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As filed with the Securities and Exchange Commission on April 17, 1996
FILE NO. 33-7734
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 12
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
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A. Exact name of trust:
CHUBB SEPARATE ACCOUNT A
(FORMERLY THE CHUBB/VOLUNTEER SEPARATE ACCOUNT A)
B. Name of depositor:
CHUBB LIFE INSURANCE COMPANY OF AMERICA
(FORMERLY THE VOLUNTEER STATE LIFE INSURANCE COMPANY)
C. Complete address of depositor's principal executive offices:
One Granite Place
Concord, NH 03301
D. Name and complete address of agent for service:
Ronald R. Angarella
President
Chubb Securities Corporation
One Granite Place
Concord, NH 03301
Copies to:
Charlene Grant, Esq. Joan E. Boros, Esq.
Chubb Life Insurance Company of America Katten Muchin & Zavis
One Granite Place 1025 Thomas Jefferson Street, N.W.
Concord, NH 03301 East Lobby, Suite 700
Washington, D.C. 20007
---------------
It is proposed that this filing will become effective (check appropriate
box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1996 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(i)
[_] on (date) pursuant to paragraph (a)(i) of rule (485)
[_] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
E. Title and amount of Securities being registered:
Units of Interest in the Separate Account Under Individual Flexible
Premium Variable Life Insurance Policies.
F. Proposed maximum aggregate offering prices to the public of the securities
being registered:
Registration of Indefinite Amount of Securities under the Securities
Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940.
G. Amount of filing Fee:
An indefinite amount of the Registrant's securities has been
registered pursuant to a declaration, under Rule 24f-2 under the
Investment Company Act of 1940, set out in the Form S-6 Registration
Statement contained in File No. 2-94478. Registrant filed a Rule 24f-2
Notice for the fiscal year ending December 31, 1995 on February 27,
1996.
H. Approximate date of proposed public offering:
As soon as practicable after the effective date.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940, with respect to the policy described in the
Prospectus.
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<PAGE>
ENSEMBLE II
CHUBB SEPARATE ACCOUNT A
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ISSUED BY
CHUBB LIFE INSURANCE COMPANY OF AMERICA
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
The Flexible Premium Variable Life Insurance Policy ("Policy") currently
offered by Chubb Life Insurance Company of America ("Chubb Life") and
described in this Prospectus is designed to provide a policyowner with both
lifetime insurance protection and maximum flexibility in connection with
premium payments and death benefits. Although each Policy contains a schedule
of intended premium payments ("Planned Periodic Premiums"), and an intended
frequency of premium payments ("Premium Frequency"), a policyowner may,
subject to certain restrictions, vary the frequency and amount of the premium
payments and increase or decrease the level of life insurance benefits payable
under the Policy. This flexibility allows a policyowner to provide for
changing insurance needs within the framework of a single insurance policy.
Unlike traditional lifetime insurance protection, the policyowner participates
in the investment experience of Chubb Separate Account A ("Separate Account
A"). Accumulation value under the Policy will increase with positive
investment experience and decrease with negative investment experience.
Accumulation value in Separate Account A is not guaranteed and could decline
to zero.
The Policy provides for a death benefit payable at the Insured's death. If
net premiums are allocated to Separate Account A, the amount of the death
benefit may reflect the investment experience of the chosen division of
Separate Account A, as well as the frequency and amount of premiums, any
withdrawals of cash value ("withdrawal"), and the charges assessed in
connection with the Policy. As long as the Policy remains in force, the death
benefit will not be less than the current Specified Amount of the Policy,
reduced by any outstanding indebtedness and any due and unpaid charges. The
minimum initial Specified Amount of a Policy is $25,000. The Specified Amount
may not be reduced to less than $25,000, except when required by a withdrawal.
The Specified Amount may not be reduced to less than $10,000 after a
withdrawal.
The Policy provides two death benefit options which may be chosen by the
policyowner. Under Option I, the death benefit payable under the Policy is
equal to the greater of (i) the Specified Amount or (ii) the Policy's
accumulation value on the date of death multiplied by the "corridor
percentage". The corridor percentage is a tax law concept pertaining to the
relationship between accumulation value and death benefit, based on the
Insured's attained age. Under Option II, the death benefit equals the
Specified Amount plus the accumulation value of the Policy on the date of
death, but not less than the Policy's accumulation value multiplied by the
corridor percentage. The policyowner may, subject to certain restrictions,
change from one death benefit option to the other after the Policy has been
issued.
The initial premium payment must be sufficient to keep the Policy in force
for at least three months. No premium payment may be less than $25. The total
of all premiums paid may never exceed the current maximum premium limitations
set forth in the Internal Revenue Code of 1986 (the "Code"). The limitation on
total premiums paid is imposed in order to comply with present requirements
for the definition of life insurance to obtain favorable federal income tax
treatment of the Policy and its death benefit.
The Policy will remain in force so long as cash value exceeds indebtedness
and cash value less indebtedness is sufficient to pay certain monthly charges
imposed in connection with the Policy. The cash value equals the accumulation
value less any surrender charge. Accumulation value in Separate Account A will
reflect the investment experience of the chosen divisions of Separate Account
A, the amount and frequency of premium payments, any withdrawals, and charges
imposed in connection with the Policy. Adherence to the schedule of Planned
Periodic Premiums will not assure the Policy will remain in force. The
policyowner bears the entire investment risk for all amounts allocated to
Separate Account A; no minimum accumulation value is guaranteed and the
accumulation value could decline to zero. So long as cash value exceeds
indebtedness and subject to certain conditions described in this Prospectus, a
policyowner may obtain policy loans at any time after the first policy
anniversary and may make withdrawals at any time. Both withdrawals and policy
loans must be made prior to the Policy's maturity date.
The policyowner may allocate net premiums to one or more of the divisions of
Separate Account A or to Chubb Life's General Account on the allocation date.
Each division of Separate Account A will invest solely in a corresponding
portfolio (a "Portfolio") of Chubb America Fund, Inc., Templeton Variable
Products Series Funds, Fidelity Variable Insurance Products Fund or Fidelity
Variable Insurance Products Fund II (collectively, the "Funds"). Prior to the
allocation date the net premiums paid will be deposited in Chubb Life's General
Account. There is a period during which the policyowner may cancel the Policy.
If the policyowner elects during this "free look" period to cancel the Policy,
Chubb Life will reimburse, within seven days from the date the Policy is
surrendered to Chubb Life, the full amount of premium paid. The accompanying
Prospectuses for the Funds and the Statements of Additional Information,
available on request, describe the investment objectives and risks of the
thirteen Portfolios.
Prospective purchasers of this Policy are advised that replacement of
existing insurance coverage may not be financially advantageous and should
consult with their financial advisers with respect to the Policy. It may also
not be advantageous to purchase this Policy, if the prospective purchaser
already owns a flexible premium variable life insurance policy.
This Prospectus generally describes only the portion of the Policy involving
Separate Account A. For a brief summary of Chubb Life's General Account, see
"THE GENERAL ACCOUNT."
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED OR PRECEDED BY A CURRENT
PROSPECTUS FOR THE FUNDS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR
ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
DEFINITIONS.......................................................... 3
SUMMARY.............................................................. 4
CHUBB LIFE INSURANCE COMPANY OF AMERICA.............................. 9
CHUBB SEPARATE ACCOUNT A............................................. 9
THE FUNDS............................................................ 9
THE POLICY........................................................... 13
General............................................................ 13
Payment of Premiums................................................ 13
Premium Limitations................................................ 13
Allocation of Premiums............................................. 13
Transfers.......................................................... 14
Telephone Transfers, Loans and Reallocations....................... 15
Policy Lapse....................................................... 15
Reinstatement...................................................... 16
Policy "Free Look"................................................. 16
CHARGES AND DEDUCTIONS............................................... 16
Premium Charges.................................................... 16
Monthly Deduction.................................................. 16
Risk Charge........................................................ 17
Surrender Charge................................................... 17
Administrative Fees................................................ 18
Other Charges...................................................... 18
POLICY BENEFITS AND RIGHTS........................................... 18
Death Benefits..................................................... 18
Guaranteed Death Benefit........................................... 20
Combined Requests.................................................. 20
Maturity of the Policy............................................. 20
Optional Insurance Benefits........................................ 20
Settlement Options................................................. 21
CALCULATION OF ACCUMULATION VALUE.................................... 22
Unit Values........................................................ 22
Net Investment Factor.............................................. 23
CASH VALUE BENEFITS.................................................. 23
Surrender Privileges............................................... 23
Policy Loans....................................................... 24
<CAPTION>
PAGE
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<S> <C>
OTHER MATTERS........................................................ 25
Voting Rights...................................................... 25
Additions, Deletions or Substitutions of Investments............... 26
Annual Summary..................................................... 26
Confirmation....................................................... 26
Limitation on Right to Contest..................................... 26
Misstatements...................................................... 27
Suicide............................................................ 27
Beneficiaries...................................................... 27
Postponement of Payments........................................... 27
Assignment......................................................... 27
Illustration of Benefits and Values................................ 27
Non-Participating Policy........................................... 27
THE GENERAL ACCOUNT.................................................. 27
General Description................................................ 27
The Policy......................................................... 28
General Account Benefits........................................... 28
General Account Accumulation Value................................. 28
Determination of Charges........................................... 28
Premium Deposit Fund............................................... 28
DISTRIBUTION OF THE POLICY........................................... 29
Group or Sponsored Arrangements.................................... 29
MANAGEMENT OF CHUBB LIFE............................................. 31
Executive Officers and Directors of Chubb Life..................... 31
STATE REGULATION OF CHUBB LIFE....................................... 33
FEDERAL TAX MATTERS
Tax Considerations................................................. 33
Policy Proceeds.................................................... 33
Charge for Chubb Life Income Taxes................................. 36
EMPLOYEE BENEFIT PLANS............................................... 36
LEGAL PROCEEDINGS.................................................... 36
EXPERTS.............................................................. 36
REGISTRATION STATEMENT............................................... 37
FINANCIAL STATEMENTS................................................. F-1
ILLUSTRATIONS........................................................ Appendix A
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. CHUBB LIFE DOES NOT AUTHORIZE ANY IN-
FORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPEC-
TUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS, THE PROSPECTUSES OF THE FUNDS
OR THE STATEMENTS OF ADDITIONAL INFORMATION OF THE FUNDS.
2
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DEFINITIONS
In addition to the capitalized terms which are defined elsewhere in this Pro-
spectus, the following words and phrases shall have the indicated meanings:
Accumulation value--The total amount that a Policy provides for investment at
any time plus the amount held as collateral for policy debt.
Age--The Insured's age at his nearest birthday.
Allocation date--The date when the initial premium is placed in divisions of
Separate Account A and the General Account in accordance with the policyowner's
allocation instructions in the application. The allocation date is 25 days from
the date Chubb Life mails the Policy to the agent for delivery to the
policyowner. However, if the insured is in a substandard risk class, the
Allocation Date will be the date of receipt by Chubb Life of all items necessary
under its administrative and underwriting procedures to release the Policy to
active status in its processing system.
Attained Age--The age of the Insured at the last policy anniversary.
Beneficiary---The beneficiary designated by the policyowner in the applica-
tion. If changed, the beneficiary is as shown in the latest change filed with
Chubb Life. If no beneficiary survives the Insured, the policyowner or the
policyowner's estate will be the beneficiary. The interest of any beneficiary
is subject to that of any assignee.
Cash value--The accumulation value less the surrender charge. This amount less
the amount of policy debt is payable to the policyowner on the earlier of sur-
render of the Policy or the maturity date.
Date of Receipt--Any business day of Chubb Life, prior to 4:00 P.M. New York
City time, on which a notice or premium payment is received at Chubb Life's
service center or home office.
Death benefit--The amount, less the amount of policy debt, which is payable to
the beneficiary under the Policy upon the death of the Insured.
Division--A division of Separate Account A which invests exclusively in the
shares of a specified Portfolio of the Funds.
Ensemble II--The name of the Flexible Premium Variable Life Insurance Policy
described in this Prospectus.
Funds--Chubb America Fund, Inc., Templeton Variable Products Series Fund,
Fidelity Variable Insurance Products Fund and Fidelity Variable Insurance
Products Fund II, series mutual funds.
General Account--The assets of Chubb Life other than those allocated to Sepa-
rate Account A or any other separate account.
Insured--The person upon whose life the Policy is issued.
Issue Age--The Insured's age at his nearest birthday on the Policy Date.
Loan value--Generally, 90% of a Policy's cash value on the date of a loan.
Maturity date--Unless otherwise specified, the maturity date will be the pol-
icy anniversary nearest to the Insured's 95th birthday.
Monthly anniversary date--The same date in each month as the policy date.
Minimum Initial Premium--The minimum payment which is due and payable
on the Policy Date. The Minimum Initial Premium must be sufficient to
cover monthly deductions and keep the Policy in force for at least three months.
Net premium--The gross premium less a 2.5% premium tax charge.
Owner (Policyowner)--The person so designated in the application or as subse-
quently changed.
Policy date--The date set forth in the Policy, which is the date requested by
the Owner. If no date is requested, it is the later of the date of application
or the date of any required medical examination. The policy date is the date
from which policy years, policy months, and policy anniversaries will be deter-
mined. If the policy date should fall on the 29th, 30th or 31st of a month, the
policy date will be the 28th of such month.
Policy debt--The sum of all unpaid policy loans and accrued interest thereon.
Portfolio--A separate investment Portfolio of the Funds.
Proof of death--One or more of the following:
(a) A copy of a certified death certificate.
(b) A copy of a certified decree of a court of competent jurisdiction as to
the finding of death.
(c) A written statement by a medical doctor who attended the Insured.
(d) Any other proof satisfactory to Chubb Life.
Separate Account A--Chubb Separate Account A, a separate investment account
created by Chubb Life to receive and invest net premiums paid under the Policy
and other flexible premium variable life insurance policies offered by Chubb
Life.
Specified Amount--The face amount of the Policy which is the minimum death
benefit payable under the Policy.
Surrender Charge--A sales charge assessed only upon surrender or withdrawal.
Valuation date--Each day, as of the close of regular trading on the New York
Stock Exchange, which is currently 4:00 P.M. New York City time.
Valuation period--The period between two successive valuation dates, commenc-
ing at the close of regular trading on the New York Stock Exchange on each val-
uation date and ending at the close of regular trading on the New York Stock
Exchange on the next succeeding valuation date.
3
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SUMMARY
THE FOLLOWING SUMMARY OF PROSPECTUS INFORMATION SHOULD BE READ IN CONJUNCTION
WITH THE DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. ANY
SIGNIFICANT VARIATIONS FROM THE INFORMATION APPEARING IN THIS PROSPECTUS WHICH
MAY BE REQUIRED DUE TO INDIVIDUAL STATE REQUIREMENTS ARE CONTAINED IN
SUPPLEMENTS WHICH ARE ATTACHED TO THIS PROSPECTUS, OR IN ENDORSEMENTS TO THE
POLICY, AS APPROPRIATE. UNLESS OTHERWISE INDICATED, THE DESCRIPTION OF THE
POLICY CONTAINED IN THIS PROSPECTUS ASSUMES THE POLICY IS IN EFFECT, THERE IS
NO OUTSTANDING POLICY DEBT AND THE DEATH BENEFIT IS NOT SUBJECT TO ADJUSTMENT
BY THE CORRIDOR PERCENTAGE.
The Policy. Under the flexible premium variable life insurance policy (the
"Policy") issued by Chubb Life Insurance Company of America ("Chubb Life"), the
policyowner may, subject to certain limitations, make premium payments in any
amount at any frequency. The Policy is a life insurance contract with death
benefits, cash values, and other features traditionally associated with life
insurance. It is called "flexible premium" because, unlike many insurance
contracts, there is no fixed schedule for premium payments, although each
policyowner may establish a schedule of premium payments ("Planned Periodic
Premiums"). This flexibility permits a policyowner to provide for evolving
insurance needs within a single insurance product. The minimum initial
Specified Amount is $25,000. A policyowner under attained age 85 may increase
or decrease coverage. Increasing coverage under the Policy, rather than
purchasing another policy, may save additional administrative costs. Increasing
coverage under the Policy or purchasing another policy may require new evidence
of insurability. Increasing coverage may have certain tax consequences. See
"Federal Tax Matters."
The Policy is called "variable" because, unlike the fixed benefits of an
ordinary whole life insurance contract, the accumulation value, the cash value
and, under certain circumstances, the death benefit of the Policy may increase
or decrease depending upon the investment experience of the divisions of Chubb
Separate Account A ("Separate Account A") to which premium payments have been
allocated. So long as the Policy's cash value continues to be sufficient to pay
the monthly deduction, all policyowners are guaranteed a minimum death benefit
equal to the face amount of the Policy (the "Specified Amount"), less any
outstanding policy debt.
The death benefit is payable under two options. Under Option I, the death
benefit is equal to the greater of the Specified Amount or the accumulation
value of the Policy on the date of death multiplied by the corridor percentage.
Under Option II, the death benefit is equal to the sum of the Specified Amount
and the Policy's accumulation value on the date of death, subject to adjustment
by the corridor percentage. The corridor percentage is a tax law concept
pertaining to the relationship between accumulation value and the death
benefit, based on the Insured's attained age. Prospective policyowners should
be aware that there is no guarantee of accumulation value in Separate Account
A. See "POLICY BENEFITS AND RIGHTS--Death Benefits."
Chubb Separate Account A. Separate Account A is a separate account established
by Chubb Life pursuant to the insurance laws of the State of New Hampshire and
organized as a registered unit investment trust under the Investment Company Act
of 1940 (the "1940 Act"). Such registration does not involve any supervision by
the Securities and Exchange Commission (the "Commission") of the management or
investment practices or policies of Separate Account A. Separate Account A is
presently comprised of thirteen divisions, each of which buys shares at net
asset value of the corresponding portfolio (a "Portfolio") of Chubb America
Fund, Inc., Templeton Variable Products Series Fund, Fidelity Variable Insurance
Products Fund or Fidelity Variable Insurance Products Fund II (the "Funds").
Separate Account A is administered and accounted for as part of the general
business of Chubb Life, but the income, capital gains, or capital losses of
Separate Account A are credited to or charged against the assets held in the
account in accordance with the terms of the Policy, without regard to other
income or capital gains or losses of any other account arising out of any other
business Chubb Life conducts. The assets of Separate Account A are not
chargeable with liabilities arising out of any other business conducted by Chubb
Life. The income and both realized and unrealized gains or losses on the assets
of each division are separate and are credited or charged against each division
without regard to income, gains or losses from any other division. See
"CALCULATION OF ACCUMULATION VALUE--Unit Values."
A policyowner may allocate net premium payments among the General Account and
the divisions of Separate Account A which invest in Portfolios of the Funds.
If the Date of Receipt of the initial premium is prior to the date Chubb Life
either issues the Policy or offers to issue the Policy on a basis other than as
applied for, and that initial premium exceeds $500, the net premium, less any
monthly deductions, will be credited with interest at the rate currently being
credited to the General Account. This amount will be credited with interest for
the period between the Date of Receipt of the premium (or the policy date,
whichever is
4
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later) and the date Chubb Life issues the Policy or the applicant refuses Chubb
Life's offer to issue the Policy on a basis other than as applied for. In those
instances when Chubb Life declines to issue a Policy, the entire premium paid,
if greater than $500, will be returned with interest; interest will be credited
from the Date of Receipt to the date the application is rejected. If the Policy
issued as applied for is not accepted or the "free look" is exercised, no
interest will be credited. Chubb Life will retain any interest earned on the
initial net premium. Prior to the allocation date the initial net premium will
be deposited in Chubb Life's General Account.
The Funds. Chubb America Fund, Inc. is registered as an open-end diversified
management company under the 1940 Act. Its shares are offered only to divisions
of separate accounts, whether now in existence or to be established by Chubb
Life or its affiliated insurance companies to fund variable life insurance
policies and variable annuity contracts.
Chubb America Fund, Inc. presently has nine classes of stock, each
representing a Portfolio having a specific investment objective. The present
Portfolios of Chubb America Fund, Inc. are the World Growth Stock Portfolio,
the Money Market Portfolio, the Gold Stock Portfolio, the Bond Portfolio, the
Domestic Growth Stock Portfolio, the Growth and Income Portfolio, the Capital
Growth Portfolio, the Balanced Portfolio and the Emerging Growth Portfolio. In
the future, Chubb America Fund, Inc. may add or delete Portfolios. The
investment adviser to Chubb America Fund, Inc. is Chubb Investment Advisory
Corporation ("Chubb Investment Advisory"), a subsidiary of Chubb Life.
Templeton Variable Products Series Fund is an open-end, diversified management
investment company currently consisting of five separate series, one of which
(Templeton International Fund) offers its shares to a corresponding division of
Separate Account A. Templeton Variable Series Fund offers its shares solely to
separate accounts of insurance companies, including companies not affiliated
with Chubb Life, as an investment vehicle for variable life insurance policies
and variable annuity contracts. The investment manager of Templeton
International Fund is Templeton Investment Counsel, Inc. ("TICI").
Fidelity Variable Insurance Products Fund (Fidelity VIP) and Fidelity
Variable Insurance Products Fund II (Fidelity VIPII) are open-end, diversified
management investment companies. Fidelity VIP currently consists of four
separate series, one of which (High Income Portfolio) offers its shares to a
corresponding division of Separate Account A. Fidelity VIPII currently consists
of five separate series, two of which (Contrafund Portfolio and Index 500
Portfolio) offer their shares to corresponding divisions of Separate Account A.
Fidelity VIP and Fidelity VIPII offer their shares solely to separate accounts
of insurance companies, including companies not affiliated with Chubb Life, as
investment vehicles for variable life insurance policies and variable annuity
contracts. Fidelity Management & Research Company is the investment manager of
Fidelity VIP and Fidelity VIPII.
Policyowners should be aware that there can be no assurance that any Portfolio
will in fact achieve its stated objectives. Policyowners should read and retain
the prospectuses for the Funds which accompanies this Prospectus for detailed
information.
See "THE FUNDS."
Premiums. The first premium is due on the policy date. Premiums are paid in
advance, generally one year at a time; however, Chubb Life permits semi-annual,
quarterly and monthly premium payments. Changes in frequency and increases or
decreases in the amount of Planned Periodic Premiums may be made by the
policyowner provided that the total of all premiums, scheduled and unscheduled,
cannot exceed the current maximum premium limitations for the definition of
life insurance, set forth in the Code. Chubb Life will return any excess
premiums if the total of all premiums, scheduled and unscheduled, will exceed
these limits. Chubb Life will notify policyowners annually if any premiums
would cause the Policy to be deemed a modified endowment contract and allow for
a refund of the excess premium. See "FEDERAL TAX MATTERS--Policy Proceeds".
Chubb Life reserves the right to limit the amount of any increase in premium
payment. Subject to the foregoing limitations, a policyowner may make
additional premium payments at any time prior to the maturity date of the
Policy. See "THE POLICY--Payment of Premiums".
Failure to pay premiums in accordance with the schedule of Planned Periodic
Premiums will not automatically cause the Policy to lapse. It will lapse only
when the cash value less outstanding policy debt is insufficient to pay the
monthly deduction and a grace period expires without a sufficient payment by
the policyowner. Conversely, payment of premiums in accordance with the
schedule of Planned Periodic Premiums does not necessarily mean that the Policy
will remain in force. See "THE POLICY--Policy Lapse".
Death Benefit. The death benefit under the Policy is the amount payable to the
named beneficiary when the person insured under the Policy dies. All or part of
the death benefit may be paid in cash or applied under one or more of the
payment options available under the Policy. See "POLICY BENEFITS AND RIGHTS--
Settlement Options". The death benefit will be reduced by the amount of any
outstanding policy debt or unpaid monthly deduction.
5
<PAGE>
Under Option I, the death benefit will be equal to the greater of the
Specified Amount or the accumulation value of the Policy on the date of death
multiplied by the corridor percentage. Under Option II, the death benefit is
equal to the Specified Amount plus the accumulation value of the Policy on the
date of death; provided, however, that under Option II, the death benefit can
never be less than the accumulation value on the date of death multiplied by
the corridor percentage. See "POLICY BENEFITS AND RIGHTS--Death Benefits".
A policyowner may, by written request, change the Specified Amount at any time
after the first policy anniversary. Any change is subject to the following
conditions:
1. Any requested decrease in Specified Amount will become effective on the
monthly anniversary date that coincides with, or next follows, receipt of
such request. The minimum decrease in Specified Amount is $25,000. No
decrease may reduce the Specified Amount below $25,000.
2. Any request for an increase in Specified Amount must be applied for, by a
supplemental application, prior to attained age 85, and shall be subject to
evidence of insurability satisfactory to Chubb Life. The minimum increase in
Specified Amount is $25,000.
3. Any change approved by Chubb Life will become effective on the date shown
in the Supplemental Policy Specification Page of the Policy, subject to
deduction of the first month's cost of insurance from the accumulation value
of the Policy.
By written request, a policyowner may also change the death benefit option. If
the request is to change from Option I to Option II, the Specified Amount will
be decreased by the amount of the accumulation value of the Policy on the
effective date of the change. Evidence of insurability satisfactory to Chubb
Life will be required for change from Option I to Option II. If the request is
to change from Option II to Option I, the Specified Amount will be increased by
the amount of the accumulation value of the Policy on the effective date of the
change. No evidence of insurability is required for a change from Option II to
Option I. The effective date of either change shall be the monthly anniversary
date that coincides with or next follows the Date of Receipt of the request for
change. See "POLICY BENEFITS AND RIGHTS--Death Benefits". Policyowners may
combine a request for a change in the Specified Amount with a request for a
change in the death benefit option. Combined requests will be subject to the
requirements and limitations of each of the requests. See "POLICY BENEFITS AND
RIGHTS--Combined Requests."
Value of Policy. The Policy provides for accumulation value equal to the total
of accumulation value in the General Account and the Policy's accumulation
value in divisions of Separate Account A. The Policy's accumulation value will
reflect the amount and frequency of premium payments, the value of net premiums
(net premiums plus credited interest), if any, allocated to the General
Account, the investment experience of Separate Account A, policy loans, any
withdrawals, and any charges imposed in connection with the Policy. There is no
minimum guaranteed accumulation value.
The accumulation value of each division in Separate Account A on the
allocation date is equal to the net premiums, plus interest earned prior to the
allocation date, which have been paid and allocated to that division less the
portion of the first monthly deduction allocated to the Policy's accumulation
value in that division. Thereafter, at the end of each valuation period after
the initial allocation, the Policy's accumulation value in a division is equal
to the sum of (a) the accumulation value in the division on the preceding
valuation date multiplied by the net investment factor (See "CALCULATION OF
ACCUMULATION VALUE--Net Investment Factor") for the current valuation period,
plus (b) any net premium received during the current valuation period which is
allocated to the division, plus (c) all accumulation values transferred to the
division from another division or the General Account, including loan
repayments, during the current valuation period, minus (d) accumulation values
transferred from the division to another division or the General Account and
accumulation values transferred to secure a policy debt during the current
valuation period, and minus (e) all withdrawals from the division during the
current valuation period, and minus (f) a pro-rata portion of monthly
deductions, whenever a valuation period includes the monthly anniversary date.
The Policy's total accumulation value in Separate Account A equals the sum of
the Policy's accumulation value in each division. The Policy's accumulation
value in Separate Account A is expressed in terms of the number of units and
unit values of each division. See "CALCULATION OF ACCUMULATION VALUE--Unit
Values."
6
<PAGE>
Charges and Deductions.
(a) Chubb Life deducts 2.5% of each premium payment received to cover state
premium taxes imposed. This premium tax charge represents an average of state
premium taxes. This charge may not be increased.
(b) There is a monthly deduction from each Policy's accumulation value in the
General Account and/or the divisions of Separate Account A equal to the sum of
(i) the cost of insurance, described below, and the cost of additional benefits
provided by rider attached to the Policy; and (ii) a monthly administrative
charge of $6.00. The cost of insurance charge is calculated on each monthly
anniversary date. It is based on the sex, issue age, policy year, rating class
of the Insured, and Specified Amount of the Policy. Monthly cost of insurance
rates will be determined by Chubb Life based upon its expectations as to future
mortality experience. Cost of insurance rates are guaranteed not to exceed or
be increased above the maximum charge based upon the Commissioner's 1980
Standard Ordinary Mortality Table.
(c) A mortality and expense risk charge, not to exceed .0024657% on a daily
basis (.90% on an annual basis) will be imposed on the assets of each division.
Chubb Life will realize a gain from this charge to the extent it is not needed
to provide benefits and pay expenses under the Policy.
(d) Upon surrender or withdrawal, Chubb Life will assess a surrender charge.
The surrender charge for the initial Specified Amount is determined by
multiplying a surrender factor by the lesser of (1) the premiums actually
received in policy year one, or (2) the "Guideline Annual Premium" as defined
in the rules under the 1940 Act. Subject to other considerations, the surrender
charges may be reduced by paying less premium in policy year one. The surrender
factor depends on the length of time the Policy has been in force and ranges
between 0% and 30% of the premium paid in policy year one. The surrender charge
for increases in the Specified Amount is determined in a similar manner. The
surrender charge is more fully described under "CHARGES AND DEDUCTIONS--
Surrender Charge".
(e) Chubb Life charges an administrative fee equal to the lesser of $25 or 2%
of the amount of the withdrawal for each withdrawal and the lesser of $25 or
10% of the amount of a transfer for each transfer between divisions of Separate
Account A or the General Account. Chubb Life reserves the right to assess a
charge, not to exceed $25, for each request by a policyowner for an illustration
of benefits and values after the policy date.
(f) Chubb Life reserves the right to charge the assets of each division of
Separate Account A to provide for any income taxes payable by Chubb Life on the
assets of such divisions. In addition, an investment advisory fee is imposed
against the assets of each Portfolio to compensate the Funds' investment
manager and sub-investment managers. See "THE FUNDS".
Policy Loans. After the first policy anniversary, a policyowner may borrow
against the cash value of his Policy. Generally, the maximum loan amount is 90%
of the cash value of the Policy on the date of the loan. Loan interest is
payable at the end of each policy year and all policy debt outstanding will be
deducted from proceeds payable at the Insured's death, upon maturity, or upon
surrender.
A policyowner may allocate a policy loan among the General Account and the
various divisions of Separate Account A. Accumulation value in each division
equal to the policy debt so allocated will be transferred to the General
Account. If loan interest is not paid when due, it becomes loan principal. An
amount equal to the unpaid loan interest will be transferred to the General
Account pro-rata from the accumulation value of the General Account and the
divisions of Separate Account A. If no accumulation value is available in any
of the divisions of Separate Account A, accumulation value held in the General
Account will be set aside as loan collateral. Accumulation value held in the
General Account for loan collateral earns interest daily at the lesser of an
effective rate of 6% or the interest rate currently credited to the General
Account. As an administrative practice and in Chubb Life's sole discretion, if
the interest rate currently credited to the General Account falls below 6%, the
accumulation value held in the General Account for loan collateral may continue
to earn interest at 6%.
A policy loan accrues interest at a maximum rate of 8% compounded annually, or
at any lower rate established by Chubb Life for any period during which the
loan is outstanding. There are two types of loans available. A Type A loan is
charged the same interest rate as the interest credited to the amount of
accumulation value which is held in the General Account to secure loans. The
amount available at any time for a Type A loan equals the maximum loan amount
less the DEFRA Guideline Single Premium, as set forth in the Code, less any
outstanding Type A loans. All other loans are
7
<PAGE>
Type B loans; a Type B loan is charged the prevailing interest rate, but not
more than the maximum. It is possible for one loan request to result in both a
Type A and Type B loan. Interest accrues on a daily basis from the date of the
loan and is compounded annually. A policy loan may be prepaid in whole or in
part at any time while the Policy is in force. When a loan repayment is made,
accumulation value securing the policy debt in the General Account equal to the
loan repayment will be allocated among the General Account and divisions of
Separate Account A using the same percentages as used to allocate net premiums.
See "CASH VALUE BENEFITS--Policy Loans".
Policy Cancellation, Surrender and Lapse. The policyowner has the limited
right to return a Policy for cancellation and full refund of all premiums paid.
Chubb Life will cancel the Policy if it is returned by mail or personal
delivery to Chubb Life or to the agent who sold the Policy, within 10 days
after the delivery of the Policy to the policyowner, within 45 days of the date
of the execution of the application for insurance, or within 10 days after
mailing or personal delivery of a Notice of the Right of Withdrawal, whichever
is later. Chubb Life will return to the policyowner, within seven days, all
payments received on the Policy. Prior to the allocation date, the initial net
premium will be deposited in Chubb Life's General Account; Chubb Life will
retain any interest earned if the "free look" right is exercised.
So long as the Policy is in force, a policyowner may elect, subject to the
consent of any irrevocable beneficiary or assignee of the Policy, to surrender
the Policy and receive its cash value, i.e., the cash value of the Policy
determined as of the day Chubb Life receives the policyowner's written request,
less any outstanding policy debt secured by the Policy. A policyowner may also
request a withdrawal, subject to the consent of any irrevocable beneficiary, of
the cash value of the Policy. Normally, a withdrawal reduces the death benefit
payable under the Policy by an amount equal to the reduction in the Policy's
accumulation value plus a pro-rata portion of the surrender charge.
Failure to make any premium payment on a Policy will not necessarily cause the
Policy to lapse. The duration of a Policy depends upon the cash value. The Pol-
icy will remain in force so long as the cash value less any outstanding policy
debt is sufficient to pay the monthly deduction. In the event the cash value,
less any outstanding policy debt, is insufficient to pay the monthly deduction
and a sixty-one day grace period expires without an adequate payment by the
policyowner, the Policy will lapse and terminate without value. See "THE POLI-
CY--Policy Lapse."
Once a Policy has lapsed, the policyowner may request reinstatement of the
Policy anytime within five years of lapse. Satisfactory proof of insurability
and payment of a reinstatement premium are required for reinstatement. See "THE
POLICY--Reinstatement."
Distribution of the Policy. Chubb Life will offer the Policy in all
jurisdictions where it is licensed to sell this type of insurance product. The
Policy will be sold by agents who represent Chubb Life and are registered
representatives of Chubb Securities Corporation or other registered broker-
dealers.
Tax Consequences of the Policy. All death benefits paid under the Policy will
generally be fully excludable from the gross income of the policy beneficiary
for federal income tax purposes. Treasury regulations require that investments
underlying the Policy be adequately diversified. Chubb Life believes it is
presently in compliance with the regulations and intends to remain in
compliance with such regulations and other federal tax law requirements.
Chubb Life may charge each division in Separate Account A for its portion of
any income tax charged to Chubb Life on the division or its assets. The charge,
if imposed, will reduce the investment return of Separate Account A.
If a policyowner elects to make certain transactions, including a partial
withdrawal, surrender or exchange of the Policy, or receipt of accelerated ben-
efits pursuant to the Terminal Illness Accelerated Benefit Rider, the
policyowner may be taxed on a portion of any amounts paid to the policyowner
(which may include any prior policy loans cancelled in the transaction). Also,
if premiums paid by a policyowner exceed certain limits and the Policy is
deemed a modified endowment contract, then any pre-death distributions, includ-
ing loans, surrenders and partial withdrawals, may be treated as income taxable
to the policyowner and may also cause the policyowner to incur a penalty tax of
10%. Policyowners are advised to consult with their own tax advisers with re-
gard to the tax consequences of the Policy. See "FEDERAL TAX MATTERS".
8
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Chubb Life is a stock life insurance company chartered in 1903 in Tennessee
and has been continuously engaged in the insurance business since that time.
Prior to July 1, 1991, Chubb Life was known as The Volunteer State Life
Insurance Company. Chubb Life redomesticated from the State of Tennessee to the
State of New Hampshire on July 1, 1991 and is now a New Hampshire life
insurance company. It is licensed to do life insurance business in forty-nine
states of the United States, Puerto Rico, the U.S. Virgin Islands, Guam and in
the District of Columbia. Chubb Life is a wholly-owned subsidiary of The Chubb
Corporation, a New Jersey corporation. The principal offices of The Chubb
Corporation are located at 15 Mountain View Road, Warren, New Jersey. Its
telephone number is 908/903-2000. Chubb Life's service center is located at 832
Georgia Avenue, Chattanooga, Tennessee 37402, telephone number 615/756-2887 and
its home office and service center is located at One Granite Place, Concord,
New Hampshire 03301, telephone number 800-258-3648.
Chubb Life and its subsidiaries had total assets, at December 31, 1995, of
$4,275,365,000 and had over $66 billion of insurance in force, while total
assets of The Chubb Corporation, as of the same date, were $22,996,525,000.
Chubb Life writes individual life and disability insurance and annuities. It
is subject to New Hampshire law governing insurance, and is regulated and
supervised by the New Hampshire Insurance Commissioner. Chubb Life is currently
rated AAA (Superior) by Standard & Poors's Corporation and A+(Superior) by A.M.
Best and Company. These ratings merely reflect the opinion of the rating
company as to the relative financial strength of Chubb Life and Chubb Life's
ability to meet its contractual obligations to its policyowners. Even though
assets in Separate Account A are held separately from Chubb Life's other
assets, ratings of Chubb Life may still be relevant to policyowners since not
all of Chubb Life's contractual obligations relate to payments based on those
segregated assets.
CHUBB SEPARATE ACCOUNT A
Separate Account A is a separate account of Chubb Life established on August
20, 1984 and now governed by the insurance laws of the State of New Hampshire.
Separate Account A is organized as a unit investment trust registered with the
Commission under the 1940 Act and is subject to that Act's requirements. Such
registration does not involve supervision of the management or investment
policies of Separate Account A or Chubb Life by the Commission. Chubb Life is
the depositor of Separate Account A. Under New Hampshire law, the assets of
Separate Account A are held exclusively for the benefit of policyowners and
persons entitled to payments under this Policy and other variable life
insurance policies funded by Separate Account A. The assets of Separate Account
A are not chargeable with liabilities arising out of any other business which
Chubb Life may conduct.
Chubb Life holds the assets of Separate Account A. These assets are kept
physically segregated and held separate and apart from the General Account.
Chubb Life maintains records of all purchases and redemptions of Funds shares
by each of the divisions.
Divisions. Separate Account A presently has thirteen investment divisions but
may, in the future, add or delete investment divisions. Each investment division
will invest exclusively in shares representing an interest in a Portfolio of the
Funds.
Investment income and other distributions to each division of Separate Account
A arising from the applicable underlying Portfolio of the Funds increases the
assets of the corresponding division of Separate Account A. The income and both
realized and unrealized gains or losses on the assets of each division of
Separate Account A are credited to or charged against that division without
regard to income, gains or losses from any other division. Under certain
unusual circumstances, the liabilities of one division, arising from claims
against that division, could be attributed to another division.
THE FUNDS
Separate Account A invests in shares of Chubb America Fund, Inc., the
Templeton International Fund of Templeton Variable Products Series Fund, the
High Income Portfolio of the Fidelity Variable Insurance Products Fund, the
Contrafund Portfolio of the Fidelity Variable Insurance Products Fund II or the
Index 500 Portfolio of the Fidelity Variable Insurance Products Fund II.
Chubb America Fund, Inc. Chubb America Fund, Inc. is organized as a Maryland
corporation and is registered as an open-end diversified management company
under the 1940 Act. Chubb America Fund, Inc. currently has nine
9
<PAGE>
Portfolios each of which has different objectives. The shares of each series of
Chubb America Fund, Inc. stock are offered only to the divisions of separate
accounts, whether now in existence or to be established by Chubb Life or any of
its affiliated insurance companies. The assets of each Portfolio are maintained
separately from the assets of the other Portfolios and each Portfolio has
investment objectives and policies which are different from those of the other
Portfolios. Thus, each Portfolio operates as a separate investment fund, and
the income, gains or losses of one Portfolio generally has no effect on the
investment performance of any other Portfolio. Under certain unusual
circumstances, the liabilities of one Portfolio, arising from claims against
that Portfolio, could be attributed to another Portfolio.
The investment adviser to Chubb America Fund, Inc. is Chubb Investment
Advisory Corporation ("Chubb Investment Advisory") which is a subsidiary of
Chubb Life. Chubb Investment Advisory has in turn retained Templeton Global
Advisors, Inc. ("Templeton") to provide investment advisory service for the
World Growth Stock Portfolio, Chubb Asset Managers, Inc. ("Chubb Asset") to
provide investment advisory services for the Money Market, Bond and Growth and
Income Portfolios, Van Eck Associates Corporation ("Van Eck Associates") to
provide investment advisory services for the Gold Stock Portfolio, Pioneering
Management Corporation ("Pioneer") to provide investment advisory services for
the Domestic Growth Stock Portfolio, Janus Capital Corporation ("Janus") to
provide investment advisory services for the Capital Growth Portfolio, Phoenix
Investment Counsel, Inc. ("Phoenix") to provide investment advisory services
for the Balanced Portfolio, and Massachusetts Financial Services Company
("MFS") to provide investment advisory services for the Emerging Growth
Portfolio.
Investment management fees are paid to Chubb Investment Advisory monthly at an
annual rate based on a percentage of the average daily net assets of each
Portfolio of Chubb America Fund, Inc. as shown below:
<TABLE>
<CAPTION>
WORLD GROWTH STOCK,
GOLD STOCK,
DOMESTIC GROWTH
STOCK,
MONEY MARKET GROWTH AND INCOME, CAPITAL EMERGING
AVERAGE DAILY NET ASSETS AND BOND AND BALANCED GROWTH GROWTH
- ------------------------ ------------ ------------------- ------- --------
<S> <C> <C> <C> <C>
First $200 Million...... .50% .75% 1.00% .80%
Next $1.1 Billion....... .45% .70% .95% .75%
Over $1.3 Billion....... .40% .65% .90% .70%
</TABLE>
The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of Chubb Investment Advisory and is set forth in the
table below as an annual percentage of the average daily net assets of the
Portfolio managed:
<TABLE>
<CAPTION>
SUB-INVESTMENT MANAGER
-----------------------------------------------------------------------------
CHUBB ASSET
CHUBB ASSET FOR THE
FOR THE BOND AND
GROWTH AND MONEY MARKET VAN ECK
AVERAGE DAILY NET ASSETS INCOME PORTFOLIO JANUS PHOENIX TEMPLETON PORTFOLIOS ASSOCIATES PIONEER MFS
- ------------------------ ---------------- ----- ------- --------- ------------ ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First $200 Million...... .50% .75% .50% .50% .35% .50% .50% .50%
Next $1.1 Billion....... .45% .70% .45% .45% .30% .45% .45% .45%
Over $1.3 Billion....... .40% .65% .40% .40% .25% .40% .40% .40%
</TABLE>
The investment objectives of each Portfolio of Chubb America Fund, Inc. are
set forth below.
World Growth Stock Portfolio: to achieve long-term capital growth through a
policy of investing primarily in stocks of companies organized in the United
States or in any foreign nation. A portion of the Portfolio may also be
invested in debt obligations of companies and governments of any nation. Any
income realized from such investments will be incidental. Such companies will
be those considered by the sub-investment manager to be undervalued or which
are well-managed and have good growth potential.
Money Market Portfolio: to achieve the highest possible current income,
consistent with preservation of capital and maintenance of liquidity, by
investing primarily in short-term money market instruments other than
commercial paper. An investment in the Money Market Portfolio is neither
insured nor guaranteed by the U.S. Government.
Gold Stock Portfolio: to realize long-term capital appreciation, while
retaining the option to take current income into account, by investing
primarily, and sometimes exclusively, in common stocks of gold mining
companies.
10
<PAGE>
Bond Portfolio: to provide a stable level of income, consistent with limiting
risk to principal, by investing primarily in high quality corporate debt
securities and U.S. Government debt obligations.
Domestic Growth Stock Portfolio: to achieve reasonable income and growth of
capital by investing primarily in a diversified portfolio of equity securities
issued by companies organized in the U.S. and considered by the sub-investment
manager to be undervalued in light of the company's earning power and growth
potential.
Growth and Income Portfolio: to seek long-term growth of capital by investing
primarily in a wide range of equity issues that may offer capital appreciation
and, secondarily, to seek a reasonable level of current income.
Capital Growth Portfolio: to seek capital growth. Realization of income is not
a significant investment consideration and any income realized will be
incidental.
Balanced Portfolio: to seek reasonable current income and long-term capital
growth, consistent with conservation of capital, by investing primarily in
common stocks and fixed income securities.
Emerging Growth Portfolio: to seek long-term growth of capital by investing
primarily in common stocks of small and medium-sized companies. THE PORTFOLIO
IS INTENDED FOR INVESTORS WHO UNDERSTAND AND ARE WILLING TO ACCEPT RISKS
ENTAILED IN SEEKING LONG-TERM GROWTH OF CAPITAL.
Chubb America Fund, Inc. may find it necessary to take action to assure that
the Portfolios are diversified so that the Policy is treated as a life
insurance policy under federal tax laws. Chubb America Fund, Inc., for example,
may alter the investment objectives of any Portfolio or take other appropriate
actions. See "OTHER MATTERS--Additions, Deletions or Substitutions of
Investments" and "FEDERAL TAX MATTERS".
Templeton Variable Products Series Fund. Templeton Variable Products Series
Fund is an open-end, diversified management investment company organized under
the laws of Massachusetts. Templeton Variable Products Series Fund currently
consists of five separate series; however, only one of the series, the
Templeton International Fund, offers its shares to a corresponding division of
Separate Account A. Templeton Variable Products Series Fund offers its shares
solely to separate accounts of insurance companies, including companies not
affiliated with Chubb Life, as an investment vehicle for variable life
insurance policies and variable annuity contracts.
The investment manager of Templeton International Fund is Templeton Investment
Counsel, Inc. ("TICI"). TICI is an indirect wholly owned subsidiary of Franklin
Resources, Inc. ("Franklin"). Through its subsidiaries, Franklin is engaged in
various aspects of the financial services industry. As compensation for its
services, TICI is paid a fee which, during the most recent fiscal year,
represented .50% of the average daily net assets of the Templeton International
Fund.
The investment objective of the Templeton International Fund is set forth
below.
Templeton International Fund: to seek long-term capital growth through a
flexible policy of investing in stocks and debt obligations of companies and
governments outside the United States. Any income realized will be incidental.
Although the Templeton International Fund generally invests in common stock, it
may also invest in preferred stocks and certain debt securities such as
convertible bonds which are rated in any category by Standard & Poor's
Corporation or Moody's Investors Service, Inc. or which are unrated by any
rating agency.
Although Chubb Life does not currently foresee any disadvantages to the
policyowners arising out of variable life insurance separate accounts and
variable annuity separate accounts investing in the Templeton Variable Products
Series Fund simultaneously, there is a possibility that a material conflict may
arise between the interest of Separate Account A and one or more of the other
separate accounts investing in the Templeton Variable Products Series Fund. The
Trustees of the Templeton Variable Products Series Fund intend to monitor
events in order to identify any material conflicts and to determine what
action, if any, should be taken in response thereto. Material conflicts could
result from, for example, (i) changes in state insurance laws, (ii) changes in
Federal income tax laws, (iii) changes in the investment management of any
portfolio of Templeton Variable Products Series Fund, or (iv) differences in
voting instructions between those given by variable life insurance policyowners
and those given by variable annuity contract owners.
CHUBB
Fidelity Variable Insurance Products Fund and Fidelity Variable Insurance
Products Fund II. Fidelity Variable Insurance Products Fund ("Fidelity VIP") and
Fidelity Variable Insurance Products Fund II ("Fidelity VIPII") are open-end,
diversified management investment companies organized as Massachusetts business
trusts on November 13, 1981 and March 21, 1988, respectively. Fidelity VIP
currently consists of four separate series; however, only one of the series,
High Income Portfolio, offers its shares to a corresponding division of Separate
Account A. Fidelity VIPII currently consists of five separate series; however,
only two of the series, Contrafund Portfolio and Index 500 Portfolio, offer
their shares to corresponding divisions of Separate Account A. Fidelity VIP and
Fidelity VIPII offer their shares solely to separate accounts of insurance
companies, including companies not affiliated with Chubb Life, as investment
vehicles for variable life insurance policies and variable annuity
contracts.
Fidelity Management & Research Company ("FMR") is the investment manager
of Fidelity VIP and Fidelity VIPII. FMR is the management arm of Fidelity
Investments, a Massachusetts corporation established in 1946. FMR is a
wholly-owned subsidiary of FMR Corp. Through its subsidiaries, FMR is engaged
in various aspects of the financial services industry. Each fund pays a
management fee to FMR for managing its investments and business affairs. Each
fund's management fee is calculated and paid to FMR every month. The fee for
each fund (excluding Money Market and Index 500 Portfolios) is calculated by
adding a group fee rate to an individual fund fee rate, and multiplying the
result by each fund's average net assets. The group fee rate is based on the
average net assets of all the mutual funds advised by FMR. This rate cannot
rise above 0.52% for the Contrafund Portfolio and 0.37% for the High Income
Portfolio, and it drops as total assets under management increase. Index 500
Portfolio pays a monthly management fee to FMR at the annual rate of 0.28% of
the fund's average net assets.
The investment objectives of each Portfolio of Fidelity VIP and Fidelity
VIPII in which Separate Account A invests are set forth below:
High Income Portfolio: seeks a high level of current income by investing
primarily in high yielding, lower-quality fixed income securities, while also
considering growth of capital.
Contrafund Portfolio: seeks long term capital appreciation.
Index 500 Portfolio: seeks investment results that correspond to the total
return of common stocks publicly traded in the United States, as represented by
the S&P 500.
Although Chubb Life does not currently foresee any disadvantages to its
policyowners arising out of variable life insurance separate accounts and
variable annuity separate accounts investing in the Fidelity VIP and Fidelity
VIPII Funds simultaneously, there is a possibility that a material conflict may
arise between the interest of Separate Account A and one or more of the other
separate accounts investing in the Fidelity VIP and Fidelity VIPII Funds. The
Trustees of the Fidelity VIP and Fidelity VIPII Funds intend to monitor events
in order to identify any material conflicts and to determine what action, if
any, should be taken in response thereto. Material conflicts could result from,
for example, (i) changes instate insurance laws, (ii) changes in Federal income
tax laws, (iii) changes in the investment management of any portfolio of
Fidelity VIP and Fidelity VIPII Funds, or (iv) differences in voting
instructions between those given by variable life insurance policyowners and
those given by variable annuity contract owners.
There can be no assurance that any of the Portfolios will achieve its stated
objectives. The specialized nature of each Portfolio gives rise to significant
differences in the relative investment potential and market and financial risks
of each Portfolio. Policyowners should consider the unique features of each
Portfolio before investing in any Portfolio. For more
11
<PAGE>
detailed information concerning each Portfolio, including a description of the
investment risks, reference is made to the prospectuses for the Funds which
accompanies this Prospectus, or the Statements of Additional Information for
the Funds, available on request.
Separate Account A will purchase shares of the Funds at net asset value in
connection with premium payments allocated to the divisions in accordance with
the policyowner's directions and will redeem shares of the Funds to process
transfers, policy loans, surrenders or withdrawals and generally to meet
contract obligations or make adjustments in reserves. The Funds will sell and
redeem its shares at net asset value as of the Date of Receipt by Separate
Account A of premium payments or notifications by a policyowner.
12
<PAGE>
THE POLICY
General. The Policy is designed to provide the policyowner with lifetime in-
surance protection and flexibility in connection with the amount and frequency
of premium payments and the level of life insurance proceeds payable under the
Policy. The policyowner is not required to pay scheduled premiums to keep the
Policy in force but may, subject to certain limitations, vary the frequency and
amount of premium payments. Moreover, subject to certain limitations, the Pol-
icy allows a policyowner to adjust the level of life insurance payable under
the Policy without having to purchase a new Policy by increasing or decreasing
the Specified Amount. Thus, as insurance needs or financial conditions change,
the policyowner has the flexibility to adjust life insurance proceeds and vary
the premium payments. Death benefits are payable under two options as described
in "POLICY BENEFITS AND RIGHTS--Death Benefits".
To purchase a Policy, a completed application must be submitted to Chubb Life
through the agent selling the Policy. Chubb Life will generally not issue Poli-
cies to insure persons older than age 80. Applicants for insurance must furnish
satisfactory evidence of insurability. Distinctions between smokers and
nonsmokers are only made for Insureds age 15 and over. The minimum Specified
Amount for a Policy at issue is $25,000. Chubb Life reserves the right to re-
vise its rules from time to time to specify a different minimum Specified
Amount at issue. If the Specified Amount applied for plus all other insurance
in force which is underwritten by Chubb Life or its affiliates exceeds
$1,250,000, Chubb Life will reinsure all or a portion of the Policy. Acceptance
of an application or revocation of a Policy during the contestable period is
subject to Chubb Life's insurance underwriting rules and Chubb Life may, in its
sole discretion, reject any application or related premium for any good reason
or contest a Policy.
Payment of Premiums. Premiums must be paid to Chubb Life or through an
authorized agent of Chubb Life for forwarding to Chubb Life. In addition, Chubb
Life has instituted administrative procedures whereby premium payments in
response to billing notices are sent directly to Chubb Life's bank. Unlike
traditional insurance contracts, there is no fixed schedule of premium payments
on a Policy either as to the amount or the timing of the payment. A policyowner
may determine, within specified limits, his or her own premium payment
schedule. These limits will be set forth by Chubb Life and will include a
minimum initial premium payment sufficient to keep the policy in force for
three months and may also include limits on the total amount and frequency of
payments in each policy year. No premium payment may be less than $25. In order
to help the policyowner obtain the insurance benefits desired, a Planned
Periodic Premium and Premium Frequency will be stated in each Policy. This
premium will usually be based upon the policyowner's insurance needs, the
policyowner's financial abilities and the current financial climate, in
general, as well as on the Specified Amount of the Policy and the Insured's
age, sex and risk class. The policyowner is not required to pay such premiums
and failure to make any premium payment will not necessarily result in lapse of
the Policy, provided the Policy's cash value, less policy debt, if any, is
sufficient to pay monthly deductions. Conversely, adherence to the schedule of
Planned Periodic Premiums will not assure that the Policy will remain in force.
See "THE POLICY--Policy Lapse."
Premium Limitations. In no event can the total of all premiums paid, both
scheduled and unscheduled, exceed the current maximum premium limitations re-
quired by the Code. The premium limitations under the Policy are imposed in or-
der to comply with present requirements to obtain favorable federal income tax
treatment of the Policy and its death benefit. If at any time a premium is paid
which would result in total premiums exceeding the current maximum premium lim-
itation, Chubb Life will only accept that portion of the premium which will make
total premiums equal the maximum. Any part of the premium in excess of that
amount will be returned and no further premiums will be accepted until al-lowed
by the current maximum premium limitations required by the Code. Also, if, at
any time during the year, a premium has been paid which would result in the
Policy being deemed a modified endowment contract, Chubb Life will so notify the
policyowner and allow the policyowner to request a refund of the excess premium,
or other action, in order to avoid having the Policy be deemed a modified
endowment contract. A policyowner, how-ever, may choose to have the Policy be
deemed a modified endowment contract, and, in that case, Chubb Life will not
refund the premiums. See "FEDERAL TAX MATTERS--Policy Proceeds." Premium
payments less than the minimum amount of $25 will be returned to the
policyowner.
Allocation of Premiums. Premium payments, net of the premium tax charge, plus
interest earned prior to the Allocation Date, will be allocated on the Alloca-
tion Date among the General Account and the divisions of Separate Account A in
accordance with the directions of the policyowner, as contained in the applica-
tion. Prior to the Allocation Date the initial net premium will be deposited in
Chubb Life's General Account. Any other premiums received prior to the Alloca-
tion Date will also be deposited in the General Account. The minimum percentage
of any net premium payment allocated to any division or the General Account is
10%. Allocation percentages must be in whole numbers only. No fractional
percentages will be accepted. The policyowner may change his or her allocation
of future premium payments among the General Account and the divisions of
Separate Account A by written notice to Chubb Life or by telephone provided that
the proper telephone authorization is on file with Chubb Life, without payment
of any fee or penalty.
