As filed with the Securities and Exchange Commission on October 3, 1996
Registration Nos. 2-36250
811-2025
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 44 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 26 |X|
SEPARATE ACCOUNT C
(Formerly Transamerica Occidental's Separate Account Fund C)
(Exact Name of Registrant)
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
(Name of Depositor)
1150 South Olive, Los Angeles, CA 90015-2211
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (213) 742-3065
Name and Address of Agent for Service: Copy to:
JAMES W. DEDERER, Esq. FREDERICK R. BELLAMY, Esq.
Executive Vice President, General Counsel Sutherland, Asbill & Brennan
and Corporate Secretary 1275 Pennsylvania Avenue, N.W.
Transamerica Occidental Life Insurance Company Washington, D.C. 20004-2404
1150 South Olive Street
Los Angeles, California 90015-2211
Approximate date of proposed public offering:
As soon as practicable after effectiveness of the
Registration Statement.
It is proposed that this filing will become effective:
|_| immediately upon filing pursuant to paragraph (b)
|X| on October 31, 1996 pursuant to paragraph (b) |_|
60 days after filing pursuant to paragraph (a)(i) |_|
on _________________ pursuant to paragraph (a)(i) |_|
75 days after filing pursuant to paragraph (a)(ii)
|_| on _________________ pursuant to paragraph
(a)(ii) of Rule 485
If appropriate, check the following box:
|x| this Post-Effective Amendment
designates a new effective date
for a previously filed
Post-Effective Amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495
Showing Location in Part A (Prospectus),
Part B (Statement of Additional Information) and Part C
of Registration Statement Information Required by Form N-4
<TABLE>
<CAPTION>
PART A
Item of Form N-4 Prospectus Caption
<S> <C> <C>
1. Cover Page............................................... Cover Page
2. Definitions.............................................. Terms Used in this Prospectus
3. Synopsis................................................. Synopsis of this Prospectus; Variable Annuity Fee
Table
4. Condensed Financial Information.......................... Condensed Financial Information
5. General
(a) Depositor.......................................... Transamerica Occidental and the Separate
Account
(b) Registrant......................................... Transamerica Occidental and the Separate
Account
(c) Portfolio Company.................................. The Growth Portfolio
(d) Fund Prospectus.................................... The Growth Portfolio
(e) Voting Rights...................................... Voting Rights
(f) Administrator...................................... Charges under the Contracts
6. Deductions and Expenses
(a) General............................................ Charges under the Contracts
(b) Sales Load %....................................... Charges under the Contracts
(c) Special Purchase Plan.............................. Not Applicable
(d) Commissions........................................ Underwriter
(e) Fund Expenses...................................... Charges under the Contracts
(f) Operating Expenses................................. Variable Annuity Fee Table
7. Contracts
(a) Persons with Rights................................ Description of the Contracts; Surrender of a
Contract; Death Benefits; Voting Rights
(b) (i) Allocation of Purchase Payments
Payments..................................... Description of the Contracts
(ii) Transfers.................................... Not Applicable
(iii) Exchanges.................................... Federal Tax Status
(c) Changes............................................ The Growth Portfolio; Voting Rights
(d) Inquiries.......................................... Voting Rights
8. Annuity Period........................................... Annuity Period
9. Death Benefit............................................ Death Benefits
<PAGE>
10. Purchase and Contract Value
(a) Purchases.......................................... Description of the Contracts
(b) Valuation.......................................... Description of the Contracts
(c) Daily Calculation.................................. Description of the Contracts
(d) Underwriter........................................ Underwriter
11. Redemptions
(a) By Contract Owners................................. Surrender of a Contract
By Annuitant....................................... Not Applicable
(b) Texas ORP.......................................... Not Applicable
(c) Check Delay........................................ Surrender of a Contract
(d) Lapse.............................................. Not Applicable
(e) Free Look.......................................... Not Applicable
12. Taxes.................................................... Federal Tax Status
13. Legal Proceedings........................................ Legal Proceedings
14. Table of Contents for the
Statement of
Additional Information................................... Table of Contents of the Statement of Additional
Information
PART B
Item of Form N-4 Statement of Additional Information Caption
15. Cover Page............................................... Cover Page
16. Table of Contents........................................ Table of Contents
17. General Information
and History.............................................. General Information and History
18. Services
(a) Fees and Expenses
of Registrant...................................... (Prospectus) Variable Annuity Fee Table;
(Prospectus) The Growth Portfolio
(b) Management Contracts............................... Not Applicable
(c) Custodian.......................................... Safekeeping of Separate Account Assets;
Records and Reports
Independent Auditors ............................. Accountants
(d) Assets of Registrant............................... Not Applicable
(e) Affiliated Person.................................. Not Applicable
(f) Principal Underwriter.............................. The Underwriter
<PAGE>
19. Purchase of Securities
Being Offered............................................ (Prospectus) Description of the Contracts
Offering Sales Load...................................... Charges under the Contracts
20. Underwriters............................................. The Underwriter
21. Calculation of Performance
Data..................................................... Calculation of Yields and Total Returns
22. Annuity Payments......................................... (Prospectus) Annuity Period
23. Financial Statements..................................... Financial Statements
PART C -- OTHER INFORMATION
Item of Form N-4 Part C Caption
24. Financial Statements
and Exhibits
(a) Financial Statements............................... Financial Statements
(b) Exhibits........................................... Exhibits
25. Directors and Officers of
the Depositor............................................ Directors and Officers of the Depositor
26. Persons Controlled By or Under Common Control
with the Depositor or Registrant ........................ Persons Controlled By or Under Common Control
with the Depositor or Registrant
27. Number of Contract Owners................................ Number of Contract Owners
28. Indemnification.......................................... Indemnification
29. Principal Underwriters................................... Principal Underwriter
30. Location of Accounts
and Records.............................................. Location of Accounts and Records
31. Management Services...................................... Management Services
32. Undertakings............................................. Undertakings
Signature Page........................................... Signature Page
</TABLE>
<PAGE>
PART A
PROSPECTUS
<PAGE>
SEPARATE ACCOUNT C
Individual Equity Investment Fund Contracts
For Non-Tax Qualified Individual Retirement Plans
(LOGO)
1150 South Olive Street, Los Angeles, California 90015-2211 o (213) 742-3065
------------------------------------------------------------------------------
This Prospectus describes three types of variable annuity contracts
(the "Contracts") issued by Transamerica Occidental Life Insurance Company
("Transamerica" or the "Company"). The Contracts are called the Individual
Equity Investment Fund Contracts -- Annual Deposit, Single Deposit Deferred and
Single Deposit Immediate (the "Contracts"). These Contracts are designed for
non-tax-qualified investments only.
Deposits and Accumulation Account Value are allocated to Separate
Account C of Transamerica Occidental Life Insurance Company (the "Separate
Account"). The assets of the Separate Account will be invested solely in the
Growth Portfolio (the "Growth Portfolio" or the "Portfolio") of the Transamerica
Variable Insurance Fund. The Portfolio's investment objective is long-term
capital growth which its pursues by investing primarily in common stocks. Any
income and realized capital gains will be reinvested in shares of the Portfolio.
The Accumulation Account Value under the Contracts will vary with the investment
performance of the Portfolio in which the Separate Account is invested. There is
no assurance that the investment objective of the Portfolio will be met. The
Contract Owner bears the entire investment risk for amounts invested under the
Contracts.
This Prospectus sets forth basic information about the Contracts and
the Separate Account that a prospective investor should know before investing. A
"Statement of Additional Information" containing more detailed information about
the Contracts and the Separate Account is available free by writing Transamerica
Occidental Life Insurance Company (the "Company") at 1150 South Olive Street,
Los Angeles, California 90015-2211 or by calling (213) 742-3065. The Statement
of Additional Information, which has the same date as this Prospectus as it may
be supplemented from time to time, has been filed with the Securities and
Exchange Commission (the "Commission") and is incorporated herein by reference.
The table of contents for the Statement of Additional Information is included at
the end of this Prospectus.
This Prospectus must be accompanied by the current
prospectus for the Growth Portfolio of Transamerica
Variable Insurance Fund, Inc.
----------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------------------------------------------------------
The date of this Prospectus is November 1, 1996
Please read this Prospectus carefully and keep it for
future reference.
An investment in the Contracts is not a deposit of, or guaranteed or endorsed
by, any bank, nor are the Contracts federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board or any other government agency.
Investing in the Contracts involves certain investment risks, including possible
loss of principal.
<PAGE>
TABLE OF CONTENTS
(LOGO)
Terms Used in this Prospectus...........................................
Synopsis of this Prospectus.............................................
Variable Annuity Fee Table..............................................
Condensed Financial Information.........................................
Transamerica Occidental and the Separate Account........................
The Growth Portfolio....................................................
Description of the Contracts............................................
Surrender of a Contract.................................................
Death Benefits..........................................................
Charges under the Contracts.............................................
Annuity Period..........................................................
Federal Tax Status......................................................
Underwriter.............................................................
Voting Rights...........................................................
Legal Proceedings.......................................................
Table of Contents of the Statement of Additional Information............
This Prospectus does not constitute an offer to sell, or a solicitation
of any offer to purchase, the Contracts offered hereby in any state or
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such state. No salesperson or any other person has been
authorized to give any information or to make any representations other than
those contained in this Prospectus in connection with the offer described herein
and, if given or made, such information or representation must not be relied
upon.
- 2 -
<PAGE>
TERMS USED IN THIS PROSPECTUS
Accumulation Account: The account
maintained under each
Contract comprising all
Accumulation Units
purchased under a Contract
and, if applicable, any Net
Deposit not yet applied to
purchase Accumulation
Units.
Accumulation Account Value: The dollar value of an
Accumulation Account.
Accumulation Unit: A unit purchased by
the investment of a Net
Deposit in the Separate
Account and used to measure
the value of a Contract
Owner's interest under a
Contract prior to the
Retirement Date under the
Contract.
Annuity: A series of monthly payments provided under a Contract for
the Participant or his beneficiary. Annuity payments will be
due and payable only on the first day of a calendar month.
Annuity Conversion Rate: The rate
used in converting the
Accumulation Account Value
to an Annuity expressed as
the amount of the first
Annuity payment to which
the Participant or the
beneficiary is entitled for
each $1,000 of Accumulation
Account Value.
Annuity Unit: A unit used to determine the amount of each Variable Annuity
payment after the first.
Contract: Any one of the Individual Equity Investment Fund Contracts
(Annual Deposit, Single Deposit Deferred, or Single Deposit
Immediate) described in this Prospectus.
Contract Owner: The party to the Contract who is the owner of the Contract.
Generally, the Contract Owner will be the Participant.
Deposit: An amount paid to the Company pursuant to a Contract. (With
respect to some Contracts in which the term "Deposit" has
been replaced by the term "Purchase Payment," "Deposit" as
used herein shall also mean "Purchase Payment.")
Fund: The Transamerica Variable Insurance Fund, Inc., a
registered
open-end management investment company in which the
Separate Account invests.
Net Deposit: That portion of a Deposit remaining after deduction
of any
premium for Contract riders, charges for sales and
administrative expenses and for any applicable
premium taxes.
Participant: The individual on whose behalf a Contract is issued.
Generally, the Participant will be the Contract Owner.
Plan of Reorganization: The plan pursuant to which the Separate Account was
reorganized to its present form as a unit investment trust.
- 3 -
<PAGE>
Portfolio: The Growth Portfolio of the Transamerica Variable Insurance
Fund, Inc. The Separate Account invests exclusively in the
Portfolio.
Retirement Date: The date on which the first Annuity payment is payable under
a Contract.
Separate Account: Separate Account C of Transamerica Occidental Life Insurance
Company. Separate Account C is not part of Transamerica's
general account.
Variable Annuity: An Annuity with payments which vary in dollar amount
throughout the payment period in accordance with the
investment experience of the Growth Portfolio of the Fund.
Valuation Date: Any day the New York Stock Exchange is open for trading.
Valuation usually occurs as of 4:00 p.m. ET each Valuation
Date.
Valuation Period: The period from the
close of business on the
New York Stock Exchange on
one Valuation Date to the
close of trading on the New
York Stock Exchange on the
next following Valuation
Date.
Written Request:An original signature is required on all Written Requests. If a
signature on record does not compare with that on the Written
Request, Transamerica reserves the right to request a Bank
Signature Guarantee before processing the request. Written
Requests and other communications are deemed to be received
by the Company on the date they are actually received at the
Company's Home Office, unless they are received: (1) on a day
when the New York Stock Exchange is closed, or (2) after
1:00 p.m. Los Angeles, California time. In these two cases,
the Written Request will be deemed to be received on the next
day when the unit value is calculated.
- 4 -
<PAGE>
SYNOPSIS OF THIS PROSPECTUS
This Prospectus describes three types of individual variable annuity
contracts -- the Annual Deposit, Single Deposit Deferred and Single Deposit
Immediate. The Contracts are designed for non tax-qualified retirement programs.
Deposits made under the Contracts are allocated to the Separate Account which
invests solely in the Growth Portfolio of the Fund. The Growth Portfolio invests
principally in equity securities. (See "Description of the Contracts" on page
- ---.) The Contracts are no longer being offered for sale but additional Deposits
can be made on certain outstanding Contracts. Transamerica Securities Sales
Corporation is the principal underwriter ("Underwriter") of the Separate
Account. (See "Underwriter" on page __ .)
The Contracts. Three types of Contracts have been offered through the
Separate Account -- Annual Deposit,
Single Deposit Deferred, and Single Deposit Immediate.
The Annual Deposit Contract is a deferred variable annuity which
provides for payments to be made at least annually. The minimum payment is $10
and the aggregate minimum annual payment must be $120 in any Contract year.
Usually, a Contract was not issued for annual payments of less than $300.
Payments may be increased on a Contract anniversary, but annual payments may not
be increased to more than three times the first year's payments without the
consent of Transamerica.
The Single Deposit Deferred Contract provides a deferred variable
annuity. A minimum single payment of $1,000 must have been made when the
Contract is issued. Additional payments of at least $20 could have been made
anytime within the first five Contract years. Thereafter, Transamerica must give
its consent to accept further payments.
The Retirement Date for the Annual Deposit and Single Deposit Deferred
Contracts is the date the first annuity payment is made under the Contract. The
Retirement Date is specified in the application for the Annual Deposit and
Single Deposit Deferred Contracts. It may be changed by submitting a written
request to Transamerica at least 60 days before annuity payments begin.
The Single Deposit Immediate Contract provides an immediate variable
annuity. The minimum single payment accepted under the Contract is $2,500. The
Retirement Date specified by the Contract Owner may not be changed.
The Separate Account. Deposits made under the Contracts are allocated
to the Separate Account. The assets of the Separate Account are used to
purchase, at net asset value, shares of the Growth Portfolio. The Growth
Portfolio has a distinct investment objective and policies that are described in
the accompanying Prospectus for the Growth Portfolio. (See "The Growth
Portfolio" on page ---.)
The Accumulation Account Value, if any, and the amount of any annuity
payment will vary depending on the investment experience of the Growth Portfolio
and the amount of separate account and portfolio fees and expenses incurred.
(See "Charges Under the Contracts" on page ___.) The Contract Owner bears the
entire investment risk under the Contract. There is no guaranteed or minimum
Accumulation Account Value; therefore the proceeds of a surrender could be less
than the total amount of Deposits.
Surrenders and Partial Withdrawals. Annual Deposit and Single Deposit
Deferred Contracts may be surrendered prior to a selected Retirement Date for
the Accumulation Account Value. At any time before the earlier of the death of
the Annuitant or the Retirement Date, the Contract Owner may partially withdraw
Accumulation Account Value. Accumulation Account Value will be established at
the end of the Valuation Period in which the Written Request for surrender or
withdrawal is received. There is no surrender or withdrawal charge. A Contract
must be surrendered if a withdrawal reduces the Accumulation Account Value below
$10 for an Annual Deposit Contract or $20 for a Single Deposit Deferred
Contract. There are no surrender or withdrawal privileges for Single Immediate
Contracts.
- 5 -
<PAGE>
Amounts withdrawn or surrendered may be taxable and subject to a
penalty tax imposed by Federal tax law.
Charges and Expenses. Transamerica deducts a sales charge and an
administrative charge from each Deposit at the time of payment. A maximum 6.5%
sales charge and 2.5% administrative charge are deducted from each Deposit.
Charges may be reduced depending on the total dollar value of Deposits paid
under the Contract. (See "Variable Annuity Fee Table" on page ___.)
Transamerica also deducts a daily charge (the "Mortality and Expense
Risk Charge") equal to a percentage of the value of the net assets in the
Separate Account for the mortality and expense risks it has assumed. With
certain exceptions (see "Variable Annuity Fee Table" on page____), the rates at
which charges for expenses are assessed may not be changed during the life of
the Contract. The Contracts permit the Company to deduct a Mortality and Expense
Risk Charge from the Separate Account at the end of each Valuation Period at a
maximum annual rate of 1.10% of the Accumulation Account Value. The amount of
the Mortality and Expense Risk Charges will be waived or reduced on Contracts
outstanding as of the Date of the Reorganization to the extent that the sum of
Separate Account Annual Expenses and Portfolio Annual Expenses exceeds 1.40%
during any year. Currently the Mortality and Expense Risk Charge is assessed at
an annual rate of 0.55% of Accumulation Account Value.
Some states require the payment of premium taxes. Generally, a charge
for premium taxes is made against the Accumulation Account Value when conversion
is made to provide annuity benefits. However, in certain states, a tax will be
deducted from each Deposit. Presently, premium taxes range from 0.0% to 3.5%.
(See "Premium Taxes" on page ___.)
Because the Separate Account purchases shares of the Growth Portfolio,
the net assets of the Separate Account will reflect the investment advisory fee
and certain expenses incurred by the Growth Portfolio. The investment adviser of
the Growth Portfolio is paid an advisory fee of 0.75% of 1% of the value of the
average daily net assets of the Growth Portfolio. Presently, certain fees and
expenses of the Portfolio are waived or reimbursed. (See the accompanying
prospectus of the Growth Portfolio for further details).
Death Benefit. The Contracts provide a death benefit payable if the
Participant dies before the selected Retirement Date. Transamerica will pay the
beneficiary the Accumulation Account Value as of the date Transamerica receives
due proof of the deceased's death and payment instructions. (See "Death
Benefits" on page ___.)
Annuity Payments. The Contracts provide for a series of monthly annuity
payments to begin on the Retirement Date. The Contract Owner may select from
three variable payment options. The amount of the annuity payments depends on
the payment option chosen, the age of the person named to receive the annuity
payments (the "Annuitant"), and the value of the Contract on the Retirement
Date. The annuity options include alternatives designed to provide payments for
life (for either a single or joint life), with or without a guaranteed minimum
number of payments. (See "Annuity Period" on page ___.)
The minimum amount of the first annuity payments must be $20. If the
first monthly payment would be less than $20, Transamerica may make a single
payment equal to the total value of the Contract Owner's account, the
Accumulation Account Value.
Federal Tax Status. With respect to Contract Owners who are natural
persons, there should be no Federal income tax on increases in the Accumulation
Account Value until a distribution under the Contract occurs (e.g., a surrender
or annuity payment) or is deemed to occur (e.g., a pledge, loan or assignment of
a Contract). Generally, a portion of any distribution or deemed distribution
will be taxable as ordinary income. The taxable portion of certain distributions
will be subject to withholding unless the recipient elects otherwise. In
addition, a penalty tax may apply to certain distributions or deemed
distributions under the Contract. (See "Federal Tax Status," on page ___.) This
paragraph is applicable so long as the Contracts qualify as annuity contracts
for Federal income tax purposes. (See "FEDERAL TAX MATTERS--Tax Status of the
Contracts" in the Statement of Additional
- 6 -
<PAGE>
Information.)
VARIABLE ANNUITY FEE TABLE
The purpose of this table and the examples that follow is to assist the
Contract Owner in understanding the various costs and expenses imposed directly
or indirectly under the Contracts. The standardized tables and examples reflect
expenses of the Separate Account as well as the Portfolio. They assume the
highest deductions possible under the Contracts whether or not such deductions
actually would be made from an individual Contract Owner's account. The
information set forth below should be considered together with the narrative
provided under the heading "Charges and Deductions" on page ___ of this
Prospectus, and with the Portfolio's prospectus. In addition to the expenses
listed below, premium taxes may be applicable.
Contract Owner Transaction Expenses
Sales Load Imposed on Purchases (as a percentage of each Deposit): 6.50%
Total Deposits
Under the Contract Sales Expense
------------------ -------------
First $15,000........... 6.50%
Next $35,000........... 4.50%
Next $100,000.......... 2.00%
Excess ............... 0.50%
Administrative Expense Imposed on Purchases
(as a percentage of each Deposit): 2.50%
Total Deposits
Under the Contract Administrative Expense
------------------ ----------------------
First $15,000........... 2.50%
Next $35,000........... 1.50%
Next $100,000........... 0.75%
Excess ............... 0.00%
Maximum Total Contract Owner Transaction Expenses:1/ 9.00%
-
Total Contract Owner
Total Deposits Transaction Expenses
Under the Contract as % of Total Deposits
------------------ ----------------------
First $15,000........... 9.00%
Next $35,000........... 6.00%
Next $100,000........... 2.75%
Excess ............... 0.50%
Separate Account Annual Expenses:
(as a percentage of average daily separate account value )
Mortality and Expense Risk Charge...................... 0.55%2/
Administrative Expense Charge.......................... 0.00%
Other Expenses......................................... 0.00%
Total Separate Account Annual Expenses.......... 0.55%2/
- 7 -
<PAGE>
Growth Portfolio Annual Expenses:3/
(as a percentage of Portfolio average daily net assets, after fee waivers and
expense reimbursements)
Management Fee...................................... 0.75%
Other Expenses...................................... 0.10%
------
Total Portfolio Annual Expenses.............. 0.85%3/
- ----------------
1/ This is equivalent to 9.89% of the Net Deposit. Premium taxes are
not shown. Charges for premium taxes, if any, are deducted when paid which may
be upon annuitization. In certain states, a premium tax charge will be deducted
from each Deposit.
2/ The Contracts permit the Company to deduct a Mortality and Expense
Risk Charge at a maximum annual rate of 1.10% of the Accumulation Account Value.
Under the terms of the Plan of Reorganization, however, Transamerica has agreed
to waive or reimburse the Mortality and Expense Risk Charge on Contracts
outstanding as of the Date of the Reorganization to the extent that the sum of
Separate Account Annual Expenses and Portfolio Annual Expenses exceeds 1.40%
during any year.
3/ The Growth Portfolio commenced operation on November 1, 1996. Its
expenses for 1996 are estimated to be 0.10% after fee waivers and reimbursement,
and 0.35% without such waivers and reimbursements.
For more information on the Portfolio's fees and expenses, see the attached
prospectus for the Portfolio.
EXAMPLES
A Contract Owner would pay the following expenses on a $1,000
investment, assuming a 5% annual return on assets and the charges and expenses
reflected in the Variable Annuity Fee Table above:
Example #1: If the Contract is surrendered at the end of the applicable time
period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$103 $130 $160 $243
Example #2: If the Contract is not surrendered at the end of the periods shown:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$103 $130 $160 $243
The Examples should not be considered a representation of past or
future expenses and charges. Actual expenses may be greater or less than those
shown. Similarly, the assumed 5% annual rate of return is not an estimate or a
guarantee of future investment performance. See "Charges Under the Contract" on
page ___ in this Prospectus.
The Contracts are designed for retirement planning. Surrenders prior to
the Annuity Period are not consistent with the long-term purposes of the
Contract and tax penalties may apply. Premium taxes may be applicable.
- 8 -
<PAGE>
CONDENSED FINANCIAL INFORMATION
The Separate Account is permitted to use the financial data of its
corporate predecessor, Transamerica Occidental's Separate Account Fund C
("Separate Account Fund C"). The following condensed financial information is
derived from the financial statements of Separate Account Fund C that were
audited by Ernst & Young, LLP, the independent auditors for Separate Account
Fund C. The data should be read in conjunction with the financial statements,
related notes, and other financial information included in the Statement of
Additional Information. The information in the table relates to the financial
condition of Separate Account Fund C for each of the last ten fiscal years.
