Dear Policyowner:
Despite extreme volatility, returns in the U.S. domestic stock market were
relatively flat in the first half of 2000. There were some signs of strength,
particularly with mid-cap stocks. International markets were generally flat to
down, particularly in some of the world's developing markets. The table below
shows the percent change in unit price for each of the subaccounts of the CUNA
Mutual Life Variable Account. If you own MEMBERS(R) Variable Universal Life, you
should refer to the columns labeled Type I Units in the first section of this
booklet. If you own MEMBERS(R) Variable Universal Life II, you should look at
the columns labeled Type II Units.
<TABLE>
<CAPTION>
Percent Increase in Unit Value from December 31, 1999 through June 30, 2000
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Type I Type II Type I Type II
Subaccount Units Units Subaccount Units Units
----------------------------- ------------ ------------ ---------------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Money Market 2.3% 2.3% Mid-Cap Stock n/a 6.1%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Treasury 2000 2.3% n/a International Stock -5.1% -5.1%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Bond 2.2% 2.2% Global Governments 1.0% 1.0%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Balanced 2.6% 2.6% Emerging Growth -2.8% -2.8%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Growth and Income Stock 1.9% 1.9% High Income n/a -1.1%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
Capital Appreciation Stock 2.8% 2.8% Developing Markets n/a -17.5%
----------------------------- ------------ ------------ ---------------------- ------------ ------------
</TABLE>
The CUNA Mutual Life Variable Account invests in the mutual funds listed above.
The results shown reflect the deduction of the separate account level charges.
The returns at the subaccount level are slightly lower than at the mutual fund
level as a result of these charges.
This booklet is divided into several sections. Each section contains the
semiannual report for a component of MEMBERS(R) Variable Universal Life and
MEMBERS(R) Variable Universal Life II. The first section contains the following
reports for the CUNA Mutual Life 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 remaining sections of this booklet contain the semiannual reports for the
mutual funds:
(1) the Ultra Series Fund which includes the Mid-Cap Stock Fund (available in
MEMBERS VUL II only), Capital Appreciation Stock Fund, Growth and Income
Stock Fund, Balanced Fund, Bond Fund, and Money Market Fund, and T2000 Fund
(MEMBERS VUL only);
(2) the International Stock Portfolio of the T. Rowe Price International
Series, Inc.;
(3) the MFS(R) Global Government Series(SM) and the MFS(R) Emerging Growth
Series(SM) of the MFS(R) Variable Insurance Trust(SM), (4) the Oppenheimer
High Income/VA Fund of the Oppenheimer Variable Account Funds (VUL II
only); and (5) the Templeton Developing Markets Fund of the Templeton
Variable Products Series Fund (VUL II only).
MEMBERS(R) Variable Universal Life and MEMBERS(R) Variable Universal Life II
provide you with both life insurance protection and the opportunity to grow your
assets to help you meet your long term asset accumulation goals. Thank you for
giving us the opportunity to serve you.
Sincerely,
/s/Michael B. Kitchen
Michael B. Kitchen
President and Chief Executive Officer
CUNA Mutual Life Insurance Company
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Assets and Liabilities
June 30, 2000
(Unaudited)
Capital
Money Treasury Growth and Appreciation
Market 2000 Bond Balanced Income Stock Stock
Assets: Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments in Ultra Series Fund:
(note 2)
Money Market Fund,
4,478,548 shares at net asset value of
$1.00 per share (cost $4,478,548) $4,478,548 $ -- $ -- $ -- $ -- $ --
Treasury 2000 Fund,
185,786 shares at net asset value
of $10.52 per share (cost $1,730,401) -- 1,954,332 -- -- -- --
Bond Fund,
380,585 shares at net asset value
of $10.14 per share (cost $3,959,882) -- -- 3,857,851 -- -- --
Balanced Fund,
3,829,889 shares at net asset value
of $20.77 per share (cost $58,227,744) -- -- -- 79,553,004 -- --
Growth and Income Stock Fund,
3,107,094 shares at net asset value
of $34.14 per share (cost $67,478,526) -- -- -- -- 106,083,388
Capital Appreciation Stock Fund,
1,813,922 shares at net asset value of
$26.15 per share (cost $31,805,512) -- -- -- -- -- 47,435,554
----------- ----------- ----------- ---------- ----------- ----------
Total assets 4,478,548 1,954,332 3,857,851 79,553,004 106,083,388 47,435,554
----------- ----------- ----------- ---------- ----------- ----------
Liabilities:
