SEC File No. 33-
SEC File No. 811-3853
As filed with the Securities and Exchange Commission
on February , 1996
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 15 [X]
MBL VARIABLE CONTRACT ACCOUNT-7
(Previously known as Mutual Benefit Variable Contract Account-7)
(Exact Name of Registrant)
MBL LIFE ASSURANCE CORPORATION
(Name of Insurance Company)
520 Broad Street, Newark, New Jersey 07102-3111
(Address of Insurance Company's Principal Executive Offices)
Insurance Company's Telephone Number,
including Area Code (201)481-8000
Judith C. Keilp, Esq.
Counsel
MBL Life Assurance Corporation
520 Broad Street, Newark, New Jersey 07102-3111
(Name and Address of Agent of Service)
Copies to:
Stephen E. Roth, Esq.
Sutherland, Asbill & Brennan
1275 Pennsylvania Ave., N.W.
Washington, D.C. 20004-0147
_________________________________________________________________
Approximate Date of Proposed Public Offering: As soon as practicable
after the effective date of the Registration Statement under the
Securities Act of 1933.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, an
indefinite amount of securities is being registered by this Registration
Statement. The filing fee of $500 required by Rule 24f-2 is paid
herewith.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-7
previously known as
MUTUAL BENEFIT VARIABLE CONTRACT ACCOUNT-7
_________________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Prospectus of information
required by the Items in Part A of Form N-3.
Item Number Heading in Prospectus
1 Cover Page
2 Index of Terms
3 Summary of Prospectus
4 Performance Related Information,
Financial Statements*
5 The Variable Contract Account
6 Management; Investment Management
7 Charges
8 Group Tax Deferred Annuity
Contracts; General Rights;
Other Contract Provisions
9 Annuity
10 Payment at Death
11 Accumulation Account
12 Redemption
13 Federal Income Tax Status
14 Legal Developments
15 Table of Contents - Statement of
Additional Information
_________________________________________________________________
* Condensed Financial Information is incorporated by reference to
the Financial Highlights contained in the Account's 1995 Annual
Report to Contract Holders and Participants.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT - 7
MBL Life Assurance Corporation
520 Broad Street, Newark, New Jersey 07102-3111
, 1996
The group tax-deferred variable annuity contracts (the "Contracts")
described in this Prospectus were issued by The Mutual Benefit Life
Insurance Company ("Mutual Benefit Life") and assumptively reinsured by
MBL Life Assurance Corporation ("MBL Life") for use with retirement plans
and arrangements meeting applicable requirements of Section 401, 403(b),
408 or 457 of the Internal Revenue Code of 1986, as amended ("Qualified
Plans"). Contracts were issued to employers establishing Qualified Plans
or to trustees or custodians serving in conjunction with those Qualified
Plans ("Contract Holders").
Sales of new Contracts ceased July 16, 1991. MBL Life does not
currently intend to resume sales of new Contracts. As of the effective
date of this Prospectus, however, additional purchase payments are being
accepted from existing and new Participants under the Contract.
The Contracts offer flexible purchase payment arrangements. Net
purchase payments made on behalf of a participant of a Qualified Plan
("Participant") are allocated to an account established on behalf of the
Participant ("Variable Accumulation Account") and placed in MBL Variable
Contract Account-7, previously known as Mutual Benefit Variable Contract
Account-7 (the "Account"). At retirement, the value of a Participant's
Variable Accumulation Account may be applied to provide a fixed or
variable annuity. The investment objective of the Account is to provide
as high a level of current income as is consistent with preservation of
capital and liquidity through investments in a diversified portfolio of
high quality short-term money market instruments. There are no sales or
redemption charges under the Contracts.
Existing Contracts, issued by Mutual Benefit Life, were assumed and
reinsured as of May 1, 1994 by MBL Life in accordance with the Plan of
Rehabilitation of Mutual Benefit Life as approved by the Superior Court of
New Jersey. Substantially all of the assets and certain liabilities,
including all insurance liabilities, of Mutual Benefit Life were
transferred to MBL Life as of May 1, 1994 (the "Transfer"). In addition,
the assets and liabilities of the Account were transferred to a new
separate account of MBL Life. MBL Life agreed to assume all the assets
and liabilities of the Account. (See "The Variable Contract Account -
Legal Developments".)
This Prospectus sets forth concisely the information about the
Account that Contract Holders and Participants should know before
investing. Additional information about the Account has been filed with
the Securities and Exchange Commission, including a Statement of
Additional Information, which is incorporated herein by reference. The
Statement of Additional Information is available upon request and without
charge from MBL Life by writing to: Group Pension Operations, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-3111,
Attn: MBL VARIABLE CONTRACT ACCOUNT-7, or telephone: 1-800-435-3191.
Contract Holder or Participant inquiries may be made to the same address
or telephone number. The table of contents for the Statement of
Additional Information appears on page 30.
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. AN INVESTMENT IN
THIS ACCOUNT IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
AN INVESTMENT IN THE ACCOUNT IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
The date of the Statement of Additional Information is , 1996.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY OF PROSPECTUS
Fee Table . . . . . . . . . . . 4
The Contracts . . . . . . . . . 5
The Account . . . . . . . . . . 5
Investment Adviser and
Principal Underwriter . . . . 5
Expense Charges . . . . . . . . 6
Waiver of Charges . . . . . . . 6
Minimum Investment . . . . . . 6
Investment Objective of
the Account . . . . . . . . . 6
Redemption . . . . . . . . . . 6
Certain Investment
Risks . . . . . . . . . . . . 6
FINANCIAL STATEMENTS . . . . . 7
PERFORMANCE RELATED
INFORMATION . . . . . . . . . 7
GROUP TAX-DEFERRED VARIABLE
ANNUITY CONTRACTS
Eligible Contract
Holders . . . . . . . . . . . 8
Basic Provisions . . . . . . . 8
Assumption of Expense
Risk. . . . . . . . . . . . . 9
Redemption and Payment
at Death . . . . . . . . . . 9
Companion Contract and
VCA-2 Contract . . . . . . . 9
THE VARIABLE CONTRACT
ACCOUNT
Organization . . . . . . . . . 10
Legal Developments. . . . . . . 10
Assets . . . . . . . . . . . . 11
Investment Objective and
Policies . . . . . . . . . . 12
Portfolio Turnover-Value. . . . 14
Certain Investment Risks. . . . 14
Investment Restrictions . . . . 15
CHARGES
Expense and Expense Risk
Charges . . . . . . . . . . . 15
Investment Advisory Fee . . . . 16
Other Charges . . . . . . . . . 16
Premium Taxes . . . . . . . . . 16
ACCUMULATION ACCOUNT
Purchase Payments . . . . . . 16
Variable Accumulation
Account . . . . . . . . . . 17
Transfers Between
Contracts . . . . . . . . . 18
Redemption . . . . . . . . . 18
Payment at Death . . . . . . 19
ANNUITY
Annuity Commencement Date . . 20
Purchase of Annuity . . . . . 20
GENERAL RIGHTS
Voting Rights . . . . . . . . 21
Confirmation of
Transaction . . . . . . . . 21
Reports . . . . . . . . . . . 22
457 Plan Participant . . . . 22
MANAGEMENT . . . . . . . . . 22
INVESTMENT MANAGEMENT . . . . 22
FEDERAL INCOME TAX STATUS
Introduction . . . . . . . . 23
Taxation of MBL Life . . . . 23
Tax Status of the
Contract . . . . . . . . . 24
Retirement Plans . . . . . . 25
Taxation of Distributions . . 26
Withholding . . . . . . . . . 27
Possible Changes in
Taxation . . . . . . . . . 27
Other Tax Consequences . . . 27
OTHER CONTRACT PROVISIONS
Beneficiary . . . . . . . . . 28
Non-Assignability . . . . . . 28
Portability . . . . . . . . . 28
Failure of Plan to Qualify. . 28
Discontinuance . . . . . . . 28
Transfer to New Funding
Agency . . . . . . . . . . 29
Changes in Contract . . . . . 29
Other Changes . . . . . . . . 30
TABLE OF CONTENTS -
STATEMENT OF ADDITIONAL
INFORMATION . . . . . . . . 30
INDEX OF TERMS
The following terms are
explained on the page
indicated.
Account . . . . . . . . . . . . 1
Accumulation Period . . . . . . 5
Annuity . . . . . . . . . . . 19
Annuity Commencement Date . . . 19
Code . . . . . . . . . . . . . 1
Companion Contract . . . . . . 2
Contract(s) . . . . . . . . . . 1
Contract Holder(s) . . . . . . 1
Contract Year . . . . . . . . . 18
First Priority . . . . . . . . 5
401 Plan . . . . . . . . . . . 8
403(b) Plan . . . . . . . . . . 8
457 Plan. . . . . . . . . . . . 8
IRA Plan . . . . . . . . . . . 8
MBL Life . . . . . . . . . . . 1
Mutual Benefit Life . . . . . . 1
Net Purchase Payment . . . . . 8
1940 Act. . . . . . . . . . . . 5
Participant . . . . . . . . . . 1
Qualified Plans . . . . . . . . 1
Rehabilitation . . . . . . . . 10
SEC . . . . . . . . . . . . . . 10
Transfer . . . . . . . . . . . 1
Variable Accumulation
Account . . . . . . . . . . . 1
Variable Accumulation
Unit . . . . . . . . . . . . 8
Variable Contract
Account - 2 . . . . . . . . . 5
Variable Contract
Account - 7 . . . . . . . . . 1
VCA-2 Contract . . . . . . . . 5
SUMMARY OF PROSPECTUS
Fee Table
The purpose of the Fee Table is to help Contract Holders and
Participants understand the various Account expenses that would be paid
prior to commencement of annuity payments, at which time the investment in
the Account will end. The Fee Table, including the Example below, shows
the expenses that are deducted from the assets of the Account. For a
description of these expenses, see "Charges". The Fee Table does not
include premium taxes currently charged by various states, which may range
up to 3.5%, which will be deducted and paid to the states as required.
Annual Expenses
(as a percentage of average net assets)
Investment Advisory Fee (after expense waiver)* ..... 0.00%
Expense and Expense Risk Charges
(after expense waiver)* ...................... 0.00%
Total Annual Expenses ........................ 0.00%
Example
A $1,000 investment in the Account would be subject to the expenses
indicated, assuming (1) a 5% annual return and (2) redemption at the end
of each time period shown: **
1 year 3 years 5 years 10 years
$0 $0 $0 $0
This example should not be considered a representation of past or
future expenses for the Account. Actual expenses may be greater or
less than those shown above. Similarly, the annual rate of return
assumed in the Example is not an estimate or guarantee of future
investment performance.
__________________________
* Prior to the Transfer, Mutual Benefit Life ceased assessment of the
expense and expense risk charge and assumed payment of the investment
advisory fee. (See "Charges".) MBL Life has voluntarily agreed to
continue with the cessation of the expense and expense risk charge
and assume payment of the investment advisory fee for the one-year
period beginning May 1, 1996, but reserves the right to reinstate
assessment of the expense and expense risk charge and cease
assumption of the investment advisory fee at the expiration of this
one-year period. (See "Waiver of Charges".) If these charges had
not been waived, the total expenses in 1995 would have been .77%.
** There are no additional charges imposed upon redemption.
The Contracts
The Contracts described in this Prospectus provide for retirement and
other benefits for persons covered under plans qualified for federal
income tax advantages under Section 401, 403(b), 408 or 457 of the
Internal Revenue Code of 1986, as amended (the "Code"). The Contracts are
funded through the Account, the value of which will vary up or down
depending upon its investment experience. At the time a Contract was
issued, a group fixed annuity companion contract ("Companion Contract"),
which is not described in this Prospectus, was also issued to the Contract
Holder. In addition, at the option of the Contract Holder, another group
variable annuity contract may also have been issued that was funded
through MBL Variable Contract Account-2 ("VCA-2 Contract").
The Contracts, Companion Contracts and VCA-2 Contracts, including any
riders thereto, were issued by Mutual Benefit Life and assumptively
reinsured by MBL Life. The Contracts offer variable investment
accumulations. Fixed annuities are available through the Companion
Contract only at retirement. The optional addition of a VCA-2 Contract
offered variable accumulations, as well as annuities with underlying
investments in common stocks and other equity-type securities.
New Participants, who enroll after the effective date of this
Prospectus, participating in plans qualified under Section 408 of the Code
and, for residents of New York, plans qualified under Section 403(b), are
entitled to a return of their initial premium payments without cost within
ten days of purchase under a ten-day revocation provision.
The Account
The Account operates as a separate account of MBL Life. It was
established by Mutual Benefit Life under New Jersey law in 1983. The
assets and liabilities of the Account were transferred to a new separate
account of MBL Life as of May 1, 1994, and is registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end,
diversified management investment company. The Account is available only
during the period when funds are accumulated before they are used to
provide annuity benefits ("Accumulation Period"). At retirement, fixed or
variable annuity benefits are provided under the Companion Contract or a
VCA-2 Contract, as elected under a Qualified Plan.
Investment Adviser and Principal Underwriter
First Priority Investment Corporation ("First Priority") serves as
the Account's investment adviser and principal underwriter. First
Priority is a wholly-owned indirect subsidiary of MBL Life. For managing
the Account's investments, First Priority receives a periodic fee based on
a percentage of net assets. For a description of this fee, see
"Investment Advisory Fee". First Priority is a registered investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act").
(See "Investment Management".) First Priority also engages in the sale of
other investment company securities and financial products.
Expense Charges
The Contract provides for an expense and expense risk charge. The
Contract also provides for an investment advisory fee. There are no sales
or redemption charges under the Contracts, but sales, administrative or
other charges may be imposed under the Companion Contract. Premium taxes
may also be imposed in various jurisdictions. (See "Charges - Premium
Taxes".)
Waiver of Charges
Prior to the Transfer, Mutual Benefit Life ceased assessment of the
expense and expense risk charge and assumed payment of the investment
advisory fee. MBL Life has voluntarily agreed to continue the cessation
of the expense and expense risk charge and assume payment of the
investment advisory fee for the one-year period beginning May 1, 1996, but
reserves the right to reinstate assessment of the expense and expense risk
charge and cease assumption of payment of the advisory fee at the
expiration of this one-year period.
Minimum Investment
The minimum annual contribution for each Participant under a Contract
is $240. (See "Accumulation Account - Purchase Payments".)
Investment Objective of the Account
The Account's objective is to provide as high a level of current
income as is consistent with the preservation of capital and maintenance
of liquidity. It seeks to achieve this goal through investments in high
quality short-term money market instruments.
Redemption
At any time during the Accumulation Period, the current value of a
Participant's Variable Accumulation Account under a Contract may be
withdrawn, in whole or in part. For a description of redemption
procedures, see "Redemptions". There is no charge or fee assessed by MBL
Life for such withdrawals. A penalty and/or tax may be incurred under the
Code upon withdrawal of amounts accumulated under the Contracts offered by
this Prospectus, including a 10% penalty generally imposed on the taxable
amount of withdrawals prior to age 59 1/2 (subject to certain exceptions).
(See "Federal Income Tax Status".)
Certain Investment Risks
The value of the Account's assets is not insured or guaranteed by the
U.S. Government, nor is its yield fixed. The yields realized by the
Account will generally rise or fall with short-term interest rates. (See
"The Variable Contract Account -- Portfolio Turnover - Value".)
