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As filed with the Securities and Exchange Commission on April 15, 1998
FILE NO. 33-7734
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 16
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:
JPF SEPARATE ACCOUNT A
(FORMERLY CHUBB SEPARATE ACCOUNT A)
B. Name of depositor:
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
(FORMERLY CHUBB LIFE INSURANCE COMPANY OF AMERICA)
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
Jefferson Pilot Securities Corporation
One Granite Place
Concord, NH 03301
Copies to:
Charlene Grant, Esq. Joan E. Boros, Esq.
Jorden, Burt, Boros, Ciochetti,
Jefferson Pilot Financial Insurance Company Berenson & Johnson LLP
One Granite Place 1025 Thomas Jefferson Street, N.W.
Concord, NH 03301 Suite 400 East
Washington, D.C. 20007-0805
---------------
It is proposed that this filing will become effective (check appropriate
box)
[X] immediately upon filing 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, 1997 on March 31, 1998.
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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ENSEMBLE II
JPF SEPARATE ACCOUNT A
INDIVIDUAL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ISSUED BY
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ONE GRANITE PLACE
CONCORD, NEW HAMPSHIRE 03301
(603) 226-5000
The Flexible Premium Variable Life Insurance Policy ("Policy") currently
offered by Jefferson Pilot Financial Insurance Company ("JP Financial"),
formerly Chubb Life Insurance Company of America, 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 JPF 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 JP Financial's General Account on the allocation
date. Each division of Separate Account A will invest solely in a
corresponding portfolio (a "Portfolio") of Jefferson Pilot Variable Fund,
Inc., Templeton Variable Products Series Fund, Fidelity Variable Insurance
Products Fund, Fidelity Variable Insurance Products Fund II, Oppenheimer
Variable Account Funds or MFS Variable Insurance Trust (collectively, the
"Funds"). Prior to the allocation date the net premiums paid will be deposited
in JP Financial'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, JP Financial will reimburse, within seven
days from the date the Policy is surrendered to JP Financial, 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 twenty 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 JP Financial'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.
ENSEMBLE II VARIABLE UNIVERSAL LIFE INSURANCE POLICIES AND SHARES OF THE
FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED BY ANY BANK. THEY ARE
NOT FEDERALLY INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. INVESTING IN
THE CONTRACTS INVOLVES CERTAIN INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
PRINCIPAL INVESTED.
PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
DEFINITIONS.......................................................... 3
SUMMARY.............................................................. 4
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY.......................... 10
JPF SEPARATE ACCOUNT A............................................... 10
THE FUNDS............................................................ 10
THE POLICY........................................................... 16
General............................................................ 16
Payment of Premiums................................................ 16
Premium Limitations................................................ 16
Allocation of Premiums............................................. 16
Transfers.......................................................... 17
Telephone Transfers, Loans and Reallocations....................... 18
Policy Lapse....................................................... 18
Reinstatement...................................................... 19
Policy "Free Look"................................................. 19
CHARGES AND DEDUCTIONS............................................... 19
Premium Charges.................................................... 19
Monthly Deduction.................................................. 19
Risk Charge........................................................ 20
Surrender Charge................................................... 20
Administrative Fees................................................ 22
Other Charges...................................................... 22
POLICY BENEFITS AND RIGHTS........................................... 22
Death Benefits..................................................... 22
Guaranteed Death Benefit........................................... 23
Combined Requests.................................................. 23
Maturity of the Policy............................................. 23
Optional Insurance Benefits........................................ 23
Settlement Options................................................. 25
CALCULATION OF ACCUMULATION VALUE.................................... 25
Unit Values........................................................ 26
Net Investment Factor.............................................. 26
CASH VALUE BENEFITS.................................................. 26
Surrender Privileges............................................... 27
Policy Loans....................................................... 27
</TABLE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
OTHER MATTERS........................................................ 29
Voting Rights...................................................... 29
Additions, Deletions or Substitutions of Investments............... 29
Annual Summary..................................................... 29
Confirmation....................................................... 29
Limitation on Right to Contest..................................... 30
Misstatements...................................................... 30
Suicide............................................................ 30
Beneficiaries...................................................... 30
Postponement of Payments........................................... 30
Assignment......................................................... 30
Illustration of Benefits and Values................................ 30
Non-Participating Policy........................................... 31
THE GENERAL ACCOUNT.................................................. 31
General Description................................................ 31
The Policy......................................................... 31
General Account Benefits........................................... 31
General Account Accumulation Value................................. 31
Determination of Charges........................................... 32
Premium Deposit Fund............................................... 32
DISTRIBUTION OF THE POLICY........................................... 32
Group or Sponsored Arrangements.................................... 33
MANAGEMENT OF JP FINANCIAL........................................... 34
Executive Officers and Directors of JP Financial................... 34
STATE REGULATION OF JP FINANCIAL..................................... 35
FEDERAL TAX MATTERS.................................................. 35
Tax Considerations................................................. 35
Policy Proceeds.................................................... 35
Charge for JP Financial Income Taxes............................... 38
EMPLOYEE BENEFIT PLANS............................................... 38
LEGAL PROCEEDINGS.................................................... 38
EXPERTS.............................................................. 38
REGISTRATION STATEMENT............................................... 38
FINANCIAL STATEMENTS................................................. 38
ILLUSTRATIONS........................................................ Appendix A
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. JP FINANCIAL DOES NOT AUTHORIZE ANY
INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PRO-
SPECTUS 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 JP Financial 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 JP Financial 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 JP Financial. 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 JP Financial, prior to 4:00 P.M. New
York City time, on which a notice or premium payment is received at JP
Financial'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--Jefferson Pilot Variable Fund, Inc., Templeton Variable Products
Series Fund, Fidelity Variable Insurance Products Fund, Fidelity Variable
Insurance Products Fund II, Oppenheimer Variable Account Funds and MFS
Variable Insurance Trust series mutual funds.
General Account--The assets of JP Financial 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 JP Financial.
Separate Account A--JPF Separate Account A, a separate investment account
created by JP Financial to receive and invest net premiums paid under the
Policy and other flexible premium variable life insurance policies offered by
JP Financial.
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 that the Company and the New York Stock Exchange are
open for business, as of the close of regular trading on the New York Stock
Exchange, which is currently 4:00 P.M. New York City time. In addition to
being closed on all federal holidays, the Company will also be closed on Good
Friday, the Friday following Thanksgiving and the day before or following
Christmas.
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
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 Jefferson Pilot Financial Insurance Company ("JP
Financial"), 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 JPF
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."
Variations from the information contained in this prospectus due to
individual state regulations are described in endorsements to the policy.
Policyowners should consult their policies for definitive information.
JPF Separate Account A. Separate Account A is a separate account established
by JP Financial 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 twenty divisions, each of which buys shares
at net asset value of the corresponding portfolio (a "Portfolio") of Jefferson
Pilot Variable Fund, Inc., Templeton Variable Products Series Fund, Fidelity
Variable Insurance Products Fund, Fidelity Variable Insurance Products Fund II,
MFS Variable Insurance Trust or Oppenheimer Variable Account Funds (the
"Funds"). Separate Account A is administered and accounted for as part of the
general business of JP Financial, 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 JP Financial conducts. The assets of Separate Account A are not
chargeable with liabilities arising out of any other business conducted by JP
Financial. 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.
Over the life of the Ensemble II contract net premiums may be allocated among a
total of seventeen divisions of Separate Account A.
4
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If the Date of Receipt of the initial premium is prior to the date JP
Financial either issues the Policy or offers to issue the Policy on a basis
other than as applied for, and that initial premium exceeds $500, the net
premium, less any monthly deductions, will be credited with interest at the
rate currently being credited to the General Account. This amount will be
credited with interest for the period between the Date of Receipt of the
premium (or the policy date, whichever is later) and the date JP Financial
issues the Policy or the applicant refuses JP Financial's offer to issue the
Policy on a basis other than as applied for. In those instances when JP
Financial 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. JP Financial will retain any interest earned on the initial net
premium. Prior to the allocation date the initial net premium will be deposited
in JP Financial's General Account.
The Funds. Jefferson Pilot Variable Fund, Inc., formerly The 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 JP Financial or its affiliated
insurance companies to fund variable life insurance policies and variable
annuity contracts.
Jefferson Pilot Variable Fund, Inc. presently has eleven classes of stock,
each representing a Portfolio having a specific investment objective. The
present Portfolios of Jefferson Pilot Variable Fund, Inc. are the World Growth
Stock Portfolio, the International Equity Portfolio, the Money Market
Portfolio, the Global Hard Assets Portfolio, the High Yield Bond Portfolio,
the Domestic Growth Stock Portfolio, the Growth Portfolio, the Growth and
Income Portfolio, the Capital Growth Portfolio, the Balanced Portfolio and the
Emerging Growth Portfolio. In the future Jefferson Pilot Variable Fund, Inc.
may add or delete Portfolios. The investment manager to Jefferson Pilot
Variable Fund, Inc. is Jefferson Pilot Investment Advisory Corporation ("JP
Investment Advisory"), formerly Chubb Investment Advisory Corporation, a
wholly-owned subsidiary of JP Financial.
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 JP Financial, 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, two of which (Equity Income Portfolio and Growth Portfolio)
offer their 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 JP Financial, 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.
MFS Variable Insurance Trust is an open end management investment company,
currently consisting of twelve separate mutual fund series, two of which, MFS
Research and MFS Utilities, offer their shares to a corresponding division of
Separate Account A. MFS Variable Insurance Trust offers its shares to separate
accounts of insurance companies, including companies not affiliated with JP
Financial, as an investment vehicle for variable life and variable annuity
contracts. Massachusetts Financial Services Company ("MFS") is the investment
manager of the MFS Research Series and the MFS Utilities Series.
The Oppenheimer Variable Account Funds is an open-end, diversified management
investment company consisting of nine separate funds, two of which, the
Oppenheimer Strategic Bond Fund and the Oppenheimer Bond Fund (available
January 16, 1998), offer their shares to a corresponding division of Separate
Account A. The Oppenheimer Variable Account Funds offer shares to separate
accounts of insurance companies, including companies not affiliated with JP
Financial, as an investment vehicle for variable life and variable annuity
contracts. OppenheimerFunds, Inc. is the investment manager of the Oppenheimer
Strategic Bond Fund and the Oppenheimer Bond Fund.
5
<PAGE>
Over the life of an Ensemble II contract, policyowners may allocate net
premiums to a total of seventeen divisions of Separate Account A.
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, JP Financial 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. JP Financial will return
any excess premiums if the total of all premiums, scheduled and unscheduled,
will exceed these limits. JP Financial 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".
JP Financial reserves the right to limit the amount of any increase in premium
payment. Subject to the foregoing limitations, a policyowner may make
additional premium payments at any time prior to the maturity date of the
Policy. See "THE POLICY--Payment of Premiums".
Failure to pay premiums in accordance with the schedule of Planned Periodic
Premiums will not automatically cause the Policy to lapse. It will lapse only
when the cash value less outstanding policy debt is insufficient to pay the
monthly deduction and a grace period expires without a sufficient payment by
the policyowner. Conversely, payment of premiums in accordance with the
schedule of Planned Periodic Premiums does not necessarily mean that the Policy
will remain in force. See "THE POLICY--Policy Lapse".
Death Benefit. The death benefit under the Policy is the amount payable to the
named beneficiary when the person insured under the Policy dies. All or part of
the death benefit may be paid in cash or applied under one or more of the
payment options available under the Policy. See "POLICY BENEFITS AND RIGHTS--
Settlement Options". The death benefit will be reduced by the amount of any
outstanding policy debt or unpaid monthly deduction.
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 JP Financial. The minimum increase in Specified
Amount is $25,000.
3. Any change approved by JP Financial 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 JP
Financial 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
6
<PAGE>
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 (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) JP Financial deducts 2.5% of each premium payment (2.35% in California)
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 JP Financial 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.
JP Financial 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, JP Financial 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".
7
<PAGE>
(e) JP Financial 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. JP Financial 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) JP Financial reserves the right to charge the assets of each division of
Separate Account A to provide for any income taxes payable by JP Financial 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 JP Financial's sole discretion,
if the interest rate currently credited to the General Account falls below 6%,
the accumulation value held in the General Account for loan collateral may
continue to earn interest at 6%.
A policy loan accrues interest at a maximum rate of 8% compounded annually, or
at any lower rate established by JP Financial 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.
JP Financial will cancel the Policy if it is returned by mail or personal
delivery to JP Financial 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. JP Financial 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 JP Financial's General Account; JP Financial 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 JP Financial 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."
8
<PAGE>
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. JP Financial 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 JP Financial and are registered
representatives of 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. JP Financial believes it is
presently in compliance with the regulations and intends to remain in
compliance with such regulations and other federal tax law requirements.
JP Financial may charge each division in Separate Account A for its portion of
any income tax charged to JP Financial 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".
9
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
Jefferson Pilot Financial Insurance Company ("JP Financial") 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 May 1, 1998, JP
Financial was known as Chubb Life Insurance Company of America ("Chubb Life").
Prior to July 1, 1991, Chubb Life was known as The Volunteer State Life
Insurance Company. On July 1, 1991 Chubb Life redomesticated from the State of
Tennessee to the State of New Hampshire and is now a New Hampshire life
insurance company. 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.
Effective May 1, 1998, Chubb Life changed its name to Jefferson Pilot
Financial Insurance Company. JP Financial's home office and service center are
located at One Granite Place, Concord, New Hampshire 03301, telephone number
800-258-3648.
JP Financial and its subsidiaries had total assets, at December 31, 1997, of
$4,919,934 and had over $64 billion of insurance in force, while total assets
of Jefferson-Pilot Corporation, as of the same date, were approximately $23
billion.
JP Financial 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. JP Financial is currently rated AAA by
Duff & Phelps, AA (Excellent) by Standard & Poors's, 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 JP Financial and JP
Financial's ability to meet its contractual obligations to its policyowners.
Even though assets in Separate Account A are held separately from JP
Financial's other assets, ratings of JP Financial may still be relevant to
policyowners since not all of JP Financial's contractual obligations relate to
payments based on those segregated assets.
JPF SEPARATE ACCOUNT A
JPF Separate Account A (formerly known as "Chubb Separate Account A") is a
separate account of JP Financial 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 JP Financial by the Commission. JP Financial 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 JP Financial may
conduct.
JP Financial holds the assets of Separate Account A. These assets are kept
physically segregated and held separate and apart from the General Account. JP
Financial maintains records of all purchases and redemptions of Funds shares
by each of the divisions.
Divisions. Separate Account A presently has twenty 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 Jefferson Pilot Variable Fund, Inc.
(formerly The Chubb America Fund, Inc.), the Templeton International Fund of
Templeton Variable Products Series Fund, the Equity Income Portfolio of the
Fidelity Variable Insurance Products Fund, the Growth 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, the Research Portfolio of the
MFS Variable Insurance Trust, the Utilities Portfolio of the MFS Variable
Insurance Trust, the Strategic Bond Portfolio of the Oppenheimer Variable
Account Funds, or the Bond Portfolio of the Oppenheimer Variable Account
Funds.
10
<PAGE>
Jefferson Pilot Variable Fund, Inc. (formerly The Chubb America Fund, Inc.)
Jefferson Pilot Variable Fund, Inc. is organized as a Maryland corporation and
is registered as an open-end diversified management company under the 1940
Act. The Jefferson Pilot Variable Fund, Inc. currently has eleven Portfolios,
each of which has different investment objectives. The shares of each series
of Jefferson Pilot Variable Fund, Inc. stock are presently offered only to the
divisions of separate accounts of JP Financial and its affiliated life
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 manager to Jefferson Pilot Variable Funds, Inc., is Jefferson
Pilot Investment Advisory Corporation ("JP Investment Advisory") (formerly
Chubb Investment Advisory Corporation), which is an affiliate of JP Financial.