13
<PAGE>
The allocation of each net premium payment to a division will be determined
first by multiplying the net premium payment by the fraction to be allocated to
each division as the policyowner directs to determine the portion to be
invested in the division. Each portion to be invested in each division is then
divided by the unit value of that particular division. The unit value of each
division will vary to reflect the investment performance of the applicable
underlying Portfolio shares. The unit value will be determined on each
valuation date by multiplying the net asset value of the shares of the
underlying Portfolio held by the division on the preceding valuation date by
the net investment factor for that division for the valuation period then
ended. The net investment factor for each of the divisions is equal to (i) the
asset value per share of the corresponding Portfolio at the end of the
preceding valuation period plus the per share amount of any investment income
and capital gains, realized or unrealized, credited to such assets in the
valuation period for which the net investment factor is being determined, less
capital losses, realized or unrealized, charged against such assets during such
valuation period and less any amount set aside by Chubb Life during the period
as a reserve for taxes attributable to the operation or maintenance of each
division, (ii) divided by the asset value per share of the corresponding
Portfolio at the end of the preceding valuation period and (iii) less a charge
not to exceed .0024657% on a daily basis (.90% on an annual basis) of the value
of the division to compensate Chubb Life for assumption of certain mortality
and expense risks. See "CALCULATION OF ACCUMULATION VALUE--Unit Values".
Applicants should refer to the prospectuses for the Funds which accompany this
Prospectus for a description of how the assets of each Portfolio are valued
since that determination directly affects the unit value of a division and,
therefore, the accumulation value of a Policy.
All valuations in connection with the Policy, e.g., with respect to
determining cash value in connection with policy loans or withdrawals, with
respect to determining accumulation value in connection with transfers or
payment of death benefits, and with respect to determining the value of a
division to be credited to a Policy with each net premium payment, will be made
on the Date of Receipt of the premium or the request for payment, loan,
withdrawal or transfer if such date is a valuation date; otherwise, such
determination will be made on the next succeeding day which is a valuation
date. The date of receipt of a premium payment sent directly to Chubb Life's
bank pursuant to a billing notice will be the date the payment is received at
the bank and the value of any division to which the payment is allocated will
be determined as of such date provided such date is a valuation date;
otherwise, such determination will be made on the next succeeding day which is
a valuation date.
Transfers. Accumulation value may be transferred between the General Account
and the divisions of Separate Account A and among the divisions of Separate
Account A. Transfer requests may be made in writing or by telephone with
appropriate telephone authorization on file at Chubb Life. The total amount
transferred each time must be at least $250 unless a lesser amount constitutes
the entire accumulation value in the General Account or in a division.
Accumulation value transferred from one division or from the General Account
into more than one division, and/or into the General Account, counts as one
transfer. Similarly, transferring accumulation value from more than one
division, and/or the General Account, into one other division or the General
Account, counts as one transfer.
A transfer charge to cover administrative costs will be imposed each time
amounts are transferred and will be deducted on a pro-rata basis from the
division or divisions of Separate Account A or the General Account into which
the amount is transferred. However, no transfer charge will be imposed on the
transfer of the initial net premium payments, plus interest earned, from the
General Account to the divisions of Separate Account A on the allocation date
or on loan repayments. In addition, Chubb Life currently permits 12 transfers
per policy year without imposing a transfer charge. The charge will be the
lesser of $25 or 10% of the amount transferred. Currently, a policyowner may
make up to 20 transfers per policy year; however, Chubb Life reserves the right
to revoke or modify transfer privileges and charges.
As long as any portion of the Policy's accumulation value is allocated to a
division of Separate Account A, the Policy's accumulation value and cash value
will reflect the investment experience of the chosen division(s) of Separate
Account A. The death benefit may also reflect the experience of the chosen
division(s) of Separate Account A.
At any time the policyowner may transfer 100% of the Policy's accumulation
value to the General Account and elect to have all future premium payments
allocated to the General Account. While 100% of the Policy's accumulation value
and all future premium payments are allocated to the General Account, the
minimum period the Policy will be in force will be fixed and guaranteed. The
minimum period will depend on the amount of accumulation value, the Specified
Amount, the sex, the attained age, and rating class of the Insured. The minimum
period will decrease if the policyowner subsequently elects to increase the
Specified Amount, elects to surrender the Policy, or elects to make a
withdrawal. The minimum period will increase if the policyowner elects to
decrease the Specified Amount, additional premium payments are received, or the
Company credits a higher interest rate or charges a lower cost of insurance
rate than those guaranteed for the General Account.
14
<PAGE>
No transfer charge will be imposed for a transfer of all accumulation value in
Separate Account A to the General Account. However, any transfer from the
General Account to the division(s) of Separate Account A will be subject to the
transfer charge, unless it is one of the first 4 transfers in a policy year and
except for the transfer of the initial net premium payments, plus interest
earned, from the General Account and loan repayments.
Chubb Life reserves the right to refuse to accept or to place certain
restrictions on transfers made by third-party agents acting on behalf of
multiple policyowners or made pursuant to market timing services when Chubb
Life determines, in its sole discretion, that such transfers will be
detrimental to the Portfolios and the policyowners as a whole. Such transfers
may cause increased trading and transaction costs, disruption of planned
investment strategies, forced and unplanned portfolio turnover, and lost
opportunity costs, and may subject the Portfolio to large asset swings that
diminishes the Portfolio's ability to provide maximum investment return to all
policyowners.
A feature called Dollar Cost Averaging is available to policyowners under which
a policyowner deposits an amount, subject to a minimum of $3,000, in the Money
Market Division or the General Account and elects to have a specified dollar
amount (the "Periodic Transfer Amount") automatically transferred to one or more
of the divisions on a monthly, quarterly, or semi-annual basis. This feature
allows policyowners to systematically invest in the divisions at various prices
which may be higher or lower than the price a policyowner would pay when
investing the entire amount at one time and at one price. Each Periodic Transfer
Amount is subject to a minimum of $250. A minimum of 10% of the Periodic
Transfer Amount must be transferred to any specified division. These amounts are
subject to change at Chubb Life's discretion. If a transfer would reduce
accumulation value in the Money Market Division or the General Account to less
than the Periodic Transfer Amount, Chubb Life reserves the right to include such
remaining accumulation value in the amount transferred. At the time a policy
owner elects the Dollar Cost Averaging feature, an election is made between
Fixed Amount Dollar Cost Averaging or Continuous Mode Dollar Cost Averaging.
Under Fixed Amount Dollar Cost Averaging, the feature will continue until the
designated Amount has been transferred or the policyowner gives notification
of cancellation of the feature prior to transfer of the entire Designated
Amount. Once the Designated Amount has been transferred, a new Dollar Cost
Averaging election form must be completed if the Policyowner wishes to have
additional money dollar cost averaged. Under Continuous Mode Dollar Cost
Averaging, the feature will continue until the policyowner gives notification of
cancellation of the feature. If the policyowner elects Continuous Mode Dollar
cost Averaging, any amounts deposited into the Repository Account, and not just
the Designated Amount, will be transferred. Dollar Cost Averaging is currently
available at no charge to policyowners. Although Chubb Life reserves the right
to assess a charge, no greater than cost and with 30 days advance notice to
policyowners, it has no present intention to do so.
An Automatic Portfolio Re-Balancing feature is also available to policyowners.
This feature provides a method for re-establishing fixed proportions between
various types of investments on a systematic basis. Under this feature, the
allocation between divisions and the General Account will be automatically re-
adjusted to the desired allocation, subject to a minimum of 5% per division or
General Account, on a quarterly, semi-annual or annual basis.
A policyowner may not elect to have Dollar Cost Averaging and Automatic
Portfolio Re-Balancing at the same time. Transfers and adjustments pursuant to
these features will occur on a Policy's monthly anniversary date in the month
in which the transaction is to take place or the next succeeding business day
if the monthly anniversary date falls on a holiday or a weekend. The applicable
authorization form must be on file at Chubb Life before either feature may
begin. Neither feature guarantees profits nor protects against losses.
Transfers under these features do not count towards the four free transfers or
the twenty transfers currently allowed per year. Chubb Life reserves the right
to modify the terms and conditions of these features upon 30 days advance
notice to policyowners.
Telephone Transfers, Loans and Reallocations. Policyowners and their authorized
representatives may request by telephone transfers of accumulation value or
reallocation of premiums (including allocation changes pursuant to existing
Dollar Cost Averaging and Automatic Portfolio Re-Balancing programs), provided
that the appropriate authorization form is on file with Chubb Life. Chubb Life
may also, in its discretion, permit loans to be made by telephone, provided that
the proper authorization form is on file with Chubb Life. Only the Policyowner
may request loans by telephone. A policyowner must provide Chubb Life with
personal identification information, such as social security number and date of
birth, at the time of such request for verification purposes. Although
procedures have been established that are reasonably designed to reduce the risk
of unauthorized telephone transfers, loan requests or allocation changes, there
still exists some risk. Neither Chubb Life, Chubb Securities Corporation, nor
any of their affiliates are liable for any loss resulting from unauthorized
telephone transfers, loan requests or premium allocation changes if its
procedures have been followed, and a policyowner bears the risk of loss in such
situation.
Policy Lapse. Failure to make a premium payment on a Policy will not
necessarily cause the Policy to lapse. The duration of a Policy depends upon
its cash value. The Policy will remain in force so long as the cash value, less
any outstanding policy debt, is sufficient to pay the monthly deduction. In the
event the cash value, less any outstanding policy debt, is insufficient to pay
the monthly deduction, the policyowner will be given a sixty-one day period
("grace period") within which to make a premium payment to avoid lapse. The
premium required to avoid lapse must be sufficient in amount, after the
deduction of the premium tax charge, to cover the monthly deductions for at
least three policy months. This required premium will be set forth in a written
notice which Chubb Life will send to the policyowner at the beginning of the
grace period. The Policy will continue in force through the grace period, but
if no payment is
15
<PAGE>
forthcoming, the Policy will terminate without value at the end of the grace
period. If the Insured under the Policy dies during the grace period, the death
benefit payable under the Policy will be reduced by the amount of the monthly
deduction due and unpaid and the amount of any outstanding policy debt. In
addition, if the cash value of the Policy at any time should decrease so the
aggregate amount of an outstanding policy debt secured by the Policy exceeds
the cash value shown in the Policy and an additional payment is not made within
sixty-one days of notification by Chubb Life, the Policy will lapse.
Reinstatement. If the Policy lapses, the policyowner may reinstate the Policy.
The terms of the original contract will apply upon reinstatement. The
accumulation value, before payment of the required reinstatement premium, will
equal the accumulation value on the date of termination. The policy year on
reinstatement will be measured from the policy date. An application for
reinstatement may be made any time within five years of lapse, but satisfactory
proof of insurability and payment of a reinstatement premium is required. The
reinstatement premium, after deduction of the premium tax charge, must be
sufficient to cover monthly deductions for three policy months following the
effective date of reinstatement. If a loan was outstanding at the time of
lapse, Chubb Life will require, at the election of the policyowner, repayment
or reinstatement of the loan before permitting reinstatement of the Policy. The
effective date will be the date of approval of the reinstatement application.
Policy "Free Look". The policyowner has a limited right to return a Policy for
cancellation and a full refund of all premiums paid. Chubb Life will cancel the
Policy if it is returned by mail or personal delivery to Chubb Life or to the
agent who sold the Policy, within 10 days after the delivery of the Policy to
the policyowner, within 45 days of the date of the execution of the application
for insurance, or within 10 days after mailing or personal delivery of a Notice
of the Right of Withdrawal, whichever is later. Chubb Life will return to the
policyowner within seven days all payments received on the Policy. Prior to the
allocation date the initial net premium will be deposited in Chubb Life's
General Account; Chubb Life will retain any interest earned if the "free look"
right is exercised.
CHARGES AND DEDUCTIONS
Premium Charges. Upon receipt of each premium payment and before allocation of
the payment among the General Account and divisions of Separate Account A,
Chubb Life will deduct a premium tax charge of 2.5% (which represents an
average of actual premium taxes imposed), unless otherwise required by state
law. This charge may not be increased.
Monthly Deduction. On the first day of each policy month beginning on the
policy date, Chubb Life will deduct from the accumulation value of a Policy an
amount to cover certain charges and expenses incurred in connection with the
Policy. The monthly deduction is intended to compensate Chubb Life for
underwriting and start-up expenses incurred in connection with the issuance of
a Policy, certain administrative expenses, the cost of insurance for the Policy
and any optional benefits added by rider. The amount deducted will be deducted
pro-rata from each of the divisions and the General Account.
The amount of the monthly deduction is equal to (i) the cost of insurance for
the Policy, as described below, and the cost of additional benefits provided by
rider, plus (ii) a monthly administrative charge of $6.00. The monthly
administrative charge may not be increased.
The cost of insurance for the Insured is determined on a monthly basis, and is
determined separately for the initial Specified Amount and each subsequent
increase in the Specified Amount. The monthly current cost of insurance rate is
based on the sex, issue age, policy year, rating class of the Insured, and the
Specified Amount of the Policy. If we assume two Insureds differ only with
regard to one of the above bases, the effect of each of these bases on their
monthly cost of insurance rates would be as follows:
Sex: The cost of insurance rates for males will be greater than or equal
to those for females.
Issue Age: The cost of insurance rate for the younger Insured will be
less than or equal to that for the older Insured.
Policy Year: The current cost of insurance rate will increase as the
policy year increases. For two Insureds with the same sex, rating class,
and attained age the cost of insurance rate for the Insured with the
younger issue age will never exceed, and in some cases will be less than
that for the Insured with the older issue age.
Rating Class: The cost of insurance rates for nonsmokers will be less
than or equal to those for smokers. Cost of insurance rates may also differ
due to the Insured's medical condition, occupation, or avocation.
Specified Amount: The current cost of insurance rates will vary by
Specified Amount, with different rates applying to Specified Amounts under
$100,000, between $100,000 and $249,999, between $250,000 and $999,999
16
<PAGE>
and $1,000,000 and over. Current cost of insurance rates are highest for
Specified Amounts under $100,000, decreasing for each successive Specified
Amount range as noted above.
The cost of insurance is calculated as (i) multiplied by the result of (ii)
minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of Insurance
Rates provision contained in the Policy.
(ii) is the death benefit at the beginning of the policy month divided by
1.0036748, to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4.5% that is applicable to the
General Account portion of the Policy; and
(iii) is the accumulation value at the beginning of the policy month.
If the corridor percentage is applicable, the death benefit used in the
foregoing calculation will reflect the corridor percentage.
A guaranteed monthly deduction adjustment will be calculated on the first
policy anniversary for the second policy year, and on each policy anniversary
thereafter for each respective policy year that follows. The monthly deduction
adjustment will not apply to the first policy year. The adjustment will be an
amount that is added to the accumulation value for each month of the policy year
during which the adjustment is in effect. The adjustment results from a
reduction in Colonial's margin for profit and expenses. The adjustment is
calculated as (i) multiplied by the result of (ii) plus (iii) minus (iv), but
not less than zero, where:
(i) is .000375;
(ii) is the sum of the Policy's accumulation value in each division of
Separate Account A at the beginning of the policy year;
(iii) is the outstanding Type B loan balance at the beginning of the
policy year, and;
(iv) is the Guideline Single Premium at issue, under Section 7702 of the
Internal Revenue Code of 1986, as amended, entitled "Life Insurance
Contract Defined", increased on a pro rata basis for any increase in
Specified Amount.
The adjustment will be allocated among the general account and divisions of
Separate Account A using the same percentages used to allocate net premiums.
The monthly cost of the insurance rate will be determined by Chubb Life based
upon expectations as to future mortality experience, but can never exceed the
rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Policy. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table.
Risk Charge. Chubb Life will also assess a charge on a daily basis against
each division of Separate Account A equal to .90% (on an annual basis) of the
value of the division to compensate Chubb Life for its assumption of certain
mortality and expense risks in connection with the Policy. Specifically, Chubb
Life bears the risk that the total amount of death benefit payable under the
Policy will be greater than anticipated and Chubb Life also assumes the risk
that the actual cost incurred by it to administer the Policy will not be
covered by charges assessed under the Policy.
Surrender Charge. Upon surrender or withdrawal, Chubb Life will assess a
surrender charge. The surrender charge for the initial Specified Amount is
determined by multiplying a surrender factor by the lesser of (1) the premiums
actually received in policy year one; or (2) the "Guideline Annual Premium" as
defined in the rules and regulations under the 1940 Act. The surrender factor
depends on the length of time the policy has been in force, as follows:
<TABLE>
<CAPTION>
POLICY YEAR SURRENDER FACTOR
----------- ----------------
<S> <C>
1-5 .30
6 .25
7 .20
8 .15
9 .10
10 .05
11 and after 0
</TABLE>
Paying less premium in policy year one generally will have the effect of
reducing the surrender charge. However, depending on investment experience,
paying less premium in policy year one may result in an increase in cost of
insurance charges, a reduction in accumulation value and an increased risk that
the Policy will lapse.
17
<PAGE>
An additional surrender charge will be assessed for any increase in the
Specified Amount, other than an increase caused by a change from death benefit
Option I to death benefit Option II. The additional surrender charge is
determined by multiplying a surrender factor by the lesser of (1) or (2),
where:
(1) is A times B divided by C, where:
A is the amount of the increase in the Specified Amount
B is the sum of the cash value just prior to the increase in the
Specified Amount and the total premiums received in the twelve months
just following the increase in the Specified Amount
C is the Specified Amount in effect after the increase in the
Specified Amount
(2) is the "Guideline Annual Premium" for the increase at the attained
age of the Insured on the effective date of the increase in the Specified
Amount.
The surrender factor depends on the length of time the increase has been in
force, as follows:
<TABLE>
<CAPTION>
INCREASE YEAR SURRENDER FACTOR
------------- ----------------
<S> <C>
1-5 .15
6 .125
7 .10
8 .075
9 .05
10 .025
11 and after 0
</TABLE>
The surrender charge in effect at any time is the sum of the surrender charge
for the initial Specified Amount plus the surrender charge for any increase in
the Specified Amount. If the Specified Amount is decreased, the surrender
charge will not decrease.
For a withdrawal, the charge will be proportionately the same as for
surrenders. The charge will be calculated by dividing (a) by (b) and
multiplying the result by (c) where:
(a) is the amount of the cash value withdrawn
(b) is the cash value; and
(c) is the amount of the surrender charge on a surrender.
The surrender charge helps to compensate Chubb Life for the cost of selling the
Policy. The cost includes advertising and the printing of the Prospectus and
sales literature. Also, Chubb Life reimburses Chubb Securities Corporation for
all commissions Chubb Securities Corporation pays to agents. Chubb Life expects
to recover total sales expenses of the Policy over the life of the Policy. To
the extent sales expenses in any one policy year are not recovered by the sales
charge, Chubb Life will cover such expenses from its surplus, which may include
profits, if any, from the mortality and expense risk charge.
Administrative Fees. An administrative fee equal to the lesser of $25 or 10%
of the amount of the transfer is imposed for each transfer among the divisions
of Separate Account A or the General Account, after the first 4 transfers in a
policy year and except for the transfer of the initial net premium payments,
plus interest, from the General Account on the allocation date and loan
repayments. For withdrawals, an administrative fee equal to the lesser of $25
or 2% of the amount withdrawn will be charged. After the policy date, a policy-
owner may request illustrations of benefits and values. Such illustrations are
currently available to policyowners at no charge. Although Chubb Life reserves
the right to assess a charge, no greater than $25 and with advance notice to
policyowners, it has no present intention to do so. All administrative fees,
including those which are part of the monthly deduction, are no greater than the
anticipated expenses of providing such services.
Other Charges. Chubb Life also reserves the right to charge the assets of
each division to provide for any income taxes or other taxes payable by Chubb
Life on the assets attributable to that division. An investment advisory fee is
also imposed against the assets of each Portfolio for services provided by the
Fund's investment manager and sub-investment managers.
POLICY BENEFITS AND RIGHTS
Death Benefits. So long as it remains in force, the Policy provides for the
payment of life insurance proceeds upon the death of the Insured. Proceeds will
be paid to a named beneficiary or contingent beneficiary. One or more
beneficiaries or contingent beneficiaries may be named. Life insurance proceeds
may be paid in a lump sum or under an optional
18
<PAGE>
payment plan. (See "Settlement Options" below.) Proceeds of the Policy will be
reduced by any outstanding policy debt and any due and unpaid charges and
increased by any benefits added by rider. Proceeds that are payable in a lump
sum at the death of the Insured will be increased to include interest as
required by applicable state law. Proceeds will ordinarily be paid within seven
days after Chubb Life receives due proof of death. Also see "Optional Insurance
Benefits--Terminal Illness Accelerated Benefit Rider."
Policyowners designate in the initial application one of two death benefit
options offered under the Policy. The amount of life insurance proceeds payable
under a Policy will depend upon the option in effect at the time of the
Insured's death. Option I emphasizes the impact of investment experience on
accumulation value rather than insurance coverage because the Specified Amount
and the death benefit, generally, remain stable. Under Option I, as
accumulation value increases and the death benefit does not increase, the
amount at risk decreases. Thus, the cost of insurance charges are imposed on a
decreasing amount. Option II emphasizes insurance coverage because favorable
investment experience adds to the accumulation value that provides an addition
to the total death benefit. Under Option II, favorable investment experience
does not reduce the amount at risk upon which cost of insurance charges are
based.
Under Option I, life insurance proceeds will be equal to the greater of the
Specified Amount, or the accumulation value of the Policy at the date of death
multiplied by the corridor percentage, as described below. Under Option II,
life insurance proceeds will be the Specified Amount plus the accumulation
value of the Policy on the date of death. Under Option II, the death benefit
can never be less than the accumulation value on the date of death multiplied
by the corridor percentage.
The corridor percentage depends upon the attained age of the Insured on the
date of death. The corridor percentage for each age is set forth in the
following table:
<TABLE>
<CAPTION>
ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR
AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE
-------- ---------- -------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
40 &
below 250% 52 171% 64 122% 91 104%
41 243 53 164 65 120 92 103
42 236 54 157 66 119 93 102
43 229 55 150 67 118 94 101
44 222 56 146 68 117 95 100
45 215 57 142 69 116
46 209 58 138 70 115
47 203 59 134 71 113
48 197 60 130 72 111
49 191 61 128 73 109
50 185 62 126 74 107
51 178 63 124 75-90 105
</TABLE>
The death benefit option in effect may be changed by sending Chubb Life a
written request for change. If the death benefit option is changed from Option
II to Option I, the Specified Amount will be increased by the Policy's
accumulation value; the effective date of the change will be the date of Chubb
Life's receipt of such request for change. Conversely, if the death benefit
option is changed from Option I to Option II, the Specified Amount will be
decreased by the Policy's accumulation value; the effective date of the change
will be the date of Chubb Life's approval of such request for change.
Evidence of insurability satisfactory to Chubb Life will be required on
a change from Option I to Option II. A change in the benefit option may not be
made if it would result in a Specified Amount which is less than the minimum
Specified Amount of $25,000. A change in benefit options will affect the cost
of insurance.
After a Policy has been in force for one year, the policyowner, under
attained age 85, may adjust the existing insurance coverage by increasing or
decreasing the Specified Amount. The increase or decrease must be at least
$25,000. To make a change, the policyowner must send a written request and the
Policy to Chubb Life. Any change in the Specified Amount will affect a
policyowner's cost of insurance charge. An increase in the Specified Amount
will affect the determination of the amount available for a Type A loan;
decreases in the Specified Amount will not have any such effect. Any increase
in the Specified Amount will become effective on the monthly anniversary date
after the Date of Receipt for the request. Any decrease in Specified Amount
will first apply to coverage provided by the most recent Specified Amount
increase, then to the next most recent increases successively and finally to
the coverage under the original application. By applying decreases in this
manner, savings, generally, may be realized by a policyowner since
19
<PAGE>
additional costs and limitations associated with increases in Specified Amounts
would be eliminated first. To apply for an increase in the Specified Amount, a
supplemental application must be completed and evidence satisfactory to Chubb
Life that the Insured is insurable must be submitted. Any approved increase in
the Specified Amount will become effective on the date shown in the
Supplemental Policy Specifications Page. Such increase will not become
effective, however, if the Policy's cash value is insufficient to cover the
deduction for the cost of the increased insurance for the policy month
following the increase. Such an increase may require a payment or future
increased Planned Periodic Premiums. Policyowners should consult their
insurance advisers regarding the availability of the Primary Insured Term Rider
described below as an alternative way of increasing coverage. See "CHARGES AND
DEDUCTIONS."
Guaranteed Death Benefit. The policyowner may add a Guaranteed Death Benefit
Rider to the Policy under which the death benefit is guaranteed to never be
less than the Specified Amount provided that a cumulative minimum premium
requirement is met. The premium requirement is based on issue age, sex, smoking
status, underwriting class, Specified Amount and death benefit option. If the
Specified Amount is increased, an additional premium, based on attained age,
will be required for such increase. There is a monthly charge for this rider.
See "Optional Insurance Benefits."
Combined Requests. Policyowners may combine requests for changes in the
Specified Amount and the death benefit option and requests for withdrawals. The
requirements and limitations that apply to each change will apply to the
combined transactions, including any required evidence of insurability,
Specified Amount and premium limitations, effectiveness on the monthly
anniversary date following the Date of Receipt of the request, and the
sufficiency of cash value to keep the Policy in force for the month following
the transaction.
The effect of a combined transaction on the cost of insurance, the amount of
the death benefit proceeds and the premium limitations will be the net result
of such effects for each such transaction considered separately. For example,
combining a request for a withdrawal under Option I with a request for an
increase in the Specified Amount will result in a greater amount at risk, an
increase in the cost of insurance and a requirement of evidence of
insurability. Policyowners should consider the net result of a combined
transaction in light of insurance needs, financial circumstances and tax
consequences.
Maturity of the Policy. As long as the Policy remains in force, Chubb Life
will pay the Policy's cash value, less outstanding policy debt, if any, on the
maturity date. Benefits at maturity may be paid in a lump sum or under an
optional payment plan. The maturity date is the date shown in the Policy. To
change the maturity date, a written request and the Policy must be sent to
Chubb Life. The Date of Receipt for any request must be before the maturity
date then in effect. The requested maturity date must be (i) on a policy
anniversary, (ii) at least one year from the Date of Receipt of the request,
(iii) after the tenth policy year and (iv) on or before the policy anniversary
nearest to the Insured's 95th birthday.
Optional Insurance Benefits. Subject to certain requirements, one or more of
the following optional insurance benefits may be added to a Policy by rider.
More detailed information concerning such riders may be obtained from the agent
selling the Policy. Additional riders, developed after the effective date of
this Prospectus, may also be available as optional insurance benefits to the
Policy. The agent selling the Policy should be consulted regarding the
availability of any such additional riders. The cost of any optional insurance
benefits will be deducted as part of the monthly deduction. See "CHARGES AND
DEDUCTIONS."
(a) Children's Term Insurance Rider. This benefit provides increments of
level term insurance on the Insured's children, as defined in the rider. Under
the terms of this rider, Chubb Life will pay the death benefit set forth in the
rider to the proper beneficiary upon receipt of proof of death of the insured
child. Upon receipt of proof of death of the Insured, the Children's Term
Insurance Rider will continue in force under its terms without additional
monthly charges.
(b) Guaranteed Insurability Rider. This benefit provides that the Insured can
purchase additional insurance at certain future dates without evidence of
insurability. Under the terms of the rider, the Insured may, without evidence
of insurability, increase the Specified Amount of the Policy on an option date,
as defined in the rider.
(c) Accidental Death Benefit Rider. This benefit provides additional
insurance if the Insured's death results from an accident, as defined in the
rider.
(d) Waiver of Premium Disability Rider. This benefit provides for the waiver
of monthly deductions while the Insured is totally disabled, as defined in the
rider.
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(e) Exchange of Insured Rider. This benefit provides that the Policy may be
exchanged for a reissued policy on the life of a substitute insured, subject to
the conditions stated in the rider. See "FEDERAL TAX MATTERS."
(f) Terminal Illness Accelerated Benefit Rider. This benefit advances up to
50% of a policy's eligible death benefit, subject to a $250,000 maximum per
insured, if it is medically determined that the insured is terminally ill and
has a life expectancy of six months or less, as defined in the rider. Upon the
payment of the accelerated benefit payment, the amount of the death benefit,
the Specified Amount, the cash value and the accumulation value are reduced by
the same ratio as the requested portion of the death benefit bears to the
original death benefit. Such reduction will be allocated among the General
Account and the divisions of Separate Account A on a pro rata basis. While this
benefit is offered at no additional premium cost or surrender charge, an
actuarial discount as described in the rider, which reflects the early payment
of amounts held under the Policy, will be deducted from the requested portion
of the death benefit. In addition, Chubb Life imposes an administrative expense
charge not to exceed the lesser of the actual cost of administering the
exercise of the rider or $300. Chubb Life will deduct from the requested
portion of the death benefit a prorated portion of any outstanding policy loans
and any premiums which are unpaid within the grace period. Cost of insurance
charges are adjusted to reflect the reduction in the death benefit. Future
charges under the Policy will depend on whether a Waiver of Premium Disability
Rider is in force. The addition of this Rider, or receipt of benefits under it,
may result in certain tax consequences to a Policyowner. See "FEDERAL TAX
MATTERS."
(g) Extension of Maturity Date Rider. This benefit allows the policyowner to
extend the original Maturity Date of the Policy under the terms set forth in
the rider.
(h) Other Insured Term Rider. This benefit provides increments of level term
insurance on the life of an insured other than the Insured under the Policy.
(i) Primary Insured Term Rider. This benefit provides increments of level
term insurance on the life of the Insured under the terms set forth in the
rider. See "FEDERAL TAX MATTERS".
(j) Waiver of Specified Premium Rider. This benefit provides for the payment
by Chubb Life of a specified monthly premium into the Policy while the Insured
is totally disabled, as defined in the rider.
(k) Guaranteed Death Benefit Rider. This benefit guarantees that the Policy
will stay in force with a death benefit equal to the Specified Amount, even if
the cash value less policy debt is not sufficient to pay the monthly deduction,
provided that cumulative premiums paid, less loans and withdrawals, are greater
than or equal to the guaranteed death benefit premium multiplied by the number
of months the policy has been in force. This cumulative premium requirement
must be met at all times for the rider to stay in force. A monthly charge of
$.01 per $1,000 of Specified Amount will be deducted from the Policy's
accumulation value.
(l) Automatic Increase Rider. This rider allows for scheduled annual
increases in Specified Amount of from 1% to 7%, subject to certain limitations
set forth in the rider.
Settlement Options. In addition to a lump sum payment of benefits under the
Policy, any proceeds to be paid under the Policy may be paid in any of four
methods. A settlement option may be designated by notifying Chubb Life in
writing. A lump sum payment of proceeds under the Policy will be made if a
settlement option is not designated. Any amount left with Chubb Life for
payment under an optional payment plan will be transferred to the account of
the beneficiary in the General Account on the date Chubb Life receives written
instructions. During the life of the Insured, the policyowner may select a
plan. If a payment plan has not been chosen at the Insured's death, a
beneficiary can choose a plan. If a beneficiary is changed, the payment plan
selection will no longer be in effect unless the policyowner requests that it
continue. An option may be elected only if the amount of the proceeds is $2,000
or more. Chubb Life reserves the right to change the interval of payments to 3,
6 or 12 months, if necessary, to increase the guaranteed payments to at least
$20 each.
OPTION A.
Installments of a specified amount. Payments of an agreed amount to be made
each month until the proceeds and interest are exhausted.
OPTION B.
Installments for a specified period. Payments to be made each month for an
agreed number of years.
OPTION C.
Life income. Payments to be made each month for the lifetime of the payee. It
is guaranteed that payments will be made for a minimum of 10, 15 or 20 years,
as agreed upon.
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OPTION D.
Interest. Payment of interest on the proceeds held by Chubb Life calculated
at the compound rate of 3% per year. Interest payments will be made at 12, 6,
3 or 1 month intervals, as agreed upon.
The interest rate for Options A, B, and D will not be less than 3% per year.
The interest rate for Option C will not be less than 2 1/2% per year. Interest
in addition to that stated may be paid or credited from time to time under any
option, but only in the sole discretion of Chubb Life.
Unless otherwise stated in the election of an option, the payee of policy
benefits shall have the right to receive the withdrawal value under that
option. For Options A and D, the withdrawal value shall be any unpaid balance
of proceeds plus accrued interest. For Option B, the withdrawal value shall be
the commuted value of the remaining payments. Such value will be calculated on
the same basis as the original payments. For Option C, the withdrawal value
will be the commuted value of the remaining payments. Such value will be
calculated on the same basis as the original payments. To receive this value,
the payee must submit evidence of insurability acceptable to Chubb Life.
Otherwise, the withdrawal value shall be the commuted value of any remaining
guaranteed payments. If the payee should be alive at the end of the guaranteed
period, the payment will be resumed on that date. The payment will then
continue for the lifetime of the payee.
If a payee of policy benefits dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the
estate of the last surviving payee. The amount to be paid will be calculated
as described for the applicable option in the Withdrawal Value provision of
the Policy.
CALCULATION OF ACCUMULATION VALUE
The Policy provides for an accumulation value, which will be determined on a
daily basis. Accumulation value is the sum of the values in the divisions of
Separate Account A plus the value in the General Account. The Policy's
accumulation value in the divisions of Separate Account A is calculated by
units and unit values under the Policies, as described below. The Policy's
accumulation value will reflect a number of factors, including the investment
experience of the divisions of Separate Account A that are invested in the
Portfolios, any additional net premiums paid, any withdrawals, any policy
loans, and any charges assessed in connection with the Policy. Accumulation
values in Separate Account A are not guaranteed as to dollar amount.
On the allocation date, the accumulation value in Separate Account A is the
initial premium payments, reduced by the premium tax charge, plus interest
earned prior to the allocation date, and less the monthly deduction for the
first policy month. On the allocation date, the initial number of units
credited to Separate Account A for the Policy will be established. At the end
of each valuation period thereafter, the accumulation value in a division of
Separate Account A is (i) plus (ii) plus (iii) minus (iv) minus (v) where:
(i) is the accumulation value in the division on the preceding valuation
date multiplied by the net investment factor, as described below, for the
current valuation period,
(ii) is any net premium received during the current valuation period
which is allocated to the division,
(iii) is all accumulation values transferred to the division from another
division or the General Account during the current valuation period,
(iv) is all accumulation values transferred from the division to another
divison or the General Account and accumulation values transferred to
secure a policy debt during the current valuation period, and
(v) is all withdrawals from the division during the current valuation
period.
In addition, whenever a valuation period includes the monthly anniversary
date, the accumulation value at the end of such period is reduced by the
portion of the monthly deduction allocated to the division.
The Policy's total accumulation value in Separate Account A equals the sum
of the Policy's accumulation value in each divison thereof.
Unit Values. Units are credited to a policyowner upon allocation of net
premiums to a division. Each net premium payment allocated to a division will
increase the number of units in that division. Both full and fractional units
are credited. The number of units and fractional units is determined by
dividing the net premium payment by the unit value
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of the division to which the payment has been allocated. The unit value of each
division is determined on each valuation date. The number of units credited
will not change because of subsequent changes in unit value. The dollar value
of each division's units will vary depending upon the investment performance of
the corresponding Portfolio of the Fund.
Certain transactions affect the number of units in a division under a Policy.
Loans, surrenders and withdrawals, withdrawal and transfer fees and charges,
the surrender charge, and monthly deductions involve the redemption of units
and will decrease the number of units. Transfers of accumulation value among
divisions will reduce or increase the number of units in a division, as
appropriate.
The unit value of each division's units initially under the Policies was
$10.00. Thereafter, the unit value of a division on any valuation date is
calculated by multiplying (1) by (2) where:
(1) is the division's unit value on the previous valuation date; and
(2) is the net investment factor for the valuation period then ended.
The unit value of each division's units on any day other than a valuation
date is the unit value as of the next valuation date and is used for the
purpose of processing transactions.
Net Investment Factor. The net investment factor measures the investment
experience of each division of Separate Account A and is used to determine
changes in unit value from one valuation period to the next valuation period.
The net investment factor for a valuation period is (i) divided by (ii) minus
(iii) where:
(i) is (a) the value of the assets of the division at the end of the
preceding valuation period, plus (b) the investment income and capital
gains, realized or unrealized, credited to the assets of the division
during the valuation period for which the net investment factor is being
determined, minus (c) capital losses, realized or unrealized, charged
against those assets during the valuation period, minus (d) any amount
charged against the division for taxes or any amount set aside during the
valuation period by Chubb Life to provide for taxes attributable to the
operation or maintenance of that division, and
(ii) is the value of the assets of the division at the end of the
preceding valuation period, and
(iii) is a charge no greater than .0024657% on a daily basis. This
corresponds to .90% on an annual basis for mortality and expense risks.
CASH VALUE BENEFITS
So long as it remains in force, the Policy provides for certain benefits
prior to the maturity date. Subject to certain limitations, the policyowner may
at any time obtain cash value by surrendering the Policy or making withdrawals
from the Policy. The cash value equals the accumulation value less any surren-
der charge. In addition, the policyowner has certain policy loan privileges un-
der the Policy.
Surrender Privileges. As long as the Policy is in force, a policyowner may
surrender the Policy or make a withdrawal from the Policy at any time by send-
ing a written request to Chubb Life. See "FEDERAL TAX MATTERS--Policy Proceeds."
The surrender value of the Policy equals the cash value less any outstanding
policy debt. The surrender value will be determined at the end of the valuation
period during which the request for a surrender or withdrawal is received. Pro-
ceeds will generally be paid within seven days of the Date of Receipt of a re-
quest for surrender or withdrawal.
The amount payable upon surrender of the Policy is the surrender value at the
end of the valuation period during which the request is received. The surrender
value may be paid in a lump sum, within seven days of the Date of Receipt of
the request, or under one of the optional payment plans specified in the Poli-
cy. See "POLICY BENEFITS AND RIGHTS--Settlement Options."
A policyowner can obtain a portion of the Policy's cash value by withdrawal
of cash value from the Policy. A withdrawal from a Policy is subject to the
following conditions:
A. The amount withdrawn may not exceed the cash value less any
outstanding debt.
B. The minimum amount that may be withdrawn is $750.
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C. A charge equal to the lesser of $25 or 2% of the amount of the
withdrawal will be deducted from the amount of each withdrawal.
Withdrawals generally will affect the Policy's accumulation value, cash value
and the life insurance proceeds payable under the Policy. The Policy's cash
value will be reduced by the amount of the withdrawal. The Policy's accumula-
tion value will be reduced by the amount of the withdrawal plus a pro-rata sur-
render charge. Life insurance proceeds payable under the Policy will generally
be reduced by the amount of the withdrawal plus a pro-rata surrender charge,
unless the withdrawal is combined with a request to maintain or increase the
Specified Amount. See "POLICY BENEFITS AND RIGHTS--Combined Requests."
Under Option I, which provides for life insurance proceeds equal to the
greater of the Specified Amount or the accumulation value of the Policy at the
date of death multiplied by the corridor percentage provided by the Code, the
Specified Amount will be reduced by the amount of the withdrawal plus the pro-
rata surrender charge. The Specified Amount remaining after a withdrawal may
not be less than $10,000. As a result, Chubb Life will not effectuate any
withdrawal that would reduce the Specified Amount below this minimum. If
increases in Specified Amount previously have occurred, a withdrawal will first
reduce the Specified Amount of the most recent increase, then the most recent
increases successively, then the coverage under the original application. If
the life insurance proceeds payable under either death benefit option, both
before and after the withdrawal, is the accumulation value multiplied by the
corridor percentage, a withdrawal generally will result in a reduction in life
insurance proceeds equal to the amount paid upon withdrawal, multiplied by the
corridor percentage then in effect.
Under Option II, which provides for life insurance proceeds equal to the
Specified Amount plus accumulation value, a reduction in accumulation value as
a result of a withdrawal will typically result in a dollar per dollar reduction
in the life insurance proceeds payable under the Policy.
A policyowner may allocate a withdrawal among the General Account and the
divisions of Separate Account A. If no such allocation is made, a withdrawal
will be allocated among the General Account and the divisions of Separate
Account A in the same proportion that the accumulation value in the General
Account, less any policy debt, and the accumulation value in each division
bears to the total accumulation value of the Policy, less any policy debt, on
the date of withdrawal. See "FEDERAL TAX MATTERS--Policy Proceeds."
Policy Loans. So long as the Policy remains in force, a policyowner may
borrow money from Chubb Life at any time after the first policy anniversary
using the Policy as the only security for the loan. Loans have priority over
the claims of any assignee or any other person. Generally, the maximum loan
amount is 90% of the cash value at the end of the valuation period during which
the loan request is received. The maximum amount which may be borrowed at any
given time is the maximum loan amount reduced by any outstanding policy debt.
Proceeds of policy loans ordinarily will be disbursed within seven days from
the Date of Receipt of a request for a loan by Chubb Life, although payments
may be postponed under certain circumstances. See "OTHER MATTERS--Postponement
of Payments". Chubb Life may, in its discretion, permit loans to be made by
telephone if the proper authorization form is on file with Chubb Life. So long
as the Policy remains in force, the loan may be repaid in whole or in part
without penalty at any time while the Insured is living.
When a policy loan is made, a portion of the Policy's accumulation value
sufficient to secure the loan will be transferred to the General Account. A
policy loan removes the proceeds from the investment experience of Separate
Account A which will have a permanent effect on the accumulation value and
death benefit even if the loan is repaid. Any loan interest that is due and
unpaid will also be so transferred. Accumulation value equal to policy debt in
the General Account will accrue interest daily at the lesser of an annual rate
of 6% or the interest rate currently credited to the General Account. As an
administrative practice and in Chubb Life's sole discretion, if the interest
rate currently credited to the General Account falls below 6%, the accumulation
value held in the General Account for loan collateral may continue to earn
interest at 6%. The policyowner may allocate a policy loan among the General
Account and the divisions of Separate Account A. If no such allocation is made
the loan will be allocated among the General Account and divisions of Separate
Account A in the same proportion that the accumulation value in the General
Account less policy debt and the accumulation value in each division bears to
the total accumulation value of the Policy, less policy debt, on the date of
the loan.
Chubb Life will charge interest on any outstanding policy loan. The maximum
interest rate on policy loans is 8%, compounded annually. There are two types
of loans available. A Type A loan is charged the same interest rate as the
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interest credited to the amount of accumulation value held in the General
Account to secure loans. The amount available at any time for a Type A loan
equals the maximum loan amount less the DEFRA Guideline Single Premium
("DGSP"), as set forth in the Code, less any outstanding Type A loans. Any
other loans are Type B loans; a Type B loan is charged the prevailing interest
rate, but not more than the maximum. It is possible for one loan request to
result in both a Type A and a Type B loan. A request for a loan will be granted
first as a Type A loan, to the extent available, and then as a Type B loan.
Once a policy loan is granted, it remains a Type A or Type B until it is
repaid. Increases in the Specified Amount will affect the determination of the
amount available for a Type A loan; however, decreases in the Specified Amount
will not have any such effect.
Chubb Life may, in its sole discretion, charge lower interest rates in the
future. If the loan interest rate is ever less than 8%, Chubb Life can increase
the rate once each policy year but by not more than 1% per year. With respect
to outstanding policy loans, Chubb Life will send notice of any change in the
interest rate to the policyowner and any assignee of record at Chubb Life at
least 30 days before the effective date of the increase. The effective date of
any increase in such interest rate shall not be less than twelve months after
the effective date of the establishment of the previous rate. Interest is due
and payable at the end of each policy year, and any interest not paid when due
becomes loan principal.
Where applicable, loans are subject to conditions and requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the terms
of any retirement plan in connection with which the Policy has been purchased.
The ERISA rules relating to loans are complex and vary depending on the
individual circumstances of each Policy. Employers and policyowners should
consult with qualified advisers before exercising the loan privileges.
Policy debt equals the total of all outstanding policy loans and accrued
interest on policy loans. If policy debt exceeds cash value, Chubb Life will
notify the policyowner and any assignee of record. A payment at least equal to
the amount of excess policy debt above the cash value must be made to Chubb
Life within 61 days from the date the notice is mailed, otherwise, the Policy
will lapse and terminate without value. The Policy may, however, later be
reinstated, subject to satisfactory proof of insurability and the payment of a
reinstatement premium. See "THE POLICY--Reinstatement".
So long as the Policy remains in force, policy debt may be repaid in whole or
in part at any time during the Insured's life. If there is any existing policy
debt, premium payments in the amount of the Planned Periodic Premium, received
at the Premium Frequency, will be applied as premium. Premium payments in
excess of the Planned Periodic Premium or premium payments received other than
at the Premium Frequency, will first be applied as policy loan repayments, then
as premium when the policy debt is repaid. For policyowners with both Type A
and Type B loans, repayments of the loan will be applied first to Type B loans
and then to Type A loans. Upon repayment, the Policy's accumulation value
securing the repaid portion of the debt in the General Account will be
transferred to the General Account and the divisions of Separate Account A
using the same percentages used to allocate net premiums. A policyowner may
make loan prepayments on a pre-authorized check basis. Any outstanding policy
debt is subtracted from life insurance proceeds payable at the Insured's death,
from accumulation value upon surrender, and from cash value payable at
maturity. In the event that the Policy lapses due to insufficient cash value
resulting from loans, the policyowner may be taxed on the total appreciation
under the Policy.
OTHER MATTERS
Voting Rights. To the extent required by law, Chubb Life will vote the Funds'
shares held in the various divisions of Separate Account A at regular and
special shareholder meetings of the Funds in accordance with instructions
received from persons having voting interests in Separate Account A. If,
however, the 1940 Act or any regulation thereunder should be amended or if the
present interpretation thereof should change and, as a result, Chubb Life
determines that it is permissible to vote the Funds' shares in its own right,
it may elect to do so. The number of votes on which each policyowner has the
right to instruct will be determined by dividing the Policy's accumulation
value in a division of Separate Account A by the net asset value per share of
the corresponding Portfolio in which the division invests, or as otherwise
required by law. Fractional shares will be counted. The number of votes on
which the policyowner has the right to instruct will be determined as of the
date coincident with the date established by the Funds for determining
shareholders eligible to vote at the meeting of the Funds. Voting instructions
will be solicited by written communications prior to such meeting in accordance
with procedures established by the Funds. Chubb Life will vote the Funds'
shares as to which no instructions are received in proportion to the voting
instructions which are received with respect to all Policies participating in
the Funds in accordance with applicable law. Each person having a voting
interest will receive proxy material, reports and other materials relating to
the Funds. The shares held by Chubb Life, including shares for
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which no voting instructions have been received, shares held in Separate
Account A representing charges imposed by Chubb Life against Separate Account A
under the Policies and shares held by Chubb Life that are not otherwise
attributable to Policies, will also be voted by Chubb Life in proportion to
instructions received from the owners of variable life insurance policies
funded through Separate Account A. Chubb Life reserves the right to vote any or
all such shares at its discretion to the extent consistent with then current
interpretations of the 1940 Act and rules thereunder.
Chubb Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that shares be voted
so as to cause a change in subclassification or investment objective of the
Funds or disapprove an investment advisory contract of the Funds. In addition,
Chubb Life may disregard voting instructions in favor of changes initiated by a
policyowner in the investment policy or the investment adviser of the Funds if
Chubb Life reasonably disapproves of such changes. A change would be
disapproved only if the proposed change is contrary to state law or prohibited
by state regulatory authorities or Chubb Life determined that the change would
be inconsistent with the investment objectives of Separate Account A or would
result in the purchase of securities for Separate Account A which vary from the
general quality and nature of investments and investment techniques utilized by
other separate accounts created by Chubb Life or any affiliate of Chubb Life
which have similar investment objectives. In the event that Chubb Life does
disregard voting instructions, a summary of that action and the reason for such
actions will be included in the next semi-annual report to the policyowner.
Additions, Deletions or Substitutions of Investments. Chubb Life reserves the
right, subject to compliance with applicable law, to make additions to,
deletions from, or substitutions for the shares held by any division or which
any division may purchase. If shares of the Funds should no longer be available
for investment or if, in the judgment of Chubb Life's management, further
investment in shares of the Funds should become inappropriate in view of the
purposes of the Policy, Chubb Life may substitute shares of any other
investment company for shares already purchased, or to be purchased in the
future under the Policies. No substitution of securities will take place
without notice to and consent of policyowners and without prior approval of the
Commission, all to the extent required by the 1940 Act. Any surrender due to a
change in the Portfolio's investment policy will incur any applicable surrender
charges.
Each class of the Funds' stock is subject to certain investment restrictions
which may not be changed without the approval of the majority of the holders of
such series. See the accompanying prospectuses for the Funds.
Annual Summary. Each year a summary will be sent to the policyowner which
shows the current accumulation value, cash value, premiums paid and all charges
since the last annual summary as well as the balance of outstanding policy
loans. Chubb Life will also send to the policyowner the reports required by the
1940 Act.
Confirmation. Confirmation notices (or other appropriate notification) will
be mailed promptly at the time of the following transactions:
(1) policy issue;
(2) receipt of premium payments;
(3) initial allocation among divisions on the allocation date;
(4) transfers among divisions;
(5) change of premium allocation;
(6) change between Option I and Option II;
(7) increases or decreases in Specified Amount;
(8) withdrawals;
(9) receipt of loan repayments; and
(10) reinstatements.
Limitation on Right to Contest. Chubb Life will not contest or revoke the
insurance coverage provided under the Policy, except for any subsequent
increase in Specified Amount, after the Policy has been in force during the
lifetime of the Insured for a period of two years from the policy date. This
provision does not apply to any benefits provided by a rider which grants
disability benefits or an added benefit in the event that death results from an
accident. Any increase in the Specified Amount will not be contested after such
increase has been in force during the lifetime of the Insured for two years
following the effective date of the increase. Any increase will be contestable
within the two year period only with regard to statements concerning the
increase.
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Misstatements. If the age or sex of the Insured has been misstated in an
application, including a reinstatement application, the amount payable under
the Policy by reason of the death of the Insured will be equal to the sum of
the following:
1. The accumulation value on the date of death less any policy debt; and
2. The death benefit, less the accumulation value on the date of death,
multiplied by the ratio of (a) the cost of insurance actually deducted at
the beginning of the policy month in which the death occurs to (b) the cost
of insurance that should have been deducted at the Insured's true age or
sex.
Suicide. The Policy does not cover the risk of suicide within two years from
the policy date or two years from the date of any increase in Specified Amount
with respect to such increase, whether the Insured is sane or insane, unless
otherwise specified by state law. In the event of suicide within two years of
the policy date, the only liability of Chubb Life will be a refund of premiums
paid, without interest, less any policy debt and less any withdrawal. In the
event of suicide within two years of an increase in Specified Amount, the only
liability of Chubb Life will be a refund of the cost of insurance for such
increase, plus death benefits payable without regard to suicide, if any.
Beneficiaries. The original beneficiaries and contingent beneficiaries are
designated by the policyowner on the application. If changed, the primary
beneficiary or contingent beneficiary is as shown in the latest change filed
with Chubb Life. One or more primary or contingent beneficiaries may be named
in the application. In such case, the proceeds of the Policy will be paid in
equal shares to the survivors in the appropriate beneficiary class unless
requested otherwise by the policyowner.
Postponement of Payments. Payment of any amount upon surrender, withdrawal,
policy loan, or benefits payable at death or maturity may be postponed
whenever: (i) the New York Stock Exchange is closed other than customary week-
end and holiday closings, or trading on the New York Stock Exchange is
restricted as determined by the Commission; (ii) the Commission by order
permits postponement for the protection of policyowners; or (iii) an emergency
exists, as determined by the Commission, as a result of which disposal of
securities is not reasonably practicable or it is not reasonably practicable to
determine the value of net assets in Separate Account A.
Assignment. The Policy can be assigned as collateral security. Chubb Life
must be notified in writing if the Policy has been assigned. Each assignment
will be subject to any payments made or action taken by Chubb Life prior to its
notification of such assignment. Chubb Life is not responsible for the validity
of an assignment. A policyowner's rights and the rights of the beneficiary may
be affected by an assignment.
Illustration of Benefits and Values. The policyowner may request
illustrations of death benefits, accumulation values and cash values at any
time after the policy date. Illustrations will be based on the existing
accumulation value and cash value at the time of the request and both the
maximum and the then current costs of insurance rates. After the policy date, a
policyowner may request illustrations of benefits and values. Such
illustrations are currently available to policyowners at no charge. Although
Chubb Life reserves the right to assess a charge, no greater than $25 and with
advance notice to policyowners, it has no present intention to do so. See
"CHARGES AND DEDUCTIONS--Administrative Fees."
Non-Participating Policy. The Policy does not share in any surplus
distributions of Chubb Life. No dividends are payable with respect to the
Policy.
THE GENERAL ACCOUNT
POLICYOWNERS MAY ALLOCATE NET PREMIUMS AND TRANSFER ACCUMULATION VALUE TO THE
GENERAL ACCOUNT. BECAUSE OF EXEMPTIVE AND EXCLUSIONARY PROVISIONS, INTERESTS IN
THE GENERAL ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND THE GENERAL ACCOUNT HAS NOT BEEN REGISTERED AS AN INVESTMENT COMPANY UNDER
THE 1940 ACT. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS
THEREIN ARE SUBJECT TO THE PROVISIONS OF THESE ACTS, AND CHUBB LIFE HAS BEEN
ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
REVIEWED THE DISCLOSURES IN THIS PROSPECTUS RELATING TO THE GENERAL ACCOUNT.
DISCLOSURES REGARDING THE GENERAL ACCOUNT MAY, HOWEVER, BE SUBJECT TO CERTAIN
GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE
ACCURACY AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.
General Description. The General Account consists of all assets owned by
Chubb Life other than those in Separate Account A and other separate accounts
which may be established by Chubb Life. Subject to applicable law, Chubb Life
has sole discretion over the investment of the assets of the General Account.
27
<PAGE>
A policyowner may elect to allocate net premiums to the General Account or
to transfer accumulation value to or from the divisions of Separate Account A
and the General Account. The allocation or transfer of funds to the General
Account does not entitle a policyowner to share in the investment experience
of the General Account. Instead, Chubb Life guarantees that accumulation value
in the General Account will accrue interest daily at an effective annual rate
of at least 4 1/2%, independent of the actual investment experience of the
General Account. Chubb Life is not obligated to credit interest at any higher
rate, although Chubb Life may, in its sole discretion, do so.
If the Date of Receipt of the initial premium is prior to the date Chubb
Life either issues the Policy or offers to issue the Policy on a basis other
than as applied for, that initial net premium, less any monthly deductions,
will be credited with interest at the rate currently being credited to the
General Account. This amount will be credited with interest for the period be-
tween the date the premium is received (or the policy date, whichever is lat-
er) and the date Chubb Life issues the Policy or the applicant refuses Chubb
Life's offer to issue the Policy on a basis other than as applied for. No in-
terest will be credited for the above period if the initial premium is less
than $500. In those instances when Chubb Life declines to issue a Policy, the
entire premium paid, if greater than $500, will be returned with interest; in-
terest will be credited from the Date of Receipt to the date the application
is rejected. No interest will be credited for such initial premiums if the
Policy issued as applied for is not accepted or the "free look" is exercised;
Chubb Life will retain any interest earned.
The Policy. This Prospectus describes a flexible premium variable life in-
surance policy. Net premiums may be allocated to the General Account or to
Separate Account A or to both. This Prospectus is generally intended to serve
as a disclosure document for the aspects of the Policy involving Separate Ac-
count A. For more information regarding the General Account, see the Policy
itself, or discuss the Policy with your insurance agent.
General Account Benefits. If the policyowner pays the same premiums as
scheduled, allocates all net premiums only to the General Account and makes no
transfers, withdrawals, or policy loans, the minimum amount and duration of
the death benefit will be fixed and guaranteed. The policyowner may select ei-
ther death benefit Option I or II under the Policy and may change the Policy's
Specified Amount subject to satisfactory evidence of insurability, if re-
quired.
General Account Accumulation Value. Net premiums allocated to the General
Account are credited to the Policy. Prior to the allocation date, the initial
net premium is deposited in the General Account, and those net premiums are
credited to the Policy. On the allocation date the initial net premium pay-
ments deposited in the General Account, plus interest earned, will be allo-
cated among the divisions of Separate Account A and the General Account as in-
structed by the policyowner in the application. The accumulation value in the
General Account on the allocation date is equal to the portion of the net pre-
mium payments, plus interest earned, which have been paid and allocated to the
General Account, less the portion of the first monthly deduction allocated to
the General Account.