The Accumulation Unit values and number of Accumulation Units
outstanding for the periods shown are as follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Accumulation Unit value:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of year $12.291 $11.467 $9.384 $8.281 $5.885 $6.623 $4.959 $3.708 $3.293 $2.952
------- ------- -------- ---------------- -------- -------- ------------------------
End of year $18.786 $12.291 $11.467 $ 9.384 $ 8.281 $ 5.885 $ 6.623 $ 4.959 $ 3.708$ 3.293
======= ======= ======= ======= ======= ======= ======= ======= ==============
Number of Accumulation Units
outstanding at end of year
(000 omitted) 1,341 1,373 1,412 1,452 1,472 1,545 1,605 1,674 1,713 2,119
</TABLE>
TRANSAMERICA OCCIDENTAL AND THE SEPARATE ACCOUNT
Transamerica Occidental Life Insurance Company
Transamerica Occidental Life Insurance Company ("Transamerica" or the
"Company") is a stock life insurance company incorporated under the laws of the
State of California on June 30, 1906. Its Home Office is located at 1150 South
Olive Street, Los Angeles, California, 90015-2211. It has been a wholly-owned
direct or indirect subsidiary of Transamerica Corporation, 600 Montgomery
Street, San Francisco, California 94111, since March 14, 1930. The Company
presently provides individual life insurance, especially interest-sensitive
products, variable and term life insurance, fixed and flexible premium annuity
products, and reinsurance.
Subsidiaries of the Company include Transamerica Assurance Company,
Transamerica Life Insurance and Annuity Company, Transamerica Life Insurance
of Canada, Transamerica Occidental Life Insurance Company of Illinois and a
New York company, First Transamerica Life Insurance Company.
Published Ratings
Transamerica may from time to time publish in advertisements, sales
literature and reports to Contract Owners, the ratings and other information
assigned to it by one or more independent rating organizations such as A.M. Best
Company, Standard & Poor's, Moody's, and Duff & Phelps. The purpose of the
ratings is to reflect the financial strength and/or claims-paying ability of
Transamerica and should not be considered as bearing on the investment
performance of assets held in the Separate Account. Each year the A.M. Best
Company reviews the financial status of thousands of insurers, culminating in
the assignment of Best's Ratings. These ratings reflect their current opinion of
the relative financial strength and operating performance of an insurance
company in comparison to the norms of the life/health insurance industry. In
addition, the claims-paying ability of Transamerica as measured by Standard &
Poor's Insurance Ratings Services, Moody's, or Duff & Phelps may be referred to
in advertisements or sales literature or in reports to Contract Owners. These
ratings are opinions of an operating insurance company's financial capacity to
meet the obligations of its insurance and annuity policies in accordance with
their terms. Such
- 9 -
<PAGE>
ratings do not reflect the investment performance of the Separate Account or the
degree of risk associated with an investment in the Separate Account.
The Separate Account
The Separate Account was established on February 26, 1969 by
Transamerica's Board of Directors. Prior to November 1, 1996, the Separate
Account was organized as an open-end diversified management investment company
with its own portfolio of securities. On November 1, 1996, the Separate Account
was re-organized to its present form as a unit investment trust pursuant to a
Plan of Reorganization that was approved on June 26, 1995 by the Separate
Account's Board of Managers. The Contract Owners of the Separate Account
approved the reorganization on October 30, 1996.
The Separate Account is registered with the Commission under the
Investment Company Act of 1940 (the "1940 Act") as a unit investment trust. It
meets the definition of a separate account under the federal securities laws.
However, the Commission does not supervise the management or the investment
practices or policies of the Separate Account.
The assets of the Separate Account are owned by Transamerica but they
are held separately from the other assets of Transamerica. Section 10506 of the
California Insurance Law provides that the assets of a separate account are not
chargeable with liabilities incurred in any other business operation of the
insurance company (except to the extent that assets in the separate account
exceed the reserves and other liabilities of the separate account). Income,
gains and losses incurred on the assets in the Separate Account, whether or not
realized, are credited to or charged against the Separate Account without regard
to other income, gains or losses of Transamerica. Therefore, the investment
performance of the Separate Account is entirely independent of the investment
performance of Transamerica's general account assets or any other separate
account maintained by Transamerica. Obligations under the Contracts are
obligations of Transamerica.
THE GROWTH PORTFOLIO
The Growth Portfolio of the Transamerica Variable Insurance Fund
The Separate Account invests exclusively in the Growth Portfolio of the
Transamerica Variable Insurance Fund (the "Fund"). The Fund is an open-end,
diversified management investment company established as a Maryland Corporation
on June 23, 1995, as the successor to Transamerica Occidental's Separate Account
Fund C. The Fund currently consists of one investment portfolio, the Growth
Portfolio. (Additional Portfolios may be created from time to time.) By
investing in the Growth Portfolio, an investor becomes entitled to a pro-rata
share of all dividends and distributions arising from the net income and capital
gains on the investments of the Growth Portfolio. Likewise, an investor shares
pro-rata in any losses of the Portfolio.
Pursuant to an investment advisory agreement and subject to the
authority of the Fund's Board of Directors, Transamerica Occidental Life
Insurance Company (the "Company") serves as the Portfolio's investment adviser
and conducts the business and affairs of the Portfolio. The Company has engaged
an affiliate, Transamerica Investment Services, Inc. ("Investment Services") to
act as the Portfolio's sub-advisor to provide the day-to-day portfolio
management for the Portfolio.
The investment objective of the Growth Portfolio is to seek long-term
capital growth. Common stock (listed and unlisted) is the basic form of
investment. The Portfolio may also invest in debt securities and preferred stock
having a call on common stocks.
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The Fund currently offers shares of the Portfolio solely to the
Separate Account as a funding vehicle for the variable annuity contracts
supported by the Separate Account. The Fund does not offer the Portfolio's
shares directly to the general public. Shares of the Portfolio may, in the
future, be offered to other registered and unregistered separate accounts
supporting other variable annuity or variable life insurance contracts and to
qualified pension and retirement plans.
Meeting investment objectives depends on various factors, including,
but not limited to, how well the portfolio manager anticipates changing
economic and market conditions. THERE IS NO ASSURANCE THAT THE PORTFOLIO WILL
ACHIEVE ITS STATED OBJECTIVES.
An investment in the Contracts is not a deposit or obligation of, or
guaranteed or endorsed, by any bank, nor are the Contracts federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other government agency. Investing in the Contracts involves certain investment
risks, including possible loss of principal.
Additional information concerning the investment objective and policies
of the Growth Portfolio, the investment advisory and administrative services and
charges can be found in the current prospectus for the Portfolio which
accompanies this Prospectus. The Portfolio's prospectus should be read carefully
before any decision is made concerning the allocation of Deposits to the
Separate Account.
Addition, Deletion, or Substitution
Transamerica cannot guarantee that the Portfolio will always be
available for its variable annuity products, but in the unlikely event that the
Portfolio is not available, Transamerica will do everything reasonably
practicable to secure the availability of a comparable fund. Transamerica
retains the right to make changes in the Separate Account and in its
investments.
Transamerica reserves the right to eliminate the shares of any
Portfolio held by the Separate Account and to substitute shares of another
Portfolio or of another investment company for the shares of any Portfolio, if
the shares of the Portfolio are no longer available for investment or if, in
Transamerica's judgment, investment in any Portfolio would be inappropriate in
view of the purposes of the Separate Account. To the extent required by the 1940
Act, a substitution of shares attributable to the Contract Owner's interest in
the Separate Account will not be made without prior notice to the Contract Owner
and the prior approval of the Commission. Nothing contained herein shall prevent
the Separate Account from purchasing other securities for other series or
classes of variable annuity policies, or from effecting an exchange between
series or classes of variable policies on the basis of requests made by Contract
Owners.
The Separate Account may be divided into sub-accounts and new
sub-accounts may be established when, in the sole discretion of Transamerica,
marketing, tax, investment or other conditions so warrant. Any new sub-accounts
will be made available to existing Contract Owners on a basis to be determined
by Transamerica. Each additional sub-account will purchase shares in a Portfolio
or in another mutual fund or investment vehicle. Transamerica may also eliminate
one or more sub-accounts if, in its sole discretion, marketing, tax, investment
or other conditions so warrant. In the event any sub-account is eliminated,
Transamerica will notify Contract Owners and request a re-allocation of the
amounts invested in the eliminated sub-account.
In the event of any substitution or change, Transamerica may make such
changes in the Contract as may be necessary or appropriate to reflect such
substitution or change. Furthermore, if deemed to be in the best interests of
persons having voting rights under the Contracts, the Separate Account may be
operated as a management company under the 1940 Act or any other form permitted
by law, may be de-registered under such Act in the event such registration is no
longer required, or may be combined with one or more other separate accounts.
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DESCRIPTION OF THE CONTRACTS
The Contract Owner has all rights under the Contract during the
accumulation period. These include voting rights, selection of the annuitant,
surrendering any portion of the Contract values, electing an Annuity
commencement date and option and selection of beneficiaries.
The Contract Owner retains his or her voting rights and right to select
beneficiaries, if the Annuity option permits, once the Annuity begins.
After the death of the annuitant, the beneficiaries have the right to
the value, if any, remaining in the Contract.
Annual Deposit Individual Equity Investment Fund Contract provides a
deferred Variable Annuity ("Annual Deposit Contract"). This Contract provides
for Deposits to be made annually or more frequently, but no Deposit may be less
than $10 and the aggregate minimum Deposit must be $120 in any contract year.
Normally, Contracts will not be issued for annual Deposits of less than $300.
Deposits may be increased on a Contract anniversary, but annual Deposits may not
be increased to more than three times the first year's Deposit without consent
from the Company. The non-forfeiture provision of the Contract will be applied
if annual Deposits are not paid when due or during a 31-day grace period. The
effect of this provision is that if a Deposit is not received within five years
of the last Deposit date, Deposits may not be resumed, but Contract benefits
remain in full force.
Single Deposit Individual Equity Investment Fund Contract provides a
deferred Variable Annuity ("Single Deposit Deferred Contract"). This Contract
provides for a single Deposit when the Contract is issued. Additional Deposits
of at least $20 each may be made anytime within the first five Contract years.
Thereafter, the Company must give its consent to further Deposits. The minimum
initial Deposit is $1,000. The Company reserves the right to reduce the minimum.
A Retirement Date is specified in the application for Annual Deposit
and Single Deferred Contracts, but may be changed by a Written Request to the
Company at its Home Office at least 60 days before an Annuity is to commence.
Single Deposit Individual Equity Fund Investment Contract also provides
an Immediate Variable Annuity ("Single Deposit Immediate Contract"). This
Contract provides for a single Deposit to be accepted when the Contract is
issued which will begin an Annuity. The issue date of this Contract is the last
Valuation Day of the second calendar month preceding the Retirement Date
specified in the Contract. The minimum Deposit is $2,500. The Company reserves
the right to reduce the minimum. The Retirement Date may not be changed.
Net Deposits
Net Deposits are immediately credited to the Contract Owner's
Accumulation Account in the Valuation Period in which they are received at the
Company's Home Office.
Net Deposits are used to purchase Accumulation Units. The number of
Accumulation Units purchased with a Net Deposit is determined on the Valuation
Date on which the Net Deposit is invested in the Separate Account by dividing
the Net Deposit by the Accumulation Unit Value at the end of that Valuation
Date. The number of Accumulation Units resulting from each Net Deposit will not
change.
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Accumulation Unit Value
The Accumulation Unit Value was set at $1.00 on October 16, 1969, the
date the Separate Account commenced operations. The Accumulation Unit Value is
determined at the end of a Valuation Period by multiplying the Accumulation Unit
Value determined at the end of the immediate preceding Valuation Period by the
Investment Performance Factor for the current Valuation Period and reducing the
result by the mortality and expense risk charges. The value of an Accumulation
Unit is expected to change from Valuation Period to Valuation Period, reflecting
the investment experience of the Portfolio as well as the deduction for charges.
The Investment Performance Factor is determined at the end of each
Valuation Period and is the ratio of A/B where:
"A" is the value of the Separate Account as of the end of such
Valuation Period immediately prior to making any Deposits into and any
withdrawals from the Separate Account.
"B" is the value of the Separate Account as of the end of the preceding
Valuation Period immediately after making any Deposits into and any
withdrawals from the Separate Account, including any charges for
expense and mortality risks assessed against the Separate Account on
that date, from the Separate Account.
SURRENDER OF A CONTRACT
Surrender and withdrawal privileges apply only to Annual Deposit and
Single Deposit Deferred Contracts prior to Retirement Date. There are no
surrender or withdrawal privilege for Single Deposit Immediate Contracts.
A Written Request by the Contract Owner must be received at the Home
Office for either a withdrawal or surrender of Accumulation Account Value.
Accumulation Units will be cancelled with the equivalent dollar amount withdrawn
or surrendered. The Accumulation Unit Value used to determine the number of
Accumulation Units cancelled shall be the value established at the end of the
Valuation Period in which the Written Request was received. The Accumulation
Account Value less any applicable tax charge will be paid within seven days
following receipt of the Written Request. However, the Company may postpone such
payment: (1) if the New York Stock Exchange is closed or trading on the Exchange
is restricted, as determined by the Commission; (2) when an emergency exists, as
defined by the Commission's rules, and fair market value of the assets cannot be
determined; or (3) for other periods as the Commission may permit.
There are no charges for withdrawals or surrender of the Contract.
However, withdrawals and surrenders may be taxable and subject to penalty taxes,
as described below. (See "Federal Tax Status" on page __.)
A Contract must be surrendered through the Underwriter.
The Contract must be surrendered if a withdrawal reduces the
Accumulation Account Value below $10 for an Annual Deposit Deferred Contract or
$20 for a Single Deposit Deferred Contract.
Any Contract withdrawal may be repaid within five years after the date
of each withdrawal, but only one repayment can be made in any twelve month
period. The Company must be given concurrent Written Request of repayment. The
sales charges will not be deducted from the Deposit repayment, but the
administrative charge will be assessed.
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DEATH BENEFITS
Death Benefits--Before Retirement
(1) ANNUAL DEPOSIT AND SINGLE PREMIUM DEFERRED CONTRACTS:
In the event a Participant dies prior to the selected
Retirement Date, the Company will pay to the Participant's
beneficiary the Accumulation Account Value based on the
Accumulation Unit value determined on the Valuation Day
coinciding with or next following the later of (i) the date
adequate proof of death is received by the Company or (ii) the
date the Company receives notice of the method of payment
selected by the beneficiary. Subject to certain requirements
imposed by Federal tax law, upon Written Request after the
death of the Participant, the beneficiary may elect, in lieu
of the payment of such value in one sum, to have all or a part
of the Accumulation Account Value applied under one of the
forms of Annuities described under "Annuity Period," or elect
an optional method of payment subject to agreement by the
Company, and to compliance with any applicable federal and
state law.
(2) SINGLE PREMIUM IMMEDIATE CONTRACT:
In the event a Participant dies prior to the selected
Retirement Date, the Company will pay to the Participant's
beneficiary the Accumulation Account Value based on the
Accumulation Unit value determined on the Valuation Day
coinciding with or next following the date proof of death is
received by the Company.
Death Benefit--After Retirement
If the Participant's death occurs on or after the Retirement Date,
death benefits, if any, payable to the beneficiary shall be as provided under
the Annuity option or elected optional method of payment then in effect.
CHARGES UNDER THE CONTRACTS
Charges Assessed Against The Deposits
Sales Charge. The Company makes a deduction from each Deposit for sales
expenses. No such charge will be assessed against Deposits made from insurance
or annuity policies issued by the Company which are transferred to the Separate
Account. The charge for sales expense ranges from 6.5% to 0.5% of each deposit.
(See "Variable Annuity Fee Table" on page ___.)
The sales expense charge is retained by the Company as compensation for
the cost of selling the Contracts. The Company pays the Underwriter for the sale
of the Contracts. (See "Underwriter" on page ____ for more information about the
Underwriter.) The distribution expenses may exceed amounts deducted from
Deposits as sales expenses and will be paid from the Company's surplus,
including profits, if any, from the mortality and expense risk charges. The
Company pays the sales expense charge to the Underwriter as full commission.
Administrative Charge. The Company also makes a deduction from each
Deposit for administrative expenses. The charge for the administrative expense
ranges from 2.5% to 0.0% of each deposit (See "Variable Annuity Fee Table" on
page ____.) The administrative expense charge will be retained by the Company.
This charge is used to pay for all record keeping and administrative functions
related to the Contracts and each Contract Owner's account, including issuance
of the Contract, making annuity payments, legal and accounting fees and reports
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to Contract Owners. The charge has been established at a level that does not
exceed anticipated cost.
Charges Assessed Against the Separate Account
Mortality and Expense Risk Charge. The Contracts permit the Company to
deduct a Mortality and Expense Risk Charge from the Accumulation and Annuity
Unit Values at the end of each Valuation Period at a maximum annual rate of
1.10% (approximately .77% for mortality risk and .33% for expense risk.) Amounts
of such charges may be withdrawn periodically from the Separate Account. Under
the terms of the Plan of Reorganization, Transamerica has agreed to waive or
reimburse mortality and expense risk charges on Contracts outstanding as of the
Date of the Reorganization to the extent that the sum of Separate Account Annual
Expenses and Portfolio Annual Expenses exceeds 1.40% during any year. Currently,
the Mortality and Expense Risk Charge is assessed at an annual rate of 0.55% of
the Accumulation Account Value.
The Mortality and Expense Risk Charge compensates the Company for
bearing certain mortality and expense risks under the Contracts. The mortality
risk borne by Transamerica arises from its contractual obligation to make
annuity payments (determined in accordance with the annuity tables and other
provisions contained in the Contracts) regardless of how long all Annuitants or
any individual Annuitant may live. This undertaking assures that neither a
Contract Owner's own longevity, nor an improvement in general life expectancy,
will adversely affect the monthly annuity payments that a beneficiary will
receive under the Contract. The mortality risk assumed by Transamerica is the
risk that the persons on whose life annuity payments depend, as a group, will
live longer than Transamerica's actuarial tables predict. In this event,
Transamerica guarantees that annuity payments will not be affected by a change
in mortality experience that results in the payment of greater annuity income
than assumed under the annuity options in the Contract.
The expense risk assumed by Transamerica is the risk that
Transamerica's actual expenses in issuing and administering the Contracts and
operating the Separate Account will be more than the charges assessed for such
expenses.
There are no other fees assessed against the Separate Account.
Portfolio Expenses
Because the Separate Account purchases shares of the Portfolio, the net
assets of the Separate Account will reflect the investment advisory fees and
other operating expenses incurred by the Portfolio. A complete description of
the fees, expenses, and deductions from the Growth Portfolio can be found in the
Portfolio's prospectus.
Premium Taxes
Some states and governmental entities require the payment of premium
taxes on annuity contracts issued by insurance companies. Generally, the
Contract Owner's residence determines the existence and the rate of tax.
Presently, premium taxes range from 0% to 3.5%.
The timing of the premium tax levy varies from one taxing authority to
another. Generally, a charge for premium taxes is made against the Accumulation
Account Value when conversion is made to provide Annuity benefits. However, in
certain states, a tax will be deducted from each Deposit. If a tax is deducted
from a Deposit, a tax will not be similarly assessed when conversion is made to
provide Annuity benefits. State laws are subject to change, and any change will
be implemented and may raise or lower the premium tax charge.
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ANNUITY PERIOD
A Participant may select an Annuity option at any age, by Written
Request received by the Company at least 60 days prior to commencement of an
Annuity. The monthly Annuity benefit is determined by the Accumulation Account
Value, the age of the Participant, and any joint annuitant and the option
selected.
The Contracts have three standard options:
(1) A Variable Annuity with monthly payments during the
lifetime of the Participant. No minimum number of payments is
guaranteed, so that only one such payment is made if the Participant
dies before the second payment is due,
(2) A Variable Annuity paid monthly to the Participant and any
joint annuitant as long as either shall live. No minimum number of
payments is guaranteed, so that only one such payment is made if both
the Participant and joint annuitant die before the second payment is
due, and
(3) A Variable Annuity paid monthly during the lifetime of the
Participant with a minimum guaranteed period of 60, 120 or 180 months.
If a Participant dies during the minimum period, the unpaid
installments for the remainder of the minimum period will be payable to
the beneficiary. However, the beneficiary may elect the commuted value
to be paid in one sum. The value will be determined on the Valuation
Day the Written Request is received in the Home Office.
Upon the Company's approval, other options may be selected. The form of
Annuity with the fewest number of guaranteed monthly payments will provide the
largest monthly payments.
If the Participant does not select any annuity option or a lump-sum
payment, the funds remain in the Accumulation Account.
The minimum account on the first monthly payment is $20. If the first
monthly payment would be less than $20, the Company may make a single payment
equal to the total value of the Contract Owners' Accumulation Account.
For information regarding the calculation of annuity payments, see the
Annuity Payments section of the Statement of Additional Information.
FEDERAL TAX STATUS
Introduction
The following discussion is a general description of Federal 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 a Contract. Any person concerned about these tax implications
should consult a competent tax adviser before initiating any transaction. This
discussion is based upon the Company's understanding of the present Federal
income tax laws as they are currently interpreted by the Internal Revenue
Service. No representation is made as to the likelihood of the continuation of
the present Federal income tax laws or the current interpretation by the
Internal Revenue Service. Moreover, no attempt has been made to consider any
applicable state or other tax laws.
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Tax Status of the Contract
The following discussion is based on the assumption that the Contract
qualifies as an annuity contract for Federal income tax purposes. The Statement
of Additional Information discusses the requirements for qualifying as an
annuity.
Taxation of Annuities
1. In General
Section 72 of the Internal Revenue Code ("Code") governs taxation of
annuities in general. The Company believes that an Owner who is a natural person
generally is not taxed on increases in the value of a Contract until
distribution occurs by withdrawing all or part of the Accumulation Account Value
(e.g., partial withdrawals and surrenders) or as Annuity Payments under the
Annuity option elected. For this purpose, the assignment, pledge, or agreement
to assign or pledge any portion of the Accumulation Account Value 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.
The Owner of any annuity contract who is not a natural person generally
must include in income any increase in the excess of the Accumulation Account
Value over the "investment in the contract" (discussed below) during the taxable
year with respect to deposits made after February 28, 1986. There are some
exceptions to this rule and a Contract Owner that is not a natural person may
wish to discuss these with a competent tax adviser.
The following discussion generally applies only to a Contract owned by
a natural person.
2. Surrenders
In the case of a surrender before the Retirement Date, under Code
section 72(e), amounts received are generally first treated as taxable income to
the extent that the Accumulation Account Value immediately before the surrender
exceeds the "investment in the contract" at that time (this does not apply to
amounts allocable to investments made prior to August 14, 1982, nor the income
therefrom). Any additional amount withdrawn is not taxable. Generally, the
"investment in the contract" will be the total amount of Deposits made, less any
amount received under the Contract, to the extent that such amount received was
excluded from gross income.
3. Annuity Payments
Although tax consequences may vary depending on the annuity option
elected under the Contract, under Code section 72(b), generally gross income
does not include that part of any amount received as an annuity under an annuity
contract that bears the same ratio to such amount as the "investment in the
contract" bears to the expected return at the Retirement Date. In this respect
(prior to recovery of the "investment in the contract"), there is generally no
tax on the amount 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 income
payment is taxable. In all cases, after the "investment in the contract" is
recovered, the full amount of any additional annuity payments is taxable.
4. Penalty Tax
In the case of a distribution there may be imposed a Federal penalty
tax equal to 10% of the amount treated as taxable income. In general, however,
there is no penalty tax on distributions: (1) made on or after the date on which
the Contract Owner attains age 59 1/2; (2) made as a result of death or
disability of the Contract Owner; (3) received in substantially equal periodic
payments as a life annuity or a joint and surviving annuity for the lives or
life expectancies of the taxpayer and the taxpayer's "designated beneficiary";
(4) from a qualified plan (except as
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provided in Code section 72(t)); (5) allocable to "investment in the contract"
before August 14, 1982; (6) under a qualified funding asset (as defined in Code
section 130(d)); (7) under an immediate annuity (as defined in Code section
72(u)(4)), or (8) from Contracts which are purchased by an employer on
termination of certain types of qualified plans and which are held by the
employer until the employee separates from service.
5. Transfers, Assignments, or Exchanges of the Contract
A transfer of ownership of a Contract, the irrevocable designation of
an Annuitant or other beneficiary who is not also the Contract Owner, or the
exchange of a Contract may result in certain tax consequences to the Contract
Owner that are not discussed herein. An Owner contemplating any such transfer,
assignment, or exchange of a Contract should contact a competent tax adviser
with respect to the potential tax effects of such a transaction.