JP Investment Advisory and the Fund have contracted with nine unaffiliated
companies, Templeton Global Advisors, Limited ("Templeton"), Lombard Odier
International Portfolio Management Limited ("Lombard Odier"), Van Eck
Associates Corporation ("Van Eck Associates"), Pioneering Management
Corporation ("Pioneer"), Janus Capital Corporation ("Janus"), J.P. Morgan
Investment Management, Inc. ("Morgan"), Massachusetts Financial Services
Company ("MFS"), Strong Capital Management, Inc. ("Strong"), and Warburg
Pincus Asset Management, Inc., formerly Warburg Pincus Counsellors, Inc.
("Warburg") (collectively the "Sub-Investment Managers") to act as sub-
investment managers or advisers to the World Growth Stock, International
Equity, Global Hard Assets, Domestic Growth Stock, Capital Growth, Balanced,
High Yield Bond, Emerging Growth and Money Market, Growth, and Growth and
Income Portfolios, respectively. The fees of the Sub-Investment Managers are
paid directly by the Investment Manager.
Investment management fees are paid to JP Investment Advisory monthly at an
annual rate based on a percentage of the average daily net assets of each
Portfolio of Jefferson Pilot Variable Fund, Inc. as shown below:
<TABLE>
<CAPTION>
WORLD GROWTH STOCK,
GLOBAL HARD ASSETS,
DOMESTIC GROWTH STOCK, HIGH YIELD
GROWTH AND INCOME, CAPITAL EMERGING BOND AND INTERNATIONAL
AVERAGE DAILY NET ASSETS MONEY MARKET AND BALANCED GROWTH GROWTH GROWTH EQUITY
- ------------------------ ------------ ---------------------- ------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
First $200 Million...... .50% .75% 1.00% .80% .75% 1.00%
Next $1.1 Billion....... .45% .70% .95% .75% .75% 1.00%
Over $1.3 Billion....... .40% .65% .90% .70% .75% 1.00%
</TABLE>
The compensation of the Sub-Investment Managers is paid directly from the
investment management fees of JP 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
-----------------------------------------------
AVERAGE DAILY NET ASSETS JANUS TEMPLETON VAN ECK PIONEER
- ------------------------ ------- --------------- ------------ ----------
<S> <C> <C> <C> <C>
First $200 Million...... .75% .50% .50% .50%
Next $1.1 Billion....... .70% .45% .45% .45%
Over $1.3 Billion....... .65% .40% .40% .40%
<CAPTION>
MFS MFS MFS
NET ASSETS WARBURG EMERGING GROWTH MONEY MARKET HIGH YIELD MORGAN
---------- ------- --------------- ------------ ---------- ------
<S> <C> <C> <C> <C> <C>
First $100 Million...... .50% .40% .30% .40% .45%
Next $100 Million....... .50% .40% .30% .40% .40%
Next $200 Million....... .50% .40% .25% .40% .35%
Over $400 Million....... .50% .40% .25% .40% .30%
<CAPTION>
NET ASSETS STRONG LOMBARD ODIER
---------- ------- ---------------
<S> <C> <C>
First $25 Million....... .60% .50%
Next $75 Million........ .50% .50%
Next $50 Million........ .40% .50%
Over $150 Million....... .30% .50%
</TABLE>
11
<PAGE>
The investment objectives of each Portfolio of Jefferson Pilot Variable 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. Such
companies will be those considered by the sub-investment manager to be
undervalued or which are well-managed and have good growth potential. Any
income realized from such investments will be incidental.
International Equity Portfolio: to achieve long-term capital appreciation by
investing substantially all of its total assets in equity and equity-related
securities of companies from countries outside of the United States.
Money Market Portfolio: to achieve the highest possible level of current
income, consistent with preservation of capital and maintenance of liquidity,
by investing primarily in short-term money market instruments. An investment
in the Money Market Portfolio is neither insured nor guaranteed by the U.S.
Government.
Global Hard Assets Portfolio: to seek long-term capital appreciation by
investing primarily in "Hard Asset Securities." Income is a secondary
consideration.
High Yield Bond Portfolio: to achieve a high level of current income by
investing primarily in corporate obligations with emphasis on higher-yielding,
higher risk, lower-rated or unrated securities.
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 to be undervalued in
light of the company's earning power and growth potential.
Growth Portfolio: to achieve capital growth by investing primarily in equity
securities believed by the Portfolio's sub-adviser to have above-average
growth prospects.
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. Dividend and
interest income from portfolio securities, if any, is incidental to the
Portfolio's investment objective of long-term growth. The Portfolio is
intended for investors who understand and are willing to accept risks entailed
in seeking long-term growth of capital.
Jefferson Pilot Variable 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. Jefferson Pilot Variable 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 several separate series and offers 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 JP Financial, as
an investment vehicle for variable life insurance policies and variable
annuity contracts.
12
<PAGE>
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 JP Financial 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.
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 two of
the series, Equity Income Portfolio and Growth Portfolio, offers their shares
to corresponding divisions 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 JP Financial, 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, Growth Portfolio and Equity
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:
Equity Income Portfolio: seeks reasonable income by investing primarily in
income-producing equity securities.
Growth Portfolio: seeks capital appreciation by investing primarily in common
stocks.
Contrafund Portfolio: seeks long term capital appreciation.
13
<PAGE>
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 JP Financial 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.
MFS Variable Insurance Trust (the "MFS Trust") is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts by a Declaration of Trust dated February 1,
1994. The Trust offers insurance company separate accounts a selection of
investment vehicles for variable annuity and variable life insurance
contracts. Currently the Trust offers shares of beneficial interest of twelve
separate mutual fund series, two of which, MFS Research Series and MFS
Utilities Series, offer their shares to a corresponding division of Separate
Account A.
The Trust's Board of Trustees, as part of its overall management
responsibility, oversees various organizations responsible for each Series'
day-to-day management. Massachusetts Financial Services Company ("MFS") or the
("Adviser"), a Delaware corporation, is the investment adviser to each Series.
For its services and facilities, MFS receives a management fee computed and
paid monthly, in an amount equal to the following rates of the average daily
net assets of each Series:
<TABLE>
<CAPTION>
PERCENTAGE OF THE AVERAGE
DAILY NET ASSETS
SERIES OF EACH SERIES
------ -------------------------
<S> <C>
Research Series............................... 0.75%
Utilities Series.............................. 0.75%
</TABLE>
MFS or its affiliates will pay a fee to JP Financial equal, on an annualized
basis, to 0.15% of the aggregate net assets of each Series, attributable to
Contracts offered by separate accounts of JP Financial or its affiliates. Such
fees will not be paid by the Series, its shareholders or by the Contract
holders.
The investment objectives of each Series of the Trust are set forth below:
Research Series: seeks to provide long-term growth of capital and future
income by investing a substantial proportion of its assets in equity
securities of companies believed to possess better than average prospects for
long-term growth.
Utilities Series: seeks capital growth and current income (incomes above that
available from a portfolio invested entirely in equity securities) by
investing, under normal circumstances, at least 65% (but up to 100% at the
discretion of the Adviser) of its assets in equity and debt securities of both
domestic and foreign companies in the utilities industry.
Oppenheimer Variable Account Funds (the "Oppenheimer Trust") is an open-end
diversified management investment company organized in 1984 as a Massachusetts
business trust. The Oppenheimer Trust consists of nine separate funds, two of
which, the Bond Fund and the Strategic Bond Fund, offer their shares to a
corresponding division of Separate Account A.
The Oppenheimer Variable Account Funds are managed by OppenheimerFunds, Inc.,
which is responsible for selecting the Funds' investments and handling its
day-to-day business.
The monthly management fee payable to the Manager is computed separately on
the net assets of each Fund as of the close of business each day. The
management fee rates for the Bond Fund and the Strategic Bond Fund are as
follows: 0.75% of the first $200 million of average annual net assets, 0.72%
of the next $200 million, 0.69% of the next $200 million, 0.66% of the next
$200 million, 0.60% of the next $200 million and 0.50% of average annual net
assets over $1 billion.
Oppenheimer or its affiliates will pay a fee to JP Financial equal, on an
annualized basis, to 0.10% of the aggregate net assets of the Bond Fund and
0.15% for the Strategic Bond Fund attributable to contracts offered by JP
Financial or its affiliates. Such fees will not be payable by the Funds, their
shareholders or by the Contract holders.
The investment objectives of each Portfolio of the Oppenheimer Variable
Account Funds in which Separate Account A invests are set forth below:
14
<PAGE>
Bond Fund: primarily seeks a high level of current income from investment in
high yield fixed-income securities rated "Baa" or better by Moody's or "BBB"
or better by Strandard & Poor's. Secondarily, this Fund seeks capital growth
when consistent with its primary objective. The Bond Fund will be available to
policyowners on January 16, 1998.
Strategic Bond Fund: seeks a high level of current income principally derived
from interest on debt securities and seeks to enhance such income by writing
covered call options on debt securities.
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.
15
<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 JP
Financial through the agent selling the Policy. JP Financial 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. JP Financial
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 JP Financial or
its affiliates exceeds $1,250,000, JP Financial 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 JP Financial's insurance underwriting
rules and JP Financial 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 JP Financial or through an
authorized agent of JP Financial for forwarding to JP Financial. In addition,
JP Financial has instituted administrative procedures whereby premium payments
in response to billing notices are sent directly to JP Financial'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 JP Financial 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, JP Financial 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, JP
Financial 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, JP Financial 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 JP Financial'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
the divisions of Separate Account A by written notice to JP Financial or by
telephone, provided that the proper telephone
16
<PAGE>
authorization is on file with JP Financial, without payment of any fee or
penalty. Over the life of the contract, a policyowner may allocate net
premiums to a total of seventeen of the twenty divisions of Separate Account
A.
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 JP Financial 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 JP Financial 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 JP Financial'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 JP Financial. 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, JP Financial 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, JP Financial
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
17
<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.
JP Financial 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 JP
Financial 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 JP Financial'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, JP Financial
reserves the right to include such remaining accumulation value in the amount
transferred.
Dollar Cost Averaging will continue until the policyowner gives notification
of cancellation of the feature. Any amounts deposited into the Repository
Account will be transferred. Dollar Cost Averaging is currently available at
no charge to policyowners. Although JP Financial 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 JP Financial 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. JP Financial
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 JP Financial.
JP Financial may also, in its discretion, permit loans to be made by
telephone, provided that the proper authorization form is on file with JP
Financial. Only the Policyowner may request loans by telephone. A policyowner
must provide JP Financial with personal identification information, such as
social security number and date of birth, at the time of such request for
verification purposes. Although procedures have been established that are
reasonably designed to reduce the risk of unauthorized telephone transfers,
loan requests or allocation changes, there still exists some risk. Neither JP
Financial, Jefferson Pilot Variable 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
18
<PAGE>
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 JP Financial 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
JP Financial, 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, JP Financial 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. JP Financial will
cancel the Policy if it is returned by mail or personal delivery to JP
Financial 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.
JP Financial 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 JP Financial's General Account; JP Financial 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,
JP Financial will deduct a premium tax charge of 2.5% (which represents an
average of premium taxes imposed), unless otherwise required by state law
(2.35% in California). This charge may not be increased.
Monthly Deduction. On the first day of each policy month beginning on the
policy date, JP Financial 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 JP Financial for
underwriting and start-up expenses incurred in connection with the issuance of
a Policy, certain administrative expenses, the cost of insurance for the
Policy and any optional benefits added by rider. The amount deducted will be
deducted pro-rata from each of the divisions and the General Account.
The amount of the monthly deduction is equal to (i) the cost of insurance for
the Policy, as described below, and the cost of additional benefits provided
by rider, plus (ii) a monthly administrative charge of $6.00. The monthly
administrative charge may not be increased.
The cost of insurance for the Insured is determined on a monthly basis, and
is determined separately for the initial Specified Amount and each subsequent
increase in the Specified Amount. The monthly current cost of insurance rate
is based on the sex, issue age, policy year, rating class of the Insured, and
the Specified Amount of the Policy. If we assume two Insureds differ only with
regard to one of the above bases, the effect of each of these bases on their
monthly cost of insurance rates would be as follows:
Sex: The cost of insurance rates for males will be greater than or equal
to those for females.
Issue Age: The cost of insurance rate for the younger Insured will be less
than or equal to that for the older Insured.
19
<PAGE>
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 JP Financial'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 JP Financial
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. JP Financial 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 JP Financial for its assumption of certain
mortality and expense risks in connection with the Policy. Specifically, JP
Financial bears the risk that the total amount of death benefit payable under
the Policy will be greater than anticipated and JP Financial 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, JP Financial 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
20
<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 JP Financial for the cost of selling
the Policy. The cost includes advertising and the printing of the Prospectus
and sales literature. Also, JP Financial reimburses Jefferson Pilot Variable
Corporation for all commissions Jefferson Pilot Variable Corporation pays to
agents. JP Financial 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, JP Financial will cover such
expenses from its surplus, which may include profits, if any, from the
mortality and expense risk charge.
21
<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
JP Financial 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. JP Financial also reserves the right to charge the assets of
each division to provide for any income taxes or other taxes payable by JP
Financial 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 JP
Financial 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>
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<PAGE>
The death benefit option in effect may be changed by sending JP Financial 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
JP Financial'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 JP Financial's underwriter approval of such request for
change. Evidence of insurability satisfactory to JP Financial 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 JP Financial. 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 JP
Financial 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, JP Financial
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 JP
Financial. 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
23
<PAGE>
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, JP Financial 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, JP Financial imposes an administrative
expense charge not to exceed the lesser of the actual cost of administering
the exercise of the rider or $300. JP Financial 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 JP Financial 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.
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<PAGE>
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 JP Financial in
writing. A lump sum payment of proceeds under the Policy will be made if a
settlement option is not designated. Any amount left with JP Financial for
payment under an optional payment plan will be transferred to the account of
the beneficiary in the General Account on the date JP Financial 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. JP Financial 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 JP Financial 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 JP Financial.
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 JP Financial.
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.
25
<PAGE>
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 JP Financial 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
26
<PAGE>
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 JP Financial. 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, JP Financial 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 JP Financial 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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<PAGE>
Proceeds of policy loans ordinarily will be disbursed within seven days from
the Date of Receipt of a request for a loan by JP Financial, although payments
may be postponed under certain circumstances. See "OTHER MATTERS--
Postponement of Payments". JP Financial may, in its discretion, permit loans
to be made by telephone if the proper authorization form is on file with JP
Financial. 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 JP Financial'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.
JP Financial 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.
JP Financial may, in its sole discretion, charge lower interest rates in the
future. If the loan interest rate is ever less than 8%, JP Financial can
increase the rate once each policy year but by not more than 1% per year. With
respect to outstanding policy loans, JP Financial will send notice of any
change in the interest rate to the policyowner and any assignee of record at
JP Financial 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, JP Financial 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 JP
Financial 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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<PAGE>
OTHER MATTERS
Voting Rights. To the extent required by law, JP Financial 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, JP Financial
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. JP Financial 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 JP Financial, including
shares for which no voting instructions have been received, shares held in
Separate Account A representing charges imposed by JP Financial against
Separate Account A under the Policies and shares held by JP Financial that are
not otherwise attributable to Policies, will also be voted by JP Financial in
proportion to instructions received from the owners of variable life insurance
policies funded through Separate Account A. JP Financial 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.
