<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. 28 /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) 794-6100
(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 registration statement as is practicable.
Registrant is registering an indefinite amount of securities 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) of Rule 485
--- on (date) pursuant to paragraph (b) of Rule 485
--- 60 days after filing pursuant to paragraph (a)(1) of Rule 485
--- on (date) pursuant to paragraph (a)(1) 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 Not applicable
5 Ohio National Life
Ohio National Variable Account A
The Funds
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 Undertakings and Representations
</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.
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
eligible investment companies ("Funds"), prior to the annuity payout date,
and the amount of each annuity payment will vary with the investment performance
of the Funds 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 initial purchase payment is $25,000. Payments after the first
payment may be made in amounts of at least $500 at any time. Ohio National Life
reserves the right to restrict total purchase payments in excess of $1,000,000.
Purchase payments are allocated to one or more (but not more than ten)
subaccounts of Ohio National Variable Account A ("VAA") and/or the Guaranteed
Account 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 Funds. There are presently 8 Funds with 29
portfolios available for these contracts. See page 2 for the current list of
Funds and their respective available investment portfolios. See the accompanying
prospectuses of the Funds which might also contain information about portfolios
that are not available for these contracts.
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 6% of the amount withdrawn
may be assessed. 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 10 days of their delivery (or such longer period required by state law).
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 , 1998 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 PROSPECTUSES OF THE FUNDS.
,1998
<PAGE> 6
AVAILABLE FUNDS
Ohio National Fund, Inc.: Money Market Portfolio, Bond Portfolio, Capital
Appreciation Portfolio, Growth & Income Portfolio, S&P 500 Index Portfolio,
Equity Income Portfolio, High Yield Bond Portfolio, Large Cap Value Portfolio.
Goldman Sachs Variable Insurance Trust: Goldman Sachs Growth & Income Fund,
Goldman Sachs CORE U.S. Equity Fund, Goldman Sachs Capital Growth Fund, Goldman
Sachs Global Income Fund. Janus Aspen Series: Growth Portfolio, International
Growth Portfolio, Worldwide Growth Portfolio, Balanced Portfolio. JPM Series
Trust II: JPM Small Company Portfolio. Montgomery Funds III: Montgomery Small
Cap Opportunities Fund, Emerging Markets Fund. Morgan Stanley Universal Funds,
Inc.: Fixed Income Portfolio, U.S. Real Estate Portfolio, Value Portfolio,
Emerging Markets Equity Portfolio. Salomon Brothers Variable Series Funds Inc.:
Capital Fund, Total Return Fund, Investors Fund. Strong Variable Insurance
Funds, Inc.: Strong Growth Fund II, Strong Opportunity Fund II, Strong Schafer
Value Fund II.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Fee Table..................................................3
Financial Statements.......................................4
Ohio National Life.........................................5
Ohio National Variable Account A ..........................5
The 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
10-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
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 - Investment portfolios of any registered open-end investment company in
which contract assets may be invested.
FUND SHARES - Shares of any available Fund.
GUARANTEED ACCOUNT - Fixed value allocations which are part of the general
assets of Ohio National Life.
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 - Subdivisions of VAA, each of which invests exclusively in shares
of a designated Fund.
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
the accompanying Fund prospectuses.
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 6%
percentage varies with 2nd 6%
number of years from 3rd 6%
purchase payments to 4th 5%
which values relate) 5th 3%
6th 2%
7th and later 0%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Exchange (transfer) Fee $10 (currently no charge for the first transfer each calendar month)
Annual Contract Fee $30 (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 *** 0.65%
Account Fees and Expenses 0.25%
-----
Total VAA Annual Expenses 0.90%
</TABLE>
FUND ANNUAL EXPENSES (after fee waiver) (as a percentage of each Fund's
average net assets)
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Ohio National Fund, Inc.:
Money Market Portfolio* 0.25% 0.19% 0.44%
Bond Portfolio 0.60% 0.19% 0.79%
Capital Appreciation Portfolio 0.80% 0.17% 0.97%
Growth & Income Portfolio 0.85% 0.55% 1.40%
S&P 500 Index Portfolio 0.40% 0.20% 0.60%
Equity Income Portfolio** 0.75% 0.50% 1.25%
High Yield Bond Portfolio** 0.75% 0.25% 1.00%
Large Cap Value Portfolio** 0.90% 0.50% 1.40%
Goldman Sachs Variable Insurance Trust:
Goldman Sachs Growth & Income Fund** 0.75% 0.15% 0.90%
Goldman Sachs Core U.S. Equity Fund** 0.70% 0.10% 0.80%
Goldman Sachs Capital Growth Fund** 0.75% 0.15% 0.90%
Goldman Sachs Global Income Fund** 0.90% 0.15% 1.05%
Janus Aspen Series:
Growth Portfolio* 0.65% 0.04% 0.69%
International Growth Portfolio* 0.05% 1.21% 1.26%
Worldwide Growth Portfolio* 0.66% 0.14% 0.80%
Balanced Portfolio* 0.79% 0.15% 0.94%
JPM Series Trust II:
JPM Small Company Portfolio 0.60% 0.55% 1.15%
Montgomery Funds III:
Montgomery Small Cap Opportunities Fund* 1.19% 0.31% 1.50%
Emerging Markets Fund 1.05% 0.55% 1.60%
Morgan Stanley Universal Funds, Inc.:
Fixed Income Portfolio** 0.40% 0.30% 0.70%
U.S. Real Estate Portfolio** 0.80% 0.30% 1.10%
Value Portfolio** 0.55% 0.30% 0.85%
Emerging Markets Equity Portfolio** 1.25% 0.50% 1.75%
Salomon Brothers Variable Series Funds Inc.:
Capital Fund** 1.00% 0.25% 1.25%
Total Return Fund** 0.80% 0.45% 1.25%
Investors Fund** 0.75% 0.50% 1.25%
Strong Variable Insurance Funds, Inc.:
Strong Growth Fund II 1.00% 0.20% 1.20%
Strong Opportunity Fund II 1.00% 0.18% 1.18%
Strong Schafer Value Fund II** 1.00% 0.20% 1.20%
</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>
Ohio National Fund, Inc.:
Money Market Portfolio
Bond Portfolio
Capital Appreciation Portfolio
Growth & Income Portfolio
S&P 500 Index Portfolio**
Equity Income Portfolio
High Yield Bond Portfolio
Large Cap Value Portfolio
Goldman Sachs Variable Insurance Trust:
Goldman Sachs Growth & Income Fund
Goldman Sachs Core U.S. Equity Fund
Goldman Sachs Capital Growth Fund
Goldman Sachs Global Income Fund
Janus Aspen Series:
Growth Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
JPM Series Trust II:
JPM Small Company Portfolio
Montgomery Funds III:
Montgomery Small Cap Opportunities Fund
Emerging Markets Fund
Morgan Stanley Universal Funds, Inc.:
Fixed Income Portfolio
U.S. Real Estate Portfolio
Value Portfolio
Emerging Markets Equity Portfolio
Salomon Brothers Variable Series Funds Inc.:
Capital Fund
Total Return Fund
Investors Fund
Strong Variable Insurance Funds, Inc.:
Strong Growth Fund II
Strong Opportunity Fund II
Strong Schafer Value Fund II
</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>
Ohio National Fund, Inc.:
Money Market Portfolio
Bond Portfolio
Capital Appreciation Portfolio
Growth & Income Portfolio
S&P 500 Index Portfolio**
Equity Income Portfolio
High Yield Bond Portfolio
Large Cap Value Portfolio
Goldman Sachs Variable Insurance Trust:
Goldman Sachs Growth & Income Fund
Goldman Sachs Core U.S. Equity Fund
Goldman Sachs Capital Growth Fund
Goldman Sachs Global Income Fund
Janus Aspen Series:
Growth Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
JPM Series Trust II:
JPM Small Company Portfolio
Montgomery Funds III:
Montgomery Small Cap Opportunities Fund
Emerging Markets Fund
Morgan Stanley Universal Funds, Inc.:
Fixed Income Portfolio
U.S. Real Estate Portfolio
Value Portfolio
Emerging Markets Equity Portfolio
Salomon Brothers Variable Series Funds Inc.:
Capital Fund
Total Return Fund
Investors Fund
Strong Variable Insurance Funds, Inc.:
Strong Growth Fund II
Strong Opportunity Fund II
Strong Schafer Value Fund II
</TABLE>
*For certain Funds, management fees are presently being voluntarily waived in
part by the Funds' investment advisers. Without those waivers, the management
fees would be as follows:
Ohio National Fund, Inc.
