<PAGE> 1
File No. 33-62284
811-1979
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. 8 / X /
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
Amendment No. / /
(Exact Name of Registrant)
OHIO NATIONAL VARIABLE ACCOUNT B
(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 amendment as is practicable.
Registrant has heretofore registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Rule 24f-2 and on February 27, 1997 filed
its Rule 24f-2 Notice for its most recent fiscal year.
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
X on May 1, 1997 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
OHIO NATIONAL VARIABLE ACCOUNT B
<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 The Ohio National Companies
6 Deductions and Expenses
7 Description of Variable Annuity Contracts
8 Annuity Period
9 Death Benefit
10 Accumulation Period
11 Surrender and Partial Withdrawal
12 Federal Tax Status
13 Not applicable
14 Table of Contents
Caption in Statement of Additional
Information
15 Cover Page
16 Table of Contents
17 Not applicable
18 Custodian
Independent Certified Public Accountants
19 See Prospectus (Distribution of Variable Annuity Contracts)
20 Underwriter
21 Calculation of Money Market Subaccount Yield
Total Return
22 See Prospectus (Annuity Period)
23 Financial Statements
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Caption in Part C
-----------------
<S> <C>
24 Financial Statements and Exhibits
25 Directors and Officers of the Depositor
26 Persons Controlled by or Under Common Control with the
Depositor or Registrant
27 Number of Contractowners
28 Indemnification
29 Principal Underwriter
30 Location of Accounts and Records
31 Not applicable
32 Not applicable
</TABLE>
<PAGE> 4
PART A
PROSPECTUS
<PAGE> 5
PROSPECTUS
SINGLE PURCHASE PAYMENT
INDIVIDUAL VARIABLE ANNUITY CONTRACTS
OHIO NATIONAL VARIABLE ACCOUNTS A AND B
THE OHIO NATIONAL LIFE INSURANCE COMPANY
ONE FINANCIAL WAY
CINCINNATI, OHIO 45242
TELEPHONE (513) 794-6452
This prospectus offers multiple funded, single purchase payment, individual
variable annuity contracts that provide for the accumulation of values and the
payment of annuity benefits on a variable and/or fixed basis. Unless
specifically stated otherwise, only provisions relating to the variable portion
of the contracts are described in this prospectus. The fixed portion
("Guaranteed Accumulation Account") is briefly described in an appendix to the
Statement of Additional Information.
Variable annuities are designed to provide lifetime annuity payments which will
vary with the investment results of the investment vehicle chosen. The
accumulation value of a contract will vary with the investment performance of
Ohio National Fund, Inc. (the "Fund"), prior to the annuity payout date, and the
amount of each annuity payment will vary with the Fund's investment performance
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 plans.
The minimum purchase payment is $10,000. Generally the maximum purchase payment
is $500,000. The net purchase payment (after the deduction of any applicable
state premium tax) is allocated to one or more subaccounts of Ohio National
Variable Account A ("VAA") for tax qualified contracts or Ohio National Variable
Account B ("VAB") for non-tax-qualified contracts in such portion as the
contract owner may choose. VAA and VAB are separate accounts established by The
Ohio National Life Insurance Company ("Ohio National Life"). The assets of VAA
and VAB are invested in shares of the Fund, a mutual fund having 13 portfolios
in which the contracts' assets may be invested: Equity Portfolio, Money Market
Portfolio, Bond Portfolio, Omni Portfolio, International Portfolio, Capital
Appreciation Portfolio, Small Cap Portfolio, Global Contrarian Portfolio,
Aggressive Growth Portfolio, Core Growth Portfolio, Growth & Income Portfolio,
S&P 500 Index Portfolio and Social Awareness Portfolio. (See the accompanying
prospectus of the Fund which also contains information about other portfolios
that are not available for the contracts offered herein.)
All or part of the contract's accumulation value may be withdrawn before the
annuity payout date. Amounts withdrawn may be subject to federal income tax
penalties, and a contingent deferred sales charge may be assessed up to 6% of
the amount withdrawn. Exercise of contract rights may be subject to the terms of
any qualified employee trust or annuity plan under which a contract is
purchased. This prospectus contains no information concerning such trusts or
plans. The contracts offered hereby may be revoked by the purchaser without
penalty within 20 days of their delivery.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. IT SETS FORTH THE
INFORMATION ABOUT VAA, VAB AND THE VARIABLE ANNUITY CONTRACTS OFFERED BY THIS
PROSPECTUS THAT YOU SHOULD KNOW BEFORE INVESTING. ADDITIONAL INFORMATION ABOUT
VAA AND VAB HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
STATEMENTS OF ADDITIONAL INFORMATION DATED MAY 1, 1997. THE STATEMENTS OF
ADDITIONAL INFORMATION FOR EACH OF VAA AND VAB ARE INCORPORATED HEREIN BY
REFERENCE AND ARE AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY WRITING OR
CALLING OHIO NATIONAL LIFE AT THE ABOVE ADDRESS. THE TABLE OF CONTENTS FOR THE
STATEMENTS OF ADDITIONAL INFORMATION IS ON PAGE 2.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SHOULD BE ACCOMPANIED BY THE CURRENT PROSPECTUS OF OHIO NATIONAL
FUND, INC.
MAY 1, 1997
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
Fee Table ................................................................. 3
Accumulation Unit Values ............................................... 5
Financial Statements ................................................... 6
The Ohio National Companies ............................................... 6
Ohio National Life ..................................................... 6
Ohio National Variable Accounts A and B ................................ 6
Ohio National Fund, Inc. ............................................... 6
Distribution of Variable Annuity Contracts ................................ 7
Deductions and Expenses ................................................... 8
Contingent Deferred Sales Charge ....................................... 8
Deduction for Administrative Expenses .................................. 8
Deduction For Risk Undertakings ........................................ 8
Transfer Fee ........................................................... 9
Deduction For State Premium Tax ........................................ 9
Fund Expenses .......................................................... 9
Description of Variable Annuity Contracts ................................. 9
20-Day Free Look ....................................................... 9
Accumulation Period .................................................... 9
Annuity Period ......................................................... 12
Other Contract Provisions .............................................. 14
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
Transfer Limitations
Total Return
Financial Statements for Ohio National Life and VAA or VAB
Appendix: Loans Under Tax-Sheltered Annuities(VAA only) Guaranteed Accumulation
Account
GLOSSARY OF SPECIAL TERMS
ACCUMULATION PERIOD - The period prior to the annuity payout date and during the
lifetime of the annuitant.
ACCUMULATION UNIT - A unit of measure used to determine the value of contracts
during the accumulation period.
ACCUMULATION VALUE _ The cash value of an annuity contract before the annuity
payout date.
ANNUITANT - Any natural person who is to receive or is receiving annuity
payments and upon whose continuation of life annuity payments with life
contingencies depend.
ANNUITY PAYOUT DATE - The date on which annuity payments are to begin.
ANNUITY PAYMENTS - Periodic payments made to an annuitant pursuant to an annuity
contract.
ANNUITY UNIT - A unit of measure used to determine the second and subsequent
variable annuity payments and reflecting the investment performance of the Fund.
FUND SHARES - Shares of Ohio National Fund, Inc., or shares of another
registered open-end investment company substituted therefor.
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 PAYMENT - The amount of payment made by, or on behalf of, the owner
under the annuity contract.
SETTLEMENT - The application of the accumulation value of an annuity contract
under the settlement provisions contained therein.
SUBACCOUNT - The Equity subaccount, Money Market subaccount, Bond subaccount,
Omni subaccount, International subaccount, Capital Appreciation subaccount,
Small Cap subaccount, Global Contrarian subaccount, Aggressive Growth
subaccount, Core Growth subaccount, Growth & Income subaccount, S&P 500 Index
subaccount, Social Awareness subaccount or such other subaccounts as may be
established under VAA or VAB.
VALUATION PERIOD - The period of time from one determination of accumulation
unit and annuity unit values to their next determination. Such determination is
made at the same time that the net asset value of Fund Shares is determined. See
page 22 of the accompanying Fund prospectus.
1940 ACT - The Investment Company Act of 1940, as amended, or any similar
successor federal legislation.
2
<PAGE> 7
FEE TABLE
<TABLE>
<CAPTION>
CONTRACTOWNER TRANSACTION EXPENSES CONTRACT YEAR
Deferred Sales Load (as a percentage of OF SURRENDER PERCENTAGE
amount withdrawn or surrendered) OR WITHDRAWAL CHARGED
------------- ---------
<S> <C>
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and later 0%
</TABLE>
Exchange (transfer) Fee $3 (currently no charge for the first 4 transfers
per year)
VAA AND VAB ANNUAL EXPENSES (as a percentage
of average account value)
<TABLE>
<S> <C>
Mortality and Expense Risk Fees*** 0.65%
Account Fees and Expenses 0.25%
----
Total VAA and VAB Annual Expenses 0.90%
</TABLE>
<TABLE>
<CAPTION>
FUND ANNUAL EXPENSES (after fee waiver*) (as a percentage
of the Fund's average net assets) MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
---------- -------- ----------
<S> <C> <C> <C>
Equity ...................... 0.55% 0.19% 0.74%
Money Market* ............... 0.25% 0.19% 0.44%
Bond ........................ 0.60% 0.19% 0.79%
Omni ........................ 0.58% 0.19% 0.77%
International ............... 0.90% 0.25% 1.15%
Capital Appreciation ........ 0.80% 0.17% 0.97%
Small Cap ................... 0.80% 0.16% 0.96%
Global Contrarian ........... 0.90% 0.39% 1.29%
Aggressive Growth ........... 0.80% 0.21% 1.01%
Core Growth** ............... 0.95% 0.60% 1.55%
Growth & Income** ........... 0.85% 0.55% 1.40%
S&P 500 Index** ............. 0.40% 0.20% 0.60%
Social Awareness** .......... 0.60% 0.25% 0.85%
</TABLE>
EXAMPLE - If you surrendered your contract at the end of the applicable time
period, you would pay the following aggregate expenses on a $1,000 investment in
each subaccount, assuming 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $73 $92 $110 $194
Money Market* 70 83 95 161
Bond 73 93 113 200
Omni 73 93 112 198
International 77 104 131 238
Capital Appreciation 75 98 122 219
Small Cap 75 98 122 218
Global Contrarian 78 108 138 252
Aggressive Growth 75 100 124 223
Core Growth** 80 115 N/A N/A
Growth & Income** 79 111 N/A N/A
S&P 500 Index** 71 87 N/A N/A
Social Awareness** 74 95 N/A N/A
</TABLE>
3
<PAGE> 8
EXAMPLE - If you do not surrender your contract at the end of the applicable
time period, you would pay the following aggregate expenses on the same
investment:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Equity $17 $52 $89 $194
Money Market* 14 42 73 161
Bond 17 53 92 200
Omni 17 53 91 198
International 21 64 110 238
Capital Appreciation 19 59 101 219
Small Cap 19 58 101 218
Global Contrarian 22 69 117 252
Aggressive Growth 19 60 103 223
Core Growth** 25 76 N/A N/A
Growth & Income** 23 72 N/A N/A
S&P 500 Index** 15 47 N/A N/A
Social Awareness** 18 55 N/A N/A
</TABLE>
The purpose of the above table is to help you to understand the costs and
expenses that a variable annuity contractowner will bear directly or indirectly.
THE EXAMPLE INCLUDED IN THE ABOVE TABLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSE, AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE shown. Note that the expense amounts shown in the example are
aggregate amounts for the total number of years indicated. Neither the table nor
the example reflect any premium taxes that may be applicable to a contract,
which currently range from 0% to 3.5%. The above table and example reflect only
the charges for contracts currently offered by this prospectus and not other
contracts that may be offered by Ohio National Life. For further details, see
Deduction For State Premium Tax, page 9.
*For the Money Market Portfolio, management fees in excess of 0.25% are
presently being waived by the Fund's investment adviser. Without the waiver, the
Money Market Portfolio's Management Fee would be 0.30%, its Total Fund Annual
Expenses would be 0.49%, and its expenses would total $70 for a $1,000 contract
surrendered at the end of 1 year, $84 if surrendered at the end of 3 years, $98
if surrendered at the end of 5 years or $167 if surrendered at the end of 10
years. For a $1,000 contract not surrendered, the expenses without the waiver
would be $14 for 1 year, $44 for 3 years, $76 for 5 years or $167 for 10 years.
**The "Other Expenses" (and, accordingly, the Total Fund Expenses) for the Core
Growth, Growth & Income, S&P 500 Index and Social Awareness Portfolios are based
on estimates.
***The Mortality and Expense risk fees may be changed at any time, but may not
be increased to more than 1.55%.
