<PAGE> 1
File No. 333-_____
811-1978
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. / /
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 24 /X/
(Exact Name of Registrant)
OHIO NATIONAL VARIABLE ACCOUNT A
(Name of Depositor)
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Address of Depositor's Principal Executive Offices)
One Financial Way
Cincinnati, Ohio 45242
(Depositor's Telephone Number)
(513) 794-6316
(Name and Address of Agent for Service)
Ronald L. Benedict, Second Vice President and Counsel
The Ohio National Life Insurance Company
P.O. Box 237
Cincinnati, Ohio 45201
Notice to:
W. Randolph Thompson, Esq.
Of Counsel
Jones & Blouch L.L.P.
Suite 405 West
1025 Thomas Jefferson Street, N.W.
Washington, D.C. 20007
Approximate Date of Proposed Public Offering: As soon after the effective date
of this amendment as is practicable.
Registrant is registering an indefinite amount of securites under the Securities
Act of 1933 pursuant to Rule 24f-2. Registrant has previously made its election
under Rule 24f-2. No fee is due for this registration of additional securities.
It is proposed that this filing will become effective (check appropriate space):
___ immediately upon filing pursuant to paragraph (b)
___ on (date) pursuant to paragraph (b)
___ 60 days after filing pursuant to paragraph (a)(i)
___ on (date) pursuant to paragraph (a)(i)
___ 75 days after filing pursuant to paragraph (a)(ii)
___ on (date) pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE> 2
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
OHIO NATIONAL VARIABLE ACCOUNT A
<TABLE>
<CAPTION>
N-4 Item Caption in Prospectus
- --------- ---------------------
<S> <C>
1 Cover Page
2 Glossary of Special Terms
3 Not applicable
4 Accumulation Unit Values
5 The Ohio National Companies
6 Deductions and Expenses
7 Description of Variable Annuity Contracts
8 Annuity Period
9 Death Benefit
10 Accumulation Period
11 Surrender and Partial Withdrawal
12 Federal Tax Status
13 Not applicable
14 Table of Contents
Caption in Statement of Additional Information
----------------------------------------------
15 Cover Page
16 Table of Contents
17 Not applicable
18 Custodian
Independent Certified Public Accountants
19 See Prospectus (Distribution of Variable Annuity Contracts)
Loans Under Tax-Sheltered Annuities
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
20 Underwriter
21 Calculation of Money Market Subaccount Yield
Total Return
22 See Prospectus (Annuity Period)
23 Financial Statements
Caption in Part C
-----------------
24 Financial Statements and Exhibits
25 Directors and Officers of the Depositor
26 Persons Controlled by or Under Common Control with the Depositor or
Registrant
27 Number of Contractowners
28 Indemnification
29 Principal Underwriter
30 Location of Accounts and Records
31 Not applicable
32 Not applicable
</TABLE>
<PAGE> 4
PART A
PROSPECTUS
<PAGE> 5
PROSPECTUS
FLEXIBLE PURCHASE PAYMENT
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OHIO NATIONAL VARIABLE ACCOUNT A
THE OHIO NATIONAL LIFE INSURANCE COMPANY
ONE FINANCIAL WAY
CINCINNATI, OHIO 45242
TELEPHONE (513) 794-6452
This prospectus offers a multiple funded, flexible purchase payment, individual
variable annuity contract that provides for the accumulation of values and the
payment of annuity benefits on a variable and/or fixed basis. Unless
specifically stated otherwise, only provisions relating to the variable portion
of the contracts are described in this prospectus. The fixed portion
("Guaranteed Accumulation Account") is briefly described in an appendix to the
Statement of Additional Information.
Variable annuities are designed to provide lifetime annuity payments which will
vary with the investment results of the investment vehicle chosen. The
accumulation value of a contract will vary with the investment performance of
Ohio National Fund, Inc. (the "Fund") or of other eligible investment companies
("Other Funds"), prior to the annuity payout date, and the amount of each
annuity payment will vary with the investment performance of the Fund or Other
Fund subsequent to the commencement of annuity payments. There can be no
assurance that the value of a contract during the years prior to the annuity
payout date or the aggregate amount of annuity payments received after such date
will equal or exceed the purchase payments made therefor.
The variable annuity contracts offered by this prospectus are designed for (1)
annuity purchase plans adopted by public school systems and certain tax-exempt
organizations described in Section 501(c)(3) of the Internal Revenue Code (the
"Code"), qualifying for tax-deferred treatment pursuant to Section 403(b) of the
Code, (2) other employee pension or profit-sharing trusts or plans qualifying
for tax-deferred treatment under Section 401(a), 401(k) or 403(a) of the Code,
(3) individual retirement annuities qualifying for tax-deferred treatment under
Section 408 of the Code, (4) state and municipal deferred compensation plans and
(5) non-tax-qualified retirement plans.
The minimum purchase payment is $100. Payments after the first payment may be
made at any time. Generally the maximum purchase payment is $100,000 per year.
Purchase payments are allocated to one or more subaccounts of Ohio National
Variable Account A ("VAA") as directed by the contract owner. VAA is a separate
account established by The Ohio National Life Insurance Company ("Ohio National
Life"). The assets of VAA are invested in shares of the Fund, a mutual fund
having 13 portfolios in which the contracts' assets may be invested: Equity
Portfolio, Money Market Portfolio, Bond Portfolio, Omni Portfolio, International
Portfolio, Capital Appreciation Portfolio, Small Cap Portfolio, Global
Contrarian Portfolio, Aggressive Growth Portfolio, Core Growth Portfolio, Growth
& Income Portfolio, S&P 500 Index Portfolio and Social Awareness Portfolio.
Other Funds in which contract assets may be invested are (a) the Emerging
Markets Fund of the Montgomery Variable Series and (b) the High Income
Portfolio, Equity - Income Portfolio and Growth Portfolio of the Variable
Insurance Products Fund. (See the accompanying prospectuses of the Fund and of
the Other Funds which also contain information about other portfolios that are
not available for the contracts offered herein.)
All or part of the contract's accumulation value may be withdrawn before the
annuity payout date. Amounts withdrawn may be subject to federal income tax
penalties. A contingent deferred sales charge up to 7% of the amount withdrawn
may be assessed. After the first year, up to 10% of the accumulation value may
be withdrawn each year without this charge. Exercise of contract rights may be
subject to the terms of any qualified employee trust or annuity plan under which
a contract is purchased. This prospectus contains no information concerning such
trusts or plans.
The contracts offered hereby may be revoked by the purchaser without penalty
within 20 days of their delivery.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. IT SETS FORTH THE
INFORMATION ABOUT VAA AND THE VARIABLE ANNUITY CONTRACTS OFFERED BY THIS
PROSPECTUS THAT YOU SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
VAA HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN A STATEMENT OF
ADDITIONAL INFORMATION DATED ________. 19 ___ THE STATEMENT OF ADDITIONAL
INFORMATION IS INCORPORATED HEREIN BY REFERENCE AND IS AVAILABLE UPON REQUEST
AND WITHOUT CHARGE BY WRITING OR CALLING OHIO NATIONAL LIFE AT THE ABOVE
ADDRESS. THE TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION IS ON
PAGE 2.
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.
THIS PROSPECTUS SHOULD BE ACCOMPANIED BY THE CURRENT PROSPECTUS OF OHIO NATIONAL
FUND, INC.
__________ , 19 __
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Fee Table..................................................3
Financial Statements..................................4
The Ohio National Financial Services Group ................5
Ohio National Life....................................5
Ohio National Variable Account A .....................5
Ohio National Fund, Inc...............................5
Other Funds...........................................5
Distribution of Variable Annuity Contracts ................6
Deductions and Expenses....................................7
Contingent Deferred Sales Charge .....................7
Contract Administration Charge........................7
Deduction For Administrative Expenses ................7
Deduction For Risk Undertakings.......................8
Transfer Fee..........................................8
Deduction For State Premium Tax.......................8
Fund Expenses.........................................8
Description of Variable Annuity Contracts .................8
20-Day Free Look......................................8
Accumulation Period...................................9
Annuity Period.......................................12
Contract Owner Inquiries.............................15
Performance Data.....................................15
Federal Tax Status........................................15
IRA Disclosure Statement..................................19
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION
Custodian
Independent Certified Public Accountants
Underwriter
Calculation of Money Market Subaccount Yield
Total Return
Transfer Limitations
Financial Statements for VAA and Ohio National Life
Appendix: Loans Under Tax-Sheltered Annuities
Guaranteed Accumulation Account
GLOSSARY OF SPECIAL TERMS
ACCUMULATION PERIOD - The period prior to the annuity payout date and during the
lifetime of the annuitant.
ACCUMULATION UNIT - A unit of measure used to determine the value of contracts
during the accumulation period.
ACCUMULATION VALUE - The cash value of an annuity contract before the annuity
payout date.
ANNUITANT - Any natural person who is to receive or is receiving annuity
payments and upon whose continuation of life annuity payments with life
contingencies depend.
ANNUITY PAYOUT DATE - The date on which annuity payments are to begin.
ANNUITY PAYMENTS - Periodic payments made to an annuitant pursuant to an annuity
contract.
ANNUITY UNIT - A unit of measure used to determine the second and subsequent
variable annuity payments and reflecting the investment performance of the Fund.
FUND - Ohio National Fund, Inc.
FUND SHARES - Shares of the Fund or of any Other Fund.
OTHER FUND - Any registered open-end investment company in which contract assets
may be invested other than the Fund.
OWNER - During the lifetime of the designated annuitant and prior to the
specified annuity payout date, the owner is the person in whose name the
contract is registered. On and after the annuity payout date the annuitant
becomes the owner. After the death of the annuitant, the beneficiary becomes the
owner.
PURCHASE PAYMENTS - The amount of payments made by the owner or on his behalf
under the annuity contract.
SETTLEMENT - The application of the accumulation value of an annuity contract
under the settlement provisions contained therein.
SUBACCOUNT - The Equity subaccount, Money Market subaccount, Bond subaccount,
Omni subaccount, International subaccount, Capital Appreciation subaccount,
Small Cap subaccount, Global Contrarian subaccount, Aggressive Growth
subaccount, Core Growth subaccount, Growth & Income subaccount, S&P 500 Index
subaccount, Social Awareness subaccount, Emerging Markets subaccount, High
Income subaccount, Equity - Income subaccount, Growth subaccount, or any other
subaccounts established under VAA.
VALUATION PERIOD - The period of time from one determination of accumulation
unit and annuity unit values to their next determination. Such determination is
made at the same time that the net asset value of Fund Shares is determined. See
page 19 of the accompanying Fund prospectus, page 10 of the Emerging Markets
Fund prospectus and page 27 of the Variable Insurance Products Fund prospectus.
1940 ACT - The Investment Company Act of 1940, as amended, or any similar
successor federal legislation.
2
<PAGE> 7
FEE TABLE
<TABLE>
<CAPTION>
CONTRACTOWNER TRANSACTION EXPENSES
Deferred Sales Load (as a percentage of YEARS PAYMENT
----- -------
<S> <C> <C>
value withdrawn; the 1st 7%
percentage varies with 2nd 7%
number of years from 3rd 6%
purchase payments to 4th 5%
which values relate) 5th 4%
6th 2%
7th 1%
8th and later 0%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Exchange (transfer) Fee $3 (currently no charge for the first 4 transfers per year)
Annual Contract Fee $35 (no fee if contract value exceeds $50,000)
</TABLE>
<TABLE>
<CAPTION>
VAA ANNUAL EXPENSES (as a percentage
of average account value)
<S> <C>
Mortality and Expense Risk Fees 1.05%
Account Fees and Expenses 0.25%
-----
Total VAA Annual Expenses 1.30%
</TABLE>
<TABLE>
<CAPTION>
FUND ANNUAL EXPENSES (as a percentage
of the Fund's average net assets) MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
<S> <C> <C> <C>
Equity 0.54% 0.19% 0.73%
Money Market* 0.25% 0.19% 0.44%
Bond 0.60% 0.15% 0.75%
Omni 0.57% 0.18% 0.75%
International 0.90% 0.22% 1.12%
Capital Appreciation 0.80% 0.16% 0.96%
Small Cap 0.80% 0.16% 0.96%
Global Contrarian 0.90% 0.68% 1.58%
Aggressive Growth 0.80% 0.22% 1.02%
Core Growth** 0.95% 0.60% 1.55%
Growth & Income** 0.85% 0.55% 1.40%
S&P 500 Index** 0.40% 0.20% 0.60%
Social Awareness** 0.60% 0.25% 0.85%
Emerging Markets** 1.25% 0.50% 1.75%
High Income 0.60% 0.11% 0.71%
Equity- Income 0.51% 0.10% 0.61%
Growth 0.61% 0.09% 0.70%
</TABLE>
EXAMPLE - If you surrendered your contract at the end of the applicable time
period, you would pay the following aggregate expenses on a $1,000 investment in
each subaccount, assuming 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $94 $128 $160 $254
Money Market* 92 119 146 224
Bond 95 128 161 256
Omni 95 128 161 256
International 98 139 179 293
Capital Appreciation 97 134 171 278
Small Cap 97 134 171 278
Global Contrarian 102 152 200 337
Aggressive Growth 97 136 174 284
Core Growth** 102 151 N/A N/A
Growth & Income** 101 147 N/A N/A
</TABLE>
3
<PAGE> 8
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
S&P 500 Index** $ 93 $ 124 N/A N/A
Social Awareness** 95 131 N/A N/A
Emerging Markets** 104 156 N/A N/A
High Income 94 127 159 252
Equity - Income 93 124 154 242
Growth 94 127 158 251
</TABLE>
EXAMPLE - If you do not surrender your contract or you annuitize at the end of
the applicable time period, you would pay the following aggregate expenses on
the same investment:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $ 22 $ 69 $ 118 $ 254
Money Market* 20 60 104 224
Bond 23 70 119 256
Omni 23 70 119 256
International 26 81 138 293
Capital Appreciation 25 76 130 278
Small Cap 25 76 130 278
Global Contrarian 31 95 161 337
Aggressive Growth 25 78 133 284
Core Growth** 31 94 N/A N/A
Growth & Income** 29 89 N/A N/A
S&P 500 Index** 21 65 N/A N/A
Social Awareness** 24 73 N/A N/A
Emerging Markets** 33 100 N/A N/A
High Income 22 69 117 252
Equity - Income 21 65 112 242
Growth 22 68 117 251
</TABLE>
The purpose of the above table is to help you to understand the costs and
expenses that a variable annuity contractowner will bear directly or indirectly.
THE EXAMPLE INCLUDED IN THE ABOVE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSE, AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. Note that the expense amounts shown in the example are
aggregate amounts for the total number of years indicated. In the example, the
annual fee is treated as if it were deducted as a percentage of assets, based
upon the average account value for all contracts, including ones from which a
portion of the contract fee may be paid from amounts invested in the general
account. Neither the table nor the example reflect any premium taxes that may be
applicable to a contract, which currently range from 0% to 2.25%. The above
table and example reflect only the charges for contracts currently offered by
this prospectus and not other contracts that may be offered by Ohio National
Life. For further details, see DEDUCTIONS AND EXPENSES, page 7.
*For the Money Market Portfolio, management fees in excess of 0.25% are
presently being waived by the Fund's investment adviser. Without the waiver, the
Money Market Portfolio's Management Fee would be 0.30%, its Total Fund Annual
Expenses would be 0.49%, and its expenses would total $92 for a $1,000 contract
surrendered at the end of 1 year, $121 if surrendered at the end of 3 years,
$148 if surrendered at the end of 5 years or $230 if surrendered at the end of
10 years. For a $1,000 contract annualized or not surrendered, the expenses
without the waiver would be $20 for 1 year, $62 for 3 years, $106 for 5 years or
$230 for 10 years.
**The "Other Expenses" (and, accordingly, the Total Fund Expenses) for the Core
Growth, Growth & Income, S&P 500 Index, Social Awareness and Emerging
Markets Portfolios are based on estimates.
FINANCIAL STATEMENTS
The complete financial statements of VAA and Ohio National Life, and the
Independent Auditors' Reports thereon, may be found in the Statement of
Additional Information.
4
<PAGE> 9
THE OHIO NATIONAL FINANCIAL SERVICES GROUP
OHIO NATIONAL LIFE
Ohio National Life was organized under the laws of Ohio in 1909 as a stock life
insurance company and became a mutual life insurance company in 1959. It writes
life, accident and health insurance and annuities in 47 states, the District of
Columbia and Puerto Rico. Currently it has assets in excess of $5.9 billion and
equity in excess of $500 million. Its home office is located at One Financial
Way, Cincinnati, Ohio 45242.
OHIO NATIONAL VARIABLE ACCOUNT A
VAA was established in 1969 by Ohio National Life as a separate account under
Ohio law for the purpose of funding variable annuity contracts. Purchase
payments for the variable annuity contracts are allocated to one or more
subaccounts of VAA. Income, gains and losses, whether or not realized, from
assets allocated to VAA are, as provided in the contracts, credited to or
charged against VAA without regard to other income, gains or losses of Ohio
National Life. The assets maintained in VAA will not be charged with any
liabilities arising out of any other business conducted by Ohio National Life.
Nevertheless, all obligations arising under the contracts, including the
commitment to make annuity payments, are general corporate obligations of Ohio
National Life. Accordingly, all of Ohio National Life's assets are available to
meet its obligations under the contracts. VAA is registered as a unit investment
trust under the 1940 Act.
The assets of the subaccounts of VAA are invested at net asset value (without an
initial sales charge) in shares of corresponding portfolios of the Fund: the
Equity Portfolio, Money Market Portfolio, Bond Portfolio, Omni Portfolio (a
flexible portfolio fund), International Portfolio, Capital Appreciation
Portfolio, Small Cap Portfolio, Global Contrarian Portfolio, Aggressive Growth
Portfolio, Core Growth Portfolio, Growth & Income Portfolio, or Social Awareness
Portfolio; assets of the Emerging Markets subaccount are invested in shares of
the Emerging Markets Fund; assets of the High Income subaccount, Equity - Income
subaccount and Growth subaccount are invested in corresponding Portfolios of the
Variable Insurance Products Fund.
OHIO NATIONAL FUND, INC.
The Fund is a diversified, open-end, management investment company registered
under the 1940 Act. The value of the Fund's investments fluctuates daily and is
subject to the risk of changing economic conditions as well as the risk inherent
in the ability of management to anticipate changes necessary in such investments
to meet changes in economic conditions. The Fund receives investment advice, for
a fee, from its investment adviser, Ohio National Investments, Inc., and from
Societe Generale Asset Management Corp. (sub-adviser to the International and
Global Contrarian Portfolios), T. Rowe Price Associates, Inc. (sub-adviser to
the Capital Appreciation Portfolio), Founders Asset Management, Inc.
(sub-adviser to the Small Cap Portfolio), Strong Capital Management, Inc.
(sub-adviser to the Aggressive Growth Portfolio), Pilgrim Baxter & Associates,
Ltd. (subadviser to the Core Growth Portfolio) and Robertson Stephens Investment
Management, L.P. (subadviser to the Growth & Income Portfolio). For additional
information concerning the Fund, including the investment objectives of each of
its portfolios, see the attached Fund prospectus. Read the Fund prospectus
carefully before investing. The Fund prospectus contains information about other
portfolios that are not available for the contract offered herein.
5
<PAGE> 10
OTHER FUNDS
The Other Funds are presently the Emerging Markets Fund and the High Income,
Equity-Income and Growth Portfolios. The Emerging Markets Fund is a series of
the Montgomery Funds III and is managed, for a fee, by Montgomery Asset
Management, L.P. The High Income, Equity-Income and Growth Portfolios are series
of the Variable Insurance Products Fund and are managed, for a fee, by Fidelity
Management & Research Company. The Montgomery Fund III and the Variable
Insurance Products Fund are registered, open-end, investment companies the
shares of which are sold only to insurance company separate accounts to fund
variable annuity contracts and variable life insurance policies. The value of
investments in the Other Funds fluctuates daily and is subject to the risk of
changing economic conditions as well as the risk inherent in the ability of
management to anticipate changes necessary in those investments to meet changes
in economic conditions. For additional information concerning the Other Funds,
including their investment objectives, see their accompanying prospectuses. Read
the prospectuses carefully before investing. (They contain information about
additional funds that are not available for the contract offered herein.)
MIXED AND SHARED FUNDING
In addition to being offered to VAA, shares of the Fund are currently offered to
other separate accounts of Ohio National Life in connection with variable
annuity contracts and a separate account of Ohio National Life Assurance
Corporation in connection with variable life insurance contracts. In the future,
shares of the Fund may be offered to other insurance company separate accounts.
Shares of the Other Funds are presently offered to variable annuity and variable
life insurance separate accounts of other unaffiliated life insurance companies.
It is conceivable that in the future it may become disadvantageous for both
variable life and variable annuity separate accounts or for separate accounts of
other life insurance companies to invest in Fund Shares. Although neither Ohio
National Life nor the Fund currently foresees any such disadvantage, the Board
of Directors of the Fund and of each Other Fund will monitor events in order to
identify any material conflict between different types of contractowners and to
determine what action, if any, should be taken in response thereto, including
the possible withdrawal of VAA`s participation in the Fund or an Other Fund.
Material conflicts could result from such things as (1) changes in state
insurance law; (2) changes in federal income tax law; (3) changes in the
investment management of any portfolio of the Fund or of an Other Fund; or (4)
differences between voting instructions given by different types of
contractowners.
VOTING RIGHTS
Ohio National Life shall vote Fund Shares held in VAA at meetings of
shareholders of the Fund or of any Other Fund in accordance with voting
instructions received from contract owners. The number of Fund Shares for which
an owner is entitled to give instructions will be determined by Ohio National
Life in the manner described below, not more than 90 days prior to the meeting
of shareholders. Proxy material will be distributed to each owner together with
appropriate forms for giving voting instructions. Fund Shares held in VAA, for
which no timely instructions are received, will be voted by Ohio National Life
in proportion to the instructions which are received with respect to all
contracts participating in VAA.
During the accumulation period, the number of Fund Shares for which instructions
may be given to Ohio National Life is determined by dividing the variable
accumulation value of a subaccount of the contract by the net asset value of a
share of the corresponding portfolio of the Fund or Other Fund as of the same
date. During the annuity payment period, the number of Fund Shares for which
such instructions may be given is determined by dividing the actuarial liability
for variable annuities in the course of payment by the net asset value of a Fund
Share as of the same date. Generally, the number of votes tends to decrease as
annuity payments progress.
6
<PAGE> 11
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The variable annuity contracts are sold by Ohio National Life insurance agents
who are also registered representatives of (a) The O.N. Equity Sales Company
("ONESCO"), a wholly-owned subsidiary of Ohio National Life, or (b) other
broker-dealers that have entered into distribution agreements with the principal
underwriter of the contracts. Each of ONESCO and the other broker-dealers is
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. At the date of this prospectus,
ONESCO was the principal underwriter of the contracts. However, pending receipt
of necessary regulatory approvals, Ohio National Equities, Inc., a new
wholly-owned subsidiary of Ohio National Life, will become the principal
underwriter. As compensation for their sales efforts, ONESCO and the other
broker-dealers will receive a fee from Ohio National Life equal to 6% of
purchase payments. ONESCO and the other broker-dealers will remunerate their
registered representatives from their own funds. Purchase payments on which no
compensation is paid to registered representatives will not be included in
amounts on which the 6% sales compensation will be paid to ONESCO and the other
broker-dealers. To the extent that the amount of the contingent deferred sales
charge received by Ohio National Life is not sufficient to recover the fee paid
to ONESCO and the other broker-dealers, any deficiency will be made up from Ohio
National Life's general account assets which include, among other things, any
profit from the mortality and expense risk charges.
DEDUCTIONS AND EXPENSES
CONTINGENT DEFERRED SALES CHARGE
No deduction for sales expense is made from purchase payments. A contingent
deferred sales charge may be assessed by Ohio National Life when a contract is
surrendered or a partial withdrawal of accumulation value is made before the
annuity payout date to defray expenses relating to the sale of the contract,
including compensation to sales personnel, cost of sales literature and
prospectuses, and other expenses related to sales activity. The charge equals a
percentage of the accumulation value withdrawn. This percentage will vary with
the number of years from the date the purchase payments were made (starting with
the first purchase payment) as follows:
<TABLE>
<CAPTION>
YEARS PAYMENT
<S> <C> <C>
1st 7%
2nd 7%
3rd 6%
4th 5%
5th 4%
6th 2%
7th 1%
8th and later 0%
</TABLE>
On or after the first contract anniversary, partial withdrawals of not more than
10% of the accumulation value (as of the last day of the prior contract year)
may be made without the imposition of the contingent deferred sales charge.
CONTRACT ADMINISTRATION CHARGE
Each year on the contract anniversary (or at the time of surrender of the
contract), Ohio National Life will deduct a contract administration charge of
$35 from the accumulation value to reimburse it for the expenses relating to the
maintenance of the contract. This charge is not designed to produce a profit and
Ohio National Life does not expect to recover from the charge any amount in
excess of accumulated administrative expenses. There is no contract
administration charge (a) for contracts having a value of at least $50,000 on
the contract anniversary or (b) after the annuity payout date. Ohio National
Life guarantees not to change the contract administration charge.
7
<PAGE> 12
DEDUCTION FOR ADMINISTRATIVE EXPENSES
A deduction is made at the end of each valuation period equal to 0.25% on an
annual basis of the contract value for administrative expenses. This deduction
is not designed to produce a profit but to reimburse Ohio National Life for
expenses incurred for accounting, auditing, legal, contract owner services,
reports to regulatory authorities and contract owners, contract issue, etc., not
covered by the contract administration charge.
DEDUCTION FOR RISK UNDERTAKINGS
Prior to the annuity payout date, Ohio National Life guarantees that the
accumulation value of all contracts will not be affected by any excess of sales
and administrative expenses over the deductions provided therefor. Ohio National
Life also guarantees to pay a death benefit in the event of the annuitant's
death prior to the annuity payout date (see Death Benefit, page 11). After the
annuity payout date, Ohio National Life guarantees that variable annuity
payments will not be affected by adverse mortality experience or expenses.
For assuming these risks, Ohio National Life, in determining the accumulation
unit values and the annuity unit values for each subaccount, makes a deduction
from the applicable investment results equal to 1.05% of the contract value on
an annual basis. That deduction may be decreased by Ohio National Life at any
time and may be increased not more frequently then annually to not more than
1.55% on an annual basis. Although Ohio National Life views the risk charge as
an indivisible whole, of the amount currently being deducted, it has estimated
that a reasonable allocation would be 0.55% for mortality risk, and 0.50% for
expense risk. Although Ohio National Life hopes to realize a profit from this
charge, if the deduction is insufficient to cover the actual risk involved, the
loss will fall on Ohio National Life; conversely, if the deduction proves more
than sufficient, the excess will be a gain to Ohio National Life.
TRANSFER FEE
A transfer fee of $3 (which may be increased to $15) is made for each transfer
from one subaccount to another. The fee is charged against the subaccount from
which the transfer is effected. No fee is charged for the first four transfers
each year.
DEDUCTION FOR STATE PREMIUM TAX
Most states do not presently charge a premium tax for these contracts. Where a
tax applies, the rates for tax-qualified contracts are presently 0.5% in
California, 1.0% in Puerto Rico and West Virginia, 2.0% in Kentucky and 2.25% in
the District of Columbia. For non-tax-qualified contracts, the rates are
presently 1.0% in Puerto Rico, West Virginia and Wyoming, 1.25% in the South
Dakota, 2.0% in Kansas, Kentucky and Maine, 2.25% in the District of Columbia,
2.35% in California and 3.5% in Nevada. Normally, any such applicable taxes will
not be deducted until annuity payments begin. However, in Kansas, South Dakota
and Wyoming, they are presently being deducted from purchase payments.
FUND EXPENSES
There are deductions from, and expenses paid out of, the assets of the Fund and
of any Other Fund. These are described in the accompanying prospectuses of the
Fund and of the Other Funds.
DESCRIPTION OF VARIABLE ANNUITY CONTRACTS
20-DAY FREE LOOK
The contract owner may revoke the contract at any time until the end of 20 days
after receipt of the contract and receive a refund of the entire purchase price.
To revoke, the owner must return the contract to Ohio National Life within the
20 day period. In those states where required by state law, the value of the
contract as of the date of cancellation will be returned in lieu of the entire
purchase price in case of revocation during the 20 day free look period.
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ACCUMULATION PERIOD
PURCHASE PAYMENT PROVISIONS
The contracts provide for minimum purchase payments of $100 per payment and
maximum payments of $100,000 per year. Ohio National Life may permit larger
payments in its discretion. Subject to these limits, payments may be made at any
time. Failure to make payments shall not constitute a default, but could result
in involuntary termination (see Ohio National Life's Right to Terminate, page
9).
ACCUMULATION UNITS
Prior to the annuity payout date, the contract value is measured by accumulation
units. Each purchase payment results in the crediting of accumulation units to
the contract (see Crediting Accumulation Units, page 9). The number of
accumulation units so credited remains constant but the dollar value of
accumulation units will vary depending upon the investment results of the
particular subaccount to which payments are allocated.
CREDITING ACCUMULATION UNITS
Completed application forms, together with a check for the first purchase
payment, are forwarded to the home office of Ohio National Life for acceptance.
Upon acceptance, a contract is issued to the contract owner, and the first
purchase payment is then credited to the contract in the form of accumulation
units. Initial purchase payments are credited not later than two business days
after receipt if the application and all information necessary for processing
the purchase payment are complete. If an application is not accepted within five
business days, the purchase payment will be returned immediately to the
applicant unless the applicant specifically consents to having Ohio National
Life retain the purchase payment until the application is completed. After that,
the purchase payment will be credited within two business days. Subsequent
purchase payments are sent directly to the home office of Ohio National Life and
are applied to provide that number of accumulation units (for each subaccount)
determined by dividing the amount of the purchase payment by the value of the
appropriate accumulation unit next computed after the payment is received at the
home office of Ohio National Life.
ALLOCATION OF PURCHASE PAYMENTS
In the contract application, you may direct the allocation of your purchase
payments among the subaccounts of VAA and the general account of Ohio National
Life. The amount allocated to any subaccount or the general account must equal a
whole percentage. The allocation of future purchase payments may be changed at
any time upon written notice to the home office of Ohio National Life.
ACCUMULATION UNIT VALUE AND ACCUMULATION VALUE
The accumulation unit value of each subaccount of VAA was set at $10 when the
first payment for these contracts was allocated to each subaccount. The
accumulation unit value for any subsequent valuation period is determined by
multiplying the accumulation unit value for the immediately preceding valuation
period by the net investment factor (described below) for such subsequent
valuation period. The accumulation value is determined by multiplying the total
number of accumulation units (for each subaccount) credited to the contract by
the accumulation unit value (for such subaccount) for the valuation period for
which the accumulation value is being determined.
NET INVESTMENT FACTOR
The net investment factor is a quantitative measure of the investment results of
each subaccount of VAA. The net investment factor for each subaccount for any
valuation period is determined by dividing (a) by (b), then subtracting (c) from
the result, where:
(a) is -
(1) the net asset value of the corresponding Fund Share determined as of
the end of a valuation period, plus
(2) The per share amount of any dividends or other distributions declared
for that portfolio by the Fund or an Other Fund if the "ex-dividend"
date occurs during the valuation period, plus or minus
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(3) per share charge or credit for any taxes paid or reserved for which is
determined by Ohio National Life to result from the maintenance or
operation of that subaccount of VAA; (No federal income taxes are
applicable under present law.)
(b) is the net asset value of the corresponding Fund Share determined at the
end of the preceding valuation period; and
(c) is the deduction for administrative and sales expenses and risk
undertakings. (See Deduction for Administrative Expenses, page 7, and,
Deduction for Risk Undertakings, page 7.)
OHIO NATIONAL LIFE'S RIGHT TO TERMINATE
Ohio National Life may, at its option, require surrender of a contract on any
anniversary when the accumulation value is less than $1,000. Such termination
could have adverse tax consequences. (See Federal Tax Status, page 14.) Such
termination will not be made on an individual retirement annuity (IRA) if a
purchase payment has been made during the preceding two years, nor will it be
made on an annuity funding a Section 403(b) salary reduction agreement.
SURRENDER AND PARTIAL WITHDRAWAL
Prior to the annuity payout date, the owner of a contract may surrender (totally
withdraw the value of) his or her contract for its accumulation value or elect a
partial (at least $100) withdrawal therefrom. These transactions may be subject
to the contingent deferred sales charge described on page 7. That charge is a
percentage of the total amount withdrawn. For example, if a partial withdrawal
of $100 is requested during the first two years after the first purchase payment
for which there are contract values, Ohio National Life would pay you $100, but
the total amount deducted from the accumulation value would be $107.53 (i.e.,
$107.53 x 7% = $7.53). Unless otherwise specified, the withdrawal will be made
pro-rata from the values of each subaccount. The amount available for withdrawal
is the sum of the subaccount values less the contingent deferred sales charge,
if any. In the case of a complete surrender, the amount payable is also reduced
by the amount of the contract administration charge. Payment by Ohio National
Life shall be made within seven days from the date of receipt of the request for
such payment except as it may be deferred under the circumstances described
below. Surrenders and partial withdrawals are limited or not permitted in
connection with certain retirement plans. See Tax Deferred Annuities, page 16.
