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As filed with the Securities and Exchange Commission on April 24, 1996
FILE NO. 33-7734
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 13
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, 1997 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, 1996 on February 27,
1997.
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 Fund, 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, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
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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....................................................... 16
Reinstatement...................................................... 16
Policy "Free Look"................................................. 16
CHARGES AND DEDUCTIONS............................................... 16
Premium Charges.................................................... 16
Monthly Deduction.................................................. 16
Risk Charge........................................................ 17
Surrender Charge................................................... 17
Administrative Fees................................................ 19
Other Charges...................................................... 19
POLICY BENEFITS AND RIGHTS........................................... 19
Death Benefits..................................................... 19
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........................................................ 23
Net Investment Factor.............................................. 23
CASH VALUE BENEFITS.................................................. 23
Surrender Privileges............................................... 24
Policy Loans....................................................... 24
</TABLE>
<TABLE>
<CAPTION>
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<S> <C>
OTHER MATTERS........................................................ 26
Voting Rights...................................................... 26
Additions, Deletions or Substitutions of Investments............... 26
Annual Summary..................................................... 26
Confirmation....................................................... 26
Limitation on Right to Contest..................................... 27
Misstatements...................................................... 27
Suicide............................................................ 27
Beneficiaries...................................................... 27
Postponement of Payments........................................... 27
Assignment......................................................... 27
Illustration of Benefits and Values................................ 27
Non-Participating Policy........................................... 28
THE GENERAL ACCOUNT.................................................. 28
General Description................................................ 28
The Policy......................................................... 28
General Account Benefits........................................... 28
General Account Accumulation Value................................. 28
Determination of Charges........................................... 29
Premium Deposit Fund............................................... 29
DISTRIBUTION OF THE POLICY........................................... 29
Group or Sponsored Arrangements.................................... 30
MANAGEMENT OF CHUBB LIFE............................................. 31
Executive Officers and Directors of Chubb Life..................... 31
STATE REGULATION OF CHUBB LIFE....................................... 33
FEDERAL TAX MATTERS.................................................. 33
Tax Considerations................................................. 33
Policy Proceeds.................................................... 33
Charge for Chubb Life Income Taxes................................. 35
EMPLOYEE BENEFIT PLANS............................................... 36
LEGAL PROCEEDINGS.................................................... 36
EXPERTS.............................................................. 36
REGISTRATION STATEMENT............................................... 36
FINANCIAL STATEMENTS................................................. 36
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
Prospectus, 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
application. 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
surrender 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
Separate 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
policy 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
subsequently changed.
Policy date--The date set forth in the Policy. If money is received, it is
the later of the date of application or the date of any required medical
examination. If no money is received, the Policy Date is the Issue Date. The
policy date is the date from which policy years, policy months, and policy
anniversaries will be determined. 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,
commencing at the close of regular trading on the New York Stock Exchange on
each valuation 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
4
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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 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 nine separate series, eight of which
offer two classes of shares; one series (Templeton International Fund: Class 1)
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 accompany 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 if any premiums, scheduled or
unscheduled, 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".
5
<PAGE>
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.
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, subject to
the following conditions:
1. Any requested decrease in Specified Amount, which may only be made after
a Policy has been in force for one year, 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, which may be made at any
time after the Policy has been issued, 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. The effective date
of the change from Option I to Option II will be the monthly anniversary date
that coincides with or next follows the date of underwriter approval. 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 the change from Option
II to Option I will 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
6
<PAGE>
(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".
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%.
7
<PAGE>
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 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
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 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
POLICY--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, 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, including 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 regard 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. Effective April 30, 1997, Chubb Life, formerly a
wholly-owned subsidiary of the Chubb Corporation, became a wholly-owned
subsidiary of Jefferson-Pilot Corporation, a North Carolina corporation. The
principal offices of Jefferson-Pilot Corporation are located at 100 North
Greene Street, Greensboro, North Carolina 27401. Its telephone number is 910-
691-3000. 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, 1996, of
$4,731,819,000 and had over $68 billion of insurance in force, while total
assets of Jefferson-Pilot Corporation, as of the same date, were approximately
$17.5 billion.
Chubb Life writes individual life insurance and annuities. It is subject to
New Hampshire law governing insurance, and is regulated and supervised by the
New Hampshire Insurance Commissioner. Contemporaneous with its sale to
Jefferson-Pilot Corporation, Chubb Life is currently rated AA (Excellent) 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.
9
<PAGE>
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 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. (formerly known as Templeton, Galbraith & Hansberger Ltd.)
("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.
10
<PAGE>
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.
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 nine separate series, eight of which offer two classes of shares;
however, only one of the series, the Templeton International Fund: Class 1,
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, on an annual basis,
represents .75% of the average daily net assets of the Fund up to $200
million, .675% of such assets from $200 million up to $1.3 billion, and .60%
of such assets in excess of $1.3 billion 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.
11
<PAGE>
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 in state 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 detailed
information concerning each Portfolio, including a description of the
investment risks, reference is made to the prospectuses for the Funds which
accompany 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
insurance 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 Policy 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
Policies 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 revise 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
required by the Code. The premium limitations under the Policy are imposed in
order 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 limitation, 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 allowed 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, however, 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
Allocation Date among the General Account and the divisions of Separate
Account A in accordance with the directions of the policyowner, as contained
in the application. 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 Allocation 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 5%. 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
13
<PAGE>
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.
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
14
<PAGE>
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.
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 12 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
diminish 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 5% 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 reestablishing 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 readjusted 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 twelve 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
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<PAGE>
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 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 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
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<PAGE>
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 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 Chubb'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
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<PAGE>
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.
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.
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<PAGE>
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 12 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
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. 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 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>
19
<PAGE>
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 monthly
anniversary date that coincides with or next follows 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
monthly anniversary date that coincides with or next follows the date of Chubb
Life's underwriter 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.
The policyowner, under attained age 85, may adjust the existing insurance
coverage by increasing the Specified Amount at any time after the Policy has
been issued. After a Policy has been in force for one year, the policyowner,
under attained age 85, may adjust the existing insurance coverage by
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 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
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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.
(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. 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
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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.
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.
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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
division 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 division 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 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
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Policy. The cash value equals the accumulation value less any surrender
charge. In addition, the policyowner has certain policy loan privileges under
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
sending 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. Proceeds will generally be paid within seven days of the Date of
Receipt of a request 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 Policy. 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 $500.
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
accumulation value will be reduced by the amount of the withdrawal plus a pro-
rata surrender 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.
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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
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.
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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 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;
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(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.
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. See "FEDERAL TAX MATTERS."
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. 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."
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<PAGE>
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.
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 between the
date the premium is received (or the policy date, whichever is 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. No interest 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; interest 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
insurance 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
Account 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
either death benefit Option I or II under the Policy and may change the
Policy's Specified Amount subject to satisfactory evidence of insurability, if
required.
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
payments deposited in the General Account, plus interest earned, will be
allocated among the divisions of Separate Account A and the General Account as
instructed 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
premium 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
accumulation 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 interest in excess of 4 1/2% per year, and might not do so. ANY
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<PAGE>
INTEREST CREDITED 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 DISCRETION 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 interest daily at the lesser of an effective annual rate of 6% per
year or the interest 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
accumulation 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
interest which Chubb Life credits and any amounts transferred into the General
Account, 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 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
principal underwriter. Chubb Securities Corporation is a New Hampshire
corporation organized in 1969. Chubb Securities Corporation is registered with
the Securities 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 Dealers, Inc. Commissions are payable under various schedules and
accordingly will vary with the form of commission schedule selected, but, in
any event, are not expected to exceed 80% of first year gross premiums and 19%
of gross premiums for the second through fifteenth policy years. Alternative
commission schedules will reflect differences in up-front commissions versus
ongoing asset-based compensation. Ongoing asset-based compensation will vary
with the accumulation value less policy debt used to calculate such
compensation amounts. 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 $22,502,715 in 1996, $15,333,468 in 1995 and $15,190,893 in
1994. Chubb Life reimburses Chubb Securities Corporation for its expenses
under the Distribution Agreement.
Chubb Securities Corporation is engaged in the sale and distribution of
various other securities, including other flexible premium variable life
policies. It acts as principal underwriter for other flexible premium variable
life policies and variable annuity contracts issued by Chubb Life (and its
affiliated insurance companies), and for the Chubb America Fund, Inc. and the
Chubb Investment 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 insurance laws and regulations to sell insurance
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<PAGE>
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
arrangement" includes a program under which a trustee, employer or similar
entity purchases 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.
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.
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<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
James I. Cash.......... Professor
Harvard Business School
Soldiers Field Road
Boston, Massachusetts 02163
*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
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
Sir David G. Scholey, Chairman
CBE.................... S.G. Warburg Group plc
One Finsbury Avenue
London EC2M 2PA England
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME BUSINESS ADDRESS
- ---- ------------------------
<S> <C>
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
Charles C. Cornelio....... Executive Vice President, Assistant Secretary and
Chief Administrative 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
Vincent G. Mace, Jr. ..... Senior Vice President and Group Actuary
Michael O'Reilly.......... Senior Vice President
Warren L. Reynolds........ Senior Vice President
Paul J. Strong............ Senior Vice President
John W. Wells............. Senior Vice President
Thomas M. Bodrogi......... Vice President
Margaret O. Cain.......... Vice President
Rebecca M. Clark.......... Vice President
Mark Connolly............. Vice President
Ronald H. Emery........... Vice President
J. Michael Gannon......... Vice President, Counsel
Ned I. Gerstman........... Vice President
Donald M. Kane............ Vice President
Patrick A. Lang........... Vice President
Deborah A. Leitch......... Vice President
Sandra MacIntyre.......... Vice President
Edward C. MacKenzie....... Vice President
Donna L. Metcalf.......... Vice President
Thomas E. Murphy, Jr.,
M.D. .................... Vice President and Associate Medical Director
Kenneth L. Robinson, Jr. . Vice President
James M. Sandelli......... Vice President
Russell C. Simpson........ Vice President and Treasurer
William A. Spencer........ Vice President
William H. Tate........... Vice President
John A. Thomas............ Vice President
Ernest J. Tsouros......... Vice President
David G. Underwood, MD.... Vice President and Medical Director
</TABLE>
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<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 contract 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 administrative 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 prospective 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 unless the policyowner requests a
refund of the excess premium, as outlined above. 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.
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, pledge, assignment or partial withdrawal. Any such
distributions will be considered taxable income to the extent accumulated
value under the policy exceeds investment in the policy.
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<PAGE>
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, as defined above, 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 to the extent that accumulation value exceeds investment in the
policy, as described above. 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, 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.
34
<PAGE>
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.
In 1996 Congress amended the Code to clarify the tax treatment of accelerated
benefits. Effective January 1, 1997, Section 101(g) of the Code now provides
that accelerated death benefits may be excluded from gross income provided
that certain conditions are met. Chubb believes that the Terminal Illness
Accelerated Benefit Rider meets those conditions. In addition, the legislation
clarified the status of such riders under Section 7702 of the Code, including
that the inclusion or conformance of any rider to the law's requirements does
not constitute a material change for purposes of the definition of life
insurance or modified endowment contracts.
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.
35
<PAGE>
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, 1996 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.
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.
In the second quarter of 1996, the Company announced a plan to exit the group
health insurance business. A definitive agreement was reached May 31, 1996
with Healthsource Inc. under which Healthsource acquired the Company's 85%
interest in Chubb Health, Inc. The sale was completed on December 31, 1996.
The Company also discontinued the marketing of traditional group health
indemnity business.
During the fourth quarter of 1996, the Company's parent, The Chubb
Corporation, announced its intention to evaluate its strategic alternatives
with respect to the life insurance companies, including the possible sale or
spin-off of the business. The Chubb Corporation entered into a definitive
agreement dated February 23, 1997 to sell the Company to Jefferson-Pilot
Corporation for $875,000,000. The sale was effective April 30, 1997.
36
<PAGE>
REPORT OF 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, 1996 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, 1996 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
March 5, 1997
F-1
<PAGE>
CONSOLIDATED BALANCE SHEET
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
ASSETS
Invested assets (Note 4)
Fixed maturities, held-to-maturity, at amortized cost............. $ 381,230
Fixed maturities, available-for-sale, at market................... 2,498,281
Equity securities, at market...................................... 30,681
Short term investments, at cost................................... 48,333
Policy loans...................................................... 217,857
Mortgage loans on real estate..................................... 8,945
----------
Total invested assets............................................... 3,185,327
----------
Accrued investment income........................................... 52,473
Uncollected premiums................................................ 5,782
Reinsurance recoverable on life and health policy liabilities....... 190,505
Deferred policy acquisition costs (Note 5).......................... 644,653
Value assigned purchased insurance in force (Note 5)................ 34,460
Goodwill, net of accumulated amortization of $24,253................ 63,196
Property and equipment, net of accumulated depreciation of $50,609.. 37,835
Receivable--sale of subsidiary (Note 3)............................. 25,647
Separate account assets............................................. 401,430
Other assets........................................................ 90,511
----------
1,546,492
----------
Total assets........................................................ $4,731,819
==========
LIABILITIES
Policy liabilities
Policy fund balances.............................................. $2,415,001
Future policy benefits............................................ 636,283
Policy and contract claims........................................ 72,422
Premiums paid in advance.......................................... 1,628
Other policyholders' funds........................................ 105,322
----------
3,230,656
Mortgage loan payable (Note 13)..................................... 4,369
Loans payable (Note 13)............................................. 50,500
Federal income taxes payable (Note 6)............................... 10,364
Deferred federal income taxes (Note 6).............................. 53,583
Separate account liabilities........................................ 401,430
Net liabilities of discontinued operations.......................... 18,499
Accrued expenses and other liabilities (Note 7,8)................... 96,388
----------
Total liabilities................................................... 3,865,789
Commitments and contingent liabilities (Note 10,14)
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 4).............. 17,622
Retained earnings................................................. 595,536
----------
Total shareholder's equity.......................................... 866,030
----------
Total liabilities and shareholder's equity.......................... $4,731,819
==========
</TABLE>
See accompanying notes.
F-2
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
REVENUES
Premiums and policy charges (Note 11)............................... $337,782
Net investment income (Note 4)...................................... 236,482
Realized investment gains (Note 4).................................. 12,587
Other income........................................................ 2,945
--------
Total revenues........................................................ 589,796
BENEFITS, CLAIMS AND EXPENSES
Policy benefits and claims.......................................... 304,780
Change in reserves for future policy benefits....................... 16,034
--------
320,814
EXPENSES
Commissions and other operating expenses............................ 95,034
Amortization........................................................ 99,313
--------
194,347
--------
Total benefits, claims and expenses................................... 515,161
--------
Income from continuing operations before federal income tax........... 74,635
Federal income tax (benefit) (Note 6)
Current............................................................. 31,100
Deferred............................................................ (6,001)
--------
25,099
--------
Income from continuing operations..................................... 49,536
Discontinued operations (Note 3):
Loss from operations, net of tax.................................... (1,045)
--------
Net income............................................................ $ 48,491
========
</TABLE>
See accompanying notes.
F-3
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<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.......................................... 40,720
Change, net (Note 4)................................................ (23,098)
--------
Balance, end of year................................................ 17,622
--------
Retained earnings
Balance, beginning of year.......................................... 551,053
Net income.......................................................... 48,491
Dividends to parent................................................. (4,008)
--------
Balance, end of year................................................ 595,536
--------
Total shareholder's equity............................................ $866,030
========
</TABLE>
See accompanying notes.
F-4
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net income.......................................................... $ 48,491
Adjustments to reconcile net income to net cash used in operating
activities:
Increase in future policy benefits, policy and contract claims and
premiums paid in advance, net.................................... 1,299
Decrease in uncollected premiums.................................. 5,234
Increase in policy acquisition costs deferred, net of
amortization..................................................... (56,603)
Net amortization of value assigned purchased insurance in force... 4,249
Increase in accrued investment income............................. (6,473)
Realized investment gains......................................... (12,587)
Accretion of investment discounts................................. (3,264)
Provision for depreciation........................................ 7,442
Provision for deferred income tax................................. (6,001)
Increase in federal income tax payable............................ 1,531
Other, net........................................................ (15,445)
---------
Net cash used in operating activities............................... (32,127)
INVESTING ACTIVITIES
Proceeds from sales of fixed maturities............................. 360,570
Proceeds from maturities of fixed maturities........................ 184,065
Proceeds from sales of equity securities............................ 56,355
Purchases of fixed maturities....................................... (815,231)
Purchases of equity securities...................................... (44,327)
Decrease in short term investments, net............................. 4,505
Policy loans issued, net of repayments.............................. (15,152)
Mortgage loans, net................................................. 711
Other, net.......................................................... (1,147)
---------
Net cash used for investing activities.............................. (269,651)
FINANCING ACTIVITIES
Deposits credited to policyholders' funds........................... 460,687
Withdrawals from policyholders' funds............................... (165,283)
Mortgage debt principal payments.................................... (843)
Dividends to Parent................................................. (4,008)
Increase in loans payable........................................... 14,500
Decrease in cash overdraft.......................................... (3,275)
---------
Net cash provided by financing activities........................... 301,778
Increase in cash.................................................... 0
---------
Cash, beginning and end of year (Note 1)............................ $ 0
=========
</TABLE>
See accompanying notes.