Money Market Portfolio 0.30%
Janus Aspen Series
Growth Portfolio 0.79%
International Growth Portfolio 1.00%
Worldwide Growth Portfolio 0.77%
Balanced Portfolio 0.92%
Montgomery Funds III
Montgomery Small Cap Opportunities Fund 1.44%
EXAMPLE - Without the voluntary fee waivers, 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, assuming 5% annual return:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Ohio National Fund, Inc.
Money Market Portfolio
Janus Aspen Series
Growth Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Montgomery Funds III
Montgomery Small Cap Opportunities Fund
</TABLE>
EXAMPLE - Without the voluntary fee waivers, 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>
Ohio National Fund, Inc.
Money Market Portfolio
Janus Aspen Series
Growth Portfolio
International Growth Portfolio
Worldwide Growth Portfolio
Balanced Portfolio
Montgomery Funds III
Montgomery Small Cap Opportunities Fund
</TABLE>
3
<PAGE> 8
** The "Other Expenses" (and, accordingly, the Total Fund Expenses) for these
Funds are based on estimates.
*** The Mortality and Expense risk fees may be changed at any time, but may not
presently be increased to more than 0.65% and for contracts issued in the
future to more than 1.55%
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 EXAMPLES INCLUDED ABOVE 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 examples are aggregate amounts for
the total number of years indicated. In the examples, 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 examples reflect any premium taxes that may be applicable to a contract,
which currently range from 0% to 3.5%. The above table and examples 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
DEDUCTION For STATE PREMIUM TAXES, page __.
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
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. However, contract values may not be allocated to more than
10 variable subaccounts at any one time. 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 Funds. Values of other contracts not offered
through this prospectus are also allocated to VAA, including some subaccounts
that are not available for the contracts offered herein.
THE FUNDS
The Funds presently available are listed on page 2. The Funds 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 each 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 Funds receive investment advice, for a fee, from their investment advisers.
Those fees are shown in the Fee Table beginning on page 3. For Ohio National
Fund, Inc., the adviser is Ohio National Investments, Inc. (with T. Rowe Price
Associates, Inc. as sub-adviser to the Capital Appreciation Portfolio, Robertson
Stephens Investment Management, L.P. as sub-adviser to the Growth & Income
Portfolio and Federated Investment Counseling as sub-adviser to the Equity
Income, High Yield Bond and Large Cap Value Portfolios); for Goldman Sachs
Variable Insurance Trust, the adviser is Goldman, Sachs & Co.; for Janus Aspen
Series, the adviser is Janus Capital Corporation; for JPM Series Trust II, the
adviser is J.P. Morgan Investment Management, Inc.; for Montgomery Funds III,
the adviser is Montgomery Asset Management, LLC; for Morgan Stanley Universal
Funds, Inc., the adviser of the U.S. Real Estate and Emerging Markets Equity
Portfolios is Morgan Stanley Asset Management, Inc., and the adviser of the
Fixed Income and Value Portfolios is Miller Anderson & Sherrerd, LLP; for
Salomon Brothers Variable Series Funds Inc., the adviser is Salomon Brothers
Asset Management, Inc.; and for Strong Variable Insurance Funds, Inc., the
adviser is Strong Capital Management, Inc. Affiliates of each of the Funds may
compensate Ohio National Life based upon an annual percentage of the average
assets of each Fund that are allocated to VAA. These percentage amounts vary by
Fund and are intended to compensate Ohio National Life for administrative and
other services that it provides to the Funds and their affiliates.
For additional information concerning the Funds, including the investment
objectives of each of their available portfolios, see the Fund prospectuses.
Read the Fund prospectuses carefully before investing. The Fund prospectuses may
contain information about other portfolios that are not available as investment
options for the contract offered herein. There is no assurance that the stated
objectives and policies of any of the Funds will be achieved.
5
<PAGE> 10
MIXED AND SHARED FUNDING
In addition to being offered to VAA, certain Fund Shares 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. Fund Shares
may also be offered to other insurance company separate accounts. 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 any of the Funds currently foresees any such disadvantage, the
Board of Directors or Trustees of each 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 a 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 a 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 a 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 a 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 broker-dealers that have entered into
distribution agreements with Ohio National Equities, Inc. ("ONEQ," a
wholly-owned subsidiary of Ohio National Life) which is the principal
underwriter of the contracts. ONEQ and the broker-dealers are registered under
the Securities Exchange Act of 1934 and are members of the National Association
of Securities Dealers, Inc. Ohio National Life pays ONEQ a percentage of each
purchase payment and ONEQ then pays a portion of that amount to the
broker-dealers as compensation for their sales efforts. The broker-dealers will
remunerate their registered representatives from their own funds. Purchase
payments on which no compensation is paid to registered representatives may not
be included in amounts on which the sales compensation will be paid to ONEQ. 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 ONEQ, 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 is made to defray expenses relating to the
sale of the contract, including compensation to broker-dealers, cost of sales
literature and prospectuses, and other expenses related to sales activity. The
charge equals a percentage of the amount 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 6%
2nd 6%
3rd 6%
4th 5%
5th 3%
6th 2%
7th and later 0%
</TABLE>
During each contract year, partial withdrawals of not more than 10% of the
accumulation value (as of the day of the first withdrawal made during that
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
$30 from the accumulation value to reimburse it for the expenses relating to the
maintenance of the contract. 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 increase 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 designed 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 __). 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 0.65% of the contract value on
an annual basis. However, Ohio National Life has agreed that the deduction for
these risk undertakings shall not be increased to more than the rate in effect
at the time the contract is issued. Ohio National Life may discontinue this
limitation on its right to increase the deduction, but only as to any contracts
purchased after notice of the discontinuance. 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 0.35% for
mortality risk, and 0.30% 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 $10 is made for each transfer from one or more subaccounts to
one or more other subaccounts. The fee is charged against the subaccounts from
which the transfer is effected. No fee is charged for the first transfer each
calendar month.
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. The deduction for premium taxes will be
made when incurred. Normally, that is not 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 Funds.
These are described in the accompanying prospectuses of the Funds.
DESCRIPTION OF VARIABLE ANNUITY CONTRACTS
10-DAY FREE LOOK
The contract owner may revoke the contract at any time until the end of 10 days
after receipt of the contract (or such longer period as may be required by
applicable state law) and receive a refund of the value of the contract as of
the date of the cancellation. To revoke, the owner must return the contract to
Ohio National Life within the free look period. In those states where state law
requires that the original purchase price be returned in lieu of the current
contract value in case of revocation during the free look period, any purchase
payments will be allocated to the Money Market subaccount until the end of the
free look period.
8
<PAGE> 13
ACCUMULATION PERIOD
PURCHASE PAYMENT PROVISIONS
The contracts provide for a minimum initial purchase payment of $25,000 and
minimum subsequent purchase payments of $500 per payment. Ohio National Life
reserves the right to restrict total purchase payments in excess of $1,000,000.
Subject to these limits, payments may be made at any time. Failure to make
payments shall not constitute a default.