For tax consequences of a surrender or withdrawal, see Federal Tax Status, page
14.
Occasionally Ohio National Life may receive a request for a surrender or partial
withdrawal which includes contract values derived from purchase payments which
have not cleared the banking system. Ohio National Life may delay mailing that
portion which relates to such payments until the check for the purchase payment
has cleared. Ohio National Life requires the return of the contract in the case
of a complete surrender.
The right to withdraw may be suspended or the date of payment postponed (1) for
any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or during which trading on the Exchange,
as determined by the Securities and Exchange Commission, is restricted; (2) for
any period during which an emergency, as determined by the Commission, exists as
a result of which disposal of securities held in the Fund or Other Fund is not
reasonably practical, or it is not reasonably practical to determine the value
of the Fund's or Other Fund's net assets; or (3) or such other periods as the
Commission may by order permit for the protection of security holders.
TRANSFERS AMONG SUBACCOUNTS
Contract values may be transferred from one subaccount to another upon the
request of the owner. Transfers may be made at any time during the accumulation
period. The amount of any such transfer must be at least $300 (or the entire
value of the contract's interest in a subaccount, if less). Ohio National Life
reserves the right to limit the number, frequency, method or amount of
transfers. Transfers from any portfolio of the Fund or Other Fund on any one day
may be limited to 1% of the previous day's total net assets of that portfolio if
Ohio National Life or the Fund or Other Fund in its or their discretion,
believes that the portfolio might otherwise be damaged. If and when transfers
must be so limited, some transfer requests will not be made. In determining
which requests will be made, scheduled transfers (pursuant to a pre-existing DCA
program) will be made first, followed by mailed written requests in the order
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postmarked and, lastly, telephone and facsimile requests in the order received.
Contract owners whose transfer requests are not made will be so notified.
Current SEC rules preclude us from processing at a later date those requests
that were not made. Accordingly, a new transfer request would have to be
submitted in order to make a transfer that was not made because of these
limitations. After the annuity payout date, transfers among subaccounts can only
be made once each calendar quarter. Such transfers may then be made without a
transfer fee. (See Transfer Fee, page 8, and Transfers After Annuity Payout
Date, page 13).
SCHEDULED TRANSFERS (DOLLAR COST AVERAGING)
Ohio National Life administers a scheduled transfer ("DCA") program enabling you
to preauthorize automatic monthly or quarterly transfers of a specified dollar
amount (a) from any variable subaccount(s) to any other subaccount(s), including
the Guaranteed Accumulation Account, or (b) if established at the time the
contract is issued and limited to values attributed to the initial purchase
payment, from the Guaranteed Accumulation Account to any other subaccount(s).
Each DCA transfer must be at least $500 and at least 12 DCA transfers must be
scheduled. No transfer fee is charged for DCA transfers. Ohio National Life may
discontinue the DCA program at any time. You may also discontinue further DCA
transfers by giving Ohio National Life written notice at least 7 business days
before the next scheduled transfer.
DCA generally has the effect of reducing the risk of purchasing at the top, and
selling at the bottom, of market cycles. DCA transfers from a fund with a
stabilized net asset value, such as the Money Market subaccount, will generally
reduce the average total cost of indirectly purchasing Fund Shares because
greater numbers of shares will be purchased when the share prices are lower than
when prices are higher. However, DCA does not assure you of a profit, nor does
it protect against losses in a declining market. Moreover, for transfers from a
subaccount not having a stabilized net asset value, DCA will have the effect of
reducing the average price of the shares being redeemed. DCA might also be used
to systematically transfer accumulation values from variable subaccounts to the
General Accumulation Account, in anticipation of retirement, in order to reduce
the risk of making a single transfer during a low market.
TELEPHONE TRANSFERS
If the contract owner first submits a pre-authorization form to Ohio National
Life, transfers may be made by telephoning Ohio National Life at 1-800-635-3225.
Ohio National Life will honor pre-authorized telephone transfer instructions
from anyone who is able to provide the personal identifying information
requested, but reserves the right to refuse to honor any such request if that
seems prudent. Ohio National Life will use reasonable procedures to confirm that
telephone instructions are genuine. (Otherwise, Ohio National Life may be liable
for any losses due to unauthorized or fraudulent instructions.) A written
confirmation will be sent following each telephone transfer.
DEATH BENEFIT
In the event of the death of the annuitant prior to the annuity payout date, the
contract provides a death benefit to be paid to a designated beneficiary. The
amount of the death benefit will be determined as of the date of the annuitant's
death. It will be paid in a single sum into an interest-bearing checking account
established in the beneficiary's name with Bank One, Springfield, Illinois,
unless the owner or beneficiary elects settlement under one or more of the
settlement options provided in the contract. The checking account will bear
interest based upon then current money market rates. The beneficiary will then
be able to write checks against such amount at any time and in any amount up to
the total in the account. These checks must be for a minimum of $250.
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The death benefit will be the contract value if, (a) on the date of death or (b)
as of any contract anniversary date, the sum of all withdrawals exceeds the
remaining contract value. Otherwise, the death benefit will be the greatest of:
(a) the contract value; or (b) the net of purchase payments less withdrawals; or
(c) the stepped-up death benefit amount if the contract has been in effect for
at least 5 years. For the 5-year period beginning on the fifth contract
anniversary, the stepped-up death benefit will be the greater of (i) the
contract value as of the fifth anniversary or (ii) the net of purchase payments
less withdrawals made on or before the fifth anniversary. At the beginning of
each later 5-year period (until the annuitant attains age 70), the stepped up
death benefit will be the greater of (i) the contract value on that date or (ii)
the death benefit as of the last day of the preceding 5-year period. The
stepped-up death benefit amount is increased by purchase payments and decreased
by withdrawals made during each 5-year period after the fifth anniversary.
OHIO NATIONAL LIFE EMPLOYEE DISCOUNT
Ohio National Life and its affiliated companies offer a credit on the purchase
of contracts by any of their employees, directors or retirees, or their spouse
or the surviving spouse of a deceased retiree, covering any of the foregoing or
any of their minor children, or any of their children ages 18 to 21 who is
either (i) living in the purchaser's household or (ii) a full-time college
student being supported by the purchaser, or any of the purchaser's minor
grandchildren under the Uniform Gifts to Minors Act. This credit is treated as
additional income under the contract. The amount of the credit equals 3.2% of
all purchase payments made in the first contract year and 5.5% of purchase
payments made in the second through sixth contract years. Ohio National Life
credits the Guaranteed Accumulation Account of the employee's contract in the
foregoing amounts at the time of each payment made by the employee.
TEXAS STATE OPTIONAL RETIREMENT PROGRAM
Under the Texas State Optional Retirement Program (the "Program"), purchase
payments may be excluded from the gross income of state employees for federal
tax purposes to the extent that such purchase payments do not exceed the
exclusion allowance provided by the Code. The Attorney General of Texas has
interpreted the Program as prohibiting any participating state employee from
receiving the surrender value of a contract funding benefits under the Program
prior to termination of employment or the state employee's retirement, death or
total disability. Therefore, no surrender or partial withdrawal by a participant
in the Program will be allowed until the first of these events occurs.
ANNUITY PERIOD
ANNUITY PAYOUT DATE
Annuity payments under a contract will begin on the annuity payout date. This
date is selected by the owner at the time the contract is issued and must be at
least 30 days after the contract date. It may be changed from time to time by
the owner so long as the annuity payout date selected is the first day of any
month at least 30 days after the date of such change. The contract restricts the
annuity payout date to not later than the first of the month following the
annuitant's 90th birthday; however, this restriction may be waived by mutual
agreement between Ohio National Life and the owner.
The contracts include Ohio National Life's assurance that annuity payments will
be paid for the lifetime of the annuitant in accordance with the annuity rates
contained in the contract, regardless of actual mortality experience.
Once annuity payments commence, the contract cannot be surrendered for cash
except that, upon the death of the annuitant, the beneficiary shall be entitled
to surrender the contract for the commuted value of any remaining period-
certain payments.
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ANNUITY OPTIONS
The owner may elect one or more of the following annuity options, and may change
such election anytime before the annuity payout date.
Option 1(a): Life Annuity with installment payments for the lifetime of the
annuitant (under this option it is possible for the annuitant to
receive only one payment; this could happen if the annuitant
should die before receiving the second payment; there is no
residual value of the contract after annuitant's death).
Option 1(b): Life Annuity with installment payments guaranteed for five years
and continuing thereafter during the remaining lifetime of the
annuitant.
Option 1(c): Life Annuity with installment payments guaranteed for ten years
and continuing thereafter during the remaining lifetime of the
annuitant.
Option 1(d): Installment Refund Life Annuity with payments guaranteed for a
period certain and continuing thereafter during the remaining
lifetime of the annuitant. The number of period-certain payments
is equal to the amount applied under this option divided by the
amount of the first payment.
Option 2(a): Joint & Survivor Life Annuity with installment payments during
the lifetime of an annuitant and continuing during the lifetime
of a designated contingent annuitant (under this option it is
possible for the annuitant and contingent annuitant to receive
only one payment; this could happen if both were to die before
receiving the second payment).
Option 2(b): Joint & Survivor Life Annuity with installment payments
guaranteed for ten years and continuing thereafter during the
remaining lifetime of the annuitant or a designated contingent
annuitant.
Unless the contract owner directs otherwise, as of the annuity payout date the
contract values will be applied to provide annuity payments pro-rata from each
subaccount in the same proportion as the contract values immediately prior to
the annuity payout date.
If no election is in effect on the annuity payout date, the accumulation value
of the contract will be applied under Option 1(c) (except that certain contracts
might require a Joint and Survivor Annuity pursuant to the Pension Reform Act of
1974, as amended) with the beneficiary as payee for any remaining period-certain
installments payable after the death of the annuitant. Options 2(a) and 2(b) are
available only with the consent of Ohio National Life if the contingent
annuitant is not related to the annuitant.
Other settlement options are available as agreed to by Ohio National Life.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
The first variable annuity payment is determined by applying the accumulation
value for each subaccount in accordance with the settlement option tables
contained in the contract. The rates contained in those tables depend upon the
annuitant's (and any contingent annuitant's) age and sex and the option
selected. Contracts issued to plans sponsored by employers subject to Title VII
of the Civil Rights Act of 1964 or similar state statutes use annuity tables
which do not vary with annuitant's sex. The accumulation value to be applied is
determined at the end of a valuation period (selected by Ohio National Life and
uniformly applied) not more than 10 valuation periods before the annuity payout
date.
If the amount to be applied under an option is less than $5,000, the option
shall not be available and accumulation value shall be paid in a single sum to
the annuitant. If the first periodic payment under any option would be less than
$25, Ohio National Life reserves the right to change the frequency of payments
so that the first such payment is at least $25.
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ANNUITY UNIT AND THE DETERMINATION OF SUBSEQUENT PAYMENTS
Subsequent variable annuity payments will vary to reflect the investment
performance of each applicable subaccount. The amount of each subsequent payment
is determined by annuity units. The number of annuity units for each subaccount
is determined by dividing the dollar amount of the first annuity payment from
each subaccount by the value of the subaccount annuity unit for the same
valuation period used to determine the accumulation value of the contract
applied to provide annuity payments. This number of annuity units remains fixed
during the annuity payment period unless changed as provided below.
The annuity unit value for each subaccount was set at $10 for the valuation
period as of which the first variable annuity payable from each subaccount of
VAA was calculated. The annuity unit value for each subsequent valuation period
equals the annuity unit value for the immediately preceding valuation period
multiplied by the net investment factor (see page 9) for such subsequent
valuation period and by a factor (0.9998925 for a one-day valuation period) to
neutralize the assumed interest rate discussed below.
The dollar amount of each subsequent variable annuity payment is equal to the
fixed number of annuity units for each subaccount multiplied by the value of the
annuity unit for the valuation period.
The annuity rate tables contained in the contracts are based on the Progressive
Annuity Mortality Table with compound interest at the effective rate of 4% per
year. A higher interest assumption would mean a higher initial annuity payment
but a more slowly rising series of subsequent annuity payments if annuity unit
values were increasing (or a more rapidly falling series of subsequent annuity
payments if annuity unit values were decreasing). A lower interest assumption
would have the opposite effect. If the actual net investment rate were equal to
the assumed interest rate, annuity payments would be level.
TRANSFERS AFTER ANNUITY PAYOUT DATE
After annuity payments have been made for at least 12 months, the annuitant can,
once each calendar quarter, change the subaccount(s) on which variable annuity
payments are based. On at least 30 days written notice to Ohio National Life at
its home office, that portion of the periodic variable annuity payment directed
by the annuitant will be changed to reflect the investment results of a
different subaccount. The annuity payment immediately after such change will be
the amount that would have been paid without such change. Subsequent payments
will reflect the new mix of subaccount allocation.
OTHER CONTRACT PROVISIONS
ASSIGNMENT
Any amount payable in settlement of the contracts may not be commuted,
anticipated, assigned or otherwise encumbered, or pledged as loan collateral to
any person other than Ohio National Life. To the extent permitted by law, no
such amounts shall be subject in any way to any legal process to subject them to
payment of any claims against an annuitant before the annuity payout date. A
tax-qualified contract may not, but a non-tax-qualified contract may, be
collaterally assigned before the annuity payout date. Ownership of a
tax-qualified contract may not be transferred except to (1) the annuitant, (2) a
trustee or successor trustee of a pension or profit-sharing trust which is
qualified under Section 401 of the Code, or (3) the employer of the annuitant
provided that the contract after transfer is maintained under the terms of a
retirement plan qualified under Section 403(a) of the Code for the benefit of
the annuitant, or (4) as otherwise permitted by laws and regulations governing
plans for which the contract may be issued. Ownership of a non-tax-qualified
contract may be transferred.
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PERIODIC REPORTS
Ohio National Life will furnish each owner, once each calendar quarter prior to
the annuity payout date, a statement showing the number of accumulation units
credited to the contract by subaccount and the accumulation unit value of each
such unit as of the end of the preceding quarter. In addition, as long as the
contract remains in effect, Ohio National Life will forward any periodic reports
of the Fund or the Other Funds.
SUBSTITUTION FOR FUND SHARES
If investment in the Fund or any Other Fund is no longer possible or in Ohio
National Life's judgment becomes inappropriate to the purposes of the contract,
Ohio National Life may substitute one or more other mutual funds. Substitution
may be made with respect to both existing investments and the investment of
future purchase payments. However, no such substitution will be made without any
necessary approval of the Securities and Exchange Commission. We may also add
other investment portfolios of the Fund or of additional Other Funds as eligible
investments of VAA.
CONTRACT OWNER INQUIRIES
Any questions from contract owners should be directed to Ohio National Life,
Variable Annuity Administration, P.O. Box 2669, Cincinnati, Ohio 45201;
telephone (513) 794-6452.
PERFORMANCE DATA
Ohio National Life may advertise performance data for the various portfolios of
the Fund or Other Funds showing the percentage change in the value of an
accumulation unit based on the performance of the applicable portfolio over a
period of time (usually a calendar year). Such percentage change is determined
by dividing the increase (or decrease) in value for the unit by the accumulation
unit value at the beginning of the period. This percentage figure will reflect
the deduction of any asset-based charges under the contract but will not reflect
the deduction of any applicable contract administration charge or contingent
deferred sales charge. The deduction of any applicable contract administration
charge or contingent deferred sales charge would reduce any percentage increase
or make greater any percentage decrease.
Any such advertising will also include average annual total return figures
calculated as shown in the Statement of Additional Information. The average
annual total return figures will reflect the deduction of applicable contract
administration charges and contingent deferred sales charges as well as
applicable asset-based charges.
Ohio National Life may also distribute sales literature comparing separate
account performance to the Consumer Price Index or to such established market
indexes as the Dow Jones Industrial Average, the Standard & Poor's 500 Stock
Index, IBC's Money Fund Reports, Lehman Brothers Bond Indices, the Morgan
Stanley Europe Australia Far East Index, Morgan Stanley World Index, Russell
2000 Index, or other variable annuity separate accounts.
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FEDERAL TAX STATUS
The following discussion of federal income tax treatment of amounts received
under a variable annuity contract is not exhaustive, does not purport to cover
all situations, and is not intended as tax advice. A qualified tax adviser
should always be consulted with regard to the application of law to individual
circumstances. Tax laws can change, even with respect to contracts that have
already been issued. Tax law revisions, with unfavorable consequences to
contracts offered by this prospectus, could have retroactive effect on
previously issued contracts or on subsequent voluntary transactions in
previously issued contracts.
Ohio National Life is taxed as a life insurance company under Subchapter L of
the Internal Revenue Code (the "Code"). Since the operations of VAA are a part
of, and are taxed with, the operations of Ohio National Life, VAA is not
separately taxed as a "regulated investment company" under Subchapter M of the
Code.
As to tax-qualified contracts, no federal income tax is payable under present
law on dividend income or capital gains distributions from Fund Shares held in
VAA or upon capital gains realized by VAA on redemption of Fund Shares. When a
non-tax-qualified contract is issued in connection with a deferred compensation
plan or arrangement, all rights, discretions and powers relative to the contract
are vested in the employer and you must look only to your employer for the
payment of deferred compensation benefits. Generally, in that case, an annuitant
will have no "investment in the contract" and amounts received by you from your
employer under a deferred compensation arrangement will be taxable in full as
ordinary income in the year of receipt.
The contracts described in this prospectus are considered annuity contracts
under Section 72 of the Code, which generally provides for taxation of
annuities. Under existing provisions of the Code, any increase in the
accumulation value of the contract is not taxable to you as the owner or
annuitant until you receive it, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution (provided
that the owner of a non-tax qualified contract must be a natural person for this
purpose). With certain exceptions, where the owner of a non-tax qualified
contract is a non-natural person (corporation, partnership or trust) any
increase in the accumulation value of the contract attributable to purchase
payments made after February 28, 1986 will be treated as ordinary income
received or accrued by the owner during the current tax year.
When annuity payments commence under the contract each payment is taxable under
Section 72 of the Code as ordinary income in the year of receipt if the
annuitant has neither paid any portion of the purchase payments for the contract
nor has previously been taxed on any portion of the purchase payments. If any
portion of the purchase payments has been paid from or included in your taxable
income, this aggregate amount will be considered your "investment in the
contract." You will be entitled to exclude from your taxable income a portion of
each annuity payment equal to your "investment in the contract" divided by the
period of expected annuity payments, determined by your life expectancy and the
form of annuity benefit. Once your "investment in the contract" is recovered,
the entire portion of each annuity payment will be included in your taxable
income.
If an election is made to receive the accumulated value in a single sum in lieu
of annuity payments, any amount received or withdrawn in excess of the
"investment in the contract" will normally be taxed as ordinary income in the
year received. A partial withdrawal of contract values is taxable as income to
the extent that the accumulated value of the contract immediately before the
payment exceeds the "investment in the contract." Such a withdrawal is treated
as a distribution of earnings first and only second as recovery of your
"investment in the contract". Any part of the value of the contract that is
assigned or pledged to secure a loan will be taxed as if it had been a partial
withdrawal and may be subject to a penalty tax.
There is a penalty tax equal to 10% of any amount that must be included in gross
income for tax purposes. The penalty will not apply to a redemption that is (1)
received on or after the taxpayer reaches age 59-1/2; (2) made to a beneficiary
on or after the death of the annuitant; (3) attributable to the taxpayer's
becoming disabled; (4) made as a series of substantially equal periodic payments
for the life of the annuitant (or joint lives of the annuitant and beneficiary);
(5) from a contract that is a qualified funding asset for purposes of a
structured settlement; (6) made under an annuity contract that is purchased with
a single premium and with an annuity payout date not later than a year from the
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purchase of the annuity, or (7) incident to divorce. If an election is made not
to have withholding apply to the early withdrawal or if an insufficient amount
is withheld, the contract owner may be responsible for payment of estimated tax.
You may also incur penalties under the estimated tax rules if the withholding
and estimated tax payments are not sufficient. Failure to provide your taxpayer
identification number will automatically subject any payments under the contract
to withholding.
TAX-DEFERRED ANNUITIES
Under the provisions of Section 403(b) of the Code, purchase payments made for
annuity contracts purchased for employees by public educational institutions and
certain tax-exempt organizations which are described in Section 501(c)(3) of the
Code are excludable from the gross income of such employees to the extent that
the aggregate purchase payments plus any other amounts contributed to the
purchase of a contract and toward benefits under qualified retirement plans do
not exceed the exclusion allowance determined for the employee as set forth in
Sections 403(b) and 415 of the Code. Employee contributions are, however,
subject to social security (FICA) tax withholding. All amounts received by an
employee under a contract, either in the form of annuity payments or cash
withdrawal, will be taxed under Section 72 of the Code as ordinary income for
the year received, except for exclusion of any amounts representing "investment
in the contract." Under certain circumstances, amounts received may be used to
make a "tax-free rollover" into one of the types of individual retirement
arrangements permitted under the Code. Amounts received that are eligible for
"tax-free rollover" will be subject to an automatic 20% withholding unless such
amounts are directly rolled over from the tax-deferred annuity to the individual
retirement arrangement.
With respect to earnings accrued and purchase payments made after December 31,
1988, pursuant to a salary reduction agreement under Section 403(b) of the Code,
distributions may be paid only when the employee (a) attains age 59-1/2, (b)
separates from the employer's service, (c) dies, (d) becomes disabled as defined
in the Code, or (e) incurs a financial hardship as defined in the Code. In the
case of hardship, cash distributions may not exceed the amount of such purchase
payments. These restrictions do not affect rights to transfer investments among
the subaccounts and do not limit the availability of transfers between
tax-deferred annuities.
QUALIFIED PENSION OR PROFIT-SHARING PLANS
Under present law, purchase payments made by an employer or trustee, pursuant to
a plan or trust qualified under Section 401(a) or 403(a) of the Code, are
generally excludable from gross income of the employee. The portion, if any, of
the purchase payments made by the employee, or which is considered taxable
income to the employee in the year such payments are made, constitutes an
"investment in the contract" under Section 72 of the Code for the employee's
annuity benefits. Salary reduction payments to a profit sharing plan qualifying
under Section 401(k) of the Code are generally excludable from gross income of
the employee.
The Code requires that plans must prohibit any distribution to a plan
participant prior to age 59-1/2, except in the event of death, total disability
or separation from service. Distributions must commence no later than April 1 of
the calendar year following the year in which the participant reaches age
70-1/2. Premature distribution of benefits or contributions in excess of those
permitted by the Code may result in certain penalties under the Code.
If an employee, or one or more of the beneficiaries, receives the total amounts
payable with respect to an employee within one taxable year after age 59-1/2 on
account of the employee's death or separation from service of the employer, any
amount received in excess of the employee's "investment in the contract" may be
taxed under special 5-year forward averaging rules. The taxpayer can elect to
have that portion of a lump-sum distribution attributable to years of
participation prior to January 1, 1974 given capital gains treatment. The
percentage of pre-74 distribution subject to capital gains treatment decreases
as follows: 100%, 1987; 95%, 1988; 75%, 1989; 50%, 1990; and 25%, 1991. For tax
years 1992 and thereafter no capital gains treatment is available (except that
taxpayers who were age 50 before 1986 may still elect capital gains treatment).
The employee receiving such a distribution may be able to make a "tax-free
rollover" of the distribution less the employee's "investment in the contract"
into another qualified plan in which the employee is a participant or into one
of the types of individual retirement arrangements permitted under the Code. An
employee's surviving spouse receiving such a distribution may be able to make a
tax-free rollover to one of the types of individual retirement arrangements
permitted under the Code. Amounts received that are eligible for "tax-free
rollover" will be subject to an automatic 20% withholding unless such amounts
are directly rolled over to another qualified plan or individual retirement
arrangement.
17
<PAGE> 22
INDIVIDUAL RETIREMENT ANNUITIES (IRA)
Section 408(b) of the Code provides that an individual may invest an amount up
to $2,000 per year of earned income in an IRA and claim it as a personal tax
deduction if such person or the person's spouse is not an "active participant"
in an employer maintained qualified retirement plan or such person has adjusted
gross income which does not exceed the "applicable dollar limit." For a single
taxpayer, the applicable dollar limitation is $25,000, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $25,000-$35,000. For married couples filing jointly, the
applicable dollar limitation is $40,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$40,000- $50,000. There is no deduction allowed for IRA contributions when
Adjusted Gross Income reaches $35,000 for individuals and $50,000 for married
couples filing jointly. In the alternative, an individual otherwise qualified
for an IRA may elect to contribute to an IRA for the individual and for the
individual's non-working spouse, with the total deduction limited to $4,000.
Individuals are permitted to make non-deductible IRA contributions to the extent
they are ineligible to make deductible IRA contributions. Any amount received
from another qualified plan (including another individual retirement
arrangement) which is eligible as a "tax-free rollover" may be invested in an
IRA, and is not counted toward the overall contribution limit. Earnings on
nondeductible IRA contributions are not subject to tax until they are withdrawn.
The combined limit on designated nondeductible and deductible contributions for
a tax year is the lesser of 100% of compensation or $2,000 ($4,000 in the case
of an additional contribution to a spousal IRA).
Generally, distributions (all or part) made prior to age 59-1/2 (except in the
case of death or disability) will result in a penalty tax of 10% plus ordinary
income tax treatment of the amount received. Additionally, there is an excise
tax of 6% of the amount contributed in excess of either the deductible limit or
nondeductible limit, as indicated above, if such amount is not withdrawn prior
to the filing of the income tax return for the year of contribution or applied
as an allowable contribution for a subsequent year. The excise tax will continue
to apply each year until the excess contribution is corrected. Distributions
after age 59-1/2 are treated as ordinary income at the time received.
Distributions must commence before April 1 following the year in which the
individual reaches age 70-1/2. A 50% nondeductible excise tax is imposed on the
excess in any tax year of the amount that should have been distributed over the
amount actually distributed.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEPPS)
Under Section 408 of the Code, employers may establish SEPPs for their
employees. Under these plans the employer may contribute on behalf of an
employee to an individual retirement account or annuity. The amount of the
contribution is excludable from the employee's income.
Certain employees who participate in a SEPP will be entitled to elect to have
the employer make contributions to a SEPP on their behalf or to receive the
contributions in cash. If the employee elects to have contributions made on the
employee's behalf to a SEPP, it is not treated as current taxable income to the
employee. Elective deferrals under a SEPP are subject to an inflation-indexed
limit which is $9,500 for 1996. Salary-reduction SEPPs are available only if at
least 50% of the employees elect to have amounts contributed to the SEPP and if
the employer has 25 or fewer employees at all times during the preceding year.
An employee may also take a deduction for individual contributions to the IRA,
subject to the limits applicable to IRAs in general. Withdrawals from the IRAs
to which the employer contributes must be permitted. These withdrawals, however,
are subject to the general rules with respect to withdrawals from IRAs.
WITHHOLDING ON DISTRIBUTION
Distributions from tax-deferred annuities or qualified pension or profit sharing
plans that are eligible for "tax-free rollover" will be subject to an automatic
20% withholding unless such amounts are directly rolled over to an individual
retirement arrangement or another qualified plan. Federal income tax withholding
on annuity payments is required. However, recipients of annuity payments are
allowed to elect not to have the tax withheld. Such an election may be revoked
at any time with respect to annuity payments and thereafter withholding would
commence. Failure to provide your taxpayer identification number will
automatically subject any payments under the contract to withholding.
18
<PAGE> 23
APPENDIX A
IRA DISCLOSURE STATEMENT
This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your simplified
employee pension IRA (SEPP-IRA) for employer contributions, or to one you
purchase for your spouse (see "IRA for Non-working Spouse", page 19). You can
obtain more information regarding your IRA either from your sales representative
or from any district office of the Internal Revenue Service.
FREE LOOK PERIOD
The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund within 20 days after it is delivered (see
page 8). This is a more liberal provision than is required in connection with
IRA's. To exercise this "free-look" provision write or call the address shown
below: The Ohio National Life Insurance Company
P. O. Box 2669
Cincinnati, Ohio 45201
Telephone: (513) 794-6452 - 8:30 a.m. - 4:30 p.m. (Eastern Time Zone)
ELIGIBILITY REQUIREMENTS
IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.
CONTRIBUTIONS AND DEDUCTIONS
Contributions to your IRA will be deductible if you or your spouse is not an
"active participant" in an employer maintained qualified retirement plan or you
have Adjusted Gross Income which does not exceed the "applicable dollar limit".
IRA (or SEPP-IRA) contributions must be made by no later than the time you file
your income tax return for that year. For a single taxpayer, the applicable
dollar limitation is $25,000, with the amount of IRA contribution which may be
deducted reduced proportionately for Adjusted Gross Income between
$25,000-$35,000. For married couples filing jointly, the applicable dollar
limitation is $40,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $40,000-$50,000. There
is no deduction allowed for IRA contributions when Adjusted Gross Income reaches
$35,000 for individuals and $50,000 for married couples filing jointly.
Contributions made by your employer to your SEPP-IRA are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEPP-IRA will be entitled to
elect to have their employer make contributions to their SEPP-IRA on their
behalf or to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEPP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEPP-IRA are subject to an inflation-adjusted limit which is $9,500 for 1996.
Salary-reduction SEPP-IRAs (also called "SARSEPs") are available only if at
least 50% of the employees elect to have amounts contributed to the SEPP-IRA and
if the employer has 25 or fewer employees at all times during the preceding
year.
The IRA maximum annual contribution and your tax deduction is limited to the
lesser of: (1) $2,000 or (2) 100% of your earned compensation. Contributions in
excess of the deduction limits may be subject to penalty. See below.
Under a SEPP-IRA agreement, the maximum annual contribution which your employer
may make on your behalf to a SEPP-IRA contract which is excludable from your
income is the lesser of 15% of your salary or $22,500. An employee who is a
participant in a SEPP-IRA agreement may make after-tax contributions to the
SEPP-IRA contract, subject to the contribution limits applicable to IRAs in
general. Those employee contributions will be deductible subject to the
deductibility rules described above.
19
<PAGE> 24
The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) $2,000 or (2) 100% of
taxable alimony.
If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEPP-IRA, the excess amount will be considered an "excess
contribution". You are permitted to withdraw an excess contribution from your
IRA or SEPP-IRA before your tax filing date without adverse tax consequences.
If, however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See Premature Distributions, page 19, for penalties imposed on
withdrawal when the contribution exceeds $2,250).
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you will also be eligible to establish an
IRA for your spouse if your spouse receives no earned compensation for the tax
year. Contribution to both IRA's may not exceed $2,250. If the requirements for
deductibility are met, you will only be able to deduct an amount equal to the
least of: (1) amount contributed, (2) $2,250 or (3) 100% of your compensation.
Contributions in excess of the contribution limits may be subject to penalty.
See above under "Contributions and Deductions."
If you contribute more than the amount you may contribute, the excess portion
will be considered an excess contribution. The rules for correcting it are the
same as discussed above for regular IRAs.
Other than the items mentioned in this section, all of the requirements
generally applicable to IRAs are also applicable to IRAs established for
non-working spouses.
ROLLOVER CONTRIBUTION
Once every year, you are permitted to withdraw any portion of the value of your
IRA or SEPP-IRA and reinvest it in another IRA or bond. Withdrawals may also be
made from other IRAs and contributed to this contract. This transfer of funds
from one IRA to another is called a "rollover" IRA. To qualify as a rollover
contribution, the entire portion of the withdrawal must be reinvested in another
IRA within 60 days after the date it is received. You will not be allowed a
tax-deduction for the amount of any rollover contribution.
A similar type of rollover to an IRA can be made with the proceeds of a
qualified distribution from a qualified retirement plan or tax-sheltered
annuity. Properly made, such a distribution will not be taxable until you
receive payments from the IRA created with it. Unless you were a self-employed
participant in the distributing plan, you may later roll over such a
contribution to another qualified retirement plan as long as you have not mixed
it with IRA (or SEPP-IRA) contributions you have deducted from your income. (You
may roll less than all of a qualified distribution into an IRA, but any part of
it not rolled over will be currently includable in your income without any
capital gains treatment.)
PREMATURE DISTRIBUTIONS
At no time can your interest in your IRA or SEPP-IRA be forfeited. To insure
that your contributions will be used for your retirement, the federal tax law
does not permit you to use your IRA or SEPP-IRA as security for a loan.
Furthermore, as a general rule, you may not sell or assign your interest in your
IRA or SEPP-IRA to anyone. Use of an IRA (or SEPP-IRA) as security or assignment
of it to another will invalidate the entire annuity. It then will be includable
in your income in the year it is invalidated and will be subject to a 10%
penalty tax if you are not at least age 59-1/2 or totally disabled. (You may,
however, assign your IRA or SEPP-IRA without penalty to your former spouse in
accordance with the terms of a divorce decree.)