4
<PAGE> 9
ACCUMULATION UNIT VALUES
<TABLE>
<CAPTION>
EQUITY SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993* $10.000000 $10.239365 25,900 20,283
1994 10.239365 10.173015 120,867 115,993
1995 10.173015 12.824740 301,147 239,825
1996 12.824740 15.042658 534,028 405,466
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET SUBACCOUNT**
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993 $10.000000 $10.045964 5,554 1,204
1994 10.045964 10.354108 95,638 56,892
1995 10.354108 10.837896 136,205 34,285
1996 10.837896 11.296489 149,846 74,056
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
BOND SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993 $10.000000 $9.910842 378 19,364
1994 9.910842 9.445623 10,472 75,521
1995 9.445623 11.130129 64,973 97,129
1996 11.130129 11.439849 82,917 101,403
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
OMNI SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993 $10.000000 $10.143037 42,348 44,348
1994 10.143037 9.999661 150,263 109,853
1995 9.999661 12.165280 244,025 194,243
1996 12.165280 13.930650 511,033 342,379
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1993* $10.000000 $10.834626 34,538 15,210
1994 10.834626 11.604279 204,939 234,799
1995 11.604279 12.892796 384,682 330,279
1996 12.892796 14.628252 678,397 674,403
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1994* $10.000000 $10.390128 52,732 34,382
1995 10.390128 12.626458 211,756 136,612
1996 12.626458 14.484990 383,878 243,883
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1994* $10.000000 $12.053440 76,033 39,627
1995 12.053440 15.889068 198,048 123,612
1996 15.889068 18.535631 337,460 204,017
---- ---------- ---------- ------ ------
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
GLOBAL CONTRARIAN SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995* $10.000000 $10.816003 47,134 21,621
1996 10.816003 12.015818 132,292 178,856
---- ---------- ---------- ------ ------
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH SUBACCOUNT
YEAR ENDED UNIT VALUE AT UNIT VALUE AT VAA UNITS VAB UNITS
DECEMBER 31 BEGINNING OF YEAR END OF YEAR END OF YEAR END OF YEAR
----------- ----------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995* $10.000000 $12.610012 41,681 39,115
1996 12.610012 12.592390 118,818 80,875
---- ---------- ---------- ------ ------
</TABLE>
* Series of variable annuity contracts commenced on October 7, 1993. Capital
Appreciation and Small Cap subaccounts commenced on May 1, 1994. Global
Contrarian and Aggressive Growth subaccounts commenced on March 31, 1995.
** The current annualized yield of the Money Market subaccount for the seven
days ended December 31, 1996, was 4.72%.
FINANCIAL STATEMENTS
The complete financial statements of VAA or VAB, and of Ohio National Life, and
the Independent Auditors' Reports thereon, may be found in the Statements of
Additional Information for VAA and VAB.
THE OHIO NATIONAL COMPANIES
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 ACCOUNTS A AND B
VAA and VAB were established in 1969 by Ohio National Life as separate accounts
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 or VAB. Income, gains and losses, whether or not realized,
from assets allocated to VAA and VAB are, as provided in the contracts, credited
to or charged against VAA or VAB without regard to other income, gains or losses
of Ohio National Life. The assets maintained in VAA and VAB 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 and VAB
are registered as unit investment trusts under the 1940 Act.
The assets of each subaccount of VAA and VAB are invested at net asset value
(without an initial sales charge) in shares of a corresponding portfolio of the
Fund: the Equity Portfolio, Money Market Portfolio, Bond Portfolio, Omni
Portfolio (a flexible portfolio fund), International Portfolio, Capital
Appreciation Portfolio, Small Cap Portfolio, Global Contrarian Portfolio,
Aggressive Growth Portfolio, Core Growth Portfolio, Growth & Income Portfolio,
S&P 500 Index Portfolio or Social Awareness Portfolio.
6
<PAGE> 11
OHIO NATIONAL FUND, INC.
The Fund is a diversified, open-end, management investment company registered
under the 1940 Act. The value of the Fund's investments fluctuates daily and is
subject to the risk of changing economic conditions as well as the risk inherent
in the ability of management to anticipate changes necessary in such investments
to meet changes in economic conditions. The Fund receives investment advice, for
a fee, from its investment adviser, Ohio National Investments, Inc., and from
Societe Generale Asset Management Corp. (sub-adviser to the International and
Global Contrarian Portfolios), T. Rowe Price Associates, Inc. (sub-adviser to
the Capital Appreciation Portfolio), Founders Asset Management, Inc.
(sub-adviser to the Small Cap Portfolio), Strong Capital Management, Inc.
(sub-adviser to the Aggressive Growth Portfolio), Pilgrim Baxter & Associates,
Ltd. (sub-adviser to the Core Growth Portfolio), and Robertson Stephens
Investment Management, L.P. (sub-adviser to the Growth & Income Portfolio). For
additional information concerning the Fund, including the investment objectives
of each of its portfolios, see the attached Fund prospectus. Read the Fund
prospectus carefully before investing. The Fund prospectus contains information
about other portfolios that are not available for the contracts offered herein.
In addition to being offered to VAA and VAB, 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. In the future,
Fund shares may 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 to invest in the Fund. Although
neither Ohio National Life nor the Fund currently foresees any such
disadvantage, the Board of Directors of the Fund will monitor events in order to
identify any material conflict between variable life and variable annuity
contractowners and to determine what action, if any, should be taken in response
thereto, including the possible withdrawal of VAA`s and/or VAB's participation
in the Fund. Material conflicts could result from such things as (1) changes in
state insurance law; (2) changes in federal income tax law; (3) changes in the
investment management of any portfolio of the Fund; or (4) differences between
voting instructions given by variable life and variable annuity contractowners.
VOTING RIGHTS
Ohio National Life shall vote Fund shares held in VAA and VAB at meetings of
Fund shareholders 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. Fund proxy
material will be distributed to each owner together with appropriate forms for
giving voting instructions. Fund shares held in VAA and VAB, 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 and VAB, respectively.
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 Fund portfolio as of the same date. During the
annuity payment period, the number of Fund portfolio 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
portfolio share as of the same date. Generally, the number of votes tends to
decrease as annuity payments progress.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
The variable annuity contracts are sold by Ohio National Life insurance agents
who are also registered representatives (a) of The O. N. Equity Sales Company
("ONESCO"), a wholly-owned subsidiary of Ohio National Life, registered under
the Securities Exchange Act of 1934, and a member of the National Association of
Securities Dealers, Inc. or (b) of other broker-dealers that have entered into
distribution agreements with Ohio National Equities, Inc. ("ONE, Inc.," another
wholly-owned subsidiary of Ohio National Life), which is the principal
underwriter of the contracts. Ohio National Life pays ONE , Inc. 5.25% of
purchase payments.
7
<PAGE> 12
Inc. then pays a portion of that amount to ONESCO and the other
broker-dealers as compensation for their sales efforts. ONESCO and the other
broker-dealers will remunerate their registered representatives from their own
funds. Purchase payments on which no compensation is paid to registered
representatives will not be included in amounts on which the 5.25% sales
compensation will be paid to ONE, Inc. 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 One, Inc., 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 sales personnel, cost of sales
literature and prospectuses, and other expenses related to sales activity. Such
charge equals a percentage of the amount withdrawn. This percentage will vary
with the contract year in which the surrender or withdrawal occurs as follows:
<TABLE>
<CAPTION>
CONTRACT
YEARS PERCENTAGE
----- ----------
<S> <C>
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 and later 0%
</TABLE>
Once each contract year, a partial withdrawal of not more than 10% of the
accumulation value (as of the first day of the contract year) may be made
without the imposition of the contingent deferred sales charge.
DEDUCTION FOR ADMINISTRATIVE EXPENSES
A deduction is made at the end of each valuation period equal to 0.25% on an
annual basis of the contract value for administrative expenses. This deduction
is not designed to produce a profit but to reimburse Ohio National Life for
expenses incurred for accounting, auditing, legal, contract owner services,
reports to regulatory authorities and contract owners, contract issue, etc.
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 12). 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. Such deduction may be decreased by Ohio National Life at any
time and may be increased not more frequently than 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 0.25% for mortality risk, and 0.4% 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.
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<PAGE> 13
TRANSFER FEE
A transfer fee of $3 (which may be increased to $10) is made for transferring
contract values from one or more subaccounts to one or more other subaccounts.
The fee is charged against the subaccount(s) from which the transfer is
effected. Currently, no fee is charged for the first four transfers each year.
DEDUCTION FOR STATE PREMIUM TAX
Most states do not presently charge a premium tax for these contracts. Where a
tax applies, the rates for tax-qualified contracts are presently 0.5% in
California, 1.0% in Puerto Rico and West Virginia, 2.0% in Kentucky and 2.25% in
the District of Columbia. For non-tax-qualified contracts, the rates are 1.0% in
Puerto Rico, West Virginia and Wyoming, 1.25% in South Dakota, 2.0% in Kansas,
Kentucky and Maine, 2.25% in the District of Columbia, 2.35% in California and
3.0% in Nevada. Normally, any such applicable taxes will not be deducted until
annuity payments begin rather than being deducted from the purchase payment.
FUND EXPENSES
There are deductions from, and expenses paid out of, the assets of the Fund.
These are described in the attached Fund prospectus.
DESCRIPTION OF VARIABLE ANNUITY CONTRACTS
20-DAY FREE LOOK
The contract owner may revoke the contract at any time until the end of 20 days
after receipt of the contract and receive a refund of the entire purchase price.
To revoke, the owner must return the contract to Ohio National Life within the
20 day period. In those states where required by state law, the value of the
contract as of the date of cancellation will be returned in lieu of the entire
purchase price in case of revocation during the 20 day free look period.
ACCUMULATION PERIOD
PURCHASE PAYMENT PROVISIONS
The contracts provide for a single minimum purchase payment of $10,000 and a
maximum payment of $500,000. A larger payment, or more than one payment, may be
made with Ohio National Life's consent.
ACCUMULATION UNITS
Prior to the annuity payout date, the contract value is measured by accumulation
units. The purchase payment results in the crediting of accumulation units to
the contract (see Crediting Accumulation Units, below). 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 contract values are allocated.
CREDITING ACCUMULATION UNITS
Completed application forms, together with a check for the 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 purchase payment
is then credited to the contract in the form of accumulation units. The purchase
payment is credited not later than two business days after receipt if the
application and all information necessary for processing the purchase payment
are complete. If an application is not accepted within five business days, the
purchase payment will be returned immediately to the applicant unless the
applicant specifically consents to having Ohio National Life retain the purchase
payment until the application is completed. After that, the purchase payment
will be credited within two business days.
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<PAGE> 14
ALLOCATION OF THE PURCHASE PAYMENT
In the contract application, you may direct the allocation of your purchase
payment among the subaccounts of VAA or VAB and the general account of Ohio
National Life. The amount allocated to any subaccount or the general account
must equal a whole percentage.
ACCUMULATION UNIT VALUE AND ACCUMULATION VALUE
The accumulation unit value of each subaccount of VAA and VAB 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 and VAB. 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 a share in the appropriate portfolio of the
Fund determined as of the end of a valuation period, plus
(2)The per share amount of any dividends or other distributions declared
for that portfolio by the Fund if the "ex-dividend" date occurs during
the valuation period, plus or minus
(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 or VAB; (No federal income taxes
are applicable under present law.)
(b)is the net asset value of a share in the appropriate portfolio of the Fund
determined as 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 8, and
Deduction for Risk Undertakings, page 8.)
SURRENDER AND PARTIAL WITHDRAWAL
Prior to the annuity payout date, the owner of a contract may surrender (totally
withdraw the value of) his or her contract for its accumulation value or elect a
partial (at least $500) withdrawal therefrom. These transactions may be subject
to the contingent deferred sales charge described on page 8. Such charge is a
percentage of the total amount withdrawn. For example, if a partial withdrawal
of $500 is requested during the first contract year, Ohio National Life would
pay you $500, but the total amount deducted from the accumulation value would be
$531.91 (i.e., $531.91 x 6% $31.91). 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 any contingent deferred
sales charge, provided, however, that no partial withdrawal that would cause the
contract value to fall below $5,000 will be allowed. 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 tax-qualified retirement plans. (See Texas State
Optional Retirement Program, page 12 and Tax-Deferred Annuities, page 17. For
tax consequences of a surrender or withdrawal, see Federal Tax Status, page 15.)
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<PAGE> 15
Occasionally Ohio National Life may receive a request for a surrender or partial
withdrawal before the check for your purchase payment has cleared the banking
system. Ohio National Life may delay the surrender or partial withdrawal until
your check has cleared. Ohio National Life requires the return of the contract
in the case of a complete surrender.
The right to withdraw may be suspended or the date of payment postponed (1) for
any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings) or during which trading on the Exchange,
as determined by the Securities and Exchange Commission, is restricted; (2) for
any period during which an emergency, as determined by the Commission, exists as
a result of which disposal of securities held in the Fund 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 subaccount to another upon the
request of the owner. Transfers may be made at any time during the accumulation
period. The amount of any such transfer must be at least $300 (or the entire
value of the contract's interest in a subaccount, if less). Ohio National Life
reserves the right to limit the number, frequency, method or amount of
transfers. Transfers from any portfolio of the Fund 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. 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 9, and
Transfers After Annuity Payout Date, page 14.)
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 Accumulation Account, or (b) from the
Guaranteed Accumulation Account to any variable 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 to at least 12
transfers must be scheduled and the term of the DCA program may not exceed 5
years. 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
Accumulation 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 General
Accumulation Account, in anticipation of retirement, in order to reduce the risk
of making a single transfer during a low market.
TELEPHONE TRANSFERS
If the contract owner first submits a pre-authorization form to Ohio National
Life, transfers may be made by telephoning Ohio National Life, 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.
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<PAGE> 16
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 end of the valuation period in which written notice of death of the
annuitant is received by Ohio National Life. It will be paid in one sum into an
interest-bearing checking account established in the beneficiary's name with
Bank One, Springfield, Illinois, unless the owner or beneficiary elects
settlement under one or more of the settlement options provided in the contract.
The checking account will bear interest based upon then current money market
rates. The beneficiary will then be able to write checks against such account at
any time and in any amount up to the total in the account. Such checks must be
for a minimum of $250. The amount of death benefit is the accumulation value of
the contract or, if greater, the difference between your purchase payment and
any partial withdrawals.
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 3.5% of
the single purchase payment. Ohio National Life credits the Guaranteed
Accumulation Account of the employee's contract in this amount at the time the
purchase payment is made by the employee.