Accrued adverse mortality and
expense charges 7,319 9,416 5,767 121,812 166,755 72,172
----------- ----------- ----------- ---------- ----------- ----------
Total liabilities 7,319 9,416 5,767 121,812 166,755 72,172
----------- ----------- ----------- ---------- ----------- ----------
Net assets $4,471,229 $1,944,916 $3,852,084 $79,431,192 $105,916,633 $47,363,382
=========== =========== =========== ========== =========== ==========
Policyowners Equity:
Net Assets: Type 1 $3,579,337 $1,944,916 $3,816,294 $78,524,842 $104,668,006 $46,584,440
Outstanding units: Type 1 (note 5) 174,985 204,654 134,553 1,551,660 1,252,935 1,432,399
Net asset value per unit: Type 1 $20.45 $9.50 $28.36 $50.61 $83.54 $32.52
=========== =========== =========== ========== =========== ==========
Net Assets: Type 2 $891,892 -- $35,790 $906,350 $1,248,627 $778,942
Outstanding units: Type 2 (note 5) 87,184 -- 3,502 87,570 121,580 73,003
Net asset value per unit: Type 2 $10.23 -- $10.22 $10.35 $10.27 $10.67
=========== =========== =========== ========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Assets and Liabilities, continued
June 30, 2000
(Unaudited)
Mid-Cap International Global Emerging High Developing
Stock Stock Governments Growth Income Markets
Assets: Subaccount Subaccount Subaccount Subaccount Subaccount Subaccount
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments in Ultra Series Fund:
(note 2)
Mid-Cap Stock Fund,
14,329 shares at net asset value of
$11.86 per share (cost $169,495) $169,999 $ -- $ -- $ -- $ -- $ --
Investments in T. Rowe Price
International Fund, Inc.:
International Stock Portfolio,
554,891 shares at net asset value of
$18.14 per share (cost $7,848,495) -- 10,065,722 -- -- -- --
Investments in MFS(R) Variable
Insurance Trust(SM):
Global Governments Series,
64,560 shares at net asset value of
$9.68 per share (cost $658,511) -- -- 624,939 -- -- --
Investments in MFS(R) Variable
Insurance Trust(SM):
Emerging Growth Series,
517,685 shares at net asset value of
$35.05 per share (cost $11,859,100) -- -- -- 18,144,858 -- --
Investments in Oppenheimer
Variable Account Funds:
High Income Series,
1,506 shares at net asset value of
$9.57 per share (cost $14,531) -- -- -- -- 14,410 --
Investments in Templeton
Variable Products Series Fund:
Developing Markets Series,
5,561 shares at net asset value of
$6.37 per share (cost $36,916) -- -- -- -- -- 35,421
---------- ----------- ---------- ----------- --------- ---------
Total assets 169,999 10,065,722 624,939 18,144,858 14,410 35,421
---------- ----------- ---------- ----------- --------- ---------
Liabilities:
Accrued adverse mortality and
expense charges 154 14,641 948 26,417 15 37
---------- ----------- ---------- ----------- --------- ---------
Total liabilities 154 14,641 948 26,417 15 37
---------- ----------- ---------- ----------- --------- ---------
Net assets $169,845 $10,051,081 $623,991 $18,118,441 $14,395 $35,384
========== =========== ========== =========== ========= =========
Policyowners Equity:
Net Assets: Type 1 -- $9,853,776 $622,225 $17,428,001 -- --
Outstanding units: Type 1 (note 5) -- 555,222 51,818 629,761 -- --
Net asset value per unit: Type 1 -- $17.75 $12.01 $27.67 -- --
========== =========== ========== =========== ========= =========
Net Assets: Type 2 $169,845 $197,306 $1,766 $690,440 $14,395 $35,384
Outstanding units: Type 2 (note 5) 15,407 18,354 175 57,014 1,451 4,072
Net asset value per unit: Type 2 $11.02 $10.75 $10.09 $12.11 $9.92 $8.69
========== =========== ========== =========== ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Operations
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
MONEY MARKET SUBACCOUNT TREASURY 2000 SUBACCOUNT
Investment income (loss): 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dividend income $112,511 $156,541 $123,985 $0 $105,875 $106,291
Adverse mortality and expense charges
(note 3) (18,088) (29,935) (22,312) (8,620) (16,680) (15,826)
--------- --------- --------- ---------- ---------- ---------
Net investment income (loss) 94,423 126,606 101,673 (8,620) 89,195 90,465
--------- --------- --------- ---------- ---------- ---------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Capital gain distributions -- -- -- -- -- --
Proceeds from sale of securities 5,976,398 4,009,628 2,979,908 -- -- --
Cost of securities sold (5,976,398) (4,009,628) (2,979,908) -- -- --
--------- --------- --------- ---------- ---------- ---------
Net realized gain (loss) on security
transactions -- -- -- -- -- --
Net change in unrealized appreciation
or depreciation on investments -- -- -- 53,191 (49,994) 21,682
--------- --------- --------- ---------- ---------- ---------
Net gain (loss) on investments -- -- -- 53,191 (49,994) 21,682