FINANCIAL STATEMENTS
The Account incorporates by reference into this Prospectus the
Financial Highlights contained in its 1995 Annual Report to Contract
Holders and Participants, which should accompany this Prospectus. The
Account will furnish without charge an additional copy of these Reports
upon request made to Group Pension Operations, MBL Life Assurance
Corporation, 520 Broad Street, Newark, New Jersey 07102-3111, Attn: MBL
VARIABLE CONTRACT ACCOUNT-7, or by telephoning 1-800-435-3191. These
Reports also contain the Account's financial statements.
The financial statements for the Account (as well as the auditor's
report thereon) are described in the Statement of Additional Information.
The financial statements of MBL Life may be found in the Statement of
Additional Information.
PERFORMANCE RELATED INFORMATION
The Account may from time to time advertise its "yield" and
"effective yield". Both yield figures are based upon the Account's past
performance only and are not intended to be an indication of future
performance. Set forth below is the manner in which the data contained in
such advertisements will be calculated.
The "yield" of the Account refers to the income generated by an
investment in the Account over a seven-day period (which period will be
stated in any advertisement). This income is then "annualized". That is,
the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the
Account is assumed to be reinvested. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment. For an explanation of the calculation of "yield"
and "effective yield", see the Account's Statement of Additional
Information.
When the Account advertises its "yield" and "effective yield", both
quotations include all recurring Contract charges currently applicable.
Prior to the Transfer, Mutual Benefit Life ceased assessment of the
expense and expense risk charge and assumed payment of the investment
advisory fee. MBL Life has agreed to continue with the cessation of the
expense risk charge and assumption of the investment advisory fee, but
reserves the right to reinstate assessment of the expense and expense risk
charge and cease payment of the investment advisory fee. (See "Summary of
Prospectus -- Waiver of Charges".) Such charges and fees, if included,
would reduce the "yield" and "effective yield".
For the seven-day period ended December 29, 1995 the Account's
"yield" was 6.45% and its "effective yield" was 6.66%.
GROUP TAX-DEFERRED
ANNUITY CONTRACTS
Eligible Contract Holders
The Contracts described by this Prospectus are designed to fund
retirement and other benefits, through employers, trustees or custodians,
to the following categories of employees ("Participants"), and their
beneficiaries:
1. Employees covered under annuity purchase arrangements adopted
pursuant to Section 403(b) of the Code by public school systems
and non-profit organizations described in Section 501(c)(3) of
the Code ("403(b) Plans"), including former employees who had
been covered under other such annuity purchase arrangements and
who have not withdrawn their account balances or commenced
receiving their annuity benefits.
2. Employees covered under plans maintained by partnerships and
sole proprietorships which are qualified under Section 401 of
the Code ("401 Plans"). These plans were commonly referred to
as HR-10 Plans prior to the Tax Equity and Fiscal Responsibility
Act of 1982.
3. Employees covered under deferred compensation plans qualified
under Section 457 of the Code ("457 Plans").
4. Individuals covered under Individual Retirement Account Plans
qualified under Section 408 of the Code ("IRA Plans" or "408
Plans").
The Code affords certain federal income tax advantages to employers,
employees and beneficiaries covered under one or more of the above plans
or arrangements. (See "Federal Income Tax Status".)
Basic Provisions
Net Purchase Payments made for or by Participants are invested during
the Accumulation Period before retirement. "Net Purchase Payment" means
the amount of a purchase payment for a Participant, less any premium tax.
(See "Premium Taxes".)
At retirement, the current value of a Participant's Variable
Accumulation Account may be used to purchase fixed annuities under a
Companion Contract, or variable annuities under a VCA-2 Contract, if
currently available.
Variable Accumulation Account. Under the Contracts, Net Purchase
Payments are allocated to a Participant's Variable Accumulation Account.
Amounts allocated to a Variable Accumulation Account purchase Variable
Accumulation Units. The value of a Participant's Variable Accumulation
Account varies up or down from day to day depending on the investment
experience of the Account. No assurance of investment results can be
given. The investment experience of a Participant's Variable Accumulation
Account reflects the investment income and realized and unrealized capital
gains and losses, if any, of the Account.
Retirement Annuity. Whenever funds accumulated under the Contracts
are to be applied to purchase a fixed rate annuity, the funds will be
transferred to the Companion Contract and the annuity will be funded
through MBL Life's General Account. (See "The Variable Contract Account -
Legal Developments".) If a VCA-2 Contract has been issued to the Contract
Holder and the Participant has elected to receive all or part of the
annuity as a variable annuity, the appropriate funds will be transferred
to the VCA-2 Contract and the annuity will be funded through MBL Variable
Contract Account-2. (See "Annuity".)
Assumption of Expense Risk
MBL Life assumes the expense risks under the Contracts to the extent
that the charges for expense made under the Contracts do not cover the
actual expenses incurred. (See "Waiver of Charges".)
Redemption and Payment at Death
The current value of a Participant's Variable Accumulation Account
may be withdrawn, in whole or in part, at any time before his or her
Annuity Commencement Date under the Contract. The Annuity Commencement
Date is the first day of any month on which the Participant elects to
begin receiving payments under an annuity. Withdrawals prior to
retirement, however, may involve adverse tax consequences, or may be
restricted. (See "Redemption" and "Federal Income Tax Status".)
If a Participant dies before retirement, MBL Life will cancel the
Participant's Variable Accumulation Account and transfer the value of such
account, as of the date MBL Life receives satisfactory written notice of
death, to the Companion Contract, where the proceeds will be held at the
rate of interest specified in the Companion Contract until final
disposition. (See "The Variable Contract Account - Legal Developments".)
However, in lieu of such transfer, upon election by the Participant's
beneficiary, the beneficiary may receive the current value of the
Participant's Variable Accumulation Account as of the date MBL Life
receives satisfactory written notice of death. Payments will be made
within seven days thereafter, subject to receipt by MBL Life of all
necessary information concerning the beneficiary. (See "Payment at
Death".)
Companion Contract and VCA-2 Contract
At the time a Contract was issued, the Contract Holder was also
issued a Companion Contract. A Companion Contract is a group fixed
annuity contract that provides for, among other things, the purchase of
fixed annuities. (See "The Variable Contract Account -Legal
Developments".)
VCA-2 Contracts were issued to Contract Holders who wished to be
provided with variable annuities under the Plans. Purchase payments under
a VCA-2 Contract are invested through MBL Variable Contract Account-2, an
MBL Life separate account, in shares of MBL Growth Fund, Inc. ("MBL
Growth"), a mutual fund with the primary investment objective of long-term
appreciation of capital.
The terms "Companion Contract" and "VCA-2 Contract", as used in this
Prospectus, refer to both a previously issued Companion Contract or VCA-2
Contract, respectively, and to any contracts amended by rider as the
context indicates.
The Contracts, Companion Contracts, and VCA-2 Contracts, including
any riders issued thereto, are part of MBL Life's overall tax-qualified
annuity program which may be utilized by the Plans. This Prospectus does
not furnish detailed information as to the Companion Contract, VCA-2
Contract or any riders thereto, MBL Variable Contract Account-2 or MBL
Growth. The charges and benefits under the Companion Contract and the
VCA-2 Contract are specified in those contracts. Prospectuses for MBL
Variable Contract Account-2, including the VCA-2 Contract, and MBL Growth
are available upon request made to Group Pension Operations, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-3111,
Attn: MBL VARIABLE CONTRACT ACCOUNT-2.
THE VARIABLE CONTRACT ACCOUNT
Organization
The Account is registered with the Securities and Exchange Commission
("SEC") as an open-end, diversified management investment company under
the 1940 Act. Registration under the 1940 Act involves regulation by the
SEC, but does not involve supervision or management of investment
practices or policies of either the Account or MBL Life, the sponsoring
insurance company. The Account was established by Mutual Benefit Life in
1983 under New Jersey law pursuant to a resolution of the Board of
Directors of Mutual Benefit Life. The assets and liabilities of the
Account were transferred to a separate account of MBL Life as of May 1,
1994 pursuant to a resolution of the Board of Directors of MBL Life.
MBL Life is a New Jersey stock life insurance company incorporated in
1972, with its principal office at 520 Broad Street, Newark, New Jersey.
Its stock is held by a Stock Trust, pursuant to the Rehabilitation Plan of
Mutual Benefit Life, MBL Life's former parent.
Legal Developments
The Account was originally a separate account of Mutual Benefit Life.
On July 16, 1991, the Superior Court of New Jersey ("Court") entered an
Order ("Order") appointing the Commissioner of Insurance of the State of
New Jersey as Rehabilitator of Mutual Benefit Life, thereby granting the
Rehabilitator immediate exclusive possession and control of, and title to,
the business and assets of Mutual Benefit Life, including those of the
Account.
In view of the terms and conditions of the Order, on July 16, 1991,
Mutual Benefit Life, on behalf of the Account, immediately ceased
acceptance of applications for new Contracts and additional purchase
payments under existing Contracts. The cessation of additional purchase
payments continued from July 16, 1991 until the effective date of this
Prospectus. Because the Account was a separate account of Mutual Benefit
Life, the assets and liabilities of the Account were maintained separate
and apart from Mutual Benefit Life's general account assets and
liabilities. Transfers to VCA-2 Contracts were temporarily suspended.
Transfers from the Account to the Companion Contract were temporarily
prohibited and withdrawals from the Companion Contract were restricted
during the Rehabilitation Period, which is to terminate no later than
December 31, 1999. Death Benefit payments upon the death of each
Participant continue to be made to the beneficiaries.
A Rehabilitation Plan was developed by the Rehabilitator, the terms
of which were subsequently approved and confirmed by the Court in January
1994. Certain terms and conditions of the Rehabilitation Plan have been
appealed by parties to the Rehabilitation Plan, and litigation brought
against Mutual Benefit Life, the ultimate resolutions of which cannot be
determined at this time.
The Rehabilitation Plan stipulated that the assets and liabilities of
the Account would be transferred from Mutual Benefit Life to a separate
account of MBL Life. The Transfer was effected pursuant to an assumption
reinsurance transaction on May 1, 1994. Under the Rehabilitation Plan,
MBL Life assumed substantially all of the business, assets and liabilities
of Mutual Benefit Life. MBL Life will operate under and is governed by
the terms and conditions of the Rehabilitation Plan until the termination
of the Rehabilitation Period, not later than December 31, 1999. While the
Rehabilitation Plan was developed based on the Rehabilitator's best
estimates, no assurances can be provided that the Rehabilitation Plan will
ultimately be successful. For more information see the financial
statements of MBL Life contained in the Statement of Additional
Information.
As of May 1, 1994, all of the issued and outstanding shares of MBL
Life were placed in a Stock Trust which is to terminate at the end of the
Rehabilitation Period. The Commissioner of Insurance was appointed
Trustee of the Stock Trust. On July 5, 1995, Alan J. Bowers was appointed
President and Chief Executive Officer of MBL Life.
MBL Life reserves all rights regarding the use of its name, or any
part of its name, including the right to withdraw its use by the Account
or to grant its use to any other investment company or entity.
Assets
While the Account, as of May 1, 1994, is an asset of MBL Life, it is
held separately from all other assets of MBL Life and may not be charged
with liabilities arising out of any other business of MBL Life. The
Contracts provide that any income, gains or losses from the Account's
investment operations shall be credited to or charged against the Account
without regard to any other income, gains or losses of MBL Life. The
obligations arising under the Contracts are not obligations of MBL Life
during the Accumulation Period.
As of January 2, 1996, Participants under the Long Island Jewish
Medical Center 403(b) Plan, New Hyde Park, New York, the largest Contract
Holder of the Account, owned 42.79% of the outstanding Variable
Accumulation Units of the Account; Participants under the New York
Hospital 403(b) Plan, New York, New York owned 10.38% of the outstanding
Variable Accumulation Units of the Account.
Investment Objective and Policies
The Account offers Participants the opportunity to provide for
retirement and other benefits available under the Contracts through pooled
investments in short-term debt instruments normally available in
denominations of $100,000 or more. These securities, or "money market"
instruments, will be the Account's only investments. The Account's
objective, which may not be changed without the approval of a majority of
Contract Holders, is to provide as high a level of current income as is
consistent with preservation of capital and maintenance of liquidity. The
Account will seek to achieve its objective through investments in the
securities and repurchase agreements relating thereto, described below,
all of which will be U.S. dollar denominated obligations. All investments
will have remaining maturities of 397 days or less with a dollar-weighted
average maturity not exceeding 90 days. The Account will limit its
investments to securities that are determined to have "minimal credit
risks" and that are "Eligible Securities". Eligible Securities have a
remaining maturity at the time of purchase of not more than 397 days.
They are rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations ("NRSRO's") (or by
the only NRSRO that has rated the security), or, if unrated, are of
comparable investment quality. The Account will not invest more than five
percent of its assets in Eligible Securities which are not rated in the
highest short-term rating category by at least two NRSRO's (or by the only
NRSRO that has rated the instrument), or comparable unrated securities
("Second Level Securities").
U.S. Government Securities. The Account may purchase obligations
issued or guaranteed as to principal and interest by the United States
Government, or its agencies or instrumentalities. Direct obligations of
the United States Government include Treasury Bills, Treasury Notes and
Treasury Bonds, and are backed by the full faith and credit of the United
States Government.
The Account may purchase securities of agencies and instrumentalities
of the United States Government, such as the Federal Housing
Administration, Government National Mortgage Association, General Services
Administration, Tennessee Valley Authority, Federal Home Loan Banks,
Federal Land Banks and the United States Postal Service. Some of the
securities are backed by the full faith and credit of the United States
Government or guaranteed by the United States Treasury. Obligations of
some of the agencies and instrumentalities are only supported by the
issuing agency's or instrumentality's credit or right to borrow from the
United States Treasury. The latter may be no guarantee against default.
Bank Obligations. The Account may purchase certificates of deposit,
banker's acceptances and other obligations of U.S. banks which have total
assets of $1 billion or more and capital surplus and undivided profits of
at least $100 million as of the date of their most recently published
financial statements, including foreign branches of U.S. banks.
Normally these banks will be members of the Federal Reserve System
and the Federal Deposit Insurance Corporation, but this is not an
investment requirement.
Savings and Loan Obligations. The Account may invest in negotiable
certificates of deposit and other short-term obligations of savings and
loan associations which have total assets in excess of $1 billion and are
insured by the Federal Deposit Insurance Corporation.
Commercial Paper. The Account may invest in commercial paper
obligations which may include variable amount master demand notes. These
notes permit the investment of fluctuating amounts by the Account at
varying rates of interest pursuant to direct arrangements between the
Account, as lender, and the borrower. Daily changes in the amounts
borrowed are permitted and the Account has the right to increase the
amount under the note at any time up to the full amount provided by the
note agreement, or to decrease the amount. The borrower, typically a
large industrial or finance company which also issues commercial paper,
may repay up to the full amount of the note at any time without penalty.
Because variable amount master demand notes are direct lending
arrangements between the lender and borrower, it is not generally
contemplated that such instruments will be traded, and there is no
secondary market for these notes, although they are redeemable (and thus
immediately repayable by the borrower) at face value, plus accrued
interest, at any time. Accordingly, the receipt of payment by the Account
is dependent on the ability of the borrower to pay principal and interest
on demand. It is not expected that the notes will be backed by bank
letters of credit.
The Account's investment adviser will value any master demand notes
held by the Account, taking into consideration such factors as earning
power, cash flow and other liquidity ratios of the issuer.
Other Corporate Debt Securities. The Account may purchase other
non-convertible corporate obligations, including bonds and debentures,
which at the time of purchase have less than 397 days remaining to
maturity.
