SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
June 30, 1997
Unaudited
Statement of Assets and Contract Owners' Equity See below
Statement of Operations See below
Statement of Changes in Contract Owners' Equity See below
Supplementary Information -- Selected Per Accumulation
Unit Data and Ratios See below
Notes to Financial Statements See below
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENT OF ASSETS AND CONTRACT OWNERS' EQUITY (UNAUDITED)
June 30, 1997
<CAPTION>
Sub-Account
---------------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
---------------------------------------------------------
<C> <C> <C> <C>
<S>
ASSETS
Investment in Scudder Variable Life Investment Fund
- at net asset value - Note C:
Bond portfolio (867,659.735 shares) $5,804,644
Money Market portfolio (463,986.750 shares) $ 463,987
Capital Growth portfolio (1,681,265.786 shares) $31,826,361
Growth and Income portfolio (161,414.572 shares) $1,702,924
$5,804,644 $ 463,987 $31,826,361 $1,702,924
CONTRACT OWNERS' EQUITY $5,804,644 $ 463,987 $31,826,361 $1,702,924
Accumulation units outstanding 2,213,992 247,747 6,382,535 1,261,073
Accumulation unit value $ 2.621799 $1.872824 $ 4.986476 $ 1.350376
Scudder Variable Life Investment Fund share price $ 6.69 $ 1.00 $ 18.93 $ 10.55
Scudder Variable Life Investment Fund cost $5,715,987 $ 463,987 $25,373,547 $1,381,188
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
Six Months Ended June 30, 1997
Sub-Account
---------------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
---------------------------------------------------------
<C> <C> <C> <C>
<S>
Investment income:
Interest $ - $ - $ - $ -
Dividends 216,192 12,026 2,133,552 70,045
Other - - - -
216,192 12,026 2,133,552 70,045
Expenses--Note B
Annuity rate guarantee charge 24,222 1,951 115,882 5,876
Investment advisory and management fee - - - -
Accounting service fee 10,381 836 49,664 2,518
General and administrative expenses - - - -
34,603 2,787 165,546 8,394
NET INVESTMENT INCOME 181,589 9,239 1,968,006 61,651
Realized and unrealized gain (loss) on investment:
Realized gain - - - -
Unrealized gain(loss) on investments- Note C
End of period 88,656 - 6,452,814 321,736
Beginning of period 125,368 - 2,359,637 128,778
Net unrealized gain(loss) (36,712) - 4,093,177 192,958
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (36,712) - 4,093,177 192,958
INCREASE IN NET ASSETS
FROM OPERATIONS $ 144,877 $ 9,239 $6,061,183 $ 254,609
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENT OF CHANGES IN CONTRACT OWNERS' EQUITY
<CAPTION>
Six Months Ended June 30, 1997 (Unaudited)
----------------------------------------------------------------
Sub-Account
----------------------------------------------------------------
Money Capital Growth and
Bond Market Growth Income
----------------------------------------------------------------
<S> <C> <C> <C> <C>
ADDITIONS (DEDUCTIONS):
From investment activities:
Net investment income $ 181,589 $ 9,239 $ 1,968,006 $ 61,651
Net realized gain - - - -
Net unrealized gain (loss) (36,712) - 4,093,177 192,958
INCREASE IN CONTRACT OWNERS' EQUITY
FROM OPERATIONS 144,877 9,239 6,061,183 254,609
From capital transactions:
Contract purchase payments 99,502 17,832 389,385 36,872
Withdrawals and contracts surrendered - Note A (488,993) (12,975) (1,972,096) (20,912)
Death benefits (16,701) - (22,978) -
Net asset value of units transferred, including
exchanges with the Fixed Account (85,428) (25,462) 859,870 277,563
INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY
FROM CAPITAL TRANSACTIONS (491,620) (20,605) (745,819) 293,523
NET INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY (346,743) (11,366) 5,315,364 548,132
Contract owners' equity:
Beginning of period 6,151,387 475,353 26,510,997 1,154,792
End of period $ 5,804,644 $ 463,987 $31,826,361 $ 1,702,924
ANALYSIS OF CHANGES IN UNITS OUTSTANDING
Units sold 39,083 9,663 86,404 29,914
Units redeemed (197,011) (7,103) (459,339) (17,114)
Units transferred (32,734) (13,548) 200,097 240,296
INCREASE (DECREASE) IN UNITS OUTSTANDING (190,662) (10,988) (172,838) 253,096
Units outstanding at beginning of period 2,404,654 258,735 6,555,373 1,007,977
UNITS OUTSTANDING AT END OF PERIOD 2,213,992 247,747 6,382,535 1,261,073
<FN>
See notes to financial statements.
</TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
STATEMENT OF CHANGES IN CONTRACT OWNERS' EQUITY
Period from
July 1, 1996 to
Year Ended December 31, 1996 December 31, 1996
----------------------------------- -----------------
Sub-Account Sub-Account
----------------------------------- -----------------
Money Capital Growth and
Bond Market Growth Income
<S> <C> <C> <C> <C>
ADDITIONS (DEDUCTIONS):
From investment activities:
Net investment income $ 472,682 $ 38,276 $ 105,331 $ 4,572
Net realized gain 14,992 - 16,634,691 -
Net unrealized gain (loss) (459,878) - (11,784,092) 128,778
INCREASE IN CONTRACT OWNERS' EQUITY
FROM OPERATIONS 27,796 38,276 4,955,930 133,350
From capital transactions:
Contract purchase payments 232,733 42,845 941,849 17,910
Withdrawals and contracts surrendered - Note A (6,645,192) (1,128,015) (14,071,250) (20,578)
Death benefits (9,921) - (6,743) -
Net asset value of units transferred, including
exchanges with the Fixed Account 168,138 (152,562) 2,411,490 1,024,110
INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY
FROM CAPITAL TRANSACTIONS (6,254,242) (1,237,732) (10,724,654) 1,021,442
NET INCREASE (DECREASE) IN CONTRACT OWNERS' EQUITY (6,226,446) (1,199,456) (5,768,724) 1,154,792
Contract owners' equity:
Beginning of period 12,377,833 1,674,809 32,279,721 -
End of period $ 6,151,387 $ 475,353 $26,510,997 $ 1,154,792
ANALYSIS OF CHANGES IN UNITS OUTSTANDING
Units sold 101,221 23,836 282,867 16,527
Units redeemed (2,725,512) (641,984) (3,834,654) (18,493)
Units transferred 74,014 (68,741) 664,596 1,009,943
INCREASE (DECREASE) IN UNITS OUTSTANDING (2,550,277) (686,889) (2,887,191) 1,007,977
Units outstanding at beginning of period 4,954,931 945,624 9,442,564 -
UNITS OUTSTANDING AT END OF PERIOD 2,404,654 258,735 6,555,373 1,007,977
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
SUPPLEMENTARY INFORMATION--SELECTED PER ACCUMULATION UNIT DATA AND RATIOS
Selected data per accumulation unit outstanding throughout the period
<CAPTION>
Six Months Ended June 30, 1997 (Unaudited)
---------------------------------------------
Sub-Account
---------------------------------------------
Money Capital Growth and
Bond Market Growth Income
---------------------------------------------
<S> <C> <C> <C> <C>
Per accumulation unit data:
Investment income $ 0.09 $ 0.04 $ 0.33 $ 0.05
Expenses (0.01) (0.01) (0.02) (0.01)
NET INVESTMENT INCOME 0.08 0.03 0.31 0.04
Net realized and unrealized
gain(loss) on investments (0.02) 0.00 0.63 0.16
Net increase(decrease) in
accumulation unit value 0.06 0.03 0.94 0.20
Accumulation unit value at
beginning of period 2.56 1.84 4.04 1.15
ACCUMULATION UNIT VALUE
AT END OF PERIOD $ 2.62 $ 1.87 $ 4.98 $ 1.35
Ratios:
Ratio of mortality and expense assurance to
average value of accumulation units 1.16% 1.17% 1.16% 1.12%
Ratio of net investment income to
average value of accumulation units 6.08% 3.87% 13.78% 8.25%
Portfolio turnover rate - - - -
Net assets, end of period ($000's omitted) $ 5,805 $ 464 $31,826 $ 1,703
Number of accumulation units
outstanding at end of period
(000's omitted) 2,214 248 6,383 1,261
Note: 1996 Growth and Income ratios have been annualized.