6. Multiple Contracts
All non-qualified deferred annuity contracts entered into after October
21, 1988 that are issued by the Company (or its affiliates) to the same Contract
Owner during any single calendar year are treated as one annuity contract for
purposes of determining the amount includible in gross income under section
72(e) of the Code. The Treasury Department has specific authority to issue
regulations to prevent the avoidance of section 72(e) through the serial
purchase of annuity contracts or otherwise. In addition, there may be other
situations (for example, the combination purchase of an immediate annuity and a
deferred annuity) in which the Internal Revenue Service or the Treasury may
conclude that it may be appropriate to aggregate two or more annuity contracts
purchased by the same Contract Owner.
7. Withholding
Annuity 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. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions.
8. Death Benefits
Amounts may be distributed from a Contract because of the death of a
Participant or Owner. Generally, such amounts are includible in the income of
the recipient as follows: (i) if distributed in a lump sum, they are treated
like a surrender, or (ii) if distributed under an annuity option, they are
treated like an annuity payment.
9. Other Tax Consequences
As noted above, the foregoing discussion of the Federal income tax
consequences under the Contract is general in nature and 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 the Company's understanding of current Federal law and the law may
change. Federal gift and estate and state and local estate, inheritance, and
other tax consequences of ownership or receipt of distributions under the
Contract depend on the individual circumstances of each Contract Owner or
recipient of the distribution. A competent tax adviser should be consulted for
further information.
10. 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
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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).
UNDERWRITER
Transamerica Securities Sales Corporation ("TSSC") is the principal
Underwriter for the Separate Account's Contracts. Its principal offices are
located at is 1150 South Olive Street, Los Angeles, California 90015-2211. It is
a wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which is wholly-owned by Transamerica Corporation. TSSC may also serve as an
underwriter and distributor of other separate accounts of Transamerica and
affiliates of Transamerica. TSSC is registered with the Commission as a
broker/dealer and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Transamerica pays TSSC for acting as the principal underwriter
under a distribution agreement.
Prior to November 1, 1996, Transamerica Financial Resources, Inc.
("TFR") was the principal underwriter for the Contracts. TFR is a wholly-owned
subsidiary of Transamerica Insurance Company of California and is registered
with the Commission as a broker/dealer and is a member of the NASD.
VOTING RIGHTS
In accordance with its view of current applicable law, the Company will
vote Portfolio shares held in the Separate Account at regular and special
shareholder meetings of the Fund in accordance with instructions received from
persons having voting interests in the Separate Account. If, however, the 1940
Act or any regulation thereunder should be amended, or if the present
interpretation thereof should change, or the Company otherwise determines that
it is allowed to vote the shares in its own right, it may elect to do so.
The number of votes which a Contract Owner may cast is based on the
Accumulation Account Value established on a Valuation Date not more than 100
days prior to a meeting date of Contract Owners and will be computed in the
following manner:
(1) When the Valuation Date is prior to the Retirement Date, the number
of votes will equal the Contract Owner's Accumulation Account Value divided by
100;
(2) When the Valuation Date is on or after the Retirement Date, the
number of votes will equal the amount of the reserve established to meet
Variable Annuity obligations related to the Contract divided by 100.
Accordingly, as the amount of the reserve diminishes during the Annuity payment
period, the number of votes which a Contract Owner may cast decreases.
The number of votes will be rounded to the nearest vote; however, each
Contract Owner will have at least one vote.
To be entitled to vote, a Contract Owner must have been a Contract
Owner on the date on which the number of votes was determined.
Each Contract Owner shall receive a notice of the meeting of
Portfolio's shareholders and a statement of the number of votes attributable to
his/her Contract. Such notice will be mailed to the Contract Owner at the
address maintained in the Company's records at least 20 days prior to the date
of the meeting.
Separate Account votes as to which no timely instructions are received
and shares held by the Company in the Separate Account as to which no Contract
Owner or Annuitant has a beneficial interest will be voted in proportion to the
voting instructions which are received with respect to all Contracts
participating in the Separate Account. Voting instructions to abstain on any
item to be voted upon will be applied to reduce the total number of
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votes eligible to be cast on a matter.
Changes To Variable Annuity Contracts
The Company has the right to amend the Contracts to meet current
applicable federal and state laws or regulations or to provide more favorable
Annuity Conversion Rates. Each Contract Owner will be notified of any amendment
to the Contract relating to any changes in federal or state laws.
The Contract Owner may change beneficiaries, Annuity commencement date
or Annuity option prior to the Annuity commencement date.
Inquiries
Contract Owners may request information concerning their Variable
Annuity Contract by contacting a Company agent or by a Written Request mailed
directly to the Company.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate
Account is a party; nor are there material legal proceedings involving the
Separate Account to which Transamerica or the Underwriter are parties.
- 20 -
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF
ADDITIONAL INFORMATION
Page
GENERAL INFORMATION AND HISTORY.......................................
ANNUITY PAYMENTS......................................................
CALCULATION OF YIELDS AND TOTAL RETURNS...............................
FEDERAL TAX MATTERS...................................................
THE UNDERWRITER.......................................................
SAFEKEEPING OF VARIABLE ACCOUNT ASSETS................................
STATE REGULATION......................................................
LEGAL MATTERS.........................................................
ACCOUNTANTS...........................................................
RECORDS AND REPORTS...................................................
FINANCIAL STATEMENTS..................................................
- 21 -
<PAGE>
(This page intentionally left blank)
- 22 -
<PAGE>
(LOGO)
(a prospectus)
----------------------------------------------------------------------------
AUDITORS--Ernst & Young LLP [DATE]
--------------------------------------------------------------------------
ISSUED BY
Transamerica Occidental Life Insurance Company
1150 South Olive Street
Los Angeles, California 90015-2211
(213) 742-3065
(LOGO)
Transamerica Occidental
Life Insurance Company
TFM-1007 ED.
- 23 -
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
Separate Account C
of Transamerica Occidental Life Insurance Company
Individual Equity Investment Fund Contracts ("Contracts")
For Non-Tax Qualified Individual Retirement Plans
1150 South Olive Street, Los Angeles, California 90015-2211
This Statement of Additional Information expands upon subjects
discussed in the current Prospectus for the Contracts offered by Transamerica
Occidental Life Insurance Company (the "Company") through Separate Account C. A
copy of the Prospectus may be obtained free of charge by writing to the Company
at the above address or by calling (213) 742-3065. Terms used in the current
Prospectus for the Contracts are incorporated by reference into this Statement.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND SHOULD BE READ ONLY IN CONJUNCTION WITH THE PROSPECTUS
FOR THE CONTRACT AND THE PORTFOLIO.
Dated November 1, 1996
<PAGE>
TABLE OF CONTENTS
Page
GENERAL INFORMATION AND HISTORY.....................................
ANNUITY PAYMENTS....................................................
CALCULATION OF YIELDS AND TOTAL RETURNS.............................
FEDERAL TAX MATTERS.................................................
THE UNDERWRITER.....................................................
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS..............................
STATE REGULATION....................................................
LEGAL MATTERS.......................................................
ACCOUNTANTS.........................................................
RECORDS AND REPORTS.................................................
FINANCIAL STATEMENTS................................................
B-2
<PAGE>
GENERAL INFORMATION AND HISTORY
Transamerica Occidental Life Insurance Company (the "Company") was
formerly known as Occidental Life Insurance Company of California. The name
change occurred approximately on September 1, 1981.
The Company is wholly-owned by Transamerica Insurance Corporation of
California, which is in turn wholly-owned by Transamerica Corporation.
Transamerica Corporation is a financial services organization which engages
through its subsidiaries in consumer lending, commercial lending, leasing, life
insurance and real estate and asset management services.
ANNUITY PAYMENTS
Amount of First Annuity Payment
ANNUAL DEPOSIT AND DEFERRED CONTRACTS:
At a Participant's selected Retirement Date, the Accumulation Account
Value based on the Accumulation Unit value established on the last
Valuation Date in the second calendar month preceding his/her
Retirement Date is applied to the appropriate Annuity Conversion Rate
under the Contract, according to the Participant's, and any joint
annuitant's, attained age at nearest birthday and the selected form of
Annuity, to determine the dollar amount of the first Variable Annuity
payment. The Annuity Conversion rates are based on the following
assumptions: (i) Investment earnings at 3.5% per annum, and (ii)
Mortality -The Annuity Table for 1949, ultimate three year age setback.
IMMEDIATE CONTRACT:
The Net Deposit applicable under the Contract is applied to the Annuity
Conversion Rate for this Contract by the Company according to the
Participant's, and any joint annuitant's, attained age at nearest
birthday and selected form of Annuity, to determine the dollar amount
of the first Variable Annuity payment. The Annuity Conversion Rates are
based on the following assumptions: (i) Investment earnings at 3.5% per
annum, and (ii) Mortality - The Annuity Table for 1949, two year age
setback.
Amount of Subsequent Annuity Payments
The amount of a Variable Annuity payment after the first is determined
by multiplying the number of Annuity Units by the Annuity Unit value established
on the last Valuation Date in the second calendar month preceding the date such
payment is due.
B-3
<PAGE>
The Annuity Conversion Rates reflect the assumed net investment
earnings rate of 3.5%. Each annuity payment will vary as the actual net
investment earnings rate varies from 3.5%. If the actual net investment earnings
rate were equal to the assumed rate, Annuity payments would be level. If the
actual Net Investment Rate were lower than the assumed rate, Annuity payments
would decrease.
Number of Annuity Units
The number of the Participant's Annuity Units is determined at the time
the Variable Annuity is effected by dividing the dollar amount of the first
Variable Annuity payment by the Annuity Unit Value established on the last
Valuation Date in the second calendar month preceding the Retirement Date. The
number of Annuity Units, once determined, will remain fixed except as affected
by the normal operation of the form of Annuity, or by a late Deposit. Late
Deposit means a Deposit received by the Company after the Valuation Date in the
second calendar month preceding the Retirement Date.
Annuity Unit Value
On October 16, 1969, the value of an Annuity Unit was set at $1.00.
Thereafter, at the end of each Valuation Period, the Annuity Unit value is
established by multiplying the value of an Annuity Unit determined at the end of
the immediately preceding Valuation Period by the Investment Performance Factor
for the current Valuation Period, and then multiplying that product by an
assumed earnings offset factor for the purpose of offsetting the effect of an
investment earnings rate of 3.5% per annum which is assumed in the Annuity
Conversion Rates for the Contracts. The result is then reduced by a charge for
mortality and expense risks (see "Charges under the Contract" at page 11 of the
Prospectus).
CALCULATION OF YIELDS AND TOTAL RETURNS
Separate Account Yield Calculations
Transamerica may from time to time disclose the current
annualized yield of the Separate Account for 30-day periods. The
annualized yield of the Separate Account refers to the income generated
by the Separate Account over a specified 30-day period. Because this
yield is annualized, the yield generated by the Separate Account during
the 30-day period is assumed to be generated each 30-day period. The
yield is computed by dividing the net investment income per
Accumulation Unit earned during the period by the price per unit on the
last day of the period, according to the following formula:
YIELD 2{a - b+1}6-1
cd
Where:
B-4
<PAGE>
a = net investment income earned during the period by the Portfolio
attributable to the shares owned by the Separate Account.
b = expenses for the Separate Account accrued for the period
(net of reimbursements).
c = the average daily number of Accumulation Units outstanding
during the period.
d = the maximum offering price per Accumulation Unit on the last
day of the period.
Net investment income will be determined in accordance with
rules established by the Commission. Accrued expenses will include all
recurring fees that are charged to all Policies. Because of the charges
and deductions imposed by the Separate Account, the yield for the
Separate Account will be lower than the yield for the corresponding
Portfolio. The yield on amounts held in the Separate Account normally
will fluctuate over time. Therefore, the disclosed yield for any given
period is not an indication or representation of future yields or rates
of return. The Separate Account's actual yield will be affected by the
types and quality of portfolio securities held by the Portfolio, and
its operating expenses.
Standard Total Return Calculations
Transamerica may from time to time also disclose average
annual total returns for the Separate Account for various periods of
time. Average annual total return quotations are computed by finding
the average annual compounded rates of return over one, five and ten
year periods that would equate the initial amount invested to the
ending redeemable value, according to the following formula:
P{1+T}n = ERV
Where:
P a hypothetical initial payment of $1,000 T average
annual total return n number of years ERV ending
redeemable value of a hypothetical $1,000 payment made at the
beginning of the one, five, or ten-year period at the
end of the one, five or ten-year period (or
fractional portion thereof).
All recurring fees are recognized in the ending redeemable
value.
B-5
<PAGE>
FEDERAL TAX MATTERS
Tax Status of the Contract
Diversification Requirements: Section 817(h) of the Code generally
provides that in order for a variable contract which is based on a segregated
asset account to qualify as an annuity contract under the Code, the investments
made by such account must be "adequately diversified" in accordance with
Treasury regulations. The Treasury regulations issued under Section 817(h)
(Treas. Reg. ss. 1.817-5) apply a diversification requirement to the Separate
Account, through the Portfolio, intends to comply with the diversification
requirements.
Distribution Requirements: In order to be treated as an annuity
contract for Federal income tax purposes, Section 72(s) of the Code requires any
nonqualified contract issued after January 18, 1985, to provide that (a) if any
Contract Owner dies on or after the annuity starting date but prior to the time
the entire interest in the Contract has been distributed, the remaining portion
of such interest will be distributed at least as rapidly as under the method of
distribution being used as of the date of that Contract Owner's death; and (b)
if any Contract Owner dies prior to the annuity starting date, the entire
interest in the Contract will be distributed within five years after the date of
the Contract Owner's death. These requirements will be considered satisfied as
to any portion of the Contract Owner's interest which is payable to or for the
benefit of a "designated beneficiary" and which is distributed over the life of
such "designated beneficiary" or over a period not extending beyond the life
expectancy of that Beneficiary, provided that such distributions begin within
one year of that Contract Owner's death. The Contract Owner's "designated
beneficiary" is the person designated by such Contract Owner as a beneficiary
and to whom ownership of the Contract passes by reason of death and must be a
natural person. However, if the Contract may be continued with the surviving
spouse as the new Contract Owner, an endorsement may be continued with the
surviving spouse as the new Contract Owner. An endorsement has been added to
these Contracts to comply with these new requirements.
Taxation of the Company
The Company at present is taxed as a life insurance company under Part
I of Subchapter L of the Code. The Separate Account is treated as part of the
Company and, accordingly, will not be taxed separately as a "regulated
investment company" under Subchapter M of the Code. The Company does not expect
to incur any Federal income tax liability with respect to investment income and
net capital gains arising from the activities of the Separate Account retained
as part of the reserves under the Contract. Based on this expectation, it is
anticipated that no charges will be made against the Separate Account for
Federal income taxes. If, in future years, any Federal income taxes are incurred
by the Company with respect to the Separate Account, then the Company may make a
charge to the Separate Account.
Under current laws, the Company may incur state and local taxes in
certain jurisdictions. At present, these taxes are not significant. If there is
a material change in applicable state or
B-6
<PAGE>
local tax laws, charges may be made for such taxes or reserves for such taxes,
if any, attributable to the Separate Account.
UNDERWRITER
Transamerica Securities Sales Corporation ("TSSC") is the principal
Underwriter for the Separate Account's Contracts. Its principal offices are
located at is 1150 South Olive Street, Los Angeles, California 90015-2211. It is
a wholly-owned subsidiary of Transamerica Insurance Corporation of California,
which is wholly-owned by Transamerica Corporation. TSSC may also serve as an
underwriter and distributor of other separate accounts of Transamerica and
affiliates of Transamerica. TSSC is registered with the Commission as a
broker/dealer and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Transamerica pays TSSC for acting as the principal underwriter
under a distribution agreement.
Prior to November 1, 1996, Transamerica Financial Resources, Inc.
("TFR") was the principal underwriter for the Contracts. TFR is a wholly-owned
subsidiary of Transamerica Insurance Company of California and is registered
with the Commission as a broker/dealer and is a member of the NASD.
During the past three years, TFR received from the sales of the
Contracts total payments of $1,148 in 1993, $873 in 1994 and $282 in 1995.
SAFEKEEPING OF SEPARATE ACCOUNT ASSETS
Title to the assets of the Separate Account is held by Transamerica.
The assets of the Separate Account are kept separate and apart from
Transamerica's general account assets. Records are maintained of all purchases
and redemptions of Portfolio shares held by the Separate Account.
STATE REGULATION
Transamerica is subject to the insurance laws and regulations of all
the states where it is licensed to operate. The availability of certain Contract
rights and provisions depends on state approval and/or filing and review
processes. Where required by state law and regulation, the Contract will be
modified accordingly.
LEGAL MATTERS
Advice regarding certain legal matters concerning the federal
securities laws applicable to the issue and sale of the Contracts has been
provided by Sutherland, Asbill & Brennan. The
B-7
<PAGE>
organization of Transamerica, Transamerica's authority to issue the Contracts,
and the validity of the form of the Contracts have been passed upon by James W.
Dederer, Executive Vice President, General Counsel and Corporate Secretary of
Transamerica.
ACCOUNTANTS
The financial statements of Transamerica Occidental Life Insurance
Company included in this Statement of Additional Information have been audited
by Ernst & Young, LLP, independent auditors, as set forth in their reports
appearing below, and are included in reliance upon such reports given on their
authority as experts in accounting and auditing. Ernst & Young LLP's address is
515 South Flower Street, Los Angeles, California 90071.
RECORDS AND REPORTS
All records and accounts relating to the Separate Account will be
maintained by Transamerica. As presently required by the 1940 Act and
regulations promulgated thereunder pertaining to the Separate Account, reports
containing such information as may be required under the 1940 Act or by other
applicable law or regulation will be sent to the Contract Owner semi-annually at
the Contract Owner's last known address of record.
FINANCIAL STATEMENTS
The consolidated financial statements of Transamerica should be
considered only as bearing on the ability of Transamerica to meet its
obligations under the Contracts. They should not be considered as bearing on the
investment performance of the assets held in the Separate Account.
B-8
<PAGE>
Audited Consolidated Financial Statements
Transamerica Occidental Life Insurance Company and Subsidiaries
December 31, 1995
<PAGE>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Audited Consolidated Financial Statements
December 31, 1995
Audited Consolidated Financial Statements
Report of Independent Auditors........................... 1
Consolidated Balance Sheet............................... 2
Consolidated Statement of Income......................... 3
Consolidated Statement of Shareholder's Equity........... 4
Consolidated Statement of Cash Flows..................... 5
Notes to Consolidated Financial Statements............... 6
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Transamerica Occidental Life Insurance Company
We have audited the accompanying consolidated balance sheet of Transamerica
Occidental Life Insurance Company and Subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of income, shareholder's equity,
and cash flows for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Transamerica
Occidental Life Insurance Company and Subsidiaries at December 31, 1995 and
1994, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
As discussed in Note A, the Company changed its method of accounting for certain
debt securities effective January 1, 1994.
ERNST & YOUNG LLP
February 14, 1996
<PAGE>
<TABLE>
<CAPTION>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
December 31
1995 1994
--------------------- -------------
(In thousands, except
for share data)
ASSETS
Investments:
<S> <C> <C>
Fixed maturities available for sale $ 25,997,403 $ 21,006,469
Equity securities available for sale 307,881 201,011
Mortgage loans on real estate 565,086 366,727
Investment real estate 38,376 69,246
Policy loans 426,377 412,938
Other long-term investments 62,536 50,079
Short-term investments 211,500 144,163
--------------------- ---------------------
27,609,159 22,250,633
Cash 49,938 42,916
Accrued investment income 394,008 363,121
Accounts receivable 174,266 202,456
Reinsurance recoverable on paid and unpaid losses 1,957,160 1,490,491
Deferred policy acquisitions costs 1,974,211 2,480,474
Deferred tax assets - 164,513
Other assets 257,333 241,733
Separate account assets 2,533,424 1,666,451
--------------------- ---------------------
$ 34,949,499 $ 28,902,788
===================== =====================
LIABILITIES AND SHAREHOLDER'S EQUITY
Policy liabilities:
Policyholder contract deposits $ 22,057,773 $ 19,281,515
Reserves for future policy benefits 5,245,233 4,846,072
Policy claims and other 542,511 555,289
--------------------- ---------------------
27,845,517 24,682,876
Income tax liabilities 587,801 67,870
Accounts payable and other liabilities 534,866 567,300
Separate account liabilities 2,533,424 1,666,451
--------------------- ---------------------
31,501,608 26,984,497
Shareholder's equity:
Common Stock ($12.50 par value):
Authorized--4,000,000 shares
Issued and outstanding--2,206,933 shares 27,587 27,587
Additional paid-in capital 333,578 319,279
Retained earnings 2,171,412 1,921,232
Foreign currency translation adjustments (23,618) (28,347)
Net unrealized investment gains (losses) 938,932 (321,460)
--------------------- ---------------------
3,447,891 1,918,291
--------------------- ---------------------
$ 34,949,499 $ 28,902,788
===================== =====================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
Year Ended December 31
1995 1994 1993
--------------- --------------- ----------
(In thousands)
Revenues:
<S> <C> <C> <C>
Premiums and other considerations $ 1,811,888 $ 1,430,019 $ 1,212,680
Net investment income 1,972,759 1,771,575 1,724,301
Other operating revenue - 13,273 -
Net realized investment gains 28,112 20,730 44,887
--------------- --------------- ---------------
TOTAL REVENUES 3,812,759 3,235,597 2,981,868
Benefits:
Benefits paid or provided 2,587,468 2,116,125 1,993,013
Increase in policy reserves and liabilities 236,205 204,159 121,325
--------------- --------------- ---------------
2,823,673 2,320,284 2,114,338
Expenses:
Amortization of deferred policy acquisition costs 182,123 176,033 169,457
Salaries and salary related expenses 145,681 133,591 127,130
Other expenses 200,339 190,500 182,193
--------------- --------------- ---------------
528,143 500,124 478,780
--------------- --------------- ---------------
TOTAL BENEFITS AND EXPENSES 3,351,816 2,820,408 2,593,118
--------------- --------------- ---------------
INCOME BEFORE INCOME TAXES 460,943 415,189 388,750
Provision for income taxes 149,647 143,491 138,997
--------------- --------------- ---------------
NET INCOME $ 311,296 $ 271,698 $ 249,753
=============== =============== ===============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
Net
Foreign Unrealized
Additional Currency Investment
Common Stock Paid-in Retained Translation Gains
Shares Amount Capital Earnings Adjustments (Losses)
(In thousands, except for share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1993 2,206,933 $ 27,587 $ 229,900 $ 1,495,781 $ (17,314) $ 74,643
Net income 249,753
Capital contributions from parent 89,379
Dividends declared (56,000)
Change in foreign currency
translation adjustments (3,740)
Change in net unrealized
investment gains (losses) (11,061)
Balance at December 31, 1993 2,206,933 27,587 319,279 1,689,534 (21,054) 63,582
Cumulative effect of change in
accounting for investments 795,187
Net income 271,698
Dividends declared (40,000)
Change in foreign currency
translation adjustments (7,293)
Change in net unrealized
investment gains (losses) (1,180,229)
Balance at December 31, 1994 2,206,933 27,587 319,279 1,921,232 (28,347) (321,460)
Net income 311,296
Capital contributions from parent 14,298
Dividends declared (61,114)
Change in foreign currency
translation adjustments 4,728
Change in net unrealized
investment gains (losses) 1,260,392
Balance at December 31, 1995 2,206,933 $ 27,587 $ 333,577 $ 2,171,414 $ (23,619) $ 938,932
============ ========== ============= ============ ============ =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended December 31
1995 1994 1993
----------------- ------------------ ----------
(In thousands)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income $ 311,296 $ 271,698 $ 249,753
Adjustments to reconcile net income to net cash
provided by operating activities:
Changes in:
Reinsurance recoverable (466,669) (290,926) (175,952)
Accounts receivable (58,866) (31,934) (183,598)
Policy liabilities 1,273,723 804,296 921,067
Other assets, accounts payable and other
liabilities, and income taxes (252,362) 133,499 135,658
Policy acquisition costs deferred (381,806) (394,858) (359,146)
Amortization of deferred policy acquisition costs 191,313 182,312 232,309
Net realized gains on investment transactions (37,247) (27,008) (107,769)
Other (22,917) (124,644) (107,831)
----------------- ----------------- -----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 556,465 522,435 604,491
INVESTMENT ACTIVITIES
Purchases of securities (5,667,539) (9,354,375) (11,878,171)
Purchases of other investments (330,503) (143,771) (157,368)
Sales of securities 3,587,367 4,607,572 5,054,460
Sales of other investments 155,084 143,815 177,064
Maturities of securities 341,485 2,251,763 4,433,933
Net change in short-term investments (67,337) 38,597 (57,625)
Other (35,384) (25,354) (25,655)
----------------- ----------------- -----------------
NET CASH USED BY
INVESTING ACTIVITIES (2,016,827) (2,481,753) (2,453,362)
FINANCING ACTIVITIES
Additions to policyholder contract deposits 5,151,428 4,434,726 4,166,316
Withdrawals from policyholder contract deposits (3,624,044) (2,419,915) (2,313,176)
Capital contributions from parent or its affiliate - - 31,300
Dividends paid to parent (60,000) (40,000) (56,000)
----------------- ----------------- -----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 1,467,384 1,974,811 1,828,440
----------------- ----------------- -----------------
INCREASE (DECREASE) IN CASH 7,022 15,493 (20,431)
Cash at beginning of year 42,916 27,423 47,854
----------------- ----------------- -----------------
CASH AT END OF YEAR $ 49,938 $ 42,916 $ 27,423
================= ================= =================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Business: Transamerica Occidental Life Insurance Company ("TOLIC") and its
subsidiaries (collectively, the "Company"), engages in providing life insurance,
pension and annuity products, reinsurance, structured settlements and
investments which are distributed through a network of independent and
company-affiliated agents and independent brokers. The Company's customers are
primarily in the United States and Canada.
