of charges. These tables will
assist in the comparison of death benefits and cash surrender values for the
Policy with those under other variable life policies which may be issued by MML
Bay State or other companies.
1. The illustration on page A1 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000. The premium payment is $1,200 using a
current schedule of charges.
2. The illustration on page A2 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000. The premium payment is $1,200 using
guaranteed schedules of mortality and expense charges and current fund level
expenses.
3. The illustration on page A3 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200 using a
current schedule of charges.
4. The illustration on page A4 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200 using
guaranteed schedules of mortality and expense charges and current fund level
expenses.
The death benefits and cash surrender values for a Policy would be different
from the amount shown if the rates of return averaged 0%, 6% and 12% over a
period of years but varied above and below that average in individual Policy
Years. They would also differ if any Policy loan were made during the period of
time illustrated. They would also be different depending upon the allocation of
investment value to each division of the Separate Account, if the rates of
return for all the Funds averaged 0%, 6% or 12% but varied above or below that
average for particular Funds.
The death benefits and cash surrender values shown in illustrations 1 and 3
reflect the following current charges:
1. Administrative Charge, equal to a monthly $4.00 per Policy charge for
nonqualified policies.
2. Cost of Insurance Charge, based on the current rates being charged by the
Company for standard, fully underwritten risks.
3. Mortality and Expense Risk Charge, which is equal to .43% on an annual basis,
of the net asset value of the Fund shares held by the Separate Account.
4. Fund level expenses of .45% on an annual basis, of the net asset value of the
Fund shares held by the Separate Account. Actual Fund level expenses may vary.
The death benefits and cash surrender values shown in illustrations 2 and 4
reflect the following guaranteed maximum charges as well as the current fund
level expenses.
1. Administrative Charge, equal to $8.00 per month.
2. Cost of Insurance Charge, based on the 1980 CSO Mortality Table.
3. Mortality and Expense Risk Charge, which is equal to .43% on an annual basis,
of the net asset value of the Fund shares held by the Separate Account.
Cash surrender values shown in the tables reflect the deduction of the
applicable Administrative Surrender Charge (during the first ten Policy Years)
and the applicable Sales Load Surrender Charge (during the first fifteen Policy
Years). Taking into account the Mortality and Expense Risk Charge and the Fund
level expenses, the effect is that for gross annual rates of return of 0%, 6%
and 12%, the actual net annual rate of return would be -0.826%, 5.125% and
11.075% respectively.
MassMutual has agreed to bear expenses of the Funds (other than the management
fee, interest, taxes, brokerage commissions and extraordinary expenses) in
excess of .11% of average daily net asset value of each Fund through April 30,
1999. During 1997 no expenses were required to be reimbursed pursuant to this
undertaking.
Currently no charge is made against the Separate Account for federal income
taxes but MML Bay State reserves the right to charge the Separate Account for
federal income taxes attributable to the Separate Account if such taxes are
imposed in the future.
The second column of each table shows the amounts which would accumulate if an
amount equal to the annual premium were invested to earn interest after taxes of
5% per year, compounded annually.
The tables are based on the assumptions that the Policyowner has not requested
an increase or decrease in the Selected Face Amount, that no Policy loans, or
additional premium payments have been made, and no transaction charges have been
incurred, and that the entire Account Value under the Policy is allocated to the
Funds.
A
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount
$1,200 Annual Premium
Using Current Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ -------------- -------- -------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $ 100,000 $ 178 $ 238 $ 297
2 2,583 100,000 100,000 100,000 1,055 1,231 1,414
3 3,972 100,000 100,000 100,000 1,947 2,297 2,677
4 5,431 100,000 100,000 100,000 2,851 3,437 4,097
5 6,962 100,000 100,000 100,000 3,740 4,624 5,661
6 8,570 100,000 100,000 100,000 4,611 5,859 7,383
7 10,259 100,000 100,000 100,000 5,465 7,145 9,282
8 12,032 100,000 100,000 100,000 6,299 8,483 11,376
9 13,893 100,000 100,000 100,000 7,114 9,875 13,686
10 15,848 100,000 100,000 100,000 7,906 11,322 16,236
15 27,189 100,000 100,000 100,000 11,580 19,533 33,723
20 41,663 100,000 100,000 146,127 14,001 28,986 61,918
25 60,136 100,000 100,000 218,192 15,184 40,377 106,957
30 (Age 65) 83,713 100,000 100,000 321,234 15,220 54,789 179,460
35 113,804 100,000 115,054 466,822 13,270 72,819 295,457
40 152,208 100,000 134,403 682,774 6,977 93,988 477,464
45 201,222 0 154,882 993,564 0 118,230 758,446
50 263,778 0 178,480 1,455,511 0 145,106 1,183,343
</TABLE>
- --------------------------------------------------------------------------------
It is emphasized that the hypothetical investment rates of return shown above
and elsewhere in this prospectus are illustrative only and should not be deemed
a representation of past or future investment rates of return. Actual rates of
return may be more or less than those shown. The death benefits and cash
surrender values for a policy would be different from the amounts shown if the
rates of return averaged 0%, 6% and 12% over a period of years, but varied above
or below that average in individual policy years. They would also be different,
depending on the allocation of investment value to each division of the separate
account, if the rates of return over all divisions averaged 0%, 6% or 12% but
varied above or below that average for individual divisions. They would also
differ if any policy loan were made during the period. No representations can be
made by MML Bay State or the trust that these hypothetical rates of return can
be achieved for any one year or sustained over any period of time.
A1
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount
$1,200 Annual Premium
Using Guaranteed Schedules Of Mortality and Expense
Charges as well as Current Fund Level Expenses
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ----------------------------
Year PerYear 0% 6% 12% 0% 6% 12%
- ------ -------------- -------- -------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $ 100,000 $ 119 $ 177 $ 235
2 2,583 100,000 100,000 100,000 938 1,107 1,282
3 3,972 100,000 100,000 100,000 1,771 2,104 2,466
4 5,431 100,000 100,000 100,000 2,614 3,169 3,796
5 6,962 100,000 100,000 100,000 3,439 4,275 5,257
6 8,570 100,000 100,000 100,000 4,244 5,422 6,863
7 10,259 100,000 100,000 100,000 5,029 6,612 8,628
8 12,032 100,000 100,000 100,000 5,792 7,845 10,570
9 13,893 100,000 100,000 100,000 6,532 9,123 12,708
10 15,848 100,000 100,000 100,000 7,249 10,449 15,064
15 27,189 100,000 100,000 100,000 10,505 17,904 31,165
20 41,663 100,000 100,000 134,935 12,481 26,332 57,176
25 60,136 100,000 100,000 200,489 12,852 36,043 98,279
30 (Age 65) 83,713 100,000 100,000 289,765 10,535 47,088 161,880
35 113,804 100,000 100,000 407,362 3,219 59,555 257,824
40 152,208 0 105,783 570,030 0 73,974 398,622
45 201,222 0 116,304 783,232 0 88,781 597,887
50 263,778 0 126,709 1,073,126 0 103,015 872,460
</TABLE>
- --------------------------------------------------------------------------------
It is emphasized that the hypothetical investment rates of return shown above
and elsewhere in this prospectus are illustrative only and should not be deemed
a representation of past or future investment rates of return. Actual rates of
return may be more or less than those shown. The death benefits and cash
surrender values for a policy would be different from the amounts shown if the
rates of return averaged 0%, 6% and 12% over a period of years, but varied above
or below that average in individual policy years. They would also be different,
depending on the allocation of investment value to each division of the separate
account, if the rates of return over all divisions averaged 0%, 6% or 12% but
varied above or below that average for individual divisions. They would also
differ if any policy loan were made during the period. No representations can be
made by MML Bay State or the trust that these hypothetical rates of return can
be achieved for any one year or sustained over any period of time.
A2
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount
$1,200 Annual Premium
Using Current Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- ------- ------- --------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $ 100,000 $ 224 $ 284 $ 345
2 2,583 100,000 100,000 100,000 1,121 1,299 1,484
3 3,972 100,000 100,000 100,000 2,048 2,402 2,786
4 5,431 100,000 100,000 100,000 2,968 3,561 4,230
5 6,962 100,000 100,000 100,000 3,872 4,769 5,820
6 8,570 100,000 100,000 100,000 4,759 6,026 7,572
7 10,259 100,000 100,000 100,000 5,629 7,335 9,503
8 12,032 100,000 100,000 100,000 6,481 8,699 11,635
9 13,893 100,000 100,000 100,000 7,316 10,120 13,989
10 15,848 100,000 100,000 100,000 8,132 11,602 16,591
15 27,189 100,000 100,000 107,146 11,939 20,035 34,445
20 41,663 100,000 100,000 168,404 14,738 30,025 63,072
25 60,136 100,000 100,000 250,713 16,694 42,439 109,006
30 (Age 65) 83,713 100,000 115,275 363,792 17,675 57,927 182,810
35 113,804 100,000 133,226 522,779 17,049 76,567 300,448
40 152,208 100,000 152,250 750,246 14,804 99,510 490,357
45 201,222 100,000 175,355 1,094,232 8,730 127,069 792,922
50 263,778 0 199,262 1,585,059 0 158,144 1,257,983
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
It is emphasized that the hypothetical investment rates of return shown above
and elsewhere in this prospectus are illustrative only and should not be deemed
a representation of past or future investment rates of return. Actual rates of
return may be more or less than those shown. The death benefits and cash
surrender values for a policy would be different from the amounts shown if the
rates of return averaged 0%, 6% and 12% over a period of years, but varied above
or below that average in individual policy years. They would also be different,
depending on the allocation of investment value to each division of the separate
account, if the rates of return over all divisions averaged 0%, 6% or 12% but
varied above or below that average for individual divisions. They would also
differ if any policy loan were made during the period. No representations can be
made by MML Bay State or the trust that these hypothetical rates of return can
be achieved for any one year or sustained over any period of time.
A3
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount
$1,200 Annual Premium
Using Guaranteed Schedule Of Mortality and Expense
Charges as well as Current Fund Level Expenses
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- ------- ------- --------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $ 100,000 $ 172 $ 230 $ 288
2 2,583 100,000 100,000 100,000 1,014 1,185 1,363
3 3,972 100,000 100,000 100,000 1,885 2,224 2,592
4 5,431 100,000 100,000 100,000 2,748 3,314 3,952
5 6,962 100,000 100,000 100,000 3,592 4,445 5,446
6 8,570 100,000 100,000 100,000 4,417 5,619 7,088
7 10,259 100,000 100,000 100,000 5,220 6,836 8,892
8 12,032 100,000 100,000 100,000 6,002 8,099 10,878
9 13,893 100,000 100,000 100,000 6,764 9,410 13,067
10 15,848 100,000 100,000 100,000 7,504 10,773 15,484
15 27,189 100,000 100,000 100,000 10,917 18,488 32,033
20 41,663 100,000 100,000 156,608 13,336 27,551 58,655
25 60,136 100,000 100,000 232,563 14,795 38,643 101,114
30 (Age 65) 83,713 100,000 104,275 335,259 14,920 52,400 168,472
35 113,804 100,000 119,206 474,739 12,321 68,509 272,839
40 152,208 100,000 132,724 661,264 4,842 86,748 432,199
45 201,222 0 146,018 917,075 0 105,810 664,547
50 263,778 0 157,246 1,252,018 0 124,798 993,665
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
It is emphasized that the hypothetical investment rates of return shown above
and elsewhere in this prospectus are illustrative only and should not be deemed
a representation of past or future investment rates of return. Actual rates of
return may be more or less than those shown. The death benefits and cash
surrender values for a policy would be different from the amounts shown if the
rates of return averaged 0%, 6% and 12% over a period of years, but varied above
or below that average in individual policy years. They would also be different,
depending on the allocation of investment value to each division of the separate
account, if the rates of return over all divisions averaged 0%, 6% or 12% but
varied above or below that average for individual divisions. They would also
differ if any policy loan were made during the period. No representations can be
made by MML Bay State or the trust that these hypothetical rates of return can
be achieved for any one year or sustained over any period of time.
A4
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission (the "Commission") such supplementary and
periodic information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
The Bylaws of MML Bay State provide for indemnification of directors and
officers as follows:
MML Bay State directors and officers are indemnified under its by-laws. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of MML Bay
State pursuant to the foregoing provisions, or otherwise, MML Bay State has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by MML Bay
State of expenses incurred or paid by a director, officer or controlling person
of MML Bay State in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, MML Bay State will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
REPRESENTATIONS UNDER SECTION 26 (e)(2)(A)
OF THE INVESTMENT COMPANY ACT OF 1940
MML Bay State Life Insurance Company hereby represents that the fees and charges
deducted under the flexible premium variable whole life insurance policies
described in this Registration Statement in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by MML Bay State Life Insurance Company.
1
<PAGE>
CONTENTS OF POST-EFFECTIVE Amendment No. 10
This Post-effective Amendment is comprised of the following documents:
The Facing Sheet.
The Prospectus consisting of 48 pages.
The Undertaking to File Reports.
The Signatures.
Written Consents of the Following Persons:
1. Coopers & Lybrand L.L.P, independent accountants;
2. Counsel opining as to the legality of securities being registered;
3. Craig Waddington, Actuary.
The following Exhibits:
99. The following Exhibits correspond to those required by Paragraph A of
the instructions as to Exhibits in Form N-8B-2:
A.1. Resolution of Board of Directors of MML Bay State establishing
the Separate Account.
2. Not applicable.
3. Distribution Contracts:
a. Form of Distribution Servicing Agreement between
MMLISI and MML Bay State./1/
b. Not applicable.
c. Not applicable.
4. Not applicable.
5. Form of Flexible Premium Variable Whole Life Insurance
Policy.
6. a. Certificate of Incorporation of MML Bay State.
b. By-Laws of MML Bay State.
- --------------------
/1/ Incorporated by reference to Post-Effective Amendment No. 1 of
Registration Statement 33-82060 as an exhibit filed with the Commission
effective May 1, 1996.
2
<PAGE>
7. Not applicable.
8. Not applicable.
9. Not applicable.
10. Form of Application for a flexible premium variable whole
life insurance policy.
11. Memorandum describing MML Bay State's issuance, transfer,
and redemption procedures for the Policy.
B. Opinion and Consent of Counsel as to the legality of the
securities being registered.
C. No financial statement will be omitted from the Prospectus
pursuant to Instruction 1(b) or (c) of Part I.
D. Not applicable.
E. Consent of Coopers & Lybrand L.L.P.
F. Opinion and consent of Craig Waddington as to actuarial matters
pertaining to the securities being registered.
G. Powers of Attorney/2/
- --------------------
/1/ Incorporated by reference to Post-Effective Amendment No. 1 of
Registration Statement 33-82060 as an exhibit filed with the Commission
effective May 1, 1996.
/2/ Incorporated by reference to Post-Effective Amendment No. 4 to
Registration Statement No. 33-79750 as an exhibit filed with the Commission
effective May 1, 1998.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant, MML
Bay State Variable Life Separate Account I, certifies that it meets all of the
requirement for effectiveness of this Post-Effective Amendment No. 10 pursuant
to Rule 485(b) under the Securities Act of 1933 and has caused this
Post-Effective Amendment No. 10 to Registration Statement No. 33-19605 to be
signed on its behalf by the undersigned thereunto duly authorized, all in the
city of Springfield and the Commonwealth of Massachusetts, on the 10th day of
April, 1998.
MML BAY STATE VARIABLE LIFE SEPARATE ACCOUNT I
MML BAY STATE LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
---------------------------------------------------------------
Lawrence V. Burkett, Jr., President and Chief Executive Officer
MML Bay State Life Insurance Company
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-Fact pursuant to
- --------------------- powers of attorney incorporated by reference.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 10 to Registration Statement No. 33-19605 has been signed by the following
persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Lawrence V. Burkett, Jr* Director, President and Chief April 3, 1998
- ------------------------------ Executive Officer
Lawrence V. Burkett, Jr.
/s/ Edward M. Kline* Treasurer (Principal Financial April 3, 1998
- ---------------------- Officer)
Edward M. Kline
/s/ John Miller, Jr* Second Vice President and April 3, 1998
- ---------------------- Comptroller (Principal Accounting
John Miller, Jr Officer)
/s/ Paul D. Adornato* Director April 3, 1998
- -----------------------
Paul D. Adornato
/s/ John B. Davies* Director April 3, 1998
- ---------------------
John B. Davies
/s/ Anne Melissa Dowling* Director April 3, 1998
- ---------------------------
Anne Melissa Dowling
/s/ Maureen R. Ford* Director April 3, 1998
- ----------------------
Maureen R. Ford
/s/ Isadore Jermyn* Director April 3, 1998
- ---------------------
Isadore Jermyn
/s/ Stuart H. Reese* Director April 3, 1998
- ----------------------
Stuart H. Reese
/s/ Richard M. Howe On April 3, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
</TABLE>
4
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
--------------------------------------
As Counsel for MML Bay State, I, Richard M. Howe, have reviewed this
Post-Effective Amendment No. 10 to Registration Statement No. 33-19605, and
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/ Richard M. Howe
- -------------------
Richard M. Howe
Second Vice President & Assoc. General Counsel
Massachusetts Mutual Life Insurance Company
5
<PAGE>
EXHIBIT LIST
99.A.1. Resolution of Board of Directors of MML Bay State establishing the
Separate Account.
99.A.5. Form of Flexible Premium Variable Whole Life Insurance Policy.
99.A.6.a. Certificate of Incorporation of MML Bay State.
99.A.6.b. By-Laws of MML Bay State.
99.A.10. Form of Application for a flexible premium variable whole life
insurance policy.
99.A.11. Memorandum describing MML Bay State's issuance, transfer, and
redemption procedures for the Policy.
99.B. Opinion and Consent of Richard M. Howe
99.E. Consent of Coopers & Lybrand, L.L.P.
99.F. Opinion and Consent of Craig Waddington
<PAGE>
Exhibit 99.A.1.
RESOLUTION OF BOARD OF DIRECTORS OF MML BAY STATE
ESTABLISHING THE SEPARATE ACCOUNT
WRITTEN CONSENT TO ACTION
TAKEN WITHOUT AND IN LIEU
OF A MEETING OF THE EXECUTIVE COMMITTEE
The undersigned, being all the members of the Executive Committee of MML Bay
State Life Insurance Company (the "Company"), pursuant to Section 351.340 (2) of
the Revised Statutes of Missouri, hereby consent to the following actions:
VOTED: That the Company establish a separate investment account, to be known as
- -----
"MML Bay State Variable Life Separate Account I" or such other name as shall be
determined by the President (referred to herein as "Separate Account I"), in
accordance with the provisions of Section 376.309 of Chapter 376 of the Missouri
Statutes for the purpose of investing payments to be received under variable
life insurance contracts to be issued by the Company (the "Contracts"); that the
assets of Separate Account I be invested in shares of MML Equity Investment
Company, Inc., MML Money Market Investment Company, Inc., and MML Managed Bond
Investment Company, Inc. or, in lieu thereof or in addition thereto, in the
shares of any other investment company registered under the Investment Company
Act of 1940, at the net asset value of such shares; and that all necessary steps
be taken to comply with applicable federal and state laws in order that the
Contracts may be sold in all jurisdictions in which the Company is authorized to
do a variable life insurance business.
VOTED: That Separate Account I be organized as a unit investment trust, that it
- -----
be registered, if necessary or appropriate, with the United States Securities
and Exchange Commission under the Investment Company Act of 1940, and that the
Contracts be registered under the Securities Act of 1933; and that for that
purpose the Chairman, the President, any Vice President and the Secretary of the
Company be and they are, and each of them singly is, hereby authorized to
execute and file or cause to be filed with the Securities and Exchange
Commission, in the name of and on behalf of the Company and Separate Account I,
a Notification of Registration of Form N-8A, a Registration Statement on Form
N-8B-2 and a Registration Statement on Form S-6, or on any other forms which the
rules of said Commission may permit, and to execute and file or cause to be
filed, in the name of and on behalf of the Company and Separate Account I, such
application or applications for, or notification of claim of, exemptions
(including Form N-6EI-1 and such other forms which the rules of the Commission
may permit or require) from provisions of the Investment Company Act of 1940 and
the rules thereunder and such other documents and such amendments (including
post-effective amendments) and to take such other action as the officer or
officers so acting may consider necessary or desirable.
<PAGE>
Exhibit 99.A.5
[LETTERHEAD OF MML BAY STATE LIFE INSURANCE COMPANY APPEARS HERE]
Flexible Premium
Variable Whole Life Insurance Policy
- --------------------------------------------------------------------------------
Policy Number 0 000 000
Insured JOHN A. DOE
Selected Face Amount $100,000
- --------------------------------------------------------------------------------
Dear Policy Owner:
READ YOUR POLICY CAREFULLY. It has been written in readable language to help you
understand its terms. We have used examples to explain some of its provisions.
These examples do not reflect the actual amounts or status of this policy. As
you read through the policy, remember the words "we", "us" and "our" refer to
MML Bay State Life Insurance Company.
We will, subject to the terms of this policy, pay the death benefit to the
Beneficiary when due proof of the Insured's death is received at our Principal
Administrative Office. The terms of this policy are contained on this and the
following pages.
For service or information on this policy, contact the agent who sold the
policy, any of our agency offices or our Principal Administrative Office.
YOU HAVE A RIGHT TO RETURN THIS POLICY. If you decide not to keep this
policy, return it within ten days after you receive it, or within 10 days after
you receive the notice of right to withdraw, or within 45 days after the date of
the Part 1 of the application for this policy, whichever is latest. It may be
returned by delivering or mailing it to our Principal Administrative Office, to
any of our agency offices or to the agent who sold the policy. Then, the policy
will be as though it had never been issued. We will promptly refund (a) any
premium paid for this policy, plus (b) interest credited to this policy under
the Guaranteed Principal Account, plus or minus (c) an amount that reflects the
investment experience of the investment divisions of the Separate Account under
this policy to the date the policy is received by us.
Signed for MML Bay State Life Insurance Company.
Sincerely yours,
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
President Secretary
This Policy provides that: Insurance is payable when the Insured dies.
Within specified limits, flexible premiums may be
paid during the Insured's lifetime.
No dividends will be paid.
The amount of death benefit and the duration of insurance coverage may be fixed
or variable as described in Parts 3 and 5.
