Dear Policyowner:
Despite some recent volatility, the U.S. stock market continued its strong
performance in the first half of 1996. Results for the first six months of 1996
in the subaccounts of the MEMBERS(R) Variable Universal Life are shown below:
Percent increase
in Unit Value from
Subaccount 12/31/95 through 6/30/96
- --------------------------------------------------------------------
Capital Appreciation Stock 9.4%
Growth and Income Stock 7.1%
Balanced 2.7%
Bond - 2.4%
Money Market 2.0%
Treasury 2000 - 2.6%
International Stock 8.6%
World Governments - 1.1%
- --------------------------------------------------------------------
Emerging Growth..................n/a - added subaccount on 5/1/96
- --------------------------------------------------------------------
This booklet is divided into several sections. Each section contains the
semiannual report for a component of MEMBERS(R) Variable Universal Life. The
first section contains the following reports for the Century Variable Account:
Statement of Assets and Liabilities..............................page 2
Statement of Operations..........................................page 4
Statement of Changes in Net Assets...............................page 7
Notes to the Financial Statements................................page 10
The Century Variable Account invests in mutual funds. The results shown reflect
the deduction of the separate account level charges. Returns at the subaccount
level shown above are slightly lower than the returns at the mutual fund level
as a result of these charges.
The remaining sections of this booklet cover the mutual funds. The second
section contains the report for the Ultra Series Fund which includes the Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund, Bond Fund,
Money Market Fund, and the Treasury 2000 Fund. The third section is the report
for the International Stock Portfolio of the T. Rowe Price International Series,
Inc., and the last section has the financial information and results for the
MFS(R) World Governments Series and the MFS(R) Emerging Growth Series of the
MFS(R) Variable Insurance TrustSM.
We appreciate your confidence in our company and its products. Please keep in
mind that strong markets like the one we have seen over the last 18 months are
often followed by periods of slower growth or even temporary declines. We
continue to believe that your MEMBERS(R) Variable Universal Life policy is a
great way to cover your life insurance needs while participating in the long
term growth potential of mutual fund investing.
Sincerely,
/s/ Michael B. Kitchen
Michael B. Kitchen
President and Chief Executive Officer
Century Life of America
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Capital
Appreciation Growth and Money
Stock Income Stock Balanced Bond Market
Assets: Subaccount Subaccount Subaccount Subaccount Subaccount
Investments in Ultra Series Fund:
(note 2)
<S> <C> <C> <C> <C> <C>
Capital Appreciation Stock Fund,
917,659 shares at net asset value of
$13.72 per share (cost $10,528,264) $12,586,611 $ -- $ -- $ -- $ --
Growth and Income Stock Fund,
2,071,493 shares at net asset value
of $19.48 per share (cost $32,810,557) -- 40,349,778 -- -- --
Balanced Fund, 3,283,098 shares
at net asset value of $14.94
per share (cost $43,868,132) -- -- 49,052,247 -- --
Bond Fund, 248,817 shares
at net asset value of $10.28
per share (cost $2,545,130) -- -- -- 2,558,197 --
Money Market Fund, 1,566,224
shares at net asset value of $1.00
per share (cost $1,566,224) -- -- -- -- 1,566,224
Dividends receivable -- -- -- -- --
----------- ----------- ----------- ---------- ----------
Total assets 12,586,611 40,349,778 49,052,247 2,558,197 1,566,224
----------- ----------- ----------- ---------- ----------
Liabilities:
Accrued adverse mortality and
expense charges 27,257 87,763 110,285 5,699 3,253
----------- ----------- ----------- ---------- ----------
Total liabilities 27,257 87,763 110,285 5,699 3,253
----------- ----------- ----------- ---------- ----------
Net assets $12,559,354 $40,262,015 $48,941,962 $2,552,498 $1,562,971
=========== =========== =========== ========== ==========
Units outstanding (note 5) 847,598 986,556 1,566,775 107,418 89,874
=========== =========== =========== ========== ==========
Net asset value per unit 14.82 40.81 31.24 23.76 17.39
=========== =========== =========== ========== ==========
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Treasury International World Emerging
2000 Stock Governments Growth