F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP) and include
the accounts of Chubb Life Insurance Company of America (the Company) and its
subsidiaries. Principal subsidiaries include Chubb Colonial Life Insurance
Company (Colonial), Chubb Sovereign Life Insurance Company (Sovereign), Chubb
America Service Corporation and Chubb Investment Advisory Corporation.
Significant intercompany transactions have been eliminated in consolidation.
Chubb Life Insurance Company of America is wholly-owned by The Chubb
Corporation (the Parent). On February 23, 1997, The Chubb Corporation entered
into a definitive agreement to sell its life and health subsidiaries to
Jefferson-Pilot Corporation. (see Note 15).
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.
The Company is principally engaged in the sale of individual life insurance
and investment products. These products are marketed primarily through
personal producing general agents throughout the United States.
In the second quarter of 1996, the Company adopted a plan to exit the group
insurance business. Accordingly, the group insurance business has been
classified as discontinued operations in the consolidated financial
statements. (see Note 3).
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.
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 eighteen 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 statement 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% to 6 7/8%.
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 6 3/4%.
F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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.
Ceded 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.
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 1/4% to 9
1/2%. Value assigned purchased insurance in force related to universal life
and investment contracts also is 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.
F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 date.
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 of investments classified
as available-for-sale, net of the deferred policy aquisition costs adjustment
discussed above and the applicable deferred income tax, is excluded from
income and credited or charged directly to a separate component of
shareholder's equity.
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 classified as available-for-sale
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.
F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
. 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,
1996 were as follows:
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Invested assets
Fixed maturities
Held-to-maturity................................ $ 381,230 $ 398,909
Available-for-sale.............................. 2,498,281 2,498,281
Equity securities................................ 30,681 30,681
Short term investments........................... 48,333 48,333
Policy loans..................................... 217,857 217,857
Mortgage loans on real estate.................... 8,945 8,945
LIABILITIES
Loans payable..................................... 50,500 50,500
</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, 1996 were $19,530,000.
2. CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1996, the Company adopted 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. The adoption of SFAS 121 did not have an impact on net income.
3. DISCONTINUED OPERATIONS
In the second quarter of 1996, the Company adopted a plan to exit the group
health insurance business. Formerly, this business was the Company's group
insurance business segment.
Marketing of traditional group health business was discontinued. Due to
various contractual and regulatory requirements, traditional group coverages
will be renewed in certain jurisdictions until an orderly transition to
another carrier or termination of coverage can occur. It is expected that the
exit from this business will be completed by the end of 1998.
F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
3. DISCONTINUED OPERATIONS (CONTINUED)
Managed care products were sold through ChubbHealth, Inc. (CHI), a health
maintenance organization (HMO). CHI commenced operations in the New York City
metropolitan area on June 1, 1994. ChubbHealth Holdings, Inc. (Holdings) owned
100% of CHI and was jointly owned by the Company and Healthsource Metropolitan
New York Holding Company, Inc., formerly known as Healthsource New York, Inc.
(Healthsource). The Company owned 85% of the outstanding stock of Holdings at
December 31, 1995.
On May 31, 1996 the Company entered into a definitive agreement to sell its
interest in CHI to Healthsource for $25,647,000 in cash. The sale was
completed effective December 31, 1996 and the cash settlement was received on
January 6, 1997.
The sale resulted in an after tax gain of approximately $15,000,000 which
was substantially offset by estimated costs relating to the exit from the
remaining group insurance business. The discontinued group insurance business
had no effect on net income after April 1, 1996. It is expected that the
discontinued group insurance business will not affect the Company's net income
significantly in the future.
The identifiable assets and liabilities of the group insurance business
included in the accompanying consolidated balance sheet at December 31, 1996,
by the respective category, were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
ASSETS
<S> <C>
Uncollected premium..................................... $ 3,742
Reinsurance recoverable on life and health policy
liabilities............................................ 1,753
Other assets............................................ 8,414
-------
$13,909
=======
LIABILITIES
Future policy benefits.................................. $ 9,294
Policy and contract claims.............................. 50,311
Premiums paid in advance................................ 1,047
Accrued expenses and other liabilities.................. 5,660
-------
$66,312
=======
</TABLE>
In addition to the assets and liabilities above, sufficient invested assets
were held for the payment of group insurance liabilities. It is not
practicable to segregate the specific invested assets associated with those
liabilities.
The results of discontinued operations for the three months ended March 31,
1996 included in the consolidated statement of income were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Revenues.................................................. $58,902
Benefits, claims and expenses............................. 60,816
-------
Loss from operations before income tax benefit............ (1,914)
Income tax benefit........................................ (656)
-------
Loss from discontinued operations before minority interest
in subsidiary............................................ (1,258)
Minority interest in net loss of consolidated subsidiary.. (213)
-------
Loss from discontinued operations......................... $(1,045)
=======
</TABLE>
Loss before income tax benefits for discontinued operations reflect
allocations of investment income and expenses using allocation methods deemed
to be reasonable. Other acceptable allocation methods could produce different
results.
F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
4. INVESTED ASSETS
The sources of net investment income from continuing operations for the year
ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Fixed maturities........................................... $215,117
Equity securities.......................................... 3,505
Short term investments..................................... 3,444
Policy loans............................................... 15,275
Mortgage loans............................................. 914
Other...................................................... 515
--------
Gross investment income.................................. 238,770
Investment expenses........................................ 2,288
--------
Net investment income.................................... $236,482
========
</TABLE>
Realized investment gains and losses for the year ended December 31, 1996
were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Gross realized investment gains
Fixed maturities......................................... $ 9,455
Equity securities........................................ 6,898
-------
$16,353
=======
Gross realized investment losses
Fixed maturities......................................... $ 1,774
Equity securities........................................ 1,992
-------
$ 3,766
=======
Net realized investment gains
Fixed maturities......................................... $ 7,681
Equity securities........................................ 4,906
-------
$12,587
=======
</TABLE>
Proceeds from the sales of fixed maturities considered available-for-sale
were $360,570,000. Gross gains of $9,455,000 and gross losses of $1,774,000
were realized on such sales in 1996.
F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
4. INVESTED ASSETS (CONTINUED)
The components of unrealized appreciation (depreciation) of investments
classified as available-for-sale at December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Equity securities
Gross unrealized appreciation............................ $ 3,797
Gross unrealized depreciation............................ 323
--------
3,474
--------
Fixed maturities
Gross unrealized appreciation............................ 71,332
Gross unrealized depreciation............................ 16,499
--------
54,833
--------
58,307
--------
Deferred policy acquisition costs adjustment............... (29,414)
Value assigned purchased insurance in force adjustment..... (1,783)
--------
(31,197)
--------
27,110
Deferred tax liability, net................................ 9,488
--------
$ 17,622
========
</TABLE>
The changes in unrealized appreciation or depreciation of investments
classified as available-for-sale for the year ended December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Change in unrealized appreciation of equity securities.... $ (2,405)
Change in unrealized appreciation of fixed maturities..... (47,181)
Change in deferred policy acquisition costs adjustment.... 12,436
Change in value assigned purchased insurance in force ad-
justment................................................. 1,614
--------
(35,536)
Deferred income tax credit................................ (12,438)
--------
$(23,098)
========
</TABLE>
F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
4. INVESTED ASSETS (CONTINUED)
The cost of equity securities was $27,207,000 at December 31, 1996.
The amortized costs and estimated market value of fixed maturities at
December 31, 1996 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................... $ 967 $ 27 $ $ 994
---------- ------- ------- ----------
Taxable
U.S. Government and government
agency and authority
obligations..................... 17,426 1,339 7 18,758
Corporate bonds.................. 174,817 14,339 189,156
Foreign bonds.................... 15,000 2,109 17,109
Mortgage-backed securities....... 173,020 2,208 2,336 172,892
---------- ------- ------- ----------
Total taxable...................... 380,263 19,995 2,343 397,915
---------- ------- ------- ----------
Total held-to-maturity............. 381,230 20,022 2,343 398,909
---------- ------- ------- ----------
AVAILABLE-FOR-SALE
Taxable
U.S. Government and government
agency and authority
obligations..................... 205,577 1,711 658 206,630
Corporate bonds.................. 1,170,611 34,332 10,974 1,193,969
Foreign bonds.................... 153,757 8,310 883 161,184
Mortgage-backed securities....... 911,248 26,791 3,887 934,152
Redeemable preferred stocks...... 2,255 188 97 2,346
---------- ------- ------- ----------
Total available-for-sale........... 2,443,448 71,332 16,499 2,498,281
---------- ------- ------- ----------
Total fixed maturities............. $2,824,678 $91,354 $18,842 $2,897,190
========== ======= ======= ==========
</TABLE>
The unrealized appreciation or depreciation of fixed maturities classified
as held-to-maturity are not reflected in the financial statements. The change
in net unrealized appreciation of such fixed maturities was depreciation of
$13,754,000 for the year ended December 31, 1996.
The amortized cost and estimated market value of fixed maturities at
December 31, 1996 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.............. $ 10,026 $ 10,207 $ 10,240 $ 10,266
Due after one year through five
years............................... 63,785 68,892 257,205 266,921
Due after five years through ten
years............................... 75,743 81,875 445,479 456,299
Due after ten years.................. 58,656 65,043 819,276 830,643
-------- -------- ---------- ----------
Subtotal........................... 208,210 226,017 1,532,200 1,564,129
Mortgage-backed securities........... 173,020 172,892 911,248 934,152
-------- -------- ---------- ----------
$381,230 $398,909 $2,443,448 $2,498,281
======== ======== ========== ==========
</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.
F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
5. 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, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Balance, beginning of year................................ $575,614
Cost deferred during year................................. 149,481
Amortization during year.................................. (92,878)
Change in adjustment to reflect the effects of unrealized
depreciation of investments.............................. 12,436
--------
Balance, end of year...................................... $644,653
========
</TABLE>
Changes in the value assigned purchased insurance in force for the year
ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Balance, beginning of year................................ $37,095
Accrued interest.......................................... 3,094
Amortization.............................................. (7,343)
Change in adjustment to reflect the effects of unrealized
depreciation of investments.............................. 1,614
-------
Balance, end of year...................................... $34,460
=======
</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:
1997..................................................... $ 3,670
1998..................................................... 3,227
1999..................................................... 2,764
2000..................................................... 2,462
2001..................................................... 2,347
Subsequent to 2001......................................... 19,990
-------
$34,460
=======
</TABLE>
6. FEDERAL INCOME TAXES
Federal income tax provisions for the year ended December 31, 1996 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%)............. $26,122
Dividends received deduction and tax exempt income......... (1,441)
Amortization of goodwill................................... 394
Foreign taxes.............................................. (451)
Other...................................................... 475
-------
Federal income tax expense............................... $25,099
=======
</TABLE>
F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
6. FEDERAL INCOME TAXES (CONTINUED)
The tax effects of temporary differences that gave rise to deferred income
tax liabilities and assets at December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Deferred income tax liabilities:
Deferred policy acquisition costs........................ $167,655
Value assigned purchased insurance in force.............. 19,753
Unrealized appreciation in investments................... 20,407
Other.................................................... 10,323
--------
Total.................................................. 218,138
Deferred income tax assets:
Future policy benefits and policy fund balances.......... 156,427
Postretirement benefits.................................. 8,128
--------
Total.................................................. 164,555
--------
Net deferred income tax liabilities........................ $ 53,583
========
</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, 1996, 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 1996 were $29,569,000.
7. PENSIONS
In 1996, the Company's pension plans were merged into the pension plan of
the Parent. The Parent's plan covers substantially all employees. Pension
costs allocated to the Company for the year ended December 31, 1996, were
$1,500,000. The costs were offset by a net curtailment gain of $1,322,000,
resulting from workforce reductions. This gain was 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.
8. OTHER POSTRETIREMENT BENEFITS
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.
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, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Service cost of current period............................. $1,076
Interest cost on accumulated benefit obligation............ 1,613
------
Net postretirement benefit cost............................ $2,689
======
</TABLE>
F-15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
8. OTHER POSTRETIREMENT BENEFITS (CONTINUED)
During 1996, the Company recognized a net curtailment gain of $648,000
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, 1996 were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Retirees.................................................. $ 9,399
Fully eligible active plan participants................... 1,001
Other active plan participants............................ 10,160
-------
Accumulated postretirement benefit obligation............. 20,560
Unrecognized net gain from past experience different from
that assumed............................................. 3,609
-------
Postretirement benefit liability included in other liabil-
ities.................................................... $24,169
=======
</TABLE>
The weighted average discount rate used in determining the actuarial present
value of the accumulated postretirement benefit obligation at December 31,
1996 was 7 3/4%. The health care cost trend rate used to measure the
accumulated postretirement cost for medical benefits is 11 3/4% for 1997. The
rate is assumed to decrease gradually to 6% for the year 2008 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, 1996 by
$3,445,000 and the aggregate of the service and interest cost components of
net postretirement benefit cost for the year ended December 31, 1996 by
$451,000.
9. 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 $3,414,000 for the year ended
December 31, 1996.
10. 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
$4,708,000 for 1996. All leases are operating leases and generally contain
renewal options. At December 31, 1996, future minimum rental payments required
under noncancellable operating leases were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Year Ending December 31:
1997..................................................... $ 3,341
1998..................................................... 2,560
1999..................................................... 1,916
2000..................................................... 1,449
2001..................................................... 1,334
Subsequent to 2001......................................... 5,715
-------
$16,315
=======
</TABLE>
F-16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
11. 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 $98,716,000 at December 31, 1996. 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 $191,878,000 at December 31, 1996. 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, 1996 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....................... $335,376 $18,818 $1,607 $318,165
Accident and Health Insurance........ 28,824 9,207 19,617
-------- ------- ------ --------
Total Premiums and Policy Charges.... $364,200 $28,025 $1,607 $337,782
======== ======= ====== ========
</TABLE>
Reinsurance recoveries which have been deducted from benefits, claims and
expenses in the consolidated statement of income was $46,093,000 in 1996.
12. 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, 1996 is as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
GAAP....................................................... $866,030
Statutory.................................................. 328,327
</TABLE>
A comparison of GAAP and statutory net income for the year ended December
31, 1996 is as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
GAAP....................................................... $48,491
Statutory.................................................. 33,988
</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
1997 is approximately $32,800,000.
13. DEBT AND CREDIT ARRANGEMENTS
The Company has a loan agreement with a bank providing for a revolving line
of credit of $60,000,000 at a variable interest rate. There were $50,500,000
in borrowings against this line of credit at December 31, 1996. Interest paid
on these borrowings was $968,000 in 1996.
F-17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
13. DEBT AND CREDIT ARRANGEMENTS (CONTINUED)
During 1996, the Company borrowed in the short term commercial paper market.
These notes were issued by Chubb Capital Corporation, a subsidiary of the
Parent. The interest rate was variable and was based on Chubb Capital
Corporation's cost of funds. The outstanding balance of commercial paper was
repaid in the fourth quarter of 1996. The agreement remains in effect at
December 31, 1996. Interest paid on the borrowings in 1996 was $1,206,000.
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:
1997..................................................... $ 944
1998..................................................... 1,057
1999..................................................... 1,184
2000..................................................... 1,184
------
$4,369
======
</TABLE>
Interest paid on the mortgage loan in 1996 was $550,000.
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.
15. SUBSEQUENT EVENT RELATING TO CHANGE IN OWNERSHIP
The Company's Parent, The Chubb Corporation, entered into a definitive
agreement, dated February 23, 1997, to sell the Company to Jefferson-Pilot
Corporation for $875,000,000 in cash, subject to various closing adjustments
and other customary conditions. The sale is subject to regulatory approvals
and is expected to be completed by the end of the second quarter of 1997.