TEXAS STATE OPTIONAL RETIREMENT PROGRAM
Under the Texas State Optional Retirement Program (the "Program"), purchase
payments may be excluded from the gross income of state employees for federal
tax purposes to the extent that such purchase payments do not exceed the
exclusion allowance provided by the Code. The Attorney General of Texas has
interpreted the Program as prohibiting any participating state employee from
receiving the surrender value of a contract funding benefits under the Program
prior to termination of employment or the state employee's retirement, death or
total disability. Therefore, no surrender or partial withdrawal by a participant
in the Program will be allowed until the first of these events occurs.
ANNUITY PERIOD
ANNUITY PAYOUT DATE
Annuity payments under a contract will begin on the annuity payout date. This
date is selected by the owner at the time the contract is issued and must be at
least 30 days after the contract date. It may be changed from time to time by
the owner so long as the annuity payout date selected is the first day of any
month at least 30 days after the date of such change. The contract restricts the
annuity payout date to not later than the first of the month following the
annuitant's 90th birthday; however, this restriction may be waived by mutual
agreement between Ohio National Life and the owner.
The contracts include Ohio National Life's assurance that annuity payments will
be paid for the lifetime of the annuitant in accordance with the annuity rates
contained in the contract, regardless of actual mortality experience.
Once annuity payments commence, the contract cannot be surrendered for cash
except that, upon the death of the annuitant, the beneficiary shall be entitled
to surrender the contract for the commuted value of any remaining period-certain
payments.
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<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 Life Annuity with installment payments for the lifetime of the
1(a): 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 Life Annuity with installment payments guaranteed for five years
1(b): and continuing thereafter during the remaining lifetime of the
annuitant.
Option Life Annuity with installment payments guaranteed for ten years
1(c): and continuing thereafter during the remaining lifetime of the
annuitant.
Option Installment Refund Life Annuity with payments guaranteed for a
1(d): 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 Installment Refund Annuity with payments guaranteed for a fixed
1(e): number (up to thirty) of years. This option is available for
variable annuity payments 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 Joint & Survivor Life Annuity with installment payments during
2(a): 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 Joint & Survivor Life Annuity with installment payments
2(b): guaranteed for ten years and continuing thereafter during the
remaining lifetime of the annuitant or a designated contingent
annuitant.
Unless the contract owner directs otherwise, as of the annuity payout date the
contract values will be applied to provide annuity payments pro-rata from each
subaccount in the same proportion as the contract values immediately prior to
the annuity payout date.
If no election is in effect on the annuity payout date, the accumulation value
of the contract will be applied under Option 1(c) (except that certain contracts
might require a Joint and Survivor Annuity pursuant to the Pension Reform Act of
1974, as amended) with the beneficiary as payee for any remaining period-certain
installments payable after the death of the annuitant. Options 2(a) and 2(b) are
available only with the consent of Ohio National Life if the contingent
annuitant is not related to the annuitant.
Other settlement options are available as agreed to by Ohio National Life.
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
The first variable annuity payment is determined by applying the accumulation
value for each subaccount in accordance with the settlement option tables
contained in the contract. The rates contained in those tables depend upon the
annuitant's (and any contingent annuitant's) age and sex and the option
selected. Contracts issued to plans sponsored by employers subject to Title VII
of the Civil Rights Act of 1964 or similar state statutes use annuity tables
which do not vary with annuitant's sex. The accumulation value to be applied is
determined at the end of a valuation period (selected by Ohio National Life and
uniformly applied) not more than 10 valuation periods before the annuity payout
date.
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<PAGE> 18
If the amount to be applied under an option is less than $5,000, the option
shall not be available and accumulation value shall be paid in a single sum to
the annuitant. If the first periodic payment under any option would be less than
$25, Ohio National Life reserves the right to change the frequency of payments
so that the first such payment is at least $25.
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 and VAB 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 10) for such subsequent
valuation period and by a factor (0.9998925 for a one-day valuation period) to
neutralize the assumed interest rate discussed below.
The dollar amount of each subsequent variable annuity payment is equal to the
fixed number of annuity units for each subaccount multiplied by the value of the
annuity unit for the valuation period.
The annuity rate tables contained in the contracts are based on the Progressive
Annuity Mortality Table with compound interest at the effective rate of 4% per
year. A higher interest assumption would mean a higher initial annuity payment
but a more slowly rising series of subsequent annuity payments if annuity unit
values were increasing (or a more rapidly falling series of subsequent annuity
payments if annuity unit values were decreasing). A lower interest assumption
would have the opposite effect. If the actual net investment rate were equal to
the assumed interest rate, annuity payments would be level.
TRANSFERS AFTER ANNUITY PAYOUT DATE
After annuity payments have been made for at least 12 months, the annuitant can,
once each 12 months, 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 contract
may not be transferred except to (1) the annuitant, (2) a trustee or successor
trustee of a pension or profit-sharing trust which is qualified under Section
401 of the Code, or (3) the employer of the annuitant provided that the contract
after transfer is maintained under the terms of a retirement plan qualified
under Section 403(a) of the Code for the benefit of the annuitant, or (4) as
otherwise permitted by laws and regulations governing plans for which the
contract may be issued. Ownership of a non-tax-qualified contract may be
transferred.
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<PAGE> 19
PERIODIC REPORTS
Ohio National Life will furnish each owner, once each calendar quarter prior to
the annuity payout date, a statement showing the number of accumulation units
credited to the contract by subaccount and the accumulation unit value of each
unit as of the end of the preceding quarter. In addition, as long as the
contract remains in effect, Ohio National Life will forward such periodic
reports as may be furnished it by the Fund.
SUBSTITUTION FOR FUND SHARES
If investment in the Fund is no longer possible or in Ohio National Life's
judgment becomes inappropriate to the purposes of the contract, Ohio National
Life may substitute one or more other mutual funds. Substitution may be made
with respect to both existing investments and the investment of future purchase
payments. However, no such substitution will be made without any necessary
approval of the Securities and Exchange Commission. We may also add other
investment portfolios of the Fund or of additional mutual funds as eligible
investments of VAA or VAB.
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 Fund
portfolios 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 contingent deferred sales charge which 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 contingent
deferred sales charges as well as applicable asset-based charges.
Ohio National Life may also distribute sales literature comparing separate
account performance to the Consumer Price Index or to such established market
indexes as the Dow Jones Industrial Average, the Standard & Poor's 500 Stock
Index, IBC's Money Fund Reports, Lehman Brothers Bond Indices, Morgan Stanley
Europe Australia Far East Index, Morgan Stanley World Index, Russell 2000 Index,
or other variable annuity separate accounts.
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 and VAB are
a part of, and are taxed with, the operations of Ohio National Life, VAA and VAB
are not separately taxed as "regulated investment companies" under Subchapter M
of the Code.
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<PAGE> 20
As to tax-qualified contracts, no federal income tax is payable under present
law on dividend income or capital gains distributions from Fund Shares held in
VAA or upon capital gains realized by VAA on redemption of Fund Shares. When a
non-tax-qualified contract is issued in connection with a deferred compensation
plan or arrangement, all rights, discretions and powers relative to the contract
are vested in the employer and you must look only to your employer for the
payment of deferred compensation benefits. Generally, in that case, an annuitant
will have no "investment in the contract" and amounts received by you from your
employer under a deferred compensation arrangement will be taxable in full as
ordinary income in the year of receipt.
The contracts described in this prospectus are considered annuity contracts
under Section 72 of the Code, which generally provides for taxation of
annuities. Under existing provisions of the Code, any increase in the
accumulation value of the contract is not taxable to you as the owner or
annuitant until you receive it, either in the form of annuity payments, as
contemplated by the contract, or in some other form of distribution (provided
that the owner of a non-tax qualified contract must be a natural person for this
purpose). With certain exceptions, where the owner of a non-tax qualified
contract is a non-natural person (corporation, partnership or trust) any
increase in the accumulation value of the contract attributable to purchase
payments made after February 28, 1986 will be treated as ordinary income
received or accrued by the owner during the current tax year.
When annuity payments commence under the contract each payment is taxable under
Section 72 of the Code as ordinary income in the year of receipt if the
annuitant has neither paid any portion of the purchase payment for the contract
nor has previously been taxed on any portion of the purchase payment. If any
portion of the purchase payment 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 a 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
purchase of the annuity, or (7) incident to divorce. If an election is made not
to have withholding apply to the early withdrawal or if an insufficient amount
is withheld, the contract owner may be responsible for payment of estimated tax.
You may also incur penalties under the estimated tax rules if the withholding
and estimated tax payments are not sufficient. Failure to provide your taxpayer
identification number will automatically subject any payments under the contract
to withholding.
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TAX-DEFERRED ANNUITIES
Under the provisions of Section 403(b) of the Code, a purchase payment made for
an annuity contract purchased for an employee by a public educational
institution or certain other 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 purchase payment plus any other amounts
contributed to the purchase of a contract and toward benefits under qualified
retirement plans does 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 any purchase payment 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, a purchase payment made by an employer or trustee, pursuant
to a plan or trust qualified under Section 401(a) or 403(a) of the Code, is
generally excludable from gross income of the employee. The portion, if any, of
the purchase payment made by the employee, or which is considered taxable income
to the employee in the year the payment is made, constitutes an "investment in
the contract" under Section 72 of the Code for the employee's annuity benefits.
Salary reduction payments to a profit sharing plan qualifying under Section
401(k) of the Code are generally excludable from gross income of the employee.
The Code requires that plans must prohibit any distribution to a plan
participant prior to age 59-1/2, except in the event of death, total disability
or separation from service. Distributions must commence no later than April 1 of
the calendar year following the year in which the participant reaches age
70-1/2. Premature distribution of benefits or contributions in excess of those
permitted by the Code may result in certain penalties under the Code.
If an employee, or one or more of the beneficiaries, receives the total amounts
payable with respect to an employee within one taxable year after age 59-1/2 on
account of the employee's death or separation from service of the employer, any
amount received in excess of the employee's "investment in the contract" may be
taxed under special 5-year forward averaging rules. The taxpayer can elect to
have that portion of a lump-sum distribution attributable to years of
participation prior to January 1, 1974 given capital gains treatment. The
percentage of pre-1974 distribution subject to capital gains treatment decreases
as follows: 100%, 1987; 95%, 1988; 75%, 1989; 50%, 1990; and 25%, 1991. For tax
years 1992 and thereafter no capital gains treatment is available (except that
taxpayers who were age 50 before 1986 may still elect capital gains treatment.)
The employee receiving such a distribution may be able to make a "tax-free
rollover" of the distribution less the employee's "investment in the contract"
into another qualified plan in which the employee is a participant or into one
of the types of individual retirement arrangements permitted under the Code. An
employee's surviving spouse receiving such a distribution may be able to make a
tax-free rollover to one of the types of individual retirement arrangements
permitted under the Code. Amounts received that are eligible for "tax-free
rollover" will be subject to an automatic 20% withholding unless such amounts
are directly rolled over to another qualified plan or individual retirement
arrangement.
17
<PAGE> 22
INDIVIDUAL RETIREMENT ANNUITIES (IRA)
Section 408(b) of the Code provides that an individual may invest an amount up
to $2,000 per year of earned income in an IRA and claim it as a personal tax
deduction if such person or the person's spouse is not an "active participant"
in an employer maintained qualified retirement plan or such person has adjusted
gross income which does not exceed the "applicable dollar limit." For a single
taxpayer, the applicable dollar limitation is $25,000, with the amount of IRA
contribution which may be deducted reduced proportionately for Adjusted Gross
Income between $25,000-$35,000. For married couples filing jointly, the
applicable dollar limitation is $40,000, with the amount of IRA contribution
which may be deducted reduced proportionately for Adjusted Gross Income between
$40,000-$50,000. There is no deduction allowed for IRA contributions when
Adjusted Gross Income reaches $35,000 for individuals and $50,000 for married
couples filing jointly. In the alternative, an individual otherwise qualified
for an IRA may elect to contribute to an IRA for the individual and for the
individual's non-working spouse, with the total deduction limited to $4,000.
Individuals are permitted to make non-deductible IRA contributions to the extent
they are ineligible to make deductible IRA contributions. Any amount received
from another qualified plan (including another individual retirement
arrangement) which is eligible as a "tax-free rollover" may be invested in an
IRA, and is not counted toward the overall contribution limit. Earnings on
nondeductible IRA contributions are not subject to tax until they are withdrawn.
The combined limit on designated nondeductible and deductible contributions for
a tax year is the lesser of 100% of compensation or $2,000 ($4,000 in the case
of an additional contribution to a spousal IRA).
Generally, distributions (all or part) made prior to age 59-1/2 (except in the
case of death or disability) will result in a penalty tax of 10% plus ordinary
income tax treatment of the amount received. Additionally, there is an excise
tax of 6% of the amount contributed in excess of either the deductible limit or
nondeductible limit, as indicated above, if such amount is not withdrawn prior
to the filing of the income tax return for the year of contribution or applied
as an allowable contribution for a subsequent year. The excise tax will continue
to apply each year until the excess contribution is corrected. Distributions
after age 59-1/2 are treated as ordinary income at the time received.
Distributions must commence before April 1 following the year in which the
individual reaches age 70-1/2. A 50% nondeductible excise tax is imposed on the
excess in any tax year of the amount that should have been distributed over the
amount actually distributed.
SIMPLIFIED EMPLOYEE PENSION PLANS (SEPPs)
Under Section 408 of the Code, employers may establish SEPPs for their
employees. Under these plans the employer may contribute on behalf of an
employee to an individual retirement account or annuity. The amount of the
contribution is excludable from the employee's income.