Basis of Presentation: The accompanying consolidated financial statements have
been prepared in accordance with generally accepted accounting principles which
differ from statutory accounting practices prescribed or permitted by regulatory
authorities.
Use of Estimates: Certain amounts reported in the accompanying combined
financial statements are based on the management's best estimates and judgment.
Actual results could differ from those estimates.
New Accounting Standards: In March 1995, the Financial Accounting Standards
Board issued a new standard on accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of. The Company will adopt the
standard in 1996. The standard required that an impaired long-lived asset be
measured based on the fair value of the asset to be held and used or the fair
value less cost to sell of the asset to be disposed of. When adopted, this
standard is not expected to have a material effect on the consolidated financial
position or results of operations of the Company.
In 1995, the Company adopted the Financial Accounting Standards Board's new
standard on accounting for impairment of loans, which requires that an impaired
loan be measured based on the present value of expected cash flows discounted at
the loan's effective interest rate or the fair value of the collateral if the
loan is collateral dependent. There was no material effect on the consolidated
financial position or results of operations of the Company.
In 1994, the Company adopted the Financial Accounting Standards Board's new
standard on accounting for certain investments in debt and equity securities
which requires the Company to report at fair value, with unrealized gains and
losses excluded from earnings and reported on an after tax basis as a separate
component of shareholder's equity, its investments in debt securities for which
the Company does not have the positive intent and ability to hold to maturity.
Additionally, such unrealized gains and losses are considered in evaluating
deferred policy acquisition costs, with any resultant adjustment also excluded
from earnings and reported on an after tax basis in shareholder's equity. As of
January 1, 1994, the impact of adopting the standard was to increase
shareholder's equity by $795.2 million (net of deferred policy acquisition cost
adjustment of $367.2 million and deferred taxes of $428.2 million) with no
effect on net income.
Principles of Consolidation: The financial statements include the accounts of
TOLIC and its subsidiaries, all of which operate primarily in the life insurance
industry. TOLIC is a wholly owned subsidiary of Transamerica Insurance
Corporation of California, which is a wholly owned subsidiary of Transamerica
Corporation. All significant intercompany balances and transactions have been
eliminated in consolidation.
<PAGE>
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1995
-8-
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments: Investments are shown on the following bases:
Fixed maturities--All debt securities, including redeemable preferred
stocks, are classified as available for sale and carried at fair value
effective as of January 1, 1994. The Company does not carry any debt
securities principally for the purpose of trading. Prepayments are
considered in establishing amortization periods for premiums and
discounts and amortized cost is further adjusted for other-than-temporary
fair value declines. Derivative instruments are also reported as a
component of fixed maturities and are carried at fair value if designated
as hedges of securities available for sale or at amortized cost if
designated as hedges of liabilities. See Note M - Financial Instruments.
Equity securities available for sale (common and nonredeemable preferred
stocks)--at fair value. The Company does not carry any equity securities
principally for the purpose of trading.
Mortgage loans on real estate--at unpaid balances, adjusted for
amortization of premium or discount, less allowance for possible
impairment.
Investment real estate--at cost, less allowances for depreciation and
possible impairment.
Policy loans--at unpaid balances.
Other long-term investments--at cost, less allowance for possible
impairment.
Short-term investments--at cost, which approximates fair value.
Realized gains and losses on disposal of investment are determined generally on
a specific identification basis. The Company reports realized gains and losses
on investment transactions in the accompanying consolidated statement of income,
net of the amortization of deferred policy acquisition costs when such
amortization results from the realization of gains or losses other than as
originally anticipated on the sale of investments associated with
interest-sensitive products. Changes in fair values of fixed maturities
available for sale and equity securities available for sale are included in net
unrealized investment gains or losses after adjustment of deferred policy
acquisition costs and deferred income taxes as a separate component of
shareholder's equity and, accordingly, have no effect on net income.
Deferred Policy Acquisition Costs (DPAC): Certain costs of acquiring new and
renewal insurance contracts, principally commissions, medical examination and
inspection report fees, and certain variable underwriting, issue and field
office expenses, all of which vary with and are primarily related to the
production of such business, have been deferred. DPAC for non-traditional life
and investment-type products are amortized over the life of the related policies
in relation to estimated future gross profits. DPAC for traditional life
insurance products are amortized over the premium-paying period of the related
policies in proportion to premium revenue recognized, using principally the same
assumptions used for computing future policy benefit reserves. DPAC is adjusted
as if unrealized gains or losses on securities available for sale were realized.
Changes in such adjustments are included in net unrealized investment
<PAGE>
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
gains or losses on an after tax basis as a separate component of shareholder's
equity and, accordingly, have no effect on net income.
Separate Accounts: The Company administers segregated asset accounts for certain
holders of universal life policies, variable annuity contracts, and other
pension deposit contracts. The assets held in these Separate Accounts are
invested primarily in fixed maturities, equity securities, other marketable
securities, and short-term investments. The Separate Account assets are stated
at fair value and are not subject to liabilities arising out of any other
business the Company may conduct. Investment risks associated with fair value
changes are borne by the contract holders. Accordingly, investment income and
realized gains and losses attributable to Separate Accounts are not reported in
the Company's results of operations.
Policyholder Contract Deposits: Non-traditional life insurance products include
universal life and other interest-sensitive life insurance policies.
Investment-type products include single and flexible premium deferred annuities,
single premium immediate annuities, guaranteed investment contracts, and other
group pension deposit contracts that do not have mortality or morbidity risk.
Policyholder contract deposits on universal life and investment products
represent premiums received plus accumulated interest, less mortality charges on
universal life products and other administration charges as applicable under the
contract. Interest credited to these policies ranged from 2.8% to 10% in 1995
and 1994, and from 3.0% to 10.5% in 1993.
Reserves for Future Policy Benefits: Traditional life insurance products
primarily include those contracts with fixed and guaranteed premiums and
benefits and consist principally of whole life and term insurance policies,
limited-payment life insurance policies and annuities with life contingencies.
The reserve for future policy benefits for traditional life insurance products
has been provided on a net-level premium method based upon estimated investment
yields, withdrawals, mortality, and other assumptions which were appropriate at
the time the policies were issued. Such estimates are based upon past experience
with a margin for adverse deviation. Interest assumptions range from 4.3% in
earlier years to 9.5% on later issues. Reserves for future policy benefits are
evaluated as if unrealized gains or losses on securities available for sale were
realized and adjusted for any resultant premium deficiencies. Changes in such
adjustments are included in net unrealized investment gains or losses on an
after tax basis as a separate component of shareholder's equity and,
accordingly, have no effect on net income.
Foreign Currency Translation: The effect of changes in exchange rates in
translating foreign subsidiary's financial statements is accumulated as a
separate component of shareholder's equity, net of applicable income taxes.
Aggregate transaction adjustments included in income were not significant for
1995, 1994, or 1993.
Recognition of Revenue and Costs: Traditional life insurance contract premiums
are recognized as revenue over the premium-paying period, with reserves for
future policy benefits established from such premiums.
<PAGE>
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenues for universal life and investment products consist of policy charges
for the cost of insurance, policy administration charges, amortization of policy
initiation fees, and surrender charges assessed against policyholder account
balances during the period. Expenses related to these products consist of
interest credited to policyholder account balances and benefit claims incurred
in excess of policyholder account balances. In 1993, the Company adopted this
method of accounting for its single premium immediate annuity contracts issued
under structured settlement arrangements based on a determination that such
contracts do not involve significant mortality risk. Accordingly, amounts
received by the Company as payments under these contracts are no longer included
in revenues but are reported as policyholder contract deposits.
Claim reserves include provisions for reported claims and claims incurred but
not reported.
Reinsurance: Coinsurance premiums, commissions, expense reimbursements, and
reserves related to reinsured business are accounted for on bases consistent
with those used in accounting for the original policies and the terms of the
reinsurance contracts. Yearly renewable term reinsurance is accounted for the
same as direct business. Premiums ceded and recoverable losses have been
reported as a reduction of premium income and benefits, respectively. The ceded
amounts related to policy liabilities have been reported as an asset.
Income Taxes: TOLIC and its domestic subsidiaries are included in the
consolidated federal income tax returns filed by Transamerica Corporation, which
by the terms of a tax sharing agreement generally requires TOLIC to accrue and
settle income tax obligations in amounts that would result from filing separate
tax returns with federal taxing authorities.
Deferred income taxes arise from temporary differences between the bases of
assets and liabilities for financial reporting purposes and income tax purposes,
based on enacted tax rates in effect for the years in which the temporary
differences are expected to reverse.
Fair Values of Financial Instruments: Fair values for debt securities are based
on quoted market prices, where available. For debt securities not actively
traded and private placements, fair values are estimated using values obtained
for independent pricing services. Fair values for derivative instruments,
including off-balance-sheet instruments, are estimated using values obtained for
independent pricing services.
Fair values for equity securities are based on quoted market prices.
Fair values for mortgage loans on real estate and policy loans are estimated
using discounted cash flow calculations, based on interest rates currently being
offered for similar loans to borrowers with similar credit ratings. Loans with
similar characteristics are aggregated for calculation purposes.
The carrying amounts of short-term investments, cash, and accrued investment
income approximate their fair value.
<PAGE>
NOTE A--SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair values for liabilities under investment-type contracts are estimated using
discounted cash flow calculations, based on interest rates currently being
offered by similar contracts with maturities consistent with those remaining for
the contracts being valued. The liabilities under investment-type contracts are
included in policyholder contract deposits in the accompanying consolidated
balance sheet.
Reclassifications: Certain reclassifications of 1994 and 1993 amounts have
been made to conform with the 1995
- -----------------
presentation.
NOTE B--INVESTMENTS
<TABLE>
<CAPTION>
The cost and fair value of fixed maturities available for sale are as follows
(in thousands):
Gross Gross
Carrying Unrealized Unrealized Fair
Value Gain Loss Value
---------------- --------------- --------------- -----------
December 31, 1995
- -----------------
U.S. Treasury securities and
obligations of U.S. government
<S> <C> <C> <C> <C>
corporations and agencies $ 92,958 $ 6,840 $ 99,798
Obligations of states and political
subdivisions 229,028 7,832 $ 572 236,288
Foreign governments 109,632 9,068 118,700
Corporate securities 11,945,631 1,126,903 30,58 13,041,953
Public utilities 4,338,637 390,237 2,909 4,725,965
Mortgage-backed securities 7,277,976 487,190 15,092 7,750,074
Redeemable preferred stocks 21,372 3,757 504 24,625
------ ----- --- ------
$ 24,015,234 $ 2,031,827 $ 49,658 $ 25,997,403
================ ================ ================ ================
December 31, 1994
U.S. Treasury securities and
obligations of U.S. government
corporations and agencies $ 218,404 $ 535 $ 19,885 $ 199,054
Obligations of states and political
subdivisions 220,127 3,586 8,123 215,590
Foreign governments 210,789 1,551 6,367 205,973
Corporate securities 9,517,763 133,191 396,488 9,254,466
Public utilities 3,948,366 48,455 234,885 3,761,936
Mortgage-backed securities 7,791,957 105,175 530,362 7,366,770
Redeemable preferred stocks 3,140 - 460 2,680
----- - --- -----
$ 21,910,546 $ 292,493 $ 1,196,570 $ 21,006,469
================ ================ ================ ================
</TABLE>
<PAGE>
NOTE B--INVESTMENTS (Continued)
<TABLE>
<CAPTION>
The cost and fair value of fixed maturities available for sale at December 31,
1995, by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties (in thousands):
Fair
Cost Value
Maturity
<S> <C> <C> <C>
Due in 1996 $ 590,327 $ 603,732
Due in 1997-2000 3,016,991 3,150,785
Due in 2001-2005 3,714,128 3,962,712
Due after 2005 9,394,440 10,505,474
------------ ---------------
16,715,886 18,222,703
Mortgage-backed securities 7,277,976 7,750,075
Redeemable preferred stock 21,372 24,625
---------------- ----------------
$ 24,015,234 $ 25,997,403
================ ===============
The cost and fair value of equity securities available for sale are as follows
(in thousands):
1995 1994
--------------- -----------
Cost $ 150,968 $ 142,831
26,316 26,m
Gross unrealized gain 163,264 69,693
Gross unrealized loss (6,351) (11,513)
--------------- ---------------
Fair values $ 307,881 $ 201,011
=============== ===============
The components of the carrying value of investment real estate are as follows (in thousands):
1995 1994
Cost $ 48,913 $ 89,992
26,316 26,m
Allowance for depreciation (10,537) (20,746)
--------------- ---------------
$ 38,376 $ 69,246
=============== ===============
</TABLE>
<PAGE>
NOTE B--INVESTMENTS (Continued)
As of December 31, 1995, the Company did not hold a total investment in any one
issuer, other than the United States Government or a Unites States Government
agency or authority, which exceeded 10% of total shareholder's equity.
The carrying value of those assets that were on deposit with public officials in
compliance with regulatory requirements were $22.0 million at December 31, 1995.
<TABLE>
<CAPTION>
Net investment income by major investment category is summarized as follows (in thousands):
1995 1994 1993
<S> <C> <C> <C>
Fixed maturities $ 1,904,519 $ 1,705,618 $ 1,657,178
Equity securities 3,418 5,587 7,624
Mortgage loans on real estate 40,702 40,030 44,230
Investment real estate 3,209 5,024 4,232
Policy loans 25,641 24,614 23,219
Other long-term investments 2,353 7,173 7,973
Short-term investment 13,286 9,689 5,584
---------------- ---------------- ----------------
1,993,128 1,797,735 1,750,040
Investment expenses (20,369) (26,160) (25,739)
---------------- ---------------- ----------------
$ 1,972,759 $ 1,771,575 $ 1,724,301
================ ================ ================
Significant components of net realized investment gains are as follows (in
thousands):
1995 1994 1993
---------------- ---------------- ----------
Net gains on disposition of investments in:
Fixed maturities $ 52,889 $ 7,181 $ 149,145
Equity securities 5,637 32,374 12,491
Other 2,327 2,546 1,607
---------------- ---------------- ----------------
60,853 42,101 163,243
Provision for impairment (23,551) (15,092) (55,504)
Accelerated amortization of DPAC (9,190) (6,279) (62,852)
---------------- ---------------- ----------------
$ 28,112 $ 20,730 $ 44,887
================ ================ ================
The components of net gains on disposition of investment in fixed maturities are as follows (in thousands):
1995 1994 1993
Gross gains $ 61,504 $ 46,702 $ 151,232106,649
Gross losses (8,615) (39,521) (2,087)
---------------- ---------------- ----------------
$ 52,889 $ 7,181 $ 149,145
================ ================ ================
</TABLE>
<PAGE>
NOTE B--INVESTMENTS (Continued)
<TABLE>
<CAPTION>
The costs of certain investments have been reduced by the following allowances
for impairment in value (in thousands):
December 31
1995 1994
---------------- -----------
<S> <C> <C>
Fixed maturities $ 71,429 $ 92,145
Equity securities - 395
Mortgage loans on real estate 21,516 23,479
Investment real estate 16,207 14,656
Other long-term investments 11,025 11,125
---------------- ---------------
$ 120,177 $ 141,800
================ ===============
</TABLE>
<TABLE>
<CAPTION>
The components of changes in net unrealized investment gains (losses) in the
accompanying consolidated statement of shareholder's equity are as follows (in
thousands):
1995 1994 1993
---------------- ---------------- ----------
Changes in unrealized gains (losses):
<S> <C> <C> <C>
Fixed maturities $ 2,886,246 $ (2,494,478) $ 10
Equity securities 98,733 (39,756) (15,287)
---------------- ---------------- ----------------
2,984,979 (2,534,234) (15,277)
Change in related DPAC adjustments (706,915) 718,498 -
Change in policy liability adjustments (339,000) - -
Related deferred taxes (678,672) 635,507 4,216
---------------- ---------------- ----------------
$ 1,260,392 $ (1,180,229) $ (11,061)
================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
Proceeds from disposition of investment in fixed maturities available for sale
were $3,802.6 million in 1995, $6,737.7 million in 1994 and $9,187.1 million in
1993.
<PAGE>
NOTE C--DEFERRED POLICY ACQUISITION COSTS (DPAC)
Significant components of changes in DPAC are as follows (in thousands):
1995 1994 1993
----------------- ---------------- -----------
<S> <C> <C> <C>
Balance at beginning of year $ 2,480,474 $ 1,929,332 $ 1,811,992
Cumulative effect of change in
accounting for investments - (367,154) -
Amounts deferred:
Commissions 298,698 305,858 288,195
Other 83,108 89,000 70,951
Amortization attributed to:
Net gain on disposition of investments (9,190) (6,279) (62,852)
Operating income (182,123) (176,033) (169,457)
Fair value adjustment (706,915) 718,498 -
Foreign currency translation adjustment 10,159 (12,748) (9,497)
---------------- ---------------- ----------------
Balance at end of year $ 1,974,211 $ 2,480,474 $ 1,929,332
================ ================ ================
</TABLE>
NOTE D--POLICY LIABILITIES
<TABLE>
<CAPTION>
Components of policyholder contract deposits are as follows (in thousands):
December 31
1995 1994
---------------- -----------
<S> <C> <C>
Liabilities for investment-type products $ 17,948,652 $ 15,862,970
Liabilities for non-traditional life insurance
products 4,109,121 3,418,545
------------ -------------
$ 22,057,773 $ 19,281,515
=============== ================
</TABLE>
Reserves for future policy benefits were evaluated as if the unrealized gains on
securities available for sale had been realized and adjusted for resultant
premium deficiencies by $339 million as of December 31, 1995.
<PAGE>
NOTE E--INCOME TAXES
<TABLE>
<CAPTION>
Components of income tax liabilities are as follows (in thousands):
December 31
1995 1994
---------------- -----------
<S> <C> <C>
Current tax liabilities $ 35,689 $ 67,870
Deferred tax liabilities 552,112 -
---------------- ---------------
$ 587,801 $ 67,870
================ ===============
</TABLE>
<TABLE>
<CAPTION>
Significant components of deferred tax liabilities (assets) are as follows (in
thousands):
December 31
1995 1994
---------------- -----------
<S> <C> <C>
Deferred policy acquisition costs $ 696,728 $ 650,207
Unrealized investment gains (losses) 505,579 (173,094)
Life insurance policy liabilities (601,875) (586,025)
Provision for impairment of investments (42,062) (49,630)
Other-net (6,258) (5,971)
---------------- ---------------
$ 552,112 $ (164,513)
================ ===============
</TABLE>
TOLIC offsets all deferred tax assets and liabilities and presents them in a
single amount in the consolidated balance sheet.
<TABLE>
<CAPTION>
Components of provisions for income taxes are as follows (in thousands):
1995 1994 1993
---------------- ---------------- -----------
<S> <C> <C> <C>
Current tax expense: $ 115,614 $ 204,087 $ 162,408
Deferred tax expense (benefit) 34,033 (60,596) (26,947)997
Adjustment for enacted change in tax laws - - 3,536
---------------- ---------------- ----------------
$ 149,647 $ 143,491 $ 138,997
================ ================ ================
</TABLE>
<PAGE>
NOTE E--INCOME TAXES (Continued)
<TABLE>
<CAPTION>
The differences between federal income taxes computed at the statutory rate and
the provision for income taxes as reported are as follows (in thousands):
1995 1994 1993
---------------- ---------------- ----------
Income before income taxes:
<S> <C> <C> <C>
Income from U.S. operations $ 425,946 $ 389,778 $ 367,560
Income from foreign operations 34,997 25,411 21,190
--------------- --------------- ---------------
460,943 415,189 388,750
Tax rate 35% 35% 35%
--------------- --------------- ---------------
Federal income taxes at statutory rate 161,330 145,316 136,063
Income not subject to tax (685) (910) (535)
Low income housing credits (3,137) (902) -
Adjustment for enacted change in tax laws - - 3,536
Other, net (7,861) (13) (67)
--------------- --------------- ---------------
$ 149,647 $ 143,491 $ 138,997
=============== =============== ===============
</TABLE>
Low income housing credits are recognized over the productive life of acquired
assets. In 1995, the Company recognized a $4.4 million tax benefit related to
the favorable settlement of a prior year tax matter.
Under the Life Insurance Company Income Tax Act of 1959, a portion of "gain from
operations" was not subject to current income taxation but was accumulated, for
tax purposes, in a memorandum account designated as "policyholders' surplus
account." The balance in this account was frozen at December 31, 1983 pursuant
to the Deficit Reduction Act of 1984. This amount becomes subject to tax when it
exceeds a certain maximum or when cash dividends are paid therefrom. The
policyholders' surplus account balance at December 31, 1995 was $138 million. At
December 31, 1995, $1,788.9 million was available for payment of dividends
without such tax consequences. No income taxes have been provided on the
policyholders' surplus account since the conditions that would cause such taxes
are remote.
Income taxes of $153.3 million, $195.4 million and $162.2 were paid principally
to the parent in 1995, 1994 and 1993, respectively.
<PAGE>
NOTE F--REINSURANCE
The Company is involved in both the cession and assumption of reinsurance with
other companies. Risks are reinsured with other companies to permit the recovery
of a portion of the direct losses, however, the Company remains liable to the
extent the reinsuring companies do not meet their obligations under these
reinsurance agreements.
<TABLE>
<CAPTION>
The components of the Company's life insurance in force and premiums and other
considerations are summarized as follows (in thousands):
Ceded to Assumed
Direct Other from Other Net
Amount Companies Companies Amount
1995
Life insurance in force,
<S> <C> <C> <C> <C>
at end of year $ 206,722,573 $ 116,762,869 $ 174,193,592 $ 264,153,296
==================== =================== =================== ===================
Premiums and other
considerations $ 1,857,449 $ 1,079,303 $ 1,033,752 $ 1,811,898
==================== =================== =================== ===================
Benefits paid or
provided $ 2,803,213 $ 1,065,545 $ 849,800 $ 2,587,468
==================== =================== =================== ===================
1994
Life insurance in force,
at end of year $ 191,884,093 $ 115,037,553 $ 158,882,366 $ 235,728,906
==================== =================== =================== ===================
Premiums and other
considerations $ 1,085,555 $ 689,615 $ 1,034,079 $ 1,430,019
==================== =================== =================== ===================
Benefits paid or
provided $ 2,338,370 $ 867,341 $ 645,096 $ 2,116,125
==================== =================== =================== ===================
1993
Life insurance in force,
at end of year $ 180,902,966 $ 95,719,350 $ 149,728,434 $ 234,912,050
==================== =================== =================== ===================
Premiums and other
considerations $ 1,273,293 $ 953,489 $ 892,876 $ 1,212,680
==================== =================== =================== ===================
Benefits paid or
provided $ 2,142,424 $ 633,782 $ 484,371 $ 1,993,013
==================== =================== =================== ===================
</TABLE>
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS
Substantially all employees of the Company are covered by noncontributory
defined pension benefit plans sponsored by the Company and the Retirement Plan
for Salaried Employees of Transamerica Corporation and Affiliates. Pension
benefits are based on the employee's compensation during the highest paid 60
consecutive months during the 120 months before
<PAGE>
NOTE G--PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS (Continued)
retirement. Annual contributions to the plans generally include a provision for
current service costs plus amortization of prior service costs over periods
ranging from 10 to 30 years. Assets of the plans are invested principally in
publicly traded stocks and bonds.