Assets: Subaccount Subaccount Subaccount Subaccount*
<S> <C> <C> <C> <C>
Investments in Ultra Series Fund:
(note 2)
Treasury 2000 Fund, 182,546
shares at net asset value of $8.28
per share (cost $1,273,177) $1,510,585 $ -- $ -- $ --
Investments in T. Rowe Price
International Fund, Inc.:
International Stock Portfolio,
134,902 shares at net asset value of
$12.17 per share (cost $1,532,237) -- 1,641,766 -- --
Investments in MFSAE Variable Insurance TrustSM:
World Governments Series,
25,271 shares at net asset value of
$10.10 per share (cost $263,072) -- -- 255,243 --
Investments in MFSAE Variable Insurance TrustSM:
Emerging Growth Series,
31,627 shares at net asset value of
$13.13 per share (cost $417,313) -- -- -- 415,269
Dividends receivable -- -- -- --
---------- ---------- -------- --------
Total assets 1,510,585 1,641,766 255,243 415,269
--------
---------- ---------- -------- --------
Liabilities:
Accrued adverse mortality and
expense charges 7,888 3,076 548 314
---------- ---------- -------- --------
Total liabilities 7,888 3,076 548 314
---------- ---------- -------- --------
Net assets $1,502,697 $1,638,690 $254,695 $414,955
========== ========== ======== ========
Units outstanding (note 5) 194,133 142,226 22,617 41,557
========== ========== ======== ========
Net asset value per unit 7.74 1.52 11.26 9.99
========== ========== ======== ========
See accompanying notes to financial statements.
*The data is for the period beginning May 1, 1996 (date of initial activity).
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Operations
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK SUBACCOUNT GROWTH AND INCOME STOCK SUBACCOUNT
Investment income (loss): 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Dividend income $ 24,880 $ 349,394 $ 316,311 $ 213,752 $ 2,783,538 $ 920,420
Adverse mortality and expense charges
(note 3) (49,453) (67,332) (37,923) (168,691) (253,958) (178,836)
----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss) (24,573) 282,062 278,388 45,061 2,529,580 741,584
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 166,796 2,737,741 128,916 709,251 1,138,163 1,347,896
Cost of securities sold (137,442) (2,416,409) (126,278) (580,798) (985,297) (1,257,775)
----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) on security
transactions 29,354 321,332 2,638 128,453 152,866 90,121
Net change in unrealized appreciation
or depreciation on investments 868,826 1,332,754 (143,233) 2,351,397 4,764,093 (762,308)
----------- ----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments 898,180 1,654,086 (140,595) 2,479,850 4,916,959 (672,187)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations $ 873,607 $ 1,936,148 $ 137,793 $ 2,524,911 $ 7,446,539 $ 69,397
=========== =========== =========== =========== =========== ===========
BALANCED SUBACCOUNT BOND SUBACCOUNT
Investment income (loss): 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
Dividend income $ 490,543 $ 3,308,296 $ 1,934,706 $ 33,595 $ 218,461 $ 198,871
Adverse mortality and expense charges
(note 3) (216,920) (375,225) (311,308) (12,614) (33,879) (30,732)
----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss) 273,623 2,933,071 1,623,398 20,981 184,582 168,139
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 1,850,937 2,989,211 2,663,000 1,387,126 885,596 498,842
Cost of securities sold (6,653,009) (2,732,488) (2,563,542) (1,339,388) (865,874) (495,991)
----------- ----------- ----------- ----------- ----------- -----------
Net realized gain (loss) on security
transactions 197,928 256,723 99,458 47,738 19,722 2,851
Net change in unrealized appreciation
or depreciation on investments 796,239 4,759,298 (2,193,746) (133,114) 326,701 (308,510)
----------- ----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments 994,167 5,016,021 (2,094,288) (85,376) 346,423 (305,659)
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations $ 1,267,790 $ 7,949,092 $ (470,890) $ (64,395) $ 531,005 $ (137,520)
=========== =========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Operations
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
MONEY MARKET SUBACCOUNT TREASURY 2000 SUBACCOUNT
Investment income (loss): 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Dividend income $ 43,792 $ 116,648 $ 75,538 $ -- $ 105,588 $ 96,836
Adverse mortality and expense charges
(note 3) (8,238) (20,105) (19,253) (6,800) (12,710) (11,586)
----------- ----------- ----------- -------- --------- ---------