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 ). 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
Orders or applications, together with 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 all
information necessary for issuing a contract and processing the purchase payment
are complete. If this cannot be done 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 necessary information 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
You may direct the allocation of your purchase payments among up to 10
subaccounts of VAA and to the Guaranteed Account. The amount allocated to any
subaccount or the Guaranteed 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 Fund if the "ex-dividend" date occurs during the valuation
period, plus or minus
9
<PAGE> 14
(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 , and,
Deduction for Risk Undertakings, page .)
SURRENDER AND PARTIAL WITHDRAWAL
Prior to the annuity payout date, or thereafter in the case of annuity Option
1(e) described below, 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 $1,000) withdrawal therefrom. These transactions may be subject to the
contingent deferred sales charge described on page . That charge is a
percentage of the total amount withdrawn. For example, if a partial withdrawal
of $1,000 is requested during the first two years after the first purchase
payment for which there are contract values, and after you have received that
year's "free" withdrawal of 10% of the accumulation value, Ohio National Life
would pay you $1,000, but the total amount deducted from the accumulation value
would be $1,063.83 (i.e., $1,063.83 x 6% = $63.83). 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 . For tax consequences of a surrender or withdrawal,
see Federal Tax Status, page .
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 a Fund is not reasonably
practical, or it is not reasonably practical to determine the value of the
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 or more subaccounts to one or more
other subaccounts upon the request of the owner. Transfers may be made at any
time during the accumulation period. The amount of any such transfer from or to
any subaccount 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 a 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 (pursuant to a
pre-existing DCA program) will be made first, followed by mailed written
requests in the order
10
<PAGE> 15
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 , and Transfers After Annuity Payout
Date, page ). Ohio National Life may restrict transfers of a contract's
Guaranteed Account value during a contract year to not more than 20% of such
value (or $1,000 if greater) as of the beginning of a contract year.
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, between 9:00 a.m.
and 3:30 p.m. (Eastern time) on days that it is open for business, 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. Telephone transfer requests will not be honored
after the annuitant's death. 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.
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 of at least $300, (a) from any variable subaccount(s) to any other
subaccount(s), including the Guaranteed Account, or (b) from the Guaranteed
Account to any other subaccount(s), if the DCA program is established at the
time the contract is issued, the DCA program is scheduled to begin within 6
months of contract issue and the term of the DCA program does not exceed 2
years. For transfers from variable subaccounts, at least 12 transfers must be
scheduled and the term of the DCA program may not exceed 5 years. 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 the Guaranteed
Account or 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 Guaranteed Account, in
anticipation of retirement, in order to reduce the risk of making a single
transfer during a low market.
PORTFOLIO REBALANCING
You may elect to have Ohio National Life automatically transfer amounts on a
quarterly, semi-annual or annual basis to maintain a specified percentage
(whole percentages only) of contract value in each of two or more designated
subaccounts. The purpose of a portfolio rebalancing strategy is to maintain,
over time, your desired allocation percentage in the designated subaccounts
having differing investment performance. Portfolio rebalancing will not
necessarily enhance future performance or protect against future losses.
To elect this option, or to discontinue it, you must provide Ohio National Life
with written authorization. Portfolio rebalancing transactions are not included
for the purpose of determining any transfer charge.
DEATH BENEFIT
In the event of the death of the annuitant and any contingent 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 to the beneficiary in a
single sum unless the owner or beneficiary elects settlement under one or more
of the settlement options provided in the contract.
11
<PAGE> 16
The death benefit will be the greater 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 6 years. For the 6-year
period beginning on the sixth contract anniversary, the stepped-up death benefit
will be the greater of (i) the contract value as of the sixth anniversary or
(ii) the net of purchase payments less withdrawals made on or before the sixth
anniversary. At the beginning of each later 6-year period (until the annuitant
attains age 90), 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 6-year period. The stepped-up death benefit amount is increased by
purchase payments and decreased by withdrawals made during each 6-year period
after the sixth anniversary.
In those states where permitted, an optional annual stepped-up death benefit may
be elected at the time the contract is issued. With that option, the death
benefit will be increased in the manner indicated in the preceding paragraph,
until the annuitant attains age 80, on each contract anniversary on which the
contract value exceeds the death benefit for the previous year. There is an
additional charge (presently at an annual rate of 0.13% of the contract value,
which rate may be increased to no more than 0.25% on contracts issued in the
future) for this optional benefit.
In those states where permitted, an optional death benefit may be elected by
the beneficiary within 90 days after the annuitant's death prior to age 90.
With this elective option, the death benefit is the greater of (a) the contract
value on the date of death or (b) the guaranteed minimum death benefit amount.
The guaranteed minimum death benefit amount for contract values held in the
Guaranteed Account and the Money Market subaccount is the contract value as of
the date of death. For all other subaccounts, the guaranteed minimum death
benefit amount is (i) the net of purchase payments less withdrawals plus (ii) a
daily increase at an effective annual rate of 6%.
GUARANTEED ACCOUNT
The Guaranteed 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 Account is not registered under the Securities Act of 1933. The
Guaranteed Account is not registered as an investment company under the 1940
Act. Accordingly, neither the Guaranteed Account nor any interests in it are
subject to the provisions or restrictions of either such Act, and the
disclosures regarding it have not been reviewed by the staff of the Securities
and Exchange Commission.
The Guaranteed Account consists of all of Ohio National Life's general assets
other than those allocated to a separate account. Purchase payments and contract
values may be allocated between the Guaranteed 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 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
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.
Ohio National Life guarantees that, prior to the commencement of annuity payout,
the guaranteed value of a contract will never be less than (a) the amount of
purchase payments allocated to, and transfers into, the Guaranteed 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
values, and less (d) any partial withdrawals, loans and transfers from the
guaranteed values, and less (e) any contingent deferred sales charges on partial
withdrawals, loan interest, state premium taxes, transfer fees, and the portion
of the $30 annual contract administration charge allocable to the Guaranteed
Account. No deductions are made from the Guaranteed Account for administrative
expenses or risk undertakings. (See "Deductions and Expenses".)
Other than pursuant to a DCA (scheduled transfer) or portfolio rebalancing
program, Ohio National Life reserves the right to restrict transfers of a
contract's Guaranteed Account value during a contract year to not more than 20%
of such value as of the beginning of a contract year (or $1,000, if greater). As
provided by applicable state law, Ohio National Life reserves the right to defer
the payment of amounts withdrawn from the Guaranteed Account for a period not to
exceed six months from the date written request for such withdrawal is received
by Ohio National Life.
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 eligible person's contract
in the foregoing amounts at the time of each payment made by the eligible
person.
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 (except for option
1(e), below) annuity payments will be paid for the lifetime of the annuitant
(and joint annuitant, if any) in accordance with the annuity rates contained in
the contract, regardless of actual mortality experience.
Other than in connection with annuity Option 1(e) described below, 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.
Surrenders and partial withdrawals from Option 1(e) are permitted at any time.
12
<PAGE> 17
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 1(e): Installment Refund annuity with payments guaranteed for a fixed
number (up to thirty) of years. This option is available
for variable annuities only. Although the deduction for risk
undertakings is taken from annuity unit values, Ohio National
Life has no mortality risk during the annuity payout period
under this option.
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.
Other settlement options are available as agreed to by Ohio National Life.
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.
The Internal Revenue Service has not ruled on the tax treatment of a commutable
variable annuity. If you select Option 1(e), it is possible that the IRS could
determine that the entire value of the annuity is fully taxable at the time you
elect Option 1(e) or that variable annuity payments under this option should not
be taxed under the annuity rules (see Federal Tax Status, page __), which could
result in your payments being fully taxable to you. Should the IRS so rule. Ohio
National Life may be required to tax report up to the full value of the annuity
to you as taxable income.
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 the 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.
13
<PAGE> 18
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 __) for such subsequent
valuation period and by a factor (0.999919 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 1983(a)
Mortality Table Projected to 1996 under Scale G with compound interest at the
effective rate of 3% 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.