Chubb Life guarantees that interest credited to each policyowner's accumula-
tion value in the General Account will not be less than an effective annual
rate of at least 4 1/2% per year. Chubb Life may, IN ITS SOLE DISCRETION,
credit a higher rate of interest, although it is not obligated to credit in-
terest in excess of 4 1/2% per year, and might not do so. ANY INTEREST CRED-
ITED ON THE POLICY'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN EXCESS OF
THE GUARANTEED RATE OF 4 1/2% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRE-
TION OF CHUBB LIFE. THE POLICYOWNER ASSUMES THE RISK THAT INTEREST CREDITED
MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4 1/2% PER YEAR. Accumulation
value in the General Account that equals indebtedness will be credited inter-
est daily at the lesser of an effective annual rate of 6% per year or the in-
terest rate currently credited to the General Account. The accumulation value
in the General Account will be calculated on each monthly anniversary date of
the Policy, or on any other date with consistent adjustments.
Chubb Life guarantees that, at any time prior to the maturity date, the ac-
cumulation value in the General Account will not be less than the amount of
the net premiums allocated or accumulation value transferred to the General
Account, plus interest at the rate of 4 1/2% per year, plus any excess inter-
est which Chubb Life credits and any amounts transferred into the General Ac-
count, less the sum of all charges allocable to the General Account and any
amounts deducted from the General Account in connection with withdrawals or
transfers to Separate Account A.
Determination of Charges. The portion of the monthly deduction attributable
to the General Account will be determined as of the actual monthly anniversary
date, even if the monthly anniversary date does not fall on a valuation date.
Premium Deposit Fund. As a convenience to policyowners, Chubb Life permits
policyowners to deposit funds in a premium deposit fund ("PDF"), subject to
the terms and conditions of the appropriate agreement. Funds deposited in
28
<PAGE>
the PDF earn interest at a minimum annual rate of 4%, with interest credited on
each monthly anniversary date. Interest on these funds is not tax deferred and
will be annually reported on Form 1099 to the policyowner. An amount equal to
the Planned Periodic Premium will be transferred on the policy date to pay
premiums on the policy. Policyowners may withdraw all or part of the funds from
the PDF at any time. No commissions are earned or paid until premium payments
are made pursuant to transfers from the PDF.
DISTRIBUTION OF THE POLICY
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for Chubb Life, are also registered representatives of
Chubb Securities Corporation, the principal underwriter of the policies, or of
broker-dealers who have entered into written sales agreements with the princi-
pal underwriter. Chubb Securities Corporation is a New Hampshire corporation
organized in 1969. Chubb Securities Corporation is registered with the Securi-
ties and Exchange Commission under the Securities and Exchange Act of 1934 as a
broker-dealer and is a member of the National Association of Securities Deal-
ers, Inc. Commissions are payable under two alternate commission schedules. Un-
der the first schedule, commissions, including bonuses, can range up to 80% of
first year gross premiums, 19% of second year gross premiums, 14% of gross pre-
miums for the third through the fifth policy years, 10% of gross premiums for
the sixth through the tenth policy years and 4% of gross premiums for the elev-
enth through the fifteenth policy years. Under this schedule no commissions are
paid after the fifteenth policy year. Under the second schedule, commissions,
including bonuses, can range up to 80% of first year gross premiums, 18% of
second year gross premiums, 13% of gross premiums for the third through the
fifth policy years, 9% of gross premiums for the sixth through the tenth policy
years and .25% of accumulation value for the eleventh policy year and thereaf-
ter. These commissions include amounts paid to agents writing the Policy and
district managers.
The Distribution Agreement with Chubb Securities Corporation took effect on
February 27, 1985, was amended for technical reasons on January 24, 1989, and
continues until terminated by either party on 60 days notice. Chubb Securities
Corporation is not obligated to sell any specified amount of Policies and may
not assign its responsibilities under the Distribution Agreement. The aggregate
amounts paid to Chubb Securities Corporation under the Distribution Agreement
were $15,333,468 in 1995, $15,190,893 in 1994 and $8,838,510 in 1993. Chubb Life
reimburses Chubb Securities Corporation for its expenses under the Distribution
Agreement.
Chubb Securities Corporation is engaged in the sale and distribution of vari-
ous other securities, including other flexible premium variable life policies.
It acts as principal underwriter for other flexible premium variable life poli-
cies and variable annuity contracts issued by Chubb Life (and its affiliated
insurance companies), and for the Chubb America Fund, Inc. and the Chubb In-
vestment Funds, Inc. mutual funds. It sells a number of mutual fund shares as
well as shares of other securities and limited partnership interests in both
public and private limited partnerships. Mutual fund shares available for sale
by Chubb Securities Corporation are sold pursuant to non-exclusive selling
agreements with the distributors of the mutual funds.
The Policies may also be sold through other broker-dealers that enter into
agreements with Chubb Securities Corporation for this purpose. Any such broker-
dealers will be registered under the Securities Exchange Act of 1934 and their
representatives selling the Policies will be authorized under applicable insur-
ance laws and regulations to sell insurance products of this type. It is not
expected that the compensation paid by Chubb Life in connection with such sales
will exceed that described above for sales by Chubb Securities Corporation's
registered representatives.
Group or Sponsored Arrangements. Policies may be purchased under group or
sponsored arrangements, as well as on an individual basis. A "group arrange-
ment" includes a program under which a trustee, employer or similar entity pur-
chases individual Policies covering a group of individuals on a group basis.
Examples of such arrangements are employer-sponsored benefit plans and deferred
compensation plans. A "sponsored arrangement" includes a program under which an
employer permits group solicitation of its employees or an association permits
group solicitation of its members for the purchase of Policies on an individual
basis. A group or sponsored arrangement may also include certain programs under
which Policies are issued to current and retired employees (and certain members
of their families) of Chubb Life and its affiliates.
29
<PAGE>
Chubb Life may reduce the following types of charges for Policies issued in
connection with group or sponsored arrangements: the cost of insurance charge,
surrender or withdrawal charges, administrative charges, charges for withdrawal
or transfer, the guaranteed death benefit charge and charges for optional rider
benefits. Chubb Life may also issue Policies in connection with group or
sponsored arrangements on a "non-medical" or guaranteed issue basis. Due to the
underwriting criteria established for Policies issued on a non-medical,
guaranteed issue basis, actual monthly cost of insurance charges may be higher
than the current cost of insurance charges under otherwise identical Policies
that are medically underwritten. In addition, Chubb Life may also specify
different minimum Specified Amounts at issue for Policies issued in connection
with group or sponsored arrangements.
Certain charges or underwriting requirements set forth in this Prospectus may
also be reduced or eliminated for Policies issued in connection with an
exchange of another Chubb Life policy or contract or policies or contracts of
any affiliates of Chubb Life.
The amounts of any reduction, the charges to be reduced, the elimination or
modification of underwriting requirements, and the criteria for applying a
reduction or modification will generally reflect the reduced sales and
administrative effort, costs and differing mortality experience appropriate to
the circumstances giving rise to the reduction or modification. The charges
will be reduced in accordance with Chubb Life's company practice in effect when
the Policy is issued. The elimination or modification of underwriting
requirements will be done in accordance with Chubb Life's administrative
procedures with respect to underwriting when the Policy is issued. Reductions
and modifications will not be made where prohibited by applicable law and will
not be unfairly discriminatory against any person including the purchasers to
whom the reduction or modification applies and all other Owners of the Policy.
30
<PAGE>
MANAGEMENT OF CHUBB LIFE
Executive Officers and Directors of Chubb Life
DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME BUSINESS ADDRESS
- ---- ------------------------
<S> <C>
John C. Beck........... Managing Partner
Beck, Mack & Oliver
330 Madison Avenue--31st Floor
New York, NY 10017-5001
*Percy Chubb, III....... Vice Chairman
The Chubb Corporation
(also serves as Vice Chairman of Chubb Life Insurance Company
of America)
15 Mountain View Road
P.O. Box 1615
Warren, New Jersey 07061-1615
Joel J. Cohen.......... Managing Director
Donaldson, Lufkin & Jenrette Securities Corporation
140 Broadway, 49th Floor
New York, NY 10005
Henry U. Harder........ Retired. Former Chairman
The Chubb Corporation
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
David H. Hoag.......... Chairman, President & CEO
The LTV Corporation
25 West Prospect Avenue
Cleveland, OH 44115
Robert V. Lindsay...... Former President
J.P. Morgan & Co., Inc.
Altamont Road
Millbrook, NY 12545
Thomas C. MacAvoy...... Professor
Darden Graduate School of Business Administration
University of Virginia
Box 6550
Charlottesville, VA 22906-6550
Gertrude G. Michelson.. R.H. Macy & Co., Inc.
Herald Square--13th Floor
New York, NY 10001
*Dean R. O'Hare......... Chairman and President
The Chubb Corporation
(also serves as Chairman of Chubb Life Insurance Company of
America)
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
Warren B. Rudman....... Partner
Paul, Weiss, Rifkind, Wharton & Garrison
1615 L Street, N.W., Suite 1300
Washington, D.C. 20036
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME BUSINESS ADDRESS
- ---- ------------------------
<S> <C>
Sir David G. Scholey, CBE... Chairman
S.G. Warburg Group plc
One Finsbury Avenue
London EC2M 2PA England
Raymond G.H. Seitz.......... Former Ambassador of the United States of America
10 Trevor Square
London SW7 1DT, England
Lawrence M. Small........... President and Chief Operating Officer
Federal National Mortgage Association
3900 Wisconsin Avenue, NW
Washington, DC 20016
Richard D. Wood............. Former Chairman
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, IN 46285
</TABLE>
- -------
* Executive Officer of Chubb Life
EXECUTIVE OFFICERS (OTHER THAN DIRECTORS)
<TABLE>
<CAPTION>
NAME POSITION
- ---- --------
<S> <C>
Theresa M. Stone.......... President and Chief Executive Officer
David S. Fowler........... Vice Chairman
Randell G. Craig.......... Executive Vice President and Chief Operating Officer
Richard V. Werner......... Executive Vice President and Chief Financial Officer
Ronald R. Angarella....... Senior Vice President
Frederick H. Condon....... Senior Vice President, General Counsel and Secretary
Charles C. Cornelio....... Senior Vice President, Assistant Secretary and Chief
Administrative Officer
Ronald H. Emery........... Senior Vice President and Controller
Gregory W. Johnson........ Senior Vice President
Vincent G. Mace, Jr. ..... Senior Vice President and Group Actuary
Warren L. Reynolds........ Senior Vice President
Arthur V. Anderson........ Vice President and Corporate Actuary
Douglas H. Blampied....... Vice President
Thomas M. Bodrogi......... Vice President
Mark Connolly............. Vice President
Edwin E. Creter........... Vice President
Ned I. Gerstman........... Vice President
Glenn Hilsinger........... Vice President
Donald M. Kane............ Vice President
Patrick A. Lang........... Vice President
Deborah A. Leitch......... Vice President
Justin J. Manjorin........ Vice President
Donna L. Metcalf.......... Vice President
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION
- ---- --------
<S> <C>
Thomas E. Murphy, Jr., M.D. ..... Vice President and Associate Medical Director
Herbert B. Olson................. Vice President and Group Actuary
Robert R. Rodgers................ Vice President
Russell C. Simpson............... Vice President and Treasurer
James S. Smith................... Vice President
William A. Spencer............... Vice President
John A. Thomas................... Vice President
Ernest J. Tsouros................ Vice President
David G. Underwood, MD........... Vice President and Medical Director
John W. Wells.................... Vice President
</TABLE>
The officers and employees of Chubb Life who have access to the assets of
Separate Account A are covered by a fidelity bond issued by Aetna Casualty and
Surety Company in the amount of $35,000,000.
33
<PAGE>
STATE REGULATION OF CHUBB LIFE
Chubb Life Insurance Company of America is governed under the laws of the
state of New Hampshire and is subject to regulation by the Insurance
Commissioner of New Hampshire. An annual statement is filed with the New
Hampshire Insurance Commissioner on or before March 1 of each year covering the
operations and reporting on the financial condition of Chubb Life as of
December 31 of the preceding year. Periodically, the Commissioner examines the
assets and liabilities of Chubb Life and Separate Account A and verifies their
adequacy and a full examination of Chubb Life's operations is conducted by the
Commissioner at least every five years.
In addition, Chubb Life is subject to the insurance laws and regulations of
other states within which it is licensed to operate. Generally, the insurance
department of any other state applies the laws of the state of domicile in
determining permissible investments.
FEDERAL TAX MATTERS
Tax Considerations. The following description is a brief summary of some of
the tax rules, primarily related to federal income taxes under the Code, which,
in the opinion of Chubb Life, are currently in effect.
Policy Proceeds. The Policy contains provisions not found in traditional life
insurance policies providing only for fixed benefits. However, under the Code,
the Policy should qualify as a life insurance contract for federal income tax
purposes, with the result that all death benefits paid under the Policy will
generally be fully excludable from the gross income of the Policy's beneficiary
for federal income tax purposes. Policyowners should consult with their own tax
advisers in this regard.
The federal income tax treatment of a distribution from the Policy will
depend on whether a Policy is a life insurance policy and also if it is
determined to be a "modified endowment contract," as defined by the Code. Chubb
Life will notify a policyowner if the amount of premiums paid in would cause a
Policy to be a modified endowment contract and will allow a refund of the
excess premium. Thus, the policyowner may choose to have the Policy treated as
a modified endowment contract.
A modified endowment contract is a life insurance policy which fails to meet a
"seven-pay" test. In general, a policy will fail the seven-pay test if the
cumulative amount of premiums paid under the policy at any time during the first
seven policy years exceeds a calculated premium level. The calculated seven-pay
premium level is based on a hypothetical policy issued on the same insured
persons and for the same initial death benefit which, under specified conditions
(which include the absence of expense and administratative charges), would be
fully paid for after seven years. Your policy will be treated as a modified
endowment unless the cumulative premiums paid under your policy, at all times
during the first seven policy years, are less than or equal to the cumulative
seven-pay premiums which would have been paid under the hypothetical policy on
or before such times.
Whenever there is a "material change" under a policy, it will generally be
treated as a new contract for purposes of determining whether the policy is a
modified endowment, and subject to a new seven-pay premium period and a new
seven-pay limit. The new seven-pay limit would be determined taking into
account, under a downward adjustment formula, the Policy Account Value of the
policy at the time of such change. A materially changed policy would be
considered a modified endowment if it failed to satisfy the new seven-pay
limit. A material change could occur as a result of a change in death benefit
option, the selection of additional benefits, the restoration of a terminated
policy and certain other changes.
If the benefits under your policy are reduced, for example, by requesting a
decrease in Face Amount, or in some cases by making partial withdrawals,
terminating additional benefits under a rider changing the death benefit option,
or as a result of policy termination, the calculated seven-pay premium level
will be redetermined based on the reduced level of benefits and applied
retroactively for purposes of the seven-pay test. If the premiums previously
paid are greater than the recalculated seven-pay premium level limit, the policy
will become a modified endowment. Generally, a life insurance policy which is
received in exchange for a modified endowment or a modified endowment which
terminates and is restored, will also be considered a modified endowment.
34
<PAGE>
If a policy is deemed to be a modified endowment contract, any distribution
from the policy will be taxed in a manner comparable to distributions from
annuities (i.e., on an "income-first" basis); distributions for this purpose
include a loan or partial withdrawal. Any such distributions will be considered
taxable income to the extent accumulated value under the policy exceeds
investment in the policy.
A 10% penalty tax will apply to the taxable portion of such a distribution.
No penalty will apply to distributions (i) to taxpayers 59 1/2 years of age or
older, (ii) in the case of a disability which can be expected to result in
death or to be of indefinite duration or (iii) received as part of a series of
substantially equal periodic annuity payments for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer
and his beneficiary.
To the extent a policy becomes a modified endowment contract, any
distribution, including any loan, which occurs in the policy year it becomes a
modified endowment contract and in any year thereafter will be taxable income
to the policyowner. Also, any distributions within two years before a policy
becomes a modified endowment contract will also be income taxable to the
policyowner. The Secretary of the Treasury has been authorized to prescribe
rules which would similarly treat other distributions made in anticipation of a
policy becoming a modified endowment contract. For purposes of determining the
amount of any distribution includible in income, all modified endowment contract
policies that fail the above-described tests which are issued by the same
insurer, or its affiliates, to the same policyowner during any calendar year are
treated as one contract. The Secretary of the Treasury is also authorized to
issue regulations in this connection.
In addition to the distribution rules for modified endowment contracts, the
Code and proposed regulations thereunder require that, for policies entered
into on or after October 21, 1988, reasonable mortality and other charges be
used in satisfying the definition of life insurance. The death benefit under a
policy which meets this definition will continue to be excluded from the
beneficiary's gross income. Chubb Life believes that the Policies meet this
definition. As long as a Policy does not violate the tests described above, it
will not fail to meet the tests of the Code and the general tax provisions
described herein still apply.
The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In addition to the provisions
discussed above, the United States Congress may consider other legislation
which, if enacted, could adversely affect the tax treatment of life insurance
policies. Also, the Treasury Department may amend current regulations or adopt
new regulations with respect to this and other Code provisions. Therefore,
policyowners are advised to consult a tax adviser or attorney for more complete
tax information, specifically regarding the applicability of the Code
provisions to an individual policyowner's situation.
Under normal circumstances, if the Policy is not a modified endowment
contract, loans received under the Policy will be construed as indebtedness of
the policyowner. Policyholders are advised to consult a tax adviser or attorney
regarding the deduction of interest paid on loans.
Even if the Policy is not a modified endowment contract, a partial withdrawal
together with a reduction in death benefits during the first 15 policy years
may create taxable income for the policyowner. The amount of that taxable
income is determined under a complex formula and it may be equal to part or all
of, but not greater than, the income on the contract. A partial withdrawal made
after the first 15 policy years will be taxed on a recovery of premium-first
basis,
35
<PAGE>
and will only be subject to federal income tax to the extent such proceeds
exceed the total amount of premiums the policyowner has paid that have not been
previously withdrawn.
If a policyowner makes a partial withdrawal, surrender, loan or exchange of
the Policy, Chubb Life may be required to withhold federal income tax from the
portion of the money received by the policyowner that is includible in the
policyowner's federal gross income. A policyowner who is not a corporation may
elect not to have such tax withheld; however, such election must be made before
Chubb Life makes the payment. In addition, if a policyowner fails to provide
Chubb Life with a correct taxpayer identification number (usually a social
security number) or if the Treasury notifies Chubb Life that the taxpayer
identification number which has been provided is not correct, the election not
to have such taxes withheld will not be effective. In any case, a policyowner
is liable for payment of the federal income tax on the taxable portion of money
received, whether or not an election to have federal income tax withheld is
made. If a policyowner elects not to have federal income tax withheld, or if
the amount withheld is insufficient, then the policyowner may be responsible
for payment of estimated tax. A policyowner may also incur penalties under the
estimated tax rules if the withholding and estimated tax payments are
insufficient. Chubb Life suggests that policyowners consult with a tax adviser
or attorney as to the tax implications of these matters.
In the event that a Policy is owned by the trustee under a pension or profit
sharing plan, or similar deferred compensation arrangement, the tax
consequences of ownership or receipt of proceeds under the Policy could differ
from those stated herein. However, if ownership of such a Policy is transferred
from the plan to a plan participant (upon termination of employment, for
example), the Policy will be subject to all of the federal tax rules described
above. A Policy owned by a trustee under such a plan may be subject to
restrictions under ERISA and a tax adviser should be consulted regarding any
applicable ERISA requirements.
The Policy may also be used in various arrangements, including nonqualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans and others, where the tax consequences may vary
depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax consequences of
ownership or receipt of policy proceeds depend upon the circumstances of each
policyowner and beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. Chubb Life believes it presently is
in compliance with the diversification requirements as set forth in the
regulations and intends to remain in compliance with such diversification
requirements. If the diversification requirements are not satisfied, the Policy
would not be treated as a life insurance contract. As a consequence to the
policyowner, income earned on a Policy would be taxable to the policyowner for
any calendar quarter in which the diversification requirements were not
satisfied, and for all subsequent calendar quarters.
The Secretary of the Treasury may issue a regulation or a ruling which will
prescribe the circumstances in which a policyowner's control of the investments
of a segregated asset account may cause the policyowner, rather than the
insurance company, to be treated as the owner of the assets of the account. The
regulation or ruling could impose requirements that are not reflected in the
Policy, relating, for example, to such elements of policyowner control as
premium allocation, transfer privileges and investment in a division focusing
on a particular investment sector. Failure to comply with any such regulation
or ruling presumably would cause earnings on a policyowner's interest in
Separate Account A to be includible in the policyowner's gross income in the
year earned. Chubb Life, however, has reserved certain rights to alter the
Policy and investment alternatives so as to comply with such regulation or
ruling. Chubb Life believes that any such regulation or ruling would apply
prospectively. Since the regulation or ruling has not been issued, there can be
no assurance as to the content of such regulation or ruling or even whether
application of the regulation or ruling will be prospective. For these reasons,
policyowners are urged to consult with their own tax advisers.
Policyowners are advised that the exercise of an Exchange of Insured Rider
will give rise to tax consequences and are urged to consult with a tax adviser
prior to exercising such rider.
Policyowners are advised that the federal income tax status of the Terminal
Illness Accelerated Benefit Rider is uncertain at this time. Benefit proceeds
are not specifically excluded from taxable income under Section 101 of the
Code. Under regulations proposed by the Internal Revenue Service on December
14, 1992, terminal illness benefit proceeds
36
<PAGE>
will be treated as excludable from taxable income under Section 101 of the
Code. As currently proposed, tax-free treatment will only be accorded to
benefit proceeds received on or after the date that these regulations become
final. In addition, while only important for a premium paid rider, rider
benefits are not expressly included as "Qualified Additional Benefits" in
Section 7702(f)(5) of the Code. Also, there is a question as to whether or not
the addition of an accelerated benefit rider constitutes a Section
7702A(c)(3)(A) "material change" in benefit, thereby causing the contract to be
treated as a new contract and subjected to a new seven-pay test, with
appropriate adjustments to take into account the cash surrender values under
the contract. It is likely, but not entirely certain, that the final
regulations, when adopted, will not produce a different tax result.
Policyowners are also advised that there is some uncertainty as to whether
the Primary Insured Term Rider will be treated as a "Qualified Additional
Benefit" under Section 7702(f)(5)(A)(iii) of the Code rather than as a death
benefit under the Policy. However, Chubb Life believes that this rider, as
structured and implemented by Chubb Life, would be considered as part of the
death benefit under the Policy and therefore not give rise to any adverse tax
consequences. The policyowner should consult a tax adviser before adding the
Primary Insured Term Rider to the Policy.
The foregoing summary does not purport to be complete or to cover all
situations, including the possible tax consequences of changes in ownership.
Counsel and other competent advisers should be consulted for more complete
information.
Charge for Chubb Life Income Taxes. Chubb Life is presently taxed as a life
insurance company under the provisions of the Code. The Code specifically
provides for adjustments in reserves for variable policies, and Chubb Life will
include flexible premium life insurance operations in its tax return in
accordance with these rules.
Currently, no charge is made against Separate Account A for Chubb Life's
federal income taxes, or provisions for such taxes, that may be attributable to
Separate Account A. Chubb Life may charge each division in Separate Account A
for its portion of any income tax charged to Chubb Life on the division or its
assets. Under present laws, Chubb Life may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant. If they increase, however, Chubb Life may decide to make charges
for such taxes or provisions for such taxes against Separate Account A. Chubb
Life would retain any investment earnings on any tax charges accumulated in a
division. Any such charges against Separate Account A or its divisions could
have an adverse effect on the investment experience of such division.
EMPLOYEE BENEFIT PLANS
Employers and employee organizations should consider, in consultation with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of a Policy in connection with an employment-related insurance or
benefit plan. The United States Supreme Court held, in a 1983 decision, that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account A is a party or to
which the assets of any of the divisions thereof are subject. Chubb Life is not
involved in any litigation that is of material importance in relation to its
total assets or that relate to Separate Account A.
EXPERTS
The financial statements of Chubb Life and the financial statements of
Separate Account A at December 31, 1995 and for the related periods then ended,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP independent auditors, as set forth in their reports thereon
appearing elsewhere herein and in the Registration Statement, and are included
in reliance upon such reports given upon the authority of such firm as experts
in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Michael
J. LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to the
registration statement.
37
<PAGE>
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement to all of which reference is made for further
information concerning Separate Account A, Chubb Life and the Policy offered
hereby. Statements contained in this Prospectus as to the contents of the
Policy and other legal instruments are summaries. For a complete statement of
the terms thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of Chubb Life which are included in this Prospectus
should be considered only as bearing on the ability of Chubb Life to meet its
obligations under the Policy. They should not be considered as bearing on the
investment experience of the assets held in Separate Account A.
38
<PAGE>
FOR USE IN ARKANSAS ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
of
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Postponement of Payments on page 27 of the Prospectus is deleted and
------------------------
amended to read as follow:
Postponement of Payments. Payment of any amount upon surrender, withdrawal,
policy loan, or benefits payable at death or maturity may be postponed
whenever: (i) the New York Stock Exchange is closed other than customary
week-end and holiday closings, or trading on the New York Stock Exchange is
restricted as determined by the Commission; (ii) the Commission by order
permits postponement for the protection of policyowners; or (iii) an
emergency exists, as determined by the Commission, as a result of which
disposal of securities is not reasonably practicable or it is not
reasonable practicable to determine the value of net assets in Separate
Account A.
If payment of any death benefit is delayed for over 30 days, after the
Company receives due proof of death, proceeds that are payable in one sum
will be increased to include interest at a yearly rate of 8%.
EnII
Form 3-8511 Ed. 4/96
<PAGE>
FOR USE IN CALIFORNIA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The Division investing in the Gold Stock Portfolio is not available for Policies
issued in California.
The definition of Net Premium on page 3 of the Prospectus is hereby deleted and
amended to read as follows:
Net Premium - The Gross premium less a 2.35% premium tax charge.
Section (a) under Charges and Deductions on page 7 of the Prospectus is hereby
deleted and amended to read as follows:
(a) Chubb Life deducts 2.35% of each premium payment received to cover
state premium taxes imposed.
The section Premium Charges on page 16 of the Prospectus is hereby deleted and
amended to read as follows:
Premium Charges. Upon receipt of each premium payment and before allocation
of payment among the General Account and divisions of Separate Account A,
Chubb Life will deduct a premium tax charge of 2.35%.
FOR POLICYOWNERS AGE 60 AND OVER ONLY, the first paragraph of the Section Policy
------
Cancellation, Surrender and Lapse on page 8 and of the Prospectus is deleted and
- ---------------------------------
amended to read as follows, and the section Policy "Free Look" on page 16 of the
-----------------
Prospectus is deleted and amended to read as follows:
The policyowner has the limited right to return a Policy for cancellation and
full refund of all premiums paid. Chubb Life will cancel the Policy if it is
returned by mail or personal delivery to Chubb Life or to the agent who sold the
Policy, within 30 days after delivery of the Policy to the policyowner, within
45 days of the date of the execution of the application for insurance, or within
30 days after mailing or personal delivery of a Notice of the Right of
Withdrawal, whichever is later. Chubb Life will return to the policyowner,
within seven days, the Accumulation value of the Policy, plus any amounts
deducted as a premium charge, as of the day the Policy is returned. Prior to the
allocation date, the initial net premium will be deposited in Chubb Life's
General Account.
Form 3-00698 Ed. 4/96
<PAGE>
FOR USE IN COLORADO ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The first paragraph of the section Policy Cancellation, Surrender and Lapse on
----------------------------------------
page 8 and of the Prospectus is deleted and amended to read as follows, and the
section Policy "Free Look" on page 16 of the Prospectus is deleted and amended
------------------
to read as follows:
The policyowner has the limited right to return a Policy for cancellation and
full refund of all premiums paid. Chubb Life will cancel the Policy if it is
returned by mail or personal delivery to Chubb Life or to the agent who said the
Policy, within 20 days after delivery of the Policy to the policyowner, within
45 days of the date of the execution of the application for insurance, or within
20 days after mailing or personal delivery of a Notice of the Right of
Withdrawal, whichever is later. Chubb Life will return to the policyowner,
within seven days, all payments received on the Policy. Prior to the allocation
date, the initial net premium will be deposited in Chubb Life's General Account;
Chubb Life will retain any interest earned if the "free look" right is
exercised.
The section Suicide on page 27 of the Prospectus is deleted and amended to read
-------
as follows:
Suicide. The Policy does not cover the risk of suicide within one year from the
- -------
Policy date or one year from the date of any increase in Specified Amount with
respect to such increase, whether the Insured is sane or insane. In the event of
suicide within one year of the policy date, the only liability of Chubb Life
will be a refund of premiums paid, without interest, less any policy debt and
less any withdrawal. In the event of suicide within one year of an increase in
Specified Amount, the only liability of Chubb Life with respect to the increase
will be a refund of the cost of insurance for such increase.
ENII
Form 3-8506 Ed. 4/96
<PAGE>
FOR USE IN CONNECTICUT ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The third paragraph of the section Policy Loans on page 7 of the Prospectus is
------------
deleted and amended to read as follows:
Interest is payable on policy loans at the rate of 8% compounded annually.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. A policy loan may be prepaid in whole or in part at any time while
the Policy is in force. When a loan repayment is made, accumulation value
securing the policy debt in the General Account equal to the loan repayment
will be allocated among the General Account and divisions of Separate Account
A using the same percentages as used to allocate net premiums. See "CASH VALUE
BENEFITS - Policy Loans".
The fourth paragraph of the section Policy Loans on page 24 of the Prospectus is
------------
deleted and amended to read as follows:
Chubb Life will charge interest on any outstanding policy loan. The rate on
policy loans is 8%, compounded annually. Interest is due and payable at the
end of each policy year, and any interest not paid when due becomes loan
principal.
The section Limitation on Right to Contest on page 26 of the Prospectus is
------------------------------
deleted and amended to read as follows:
Limitation on Right to Contest. Chubb Life will not contest the insurance
------------------------------
coverage provided under the Policy, except for any subsequent increase in
Specified Amount, after the Policy has been in force during the lifetime of
the insured for a period of two years from the policy date. Any increase in
the Specified Amount will not be contested after such increase has been in
force during the lifetime of the insured for two years following the effective
date of the increase. Any increase will be contestable within the two year
period only with regard to statements concerning the increase.
ENII
Form 3-8544 Ed. 4/96
<PAGE>
FOR USE IN IDAHO ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Reinstatement on Page 16 of the Prospectus is deleted and amended to
-------------
read as follows:
Reinstatement. If the Policy lapses, the policyowner may reinstate the
-------------
Policy. The terms of the original contract will apply upon reinstatement. The
accumulation value, before payment of the required reinstatement premium, will
equal the accumulation value on the date of termination. The policy year on
reinstatement will be measured from the policy date. An application for
reinstatement may be made any time within five years of laps, but satisfactory
proof of insurability and payment of a reinstatement premium is required. The
reinstatement premium, after deduction of the premium tax charge, must be
sufficient to cover monthly deductions for three policy months following the
effective date of reinstatement. If a loan was outstanding at the time of
lapse, Chubb Life will require, at the election of the policyowner, repayment
or reinstatement of the loan, with interest at a rate of 8% per year, before
permitting reinstatement of the Policy. The effective date will be the date of
approval of the reinstatement application, which will be as of a monthly
anniversary date.
ENII
Form 3-8510 Ed. 4/96
<PAGE>
FOR USE IN INDIANA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The first paragraph of the section Policy Loans on Page 7 of the Prospectus
------------
is deleted and amended to read as follows:
Policy Loans - After this policy has a cash value, a policyowner may borrow
------------
against the cash value of his Policy. Generally, the maximum loan amount is
90% of the cash value of the Policy on the date of the loan. Loan interest is
payable at the end of each policy year and all policy debt outstanding will
be deducted from proceeds payable at the insured's death, upon maturity or
upon surrender.
The last paragraph of the section Monthly Deduction on Page 17 of the Prospectus
-----------------
is deleted and amended to read as follows:
The monthly cost of insurance will be determined by Chubb Life based upon
expectations as to future mortality experience, but can never exceed the
rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Policy. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table for attained ages 14
and below, and are based on the Commissioner's 1980 Standard Ordinary
Smoker and Non-Smoker Mortality Table for attained ages 15 and above.
The first paragraph of the section Policy Loans on Page 24 of the Prospectus
------------
is deleted and amended to read as follows:
Policy Loans - So long as the Policy remains in force, a policyowner may
------------
borrow money from Chubb Life at any time after the policy has a cash value
using the Policy as the only security for the loan. Loans have priority
over the claims of any assignee or any other person. Generally, the
maximum loan amount is 90% of the cash value at the end of the valuation
period during which the loan request is received. The maximum amount
which may be borrowed at any given time is the maximum loan amount
reduced by any outstanding debt.
ENII
Form 3-8542 Ed. 4/96
<PAGE>
FOR USE IN MARYLAND ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The first paragraph of the section Allocation of Premiums on page 13 of the
----------------------
Prospectus is deleted and amended to read as follows:
Allocation of Premiums: Premium payments, net of the premium tax charge,
----------------------- will be allocated on the Date of Receipt, among
the General Account and the divisions of Separate Account A in accordance
with the directions of the policyowner. The minimum percentage of any net
premium payment allocated to any division or the General Account is 10%.
The policyowner may change his or her allocation of future premium
payments among the General Account and the divisions of Separate Account A
by written notice to Chubb Life or by telephone without payment of any fee
or penalties.
The section Guaranteed Death Benefit on page 20 of the Prospectus is deleted
------------------------
and amended to read as follows:
Guaranteed Continuation Benefit Rider. The policyowner may add a
--------------------------------------
Guaranteed Continuation Benefit Rider to the Policy under which the death
benefit is guaranteed to never be less than the Specified Amount provided
that a cumulative minimum premium requirement is met. The premium
requirement is based on issue age, sex, smoking status, underwriting
class. Specified Amount and death benefit option. If the Specified Amount
is increased, an additional premium, based on attained age, will be
required for such increase. There is a monthly charge for this rider. See
"Optional Insurance Benefits."
ENII
Form 3-8539 Ed. 4/96
<PAGE>
FOR USE IN MASSACHUSETTS ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
of
CHUBB LIFE INSURANCE COMPANY OF AMERICA
All references in this prospectus to the insured's sex should be disregarded for
policies issued in Massachusetts, and the maximum cost of insurance rates
allowable will be based on the 1980 Commissioner's Standard Ordinary B
Smoker/Nonsmoker Mortality Table.
The third paragraph of the section Summary on page 4 of the Prospectus is
-------
deleted and amended to read as follows:
The Policy is called "variable" because, unlike the fixed benefits of an
ordinary whole life insurance contract, the accumulation value, the cash
value and, under certain circumstances, the death benefit of the Policy may
increase or decrease depending upon the Investment experience of the
divisions of Chubb Separate Account A ("Separate Account A") to which
premium payments have been allocated. So long as the Policy's cash value
continues to be sufficient to pay the monthly deduction, all policyowners
are guaranteed a minimum death benefit equal to the face amount of the
Policy (the "Specified Amount"), less any outstanding policy debt. The
applicant could lose his or her entire Investment, depending on the
performance of the divisions of Separate Account A, and as a result there
could be no death benefit absent additional payments made to keep the
policy in force.
ENII
Form 3-6258 Ed.4/96
<PAGE>
FOR USE IN MINNESOTA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
of
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The third paragraph of the section Policy Loans on page 7 of the Prospectus is
------------
deleted and amended to read as follows:
Interest is payable on policy loans at the rate of 8% compounded annually.
Interest accrues on a daily basis from the date of the loan and is
compounded annually. A policy loan may be prepaid in whole or in part at
any time while the Policy is in force. When a loan repayment is made,
accumulation value securing the policy debt in the General Account equal to
the loan repayment will be allocated among the General Account and
divisions of Separate Account A using the same percentages as used to
allocate net premiums. See "CASH VALUE BENEFITS - Policy Loans".
The fourth paragraph of the section Policy Loans on page 24 of the Prospectus is
------------
deleted and amended to read as follows:
Chubb Life will charge interest on any outstanding policy loan. The rate on
policy loans is 8%, compounded annually. Interest is due and payable at the
end of each policy year, and any interest not paid when due becomes loan
principal.
ENII
Form 3-8507 Ed. 4/96
<PAGE>
FOR USE IN MISSOURI ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Suicide on page 27 of the Prospectus is deleted and amended to read
-------
as follows:
Suicide - The Policy does not cover the risk of suicide within two years
-------
from the policy date, whether the Insured is sane or insane. In such event,
the only liability of Chubb Life will be a refund of premiums paid without
interest less any policy loan and less any withdrawal. The Policy does not
cover the risk of suicide, whether sane or insane, within two years from
the effective date of any increase in the Specified Amount with respect to
such increase. In such event, the only liability of Chubb Life with respect
to the increase will be to refund the cost of insurance for such increase.
Suicide is no defense to payment of life insurance benefits nor is suicide
while insane a defense to payment of accidental death benefits, if any,
under this policy where the policy is issued to a Missouri citizen unless
the Company can show that the insured intended suicide when he applied for
the policy, regardless of any language to the contrary in this policy.
ENII
Form 3-8504 Ed. 4/96
<PAGE>
FOR USE IN MONTANA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1986
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Paragraph (b) of the section Charges and Deductions on page 7 of the Prospectus
----------------------
is deleted and amended to read as follows:
(b) There is a monthly deduction from each Policy's accumulation value in the
General Account and/or the divisions of Separate Account A equal to the sum of
(i) the cost of insurance, described below, and the cost of additional
benefits provided by rider attached to the Policy; and (ii) a monthly
administrative charge of $8.00. The cost of insurance charge is calculated on
each monthly anniversary date. It is based on the issue age, policy year, and
rating class of the insured. Monthly cost of insurance rates will be
determined by Chubb Life based upon its expectations as to future mortality
experience. Cost of insurance rates are guaranteed not to exceed or be
increased above the maximum charge based upon the Commissioner's 1980 Standard
Ordinary Mortality Table.
The Payment of Premiums, section on page 13 of the Prospectus is deleted and
--------------------
amended to read as follows:
Payment of Premiums. Premiums must be paid to Chubb Life at its service center
--------------------
in Chattanooga, Tennessee or through an authorized agent of Chubb Life for
forwarding to Chubb Life's service center in Chattanooga, Tennessee. In
addition, Chubb Life has instituted administrative procedures whereby premium
payments in response to billing notices are sent directly to Chubb Life's
bank. Unlike traditional insurance contracts, there is no fixed schedule of
premium payments on a Policy either as to the amount or the timing of the
payment. A policyowner may determine within specified limits, his or her own
premium payment schedule. These limits will be set forth by Chubb Life and
will include a minimum initial premium payment sufficient to keep the policy
in force for two months and may also include limits on the total amount and
frequency of payments in each policy year. No premium payment may be less than
$25. In order to help the policyowner obtain the insurance benefits desired, a
Planned Periodic Premium and Premium Frequency will be stated in each Policy.
This premium will usually be based upon the policyowner's insurance need, his
financial abilities and the current financial climate, in general, as well as
on the Specified Amount of the Policy and the Insured's age and risk class.
The policyowner is not required to pay such premiums and failure to make any
premium payment will not necessarily result in lapse of the Policy; provided
that the Policy's cash value, less policy debt, if any, is sufficient to pay
monthly deductions. Conversely, adherence to the schedule of Planned Periodic
Premiums will not assure that the Policy will remain in force. See "THE
POLICY-Policy Lapse."
The fourth paragraph of the section Transfers on page 14 of the Prospectus is
---------
deleted and amended to read as follows:
At any time the policyowner may transfer 100% of the Policy's accumulation
value to the General Account and elect to have all future premium payments
allocated to the General Account. While 100% of the Policy's accumulation
value and all future premium payments are allocated to the General Account,
the minimum period the Policy will be in force will be fixed and guaranteed.
The minimum period will depend on the amount of accumulation value, the
Specified Amount, the attained age, and rating class of the insured. The
minimum period will decrease if the policyowner subsequently elects to
increase the Specified Amount, elects to surrender the Policy, or elects to
make a withdrawal. The minimum period will increase if the policyowner elects
to decrease the Specified Amount, additional premium payments are received, or
the Company credits a higher interest rate or charges a lower cost of
insurance rate than those guaranteed for the General Account.
The third paragraph of the section Monthly Deduction of page 18 of the
-----------------
Prospectus if deleted and amended to read ad follows:
The cost of insurance for the insured is determined on a monthly basis, and is
determined separately for the initial Specified Amount and each subsequent
increase in the Specified Amount. The monthly cost of insurance rate is based
on the issue age, policy year, and rating class of the insured under the
Policy. If we assume two insured's differ only with regard to on of the above
bases, the effect of each of these bases on their monthly cost of insurance
rates would be as follows:
Issue Age: The cost of insurance rate for the younger insured will be less
---------
than or equal to that for the older insured.
Policy Year: The cost of insurance rate will increase as the policy year
-----------
increases. For two Insureds with the same rating class and attained age the
cost of insurance rate for the Insured with the younger issue age will never
exceed, and in some cases will be less than that for the Insured with the
older issue age.
Rating Class: The cost of insurance rates for nonsmokers will be less than or
------------
equal to those for smokers. Cost of insurance rates may also differ due to the
insured's medical condition, occupation, or avocation.
The section Misstatements on page 27 of the Prospectus is deleted and amended to
-------------
read as follows:
Misstatements. If the age of the insured has been misstated in an application,
--------------
including a reinstatement application, the amount payable under the Policy by
reason of the death of the insured will be equal to the sum of the following:
1. The accumulation value on the date of death less any policy debt: and
2. The death benefit, less the accumulation value on the date of death,
multiplied by the ratio of (a) the cost of insurance actually deducted at
the beginning of the policy month in which the death occurs to (b) the
cost of insurance that should have been deducted at the insured's true
age.
ENII
Form 3-8508 Ed. 4/96
<PAGE>
FOR USE IN NORTH DAKOTA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Suicide on page 27 of the Prospectus is deleted and amended to read
-------
as follows:
Suicide - The Policy does not cover the risk of suicide within one year from
-------
the Policy date or one year from the date of any increase in Specified Amount
with respect to such increase, whether the insured is sane or insane. In the
event of suicide within one year of the policy date, the only liability of
Chubb Life will be a refund of premiums paid, without interest, less any
policy debt and less any withdrawal. In the event of suicide within one year
of an increase in Specified Amount, the only liability of Chubb Life with
respect to the increase will be a refund of the cost of insurance for such
increase.
ENII
Form 3-8512 Ed. 4/96
<PAGE>
FOR USE IN PENNSYLVANIA ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Misstatements on page 27 of the Prospectus is deleted and amended to
-------------
read as follows:
Misstatements - If the age or sex of the insured has been misstated, the
-------------
death benefit payable under this policy by reason of death of the Insured
or the cash value available on surrender by the Owner, will be adjusted by
the difference between the monthly deductions made and the monthly
deductions which should have been made based on the current age and/or sex
of the Insured, accumulated at the interest rates that were credited to the
cash value. The monthly deduction is described in the Nonforfeiture Values
section.
ENII
Form 3-8543 Ed. 4/96
<PAGE>
FOR USE IN WISCONSIN ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Limitation on Right to Contest on page 28 of the Prospectus is
------------------------------
deleted and amended to read as follows:
Limitation on Right to Contest. Chubb Life will not contest the insurance
- -------------------------------
coverage provided under the Policy, except for any subsequent increase in
Specified Amount, after the Policy has been in force during the lifetime of the
insured for a period of two years from the policy date. Any accidental death or
disability benefits which are provided by a rider may be contested at any time
for misrepresentation. Any increase in the Specified Amount will not be
contested after such increase has been in force during the lifetime of the
insured for two years following the effective date of the increase. Any increase
will be contestable within the two year period only with regard to statements
concerning the increase.
ENII
Form 3-8505 Ed. 4/96
<PAGE>
FOR USE IN THE U.S. VIRGIN ISLANDS ONLY
Supplement dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The second and third paragraphs of the section Policy Loans beginning on page 7
------------
of the Prospectus are deleted and amended to read as follows:
A policyowner may allocate a policy loan among the General Account and the
various divisions of Separate Account A. Accumulation value in each division
equal to the policy debt so allocated will be transferred to the General
Account. If loan interest is not paid when due, it becomes loan principal. An
amount equal to the unpaid loan interest will be transferred to the General
Account pro-rata from the accumulation value of the General Account and the
divisions of Separate Account A. If no accumulation value is available in any
of the divisions of Separate Account A, accumulation value held in the General
Account will be set aside as loan collateral. Accumulation value held in the
General Account for loan collateral earns interest daily at an effective rate
of 4 1/2%.
A policy loan accrues interest at a maximum rate of 6% compounded annually, or
at any lower rate established by Chubb Life for any period during which the
loan is outstanding. There are two types of loans available. A Type A loan is
charged the same interest rate as the interest credited to the amount of
accumulation value which is held in the General Account to secure loans. The
amount available at any time for a Type A loan equals the maximum loan amount
less the DEFRA Guideline Single Premium, as set forth in the Code, less any
outstanding Type A loans. All other loans are Type B Loans; a Type B loan is
charged the prevailing interest rate, but not more than the maximum. It is
possible for one loan request to result in both a Type A and Type B loan.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. A policy loan may be prepaid in whole or in part at any time while
the Policy is in force. When a loan repayment is made, accumulation value
securing the policy debt in the General Account equal to the loan repayment
will be allocated among the General Account and divisions of Separate Account
A using the same percentages as used to allocate net premiums. See "CASH VALUE
BENEFITS-Policy Loans".
The third, fourth and fifth paragraphs of the section Policy Loans beginning
------------
on page 24 of the Prospectus are deleted and amended to read as follows:
When a policy loan is made, a portion of the Policy's accumulation value
sufficient to secure the loan will be transferred to the General Account. A
policy loan removes the proceeds from the investment experience of Separate
Account A which will have a permanent effect on the accumulation value and
death benefit even if the loan is repaid. Any loan interest that is due and
unpaid will also be so transferred. Accumulation value equal to policy debt in
the General Account will accrue interest daily at an annual rate of 4 1/2%.
The policyowner may allocate a policy loan among the General Account and the
divisions of Separate Account A. If no such allocation is made the loan will
be allocated among the General Account and divisions of Separate Account A in
the same proportion that the accumulation value in the General Account less
policy debt and the accumulation value in each division bears to the total
accumulation value of the Policy, less policy debt, on the date of the loan.
Chubb Life will charge interest on any outstanding policy loan. The maximum
interest rate on policy loans is 6%, compounded annually. There are two types
of loans available. A Type A loan is charged the same interest rate as the
interest credited to the amount of accumulation value held in the General
Account to secure loans. The amount available at any time for a Type A loan
equals the maximum loan amount less the DEFRA Guideline Single Premium
("DGSP"), as set forth in the Code, less any outstanding Type A loans. Any
other loans are Type B loans; a Type B loan is charged the prevailing interest
rate, but not more than the maximum. It is possible for one loan request to
result in both a Type A and a Type B loan. A request for a loan will be
granted first as a Type A loan, to the extent available, and then as a Type B
loan. Once a policy loan is granted, it remains a Type A or Type B until it is
repaid. Increases in the Specified Amount will affect the determination of the
amount available for a Type A loan; however, decreases in the Specified Amount
will not have any such effect.
Chubb Life may, in its sole discretion, charge lower interest rates in the
future. If the loan interest rate is ever less than 6%, Chubb Life can
increase the rate once each policy year but by not more than 1% per year. With
respect to outstanding policy loans, Chubb Life will send notice of any change
in the interest rate to the policyowner and any assignee of record at Chubb
Life's service center in Chattanooga, Tennessee at least 30 days before the
effective date of the increase. The effective date of any increase in such
interest rate shall not be less than twelve months after the effective date of
the establishment of the previous rate. Interest is due and payable at the end
of each policy year, and any interest not paid when due becomes loan
principal.
ENII
Form 3-6270 Ed. 4/96
<PAGE>
FOR USE IN UTAH ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The second paragraph of the section Surrender Privileges on page 23 of the
--------------------
Prospectus is deleted and amended to read as follows:
The surrender value of the Policy equals the accumulation value less the
surrender charge on the date the Company receives the request for surrender less
any debt. Proceeds will generally be paid within seven days of the Date of
Receipt of a request for surrender or withdrawal.
The section Postponement of Payments on page 27 of the Prospectus is deleted and
------------------------
amended to read as follows:
Postponement of Payments. Payment of any amount upon surrender, withdrawal,
- -------------------------
policy loan, or benefits payable at death or maturity may be postponed whenever;
(i) the New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted as
determined by the Commission; (ii) the Commission by order permits postponement
for the protection of policyowners; or (iii) an emergency exists, as determined
by the Commission, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of net
assets in Separate Account A.
If payment of any death benefit is delayed for over 30 days, after the Company
receives due proof of death, proceeds that are payable in one sum will be
increased to include interest at a yearly rate of 8%.
ENII
Form 3-8513 Ed. 4/96
<PAGE>
FOR USE IN TEXAS ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The loan value section of the Definitions on page 3 of the Prospectus is deleted
-----------
and amended to read as follows:
Loan value - Generally, the Policy's cash value on the date of a loan.
Net premium - the premium paid multiplied by 97.5%
The first paragraph of the section Policy Loans on page 7 of the Prospectus is
------------
deleted and amended to read as follows:
Policy Loans. After the first policy anniversary, a policyowner may borrow
against the cash value of his Policy. The maximum loan amount is the cash
value of the Policy on the date of the loan. Loan interest is payable at
the end of each policy year and all policy debt outstanding will be
deducted from proceeds payable at the insured's death, upon maturity, or
upon surrender.
The second paragraph of the section Transfers on page 14 of the Prospectus is
---------
deleted and amended to read as follows:
A transfer charge to cover administrative costs will be imposed each time
amounts are transferred and will be deducted on a pro rata basis from the
division or divisions of Separate Account A or the General Account into
which the amount is transferred. However, no transfer charge will be
imposed on the transfer of the initial net premium payments, plus interest
earned, from the General Account to the divisions of Separate Account A on
the allocation date or on loan repayments. In addition, Chubb Life
currently permits 4 transfers per policy year without imposing a transfer
charge. The charge will be lesser of $25 or 10% of the amount transferred.
Currently, a policyowner may make an unlimited number of transfers;
however, Chubb Life has reserved the right to revoke or modify transfer
privileges and charges. The Owner will be notified 30 days in advance of
any change. The minimum amount transferable will never exceed $1,000 and
the transfer charge will never exceed $50.
The first paragraph of the section Policy Loans on page 24 of the Prospectus is
------------
deleted and amended to read as follows:
Policy Loans. So long as the Policy remains in effect, a policyowner may
borrow money from Chubb Life at any time after the first policy anniversary
using the policy as the only security for the loan. Loans have priority
over the claims of any assignee or any other person. The maximum loan
amount is the cash value at the end of the valuation period during which
the loan request is received. The maximum amount which may be borrowed at
any given time is the maximum loan amount reduced by any outstanding policy
debt.
ENII
Form 3-8541 Ed. 4/96
<PAGE>
FOR USE IN PUERTO RICO ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
OF
CHUBB LIFE INSURANCE COMPANY OF AMERICA
The section Reinstatement on Page 16 of the Prospectus is deleted and amended to
-------------
read as follows:
Reinstatement. If the Policy lapses, the policyowner may reinstate the
--------------
Policy. The terms of the original contract will apply upon reinstatement.
The accumulation value, before payment of the required reinstatement
premium, will equal the accumulation value on the date of termination. The
policy year on reinstatement will be measured from the policy date. An
application for reinstatement may be made any time within five years of
lapse, but satisfactory proof of insurability and payment of a reinstatement
premium is required. The reinstatement premium, after deduction of the
premium tax charge, must be sufficient to cover monthly deductions for three
policy months following the effective date of reinstatement. If a loan was
outstanding at the time of lapse, Chubb Life will require, at the election
of the policyowner, repayment or reinstatement of the loan before permitting
reinstatement of the Policy. The effective date will be the date of approval
of the reinstatement application, which will be as of a monthly anniversary
date.
ENII
Form 3-8540 Ed. 4/96
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors
Chubb Life Insurance Company of America
We have audited the accompanying consolidated balance sheet of Chubb Life
Insurance Company of America and subsidiaries as of December 31, 1995 and the
related consolidated statements of income, shareholder's equity, and cash
flows for the year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Chubb Life
Insurance Company of America and subsidiaries at December 31, 1995 and the
consolidated results of their operations and their cash flows for the year
then ended, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Boston, Massachusetts
February 5, 1996
F-1
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Consolidated Balance Sheet
December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
<S> <C>
Assets
Invested assets (Note 2)
Fixed maturities, held-to-maturity, at amortized cost $ 403,539
Fixed maturities, available-for-sale, at market 2,255,951
Equity securities, at market 40,208
Short term investments, at cost 55,222
Policy loans 202,705
Mortgage loans on real estate 9,634
----------------
Total invested assets 2,967,259
----------------
Accrued investment income 46,091
Uncollected premiums 12,522
Reinsurance recoverable on life and health policy liabilities 193,925
Deferred policy acquisition costs (Note 3) 575,614
Value assigned purchased insurance in force (Note 3) 37,095
Goodwill, net of accumulated amortization of $22,067 65,382
Property and equipment, net of accumulated depreciation of $62,328 45,016
Separate account assets 261,764
Other assets 70,697
----------------
1,308,106
----------------
Total assets $4,275,365
================
Liabilities
Policy liabilities
Policy fund balances $2,129,327
Future policy benefits 622,802
Policy and contract claims 90,150
Premiums paid in advance 2,136
Other policyholders' funds 98,723
----------------
2,943,138
Mortgage loan payable (Note 11) 5,212
Short term debt (Note 11) 36,000
Federal income taxes payable (Note 4) 7,805
Deferred federal income taxes (Note 4) 70,484
Separate account liabilities 261,764
Accrued expenses and other liabilities (Note 5) 105,446
----------------
Total liabilities 3,429,849
Commitments and contingent liabilities (Note 6, 9, 14)
Minority interest in consolidated subsidiary (Note 1) 871
Shareholder's equity
Common stock --$5 par value, 600,000 shares authorized, issued and
outstanding 3,000
Paid in capital 249,872
Unrealized appreciation of investments, net (Note 2) 40,720
Retained earnings 551,053
----------------
Total shareholder's equity 844,645
----------------
Total liabilities and shareholder's equity $4,275,365
================
</TABLE>
See accompanying notes.
F-2
<PAGE>
<TABLE>
<CAPTION>
Chubb Life Insurance Company of America and Subsidiaries
Consolidated Statement of Income
Year Ended December 31, 1995
(In thousands)
<S> <C>
Revenues
Premiums and policy charges $622,937
Net investment income 230,090
Realized investment gains 21,808
Other income 4,055
-----------
Total Revenues 878,890
Benefits, Claims and Expenses
Policy benefits and claims 526,689
Change in reserves for future policy benefits 22,530
-----------
549,219
Expenses
Commissions and other operating expenses 187,920
Amortization 79,643
-----------
267,563
-----------
Total benefits, claims and expenses 816,782
-----------
Income before federal income tax 62,108
Federal income tax (benefit)
Current 29,049
Deferred (8,192)
-----------
20,857
-----------
Income before minority interest 41,251
Minority interest in net loss of
consolidated subsidiary (965)
-----------
Net Income $ 42,216
===========
</TABLE>
See accompanying notes.
F-3
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Consolidated Statement of Shareholder's Equity
Year Ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
<S> <C>
Common stock
Balance, beginning and end of year $ 3,000
-----------
Paid-in capital
Balance, beginning and end of year 249,872
-----------
Unrealized appreciation (depreciation) of investments, net
Balance, beginning of year (33,907)
Change, net (Note 2) 74,627
-----------
Balance, end of year 40,720
-----------
Retained Earnings
Balance, beginning of year 512,845
Net income 42,216
Dividends to parent (4,008)
-----------
Balance, end of year 551,053
-----------
Total shareholder's equity $844,645
===========
</TABLE>
See accompanying notes.