The variable account value of the policy may increase or decrease in accordance
with the experience of the Separate Account. There are no minimum guarantees as
to the variable account value.
The fixed account value of the policy earns interest at a rate not less than the
minimum described in the Interest On Fixed Account Value provision.
B960-1A-8800
<PAGE>
Policy Summary
This Summary briefly describes some of the major policy provisions. Since it
does not go into detail, the actual provisions will control. See those
provisions for full information and any limits that may apply. The "Where To
Find It" on the inside of the back cover shows where these provisions may be
found.
This is a variable whole life insurance policy. We will pay a death benefit if
the Insured dies while the policy is in force. "In force" means that the
insurance has not terminated. "Variable" means that all values which depend on
the investment performance of the Separate Account shown on the Schedule Page
are not guaranteed as to dollar amount.
Premiums for this policy are flexible. After the first premium has been paid,
there is no requirement that any specific amount of premium be paid on any date.
Instead, within the limits stated in the policy, any amount may be paid on any
date before the death of the Insured.
Premiums are applied to increase the value of this policy. Monthly charges are
deducted from the value of this policy each month. If there is not enough value
to pay the monthly charges for a month, the policy will terminate at the end of
61 days. There is, however, a right to reinstate the policy.
There are other rights available while the Insured is living. These include:
. The right to assign this policy.
. The right to change the Owner or any Beneficiary.
. The right to surrender this policy.
. The right to make withdrawals.
. The right to make loans.
. The right to increase the Selected Face Amount.
. The right to allocate net premiums among the Guaranteed Principal
Account and the divisions of the Separate Account.
. The right to transfer values between the Guaranteed Principal Account
and the divisions of the Separate Account.
The policy also includes a number of Payment Options. These provide alternate
ways to pay the death benefit or the amount payable upon surrender of the
policy.
B960-1A-8800
<PAGE>
THE SCHEDULE PAGE
THIS PAGE SHOWS SPECIFIC INFORMATION ABOUT THIS POLICY AND IS REFERRED TO
THROUGHOUT THE POLICY
POLICY NUMBER 0 000 000
INSURED JOHN A DOE
SELECTED FACE AMOUNT $ 100,000
ISSUE DATE JAN 01 1988
POLICY DATE JAN 01 1988
INSURED'S AGE ON POLICY DATE 35 MALE
- --------------------------------------------------------------------------------
BASIC POLICY INFORMATION
- ------------------------
SELECTED MINIMUM
PLAN FACE AMOUNT FACE AMOUNT
- ---- ----------- -----------
FLEXIBLE PREMIUM VARIABLE $ 100,000 SEE MINIMUM FACE
WHOLE LIFE AMOUNT PROVISION
- --------------------------------------------------------------------------------
PREMIUM INFORMATION AS OF JAN 01 1988
- -------------------
FIRST PREMIUM $ 1,000.00
PLANNED ANNUAL PREMIUM $ 1,000.00
PLANNED PREMIUM ON OTHER FREQUENCIES IS AS FOLLOWS:
SEMIANNUAL QUARTERLY
---------- ---------
$ 500.00 $ 250.00
THE MAXIMUM LIMIT FOR PREMIUMS IN ANY POLICY YEAR IS $1310.00 IF PAYMENT OF A
GREATER AMOUNT WOULD INCREASE THE AMOUNT OF INSURANCE WHICH REQUIRES A CHARGE.
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT INFORMATION
- ----------------------------
THE SEPARATE ACCOUNT REFERRED TO IN THIS POLICY IS MML BAY STATE VARIABLE
LIFE SEPARATE ACCOUNT 1.
- --------------------------------------------------------------------------------
OTHER INFORMATION
- -----------------
THIS IS A NONSMOKER'S POLICY.
OWNER AND BENEFICIARY - SEE APPLICATION ATTACHED TO THIS POLICY
BASIS OF COMPUTATION - FOR MAXIMUM MONTHLY MORTALITY CHARGES, MINIMUM ANNUAL
- --------------------
INTEREST RATE FOR THE GUARANTEED PRINCIPAL ACCOUNT AND MINIMUM CASH SURRENDER
VALUES.
MORTALITY TABLE -- COMMISSIONERS 1980 STANDARD ORDINARY NONSMOKER MORTALITY
TABLE - MALE
INTEREST RATE -- 4% PER YEAR
POLICY NO. 0 000 000 -1-
<PAGE>
TABLE OF MAXIMUM MONTHLY MORTALITY CHARGES
THESE MAXIMUM MONTHLY MORTALITY CHARGES ARE FOR EACH $1,000 OF INSURANCE WHICH
REQUIRES A CHARGE. THESE CHARGES APPLY TO THE ORIGINAL SELECTED FACE AMOUNT OF
$100,000, ISSUED ON JAN 01 1988.
POLICY YEAR MAXIMUM MONTHLY POLICY YEAR MAXIMUM MONTHLY
BEGINNING MORTALITY CHARGE BEGINNING MORTALITY CHARGE
----------- ---------------- ----------- ----------------
JAN 01 1988 0.14096 JAN 01 2023 2.94130
JAN 01 1989 0.14764 JAN 01 2024 3.31274
JAN 01 1990 0.15683 JAN 01 2025 3.63093
JAN 01 1991 0.16685 JAN 01 2026 4.05839
JAN 01 1992 0.17854 JAN 01 2027 4.54126
JAN 01 1993 0.19107 JAN 01 2028 5.06274
JAN 01 1994 0.20611 JAN 01 2029 5.62182
JAN 01 1995 0.22115 JAN 01 2030 6.21387
JAN 01 1996 0.23870 JAN 01 2031 6.83324
JAN 01 1997 0.25626 JAN 01 2032 7.49616
JAN 01 1998 0.27717 JAN 01 2033 8.22966
JAN 01 1999 0.29975 JAN 01 2034 9.05445
JAN 01 2000 0.32401 JAN 01 2035 9.99708
JAN 01 2001 0.34996 JAN 01 2036 11.07332
JAN 01 2002 0.37927 JAN 01 2037 12.26712
JAN 01 2003 0.41026 JAN 01 2038 13.55591
JAN 01 2004 0.44713 JAN 01 2039 14.91787
JAN 01 2005 0.48989 JAN 01 2040 16.34412
JAN 01 2006 0.53771 JAN 01 2041 17.80841
JAN 01 2007 0.59311 JAN 01 2042 19.33267
JAN 01 2008 0.65444 JAN 01 2043 20.94168
JAN 01 2009 0.72255 JAN 01 2044 22.66794
JAN 01 2010 0.79493 JAN 01 2045 24.57677
JAN 01 2011 0.87327 JAN 01 2046 26.76407
JAN 01 2012 0.96182 JAN 01 2047 29.63735
JAN 01 2013 1.06061 JAN 01 2048 33.93112
JAN 01 2014 1.17052 JAN 01 2049 41.27938
JAN 01 2015 1.29585 JAN 01 2050 56.04155
JAN 01 2016 1.43921 JAN 01 2051 AND LATER 83.33333
JAN 01 2017 1.60155
JAN 01 2018 1.78129
JAN 01 2019 1.97513
JAN 01 2020 2.18574
JAN 01 2021 2.41241
JAN 01 2022 2.66044
POLICY NO. 0 000 000 -2-
<PAGE>
TABLE OF MINIMUM FACE AMOUNT PERCENTAGES
THE MINIMUM FACE AMOUNT ON ANY DATE IS A PERCENTAGE OF THE ACCOUNT VALUE ON THAT
DATE. THE PERCENTAGES WHICH APPLY ARE SHOWN BELOW.
POLICY YEAR MINIMUM FACE POLICY YEAR MINIMUM FACE
BEGINNING AMOUNT PERCENTAGE BEGINNING AMOUNT PERCENTAGE
----------- ----------------- ----------- -----------------
JAN 01 1988 452% JAN 01 2023 155%
JAN 01 1989 424% JAN 01 2024 152%
JAN 01 1990 410% JAN 01 2025 148%
JAN 01 1991 396% JAN 01 2026 145%
JAN 01 1992 383% JAN 01 2027 143%
JAN 01 1993 370% JAN 01 2028 140%
JAN 01 1994 358% JAN 01 2029 138%
JAN 01 1995 347% JAN 01 2030 135%
JAN 01 1996 335% JAN 01 2031 133%
JAN 01 1997 324% JAN 01 2032 131%
JAN 01 1998 314% JAN 01 2033 129%
JAN 01 1999 304% JAN 01 2034 127%
JAN 01 2000 294% JAN 01 2035 126%
JAN 01 2001 285% JAN 01 2036 124%
JAN 01 2002 276% JAN 01 2037 123%
JAN 01 2003 268% JAN 01 2038 121%
JAN 01 2004 259% JAN 01 2039 120%
JAN 01 2005 251% JAN 01 2040 119%
JAN 01 2006 244% JAN 01 2041 118%
JAN 01 2007 236% JAN 01 2042 117%
JAN 01 2008 229% JAN 01 2043 116%
JAN 01 2009 223% JAN 01 2044 115%
JAN 01 2010 216% JAN 01 2045 114%
JAN 01 2011 210% JAN 01 2046 112%
JAN 01 2012 204% JAN 01 2047 111%
JAN 01 2013 199% JAN 01 2048 110%
JAN 01 2014 193% JAN 01 2049 109%
JAN 01 2015 188% JAN 01 2050 107%
JAN 01 2016 183% JAN 01 2051 106%
JAN 01 2017 179% JAN 01 2052 104%
JAN 01 2018 174% JAN 01 2053 AND LATER 100%
JAN 01 2019 170%
JAN 01 2020 166%
JAN 01 2021 162%
JAN 01 2022 158%
POLICY NO. 0 000 000 -3-
<PAGE>
TABLE OF SURRENDER CHARGES
THE FOLLOWING CHARGES APPLY TO THE ORIGINAL SELECTED FACE AMOUNT OF $100,000
ISSUED ON JAN 1, 1988.
THE CHARGES ARE THE SUM OF A AND B MULTIPLIED BY C.
DATE A + B x C
---- - - -
JAN 01 1988 $450.00 B* 1
JAN 01 1989 400.00 B 1
JAN 01 1990 350.00 B 1
JAN 01 1991 300.00 B 1
JAN 01 1992 250.00 B 1
JAN 01 1993 200.00 B 1
JAN 01 1994 150.00 B 1
JAN 01 1995 100.00 B 1
JAN 01 1996 50.00 B 1
JAN 01 1997 0 B 1
JAN 01 1998 0 B 1
JAN 01 1999 0 B .9
JAN 01 2000 0 B .75
JAN 01 2001 0 B .55
JAN 01 2002 0 B .30
JAN 01 2003 0 0 0
*WHERE B EQUALS:
25% OF TOTAL PREMIUMS PAID FROM 0 THROUGH $945.00; PLUS
5% OF TOTAL PREMIUMS PAID FROM $945.01 THROUGH $1,890.00; PLUS
4% OF TOTAL PREMIUMS PAID FROM $1,890.01 THROUGH $2,835.00.
SURRENDER CHARGES REDUCE UNIFORMLY EACH MONTH BETWEEN THE DATES SHOWN.
POLICY NO. 0 000 000 -4-
<PAGE>
TABLE OF MINIMUM ACCOUNT VALUES AFTER WITHDRAWAL
FOR POLICY MINIMUM ACCOUNT VALUE
YEAR BEGINNING REQUIRED AFTER WITHDRAWAL
-------------- -------------------------
JAN 01 1988 605.00
JAN 01 1989 1210.00
JAN 01 1990 1815.00
JAN 01 1991 2420.00
JAN 01 1992 3025.00
JAN 01 1993 3630.00
JAN 01 1994 4235.00
JAN 01 1995 4840.00
JAN 01 1996 5445.00
JAN 01 1997 6050.00
JAN 01 1998 6655.00
JAN 01 1999 7260.00
JAN 01 2000 7865.00
JAN 01 2001 8470.00
JAN 01 2002 9075.00
JAN 01 2003 9680.00
JAN 01 2004 10285.00
JAN 01 2005 10890.00
JAN 01 2006 11495.00
JAN 01 2007 12100.00
JAN 01 2012 # 15125.00
JAN 01 2014 # 16335.00
JAN 01 2017 # 18150.00
# ANNIVERSARIES NEAREST AGES 60, 62, AND 65
THESE MINIMUMS APPLY TO THE ORIGINAL SELECTED FACE AMOUNT OF $100,000 ISSUED ON
JANUARY 1, 1988.
MINIMUM ACCOUNT VALUES FOR POLICY YEARS NOT SHOWN WILL BE FURNISHED ON REQUEST.
POLICY NO. 0 000 000 -5-
<PAGE>
Part l. The Basics Of This Policy
In this Part we discuss some insurance concepts
that are necessary to understand this policy.
The Parties Involved - The Owner is the person who owns this policy, as
Owner, Insured, shown on our records.
Beneficiary, Irrevocable
Beneficiary The Insured is the person whose life this policy
insures. The Insured may be the Owner of this
policy, or someone else may be the Owner.
Example: You buy a policy that insures your own
life and name yourself as Owner. In this
case, you are both the Insured and Owner.
If you buy a policy that insures your son
and name yourself as Owner, then the
Insured and Owner are different people.
A Beneficiary is any person named on our records to
receive insurance proceeds after the Insured dies.
There may be different classes of Beneficiaries,
such as primary and secondary. These classes set
the order of payment. There may be more than one
Beneficiary in a class.
Example: Debbie is named as primary (first)
Beneficiary. Anne and Scott are named as
Beneficiaries in the secondary class. If
Debbie is alive when the Insured dies, she
receives the death benefit. But if Debbie
is dead and Anne and Scott are alive when
the Insured dies, Anne and Scott receive
the death benefit.
Any Beneficiary may be named an Irrevocable
Beneficiary. An Irrevocable Beneficiary is one
whose consent is needed to change that Beneficiary.
Also, this Beneficiary must consent to the exercise
of certain other rights.
Dates - Policy Date, The Policy Date is shown on the Schedule Page. It
Policy Anniversary Date, is the starting point for determining Policy
Policy Year, Issue Date, Anniversary Dates and Policy Years. The first
Monthly Calculation Policy Anniversary Date is one year after the
Date, Valuation Date, Policy Date. The period from the Policy Date to the
Valuation Period, first Policy Anniversary Date, or from one Policy
Register Date Anniversary Date to the next, is called a Policy
Year.
Example: The Policy Date is June 10, 19X1. The
first Policy Anniversary Date is June 10,
19X2. The period from June 10, 19X1 to
June 10, 19X2 is a Policy Year.
The Issue Date is also shown on the Schedule Page.
It is the same as the Policy Date. The Issue Date
is used to determine the start of the suicide and
contestability periods. We discuss contestability
below. See "Part 5. The Death Benefit" for a
discussion of the suicide exclusion.
The Monthly Calculation Date is the monthly date on
which we deduct monthly charges for this policy.
The first Monthly Calculation Date is the Policy
Date. Subsequent Monthly Calculation Dates are the
same day of each month thereafter.
A valuation date is any date on which the New York
Stock Exchange (or its successor) is open for
trading. A valuation period is the period of time
from the end of one valuation date to the end of
the next valuation date.
The Register Date is the date on which the first
net premium payment for this policy is allocated to
the Separate Account or the Guaranteed Principal
Account. It is the Valuation Date which is on, or
next follows, the latest of:
. The Policy Date; or
. The date on which we receive a completed
Part 1 of the application for this
policy at our Principal Administrative
Office; or
. The date on which we receive the first
premium for this policy at our Principal
Administrative Office.
- 6 -
B960-1A-8800
<PAGE>
- 7 -
Policy A Legal Contract This policy is a legal contract between the Owner
and us. The entire contract consists of the
application and the policy, which includes any
riders the policy has. We have issued this policy
in return for the application and the payment of
the first premium. Any changes or waiver of its
terms must be in writing and signed by our
Secretary or an Assistant Secretary to be
effective.
Policy Is Not This policy is "not participating," which means
Participating that no dividends are payable on this policy.
Representations And We rely on all statements made by or for the
Contestability Insured in the application(s). Legally, those
statements are considered to be representations and
not warranties. We can contest the validity of this
policy or any subsequent increases in the Selected
Face Amount for any material misrepresentation of a
fact. To do so, however, the misrepresentation must
have been made in the application, or in a
supplemental application to increase the Selected
Face Amount, and a copy of the application must
have been attached to this policy when issued, or
made a part of the policy when changes in the
Selected Face Amount become effective.
Except for any increases in the Selected Face
Amount, we must bring legal action to contest this
policy within two years from its Issue Date. For
any increase in the Selected Face Amount, we must
bring legal action to contest that increase:
. Within two years from the effective date
of the increase (except for increases
provided by any insurability protection
type of rider this policy has).
. Within two years from the Issue Date of
the insurability protection type of
rider, if the increase is provided by
that rider.
Misstatement Of Age Or If the Insured's date of birth or sex as given in
Sex the application is not correct, an adjustment will
be made. If the adjustment is made when the Insured
dies, the death benefit will reflect the amount
provided by the most recent mortality charge
according to the correct age and sex. If the
adjustment is made before the Insured dies, then
future monthly deductions will be based on the
correct age and sex.
Meaning Of In Force "In force" means that the insurance provided by
this policy has not terminated. This policy will be
in force from its Issue Date or, if later, the date
the first premium is paid.
Principal Administrative Our Principal Administrative Office is in
Office Springfield, Massachusetts. The address is MML Bay
State Life Insurance Company, Springfield,
Massachusetts 0llll.
Part 2. Premium Payments
Premiums are the payments that may be paid to us to
increase the account value of this policy.
The First Premium The first premium for this policy is shown on the
Schedule Page. This premium is due on the Policy
Date. This policy will not be in force until the
first premium has been paid.
Planned Premiums The planned annual premium for this policy is shown
on the Schedule Page. Planned premiums on other
frequencies are also shown on that page. The
frequency of planned premiums for this policy is as
elected in the application. This frequency may be
changed by giving us advance written notice.
We also provide a pre-authorized payment plan. This
plan, and any other alternate premium plans we
provide, are covered by the rules and rates we set.
The payment of planned premiums on the frequency
elected does not guarantee that this policy will
continue in force.
B960-1A-8800
<PAGE>
Premium Flexibility After the first premium has been paid, there is no
And Premium Notices requirement that any amount of premium be paid on
any date. Subject to the Right To Refund Premiums
provision in this Part, while the policy is in
force any amount of premium may be paid at any time
before the death of the Insured. Each premium paid
must be at least $10 or, if greater, the amount
needed to prevent termination, as discussed in the
Grace Period And Termination provision in Part 3.
We will send premium notices for the planned
premium according to the amount and frequency in
effect. We will stop sending notices for the
planned premium if no premium has been paid for l8
consecutive months. However, if a premium is paid
after that time, we will send notices for the
planned premium again.
We will also send notice of any premium needed to
prevent termination of this policy.
Notices will be sent only while this policy is in
force.
Where To Pay All premiums are payable to us at our Principal
Premiums Administrative Office or at the place shown for
payment on the premium notice. Upon request, a
receipt signed by our Secretary or an Assistant
Secretary will be given for any premium payment.
Right To Refund We have the right to promptly refund any amount of
Premiums premium paid if application of that premium to the
account value would increase the amount of
insurance which requires a charge.
This right is limited to premiums paid in a Policy
Year which exceed the maximum limit shown on the
Schedule Page.
Part 3. Accounts, Values, And Charges
This policy provides that certain values (referred
to as the variable account values) are based on the
investment performance of the Separate Account and
are not guaranteed as to dollar amount. This policy
also provides that other values (referred to as the
fixed account values) are based on the interest
credited to the Guaranteed Principal Account. The
account value of this policy is the variable
account value plus the fixed account value. This
Part gives information about the Separate Account,
the Guaranteed Principal Account, and the values
and charges connected with them.
Net Premium Net premium is 92.5% of each premium we receive.
Allocation Of Net Each net premium we receive will be allocated among
Premiums the Guaranteed Principal Account and the divisions
of the Separate Account, as directed in the
application. This allocation will remain in effect
until changed by any later written election
satisfactory to us and received at our Principal
Administrative Office. We will allocate the first
net premium payment as of the Register Date.
The Separate Account The Separate Account shown on the Schedule Page is
a separate investment account which we have
established under Missouri law. This Separate
Account has four divisions. They are:
. The Equity Division. Amounts credited to
this division are invested in shares of
MML Equity Fund, or its successor. This
Fund invests primarily in common stocks
and other equity securities.
. The Money Market Division. Amounts
credited to this division are invested
in shares of MML Money Market Fund, or
its successor. This Fund invests
primarily in short-term debt
instruments.
. The Managed Bond Division. Amounts
credited to this division are invested
in shares of MML Managed Bond Fund, or
its successor. This Fund invests
primarily in fixed-income securities.
- 8 -
B960-1A-8800
<PAGE>
- 9 -
. The Blend Division. Amounts credited to
this division are invested in shares of
MML Blend Fund, or its successor. This
Fund may invest in: common stocks and
other equity securities; money market
instruments and other debt securities
with maturities generally not exceeding
one year; and bonds and other debt
securities with maturities generally
exceeding one year.
The values of the assets in the divisions are
variable and are not guaranteed. They depend on the
investment results of the Separate Account shown on
the Schedule Page.
We own the assets of the Separate Account. Those
assets will only be used to support variable life
insurance policies. A portion of the assets, equal
to the reserves and other liabilities of the
Separate Account, will not be charged with
liabilities that arise from any other business we
may conduct. However, we may transfer assets, which
exceed the reserves and other liabilities of the
Separate Account, to our general account. Income,
gains and losses, whether or not realized, from
each division of the Separate Account are credited
to or charged against that division without regard
to any of our other income, gains or losses.
Changes In The Separate We have the right to establish additional divisions
Account of the Separate Account from time to time. Amounts
credited to any additional divisions established
would be invested in shares of other Funds. For any
division, we have the right to substitute new
Funds.
We have the right to change the investment policy
of any division of the Separate Account with the
approval of the Missouri Insurance Commissioner. If
required, the process for obtaining approval of a
material change from the Missouri Insurance
Commissioner will be filed with the insurance
supervisory official of the state where this policy
is delivered. We will notify the Owner if the
Missouri Insurance Commissioner approves any
material change.