20
<PAGE> 25
You may surrender any portion of the value of your IRA (or SEPP-IRA). In the
case of a partial surrender which does not qualify as a rollover, the amount
withdrawn will be includable in your income and subject to the 10% penalty if
you are not at least age or 59-1/2 totally disabled unless you comply with
special rules requiring distributions to be made at least annually over your
life expectancy.
The 10% penalty tax does not apply to the withdrawal of an excess contribution
as long as the excess is withdrawn before the due date of your tax return.
Withdrawals of excess contributions after the due date of your tax return will
generally be subject to the 10% penalty unless the excess contribution results
from erroneous information from a plan trustee making an excess rollover
contribution or unless you are over age 59-1/2 or are disabled.
DISTRIBUTION AT RETIREMENT
Once you have attained age 59-1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEPP-IRA) regardless of when you
actually retire. You may elect to receive the distribution in either one sum or
under any one of the periodic payment options available under the contract. The
distributions from your IRA under any one of the periodic payment options or in
one sum will be treated as ordinary income as you receive them.
INADEQUATE OR UNDER DISTRIBUTIONS - 50% TAX
Your IRA or SEPP-IRA is intended to provide retirement benefits over your
lifetime. Thus, federal law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70-1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse). If the payments are not sufficient to meet
these requirements, an excise tax of 50% will be imposed on the amount of any
underpayment.
DEATH BENEFITS
If you, (or your surviving spouse) die before receiving the entire value of your
IRA (or SEPP-IRA), the remaining interest must be distributed to your
beneficiary (or your surviving spouse's beneficiary) in one lump-sum or applied
to purchase an immediate annuity for the beneficiary. This annuity must be
payable over the life expectancy of the beneficiary within one year after your
or your spouse's death. If your spouse is the designated beneficiary, he or she
is treated as the owner of the IRA. If minimum required distributions have
begun, the entire amount must be distributed at least as rapidly as if the owner
had survived. A distribution of the balance of your IRA upon your death will not
be considered a gift for federal tax purposes, but will be included in your
gross estate for purposes of federal estate taxes.
PROTOTYPE STATUS
The Internal Revenue Service has been requested to review the format of your
SEPP, and to issue an opinion letter to Ohio National Life stating that your IRA
qualifies as a prototype SEPP.
REPORTING TO THE IRS
Whenever you are liable for one of the penalty taxes discussed above (6% for
excess contributions, 10% for premature distributions or 50% for underpayments),
you must file Form 5329 with the Internal Revenue Service. The form is to be
attached to your federal income tax return for the tax year in which the penalty
applies. Normal contributions and distributions must be shown on your income tax
return for the year to which they relate.
21
<PAGE> 26
ILLUSTRATION OF IRA FIXED ACCUMULATIONS
<TABLE>
<CAPTION>
AGE 60 AGE 65 AGE 70
GUARANTEED GUARANTEED GUARANTEED
SURRENDER VALUE SURRENDER VALUE SURRENDER VALUE
----------------------------- ------------------------------- ------------------------------
$2,000 $2,000 $2,000
$1,000 ONE TIME $1,000 ONE TIME $1,000 ONE TIME
CONTRACT ANNUAL LUMP SUM ANNUAL LUMP SUM ANNUAL LUMP SUM
ANNIVERSARY CONTRIBUTIONS CONTRIBUTION CONTRIBUTIONS CONTRIBUTION CONTRIBUTIONS CONTRIBUTION
----------- ------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 925.35 $ 2,027.45 $ 925.35 $ 2,027.45 $ 925.35 $ 2,027.45
2 1,878.46 2,055.72 1,878.46 2,055.72 1,878.46 2,055.72
3 2,870.01 2,083.76 2,870.01 2,083.76 2,870.01 2,083.76
4 3,901.83 2,111.91 3,901.83 2,111.91 3,901.83 2,111.91
5 4,975.45 2,140.16 4,975.45 2,104.16 4,975.45 2,140.16
6 6,102.14 2,166.24 6,102.14 2,166.24 6,102.14 2,166.24
7 7,276.08 2,194.24 7,276.08 2,194.24 7,276.08 2,194.24
8 8,497.12 2,222.31 8,497.12 2,222.31 8,497.12 2,222.31
9 9,757.56 2,253.98 9,757.56 2,253.98 9,757.56 2,253.98
10 11,055.81 2,286.60 11,055.81 2,286.60 11,055.81 2,286.60
15 18,155.17 2,464.97 18,155.17 2,464.97 18,155.17 2,464.97
20 26,385.27 2,671.76 26,385.27 2,671.76 26,385.27 2,671.76
25 35,926.22 2,911.48 35,926.22 2,911.48 35,926.22 2,911.48
30 46,986.79 3,189.39 46,986.79 3,189.39 46,986.79 3,189.39
35 59,809.02 3,511.55 59,809.02 3,511.55 59,809.02 3,511.55
40 74,673.50 3,885.03 74,673.50 3,885.03 74,673.50 3,885.03
45 91,905.51 4,318.00 91,905.51 4,318.00 91,905.51 4,318.00
50 111,882.13 4,819.92 111,882.13 4,819.92 111,882.13 4,819.92
55 135,040.51 5,401.79 135,040.51 5,401.79 135,040.51 5,401.79
60 161,887.42 6,076.34 161,887.42 6,076.34 161,887.42 6,076.34
65 193,010.34 6,858.32 193,010.34 6,858.32
70 229,090.34 7,764.85
</TABLE>
* Guaranteed Interest Rate: 3.00% is applicable to each contract anniversary.
* The Surrender Value is the Accumulation Values less the Contingent Deferred
Sales Charge.
22
<PAGE> 27
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 28
OHIO NATIONAL VARIABLE ACCOUNT A
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Cincinnati, Ohio 45242
Telephone (513) 794-6452
STATEMENT OF ADDITIONAL INFORMATION
_________, 19__
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the prospectus for Ohio National Variable Account A ("VAA")
flexible purchase payment individual variable annuity contracts dated _________,
19__. To obtain a free copy of the VAA prospectus, write or call The Ohio
National Life Insurance Company ("Ohio National Life") at the above address.
Table of Contents
<TABLE>
<CAPTION>
<S> <C> <C>
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Independent Certified Public Accountants . . . . . . . . . . . . . 2
Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Calculation of Money Market Subaccount Yield . . . . . . . . . . . 3
Total Return . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Transfer Limitations . . . . . . . . . . . . . . . . . . . . . . . 4
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 5
Appendix:
Loans Under Tax-sheltered Annuities . . . . . . . . . . . 47
Guaranteed Accumulation Account . . . . . . . . . . . . .47
</TABLE>
"EXPLORER"
VARIABLE ANNUITY
<PAGE> 29
CUSTODIAN
Ohio National Life has executed an agreement with The Provident Bank ("the
Bank"), Cincinnati, Ohio, pursuant to which the shares of Ohio National Fund,
Inc. ("Fund") and other assets credited to VAA in connection with these
contracts will be held in the custody of the Bank. The agreement provides that
the Bank will purchase Fund shares at their net asset value determined as of the
end of the valuation period of VAA during which the purchase payment is received
by Ohio National Life for outstanding contracts or, in the case of new
contracts, the value determined as of the end of the valuation period during
which the contract is issued. The Bank effects redemptions of Fund shares held
by VAA upon instructions from Ohio National Life at net asset value determined
as of the end of the valuation period of VAA during which a redemption request
is received or made by Ohio National Life. In addition, the Bank maintains
appropriate records with respect to all transactions in Fund shares relative to
VAA.
The agreement requires the Bank to have at all times an aggregate capital,
surplus and undivided profit of not less than $2 million and prohibits
resignation by the Bank until (a) a successor custodian bank having the
qualifications enumerated above shall have agreed to serve as custodian, or (b)
VAA has been completely liquidated and the proceeds of such liquidation properly
distributed. Subject to these conditions the agreement of custodianship may be
terminated by either party upon sixty days written notice. For its services as
custodian, the Bank will be paid a fee to be agreed upon from time to time by
the Bank and Ohio National Life.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The financial statements of VAA as of December 31, 1995 and for the periods
indicated herein and of The Ohio National Life Insurance Company's consolidated
financial statements as of December 31, 1995 and 1994 and for the periods
indicated herein have been included herein in reliance upon the reports of KPMG
Peat Marwick LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing. The report on The Ohio National Life Insurance Company refers to a
change in accounting and reporting by mutual life insurance enterprises and by
insurance enterprises for certain long-duration participating contracts in 1995.
UNDERWRITER
The offering of the contracts is continuous. At the date of this Statement of
Additional Information, The O.N. Equity Sales Company ("ONESCO"), a wholly-owned
subsidiary of Ohio National Life, was the principal underwriter of the
contracts. The aggregate amount of underwriting commissions paid to ONESCO with
respect to contracts issued by VAA, and the amounts retained by ONESCO, for each
of the last three years have been:
<TABLE>
<CAPTION>
Aggregate Retained
Year Commissions Commissions
<S> <C> <C> <C>
1995 $1,645,426 $151,215
1994 1,562,146 178,330
1993 997,974 122,570
</TABLE>
Pending receipt of necessary regulatory approvals, Ohio National Equities, Inc.,
a new wholly-owned subsidiary of Ohio National Life, will become the principal
underwriter of the contracts.
-2-
<PAGE> 30
CALCULATION OF MONEY MARKET SUBACCOUNT YIELD
The current yield of the Money Market subaccount for the seven days ended on
December 31, 1995, was 4.13%. This was calculated by determining the net change,
exclusive of capital changes, in the value of a hypothetical pre-existing
account having a balance of one accumulation unit of the subaccount at the
beginning of the seven-day period, dividing the net change in subaccount value
by the value of the subaccount at the beginning of the base period to obtain the
base period return, and multiplying the difference by 365/7. The resulting
figure is carried to the nearest hundredth of one percent.
TOTAL RETURN
The average annual compounded rate of return for a contract with respect to a
particular subaccount over a given period is found by equating the initial
amount invested to the ending redeemable value using the following formula:
P(1 + T(n) = ERV
where: P = a hypothetical initial payment of $1,000,
T = the average annual total return,
n = the number of years, and
ERV = the ending redeemable value of a hypothetical
$1,000 beginning-of-period payment at the end
of the period (or fractional portion thereof).
For this purpose, it should be noted that the current series of contracts were
initially offered on or after the date of this Statement of Additional
Information. The data based upon the performance of the subaccounts prior to
that date is presented as if the same charges and deductions applicable to the
current contracts had been in effect from the inception of each corresponding
portfolio of the Fund or Other Funds. Note also that, for purposes of these
calculations, the annual contract administration charge of $35 has been
converted to an annualized percentage charge of 0.18%. This is based upon an
estimated average accumulation value of $19,000 for contracts in this series.
The actual effect that the contract administration charge would have on total
returns would be less than that percentage for contracts having a higher
accumulation value and greater than that percentage for contracts having a lower
accumulation value.
The average annual total returns for current contracts in each of the
subaccounts from the inception of the subaccount and for the one-, five- and
ten-year periods ending on December 31, 1995, and assuming surrender of the
contract on the latter date, are as follows:
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception Date
------ ------ ------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Equity 25.22% 11.70% 11.59% 8.46% 10-06-69
Money Market 3.97% 2.59% 4.09% 5.90% 03-20-80
Bond 17.05% 7.29% 6.62% 7.33% 11-02-82
Omni 20.84% 10.33% 9.02% 9.49% 09-10-84
</TABLE>
-3-
<PAGE> 31
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception _Date__
<S> <C> <C> <C> <C> <C> <C>
International 10.36% N/A N/A 15.05% 04-30-93
Capital Appreciation 20.71% N/A N/A 14.23% 05-01-94
Small Cap 30.94% N/A N/A 31.11% 05-01-94
Global Contrarian N/A N/A N/A 7.61% 03-31-95
Aggressive Growth N/A N/A N/A 25.46% 03-31-95
Core Growth N/A N/A N/A N/A - -97
Growth & Income N/A N/A N/A N/A - -97
S&P 500 Index N/A N/A N/A N/A - -97
Social Awareness N/A N/A N/A N/A - -97
Emerging Markets N/A N/A N/A N/A 02-02-96
High Income 19.24% 17.44% N/A 9.99% 10-09-86
Equity-Income 33.61% 19.84% N/A 11.85% 10-09-86
Growth 33.88% 19.30% N/A 13.35% 10-09-86
</TABLE>
TRANSFER LIMITATIONS
To the extent that transfers, surrenders, partial withdrawals and annuity
payments from a subaccount exceed net purchase payments and transfers into that
subaccount, securities of the corresponding portfolio of the Fund may have to be
sold. Excessive sales of a portfolio's securities on short notice could be
detrimental to that portfolio and to contractowners with values allocated to the
corresponding subaccount. To protect the interests of all contractowners, Ohio
National Life reserves the right to limit the number, frequency, method or
amount of transfers. Transfers from any portfolio of the Fund on any one day may
be limited to 1% of the previous day's total net assets of that portfolio if
Ohio National Life or the Fund, in its or their discretion, believes that the
portfolio might otherwise be damaged.
If and when transfers must be so limited, some transfer requests will not be
made. In determining which requests will be made, scheduled transfers (that is,
those pursuant to a pre-existing dollar cost averaging program) will be made
first, followed by mailed written requests in the order postmarked and, lastly,
telephone and facsimile requests in the order received. Contractowners whose
transfer requests are not made will be so notified. Current SEC rules preclude
Ohio National Life from processing at a later date those requests that were not
made. Accordingly, a new transfer request would have to be submitted in order to
make a transfer that was not made because of these limitations.
-4-
<PAGE> 32
OHIO NATIONAL VARIABLE ACCOUNT A
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Ohio National Life Insurance Company
The Contract Owners
Ohio National Variable Account A
We have audited the accompanying statements of assets and contract owners'
equity of Ohio National Variable Account A as of December 31, 1995, and the
related statements of operations, changes in contract owners' equity and
schedules of changes in unit values for each of the periods indicated herein.
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. Our procedures included
confirmation of securities owned as of December 31, 1995, by examination of the
underlying mutual fund. 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 financial position of Ohio National Variable Account
A at December 31, 1995, and the results of its operations, changes in contract
owners' equity and changes in unit values for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Cincinnati, Ohio
January 26, 1996
================================================================================
OHIO NATIONAL VARIABLE ACCOUNT A
STATEMENTS OF ASSETS AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY INTER-
EQUITY MARKET BOND OMNI NATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Assets - Investments
at market value
(note 2) $ 69,436,065 $ 4,906,226 $4,757,079 $ 44,360,064 $33,130,174
============ =========== ========== ============ ===========
Contract owners'
equity:
Contracts in
accumulation
period (note 3) $ 69,084,841 $ 4,783,920 $4,747,050 $ 44,254,306 $33,130,174
Annuity reserves
for contracts in
payment period 351,224 122,306 10,029 105,758 0
------------ ----------- ---------- ------------ -----------
Total contract
owners' equity $ 69,436,065 $ 4,906,226 $4,757,079 $ 44,360,064 $33,130,174
============ =========== ========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
CAPITAL SMALL GLOBAL AGGRESS.
APPREC. CAP CONTR. GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Assets - Investments
at market value
(note 2) $4,207,564 $5,223,471 $548,985 $625,253
========== ========== ======== ========
Contract owners'
equity:
Contracts in
accumulation
period (note 3) $4,207,564 $5,223,471 $548,985 $625,253
Annuity reserves
for contracts in
payment period 0 0 0 0
---------- ---------- -------- --------
Total contract
owners' equity $4,207,564 $5,223,471 $548,985 $625,253
========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 33
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT A
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
-----------------------------------------------------------------------------------------------
EQUITY MONEY MARKET
SUBACCOUNT SUBACCOUNT
1995 1994 1995 1994
------------------------ -----------------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends .............. $ 1,723,423 $ 1,572,122 $ 189,597 $ 108,479
----------- ----------- ---------- ----------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ....... 904,829 625,295 0 0
Unrealized gain (loss) ..... 11,625,942 (2,080,712) 0 0
----------- ----------- ---------- ----------
Net gain (loss) on
investments ............ 12,530,771 (1,455,417) 0 0
----------- ----------- ---------- ----------
Net investment activity 14,254,194 116,705 189,597 108,479
----------- ----------- ---------- ----------
Equity transactions:
Sales:
Contract purchase payments . 8,103,486 7,622,777 2,272,210 1,691,091
Transfers from fixed and
other subaccounts ........ 3,069,834 1,842,285 1,882,448 767,783
----------- ----------- ---------- ----------
11,173,320 9,465,062 4,154,658 2,458,874
----------- ----------- ---------- ----------
Redemptions:
Withdrawals and surrenders . 2,826,751 1,898,657 305,731 266,569
Annuity and death benefit
payments ................. 599,141 133,152 16,451 101,118
Transfers to fixed and
other subaccounts ........ 2,340,950 3,886,956 2,691,865 977,212
----------- ----------- ---------- ----------
5,766,842 5,918,765 3,014,047 1,344,899
----------- ----------- ---------- ----------
Net equity transactions 5,406,478 3,546,297 1,140,611 1,113,975
----------- ----------- ---------- ----------
Risk and administrative
expense (note 4) ............. 651,801 530,943 34,079 31,442
----------- ----------- ---------- ----------
Net change in contract
owners' equity ........... 19,008,871 3,132,059 1,296,129 1,191,012
Contract owners' equity:
Beginning of period .......... 50,427,194 47,295,135 3,610,097 2,419,085
----------- ----------- ---------- ----------
End of period ................ $69,436,065 $50,427,194 $4,906,226 $3,610,097
=========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT A
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
-----------------------------------------------------------------------------------------------
BOND OMNI
SUBACCOUNT SUBACCOUNT
1995 1994 1995 1994
---------------------- -------------------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends .............. $ 211,780 $ 249,396 $ 1,108,038 $ 1,270,091
---------- ---------- ----------- -----------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ....... 6,646 (20,500) 435,547 312,399
Unrealized gain (loss) ..... 482,005 (361,480) 6,398,204 (1,756,305)
---------- ---------- ----------- -----------
Net gain (loss) on
investments ............ 488,651 (381,980) 6,833,751 (1,443,906)
---------- ---------- ----------- -----------
Net investment activity 700,431 (132,584) 7,941,789 (173,815)
---------- ---------- ----------- -----------
Equity transactions:
Sales:
Contract purchase payments . 959,158 758,640 5,062,792 7,029,736
Transfers from fixed and
other subaccounts ........ 303,129 144,860 793,343 973,373
---------- ---------- ----------- -----------
1,262,287 903,500 5,856,135 8,003,109
---------- ---------- ----------- -----------
Redemptions:
Withdrawals and surrenders . 271,658 104,763 2,021,783 1,447,772
Annuity and death benefit
payments ................. 25,808 869 116,467 21,726
Transfers to fixed and
other subaccounts ........ 193,959 724,239 2,043,636 3,468,899
---------- ---------- ----------- -----------
491,425 829,871 4,181,886 4,938,397
---------- ---------- ----------- -----------
Net equity transactions 770,862 73,629 1,674,249 3,064,712
---------- ---------- ----------- -----------
Risk and administrative
expense (note 4) ............. 44,400 36,370 425,306 380,705
---------- ---------- ----------- -----------
Net change in contract
owners' equity ........... 1,426,893 (95,325) 9,190,732 2,510,192
Contract owners' equity:
Beginning of period .......... 3,330,186 3,425,511 35,169,332 32,659,140
---------- ---------- ----------- -----------
End of period ................ $4,757,079 $3,330,186 $44,360,064 $35,169,332
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
(continued)
<PAGE> 34
<TABLE>
<CAPTION>
OHIO NATIONAL VARIABLE ACCOUNT A
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
-------------------------------------------------------------------------------
INTERNATIONAL CAPITAL APPRECIATION(a)
SUBACCOUNT SUBACCOUNT
1995 1994 1995 1994
------------------------ ----------------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends .............. $ 991,686 $ 182,743 $ 55,307 $ 6,015
----------- ----------- ---------- --------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ....... 137,917 71,841 16,743 782
Unrealized gain (loss) ..... 2,266,142 292,268 291,929 (905)
----------- ----------- ---------- --------
Net gain (loss) on
investments ............ 2,404,059 364,109 308,672 (123)
----------- ----------- ---------- --------
Net investment activity 3,395,745 546,852 363,979 5,892
----------- ----------- ---------- --------
Equity transactions:
Sales:
Contract purchase payments . 7,753,900 11,195,111 2,638,520 504,692
Transfers from fixed and
other subaccounts ........ 1,305,223 9,158,421 806,607 81,436
----------- ----------- ---------- --------
9,059,123 20,353,532 3,445,127 586,128
----------- ----------- ---------- --------
Redemptions:
Withdrawals and surrenders . 1,134,559 244,707 59,207 0
Annuity and death benefit
payments ................. 54,693 50,543 0 28,112
Transfers to fixed and
other subaccounts ........ 3,141,268 740,320 70,828 14,943
----------- ----------- ---------- --------
4,330,520 1,035,570 130,035 43,055
----------- ----------- ---------- --------
Net equity transactions 4,728,603 19,317,962 3,315,092 543,073
----------- ----------- ---------- --------
Risk and administrative
expense (note 4) ............. 312,946 182,911 19,404 1,068
----------- ----------- ---------- --------
Net change in contract
owners' equity ........... 7,811,402 19,681,903 3,659,667 547,897
Contract owners' equity:
Beginning of period .......... 25,318,772 5,636,869 547,897 0
----------- ----------- ---------- --------
End of period ................ $33,130,174 $25,318,772 $4,207,564 $547,897
=========== =========== ========== ========
OHIO NATIONAL VARIABLE ACCOUNT A
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
-------------------------------------------------------------------------------
GLOBAL AGRESSIVE
SMALL CAP(a) CONTRAR.(b) GROWTH(b)
SUBACCOUNT SUBACCOUNT SUBACCOUNT
1995 1994 1995 1995
---------------------- ------------------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends .............. $ 8,230 $ 7,996 $ 1,259 $ 12,988
---------- -------- -------- --------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ....... 32,092 7,406 (587) 4,085
Unrealized gain (loss) ..... 609,033 42,149 13,613 23,386
---------- -------- -------- --------
Net gain (loss) on
investments ............ 641,125 49,555 13,026 27,471
---------- -------- -------- --------
Net investment activity 649,355 57,551 14,285 40,459
---------- -------- -------- --------
Equity transactions:
Sales:
Contract purchase payments . 2,704,917 825,873 508,497 544,084
Transfers from fixed and
other subaccounts ........ 1,195,795 97,996 38,361 50,264
---------- -------- -------- --------
3,900,712 923,869 546,858 594,348
---------- -------- -------- --------
Redemptions:
Withdrawals and surrenders . 81,418 250 1,715 119
Annuity and death benefit
payments ................. 16,255 22,573 0 0
Transfers to fixed and
other subaccounts ........ 121,816 38,171 7,642 7,936
---------- -------- -------- --------
219,489 60,994 9,357 8,055
---------- -------- -------- --------
Net equity transactions 3,681,223 862,875 537,501 586,293
---------- -------- -------- --------
Risk and administrative
expense (note 4) ............. 23,562 3,971 2,801 1,499
---------- -------- -------- --------
Net change in contract
owners' equity ........... 4,307,016 916,455 548,985 625,253
Contract owners' equity:
Beginning of period .......... 916,455 0 0 0
---------- -------- -------- --------
End of period ................ $5,223,471 $916,455 $548,985 $625,253
========== ======== ======== ========
</TABLE>
(a) Commenced operations May 1, 1994.
(b) Commenced operations March 31, 1995.
The accompanying notes are an integral part of these financial statements.
<PAGE> 35
OHIO NATIONAL VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ohio National Variable Account A (the Account) is a separate account of The
Ohio National Life Insurance Company (ONLIC) and all obligations arising
under variable annuity contracts are general corporate obligations of ONLIC.
The account has been registered as a unit investment trust under the
Investment Company Act of 1940.
Assets of the Account are invested in shares of Ohio National Fund, Inc.
(the Fund), a diversified open-end management investment company. The Fund's
investments are subject to varying degrees of market, interest and financial
risks; the issuers' abilities to meet certain obligations may be affected by
economic developments in their respective industries.
Annuity reserves are computed for currently payable contracts according to
the Progressive Annuity Mortality Table. The assumed interest rate is 3.5
and 4.0 percent depending on the contract selected by the annuitant. Charges
to annuity reserves for adverse mortality and expense risk experience are
reimbursed to the Account by ONLIC.
Investments are valued at the net asset value of fund shares held at
December 31, 1995. Share transactions are recorded on the trade date. Income
and capital gain distributions are recorded on the ex-dividend date. Net
realized capital gain or loss is determined on the basis of average cost.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) INVESTMENTS
At December 31, 1995 the aggregate cost and number of shares of Ohio
National Fund, Inc. owned by the respective subaccounts were:
<TABLE>
<CAPTION>
MONEY INTER-
EQUITY MARKET BOND OMNI NATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Aggregate Cost $ 50,343,780 $4,906,226 $4,496,732 $35,410,035 $30,120,032
Number of shares 2,429,236 490,623 435,271 2,520,501 2,303,282
</TABLE>
<TABLE>
<CAPTION>
CAPITAL SMALL GLOBAL AGGRESS.
APPREC. CAP CONTR. GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate Cost $3,916,540 $4,572,289 $535,373 $601,867
Number of shares 350,981 329,515 50,819 52,791
</TABLE>
(3) CONTRACTS IN ACCUMULATION PERIOD
At December 31, 1995 the accumulation units and value per unit of the
respective subaccounts and products were:
<TABLE>
<CAPTION>
ACCUMULATION UNITS VALUE PER UNIT
------------------ --------------
<S> <C> <C>
EQUITY SUBACCOUNT
Combination.......................................... 36,620.054 $ 96.995665
Back Load............................................ 20,564.069 54.616584
Top I................................................ 185,550.190 43.711561
Top II............................................... 1,394,000.758 37.616119
Top Plus............................................. 301,146.725 12.824740
MONEY MARKET SUBACCOUNT
VIA.................................................. 23,518.810 25.237165
Top I................................................ 26,822.902 19.122749
Top II............................................... 130,217.732 16.904534
Top Plus............................................. 136,204.870 10.837896
BOND SUBACCOUNT
Top I................................................ 30,431.446 27.068171
Top II............................................... 130,719.697 24.481177
Top Plus............................................. 64,972.687 11.130129
OMNI SUBACCOUNT
Top I................................................ 134,309.182 29.404272
Top II...............................................1,272,671.551 29.337035
Top Plus............................................. 244,024.999 12.165280
</TABLE>
<PAGE> 36
OHIO NATIONAL VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
INTERNATIONAL SUBACCOUNT
Top I................................................ 112,362.463 14.702847
Top II............................................... 1,803,630.317 14.702847
Top Plus............................................. 384,681.903 12.892796
CAPITAL APPRECIATION SUBACCOUNT
Top I................................................ 8,261.482 11.370573
Top II............................................... 126,633.448 11.370573
Top Plus............................................. 211,756.246 12.626458
SMALL CAP SUBACCOUNT
Top I................................................ 16,138.682 12.201273
Top II............................................... 154,062.671 12.201273
Top Plus............................................. 198,048.000 15.889068
GLOBAL CONTRARIAN SUBACCOUNT
Top II............................................... 3,869.684 10.125502
Top Plus............................................. 47,134.070 10.816003
AGGRESSIVE GROWTH SUBACCOUNT
Top II............................................... 9,491.106 10.499375
Top Plus............................................. 41,681.350 12.610012
</TABLE>
(4) RISK AND ADMINISTRATIVE EXPENSE
A deduction is made at the end of each valuation period, equal to 0.25% on
an annual basis, of the contract value for administrative expenses, based on
premiums established at the time the contracts are issued.
Although variable annuity payments differ according to the investment
performance of the Accounts, they are not affected by mortality or expense
experience because ONLIC assumes the expense risk and the mortality risk
under the contracts. ONLIC charges the Accounts' assets for assuming those
risks, based on the contract value at a rate of 0.25% for mortality risk and
0.4% for expense risk on an annual basis.
The expense risk assumed by ONLIC is the risk that the deductions for sales
and administrative expenses provided for in the variable annuity contract
may prove insufficient to cover the cost of those terms.
The mortality risk results from a provision in the contract in which ONLIC
agrees to make annuity payments regardless of how long a particular
annuitant or other payee lives and how long all annuitants or other payees
as a class live if payment options involving life contingencies are chosen.
Those annuity payments are determined in accordance with annuity purchase
rate provisions established at the time the contracts are issued.
(5) CONTRACT CHARGES
No deduction for a sales charge is made from purchase payments. A contingent
deferred sales charge ranging from 0% to 6% may be assessed by ONLIC when a
contract is surrendered or a partial withdrawal of accumulation value is
made before the annuity payout date.
A transfer fee is charged for each transfer from one subaccount to another.
The fee is charged against the contract owner's equity in the subaccount
from which the transfer is effected.
State premium taxes presently range from 0% to 2 1/2% for these contracts.
In those jurisdictions permitting, such taxes will be deducted when annuity
payments begin. Elsewhere, they will be deducted from purchase payments.
<PAGE> 37
OHIO NATIONAL VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
(6) FEDERAL INCOME TAXES
Operations of the Account form a part of, and are taxed with, operations of
ONLIC which is taxed as a life insurance company under the Internal Revenue
Code. Taxes are the responsibility of the contract owner upon termination or
withdrawal. No Federal income taxes are payable under present law on
dividend income or capital gains distribution from the Fund shares held in
the Account or on capital gains realized by the Account on redemption of the
Fund shares.
(7) NOTE TO SCHEDULE 1
Schedule 1 presents the components of the change in the unit values, which
are the basis for determining contract owners' equity. This schedule is
presented for each series, as applicable, in the following format:
- Beginning unit value
- Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to capital
gain and dividend distributions from the underlying mutual fund.)
- Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the fund.)
- Contract charges
(This amount reflects the decrease in the unit value due to Risk and
Administrative Expenses discussed in note 4 to the financial
statements.)
- Ending unit value
- Percentage increase (decrease) in unit value.
<PAGE> 38
SCHEDULE 1
OHIO NATIONAL VARIABLE ACCOUNT A
SCHEDULES OF CHANGES IN UNIT VALUES
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
EQUITY SUBACCOUNT A
-------------------
1995 COMBINATION BACK LOAD TOP I TOP II TOP PLUS
<S> <C> <C> <C> <C> <C>
Beginning unit value ................. 77.016062 43.409203 34.741902 29.897240 10.173015
Reinvested capital gains and dividends 2.510281 1.420905 1.133756 0.977991 0.339195
Realized and unrealized gain ......... 18.348416 10.333063 8.352522 7.117918 2.419560
Contract charges ..................... -0.879094 -0.546587 -0.516619 -0.377030 -0.107030
Ending unit value .................... 96.995665 54.616584 43.711561 37.616119 12.824740
Percentage increase in unit value* ... 25.9% 25.8% 25.8% 25.8% 26.1%
<CAPTION>
1994 COMBINATION BACK LOAD TOP I TOP II TOP PLUS
Beginning unit value ................. 77.594885 43.778939 35.037574 30.151694 10.239365
Reinvested capital gains and dividends 2.496152 1.404845 1.127235 0.969523 0.328195
Realized and unrealized loss ......... -2.299093 -1.293507 -0.967881 -0.892750 -0.302664
Contract charges ..................... -0.775882 -0.481074 -0.455026 -0.331227 -0.091881
Ending unit value .................... 77.016062 43.409203 34.741902 29.897240 10.173015
Percentage decrease in unit value* ... -0.7% -0.8% -0.8% -0.8% -0.6%
</TABLE>
* An annualized rate of return cannot be determined as contract charges
do not include the contract charges discussed in note (5) .