JP Financial 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,
JP Financial may disregard voting instructions in favor of changes initiated
by a policyowner in the investment policy or the investment adviser of the
Funds if JP Financial 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 JP Financial 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 JP Financial or any
affiliate of JP Financial which have similar investment objectives. In the
event that JP Financial 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. JP Financial 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 JP Financial's management,
further investment in shares of the Funds should become inappropriate in view
of the purposes of the Policy, JP Financial 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. JP Financial 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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<PAGE>
(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. JP Financial 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 JP Financial 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 JP Financial 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 JP Financial. 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. JP Financial
must be notified in writing if the Policy has been assigned. Each assignment
will be subject to any payments made or action taken by JP Financial prior to
its notification of such assignment. JP Financial 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 JP Financial
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 JP Financial. No dividends are payable with respect to the
Policy.
Year 2000 Matter. Certain computer programs have been written using two
digits rather than four to define the applicable year. As a result, any of
Jefferson-Pilot Corporation's computer programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000 (the "Year 2000 Matter"). This could result in a system failure which may
disrupt operations, including an inability to accurately process or calculate
new or in-force business.
Jefferson-Pilot Corporation (the Company's parent company) has completed an
assessment and has determined that it will have to modify or replace portions
of the software and hardware utilized by Jefferson-Pilot Corporation
affiliates, including the Company, so that the computer systems will function
properly with respect to dates in the year 2000 and thereafter.
Jefferson-Pilot Corporation will utilize both internal and external resources
to reprogram, replace, convert and test software and hardware for any
necessary Year 2000 modifications. The project is estimated to be completed
not later than the third quarter of 1999. Jefferson-Pilot Corporation believes
that with modifications to its existing software and hardware and conversions
to new software, the Year 2000 Matter will not pose significant operational
problems for its computer systems. However, if such modifications and
conversions are not made, or are not completed on a timely basis, the Year
2000 Matter could have a material impact on operations of the Company.
Jefferson-Pilot Corporation has initiated formal communications with all of
its significant suppliers to determine the extent to which the Company's
systems, policies, procedures and contracts are vulnerable to those third
parties' failure to remediate their own Year 2000 issues. There is no
guarantee that the systems of other companies on which the Company relies will
be in compliance on a timely basis; nor is there any guarantee that non-
compliance would not have an adverse affect on the Company's systems and
business.
The costs of the project and the date on which the Jefferson-Pilot
Corporation believes it will be compliant are based on management's best
estimates, which were derived utilizing various assumptions of future events,
including the continued availability of certain resources and other factors.
However, there can be no guarantee that these estimates will be achieved.
Jefferson-Pilot Corporation has not yet allocated the costs of compliance
among its subsidiaries, including the Company. To the best of Jefferson-Pilot
Corporation and the Company's knowledge, it is currently anticipated that any
future allocation is unlikely to have a material financial impact on the
Company.
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 JP FINANCIAL 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 JP
Financial other than those in Separate Account A and other separate accounts
which may be established by JP Financial. Subject to applicable law, JP
Financial 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, JP Financial 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. JP Financial is not obligated to credit interest at any
higher rate, although JP Financial may, in its sole discretion, do so.
If the Date of Receipt of the initial premium is prior to the date JP
Financial 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
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<PAGE>
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 JP
Financial issues the Policy or the applicant refuses JP Financial'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 JP Financial 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; JP
Financial 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.
JP Financial 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. JP Financial 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
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 JP FINANCIAL. 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.
JP Financial 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 JP Financial 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, JP Financial 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.
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<PAGE>
DISTRIBUTION OF THE POLICY
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for JP Financial, are also registered representatives of
broker-dealers who have entered into written sales agreements with the
principal underwriter, Jefferson Pilot Variable Corporation. 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 products of this type.
Commissions are payable under various schedules and accordingly will vary with
the form of commission schedule selected. In any event, commissions to
registered representatives are not expected to exceed 85% of first year target
premium and 5% of first year excess premium, and 5% of target premium for the
second through fifteenth policy years for both renewals and excess premium.
Compensation arrangements vary among broker-dealers. In addition, override
payments, expense allowances and bonuses based on specific production levels
may be paid. Alternative Commission Schedules will reflect differences in up-
front commissions versus ongoing asset-based compensation. Except as
previously described herein, no separate deductions from premiums are made to
pay sales commissions or sales expenses.
The Distribution Agreement with Jefferson Pilot Variable Corporation took
effect on January 1, 1998 and continues until terminated by either party on 60
days notice. Jefferson Pilot Variable Corporation is not obligated to sell any
specified amount of Policies and may not assign its responsibilities under the
Distribution Agreement. JP Financial will reimburse Jefferson Pilot Variable
Corporation for its expenses under the Distribution Agreement.
Prior to January 1, 1998, a Distribution Agreement with Jefferson-Pilot
Securities Corporation ("JP Securities") (formerly Chubb Securities
Corporation) was in effect. The aggregate amounts paid to Chubb Securities
Corporation under the prior Distribution Agreement were $25,959,043 in 1997,
$22,502,715 in 1996 and $15,333,468 in 1995. JP Financial reimbursed JP
Securities for its expenses under the prior Distribution Agreement.
Jefferson Pilot Variable 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 JP Financial (and its
affiliated companies), and for the Jefferson Pilot Variable Fund, Inc.
(formerly the Chubb America Fund, Inc.).
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 JP Financial and
its affiliates.
JP Financial 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. JP Financial 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, JP Financial
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 JP Financial policy or contract or policies or contracts
of any affiliates of JP Financial.
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 JP Financial's company practice in effect
when the Policy is issued. The elimination or modification of underwriting
requirements will be done in accordance with JP Financial'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 JP FINANCIAL
Executive Officers and Directors of JP Financial
DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND
NAME BUSINESS ADDRESS
- ---- ------------------------
<S> <C>
Dennis R. Glass........ Senior Vice President,
Chief Financial Officer and Treasurer
Jefferson-Pilot Corporation
(also serves as Executive Vice President, Chief Financial
Officer and Treasurer of Jefferson-Pilot Life Insurance
Company)
100 North Greene Street
Greensboro, North Carolina 27401
Kenneth C. Mlekush..... Senior Vice President
(also serves as Executive Vice President of Jefferson-Pilot
Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401
David A. Stonecipher... President, Chairman and Chief Executive Officer
(also serves as President and Chief Executive Officer of
Jefferson-Pilot
Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401
E. Jay Yelton.......... Executive Vice President
Jefferson-Pilot Life Insurance Company
100 North Greene Street
Greensboro, North Carolina 27401
</TABLE>
EXECUTIVE OFFICERS (OTHER THAN DIRECTORS)
<TABLE>
<CAPTION>
NAME POSITION
- ---- --------
<S> <C>
Charles C. Cornelio................... Executive Vice President
Reggie D. Adamson..................... Senior Vice President
Ronald R. Angarella................... Senior Vice President
John C. Ingram........................ Senior Vice President
Hal B. Phillips, Jr. ................. Senior Vice President, Chief Life Actuary
Warren L. Reynolds.................... Senior Vice President
Paul J. Strong........................ Senior Vice President
John W. Wells......................... Senior Vice President
James R. Abernathy.................... Vice President
Thomas M. Bodrogi..................... Vice President
Margaret O. Cain...................... Vice President
Rebecca M. Clark...................... Vice President
Kenneth S. Dwyer...................... Vice President
Ronald H. Emery....................... Vice President
Donald M. Kane........................ Vice President
Patrick A. Lang....................... Vice President
Shari J. Lease........................ Vice President
Donna L. Metcalf...................... Vice President
Thomas E. Murphy, Jr., M.D. .......... Vice President and Medical Director
Robert A. Reed........................ Vice President
Kenneth L. Robinson, Jr. ............. Vice President
James M. Sandelli..................... Vice President
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION
- ---- --------
<S> <C>
Russell C. Simpson................................. Vice President and Treasurer
William A. Spencer................................. Vice President
John A. Thomas..................................... Vice President
</TABLE>
STATE REGULATION OF JP FINANCIAL
Jefferson Pilot Financial Insurance Company 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 JP Financial as of
December 31 of the preceding year. Periodically, the Commissioner examines the
assets and liabilities of JP Financial and Separate Account A and verifies
their adequacy and a full examination of JP Financial's operations is
conducted by the Commissioner at least every five years.
In addition, JP Financial 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 JP Financial, 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. JP
Financial 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
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<PAGE>
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.
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. JP Financial 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, JP Financial 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 JP Financial makes the payment. In addition, if a policyowner fails to
provide JP Financial with a correct taxpayer identification number (usually a
social security number) or if the Treasury notifies JP Financial 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
36
<PAGE>
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. JP Financial suggests that policyowners consult with a tax
adviser or attorney as to the tax implications of these matters.
In the event that a Policy is owned by the trustee under a pension or profit
sharing plan, or similar deferred compensation arrangement, the tax
consequences of ownership or receipt of proceeds under the Policy could differ
from those stated herein. However, if ownership of such a Policy is
transferred from the plan to a plan participant (upon termination of
employment, for example), the Policy will be subject to all of the federal tax
rules described above. A Policy owned by a trustee under such a plan may be
subject to restrictions under ERISA and a tax adviser should be consulted
regarding any applicable ERISA requirements.
The Policy may also be used in various arrangements, including nonqualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans and others, where the tax consequences may vary
depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax consequences of
ownership or receipt of policy proceeds depend upon the circumstances of each
policyowner and beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. JP Financial 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. JP Financial, however, has
reserved certain rights to alter the Policy and investment alternatives so as
to comply with such regulation or ruling. JP Financial 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. JP Financial 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, JP Financial believes that this rider, as
structured and implemented by JP Financial, 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.
37
<PAGE>
Charge for JP Financial Income Taxes. JP Financial 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 JP Financial
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 JP Financial's
federal income taxes, or provisions for such taxes, that may be attributable
to Separate Account A. JP Financial may charge each division in Separate
Account A for its portion of any income tax charged to JP Financial on the
division or its assets. Under present laws, JP Financial 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, JP Financial may
decide to make charges for such taxes or provisions for such taxes against
Separate Account A. JP Financial would retain any investment earnings on any
tax charges accumulated in a division. Any such charges against Separate
Account A or its divisions could have an adverse effect on the investment
experience of such division.
EMPLOYEE BENEFIT PLANS
Employers and employee organizations should consider, in consultation with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of a Policy in connection with an employment-related insurance or
benefit plan. The United States Supreme Court held, in a 1983 decision, that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account A is a party or to
which the assets of any of the divisions thereof are subject. JP Financial 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 consolidated financial statements of Chubb Life Insurance Company of
America and subsidiaries and the financial statements of Separate Account A at
December 31, 1997 and for the related periods, 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 Richard
Dielensnyder, 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, JP Financial 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 consolidated financial statements of Chubb Life Insurance Company of
America and subsidiaries which are included in this Prospectus should be
considered only as bearing on the ability of JP Financial to meet its
obligations under the Policy. They should not be considered as bearing on the
investment experience of the assets held in Separate Account A.
38
<PAGE>
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.
39
<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 (a wholly-owned subsidiary of Jefferson Pilot
Corporation as of April 30, 1997--see Note 1) and subsidiaries as of December
31, 1997 on a purchase accounting basis (Successor), and the related
consolidated statement of income, stockholder's equity, and cash flows for the
eight month period ended December 31, 1997 on a purchase accounting basis
(Successor) and for the four month period ended April 30, 1997 on a historical
cost basis (Predecessor). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 consolidated financial position of Chubb Life
Insurance Company of America and subsidiaries at December 31, 1997 on a
purchase accounting basis (Successor), and the consolidated results of their
operations and their cash flows for the eight month period ended December 31,
1997 on a purchase accounting basis (Successor), and for the four month period
ended April 30, 1997 on a historical cost basis (Predecessor), in conformity
with generally accepted accounting principles.
February 9, 1998
F-1
<PAGE>
CONSOLIDATED BALANCE SHEET
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)
<TABLE>
<S> <C>
ASSETS
Invested assets
Debt securities, available-for-sale, at fair value (amortized
cost--$2,878,984)................................................ $2,993,384
Equity securities, available-for-sale, at fair value (cost--
$15,087)......................................................... 18,984
Policy loans...................................................... 236,729
Mortgage loans on real estate..................................... 125,067
----------
Total investments................................................... 3,374,164
----------
Cash and cash equivalents........................................... 28,288
Accrued investment income........................................... 50,724
Uncollected premiums................................................ 4,475
Due from reinsurers................................................. 219,131
Deferred policy acquisition costs................................... 38,200
Value of business acquired.......................................... 418,665
Cost in excess of net assets acquired, net of accumulated amortiza-
tion of $2,852..................................................... 146,893
Property and equipment, net of accumulated depreciation of $1,111... 17,845
Federal income taxes receivable..................................... 7,952
Deferred federal income taxes....................................... 39,184
Assets held in separate accounts.................................... 598,039
Other assets........................................................ 39,312
----------
1,608,708
----------
$4,982,872
==========
LIABILITIES
Policy liabilities
Policyholder contract deposits.................................... $2,634,029
Future policy benefits............................................ 615,976
Policy and contract claims........................................ 64,716
Premiums paid in advance.......................................... 1,436
Other policyholders' funds........................................ 107,578
----------
Total policy liabilities............................................ 3,423,735
Liabilities related to separate accounts............................ 598,039
Accrued expenses and other liabilities.............................. 87,949
----------
4,109,723
Commitments and contingent liabilities
STOCKHOLDER'S EQUITY:
Common stock, par value $5 per share, 600,000 shares authorized,
issued and outstanding........................................... 3,000
Paid in capital................................................... 782,500
Retained earnings................................................. 53,717
Net unrealized gains on securities, net of deferred income taxes
of $18,271....................................................... 33,932
----------
873,149
----------
$4,982,872
==========
</TABLE>
See accompanying notes.
F-2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
------------ -----------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31, APRIL 30,
1997 1997
------------ -----------
<S> <C> <C>
REVENUES
Premiums and policy charges..................... $235,247 $117,385
Net investment income........................... 158,181 82,056
Realized investment gains....................... 4,788 3,473
Other income.................................... 3,303 1,087
-------- --------
Total revenues.................................... 401,519 204,001
BENEFITS AND EXPENSES
Policy benefits and claims...................... 217,622 108,274
Commissions and operating expenses, net of
deferrals...................................... 65,344 10,098
Amortization of intangibles..................... 35,842 38,206
-------- --------
Total benefits and expenses....................... 318,808 156,578
Income from continuing operations before federal
income tax....................................... 82,711 47,423
Federal income tax (benefit):
Current......................................... 14,422 20,596
Deferred........................................ 14,572 (7,926)
-------- --------
28,994 12,670
-------- --------
Income from continuing operations................. 53,717 34,753
Discontinued operations:
Adjustment to reduce estimated losses during
phase-out period, net of taxes of $3,206....... -- 6,006
-------- --------
Net income........................................ $ 53,717 $ 40,759
======== ========
</TABLE>
See accompanying notes.