F-18
<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,
Templeton Division, Fidelity Contrafund Division, Fidelity High Income
Division, and Fidelity Index 500 Division) as of December 31, 1996, 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 year ended December 31, 1996 and the period
from May 1, 1995 (Commencement of Operations) to December 31, 1995 and the
Fidelity Contrafund Division, Fidelity High Income Division, and Fidelity
Index 500 Division, for which the statement of operations and statement of
changes in net assets are for the period from May 2, 1996 (Commencement of
Operations) to December 31, 1996. 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, 1996,
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, 1996, 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 14, 1997
F-19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1996
<TABLE>
<CAPTION>
WORLD DOMESTIC
GROWTH MONEY GOLD GROWTH GROWTH CAPITAL
STOCK MARKET STOCK STOCK BOND AND INCOME GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------ ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at cost..... $ 75,586,446 $ 8,153,659 $ 7,349,426 $55,587,093 $11,923,217 $19,472,547 $64,236,841
============ =========== =========== =========== =========== =========== ===========
Investments at market
value.................. $ 91,995,634 $ 7,896,257 $ 7,555,873 $62,166,365 $11,717,693 $23,299,173 $70,571,585
Accrued investment
income................. 7,106,756 387,924 196,148 7,630,014 669,587 1,103,890 11,990,229
Net premiums receivable
(payable).............. (10,083) (273,026) 1,368 240,910 2,334 (15,822) 106,056
Redemptions payable to
Chubb Life............. -- -- -- -- (44,727) (13,843) --
------------ ----------- ----------- ----------- ----------- ----------- -----------
99,092,307 8,011,155 7,753,389 70,037,289 12,344,887 24,373,398 82,667,870
============ =========== =========== =========== =========== =========== ===========
Receivable from Chubb
America Fund, Inc...... -- -- -- -- 44,727 13,843 --
------------ ----------- ----------- ----------- ----------- ----------- -----------
TOTAL NET ASSETS.... $ 99,092,307 $ 8,011,155 $ 7,753,389 $70,037,289 $12,389,614 $24,387,241 $82,667,870
============ =========== =========== =========== =========== =========== ===========
NET ASSET DISTRIBUTION
Ensemble.............. $ 1,880,567 $ 74,608 $ 165,345 $ 858,207 $ 24,792
Ensemble II........... 97,211,740 7,936,547 7,588,044 69,179,082 12,364,822 $24,387,241 $82,667,870
------------ ----------- ----------- ----------- ----------- ----------- -----------
TOTAL NET ASSETS.... $ 99,092,307 $ 8,011,155 $ 7,753,389 $70,037,289 $12,389,614 $24,387,241 $82,667,870
------------ ----------- ----------- ----------- ----------- ----------- -----------
UNITS OUTSTANDING
Ensemble.............. 51,583 4,522 9,838 22,498 1,250
Ensemble II........... 2,743,775 495,273 464,691 1,867,603 641,453 1,264,705 3,344,862
NET ASSET VALUE PER UNIT
Ensemble.............. $ 36.457 $ 16.499 $ 16.807 $ 38.146 $ 19.834
Ensemble II........... 35.430 16.025 16.329 37.042 19.276 $ 19.283 $ 24.715
</TABLE>
See notes to financial statements.
F-20
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1996
<TABLE>
<CAPTION>
EMERGING TEMPLETON FIDELITY FIDELITY FIDELITY
BALANCED GROWTH INTERNATIONAL CONTRA HIGH INCOME INDEX 500
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------- ----------- ------------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at cost..... $17,248,488 $24,652,972 $19,581,399 $4,542,514 $2,705,728 $6,860,548
=========== =========== =========== ========== ========== ==========
Investments at market
value................... $18,029,841 $26,215,352 $22,717,525 $4,931,474 $2,812,388 $7,421,550
Accrued investment
income.................. 1,457,951 792,235 0 0 0 0
Net premiums receivable
(payable)............... (2,271) 50,877 104,839 31,051 6,813 106,035
----------- ----------- ----------- ---------- ---------- ----------
19,485,521 27,058,464 22,822,364 4,962,525 2,819,201 7,527,585
Amounts payable for
units redeemed.......... 0 0 0 0 0 0
----------- ----------- ----------- ---------- ---------- ----------
TOTAL NET ASSETS..... $19,485,521 $27,058,464 $22,822,364 $4,962,525 $2,819,201 $7,527,585
=========== =========== =========== ========== ========== ==========
NET ASSET DISTRIBUTION
Ensemble
Ensemble II............ $19,485,521 $27,058,464 $22,822,364 $4,962,525 $2,819,201 $7,527,585
----------- ----------- ----------- ---------- ---------- ----------
TOTAL NET ASSETS..... $19,485,521 $27,058,464 $22,822,364 $4,962,525 $2,819,201 $7,527,585
=========== =========== =========== ========== ========== ==========
UNITS OUTSTANDING
Ensemble
Ensemble II............ 1,272,168 1,746,963 1,668,063 444,719 262,053 660,083
NET ASSET VALUE PER UNIT
Ensemble
Ensemble II............ $ 15.317 $ 15.489 $ 13.682 $ 11.159 $ 10.758 $ 11.404
</TABLE>
See notes to financial statements.
F-21
<PAGE>
STATEMENTS OF OPERATIONS
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
WORLD GROWTH STOCK DIVISION MONEY MARKET DIVISION GOLD STOCK DIVISION
----------------------------------- ----------------------------- --------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------------- ----------------------------- --------------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income... $ 1,896,674 $ 1,504,890 $ 677,535 $387,924 $ 401,686 $227,166 $ -- $ 37,550 $ 9,726
Distributions of
realized gains.... 5,766,822 1,647,022 2,617,290 -- -- -- 196,148 -- 39,947
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
7,663,496 3,151,912 3,294,825 387,924 401,686 227,166 196,148 37,550 49,673
Expenses:
Mortality and
expense risk
charge............ 786,314 607,380 432,600 76,879 70,796 58,706 75,213 67,504 58,273
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
Net Investment
Income (Loss)... 6,877,182 2,544,532 2,862,225 311,045 330,890 168,460 120,935 (29,954) (8,600)
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
Gain (loss) on
investments:
Net realized gain
on investments.... 607,700 1,175,160 920,083 16,652 118,929 49,632 236,329 172,991 122,084
Change in net
unrealized gain
(loss) on
investments....... 7,289,718 6,318,978 (6,066,376) (19,364) (132,246) (57,699) (329,690) 91,937 (1,174,863)
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
Net gain (loss)
on investments.... 7,897,418 7,494,138 (5,146,293) (2,712) (13,317) (8,067) (93,361) 264,928 (1,052,779)
----------- ----------- ----------- -------- --------- -------- --------- -------- -----------
Increase
(Decrease) in
Net Assets from
Operations...... $14,774,600 $10,038,670 $(2,284,068) $308,333 $ 317,573 $160,393 $ 27,574 $234,974 $(1,061,379)
=========== =========== =========== ======== ========= ======== ========= ======== ===========
</TABLE>
See notes to financial statements.
F-22
<PAGE>
STATEMENTS OF OPERATIONS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK DIVISION BOND DIVISION GROWTH AND INCOME DIVISION
---------------------------------- ------------------------------- -------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
---------------------------------- ------------------------------- -------------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income.... $ 201,993 $ 404,753 $ 180,735 $ 635,318 $ 644,900 $ 420,955 $ 245,874 $ 128,853 $ 51,623
Distributions of
realized gains..... 8,608,137 6,680,921 2,374,949 34,269 -- -- 858,016 385,608 142,202
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
8,810,130 7,085,674 2,555,684 669,587 644,900 420,955 1,103,890 514,461 193,825
Expenses:
Mortality and
expense risk
charge............. 578,387 376,813 247,394 97,066 85,025 54,890 160,389 72,581 27,333
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
Net Investment
Income (Loss).... 8,231,743 6,708,861 2,308,290 572,521 559,875 366,065 943,501 441,880 166,492
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
Gain (loss) on
investments:
Net realized gain
(loss) on
investments........ 821,643 194,361 358,705 37,510 129,555 (85,477) 317,839 43,900 15,866
Change in net
unrealized gain
(loss) on
investments........ (390,637) 3,886,548 (753,758) (364,875) 722,365 (455,167) 2,500,125 1,598,713 (368,658)
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
Net gain (loss) on
investments........ 431,006 4,080,909 (395,053) (327,365) 851,920 (540,644) 2,817,964 1,642,613 (352,792)
---------- ----------- ---------- --------- ---------- --------- ---------- ---------- ---------
Increase
(Decrease) in Net
Assets from
Operations....... $8,662,749 $10,789,770 $1,913,237 $ 245,156 $1,411,795 $(174,579) $3,761,465 $2,084,493 $(186,300)
========== =========== ========== ========= ========== ========= ========== ========== =========
</TABLE>
See notes to financial statements.
F-23
<PAGE>
STATEMENTS OF OPERATIONS--- (CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
CAPITAL GROWTH DIVISION BALANCED DIVISION EMERGING GROWTH DIVISION
------------------------------------ -------------------------------- -------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------ --------------------------------
PERIOD FROM
MAY 1, 1995(A)
YEAR TO
ENDED DECEMBER 31,
1996 1995 1994 1996 1995 1994 1996 1995
----------- ----------- ----------- ---------- ---------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income........ $ 205,917 $ 82,406 $ 50,583 $ 390,626 $ 448,590 $ 275,218 $ -- $ --
Distributions of
realized gains......... 13,379,557 4,456,108 617,006 1,233,056 831,663 93,822 816,743 0
----------- ----------- ----------- ---------- ---------- --------- ---------- --------
13,585,474 4,538,514 667,589 1,623,682 1,280,253 369,040 816,743 0
Expenses:
Mortality and expense
risk charge............ 634,806 343,782 180,001 160,537 110,589 67,423 156,489 11,735
----------- ----------- ----------- ---------- ---------- --------- ---------- --------
Net Investment Income
(Loss)............... 12,950,668 4,194,732 487,588 1,463,145 1,169,664 301,617 660,254 (11,735)
----------- ----------- ----------- ---------- ---------- --------- ---------- --------
Gain (loss) on
investments:
Net realized gain
(loss) on investments.. 704,194 331,997 88,882 151,391 56,294 (8,145) 349,647 17,701
Change in net
unrealized gain (loss)
on investments......... (3,210,806) 9,191,593 (1,243,197) (17,988) 1,204,925 (456,921) 1,103,470 458,910
----------- ----------- ----------- ---------- ---------- --------- ---------- --------
Net gain (loss) on
investments............ (2,506,612) 9,523,590 (1,154,315) 133,403 1,261,219 (465,066) 1,453,117 476,611
----------- ----------- ----------- ---------- ---------- --------- ---------- --------
Increase (Decrease)
in Net Assets from
Operations........... $10,444,056 $13,718,322 $ (666,727) $1,596,548 $2,430,883 $(163,449) $2,113,371 $464,876
=========== =========== =========== ========== ========== ========= ========== ========
</TABLE>
- -----
(a) Commencement of operations
See notes to financial statements.
F-24
<PAGE>
STATEMENTS OF OPERATIONS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
TEMPLETON INTERNATIONAL FIDELITY CONTRA- FIDELITY HIGH FIDELITY
DIVISION FUND DIVISION INCOME DIVISION INDEX 500 DIVISION
-------------------------- ---------------- --------------- ------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
MAY 1, 1995 (A) MAY 2, 1996 (A) MAY 2, 1996 (A) MAY 2, 1996 (A)
YEAR TO TO TO TO
ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1996 1996
---------- --------------- ---------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income........ $ 159,471 $ -- $ -- $ -- $ --
Distributions of
realized gains......... 46,512 -- -- -- --
---------- -------- -------- -------- --------
205,983 -- -- -- --
Expenses:
Mortality and expense
risk charge............ 143,239 28,459 13,294 9,027 18,598
---------- -------- -------- -------- --------
Net Investment Income
(Loss)............... 62,744 (28,459) (13,294) (9,027) (18,598)
---------- -------- -------- -------- --------
Gain (loss) on
investments:
Net realized gain on
investments............ 267,958 316,398 3,889 25,826 24,088
Change in net
unrealized gain (loss)
on investments......... 2,779,085 357,041 388,960 106,660 561,002
---------- -------- -------- -------- --------
Net gain (loss) on
investments............ 3,047,043 673,439 392,849 132,486 585,090
---------- -------- -------- -------- --------
Increase in Net
Assets from
Operations........... $3,109,787 $644,980 $379,555 $123,459 $566,492
========== ======== ======== ======== ========
</TABLE>
- -----
(a) Commencement of operations
See notes to financial statements.
F-25
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
WORLD GROWTH STOCK DIVISION MONEY MARKET DIVISION GOLD STOCK DIVISION
------------------------------------- ---------------------------------- ----------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------- ---------------------------------- ----------------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
Operations:
Net investment
income (loss)... $ 6,877,182 $ 2,544,532 $ 2,862,225 $ 311,045 $ 330,890 $ 168,460 $ 120,935 $ (29,954) $ (8,600)
Net realized
gain on
investments..... 607,700 1,175,160 920,083 16,652 118,929 49,632 236,329 172,991 122,084
Change in net
unrealized gain
(loss) on
investments..... 7,289,718 6,318,978 (6,066,376) (19,364) (132,246) (57,699) (329,690) 91,937 (1,174,863)
----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Increase
(decrease) in net
assets from
operations....... 14,774,600 10,038,670 (2,284,068) 308,333 317,573 160,393 27,574 234,974 (1,061,379)
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 21,940,124 22,926,705 20,141,970 4,466,621 4,965,203 6,850,296 1,687,557 2,002,953 1,974,134
Transfers
from/to General
Account and
within Separate
Account, net.... (3,897,681) (1,635,218) 2,759,340 (4,354,762) (2,593,015) (2,828,836) 202,817 (360,212) 112,918
Transfers of
cost of
insurance....... (7,361,182) (6,834,515) (5,259,191) (741,454) (714,793) (694,325) (689,400) (720,341) (635,612)
Transfers on
account of
death........... (317,872) (79,684) (63,356) (1,802) (2,545) (2,492) (27,123) (10,951) (6,286)
Transfers on
account of other
terminations.... (2,897,126) (2,840,771) (2,139,221) (464,487) (126,066) (145,435) (363,544) (324,994) (194,112)
----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase
(decrease) in net
assets derived
from
contractholder
transaction...... 7,466,263 11,536,517 15,439,542 (1,095,884) 1,528,784 3,179,208 810,307 586,455 1,251,042
Net increase
(decrease) in net
assets........... 22,240,863 21,575,187 13,155,474 (787,551) 1,846,357 3,339,601 837,881 821,429 189,663
----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at
beginning of
year............. 76,851,444 55,276,257 42,120,783 8,798,706 6,952,349 3,612,748 6,915,508 6,094,079 5,904,416
----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at end of
year............. $99,092,307 $76,851,444 $55,276,257 $8,011,155 $8,798,706 $6,952,349 $7,753,389 $6,915,508 $6,094,079
=========== =========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
F-26
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
DOMESTIC GROWTH STOCK DIVISION BOND DIVISION
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------- -------------------------------------
1996 1995 1994 1996 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DE-
CREASE) IN NET
ASSETS
Operations:
Net investment
income.......... $ 8,231,743 $ 6,708,861 $ 2,308,290 $ 572,521 $ 559,875 $ 366,065
Net realized
gain (loss) on
investments..... 821,643 194,361 358,705 37,510 129,555 (85,477)
Change in net
unrealized gain
(loss) on in-
vestments....... (390,637) 3,886,548 (753,758) (364,875) 722,365 (455,167)
----------- ----------- ----------- ----------- ----------- -----------
Increase (de-
crease) in net
assets from op-
erations........ 8,662,749 10,789,770 1,913,237 245,156 1,411,795 (174,579)
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 15,512,647 12,662,001 9,425,716 2,634,301 2,904,776 3,028,438
Transfers
from/to General
Account and
within Separate
Account, net.... (999,798) 4,798,054 166,220 999,421 (5,156,597) 6,076,841
Transfers of
cost of insur-
ance............ (5,382,924) (4,118,433) (2,925,627) (909,361) (918,529) (704,857)
Transfers on ac-
count of death.. (363,028) (63,789) (55,379) (16,880) (2,860) (21,087)
Transfers on ac-
count of other
terminations.... (1,916,226) (1,771,658) (1,059,998) (438,849) (436,792) (216,561)
----------- ----------- ----------- ----------- ----------- -----------
Net increase
(decrease) in
net assets
derived from
contractholder
transactions.... 6,850,671 11,506,175 5,550,932 2,268,632 (3,610,002) 8,162,774
Net increase
(decrease) in
net assets...... 15,513,420 22,295,945 7,464,169 2,513,788 (2,198,207) 7,988,195
----------- ----------- ----------- ----------- ----------- -----------
Balance at begin-
ning of year.... 54,523,869 32,227,924 24,763,755 9,875,826 12,074,033 4,085,838
----------- ----------- ----------- ----------- ----------- -----------
Balance at end of
year............ $70,037,289 $54,523,869 $32,227,924 $12,389,614 $ 9,875,826 $12,074,033
=========== =========== =========== =========== =========== ===========
<CAPTION>
GROWTH AND INCOME DIVISION
YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
------------ ------------ -----------
<S> <C> <C> <C>
INCREASE (DE-
CREASE) IN NET
ASSETS
Operations:
Net investment
income.......... $ 943,501 $ 441,880 $ 166,492
Net realized
gain (loss) on
investments..... 317,839 43,900 15,866
Change in net
unrealized gain
(loss) on in-
vestments....... 2,500,125 1,598,713 (368,658)
------------ ------------ -----------
Increase (de-
crease) in net
assets from op-
erations........ 3,761,465 2,084,493 (186,300)
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 6,240,133 3,961,606 2,429,810
Transfers
from/to General
Account and
within Separate
Account, net.... 3,324,466 3,929,594 1,285,556
Transfers of
cost of insur-
ance............ (1,850,081) (1,064,970) (525,589)
Transfers on ac-
count of death.. (46,114) (3,375) (1,953)
Transfers on ac-
count of other
terminations.... (368,235) (161,477) (67,115)
------------ ------------ -----------
Net increase
(decrease) in
net assets
derived from
contractholder
transactions.... 7,300,169 6,661,378 3,120,709
Net increase
(decrease) in
net assets...... 11,061,634 8,745,871 2,934,409
------------ ------------ -----------
Balance at begin-
ning of year.... 13,325,607 4,579,736 1,645,327
------------ ------------ -----------
Balance at end of
year............ $24,387,241 $13,325,607 $4,579,736
============ ============ ===========
</TABLE>
- -----
(a) Commencement of operations.