F-4
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Consolidated Statement of Cash Flows
Year Ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
<S> <C>
Operating Activities
Net income $ 42,216
Adjustments to reconcile net income to net cash used in operating activities:
Decrease in future policy benefits, policy and contract claims and
premiums paid in advance, net (25,269)
Decrease in uncollected premiums 10,523
Increase in policy acquisition costs deferred, net of amortization (82,664)
Net amortization of value assigned purchased insurance in force 4,218
Increase in accrued investment income (4,017)
Realized investment gains (21,808)
Accretion of investment discounts (6,383)
Provision for depreciation 8,867
Provision for deferred income tax (8,192)
Increase in federal income tax payable 2,593
Other, net 9,612
-------------
Net cash used for operating activities (70,304)
Investing Activities
Proceeds from sales of fixed maturities 599,100
Proceeds from maturities of fixed maturities 131,180
Proceeds from sales of equity securities 109,682
Purchases of fixed maturities (1,058,894)
Purchases of equity securities (50,894)
Decrease in short term investments, net 60,086
Policy loans issued, net of repayments (12,011)
Mortgage loans, net 2,281
Other, net (6,061)
-------------
Net cash used in investing activities (225,531)
Financing Activities
Deposits credited to policyholders' funds 444,040
Withdrawals from policyholders' funds (138,071)
Mortgage debt principal payments (753)
Dividends to Parent (4,008)
Decrease in cash overdraft (5,373)
-------------
Net cash provided by financing activities 295,835
Increase in cash 0
-------------
Cash, beginning and end of year (Note 1) $ 0
=============
</TABLE>
See accompanying notes.
F-5
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 1995
1. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying financial statements reflect the consolidated life and health
insurance operations of Chubb Life Insurance Company of America and its
subsidiaries (the Company). Wholly-owned subsidiaries include Chubb America
Service Corporation, The Colonial Life Insurance Company of America (Colonial),
Chubb Investment Advisory Corporation, and Chubb Sovereign Life Insurance
Company (Sovereign). Majority-owned subsidiaries include ChubbHealth Holdings,
Inc. (ChubbHealth). Significant intercompany transactions have been eliminated
in consolidation. Chubb Life Insurance Company of America is wholly-owned by
The Chubb Corporation (the Parent).
ChubbHealth is an insurance holding company which owns 100% of ChubbHealth, Inc.
(CHI), a health maintenance organization (HMO). CHI commenced operations in the
New York City metropolitan area on June 1, 1994. ChubbHealth is jointly owned
by the Company and Healthsource, New York, Inc. (Healthsource). The Company
owns 85% of the outstanding stock of ChubbHealth.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP). The
consolidated financial statements reflect estimates and judgments made by
management which affect the reported amounts of 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.
Recognition of Revenues, Benefits, Claims and Expenses:
Universal Life Products
Universal life products include universal life insurance, variable
universal life insurance, and other interest-sensitive life insurance
policies. Revenues for universal life products consist of policy
charges for the cost of insurance, policy administration and
surrenders that have been assessed against policy account balances
during the period.
F-6
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Policy fund liabilities for universal life and other interest-
sensitive life insurance policies are computed in accordance with the
retrospective deposit method and represent policy account balances
before surrender charges. Policy fund assets and liabilities for
variable universal life insurance are segregated and recorded as
separate account assets and liabilities. Separate account assets are
carried at market values as of the balance sheet date and are
invested by the Company at the direction of the policyholder.
Investments are made in one or more of fifteen portfolios in a series
fund. Each of the portfolios has specific investment objectives and
the investment income and investment gains and losses accrue directly
to, and investment risk is borne by, the policyholders. Accordingly,
operating results of the separate account are not included in the
consolidated statements of income.
Policy claims that are charged to expense include claims incurred in
the period in excess of related policy account balances. Other policy
benefits include interest credited to universal life and other
interest-sensitive life insurance policies. Interest crediting rates
ranged from 4 3/4% to 7 5/8%.
Investment Products
Investment products include flexible premium annuities, structured
settlement annuities and other supplementary contracts without life
contingencies. Revenues for investment products consist of policy
charges for the cost of insurance, policy administration and
surrenders that have been assessed against policy account balances
during the period. Deposits for these products are recorded as policy
fund liabilities, which are increased by interest credited to the
liabilities and decreased by withdrawals and administrative charges
assessed against the contract holders. Interest crediting rates
ranged from 3 1/2% to 8%.
Traditional Life Insurance Products
Traditional life insurance products include those products with fixed
and guaranteed premiums and benefits. Premium revenues for
traditional life insurance are recognized as revenues when due. The
liabilities for future policy benefits are computed by the net level
premium method based on estimated future investment yield, mortality
and withdrawal experience. Interest rate assumptions ranged from 3%
to 9%. Mortality is calculated principally on an experience multiple
applied to select and ultimate tables in common usage in the
industry. Estimated withdrawals are determined principally based on
industry tables. Policy benefits and claims are charged to expense as
incurred.
F-7
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Accident and Health Insurance
Accident and health insurance premiums are earned on a monthly pro
rata basis over the terms of the policies. Benefits include paid
claims plus an estimate for known claims and claims incurred but not
reported as of the balance sheet date.
Reinsurance
In the ordinary course of business, the Company and its insurance
subsidiaries assume and cede reinsurance with other insurance
companies. These arrangements minimize the maximum net loss potential
arising from large risks. Reinsurance contracts do not relieve the
Company and its insurance subsidiaries from their obligation to
policyholders. The Company evaluates the financial condition of its
reinsurers and monitors concentrations of credit risk arising from
similar activities or economic characteristics of the reinsurers to
minimize its exposure to significant losses from reinsurer
insolvencies.
Reinsurance recoverable on life and health policy liabilities
represent estimates of the portion of such liabilities that will be
recovered from reinsurers, determined in a manner consistent with the
liabilities associated with the reinsured policies.
Deferred Policy Acquisition Costs
Certain costs of acquiring insurance contracts, principally
commissions, underwriting costs and certain variable field office
expenses are deferred. Deferred policy acquisition costs for
universal life and investment contracts are amortized over the lives
of the contracts in relation to the present value of estimated gross
profits expected to be realized. Deferred policy acquisition costs
related to universal life and investment contracts are also adjusted
to reflect the effects that the unrealized gains or losses on
investments classified as available-for-sale would have had on the
present value of estimated gross profits had such gains or losses
actually been realized. This adjustment is excluded from income and
charged or credited directly to the unrealized appreciation or
depreciation of the investments component of shareholder's equity,
net of applicable deferred income tax.
Traditional life insurance deferred policy acquisition costs are
being amortized over the premium-payment period of the related
policies using assumptions consistent with those used in computing
policy benefit reserves.
F-8
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Value Assigned Purchased Insurance In Force
The value assigned purchased insurance in force is amortized
principally over the estimated life of the insurance in force at the
date of acquisition in proportion to the emergence of profit using
assumptions consistent with those used in the amortization of the
deferred policy acquisition costs. Interest accrues on the
unamortized balance at rates ranging from 6% to 9 1/4%. Value
assigned purchased insurance in force related to universal life and
investment contracts is also adjusted to reflect the effects that the
unrealized gains or losses on investments classified as available-
for-sale would have had on the present value of estimated gross
profits had such gains or losses actually been realized. This
adjustment is excluded from income and charged or credited directly
to the unrealized appreciation or depreciation of the investments
component of shareholder's equity, net of applicable deferred income
tax.
Invested Assets
Short term investments, which have an original maturity of one year or less, are
carried at amortized cost.
Fixed maturities, which include bonds and redeemable preferred stocks, are
purchased to support the investment strategies of the Company. These strategies
are developed based on many factors including rate of return, maturity, credit
risk, tax considerations and regulatory requirements. Those fixed maturities
which the Company has the ability and intent to hold to maturity are considered
held-to-maturity and carried at amortized cost. Fixed maturities which may be
sold prior to maturity to support the investment strategies of the Company are
considered available-for-sale and carried at market value as of the balance
sheet date.
Equity securities, which include common stocks and non-redeemable preferred
stocks, are carried at market values as of the balance sheet dates.
Policy loans are carried at the unpaid balances. Mortgage loans on real estate
are carried at the unpaid balances, adjusted for amortization of premium or
discount.
Realized gains and losses on the sale of investments are determined on the basis
of the cost of the specific investments sold and are credited or charged to
income. Unrealized appreciation or depreciation on those investments which are
carried at market value is excluded from income and credited or charged directly
to a separate component of shareholder's equity.
F-9
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Goodwill
Goodwill, which represents the excess of the purchase price over the fair value
of net assets of subsidiaries acquired, is amortized using the straight-line
method over 40 years.
Property and Equipment
Property and equipment used in operations are carried at cost less accumulated
depreciation. Depreciation is calculated using the straight-line method over
the estimated useful lives of the assets.
Federal Income Taxes
The Company files a consolidated federal income tax return with its parent.
Federal income tax is allocated as if the Company and its subsidiaries filed a
separate consolidated income tax return. Deferred income tax assets and
liabilities are recognized for the expected future tax effects attributable to
temporary differences between the financial reporting and tax bases of assets
and liabilities, based on enacted tax rates and other provisions of tax law.
Deferred income taxes related to unrealized appreciation or depreciation of
investments carried at market value are charged or credited directly to a
separate component of shareholder's equity.
Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted market prices where
available. Fair values of financial instruments for which quoted market prices
are not available are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rates and the estimates of future cash flows.
Accordingly, the derived fair value estimates cannot be substantiated by
comparison to independent markets and are not necessarily indicative of the
amounts that could be realized in immediate settlement of the instrument.
Certain financial instruments, particularly insurance contracts, are excluded
from fair value disclosure requirements.
The methods and assumptions used to estimate the fair value of financial
instruments are as follows:
. Fair values of fixed maturities with active markets are based on quoted
market prices. For fixed maturities that trade in less active markets, fair
values are obtained from independent pricing services. Fair values of fixed
maturities are principally a function of current interest rates. Care should
be used in evaluating the significance of these estimated market values.
. Fair values of equity securities are based on quoted market prices.
F-10
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
. The carrying value of short term investments approximates fair value due to
the short maturities of these investments.
. Fair values of policy loans and mortgage loans are estimated using
discounted cash flow analyses and approximate carrying values.
. The carrying value of short term debt approximates fair value due to the
short maturities of the debt.
The carrying value and fair value of financial instruments at December 31, 1995
are as follows:
<TABLE>
<CAPTION>
Carrying Fair
Value Value
(In thousands)
<S> <C> <C>
Assets
Invested assets
Fixed maturities
Held-to-maturity $ 403,539 $ 434,972
Available-for-sale 2,255,951 2,255,951
Equity securities 40,208 40,208
Short term investments 55,222 55,222
Policy loans 202,705 202,705
Mortgage loans on real estate 9,634 9,634
Liabilities
Short term debt 36,000 36,000
</TABLE>
Cash Flow Information
In the statement of cash flows, short term investments are not considered to be
cash equivalents. Cash overdrafts are included in accrued expenses and other
liabilities. The overdrafts at December 31, 1995 were $24,201,000.
F-11
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Invested Assets
The sources of net investment income for the year ended December 31, 1995 were
as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Fixed maturities $208,598
Equity securities 3,544
Short term investments 4,536
Policy loans 14,219
Mortgage loans 1,014
Other 1,039
---------------
Gross investment income 232,950
Investment expenses 2,860
---------------
Net investment income $230,090
===============
</TABLE>
Realized investment gains and losses for the year ended December 31, 1995 were
as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Gross realized investment gains
Fixed maturities $ 14,902
Equity securities 13,052
---------------
$ 27,954
===============
Gross realized investment losses
Fixed maturities $ 4,409
Equity securities 1,737
---------------
$ 6,146
===============
Net realized investment gains
Fixed maturities $ 10,493
Equity securities 11,315
---------------
$ 21,808
===============
</TABLE>
Proceeds from the sales of fixed maturities considered available-for-sale were
$599,100,000. Gross gains of $14,902,000 and gross losses of $4,409,000 were
realized on such sales in 1995.
F-12
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Invested Assets (continued)
The components of unrealized appreciation (depreciation) of investments carried
at market value at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Equity securities
Gross unrealized appreciation $ 6,014
Gross unrealized depreciation 135
--------------
5,879
Fixed maturities
Gross unrealized appreciation 111,324
Gross unrealized depreciation 9,276
--------------
102,048
--------------
107,927
Deferred policy acquisition costs adjustment (41,850)
Value assigned purchased insurance in force adjustment (3,397)
--------------
(45,247)
Minority interest in unrealized appreciation (34)
Deferred tax liability, net 21,926
--------------
$ 40,720
==============
</TABLE>
The changes in unrealized appreciation or depreciation of investments carried at
market value for the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Change in unrealized appreciation of equity securities $ 913
Change in unrealized appreciation of fixed maturities 158,427
Change in deferred policy acquisition costs adjustment (65,395)
Change in value assigned purchased insurance in force
adjustment (6,835)
--------------
87,110
Deferred income tax 30,490
Decrease in valuation allowance (18,007)
--------------
$ 74,627
==============
</TABLE>
The cost of equity securities was $34,329,000 at December 31, 1995.
F-13
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Invested Assets (continued)
The amortized costs and estimated market value of fixed maturities at December
31, 1995 were as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Held-to-maturity
Tax exempt bonds $ 1,051 $ 38 $ 1,089
----------------------------------------------------
Taxable
U. S. Government and
government agency and
authority obligations 17,947 2,350 20,297
Corporate bonds 191,126 21,621 212,747
Foreign bonds 15,119 2,259 17,378
Mortgage-backed securities 178,296 5,211 $ 46 183,461
----------------------------------------------------
Total taxable 402,488 31,441 46 433,883
----------------------------------------------------
Total held-to-maturity 403,539 31,479 46 434,972
----------------------------------------------------
Available-for-sale
Taxable
U. S. Government and
government agency and
authority obligations 191,984 6,746 3 198,727
Corporate bonds 805,768 49,752 6,794 848,726
Foreign bonds 134,224 6,847 70 141,001
Mortgage-backed securities 1,019,223 47,770 2,389 1,064,604
Redeemable preferred stocks 2,704 209 20 2,893
----------------------------------------------------
Total available-for-sale 2,153,903 111,324 9,276 2,255,951
----------------------------------------------------
Total fixed maturities $2,557,442 $142,803 $9,322 $2,690,923
====================================================
</TABLE>
At December 31, 1995, fixed maturities classified as held-to-maturity were
carried at amortized cost while fixed maturities classified as available-for-
sale were carried at market value. The unrealized appreciation or depreciation
of fixed maturities carried at amortized cost is not reflected in the financial
statements. The change in net unrealized appreciation of such fixed maturities
was $46,406,000 for the year ended December 31, 1995.
In December 1995, fixed maturities classified as held-to-maturity with an
aggregate amortized cost of $182,820,000 and unrealized appreciation of
$3,885,000 were reclassified as available-for-sale. Such reclassifications
resulted from the Company's reassessment of its classifications of fixed
maturities as permitted under Statement of Financial Accounting Standards (SFAS)
No. 115 implementation guidance issued by the Financial Accounting Standards
Board (FASB) in November 1995.
F-14
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Invested Assets (continued)
The amortized cost and estimated market value of fixed maturities at December
31, 1995 by contractual maturity were as follows:
<TABLE>
<CAPTION>
Held-to-Maturity Available-for-Sale
---------------------------------------------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
---------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 10,765 $ 11,170 $ 17,371 $ 17,765
Due after one year through
five years 54,445 60,569 231,010 243,106
Due after five years through
ten years 70,736 80,249 325,537 347,544
Due after ten years 89,297 99,523 560,762 582,932
---------------------------------------------------
Subtotal 225,243 251,511 1,134,680 1,191,347
Mortgage-backed securities 178,296 183,461 1,019,223 1,064,604
---------------------------------------------------
$403,539 $434,972 $2,153,903 $2,255,951
===================================================
</TABLE>
Actual maturities could differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.
3. Deferred Policy Acquisition Costs and Value Assigned Purchased Insurance In
Force
Policy acquisition costs deferred and the related amortization charged to income
for the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Balance, beginning of year $558,345
Cost deferred during year 155,903
Amortization during year (73,239)
Change in adjustment to reflect the effects of unrealized
appreciation of investments (65,395)
---------------
Balance, end of year $575,614
===============
</TABLE>
F-15
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Deferred Policy Acquisition Costs and Value Assigned Purchased Insurance In
Force (continued)
Changes in the value assigned purchased insurance in force for the year ended
December 31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Balance, beginning of year $48,148
Accrued interest 3,603
Amortization (7,821)
Change in adjustment to reflect the effects of unrealized
appreciation of investments (6,835)
---------------
Balance, end of year $37,095
===============
</TABLE>
The estimated net amortization of the value assigned purchased insurance in
force is as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Year Ending December 31:
1996 $ 3,904
1997 3,664
1998 3,338
1999 2,865
2000 2,510
Subsequent to 2000 20,814
---------------
$37,095
===============
</TABLE>
4. Federal Income Taxes
Federal income tax provisions for the year ended December 31, 1995 have been
computed using the tax rates and regulations in effect during the year. The
provision for federal income tax gives effect to permanent differences between
financial and taxable income. Accordingly, the effective tax rate is less than
the statutory federal corporate tax rate. The reasons for the lower effective
tax rate were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Tax at statutory federal income tax rate (35%) $21,738
Dividends received deduction and tax exempt income (1,469)
Amortization of goodwill 394
Foreign taxes (620)
Other 814
---------------
Federal income tax expense $20,857
===============
</TABLE>
F-16
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Federal Income Taxes (continued)
The tax effects of temporary differences that gave rise to deferred income tax
liabilities and assets at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Deferred income tax liabilities:
Deferred policy acquisition costs $155,594
Value assigned purchased insurance in force 19,365
Unrealized appreciation in investments 43,842
Other 7,113
---------------
Total 225,914
Deferred income tax assets:
Future policy benefits and policy fund balances 147,284
Postretirement benefits 8,146
---------------
Total 155,430
---------------
Net deferred income tax liabilities $ 70,484
===============
</TABLE>
Prior to 1984, life insurance companies were allowed certain special deductions
for federal income tax purposes which could become subject to tax at normal
rates under certain circumstances, including distribution to shareholders.
These special deductions were set aside in a Policyholders' Surplus Account.
Under the 1984 Act, no further additions to this account are permitted. At
December 31, 1995, approximately $13,464,000 of untaxed retained earnings
remained. No income taxes have been provided since management does not
anticipate any transaction that would cause this remaining amount to become
taxable. The unrecognized deferred tax related to the Policyholders' Surplus
Account is $4,712,000.
Federal income taxes paid in 1995 were $26,456,000.
5. Pensions and Other Postretirement Benefits
The Company has several noncontributory defined benefit pension plans covering
substantially all employees. The benefits are generally based on an employee's
years of service and average compensation during the last five years of
employment. Pension costs are determined using the projected unit credit
method. The Company's policy is to make annual contributions that meet the
minimum funding requirements of the Employee Retirement Income Security Act of
1974. Contributions are intended to provide not only for benefits attributed to
service but also for those expected to be earned in the future.
F-17
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Pensions and Other Postretirement Benefits (continued)
The components of net pension cost for the year ended December 31, 1995 were as
follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Service cost of current period $ 3,510
Interest cost on projected benefit obligation 5,687
Actual return on plan assets (6,286)
Net amortization and deferral (152)
-----------------
Net pension cost $ 2,759
=================
</TABLE>
During 1995, the Company recognized a net curtailment gain of $3,058,000
resulting from workforce reductions. This gain is primarily due to the
reduction of the projected benefit obligation associated with severed employees'
pension benefits offset by the recognition of the prior service costs related to
those employees.
The following table sets forth the plans' funded status and amounts recognized
in the balance sheet at December 31, 1995:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Actuarial present value of benefit obligations for service
rendered to date:
Accumulated benefit obligations, including vested benefits
of $61,983 $64,472
Additional amount related to projected future salary increases 16,303
----------------
Projected benefit obligation for service rendered to date 80,775
Plan assets at fair value 80,694
----------------
Projected benefit obligation in excess of plan assets 81
Unrecognized net gain from past experience different from
that assumed 7,230
Unrecognized prior service cost (2,499)
Unrecognized net obligation at January 1, 1986 being
recognized over thirteen years 890
----------------
Pension liability included in other liabilities $ 5,702
================
</TABLE>
The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligations at December 31, 1995 was 7 1/2% and
the rate of increase in future compensation levels was 6%. The expected long-
term rate of return on assets was 9%.
Plan assets are principally invested in publicly traded stocks and bonds.
The Company provides certain other postretirement benefits, principally health
care and life insurance, to retired employees and their beneficiaries and
covered dependents. Substantially all employees may become eligible for these
benefits upon retirement if they meet minimum age and years of service
requirements.
F-18
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Pensions and Other Postretirement Benefits (continued)
The Company does not fund these benefits in advance. Benefits are paid as
covered expenses are incurred. Health care coverage is contributory. Retiree
contributions vary based upon a retiree's age, type of coverage and years of
service with the Company. Life insurance coverage is noncontributory.
The components of net postretirement benefit cost for the year ended December
31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Service cost of current period $1,095
Interest cost on projected benefit obligation 1,540
---------------
Net postretirement benefit cost $2,635
===============
</TABLE>
During 1995, the Company recognized a net curtailment gain of $1,243,000
resulting from workforce reductions. This gain is primarily due to the
reduction of the accumulated postretirement benefit obligation associated with
severed employees' other postretirement benefits.
The components of the accumulated postretirement benefit obligation at December
31, 1995 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Retirees $ 9,392
Fully eligible active plan participants 1,310
Other active plan participants 11,139
---------------
Accumulated postretirement benefit obligation 21,841
Unrecognized net gain from past experience different
from that assumed 1,066
---------------
Postretirement benefit liability included in
other liabilities $22,907
===============
</TABLE>
The weighted average discount rate used in determining the actuarial present
value of the accumulated postretirement benefit obligation at December 31, 1995
was 7 1/2%. The health care cost trend rate used to measure the accumulated
postretirement cost for medical benefits is 11 1/2% for 1996. The rate is
assumed to decrease gradually to 7 1/2% for the year 2005 and remain at that
level thereafter. The health care cost trend rate assumption has a significant
effect on the amount of the accumulated postretirement benefit obligation and
the net postretirement benefit cost reported. To illustrate, a one percent
increase in the trend rate for each year would increase the accumulated
postretirement benefit obligation at December 31, 1995 by $2,796,000 and the
aggregate of the service and interest cost components of net postretirement
benefit cost for the year ended December 31, 1995 by $377,000.
F-19
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. Stock Ownership and Incentive Plans
Substantially all of the Company's employees are eligible to participate in the
stock ownership and incentive plans of the Parent. The aggregate costs
associated with the plans were approximately $4,365,000 for the year ended
December 31, 1995.
7. Rent Expense and Commitments
The Company occupies office facilities under lease agreements which expire at
various dates through 2009; such leases generally are renewed or replaced by
other leases. In addition, the Company leases office and transportation
equipment.
Total rent expense charged to operations amounted to approximately $5,560,000
for 1995. All leases are operating leases and generally contain renewal options.
At December 31, 1995, future minimum rental payments required under
noncancellable operating leases were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Year Ending December 31:
1996 $ 4,016
1997 3,264
1998 2,510
1999 1,946
2000 1,592
Subsequent to 2000 7,817
-----------------
$21,145
=================
</TABLE>
F-20
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Reinsurance
The Company is involved in both the cession and assumption of reinsurance with
other insurance companies. Risks are reinsured with other companies to permit
the recovery of a portion of the direct losses. Sovereign had a reinsurance
recoverable resulting from a reinsurance agreement with a single reinsurer of
$101,656,000 at December 31, 1995. Sovereign coinsured fifty percent of a block
of single premium whole life policies under this agreement. Sovereign and the
reinsurer are joint and equal owners in securities and short-term investments of
$193,146,000 at December 31, 1995. The remaining reinsurance recoverables were
associated with numerous other reinsurers. The maximum amount of individual
life insurance retained on any one life, including accidental death benefits, is
$1,400,000.
The effect of reinsurance on the premiums and policy charges in the consolidated
statement of income for the year ended December 31, 1995 was as follows:
<TABLE>
<CAPTION>
Ceded to Assumed
Direct Other from Other Net
Amount Companies Companies Amount
-------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Premiums Earned and Policy
Charges for the year:
Life Insurance $332,968 $20,740 $1,766 $313,994
Accident and Health Insurance 319,067 10,124 308,943
-------------------------------------------------
Total Premiums and Policy
Charges $652,035 $30,864 $1,766 $622,937
=================================================
</TABLE>
Reinsurance recoveries which have been deducted from benefits, claims and
expenses in the consolidated statement of income was $50,537,000 in 1995.
F-21
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Accident and Health Unpaid Claims
The process of estimating loss reserves is an imprecise science and reflects
significant judgmental factors. Management considers facts currently known and
the present state of health care markets in which it operates when establishing
accident and health claim reserves. Management believes that the aggregate
claim liabilities at December 31, 1995 are adequate to cover claims for losses
which have occurred, including both those known and those yet to be reported.
However, changes in market conditions may require additional increases in claim
reserves which may adversely affect results in future periods. This emergence
cannot be precisely estimated.
A reconciliation of the beginning and ending liability for accident and health
unpaid claims, net of reinsurance recoverable, and a reconciliation of the net
liability to the corresponding liability on a gross basis at December 31, 1995
is as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Gross liability at beginning of year $105,075
Less: reinsurance recoverable 1,545
---------------
Net liability at beginning of year 103,530
Incurred:
Current year 240,306
Prior years (11,773)
---------------
Total incurred 228,533
Paid:
Current year 190,760
Prior years 78,771
---------------
Total Paid 269,531
---------------
Net liability at end of year 62,532
Plus: reinsurance recoverable 1,650
---------------
Gross liability at end of year $ 64,182
===============
</TABLE>
During 1995, the accident and health business experienced overall favorable
development of $11,773,000 on claim reserves established as of the previous year
end. This difference has been reflected in operating results. Claims settlement
costs are not developed as part of the claim liability and are reflected in
operating results in the years the claims are paid.
F-22
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Dividend Restrictions
The Company and its insurance subsidiaries are required to file annual
statements with state insurance regulatory authorities prepared on an accounting
basis prescribed or permitted by such authorities (statutory basis). For such
subsidiaries, GAAP differs in certain respects from statutory accounting
practices.
A comparison of shareholder's equity on a GAAP basis and policyholders' surplus
on a statutory basis at December 31, 1995 is as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
GAAP $844,645
Statutory 317,624
</TABLE>
A comparison of GAAP and statutory net income for the year ended December 31,
1995 is as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
GAAP $ 42,216
Statutory 26,828
</TABLE>
The amount of GAAP surplus in excess of statutory surplus is unavailable for
distribution. In addition, various state insurance laws restrict the Company
and its insurance subsidiaries as to the amount of dividends from statutory
surplus they may pay without the prior approval of regulatory authorities. The
restrictions generally are based on net gains from operations and on certain
levels of policyholders' surplus as determined in accordance with statutory
accounting practices. Dividends in excess of such thresholds are considered
"extraordinary" and require prior regulatory approval. The maximum ordinary
dividend distribution that may be made by the Company to the Parent during 1996
is approximately $31,700,000.
F-23
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. Debt and Credit Arrangements
(a) Short term debt at December 31, 1996 consisted of the following:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Commercial paper $26,000
Notes 10,000
---------------
$36,000
===============
</TABLE>
The short term commercial paper was issued by Chubb Capital Corporation, a
subsidiary of the Parent. The interest rate is variable and is based on Chubb
Capital Corporation's cost of funds. Interest paid on the borrowings in 1995
was $1,559,000. In addition, the Company has a loan agreement with a bank
providing for a line of credit of $36,000,000 at a variable interest rate.
There were $10,000,000 in borrowings against this line of credit at December 31,
1995. Interest paid on these borrowings was $683,000 in 1995.
(b) Long term debt consisted of the following:
A mortgage loan payable, which is secured by a portion of the Company's home
office property in Concord, New Hampshire, bears interest at 11 3/8% and is
payable monthly through December 2000.
Debt maturities of the mortgage loan payable are as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Year Ending December 31:
1996 $ 843
1997 944
1998 1,057
1999 1,184
2000 1,184
---------------
$5,212
===============
</TABLE>
Interest paid on the mortgage loan in 1995 was $640,000.
F-24
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Business Segments
The Company is principally engaged in the sale of individual and group life and
health insurance products. These products are marketed primarily through
personal producing general agents and brokers throughout the United States.
Insurance revenues, net investment income and earnings before federal income
taxes for the year ended December 31, 1995 for each class of business were as
follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Revenues:
Individual insurance:
Premiums and policy charges $311,275
Investment income 222,947
Group insurance:
Premiums 311,662
Investment income 7,143
Earnings (loss) before federal income
taxes and minority interest:
Individual insurance 55,546
Group insurance (15,246)
Realized gains 21,808
--------------
$ 62,108
==============
</TABLE>
It is not practicable to determine identifiable assets and capital expenditures
applicable to the foregoing classes of business.
Earnings before federal income taxes by class of business reflect allocations of
investment income and significant expenses using allocation methods deemed to be
reasonable. Other acceptable allocation methods could produce different results
by groupings of classes of business.
F-25
<PAGE>
Chubb Life Insurance Company of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Accounting Pronouncements Not Yet Adopted
In March 1995, the FASB issued SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Statement
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets. Under
SFAS No. 121, an impairment loss is recognized if the sum of the undiscounted
expected future cash flows is less than the carrying amount of the asset.
Measurement of impairment should be based on the fair value of the asset. SFAS
No. 121 is effective for years beginning after December 15, 1995. Restatement
of prior years' financial statements is not permitted. The company will adopt
SFAS No. 121 in the first quarter of 1996. The adoption is not expected to have
a significant impact on net income in 1996.
14. Litigation
The Company is involved in pending or threatened lawsuits arising from the
normal conduct of its insurance business. Several suits have been brought
against the Company seeking both punitive and compensatory damages. Management
is of the opinion that these suits are substantially without merit, that valid
defenses exist, and that such litigation will not have a material effect on the
consolidated financial statements.
F-26
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Contractholders
Chubb Separate Account A
We have audited the accompanying statement of assets and liabilities of Chubb
Separate Account A (the "Separate Account", comprising respectively, the World
Growth Stock Division, Money Market Division, Gold Stock Division, Domestic
Growth Stock Division, Bond Division, Growth and Income Division, Capital Growth
Division, Balanced Division, Emerging Growth Division, and Templeton Division)
as of December 31, 1995, and the related statements of operations and changes in
net assets for each of the three years in the period then ended, except for the
Emerging Growth Division and Templeton Division, for which the statement of
operations and statement of changes in net assets are for the period from May 1,
1995 (Commencement of Operations) to December 31, 1995. These financial
statements are the responsibility of the Separate Account'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 investments owned as of December 31, 1995, by correspondence
with the applicable 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 each of the respective
divisions constituting the Chubb Separate Account A at December 31, 1995, the
results of their operations and the changes in their net assets for each of the
periods indicated above, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Boston, Massachusetts
March 8, 1996
F-27
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
Chubb Separate Account A
December 31, 1995
World Domestic
Growth Money Gold Growth
Stock Market Stock Stock Bond
Division Division Division Division Division
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $ 64,572,886 $ 8,550,714 $ 6,331,508 $ 41,547,976 $ 9,070,739
============== ============== ============== ============== ==============
Investments at market value $ 73,692,356 $ 8,312,676 $ 6,867,645 $ 48,517,886 $ 9,230,090
Accrued investment income 3,151,912 401,686 37,521 6,058,448 644,900
Net premiums receivable (payable) 82,795 84,344 (13,694) 63,628 836
-------------- -------------- -------------- -------------- --------------
76,927,063 8,798,706 6,891,472 54,639,962 9,875,826
Amounts receivable (payable) for
units purchased/(redeemed) (75,619) 0 24,036 (116,093) 0
-------------- -------------- -------------- -------------- --------------
TOTAL NET ASSETS $ 76,851,444 $ 8,798,706 $ 6,915,508 $ 54,523,869 $ 9,875,826
============== ============== ============== ============== ==============
NET ASSET DISTRIBUTION
Ensemble $ 1,822,626 $ 68,283 $ 185,468 $ 824,059 $ 26,004
Ensemble II 75,028,818 8,730,423 6,730,040 53,699,810 9,849,822
-------------- -------------- -------------- -------------- --------------
TOTAL NET ASSETS $ 76,851,444 $ 8,798,706 $ 6,915,508 $ 54,523,869 $ 9,875,826
============== ============== ============== ============== ==============
UNITS OUTSTANDING
Ensemble 59,238 4,305 11,251 25,007 1,335
Ensemble II 2,501,941 565,033 418,966 1,673,054 518,907
NET ASSET VALUE PER UNIT
Ensemble $ 30.77 $ 15.86 $ 16.48 $ 32.95 $ 19.48
Ensemble II 29.99 15.45 16.06 32.10 18.98
<CAPTION>
Growth Capital Emerging
and Income Growth Balanced Growth Templeton
Division Division Division Division Division
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at cost $ 11,461,493 $ 40,073,244 $ 13,528,866 $ 6,984,520 $ 7,330,508
============== ============== ============== ============== ==============
Investments at market value $ 12,787,993 $ 49,618,795 $ 14,328,207 $ 7,443,430 $ 7,687,549
Accrued investment income 514,460 4,538,514 1,226,042 0 0
Net premiums receivable (payable) 54,085 109,930 6,939 253,069 9,253
-------------- -------------- -------------- -------------- --------------
13,356,538 54,267,239 15,561,188 7,696,499 7,696,802
Amounts receivable (payable) for
units purchased/(redeemed) (30,931) (131,600) 224 (109,157) 0
-------------- -------------- -------------- -------------- --------------
TOTAL NET ASSETS $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802
============== ============== ============== ============== ==============
NET ASSET DISTRIBUTION
Ensemble
Ensemble II $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802
-------------- -------------- -------------- -------------- --------------
TOTAL NET ASSETS $ 13,325,607 $ 54,135,639 $ 15,561,412 $ 7,587,342 $ 7,696,802
============== ============== ============== ============== ==============
UNITS OUTSTANDING
Ensemble
Ensemble II 841,523 2,588,397 1,113,152 575,117 691,356
NET ASSET VALUE PER UNIT
Ensemble
Ensemble II $ 15.84 $ 20.91 $ 13.98 $ 13.19 $ 11.13
</TABLE>
See notes to financial statements.
F-28
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
Chubb Separate Account A
World Growth Stock Division
---------------------------------------
Year Ended December 31,
1995 1994 1993
------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend income $ 1,504,890 $ 677,535 $ 445,539
Distributions of realized gains 1,647,022 2,617,290 2,339,067
-------------- -------------- ------------
3,151,912 3,294,825 2,784,606
Expenses:
Mortality and expense risk charge 607,380 432,600 274,208
-------------- -------------- ------------
Net Investment Income (Loss) 2,544,532 2,862,225 2,510,398
-------------- -------------- ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 1,175,160 920,083 115,190
Change in net unrealized gain (loss)
on investments 6,318,978 (6,066,376) 6,509,695
-------------- -------------- ------------
Net gain (loss) on investments 7,494,138 (5,146,293) 6,624,885
-------------- -------------- ------------
Increase (Decrease) in
Net Assets from Operations $ 10,038,670 $ (2,284,068) $ 9,135,283
============== ============== ============
<CAPTION>
Money Market Division
------------------------------------------
Year Ended December 31,
1995 1994 1993
------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend Income $ 401,686 $ 227,166 $ 70,112
Distributions of realized gains 0 0 20
-------------- -------------- ------------
401,686 227,166 70,132
Expenses:
Mortality and expense risk charge 70,796 58,706 24,612
-------------- -------------- ------------
Net Investment Income (Loss) 330,890 168,460 45,520
-------------- -------------- ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 118,929 49,632 (11,509)
Change in net unrealized gain (loss)
on investments (132,246) (57,699) 5,734
-------------- -------------- ------------
Net gain (loss) on investments (13,317) (8,067) (5,775)
-------------- -------------- ------------
Increase (Decrease) in
Net Assets from Operations $ 317,573 $ 160,393 $ 39,745
============== ============== ============
<CAPTION>
Gold Stock Division
---------------------------------------
Year Ended December 31,
1995 1994 1993
---------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend Income $ 37,550 $ 9,726 $ 5,134
Distributions of realized gains 0 39,947 0
-------------- -------------- ------------
37,550 49,673 5,134
Expenses:
Mortality and expense risk charge 67,504 58,273 38,685
-------------- -------------- ------------
Net Investment Income (Loss) (29,954) (8,600) (33,551)
-------------- -------------- ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 172,991 122,084 100,914
Change in net unrealized gain (loss)
on investments 91,937 (1,174,863) 2,035,628
-------------- -------------- ------------
Net gain (loss) on investments 264,928 (1,052,779) 2,136,542
-------------- -------------- ------------
Increase (Decrease) in
Net Assets from Operations $ 234,974 $ (1,061,379) $ 2,102,991
============== ============== ============
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Domestic Growth Stock Division
---------------------------------------------------
Year Ended December 31,
1995 1994 1993
---------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend income $ 404,753 $ 180,735 $ 164,438
Distributions of realized gains 6,680,921 2,374,949 1,844,176
-------------- ------------ ------------
7,085,674 2,555,684 2,008,614
Expenses:
Mortality and expense risk charge 376,813 247,394 190,522
-------------- ------------ ------------
Net Investment Income (Loss) 6,708,861 2,308,290 1,818,092
-------------- ------------ ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 194,361 358,705 317,906
Change in net unrealized gain (loss)
on investments 3,886,548 (753,758) 882,353
-------------- ------------ ------------
Net gain (loss) on investments 4,080,909 (395,053) 1,200,259
-------------- ------------ ------------
Increase (Decrease) in
Net Assets from Operations $ 10,789,770 $ 1,913,237 $ 3,018,351
============== ============ ============
<CAPTION>
Bond Division
---------------------------------------------------
Year Ended December 31,
1995 1994 1993
---------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend income $ 644,900 $ 420,955 $ 272,047
Distributions of realized gains 0 0 23,455
------------ ----------- -----------
644,900 420,955 295,502
Expenses:
Mortality and expense risk charge 85,025 54,890 30,664
------------ ----------- -----------
Net Investment Income (Loss) 559,875 366,065 264,838
------------ ----------- -----------
Gain (loss) on investments:
Net realized gain (loss) on
investments 129,555 (85,477) 12,556
Change in net unrealized gain (loss)
on investments 722,365 (455,167) (40,630)
------------ ----------- -----------
Net gain (loss) on investments 851,920 (540,644) (28,074)
------------ ----------- -----------
Increase (Decrease) in
Net Assets from Operations $ 1,411,795 $ (174,579) $ 236,764
============ =========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
STATEMENTS OF OPERATIONS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Growth and Income Division Capital Growth Division
------------------------------------ ------------------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1993 1995 1994 1993
------------------------------------ ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income $ 128,853 $ 51,623 $ 15,896 $ 82,406 $ 50,583 $ 0
Distributions of realized gains 385,608 142,202 36,065 4,456,108 617,006 1,071,775
------------ ---------- ---------- ------------- ------------ ------------
514,461 193,825 51,961 4,538,514 667,589 1,071,775
Expenses:
Mortality and expense risk charge 72,581 27,333 7,723 343,782 180,001 80,813
------------ ---------- ---------- ------------- ------------ ------------
Net Investment Income (Loss) 441,880 166,492 44,238 4,194,732 487,588 990,962
------------ ---------- ---------- ------------- ------------ ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 43,900 15,866 11,603 331,997 88,882 71,362
Change in net unrealized gain (loss)
on investments 1,598,713 (368,658) 73,548 9,191,593 (1,243,197) 1,148,856
------------ ---------- ---------- ------------- ------------ ------------
Net gain (loss) on investments 1,642,613 (352,792) 85,151 9,523,590 (1,154,315) 1,220,218
------------ ---------- ---------- ------------- ------------ ------------
Increase (Decrease) in
Net Assets from Operations $ 2,084,493 $ (186,300) $ 129,389 $ 13,718,322 $ (666,727) $ 2,211,180
============ ========== ========== ============= ============ ============
<CAPTION>
Balanced Division
-------------------------------------------
Year Ended December 31,
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividend income $ 448,590 $ 275,218 $ 134,116
Distributions of realized gains 831,663 93,822 98,843
----------- ----------- ----------
1,280,253 369,040 232,959
Expenses:
Mortality and expense risk charge 110,589 67,423 33,205
----------- ----------- ----------
Net Investment Income (Loss) 1,169,664 301,617 199,754
----------- ----------- ----------
Gain (loss) on investments:
Net realized gain (loss) on
investments 56,294 (8,145) 7,374
Change in net unrealized gain (loss)
on investments 1,204,925 (456,921) 28,107
----------- ----------- ----------
Net gain (loss) on investments 1,261,219 (465,066) 35,481
----------- ----------- ----------
Increase (Decrease) in
Net Assets from Operations $ 2,430,883 $ (163,449) $ 235,235
=========== =========== ==========
</TABLE>
See notes to financial statements
F-31
<PAGE>
STATEMENTS OF OPERATIONS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Emerging Growth Templeton
Division Division
------------ ------------
Period from Period from
May 1, 1995(a) May 1, 1995(a)
to to
December 31, December 31,
1995 1995
------------ ------------
<S> <C> <C>
Investment Income:
Dividend income $ 0 $ 0
Distributions of realized gains 0 0
------------- ------------
0 0
Expenses:
Mortality and expense risk charge 11,735 28,459
------------- ------------
Net Investment Income (Loss) (11,735) (28,459)
------------- ------------
Gain (loss) on investments:
Net realized gain (loss) on
investments 17,701 316,398
Change in net unrealized gain (loss)
on investments 458,910 357,041
------------- ------------
Net gain (loss) on investments 476,611 673,439
------------- ------------
Increase (Decrease) in
Net Assets from Operations $ 464,876 $ 644,980
============ ============
(a) Commencement of Operations
</TABLE>
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Chubb Separate Account A
<TABLE>
<CAPTION>
World Growth Stock Division Money Market Division
------------------------------------------ ------------------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1993 1995 1994 1993
------------------------------------------ ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 2,544,532 $ 2,862,225 $ 2,510,398 $ 330,890 $ 168,460 $ 45,520
Net realized gain(loss) on
investments 1,175,160 920,083 115,190 118,929 49,632 (11,509)
Change in net unrealized gain (loss)
on investments 6,318,978 (6,066,376) 6,509,695 (132,246) (57,699) 5,734
------------- ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets from
operations 10,038,670 (2,284,068) 9,135,283 317,573 160,393 39,745
Contractholder transactions--Note D:
Transfers of net premiums 22,926,705 20,141,970 10,534,248 4,965,203 6,850,296 2,446,574
Transfers from/to General Account
and within Separate Account, net (1,635,218) 2,759,340 2,603,096 (2,593,015) (2,828,836) (959,494)
Transfers of cost of insurance (6,834,515) (5,259,191) (3,317,866) (714,793) (694,325) (339,479)
Transfers on account of death (79,684) (63,356) (111,354) (2,545) (2,492) (2,759)
Transfers on account of other
terminations (2,840,771) (2,139,221) (1,077,794) (126,066) (145,435) (126,541)
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions 11,536,517 15,439,542 8,630,330 1,528,784 3,179,208 1,018,301
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 21,575,187 13,155,474 17,765,613 1,846,357 3,339,601 1,058,046
Balance at beginning of year 55,276,257 42,120,783 24,355,170 6,952,349 3,612,748 2,554,702
------------- ------------ ------------ ------------ ------------ ------------
Balance at end of year $ 76,851,444 $ 55,276,257 $ 42,120,783 $ 8,798,706 $ 6,952,349 $ 3,612,748
============= ============ ============ ============ ============ ============
<CAPTION>
Gold Stock Division
-------------------------------------------
Year Ended December 31,
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ (29,954) $ (8,600) $ (33,551)
Net realized gain(loss) on
investments 172,991 122,084 100,914
Change in net unrealized gain (loss)
on investments 91,937 (1,174,863) 2,035,628
------------ ------------ -----------
Increase (decrease) in net assets from
operations 234,974 (1,061,379) 2,102,991
Contractholder transactions--Note D:
Transfers of net premiums 2,002,953 1,974,134 972,208
Transfers from/to General Account
and within Separate Account, net (360,212) 112,918 292,134
Transfers of cost of insurance (720,341) (635,612) (435,879)
Transfers on account of death (10,951) (6,286) (10,117)
Transfers on account of other
terminations (324,994) (194,112) (168,171)
------------ ------------ -----------
Net increase (decrease) in net assets
derived from contractholder transactions 586,455 1,251,042 650,175
------------ ------------ -----------
Net increase (decrease) in net assets 821,429 189,663 2,753,166
Balance at beginning of year 6,094,079 5,904,416 3,151,250
------------ ------------ -----------
Balance at end of year $ 6,915,508 $ 6,094,079 $ 5,904,416
============ ============ ===========
</TABLE>
See notes to financial statements.
F-33
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Domestic Growth Stock Division Bond Division
------------------------------------------ ------------------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1993 1995 1994 1993
------------------------------------------ ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 6,708,861 $ 2,308,290 $ 1,818,092 $ 559,875 $ 366,065 $ 264,838
Net realized gain(loss) on
investments 194,361 358,705 317,906 129,555 (85,477) 12,556
Change in net unrealized gain (loss)
on investments 3,886,548 (753,758) 882,353 722,365 (455,167) (40,630)
------------- ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets from
operations 10,789,770 1,913,237 3,018,351 1,411,795 (174,579) 236,764
Contractholder transactions--Note D:
Transfers of net premiums 12,662,001 9,425,716 6,002,095 2,904,776 3,028,438 1,613,176
Transfers from/to General Account
and within Separate Account, net 4,798,054 166,220 (342,435) (5,156,597) 6,076,841 29,095
Transfers of cost of insurance (4,118,433) (2,925,627) (2,247,238) (918,529) (704,857) (452,925)
Transfers on account of death (63,789) (55,379) (66,057) (2,860) (21,087) (2,333)
Transfers on account of other
terminations (1,771,658) (1,059,998) (844,370) (436,792) (216,561) (191,483)
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions 11,506,175 5,550,932 2,501,995 (3,610,002) 8,162,774 995,530
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 22,295,945 7,464,169 5,520,346 (2,198,207) 7,988,195 1,232,294
Balance at beginning of year 32,227,924 24,763,755 19,243,409 12,074,033 4,085,838 2,853,544
------------- ------------ ------------ ------------ ------------ ------------
Balance at end of year $ 54,523,869 $ 32,227,924 $ 24,763,755 $ 9,875,826 $ 12,074,033 $ 4,085,838
============= ============ ============ ============ ============ ============
</TABLE>
See notes to financial statements.
F-34
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Growth and Income Division Capital Growth Division
----------------------------------------- -----------------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1993 1995 1994 1993
----------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 441,880 $ 166,492 $ 44,238 $ 4,194,732 $ 487,588 $ 990,962
Net realized gain(loss) on
investments 43,900 15,866 11,603 331,997 88,882 71,362
Change in net unrealized gain (loss)
on investments 1,598,713 (368,658) 73,548 9,191,593 (1,243,197) 1,148,856
------------- ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets from
operations 2,084,493 (186,300) 129,389 13,718,322 (666,727) 2,211,180
Contractholder transactions--Note D:
Transfers of net premiums 3,961,606 2,429,810 1,048,058 16,405,660 12,963,387 6,951,258
Transfers from/to General Account
and within Separate Account, net 3,929,594 1,285,556 263,574 3,400,177 2,594,799 2,870,910
Transfers of cost of insurance (1,064,970) (525,589) (164,878) (4,336,652) (2,783,710) (1,331,149)
Transfers on account of death (3,375) (1,953) (17,451) (20,715) (8,862)
Transfers on account of other
terminations (161,477) (67,115) (10,981) (1,543,687) (441,447) (3,560)
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions 6,661,378 3,120,709 1,135,773 13,908,047 12,312,314 8,478,597
------------- ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets 8,745,871 2,934,409 1,265,162 27,626,369 11,645,587 10,689,777
Balance at beginning of year 4,579,736 1,645,327 380,165 26,509,270 14,863,683 4,173,906
------------- ------------ ------------ ------------ ------------ ------------
Balance at end of year $ 13,325,607 $ 4,579,736 $ 1,645,327 $ 54,135,639 $ 26,509,270 $ 14,863,683
============= ============ ============ ============ ============ ============
<CAPTION>
Balanced Division
-----------------------------------------
Year Ended December 31,
1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ 1,169,664 $ 301,617 $ 199,754
Net realized gain(loss) on
investments 56,294 (8,145) 7,374
Change in net unrealized gain (loss)
on investments 1,204,925 (456,921) 28,107
------------ ------------ -----------
Increase (decrease) in net assets from
operations 2,430,883 (163,449) 235,235
Contractholder transactions--Note D:
Transfers of net premiums 4,547,924 4,772,184 3,620,437
Transfers from/to General Account
and within Separate Account, net 1,225,695 (49,149) 1,321,531
Transfers of cost of insurance (1,334,390) (1,065,410) (588,590)
Transfers on account of death (11,992) (4,758) (6,004)
Transfers on account of other
terminations (684,107) (202,716) (67,106)
------------ ------------ -----------
Net increase (decrease) in net assets
derived from contractholder transactions 3,743,130 3,450,151 4,280,268
------------ ------------ -----------
Net increase (decrease) in net assets 6,174,013 3,286,702 4,515,503
Balance at beginning of year 9,387,399 6,100,697 1,585,194
------------ ------------ -----------
Balance at end of year $ 15,561,412 $ 9,387,399 $ 6,100,697
============ ============ ===========
</TABLE>
See notes to financial statements.
F-35
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS--(Continued)
Chubb Separate Account A
<TABLE>
<CAPTION>
Emerging Growth Templeton
Division Division
--------------- ---------------
Period from Period from
May 1, 1995 (a) May 1, 1995 (a)
to to
December 31, December 31,
1995 1995
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) $ (11,735) $ (28,459)
Net realized gain (loss) on
investments 17,701 316,398
Change in net unrealized gain (loss)
on investments 458,910 357,041
------------ ------------
Increase (decrease) in net assets from
operations 464,876 644,980
Contractholder transactions--Note D:
Transfers of net premiums 1,779,119 1,959,347
Transfers from/to General Account
and within Separate Account, net 5,574,465 5,568,613
Transfers of cost of insurance (218,292) (361,292)
Transfers on account of death 0 0
Transfers on account of other
terminations (12,826) (114,846)
------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions 7,122,466 7,051,822
------------ ------------
Net increase (decrease) in net assets 7,587,342 7,696,802
Balance at beginning of period 0 0
------------ ------------
Balance at end of period $ 7,587,342 $ 7,696,802
============ ============
(a) Commencement of Operations
</TABLE>
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Chubb Separate Account A
December 31, 1995
NOTE A--ORGANIZATION OF ACCOUNT
Chubb Separate Account A (the "Separate Account") is a separate account of Chubb
Life Insurance Company of America ("Chubb Life"). The Separate Account is
organized as a unit investment trust registered under the Investment Company Act
of 1940 as amended. It was established for the purpose of funding flexible
premium variable life insurance policies issued by Chubb Life and its
predecessor and is presently comprised of ten investment divisions, nine of
which invest exclusively in the corresponding portfolio of the Chubb America
Fund, Inc., and one of which invests in the Templeton International Fund
(individually, the "Fund",) both diversified Series Management Investment
Companies.
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments: Investments in shares of the Fund are valued at the
net asset value per share which is calculated each day the New York Stock
Exchange is open for trading.
Investment Income: Dividend income and distributions of realized gains are
recorded on the ex-dividend date.
Investment Transactions: Purchases and sales of shares of the Fund are recorded
as of the trade date, the date the transaction is executed.
Federal Income Taxes: The operations of the Separate Account are included in the
federal income tax return of Chubb Life, which is taxed as a life insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the Separate Account.
Expenses: Currently, the Separate Account contains the net assets of two
variable insurance policies, Ensemble and Ensemble II. A mortality and expense
risk charge payable to Chubb Life is accrued daily which will not exceed .6% and
.9% of the average net asset value of each division of the Separate Account on
an annual basis for Ensemble and Ensemble II, respectively.
NOTE C--INVESTMENTS
In determining the net realized gain or loss on sales of shares of the Fund, the
cost of shares sold has been determined on an average cost basis. For federal
income tax purposes, the cost of shares owned at December 31, 1995 is the same
as for financial reporting purposes.
Following is a summary of shares of each portfolio of the Fund owned by the
respective divisions of the Separate Account and the related net asset values at
December 31, 1995.
<TABLE>
<CAPTION>
Net Asset
Value
Shares Per Share
------------ ------------
<S> <C> <C>
World Growth Stock Portfolio 3,475,276 $21.204748
Money Market Portfolio 809,271 10.271801
Gold Stock Portfolio 413,432 16.611311
Domestic Growth Stock Portfolio 2,715,671 17.865894
Bond Portfolio 871,579 10.590074
Growth and Income Portfolio 887,351 14.411428
Capital Growth Portfolio 2,855,717 17.375250
Balanced Portfolio 1,203,302 11.907408
Emerging Growth Portfolio 560,877 13.288207
Templeton Portfolio 508,081 15.130573
</TABLE>
F-37
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
Chubb Separate Account A
December 31, 1995
NOTE D--CONTRACTHOLDER TRANSACTIONS
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------------------------
1995 1994 1993
----------------------- ----------------------- -----------------------
Units Amount Units Amount Units Amount
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
World Growth Stock Division
Issuance of units 1,715,142 $ 47,537,500 1,377,609 $ 37,060,168 773,239 $ 18,078,109
Redemptions of units 1,277,857 36,000,983 808,594 21,620,626 409,678 9,447,779
--------- ------------ --------- ------------ --------- -------------
Net Increase 437,285 $ 11,536,517 569,015 $ 15,439,542 363,561 $ 8,630,330
========= ============ ========= ============ ========= =============
Money Market Division
Issuance of units 1,688,778 $ 25,651,528 1,321,835 $ 19,333,534 386,091 $ 5,566,755
Redemptions of units 1,587,725 24,122,744 1,102,560 16,154,326 315,616 4,548,454
--------- ------------ --------- ------------ --------- -------------
Net Increase 101,053 $ 1,528,784 219,275 $ 3,179,208 70,475 $ 1,018,301
========= ============ ========= ============ ========= =============
Gold Stock Division
Issuance of units 371,551 $ 5,790,832 274,928 $ 4,678,197 157,652 $ 2,400,639
Redemptions of units 327,364 5,204,377 208,547 3,427,155 115,710 1,750,464
--------- ------------ --------- ------------ --------- -------------
Net Increase 44,187 $ 586,455 66,381 $ 1,251,042 41,942 $ 650,175
========= ============ ========= ============ ========= =============
Domestic Growth Stock Division
Issuance of units 917,824 $ 26,054,533 684,179 $ 16,392,246 446,316 $ 9,695,252
Redemptions of units 509,915 14,548,358 451,695 10,841,314 332,640 7,193,257
--------- ------------ --------- ------------ --------- -------------
Net Increase 407,909 $ 11,506,175 232,484 $ 5,550,932 113,676 $ 2,501,995
========= ============ ========= ============ ========= =============
Bond Division
Issuance of units 672,153 $ 11,914,386 923,962 $ 15,280,183 153,322 $ 2,540,124
Redemptions of units 887,866 15,524,388 429,173 7,117,409 93,569 1,544,594
--------- ------------ --------- ------------ --------- -------------
Net (Decrease)Increase (215,713) $ (3,610,002) 494,789 $ 8,162,774 59,753 $ 995,530
========= ============ ========= ============ ========= =============
Growth and Income Division
Issuance of units 730,636 $ 10,587,371 389,096 $ 4,814,715 143,727 $ 1,692,805
Redemptions of units 271,957 3,925,993 136,796 1,694,006 47,543 557,032
--------- ------------ --------- ------------ --------- -------------
Net Increase 458,679 $ 6,661,378 252,300 $ 3,120,709 96,184 $ 1,135,773
========= ============ ========= ============ ========= =============
Capital Growth Division
Issuance of units 1,825,698 $ 31,919,956 1,444,217 $ 21,619,453 946,298 $ 12,872,580
Redemptions of units 1,017,713 18,011,909 620,968 9,307,139 321,386 4,393,983
--------- ------------ --------- ------------ --------- -------------
Net Increase 807,985 $ 13,908,047 823,249 $ 12,312,314 624,912 $ 8,478,597
========= ============ ========= ============ ========= =============
Balanced Division
Issuance of units 763,616 $ 9,631,633 671,716 $ 7,809,794 522,202 $ 6,018,128
Redemptions of units 464,695 5,888,503 374,938 4,359,643 150,352 1,737,860
--------- ------------ --------- ------------ --------- -------------
Net Increase 298,921 $ 3,743,130 296,778 $ 3,450,151 371,850 $ 4,280,268
========= ============ ========= ============ ========= =============
</TABLE>
F-38
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
Chubb Separate Account A
December 31, 1995
NOTE D--CONTRACTHOLDER TRANSACTIONS
<TABLE>
<CAPTION>
For the period May 1, 1995(a) to December 31, 1995
--------------------------------------------------
---------- ----------
Units Amount
---------- ----------
<S> <C> <C>
Emerging Growth Division
Issuance of units 718,606 $ 8,905,329
Redemptions of units 143,489 1,782,863
--------- ------------
Net Increase 575,117 $ 7,122,466
========= ============
Templeton Division
Issuance of units 1,977,300 $ 20,880,595
Redemptions of units 1,285,944 13,828,773
--------- ------------
Net Increase 691,356 $ 7,051,822
========= ============
</TABLE>
(a) Commencement of Operations
F-39
<PAGE>
APPENDIX A
ILLUSTRATIONS OF ACCUMULATION VALUES
CASH VALUES AND DEATH BENEFITS
Following are a series of tables that illustrate how the accumulation values,
cash values and death benefits of a policy change with the investment
performance of the Portfolios. The tables show how the accumulation values,
cash values and death benefits of a Policy issued to an insured of a given age
and given premium would vary over time if the return on the assets held in each
Portfolio were a constant gross, after tax annual rate of 0%, 4%, and 12%. The
tables on pages A-2 through A-7 illustrate a Policy issued to a male, age 40,
under a standard rate non-smoker underwriting risk classification. The
accumulation values, cash values and death benefits would be different from
those shown if the returns averaged 0%, 4%, and 12% over a period of years, but
fluctuated above and below those averages for individual policy years.