F-3
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
NET
UNREALIZED TOTAL
COMMON PAID IN RETAINED GAINS ON STOCKHOLDER'S
STOCK CAPITAL EARNINGS SECURITIES EQUITY
------ -------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Predecessor balances, Decem-
ber 31, 1996............... $3,000 $249,872 $595,536 $17,622 $866,030
Net income.................. -- -- 40,759 -- 40,759
Dividends declared.......... -- -- (103,008) -- (103,008)
Net change in unrealized
gains on available-for-sale
securities................. -- -- -- (10,708) (10,708)
------ -------- -------- ------- --------
Predecessor balances, April
30, 1997................... 3,000 249,872 533,287 6,914 793,073
Purchase accounting adjust-
ments...................... -- 532,628 (533,287) (6,914) (7,573)
------ -------- -------- ------- --------
Successor balances, May 1,
1997....................... 3,000 782,500 -- -- 785,500
Net income.................. -- -- 53,717 -- 53,717
Net change in unrealized
gains on available-for-sale
securities................. -- -- -- 33,932 33,932
------ -------- -------- ------- --------
Successor balances, December
31, 1997................... $3,000 $782,500 $ 53,717 $33,932 $873,149
====== ======== ======== ======= ========
</TABLE>
See accompanying notes.
F-4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
------------ -----------
EIGHT MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31, APRIL 30,
1997 1997
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................ $ 53,717 $ 40,759
Adjustments to reconcile net income to net cash pro-
vided by (used in) operating activities:
Decrease in future policy benefits, policy and
contract claims and premiums paid in advance, net.. (11,066) 6,070
Credits to policyholders accounts................... (65,949) (36,595)
Decrease (increase) in uncollected premiums......... 4,297 (2,990)
Increase in policy acquisition costs deferred, net
of amortization.................................... (38,200) (7,907)
Net (capitalization) amortization of value of
business acquired.................................. (3,159) 1,284
Decrease in accrued investment income............... 704 1,045
Realized investment gains........................... (4,788) (3,473)
Amortization (accretion) of investment premiums
(discounts) ....................................... 5,719 (277)
Provision for depreciation.......................... 1,210 2,485
Provision for deferred income tax................... 14,572 (7,926)
Increase (decrease) in federal income tax payable... (10,332) (10,988)
Change in receivables and asset accruals............ 48,461 (6,880)
Change in payables and expense accruals............. 9,313 (46,398)
Other operating activities, net..................... 570 (6,865)
--------- ---------
Net cash provided by (used in) operating activities... 5,069 (78,656)
INVESTING ACTIVITIES
Proceeds from sales of debt securities................ 205,590 199,970
Proceeds from maturities of debt securities........... 98,301 40,743
Proceeds from sales of equity securities.............. 10,386 18,343
Purchases of debt securities.......................... (379,041) (203,214)
Purchases of equity securities........................ (322) (6,284)
Policy loans issued, net of repayments................ (14,652) (4,219)
Mortgage loans, net of repayments..................... (117,136) 1,016
Other investing activities, net....................... 4,185 28,254
--------- ---------
Net cash (used in) provided by investing activities... (192,689) 74,609
FINANCING ACTIVITIES
Deposits credited to policyholders' funds............. 343,754 139,658
Withdrawals from policyholders' funds................. (108,331) (49,006)
Dividends paid........................................ (101,004) (2,004)
Decrease in loans payable............................. (51,142) (303)
--------- ---------
Net cash provided by financing activities............. 83,277 88,345
--------- ---------
Net (decrease) increase in cash and cash equivalents.. (104,343) 84,298
Cash and cash equivalents, beginning of period........ 132,631 48,333
--------- ---------
Cash and cash equivalents, end of period.............. $ 28,288 $ 132,631
========= =========
</TABLE>
See accompanying notes.
F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
1.BASIS OF PRESENTATION
NATURE OF OPERATIONS
Chubb Life Insurance Company of America (the Company) is a wholly-owned
subsidiary of Jefferson-Pilot Corporation (Jefferson-Pilot) and 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.
ACQUISITION
Jefferson-Pilot acquired the Company from Chubb Corporation on May 13, 1997,
with an effective date of April 30, 1997. The acquisition was accounted for as
a purchase, utilizing "pushdown" accounting, and the assets and liabilities
were recorded at fair value as of April 30, 1997. For purposes of these
financial statements, the consolidated statements of income, stockholder's
equity, and cash flows for the four months ended April 30, 1997 represent the
results of operations of the "Predecessor", and are presented on the
historical basis of accounting. The consolidated statements of income,
stockholder's equity, and cash flows for the eight months ended December 31,
1997 represent the results of operations of the "Successor" and are presented
on a purchase accounting basis. As a result, the consolidated financial
statements subsequent to the acquisition date (Successor) are not comparable
to the consolidated financial statements prior to the acquisition date
(Predecessor).
The cost of the acquisition by Jefferson-Pilot was $785,500,000, including
all acquisition costs. The final purchase price is subject to post-closing
adjustments, none of which is expected to be material. In addition,
immediately prior to the acquisition, the Company declared a $103,000,000
dividend to the Chubb Corporation.
The preliminary adjustments as a result of allocation of the pushed down
purchase price and the determination of the cost in excess of net assets
acquired is as follows:
<TABLE>
<S> <C>
Stockholder's equity as reported by Predecessor................ $ 793,073
Fair value adjustments:
Debt securities--available-for-sale.......................... (899)
Property and equipment....................................... (14,285)
Deferred policy acquisition costs............................ (667,865)
Value of business acquired................................... 447,344
Deferred federal income tax.................................. 108,669
Cost in excess of net assets acquired........................ 87,274
Other assets................................................. (329)
Policy liabilities........................................... 49,577
Accrued expenses and other liabilities....................... (17,059)
---------
Total.......................................................... $ 785,500
=========
</TABLE>
The following proforma results of operations for the year ended December 31,
1997, assume that the acquisition occurred as of January 1, 1997. The proforma
results have been prepared for comparative purposes only and do not purport to
indicate the results of operations which would have actually been reported had
the acquisition occurred on January 1, 1997, or which may occur in the future
(in thousands):
<TABLE>
<S> <C>
Net revenues.................................................... $496,530
Net income before realized investment gains (net of taxes)...... 70,658
Net income...................................................... 26,713
</TABLE>
F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
1.BASIS OF PRESENTATION (CONTINUED)
DISCONTINUED OPERATIONS
In 1996, the Predecessor adopted a plan to exit the group insurance
business. Accordingly, the group health insurance business was accounted for
as a discontinued operation in the consolidated income statement for the four
months ended April 30, 1997. As a result of the decision by the Predecessor in
1996 to discontinue the group health insurance business, a liability was
established to cover any future losses from operations and costs to exit the
business including severance for employees. The amount reflected in the
statement of income for the Predecessor reflects an adjustment to the future
estimated losses, net of taxes during the phase-out period.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
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), and
Chubb America Service Corporation. Significant intercompany transactions have
been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions affecting the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities as of the
date of the financial statements, and the reported amounts of revenues and
expenses for the reporting period. Those estimates are inherently subject to
change and actual results could differ from those estimates. Included among
the material (or potentially material) reported amounts and disclosures that
require extensive use of estimates are asset valuation allowances, policy
liabilities, deferred policy acquisition costs, value of business acquired and
the potential effects of resolving litigated matters.
CASH AND CASH EQUIVALENTS
The Company includes with cash and cash equivalents its holdings of short
term investments which are highly liquid investments that mature within three
months of the date of acquisition.
INVESTED ASSETS
Debt securities, 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. Debt
securities 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 considered available-for-sale and 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 stated at the unpaid balances, net of
allowances for unrecoverable amounts. The Company's mortgage loan portfolio is
comprised primarily of conventional real estate mortgages collateralized by
retail (13%), apartment (41%), industrial (9%), hotel (29%) and office (8%)
properties.
F-7
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Mortgage loan underwriting standards emphasize the credit status of a
prospective borrower, quality of the underlying collateral and conservative
loan-to-value relationships. Of stated mortgage loan balances as of December
31, 1997, 30% are due from borrowers in West South Central states, 22% are due
from borrowers in South Atlantic states, 18% are due from borrowers in Pacific
states, 12% are due from borrowers in East North Central states and 12% are
due from borrowers in Mountain states. No other geographic region represents
as much as 10% of December 31, 1997 mortgage loans.
Realized gains and losses on dispositions of securities are determined by
the specific identification method. Unrealized appreciation or depreciation of
investments classified as available-for-sale, net of the deferred policy
acquisition costs and value of business acquired adjustments and the
applicable deferred income tax, is excluded from income and credited or
charged directly to a separate component of stockholder's equity.
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 different portfolios in a series fund. Each of the portfolios has
specific investment objectives and the investment income and investment gains
and losses accrue directly to, and investment risk is borne by, the
policyholders. Accordingly, operating results of the separate account are not
included in the consolidated statements of income.
Policy claims that are charged to expense include claims incurred in the
period in excess of related policy account balances. Other policy benefits
include interest credited to universal life and other interest-sensitive life
insurance policies. Interest crediting rates ranged from 4% to 6.875%.
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 policy
charges assessed against the contract holders. Interest crediting rates ranged
from 3.5% to 6.75%.
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.
F-8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
POLICY AND CONTRACT CLAIMS
The liability for policy and contract claims consists of the estimated
amount payable for claims reported but not yet settled, and an estimate of
claims incurred but not reported, which is based on historical experience,
adjusted for trends and circumstances. Management believes that the recorded
liability is sufficient to provide for the associated claims adjustment
expenses.
REINSURANCE
Reinsurance receivables include amounts recoverable from reinsurers related
to paid benefits and estimated amounts related to unpaid policy and contract
claims, future policy benefits and policyholder contract deposits. The cost of
reinsurance is accounted for over the terms of the underlying reinsured
policies using assumptions consistent with those used to account for the
policies.
DEFERRED POLICY ACQUISITION COSTS
Costs related to obtaining new business, including commissions, certain
costs of underwriting and issuing policies and certain agency office expenses,
all of which vary with and are primarily related to the production of new
business, have been deferred.
Deferred policy acquisition costs for traditional life insurance polices are
amortized over the premium paying periods of the related contracts using the
same assumptions for anticipated premium revenue that are used to compute
liabilities for future policy benefits. For universal life and investment
products, these costs are amortized at a constant rate based on the present
value of the estimated future gross profits to be realized over the terms of
the contracts, not to exceed 25 years.
The carrying amount of deferred policy acquisition costs is adjusted for the
effect of realized gains and losses and the effects of unrealized gains or
losses on debt securities classified as available-for-sale. Deferred policy
acquisition costs are reviewed periodically to determine that the unamortized
portion does not exceed expected recoverable amounts. No impairment
adjustments have been reflected in earnings for any period presented.
VALUE OF BUSINESS ACQUIRED
Value of business acquired represents the actuarially determined present
value of anticipated profits to be realized from life insurance and annuity
business purchased, using the same assumptions used to value the related
liabilities. Amortization of the value of business acquired occurs over the
related contract periods, using current crediting rates to accrete and a
constant amortization rate based on the present value of expected future
profits.
Value of business acquired 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 net unrealized gains on securities component of stockholder's
equity, net of applicable deferred income tax.
COST IN EXCESS OF ASSETS ACQUIRED
The preliminary excess of Jefferson-Pilot's purchase price over the fair
value of assets acquired, which has been "pushed down" to the Chubb Life level
for financial reporting purposes, is being amortized on a straight-line basis
over 35 years.
F-9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 remaining useful lives of the assets.
FEDERAL INCOME TAXES
The Predecessor will file a consolidated federal income tax return with its
parent for the four months ended April 30, 1997. Federal income tax for the
Predecessor is allocated as if the Company and its subsidiaries filed a
separate consolidated income tax return. The Successor will file a separate
consolidated income tax return for the eight months ended December 31, 1997
and include only the Company and its subsidiaries.
Deferred income tax assets are recorded on the differences between the tax
bases of assets and liabilities and the amounts at which they are reported in
the financial statements. Recorded amounts are adjusted to reflect changes in
income tax rates and other tax law provisions as they become enacted.
NEW ACCOUNTING PRONOUNCEMENT
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS
130, "Reporting Comprehensive Income", which is effective for fiscal years
beginning after December 15, 1997. SFAS 130 sets standards for the reporting
and display of comprehensive income and its components in financial
statements. Application of the new rule will not impact the Company's
financial position or net income. The Company expects to adopt this
pronouncement in the first quarter of 1998, which will include the
presentation of comprehensive income for prior periods presented for
comparative purposes, as required by SFAS 130. The primary element of
comprehensive income applicable to the Company is changes in unrealized gains
and losses on securities classified as available-for-sale.
3.DERIVATIVES
USE OF DERIVATIVES
The Company's investment policy permits the use of derivative financial
instruments such as interest rate swaps in certain circumstances. At December
31, 1997, ten such interest rate swaps are held to modify specific floating-
rate direct investments. The notional amount is $50 million, with the Company
receiving an average fixed rate of 7.36% and paying a floating rate based on
the 3 month or 6 month LIBOR rates (5.81% and 5.84%, respectively, on December
31, 1997).
The interest rate swaps are used to reduce the impact of interest rate
fluctuations on specific floating-rate direct investments. Interest is
exchanged periodically on the notional value, with the Company receiving a
fixed rate and paying a short-term LIBOR rate on a net exchange basis. The net
amount received or paid under this swap is reflected as an adjustment to
investment income. All of the hedges are of investments classified as
available-for-sale, and net unrealized gains and losses, net of the effects of
income taxes and the impact on deferred policy acquisition costs and the value
of business acquired, are not significant and are included in net unrealized
gains on securities in stockholder's equity as of December 31, 1997.
CREDIT AND MARKET RISK
The Company is exposed to credit risk in the event of non-performance by
counterparties to swap agreements. The Company limits this exposure by
entering into swap agreements with counterparties having high credit ratings
and by regularly monitoring the ratings.
The Company's credit exposure on swaps is limited to the fair value of swap
agreements that are favorable to the Company. The Company does not expect any
counterparty to fail to meet its obligation; however, non-performance would
not have a material adverse effect on the Company's financial position or
results of operations.
F-10
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
3.DERIVATIVES (CONTINUED)
The Company's exposure to market risk is mitigated by the offsetting effects
of changes in the value of swap agreements and the related direct investments.
The Company routinely monitors correlation between hedged items and hedging
instruments. In the event a hedge relationship was terminated, any related
hedging instrument that remained would be marked-to-market.
4.INVESTED ASSETS
Aggregate amortized cost, aggregate fair value and gross unrealized gains
and losses of debt securities available-for-sale at December 31, 1997 were as
follows (in thousands):
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury obligations and di-
rect obligations of U.S. govern-
ment agencies..................... $ 190,938 $ 5,146 $ -- $ 196,084
Corporate bonds.................... 1,955,816 94,941 (7,030) 2,043,727
Foreign bonds...................... 637 -- (29) 608
Mortgage-backed securities......... 729,671 21,831 (419) 751,083
Redeemable preferred stocks........ 1,922 50 (90) 1,882
---------- -------- ------- ----------
Total debt securities.............. $2,878,984 $121,968 $(7,568) $2,993,384
========== ======== ======= ==========
</TABLE>
Aggregate amortized cost and aggregate fair value of debt securities at
December 31, 1997 by contractual maturity were as follows (in thousands):
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
---------- ----------
<S> <C> <C>
Due in one year or less.................................. $ 85,421 $ 85,637
Due after one year through five years.................... 236,911 241,483
Due after five years through ten years................... 547,657 570,656
Due after ten years...................................... 595,626 639,796
Amounts not due at a single maturity date................ 1,413,369 1,455,812
---------- ----------
$2,878,984 $2,993,384
========== ==========
</TABLE>
Actual future maturities will differ from the contractual maturities shown
because the issuers of certain debt securities have the right to call or
prepay the amounts due to the Company, with or without penalty.