See notes to financial statements.
F-27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
EMERGING GROWTH DIVISION
----------------------------
CAPITAL GROWTH DIVISION BALANCED DIVISION
------------------------------------- ------------------------------------ PERIOD FROM
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, MAY 1, 1995(A)
------------------------------------- ------------------------------------ YEAR ENDED TO DECEMBER 31,
1996 1995 1994 1996 1995 1994 1996 1995
----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment
income (loss)...... $12,950,668 $ 4,194,732 $ 487,588 $ 1,463,145 $ 1,169,664 $ 301,617 $ 660,254 $ (11,735)
Net realized
gain(loss) on
investments........ 704,194 331,997 88,882 151,391 56,294 (8,145) 349,647 17,701
Change in net
unrealized gain
(loss) on
investments......... (3,210,806) 9,191,593 (1,243,197) (17,988) 1,204,925 (456,921) 1,103,470 458,910
----------- ----------- ----------- ----------- ----------- ---------- ----------- ----------
Increase (decrease)
in net assets from
operations.......... 10,444,056 13,718,322 (666,727) 1,596,548 2,430,883 (163,449) 2,113,371 464,876
Contractholder
transactions--Note
D:
Transfers of net
premiums........... 20,766,738 16,405,660 12,963,387 4,608,156 4,547,924 4,772,184 7,560,238 1,779,119
Transfers from/to
General Account and
within Separate
Account, net....... 5,662,187 3,400,177 2,594,799 (283,623) 1,225,695 (49,149) 11,847,439 5,574,465
Transfers of cost
of insurance....... (6,261,918) (4,336,652) (2,783,710) (1,498,155) (1,334,390) (1,065,410) (1,670,564) (218,292)
Transfers on
account of death... (191,870) (17,451) (20,715) (37,978) (11,992) (4,758) (14,856)
Transfers on
account of other
terminations....... (1,886,962) (1,543,687) (441,447) (460,839) (684,107) (202,716) (364,506) (12,826)
----------- ----------- ----------- ----------- ----------- ---------- ----------- ----------
Net increase in net
assets derived from
contractholder
transactions........ 18,088,175 13,908,047 12,312,314 2,327,561 3,743,130 3,450,151 17,357,751 7,122,466
Net increase in net
assets.............. 28,532,231 27,626,369 11,645,587 3,924,109 6,174,013 3,286,702 19,471,122 7,587,342
----------- ----------- ----------- ----------- ----------- ---------- ----------- ----------
Balance at beginning
of year............. 54,135,639 26,509,270 14,863,683 15,561,412 9,387,399 6,100,697 7,587,342 --
----------- ----------- ----------- ----------- ----------- ---------- ----------- ----------
Balance at end of
year................ $82,667,870 $54,135,639 $26,509,270 $19,485,521 $15,561,412 $9,387,399 $27,058,464 $7,587,342
=========== =========== =========== =========== =========== ========== =========== ==========
</TABLE>
- -----
(a)Commencement of operations.
See notes to financial statements.
F-28
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
TEMPLETON INTERNATIONAL FIDELITY FIDELITY HIGH FIDELITY
DIVISION CONTRAFUND DIVISION INCOME DIVISION INDEX 500 DIVISION
---------------------------- ------------------- --------------- ------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
MAY 1, 1995 (A) MAY 2, 1996 (A) MAY 2, 1996 (A) MAY 2, 1996 (A)
YEAR TO TO TO TO
ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1996 1996
----------- --------------- ------------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income
(loss)................. $ 62,744 $ (28,459) $ (13,294) $ (9,027) $ (18,598)
Net realized gain on
investments............ 267,958 316,398 3,889 25,826 24,088
Change in net
unrealized gain on
investments............ 2,779,085 357,041 388,960 106,660 561,002
----------- ----------- ---------- ---------- ----------
Increase in net assets
from operations......... 3,109,787 644,980 379,555 123,459 566,492
Contractholder
transactions--Note D:
Transfers of net
premiums............... 5,361,868 1,959,347 930,093 312,854 887,336
Transfers from/to
General Account and
within Separate
Account, net........... 8,214,110 5,568,613 3,824,157 2,471,242 6,216,629
Transfers of cost of
insurance.............. (1,135,804) (361,292) (151,699) (72,880) (145,983)
Transfers on account of
death.................. (9,512)
Transfers on account of
other terminations..... (414,887) (114,846) (19,581) (15,474) 3,111
----------- ----------- ---------- ---------- ----------
Net increase in net
assets derived from
contractholder
transactions............ 12,015,775 7,051,822 4,582,970 2,695,742 6,961,093
Net increase in net
assets.................. 15,125,562 7,696,802 4,962,525 2,819,201 7,527,585
----------- ----------- ---------- ---------- ----------
Balance at beginning of
year.................... 7,696,802 0 0 0 0
----------- ----------- ---------- ---------- ----------
Balance at end of year.. $22,822,364 $ 7,696,802 $4,962,525 $2,819,201 $7,527,585
=========== =========== ========== ========== ==========
</TABLE>
- -----
(a)Commencement of operations.
See notes to financial statements.
F-29
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1996
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 thirteen investment divisions, nine
of which invests exclusively in the corresponding portfolio of the Chubb
America Fund, Inc., one of which invests in the Templeton International Fund,
and three of which invests in certain Fidelity Portfolios, all diversified
Series Management Investment Companies.
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investment: 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 Transaction: 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, 1996 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, 1996.
<TABLE>
<CAPTION>
NET ASSET
VALUE
SHARES PER SHARE
--------- ----------
<S> <C> <C>
World Growth Stock Portfolio.............................. 3,947,054 $23.307417
Money Market Portfolio.................................... 770,648 10.246253
Gold Stock Portfolio...................................... 454,995 16.606495
Domestic Growth Stock Portfolio........................... 3,418,546 18.185033
Bond Portfolio............................................ 1,141,490 10.265259
Growth and Income Portfolio............................... 1,378,065 16.907163
Capital Growth Portfolio.................................. 4,088,072 17.262802
Balanced Portfolio........................................ 1,494,382 12.065084
Emerging Growth Portfolio................................. 1,721,284 15.230117
Templeton International Portfolio......................... 1,234,648 18.400000
Fidelity Contrafund Portfolio............................. 297,794 16.560000
Fidelity High Income Portfolio............................ 224,632 12.520000
Fidelity Index 500 Portfolio.............................. 83,267 89.130000
</TABLE>
F-30
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1996
NOTE D--CONTRACTHOLDER TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1996 1995 1994
---------------------- ---------------------- ---------------------
UNITS AMOUNT UNITS AMOUNT UNITS AMOUNT
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
World Growth Stock
Division
Issuance of units...... 1,228,496 $39,291,612 1,715,142 $47,537,500 1,377,609 $37,060,168
Redemptions of units... 994,317 31,825,349 1,277,857 36,000,983 808,594 21,620,626
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 234,179 $ 7,466,263 437,285 $11,536,517 569,015 $15,439,542
========= =========== ========= =========== ========= ===========
Money Market Division
Issuance of units...... 1,936,504 $30,547,227 1,688,778 $25,651,528 1,321,835 $19,333,534
Redemptions of units... 2,006,047 31,643,111 1,587,725 24,122,744 1,102,560 16,154,326
--------- ----------- --------- ----------- --------- -----------
Net Increase
(decrease)........... (69,543) $(1,095,884) 101,053 $ 1,528,784 219,275 $ 3,179,208
========= =========== ========= =========== ========= ===========
Gold Stock Division
Issuance of units...... 278,948 $ 5,141,128 371,551 $ 5,790,832 274,928 $ 4,678,197
Redemptions of units... 234,636 4,330,821 327,364 5,204,377 208,547 3,427,155
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 44,312 $ 810,307 44,187 $ 586,455 66,381 $ 1,251,042
========= =========== ========= =========== ========= ===========
Domestic Growth Stock
Division
Issuance of units...... 938,273 $32,523,842 917,824 $26,054,533 684,179 $16,392,246
Redemptions of units... 746,233 25,673,171 509,915 14,548,358 451,695 10,841,314
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 192,040 $ 6,850,671 407,909 $11,506,175 232,484 $ 5,550,932
========= =========== ========= =========== ========= ===========
Bond Division
Issuance of units...... 551,744 $10,326,450 672,153 $11,914,386 923,962 $15,280,183
Redemptions of units... 429,283 8,057,818 887,866 15,524,388 429,173 7,117,409
--------- ----------- --------- ----------- --------- -----------
Net (Decrease)
Increase............. 122,461 $ 2,268,632 (215,713) $(3,610,002) 494,789 $ 8,162,774
========= =========== ========= =========== ========= ===========
Growth and Income
Division
Issuance of units...... 1,036,744 $17,720,412 730,636 $10,587,371 389,096 $ 4,814,715
Redemptions of units... 613,562 10,420,243 271,957 3,925,993 136,796 1,694,006
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 423,182 $ 7,300,169 458,679 $ 6,661,378 252,300 $ 3,120,709
========= =========== ========= =========== ========= ===========
Capital Growth Division
Issuance of units...... 1,982,313 $47,005,977 1,825,698 $31,919,956 1,444,217 $21,619,453
Redemptions of units... 1,225,848 28,917,802 1,017,713 18,011,909 620,968 9,307,139
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 756,465 $18,088,175 807,985 $13,908,047 823,249 $12,312,314
========= =========== ========= =========== ========= ===========
Balanced Division
Issuance of units...... 804,427 $11,577,640 763,616 $ 9,631,633 671,716 $ 7,809,794
Redemptions of units... 645,411 9,250,079 464,695 5,888,503 374,938 4,359,643
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 159,016 $ 2,327,561 298,921 $ 3,743,130 296,778 $ 3,450,151
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED FOR THE PERIOD MAY 1, 1995
DECEMBER 31, 1996 THROUGH DECEMBER 31, 1995
--------------------- ---------------------------
UNITS AMOUNT UNITS AMOUNT
--------- ----------- ------------ --------------
<S> <C> <C> <C> <C>
Emerging Growth Division
Issuance of units........... 1,835,746 $27,213,430 718,606 $ 8,905,329
Redemptions of units........ 663,900 9,855,681 143,489 1,782,863
--------- ----------- ------------ --------------
Net Increase............... 1,171,846 $17,357,749 575,117 $ 7,122,466
========= =========== ============ ==============
Templeton Division
Issuance of units........... 2,125,435 $25,905,378 1,977,300 $ 20,880,595
Redemptions of units........ 1,148,728 13,889,603 1,285,944 13,828,773
--------- ----------- ------------ --------------
Net Increase............... 976,707 $12,015,775 691,356 $ 7,051,822
========= =========== ============ ==============
</TABLE>
F-31
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1996
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 2, 1996(A)
THROUGH
DECEMBER 31, 1996
------------------
UNITS AMOUNT
------- ----------
<S> <C> <C>
Fidelity Contrafund Division
Issuance of units.......................................... 533,610 $5,507,181
Redemptions of units....................................... 88,891 924,211
------- ----------
Net Increase.............................................. 444,719 $4,582,970
======= ==========
Fidelity High Income Division
Issuance of units.......................................... 460,340 $4,748,206
Redemptions of units....................................... 198,287 2,052,464
------- ----------
Net Increase.............................................. 262,053 $2,695,742
======= ==========
Fidelity Index 500 Division
Issuance of units.......................................... 796,936 $8,418,545
Redemptions of units....................................... 136,853 1,457,452
------- ----------
Net Increase.............................................. 660,083 $6,961,093
======= ==========
</TABLE>
- -------
(a) Commencement of operations.
NOTE E--SUBSEQUENT EVENT
The Company's Parent, The Chubb Corporation entered into a definitive
agreement, dated February 23, 1997, to sell Chubb Life to Jefferson-Pilot
Corporation for $875,000,000 in cash, subject to various closing adjustments
and other customary conditions. The sale is subject to regulatory approvals
and is expected to be completed by the end of the second quarter of 1997.