We have the right to operate the Separate Account
as a unit investment trust under the Investment
Company Act of 1940 or in any other form permitted
by law.
Accumulation Units Accumulation units are used to measure the variable
account value of this policy. The value of a unit
is determined at the time set by us on each
valuation date for valuation of the Separate
Account. The value of any unit can vary from
valuation date to valuation date. That value
reflects the investment performance of the division
of the Separate Account applicable to that unit.
Purchase Of The amount of each net premium we receive for this
Accumulation Units policy for allocation to each division of the
Separate Account will be applied to purchase
accumulation units for this policy in that
division.
Accumulation units will be purchased in any
division of the Separate Account at the time set by
us on the valuation date which is on or next
follows the date the premium is received by us, but
not earlier than the Register Date. However, if any
premium is received other than by mail at our
Principal Administrative Office after the time set
for valuation of the Separate Account, that premium
will be deemed to have been received on the next
day. Accumulation units will be purchased with the
net premium at the unit value on the date of
purchase. The number of units purchased will be the
amount applied divided by the accumulation unit
value on the date of purchase.
Example: The amount applied is $550. The date of
purchase is June 10, 19X4. The
accumulation unit value on that date is
$10. The number of units purchased would
be 55. ($550 divided by $10 = 55). If,
instead, the unit value was $11, then the
amount applied would purchase 50 units.
($550 divided by $11 = 50).
Variable Account Value The variable account value of this policy reflects:
Of Policy
. The net premiums which are allocated for
this policy to the Separate Account;
. Any amounts transferred into the
Separate Account for this policy from
the Guaranteed Principal Account;
. Any transfers and withdrawals from the
Separate Account for this policy;
B960-1A-8800
<PAGE>
. Any monthly charges deducted from the
Separate Account for this policy; and
. The net investment experience of the
Separate Account for this policy.
Net premiums, transfers, withdrawals, and monthly
deductions are all reflected in the variable
account value through the purchase or sale of
accumulation units. The net investment experience
is reflected in the value of the accumulation
units. Net premiums and monthly deductions are
discussed in this Part 3. Transfers and withdrawals
are discussed in Part 4.
The value of this policy's accumulation units in a
division of the Separate Account is equal to the
accumulation unit value in that division on the
date the value is determined, multiplied by the
number of those units in that division. How
accumulation unit values are determined is
discussed in "Part 7. Notes On Our Computations."
The variable account value of this policy on any
date is the total of the values of this policy's
accumulation units in each division of the Separate
Account.
The Guaranteed The Guaranteed Principal Account is part of our
Principal Account general account. It has no connection with, and
does not depend on, the investment performance of
the Separate Account.
We have the right to establish additional
guaranteed principal accounts from time to time.
Fixed Account Value Of The fixed account value of this policy is the
Policy accumulation at interest of:
. The net premiums which are allocated for
this policy to the Guaranteed Principal
Account; plus
. Any amounts transferred into the
Guaranteed Principal Account for this
policy from the Separate Account; less
. Any transfers and withdrawals from the
Guaranteed Principal Account for this
policy; and less
. Any monthly charges deducted from the
Guaranteed Principal Account for this
policy.
Interest On Fixed The fixed account value of this policy earns
Account Value interest at a rate not less than the minimum annual
interest rate for the Guaranteed Principal Account
shown in the Basis Of Computation section on the
Schedule Page. Interest is credited daily to and
including the date the fixed account value is
determined.
For any fixed account value in excess of an amount
equal to any policy loan, the interest rate we use
will be the daily equivalent of the greater of:
. The minimum annual rate; or
. An alternate annual rate established by
us.
This alternate annual rate will not be less than
the following rate:
. The Treasury Bill Index (as discussed
below); reduced by
. Any tax charge which reflects the
policy's share of our federal income tax
liability.
On the 15th day of March, June, September and
December, we determine the Treasury Bill Index to
be effective during the period beginning on the
first day of the next calendar quarter and ending
on the last day of that quarter. The index is equal
to the arithmetic average of the discount rates
established at the regular weekly auctions of 91-
day United States Treasury Bills. Auctions
occurring during the period beginning with the 16th
day of the last month of the preceding calendar
quarter and ending with the 15th day of the last
month of the current calendar quarter are used to
determine the average.
- 10 -
B960-1A-8800
<PAGE>
- 11 -
Example: On March 15, 19X2 we determine that the
Treasury Bill Index for the period
December 16, 19X1 through March 15, 19X2
is 10.5%. We reduce the index by a tax
charge of .5%. The alternate annual rate
for the calendar quarter beginning April
1, 19X2 and ending June 30, 19X2 will not
be less than 10%.
If the regular auction program for 91-day Treasury
Bills is discontinued, we will, with the approval
of the insurance supervisory official of the state
where this policy was delivered, use a comparable
index.
For any fixed account value equal to policy loan,
the interest rate we use will be the daily
equivalent of the greater of:
. The minimum annual rate; or
. The annual loan interest rate in effect
on the previous Monthly Calculation Date
less not more than 2%.
Account Value Of Policy The account value of this policy on any date is the
variable account value plus the fixed account
value, both determined as of that date.
Monthly Charges Charges will be deducted from the account value of
this policy. The charges are due on each Monthly
Calculation Date.
The charges will be taken from the divisions of the
Separate Account and from the Guaranteed Principal
Account in proportion to the values of this policy
in each of those divisions and in the Guaranteed
Principal Account (excluding outstanding policy
loans). Deductions will be made, and values will be
determined, on the valuation date which is on, or
next follows, the latest of:
. The Register Date; or
. The date the deduction is due; or
. The date we receive the amount of
premium needed to prevent termination in
accordance with the Grace Period And
Termination provision in this Part.
Deductions from the Separate Account are made by
selling accumulation units at their value on the
date determined above.
We assess monthly charges of three types:
1. Administrative Charge. The amount of this charge
will be determined by us. However, it will not be
greater than $8.00 per month.
2. Mortality Charge. The maximum monthly mortality
charges for each $1,000 of insurance which requires
a charge are shown in the Table(s) Of Maximum
Monthly Mortality Charges. There is one table for
the original Selected Face Amount and any increases
that have the same maximum charges as shown in the
table. If any increase in the Selected Face Amount
has different maximum charges because it is in a
different underwriting classification, those
charges will be shown in the table which applies to
that increase. If there is more than one table, the
maximum charges in the most recent table will apply
to the amount of insurance which requires a charge,
up to the amount to which that table applies.
Maximum charges for any insurance in excess of that
amount will be those shown in the next most recent
table(s), up to the amount of each table, using the
most recent table first.
We have the right to charge less than the maximum
charges shown in the table(s). Any change in these
charges will apply to all individuals who are in
the same class as the Insured. These charges may
differ depending on whether or not this policy is
in a tax-qualified pension or profit sharing plan.
B960-1A-8800
<PAGE>
The amount of insurance which requires a charge is
determined as follows. This computation is made as
of the date the charge is due. All amounts are
computed as of that date.
a. We compute the account value after all additions
and deductions other than the deduction of the
mortality charge.
b. We determine the greater of the Selected Face
Amount in effect or the Minimum Face Amount in
effect (as discussed in Part 5). The Minimum Face
Amount used here is based on the account value
computed in (a) above.
c. We divide the amount of benefit determined in
(b) above by 1 plus the monthly equivalent
(expressed as a decimal fraction) of the minimum
annual interest rate for the Guaranteed Principal
Account shown in the Basis Of Computation section
on the Schedule Page.
d. We subtract the account value, as computed in
(a) above, from the amount determined in (c) above.
The result is the amount of insurance which
requires a charge.
3. Rider Charge. The monthly charges for any rider
are shown in a table of charges for that rider.
Grace Period And If the account value less any policy debt is not
Termination enough to cover the monthly charges due on a
Monthly Calculation Date, we allow a grace period
for payment of the amount of premium needed to
increase the account value so that the monthly
deduction can be made. This grace period begins on
the date the deduction is due. It ends 61 days from
that date or, if later, 30 days after we have
mailed a written notice to the Owner at the last
known address shown on our records. This notice
will state the amount needed to increase the
account value to cover the charges.
During the grace period, the policy will continue
in force. The policy will terminate if we do not
receive payment of the required amount by the end
of the grace period.
Part 4. Life Benefits
A life insurance policy provides a death benefit if
the Insured dies while the policy is in force.
There are also rights and benefits that are
available before the Insured dies. These "Life
Benefits" are discussed in this Part.
Policy Ownership
Rights Of Owner While the Insured is living, the Owner may exercise
all rights given by this policy or allowed by us.
These rights include assigning this policy,
changing Beneficiaries, changing ownership,
enjoying all policy benefits and exercising all
policy options.
The consent of any Irrevocable Beneficiary is
needed to exercise any policy right except the
right to:
. Change the frequency of planned
premiums.
. Change the premium payment plan.
. Reinstate this policy after termination.
Assigning This Policy This policy may be assigned. But for any assignment
to be binding on us, we must receive a signed copy
of it at our Principal Administrative Office. We
will not be responsible for the validity of any
assignment.
- 12 -
B960-1A-8800
<PAGE>
- 13 -
Once we receive a signed copy, the rights of the
Owner and the interest of any Beneficiary or any
other person will be subject to the assignment. An
assignment is subject to any policy debt. See
"Borrowing On This Policy" in this Part for a
discussion of policy debt.
Changing The Owner The Owner or any Beneficiary may be changed during
Or Beneficiary the Insured's lifetime. We do not limit the number
of changes that may be made. To make a change, a
written request, satisfactory to us, must be
received at our Principal Administrative Office.
The change will take effect as of the date the
request is signed, even if the Insured dies before
we receive it. Each change will be subject to any
payment we made or other action we took before
receiving the request.
Transfers Of Values Transfers of values may be made upon written
direction satisfactory to us received at our
Principal Administrative Office. These transfers
are:
. Transfers of values between divisions of
the Separate Account. These transfers
will be made by selling all or part of
the accumulation units in a division and
applying the value of the units sold to
purchase units in any other division.
. Transfers of values from one or more
divisions of the Separate Account to the
Guaranteed Principal Account. These
transfers will be made by selling all or
part of the accumulation units in a
division and applying the value of the
units sold to the Guaranteed Principal
Account.
. Transfers of values from the Guaranteed
Principal Account to one or more
divisions of the Separate Account. These
transfers will be made by applying all
or part of the value in the Guaranteed
Principal Account to purchase
accumulation units in one or more
divisions of the Separate Account.
Unit values will be determined as of the valuation
date which is on or next follows the date the
written direction is received at our Principal
Administrative Office.
Limitations On Transfers of values out of the Guaranteed Principal
Transfers Account to the Separate Account are limited to one
in each Policy Year. Any transfer out of the
Guaranteed Principal Account cannot be more than
25% of the fixed account value of this policy on
the date the transfer is made.
Up to four transfers will be allowed in any one
Policy Year. However, this limitation does not
apply to any transfers resulting from a policy
loan. In addition, all values may be transferred to
the Guaranteed Principal Account at any time.
All transfers made on one Valuation Date will be
considered one transfer.
Surrendering This Policy And Making Withdrawals
Right To Surrender This policy may be surrendered for its cash
surrender value at any time while the Insured is
living. Surrender will be effective on the date we
receive this policy and a written surrender
request, satisfactory to us, at our Principal
Administrative Office. A later effective date may
be elected in the surrender request.
Cash Surrender Value The cash surrender value is equal to the account
value less any surrender charges that apply and
less any policy debt. The surrender charge for this
policy is the sum of the surrender charges for the
original Selected Face Amount and all increases in
Selected Face Amount. These charges are shown in
the Table(s) Of Surrender Charges. There are
separate tables of surrender charges for any
increase(s) in the Selected Face Amount.
B960-1A-8800
<PAGE>
Making Withdrawals While the Insured is living, withdrawals may be
made on any Monthly Calculation Date after six
months from the Policy Date. The request for a
withdrawal must be written and satisfactory to us.
It must state the Account (or Accounts) from which
the withdrawal will be made. For any withdrawal
from the Separate Account, the request must also
state the division (or divisions) from which the
withdrawal will be made.
Withdrawals from the Guaranteed Principal Account
will be made by reducing the value in that Account
to provide the withdrawal including any withdrawal
charge that applies to that withdrawal. Withdrawals
from a division (or divisions) of the Separate
Account will be made by selling a sufficient number
of accumulation units to provide the withdrawal
including any withdrawal charge that applies to
that withdrawal. Each withdrawal will be subject to
the limits set forth below.
. The minimum amount of a withdrawal
(before deducting the withdrawal charge)
is $l00.
. A withdrawal charge of 2% of the
withdrawal, but not more than $25, will
be deducted from the amount of the
withdrawal. The charges shown in the
Table Of Surrender Charges do not apply
to any withdrawal.
. The account value remaining after a
withdrawal must be at least equal to the
amount shown in the Table Of Minimum
Account Values After Withdrawal.
. The maximum amount of a withdrawal is
the cash surrender value of this policy.
The Selected Face Amount will be automatically
reduced by the amount of any withdrawal. However,
the surrender charges for this policy will not be
reduced as the result of this reduction in the
Selected Face Amount.
Example: You have a Selected Face Amount of $50,000
and an account value of $20,000. You make
a withdrawal of $5,000. The account value
will be reduced to $15,000 and the
Selected Face Amount will be reduced to
$45,000.
How We Pay Any withdrawal made will be paid in one sum.
However, if the entire policy is surrendered, the
cash surrender value may be paid in one sum, or it
may be applied under any payment option elected.
See "Part 5. Payment Options".
We may delay paying any surrender or withdrawal
value from the Guaranteed Principal Account for up
to six months from the date the request is received
at our Principal Administrative Office.
We may delay paying any surrender or withdrawal
value from the Separate Account during any period
that:
. The New York Stock Exchange is closed,
except for normal weekend or holiday
closings, or trading is restricted; or
. The Securities and Exchange Commission
determines that a state of emergency
exists; or
. The Securities and Exchange Commission
permits us to delay payment for the
protection of our policy owners.
If payment is delayed for 30 days or more, we will
add interest at an annual rate of 3%.
Borrowing On This Policy
Right To Make Loans After the first Policy Year, loans can be made on
this policy at any time while the Insured is
living. However, the policy must be properly
assigned to us before the loan is made. No other
collateral is needed. We refer to all outstanding
loans plus accrued interest as "policy debt".
- 14 -
B960-1A-8800
<PAGE>
- 15 -
Effect Of Loan A loan is attributed to each division of the
Separate Account and to the Guaranteed Principal
Account in proportion to the values of this policy
in each of those divisions and in the Guaranteed
Principal Account (excluding any outstanding policy
loans) at the time of the loan. The amount of the
loan attributed to each division of the Separate
Account will be transferred to the Guaranteed
Principal Account. Any such transfer is made by
selling accumulation units in the division and
applying the value of those units to the Guaranteed
Principal Account on the date the loan is made. Any
interest added to the loan will be treated as a new
loan under this provision.
The amount equal to any outstanding policy loans
will be held in the Guaranteed Principal Account,
and will earn interest as described in the Interest
On Fixed Account Value provision.
Maximum Loan The maximum amount that can be borrowed on any date
Available is determined as follows.
1. We subtract from the account value any surrender
charges that would apply if the policy were
surrendered on that date.
2. We calculate 90% of the amount determined in
(1) above.
3. We subtract any policy debt from the amount
determined in (2) above. The amount that results
from this subtraction is the maximum amount that
can be borrowed.
Interest The interest rate on any loan is 6% per year.
Interest is not due in advance. This interest
accrues (builds up) each day and becomes part of
the policy debt as it accrues.
Interest is due on each Policy Anniversary Date. If
interest is not paid when due, it will be added to
the loan and will bear interest at the rate payable
on the loan.
Example: You have a loan of $1,000. The interest
due on the Policy Anniversary Date is
$60. If it is not paid on that date, we
will add it to the existing loan. The
loan will then be $1,060 and interest
will be charged on this amount from then
on.
Policy Debt Limit Policy debt (including accrued interest) may not
equal or exceed the account value less any
surrender charges that apply. If this limit is
reached, we can terminate this policy. To terminate
for this reason we must mail written notice to the
Owner and any assignee shown on our records at
their last known addresses. This notice will state
an amount that will bring the policy debt back
within the limit. If we do not receive payment
within 31 days after the date we mailed the notice,
the account value will be reduced by any surrender
charges that apply and this policy will terminate
at the end of those 31 days.
Repayment Of Policy All or part of any policy debt may be repaid at any
Debt time while the Insured is living. However, policy
debt can only be repaid while this policy is in
force.
Any repayment of policy debt will be attributed to
the Guaranteed Principal Account. Repayments will
not result in the transfer of values from the
Guaranteed Principal Account to the divisions of
the Separate Account.
Other Borrowing Rules We may delay the granting of any loan attributable
to the Guaranteed Principal Account for up to six
months.
We may delay the granting of any loan attributable
to the Separate Account during any period that:
. The New York Stock Exchange is closed,
except for normal weekend or holiday
closings, or trading is restricted; or
. The Securities and Exchange Commission
determines that a state of emergency
exists; or
B960-1A-8800
<PAGE>
. The Securities and Exchange Commission
permits us to delay payment for the
protection of our policy owners.
Reinstating This Policy
When Reinstatement After this policy has terminated, it may be
Can Be Made reinstated - that is, put back in force. However,
the policy cannot be reinstated if it has been
surrendered for its cash surrender value.
Reinstatement must be made within 5 years after the
date of termination and during the Insured's
lifetime.
Requirements To Evidence of insurability satisfactory to us is
Reinstate required to reinstate. A premium is also required
as a cost to reinstate. That premium must be no
less than the amount necessary to produce an
account value equal to three times the monthly
charges due on the Monthly Calculation Date which
is on, or next follows, the date of reinstatement.
Right To Increase Selected Face Amount
Increases In The While this policy is in force, the Selected Face
Selected Face Amount Amount may be increased upon written application.
Except for any increase elected under an
insurability protection type of rider, evidence of
insurability, satisfactory to us, is required for
each increase. Any increase must be for at least
$15,000, except we may adopt rules which establish
a lower minimum.
Any increase elected under any insurability
protection type of rider will be effective as
directed in that rider. Any other increase in the
Selected Face Amount will be effective on the
Monthly Calculation Date which is on, or next
follows, the date we approve the application.
Mortality charges for each increase elected are
determined and deducted from the account value of
this policy in accordance with the Monthly Charges
provision. These charges will be deducted from the
account value beginning on the effective date of
the increase. Additional surrender charges will
apply for each increase elected.
You have a "right to return" any increase in
Selected Face Amount as set forth for a new policy
on the cover of this policy. However, this right
applies only to the increase and to any premiums
paid on or after the date of the application for
that increase.
Limitations On No increase in the Selected Face Amount can be
Increases elected:
. Within six months after the Policy Date;
or
. Within six months after any previous
increase; or
. After the Policy Anniversary Date
nearest the Insured's 82nd birthday.
The limitations on increases in the Selected Face
Amount do not apply to any increase which is
elected in accordance with any insurability
protection type of rider this policy has.
Evidence Of Increases If the Selected Face Amount is increased we will
send a copy of the application for the increase and
an amended Schedule Page reflecting that increase.
We will also send any Tables pages that may be
required. However, we have the right to require
that the policy be sent to us so that the increase
can be made.
Reports To Owner
Annual Report Each year within 30 days after the Policy
Anniversary Date we will mail a report to the
Owner. There will be no charge for this report.
This report will show the account value at the
beginning of the previous Policy Year and all
premiums paid since that time. It will also show
the additions to, and deductions from, the account
value during that Year, and the account value,
death benefit, cash surrender value, and policy
debt as of the current Policy Anniversary Date.
- 16 -
B960-1A-8800
<PAGE>
- 17 -
This report will also include any additional
information required by applicable law or
regulation.
Illustrative Report In addition to the periodic reports, we will, upon
request, send an illustrative report of projected
values to the Owner. We will not charge a fee for
providing an illustrative report on an annual
basis. However, if the Owner requests illustrative
reports more frequently, we may charge a reasonable
fee, but only for those additional reports.
Part 5. The Death Benefit
The death benefit is the amount of money we will
pay when we receive due proof at our Principal
Administrative Office that the Insured died while
the policy was in force. We discuss the death
benefit in this Part.
Death Benefit If the Insured dies while this policy is in force,
the death benefit is the greater of:
. The Selected Face Amount in effect on
the date of death; or
. The Minimum Face Amount in effect on the
date of death;
with the following additions and deductions.
We add that part of any monthly deduction which
applies to a period beyond the date of death.
We deduct any policy debt outstanding on the date
of death. We also deduct any unpaid monthly charges
to the date of death.
The Selected Face Amount is shown on the Schedule
Page. The Minimum Face Amount is discussed in the
provision which follows.
Minimum Face Amount In order to qualify as life insurance under the
federal tax laws in effect on the Issue Date, this
policy has a Minimum Face Amount. The Minimum Face
Amount on any date is a percentage of the account
value on that date. The percentage for each Policy
Year is shown in the Table Of Minimum Face Amount
Percentages in this policy.
Example: The Minimum Face Amount is determined on
June 10, 19X1. The account value on that
date is $50,000. The last Policy
Anniversary Date was May 2, 19X1. If the
applicable Minimum Face Amount Percentage
for the Policy Year beginning May 2, 19X1
is 260%, then the Minimum Face Amount is
260% of $50,000, or $130,000.
When We Pay The death benefit will be paid within seven days of
the date we receive due proof of the Insured's
death, and any other requirements necessary for us
to make payment, at our Principal Administrative
Office. However, we may delay payment of the death
benefit during any period that:
. The New York Stock Exchange is closed,
except for normal weekend or holiday
closings, or trading is restricted; or
. The Securities and Exchange Commission
determines that a state of emergency
exists; or
. The Securities and Exchange Commission
permits us to delay payment for the
protection of our policy owners.
Interest On Death If the death benefit is paid in one sum, we will
Benefit add interest from the date of death to the date of
payment. The amount of interest will be the same as
would be paid under Option D of the payment options
for that period of time. See "Part 6. Payment
Options" for a description of Option D.
B960-1A-8800
<PAGE>
If the death benefit is applied under a payment
option, interest will be paid from the date of
death to the effective date of that option. It will
be paid in one sum to the Beneficiary living on
that effective date. The amount of interest will be
the same as would be paid under Option D for that
period of time.