The amount of the accumulation value exceeds the cash value during the first
ten policy years due to the surrender charge. For policy years eleven and
after, the accumulation value and cash value are equal, since the surrender
charge has been reduced to zero.
The second column shows the accumulation value of the premiums paid at the
stated interest rate. The third and sixth columns illustrate the accumulation
values and the fourth and seventh columns illustrate the cash values of the
Policy over the designated period. The accumulation values shown in the third
column and the cash values shown in the fourth column assume the monthly charge
for cost of insurance is based upon the current cost of insurance rates as
discounted. The current cost of insurance rates are based on the sex, issue
age, policy year, rating class of the Insured, and the Specified Amount of the
Policy. The accumulation values shown in the sixth column and the cash values
shown in the seventh column assume the monthly charge for cost of insurance is
based upon the maximum cost of insurance rates allowable, which are based on
the Commissioner's 1980 Standard Ordinary Mortality Table. The current cost of
insurance rates are different for Specified Amounts below $100,000 and above
$249,999; therefore, the values shown would change for Specified Amounts below
$100,000 and above $249,999. The fifth and eighth columns illustrate the death
benefit of a Policy over the designated period. The illustrations of death
benefits reflect the same assumptions as the accumulation values and cash
values. The death benefit values also vary between tables, depending upon
whether Option I or Option II death benefits are illustrated.
The amounts shown for the death benefit, accumulation values, and cash values
reflect the fact that the net investment return of the divisions of Separate
Account A is lower than the gross return on the assets in the Portfolios, as a
result of expenses paid by the Portfolios and charges levied against the
divisions of Separate Account A.
The policy values shown take into account a daily investment advisory fee
equivalent to the maximum annual rate of .66% of the aggregate average daily
net assets of the Portfolios plus a charge of .17% of the aggregate average
daily net assets to cover estimated expenses to be incurred by the Emerging
Growth Portfolio and actual expenses incurred by the remaining nine Portfolios
for the twelve months ended December 31, 1995. The .66% investment advisory fee
is the average of the individual investment advisory fees of the thirteen
Portfolios. The .17% expense figure is based on a weighted average utilizing
actual average net assets for the Chubb America Fund Portfolio and the Templeton
International Fund and estimated average net assets for the VIP and VIP II
Portfolio A anticipated for the period ending December 31, 1996. Expenses for
the Templeton International Fund, High Income Portfolio, Index 500 Portfolio and
Contrafund Portfolio, were provided by the investment manager for these
portfolios and Chubb Life has not independently verified such information. The
policy values also take into account a daily charge to each division of Separate
Account A for assuming mortality and expense risks which is equivalent to a
charge at an annual rate of .90% of the average net assets of the divisions of
Separate Account B. After deduction of these amounts, the illustrated gross
investment rates of 0%, 4%, and 12% correspond to approximate net annual rates
of -1.75%, 2.27% and 10.27%, respectively.
The hypothetical values shown in the tables do not reflect any charges for
federal income taxes or other taxes against Separate Account A since Chubb Life
is not currently making such charges. However, if, in the future, such charges
are made, the gross annual investment rate of return would have to exceed the
stated investment rates by a sufficient amount to cover the tax charges in order
to produce the accumulation values, cash values and death benefits illustrated.
The tables illustrate the policy values that would result based on
hypothetical investment rates of return if premiums are paid in full at the
beginning of each year, if all net premiums are allocated to Separate Account
B, and if no policy loans have been made. The values would vary from those
shown if the assumed annual premium payments were paid in installments during a
year. The values would also vary if the policyowner varied the amount or
frequency of premium payments. The tables also assume that the policyowner has
not requested an increase or decrease in Specified Amount, that no withdrawals
have been made and no surrender charges imposed, and that no transfers have
been made and no transfer charges imposed.
Upon request, Chubb Life will provide, without charge, a comparable
illustration based upon the proposed insured's age, sex and rating class, the
face amount requested, the proposed frequency and amount of premium payments and
any available riders requested. Existing policyowners may request illustrations
based on existing cash value at the time of request. Chubb Life has reserved
the right to charge an administrative fee up to $25 for such illustrations.
A-1
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option I Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual rate of Return: 0% (-1.73% net)
$100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
PREMIUMS ---------------------------------------- -------------------------------------------
END ACCUMULATED
OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,482 1,072 695 100,000 1,071 694 100,000
2 3,023 2,110 1,734 100,000 2,108 1,732 100,000
3 4,626 3,116 2,739 100,000 3,113 2,736 100,000
4 6,293 4,095 3,719 100,000 4,083 3,706 100,000
5 8,027 5,060 4,684 100,000 5,019 4,642 100,000
6 9,830 6,011 5,698 100,000 5,919 5,605 100,000
7 11,705 6,949 6,698 100,000 6,781 6,530 100,000
8 13,655 7,861 7,673 100,000 7,605 7,417 100,000
9 15,684 8,761 8,635 100,000 8,390 8,264 100,000
10 17,793 9,647 9,585 100,000 9,133 9,070 100,000
11 19,987 10,540 10,540 100,000 9,834 9,834 100,000
12 22,268 11,392 11,392 100,000 10,487 10,487 100,000
13 24,641 12,203 12,203 100,000 11,088 11,088 100,000
14 27,109 12,968 12,968 100,000 11,632 11,632 100,000
15 29,675 13,687 13,687 100,000 12,113 12,113 100,000
16 32,344 14,356 14,356 100,000 12,527 12,527 100,000
17 35,120 14,970 14,970 100,000 12,867 12,867 100,000
18 38,007 15,525 15,525 100,000 13,130 13,130 100,000
19 41,009 16,017 16,017 100,000 13,311 13,311 100,000
20 44,131 16,436 16,436 100,000 13,402 13,402 100,000
21 47,378 16,775 16,775 100,000 13,393 13,393 100,000
22 50,755 17,027 17,027 100,000 13,273 13,273 100,000
23 54,268 17,185 17,185 100,000 13,026 13,026 100,000
24 57,920 17,238 17,238 100,000 12,634 12,634 100,000
25 61,719 17,177 17,177 100,000 12,077 12,077 100,000
30 83,118 14,667 14,667 100,000 6,091 6,091 100,000
35 109,153 6,390 6,390 100,000 0 0 0
40 140,828 0 0 0 0 0 0
- -------------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-2
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option I Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual Rate of Return: 4% (-2.27% net)
$100,000 Initial Specified Amount Assumed Annual Premiun (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
PREMIUMS ----------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
----- -------- -------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,482 1,121 744 100,000 1,120 743 100,000
2 3,023 2,252 1,876 100,000 2,250 1,874 100,000
3 4,626 3,395 3,018 100,000 3,391 3,015 100,000
4 6,293 4,554 4,178 100,000 4,541 4,165 100,000
5 8,027 5,744 5,367 100,000 5,701 5,324 100,000
6 9,830 6,964 6,650 100,000 6,867 6,553 100,000
7 11,705 8,214 7,963 100,000 8,038 7,787 100,000
8 13,655 9,486 9,298 100,000 9,214 9,026 100,000
9 15,684 10,791 10,665 100,000 10,393 10,268 100,000
10 17,793 12,129 12,066 100,000 11,573 11,510 100,000
11 19,987 13,520 13,520 100,000 12,752 12,752 100,000
12 22,268 14,920 14,920 100,000 13,926 13,926 100,000
13 24,641 16,326 16,326 100,000 15,089 15,089 100,000
14 27,109 17,737 17,737 100,000 16,237 16,237 100,000
15 29,675 19,151 19,151 100,000 17,364 17,364 100,000
16 32,344 20,572 20,572 100,000 18,464 18,464 100,000
17 35,120 21,994 21,994 100,000 19,537 19,537 100,000
18 38,007 23,415 23,415 100,000 20,580 20,580 100,000
19 41,009 24,831 24,831 100,000 21,587 21,587 100,000
20 44,131 26,234 26,234 100,000 22,550 22,550 100,000
21 47,378 27,617 27,617 100,000 23,461 23,461 100,000
22 50,755 28,976 28,976 100,000 24,308 24,308 100,000
23 54,268 30,305 30,305 100,000 25,079 25,079 100,000
24 57,920 31,597 31,597 100,000 25,756 25,756 100,000
25 61,719 32,845 32,845 100,000 26,321 26,321 100,000
30 83,118 38,085 38,085 100,000 26,819 26,819 100,000
35 109,153 40,351 40,351 100,000 20,129 20,129 100,000
40 140,828 36,264 36,264 100,000 0 0 0
- ----------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 4% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-3
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option I Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual Rate of Return: 12% (10.27% net)
$100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
PREMIUMS ----------------------------------------- -----------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------- -------- -------- ---------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,496 1,220 843 100,000 1,219 842 100,000
2 3,067 2,549 2,173 100,000 2,547 2,170 100,000
3 4,717 4,001 3,624 100,000 3,997 3,621 100,000
4 6,449 5,594 5,217 100,000 5,580 5,203 100,000
5 8,268 7,355 6,978 100,000 7,309 6,933 100,000
6 10,177 9,302 8,989 100,000 9,198 8,884 100,000
7 12,182 11,456 11,205 100,000 11,263 11,012 100,000
8 14,288 13,826 13,638 100,000 13,521 13,333 100,000
9 16,498 16,447 16,322 100,000 15,993 15,868 100,000
10 18,820 19,346 19,284 100,000 18,700 18,638 100,000
11 21,257 22,579 22,579 100,000 21,674 21,674 100,000
12 23,816 26,143 26,143 100,000 24,948 24,948 100,000
13 26,503 30,076 30,076 100,000 28,555 28,555 100,000
14 29,324 34,419 34,419 100,000 32,530 32,530 100,000
15 32,287 39,218 39,218 100,000 36,917 36,917 100,000
16 35,398 44,526 44,526 100,000 41,763 41,763 100,000
17 38,664 50,401 50,401 100,000 47,125 47,125 100,000
18 42,093 56,911 56,911 100,000 53,069 53,069 100,000
19 45,694 64,134 64,134 100,000 59,672 59,672 100,000
20 49,475 72,158 72,158 100,000 67,021 67,021 100,000
21 53,445 81,076 81,076 105,399 (3) 75,219 75,219 100,000
22 57,613 90,929 90,929 116,389 (3) 84,345 84,345 107,962 (3)
23 61,990 101,802 101,802 128,270 (3) 94,408 94,408 118,954 (3)
24 66,586 113,800 113,800 141,112 (3) 105,499 105,499 130,819 (3)
25 71,412 127,043 127,043 154,993 (3) 117,724 117,724 143,623 (3)
30 99,409 216,691 216,691 251,362 (3) 200,092 200,092 232,107 (3)
35 35,142 363,657 363,657 389,113 (3) 334,425 334,425 357,835 (3)
40 80,747 606,979 606,979 637,328 (3) 556,278 556,278 584,092 (3)
- ----------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
A-4
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option II Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual Rate of Return: 0% (-1.73% net)
$100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
--------------------------------------- ----------------------------------------
PREMIUMS
END ACCUMULATED
OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------- -------- -------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,482 1,069 692 101,069 1,068 691 101,068
2 3,023 2,102 1,725 102,102 2,100 1,723 102,100
3 4,626 3,099 2,722 103,099 3,096 2,719 103,096
4 6,293 4,067 3,690 104,067 4,054 3,677 104,054
5 8,027 5,018 4,642 105,018 4,975 4,598 104,975
6 9,830 5,953 5,639 105,953 5,855 5,541 105,855
7 11,705 6,872 6,621 106,872 6,693 6,442 106,693
8 13,655 7,763 7,574 107,763 7,489 7,300 107,489
9 15,684 8,638 8,513 108,638 8,240 8,114 108,240
10 17,793 9,499 9,436 109,499 8,943 8,880 108,943
11 19,987 10,366 10,366 110,366 9,598 9,598 109,598
12 22,268 11,187 11,187 111,187 10,198 10,198 110,198
13 24,641 11,959 11,959 111,959 10,737 10,737 110,737
14 27,109 12,681 12,681 112,681 11,210 11,210 111,210
15 29,675 13,347 13,347 113,347 11,611 11,611 111,611
16 32,344 13,954 13,954 113,954 11,932 11,932 111,932
17 35,120 14,497 14,497 114,497 12,167 12,167 112,167
18 38,007 14,969 14,969 114,969 12,314 12,314 112,314
19 41,009 15,365 15,365 115,365 12,366 12,366 112,366
20 44,131 15,674 15,674 115,674 12,314 12,314 112,314
21 47,378 15,885 15,885 115,885 12,146 12,146 112,146
22 50,755 15,991 15,991 115,991 11,853 11,853 111,853
23 54,268 15,983 15,983 115,983 11,419 11,419 111,419
24 57,920 15,850 15,850 115,850 10,825 10,825 110,825
25 61,719 15,582 15,582 115,582 10,053 10,053 110,053
30 83,118 11,715 11,715 111,715 2,976 2,976 102,976
35 109,153 1,942 1,942 101,942 0 0 0
40 140,828 0 0 0 0 0 0
- ----------------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
A-5
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option II Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual Rate of Return: 4% (2.27% net)
$100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
----------------------------------------- -----------------------------------------
PREMIUMS
END ACCUMULATED
OF AT 4% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------- -------- -------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,482 1,118 742 101,118 1,117 741 101,117
2 3,023 2,243 1,867 102,243 2,241 1,865 102,241
3 4,626 3,376 3,000 103,376 3,373 2,996 103,373
4 6,293 4,523 4,146 104,523 4,509 4,133 104,509
5 8,027 5,695 5,318 105,695 5,650 5,273 105,650
6 9,830 6,894 6,580 106,894 6,791 6,477 106,791
7 11,705 8,120 7,869 108,120 7,931 7,680 107,931
8 13,655 9,362 9,174 109,362 9,068 8,880 109,068
9 15,684 10,632 10,507 110,632 10,199 10,074 110,199
10 17,793 11,931 11,869 111,931 11,321 11,258 111,321
11 19,987 13,282 13,282 113,282 12,431 12,431 112,431
12 22,268 14,631 14,631 114,631 13,522 13,522 113,522
13 24,641 15,976 15,976 115,976 14,586 14,586 114,586
14 27,109 17,313 17,313 117,313 15,616 15,616 115,616
15 29,675 18,637 18,637 118,637 16,604 16,604 116,604
16 32,344 19,948 19,948 119,948 17,540 17,540 117,540
17 35,120 21,239 21,239 121,239 18,416 18,416 118,416
18 38,007 22,503 22,503 122,503 19,229 19,229 119,229
19 41,009 23,731 23,731 123,731 19,970 19,970 119,970
20 44,131 24,911 24,911 124,911 20,626 20,626 120,626
21 47,378 26,029 26,029 126,029 21,181 21,181 121,181
22 50,755 27,075 27,075 127,075 21,620 21,620 121,620
23 54,268 28,034 28,034 128,034 21,922 21,922 121,922
24 57,920 28,891 28,891 128,891 22,061 22,061 122,061
25 61,719 29,631 29,631 129,631 22,011 22,011 122,011
30 83,118 30,846 30,846 130,846 18,054 18,054 118,054
35 109,153 25,341 25,341 125,341 4,443 4,443 104,443
40 140,828 8,129 8,129 108,129 0 0 0
- --------------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 4% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-6
<PAGE>
CHUBB LIFE INSURANCE COMPANY OF AMERICA
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
Death Benefit Option II Assumed Hypothetical Gross
Male Non-Smoker Issue Age 40 Annual Rate of Return: 12% (10.27% net)
$100,000 Initial Specified Amount Assumed Annual Premium (1): $1,425
Assuming Current Costs Assuming Guaranteed Costs
------------------------------------ ---------------------------------------
PREMIUMS
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT (2)
---- -------- ------- ------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 1,496 1,217 840 101,217 1,215 839 101,215
2 3,067 2,539 2,163 102,539 2,537 2,160 102,537
3 4,717 3,979 3,602 103,979 3,975 3,598 103,975
4 6,449 5,553 5,177 105,553 5,539 5,162 105,539
5 8,268 7,290 6,913 107,290 7,241 6,864 107,241
6 10,177 9,205 8,891 109,205 9,092 8,778 109,092
7 12,182 11,316 11,065 111,316 11,104 10,853 111,104
8 14,288 13,632 13,443 113,632 13,293 13,105 113,293
9 16,498 16,185 16,060 116,185 15,674 15,549 115,674
10 18,820 19,001 18,938 119,001 18,263 18,200 118,263
11 21,257 22,136 22,136 122,136 21,083 21,083 121,083
12 23,816 25,575 25,575 125,575 24,159 24,159 124,159
13 26,503 29,347 29,347 129,347 27,512 27,512 127,512
14 29,324 33,484 33,484 133,484 31,166 31,166 131,166
15 32,287 38,020 38,020 138,020 35,143 35,143 135,143
16 35,398 42,994 42,994 142,994 39,471 39,471 139,471
17 38,664 48,444 48,444 148,444 44,178 44,178 144,178
18 42,093 54,415 54,415 154,415 49,302 49,302 149,302
19 45,694 60,955 60,955 160,955 54,878 54,878 154,878
20 49,475 68,113 68,113 168,113 60,944 60,944 160,944
21 53,445 75,941 75,941 175,941 67,538 67,538 167,538
22 57,613 84,504 84,504 184,504 74,705 74,705 174,705
23 61,990 93,868 93,868 193,868 82,487 82,487 182,487
24 66,586 104,106 104,106 204,106 90,928 90,928 190,928
25 71,412 115,298 115,298 215,298 100,076 100,076 200,076
30 99,409 188,896 188,896 288,896 158,624 158,624 258,624
35 135,142 303,283 303,283 403,283 245,244 245,244 345,244
40 180,747 480,932 480,932 580,932 371,318 371,318 471,318
- -------------------------
</TABLE>
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB LIFE, THE SEPARATE ACCOUNT, OR THE FUNDS THAT THIS
ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-7
<PAGE>
FOR USE IN NEW JERSEY ONLY
Supplement Dated May 1, 1996 to Prospectus Dated May 1, 1996
CHUBB SEPARATE ACCOUNT A
of
CHUBB LIFE INSURANCE COMPANY OF AMERICA
This supplement updates certain information contained in your Prospectus.
Please read it and keep it with your Prospectus for future reference.
The first sentence of the fourth paragraph on page 1 of the Prospectus is
deleted in its entirety and replaced with the following:
The initial minimum premium is due and payable on the policy date. The
initial minimum premium is the greater of: (1) the initial minimum
premium specified in the Policy or (2) the amount large enough, after
the deduction of the premium tax charge, to cover monthly deductions for
at least three months.
The section Payment of Premiums on page 13 is deleted in its entirety and
-------------------
replaced with the following:
Payment of Premiums. Premiums must be paid in advance to Chubb Life or
-------------------
through an authorized agent of Chubb Life for forwarding to Chubb Life. In
addition, Chubb Life has instituted administrative procedures whereby premium
payments in response to billing notices are sent directly to Chubb Life's bank.
Unlike traditional insurance contracts, there is not a fixed schedule of premium
payments on a Policy either as to the amount or the timing of the payment. A
policyowner may determine, within specified limits, his or her own premium
payment schedule. These limits will be set forth by Chubb Life and will include
a minimum initial premium equal to the greater of: (1) the initial minimum
premium specified in the Policy or (2) the amount large enough, after the
deduction of the premium tax charge, to cover monthly deductions for at least
three months. These limits may also include limits on the total amount and
frequency of payments in each policy year. No premium payment may be less than
$25. In order to help the policyowner obtain the insurance benefits desired, a
Planned Periodic Premium and Premium Frequency will be stated in each Policy.
This premium will usually be based upon the policyowner's insurance needs, the
policyowner's financial abilities and the current financial climate, in general,
as well as on the Specified Amount of the Policy and the Insured's age.
<PAGE>
sex and risk class. The policyowner is not required to pay such premiums
and failure to make any premium will not necessarily result in lapse of the
Policy, provided the Policy's cash value, less policy debt, if any, is
sufficient to pay monthly deductions. Conversely, adherence to the schedule
of Planned Period Premiums will not assure that the Policy will remain in
force. The Policy will terminate only if the conditions described in the
"THE POLICY - Policy Lapse" section on page 15 occur.
The section Policy Lapse on page 16 is deleted in its entirety and replaced
------------
with the following:
Policy Lapse. Failure to make a premium payment on a Policy will not
------------
necessarily cause the Policy to lapse. The duration of a Policy depends
upon its cash value. The Policy will remain in force so long as the cash
value, less any outstanding policy debt, is sufficient to pay the monthly
deduction. In the event the cash value, less any outstanding policy debt,
is sufficient to pay the monthly deduction, the policyowner will be given a
sixty-one day period ("grace period) within which to make a premium payment
to avoid lapse. If, however, during the grace period the cash value, less
outstanding policy debt, increases due to positive performance of Separate
Account A to a level sufficient to equal monthly deductions for at least
three months, the Policy will no longer be in the grace period. The premium
required to avoid lapse must be sufficient in amount, after the deduction
of the premium tax charge, to cover the monthly deductions for at least
three policy months. This required premium will be set forth in a written
notice which Chubb Life will send to the policyowner at the beginning of
the grace period. This Policy will continue in force through the grace
period, but if no payment is forthcoming, the Policy will terminate without
value at the end of the grace period. However, coverage under the Policy
will not end sooner than 31 days after Chubb Life has mailed a premium
notice to the policyowner, and any assignee of record, at the last known
address. If the insured under the Policy dies during the grace period, the
death benefit payable under the Policy will be reduced by the amount of the
monthly deduction due and unpaid and the amount of any outstanding policy
debt. In addition, if the cash value of the Policy at any time should
decrease so the aggregate amount of an outstanding policy debt secured by
the Policy exceeds the cash value shown in the Policy, the Policy will
lapse.
The sixth sentence in the section Reinstatement on page 18 is deleted in its
-------------
entirety and replaced with the following:
The reinstatement premium, after deduction of the premium tax charge, must
be sufficient to cover monthly deductions for three policy months following
the effective date of reinstatement, and monthly administrative charges
during the grace period and the month of reinstatement.
<PAGE>
In addition, the following is added as the last sentence of the section
Reinstatement:
- -------------
If this Policy is reinstated, the right to contest provision will start
over again beginning on the reinstatement date, but only for statements
made in the application for reinstatement.
The section Monthly Deduction on page 18 is deleted in its entirety and replaced
-----------------
with the following:
Monthly Deduction. On the first day of each policy month beginning on the
- -----------------
policy date, Chubb Life will deduct from the accumulation value of a Policy an
amount to cover certain charges and expenses incurred in connection with the
Policy. The monthly deduction is intended to compensate Chubb Life for
underwriting and start-up expenses incurred in connection with the issuance of a
Policy, certain administrative expenses, the cost of insurance for the Policy
and any optional benefits added by rider. The amount deducted will be deducted
pro-rata from each of the divisions and the General Account net of any debt
outstanding at the beginning of the month.
The amount of the monthly deduction is equal to (i) the cost of insurance for
the Policy, as described below, and the cost of additional benefits provided by
rider, plus (ii) a monthly administrative charge of $8.00, which may not be
increased, minus (iii) the monthly deduction adjustment.
The cost of insurance for the insured is determined on a monthly basis, and is
determined separately for the initial Specified Amount and each subsequent
increase in the Specified Amount. The monthly current cost of insurance rate is
based on the sex, issue age, policy year, rating class of the insured, and the
Specified Amount of the Policy. If we assume two insureds differ only with
regard to one of the above bases, the effect of these bases on their monthly
cost of insurance rates would be as follows:
Sex: The cost of insurance rate for males will be greater than or equal
to those for females.
Issue Age: The cost of insurance rate for the younger insured will be
less than or equal to that for the older insured.
Policy Year: The current cost of insurance rate will increase as the
policy year increases. For two insureds with the same sex, rating class,
and attained age the cost of insurance rate for the insured with the
younger issue age will never exceed, and in some cases will be less than
that for the insured with the older issue age.
Rating Class: The cost of insurance rates for nonsmokers will be less
than or equal to those for smokers. Cost of insurance rates may also
differ due to the insured's medical condition, occupation, or avocation.
<PAGE>
Specified Amount: The current cost of insurance rates will vary by
Specified Amount, with different rates applying to Specified Amounts
under $100,000, between $100,000 and $249,999, between $250,000 and
$999,999 and $1,000,000 and over. Current cost of insurance rates are
highest for Specified Amounts under $100,000, decreasing for each
successive Specified Amount range as noted above.
The cost of insurance is calculated as (i) multiplied by the result of
(ii) minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of
Insurance Rates Provision contained in the Policy.
(ii) is the death benefit at the beginning of the policy month
divided by 1.0036748, to arrive at the proper values for the
beginning values for the beginning of the month assuming the
guaranteed interest rate of 4.5% that is applicable to the
General Account portion of the Policy; and
(iii) is the accumulation value at the beginning of the policy month
prior to the monthly deduction for the cost of insurance.
If the corridor percentage is applicable, the death benefit used in the
foregoing calculation will reflect the corridor percentage.
There will be a monthly deduction adjustment that will be calculated at the
beginning of each policy year. The adjustment will be a monthly amount that is
subtracted from the monthly cost of insurance charge that is normally
calculated. This adjustment may be suspended at any time in accordance with
procedures on file with the New Jersey Department of Insurance. The policyowner
will be notified if the adjustment is suspended. The adjustment is calculated
as (1) multiplied by the result of (2) minus (3) minus (4), but not less than
zero, where:
(1) is .000375.
(2) is the Accumulation Value at the beginning of the policy year.
(3) is the Guideline Single Premium at Issue, under Section 7702 of the
Internal Revenue Code, increased on a pro-rata basis for any
increase in Specified Amount.
(4) is the outstanding Type A loan balance at the beginning of the
policy year.
<PAGE>
The adjustment will be allocated amoung the General Account and divisions
of Separate Account A using the same percentages used to allocate net
premiums. Monthly cost of insurance rates will be determined by Chubb Life
based upon future expectations, including charges for mortality experience,
and a provision of amortization of sales charges and other administrative
charges. The provision for amortization of sales charges and other
administrative charges tends to decrease over time. Any change in cost of
insurance rates will apply to all individuals of the same class as the
insured. Changes in the monthly cost of insurance rates will be based upon
changes in future expectations as to investment earning, mortality
experience, persistency, expenses and federal income tax law. The rating
class will be determined separately for the Initial Specified Amount and
for any increase in Specified Amount that requires evidence of
insurability. However, the cost of insurance rates can never be greater
than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates
in the Policy. For issue ages 15 and above, such guaranteed maximum rates
are based on the 1980 CSO, Male and Female, Smoker and Nonsmoker Mortality
Tables. For issue ages 14 and below, such guaranteed maximum rates are
based on the 1980 CSO Male and Female Mortality Table.
The first three paragraphs in the section Surrender Charge on page 17 are
----------------
deleted and amended to read as follows:
Surrender Charge. Upon surrender or withdrawal. Chubb Life will assess a
----------------
surrender charge. The surrender charge for the Initial Specified Amount is
determined by multiplying a surrender factor by the lessor of (1) the
premiums actually received to date in the policy year one; or (2) the
"Maximum Surrender Premium" for Issue Age, as specified in the Policy,
multiplied by the Initial Specified Amount, divided by 1.000. The surrender
factor depends on the length of time the policy has been in force as
follows:
Policy Year Surrender Factor
----------- ----------------
1-5 .30
6 .25
7 .20
8 .15
9 .10
10 .05
11 and after 0
If the policy lapses and is reinstated within 5 years of lapse, the Surrender
Charge applicable on the date of reinstatement will be that which would have
applied on the date of termination.
Form 3-00706 Page 5
<PAGE>
Paying less premium in policy year one generally will have the effect of
reducing the surrender charge. However, depending on investment experience,
paying less premium in policy year one may result in an increase in cost of
insurance charges, a reduction if accumulation value and an increased risk that
the Policy will lapse.
An additional surrender charge will be assessed for any increase in the
Specified Amount, other than an increase caused by a change from death benefit
Option I to death benefit Option II. The additional surrender charge is
determined by multiplying a surrender factor by the lessor of (1) or (2), where:
(1) is A times B divided by C, where;
A is the amount of the increase in the Specified Amount;
B is the sum of the cash value just prior to the increase in the
Specified Amount and the total premiums received in the twelve months
just following the increase in the Specified Amount; and
C is the Specified Amount in effect after the increase in the
Specified Amount
(2) is the "Maximum Surrender Premium" for the attained age of the insured
on the effective date of the increase in the Specified Amount, as
specified Amount, as specified in the Policy, multiplied by the
increase in the Specified Amount, divided by 1,000.
The first full paragraph on page 24 of the Prospectus, in the section Surrender
---------
Privileges, is deleted in its entirety and replaced with the following:
- ----------
Withdrawal generally will affect the Policy's accumulation value, cash
value and the life insurance proceeds payable under the Policy. The
Policy's cash value will be reduced by the amount of the withdrawal. The
Policy's accumulation value will be reduced by the sum of the withdrawal
and a pro-rata portion of the surrender charge in effect on the date of the
withdrawal. The remaining Surrender Charge will equal the Surrender Charge
prior to withdrawal less the pro-rata portion of the surrender charge that
is assessed at the time of the withdrawal. The remaining Accumulation Value
will equal the Accumulation Value prior to the withdrawal less the sum of
the amount withdrawn and the pro-rata surrender charge assessed.
The fourth and fifth paragraphs of the section Policy Loans on page 24 are
------------
deleted in their entirety and replaced with the following:
There are two types of policy loans which Chubb Life will grant to a
policyowner: a Type A loan and a Type B loan. The type of loan which Chubb
Life will grant depends upon the amount of unloaned Type A balances
available at the time the loan is taken. The unloaned Type A balance is 90%
of the cash value, less the threshold, and less the sum of any outstanding
Type A loans as defined below.
Form 5-00706 Ed. 4/96 Page 6
<PAGE>
The threshold is the Guideline Single Premium for the Policy at issue as
defined in Section 7702 of the Internal Revenue Code of 1986 entitled "Life
Insurance Contract Defined". If the Specified Amount of the Policy
increases, the threshold will be increased to the threshold at issue times
the ratio of the largest Specified Amount ever existing on the Policy to
the initial Specified Amount. If the Specified Amount decreases, the
threshold will not change. A Type A loan is a policy loan granted by Chubb
Life when the unloaned Type A balance before the loan is taken exceeds the
loan requested. A Type B loan is a policy granted by Chubb Life when the
unloaded Type A balance before the loan is taken is less than or equal to
zero. When the unloaned Type A balance before the loan is taken exceeds
zero, but is less than the loan requested, a Type A loan equal to the
unloaned Type A balance will be granted by Chubb Life. The remainder of the
requested loan will be Type B loan. To the extent that an unloaned Type A
balance exists, Chubb Life will grant a Type A loan first before a Type B
loan. Once a policy loan is granted it remains a Type A or a Type B until
it is repaid.
The interest charged by Chubb Life on a policy loan depends upon the type
of loan granted. On a Type A loan, Chubb Life will charge an effective
interest rate of two percentage points lower than the effective interest
rate charged at the time by Chubb Life for a Type B loan. On a Type B loan,
Chubb Life will charge interest at the effective maximum rate of 8%, or at
any lower rate established by Chubb Life for any period during which the
loan is outstanding. Loan interest accrues on a daily basis from the date
of the loan and is payable at the end of each policy year. Loan interest
unpaid on a policy anniversary becomes loan principal. Chubb Life shall
provide at least 30 days written notice to the policyowner or any other
party designated by the policyowner to receive notice under the Policy and
any assignee recorded at the Home Office of any increase in the interest
rate on loans outstanding 40 or more days prior to the effective date of
the increase. As to loans made during the 40 days before the effective date
of the policy loan interest rate increase, Chubb Life shall notify the
policyowner and any assignee at the time the loan is made. The effective
date of any increase in such interest rate shall not be less than twelve
months after the effective date of the establishment of the previous rate.
If the interest rate is increased, the amount of such increase shall not
exceed one percent per year. Interest accrues on a daily basis from the
date of the loan and is compounded annually. Interest unpaid on a policy
anniversary becomes loan principal.
The section Non-Participating Policy on page 27 deleted in its entirety and
------------------------
replaced with the following:
Non-Participating Policy. The Policy is a nonparticipating contract, which
-------------------------
means the following: (1) cost of insurance rates and interest rates in
excess of guaranteed are determined and redetermined on a prospective basis
only; (2) Chubb Life will not recoup any prior losses by means or a change
in either the cost of insurance or a change of interest rates; and (3) the
Insured is not entitled to participate in the profits of Chubb Life.
Form 5-00706 Ed. 4/96 Page 7
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKINGS REGARDING INDEMNIFICATION
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer of controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The cover sheet.
The Prospectus consisting of pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484(b) (1) under the Securities
Act of 1933.
The signatures.
Written consents of the following persons:
(a) Michael J. LeBoeuf, FSA, MAAA, contained in Exhibit 6 below.
(b) Ernst & Young LLP, contained in Exhibit 7 below.
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:
(a) Certified copy of Resolution of Board of Directors of The Volunteer
State Life Insurance Company, adopted at a meeting held on August 20, 1984 (in
lieu of indenture or trust creating unit investment trust).
(b) Not applicable
(c) (i) Underwriting Agreement between The Volunteer State Life Insurance
Company and Chubb Securities Corporation.
(ii) Amendment to Underwriting Agreement between The Volunteer State
Life Insurance Company and Chubb Securities Corporation.
(iii) Specimen District Manager's Agreement of Chubb Securities
Corporation.
(iv) Specimen Sales Representative's Agreement of Chubb Securities
Corporation.
(v) Schedule of Commissions.
(d) Not applicable
(e) Specimen Policy with form of riders. 1,2,3,6,7
(f) (i) Amended and Restated Charter (with all amendments) of Chubb Life
Insurance Company of America. Incorporated by Reference to Exhibit 1(f) (i) of
Post-Effective Amendment No. 2 on
<PAGE>
Form S-6 of Chubb Separate Account C, to the Registration Statement filed
December 10, 1993, File No. 33-72830.
(ii) By-Laws of Chubb Life Insurance Company of America.
Incorporated by Reference to Exhibit 1(f) (ii) of Post-Effective
Amendment No. 2 on Form S-6 of Chubb Separate Account C, to the
Registration Statement filed December 10, 1993, File No. 33-
72830.
(g) Not applicable.
(h) (i) Fund Distribution Agreement between Chubb America Fund,
Inc., and Chubb Securities Corporation (incorporated by reference
to Exhibit 6(b) of Post-Effective Amendment No. 7 to Form N-lA of
Chubb America Fund Inc., filed on April 11, 1990, Registration
No. 2-94479).
(ii) Amendment to Fund Distribution Agreement between Chubb America
Fund, Inc. and Chubb Securities Corporation (incorporated by reference to
Exhibit 6(a) of Post-Effective Amendment No. 7 to Form N-lA of Chubb America
Fund, Inc., filed on April 11, 1990, Registration No. 2-94479).
(iii) Amended and Restated Investment Management Agreement between Chubb
America Fund, Inc., and Chubb Investment Advisory Corporation (incorporated by
reference to Exhibit 5(a) of Post-Effective Amendment No. 7 to Form N-lA of
Chubb America fund, Inc., filed on April 11, 1990, Registration No. 2-94479).
(iv) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Templeton,
Galbraith & Hansberger Ltd. (incorporated by reference to Exhibit 5(e) of Post-
Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc., filed April
14, 1993, Registration No. 2-94479).
(vii) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Van Eck Associates
Corporation (incorporated by reference to Exhibit 5(f) of Post-Effective
Amendment No. 7 to Form N-lA of Chubb America Fund, Inc., filed on April 11,
1990, Registration No. 2-94479).
(viii) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset
Managers, inc. (incorporated by reference to Exhibit 5(e) of Post-Effective
Amendment No. 7 to Form N-lA of Chubb America Fund, Inc., filed on April 11,
1990, Registration No. 2-94479).
(ix) Sub-Investment Management Agreement among Chubb America Fund,
Inc., Chubb Investment Advisory Corporation and Pioneering Management
Corporation (incorporated by reference to Exhibit 5(g) of Post-Effective
Amendment No. 7 of Form N-lA of Chubb America
<PAGE>
Fund, Inc., filed on April 11, 1990, Registration No. 2-94479).
(x) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset
Managers, Inc. (incorporated by reference to Exhibit 5(h) of Post-Effective
Amendment No. 9 to Form N-lA of Chubb America, Inc., filed February 28, 1992,
Registration No. 2-94479).
(xi) Custodian Agreement between Chubb America Fund, Inc., and
Citibank, N.A. (incorporated by reference to Exhibit 8 of Post-Effective
Amendment No. 8 to Form N-lA of Chubb America Fund, Inc., filed on February 21,
1991, Registration No. 2-94479).
(xii) Amendment to the Custodial Services Agreement between Chubb
America Fund, Inc., and Citibank, N.A. (incorporated by reference to Exhibit
8(b) of Post-Effective Amendment No. 11 to Form N-lA of Chubb America Fund, Inc.
filed on April 14, 1993, Registration No. 2-94479).
(xiii) Amendment No. 2 to Custodial Services Agreement between Chubb
America Fund, Inc. and Citibank, N.A. (incorporated by reference to Exhibit 8(c)
of Post-Effective Amendment No. 11 of Form N-lA of Chubb America Fund, Inc.
filed on April 14, 1993, Registration No. 2-94479).
(xiv) Investment Management Agreement between Chubb America Fund, Inc.
and Chubb Investment Advisory Corporation for the Growth and Income Portfolio
(incorporated by reference to Exhibit 5(i) of Post-Effective Amendment No. 9 of
Form N-lA of Chubb America Fund, Inc. filed on February 28, 1992, Registration
No. 2-94479).
(xv) Investment Management Agreement between Chubb America Fund, Inc.
and Chubb Investment Advisory Corporation for the Capital Growth Portfolio
(incorporated by reference to Exhibit 5(j) of Post-Effective Amendment No. 9 to
Form N-lA of Chubb America Fund, Inc. filed on February 28, 1992, Registration
No. 2-94479).
(xvii) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Chubb Asset
Managers, Inc. (incorporated by reference to Exhibit 5(1) of Post-Effective
Amendment No. 11 to Form N-lA of Chubb America Fund, Inc. filed on April 14,
1993, Registration No. 2-94479).
(xviii) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Janus Capital
Corporation (incorporated by reference to Exhibit 5(m) of Post-Effective
Amendment No. 11 to Form N-lA of Chubb America Fund, Inc. filed on April 14,
1993, Registration No. 2-94479).
<PAGE>
(xix) Sub-Investment Management Agreement by, between and among Chubb
America Fund, Inc., Chubb Investment Advisory Corporation and Phoenix Investment
Counsel, Inc. (incorporated by reference to Exhibit 5(n) of Post-Amendment No.
11 to Form N-lA of Chubb America Fund, inc. filed on April 14, 1993,
Registration No. 2-94479).
(xx) Form of Investment Management Agreement between Chubb America
Fund, Inc. and Chubb Investment advisory Corporation with respect to the
Emerging Growth Portfolio (incorporated by reference to Exhibit 5(p) of Post-
Effective Amendment No. 12 to Form of Chubb America Fund, Inc. filed on February
14, 1995, Registration No. 2-94479).
(xx) Form of Investment Management Agreement between Chubb America
Fund, Inc. and Chubb Investment Advisory Corporation with respect to the
Emerging Growth Portfolio (incorporated by reference to Exhibit 5(p) of Post-
Effective Amendment No. 12 to Form 12 to Form N-lA of Chubb America Fund, Inc.
filed on February 14, 1995, Registration No. 2-94479).
(xxi) Form of Sub-Investment Management Agreement between Chubb America
Fund, Inc., Chubb Investment Advisory Corporation and Massachusetts Financial
Services Company with respect to the Emerging Growth Portfolio (incorporated by
reference to Exhibit 5(q) of Post-Effective Amendment No. 12 to Form N-lA of
Chubb America Fund, Inc., filed on February 14, 1995, Registration No. 2-94479).
(i) Not Applicable.
(j) Application.
2. Specimen Policy. (Same as 1(e)).
3. Opinion of counsel.
4. Not Applicable.
5 Not Applicable.
6. Actuarial opinion and consent of Michael J. LeBoeuf, FSA, MAAA.
7. Consent of Ernst & Young LLP.
8. Procedures Memorandum, as amended, pursuant to Rule 6e-
3(T) (b) (12) (iii) under the 1940 Act.
9. Specimen Notice of Right of Withdrawal, pursuant to Rule
6e3 (T) (b) (13) (viii).
<PAGE>
10. Representations, description and undertakings regarding mortality and
expense risk charge, pursuant to Rule 6e-3(T) (b) (13) (iii) (F).
11. (a) Not Applicable.
(b) Not Applicable.
12. (Incorporated by reference to Exhibit 12 of Post-Effective Amendment No. 2
to the Registration Statement on Form S-6 of Chubb Separate Account C, filed
December 10, 1993, File No. 33-72830).
13. (Incorporated by reference to Exhibit 13 of Post- Effective
Amendment No. 2 to the Registration Statement on Form S-6 of
Chubb Separate Account C, filed December 10, 1993, File No.
33-72830).
14. Powers of Attorney.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Chubb Separate Account A certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 12 to the
Registration Statement and, has duly caused this Post-Effective Amendment No. 12
to the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in Concord, New Hampshire on the 12th day of April, 1996.
(SEAL) CHUBB SEPARATE ACCOUNT A
(Registrant)
CHUBB LIFE INSURANCE COMPANY OF
AMERICA (Depositor)
/s/ Frederick H. Condon
By:_______________________________
Frederick H. Condon
Title: Senior Vice President,
General Counsel and Secretary
-----------------------------
ATTEST:
/s/ Charles C. Cornelio
- ---------------------------
Charles C. Cornelio
Assistant Secretary
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Chubb Life
Insurance Company of America certifies that it meets the requirements of the
Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment
No. 12 to the Registration Statement and has duly caused this Post-Effective
Amendment No. 12 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its deal to be hereunto affixed and
attested, all in Concord, New Hampshire on the 12th day of April, 1996.
[SEAL APPEARS HERE] CHUBB LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Frederick H. Condon
----------------------------
Frederick H. Condon
Title: Senior Vice President
General Counsel and Secretary
-----------------------------
ATTEST:
/s/ Charles C. Cornelio
- --------------------------
Charles C. Cornelio
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signatures Title
---------- -----
*
- ------------------------------------ Director
John C. Beck
*
- ------------------------------------ Director, Vice Chairman
Percy Chubb, III
*
- ------------------------------------ Director
Joel J. Cohen
*
- ------------------------------------ Director
Henry U. Harder
<PAGE>
Signatures Title
---------- -----
*
- ------------------------------------ Director
David H. Hoag
*
- ------------------------------------ Director
Robert V. Lindsay
*
- ------------------------------------ Director
Thomas C. MacAvoy
*
- ------------------------------------ Director
Gertrude G. Michelson
*
- ------------------------------------ Director, Chairman
Dean R. O'Hare
*
- ------------------------------------ Director
Warren B. Rudman
*
- ------------------------------------ Director
Sir David G. Scholey, COE
*
- ------------------------------------ Director
Raymond G.H. Seitz
*
- ------------------------------------ Vice President and
Russell C. Simpson Treasurer
*
- ------------------------------------ Director
Lawrence M. Small
*
- ------------------------------------ President and Chief
Theresa M. Stone Executive Officer
*
- ------------------------------------ Executive Vice President and
Richard V. Werner Chief Financial Officer
<PAGE>
Signatures Title
---------- -----
- -------------------------------- Director
Richard D. Wood
By: /s/ Frederick H. Condon
-------------------------------
Frederick H. Condon, Attorney-
in-Fact, executed on the 12th
day of April, 1996, pursuant to
Powers of Attorney filed as
Exhibit 14 hereto.
<PAGE>
EXHIBIT INDEX
1. (a) Certified Copy of Resolution of Board
of Directors of The Volunteer State Life
Insurance Company, Adopted at a Meeting
Held on August 20, 1984.............................
1. (c) (i) Underwriting Agreement Between The
Volunteer State Life Insurance Company
Chubb Securities Corporation........................
1. (c) (ii) Amendments to Underwriting Agreement
Between The Volunteer State Life
Insurance Company and Chubb Securities
Corporation.........................................
1. (c) (iii) Specimen District Manager's Agreement of
Chubb Securities Corporation........................
1. (c) (iv) Specimen Sales Representative's Agreement
of Chubb Securities Corporation.....................
1. (c) (v) Schedule of Commissions.............................
1. (e) Specimen Policy with Form of Riders.................
3. Opinion of Counsel..................................
6. Actuarial Opinion and Consent of
Michael J. Leboeuf, FSA, MAAA.......................
7. Consent of Ernst & Young, LLP
Independent Auditors................................
9. Specimen Notice of Right of Withdrawal
Pursuant to Rule 6e-3(T)(b)(13)(viii)...............
10. Representations, Description and Undertakings
Regarding Mortality and Risk Charge Pursuant
to Rule 6e-3(T)(b)(13)(iii)(F)......................
14. Powers of Attorney
<PAGE>
Exhibit 1(a)
CERTIFIED COPY OF RESOLUTION OF BOARD OF DIRECTORS
OF
THE VOLUNTEER STATE LIFE INSURANCE COMPANY,
ADOPTED AT A MEETING HELD ON AUGUST 20, 1984
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
I, Jon D. Schneider, Secretary of The Volunteer State Life Insurance
Company, do hereby certify that the following resolutions were adopted at a
meeting of the Board of Directors on August 20, 1984:
RESOLVED, that, pursuant to the provisions of Section 56-3-501 et seq. of the
Tennessee Code Annotated and the regulations promulgated thereunder by the
Tennessee Commissioner of Insurance, the Board of Directors of The Volunteer
State Life Insurance Company (the "Company") does hereby establish a separate
account to be known as 'Chubb/Volunteer Separate Account A" for the purpose
of allocating thereto any amounts paid to or held by the Company in
connection with the issuance of variable life insurance policies (the
"Policies") including but not limited to, amounts held under optional
settlement modes;
FURTHER RESOLVED, that the income, gains and losses, realized or
unrealized, in the Chubb/Volunteer Separate Account A shall be credited
to or charged against the amounts allocated to Chubb/Volunteer
Separate Account A in accordance with the terms of the Policies, without
regard to other income, gains or losses of the Company;
FURTHER RESOLVED, that Chubb/Volunteer Separate Account A shall be divided
into divisions and subdivisions so that each division or subdivision may
invest in the shares of designated investment companies with the net
premiums received under the Policies as directed by the owners of said
Policies;
FURTHER RESOLVED, that the Executive Committee of the Board of Directors
be, and it hereby is, expressly authorized in its discretion as it
may deem appropriate from time to time in accordance with applicable
laws and regulations (a) to divide Chubb/Volunteer Separate Account A
into one or more divisions or subdivisions, (b) to modify or eliminate any
such divisions or subdivisions, (c) to change the designation of Chubb/
Volunteer Separate Account A to another designation and (d) to further
designate any divisions or subdivisions thereof;
<PAGE>
Certification of Resolution
Page 2
FURTHER RESOLVED, that amounts allocated to Chubb/Volunteer Separate Account
A and any accumulations thereon, or to any division of Chubb/Volunteer
Separate Account A, may be invested and reinvested in any class of
investments which may be authorized in the Policies, including, but not
limited to, shares of an investment company or companies established pursuant
to the Investment Company Act of 1940 and regulations promulgated thereunder,
without regard to any requirements or limitations prescribed by the laws of
Tennessee governing the investments of life insurance companies; provided,
that, to the extent that the Company's reserve liability with regard to:
(a) benefits guaranteed as to amount and duration; and
(b) funds guaranteed as to principal amounts or stated rate of interest
is maintained in Chubb/Volunteer Separate Account A, a portion of the assets
of such separate account at least equal to such reserve liability shall be
invested in accordance with the laws of the State of Tennessee governing the
investments of life insurance companies;
FURTHER RESOLVED, that the following binding Standards of Conduct applicable
to the Company, its officers, directors, employees, and affiliates
("Persons") with respect to the purchase and sale of investments of
Chubb/Volunteer Separate Account A can be adopted:
(a) No Person shall engage in any action or activity which the Person has
reason to believe could in any way conflict with Chubb/Volunteer
Separate Account A's interests.
(b) No Person, directly or indirectly, shall, in connection with any
transaction, (a) employ any device, scheme or artifice to defraud
Chubb/Volunteer Separate Account A; (b) make to Chubb/Volunteer Separate
Account A any untrue statement of a material fact or omit to state to
the Chubb/Volunteer Separate Account A a material fact necessary in
order to make the statements made, in light of the circumstances under
which they are made, not misleading; (c) engage in any act, practice, or
course of business which operates or would operate as a fraud or deceit
upon Chubb/Volunteer Separate Account A; or (d) engage in any
manipulative practice with respect to the Chubb/Volunteer Separate
Account A.
(3) No Person shall accept, directly or indirectly, any gift, favor,
service, or anything of value from any broker, dealer or other person
which could be construed as being
<PAGE>
Certification of Resolution
Page 3
compensation for causing Chubb/Volunteer Separate Account A to engage in
any transaction with such broker, dealer or other person.
(4) Each Person shall keep confidential all information regarding past or
future transactions, investment programs and studies of Chubb/Volunteer
Separate Account A, except as may be required by applicable law or
approved by the Company's Board.
FURTHER RESOLVED, that the Chairman, the Vice Chairman, the President, any
Senior Vice President and the Treasurer, or any of them, (herein "Officers")
be, and they each hereby are, severally authorized to invest cash in
Chubb/Volunteer Separate Account A or in any division thereof as may be
deemed necessary or appropriate to facilitate the commencement of
Chubb/Volunteer Separate Account A's operations or to meet any minimum
capital requirements under the Investment Company Act of 1940 and to transfer
cash or securities from time to time between the Company's general account
and Chubb/Volunteer Separate Account A as deemed necessary or appropriate so
long as such transfers are not prohibited by law and are consistent with the
terms of the Policies;
FURTHER RESOLVED, that the Officers be, and they each hereby are, authorized
and directed, in conjunction with the Company's independent certified public
accountants, legal counsel, independent consultants and/or such others as
they deem appropriate, to take such action as they may deem necessary or
appropriate to:
(a) register Chubb/Volunteer Separate Account A as a unit investment trust
under the Investment Company Act of 1940, as amended;
(b) register the Policies in such amounts, which may be indefinite amounts,
as the Officers shall from time to time deem appropriate under the
Securities Act of 1933; and
(c) take all other action which in their judgment may be necessary or
appropriate in connection with the offering of said Policies for sale
and the operation of Chubb/Volunteer Separate Account A in order to
comply with the Investment Company Act of 1940, the Securities Exchange
Act of 1934, the Securities Act of 1933 and all other applicable federal
laws and regulations, including the filing of any registration
statements, amendments to registration statements, notifications of
registration statements, any undertakings, and any applications for
exemptions from the Investment
<PAGE>
Certification of Resolution
Page 4
Company Act of 1940, the Securities Act of 1933, or other applicable
federal laws and regulations;
FURTHER RESOLVED, that Harold E. Ruck, President, and George A. Henning,
Senior Vice President, are duly appointed as agents for service of process
under such registration statements and duly authorized to receive
communications and notices from the Securities and Exchange Commission with
respect thereto and to exercise any powers given to such agents by the rules
and regulations under the Securities Act of 1933;
FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and
directed on behalf of Chubb/Volunteer Separate Account A and on behalf of the
Company to take any and all actions that any of them may deem necessary or
advisable in order to offer and sell the Policies, including any
registrations, filings and qualifications both of the Company, its officers,
agents and employees, and of the Policies, under the insurance and securities
laws of any state or any other jurisdiction, and in connection therewith to
prepare, execute, deliver and file all such applications, reports, covenants,
resolutions, applications for exemptions, consents to service of process and
other papers and instruments as may be required under such laws, and to take
any and all further action which said Officers or legal counsel for the
Company may deem necessary or desirable in order to maintain such
registrations or qualifications for as long as said Officers or legal counsel
deem it to be in the best interest of Chubb/Volunteer Separate Account A and
the Company;
FURTHER RESOLVED, that any form of corporate resolution required by any State
or other jurisdiction in connection with any filing, registration, or
approval as contemplated in these resolutions is hereby adopted and the
Officers be, and they hereby are, authorized to certify to the adoption
thereof by this Board;
FURTHER RESOLVED, that the Officers be, and they hereby are, authorized in
the names and on behalf of Chubb/Volunteer Separate Account A and the Company
to execute the file irrevocable written consents to be used in such States
and other jurisdictions wherein such consents to service of process may be
requisite under the insurance or securities laws thereof in connection with
said registration or qualification of the Policies or Chubb/Volunteer
Separate Account A and to appoint the appropriate State or other public
official, or such other person as may be specified by said insurance or
securities laws, as agent of Chubb/Volunteer Separate Account A and of the
Company for the purpose of receiving and accepting process;
<PAGE>
Certification of Resolution
Page 5
FURTHER RESOLVED, that the Officers be, and they hereby are, authorized to
establish procedures to the extent required and subject to the limitations of
applicable law, for providing a pass-through of voting rights for owners of
the Policies with respect to the shares of an investment company or
companies, attributable to them, owned by Chubb/Volunteer Separate Account A;
FURTHER RESOLVED, that the following general Standard of Suitability which
expresses the policy of the Company with respect to determining the
suitability for applicants be adopted: No recommendation shall be made to a
potential applicant to purchase a variable life insurance product and no
variable life insurance product shall be issued in the absence of reasonable
grounds to believe that the purchase of same is not unsuitable for such
applicant on the basis of information furnished after reasonable inquiry of
such applicant concerning the applicant's insurance and investment
objectives, financial situation and needs, and any other information known to
the Company or to the sales representative making the recommendation;
FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and
directed to execute such agreement or agreements as they deem necessary or
appropriate:
a. with Chubb Securities Corp. or other qualified entity under which Chubb
Securities Corp. or such other entity will be appointed principal
underwriter and distributor for the Policies; and
b. with one or more qualified banks or other qualified entities including
the Company to provide administrative and/or custodial services in
connection with the establishment and maintenance of Chubb/Volunteer
Separate Account A and the design, issuance and administration of the
Policies;
FURTHER RESOLVED, that, because it is intended that Chubb/Volunteer Separate
Account A will invest in the securities issued by an investment company
registered under the Investment Company Act of 1940, the Officers be, and
they hereby are, authorized and directed:
(a) to instruct legal counsel to incorporate and register with The
Securities and Exchange Commission such an investment company or
companies; and
(b) to execute whatever agreement or agreements as may be necessary or
appropriate to enable such investments to be made;
<PAGE>
Certification of Resolution
Page 6
FURTHER RESOLVED, that the Officers be, and they hereby are, authorized and
directed to execute and deliver such agreements and other documents and to do
such acts and things as each of them may deem necessary or desirable to carry
out the foregoing resolutions and the intent and purposes thereof.