Certain employees who participate in a SEPP will be entitled to elect to have
the employer make contributions to a SEPP on their behalf or to receive the
contributions in cash. If the employee elects to have contributions made on the
employee's behalf to a SEPP, it is not treated as current taxable income to the
employee. Elective deferrals under a SEPP are subject to an inflation-indexed
limit which is $9,500 for 1997. Salary-reduction SEPPs are available only if at
least 50% of the employees elect to have amounts contributed to the SEPP and if
the employer has 25 or fewer employees at all times during the preceding year.
An employee may also take a deduction for individual contributions to the IRA,
subject to the limits applicable to IRAs in general. Withdrawals from the IRAs
to which the employer contributes must be permitted. These withdrawals, however,
are subject to the general rules with respect to withdrawals from IRAs.
WITHHOLDING ON DISTRIBUTION
Distributions from tax-deferred annuities or qualified pension or profit sharing
plans that are eligible for "tax-free rollover" will be subject to an automatic
20% withholding unless such amounts are directly rolled over to an individual
retirement arrangement or another qualified plan. Federal income tax withholding
on annuity payments is required. However, recipients of annuity payments are
allowed to elect not to have the tax withheld. Such an election may be revoked
at any time with respect to annuity payments and thereafter withholding would
commence. Failure to provide your taxpayer identification number will
automatically subject any payments under the contract to withholding.
18
<PAGE> 23
APPENDIX A
IRA DISCLOSURE STATEMENT
This statement is designed to help you understand the requirements of federal
tax law which apply to your individual retirement annuity (IRA), your simplified
employee pension IRA (SEPP-IRA) for employer contributions, or to one you
purchase for your spouse (see "IRA for Non-working Spouse", on page 19). You can
obtain more information regarding your IRA either from your sales representative
or from any district office of the Internal Revenue Service.
FREE LOOK PERIOD
The annuity contract offered by this prospectus gives you the opportunity to
return the contract for a full refund within 20 days after it is delivered (see
page 9). This is a more liberal provision than is required in connection with
IRA's. To exercise this "free-look" provision write or call the address shown
below:
The Ohio National Life Insurance Company
P. O. Box 2669
Cincinnati, Ohio 45201
Telephone: (513) 794-6452 - 8:30 a.m. - 4:30 p.m. (Eastern Time Zone)
ELIGIBILITY REQUIREMENTS
IRAs are intended for all persons with earned compensation whether or not they
are covered under other retirement programs. Additionally if you have a
non-working spouse (and you file a joint tax return), you may establish an IRA
on behalf of your non-working spouse. A working spouse may establish his or her
own IRA. A divorced spouse receiving taxable alimony (and no other income) may
also establish an IRA.
CONTRIBUTIONS AND DEDUCTIONS
Contributions to your IRA will be deductible if you or your spouse is not an
"active participant" in an employer maintained qualified retirement plan or you
have Adjusted Gross Income which does not exceed the "applicable dollar limit".
IRA (or SEPP-IRA) contributions must be made by no later than the time you file
your income tax return for that year. For a single taxpayer, the applicable
dollar limitation is $25,000, with the amount of IRA contribution which may be
deducted reduced proportionately for Adjusted Gross Income between
$25,000-$35,000. For married couples filing jointly, the applicable dollar
limitation is $40,000, with the amount of IRA contribution which may be deducted
reduced proportionately for Adjusted Gross Income between $40,000-$50,000. There
is no deduction allowed for IRA contributions when Adjusted Gross Income reaches
$35,000 for individuals and $50,000 for married couples filing jointly.
Contributions made by your employer to your SEPP-IRA are excludable from your
gross income for tax purposes in the calendar year for which the amount is
contributed. Certain employees who participate in a SEPP-IRA will be entitled to
elect to have their employer make contributions to their SEPP-IRA on their
behalf or to receive the contributions in cash. If the employee elects to have
contributions made on the employee's behalf to the SEPP, those funds are not
treated as current taxable income to the employee. Elective deferrals under a
SEPP-IRA are subject to an inflation-adjusted limit which is $9,500 for 1997.
Salary-reduction SEPP-IRAs (also called "SARSEPs") are available only if at
least 50% of the employees elect to have amounts contributed to the SEPP-IRA and
if the employer has 25 or fewer employees at all times during the preceding
year.
The IRA maximum annual contribution and your tax deduction is limited to the
lesser of: (1) $2,000 or (2) 100% of your earned compensation. Contributions in
excess of the deduction limits may be subject to penalty. See below.
Under a SEPP-IRA agreement, the maximum annual contribution which your employer
may make on your behalf to a SEPP-IRA contract which is excludable from your
income is the lesser of 15% of your salary or $22,500. An employee who is a
participant in a SEPP-IRA agreement may make after-tax contributions to the
SEPP-IRA contract, subject to the contribution limits applicable to IRAs in
general. Those employee contributions will be deductible subject to the
deductibility rules described above.
19
<PAGE> 24
The maximum tax deductible annual contribution that a divorced spouse with no
other income may make to an IRA is the lesser of (1) $2,000 or (2) 100% of
taxable alimony.
If you or your employer should contribute more than the maximum contribution
amount to your IRA or SEPP-IRA, the excess amount will be considered an "excess
contribution". You are permitted to withdraw an excess contribution from your
IRA or SEPP-IRA before your tax filing date without adverse tax consequences.
If, however, you fail to withdraw any such excess contribution before your tax
filing date, a 6% excise tax will be imposed on the excess for the tax year of
contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the
following tax year can be avoided if the excess is (1) withdrawn before the end
of the following year, or (2) treated as a current contribution for the
following year. (See the Pre-mature Distributions, page 20, for penalties
imposed on withdrawal when the contribution exceeds $2,000).
IRA FOR NON-WORKING SPOUSE
If you establish an IRA for yourself, you may 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 IRA's; (ii) $4,000; or (iii) 100%
of your combined gross income.
Contributions in excess of the contribution limits may be subject to 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 rollover 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 unless you
comply with special rules requiring distributions to be made at least annually
over your life expectancy.
20
<PAGE> 25
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.
Withdrawal of excess contributions after the due date of your tax return will
generally be subject to the 10% penalty unless the excess contribution results
from erroneous information from a plan trustee making an excess rollover
contribution or unless you are over age 59-1/2 or are disabled.
DISTRIBUTION AT RETIREMENT
Once you have attained age 59-1/2 (or have become totally disabled), you may
elect to receive a distribution of your IRA (or SEPP-IRA) regardless of when you
actually retire. You may elect to receive the distribution in either one sum or
under any one of the periodic payment options available under the contract. The
distributions from your IRA under any one of the periodic payment options or in
one sum will be treated as ordinary income as you receive them.
INADEQUATE OR UNDER DISTRIBUTIONS - 50% TAX
Your IRA or SEPP-IRA is intended to provide retirement benefits over your
lifetime. Thus, federal law requires that you either (1) receive a lump-sum
distribution of your IRA by April 1 of the year following the year in which you
attain age 70-1/2 or (2) start to receive periodic payments by that date. If you
elect to receive periodic payments, those payments must be sufficient to pay out
the entire value of your IRA during your life expectancy (or over the joint life
expectancies of you and your spouse). If the payments are not sufficient to meet
these requirements, an excise tax of 50% will be imposed on the amount of any
underpayment.
DEATH BENEFITS
If you, (or your surviving spouse) die before receiving the entire value of your
IRA (or SEPP-IRA), the remaining interest must be distributed to your
beneficiary (or your surviving spouse's beneficiary) in one lump-sum or applied
to purchase an immediate annuity for the beneficiary. This annuity must be
payable over the life expectancy of the beneficiary within one year after your
or your spouse's death. If your spouse is the designated beneficiary, he or she
is treated as the owner of the IRA. If minimum required distributions have
begun, the entire amount must be distributed at least as rapidly as if the owner
had survived. A distribution of the balance of your IRA upon your death will not
be considered a gift for federal tax purposes, but will be included in your
gross estate for purposes of federal estate taxes.
<PAGE> 26
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 27
OHIO NATIONAL VARIABLE ACCOUNT B
OF
THE OHIO NATIONAL LIFE INSURANCE COMPANY
One Financial Way
Cincinnati, Ohio 45242
Telephone (513) 794-6452
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the prospectus for Ohio National Variable Account B ("VAB")
single purchase payment individual non-tax qualified variable annuity contracts
dated May 1, 1997. To obtain a free copy of the VAB prospectus, write or call
The Ohio National Life Insurance Company ("Ohio National Life") at the above
address.
<TABLE>
<CAPTION>
Table of Contents
<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: Guaranteed Accumulation Account . . . . . . . . .47
</TABLE>
"TOP PLUS" NON-TAX QUALIFIED
<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 Ohio National Fund, Inc.
("Fund") and other assets credited to VAB 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 VAB during
which the purchase payment is received by Ohio National Life. The Bank effects
redemptions of Fund shares held by VAB upon instructions from Ohio National Life
at net asset value determined as of the end of the valuation period of VAB
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 VAB.
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)
VAB 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 VAB as of December 31, 1996 and for the periods
indicated herein and of Ohio National Life's consolidated financial statements
as of December 31, 1996 and 1995 and for the periods indicated herein have been
included herein in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing. The report on
the consolidated financial statements of Ohio National Life refers to a change
in accounting and reporting by mutual life insurance enterprises and insurance
enterprises for certain long-duration participating contracts in 1995.
UNDERWRITER
The offering of the contracts is continuous. Prior to _______________, 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 VAB,
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>
1996 $1,691,331 $164,905
---- ---------- --------
1995 821,577 75,503
1994 963,635 110,006
</TABLE>
Since ____________, 1997, Ohio National Equities, Inc., another wholly-owned
subsidiary of Ohio National Life, has been the principal underwriter of the
contracts.
-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, 1996, was 4.72%. 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 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 October 7, 1993. Hypothetical results based upon the
performance of the subaccounts prior to that date assume that the same charges
and deductions applicable to the current contracts were in effect from the
inception of each corresponding portfolio of the Fund. Based on those
assumptions, the average annual total returns for 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, 1996, 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>
Equity 17.29% 12.09% 11.87% 9.46% 10-06-69
Money Market 4.23% 3.20% 4.68% 6.46% 03-20-80
Bond 2.78% 6.17% 6.47% 7.68% 11-02-82
Omni 14.51% 11.07% 9.52% 10.56% 09-10-84
International 13.46% N/A N/A 15.15% 04-30-93
Capital Appreciation 14.72% N/A N/A 14.86% 05-01-94
Small Cap 16.66% N/A N/A 25.96% 05-01-94
Global Contrarian 11.09% N/A N/A 11.02% 03-31-95
Aggressive Growth (0.14%) N/A N/A 14.03% 03-31-95
Core Growth N/A N/A N/A N/A 01-03-97
Growth & Income N/A N/A N/A N/A 01-03-97
S&P 500 Index N/A N/A N/A N/A 01-03-97
Social Awareness N/A N/A N/A N/A 01-03-97
</TABLE>
-3-
<PAGE> 30
TRANSFER LIMITATIONS
To the extent that transfers, surrenders, partial withdrawals and annuity
payments from a subaccount exceed net purchase payments and transfers into that
subaccount, securities of the corresponding portfolio of the Fund may have to be
sold. Excessive sales of a portfolio's securities on short notice could be
detrimental to that portfolio and to contractowners with values allocated to the
corresponding subaccount. To protect the interests of all contractowners, Ohio
National Life reserves the right to limit the number, frequency, method or
amount of transfers. Transfers from any portfolio of the Fund on any one day may
be limited to 1% of the previous day's total net assets of that portfolio if
Ohio National Life or the Fund, in its or their discretion, believes that the
portfolio might otherwise be damaged.
If and when transfers must be so limited, some transfer requests will not be
made. In determining which requests will be made, scheduled transfers (that is,
those pursuant to a pre-existing dollar cost averaging program) will be made
first, followed by mailed written requests in the order postmarked and, lastly,
telephone and facsimile requests in the order received. Contractowners whose
transfer requests are not made will be so notified. Current SEC rules preclude
Ohio National Life from processing at a later date those requests that were not
made. Accordingly, a new transfer request would have to be submitted in order to
make a transfer that was not made because of these limitations.
-4-
<PAGE> 31
OHIO NATIONAL VARIABLE ACCOUNT B
INDEPENDENT AUDITORS' REPORT
The Board of Directors
The Ohio National Life Insurance Company
The Contract Owners
Ohio National Variable Account B
We have audited the accompanying statements of assets and contract owners'
equity of Ohio National Variable Account B as of December 31, 1996, and the
related statements of operations and changes in contract owners' equity and
schedules of changes in unit values for each of the periods indicated herein.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1996, by examination of the
underlying mutual fund. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ohio National Variable Account
B at December 31, 1996, and the results of its operations, changes in contract
owners' equity and changes in unit values for each of the periods indicated
herein, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Cincinnati, Ohio
January 28, 1997
OHIO NATIONAL VARIABLE ACCOUNT B
STATEMENTS OF ASSETS AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MONEY INTER- CAPITAL SMALL
EQUITY MARKET BOND OMNI NATIONAL APPREC. CAP
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets - Investments
at market value
(note 2) $ 41,949,830 $ 3,290,700 $3,622,964 $ 30,345,958 $ 29,922,490 $ 7,614,976 $ 5,877,652
============ =========== ========== ============ ============ =========== ===========
Contract owners'
equity:
Contracts in
accumulation
period (note 3) $ 40,802,320 $ 3,194,070 3,585,409 $ 30,014,242 $29,922,490 $ 7,614,976 $ 5,877,652
Annuity reserves
for contracts in
payment period 1,147,510 96,630 37,555 331,716 0 0 0
------------ ----------- --------- ------------ ----------- ----------- -----------
Total contract
owners' equity $ 41,949,830 $ 3,290,700 $3,622,964 $ 30,345,958 $29,922,490 $7,614,976 $ 5,877,652
============ =========== ========== ============ =========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
GLOBAL AGGRESS.