F-32
<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 dividends 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: Class 1, 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 -1.72%, 2.28% and 10.28%, 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 tie 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 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 2,740 100,000 3,113 2,737 100,000
4 6,293 4,096 3,720 100,000 4,084 3,707 100,000
5 8,027 5,062 4,685 100,000 5,021 4,644 100,000
6 9,830 6,014 5,700 100,000 5,921 5,607 100,000
7 11,705 6,952 6,701 100,000 6,784 6,533 100,000
8 13,655 7,865 7,677 100,000 7,609 7,420 100,000
9 15,684 8,765 8,640 100,000 8,394 8,269 100,000
10 17,793 9,653 9,590 100,000 9,139 9,076 100,000
11 19,987 10,547 10,547 100,000 9,840 9,840 100,000
12 22,268 11,400 11,400 100,000 10,495 10,495 100,000
13 24,641 12,211 12,211 100,000 11,097 11,097 100,000
14 27,109 12,978 12,978 100,000 11,642 11,642 100,000
15 29,675 13,698 13,698 100,000 12,124 12,124 100,000
16 32,344 14,368 14,368 100,000 12,539 12,539 100,000
17 35,120 14,984 14,984 100,000 12,880 12,880 100,000
18 38,007 15,541 15,541 100,000 13,144 13,144 100,000
19 41,009 16,034 16,034 100,000 13,327 13,327 100,000
20 44,131 16,455 16,455 100,000 13,420 13,420 100,000
21 47,378 16,795 16,795 100,000 13,411 13,411 100,000
22 50,755 17,049 17,049 100,000 13,292 13,292 100,000
23 54,268 17,208 17,208 100,000 13,047 13,047 100,000
24 57,920 17,263 17,263 100,000 12,656 12,656 100,000
25 61,719 17,204 17,204 100,000 12,101 12,101 100,000
30 83,118 14,703 14,703 100,000 6,122 6,122 100,000
35 109,153 6,434 6,434 100,000 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 ACUTAL
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 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 1,121 745 100,000 1,120 744 100,000
2 3,023 2,253 1,876 100,000 2,251 1,874 100,000
3 4,626 3,395 3,019 100,000 3,392 3,016 100,000
4 6,293 4,556 4,179 100,000 4,543 4,166 100,000
5 8,027 5,746 5,369 100,000 5,703 5,326 100,000
6 9,830 6,966 6,652 100,000 6,869 6,556 100,000
7 11,705 8,218 7,967 100,000 8,042 7,791 100,000
8 13,655 9,491 9,303 100,000 9,218 9,030 100,000
9 15,684 10,796 10,671 100,000 10,399 10,273 100,000
10 17,793 12,136 12,073 100,000 11,580 11,517 100,000
11 19,987 13,528 13,528 100,000 12,760 12,760 100,000
12 22,268 14,930 14,930 100,000 13,936 13,936 100,000
13 24,641 16,338 16,338 100,000 15,101 15,101 100,000
14 27,109 17,751 17,751 100,000 16,251 16,251 100,000
15 29,675 19,168 19,168 100,000 17,380 17,380 100,000
16 32,344 20,591 20,591 100,000 18,482 18,482 100,000
17 35,120 22,016 22,016 100,000 19,558 19,558 100,000
18 38,007 23,440 23,440 100,000 20,603 20,603 100,000
19 41,009 24,859 24,859 100,000 21,614 21,614 100,000
20 44,131 26,266 26,266 100,000 22,580 22,580 100,000
21 47,378 27,653 27,653 100,000 23,494 23,494 100,000
22 50,755 29,016 29,016 100,000 24,346 24,346 100,000
23 54,268 30,350 30,350 100,000 25,121 25,121 100,000
24 57,920 31,646 31,646 100,000 25,802 25,802 100,000
25 61,719 32,899 32,899 100,000 26,372 26,372 100,000
30 83,118 38,174 38,174 100,000 26,901 26,901 100,000
35 109,153 40,492 40,492 100,000 20,260 20,260 100,000
40 140,828 36,497 36,497 100,000 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 ACUTAL
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 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 2,550 2,173 100,000 2,547 2,171 100,000
3 4,717 4,001 3,625 100,000 3,998 3,621 100,000
4 6,449 5,595 5,218 100,000 5,581 5,204 100,000
5 8,268 7,357 6,981 100,000 7,311 6,935 100,000
6 10,177 9,306 8,992 100,000 9,201 8,888 100,000
7 12,182 11,461 11,210 100,000 11,267 11,016 100,000
8 14,288 13,833 13,644 100,000 13,527 13,339 100,000
9 16,498 16,456 16,331 100,000 16,002 15,876 100,000
10 18,820 19,358 19,295 100,000 18,712 18,649 100,000
11 21,257 22,593 22,593 100,000 21,689 21,689 100,000
12 23,816 26,162 26,162 100,000 24,967 24,967 100,000
13 26,503 30,100 30,100 100,000 28,578 28,578 100,000
14 29,324 34,448 34,448 100,000 32,559 32,559 100,000
15 32,287 39,254 39,254 100,000 36,952 36,952 100,000
16 35,398 44,570 44,570 100,000 41,806 41,806 100,000
17 38,664 50,455 50,455 100,000 47,177 47,177 100,000
18 42,093 56,976 56,976 100,000 53,133 53,133 100,000
19 45,694 64,212 64,212 100,000 59,749 59,749 100,000
20 49,475 72,252 72,252 100,000 67,114 67,114 100,000
21 53,445 81,188 81,188 105,544 (3) 75,330 75,330 100,000
22 57,613 91,061 91,061 116,558 (3) 84,475 84,475 108,129 (3)
23 61,990 101,957 101,957 128,465 (3) 94,561 94,561 119,146 (3)
24 66,586 113,982 113,982 141,337 (3) 105,677 105,677 131,039 (3)
25 71,412 127,255 127,255 155,251 (3) 117,931 117,931 143,875 (3)
30 99,409 217,136 217,136 251,878 (3) 200,518 200,518 232,601 (3)
35 135,142 364,549 364,549 390,068 (3) 335,269 335,269 358,738 (3)
40 180,747 608,722 608,722 639,158 (3) 557,912 557,912 585,807 (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 ACUTAL
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 I ASSUMED HYPOTHETICAL GROSS 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 1,069 693 101,069 1,068 692 101,068
2 3,023 2,102 1,726 102,102 2,100 1,724 102,100
3 4,626 3,100 2,723 103,100 3,096 2,720 103,096
4 6,293 4,068 3,691 104,068 4,055 3,679 104,055
5 8,027 5,020 4,643 105,020 4,976 4,600 104,976
6 9,830 5,955 5,642 105,955 5,857 5,544 105,857
7 11,705 6,875 6,624 106,875 6,696 6,445 106,696
8 13,655 7,766 7,578 107,766 7,492 7,304 107,492
9 15,684 8,643 8,517 108,643 8,244 8,118 108,244
10 17,793 9,504 9,441 109,504 8,948 8,885 108,948
11 19,987 10,372 10,372 110,372 9,604 9,604 109,604
12 22,268 11,194 11,194 111,194 10,205 10,205 110,205
13 24,641 11,968 11,968 111,968 10,745 10,745 110,745
14 27,109 12,690 12,690 112,690 11,219 11,219 111,219
15 29,675 13,358 13,358 113,358 11,621 11,621 111,621
16 32,344 13,966 13,966 113,966 11,943 11,943 111,943
17 35,120 14,510 14,510 114,510 12,180 12,180 112,180
18 38,007 14,984 14,984 114,984 12,327 12,327 112,327
19 41,009 15,381 15,381 115,381 12,381 12,381 112,381
20 44,131 15,691 15,691 115,691 12,329 12,329 112,329
21 47,378 15,903 15,903 115,903 12,163 12,163 112,163
22 50,755 16,011 16,011 116,011 11,871 11,871 111,871
23 54,268 16,005 16,005 116,005 11,438 11,438 111,438
24 57,920 15,873 15,873 115,873 10,845 10,845 110,845
25 61,719 15,607 15,607 115,607 10,073 10,073 110,073
30 83,118 11,744 11,744 111,744 2,998 2,998 102,998
35 109,153 1,973 1,973 101,973 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 ACUTAL
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 I ASSUMED HYPOTHETICAL GROSS 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 2,244 1,867 102,244 2,242 1,865 102,242
3 4,626 3,377 3,000 103,377 3,374 2,997 103,374
4 6,293 4,524 4,147 104,524 4,510 4,134 104,510
5 8,027 5,697 5,320 105,697 5,652 5,275 105,652
6 9,830 6,896 6,583 106,896 6,794 6,480 106,794
7 11,705 8,124 7,873 108,124 7,935 7,684 107,935
8 13,655 9,367 9,178 109,367 9,072 8,884 109,072
9 15,684 10,638 10,512 110,638 10,205 10,079 110,205
10 17,793 11,938 11,876 111,938 11,328 11,265 111,328
11 19,987 13,290 13,290 113,290 12,439 12,439 112,439
12 22,268 14,641 14,641 114,641 13,531 13,531 113,531
13 24,641 15,988 15,988 115,988 14,597 14,597 114,597
14 27,109 17,327 17,327 117,327 15,629 15,629 115,629
15 29,675 18,653 18,653 118,653 16,619 16,619 116,619
16 32,344 19,966 19,966 119,966 17,557 17,557 117,557
17 35,120 21,259 21,259 121,259 18,435 18,435 118,435
18 38,007 22,527 22,527 122,527 19,251 19,251 119,251
19 41,009 23,758 23,758 123,758 19,995 19,995 119,995
20 44,131 24,941 24,941 124,941 20,653 20,653 120,653
21 47,378 26,062 26,062 126,062 21,211 21,211 121,211
22 50,755 27,112 27,112 127,112 21,653 21,653 121,653
23 54,268 28,075 28,075 128,075 21,958 21,958 121,958
24 57,920 28,936 28,936 128,936 22,101 22,101 122,101
25 61,719 29,680 29,680 129,680 22,054 22,054 122,054
30 83,118 30,918 30,918 130,918 18,114 18,114 118,114
35 109,153 25,440 25,440 125,440 4,518 4,518 104,518
40 140,828 8,250 8,250 108,250 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 ACUTAL
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 I ASSUMED HYPOTHETICAL GROSS 0% (-1.72% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: ASSUMED $1,425
$100,000 INITIAL SPECIFIED AMOUNT ANNUAL PREMIUM (1):
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
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 1,216 839 101,216
2 3,067 2,539 2,163 102,539 2,537 2,161 102,537
3 4,717 3,979 3,603 103,979 3,976 3,599 103,976
4 6,449 5,555 5,178 105,555 5,540 5,164 105,540
5 8,268 7,292 6,915 107,292 7,243 6,867 107,243
6 10,177 9,208 8,894 109,208 9,095 8,781 109,095
7 12,182 11,321 11,070 111,321 11,109 10,858 111,109
8 14,288 13,638 13,450 113,638 13,300 13,111 113,300
9 16,498 16,194 16,068 116,194 15,683 15,557 115,683
10 18,820 19,012 18,950 119,012 18,274 18,211 118,274
11 21,257 22,150 22,150 122,150 21,097 21,097 121,097
12 23,816 25,593 25,593 125,593 24,177 24,177 124,177
13 26,503 29,370 29,370 129,370 27,534 27,534 127,534
14 29,324 33,512 33,512 133,512 31,193 31,193 131,193
15 32,287 38,055 38,055 138,055 35,177 35,177 135,177
16 35,398 43,036 43,036 143,036 39,512 39,512 139,512
17 38,664 48,495 48,495 148,495 44,228 44,228 144,228
18 42,093 54,477 54,477 154,477 49,361 49,361 149,361
19 45,694 61,029 61,029 161,029 54,949 54,949 154,949
20 49,475 68,201 68,201 168,201 61,027 61,027 161,027
21 53,445 76,046 76,046 176,046 67,637 67,637 167,637
22 57,613 84,628 84,628 184,628 74,822 74,822 174,822
23 61,990 94,014 94,014 194,014 82,624 82,624 182,624
24 66,586 104,277 104,277 204,277 91,088 91,088 191,088
25 71,412 115,498 115,498 215,498 100,262 100,262 200,262
30 99,409 189,316 189,316 289,316 159,008 159,008 259,008
35 135,142 304,124 304,124 404,124 246,001 246,001 346,001
40 180,747 482,559 482,559 582,559 372,757 372,757 472,757
</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-7
<PAGE>
FOR USE IN ARKANSAS ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN CALIFORNIA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN COLORADO ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN CONNECTICUT ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN IDAHO ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN INDIANA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN MARYLAND ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN MASSACHUSETTS ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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.4/97
<PAGE>
FOR USE IN MINNESOTA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN MISSOURI ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN MONTANA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN NORTH DAKOTA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN PENNSYLVANIA ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN WISCONSIN ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN THE U.S. VIRGIN ISLANDS ONLY
Supplement dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN UTAH ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<PAGE>
FOR USE IN TEXAS ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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 12 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. 4/97
<PAGE>
FOR USE IN PUERTO RICO ONLY
Supplement Dated May 1, 1997 to Prospectus Dated May 1, 1997
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. 4/97
<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.
REPRESENTATIONS REGARDING FEES AND CHARGES
The fees and charges deducted under the contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by Chubb Life Insurance Company of America.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The cover sheet.
The Prospectus consisting of 74 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484(b) (1) under the Securities
Act of 1933.
The Representations Regarding Fees and Charges.
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) (Incorporated by
reference to Exhibit 1(a) of Post-Effective Amendment No. 12 to the
Registration Statement on Form S-6 dated April 17, 1996).
(b) Not applicable
(c) (i) Underwriting Agreement between The Volunteer State Life Insurance
Company and Chubb Securities Corporation. (Incorporated by reference to
Exhibit 1(c)(i) of Post-Effective Amendment No. 12 to the Registration
Statement on Form S-6 dated April 17, 1996).
(ii) Amendment to Underwriting Agreement between The Volunteer State
Life Insurance Company and Chubb Securities Corporation. (Incorporated by
reference to Exhibit 1(c)(ii) of Post-Effective Amendment No. 12 to the
Registration Statement on Form S-6 dated April 17, 1996).
(iii) Specimen District Manager's Agreement of Chubb Securities
Corporation. (Incorporated by reference to Exhibit 1(c)(iii) of Post-
Effective Amendment No. 12 to the Registration Statement on Form S-6 dated
April 17, 1996).
(iv) Specimen Sales Representative's Agreement of Chubb Securities
Corporation. (Incorporated by reference to Exhibit 1(c)(iv) of Post-
Effective Amendment No. 12 to the Registration Statement on Form S-6 dated
April 17, 1996).
(v) Schedule of Commissions. (Incorporated by reference to Exhibit
1(c)(v) of Post-Effective Amendment No. 12 to the Registration Statement on
Form S-6 dated April 17, 1996).
(d) Not applicable
(e) Specimen Policy with form of riders. 1,2,3,6,7. (Incorporated by
reference to Exhibit 1(e) of Post-Effective Amendment No. 12 to the Registration
Statement on Form S-6 dated April 17, 1996).
(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). (Incorporated by reference to Exhibit 9 of
Post-Effective Amendment No. 12 to the Registration Statement on Form S-6
dated April 17, 1996).
<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. 13 to the
Registration Statement and, has duly caused this Post-Effective Amendment No. 13
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, 1997.
(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. 13 to the Registration Statement and has duly caused this Post-Effective
Amendment No. 13 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, 1997.
[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
James I. Cash
*
- ------------------------------------ Director, Vice Chairman
Percy Chubb, III
*
- ------------------------------------ Director
Joel J. Cohen
<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, 1997, pursuant to
Powers of Attorney filed as
Exhibit 14 hereto.
<PAGE>
EXHIBIT INDEX
3. Opinion of Counsel..................................
6. Actuarial Opinion and Consent of
Michael J. Leboeuf, FSA, MAAA........................
7. Consent of Ernst & Young LLP
Independent Auditors................................
8. Procedures Memorandum, as amended May 1, 1997......
10. Representations, Description and Undertakings
Regarding Mortality and Risk Charge Pursuant
to Rule 6e-3(T)(b)(13)(iii)(F)......................