Repurchase Agreements. These involve the purchase of government
securities with the concurrent agreement by the seller, a bank or
securities dealer, to repurchase the securities at an agreed upon price
and date.
The repurchase price exceeds the cost of the securities subject to
the agreement, thereby providing a determinable yield for the holding
period. Repurchase agreements are short-term investments, usually one
week or less. They are fully collateralized by the purchased securities
and are considered loans under the 1940 Act. During the term of a
repurchase agreement, the seller will be required to provide such
additional collateral as is necessary to maintain the value of all the
collateral under a repurchase agreement at a level at least equal to the
repurchase price. The Account will make payment for such securities only
upon delivery or evidence of book entry transfer to the Custodian. If the
seller defaults, the Account might incur a loss if the value of the
collateral securing the repurchase agreement declines. It might also
incur disposition costs in connection with the liquidation of the
collateral. In addition, if bankruptcy proceedings are commenced with
respect to the seller of the security, realization upon the collateral by
the Account may be delayed or limited. In no event will the Account enter
into a repurchase agreement having a repurchase date more than 397 days
after the date of acquisition. Repurchase agreements afford an
opportunity for the Account to earn a higher return on temporarily
available cash than would otherwise be the case.
Reverse Repurchase Agreements. The Account may invest in reverse
repurchase agreements, which involve the sale of any of the securities
held by the Account (except master demand notes), with an agreement to
repurchase at an agreed upon price, date, and interest payment.
Reverse repurchase agreements are considered borrowing under the 1940
Act and may represent a form of leveraging. The Account will use the
proceeds of reverse repurchase agreements to make other investments which
either mature or are under an agreement to resell at a date simultaneous
with or prior to the expiration of the reverse repurchase agreement.
The Account may utilize reverse repurchase agreements only if the
interest income to be earned from the investment of proceeds of the
transaction is greater than the interest expense of the reverse repurchase
transaction. Reverse repurchase agreements will only be entered into with
a bank or securities dealer, and only under circumstances where the
repurchase is not more than 397 days after the date the repurchase
agreement is entered into.
Portfolio Turnover-Value
Although it is not the Account's objective to make investments for
capital growth, it may engage in some short-term trading to take advantage
of market fluctuations and may sell any portfolio investment before it
matures to protect principal, improve liquidity or enhance yield.
The value of the Account's portfolio will vary inversely to changes
in prevailing interest rates. If interest rates increase after the
purchase of a security, its value normally will decline. Conversely, a
drop in interest rates normally will result in an increase in the
security's value. These changes, however, will not generally result in
gains or losses for the Account since it intends to hold its investments
to maturity when the entire principal and accrued interest is due.
Certain Investment Risks
The value of the Account's assets is not insured or guaranteed by the
U.S. Government, nor is its yield fixed. Interest rates on money market
securities fluctuate in response to various economic factors and,
similarly, the yields realized by the Account will generally rise or fall
with short-term rates. Although the Account's investments are regarded as
high quality instruments, many are not guaranteed by any government and
some present special risks such as in the case of obligations of foreign
branches of U.S. banks. The obligations of foreign branches of U.S. banks
involve risk considerations different from those associated with U.S.
domestic banks. These include foreign economic and political
developments, foreign governmental restrictions which may adversely affect
payment of principal and interest on the obligations, expropriation,
limitations on removal of funds, foreign withholding and other taxes on
interest income, and difficulties in obtaining and enforcing a judgment
against a foreign branch.
Investment Restrictions
The Account is subject to certain investment restrictions which are
considered fundamental policies and, unlike the other investment policies
described herein, cannot be changed without approval of the holders of a
majority (as defined in the 1940 Act) of the outstanding units in the
Account. Among other restrictions, the Account will not enter into
repurchase agreements if, as a result thereof, more than 10% of the
Account's total assets would be subject to repurchase agreements maturing
in more than seven days. The Account also will not enter into reverse
repurchase agreements if the Account's obligations would be greater than
20% of the Account's total assets. The Account may mortgage, pledge or
hypothecate its assets only in limited circumstances and never in excess
of 5% of its total assets taken at cost. The Account will also not hold
more than 10% of any class of securities of any one issuer nor invest more
than 25% of the value of the Account's total assets in securities of any
one industry except that these limitations will not apply with respect to
investments in obligations issued or guaranteed by the United States
Government, but do apply to investments in securities of agencies and
instrumentalities of the United States Government which are only supported
by their own credit or right to borrow from the United States Treasury.
The Account's investment restrictions are described in full in the
Statement of Additional Information, under "Investment Restrictions".
CHARGES
Expense and Expense Risk Charges
Prior to the Transfer, Mutual Benefit Life ceased assessment of the
expense and expense risk charge. MBL Life has voluntarily agreed to
continue with the cessation of the expense and expense risk charge, but
reserves the right to reinstate assessment of the expense and expense risk
charge. Absent the waiver of the expense and expense risk charge, a
charge, payable to MBL Life, at the annual rate of 0.35% would be made
daily against the Account's assets for expenses and 0.02% for the expense
risk assumed by MBL Life. Expenses include the costs attributable to the
establishment, maintenance and operation of the Account, other than
investment advisory fees and any brokerage commissions or fees relating to
securities transactions, which are paid by the Account. Expense risk
means the contingency that expenses will be greater than the 0.35% expense
charge. This charge may not be changed, except as described in "Other
Contract Provisions - Changes in Contract". Because these charges are
imposed as a percentage of assets, administrative charges under larger
contracts may be greater than actual expenses under those contracts and
larger contracts may subsidize smaller contracts.
The charge for expenses is not designed to produce a profit but only
to cover the Account costs. If the charges for expenses and expense risks
are less than the actual expense risk assumed by MBL Life, MBL Life will
suffer a loss. However, if the charge is more than sufficient, there will
be a contribution to MBL Life's surplus. To the extent that there is such
a contribution, it may be used for any proper corporate purpose,
including, among other things, payment of certain sales and promotional
expenses incurred in connection with the distribution of Contracts.
Investment Advisory Fee
Prior to the Transfer, Mutual Benefit Life assumed payment of the
investment advisory fee. MBL Life will continue to assume payment of the
fee for additional one-year periods, but reserves the right to cease
assumption of payment of the investment advisory fee at the expiration of
any one-year period. Absent the waiver of the advisory fee, for the
investment advisory services of First Priority, described in "Investment
Management", the Account would pay a periodic fee at the annual rate of
.40% of the first $300,000,000 of the Account's average daily net assets,
.35% of the next $400,000,000 of the Account's average daily net assets
and .30% of the Account's average daily net assets in excess of
$700,000,000. For a discussion of how the fee is calculated, see the
Account's Statement of Additional Information, under "Investment Advisory
and Other Services".
Other Charges
Currently, no charges are made against the Account for MBL Life's
federal income taxes, or provisions for such taxes, that may be
attributable to the Account. MBL Life may charge the Account for its
portion of any income tax charged to MBL Life on the Account or its
assets. Under present laws, MBL Life may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are
not significant. If they increase, however, MBL Life may decide to make
charges for such taxes, or provisions for such taxes, against the Account.
Any charges made against the Account could have an adverse effect on the
investment experience of the Account.
Premium Taxes
Premium taxes ranging up to 3.5% are currently levied by various
states. If premium taxes are incurred by an Account, a charge for the
amount of those taxes will be made when the taxes are incurred.
ACCUMULATION ACCOUNT
Purchase Payments
The Contracts offer flexible purchase payment arrangements which may
be tailored for individual plans as follows:
Frequency. Purchase payments may be made for active Participants
whenever desired, except not more frequently than every two weeks.
Amount. Under 401, 403(b), 408 or 457 Plans, the annuity purchase
agreement or salary reduction agreement between each Participant and his
or her employer, respectively, must specify that contributions on the
Participant's behalf to all Contracts will be at least $240 during each
year under the Plan.
Continuity. Purchase payments for a Participant may be discontinued
at any time, without any effect on the Participant's rights under the
Contract. Purchase payments may be resumed at a later date at no
additional charge, and will again be subject to the minimum of $240 per
year per participant.
Variable Accumulation Account
Net Purchase Payments are allocated to a Participant's Variable
Accumulation Account under the Contract and are applied to purchase
Variable Accumulation Units. Each Variable Accumulation Unit represents a
proportionate interest in the assets of the Account.
The number of Variable Accumulation Units purchased is equal to each
Net Purchase Payment, divided by the current dollar value of a Variable
Accumulation Unit. The Variable Accumulation Unit is calculated as of the
end of each Valuation Date, which is a day when the New York Stock
Exchange is open for trading. For any Valuation Date, the Variable
Accumulation Unit value is equal to the value for the preceding Valuation
Date multiplied by the Net Investment Factor for the current Valuation
Date. For any day which is not a Valuation Date, the Variable
Accumulation Unit value is equal to the value for the following Valuation
Date. The Variable Accumulation Unit value is affected by the investment
experience of the Account and the deduction of charges and may vary either
up or down each Valuation Date.
The Net Investment Factor for any Valuation Date is equal to (1) the
net value of the Account determined as of the close of regular trading on
the New York Stock Exchange on that date (exclusive of any purchase
payments or redemptions on such date), less a deduction at an effective
annual rate of 0.37% for the expense and expense risk charges and less a
deduction at a maximum rate of .40% for the investment management charge
(at present, no such charges are deducted, see "Waiver of Charges"), and
less a deduction for federal tax attributable to the maintenance and
operation of the Account (at present, no such federal tax is payable, see
"Charges - Other Charges"); divided by (2) the value of the Account
determined as of such close on the preceding Valuation Date. For a
hypothetical example illustrating the computation of the Variable
Accumulation Unit value and the Net Investment Factor, see the Account's
Statement of Additional Information.
The Account's portfolio securities are valued as follows:
Investments in short-term securities which mature in 60 days or less
are valued under the amortized cost method of valuation. Under this
method, securities are initially valued at cost on their acquisition date
(or the date on which they first have a maturity of 60 days or less), and
their subsequent value is based on such initial value, assuming a constant
accretion of a discount or amortization of a premium to maturity,
regardless of any subsequent minor fluctuations in the market value of the
security. Short-term securities which mature in more than 60 days are
valued at market values, based on quoted bid and asked prices or yield
equivalent.
In effect, each Net Purchase Payment (after the first) is invested in
Variable Accumulation Units at the value next determined after receipt of
the payment by MBL Life at its Home Office. Thereafter, the Variable
Accumulation Units credited under a Contract will vary up or down in
value, depending on the value of the assets held by the Account which is
affected by investment performance, expenses and charges.
Transfers Between Contracts
A Participant may transfer between the Variable Accumulation Account
under the Contract described in this Prospectus and the VCA-2 Contract, on
proper written request to MBL Life. During any Contract Year a
Participant may transfer, once a quarter, from the Contract to the VCA-2
Contract. Until the termination of the Rehabilitation Period, no later
than December 31, 1999, transfers between the Variable Accumulation
Account under the Contract, as described in this Prospectus and the
Companion Contract, may be subject to restrictions imposed by the
Companion Contract. (See "The Variable Contract Account - Legal
Developments".)
The Variable Accumulation Account values will also be transferred to
the Companion Contract upon the death of a Participant (see "Accumulation
Account - Payment at Death"), or if a Qualified Plan fails to qualify
under the Code. (See "Other Contract Provisions - Failure of Plan to
Qualify".)
A request to transfer from a Participant's Variable Accumulation
Account under a Contract to a VCA-2 Contract is treated as a request to
transfer the entire Variable Accumulation Account if the total value
remaining in the Contract after the transfer would otherwise be less than
$240 or if the amount specified to be transferred exceeds the value of the
Variable Accumulation Account.
No transfer may be made within 15 days of a Participant's Annuity
Commencement Date. The amount of each transfer must be at least $240.
Transfers from the VCA-2 Contract to the Contract described in this
Prospectus will be subject to the transfer provisions contained in such
other contract, including any limitations or charges contained in that
contract.
Transfers may be made only on a Valuation Date as defined in this
Prospectus. All transfers will be based on the Variable Accumulation Unit
value calculated on the effective date of the transfer. MBL Life will
send Participants written confirmation of all transfers when they are
effected.
Redemption
The current value of a Participant's Variable Accumulation Account
may be withdrawn, in whole or in part, or transferred to another tax-
qualified investment vehicle, at any time before his or her Annuity
Commencement Date under the Contract. However, under 401, 403(b) and 457
Plans, the redemption right may be restricted in accordance with the Plan.
Any partial withdrawal must amount to at least $240. Certain plans may
require forfeiture of non-vested employer contributions, and may also
provide that certain contributions may not be redeemed until the
occurrence of a specified event, such as attainment of age 59 1/2. The
terms of the Plan should be reviewed to determine if contributions are so
restricted.
Redemption is effected by redeeming a sufficient number of Variable
Accumulation Units in the Variable Accumulation Account to pay the amount
requested in cash. The number of units redeemed in the Variable
Accumulation Account is based on their value next determined after receipt
of a proper written request by MBL Life at its Home Office.
A request for partial redemption of a Participant's Variable
Accumulation Account under the Contract is treated as a request for
complete redemption if the total remaining value of the Variable
Accumulation Account would otherwise be less than $240 or if the
redemption request is for an amount which exceeds the value of such
account.
In this event, the Participant's Variable Accumulation Account may be
reduced by deducting any applicable administration charge otherwise
deducted at the end of the year and the remaining value of the Variable
Accumulation Account is paid to the Participant (or, in the case of a
transfer, to the financial institution designated by the Participant) less
any federal taxes withheld. (See "Federal Income Tax Status --
Withholding".) After complete redemption by a Participant, no further
purchase payments may be made for the Participant without the consent of
MBL Life.
Payment of the amount redeemed is made within seven days after
receipt of the request, unless (1) the New York Stock Exchange is closed
(for reasons other than holidays and weekends), or trading on the New York
Stock Exchange is restricted, (2) an emergency exists, as determined by
the SEC, so that valuation of the assets of the Account, or redemption of
the securities held by the Account, is not practicable, or (3) the SEC
permits postponement by order.
Redemption may adversely affect tax benefits otherwise available
under the Code. (See "Federal Income Tax Status".) Under 403(b) Plans
current restrictions imposed by the Code limit withdrawals. (See "Federal
Income Tax Status -- 403(b) Plans".)
Payment at Death
If a Participant dies before his or her Annuity Commencement Date,
MBL Life will cancel the Participant's Variable Accumulation Account and
transfer the value of such account, as of the date MBL Life receives
satisfactory written notice of death, to the Companion Contract where the
proceeds will be held at the interest rate specified in the Companion
Contract until final disposition. (See "Group Tax-Deferred Variable
Annuity Contracts - Companion Contract and VCA-2 Contract" and "The
Variable Contract Account - Legal Developments".) No sales charges will
be imposed on the transfer of Account funds to the Companion Contract. In
lieu of transferring the Participant's Variable Accumulation Account to
the Companion Contract, MBL Life may pay all of such account value to the
beneficiary in a single sum, if the beneficiary has made a written request
for such payment. The Contracts require the beneficiary to make the
written request within 90 days of the Participant's death. If the
beneficiary is a spouse, the Variable Accumulation Account may be
continued at the spouse's election; however, no further purchase payments
may be made.
In general, the rights of beneficiaries are subject to the same
conditions as corresponding rights of Participants. In addi-tion, the
rights of a beneficiary may be subject to restrictions imposed by the
Participant in designating his or her beneficiary.