CONTR. GROWTH
SUBACCOUNT SUBACCOUNT
---------- ----------
<S> <C> <C>
Assets - Investments
at market value
(note 2) $ 2,829,370 $ 1,737,423
=========== ===========
Contract owners'
equity:
Contracts in
accumulation
period (note 3) $ 2,829,370 $1,737,423
Annuity reserves
for contracts in
payment period 0 0
----------- ----------
Total contract
owners' equity $2,829,370 $1,737,423
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 32
OHIO NATIONAL VARIABLE ACCOUNT B
Statements of Operations and Changes in Contract Owners' Equity
For the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Equity Money Market Bond
Subaccount Subaccount Subaccount
1996 1995 1996 1995 1996 1995
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends ............. $ 1,514,050 $ 765,464 $ 121,100 $ 100,339 $ 226,135 $ 143,904
Risk and administrative
expense (note 4) ......... (401,473) (293,247) (5,651) (29,381) (36,260) (29,494)
------------ ------------ ----------- ----------- ------------ ------------
Net investment activity .. 1,112,577 472,217 115,449 70,958 189,875 114,410
------------ ------------ ----------- ----------- ------------ ------------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ...... 552,072 334,966 (4,810) 0 2,900 4,677
Unrealized gain (loss) .... 4,088,878 5,201,091 0 0 (90,712) 328,653
------------ ------------ ----------- ----------- ------------ ------------
Net gain (loss) on
investments ............ 4,640,950 5,536,057 (4,810) 0 (87,812) 333,330
------------ ------------ ----------- ----------- ------------ ------------
Net increase in contract
owners' equity from
operations ............ 5,753,527 6,008,274 110,639 70,958 102,063 447,740
------------ ------------ ----------- ----------- ------------ ------------
Equity transactions:
Sales:
Contract purchase payments. 5,951,661 3,783,192 1,871,868 934,384 1,155,848 764,847
Transfers from fixed and
other subaccounts ........ 1,520,335 1,917,272 687,467 332,192 131,700 164,917
------------ ------------ ----------- ----------- ------------ ------------
7,471,996 5,700,464 2,559,335 1,266,576 1,287,548 929,764
------------ ------------ ----------- ----------- ------------ ------------
Redemptions:
Withdrawals and surrenders. 1,462,881 1,391,091 39,602 173,670 165,387 127,381
Annuity and death benefit
payments ................. 580,928 544,978 7,858 7,251 152,376 11,271
Transfers to fixed and
other subaccounts ........ 923,992 540,461 1,369,352 1,436,196 811,891 341,845
------------ ------------ ----------- ----------- ------------ ------------
2,967,801 2,476,530 1,416,812 1,617,117 1,129,654 480,497
------------ ------------ ----------- ----------- ------------ ------------
Net equity transactions .. 4,504,195 3,223,934 1,142,523 (350,541) 157,894 449,267
------------ ------------ ----------- ----------- ------------ ------------
Net change in contract
owners' equity ........ 10,257,722 9,232,208 1,253,162 (279,583) 259,957 897,007
Contract owners' equity:
Beginning of period ........ 31,692,108 22,459,900 2,037,538 2,317,121 3,363,007 2,466,000
------------ ------------ ----------- ----------- ------------ ------------
End of period .............. $ 41,949,830 $ 31,692,108 $3,290,700 $2,037,538 $3,622,964 $3,363,007
============ ============ ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
Omni International
Subaccount Subaccount
1996 1995 1996 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends ............. $ 1,159,886 $ 567,491 $ 1,315,143 $ 553,908
Risk and administrative
expense (note 4) ......... (280,432) (229,636) (257,125) (166,334)
------------ ------------ ------------ ------------
Net investment activity .. 879,454 337,855 1,058,018 387,574
------------ ------------ ------------ ------------
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss) ...... 257,649 214,074 79,728 92,960
Unrealized gain (loss) .... 2,449,471 3,286,859 1,719,537 1,160,817
------------ ------------ ------------ ------------
Net gain (loss) on
investments ............ 2,707,120 3,500,933 1,799,265 1,253,777
------------ ------------ ------------ ------------
Net increase in contract
owners' equity from
operations ............ 3,586,574 3,838,788 2,857,283 1,641,351
------------ ------------ ------------ ------------
Equity transactions:
Sales:
Contract purchase payments. 4,888,382 2,322,421 8,429,938 3,503,140
Transfers from fixed and
other subaccounts ........ 758,248 630,281 1,863,354 549,988
------------ ------------ ------------ ------------
5,646,630 2,952,702 10,293,292 4,053,128
------------ ------------ ------------ ------------
Redemptions:
Withdrawals and surrenders. 1,071,876 1,190,228 548,297 395,993
Annuity and death benefit
payments ................. 513,108 141,737 61,829 65,426
Transfers to fixed and
other subaccounts ........ 422,833 821,966 495,366 2,329,089
------------ ------------ ------------ ------------
2,007,817 2,153,931 1,105,492 2,790,508
------------ ------------ ------------ ------------
Net equity transactions .. 3,638,813 798,771 9,187,800 1,262,620
------------ ------------ ------------ ------------
Net change in contract
owners' equity ........ 7,225,387 4,637,559 12,045,083 2,903,971
Contract owners' equity:
Beginning of period ........ 23,120,571 18,483,012 17,877,407 14,973,436
------------ ------------ ------------ ------------
End of period .............. $ 30,345,958 $ 23,120,571 $ 29,922,490 $ 17,877,407
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 33
OHIO NATIONAL VARIABLE ACCOUNT B
Statements of Operations and Changes in Contract Owners' Equity
For the Years Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Capital Appreciation Small Cap Global Contrarian
Subaccount Subaccount Subaccount
1996 1995 1996 1995 1996 1995 (a)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment activity:
Reinvested capital gains
and dividends ................ $ 290,109 $ 36,886 $ 72,856 $ 3,942 $ 42,037 $ 447
Risk and administrative
expense (note 4) ............. (54,570) (13,593) (36,692) (10,182) (13,771) (679)
Net investment activity .... 235,539 23,293 36,164 (6,240) 28,266 (232)
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss .......... 30,377 8,474 32,011 26,681 19,118 (105)
Unrealized gain (loss ........ 504,086 194,214 532,154 261,953 76,648 7,563
----------- ----------- ----------- ----------- ----------- -----------
Net gain (loss) on
investments ............... 534,463 202,688 564,165 288,634 95,766 7,458
----------- ----------- ----------- ----------- ----------- -----------
Net increase in contract
owners' equity from
operations ............... 770,002 225,981 600,329 282,394 124,032 7,226
----------- ----------- ----------- ----------- ----------- -----------
Equity transactions:
Sales:
Contract purchase payments ... 3,315,552 2,287,561 2,996,882 1,305,146 2,082,521 349,702
Transfers from fixed and
other subaccounts ........... 751,976 382,531 633,847 146,831 359,416 11,337
----------- ----------- ----------- ----------- ----------- -----------
4,067,528 2,670,092 3,630,729 1,451,977 2,441,937 361,039
----------- ----------- ----------- ----------- ----------- -----------
Redemptions:
Withdrawals and surrenders.... 147,548 1,651 25,917 1,373 3,208 0
Annuity and death benefit
payments .................... 70,615 0 17,894 0 653 0
Transfers to fixed and
other subaccounts ........... 223,703 32,345 463,197 57,038 76,474 24,529
----------- ----------- ----------- ----------- ----------- -----------
441,866 33,996 507,008 58,411 80,335 24,529
----------- ----------- ----------- ----------- ----------- -----------
Net equity transactions ..... 3,625,662 2,636,096 3,123,721 1,393,566 2,361,602 336,510
----------- ----------- ----------- ----------- ----------- -----------
Net change in contract
owners' equity ........... 4,395,664 2,862,077 3,724,050 1,675,960 2,485,634 343,736
Contract owners' equity:
Beginning of period ........... 3,219,312 357,235 2,153,602 477,642 343,736 0
--------- ------- --------- ------- ------- -----------
End of period ................. $7,614,976 $3,219,312 $5,877,652 $2,153,602 $2,829,370 $343,736
========== ========== ========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Aggressive Growth
Subaccount
1996 1995 (a)
------------------------
<S> <C> <C>
Investment activity:
Reinvested capital gains
and dividends ................ $ 206,544 $ 11,649
Risk and administrative
expense (note 4) ............. (12,377) (386)
Net investment activity..... 194,167 11,263
Realized and Unrealized gain
(loss) on investments:
Realized gain (loss .......... (18,436) 193
Unrealized gain (loss ........ (147,209) 19,014
----------- ---------
Net gain (loss) on
investments ............... (165,645) 19,207
----------- ---------
Net increase in contract
owners' equity from
operations ............... 28,522 30,470
----------- ---------
Equity transactions:
Sales:
Contract purchase payments ... 1,164,982 499,326
Transfers from fixed and
other subaccounts ........... 261,060 65,472
----------- ---------
1,426,042 564,798
----------- ---------
Redemptions:
Withdrawals and surrenders.... 2,702 910
Annuity and death benefit
payments .................... 5,982 0
Transfers to fixed and
other subaccounts ........... 300,897 1,918
----------- ---------
309,581 2,828
----------- ---------
Net equity transactions ..... 1,116,461 561,970
----------- ---------
Net change in contract
owners' equity ........... 1,144,983 592,440
Contract owners' equity:
Beginning of period ........... 592,440 0
------- --------
End of period ................. $1,737,423 $592,440
========== ========
</TABLE>
(a) Period from March 31, 1995, date of commencement of operations.
The accompanying notes are an integral part of these financial statements.
<PAGE> 34
OHIO NATIONAL VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Ohio National Variable Account B (the Account) is a separate account of
The Ohio National Life Insurance Company (ONLIC) and all obligations
arising under variable annuity contracts are general corporate
obligations of ONLIC. The account has been registered as a unit
investment trust under the Investment Company Act of 1940.
Assets of the Account are invested in shares of Ohio National Fund,
Inc. (the Fund), a diversified open-end management investment company.
The Fund's investments are subject to varying degrees of market,
interest and financial risks; the issuers' abilities to meet certain
obligations may be affected by economic developments in their
respective industries.
Annuity reserves are computed for currently payable contracts according
to the Progressive Annuity Mortality Table. The assumed interest rate
is 3.5 or 4.0 percent depending on the contract selected by the
annuitant. Charges to annuity reserves for adverse mortality and
expense risk experience are reimbursed to the Account by ONLIC. Such
amounts are included in risk and administrative expense.
Investments are valued at the net asset value of fund shares held at
December 31, 1996. Share transactions are recorded on the trade date.
Income and capital gain distributions are recorded on the ex-dividend
date. Net realized capital gain or loss is determined on the basis of
average cost.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(2) INVESTMENTS
At December 31, 1996 the aggregate cost and number of shares of Ohio
National Fund, Inc. owned by the respective subaccounts were:
<TABLE>
<CAPTION>
MONEY INTER- CAPITAL SMALL GLOBAL
EQUITY MARKET BOND OMNI NATIONAL APPREC. CAP CONTR.
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Aggregate Cost $ 30,168,411 $ 3,290,700 $ 3,558,065 $ 23,690,877 $ 26,614,406 $ 6,919,904 $ 5,071,744 $ 2,745,159
Number of shares 1,298,797 329,070 341,017 1,564,386 1,931,355 588,984 326,047 242,677
</TABLE>
<TABLE>
<CAPTION>
AGGRESS.
GROWTH
SUBACCOUNT
----------
<S> <C>
Aggregate Cost $1,865,618
Number of shares 173,188
</TABLE>
(3)
CONTRACTS IN ACCUMULATION PERIOD
At December 31, 1996 the accumulation units and value per unit
of the respective subaccounts and products were:
<TABLE>
<CAPTION>
ACCUMULATION UNITS VALUE PER UNIT
------------------ --------------
<S> <C> <C>
EQUITY SUBACCOUNT
Combination ............................. 22,848.676 $120.477605
Back Load ............................... 1,109.090 61.577580
Top I ................................... 22,720.288 53.439888
Top II .................................. 680,118.205 45.092323
Top Plus ................................ 405,466.475 15.042658
MONEY MARKET SUBACCOUNT
VIA ..................................... 28,910.361 26.200345
Top I ................................... 6,004.445 19.867953
Top II .................................. 83,493.922 17.734674
Top Plus ................................ 74,056.162 11.296489
BOND SUBACCOUNT
Top I ................................... 3,121.643 27.749128
Top II .................................. 100,641.550 23.238374
Top Plus ................................ 101,403.486 11.439849
OMNI SUBACCOUNT
Top I ................................... 53,262.846 33.556721
Top II .................................. 703,470.062 33.345205
Top Plus ................................ 342,379.008 13.930650
</TABLE>
<PAGE> 35
OHIO NATIONAL VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
<TABLE>
<CAPTION>
INTERNATIONAL SUBACCOUNT ACCUMULATION UNITS VALUE PER UNIT
- ------------------------ ------------------ --------------
<S> <C> <C>
Top I 18,084.575 16.648702
Top II 1,186,643.213 16.648702
Top Plus 674,402.979 14.628252
CAPITAL APPRECIATION SUBACCOUNT
Top I 785.598 13.018249
Top II 312,799.343 13.018249
Top Plus 243,883.463 14.484990
SMALL CAP SUBACCOUNT
Top II 147,556.638 14.205207
Top Plus 204,016.779 18.535631
GLOBAL CONTRARIAN SUBACCOUNT
Top II 60,595.878 11.226306
Top Plus 178,856.151 12.015818
AGGRESSIVE GROWTH SUBACCOUNT
Top II 68,714.736 10.463801
Top Plus 80,874.706 12.592390
</TABLE>
(4) RISK AND ADMINISTRATIVE EXPENSE
ONLIC charges the Account's assets at the end of each valuation period,
equal to 0.25% on an annual basis, of the contract value for
administrative expenses, based on premiums established at the time the
contracts are issued.