--------- --------- --------- ---------- ---------- ---------
Net increase (decrease) in net assets
resulting from operations $94,423 $126,606 $101,673 $44,571 $39,201 $112,147
========= ========= ========= ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
BOND SUBACCOUNT BALANCED SUBACCOUNT
Investment income (loss): 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dividend income $62,686 $223,032 $196,337 $636,395 $1,995,000 $1,934,712
Adverse mortality and expense charges
(note 3) (16,857) (34,792) (30,006) (351,044) (675,563) (577,128)
--------- --------- --------- --------- --------- ---------
Net investment income (loss) 45,829 188,240 166,331 285,351 1,319,437 1,357,584
--------- --------- --------- --------- --------- ---------
Realized and unrealized gain (loss)
on investments:
Realized gain (loss) on security
transactions:
Capital gain distributions -- 57 2,477 422,244 1,743,848 3,744
Proceeds from sale of securities 421,062 585,790 441,318 4,129,235 6,404,678 4,012,722
Cost of securities sold (435,728) (583,986) (426,398) (3,014,191) (4,654,847) (3,159,159)
--------- --------- --------- --------- --------- ---------
Net realized gain (loss) on security
transactions (14,666) 1,861 17,397 1,537,288 3,493,679 857,307
Net change in unrealized appreciation
or depreciation on investments 49,007 (197,060) (14,556) 128,089 4,544,788 5,340,950
--------- --------- --------- --------- --------- ---------
Net gain (loss) on investments 34,341 (195,199) 2,841 1,665,377 8,038,467 6,198,257
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations $80,170 ($6,959) $169,172 $1,950,728 $9,357,904 $7,555,841
========= ========= ========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Operations, continued
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
GROWTH AND INCOME STOCK SUBACCOUNT CAPITAL APPRECIATION STOCK SUBACCOUNT
Investment income (loss): 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dividend income $280,170 $916,870 $869,525 $8,112 $33,412 $88,433
Adverse mortality and expense
charges (note 3) (469,170) (870,409) (691,564) (200,253) (328,898) (259,874)
-------- --------- --------- --------- -------- --------
Net investment income (loss) (189,000) 46,461 177,961 (192,141) (295,486) (171,441)
-------- --------- --------- --------- -------- --------
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
security transactions:
Capital gain distributions 377,335 6,072,033 3,106,051 493,012 3,266,215 769,968
Proceeds from sale of securities 2,591,793 4,764,654 3,497,748 877,645 2,779,984 1,770,807
Cost of securities sold (1,626,944) (2,809,713) (2,160,207) (562,147) (1,731,081) (1,192,638)
--------- --------- --------- --------- --------- ---------
Net realized gain (loss) on security
transactions 1,342,184 8,026,974 4,443,592 808,510 4,315,118 1,348,137
Net change in unrealized appreciation
or depreciation on investments 728,811 6,432,344 7,377,335 670,775 4,111,612 4,151,868
---------- ---------- ---------- --------- --------- ---------
Net gain (loss) on investments 2,070,995 14,459,318 11,820,927 1,479,285 8,426,730 5,500,005
---------- ---------- ---------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations $1,881,995 $14,505,779 $11,998,888 $1,287,144 $8,131,244 $5,328,564
========== ========== ========== ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
MID-CAP STOCK SUBACCOUNT INTERNATIONAL STOCK SUBACCOUNT
Investment income (loss): 2000 1999* 2000 1999 1998
---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Dividend income $54 $1 $ -- $30,258 $90,596
Adverse mortality and expense
charges (note 3) (206) (1) (41,277) (58,716) (47,908)
------- ------- --------- --------- --------
Net investment income (loss) (152) -- (41,277) (28,458) 42,688
------- ------- --------- --------- --------
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on security
transactions:
Capital gain distributions 77 78 -- 95,097 --
Proceeds from sale of securities 1,850 14 176,759 648,203 491,409
Cost of securities sold (1,815) (14) (132,824) (619,493) (442,671)
------- ------- --------- --------- --------
Net realized gain (loss) on security
transactions 112 78 43,935 123,807 48,738
Net change in unrealized appreciation
or depreciation on investments 391 113 (451,966) 1,926,801 608,851
------- ------- --------- --------- --------
Net gain (loss) on investments 503 191 (408,031) 2,050,608 657,589
------- ------- --------- --------- --------
Net increase (decrease) in net assets
resulting from operations $351 $191 ($449,308) $2,022,150 $700,277
======= ======= ========= ========= ========
</TABLE>
See accompanying notes to financial statements.
*The data is for the period beginning November 8, 1999 (date of initial
activity).