ANNUITY
Annuity Commencement Date
A Participant covered under an annuity purchase agreement adopted
pursuant to Section 403(b) of the Code may elect an Annuity Commencement
Date under the Contracts, which, as discussed above, will be the first day
of any month on which the Participant elects to begin receiving payments
under an annuity. In no event may a Participant's Annuity Commencement
Date be later than the date under which distributions must begin under the
Code. The Code generally requires distributions to begin by April 1
following the calendar year in which a Participant attains age 70 1/2,
without regard to the actual date of retirement, and also precludes
distributions attributable to elective purchase payments prior to
attainment of age 59 1/2, separation from service, death, disability or
hardship. The selection of an Annuity Commencement Date must be made in
writing, on a form furnished by MBL Life, and received in MBL Life's Home
Office at least 15 days in advance of the Annuity Commencement Date.
An elected retirement date under other Qualified Plans, which
generally must be no later than April 1 following the calendar year in
which a Participant attains the age of 70 1/2, is the Participant's
Annuity Commencement Date.
Purchase of Annuity
On a Participant's normal or optional Annuity Commencement Date, the
value of the Variable Accumulation Account, less any applicable premium
tax, may be applied to purchase a fixed annuity and, if an VCA-2 Contract
has been issued to the Contract Holder, a variable annuity. In such
event, the full value of the Participant's Variable Accumulation Account
will be transferred in the appropriate amounts to the Companion Contract
and/or VCA-2 Contract. The amounts transferred will be as elected by the
Participant, in order to achieve the desired balance between the fixed and
variable annuities. The fixed annuity will then be purchased under the
Companion Contract, and the variable annuity will be purchased under the
VCA-2 Contract.
GENERAL RIGHTS
Voting Rights
All Contract Holders have voting rights with respect to the Account.
The number of votes attributed to each Contract Holder is equal to the
number of Variable Accumulation Units in the Account under the Contract.
Fractional votes are counted. Participants may have the right to instruct
Contract Holders as to casting votes with respect to their Variable
Accumulation Accounts arising from their own purchase payments under 401,
403(b), IRA, or 457 Plans, as may be provided under the terms of the Plan.
Votes with respect to units for which no voting instructions are received
from Participants are voted by the Contract Holder on each matter in the
same proportion as those units for which voting instructions are received.
MBL Life votes units it holds on each matter in the same proportion as
such units are voted by Contract Holders.
The Account held a Special Meeting of Contract Holders on April 12,
1995. All Contract Holders and Participants of record as of February 24,
1995 received Proxy materials, dated March 13, 1995, describing several
items in which such Contract Holders were entitled to vote at that
meeting. A majority of the Contract Holders voted, by Proxy, to elect the
five Committee Members; ratify the appointment of Coopers & Lybrand
L.L.P., as the Account's independent accountants; approve the continuance
of the Account's investment advisory agreement with First Priority; and
approve the continuance of the Account's Service Agreement among the
Account, First Priority and MBL Life.
The Account is not required to hold regular annual Contract Holder
meetings and, in the normal course, does not expect to hold such meetings.
The Account is, however, required to hold Contract Holder meetings for
such purposes as, for example: (1) approving certain agreements as
required by the 1940 Act; (2) changing fundamental investment objectives
and restrictions; and (3) filling vacancies in the membership of the
Management Committee of the Account ("Committee") in the event that less
than a majority of the Committee members were elected by Contract Holders.
The Account expects that there will be no meetings of Contract Holders for
the purpose of electing Committee members unless and until such time as
less than a majority of the Committee members holding office have been
elected by Contract Holders. In addition, holders of record of not less
than two-thirds of the outstanding Accumulation Units of the Account may
remove a Committee member from office by a vote cast in person or by proxy
at a Contract Holder meeting called for that purpose at the request of
holders of 10% or more of the outstanding Accumulation Units of the
Account. The Account has the obligation to assist in such Contract Holder
communications. Except as set forth above, Committee Members will
continue in office and may appoint successor Committee Members.
Confirmation of Transactions
Within five business days after the end of each calendar quarter a
quarterly statement will be sent to each Participant under the Contract
detailing all activity in the Participant's Variable Accumulation Account
for the previous quarter, including any purchase payments, redemptions and
transfers; the dates of each such transaction; the amounts allocated to
the Variable Accumulation Account; the administration charges deducted, if
any, and the total Variable Accumulation Account value at the end of the
period.
New Participants will be sent a confirmation upon receipt of their
first purchase payment, and quarterly statements thereafter.
In some cases confirmations may be sent more frequently than
quarterly.
Reports
During the Accumulation Period, MBL Life furnishes a quarterly report
for each Participant showing as of a specified date (1) the number of
Variable Accumulation Units in his or her Variable Accumulation Account
under the Contract and (2) the Variable Accumulation Unit value.
In addition, MBL Life will furnish for each Participant a semi-annual
report showing the financial position of the Account and a schedule of the
investments held by the Account.
457 Plan Participants
The rights and benefits of Participants in a 457 Plan differ from
those of Participants covered under Contracts issued under other
circumstances. Under a 457 Plan the Contract Holder is usually the
employer and the assets of such a Plan are part of the general assets of
the employer. A Participant must look exclusively to his or her employer
and the employer's financial resources for any benefits to which the
Participant is entitled. Accordingly all rights of Participants referred
to or described in this Prospectus are vested in the Contract Holder.
MANAGEMENT
The Account is managed by a Management Committee in accordance with
the Rules and Regulations adopted by the Management Committee. The names
and addresses of the Chairman, Members, and Officers of the Management
Committee together with a brief description of their principal occupations
during the past five years are found in the Account's Statement of
Additional Information, "Management of the Account".
INVESTMENT MANAGEMENT
The Investment Advisory Agreement between the Account and First
Priority was last approved by the Management Committee on February 9,
1995, and approved by Contract Holders on April 12, 1995. This Investment
Advisory Agreement, which initially became effective on May 1, 1994,
provides for the succession of First Priority as investment adviser to the
Account in place of Green Hill Financial Service Corporation ("Green
Hill"). Under the Investment Advisory Agreement with the Account, First
Priority now provides the Account with investment advisory and management
services and, subject to the authority of the Management Committee, is
responsible for overall management of the Account's business affairs.
Under a separate Service Agreement among the Account, First Priority and
MBL Life, last approved by the Management Committee on February 9, 1995,
and approved by Contract Holders on April 12, 1995, MBL Life provides
First Priority with certain facilities required for performance of its
duties under the Investment Advisory Agreement.
First Priority was incorporated in 1993 under the laws of the State
of New Jersey. It is a registered investment adviser under the Advisers
Act, a registered broker-dealer under the Securities Exchange Act of 1934,
and a member of the National Association of Securities Dealers, Inc.
First Priority serves as investment adviser for MAP-Government Fund, Inc.,
a money-market mutual fund sponsored by MBL Life, and will also engage in
the sale of other investment company securities and other financial
products.
A description of the services provided by First Priority pursuant to
the Investment Advisory Agreement, and a discussion of the Service
Agreement, appear in the Account's Statement of Additional Information,
"Investment Advisory and Other Services".
During 1993 and from January 1, 1994 through April 30, 1994, Green
Hill received advisory fees from Mutual Benefit Life, pursuant to its
agreement, of $10,840, and $3,168 respectively. From May 1, 1994 through
December 31, 1994, and for 1995, First Priority received advisory fees
from MBL Life, pursuant to its agreement, of $5,945 and $8,536,
respectively.
FEDERAL INCOME TAX STATUS
Introduction
The following discussion is a general discussion of federal income
tax considerations relating to the Contract and is not intended as tax
advice. This discussion is not intended to address the tax consequences
resulting from all of the situations in which a person may be entitled to
or may receive a distribution under the Contract. Any person concerned
about these tax implications should consult a competent tax advisor before
initiating any transaction. This discussion is based upon MBL Life's
understanding of the present federal income tax laws as they are currently
interpreted by the Internal Revenue Service ("IRS"). No representation is
made as to the likelihood of the continuation of the present federal
income tax laws or of the current interpretation by the IRS. Moreover, no
attempt has been made to consider any applicable state or other tax laws.
The Contract may be purchased on a non-tax qualified basis ("Non-
Qualified Contract") or purchased and used in connection with certain
retirement arrangements entitled to special income tax treatment under
Section 401(a), 403(b), 408(b) or 457 of the Code ("Qualified Contracts").
Taxation of MBL Life
MBL Life is taxed as a life insurance company under Part I of
Subchapter L of the Code. Since the Account is not an entity separate
from the Company, and its operation forms a part of MBL Life, it will not
be taxed separately as a "regulated investment company" under Subchapter M
of the Code. Investment income and realized capital gains are
automatically applied to increase reserves under the Contracts. Under
existing federal income tax law, MBL Life believes that the Account's
investment income and realized net capital gains will not be taxed to the
extent that such income and gains are applied to increase the reserves
under the Contracts.
Accordingly, MBL Life does not anticipate that it will incur any
federal income tax liability attributable to the Separate Account and,
therefore, MBL Life does not intend to make provisions for any such taxes.
However, if changes in the federal tax laws or interpretations thereof
result in MBL Life being taxed on income or gains attributable to the
Account, then MBL Life may impose a charge against the Account (with
respect to some or all Contracts) in order to set aside provisions to pay
such taxes.
Tax Status of the Contract
Diversification. Section 817(h) of the Code requires that with
respect to certain contracts, the investments of the Account must be
"adequately diversified", in accordance with Treasury Regulations in order
for those Contracts to qualify as annuity contracts under federal tax law.
MBL Life believes that all contracts issued in accordance with this
Prospectus are pension plan contracts to which Section 817(h) is not
presently applicable.
In certain circumstances, owners of variable annuity contracts may be
considered the owners, for federal income tax purposes, of the assets of
the separate accounts used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has
stated in published rulings that a variable contract owner will be
considered the owner of separate account assets if the contract owner
possesses incidents of ownership in those assets, such as the ability to
exercise investment control over the assets. The Treasury Department has
also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance
concerning the circumstances in which investor control for the investments
of a segregated asset account may cause the investor [i.e., the owner],
rather than the insurance company, to be treated as the owner of the
assets in the account". This announcement also stated that guidance would
be issued by way of regulations or rulings on the "extent to which
policyholders may direct their investments to particular Sub-Accounts
without being treated as owners of the underlying assets." As of the date
of this Prospectus, no guidance has been issued.
The ownership rights under the Contract are similar to, but different
in certain respects from those described by the IRS in rulings in which it
was determined that contract owners were not owners of separate account
assets. These differences could result in an owner being treated as the
owner of a pro rata portion of the assets of the Account. In addition,
MBL Life does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects
to issue. MBL Life therefore reserves the right to modify the Contract as
necessary to attempt to prevent an owner from being considered the owner
of a pro rata share of the assets of the Account.
Retirement Plans
In General. The Contract is designed for use with several types of
retirement plans. The tax rules applicable to participants and
beneficiaries in retirement plans vary according to the type of plan and
the terms and conditions of the plan. Special favorable tax treatment may
be available for certain types of contributions and distributions.
Adverse tax consequences may result from contributions in excess of
specified limits; distributions prior to age 59 1/2 (subject to certain
exceptions); distributions that do not conform to specified commencement
and minimum distribution rules; aggregate distributions in excess of a
specified annual amount; and in other specified circumstances. For
example, a 10% penalty generally will be imposed on the taxable amount of
withdrawals prior to age 59 1/2, subject to certain exceptions.
MBL Life makes no attempt to provide more than general information
about use of the Contracts with the various types of retirement plans.
Owners and participants under retirement plans as well as annuitants and
beneficiaries are cautioned that the rights of any person to any benefits
under Contracts may be subject to the terms and conditions of the plans
themselves, regardless of the terms and conditions of the Contracts issued
in connection with such a plan. The ultimate effect of federal income
taxes on the amounts held under a Contract, on annuity payments, and on
the economic benefit to the Contract owner, the annuitant, or the
beneficiary may depend on the tax status of the individual concerned.
Some retirement plans are subject to distribution and other requirements
that are not incorporated in the administration of the Contracts. Owners
are responsible for determining that contributions, distributions and
other transactions with respect to the Contracts satisfy applicable law.
Owners, participants and beneficiaries should consult their legal counsel
and tax advisor regarding the use of the Contract under the retirement
plan.
Corporate Pension and Profit-Sharing and H.R. 10 Plans. Code Section
401(a) permits employers to establish various types of retirement plans
for employees, and permits self-employed individuals to establish
retirement plans for themselves and their employees. These retirement
plans may permit the purchase of the contracts to accumulate retirement
savings under the plans. Adverse tax consequences to the plan, to the
participant or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments.
Section 403(b) Plans. Under Code Section 403(b), payments made by
public school systems and certain tax exempt organizations to purchase
annuity contracts for their employees are excludible from the gross income
of the employee, subject to certain limitations. However, these payments
may be subject to FICA (Social Security) taxes and state income taxes.
Code Section 403(b)(11) restricts the distribution under Code Section
403(b) annuity contracts of: (1) elective contributions made in years
beginning after December 31, 1988; (2) earnings on those contributions;
and (3) earnings in such years on amounts held as of the last year
beginning before January 1, 1989. Distribution of those amounts may only
occur upon death of the employee, attainment of age 59 1/2, separation
from service, disability, or financial hardship. In addition, income
attributable to elective contributions may not be distributed in the case
of hardship.
Individual Retirement Annuities and Simplified Employee Pension
Plans. Sections 219 and 408 of the Code permit eligible individuals to
contribute to an individual retirement program known as an Individual
Retirement Annuity or Individual Retirement Account, each hereinafter
referred to as an "IRA". IRAs are subject to limitations on the amount
that may be contributed and deducted and the time when distributions may
commence. Also, distributions from certain other types of qualified plans
may be "rolled over" on a tax-deferred basis into an IRA. Employers may
establish Simplified Employee Pension (SEP) Plans to provide IRA
contributions on behalf of their employees. The sale of a Contract for
use with an IRA may be subject to special disclosure requirements of the
Internal Revenue Service. Purchasers of a Contract for use with IRAs will
be provided with supplemental information required by the Internal Revenue
Service or other appropriate agency. Such purchasers will have the right
to revoke their purchase within 7 days of the earlier of the establishment
of the IRA or their purchase.
Deferred Compensation Plans. Code Section 457 provides for certain
deferred compensation plans. These plans may be offered with respect to
service for state governments, local governments, political subdivisions,
agencies, instrumentalities and certain affiliates of such entities, and
tax exempt organizations. These plans are subject to various restrictions
on contributions and distributions. The plans may permit participants to
specify the form of investment for their deferred compensation account.
In general, all investments are owned by the sponsoring employer and are
subject to the claims of the general creditors of the employer. Depending
on the terms of the particular plan, the employer may be entitled to draw
on deferred amounts for purposes unrelated to its Section 457 plan
obligations. In general, all amounts received under a Section 457 plan
are taxable and are subject to federal income tax withholding as wages.
Restrictions under Qualified Contracts. Other restrictions with
respect to the election, commencement, or distribution of benefits may
apply under Qualified Contracts or under the terms of the plans in respect
of which Qualified Contracts are issued.
Taxation of Distributions
Section 72 of the Code governs taxation of distributions from Section
401, 403(b) and 408 retirement plans in general. For this purpose, the
assignment, pledge, or agreement to assign or pledge any portion of the
Account Value or any portion of an interest in the retirement plan
generally will be treated as a distribution. The taxable portion of a
distribution (in the form of a single sum payment or an annuity) is
taxable as ordinary income.