The Company's total pension costs recognized for all plans were $2.5 million in
1995, $4.9 million in 1994 and $4.1 million in 1993, of which $2.0 million in
1995, $4.7 million in 1994 and $3.3 million in 1993, respectively, related to
the plan sponsored by Transamerica Corporation.
The plans sponsored by the Company are not material to the consolidated
financial position of the Company.
The Company also participates in various contributory defined benefit programs
sponsored by Transamerica Corporation that provide medical and certain other
benefits to eligible retirees. Postretirement benefit costs charged to income
were not significant in 1995, 1994 and 1993.
NOTE H--RELATED PARTY TRANSACTIONS
The Company has various transactions with Transamerica Corporation and certain
of its other subsidiaries in the normal course of operations. These transactions
include premiums for employee benefits (none in 1995, $5.5 million in 1994, and
$7.3 million in 1993), loans and advances, investments in a money market fund
managed by an affiliated company, rental of space, and other specialized
services. At December 31, 1995, pension funds administered for these related
companies aggregated $933.3 million and the investment in an affiliated money
market fund, included in short-term investments, was $55.2 million.
During 1995, the Company transferred real estate with an aggregate book value of
$27.7 million to an affiliate within the Transamerica Corporation group of
consolidated companies in exchange for consideration with a fair value of $49.7
million, comprising mortgage loans of $35.1 million and cash of $14.6 million.
The excess of fair value of the consideration received over the book value of
the real estates transferred, net of related tax payable to the parent, is
included as a capital contribution.
During 1993, the Company transferred equity securities with a cost of $110.7
million and agreed to pay $31.3 million to Transamerica Corporation in exchange
for a note receivable of $200 million. The excess of fair value of the
consideration received over the cost of the assets transferred is included as a
capital contribution.
The note matures in 2013 and bears interest at 7%.
NOTE I--OTHER OPERATING REVENUE
In 1994, the Company disposed of an investment in an affiliate which had been
accounted for under the equity method. Total consideration of $23.3 million was
received from the sale, resulting in income of $13.3 million.
<PAGE>
NOTE J-LEASES
Substantially all leases of the Company are operating leases principally for the
rental of real estate. Rental expense for equipment and properties was $25.3
million in 1995, $17.9 million in 1994, and $15 million in 1993.
The following is a schedule by years of future minimum
rental payments required under operating leases that have initial or remaining
noncancelable lease terms in excess of one year as of December 31, 1995 (in
thousands):
Year ending December 31:
1996 $ 20,011
1997 15,298
1998 11,429
1999 8,423
2000 5,897
Thereafter 24,445
$ 85,503
NOTE K--LITIGATION
The Company is a defendant in various legal actions arising from the normal
course of operations. Contingent liabilities arising from litigation are not
considered material in relation to the consolidated financial position and
results of operations of the Company.
NOTE L--REGULATORY MATTERS
<TABLE>
<CAPTION>
TOLIC and its insurance subsidiaries are subject to state insurance laws and
regulations, principally those of the Company's state of incorporation. Such
regulations include the risk based capital requirement and the restriction on
the payment of dividends. Generally, dividends during any year may not be paid,
without prior regulatory approval, in excess of the greater of 10% of the
Company's statutory capital and surplus as of the preceding year end or the
insurance Company's statutory net income from operations for the preceding year.
The insurance department of the domiciliary state recognizes these amounts as
determined in conformity with statutory accounting practices prescribed or
permitted by the insurance department, which vary in some respects from
generally accepted accounting principles. The Company's statutory net income and
statutory capital and surplus which are represented by TOLIC's net income and
capital and surplus are summarized as follows (in thousands):
1995 1994 1993
------------------- ------------------- ------------
<S> <C> <C> <C>
Statutory net income $ 131,607 $ 175,850 $ 192,978
Statutory capital and surplus, at
end of year 1,115,691 947,164 801,722
</TABLE>
<PAGE>
NOTE M--FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
The carrying values and estimated fair values of financial instruments are as
follows (in thousands):
December 31
-----------------------------------------
1995 1994
----------------------------------- -----------------
Carrying Fair Carrying Fair
Value Value Value Value
Financial Assets:
<S> <C> <C> <C> <C>
Fixed maturities $ 25,997,403 $ 25,997,403 $ 21,006,469 $ 21,006,469
Equity securities 307,881 307,881 201,011 201,011
Mortgage loans on real estate 565,086 671,835 366,727 382,164
Policy loans 426,377 408,088 412,938 383,531
Short-term investments 211,500 211,500 144,163 144,163
Cash 49,938 49,938 42,916 42,916
Accrued investment income 394,008 394,008 363,121 363,121
Financial Liabilities:
Liabilities for investment-type contracts:
Single and flexible premium
deferred annuities 8,080,139 7,518,211 7,425,778 6,898,534
Single premium immediate annuities 4,123,954 4,677,652 3,735,691 3,510,764
Guaranteed investment contracts 2,958,850 2,998,047 2,382,195 2,336,682
Other deposit contracts 2,785,709 2,848,301 2,319,306 2,243,992
Off-balance-sheet assets (liabilities):
Exchange derivatives designated as
hedges of liabilities in a:
Receivable position - 23,881 - 4,974
Payable position - (3,086) - (24,625)
</TABLE>
Exchange derivatives, which require no premium payments at initiation, consist
principally of interest rate swap agreements and conditional derivatives, which
require premium payments at initiation, consist principally of swaptions and
interest rate floor and cap agreements.
The Company enters into various interest rate agreements in the normal course of
business primarily as a means of managing its interest rate exposure in
connection with asset and liability management.
Interest rate swap agreements generally involve the periodic exchange of fixed
rate interest and floating rate interest payments by applying a specified market
index to the underlying contract or notional amount, without exchanging the
underlying notional amounts. The differential to be paid or received on those
interest rate swap agreements that are designated as hedges of financial assets
is recorded on an accrual basis as a component of net investment
<PAGE>
NOTE M--FINANCIAL INSTRUMENTS (Continued)
income. The differential to be paid or received on those interest rate swap
agreements that are designated as hedges of financial liabilities is recorded on
an accrual basis as a component of benefits paid or provided. While the Company
is not exposed to credit risk with respect to the notional amounts of the
interest rate swap agreements, the Company is subject to credit risk from
potential nonperformance of counterparties throughout the contract periods. The
amounts potentially subject to such credit risk are much smaller than the
notional amounts. The Company controls this credit risk by entering into
transactions with only a selected number of high quality institutions,
establishing credit limits and maintaining collateral when appropriate.
Generally, the Company is subject to basis risk when an interest rate swap
agreement is not funded. As of December 31, 1995, there were no unfunded
interest rate swap agreements.
Interest rate floor and cap agreements generally provide for the receipt of
payments in the event the average interest rates during a settlement period fall
below specified levels under interest rate floor agreements or rise above
specified levels under interest rate cap agreements. A swaption generally
provides for an option to enter into an interest rate swap agreement in the
event of unfavorable interest rate movements. These agreements generally require
upfront premium payments. The costs of swaptions and interest rate floor and cap
agreements are amortized over the contractual periods and resulting amortization
expenses are included in net investment income. The conditional receipts under
these agreements are recorded on an accrual basis as a component of net
investment income if designated as hedges of financial assets or as a component
of benefits paid or provided if designated as hedges of financial liabilities.
<PAGE>
NOTE M--FINANCIAL INSTRUMENTS (Continued)
The information on derivative instruments is summarized as follows (in
thousands):
<TABLE>
<CAPTION>
Aggregate Weighted
Notional Average
Amount Fixed Rate Fair Value
December 31, 1995
Interest rate swap agreements designated as
hedges of securities available for sale,
where TLC pays:
<S> <C> <C> <C>
Fixed rate interest $ 235,173 7.99% $ (9,307)
Floating rate interest 140,000 5.65% 137
Floating rate interest based on one
index and receives floating rate
interest based on another index 65,000 242
Interest rate swap agreements designated as
hedges of financial liabilities, where TLC
pays:
Fixed rate interest 60,000 4.39% 741
Floating rate interest 934,678 6.17% 17,169
Floating rate interest based on one
index and receives floating rate
interest based on another index 152,000 (108)
560,500 6.46% 35,820
250,000 5.93% 792
1,367,140 5.52% 55,540
December 31, 1994
Interest rate swap agreements designated as
hedges of securities available for sale,
where TLC pays:
Fixed rate interest 178,777 7.20% (1,305)
Floating rate interest 96,000 4.96% (2,975)
Interest rate swap agreements designated as
hedges of financial liabilities, where TLC
Pays floating rate interest: 601,545 5.88% (19,651)
Interest rate floor agreements 560,500 6.46% 10,948
Interest rate cap agreements 100,000 5.00% 1,333
Swaptions and other 200,000 7.00% 5,313
</TABLE>
Generally, notional amounts indicate the volume of transactions and estimated
fair values indicate the amounts subject to credit risk.
<PAGE>
NOTE M--FINANCIAL INSTRUMENTS (Continued)
Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of temporary cash investments, fixed maturities
and mortgage loans on real estate. The Company places its temporary cash
investments with high credit quality financial institutions. Concentrations of
credit risk with respect to investments in fixed maturities and mortgage loans
on real estate are limited due to the large number of such investments and their
dispersion across many different industries and geographic areas. At December
31, 1995, the Company had no significant concentration of credit risk.
<PAGE>
PART C
OTHER INFORMATION
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
All required financial statements are included in Parts A and B of
this Registration Statement.
(b) Exhibits:
(1) (a) Resolutions of Board of Directors of Transamerica Occidental
Life Insurance Company
creating Transamerica Occidental's Separate Account Fund C. 1/
(b) Resolutions of Transamerica Occidental Life Insurance Company
approving the conversion
of the Registrant to a unit investment trust. 2/
(2) Not Applicable.
(3) (a) Form of Distribution Agreement between Transamerica Securities
Sales Corporation and
Transamerica Occidental Life Insurance Company on behalf of
Registrant.7/
(b) Form of Sales Agreement among Transamerica Securities Sales
Corporation,
Transamerica Occidental Life Insurance Company on behalf of
Registrant, and
Transamerica Financial Resources, Inc.7/
(4) (a) Annual Deposit Individual Equity Investment Fund Contract. 2/
(b) Single Deposit Individual Equity Investment Fund Contract to
provide a deferred Variable
Annuity.2/
(c) Single Deposit Individual Equity Investment Fund Contract to
provide an immediate
Variable Annuity.4/
(d) Endorsement to define the term "Deposit" in some Contracts to
mean "Purchase
Payment".4/
(e) Endorsement to modify definition of "Valuation Period".4/
(f) Deposit Continuation on Total and Permanent Disability Rider.4/
(g) Endorsement for State of Michigan to define investment factors
filed as part of this
Registration Statement.4/
(5) (a) Application for Individual Equity Investment Fund Contracts.4/
(b) Revised Application for Individual Equity Investment Fund
Contracts.4/
(c) Application for Request to Change Life Policy to Individual
Equity Investment Fund
Contract.4/
(6) (a) Restated Articles of Incorporation of Transamerica
Occidental Life Insurance Company.6/
(b) Restated By-Laws of Transamerica Occidental Life
Insurance Company.6/
(7) Not Applicable.
(8) Participation Agreement between Transamerica Occidental
Life Insurance Company and
Transamerica Variable Insurance Fund.3/
(9) Opinion and Consent of Counsel.7/
C-1
<PAGE>
(10) (a) Consent of Counsel.7/
(b) Consent of Independent Auditors.7/
(11) No financial statements are omitted from Item 23.
(12) Not Applicable.
(13) Performance Data Calculations.
(14) Not Applicable.
(15) Powers of Attorney.
Robert Abeles 2/ Richard N. Latzer 7/
Kent L. Colwell 7/ Charles E. LeDoyen 7/
Thomas J. Cusack 2/ Karen MacDonald 5/
John A. Fibiger 2/ Gary U. Rolle 7/
Richard H. Finn 7/ James B. Roszak 7/
David E. Gooding 7/ William E. Simms 7/
Edgar H. Grubb 7/ Nooruddin S. Veerjee 7/
Frank C. Herringer 7/ Robert A. Watson 5/
James W. Dederer 7/
- ----------------------------
1/ Incorporated by reference to the exhibits filed as part of the
Registration Statement on Form N-8B-1 of
Transamerica Occidental's Separate Account Fund C, File No. 2-3650.
2/ Incorporated by reference to the like-numbered exhibits to Post-
Effective Amendment No. 43 to the
Registration Statement of Transamerica Occidental Life Insurance Company's
Separate Account C on Form N-4, File
No. 2-3650 (August 9, 1996).
3/ Incorporated by reference to the Exhibit 6 to Pre-Effective Amendment
No. 1 to the Registration Statement
of Transamerica Variable Insurance Fund, Inc. on Form N-1A, File No. 33-99016
(September 12, 1996).
4/ Incorporated by reference to the exhibits filed as part of the
Registration Statement on Form N-1 of
Transamerica Occidental's Separate Account Fund C., File No. 2-3650.
5/ Incorporated by reference to the like-numbered exhibits to
Post-Effective Amendment No. 42 to the
Registration Statement of Transamerica Occidental's Separate Account Fund C on
Form N-3, File No. 2-36250
(April 6, 1996).
6/ Incorporated by reference to the like-numbered exhibits to the initial
Registration Statement on Form N-4
of Transamerica Occidental's VA-2L, File No. 33-49998 (July 24, 1992).
7/ Filed herewith.
C-2
<PAGE>
Items 25. Directors and Officers of the Depositor.
The names of Directors and Executive Officers of the Company, their
positions and offices with the Company, and their other affiliations are as
follows. The address of Directors and Executive Officers is 1150 South Olive
Street, Los Angeles, California 90015-2211, unless indicated by asterisk.
List of Directors of Transamerica Occidental Life Insurance Company
Robert Abeles Frank C. Herringer
Kent L. Colwell Richard N. Latzer
Thomas J. Cusack Charles E. LeDoyen
James W. Dederer Karen MacDonald
John A. Fibiger Gary U. Rolle'
Richard H. Finn James B. Roszak
David E. Gooding William E. Simms
Edgar H. Grubb Nooruddin S. Veerjee
Robert A. Watson
<TABLE>
<CAPTION>
List of Officers for Transamerica Occidental Life Insurance Company
<S> <C> <C>
Thomas J. Cusack President and Chief Executive Officer
John A. Fibiger, FSA Chairman
James B. Roszak President, Life Insurance Division and Chief
Marketing Officer
William E. Simms President - Reinsurance Division
Robert Abeles Executive Vice President and Chief Financial Officer
James W. Dederer, CLU Executive Vice President, General
Counsel and Corporate Secretary
David E. Gooding Executive Vice President and Chief Information Officer
Charles E. LeDoyen President-Structured Settlements Division
Bruce Clark Senior Vice President and Chief Actuary
Daniel E. Jund, FLMI Senior Vice President
Karen MacDonald Senior Vice President and Corporate Actuary
Louise K. Neal Senior Vice President
William N. Scott, CLU, FLMI Senior Vice President
T. Desmond Sugrue Senior Vice President
Ron F. Wagley Senior Vice President and Chief Agency Officer
Nooruddin S. Veerjee, FSA President - Group Pension Division
Darrel K.S. Yuen President-Asian Operations
Richard N. Latzer Chief Investment Officer
Gary U. Rolle', CFA Chief Investment Officer
Glen E. Bickerstaff Investment Officer
John M. Casparian Investment Officer
Kent L. Colwell Investment Officer
Heather E. Creeden Investment Officer
Colin Funai Investment Officer
Sharon K. Kilmer Investment Officer
Lyman Lokken Investment Officer
Michael F. Luongo Investment Officer
Matthew Palmer Investment Officer
Thomas C. Pokorski Investment Officer
Susan A. Silbert Investment Officer
C-3
<PAGE>
John J. Strain Investment Officer
Jeffrey S. Van Harte Investment Officer
Lennart H. Walin Investment Officer
Paul Wintermute Investment Officer
William D. Adams Vice President
Sandra Bailey-Whichard Vice President
Nicki Bair Senior Vice President
Dennis Barry Vice President
Laurie Bayless Vice President
Marsha Blackman Vice President
Thomas Briggle Vice President
Thomas Brimacombe Vice President
Roy Chong-Kit Vice President and Chief Actuary
Alan T. Cunningham Vice President and Deputy General Counsel
Aldo Davanzo Vice President and Assistant Secretary
Daniel Demattos Vice President
Peter DeWolf Vice President
Mary J. Dinkel, CLU Vice President
Randy Dobo Vice President and Actuary
Thomas P. Dolan, FLMI Vice President
John V. Dohmen Vice President
Gail DuBois Vice President and Associate Actuary
Ken Ellis Vice President
George Garcia Vice President and Chief Medicare Officer
David M. Goldstein Vice President and Associate General Counsel
John D. Haack Vice President
Paul Hankwitz, MD Vice President and Chief Medical Director
Randall C. Hoiby Vice President and Associate General Counsel
John W. Holowasko Vice President
William M. Hurst Vice President and Associate General Counsel
James M. Jackson Vice President and Deputy General Counsel
Allan H. Johnson, FSA Vice President and Actuary
James D. Lamb, FSA Vice President and Chief Actuary
Ronald G. Larson, FLMI Regional Vice President
Frank J. LaRusso Vice President and Chief Underwriting Officer
Richard K. M. Lau, ASA Vice President
Thomas Liu Vice President
Katherine Lomeli Vice President and Assistant Secretary
Philip E. McHale, FLMI Vice President
Vic Modugno Vice President and Associate Actuary
Mischelle Mullin Vice President
Wayne Nakano, CPA Vice President and Controller
Paul Norris Vice President and Actuary
John W. Paige, FSA Vice President and Associate Actuary
Stephen W. Pinkham Vice President
Bruce Powell Vice President
Larry H. Roy Vice President
Joel D. Seigle Vice President
Sandra Smith Vice President
James O. Strand Vice President
Deborah Tatro Vice President
Lawrence Taylor Vice President
C-4
<PAGE>
Claude W. Thau, FSA Senior Vice President
Kim A. Tursky Vice President and Assistant Secretary
William R. Wellnitz, FSA Senior Vice President and Actuary
Anthony Wilkey Vice President
Thomas Winters Vice President
Ronald R. Wolfe Regional Vice President
Sally Yamada Vice President and Treasurer
Flora Bahaudin Second Vice President
David Barcellos Vice President
Michael C. Barnhart Second Vice President
Dan Bass, ASA Second Vice President
Frank Beardsley Vice President
Esther Blount Second Vice President
Benjamin Bock Vice President
Art Bueno Second Vice President
Barry Buner Second Vice President
Beverly Cherry Second Vice President
Wonjoon Cho Second Vice President
Art Cohen Second Vice President
Gloria Durosko Second Vice President
Reid A. Evers Vice President and Associate General Counsel
David Fairhall Second Vice President and Associate Actuary
Selma Fox Second Vice President
Jerry Gable, FSA Second Vice President
Roger Hagopian Second Vice President
Sharon Haley Second Vice President
Zahid Hussain Second Vice President and Associate Actuary
Ahmad Kamil, FIA, MAAA Vice President and Associate Actuary
Ronald G. Keller Second Vice President
Ken Kiefer Second Vice President
Dean LeCesne Second Vice President
Marilyn McCullough Vice President
Carl Marcero Second Vice President
Lisa Moriyama Second Vice President
Joseph K. Nelson Second Vice President
John Oliver Second Vice President
Daragh O'Sullivan Second Vice President
Stephanie Quincey Second Vice President
James R. Robinson Second Vice President
John J. Romer Vice President
Thomas M. Ronce Second Vice President and Assistant General Counsel
Hugh Shellenberger Second Vice President
Mary Spence Second Vice President
Jean Stefaniak Second Vice President
Michael S. Stein Second Vice President
Christina Stiver Second Vice President
David Stone Second Vice President
John Tillotson Second Vice President
Janet Unruh Second Vice President and Assistant General Counsel
Colleen Vandermark Vice President
Susan Viator Second Vice President
Richard T. Wang Second Vice President
James B. Watson Second Vice President and Assistant General Counsel
C-5
<PAGE>
Joanne E. Whitaker Second Vice President
Sheila Wickens, MD Second Vice President and Medical Director
William Wojciechowski Second Vice President
Michael B. Wolfe Vice President
Wilbur L. Fulmer Tax Officer
James Wolfenden Statement Officer
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the Depositor
or Registrant
Registrant is a separate account of Transamerica Occidental Life
Insurance Company, is controlled by the Contract Owners, and is not controlled
by or under common control with any other person. The Depositor, Transamerica
Occidental Life Insurance Company, is wholly owned by Transamerica Insurance
Corporation of California (Transamerica-California). Transamerica-California may
be deemed to be controlled by its parent, Transamerica Corporation.
The following chart indicates the persons controlled by or under
common control with Transamerica.
TRANSAMERICA CORPORATION AND SUBSIDIARIES
WITH STATE OR COUNTRY OF INCORPORATION
Transamerica Corporation
ARC Reinsurance Corporation - Hawaii
*Coast Service Company - California
*Inter-America Corporation - California
*LMS Co. - California
*Mortgage Corporation of America - California
Pyramid Insurance Company, Ltd. - Hawaii
Pacific Cable Ltd. - Bermuda
TC Cable, Inc. (25% ownership) - Delaware
River Thames Insurance Company Ltd. (51% ownership) - United Kingdom
*RTI Holdings, Inc. - Delaware
*TCS Inc. - Delaware
*Trans International Entities Inc. - Delaware
Transamerica Airlines, Inc. - Delaware
Transamerica Asset Management Group, Inc. - Delaware
Criterion Investment Management Company - Texas
C-6
<PAGE>
*Transamerica Corporation (Oregon) - Oregon
ss.Transamerica Delaware, L.P. - Delaware
Transamerica Finance Group, Inc. - Delaware
Transamerica Financial Services Finance Company - Delaware (TFG owns
100% of common stock; TFC owns 100% of preferred stock)
Transamerica HomeFirst, Inc. - California
Transamerica Finance Corporation - Delaware
BWAC Twelve, Inc. - Delaware
Transamerica Insurance Finance Corporation - Maryland
Transamerica Insurance Finance Corporation, California -
California
Transamerica Insurance Finance Corporation, Canada -
Canada
Transamerica Insurance Finance Company (U.K.) - Maryland
Arcadia General Insurance Company - Arizona
Arcadia National Life Insurance Company - Arizona
Transamerica Insurance Administrators, Inc. - Delaware
First Credit Corporation - Delaware
*Pacific Agency, Inc. - Indiana
Pacific Finance Loans - California
Pacific Service Escrow Inc. - Delaware
Transamerica Acceptance Corporation - Delaware
Transamerica Credit Corporation - Nevada
Transamerica Credit Corporation - Washington
Transamerica Financial Consumer Discount Company - Pennsylvania
Transamerica Financial Corporation - Nevada
Transamerica Financial Professional Services, Inc. - California
Transamerica Financial Services, Inc. - British Columbia
Transamerica Financial Services - California
NAB Services, Inc. - California
Transamerica Financial Services - Wyoming
Transamerica Financial Services Company - Ohio
Transamerica Financial Services, Inc. - Alabama
Transamerica Financial Services, Inc. - Arizona
Transamerica Financial Services, Inc. - Hawaii
Transamerica Financial Services, Inc. - Kansas
Transamerica Financial Services Inc. - Minnesota
Transamerica Financial Services, Inc. - New Jersey
Transamerica Financial Services, Inc. - Texas
Transamerica Financial Services (Inc.) - Oklahoma
Transamerica Financial Services of Dover, Inc. - Delaware
TELCO Holding Co., Inc. - Delaware
Transamerica Commercial Finance Corporation, I - Delaware
BWAC Credit Corporation - Delaware
BWAC International Corporation - Delaware
Transamerica Business Credit Corporation - Delaware
Transamerica Inventory Finance Corporation - Delaware
Transamerica Commercial Finance Corporation - Delaware
TCF Asset Management Corporation - Colorado
Transamerica Joint Ventures, Inc. - Delaware
BWAC Seventeen, Inc. - Delaware
C-7
<PAGE>
*Transamerica Commercial Finance Canada, Limited - Ontario
Transamerica Commercial Finance Corporation, Canada -
Canada
*TCF Commercial Leasing Corporation, Canada - Ontario
Transamerica Commercial Finance France S.A. - France
BWAC Twenty-One, Inc. - Delaware
Transamerica Commercial Holdings Limited - United Kingdom
Transamerica Commercial Finance Limited - United Kingdom
Transamerica Trailer Leasing Limited -
United Kingdom (51%)
Transamerica GmbH Inc. - Delaware
Transamerica Financieringsmattschappij B.V. - Netherlands
*Transamerica Finanzierungs GmbH - Germany
(BWAC Twenty-One, Inc./Transamerica GmbH Inc.)