Net investment income (loss) 35,554 96,543 56,285 (6,800) 92,878 85,250
----------- ----------- ----------- -------- --------- ---------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 2,713,956 2,670,224 1,549,906 -- -- --
Cost of securities sold (2,713,956) (2,670,224) (1,549,906) -- -- --
----------- ----------- ----------- -------- --------- ---------
Net realized gain (loss) on security
transactions -- -- -- -- -- --
Net change in unrealized appreciation
or depreciation on investments -- -- -- (34,743) 161,453 (193,888)
----------- ----------- ----------- -------- --------- ---------
Net gain (loss) on investments -- -- -- (34,743) 161,453 (193,888)
----------- ----------- ----------- -------- --------- ---------
Net increase (decrease) in net assets
resulting from operations $ 35,554 $ 96,543 $ 56,285 ($41,543) $ 254,331 ($108,638)
=========== =========== =========== ======== ========= =========
INTERNATIONAL STOCK SUBACCOUNT WORLD GOVERNMENTS SUBACCOUNT
Investment income (loss): 1996 1995 1996 1995
-------- -------- -------- --------
Dividend income $ 7,617 $ -- $ -- $ 19,972
Adverse mortality and expense
charges (note 3) (5,186) (1,492) (1,055) (1,176)
-------- -------- -------- --------
Net investment income (loss) 2,431 (1,492) (1,055) 18,796
-------- -------- -------- --------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 38,070 17,033 24,596 19,161
Cost of securities sold (36,209) (17,004) (25,654) (18,440)
-------- -------- -------- --------
Net realized gain (loss) on security
transactions 1,861 29 (1,058) 721
Net change in unrealized appreciation
or depreciation on investments 87,450 22,078 (150) (7,679)
-------- -------- -------- --------
Net gain (loss) on investments 89,311 22,107 (1,208) (6,958)
-------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations $ 91,742 $ 20,615 $ (2,263) $ 11,838
======== ======== ======== ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Operations
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
EMERGING GROWTH SUBACCOUNT*
Investment income (loss): 1996
Dividend income $ --
Adverse mortality and expense charges
(note 3) (314)
-------
Net investment income (loss) (314)
-------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Proceeds from sale of securities 162
Cost of securities sold (162)
-------
Net realized gain (loss) on security
transactions --
Net change in unrealized appreciation
or depreciation on investments (2,044)
-------
Net gain (loss) on investments (2,044)
-------
Net increase (decrease) in net assets
resulting from operations $(2,358)
=======
See accompanying notes to financial statements.
*The data is for the period beginning May 1, 1996 (date of initial activity).
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Changes in Net Assets
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK SUBACCOUNT GROWTH AND INCOME STOCK SUBACCOUNT
Operations: 1996 1995 1994 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ (24,573) $ 282,062 $ 278,388 $ 45,061 $ 2,529,580 $ 741,584
Net realized gain (loss) on
security transactions 29,354 321,332 2,638 128,453 152,866 90,121
Net change in unrealized appreciation
or depreciation on investments 868,826 1,332,754 (143,233) 2,479,850 4,764,093 (762,308)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
operations 873,607 1,936,148 137,793 2,524,911 7,446,539 69,397
------------ ------------ ------------ ------------ ------------ ------------
Capital unit transactions (note 5):
Proceeds from sale of units 4,117,772 5,340,463 7,013,416 7,255,958 10,831,868 11,317,875
Cost of units repurchased (1,417,790) (4,440,885) (1,001,170) (4,096,707) (6,090,704) (6,776,401)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from capital
unit transactions 2,699,982 899,578 6,012,246 3,159,251 4,741,164 4,541,474
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 3,573,589 2,835,726 6,150,039 5,684,162 12,187,703 4,610,871
Net assets:
Beginning of period 8,985,765 6,150,039 -- 34,577,853 22,390,150 17,779,279
------------ ------------ ------------ ------------ ------------ ------------
End of period $ 12,559,354 $ 8,985,765 $ 6,150,039 $ 40,262,015 $ 34,577,853 $ 22,390,150
============ ============ ============ ============ ============ ============
BALANCED SUBACCOUNT BOND SUBACCOUNT
Operations: 1996 1995 1994 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
Net investment income (loss) $ 273,623 $ 2,933,071 $ 1,623,398 $ 20,981 $ 184,582 $ 168,139
Net realized gain (loss) on
security transactions 197,928 256,723 99,458 47,738 19,722 2,851