In the case of a withdrawal, a ratable portion of the amount received
is taxable, generally based on the ratio of the "investment in the
contract" to the individual's total accrued benefit under the retirement
plan. The "investment in the contract" generally equals the amount of any
non-deductible purchase payments paid by or on behalf of any individual.
For a Contract issued in connection with retirement plans, the "investment
in the contract" will most likely be zero. Special tax rules may be
available for certain withdrawals.
Although the tax consequences may vary depending on the annuity
payment elected under the Contract, in general, only the portion of the
annuity payment that represents the amount by which the Account Value
exceeds the "investment in the contract" will be taxed; after the
"investment in the contract" is recovered, the full amount of any
additional Annuity payments is taxable. For Variable Annuity payment, the
taxable portion is generally determined by an equation that establishes a
specific dollar amount of each payment that is not taxed. The dollar
amount is determined by dividing the "investment in the contract" by the
total number of expected periodic payments. However, the entire
distribution will be taxable once the recipient has recovered the dollar
amount of his or her "investment in the contract". For Fixed Annuity
payments, in general there is no tax on the portion of each payment which
represents the same ratio that the "investment in the contract" bears to
the total expected value of the Annuity payments for the term of the
payments; however, the remainder of each Annuity payment is taxable. Once
the "investment in the contract" has been fully recovered, the full amount
of any additional Annuity payments is taxable. If Annuity payments cease
as a result of an Annuitant's death before full recovery of the
"investment in the contract", consult a competent tax advisor regarding
deductibility of the unrecovered amount.
Amounts may be distributed from the Contract because of the death of
a retirement plan participant. Generally, such amounts are includible in
the income of the recipient as follows: (1) if distributed in a lump sum,
they are taxed in the same manner as a full surrender as described above,
or (2) if distributed under an Annuity Option, they are taxed in the same
manner as Annuity payments, as described above.
Withholding
Retirement distributions generally are subject to withholding for the
recipient's federal income tax liability at rates that vary according to
the type of distribution and the recipient's tax status. Under certain
circumstances recipients are provided the opportunity to elect not to have
tax withheld from distributions. Certain distributions from Section
401(a) plans and Section 403(b) annuities are subject to mandatory federal
income tax withholding.
Possible Changes in Taxation
In past years, legislation has been proposed that would have
adversely modified the federal taxation of certain annuities. For
example, one such proposal would have changed the tax treatment of non-
qualified annuities that did not have "substantial life contingencies" by
taxing income as it is credited to the annuity. Although as of the date
of this Prospectus Congress is not actively considering any legislation
regarding the taxation of annuities, there is always the possibility that
the tax treatment of annuities could change by legislation or other means
(such as IRS regulations, revenue rulings, judicial decisions, etc.).
Moreover, it is also possible that any change could be retroactive (that
is, effective prior to the date of the change).
Other Tax Consequences
As noted above, the foregoing discussion of the federal income tax
consequences is not exhaustive and special rules are provided with respect
to other tax situations not discussed in this Prospectus. Further, the
federal income tax consequences discussed herein reflect MBL Life's
understanding of the current law and the law may change. Federal estate
and gift tax consequences of ownership or receipt of distributions under
the Contract depend on the individual circumstances of each Owner or
recipient of a distribution. A competent tax advisor should be consulted
for further information.
OTHER CONTRACT PROVISIONS
Beneficiary
The Participant may select a beneficiary to receive any benefit at
death, and may change the beneficiary by proper written notice to MBL
Life.
Non-Assignability
The right to benefits or payments under the Contract is neither
assignable nor subject to the claim of any creditor, except as may be
allowed under 457 Plans.
Portability
A Participant under a 403(b) Plan who becomes employed by a new
employer which is eligible under Section 403(b) of the Code may enter into
an annuity purchase agreement with the new employer, at no additional
charge, so that purchase payments will be continued under the Contract by
the new employer on behalf of the Participant, if the Contract so provides
and if MBL Life consents.
Failure of Plan to Qualify
If a previously issued Qualified Plan fails to qualify under the
Code, MBL Life has the right, without prior notice to or consent of the
Contract Holder, to transfer to the Companion Contract any amounts held in
Variable Accumulation Accounts under the Contract described in this
Prospectus, on the basis of equivalence as of the date of transfer.
Thereafter, the Contract shall be considered terminated. Proof of
qualification may be required by MBL Life.
Discontinuance
Purchase payments under a Contract will no longer be accepted by MBL
Life when any of the following events occurs:
(1) The Contract Holder so notifies MBL Life in writing.
(2) MBL Life so notifies the Contract Holder in writing after an
investment adviser other than First Priority is selected for the
Account. Such a notice would be sent to all Contract Holders
participating in the Account.
(3) After receipt of an amendment or modification of the Plan, MBL Life
gives the Contract Holder written notice that the effect of the
amendment, in MBL Life's judgment based on underwriting principles
then in effect, might be detrimental to MBL Life, and the Contract
Holder and MBL Life are unable to reach a mutual agreement within 30
days after the written notice. If discontinuance occurs for this
reason, the amendment will not be given effect under the Contract.
Effective with any such discontinuance, no further purchase payments
will be accepted by MBL Life under the Contract and no further transfers
will be allowed between the Variable Accumulation Account and the VCA-2
Contract. However, MBL Life will continue to maintain the Participant's
existing Variable Accumulation Accounts, unless otherwise requested, as
explained below under "Transfer to New Funding Agency". Discontinuance of
purchase payments will have no effect on the rights of annuitants.
Transfer to New Funding Agency
If MBL Life ceases to accept additional purchase payments, a Contract
Holder may designate a new funding agency to receive amounts to be
transferred in accordance with the following paragraphs.
With respect to a 403(b) or IRA Plan, each Participant has the right
to direct MBL Life, by proper written request to cancel his or her
Variable Accumulation Account and transfer its dollar value to a new
funding agency. All such transfers will be made in the aggregate and
valued as of a single transfer date, which will be 90 days after receipt
by MBL Life of the Contract Holder's notice.
With respect to a 401 or 457 Plan, the Contract Holder has the right,
with respect to all Participants, to direct MBL Life, by proper written
notice of the selection of a new funding agency, to cancel each
Participant's Variable Accumulation Account and transfer such aggregate
dollar value to the new funding agency. The value of such accounts will
be determined as of the day MBL Life receives the Contract Holder's notice
at its Home Office, or any later transfer date specified in the notice.
For any Plan, the aggregate transfer payment will be paid within
seven days after the transfer date.
Changes in Contract
MBL Life has the right, subject to compliance with the applicable
law, to give written notice to the Contract Holder, at least 6 months in
advance, of a change to be effective on or after the fifth Contract
anniversary in any of the charges specified in the Contract. Participants
will be informed of any such change.
Any such change which has an adverse effect on any Participant will
not apply to any amount credited to Variable Accumulation Accounts before
the effective date of such change, except that a change in the risk charge
may apply uniformly to all Variable Accumulation Units, including those
credited before the effective date of the change (but not retroactively).
The Contract may also be changed in any other respect at any time by
an agreement between the Contract Holder and MBL Life, but no such change
will be made without the consent of the persons entitled to receive
benefits under the Contract, unless (1) the change will have no adverse
effect on their rights with respect to the Variable Accumulation Account
balance already credited, (2) the change is required to comply with a law
or governmental regulation or (3) the Plan is a 457 Plan. Such persons
will be informed of any such change which materially affects their rights.
Other Changes
MBL Life reserves the right, subject to compliance with the law as
currently applicable or subsequently changed, (1) to discontinue
submitting certain matters for approval by persons having voting rights
under the Contracts, (2) to fund additional classes of contracts through
the Account, (3) to transfer assets, determined by MBL Life, to be
assigned to the class of contracts to which the Contracts belong, from the
Account to another separate account by withdrawing the same percentage of
each investment in the Account, with appropriate adjustments to avoid odd
lots and fractions, (4) to operate the Account as another form of
registered investment company or unregistered entity, and (5) to change
the investment policies described in this Prospectus.
TABLE OF CONTENTS
STATEMENT OF ADDITIONAL INFORMATION
General Information and History . . . . . . . . . 2
Investment Restrictions . . . . . . . . . . . . . 2
Commercial Paper and Bond Ratings . . . . . . . . 4
Management of the Account . . . . . . . . . . . . 5
Investment Advisory and Other Services . . . . . 7
Purchase and Pricing of Securities . . . . . . . 10
Calculation of Performance Data . . . . . . . . . 11
Additional Information . . . . . . . . . . . . . 12
Financial Statements . . . . . . . . . . . . . . 13
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT - 7
OFFERED BY
MBL LIFE ASSURANCE CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
(201) 481-8564
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
INVESTMENT ADVISER
FIRST PRIORITY INVESTMENT CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
PRINCIPAL UNDERWRITER
FIRST PRIORITY INVESTMENT CORPORATION
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO PERSON IS
AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
<PAGE>
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
Business Reply Mail
First Class Permit No.
Newark, NJ
Postage will be paid by
MBL Life Assurance Corporation
Group Pension Operations
MBL Life Assurance Corporation
520 Broad Street
Newark, New Jersey 07102-3111
Attn: MBL Variable Contract Account-7
-------------------------------------------------------
Please send the current Statement of Additional Information for
MBL VARIABLE CONTRACT ACCOUNT-7 to:
_______________________________________________________________
Name
_______________________________________________________________
Street
_______________________________________________________________
City State Zip
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-7
previously known as
Mutual Benefit Variable Contract Account-7
_______________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Statement of Additional
Information of information required by the Items in Part B of Form N-3.
Heading in Statement of
Item Number Additional Information
16 Cover Page
17 Table of Contents
18 General Information
and History
19 Investment Restrictions
20 Management of the Account
21 Investment Advisory and
Other Services
22 Portfolio Transactions
23 Purchase and Pricing of
Securities
24 *
25 Calculation of
Performance Data
26 *
27 Financial Statements
____________________________________________________________
* Indicates inapplicable or negative.
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-7
MBL Life Assurance Corporation
STATEMENT OF ADDITIONAL INFORMATION
, 1996
This Statement of Additional Information is not a prospectus but has
been incorporated by reference into, and must be read in conjunction with,
the Prospectus of MBL Variable Contract Account-7 dated , 1996.
Terms not defined in this Statement of Additional Information shall have
the same meaning given to them in the incorporated Prospectus. A copy of
the Prospectus may be obtained from Group Pension Operations, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-3111,
Attn: MBL VARIABLE CONTRACT ACCOUNT-7, telephone number 1-800-435-3191.
TABLE OF CONTENTS
Cross Reference to
Page Page in Prospectus
General Information and
History 2 5, 10
Investment Restrictions 2 15
Commercial Paper and Bond
Ratings 4 12, 13
Management of the Account 5 22
Investment Advisory and
Other Services
Advisory and Management
Services 7 5, 16, 22,
Distribution Services 8 5
Portfolio Transactions 8 ---------
Purchase and Pricing of
Securities
Purchase 10 8, 16,
Pricing 10 16
Calculation of Performance
Data 11 7
Additional Information 12 --------
Financial Statements 12 7
GENERAL INFORMATION AND HISTORY
The business history of MBL Variable Contract Account-7 (the
"Account") (previously known as Mutual Benefit Variable Contract Account-
7), is described in its Prospectus.
The sponsoring insurance company, MBL Life Assurance Corporation
("MBL Life"), is a stock life insurance company and the surviving entity
in the Rehabilitation of Mutual Benefit Life Insurance Company ("Mutual
Benefit Life").
On July 16, 1991, the Superior Court of New Jersey ("Court") entered
an Order ("Order") appointing the Commissioner of the State of New Jersey
as Rehabilitator of Mutual Benefit Life, thereby granting the
Rehabilitator immediate exclusive possession and control of, and title to,
the business and assets of Mutual Benefit Life, including those of the
Account. As a separate account, the assets and liabilities of the Account
were maintained separate and apart from Mutual Benefit Life's other assets
and liabilities.
In view of the terms and conditions of the Order, on July 16, 1991,
Mutual Benefit Life, on behalf of the Account, immediately ceased
acceptance of applications for new Contracts and additional purchase
payments under existing Contracts. Transfers to and from the Account were
temporarily suspended. Payments upon the death of the Participant
continued to be made to the beneficiary.
In accordance with the Rehabilitation Plan of Mutual Benefit Life, as
approved by the Court on January 28, 1994, substantially all of the assets
and certain liabilities, including all insurance liabilities, of Mutual
Benefit Life were transferred to MBL Life on April 29, 1994 (the
"Transfer"). In addition, the assets and liabilities of the Account were
transferred to a new separate account of MBL Life.
As of January 2, 1996, Participants under the Long Island Jewish
Medical Center 403(b) Plan, New Hyde Park, New York, the largest Contract
Holder of the Account, owned 42.79% of the outstanding Variable
Accumulation Units of the Account; Participants under the New York
Hospital 403(b) Plan, New York, New York, owned 10.38% of the outstanding
Variable Accumulation Units of the Account.
INVESTMENT RESTRICTIONS
The Account is subject to the following investment restrictions in
addition to those described in the Prospectus. These restrictions are
considered fundamental policies and cannot be changed without the approval
of the Contract Holders of a majority (as defined in the Investment
Company Act of 1940) of the outstanding Variable Accumulation Units of the
Account. The Account may not:
1. purchase securities other than those in which the Account
is authorized to invest, as set forth under "Investment
Objective and Policies" in the Prospectus;
2. borrow money in excess of 5% of its total assets taken at
cost, and then only from banks as a temporary measure for
extraordinary or emergency purposes, such as to facilitate
redemption requests which might otherwise require untimely
dispositions of portfolio securities; the Account will not
borrow to increase income (leveraging), provided however,
that this restriction shall not apply to reverse repurchase
agreements (see Prospectus, "Investment Restrictions");
3. make loans, except by the purchase of obligations in which
the Account may invest; provided, however, that this
restriction shall not apply to repurchase agreements (see
Prospectus, "Investment Restrictions");
4. invest more than 5% of the value of the Account's total
assets in the securities of any one issuer;
5. write, or invest in, put, call, straddle, or spread options
or invest in interests in oil, gas or other mineral
exploration or development programs;
6. purchase securities on margin or sell any securities short;
7. invest more than 5% of the value of its total assets in the
securities of companies having a record of less than three
years continuous operations, including the operations of
any predecessor, but this limitation does not apply to
securities issued or guaranteed as to interest and
principal by agencies or instrumentalities of the United
States Government; but does apply to investments in
securities of agencies and instrumentalities of the United
States Government which are only supported by their own
credit or right to borrow from the United States Treasury;
8. underwrite the securities of other issuers or purchase
securities subject to restrictions on disposition under the
Securities Act of 1933 (so-called "restricted securities");
9. purchase securities which are not freely marketable, except
under repurchase agreements and master demand notes;
10. invest in real estate, real estate investment trust
securities, commodities, or commodity contracts; however,
the Account may buy commercial paper issued by companies
which invest in real estate or interests therein;
11. invest in companies for the purpose of exercising control;
12. purchase equity securities, voting securities, or local or
state government securities; or
13. invest in securities of other investment companies; except
as they may be acquired as part of a merger, consolidation
or acquisition of assets.
With respect to Investment Restriction 4. above, the Account, as a
matter of operating policy, may invest more than 5% of the value of its
total assets in U.S. Government Securities and repurchase agreements that
are fully collateralized by U.S. Government Securities. As a matter of
operating policy, the Account will not invest more than (i) the greater of
1% of its total assets or $1,000,000 in Second Tier Securities (as defined
in Rule 2a-7 under the 1940 Act) of a single issuer and (ii) 5% of the
Account's total assets, when acquired, in Second Tier Securities.