/s/ Jon D. Schneider
---------------------------
Jon D. Schneider
Secretary
The Volunteer State Life Insurance Company
April 5, 1990
---------------------------
Date
<PAGE>
Exhibit 1(c) (i)
UNDERWRITING AGREEMENT
BETWEEN
THE VOLUNTEER STATE LIFE INSURANCE COMPANY
CHUBB SECURITIES CORPORATION
<PAGE>
SEPARATE ACCOUNT DISTRIBUTION AGREEMENT
---------------------------------------
BETWEEN
-------
CHUBB SECURITIES CORPORATION
----------------------------
AND
---
THE VOLUNTEER STATE LIFE INSURANCE COMPANY
------------------------------------------
<PAGE>
SEPARATE ACCOUNT
----------------
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made this 27th day of February , 1985, by and between CHUBB
---- --------
SECURITIES CORPORATION, a corporation organized and existing under the laws of
the State of New Hampshire with its principal place of business in Concord, New
Hampshire (herein the "DISTRIBUTOR") and THE VOLUNTEER STATE LIFE INSURANCE
COMPANY, an insurance company organized and existing under the laws of the State
of Tennessee with its principal place of business in Chattanooga, Tennessee
(herein the "COMPANY").
W I T N E S S E T H:
WHEREAS, the Company and Chubb/Volunteer Separate Account A (the
"Account"), a separate investment account established pursuant to the provisions
of (S)56-3-5Ol et seq. of the Tennessee Code Annotated and a registered
investment company under the Investment Company Act of 1940 (the "1940 Act"),
propose to offer for sale certain variable life insurance policies (together
with any riders, the "Policies") which may be deemed to be securities under the
Securities Act of 1933 (the "1933 Act") and the laws of some states; and
WHEREAS, the Distributor, a wholly-owned subsidiary of Chubb Life
Insurance Company of America, is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934 (the "1934 Act") and is a member of the National Association of
Securities Dealers, Inc. (the "'NASD"); and
WHEREAS, the parties desire to have the Distributor act as
principal underwriter for the Account and assume full responsibility for the
securities activities of any "person associated" (as that term is defined in
<PAGE>
Section 3(a) (18) of the 1934 Act) with the Distributor and engaged directly or
indirectly in the variable life insurance operation (the "Associated Persons");
and
WHEREAS, the parties desire to have the Company perform certain
services in connection with the sale of the Policies;
NOW, THEREFORE, in consideration of the covenants and mutual promises
herein contained and of other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the Distributor and the
Company agree as follows:
1. The Distributor will act as the exclusive principal underwriter
during the term of this Agreement in each state or other jurisdiction where the
Policies may legally be sold. The Distributor shall at all times function as and
be deemed to be an independent contractor and will be under no obligation to
effectuate any particular amount of sales of Policies or to promote or make
sales, except to the extent the Distributor deems advisable. Anything in this
Agreement to the contrary notwithstanding, the Company retains the ultimate
right to control the sale of the Policies, including the right to suspend sales
in any jurisdiction or jurisdictions, to appoint and discharge agents of the
Company, or to refuse to sell a Policy to any applicant for any reason
whatsoever.
2. The Distributor will assume full responsibility for the securities
activities of, and for securities law compliance by, the Associated Persons,
including, as applicable, compliance with the NASD Rules of Fair Practice and
Federal and state laws and regulations. The Distributor, directly or through the
Company as its agent, will (a) make timely filings with the SEC, NASD, and any
other securities regulatory authorities of any sales literature or materials
relating to the Account, as required by law to be filed, (b) make
-2-
<PAGE>
available to the Company copies of any agreements or plans intended for use in
connection with the sale of the Policies in sufficient number and in adequate
time for clearance by the appropriate regulatory authorities before they are
used, and (c) train the Associated Persons, use its best efforts to prepare them
to complete satisfactorily any and all applicable NASD and state qualification
examinations, register the Associated Persons as its registered representatives
before they engage in securities activities, and supervise and control them in
the performance of such activities. In connection with the clearance by
appropriate regulatory authorities the parties agree to use their best efforts
to obtain such clearance by the appropriate regulatory authorities as
expeditiously as reasonably possible and shall not use any materials, plan or
agreement in any jurisdiction unless all filings have been made and approvals
obtained that are necessary to make said use proper and legal therein.
3. The Company shall undertake to appoint the Distributor's qualified
representatives as life insurance agents of the Company, and shall be
responsible for ensuring that only agents properly qualified under the insurance
laws of all relevant jurisdictions will engage in the offer and sale of
Policies. Completed applications for the Policy shall be transmitted directly to
the Company for acceptance or rejection in accordance with insurance
underwriting and selection rules established by the Company. Initial and
subsequent premium payments under the Policies shall be made payable to the
Company and shall be held in a fudiciary capacity for and forwarded to the
Company promptly (and, in any event, within not more than 30 days).
4. The Distributor shall take reasonable steps to ensure that the
various representatives appointed by it shall not make recommendations to an
applicant to purchase a policy in the absence of reasonable grounds to believe
that the purchase of the Policy is suitable for said applicant. While not
limited to
-3-
<PAGE>
the following, a determination of suitability shall be based on information
furnished to a representative after reasonable inquiry of such applicant (and
any other information known about the applicant) concerning the applicant's
insurance and investment objectives and financial situation and needs, including
the likelihood that the applicant will make sufficient premium payments to
derive the benefits thereof.
No person shall use any sales aids, promotional material, or sales
literature which has not been specifically approved in advance by the Company,
and the Company will be responsible for filing such items, as necessary, with
any insurance regulatory authorities and, where necessary, obtaining approvals
of said authorities, No person shall, in connection with the offer or sale of
the Policies, make any representations or communicate any information regarding
the Policies or the Company, which are not contained in materials approved by
the Company as aforesaid or in the then-effective Registration Statement of the
Account under the Securities Act of 1933.
5. As between the Company and the Distributor, the Company will,
except as otherwise provided in this Agreement, bear and/or reimburse the
Distributor for the cost of all services and expenses, including direct legal
services and expenses and registration, filing and other fees, in connection
with (a) registering and qualifying the Account, the Policies, and (to the
extent requested by the Distributor) the Associated Persons with Federal and
state regulatory authorities and the NASD (including the training of Associated
Persons for this purpose), (b) printing, filing and distributing all
registration statements and prospectuses (including amendments), Policies,
notices, periodic reports, proxy solicitation material, sales literature and
advertising filed or distributed in connection with the sale of the Policies,
(c) complying with the requirements of Section 7 below, and (d) performing its
obligations under its
-4-
<PAGE>
Fund Distribution Agreement with Chubb America Fund, Inc., including, without
limitation, the Distributor's obligations thereunder to pay said fund's
distribution expenses.
6. The Company will, in connection with the sale of the Policies,
reimburse the Distributor for all amounts (including the sales commissions and
managers overrides described in the prospectus for the Policies) paid to the
sales representatives, managers or to other broker-dealers who have entered into
sales agreements with the Distributor.
7. The Distributor, directly or through the Company as its agent,
will (a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under
the 1934 Act all books and records required to be maintained in connection with
the offer and sale of the Policies being distributed pursuant to this Agreement,
which books and records shall remain the property of the Distributor and shall
be subject to inspection by the Securities and Exchange Commission in accordance
with Section 17(a) of the Act, and (b) upon or prior to completion of each
transaction for which a confirmation is legally required, send a written
confirmation for each such transaction reflecting the facts of the transaction.
All records maintained hereunder will be available to properly-constituted
governmental authorities, should the same be required to be filed with or
reviewed by said authorities.
8. The Distributor will execute such papers and do such acts and
things as shall from time to time be reasonably requested by the Company for the
purpose of (a) maintaining the registration of the Policies under the 1933 Act
and the Account under the 1940 Act, and (b) qualifying and maintaining
qualification of the Policies for sale under the applicable laws of any state.
9. The Company undertakes to guarantee the performance of all the
Distributor's obligations, imposed by Section 27(f) of the 1940 Act and
-5-
<PAGE>
paragraph (b) of Rule 27d-2 adopted by the SEC under that Act, to make refunds
of charges required of the principal underwriter of Policies issued in
connection with the Account.
10. Each party hereto shall advise the other promptly of (a) any
action of the SEC of any authorities of any state or territory, of which it has
knowledge, affecting registration or qualification of the Account or the
Policies, or the right to offer the Policies for sale, and (b) the happening of
any event which makes untrue any statement or which requires the making of any
change, in the registration statement or prospectus in order to make the
statements therein not misleading.
11. Neither party hereto shall be liable to the other for any action
taken or omitted by it, or any of its officers, agents or employees, in
performing their responsibilities under this Agreement in good faith and without
negligence, willful misfeasance or reckless disregard of such responsibilities.
12. As compensation for the Distributor's assuming the expenses and
performing the services to be assumed and performed by it pursuant to this
Agreement, the Distributor shall receive from the Company such amounts and at
such times as may from time to time be agreed upon by the Distributor and the
Company.
13. As compensation for its services performed and expenses incurred
under this Agreement, the Company will receive all amounts charged as "Sales
Charges" under the Policies. It is understood that the Company assumes the risk
that the above compensation for its services may not prove sufficient to cover
its actual expenses in connection therewith.
14. It is understood that any Policyholder or agent of the Account
may be a policyholder, shareholder, director, officer, employee or agent of, or
be otherwise interested in, the Distributor, any affiliated person of
-6-
<PAGE>
the Distributor, any organization in which the Distributor may have an interest
or any organization which may have an interest in the Distributor; that the
Distributor, any such affiliated person or any such organization may have an
interest in the Account; and that the existence of any such dual interest shall
not affect the validity hereof or of any transaction hereunder except as may
otherwise be provided in the articles of organization or by-laws of the
Distributor or by specific provisions of applicable law. For the purpose of this
Agreement, the term "affiliated persons" shall have its respective meaning
defined in the 1940 Act subject, however, to such exemptions as may be granted
by or pursuant to that Act.
15. This Agreement shall become effective as of the date of its
execution, shall continue in full force and effect until terminated, may be
amended at any time by mutual agreement of the parties hereto, and may be
terminated at any time without penalty on sixty days written notice by either
party to the other.
16. The Distributor will not assign or delegate its responsibilities
under this Agreement, except with the written consent of the Company.
17. This Agreement shall be construed in accordance with the laws of
the State of Tennessee.
18. The Distributor shall keep confidential any information obtained
pursuant to this Agreement, and shall disclose such information only if the
Company has authorized such disclosure, or if such disclosure is expressly
required by applicable Federal or state authorities.
19. The Distributor and the Company agree to cooperate fully in any
insurance regulatory examination, investigation, or proceeding or any juridical
proceeding arising in connection with the Policies. The Distributor and the
Company further agree to cooperate fully in any securities regulatory
-7-
<PAGE>
examination, investigation or proceeding or any judicial proceeding with respect
to the Company, the Distributor, their affiliates and their agents or
representatives, to the extent that such examination, investigation or
proceeding is in connection with Policies distributed under this Agreement. The
Distributor shall furnish applicable Federal and state regulatory authorities
with any information or reports in connection with its services under this
Agreement, which authorities may request in order to ascertain whether the
Company's operations are being conducted in a manner consistent with any
applicable law or regulations.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
CHUBB SECURITIES CORPORATION
BY: [signature appears here]
----------------------------
THE VOLUNTEER STATE LIFE INSURANCE COMPANY
BY: /s/ Harold E. Ruck
----------------------------
-8-
<PAGE>
Exhibit 1(c) (ii)
AMENDMENTS TO UNDERWRITING AGREEMENT
BETWEEN
THE VOLUNTEER STATE LIFE INSURANCE COMPANY
AND
CHUBB SECURITIES CORPORATION
<PAGE>
AMENDMENT TO SEPARATE ACCOUNT DISTRIBUTION AGREEMENT
----------------------------------------------------
This Amendment to the Separate Account Distribution Agreement by and between
Chubb Securities Corporation (herein the "Distributor") and The Volunteer State
Life Insurance Company (herein the "Company") is made this 24th day of January,
1989. ---- -------
RECITALS
--------
WHEREAS, the Company and the Distributor have entered into a Separate
Account Distribution Agreement dated February 27, 1985, and
WHEREAS, paragraph 15 of the Separate Account Distribution Agreement allows
for the parties to amend the Agreement at any time by mutual agreement, and
WHEREAS, the parties now wish to amend the Separate Account Distribution
Agreement.
AMENDMENT
---------
1. Paragraph 7 of the Agreement is hereby amended to read in its entirety as
follows:
The Distributor, directly or through the Company as its agent, will
(a) maintain and preserve in accordance with Rules 17a-3 and 17a-4 under
the 1934 Act all books and records required to be maintained in
connection with the offer and sale of the Policies being distributed
pursuant to this Agreement, which books and records shall remain the
property of the Distributor and shall be subject to inspection by the
Securities and Exchange Commission in accordance with Section 17(a) of
the Act, and (b) upon or prior to completion of each transaction for
which information is legally required, send a written confirmation for
each such transaction reflecting the facts of the transaction. All
records maintained hereunder will be available to properly constituted
governmental authorities, should the same be required to be filed with or
reviewed by said authorities. The Company shall have access to all
records maintained hereunder and, upon reasonable request, copies shall
be furnished to the Company.
2. This Amendment to the Separate Account Distribution Agreement shall be
effective as of the date it was signed by all parties. In all other respects,
the Separate Account Distribution Agreement will remain unchanged and in full
force and effect.
<PAGE>
Accepted for Chubb Securities Corporation, Concord, NH this 24th day
----
of January, 1989.
-------
By: /s/ Bruce R. Stefany
--------------------------
Name: Bruce R. Stefany
------------------------
Title: President
-----------------------
Accepted for The Volunteer State Life Insurance Company, Chattanooga,
TN, this 24th day of January, 1989.
---- -------
By: /s/ Harold E. Ruck
--------------------------
Name: Harold E. Ruck
------------------------
Title: President
-----------------------
<PAGE>
Exhibit 1(c) (iii)
SPECIMEN DISTRICT MANAGER'S AGREEMENT
OF
CHUBB SECURITIES CORPORATION
<PAGE>
Chubb Securities Corporation
One Granite Place, P0 Box 2005
Concord, New Hampshire 03302
(603) 224-7741
DISTRICT MANAGER'S
AGREEMENT
This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called the Company) and ________________________________________________________
____________________ of ________________________________ (hereinafter called the
District Manager).
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
Effective Date
The agreement shall be effective as of ________________________, 19__________
Territory
It is agreed that the District Manager will represent the Company in the
State(s) of __________________________________________________________________
and any other state in which the District Manager becomes registered hereafter.
Terms
1. The Company, subject to the terms and conditions contained herein, hereby
authorizes the District Manager, as an independent contractor, to represent it
in the sale of securities for which the Company may now or hereafter act as
principal, dealer, wholesaler or underwriter. The District Manager agrees to
direct the sales activities of each Sales Representative assigned to the
District Manager's agency and further to enforce the Supervisory Procedures (and
any amendments thereto) issued by the Company from time to time in regard to
such Sales Representatives. The District Manager shall at all times act in
strict compliance with all state and federal securities laws, including but not
limited to the Federal Securities Act of 1933, as amended, and with the rules
and regulations of the National Association of Securities Dealers, Inc.
2. The Company reserves the right to accept or reject any or all business
submitted to it by the District Manager. In all cases in which the question of
credit for business, confirmation of orders, or compensation is not definitely
stipulated herein, the decision of the Company shall be final.
3. The District Manager agrees to use his/her best efforts on behalf of the
Company while so representing it, and will not engage in any employment by, or
representation of, any issuer of or dealer in securities other than those
offered by the Company without the written consent of the Company. The District
Manager agrees to promptly report and remit to the Company all checks, drafts or
funds of any kind received from customers without commingling same with the
District Manager's own funds, and in the event of failure to do so, all rights
hereunder, including all accrued and accruing commissions, shall immediately
terminate. If and when requested by the Company, the District Manager shall
furnish a surety bond satisfactory to the Company. This Agreement shall be
immediately and automatically canceled upon cancellation of coverage by the
surety under said bond.
4. The District Manager shall be free to exercise his/her own judgment as to
whom to solicit and the time, place and manner of solicitation. The District
Manager shall pay all expenses in connection with conducting business as a Sales
Representative and shall comply with all federal and state laws, ordinances and
regulations relating thereto.
1
<PAGE>
The District Manager shall make no solicitation for any securities until he/she
has been duly registered under the applicable state and federal laws, and until
any license or permit required by law has been obtained, and unless such
registration is then in effect.
5. The District Manager agrees that, in connection with all solicitations,
he/she will not take or recommend any action which they may have reason to
believe is not in the best interests of each client or customer. The District
Manager agrees not to make any untrue statement or misrepresentations, or omit
any material facts concerning the securities involved. The District Manager also
agrees to comply in all respects with the Rules of Fair Practice, and other
applicable rules of the National Association of Securities Dealers, Inc. and all
applicable federal and state laws.
6. The District Manager hereby assigns to the Company any and all commissions
or other monies owed to the District Manager under any contracts he/she may have
with the Chubb Life Insurance Company of America or any subsidiary or affiliate
thereof, as security for the repayment of any loan or extensions of credit made
to the customers of the District Manager at the District Manager's request or
for any losses incurred by the Company in any transaction. The District Manager
hereby authorizes Chubb Life Insurance Company of America, or any of its
subsidiaries or affiliates to pay such monies to the Company to the extent of
the Company's interest therein upon receipt of written demand by the Company.
7. If the District Manager's contract with Chubb Securities Corporation has not
been terminated, the District Manager shall be entitled to commissions with
respect to all sales the District Manager shall make in accordance with the
Commission Schedules issued from time to time by the Company and incorporated by
reference herein. All commissions are payable subject to receipt of full payment
for the securities sold. The District Manager hereby expressly waives all rights
to such earned commissions or other payments until such time as the Company is
in actual receipt of the concession due in respect to such sale. The amount of
any such excess shall be refunded to the Company in the event of termination of
this Agreement, to the extent that such commissions have not been earned prior
to such termination. Any indebtedness from the District Manager to the Company
shall be a first lien upon any amount due the District Manager hereunder.
8. The Company agrees that, if any Sales Representative assigned to the
District Manager's agency is terminated under any conditions or circumstances
which preclude the payment of commissions thereafter, then pursuant to Paragraph
8 of such Sales Representative's Agreement with the Company, the Company shall
pay to the District Manager the Sales Representative's commissions which become
due thereafter as personal production The Company shall, then treat such
commissions as business personally produced by the District Manager.
9. If the District Manager either dies or retires after attaining the age of 55
or is permanently and totally disabled and terminates his license with the
National Association of Securities Dealers, Inc., the Company will continue to
pay commissions subject to the following conditions and limitations. If this
Agreement is terminated for any reason other than death, retirement or permanent
and total disability, then no commissions or other compensation shall be paid;
provided however, that if this Agreement is terminated for any reason other than
the National Association of Securities Dealers, Inc. disqualification, then
commissions will continue to be paid in accordance with the Supplemental
Commission Schedule (for any replacement thereof) on all premium payments
received by the Company on variable life insurance products.
Other than in the event of death, the District Manager must agree to the
continuance of this Agreement and must agree in writing not to solicit any new
securities business or to attempt to obtain a securities license through any
other entity.
If the District Manager so agrees, or in the event of death, the Company
will continue to pay to the District Manager or his/her estate, all commissions
due the District Manager totaling in excess of $100 per annum on business
personally produced by the District Manager. Commissions payable will be
determined based on New Customer Account forms executed prior to the termination
of his license. Commissions will be payable for a period not to exceed 10 years
from the date of termination or death. Commissions will be paid for the balance
of the calendar year at the rate currently in effect at the time of termination.
Thereafter, commissions will be paid at the appropriate commission level as
determined pursuant to the terms of the District Manager's Commission Schedule.
The Company will not pay commissions to any District Manager who is
disqualified from association with any member of the National Association of
Securities Dealers, Inc. because of revocation, expulsion, suspension, or any
other reason, nor will the Company pay commissions in violation of any
applicable laws or regulations.
10. The Company will, each month, furnish to the District Manager a statement
of the District Manager's account showing all earnings and payments made to
his/her account and the balance due from the Company and the amount of any
indebtedness due from the District Manager to the Company. The District Manager
agrees to notify the Company, in writing,
2
<PAGE>
within 30 days, of any discrepancy or disagreement with such statement in any
respect. In the absence of such notice, such statement shall be conclusively
presumed to be correct unless the parties mutually agree to an adjustment in
writing.
11. The Company may offset against any commissions or other monies accruing to
the account of the District Manager under the terms of this Agreement any debts,
liabilities, or other obligations of the District Manager due to the Company or
any affiliate of the Company. This right of offset shall apply both during the
existence of this Agreement and upon its termination.
12. Any commissions or other compensation due to a Sales Representative
assigned to the District Manager's agency will be included in the commission
paid to the District Manager for payment to the Sales Representative, unless the
District Manager informs the Company in writing to pay commissions or other
compensation directly to the Sales Representative. The District Manager agrees
to pay commissions or other compensation to the Sales Representative in
accordance with the Commission Schedules issued by the Company.
13. The District Manager shall obtain and maintain for the term of this
Agreement errors and omissions insurance, satisfactory to the Company, and shall
provide proof of such coverage to the Company.
14. This Agreement may be terminated at any time by either party upon thirty
(30) days written notice to the other, and may be terminated immediately by the
Company for cause or breach of this Agreement by the District Manager. Notice of
such termination shall be deemed to be given on the day mailed or delivered. If
mailed to the Company, such notice shall be addressed to the principal office of
the Company at One Granite Place, Concord, New Hampshire 03301. If mailed to the
District Manager, notice shall be addressed to the last known address as shown
on the records of the Company.
15. With respect to any concession which the Company may receive as a residual
concession at the termination of a direct participation program, it being
understood that any such residual concession to the Company is contingent in
nature and there is no guarantee that the Company will ever actually receive
such payment, the Company will, upon receipt of such residual concession, pay
out a commission to the District Manager in accordance with the vesting schedule
as follows:
(i) If the District Manager has been under agreement with the Company for no
less than one nor more than five years, then he/she shall be vested to receive
any residual concession three years or more after the program sale is made;
(ii) If the District Manager has been under agreement with the Company for no
less than six nor more than ten years, he/she shall be vested to receive any
residual concession two years or more after the program sale is made; and
(iii) If the District Manager has been under agreement with the Company for more
than ten years, then he/she shall be vested to receive any residual concession
one year or more after the program sale is made;
provided, however, that the District Manager must continue to be under agreement
with the Company for the number of years set forth in the applicable portion of
the above vesting schedule after a program sale is made. If the District Manager
does not remain under agreement for the applicable number of years after a
program sale is made, then no residual concession shall be paid. The amount of
the residual concession commission paid shall be as set forth in the Commission
Schedule in effect at the time of the payment, but in no event will the
commission be less than 75% of the concession which the Company actually
receives.
Payment of a commission to the District Manager out of any residual concessions
received by the Company will be considered as any other commission and all
provisions of this Agreement which relate to commissions will also apply to
these commissions, specifically including but not limited to the terms of
paragraphs 8 and 9.
16. This Agreement is made in the State of New Hampshire and all questions
concerning its validity, construction or otherwise shall be determined under the
laws of New Hampshire.
IN WITNESS WHEREOF, the parties hereto have executed this agreement in
duplicate as of the date first written below.
Chubb Securities Corporation District Manager
----------------
by:
-------------------------------- --------------------------------
Date: Date:
----------------------------- ---------------------------
Date:
---------------------
3
<PAGE>
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 224-7741
DISTRICT MANAGER COMMISSION SCHEDULE
This Commission Schedule is a part of the District Manager's Agreement entered
into by the District Manager and the Company, is incorporated by reference
therein, and supersedes any prior schedule.
Commissions will be a percentage of total dealer concession actually paid to the
Company on all business produced personally by the District Manager or by any
and all Sales Representatives assigned to the District Manager for supervision.
Commissions will be paid on the following transactions:
1. Mutual Fund Cash Sales - Commissions will be paid only on sales of $20.00 or
more.
2. Variable or Fixed Annuity and Mutual Fund Contractual Sales - Commissions
will be paid on first year and subsequent payments. Commissions will be paid
only on sales of $20.00 or more.
3. Private Placements - Commissions will be paid for all staged-in payments as
well as any residual benefits available to the District Manager. For the
purposes of computing commissions on private placements, the Company shall
retain one-third of any marketing or due diligence expense allowance (or
other terminology generally accepted to mean such a concept) paid on a per
unit basis in excess of 9%, and will pay commissions out of the balance.
4. General Securities Sales of Any Other Type - No commissions are payable on
the Execution fee collected from the customer.
5. Public Limited Partnerships, Unit Investment Trusts
6. Any Other Sales Made Available Through the Company's Facilities - In
accordance with Supplemental Commission Schedules.
Ensemble Premium (up to VOLCAP) Credit for purposes of commission level as set
forth below will be given and applied to Dealer Concession until the total,
including Ensemble premium, equals $25,000. After a total of $25,000 has been
reached, no Ensemble premium credit will be allowed to reach any other
commission level.
During the first contract year (12 months following the date of full
registration with the Company), the District Manager will receive 50% of Dealer
Concession. A level in excess of 50% can be established during the first
contract year if the District Manager provides the Company with proof of
earnings from Securities Sales for a period immediately preceding registration
with the Company. This higher level of commission must be authorized in writing
by a Principal of the Company.
After the first contract year, a commission level will be established for future
commission payments on the basis of the Dealer Concession achieved by the
District Manager during the first contract year. The commission level for each
subsequent year will be established thereafter in January, based on the previous
calendar year's Dealer Concession.
Overriding commission has been incorporated in the below commission levels. Any
reference to overriding commissions in the District Manager's Agreement is
superseded by this Commission Schedule.
The Dealer Concession levels to establish commission rates are as follows:
<TABLE>
<CAPTION>
Dealer Concession Commission Level
----------------- ----------------
<S> <C>
Up to $10,000 50%
$10,000 to $24,999 65%
$25,000 to $49,999 75%
$50,000 to $74,999 77%
$75,000 to $124.999 80%
$125,000 to $199,999 82%
$200,000 to $649,999 85%
$650,000 to $899,999 87%
$900,000 and above 90%
</TABLE>
The above commission levels are retroactive to all Dealer Concession earned
after January 1 of the then current year if a new commission level is attained
during any given calendar year.
4
<PAGE>
Dealer Concession earned will be monitored to effect the change in commission
level as the District Manager becomes eligible for it. Once a higher commission
level has been achieved, it will be credited and paid on the following
commission statement.
Each District Manager's Dealer Concession production will be subject to review
on June 30th of each year. If the District Manager has not produced dealer
concession above 70% of the prorated minimum for the attained commission level,
the commission rate will be reduced on subsequent commissions earned to the
appropriate level. If the District Manager is still in the first contract year,
no reduction will take effect.
The District Manager shall be responsible for the payment of the Sales
Representative's commission from the commission paid to the District Manager.
Payment to the Sales Representative in excess of the standard commission set
forth in the Sales Representative's contract shall be permissible. Factors such
as sales ability, potential, and other factors may be taken into account in
making such payments to Sales Representatives assigned to the District Manager.
This Commission Schedule rescinds and replaces all prior commission Schedules
issued by the Company as of its effective date and will continue in effect until
such time as a new Schedule is issued by the Company.
Effective date of this Schedule: December 1, 1989.
5
<PAGE>
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 224-7741
SUPPLEMENTAL DISTRICT MANAGER COMMISSION SCHEDULE
Non-Participating Flexible Premium Variable Life Insurance Policies
Issued by an Affiliated Life Insurance Company
This Supplemental Commission Schedule is a part of the District Manager's
Agreement entered into by the District Manager and Chubb Securities Corporation
(the Company) and is incorporated by reference therein.
COMMISSION
Commissions on policies issued on applications personally written by the
District Manager will be paid on premiums received by the Company as outlined on
the below table.
OVERRIDE
Gross commissions on policies issued on applications personally written by the
District Manager and on applications written by Sales Representatives attached
to the District Manager's office will be paid on premiums received by the
Company as outlined on the below table:
<TABLE>
<CAPTION>
TYPE OF POLICY 1ST YEAR 2ND - 15TH YEAR
RR DM RR DM
<S> <C> <C> <C> <C>
Ensemble (1)
Issue Ages 0-75 40% 15% 2% 2%
</TABLE>
<TABLE>
<CAPTION>
INITIAL SPECIFIED AMOUNT INITIAL SPECIFIED AMOUNT
$25,000 - $99,999 $100,000 AND OVER
RR DM RR DM ALL SPECIFIED AMOUNTS
<S> <C> <C> <C> <C> <C>
Ensemble II (1)
Issue Ages 0-39 35 12.5 40 15 2% 2%
Issue Ages 40-49 40 12.5 45 15 2% 2%
Issue Ages 50-69 40 17.5 45 20 2% 2%
Issue Ages 70-75 45 17.5 50 20 2% 2%
</TABLE>
(i) First year rate based on premium
less than or equal to the
appropriate VOLCAP premium.
<TABLE>
<CAPTION>
ALL SPECIFIED AMOUNTS
<S> <C> <C>
Excess 1ST year 2% 2%
premium
</TABLE>
<TABLE>
<CAPTION>
INITIAL SPECIFIED AMOUNT INITIAL SPECIFIED AMOUNT
$25,000 - $99,999 $100,000 AND OVER
RR DM RR DM ALL SPECIFIED AMOUNTS
<S> <C> <C> <C> <C> <C> <C>
Ensemble II
(Single Pay) (2) 3.5 2.5 4 3 2% 2%
</TABLE>
(2) A Single Premium sale is defined as when the premium received in year one
exceeds 75% of the DEFRA Guideline Single Premium as published in the rate
card.
The District Manager's Gross Commissions will be paid on this product as stated
above even if the minimum commission requirement as stated in the District
Manager Commission Schedule is not achieved.
The Schedule of VOLCAP premium is published by the underwriting life insurance
company in the rate card giving The Guideline Premium for Non Participating
Flexible Premium Variable Life. Such Schedule is subject to change upon 30 days
notice by the underwriting life insurance company.
6
<PAGE>
VESTINGS
I. Immediate Vesting
-----------------
All overriding commissions and Sales Representative's commissions on personally
produced business which accrue during the first ten policy years will be vested
immediately.
II. Lifetime Vestings
-----------------
So long as 1) this contract will have been in force for at least three years
before termination, 2) this contract will have been terminated for reasons other
than cause, and 3) the District Manager has equivalent annualized life insurance
premiums in force of $300,000, agent commissions and overriding commissions will
be paid during the lifetime of the District Manager and for ten years following
death to the District Manager's estate.
III. Vesting in the Event of Death
-----------------------------
The Company will pay all overriding commissions and Sales Representative's
commissions on personally produced business to the District Manager's estate
which accrue during the ten years following the District Manager's death.
IV. Vesting in the Event of Total and Permanent Disability
------------------------------------------------------
The Company will pay all overriding commissions and Sales Representative's
commissions on personally produced business to the District Manager which accrue
during the District Manager's lifetime while total and permanent disability
continues and to the District Manager's estate which accrue during the ten years
following the District Manager's death if such death occurs while the District
Manager is totally and permanently disabled. "Total and permanent disability"
means the complete inability of the District Manager for a continuous period of
six consecutive months in any occupation for which the District Manager is
reasonably fitted by education, training or experience.
V. Minimum Payment Condition
-------------------------
After termination of this contract, commissions will be paid whenever the total
amount due accrues to a minimum of $100. If the total commissions in any
calendar year following contract termination amount to less than $500, no
further commissions of any kind shall be paid.
EFFECTIVE DATE OF THIS SCHEDULE: December 1, 1989.
7
<PAGE>
Exhibit 1(c) (iv)
SPECIMEN SALES REPRESENTATIVE'S AGREEMENT
OF
CHUBB SECURITIES CORPORATION
<PAGE>
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 224-7741
SALES REPRESENTATIVE'S
AGREEMENT
This AGREEMENT is made by and between CHUBB SECURITIES CORPORATION, a
corporation organized and existing under the laws of the State of New Hampshire
with its principal place of business in Concord, New Hampshire (hereinafter
called the Company) and ________________________________________________________
____________________ of ______________________ (hereinafter called the Sales
Representative)
In consideration of the premises and the mutual agreements herein made, it is
agreed as follows:
Effective Date
The agreement shall be effective as of _________________________, 19 _________
Territory
It is agreed that the Sales Representative will represent the Company in the
State(s) of ________________________ and any other state in which the Sales
Representative becomes registered hereafter.
Terms
1. The Company, subject to the terms and conditions contained herein, hereby
authorizes the Sales Representative, as an independent contractor, to represent
it in the sale of securities for which the Company may now or hereafter act as
principal, dealer, wholesaler or underwriter. The Sales Representative shall at
all times act in strict compliance with the state and federal securities laws,
including but not limited to the Federal Securities Act of 1933, as amended, and
with the rules and regulations of the National Association of Securities
Dealers, Inc.
2. The Company reserves the right to accept or reject any or all business
submitted to it by the Sales Representative. In all cases in which the question
of credit for business, confirmation of orders, or compensation is not
definitely stipulated herein, the decision of the Company shall be final.
3. The Sales Representatives agrees to use his/her best efforts on behalf of the
Company while so representing it, and will not engage in any employment by, or
representation of, any issuer of or dealer in securities other than those
offered by the Company without the written consent of the Company. The Sales
Representative agrees to promptly report and remit to the Company all checks,
drafts or funds of any kind received from customers without commingling same
with the Sales Representative's own funds and, in the event of failure to do so,
all rights hereunder, including all accrued and accruing commissions, shall
immediately terminate. If and when requested by the Company, the Sales
Representative shall furnish a surety bond satisfactory to the Company. This
Agreement shall be immediately and automatically canceled upon cancellation of
coverage by the surety under said bond.
4. The Sales Representative shall be free to exercise his/her own judgment as to
whom to solicit and the time, place and manner of solicitation, subject to the
vesting provisions of this Agreement. The Sales Representative shall pay all
expenses in connection with conducting business as a Sales Representative and
shall comply with all federal and state laws, ordinances and regulations
relating thereto. The Sales Representative shall make no solicitation for any
securities until he/she have been duly registered under the applicable state and
federal laws, and until any license or permit required by law have been
obtained, and unless such registration is then in effect.
5. The Sales Representative agrees that, in connection with all solicitations,
he/she will not take or recommend any action which they may have reason to
believe is not in the best interest of each client or customer. The Sales
Representative agrees not to make any untrue statement or misrepresentations, or
omit any material facts concerning the securities involved, and will also
comply in all respects with the Rules of Fair Practice and other applicable
rules of the National Association of Securities Dealers, Inc. and all
applicable) federal and state laws.
6. The Sales Representative hereby assigns to the Company any and all
commissions or other monies owed to the Sales Representative or which hereafter
accrue to the Sales Representative under any contracts he/she may have
with the Chubb Life Insurance Company of America or any subsidiary or affiliate
thereof, as security for the repayment of any loan or extensions of credit made
to the customers of
<PAGE>
the Sales Representative at the Representative's request by the Company or for
any losses incurred by the Company in such transaction. The Sales Representative
hereby authorizes Chubb Life Insurance Company of America, or applicable
subsidiary or affiliate, upon receipt of written demand by the Company, to pay
such monies to the Company to the extent of the Company s interest therein.
7. The Sales Representative shall be entitled to commissions with respect to
all sales the Sales Representative shall make in accordance with the Commission
Schedules issued from time to time by the Company and incorporated by reference
herein. Any commission will be paid by the Company to the Sales
Representative's District Manager, who will then pay the commission over to the
Sales Representative, unless the District Manager specifies in writing to the
Company that commissions shall be paid directly to the Sales Representative or
as otherwise required by law. All commissions are payable subject to receipt of
full payment for the securities sold and the Sales Representative hereby
expressly waives all rights to such earned commissions or other payments until
such time as the Company is in actual receipt of the concession due in respect
to such sale. Payments, if any, made to the Sales Representative or for the
Sales Representative's account in excess of commissions earned by the Sales
Representative in accordance with said Commission Schedules as amended or
supplemented shall be deemed advances against future commissions and the amount
of any such excess shall be refunded to the Company in the event of termination
of this Agreement, to the extent that such commissions have not been earned
prior to such termination. Any indebtedness from the Sales Representative to
the Company shall be a first lien upon any amount due the Sales Representative
hereunder.
8. If the Sales Representative's license with the National Association of
Securities Dealers, Inc. is terminated as a result of retirement, after
attaining the age of 55, or as a result of sustaining a total and permanent
disability, and if the Sales Representative agrees in the case of such
retirement or disability to the continuance of this Agreement and executes a
form agreeing not to solicit any new securities business or attempt to obtain
licensing with the National Association of Securities Dealers, Inc. through any
other entity, or if this Agreement is terminated as a result of the death of the
Sales Representative then, in any such case, the Company will continue to pay to
the Sales Representative, successors or assigns, all commissions totaling in
excess of $100 per annum, on business which was personally produced by the Sales
Representative, which would otherwise be due the Sales Representative under the
applicable Commissions Schedules, on all accounts which continue to be credited
to the Sales Representative as personal production pursuant to the New Customer
Account forms executed under this Agreement prior to such termination or death
and not resulting from any solicitation after termination for a period not to
exceed five (5) years from the date of such termination or death. All vested
payments as detailed above, shall relate solely to business of the Sales
Representative which remains credited to the Sales Representative pursuant to
New Customer Account forms executed prior to such termination or death and
which remain in force during the term of such vesting. The Company reserves
the right not to pay any commissions after termination if the Sales
Representative refuses to execute written acknowledgement of the continuance of
this Agreement or if the Company receives proof of further securities
solicitation or licensing with the National Association of Securities Dealers,
Inc. by the former Sales Representative.
If this Agreement is terminated for any reason other than death, retirement or
permanent and total disability, then no commissions or other compensation
shall be paid; provided, however, that if this Agreement is terminated for any
reason other than the National Association of Securities Dealers, Inc.
disqualification, then commissions will continue to be paid in accordance with
the Supplemental Commission Schedule (or any replacement thereof) on all premium
payments received by the Company on variable life insurance products.
The Company will not pay commissions to any Sales Representative who is
disqualified from association with any member of the National Association of
Securities Dealers, Inc. because of revocation, expulsion, suspension, or any
other reason, nor will the Company pay commissions in violation of any
applicable laws or regulations.
9. The Company will, each month, furnish to the Sales Representative a statement
of the Sales Representative's account showing all earnings and payments made to
his/her account and the balance due from the Company and the amount of any
indebtedness due from the Sales Representative to the Company. The Sales
Representative agrees to notify the Company, in writing, within 30 days, of any
discrepancy or disagreement with such statement in any respect, and in the
absence of such notice, the statement shall be conclusively presumed to be
correct unless the parties mutually agree to an adjustment in writing.
10. The Company may offset against any commissions or other monies accruing to
the account of the Sales Representative any debts, liabilities, or other
obligations of the Sales Representative due to the Company or any affiliate of
the Company. The Company may also in its sole discretion offset against any
commissions or other monies accruing to the account of the Sales Representative
any debts or liabilities of the Sales Representative due to his/her District
Manager.
11. Should the Sales Representative transfer to a new District Manager's agency,
any override commissions shall then be paid to the New District Manager. Should
<PAGE>
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 224-7741
CHUBB SECURITIES CORPORATION
COMMISSION SCHEDULE
This Commission Schedule is a part of the Sales Representative Agreement entered
into by the Sales Representative and the Company and is incorporated by
reference therein.
Commissions on sales made and actually paid for will be paid in accordance with
the Agreement and the following schedule:
1. Mutual Fund Cash Sales - 50% of dealer concession on sales of $20.00 or
more.
2. Variable or Fixed Annuity and Mutual Fund Contractual Sales - 50% of dealer
concession or commission on first year and subsequent payments on sales of
$20.00 or more.
3. Private Placements - 50% of dealer concession as received, for all staged-in
payments. For the purposes of computing commissions on private placements,
the Company shall retain one-third of any marketing or due diligence expense
allowance (or other terminology generally accepted to mean such a concept)
paid on a per unit basis in excess of 9%, and will pay commissions out of the
balance.
4. General Securities Sales of any other type - 50% of Dealer concession, as
received, after deduction of the Execution fee.
5. Public Limited Partnerships, Unit Investment Trusts - 50% of Dealer
concession.
6. Any other securities made available through the Company's facilities - in
accordance with Supplemental Commission Schedules.
This Commission Schedule rescinds and replaces all prior commission schedules
issued by the Company as of its effective date and will continue in effect until
such time as a new Schedule of Commissions may be established by the Company.
The effective date of this Commission Schedule is _______________, 19____.
<PAGE>
Chubb Securities Corporation
One Granite Place, PO Box 2005
Concord, New Hampshire 03302
(603) 224-7741
SUPPLEMENTAL SALES REPRESENTATIVE COMMISSION SCHEDULE
Non-Participating Flexible Premium Variable Life Insurance Policies
Issued by an Affiliated Life Insurance Company
This Supplemental Commission Schedule is a part of the Sales Representative's
Agreement entered into by the Sales Representative and Chubb Securities
Corporation (the Company) and is incorporated by reference therein.
Commissions on policies issued on applications personally written by the Sales
Representative will be paid on premiums received by the Company in accordance
with the Agreement and the following table:
<TABLE>
<CAPTION>
TYPE OF POLICY 1ST YEAR 2ND - 15TH YEAR
<S> <C> <C>
Ensemble (1)
Issue Ages 0-75 40% 2%
</TABLE>
<TABLE>
<CAPTION>
INITIAL SPECIFIED AMOUNT
$25,000 - $99,999 $100,000 AND OVER ALL SPECIFIED AMOUNTS
<S> <C> <C> <C>
Ensemble II (1)
Issue Ages 0-39 35% 40% 2%
Issue Ages 40-49 40% 45% 2%
Issue Ages 50-69 40% 45% 2%
Issue Ages 70-75 45% 50% 2%
</TABLE>
(1) First year rate based on premium
less than or equal to the appropriate
VOLCAP premium.
<TABLE>
<CAPTION>
INITIAL SPECIFIED AMOUNT
$25,000 - $99,999 $100,000 AND OVER ALL SPECIFIED AMOUNTS
<S> <C> <C> <C>
Excess 1ST year
premium
Ensemble II
(Single Pay) (2) 3.5% 4% 2%
</TABLE>
(2) A Single Premium sale is defined as when the premium received in year one
exceeds 75% of the DEFRA Guideline Single Premium as published in the rate
card.
The Schedule of VOLCAP premium is published by the underwriting life insurance
company as part of The Guide Line Premiums for Non-Participating Flexible
Premium Variable Life. Such Schedule is subject to change upon 30 days notice by
the underwriting life insurance company.
VESTINGS
I. Immediate Vesting
-----------------
Sales representative's commissions which accrue during the first five policy
years immediately will be vested.
<PAGE>
II. Lifetime Vesting
----------------
So long as 1) this contract is terminated after the sales representative's
sixty-fifth birthday and during the sales representative's lifetime, 2) this
contract will have been in force for three years, and 3) the contract is
terminated not for cause, commissions will be paid as they accrue to the Sales
Representative during his/her lifetime and to the Sales Representative's estate
for five years following the Sales Representative's death.
III. Vesting in the Event of Death
-----------------------------
The Company will pay to the Sales Representative's estate all commissions which
accrue during the five years following the Sales Representative's death.
IV. Vesting in the Event of Total and Permanent Disability
------------------------------------------------------
The Company will pay all commissions on business which accrues during the
Sales Representative's lifetime while total and permanent disability continues
and to the Sales Representative's estate which accrue during the five years
following the Sales Representative's death if such death occurs while the Sales
Representative is totally and permanently disabled. "Total and permanent
disability" means the complete inability of the Sales Representative for a
continuous period to six consecutive months to engage in any occupation for
which the Sales Representative is reasonably fitted by education, training, or
experience.
V. Minimum Payment Conditions
--------------------------
After termination of this contract, commissions will be paid whenever the total
amount due accrues to a minimum of $100. If the total commissions in any
calendar year following contract termination amount to less than $500, no
further commissions of any kind shall be paid.
EFFECTIVE DATE OF THIS SCHEDULE: December 1, 1989.
<PAGE>
Exhibit 1(c) (v)
SCHEDULE OF COMMISSIONS
<PAGE>
SCHEDULE OF SALES COMMISSIONS
-----------------------------
WRITING AGENTS
--------------
First year commissions to writing agents can range up to 50% of first year gross
premiums, and up to 2% of gross premiums for policy years two through fifteen.
No commissions are paid after the fifteenth policy year.
DISTRICT MANAGERS
-----------------
First year commissions, including bonuses, to district managers can range up to
35% of first year gross premiums, 17% of second year gross premiums, 12% of the
third through fifth year gross premiums, and 2% of the sixth through fifteenth
year gross premiums. No commissions or bonuses are paid after the fifteenth
policy year.
<PAGE>
Exhibit 1(e)
SPECIMEN POLICY WITH FORM OF RIDERS
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
INSURED: #ENSEMBLE II - TN
POLICY NUMBER: 6550001
The Volunteer State Life Insurance Company (A stock company, herein called the
Company), will pay the Death Benefit specified on page 6 to the Beneficiary on
receipt of due proof of the Insured's death, subject to the provisions of this
and the following pages, all of which are a part of this policy.
This is a Flexible Premium Variable Life Insurance Policy. The Specified Amount
may be increased or decreased by the Owner. Net Premiums will be allocated to
the General Account or to one or more divisions of Chubb/Volunteer Separate
Account A (herein called Separate Account A) as determined by the Owner.
THE POLICY'S ACCUMULATION VALUE IN EACH DIVISION OF SEPARATE ACCOUNT A IS BASED
ON THE INVESTMENT EXPERIENCE OF THAT DIVISION AND MAY INCREASE OR DECREASE
DAILY. THE ACCUMULATION VALUE IS NOT GUARANTEED AS TO DOLLAR AMOUNT.
The policy's accumulation value in the General Account will earn interest daily
at a minimum guaranteed effective rate of 4 1/2%. Interest in excess of the
guaranteed rate may be applied in the calculation of the accumulation value at
such increased rates as the Company may determine.
THE AMOUNT OF DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY VARY UNDER
THE CONDITIONS DESCRIBED ON PAGES 6 AND 7.
This policy is a legal contract between the Owner and The Volunteer State Life
Insurance Company.
READ YOUR POLICY CAREFULLY
RIGHT TO CANCEL - Please examine this policy carefully. The Owner may cancel
this policy by returning it to Volunteer or to the agent through whom it was
purchased within 10 days after the date the Owner receives the policy, within 45
days of the date of the execution of the application for insurance, or within 10
days after mailing or personal delivery of a Notice of the Right of Withdrawal,
whichever is later. If the policy is returned, it will be deemed void from the
beginning and any premium paid for it will be refunded within 7 days.
Executed for the Company at its Home Office in Chattanooga, Tennessee, as of the
policy date.
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
President Secretary
_____________________________________________
Registrar
Flexible Premium Variable Life Insurance Policy. Flexible Premiums Payable Until
the Maturity Date or Until Prior Death. Adjustable Death Benefit. Insurance
Payable at Death. Some Benefits Reflect Investment Results. Additional Benefits,
if any, as indicated on Page 3. Non-Participating. No Dividends.
<PAGE>
GUIDE TO POLICY PROVISIONS
<TABLE>
<CAPTION>
Page
<S> <C>
Administrative Charges....................................................... 3
Age at Issue................................................................. 3
Beneficiary.................................................................. 3
Death Benefit Option......................................................... 3
Death Benefit Provisions:
Death Benefit............................................................... 6
Changes in Existing Insurance
Coverage................................................................... 7
Change of Maturity Date..................................................... 7
General Provisions:
Contract.................................................................... 8
Ownership................................................................... 8
Incontestability............................................................ 8
Suicide..................................................................... 8
Misstatement of Age......................................................... 8
Beneficiary................................................................. 9
Assignment.................................................................. 9
Proceeds.................................................................... 9
Payment of Proceeds......................................................... 9
Postponement of Payments.................................................... 9
Age......................................................................... 10
Modification................................................................ 10
Policy Date................................................................. 10
Effective Date of Coverage.................................................. 10
Termination................................................................. 10
Maturity Date............................................................... 10
Annual Report............................................................... 10
Non-Participating........................................................... 10
Guaranteed Monthly Cost of
Insurance Rates............................................................ 4
Initial Specified Amount..................................................... 3
Insured...................................................................... 3
Nonforfeiture Values:
Accumulation Value.......................................................... 14
Cash Value.................................................................. 14
Surrender Charge............................................................ 14
Separate Account Accumulation
Values..................................................................... 1
Net Investment Factor....................................................... 15
<CAPTION>
Page
<S> <C>
Nonforfeiture Values (cont.):
General Account Accumulation
Value...................................................................... 15
General Account Interest Rate............................................... 15
Monthly Deduction........................................................... 16
Cost of Insurance........................................................... 16
Cost of Insurance Rates..................................................... 16
Insufficient Cash Value..................................................... 16
Continuation of Insurance................................................... 16
Surrender................................................................... 16
Withdrawal of Cash Value
(Withdrawal)............................................................... 17
Basis of Computations....................................................... 17
Illustration of Benefits and
Values..................................................................... 17
Owner........................................................................ 3
Policy Date.................................................................. 3
Policy Loans:
Policy Loans................................................................ 11
Policy Loan Interest........................................................ 11
Debt........................................................................ 11
Policy Loan Repayment....................................................... 11
Premium Provisions:
Premium Payments............................................................ 5
Planned Periodic Premiums................................................... 5
Net Premiums................................................................ 5
Allocation of Net Premiums.................................................. 5
Unscheduled Premiums........................................................ 5
Grace Period................................................................ 5
Reinstatement............................................................... 6
Separate Account Provisions:
Separate Account............................................................ 12
Divisions................................................................... 12
Transfers.................................................................12,13
Addition, Deletion, or
Substitution of Investments................................................ 13
Settlement Options.........................................................18,19
Right to Cancel.............................................................. 1
</TABLE>
A copy of the application will be found after page 18. Any other
benefit agreements will also be found after page 18.
Page 2
<PAGE>
PREMIUM PROVISIONS
Premium Payments - An initial premium is due and payable on the policy date.
The initial premium must be large enough, after the deduction of the premium
expense charge, to cover monthly deductions for at least three months. All
premiums are payable at the Home Office of the Company or to an authorized
agent of the Company in exchange for a receipt. This receipt must be signed
by an elected officer of the Company and countersigned by such agent. The
Company will not accept a premium payment less than $25.
Planned Periodic Premium and Premium Frequency - The Planned Periodic Premium
and Premium Frequency, as shown on page 3, are selected by the Owner. The
Planned Periodic Premium is the amount of premium the Owner intends to pay.
The Premium Frequency is how often the Owner intends to pay the Planned
Periodic Premium. Payment of the Planned Periodic Premium is at the option of
the Owner.
The Company will send Planned Periodic Premium payment reminder notices. If
the mode of premium payment is preauthorized check, government allotment or
payroll deduction, notice of any Planned Periodic Premium due will not be
sent.
Changes in Premium Frequency and increases or decreases in the Planned
Periodic Premium may be made by the Owner by providing written notification
to the Company. The Company reserves the right to limit the amount of any
increase.
Net Premium - The net premium is equal to the premium paid multiplied by 97.5%.
The deduction of 2.5% is a premium tax charge.
Allocation of Net Premiums - The Owner will determine the allocation of the net
premiums among the General Account and the divisions of Separate Account A.
The minimum percentage that may be allocated to any of these accounts is 10%.
Unscheduled Premiums - Premium payments in addition to the Planned Periodic
Premium may be made at any time prior to the Maturity Date. The Company
reserves the right to limit the number and amount of additional premium
payments.
If there is an existing policy loan, premium payments in the amount of the
Planned Periodic Premium, received at the Premium Frequency, will be applied
as premium. Premium payments in excess of the Planned Periodic Premium or
premium payments received other than at the Premium Frequency, will first be
applied as policy loan repayments, then as premium when the policy loan is
repaid.
Grace Period - The Company will allow a grace period of 61 days. Such grace
period will begin on the day that the Company sends notice to the Owner and
to the assignee, if any, that the cash value less any policy debt on a
Monthly Anniversary Day is not enough to cover the monthly deduction for the
month following such Monthly Anniversary Day. The cash value and monthly
deduction are defined in the Nonforfeiture Provisions section.
The policy will terminate without value at the end of the grace period unless
a premium large enough, after the deduction of the premium expense charge, to
cover monthly deductions for at least three months is paid by the end of the
grace period.
If the Insured dies during the grace period, the Company will deduct any
overdue monthly deduction, which is applicable to the grace period, from the
proceeds of the policy.
8602 Page 5
<PAGE>
Reinstatement - If this policy terminates as provided in the Grace Period
provision, it may be reinstated by the Owner at any time within five years
after the date of termination. Reinstatement must occur before the maturity
date. Reinstatement is subject to the following requirements:
(1) Receipt of satisfactory evidence of insurability by the Company.
(2) Payment of a premium large enough, after the deduction of the premium
expense charge, to cover:
(a) Monthly deductions for at least three policy months following the
effective date of reinstatement.
(b) Any due and unpaid monthly administrative charges.
(3) Payment or reinstatement of any debt against the policy which existed on
the date of termination.
The effective date of a reinstated policy shall be the date the Company
approves the application for reinstatement. Prior to receipt of the required
premium for reinstatement, the accumulation value of the policy on the date
of reinstatement shall be the accumulation value on the date of termination.
The surrender factor in effect on reinstatement shall be as defined in the
Surrender Charge section.
DEATH BENEFIT PROVISIONS
Death Benefit - The death benefit provided by this policy depends on the Death
Benefit Option in effect on the date of death. The Death Benefit Option for
this policy is shown on page 3.
Option I - Under Option I, the death benefit shall be the greater of:
(1) The Specified Amount, or
(2) The accumulation value on the date of death multiplied by the corridor
percentage.
Option II - Under Option II, the death benefit shall be equal to the
Specified Amount plus the accumulation value on the date of death. However,
the death benefit can never be less than the accumulation value on the date
of death multiplied by the corridor percentage.
The corridor percentage depends on the attained age of the Insured on the
date of death.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Attained Corridor Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage Age Percentage
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
40 & below 250% 52 171% 64 122% 91 104%
41 243 53 164 65 120 92 103
42 236 54 157 66 119 93 102
43 229 55 150 67 118 94 101
44 222 56 146 68 117 95 100
45 215 57 142 69 116
46 209 58 138 70 115
47 203 59 134 71 113
48 197 60 130 72 111
49 191 61 128 73 109
50 185 62 126 74 107
51 178 63 124 75-90 105
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
8602 Page 6
<PAGE>
Changes in Existing Coverage - The Initial Specified Amount is shown on page 3.
At any time after the first policy anniversary, the Owner may, by written
request, increase or decrease the Specified Amount. Any change is subject to
the following conditions:
(1) Any decrease will become effective on the Monthly Anniversary Day that
coincides with or next follows receipt of the request. Any such decrease
will be deducted in the following order:
(a) From the most recent Specified Amount increase, if any;
(b) Successively from the next most recent Specified Amount increase, if
any;
(c) From the Initial Specified Amount.
(2) Any request for an increase must be applied for on a supplemental
application and shall be subject to evidence of insurability satisfactory
to the Company. The minimum increase in Specified Amount is $25,000.
(3) Any change approved by the Company will become effective on the effective
date shown in the Supplemental Policy Specifications page, subject to
deduction of the first month's cost of insurance therefor from the
accumulation value of this policy.
(4) The Owner may request in writing to change the Death Benefit Option. If
the request is to change from Option I to Option II, the Specified Amount
will be decreased by the amount of the accumulation value. Evidence of
insurability satisfactory to the Company will be required on a change
from Option I to Option II. If the request is to change from Option II
to Option I, the Specified Amount will be increased by the amount of the
accumulation value. The effective date of either change shall be the
Monthly Anniversary Day that coincides with or next follows the day the
request for change is received.
(5) The minimum decrease in Specified Amount, by the Owner, is $25,000. No
such decrease may reduce the Specified Amount below $100,000.