Net change in unrealized appreciation
or depreciation on investments 796,239 4,759,298 (2,193,746) (133,114) 326,701 (308,510)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from
operations 1,267,790 7,949,092 (470,890) (64,395) 531,005 (137,520)
------------ ------------ ------------ ------------ ------------ ------------
Capital unit transactions (note 5):
Proceeds from sale of units 6,654,795 11,658,626 12,682,886 385,028 1,036,840 746,339
Cost of units repurchased (5,298,198) (9,247,633) (9,582,319) (1,551,231) (1,180,288) (831,337)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets from capital
unit transactions 1,356,597 2,410,993 3,100,567 (1,166,203) (143,446) (84,998)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 2,624,387 10,360,085 2,629,677 387,559 (222,518)
Net assets:
Beginning of period 46,317,575 35,957,490 33,327,813 3,783,096 3,395,537 3,618,055
------------ ------------ ------------ ------------ ------------ ------------
End of period $ 48,941,962 $ 46,317,575 $ 35,957,490 $ 2,552,498 $ 3,783,096 $ 3,395,537
============ ============ ============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Changes in Net Assets
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
<TABLE>
<CAPTION>
MONEY MARKET SUBACCOUNT TREASURY 2000 SUBACCOUNT
Operations: 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 35,554 $ 96,543 $ 56,285 $ (6,800) $ 92,878 $ 85,250
Net realized gain (loss) on
security transactions -- -- -- -- -- --
Net change in unrealized appreciation
or depreciation on investments -- -- -- (34,743) 161,453 (193,888)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
operations 35,554 96,543 56,285 (41,543) 254,331 (108,638)
----------- ----------- ----------- ----------- ----------- -----------
Capital unit transactions (note 5):
Proceeds from sale of units 2,287,104 2,156,885 2,460,112 383,137 550,180 558,031
Cost of units repurchased (2,893,395) (3,049,819) (1,959,931) (383,137) (531,450) (540,474)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from capital
unit transactions (606,291) (892,934) 500,181 -- 18,730 17,557
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets (570,737) (796,391) 556,466 (41,543) 273,061 (91,081)
Net assets:
Beginning of period 2,133,708 2,930,099 2,373,633 1,544,240 1,271,179 1,362,260
----------- ----------- ----------- ----------- ----------- -----------
End of period $ 1,562,971 $ 2,133,708 $ 2,930,099 $ 1,502,697 $ 1,544,240 $ 1,271,179
=========== =========== =========== =========== =========== ===========
INTERNATIONAL STOCK SUBACCOUNT WORLD GOVERNMENTS SUBACCOUNT
Operations: 1996 1995 1996 1995
----------- --------- --------- ---------
Net investment income (loss) $ 2,431 $ (1,492) $ (1,055) $ 18,796
Net realized gain (loss) on
security transactions 1,861 29 (1,058) 721
Net change in unrealized appreciation
or depreciation on investments 87,450 22,078 (150) (7,679)
----------- --------- --------- ---------
Change in net assets from
operations 91,742 20,615 (2,263) 11,838
----------- --------- --------- ---------
Capital unit transactions (note 5):
Proceeds from sale of units 999,666 825,895 82,760 244,058
Cost of units repurchased (204,924) (94,304) (44,717) (36,981)
----------- --------- --------- ---------
Change in net assets from capital
unit transactions 794,742 731,591 38,043 207,077
----------- --------- --------- ---------
Increase (decrease) in net assets 886,484 752,206 35,780 218,915
Net assets:
Beginning of period 752,206 -- 218,915 --
----------- --------- --------- ---------
End of period $ 1,638,690 $ 752,206 $ 254,695 $ 218,915
=========== ========= ========= =========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
CENTURY VARIABLE ACCOUNT
Statement of Changes in Net Assets
Six Months Ended June 30, 1996 and Years Ended December 31, 1995 and 1994
(Unaudited)
EMERGING GROWTH SUBACCOUNT*
Operations: 1996
Net investment income (loss) $ (314)
Net realized gain (loss) on
security transactions --
Net change in unrealized appreciation
or depreciation on investments (2,044)
---------
Change in net assets from
operations (2,358)
---------
Capital unit transactions (note 5):
Proceeds from sale of units 427,827
Cost of units repurchased (10,514)
---------
Change in net assets from capital
unit transactions 417,313
---------
Increase (decrease) in net assets 414,955
Net assets:
Beginning of period --
---------
End of period $ 414,955
=========
See accompanying notes to financial statements.