F-11
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
4.INVESTED ASSETS (CONTINUED)
The sources of net investment income for the Successor and Predecessor for
1997 were as follows: (in thousands):
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
----------- -----------
EIGHT
MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31 APRIL 30
1997 1997
----------- -----------
<S> <C> <C>
Debt securities......................................... $144,632 $75,964
Equity securities....................................... 778 379
Policy loans............................................ 11,115 5,281
Mortgage loans.......................................... 1,818 267
Other................................................... 2,242 1,095
-------- -------
Gross investment income................................. 160,585 82,986
Investment expenses..................................... 2,404 930
-------- -------
Net investment income................................... $158,181 $82,056
======== =======
</TABLE>
Realized investment gains and losses on available-for-sale securities were
as follows (in thousands):
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
----------- -----------
EIGHT
MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31 APRIL 30
1997 1997
----------- -----------
<S> <C> <C>
Debt securities......................................... $4,788 $3,658
Equity securities....................................... -- (185)
------ ------
$4,788 $3,473
====== ======
</TABLE>
The changes in unrealized gains on securities classified as available-for-
sale for the Successor and Predecessor for 1997 were as follows (in
thousands):
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
----------- -----------
EIGHT
MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31 APRIL 30
1997 1997
----------- -----------
<S> <C> <C>
Change in unrealized appreciation of equity securi-
ties.................................................. $ 3,897 $ (3,488)
Change in unrealized appreciation of debt securities... 114,400 (29,369)
Change in deferred policy acquisition costs adjust-
ment.................................................. -- 15,305
Change in value of business acquired adjustment........ (66,094) 1,080
-------- --------
52,203 (16,472)
Deferred income taxes.................................. (18,271) 5,764
-------- --------
$ 33,932 $(10,708)
======== ========
</TABLE>
F-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
5.DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED
Policy acquisition costs deferred and the related amortization charged to
income for both the Successor and Predecessor were as follows (in thousands):
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
----------- -----------
EIGHT
MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31 APRIL 30
1997 1997
----------- -----------
<S> <C> <C>
Beginning balance...................................... $ -- $644,653
Deferral:
Commissions.......................................... 26,240 37,512
Other................................................ 13,179 6,589
------- --------
39,419 44,101
Amortization........................................... (1,219) (36,194)
Change in adjustment to reflect the effects of
unrealized gains on securities........................ -- 15,305
------- --------
Ending balance......................................... $38,200 $667,865
======= ========
</TABLE>
Changes in the value of business acquired for both the Successor and
Predecessor were as follows (in thousands):
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
----------- -----------
EIGHT
MONTHS FOUR MONTHS
ENDED ENDED
DECEMBER 31 APRIL 30
1997 1997
----------- -----------
<S> <C> <C>
Beginning balance...................................... $481,600 $34,460
Capitalized cost....................................... 34,929 --
Amortization........................................... (31,770) (1,284)
Change in adjustment to reflect the effects of
unrealized gains on securities........................ (66,094) 1,080
-------- -------
Ending balance......................................... $418,665 $34,256
======== =======
</TABLE>
Expected approximate amortization percentages of the value of business
acquired as of December 31, 1997 over the next five years are as follows (in
thousands):
<TABLE>
<CAPTION>
AMORTIZATION
PERCENTAGE
------------
<S> <C>
Year Ending December 31:
1998............................................................. 11.6%
1999............................................................. 11.3
2000............................................................. 10.2
2001............................................................. 9.1
2002............................................................. 8.4
</TABLE>
6.FEDERAL INCOME TAXES
Federal income tax provisions for both the Successor and the Predecessor
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. The statutory federal
corporate tax rate was equal to the effective tax rate for the Successor, as
there were minimal permanent differences. The statutory federal corporate tax
rate differed from the effective tax rate for the Predecessor due to a change
in estimate of the tax liability.
F-13
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
6.FEDERAL INCOME TAXES (CONTINUED)
The tax effects of temporary differences that gave rise to deferred income
tax liabilities and assets at December 31, 1997 were as follows (in
thousands):
<TABLE>
<S> <C>
Deferred income tax liabilities:
Value of business acquired.......................................... $157,695
Net unrealized gains on securities.................................. 18,271
Other............................................................... 2,406
--------
Total................................................................. 178,372
Deferred income tax assets:
Future policy benefits and policy fund balances..................... 133,839
Deferred policy acquisition costs................................... 61,466
Other assets........................................................ 12,578
Group contingency reserve........................................... 3,080
Due and deferred premiums........................................... 2,232
Severance and relocation............................................ 2,089
Other............................................................... 2,272
--------
Total................................................................. 217,556
--------
Net deferred income tax asset......................................... $ 39,184
========
</TABLE>
Under prior federal income tax law, one-half of the excess of a life
insurance company's income from operations over its taxable investment income
was not taxed, but was set aside in a special tax account designated as
"Policyholders' Surplus". The Company has approximately $13.5 million of
untaxed "Policyholders' Surplus" on which no payment of federal income taxes
will be required unless it is distributed as a dividend, or under other
specified conditions. The Company does not believe that any significant
portion of the account will be taxed in the foreseeable future and no related
deferred tax liability has been recognized. If the entire balance of the
account became taxable under the current federal rate, the tax would
approximate $4.7 million.
Federal income taxes paid in 1997, including amounts remitted to the
Predecessor's parent for its share of income taxes were $30,694,000 for the
Successor and $24,081,000 for the Predecessor.
7.PENSIONS
The Company's defined benefit pension plan for both the Successor and the
Predecessor have been included with the respective pension plans of their
Parents. The respective plans cover substantially all employees. Pension costs
allocated to the Company for the eight months ended December 31, 1997, for the
Successor were $1,739,000. Terms of the acquisition agreement between
Jefferson-Pilot and the Chubb Corporation specified that the Chubb Corporation
would assume all responsibilities for pension costs through the acquisition.
As such, the Company paid the Chubb Corporation approximately $3,500,000
representing the present value of all future pension costs as of April 30,
1997. The difference between the amount remitted to the Chubb Corporation and
the liability recorded at April 30, 1997, was recorded as a settlement gain
for the Predecessor of approximately $300,000.
F-14
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
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. Prior to the acquisition, the Company had recorded a
postretirement benefit obligation of approximately $24,185,000, representing
all of the expected costs of retirees, vested active plan participants, and
other non-vested plan participants. As part of the acquisition, the Chubb
Corporation assumed all liabilities relating to these postretirement benefits
without any cash transferring to the Chubb Corporation. The result of this
assumption of the liabilities was a settlement gain of approximately
$23,916,000 for the Predecessor. This gain is included in the statement of
income as a reduction to commissions and operating expenses, net of deferrals.
Postretirement costs of the Successor that were allocated from Jefferson-Pilot
amounted to approximately $455,000 for the eight month period ended December
31, 1997.
9.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
$1,937,000 for the Successor and $979,000 for the Predecessor, respectively.
All leases are operating leases and generally contain renewal options. At
December 31, 1997, future minimum rental payments required under
noncancellable operating leases were as follows (in thousands):
<TABLE>
<S> <C>
Year ending December 31:
1998............................................................ $ 2,560
1999............................................................ 1,916
2000............................................................ 1,449
2001............................................................ 1,334
2002............................................................ 1,124
Subsequent to 2002.............................................. 4,591
-------
$12,974
=======
</TABLE>
The Company routinely enters into commitments to extend credit in the form
of mortgage loans and to purchase certain debt securities for its investment
portfolio in private placement transactions. The fair value of outstanding
commitments to fund mortgage loans and to acquire debt securities in private
placement transactions, which are not reflected in the consolidated balance
sheet, approximates $78,000,000 as of December 31, 1997.
10.REINSURANCE
The Company attempts to reduce its exposure to significant individual claims
by reinsuring portions of certain life insurance contracts written. The
maximum amount of individual life insurance retained on any one life,
including accidental death benefits, is $1,400,000.
Sovereign had a reinsurance recoverable resulting from a reinsurance
agreement with a single reinsurer of $96,740,000 at December 31, 1997.
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 $194,659,000 at December
31, 1997. The remaining reinsurance recoverables were associated with numerous
other reinsurers.
F-15
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
10.REINSURANCE (CONTINUED)
The effect of reinsurance on the premiums and policy charges in the
consolidated statement of income for both the Successor and Predecessor was as
follows (in thousands):
<TABLE>
<CAPTION>
CEDED TO ASSUMED
SUCCESSOR, EIGHT MONTHS ENDED DECEMBER DIRECT OTHER FROM OTHER NET
31, 1997 AMOUNT COMPANIES COMPANIES AMOUNT
-------------------------------------- -------- --------- ---------- --------
<S> <C> <C> <C> <C>
Total premiums and policy charges.... $248,903 $14,976 $1,320 $235,247
======== ======= ====== ========
<CAPTION>
CEDED TO ASSUMED
PREDECESSOR, FOUR MONTHS ENDED APRIL DIRECT OTHER FROM OTHER NET
30, 1997 AMOUNT COMPANIES COMPANIES AMOUNT
------------------------------------ -------- --------- ---------- --------
<S> <C> <C> <C> <C>
Total premiums and policy charges.... $124,039 $ 7,063 $ 409 $117,385
======== ======= ====== ========
</TABLE>
Reinsurance recoveries which have been deducted from benefits, claims and
expenses in the consolidated statements of income for the Successor and
Predecessor were $26,329,000 and $11,929,000, respectively .
Reinsurance contracts do not relieve the Company from its primary obligation
to policyholders. Therefore, the failure of a reinsurer to discharge its
reinsurance obligations could result in a loss to the Company. The Company
regularly evaluates the financial condition of its reinsurers and monitors
concentrations of credit risk related to reinsurance activities. No
significant credit losses resulted from the Company's reinsurance activities
during the year ended December 31, 1997.
11.STATUTORY FINANCIAL INFORMATION
The Company prepares financial statements on the basis of statutory
accounting practices (SAP) prescribed or permitted by the New Hampshire
Department of Insurance. Prescribed SAP include a variety of publications of
the National Association of Insurance Commissioners (NAIC) as well as state
laws, regulations and administrative rules. Permitted SAP encompass all
accounting practices not so prescribed. The impact of permitted accounting
practices on statutory capital and surplus is not significant for the Company.
The principal differences between SAP and generally accepted accounting
principles (GAAP) as they relate to the financial statements of the Company
are (1) policy acquisition costs are expensed as incurred under SAP, whereas
they are deferred and amortized under GAAP, (2) amounts collected from holders
of universal life-type and investment products are recognized as premiums when
collected under SAP, but are initially recorded as contract deposits under
GAAP, with cost of insurance recognized as revenue when assessed and other
contract charges recognized over the periods for which services are provided,
(3) the classification and carrying amounts of investments in certain
securities are different under SAP than under GAAP, (4) the criteria for
providing asset valuation allowances, and the methodologies used to determine
the amounts thereof, are different under SAP than under GAAP, (5) the timing
of establishing certain reserves, and the methodologies used to determine the
amounts thereof, are different under SAP than under GAAP, (6) no provision is
made for deferred income taxes under SAP, and (7) certain assets are not
admitted for purposes of determining surplus under SAP.
Reported capital and surplus on a statutory basis at December 31, 1997 was
$364,707,000. Reported statutory net income for the year ended December 31,
1997 was $151,357,000. Purchase accounting adjustments are not made for
statutory accounting purposes.
The amount of GAAP equity 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 surplus as determined in accordance with statutory accounting
practices. Dividends in excess of such thresholds are considered
"extraordinary" and require prior regulatory approval. Because of the special
dividends paid in connection with the acquisition, all dividends paid in 1998
will require prior regulatory approval.
F-16
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
11.STATUTORY FINANCIAL INFORMATION (CONTINUED)
Risk-Based Capital ("RBC") requirements promulgated by the NAIC require life
insurers to maintain minimum capitalization levels that are determined based
on formulas incorporating credit risk pertaining to its investments, insurance
risk, interest rate risk and general business risk. As of December 31, 1997,
the Company's adjusted capital and surplus exceeded its authorized control
level RBC.
12.TRANSACTIONS WITH AFFILIATED COMPANIES
During 1997, the Successor and Predecessor entered into agreements with
their respective parent companies for general management services, investment
management services and transportation services. The Successor accrued $2.8
million for general management and investment services payable to its parent,
Jefferson-Pilot Corporation, for the eight months ended December 31, 1997, and
this amount remained payable at December 31, 1997. The Predecessor paid its
parent, The Chubb Corporation, $2.0 million for general management services
and investment services for the four months ended April 30, 1997.
13.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. Certain financial instruments, particularly insurance contracts,
are excluded from fair value disclosure requirements.
The methods and assumptions used to estimate the fair value of financial
instruments are as follows:
. Fair values of debt securities with active markets are based on quoted
market prices. For debt securities that trade in less active markets,
fair values are obtained from independent pricing services. Fair values
of debt securities are principally a function of current interest rates.
. Fair values of equity securities are based on quoted market prices.
. The carrying value of cash and cash equivalents approximates fair value
due to the short maturities of these assets.
. Fair values of policy loans and mortgage loans are estimated using
discounted cash flow analyses and approximate carrying values.
The carrying value and fair value of financial instruments at December 31,
1997 were as follows (in thousands):
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
---------- ----------
<S> <C> <C>
ASSETS
Debt securities available-for-sale................ $2,993,384 $2,993,384
Equity securities available-for-sale.............. 18,984 18,984
Cash and cash equivalents......................... 28,288 28,288
Policy loans...................................... 236,729 236,729
Mortgage loans on real estate..................... 125,067 123,637
</TABLE>
14.LITIGATION
In the normal course of business, the Company is involved in various
lawsuits. Management is of the opinion that these suits are substantially
without merit, that valid defenses exist, and that such litigation will not
have a material effect on the consolidated financial statements.
F-17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CHUBB LIFE INSURANCE COMPANY OF AMERICA AND SUBSIDIARIES
DECEMBER 31, 1997
15.YEAR 2000 CONVERSION COSTS (UNAUDITED)
The Company's parent has been analyzing the Year 2000 computer systems
problem since 1995. During the course of this analysis, the Company's parent
has ascertained that failure to alleviate Year 2000 systems problems could
result in a material disruption to the Company's operations in the year 2000.
A centralized oversight and project management process has been put into place
to facilitate compliance of all information systems prior to the end of 1999.
The oversight process includes communications with significant suppliers to
the extent systems are vulnerable to those third parties failure to remedy
year 2000 issues. The assessment phase of the Year 2000 effort (including
mainframe and alternative systems) is complete for the majority of systems and
several have been brought into Year 2000 compliance. To date, the Company's
parent has incurred external costs of approximately $3 million. The remainder
of this effort is expected to be completed by the third quarter of 1999
utilizing internal and external resources, with remaining external costs
estimated at approximately $9 million. However, there can be no guarantee that
these results will be achieved and actual results could differ materially. All
costs associated with this effort are being expensed as incurred.