Transamerica Finanzierungs GmbH - Germany
TA Leasing Holding Co., Inc. - Delaware
Transamerica Leasing Inc. - Delaware
Transamerica Leasing Holdings, Inc. - Delaware
Greybox Services Ltd. - United Kingdom
Greybox L.L.C. - Delaware
Intermodal Equipment, Inc. - Delaware
Transamerica Leasing N.V. - Belgium
Transamerica Leasing Srl. - Italy
Transamerica Container Acquisition Corporation - Delaware
Transamerica Distribution Services Inc. - Delaware
Transamerica Leasing Coordination Center - Belgium
Transamerica Leasing do Brasil S/C Ltda. - Brazil
Transamerica Leasing GmbH - Germany
Transamerica Leasing (HK) Ltd. - Hong Kong
Transamerica Leasing Limited - United Kingdom
ICS Terminals (U.K.) Limited - United Kingdom
Transamerica Leasing Proprietary Limited - South Africa
Transamerica Leasing Pty. Ltd. - Australia
Transamerica Leasing (Canada) Inc. - Canada
Transamerica Tank Container Leasing Pty. Limited - Australia
Transamerica Trailer Holdings I Inc. - Delaware
Transamerica Trailer Holdings II Inc. - Delaware
Transamerica Trailer Holdings III - Delaware
Transamerica Trailer Leasing AB - Sweden
Transamerica Trailer Leasing (Belgium) N.V. -
Belgium
Transamerica Trailer Leasing (Netherlands) B.V. - Netherlands
Transamerica Trailer Leasing A/S - Denmark
Transamerica Trailer Leasing GmbH - Germany
Transamerica Trailer Leasing S.A. - France
Transamerica Trailer Leasing S.p.A. - Italy
Transamerica Trailer Spain, S.A. - Spain
Transamerica Transport Inc. - New Jersey
*Transamerica Homes, Inc. - Delaware
Transamerica Information Management Services, Inc. - Delaware
Transamerica Insurance Corporation of California - California
C-8
<PAGE>
Arbor Life Insurance Company - Arizona
Plaza Insurance Sales, Inc. - California
*Transamerica Advisors, Inc. - California
Transamerica Annuity Service Corporation - New Mexico
Transamerica Financial Resources, Inc. - Delaware
Financial Resources Insurance Agency of Texas, Inc. - Texas
TBK Insurance Agency of Ohio - Ohio
Transamerica Financial Resources Insurance Agency of Alabama, Inc. -
Alabama
Transamerica Financial Resources Insurance Agency of Massachusetts,
Inc. - Massachusetts
Transamerica Securities Sales Corporation - Maryland
Transamerica International Insurance Services, Inc. - Delaware
Bulkrich Trading Limited (50%) - Hong Kong
Home Loans & Finance Limited - United Kingdom
Transamerica Occidental Life Insurance Company - California Bulkrich
Trading Limited (50%) - Hong Kong First Transamerica Life
Insurance Company - New York *NEF Investment Company -
Delaware Transamerica Life Insurance and Annuity Company -
North Carolina
Transamerica Assurance Company - Missouri
Transamerica Life Insurance Company of Canada - Canada
Transamerica Variable Insurance Fund, Inc. - Maryland
USA Administration Services, Inc. - Kansas
Transamerica Products, Inc. - California
Transamerica Leasing Ventures, Inc. - California
Transamerica Products I, Inc. - California
Transamerica Products II, Inc. - California
Transamerica Products IV, Inc. - California
Transamerica Service Company - Delaware
Transamerica International Holdings, Inc. - Delaware
TC Cable, Inc. (75% ownership)
*Transamerica International Limited - Canada
Transamerica Investment Services, Inc. - Delaware
*Transamerica Land Capital, Inc. - California
*Bankers Mortgage Company of California - California
ss.Transamerica LP Holdings Corp. - Delaware
oTransamerica Real Estate Tax Service
oTransamerica Flood Hazard Certification - New Jersey
Transamerica Realty Services, Inc. - Delaware
*The Gilwell Company - California
Pyramid Investment Corporation - Delaware
Transamerica Minerals Company - California
Transamerica Oakmont Corporation - California
Transamerica Properties, Inc. - Delaware
Transamerica Real Estate Management Co. - California
Transamerica Retirement Management Corporation - Delaware
C-9
<PAGE>
Ventana Inn, Inc. - California
*Transamerica Systems Corporation - Delaware
Transamerica Telecommunications Corporation - Delaware
*Designates INACTIVE COMPANIES
oA Division of Transamerica Corporation
ss.Limited Partner; Transamerica Corporation is General Partner
Item 27. Number of Contractowners
As of September 1, 1996 there were [216] Contract Owners of
Registrant's Contracts.
Item 28. Indemnification
Transamerica's Bylaws provide in Article V as follows:
Section 1. Right to Indemnification.
Each person who was or is a party or is threatened to be made a party to or is
involved, even as a witness, in any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(hereafter a "Proceeding"), by reason of the fact that he, or a person of whom
he is the legal representative, is or was a director, officer, employee, or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, or other enterprise, or was a
director, officer, employee, or agent of a foreign or domestic corporation that
was predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation, including service with respect to
employee benefit plans, whether the basis of the Proceeding is alleged action in
an official capacity as a director, officer, employee, or agent or in any other
capacity while serving as a director, officer, employee, or agent Hereafter an
"Agent"), shall be indemnified and held harmless by the corporation to the
fullest extent authorized by statutory and decisional law, as the same exists or
may hereafter be interpreted or amended (but, in the case of any such amendment
or interpretation, only to the extent that such amendment or interpretation
permits the corporation to provide broader indemnification rights than were
permitted prior thereto) against all expense, liability, and loss (including
attorneys' fees, judgements, fines, ERISA excise taxes and penalties, amounts
paid or to be paid in settlement, any interest, assessments, or other charges
imposed thereon, and any federal, state, local or foreign taxes imposed on any
Agent as a result of the actual or deemed receipt of any payments under this
Article) incurred or suffered by such person in connection with investigating,
defending, being a witness in, or participating in (including on appeal), or
preparing for any of the foregoing, in any Proceeding (hereafter Expenses");
provided however. that except as to actions to enforce indemnification rights
pursuant to Section 3 of this Article, the corporation shall indemnify any Agent
seeking indemnification in connection with a Proceeding (or part thereof)
initiated by such person only if the Proceeding (or part thereof) we authorized
by the Board of Directors of the corporation. The right to indemnification
conferred in this Article shall be a contract right. [It is the Corporation's
intent that the bylaws provide indemnification in excess of that expressly
permitted by Section 317 of the California General Corporation Law, as
authorized by the Corporation's Articles of Incorporation.]
Section 2. Authority to Advance Expenses.
Expenses incurred by an officer or director (acting in his capacity as such) in
defending a Proceeding shall be pad by the corporation in advance of the final
disposition of such Proceeding, provided however. that if required by the
California General Corporation Law, as amended, such Expanses shall be advanced
only upon delivery to the corporation of an undertaking by or on behalf of such
director or officer to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the corporation as authorized in
this Article or otherwise.
C-10
<PAGE>
Expenses incurred by other Agents of the corporation (or by the directors or
officers not acting in their capacity as such, including service with respect to
Employee benefit plans) may be advanced upon the receipt of a similar
undertaking, if required by law, and upon such other terms and conditions as the
Board of Directors deems appropriate. Any obligation to reimburse the
corporation for Expense advances shall be unsecured and no interest shall be
charged thereon.
Section 3. Right of Claimant to Bring Suit.
If a claim under Section I or 2 of this Article is not paid in full by the
corporation within 30 days after a written claim has been received by the
corporation, the claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to h paid also the expense
(including attorneys' fees) of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending a Proceeding in advance of its final disposition where the
required undertaking has been tendered to the corporation) that the claimant has
not met the standards of conduct that make it permissible under the California
General Corporation Law for the corporation to indemnify the claimant for the
amount claimed. Lee -burden of proving such a defense shall be on the
corporation. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the-claimant is proper under the circumstances because he has met the applicable
standard of conduct set forth in the California General Corporation Law, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that claimant has not met the applicable standard of.conduct.
Section 4. Provisions Nonexclusive.
The rights conferred on any person by this Article shill not be exclusive of any
other rights that such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office. To the extent that any provision of the Articles, agreement, or vote of
the stockholders or disinterested directors is inconsistent with these bylaws,
the provision, agreement, or vote shall take precedence.
Section 5. Authority to Insure.
The corporation may purchase and maintain insurance to protect itself and any
Agent against any Expense asserted against or incurred by such person, whether
or not the corporation would have the power to indemnify the Agent against such
Expense under applicable law or the provisions of this Article [provided that,
in cases where the corporation owns all or a portion of the shares of the
company issuing the insurance policy, the company and/or the policy must meet
one of the two sets of conditions set forth in Section 317 of the California
General Corporation Law, as amended].
Section 6. Survival of Rights.
The rights provided by this Article shall continue as to a person who has ceased
to be an Agent and shall inure to the benefit of the heirs, executors, and
administrators of such person.
Section 7. Settlement of Claims.
The corporation shall not be liable to indemnify any Agent under this Article
(a) for any amounts paid in settlement of any action or claim effected without
the corporation's written consent, which consent shall not be unreasonably
withheld; or (b) for any judicial award, if the corporation was not given a
reasonable and timely opportunity, at its expense, to participate in the defense
of such action.
Section 8. Effect of Amendment
Any amendment, repeal, or modification of this Article shall not adversely
affect any right or protection of any Agent existing at the time of such
amendment, repeal, or modification.
C-11
<PAGE>
Section 9. Subrogation.
In the event of payment under this Article, the corporation shall be subrogated
to the extent of such payment to all of the rights of recovery of the Agent, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of such documents necessary to
enable the corporation effectively to bring suit to enforce such rights.
Section 10. No Duplication of Payments.
The corporation shall not he liable under this Article to make any payment in
connection with any claim made against the Agent to the extent the Agent has
otherwise actually received payment (under any insurance policy, agreement,
vote, or otherwise) of the amounts otherwise indemnifiable hereunder.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by the director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
The directors and officers of Transamerica Occidental Life Insurance
Company are covered under a Directors and Officers liability program which
includes direct coverage to directors and officers (Coverage A) and corporate
reimbursement (Coverage B) to reimburse the Company for indemnification of its
directors and officers. Such directors and officers are indemnified for loss
arising from any covered claim by reason of any Wrongful Act in their capacities
as directors or officers. In general, the term "loss" means any amount which the
insureds are legally obligated to pay for a claim for Wrongful Acts. In general,
the term "Wrongful Acts" means any breach of duty, neglect, error, misstatement,
misleading statement or omission caused, committed or attempted by a director or
officer while acting individually or collectively in their capacity as such,
claimed against them solely by reason of their being directors and officers. The
limit of liability under the program is $65,000,000 for Coverage A and
$55,000,000 for Coverage B for the period 11/25/93 to 11/25/94. Coverage B is
subject to a self insured retention of $5,000,000. The primary policy under the
program is with Corporate Officers and Directors Assurance Holding Limited
(CODA).
Pursuant to the Marketing Agreement with the Underwriter, Transamerica
Occidental will indemnify and hold harmless the Underwriter and each person who
controls it against any liabilities to the extent that they arise from
inaccurate or misleading statements in material provided by Transamerica
Occidental.
Item 29. Principal Underwriter
(a) Transamerica Securities Sales Corporation, the principal
underwriter, is also the underwriter and
distributor for shares of Transamerica Investors, Inc. The Underwriter
is wholly-owned by Transamerica Insurance
Corporation of California. Until ________, 1996, Transamerica Financial
Resources, Inc. ("TFR") served as
principal underwriter for the Contracts.
(b) The following table furnishes information with respect to each
director and officer of the principal Underwriter currently distributing
securities of the registrant:
Names and Principal Offices with
Business Address Principal Underwriter
C-12
<PAGE>
Barbara Kelley Director & President
Regina Fink Director & Secretary
James Roszak Director
Nooruddin Veerjee Director
Dan Trivers Senior Vice President
Nicki Bair Vice President
Chris Shaw Second Vice President
Ben Tang Treasurer
*The Principal business address for each officer and director is 1150 South
Olive, Los Angeles, CA 90015.
TFR received $ 282.00 from Separate Account C in 1995.
Item 30. Location of Accounts and Records
Physical possession of each account, book, or other document required
to be maintained is kept at the Company's offices at 1150 South Olive Street,
Los Angeles, California 90015-2211.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) Registrant hereby 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;
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
Form N-4 promptly upon written or oral request.
C-13
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of Transamerica Occidental's Separate Account Fund C,
in the City of Los Angeles, State of California on the 3rd day of October, 1996.
TRANSAMERICA OCCIDENTAL'S
SEPARATE ACCOUNT FUND C
By: ________________________________
Barbara A. Kelley, President*
As required by the Securities Act of 1933, this registration statement
has been signed on October 3, 1996 by the following persons in the capacities
indicated.
Signature Title
_______________________*
Barbara A. Kelley President
_______________________*
Sally S. Yamada Treasurer and Assistant Secretary
_______________________*
Donald E. Cantlay Member of the Board of Managers
_______________________*
Richard N. Latzer Member of the Board of Managers
_______________________*
DeWayne W. Moore Member of the Board of Managers
_______________________*
Gary U. Rolle' Chairman of the Board of Managers
_______________________*
Peter J. Sodini Member of the Board of Managers
/s/
*By James W. Dederer, pursuant to Power of Attorney
C-14
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Transamerica Occidental Life Insurance Company certifies that it meets the
requirements of Securities Act Rule 485(b) for the effectiveness of this
registration statement and that it has caused this Post-Effective Amendment No.
44 to the Registration Statement to be signed on its behalf in the City of Los
Angeles, State of California, on the 3rd day of October, 1996.
SEPARATE ACCOUNT C OF
TRANSAMERICA OCCIDENTAL
LIFE INSURANCE COMPANY
(REGISTRANT)
TRANSAMERICA OCCIDENTAL
LIFE INSURANCE COMPANY
(DEPOSITOR)
James W. Dederer
Executive Vice President,
General Counsel and Corporate Secretary
As required by the Securities Act of 1933, this amendment to its
Registration Statement has been signed by the following persons or by their duly
appointed attorney-in-fact in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Titles Date
<S> <C> <C>
______________________* President, Chief Executive _________, 1996
Thomas J. Cusack Officer and Director
______________________* Chairman and Director _________, 1996
John A. Fibiger
______________________* Director _________, 1996
Robert Abeles
______________________* Director _________, 1996
Kent L. Colwell
______________________* Director _________, 1996
James W. Dederer
______________________* Director _________, 1996
Richard I. Finn
______________________* Director _________, 1996
David E. Gooding
______________________* Director _________, 1996
Edgar H. Grubb
C-15
<PAGE>
______________________* Director _________, 1996
Frank C. Herringer
______________________* Director _________, 1996
Richard N. Latzer
______________________* Director _________, 1996
Charles E. LeDoyen
______________________* Director _________, 1996
Karen MacDonald
______________________* Director _________, 1996
Gary U. Rolle'
______________________* Director _________, 1996
James B. Roszak
______________________* Director _________, 1996
William E. Simms
______________________* Director _________, 1996
Nooruddin S. Veerjee
______________________* Director _________, 1996
Robert A. Watson
</TABLE>
_______________________ On October 3, 1996 as Attorney-in-Fact pursuant to
*By: James W. Dederer powers of attorney previously filed and filed herewith,
and in his own capacity as Executive Vice President,
General Counsel and Corporate Secretary.
C-16
<PAGE>
EXHIBIT INDEX
Exhibit Description
No. of Exhibit
(3)(a) Form of Distribution Agreement between Transamerica
Securities Sales Corporation and Transamerica Occidental Life
Insurance Company on behalf of Registrant.
(3)(b) Form of Sales Agreement among Transamerica Securities Sales
Corporation, Transamerica Occidental Life Insurance Company
on behalf of Registrant, and Transamerica Financial Resources,
Inc.
(9) Opinion and Consent of Counsel.
(10)(a) Consent of Counsel.
(10)(b) Consent of Independent Auditors.
(15) Powers of Attorney
<PAGE>
Exhibit (3)(a)
Form of Distribution Agreement between
Transamerica Securities Sales Corporation and
Transamerica Occidental Life Insurance Company on behalf
of Registrant.
C-18
<PAGE>
DISTRIBUTION AGREEMENT
AGREEMENT dated as of October __, 1996 by and between TRANSAMERICA
OCCIDENTAL LIFE INSURANCE COMPANY ("Insurer"), a California insurance company,
on its behalf and on behalf of each separate account identified in Schedule 1
hereto, and TRANSAMERICA SECURITIES SALES CORPORATION ("Distributor"), a
Maryland corporation.
WITNESSETH:
WHEREAS, Distributor is a broker-dealer that engages in the
distribution of variable insurance products and other investment products; and
WHEREAS, Insurer desires to issue certain variable insurance products
described more fully below to the public through Distributor acting as principal
underwriter;
NOW, THEREFORE, in consideration of their mutual promises, Insurer and
Distributor hereby agree as follows:
1. Additional Definitions
a. Contracts -- The class or classes of variable insurance products set
forth on
---------
Schedule 1 to this Agreement as in effect at the time this Agreement is
executed, and such other classes of variable insurance products that may be
added to Schedule 1 from time to time in accordance with Section 11.b of this
Agreement, and including any riders to such contracts and any other contracts
offered in connection therewith. For this purpose and under this Agreement
generally, a "class of Contracts" shall mean those Contracts issued by Insurer
on the same policy form or forms and covered by the same Registration
Statement.
b. Registration Statement -- At any time that this Agreement is in effect, each
----------------------
currently effective registration statement filed with the SEC under the 1933
Act
on a prescribed form, or currently effective post-effective amendment
thereto,
as the case may be, relating to a class of Contracts, including financial
statements included in, and all exhibits to, such registration statement or
post-
effective amendment. For purposes of Section 9 of this Agreement, the term
"Registration Statement" means any document which is or at any time was a
Registration Statement within the meaning of this Section 1.b.
c. Prospectus -- The prospectus included within a Registration
Statement, except that, if the most recently filed version of
the prospectus (including any supplements thereto) filed
pursuant to Rule 497 under the 1933 Act subsequent to the date
on which a Registration Statement became effective differs
from the prospectus included within such Registration
Statement at the time it became
<PAGE>
effective, the term "Prospectus" shall refer to the most
recently filed prospectus filed under Rule 497 under the 1933
Act, from and after the date on which it shall have been
filed. For purposes of Section 9 of this Agreement, the term
"any Prospectus" means any document which is or at any time
was a Prospectus within the meaning of this Section 1.c.
d. Fund -- An investment company in which the Separate Account invests.
e. Variable Account -- A separate account supporting a class or
classes of Contracts and specified on Schedule 1 as in effect
at the time this Agreement is executed, or as it may be
amended from time to time in accordance with Section 11.b of
this Agreement.
f. 1933 Act -- The Securities Act of 1933, as amended.
--------
g. 1934 Act -- The Securities Exchange Act of 1934, as amended.
--------
h. 1940 Act -- The Investment Company Act of 1940, as amended.
--------
i. SEC -- The Securities and Exchange Commission.
j. NASD -- The National Association of Securities Dealers, Inc.
k. Regulations -- The rules and regulations promulgated by the
SEC under the 1933 Act, the 1934 Act and the 1940 Act as in
effect at the time this Agreement is executed or thereafter
promulgated.
l. Selling Broker-Dealer -- A person registered as a
broker-dealer and licensed as a life insurance agent or
affiliated with a person so licensed, and authorized to
distribute the Contracts pursuant to a sales agreement as
provided for in Section 4 of this Agreement.
m. Agents Manual -- The agents manual and other written rules,
regulations and procedures provided by Insurer to insurance
agents appointed to sell its insurance contracts, as revised
from time to time.
n. Representative -- When used with reference to Distributor or a
Selling Broker- Dealer, an individual who is an associated
person, as that term is defined in the 1934 Act, thereof.
o. Application -- An application for a Contract.
p. Premium -- A payment made under a Contract by an applicant or
purchaser to
purchase benefits under the Contract.
- 2 -
<PAGE>
q. Customer Service Center -- the service center identified in
the Prospectus as the
location at which Premiums and Applications are accepted.
2. Authorization and Appointment
a.Scope of Authority. Insurer hereby authorizes Distributor on an exclusive
------------------
basis, and Distributor accepts such authority, subject to the registration
requirements of the 1933 Act and the 1940 Act and the provisions of the 1934
Act and conditions herein, to be the distributor and principal underwriter for
the sale of the Contracts to the public in each state and other jurisdiction
in
which the Contracts may lawfully be sold during the term of this Agreement.
Insurer hereby appoints Distributor as its independent general agent for sale
of
the Contracts. Insurer hereby authorizes Distributor to grant authority to
Selling Broker-Dealers to solicit Applications and Premiums to the extent
Distributor deems appropriate and consistent with the marketing program for
the Contracts or a class of Contracts, subject to the conditions set forth in
Section 4 of this Agreement. The Contracts shall be offered for sale and
distribution at premium rates set from time to time by Insurer. Distributor
shall
use its best efforts to market the Contracts actively, directly and/or through
Selling Broker-Dealers in accordance with Section 4 of this Agreement, subject
to compliance with applicable law, including rules of the NASD.
b.Limits on Authority. Distributor shall act as an independent contractor and
-------------------
nothing herein contained shall constitute Distributor or its agents, officers
or
employees as agents, officers or employees of Insurer solely by virtue of
their
activities in connection with the sale of the Contracts hereunder.
Distributor
and its Representatives shall not have authority, on behalf of Insurer:
to make,
alter or discharge any Contract or other insurance policy or annuity entered
into
pursuant to a Contract; to waive any Contract forfeiture provision; to extend
the
time of paying any Premium; or to receive any monies or Premiums (except for
the sole purpose of forwarding monies or Premiums to Insurer). Distributor
shall not expend, nor contract for the expenditure of, the funds of Insurer.
Distributor shall not possess or exercise any authority on behalf of Insurer
other
than that expressly conferred on Distributor by this Agreement.
3. Solicitation Activities
a. Distributor Representatives. No Distributor Representative
shall solicit the sale of a Contract unless at the time of
such solicitation such individual is duly registered with the
NASD and duly licensed with all applicable state insurance and
securities regulatory authorities, and is duly appointed as an
insurance agent of Insurer.
- 3 -
<PAGE>
b. Solicitation Activities. All solicitation and sales activities
engaged in by Distributor and the Distributor Representatives
with respect to the Contracts shall be in compliance with all
applicable federal and state securities laws and regulations,
as well as all applicable insurance laws and regulations and
the Agents Manual. In particular, without limiting the
generality of the foregoing:
(1) Distributor shall train, supervise and be solely
responsible for the conduct of Distributor
Representatives in their solicitation of Applications
and Premiums and distribution of the Contracts, and
shall supervise their compliance with applicable
rules and regulations of any insurance or securities
regulatory agencies that have jurisdiction over
variable insurance product activities.
(2) Neither Distributor nor any Distributor
Representative shall offer, attempt to offer, or
solicit Applications for, the Contracts or deliver
the Contracts, in any state or other jurisdiction
unless Insurer has notified Distributor that such
Contracts may lawfully be sold or offered for sale in
such state, and has not subsequently revised such
notice.