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Operations, continued
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
GLOBAL GOVERNMENTS SUBACCOUNT EMERGING GROWTH SUBACCOUNT
Investment income (loss): 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Dividend income $29,675 $35,810 $8,821 $ -- $ -- $45,309
Adverse mortality and expense charges
(note 3) (2,745) (6,651) (6,487) (76,455) (81,732) (48,583)
-------- -------- ------- --------- -------- --------
Net investment income (loss) 26,930 29,159 2,334 (76,455) (81,732) (3,274)
-------- -------- ------- --------- -------- --------
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
security transactions:
Capital gain distributions -- -- -- 921,643 -- --
Proceeds from sale of securities 26,113 289,685 92,387 804,847 841,070 448,520
Cost of securities sold (26,979) (289,946) (90,661) (452,808) (590,062) (373,845)
-------- -------- ------- --------- -------- --------
Net realized gain (loss) on security
transactions (866) (261) 1,726 1,273,682 251,008 74,675
Net change in unrealized appreciation
or depreciation on investments (19,968) (57,288) 44,633 (1,752,921) 6,126,859 1,524,641
-------- -------- ------- --------- --------
Net gain (loss) on investments (20,834) (57,549) 46,359 (479,239) 6,377,867 1,599,316
-------- -------- ------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations $6,096 ($28,390) $48,693 ($555,694) $6,296,135 $1,596,042
======== ======== ======= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
HIGH INCOME SUBACCOUNT DEVELOPING MARKETS SUBACCOUNT
Investment income (loss): 2000 1999* 2000 1999*
---- ----- ---- -----
<S> <C> <C> <C> <C>
Dividend income $236 $ -- $59 $ --
Adverse mortality and expense
charges (note 3) (21) -- (57) --
------- ------- ------- -------
Net investment income (loss) 215 -- 2 --
------- ------- ------- -------
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) on
security transactions:
Capital gain distributions -- -- -- --
Proceeds from sale of securities 1,596 -- 1,780 --
Cost of securities sold (1,641) -- (1,788) --
------- ------- ------- -------
Net realized gain (loss) on security
transactions (45) -- (8) --
Net change in unrealized appreciation
or depreciation on investments (124) 3 (1,550) 55
------- ------- ------- -------
Net gain (loss) on investments (169) 3 (1,558) 55
------- ------- ------- -------
Net increase (decrease) in net assets
resulting from operations $46 $3 ($1,556) $55
======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements.
*The data is for the period beginning November 8, 1999 (date of initial
activity).
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Changes in Net Assets
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
MONEY MARKET SUBACCOUNT TREASURY 2000 SUBACCOUNT
Operations: 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $94,423 $126,606 $101,673 ($8,620) $89,195 $90,465
Net realized gain (loss) on
security transactions -- -- -- -- -- --
Net change in unrealized appreciation
or depreciation on investments -- -- -- 53,191 (49,994) 21,682
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
operations 94,423 126,606 101,673 44,571 39,201 112,147
---------- ---------- ---------- ---------- ---------- ----------
Capital unit transactions (note 5):
Proceeds from sale of units 7,553,916 5,200,600 4,485,112 271,119 371,536 447,349
Cost of units repurchased (7,589,307) (4,530,276) (3,592,636) (271,119) (344,910) (424,204)
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from capital
unit transactions (35,391) 670,324 892,476 -- 26,626 23,145
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets 59,032 796,930 994,149 44,571 65,827 135,292
Net assets:
Beginning of period 4,412,197 3,615,267 2,621,118 1,900,345 1,834,518 1,699,226
---------- ---------- ---------- ---------- ---------- ----------
End of period $4,471,229 $4,412,197 $3,615,267 $1,944,916 $1,900,345 $1,834,518
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
BOND SUBACCOUNT BALANCED SUBACCOUNT
Operations: 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $45,829 $188,240 $166,331 $285,351 $1,319,437 $1,357,584
Net realized gain (loss) on
security transactions (14,666) 1,861 17,397 1,537,288 3,493,679 857,307
Net change in unrealized appreciation
or depreciation on investments 49,007 (197,060) (14,556) 128,089 4,544,788 5,340,950
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
operations 80,170 (6,959) 169,172 1,950,728 9,357,904 7,555,841
---------- ---------- ---------- ---------- ---------- ----------
Capital unit transactions (note 5):
Proceeds from sale of units 472,041 1,186,455 1,182,649 6,622,128 14,839,213 10,811,007
Cost of units repurchased (577,916) (918,722) (772,448) (7,886,222) (14,209,808) (10,309,524)
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from capital
unit transactions (105,875) 267,733 410,201 (1,264,094) 629,405 501,483
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets (25,705) 260,774 579,373 686,634 9,987,309 8,057,324
Net assets:
Beginning of period 3,877,789 3,617,015 3,037,642 78,747,558 68,760,249 60,702,925
---------- ---------- ---------- ---------- ---------- ----------
End of period $3,852,084 $3,877,789 $3,617,015 $79,434,192 $78,747,558 $68,760,249
========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Changes in Net Assets, continued
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
GROWTH AND INCOME STOCK SUBACCOUNT CAPITAL APPRECIATION SUBACCOUNT