F-18
<PAGE>
REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
Contractholders
Chubb Separate Account A
We have audited the accompanying statements of assets and liabilities of the
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, 1997, 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 statements of operations and statements
of changes in net assets are for the years ended December 31, 1997 and
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 statements of
operations and statements of changes in net assets are for year ended December
31, 1997 and 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, 1997,
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, 1997, 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 13, 1998
F-19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1997
<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..... $ 90,077,064 $8,669,243 $7,860,630 $67,408,202 $13,430,888 $31,634,822 $ 93,619,613
============ ========== ========== =========== =========== =========== ============
Investments at market
value.................. $104,345,292 $8,400,312 $5,204,654 $81,505,107 $13,460,497 $33,669,586 $119,724,549
Accrued investment
income................. 13,742,893 425,055 52,180 7,699,624 765,180 8,547,352 4,051,461
Net premiums receivable
(payable).............. (111,475) 125,229 16,570 4,032 10,616 39,123 (440)
------------ ---------- ---------- ----------- ----------- ----------- ------------
TOTAL NET ASSETS.... $117,976,710 $8,950,596 $5,273,404 $89,208,763 $14,236,293 $42,256,061 $123,775,570
============ ========== ========== =========== =========== =========== ============
NET ASSET DISTRIBUTION
Ensemble.............. $ 2,024,001 $ 58,324 $ 82,277 $ 790,223 $ 25,494
Ensemble II........... 115,952,709 8,892,272 5,191,127 88,418,540 14,210,799 $42,256,061 $123,775,570
------------ ---------- ---------- ----------- ----------- ----------- ------------
TOTAL NET ASSETS.... $117,976,710 $8,950,596 $5,273,404 $89,208,763 $14,236,293 $42,256,061 $123,775,570
------------ ---------- ---------- ----------- ----------- ----------- ------------
UNITS OUTSTANDING
Ensemble.............. 48,436 3,391 8,894 16,863 1,194
Ensemble II........... 2,863,782 533,993 579,349 1,948,619 686,881 1,715,173 3,905,849
NET ASSET VALUE PER UNIT
Ensemble.............. $ 41.787 $ 17.198 $ 9.251 $ 46.862 $ 21.353
Ensemble II........... 40.489 16.652 8.960 45.375 20.689 $ 24.637 $ 31.690
</TABLE>
See notes to financial statements.
F-20
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1997
<TABLE>
<CAPTION>
EMERGING FIDELITY FIDELITY FIDELITY
BALANCED GROWTH TEMPLETON CONTRA HIGH INCOME INDEX 500
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at cost..... $21,515,249 $41,615,418 $34,817,406 $16,821,745 $6,879,994 $24,513,790
=========== =========== =========== =========== ========== ===========
Investments at market
value................... $21,466,699 $47,023,543 $40,080,166 $19,139,001 $7,437,891 $28,918,871
Accrued investment
income.................. 3,356,172 2,350,607 -- -- -- --
Net premiums receivable
(payable)............... (2,746) 118,406 35,862 44,394 62,688 55,891
----------- ----------- ----------- ----------- ---------- -----------
TOTAL NET ASSETS..... $24,820,125 $49,492,556 $40,116,028 $19,183,395 $7,500,579 $28,974,762
=========== =========== =========== =========== ========== ===========
NET ASSET DISTRIBUTION
Ensemble...............
Ensemble II............ $24,820,125 $49,492,556 $40,116,028 $19,183,395 $7,500,579 $28,974,762
----------- ----------- ----------- ----------- ---------- -----------
TOTAL NET ASSETS..... $24,820,125 $49,492,556 $40,116,028 $19,183,395 $7,500,579 $28,974,762
=========== =========== =========== =========== ========== ===========
UNITS OUTSTANDING
Ensemble...............
Ensemble II............ 1,405,584 2,676,491 2,596,410 1,397,617 597,876 1,931,963
NET ASSET VALUE PER UNIT
Ensemble...............
Ensemble II............ $ 17.658 $ 18.492 $ 15.451 $ 13.726 $ 12.545 $ 14.998
</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,
------------------------------------ ----------------------------- --------------------------------
1997 1996 1995 1997 1996 1995 1997 1996 1995
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income.... $ 2,476,350 $ 1,896,674 $ 1,504,890 $425,055 $387,924 $ 401,686 $ 52,180 $ -- $ 37,550
Distributions of
realized gains..... 13,293,185 5,766,822 1,647,022 -- -- -- 154,999 196,148 --
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
15,769,535 7,663,496 3,151,912 425,056 387,924 401,686 207,179 196,148 37,550
Expenses:
Mortality and
expense risk
charge............. 1,001,394 786,314 607,380 90,263 76,879 70,796 60,762 75,213 67,504
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
Net Investment
Income (loss).... 14,768,141 6,877,182 2,544,532 334,792 311,045 330,890 146,417 120,935 (29,954)
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
Gain (loss) on
investments:
Net realized gain
(loss) on
investments........ 1,393,920 607,700 1,175,160 61,042 16,652 118,929 (1,020,911) 236,329 172,991
Change in net
unrealized gain
(loss) on
investments........ (2,140,961) 7,289,718 6,318,978 (11,529) (19,364) (132,246) (2,862,423) (329,690) 91,937
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
Net gain (loss) on
investments........ (747,041) 7,897,418 7,494,138 49,513 (2,712) (13,317) (3,883,334) (93,361) 264,928
----------- ----------- ----------- -------- -------- --------- ----------- --------- --------
Increase
(Decrease) in Net
Assets from
Operations....... $14,021,100 $14,774,600 $10,038,670 $384,305 $308,333 $ 317,573 $(3,736,917) $ 27,574 $234,974
=========== =========== =========== ======== ======== ========= =========== ========= ========
</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,
----------------------------------- ------------------------------ ----------------------------------
1997 1996 1995 1997 1996 1995 1997 1996 1995
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income... $ 377,561 $ 201,993 $ 404,753 $754,014 $ 635,318 $ 644,900 $ 294,059 $ 245,874 $ 128,853
Distributions of
realized gains.... 7,681,445 8,608,137 6,680,921 12,303 34,269 -- 8,675,134 858,016 385,608
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
8,059,006 8,810,130 7,085,674 766,317 669,587 644,900 8,969,193 1,103,890 514,461
Expenses:
Mortality and
expense risk
charge............ 717,430 578,387 376,813 114,725 97,066 85,025 298,852 160,389 72,581
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
Net Investment
Income.......... 7,341,576 8,231,743 6,708,861 651,592 572,521 559,875 8,670,341 943,501 441,880
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
Gain (loss) on
investments:
Net realized gain
on investments.... 1,112,075 821,643 194,361 31,843 37,510 129,555 763,718 317,839 43,900
Change in net
unrealized gain
(loss) on
investments....... 7,517,633 (390,637) 3,886,548 235,133 (364,875) 722,365 (1,791,862) 2,500,125 1,598,713
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
Net gain (loss)
on investments.... 8,629,708 431,006 4,080,909 266,976 (327,365) 851,920 (1,028,144) 2,817,964 1,642,613
----------- ---------- ----------- -------- --------- ---------- ----------- ---------- ----------
Increase in Net
Assets from
Operations...... $15,971,284 $8,662,749 $10,789,770 $918,568 $ 245,156 $1,411,795 $ 7,642,197 $3,761,465 $2,084,493
=========== ========== =========== ======== ========= ========== =========== ========== ==========
</TABLE>
See notes to financial statements.
F-23
<PAGE>
STATEMENTS OF OPERATIONS--- (CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
CAPITAL GROWTH DIVISION BALANCED DIVISION
------------------------------------- ----------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
----------- ----------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income... $ 21,278 $ 205,917 $ 82,406 $ 547,519 $ 390,626 $ 448,590
Distributions of
realized gains.... 5,556,589 13,379,557 4,456,108 3,432,962 1,233,056 831,663
----------- ----------- ------------ ---------- ---------- ----------
5,577,867 13,585,474 4,538,514 3,981,481 1,623,682 1,280,253
Expenses:
Mortality and
expense risk
charge............ 962,680 634,806 343,782 199,545 160,537 110,589
----------- ----------- ------------ ---------- ---------- ----------
Net Investment
Income (Loss)... 4,615,187 12,950,668 4,194,732 3,781,936 1,463,145 1,169,664
----------- ----------- ------------ ---------- ---------- ----------
Gain (loss) on
investments:
Net realized gain
on investments.... 827,249 704,194 331,997 125,127 151,391 56,294
Change in net
unrealized gain
(loss) on
investments....... 19,770,192 (3,210,806) 9,191,593 (829,904) (17,988) 1,204,925
----------- ----------- ------------ ---------- ---------- ----------
Net gain (loss)
on investments.... 20,597,441 (2,506,612) 9,523,590 (704,777) 133,403 1,261,219
----------- ----------- ------------ ---------- ---------- ----------
Increase in Net
Assets from
Operations...... $25,212,628 $10,444,056 $ 13,718,322 $3,077,159 $1,596,548 $2,430,883
=========== =========== ============ ========== ========== ==========
<CAPTION>
EMERGING GROWTH DIVISION
---------------------------------
YEAR ENDED PERIOD FROM
DECEMBER 31, MAY 1, 1995(A)
--------------------- TO DECEMBER 31,
1997 1996 1995
---------- ---------- -----------------
<S> <C> <C> <C>
Investment Income:
Dividend income... $ -- $ -- $ --
Distributions of
realized gains.... 2,355,925 816,743 --
---------- ---------- -----------
2,355,925 816,743 --
Expenses:
Mortality and
expense risk
charge............ 341,819 156,489 11,735
---------- ---------- -----------
Net Investment
Income (Loss)... 2,014,106 660,254 (11,735)
---------- ---------- -----------
Gain (loss) on
investments:
Net realized gain
on investments.... 528,900 349,647 17,701
Change in net
unrealized gain
(loss) on
investments....... 3,845,746 1,103,470 458,910
---------- ---------- -----------
Net gain (loss)
on investments.... 4,374,646 1,453,117 476,611
---------- ---------- -----------
Increase in Net
Assets from
Operations...... $6,388,752 $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 FIDELITY CONTRA-
DIVISION FUND DIVISION
------------------------------------- ----------------------------
YEAR PERIOD FROM PERIOD FROM
ENDED MAY 1, 1995 (A) MAY 2, 1996 (A)
DECEMBER 31, TO YEAR ENDED TO
--------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1997 1996
---------- ---------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income........ $ 678,464 $ 159,471 $ -- $ 53,570 $ --
Distributions of
realized gains......... 272,716 46,512 -- 141,577 --
---------- ---------- -------- ---------- --------
951,180 205,983 -- 195,147 --
Expenses:
Mortality and expense
risk charge............ 301,799 143,239 28,459 112,772 13,294
---------- ---------- -------- ---------- --------
Net Investment Income
(loss)............... 649,381 62,744 (28,459) 82,375 (13,294)
---------- ---------- -------- ---------- --------
Gain on investments:
Net realized gain on
investments............ 828,887 267,958 316,398 143,362 3,889
Change in net
unrealized gain (loss)
on investments......... 2,126,633 2,779,085 357,041 1,928,296 388,960
---------- ---------- -------- ---------- --------
Net gain (loss) on
investments............ 2,955,520 3,047,043 673,439 2,071,658 392,849
---------- ---------- -------- ---------- --------
Increase in Net
Assets from
Operations........... $3,604,901 $3,109,787 $644,980 $2,154,033 $379,555
========== ========== ======== ========== ========
</TABLE>
- -----
(a) Commencement of operations
See notes to financial statements.
F-25
<PAGE>
STATEMENTS OF OPERATIONS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
FIDELITY HIGH INCOME
DIVISION FIDELITY INDEX 500 DIVISION
---------------------------- ----------------------------
PERIOD FROM PERIOD FROM
YEAR MAY 2, 1996 (A) MAY 2, 1996 (A)
ENDED TO YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Investment Income:
Dividend income........ $248,474 $ -- $ 101,288 $ --
Distributions of
realized gains......... 30,711 -- 205,527 --
-------- -------- ---------- --------
279,185 -- 306,815 --
Expenses:
Mortality and expense
risk charge............ 45,794 9,027 164,470 18,598
-------- -------- ---------- --------
Net Investment Income
(Loss)............... 233,391 (9,027) 142,345 (18,598)
-------- -------- ---------- --------
Gain on investments:
Net realized gain on
investments............ 71,464 25,826 435,364 24,088
Change in net
unrealized gain (loss)
on investments......... 451,237 106,660 3,844,079 561,002
-------- -------- ---------- --------
Net gain on
investments............ 522,701 132,486 4,279,443 585,090
-------- -------- ---------- --------
Increase in Net
Assets from
Operations........... $756,092 $123,459 $4,421,788 $566,492
======== ======== ========== ========
</TABLE>
- -----
(a) Commencement of operations
See notes to financial statements.