Suicide Exclusion Except for any increases in the Selected Face
Amount, we will pay a limited death benefit if the
Insured commits suicide, while sane or insane,
within two years from the Issue Date and while this
policy is in force. The limited death benefit will
be the amount of premiums paid for this policy,
less any policy debt.
For any increases in the Selected Face Amount, we
will pay a limited death benefit if the Insured
commits suicide, while sane or insane, within two
years from the effective date of the increase and
while it is in force. The limited death benefit
will be the monthly deductions made for that
increase. However, if the limited death benefit as
described in the preceding paragraph is payable,
there will be no death benefit for the increase.
Any limited death benefit will be paid in one sum
to the Beneficiary.
Part 6. Payment Options
These are Optional Methods Of Settlement. They
provide alternate ways in which payment can be
made.
Availability Of Options All or part of the death benefit or cash surrender
value may be applied under any payment option. If
this policy is assigned, any amount due to the
assignee will be paid in one sum. The balance, if
any, may be applied under any payment option.
Minimum Amounts If the amount to be applied under any option for
any one person is less than $2,000, we may pay that
amount in one sum instead. If the payments under
any option come to less than $20 each, we have the
right to make payments at less frequent intervals.
Description Of Options Our payment options are described below. Any other
payment option agreed to by us may be elected. The
payment options are described in terms of monthly
payments. Annual, semiannual, or quarterly payments
may be requested instead. The amount of these
payments will be determined in a way which is
consistent with monthly payments and will be quoted
on request.
If the Schedule Page shows that this policy was
issued on a unisex rate basis, the female rates
shown in the Option C, E and F Tables apply in all
cases. The male rates in those tables do not apply
to unisex rate policies.
Option A Fixed Amount Payment Option. Each monthly
payment will be for an agreed fixed amount. The
amount of each payment may not be less than $10
for each $1,000 applied. Interest will be
credited each month on the unpaid balance and
added to it. This interest will be at a rate
determined by us, but not less than the
equivalent of 3% per year. Payments continue
until the amount we hold runs out. The last
payment will be for the balance only.
Option B Fixed Time Payment Option. Equal monthly
payments will be made for any period selected,
up to 30 years. The amount of each payment
depends on the total amount applied, the period
selected and the monthly payment rates we are
using when the first payment is due. The rate
of any payment will not be less than shown in
the Option B Table.
- 18 -
B960-1A-8800
<PAGE>
- 19 -
Option B Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Monthly Monthly
Years Payment Years Payment
1 $84.47 16 $6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51
6 15.14 21 5.32
7 13.16 22 5.15
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71
11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
For quarterly payment, multiply by 2.993. For
semiannual payment, multiply by 5.963. For annual
payment, multiply by 11.839.
Option C Lifetime Payment Option. Equal monthly payments are based on the
life of a named person. Payments will continue for the lifetime of
that person. The three variations are:
(1) Payments for life only. No specific number of payments is
guaranteed. Payments stop when the named person dies.
(2) Payments guaranteed for amount applied. Payments stop when they
equal the amount applied or when the named person dies, whichever
is later.
(3) Payments guaranteed for 5, 10 or 20 years. Payments stop at the
end of the selected guaranteed period or when the named person
dies, whichever is later.
The Option C Table shows the minimum monthly payment for each
$1,000 applied. The actual payments will be based on the monthly
payment rates we are using when the first payment is due. They will
not be less than shown in the Table.
B960-1A-8800
<PAGE>
- --------------------------------------------------------------------------------
Option C Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments Payments Guaranteed For
Age* For Life Amount 5 10 20
Male Female Only Applied Years Years Years
35 40 $3.30 $3.25 $3.29 $3.28 $3.27
40 45 3.47 3.41 3.46 3.45 3.43
45 50 3.69 3.60 3.68 3.67 3.62
50 55 3.96 3.83 3.95 3.93 3.85
55 60 4.31 4.13 4.30 4.27 4.14
60 65 4.77 4.49 4.75 4.70 4.44
65 70 5.41 4.96 5.38 5.26 4.77
70 75 6.30 5.56 6.21 5.96 5.07
75 80 7.50 6.31 7.30 6.77 5.30
80 85 9.16 7.29 8.72 7.64 5.43
85 11.48 8.54 10.46 8.44 5.49
* Age on birthday nearest due date of the first payment. Monthly payment
rates for ages not shown will be furnished on request. Monthly payment
rates for ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Option D Interest Payment Option. We will hold any amount applied under this
option. Interest on the unpaid balance will be paid each month at a
rate determined by us. This rate will be not less than the
equivalent of 3% per year.
Option E Joint Lifetime Payment Option. Equal monthly payments are based on
the lives of two named persons. While both are living, one payment
will be made each month. When one dies, the same payment will
continue for the lifetime of the other. The two variations are:
(1) Payments for two lives only. No specific number of payments is
guaranteed. Payments stop when both named persons have died.
(2) Payments guaranteed for 10 years. Payments stop at the end of
10 years, or when both named persons have died, whichever is later.
The Option E Table shows the minimum monthly payment for each
$1,000 applied. The actual payments will be based on the monthly
payment rates we are using when the first payment is due. They will
not be less than shown in the Table.
-20-
B960-1A-8800
<PAGE>
-21-
- --------------------------------------------------------------------------------
Option E Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments For Two Lives Only
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $ 3.53 $ 3.64 $ 3.72 $ 3.80 $ 3.85 $ 3.89
55 60 3.64 3.78 3.91 4.03 4.12 4.18
60 65 3.72 3.91 4.10 4.27 4.42 4.54
65 70 3.80 4.03 4.27 4.52 4.76 4.97
70 75 3.85 4.12 4.42 4.76 5.11 5.44
75 80 3.89 4.18 4.54 4.97 5.44 5.92
80 85 3.91 4.23 4.63 5.12 5.71 6.36
Payments Guaranteed For 10 Years
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $ 3.52 $ 3.63 $ 3.71 $ 3.79 $ 3.84 $ 3.88
55 60 3.63 3.77 3.90 4.02 4.11 4.17
60 65 3.71 3.90 4.09 4.26 4.41 4.53
65 70 3.79 4.02 4.26 4.51 4.75 4.94
70 75 3.84 4.11 4.41 4.75 5.08 5.38
75 80 3.88 4.17 4.53 4.94 5.38 5.82
80 85 3.90 4.22 4.61 5.08 5.62 6.19
* Age on birthday nearest the due date of the first payment. Monthly
payment rates for ages not shown will be furnished on request. Monthly
payment rates for ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Option F Joint Lifetime Payment Option With Reduced Payments. Monthly
payments are based on the lives of two named persons. Payments will
continue while both are living. When one dies, payments are reduced
by one-third and will continue for the lifetime of the other.
Payments stop when both persons have died.
The Option F Table shows the minimum monthly payment for each
$1,000 applied. The actual payments will be based on the monthly
payment rates we are using when the first payment is due. They will
not be less than shown in the Table.
B960-1A-8800
<PAGE>
- --------------------------------------------------------------------------------
Option F Table
Minimum Monthly Payment Rates For Each $1,000 Applied
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $ 3.80 $ 3.94 $ 4.10 $ 4.28 $ 4.47 $ 4.66
55 60 3.94 4.11 4.30 4.51 4.73 4.96
60 65 4.10 4.30 4.52 4.77 5.05 5.33
65 70 4.28 4.51 4.77 5.08 5.42 5.77
70 75 4.47 4.73 5.05 5.42 5.85 6.30
75 80 4.66 4.96 5.33 5.77 6.30 6.88
80 85 4.86 5.19 5.61 6.13 6.77 7.51
* Age on birthday nearest the due date of the first payment. Monthly
payment rates for ages not shown will be furnished on request. Monthly
payment rates for ages over 85 are the same as those for 85.
- --------------------------------------------------------------------------------
Electing A Payment To elect any option, we require that a written request,
Option satisfactory to us, be received at our Principal
Administrative Office. The Owner may elect an option during
the Insured's lifetime. If the death benefit is payable in
one sum when the Insured dies, the Beneficiary may elect an
option with our consent.
Options for any amount payable to an association,
corporation, partnership or fiduciary are available with our
consent. However, a corporation or partnership may apply any
amount payable to it under Option C, E or F if the option
payments are based on the life or lives of the Insured, the
Insured's spouse, any child of the Insured, or any other
person agreed to by us.
Effective Date And The effective date of an option is the date the amount is
Payment Dates applied under that option. For a death benefit, this is the
date that due proof of the Insured's death is received at
our Principal Administrative Office. For the cash surrender
value, it is the effective date of surrender.
The first payment is due on the effective date, except the
first payment under Option D is due one month later. A later
date for the first payment may be requested in the payment
option election. All payment dates will fall on the same day
of the month as the first one. No payment will become due
until a payment date. No part payment will be made for any
period shorter than the time between payment dates.
Example: Monthly payments of $100 are being made to your
son on the lst of each month. He dies on the 10th.
No part payment is due your son or his estate for
the period between the 1st and the 10th.
Withdrawals And If provided in the payment option election, all or part of
Changes the unpaid balance under Options A or D may be withdrawn or
applied under any other option.
If the cash surrender value is applied under Option A or D,
we may delay payment of any withdrawal for up to six months.
Interest at the rate in effect for Option D during this
period will be paid on the amount withdrawn.
Income Protection To the extent permitted by law, each option payment and any
withdrawal shall be free from legal process and the claim of
any creditor of the person entitled to them. No option
payment and no amount held under an option can be taken or
assigned in advance of its payment date, unless the Owner's
written consent is given before the Insured dies. This
consent must be received at our Principal Administrative
Office.
-22-
B960-1A-8800
<PAGE>
-23-
Part 7. Notes On Our Computations
This Part covers some technical points about this policy.
Net Investment For each division of the Separate Account, the Net
Factor Investment Factor for any valuation period is the gross
investment rate for that period plus 1.00000000 and minus an
asset charge. This asset charge will be not more than
.00001094 for each day of a valuation period. The Net
Investment Factor may be greater or less than 1.00000000.
For each division of the Separate Account, the gross
investment rate for any valuation period is equal to:
. The net earnings of that division during the
valuation period, divided by
. The value of the total assets of that division at
the beginning of the valuation period.
The net earnings of each division are equal to the accrued
investment income and capital gains and losses (realized and
unrealized) of that division reduced by any amount charged
against that division for taxes paid or reserved for by us.
The gross investment rate will be determined by us in
accordance with generally accepted accounting principles and
applicable laws, rules and regulations. This determination
shall be conclusive upon the Owner, the Insured, any
Beneficiary and any assignee and any other person under this
policy.
Accumulation Unit The value of an accumulation unit in each division was set
Value at $1.00000000 on the first valuation date selected by us.
The value on any date thereafter is equal to the product of
the Net Investment Factor for that division for the
valuation period which includes that date and the
accumulation unit value on the preceding valuation date.
Adjustments Of We have the right to split or consolidate the number of
Units And Values accumulation units credited to the policy, with a
corresponding increase or decrease in the unit values. We
may exercise this right whenever we consider an adjustment
of units to be desirable. However, strict equity will be
preserved in making any adjustment. No adjustment will have
any material effect on the benefits, provisions or
investment return of this policy, or on the Owner, Insured,
any Beneficiary, any assignee or other person, or on us.
Basis Of The Basis Of Computation is the mortality table and interest
Computation rate we use to determine:
. The minimum cash surrender values;
. The maximum monthly mortality charges;
. The minimum annual interest earned on the fixed
account value of the policy; and
. The minimum payments under Payment Options C, E and
F.
The Basis Of Computation for the minimum cash surrender
values, for the maximum monthly mortality charges and for
the minimum interest earned on the fixed account value of
the policy is shown on the Schedule Page. The mortality
table specified on the Schedule Page applies to amounts in a
standard underwriting classification. Appropriate
modifications are made to this table for any amount which is
not in a standard underwriting classification.
In computing the minimum payments under Payment Options C, E
and F, we use mortality rates from the 1983 Table "a" with
Projection G for 30 years and with female rates set back
five years. The interest used is at an annual rate of 3%.
Method Of Computing When required by the state where this policy was delivered,
Values we filed a detailed statement of the method we use to
compute the policy benefits and values. These benefits and
values are not less than those required by the laws of that
state.
B960-1A-8800
<PAGE>
WHERE TO FIND IT
Page No.
The Schedule Page ..................................................... 1
Table Of Maximum Monthly Mortality Charges ............................ 2
Table Of Minimum Face Amount Percentages .............................. 3
Table Of Surrender Charges ............................................ 4
Table Of Minimum Account Values After Withdrawal ...................... 5
Part 1. - The Basics Of This Policy ..................................... 6
The Parties Involved - Owner, Insured, Beneficiary, Irrevocable
Beneficiary ......................................................... 6
Dates - Policy Date, Policy Anniversary Date, Policy Year, Issue
Date, Monthly Calculation Date, Valuation Date, Valuation Period,
Register Date ....................................................... 6
Policy A Legal Contract ............................................... 7
Policy Is Not Participating ........................................... 7
Representations And Contestability .................................... 7
Misstatement Of Age Or Sex ............................................ 7
Meaning Of In Force ................................................... 7
Principal Administrative Office ....................................... 7
Part 2. - Premium Payments .............................................. 7
The First Premium ..................................................... 7
Planned Premiums ...................................................... 7
Premium Flexibility And Premiun Notices ............................... 8
Where To Pay Premiums ................................................. 8
Right To Refund Premiums .............................................. 8
Part 3. - Accounts, Values, and Charges ................................. 8
Net Premium ........................................................... 8
Allocation Of Net Premiums ............................................ 8
The Separate Account .................................................. 8
Changes In The Separate Account ....................................... 9
Accumulation Units .................................................... 9
Purchase Of Accumulation Units ........................................ 9
Variable Account Value Of Policy ...................................... 9
The Guaranteed Principal Account ...................................... 10
Fixed Account Value Of Policy ......................................... 10
Interest On Fixed Account Value ....................................... 10
Account Value Of Policy ............................................... 11
Monthly Charges ....................................................... 11
Grace Period And Termination .......................................... 12
Part 4. - Life Benefits ................................................. 12
Policy Ownership ....................................................... 12
Rights Of Owner ....................................................... 12
Assigning This Policy ................................................. 12
Changing The Owner Or Beneficiary ..................................... 13
Transfers Of Values.................................................... 13
Limitations On Transfers .............................................. 13
Surrendering This Policy And Making Withdrawals ........................ 13
Right To Surrender .................................................... 13
Cash Surrender Value .................................................. 13
Making Withdrawals .................................................... 14
How We Pay ............................................................ 14
Borrowing On This Policy ............................................... 14
Right To Make Loans ................................................... 14
Effect Of Loan ........................................................ 15
Maximum Loan Available ................................................ 15
Interest .............................................................. 15
Policy Debt Limit ..................................................... 15
Repayment Of Policy Debt .............................................. 15
Other Borrowing Rules ................................................. 15
Reinstating This Policy ................................................ 16
When Reinstatement Can Be Made ........................................ 16
Requirements To Reinstate ............................................. 16
Right To Increase Selected Face Amount ................................. 16
Increases In The Selected Face Amount ................................. 16
Limitations On Increases .............................................. 16
Evidence Of Increases ................................................. 16
Reports To Owner ....................................................... 16
Annual Report ......................................................... 16
Illustrative Report ................................................... 17
Part 5. - The Death Benefit ............................................. 17
Death Benefit ......................................................... 17
Minimum Face Amount ................................................... 17
When We Pay ........................................................... 17
Interest On Death Benefit ............................................. 17
Suicide Exclusion ..................................................... 18
Part 6. - Payment Options ............................................... 18
Availability Of Options ............................................... 18
Minimum Amounts ....................................................... 18
Description Of Options ................................................ 18
Electing A Payment Option ............................................. 22
Effective Date And Payment Dates ...................................... 22
Withdrawals And Changes ............................................... 22
Income Protection ..................................................... 22
Part 7. - Notes On Our Computations ..................................... 23
Net Investment Factor ................................................. 23
Accumulation Unit Value ............................................... 23
Adjustments Of Units And Values ....................................... 23
Basis Of Computation .................................................. 23
Method Of Computing Values ............................................ 23
Any Riders and Endorsements, and a Copy of The Application For The Policy,
Follow Page 23.
<PAGE>
[LETTERHEAD OF MML BAY STATE LIFE INSURANCE COMPANY APPEARS HERE]
Flexible Premium
Variable Whole Life Insurance Policy
This Policy provides that:
Insurance is payable when the Insured dies.
Within specified limits, flexible premiums may be paid during the Insured's
lifetime.
No dividends will be paid.
B960-1A-8800
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MML BAY STATE LIFE INSURANCE COMPANY
Article I
---------
The name of the Corporation is MML Bay State Life Insurance Company.
Article II
----------
The corporation was originally incorporated under the laws of the State of
Missouri, but has elected to continue its existence through adoption of the
State of Connecticut as its corporate domicile. The date of incorporation shall
be deemed to be April 1, 1935, which was the date of its original incorporation.
Article III
-----------
The registered office of the corporation in the State of Connecticut is 140
Garden Street, Hartford, Connecticut 06154. The name of the registered agent at
that office is Joseph P. DeCresce, whose residence address is 1 Gold Street,
Hartford, Connecticut 06103.
Article IV
----------
The purpose for which the corporation is organized is to conduct the business of
life and health insurance, and to engage in any lawful act or activity for which
corporations may be organized under Section 33-645 of the Connecticut General
Statutes.
Article V
---------
The total number of shares of all classes of stock which the corporation is
authorized to issue is 25,000 shares of Common Stock of the par value of $200
each.
Article VI
----------
The personal liability of a director to the corporation or its shareholders for
monetary damages for breach of duty as a director shall be limited in amount to
the compensation received by the director for serving the corporation during the
year of the violation in question; provided, however, that this provision shall
not limit the liability of a director for any breach of duty that (1) involved a
knowing and culpable violation of law; (2) enabled the director or an associate,
as defined in Section 33-840 of the Connecticut General Statutes, to receive an
improper personal economic gain; (3) showed a lack of good faith and a conscious
disregard for the duty of the director to the corporation under circumstances in
which the director was aware that his or her conduct or omission created an
unjustifiable risk of serious injury to the corporation; (4) constituted a
sustained and unexcused pattern of inattention that amounted to an abdication of
the director's duty to the corporation; or (5) created liability under Section
33-757 of the Connecticut General Statutes.
Article VII
-----------
The business and affairs of the corporation shall be managed by its Board of
Directors.
<PAGE>
Exhibit 99.A.6.b
LAWS
of
MML BAY STATE LIFE INSURANCE COMPANY
ARTICLE I
CERTIFICATE OF INCORPORATION
AND CORPORATE SEAL
Section 1. Certificate of Incorporation. The name and purpose of the
corporation shall be as set forth in the Certificate of Incorporation. These By-
laws, the powers of the corporation and of its directors and shareholders, and
all matters concerning the conduct and regulation of the business and affairs of
the corporation shall be subject to such provisions in regard thereto, if any,
as are set forth in the Certificate of Incorporation. All references in these
By-laws to the Certificate of Incorporation shall mean the Certificate of
Incorporation as from time to time amended.
Section 2. Offices. The registered office of the corporation shall be located
in the City of Hartford, Connecticut. The principal administrative office of the
corporation shall be located in the City of Springfield, Massachusetts. The
corporation, in addition to its registered office and its principal office, may
establish and maintain such other offices and places of business as the Board of
Directors, or such officer so authorized by the Board, may from time to time
determine.
Section 3. Corporate Seal. The corporate seal shall be in the form of a
circle and shall bear the name of the corporation and shall indicate its
formation under the laws of the State of Connecticut; provided, that the form of
such seal shall be subject to alteration from time to time by the Board of
Directors.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of the
corporation for the election of directors and for the transaction of such other
business as may properly come before such meeting shall be held on the second
Wednesday in the month of April of each year (or the next succeeding day
thereafter not a legal holiday) or on such other date that is not a legal
holiday, in either case as may be stated in the notice of the meeting. The place
of such meeting shall be the principal administrative office of the corporation
or such other place within the United States as shall be fixed by the Board of
Directors and stated in the notice of the meeting.
Section 2. Special Meetings. A special meeting of the shareholders may be
called at any time by the President or the Board of Directors and shall be
called by the President upon the written request of ten percent of the
shareholders of record entitled to vote, such written request to state the
purpose or purposes of the meeting and to be delivered to the Secretary of the
corporation. All special meetings shall be held at the principal administrative
office of the corporation or at such other place as may be designated by the
President at a date and time to be fixed by the President, which date shall not
be later than thirty days from the date of receipt of any written request.
Section 3. Notice of Meetings. Except as otherwise required by statute, a
written notice of each meeting of shareholders, whether annual or special,
stating the place, date and hour and, if a special meeting, the purposes of the
meeting, shall be given not less than ten nor more than sixty days before the
meeting to each shareholder of record entitled to vote as of the date of said
notice, by leaving such notice with him or at his residence or usual place of
business. If mailed, such notice is deemed given when deposited in the United
States mail, postage prepaid, directed to the shareholder at his address as it
appears on the records of the corporation. All such notices shall be given by
the Secretary or by such other officer as may be designated by the President. No
notice of any meeting of shareholders need be given to a shareholder if a
written waiver of notice, executed before, during or after the meeting by such
shareholder or his duly authorized attorney is filed with the records of the
meeting, or to any shareholder who shall attend such meeting in person or by
proxy otherwise than for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened, or to any shareholder with whom communication is at
the time unlawful. Unless a new record date is fixed, notice of adjournment of a
meeting of shareholders to another date, time or place need not be given if such
date, time and place are announced at such meeting prior to
<PAGE>
its adjournment.
Section 4. Quorum. At all meetings of shareholders, the shareholders present,
in person or by proxy, representing a majority of the shares entitled to vote at
the meeting shall be sufficient to constitute a quorum for the transaction of
business. In the absence of a quorum, any officer entitled to preside over or
act as secretary of such meeting may adjourn the meeting at such time as he
deems advisable. At any such adjourned meeting at which a quorum may be present,
any business may be transacted which might have been transacted at the meeting
as originally called.