Operations: 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) ($189,000) $46,461 $177,961 ($192,141) ($295,486) ($171,441)
Net realized gain (loss) on
security transactions 1,342,184 8,026,974 4,443,592 808,510 4,315,118 1,348,137
Net change in unrealized appreciation
or depreciation on investments 728,811 6,432,344 7,377,335 670,775 4,111,612 4,151,868
----------- ----------- ---------- ---------- ---------- ----------
Change in net assets from
operations 1,881,995 14,505,779 11,998,888 1,287,144 8,131,244 5,328,564
----------- ----------- ---------- ---------- ---------- ----------
Capital unit transactions (note 5):
Proceeds from sale of units 9,434,794 17,312,510 15,135,142 7,239,007 7,912,873 7,807,048
Cost of units repurchased (7,721,256) (14,188,868) (11,770,989) (3,374,738) (6,897,886) (5,420,620)
----------- ----------- ---------- ---------- ---------- ----------
Change in net assets from capital
unit transactions 1,713,538 3,123,642 3,364,153 3,864,269 1,014,987 2,386,428
----------- ----------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets 3,595,533 17,629,421 15,363,041 5,151,413 9,146,231 7,714,992
Net assets:
Beginning of period 102,321,100 84,691,679 69,328,638 42,211,969 33,065,738 25,350,746
----------- ----------- ---------- ---------- ---------- ----------
End of period $105,916,633 $102,321,100 $84,691,679 $47,363,382 $42,211,969 $33,065,738
=========== =========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MID-CAP STOCK SUBACCOUNT INTERNATIONAL STOCK SUBACCOUNT
Operations: 2000 1999* 2000 1999 1998
---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net investment income (loss) ($152) $ -- ($41,277) ($28,458) $42,688
Net realized gain (loss) on
security transactions 112 78 43,935 123,807 48,738
Net change in unrealized appreciation
or depreciation on investments 391 113 (451,966) 1,926,801 608,851
-------- ------- ---------- --------- ---------
Change in net assets from
operations 351 191 (449,308) 2,022,150 700,277
-------- ------- ---------- --------- ---------
Capital unit transactions (note 5):
Proceeds from sale of units 175,387 4,450 2,929,550 1,876,821 1,897,345
Cost of units repurchased (10,454) (80) (789,665) (1,361,528) (1,227,692)
-------- ------- ---------- --------- ---------
Change in net assets from capital
unit transactions 164,933 4,370 2,139,885 515,293 669,653
-------- ------- ---------- --------- ---------
Increase (decrease) in net assets 165,284 4,561 1,690,577 2,537,443 1,369,930
Net assets:
Beginning of period 4,561 -- 8,360,504 5,823,061 4,453,131
-------- ------- ---------- --------- ---------
End of period $169,845 $4,561 $10,051,081 $8,360,504 $5,823,061
======== ======= ========== ========= =========
</TABLE>
See accompanying notes to financial statements.
*The data is for the period beginning November 8, 1999 (date of initial
activity).
<PAGE>
<TABLE>
<CAPTION>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Statements of Changes in Net Assets, continued
For six months ended June 30, 2000 and years ended December 31, 1999 and 1998
(Unaudited)
GLOBAL GOVERNMENTS SUBACCOUNT EMERGING GROWTH SUBACCOUNT
Operations: 2000 1999 1998 2000 1999 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $26,930 $29,159 $2,334 ($76,455) ($81,732) ($3,274)
Net realized gain (loss) on
security transactions (866) (261) 1,726 1,273,682 251,008 74,675
Net change in unrealized appreciation
or depreciation on investments (19,968) (57,288) 44,633 (1,752,921) 6,126,859 1,524,641
--------- --------- --------- ---------- ---------- ---------
Change in net assets from
operations 6,096 (28,390) 48,693 (555,694) 6,296,135 1,596,042
--------- --------- --------- ---------- ---------- ---------
Capital unit transactions (note 5):
Proceeds from sale of units 37,959 222,897 85,855 5,409,032 3,957,172 2,707,434
Cost of units repurchased (39,104) (312,920) (118,224) (2,000,455) (2,023,998) (1,321,467)
--------- --------- --------- ---------- ---------- ---------
Change in net assets from capital
unit transactions (1,145) (90,023) (32,369) 3,408,577 1,933,174 1,385,967
--------- --------- --------- ---------- ---------- ---------
Increase (decrease) in net assets 4,951 (118,413) 16,324 2,852,883 8,229,309 2,982,009
Net assets:
Beginning of period 619,040 737,453 721,129 15,265,558 7,036,249 4,054,240
--------- -------- --------- ---------- ---------- ---------
End of period $623,991 $619,040 $737,453 $18,118,441 $15,265,558 $7,036,249
========= ========= ========= ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
HIGH INCOME SUBACCOUNT DEVELOPING MARKETS SUBACCOUNT
Operations: 2000 1999* 2000 1999*
---- ----- ---- -----
<S> <C> <C> <C> <C>
Net investment income (loss) $215 $ -- $2 $ --
Net realized gain (loss) on
security transactions (45) -- (8) --
Net change in unrealized appreciation
or depreciation on investments (124) 3 (1,550) 55
-------- ------- -------- -------
Change in net assets from
operations 46 3 (1,556) 55
-------- ------- -------- -------
Capital unit transactions (note 5):
Proceeds from sale of units 13,695 1,075 40,508 1,189
Cost of units repurchased (422) (2) (4,806) (6)
-------- ------- -------- -------
Change in net assets from capital
unit transactions 13,273 1,073 35,702 1,183
-------- ------- -------- -------
Increase (decrease) in net assets 13,319 1,076 34,146 1,238
Net assets:
Beginning of period 1,076 -- 1,238 --
-------- ------- -------- -------
End of period $14,395 $1,076 $35,384 $1,238
======== ======= ======== =======
</TABLE>
See accompanying notes to financial statements.