<TABLE>
<CAPTION>
MONEY MARKET SUBACCOUNT A
-------------------------
1995 VIA TOP I TOP II TOP PLUS
<S> <C> <C> <C> <C>
Beginning unit value ............. 24.205890 18.341334 16.181828 10.354108
Reinvested dividends ............. 1.352265 1.062265 0.904803 0.579386
Contract charges ................. -0.320990 -0.280850 -0.182097 -0.095598
Ending unit value ................ 25.237165 19.122749 16.904534 10.837896
Percentage increase in unit value* 4.3% 4.3% 4.5% 4.7%
<CAPTION>
1994 VIA TOP I TOP II TOP PLUS
Beginning unit value ............. 23.578345 17.865828 15.731262 10.045964
Reinvested dividends ............. 0.937322 0.746447 0.625838 0.400336
Contract charges ................. -0.309777 -0.270941 -0.175272 -0.092192
Ending unit value ................ 24.205890 18.341334 16.181828 10.354108
Percentage increase in unit value* 2.7% 2.7% 2.9% 3.1%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
<TABLE>
<CAPTION>
BOND SUBACCOUNT A
-----------------
1995 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value ...................... 23.016849 20.817057 9.445623
Reinvested capital gains and dividends .... 1.304682 1.183172 0.547329
Realized and unrealized gain .............. 3.073599 2.731821 1.232143
Contract charges .......................... -0.326959 -0.250873 -0.094966
Ending unit value ......................... 27.068171 24.481177 11.130129
Percentage increase in unit value* ........ 17.6% 17.6% 17.8%
<CAPTION>
1994 Top I Top II Top Plus
Beginning unit value ...................... 24.198199 21.885503 9.910842
Reinvested capital gains and dividends .... 1.746308 1.579523 0.708722
Realized and unrealized loss .............. -2.623909 -2.415482 -1.088608
Contract charges .......................... -0.303749 -0.232487 -0.085333
Ending unit value ......................... 23.016849 20.817057 9.445623
Percentage decrease in unit value* ........ -4.9% -4.9% -4.7%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5)
(continued)
<PAGE> 39
SCHEDULE 1 (CONTINUED)
OHIO NATIONAL VARIABLE ACCOUNT A
SCHEDULES OF CHANGES IN UNIT VALUES
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
OMNI SUBACCOUNT A
-----------------
1995 TOP I TOP II TOP PLUS
<S> <C> <C> <C>
Beginning unit value ................. 24.217555 24.162172 9.999661
Reinvested capital gains and dividends 0.761229 0.760769 0.317983
Realized and unrealized gain ......... 4.776533 4.710829 1.949149
Contract charges ..................... -0.351045 -0.296735 -0.101513
Ending unit value .................... 29.404272 29.337035 12.165280
Percentage increase in unit value* ... 21.4% 21.4% 21.7%
<CAPTION>
1994 TOP I TOP II TOP PLUS
Beginning unit value ................. 24.613344 24.557054 10.143037
Reinvested capital gains and dividends 0.881879 0.879802 0.363174
Realized and unrealized loss ......... -0.961947 -1.008268 -0.416697
Contract charges ..................... -0.315721 -0.266416 -0.089853
Ending unit value .................... 24.217555 24.162172 9.999661
Percentage decrease in unit value* ... -1.6% -1.6% -1.4%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
<TABLE>
<CAPTION>
INTERNATIONAL SUBACCOUNT A
--------------------------
1995 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value ................. 13.259582 13.259582 11.604279
Reinvested capital gains and dividends 0.470616 0.470869 0.414884
Realized and unrealized gain ......... 1.153328 1.125369 0.983946
Contract charges ..................... -0.180679 -0.152973 -0.110313
Ending unit value .................... 14.702847 14.702847 12.892796
Percentage increase in unit value* ... 10.9% 10.9% 11.1%
<CAPTION>
1994 Top I Top II Top Plus
Beginning unit value ................. 12.404596 12.404596 10.834626
Reinvested capital gains and dividends 0.144311 0.144501 0.126543
Realized and unrealized gain ......... 0.884327 0.827577 0.748505
Contract charges ..................... -0.173652 -0.117092 -0.105395
Ending unit value .................... 13.259582 13.259582 11.604279
Percentage increase in unit value* ... 6.9% 6.9% 7.1%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
<TABLE>
<CAPTION>
CAPITAL APPRECIATION SUBACCOUNT A
---------------------------------
1995 TOP I TOP II TOP PLUS
<S> <C> <C> <C>
Beginning unit value ................. 10.000000*** 10.000000*** 10.390128
Reinvested capital gains and dividends 0.270114 0.269661 0.289727
Realized and unrealized gain ......... 1.244208 1.222546 2.053530
Contract charges ..................... -0.143749 -0.121634 -0.106927
Ending unit value .................... 11.370573 11.370573 12.626458
Percentage increase in unit value* ... 13.7% 13.7% 21.5%
<CAPTION>
1994 TOP PLUS
Beginning unit value ................. 10.000000**
Reinvested capital gains and dividends 0.210108
Realized and unrealized gain ......... 0.273704
Contract charges ..................... -0.093684
Ending unit value .................... 10.390128
Percentage increase in unit value* ... 3.9%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
** Commenced operations May 1, 1994.
*** Commenced operations March 31, 1995. (continued)
<PAGE> 40
SCHEDULE 1 (CONTINUED)
OHIO NATIONAL VARIABLE ACCOUNT A
SCHEDULES OF CHANGES IN UNIT VALUES
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
SMALL CAP SUBACCOUNT A
----------------------
1995 TOP I TOP II TOP PLUS
<S> <C> <C> <C>
Beginning unit value ................. 10.000000*** 10.000000*** 12.053440
Reinvested capital gains and dividends 0.031849 0.031767 0.038861
Realized and unrealized gain ......... 2.324070 2.300361 3.927705
Contract charges ..................... -0.154646 -0.130855 -0.130938
Ending unit value .................... 12.201273 12.201273 15.889068
Percentage increase in unit value* ... 22.0% 22.0% 31.8%
<CAPTION>
1994 TOP PLUS
Beginning unit value ................. 10.000000**
Reinvested capital gains and dividends 0.231663
Realized and unrealized gain ......... 1.927952
Contract charges ..................... -0.106175
Ending unit value .................... 12.053440
Percentage increase in unit value* ... 20.5%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
** Commenced operations May 1, 1994.
*** Commenced operations March 31, 1995.
<TABLE>
<CAPTION>
GLOBAL CONTRARIAN SUBACCOUNT A
------------------------------
1995 TOP II TOP PLUS
<S> <C> <C>
Beginning unit value ................. 10.000000*** 10.000000**
Reinvested capital gains and dividends 0.041881 0.044544
Realized and unrealized gain ......... 0.193692 0.867169
Contract charges ..................... -0.110071 -0.095710
Ending unit value .................... 10.125502 10.816003
Percentage increase in unit value* ... 1.3% 8.2%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
** Commenced operations March 31, 1995.
*** Commenced operations October 2, 1995.
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH SUBACCOUNT A
------------------------------
1995 TOP II TOP PLUS
<S> <C> <C>
Beginning unit value ................. 10.000000*** 10.000000**
Reinvested capital gains and dividends 0.485110 0.560965
Realized and unrealized gain ......... 0.129655 2.158245
Contract charges ..................... -0.115390 -0.109198
Ending unit value .................... 10.499375 12.610012
Percentage increase in unit value* ... 5.0% 26.1%
</TABLE>
* An annualized rate of return cannot be determined as contract charges do
not include the contract charges discussed in note (5).
** Commenced operations March 31, 1995.
*** Commenced operations October 2, 1995.
See accompanying notes to the financial statements.
<PAGE> 41
[KPMG LETTERHEAD]
Independent Auditors' Report
----------------------------
The Board of Directors
The Ohio National Life Insurance Company:
We have audited the accompanying consolidated balance sheets of The Ohio
National Life Insurance Company and subsidiaries as of December 31, 1995 and
1994, and the related consolidated statements of income, equity and cash flows
for each of the years in the three-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Ohio National
Life Insurance Company and subsidiaries as of December 31, 1995 and 1994, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1995, in conformity generally accepted
accounting principles.
As discussed in Note 3, the Company adopted the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No.
120, Accounting and Reporting by Mutual Life Insurance Enterprises and
Insurance Enterprises for Certain Long-Duration Participating Contracts, in
1995.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
February 9, 1996
-14-
<PAGE> 42
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1995 and 1994
(000's omitted)
<TABLE>
<CAPTION>
Assets 1995 1994
------ ---- ----
<S> <C> <C>
Investments (notes 5, 9 and 10):
Securities available-for-sale, at fair value:
Fixed maturities $ 2,547,763 1,096,992
Equity securities 71,301 55,981
Fixed maturities held-to-maturity, at amortized cost 672,372 1,636,873
Mortgage loans on real estate, net 898,099 767,691
Real estate, net 41,429 52,076
Policy loans 148,077 142,934
Other long-term investments 40,702 36,075
Short-term investments 61,173 41,947
------------ -----------
4,480,916 3,830,569
Cash 8,385 9,399
Accrued investment income 63,128 58,151
Deferred policy acquisition costs 193,375 234,360
Reinsurance recoverable 67,648 50,598
Other assets 25,518 23,517
Assets held in Separate Accounts 453,405 307,373
------------ -----------
$ 5,292,375 4,513,967
============ ===========
Liabilities and Equity
----------------------
Future policy benefits and claims (note 6) $ 4,039,611 3,613,422
Policyholders' dividend accumulations 64,627 65,584
Other policyholder funds 15,080 14,338
Note payable (net of unamortized discount of $261 in 1995
and $292 in 1994) (note 7) 49,739 49,708
Accrued Federal income tax (note 8):
Current 21,649 11,561
Deferred 62,920 25,900
Other liabilities 103,182 93,987
Liabilities related to Separate Accounts 441,124 299,085
------------ -----------
Total liabilities 4,797,932 4,173,585
------------ -----------
Equity (notes 3, 4 and 13):
Unrealized gains (losses) on securities available-for-sale, net 85,844 (29,300)
Retained earnings 408,599 369,682
------------ -----------
Total equity 494,443 340,382
------------ -----------
Commitments and contingencies (notes 10 and 15)
$ 5,292,375 4,513,967
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 43
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 1995, 1994 and 1993
(000's omitted)
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues (note 16):
Traditional life insurance premiums $ 104,514 99,423 94,703
Accident and health insurance premiums 22,455 22,475 21,866
Annuity premium and charges 25,975 21,409 22,099
Universal life and investment product policy
charges 38,331 33,733 28,680
Net investment income (note 5) 355,027 330,435 321,197
Other income 8,150 6,346 3,927
Net realized (loss) gain on investments (note 5) (2,751) (3,509) 20,068
------- ------- -------
551,701 510,312 512,540
------- ------- -------
Benefits and expenses:
Benefits and claims 373,108 350,742 345,104
Provision for policyholders' dividends on
participating policies (note 13) 23,047 23,590 24,490
Amortization of deferred policy acquisition costs 21,471 16,622 13,973
Other operating costs and expenses 70,255 68,639 65,205
------- ------- -------
487,881 459,593 448,772
------- ------- -------
Income before Federal income tax and
cumulative effect of change in
accounting principles (note 16) 63,820 50,719 63,768
------- ------- -------
Federal income tax (note 8):
Current expense 31,233 21,103 22,534
Deferred expense (benefit) (6,330) (1,445) 2,000
------- ------- -------
24,903 19,658 24,534
------- ------- -------
Income before cumulative effect of
change in accounting principles 38,917 31,061 39,234
------- ------- -------
Cumulative effect of change in accounting principles
(note 3) - - 150,689
------- ------- -------
Net income $ 38,917 31,061 189,923
======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 44
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Equity
Years ended December 31, 1995, 1994 and 1993
(000's omitted)
<TABLE>
<CAPTION>
Unrealized
gains (losses)
on securities
available- Retained Total
for-sale earnings equity
----------- ----------- -----------
<S> <C> <C> <C>
1993:
Balance, beginning of year $ 6,325 148,698 155,023
Net income - 189,923 189,923
Unrealized losses on equity securities, net of
deferred Federal income tax (426) - (426)
----------- ----------- -----------
Balance, end of year $ 5,899 338,621 344,520
=========== =========== ===========
1994:
Balance, beginning of year $ 5,899 338,621 344,520
Net income - 31,061 31,061
Adjustment for change in accounting for certain
investment in debt and equity securities, net of
adjustment to deferred policy acquisition costs
and deferred Federal income tax (note 3) 40,219 - 40,219
Unrealized loss on securities available-for- sale,
net of adjustment to deferred policy
acquisition costs and deferred Federal
income tax (75,418) - (75,418)
----------- ----------- -----------
Balance, end of year $ (29,300) 369,682 340,382
=========== =========== ===========
1995:
Balance, beginning of year $ (29,300) 369,682 340,382
Net income - 38,917 38,917
Unrealized gain on securities available-for-sale,
net of adjustment to deferred policy acquisition
costs and deferred Federal income taxes 115,144 - 115,144
----------- ----------- -----------
Balance, end of year $ 85,844 408,599 494,443
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 45
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
(000's omitted)
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net Income $ 38,917 31,061 189,923
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principles - - (150,689)
Capitalization of deferred policy acquisition costs (41,403) (38,172) (36,082)
Amortization of deferred policy acquisition costs 21,471 16,622 13,973
Amortization and depreciation 1,342 1,329 501
Realized losses (gains) on invested assets, net (3,077) 3,582 (18,932)
Deferred Federal income tax (benefit) (9,521) 1,820 1,867
(Increase) decrease in accrued investment income (4,977) (6,205) 979
(Increase) decrease in other assets (19,051) (11,899) 4,166
Increase in policyholder account balances 52,265 44,722 160,276
(Decrease) increase in policyholders' dividend
accumulations and other funds (215) (1,284) 2,409
Increase (decrease) in current Federal income tax payable 10,088 3,575 (5,160)
Increase in other liabilities 9,126 17,444 11,164
Other, net 3,567 315 (11,928)
--------- --------- ---------
Net cash provided by operating activities 58,532 62,910 162,467
--------- --------- ---------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 83,956 108,056 -
Proceeds from sale of debt securities available-for-sale 46,372 16,717 -
Proceeds from sale of equity securities 7,245 6,545 15,871
Proceeds from maturity of fixed maturities held-to-maturity 102,565 101,368 364,258
Proceeds from sale of fixed maturities held-to-maturity - - 225,469
Proceeds from repayment of mortgage loans on real estate 93,714 128,077 76,665
Proceeds from sale of real estate 15,791 6,634 3,611
Proceeds from repayment of policy loans and sale of
other invested assets 14,003 14,649 25,779
Cost of debt securities available-for-sale acquired (281,828) (164,757) -
Cost of equity securities acquired (12,258) (11,326) (25,582)
Cost of fixed maturities held-to-maturity acquired (226,541) (376,723) (763,881)
Cost of mortgage loans on real estate acquired (233,003) (109,163) (41,409)
Cost of real estate acquired (1,283) (4,996) (4,452)
Policy loans issued and other invested assets acquired (23,046) (19,455) (26,463)
--------- --------- ---------
Net cash used in investing activities (414,313) (304,374) (150,134)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from note issue - 49,708 -
Increase in universal life and investment product
account balances 957,776 663,604 723,326
Decrease in universal life and investment product
account balances (583,852) (684,522) (532,039)
Other, net 69 64 -
--------- --------- ---------
Net cash provided by financing activities 373,993 28,854 191,287
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents 18,212 (212,610) 203,620
Cash and cash equivalents, beginning of year 51,346 263,956 60,336
--------- --------- ---------
Cash and cash equivalents, end of year $ 69,558 51,346 263,956
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 46
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1995, 1994 and 1993
(000's omitted)
(1) ORGANIZATION, CONSOLIDATION POLICY AND BUSINESS DESCRIPTION
(a) ORGANIZATION AND CONSOLIDATION POLICY
The Ohio National Life Insurance Company (ONLIC) is a mutual life
insurance company. Ohio National Life Assurance Corporation
(ONLAC) is a wholly-owned stock life insurance subsidiary
included in the consolidated financial statements. The
Company's other wholly-owned subsidiaries are not life
insurance enterprises and are included in the consolidated
financial statements on an equity basis. These
non-insurance subsidiaries are not material to the Company's
consolidated results of operations or financial position.
The consolidated financial statements also include The
Pennsylvania National Life Insurance Company (PNLIC), a
former wholly-owned subsidiary. PNLIC was purchased in
July 1993 for $16 million and on the date of acquisition
assets totaled $150 million and equity was $9.7 million.
On July 1, 1994, assets of $4.6 million and all outstanding
PNLIC common stock plus paid-in capital and surplus totaling
$4.6 million were sold to an unrelated party for $5 million.
All of the remaining assets, liabilities and obligations of
PNLIC were transferred to ONLAC.
ONLIC and its subsidiaries are collectively referred to as the
"Company".
(b) BUSINESS DESCRIPTION
ONLIC and ONLAC are life and health insurers licensed in 46 states
and the District of Columbia. The Company offers a full
range of life, health and annuity products through exclusive
agents and other distribution channels and is subject to
competition from other insurers throughout the United
States. The Company is subject to regulation by the
Insurance Departments of states in which it is licensed and
undergoes periodic examinations by those departments.
The following is a description of the most significant risks
facing life and health insurers and how the Company
mitigates those risks:
lEGAL/REGULATORY RISK is the risk that changes in the legal
or regulatory environment in which an insurer operates will
create additional expenses not anticipated by the insurer in
pricing its products. That is, regulatory initiatives
designed to reduce insurer profits, new legal theories or
insurance company
(Continued)
-19-
<PAGE> 47
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(1) ORGANIZATION, CONSOLIDATION POLICY AND BUSINESS DESCRIPTION
(b) BUSINESS DESCRIPTION, CONTINUED
insolvencies through guaranty fund assessments may create
costs for the insurer beyond those recorded in the
consolidated financial statements. The Company mitigates
this risk by offering a wide range of product and by
operating throughout the United States, thus reducing its
exposure to any single product or jurisdiction, and also by
employing underwriting practices which identify and minimize
the adverse impact of this risk.
CREDIT RISK is that risk that issuers of securities owned by
the Company or mortgagors on mortgage loans on real estate
owned by the Company will default or that other parties,
including reinsurers, which owe the Company money, will not
pay. The Company minimizes this risk by adhering to a
conservative investment strategy, by maintaining sound
reinsurance and credit and collection policies and by
providing for any amounts deemed uncollectible.
INTEREST RATE RISK is the risk that interest rates will
change and cause a decrease in the value of an insurer's
investments. This change in rates may cause certain
interest-sensitive products to become uncompetitive or may
cause disintermediation. The Company mitigates this risk
by charging fees for non-conformance with certain policy
provisions, by offering products that transfer this risk to
the purchaser, and/or by attempting to match the maturity
schedule of its assets with the expected payouts of its
liabilities. To the extent that liabilities come due more
quickly than assets mature, an insurer would have to borrow
funds or sell assets prior to maturity and potentially
recognize a gain or loss.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Company that
materially affect financial reporting are summarized below. The
accompanying consolidated financial statements have been prepared
in accordance with generally accepted accounting principles (GAAP)
which differ from statutory accounting practices prescribed or
permitted by regulatory authorities. See Notes 3 and 4.
(Continued)
-20-
<PAGE> 48
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(a) VALUATION OF INVESTMENTS AND RELATED GAINS AND LOSSES
Prior to January 1, 1994, the Company classified fixed maturities
in accordance with the then existing accounting standards and,
accordingly, fixed maturity securities were carried at
amortized cost, adjusted for amortization of premium or
discount, since the Company had both the ability and intent to
hold those securities until maturity. Equity securities were
carried at fair value with the unrealized gains and losses,
net of deferred Federal income tax, reflected as a separate
component of equity.
In May 1993, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 115 -
Accounting for Certain Investments in Debt and Equity
Securities (SFAS 115). SFAS 115 requires fixed maturities and
equity securities to be classified as either held-to-maturity,
available-for-sale, or trading. The Company has no trading
securities. The Company adopted SFAS 115 as of January 1,
1994, with no effect on consolidated net income. See Note 3
regarding the effect on consolidated equity.
Fixed maturity securities are classified as held-to-maturity when
the Company has the positive intent and ability to hold the
securities to maturity and are stated at amortized cost.
Fixed maturity securities not classified as held-to-maturity
and all equity securities are classified as available-for-sale
and are stated at fair value, with the unrealized gains and
losses, net of adjustments to deferred policy acquisition
costs and deferred Federal income tax, reported as a separate
component of shareholder's equity that would have been
required as a charge or credit to operations had such
unrealized amounts been realized. The Company records
valuation allowances equal to deferred tax benefits resulting
from unrealized losses of investments.
Mortgage loans on real estate are carried at the unpaid principal
balance less valuation allowances. The Company provides
valuation allowances for impairments of mortgage loans on real
estate based on a review by portfolio managers. The
measurement of impaired loans is based on the present value of
expected future cash flows discounted at the loan's effective
interest rate or, as a practical expedient, at the fair value
of the collateral, if the loan is collateral dependent.
Loans in foreclosure and loans considered to be impaired as of
the balance sheet date are placed on non-accrual status and
written down to the fair value of the existing property to
derive a new cost basis. Cash receipts on non-accrual status
mortgage loans on real estate are included in interest income
in the period received.
(Continued)
-21-
<PAGE> 49
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(a) VALUATION OF INVESTMENTS AND RELATED GAINS AND LOSSES, CONTINUED
In May 1993, the FASB issued Statement of Financial Accounting
Standards No. 114 - Accounting by Creditors for Impairment of
a Loan (SFAS 114), which was amended by Statement of Financial
Accounting Standards No. 118 - Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosure, in
October 1994. These pronouncements require the measurement
of impaired loans be based on the present value of expected
future cash flows discounted at the loan's effective interest
rate or, as a practical expedient, at the loan's observable
market price or the fair value of the collateral if the loan
is collateral dependent. The impact on the consolidated
financial statements of adopting SFAS 114 and SFAS 118 in 1995
was not material.
Real estate is carried at cost less accumulated depreciation and
valuation allowances. Other long-term investments are carried
on the equity basis, adjusted for valuation allowances.
Realized gains and losses on the sale of investments are
determined on the basis of specific security identification.
Estimates for valuation allowances and other than temporary
declines are included in realized gains and losses on
investments.
(b) REVENUES AND BENEFITS
TRADITIONAL LIFE INSURANCE PRODUCTS
Traditional life insurance products include those products with
fixed and guaranteed premiums and benefits and consist
primarily of whole life, limited-payment life, term life and
certain annuities with life contingencies. Premiums for
traditional life insurance products are recognized as revenue
when due and collected. Benefits and expenses are associated
with earned premiums so as to result in recognition of profits
over the life of the contract. This association is
accomplished by the provision for future policy benefits and
the deferral and amortization of policy acquisition costs.
UNIVERSAL LIFE AND INVESTMENT PRODUCTS
Universal life products include universal life, variable universal
life and other interest-sensitive life insurance policies.
Investment products consist primarily of individual and group
deferred annuities, annuities without life contingencies and
guaranteed investment contracts. Revenues for universal life
and investment products consist of net investment income and
cost of insurance, policy administration and surrender charges
that have been earned and assessed against policy account
balances during the period. Policy benefits and claims that
are charged to expense include benefits and claims incurred in
the period in excess of related policy account balances,
maintenance costs and interest credited to policy account
balances.
(Continued)
-22-
<PAGE> 50
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(b) REVENUES AND BENEFITS, CONTINUED
ACCIDENT AND HEALTH INSURANCE
Accident and health insurance premiums are recognized as revenue
in accordance with the terms of the policies. Policy claims
are charged to expense in the period that the claims are
incurred.
(c) DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business, principally commissions,
certain expenses of the policy issue and underwriting
department and certain variable agency expenses have been
deferred. For traditional non-participating life insurance
products, these deferred acquisition costs are predominantly
being amortized with interest over the premium paying period
of the related policies in proportion to premium revenue.
Such anticipated premium revenue was estimated using the same
assumptions as were used for computing liabilities for future
policy benefits. For participating life insurance products,
deferred policy acquisition costs are being amortized in
proportion to gross margins of the related policies. Gross
margins are determined for each issue year and are equal to
premiums plus investment income less death claims, surrender
benefits, administrative costs, expected policyholder
dividends, and the increase in reserve for future policy
benefits. For universal life and investment products,
deferred policy acquisition costs are being amortized with
interest over the lives of the policies in relation to the
present value of the estimated future gross profits from
projected interest margins, cost of insurance, policy
administration and surrender charges. Beginning January 1,
1994, deferred policy acquisition costs for participating life
and universal life business are adjusted to reflect the impact
of unrealized gains and losses on fixed maturity securities
available-for-sale (see Note 2(a)).
(d) SEPARATE ACCOUNTS
Separate Account assets and liabilities represent contractholders'
funds which have been segregated into accounts with specific
investment objectives. The investment income and gains or
losses of these accounts accrue directly to the
contractholders. The activity of the Separate Accounts is not
reflected in the consolidated statements of income and cash
flows except for the fees the Company receives for
administrative services and risks assumed. Amounts provided
by the Company to establish Separate Account investment
portfolios, seed money, are not included in Separate Account
liabilities.
(Continued)
-23-
<PAGE> 51
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(e) FUTURE POLICY BENEFITS
Future policy benefits for traditional life have been calculated
using a net level premium method based on estimates of
mortality, morbidity, investment yields and withdrawals which
were used or which were being experienced at the time the
policies were issued, rather than the assumptions prescribed
by state regulatory authorities (see Note 6).
Future policy benefits for annuity policies in the accumulation
phase, universal life and variable universal life policies
have been calculated based on participants' aggregate account
values.
(f) PARTICIPATING BUSINESS
Participating business represents approximately 43% of the
Company's ordinary life insurance in force in 1995. In 1994
and 1993 participating business represented approximately 45%
and 46% of the Company's ordinary life insurance in force.
The provision for policyholder dividends is based on current
dividend scales. Future dividends are provided for in future
policy benefits based on dividend scales in effect at December
31, 1995.
(g) REINSURANCE CEDED
Reinsurance premiums ceded and reinsurance recoveries on benefits
and claims incurred are deducted from the respective income
and expense accounts. Assets and liabilities related to
reinsurance ceded are reported on a gross basis.
(h) FEDERAL INCOME TAX
The Company files a consolidated Federal income tax return. The
Company uses the asset and liability method of accounting for
income tax. Under the asset and liability method, deferred
tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. Under this method, the
effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes
the enactment date. Valuation allowances are established when
necessary to reduce the deferred tax assets to the amounts
expected to be realized.
(Continued)
-24-
<PAGE> 52
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
(i) USE OF ESTIMATES
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities as of the date of the
consolidated financial statements and revenues and expenses
for the reporting period. Actual results could differ
significantly from those estimates.
The estimates susceptible to significant change are those used in
determining the liability for future policy benefits and
claims and contingencies, and those used in determining
valuation allowances for mortgage loans on real estate and
real estate. Although some variability is inherent in these
estimates, management believes the amounts provided are
adequate.
(j) CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the
Company considers all short-term investments with original
maturities of three months or less to be cash equivalents.
(3) CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 120, Accounting and Reporting by Mutual
Life Insurance Enterprises and Insurance Enterprises for Certain
Long-Duration Participating Contracts (SFAS 120), thereby adopting
Interpretation No. 40, Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and Other
Enterprises (the Interpretation). The Interpretation clarified
that enterprises, including mutual life insurance enterprises,
that issue financial statements described as prepared "in
conformity with generally accepted accounting principles" are
required to apply all applicable authoritative accounting
pronouncements in preparing those statements. SFAS 120 extended
the applicability of certain SFASs to mutual life insurance
enterprises, as well as extended the effective date of the
Interpretation. Prior to the adoption of SFAS 120 and the
Interpretation, the Company, consistent with industry practice,
issued financial statements in accordance with accounting
practices prescribed or permitted by the Department of Insurance
of the State of Ohio (statutory accounting), which were considered
generally accepted accounting principles for mutual life insurance
enterprises. The Company elected to early adopt SFAS 120 and the
Interpretation in 1995 and has restated the consolidated financial
statement amounts for 1994 and 1993. As a result, net income was
increased by $150,689 on January 1, 1993.
The Company's significant accounting policies adopted in connection with
its implementation of SFAS 120 and the Interpretation are
described in Note 2. Those policies differ in some respects from
the statutory accounting previously followed by the Company as
follows:
(Continued)
-25-
<PAGE> 53
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(3) CHANGES IN ACCOUNTING PRINCIPLES, CONTINUED
(1) the costs related to acquiring business, principally
commissions and certain policy issue expenses, are amortized over
the period benefited rather than charged to income in the year
incurred; (2) future policy benefit reserves are based on
anticipated Company experience for lapses, mortality and
investment yield, rather than statutory mortality and interest
requirements, without consideration of withdrawals; (3) premiums
for universal life contracts and investment contracts are recorded
as deposits on the balance sheet; revenues consist of investment
income and contract charges net of interest credited, death
benefits and administrative costs; (4) statutory required balances
such as "nonadmitted assets", asset valuation reserve and interest
maintenance reserve are not recognized; (5) bonds are carried at
amortized cost or fair value depending on the Company's intent to
hold or sell such securities, rather than at amortized cost, (6)
assets and liabilities are reported gross of reinsurance balances;
(7) deferred Federal income taxes are provided for temporary
differences between financial statement carrying amounts of assets
and liabilities and their related tax basis; (8) long-term debt
with provisions restricting interest payments and principal
repayments to those approved by the state insurance department
(surplus notes) are carried as notes payable and not as a separate
component of surplus; and (9) other costs, including those related
to postretirement benefits, pensions, and compensated absences are
charged as expenses in a different manner.
The cumulative effect on equity at January 1, 1993 of adopting SFAS 120
and the Interpretation, is recognized in the accompanying
consolidated statement of income, and the significant components
are as follows:
<TABLE>
<S> <C>
Deferred policy acquisition costs $ 183,730
Asset valuation reserve 29,791
Interest maintenance reserve 7,358
Future policy benefits (37,977)
Deferred Federal income tax (21,600)
Other, net (10,613)
---------
$ 150,689
=========
</TABLE>
The effect of recording the unrealized gain on securities, previously
carried at amortized cost, designated as available-for-sale at
January 1, 1994, and the related deferred acquisition costs and
deferred Federal income tax effect is as follows:
<TABLE>
<S> <C>
Excess of fair value over amortized cost of fixed
maturity securities available-for-sale $ 74,329
Deferred Federal income tax (21,600)
Policy acquisition costs (12,510)
---------
$ 40,219
=========
</TABLE>
(Continued)
-26-
<PAGE> 54
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) BASIS OF PRESENTATION
The consolidated financial statements have been prepared in accordance
with GAAP. Annual Statements on ONLIC and ONLAC, filed with the
Department of Insurance of the State of Ohio, are prepared on the
basis of accounting practices prescribed or permitted by such
regulatory authorities. Prescribed statutory accounting
practices include a variety of publications of the National
Association of Insurance Commissioners (NAIC), as well as state
laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices
not so prescribed. The Company has no material permitted
statutory accounting practices.