Section 5. Voting. Shareholders entitled to vote shall have one vote for each
share of stock and a proportionate vote for a fractional share of stock entitled
to vote held by them of record according to the records of the corporation. The
corporation shall not, directly or indirectly, vote any share of its own stock.
The vote upon any question shall be by ballot whenever requested by any person
entitled to vote but, unless such a request is made, voting may be conducted in
any way approved by the meeting. In the absence of a higher standard required by
law or these By-laws, any matter properly before a meeting of shareholders shall
be decided by a majority of the votes cast thereon.
Section 6. Proxies. Shareholders entitled to vote may vote either in person
or by proxy in writing, which proxy shall be filed with the Secretary or other
person responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by its terms, such proxy shall entitle the
holder thereof to vote at any adjournment of such meeting but shall not be valid
after eleven months from its date, unless the proxy provides for a longer
period. The Secretary shall determine the validity of any proxy submitted for
use at any meeting.
Section 7. Waiver of Irregularities. Unless otherwise provided by statute,
all informalities and irregularities in calls, notices of meetings and in the
manner of voting, form of proxy, credentials and methods of ascertaining those
present, shall be deemed waived if no objection is made thereto at the meeting.
Section 8. Informal Action by Shareholders. So far as permitted by applicable
law, any action required or permitted to be taken at any meeting of shareholders
may be taken without a meeting if a written consent setting forth such action is
signed by all the shareholders entitled to vote thereon and such written consent
is filed with the records of the corporation.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers and Qualifications. The property, affairs and
business of the corporation shall be managed by the Board of Directors, except
as reserved to the shareholders by law, the Certificate of Incorporation or
these By-laws. In particular, and without limiting the generality of the
foregoing, the Board shall annually determine the divisible surplus of the
corporation and the distribution thereof and it shall make such rules and
regulations as it shall deem necessary or convenient for the proper conduct of
the business and affairs of the corporation. The Board may (a) issue all or from
time to time any part of the unissued capital stock of the corporation
authorized under the Certificate of Incorporation; and (b) determine, subject to
any requirement of law or the Certificate of Incorporation, the consideration
(not less than par value for shares having par value) for which stock is to be
issued and the manner of allocating such consideration between capital and
surplus.
Section 2. Number, Election and Term of Office. The Board of Directors shall
be composed of not less than three nor more than fifteen directors, with the
number of directors to be fixed from time to time by a vote of a majority of the
Board of Directors. Subject to the provisions of Section 7 of this Article III,
the directors shall be elected annually by the shareholders entitled to vote at
the annual meeting of shareholders, by a plurality of the votes at such
election. No director need be a shareholder. Each director, whether elected at
an annual meeting or pursuant to Section 7 of this Article III, shall continue
in office until the annual meeting of shareholders next held after his election
and until his successor shall have been elected and qualified, or until his
death, resignation or removal in the manner hereinafter provided.
Section 3. Meetings. An annual meeting of the Board of Directors for the
election of officers and for the transaction of such other business as may
properly come before the meeting shall be held upon the notice hereinafter
provided for a special meeting. The directors, however, may hold such meeting,
without notice, at the place where the annual meeting of shareholders is held,
immediately following such meeting. The Board of Directors by resolution may
provide for the holding of regular meetings, with or without notice, and may fix
the times and places, within or without the State of Connecticut, at which such
meetings shall be held.
<PAGE>
Special meetings of the Board of Directors may be called by the President and
shall be called by the President upon receipt of a written request of not less
than two directors. All special meetings shall be held at a date, time and place
to be fixed by the President, and the President shall direct the Secretary (a)
to give notice of each special meeting to each director mailed to him at his
address as it appears upon the records of the corporation at least five days
before the day on which the meeting is to be held or (b) to give notice to him
in person or by telephone at least two days before such meeting. Such notice
shall state the time and place of the meeting, but unless otherwise required by
statute, the Certificate of Incorporation or these By-laws, need not state the
purpose thereof. Notice of a meeting need not be given to any director if a
written waiver of notice, executed by him before, during or after the meeting,
is filed with the records of the meeting.
Section 4. Quorum. A majority of the full Board of Directors shall constitute
a quorum for the transaction of business. When a quorum is present at any
meeting, a majority of the directors present may take any action except as
otherwise expressly required by law, the Certificate of Incorporation or these
By-laws. In the absence of a quorum, a majority of the directors present at the
time and place of any meeting, may adjourn such meeting from time to time until
a quorum be present. If by reason of one or more vacancies there is less than
the minimum number of directors, the Board of Directors shall have the power to
function legally prior to the filling of the vacancy; provided, however, that
there shall always be a quorum.
Section 5. Chairman. The Board of Directors may elect a Chairman from among
its members. The Chairman, if one is elected, shall preside at all meetings of
the Board of Directors and shall have such other powers and duties as may be
granted or assigned to him from time to time by the Board of Directors. If a
Chairman is elected but is absent or unable to preside at meetings of the Board
of Directors, or if no Chairman is elected, the President shall preside at such
meetings.
Section 6. Resignation and Removal. Any director may resign at any time by
giving written notice of such resignation to either the Board of Directors, the
Chairman or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon receipt. Any director may be removed either with or
without cause at any time by the affirmative vote of the shareholders of record
holding a majority of the outstanding shares of the corporation entitled to vote
for the election of directors, given at a meeting of the shareholders called for
that purpose.
Section 7. Vacancies. A vacancy in the Board of Directors arising by reason
of death, resignation, removal, increase in the number of directors or
otherwise, which may occur between annual meetings of the shareholders of the
corporation, may be filled by a majority vote of the remaining directors,
although less than a quorum. Any such vacancy may also be filled by the
shareholders entitled to vote for the election of directors at any meeting held
during the existence of such vacancy.
Section 8. Compensation. Directors, as such, shall not be compensated for
their services, but by resolution of the Board of Directors may be paid a fee
for attendance at each meeting of the Board of Directors or a committee thereof.
Nothing herein contained shall prevent any director from serving the corporation
in any other capacity or receiving compensation therefor.
Section 9. Informal Action by Directors. So far as permitted by applicable
law, any action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting if a written consent setting forth such
action is signed by all the directors and such written consent is filed with the
records of the corporation.
Section 10. Committees. The Board of Directors, by the affirmative vote of a
majority of the Board, may appoint from its members such committees as it may
deem advisable . Each committee shall have two or more members who shall serve
at the pleasure of the Board of Directors. A majority of the designated
committee members shall constitute a quorum for the transaction of business by
such committee. When a quorum is present at any committee meeting, a majority of
the committee members may take any action in respect of that committee except as
otherwise expressly required by law, the Certificate of Incorporation or these
By-laws.
Section 11. Informal Action by Committees. So far as permitted by applicable
law, any action required or permitted to be taken at any meeting of a committee
appointed by the Board of Directors may be taken without a meeting if a written
consent setting forth such action is signed by all the members of such committee
and such written consent is filed with the records of the corporation.
<PAGE>
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be a President, a
Secretary and a Treasurer, and such other officers as may be elected or
appointed in accordance with the provisions of Section 3 of this Article IV. So
far as permitted by applicable law, any two or more offices may be held by the
same person.
Section 2. Election, Term of Office and Qualifications. The President, the
Treasurer and the Secretary shall be elected annually by the directors at their
first meeting following the annual meeting of shareholders, by vote of a
majority of the directors present and voting. The President shall be and remain
a director. No other officer need be a director.
Except as otherwise provided by law, the Certificate of Incorporation or these
By-laws, the President, the Treasurer and the Secretary shall hold office until
the first meeting of the directors following the next annual meeting of
shareholders and their respective successors are chosen and qualified, or, in
each case, until he sooner dies, resigns or is removed, unless a shorter period
shall have been specified by the terms of his election.
Section 3. Other Officers. The Board of Directors from time to time may elect
or appoint other officers or agents, including but not limited to one or more
vice presidents, one or more assistant treasurers and one or more assistant
secretaries, each of whom shall hold office for such period, have such authority
and perform such duties as are provided in these By-laws or as the Board of
Directors from time to time may determine. The Board of Directors may delegate
to any officer or committee the power to appoint any such other officers or
agents and to prescribe their respective authority and duties.
Section 4. The President. The President shall, subject to the control of the
Board of Directors, have general charge of the business, affairs and property of
the corporation, and control over its several officers. The President shall do
and perform such other duties and may exercise such other powers as from time to
time may be assigned to him by these By-laws or by the Board of Directors.
Section 5. The Treasurer. Subject to the order of the Board of Directors, the
Treasurer shall have supervision over the funds, receipts and disbursements of
the corporation. He shall cause all monies and other valuable effects to be
deposited in the name and to the credit of the corporation, in such banks, trust
companies or other depositories as shall be selected by the Board of Directors
or which he shall select pursuant to authority conferred upon him by the Board
of Directors. He shall cause the funds of the corporation to be disbursed by
checks or drafts upon the authorized depositories of the corporation drawn
pursuant to authority conferred upon him by the Board of Directors and shall
cause to be taken and preserved proper vouchers for all monies disbursed. He
shall cause to be kept at the principal administrative office of the corporation
correct books of account of its business and transactions and shall render to
the President or Board of Directors, whenever requested, an account of the
financial condition of the corporation and of his transactions as Treasurer. He
shall be empowered, from time to time, to require of the officers or agents of
the corporation reports or statements giving such information as he may desire
with respect to any and all financial transactions of the corporation, and shall
have such other powers and duties as from time may be assigned to him by these
By-laws or by the Board of Directors or the President.
Section 6. The Secretary. The Secretary shall keep and record all the minutes
of the meetings of shareholders and the Board of Directors in books to be
maintained for that purpose. He shall give notice of meetings to each member of
the Board of Directors in accordance with the provisions of these By-laws or as
required by statute. He shall be custodian of the records of the Board of
Directors. He shall keep the seal of the corporation and shall see that the seal
is affixed to all documents the execution of which, on behalf of the corporation
under its seal, shall have been duly authorized or required. He shall see that
all corporate records required by law to be kept or filed are properly kept or
filed. He shall perform all duties and shall have all powers incident to the
office of the Secretary, and shall perform such other duties and have such other
powers as from time to time may be assigned to him by these By-laws or by the
Board of Directors or the President.
Section 7. Chief Actuary. A chief actuary, if appointed or elected by the
Board of Directors, shall have charge of all calculations relating to policies
issued by the corporation, including reserves or liabilities thereunder, and of
constructing mathematical tables for use by the corporation and the preparation
of data for submission to the Board of Directors relating to surplus funds of
the corporation and the distribution thereof. The chief actuary shall perform
such other duties and shall have such powers as may be assigned to him from time
to time by the Board of Directors or the President.
<PAGE>
Section 8. Chief Legal Officer. A chief legal officer, if appointed or
elected by the Board of Directors, shall have charge of the legal affairs of the
corporation and shall have such other duties and such powers as may be assigned
to him from time to time by the Board of Directors or the President.
Section 9. Chief Investment Officer. A chief investment officer, if appointed
or elected by the Board of Directors, shall have such duties and such powers as
may be assigned to him from time to time by the Board of Directors or the
President.
Section 10. Comptroller. A comptroller, if appointed or elected by the Board
of Directors, shall have charge of the accounting affairs of the corporation and
shall have such other duties and such powers as may be assigned to him from time
to time by the Board of Directors or the President.
Section 11. Resignation and Removal. Any officer may resign at any time by
giving written notice of such resignation to the Board of Directors, the
President or the Secretary. Unless otherwise specified therein, such resignation
shall take effect upon receipt. Any officer may be removed, either with or
without cause, by vote of a majority of the total number of directors
constituting the entire Board of Directors.
Section 12. Vacancies. A vacancy in any office because of death, resignation,
removal or any other cause shall be filled for the unexpired term in the manner
prescribed by these By-laws for the regular election or appointment to such
office.
Section 13. Salaries. The salaries or other compensation of the officers shall
be fixed from time to time by the Board of Directors, and no officer shall be
prevented from receiving such salary or other compensation by reason of the fact
that he is also a director of the corporation.
ARTICLE V
INDEMNIFICATION
The corporation shall, to the fullest extent and under the circumstances
permitted by Connecticut law, as amended from time to time, indemnify any person
serving or who has served (a) as a director, officer, employee or agent of the
corporation or (b) at the corporation's request, as a director, trustee,
officer, partner, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, against all
liabilities and expenses incurred by him in connection with the defense or
disposition of any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative and whether formal or
informal, while serving or thereafter, by reason of his having been such a
director, trustee, officer, partner, employee or agent, except (unless otherwise
permitted by Connecticut law) (y) in connection with a proceeding by or in the
right of the corporation in which he was adjudged liable to the corporation or
(z) in connection with any other proceeding charging improper personal benefit
to him in which he was adjudged liable on the basis that personal benefit was
improperly received by him.
Expenses, including counsel fees, reasonably incurred by any such director,
trustee, officer, partner, employee or agent who is a party to a proceeding may
be paid by the corporation in advance of the final disposition thereof upon
receipt of a written affirmation of the person's good faith belief that he has
met the standard of conduct permitting indemnification and a written undertaking
to repay the advance upon a determination that he did not meet the standard of
conduct; provided, however, that a determination is also made that on the basis
of the facts then known indemnification would not be precluded.
The right of indemnification hereby provided shall not be exclusive of or affect
any other right to which any such director, trustee, officer, partner, employee
or agent may be entitled. Nothing contained in this Article shall affect any
other right to indemnification to which such persons may be entitled by contract
or otherwise under law.
ARTICLE VI
EXECUTION OF INSTRUMENTS
Except as the Board of Directors may generally or in particular cases authorize
the execution thereof in some other manner, all documents, instruments or
writings of any nature made, accepted or endorsed by the corporation shall be
signed, executed, verified, acknowledged and delivered by the President, a vice
president of any rank or the Secretary.
<PAGE>
ARTICLE VII
CAPITAL STOCK
Section 1. Number of Shares; Par Value. The total number of shares and the
par value of all stock which the corporation is authorized to issue shall be as
stated in the Certificate of Incorporation.
Section 2. Certificates of Stock. Each shareholder shall be entitled to a
certificate, signed by the President and by the Treasurer or Secretary,
certifying the number and class of the shares owned by him in the corporation.
Such signatures may be facsimiles. Certificates for shares of the stock of the
corporation shall be in such form as shall be approved by the Board of
Directors, and the seal of the corporation shall be affixed thereto. There shall
be entered upon the stock books of the corporation the number of each
certificate issued, the name of the person owning the shares represented
thereby, the number of shares and the date thereof.
ARTICLE VIII
APPLICATIONS, POLICIES AND PREMIUMS
The President, the chief actuary, if any, and the chief legal officer, if any,
shall prescribe and approve all forms of policies issued by the corporation,
including all riders and provisions included in or attached to such policies,
and the forms of application therefor. The President and the chief actuary, if
any, shall fix all rates of premiums. The Board of Directors may determine from
time to time the maximum amount of insurance to be issued on an individual life.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall end on the last day of December
annually.
ARTICLE X
AMENDMENTS
These By-laws may be amended or repealed by the Board of Directors, except that
the Board may take no action which by law or the Certificate of Incorporation is
required to be taken by the shareholders. Any By-law so amended or repealed by
the directors may be further altered, amended or reinstated by the shareholders
in the manner provided below.
These By-laws may be amended or repealed by a majority vote of the shareholders
present at any annual meeting or at a special meeting called for that purpose,
provided that (a) the notice of any such annual or special meeting shall specify
the subject matter of the proposed amendment or repeal and (b) any such proposed
amendment or repeal shall have been submitted in writing and filed with the
Secretary at least five days prior to such meeting. In amending or repealing any
By-law, the shareholders may provide that such By-law may not be amended or
repealed by the Board of Directors.
ARTICLE XI
EFFECTIVE DATE
These By-laws shall become effective with the redomestication of the corporation
in the State of Connecticut.
<PAGE>
Exhibit 99.A.10
APPLICATION NO.
APPLICATION (PART 1)
To: [_] Massachusetts Mutual Life Ins. Co. [_] MML Bay State Life Ins. Co.
Springfield, Massachusetts 01111-0001
For: [_] New Life Insurance
[_] New Policy as Exchange of Term Insurance
[_] New Disability Insurance
[_] Conversion of Term or Disability Insurance
[_] New BOE Insurance
[_]
------------------------------------------
New Policy Under Option:
[_]IPR [_]DIPR [_]IAR
[_]BIPR [_]
--------
- --------------------------------------------------------------------------------
Client Data
- --------------------------------------------------------------------------------
1. Proposed Insured's first name middle name
Name [_][_][_][_][_][_][_][_][_] [_][_][_][_][_][_][_][_]
(hereinafter referred
to as the Insured) last name suffix
[_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_]
street & no. city state
2. Current Address
-----------------------------------------------------
zip
[_][_][_][_][_]-[_][_][_][_]
3. Prior Address street & no. city state
(if within 5 years)
-----------------------------------------------------
zip
[_][_][_][_][_]-[_][_][_][_]
employer name
4. Business Name &
Address -----------------------------------------------------
street & no. city state
-----------------------------------------------------
zip
[_][_][_][_][_]-[_][_][_][_]
5. Social Security Number [_][_][_]-[_][_]-[_][_][_][_]
mo. day yr.
6. Date of Birth
------------------------
7. [_] Male [_] Female 8.Birthplace
--------------------------
9. Citizen of USA [_] Yes [_] No If "No," what country?
-------------------
Type of Visa
[_] Perm. [_] Temp.
10. Applicant
------------------------------------------------------------------
(if other than Insured or Insured is under 16)
------------------------------------------------------------------
(relationship to Insured)
11. Plan Account Name (Employer) Plan Account No.
(complete if applicable) --------------------- -----------
- --------------------------------------------------------------------------------
Life Insurance Data
- --------------------------------------------------------------------------------
12. Owner (*print full name(s) and relationship(s) to the Insured)
(a) [_] Insured
* (b) [_] Insured's , or his/her estate.
---------------------------------------
* (c) [_] Upon attainment of age , the Insured shall become the Owner.
---------
Until then, the Owner shall be the Insured's , if
----------------
living, otherwise , if living, otherwise
-------------------------
the Insured.
* (d) [_] Lifetime Ownership in the Insured's , if living,
---------------------
thereafter in the Insured's , if living,
-----------------------
thereafter in the Insured.
(e) [_] Trustee , under the Trust
-----------------------------------------
Agreement dated (Copy of signed Trust
--------------------------
Agreement required)
(f) [_] Corporation , its successor or assigns.
------------------------------
(g) [_] Business associate , or his/her estate.
------------------------------
(h) [_] Business partner , or his/her estate.
--------------------------------
(i) [_] Partnership .
--------------------------------------------------------
* (j) [_] Other (e.g., Custodian, Charitable Gift, or Joint Ownership.
Indicate Right of Survivorship or Tenancy-In-Common.)
--------------------------------------------------------------------
If the last Owner is other than the Insured, and if all Owners are dead and
the Insured is living, the Owner shall be the estate of the last Owner to
die, unless otherwise requested.
13. Owner's (if other than the Insured) Soc. Sec. No. or Taxpayer ID No.
--------
(If more than one Owner, give name and Soc. Sec. No. of all Owners in 15.)
14. Owner's (if other than the Insured) Address
street & no. city state
----------------------------------------------------------------------------
zip
[_][_][_][_][_]-[_][_][_][_]
15.Remarks
----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A3000-9300
<PAGE>
APPLICATION NO. Page 2
- --------------------------------------------------------------------------------
16.Beneficiary (select only one of "a" through "j")
(a) [_] Primary (print full name(s) and relationship(s) to Insured)
--------------------------------------------------------------------
Secondary (optional, if "a" checked) (print full name(s) and
relationship(s) to Insured)
--------------------------------------------------------------------
Select [_] and any lawful children of the Insured
only one [_] and any children born of the marriage of the Insured and said
option spouse
[_] and any children born of the marriage of or legally adopted by the
Insured and said spouse
[_] issue per stirpes of Secondary Beneficiaries
(b) [_] Estate of the Insured (Select only if Estate is Primary Beneficiary.)
(c) [_] Trustee under the Will of the Insured
(d) [_] Trustee ________________ under the Trust Agreement dated ___________
(e) [_] Corporation named in 12(f)
(f) [_] Business associate named in 12(g)
(g) [_] Business partner named in 12(h)
(h) [_] Partnership named in 12(i)
(i) [_] See Memo attached
(j) [_] Other (Special Arrangements, e.g., Custodian, Charitable Gift,
Tertiary Beneficiaries, etc.)
--------------------------------------------------------------------
Payment to the personal Primary and personal Secondary Beneficiaries shall be
made under Option D, Interest Payments, monthly, with unlimited right of
withdrawal and right to elect any payment option unless otherwise requested or
unless not available.
Special Requests: (for (a), (f), and (g) only)
(i) One sum for (ii) Deferral Clause for
[_] All Beneficiaries [_] Primary Only
[_] Primary Only [_] All Beneficiaries
[_] Secondary Only Deferral Clause is for [_] 30 days
[_] _____ days.
If two or more persons are the beneficiaries in any class, payment shall be made
to them equally or to the survivor(s), unless otherwise requested. If payment is
made in one sum and there is no beneficiary entitled to payment when the Insured
dies and the Insured is the Owner at that time, payment shall be made to the
estate of the Insured. But if the Insured is not the Owner, payment shall be
made to the Owner.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
17. Product 21. Automatic Premium Loan [_] Yes [_] No
(not available on Term or Variable Life)
[_] Whole Life [_] Enhanced Term 10
22. Loan Interest Rate (where elective)
[_] Limited Pay WL _________ [_] Variable Life Plus
[_] Enhanced Whole Life [_] Universal Life [_] Adjustable [_] 8% [_] 6% (VL only) [_] ___%
[_] APT [_] __________________ 23. Policy Date (optional) _____________________________
[_] Term 10
24. Age of Issue (optional) ____________________________
18. Amount of Insurance (a or b)
(a) Face Amount $____________________________________ 25. Is the Insured applying for Preferred Nonsmoker Class?
(b) Face Amount purchased by a premium of [_] Yes [_] No (Term Insurance Only)
$_________________ at premium frequency applied for.
[_] This premium includes all riders. 26. If the policy applied for will be used in connection with an
19. Variable Life and Universal Life employer-sponsored plan involving both males and
females, will the policy be issued on a Unisex basis?