14. Powers of Attorney
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 001
<NAME> WORLD GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 75,586,446
<INVESTMENTS-AT-VALUE> 91,995,634
<RECEIVABLES> 7,096,673
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 99,092,307
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 82,683,119
<SHARES-COMMON-STOCK> 2,795,358
<SHARES-COMMON-PRIOR> 2,561,179
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 16,409,188
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 99,092,307
<DIVIDEND-INCOME> 7,663,496
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 786,314
<NET-INVESTMENT-INCOME> 6,877,182
<REALIZED-GAINS-CURRENT> 607,700
<APPREC-INCREASE-CURRENT> 7,289,718
<NET-CHANGE-FROM-OPS> 14,774,600
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,228,496
<NUMBER-OF-SHARES-REDEEMED> 994,317
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,240,863
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 87,971,875
<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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> MONEY MARKET DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 8,153,659
<INVESTMENTS-AT-VALUE> 7,896,257
<RECEIVABLES> 114,898
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,011,155
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,268,557
<SHARES-COMMON-STOCK> 499,795
<SHARES-COMMON-PRIOR> 569,338
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (257,402)
<NET-ASSETS> 8,011,155
<DIVIDEND-INCOME> 387,924
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 76,879
<NET-INVESTMENT-INCOME> 311,045
<REALIZED-GAINS-CURRENT> 16,652
<APPREC-INCREASE-CURRENT> (19,364)
<NET-CHANGE-FROM-OPS> 308,333
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,936,504
<NUMBER-OF-SHARES-REDEEMED> 2,006,047
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (787,551)
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 8,404,930
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> GOLD STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 7,349,426
<INVESTMENTS-AT-VALUE> 7,555,873
<RECEIVABLES> 197,516
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,753,389
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,546,942
<SHARES-COMMON-STOCK> 474,529
<SHARES-COMMON-PRIOR> 430,217
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 206,447
<NET-ASSETS> 7,753,389
<DIVIDEND-INCOME> 196,148
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 75,213
<NET-INVESTMENT-INCOME> 120,935
<REALIZED-GAINS-CURRENT> 236,329
<APPREC-INCREASE-CURRENT> (329,690)
<NET-CHANGE-FROM-OPS> 27,574
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 278,948
<NUMBER-OF-SHARES-REDEEMED> 234,636
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 837,881
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 7,334,449
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> DOMESTIC GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 55,587,093
<INVESTMENTS-AT-VALUE> 62,166,365
<RECEIVABLES> 7,870,924
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 70,037,289
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 63,458,017
<SHARES-COMMON-STOCK> 1,890,101
<SHARES-COMMON-PRIOR> 1,698,061
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,579,272
<NET-ASSETS> 70,037,289
<DIVIDEND-INCOME> 8,810,130
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 578,387
<NET-INVESTMENT-INCOME> 8,231,743
<REALIZED-GAINS-CURRENT> 821,643
<APPREC-INCREASE-CURRENT> (390,637)
<NET-CHANGE-FROM-OPS> 8,662,749
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 938,273
<NUMBER-OF-SHARES-REDEEMED> 746,233
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,513,420
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 62,280,579
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> BOND DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 11,923,217
<INVESTMENTS-AT-VALUE> 11,717,963
<RECEIVABLES> 627,194
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,344,887
<PAYABLE-FOR-SECURITIES> 44,727
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 44,727
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,595,138
<SHARES-COMMON-STOCK> 642,703
<SHARES-COMMON-PRIOR> 520,242
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (205,524)
<NET-ASSETS> 12,389,614
<DIVIDEND-INCOME> 669,587
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 97,066
<NET-INVESTMENT-INCOME> 572,521
<REALIZED-GAINS-CURRENT> 37,510
<APPREC-INCREASE-CURRENT> (364,875)
<NET-CHANGE-FROM-OPS> 245,156
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 551,744
<NUMBER-OF-SHARES-REDEEMED> 429,283
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,513,788
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 11,132,720
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> GROWTH AND INCOME DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19,472,547
<INVESTMENTS-AT-VALUE> 23,299,173
<RECEIVABLES> 1,074,225
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24,373,398
<PAYABLE-FOR-SECURITIES> 13,843
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 13,843
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,560,615
<SHARES-COMMON-STOCK> 1,264,705
<SHARES-COMMON-PRIOR> 841,523
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,826,626
<NET-ASSETS> 24,387,241
<DIVIDEND-INCOME> 1,103,890
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 160,389
<NET-INVESTMENT-INCOME> 943,501
<REALIZED-GAINS-CURRENT> 317,389
<APPREC-INCREASE-CURRENT> 2,500,125
<NET-CHANGE-FROM-OPS> 3,761,465
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,036,744
<NUMBER-OF-SHARES-REDEEMED> 613,562
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,061,434
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 18,856,424
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 64,236,841
<INVESTMENTS-AT-VALUE> 70,571,585
<RECEIVABLES> 12,096,285
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 82,667,870
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 76,333,126
<SHARES-COMMON-STOCK> 3,344,862
<SHARES-COMMON-PRIOR> 2,588,397
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,344,744
<NET-ASSETS> 82,667,870
<DIVIDEND-INCOME> 13,585,474
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 634,806
<NET-INVESTMENT-INCOME> 12,950,668
<REALIZED-GAINS-CURRENT> 704,194
<APPREC-INCREASE-CURRENT> (3,210,806)
<NET-CHANGE-FROM-OPS> 10,444,056
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,982,313
<NUMBER-OF-SHARES-REDEEMED> 1,225,848
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 28,532,231
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 68,401,754
<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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> BALANCED DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 17,248,488
<INVESTMENTS-AT-VALUE> 18,029,841
<RECEIVABLES> 1,455,680
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19,485,521
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,704,168
<SHARES-COMMON-STOCK> 1,272,168
<SHARES-COMMON-PRIOR> 1,113,152
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 781,353
<NET-ASSETS> 19,485,521
<DIVIDEND-INCOME> 1,623,682
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 160,537
<NET-INVESTMENT-INCOME> 1,463,145
<REALIZED-GAINS-CURRENT> 151,391
<APPREC-INCREASE-CURRENT> (17,988)
<NET-CHANGE-FROM-OPS> 1,596,548
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 804,427
<NUMBER-OF-SHARES-REDEEMED> 645,411
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,924,109
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 17,523,467
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> EMERGING GROWTH DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-01-1996
<INVESTMENTS-AT-COST> 24,652,762
<INVESTMENTS-AT-VALUE> 26,215,352
<RECEIVABLES> 843,112
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,058,464
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,495,874
<SHARES-COMMON-STOCK> 1,746,963
<SHARES-COMMON-PRIOR> 575,117
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,562,590
<NET-ASSETS> 27,058,464
<DIVIDEND-INCOME> 816,743
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 156,489
<NET-INVESTMENT-INCOME> 660,254
<REALIZED-GAINS-CURRENT> 349,647
<APPREC-INCREASE-CURRENT> 1,103,470
<NET-CHANGE-FROM-OPS> 2,113,371
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,835,746
<NUMBER-OF-SHARES-REDEEMED> 663,900
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 19,471,122
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 17,322,903
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> TEMPLETON DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 19,581,399
<INVESTMENTS-AT-VALUE> 22,717,525
<RECEIVABLES> 104,839
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,822,364
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,666,238
<SHARES-COMMON-STOCK> 1,668,063
<SHARES-COMMON-PRIOR> 691,356
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 3,136,126
<NET-ASSETS> 22,822,364
<DIVIDEND-INCOME> 205,983
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 143,239
<NET-INVESTMENT-INCOME> 62,744
<REALIZED-GAINS-CURRENT> 267,958
<APPREC-INCREASE-CURRENT> 2,779,085
<NET-CHANGE-FROM-OPS> 3,109,787
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,125,436
<NUMBER-OF-SHARES-REDEEMED> 1,148,728
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,125,562
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 15,259,583
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> FIDELITY CONTRA DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 4,542,514
<INVESTMENTS-AT-VALUE> 4,931,474
<RECEIVABLES> 31,051
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,962,525
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,573,565
<SHARES-COMMON-STOCK> 444,719
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 388,960
<NET-ASSETS> 4,962,525
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 13,294
<NET-INVESTMENT-INCOME> (13,294)
<REALIZED-GAINS-CURRENT> 3,889
<APPREC-INCREASE-CURRENT> 388,960
<NET-CHANGE-FROM-OPS> 379,555
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 533,610
<NUMBER-OF-SHARES-REDEEMED> 88,891
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,962,525
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 2,481,263
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> FIDELITY HIGH INCOME DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2,705,728
<INVESTMENTS-AT-VALUE> 2,812,388
<RECEIVABLES> 6,813
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,819,201
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,712,541
<SHARES-COMMON-STOCK> 262,053
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 106,660
<NET-ASSETS> 2,819,201
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 9,027
<NET-INVESTMENT-INCOME> (9,027)
<REALIZED-GAINS-CURRENT> 25,826
<APPREC-INCREASE-CURRENT> 106,660
<NET-CHANGE-FROM-OPS> 123,459
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 460,340
<NUMBER-OF-SHARES-REDEEMED> 198,287
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,819,201
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 1,409,601
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> FIDELITY INDEX 500 DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 6,860,548
<INVESTMENTS-AT-VALUE> 7,421,550
<RECEIVABLES> 106,035
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,527,585
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,966,583
<SHARES-COMMON-STOCK> 660,083
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 561,002
<NET-ASSETS> 7,527,585
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 18,598
<NET-INVESTMENT-INCOME> (18,598)
<REALIZED-GAINS-CURRENT> 24,088
<APPREC-INCREASE-CURRENT> 561,002
<NET-CHANGE-FROM-OPS> 566,492
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 796,936
<NUMBER-OF-SHARES-REDEEMED> 136,853
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 7,527,585
<ACCUMULATED-NII-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 3,763,793
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NAV-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>
<PAGE>
Exhibit 3
OPINION OF COUNSEL
<PAGE>
[LETTERHEAD OF CHUBB LIFEAMERICA APPEARS HERE]
April 17, 1997
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. 13 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. 13 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
April 17, 1997
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. 13 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]
April 17, 1997
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>
EXHIBIT 7
CONSENT OF ERNST & YOUNG, LLP
<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 March 5, 1997 for Chubb Life Insurance Company of
America and Subsidiaries and March 14, 1997 for Chubb Separate Account A in
Post-Effective Amendment No. 13 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 24, 1997
<PAGE>
Exhibit 8
May 1, 1997
CHUBB LIFE INSURANCE COMPANY OF AMERICA
Administrative Procedures For "Flexible Premium Variable Life Insurance" -
"Ensemble" and "Ensemble II".
This document sets forth the information called for under Rule 6e-
3(T)(b)(12)(iii) under the Investment Company Act of 1940 ("1940 Act"). The Rule
provides exemptions from sections 22(d), 22(e), and 27(c)(1) of the 1940 Act,
and Rule 22c-1 thereunder, for issuance, transfer and redemption procedures
under the Flexible Premium Variable Life Insurance Policy ("Policy") to the
extent necessary to comply with other provisions of Rule 6e-3(T), state
insurance law or established administrative procedures of Chubb Life Insurance
Company of America ("Chubb Life" or the "Company"). To qualify for the
exemptions, procedures must be reasonable, fair and not discriminatory and must
be disclosed in the registration statement filed by the Separate Account.
Chubb Life believes its procedures meet the requirements of Rule 6e-
3(T)(b)(12)(iii), as described below.
-1-
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
1. Purchase and Related Transactions.......................................2
(a) Premium Schedule & Underwriting Standards...........................2
(b) Application and Initial Premium Processing..........................6
(c) Reinstatement.......................................................8
(d) Misstatement of Age or Sex..........................................10
(e) Exchange of Policy..................................................11
(f) Policyowner Illustrations...........................................12
2. Redemption Procedures: Surrender and Related Transactions...............12
(a) Surrender, Partial Surrender/Withdrawal.............................13
(b) Changes in Specified Amount.........................................16
(c) Benefit Claims......................................................19
(d) Policy Loans........................................................21
(e) Terminal Illness Accelerated Benefit Rider..........................23
3. Transfers...............................................................25
(a) General.............................................................26
(b) Dollar Cost Averaging...............................................27
4. Refunds.................................................................28
(a) Free Look Period....................................................29
(b) Suicide.............................................................29
(c) Incontestability....................................................29
5. Billing and Collection Procedures.......................................30
6. Change in Division Allocation...........................................32
(a) General.............................................................32
(b) Automatic Portfolio Re-Balancing....................................32
7. Incomplete Allocation Request...........................................33
</TABLE>
-2-
<PAGE>
TABLE OF CONTENTS (CONTINUED)
-----------------------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
8. Telephone Transfers, Loans and Reallocations............................33
9. Combined Requests.......................................................34
10. Unpaid Checks...........................................................35
11. Notifications...........................................................36
12. Role of Chubb Securities................................................37
13. Role of Chubb Life Policy Issue and Underwriting Department.............38
14. Role of Chubb Life Customer Service Department..........................39
</TABLE>
-3-
<PAGE>
1. PURCHASE AND RELATED TRANSACTIONS
---------------------------------
Chubb Life currently sells a Flexible Premium Variable Life Insurance Policy,
"Ensemble II", another Flexible Premium Variable Life Insurance Policy,
"Ensemble" is no longer being sold, but there are existing Ensemble policies.
Where the provisions of the policies are the same they will be referred to
jointly as "Policy" or "Policies". Where the provisions differ, the provisions
will be distinguished by reference to "Ensemble" or "Ensemble II".
(a) Premium Schedule and Underwriting Standards
-------------------------------------------
Premiums for the Policies will not be the same for all policyowners. Chubb Life
may require the policyowner to pay a first premium sufficient to keep the Policy
in force for three policy months. Policyowners, with the help of the registered
representative, will determine a Planned Periodic Premium payment schedule that
provides for a level premium payable at a fixed interval for a specified period
of time. Factors considered in setting the Planned Periodic Premium payment
schedule and selection of death benefit option include, but are not limited to,
the insured's age and risk classification; the policyowner's economic
circumstances, including future obligations, retirement and tax sheltering
needs; the policyowner's risk tolerance regarding market needs; and the death
benefit needs of the beneficiary. Payment of premiums in accordance with this
schedule is not, however, mandatory and failure to make payments
-4-
<PAGE>
in accordance with the schedule will not of itself cause the Policy to lapse.
Instead, policyowners may make premium payments in any amount, at any frequency,
subject only to the minimum premium amount, 1/ and the maximum premium
-
limitations set forth in the Internal Revenue Code (the "Code"). If at any time
a premium is paid which would result in total premiums exceeding the current
maximum premium limitation, Chubb Life will accept only that portion of the
premium which will make total premiums equal such maximum. Any portion of the
premium in excess of such maximum will be returned to the policyowner and no
further premiums will be accepted until allowed by the then current maximum
premium limitations set forth in the Code. The policyowner will be notified when
premiums may be paid again.
Also, the Code provides for significant tax consequences if policies are deemed
to be modified endowment contracts. Chubb Life's procedures for monitoring
whether a policy may become a modified endowment contract are set forth herein.
If at any time during the year Chubb Life determines the Technical and
Miscellaneous Revenue Act guidelines have been violated and excess premiums have
been remitted which would cause the policy to be deemed a modified endowment
contract. Chubb Life will give written notice of this fact to the policyowner;
this notice will set forth the policyowner's options with respect to the policy.
The notice gives the policyowner the right to request a refund of the excess
premium, or the right to
1/The minimum premium amount acceptable will be $25.00.
- -
-5-
<PAGE>
request an increase of the policy's face amount; these options would avoid
having the policy deemed a modified endowment contract. The policyowner may
choose, by returning an enclosed election form, any option. If the policyowner
does not return the election form within 60 days, Chubb Life will take no action
with respect to the policy and it will become a modified endowment contract. The
written notice also includes some general information regarding modified
endowment contracts and their tax aspects.
The policy will remain in force so long as the cash value, less any outstanding
policy debt, is sufficient to pay certain monthly charges imposed in connection
with the Policy. Thus, the amount of a premium, if any, that must be paid to
keep the Policy in force depends upon the cash value of the Policy, which in
turn depends on such factors as the investment experience and the cost of
insurance charge. The cost of insurance rate utilized in computing the cost of
insurance charge will not be the same for each insured. The chief reason is that
the principle of pooling and distribution of mortality risks is based upon the
assumption that each insured incurs an insurance rate commensurate with his or
her mortality risk which is actuarially determined based upon factors such as
issue age, policy year, sex, rating class, and the Specified Amount of the
Policy. For two Policies with the same sex, rating class and attained age, the
cost of insurance rate for the Policy with the younger age on its policy date
will never exceed, and in some cases will be less than, that for a Policy with
an older age on its policy date. Accordingly, while not all insureds will be
subject to the same cost of insurance
-6-
<PAGE>
rate, there will be a single "rate" for all insureds in a given actuarial
category.
The use of policy year as a factor in defining an actuarial category is
appropriate because the recovery of the cost of a policy depends, in part, upon
the length of time such policy has been in force. For example, an insured who
was younger at issue has maintained his policy in force for a longer period in
order to achieve the same attained age as the insured who was older at issue.
Thus, part of the cost of the policy which was supported by surplus of the
Company has been recovered for the insured who was younger at issue. This allows
the Company to reduce the cost of insurance rate below that of the insured whose
policy has been in force for a shorter period. For administrative convenience,
policy year is not used as an actuarial factor after the tenth policy year.
Current cost of insurance rates will be determined by Chubb Life based upon
expectations as to future mortality experience. The cost of insurance rates are
guaranteed not to exceed rates based upon the Commissioner's 1958 Standard
Ordinary Mortality Table for Ensemble and the Commissioner's 1980 Standard
Ordinary Mortality Table for Ensemble II.
The Company currently provides a guaranteed monthly deduction for adjustment
qualified Ensemble II added to the accumulation value which is calculated as an
annual amount at the beginning of each policy year, beginning with the second
policy year, for each month of
-7-
<PAGE>
that policy year during which the adjustment is in effect. The adjustment will
apply so long as it meets or exceed a $12 annual threshhold.
The Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws. State insurance laws
prohibit unfair discrimination among insureds but recognize that premiums may be
based upon factors such as issue age, policy year, sex, health and occupation.
Chubb Life may modify its underwriting requirements, in accordance with company
practice in effect when the policy is issued, for policies issued in connection
with group arrangements.
(b) Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application, Chubb Life will follow certain
insurance underwriting (e.g., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve such
verification procedures as medical examinations and may require that further
information be provided by the proposed applicant before a determination can be
made. A Policy will not be issued until the underwriting procedure has been
completed.