*The data is for the period beginning November 8, 1999 (date of initial
activity).
<PAGE>
CUNA MUTUAL LIFE VARIABLE ACCOUNT
Notes to Financial Statements
(1) Organization
The CUNA Mutual Life Variable Account (the Account) is a unit investment
trust registered under the Investment Company Act of 1940 with the
Securities and Exchange Commission (SEC). The Account was established as a
separate investment account within CUNA Mutual Life Insurance Company to
receive and invest net premiums paid under flexible premium variable life
insurance policies.
Although the assets of the Account are the property of CUNA Mutual Life
Insurance Company, those assets attributable to the policies are not
chargeable with liabilities arising out of any other business which CUNA
Mutual Life Insurance Company 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 CUNA
Mutual Life Insurance Company's general account to cover death benefits in
excess of the accumulated value.
(2) Significant Accounting Policies
Investments
The Account currently is divided into twelve 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
(Class Z shares), T. Rowe Price International Fund, Inc., MFS(R) Variable
Insurance Trust(SM), Oppenheimer Variable Account Funds, Templeton Variable
Products Series Fund, 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., MFS(R) Variable Insurance Trust(SM), Oppenheimer
Variable Account Funds, and Templeton Variable Products Series Fund. 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 seven funds available as investment options
under the policies. T. Rowe Price International Fund, Inc., Oppenheimer
Variable Account Funds and Templeton Variable Products Series Fund have one
fund available as an investment option and MFS(R) Variable Insurance
Trust(SM) has two funds available as an investment option. MFS(R) Variable
Insurance Trust(SM), Oppenheimer Variable Account Funds and Templeton
Variable Products Series Fund also have 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.
CIMCO Inc. (CIMCO) serves as the investment adviser 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.
CUNA Mutual Life Insurance 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
adviser 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.
Massachusetts Financial Services Company (MFS) serves as the investment
adviser to the MFS Global Governments Series (formerly known as the MFS
World Governments Series) and Emerging Growth Series and manages their
assets in accordance with general policies and guidelines established by
the board of trustees of MFS(R) Variable Insurance Trust(SM).
OppenheimerFunds, Inc. (the Manager) serves as the investment adviser to
the Oppenheimer High Income Fund and manages its assets in accordance with
general policies and guidelines established by the board of trustees of the
Oppenheimer Variable Account Funds.
<PAGE>
Templeton Asset Management Ltd. serves as the investment adviser to the
Templeton Developing Markets Fund: Class 2 and manages its assets and makes
its investments decisions.
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 CUNA Mutual
Life Insurance Company and are not taxed separately. CUNA Mutual Life
Insurance Company 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 CUNA Mutual Life Insurance Company
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
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 CUNA Mutual Life Insurance Company by redeeming
an appropriate number of units for each policy.
Administrative Fee: CUNA Mutual Life Insurance Company will have primary
responsibility for the administration of the Account and the policies
issued. As reimbursement for these expenses, CUNA Mutual Life Insurance
Company 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
CUNA Mutual Life Insurance Company crediting additional amounts at its
discretion.
Policy Fee: CUNA Mutual Life Insurance Company 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: CUNA Mutual Life
Insurance Company 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: CUNA Mutual Life Insurance Company will
deduct daily a mortality and expense risk charge from the Account at an
annual rate of 0.90% of the average daily net asset value of the Account.
These charges will be deducted by CUNA Mutual Life Insurance Company in
return for its assumption of risks associated with adverse mortality
experience or excess administrative expenses in connection with policies
issued.