(a) First Premium $__________________________________ [_] Yes [_] No
(b) Planned Premium (at frequency) $_________________
(c) Death Benefit Option (if applicable) [_] 1 [_] 2 27. Waiver of Premium Riders
[_] Insured (Disability Only)
20.Variable Life Net Premium Allocation * [_] Applicant-Adult Insured (Disability Only)
* [_] Applicant-Adult Insured (Death or Disability)
[_] Equity ________% [_] Blend _______% * [_] Applicant-Juvenile Insured (Death Only)
[_] Money Market ________% [_] GPA _______% * [_] Applicant-Juvenile Insured (Death or Disability)
[_] Managed Bond ________% [_] ___________________%
* Complete Supplement A3300
</TABLE>
- --------------------------------------------------------------------------------
For Variable Life Insurance, the Owner acknowledges:
. Receipt of a prospectus for the policy applied for;
. That the variable value of the policy may increase or decrease in accordance
with the experience of the Separate Account(s);
. That there are no minimum guarantees as to the variable value;
. That the fixed value of the policy earns interest at a rate not less than a
minimum specified rate; and
. That the death benefit may be variable or fixed under specified conditions.
- --------------------------------------------------------------------------------
A8000-9300
<PAGE>
APPLICATION NO. Page 3
- --------------------------------------------------------------------------------
28. Other Riders
[_] Accidental Death Benefit $______________
[_] Insurability Protection $______________
[_] Renewable Term - 1 year $______________
[_] Life Insurance Supplement Rider (LISR)
Required (a) Supplemental Insurance Amt. $______________
for
LISR (b) LISR Annual Premium $______________
(c) LISR Lump Sum Payment $______________
[_] Add'l Life Ins. Purchase (ALIR) $______________
[_] __________________________________ $______________
29. Dividend Option (Not available on Variable Life)
[_] Paid-up Additions (not available on Term)
[_] Reduce Premiums [_] Cash
[_] Accumulate at Interest [_] Suppl. Insurance (EWL &
LISR)
[_] Dividend applied as Yearly
Term Purchase with balance to:} Not available on
Term, EWL, or LISR
[_] Paid-up Additions [_] Reduce Premiums
[_]________________________________
30. ALIR Dividend Option
[_] Paid-up Additions [_] Same as Basic Policy
- --------------------------------------------------------------------------------
31. (a) Will the insurance now being applied for replace or change, or is it
intended to replace or change, any insurance or annuity, in whole or in
part, issued by this or any other company? [_] Yes [_] No If "Yes,"
complete the following.
Company Name Policy Number Product Face Amount
------------------------------------------------------------------------
$
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
(b) Are all or part of the surrender proceeds of any policy listed in
31(a)being used to purchase the applied-for policy?
[_] Yes [_] No
(c) If the policy applied for is intended to qualify for a Section 1035
exchange, the approximate value of the policy to be exchanged is
$ ____________________ (If exchanging another company's policy, absolute
assignment form and policy should accompany application.)
32. Amount of Insurance currently applied for, contemplated, or now in force on
the Insured in other companies. (Exclude amounts shown in 31(a).)
If none, check here [_]
<TABLE>
<CAPTION>
Company Name Amt. of Life Ins. Amt. of ADB Waiver Year(s) Issued or Curr. App.
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ $ [_] Yes [_] No [_]
- --------------------------------------------------------------------------------------------------------------
[_] Yes [_] No [_]
- --------------------------------------------------------------------------------------------------------------
[_] Yes [_] No [_]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
33. Total amount of new insurance to be placed currently in all companies
$___________________________
- --------------------------------------------------------------------------------
Juvenile Data (ages 0-15)
- --------------------------------------------------------------------------------
34. Total insurance currently applied for, contemplated, or now in force on
Insured's father/mother/siblings (Name, age, relationship, and amount -
explain if none)
____________________________________________________________________________
35. Total life insurance now in force in all companies on Applicant if other
than parent $______________________________
36. Does the Insured reside with the Applicant? [_] Yes [_] No
If "No," the Insured resides with
Name _____________________________ Relationship _____________________
37. Remarks
- --------------------------------------------------------------------------------
A3000-9300
<PAGE>
APPLICATION NO. Page 4
- --------------------------------------------------------------------------------
Disability Income (DI/TD) and Conditionally Renewable Disability Income
(CR/TCR) Data
- --------------------------------------------------------------------------------
38. Owner [_] Insured [_] Other (Print name, address, taxpayer ID, and
relationship to Insured in 47)
- --------------------------------------------------------------------------------
39. Product [_] DI [_] TD [_] CR [_] TCR [_]
---------
40. Basic Product(complete "a" through "c")
(a) Monthly Income $
-----------------------------------------------
(b) Waiting Period (days)
[_] 30 [_] 60 [_] 90 [_] 180 [_] 365 [_]
------------------
(c) Maximum Benefit Period
[_] to 1 yr [_] 2 yrs [_] 5 yrs [_] to age 65
[_] ADEA - 5 yrs (Class A only) [_] ADEA - 65
[_] Extended Benefit
[_] 2 yr-Graded (CR/TCR) [_] 5 yr-Graded (CR/TCR)
[_]
----------------------------------
41. Policy Date (optional)
---------------------------------
42. Age of Issue (optional)
--------------------------------
43. Occupational Class (for occupation(s) given in 78)
[_] 5A [_] 4A [_] 3A [_] 2A [_] A [_]
--------------
44. Optional Riders Waiting Benefit
Amt Period Period
--- ------- -------
[_] Contingent Monthly Income $
(CMR/CMRTD) ------- ------- -------
[_] Annually Renewable DI $
(ARDI/ARDITT) ------- ------- -------
[_] Additional Monthly Income $
(AMIR/AMIRTD) ------- ------- -------
[_] Disability Income Purchase $
(DIPR) -------
[_] Income Adjustment (IAR) [_] 7% [_] 12% [_] %
----
[_] Regular Occupation (ROR/RORTD)
[_] Annual Increase (AIR/AIRTD)
[_]
----------------------------
[_]
----------------------------
45. Dividend Option
[_] Reduce Premiums [_] Cash [_]
------------------
- --------------------------------------------------------------------------------
46. (a) Will the Insured's employer pay all or part of the premium for this
policy? [_] Yes [_] No
(b) If split premium, the benefit period to be paid for by the employee will
be [_] 6 mos [_] 12 mos [_] 24 mos [_]
-----------
- --------------------------------------------------------------------------------
47. Remarks
- --------------------------------------------------------------------------------
Business Overhead Expense (BOE) Data
- --------------------------------------------------------------------------------
48. Owner [_] Insured [_] Other (Print name, address, taxpayer ID, and
relationship to Insured in 56)
- --------------------------------------------------------------------------------
49. Basic Product (complete "a" through "c")
(a) Monthly Overhead Expense Benefit $
-------------------------
(b) Waiting Period (days)
[_] 30 [_] 60 [_] 90 [_]
------------------------
50. Policy Date (optional)
---------------------------------
51. Age of Issue (optional)
--------------------------------
52. Occupational Class (for occupation given in 78)
[_] 5A [_] 4A [_] 3A [_] 2A [_] A [_]
--------
53. Dividend Option
[_] Reduce Premiums [_] Cash [_]
-------------------
54. Optional Riders
[_] Business Insurability Protection (BIPR) $
------------
[_]
--------------------------------------- ------------
55. List Insured's share of current eligible monthly business overhead expenses:
Amount
Rent $
---------------
Utilities (electricity, telephone, gas, etc.) ---------------
Gross Employee Salaries (excluding partners
and stockholders)
---------------
Taxes (payroll, property, Soc. Sec., etc.)
---------------
Insurance (property, casualty, malpractice, employee
benefit plans, etc.) ---------------
Accounting and Legal fees
---------------
Depreciation (other than bus. real estate)
---------------
[_] Business Mortgage Principal
or ---------------
[_] Business Real Estate Depreciation
---------------
Interest
---------------
Misc. (license, fees, janitorial, etc.)
---------------
Subtotal (all of the above) $
---------------
Professional replacement salary
---------------
Grand Total $
---------------
56. Remarks
-------
- --------------------------------------------------------------------------------
A3000-9300
<PAGE>
APPLICATION NO. Page 5
- --------------------------------------------------------------------------------
All Disability Insurance (DI, CR, TD, TCR, and BOE) Data
- --------------------------------------------------------------------------------
57. Is the Insured actively working on a full-time basis? [_] Yes [_] No
(If "No," explain in 66)
58. Annual Unearned Income $
------------------
59. Net Financial Worth $
--------------------
60. If Insured is a business owner, check the appropriate box(es)
[_] Sole Proprietor [_] Active Partner (___________ % owner)
[_] C Corporation (___________ % owner)
[_] S Corporation (___________ % owner)
Number of employees Full-time _____________ Part-time _____________
61. Other Disability Coverage
(a) Is the Insured now (or does the Insured expect to be) covered under any
sick-pay, group, or association disability plan?
[_] Yes [_] No If "Yes," give details below:
<TABLE>
<CAPTION>
Employer Social Security
Waiting Benefit Paid Offset
Period Period Amount Yes No Yes No
------- ------- ------ --- -- --- --
<S> <C> <C> <C> <C> <C>
Employee Sick Pay $_____weekly [_] [_] [_] [_]
------- -------
Weekly Plan $_____weekly [_] [_] [_] [_]
------- -------
LTD $_____monthly [_] [_] [_] [_]
------- -------
Other (Give details in 66)
-------------------------------
</TABLE>
(b)Is there a qualified sick-pay plan in force? [_] Yes [_] No
(c) Government Coverage (check all that apply)
[_] State Workers' Comp. [_] State Disability / Cash Sickness
[_] Federal Social Security [_] Municipal Plan
[_] Other (specify)
----------------------------------------------
62. Earned Income reported for Federal Income Tax purposes (not required for new
policy under IAR). Provide complete answers to all that apply.
<TABLE>
<CAPTION>
Actual Prior Actual Current
Calendar Year Year-To-Date as
19__ of __ /__ /__
<S> <C> <C>
If non-owner employee (Refer to W-2)
(a) Gross salary $ $
------------------ ---------------------
(b) Bonus
------------------ ---------------------
Total Earned Income (a+b) $ $
================== =====================
If sole proprietor (Refer to Schedule C)
(a) Gross business revenue $ $
------------------ ---------------------
(b) Gross business expense
------------------ ---------------------
Net Earned Income (a-b) $ $
================== =====================
If partner (Refer to Form 1065, Schedule K-1)
(a) Business revenue based on _______ % ownership $ $
------------------ ---------------------
(b) Business expense based on ________ % ownership
------------------ ---------------------
(c) Guaranteed payments to partner
------------------ ---------------------
Net Earned Income (a-b+c) $ $
================== =====================
If "S" or "C" corporation (Refer to Form 1120S,
Schedule K-1, or Form 1120)
(a) Gross salary $ $
------------------ ---------------------
(b) Bonus
------------------ ---------------------
(c) Pension/profit sharing paid by corporation
------------------ ---------------------
(d) Business revenue based on _________ % ownership
------------------ ---------------------
(e) Business expense based on _________ % ownership
------------------ ---------------------
(f) Proportionate share of profit or loss (d-e)
Net Earned Income (a+b+c+f) $ $
================== =====================
</TABLE>
Does the Insured prepare monthly financial statements? [_] Yes [_] No
<PAGE>
APPLICATION NO. Page 6
- --------------------------------------------------------------------------------
63. Disability benefits currently applied for, contemplated, or now in force,
provided by individual insurance on the Insured in other companies. If
none, check here [_] . (Exclude amounts shown in 64.)
<TABLE>
<CAPTION>
Soc. Sec.
Type of Product Offset
--------------- Monthly ---------- Waiting Benefit Currently
Company Name DI BOE Policy Number Benefit Yes No Period Period Applied for
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
[_] [_] [_] [_] [_]
- ----------------------------------------------------------------------------------------------------------------
[_] [_] [_] [_] [_]
- ----------------------------------------------------------------------------------------------------------------
[_] [_] [_] [_] [_]
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
64. Will the insurance now being applied for replace or change, or is it
intended to replace or change, any disability insurance, in whole or in
part, issued by this or any other company? [_] Yes [_] No If "Yes," complete
the following.
<TABLE>
<CAPTION>
Company Name Policy Number Monthly Income Paid-To Date
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
65. Has Outline of Coverage been given? [_] Yes [_] No (required in some states)
66. Remarks
----------------------------------------------------------------------------
----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Conversion, Exchange, and Option Data
- --------------------------------------------------------------------------------
Term Life Insurance Conversion or Exchange
- --------------------------------------------------------------------------------
67. (a)[_] Conversion of term insurance under policy number(s)
------------------
Date of New Policy (required)
------------------------------
If not all of the term insurance is to be converted, complete the
following.
<TABLE>
<CAPTION>
Policy Name(s) of Term Rider(s) Amount to Balance to be
Number if applicable be converted Terminated Continued
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------
$ [_] [_]
----------------------------------------------------------------------------------------------------
[_] [_]
----------------------------------------------------------------------------------------------------
</TABLE>
(b)[_] Exchange of term insurance under policy number(s)
--------------------
. Term policy no. _____ is amended by adding the right to exchange
the term insurance provided by the policy for new term insurance.
It is to be exchanged for the new term insurance applied for in
this application. The policy will terminate when this new policy
takes effect. Any dividends to the credit of the exchanged policy
will be surrendered.
. The ______ term rider under policy no. _______ is amended by
adding the right to exchange the term insurance provided by the
rider for the new term insurance. It is to be exchanged for the
new term policy applied for in this application. The rider will
terminate when this new policy takes effect. If the existing
policy has more than one term rider and not all of them are being
exchanged, identify the one(s) being exchanged:
_____________________________________________________ It is
understood and agreed that any term insurance not exchanged is
terminated when this new policy takes effect.
The following applies to either a conversion or an exchange
-----------------------------------------------------------
(c) If the Term Insurance provides that ADB, IPR, and/or Waiver of Premium
are to be included in the new policy, the riders will be automatically
included unless otherwise requested here:
Do not include [_] ADB [_]IPR [_]Waiver of Premium
(d) [_] Rider(s) applied for in 28 was not in the term policy.
(e) [_] The Face Amount applied for in 18 is greater than the amount
available for the conversion/exchange (requires evidence of
insurability); this additional amount is $
-----------------
Note: Signatures - if an additional amount is applied for, the
Insured must sign as the "Proposed Insured."
Signatures of owner and assignee are also required.
- --------------------------------------------------------------------------------
A3000-9300
<PAGE>
<TABLE>
<CAPTION>
APPLICATION NO. Page 7
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Life Insurance Insurability Protection Option
- -----------------------------------------------------------------------------------------------------------------------------
68. Option under policy no(s). . ________________________________________
(a) [_]Regular Option Date [_] Substitute Option Date for [_] marriage [_] birth of child(ren) [_] adoption of child(ren)
Date of applicable event: ____________
(b) [_]Rider(s) applied for in 28 was not in the original policy.
(c) [_]The Face Amount applied for in 18 is greater than the amount available under the option (requires evidence of
insurability); this additional amount is $ __________________
(d) [_]Two options are being combined. The amount being exercised from each is policy no. ______________ $ ___________
[_]One is a Substitute Option from policy no. _________________ policy no. ______________ $ ___________
- --------------------------------------------------------------------------------------------------------------------------
Disability Insurance Conversion and Option
- --------------------------------------------------------------------------------------------------------------------------
69. (a) [_] Conversion of policy no (s). _________________________________________________________________________________
[_] Conversion of __________________________ rider(s) under policy no(s). ________________________________________
[_] Option under policy no(s) ______________________________________ [_]DIPR [_]BIPR [_]IAR [_] ____________
(Give details in 70.)
(b) [_] Applying for rider(s) not in original policy.
[_] Amount of Monthly Income (40(a) and 44) or Monthly Benefit (49(a)) applied for exceeds amount available under
option (requires evidence of insurability); this excess amount is $ ______________________________________________
70. Remarks
-------
-----------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Payment Data
- ---------------------------------------------------------------------------------------------------------------------------
71. Premium Payments
(a) Billing Type Life Disability BOE
Regular [_] [_] [_]
Triple M [_] [_] [_]
Invoice [_] [_] [_]
Government Allotment [_] [_] [_]
If "Invoice," give Billing Arrangement No. _________________________________________
(b) Frequency Life Disability BOE
Annual [_] [_] [_]
Semiannual [_] [_] [_]
Quarterly [_] [_] [_]
Monthly [_] [_] [_]
One month with balance of [_] Ann. [_] S. Ann.[_] Quar. [_] Ann. [_] S. Ann.[_] Quar. [_] Ann. [_] S. Ann.[_] Quar.
72. Who will pay premiums on this insurance?
Life [_] Insured [_] Owner [_] Other _________________________________________________________
Disability [_] Insured [_] Owner [_] Other _________________________________________________________
BOE [_] Insured [_] Owner [_] Other _________________________________________________________
73. Has the first premium on the insurance applied for been paid?
Life [_] Yes [_] No If "Yes," amount paid is $ ______________________________________________________
Disability [_] Yes [_] No If "Yes," amount paid is $ ______________________________________________________
BOE [_] Yes [_] No If "Yes," amount paid is $ ______________________________________________________
74. Premium and Other Notices (If "Owner's Other" or "Other," print name(s) and address(es) in 75.)
Send To Life Disability BOE
Insured's Home [_] [_] [_]
Insured's Business [_] [_] [_]
Owner's Home [_] [_] [_]
Owner's Other [_] [_] [_]
Other [_] [_] [_]
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
A3000-9300
<PAGE>
APPLICATION NO. Page 8
- --------------------------------------------------------------------------------
75. Remarks
- --------------------------------------------------------------------------------
Personal Data Regarding the Insured
- --------------------------------------------------------------------------------
76. (a) Has the Insured smoked cigarettes in the past 12
months? [_] Yes [_] No
(b) If "No," has the Insured ever smoked them? [_] Yes [_] No
(c) Within the last 3 years has the Insured used tobacco or
nicotine in any form? (If "Yes," give details in 85.) [_] Yes [_] No
77. Insured's current driver's license no. __________________ State _________
78. (a) Insured's Occupation(s) and Exact Duties
----------------------------------------------------------------------------
Occupation(s) Exact Duties
----------------------------------------------------------------------------
(b) Length of time with current employer? ______________________________
If less than 6 mos., give name of previous employer(s), occupation(s),
duties, and dates of employment for last three years in 85.
(c) Is Insured self-employed? (If "Yes," give how long
self-employed in 85.) [_] Yes [_] No
Complete (d), (e), and (f) for DI, CR, TD, TCR, and BOE policies only
(d) Indicate below the breakdown of duties stated in 78(a).
Office ______________% Non-Office ______________%
Percent of Non-Office duties spent in
Administration __________% Supervision __________%
Travel __________% Manual __________%
(e) Is the Insured engaged in any part-time employment?
(If "Yes," give details in 85.) [_] Yes [_] No
(f) Is the Insured currently disabled?
(If "Yes," give details in 85.) [_] Yes [_] No
- --------------------------------------------------------------------------------
Complete the following only if Evidence of Insurability is required.
Explain "Yes" answers in 85.
- --------------------------------------------------------------------------------
79. Does the Insured now contemplate any: [_] foreign travel
[_] change of occupation?
[_] Yes [_] No
80. Within the last 3 years has the Insured been, or does the
Insured now expect to become, a pilot, student pilot, or
crew member of any type of aircraft? If "Yes," complete
Aviation Supplement A3310 [_] Yes [_] No
81. Within the last 3 years has the Insured taken part in, or
does the Insured now expect to take part in, underwater
diving, hang gliding, para sailing, para kiting,
parachuting, skydiving, mountain climbing, or organized
racing by automobile, motorcycle, motorboat, or snowmobile,
or any other form(s) of hazardous activity?
If "Yes," complete Avocation Supplement A3320 [_] Yes [_] No
82. Within the last 5 years has the Insured been in a motor
vehicle accident, been convicted of operating a motor
vehicle while under the influence of alcohol or other drugs,
been convicted of a moving violation, or received a
driver's license restriction or revocation? [_] Yes [_] No
83. Has the Insured ever been convicted of a felony? [_] Yes [_] No
Complete 84 for DI, CR, TD, TCR, and BOE policies only.
84. Name of Insured's medical/major-medical insurance carrier.
____________________________________________________________________________
(a) Policy No. ___________________________ (b) Certificate No. _____________
(c) Date and reason for most recent medical expense claim filed or paid on
the Insured's behalf.
85. Remarks
- --------------------------------------------------------------------------------
A3000-9300
<PAGE>
APPLICATION NO. Page 9
- --------------------------------------------------------------------------------
Agreement And Signatures
- --------------------------------------------------------------------------------
The person(s) signing below agree that:
The Application - This is Part 1 of an application for Life and/or Disability
Insurance. The application includes any Part 2 that may be required and any
amendments or supplements to either Part. To the best of the knowledge and
belief of the person(s) signing below, all statements in this Part 1 are
complete and true and were correctly recorded. Each person signing below adopts
all of the statements made in the application and agrees to be bound by them.
Company, as used in this Application, refers to Massachusetts Mutual Life Ins.
Co. and/or MML Bay State Life Ins. Co. Liability of Company - The insurance
applied for will not take effect unless each of the applicable conditions is
met:
1. For all cases: The first premium has been paid during the lifetime of all
-------------
persons to be insured by the policy and the application has been approved
by the Company at its Home Office/Principal Administrative Office.
2. For insurance purchased on an Option Date under an insurability protection
--------------------------------------------------------------------------
rider or agreement: The first premium must be paid within 60 days prior to,
------------------
or on, the Option Date. If all applicable conditions are met, the insurance
purchased under such rider or agreement becomes effective on that Option
Date.
3. For conversion or exchange: The policy that provides the insurance being
--------------------------
converted or exchanged must be received by the Company at its Home
Office/Principal Administrative Office. The first premium may be reduced by
any conversion allowances permitted. If all applicable conditions are met,
the insurance purchased under an exchange or conversion becomes effective
on the Issue Date of the policy applied for.