F-26
<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,
-------------------------------------- ---------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995 1997 1996 1995
------------ ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE IN NET
ASSETS
Operations:
Net investment
income (loss)... $ 14,768,141 $ 6,877,182 $ 2,544,532 $ 334,792 $ 311,045 $ 330,890 $ 146,417 $ 120,935 $ (29,954)
Net realized
gain (loss) on
investments..... 1,393,920 607,700 1,175,160 61,042 16,652 118,929 (1,020,911) 236,329 172,991
Change in net
unrealized gain
(loss) on
investments..... (2,140,961) 7,289,718 6,318,978 (11,529) (19,364) (132,246) (2,862,423) (329,690) 91,937
------------ ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Increase
(decrease) in net
assets from
operations....... 14,021,100 14,774,600 10,038,670 384,305 308,333 317,573 (3,736,917) 27,574 234,974
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 20,387,148 21,940,124 22,926,705 4,688,133 4,466,621 4,965,203 1,487,487 1,687,557 2,002,953
Transfers
from/to General
Account and
within Separate
Account, net.... (4,647,630) (3,897,681) (1,635,218) (2,751,900) (4,354,762) (2,593,015) 594,080 202,817 (360,212)
Transfers of
cost of
insurance....... (7,901,778) (7,361,182) (6,834,515) (782,134) (741,454) (714,793) (522,160) (689,400) (720,341)
Transfers on
account of
death........... (143,565) (317,872) (79,684) (6,947) (1,802) (2,545) (5,118) (27,123) (10,951)
Transfers on
account of other
terminations.... (2,830,872) (2,897,126) (2,840,771) (592,016) (464,487) (126,066) (297,357) (363,544) (324,994)
------------ ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase
(decrease) in net
assets derived
from
contractholder
transactions..... 4,863,303 7,466,263 11,536,517 555,136 (1,095,884) 1,528,784 1,256,932 810,307 586,455
Net increase
(decrease) in net
assets........... 18,884,403 22,240,863 21,575,187 939,441 (787,551) 1,846,355 (2,479,985) 837,881 821,429
------------ ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at
beginning 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
------------ ----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Balance at end of
year............. $117,976,710 $99,092,307 $76,851,444 $8,950,596 $8,011,155 $8,798,706 $5,273,404 $7,753,389 $6,915,508
============ =========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
F-27
<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,
------------------------------------- ------------------------------------
1997 1996 1995 1997 1996 1995
----------- ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DE-
CREASE) IN NET
ASSETS
Operations:
Net investment
income.......... $ 7,341,576 $ 8,231,743 $ 6,708,861 $ 651,592 $ 572,521 $ 559,875
Net realized
gain (loss) on
investments..... 1,112,075 821,643 194,361 31,843 37,510 129,555
Change in net
unrealized gain
(loss) on in-
vestments....... 7,517,633 (390,637) 3,686,548 235,133 (364,875) 722,365
----------- ----------- ----------- ----------- ----------- ----------
Increase in net
assets from op-
erations........ 15,971,284 8,662,749 10,789,770 918,568 245,156 1,411,795
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 15,002,595 15,512,647 12,662,001 2,691,506 2,634,301 2,904,776
Transfers
from/to General
Account and
within Separate
Account, net.... (3,643,068) (999,798) 4,798,054 (394,592) 999,421 (5,156,597)
Transfers of
cost of insur-
ance............ (5,977,445) (5,382,924) (4,118,433) (918,928) (909,361) (918,529)
Transfers on ac-
count of death.. (138,279) (363,028) (65,789) (65,768) (16,880) (2,860)
Transfers on ac-
count of other
terminations.... (2,043,613) (1,916,226) (1,771,658) (384,107) (438,849) (436,792)
----------- ----------- ----------- ----------- ----------- ----------
Net increase
(decrease) in
net assets
derived from
contractholder
transactions.... 3,200,190 6,850,671 11,506,175 928,111 2,268,632 (3,610,002)
Net increase
(decrease) in
net assets...... 19,171,474 15,513,420 22,295,945 1,846,679 2,513,788 (2,198,207)
----------- ----------- ----------- ----------- ----------- ----------
Balance at begin-
ning of year.... 70,037,289 54,523,869 32,227,924 12,389,614 9,875,826 12,074,033
----------- ----------- ----------- ----------- ----------- ----------
Balance at end of
year............ $89,208,763 $70,037,289 $54,523,869 $14,236,293 $12,389,614 $9,875,826
=========== =========== =========== =========== =========== ==========
<CAPTION>
GROWTH AND INCOME DIVISION
YEAR ENDED DECEMBER 31,
--------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DE-
CREASE) IN NET
ASSETS
Operations:
Net investment
income.......... $8,670,341 $ 943,501 $ 441,880
Net realized
gain (loss) on
investments..... 763,781 317,839 43,900
Change in net
unrealized gain
(loss) on in-
vestments....... (1,791,862) 2,500,125 1,598,713
------------ ------------ ------------
Increase in net
assets from op-
erations........ 7,642,197 3,761,465 2,084,493
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 8,132,090 6,240,133 3,961,606
Transfers
from/to General
Account and
within Separate
Account, net.... 5,643,742 3,324,466 3,929,594
Transfers of
cost of insur-
ance............ (2,745,042) (1,850,081) (1,064,970)
Transfers on ac-
count of death.. (45,431) (46,114) (3,375)
Transfers on ac-
count of other
terminations.... (658,736) (368,235) (161,477)
------------ ------------ ------------
Net increase
(decrease) in
net assets
derived from
contractholder
transactions.... 10,226,623 7,300,169 6,661,378
Net increase
(decrease) in
net assets...... 17,868,820 11,061,634 8,745,871
------------ ------------ ------------
Balance at begin-
ning of year.... 24,387,241 13,325,607 4,579,736
------------ ------------ ------------
Balance at end of
year............ $42,256,061 $24,387,241 $13,325,607
============ ============ ============
</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>
CAPITAL GROWTH DIVISION BALANCED DIVISION
-------------------------------------- -------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------------------- -------------------------------------
1997 1996 1995 1997 1996 1995
------------ ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment
income (loss)... $ 4,615,187 $12,950,668 $ 4,194,732 $ 3,781,936 $ 1,463,145 $ 1,169,664
Net realized
gain on
investments..... 827,249 704,194 331,997 125,127 151,391 56,294
Change in net
unrealized gain
(loss) on
investments...... 19,770,192 (3,210,806) 9,191,593 (829,904) (17,988) 1,204,925
------------ ----------- ----------- ----------- ----------- -----------
Increase in net
assets from
operations....... 25,212,628 10,444,056 13,718,322 3,077,159 1,596,548 2,430,883
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 23,605,444 20,766,738 16,405,660 4,506,381 4,608,156 4,547,924
Transfers
from/to General
Account and
within Separate
Account, net.... 2,703,509 5,662,187 3,400,177 (154,536) (283,623) 1,225,695
Transfers of
cost of
insurance....... (7,961,359) (6,261,918) (4,336,652) (1,580,912) (1,498,155) (1,334,390)
Transfers on
account of
death........... (104,089) (191,870) (17,451) (32,682) (37,978) (11,992)
Transfers on
account of other
terminations.... (2,348,433) (1,886,962) (1,543,687) (480,806) (460,839) (684,107)
------------ ----------- ----------- ----------- ----------- -----------
Net increase in
net assets
derived from
contractholder
transactions..... 15,895,072 18,088,175 13,908,047 2,257,445 2,327,561 3,743,130
Net increase in
net assets....... 41,107,700 28,532,231 27,626,369 5,334,604 3,924,109 6,174,013
------------ ----------- ----------- ----------- ----------- -----------
Balance at
beginning of
year............. 82,667,870 54,135,639 26,509,270 19,485,521 15,561,412 9,387,399
------------ ----------- ----------- ----------- ----------- -----------
Balance at end of
year............. $123,775,570 $82,667,870 $54,135,639 $24,820,125 $19,485,521 $15,561,412
============ =========== =========== =========== =========== ===========
<CAPTION>
EMERGING GROWTH DIVISION
-----------------------------------------
PERIOD FROM
YEAR ENDED DECEMBER 31, MAY 1, 1995(A)
------------------------- TO DECEMBER 31,
1997 1996 1995
------------ ------------ ---------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment
income (loss)... $ 2,014,106 $ 660,254 $ (11,735)
Net realized
gain on
investments..... 528,900 349,647 17,701
Change in net
unrealized gain
(loss) on
investments...... 3,845,746 1,103,470 458,910
------------ ------------ ---------------
Increase in net
assets from
operations....... 6,388,752 2,113,371 464,876
Contractholder
transactions--
Note D:
Transfers of net
premiums........ 12,081,437 7,560,238 1,779,119
Transfers
from/to General
Account and
within Separate
Account, net.... 7,761,806 11,847,439 5,574,465
Transfers of
cost of
insurance....... (3,150,610) (1,670,564) (218,292)
Transfers on
account of
death........... (29,914) (14,856)
Transfers on
account of other
terminations.... (617,379) (364,506) (12,826)
------------ ------------ ---------------
Net increase in
net assets
derived from
contractholder
transactions..... 16,045,340 17,357,751 7,122,466
Net increase in
net assets....... 22,434,092 19,471,122 7,587,342
------------ ------------ ---------------
Balance at
beginning of
year............. 27,058,464 7,587,342 --
------------ ------------ ---------------
Balance at end of
year............. $49,492,556 $27,058,464 $7,587,342
============ ============ ===============
</TABLE>
- -----
(a)Commencement of operations.
See notes to financial statements.
F-29
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
TEMPLETON DIVISION FIDELITY CONTRAFUND DIVISION
----------------------------------------- -----------------------------
PERIOD FROM PERIOD FROM
MAY 1, 1995 (A) MAY 2, 1996 (A)
TO PERIOD ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
YEAR ENDED 1997 1995 1997 1996
------------------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income
(loss)................. $ 649,381 $ 62,744 $ (28,459) $ 82,375 $ (13,294)
Net realized gain on
investments............ 828,887 267,958 316,398 143,362 3,889
Change in net
unrealized gain on
investments............ 2,126,633 2,779,085 357,041 1,928,296 388,960
----------- ----------- ---------- ----------- ----------
Increase in net assets
from operations......... 3,604,901 3,109,787 644,980 2,154,033 379,555
Contractholder
transactions--Note D:
Transfers of net
premiums............... 9,182,098 5,361,868 1,959,347 4,532,969 930,093
Transfers from/to
General Account and
within Separate
Account, net........... 7,333,435 8,214,110 5,568,613 8,789,832 3,824,157
Transfers of cost of
insurance.............. (2,324,520) (1,135,804) (361,292) (1,101,248) (151,699)
Transfers on account of
death.................. (64,977) (9,512) (1,382)
Transfers on account of
other terminations..... (437,273) (414,887) (114,846) (153,334) (19,581)
----------- ----------- ---------- ----------- ----------
Net increase in net
assets derived from
contractholder
transactions............ 13,688,763 12,015,775 7,051,822 12,066,837 4,582,970
Net increase in net
assets.................. 17,293,664 15,125,562 7,696,802 14,220,870 4,962,525
----------- ----------- ---------- ----------- ----------
Balance at beginning of
year.................... 22,822,364 7,686,802 -- 4,962,525 --
----------- ----------- ---------- ----------- ----------
Balance at end of year.. $40,116,028 $22,822,364 $7,696,802 $19,183,395 $4,962,525
=========== =========== ========== =========== ==========
</TABLE>
- -----
(a)Commencement of operations.
See notes to financial statements.
F-30
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(CONTINUED)
SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
FIDELITY HIGH FIDELITY
INCOME DIVISION INDEX 500 DIVISION
---------------------------- -----------------------------
PERIOD FROM PERIOD FROM
YEAR MAY 2, 1996 (A) MAY 2, 1996 (A)
ENDED TO YEAR ENDED TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income
(loss)................. $ 233,391 $ (9,027) $ 142,345 $ (18,598)
Net realized gain on
investments............ 71,464 25,826 435,364 24,088
Change in net
unrealized gain on
investments............ 451,237 106,660 3,844,079 561,002
---------- ---------- ----------- ----------
Increase in net assets
from operations......... 756,092 123,459 4,421,788 566,492
Contractholder
transactions--Note D:
Transfers of net
premiums............... 1,344,308 312,854 5,355,400 887,336
Transfers from/to
General Account and
within Separate
Account, net........... 3,119,835 2,471,242 13,090,735 6,216,629
Transfers of cost of
insurance.............. (362,364) (72,880) (1,230,424) (145,983)
Transfers on account of
death.................. (3,474) (41,017)
Transfers on account of
other terminations..... (173,019) (15,474) (149,305) 3,111
---------- ---------- ----------- ----------
Net increase in net
assets derived from
contractholder
transactions............ 3,925,286 2,695,742 17,025,389 6,961,093
Net increase in net
assets.................. 4,681,378 2,819,201 21,447,177 7,527,585
---------- ---------- ----------- ----------
Balance at beginning of
year.................... 2,819,201 0 7,527,585 --
---------- ---------- ----------- ----------
Balance at end of year.. $7,500,579 $2,819,201 $28,974,762 $7,527,585
========== ========== =========== ==========
</TABLE>
- -----
(a)Commencement of operations.
See notes to financial statements.
F-31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1997
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"). Effective April 30,
1997, Chubb Life and its subsidiaries were acquired by Jefferson-Pilot
Corporation. 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, Chubb Colonial Life Insurance Company
("Chubb Colonial") and its predecessor. As of December 31, 1997, the Separate
Account is comprised of thirteen investment divisions, nine of which invest
exclusively in the corresponding portfolios of the Jefferson-Pilot Variable
Fund, Inc. (formerly Chubb America Fund, Inc.), one of which invests in the
Templeton International Fund, and three of which invest in certain Fidelity
Portfolios, all diversified Series Investment Companies.
NOTE B--SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments: Investments in shares of the Fund are valued at
the net asset value per share which is calculated each day the New York Stock
Exchange is open for trading.
Investment Income: Dividend income and distributions of realized gains are
recorded on the ex-dividend date.
Investment Transactions: Purchases and sales of shares of the Fund are
recorded as of the trade date, the date the transaction is executed.
Federal Income Taxes: The operations of the Separate Account are included in
the federal income tax return of Chubb Life which is taxed as a life insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the Separate Account.
Expenses: Currently, the Separate Account contains the net assets of two
variable insurance policies, Ensemble and Ensemble II. A mortality and expense
risk charge payable to Chubb Life is accrued daily which will not exceed
.6%and .9% of the average net asset value of each division of the Separate
Account on an annual basis for Ensemble and Ensemble II, respectively.
NOTE C--AFFILIATED COMPANY TRANSACTIONS
Administrative services necessary for the operation of the Separate Account
are provided by Chubb America Service Corporation, an affiliate of Chubb Life.
Chubb Life and Chubb Colonial are the principal underwriters of the variable
insurance contracts that utilize the Separate Account. Jefferson Pilot
Securities Corporation, an affiliate of the Company, is the distributor.
NOTE D--DIVERSIFICATION REQUIREMENTS
Under the provisions of Section 817(h) of the Internal Revenue Code, a
variable life insurance contract will be subject to federal income taxes on
the income earned for any period for which the investments of the segregated
assets account, on which the contract is based, are not adequately
diversified. The Code provides that the "adequately diversified" requirement
may be met if the underlying investments satisfy either a statutory safe
harbor test or diversification requirements set forth in regulations issued by
the Secretary of Treasury.
The Internal Revenue Service has issued regulations under Section 817(h) of
the Code. The Company believes that the segregated asset account satisfies the
current requirements of the regulations, and it intends that the segregated
asset account will continue to meet such requirements.
F-32
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1997
NOTE E--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, 1997 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, 1997.
<TABLE>
<CAPTION>
NET ASSET
VALUE
SHARES PER SHARE
--------- -----------
<S> <C> <C>
World Growth Stock Portfolio............................. 4,481,741 $ 23.285555
Money Market Portfolio................................... 821,429 10.226466
Gold Stock Portfolio..................................... 583,765 8.915666
Domestic Growth Stock Portfolio.......................... 3,989,371 20.430565
Bond Portfolio........................................... 1,279,737 10.518171
Growth and Income Portfolio.............................. 1,968,282 17.106082
Capital Growth Portfolio................................. 5,639,705 21.228866
Balanced Portfolio....................................... 1,827,117 11.748947
Emerging Growth Portfolio................................ 2,691,658 17.470000
Templeton Portfolio...................................... 1,986,133 20.180000
Fidelity Contra Portfolio................................ 959,830 19.940000
Fidelity High Income Portfolio........................... 547,709 13.580000
Fidelity Index 500 Portfolio............................. 252,809 114.390000
</TABLE>
NOTE F--CONTRACTHOLDER TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1997 1996 1995
--------------------- ---------------------- ----------------------
UNITS AMOUNT UNITS AMOUNT UNITS AMOUNT
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
World Growth Stock Divi-
sion
Issuance of units...... 1,011,924 $39,798,520 1,228,496 $39,291,612 1,715,142 $47,537,500
Redemptions of units... 895,063 34,935,217 994,317 31,825,349 1,277,857 36,000,983
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 116,861 $ 4,863,303 234,179 $ 7,466,263 437,285 $11,536,517
========= =========== ========= =========== ========= ===========
Money Market Division
Issuance of units...... 2,230,904 $36,446,460 1,936,504 $30,547,227 1,688,778 $25,651,528
Redemptions of units... 2,193,315 35,891,324 2,006,047 31,643,111 1,587,725 24,122,744
--------- ----------- --------- ----------- --------- -----------
Net Increase (de-
crease).............. 37,589 $ 555,136 (69,543) $(1,095,884) 101,053 $ 1,528,784
========= =========== ========= =========== ========= ===========
Gold Stock Division
Issuance of units...... 589,273 $ 6,878,213 278,948 $ 5,141,128 371,551 $ 5,790,832
Redemptions of units... 475,559 5,621,281 234,636 4,330,821 327,364 5,204,377
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 113,714 $ 1,256,932 44,312 $ 810,307 44,187 $ 586,455
========= =========== ========= =========== ========= ===========
Domestic Growth Stock
Division
Issuance of units...... 783,149 $32,220,885 938,273 $32,523,842 917,824 $26,054,533
Redemptions of units... 707,768 29,020,695 746,233 25,673,171 509,915 14,548,358
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 75,381 $ 3,200,190 192,040 $ 6,850,671 407,909 $11,506,175
========= =========== ========= =========== ========= ===========
Bond Division
Issuance of units...... 396,342 $ 7,858,820 551,744 $10,326,450 672,153 $11,914,386
Redemptions of units... 350,970 6,930,709 429,283 8,057,818 887,866 15,524,388
--------- ----------- --------- ----------- --------- -----------
Net Increase (de-
crease).............. 45,372 $ 928,111 122,461 $ 2,268,632 (215,713) $(3,610,002)
========= =========== ========= =========== ========= ===========
</TABLE>
F-33
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
CHUBB SEPARATE ACCOUNT A
DECEMBER 31, 1997
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1996 1995
--------------------- --------------------- ---------------------
UNITS AMOUNT UNITS AMOUNT UNITS AMOUNT
--------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Growth and Income Divi-
sion
Issuance of units...... 1,110,245 $24,846,023 1,036,744 $17,720,412 730,636 $10,587,371
Redemptions of units... 659,777 14,619,400 613,562 10,420,243 271,957 3,925,993
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 450,468 $10,226,623 423,182 $ 7,300,169 458,679 $ 6,661,378
========= =========== ========= =========== ========= ===========
Capital Growth Division
Issuance of units...... 1,727,504 $49,693,896 1,982,313 $47,005,977 1,825,698 $31,919,956
Redemptions of units... 1,166,517 33,798,824 1,225,848 28,917,802 1,017,713 18,011,909
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 560,987 $15,895,072 756,465 $18,088,175 807,985 $13,908,047
========= =========== ========= =========== ========= ===========
Balanced Division
Issuance of units...... 557,010 $ 9,238,539 804,427 $11,577,640 763,616 $ 9,631,633
Redemptions of units... 423,594 6,981,094 645,411 9,250,079 464,695 5,888,503
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 133,416 $ 2,257,445 159,016 $ 2,327,561 298,921 $ 3,743,130
========= =========== ========= =========== ========= ===========
Emerging Growth Division
Issuance of units...... 2,187,207 $37,160,174 1,835,746 $27,213,432 718,606 $ 8,905,329
Redemptions of units... 1,257,679 21,114,834 663,900 9,855,681 143,489 1,782,863
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 929,528 $16,045,340 1,171,846 $17,357,751 575,117 $ 7,122,466
========= =========== ========= =========== ========= ===========
Templeton Division
Issuance of units...... 2,174,212 $32,480,846 2,125,435 $25,905,378 1,977,300 $20,880,595
Redemptions of units... 1,245,865 18,792,083 1,148,728 13,889,603 1,285,944 13,828,773
--------- ----------- --------- ----------- --------- -----------
Net Increase.......... 928,347 $13,688,763 976,707 $12,015,775 691,356 $ 7,051,822
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
MAY 2, 1996
YEAR ENDED THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1996
--------------------- ------------------
UNITS AMOUNT UNITS AMOUNT
--------- ----------- ------- ----------
<S> <C> <C> <C> <C>
Fidelity Contra Division
Issuance of units.................... 1,533,238 $19,271,804 533,610 $5,507,181
Redemptions of units................. 580,340 7,204,967 88,891 924,211
--------- ----------- ------- ----------
Net Increase........................ 952,898 $12,066,837 444,719 $4,582,970
========= =========== ======= ==========
Fidelity High Income Division
Issuance of units.................... 797,876 $ 9,316,213 460,340 $4,748,206
Redemptions of units................. 462,054 5,390,927 198,287 2,052,464
--------- ----------- ------- ----------
Net Increase........................ 335,822 $ 3,925,286 262,053 $2,695,742
========= =========== ======= ==========
Fidelity Index 500 Division
Issuance of units.................... 2,094,648 $28,323,380 796,936 $8,418,545
Redemptions of units................. 822,768 11,297,991 136,853 1,457,452
--------- ----------- ------- ----------
Net Increase........................ 1,271,880 $17,025,389 660,083 $6,961,093
========= =========== ======= ==========
</TABLE>
NOTE G--YEAR 2000 CONVERSION (UNAUDITED)
Jefferson-Pilot Corporation, the Company's parent has developed a
centralized oversight and project management process to facilitate the
conversion of all information systems to be ready for the year 2000 and has
been converting critical data processing systems. The parent Company currently
expects the project to be substantially completed by early 1999. Although some
projects may be delayed due to resource constraints, the Company does not
expect this project to have a significant effect on operations.