14
<PAGE> 19
PERIODIC REPORTS
Ohio National Life will furnish each contract 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 Funds.
SUBSTITUTION FOR FUND SHARES
If investment in a 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 Funds or of other mutual 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 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 VAA's
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 or mutual funds with investment
objectives similar to those of the Funds.
15
<PAGE> 20
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 contract 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
16
<PAGE> 21
purchase of the annuity; (7) incident to divorce or (8) taken from an IRA for a
qualified first-time home purchase (up to $10,000) or qualified higher education
expenses. 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 (special rules apply for plan terminations).
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. Five-year averaging will no
longer be available after 1999 except for certain grandfathered individuals. 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 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 $30,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$30,000-$40,000. For married couples filing jointly, the applicable dollar
limitation is $50,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $50,000-$60,000.
There is no deduction allowed for IRA contributions when Adjusted Gross Income
reaches $40,000 for individuals and $60,000 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 $10,000 for 1998. 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.
New salary-reduction SEPPs may not be established after 1996.
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, your Savings
Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase for your
spouse (see "IRA for Non-working Spouse", page __). 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 _). 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 are 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 $30,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $30,000-$40,000. For
married couples filing jointly, the applicable dollar limitation is $50,000,
with the amount of IRA contribution which may be deducted reduced
proportionately for Adjusted Gross Income between $50,000-$60,000. There is no
deduction allowed for IRA contributions when Adjusted Gross Income reaches
$40,000 for individuals and $60,000 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 $10,000 for 1998.
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. New salary-reduction SEPPs may not be established after 1996.
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 $24,000. 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 $2,000).
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you will also be eligible to establish an
IRA for your "non-working" spouse. In order to be eligible to establish such a
spousal IRA, you must file a joint tax return with your spouse and if your
non-working spouse has compensation, his/her compensation must be less than
your compensation for the year. Contributions of up to $2,000 each may be made
to your IRA and the spousal IRA if the combined compensation of you and your
spouse is at least equal to the amount contributed. If requirements for
deductibility (including income levels) are met, you will be able to deduct an
amount equal to the least of (i) the amount contributed to the IRAs (ii)
$4,000, or (iii) 100% of your combined gross income.
Contributions in excess of the contribution limits may be subject to a penalty.
See above under "Contributions and Deductions." If you contribute more than
the allowable amount, 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 59-1/2 or 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 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 within 5
years of death, or applied to purchase an immediate annuity for the beneficiary.
This annuity must be payable over the life expectancy of the beneficiary
beginning 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
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 27
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
________, 1998
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 _______,
1998. 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>
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
</TABLE>
<PAGE> 28
CUSTODIAN
Ohio National Life has executed an agreement with Star Bank, N.A. ("the Bank"),
Cincinnati, Ohio, pursuant to which the shares of any mutual funds in which
VAA's assets may be invested. ("Funds") and other assets credited to VAA 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, 1997 and for the periods indicated herein and of Ohio National
Life's consolidated financial statements as of December 31, 1997 and 1996 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.
UNDERWRITER
The offering of the contracts is continuous. Prior to May 1, 1997, 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>
1997 $--------- $-------
1996 $2,461,096 $239,957
1995 1,645,426 151,215
</TABLE>
Since May 1, 1997, Ohio National Equities, Inc., another wholly-owned subsidiary
of Ohio National Life, has been the principal underwriter of the contracts. The
aggregate amount of underwriting commissions paid to and retained by Ohio
National Equities, Inc. with respect to contracts issued by VAA has been:
<TABLE>
<CAPTION>
Aggregate Retained
Year Commissions Commissions
---- ----------- -----------
<S> <C> <C>
1997 $--------- $--------
</TABLE>
-2-
<PAGE> 29
CALCULATION OF MONEY MARKET SUBACCOUNT YIELD
The current yield of the Money Market subaccount for the seven days ended on
December 31, 1997, was %. 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.
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, 1997, 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>
Ohio National Fund: % % % %
Money Market % % % % 03-20-80
Bond % % % % 11-02-82
% % % %
Capital Appreciation 05-01-94
Growth & Income 01-03-97
S&P 500 Index 01-03-97
Equity Income - -98
High Yield Bond - -98
Large Cap Value - -98
Goldman Sachs:
G.S. Growth & Income 01- -98
G.S. Core U.S. Equity 01- -98
G.S. Capital Growth 01- -98
G.S. Global Income 01- -98
Janus Aspen Series:
Growth 09-13-93
International Growth 05-02-94
Worldwide Growth 09-13-93
Balanced 09-13-93
JPM Series Trust II:
JPM Small Company 01-03-95
Montgomery Funds III:
Small Cap Opportunities 12-29-95
Emerging Markets 03-01-92
Morgan Stanley:
Fixed Income 11-14-84
U.S. Real Estate 02-24-95
Value 11-05-84
Emerging Markets Equity 09-25-92
Salomon Brothers:
Capital - -98
Total Return - -98
Investors - -98
Strong:
Growth II 12-31-96
Opportunity II 05-08-92
Schafer Value II 09-30-97
</TABLE>
-3-
<PAGE> 30
<TABLE>
<CAPTION>
One Five Ten From Inception
Year Years Years Inception Date
---- ----- ----- --------- ----
<S> <C> <C> <C> <C> <C>
</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 Fund may have to be sold. Excessive
sales of a Fund's securities on short notice could be detrimental to that Fund
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 Fund on any one day may be limited to 1% of the previous day's total
net assets of that Fund if Ohio National Life or the Fund, in its or their
discretion, believes that the Fund 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> 31
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 Account in the prospectus). 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.
-47-
<PAGE> 32
OHIO NATIONAL VARIABLE ACCOUNT A
FORM N-4
PART C
OTHER INFORMATION
<PAGE> 33
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are included in Part B of
this Registration Statement and will be furnished by a Pre-effective Amendment
hereto:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January ,
1998
Statements of Assets and Contract Owners' Equity dated December 31, 1997
Statement of Operations and Changes in Contract Owners' Equity for the
Years Ended December 31, 1997 and 1996
Notes to Financial Statements dated December 31, 1997
Schedules of Changes in Unit Values for the Years Ended December 31, 1997
and 1996
The following consolidated financial statements of the Depositor and its
subsidiaries are also included in Part B of this Registration Statement and will
be furnished by a Pre-effective Amendment hereto:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January ,
1998
Consolidated Balance Sheets dated December 31, 1997 and 1996
Consolidated Statements of Income for the Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Equity for the Years Ended December 31, 1997,
1996 and 1995
Consolidated Statements of Cash Flows for the Years Ended December 31,
1997, 1996 and 1995
Notes to Consolidated Financial Statements dated December 31, 1997, 1996
and 1995
Exhibits:
(3)(a) Principal Underwriting Agreement for Variable Annuities between
the Depositor and Ohio National Equities, Inc.
(4) Variable Deferred Annuity Contract, Form 98-VA-2
All other relevant exhibits, which have previously been filed with the
Commission and are incorporated herein by reference, are as follows:
(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).
-1-
<PAGE> 34
(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).
(5)(a) Tax-Qualified Variable Annuity Application, Form V-4890-A, was
filed as Exhibit (5)(a) of the Registrant's registration statement
on Form N-4, Post-effective Amendment no. 18 on April 25, 1996
(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> 35
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Neil A. Armstrong Director
4635 Drake Road
Cincinnati, Ohio 45243
Trudy K. Backus* Vice President, Individual Insurance Services
Thomas A. Barefield* Senior Vice President, Institutional Sales
Howard C. Becker* Senior Vice President, Individual Insurance
& Corporate Services
Michael A. Boedeker* Vice President, Fixed Income Securities
Robert A. Bowen* Senior Vice President, Information Systems
Roylene M. Broadwell* Vice President & Treasurer
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* Vice President, Information Systems
Michael F. Haverkamp* Vice President and Counsel
John A. Houser III* Vice President, Claims
</TABLE>
-3-
<PAGE> 36
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Bannus B. Hudson Director
One Eastwood Drive
Cincinnati, Ohio 45227
David G. McClure* Vice President, Equity Product Sales
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
John J. Palmer* Senior Vice President, Strategic Initiatives
George B. Pearson, Jr.* Vice President, PGA Marketing
Dallas L. Pennington* Senior 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
Stephen T. Williams* Vice President, Equity Investments
</TABLE>
*The principal business address for these individuals is One Financial Way,
Cincinnati, Ohio 45242.