New Jersey Insurance Law Requirements
The Account limits its investments in accordance with the provisions
of the New Jersey Insurance Law that govern the separate account
operations of a New Jersey life insurance company.
Investments will be made in accordance with the insurance law in
effect at the time. In general, a separate account may only make
investments that an insurance company's general account is permitted to
make. However, an investment not otherwise eligible under these
limitations may be made if, after giving effect to the investment, the
total cost of such non-eligible investment does not exceed 5% of the total
assets of the Account. Investments in the assets of foreign issuers may
not exceed 10% of the total admitted assets of the Account. Additionally,
New Jersey Insurance Law provides that securities of any one institution
may not exceed 5% of the total admitted assets of the insurer including
those assets of the insurer's separate accounts. An investment
opportunity, therefore, may be postponed if a purchase would cause the
combined holdings to exceed this 5% limit.
COMMERCIAL PAPER and BOND RATINGS
A-1 and Prime-1 Commercial Paper Ratings
A commercial paper rating of A-1 by Standard & Poor's implies that an
issue has the following characteristics: liquidity ratios are adequate to
meet cash requirements; long-term senior debt is rated "A" or better; the
issuer has access to at least two additional channels of borrowing; basic
earnings and cash flow have an upward trend with allowance made for
unusual circumstances; typically, the issuer's industry is well
established and the issuer has a strong position within the industry; and
the reliability and quality of management are unquestioned. The relative
strength or weakness of the above factors determine whether the issuer's
commercial paper is A-1, A-2, or A-3.
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Among the factors considered by Moody's in assigning ratings are
the following: evaluation of the issuer's industry or industries and the
appraisal of speculative-type risks which may be inherent in certain
areas; evaluation of the issuer's products in relation to competition and
customer acceptance; liquidity; amount and quality of long-term debt;
trend of earnings over a period of ten years; financial strength of a
parent company and the relationships which exist with the issuer; and,
recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet
such obligations. These factors determine whether an issuer's commercial
paper is rated Prime-1, Prime-2, or Prime-3.
AA and Aa Bond Ratings
Bonds rated AA by Standard & Poor's are judged by them to be high-
grade obligations, and in the majority of instances differ only in small
degrees from issues rated AAA. Bonds rated AAA are considered by Standard
& Poor's to be the highest grade obligations and possess the ultimate
degree of protection as to principal and interest. Bonds rated Aa by
Moody's are judged to be of high quality by all standards. Together with
the Aaa group, they comprise what are generally known as high-grade bonds.
They are rated lower than Aaa bonds because margins of protection may not
be as large or fluctuations of protective elements may be of greater
amplitude or there may be other elements present which made the long-term
risks appear somewhat larger.
MANAGEMENT OF THE ACCOUNT
The Account is managed by a Management Committee in accordance with
the Rules and Regulations adopted by the Management Committee. The
Chairman, Members, and Secretary of the Management Committee, together
with a brief description of their principal occupations during the past
five years, are as follows:
* Gordon Boyd, Member
P.O. Box 234, Convent Station, New Jersey 07961
Former Treasurer, Mutual Benefit Life prior to March 1983.
Joseph Lindner, Jr., M.D., Member
31 Old Fort Drive, Hilton Head Island, SC 29926
President, J. Lindner, Inc. since 1991; Vice President, Brissenden,
McFarland, Wagoner & Fuccella, Inc. prior to 1991.
+ Jerome M. Scheckman, Member
P.O. Box 807, Plandome, New York 11030
Formerly Consultant and Managing Director, Salomon
Brothers, Inc.; Member of the Corporation, Babson
College; Member of the Auxillary Board, Mt. Sinai
Hospital; Member of the Business Advisory Counsel,
Alfred University.
** David A. James, Member and Chairman
520 Broad Street, Newark, New Jersey 07102-3111
Senior Vice President - Securities Investments, MBL Life.
** William G. Clark, Member
520 Broad Street, Newark, New Jersey 07102-3111.
Senior Vice President - Pension and Investment Products,
MBL Life since 1995, prior thereto Vice President - Group
Pension Operations; Director and President, First Priority
Investment Corporation since 1993.
+ ** Judith C. Keilp, Secretary of the Committee
520 Broad Street, Newark, New Jersey 07102-3111
Counsel, MBL Life since 1993, prior thereto
Associate Counsel, Mutual Benefit Life since
1990; Vice President and Secretary of First Priority
Investment Corporation since 1993.
+ ** Albert W. Leier, Assistant Secretary of the Committee
520 Broad Street, Newark, New Jersey 07102-3184
Vice President, Controller, MBL Life; Vice President and
Treasurer of First Priority Investment Corporation since
1993.
____________________________
* Mr. Boyd has informed the Account that his duties as Treasurer of
Mutual Benefit Life did not relate to investment companies or services
provided by Mutual Benefit Life to investment companies and that he
currently receives from Mutual Benefit Life only vested retirement plan
benefits.
+ These persons hold similar positions with MBL Growth Fund, Inc., MAP-
Government Fund, Inc. and MAP-Equity Fund.
** Interested persons of the Account. Prior to May 1, 1994 each officer
named above maintained a similar position and/or title with Mutual Benefit
Life that he or she now holds with MBL Life.
________________________
The Account paid no remuneration to Members who also served as
officers or employees of MBL Life, Mutual Benefit Life, the investment
adviser or the distributor. An annual retainer of $1,200 and a fee of
$400 for every meeting attended are paid to "disinterested" Members.
Aggregate compensation of such Members by the Account during 1995 is shown
below. These amounts are paid from the expense charges.
<TABLE>
<CAPTION>
Pension or
Retirement
Benefits Estimated
Aggregate Accrued as Annual Total Compensation
Compensation part of Benefits from Account and
Name of Person from Account upon Account Complex
Position Account Expenses Retirement Paid to Members
<S> <C> <C> <C> <C>
Gordon Boyd $2,800 -0- -0- $ 2,800
Committee Member
Joseph Lindner, Jr. $2,400 -0- -0- $ 2,400
Committee Member
Jerome M. Scheckman, $2,800 -0- -0- $10,300
Committee Member
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
Advisory and Management Services
First Priority Investment Corporation ("First Priority"), a wholly-
owned indirect subsidiary of MBL Life and a New Jersey corporation
incorporated in 1993, provides the Account with investment advisory and
management services, including investment recommendations based on a
continued study of the general economy and specific industries and
companies, placement of orders for the purchase and sale of investment
securities, office space, all necessary office facilities, all personnel
reasonably necessary for the Account's operations and ordinary clerical
services.
In this connection First Priority has entered into a separate Service
Agreement with MBL Life and the Account under which MBL Life will furnish,
through its Securities Investment Division, on a cost reimbursement basis,
investment advisory and other personnel, research and statistical
facilities, and services required by First Priority in connection with its
performance under the Investment Advisory Agreement. The Investment
Advisory Agreement and Service Agreement among the Account, MBL Life and
First Priority were last approved by the Account's Management Committee on
February 9, 1995. These Agreements were approved by Contract Holders on
April 12, 1995.
Each Agreement will continue from year to year, provided that such
continuance is approved at least annually: (a) by the vote, at a meeting,
of a majority of the Management Committee members who are not parties to
the Agreements or interested persons (as defined in the Investment Company
Act of 1940) of such parties and (b) by the Account's Management Committee
or by the vote of Contract Holders. Each Agreement may be terminated at
any time by any party on written notice of not more than 60 days, nor less
than 30 days, and automatically terminates in the event of assignment.
For the investment advisory services of First Priority, the Account
has agreed to pay a periodic fee at the annual rate of .40% of the first
$300,000,000 of the Account's average daily net assets, .35% of the next
$400,000,000 of the Account's average daily net assets and .30% of the
Account's average daily net assets in excess of $700,000,000. Absent the
assumption by MBL Life of the advisory fee, described below, the fee would
be reflected in the unit value computation, accrued daily and paid
quarterly.
Prior to the Transfer, Mutual Benefit Life assumed payment of the
investment advisory service fee. MBL Life will continue to assume payment
of the fee for additional one-year periods, but reserves the right to
cease assumption of payment of the fee at the expiration of any one-year
period. The assumption of payment of this fee by MBL Life was extended
again in 1996 for an additional one-year period.
During 1993, and from January 1, 1994 through April 30, 1994, Green
Hill Financial Service Corporation ("Green Hill"), the Account's previous
investment adviser and distributor, received advisory fees from Mutual
Benefit Life, pursuant to its agreement, of $10,840, and $3,168.
respectively. No reimbursement was made to Mutual Benefit Life under the
Service Agreement. From May 1, 1994 through December 31, 1994, and for
1995, First Priority received advisory fees from MBL Life, pursuant to its
agreement, of $5,945 and $8,536 respectively. No reimbursement was made
to MBL Life under the Service Agreement.
Distribution Services
First Priority is also the Account's distributor. First Priority is
a registered broker-dealer under the Securities Exchange Act of 1934, and
a member of the National Association of Securities Dealers, Inc.
First Priority serves as exclusive distributor of the Account under a
Sales Agreement which is subject to the same annual renewal requirements
and termination provisions as the Investment Advisory Agreement and
Service Agreement. No new Contracts will be offered; however, additional
purchase payments will be accepted under existing Contracts. First
Priority will not receive fees or commissions as distributor for the
Account. Pursuant to the Agreement, MBL Life will pay all expenses
incurred in the Account's operation, except as indicated below, including
interest charges, taxes and governmental fees attributable to transactions
for the Account, and all other applicable taxes arising out of the
investment operations of the Account, including income and capital gains
taxes, if any, certain expenses of issue, sale, or redemption, charges of
custodians (for custodial, bookkeeping and daily pricing services),
administrative costs, and costs of auditing and legal services.
Investment advisory fees and brokerage commissions or fees relating to
securities transactions are paid by the Account.
The Sales Agreement was last approved on February 9, 1995 by the
Members of the Account's Management Committee who are not interested
persons (as defined in the Investment Company Act of 1940) of the Account
or of First Priority and who have no financial interest in the operation
of the Sales Agreement. The Sales Agreement will continue from year to
year, provided the Management Committee, including Members who are not
interested persons, approve such continuance annually.
Portfolio Transactions
First Priority makes decisions as to buying and selling investment
securities for the Account, subject to supervision by the Account's
Management Committee. The Account's portfolio securities normally will be
purchased on a principal basis directly from issuers, underwriters or
dealers. Accordingly, minimal brokerage charges and mark-ups, if any, are
expected to be paid by the Account on its portfolio transactions.
Purchases from an underwriter generally include a commission or concession
paid by the issuer, and transactions with dealers usually include a
dealer's mark-up. During 1993, 1994 and 1995, no brokerage commissions
were incurred on behalf of the Account.
In placing orders for the purchase and sale of the Account's
investment securities, First Priority seeks the best execution at the most
favorable price, considering all of the circumstances. First Priority
does not pay for research or other services through the use of concessions
or mark-ups charged by underwriters or dealers in a principal (including
riskless principal) capacity. Both the relatively low level of assets in
the Account and the Account's investment objective and policies serve to
limit the Account to investment in United States government securities and
commercial paper with maturities of less than one year. To accomplish the
necessary portfolio transactions thereby, First Priority, through its
Service Agreement with MBL Life, has access to financial statements of
those issuers, brokers and dealers with which the Account executes
portfolio transactions. In addition, at no cost to First Priority or the
Account, First Priority has access to a variety of publications which
monitor the financial condition of issuers, brokers and dealers, thereby
enabling a review of each individually. During the past year, no
transactions occurred in which furnishing of research was a factor in the
selection of dealers. No payment was allocated for any products or
services providing a research or non-research function. First Priority
does not "pay up" for research in principal transactions.
Securities purchased for the portfolio of the Account are not
normally made contemporaneously with purchases for other accounts managed
by First Priority or MBL Life. In light of the Service Agreement among
First Priority, MBL Life, and the Account, under which MBL Life furnishes,
through its Securities Investment Division, investment advisory and other
personnel, research and statistical facilities, and services required by
First Priority in connection with its performance under the Investment
Advisory Agreement, such investment advisory personnel serve as advisers
to the MBL Life general account and other accounts that may or may not be
registered investment companies. Securities of the same issuer may be
included, from time to time, in the portfolio of the Account and the
portfolios of these other entities where it is consistent with their
respective investment objectives. Because of the difficulty in purchasing
commercial paper in small sizes, when commercial paper is bought in large
denominations for the general portfolio of MBL Life, First Priority will
from time to time request the seller to issue the commercial paper in
smaller denominations for the Account, but at a higher rate as if it were
purchased in the larger denomination. Not all sellers provide this
service. As of December 31, 1995, the Account was almost fully invested
in government securities with a small amount of cash on hand to meet
redemptions,
Bankers Trust Company New Jersey Limited, 34 Exchange Place, Jersey
City, New Jersey 07302, is the Custodian of the portfolio securities of
the Account. Due to the nature and duration of securities purchased by
Adviser for the Account, most of the securities purchased are held by the
Depository Trust Company or through the Book-Entry System of the Federal
Reserve Bank.
PURCHASE AND PRICING OF SECURITIES
Purchase
Sales of new Contracts ceased July 16, 1991. MBL Life will not
resume sales of new Contracts.
A description of the flexible purchase payment arrangements is
described in the Account's Prospectus under "Accumulation Account-Purchase
Payments".
Pricing
Net Purchase Payments are allocated to a Participant's Variable
Accumulation Account under the Contract and are applied to purchase
Variable Accumulation Units. The method of calculating the Variable
Accumulation Unit and the Net Investment Factor is described in the
Account's Prospectus, "Accumulation Account-Variable Accumulation
Account", and may be illustrated by the following hypothetical example.
Assume that July 1st and July 2nd of some year are both valuation
dates and that the value of the Account as of the close of regular trading
on the New York Stock Exchange on July 1 was $2,000,000 and the Variable
Accumulation Unit value was $10.291111. Also, assume that on July 2 there
was investment income of $600, no realized or unrealized capital gains,
and the daily charge for expenses and expense risk and investment
management was $40. The Variable Accumulation Unit value for July 2nd
would be determined as follows:
(a) Account value at close of day, July 1 $2,000,000
(b) Variable Accumulation Unit value for July 1 $10.291111
(c) Investment Income, July 2 $ 600
(d) Realized and unrealized capital gains, July 2 $ 0
(e) Daily accrual for expenses and expense
risk charge and investment advisory fee *** $ 40
(f) Account value at close of day, July 2,
excluding any new purchase payments or
redemption (a) + (c) + (d) - (e) $2,000,560
(g) Net Investment Factor (f) divided by (a) $1.0002800
(h) Variable Accumulation Unit value for
July 2 (b) x (g) $10.293992
The Variable Accumulation Unit is calculated as of the end of each
valuation date, which is a day when the New York Stock Exchange is open
for trading. The New York Stock Exchange is normally closed on the
following days: New Year's Day (January 1), Washington's Birthday (third
Monday in February), Good Friday (a variable date between March 20 and
April 23, both inclusive), Memorial Day (last Monday in May), Independence
Day (July 4), Labor Day (first Monday in September), Election Day (first
Tuesday following first Monday in November), Thanksgiving Day (fourth
Thursday in November), and Christmas Day (December 25). In the event that
any of the holidays falls on Sunday, it is regularly observed on the
following Monday.