Although variable annuity payments differ according to the investment
performance of the Accounts, they are not affected by mortality or
expense experience because ONLIC assumes the expense risk and the
mortality risk under the contracts. ONLIC charges the Accounts' assets
for assuming those risks, based on the contract value at a rate
presently ranging from 0.65% to 1.05% for mortality and expense risk on
an annual basis.
The expense risk assumed by ONLIC is the risk that the deductions for
sales and administrative expenses provided for in the variable annuity
contract may prove insufficient to cover the cost of those terms.
The mortality risk results from a provision in the contract in which
ONLIC agrees to make annuity payments regardless of how long a
particular annuitant or other payee lives and how long all annuitants
or other payees as a class live if payment options involving life
contingencies are chosen. Those annuity payments are determined in
accordance with annuity purchase rate provisions established at the
time the contracts are issued.
(5) CONTRACT CHARGES
No deduction for a sales charge is made from purchase payments. A
contingent deferred sales charge ranging from 0% to 6% may be assessed
by ONLIC when a contract is surrendered or a partial withdrawal of
accumulation value is made before the annuity payout date.
A transfer fee is charged for each transfer from one subaccount to
another. The fee is charged against the contract owner's equity in the
subaccount from which the transfer is effected.
State premium taxes presently range from 0% to 2 1/2% for these
contracts. In those jurisdictions permitting, such taxes will be
deducted when annuity payments begin. Elsewhere, they will be deducted
from purchase payments.
(6) FEDERAL INCOME TAXES
Operations of the Account form a part of, and are taxed with,
operations of ONLIC which is taxed as a life insurance company under
the Internal Revenue Code. Taxes are the responsibility of the contract
owner upon termination or withdrawal. No Federal income taxes are
payable under present law on dividend income or capital gains
distribution from the Fund shares held in the Account or on capital
gains realized by the Account on redemption of the Fund shares.
<PAGE> 36
OHIO NATIONAL VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
(7) NOTE TO SCHEDULE 1
Schedule 1 presents the components of the change in the unit values,
which are the basis for determining contract owners' equity. This
schedule is presented for each series, as applicable, in the following
format:
- Beginning unit value
- Reinvested capital gains and dividends (This amount reflects the
increase in the unit value due to capital gain and dividend
distributions from the underlying mutual fund.)
- Unrealized gain (loss) (This amount reflects the increase
(decrease) in the unit value resulting from the market
appreciation (depreciation) of the fund.)
- Expenses (This amount reflects the decrease in the unit value due
to Risk and Administrative Expenses discussed in note 4 to the
financial statements.)
- Ending unit value
- Percentage increase (decrease) in unit value.
<PAGE> 37
For the Years Ended December 31, 1996 and 1995
Schedule 1
OHIO NATIONAL VARIABLE ACCOUNT B
Schedules of Changes In Unit Values
<TABLE>
<CAPTION>
Equity Subaccount B
1996 Combination Back Load Top I Top II Top Plus
<S> <C> <C> <C> <C> <C>
Beginning unit value...................... 102.816617 52.603280 45.651565 38.520577 12.824740
Reinvested capital gains and dividends.... 4.730442 2.472551 2.098892 1.774973 0.594240
Realized and unrealized gain.............. 14.044744 7.129052 6.332974 5.256615 1.749688
Expenses.................................. -1.114198 -0.627303 -0.643543 -0.459842 -0.126010
Ending unit value......................... 120.477605 61.577580 53.439888 45.092323 15.042658
Percentage increase in unit value*........ 17.2% 17.1% 17.1% 17.1% 17.3%
<CAPTION>
1995 Combination Back Load Top I Top II Top Plus
<S> <C> <C> <C> <C> <C>
Beginning unit value...................... 81.637986 41.809023 36.283811 30.616106 10.173015
Reinvested capital gains and dividends.... 2.742090 1.396517 1.205043 1.030439 0.348156
Realized and unrealized gain.............. 19.371159 9.915634 8.696663 7.260302 2.410290
Expenses.................................. -0.934618 -0.517894 -0.533952 -0.386270 -0.106721
Ending unit value......................... 102.816617 52.603280 45.651565 38.520577 12.824740
Percentage increase in unit value*........ 25.9% 25.8% 25.8% 25.8% 26.1%
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
<CAPTION>
Money Market Subaccount B
1996 VIA Top I Top II Top Plus
<S> <C> <C> <C> <C>
Beginning unit value...................... 25.237165 19.137562 17.048698 10.837896
Reinvested dividends...................... 1.297471 1.022907 0.877627 0.558622
Expenses.................................. -0.334291 -0.292516 -0.191651 -0.100029
Ending unit value......................... 26.200345 19.867953 17.734674 11.296489
Percentage increase in unit value*........ 3.8% 3.8% 4.0% 4.2%
<CAPTION>
1995 VIA Top I Top II Top Plus
<S> <C> <C> <C> <C>
Beginning unit value...................... 24.205890 18.355539 16.319825 10.354108
Reinvested dividends...................... 1.352642 1.062689 0.912513 0.579004
Expenses.................................. -0.321367 -0.280666 -0.183640 -0.095216
Ending unit value......................... 25.237165 19.137562 17.048698 10.837896
Percentage increase in unit value*........ 4.3% 4.3% 4.5% 4.7%
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
<CAPTION>
Bond Subaccount B
1996 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 27.051775 22.654830 11.130129
Reinvested capital gains and dividends.... 1.733738 1.569071 0.714445
Realized and unrealized loss.............. -0.686463 -0.717650 -0.304915
Expenses.................................. -0.349922 -0.267877 -0.099810
Ending unit value......................... 27.749128 23.238374 11.439849
Percentage increase in unit value*........ 2.6% 2.6% 2.8%
<CAPTION>
1995 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 23.002903 19.263675 9.445623
Reinvested capital gains and dividends.... 1.312460 1.100484 0.541348
Realized and unrealized gain.............. 3.063398 2.522822 1.236580
Expenses.................................. -0.326986 -0.232151 -0.093422
Ending unit value......................... 27.051775 22.654830 11.130129
Percentage increase in unit value*........ 17.6% 17.6% 17.8%
</TABLE>
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
(continued)
<PAGE> 38
OHIO NATIONAL VARIABLE ACCOUNT B
Schedules of Changes In Unit Values
For the Years Ended December 31, 1996 and 1995
Schedule 1 (Continued)
<TABLE>
<CAPTION>
Omni Subaccount B
1996 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 29.362718 29.177631 12.165280
Reinvested capital gains and dividends.... 1.374026 1.365954 0.572930
Realized and unrealized gain.............. 3.226767 3.143948 1.309928
Expenses.................................. -0.406790 -0.342328 -0.117488
Ending unit value......................... 33.556721 33.345205 13.930650
Percentage increase in unit value*........ 14.3% 14.3% 14.5%
<CAPTION>
1995 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 24.183329 24.030898 9.999661
Reinvested capital gains and dividends.... 0.768417 0.762912 0.321491
Realized and unrealized gain.............. 4.761955 4.678786 1.945772
Expenses.................................. -0.350983 -0.294965 -0.101644
Ending unit value......................... 29.362718 29.177631 12.165280
Percentage increase in unit value*........ 21.4% 21.4% 21.7%
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
<CAPTION>
International Subaccount B
1996 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 14.702847 14.702847 12.892796
Reinvested capital gains and dividends.... 0.851068 0.851804 0.751086
Realized and unrealized gain.............. 1.301686 1.269443 1.110911
Expenses.................................. -0.206899 -0.175392 -0.126541
Ending unit value......................... 16.648702 16.648702 14.628252
Percentage increase in unit value*........ 13.2% 13.2% 13.5%
<CAPTION>
1995 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 13.259582 13.259582 11.604279
Reinvested capital gains and dividends.... 0.486534 0.485230 0.427074
Realized and unrealized gain.............. 1.137778 1.110834 0.971406
Expenses.................................. -0.181047 -0.152799 -0.109963
Ending unit value......................... 14.702847 14.702847 12.892796
Percentage increase in unit value*........ 10.9% 10.9% 11.1%
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
<CAPTION>
Capital Appreciation Subaccount B
1996 Top I Top II Top Plus
<S> <C> <C> <C>
Beginning unit value...................... 11.370573 11.370573 12.626458
Reinvested capital gains and dividends.... 0.636859 0.651286 0.721507
Realized and unrealized gain.............. 1.169741 1.130864 1.258902
Expenses.................................. -0.158924 -0.134474 -0.121877
Ending unit value......................... 13.018249 13.018249 14.484990
Percentage increase in unit value*........ 14.5% 14.5% 14.7%
1995 Top I Top II Top Plus
Beginning unit value...................... 10.000000 ** 10.000000 ** 10.390128
Reinvested capital gains and dividends.... 0.232825 0.238549 0.257166
Realized and unrealized gain.............. 1.281303 1.253494 2.086288
Expenses.................................. -0.143555 -0.121470 -0.107124
Ending unit value......................... 11.370573 11.370573 12.626458
Percentage increase in unit value*........ 13.7% 13.7% 21.5%
</TABLE>
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
** Period from March 31, 1995, date of commencement of operations.
(continued)
<PAGE> 39
For the Years Ended December 31, 1996 and 1995
OHIO NATIONAL VARIABLE ACCOUNT B
Schedules of Changes In Unit Values Schedule 1 (Continued)
Small Cap Subaccount B
<TABLE>
<CAPTION>
1996 Top II Top Plus
<S> <C> <C>
Beginning unit value...................... 12.201273 15.889068
Reinvested capital gains and dividends.... 0.250703 0.322062
Realized and unrealized gain.............. 1.901925 2.480816
Expenses.................................. -0.148694 -0.156315
Ending unit value......................... 14.205207 18.535631
Percentage increase in unit value*........ 16.4% 16.7%
1995 Top II Top Plus
Beginning unit value...................... 10.000000 ** 12.053440
Reinvested capital gains and dividends.... 0.038545 0.046338
Realized and unrealized gain.............. 2.296433 3.920914
Expenses.................................. -0.133705 -0.131624
Ending unit value......................... 12.201273 15.889068
Percentage increase in unit value*........ 22.0% 31.8%
* An annualized rate of return cannot be determined as expenses do
not include the contract charges discussed in note (5).
** Period from March 31, 1995, date of commencement of operations.
<CAPTION>
Global Contrarian Subaccount B
1996 Top II Top Plus
<S> <C> <C>
Beginning unit value...................... 10.125502 10.816003
Reinvested capital gains and dividends.... 0.306810 0.328881
Realized and unrealized gain.............. 0.914409 0.976558
Expenses.................................. -0.120415 -0.105624
Ending unit value......................... 11.226306 12.015818
Percentage increase in unit value*........ 10.9% 11.1%
1995 Top II Top Plus
Beginning unit value...................... 10.000000 *** 10.000000 **
Reinvested capital gains and dividends.... 0.025913 0.027475
Realized and unrealized gain.............. 0.209827 0.884367
Expenses.................................. -0.110238 -0.095839
Ending unit value......................... 10.125502 10.816003
Percentage increase in unit value*........ 1.3% 8.2%
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
** Period from March 31, 1995, date of commencement of operations.
*** Period from October 2, 1995, date of commencement of operations.
<CAPTION>
Aggressive Growth Subaccount B
1996 Top II Top Plus
<S> <C> <C>
Beginning unit value...................... 10.499375 12.610012
Reinvested capital gains and dividends.... 1.647013 1.986612
Realized and unrealized loss.............. -1.570429 -1.893528
Expenses.................................. -0.112158 -0.110706
Ending unit value......................... 10.463801 12.592390
Percentage decrease in unit value*........ -0.3% -0.1%
<CAPTION>
1995 Top II Top Plus
<S> <C> <C>
Beginning unit value...................... 10.000000 *** 10.000000 **
Reinvested capital gains and dividends.... 0.490558 0.569631
Realized and unrealized gain.............. 0.124172 2.149950
Expenses.................................. -0.115355 -0.109569
Ending unit value......................... 10.499375 12.610012
Percentage increase in unit value*........ 5.0% 26.1%
</TABLE>
* An annualized rate of return cannot be determined as expenses do not include
the contract charges discussed in note (5).
** Period from March 31, 1995, date of commencement of operations.
*** Period from October 2, 1995, date of commencement of operations. See
accompanying notes to the financial statements.
<PAGE> 40
APPENDIX
GUARANTEED ACCUMULATION ACCOUNT
The Guaranteed Accumulation Account guarantees a fixed return for a specified
period of time and guarantees the principal against loss. Any portion of a
contract relating to the Guaranteed Accumulation Account is not registered under
the Securities Act of 1933. The Guaranteed Accumulation Account is not
registered as an investment company under the 1940 Act. Accordingly, neither the
Guaranteed Accumulation Account nor any interests in it are subject to the
provisions or restrictions of either such Act, and the disclosures in this
appendix have not been reviewed by the staff of the Securities and Exchange
Commission.