-4-
<PAGE> 37
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- --------------------------------------------------------------------------------
<S> <C>
- ------------------------------- -----------------------------
ENTERPRISE PARK, INC. OHIO NATIONAL EQUITIES INC.
A GEORGIA CORPORATION A BROKER/DEALER
REAL ESTATE DEVELOPMENT COMPANY CAPITALIZED BY ONLI @ $30,000
CAPITALIZED BY ONLI $50,000
- ------------------------------- --------------------------------
Pres. & Dir. M. Stohler Chm. & Dir. D. O'Maley
V.P. & Dir. J. Brom Pres. & Dir. J. Palmer
Secy. & Dir. J. Fischer VP & Dir. T. Backus
Treas. & Dir. P. Bergmann VP & Dir. J. Miller
Secretary & Dir. R. Benedict
Treasurer K. Jaeger
Compliance Officer J. Dunn
Asst. Secy. M. Haverkamp
- ------------------------------- --------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
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
--------------------------------
<S> <C> <C>
- ------------------------------- ------------------------------ -------------------------------------
OHIO NATIONAL INVESTMENTS, INC. THE O.N. EQUITY SALES COMPANY OHIO NATIONAL LIFE
ASSURANCE CORPORATION
AN INVESTMENT ADVISER AN OHIO CORPORATION AN OHIO CORPORATION
CAPITALIZED BY ONLI @ $10,000 A BROKER/DEALER A STOCK LIFE INSURANCE COMPANY
CAPITALIZED BY ONLI @ $790,000 CAPITALIZED BY ONLI @ $32,000,000
INCORPORATED UNDER THE LAWS OF OHIO
- ------------------------------- ------------------------------ ------------------------------------
Chm. & Dir. D. O'Maley Chm./Pres/.CEO & Dir. D. O'Maley
Pres. & Dir. J. Brom Sr. VP & Dir. R. Dolan
Pres. & Dir. J. Palmer Sr. VP & Dir. J. Palmer
VP & Dir. M. Boedeker Sr. VP & Dir. S. Summers
V.P. & Dir. M. Haverkamp Sr. VP & Dir. J. Brom
VP & Dir. M. Stohler Sr. Vice Pres. D. Cook
Secy. & Dir. R. Benedict Sr. Vice Pres. G. Smith
VP & Dir. S. Williams Vice Pres. & Treas. R. Broadwell
Director B. DiTommaso Vice President M. Boedeker
Treasurer D. Taney Vice President R. DiTommaso
Treasurer K. Jaeger Vice President T. Backus
Secretary R. Benedict Vice President G. Pearson
Compliance Director J. Dunn Vice President D. Pennington
VP K. Hanson Vice President M. Stohler
Vice Pres. J. Houser
VP D. Hundley Secy. R. Benedict
Asst. Secy. J. Fischer
VP J. Martin Asst. Actuary K. Flischel
- ------------------------------- ------------------------------ ------------------------------------
SEPARATE ACCOUNT
-------------------------------------
R
---
<CAPTION>
<= Advisor to Advisor to =>
--------------------------------------------------------
<S> <C> <C>
- ----------------------------- -------------------------------- --------------------------------
ONE FUND, INC. O.N. INVESTMENT MANAGEMENT CO. OHIO NATIONAL FUND
A MARYLAND CORPORATION AN OHIO CORPORATION A MARYLAND CORPORATION
AN OPEN END DIVISIFIED A FINANCIAL ADVISORY SERVICE AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY CAPITALIZED BY ONESCO @ $145,000 MANAGEMENT INVESTMENT COMPANY
- ----------------------------- -------------------------------- --------------------------------
Pres. & Dir. J. Palmer Pres. & Dir. J. Brom Pres. & Dir. J. Palmer
Vice. Pres. M. Boedeker ----- Vice President M. Boedeker
Vice Pres. J. Brom VP & Dir. M. Boedeker Vice President J.Brom
Vice Pres. D. McClure Vice President S. Williams
Vice Pres. S. Williams VP & Dir. D. McClure Treasurer D. Taney
Treasurer D. Taney -------- Secy. & Dir. R. Benedict
Secy. & Dir. R. Benedict VP & Dir. S. Willams Director R. Love
Director R. Love Director G. Castrucci
Director G. Castrucci Treasurer D. Taney Director G. Vredeveld
Director G. Vredeveld
Secretary R. Benedict
Asst. Secy. B. Hopewell
- --------------------------------- -------------------------------- ---------------------------------
</TABLE>
<PAGE> 38
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 December 19, 1997, the Registrant's contracts were owned by 19,669 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> 39
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 Ohio
National Equities, Inc. ("ONEQ"). ONEQ is a wholly-owned subsidiary of the
Depositor. ONEQ 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> 40
The directors and officers of ONEQ are:
<TABLE>
<CAPTION>
Name Position with ONE, Inc.
---- -----------------------
<S> <C>
David B. O'Maley Chairman and Director
John J. Palmer President and Director
James I. Miller Vice President and Director
Trudy K. Backus Vice President and Director
Joni L. Dunn Vice President and Compliance Officer
Ronald L. Benedict Secretary and Director
Kenneth M. Jaeger Treasurer
</TABLE>
The principal business address of each of the foregoing is One Financial Way,
Cincinnati, Ohio 45242.
During the last fiscal year, ONEQ 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>
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")
One Financial Way
Cincinnati, Ohio 45242
-7-
<PAGE> 41
Star Bank, N.A. ("Custodian")
425 Walnut Street
Cincinnati, Ohio 45202
(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 AND REPRESENTATIONS
Pursuant to Section 26(e)(2)(A) of the Investment Company Act of 1940, as
amended, The Ohio National Life
-8-
<PAGE> 42
Insurance Company represents that the fees and charges deducted under the
contract, in the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred and the risks assumed by The Ohio National
Life Insurance Company
-9-
<PAGE> 43
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
registration statement to be signed on its behalf in the City of Montgomery and
the State of Ohio on this 29th day of December, 1997.
OHIO NATIONAL VARIABLE ACCOUNT A
(Registrant)
By THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/Thomas A. Barefield
-----------------------------------------
Thomas A. Barefield, Senior Vice President,
Institutional Sales
Attest:
/s/Ronald L. Benedict
- --------------------------------
Ronald L. Benedict
Second Vice President and Counsel
and 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
registration statement to be signed on its behalf in the City of Montgomery and
the State of Ohio on the 29th day of December, 1997.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/Thomas A. Barefield
------------------------------------------
Thomas A. Barefield, Senior Vice President,
Institutional Sales
Attest:
/s/Ronald L. Benedict
- ---------------------------------
Ronald L. Benedict
Second Vice President and Counsel
and Secretary
<PAGE> 44
As required by the Securities Act of 1933, this registration statement has been
signed below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
s/David B. O'Maley Chairman, President, December 29, 1997
- -------------------------
David B. O'Maley Chief Executive Officer
and Director
Director
- -------------------------
Neil A. Armstrong
*s/Dale P. Brown Director December 29, 1997
- -------------------------
Dale P. Brown
*s/Jack E. Brown Director December 29, 1997
- -------------------------
Jack E. Brown
*s/William R. Burleigh Director December 29, 1997
- -------------------------
William R. Burleigh
*s/Victoria B. Buyniski Director December 29, 1997
- -------------------------
Victoria B. Buyniski
*s/Raymond R. Clark Director December 29, 1997
- -------------------------
Raymond R. Clark
*s/Alvin H. Crawford Director December 29, 1997
- -------------------------
Alvin H. Crawford
*s/Bannus B. Hudson Director December 29, 1997
- -------------------------
Bannus B. Hudson
*s/Charles S. Mechem, Jr. Director December 29, 1997
- -------------------------
Charles S. Mechem, Jr.