*The data is for the period beginning May 1, 1996 (date of initial activity).
<PAGE>
CENTURY VARIABLE ACCOUNT
Notes to Financial Statements
(1) Organization
The Century Variable Account (the Account) is a unit investment trust
registered under the Investment Company Act of 1940 with the Securities and
Exchange Commission. The Account was established as a separate investment
account within Century Life of America to receive and invest net premiums
paid under flexible premium variable life insurance policies.
Although the assets of the Account are the property of Century Life of
America, those assets attributable to the policies are not chargeable with
liabilities arising out of any other business which Century Life of America
may conduct.
The net assets maintained in the Account attributable to the policies
provide the base for the periodic determination of the increased or
decreased benefits under the policies. The net assets may not be less than
the amount required under state insurance law to provide certain death
benefits and other policy benefits. Additional assets are held in Century
Life of America's general account to cover death benefits in excess of the
accumulated value.
(2) Significant Accounting Policies
Investments
The Account currently is divided into eight subaccounts but may, in the
future, include additional subaccounts. Each subaccount invests exclusively
in shares of a single underlying fund. (The term fund is used to mean an
investment portfolio sometimes called a series, i.e., Ultra Series Fund, T.
Rowe Price International Fund, Inc., MFSAE Variable Insurance Trusto, or
any other open-end management investment company or unit investment trust
in which a subaccount invests.) The income, gains and losses, realized or
unrealized, from the assets allocated to each subaccount are credited to or
charged against that subaccount without regard to income, gains or losses
from any other subaccount.
The Account invests in shares of Ultra Series Fund, T. Rowe Price
International Fund, Inc., and MFSAE Variable Insurance Trusto. Each is a
management investment company of the series type with one or more funds.
Each is registered with the SEC as an open-end, management investment
company. Such registration does not involve supervision of the management
or investment practices or policies of the companies or their funds by the
SEC.
Ultra Series Fund currently has six funds available as investment options
under the policies while T. Rowe Price International Fund, Inc., has one
and MFSAE Variable Insurance Trusto has two funds available as an
investment option. MFSAE Variable Insurance Trusto also has other funds
that are not available under the policies. These fund companies may, in the
future, create additional funds that may or may not be available as
investment options under the policies. Each fund has its own investment
objectives and the income, gains, and losses for each fund are determined
separately for that fund.
Century Investment Management Co. (CIMCO) serves as the investment advisor
to the Ultra Series Fund and manages its assets in accordance with general
policies and guidelines established by the board of trustees of the Ultra
Series Fund. The Company owns one half of CIMCO's outstanding stock and one
half is owned indirectly by CUNA Mutual Insurance Society.
Rowe Price-Fleming International, Inc. (RPFI) serves as the Investment
Advisor to the International Stock Portfolio and manages its assets in
accordance with general policies and guidelines established by the board of
directors of T. Rowe Price International Fund, Inc. RPFI was founded in
1979 as a joint venture between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited.
Massachusetts Financial Services Company (MFS) serves as the Investment
Advisor to the MFS World Governments Series and Emerging Growth Series and
manages its assets in accordance with general policies and guidelines
established by the board of trustees of MFSAE Variable Insurance Trusto.
MFS is a subsidiary of Sun Life Assurance Company of Canada (U.S.) which,
in turn, is a subsidiary of Sun Life Assurance Company of Canada.
The assets of each fund are held separate from the assets of the other
funds, and each fund is offered at a price equal to its respective net
asset value per share, without sales charge. Dividends and capital gain
distributions from each fund are reinvested in that fund. Investments in
shares of the Funds are stated at market value which is the net asset value
per share as determined by the Funds. Realized gains and losses from
security transactions are reported on an average cost basis.
Dividend income is recorded on the ex-dividend date.