The following reconciles the statutory net income of ONLIC as reported to
regulatory authorities to the net income as shown in the
accompanying consolidated financial statements:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory net income $ 24,468 23,972 18,555
Adjustments to restate to the basis of GAAP:
Consolidating statutory net income of
subsidiaries 10,161 2,528 3,836
Increase in deferred policy acquisition
costs, net 19,485 21,606 18,055
Future policy benefits (10,723) (7,739) (11,797)
Deferred Federal income tax (expense)
benefit 6,330 1,445 (2,000)
Valuation allowances and other than
temporary declines accounted for
directly in surplus (5,829) 74 1,136
Interest maintenance reserve (208) (119) 15,246
Cumulative effect of changes in
accounting, net - - 150,689
Other, net (4,767) (10,706) (3,797)
--------- ------ -------
Net income per accompanying
consolidated statements
of income $ 38,917 31,061 189,923
======== ====== =======
</TABLE>
(Continued)
-27-
<PAGE> 55
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(4) BASIS OF PRESENTATION, CONTINUED
The following reconciles the statutory capital and surplus of ONLIC as
reported to regulatory authorities to the equity as shown in the
accompanying consolidated financial statements:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory capital and surplus $ 243,248 231,973 167,887
Add (deduct) cumulative effect of adjustments:
Deferred policy acquisition costs 193,375 234,360 201,784
Asset valuation reserve 68,756 43,589 40,606
Interest maintenance reserve 21,989 22,197 21,113
Future policy benefits (69,918) (54,148) (49,562)
Deferred Federal income tax (62,920) (25,900) (26,900)
Cumulative effect of change in accounting
for investments - 74,329 -
Difference between amortized cost and fair
value of fixed maturity securities
available-for-sale, gross 166,086 (117,351) -
Surplus note (49,739) (49,708) -
Other, net (16,434) (18,959) (10,408)
------- ------- -------
Equity per accompanying
consolidated balance sheets $ 494,443 340,382 344,520
======= ======= =======
</TABLE>
(5) INVESTMENTS
An analysis of investment income by investment type follows for the years
ended December 31:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Gross investment income:
Securities available-for-sale:
Fixed maturities $ 105,928 97,542 -
Equity securities 3,710 3,211 3,191
Fixed maturities held-to-maturity 149,465 131,420 217,150
Mortgage loans on real estate 76,608 75,763 81,239
Real estate 7,771 6,998 4,710
Policy loans 9,096 9,061 8,510
Short-term 3,779 3,312 3,195
Other 6,808 8,035 6,922
------- ------- -------
Total investment income 363,165 335,342 324,917
Less investment expenses 8,138 4,907 3,720
------- ------- -------
Net investment income $ 355,027 330,435 321,197
======= ======= =======
</TABLE>
(Continued)
-28-
<PAGE> 56
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) INVESTMENTS, CONTINUED
An analysis of realized gains (losses) on investments by investment type
follows for the years ended December 31:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Realized on disposition of investments:
Securities available-for-sale:
Fixed maturities $ (1,062) (5,475) -
Equity securities 459 2,041 1,772
Fixed maturities, held to maturity 2,319 1,613 22,272
Mortgage loans on real estate 548 (391) (1,749)
Real estate and other 813 (1,370) (3,363)
------ ------ ------
3,077 (3,582) 18,932
Valuation allowances:
Mortgage loans on real estate (6,462) 89 (121)
Real estate and other 634 (16) 1,257
------ ------ ------
(5,828) 73 1,136
------ ------ ------
Net realized (loss) gain on investments $ (2,751) (3,509) 20,068
====== ====== ======
</TABLE>
The amortized cost and estimated fair value of securities
available-for-sale and fixed maturities held-to-maturity were as
follows as of December 31, 1995:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE-FOR-SALE
Fixed maturities:
U.S. Treasury securities
and obligations of
U.S. government
operations and agencies $ 223,959 12,083 (193) 235,849
Obligations of states and
political subdivisions 28,938 1,612 (166) 30,384
Debt securities issued by
foreign governments 8,078 2,657 - 10,735
Corporate securities 1,631,389 139,750 (6,902) 1,764,237
Mortgage-backed securities 489,313 19,402 (2,157) 506,558
--------- -------- -------- ---------
Total fixed maturities $2,381,677 175,504 (9,418) 2,547,763
========= ======== ======== =========
Equity securities $ 51,482 19,819 - 71,301
========= ======== ======== =========
</TABLE>
(Continued)
-29-
<PAGE> 57
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) INVESTMENTS, CONTINUED
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
--------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Fixed maturity securities held-to-
----------------------------------
maturity
--------
Obligations of states and political
subdivisions $ 6,043 137 - 6,180
Corporate securities 660,466 93,508 (431) 753,543
Mortgage-backed securities 5,863 471 - 6,334
--------- -------- ----- -------
Total fixed maturities $ 672,372 94,116 (431) 766,057
========= ======== ===== =======
</TABLE>
The amortized cost and estimated fair value of securities
available-for-sale and fixed maturities held-to-maturity were as
follows as of December 31, 1994:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
--------- -------- ---------- ----------
<S> <C> <C> <C> <C>
SECURITIES AVAILABLE-FOR-SALE
Fixed maturities:
U.S. Treasury securities
and obligations of
U.S. government
operations and agencies $ 252,247 1,823 (18,706) 235,364
Obligations of states and
political subdivisions 27,003 12 (1,674) 25,341
Debt securities issued by
foreign governments 8,078 1,107 - 9,185
Corporate securities 688,876 13,696 (25,702) 676,870
Mortgage-backed securities 163,810 500 (14,078) 150,232
--------- -------- ---------- ----------
Total fixed maturities $ 1,140,014 17,138 (60,160) 1,096,992
========= ====== ====== =========
Equity securities $ 49,208 9,024 (2,251) 55,981
========= ====== ====== =========
FIXED MATURITY SECURITIES HELD-TO-MATURITY
Corporate securities $ 1,510,744 27,988 (79,187) 1,459,545
Mortgage-backed securities 126,129 1,925 (5,067) 122,987
--------- ------ ------ ---------
Total fixed maturities $ 1,636,873 29,913 (84,254) 1,582,532
========= ====== ====== =========
</TABLE>
(Continued)
-30-
<PAGE> 58
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) INVESTMENTS, CONTINUED
As permitted by the FASB's Special Report, A Guide to Implementation of
Statement 115 on Accounting for Certain Investments in Debt and
Equity Securities, issued in November, 1995, the Company
transferred a part of its fixed maturity securities previously
classified as held-to-maturity to available-for-sale. As of
December 29, 1995, the date of transfer, the reclassified fixed
maturity securities had an amortized cost value of $1,112,685,
resulting in a gross unrealized gain on available-for-sale
securities of $83,011.
The components of unrealized gains (losses) on securities
available-for-sale, net, were as follows for the years ended
December 31:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Gross unrealized gain (loss) $ 185,905 (36,249)
Adjustment to deferred policy acquisition costs (49,500) 10,970
Deferred federal income tax (50,561) (4,021)
---------- ----------
$ 85,844 (29,300)
========== ==========
</TABLE>
The net unrealized gain on securities available for sale includes net
unrealized gains on equity securities of $10,539 in 1995 ($4,118
in 1994) and net unrealized gains on fixed maturities (net SFAS
115 and related transactions) of $75,305 in 1995 (net unrealized
loss of $33,418 in 1994).
An analysis of the change in gross unrealized gains (losses) on
securities available-for-sale and fixed maturities
held-to-maturity follows for the years ended December 31:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturities $ 209,108 (43,022) -
Equity securities 13,046 (11,873) 8,776
Fixed maturities held-to-maturity 148,026 (268,693) 71,901
</TABLE>
(Continued)
-31-
<PAGE> 59
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) INVESTMENTS, CONTINUED
The amortized cost and estimated fair value of fixed maturity securities
available-for-sale and fixed maturity securities held-to- maturity
as of 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.
<TABLE>
<CAPTION>
Amortized Estimated
cost fair value
----------- ----------
<S> <C> <C>
Fixed maturity securities available-for-sale
--------------------------------------------
Due in one year or less $ 54,571 55,818
Due after one year through five years 220,827 235,281
Due after five years through ten years 757,753 810,150
Due after ten years 859,213 939,956
Mortgaged-backed securities 489,313 506,558
---------- ----------
$ 2,381,677 2,547,763
========== ==========
Fixed maturity securities held-to-maturity
------------------------------------------
Due in one year or less $ 275 276
Due after one year through five years 95,033 104,401
Due after five years through ten years 258,438 285,901
Due after ten years 312,763 369,145
Mortgage-backed securities 5,863 6,334
---------- ----------
$ 672,372 766,057
========== ==========
</TABLE>
Proceeds from the sale of securities available-for-sale during 1995 and
1994 were $46,372 and $16,717, respectively, while proceeds from
sales of investments in fixed maturity securities during 1993 were
$225,469. Gross gains of $510 ($52 in 1994 and $16,822 in 1993)
and gross losses of $2,293 ($34 in 1994 and $1,061 in 1993) were
realized on those sales.
Investments with an amortized cost of $6,064 and $5,132 as of December
1995 and 1994, respectively, were on deposit with various
regulatory agencies as required by law.
Real estate is presented at cost less accumulated depreciation of $19,518
in 1995 ($15,361 in 1994) and valuation allowances of $2,100 in
1995 ($2,734 in 1994).
The Company generally initiates foreclosure proceedings on all mortgage
loans on real estate delinquent sixty days. Foreclosures of
mortgage loans on real estate were $713 in 1995 and $4,463 in
1994. There were no other mortgage loans on real estate in
process of foreclosure or in-substance foreclosed as of December
31, 1995.
(Continued)
-32-
<PAGE> 60
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(5) INVESTMENTS, CONTINUED
Activity in the valuation account for mortgage loans on real estate is
summarized below for the years ended December 31:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Allowance, beginning of year $ 4,037 4,126
Additions charged to operations 6,463 1,692
Deductions for permanent impairments on
mortgage loans - (1,781)
-------- -------
$ 10,500 4,037
======== =======
</TABLE>
(6) FUTURE POLICY BENEFITS AND CLAIMS
The liability for future policy benefits for universal life insurance
policies and investment contracts (approximately 70% and 72% of
the total liability for future policy benefits as of December 31,
1995 and 1994, respectively) has been established based on
accumulated contract values without reduction for surrender
penalty provisions. The average interest rate credited on
investment product policies was 7.0%, 7.4% and 7.9% for the years
ended December 31, 1995, 1994 and 1993, respectively.
The liability for future policy benefits for traditional life policies
has been established based upon the net level premium method using
the following assumptions:
Interest rates: Interest rates vary as follows:
<TABLE>
<CAPTION>
Year of issue Interest Rate
------------- --------------
<S> <C>
1995 4 - 5.5%
1994 4 - 6.0%
1993 4 - 5.5%
1992 and prior 2.25% - 5.5%
</TABLE>
Withdrawals: Rates, which vary by issue age, type of
coverage and policy duration, are based on Company
experience
Mortality: Mortality and morbidity rates are based on
published tables, guaranteed in insurance
contracts.
(7) NOTE PAYABLE
On July 11, 1994, the Company issued $50,000,000, 8.875% surplus notes,
due July 15, 2004. The notes have been issued in accordance with
Section 3941.13 of the Ohio Revised Code. Principal repayments
and interest payments, scheduled semi-annually, must be approved
for payment by the Director of the Department of Insurance of the
State of Ohio. All issuance costs have been capitalized and will
be amortized over the terms of the notes.
(Continued)
-33-
<PAGE> 61
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(8) FEDERAL INCOME TAX
Prior to 1984, the Life Insurance Company Income Tax Act of 1959 as
amended by the Deficit Reduction Act of 1984 (DRA), permitted the
deferral from taxation of a portion of statutory income under
certain circumstances. In these situations, the deferred income
was accumulated in the Policyholders' Surplus Account (PSA).
Management considers the likelihood of distributions from the PSA
to be remote; therefore, no Federal income tax has been provided
for such distributions in the consolidated financial statements.
The DRA eliminated any additional deferrals to the PSA. Any
distributions from the PSA, however, will continue to be taxable
at the then current tax rate. The balance of the PSA is
approximately $5,257 as of December 31, 1995.
Total Federal income tax expense for the years ended December 31, 1995,
1994 and 1993 differs from the amount computed by applying the
U.S. Federal income tax rate to income before tax as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------------------- ------------------- --------------------
Amount % Amount % Amount %
--------- ----- --------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Computed (expected)
tax expense $ 22,337 35.0 17,752 35.0 22,319 35.0
Differential earnings 5,676 8.9 5,456 10.8 4,565 7.1
Dividends received
deduction and tax
exempt interest (1,585) (2.5) (1,680) (3.3) (1,618) (2.5)
Other, net (1,525) (2.4) (1,870) (3.7) (732) (1.1)
------- ----- ------ ----- ------ ----
$ 24,903 39.0 19,658 38.8 24,534 38.5
======= ===== ====== ===== ====== ====
</TABLE>
Total Federal income tax paid was $21,145, $17,527 and $27,825 during the
years ended December 31, 1995, 1994 and 1993, respectively.
The tax effects of temporary differences between the financial statement
carrying amounts and tax basis of assets and liabilities that give
rise to significant components of the net deferred tax liability
as of December 31, 1995 and 1994 relate to the following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax assets:
Future policy benefits $ 44,263 39,858
Fixed maturity securities - available-for-sale - 14,600
Mortgage loans on real estate 2,070 397
Other assets and other liabilities 12,633 10,654
------- ------
Total gross deferred tax assets
before valuation allowance 58,966 65,509
Valuation allowance - (14,600)
------- ------
Total gross deferred tax assets $ 58,966 50,909
------- ------
</TABLE>
(Continued)
-34-
<PAGE> 62
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(8) FEDERAL INCOME TAX, CONTINUED
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax liabilities:
Fixed maturity securities available-for-sale $ 59,300 -
Deferred policy acquisition costs 52,683 69,917
Fixed maturities, equity securities and other
long-term investments 7,770 3,161
Other 2,133 3,731
---------- --------
Total gross deferred tax liabilities 121,886 76,809
---------- --------
Net deferred tax liability $ 62,920 25,900
========== ========
</TABLE>
In assessing the realization of deferred tax assets, management considers
whether it is more likely than not that the deferred tax assets
will be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become
deductible. Management considers primarily the scheduled
reversal of deferred tax liabilities and tax planning strategies
in making this assessment and believes it is more likely than not
the Company will realize the benefits of the remaining deductible
differences at December 31, 1995 and 1994.
(9) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, Disclosures about
Fair Value of Financial Instruments (SFAS 107) requires disclosure
of fair value information about existing on and off-balance sheet
financial instruments. In cases where quoted market prices are
not available, fair value is based on estimates using present
value or other valuation techniques.
These techniques are significantly affected by the assumptions used,
including the discount rate and estimates of future cash flows.
Although fair value estimates are calculated using assumptions
that management believes are appropriate, changes in assumptions
could cause these estimates to vary materially. SFAS 107
excludes certain assets and liabilities, including insurance
contracts, other than policies such as annuities that are
classified as investment contracts from its disclosure
requirements. Accordingly, the aggregate fair value amounts
presented do not represent the underlying value of the Company.
The tax ramifications of the related unrealized gains and losses can have
a significant effect on fair value estimates and have not been
considered in the estimates.
(Continued)
-35-
<PAGE> 63
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(9) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED
The following methods and assumptions were used by the Company in
estimating its fair value disclosures:
CASH, SHORT-TERM INVESTMENTS AND POLICY LOANS
The carrying amount reported in the balance sheets for these
instruments approximate their fair value.
INVESTMENT SECURITIES
Fair value for fixed maturity securities is based on quoted
market prices, where available. For fixed maturity securities not
actively traded, fair value is estimated using values obtained from
independent pricing services, or, in the case of private placements,
is estimated by discounting expected future cash flows using a current
market rate applicable to the yield, credit quality and maturity of
the investments. The fair value for equity securities is based on
quoted market prices.
SEPARATE ACCOUNT ASSETS AND LIABILITIES
The fair value of assets held in Separate Accounts is based on
quoted market prices. The fair value of liabilities related to
Separate Accounts is the accumulated contract values in the Separate
Account portfolios.
MORTGAGE LOANS ON REAL ESTATE
The fair value for mortgage loans on real estate is estimated
using discounted cash flow analyses, using interest rates currently
being offered for similar loans to borrowers with similar credit
ratings. Loans with similar characteristics are aggregated for
purposes of the calculations. Fair value for mortgages in default is
valued at the estimated fair value of the underlying collateral.
INVESTMENT CONTRACTS
Fair value for the Company's liabilities under investment type
contracts is disclosed using two methods. For investment contracts
without defined maturities, fair value is the amount payable on
demand. For investment contracts with known or determined maturities,
fair value is estimated using discounted cash flow analysis. Interest
rates used are similar to currently offered contracts with maturities
consistent with those remaining for the contracts being valued.
(Continued)
-36-
<PAGE> 64
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(9) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED
NOTE PAYABLE
The fair value for the note payable was determined by discounting the
scheduled cash flows of the note using a market rate applicable
to the yield, credit quality and maturity of a similar debt instrument.
POLICYHOLDERS' DIVIDEND ACCUMULATION AND OTHER POLICYHOLDER FUNDS
The carrying amount reported in the consolidated balance sheets for
these instruments approximates their fair value.
The carrying amount and estimated fair value of financial instruments
subject to SFAS 107 were as follows as of December 31:
<TABLE>
<CAPTION>
1995 1994
--------------------------- --------------------------
Carrying Estimated Carrying Estimated
amount fair value amount fair value
--------- ---------- -------- ------------
<S> <C> <C> <C> <C>
Assets
------
Investments:
Securities available-for-sale:
Fixed maturities $ 2,547,763 2,547,763 1,096,992 1,096,992
Equity securities 71,301 71,301 55,981 55,981
Fixed maturities held-to-
maturity 672,372 766,057 1,636,873 1,582,532
Mortgage loans on real estate 898,099 976,066 767,691 756,740
Policy loans 148,077 148,077 142,934 142,934
Short-term investments 61,173 61,173 41,947 41,947
Cash 8,385 8,385 9,399 9,399
Assets held in Separate Accounts 453,405 453,405 307,373 307,373
Liabilities
-----------
Guaranteed investment contracts $ 964,999 982,652 861,006 835,974
Individual deferred annuity
contracts 1,078,714 1,018,577 912,049 909,337
Other annuity contracts 838,691 874,450 778,931 738,181
Note payable 49,739 56,359 49,708 48,549
Dividend accumulations and
other policyholder funds 79,707 79,707 79,922 79,922
Liabilities related to Separate
Accounts 441,124 441,124 299,085 299,085
</TABLE>
(Continued)
-37-
<PAGE> 65
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(10) ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE
(a) FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company is a party to financial instruments with
off-balance-sheet risk in a normal course of business through
management of its investment portfolio. The Company had
outstanding commitments to fund mortgage loans, bonds and
venture capital partnerships of approximately $195 million and
$112 million at December 31, 1995 and 1994, respectively.
These commitments involve, in varying degrees, elements of
credit and market risk in excess of amounts recognized in the
financial statements. The credit risk of all financial
instruments, whether on- or off-balance sheet, is controlled
through credit approvals, limits, and monitoring procedures.
(b) SIGNIFICANT CONCENTRATIONS OF CREDIT RISK
Mortgage loans collateralized by the underlying properties.
Collateral must meet or exceed 125% of the loan at the time
the loan is made. The Company grants mainly commercial
mortgage loans to customers throughout the United States. The
Company has a diversified loan portfolio. The summary below
depicts loan exposure of remaining principal balances by
geographic area and by type at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Mortgage assets by state
------------------------
California $ 132,993 135,222
Michigan 87,209 85,918
Texas 74,178 66,886
Ohio 66,586 63,356
Florida 57,768 53,925
Nebraska 54,080 -
All others (none greater than $50 million) 435,785 366,421
-------- --------
908,599 771,728
Less valuation allowances 10,500 4,037
-------- --------
Total mortgage loans on real estate, net $ 898,099 767,691
======== ========
</TABLE>
(Continued)
-38-
<PAGE> 66
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(10) ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURE, CONTINUED
(b) SIGNIFICANT CONCENTRATIONS OF CREDIT RISK, CONTINUED
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Mortgage assets by type
-----------------------
Office $ 259,354 221,278
Retail 229,226 188,977
Apartment 168,370 131,620
Industrial 150,376 145,974
Other 101,273 83,879
-------- --------
908,599 771,728
Less valuation allowances 10,500 4,037
-------- --------
Total mortgage loans on real
estate, net $ 898,099 767,691
======== ========
</TABLE>
(11) PENSION PLANS
EMPLOYEE PLAN
ONLIC participates in a pension plan covering all employees who have
completed at least one thousand hours of service within a twelve-
month period and who have met certain age requirements. Plan
contributions are invested in a group annuity contract of ONLIC.
Benefits are based upon the highest average annual salary of any
five consecutive years of the last ten years of service.
The net periodic pension cost for the plan as a whole for the years ended
December 31, 1995, 1994 and 1993 follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost (benefits earned
during the period) $ 1,129 1,034 1,078
Interest cost on projected
benefit obligations 1,730 1,637 1,547
Actual return on plan assets (2,811) (601) (1,813)
Net amortization and deferral 1,294 (905) 379
-------- -------- --------
Net periodic pension cost $ 1,342 1,165 1,191
======== ======== ========
</TABLE>
(Continued)
-39-
<PAGE> 67
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(11) PENSION PLANS, CONTINUED
EMPLOYEE PLAN, CONTINUED
Basis for measurements, net periodic pension cost:
<TABLE>
<S> <C> <C> <C>
Weighted average discount rate 6.80% 6.80% 6.30%
Rate of increase in future
compensation levels 5.00% 5.00% 5.00%
Expected long-term rate of
return on plan assets 7.25% 7.25% 7.50%
</TABLE>
Information regarding the funded status of the plan as a whole as of
December 31, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Accumulated benefit obligation:
Vested $ 16,037 14,354
Nonvested 247 169
-------- -------
$ 16,284 14,523
======== ========
Projected benefit obligation for services
rendered to date 27,389 21,644
Plan assets at fair value 22,625 19,764
-------- -------
Plan assets less projected
benefit obligation (4,764) (1,880)
Unrecognized prior service cost - -
Unrecognized net losses 6,471 3,509
Unrecognized net assets at January 1, 1987 (2,612) (2,850)
-------- -------
Net accrued pension expense $ (905) (1,221)
======== ========
</TABLE>
Basis for measurements, funded status of plan:
<TABLE>
<S> <C> <C>
Weighted average discount rate 6.10% 6.80%
Rate of increase in future
compensation levels 6.00% 5.00%
</TABLE>
(Continued)
-40-
<PAGE> 68
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(11) PENSION PLANS, CONTINUED
GENERAL AGENT AND OTHER PLANS
ONLIC also participates in a pension plan covering some general agents
eligible based on employment date and certain production levels.
Benefits are based upon specific elements of compensation earned
in the last five and ten years of service. Other pension plans
under IRS code 401(a)(17) and code 415 are also in effect.
The net periodic pension cost for these plans in total for the years
ended December 31, 1995, 1994 and 1993 follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Service cost (benefits earned
during the period) $ 596 508 409
Interest cost on projected
benefit obligations 990 856 768
Actual return on plan assets - - -
Net amortization and deferral 345 761 2,676
------ ------ ------
Net periodic pension cost $ 1,931 2,125 3,853
====== ====== ======
</TABLE>
Basis for measurements, net periodic pension cost:
<TABLE>
<S> <C> <C> <C>
Weighted average discount rate 7.00% 6.75% 7.00%
Rate of increase in future
compensation levels 4.60% 4.60% 5.50%
Expected long-term rate of
return of plan assets N/A N/A N/A
</TABLE>
(Continued)
-41-
<PAGE> 69
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(11) PENSION PLANS, CONTINUED
GENERAL AGENT AND OTHER PLANS, CONTINUED
Information regarding the funded status of these plans in total as of
December 31, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Accumulated benefit obligation:
Vested $ 9,452 8,223
Nonvested 775 577
-------- -------
$ 10,227 8,800
======== =======
Projected benefit obligation for services
rendered to date 14,460 12,199
Plan assets at fair value - -
-------- -------
Plan assets less projected
benefit obligation (14,460) (12,199)
Unrecognized prior service cost - -
Unrecognized net losses 1,508 568
Unrecognized net assets at January 1, 1987 3,493 3,784
-------- -------
Net accrued pension expense $ (9,459) (7,847)
======== =======
</TABLE>
Basis for measurements, funded status of plan:
<TABLE>
<S> <C> <C>
Weighted average discount rate 6.60% 7.00%
Rate of increase in future
compensation levels 4.60% 4.60%
</TABLE>
The Company also maintains a qualified contributory defined contribution
progress sharing plan covering substantially all of its employees
and a qualified non-contributory defined contribution pension plan
covering career agents. These plans are funded through insurance
contracts issued by the Company.
Company contributions to the Progress Sharing Plan are in part based on
the net earnings of the Company and are payable at the sole
discretion of management. The expense reported for contributions
to the plan for 1995 and 1994 were $1,609 and $1,355,
respectively.
Contributions to the Career Agent's Pension Plan are subject to the
minimum funding required under Internal Revenue Code Section 412.
The expense reported for contributions to the plan for 1995 and
1994 were $497 and $420, respectively.
(Continued)
-42-
<PAGE> 70
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(12) POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company currently offers eligible retirees the opportunity to
participate in a health plan. The Company has two health plans,
one is offered to home office employees, the other is offered to
career agents.
HOME OFFICE EMPLOYEE HEALTH PLAN
The Company provides a declining service schedule. Substantially all
home office employees may become eligible for these benefits
provided that the employee meets the age and years of service
requirements. The plan states that an employee becomes eligible
as follows: age 55 with 20 years of credited service at
retirement, age 56 with 18 years of service, age 57 with 16 years
of service grading to age 64 with two years of service. The
health plan is contributory with retirees contributing
approximately 15% of premium for coverage.
CAREER AGENTS HEALTH PLAN
Substantially all career agents may become eligible for these benefits
provided that the agent is at least age 55 and has 15 years of
credited service at retirement. The health plan is contributory,
with retirees contributing approximately 47% of medical costs.
Actuarial assumptions for the measurement of the December 31, 1995
accumulated postretirement benefit obligation include a discount
rate of 7.5% and an assumed health care cost trend rate of 12%,
declining 1% each year to an ultimate rate of 5%.
Actuarial assumptions for the measurement of the December 31, 1994
accumulated postretirement benefit obligation and the 1994 net
periodic postretirement benefit cost include a discount rate of
7.5% and an assumed health care cost trend rate of 13%, declining
1% each year an ultimate rate of 5%.
Actuarial assumptions used to determine the 1993 net periodic
postretirement benefit cost include a discount rate of 8% and an
assumed health care cost trend rate of 14%, declining 1% each year
to an ultimate rate of 5%.
(Continued)
-43-
<PAGE> 71
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(12) POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, CONTINUED
Information regarding the funded status of the plan as a whole as of
December 31, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Accumulated postretirement benefit obligations:
Retirees $ 6,036 6,617
Fully eligible, active plan participants 2,515 2,373
Other active plan participants 3,976 3,319
------- -------
Accumulated postretirement benefit obligation 12,527 12,309
Unrecognized net (gains) losses and plan amendments 1,396 762
------- -------
Accrued postretirement benefit obligation $ 13,923 13,071
======= =======
</TABLE>
The amount of net periodic postretirement benefit cost for the plan as a
whole for the years ended December 31, 1995 and 1994 is as
follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Net periodic postretirement benefit cost:
Service cost - benefits attributed to
employee service during the year $ 497 446
Interest cost on accumulated postretirement
benefit obligation 869 857
Actual return on plan assets - -
Net amortization and deferral (82) (46)
------ -----
Net periodic postretirement benefit cost $1,284 1,257
====== =====
</TABLE>
The health care cost trend rate assumption has a significant effect on
the amounts reported. A one percentage point increase in the
assumed health care cost trend rate would increase the accumulated
postretirement benefit obligation as of December 31, 1995 and 1994
by $1,261 and $1,055, respectively, and the net periodic
postretirement benefit cost for the years ended December 31, 1995
and 1994 by $149 and $128, respectively.
(13) REGULATORY RISK-BASED CAPITAL, RETAINED EARNINGS AND DIVIDEND RESTRICTIONS
In January 1993, the NAIC adopted the life and health Risk-Based Capital
(RBC) formula. This model act requires every life and health
insurer to calculate its total adjusted capital and RBC
requirement, and provides for an insurance commissioner to
intervene if the insurer experiences financial difficulty. The
model act will become law in Ohio, the Company's domicile, in
March 1996. The formula includes components for asset risk,
liability risk, interest rate exposure and other factors. ONLIC
and ONLAC exceed the minimum risk-based capital requirements.
(Continued)
-44-
<PAGE> 72
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(13) REGULATORY RISK-BASED CAPITAL, RETAINED EARNINGS AND DIVIDEND
RESTRICTIONS, CONTINUED
The Company has designated a portion of retained earnings for separate
account contingencies and investment guarantees totaling $1,637
and $1,497 at December 31, 1995 and 1994, respectively.
The payment of dividends by the Company to its participating
policyholders is based on the dividend scale declared at least
annually by the Company's Board of Directors.
(14) BANK LINES OF CREDIT
As of December 31, 1995 and 1994, ONLIC had a $10,000,000 unsecured line
of credit which was utilized and repaid during 1995.
(15) CONTINGENCIES
The Company and its subsidiaries are defendants in various legal actions
arising in the normal course of business. While the outcome of
such matters cannot be predicted with certainty, management
believes such matters will be resolved without material adverse
impact on the financial condition of the Company.
The Company routinely enters into reinsurance transactions with other
insurance companies which are not material to the consolidated
financial statements. This reinsurance involves either ceding
certain risks to or assuming risks from other insurance companies.
The primary purpose of ceded reinsurance is to protect the Company
from potential losses in excess of levels that it is prepared to
accept. Reinsurance does not discharge the Company from its
primary liability to policyholders and to the extent that a
reinsurer should be unable to meet its obligations, the Company
would be liable to policyholders.
(16) MAJOR LINES OF BUSINESS
The Company operates in the life and annuity lines of business in the
life insurance industry. Life insurance operations include whole
life, universal life, variable universal life, and endowments, as
well as term life, health insurance, and other miscellaneous
insurance products provided to individuals and groups. Annuity
operations include guaranteed investment and accumulated deposit
contracts issued to groups and deferred and immediate annuities
issued to individuals.
(Continued)
-45-
<PAGE> 73
THE OHIO NATIONAL LIFE INSURANCE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements, Continued
(16) MAJOR LINES OF BUSINESS, CONTINUED
The following table summarizes the revenues and income before Federal
income tax for the years ended December 31, 1995, 1994 and 1993
and assets as of December 31, 1995, 1994 and 1993, by line of
business.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues:
Premiums, policy charges and net
investment income:
Life and other insurance $ 278,827 265,492 248,838
Annuities 275,625 248,329 243,634
---------- --------- ----------
554,452 513,821 492,472
Realized capital gains:
Life and other insurance (771) (1,088) 5,869
Annuities (1,980) (2,421) 14,199
---------- --------- ----------
(2,751) (3,509) 20,068
Total revenues:
Life and other insurance 278,056 264,404 254,707
Annuities 273,645 245,908 257,833
---------- --------- ----------
$ 551,701 510,312 512,540
========== ========= ==========
Total income before Federal income tax
and cumulative effect of change in
accounting principles:
Life and other insurance $ 33,475 26,586 31,049
Annuities 30,345 24,133 32,719
---------- --------- ----------
$ 63,820 50,719 63,768
========== ========= ==========
Assets:
Life and other insurance $ 2,213,391 1,873,808 1,665,875
Annuities 3,078,984 2,640,159 2,679,723
---------- --------- ----------
$ 5,292,375 4,513,967 4,345,598
========== ========= ==========
</TABLE>
-46-
<PAGE> 74
APPENDIX
LOANS UNDER TAX-SHELTERED ANNUITIES
Contracts issued as tax-sheltered annuities pursuant to plans qualifying under
Section 403(b) of the Code, and allowing for voluntary contributions only, are
eligible for loans secured by a security interest in the contract. Any such loan
must be for at least $1,000 and may only be made from guaranteed accumulation
values (see Guaranteed Accumulation Account, below). The loan amount is limited
by the maximum loan formula described in the contract.
The annual effective rate of interest charged for loans will not exceed 7%.
Loans must generally be repaid within 5 years (or 20 years if the loan is used
for the purchase of the contract owner's principal residence).
The amount of the death benefit, the amount payable on a full surrender and the
amount that will be applied to provide an annuity on the annuity payout date
will be reduced by the amount of outstanding loan balance, including accrued
interest, as of the date of any such transaction.
GUARANTEED ACCUMULATION ACCOUNT
The Guaranteed Accumulation Account guarantees a fixed return for a specified
period of time and guarantees the principal against loss. Any portion of a
contract relating to the Guaranteed Accumulation Account is not registered under
the Securities Act of 1933. The Guaranteed Accumulation Account is not
registered as an investment company under the 1940 Act. Accordingly, neither the
Guaranteed Accumulation Account nor any interests in it are subject to the
provisions or restrictions of either such Act, and the disclosures in this
appendix have not been reviewed by the staff of the Securities and Exchange
Commission.
The Guaranteed Accumulation Account consists of all of Ohio National Life's
general assets other than those allocated to a separate account. Purchase
payments and accumulation values under a contract will be allocated between the
Guaranteed Accumulation Account and VAA. The allocation will be as elected by
the owner at the time of purchase or as subsequently changed.
Ohio National Life will invest its general assets in its discretion as allowed
by applicable state law. Investment income from Ohio National Life's general
assets will be allocated to those contracts having guaranteed accumulation
values in accordance with the terms of such contracts.
The amount of investment income allocated to the contracts will vary from year
to year in Ohio National Life's sole discretion. However, Ohio National Life
guarantees that it will credit interest at a rate of not less than 3.00% per
year, compounded annually, to contract values allocated to the Guaranteed
Accumulation Account. Ohio National Life may credit interest at a rate in excess
of 3.00%, but any such excess interest credit will be in Ohio National Life's
sole discretion.
-47-
<PAGE> 75
Ohio National Life guarantees that the guaranteed accumulation value of a
contract will never be less than (a) the amount of purchase payments allocated
to, and transfers into, the Guaranteed Accumulation Account, plus (b) interest
credited at the rate of 3.00% per year compounded annually, plus (c) any
additional excess interest Ohio National Life may credit to guaranteed
accumulation values, and less (d) any partial withdrawals, loans and transfers
from the guaranteed accumulation values, and less (e) any contingent deferred
sales charges on partial withdrawals, loan interest, state premium taxes,
transfer fees, and the portion of the $35 annual contract administration charge
allocable to the Guaranteed Accumulation Account. No deductions are made from
the Guaranteed Accumulation Account for administrative expenses or risk
undertakings. (See "Deductions and Expenses" in the prospectus.)
Not more than 20% of the guaranteed accumulation value of a contract (or $1,000,
if greater), as of the beginning of any contract year, may be transferred to one
or more variable subaccounts during that contract year. As provided by
applicable state law, Ohio National Life reserves the right to defer the payment
of amounts withdrawn from the Guaranteed Accumulation Account for a period not
to exceed six months from the date written request for such withdrawal is
received by Ohio National Life.