*s/James W. Nethercott Director December 29, 1997
- -------------------------
James W. Nethercott
</TABLE>
<PAGE> 45
<TABLE>
<S> <C> <C>
*s/Oliver W. Waddell Director December 29, 1997
- -------------------------
Oliver W. Waddell
*s/Bradley L. Warnemunde Chairman Emeritus and December 29, 1997
- -------------------------
Bradley L. Warnemunde Director
</TABLE>
*By s/David B. O'Maley
- -------------------------
David B. O'Maley, Attorney in Fact pursuant to Powers of Attorney, copies of
which have previously been filed as exhibits to the Registrant's registration
statement.
<PAGE> 46
INDEX OF CONSENTS AND EXHIBITS
<TABLE>
<CAPTION>
Page Number in
Exhibit Sequential
Number Description Numbering System
- ------ ----------- ----------------
<S> <C> <C>
(3)(a) Principal Underwriting Agreement for Variable
Annuities between the Depositor and Ohio
National Equities, Inc.
(4) Variable Deferred Annuity Contract, Form 98-VA-2
</TABLE>
<PAGE> 1
EXHIBIT (3)(a)
PRINCIPAL UNDERWRITING AGREEMENT
FOR
VARIABLE ANNUITIES
AGREEMENT made and effective as of this first day of May, 1997 by and between
THE OHIO NATIONAL LIFE INSURANCE COMPANY ("Ohio National Life") and OHIO
NATIONAL EQUITIES, INC. ("ONE, Inc."), both Ohio corporations.
It is hereby mutually agreed as follows:
1. Ohio National Life hereby appoints ONE, Inc. as the exclusive principal
underwriter of those variable annuity contracts (the "contracts") issued by Ohio
National Life that have been registered as securities under the Securities Act
of 1933 (as amended) and with assets held in those of Ohio National Life's
separate accounts that have been registered under the Investment Company Act of
1940 (as amended).
2. ONE, Inc. shall at all times during the term of this agreement be registered
as a broker-dealer under the Securities Exchange Act of 1934 (as amended) and
shall be a member of the National Association of Securities Dealers, Inc.
("NASD"). ONE, Inc. agrees to comply with the Conduct Rules of the NASD.
3. ONE, Inc. agrees to enter into distribution agreements with other
broker-dealers (the "distributors") which shall promise to use their best
efforts to offer, sell and distribute the contracts through their respective
registered representatives. The distributors shall be members of the NASD and
the registered representatives offering the contracts shall be life insurance
agents of Ohio National Life who have obtained all necessary licenses from any
state in which a registered representative shall offer the contracts. The
distribution agreements shall provide that each of the distributors shall
maintain full responsibility for the training, supervision and control of its
registered representatives and that each of the distributors shall be
responsible for assuring that all sales of the contracts made by its registered
representatives are suitable for the purchaser based on relevant financial
information furnished by the purchaser to the distributor or its registered
representative.
The distribution agreements shall not permit the distributors or any registered
representative thereof to make any representations concerning the contracts
other than those contained in the then-current prospectus or statement of
additional information therefor or in supplemental literature approved by Ohio
National Life. All variable annuity purchase payments shall be promptly
forwarded by the distributor to Ohio National Life except to the extent that
Ohio National Life might agree in writing to permit a distributor to forward
purchase payments net of dealer concessions which latter amounts would then be
subtracted from the compensation to ONE, Inc. under section 8, below.
<PAGE> 2
4. ONE, Inc. shall reimburse Ohio National Life for the reasonable costs of
printing reasonable quantities of prospectuses and supplemental sales literature
with respect to the contracts.
5. Ohio National Life agrees to indemnify and hold harmless ONE, Inc., its
directors, officers and affiliated persons against any losses, claims, damages,
liabilities and expenses (including the cost of any legal fees incurred in
connection therewith) which ONE, Inc., its directors, officers or affiliated
persons may incur under any statute or regulation of the United States or any
state, district or territory thereof, or at common law or otherwise, arising out
of or based upon (a) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement for the contracts or any
supplemental literature authorized by Ohio National Life for use in connection
therewith, or (b) any omission or alleged omission to state a material fact
required to be stated in a registration statement or supplemental literature
necessary to make the statements therein not misleading, provided, however, that
insofar as losses, claims, damages, liabilities or expenses arise out of or are
based upon any such untrue statement or omission (or alleged untrue statement or
omission) made in reliance upon and in conformity with information furnished to
Ohio National Life by ONE, Inc. for use in a registration statement or
supplemental literature, the indemnification does not apply. In no case shall
Ohio National Life indemnify ONE, Inc. or any of its directors, officers or
affiliated persons as to any amounts incurred for any liability arising out of
or based upon any action for which ONE, Inc., its directors, officers or
affiliated persons would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its or their duties or by
reason of the reckless disregard of its or their obligations and duties under
this agreement.
6. ONE, Inc. agrees to indemnify and hold harmless Ohio National Life, its
directors, officers and employees against any losses, claims, damages,
liabilities and expenses (including the cost of any legal fees incurred in
connection therewith) which Ohio National Life, its directors, officers or
employees may incur under any statute or regulation of the United States or any
state, district or territory thereof, or at common law or otherwise arising out
of the acquisition of the contracts by any person which (a) may be based upon
any wrongful act by ONE, Inc. or any of its directors, officers or affiliated
persons, or (b) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or
supplemental literature, or any omission or alleged omission to state a material
fact required to be stated therein as necessary to make the facts therein not
misleading, provided, however, that insofar as losses, claims, damages,
liabilities or expenses arise out of or are based upon any such untrue statement
or omission (or alleged untrue statement or omission) made in reliance upon
information furnished or confirmed in writing by Ohio National Life to ONE,
Inc., the indemnification does not apply.
7. Ohio National Life agrees to take all actions and do all things necessary to
secure and maintain the registrations and approvals of the contracts and
investment companies in connection therewith by all federal and state regulatory
bodies having jurisdiction.
2
<PAGE> 3
8. Ohio National Life shall, at least quarterly, pay to ONE, Inc. as
consideration hereunder amounts computed in accordance with the Compensation
Schedule appended hereto and made a part of this agreement. Any future
amendments or additions to the Compensation Schedule shall not otherwise affect
the remaining terms of this agreement.
9. All books and records required by any regulator to be maintained by ONE,
Inc. shall remain the property of ONE, Inc. and shall be subject to
inspection by any regulator having jurisdiction or by the NASD.
10. Upon completion of any transaction for which a confirmation is required,
Ohio National Life shall, as agent for ONE, Inc. for this purpose, send to the
purchaser or contract owner a written confirmation reflecting the facts of the
transaction.
11. This agreement shall be construed in accordance with the laws of Ohio. All
transactions under this agreement shall, to the extent permitted by applicable
law, be considered to have been made at the office of both parties hereto in
Montgomery, Ohio.
12. This agreement may be terminated by either party on 60 days' written notice
to the other party or sooner if mutually agreed by both parties.
IN WITNESS WHEREOF, Ohio National Life and ONE, Inc. have caused this agreement
to be executed at Montgomery, Ohio on the day and year first above written.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By: s/David B. O'Maley
-------------------------------------
David B. O'Maley, Chairman, President and
Chief Executive Officer
OHIO NATIONAL EQUITIES, INC.