4. For insurance not provided for in 2 or 3 above: The first premium may be
----------------------------------------------
paid to the agent in exchange for a Conditional Receipt signed by that
agent. If this is done, the Company shall be liable only as set forth in
that Receipt. If not, (i) the policy must be delivered to the person named
as Owner therein; and (ii) at the time of payment and delivery, all
statements that relate to the insurability of the Insured are complete and
true as though they were made at that time.
Authority of Agents - No agent can change the terms of this application or any
policy issued by the Company. No agent can waive any of the Company's rights or
requirements or extend the time for any payment.
Changes and Corrections - Any change or correction of the application will be
shown on an Amendment of Application attached to the policy. Acceptance of any
policy issued shall be acceptance of any change or correction of the application
made by the Company. However, any correction or change of amount,
classification, plan of insurance, or riders, and any change to a disability
insurance policy applied for in this application, must be agreed to in writing.
Taxpayer Identification - The Owner of the policy applied for herein certifies,
under penalties of perjury, that: (i) the number referred to in 5, 13, 38, or 48
of this application is his/her correct Taxpayer Identification Number (or he/she
is waiting for a number to be issued); and (ii) he/she is not subject to backup
withholding either because he/she has not been notified by the Internal Revenue
Service (IRS) that he/she is subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified him/her
that he/she is no longer subject to backup withholding. If the IRS has notified
said Owner that he/she is subject to backup withholding and he/she has not
received notice from the IRS that backup withholding has terminated, he/she
should strike out the language above in (ii) that he/she is not subject to
backup withholding due to notified payee underreporting.
Authorization To Obtain And Disclose Information (For The Insured And/Or
Applicant) - I have received the Notice about the Medical Information Bureau,
Inc. (MIB). I have also received the Notice about the Fair Credit Reporting Act.
I understand and authorize an investigative report to be made. This report may
include information about my character, general reputation, personal
characteristics, and mode of living. I hereby authorize certain parties that
have any records or knowledge of me and my health (or my children and their
health if juvenile insurance), to make such information available to the Company
or its reinsurers. These parties include: any licensed physician, medical
practitioner, hospital, clinic, other medical or medically related facility,
insurance company, the MIB, or other organization. I agree that a photocopy or
facsimile of this authorization may be used to obtain information.
- --------------------------------------------------------------------------------
ANY POLICY ISSUED AS A RESULT OF A MATERIAL MISSTATEMENT OR OMISSION OF FACTS
MAY BE VOID, AND THE COMPANY'S ONLY OBLIGATION SHALL BE TO RETURN PREMIUMS
PAID.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
For All Cases Except Conversions and Exchanges For Conversions, Exchanges, or Option Purchases
Proposed Insured (if age 16 or older) Owner of Original Policy
- ----------------------------------------------------------- ----------------------------------------------------------
Applicant (as given in 10) Assignee of Original Policy
- ----------------------------------------------------------- ----------------------------------------------------------
Owner (if neither of above)
- -----------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Signed at on
--------------------------------------------------------------------- -----------------------------------
city state date
- -----------------------------------------------------------------------------------------------------------------------
General Agent submitting application Agent who actually solicited this application
- ----------------------------------------------------------- ----------------------------------------------------------
A3000-93000 Massachusetts Mutual Life Insurance Company and affiliated insurance companies Springfield mA 01111-0001
</TABLE>
<PAGE>
APPLICATION NO. AGENT'S STATEMENT
- --------------------------------------------------------------------------------
Complete for all cases
- --------------------------------------------------------------------------------
1.If Insured's name is to appear on the policy other than
"First Name-Middle Initial-Last Name," specify below
---------------------------------------------------------
---------------------------------------------------------
2. (a) Is application from a new premium-payer client to the
company? [_] Yes [_] No
(b) If the Insured is a previous client, give the Client
Identification No._________________________
3. How long have you known the Insured?_______________________
4. How well do you know the Insured?
[_] Very well [_] Casually [_] Met on solicitation
(If "Met on solicitation," give details in 21.)
5. Supporting Information for a Business Related Sale
(a)Is business a [_] Sole Proprietorship [_] Partnership
[_] Corporation
Year Business Established ______ No. of Employees_________
(b) If policy is to be owned by a Business or Business Associate
Give names of the other officers or partners and the
amount of insurance the business now carries on their lives.
(If any officers or partners are not insured, explain in 21)
Name Title Amount
-------------------------------------------------------------
$
----------------------- ------------------ ---------------
$
----------------------- ------------------ ---------------
$
----------------------- ------------------ ---------------
6. Complete this question for Life Application Only
(a) Insured's Annual Earned Income Actual Agent Estimate
------ ------ --------------
$ [_] [_]
----------------------------
(b) Insured's Annual Unearned Income
--------
$ [_] [_]
----------------------------
(c) Spouse's Total Annual Income
$ [_] [_]
----------------------------
(d) Insured's Net Financial Worth
$ [_] [_]
----------------------------
7. Insured's Marital Status
[_] Single [_] Married [_] Widowed [_] Divorced
8. Do you have any knowledge of a present disability of the
Insured? [_] Yes [_] No (If "Yes," explain in 21)
9. Telephone Numbers:
(a) Soliciting Agent (if different from agency) - -
--------------------
(b) Insured
Home - - Business - -
--------------------- --------------------
(c) Applicant (if other than Insured)
Home - - Business - -
--------------------- --------------------
(d) Best time of day to call_________________________
10. (a) To the best of your knowledge, during the last six months has any policy
on the life of the Insured been, or if the application is approved, is
it contemplated that any policy will subsequently be, surrendered or
otherwise terminated, lapsed, or placed on other than a premium-paying
basis, rewritten to release cash values, reduced in amount or term of
coverage, assigned as collateral for a loan, or subjected to borrowing
of loan values? [_] Yes [_] No
(If "Yes," complete the following)
Company Policy Face Monthly
Name Number Product Amount Benefit
- --------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(b) Have you delivered the appropriate replacement form?
[_] Yes [_] No
(c) Did you use any form of sales materials? [_] Yes [_] No
(If a replacement, a copy of the sales illustration must be forwarded
with this application if required by your state)
11. Was this application taken by mail? [_] Yes [_] No
12. (a) If this is a multi-life case, it is one of____applications being
submitted for a [_] Business [_] Family [_]
(b) Was a census submitted to the Home Office? [_] Yes [_] No
(c) This is an Offer Guaranteed case for [_] Life [_] DI
13. (a) Is any policy to be part of a [_]Pension/Profit Sharing Plan
[_] Split Dollar [_] Payroll Deduction Plan
(b) If Life Insurance is being purchased, indicate the primary
purpose by checking the appropriate box.
Personal Needs...
[_] Mortgage Cancellation [_] Retirement
[_] Education Fund [_] Estate Liquidity
[_] Income for Dependents [_] Gifts
[_] Other Personal Needs (Explain in 21)
Business Needs...
[_] Stock Redemption [_] Cross Purchase
[_] Key Employee [_] Deferred Compensation
[_] Section 162 Bonus Plan [_] Other Business Needs
(Explain in 21)
14. If ALIR is requested, to the best of your understanding, will the ALIR
payment(s) be [_] for one year
[_] on a continuing basis
15. If premiums will be paid by government allotment
(a) Service Branch and Serial Number of premium payer
_____________________________________________________________________
(b) Amount of allotment $_______ Date filed ________________
(c) If initial premium is not prepaid, Form P1167 must be
submitted. Use [_] Method 2 [_] Method 3
16. (a) Will dividends from any existing MassMutual policy be
used to pay all or part of the initial premium on this
policy? [_] Yes [_] No (If "Yes," Complete Form R1857)
(b) Will the initial premium be paid by a loan from any
MassMutual policy? [_]Yes [_]No
(If "Yes," Complete Form R1857)
(c) Will the initial premium be paid from the MassMutual
Oppenheimer Funds? [_]Yes [_]No
(If "Yes," Complete Form M1480)
17. (a) Are you the Proposed Insured? [_] Yes [_] No
(b) Is the Insured your spouse/child/parent/sibling?
[_] Yes [_] No
18. If you are not a full-time MassMutual Agent, what is your primary company
affiliation? ____________________________________________________________
19. List below the agent(s) who will receive commissions. If more than one,
enter percentage applicable to each.
Agent's Agent's First Yr. Ren'l
Name Ident. Code % %
- --------------------------------------------------------------------------------
- -------------------- ------------------- ------------------ --------------------
- -------------------- ------------------- ------------------ --------------------
- -------------------- ------------------- ------------------ --------------------
- -------------------- ------------------- ------------------ --------------------
- -------------------- ------------------- ------------------ --------------------
- -------------------- ------------------- ------------------ --------------------
100% 100%
20. If the sale of this policy will be credited to more than one General Agency,
specify below:
Agency Name Agency No. % of Split
- --------------------------------------------------------------------------------
- ------------------------- ------------------------ ---------------------------
- ------------------------- ------------------------ ---------------------------
100%
21. Remarks
- --------------------------------------------------------------------------------
Date_____________ Signature of Soliciting Agent ________________________________
________________________________________________________________________________
A3000-9300A
<PAGE>
APPLICATION (PART 2)
APPLICATION NO.
To: [_] Massachusetts Mutual Life Ins. Co.
[_] MML Bay State Life Ins. Co. [_] MML Life Ins. Co.
Springfield, Massachusetts 01111
- --------------------------------------------------------------------------------
Personal Information
- --------------------------------------------------------------------------------
In all cases, the terms "you" and "your" refer to the Proposed
Insured.
1. a. Full name of Proposed Insured
First Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Middle Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Last Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Suffix
[_][_][_](e.g. Jr., III)
mo. day yr.
b.Date of Birth
-----------------------------------------------------------------
c. Client ID (If known)
---------------------------------------------------------
d.Social Security No. [_][_][_] [_][_] [_][_][_][_]
- --------------------------------------------------------------------------------
Do not complete 2 if being medically examined.
2. a.Height in shoes ft. in.
------ -----
b.Weight (clothed) lbs.
-----------
c.Loss in weight in the past year? [_] Yes [_] No
If "Yes",. Amount lbs. Reason
---------- ----------------------------------
- --------------------------------------------------------------------------------
Age if Age at
3. Family History Living Death Cause of Death
- --------------------------------------------------------------------------------
a.Father
- --------------------------------------------------------------------------------
b.Mother
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
General Health
- --------------------------------------------------------------------------------
If "Yes" to any question, please explain in 11, below. Yes No
- --------------------------------------------------------------------------------
4. Have any of your parents, brothers or sisters:
a. had cardiovascular disease prior to age 60? [_] [_]
b. ever had diabetes, kidney disease, or other
familial disorder? [_] [_]
- --------------------------------------------------------------------------------
5. a. Have you smoked cigarettes in the last
12 months?.................................. [_] [_]
b. If "no", have you ever smoked them?........ [_] [_]
c. Do you use tobacco or nicotine in any
other form?................................ [_] [_]
- --------------------------------------------------------------------------------
6. Have you ever received any treatment in
relation to alcoholism or use of alcohol?..... [_] [_]
- --------------------------------------------------------------------------------
7. Have you ever used barbiturates, narcotics,
cocaine or other controlled substances not
prescribed by a physician?.................... [_] [_]
- --------------------------------------------------------------------------------
8. Have you applied for life or health insurance
and been declined, postponed, rated or
restricted in the last ten years?............. [_] [_]
- --------------------------------------------------------------------------------
9. Have you ever requested or received a pension,
benefits, or payment because of an injury,
sickness or disability?....................... [_] [_]
- --------------------------------------------------------------------------------
10. Have you been treated for, or been diagnosed by
a member of the medical profession as having, a
deficiency of the immune system such as acquired
immune deficiency syndrome (AIDS) or AIDS
related complex (ARC)?........................ [_] [_]
- --------------------------------------------------------------------------------
11. COMPLETE 11 FOR EACH "YES" ANSWER IN 4-10 ABOVE
- --------------------------------------------------------------------------------
Question
Number Explanatory Details and Remarks
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A3500-9000
<PAGE>
Page 2
APPLICATION NO.
- --------------------------------------------------------------------------------
Medical History
- --------------------------------------------------------------------------------
Complete 29 Below For Each Medical History Checked in 12 - 27
For Questions 12 - 27, have you ever been advised of, treated for, or had any
known indication of:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
12. ASTHMA OR BRONCHITIS 14. ULCER 16. CYSTS
<S> <C> <C>
[_] Not Applicable [_] Not Applicable [_] Not Applicable
Type: Type:
a - [_] Asthma a - [_] Duodenal a - Type:
b - [_] Bronchitis b - [_] Gastric (stomach) ------------------------------
c - [_] Chronic Bronchitis c - [_] Other (specify)
d - [_] Other --------------- [_] Check here if removed
-------------- (specify)
(specify)
Yes No Pathology:
Yes No [_] [_] Have you had a bleeding ulcer? [_] Benign (non cancerous)
[_] [_] Wheezing between acute attacks? [_] [_] Do you now have symptoms? [_] Malignant (cancerous)
[_] [_] Are the symptoms continuing? [_] [_] Was surgery required?
-------------------------------------------------------------------------------------
13. ARTHRITIS 15. COLITIS OR ILEITIS b - Type:
[_] Not Applicable [_] Not Applicable ------------------------------
Type: Type: (specify)
a - [_] Degenerative / Osteoarthritis a - [_] Spastic or Mucous Colitis [_]Check here if removed
b - [_] Rheumatoid b - [_] Ulcerative Colitis
c - [_] Gouty c - [_] Crohn's Disease (Ileitis) Pathology:
d - [_] Other d - [_] Other [_] Benign (non cancerous)
-------------- -------------- [_] Malignant (cancerous)
(specify) (specify)
Yes No
Bones or joints involved [_] [_] Was there associated bleeding?
-------------- [_] [_] Do you now have symptoms?
---------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
17. Disorder of:
<S> <C> <C> <C> <C>
a- [_] Eyes b- [_] Ears c- [_] Nose d- [_] Throat e- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
18. a- [_] Spine c- [_] Back e- [_] Muscles g- [_] Joints
b- [_] Bones d- [_] Neck f- [_] Nerves (incl. h- [_] None of These
Neuritis)
- ------------------------------------------------------------------------------------------------------------------------------------
19. a- [_] Fainting c- [_] Convulsions e- [_] Recurrent Headache g- [_] Nervous Disorder
b- [_] Dizziness d- [_] Paralysis f- [_] Stroke h- [_] Mental Disorder i- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
20. a- [_] Pneumonia d- [_] Pleurisy g- [_] Persistent Hoarseness
b- [_] Emphysema e- [_] Shortness of Breath h- [_] Chronic Respiratory i- [_] None of These
c- [_] Tuberculosis f- [_] Persistent Cough Disorder
- ------------------------------------------------------------------------------------------------------------------------------------
21. a- [_] High Blood c- [_] Heart Murmur e- [_] Heart Attack g- [_] Blood Vessel
Pressure Disorder
b- [_] Rheumatic Fever d- [_] Palpitation f- [_] Chest Pain h- [_] Heart Disorder i- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
22. a- [_] Hemorrhoids d- [_] Anorexia Nervosa g- [_] Recurrent j- [_] Intestinal
Indigestion Disorder
b- [_] Hepatitis e- [_] Bulimia h- [_] Stomach Disorder k- [_] Gallbladder
Disorder
c- [_] Diverticulitis f- [_] Liver Disorder i- [_] Recurrent Diarrhea l- [_] Intestinal m- [_] None of These
Bleeding
- ------------------------------------------------------------------------------------------------------------------------------------
23. a- [_] Kidney Stone d- [_] Sugar in Urine g- [_] Kidney Disorder i- [_] Pus in Urine
b- [_] Albumin in Urine e- [_] Prostate Disorder h- [_] Reproductive System j- [_] Sexually
c- [_] Blood in Urine f- [_] Bladder Disorder Disorder Transmitted
Disease k- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
24. a- [_] Diabetes b- [_] Thyroid Disorder c- [_] Endocrine d- [_] None of These
(glandular) Disorder
- ------------------------------------------------------------------------------------------------------------------------------------
25. a- [_] Allergies c- [_] Leukemia e- [_] Congenital Disorder
b- [_] Anemia d- [_] Blood Disorder f- [_] Recurrent Infections g- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
26. a- [_] Sciatica c- [_] Lameness e- [_] Amputation
b- [_] Gout d- [_] Deformity f- [_] Speech Defect g- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
27. a- [_] Skin Cancer c- [_] Cancer e- [_] Tumor
b- [_] Fibroids d- [_] Skin Disorder f- [_] Lymph Gland Disorder g- [_] None of These
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Other Medical Information and Details
- --------------------------------------------------------------------------------
28. Other than previously stated in this application, within the last five years
------------------------------------------------
have you: Yes No
a. Had any mental or physical disorder? ........................... [_] [_]
b. Had a consultation, surgery, or injury requiring treatment by
a physician, hospital or other medical facility? ............... [_] [_]
c. Had any electrocardiogram, x-ray or other diagnostic test? ..... [_] [_]
d. Been advised to have medical treatment, diagnostic tests,
hospitalization or surgery which was not completed; or are you
now planning to seek such advice or treatment? ................. [_] [_]
e. Been, or are you currently, under treatment or taking any
medication? .................................................... [_] [_]
For each item checked "Yes", enter details in 29.
- --------------------------------------------------------------------------------
A3500-9000
<PAGE>
Page 3
APPLICATION NO.
- --------------------------------------------------------------------------------
COMPLETE 29 FOR EACH APPROPRIATE ITEM CHECKED IN 12 - 28 ABOVE
- --------------------------------------------------------------------------------
29. Explanatory Details and Remarks for Medical History (Use form A3510 for
additional histories).
<TABLE>
<CAPTION>
A.Ques. Medication/ Still Under # of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------- [_]Yes [_]No
- -------------------------------------------------------------------------------------------------------------------
Physician / Medical Facility Name Address ZIP
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
B.Ques. Medication/ Still Under # of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------- [_]Yes [_]No
- -------------------------------------------------------------------------------------------------------------------
Physician / Medical Facility Name Address ZIP
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
C.Ques. Medication/ Still Under # of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------- [_]Yes [_]No
- -------------------------------------------------------------------------------------------------------------------
Physician / Medical Facility Name Address ZIP
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
D.Ques. Medication/ Still Under # of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------- [_]Yes [_]No
- -------------------------------------------------------------------------------------------------------------------
Physician / Medical Facility Name Address ZIP
-----------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
30. Personal Physician Information
a. [_] Name / Address given in: [_] 29A [_] 29B [_] 29C [_] 29D b. Reason you last consulted this physician
[_] Have no personal physician [_] As indicated in: [_] 29A [_] 29B [_] 29C [_] 29D
[_] Other - give Personal Physician Name / Address here: [_] Routine or General Exam - all findings normal
Physician Name [_] Other - give details here:
Date Last Seen
--------------------------------------------------------------- ----------------------------------------------
Address Diagnosis or
Reason Last Seen
--------------------------------------------------------------- --------------------------------------------
City State ZIP Medication/
Treatment
--------------------------------------------------------------- --------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
I agree that: (1) this application consists of Parts 1 and 2 and any amendments and supplements which shall be attached to the
policy if issued and (2) no knowledge on the part of any agent, medical examiner or any other person as to any facts pertaining
to me shall be considered as having been made to or brought to the knowledge of the Company unless stated in either Part 1
or 2 of this application or any amendments or supplements. To the best of my knowledge and belief, all information is
complete and true and was correctly recorded before I signed my name below.
Signed at on , 19
---------------------------------------------------------- --------------- ----------
city state date
Proposed
Witness Insured
------------------------------------------- ----------------------------------------------------
Medical Examiner - or Agent if Non-Medical
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A3500-9000
Amount Agency Printed Name
Applied For $____________ Name_____________ No.________ of Agent______________
<PAGE>
APPLICATION NO.
<TABLE>
<CAPTION>
MEDICAL EXAMINER'S REPORT
EXAMINATION TO BE MADE IN PRIVATE AND THIS BLANK TO BE COMPLETED BY THE MEDICAL EXAMINER IN HIS OR HER HANDWRITING
<S> <C>
1. A. Height in shoes ft. in. 10. Details of "yes" answers and supplementary
------------- -----------
B. Weight (clothed) lbs. remarks. Identify them by question number.
--------------- ------------------------------------------------
C. Loss in weight the past year [_] Yes [_] No Ques. No. Comments
If "Yes", Amount lbs. Reason ------------------------------------------------
------- ---------------------------------
- ---------------------------------------------------------------------------------
2. BLOOD PRESSURE (sitting): -------------------------------------------------
If first reading over 140/90 or under 110/70, make two additional readings.
------------------------------------------------------ -------------------------------------------------
Systolic
------------------------------------------------------ -------------------------------------------------
Diastolic (fifth phase)
- --------------------------------------------------------------------------------- -------------------------------------------------
3. PULSE: At Rest After Exercise 3 Minutes Later
Rate ----------------------------------------------------- -------------------------------------------------
Irregularities per min.
- ------------------------------------------------------------------------------------------------------------------------------------
4. HEART: Is there any
Enlargement [_] Yes [_] No Dyspnea [_] Yes [_] No -------------------------------------------------
Murmur(s) [_] Yes [_] No Edema [_] Yes [_] No
(Describe below - if more than one, describe separately) -------------------------------------------------
-------------------
Location Murmur Murmur -------------------------------------------------
-------------------
1. 2. Indicate: -------------------------------------------------
-------------------
Frequency: -------------------------------------------------
- Constant [_] [_]
- Inconstant [_] [_] Apex by X. -------------------------------------------------
[DRAWING OF RIBCAGE
Transmission: APPEARS HERE] -------------------------------------------------
- Transmitted [_] [_]
- Localized [_] [_] Murmur area by O. -------------------------------------------------
Timing: Point of greatest -------------------------------------------------
- Systolic [_] [_] intensity by M.
- Diastolic [_] [_] -------------------------------------------------
- Presystolic [_] [_] Transmission by -------->
-------------------------------------------------
Grade:
- Soft (Gr. 1-2) [_] [_] Based on the history and examination, what is -------------------------------------------------
- Mod. (Gr. 3-4) [_] [_] your impression?