The insurance coverage will begin on the policy date, unless otherwise required
by insurance law or concepts such as "conditional receipt". Ordinarily, if the
application is approved and money is
-8-
<PAGE>
received, the policy date will be the later of the date of application or the
date of any required medical examination in accordance with Chubb Life's
underwriting requirements. If a premium is not paid with the application, the
policy date is the issue date. Coverage will begin on the date the premium is
received. The policyholder may request that the Policy be backdated for the
purposes of saving insurance age or conforming to employment related
requirements (e.g. common enrollment date). If the policy date is after the date
of the application and any required medical examination, the contestable period
starts from the date of the application or required medical examination,
whichever is later. If the policy date is before the dates of the application
and any required medical examination, the contestable period starts from the
policy date.
If the initial premium is received prior to the date Chubb Life either issues
the Policy or offers to issue the Policy on a basis other than standard and/or
other than as applied for, the net premium less monthly deductions for the
period between the policy date and the issue date 2/ will be placed in the
-
General Account. If this amount is equal to or greater than $500, it will be
credited with interest at the rate currently being credited to the General
Account for the period between the date the premium is received (or the policy
date, whichever is later) and the issue date. In those instances when Chubb Life
declines to issue a Policy, the full premium paid, if equal to or greater than
$500, will be returned with interest; interest will be credited from the date
the premium is received to the date the application is rejected. However, this
practice will not apply
-9-
<PAGE>
if the Policy is issued as applied for by the applicant or is issued on a
standard basis and delivery of the Policy is not accepted or the "free look"
right is exercised.
For Ensemble II, the initial net premium will be placed in the General Account
prior to the allocation date. On the allocation date the initial net premium
deposited in the General Account, plus interest earned, will be allocated, as
directed by the policyowner in the application, among the divisions of the
Separate Account and the General Account. Any other premiums received prior to
the allocation date will also be deposited in the General Account. The
allocation date is 15 days from the day Chubb Life mailed the policy to the
agent for delivery to the policyowner.
Under Chubb Life's current rules, the minimum Specified Amount at issue is
$25,000. Chubb Life reserves the right to revise its rules from time to time to
specify a different minimum Specified Amount at issue.
(c) Reinstatement
-------------
2/The issue date is the date Chubb Life either gives the Policy underwriting
- -
approval, or offers to issue the Policy on a basis other than standard and/or as
applied for.
A policy which terminates under the grace period provision of this
-10-
<PAGE>
contract may be reinstated at any time within five (5) years after the date of
termination. The policy year of reinstatement will be measured from the Policy
date. The reinstatement must occur prior to the maturity date of the Policy. The
following items must be submitted to Chubb Life for each reinstatement:
(1) A written application for reinstatement.
(2) Evidence of insurability sufficient to prove to the Company's satisfaction
that the insured is still able to meet the underwriting standards for the
"actuarial category" to which the Policy was originally assigned.
(3) A premium large enough, after the deduction of premium expense charges, 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.
c. Any due and unpaid monthly expense charges.
Upon request for reinstatement, Chubb Life will determine the premium amount
needed to reinstate the Policy based on the insured's attained age, sex, policy
year, rating class, and the Specified Amount of the Policy.
Chubb Life will notify the policyowner of the premium amount needed to
-11-
<PAGE>
reinstate the Policy. Chubb Life will also require repayment or reinstatement of
any policy debt which existed on the date of lapse before a Policy may be
reinstated. Upon approval of the reinstatement, the effective date of the
reinstated Policy will be the next Month anniversary 3/ following the date Chubb
-
Life approves the application for reinstatement.
(d) Misstatement of Age or Sex
--------------------------
If Chubb Life discovers that the age or sex of the insured has been misstated,
the amount payable at death will be the sum of the following:
For Ensemble:
(1) The cash value on the date of death; and
(2) The death benefit less the cash value on the date of death, multiplied by
the ratio of:
3/ Monthiversary is defined as the same date in each month as the policy date on
- -
which regular monthly processing occurs (i.e., cost of insurance deductions).
a. The cost of insurance actually deducted at the beginning of
the policy month in which death occurs, to
-12-
<PAGE>
b. The cost of insurance that should have been deducted at the
insured's true age or sex.
For Ensemble II:
(1) The accumulation value on the date of death; 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 death occurs, to
b. The cost of insurance that should have been deducted at the insured's
true age or sex.
(e) Exchange of Policy
------------------
Ensemble originally provided that the policyowner, during the first twenty-four
(24) policy months, could, with the approval of any irrevocable beneficiary or
assignee, exchange the Ensemble policy without submission of new evidence of
insurability for a flexible premium adjustable life insurance policy. Such
twenty-four (24) month period has expired for all Ensemble policies.
For Ensemble II, no separate exchange provision is provided. Instead, the
policyowner may at any time, while the Policy is in
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<PAGE>
force, transfer all accumulation value to the General Account. This transfer
will not incur the normal transfer fee. While 100% of the accumulation value is
allocated to the General Account, minimum benefits are fixed and guaranteed.
(f) Policyowner Illustrations
-------------------------
It is our intention to utilize field and Home Office microcomputers in preparing
illustrations for Flexible Premium Variable Life Insurance.
General Agents and Agents who are licensed with Chubb Life and with Chubb
Securities Corporation or other broker-dealers who have entered into a selling
agreement with Chubb Securities Corporation will be supplied with diskettes
containing approved illustrations for Flexible Premium Variable Life Insurance.
In addition, Chubb LifeAmerica's field offices, Chubb LifeAmerica's Home Office
in Concord, New Hampshire and Chubb LifeAmerica's service center in Chattanooga,
Tennessee will be supplied such diskettes and will prepare illustrations at the
request of duly registered representatives.
2. "REDEMPTION PROCEDURES": SURRENDER AND RELATED TRANSACTIONS
-----------------------------------------------------------
Set out below is a summary of the principal Policy provisions and administrative
procedures which might be deemed to constitute, either
-14-
<PAGE>
directly or indirectly, a "redemption" transaction. The summary shows that,
because of the insurance nature of the Policies, the procedures involved
necessarily differ in certain significant respects from the procedures for
mutual funds and contractual plans.
(a) Surrender, Partial Surrender/Withdrawal
---------------------------------------
At any time while the Policy is in force, the policyowner may, with the approval
of the irrevocable beneficiary or assignee, if any, request surrender or partial
surrender/withdrawal of the Policy by sending a written request to Chubb Life.
At the time the written request is received, it will be reviewed for
completeness. Incomplete requirements will result in returning the items to the
policyowner for completion.
The amount payable upon surrender of the Policy is the cash value at the end of
valuation period during which the request is received, less any policy debt.
The surrender transaction will be processed upon receipt of the completed
request, with an effective date of the date received. The check will be mailed
to the policyowner within seven (7) days of receipt of the written request.
The policyowner may withdraw part of the Policy's cash value at any time in
which the Policy has cash value. For Ensemble this is referred to as a partial
surrender, for Ensemble II as a withdrawal. The amount payable upon partial
surrender/withdrawal cannot exceed the policy cash value, less any policy debt
at the end of the
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<PAGE>
valuation period during which the request is received. The minimum amount that
may be withdrawn is $500. If for any reason the withdrawal request would be for
an amount less than $500, Chubb Life will furnish the policyowner with a written
explanation of why the request cannot be processed within twenty-four (24)
hours. A partial surrender/withdrawal charge equal to the lesser of $25 or 2% of
the amount of the partial surrender/withdrawal will be deducted from the amount
of each partial surrender/withdrawal. A withdrawal from Ensemble II will also
invoke imposition of a pro-rata portion of any surrender charge.
The partial surrender/withdrawal transaction will be processed the day following
receipt of the request, with an effective date of the date received. A
policyowner may allocate a partial surrender/ withdrawal among the General
Account and the divisions of the Separate Account. If no such allocation is
made, a partial surrender/ withdrawal will be allocated among the General
Account and the divisions of the Separate Account 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 the partial surrender/withdrawal.
The amount payable for a partial surrender/withdrawal request that would cause
the Specified Amount to be reduced to less than $10,000 will be adjusted to the
amount that would reduce the Specified Amount to $10,000. In this event, the
policyowner will be advised in writing when the check for the partial
surrender/withdrawal is sent.
-16-
<PAGE>
For Ensemble II, a surrender charge will be assessed upon surrender or
withdrawal. 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>
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 will equal
the "Guideline Annual Premium" for the increase multiplied by a surrender
factor. The surrender factor depends on the length of time the increase has
been in force, as follows:
-17-
<PAGE>
<TABLE>
<CAPTION>
Increase Year Surrender Factor
<S> <C>
1-5 .150
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 (i) by (ii) and multiplying the result
by (iii) where:
(i) is the amount of the cash value withdrawn
(ii) is the cash value
(iii) is the amount of the surrender charge on a surrender.
(b) Changes in Specified Amount
---------------------------
A policyowner may, by written request, change the Specified Amount subject to
the following conditions:
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<PAGE>
At any time after the first policy anniversary, the policyowner may,
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<PAGE>
with the approval of the irrevocable beneficiary or assignee, if any, decrease
the Specified Amount. At any time after the Policy has been issued, the
policyowner may increase the Specified Amount. Any change is subject to the
following conditions:
(1) Any decrease will become effective on the Monthiversary 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.
The minimum decrease in Specified Amount is $10,000 for Ensemble and $25,000 for
Ensemble II. No decrease may reduce the Specified Amount to less than $10,000
for Ensemble, $25,000 for Ensemble II.
(2) Any request for an increase must be applied for on a supplemental
application and shall be subject to evidence of insurability satisfactory to
Chubb Life; no increases will be allowed over attained age 85. The minimum
increase in Specified Amount is $10,000 for Ensemble and $25,000 for Ensemble
II.
(3) Any change approved by Chubb Life will become effective on the
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<PAGE>
date shown in the Supplemental Policy Specifications Page, which generally will
be the Monthiversary that coincides with or next follows the day the change is
approved, subject to deduction of the first month's cost of insurance from the
cash value of Ensemble and from the accumulation value of Ensemble II.
(4) The policyowner 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 cash value for Ensemble, by the
accumulation value for Ensemble II. Evidence of insurability satisfactory to
Chubb Life 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 cash value for Ensemble, or by the accumulation value
for Ensemble II. The effective date of the change from Option I to Option II
shall be the monthly anniversary date that coincides with or next follows the
date of underwriter approval. The effective date of the change from Option II to
Option I shall be the Monthiversary that coincides with or next follows the day
the request for change is received.
(5) No decrease may reduce the Specified Amount below $10,000 for Ensemble;
for Ensemble II no decrease, other than one resulting from a partial withdrawal,
may reduce the specified amount below $25,000.
When a request for a Specified Amount reduction is received which would cause
the Specified Amount to be less than $10,000 for Ensemble, $25,000 for Ensemble
II, the request will be adjusted to
-22-
<PAGE>
the amount that would reduce the Specified Amount to $10,000 for Ensemble,
$25,000 for Ensemble II. In this event, the policyowner will be advised in
writing as to the reason the requested Specified Amount change cannot be and was
not processed as requested.
(c) Benefit Claims
--------------
While the Policy remains in force, Chubb Life will usually pay a death benefit
to the named beneficiary in accordance with the designated death benefit option
within seven (7) days after receipt of due proof of death of the insured. The
registered representative may deliver the death benefit payment. If the
registered representative intends to deliver the payment, notice will be sent to
the named beneficiary informing him or her of the issuance of the check. If the
registered representative does not intend to deliver the check, the payment
check will be mailed to the named beneficiary. Payment of death benefits may,
however, be postponed due to suicide, misrepresentation and under certain other
circumstances. 4/ The amount of the death benefit is determined at the end of
-
the valuation period during which the insured dies. The amount of the death
benefit proceeds is guaranteed to be not less than the current Specified Amount
of the Policy. These
4/ (A) The New York Stock Exchange is closed other than customary
- -
weekend and holiday closing.
(B) The SEC, by order, permits postponement for the protection of
the policyowners.
(C) An emergency exists, as determined by the SEC, as a result
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<PAGE>
of which disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate Account net
assets.
Proceeds will be reduced by any outstanding policy debt and any due and payable
charges. These proceeds will be increased by any additional insurance provided
by rider. The death benefit may exceed the current Specified Amount of the
Policy. The amount by which the death benefit exceeds the Specified Amount
depends upon the death benefit option in effect, the cash value for Ensemble or
accumulation value for Ensemble II, and the corridor percentage in effect at the
date of death.
For Ensemble, the death benefit under Death Benefit Option I is the greater of
the Specified Amount or the cash value on the date of death multiplied by the
corridor percentage. Under Death Benefit Option II, the death benefit is equal
to the Specified Amount plus the cash value on the date of death subject to the
death benefit never being less than the cash value on the date of death
multiplied by the corridor percentage.
For Ensemble II, the death benefit under Death Benefit Option I, is the greater
of the Specified Amount or the accumulation value on the date of death
multiplied by the corridor percentage. Under Death Benefit Option II, the death
benefit is equal to the Specified Amount plus the accumulation value on the date
of death subject to the death benefit never being less than the accumulation
value on the date of
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<PAGE>
death multiplied by the corridor percentage.
The amount of the benefit payable at maturity is the cash value of the Policy on
the maturity date. These proceeds will be reduced by any outstanding
indebtedness. This benefit will only be paid if the insured is living on the
Policy's maturity date. The Policy will mature on the policy anniversary date
nearest the insured's 95th birthday, if living, or any other policy anniversary
dates mutually agreed upon by Chubb Life and the policyowner. If approved in the
applicable state, an Ensemble II policy will contain an Extension of Maturity
Date Rider which allows a policyowner to extend the maturity date beyond the
maturity date stated in the policy upon written request to the Company and
subject to the terms and conditions set forth in the Rider.
Payments of benefits will be made by Chubb Life out of its General Account and
assets will be transferred from the divisions of the Separate Account to the
General Account.
(d) Policy Loans
------------
The policyowner may, with the approval of the irrevocable beneficiary or
assignee, if any, request a policy loan at any time after the first policy
anniversary. Generally, the maximum amount which may be borrowed at any time is
ninety percent (90%) of the cash value on the date of the loan. Any prior policy
debt will be deducted from any
-25-
<PAGE>
advances made on the loan.
Any premium payments received within thirty (30) days of a policy loan will not
generally be considered in making the loan as the policyowner's check will not
have sufficient time to clear banking channels. However, if the policyowner can
provide Chubb Life proof that the check has cleared the bank, the payment will
be considered in making the loan.
For Ensemble II, the type of loan which Chubb Life 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 the policy at issue as defined in Section 7702 of
the Internal Revenue Code of 1986. If the Specified Amount 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 which Chubb Life grants when the unloaned Type A
balance before the loan is taken exceeds the loan requested.
A Type B loan is a policy loan which Chubb Life grants when the unloaned Type A
balance before the loan is taken is less than or
-26-
<PAGE>
equal to zero.
When the unloaned Type A balance before the loan is taken exceeds zero, but is
less than the loan requested, Chubb Life will grant a Type A loan equal to the
unloaned Type A balance. The remainder of the requested loan will be a Type B
loan. 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. If
the interest due on a loan, either Type A or Type B, remains unpaid when due,
the interest will become principal. Chubb Life will treat that as though it
were a request for a new loan in the principal amount of the unpaid interest;
the calculation of which type of loan is available will take place and the
unpaid interest will become principal of either a Type A or Type B loan.
The interest charged by Chubb Life on a policy loan depends upon the type of
loan. On a Type A loan, Chubb Life will charge an effective interest rate of two
(2) 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.
For Ensemble, there is only one type of loan available. The interest charged by
Chubb Life on an Ensemble policy loan is a maximum effective rate of 8%,
compounded annually or at any loan rate established by Chubb Life for any period
during which the loan is
-27-
<PAGE>
outstanding.
(e) Terminal Illness Accelerated Benefit Rider
------------------------------------------
This rider provides that a policyowner may request an advance of up to 50% of a
policy's eligible death benefit, subject to a $250,000 maximum per insured, if
it is medically determined to Chubb Life's satisfaction that the insured is
terminally ill and has a life expectancy of six months or less.
When Chubb Life receives a notice of a claim under the rider, the Claims
Department sends the policyowner a Claimant's Statement for the policyowner (and
the insured if different from the policyowner) to complete. Chubb Life also
sends an Attending Physician's Statement to be completed by the physician in
order to clarify the insured's medical condition. The Claims Department also
sends the policyowner an illustration of the effects that electing to exercise
the rider will have on the Policy. The completed Claimant's Statement and
Attending Physician's Statement are returned to the Claims Department where a
decision is made on whether or not to approve the request for accelerated
benefits. All benefits paid pursuant to the rider are paid in a lump sum to the
policyowner, or, upon the death of the policyowner, to the estate of the
policyowner.