By: s/John J. Palmer
-------------------------------------
John J. Palmer
President and Chief Executive Officer
3
<PAGE> 4
COMPENSATION SCHEDULE
TO
PRINCIPAL UNDERWRITING AGREEMENT
FOR
VARIABLE ANNUITIES
The Ohio National Life Insurance Company hereby agrees to pay Ohio National
Equities, Inc. for the sale of variable annuities at the following rates:
Product Rates
------- -----
1. TOP Tradition for all ages 6.75% of first year
TOP Spectrum for issue ages 0 - 75* purchase payments;
Investar Vision for issue ages 0 - 70* 5.50% of purchase
payments after the
first contract year.
2. TOP Plus for all ages 5.25% of all purchase
payments.
3. TOP Explorer for issue ages 0 - 75* 6.45% of first year
purchase payments;
5.20% of purchase
payments after the
first contract year.
* For issue ages in excess of these, the rates are one-half those indicated.
Agreed to and accepted as of May 1, 1997.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By: s/David B. O'Maley
-----------------------------------------------
David B. O'Maley, Chairman, President and
Chief Executive Officer
OHIO NATIONAL EQUITIES, INC.
By: s/John J. Palmer
-----------------------------------------------
John J. Palmer, President and
Chief Executive Officer
4
<PAGE> 1
EXHIBIT 4
WE WILL PAY the benefits of this contract subject to its terms.
Our home office is at One Financial Way, Cincinnati, Ohio 45242.
Ronald L. Benedict David B. O'Maley
- ------------------ ------------------
Secretary President
WITHIN 10 DAYS OF THE DAY YOU RECEIVE THIS CONTRACT, YOU MAY RETURN IT TO OUR
HOME OFFICE OR TO YOUR REGISTERED REPRESENTATIVE. WE WILL THEN VOID THE CONTRACT
AND REFUND THE CONTRACT VALUE.
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT MAY INCREASE OR
DECREASE ACCORDING TO THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT. BENEFITS
ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED-DOLLAR AMOUNT.
VARIABLE DEFERRED ANNUITY CONTRACT
(Variable-Fixed)
Multiple Funding
Flexible Purchase Payments
Nonparticipating
Benefits Nontransferable
ANNUITANT John Doe CONTRACT NUMBER 00000000
OWNER John Doe CONTRACT DATE
ANNUITY PAYOUT DATE First Day of
FORM 98-VA-2 PAGE 1
<PAGE> 2
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 3
We and You 3
GENERAL PROVISIONS 4
Contract 4
Misstatement of Age or Sex 4
Ownership 4
Nontransferability 4
Beneficiary 4
Change of Beneficiary 4
General Account and VAA 4
Investments of VAA 5
Nonparticipating 5
Evidence of Sex, Age or Survival 5
Incontestability 5
Contract Payments 5
Supplementary Agreement 5
Voting Rights 5
Reports 5
Notice 5
Individual Retirement Annuities 5
PURCHASE PROVISIONS 6
Purchase Payments 6
Allocation of Purchase Payments 6
VALUATION PROVISIONS 6
Contract Value 6
Fixed Accumulation Account 6
Variable Accumulation Account 6
Net Investment Factor 7
Splitting Units 7
Taxes 7
ACCUMULATION PERIOD PROVISIONS 7
Transfers Among Subaccounts and
General Account 7
Surrender 8
Partial Withdrawal 8
Contingent Deferred Sales Charge 8
Death Benefit During Accumulation
Period 9
Contract Administration Charge 9
SETTLEMENT PROVISIONS 10
General 10
Elections 10
Pension Plan 10
IRA Restrictions 10
Determination of Amount To Be Applied 10
Effect of Settlement on Accumulation
Units 10
Change of Annuity Payout Date 10
Annuity Payment Amounts 11
Variable Annuities 11
Fixed Annuities 11
Annuity Unit Value 11
Change in Subaccount 11
Limitation on Availability of Options 11
Alternate Annuity Option 11
Death Benefit After the Annuity Payout
Date 12
Spendthrift Provision 12
Description of Annuity Options 12
Life Annuity 12
Joint and Survivor Life Annuity 12
ANNUITY OPTION TABLES 14
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 2
<PAGE> 3
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.
Any paid-up annuity, cash surrender, or death benefit that may be payable under
this contract are not less than the minimum benefits required by law in the
state in which this contract was delivered.
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.
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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 3
<PAGE> 4
GENERAL PROVISIONS
CONTRACT
Your purchase payment(s) and any application, are the consideration for this
contract. A copy of any application is attached. The contract, any riders or
endorsements, if applicable, and any 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. READ
YOUR CONTRACT CAREFULLY.
We reserve the right to amend this contract as needed to maintain its status as
an annuity under the Internal Revenue Code. If this contract is so amended we
will send you a copy of the amendment, together with the applicable regulation,
ruling or other requirement imposed by the Internal Revenue Service which
requires such amendment.
We will send you a copy of the amendment, together with applicable regulation,
ruling or other requirement imposed by the Internal Revenue Service which
requires such amendment.
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.
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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 4
<PAGE> 5
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.
A portion of the assets in the VAA equal to the contract reserves for such
account shall not be chargeable with liabilities arising out of any other
business the company may conduct.
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.
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.
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 we shall send you a statement reporting
the investments hold in the separate account. 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 as of a date not more than four months prior to
the date of the mailing.
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
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 5
<PAGE> 6
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 is due on the contract date. You may make
subsequent purchase payments at any time before the date that is ten years
preceding the annuity payout date. Each subsequent purchase payment must be at
least $500. We reserve the right to restrict the amount subsequent purchase
payments. 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 up to ten subaccounts within the
separate account and/or the fixed accumulation and dollar cost averaging
accounts within the General Account in accordance with the allocation percentage
specified by you 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.
VALUATION PROVISIONS
CONTRACT VALUE
The contract value for any valuation period equals the sum of the fixed
accumulation account and dollar cost averaging account values as of the end of
the valuation period and the variable accumulation account value for the
valuation period.
FIXED ACCUMULATION ACCOUNT
The fixed accumulation account is established within the General Account. Prior
to the annuity payout date, the fixed accumulation account value will be
(1) The net purchase payments allocated to the fixed accumulation
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, contract administration charge and any applicable charges
for riders to this contract; 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 purchase
payments and transfers to the fixed accumulation account. No annual effective
interest rate declared by us will be less than 3.00%. Once established, an
interest rate shall remain in effect for a guarantee period which shall not be
less than one year. After a guarantee period expires we will decline an interest
rate for a subsequent guarantee 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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 6
<PAGE> 7
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
(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 1.15% 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
0.65% for the mortality risk, and .50% for the expense risk. The total charge
for risks and administration expenses is now at the effective rate of 1.40%.
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 set of subaccounts to another set of subaccounts or to the General
Account at any time. The dollar amount transferred from any subaccount 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 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 $10 will be charged for each
transfer. The first transfer of any month will not be assessed a transfer fee.
We reserve the right to limit the number, frequency, method or amount of
transfers. Transfers from any portfolio of Ohio National Fund ("the Fund")
on any one day may be limited to 1% of the previous day's total net assets
of that portfolio if we or the Fund, in the discretion of either or both,
believes that the portfolio might otherwise be damaged.
If and when transfers must be so limited, some transfer requests will not
be granted. In determining which requests will be granted, 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 requested transfers are not made will be so
notified. Current SEC rules preclude us from processing at a later date
those requested transfers 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.
TRANSFERS FROM THE FIXED ACCUMULATION ACCOUNT TO VAA
You may transfer account value amounts between the Fixed Accumulation Account
and the Separate Account. Transfers will be effective on the date we receive
your request at our Home Office. With respect to transfers between the Fixed
Accumulation Account and the Separate Account, we reserve the right to impose
the following restrictions:
- For each allocation to the Fixed Accumulation Account,
transfers to the Separate Account may be made only during the
30-day period following the end of that allocation's interest
rate guarantee period. We may limit the amount that you can
transfer during that time, but the limit will not be less than
20% of the value of the Fixed Accumulation Account as of the
beginning of the contract year.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 7
<PAGE> 8
- No transfers from the Separate Account to the Fixed
Accumulation Account may be made during the six month period
following the transfer of any amount from the Fixed
Accumulation Account to the Separate Account.