<FN>
See notes to financial statements.
</TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
SUPPLEMENTARY INFORMATION--SELECTED PER ACCUMULATION UNIT DATA AND RATIOS
Selected data per accumulation unit outstanding throughout the period
<CAPTION>
Period from
7/1/96 to
Year ended December 31, 1996 12/31/96
-------------------------------- ---------------
Sub-Account Sub-Account
-------------------------------- ---------------
Money Capital Growth and
Bond Market Growth Income
-------------------------------- ---------------
<S> <C> <C> <C> <C>
Per accumulation unit data:
Investment income $ 0.16 $ 0.10 $ 0.07 $ 0.01
Expenses (0.03) (0.03) (0.06) (0.01)
NET INVESTMENT INCOME 0.13 0.07 0.01 0.00
Net realized and unrealized
gain(loss) on investments (0.08) 0.00 0.61 0.15
Net increase(decrease) in
accumulation unit value 0.06 0.07 0.62 0.15
Accumulation unit value at
beginning of period 2.50 1.77 3.42 1.00
ACCUMULATION UNIT VALUE
AT END OF PERIOD $ 2.56 $ 1.84 $ 4.04 $ 1.15
Ratios:
Ratio of mortality and expense assurance to
average value of accumulation units 1.57% 1.61% 1.53% 1.05%
Ratio of net investment income to
average value of accumulation units 4.98% 3.40% 0.35% 1.02%
Portfolio turnover rate - - - -
Net assets, end of period ($000's omitted) $ 6,151 $ 475 $26,511 $ 1,155
Number of accumulation units
outstanding at end of period
(000's omitted) 2,405 259 6,555 1,008
Note: 1996 Growth and Income ratios have been annualized.
<FN>
See notes to financial statements.
</TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
SUPPLEMENTARY INFORMATION--SELECTED PER ACCUMULATION UNIT DATA AND RATIOS
Selected data per accumulation unit outstanding throughout the period
<CAPTION>
Year ended December 31,1995 Year ended December 31, 1994
-------------------------------- --------------------------------
Sub-Account Sub-Account
-------------------------------- --------------------------------
Money Capital Money Capital
Bond Market Growth Bond Market Growth
-------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per accumulation unit data:
Investment income $ 0.17 $ 0.10 $ 0.09 $ 0.16 $ 0.07 $ 0.08
Expenses (0.04) (0.03) (0.06) (0.04) (0.03) (0.04)
NET INVESTMENT INCOME 0.13 0.07 0.03 0.12 0.04 0.04
Net realized and unrealized
gain(loss) on investments 0.21 0.00 0.85 (0.22) 0.00 (0.02)
Net increase(decrease) in
accumulation unit value 0.34 0.07 0.88 (0.10) 0.04 0.02
Accumulation unit value at
beginning of period 2.16 1.70 2.54 2.26 1.66 2.52
ACCUMULATION UNIT VALUE
AT END OF PERIOD $ 2.50 $ 1.77 $ 3.42 $ 2.16 $ 1.70 $ 2.54
Ratios:
Ratio of mortality and expense assurance to
average value of accumulation units 1.82% 1.86% 1.87% 1.87% 1.85% 1.83%
Ratio of net investment income to
average value of accumulation units 5.58% 4.11% 1.03% 5.28% 2.47% 1.41%
Portfolio turnover rate 1.25 - 7.41 - - 12.20
Net assets, end of period ($000's omitted) $12,378 $ 1,675 $32,280 $11,447 $ 1,754 $25,087
Number of accumulation units
outstanding at end of period
(000's omitted) 4,955 946 9,443 5,297 1,032 9,882
Note: 1996 Growth and Income ratios have been annualized.
<FN>
See notes to financial statements.