Change of Maturity Date - The Maturity Date may be changed, upon written request
by the Owner. The new Maturity Date may be any policy anniversary after the
end of the tenth policy year and before the policy anniversary nearest the
Insured's 95th birthday. However, the new Maturity Date must be at least
twelve months from the date the Company receives a written request therefor
from the Owner.
8603 Page 7
<PAGE>
GENERAL PROVISIONS
The Contract - This contract is made in consideration of the application and the
payment of an initial premium sufficient to keep this policy in force for at
least two months. A copy of the application is attached as a part of this
policy. The entire contract consists of this policy and the application (and
any supplemental applications for additional Specified Amounts). In the
absence of fraud, all statements in an application shall be deemed
representations and not warranties. No statement shall be used to avoid this
policy or to defend against a claim unless it is contained in the application
or in a supplemental application, and a copy of such application is attached
to the policy when issued or made a part of the policy when changes in the
Specified Amount become effective.
Ownership of Policy - The Insured shall be the Owner of the policy unless stated
otherwise in the contract or changed at a later date. During the lifetime of
the Insured all rights under this policy will be exercised by the Owner if
the Owner has reserved the right to change the beneficiary. The Owner may
name a new Owner or name a Contingent Owner. The Owner may change a
Contingent Owner. If the Owner does not survive the Insured, the Contingent
Owner will, if living, become the Owner. Upon proper written notice of the
Owner any prior revocable designation of a Contingent Owner or beneficiary
will be voided. Unless otherwise stated, all rights under this policy are
vested in the Owner or in the Owner's assigns.
Incontestability - The Company will not contest this policy, except for any
increase in the Specified Amount, after it has been in force during the
lifetime of the Insured for a period of two years from its policy date. This
provision does not apply to any benefits provided by a rider which grants
disability benefits or an added benefit in the event death results from an
accident. Any increase in the Specified Amount will not be contested after
such increase has been in force during the lifetime of the Insured for two
years following the effective date of such increase. Any increase will be
contestable, within the two year period, only with regard to statements
concerning the increase.
Suicide - This policy does not cover the risk of suicide within two years from
the policy date, whether the Insured is sane or insane. In such event, the
only liability of the Company will be a refund of premiums paid without
interest less any policy loan and less any partial surrender.
This policy does not cover the risk of suicide, whether sane or insane,
within two years from the effective date of any increase in the Specified
Amount with respect to such increase. In such event, the only liability of
the Company will be a refund of the cost of insurance for such increase.
Misstatement of Age or Sex- If the age or sex of the Insured has been misstated,
the amount payable under this policy by reason of the death of the Insured
shall be equal to the sum of the following:
(1) The accumulation value on the date of death, less any debt.
(2) The death benefit, less the accumulation value on the date of death,
multiplied by the ratio of (a) the cost of insurance actually deducted at
the beginning of the policy month in which death occurs, to (b) the cost
of insurance that should have been deducted at the Insured's true age or
sex.
8603 Page 8
<PAGE>
Beneficiary - At any time prior to the death of the Insured, the Owner may name
or change a revocable beneficiary. If no beneficiary has been named, the
Owner will be the beneficiary. A change of the Owner or beneficiary must be
made in writing. To be binding on the Company, the change must be signed by
the Owner and any irrevocable beneficiary and must be filed at the Home
Office. Any such change shall take effect as of the date it was signed,
subject to any payment made or other action taken by the Company before the
change was filed. Unless otherwise provided, the proceeds to be paid at the
death of the Insured shall be paid in equal shares to those named benefici-
aries who survive the Insured. Payment will be made in the following order:
(1) the primary beneficiaries, (2) any secondary beneficiaries, if no primary
beneficiary survives the Insured, (3) any tertiary beneficiaries, if no
primary or secondary beneficiary survives the Insured, (4) Owner, (5) the
executors, administrators, or assigns of the Owner, if no named beneficiary
survives the Insured. The terms "children" or "lawful children" of a person,
when used to name beneficiaries, shall include only lawful children born to
or legally adopted by that person.
Assignment - No assignment of this policy will be binding upon the Company until
it has been filed at its Home Office. Each assignment will be subject to any
payments made or action taken by the Company before it was filed. The
Company will not be responsible for any assignment being valid or sufficient.
Proceeds - Proceeds means the amount payable on the maturity date, on the
surrender of this policy before the maturity date or upon the death of the
Insured.
The proceeds payable on the death of the Insured shall be the death benefit,
less any debt. If the policy is surrendered, the proceeds shall be the cash
value, less any debt. On the maturity date the proceeds shall be the cash
value, less any debt. The proceeds are subject to the adjustment provided in
the Misstatement of Age, Incontestability and Suicide provisions of this
policy.
Payment of Proceeds - Unless an optional mode of settlement is elected, the
proceeds payable on the death of the Insured shall be paid in one sum to the
beneficiary.
Unless an optional mode of settlement is elected, any proceeds payable on the
maturity date or upon surrender of this policy shall be paid in one sum to
the Owner.
Postponement of Payments - The Company will usually pay any amounts payable on
surrender, withdrawal, or policy loan allocated to Separate Account A within
seven days after written notice is received. The Company will usually pay
any death benefit proceeds within seven days after the Company receives due
proof of death. Payment of any amount payable on surrender, withdrawal,
policy loan, or death may be postponed whenever:
(1) The New York Stock Exchange is closed other than customary week-end and
holiday closings, or trading on the New York Stock Exchange is restricted
as determined by the Securities and Exchange Commission;
(2) The Securities and Exchange Commission, by order, permits postponement
for the protection of policyowners; or
(3) An emergency exists as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
the net assets of Separate Account A.
Transfers may also be postponed under these circumstances.
The Company may defer the portion of any transfer, amount payable on
surrender, withdrawal or policy loan from the General Account for not more
than six months. However, no payment from the General Account to pay premiums
on policies with the Company will be deferred.
8604 Page 9
<PAGE>
Age - Age of the Insured, as used herein, refers to the age nearest birthday on
the policy date. Attained age of the Insured means the age nearest birthday
on the last policy anniversary.
Modification - Only an elected officer of the Company can, on behalf of the
Company, change or modify this policy or waive any of the Company's rights or
requirements. Any such changes must be made in writing.
Policy Date - The date shown on page 3, which is the date requested by the Owner
or the later of the date of application or the date of any required medical
examination. The policy date is the date from which policy years, policy
months, and policy anniversaries will be determined.
Effective Date of Coverage - The effective date of coverage under this policy
shall be as follows:
(1) For all coverage provided in the original application, the effective date
shall be the policy date.
(2) For any increase or addition to coverage, the effective date shall be the
date shown on the Supplemental Policy Specifications page. The effective
date for such coverage shall begin on the policy Monthly Anniversary Day
that coincides with or next follows the date the application for the
increase or addition is approved by the Company.
Termination - All coverage under this policy shall terminate when any one of the
following events occurs:
(1) The Owner requests that coverage terminate. (Such request will require
a surrender of this policy.)
(2) The Insured dies.
(3) The policy matures.
(4) The grace period ends.
Maturity Date - Unless otherwise specified, the maturity date will be the policy
anniversary nearest the Insured's 95th birthday. Coverage may expire before
the maturity date if no premiums are paid after the initial premium or future
premiums are not enough to continue coverage to such date.
Annual Report - Each year a report will be sent to the Owner which shows the
current cash value, premiums paid and all charges since the last report, and
outstanding policy loans.
Non-Participating - This policy does not share in any surplus distribution of
the Company. No dividends are payable.
Specified Amount - The face amount of the policy, which is the minimum death
benefit payable under the policy.
8604 Page 10
<PAGE>
POLICY LOANS
Policy Loans - After the first policy anniversary, a loan will be granted upon
the sole security and assignment of this policy to the Company. The maximum
loan amount is 90% of the cash value on the date of the loan. Any prior
debts to the Company against this policy will be deducted from the amount
advanced under the loan. Any outstanding debt will be deducted from the
proceeds payable at the Insured's death, on maturity, or on surrender.
The Owner may allocate the policy loan among the General Account and the
divisions of Separate Account A. If the Owner does not specify the
allocation, then the policy loan will be allocated among the General Account
and the divisions of Separate Account A in the same proportion that the
accumulation value in the General Account, less any debt, and the
accumulation value in each division bears to the total accumulation value of
the policy, less any debt, on the date of the policy loan. Accumulation value
in each division equal to the policy loan allocated to each division will be
transferred to the General Account and reduce the accumulation value in that
division. If loan interest is not paid when due, an amount of accumulation
value equal to the loan interest will also be transferred.
If the policy debt exceeds the policy's accumulation value in the General
Account, the Company will transfer accumulation value equal to the excess
debt from the divisions of Separate Account A to the General Account as
security for the excess debt. The amount transferred will be allocated among
the divisions in the same proportion that the accumulation value in each
division bears to the policy's total accumulation value in all divisions of
Separate Account A.
Policy Loan Interest - Interest on policy loans is payable at the effective rate
of 8%, or at any lower rate established by the Company for any period during
which the loan is outstanding. Loan interest accrues on a daily basis from
the date of the loan and is payable at the end of each policy year. Loan
interest unpaid on a policy anniversary becomes loan principal.
The Company shall provide at least 30 days written notice to the Owner (or
any other party designated by the Owner to receive notice under this policy)
and any assignee recorded at the Home Office of any increase in the interest
rate on loans outstanding 40 or more days prior to the effective date of the
increase. As to loans made during the 40 days before the effective date of
the policy loan interest rate increase, the Company shall notify the Owner
and any assignee at the time the loan is made.
The effective date of any increase in such interest rate shall not be less
than one year after the effective date of the establishment of the previous
rate. If the interest rate is increased, the amount of such increase shall
not exceed one percent per year.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. Interest unpaid on a policy anniversary becomes loan principal.
Debt - As used in this policy, debt means the principal of any loan outstanding
against this policy, plus any accrued loan interest.
If the policy debt exceeds the cash value, the Company will send a notice by
mail to the Owner and to the assignee, if any, at their addresses last
reported to the Company. If the excess is not paid within 61 days from the
date the notice is mailed, the policy will terminate without value.
Policy Loan Repayment - Any debt may be repaid, in whole or in part, at any time
while this policy is in force. When a loan repayment is made, accumulation
value securing the debt in the General Account equal to the loan repayment
will be allocated among the General Account and divisions of Separate
Account A using the same percentages used to allocate net premiums.
8605 Page 11
<PAGE>
SEPARATE ACCOUNT PROVISIONS
Separate Account - The variable benefits under this policy are provided through
investments in Separate Account A. The Company established Separate Account
A as a separate investment account to support variable life insurance
contracts. The Company will not allocate assets to Separate Account A to
support the operation of any contracts or policies that are not variable life
insurance.
The assets of Separate Account A are owned by the Company. However, these
assets are not part of the Company's General Account. Income, gains and
losses, whether or not realized, from assets allocated to Separate Account A
will be credited to or charged against the account without regard to the
Company's other income, gains or losses.
Assets equal to the reserves and other liabilities of Separate Account A will
not be charged with liabilities that arise from any other business the
Company may conduct. The Company shall have the right to transfer to its
General Account any assets of Separate Account A which are in excess of such
reserves and other policy liabilities.
Separate Account A is registered with the Securities and Exchange Commission
as a unit investment trust under the Investment Company Act of 1940. Separate
Account A is also subject to the laws of the State of Tennessee which
regulate the operations of insurance companies incorporated in Tennessee. The
investment policy of Separate Account A will not be changed without the
approval of the Insurance Commissioner of the State of Tennessee. The
approval process is on file with the Insurance Commissioner of the state in
which this policy was delivered.
Divisions - Separate Account A has several divisions. Each division will buy
shares of a separate series of Chubb America Fund, Inc. Each series
represents a separate investment portfolio of Chubb America Fund, Inc. All
divisions of Separate Account A are shown on page 3. The Owner will determine
the percentage of net premiums which will be allocated to each division.
Income, gains and losses, whether or not realized, from the assets of each
division of Separate Account A are credited to or charged against that
division without regard to income, gains or losses in other divisions of
Separate Account A or in the General Account.
The Company will value the assets of each division of Separate Account A at
the end of each valuation period. A valuation period is the period between
two successive valuation dates. A valuation date is each day that the New
York Stock Exchange is open for business or any other day in which there is
material change in the value of the assets in Separate Account A.
Transfers - The Owner may transfer amounts between the General Account and the
divisions of Separate Account A or among the divisions of Separate Account A
by sending a written request to the Company. The total amount transferred
must be at least $250. No amounts under $250 may be transferred out of any
division of Separate Account A or the General Account unless such lesser
amount constitutes the entire balance. A transfer charge equal to the lesser
of $25 or 10% of the amount transferred will be imposed each time amounts are
transferred, except with respect to policy loans. The transfer charge will be
deducted from the amount that is transferred. The Company will make transfers
so that the accumulation value on the date of transfer will not be affected
by the transfer except to the extent of the transfer charge. The Company may
revoke or modify the transfer privilege at any time, including the minimum
amount transferable and the transfer charge.
8605 Page 12
<PAGE>
As long as any portion of the policy's accumulation value is allocated to a
division of Separate Account A, the policy's accumulation value and cash
value will reflect the investment performance of the chosen division(s) of
Separate Account A. The death benefit may also reflect the performance of the
chosen division(s) of Separate Account A.
At any time, the Owner may transfer 100% of the policy's accumulation value
to the General Account. While 100% of the policy's accumulation value is
allocated to the General Account, minimum benefits for the policy will be
fixed and guaranteed.
No transfer charge will be imposed for a transfer of all accumulation value
in Separate Account A to the General Account. However, any transfer from the
General Account to the division(s) of Separate Account A will be subject to
the transfer charge.
Addition, Deletion, or Substitution of Investments - The Company reserves the
right, subject to compliance with applicable law, to make additions to,
deletions from, or substitutions for the shares of a series that are held by
Separate Account A or that Separate Account A may purchase. The Company
reserves the right to eliminate the shares of any of the series of Chubb
America Fund, Inc. and to substitute shares of another series of Chubb
America Fund, Inc. or of another open-end, registered investment company, if
the shares or series are no longer available for investment or if in the
Company's judgement, further investment in any eligible series should become
inappropriate in view of the purposes of the policy. The Company will not
substitute any shares attributable to the Owner's interest in a division of
Separate Account A without notice to the Owner and prior approval of the
Securities and Exchange Commission, to the extent required by the Investment
Company Act of 1940. This shall not prevent Separate Account A from
purchasing other securities for other series or classes of policies, or from
permitting conversion between series or classes of policies or contracts on
the basis of requests made by owners.
The Company reserves the right to establish additional divisions of Separate
Account A, each of which would invest in a new series of Chubb America Fund,
Inc. or in shares of another open-end investment company. The Company also
reserves the right to eliminate existing divisions of Separate Account A.
If the Company considers it to be in the best interest of persons having
voting privileges under the policies, Separate Account A may be operated as a
management company under the Investment Company Act of 1940; or it may be
deregistered under that Act in the event registration is no longer required
or it may be combined with other separate accounts.
8606 Ed. 3-87 Page 13
<PAGE>
NONFORFEITURE VALUES
Accumulation Value - The accumulation value of the policy is equal to the total
of the policy's accumulation value in the General Account and the policy's
accumulation value in divisions of Separate Account A.
Cash Value - The cash value is equal to the accumulation value less a surrender
charge.
Surrender Charge - The surrender charge for the Initial Specified Amount is
calculated by multiplying the surrender factor (shown below) by the lesser of
(1) or (2), where:
(1) is the total premiums paid in the first policy year;
(2) is the Maximum Surrender Premium for the issue age, as shown in the
table on page 3A, multiplied by the Initial Specified Amount.
The surrender factor will vary by policy year according to the following
table:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Policy Year 1-5 6 7 8 9 10 11 and later
Surrender Factor .30 .25 .20 .15 .10 .05 0
</TABLE>
An additional surrender charge will be assessed for any increase in the
Specified Amount. The additional charge is calculated by multiplying the
surrender factor (shown below) by the lesser of (1) or (2), where:
(1) is (a) times (b) divided by (c), where:
(a) is the increase in the Specified Amount;
(b) is the sum of the cash value just prior to the increase in the
Specified Amount and the total premiums received in the twelve months
just following the increase in the Specified Amount;
(c) is the Specified Amount after the increase in the Specified Amount;
(2) is the Maximum Surrender Premium for the attained age of the Insured on
the effective date of the increase in the Specified Amount, as shown on
page 3A, multiplied by the increase in the Specified Amount.
The surrender factor is based on how long the increase has been in effect
according to the following table:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Increase Year 1-5 6 7 8 9 10 11 and later
Surrender Factor .15 .125 .10 .075 .05 .025 0
</TABLE>
The surrender charge in effect at any time is the sum of the surrender charge
for the Initial Specified Amount plus the additional surrender charge for any
increase in the Specified Amount. If the Specified Amount is decreased, the
surrender charge will not decrease.
Separate Account Accumulation Values - The accumulation value in each division
on the policy date is equal to the portion of the net premium which has been
paid and allocated to that division, less the portion of the first monthly
deduction allocated to the policy's accumulation value in that division.
At the end of each valuation period after the policy date, the policy's
accumulation value in a division is equal to (1) plus (2) plus (3) minus (4)
minus (5) where:
(1) is the accumulation value in the division on the preceding valuation date
multiplied by the Net Investment Factor for the current valuation period.
(2) is any net premium received during the current valuation period which is
allocated to the division.
(3) is all accumulation values transferred to the division from another
division or the General Account during the current valuation period.
(4) is all accumulation values transferred from the division to another
division or the General Account and accumulation values transferred to
secure a policy debt during the current valuation period.
(5) is all withdrawals from the division during the current valuation period.
In addition, whenever a valuation period includes the Monthly Anniversary
Day, the accumulation value at the end of such period is reduced by the
portion of the monthly deduction allocated to the division.
8606 Ed. 3-87 Page 14
<PAGE>
Net Investment Factor - The Net Investment Factor measures the investment
performance of a division during a valuation period. The Net Investment
Factor for each division for a valuation period is calculated as (a) divided
by (b), minus (c) where:
(a) is (1) the value of the assets in the division at the end of the
preceding valuation period, plus (2) the investment income and capital
gains, realized or unrealized, credited to the assets in the valuation
period for which the net investment factor is being determined, minus
(3) the capital losses, realized or unrealized, charged against those
assets during the valuation period, minus (4) any amount charged against
each division for taxes, or any amount the Company sets aside during the
valuation period as a reserve for taxes attributable to the operation or
maintenance of each division.
(b) is the value of the assets in the division at the end of the preceding
valuation period.
(c) is a charge not to exceed .0024657% for each day in the valuation period.
This corresponds to .9% per year for mortality and expense risks.
General Account Accumulation Value - The accumulation value in the General
Account on the policy date is equal to the portion of the net premium which
has been paid and allocated to the General Account, less the portion of the
first monthly deduction allocated to the General Account.
On each Monthly Anniversary Day, the accumulation value in the General
Account is equal to (1) plus (2) plus (3) plus (4) minus (5) minus (6) minus
(7) where:
(1) is the accumulation value in the General Account on the preceding Monthly
Anniversary Day.
(2) is one month's interest on item (1).
(3) is any net premium received since the preceding Monthly Anniversary Day
plus interest from the date the net premium is received to the Monthly
Anniversary Day.
(4) is the sum of all accumulation values transferred to the General Account
division of Separate Account A since the preceding Monthly Anniversary
Day and interest from the date the accumulation value is transferred to
the Monthly Anniversary Day.
(5) is the sum of all accumulation values transferred from the General
Account to a division of Separate Account A since the preceding Monthly
Anniversary Day and interest from the date the accumulation value is
transferred to the Monthly Anniversary Day.
(6) is all withdrawals from the General Account since the preceding Monthly
Anniversary Day plus interest from the date of the withdrawal to the
Monthly Anniversary Day.
(7) is the portion of the monthly deduction allocated to the accumulation
value in the General Account, to cover the policy month following the
Monthly Anniversary Day.
On any date other than a Monthly Anniversary Day, the accumulation value will
be calculated on a consistent basis.
General Account Interest Rate - The policy's accumulation value in the General
Account will earn interest daily at a minimum guaranteed effective rate of
4 1/2%. Interest in excess of the guaranteed rate may be applied in the
calculation of the accumulation value at such increased rates as the Company
may determine. The policy's accumulation value held in the General Account
for policy loan collateral will earn interest daily at the lesser of an
effective rate of 6% or the interest rate currently credited.
8607 Page 15
<PAGE>
Monthly Deduction - The monthly deduction for a policy month shall be equal to
(1) plus (2), where:
(1) is the cost of insurance (as described below) and the cost of additional
benefits provided by rider for the policy month.
(2) is a monthly administrative charge. This charge is equal to $6.00 per
month in each policy year.
The monthly deduction for a policy month will be allocated among the General
Account and the divisions of Separate Account A in the same proportion that
the accumulation value in the General Account less any debt and the
accumulation value in each division bears to the total accumulation value of
the policy, less any debt, at the beginning of the policy month.
Cost of Insurance - The cost of insurance for the Insured is determined on a
monthly basis. The cost of insurance is determined separately for the Initial
Specified Amount and each subsequent increase in Specified Amount. The cost
of insurance is calculated as (1), multiplied by the result of (2) minus (3),
where:
(1) is the cost of insurance rate as described in the Cost of Insurance Rates
provision.
(2) is the death benefit at the beginning of the policy month, divided by
1.0036748.
(3) is the accumulation value at the beginning of the policy month, prior to
the monthly deduction for the cost of insurance.
If the Death Benefit Option is Option I and there have been increases in the
Specified Amount then the accumulation value shall be first considered a part
of the Initial Specified Amount. If the accumulation value exceeds the
Initial Specified Amount, it shall then be considered a part of the
additional Specified Amounts resulting from increases in the order of such
increases.
Cost of Insurance Rates - The monthly cost of insurance rate is based on the
sex, issue age, policy year, and rating class of the Insured. Monthly cost of
insurance rates will be determined by the Company based upon expectations as
to future mortality experience. Any change in cost of insurance rates will
apply to all individuals of the same class as the Insured. The rating class
will be determined separately for the Initial Specified Amount and for any
increase in Specified Amount that requires evidence of insurability. However,
the cost of insurance rates can never be greater than those shown in the
Table of Monthly Guaranteed Cost of Insurance Rates. Such guaranteed maximum
rates are based on the Commissioners 1980 Standard Ordinary Mortality Table.
Insufficient Cash Value - If the cash value less any debt on a Monthly
Anniversary Day is insufficient to cover the monthly deduction for the month
following such Monthly Anniversary Day, the policy shall terminate as
provided in the Grace Period provision.
Continuation of Insurance - In the event Planned Periodic Premium payments are
not continued, insurance coverage under this policy and any benefits provided
by rider will be continued until the cash value, less any debt, is
insufficient to cover the monthly deduction, as provided in the Grace Period
provision. This provision shall not continue the policy beyond the Maturity
Date nor continue any rider beyond the date for its termination, as provided
in the rider. If the cash value is sufficient to continue this policy to the
Maturity Date, then any remaining cash value will be paid to the Owner if the
Insured is then living.
Surrender - Upon written request the Owner may surrender this policy at any time
during the lifetime of the Insured and before the Maturity Date. The amount
payable on surrender of this policy shall be the cash value on the date the
Company receives the request for surrender, less any debt.
8607 Page 16
<PAGE>
Withdrawal of Cash Value (Withdrawal) - Upon written request the Owner may make
a withdrawal from this policy. Any withdrawal is subject to the following
conditions:
(1) The amount withdrawn may not exceed the cash value less any outstanding
debt.
(2) The minimum amount that may be withdrawn is $750.
(3) A charge equal to the lesser of $25 or 2% of the amount of the withdrawal
will be deducted from the amount of each withdrawal.
(4) The accumulation value will be reduced by the sum of the withdrawal and a
pro-rata portion of the surrender charge in effect on the date of the
withdrawal. The remaining accumulation value and schedule of surrender
charges will be determined by multiplying each of these values by a
numerical factor. This numerical factor is equal to
1 - Amount of Withdrawal
[ -------------------------------------- ]
Cash Value Immediately Before Withdrawal
(5) The Death Benefit will be reduced by an amount equal to the reduction in
the accumulation value. This will result in a reduction of the Specified
Amount if the Death Benefit is Option I by an amount equal to the
reduction in the accumulation value. The Specified Amount remaining in
force after any withdrawal must be at least $10,000.
The Owner may allocate the withdrawal among the General Account and the
divisions of Separate Account A. If the Owner does not specify the
allocation, then the withdrawal will be allocated among the General Account
and the divisions of Separate Account A in the same proportion that the
accumulation value in the General Account, less any debt, and the
accumulation value in each division bears to the total accumulation value of
the policy, less any debt, on the date of the withdrawal.
Basis of Computations - Minimum cash values and reserves in the General Account
are based on the Commissioners 1980 Standard Ordinary Mortality Table with
interest at 4 1/2% per year.
The method used in computing cash values and reserves in Separate Account A
is in accordance with actuarial procedures that recognize the variable nature
of Separate Account A. The method used is such that if the Net Investment
Factor, less one, for all divisions of Separate Account A, at all times from
the policy date, is equal to an effective annual interest rate of 4 1/2%,
then the cash values and reserves in Separate Account A will be at least
equal to the minimum cash values and reserves, which would have been required
by the law of the state in which this policy is delivered, of an equivalent
policy in which all net premiums have been allocated to the General Account.
All values under this policy are not less than the values required by the
state in which this policy was delivered. A detailed statement of the method
of computation of cash values under this policy has been filed with the
insurance department of the state in which this policy was delivered.
Illustration of Benefits and Values - The Company will provide illustrations of
death benefits and cash values at any time after the policy date upon written
request by the Owner and payment of a nominal fee. The fee payable will be
the one then in effect for this service; however, such fee can never exceed
$25. This illustration will be based on the existing cash value at the time
of request and maximum cost of insurance rates. Additional illustrations
will be made based on the existing cash value and current mortality
assumptions.
8608 Page 17
<PAGE>
SETTLEMENT OPTIONS
Election of an Option - Any proceeds to be paid under this policy may be paid as
an income under any one of the options stated below. The election of an
option or change of prior election must be made in writing to the Company at
its Home Office. If an option is not chosen by the Owner prior to the death
of the Insured, the primary beneficiary may make such election.
Unless the Company agrees otherwise, any such payments will be made only to a
natural person taking in his own right. An option may be elected only if the
amount of the proceeds is $2,000 or more. The Company may change the interval
of payments to 3, 6 or 12 months, if necessary to increase the guaranteed
payments to at least $20.00 each.
Option A - Installments of a Specified Amount - Payments of an agreed amount to
be made each month until the proceeds and interest are exhausted.
Option B - Installments for a Specified Period - Payments to be made each month
for an agreed number of years.
Option C - Life Income-Payments to be made each month for the lifetime of the
payee. It is guaranteed that payments will be made for a minimum of 10, 15,
or 20 years as agreed upon.
Option D - Interest - Payment of interest on the proceeds held by the Company.
The amount of interest payment is calculated at the compound rate of 3% per
year. Interest payments will be made in 12-, 6-, 3-, or 1-month intervals as
agreed upon.
Supplementary Contract - When the proceeds of this policy become payable, a
supplementary contract setting forth the terms of the option chosen will be
issued to the payee. The first payment under Option A, B, or C shall be
payable on the effective date of such option. The first payment under
Option D shall be payable at the end of the first agreed payment interval.
Interest - The interest rate for Options A, B, and D will not be less than 3%
per year. The interest rate for Option C will not be less than 2 1/2% per
year. Interest in addition to that stated may be paid or credited from time
to time under any option but only at the sole discretion of the Company.
Withdrawal Value - Unless otherwise stated in the election of an option, the
payee shall have the right to receive the withdrawal value under that option.
For Options A and D the withdrawal value shall be any unpaid balance of
proceeds plus accrued interest.
For Option B the withdrawal value shall be the commuted value of the
remaining payments. Such value will be calculated on the same basis as the
original payments.
For Option C the withdrawal value shall be the commuted value of the
remaining payments. Such value will be calculated on the same basis as the
original payments. To receive this value, the payee must submit evidence of
insurability. Such evidence must be satisfactory to the Company. Otherwise,
the withdrawal value shall be the commuted value of any remaining guaranteed
payments. In this event the payments will be resumed at the end of the
guaranteed period if the payee should be alive on that date. The payments
will then continue for the lifetime of the payee.
Under any of these options, the payee shall have the right to receive the
withdrawal value in partial amounts. However, the partial amounts shall not
be less than the smaller of the withdrawal value or $100.
Death of Payee - If the payee dies before the proceeds are exhausted or the
prescribed payments made, a final payment will be made in one sum to the
estate of the last surviving payee. The amount to be paid will be calculated
as described for the applicable option in the Withdrawal Value Provision.
Limitation on Rights of Payee and Claims of Creditors - Neither the amount
retained under an option nor any payment made under an option can be assigned
or pledged. To the extent permitted by law such amounts or payments shall
not be subject to claims of creditors or legal process.
8608 Page 18
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
GENERAL REVISIONS
RIDER
The Volunteer State Life Insurance Company issues this Rider as a part of the
policy to which it is attached. This Rider is issued in consideration of the
application and the payment of the initial premium for the policy. There is
no premium charge for this Rider. The following sections of the policy are
changed:
(1) The last sentence in sub-paragraph 5 under Changes in Existing Coverage
on Page 7 is changed to "No such decrease may reduce the Specified Amount
below $25,000.00."
(2) The following sub-paragraph under Changes in Existing Coverage on Page 7
is added:
(6) The Specified Amount cannot be increased at any time after the
Insured reaches the age of 85.
(3) The entire section Policy Loans on Page 11 is replaced by the
following section:
Policy Loans - After the first policy anniversary, a loan will be granted upon
the sole security and assignment of this policy to the Company. The maximum
loan amount is 90% of the cash value on the date of the loan less any debt.
Cash value is defined under Nonforfeiture Values on Page 14. Any debt will
be deducted from the proceeds payable at the Insured's death, on maturity, or
on surrender.
The Owner may allocate the policy loan among the General Account and the
divisions of Separate Account A. If the Owner does not specify the
allocation, then the policy loan will be allocated among the General Account
and the divisions of Separate Account A in the same proportion that the
accumulation value in the General Account, less any debt, and the
accumulation value in each division bears to the total accumulation value of
the policy, less any debt, on the date of the policy loan. Accumulation value
in each division equal to the policy loan allocated to each division will be
transferred to the General Account and reduce the accumulation value in that
division. If loan interest is not paid when due, an amount of accumulation
value equal to the loan interest will also be transferred.
If the policy debt exceeds the policy's accumulation value in the General
Account, the Company will transfer accumulation value equal to the excess
debt from the divisions of Separate Account A to the General Account as
security for the excess debt. The amount transferred will be allocated among
the divisions in the same proportion that the accumulation value in each
division bears to the policy's total accumulation value in all divisions of
Separate Account A.
GENERAL REVISIONS RIDER
Form R87-30 8730
<PAGE>
Types of Policy Loans - Type A and Type B - There are two (2) types of policy
loans which the Company will grant to the Owner - Type A and Type B. The
type of loan which the Company will grant depends upon the amount of unloaned
Type A balance available at the time the loan is taken. The unloaned Type A
balance is 90% of the cash value, less the threshold, and less the sum of any
outstanding Type A loans as defined below. The threshold is the Guideline
Single Premium for this policy at issue as defined in Section 7702 of the
Internal Revenue Code of 1986 entitled "Life Insurance Contract Defined".
If the Specified Amount as defined on Page 10 of this policy increases, the
threshold will be increased to the threshold at issue times the ratio of the
largest Specified Amount ever existing on the policy to the Initial Specified
Amount. If the Specified Amount decreases, the threshold will not change.
A Type A Loan is a policy loan granted by the Company when the unloaned Type
A balance before the loan is taken exceeds the loan requested.
A Type B Loan is a policy loan granted by the Company when the unloaned Type
A balance before the loan is taken is less than or equal to zero.
When the unloaned Type A balance before the loan is taken exceeds zero, but
is less than the loan requested, a Type A Loan equal to the unloaned Type A
balance will be granted by the Company. The remainder of the requested loan
will be a Type B Loan.
The Company will grant a Type A Loan first before a Type B Loan. Once a
policy loan is granted, it remains a Type A or a Type B until it is repaid.
Policy Loan Interest - The interest charged by the Company on a policy loan
depends upon the type of loan granted. On a Type A Loan the Company will
charge an effective interest rate of two (2) percentage points lower than the
effective interest rate charged at the time by the Company for a Type B Loan.
On a Type B Loan the Company will charge interest at the effective maximum
rate of 8%, or at any lower rate established by the Company for any period
during which the loan is outstanding.
Loan interest accrues on a daily basis from the date of the loan and is
payable at the end of each policy year. Loan interest unpaid on a policy
anniversary becomes loan principal. The Company shall provide at least 30
days written notice to the Owner (or any other party designated by the Owner
to receive notice under this policy) and any assignee recorded at the Home
Office of any increase in the interest rate on loans outstanding 40 or more
days prior to the effective date of the increase. As to loans made during the
40 days before the effective date of the policy loan interest rate increase,
the Company shall notify the Owner and any assignee at the time the loan is
made.
The effective date of any increase in such interest rate shall not be less
than twelve months after the effective date of the establishment of the
previous rate. If the interest rate is increased, the amount of such increase
shall not exceed one percent per year.
Interest accrues on a daily basis from the date of the loan and is compounded
annually. Interest unpaid on a policy anniversary becomes loan principal.
8730 Page 2
<PAGE>
Debt - As used in this policy, debt means the principal of any loan outstanding
against this policy, plus any accrued loan interest. If the policy debt
exceeds the cash value, the Company will send a notice by mail to the Owner
and to the assignee, if any, at their addresses last reported to the Company.
If the excess is not paid within 61 days from the date the notice is mailed,
the policy will terminate without value.
Policy Loan Repayment - Any debt may be repaid, in whole or in part, at any time
while this policy is in force. When a loan repayment is made, accumulation
value securing the debt in the General Account equal to the loan repayment
will be allocated among the General Account and divisions of Separate Account
A using the same percentages used to allocate net premiums. Repayments will
be used to reduce policy loans until fully paid in the following order:
(1) Any or all Type B Loans; then
(2) Any or all Type A Loans.
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
President Secretary
8730 Page 3
<PAGE>
SETTLEMENT OPTIONS
TABLES OF MONTHLY INSTALLMENTS UNDER OPTION B OR C
Monthly installments are shown for each $1,000 of net proceeds applied. The
ages shown are ages nearest birthday when the first monthly installment is
payable.
OPTION B TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Installment Installment Installment Installment Installment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $84.47 7 $13.16 13 $7.71 19 $5.73 25 $4.71
2 42.86 8 11.68 14 7.26 20 5.51 26 4.59
3 28.99 9 10.53 15 6.87 21 5.32 27 4.48
4 22.06 10 9.61 16 6.53 22 5.15 28 4,37
5 17.91 11 8.86 17 6.23 23 4.99 29 4.27
6 15.14 12 8.24 18 5.96 24 4.84 30 4.18
Multiply the monthly installment by 11.84 for annual, by 5.96 for semi-annual or by 2.99 for quarterly installments.
</TABLE>
- --------------------------------------------------------------------------------
OPTION C TABLE
LIFE INCOME
- --------------------------------------------------------------------------------
Attained Attained
Age of Payee MONTHLY INSTALLMENTS Age of Payee MONTHLY INSTALLMENTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
---------------GUARANTEED--------------- ---------------GUARANTEED---------------
Male Female 10 Years 15 Years 20 Years Male Female 10 Years 15 Years 20 Years
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 or 21 or
Under Under $2.83 $2.82 $2.81 51 56 $4.60 $4.44 $4.24
17 22 2.85 2.84 2.84 52 57 4.69 4.52 4.30
18 23 2.88 2.87 2.86 53 58 4.79 4.60 4.36
19 24 2.90 2.89 2.88 54 59 4.90 4.69 4.41
20 25 2.93 2.92 2.91 55 60 5.01 4.77 4.47
21 26 2.95 2.95 2.93 56 61 5.12 4.86 4.53
22 27 2.98 2.97 2.96 57 62 5.23 4.94 4.59
23 28 3.01 3.00 2.99 58 63 5.35 5.03 4.64
24 29 3.04 3.03 3.02 59 64 5.48 5.12 4.70
25 30 3.08 3.07 3.05 60 65 5.61 5.21 4.75
26 31 3.11 3.10 3.08 61 66 5.74 5.30 4.80
27 32 3.14 3.13 3.11 62 67 5.87 5.39 4.85
28 33 3.18 3.17 3.15 63 68 6.01 5.48 4.90
29 34 3.22 3.20 3.18 64 69 6.16 5.56 4.94
30 35 3.26 3.24 3.22 65 70 6.30 5.65 4.98
31 36 3.30 3.28 3.25 66 71 6.45 5.73 5.02
32 37 3.34 3.32 3.29 67 72 6.60 5.82 5.05
33 38 3.39 3.36 3.33 68 73 6.76 5.90 5.09
34 39 3.43 3.41 3.37 69 74 6.91 5.97 5.12
35 40 3.48 3.45 3.41 70 75 7.07 6.05 5.14
36 41 3.53 3.50 3.45 71 76 7.23 6.12 5.17
37 42 3.59 3.55 3.50 72 77 7.38 6.18 5.19
38 43 3.64 3.60 3.54 73 78 7.54 6.24 5.20
39 44 3.70 3.65 3.59 74 79 7.69 6.30 5.22
40 45 3.76 3.71 3.64 75 80 7.84 6.35 5.23
41 46 3.82 3.77 3.69 76 81 7.98 6.39 5.24
42 47 3.88 3.82 3.74 77 82 8.13 6.43 5.25
43 48 3.95 3.88 3.79 78 83 8.26 6.47 5.26
44 49 4.02 3.95 3.84 79 84 8.39 6.50 5.26
45 50 4.09 4.01 3.90 80 or 85 or 8.51 6.53 5.27
46 51 4.17 4.08 3.95 Over Over
47 52 4.25 4.15 4.01
48 53 4.33 4.22 4.07
49 54 4.42 4.29 4.12
50 55 4.50 4.37 4.18
Multiply the monthly installment by 11.80 for annual, by 5.93 for semi-annual or by 2.98 for quarterly installments.
</TABLE>
Page 19
<PAGE>
ENDORSEMENTS:
Flexible Premium Variable Life Insurance Policy. Flexible Premiums Payable
Until the Maturity Date or Until Prior Death. Adjustable Death Benefit.
Insurance Payable at Death. Some Benefits Reflect Investment Results.
Additional Benefits, if any, as indicated on Page 3.
Non-Participating. No Dividends.
8609 Page 20
<PAGE>
WAIVER OF PREMIUM DISABILITY BENEFIT
RIDER
The Volunteer State Life Insurance Company has issued this rider as a part of
the policy to which it is attached.
Benefit - Subject to the provisions of the basic policy, the Company will waive
the monthly deduction (as defined in the basic policy) each month while the
Insured is totally disabled. The Company must receive due proof of the
Insured's Total Disability and that it has continued with no interruption for
at least six months.
Total Disability - Total Disability means the complete incapacity of the Insured
to engage in an occupation for remuneration or profit. Such incapacity must
be the result of bodily injury or disease. During the first two years of
total disability, "occupation" means the regular occupation of the Insured.
Thereafter, it means any occupation, for which the Insured is qualified due
to education, training or experience, in which the Insured may be engaged for
remuneration or profit. The total and irrecoverable loss by the Insured of
the following shall be deemed Total Disability:
(1) The sight of both eyes,
(2) The use of both hands,
(3) The use of both feet, or
(4) The use of one hand and one foot.
Risks Not Assumed - The monthly deduction shall not be waived or refunded if:
(1) Total Disability began prior to the date this benefit takes effect.
(2) Total Disability began after the grace period.
(3) Total Disability is a direct result of intentional self inflicted injury.
(4) Total Disability is the result of an act of war while the Insured is
serving in the military, naval or air forces of any country at war,
declared or undeclared.
If Total Disability begins within the grace period, as defined in the basic
policy, the monthly deduction due at the time the policy entered the grace
period will not be waived.
Consideration - This rider is issued in consideration of the application. The
waiver of premium cost is payable on the same dates and under the same
conditions as the cost of insurance for the basic policy. The payment of any
waiver of premium cost after this rider has ceased shall not extend the term
of the rider. Any such waiver of premium cost shall be returned by the
Company within a reasonable time.
Monthly Deductions Not Deducted - Any monthly deduction waived under this
benefit will not reduce the proceeds to be paid under the basic policy. The
Insured will remain liable to pay interest on any debt to the Company.
- --------------------------------------------------------------------------------
VOLUNTEER STATE LIFE
INSURANCE COMPANY
P.O. Box 1369
Chattanooga, Tennessee 37401
HAS ISSUED THIS RIDER AS PART OF THE POLICY TO WHICH IT IS ATTACHED
WAIVER OF PREMIUM DISABILITY BENEFIT RIDER
Form P81-12 8112
<PAGE>
Waiver of Premium Cost - The waiver of premium cost for the Insured is
determined on a monthly basis. The waiver of premium cost is calculated as
(1), multiplied by the result of (2) minus (3), where:
(1) is the waiver of premium cost rate as shown on page 3 of this rider.
(2) is the basic policy's death benefit at the beginning of the policy month,
divided by 1.0036748.
(3) is the basic policy's cash value at the beginning of the month.
Notice of Claim - Written notice of claim and proof of Total Disability must be
given to the Company at its Home Office. Such notice and proof must be given
during the lifetime of the Insured and during the period of Total Disability.
Such notice and proof must be furnished not later than one year after the
policy anniversary nearest age 60 of the Insured.
Failure to give such notice and proof will not invalidate or diminish any
claim if it is shown that notice and proof were given as soon as was
reasonably possible. Subject to this condition, no monthly deduction, the due
date of which is more than twelve months prior to the date of receipt at the
Home Office of written notice of claim, will be waived.
Proof of Disability - At reasonable intervals the Company will have the right to
require due proof of the continuance of Total Disability. As a part of such
proof, the Insured may be required to be examined by a physician chosen by
the Company. After the first two years of Total Disability, proof will not
be required more than once a year.
Monthly deductions as described in the terms of this policy are to be resumed
when:
(1) Total Disability ceases.
(2) Proof of the continuance of Total Disability is not furnished as
required.
Termination - This rider will cease as soon as one of the following occurs:
(1) The premium for this rider remains unpaid at the end of the grace period.
(2) The basic policy is surrendered.
(3) The policy anniversary nearest age 60 of the Insured is attained.
(4) The maturity date of the basic policy is attained.
(5) The Company receives a proper written request to terminate this rider.
8112 Page 2
23
<PAGE>
Table of Monthly Waiver of Premium Cost Rates Per $1,000
The monthly waiver of premium cost rate is based on the attained age and rating
class of the Insured. Attained age means age nearest birthday on the prior
policy anniversary.
<TABLE>
<CAPTION>
- --------------------------------------------------------
WP WP WP
Attained Cost Attained Cost Attained Cost
Age Rate Age Rate Age Rate
- --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
15 .01 30 .02 45 .04
16 .01 31 .02 46 .05
17 .01 32 .02 47 .06
18 .01 33 .02 48 .07
19 .01 34 .02 49 .08
20 .01 35 .02 50 .09
21 .01 36 .02 51 .11
22 .01 37 .02 52 .12
23 .01 38 .02 53 .14
24 .01 39 .02 54 .17
25 .01 40 .02 55 .19
26 .01 41 .03 56 * .22
27 .01 42 .03 57 * .24
28 .02 43 .03 58 * .27
29 .02 44 .04 59 * .29
- --------------------------------------------------------
</TABLE>
* Renewal only
8112 Page 3
<PAGE>
ACCIDENTAL DEATH BENEFIT RIDER
The Volunteer State Life Insurance Company has issued this Rider as a part of
the policy to which it is attached.
Benefit - The Company will pay to the beneficiary, subject to the provisions of
this policy, the Accidental Death Benefit upon receipt of due proof of both
of the following:
(1) The death of the Insured occurred while this Rider was in force.
(2) The death of the Insured occurred as a result of bodily injuries effected
solely and independently of all other causes through accidental means.
The amount of this Benefit is shown on page three of this policy.
Risks Not Assumed - This Accidental Death Benefit will not be paid if:
(1) The Insured dies more than 90 days after the accident causing death.
(2) The death of the Insured is caused by suicide while sane or insane.
(3) The death of the Insured results from travel or flight in or descent from
any kind of aircraft, unless:
(a) The Insured was a fare paying passenger on a commercial airline; and
(b) The flight was a regularly scheduled flight between definitely
established airports.
(4) The death of the Insured results, directly or indirectly, from any war
declared or undeclared, any act of war, or any hostile action by a
foreign power.
(5) The death of the Insured results from committing or attempting to commit
a felony.
(6) The death of the Insured is caused or contributed to, directly or
indirectly, by:
(a) Disease or bodily or mental infirmity, or
(b) Infection other than a pyogenic infection which occurs through and
with an accidental cut or wound.
(7) The death of the Insured is caused by the voluntary taking, inhaling, or
absorbing of any drug (unless taken as prescribed by a physician),
poison, gas or fumes.
(8) The death of the Insured results directly or indirectly from medical or
surgical treatment, unless such treatment is necessitated by an injury
covered in this Rider.
Right of Examination - The Company shall have the right and opportunity to
examine the body of the Insured and to make an autopsy unless prohibited by
law.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The premium remains unpaid at the end of the grace period.
(2) The policy is surrendered or continued as Reduced Paid Up or Extended
Term Insurance.
(3) The policy anniversary nearest age 70 of the Insured is attained.
(4) The maturity date of this policy, if it has one, is attained.
(5) The term period ends, if this policy is on a Term Insurance Plan.
(6) The Company receives a proper written request to terminate this Rider.
Consideration - This Rider is issued in consideration of the application and of
the premium shown on page three of this policy. This premium is to be paid
on the same dates and under the same conditions as the premium on the policy.
Any premium falling due on this policy after this Rider has ceased shall be
reduced by the amount of premium charged for this Rider. The payment of any
premium under this Rider after it has ceased shall not extend the term
hereof. Any such premium shall be returned by the Company within a
reasonable time.
- --------------------------------------------------------------------------------
VOLUNTEER STATE LIFE
INSURANCE COMPANY
P.O. Box 1369
Chattanooga, Tennessee 37401
ACCIDENTAL DEATH BENEFIT ....................... death by accidental means
Form P82-85 8285
<PAGE>
GUARANTEED INSURABILITY OPTION RIDER
An Option to Purchase Additional Life Insurance
The Volunteer State Life Insurance Company has issued this Rider as a part of
the policy to which it is attached.
Benefit - The Company agrees, at the option of the Insured, to permit the
purchase of an increase in the Specified Amount of the policy. Such purchase
must be made during an Option Period. Evidence of insurability is not
required. Each increase purchased must be for an amount equal to or less
than the applicable Schedule Amount shown below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SCHEDULE AMOUNT
- --------------------------------------------------------------------------------
Age at Issue First Option Subsequent
of the Policy Date Option Dates
- --------------------------------------------------------------------------------
<S> <C> <C>
0-35 Twice the Amount of The Amount of Guaranteed
Guaranteed Insurability Insurability Benefit*
Benefit*
- --------------------------------------------------------------------------------
36-40 The Amount of Guaranteed
Insurability Benefit* NONE
- --------------------------------------------------------------------------------
</TABLE>
*As shown on page 3 of the policy.
Conditions - This Rider is subject to the following conditions:
(1) Proper written application must be received by the Company at its Home
Office during the Option Period. The application must be in such form as
may be required by the Company.
(2) If this option is exercised during a Regular Option Period, then the
effective date of the increase will be the Regular Option Date.
If this option is exercised during a Substitute Option Period, then the
effective date of the increase will be the next monthly anniversary day
after written request.
(3) The minimum increase is $10,000.
(4) The cost of the increase will be based on the same premium class as the
original amount of insurance.
(5) The cost of the increase shall be that in effect by the Company on the
effective date of the increase. Such cost shall be based on the then
attained age of the Insured at nearest birthday.
(6) The total number of options that may be exercised cannot be greater than
the number of Regular Option Dates available.
(7) If the basic policy does not contain a benefit to waive monthly
deductions in the event of total and permanent disability, then increases
to the Specified Amount will not include such a waiver benefit.
If the basic policy does contain a benefit to waive monthly deductions in
the event of total and permanent disability, then increases to the
Specified Amount may include such a waiver benefit. Satisfactory evidence
of insurability will be required to include this waiver benefit for the
increase.
- --------------------------------------------------------------------------------
VOLUNTEER STATE LIFE
INSURANCE COMPANY
P.O. Box 1369
Chattanooga, Tennessee 37401
GUARANTEED INSURABILITY OPTION RIDER.. an option to purchase additional
insurance
Form P83-07 8307
<PAGE>
Conditions - (continued)
(8) The right to purchase an increase during an Option Period shall expire at
the end of such Option Period. This right cannot be carried forward to
be exercised on any future date. However, such expiry dates shall not
affect the right to purchase an increase during a subsequent Option
Period, if any.
OPTION PERIODS
Regular Option Period - A Regular Option Period shall be the 60 day period which
ends on a Regular Option Date.
Substitute Option Period - A Substitute Option Period shall be the 90 day period
immediately following a Substitute Option Date. If an increase is purchased
during a Substitute Option Period, then the next Regular Option Date will be
cancelled.
OPTION DATES
Regular Option Dates - Regular Option Dates shall be the policy anniversaries
nearest the Attained Ages shown below.
<TABLE>
<CAPTION>
- ----------------------------------------------
Age at Issue Regular Option Dates
of the Policy (Attained Ages)
- ----------------------------------------------
<S> <C>
0-23 24, 28, 32, 36, 40
24-27 28, 32, 36, 40
28-31 32, 36, 40
32-35 36,40
36 40
37 41
38 42
39 43
40 44
- ----------------------------------------------
</TABLE>
Substitute Option Dates - The Substitute Option Dates will be those dates of:
(1) The Insured's marriage; and
(2) The birth or legal adoption of the children of the Insured.
Substitute Option Dates must occur before the last Regular Option Date.
TERMINATION
Termination - This Rider will cease as soon as one of the following occurs:
(1) The basic policy terminates.
(2) The last Regular Option Date shown in the table has passed.
(3) The maturity date of the basic policy is attained.
(4) The Company receives a proper written request to terminate this rider. In
this case the Company reserves the right to require the policy for
endorsement.
CONSIDERATION
Consideration - This Rider is issued in consideration of the application
therefor and payment of the cost for this Rider. The cost for this Rider
will be included in the monthly deduction, as defined in The Policy. The
monthly deduction for The Policy after this Rider has ceased will be reduced
by the cost for this Rider. The deduction of any cost for this Rider after it
has ceased shall not extend the term of this Rider. Any such deduction will
be refunded.
<PAGE>
CHILDREN'S TERM INSURANCE RIDER
READ CAREFULLY - TERM INSURANCE ON DEPENDENTS
The Volunteer State Life Insurance Company has issued this Rider as a part of
the policy to which it is attached.
Benefit - The Company will pay to the proper Beneficiary on due proof of death
of any Insured Child a lump sum payment of $1,000 multiplied by the number of
units shown on page three of the policy of which this Rider is a part, herein
called "The Policy". Such payment will be made subject to the provisions of
this Rider and those of The Policy. This benefit is to be paid in the event
the death of an Insured Child occurs:
(1) After such child has attained the age of 15 days;
(2) Before the policy anniversary nearest the child's 25th birthday; and
(3) Before the Expiry Date.
Insured - As used herein, "Insured" means the Insured in The Policy.
Owner - As used herein, "Owner" means the Owner of The Policy.
Insured Child - As used herein, "Insured Child" means:
(1) Each of the Insured's children, stepchildren or legally adopted children
who is named in the application for this Rider and who, on the date of
the application, has not attained the age of 18 years;
(2) Any child who is born to the Insured after the date of the application;
and
(3) Any child who, prior to attaining the age of 18 years, is legally adopted
by the Insured.
Beneficiaries of This Rider - Proceeds to be paid due to the death of an Insured
Child will be paid to the Insured, if then living. Otherwise, the proceeds
will be paid to the Insured's Spouse, if then living. If neither the Insured
nor the Insured's Spouse is then living, the proceeds will be paid to the
executors, administrators, or assigns of the Insured Child.
While the Insured is living, the Owner may name or change a revocable
beneficiary at any time. A change of the Owner or beneficiary must be made in
writing. To be binding on the Company, the change must be signed by the Owner
and any irrevocable beneficiary and must be filed at the Home Office. Any
such change will take effect as of the date it was signed, subject to any
payment made or action taken by the Company before the change was filed.
Expiry Date - The Expiry Date of this Rider shall be the earlier of:
(1) The policy anniversary nearest the 25th birthday of the youngest child;
or
(2) The policy anniversary nearest the 65th birthday of the Insured.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The Policy terminates.
(2) The Expiry Date of this Rider is attained.
(3) The Company receives a proper request to terminate this Rider.
Waiver of Cost of Insurance - The cost of insurance for this Rider shall be
waived only if and when the monthly deduction under The Policy is waived
under any Rider which is a part of The Policy.
- --------------------------------------------------------------------------------
VOLUNTEER STATE LIFE
INSURANCE COMPANY
P.O. Box 1369
Chattanooga, Tennessee 37401
CHILDREN'S TERM INSURANCE RIDER
READ CAREFULLY - TERM INSURANCE ON DEPENDENTS
Form P88-80 8880
<PAGE>
CONVERSION PRIVILEGE
Insured Child's Benefit - The Insurance under this Rider on an Insured Child may
be converted to a new policy on the earlier of:
(1) The Expiry Date, or
(2) The policy anniversary nearest the Insured Child's 25th birthday.
The amount converted is not to exceed $5,000 multiplied by the number of
units shown on page three of The Policy. The new policy will be issued
without evidence of insurability. Issue will be governed by all the
conditions set forth below.
Conversion Conditions - Conversion to a new policy shall be subject to the
following conditions:
(1) Proper written application for the new policy must be made to the Company
at its Home Office. The first premium for the new policy shall be paid
to the Company not later than the termination date of the insurance to be
converted. The first premium must also be paid during the lifetime of the
person to be insured under the new policy.
(2) The effective date of the new policy shall be the date of termination of
the insurance to be converted.
(3) Subject to the Company's minimum policy rules, the new policy will be
issued on any plan of non-participating whole life or endowment insurance
offered by the Company on the effective date of the new policy.
(4) The new policy will be issued on a form and at premium rates in use by
the Company on the effective date of conversion. Such rates will be
based on the then attained age at the nearest birthday to the person to
be insured. The new policy will not include disability or accidental
death benefits unless evidence satisfactory to the Company of the
insurability of the person to be insured is furnished.
(5) The application for a new policy on an Insured Child shall be made by the
Owner.
PAID UP INSURANCE AT DEATH OF INSURED
Benefit - Any term insurance in force under this rider on any Insured Child on
the date of the Insured's death will become fully paid up on that date. Upon
the death of the Insured the Company shall have the right to require
surrender of this Rider in exchange for any fully paid up term insurance.
Such paid up term insurance may be surrendered at any time for its cash
value, the then net single premium for the remaining term insurance. The net
single premium will be computed on the basis of the 1980 CSO Mortality
Tables, without the ten year select mortality factors, and four and one-half
percent interest. The cash value payable within 30 days of a policy
anniversary shall not be less than the cash value on the anniversary.
Consideration - This Rider is issued in consideration of the application
therefor and payment of the cost for this Rider. The cost for this Rider
will be included in the monthly deduction, as defined in The Policy. The
monthly deduction for The Policy after this Rider has ceased will be reduced
by the cost for this Rider. The deduction of any cost for this Rider after it
has ceased shall not extend the term of this Rider. Any such deduction will
be refunded.
8880
<PAGE>
SPOUSE TERM INSURANCE RIDER
The Volunteer State Life Insurance Company has issued this Rider as a part of
the policy to which it is attached.
Benefit - The Company will pay to the named Beneficiary on due proof of death of
the Insured Spouse a lump sum payment equal to $1,000 multiplied by the
number of units shown on page three of The Policy. This benefit is to be
paid in the event the death of the Insured Spouse occurs while this Rider is
in force and before the Expiry Date. Such payment will be made subject to
the provisions of this Rider and those of the policy (herein called "The
Policy") of which this Rider is a part.