- Loud (Gr. 5-6) [_] [_] -------------------------------------------------
After exercise characteristics: -------------------------------------------------
- Increased [_] [_]
- Absent [_] [_] -------------------------------------------------
- Unchanged [_] [_]
- Decreased [_] [_] -------------------------------------------------
- ---------------------------------------------------------------------------------
5. Is there on examination any abnormality of the following: -------------------------------------------------
(Circle applicable items and give details) Yes No
A. Head; eyes; ears; nose; mouth; pharynx?......................... [_] [_] -------------------------------------------------
B. Skin (incl. scars); lymph nodes; varicose
veins or peripheral arteries?................................... [_] [_] -------------------------------------------------
C. Nervous system (include reflexes, gait, paralysis)?............. [_] [_]
D. Lungs?.......................................................... [_] [_] -------------------------------------------------
E. Abdomen (include scars)?........................................ [_] [_]
F. Genitourinary system?........................................... [_] [_] -------------------------------------------------
G. Endocrine system (include thyroid and breasts)?................. [_] [_]
H. Musculoskeletal system (include spine, joints, -------------------------------------------------
amputations, deformities)?...................................... [_] [_]
- ---------------------------------------------------------------------------------- -------------------------------------------------
6. A. Are there any hernias?.......................................... [_] [_]
B. Any hemorrhoids (by history or observation)?.................... [_] [_] -------------------------------------------------
- ----------------------------------------------------------------------------------
7. Are you aware of or do you suspect any other medical, -------------------------------------------------
alcoholic or drug history?.......................................... [_] [_]
(A confidential report may be sent to the Medical Director.) -------------------------------------------------
- ----------------------------------------------------------------------------------
A urinalysis must be performed unless a specimen is being sent. -------------------------------------------------
8. URINALYSIS: Albumin Sugar
If albumin or sugar is found, or the blood pressure is over 140/90, ------------------------------------------------
or if there is a history of genitourinary disease, diabetes or hypertension,
a specimen should be mailed to the designated lab facility.
Place lab ID slip
Is a specimen being sent to the designated lab facility?............ [_] [_]
bar code label here }
- ----------------------------------------------------------------------------------
9. Have you drawn blood or completed an EKG or X-ray on the Proposed Insured?
[_] Drawn Blood [_] EKG [_] X-ray
- ------------------------------------------------------------------------------------------------------------------------------------
Do you know the Proposed Insured? [_] Yes [_] No Are you related? [_] Yes [_] No
---------------------------------------------
I have reviewed the history and examined the Proposed Insured in private and witnessed his/her (Printed Name or Paramedical
signature at [_] My office [_] Proposed Insured's place of business Facility (if used))
[_] Proposed Insured's residence [_] M.D.
--------------------------------- ----------------------------------------
Signature of Medical Examiner
on this day of , 19 at o'clock M. M.D.
------------ ---------- -------- --------- ------ ---------------------------------------------
Printed Name of Medical Examiner
- ------------------------------------------------------------------------------------------------------------------------------------
A3500-MER-9300 Confidential information should be forwarded on separate copy to:
Medical Director, Massachusetts Mutual Life Insurance Company,
Springfield, Massachusetts 01111
</TABLE>
<PAGE>
Exhibit 99(A)(11)
Redemption and Transfer Procedures and Method
of Computing Adjustments on Payments and
Account Value Upon Conversion to Fixed Benefit Policies
-------------------------------------------------------
This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Massachusetts Mutual Life
Insurance Company ("MassMutual") and MML Bay State Life Insurance Company ("MML
Bay State")(collectively the "Company") in connection with the issuance of the
Policy described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interests in the
Policies. This document also describes, as required by Rule
6e-3(T)(b)(13)(v)(B), the method that MassMutual will use in adjusting the
payments and account values when a Policy is exchanged for a fixed benefit
insurance policy.
1. "Public Offering Price": Purchase and Related Transactions
Set out below is a summary of the principal Policy provisions and administrative
procedures which might be deemed to constitute, either directly or indirectly, a
"purchase" transaction. The summary shows that, because of the insurance nature
of the Policies, the procedures involved necessarily differ in certain
significant respects from the purchase procedures for mutual funds and
contractual plans.
(a) Premium Schedules and Underwriting Standards--The minimum initial
--------------------------------------------
premium for a Policy depends on the minimum initial premium on an
annual basis for the Selected Face Amount of the Policy and the
proposed frequency of planned premiums. In some cases it may also
depend on the total first monthly deductions under the Policy. A
premium payment schedule may be selected at the time of application and
may be changed at any time. There is a minimum planned premium for the
first year which depends upon the Selected Face Amount of the Policy,
the Insured's age and the amount of the initial premium paid. In
addition, this annual planned premium cannot be less than $300. A
Policyowner may make additional premium payments at any time before the
death of the Insured while the Policy is still in force, but such
payments cannot be less than $10.00 nor greater than the larger of 1)
the premium which will not increase the net amount at risk under the
Policy and 2) twice the Policy's minimum planned premium, plus $100.00.
The amount and frequency of any additional premium payments will affect
the Account Value and may ultimately affect the amount of the Death
Benefit and the period that the Policy will remain in force. The
Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws. State insurance
laws prohibit unfair discrimination among Insureds but recognize that
mortality charges must be based upon factors such as age, sex, health
and smoker status, and occupation.
(b) Application and Initial Premium Processing--Upon receipt of a
------------------------------------------
completed application MassMutual will follow certain insurance
underwriting (i.e., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve
such verification procedures as medical examinations and may require
that further information be provided by the proposed Insured before a
determination can be made. A Policy will not be issued until this
underwriting procedure has been completed. The Policy Date is the
starting point for determining Policy Anniversary Dates, Policy Years
and Monthly Calculation Dates. If a premium is paid with your
application, the Policy Date is the date we receive a completed Part 1
of Application. If no premium is paid with the application, the Policy
Date is 2 days after the underwriter approves the application and
releases the Policy for issue. The Register Date is the Policy Date,
the day you pay the first premium under the Policy or the day you
provide the Company with a completed Part 1 of Application, whichever
is latest. On the Register Date, MassMutual will allocate the initial
premium less certain deductions to the Guaranteed Principal Account
and/or the division(s) of the Separate Account in accordance with the
Policyowner's instructions in the application. Subsequent premium
payments will be allocated upon receipt. Allocation instructions can be
changed for any future premium payments. The allocation must be in
whole percentage points. Insurance coverage begins when a completed
application has been submitted, the applicant has been judged to be
insurable, and the initial premium has been paid. Otherwise, coverage
begins when the Policy has been issued and the Company has received the
first premium. This usually corresponds with the date the Policy is
delivered.
(c) Free Look Provision--A Policy may be returned at the election of
-------------------
the Policyowner within 45 days after the date Part 1 of Application for
the Policy was completed, or within 10 days after receipt of the issued
Policy by the Policyowner, or within 10 days after MassMutual mails or
delivers to the Policyowner a written notice of right of withdrawal,
whichever is latest. He may cancel increases in the Selected Face
Amount under the same time limitations. The Company will refund an
amount equal to the total of all premiums paid for the Policy. The
Policy will then be deemed void from the beginning. For cancelled
increases in the Selected Face Amount, the refund will equal the sum of
all premiums paid and allocated to the increase in Selected Face
Amount.
<PAGE>
(d) Repayment of Indebtedness--A loan made under the Policy will bear
-------------------------
interest at the rate of 6% per year or the Policyowner may select an
adjustable loan rate. For Policies under which an adjustable loan rate
is selected, MassMutual will set the rate that will apply for the next
Policy Year. The maximum rate is based on the monthly average of the
composite yield on seasoned corporate bonds as published by Moody's
Investors Service, or, if it is no longer published, a substantially
similar average. The maximum rate is the published monthly average for
the calendar month ending two months before the Policy Year begins, or
5%, whichever is higher. If the maximum limit is not at least 1/2%
higher than the rate in effect for the previous year, we will not
increase the rate. If the maximum limit is at least 1/2% lower than the
rate in effect for the previous year, we will decrease the rate.
Interest accrues and becomes part of the Policy Debt. It is due on each
Policy Anniversary. if not paid when due, the interest will be added to
the Policy Debt and will itself bear interest on the same terms. If the
Policy Debt exceeds the Account Value less surrender charges, we may
terminate the Policy. Prior to termination we must notify the
Policyowner in writing of the amount necessary to bring the Policy Debt
back within the limit. If we do not receive payment within 31 days of
the notice, the Policy will then terminate. Any Policy Debt may be
repaid in full or in part at any time while the Insured is living and
the Policy is in force. All repayments will be allocated to the GPA.
Any unpaid Policy Debt will be deducted from any amount payable from a
full surrender or upon the death of the Insured.
(e) Correction of Misstatement of Age or Sex--If MassMutual discovers
----------------------------------------
that the age or sex of the Insured has been misstated, MassMutual will
adjust future monthly deductions. If MassMutual discovers after the
death of the Insured that the age or sex of the Insured has been
misstated, MassMutual will adjust the Death Benefit to that which would
have been purchased by the most recent monthly mortality charge for the
true age or sex.
2. "Redemption Procedures": Surrender and Related Transactions
This section outlines those procedures which might be deemed to constitute
redemptions under the Policy. These procedures differ in certain significant
respects from the redemption procedures for mutual funds and contractual plans.
(a) Account Values--At any time before the death of the Insured the
--------------
Policyowner may surrender the Policy and receive the Cash Surrender
Value. This value is equal to the Account Value less any surrender
charges and Policy Debt. At no time, however, will the Cash Surrender
Value be less than zero. In addition, after the first six months of the
Policy, Withdrawals may be made on any Monthly Calculation Date by
sending a written request to MassMutual. The minimum amount of any
Withdrawal will be that amount which, before any withdrawal charge is
applied, equals $100. The maximum amount of any Withdrawal is the Cash
Surrender Value but the Withdrawal may not reduce the Account Value to
an amount less than the cumulative sum of the minimum planned premiums
to date. The amount withdrawn will be deducted from the Policy Account
Value at the end of the Valuation Period applicable to the Monthly
Calculation Date on which the withdrawal is made. Withdrawals may be
made from the GPA or from any division as the Policyowner directs.
Surrenders and Withdrawals from the Separate Account will generally be
paid within seven days of receipt of the written request./1/ A
surrender charge will be assessed if the Policyowner surrenders the
Policy or decreases the Policy's Selected Face Amount. The surrender
charge is the sum of the surrender charges for the original Selected
Face Amount and all increases and is made up of an Administrative and a
Sales Load Component. The Administrative surrender charge for both the
Selected Face Amount and any increases are determined separately for
each insurance segment in force. The charge begins at $5 per $1000 of
the Policy's Selected Face Amount and grades down over 10 years to
zero. The Sales Load Component is also determined separately for each
insurance segment in force and for the first 10 years is equal to 24.5%
of the premium paid for a particular insurance segment up to the
surrender charge band for that segment plus 4.5% of premiums paid in
excess of one band but less than two bands, plus 3.5% of premiums in
excess of two but less than three bands. In each case the surrender
charge is in addition to the 5.5% sales charge deducted from each
premium. Assuming a segment is surrendered during the first 10 Policy
Years, the total sales charge is, therefore, equal to 30% of the
premiums paid for that segment up to the band for that segment, plus
10% of premiums paid in excess of one band but less than two bands,
plus 9% of premiums in excess of two but less than three bands, and
5.5% of all subsequent payments. The Sales Load Surrender Charge, as
calculated above, remains level for the first 10 Policy years. In years
11 through 15, it reduces to zero in accordance with certain
percentages set forth in the Policy. Upon surrender, the surrender
charge is deducted from Account Value
- ------------------------------------
/1/ Payment from the Separate Account may be postponed whenever: (i) the New
York Stock Exchange is closed other than for customary week-end and holiday
closings, or trading on the New York Stock Exchange is restricted as determined
by the SEC or (ii) an emergency exists, as determined by the SEC, as a result of
which disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate Account's net
assets. Payments from the portion of the Account Value held in the Guaranteed
Principal Account may be postponed for up to six months. Payments under the
Policy of any amount paid to MassMutual by check may be postponed until such
time as the check has cleared the Policyowner's bank.
<PAGE>
prior to paying the surrender value to the Policyowner. Surrender
charges for an insurance segment are also deducted when insurance
segments are cancelled under a decrease in Selected Face Amount.
Insurance segments are cancelled on a last purchased, first surrendered
basis. If only a portion of an insurance segment is cancelled, a pro
rata portion of the full surrender charge for the segment will be
imposed. In addition to the surrender charge, a withdrawal fee equal to
the lesser of $25 or 2% of the amount withdrawn will be assessed. It
will be deducted from the amount withdrawn and the balance will go to
the Policyowner. The Withdrawal will not be allowed if to do so would
reduce the Account Value to an amount less than the cumulative sum of
the Policy's minimum planned premiums to date.
(b) Benefit Claims--As long as the Policy remains in force, MassMutual
--------------
will pay a Death Benefit to the named Beneficiary in accordance with
the designated settlement option generally within seven days after
MassMutual receives due proof of death of the Insured and verifies the
validity of the claim. Payment of Death Benefits may, however, be
postponed under certain circumstances./2/ In particular, during the
first two Policy Years, during the first two years after an increase in
Selected Face Amount, and in other circumstances in which MassMutual
may have a basis for contesting the claim, there can be a delay beyond
the seven day period. We will investigate all death claims arising
within the two-year contestable period. Upon receiving the information
from a completed investigation, we will generally make a determination
within five days as to whether the claim should be authorized for
payment. Payments will be made promptly after authorization. If payment
is delayed 30 days or more, we will add interest at an annual rate of
3%. The Death Benefit is the greater of (a) the Selected Face Amount in
effect on the date of death, or (b) the Minimum Face Amount in effect
on the date of death. The Minimum Face Amount is equal to Account Value
times the Minimum Face Amount percentage. These percentages depend upon
the Insured's age, sex and smoking classification. To this we will add
the value of any additional benefits provided by rider and any charges
or interest for periods beyond the date of death. The Death Benefit
will be reduced by any Policy Debt and, if death occurs during a grace
period, any unpaid charges under the Policy. An increase in Account
Value may increase the Death Benefit, but, as long as the Policy
remains in force, a decrease in Account Value may only decrease the
Death Benefit down to an amount equal to the Selected Face Amount.
(c) Policy Loans--At any time after the first Policy Year, the
------------
Policyowner may borrow under the Policy up to an amount equal to 90% of
the total of the Account Value at the time of the loan less the then
applicable surrender charge, less any outstanding Policy Debt. Written
requests for a loan must be sent to the Administrative Offices in a
form acceptable to MassMutual. The Policy must be properly assigned as
collateral for the loan. The Policy Debt is equal to the amount of all
loans under the Policy plus interest which accrues daily. Interest
payments are due on each Policy Anniversary. If not paid when due,
interest will be added to the Policy Debt and, as part of the loan,
will bear interest on the same terms and will also be secured by
Account Value in the GPA. If a loan is made and any of the Account
Value is in the Separate Account, then monies will be transferred from
the Separate Account Funds to the GPA on a pro rata basis. That portion
of the Account Value held in the GPA to secure a loan will accrue
earnings at the policy loan interest rate declared by MassMutual rather
than a rate of return reflecting the investment performance of the
Separate Account. If the Policy Debt exceeds the Account Value less
surrender charges, we may terminate the Policy. Prior to termination we
must notify the Policyowner in writing of the amount necessary to bring
the Policy Debt back within the limit. If we do not receive payment
within 31 days of the notice, the Policy will then terminate.
The Policy Debt will bear interest at the rate of 6% per year or the
Policyowner may select an adjustable loan rate. For Policies under
which an adjustable loan rate is selected, MassMutual will set the rate
that will apply for the next year. The maximum rate is based on the
monthly average of the composite yield on seasoned corporate bonds as
published by Moody's Investors Service or, if it is no longer
published, a substantially similar average. The maximum rate is the
published monthly average for the calendar month ending two months
before the Policy Year begins, or 5%, whichever is higher. If the
maximum limit is not at least 1/2% higher than the rate in effect for
the previous year, we will not increase the rate. If the maximum limit
is at least 1/2% lower than the rate in effect for the previous year,
we will decrease the rate. Any Policy Debt may be repaid in full or in
part at any time while the Insured is living and the Policy is in
force. All repayments will be allocated to the GPA. Repayment will not
result in the transfer of values from the GPA to the divisions of the
Separate Account. If the loan is not repaid, we will deduct the amount
due from any amount payable from a full surrender or upon the death of
the Insured. A Policy loan, whether or not repaid, will have a
permanent effect on the Policyowner's Account Value to the extent that
the investment results of the division(s) or the rate of return on
funds in the GPA not securing a loan differ from the rate credited on
funds which secure a loan. The longer a loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the division(s) or the GPA earn interest at a rate
greater than the rate credited on funds which secure a loan, a
Policyowner's Account Value will be less than it would have been had no
loan been made. If the division(s) earn interest at a rate less than
the rate credited on funds which secure a loan, the Policyowner's
Account Value will be greater than it would have been had no loan been
made. A Policy loan, whether or not repaid, can also have an effect
- -----------------------------------
/2/ See note 1, supra.
<PAGE>
on the Policy's Death Benefit during periods that an increase or
decrease in Account Value will result in an increase or decrease in the
Policy's Death Benefit.
(d) Policy Termination--If the Account Value less any Policy Debt is
------------------
not sufficient to pay certain monthly deductions under the Policy on
the Monthly Calculation Date, the remaining Account Value will be
applied and the Policy will terminate after a grace period of 61 days.
The Policy will stay in force during the grace period. Notice of the
amount required to continue the Policy in force will be mailed to the
addressee of record at his last known address and, if required, to any
assignee of record. If a sufficient payment is not received by
MassMutual during the grace period, the Policy will terminate without
value on the later of the 61 days or 30 days after the notice is
mailed. If a sufficient payment is received during the grace period,
the payment will be allocated among the GPA and the division(s) in
accordance with the Policyowner's then current instructions. If the
Insured dies during a grace period, the Death Benefit proceeds will be
reduced by any due and unpaid monthly deductions to the date of death.
3. Transfers--The Separate Account currently has four divisions, each of which
invests exclusively in shares of one of four Funds of the Trust, an open-end
diversified management investment company registered with the SEC. Policyowners
may effect up to 4 transfers per Policy Year among the divisions. However,
Policyowners may transfer all funds in the Separate Account to the GPA at any
time regardless of the number of transfers previously made. Transfers from the
GPA to the Separate Account may be made only once each Policy Year. Each such
transfer may not exceed 25% of the Account Value in the GPA at the time of the
transfer. More than 25% may be transferred after 3 consecutive 25% transfers
have been made, provided no value has been allocated or transferred to the GPA
by the Policyowner in the 3 prior Policy Years. The Account Value in the GPA
equal to any Policy Debt cannot be transferred to the Separate Account. Any
transfer will take effect on the date we receive a written request, satisfactory
to us, at our Principal Administrative Office.
4. Exchange procedure--The Policyowner may transfer the entire Account value
under the Policy to the GPA at any time. This transfer converts the Policy into
a fixed benefit policy. The transfer will take effect when we receive a written
request.
<PAGE>
Exhibit 99.B
[MASSMUTUAL LETTERHEAD WITH LOGO]
April 20, 1998
MML Bay State Life Insurance Company
1295 State Street
Springfield, MA 01111
RE: MML Bay State Variable Life Insurance registered on Form S-6
Commission File No. 33-19605
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of the Post-Effective
Amendment No. 10 to the Registration Statement No. 33-19605 under the Securities
Act of 1933 for MML Bay State Variable Life Plus. MML Bay State Variable Life
Separate Account I issues Variable Life Plus.
As Counsel for MML Bay State Life Insurance Company, ("MML Bay State"), I
provide legal advice to MML Bay State in connection with the operation of its
variable products. In such role I am familiar with the registration statement
for the product.
In so acting, I have made such examination of the law and examined such records
and documents as in my judgment are necessary or appropriate to enable me to
render the opinion expressed below. I am of the following opinion:
1. MML Bay State is a valid and subsisting corporation, organized and operated
under the laws of the State of Missouri and is subject to regulation by the
Connecticut Commissioner of Insurance.
2. MML Bay State Variable Life Separate Account I is a separate account
validly established and maintained by MML Bay State in accordance with
Connecticut law.
3. All of the prescribed corporate procedures for the issuance of Variable
Life Plus Policies have been followed, and all applicable state laws will be
complied with.
I hereby consent to the use of this opinion as an exhibit to this Post-Effective
Amendment.
Very truly yours,
/s/ Richard M. Howe
Richard M. Howe
Second Vice President & Assoc. General Counsel
<PAGE>
Exhibit 99.E
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MML Bay State Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 10 to the
Registration Statement of MML Bay State Variable Life Separate Account I
(Variable Life Plus segment) on Form S-6 (Registration No. 33-19605), of our
report dated February 3, 1998 on our audits of MML Bay State Variable Life
Separate Account I (Variable Life Plus segment), and of our report dated
February 6, 1998 on our audits of the statutory financial statements of MML Bay
State Life Insurance Company, which includes explanatory paragraphs relating to
the use of statutory accounting practices, which differ from generally accepted
accounting principles. We also consent to the reference to our Firm under the
caption "Experts."
Coopers & Lybrand, L.L.P.
Springfield, Massachusetts
April 24, 1998
<PAGE>
Exhibit 99.F
[MASSMUTUAL LETTERHEAD WITH LOGO]
April 20, 1998
MML Bay State Life Insurance Company
1295 State Street
Springfield, MA 01111
Ladies and Gentlemen:
This opinion is furnished in connection with Post-Effective Amendment No. 10 to
Registration Statement No. 33-19605 for MML Bay State Life Insurance Company's
Flexible Premium Variable Whole Life Insurance Policies (the "Policies") under
the Securities Act of 1933. The prospectus included in the post-effective
amendment describes the Policies. I am familiar with the forms of the Policies
and the prospectus.
In my opinion, the illustrations of benefits under the Policies included in the
section entitled "Illustrations" in Appendix A of the prospectus, based on the
assumptions stated in the illustrations, are consistent with the provisions of
the respective forms of the Policies. The age selected in the illustrations is
representative of the manner in which the Policies operate.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 10 to Registration Statement No. 33- 19605, and to the reference
of my name under the heading "Experts" in the prospectus.
Sincerely,
/s/ Craig Waddington
Craig Waddington, FSA, MAAA
Vice President and Actuary