</TABLE>
SEPARATE ACCOUNT I OF WASHINGTON NATIONAL INSURANCE COMPANY
<TABLE>
SUPPLEMENTARY INFORMATION--SELECTED PER ACCUMULATION UNIT DATA AND RATIOS
Selected data per accumulation unit outstanding throughout the period
Year ended December 31, 1993
--------------------------------
Sub-Account
--------------------------------
Money Capital
Bond Market Growth
--------------------------------
<S> <C> <C> <C>
Per accumulation unit data:
Investment income $ 0.16 $ 0.05 $0.07
Expenses (0.04) (0.03) (0.04)
NET INVESTMENT INCOME 0.12 0.02 0.03
Net realized and unrealized
gain(loss) on investments 0.03 0.00 0.21
Net increase(decrease) in
accumulation unit value 0.15 0.02 0.24
Accumulation unit value at
beginning of period 2.11 1.64 2.28
ACCUMULATION UNIT VALUE
AT END OF PERIOD $ 2.26 $ 1.66 $ 2.52
Ratios:
Ratio of mortality and expense assurance to
average value of accumulation units 1.85% 1.85% 1.81%
Ratio of net investment income to
average value of accumulation units 5.50% 1.28% 1.17%
Portfolio turnover rate 33.66 - 3.50
Net assets, end of period ($000's omitted) $13,161 $ 1,626 $25,708
Number of accumulation units
outstanding at end of period
(000's omitted) 5,836 980 10,202
Note: 1996 Growth and Income ratios have been annualized.
<FN>
See notes to financial statements.
</TABLE>
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Account: The Separate Account I of Washington National
Insurance Company (the "Separate Account") is a series type
segregated investment account of Washington National Insurance
Company ("WNIC"). WNIC is a wholly-owned subsidiary of Washington
National Corporation ("WNC").
In November 1996, WNC announced a definitive agreement to merge
with PennCorp Financial Group, Inc. ("PennCorp"). Under the terms
of the merger, the separate corporate existence of WNC shall cease
and PennCorp shall continue as the surviving corporation. The
merger is anticipated to close during 1997, pending the receipt of
the required shareholder and regulatory approval. The merger is
not expected to have any effect on the Separate Account.
On July 1, 1996, the Separate Account converted from an open-end
diversified management investment company to a unit investment
trust and transferred its assets into specified portfolios of the
Scudder Variable Life Investment Fund ("the Fund"), a mutual fund
of the series type, in exchange for shares of the portfolios.
The fair value of the portfolio was equal to the fair value of
assets transferred. This transaction was approved by contract
holders at a special meeting held March 12, 1996.
The Separate Account is registered as an unit investment trust
under the Investment Company Act of 1940. The Separate Account no
longer issues new contracts. There are four Sub-Accounts within
the Separate Account, each with its own investment objectives and
policies as follows:
Bond Sub-Account -- high level of current income while
preserving capital by investing in fixed income
securities.
Money Market Sub-Account (formerly known as the short-term
portfolio sub-account)-- moderate level of current income
consistent with liquidity and preservation of capital by
investing in one or more types of short-term instruments.
Capital Growth Sub-Account (formerly known as the stock
sub-account)-- long-term capital growth and income by
investing principally in equity-type securities.
Growth and Income Sub-Account -- long-term growth of
capital, current income, and growth income by investing
primarily in common stocks, preferred stocks, and
securities convertible into common stocks of companies
which offer the prospect for growth of earnings while
paying current dividends. This investment option became
available July 1, 1996.
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- Continued
NOTE A -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--Continued
In addition, a contract holder may elect to invest in a fixed
annuity held by WNIC, called the Fixed Account.
At December 31, 1995, WNIC was a contract holder in the Separate
Account, and held, at fair value, $5,576,669, $1,084,802, and
$9,654,392 in the Bond, Money Market and Capital Growth Sub-
Accounts, respectively. On June 25, 1996, WNIC surrendered its
contract and withdrew $5,454,177, $1,103,730 and $10,405,167 from
the Bond, Money Market and Capital Growth Sub-Accounts,
respectively. At June 30, 1997, WNIC had no investments in the
Separate Account.
Valuation of Investments: Prior to July 1, 1996, securities
traded on a national securities exchange were valued at the
closing price as of the valuation date. Investments traded in the
over-the-counter market are valued at the average between the bid
and ask prices. Commercial paper is valued at amortized cost and
other short-term investments are valued at cost. Differences, if
any, from fair value are not considered material in relation to
net assets.