______________________________
*** Prior to the Transfer, Mutual Benefit Life ceased assessment of the
expense and expense risk charge and assumed payment of the investment
advisory fee. MBL Life has voluntarily continued to waive the expense and
expense risk charge and to assume payment of the investment advisory fee
for an additional one-year period, but reserves the right to reinstate
assessment of the expense and expense risk charge and cease assumption of
payment of the investment advisory fee at the expiration of such period.
CALCULATION OF PERFORMANCE DATA
The Account's yield is its investment income, less expenses,
expressed as a percentage of assets on an annualized basis for a specified
period. The yield is expressed as a current annualized yield and as a
compounded effective yield. From time to time, it may be quoted in sales
literature, advertisements and reports.
The yield is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account
having a balance of one Accumulation Unit of the Account at the beginning
of the period, and dividing the difference by the value of the Account at
the beginning of the base period to obtain the base period return, and
then multiplying the base period return by (365/7) with the resulting
yield figure carried to at least the nearest hundredth of one percent.
The effective yield is computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
Account having a balance of one Accumulation Unit of the Account at the
beginning of the period, subtracting a hypothetical charge reflecting
deductions from Participant Accounts, and dividing the difference by the
value of the Account at the beginning of the base period to obtain the
base period return, and then compounding the base period return by adding
1, raising the sum to a power equal to 365 divided by 7, and subtracting 1
from the result, according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1) *(365/7)] - 1;
with the resulting effective yield figure carried to at least the nearest
hundredth of one percent. The effective yield assumes that any income
earned by an investment is reinvested in the Account. The effective yield
is slightly higher than the yield because of the compounding effect of
this assumed reinvestment.
The yield and effective yield illustrated do not include an expense
charge and expense risk charge at an annual rate of 0.35% and 0.02%,
respectively, of the Account's assets, premium taxes of up to 3.5% in
those jurisdictions which apply such a tax, and an investment advisory fee
at the annual rate of .40% of the first $300,000,000 of the Account's
average daily net assets, .35% of the next $400,000,000 of the Account's
average daily net assets and .30% of the Account's average daily net
assets in excess of $700,000,000. There are no sales charges or
redemption charges incurred upon a partial or total redemption from the
Account. Such charges and fees, if included, would reduce the yield and
effective yield.
Prior to the Transfer, Mutual Benefit Life ceased assessment of
expense and expense risk charges against the Account's assets and assumed
payment of the investment advisory fee. MBL Life has stated that it will
continue to assume payment of the investment advisory fee for additional
one-year periods, but reserves the right to reinstate the assessment of
the expenses and expense risk charge and cease assumption of payment of
the investment advisory fee at the expiration of any waiver period.
Although the calculation of yield does not recognize any realized or
unrealized gains or losses on the Account's investments, the dividends
paid during a period will include any realized gains or losses and,
therefore, may not be the same on an annualized basis as the yield. (See
the Prospectus, "Performance Related Information".)
For the seven-day period ended December 29, 1995, the Account's
"yield" was 6.45% and its "effective yield" was 6.66%.
ADDITIONAL INFORMATION
This Statement of Additional Information, and the Prospectus to which
it relates, omit some information contained in the registration statement
filed with the Securities and Exchange Commission, Washington, D. C.
Copies of such information may be obtained from the Commission upon
payment of the prescribed fees.
FINANCIAL STATEMENTS
The Account incorporates by reference into this Statement of
Additional Information its audited Financial Statements, including the
Financial Highlights, and the Report of Independent Accountants thereon
contained in the 1995 Annual Report to Contract Holders and Participants.
The following financial statements relate to the financial position
and operations of MBL Life. MBL Life's financial statements should be
considered by Contract Holders only as bearing upon the ability of MBL
Life to meet its obligations under the Contract.
Copies of the Account's financial statements are mailed to each
Contract Holder and Participant semiannually. The Account's annual
financial statements are audited by a firm of independent accountants.
The firm of Coopers & Lybrand L.L.P. has been selected to audit the
Account's financial statements for the current fiscal year. The Account
will furnish, without charge, an additional copy of the Account's
Financial Statements (including the accountants report thereon) upon
request made to: Group Pension Operations, MBL Life Assurance Corporation,
520 Broad Street, Newark, New Jersey 07102-3111, Attn: MBL VARIABLE
CONTRACT ACCOUNT-7, telephone number 1-800-435-3191.
[The Account's and MBL Life's financial statements to be filed by
pre-effective amendment.]
<PAGE>
MBL VARIABLE CONTRACT ACCOUNT-7
previously known as
MUTUAL BENEFIT VARIABLE CONTRACT ACCOUNT-7
________________________________________________________________
PART C
OTHER INFORMATION
Item 28. Financial Statements and Exhibits.
+ (a) Financial Statements.
The following financial statements are filed pursuant to Item 27
of Part B of this registration statement:
MBL Variable Contract Account-7:
Report of Independent Accountants.
Statement of Assets and Liabilities, December 31, 1995.*
Statement of Operations (year ended December 31, 1995).*
Statements of Changes in Net Assets (two years ended
December 31, 1995).*
Financial Highlights for Each of the Ten Years in the
Period Ended December 31, 1995.*
MBL Life Assurance Corporation:
Report of Independent Accountants.
Balance Sheet as of December 31, 1995.
Statement of Operations (year ended December 31, 1995).
Statement of Changes in Capital and Surplus
(year ended December 31, 1995).
Statement of Cash Flows (year ended December 31, 1995).
(b) Exhibits **
(1)(A) Resolution of the Board of Directors of Mutual Benefit
Life establishing Mutual Benefit Variable Contract Account-
7, incorporated by reference to earlier filing on September
23, 1983, SEC File No. 2-86722, Exhibit #(1)(c) of Form N-1
Registration Statement of Registrant.
(1)(B) Resolution of the Board of Directors of MBL Life Assurance
Corporation establishing MBL Variable Contract Account-7,
incorporated by reference to earlier filing on April 29,
1994, SEC File No. 811-3853, Exhibit (1)(B) to Amend-ment
No. 12 of Form N-3 Registration Statement.
(2) Rules and Regulations of Mutual Benefit Variable Contract
Account-7, as amended, incorporated by reference to earlier
filing on May 1, 1990, SEC File No. 2-86722, Exhibit (2) to
Post-Effective Amendment No. 7 of Form N-3 Registration
Statement.
(3) Custody Agreement dated September 20, 1991, among Mutual
Benefit Life Insurance Company in Rehabilitation Mutual
Benefit Variable Contract Account-7 and Bankers Trust
Company New Jersey Limited, incorporated by reference to
earlier filing on April 30, 1992, SEC File No. 811-3853,
Exhibit (3) to Amendment No. 10 of Form N-3 Registration
Statement.
(4)(A) Investment Advisory Agreement, dated April 29, 1994 between
Registrant and First Priority Investment Corporation,
incorporated by reference to earlier filing on April 29,
1994, SEC File No. 811-3853, Exhibit (4)(A) to Amendment
No. 12 of Form N-3 Registration Statement.
(4)(B) Service Agreement, dated April 29, 1994 among the
Registrant, First Priority Investment Corporation and MBL
Life Assurance Corporation, incorporated by reference to
earlier filing on April 29, 1994, SEC File No. 811-3853,
Exhibit (4)(B) to Amendment No. 12 of Form N-3 Registration
Statement.
(5) Sales Agreement, dated April 29, 1994 among the Registrant,
MBL Life Assurance Corporation and First Priority
Investment Corporation, incorporated by reference to
earlier filing on April 29, 1994, SEC File No. 811-3853,
Exhibit (5) to Amendment No. 12 of Form N-3 Registration
Statement.
(6)(A) Form of Group Tax Deferred Annuity Contract [403(b) Plans].
(6)(B) Form of Group Tax Deferred Annuity Contract [IRA Plans].
(6)(C) Form of Group Tax Deferred Annuity Contract [HR-10 Plans].
(6)(D) Form of Group Tax Deferred Annuity Contract [457 Plans].
Exhibits (6)(A)-(D) incorporated by reference to earlier
filing on September 23, 1983, SEC File No. 2-86722,
Exhibits #(4)(a)-(d), respectively, of Form N-1
Registration Statement of Registrant.
(6)(E) Form of Group Tax-Deferred Annuity Contract, Individual
Allocation [403(b) Plans].
(6)(F) Form of Group Annuity Deposit Administration Individual
Allocation Companion Contract [403(b) Plans].
(6)(G) Form of First Amendment to Group Variable Annuity
Contracts.
Exhibits (6)(E)-(G) incorporated by reference to earlier
filing on April 28, 1989, SEC File No. 2-86722, Exhibits
#(6)(E)-(G), respectively, of Form N-3 Registration
Statement.
(6)(H) Form of Contract Assumption CRT-AC1.
(6)(I) Form of Certificate Assumption CRT-AA2C.
(6)(J) Form of Certificate of Participation CRT-TDA0.
Exhibits (6)(H)-(J) incorporated by reference to earlier
filing on April 29, 1994, SEC File No. 811-3853, Exhibits
#(6)(H)-(J), respectively, to Amendment No. 12 of Form N-3
Registration Statement.
(7)(A) Form of Application used with Contracts listed in response
to Exhibit (6) above, incorporated by reference to earlier
filing on May 1, 1991, SEC File No. 2-86722, Exhibit (6)(A)
to Post-Effective Amendment No. 8 of Form N-3 Registration
Statement.
(7)(B) Form of Acknowledgment of Statutory TDA Withdrawal
Restrictions, incorporated by reference to earlier filing
on April 28, 1989, SEC File No. 2-86722, Exhibit #(7)(b) of
Form N-3 Registration Statement.
(8)(A) Charter, as amended, of Mutual Benefit Life.
(8)(B) By-Laws, as amended, of Mutual Benefit Life.
Exhibits (8)(A) and (8)(B) incorporated by reference to
earlier filing on May 1, 1991, SEC File No. 2-86722,
Exhibits (8)(A) and (8)(B), respectively, to Post-Effective
Amendment No. 8 of Form N-3 Registration Statement.
(8)(C) Second Amended and Restated Articles of Redomestication and
Incorporation of MBL Life Assurance Corporation.
(8)(D) By-Laws of MBL Life Assurance Corporation.
Exhibits (8)(C) and (8)(D) incorporated by reference to
earlier filing on April 29, 1994, SEC File No. 811-3853,
Exhibits (8)(C) and (8)(D), respectively, to Amendment No.
12 of Form N-3 Registration Statement.
(9) Not applicable.
(10) Not applicable.
+ (11) Report of Coopers & Lybrand L.L.P., Independent
Accountants;
Consent of Coopers & Lybrand L.L.P., Independent
Accountants;
Report of Arthur Andersen LLP, Independent Public
Accountants;
Consent of Arthur Andersen LLP, Independent Public
Accountants;
Report of Ernst & Young LLP, Independent Auditors;
Consent of Ernst & Young LLP, Independent Auditors;
+ (12) Opinion of Frank D. Casciano, General Counsel, MBL Life
Assurance Corporation.
(13) Not applicable.
(14) Not applicable.
(15) Initial Capital Undertaking by Mutual Benefit Life,
incorporated by reference to earlier filing on September
23, 1983, SEC File No. 2-86722, Exhibit #13 of Form N-1
Registration Statement of Registrant.
(16)(A) Schedule of Computation for Yield Quotation.
(16)(B) Schedule of Computation for Effective Yield
Quotation.
(17) Powers of Attorney.
(18) Consent Order to Show Cause with Temporary Restraints of
the Superior Court of New Jersey entered July 16, 1991,
incorporated by reference to earlier filing on April 30,
1992, SEC File No. 811-3853, Exhibit (18) to Amendment No.
10 of Form N-3 Registration Statement.
(19) Mutual Benefit Fund et al. No-Action Letter, dated October
27, 1993, incorporated by reference to earlier filing on
April 29, 1994, SEC File No. 811-3853, Exhibit (19) to
Amendment No. 12 of Form N-3 Registration Statement.
(20) Mutual Benefit Life Insurance Company Information Statement
Plan of Rehabilitation and Related Documents, including the
Confirmation Order, dated January 28, 1994, incorporated by
reference to earlier filing on April 29, 1994, SEC File No.
811-3853, Exhibit (19) to Amendment No. 12 of Form N-3
Registration Statement.
+ (27) Financial Data Schedule.
__________________________________________________________
* Incorporated by reference to the 1995 Annual Report to Contract
Holders and Participants.
** Page numbers inserted in manually signed copy only.
+ To be filed with the Pre-Effective Amendment to the Registrant's
Registration Statement on or about April 1, 1996.
Item 29. Directors and Officers of MBL Life Assurance Corporation.
Pursuant to an Order dated July 16, 1991, entered by the Superior
Court of the State of New Jersey, the Commissioner of Insurance of
the State of New Jersey was appointed as "Rehabilitator" of Mutual
Benefit Life Insurance Company ("Mutual Benefit Life"). The
Rehabilitator was directed to conduct the business of Mutual Benefit
Life. From July 16, 1991 through May 1, 1994, Mutual Benefit Life
did not have a Board of Directors.
As of May 1, 1994, Mutual Benefit Life was transferred to MBL Life
Assurance Corporation ("MBL Life"), pursuant to the Rehabilitation
Plan of Mutual Benefit Life, as approved by the Court on January 28,
1994. MBL Life, as the successor sponsoring life insurance company
of the Registrant, is managed by a Board of Directors.
The Directors of MBL Life, their principal business addresses and
their positions and offices with MBL Life, are as follows:
Name and Principal Position and Offices with
Business Address Sponsoring Insurance Company
Alan J. Bowers Director, President
MBL Life and Chief
520 Broad Street Executive Officer
Newark, New Jersey 07102
Elizabeth E. Randall Director, Chairman
20 W. State Street of the Board
CN-325
Trenton, NJ 08625
Sheldon Brooks Director
The Prudential Asset
Management Company, Inc.
71 Hanover Road
Florham Park, NJ 07932
Donald Bryan Director
20 W. State Street
CN-325
Trenton, NJ 08625
Harry D. Garber Director
76 Mulberry Avenue
Garden City, NY 11530
John C. Kerr, Jr. Director
20 W. State Street
CN-325
Trenton, NJ 08625
Richard W. Klipstein Director
National Organization of
Life and Health Insurance
Guaranty Association
13873 Park Center Road
Herndon, VA 22071
Karen E. Mitchell Director
20 W. State Street
CN-325
Trenton, NJ 08625
Robert F. Pellecchia Director
20 W. State Street
CN-325
Trenton, NJ 08625
Felix Schirripa Director
The Metropolitan Life
Insurance Company
One Madison Avenue
New York, NY 10010-3690
___________________________________
Officers (Other than Directors) of MBL Life whose activities relate
to the Account are listed below.
Frank D. Casciano Executive Vice President,
General Counsel and Secretary
Robert T. Budwick Executive Vice President -
Chief Investment Officer
Kenneth A. Watson Executive Vice President
and Chief Financial Officer
Kathleen M. Koerber Executive Vice President -
Chief Operating Officer
Kenneth K. Schaefer Second Vice President
and Treasurer
Walter A. Appel Vice President,
Securities Investment
David A. James Senior Vice President,
Securities Investment
Albert W. Leier Vice President
and Controller
William G. Clark Senior Vice President,
Pension and Investment Products
All of these Officers maintain a principal business address at 520
Broad Street, Newark, New Jersey 07102.