(3) Neither Distributor nor any Distributor
Representative shall give any information or make any
representation in regard to a class of Contracts in
connection with the offer or sale of such class of
Contracts that is not in accordance with the
Prospectus for such class of Contracts, or in the
then-currently effective prospectus or statement of
additional information for a Fund, or in current
advertising materials for such class of Contracts
authorized by Insurer.
(4) All Premiums paid by check or money order that are
collected by Distributor or any of its
Representatives shall be remitted promptly, and in
any event not later than two business days, in full,
together with any Applications, forms and any other
required documentation, to the Customer Service
Center. Checks or money orders in payment of Premiums
shall be drawn to the order of "Transamerica
Occidental Life Insurance Company." Premiums may be
transmitted by wire order from Distributor to the
Customer Service Center in accordance with the
procedures set forth in the Agents Manual. If any
Premium is held at any time by Distributor,
Distributor shall hold such Premium in a fiduciary
capacity and such Premium shall be remitted promptly,
and in any event not later than two business days, to
Insurer. Distributor acknowledges that all such
Premiums, whether by check, money order or wire,
shall be the property of Insurer. Distributor
acknowledges that Insurer shall have the
unconditional right to reject, in whole or in part,
any Application or Premium.
- 4 -
<PAGE>
c. Representations and Warranties of Distributor. Distributor
represents and warrants to Insurer that Distributor is and
shall remain registered during the term of this Agreement as a
broker-dealer under the 1934 Act, is a member with the NASD,
and is duly registered under applicable state securities laws,
and that Distributor is and shall remain during the term of
this Agreement in compliance with Section 9(a) of the 1940
Act.
4. Selling Broker-Dealers. Distributor shall ensure that sales of the
Contracts by Selling
Broker-Dealers comply with the following conditions, and any additional
conditions
Insurer may specify from time to time.
a. Every Selling Broker-Dealer shall be both registered as a broker-dealer with
the
SEC and a member of the NASD and licensed as an insurance agent with
authority to sell variable products or associated with a insurance agent so
licensed. Any individuals to be authorized to act on behalf of Selling
Broker-
Dealer shall be duly registered with the NASD as representatives of Selling
Broker-Dealer with authority to sell variable products, and shall be licensed
as
insurance agents with authority to sell variable products. Distributor shall
verify that Selling Broker-Dealer and its Representatives are duly licensed
under applicable state insurance law to sell the Contracts (or, if Broker-
Dealer
is not so licensed, that it is associated with an entity so licensed).
b. Every Selling Broker-Dealer (or, if applicable, its associated
general insurance agency) and each of its Representatives
shall have been appointed by Insurer, provided that Insurer
reserves the right to refuse to appoint any proposed person,
or once appointed, to terminate such appointment.
c. Every Selling Broker-Dealer must enter into a written sales
agreement with Distributor which sales agreement, among other
things, will require such Selling Broker-Dealer to use its
best efforts to solicit applications for Contracts and to
comply with applicable laws and regulations, including the
Insurer's rules and regulations as reflected in the Agents
Manual or otherwise communicated to agents appointed by
Insurer, and will contain such other provisions as the
Distributor deems to be consistent herewith.
d.In view of Insurer's desire to ensure that Contracts will be sold to
purchasers
for whom the Contracts will be suitable, the written Sales Agreement shall
require that Selling Broker-Dealers and their Representatives not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the Contract is suitable
for
the applicant. While not limited to the following, a determination of
suitability
shall be based on information supplied by an applicant after a reasonable
inquiry concerning the applicant's other security holdings, insurance and
investment objectives, financial situation and needs, and the likelihood that
the
- 5 -
<PAGE>
applicant will continue to make any premium payments
contemplated by the Contract applied for and will keep the
Contract in force for a sufficient period of time so that
Insurer's acquisition costs are amortized over a reasonable
period of time.
5. Marketing Materials
a.Preparation and Filing. Distributor shall be primarily responsible for the
design
----------------------
and preparation of all promotional, sales and advertising material relating to
the
Contracts. Distributor shall be responsible for filing such material, as
required,
with the NASD and any state securities regulatory authorities. Insurer shall
be
responsible for filing all promotional, sales or advertising material, as
required,
with any state insurance regulatory authorities. Insurer shall be responsible
for
preparing the Contract Forms and filing them with applicable state insurance
regulatory authorities, and for preparing the Prospectuses and Registration
Statements and filing them with the SEC and state regulatory authorities, to
the
extent required. The parties shall notify each other expeditiously of any
comments provided by the SEC, NASD or any securities or insurance
regulatory authority on such material, and will cooperate expeditiously in
resolving and implementing any comments, as applicable.
b.Use in Solicitation Activities. Insurer shall be responsible
for furnishing Distributor with such Applications,
Prospectuses and other materials for use by Distributor and
any Selling Broker-Dealers in their solicitation activities
with respect to the Contracts. Insurer shall notify
Distributor of those states or jurisdictions which require
delivery of a statement of additional information with a
prospectus to a prospective purchaser.
6. Compensation and Expenses
a. Insurer shall pay compensation for sales of the Contracts in
accordance with Schedule 2 hereto. Upon Distributor's request,
Insurer shall pay compensation payable to Distributor
Representatives and to Selling Broker-Dealers, on
Distributor's behalf, subject to the provisions of Section 7
of this Agreement.
b. Insurer shall pay all expenses in connection with:
[(1) the preparation and filing of each Registration
Statement (including each pre-effective and
post-effective amendment thereto) and the preparation
and filing of each Prospectus (including any
preliminary and each definitive Prospectus);
(2) the preparation, underwriting, issuance and
administration of the
Contracts;
- 6 -
<PAGE>
(3) any registration, qualification or approval or other
filing of the Contracts or Contract forms required
under the securities or insurance laws of the states
in which the Contracts will be offered.
(4) all registration fees for the Contracts payable to
the SEC; and
(5) the printing of all promotional materials, definitiv
Prospectuses for the
Contracts and any supplements thereto for
distribution to existing
Contractowners.
c. Distributor shall pay the following expenses related to its
distribution of the
Contracts:
(1) [identify any particular expenses to be borne by
Distributor. If none, so
state.]
(2) any other expenses incurred by Distributor or its
Representatives or
employees for the purpose of carrying out the
obligations of Distributor
hereunder.
7. Compliance
a. Maintaining Registration and Approvals. Insurer shall be
responsible for maintaining the registration of the Contracts
with the SEC and any state securities regulatory authority
with which such registration is required, and for gaining and
maintaining approval of the Contract forms where required
under the insurance laws and regulations of each state or
other jurisdiction in which the Contracts are to be offered.
b.Confirmations and 1934 Act Compliance. Insurer, as agent for Distributor,
-------------------------------------
shall confirm to each applicant for and purchaser of a Contract in accordance
with Rule 10b-10 under the 1934 Act acceptance of Premiums and such other
transactions as are required by Rule 10b-10 or administrative interpretations
thereunder. Insurer shall maintain and preserve such books and records with
respect to such confirmations in conformity with the requirements of Rules
17a-3 and 17a-4 under the 1934 Act to the extent such requirements apply.
Insurer shall maintain all such books and records and hold such books and
records on behalf of and as agent for Distributor whose property they are and
shall remain, and acknowledges that such books and records are at all times
subject to inspection by the SEC in accordance with Section 17(a) of the 1934
Act.
- 7 -
<PAGE>
c. Issuance and Administration of Contracts. Insurer shall be
responsible for issuing the Contracts and administering the
Contracts and the Variable Account, provided, however, that
Distributor shall have full responsibility for the securities
activities of all persons employed by the Insurer, engaged
directly or indirectly in the Contract operations, and for the
training, supervision and control of such persons to the
extent of such activities.
8. Investigations and Proceedings
Cooperation. Distributor and Insurer shall cooperate fully in any
securities or insurance regulatory investigation or proceeding or
judicial proceeding arising in connection with the offering, sale or
distribution of the Contracts distributed under this Agreement. Without
limiting the foregoing, Insurer and Distributor shall notify each other
promptly of any customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding received by either
party with respect to the Contracts.
9. Indemnification
a. By Insurer. Insurer shall indemnify and hold harmless Distributor and each
----------
person who controls or is associated with Distributor within the meaning of
such terms under the federal securities laws, and any officer, director,
employee
or agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses
reasonably incurred in connection with, and any amounts paid in settlement
of,
any action, suit or proceeding or any claim asserted), to which Distributor
and/or any such person may become subject, under any statute or regulation,
any NASD rule or interpretation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact
required to be stated therein or necessary to make
the statements therein not misleading, in light of
the circumstances in which they were made, contained
in any (i) Registration Statement or in any
Prospectus [or (ii) blue-sky application or other
document executed by Insurer specifically for the
purpose of qualifying any or all of the Contracts for
sale under the securities laws of any jurisdiction];
provided that Insurer shall not be liable in any such
case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue
statement or alleged untrue statement or omission or
alleged omission made in reliance upon information
furnished in writing to Insurer by Distributor
specifically for use in the preparation of any such
- 8 -
<PAGE>
Registration Statement [or any such blue-sky application] or any
amendment thereof or supplement thereto;
(2) result from any breach by Insurer of any provision of this Agreement.
This indemnification agreement shall be in addition to any
liability that Insurer may otherwise have; provided, however,
that no person shall be entitled to indemnification pursuant
to this provision if such loss, claim, damage or liability is
due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking
indemnification.
b. By Distributor. Distributor shall indemnify and hold harmless Insurer and
each
--------------
person who controls or is associated with Insurer within the meaning of such
terms under the federal securities laws, and any officer, director, employee or
agent of the foregoing, against any and all losses, claims, damages or
liabilities,
joint or several (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which Insurer and/or
any such person may become subject under any statute or regulation, any
NASD rule or interpretation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
(1) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact
required to be stated therein or necessary in order
to make the statements therein not misleading, in
light of the circumstances in which they were made,
contained in any Registration Statement or in any
Prospectus, to the extent, but only to the extent,
that such untrue statement or alleged untrue
statement or omission or alleged omission was made in
reliance upon information furnished in writing by
Distributor to Insurer specifically for use in the
preparation of any such Registration Statement or any
amendment thereof or supplement thereto
(2) result because of any use by Distributor or any
Distributor Representative of promotional, sales or
advertising material not authorized by Insurer or any
verbal or written misrepresentations by Distributor
or any Distributor Representative or any unlawful
sales practices concerning the Contracts by
Distributor or any Distributor Representative under
federal securities laws or NASD regulations; or
(4) result from any breach by Distributor of any
provision of this
Agreement.
- 9 -
<PAGE>
This indemnification shall be in addition to any liability
that Distributor may otherwise have; provided, however, that
no person shall be entitled to indemnification pursuant to
this provision if such loss, claim, damage or liability is due
to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking
indemnification.
c. General. Promptly after receipt by a party entitled to indemnification
-------
("indemnified person") under this Section 9 of notice of the commencement of
any action as to which a claim will be made against any person obligated to
provide indemnification under this Section 9 ("indemnifying party"), such
indemnified person shall notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, but failure to so
notify
the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than on
account
of this Section 9. The indemnifying party will be entitled to participate
in the
defense of the indemnified person but such participation will not relive
such
indemnifying party of the obligation to reimburse the indemnified person for
reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.
The indemnification provisions contained in this Section 9
shall remain operative in full force and effect, regardless of
any termination of this Agreement. A successor by law of
Distributor or Insurer, as the case may be, shall be entitled
to the benefits of the indemnification provisions contained in
this Section 9.
10. Termination. This Agreement shall terminate automatically if it is
assigned by a party
-----------
without the prior written consent of the other party. This Agreement
may be
terminated at any time for any reason by either party upon 60 days'
written notice to
the other party, without payment of any penalty. (The term "assigned"
shall not
include any transaction exempted from Section 15(b)(2) of the 1940
Act.) This
Agreement may be terminated at the option of either party to this
Agreement upon the
other party's material breach of any provision of this Agreement or of
any
representation or warranty made in this Agreement, unless such breach
has been cured
within 10 days after receipt of notice of breach from the non-breaching
party. Upon
termination of this Agreement all authorizations, rights and
obligations shall cease
except the obligation to settle accounts hereunder, including
commissions on Premiums
subsequently received for Contracts in effect at the time of
termination or issued
pursuant to Applications received by Insurer prior to termination.
11. Miscellaneous
a. Binding Effect. This Agreement shall be binding on and shall
inure to the
benefit of the respective successors and assigns of the
parties hereto provided
- 10 -
<PAGE>
that neither party shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of
the other party.
b.Schedules. The parties to this Agreement may amend Schedule 1 to this
---------
Agreement from time to time to reflect additions of any class of Contracts
and
Variable Accounts. The provisions of this Agreement shall be equally
applicable to each such class of Contracts and each Variable Account that may
be added to the , unless the context otherwise requires. Insurer may amend
Schedule 2 unilaterally, from time to time. Any other change in the terms or
provisions of this Agreement shall be by written agreement between Insurer
and
Distributor.
c.Rights, Remedies, and Obligations are Cumulative. The rights, remedies and
------------------------------------------------
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of
either
party to insist upon strict compliance with any of the conditions of this
Agreement shall not be construed as a waiver of any of the conditions, but
the
same shall remain in full force and effect. No waiver of any of the
provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing
waiver.
d. Notices. All notices hereunder are to be made in writing and
shall be given:
if to Insurer, to:
if to Distributor, to:
or such other address as such party may hereafter specify in
writing. Each such notice to a party shall be either hand
delivered or transmitted by registered or certified United
States mail with return receipt requested, or by overnight
mail by a nationally recognized courier, and shall be
effective upon delivery.
f. Interpretation; Jurisdiction. This Agreement constitutes the
whole agreement
between the parties hereto with respect to the subject matte
hereof, and
- 11 -
<PAGE>
supersedes all prior oral or written understandings,
agreements or negotiations between the parties with respect to
such subject matter. No prior writings by or between the
parties with respect to the subject matter hereof shall be
used by either party in connection with the interpretation of
any provision of this Agreement. This Agreement shall be
construed and its provisions interpreted under and in
accordance with the internal laws of the state of
___________________ without giving effect to principles of
conflict of laws.
g.Severability. This is a severable Agreement. In the event that any provision
of
this Agreement would require a party to take action prohibited by applicable
federal or state law or prohibit a party from taking action required by
applicable federal or state law, then it is the intention of the parties
hereto that
such provision shall be enforced to the extent permitted under the law, and
in
any event, that all other provisions of this Agreement shall remain valid and
duly enforceable as if the provision at issue had never been a part hereof.
h.Section and Other Headings. The headings in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
i.Counterparts. This Agreement may be executed in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
j.Regulation. This Agreement shall be subject to the provisions of the 1933
Act,
1934 Act and 1940 Act and the Regulations and the rules and regulations of the
NASD, from time to time in effect, including such exemptions from the 1940
Act as the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified below.
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By:
Name:
Title:
TRANSAMERICA SECURITIES SALES
CORPORATION
By:
Name:
Title:
- 12 -
<PAGE>
Schedule 1
Separate Accounts Subject to this Agreement
Effective November 1, 1996
Transamerica Occidental Separate Account C
<PAGE>
Schedule 2
Effective November 1, 1996
[List Commission]
<PAGE>
Exhibit (3)(b)
Form of Sales Agreement among
Transamerica Securities Sales Corporation,
Transamerica Occidental Life Insurance Company on behalf of Registrant,
and Transamerica Financial Resources, Inc.
- 15 -
C-15
<PAGE>
SALES AGREEMENT
Agreement dated as of October __ , 1996, by and among TRANSAMERICA
OCCIDENTAL LIFE INSURANCE COMPANY ("Insurer"), a California insurance company,
TRANSAMERICA SECURITIES SALES CORPORATION ("Distributor"), a Maryland
corporation, TRANSAMERICA FINANCIAL RESOURCES, INC. ("TFR"), a ______________
corporation.
RECITALS:
A. Pursuant to an agreement with Distributor (the "Distribution
Agreement"), the Insurer has appointed Distributor as the principal underwriter
of the class or classes of variable insurance contracts identified in Schedule 1
to this Agreement at the time that this Agreement is executed, and such other
class or classes of variable insurance products that may be added to Schedule 1
from time to time in accordance with Section 11 of this Agreement (each, a
"class of Contracts"; all such classes, the "Contracts"). Each class of
Contracts will be issued by Insurer through one or more separate accounts of
Insurer ("Separate Accounts"). Pursuant to the Distribution Agreement, Insurer
has authorized Distributor to enter into separate written agreements with
broker-dealers pursuant to which such broker-dealers would be authorized to
participate in the sale of the Contracts and would agree to use their best
efforts to solicit applications for the Contracts.
B. TFR is engaged in the business of selling various investment products,
including variable insurance products.
C. The parties to this Agreement desire that TFR be authorized to solicit
applications for the sale of the Contracts, subject to the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
and covenants hereinafter set forth, the parties agree as follows:
1. Additional Definitions
(a) Registration Statement - With respect to each class of Contracts, the
most recent effective registration statement(s) filed with the SEC or
the most recent effective post-effective amendment(s) thereto,
including financial statements included therein and all exhibits
thereto.
(b) Prospectus - With respect to each class of Contracts, the prospectus
for such
class of Contracts included within the Registration Statement for such
class of
Contracts; provided, however, that, if the most recently filed
prospectus filed
pursuant to Rule 497 under the 1933 Act subsequent to the date on
which the
Registration Statement became effective differs from the prospectus
on file at
the time the Registration Statement became effective, the term
"Prospectus"
shall refer to the most recently filed prospectus filed under Rule
497 from and
after the date on which it shall have been filed.
(c) 1933 Act - The Securities Act of 1933, as amended.
(d) 1934 Act - The Securities Exchange Act of 1934, as amended.
(e) 1940 Act - The Investment Company Act of 1940, as amended.
(f) Agent - An individual associated with TFR who is appointed by Insurer
as an agent for the purpose of soliciting applications.
(g) Premium - A payment made under a Contract to purchase benefits under
such Contract.
(h) Service Center - The service center identified in the Prospectus.
(i) Agents Manual - The manual and other written rules, regulations and
procedures provided by Insurer to insurance agents appointed to sell
the Contracts, as revised from time to time.
(j) SEC - The Securities and Exchange Commission.
(k) NASD - The National Association of Securities Dealers, Inc.
2. Authorization of TFR
(a) Pursuant to the authority granted to it in the Distribution Agreement,
Distributor hereby authorizes TFR under the securities laws and under
the in-
surance laws to sell the Contracts. TFR accepts such authorization
and shall
use its best efforts to find purchasers for the Contracts in each
case acceptable
to Insurer. Distributor and Insurer acknowledge that TFR is an
independent
contractor in the performance of its respective duties and obligations
under this
Agreement. Accordingly, TFR is not obliged or expected to give full
time and
energies to the performance of its obligations hereunder, nor is TFR
obliged or
expected to represent Distributor or Insurer exclusively. Nothing
herein
contained shall constitute TFR, the Agents or any agents or
representatives of
TFR as employees of Distributor or Insurer in connection with the
solicitation
of applications and premiums for the Contracts.
(b) TFR acknowledges that no territory is exclusively assigned hereunder,
and that Insurer and Distributor may in their sole discretion
establish or appoint one or more agencies in any jurisdiction in which
TFR transacts business.
(c) TFR is vested under this Agreement with power and authority to select
and recommend individuals associated with TFR for appointment as
Agents of the Insurer, and only individuals so recommended by TFR
shall become Agents, provided that the conditions of Section 3 are
satisfied, and provided further that Insurer reserves the right to
refuse to appoint any proposed agent or, once appointed, to terminate
the same at any time with or without cause.
(d) TFR shall not expend or contract for the expenditure of the funds of
Distributor
or Insurer, except as they may otherwise agree. TFR shall pay all
expenses it
incurred in the performance of this Agreement, unless otherwise
specifically
provided for in this Agreement or unless Distributor and Insurer shall
have
agreed in advance in writing to share the cost of any such expenses.
TFR shall
not possess or exercise any authority on behalf of Insurer or
Distributor other
than that expressly conferred on TFR by this Agreement. In
particular, and
without limiting the foregoing, TFR shall not have any authority, nor
shall
either grant such authority to any Agent, on behalf of Insurer: to
make, alter
or discharge any Contract or other insurance policy or annuity entered
into
pursuant to a Contract; to waive any Contract forfeiture provision; to
extend
the time of paying any Premiums; or to receive any monies or Premiums
from
applicants for or purchasers of the Contracts (except for the sole
purpose of
forwarding monies or Premiums to Insurer).
(e) TFR acknowledges that Insurer has the right in its sole discretion to
reject any applications or Premiums received by it and to return or
refund to an applicant such applicant's Premium.
3. Licensing and Registration of TFR and Agents
(a) TFR represents and warrants that it is a broker-dealer registered with
the SEC under the 1934 Act, and is a member of the NASD. TFR must, at
all times when performing its functions and fulfilling its obligations
under this Agreement, be duly registered as a broker-dealer under the
1934 Act and in each state or other jurisdiction in which TFR intends
to perform its functions and fulfill its obligations hereunder, and be
a member in good standing of the NASD.
(b) TFR represents and warrants that it is a licensed life insurance agent
where required to solicit applications. TFR must, at all times when
performing its functions and fulfilling its obligations under this
Agreement, be duly licensed to sell the Contracts in each state or
other jurisdiction in which TFR intends to perform its functions and
fulfill its obligations hereunder.
(c) TFR shall ensure that no individual shall offer or sell the Contracts
on its
behalf in any state or other jurisdiction in which the Contracts may
lawfully be
sold unless (i) such individual is an associated person of TFR (as
that term is
defined in Section 3(a)(18) of the 1934 Act) and duly registered with
the
NASD and any applicable state securities regulatory authority as a
registered
person of TFR qualified to sell the Contracts in such state or
jurisdiction,
(ii) duly licensed, registered or otherwise qualified to offer and
sell the
Contracts to be offered and sold by such individual under the
insurance laws of
such state or jurisdiction, and (iii) duly appointed by Insurer with
respect to
such Contracts and such state or jurisdiction. TFR shall be solely
responsible
for background investigations of the Agents to determine their
qualifications,
good character, and moral fitness to sell the Contracts. All matters
concerning
the licensing of any individuals recommended for appointment by TFR
under
any applicable state insurance law shall be a matter directly between
TFR and
such individual, and TFR shall furnish Insurer with proof of proper
licensing of
such individual or other proof, reasonably acceptable to Insurer, of
satisfaction
by such individual of licensing requirements prior to Insurer
appointing any
such individual as an Agent of Insurer. TFR shall notify Insurer and
Distributor immediately upon termination (for whatever reason) of an
Agent's
association with TFR.
(d) Without limiting the foregoing, TFR represents that it is in
compliance with the terms and conditions of letters issued by the
Staff of the SEC with respect to the non-registration of an insurance
agency associated with a registered broker-dealer.
(e) TFR shall notify Insurer immediately in writing if it fails to comply
with any such terms and conditions.
4. TFR Compliance
(a) TFR shall be responsible for securities training, supervision and
control of the Agents in connection with their solicitation activities
with respect to the Contracts and shall supervise Agents' compliance
with applicable federal and state securities law and NASD requirements
in connection with such solicitation activities.
(b) TFR hereby represents and warrants that it is duly in compliance with
all applicable federal and state securities laws and regulations, and
all applicable insurance laws and regulations. TFR shall carry out its
obligations under this Agreement in continued compliance with such
laws and regulations. Further, TFR shall comply, and shall ensure that
Agents comply, with the rules and procedures set forth in the Agents
Manual, and the rules set forth below, and TFR shall be solely
responsible for such compliance.
(i) TFR and Agents shall not offer or attempt to offer the Contracts,
nor solicit applications for the Contracts, nor deliver
Contracts, in any state or jurisdiction in which the Contracts
have not been approved for sale. For purposes of determining
where the Contracts may be offered and applications solicited,
TFR may rely on written notification, as revised from time to
time, that it receives from Insurer pursuant to this Agreement.
(ii) TFR and Agents shall not solicit applications for the Contracts
without delivering the Prospectus for the Contracts, and, where
required by state insurance law, the then-currently effective
statement of additional information for the Contracts, and the
then-currently effective prospectus(es) for the Fund(s).