-48-
<PAGE> 76
OHIO NATIONAL VARIABLE ACCOUNT A
FORM N-4
PART C
OTHER INFORMATION
<PAGE> 77
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are included in Part B of
this Registration Statement:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January 26,
1996
Statements of Assets and Contract Owners' Equity as of December 31, 1995
Statement of Operations and Changes in Contract Owners' Equity for the
Years Ended December 31, 1995 and 1994
Notes to Financial Statements as of December 31, 1995
Schedules of Changes in Unit Values for the Years Ended December 31, 1995
and 1994
The following consolidated financial statements of the Depositor and its
subsidiaries are also included in Part B of this Registration Statement:
Independent Auditors' Report of KPMG Peat Marwick LLP dated February 9,
1996
Consolidated Balance Sheets as of December 31, 1995 and 1994
Consolidated Statements of Income for the Years Ended December 31, 1995,
1994 and 1993
Consolidated Statements of Equity for the Years Ended December 31, 1995,
1994 and 1993
Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1994 and 1993
Notes to Consolidated Financial Statements as of December 31, 1995, 1994
and 1993
Consents of the Following Persons:
KPMG Peat Marwick LLP
Exhibits:
(4) Combination Annuity Contract, Form 96-VA-3
(5) Variable Annuity Application, Form V-4896-A
(13) Computation of Performance Data
All other relevant exhibits, which have previously been filed with the
Commission and are incorporated herein by reference, are as follows:
-1-
<PAGE> 78
(1) Resolution of Board of Directors of the Depositor authorizing
establishment of the Registrant was filed as Exhibit A(1) of the
Registrant's registration statement on Form S-6 on August 3, 1982 (File
no. 2-78652).
(2) Agreement of Custodianship between the Depositor and The Provident Bank
was filed as Exhibit 3 of the Registrant's Form N-4, Post-effective
Amendment no. 5 on April 27, 1988 (File no. 2-91213).
(3)(a) Distribution Agreement between the Depositor and The O.N. Equity Sales
Company was filed as Exhibit A(3)(a) of the Registrant's registration
statement on Form S-6 on October 25, 1982 (File no. 2-78652).
(3)(b) Registered Representative's Sales Contract with Variable Annuity
Supplement was filed as Exhibit (3)(b) of the Registrant's Form N-4,
Post-effective Amendment no. 9 on February 27, 1991 (File no. 2-91213).
(3)(c) Variable Annuity Sales Commission Schedule was filed as Exhibit A(3)(c)
of the Registrant's registration statement on Form S-6 on May 18, 1984
(File no. 2-91213).
(6)(a) Articles of Incorporation of the Depositor were filed as Exhibit A(6)(a)
of Ohio National Variable Interest Account registration statement on Form
N-8B-2 on July 11, 1980 (File no. 811-3060).
(6)(b) Code of Regulations (by-laws) of the Depositor were filed as Exhibit
A(6)(b) of Ohio National Variable Interest Account registration statement
on Form N-8B-2 on July 11, 1980 (File no. 811-3060).
(8) Powers of Attorney by certain Directors of the Depositor were filed as
Exhibit (8) of the Registrant's Form N-4, Post-effective Amendment no. 15
on March 27, 1995 (File no. 2-91213).
-2-
<PAGE> 79
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ------------------ ----------------------
<S> <C>
Trudy K. Backus* Vice President, Individual Insurance Services
Howard C. Becker* Vice President, Corporate and Human Resources
Paul L. Bergmann* Vice President, Financial Control (Treasurer)
Michael A. Boedeker* Vice President, Fixed Income Securities
Tom D. Bowman* Sales Vice President, Pensions
Joseph P. Brom* Senior Vice President & Chief Investment Officer
Dale P. Brown Director
36 East Seventh Street
Cincinnati, Ohio 45202
Jack E. Brown Director
50 E. Rivercenter Blvd.
Covington, Kentucky 41011
William R. Burleigh Director
One West Fourth Street
Suite 1100
Cincinnati, Ohio 45202
Victoria B. Buyniski Director
2343 Auburn Avenue
Cincinnati, Ohio 45219
Raymond R. Clark Director
201 East Fourth Street
Cincinnati, Ohio 45202
David W. Cook* Senior Vice President and Actuary
Dr. Alvin H. Crawford Director
Children's Hospital Medical Center
Department of Orthopedics
Elland and Bethesda Avenues
Cincinnati, Ohio 45229
Robert M. DiTommaso* Vice President, Career Marketing
Ronald J. Dolan* Senior Vice President and Chief Financial Officer
Michael J. Ferry* Information Systems Vice President
Michael F. Haverkamp* Vice President and Counsel
John A. Houser* Vice President, Claims
</TABLE>
-3-
<PAGE> 80
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
<S> <C>
Bannus B. Hudson Director
One Eastwood Drive
Cincinnati, Ohio 45227
Daniel W. LeBlond Director
7680 Innovation Way
Mason, Ohio 45040
David G. McClure* Vice President, Variable Product Sales
Hamilton F. McGregor* Senior Vice President, Group & Pension Operations
Charles S. Mechem, Jr. Director
One East Fourth Street
Cincinnati, Ohio 45202
James I. Miller, II* Vice President, Marketing Support
James W. Nethercott Director
8431 Concord Hills Circle
Cincinnati, Ohio 45243
Thomas O. Olson* Vice President, Underwriting
David B. O'Maley* Director, Chairman, President and Chief Executive Officer
George B. Pearson, Jr.* Vice President, PGA Marketing
Dallas L. Pennington* Vice President, Information Systems
J. Donald Richardson* Senior Regional Vice President
D. Gates Smith* Senior Vice President, Sales
Michael D. Stohler* Vice President, Mortgages and Real Estate
Stuart G. Summers* Senior Vice President and General Counsel
Oliver W. Waddell Director
425 Walnut Street
Cincinnati, Ohio 45202
Bradley L. Warnemunde Director and Chairman Emeritus
250 William Howard Taft Road
Cincinnati, Ohio 45219
Dr. David S. Williams* Vice President and Medical Director
Donald J. Zimmerman* Director and Senior Vice President, Insurance Operations
and Secretary
</TABLE>
*The principal business address for these individuals is One Financial Way,
Cincinnati, Ohio 45242.
-4-
<PAGE> 81
<PAGE> 82
THE OHIO NATIONAL LIFE INSURANCE
COMPANY / CINCINNATI A MUTUAL LIFE INSURANCE
COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- --------------------------------------------------
S E P A R A T E A C C O U N T S
- --------------------------------------------------
A B C D E F
- --------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------
ENTERPRISE PARK - INC.
A GEORGIA CORPORATION
REAL ESTATE DEVELOPMENT COMPANY
CAPITALIZED BY ONLI $50,000
- --------------------------------------------------
<S> <C>
Pres. & Dir. M. Stohler
V.P. & Dir. J. Brom
Secy. & Dir. T. Tews
Treas. & Dir. P. Bergmann
- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------
THE O.N. EQUITY SALES COMPANY
AN OHIO CORPORATION
A BROKER/DEALER
CAPITALIZED BY ONLI @ $790,000
- ---------------------------------------------------
<S> <C>
Pres. & Dir. D. O'Maley
V.P. & Dir. T. Bowman
V.P., COO & Dir. D. McClure
Secy. & Dir. R. Benedict
Director S. Summers
Director D. Zimmerman
Treasurer K. Jaeger
Asst. Secretary B. Hopewell
Compliance Director A. Starkey
- ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------
OHIO NATIONAL LIFE
ASSURANCE CORPORATION
(AN OHIO CORPORATION)
A STOCK LIFE INSURANCE COMPANY
CAPITALIZED BY ONLI @ $32,000,000
INCORPORATED UNDER THE LAWS OF OHIO
- ----------------------------------------------------
<S> <C>
Chm./Pres./CEO & Dir. D. O'Maley
Sr. VP & Dir. R. Dolan
Sr. VP/Secy. & Dir. D. Zimmerman
Sr. VP & Dir. S. Summers
Sr. VP & Dir. J. Brom
Sr. Vice Pres. D. Cook
Sr. Vice Pres. G. Smith
Vice Pres. P. Bergmann
Vice Pres. M. Boedeker
Vice Pres. R. DiTomasso
Vice Pres. G. Pearson
Vice Pres. D. Pennington
Vice Pres. M. Stohler
Asst. Secretary R. Benedict
Asst. Secretary T. Tews
Asst. Actuary K. Flischel
- ------------------------------------------------------
</TABLE>
SEPARATE ACCOUNT
R
<TABLE>
<CAPTION>
- ------------------------------------------------------
ONE FUND, INC.
A MARYLAND CORPORATION
AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY
- ------------------------------------------------------
<S> <C>
Pres. & Dir. D. Zimmerman
Vice Pres. M. Boedeker
Vice Pres. J. Brom
Vice Pres. D. McClure
Vice Pres. S. Williams
Treasurer D. Taney
Secy. & Dir. R. Benedict
Asst. Secy. B. Hopewell
Director J. Baker
Director G. Castrucci
Director M. Kirby
- ------------------------------------------------------
</TABLE>
ADVISOR TO (arrow up)
<TABLE>
<CAPTION>
- ------------------------------------------------------
O.N. INVESTMENT MANAGEMENT CO.
AN OHIO CORPORATION
A FINANCIAL ADVISORY SERVICE
CAPITALIZED BY ONESCO $145,000
- ------------------------------------------------------
<S> <C>
Pres. & Dir. J. Brom
V.P. & Dir. M. Boedeker
V.P. & Dir. D. McClurteo
V.P. & Dir. S. Williams
Treasurer D. Taney
Secretary R. Benedict
Asst. Secy. B. Hopewell
- -----------------------------------------------------
</TABLE>
ADVISOR TO (ARROW DOWN)
<TABLE>
<CAPTION>
- -----------------------------------------------------
OHIO NATIONAL FUND, INC.
A MARYLAND CORPORATION
AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY
- ------------------------------------------------------
<S> <C>
Pres. & Dir. D. Zimmerman
Vice President M. Boedeker
Vice President J. Brom
Vice President S. Williams
Treasurer D. Taney
Secy. & Dir. R. Benedict
Asst. Secy. B. Hopewell
Director J. Baker
Director G. Castrucci
Director M. Kirby
- ------------------------------------------------------
</TABLE>
-4A-
<PAGE> 83
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Organization Chart showing the relationships among the Depositor, the
Registrant and their affiliated entities is on page 4A hereof.
ITEM 27. NUMBER OF CONTRACTOWNERS
As of September 23, 1996, the Registrant's contracts were owned by 17,080
owners.
ITEM 28. INDEMNIFICATION
The sixth article of the Depositor's Articles of Incorporation, as amended,
provides as follows:
Each former, present and future Director, Officer or Employee of the
Corporation (and his heirs, executors or administrators), or any such person
(and his heirs, executors or administrators) who serves at the Corporation's
request as a director, officer, partner, member or employee of another
corporation, partnership or business organization or association of any type
whatsoever shall be indemnified by the Corporation against reasonable expenses,
including attorneys' fees, judgments, fine and amounts paid in settlement
actually and reasonably incurred by him in connection with the defense of any
contemplated, pending or threatened action, suit or proceeding, civil, criminal,
administrative or investigative, other than an action by or in the right of the
corporation, to which he is or may be made a party by reason of being or having
been such Director, Officer, or Employee of the Corporation or having served at
the Corporation's request as such director, officer, partner, member or employee
of any other business organization or association, or in connection with any
appeal therein, provided a determination is made by majority vote of a
disinterested quorum of the Board of Directors (a) that such a person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation, and (b) that, in any matter the subject of
criminal action, suit or proceeding, such person had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself create a presumption that the
person did not act in good faith in any manner which he reasonably believed to
be in or not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, he had reasonable cause to believe that
his conduct was unlawful. Such right of indemnification shall not be deemed
exclusive of any other rights to which such person may be entitled. The manner
by which the right to indemnification shall be determined in the absence of a
disinterested quorum of the Board of Directors shall be set forth in the Code of
Regulations or in such other manner as permitted by law. Each former, present,
and future Director, Officer or Employee of the Corporation (and his heirs,
executors or administrators) who serves at the Corporation's request as a
director, officer, partner, member or employee of another corporation,
partnership or business organization or association of any type whatsoever shall
be indemnified by the Corporation against reasonable expenses, including
attorneys' fees, actually and reasonably incurred by him in connection with the
defense or settlement of any contemplated, pending or threatened action, suit or
proceeding, by or in the right of the Corporation to procure a judgment in its
favor, to which he is or may be a party by reason of being or having been such
Director, Officer or Employee of the Corporation or having served at the
Corporation's request as such director, officer, partner, member or employee of
any other business organization or association, or in connection with any appeal
therein, provided a determination is made by majority vote of a disinterested
quorum of the Board of Directors (a) that such person was not, and has not been
adjudicated to have been negligent or guilty of misconduct in the performance of
his duty to the Corporation or to such other business organization or
association, and (b) that such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation.
-5-
<PAGE> 84
Such right of indemnification shall not be deemed exclusive of any other rights
to which such person may be entitled. The manner by which the right of
indemnification shall be determined in the absence of a disinterested quorum of
the Board of Directors shall be as set forth in the Code of Regulations or in
such other manner as permitted by law.
In addition, Article XII of the Depositor's Code of Regulations states as
follows:
If any director, officer or employee of the Corporation may be entitled to
indemnification by reason of Article Sixth of the Amended Articles of
Corporation, indemnification shall be made upon either (a) a determination in
writing of the majority of disinterested directors present, at a meeting of the
Board at which all disinterested directors present constitute a quorum, that the
director, officer or employee in question was acting in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
this Corporation or of such other business organization or association in which
he served at the Corporation's request, and that, in any matter which is the
subject of a criminal action, suit or proceeding, he had no reasonable cause to
believe that his conduct was unlawful and in an action by or in the right of the
Corporation to procure a judgment in its favor that such person was not and has
not been adjudicated to have been negligent or guilty of misconduct in the
performance of his duty to the Corporation or to such other business
organization or association; or (b) if the number of all disinterested directors
would not be sufficient at any time to constitute a quorum, or if the number of
disinterested directors present at two consecutive meetings of the Board has not
been sufficient to constitute a quorum, a determination to the same effect as
set forth in the foregoing clause (a) shall be made in a written opinion by
independent legal counsel other than an attorney, or a firm having association
with it an attorney, who has been retained by or who has performed services for
this Corporation, or any person to be indemnified within the past five years, or
by the majority vote of the policyholders, or by the Court of Common Pleas or
the court in which such action, suit or proceeding was brought. Prior to making
any such determination, the Board of Directors shall first have received the
written opinion of General Counsel that a number of directors sufficient to
constitute a quorum, as named therein, are disinterested directors. Any director
who is a party to or threatened with the action, suit or proceeding in question,
or any related action, suit or proceeding, or has had or has an interest therein
adverse to that of the Corporation, or who for any other reason has been or
would be affected thereby, shall not be deemed a disinterested director and
shall not be qualified to vote on the question of indemnification. Anything in
this Article to the contrary notwithstanding, if a judicial or administrative
body determines as part of the settlement of any action, suit or proceeding that
the Corporation should indemnify a director, officer or employee for the amount
of the settlement, the Corporation shall so indemnify such person in accordance
with such determination. Expenses incurred with respect to any action, suit or
proceeding which may qualify for indemnification may be advanced by the
Corporation prior to final disposition thereof upon receipt of an undertaking by
or on behalf of the director, officer or employee to repay such amount if it is
ultimately determined hereunder that he is not entitled to indemnification or to
the extent that the amount so advanced exceeds the indemnification to which he
is ultimately determined to be entitled.
ITEM 29. PRINCIPAL UNDERWRITERS
The principal underwriter of the Registrant's securities is presently The O.N.
Equity Sales Company ("ONESCO"). ONESCO is a wholly-owned subsidiary of the
Depositor. ONESCO also serves as the principal underwriter of securities issued
by Ohio National Variable Accounts B and D, other separate accounts of the
Depositor which are registered as unit investment trusts; and Ohio National
Variable Account R, a separate account of the Depositor's subsidiary, Ohio
National Life Assurance Corporation, which separate account is also registered
as a unit investment trust; and ONE Fund, Inc., an open-end investment company
of the management type.
-6-
<PAGE> 85
The directors and officers of ONESCO are:
<TABLE>
<CAPTION>
Name Positions with Underwriter
<S> <C> <C>
David B. O'Maley Chairman and Director
Donald J. Zimmerman President and Director
David G. McClure Vice President, Chief Operating Officer and Director
James I. Miller II Vice President and Director
Ronald L. Benedict Secretary and Director
Robert M. DiTommaso Vice President
Timothy S. Halevan Vice President
Thomas MacDonald Vice President
Kenneth M. Jaeger Treasurer
Amy D. Starkey Compliance Officer
</TABLE>
Pending receipt of necessary regulatory approvals, Ohio National Equities, Inc.
("ONE,Inc."), a new wholly-owned subsidiary of the Depositor, will become the
principal underwriter of the Registrant's securities as well as those of the
other entities listed above. The directors and officers of ONE, Inc. are:
<TABLE>
<CAPTION>
Name Position with ONE, Inc.
<S> <C> <C>
David B. O'Maley Chairman and Director
Donald J. Zimmerman President and Director
David G. McClure Vice President, Chief Operating Officer and Director
Trudy K. Backus Vice President and Director
Tom D. Bowman Director
Timothy S. Halevan Vice President
Ronald L. Benedict Secretary
Kenneth M. Jaeger Treasurer
Amy D. Starkey Compliance Officer
</TABLE>
The principal business address of each of the foregoing is One Financial Way,
Cincinnati, Ohio 45242.
During the last fiscal year, ONESCO received the following commissions and other
compensation, directly or indirectly, from the Registrant:
<TABLE>
<CAPTION>
Net Underwriting Compensation
Discounts and on Redemption Brokerage
Commissions or Annuitization Commissions Compensation
<S> <C> <C> <C>
$1,645,426 None None None
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books and records of the Registrant which are required under Section 31(a)
of the 1940 Act and Rules thereunder are maintained in the possession of the
following persons:
(1) Journals and other records of original entry:
The Ohio National Life Insurance Company ("Depositor")
237 William Howard Taft Road
Cincinnati, Ohio 45219
-7-
<PAGE> 86
The Provident Bank ("Custodian")
One East Fourth Street
Cincinnati, Ohio 45269
(2) General and auxiliary ledgers:
Depositor and Custodian
(3) Securities records for portfolio securities:
Custodian
(4) Corporate charter, by-laws and minute books:
Registrant has no such documents.
(5) Records of brokerage orders:
Not applicable.
(6) Records of other portfolio transactions:
Custodian
(7) Records of options:
Not applicable
(8) Records of trial balances:
Custodian
(9) Quarterly records of allocation of brokerage orders and commissions:
Not applicable
(10) Records identifying persons or group authorizing portfolio
transactions:
Depositor
(11) Files of advisory materials:
Not applicable
(12) Other records
Custodian and Depositor
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Not applicable.
-8-
<PAGE> 87
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
l940, the registrant, Ohio National Variable Account A has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Cincinnati and the State of Ohio on this 27th day of
September, 1996.
OHIO NATIONAL VARIABLE ACCOUNT A
(Registrant)
By THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/Donald J. Zimmerman
-------------------------------------------
Donald J. Zimmerman, Senior Vice President,
Insurance Operations
Attest:
/s/Ronald L. Benedict
- -------------------------------------
Ronald L. Benedict
Second Vice President and Counsel
and Assistant Secretary
As required by the Securities Act of 1933 and the Investment Company Act of
l940, the depositor, The Ohio National Life Insurance Company, has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Cincinnati and the State of Ohio on the 27th day of
September, 1996.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/Donald J. Zimmerman
-------------------------------------------
Donald J. Zimmerman, Senior Vice President,
Insurance Operations
Attest:
/s/Ronald L. Benedict
- ---------------------------------
Ronald L. Benedict
Second Vice President and Counsel
and Assistant Secretary
<PAGE> 88
As required by the Securities Act of 1933, this post-effective amendment to the
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/David B. O'Maley Chairman, President, September 27, 1996
-------------------------- Chief Executive Officer
David B. O'Maley and Director
*/s/Dale P. Brown Director September 27, 1996
--------------------------
Dale P. Brown
*/s/Jack E. Brown Director September 27, 1996
--------------------------
Jack E. Brown
*/s/William R. Burleigh Director September 27, 1996
--------------------------
William R. Burleigh
*/s/Victoria B. Buyniski Director September 27, 1996
--------------------------
Victoria B. Buyniski
*/s/Raymond R. Clark Director September 27, 1996
--------------------------
Raymond R. Clark
*/s/Alvin H. Crawford Director September 27, 1996
--------------------------
Alvin H. Crawford
*/s/Bannus B. Hudson Director September 27, 1996
--------------------------
Bannus B. Hudson
*/s/Daniel W. LeBlond Director September 27, 1996
--------------------------
Daniel W. LeBlond
*/s/Charles S. Mechem, Jr. Director September 27, 1996
--------------------------
Charles S. Mechem, Jr.
*/s/James W. Nethercott Director September 27, 1996
--------------------------
James W. Nethercott
<PAGE> 89
*/s/Oliver W. Waddell Director September 27, 1996
----------------------------
Oliver W. Waddell
*/s/Bradley L. Warnemunde Chairman Emeritus and September 27, 1996
---------------------------- Director
Bradley L. Warnemunde
/s/Donald J. Zimmerman Senior Vice President, September 27, 1996
---------------------------- Insurance Operations &
Donald J. Zimmerman Secretary and Director
*By /s/Donald J. Zimmerman
----------------------------
Donald J. Zimmerman, Attorney in Fact pursuant to Powers of Attorney, copies of
which have previously been filed as exhibits to the Registrant's registration
statement.
<PAGE> 90
INDEX OF CONSENTS AND EXHIBITS
Page Number in
Exhibit Sequential
Number Description Numbering System
- ------ ----------- ----------------
Consent of KPMG Peat Marwick LLP
(4) Combination Annuity Contract, Form 96-VA-3
(5) Variable Annuity Application,
Form V-4896-A
(13) Computation of Performance Data
<PAGE> 91
CONSENTS
<PAGE> 92
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Ohio National Life Insurance Company:
We consent to the inclusion of our reports included herein on the financial
statements of Ohio National Variable Account A as of December 31, 1995 and for
the periods indicated herein and on The Ohio National Life Insurance Company as
of December 31, 1995 and 1994 and for the periods indicated herein and to the
reference to our firm under the heading "Independent Certified Public
Accountants" in the Statement of Additional Information.
Our report on The Ohio National Life Insurance Company refers to a change in
accounting and reporting by mutual life insurance enterprises and insurance
enterprises for certain long-duration participating contracts in 1995.
KPMG Peat Marwick LLP
Cincinnati, Ohio
September 30, 1996
<PAGE> 93
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Ohio National Life Assurance Corporation:
We consent to the inclusion of our reports included herein on the financial
statements of Ohio National Variable Account R as of December 31, 1995 and for
the periods indicated herein and on Ohio National Life Assurance Corporation as
of December 31, 1995 and for the year then ended and to the reference to our
firm under the heading "Experts" in the Prospectus.
Our report on Ohio National Life Assurance Corporation refers to a change in
accounting and reporting by mutual life insurance enterprises and insurance
enterprises for certain long-duration participating contracts in 1995.
KPMG Peat Marwick LLP
Cincinnati, Ohio
October 1, 1996
<PAGE> 94
EXHIBITS
<PAGE> 1
EXHIBIT (4)
COMBINATION ANNUITY CONTRACT, FORM 96-VA-3
<PAGE> 2
WE WILL PAY the benefits of this contract subject to its terms.
WITHIN TWENTY DAYS OF THE DAY YOU RECEIVE THIS CONTRACT, YOU MAY RETURN IT
TO OUR HOME OFFICE OR TO OUR AGENT. WE WILL THEN VOID THE CONTRACT AND
REFUND ALL PURCHASE PAYMENTS PAID ON IT.
Our home office is at One Financial Way, Cincinnati, Ohio 45242.
/s/ Donald J. Zimmerman /s/ illegible
------------------------ --------------
Donald J. Zimmerman
Secretary President
COMBINATION ANNUITY CONTRACT
(Variable-Fixed)
Multiple Funding
Flexible Purchase Payments
Nonparticipating
Benefits Nontransferable
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON
THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT
GUARANTEED AS TO FIXED-DOLLAR AMOUNT.
ANNUITANT CONRACT NUMBER
OWNER
ANNUITY PAYOUT DATE First Day of CONRACT DATE
<PAGE> 3
POLICY CONTENTS
PAGE
DEFINITIONS 3
1940 Act 3
Annuitant 3
Annuity Payout Date 3
Beneficiary 3
Code 3
IRA 3
Subaccount 3
VAA 3
Valuation Period 4
We and You 4
GENERAL PROVISIONS 4
Contract 4
Misstatement of Age or Sex 4
Ownership 4
Nontransferability 4
Beneficiary 5
Change of Beneficiary 5
General Account and VAA 5
Investments of VAA 5
Nonparticipating 5
Evidence of Sex, Age or Survival 5
Incontestability 5
Contract Payments 5
Supplementary Agreement 6
Voting Rights 6
Reports 6
Notice 6
Individual Retirement Annuities 6
PURCHASE PROVISIONS 6
Purchase Payments 6
Allocation of Purchase Payments 6
VALUATION PROVISIONS 7
Contract Value 7
Fixed Accumulation Account 7
Variable Accumulation Account 7
Net Investment Factor 7
Splitting Units 8
Taxes 8
ACCUMULATION PERIOD PROVISIONS 8
Transfers Among Subaccounts and
General Account 8
Surrender 8
Partial Withdrawal 9
Contingent Deferred Sales Charge 9
Death Benefit During Accumulation
Period 9
Contract Administration Charge 10
SETTLEMENT PROVISIONS 10
General 10
Elections 10
Pension Plan 10
IRA Restrictions 11
Determination of Amount To Be
Applied 11
Effect of Settlement on Accumulation
Units 11
Change of Annuity Payout Date 11
Annuity Payment Amounts 11
Variable Annuities 11
Fixed Annuities 12
Annuity Unit Value 12
Change in Subaccount 12
Limitation on Availability of Options 12
Alternate Annuity Option 12
Death Benefit After the Annuity
Payout Date 13
Spendthrift Provision 13
Description of Annuity Options 13
Life Annuity 13
Joint and Survivor Life Annuity 14
ANNUITY OPTION TABLES 15
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 2
<PAGE> 4
We will pay an annuity starting on the annuity payout date if the Annuitant is
then living. We will then apply the contract value under the SETTLEMENT
PROVISIONS of this contract.
We will pay this contract's death benefit to the Beneficiary if the Annuitant
dies while this contract is in effect and before the annuity payout date.
This contract provides accumulation values and annuity payments on a variable
and/or fixed basis under one or more options as selected by you. The dollar
amount of the variable annuity payments and the variable part of the contract
value will vary with the investment results of a separate account (VAA) which we
have established. However, we guarantee that the dollar amount of annuity
payments will not be affected by mortality experience. We also guarantee that
the expense charges will not be more than the charges provided for in this
contract. The dollar amount of fixed annuity payments and the fixed part of the
contract value are also guaranteed.
DEFINITIONS
1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor
federal legislation.
ANNUITANT
The person so named in the application or any other natural person whose
length of life measures annuity payments that involve life contingencies.
ANNUITY PAYOUT DATE
The date shown on Page 1 or the date you later choose but under the
provisions of this contract for Change of Annuity Payout Date; or any other
date on which annuity payments are to start.
BENEFICIARY
The person entitled to receive the Contract Value of this contract if the
Annuitant dies before the annuity payout date.
CODE
The Internal Revenue Code as in effect on the Contract Date.
IRA
An Individual Retirement Annuity as defined in the Code.
SUBACCOUNT
The Bond Subaccount, Equity Subaccount, Money Market Subaccount, Omni
Subaccount, International Subaccount, Capital Appreciation Subaccount,
Small Cap Subaccount, Global Contrarian Subaccount, S & P 500 Index
Subaccount, Aggressive Growth Subaccount, Social Awareness Subaccount, Core
Growth Subaccount, Growth Subaccount, Equity Income Subaccount, High Income
Bond Subaccount, Growth & Income Subaccount, Emerging Markets Subaccount,
or such other subaccounts as may be established within VAA.
VAA
An account (Ohio National Variable Account A) that consists of assets we
have set aside so that their investment results are kept separate from
those of our general assets.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 3
<PAGE> 5
VALUATION PERIOD
That period of time from one determination of accumulation unit and annuity
unit values to their next determination. Such values will be determined as
often as we choose to do so. This will occur at least once each week or as
often as require` by the 1940 Act.
WE AND YOU
"We", "us" and "our" means The Ohio National Life Insurance Company. "You"
means the Owner of this contract.
GENERAL PROVISIONS
CONTRACT
Your application and purchase payment(s) are the consideration for this
contract. A copy of the application is attached. The contract, any riders
or endorsements, if applicable, and the application are the entire
agreement.
We are not a party to, nor are we bound by, any plan or trust in
conjunction with this contract. This contract is intended to qualify under
the Code for tax favored status. Any reference in this contract to tax laws
or rules is for your information and instruction and is not subject to
approval or disapproval by the state in which the contract is issued for
delivery. Your qualifying status, and not the contract, controls whether or
not your funds will have tax favored status. You should ask your tax
advisor if you have any questions as to whether or not you qualify.
This contract cannot be changed nor our rights waived except in a writing
signed by our president, vice president or secretary and attached to the
contract.
MISSTATEMENT OF AGE OR SEX
If the Annuitant's birth date or sex has been misstated, the benefits shall
be such as would have been provided based on the correct birth date and
sex. The amount of any over payments shall be charged against benefits to
be paid after we learn of a misstatement. The amount of any under payments
accumulated at an annual effective interest rate of 6% shall be added to
benefits to be paid after we learn of a misstatement.
OWNERSHIP
During the Annuitant's lifetime and prior to the annuity payout date, the
Owner of this contract shall be the person so named in the application or
the heirs, successors or transferees of such person. On and after the
annuity payout date, the Annuitant is the Owner. After the Annuitant's
death, the Beneficiary is the Owner.
If this contract is an IRA, the Annuitant shall be the Owner while living.
The Annuitant's interest may not then be forfeited. The contract, if an
IRA, is for the sole benefit of the Annuitant and Beneficiaries.
You have the sole right, without the consent of the Beneficiary or any
other person, to exercise all contract rights. You can transfer ownership
to a successor Owner only if such successor Owner is (1) the Annuitant, (2)
a trustee or successor trustee of a pension or profit-sharing trust which
is qualified under Section 401 of the Code, or (3) the employer of the
Annuitant provided that the contract after transfer is maintained under the
terms of a retirement plan qualified under Section 403(a) of the Code for
the benefit of the Annuitant. Exercise of any ownership rights under this
contract shall not take effect until we receive notice.
NONTRANSFERABILITY
You may not sell, assign, discount or pledge this contract as collateral
for a loan or to secure the performance of any obligation or for any
purpose to any person other than to us, to the Annuitant, or to a trustee
or other person exercising ownership rights solely by reason of the terms
of a pension or profit-sharing plan or trust qualified under the Code.
You may not transfer this contract if it is an IRA.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 4
<PAGE> 6
BENEFICIARY
The Beneficiary and any Contingent Beneficiary are named in the
application, unless changed. If the Beneficiary dies prior the Annuitant,
the Contingent Beneficiary becomes the Beneficiary. Unless you have
provided otherwise, if there are two or more Beneficiaries, they will
receive equal shares. If there is no named Beneficiary or Contingent
Beneficiary when the Annuitant has died, you will be deemed to be the
Beneficiary.
CHANGE OF BENEFICIARY
Subject to the terms of any assignment, you may name a new Beneficiary or a
new Contingent Beneficiary by notice to us at any time during the lifetime
of the Annuitant. Any new choice of Beneficiary or Contingent Beneficiary
will automatically revoke any prior choice of Beneficiary or Contingent
Beneficiary.
GENERAL ACCOUNT AND VAA
The General Account consists of all our assets other than those we allocate
to separate accounts.
The separate account to which the variable part of contract values and
variable annuity payments under this contract relate is VAA, which we have
established under Ohio law to provide variable benefits. We shall have sole
and complete ownership and control of all assets in VAA.
INVESTMENTS OF VAA
All amounts credited to VAA will be used to purchase shares at net asset
value of Ohio National Fund, Inc., an open-end investment company
registered under the 1940 Act, or substitute shares of another investment
company. Ohio National Fund, Inc. and such other investment companies are
referred to as the "Fund" and shares of either are referred to as "Fund
shares". Any and all distributions made by the Fund in respect to Fund
shares held by VAA will be reinvested to purchase more Fund shares in the
same subaccount at net asset value. Deductions and redemptions from VAA may
be made by redeeming a number of Fund Shares, at net asset value, equal in
total value to the amount to be deducted or redeemed. If deemed by us to be
in the best interest of all contract owners, VAA may be operated as a
management company under the 1940 Act or it may be deregistered under the
1940 Act if such registration is no longer required.
If there is such a substitution of Fund shares or change in operation of
VAA, we may issue such endorsement for the contract and take such other
action as may be necessary and appropriate to make the substitution or
change.