<PAGE>
(4) Investment Transactions
The cost of shares purchased, including reinvestment of dividend
distributions, during the six months ended June 30, 2000, was as follows:
Money Market Fund.............................................. $6,039,237
Treasury 2000 Fund............................................. 271,119
Bond Fund...................................................... 363,801
Balanced Fund.................................................. 3,634,977
Growth and Income Stock Fund................................... 4,583,842
Capital Appreciation Stock Fund................................ 5,083,685
Mid-Cap Stock Fund............................................. 166,861
International Stock Portfolio.................................. 2,284,002
Global Governments Series...................................... 52,363
Emerging Growth Series......................................... 5,074,897
High Income Fund............................................... 15,099
Developing Markets Fund........................................ 37,520
(5) Unit Activity from Contract Transactions
Transactions in units of each subaccount of the Account for the years ended
December 31, 1999 and 1998, and for the six-month period ended June 30,
2000, were as follows:
<TABLE>
<CAPTION>
Money Treasury
Market 2000 Bond Balanced
Subaccount Subaccount Subaccount Subaccount
------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Type 1 Type 2 Type 1 Type 2* Type 1 Type 2 Type 1 Type 2
Outstanding at
December 31, 1997 141,908 -- 199,220 114,927 -- 1,568,974 --
Sold 236,364 -- 52,984 43,507 -- 266,148 --
Repurchased (190,395) -- (50,435) (28,421) -- (254,086) --
-------- -------- ------- ------- ------- --------- -------
Outstanding at
December 31, 1998 187,877 -- 201,769 130,013 -- 1,581,036 --
Sold 263,945 -- 43,509 42,671 107 318,708 8,386
Repurchased (231,067) -- (40,624) (33,099) -- (305,776) (116)
-------- -------- ------- ------- ------- --------- -------
Outstanding at
December 31, 1999 220,755 -- 204,654 139,585 107 1,593,968 8,270
Sold 315,380 114,485 28,833 15,689 3,435 114,721 87,252
Repurchased (361,150) (27,301) (28,833) (20,721) (40) (157,029) (7,952)
-------- -------- ------- ------- ------- --------- -------
Outstanding at
June 30, 2000 174,985 87,184 204,654 134,553 3,502 1,551,660 87,570
======== ======== ======= ======= ======= ========= =======
</TABLE>
<TABLE>
<CAPTION>
Capital
Growth and Appreciation Mid-Cap International
Stock Stock Stock Stock
Subaccount Subaccount Subaccount Subaccount
------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Type 1 Type 2 Type 1 Type 2 Type 1* Type 2 Type 1 Type 2
Outstanding at
December 31, 1997 1,155,179 -- 1,191,865 -- -- 361,206 --
Sold 233,645 -- 340,862 -- -- 141,913 --
Repurchased (181,819) -- (235,746) -- -- (91,869) --
--------- -------- --------- ------- ------- ------- -------
Outstanding at
December 31, 1998 1,207,005 -- 1,296,981 -- -- 411,250 --
Sold 221,525 4,044 287,074 1,509 447 125,998 504
Repurchased (181,747) (65) (250,228) (28) (8) (90,747) (7)
--------- -------- --------- ------- ------- ------- -------
Outstanding at
December 31, 1999 1,246,783 3,979 1,333,827 1,481 439 446,501 497
Sold 98,598 121,668 203,179 74,550 15,927 151,676 19,332
Repurchased (92,446) (4,067) (104,607) (3,028) (959) (42,955) (1,475)
--------- -------- --------- ------- ------- -------- -------
Outstanding at
June 30, 2000 1,252,935 121,580 1,432,399 73,003 15,407 555,222 18,354
========= ======== ========= ======= ======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Global Emerging High Developing
Governments Growth Income Markets
Subaccount Subaccount Subaccount Subaccount
------------------- ------------------- ------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Type 1 Type 2 Type 1 Type 2 Type 1* Type 2 Type 1* Type 2
Outstanding at
December 31, 1997 62,671 -- 331,933 -- -- --
Sold 7,299 -- 197,716 -- -- --
Repurchased (10,044) -- (96,508) -- -- --
-------- -------- -------- ------- ------- -------
Outstanding at
December 31, 1998 59,926 -- 433,141 -- -- --
Sold 18,188 106 214,540 466 107 118
Repurchased (26,138) -- (111,422) (12) -- --
-------- -------- -------- ------- ------- -------
Outstanding at
December 31, 1999 51,976 106 536,259 454 107 118
Sold 3,145 75 162,829 58,867 1,387 4,476
Repurchased (3,303) (6) (69,327) (2,307) (43) (522)
-------- -------- -------- ------- ------- -------
Outstanding at
June 30, 2000 51,818 175 629,761 57,014 1,451 4,072
======== ======== ======== ======= ======= =======
</TABLE>
*This fund not available in this product type.
(6) Condensed Financial Information
The table below gives per unit information about the financial history of
each subaccount for each period.