The fair value of the separate portfolios of the Fund are
determined daily based on the fair value of the underlying
securities held.
Investment Transactions and Income: Security transactions are
accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis and
dividend income is recorded on the ex-dividend date. Realized
gains and losses on investments are determined on a first-in,
first-out basis.
Accumulation Unit Valuation: Accumulation unit values reflect the
net asset value of each Sub-Account and are computed daily.
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- Continued
NOTE B -- DEDUCTIONS AND CHARGES
Deductions and charges are made from the Separate Account and paid to
WNIC as follows:
As a fee for administration and contract maintenance, WNIC
deducts $30 annually from the accumulated value of each
contract on the contract anniversary or on the date of
surrender if it occurs between contract anniversaries.
This fee does not apply to contracts for individual
retirement accounts, or to contracts which at the end of
any contract anniversary have received at least $1,200 of
payments and in which the accumulated value is at least
$20,000.
A contingent deferred sales charge of 6% is made on any
amounts withdrawn which are in excess of 10% of the
contract's accumulated value on the date of the first
withdrawal during the respective year, except that no such
charge is made for withdrawals of purchase payments
received 72 months prior to the date of withdrawal and no
such charge is made if the withdrawal amount is applied to
a settlement option after the contract has been in force
for five years or if the contract contains life
contingencies.
As compensation for annuity rate guarantees, WNIC deducts
an amount, computed on a daily basis, which is equal on an
annual basis to .8% of the average net asset value of the
Separate Account.
As compensation for providing financial accounting
services to the Separate Account, WNIC deducts an amount,
computed on a daily basis, equal to an annual rate of .35%
of the average net asset value of the Separate Account.
In addition to the above, prior to July 1, 1996, the
following additional deductions and charges were made from
the Separate Account and paid to WNIC:
As a fee for managing and administering the investment
activities of the Separate Account, WNIC deducts an
amount, computed on a daily basis, equal to an annual rate
of .5% of the average net asset value of each Sub-Account.
As reimbursement for incurring various other general and
administrative expenses attributable to the Separate
Account, WNIC deducts an amount, computed on a daily
basis, equal to an annual rate of .2% of the average net
asset value of the Separate Account. A component of these
expenses is the fee paid to the Separate Account's Board
of Directors. Only members of the Board of Directors who
are not directors, officers, or employees of WNIC receive
an annual retainer of $1,000, and a meeting fee of $350.
In 1996, the Separate Account's three external directors
each received $500.
<PAGE>
SEPARATE ACCOUNT I OF
WASHINGTON NATIONAL INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS -- Continued
NOTE C -- INVESTMENTS
Effective July 1, 1996, Scudder, Stevens & Clark, Inc. (The "Adviser")
provides management and investment advisory services to the Fund. The
Adviser provides investment research and portfolio management services
to a number of mutual funds and other clients. Each Portfolio pays
the Adviser a fee for its investment advisory services at the
following rates:
Percentage of the
Portfolio's
Portfolio Average Daily Net
Asset Value
Bond Portfolio .475%
Money Market Portfolio .370%
Capital Growth Portfolio .475%
Growth and Income Portfolio .469%
Proceeds from the sale of investments in 1996, other than United
States Government obligations and short-term notes, were $10,741,428
and $34,557,689 in the Bond and Capital Growth Sub-Accounts,
respectively.
There were no purchases of investments, other than investments in
Fund shares, during 1996 or the first half of 1997.
Net asset value of Fund shares represents the year-end fair value
of the shares. At June 30, 1997, the net unrealized gain on each
fund was: Bond - $88,656, Capital Growth - $6,452,814, and Growth
and Income - $321,736.
NOTE D -- FEDERAL INCOME TAXES
The operations of the Separate Account form a part of, and are
taxed with, the operations of WNIC, which under the Internal
Revenue Code is taxed as a "life insurance company." The Separate
Account is not taxed as a regulated investment company under
Subchapter M of the Code. Under existing federal income tax law,
no taxes are payable on the investment income or on the realized
gains of the Separate Account.
<PAGE>
The registrant hereby incorporates by reference the 1997
Semi-Annual Report of Scudder Variable Life Investment Fund,
file number 811-4257, filed with the Commission on
August 28, 1997.