Federal Income Taxes
The operations of the Account form a part of the operations of Century Life
of America and are not taxed separately. Century Life of America does not
initially expect to incur any income tax upon the earnings or the realized
capital gains attributable to the Account. Accordingly, no charge for
income tax is currently being made to the Account. If such taxes are
incurred by Century Life of America in the future, a charge to the Account
may be assessed.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
(3) Fees and Charges
Organization Costs
Century Life of America absorbed all organization expenses of the Account.
Policy Charges
In addition to charges for state taxes, which reduce premiums prior to the
allocation of net premiums to the subaccounts of the Account, the following
charges may be deducted by Century Life of America by redeeming an
appropriate number of units for each policy.
Administrative Fee: Century Life of America will have primary
responsibility for the administration of the Account and the policies
issued. As reimbursement for these expenses, Century Life of America may
assess each policy a monthly administrative fee. For additional detail, see
schedule of expenses and charges in the prospectus.
Deferred Contingent Sales and Administrative Charges: The sales and
administrative expenses incurred when a Policy is issued are deferred
(Deferred Charges) until the Policy is surrendered. Such charges are not
collected at all if the Policy is held for nine years, or if the Insured
dies during that period. In no instance will the charge exceed 30 percent
of the lesser of premiums paid or the Guideline Annual Premium (as defined
under the Investment Company Act of 1940) of the policy. The Deferred
Charges are normally built up in twelve equal increments during the first
policy year. Beginning on the second Policy Anniversary, incremental
amounts are released by allocations back to the subaccounts on each
anniversary until the tenth Policy Anniversary when all remaining Deferred
Charges are released. All amounts in the Deferred Charges Account are held
and interest credited to the Policy at a minimum rate of 4 percent with the
Company crediting additional amounts at its discretion.
Policy Fee: Century Life of America will incur first-year expenses upon
issue of a policy, and will assess each policy a monthly policy fee to
recover these expenses.
Cost of Insurance and Additional Benefits Provided: Century Life of America
will assume the responsibility for providing the insurance benefits
provided in the policy. The cost of insurance will be determined each month
based upon the applicable cost of insurance rates and the net amount at
risk. The cost of insurance can vary from month to month since the
determination of both the insurance rate and the net amount at risk depends
upon a number of variables as described in the Account's prospectus.
Variable Account Charges
Mortality and Expense Risk Charge: Century Life of America will deduct
daily a mortality and expense risk charge from the account at an annual
rate of .90 percent of the average daily net asset value of the Account.
These charges will be deducted by Century Life of America in return for its
assumption of risks associated with adverse mortality experience or excess
administrative expenses in connection with policies issued.
(4) Investment Transactions
The cost of shares purchased, including reinvestment of dividend
distributions, during the six months ended June 30, 1996, was as follows:
Growth and Income Stock Fund...................................$4,033,970
Capital Appreciation Stock Fund................................ 2,898,202
Balanced Fund.................................................. 3,579,354
Bond Fund...................................................... 254,056
Money Market Fund.............................................. 2,181,456
Treasury 2000 Fund............................................. --
International Stock Portfolio.................................. 845,191
World Governments Series....................................... 64,507
Emerging Growth*............................................... 417,476
----------
$14,274,392
==========
*The data is for the period beginning May 1, 1996 (date of initial activity).
<PAGE>
(5) Unit Activity from Contract Transactions
Transactions in units of each subaccount of the Account for the years ended
December 31, 1995, 1994, and 1993 and for the six-month period ended June
30, 1996 were as follows:
<TABLE>
<CAPTION>
Capital
Appreciation Growth and Money
Stock Income Stock Balanced Bond Market
Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1993 -- 612,819 1,310,167 164,733 149,181
Units sold 684,909 385,948 502,048 34,868 152,172
Units repurchased (96,408) (230,900) (379,178) (38,726) (121,966)
-------- -------- --------- -------- --------
Units outstanding at
December 31, 1994 588,501 767,867 1,433,037 160,875 179,387
Units sold 437,510 320,880 420,975 45,571 129,950
Units repurchased (362,742) (180,926) (331,119) (51,065) (184,225)
-------- -------- --------- ------- --------
Units outstanding at
December 31, 1995 663,269 907,821 1,522,893 155,381 125,112
Units sold 281,135 181,446 214,354 16,114 133,254
Units repurchased (96,806) (102,711) (170,472) (64,077) (168,492)
-------- -------- --------- ------- --------
Units outstanding at
June 30, 1996 847,598 986,556 1,566,775 107,418 89,874
======== ======== ========= ======= ========
Treasury International World Emerging
2000 Stock Governments Gowth
Subaccount Subaccount Subaccount Subaccount*
Units outstanding at
December 31, 1993 189,107 -- -- --
Units sold 82,063 -- -- --
Units repurchased (79,423) -- -- --
-------- -------- --------- --------
Units outstanding at
December 31, 1994 191,747 -- -- --
Units sold 74,132 80,023 22,558 --
Units repurchased (71,746) (9,147) (3,339) --
-------- -------- --------- -------
Units outstanding at
December 31, 1995 194,133 70,876 19,219 --
Units sold 49,045 89,758 7,393 42,596
Units repurchased (49,045) (18,408) (3,995) (1,039)
-------- -------- --------- -------
Units outstanding at
June 30, 1996 194,133 142,226 22,617 41,557
======== ======== ========= =======
*The data is for the period beginning May 1, 1996 (date of initial activity).