NONPARTICIPATING
This contract is nonparticipating. It will not share in our divisible
surplus.
EVIDENCE OF SEX, AGE OR SURVIVAL
Where any payment under this contract depends on the payee's sex, age or
survival on a given date, we may require proof thereof prior to making such
payment.
INCONTESTABILITY
After two years, we will not contest this contract, based on any
misstatement in the application, except for fraud.
CONTRACT PAYMENTS
All sums to be paid by us under this contract are payable at our home
office. We may require you to send us this contract as a condition to any
payment.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 5
<PAGE> 7
SUPPLEMENTARY AGREEMENT
As of the annuity payout date, we may issue a supplementary agreement that
sets forth the terms of your annuity option.
VOTING RIGHTS
We will seek instructions for the voting of Fund shares held on account of
the variable part of your contract value or held in VAA which represent the
actuarial liability for variable annuity payments being made. From time to
time, we will send you reports on the Fund, proxy material and a form with
which you may instruct us how to vote Fund shares.
After this contract has been effect for one year, you may also vote at our
annual meeting of policyholders as provided in our code of regulations and
Ohio law.
REPORTS
At least once each year after the first contract year and before the
annuity payout date, we shall send you a report of your contract values.
NOTICE
A notice required by this contract must be in writing signed by you. The
notice will take effect when signed, subject to any payment made or action
taken by us before we receive the notice at our home office.
INDIVIDUAL RETIREMENT ANNUITIES
The Internal Revenue Service has approved the form of this contract as
meeting the Code requirements for an IRA. If this contract is an IRA, we
can change the contract in its approved form so as to keep its approval
under the Code or to comply with any change in the Code or rules under the
Code. Any such change shall be in writing, signed by us and mailed to you
at your address of record in our files. Any terms that relate to this
contract as an IRA shall be of no further effect if the contract is no
longer kept as a qualified IRA under the Code.
PURCHASE PROVISIONS
PURCHASE PAYMENTS
Purchase payments are payable to us at our home office or, with respect
only to the first purchase payment, to one of our authorized agents in
exchange for a receipt signed by such agent.
The initial purchase payment may not be less than $100. Each subsequent
purchase payment must be at least $100. No more than $100,000 may be paid
in any contract year without our consent. If this is an IRA, purchase
payments may not be more than the lesser of $2,000 or 100% of your
compensation in any calendar year. But, this limit does not apply to
"rollover" or employer contributions as defined in the Code.
ALLOCATION OF PURCHASE PAYMENTS
Each purchase payment, less an amount for any applicable premium or similar
tax (net purchase payment), will be allocated to one or more subaccounts
and/or the General Account in accordance with the allocation percentage
specified in the application or as later changed by you.
Such change shall take effect with the first purchase payment received
after the date you ask such change to take effect or, if later, as of the
end of the valuation period during which we receive such change request at
our home office.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 6
<PAGE> 8
VALUATION PROVISIONS
CONTRACT VALUE
The contract value for any valuation period equals the sum of the fixed
accumulation account value as of the end of the valuation period and the
variable accumulation account value for the valuation period.
FIXED ACCUMULATION ACCOUNT
Prior to the annuity payout date, the fixed accumulation account value will
be
(1) The net purchase payment allocated to the General Account; plus
(2) any amounts, net of fees, transferred from VAA to the fixed
accumulation account; plus
(3) accumulated interest; less
(4) any amounts withdrawn from the fixed accumulation account (along
with any applicable contingent deferred sales charge) to pay
benefits or contract administration charge; less
(5) any amounts, plus any associated fees, transferred from the fixed
accumulation account to the variable accumulation account; less
(6) any amounts applied to affect an annuity option under the
SETTLEMENT PROVISIONS.
We will declare annual effective interest rates to be applied to the fixed
accumulation account from time to time. No annual effective interest rate
declared by us will be less than 3.00%. We may increase an interest rate at
any time, but we may not decrease the rates on any existing funds in the
fixed accumulation account more often than once in any given twelve month
period.
VARIABLE ACCUMULATION ACCOUNT
We will credit this contract's variable accumulation account with variable
accumulation units in relation to the amount of each net purchase payment
allocated to each subaccount. To find the number of variable accumulation
units credited to each subaccount, divide the amount allocated to that
subaccount by the variable accumulation unit value of that subaccount for
the valuation period during which the purchase payment is received at our
home office.
The value of each variable accumulation unit was set when the first
purchase payment was allocated to each subaccount. The value of a variable
accumulation unit for each subaccount varies for each later valuation
period. Such value is found by multiplying the value of a variable
accumulation unit of that subaccount for the immediately preceding
valuation period by the net investment factor for the subaccount for the
valuation period for which the variable accumulation unit value is being
determined. The value of a variable accumulation unit for any valuation
period is determined as of the end of such valuation period.
The variable accumulation account value for a valuation period equals
number of variable accumulation units credited to the variable accumulation
account multiplied by the value of each such accumulation unit for that
valuation period.
NET INVESTMENT FACTOR
The net investment factor for a subaccount is found by dividing (a) by (b),
then subtracting (c) from the result, where
(a) is
(1) the net asset value of a Fund share in that subaccount determined
as of the end of a valuation period, plus
(2) the per share amount of any dividends or other distribution
declared by the Fund (as of the ex-dividend date) during the
valuation period, adjusted by
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 7
<PAGE> 9
(3) a per share charge or credit with respect to any taxes paid or
reserved for, which we determine to be attributable to the
maintenance or operation of the subaccount;
(b) is the net asset value of a Fund share in that subaccount, adjusted by
a per share credit or charge for any taxes reserved for or paid,
determined as of the end of the prior valuation period; and
(c) is
(1) a charge for mortality and expenses risk assumptions at an
effective rate of not more than 1.55% per year, plus
(2) an administration expense charge of 0.25% per year for the number
of days in such valuation period.
Although we cannot identify that part of the current risk charge that
applies to each of the risks involved, we estimate that a reasonable
allocation would be 0.55% for the mortality risk, and 0.5% for the expense
risk. The total charge for risks and administration expenses is now at the
effective rate of 1.30%. Although we may change the risk charges from time
to time, the total of the risk charges and the administration charge shall
not exceed 1.80% annually. The actual risk charges to be made will be
determined by our Board of Directors and shall not be increased more often
than once a year.
SPLITTING UNITS
We reserve the right to split the value of the variable accumulation units
or the annuity units. In any such split of unit values, strict equity will
be preserved. Such a split will have no material effect on the benefits or
other terms of this contract. A split may either increase or decrease the
number of such units.
TAXES
Any taxes that pertain to this contract or VAA will be charged against the
contract value when incurred or reserved for by us.
ACCUMULATION PERIOD PROVISIONS
TRANSFERS AMONG SUBACCOUNTS AND GENERAL ACCOUNT
By notice to us, you may transfer the value of any number of accumulation
units from one subaccount to another subaccount or to the General Account
at any time. Not more than 20% of the fixed accumulation account value as
of the beginning of any contract year may be transferred to one or more
subaccounts during that contract year. The dollar amount of a transfer must
be at least $300, but the entire value of a subaccount or the General
Account may be transferred if less than $300. No transfer of variable
accumulation units may be made after the annuity payout date or the date we
receive notice of the Annuitant's death. Such transfers shall be made as of
the end of the valuation period during which we receive the request at our
home office or at the end of any later valuation period as you may request.
A fee of not more than $5 will be charged for each transfer. The first four
transfers within a contract year will not be assessed a transfer fee.
SURRENDER
You may surrender this contract and receive its surrender value upon notice
received by us at any time prior to the annuity payout date. The surrender
value is the contract value less: (1) a charge for any applicable premium
taxes not previously deducted, (2) the contract administration charge and
(3) the contingent deferred sales charge, if any. For this purpose, the
contract value will be that for the valuation period during which the
surrender request is received at our home office. The surrender value shall
be paid within 7 days of receipt of your notice (or later if allowed by
law). After this contract is surrendered, all variable accumulation units
will be cancelled.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 8
<PAGE> 10
PARTIAL WITHDRAWAL
You can take up to 12 partial withdrawals within a contract year. The
withdrawn amount cannot be less than $100 and cannot be greater than the
amount that would cause the contract value to fall below $1,000. We will
pay to you the amount of a partial withdrawal less the appropriate
contingent deferred sales charge. Partial withdrawals will reduce the
contract value by the amount withdrawn including any applicable contingent
deferred sales charges.
Withdrawals from this contract will be taken on a "first-in-first-out"
basis. That is, partial withdrawals will be taken first from any remaining
portion of the total contract value resulting from the earliest purchase
payment. Once the value resulting from any purchase payment has been
reduced to zero, remaining amounts withdrawn shall reduce the value
resulting from the earliest of the remaining purchase payments. This
process shall continue until the withdrawal is completed. The amount so
withdrawn shall be paid within 7 days of receipt of your notice (or later
if allowed by law). For amounts withdrawn from VAA, we will cancel the
number of variable accumulation units from the appropriate subaccount
which, when multiplied by the corresponding variable accumulation unit
values for the valuation period during which the notice was received by us,
equals that portion of the dollar amount of the partial withdrawal, plus
any applicable contingent deferred sales charge taken from that deposit.
After the first contract year, no contingent deferred sales charge will be
assessed against partial withdrawals made in a contract year that total up
to 10% of the contract value as of the most recent anniversary.
CONTINGENT DEFERRED SALES CHARGE
We can make a contingent deferred sales charge if this contract is
surrendered or a partial withdrawal is made. Such charge will be a
percentage of the amount withdrawn. The percentage will vary with the
number of years since the purchase payments (that are related to the amount
withdrawn) were made. Charges made against the amount withdrawn will be on
a first-in-first-out basis. The charge for an amount related to a given
purchase payment will equal the percentage from the following table
multiplied by that amount.
- --------------------------------------------------------------------------------
Time elapsed since Percentage of
Purchase Payment resulting value charged
- --------------------------------------------------------------------------------
1 year or less 7.0%
- --------------------------------------------------------------------------------
more than 1 year but not more than 2 7.0%
- --------------------------------------------------------------------------------
more than 2 years but not more than 3 6.0%
- --------------------------------------------------------------------------------
more than 3 years but not more than 4 5.0%
- --------------------------------------------------------------------------------
more than 4 years but not more than 5 4.0%
- --------------------------------------------------------------------------------
more than 5 years but not more than 6 2.0%
- --------------------------------------------------------------------------------
more than 6 years but not more than 7 1.0%
- --------------------------------------------------------------------------------
more than 7 years 0.0%
- --------------------------------------------------------------------------------
In no event shall the total of contingent deferred sales charges made
exceed 9% of all purchase payments.
DEATH BENEFIT DURING ACCUMULATION PERIOD
If the Annuitant dies before the annuity payout date, we will pay a death
benefit to the Beneficiary in one sum or by such other settlement method to
which we may agree. The single sum payment will be made within 7 days after
we receive proof of the Annuitant's death (or later if allowed by law). Any
variable accumulation units will then be cancelled.
If (a) on the date of death of the Annuitant or (b) on any contract
anniversary prior to the date of death, the sum of all withdrawals made
from the contract exceeds the contract value on that date, we will pay to
the named Beneficiary the contract value as of the date of death.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 9
<PAGE> 11
Otherwise, the death benefit payable to the Beneficiary shall be the
greater of:
(a) The contract value as of the date of death;
(b) the total of all net purchase payemnts made to, less withdrawals
(including any contingent deferred sales charges) taken from the
contract.
(c) the Stepped-up Death Benefit Amount defined as follows.
The Stepped-up Death Benefit Amount during the first five contract years
shall be the total of all net purchase payments made to, less withdrawals
(including contingent deferred sales charges) taken from the contract. On
the fifth anniversary, the Stepped-up Death Benefit Amount shall be
increased to the contract value at that time if it is greater and if the
Annuitant has not yet attained age 70.
The Stepped-up Death Benefit Amount in subsequent five year periods shall
equal the Stepped-up Death Benefit Amount as of the end of the previous
five year period plus any net purchase payments made to, and less any
withdrawals (including contingent deferred sales charges) taken from the
contract during the five year period. The Stepped-up Death Benefit Amount
shall be increased at the end of each five year period to the contract
value if it is greater and if the Annuitant has not yet attained age 70.
CONTRACT ADMINISTRATION CHARGE
Prior to the annuity payout date, on each contract anniversary and upon
surrender, we will deduct from the contract value an annual contract
administration charge of $35 to defray our administrative expenses for this
contract if the contract value at that time is less than $50,000. We will
make this charge from the contract value on a "first-in-first-out" basis.
If, on the anniversary, the contract value equals or exceeds $50,000, we
will not deduct the contract administration charge.
We will cancel the number of variable accumulation units from the
appropriate subaccounts which, when multiplied by the corresponding
variable accumulation unit values for the valuation period in which the
charge is taken, equals that portion of the charge taken from VAA.
SETTLEMENT PROVISIONS
GENERAL
On the annuity payout date, the contract value shall be applied under one
or more of the annuity options shown below or under such other option to
which we may agree.
Unless otherwise specified, the first annuity payment will be apportioned
to the General Account and each subaccount in the same proportions that
each bears to the total contract value as of the day we credit your annuity
units.
ELECTIONS
You must give us notice in order to elect an annuity option or revoke or
change such an election. If no such election is in effect on the annuity
payout date, and if the Annuitant is then living, the contract value will
be applied under Option 1(c) as an annuity payable to the Annuitant. The
variable part of the contract value will be used to provide a variable
annuity and the fixed part will provide a fixed annuity unless you elect
otherwise. The Beneficiary will be the payee for any remaining period
certain installments to be paid after the Annuitant's death unless this
contract is issued pursuant to a tax qualified pension plan.
PENSION PLAN
If: (a) this contract is issued pursuant to a tax qualified pension plan;
(b) no election is in effect on the annuity payout date; and (c) the
Annuitant is living on the annuity payout date, then the contract value
will be applied as follows:
(1) If the Annuitant is married as of the annuity payout date, the
contract value will be applied to provide equal payments under
Options 1 (a) and 2 (a) with the Annuitant's spouse as the
contingent annuitant.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 10
<PAGE> 12
(2) If the Annuitant is not married as of the annuity payout date, the
contract value will be applied under Option 1 (c) and paid to the
Annuitant with the Beneficiary as payee for any period certain
payments to be made after the Annuitant's death.
IRA RESTRICTIONS
If this contract is an IRA, the Annuitant's entire interest will be paid to
him or her (a) not later than the close of the tax year in which the
Annuitant attains age seventy and one half years, or (b) in installments
that are equal except for any increment due to operation of the contract.
Such installments will be made (a) for the life of the Annuitant or the
lives of the Annuitant and his or her spouse, or (b) for a term certain
period that does not last past the life expectancy of the Annuitant or the
life expectancy of the Annuitant and his or her spouse. If the Annuitant's
entire interest is to be distributed in installments beginning in the year
the Annuitant attains age seventy and one half years, then the annual
payments must be at least the lesser of: (a) the balance of the Annuitant's
interest, or (b) an amount determined by dividing (i) the Annuitant's
entire interest at the beginning of each year (including amounts not in the
IRA at the beginning of the year because they have been withdrawn so as to
make a rollover contribution to another IRA) by (ii) the life expectancy of
the Annuitant (or of the Annuitant and his or her spouse, if applicable) as
of the date the Annuitant attains age seventy, such expectancy being
reduced by the number of whole years that have elapsed since the Annuitant
attained age seventy and one half years.
If the Annuitant dies before the entire interest has been paid, or if
payments have begun to the Annuitant's surviving spouse and such spouse
dies before the entire interest has been paid, the entire interest (or any
such interest that is left if payments have begun) will, within 5 years
after the Annuitant's death (or the death of the surviving spouse), be paid
or be applied to purchase an immediate annuity for the Beneficiary or
Beneficiaries. Such an immediate annuity will be payable for the life of
the Beneficiary or Beneficiaries (or for a term that does not last beyond
their life expectancy). This paragraph does not apply if term certain
payments began before the Annuitant's death and the term certain is for a
period allowed in the prior paragraph.
DETERMINATION OF AMOUNT TO BE APPLIED
The contract value to be applied to provide an annuity shall be determined
at the end of a valuation period, selected by us and uniformly applied,
which is not more than 10 valuation periods before the annuity payout date.
The fixed part of the contract value used to provide a fixed annuity will
be determined as of the annuity payout date. Any applicable premium tax
will be deducted at this time.
EFFECT OF SETTLEMENT ON ACCUMULATION UNITS
When this contract is settled, its Variable Accumulation Units will be
cancelled.
CHANGE OF ANNUITY PAYOUT DATE
You may change the annuity payout date at any time prior to the Annuitant's
death by notice to us. But, unless we agree, the annuity payout date may
not be later than the first of the month following the Annuitant's 90th
birthday. In any event, the annuity payout date must be the first day of a
month and must be at least 30 days after the date we receive notice of a
change of date.
ANNUITY PAYMENT AMOUNTS
VARIABLE ANNUITIES
The dollar amount of the first periodic variable annuity payment shall
be derived from the annuity option tables for the sex(es) and age(s) of
the Annuitant and contingent annuitant, if any, on the annuity payout
date. The dollar amount of each variable annuity payment after the
first will be measured by annuity units. The number of annuity units of
each subaccount to be credited to this contract is determined by
dividing that part of the first variable annuity payment apportioned to
each subaccount by the annuity unit value of
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 11
<PAGE> 13
that subaccount for the valuation period used to determine the contract
value for settlement of this contract under these SETTLEMENT
PROVISIONS. The dollar amount of each variable annuity payment after
the first is equal to the number of annuity units credited to this
contract multiplied by the annuity unit value of the applicable
subaccount for the valuation period, selected by us and uniformly
applied, which is not more than 10 valuation periods before the due
date of each such payment.
FIXED ANNUITIES
The dollar amount of the each periodic fixed annuity payment shall be
derived from the annuity option tables for the sex(es) and age(s) of
the Annuitant and contingent annuitant, if any, on the annuity payout
date.
ANNUITY UNIT VALUE
The value of an Annuity Unit for each subaccount was set when the first
annuity payment was made from each subaccount for this class of contracts.
To determine the Annuity Unit value for each later valuation period, (a)
multiply the Annuity Unit value for that subaccount for the immediately
prior valuation period by the Net Investment Factor for that subaccount for
such later valuation period, and then (b) multiply the product by a factor
to neutralize the interest rate of 3% per year assumed in the annuity
option tables. Such factor is 0.9999190 for a one-day valuation period.
CHANGE IN SUBACCOUNT
After variable annuity payments have been made for at least 12 months, you
may, no more than once each 12 months, change all or part of the investment
upon which your variable annuity payments are based from one subaccount to
another. To do this, we will convert the number of Annuity Units being
changed to the number of Annuity Units of the Subaccount to which you are
changing so as to result in the next variable annuity payment being of the
same amount that it would have been without the change. After that,
variable annuity payments will reflect changes in the values of your new
Annuity Units. You must give us notice at least 30 days before the due date
of the first variable annuity payment to which the change will apply.
LIMITATION ON AVAILABILITY OF OPTIONS
If the contingent annuitant is not related to the Annuitant, you may not
elect Option 2 unless we consent and then only if, based upon life
expectancies, less than 50% of the amount so applied would accrue to the
contingent annuitant.
If the amount to be applied under any annuity option is less than $5,000,
such option shall not be available. Settlement shall than be in a single
sum. If the first periodic payment to a payee would be less than $25, we
may pay less often so that such payment will be at least $25.
ALTERNATE ANNUITY OPTION
Instead of the variable annuities provided under this contract, you may
choose an alternate amount and type of periodic installments for fixed
annuity payments. Such alternate annuity options shall be based on the
rates for fixed dollar single premium immediate annuities being issued by
us on the annuity payout date. They may only be elected within 30 days
before that date.
Any withdrawal of part or all of the contract value for settlement under an
alternate annuity option will be exempt from any otherwise applicable
contingent deferred sales charge if at least one of the following
conditions is met:
(a) If withdrawal is before the end of the second contract year, the
annuity income must be payable for the lifetime of the annuitant
and contingent annuitant, if any.
(b) If withdrawal is during the third through fifth contract years,
the annuity income must be payable over a period of not less than
ten years or payable over the lifetime of the annuitant and
contingent annuitant, if any.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 12
<PAGE> 14
(c) If withdrawal is after the fifth contract year, the annuity income
must be payable over a period of not less than five years or
payable over the lifetime of the annuitant and contingent
annuitant, if any.
DEATH BENEFIT AFTER THE ANNUITY PAYOUT DATE
If the Annuitant dies after the annuity payout date, any death benefit
payable will be in accordance with the annuity option chosen.
SPENDTHRIFT PROVISION
Except as otherwise provided in this contract (or in any supplementary
contract issued in exchange for it), an Annuitant or Beneficiary may not
commute, anticipate, assign or otherwise encumber any amounts to be paid in
settlement of this contract. To the extent allowed by law, no such amount
shall be subject to any legal process in payment of any claim against an
Annuitant or Beneficiary.
DESCRIPTION OF ANNUITY OPTIONS
All of these options may be on a fixed or variable annuity basis or both.
LIFE ANNUITY
OPTION 1
(a) NONREFUND. We will make payments during the lifetime of the
Annuitant. No payments are due after the death of the Annuitant.
(b) 5-YEARS CERTAIN. We will make payments for 5 years and after that
during the lifetime of the Annuitant. No payments are due after
the death of the Annuitant or, if later, the end of the 5-year
period certain.
(c) 10-YEARS CERTAIN. We will make payments for 10 years and after
that during the lifetime of the Annuitant. No payments are due
after the death of the Annuitant or, if later, the end of the
10-year period certain.
(d) INSTALLMENT REFUND. We will make payments for a period certain
and after that during the lifetime of the Annuitant. No payments
are due after the death of the Annuitant or, if later, the end of
the period certain. The number of period certain payments is
equal to the amount applied under this installment refund option
divided by the amount of the first annuity payment; provided,
however, that the amount of the final period certain payment
shall be multiplied by that part of the preceding quotient which
is not an integer.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 13
<PAGE> 15
JOINT AND SURVIVOR LIFE ANNUITY
OPTION 2
(a) JOINT AND SURVIVOR NONREFUND. We will make payments during the
joint lifetime of the Annuitant and contingent annuitant. Payments
will then continue during the remaining lifetime of the survivor
of them. No payments are due after the death of the last survivor
of the Annuitant and contingent annuitant.
(b) JOINT AND SURVIVOR WITH 10-YEARS CERTAIN. We will make payments
for 10 years and after that during the joint lifetime of the
Annuitant and contingent annuitant. Payments will then continue
during the remaining lifetime of the survivor of them. No payments
are due after the death of the survivor of the Annuitant and
contingent annuitant or, if later, the end of the 10-year period
certain.
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THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 14
<PAGE> 16
ANNUITY OPTION TABLES
Date of Birth
(1939 and Before)
Installments shown are for a monthly payment for each $1,000 of contract value
applied under an option. Age, as used in these tables, is age as of nearest
birthday. Rates of monthly payments for ages and periods certain not shown, if
allowed by us, will be based on an actuarially equivalent basis. To determine
annual, semi-annual, or quarterly installments, multiply the amounts shown by
11.65, 5.92 or 2.98; respectively.
<TABLE>
<CAPTION>
OPTION 1: LIFE INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
AGE AND SEX AGE AND SEX
OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT
MALE REFUND CERTAIN CERTAIN REFUND FEMALE REFUND CERTAIN CERTAIN REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
51 $4.14 $4.13 $4.10 $3.97 51 $3.80 $3.79 $3.78 $3.71
52 4.21 4.20 4.17 4.03 52 3.86 3.85 3.84 3.76
53 4.29 4.28 4.24 4.09 53 3.92 3.91 3.90 3.81
54 4.37 4.36 4.32 4.16 54 3.98 3.98 3.96 3.87
55 4.46 4.45 4.40 4.23 55 4.05 4.05 4.03 3.93
56 4.55 4.54 4.49 4.30 56 4.13 4.12 4.10 3.99
57 4.65 4.63 4.58 4.37 57 4.20 4.20 4.17 4.05
58 4.75 4.73 4.67 4.45 58 4.29 4.28 4.25 4.12
59 4.86 4.84 4.77 4.53 59 4.37 4.36 4.33 4.19
60 4.98 4.96 4.88 4.62 60 4.47 4.46 4.42 4.27
61 5.11 5.08 4.99 4.71 61 4.57 4.55 4.51 4.35
62 5.24 5.21 5.11 4.81 62 4.67 4.66 4.61 4.43
63 5.39 5.35 5.23 4.92 63 4.78 4.77 4.71 4.52
64 5.54 5.50 5.36 5.02 64 4.90 4.88 4.82 4.61
65 5.71 5.66 5.49 5.14 65 5.03 5.01 4.94 4.70
66 5.88 5.82 5.63 5.25 66 5.17 5.14 5.06 4.81
67 6.07 6.00 5.78 5.37 67 5.31 5.28 5.18 4.92
68 6.27 6.19 5.93 5.51 68 5.47 5.43 5.32 5.03
69 6.49 6.39 6.08 5.64 69 5.63 5.59 5.46 5.15
70 6.72 6.60 6.24 5.79 70 5.82 5.77 5.61 5.28
71 6.96 6.82 6.41 5.93 71 6.01 5.96 5.77 5.41
72 7.22 7.05 6.58 6.10 72 6.22 6.16 5.93 5.56
73 7.50 7.30 6.75 6.27 73 6.45 6.37 6.11 5.71
74 7.79 7.56 6.92 6.43 74 6.70 6.60 6.29 5.87
75 8.11 7.83 7.09 6.62 75 6.97 6.85 6.47 6.05
76 8.45 8.12 7.27 6.83 76 7.26 7.11 6.66 6.23
77 8.82 8.42 7.44 7.03 77 7.57 7.39 6.86 6.41
78 9.21 8.74 7.61 7.24 78 7.90 7.69 7.05 6.62
79 9.62 9.07 7.78 7.46 79 8.27 8.00 7.25 6.83
80 10.07 9.41 7.95 7.66 80 8.66 8.34 7.45 7.05
81 10.55 9.77 8.11 7.94 81 9.09 8.69 7.64 7.29
82 11.06 10.13 8.26 8.19 82 9.55 9.06 7.83 7.55
83 11.60 10.50 8.40 8.43 83 10.06 9.45 8.02 7.78
84 12.18 10.89 8.53 8.76 84 10.60 9.86 8.19 8.07
85 12.80 11.27 8.66 9.07 85 11.19 10.28 8.35 8.38
86 13.45 11.66 8.77 9.40 86 11.82 10.72 8.50 8.65
87 14.14 12.06 8.88 9.70 87 12.50 11.15 8.64 9.00
88 14.89 12.45 8.97 10.07 88 13.24 11.59 8.76 9.29
89 15.69 12.85 9.06 10.34 89 14.02 12.03 8.87 9.69
90 16.56 13.24 9.14 10.83 90 14.86 12.45 8.97 10.07
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 17
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-----------------------------------------------------------------------------------------
ANNUITANT 50 55 60 65 70 75 80 85 90
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.55 $3.72 $3.89 $4.04 $4.17 $4.27 $4.35 $4.40 $4.42
60 3.61 3.82 4.04 4.26 4.47 4.64 4.77 4.86 4.92
65 3.65 3.90 4.17 4.47 4.78 5.06 5.30 5.46 5.57
70 3.69 3.95 4.27 4.65 5.07 5.51 5.90 6.21 6.42
75 3.71 3.99 4.35 4.79 5.32 5.92 6.53 7.07 7.47
80 3.72 4.02 4.40 4.88 5.51 6.27 7.13 7.99 8.71
85 3.73 4.03 4.43 4.95 5.63 6.54 7.64 8.88 10.04
90 3.73 4.04 4.44 4.98 5.71 6.72 8.03 9.63 11.33
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(b) With 10 Years Certain
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-----------------------------------------------------------------------------------------
ANNUITANT 50 55 60 65 70 75 80 85 90
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.55 $3.72 $3.88 $4.04 $4.17 $4.27 $4.33 $4.37 $4.39
60 3.61 3.82 4.04 4.26 4.46 4.63 4.75 4.82 4.86
65 3.65 3.89 4.17 4.47 4.77 5.04 5.25 5.38 5.45
70 3.68 3.95 4.27 4.64 5.05 5.45 5.80 6.03 6.16
75 3.70 3.99 4.34 4.77 5.28 5.83 6.34 6.72 6.94
80 3.72 4.01 4.38 4.85 5.44 6.12 6.80 7.36 7.70
85 3.72 4.02 4.40 4.90 5.53 6.31 7.14 7.85 8.31
90 3.72 4.03 4.41 4.92 5.58 6.41 7.33 8.15 8.70
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Actuarial Basis - Installments shown in these tables are based on the 1983(a)
Mortality Table Projected to 1996 under Scale G with compound interest at the
effective rate of 3% per year.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 18
ANNUITY OPTION TABLES
(1940-1959)
Installments shown are for a monthly payment for each $1,000 of contract value
applied under an option. Age, as used in these tables, is age as of nearest
birthday. Rates of monthly payments for ages and periods certain not shown, if
allowed by us, will be based on an actuarially equivalent basis. To determine
annual, semi-annual, or quarterly installments, multiply the amounts shown by
11.65, 5.92 or 2.98; respectively.
OPTION 1: LIFE INCOME
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AGE AND SEX AGE AND SEX
OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT
- ------------------ -----------------
MALE REFUND CERTAIN CERTAIN REFUND FEMALE REFUND CERTAIN CERTAIN REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
51 $4.07 $4.06 $4.03 $3.91 51 $3.74 $3.74 $3.73 $3.66
52 4.14 4.13 4.10 3.97 52 3.80 3.79 3.78 3.71
53 4.21 4.20 4.17 4.03 53 3.86 3.85 3.84 3.76
54 4.29 4.28 4.24 4.09 54 3.92 3.91 3.90 3.81
55 4.37 4.36 4.32 4.16 55 3.98 3.98 3.96 3.87
56 4.46 4.45 4.40 4.23 56 4.05 4.05 4.03 3.93
57 4.55 4.54 4.49 4.30 57 4.13 4.12 4.10 3.99
58 4.65 4.63 4.58 4.37 58 4.20 4.20 4.17 4.05
59 4.75 4.73 4.67 4.45 59 4.29 4.28 4.25 4.12
60 4.86 4.84 4.77 4.53 60 4.37 4.36 4.33 4.19
61 4.98 4.96 4.88 4.62 61 4.47 4.46 4.42 4.27
62 5.11 5.08 4.99 4.71 62 4.57 4.55 4.51 4.35
63 5.24 5.21 5.11 4.81 63 4.67 4.66 4.61 4.43
64 5.39 5.35 5.23 4.92 64 4.78 4.77 4.71 4.52
65 5.54 5.50 5.36 5.02 65 4.90 4.88 4.82 4.61
66 5.71 5.66 5.49 5.14 66 5.03 5.01 4.94 4.70
67 5.88 5.82 5.63 5.25 67 5.17 5.14 5.06 4.81
68 6.07 6.00 5.78 5.37 68 5.31 5.28 5.18 4.92
69 6.27 6.19 5.93 5.51 69 5.47 5.43 5.32 5.03
70 6.49 6.39 6.08 5.64 70 5.63 5.59 5.46 5.15
71 6.72 6.60 6.24 5.79 71 5.82 5.77 5.61 5.28
72 6.96 6.82 6.41 5.93 72 6.01 5.96 5.77 5.41
73 7.22 7.05 6.58 6.10 73 6.22 6.16 5.93 5.56
74 7.50 7.30 6.75 6.27 74 6.45 6.37 6.11 5.71
75 7.79 7.56 6.92 6.43 75 6.70 6.60 6.29 5.87
76 8.11 7.83 7.09 6.62 76 6.97 6.85 6.47 6.05
77 8.45 8.12 7.27 6.83 77 7.26 7.11 6.66 6.23
78 8.82 8.42 7.44 7.03 78 7.57 7.39 6.86 6.41
79 9.21 8.74 7.61 7.24 79 7.90 7.69 7.05 6.62
80 9.62 9.07 7.78 7.46 80 8.27 8.00 7.25 6.83
81 10.07 9.41 7.95 7.66 81 8.66 8.34 7.45 7.05
82 10.55 9.77 8.11 7.94 82 9.09 8.69 7.64 7.29
83 11.06 10.13 8.26 8.19 83 9.55 9.06 7.83 7.35
84 11.60 10.50 8.40 8.43 84 10.06 9.45 8.02 7.78
85 12.18 10.89 8.53 8.76 85 10.60 9.86 8.19 8.07
86 12.80 11.27 8.66 9.07 86 11.19 10.28 8.35 8.38
87 13.45 11.66 8.77 9.40 87 11.82 10.72 8.50 8.65
88 14.14 12.06 8.88 9.70 88 12.50 11.15 8.64 9.00
89 14.89 12.45 8.97 10.07 89 13.24 11.59 8.76 9.29
90 15.69 12.85 9.06 10.34 90 14.02 12.03 8.87 9.69
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 19
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.66 $3.82 $3.97 $4.09 $4.19 $4.26 $4.31 $4.34
60 3.76 3.97 4.18 4.37 4.54 4.66 4.75 4.80
65 3.83 4.09 4.38 4.66 4.93 5.15 5.31 5.41
70 3.89 4.19 4.54 4.94 5.34 5.71 6.00 6.20
75 3.92 4.26 4.67 5.17 5.73 6.29 6.80 7.18
80 3.95 4.30 4.76 5.34 6.05 6.85 7.66 8.34
85 3.96 4.33 4.82 5.46 6.30 7.33 8.48 9.58
90 3.97 4.35 4.86 5.54 6.46 7.68 9.17 10.77
- -----------------------------------------------------------------------------------------------
</TABLE>
(b) With 10 Years Certain
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.66 $3.82 $3.97 $4.09 $4.18 $4.25 $4.29 $4.31
60 3.76 3.97 4.18 4.37 4.53 4.64 4.71 4.75
65 3.83 4.09 4.37 4.65 4.91 5.11 5.24 5.31
70 3.88 4.18 4.53 4.92 5.30 5.63 5.86 5.99
75 3.92 4.25 4.66 5.13 5.65 6.15 6.53 6.75
80 3.94 4.29 4.74 5.29 5.93 6.60 7.15 7.51
85 3.95 4.31 4.78 5.38 6.12 6.92 7.65 8.13
90 3.96 4.33 4.81 5.43 6.22 7.12 7.96 8.55
- -----------------------------------------------------------------------------------------------
</TABLE>
Actuarial Basis - Installments shown in these tables are based on the 1983(a)
Mortality Table Projected to 1996 under Scale G (set back one year) with
compound interest at the effective rate of 3% per year.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 20
ANNUITY OPTION TABLES
(1960-1979)
Installments shown are for a monthly payment for each $1,000 of contract value
applied under an option. Age, as used in these tables, is age as of nearest
birthday. Rates of monthly payments for ages and periods certain not shown, if
allowed by us, will be based on an actuarially equivalent basis. To determine
annual, semi-annual, or quarterly installments, multiply the amounts shown by
11.65, 5.92 or 2.98; respectively.