This rider is offered at no additional premium cost. However, if the rider is
exercised, an actuarial discount, which reflects the early payment of amounts
held under the Policy, will be deducted from the
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<PAGE>
requested portion of the death benefit. The discount will be based on an annual
interest rate which has been declared by Chubb Life and the then current cost of
insurance rate in effect as of the date the policyowner's notice of claim is
received at Chubb Life. The maximum interest rate used will be the greater of
the yield on 90 day treasury bills or the maximum statutory adjustable policy
loan interest rate in effect upon the date of request.
Chubb Life will also deduct from the requested portion of the death benefit the
following:
(1) a prorated portion of any outstanding policy loans, determined by
multiplying the outstanding policy loan times the benefit ratio, where the
benefit ratio is the requested portion of the death benefit divided by the death
benefit;
(2) any premiums which are unpaid within the grace period; and
(3) an administrative expense charge not to exceed $300, provided such
charge shall not exceed the anticipated value of services performed and expenses
incurred in administering 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 death benefit Such reduction will be allocated among the General Account and
the
-29-
<PAGE>
divisions of Separate Account A on a pro rata basis. 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.
3. TRANSFERS
---------
Set forth below is a summary of the administrative procedures which Chubb Life
will utilize in processing transfers between and among the divisions of the
Separate Account and the General Account. The summary shows that, due to the
insurance nature of the Policies, the procedures involved necessarily differ in
certain significant respects from the procedures for mutual funds and
contractual plans.
(a) General
-------
The Separate Account currently has thirteen (13) divisions. Ensemble
policyowners may not allocate premiums to the Money Market Division, the World
Growth Stock Fund, the Gold Stock Fund, the Bond Fund and the Domestic Growth
Stock Fund. Policyowners may transfer amounts between the General Account and
the divisions of the Separate Account and among the divisions of the Separate
Account; for Ensemble II, the initial allocation of premium on the allocation
date will not be subject to the charges and minimums as other transfers. The
total amount transferred each time must be at least $250 unless a lesser amount
represents the entire amount in the General Account or in a division of the
Separate Account. Chubb Life allows policyowners to authorize transfers in
writing or by telephone. In order to make a transfer by telephone, the proper
authorization form must be on file with Chubb Life. The Company will process
transfers and determine all
-30-
<PAGE>
values in connection with transfers at the end of the valuation period during
which the transfer request is received. A transfer charge equal to the lesser of
$25 or ten percent (10%) of the amount transferred will be imposed each time
amounts are transferred and will be deducted from the amount transferred. The
transfer charge is not assessed under Ensemble II if the transfer moves all
accumulation value to the General Account. If a policyowner requests a transfer
which does not meet the minimum required amount, or cannot be processed for any
other reason, Chubb Life will, within 24 hours, provide the policyowner with a
written explanation of why the transfer cannot be processed.
Currently a policyowner may make up to 20 transfers per year, with the first
twelve being free. There is no limit to the number of transfers which may be
made. Should the Company further limit the timing or number of transfers at
some future date, the policyowner will be notified of such change.
(b) Dollar Cost Averaging
---------------------
The Company offers Ensemble II policyowners a feature called Dollar Cost
Averaging. In order to elect this feature, the policyowner must complete the
applicable authorization form. Under this feature a policyowner deposits an
amount, currently subject to a minimum of $3,000, in the Money Market Division
of the Separate Account or in 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. The
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<PAGE>
policyowner is therefore able 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 must currently be at least $250. In addition, a
minimum of 5% of the Periodic Transfer Amount must be transferred to any
specified division. These minimums are subject to change at the Company's
discretion. If a transfer pursuant to this feature would reduce accumulation
value in the Money market Division or the General Account to less than the
Periodic Transfer Amount, the Company has the right to include this remaining
accumulation value in the amount transferred. Automatic transfers pursuant to
this feature will continue until the amount designated for Dollar Cost Averaging
has been transferred, or until the policyowner gives notification of a change in
allocation or cancellation or the feature. This feature is currently available
at no charge to policyowners, although the Company reserves the right to assess
a charge, no greater than cost and with 30 days advance notice to policyowners.
A policyowner may not elect to have Dollar Cost Averaging and Automatic Porfolio
Re-Balancing at the same time. Transfers pursuant to the Dollar Cost Averaging
feature 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. Transfers under this
feature do not count towards the twelve free transfers or the twenty total
transfers currently allowed per year. The Company has the right to
-32-
<PAGE>
modify the terms and conditions of the Dollar Cost Averaging feature upon 30
days advance notice to policyowners.
4. REFUNDS
-------
(a) Free Look Period
----------------
The policyowner, with the approval of the irrevocable beneficiary or assignee,
if any, may cancel the Policy within ten (10) days after receiving it, within 45
days of the date of the execution of the application for insurance, or within 10
days after receipt by mail or personal delivery of a Notice of Right of
Withdrawal, whichever is later. A written request to Chubb Life together with
the Policy will be required. The Policy will be deemed void from the policy
date and all premiums paid will be refunded within seven (7) days of receipt by
Chubb Life of the request. The registered representative will be required to
return any commissions paid in connection with the sale.
(b) Suicide
-------
In the event the insured commits suicide, whether sane or insane, within two (2)
years of the policy date, Chubb Life's liability will be limited to the return
of the premiums paid, less any policy debt and partial surrender/withdrawal. In
the event of suicide within two (2) years of the effective date of any increase
in Specified Amount (i.e. increase in Specified Amount is set forth in Changes
in Existing Insurance Coverage on page seven (7) of the Policy), the
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<PAGE>
only liability of Chubb Life in connection with said increase will be a refund
of the cost of insurance for such increase.
(c) Incontestability
----------------
After the Policy has been in force during the lifetime of the insured for a
period of two (2) years from its policy date or from the date of application or
any medical examination required if later, Chubb Life will not contest the
Policy except for an increase in the Specified Amount. This provision does not
apply to any benefits provided by a rider which grant disability benefits or an
added benefit in the event death results from an accident. Further, Chubb Life
will not contest any increase in the Specified Amount after such increase has
been in force during the lifetime of the insured for two (2) years following the
effective date of said increase.
In the event of contest of the Policy during the first two (2) policy years as
to statements made in the original application, the only liability of Chubb Life
will be a refund of premiums paid less any policy debt and partial
surrender/withdrawal. In the event of a contest during the two years following
an increase in the Specified Amount, the only liability of Chubb Life for such
increase will be a refund of the cost of insurance for such increase. Any
increase will be contestable, within the two (2) year period, only with regard
to statements concerning the increase.
5. BILLING AND COLLECTION PROCEDURES
---------------------------------
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<PAGE>
Chubb Life will assign a separate seven-digit block of numbers to be used as
policy numbers for Flexible Premium Variable Life business. Premium billing
notices will be system-generated and will be mailed by Customer Service
Department personnel together with billing notices for other types of life
insurance. In addition to the unique range of policy numbers, Flexible Premium
Variable Life policies will have the message, "Flexible Premium Variable Life"
on the billing notices to distinguish them from other types of life insurance
contracts.
Flexible Premium Variable Life premiums in response to billing notices will be
sent directly to Chubb Life's bank and deposited in Chubb Life's bank account.
Unsolicited premiums received at Chubb Life's service center in Chattanooga,
Tennessee will be deposited in Chubb Life's account at a local depository bank.
Flexible Premium Variable Life pre-authorized check or debit collections will be
determined from the Flexible Premium Variable Life Administrative System
(VANTAGE-ONE) and subsequently deposited in Chubb Life's bank account.
For convenience, Chubb Life will offer the "List Billing" mode of payment which
allows the employer to deduct premiums from the policyowners' pay checks and
remit the premiums directly to Chubb Life. All Flexible Premium Variable Life
policies, paid as billed, will be entered into the Collection System together
with payments on other life contracts. Premium payments not paid as billed will
be entered into the VANTAGE-ONE System and checks will be deposited into Chubb
Life's account at a local depository bank. When the
-35-
<PAGE>
VANTAGE-ONE system generated reports are received on the day following the
processing of premium payment transactions, the total for deposits other than
Flexible Premium Variable Life deposits will be deducted from the total bank
deposit. This difference will represent the total Flexible Premium Variable Life
deposit, and will be reconciled to the premium clearing entry on the Flexible
Premium Variable Life System accounting journal.
Based on the VANTAGE-ONE system-generated report, funds will be transferred from
Chubb Life's regular bank account to the divisions of the Separate Account for
inclusion in the policyowner's unit holdings.
6. CHANGE IN DIVISION ALLOCATION
-----------------------------
(a) General
-------
The policyowner may change the allocation of future premium payments among the
General Account and the divisions of Separate Account A by written notice or by
telephone, without payment of any fees or penalties. In order to make an
allocation change by telephone, the proper authorization form must be on file
with Chubb Life. The minimum allocation percentage allowed for the General
Account or any division of Separate Account A is five percent (5%) of net
premium, unless the allocation percentage is zero.
The allocation change will be processed with an effective date of the date the
correctly completed written request is received or the
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<PAGE>
telephone request is received.
(b) Automatic Portfolio Re-Balancing
--------------------------------
An Automatic Portfolio Re-Balancing feature is available to Ensemble II
policyowners. This feature provides a method for re-establishing fixed
proportions between various types of investments on a systematic basis. The
policyowner indicates on the applicable authorization form the allocation
percentages he or she wishes to maintain among one or more of the divisions
and/or the General Account. The allocation is then automatically re-adjusted to
this desired allocation on a quarterly, semi-annual or annual basis. The
adjustment occurs 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. There is currently a
minimum of 5% per division or General Account. A policyowner may not elect to
have Dollar Cost Averaging and Automatic Portfolio Re-Balancing at the same
time. Transfers pursuant to adjustments do not count towards the four free
transfers or the twenty transfers currently allowed per year. The Company has
the right to modify the terms and conditions of the Automatic Portfolio Re-
Balancing feature upon 30 days advance notice to policyowners.
7. INCOMPLETE ALLOCATION REQUEST
-----------------------------
If an incomplete written change in premium allocation request is received,
future premium payments will be allocated in accordance with the previous valid
allocation. A letter requesting a corrected
-37-
<PAGE>
allocation request will be sent to the policyowner within twenty-four (24) hours
of receipt of the incomplete allocation request.
8. TELEPHONE TRANSFERS, LOANS AND REALLOCATIONS
--------------------------------------------
Policyowners may request transfers of accumulation value or reallocation of
premiums by telephone, provided that the appropriate authorization form is on
file with Chubb Life. The authorization form also allows the policyowner to
authorize his or her registered representative to request such transaction by
telephone. 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. All restrictions which apply to a transfer, loan or reallocation, as
outlined in the current prospectus, including any charges, apply to transfers,
loans or reallocation by telephone. Any changes which would effect the
telephone authorization, including cancellation, will become effective within 3
days after receipt of written notice from the policyowner. Chubb Life will
require the policyowner's birthdate and social security number or taxpayer
identification number as verification each time the policyowner or registered
representative requests a transfer, loan or reallocation by telephone. Chubb
Life has the option to confirm directly with the policyowner any telephone
transfer or reallocation requests made by the policyowner's authorized
registered representative whenever Chubb Life deems it necessary. Currently,
Chubb Life does not permit a registered representative to request a loan on
behalf of a policyowner. Loan proceeds pursuant to a telephone request will
only
-38-
<PAGE>
be mailed to a policyowner's address currently on file with Chubb Life.
9. COMBINED REQUESTS
-----------------
The policyowner may combine requests for changes in the Specified Amount and the
death benefit option and requests for partial surrenders/withdrawals. Such
combined requests will be considered as a single transaction becoming effective
as of the Monthiversary following the date the last of the requests is
completed. For example, if the combined request consists of a partial
surrender/withdrawal and an increase back to the original Specified Amount,
evidence of insurability will be required for the increase portion of this
combined request. Due to the length of time of the underwriting process, the
partial surrender/withdrawal portion will be delayed until the increase can be
processed, to insure maximum benefit coverage at all times. The policyowner may
submit combined request for any number or combination or changes not addressed
above. These requests will be processed in the order and with timing to ensure
fair, reasonable and beneficial treatment relative to the policyowner.
10. UNPAID CHECKS
-------------
When an unpaid item is received, a suspense account will be charged for the
amount of the check. The policyowner will be notified in writing of the unpaid
item and given ten (10) days to make the
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<PAGE>
payment before any action is taken. The registered representative of record will
receive a copy of the letter.
If the item remains open after the 14th day, a premium reversal will be made
effective the date of the original premium payment and the General Account of
Chubb Life will absorb the gain or loss of this backdated transaction.
Commissions paid as a result of the original premium payment will be recovered.
If the item is covered within the fourteen (14) day period, the policyowner will
receive the investment results effective from the day of the original
transaction.
11. NOTIFICATIONS
-------------
Written policyowner notifications will be sent to the policyowner promptly when
selected transactions are processed. Transactions which will be documented
include, but are not limited to, the following:
(a) Scheduled premium payments that are billed by direct notice, pre-
authorized premium payments and any payment not-paid-as billed
(b) Loan Repayments
(c) Transfers; including the initial allocation transfer from the
General Account on the allocation date and dollar cost averaging
(d) Premium Reallocations, including portfolio rebalancing
(e) Partial Surrenders/Withdrawals
(f) Increases or Decreases in Specified Amount
-40-
<PAGE>
(g) Reinstatements
(h) Policy Issue
(i) Beneficiary/Ownership Changes
(j) Assignment/Release of Assignment
(k) Refunds
(l) Loans
(m) Surrenders
(n) Lapses
(o) First Premium Payments
(p) Unpaid Checks
12. ROLE OF CHUBB SECURITIES
------------------------
Chubb Securities will be responsible for administering the Flexible Premium
Variable Life Policy under the guidelines of the various state and federal laws
and the rules, regulations, and requirements of the NASD. Chubb Securities'
personnel will be registered representatives or principals except for clerical
support. The duties to be performed by Chubb Securities include, but are not
limited to:
(a) Approving suitability of applications for insurance and investment
in Separate Account A,
(b) Reviewing certain items identified in 13. and 14., after being
processed by the appropriate department in order to insure they
were processed correctly.
13. ROLE OF CHUBB LIFE POLICY ISSUE AND UNDERWRITING DEPARTMENT
-----------------------------------------------------------
-41-
<PAGE>
After an application has been approved for suitability requirements by Chubb
Securities, the application is processed by the Underwriting Department for
selection of the risk. The Policy Issue Department issues, prepares and mails
the completed Policy to the registered representative for delivery to the
policyowner.
14. ROLE OF CHUBB LIFE CUSTOMER SERVICE DEPARTMENT
----------------------------------------------
The Customer Service Department will process the following, based on review and
authorization by Chubb Securities:
(a) Billings,
(b) Premium Collections,
(c) Depositing of funds,
(d) Processing partial surrender/withdrawals, surrenders, loans,
transfers, lapses, refunds, reinstatements, loan repayments, and
assignments,
(e) Change of address, unpaid checks, reallocation of funds, and
transfer of funds,
(f) Documenting any items in Number 12 which Chubb Securities is not
documenting.
(g) Beneficiary and ownership changes, increases and decreases in
Specified Amount and changes of Policy Type between Option I and
Option II.
(h) Handling correspondence and inquires,
(i) Documenting Not-Paid-as-Billed Premium Payments, Transfers of
funds, Surrenders, and Reallocations of
-42-
<PAGE>
funds,
(j) Reviewing and authorizing policyowner requests for refunds,
changes of ownership, reallocations of funds, and transfers of
funds,
-43-
<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>
EXHIBIT 14
POWERS OF ATTORNEY
<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.
11/22/96 /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.
11/20/96 /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.
11/22/96 /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.
11/25/96 /s/ James I. Cash, Jr.
- ----------------------------- --------------------------------------
(Date) (Signature)
James I. Cash, Jr.
--------------------------------------
(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.
11/25/96 /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.
12/2/96 /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.
12/2/96 /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.
11/25/96 /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.
11/20/96 /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.
12/2/96 /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.
11/25/96 /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.
11/24/96 /s/ Raymond G.H. Seitz
- ----------------------------- --------------------------------------
(Date) (Signature)
Raymond G.H. Seitz
---------------------------------------
(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.
11/26/96 /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.
12/2/96 /s/ Richard D. Wood
- ----------------------------- ----------------------------------
(Date) (Signature)
Richard D. Wood
----------------------------------
(Please Print or Type Name)