In all other respects, the rules and charges applicable to transfers between the
subaccounts of the Separate Account will apply to transfers involving the Fixed
Accumulation Account.
SURRENDER
You may surrender this contract and receive its surrender value upon notice
received by us at any time at or 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, (3) any charges
due as the result of riders affecting this contract and (4) the contingent
deferred sales charge, if any. See Deferred Premium Tax. 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 from the Separate
Account shall be paid within 7 days of receipt of your notice (or later if
allowed by law). We reserve the right to defer payment of any surrender proceeds
from the fixed accumulation account for up to six months. We will not defer
payment if we are required by law to pay earlier, or if the amount payable is
used to pay premiums on policies with us. After this contract is surrendered,
all variable accumulation units will be cancelled.
PARTIAL SURRENDER
You can take up to 14 partial surrenders within a contract year. The withdrawn
amount cannot be less than $500 and cannot be greater than the amount that would
cause the contract value to fall below $5,000. 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.
You may tell us how much to deduct from the subaccount and the fixed
accumulation account. If you do not, the partial surrender will be deducted from
each subaccount in the same proportion that the subaccount's value bears to the
total Contract Value on the date we receive your request in our Home Office. See
Deferred Premium tax.
Surrenders from the fixed accumulation account will be taken on a
"first-in-first-out" basis. That is, partial surrenders 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 surrender, plus any applicable contingent deferred sales charge
taken from that deposit
DEFERRED PREMIUM TAX
If we paid a tax on a purchase payment and did not previously deduct the tax,
then we may deduct it at the time of surrender or on the annuity payout date.
CONTINGENT DEFERRED SALES CHARGE
We can make a contingent deferred sales charge if this contract is surrendered
or a partial surrender is made. Surrenders in a contract year that do not exceed
the free out amount are not subject to a charge. The free out amount is 10% of
the contract value as of the first surrender of the contract year less all
amounts previously surrendered during the contract year that were not subject to
a charge. Surrenders within a contract year in excess of the free out amount may
be subject to a charge. The amount subject to a charge is the lesser of (a) or
(b), where:
(a) is the amount withdrawn; and
(b) is the total purchase payments, less the total of all surrender
amounts previously allocated to purchase payments, but not less than
zero.
The contingent deferred sales charge will be the applicable percentage(s) of the
amount subject to a charge. For purposes of determining the applicable
percentage(s), surrender amounts will be allocated to remaining purchase
payments in the order that the purchase payments were received. Remaining
purchase payments are the original purchase payments less the amount of any
surrender previously allocated to them. The applicable percentages for each
purchase payment is found on the contract data pages in the Table of Contingent
Deferred Sales Charges next to the number denoting the duration of the purchase
payment at the time of surrender.
Year of Percentage of
Purchase Payment resulting value charged
1st 6%
2nd 6%
3rd 5%
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 8
<PAGE> 9
4th 4%
5th 2%
6th 1%
7th and later 0%
WAIVER OF CONTINGENT DEFERRED SALES CHARGE
We will waive the Contingent Deferred Sales Charge charges otherwise applicable
to a full surrender or one or more partial surrenders occurring before income
payments begin if: The Annuitant is, or has been confined to a state licensed or
legally operated hospital or inpatient nursing facility for at least 30
consecutive days; and
Such confinement begins at least one year after the policy date; and
The Annuitant was age 80 or younger on the policy date; and
The request for the full or partial surrender, together with proof of such
confinement, is received in the Home Office while the Annuitant is confined or
within 90 days after discharge from the facility.
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. 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 payments made to, less withdrawals
(including any contingent deferred sales charges) taken from the
contract; and
(c) the Stepped-up Death Benefit Amount defined as follows.
The Stepped-up Death Benefit Amount during the first three contract years shall
be the total of all net purchase payments made to the contract and adjusted for
withdrawals (including contingent deferred sales charges) taken from the
contract on a pro rata basis. That is, the Stepped-up Death Benefit will be
reduced by the same percentage reduction to the Contract Value that resulted
from the partial surrender. On the third 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 90.
The Stepped-up Death Benefit Amount in subsequent three year periods shall equal
the Stepped-up Death Benefit Amount as of the end of the previous three year
period plus any net purchase payments made to the contract, and adjusted for any
withdrawals (including contingent deferred sales charges) taken from the
contract during the three year period on a pro rata basis. The Stepped-up Death
Benefit Amount shall be increased at the end of each three year period to the
contract value if it is greater and if the Annuitant has not yet attained age
90.
If your surviving spouse becomes the owner and annuitant of the contract, the
Stepped-up Death Benefit Amount will continue, unreduced.
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 $30 to defray our administrative expenses for this
contract if the contract value at that time is less than $50,000. If, on the
anniversary, the contract value equals or exceeds $50,000, we will not deduct
the contract administration charge.
The contract administration charge will be deducted from the variable
accumulation account and the fixed accumulation account in proportion to the
total contract value in the VAA and General Account, respectively. The amount of
the charge deducted from the fixed accumulation account of each account will be
made on a "first-in-first-out" basis.
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.
If any portion of the annual contract administration charge is made from the
fixed accumulation account, such portion shall not exceed the sum of (a) and
(b), where
(a) is the total amount of net purchase payments made to the fixed
accumulation account during the contract year; and
(b) is the interest credited to the fixed accumulation account during
the contract year that exceeds the minimum guaranteed interest.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 9
<PAGE> 10
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.
(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, if it was not deducted earlier.
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 to any date at least ten years after the
date of the last purchase payment. This can be done 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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 10
<PAGE> 11
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 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.
(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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 11
<PAGE> 12
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.
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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 12
<PAGE> 13
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.
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>
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>
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 13
<PAGE> 14
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
AGE OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE -------------------------------------------------------------------------
ANNUITANT 50 55 60 65 70 75 80 85 90
- -------------------------------------------------------------------------------------------
<S> <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 OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ------------------------------------------------------------------------
ANNUITANT 50 55 60 65 70 75 80 85 90
- ------------------------------------------------------------------------------------------
<S> <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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 14
<PAGE> 15
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 OF ANNUITANT
- ------------ NON- 5 YEARS 10 YEARS INSTALLMENT ------------ 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>
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>
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 16
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AGE OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ----------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------
<S> <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 OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ---------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- ----------------------------------------------------------------------------------------
<S> <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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 17
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 OF ANNUITANT
- ------------ NON- 5 YEARS 10 YEARS INSTALLMENT ------------ 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>
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>
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 18
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AGE OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ---------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- ----------------------------------------------------------------------------------------
<S> <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 OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ----------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------
<S> <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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 19
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 OF ANNUITANT
- ------------ NON- 5 YEARS 10 YEARS INSTALLMENT ------------ 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>
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>
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 20
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
AGE OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ----------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -------------------------------------------------------------------------------------------
<S> <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 OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ----------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------
<S> <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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 16
<PAGE> 21
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 OF ANNUITANT
- ------------ NON- 5 YEARS 10 YEARS INSTALLMENT ------------ 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>
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>
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
<PAGE> 22
OPTION 2: JOINT & SURVIVOR LIFE INCOME
(a) Nonrefund
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
AGE OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE --------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- ---------------------------------------------------------------------------------
<S> <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 OF
AGE FEMALE CONTINGENT ANNUITANT
OF MALE ----------------------------------------------------------------------------
ANNUITANT 55 60 65 70 75 80 85 90
- -----------------------------------------------------------------------------------------
<S> <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.
- --------------------------------------------------------------------------------
FORM 98-VA-2 THE OHIO NATIONAL LIFE INSURANCE COMPANY PAGE 15