(iii) TFR and Agents shall not recommend the purchase of a
Contract to an
applicant unless each has reasonable grounds to believe
that such
purchase is suitable for the applicant in accordance with,
among other
things, applicable regulations of any state insurance
regulatory authority,
the SEC and the NASD. While not limited to the following,
a determi-
nation of suitability shall be based on information supplied
by the
applicant after a reasonable inquiry concerning the
applicant's insurance
and investment objectives and financial situation and needs
and shall
entail a review by TFR of all applications for suitability
and
completeness and correctness as to form as well as review
and
endorsement on an internal record of TFR.
(iv) TFR and Agents shall not encourage a prospective purchaser to
surrender or exchange an insurance policy or contract in order to
purchase a Contract or, conversely, to surrender or exchange a
Contract in order to purchase another insurance policy or
contract subject to applicable NASD Rules of Fair Practice and
any other applicable laws, regulations and regulatory guidelines.
(v) TFR and all Agents shall accept initial Premiums in the form of a
check or money order only if made payable to "Transamerica
Occidental Life Insurance Company" and signed by the applicant
for the Contract. TFR and Agent shall not accept third-party
checks or cash for Premiums.
(vi) TFR and Agents shall not offer, sell, or solicit applications for
Contracts or Premiums thereunder which will be subject to or in
connection with any so-called "market timing" or "asset
allocation" program, plan, arrangement or service.
(vii) TFR shall ensure that all checks and money orders and
applications for
the Contracts received by either of them or an Agent shall
be remitted
promptly, and in any event not later than 2 business days
after receipt,
to the Service Center. In the event that any other Premiums
are sent to
an Agent or TFR, rather than to the Service Center, TFR
promptly (and
in any event, not later than 2 business days) remits such
Premiums to
the Service Center. TFR acknowledges that if any Premium is
held at
any time by either of them, such Premium shall be held on
behalf of
Insurer, and TFR shall segregate such Premium from its own
funds and
promptly (and in any event, within 2 business days) remit
such
Premium to the Insurer. All such Premiums, whether by check
, money
order or wire, shall at all times be the property of
Insurer.
(viii) Upon issuance of a Contract by Insurer and delivery of such
Contract to
TFR, TFR shall promptly deliver such Contract to its
purchaser. For
purposes of this provision, "promptly" shall be deemed to
mean not
later than five calendar days. TFR shall return promptly
to Insurer all
receipts for delivered Contracts, all undelivered Contracts
and all
receipts for cancellation, in accordance with the
instructions set forth in
the Agents Manual. Insurer will assume that a Contract will
be
delivered by TFR to the purchaser of such Contract within
five calendar
days for purposes of determining when to transfer Premiums
initially
allocated to the Money Market Account available under such
Contract
to the particular investment options specified by such
purchaser. As a
result, if a purchaser exercises the free look provisions
under a Contract,
TFR shall indemnify Insurer for any loss incurred by Insurer
that results
from TFR's failure to deliver such Contract to its purchaser
within the
contemplated five calendar day period.
(ix) TFR, and the Agents in connection with the offer or sale of the
Contracts, shall not give any information or make any
representations or statements, written or oral, concerning the
Contracts, a Fund or Fund Shares, other than or inconsistent with
information or representations contained in the Prospectuses,
statements of additional information and Registration Statements
for the Contracts, or a Fund, or in reports or proxy statements
therefor, or in promotional, sales or advertising material or
other information supplied and approved in writing by Distributor
and Insurer.
[(c) TFR understands, acknowledges, and represents that Contracts and
Premiums thereunder shall not be solicited, offered, or sold in
connection with any so-called "market timing" or "asset allocation"
program, plan, arrangement or service. Should Distributor or Insurer
determine at its sole discretion that TFR is soliciting, offering, or
selling, or has solicited, offered, or sold, Contracts or Premiums
subject to any so-called "market timing" or "asset allocation"
program, plan, arrangement or service, Distributor or Insurer may take
such action which is necessary, at its sole discretion, to halt such
solicitations, offers or sales. Furthermore, in addition to any
indemnification provided in Section 12 of this Agreement and any other
liability that TFR might have, TFR shall be liable to Distributor and
Insurer and each Fund affected by any so-called "market timing" or
"asset allocation" program, plan, arrangement or service, for any
damages or losses, actual or consequential, sustained by Distributor
or Insurer or any Fund, as a result of any so-called "market timing"
or "asset allocation" program, plan, arrangement or service which
causes such losses or damages following solicitation, offer, or sale
of a Contract or Premium subject to "market timing" or "asset
allocation" or similar service by TFR.
(d) TFR shall promptly furnish to Insurer or its authorized agent any
reports and information that Insurer may reasonably request for the
purpose of meeting Insurer's reporting and recordkeeping requirements
under the insurance laws of any state, under any applicable federal
and state securities laws, rules and regulations.
(e) TFR shall secure and maintain a fidelity bond (including coverage for
larceny
and embezzlement), issued by a reputable bonding company, covering al
of its
directors, officers, agents and employees who have access to funds of
Insurer
or Distributor. This bond shall be maintained at TFR's expense in at
least the
amount prescribed under Article III, Section 32 of the NASD Rules of
Fair
Practice. TFR shall provide Distributor with a copy of said bond
before
executing this Agreement. TFR shall also secure and maintain errors
and
omissions insurance acceptable to Insurer and covering TFR and
Representatives. TFR hereby assigns any proceeds received from a
fidelity
bonding company, errors and omissions or other liability coverage, to
Insurer
or Distributor as their interest may appear, to the extent of their
loss due to
activities covered by the bond, policy or other liability coverage.
If there is
any deficiency amount, whether due to a deductible or otherwise,
TFR shall
promptly pay such amounts on demand. TFR hereby indemnifies and holds
harmless Insurer and Distributor from any such deficiency and from the
costs
of collection thereof, including reasonable attorneys' fees.
5. Sales Materials
(a) During the term of this Agreement, Distributor and Insurer will
provide TFR, without charge, with as many copies of Prospectuses (and
any supplements thereto), current Fund prospectus(es) (and any
supplements thereto), and applications for the Contracts, as TFR may
reasonably request. Upon termination of this Agreement, TFR will
promptly return to Distributor any Prospectuses, applications, Fund
prospectuses, and other materials and supplies furnished by
Distributor or Insurer to TFR or to the Agents.
(b) During the term of this Agreement, Distributor will be responsible for
providing and approving all promotional, sales and advertising
material to be
used by TFR in the course of their solicitation activities hereunder.
Distributor
will file such materials or will cause such materials to be filed with
the SEC,
the NASD, and/or with any state securities regulatory authorities, as
appropriate. TFR shall not use or implement, nor shall they allow any
Agent
to use or implement, any promotional, sales or advertising material
relating to
the Contracts or otherwise advertise the Contracts without the prior
written
approval of Distributor and Insurer.
6. Commissions and Expenses
(a) During the term of this Agreement, Insurer shall pay to TFR as
compensation
for Contracts for which it is the Broker-of-Record, the commissions
and fees
set forth in Schedule 2 to this Agreement, as such Schedule 2 may be
amended
or modified upon __ days' prior notice. Any amendment to Schedule 2
will be
applicable to any Contract for which an application or premium is
received by
the Service Center on or after the effective date of such amendment
or which is
in effect after the effective date of such amendment. Compensation
with
respect to any Contract shall be paid to TFR only for so long as TFR
is the
Broker-of-Record for such Contract.
(b) TFR recognizes that all compensation payable to TFR hereunder will be
disbursed by or on behalf of Insurer after Premiums are received and
accepted by Insurer and that no compensation of any kind other than
that described in this Agreement is payable to TFR for the performance
of its obligations hereunder.
(c) Refund of Compensation. No compensation shall be payable, and TFR
agrees
to reimburse Distributor for any compensation paid to TFR or its
Representatives under each of the following conditions: (i) if
Insurer, in its
sole discretion, determines not to issue the Contract applied for;
(ii) if Insurer
refunds the Premiums upon the applicant's surrender or withdrawal
pursuant to
any "free-look" privilege; (iii) if Insurer refunds the Premiums
paid by
applicant as a result of a complaint by applicant, recognizing that
Insurer has
sole discretion to refund Premiums; and (iv) if Insurer determines
that any
person signing an application who is required to be licensed or any
other
person or entity receiving compensation for soliciting purchase of the
Contracts
is not duly licensed to sell the Contracts in the jurisdiction of such
sale or
attempted sale.
(d) Compensation of TFR and Agents. While this Agreement is in force, the
compensation payable for the supervision and services TFR provides pursuant
to this Agreement shall be as set forth in the compensation schedule attached
hereto. TFR agrees that in the event an Agent ceases to be an associated
person of TFR or ceases to be validly licensed or registered, TFR shall not
receive any compensation based on any Contract or on premiums or purchase
payments thereafter received by Insurer from such former Agent's customers.
Provided however, (i) if within 180 days after such Agent ceases to be an
Agent of TFR, TFR designates another Agent of TFR, who is assigned by TFR
to service the former Agent's business, the compensation not paid shall be
payable to TFR and the commission portion thereof shall be passed on to the
currently assigned Agent who is servicing the former Agent's customers. If an
assigned Agent's replacement is not designated within such 180 day period,
Broker-Dealer may not thereafter designate a replacement Agent for such
Contracts and shall not be entitled to such compensation; (ii) if the former
Agent becomes registered and licensed with another selling broker-dealer and is
appointed by Insurer for the sale of Contracts, and a Contract owner files a
written request (change of dealer authorization) with Distributor that such
owner's Contracts be serviced through the Agent's current selling broker-dealer
and TFR shall not be entitled to any compensation based on such Contracts
after the date of such transfer. TFR agrees that no compensation of any kind
other than described in this Section 6 of this Agreement is payable by Insurer
or Distributor to TFR.
(e) Indebtedness and Right of Setoff. Nothing contained herein shall be
construed as giving TFR or Agent the right to incur any indebtedness
on behalf of Insurer or Distributor. TFR hereby authorizes Insurer and
Distributor to set off liabilities of TFR to Insurer and Distributor
against any and all amounts otherwise payable to TFR.
(f)TFR represents that no commissions or other compensation will be paid for
services rendered in soliciting the purchase of the contracts by any person or
entity not duly registered or licensed by the required authorities and appointed
by Insurer to sell the Contract in the state in which such solicitation ccurred;
provided however, that this provision shall not prohibit the payment of
compensation of the surviving spouse or other beneficiary of a person entitled
to receive such compensation pursuant to a bona fide contract calling for such
payment.
7. Interests in Agreement. Agents shall have no interest in this Agreement or
right to any commissions to be paid to TFR hereunder. TFR shall be solely
responsible for the payment of any commission or consideration of any kind to
Agents. TFR shall be solely responsible under applicable tax laws for the
reporting of compensation paid to Agents. TFR shall have no right to withhold or
deduct any commission from any Premiums in respect of the Contracts which it may
collect, subject to Schedule 2 to this Agreement. TFR shall have no interest in
any compensation paid by Insurer to Distributor, now or hereafter, in connection
with the sale of any Contracts hereunder.
8. Term and Exclusivity of Agreement. This Agreement may not be assigned except
by written mutual consent and shall continue for an indefinite term, subject to
the termination by either party by ten-days' advance written notice to the other
party, except that in the event Distributor or TFR ceases to be a registered
broker-dealer or a member of the NASD, this Agreement shall immediately
terminate. Upon its termination, all authorizations, rights and obligations
shall cease, except the agreements in Sections _______________ and the payment
of any accrued but unpaid compensation to TFR.
9. Complaints and Investigations
(a)Distributor, Insurer, TFR each shall cooperate fully in any securities or
insurance regulatory investigation or proceeding or judicial proceeding arising
in connection with the Contracts marketed under this Agreement. TFR will be
notified promptly of any customer complaint or notice of any regulatory
investigation or proceeding or judicial proceeding received by Distributor or
Insurer with respect to TFR or any Agent; and TFR will promptly notify
Distributor and the Insurer of any written customer complaint or notice of any
regulatory investigation or proceeding or judicial proceeding received by TFR
with respect to itself or any Agent in connection with this Agreement or any
Contract.
(b) In the case of a customer complaint, Distributor, Insurer, TFR will
cooperate in investigating such complaint and any response by TFR to
such complaint will be sent to Distributor for approval not less than
five business days prior to its being sent to the customer or
regulatory authority, except that if a more prompt response is
required, the proposed response shall be communicated by telephone or
facsimile.
10. Assignment. This Agreement shall be nonassignable by the parties hereto
without the
prior written consent of all other parties.
11. Modification of Agreement. This Agreement supersedes all prior agreements,
either oral or written, between the parties relating to the Contracts and,
except for any amendment of Schedule 1 pursuant to the terms of Section 2 hereof
or Schedule 2 pursuant to the terms of Section 6 hereof, may not be modified in
any way unless by written agreement signed by all of the parties.
12. Indemnification
(a) TFR shall indemnify and hold harmless Distributor and Insurer and each
person
who controls or is associated with Distributor or Insurer within the meaning of
such terms under the federal securities laws, and any officer, director,
employee
or agent of the foregoing, against any and all losses, claims, damages or
liabilities, joint or several (including any investigative, legal and other
expenses
reasonably incurred in connection with, and any amounts paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they or any of
them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out of
or
are based upon:
(i) violation(s) by TFR or an Agent of federal or state securities law or
regulation(s), insurance law or regulation(s), or any rule or
requirement
of the NASD;
(ii) any unauthorized use of promotional, sales or advertising
material, any oral or written misrepresentations, or any unlawful
sales practices concerning the Contracts, by TFR or an Agent;
(iii) claims by the Agents or other agents or representatives of TFR for
commissions or other compensation or remuneration of any type;
(iv) any failure on the part of TFR or an Agent to submit Premiums or
applications to Insurer, or to submit the correct amount of a
Premium, on a timely basis and in accordance with this Agreement
and the Agents Manual, subject to applicable law;
(v) any failure on the part of TFR or an Agent to deliver Contracts
to purchasers thereof on a timely basis and in accordance with
the Agents Manual; or
(vi) a breach by TFR of any provision of this Agreement.
This indemnification will be in addition to any liability which TFR may
otherwise have.
(b) Distributor and Insurer, jointly and severally, shall indemnify and hold
harmless TFR and each person who controls or is associated with TFR within
the meaning of such terms under the federal securities laws, and any officer,
director, employee or agent of the foregoing, against any and all losses,claims,
damages or liabilities, joint or several (including any investigative, legal and
other expenses reasonably incurred in connection with, and any amounts paid
in settlement of, any action, suit or proceeding or any claim asserted), towhich
they or any of them may become subject under any statute or regulation,
NASD rule or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any breach by
Distributor or Insurer of any provision of this Agreement. This indemnification
will be in addition to any liability which Distributor and Insurer, jointly and
severally, may otherwise have.
(c) Promptly after receipt by a party entitled to indemnification ("indemnified
person") under this Section 12 of notice of the commencement of any action as
to which a claim will be made against any person obligated to provide
indemnification under this Section 12 ("indemnifying party"), such indemnified
person shall notify the indemnifying party in writing of the commencement
thereof as soon as practicable thereafter, but failure to so notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to the indemnified person otherwise than on account of this
Section 12. The indemnifying party will be entitled to participate in the
defense of the indemnified person but such participation will not relive such
indemnifying party of the obligation to reimburse the indemnified person for
reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.
The indemnification provisions contained in this Section 12 shall
remain operative in full force and effect, regardless of any
termination of this Agreement. A successor by law of Distributor or
Insurer, as the case may be, shall be entitled to the benefits of the
indemnification provisions contained in this Section 12. After receipt
by a party entitled to indemnification ("indemnified party") under
this Section 12 of notice of the commencement of any action, if a
claim in respect thereof is to be made against any person obligated to
provide indemnification under this Section 12 ("indemnifying party"),
such indemnified party will notify the indemnifying party in writing
of the commencement thereof as soon as practicable thereafter,
provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Section 12, except to the
extent that the omission results in a failure of actual notice to the
indemnifying party and such indemnifying party is damaged solely as a
result of the failure to give such notice. The indemnifying party,
upon the request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate
in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent,
but if such proceeding is settled with such consent or if final
judgment is entered in such proceeding for the plaintiff, the
indemnifying party shall indemnify the indemnified party from and
against any loss or liability by reason of such settlement or
judgment.
13. Rights, Remedies, and Obligations are Cumulative. The rights, remedies and
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of a party
to insist upon strict compliance with any of the conditions of this Agreement
shall not be construed as a waiver of any of the conditions, but the same shall
remain in full force and effect. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
14. Notices. All notices hereunder are to be made in writing and shall be
given:
If to Insurer, to:
if to Distributor, to:
if to TFR, to:
or such other address as such party may hereafter specify in writing. Each such
notice to a party shall be either hand delivered or transmitted by registered or
certified United States mail with return receipt requested, or by overnight mail
by a nationally recognized courier, and shall be effective upon delivery.
15. Interpretation, Jurisdiction, Etc. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior oral or written understandings, agreements or
negotiations between the parties with respect to the subject matter hereof. No
prior writings by or between the parties hereto with respect to the subject
matter hereof shall be used by a party in connection with the interpretation of
any provision of this Agreement. This Agreement shall be construed and its
provisions interpreted under and in accordance with the internal laws of the
state of ______________ without giving effect to principles of conflict of laws.
16. Headings. The headings in this Agreement are included for convenience of
reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their
construction or effect.
17. Counterparts. This Agreement may be executed in two or more counterparts
each of
which taken together shall constitute one and the same instrument.
18. Severability. This is a severable Agreement. In the event that any provision
of this Agreement would require a party to take action prohibited by applicable
federal or state law or prohibit a party from taking action required by
applicable federal or state law, then it is the intention of the parties hereto
that such provision shall be enforced to the extent permitted under the law,
and, in any event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never been a part
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
TRANSAMERICA OCCIDENTAL LIFE
INSURANCE COMPANY
By:
Name:
Title:
TRANSAMERICA SECURITIES SALES
CORPORATION
By:
Name:
Title:
TRANSAMERICA FINANCIAL RESOURCES,
INC.
By:
Name:
Title:
<PAGE>
Schedule 1
Contracts Subject to this Agreement
Effective November 1, 1996
Annual Deposit Contract
Single Deposit Deferred Contract
Single Deposit Immediate Contract
<PAGE>
Schedule 2
Effective November 1, 1996
[List Commission]
<PAGE>
Exhibit (9)
Opinion and Consent of Counsel.
<PAGE>
October 3, 1996
Transamerica Occidental Life
Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
Re: Separate Account C
File No. 2-36250
Ladies and Gentlemen:
We hereby consent to the reference to our name under the
caption "Legal Matters" in the Statement of Additional Information filed as part
of Post-Effective Amendment No. 44 to the Form N-4 Registration Statement for
Separate Account C. In giving this consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933.
Very truly yours,
SUTHERLAND, ASBILL & BRENNAN
/s/ Frederick R. Bellamy
Frederick R. Bellamy
<PAGE>
Exhibit (10)(a)
Consent of Counsel.
- 33 -
C-33
<PAGE>
October 2, 1996
Transamerica Occidental Life
Insurance Company
1150 South Olive Street
Los Angeles, CA 90015
Gentlemen:
With reference to the Post-Effective Amendment No. 44 to the Registration
Statement on Form N-4 filed by Transamerica Occidental Life Insurance Company
and its Separate Account C with the Securities and Exchange Commission covering
certain variable annuity contracts (File No. 2-36250), I have examined such
documents and such law as I considered necessary and appropriate, and on the
basis of such examinations, it is my opinion that:
1.) Transamerica Occidental Life Insurance Company is duly
organized and validly existing under the laws of the State of
California.
2.) The variable annuity contracts, when issued as contemplated by
the said Form N-4 Registration Statement, as amended, will
constitute legal, validly issued and binding obligations of
Transamerica Occidental Life Insurance Company.
I hereby consent to the filing of this opinion as an exhibit to the said Post-
Effective Amendment No. 44 to the Form N-4 Registration Statement and to the
reference to my name under the caption "Legal Matters" in the Prospectus
contained in the said Post-Effective Amendment No. 44. In giving this consent, I
am not admitting that I am in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933.
Very truly yours,
James W. Dederer
Executive Vice President,
General Counsel and
Corporate Secretary
<PAGE>
- 34 -
C-34
<PAGE>
Exhibit (10)(b)
Consent of Independent Auditors.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "condensed Financial
Information" in the Prospectus and under the caption "Accountants" and to the
use of our report dated February 14, 1996, on the Transamerica Occidental Life
Insurance Company and Subsidiaries contained in the Statement of Additional
Information, included in the Post-Effective Amendment No. 44 under the
Securities Act of 1933 and Amendment No. 26 under the Investment Company Act of
1940 to the Form N-4 (Nos. 2-36250, 811-2025) for Transamerica Occidental's
Separate Account Fund C to be filed with the Securities and Exchange Commission
on October 3, 1996.
Los Angeles, California
October 2, 1996
<PAGE>
Exhibit (15)
Powers of Attorney
- 36 -
C-36
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Occidental Life Insurance
Company, a California corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
him and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and him or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto
set her hand, this 22nd day of July, 1996.
Robert Abeles
POWER OF ATTORNEY
- 37 -
C-37
<PAGE>
The undersigned director of Transamerica Occidental Life Insurance
Company, a California corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, Charles E. LeDoyen and David E. Gooding
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any variable life insurance or annuity policies: registration statements on
any form or forms under the Securities Act of 1933 and under the Investment
Company Act of 1940, and any and all amendments and supplements thereto, with
all exhibits and all instruments necessary or appropriate in connection
therewith, each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or other, and to
have full power and authority to do or cause to be done in the name and on
behalf of the undersigned each and every act and thing requisite and necessary
or appropriate with respect thereto to be done in and about the premises in
order to effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may do or cause to be
done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 2nd day of February 1994.
-----------------------------
Thomas J. Cusack
- 38 -
C-38
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Occidental Life Insurance
Company, a California corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, Charles E. LeDoyen and David E. Gooding
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any variable life insurance or annuity policies: registration statements on
any form or forms under the Securities Act of 1933 and under the Investment
Company Act of 1940, and any and all amendments and supplements thereto, with
all exhibits and all instruments necessary or appropriate in connection
therewith, each of said attorneys-in-fact and agents and his or their
substitutes being empowered to act with or without the others or other, and to
have full power and authority to do or cause to be done in the name and on
behalf of the undersigned each and every act and thing requisite and necessary
or appropriate with respect thereto to be done in and about the premises in
order to effectuate the same, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may do or cause to be
done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 29th day of March, 1994.
John A. Fibiger
- 39 -
C-39
<PAGE>
- 40 -
C-40
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 14th day of July, 1992.
Richard H. Finn
- 41 -
C-41
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 12th day of April, 1990.
David E. Gooding
- 42 -
C-42
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
Edgar H. Grubb
- 43 -
C-43
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
Frank C. Herringer
- 44 -
C-44
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
Richard N. Latzer
- 45 -
C-45
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
Charles E. LeDoyen
- 46 -
C-46
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
Gary U. Rolle
- 47 -
C-47
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 16th day of April, 1990.
James B. Roszak
- 48 -
C-48
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 13th day of March, 1991.
William E. Simms
- 49 -
C-49
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 8th day of April, 1993.
Nooruddin S. Veerjee
- 50 -
C-50
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 8th day of April, 1993.
Karen O. MacDonald
- 51 -
C-51
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 8th day of April, 1993.
Robert A. Watson
- 52 -
C-52
<PAGE>
POWER OF ATTORNEY
The undersigned director of Transamerica Life Insurance and Annuity
Company, a North Carolina corporation (the "Company"), hereby constitutes and
appoints Aldo Davanzo, James W. Dederer, David E. Gooding and Charles E. LeDoyen
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution to each, for
his and on his behalf and in his name, place and stead, to execute and file any
of the documents referred to below relating to registrations under the
Securities Act of 1933 and under the Investment Company Act of 1940 with respect
to any life insurance or annuity policies: registration statements on any form
or forms under the Securities Act of 1933 and under the Investment Company Act
of 1940, and any and all amendments and supplements thereto, with all exhibits
and all instruments necessary or appropriate in connection therewith, each of
said attorneys-in-fact and agents and his or their substitutes being empowered
to act with or without the others or other, and to have full power and authority
to do or cause to be done in the name and on behalf of the undersigned each and
every act and thing requisite and necessary or appropriate with respect thereto
to be done in and about the premises in order to effectuate the same, as fully
to all intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set
his hand, this 8th day of April, 1993.
Daniel E. Jund
- 53 -
C-53