Prior to May 1, 1994 each officer named above maintained a similar
position and/or title with Mutual Benefit Life.
Item 30. Persons Controlled by or Under Common Control with
the Sponsoring Insurance Company or Registrant.
Mutual Benefit Variable Contract Account-7 was formerly a separate
account of Mutual Benefit Life. As described above and in accordance
with the Rehabilitation Plan of Mutual Benefit Life, the assets and
liabilities of Mutual Benefit Variable Contract Account-7 were
transferred to a separate account of MBL Life.
The Account is a separate account of MBL Life, a stock life insurance
company organized under the laws of New Jersey. The voting stock of
MBL Life was transferred to a Stock Trust established by the
Rehabilitation Plan appointing the Commissioner of Insurance of the
State of New Jersey as Trustee until the end of the Rehabilitation
Period, scheduled for December 31, 1999.
The Account is under the general supervision of a Management
Committee ("Committee").
No person, other than the Trustee, has the direct or indirect power
to control MBL Life except insofar as he or she may have such power
by virtue of his or her capacity as a director.
As of May 1, 1995, those persons under common control with the
sponsoring insurance company (MBL Life) are illustrated by the chart
on the following page. The following information relates to that
chart.
All corporations are organized under the laws of New Jersey except
where a different state is indicated.
The principal business of certain of MBL Life Assurance Corporation's
affiliates are as follows:
MBLLAC Holding Corporation is a holding company; First Priority
Investment Corporation is a registered investment adviser and
broker/dealer; Metro IRB, Inc., Fisher Island Corporation, Pelican
Apartment Properties, Inc. and Metro JV, Inc. act as general partners
in joint ventures; Mutual Benefit Marketing Group Inc. markets
insurance products; EHC Companies, Inc. is a holding company for
Ernst Home Center, Infotech Corp., Extraspace Inc., and EDC, Inc., a
home and garden chain, a data service provider, specialty retail
stores, and a warehousing operation, respectively; and NWD Investment
Company is a holding company for WD Holdings, Inc. a distribution
company; Fisher Island Mortgage Corporation acts as mortgage
originator and holder for residential loans. Markston Investment
Management, a registered investment adviser, is a partnership owned
51 percent by MBL Sales Corporation; Hawaiian Macadamia Company,
Inc., a processing company; Tong Yang Benefit Life Insurance Company,
a foreign insurance company; Outlet Communications Inc. a holding
company for Outlet Broadcasting Inc., a broadcasting company; and
International Corporate Marketing Group, an insurance broker.
The following page contains an organizational diagram of the direct
and indirect subsidiaries of MBL Life and the mutual funds sponsored
by MBL Life. The diagram indicates the state of incorporation for
each entity and the percentage of voting securities controlled by MBL
Life.
MAP-Equity Fund, MBL Growth Fund, Inc. and MAP-Government Fund, Inc.
are investment companies as defined by the Investment Company Act of
1940 (the "Act"). First Priority Investment Corporation ("First
Priority"), a wholly-owned indirect subsidiary of the Depositor,
serves as distributor for the shares of both MAP-Equity Fund and MBL
Growth Fund, Inc. Markston Investment Management, a partnership
between Markston International, Inc. and MBL Sales Corporation,
serves as investment adviser to MAP-Equity Fund and MBL Growth Fund,
Inc. Shares of MBL Growth Fund, Inc. may be purchased only by
separate accounts which are registered under the Investment Company
Act of 1940. First Priority also serves as distri-butor and
investment adviser for MAP-Government Fund, Inc. The Funds file
separate financial statements. Ernst Home Centers, Inc. and First
Priority file independent financial statements with the Securities
and Exchange Commission.
As of January 2, 1996 Participants under the Long Island Jewish
Medical Center 403(b) Plan, New Hyde Park, New York, owned 42.79%
percent of the outstanding Variable Accumulation Units of the
Account. Registrant does not believe that this degree of ownership
constitutes an exercise of control over the activities of the
Account, for the following reasons:
(1) The Contract Holder passes its voting rights through to
Participants under the Contract,
(2) Each Participant controls the right to withdraw his or her funds
attributable to Variable Accumulation Units held in the Account, and
(3) The Contract Holder cannot exercise control over the direction
of the Participant interest in the Account.
Item 31. Number of Contract Holders.
As of January 2, 1996: 115
Item 32. Indemnification.
The Account maintains investment errors and omissions insurance ("E &
O") covering each officer and those Management Committee Members who
are not interested persons of the Account. This policy protects
those Committee Members from legal liabilities and expenses which
they may incur as a result of claims for breach of duty, negligent
acts, errors, omissions, misstatements or misleading statements
committed or alleged to have been committed by them in their capacity
as members of the Committee. The policy would also insure the
Account according to the terms and conditions of the policy. The
policy excludes expenses and liabilities based upon, among other
things, any claim alleging dishonesty or fraudulent acts or
omissions, or any criminal or malicious acts or omissions.
The limits on the policy are $2,000,000 each wrongful act and
$2,000,000 aggregate. Notwithstanding any agreement or document to
the contrary, the Account undertakes not to insure any member for any
liability the indemnification of which has been determined to be
prohibited under the federal securities laws.
The Account is the joint owner of the E & O policy with Mutual
Benefit Fund, MBL Growth Fund, Inc. and MAP-Government Fund, Inc.,
and the premiums are allocated based on the proportion of each
entity's net assets to the total net assets of all the joint insured
entities.
The Account also maintains an Investment Companies Blanket Bond
covering the Account against larceny and embezzlement committed by
specified individuals who may have access to funds of the Account.
In addition to the aforementioned E & O insurance and Blanket Bond,
to the extent permitted by law of the State of New Jersey under NJSA
14A:3-5 and subject to all applicable requirements thereof, MBL Life
has undertaken to indemnify each of its officers and each Management
Committee Member, his heirs, executors and administrators, who is
made or threatened to be made a party to any action or proceeding,
whether civil or criminal, by reason of the fact that he is or was an
officer of MBL Life or a Committee Member.
Under the Sales Agreement between the Account and First Priority,
First Priority agrees to indemnify the Account and its Officers and
Committee Members and Controlling Persons from all liabilities and
expenses arising out of certain actual or alleged material
misstatements or other mistakes, negligence or willful misconduct of
First Priority or any of its agents or employees in connection with
sales of the Account's units.
Insofar as indemnification for liability arising under the Act may be
provided to Directors, Officers and Committee Members of the Account
pursuant to the foregoing provisions, or otherwise, MBL Life has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
MBL Life of expenses incurred or paid by a Director, Officer, or
Committee Member of the Account in the successful defense of any
action, suit or proceeding) is asserted by such Director, Officer, or
Committee Member in connection with the securities being registered,
MBL Life will, unless if in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue. Notwithstanding
any agreement or document to the contrary, MBL Life undertakes not to
indemnify any Director, Officer or Committee Member for any
liability, the indemnification of which has been determined to be
prohibited under the Federal securities laws.
Item 33. Business and Other Connections of Investment Adviser.
First Priority is the Registrant's investment adviser. First Priority is
a wholly-owned indirect subsidiary of MBL Life. First Priority also acts
as principal distributor of shares of the Registrant, MBL Growth Fund,
Inc., MAP-Equity Fund, and MAP-Government Fund, Inc., as well as MBL
Variable Contract Account-2 and MBL Variable Contract Account-3, and
engages in the sale of other investment company securities and other
financial products as described in the Prospectus constituting Part A of
this Registration Statement and in the Statement of Additional Information
constituting Part B. The table below sets forth certain information as to
First Priority's directors and officers.
<TABLE>
<CAPTION>
Other Substantial
Business Profession, and
Name and Principal Position with Vocation of Employment
Business Address* First Priority Within Past Two Years
<S> <C> <C>
William G. Clark Director, President Senior Vice President -
Group Pension and Invest-
ment Products, MBL Life.**
Frank D. Casciano Director, Vice Executive Vice President
President and General Counsel and
General Counsel Secretary, MBL Life.**
Robert T. Budwick Director, Vice Executive Vice President
President and Chief Securities Investment,
Investment Officer MBL Life.**
Alan J. Bowers Director President and CEO, MBL Life
since 7/1/95; prior thereto,
Managing Partner, Coopers &
Lybrand L.L.P.
Eugene J. Ciarkowski Director Vice President - Securities
Investment, MBL Life.**
Kathleen M. Koerber Director Executive Vice President
and Chief Operating
Officer, MBL Life.**
Albert W. Leier Director, Vice Vice President and
President and Controller, MBL Life.**
Treasurer
Judith C. Keilp Vice President and Counsel, MBL Life.**
Secretary
Christopher S. Auda Vice President, Vice President, Operations,
Operations First Priority.
James Switlyk Second Vice President Second Vice President,
Marketing Support Marketing Support,
First Priority.
Roger A. Vellekamp Assistant Secretary Second Vice President -
Tax, MBL Life. **
</TABLE>
_______________________________
* All of the Officers and Directors named maintain a principal business
address at 520 Broad Street, Newark, New Jersey 07102-3111.
** Prior to May 1, 1994 each officer named maintained a similar position
and/or title with Mutual Benefit Life.
Item 34. Principal Underwriter.
(a) First Priority, the Account's principal underwriter, pursuant to
a Sales Agreement, serves as principal underwriter for the
following registered investment companies: MAP-Equity Fund, MBL
Growth Fund, Inc., and MAP-Government Fund, Inc., and for the
following unit investment trusts: MBL Variable Contract Account-
2 and MBL Variable Contract Account-3, each a separate account
of MBL Life.
First Priority also serves as the investment adviser to MAP-
Government Fund, Inc.
(b) Information regarding First Priority's officers and directors:
See Item 33 above.
(c) Not applicable.
Item 35. Location of Accounts and Books.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained at the offices of the Account and the
Account's Custodian, Bankers Trust Company New Jersey Limited, 34
Exchange Place, Jersey City, New Jersey 07302.
Item 36. Management Services.
Other than as set forth under the caption "Investment Management" in
the Prospectus, as amended, constituting Part A of this Registration
Statement, and under "Investment Advisory and Other Services" in the
Statement of Additional Information constituting Part B, the Account
is not a party to any management-related service contract.
Item 37. Undertakings.
(a) Not applicable.
(b) Registrant undertakes to file a post-effective amendment to its
Securities Act of 1933 Registration Statement as frequently as
necessary to ensure that the audited financial statements in the
Registration Statement are never more than 16 months old for so
long as payments under the variable annuity contracts may be
accepted.
(c) Registrant undertakes to include either (1) as part of any
application to purchase a contract offered by the Prospectus, a
space that an applicant can check to request a Statement of
Additional Information, or (2) a post card or similar written
communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional
Information.
(d) Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made
available under this form promptly upon written or oral request.
(e) Registrant undertakes to rely upon American Council of Life
Insurance (Ref. No. IP-6-88, pub. avail. November 28, 1988) (the
"Letter"), which permits restrictions on cash distributions to
Participants in retirement plans meeting the requirements of
Section 403(b) of the Internal Revenue Code of 1986, and
represents that the following provisions of the Letter have been
complied with:
(1) That the Account has included appropriate disclosure
regarding the redemption restrictions imposed by Section
403(b)(11) in this registration statement, including the
prospectus;
(2) That the Account has included appropriate disclosure
regarding the redemption restrictions imposed by Section
403(b)(11) in all sales literature used in connection with
the offer of the Contract;
(3) That the Account's Distributor has instructed sales
representatives, who solicit Participants to purchase the
Contract, specifically to bring the redemption restrictions
imposed by Section 403(b)(11) to the attention of potential
Participants;
(4) That the Account has obtained from each Participant
purchasing a Section 403(b) Contract, prior to or at the
time of purchase, a signed statement acknowledging the
Participant's understanding of: (a) The restrictions on
redemption imposed by Section 403(b)(11), and (b) The
investment alternatives available under the employer's
Section 403(b) arrangement to which the Participant may
elect to transfer his or her Contract value.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this Registration Statement to be
signed on its behalf, in the City of Newark, and State of New Jersey, on
the 2nd day of February, 1996.
MBL VARIABLE CONTRACT ACCOUNT-7
(Registrant)
By: JUDITH C. KEILP
Judith C. Keilp
Secretary of the Management Committee
of MBL Variable Contract Account-7
As required by the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated.
MBL VARIABLE CONTRACT ACCOUNT-7
Signature Title Date
DAVID A. JAMES Chairman, February 2, 1996
David A. James Member
GORDON BOYD Member February 2, 1996
Gordon Boyd
WILLIAM G. CLARK Member February 2, 1996
William G. Clark
JOSEPH LINDNER, JR. Member February 2, 1996
Joseph Lindner, Jr.
JEROME M. SCHECKMAN Member February 2, 1996
Jerome M. Scheckman
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Act of
1940, the Sponsoring Insurance Company has caused this Registration
Statement to be signed on its behalf, in the City of Newark, and State of
New Jersey, on the 16 day of February, 1996.
By: MBL Life Assurance Corporation
(Sponsoring Insurance Company)
By: FRANK D. CASCIANO
Frank D. Casciano
Executive Vice President,
General Counsel and Secretary
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and
on the dates indicated.
ALAN J. BOWERS Chief Executive Officer February 16, 1996
Alan J. Bowers Director, President
KENNETH A. WATSON Chief Financial Officer February 16, 1996
Kenneth A. Watson
ALBERT W. LEIER Chief Accounting February 16, 1996
Albert W. Leier Officer
Directors:
Elizabeth E. Randall
Sheldon Brooks*
Donald Bryan*
Harry D. Garber*
John Kerr*
Richard W. Klipstein*
Karen E. Mitchell
Robert F. Pellecchia
Felix Schirripa
By: FRANK D. CASCIANO Date: February 16, 1996
Frank D. Casciano
Attorney-in-Fact
* Executed by Frank D. Casciano, Attorney-in-Fact, on behalf of those
indicated pursuant to the Powers of Attorney, filed herewith.
<PAGE>
EXHIBIT INDEX*
Exhibit (16)(A) Schedule of Computation for Yield Quotation.
Exhibit (16)(B) Schedule of Computation for Effective Yield Quotation.
Exhibit (17) Powers of Attorney.
* Pages numbers inserted in manually signed copy only.
Exhibits (16)(A) & (B)
MBL Variable Contract Account-7
Item: 28(b)(16)(A) Schedule of Computation for Yield Quotation
Unit Unit Unit Base
Value - Value = Net Value = Period X 365/7 = 7-Day
12/29/95 12/22/95 Change / 12/22/95 Return Yield
$17.799 $17.777 .022 / $17.777 .001238 = 6.45%
Item: 28(b)(16)(B) Schedule of Computation for Effective
Yield Quotation
Effective Yield = [(Base Period Return + 1)365/7] - 1
= [(.001238 + 1)365/7] - 1
= 6.66%
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
SHELDON BROOKS Director February 2, 1996
Sheldon Brooks
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
DONALD BRYAN Director February 1, 1996
Donald Bryan
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
HARRY D. GARBER Director January 31, 1996
Harry D. Garber
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
JOHN C. KERR, JR. Director January 30, 1996
John C. Kerr, Jr.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
RICHARD W. KLIPSTEIN Director February 8, 1996
Richard W. Klipstein
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints Alan J. Bowers, Frank D. Casciano,
Kathleen M. Koerber, and Kenneth A. Watson, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign the Registration Statement and any and all amendments
to the Registration Statement for MBL Variable Contract Account-7 and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
FELIX SCHIRRIPA Director January 30, 1996
Felix Schirripa