The Guaranteed Accumulation Account consists of all of Ohio National Life's
general assets other than those allocated to a separate account. Accumulation
values under a contract will be allocated between the Guaranteed Accumulation
Account and VAB. The allocation will be as elected by the owner at the time of
purchase or as subsequently changed.
Ohio National Life will invest its general assets in its discretion as allowed
by applicable state law. Investment income from Ohio National Life's general
assets will be allocated to those contracts having guaranteed accumulation
values in accordance with the terms of such contracts.
The amount of investment income allocated to the contracts will vary from year
to year in Ohio National Life's sole discretion. However, Ohio National Life
guarantees that it will credit interest at a rate of not less than 3% per year,
compounded annually, to contract values allocated to the Guaranteed Accumulation
Account. Ohio National Life may credit interest at a rate in excess of 3%, but
any such excess interest credit will be in Ohio National Life's sole discretion.
Ohio National Life guarantees that the guaranteed accumulation value of a
contract will never be less that (a) the amount of purchase payments allocated
to, and transfers into, the Guaranteed Accumulation Account, plus (b) interest
credited at the rate of 3% per year compounded annually, plus (c) any additional
excess interest Ohio National Life may credit to guaranteed accumulation values,
and less (d) any partial withdrawals and transfers from the guaranteed
accumulation values, and less (e) any contingent deferred sales charges on
partial withdrawals, state premium taxes and transfer fees. No deductions are
made from the Guaranteed Accumulation Account for administrative expenses or
risk undertakings. (See "Deductions and Expenses" in the prospectus.)
Not more than 20% of the guaranteed accumulation value of a contract (or $1,000,
if greater), as of the beginning of any contract year, may be transferred to one
or more variable subaccounts during that contract year. As provided by
applicable state law, Ohio National Life reserves the right to defer the payment
of amounts withdrawn from the Guaranteed Accumulation Account for a period not
to exceed six months from the date written request for such withdrawal is
received by Ohio National Life.
-47-
<PAGE> 41
OHIO NATIONAL VARIABLE ACCOUNT B
Form N-4
PART C
OTHER INFORMATION
<PAGE> 42
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Registrant are included in Part B of
this Registration Statement:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January 28,
1997
Statements of Assets and Contract Owners' Equity dated December 31,
1996
Statement of Operations and Changes in Contract Owners' Equity for the
Years Ended December 31, 1996 and 1995
Notes to Financial Statements dated December 31, 1996
Schedules of Changes in Unit Values for the Years Ended December 31,
1996 and 1995
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 subsequent Post-effective Amendment hereto:
Independent Auditors' Report of KPMG Peat Marwick LLP dated January 31,
1997
Consolidated Balance Sheets dated December 31, 1996 and 1995
Consolidated Statements of Income for the Years Ended December 31,
1996, 1995 and 1994
Consolidated Statements of Equity for the Years Ended December 31,
1996, 1995 and 1994
Consolidated Statements of Cash Flows for the Years Ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements dated December 31, 1996,
1995 and 1994
The following financial information is included in Part A of this Registration
Statement:
Accumulation Unit Values
Consents of the Following Persons:
KPMG Peat Marwick LLP
Exhibits:
(13) Computation of Performance Data
All other relevant exhibits, which have previously been filed with the
Commission and are incorporated herein by reference, are as follows:
(1) 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. 2-78653).
(2) Agreement of Custodianship between the Depositor and The
Provident Bank was filed as Exhibit 3 of the Registrant's Form
N-4, Post-effective Amendment no. 5 on April 27, 1988 (File
no. 2-91214).
(3)(a) Distribution Agreement between the Depositor and The O.N.
Equity Sales Company was filed as Exhibit A(3)(a) of the
Registrant's registration statement on Form S-6 on October 25,
1982 (File no. 2-78653).
-1-
<PAGE> 43
(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. 2-91214).
(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. 2-91214).
(4) Combination Annuity Contract, Form 93-VB-1, was filed as
Exhibit (4) of the Registrant's Form N-4 on May 6, 1993 (File
No. 33-62284).
(5)(a) Single Purchase Payment Variable Annuity Application, Form
V-4891-B, was filed as Exhibit (5)(a) of the Registrant's Form
N-4 on April 25, 1996 (File No. 33-62284).
(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. 4 on March 27, 1995.
-2-
<PAGE> 44
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Trudy K. Backus* Vice President, Individual Insurance Services
Howard C. Becker* Senior Vice President, Individual Insurance & Corporate Services
Paul L. Bergmann* Vice President, Financial Control (Treasurer)
Michael A. Boedeker* Vice President, Fixed Income Securities
Tom D. Bowman* Sales Vice President, Pensions
Joseph P. Brom* Senior Vice President & Chief Investment Officer
Dale P. Brown Director
36 East Seventh Street
Cincinnati, Ohio 45202
Jack E. Brown Director
50 E. Rivercenter Blvd.
Covington, Kentucky 41011
William R. Burleigh Director
One West Fourth Street
Suite 1100
Cincinnati, Ohio 45202
Victoria B. Buyniski Director
2343 Auburn Avenue
Cincinnati, Ohio 45219
Raymond R. Clark Director
201 East Fourth Street
Cincinnati, Ohio 45202
David W. Cook* Senior Vice President and Actuary
Dr. Alvin H. Crawford Director
Children's Hospital Medical Center
Department of Orthopedics
Elland and Bethesda Avenues
Cincinnati, Ohio 45229
Robert M. DiTommaso* Vice President, Career Marketing
Ronald J. Dolan* Senior Vice President and Chief Financial Officer
Michael J. Ferry* Information Systems Vice President
Michael F. Haverkamp* Vice President and Counsel
John A. Houser III* Vice President, Claims
</TABLE>
-3-
<PAGE> 45
<TABLE>
<CAPTION>
Name and Principal Positions and Offices
Business Address with Depositor
- ---------------- --------------
<S> <C>
Bannus B. Hudson Director
One Eastwood Drive
Cincinnati, Ohio 45227
Daniel W. LeBlond Director
7680 Innovation Way
Mason, Ohio 45040
David G. McClure* Vice President, Variable Product Sales
Hamilton F. McGregor* Senior Vice President, Group & Pension Operations
Charles S. Mechem, Jr. Director
One East Fourth Street
Cincinnati, Ohio 45202
James I. Miller II* Vice President, Marketing Support
James W. Nethercott Director
8431 Concord Hills Circle
Cincinnati, Ohio 45243
Thomas O. Olson* Vice President, Underwriting
David B. O'Maley* Director, Chairman, President and Chief Executive Officer
George B. Pearson, Jr.* Vice President, PGA Marketing
Dallas L. Pennington* Vice President, Information Systems
J. Donald Richardson* Senior Regional Vice President
D. Gates Smith* Senior Vice President, Sales
Michael D. Stohler* Vice President, Mortgages and Real Estate
Stuart G. Summers* Senior Vice President and General Counsel
Oliver W. Waddell Director
425 Walnut Street
Cincinnati, Ohio 45202
Bradley L. Warnemunde Director and Chairman Emeritus
250 William Howard Taft Road
Cincinnati, Ohio 45219
Dr. David S. Williams* Vice President and Medical Director
Donald J. Zimmerman* Director, Senior Vice President, Insurance Operations
and Secretary
</TABLE>
*The principal business address for these individuals is One Financial Way,
Cincinnati, Ohio 45242.
-4-
<PAGE> 46
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI
A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO
- --------------------------------------------------------------------------------
| |
| |
| |
| |
| |
| |
- ------------------------------- -----------------------------
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. D. Zimmerman
Secy. & Dir. T. Tews V.P./COO/Dir. D. McClure
Treas. & Dir. P. Bergmann V.P. & Dir. T. Backus
Director T. Bowman
Secy. R. Benedict
Treas. K. Jaeger
Comp. Officer A. Starkey
- ------------------------------- --------------------------------
<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. V.P./Secy./Dir. D. Zimmerman
Pres. & Dir. D. Zimmerman | Sr. V.P. & Dir. J. Brom
V.P. & Dir. M. Boedeker | Sr. V.P. & Dir. N. Dolan
V.P./COO/Dir. D. McClure | Sr. V.P. & Dir. S. Summers
V.P. & Dir. D. McClure | Sr. Vice Pres. D. Cook
V.P. & Dir. J. Miller | Sr. Vice Pres. G. Smith
V.P. & Dir. S. Williams | Vice Pres. P. Bergmann
Secy. & Dir. R. Benedict | Vice Pres. M. Boedeker
Treas. D. Taney | Vice Pres. R. DiTommaso
Vice Pres. R. DiTammaso | Vice Pres. J. Mettey
Secy. R. Benedict Vice Pres. T. MacDonald | Vice Pres. G. Pearson
Treasurer K. Jaeger | Vice Pres. D. Pennington
Comp. Dir. A. Starkey | Vice Pres. M. Stohler
| 2nd Vice Pres. J. Houser
| Asst. Secy. R. Benedict
| Asst. Secy. T. Tews
| Asst. Actuary K. Flischel
- ------------------------------- ------------------------------ | ------------------------------------
| | SEPARATE ACCOUNT
| | ------------------------------------
| | R
| | ---
<= Advisor to | Advisor to => |
-------------------------------------------------------- |
| | |
- ----------------------------- -------------------------------- | | --------------------------------
ONE FUND, INC. O.N. INVESTMENT MANAGEMENT CO. | | OHIO NATIONAL FUND
| |
A MARYLAND CORPORATION AN OHIO CORPORATION | | A MARYLAND CORPORATION
AN OPEN END DIVERSIFIED A FINANCIAL ADVISORY SERVICE | | AN OPEN END DIVERSIFIED
MANAGEMENT INVESTMENT COMPANY CAPITALIZED BY ONESCO @ $145,000 | | MANAGEMENT INVESTMENT COMPANY
- ----------------------------- -------------------------------- | | --------------------------------
Pres. & Dir. D. Zimmerman Pres. & Dir. J. Brom | | Pres. & Dir. D. Zimmerman
Vice Pres. M. Boedeker | ----- Vice Pres. M. Boedeker
Vice Pres. J. Brom VP & Dir. M. Boedeker | Vice Pres. J. Brom
Vice Pres. D. McClure | Vice Pres. S. Williams
Vice Pres. S. Williams VP & Dir. D. McClure | Treas. D. Taney
Treas. D. Taney -------- Secy. & Dir. R. Benedict
Secy. & Dir. R. Benedict VP & Dir. S. Willams
Asst. Secy. A. Starkey Dir. G. Castrucci
Treas. D. Taney Dir. M. Kirby
Dir. G. Castrucci Dir. G. Vredeveld
Dir. M. Kirby Sec. R. Benedict
Dir. G. Vredeveld
- --------------------------------- -------------------------------- ---------------------------------
</TABLE>
<PAGE> 47
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 February 20, 1997, the Registrant's contracts were owned by 7,846 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> 48
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. ("ONE, Inc."). ONE, Inc. is a wholly-owned
subsidiary of the Depositor. ONE, Inc. also serves as the principal
underwriter of securities issued by Ohio National Variable Accounts A
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> 49
The directors and officers of ONE, Inc. are:
<TABLE>
<CAPTION>
Name Position with ONE, Inc.
<S> <C>
David B. O'Maley Chairman and Director
Donald J. Zimmerman President and Director
David G. McClure Vice President, Chief Operating Officer and Director
Trudy K. Backus Vice President and Director
Joni L. Dunn Vice President and Compliance Officer
Timothy S. Halevan Vice President
Ronald L. Benedict Secretary
Kenneth M. Jaeger Treasurer
</TABLE>
Until ____________________, 1997, the principal underwriter of the Registrant's
securities was The O.N. Equity Sales Company ("ONESCO"), another wholly-owned
subsidiary of the Depositor. The directors and officers of ONESCO are:
<TABLE>
<CAPTION>
Name Positions with ONESCO
<S> <C>
David B. O'Maley Chairman and Director
Donald J. Zimmerman President and Director
David G. McClure Vice President, Chief Operating Officer and Director
James I. Miller II Vice President and Director
Ronald L. Benedict Secretary and Director
Robert M. DiTommaso Vice President
Joni L. Dunn Vice President and Compliance Officer
Timothy S. Halevan Vice President
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, ONESCO received the following commissions and other
compensation, directly or indirectly, from the Registrant:
<TABLE>
<CAPTION>
Net Underwriting Compensation
Discounts and on Redemption Brokerage
Commissions or Annuitization Commissions Compensation
- ----------- ---------------- ----------- ------------
<S> <C> <C> <C>
$1,691,331 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> 50
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 3L. 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
-8-
<PAGE> 51
Life 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> 52
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the registrant, Ohio National Variable Account B has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Cincinnati and the State of Ohio on this 27th day of
February, 1997.
OHIO NATIONAL VARIABLE ACCOUNT B
(Registrant)
By THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/ Donald J. Zimmerman
-------------------------------------------
Donald J. Zimmerman, Senior Vice President,
Insurance Operations
Attest:
/s/ Ronald L. Benedict
_________________________________
Ronald L. Benedict
Second Vice President and Counsel
and Assistant Secretary
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the depositor, The Ohio National Life Insurance Company, has caused this
post-effective amendment to the registration statement to be signed on its
behalf in the City of Cincinnati and the State of Ohio on the 27th day of
February, 1997.