OPTION 1: LIFE INCOME
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AGE AND SEX AGE AND SEX
OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT
- ------------------ -----------------
MALE REFUND CERTAIN CERTAIN REFUND FEMALE REFUND CERTAIN CERTAIN REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
52 $4.07 $4.06 $4.03 $3.91 52 $3.74 $3.74 $3.73 $3.66
53 4.14 4.13 4.10 3.97 53 3.80 3.79 3.78 3.71
54 4.21 4.20 4.17 4.03 54 3.86 3.85 3.84 3.76
55 4.29 4.28 4.24 4.09 55 3.92 3.91 3.90 3.81
56 4.37 4.36 4.32 4.16 56 3.98 3.98 3.96 3.87
57 4.46 4.45 4.40 4.23 57 4.05 4.05 4.03 3.93
58 4.55 4.54 4.49 4.30 58 4.13 4.12 4.10 3.99
59 4.65 4.63 4.58 4.37 59 4.20 4.20 4.17 4.05
60 4.75 4.73 4.67 4.45 60 4.29 4.28 4.25 4.12
61 4.86 4.84 4.77 4.53 61 4.37 4.36 4.33 4.19
62 4.98 4.96 4.88 4.62 62 4.47 4.46 4.42 4.27
63 5.11 5.08 4.99 4.71 63 4.57 4.55 4.51 4.35
64 5.24 5.21 5.11 4.81 64 4.67 4.66 4.61 4.43
65 5.39 5.35 5.23 4.92 65 4.78 4.77 4.71 4.52
66 5.54 5.50 5.36 5.02 66 4.90 4.88 4.82 4.61
67 5.71 5.66 5.49 5.14 67 5.03 5.01 4.94 4.70
68 5.88 5.82 5.63 5.25 68 5.17 5.14 5.06 4.81
69 6.07 6.00 5.78 5.37 69 5.31 5.28 5.18 4.92
70 6.27 6.19 5.93 5.51 70 5.47 5.43 5.32 5.03
71 6.49 6.39 6.08 5.64 71 5.63 5.59 5.46 5.15
72 6.72 6.60 6.24 5.79 72 5.82 5.77 5.61 5.28
73 6.96 6.82 6.41 5.93 73 6.01 5.96 5.77 5.41
74 7.22 7.05 6.58 6.10 74 6.22 6.16 5.93 5.56
75 7.50 7.30 6.75 6.27 75 6.45 6.37 6.11 5.71
76 7.79 7.56 6.92 6.43 76 6.70 6.60 6.29 5.87
77 8.11 7.83 7.09 6.62 77 6.97 6.85 6.47 6.05
78 8.45 8.12 7.27 6.83 78 7.26 7.11 6.66 6.23
79 8.82 8.42 7.44 7.03 79 7.57 7.39 6.86 6.41
80 9.21 8.74 7.61 7.24 80 7.90 7.69 7.05 6.62
81 9.62 9.07 7.78 7.46 81 8.27 8.00 7.25 6.83
82 10.07 9.41 7.95 7.66 82 8.66 8.34 7.45 7.05
83 10.55 9.77 8.11 7.94 83 9.09 8.69 7.64 7.29
84 11.06 10.13 8.26 8.19 84 9.55 9.06 7.83 7.55
85 11.60 10.50 8.40 8.43 85 10.06 9.45 8.02 7.78
86 12.18 10.89 8.53 8.76 86 10.60 9.86 8.19 8.07
87 12.80 11.27 8.66 9.07 87 11.19 10.28 8.35 8.38
88 13.45 11.66 8.77 9.40 88 11.82 10.72 8.50 8.65
89 14.14 12.06 8.88 9.70 89 12.50 11.15 8.64 9.00
90 14.89 12.45 8.97 10.07 90 13.24 11.59 8.76 9.29
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 21
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.61 $3.76 $3.90 $4.02 $4.11 $4.18 $4.23 $4.25
60 3.70 3.90 4.10 4.28 4.44 4.56 4.64 4.69
65 3.77 4.02 4.28 4.55 4.80 5.01 5.16 5.26
70 3.82 4.11 4.44 4.81 5.19 5.53 5.81 6.00
75 3.86 4.18 4.56 5.02 5.55 6.08 6.55 6.91
80 3.88 4.22 4.65 5.19 5.85 6.59 7.34 7.99
85 3.90 4.25 4.70 5.30 6.08 7.03 8.10 9.14
90 3.91 4.26 4.74 5.37 6.23 7.36 8.75 10.25
- -----------------------------------------------------------------------------------------------
</TABLE>
(b) With 10 Years Certain
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.61 $3.76 $3.90 $4.02 $4.11 $4.17 $4.21 $4.23
60 3.70 3.90 4.10 4.28 4.43 4.54 4.61 4.65
65 3.77 4.01 4.28 4.54 4.79 4.98 5.11 5.18
70 3.82 4.10 4.43 4.79 5.15 5.47 5.70 5.83
75 3.85 4.17 4.55 5.00 5.49 5.96 6.34 6.57
80 3.88 4.21 4.63 5.15 5.76 6.39 6.95 7.31
85 3.89 4.23 4.67 5.24 5.94 6.71 7.44 7.95
90 3.89 4.24 4.70 5.29 6.04 6.91 7.76 8.39
- -----------------------------------------------------------------------------------------------
</TABLE>
Actuarial Basis - Installments shown in these tables are based on the 1983(a)
Mortality Table Projected to 1996 under Scale G (set back two years) with
compound interest at the effective rate of 3% per year.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 22
ANNUITY OPTION TABLES
(1980-1999)
Installments shown are for a monthly payment for each $1,000 of contract value
applied under an option. Age, as used in these tables, is age as of nearest
birthday. Rates of monthly payments for ages and periods certain not shown, if
allowed by us, will be based on an actuarially equivalent basis. To determine
annual, semi-annual, or quarterly installments, multiply the amounts shown by
11.65, 5.92 or 2.98; respectively.
OPTION 1: LIFE INCOME
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AGE AND SEX AGE AND SEX
OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT
- ------------------ -----------------
MALE REFUND CERTAIN CERTAIN REFUND FEMALE REFUND CERTAIN CERTAIN REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
53 $4.07 $4.06 $4.03 $3.91 53 $3.74 $3.74 $3.73 $3.66
54 4.14 4.13 4.10 3.97 54 3.80 3.79 3.78 3.71
55 4.21 4.20 4.17 4.03 55 3.86 3.85 3.84 3.76
56 4.29 4.28 4.24 4.09 56 3.92 3.91 3.90 3.81
57 4.37 4.36 4.32 4.16 57 3.98 3.98 3.96 3.87
58 4.46 4.45 4.40 4.23 58 4.05 4.05 4.03 3.93
59 4.55 4.54 4.49 4.30 59 4.13 4.12 4.10 3.99
60 4.65 4.63 4.58 4.37 60 4.20 4.20 4.17 4.05
61 4.75 4.73 4.67 4.45 61 4.29 4.28 4.25 4.12
62 4.86 4.84 4.77 4.53 62 4.37 4.36 4.33 4.19
63 4.98 4.96 4.88 4.62 63 4.47 4.46 4.42 4.27
64 5.11 5.08 4.99 4.71 64 4.57 4.55 4.51 4.35
65 5.24 5.21 5.11 4.81 65 4.67 4.66 4.61 4.43
66 5.39 5.35 5.23 4.92 66 4.78 4.77 4.71 4.52
67 5.54 5.50 5.36 5.02 67 4.90 4.88 4.82 4.61
68 5.71 5.66 5.49 5.14 68 5.03 5.01 4.94 4.70
69 5.88 5.82 5.63 5.25 69 5.17 5.14 5.06 4.81
70 6.07 6.00 5.78 5.37 70 5.31 5.28 5.18 4.92
71 6.27 6.19 5.93 5.51 71 5.47 5.43 5.32 5.03
72 6.49 6.39 6.08 5.64 72 5.63 5.59 5.46 5.15
73 6.72 6.60 6.24 5.79 73 5.82 5.77 5.61 5.28
74 6.96 6.82 6.41 5.93 74 6.01 5.96 5.77 5.41
75 7.22 7.05 6.58 6.10 75 6.22 6.16 5.93 5.56
76 7.50 7.30 6.75 6.27 76 6.45 6.37 6.11 5.71
77 7.79 7.56 6.92 6.43 77 6.70 6.60 6.29 5.87
78 8.11 7.83 7.09 6.62 78 6.97 6.85 6.47 6.05
79 8.45 8.12 7.27 6.83 79 7.26 7.11 6.66 6.23
80 8.82 8.42 7.44 7.03 80 7.57 7.39 6.86 6.41
81 9.21 8.74 7.61 7.24 81 7.90 7.69 7.05 6.62
82 9.62 9.07 7.78 7.46 82 8.27 8.00 7.25 6.83
83 10.07 9.41 7.95 7.66 83 8.66 8.34 7.45 7.05
84 10.55 9.77 8.11 7.94 84 9.09 8.69 7.64 7.29
85 11.06 10.13 8.26 8.19 85 9.55 9.06 7.83 7.55
86 11.60 10.50 8.40 8.43 86 10.06 9.45 8.02 7.78
87 12.18 10.89 8.53 8.76 87 10.60 9.86 8.19 8.07
88 12.80 11.27 8.66 9.07 88 11.19 10.28 8.35 8.38
89 13.45 11.66 8.77 9.40 89 11.89 10.72 8.50 8.65
90 14.14 12.06 8.88 9.70 90 12.50 11.15 8.64 9.00
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 23
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.56 $3.71 $3.84 $3.95 $4.04 $4.10 $4.15 $4.18
60 3.65 3.84 4.02 4.20 4.34 4.46 4.54 4.59
65 3.71 3.95 4.20 4.45 4.68 4.88 5.02 5.12
70 3.76 4.03 4.35 4.69 5.04 5.36 5.62 5.81
75 3.80 4.10 4.46 4.89 5.38 5.87 6.32 6.66
80 3.82 4.14 4.54 5.05 5.66 6.35 7.05 7.66
85 3.83 4.17 4.59 5.15 5.87 6.76 7.76 8.73
90 3.84 4.18 4.63 5.22 6.02 7.07 8.35 9.76
- -----------------------------------------------------------------------------------------------
</TABLE>
(b) With 10 Years Certain
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.56 $3.71 $3.84 $3.95 $4.03 $4.10 $4.14 $4.16
60 3.65 3.83 4.02 4.19 4.34 4.44 4.51 4.55
65 3.71 3.94 4.19 4.44 4.67 4.86 4.98 5.05
70 3.76 4.03 4.34 4.68 5.02 5.32 5.54 5.67
75 3.79 4.09 4.45 4.87 5.33 5.78 6.15 6.39
80 3.82 4.13 4.53 5.01 5.59 6.20 6.74 7.12
85 3.83 4.15 4.57 5.10 5.76 6.51 7.23 7.76
90 3.83 4.16 4.59 5.15 5.86 6.71 7.56 8.22
- -----------------------------------------------------------------------------------------------
</TABLE>
Actuarial Basis - Installments shown in these tables are based on the 1983(a)
Mortality Table Projected to 1996 under Scale G (set back three years) with
compound interest at the effective rate of 3% per year.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 24
- -------------------------------------------
ANNUITY OPTION TABLES
(2000 +)
Installments shown are for a monthly payment for each $1,000 of contract value
applied under an option. Age, as used in these tables, is age as of nearest
birthday. Rates of monthly payments for ages and periods certain not shown, if
allowed by us, will be based on an actuarially equivalent basis. To determine
annual, semi-annual, or quarterly installments, multiply the amounts shown by
11.65, 5.92 or 2.98; respectively.
OPTION 1: LIFE INCOME
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
AGE AND SEX AGE AND SEX
OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT OF ANNUITANT NON- 5 YEARS 10 YEARS INSTALLMENT
- ------------------ -----------------
MALE REFUND CERTAIN CERTAIN REFUND FEMALE REFUND CERTAIN CERTAIN REFUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
54 $4.07 $4.06 $4.03 $3.91 54 $3.74 $3.74 $3.73 $3.66
55 4.14 4.13 4.10 3.97 55 3.80 3.79 3.78 3.71
56 4.21 4.20 4.17 4.03 56 3.86 3.85 3.84 3.76
57 4.29 4.28 4.24 4.09 57 3.92 3.91 3.90 3.81
58 4.37 4.36 4.32 4.16 58 3.98 3.98 3.96 3.87
59 4.46 4.45 4.40 4.23 59 4.05 4.05 4.03 3.93
60 4.55 4.54 4.49 4.30 60 4.13 4.12 4.10 3.99
61 4.65 4.63 4.58 4.37 61 4.20 4.20 4.17 4.05
62 4.75 4.73 4.67 4.45 62 4.29 4.28 4.25 4.12
63 4.86 4.84 4.77 4.53 63 4.37 4.36 4.33 4.19
64 4.98 4.96 4.88 4.62 64 4.47 4.46 4.42 4.27
65 5.11 5.08 4.99 4.71 65 4.57 4.55 4.51 4.35
66 5.24 5.21 5.11 4.81 66 4.67 4.66 4.61 4.43
67 5.39 5.35 5.23 4.92 67 4.78 4.77 4.71 4.52
68 5.54 5.50 5.36 5.02 68 4.90 4.88 4.82 4.61
69 5.71 5.66 5.49 5.14 69 5.03 5.01 4.94 4.70
70 5.88 5.82 5.63 5.25 70 5.17 5.14 5.06 4.81
71 6.07 6.00 5.78 5.37 71 5.31 5.28 5.18 4.92
72 6.27 6.19 5.93 5.51 72 5.47 5.43 5.32 5.03
73 6.49 6.39 6.08 5.64 73 5.63 5.59 5.46 5.15
74 6.72 6.60 6.24 5.79 74 5.82 5.77 5.61 5.28
75 6.96 6.82 6.41 5.93 75 6.01 5.96 5.77 5.41
76 7.22 7.05 6.58 6.10 76 6.22 6.16 5.93 5.56
77 7.50 7.30 6.75 6.27 77 6.45 6.37 6.11 5.71
78 7.79 7.56 6.92 6.43 78 6.70 6.60 6.29 5.87
79 8.11 7.83 7.09 6.62 79 6.97 6.85 6.47 6.05
80 8.45 8.12 7.27 6.83 80 7.26 7.11 6.66 6.23
81 8.82 8.42 7.44 7.03 81 7.57 7.39 6.86 6.41
82 9.21 8.74 7.61 7.24 82 7.90 7.69 7.05 6.62
83 9.62 9.07 7.78 7.46 83 8.27 8.00 7.25 6.83
84 10.07 9.41 7.95 7.66 84 8.66 8.34 7.45 7.05
85 10.55 9.77 8.11 7.94 85 9.09 8.69 7.64 7.29
86 11.06 10.13 8.26 8.19 86 9.55 9.06 7.83 7.55
87 11.60 10.50 8.40 8.43 87 10.06 9.45 8.02 7.78
88 12.18 10.89 8.53 8.76 88 10.60 9.86 8.19 8.07
89 12.80 11.27 8.66 9.07 89 11.19 10.28 8.35 8.38
90 13.45 11.66 8.77 9.40 90 11.82 10.72 8.50 8.65
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 25
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.52 $3.65 $3.78 $3.88 $3.97 $4.03 $4.07 $4.10
60 3.60 3.78 3.95 4.12 4.25 4.36 4.44 4.49
65 3.66 3.88 4.12 4.35 4.57 4.76 4.90 4.99
70 3.71 3.96 4.26 4.58 4.91 5.21 5.46 5.63
75 3.74 4.02 4.36 4.77 5.22 5.68 6.10 6.43
80 3.76 4.06 4.44 4.91 5.48 6.13 6.78 7.35
85 3.78 4.09 4.49 5.01 5.68 6.51 7.43 8.35
90 3.78 4.10 4.52 5.08 5.82 6.79 7.99 9.30
- -----------------------------------------------------------------------------------------------
</TABLE>
(b) With 10 Years Certain
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
AGE AGE OF
OF MALE FEMALE CONTINGENT ANNUITANT
-------------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.52 $3.65 $3.78 $3.88 $3.96 $4.03 $4.06 $4.09
60 3.60 3.77 3.95 4.11 4.25 4.35 4.42 4.46
65 3.66 3.88 4.11 4.35 4.56 4.74 4.86 4.93
70 3.71 3.96 4.25 4.57 4.89 5.17 5.39 5.52
75 3.74 4.02 4.36 4.75 5.19 5.61 5.97 6.21
80 3.76 4.06 4.43 4.89 5.43 6.01 6.54 6.92
85 3.77 4.08 4.47 4.97 5.60 6.31 7.02 7.56
90 3.78 4.09 4.50 5.02 5.69 6.50 7.35 8.04
- -----------------------------------------------------------------------------------------------
</TABLE>
Actuarial Basis - Installments shown in these tables are based on the 1983(a)
Mortality Table Projected to 1996 under Scale G (set back four years) with
compound interest at the effective rate of 3% per year.
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 1
EXHIBIT (5)
VARIABLE ANNUITY APPLICATION
FORM V-4896-A
<PAGE> 2
THE OHIO NATIONAL LIFE INSURANCE COMPANY
VARIABLE ANNUITY APPLICATION TO: P.O. BOX 2669, CINCINNATI, OHIO 45201
1. Annuitant's Name:
First Name Middle Initial Last Name
_______________________________________________________________________________
Sex:[ ] Male [ ] Female Date of Birth ___________
Annuitant's Social Security Number: ___________________
_______________________________________________________________________________
Address for Mail (if different, give residence address in number 10)
_______________________________________________________________________________
2. Will the annuity applied for replace or change any existing insurance or
annuities? [ ] Yes [ ]No (If "Yes", submit full details including name of
company, plan and amount, date issued and reasons for replacement, also
replacement material if required.)
3. Type of Annuity Contract:
[ ] This Application is for a contract to be issued pursuant to the provisions
of the Internal Revenue Code, and is meant to fund a:
[ ] Qualified Pension or Profit Sharing Plan Section 401) [ ]Owner -
Employee
[ ] Tax Deferred Annuity (See Section 403(b) Acknowledgment)
[ ] Individual Retirement Annuity/IRA (Section 408)
[ ] Rollover [ ]Simplified Employee Pension Plan/SEPP
[ ] Other Qualified Annuity (Please explain in Item 10)
[ ] This is not a Tax Qualified Annuity
4. Owner (Note: Do Not Complete if Owner and Annuitant are the Same;)
Relationship of Owner to Annuitant _______________________________________
Owner's Name: ____________________________________________________________
Owner's Social Security Number Or Tax I.D. No. ___________________________
__________________________________________________________________________
Owner's Address
5. Full Name of Beneficiary for any death benefit
Primary: ___________________________________ Relationship
Address: To Annuitant
______________________
Contingent: ________________________________
Address:
6. Is a Check accompanying this application?
[ ] Yes: $ __________________ [ ]No
7. Mode of Payment
Single Payment: $ ________________
Flexible Payment: $ ________________
Annual: $ ________________
Monthly $ ________________
Quarterly $ ________________
Semi-Annual $ ________________
Other: $ ________________
ABC Plan for $ __________/Mo. (Form 4030 attached). Will this contract be added
to an existing Salary Savings Bill or Pension Trust Bill?
If Yes, indicate Group No. __________________
Proceeds from Ohio National Contract(s) (List Policy Nos.)
_______________________________________________________________________________
8. Allocation of Purchase Payments (EACH MUST BE A WHOLE PERCENT AND TOTAL
MUST EQUAL 100%)
_____ % Fixed _____ % Aggressive Growth
_____ % Equity _____ % Core Growth
_____ % Money Market _____ % Growth & Income
_____ % Bond _____ % S&P 500 Index
_____ % Omni _____ % Social Awareness
_____ % International _____ % Emerging Markets
_____ % Capital Appreciation _____ % High Income
_____ % Small Cap _____ % Equity - Income
_____ % Global Contrarian _____ % Growth
9. Telephone Transfers are authorized as described in the prospectus:
[ ] No [ ] Yes - Owner's initials ___________
_______________________________________________________________________________
10. Additional Directions and Remarks:
It is agreed that the contract applied for shall not take effect until the later
of (1) the day we issue the contract; or (2) when we receive at our home office,
the first payment required under the contract. The information above is true and
complete to the best of the applicant's knowledge and belief and is correctly
recorded. The proposed owner agrees to be bound by the representations herein
and acknowledges the receipt of a current Prospectus describing the Variable
Annuity. No Agent may: (1) make or change contracts; (2) extend the time for
making payments; or (3) waive any of our rights or requirements.
I UNDERSTAND THAT THE ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THE CONTRACT
APPLIED FOR, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
403(B) TAX SHELTERED ANNUITY ACKNOWLEDGMENT:
I acknowledge that distributions from the contract attributable to contributions
made under a salary reduction agreement (and the earning thereon) may be paid
out only when I (a) attain age 59-1/2, or (b) separate from service, or (c) die,
or (d) become disabled. If hardship withdrawals are allowed under the plan,
distributions from the contract of amounts contributed by salary reduction, but
not the earnings on such amounts, will also be allowed.
STATEMENT OF AGENT I certify that: (1) the applicant signed this application in
my presence; (2) I am authorized and qualified to discuss the contract applied
for; and (3) to the best of my knowledge
Replacement [ ] is [ ] is not involved.
Signature of Agent:
Print Full Name Of Agent:
Signed At:_____________________________ Date Signed:_______________________
Signature Of Annuitant: _____________________________________________________
Signature Of Applicant (if other than Annuitant):
<PAGE> 1
EXHIBIT (13)
Computation of Performance Data
<PAGE> 2
Annual Report Calculations
Equity
<TABLE>
<CAPTION>
TOP Retirement Fund Fund
Year ROF Value TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/68 10.000000 8.82% 8.88% 9.18% 8.46% 8.70% 1267.64% 10.17%
12/31/69 1.0090 10.090000
12/31/70 1.0763 10.859867
12/31/71 1.0766 11.691733
12/31/72 1.1340 13.258425
12/31/73 0.8989 11.917998
12/31/74 0.8047 9.590413
12/31/75 1.1985 11.494110
12/31/76 1.1680 13.425121
12/31/77 0.9116 12.238340
12/31/78 1.0726 13.126844
12/31/79 1.1587 15.210074
12/31/80 1.4147 21.517691
12/31/81 0.9707 20.887223
12/31/82 1.2874 26.890211
12/31/83 1.1849 31.862211
12/31/84 0.9912 31.581823
12/31/85 1.2369 39.063557 11.96% 12.02% 12.33% 11.59% 11.83% 250.11% 13.35%
12/31/86 1.2331 48.169272
12/31/87 1.1082 53.381187
12/31/88 1.1503 61.404380
12/31/89 1.2321 75.656336
12/31/90 0.9614 72.736002 12.07% 12.13% 12.44% 11.70% 11.94% 88.03% 13.46%
12/31/91 1.2018 87.414127
12/31/92 1.0754 94.005152
12/31/93 1.1409 107.250478
12/31/94 1.0025 107.518604 25.65% 25.71% 26.07% 25.22% 25.51% 27.20% 27.20%
12/31/95 1.2720 136.763665
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Money Market
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
Year ROR Value TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/80 10.000000 6.25% 6.31% 6.89% 5.90% 6.13% 208.04% 7.57%
12/31/80 1.0483 10.483000
12/31/81 1.1625 12.186488
12/31/82 1.1227 13.681770
12/31/83 1.0861 14.859770
12/31/84 1.1011 16.362093
12/31/85 1.0775 17.630155 4.44% 4.50% 5.23% 4.09% 4.33% 74.72% 5.74%
12/31/86 1.0630 18.740855
12/31/87 1.0628 19.917780
12/31/88 1.0713 21.337918
12/31/89 1.0889 23.234859
12/31/90 1.0789 25.068089 2.93% 2.99% 3.28% 2.59% 2.82% 22.88% 4.21%
12/31/91 1.0554 26.456861
12/31/92 1.0317 27.295544
12/31/93 1.0274 28.043442
12/31/94 1.0400 29.165179 4.32% 4.38% 4.67% 3.97% 4.21% 5.62% 5.62%
12/31/95 1.0562 30.804262
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
BOND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
FUND TOP RETIREMENT FUND FUND
YEAR ROR VALUE TOP A TOP B TOP+ EXPLORER ADVANTAGE CUMULATIVE ANNUALIZED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/02/82 10.000000 7.70% 7.77% 8.07% 7.33% 7.59% 212.58% 9.05%
12/31/82 1.0060 10.060000
12/31/83 1.0263 10.324578
12/31/84 1.1215 11.579014
12/31/85 1.2153 14.071976 6.98% 7.04% 7.34% 6.62% 6.86% 122.13% 8.31%
12/31/86 1.1249 15.829566
12/31/87 1.0081 15.957785
12/31/88 1.0674 17.033340
12/31/89 1.1071 18.857611
12/31/90 1.0782 20.332276 7.64% 7.70% 8.00% 7.29% 7.53% 53.74% 8.98%
12/31/91 1.1296 22.967339
12/31/92 1.0754 24.699076
12/31/93 1.1069 27.339407
12/31/94 0.9616 26.289574 17.44% 17.50% 17.83% 17.05% 17.31% 18.90% 18.90%
12/31/95 1.1890 31.258304
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
OMNI
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
FUND TOP RETIREMENT FUND FUND
YEAR ROR VALUE TOP A TOP B TOP+ EXPLORER ADVANTAGE CUMULATIVE ANNUALIZED
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/10/84 10.000000 9.85% 9.91% 10.22% 9.49% 9.73% 232.74% 11.22%
12/31/84 1.0374 10.374000
12/31/85 1.1559 11.991307
12/31/86 1.1794 14.142547 9.38% 9.44% 9.75% 9.02% 9.27% 135.28% 10.75%
12/31/87 0.9832 13.904952
12/31/88 1.1503 15.994867
12/31/89 1.1546 18.467673
12/31/90 1.0191 18.820405 10.69% 10.75% 11.07% 10.33% 10.58% 76.80% 12.07%
12/31/91 1.1815 22.236309
12/31/92 1.0860 24.148632
12/31/93 1.1285 27.251731
12/31/94 0.9947 27.107297 21.25% 21.31% 21.66% 20.84% 21.12% 22.75% 22.75%
12/31/95 1.2275 33.274207
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
International
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
YEAR ROR VALUE TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5/03/93 10.000000 15.41% 15.48% 15.80% 15.05% 15.29% 51.38% 16.87%
12/31/93 1.2496 12.496000
12/31/94 1.0807 13.504427 10.73% 10.79% 11.10% 10.36% 10.61% 12.10% 12.10%
12/31/95 1.1210 15.138463
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Small Cap
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
YEAR ROR VALUE TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4/30/94 10.000000 31.48% 31.56% 31.92% 31.11% 31.34% 61.29% 33.18%
12/31/94 1.2126 12.126000 31.38% 31.44% 31.82% 30.94% 31.24% 33.01% 33.01%
12/31/95 1.3301 16.128793
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Capital
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
YEAR ROR VALUE TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4/30/94 10.000000 14.59% 14.67% 14.97% 14.23% 14.46% 28.17% 16.04%
12/31/94 1.0453 10.453000 21.12% 21.18% 21.52% 20.71% 20.98% 22.62% 22.62%
12/31/95 1.2262 12.817469
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Aggressive
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
YEAR ROR VALUE TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/31/95 10.000000 25.78% 25.84% 26.10% 25.46% 25.68% 26.95% 37.53%
12/31/95 1.2695 12.695000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Global
- -----------------------------------------------------------------------------------------------------------------------------------
Fund TOP Retirement Fund Fund
Year ROR Value TOP A TOP B TOP + EXPLORER Advantage Cumulative Annualized
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/31/95 10.000000 7.89% 7.95% 8.16% 7.61% 7.80% 8.89% 12.05%
12/31/95 1.0889 10.889000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 7
Average Annual Total Returns
<TABLE>
<CAPTION>
One Five Life of
Portfolio Year Years Fund*
- --------- ---- ----- -------
<S> <C> <C> <C>
High Income 20.72% 18.92% 11.47%
Equity-Income 35.09% 21.32% 13.83%
Growth 35.36% 20.78% 14.83%
<FN>
* High Income, Equity-Income and Growth portfolios commenced operations October
9, 1986.
</TABLE>
Source: Registration Statement (Part B, page 21) for Variable Insurance
Products Fund (Fidelity Investments)
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000073981
<NAME> OHIO NATIONAL LIFE INSURANCE CO.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<DEBT-HELD-FOR-SALE> 2,547,763
<DEBT-CARRYING-VALUE> 672,372
<DEBT-MARKET-VALUE> 766,057
<EQUITIES> 71,301
<MORTGAGE> 898,099
<REAL-ESTATE> 41,429
<TOTAL-INVEST> 4,480,916
<CASH> 8,385
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 193,375
<TOTAL-ASSETS> 5,292,375
<POLICY-LOSSES> 4,039,611
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 64,627
<POLICY-HOLDER-FUNDS> 15,080
<NOTES-PAYABLE> 49,739
<COMMON> 0
0
0
<OTHER-SE> 494,443
<TOTAL-LIABILITY-AND-EQUITY> 5,292,375
191,275
<INVESTMENT-INCOME> 355,027
<INVESTMENT-GAINS> (2,751)
<OTHER-INCOME> 8,150
<BENEFITS> 396,155
<UNDERWRITING-AMORTIZATION> 21,471
<UNDERWRITING-OTHER> 70,255
<INCOME-PRETAX> 63,820
<INCOME-TAX> 24,903
<INCOME-CONTINUING> 38,917
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,917
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 3,613,422
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 373,108
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 4,039,611
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000073981
<NAME> OHIO NATIONAL VARIABLE ACCOUNT A
<SERIES>
<NUMBER> 1
<NAME> EQUITY
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 50,343,780
<INVESTMENTS-AT-VALUE> 69,436,065
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 69,436,065
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 351,224
<TOTAL-LIABILITIES> 351,224
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,937,882
<SHARES-COMMON-PRIOR> 1,653,383
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 69,084,841
<DIVIDEND-INCOME> 1,723,423
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 651,801
<NET-INVESTMENT-INCOME> 1,071,622
<REALIZED-GAINS-CURRENT> 904,829
<APPREC-INCREASE-CURRENT> 11,625,942
<NET-CHANGE-FROM-OPS> 13,602,393
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 11,173,320
<NUMBER-OF-SHARES-REDEEMED> 5,766,842
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
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