</TABLE>
(6) Condensed Financial Information
The table below gives per unit information about the financial history of
each subaccount for each period.
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK SUBACCOUNT GROWTH AND INCOME STOCK SUBACCOUNT
1996 1995 1994 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $13.55 $10.45 $10.00 $38.09 $29.16 $29.01 $25.73 $24.11
End of period 14.82 13.55 10.45 40.81 38.09 29.16 29.01 25.73
Percentage increase
in unit value
during period* 9.4% 29.7% 4.5% 7.1% 30.6% 0.5% 12.8% 6.7%
Number of units
outstanding at
end of period 847,598 663,269 588,501 986,556 907,821 767,867 612,819 588,841
<PAGE>
BALANCED SUBACCOUNT BOND SUBACCOUNT
1996 1995 1994 1993 1992 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $30.41 $25.09 $25.44 $23.23 $21.94 $24.35 $21.11 $21.96 $20.35 $19.29
End of period 31.24 30.41 25.09 25.44 23.23 23.76 24.35 21.11 21.96 20.35
Percentage increase
in unit value
during period* 2.7% 21.2% -1.4% 9.5% 5.9% -2.4% 15.4% -3.9% 7.9% 5.5%
Number of units
outstanding at
end of period 1,566,775 1,522,893 1,433,037 1,310,167 1,186,398 107,418 155,381 160,875 164,733 171,276
MONEY MARKET SUBACCOUNT TREASURY 2000 SUBACCOUNT
1996 1995 1994 1993 1992 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $17.05 $16.33 $15.91 $15.67 $15.33 $7.95 $6.63 $7.20 $6.29 $5.88
End of period 17.39 17.05 16.33 15.91 15.67 7.74 7.95 6.63 7.20 6.29
Percentage increase
in unit value
during period* 2.0% 4.4% 2.6% 1.5% 2.2% -2.6% 19.9% -7.9% 14.5% 7.0%
Number of units
outstanding at
end of period 89,874 25,112 179,387 149,181 201,170 194,133 194,133 191,747 189,107 186,690
INTERNATIONAL STOCK SUBACCOUNT WORLD GOVERNMENTS SUBACCOUNT
1996 1995 1996 1995
---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C>
Beginning of period $10.61 $10.00 $11.39 $10.00
End of period 11.52 10.61 11.26 11.39
Percentage increase
in unit value
during period* 8.6% 6.1% -1.1% 13.9%
Number of units
outstanding at
end of period 142,226 70,876 22,617 19,219
</TABLE>
EMERGING GROWTH SUBACCOUNT**
1996
----
Net asset value:
Beginning of period $10.00
End of period 9.99
Percentage increase
in unit value
during period* -.15%
Number of units
outstanding at
end of period 41,557
For the Money Market Subaccount, the "seven-day average yield" for the
seven days ended June 30, 1996, was 4.2% and the "effective yield" for that
period was 4.3%.
*The amount of premium invested in Century Variable Account is the amount
remaining after the policy charges described in footnote 3 have been deducted.
The policy charges have not been taken into account in this calculation.
Inclusion of the policy charges would reduce the percentage increase in unit
value during the period.
**The data is for the period beginning May 1, 1996 (date of initial activity).