Insured - As used herein, "Insured" means the Insured in The Policy.
Owner - As used herein, "Owner" means the Owner of The Policy.
Insured Spouse - As used herein, "Insured Spouse" means the Insured's spouse who
is named in the application for this Rider.
Beneficiaries of This Rider - Proceeds to be paid due to the death of the
Insured Spouse will be paid to the Insured, if then living. Otherwise, the
proceeds will be paid to the executors, administrators, or assigns of the
Insured Spouse.
While the Insured is living, the Owner may name or change a revocable
beneficiary at any time. A change of the Owner or beneficiary must be made
in writing. To be binding on the Company, the change must be signed by the
Owner and any irrevocable beneficiary and must be filed at the Home Office.
Any such change will take effect as of the date it was signed, subject to any
payment made or action taken by the Company before the change was filed.
Expiry Date - The Expiry Date of this Rider shall be the policy anniversary
nearest the 70th birthday of the Insured Spouse.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The Policy terminates.
(2) The Expiry Date of this Rider is attained.
(3) The date this Rider is converted.
(4) The Company receives a proper request to terminate this Rider.
Waiver of Cost of Insurance - The cost of insurance for this Rider shall be
waived only if and when the monthly deduction under The Policy is waived
under any Disability Rider which is a part of The Policy.
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
President Secretary
- --------------------------------------------------------------------------------
VOLUNTEER STATE LIFE
INSURANCE COMPANY
P.O. Box 1369
Chattanooga, Tennessee 37401
SPOUSE TERM INSURANCE RIDER
FORM P88-86 8886(S-D)
<PAGE>
Consideration - This Rider is issued in consideration of the application
therefor and payment of the cost for this Rider. The cost for this Rider
will be included in the monthly deduction, as defined in The Policy. The
monthly deduction for The Policy after this Rider has ceased will be reduced
by the cost for this Rider. The deduction of any cost for this Rider after it
has ceased shall not extend the term of this Rider. Any such deduction will
be refunded.
CONVERSION PRIVILEGE
Insured Spouse's Benefit - The insurance under this Rider on the Insured Spouse
may be converted to a new policy at any time while this Rider is in force
before the policy anniversary nearest the 65th birthday of the Insured
Spouse. The amount converted is not to exceed $1,000 multiplied by the
number of units shown on page three of The Policy. The new policy will be
issued without evidence of insurability. Issue will be governed by all the
conditions set forth below.
Conversion Conditions - Conversion to a new policy shall be subject to the
following conditions:
(1) Proper written application for the new policy must be made to the Company
at its Home Office. The first premium for the new policy shall be paid
to the Company not later than the termination date of the insurance to be
converted. The first premium must also be paid during the lifetime of the
person to be insured under the new policy.
(2) The effective date of the new policy shall be the date of termination of
the insurance to be converted.
(3) Subject to the Company's minimum policy rules, the new policy will be
issued on any plan of non-participating whole life or endowment insurance
offered by the Company on the effective date of the new policy.
(4) The new policy will be issued on a form and at premium rates in use by
the Company on the effective date of the conversion. Such rates will be
based on the then attained age to the nearest birthday of the person to
be insured. For conversion of insurance on the Insured Spouse, the
premium shall be that for the risk classification of such Insured Spouse
at the effective date of this Rider. The new policy will not include
disability waiver or accidental death benefits unless evidence
satisfactory to the Company of the insurability of the person to be
insured is furnished.
(5) The application for a new policy on the Insured Spouse must be made by
the Owner.
(6) The suicide and contestable periods of the new policy will be measured
from the effective date of the insurance provided by this Rider.
PAID UP INSURANCE AT DEATH OF INSURED
Benefit - Any term insurance in force under this Rider on the Insured Spouse
will become fully paid up on the date of the Insured's death. Any such paid
up term insurance will remain in effect until the Expiry Date. Upon the
death of the Insured the Company shall have the right to require surrender of
this Rider in exchange for any such fully paid up term insurance. Such paid
up term insurance may be surrendered at any time for the then net single
premium for the remaining term insurance. The net single premium will be
computed on the basis of the Commissioners 1980 Standard Ordinary Smoker or
Nonsmoker Mortality Table and four percent interest. Any cash value of a
paid up term policy payable within thirty (30) days after a policy
anniversary shall not be less than such value on the anniversary.
COST OF INSURANCE RATES
Cost of Insurance Rates - The monthly cost of insurance rate for this Rider is
based on the sex, attained age, and rating class of the Insured Spouse.
Attained age means the age nearest birthday on the prior policy anniversary.
Monthly cost of insurance rates will be determined by the Company based upon
expectations as to future mortality experience. Any change in cost of
insurance rates will apply to all individuals of the same class as the
Insured Spouse. However, the cost of insurance rates can never be greater
than those shown in the Table of Monthly Guaranteed Cost of Insurance Rates
on page 4A of the Policy. Such guaranteed maximum rates are based on the
Commissioners 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table.
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
EXCHANGE OF INSURED RIDER
Effective Date -
Chubb Life Insurance Company of America has issued this rider as a part of the
policy to which it is attached. It takes effect on the Policy Date unless a
later effective date is shown above. In this rider, "we", "us" or "our" means
Chubb Life Insurance Company of America; "you" means the Owner of the policy;
and "Insured" means the person named on Page 3 of the policy as insured under
this rider.
Benefit - Subject to the provisions of this rider and the original policy to
which it is attached, the original policy may be exchanged for a reissued policy
on the life of a substitute Insured. This rider has no cash or loan value.
Conditions for Exchange - The exchange of Insured will be subject to the
following conditions:
(1) You and the substitute Insured must sign the application for the reissued
policy.
(2) The original policy and this rider must be in force and not within the
Grace Period, as defined in the policy.
(3) You must have an insurable interest in the life of the substitute Insured.
(4) We must receive the Charge for Exchange as described below.
(5) The original policy must be returned to us before the Exchange Date.
(6) The exchange is subject to proof of insurability of the substitute Insured
which satisfies us.
(7) We must accept the substitute Insured.
(8) Any assignee of the original policy must agree in writing to the exchange.
Exchange Date - The exchange date will be the monthly anniversary day on or
following the date all the Conditions for Exchange are satisfied. On the
Exchange Date, coverage on the substitute Insured will become effective and
coverage on the previous Insured will terminate. In no event will coverage on
the previous Insured and substitute Insured be effective at the same time.
Charge for Exchange - A charge for exchange of $1.00 per $1,000 of Specified
Amount, but not more than $150, must be paid to us. If we do not accept the
substitute Insured, the charge will be refunded.
<PAGE>
The Reissued Policy - The reissued policy will be subject to the following
conditions:
(1) The reissued policy will not be changed as to plan or Policy Date (except
as provided below). The Specified Amount may be reduced by mutual consent
of you and us but cannot be increased.
(2) The Age at Issue of the reissued policy will be changed to the age of the
substitute Insured as of the birthday nearest the Policy Date.
(3) If the Policy Date of the original policy is before the date of birth of
the substitute Insured, the Policy Date of the reissued policy will be
changed to the first policy anniversary following such date of birth.
(4) The Suicide and Incontestability provisions of the reissued policy will
apply for two years following the Exchange Date. If the substitute Insured
commits suicide within this period, our only liability will be a refund of
the premiums paid on and after the Exchange Date plus the cash value of the
reissued policy on the date of exchange, less any indebtedness.
(5) Cost of insurance rates for the reissued policy will be based on the
age at issue and policy year and on the sex of the substitute Insured if
the original policy has cost of insurance rates which vary by the sex of
the Insured.
(6) The Accumulation Value and Cash Value of the reissued policy on the
Exchange Date will be those in effect on the original policy on the
Exchange Date.
(7) The reissued policy will be subject to any policy loans on the original
policy and to any assignment of the original policy on file with us.
(8) Any rider or benefits attached to this policy, including this rider, may be
continued on the substitute Insured only with our consent.
Monthly Deduction - There is no monthly deduction for this rider. A Charge for
Exchange will apply upon exchange as described above.
Termination - This rider will cease as soon as one of the following occurs:
(1) The original policy is surrendered, exchanged, or lapsed.
(2) We receive a proper written request to terminate this rider.
(3) The policy anniversary nearest the Insured's attained age 70.
(4) The Maturity Date of the original policy is attained.
(5) The death of the Insured.
(6) The original policy is exchanged for a reissued policy under the provisions
of this rider unless we agree to a continuation of this rider thereafter.
[SIGNATURE APPEARS HERE] [SIGNATURE APPEARS HERE]
President Secretary
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
TERMINAL ILLNESS ACCELERATED
BENEFIT RIDER
NOTICE. Death benefits and policy cash values, if any, will be reduced if an
accelerated benefit is paid. Benefits paid under this Rider may or may not be
taxable. Consult your personal tax advisor to assess the tax consequences of the
benefit.
This Rider is part of the Policy to which it is attached. It takes effect on the
date of Issue or Policy Date of the Policy. In this Rider, "we", us", or "our"
means Chubb Life Insurance Company of America; "you" and "your" means the Owner
of the Policy; and "Insured" means the person named on the data page of the
Policy.
CONSIDERATION - This Rider is issued in consideration of the application.
There is no charge for this Rider prior to the time you request Rider benefits.
CANCELLATION - We will not cancel this Rider, unless you request termination of
this Rider. It will remain in force as long as this Policy remains in force or
until benefits are paid under this Rider.
DEFINITIONS
Accelerated Benefit Payment - The Accelerated Benefit Payment is the requested
portion of the Eligible Death Benefit less the adjustments and deductions as
explained in the Benefits section.
Administrative Expense Charge - The Administrative Expense Charge will be
deducted from the requested portion of the Eligible Death Benefit upon payment
of the Accelerated Benefit.
Benefit Ratio - The Benefit Ratio is the result of dividing (a) by (b) where:
(a) is the requested portion of the Eligible Death Benefit; and
(b) is the Death Benefit or current Face Amount of Insurance under the policy
to which this Rider is attached.
Eligible Death Benefit - The Eligible Death Benefit for the Insured is the Death
Benefit or current Face Amount of Insurance on the life of the Insured provided
by this Policy.
Immediate Family - Immediate Family means the spouse, child, brother, sister,
parent, or grandparent of the Insured or the Owner.
Physician - Physician means an individual who is licensed to practice medicine
and treat illness or injury in the state in which treatment is received and who
is acting within the scope of that license. Physician does not include:
(1) the Insured;
(2) you;
(3) a person who lives with the Insured or you; or
(4) a person who is part of the Insured's or your Immediate Family.
Physician Statement - A Physician Statement means a written statement acceptable
to us, signed by a Physician which:
(1) gives the Physician's diagnosis of the Insured's noncorrectable medical
condition; and
(2) states that, with reasonable medical certainty, the noncorrectable medical
condition will result in the death of the Insured within 6 months or less
from the date of the Physician Statement, assuming the exercise of ordinary
and reasonable medical care, advice, and treatment available in the same or
similar communities.
Terminal Illness - Terminal illness is a noncorrectable medical condition, which
will result in the death of the Insured within 6 months or less from the date
of the Physician Statement.
BENEFITS
If the Insured develops a Terminal Illness, you may request an acceleration of a
portion of the Eligible Death Benefit. The Eligible Death Benefit will be
determined as of the date the Notice of Claim is received at our Home Office.
The maximum amount of Eligible Death Benefit which you may request from this
Policy is fifty per cent (50%) of the Death Benefit or current Face Amount
exclusive of any and all riders. The maximum amount available on all policies
with this Rider attached in force with us is $250,000 per Insured.
Adjustments and Deductions - The requested portion of the Eligible Death Benefit
will be subject to the following adjustments and deduction:
(1) An actuarial discount will be deducted from the requested portion of the
Eligible Death Benefit. This discount reflects the early payment of amounts
held under the Policy. It will be based on an annual interest rate which has
been declared by us and the then current premium or cost of insurance rate,
both of which are in effect as of the date your Notice of Claim is received
at our Home Office. The maximum interest rate used shall be the greater of
the yield on 90 day treasury bills or the maximum statutory adjustable policy
loan interest rate in effect the date of the request.
Page 1
<PAGE>
(2) If, on the date we approve your request, there is a Policy loan outstanding
on this Policy, a reduction to the requested portion of the Eligible Death
Benefit will apply. This reduction serves to repay a portion of the Policy
loan and is determined as follows: (Outstanding Policy Loan) x (Benefit
Ratio).
(3) A deduction will be made for any premiums due within the Policy's grace
period and are unpaid at the time we approve your request.
(4) A deduction will be made for the Administrative Expense Charge.
Waiver of Premiums or Cost of Insurance - If all of the following occur:
(1) a Waiver of Premium Rider or a Waiver of Monthly Deduction Rider on the
Insured is attached to this Policy;
(2) that Rider is in force at the time of the claim for this Rider's benefits;
and
(3) Proof of Terminal Illness is submitted and approved;
then for purposes of any Waiver of Premium Rider or Waiver of Monthly Deduction
Rider that is in force, the Insured will be deemed to be Totally Disabled and
have satisfied the initial waiting period required by the applicable Rider.
Conditions for the Accelerated Benefit Payment - The Accelerated Benefit Payment
is subject to the following conditions:
(1) This Policy must be in force other than as Extended Term Insurance or
Reduced Paid-up Insurance.
(2) During the lifetime of the Insured, we must receive Proof of Terminal
Illness that is acceptable to us.
(3) No prior request for an Accelerated Benefit Payment may have been made under
this or any other Terminal Illness Accelerated Benefit Rider issued by us
with respect to the Insured. If more than one request is received at the
same time, we will determine which request is deemed to have been received
first and the other requests will be returned.
(4) We must receive a consent form from all irrevocable beneficiaries, if
any, and all assignees, if any. We also reserve the right to require a
consent form from a spouse, the Insured, other beneficiaries, or any other
person if, in our discretion, such person's consent is necessary to protect
our interests.
(5) This Rider provides for the advance of a portion of the Eligible Death
Benefit of this Policy. This is not meant to cause involuntary access to
proceeds ultimately payable to the beneficiary. Therefore, this benefit is
not available.
(a) if either you or the Insured is required by law to use this benefit to
meet the claims of creditors, whether in bankruptcy or otherwise; or
(b) if either you or the Insured is required by a government agency to use
this benefit in order to apply for, obtain or otherwise keep a
government benefit or entitlement.
Limitations - No benefit will be provided by this Rider if Terminal Illness
results from intentionally self-inflicted injuries.
ADJUSTMENTS TO THE POLICY
After an Accelerated Benefit Payment is made, the Policy and all riders will
remain in force subject to the following adjustments:
(1) The Policy's Death Benefit or current Face Amount, its current and
Guaranteed Cash Value, if any, its Fund Account or Accumulation Value, if
any, and its required Premium, if any, will be reduced by the Benefit Ratio.
(2) Any outstanding Policy loan will be reduced by the portion of the Policy
loan repaid as specified in the Benefits provision of this Rider.
(3) We will mail to you, for attachment to the Policy, a new policy data page
showing the decrease in policy values resulting from the Accelerated Benefit
Payment.
CLAIMS
Notice of Claim - Written Notice of Claim may be given to us any time after the
date the Insured develops a Terminal Illness as defined in this Rider. Notice of
Claim must identify the Insured and be sent to us at our Home Office.
Claim Forms - We will send claim forms to the Owner when Notice of Claim is
received. If we do not mail the claim form within 15 days, the Owner will be
considered to have complied with the Proof of Terminal Illness requirements by
giving us a Physician Statement acceptable to us and a written statement of the
nature and extent of the Terminal Illness.
Proof of Terminal Illness - Written proof of the Insured's Terminal Illness must
be received by us before we will make a Benefit payment. This proof will include
a properly completed claim form and a Physician Statement acceptable to us. We
may request additional medical information from the Physician submitting the
statement or any physician or institution deemed necessary. We will not
unreasonably withhold our acceptance of Proof of Terminal Illness.
R879 Page 2 6550001
<PAGE>
Physical Examination - At our expense, we reserve the right to have a Physician
of our choosing examine the Insured prior to making an Accelerated Benefit
payment. In the event that the Physician we choose provides a different
diagnosis of the Insured's medical conditions, we reserve the right to rely on
the statement from the Physician of our choosing for claim purposes.
Time of Payment of Claims - All benefits described in this Rider will be
available as soon as we receive satisfactory Proof of Terminal Illness.
Payment of Claims - All Rider benefits will be paid in a lump sum to the Owner
as of the date of benefit payment. Upon the death of the Owner, we will pay the
benefits to the estate of the Owner, or contingent Owner, if applicable.
GENERAL PROVISIONS
Representations and Contestability - All statements made in the application for
this Rider, or the policy to which it is attached, by or on behalf of the
Insured will, in the absence of fraud, be deemed representations and not
warranties. The validity of the Rider with respect to the Insured will not be
contestable after it has been in force for 2 years from the date of issue or
Policy Date or reinstatement of the policy to which this Rider is attached
during which time the Insured was living.
Reinstatement - If this Policy is reinstated, this Rider will also be reinstated
provided a benefit has not been paid under this rider.
Incorrect Age or Sex - If there is an error in the age or sex of the Insured,
the benefits available under this Rider will be the amount that would be
available based on the Death Benefit or Face Amount that this Policy would have
provided at the correct age or sex.
Termination of Rider - This Rider terminates:
(1) on the day we receive written request of the Owner; or
(2) upon termination of this Policy; or
(3) when this Policy reaches its Maturity Date, if any; or
(4) upon payment of the accelerated benefit provided by this Rider; or
(5) upon the death of the Insured.
[SIGNATURE APPEARS HERE] /s/ Frederick D. Condon
President Secretary
R879 Page 3 6550001
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
EXTENSION OF MATURITY DATE RIDER
Effective Date -
This rider is part of the policy to which it is attached. It takes effect on the
effective date of the policy unless a later effective date is shown above. In
this rider, "we", "us" or "our" means the Chubb Life Insurance Company of
America; "you" means the Owner of the policy; and "Insured" means the person
named on the Data Page.
The Maturity Date may be extended beyond that date otherwise defined in the
policy by written request. The new Maturity Date will be that requested by you.
If you elect to extend the original Maturity Date, you may revoke this election
in writing at any time prior to the original Maturity Date.
After the original Maturity Date:
(1) No new premiums will be accepted by us;
(2) We will continue to credit interest to the policy's Accumulation Value of
the General Account in the same manner;
(3) The Accumulation Value in each division of Separate Account A will continue
to be calculated in the same manner;
(4) The Death Benefit will always be equal to the Accumulation Value of the
policy;
(5) Interest on any policy loans will continue to accrue and become part of any
debt;
(6) We will deduct no more cost of insurance charges.
[SIGNATURE APPEARS HERE] /s/ Frederick D. Condon
President Secretary
P93-55 6550001
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
OTHER INSURED TERM RIDER
Chubb Life Insurance Company of America has issued this rider as a part of the
policy to which it is attached.
Consideration - This rider is issued in consideration of the application
therefor and payment of the cost for this rider. The cost for this rider will be
included in the monthly deduction, as defined in the policy. The monthly
deduction for the policy after this rider has ceased will be reduced by the cost
for this rider. The deduction of any cost for this rider after it has ceased
shall not extend the term of this rider. Any such deduction will be refunded.
Insured - As used herein, "Insured" means the primary Insured in the policy.
Owner - As used herein, "Owner" means the Owner of the policy.
Other insured - As used herein, "Other Insured" means the Other Insured who is
named in the application for this rider, and on Data Page 3 of the policy.
Benefit - The Company will pay to the named Beneficiary on due proof of death of
the Other Insured, a lump sum payment equal to $1,000 multiplied by the number
of units shown on Data Page 3 of the policy. This benefit is to be paid in the
event the death of the Other Insured occurs while this rider is in force and
before the Expiry Date. Such payment will be made subject to the provisions of
this rider and those of the policy of which this rider is a part.
Beneficiary - Any proceeds to be paid under this rider will be paid to the
Beneficiary named in the application for this rider.
While the Insured is living, the Owner may name or change a revocable
Beneficiary at any time. A change of the Owner or Beneficiary must be made in
writing. To be binding on the Company, the change must be signed by the Owner
and any irrevocable Beneficiary and must be filed at the Home Office. Any change
will take effect as of the date it was signed, subject to any payment made or
action taken by the Company before the change was filed.
CONVERSION PRIVILEGE
Other Insured's Benefit - The insurance under this rider on the Other Insured
may be converted to a new policy at any time while this rider is in force before
the policy anniversary nearest the 7Oth birthday of the Other Insured, or upon
the death of the Insured. The amount converted is not to exceed $1,000
multiplied by the number of units shown on Data Page 3 of the policy. The new
policy will be issued without evidence of insurability. Issue will be governed
by all the conditions set forth below.
P93-58 6550001
<PAGE>
CONVERSION PRIVILEGE (CONTINUED)
Conversion Conditions - Conversion to a new policy shall be subject to the
following conditions:
(1) Proper written application for the policy must be made to the Company at its
Home Office. The first premium for the new policy shall be paid to the
Company not later than the termination date of the insurance to be
converted. The first premium must also be paid during the lifetime of the
person to be insured under the new policy.
(2) The effective date of the new policy shall be the date of termination of the
insurance to be converted.
(3) Subject to the Company's minimum policy rules, the new policy will be issued
on any plan of non-participating whole life or endowment insurance
offered by the Company on the effective date of the new policy.
(4) The new policy will be issued on a form and at premium rates in use by the
Company on the effective date of the conversion. Such rates will be based on
the then attained age to the nearest birthday of the person to be insured.
For conversion of insurance on the Other Insured, the premium shall be that
for the risk classification of such Other Insured at the effective date of
this rider. The new policy will not include disability waiver or accidental
death benefits unless evidence satisfactory to the Company of the
insurability of the person to be insured is furnished.
(5) The application for a new policy on the Other Insured must be made by the
Owner of the policy to which this rider is attached.
(6) The suicide and contestable periods of the new policy will be measured from
the effective date of the insurance provided by this rider.
COST OF INSURANCE RATES
Cost of Insurance Rates - The monthly cost of insurance rate for this rider is
based on the sex, attained age, and rating class of the Other Insured. Attained
age means the age nearest birthday on the prior policy anniversary. Monthly cost
of insurance rates will be determined by the Company based upon expectations as
to future mortality experience. Any change in cost of insurance rates will apply
to all individuals of the same class as the Other Insured. However, the cost of
insurance rates can never be greater than those shown in the Table of Monthly
Guaranteed Cost of Insurance Rates on page 4A of the policy. Such guaranteed
maximum rates are based on the 1980 Standard Ordinary Smoker or Nonsmoker
Mortality Table.
Waiver of Cost of insurance - The cost of insurance for this rider shall be
waived only if and when the monthly deduction under the policy is waived under
any disability rider which is a part of the policy.
Expiry Date - The Expiry Date of this rider shall be the policy anniversary
nearest the 95th birthday of the Other Insured, or the Maturity Date of the
policy, whichever occurs first.
Termination - This rider will cease as soon as one of the following first
occurs:
(1) The policy terminates;
(2) The Expiry Date of this rider is attained;
(3) The date this rider is converted;
(4) The Company receives a proper request, from the Owner to terminate this
rider.
[SIGNATURE APPEARS HERE] /s/ Frederick D. Condon
President Secretary
P93-58 6550001
<PAGE>
[LETTERHEAD OF CHUBB LIFE AMERICA APPEARS HERE]
PRIMARY INSURED TERM RIDER
Effective Date -
This Rider is part of the policy to which it is attached. It takes effect on the
effective date of the policy unless a later effective date is shown above. In
this rider, "we", "us" or "our" means Chubb Life Insurance Company of America;
"you" means the Owner of the policy; and "Insured" means the person named on
Page 3 of the policy.
Consideration - In return for the payment of the monthly deductions and receipt
of an application for this rider, we will provide the benefit described in this
rider.
Benefit - Upon receipt of proof of death of the Insured, while this rider is in
force and before the Expiry Date, we will pay the named beneficiary the Rider
Death Benefit on the date of death. In addition, this rider modifies the Death
Benefit of the policy as stated below.
Total Death Benefit - The Total Death Benefit payable under this rider and the
policy to which it is attached depends on the Death Benefit Option for the
policy in effect on the date of death. The Death Benefit Option for the policy
is shown on Page 3.
Option I - Under Option I, the Total Death Benefit shall be the greater of:
(1) The Specified Amount of the policy, plus the Specified Amount of this rider;
or
(2) The Accumulated Value on the date of death multiplied by the corridor
percentage shown in the policy to which this rider is attached.
Option II - Under Option II, the Total Death Benefit shall be the greater of:
(1) The Specified Amount of the policy, plus the Specified Amount of this
rider, plus the Accumulated Value of the policy on the date of death; or
(2) The Accumulated Value on the date of death multiplied by the corridor
percentage shown in the policy to which this rider is attached.
Total Amount at Risk - The Total Amount at Risk for the policy and this rider is
equal to the Total Death Benefit less the Accumulated Value of the policy.
Rider Death Benefit - The Specified Amount of this rider is shown on Page 3 of
the policy. The initial Rider Death Benefit is equal to the Specified Amount of
this rider. On any later date, the Rider Death Benefit will be the lesser of:
(1) The Specified Amount of this rider; or
(2) The Total Amount at Risk for the policy and this rider, but not less than
zero.
Policy Death Benefit - The Policy Death Benefit is equal to the Total Death
Benefit less the Rider Death Benefit.
Monthly Deduction - The monthly deduction for this rider will be (a) multiplied
by (b), divided by $1,000, where:
(a) is the monthly cost of insurance rate for this rider; and
(b) is the Rider Death Benefit.
P93-54 6550001
<PAGE>
Expiry Date - The Expiry Date of this rider is shown on Page 3 of the policy.
Conversion Privilege - The amount of Rider Death Benefit may be converted to an
increase of the Specified Amount in the policy at any time prior to the
Insured's age 85, while this rider is in force. The amount converted is not to
exceed the Specified Amount of this rider as shown on Page 3 of the policy. The
increase will be issued without evidence of insurability. Issue will be subject
to the conditions set forth below.
Conversion Conditions - Conversion to an increase of the Specified Amount in the
policy shall be subject to the following conditions:
(1) Proper written application for the increase must be made by you to our Home
Office.
(2) The Accumulated Value of the policy must be sufficient to cover the
additional monthly deduction for the increase.
(3) The effective date of the increase shall be the date of termination of this
rider.
(4) The rates for the increase will be the current cost of insurance rates for
the policy at the Insured's attained age and rating class at the time of the
increase.
(5) The suicide and contestability period of the increase will begin on the
effective date of the policy or the effective date of this rider, if later.
Cost of Insurance Rates - The monthly cost of insurance rate for this rider is
based on the policy year and the sex and rating class of the Insured. Monthly
cost of insurance rates, which are determined by us based upon future
expectations, include charges for mortality experience, amortized sales charges,
and other administrative charges. Any change in cost of insurance rates will
apply to all individuals of the same rating class as the Insured. We will
consider changes in the cost of insurance rates at least every five years and
when cost of insurance rates for new issues change. However, the cost of
insurance rates can never be greater than those shown in the Table of Monthly
Guaranteed Cost of Insurance rates on Page 4 of the policy. Such guaranteed
maximum rates are based on the 1980 CSO Smoker or Nonsmoker Mortality Table,
with appropriate increases for rated risks.
Termination - This rider will cease as soon as one of the following occurs:
(1) The monthly deduction for this rider remains unpaid at the end of the Grace
Period; or
(2) The policy is surrendered, exchanged, or lapsed; or
(3) The Expiry Date of this rider is attained; or
(4) The date of this rider is converted; or
(5) We receive a proper written request to terminate this rider.
/s/ /s/ Frederick H. Condon
President Secretary
P93-54 6550001
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
WAIVER OF SPECIFIED PREMIUM RIDER
Effective Date -
This rider is part of the policy to which it is attached. It takes effect on the
effective date of the policy unless a later effective date is shown above. In
this rider, "we", "us", or "our" means Chubb Life Insurance Company of America;
"you" means the Owner of the policy; and "Insured" means the person named on
Page 3 of the policy as Insured under this rider.
Consideration - In return for the payment of the monthly deductions and receipt
of an application for this rider, we will provide the benefit described in this
rider.
Benefit - We will pay the specified monthly premium (as applied for by the
policyowner, as shown on Page 3 of the policy) for the policy to which this
rider is attached, starting with the monthly anniversary day following
commencement of Total Disability, while the Insured under this rider is totally
disabled. We must receive due proof of the Insured's Total Disability commencing
prior to the policy anniversary nearest the Insured's attained age 60 while this
rider is in force, and that Total Disability has continued with no interruption
for at least six months.
Total Disability - Disability is total in the first two years if the Insured is
wholly unable to do any of the main tasks of his or her regular job at the time
of commencement of Total Disability, and is not working at any other job. After
two years, disability is total if the Insured is wholly unable to do any work
for which he or she is fitted by knowledge, training, or prior skill, and is not
working at any other job.
A disability will be deemed total from the date it starts when it has gone on
without a break for six months.
The following losses will be considered Total Disability as long as the loss
continues, whether or not the Insured is working:
(1) The sight of both eyes;
(2) The use of both hands;
(3) The use of both feet; or
(4) The use of one hand and one foot.
These losses must not have existed prior to the effective date of the policy
or the effective date of this rider, if later.
Risks Not Assumed - We will not pay the specified monthly premium for the policy
to which this rider is attached if:
(1) Total Disability commenced prior to the effective date of the policy.
(2) Total Disability commenced during the Grace Period, as defined in the
policy, and the policy subsequently lapsed.
(3) Total Disability is a direct result of intentional self inflicted injury,
whether the Insured is sane or insane.
(4) Total Disability is the result of an act of war while the Insured is serving
in the military, naval, or air forces of any country at war, declared or
undeclared.
<PAGE>
Reinstatement - If the Insured becomes totally and permanently disabled in the
Grace Period, as defined in the policy, and remains so past the end of the Grace
Period, the policy will lapse. The policy may be reinstated while the Insured
remains totally disabled if:
(1) The conditions contained in the Reinstatement provision of the policy are
met;
(2) Written notice of claim is received by us within one year from the
commencement of the Grace Period; and
(3) Proof that disability began during the Grace Period is received by us within
one year from the end of the Grace Period.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b) where:
(a) is the waiver of specified premium rate shown on the attached table;
(b) is the specified monthly premium (as shown on Data Page 3).
The waiver of specified premium rate is based on the attained age of the Insured
and the rating class for this rider. Waiver of specified premium rates for
standard rider issues are shown on the attached table. Appropriate increases
will be made to these rates for rated risks.
Monthly Deductions Not Deducted - Any specified monthly premium paid for the
policy to which this rider is attached will not reduce the proceeds to be paid
under the policy. You will remain liable to pay interest on any debt to us.
Notice of Claim - Written notice of claim and proof of Total Disability must be
given to us at our Home Office. Such notice and proof must be given during the
lifetime of the Insured during the period of Total Disability. Such notice and
proof must be furnished not later than one year after the policy anniversary
nearest the Insured's attained age 60 while this rider is in force.
Failure to give such notice and proof will not invalidate or diminish any claim
if it is shown that notice and proof were given as soon as was reasonably
possible. Subject to this condition, no specified monthly premium, the due
date of which is more than twelve months prior to the date of receipt at the
Home Office of written notice of claim, will be paid for the policy to which
this rider is attached.
Proof of Disability - At reasonable intervals we will have the right to require
due proof of the continuance of Total Disability. Proof must be furnished to us
on our forms. As a part of such proof, the disabled Insured may be required to
be examined by a physician chosen by us at our expense. After the first two
years of Total Disability, proof will not be required more than once a year.
Specified monthly premium payments for the policy to which this rider is
attached cease when:
(1) Total Disability ceases;
(2) Proof of the continuance of Total Disability is not furnished as required;
or
(3) The Insured will not submit to an examination.
Termination - This rider will cease as soon as one of the following occurs:
(1) The monthly deduction for this rider remains unpaid at the end of the Grace
Period.
(2) The policy is surrendered, exchanged, or lapsed.
(3) We receive a proper written request to terminate this rider.
(4) The policy anniversary nearest attained age 60 of the Insured is attained.
(5) The maturity date of the policy is attained.
(6) The death of the Insured.
/s/ /s/ Frederick H. Condon
President Secretary
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
<TABLE>
<CAPTION>
TABLE OF MONTHLY WAIVER OF SPECIFIED PREMIUM RATES PER $1.00
ATTAINED AGE MALE FEMALE
<S> <C> <C>
15-27 .0122 .0260
28-37 .0141 .0304
38 .0153 .0328
39 .0166 .0353
40 .0182 .0379
41 .0200 .0406
42 .0221 .0435
43 .0244 .0464
44 .0270 .0494
45 .0300 .0525
46 .0333 .0557
47 .0370 .0589
48 .0410 .0622
49 .0454 .0656
50 .0502 .0690
51 .0554 .0725
52 .0609 .0760
53 .0668 .0795
54 .0731 .0831
55 .0797 .0868
56 .0866 .0906
57 .0938 .0944
58 .1013 .0983
59 .1089 .1024
60 .1168 .1066
</TABLE>
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
GUARANTEED DEATH BENEFIT RIDER
Effective Date -
This Rider is part of the policy to which it is attached. It takes effect on the
Policy Date of the policy unless a later effective date is shown above. In this
rider, "we", "us", or "our" means the Chubb Life Insurance Company of America;
"you" means the Owner of the policy; and "Insured" means the person named on
Page 3 of the policy.
Consideration - In return for the payment of the monthly deductions and receipt
of any application for this rider, we will provide the benefit described in this
rider.
Benefit - We guarantee that the death benefit of the policy will be no less than
the Specified Amount, regardless of the investment experience of the divisions
within the Separate Account, provided that the cumulative minimum premium
requirements have been satisfied.
This Rider has no loan value and no surrender value.
Cumulative Minimum Premium Requirement - On each monthly anniversary day, we
will determine if the cumulative minimum premium requirement for this rider has
been met. The cumulative minimum premium requirement is met provided that
(a) is greater than or equal to (b), where:
(a) is the sum of all previous premium payments under the policy less any policy
loans or withdrawals; and
(b) is the minimum premium, as shown on Page 3 of the policy, divided by twelve,
multiplied by the number of completed policy months.
If this requirement has been met, the policy is guaranteed to remain in force
during the next policy month. If this requirement is not met, we will notify you
of the premium payments required in order to continue benefits under this rider.
A grace period of 61 days will be provided. If the necessary premiums are not
received during this grace period, this rider will terminate without value.
Any increase in the Specified Amount will require an increase in the minimum
premium. The cumulative minimum premium requirement will be the sum of the
minimum premium requirements for the Initial Specified Amount and each
respective increase to the Specified Amount. The portion of the minimum premium
associated with any increase in the Specified Amount will be based on the
attained age of the Insured as of the date of increase.
Monthly Deduction - The monthly deduction for this rider will be (a), multiplied
by (b), divided by $1,000, where:
(a) is the Specified Amount of the policy; and
(b) is $0.01.
Termination - This Rider will cease as soon as one of the following occurs:
(1) The cumulative minimum premium requirement remains unsatisfied at the end of
the Grace Period.
(2) The policy is surrendered, exchanged, or lapsed.
(3) The Maturity Date of the policy is attained.
(4) We receive a proper written request to terminate this rider.
/s/ Theresa M. Stone /s/ Frederick H. Condon
President Secretary
P94-64
<PAGE>
Exhibit 3
OPINION OF COUNSEL
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
March 19, 1996
Chubb Life Insurance Company of America
One Granite Place
Concord, New Hampshire 03301
Gentlemen:
This opinion is furnished in connection with the filing by Chubb Life Insurance
Company of America ("Chubb Life") of Post-Effective Amendment No. 12 to its
Registration Statement on Form S-6 under the Securities Act of 1933 (the "Act")
of interests in Chubb Separate Account A (the "Separate Account") under its
variable life insurance policies (the "Policies"). This opinion covers both the
individual flexible premium variable life insurance policy and the survivorship
flexible premium variable life insurance policy.
I am familiar with the terms of the Policies and the Post-Effective Amendment
No. 12 to the Registration Statement and the Exhibits hereto. I have also
examined all such corporate records of Chubb Life and such other documents and
laws as I considered appropriate as a basis for the opinion hereinafter
expressed. On the basis of such examination, it is my opinion that:
1. Chubb Life is a corporation duly organized and validly existing under the
laws of the State of New Hampshire.
2. The Separate Account is a separate account of Chubb Life validly existing
pursuant to the New Hampshire Insurance Code and the regulations issued
thereunder, under which income, gains and losses, whether or not realized, from
assets allocated to the Separate Account, are, in accordance with the Policies,
credited to or charged against the Separate Account without regard to other
income, gains or losses of Chubb Life.
3. Assets allocated to the Separate Account will be owned by Chubb Life; Chubb
Life is not a trustee with respect thereto. The Policies proved that the portion
of the assets of the Separate Account equal to the reserves and other Policy
liabilities with respect to the Separate Account will not be Chargeable with
liabilities arising out of any other business Chubb Life may conduct. Chubb
Life reserves the right to transfer assets of the Separate Account in excess of
such reserves and other Policy liabilities to the general account of Chubb Life.
Chubb Life America is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance Company
of America
Chubb Sovereign Life Insurance Company
<PAGE>
Chubb Life Insurance Company of America
March 19, 1996
Page Two
4. The Policies (including any units duly credited thereunder) have been duly
authorized by Chubb Life and, when issued and sold in jurisdictions that have
approved the policy form for sale in accordance with the insurance law of that
jurisdiction, each of the Policies (including any such units) will constitute
validly issued and binding obligations of Chubb Life in accordance with its
terms. Purchasers of the Policies are subject only to the deductions, charges
and fees set forth in the Prospectus.
I hereby consent to the filing of this opinion as an Exhibit to the Post-
Effective Amendment No. 2 to the Registration Statement of the Separate Account
filed under the Act.
Sincerely,
/s/ Shari J. Lease
Assistant Vice President and Counsel
SJL/lkp
<PAGE>
Exhibit 6
ACTURIAL OPINION AND CONSENT
OF
MICHAEL J. LEBOEUF, FA, MAAA
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
March 19, 1996
Chubb Life Insurance Company of America
Post Office Box 515
Concord, New Hampshire 03301
Gentlemen:
This opinion is furnished in connection with the filing of the registration
statement of Chubb Life Insurance Company of America ("Chubb") on Form S-6,
("Registration Statement") of interests in Chubb Separate Account A ("Separate
Account A") under its variable life insurance policies (the "Policies"). This
opinion covers both the individual flexible premium variable life insurance
policy, and the survivorship flexible premium variable life insurance policy
("Chubb Ensemble II").
I am familiar with the terms of the Policies and the Registration Statement and
the Exhibits thereto. In my opinion:
1. The illustrations of death benefits, accumulation value, and cash value
for the Policies in Appendix A of the prospectus, based on the
assumptions stated in the illustrations, are consistent with the
provisions of the Policies.
The Policies have not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear
disproportionately more favorable to prospective purchasers of Policies
for the age(s), gender(s), smoking status(es), and underwriting
class(es) illustrated in Appendix A than to prospective purchasers of
Policies for other age(s), gender(s), smoking status(es), and
underwriting class(es) . The particular illustrations shown were not
selected for the purpose of making this relationship appear more
favorable. Generally, the rates for non-smokers are lower than for
smokers and the rates for females are lower than for males.
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America . The Colonial Life Insurance Company
of America
Chubb Sovereign Life Insurance Company
<PAGE>
March 12, 1996
Page Two
2. The illustrations of death benefits, accumulation value and cash value
for the Policies, set forth in Appendix A of the prospectus, based on
the net return of the five divisions of Separate Account A and the
assumptions stated within the examples, are consistent with the
provisions of the Policies.
The illustrations in Appendix A. have not been designed so as to make
the relationships between premiums and benefits appear
disproportionately more favorable to prospective purchasers of Policies
for age(s), gender(s), smoking status(es), and underwriting class(es)
illustrated in appendix A than to prospective purchasers of Policies
for other age(s), gender(s), smoking status(es), and underwriting
class(es). Generally, the rates for non-smokers are lower than for
smokers and the rates for females are lower than for males.
3. The illustrations set forth in Appendix A of the prospectus contain
both the current and guaranteed rates of cost of insurance charges to
be used for those Policies.
These rates have not been designed so as to make the relationships
between current and guaranteed rates appear disproportionately more
favorable to prospective purchasers of Policies for the age(s),
gender(s), smoking status(es) and underwriting class(es) illustrated in
Appendix A than to prospective purchasers of policies for other age(s),
gender(s), smoking status(es), and underwriting class(es). The
particular illustrations shown were not selected for the purpose of
making this relationship appear more favorable. Generally, the rates
for non-smokers are lower than for smokers and the rates for females
are lower than for males.
I hereby consent to the use of this opinion as an Exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.
Sincerely,
Michael J. LeBoeuf, FA, MALA
Assistant Vice President
and Product Actuary
MAL/lkp
<PAGE>
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 5, 1996 for Chubb Life Insurance Company of
America and Subsidiaries and March 8, 1996 for Chubb Separate Account A in
Post-Effective Amendment No. 12 to the Registration Statement (Form S-6
No. 33-7734) and related Prospectus for the registration of units of interest in
the Chubb Separate Account A under individual flexible premium variable life
insurance policies offered by Chubb Life Insurance Company of America.
ERNST & YOUNG LLP
Boston, Massachusetts
April 16, 1996
<PAGE>
Exhibit 9
SPECIMEN NOTICE OF RIGHT OF WITHDRAWAL
PURSUANT TO RULE 6e-3(T)(b)(13)(viii)
<PAGE>
NOTICE OF THE RIGHT OF WITHDRAWAL
Volunteer State Life Insurance Company
P. 0. Box 1369
Chattanooga, Tennessee 37401
Re: Policy Number:
Insured's Name:
Plan Name: Ensemble II
Premium Frequency:
Planned Periodic Premium: $
This Notice is sent to you in accordance with the laws administered by the
United States Securities and Exchange Commission ("SEC"). Please read it
carefully and retain it with your important records.
You have recently purchased a variable life insurance policy from Volunteer
State Life Insurance Company under which benefits depend on the investment
experience of Separate Account A. You have, pursuant to requirements of the SEC
and your policy, the right to examine and return your policy for cancellation,
and receive a full refund of all premiums paid, at any time within 10 days from
delivery of the policy or 45 days from the date of Part I of the application,
whichever is later, but in any event you have until 10 days from the date of
mailing of this notice, as determined by its postmark, or personal delivery to
return the policy for cancellation. Accompanying your policy will be an
illustration of the way in which the death benefit, accumulation value and cash
value under your policy will vary to reflect investment experience by Separate
Account A.
In determining whether or not to exercise your right, you should consider,
among other things, the projected cost of your policy and your ability to make
payments for life as they may become necessary. Your policy provides for
payments as stated above. Also you have already been furnished a prospectus
which describes the charges assessed against your policy. Please see the
enclosed document that refers to these charges.
Should you decide to exercise this right of cancellation, complete the
enclosed form and return your policy in accordance with the enclosed
instructions, postmarked on or before the latest date permitted for cancellation
as described above.
John Wells
Assistant Vice President
Policy Service
<PAGE>
NOTICE OF THE RIGHT OF WITHDRAWAL
Volunteer State Life Insurance Company
P. 0. Box 1369
Chattanooga, Tennessee 37401
Re: Policy Number:
Insured's Name:
Plan Name: Ensemble II
Premium Frequency:
Planned Periodic Premium: $
This Notice is sent to you in accordance with the laws administered by the
United States Securities and Exchange Commission ("SEC"). Please read it
carefully and retain it with your important records.
You have recently purchased a variable life insurance policy from Volunteer
State Life Insurance Company under which benefits depend on the investment
experience of Separate Account A. You have, pursuant to requirements of the SEC
and your policy, the right to examine and return your policy for cancellation,
and receive a full refund of all premiums paid, at any time within 10 days from
delivery of the policy or 45 days from the date of Part 1 of the application,
whichever is later, but in any event you have until 10 days from the date of
mailing of this notice, as determined by its postmark, or personal delivery to
return the policy for cancellation. Accompanying your policy will be an
illustration of the way in which the death benefit, accumulation value and cash
value under your policy will vary to reflect investment experience by Separate
Account A.
In determining whether or not to exercise your right, you should consider,
among other things, the projected cost of your policy and your ability to make
payments for life as they may become necessary. Your policy provides for
payments as stated above. Also you have already been furnished a prospectus
which describes the charges assessed against your policy. Please see the
enclosed document that refers to these charges.
Should you decide to exercise this right of cancellation, complete the
enclosed form and return your policy in accordance with the enclosed
instructions, postmarked on or before the latest date permitted for cancellation
as described above.
John Wells
Assistant Vice President
Policy Service
<PAGE>
Exhibit 10
REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS
REGARDING MORTALITY AND RISK CHARGE
PURSUANT TO RULE 6e-3 (T) (b) (13) (iii) (F)
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
REPRESENTATIONS, DESCRIPTION AND
UNDERTAKINGS PURSUANT TO
RULE 6E-3(T) (b) (13) (iii) (F) UNDER
THE INVESTMENT COMPANY ACT OF 1940
The Colonial Life Insurance Company of America ("Colonial"), on behalf of
Colonial Separate Account A, makes the following representations:
1. Section 6e3(T) (b) (13) (iii) (F) is being relied upon.
2. The level of mortality and expense risk charge is reasonable in relation to
the risks assumed and is within the range of industry practice for
comparable contracts.
3. The methodology used to support the representation made in paragraph (2)
above is based on an analysis of the mortality and expense risk charges
being made in relation to the risks assumed, as well as those in comparable
flexible premium contracts filed with the Commission. Colonial undertakes
to keep and make available to the Commission on request the documents used
to support the representation in paragraph (2) above.
4. Chubb has concluded that there is a reasonable likelihood that the
distribution financing arrangement will benefit Separate Account A and
policy owners. Chubb undertakes to keep and make to the Commission on
request the memorandum setting forth the basis for this representation.
5. Chubb represents that Chubb Separate Account A will invest only in
management investment companies which have undertaken to have a board of
directors, a majority of whom are not interested persons of the company,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
-------------------------------
Michael J. LeBoeuf, FSA, MAAA
Assistant Vice President and
Product Actuary
Chubb LifeAmerica is the servicemark of
Chubb Life Insurance Company of America
The Colonial Life Insurance Company of America
Chubb Soveriegn Life Insurance Company
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby Constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
2/22/96 /s/ John C. Beck
- ------------------------ ------------------------------------
(Date) (Signature)
John C. Beck
------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
21 FEB 96 /s/ Percy Chubb V
- ----------------------------- ------------------------------------
(Date) (Signature)
Percy Chubb V
------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
February 23, 1996 /s/ Joel J. Cohen
- ----------------------------- -----------------------------------
(Date) (Signature)
Joel J. Cohen
-----------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
2 - 25 - 96 /s/ Henry V. Harder
- ----------------------------- --------------------------------------
(Date) (Signature)
Henry V. Harder
--------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
Feb 22, 1996 /s/ David H. Hoag
- ----------------------------- ------------------------------------
(Date) (Signature)
David H. Hoag
------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
March 1, 1996 /s/ Robert V. Lindsay
- ----------------------------- -------------------------------------
(Date) (Signature)
Robert V. Lindsay
-------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
March 1, 1996 /s/ Thomas C. MacAvoy
- ----------------------------- -----------------------------------
(Date) (Signature)
Thomas C. MacAvoy
-----------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
Feb 23, 1996 /s/ Gertrude G. Michelson
- ----------------------------- -----------------------------------
(Date) (Signature)
Gertrude G. Michelson
-----------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
March 1, 1996 /s/ Dean R. O'Hare
- ----------------------------- -------------------------------------
(Date) (Signature)
Dean R. O'Hare
-------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
2/21/96 /s/ Warren B. Rudman
- ----------------------------- -----------------------------------
(Date) (Signature)
Warren B. Rudman
-----------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
23.FEB.96 /s/ Sir David Gerald Scholey
- ----------------------------- ------------------------------------
(Date) (Signature)
Sir David Gerald Scholey
------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
February 26, 1996 /s/ Raymond G.H. Leitz
- ----------------------------- --------------------------------------
(Date) (Signature)
Raymond G.H. Leitz
---------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
2/22/96 /s/ Lawrence M. Small
- ----------------------------- ------------------------------------
(Date) (Signature)
Lawrence M. Small
------------------------------------
(Please Print or Type Name)
<PAGE>
POWER OF ATTORNEY
-----------------
I, the undersigned, hereby constitute and appoint Frederick H. Condon,
Theresa M. Stone and Richard V. Werner, each of them, my true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and all
capacities to sign registration statements, pre-effective amendments and post-
effective amendments to registration statements on Form S-6 under the Securities
Act of 1933 and to file the same, or cause the same to be filed, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission. I further grant unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in the exercise of
the powers herein granted, as fully as I could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or any of their substitutes, may lawfully do or cause to be done by the
powers herein granted.
Feb. 22, 1996 /s/ Richard D. Wood
- ----------------------------- ----------------------------------
(Date) (Signature)
Richard D. Wood
----------------------------------
(Please Print or Type Name)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> WORLD GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 64,572,886
<INVESTMENTS-AT-VALUE> 73,692,356
<RECEIVABLES> 3,234,707
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 76,927,063
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 75,619
<TOTAL-LIABILITIES> 75,619
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 67,731,974
<SHARES-COMMON-STOCK> 2,561,179<F1>
<SHARES-COMMON-PRIOR> 2,123,894<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,119,470
<NET-ASSETS> 76,851,444<F3>
<DIVIDEND-INCOME> 3,151,912
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 607,380
<NET-INVESTMENT-INCOME> 2,544,532
<REALIZED-GAINS-CURRENT> 1,175,160
<APPREC-INCREASE-CURRENT> 6,318,978
<NET-CHANGE-FROM-OPS> 10,038,670
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,715,142
<NUMBER-OF-SHARES-REDEEMED> 1,277,857
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,575,187
<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> 607,380
<AVERAGE-NET-ASSETS> 66,063,850
<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
<FN>
<F1>Common Stock: Ensemble 59,238
Ensemble II 2,501,941
<F2>Common Stock Prior: Ensemble 61,884
Ensemble II 2,062,010
<F3>Net Assets: Ensemble 1,822,626
Ensemble II 75,028,818
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> MONEY MARKET DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 8,550,714
<INVESTMENTS-AT-VALUE> 8,312,676
<RECEIVABLES> 486,030
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,798,706
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,036,744
<SHARES-COMMON-STOCK> 569,338<F1>
<SHARES-COMMON-PRIOR> 468,285<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (238,038)
<NET-ASSETS> 8,798,706<F3>
<DIVIDEND-INCOME> 401,686
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 70,796
<NET-INVESTMENT-INCOME> 330,890
<REALIZED-GAINS-CURRENT> 118,929
<APPREC-INCREASE-CURRENT> (132,246)
<NET-CHANGE-FROM-OPS> 317,573
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,688,778
<NUMBER-OF-SHARES-REDEEMED> 1,587,725
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,846,357
<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> 70,796
<AVERAGE-NET-ASSETS> 7,875,528
<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
<FN>
<F1>Common Stock: Ensemble 4,305
Ensemble II 565,033
<F2>Common Stock Prior: Emsemble 6,329
Ensemble II 461,956
<F3>Net Assets: Ensemble 68,283
Ensemble II 8,730,423
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> GOLD STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 6,331,508
<INVESTMENTS-AT-VALUE> 6,867,645
<RECEIVABLES> 23,827
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,891,472
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (24,036)
<TOTAL-LIABILITIES> (24,036)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,379,371
<SHARES-COMMON-STOCK> 430,217<F1>
<SHARES-COMMON-PRIOR> 386,030<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 536,137
<NET-ASSETS> 6,915,508<F3>
<DIVIDEND-INCOME> 37,550
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 67,504
<NET-INVESTMENT-INCOME> (29,954)
<REALIZED-GAINS-CURRENT> 172,991
<APPREC-INCREASE-CURRENT> 91,937
<NET-CHANGE-FROM-OPS> 234,974
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 371,551
<NUMBER-OF-SHARES-REDEEMED> 327,364
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 821,429
<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> 67,504
<AVERAGE-NET-ASSETS> 6,504,794
<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
<FN>
<F1>Common Stock Ensemble 11,251
Ensemble II 418,966
<F2>Common Stock Prior Ensemble 12,075
Ensemble II 373,955
<F3>Net Assets Ensemble 185,468
Ensemble II 6,730,040
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> DOMESTIC GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 41,547,976
<INVESTMENTS-AT-VALUE> 48,517,886
<RECEIVABLES> 6,122,076
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 54,639,962
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 116,093
<TOTAL-LIABILITIES> 116,093
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 47,553,959
<SHARES-COMMON-STOCK> 1,698,061<F1>
<SHARES-COMMON-PRIOR> 1,290,152<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,969,910
<NET-ASSETS> 54,523,869<F3>
<DIVIDEND-INCOME> 7,085,674
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 376,813
<NET-INVESTMENT-INCOME> 6,708,861
<REALIZED-GAINS-CURRENT> 194,361
<APPREC-INCREASE-CURRENT> 3,886,548
<NET-CHANGE-FROM-OPS> 10,789,770
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 917,824
<NUMBER-OF-SHARES-REDEEMED> 509,915
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,295,945
<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> 376,813
<AVERAGE-NET-ASSETS> 43,375,897
<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
<FN>
<F1>Common Stock Ensemble 25,007
Ensemble II 1,673,054
<F2>Common Stock Prior Ensemble 26,636
Ensemble II 1,263,516
<F3>Net Assets Ensemble 824,059
Ensemble II 53,699,810
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> BOND DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9,070,739
<INVESTMENTS-AT-VALUE> 9,230,090
<RECEIVABLES> 645,736
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,875,826
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,716,475
<SHARES-COMMON-STOCK> 520,242<F1>
<SHARES-COMMON-PRIOR> 735,955<F2>
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 159,351
<NET-ASSETS> 9,875,826<F3>
<DIVIDEND-INCOME> 644,900
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 85,025
<NET-INVESTMENT-INCOME> 559,875
<REALIZED-GAINS-CURRENT> 129,555
<APPREC-INCREASE-CURRENT> 722,365
<NET-CHANGE-FROM-OPS> 1,411,795
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 672,153
<NUMBER-OF-SHARES-REDEEMED> 887,866
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2,198,207)
<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> 85,025
<AVERAGE-NET-ASSETS> 10,974,930
<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
<FN>
<F1>Common Stock: Ensemble 1,335
Ensemble II 518,907
<F2>Common Stock Prior: Ensemble 1,723
Ensemble II 734,232
<F3>Net Assets: Ensemble 26,004
Ensemble II 9,849,822
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> GROWTH AND INCOME DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 11,461,493
<INVESTMENTS-AT-VALUE> 12,787,993
<RECEIVABLES> 568,545
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,356,538
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,931
<TOTAL-LIABILITIES> 30,931
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,999,107
<SHARES-COMMON-STOCK> 841,523
<SHARES-COMMON-PRIOR> 382,844
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,326,500
<NET-ASSETS> 13,325,607
<DIVIDEND-INCOME> 514,461
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 72,581
<NET-INVESTMENT-INCOME> 441,880
<REALIZED-GAINS-CURRENT> 43,900
<APPREC-INCREASE-CURRENT> 1,598,713
<NET-CHANGE-FROM-OPS> 2,084,493
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 730,636
<NUMBER-OF-SHARES-REDEEMED> 271,957
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,745,871
<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> 72,581
<AVERAGE-NET-ASSETS> 8,952,672
<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>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> CAPITAL GROWTH DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 40,073,244
<INVESTMENTS-AT-VALUE> 49,618,795
<RECEIVABLES> 4,648,444
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 54,267,239
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 131,600
<TOTAL-LIABILITIES> 131,600
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44,590,088
<SHARES-COMMON-STOCK> 2,588,397
<SHARES-COMMON-PRIOR> 1,780,412
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,545,551
<NET-ASSETS> 54,135,639
<DIVIDEND-INCOME> 4,538,514
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 343,782
<NET-INVESTMENT-INCOME> 4,194,732
<REALIZED-GAINS-CURRENT> 331,997
<APPREC-INCREASE-CURRENT> 9,191,593
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