<TABLE>
<CAPTION>
MONEY MARKET SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ----------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $19.99 $10.00 $19.24 $10.00 $18.47 $17.73 $17.05
End of period 20.45 10.23 19.99 10.00 19.24 18.47 17.73
Percentage increase
(decrease) in unit
value during period 2.3% 2.3% 3.9% 0.0% 4.2% 4.1% 4.0%
Number of units
outstanding at
end of period 174,985 87,184 220,755 -- 187,877 141,908 97,454
</TABLE>
<TABLE>
<CAPTION>
TREASURY 2000 SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ----------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2* Type 1 Type 2*
Beginning of period $9.29 $9.09 $8.53 $8.05 $7.95
End of period 9.50 9.29 9.09 8.53 8.05
Percentage increase
(decrease) in unit
value during period 2.3% 2.2% 6.6% 6.0% 1.3%
Number of units
outstanding at
end of period 204,654 204,654 201,769 199,220 196,670
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ----------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $27.77 $10.00 $27.82 $10.00 $26.43 $24.82 $24.35
End of period 28.36 10.22 27.77 10.00 27.82 26.43 24.82
Percentage increase
(decrease) in unit
value during period 2.2% 2.2% (0.2%) 0.0%*** 5.3% 6.5% 1.9%
Number of units
outstanding at
end of period 134,553 3,502 139,585 107 130,013 114,927 97,411
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED SUBACCOUNT
2000 1999 1998 1997 1996
-------------------- ------------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $49.35 $10.09 $43.49 $10.00 $38.69 $33.40 $30.41
End of period 50.61 10.35 49.35 10.09 43.49 38.69 33.40
Percentage increase
(decrease) in unit
value during period 2.6% 2.6% 13.5% 0.9%*** 12.4% 15.8% 9.8%
Number of units
outstanding at
end of period 1,551,660 87,570 1,593,968 8,270 1,581,036 1,568,974 1,567,551
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK SUBACCOUNT
2000 1999 1998 1997 1996
-------------------- -------------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $82.04 $10.08 $70.17 $10.00 $60.02 $46.07 $38.09
End of period 83.54 10.27 82.04 10.08 70.17 60.02 46.07
Percentage increase
(decrease) in unit
value during period 1.9% 1.9% 16.9% 0.8%*** 16.9% 30.3% 21.0%
Number of units
outstanding at
end of period 1,252,935 121,580 1,246,783 3,979 1,207,005 1,155,179 1,036,605
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK SUBACCOUNT
2000 1999 1998 1997 1996
-------------------- -------------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $31.64 $10.38 $25.49 $10.00 $21.27 $16.31 $13.55
End of period 32.52 10.67 31.64 10.38 25.49 21.27 16.31
Percentage increase
(decrease) in unit
value during period 2.8% 2.8% 24.1% 3.8%*** 19.9% 30.4% 20.4%
Number of units
outstanding at
end of period 1,432,399 73,003 1,333,827 1,481 1,296,981 1,191,865 953,534
</TABLE>
<TABLE>
<CAPTION>
MID-CAP STOCK SUBACCOUNT
2000 1999 1998** 1997** 1996**
----------------- ----------------- ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value: Type 1* Type 2 Type 1* Type 2
Beginning of period $10.39 $10.00
End of period 11.02 10.39
Percentage increase
(decrease) in unit
value during period 6.1% 3.9%***
Number of units
outstanding at
end of period 15,407 439
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL STOCK SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ------------------ ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $18.71 $11.33 $14.16 $10.00 $12.33 $12.07 $10.61
End of period 17.75 10.75 18.71 11.33 14.16 12.33 12.07
Percentage increase
(decrease) in unit
value during period (5.1%) (5.1%) 32.1% 13.3%*** 14.8% 2.2% 13.7%
Number of units
outstanding at
end of period 555,222 18,354 446,501 497 411,250 361,206 216,089
</TABLE>
<TABLE>
<CAPTION>
GLOBAL GOVERNMENTS SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ----------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $11.89 $10.00 $12.31 $10.00 $11.51 $11.74 $11.39
End of period 12.01 10.09 11.89 10.00 12.31 11.51 11.74
Percentage increase
(decrease) in unit
value during period* 1.0% 1.0% (3.4%) 0.0% 6.9% (2.0%) 3.1%
Number of units
outstanding at
end of period 51,818 175 51,976 106 59,926 62,671 24,554
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH SUBACCOUNT
2000 1999 1998 1997 1996
----------------- ----------------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value: Type 1 Type 2** Type 1 Type 2**
Beginning of period $28.46 $12.47 $16.24 $10.00 $12.21 $10.11 $10.00
End of period 27.67 12.11 28.46 12.47 16.24 12.21 10.11
Percentage increase
(decrease) in unit
value during period* (2.8%) (2.8%) 75.2% 24.7%*** 33.0% 20.8% 1.1%
Number of units
outstanding at
end of period 629,761 57,014 536,259 454 433,141 331,933 117,711
</TABLE>
<TABLE>
<CAPTION>
HIGH INCOME SUBACCOUNT
2000 1999 1998** 1997** 1996**
----------------- ----------------- ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value: Type 1* Type 2** Type 1* Type 2**
Beginning of period $10.03 $10.00
End of period 9.92 10.03
Percentage increase
(decrease) in unit
value during period (1.1%) 0.3%***
Number of units
outstanding at
end of period 1,451 107
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DEVELOPMENT MARKETS SUBACCOUNT
2000 1999 1998** 1997** 1996**
----------------- ----------------- ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value: Type 1* Type 2** Type 1* Type 2**
Beginning of period $10.53 $10.00
End of period 8.69 10.53
Percentage increase
(decrease) in unit
value during period (17.5%) 5.3%***
Number of units
outstanding at
end of period 4,072 118
</TABLE>
*This fund not available in this product type.
**The VULII product inception date was November 8, 1999, with all subaccounts
starting with a $10.00 unit price.
***Not annualized.