THE OHIO NATIONAL LIFE INSURANCE COMPANY
(Depositor)
By /s/ Donald J. Zimmerman
_______________________________________________
Donald J. Zimmerman, Senior Vice President,
Insurance Operations
Attest:
/s/ Ronald L. Benedict
- ----------------------
Ronald L. Benedict
Second Vice President and Counsel
and Assistant Secretary
<PAGE> 53
As required by the Securities Act of 1933, this post-effective amendment to
theregistration 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, February 27, 1997
--------------------- Chief Executive Officer
David B. O'Maley and Director
*/s/Dale P. Brown Director February 27, 1997
---------------------
Dale P. Brown
*/s/Jack E. Brown Director February 27, 1997
---------------------
Jack E. Brown
*/s/William R. Burleigh Director February 27, 1997
---------------------
William R. Burleigh
*/s/Victoria B. Buyniski Director February 27, 1997
----------------------
Victoria B. Buyniski
*/s/Raymond R. Clark Director February 27, 1997
----------------------
Raymond R. Clark
*/s/Alvin H. Crawford Director February 27, 1997
----------------------
Alvin H. Crawford
*/s/Bannus B. Hudson Director February 27, 1997
----------------------
Bannus B. Hudson
*/s/Daniel W. LeBlond Director February 27, 1997
----------------------
Daniel W. LeBlond
*/s/Charles S. Mechem, Jr. Director February 27, 1997
----------------------
Charles S. Mechem, Jr.
*/s/James W. Nethercott Director February 27, 1997
----------------------
James W. Nethercott
*/s/Oliver W. Waddell Director February 27, 1997
----------------------
Oliver W. Waddell
</TABLE>
<PAGE> 54
<TABLE>
<S> <C> <C>
*/s/Bradley L. Warnemunde Chairman Emeritus and February 27, 1997
- ------------------------
Bradley L. Warnemunde Director
/s/Donald J. Zimmerman Senior Vice President, February 27, 1997
- -------------------------
Donald J. Zimmerman Insurance Operations &
Secretary and Director
</TABLE>
*By /s/Donald J. Zimmerman
- -------------------------
Donald J. Zimmerman, Attorney in Fact pursuant to Powers of Attorney, copies
of which have previously been filed as exhibits to the Registrant's
registration statement.
<PAGE> 55
INDEX OF CONSENTS AND EXHIBITS
<TABLE>
<CAPTION>
Page Number in
Exhibit Sequential
Number Description Numbering System
- ------ ----------- ----------------
<C> <C>
Consent of KPMG Peat Marwick LLP
(13) Computation of Performance Data
</TABLE>
<PAGE> 56
CONSENTS
<PAGE> 57
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Ohio National Life Insurance Company:
We consent to the inclusion of our report included herein on the financial
statements of Ohio National Variable Account B as of December 31, 1996 and for
the periods indicated and to the reference to our firm under the heading
"Independent Certified Public Accountants" in the Statement of Additional
Information.
KPMG Peat Marwick LLP
Cincinnati, Ohio
February 27, 1997
<PAGE> 58
EXHIBITS
<PAGE> 1
EXHIBIT (13)
COMPUTATION OF PERFORMANCE DATA
<PAGE> 2
Annual Report Calculations
Equity
<TABLE>
<CAPTION>
Fund
Top Top Top Retirement Fund Fund
Year ROR Value Combined Top Plus Explorer Spectrum Advantage Cumulative Annualize
---- --- ----- -------- -------- -------- -------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/68 10.000000 9.12% 9.46% 8.90% 8.80% 8.98% 1518.60% 10.45%
12/31/69 1.0090 10.090000
12/31/70 1.0763 10.859867
12/31/71 1.0766 11.691733
12/31/72 1.1340 13.258425
12/31/73 0.8989 11.917998
12/31/74 0.8047 9.590413
12/31/75 1.1985 11.494110
12/31/76 1.1680 13.425121
12/31/77 0.9116 12.238340
12/31/78 1.0726 13.126844
12/31/79 1.1587 15.210074
12/31/80 1.4147 21.517691
12/31/81 0.9707 20.887223
12/31/82 1.2874 26.890211
12/31/83 1.1849 31.862211
12/31/84 0.9912 31.581823
12/31/85 1.2369 39.063557
12/31/86 1.2331 48.169272 11.51% 11.87% 11.30% 11.19% 11.37% 236.02% 12.89%
12/31/87 1.1082 53.381187
12/31/88 1.1503 61.404380
12/31/89 1.2321 75.656336
12/31/90 0.9614 72.736002
12/31/91 1.2018 87.414127 11.74% 12.09% 11.52% 11.41% 11.59% 85.16% 13.11%
12/31/92 1.0754 94.005152
12/31/93 1.1409 107.250478
12/31/94 1.0025 107.518604
12/31/95 1.2720 136.763665 16.92% 17.29% 16.69% 16.58% 16.77% 18.35% 18.35%
12/31/96 1.1835 161.859797
</TABLE>
<PAGE> 3
Money Market
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
========= ======= ========== =========== ========== ========= ========= ========== ========== ===========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7/31/80 10.000000 6.12% 6.46% 5.91% 5.81% 5.98% 223.97% 7.42%
12/31/80 1.0483 10.483000
12/31/81 1.1625 12.186488
12/31/82 1.1227 13.681770
12/31/83 1.0861 14.859770
12/31/84 1.1011 16.362093
12/31/85 1.0775 17.630155
12/31/86 1.0630 18.740855 4.35% 4.68% 4.14% 4.04% 4.21% 72.87% 5.62%
12/31/87 1.0628 19.917780
12/31/88 1.0713 21.337918
12/31/89 1.0889 23.234859
12/31/90 1.0789 25.068089
12/31/91 1.0554 26.456861 2.87% 3.20% 2.68% 2.57% 2.75% 22.45% 4.13%
12/31/92 1.0317 27.295544
12/31/93 1.0274 28.043442
12/31/94 1.0400 29.165179
12/31/95 1.0562 30.804262 3.90% 4.23% 3.70% 3.59% 3.77% 5.17% 5.17%
12/31/96 1.0517 32.396843
</TABLE>
<TABLE>
<CAPTION>
Bond
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
========= ======= ========== =========== ========== ========= ========= ========== ========== ===========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/02/82 10.000000 7.34% 7.68% 7.13% 7.03% 7.21% 224.19% 8.66%
12/31/82 1.0060 10.060000
12/31/83 1.0263 10.324578
12/31/84 1.1215 11.579014
12/31/85 1.2153 14.071976
12/31/86 1.1249 15.829566 6.13% 6.47% 5.92% 5.82% 5.99% 104.79% 7.43%
12/31/87 1.0081 15.957785
12/31/88 1.0674 17.033340
12/31/89 1.1071 18.857611
12/31/90 1.0782 20.332276
12/31/91 1.1296 22.967339 5.83% 6.17% 5.63% 5.52% 5.70% 41.15% 7.14%
12/31/92 1.0754 24.699076
12/31/93 1.1069 27.339407
12/31/94 0.9616 26.289574
12/31/95 1.1890 31.258304 2.45% 2.78% 2.25% 2.15% 2.32% 3.71% 3.71%
12/31/96 1.0371 32.417987
</TABLE>
<PAGE> 4
OMNI
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
======== ======= ========== ========= ======== ======== ======== ========= ========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/10/84 -- 10.000000 10.21% 10.56% 9.99% 9.89% 10.07% 284.47% 11.57%
12/31/84 1.0374 10.374000
12/31/85 1.1559 11.991307
12/31/86 1.1794 14.142547 9.18% 9.52% 8.96% 8.85% 9.04% 171.84% 10.52%
12/31/87 0.9832 13.904952
12/31/88 1.1503 15.994867
12/31/89 1.1546 18.467673
12/31/90 1.0191 18.820405
12/31/91 1.1815 22.236309 10.71% 11.07% 10.50% 10.39% 10.58% 72.89% 11.57%
12/31/92 1.0860 24.148632
12/31/93 1.1285 27.251731
12/31/94 0.9947 27.107297
12/31/95 1.2275 33.274207 14.15% 14.51% 13.92% 13.81% 14.00% 15.54% 15.54%
12/31/96 1.1554 38.445018
</TABLE>
INTERNATIONAL
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
======== ======= ========== ========= ======== ======== ======== ========= ========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5/03/93 10.000000 14.78% 15.15% 14.56% 14.45% 14.64% 73.31% 16.21%
12/31/93 1.2496 12.496000
12/31/94 1.0807 13.504427
12/31/95 1.1210 15.138463 13.10% 13.46% 12.88% 12.77% 12.96% 14.48% 14.48%
12/31/96 1.1448 17.330512
</TABLE>
SMALL CAP
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
======== ======= ========== ========= ======== ======== ======== ========= ========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4/30/94 10.000000 25.55% 25.96% 25.32% 25.19% 25.40% 89.85% 27.16%
12/31/94 1.2012 12.012000
12/31/95 1.3115 15.753738 16.28% 16.66% 16.06% 15.94% 16.14% 17.71% 17.71%
12/31/96 1.1606 18.283788
</TABLE>
<PAGE> 5
CAPITAL APPRECIATION
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
========= ======= ========= ========= ======== ======== ========= ========= =========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4/30/94 10.000000 14.50% 14.86% 14.27% 14.16% 14.35% 48.36% 15.93%
12/31/94 1.0354 10.354000
12/31/95 1.2090 12.517986 14.35% 14.72% 14.13% 14.02% 14.21% 15.75% 15.75%
12/31/96 1.1413 14.286777
</TABLE>
AGGRESSIVE GROWTH
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
========= ======= ========= ========= ======== ======== ========= ========= =========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/31/95 10.000000 13.66% 14.03% 13.44% 13.33% 13.52% 27.92% 15.12%
12/31/95 1.2561 12.561000 -0.46% -0.14% -0.65% -0.75% -0.58% 0.76% 0.76%
12/31/96 0.9935 12.479354
</TABLE>
GLOBAL CONTRARIAN
<TABLE>
<CAPTION>
FUND
TOP TOP TOP RETIREMENT FUND FUND
YEAR ROR VALUE COMBINED TOP PLUS EXPLORER SPECTRUM ADVANTAGE CUMULATIVE ANNUALIZED
========= ======= ========= ========= ======== ======== ========= ========= =========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/31/95 10.000000 10.67% 11.02% 10.45% 10.34% 10.53% 22.06% 12.07%
12/31/95 1.0774 10.774000 10.74% 11.09% 10.52% 10.41% 10.60% 12.09% 12.09%
12/31/96 1.1052 11.907425
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000073892
<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
<SERIES>
<NUMBER> 1
<NAME> EQUITY
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 30,148,411
<INVESTMENTS-AT-VALUE> 41,949,830
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 41,949,830
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,147,510
<TOTAL-LIABILITIES> 1,147,510
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,132,263
<SHARES-COMMON-PRIOR> 910,030
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 40,802,320
<DIVIDEND-INCOME> 1,514,050
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 401,473
<NET-INVESTMENT-INCOME> 1,112,577
<REALIZED-GAINS-CURRENT> 552,072
<APPREC-INCREASE-CURRENT> 4,088,878
<NET-CHANGE-FROM-OPS> 5,753,527
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,471,996
<NUMBER-OF-SHARES-REDEEMED> 2,967,801
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000073982
<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
<SERIES>
<NUMBER> 2
<NAME> MONEY MARKET
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 3,290,700
<INVESTMENTS-AT-VALUE> 3,290,700
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,290,700
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 96,630
<TOTAL-LIABILITIES> 96,630
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 192,465
<SHARES-COMMON-PRIOR> 112,654
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,194,070
<DIVIDEND-INCOME> 121,100
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 5,651
<NET-INVESTMENT-INCOME> 115,449
<REALIZED-GAINS-CURRENT> (4,810)
<APPREC-INCREASE-CURRENT> 110,639
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 2,559,335
<NUMBER-OF-SHARES-SOLD> 1,416,812
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
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<CIK> 0000073982
<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
<SERIES>
<NUMBER> 1
<NAME> 3
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
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<INVESTMENTS-AT-VALUE> 3,622,964
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<SHARES-COMMON-STOCK> 205,167
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<DIVIDEND-INCOME> 226,135
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 36,260
<NET-INVESTMENT-INCOME> 189,875
<REALIZED-GAINS-CURRENT> 2,900
<APPREC-INCREASE-CURRENT> (90,712)
<NET-CHANGE-FROM-OPS> 102,063
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 1,287,549
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<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000073982
<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
<SERIES>
<NUMBER> 4
<NAME> OMNI
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1996
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<INVESTMENTS-AT-VALUE> 30,345,958
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 30,345,958
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<OTHER-ITEMS-LIABILITIES> 331,716
<TOTAL-LIABILITIES> 331,716
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,099,112
<SHARES-COMMON-PRIOR> 894,447
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 30,014,242
<DIVIDEND-INCOME> 1,159,886
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 280,432
<NET-INVESTMENT-INCOME> 879,454
<REALIZED-GAINS-CURRENT> 257,649
<APPREC-INCREASE-CURRENT> 2,449,471
<NET-CHANGE-FROM-OPS> 3,586,574
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,646,630
<NUMBER-OF-SHARES-REDEEMED> 2,007,817
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000073982
<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
<SERIES>
<NUMBER> 5
<NAME> INTERNATIONAL
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 26,614,406
<INVESTMENTS-AT-VALUE> 29,922,490
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<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,922,490
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,879,131
<SHARES-COMMON-PRIOR> 1,256,575
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 29,922,490
<DIVIDEND-INCOME> 1,315,143
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<NAME> OHIO NATIONAL VARIABLE ACCOUNT B
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