- -------
(a) Commencement of operations.
F-34
<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 .70% of the aggregate average daily
net assets of the Portfolios, plus a charge of .14% of the aggregate average
daily net assets to cover expenses incurred by the Portfolios for the twelve
months ended December 31, 1997. The .70% investment advisory fee is the
average of the individual investment advisory fees of the twenty Portfolios.
The .14% expense figure is based on a weighted average utilizing average net
assets for the Jefferson Pilot Variable Fund Portfolios, the Templeton
International Fund, the Fidelity VIP and VIP II Portfolios, the Oppenheimer
Portfolios and the MFS Portfolios. Expenses for the Templeton International
Fund: Class 1, the Fidelity Equity Income, Growth, Contrafund and Index 500
Portfolios, the MFS Research and Utilities Series, and the Oppenheimer Bond
and Strategic Bond Portfolios were provided by the investment managers for
these portfolios and JP Financial 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 A. After deduction of these amounts, the
illustrated gross investment rates of 0%, 4%, and 12% correspond to
approximate net annual rates of -1.74%, 2.26% and 10.26%, 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 JP
Financial 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
A, 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, JP Financial 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. JP Financial
has reserved the right to charge an administrative fee up to $25 for such
illustrations.
A-1
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.74% NET)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(1): $1,425
<TABLE>
<CAPTION>
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 1,733 100,000 2,108 1,731 100,000
3 4,626 3,115 2,738 100,000 3,112 2,735 100,000
4 6,293 4,094 3,718 100,000 4,082 3,705 100,000
5 8,027 5,059 4,682 100,000 5,017 4,641 100,000
6 9,830 6,009 5,696 100,000 5,917 5,603 100,000
7 11,705 6,946 6,695 100,000 6,778 6,527 100,000
8 13,655 7,858 7,670 100,000 7,601 7,413 100,000
9 15,684 8,756 8,631 100,000 8,385 8,260 100,000
10 17,793 9,642 9,579 100,000 9,128 9,065 100,000
11 19,987 10,534 10,534 100,000 9,828 9,828 100,000
12 22,268 11,385 11,385 100,000 10,480 10,480 100,000
13 24,641 12,194 12,194 100,000 11,080 11,080 100,000
14 27,109 12,958 12,958 100,000 11,623 11,623 100,000
15 29,675 13,676 13,676 100,000 12,103 12,103 100,000
16 32,344 14,343 14,343 100,000 12,515 12,515 100,000
17 35,120 14,956 14,956 100,000 12,853 12,853 100,000
18 38,007 15,510 15,510 100,000 13,115 13,115 100,000
19 41,009 16,000 16,000 100,000 13,296 13,296 100,000
20 44,131 16,418 16,418 100,000 13,385 13,385 100,000
21 47,378 16,755 16,755 100,000 13,375 13,375 100,000
22 50,755 17,006 17,006 100,000 13,253 13,253 100,000
23 54,268 17,161 17,161 100,000 13,005 13,005 100,000
24 57,920 17,213 17,213 100,000 12,611 12,611 100,000
25 61,719 17,150 17,150 100,000 12,053 12,053 100,000
30 83,118 14,632 14,632 100,000 6,061 6,061 100,000
35 109,153 6,346 6,346 100,000 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 JP FINANCIAL, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 4% (2.26% NET)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(1): $1,425
<TABLE>
<CAPTION>
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 1,121 744 100,000 1,120 743 100,000
2 3,023 2,252 1,875 100,000 2,250 1,873 100,000
3 4,626 3,394 3,017 100,000 3,391 3,014 100,000
4 6,293 4,553 4,177 100,000 4,540 4,164 100,000
5 8,027 5,742 5,366 100,000 5,699 5,323 100,000
6 9,830 6,961 6,647 100,000 6,864 6,551 100,000
7 11,705 8,211 7,960 100,000 8,035 7,784 100,000
8 13,655 9,482 9,294 100,000 9,210 9,021 100,000
9 15,684 10,785 10,660 100,000 10,387 10,262 100,000
10 17,793 12,122 12,059 100,000 11,566 11,503 100,000
11 19,987 13,511 13,511 100,000 12,744 12,744 100,000
12 22,268 14,909 14,909 100,000 13,916 13,916 100,000
13 24,641 16,314 16,314 100,000 15,077 15,077 100,000
14 27,109 17,723 17,723 100,000 16,223 16,223 100,000
15 29,675 19,135 19,135 100,000 17,348 17,348 100,000
16 32,344 20,553 20,553 100,000 18,446 18,446 100,000
17 35,120 21,972 21,972 100,000 19,516 19,516 100,000
18 38,007 23,391 23,391 100,000 20,556 20,556 100,000
19 41,009 24,803 24,803 100,000 21,560 21,560 100,000
20 44,131 26,202 26,202 100,000 22,520 22,520 100,000
21 47,378 27,581 27,581 100,000 23,427 23,427 100,000
22 50,755 28,937 28,937 100,000 24,271 24,271 100,000
23 54,268 30,261 30,261 100,000 25,038 25,038 100,000
24 57,920 31,548 31,548 100,000 25,710 25,710 100,000
25 61,719 32,790 32,790 100,000 26,271 26,271 100,000
30 83,118 37,997 37,997 100,000 26,737 26,737 100,000
35 109,153 40,210 40,210 100,000 19,998 19,998 100,000
40 140,828 36,031 36,031 100,000 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 JP FINANCIAL, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.26% NET)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(1): $1,425
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------- -------------------------------
END ACCUMULATED ACCUMU-
OF AT 5% INTEREST ACCUMULATION CASH DEATH LATION 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 1,218 842 100,000
2 3,067 2,549 2,172 100,000 2,547 2,170 100,000
3 4,717 4,000 3,623 100,000 3,996 3,620 100,000
4 6,449 5,592 5,216 100,000 5,578 5,202 100,000
5 8,268 7,353 6,976 100,000 7,307 6,930 100,000
6 10,177 9,299 8,985 100,000 9,195 8,881 100,000
7 12,182 11,451 11,200 100,000 11,258 11,007 100,000
8 14,288 13,820 13,631 100,000 13,514 13,326 100,000
9 16,498 16,439 16,313 100,000 15,984 15,859 100,000
10 18,820 19,335 19,272 100,000 18,689 18,626 100,000
11 21,257 22,564 22,564 100,000 21,660 21,660 100,000
12 23,816 26,124 26,124 100,000 24,930 24,930 100,000
13 26,503 30,053 30,053 100,000 28,531 28,531 100,000
14 29,324 34,390 34,390 100,000 32,502 32,502 100,000
15 32,287 39,182 39,182 100,000 36,881 36,881 100,000
16 35,398 44,482 44,482 100,000 41,719 41,719 100,000
17 38,664 50,347 50,347 100,000 47,072 47,072 100,000
18 42,093 56,846 56,846 100,000 53,005 53,005 100,000
19 45,694 64,055 64,055 100,000 59,595 59,595 100,000
20 49,475 72,064 72,064 100,000 66,929 66,929 100,000
21 53,445 80,964 80,964 105,253 (2)(3) 75,109 75,109 100,000
22 57,613 90,797 90,797 116,220 (2)(3) 84,215 84,215 107,795 (2)(3)
23 61,990 101,647 101,647 128,075 (2)(3) 94,256 94,256 118,763 (2)(3)
24 66,586 113,619 113,619 140,888 (2)(3) 105,322 105,322 130,599 (2)(3)
25 71,412 126,832 126,832 154,734 (2)(3) 117,518 117,518 143,372 (2)(3)
30 99,409 216,248 216,248 250,847 (2)(3) 199,668 199,668 231,614 (2)(3)
35 135,142 362,767 362,767 388,160 (2)(3) 333,584 333,584 356,935 (2)(3)
40 180,747 605,242 605,242 635,504 (2)(3) 554,650 554,650 582,383 (2)(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 JP FINANCIAL, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.74% NET)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(1): $1,425
<TABLE>
<CAPTION>
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 1,069 692 101,069 1,068 691 101,068
2 3,023 2,101 1,725 102,101 2,099 1,723 102,099
3 4,626 3,098 2,722 103,098 3,095 2,719 103,095
4 6,293 4,066 3,689 104,066 4,053 3,676 104,053
5 8,027 5,017 4,640 105,017 4,973 4,597 104,973
6 9,830 5,951 5,637 105,951 5,853 5,539 105,853
7 11,705 6,869 6,618 106,869 6,691 6,440 106,691
8 13,655 7,759 7,571 107,759 7,485 7,297 107,485
9 15,684 8,634 8,508 108,634 8,235 8,110 108,235
10 17,793 9,493 9,431 109,493 8,938 8,875 108,938
11 19,987 10,359 10,359 110,359 9,592 9,592 109,592
12 22,268 11,179 11,179 111,179 10,190 10,190 110,190
13 24,641 11,951 11,951 111,951 10,729 10,729 110,729
14 27,109 12,671 12,671 112,671 11,201 11,201 111,201
15 29,675 13,336 13,336 113,336 11,600 11,600 111,600
16 32,344 13,942 13,942 113,942 11,920 11,920 111,920
17 35,120 14,483 14,483 114,483 12,155 12,155 112,155
18 38,007 14,955 14,955 114,955 12,301 12,301 112,301
19 41,009 15,349 15,349 115,349 12,352 12,352 112,352
20 44,131 15,656 15,656 115,656 12,298 12,298 112,298
21 47,378 15,866 15,866 115,866 12,130 12,130 112,130
22 50,755 15,971 15,971 115,971 11,836 11,836 111,836
23 54,268 15,962 15,962 115,962 11,401 11,401 111,401
24 57,920 15,828 15,828 115,828 10,806 10,806 110,806
25 61,719 15,558 15,558 115,558 10,032 10,032 110,032
30 83,118 11,686 11,686 111,686 2,953 2,953 102,953
35 109,153 1,912 1,912 101,912 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 JP FINANCIAL, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II ASSUMED HYPOTHETICAL GROSS 4% (2.26% NET)
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: $1,425
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1):
<TABLE>
<CAPTION>
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 1,118 741 101,118 1,117 740 101,117
2 3,023 2,243 1,867 102,243 2,241 1,864 102,241
3 4,626 3,375 2,999 103,375 3,372 2,996 103,372
4 6,293 4,521 4,145 104,521 4,508 4,131 104,508
5 8,027 5,693 5,317 105,693 5,648 5,272 105,648
6 9,830 6,891 6,578 106,891 6,789 6,475 106,789
7 11,705 8,117 7,866 108,117 7,928 7,677 107,928
8 13,655 9,358 9,170 109,358 9,064 8,876 109,064
9 15,684 10,627 10,501 110,627 10,194 10,068 110,194
10 17,793 11,925 11,862 111,925 11,314 11,252 111,314
11 19,987 13,273 13,273 113,273 12,423 12,423 112,423
12 22,268 14,621 14,621 114,621 13,512 13,512 113,512
13 24,641 15,965 15,965 115,965 14,574 14,574 114,574
14 27,109 17,300 17,300 117,300 15,603 15,603 115,603
15 29,675 18,621 18,621 118,621 16,589 16,589 116,589
16 32,344 19,929 19,929 119,929 17,523 17,523 117,523
17 35,120 21,218 21,218 121,218 18,396 18,396 118,396
18 38,007 22,479 22,479 122,479 19,207 19,207 119,207
19 41,009 23,705 23,705 123,705 19,946 19,946 119,946
20 44,131 24,881 24,881 124,881 20,599 20,599 120,599
21 47,378 25,996 25,996 125,996 21,151 21,151 121,151
22 50,755 27,038 27,038 127,038 21,587 21,587 121,587
23 54,268 27,993 27,993 127,993 21,886 21,886 121,886
24 57,920 28,846 28,846 128,846 22,022 22,022 122,022
25 61,719 29,583 29,583 129,583 21,968 21,968 121,968
30 83,118 30,774 30,774 130,774 17,994 17,994 117,994
35 109,153 25,243 25,243 125,243 4,369 4,369 104,369
40 140,828 8,008 8,008 108,008 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 JP FINANCIAL, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.26% NET)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM (1): $1,425
<TABLE>
<CAPTION>
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 1,216 840 101,216 1,215 839 101,215
2 3,067 2,539 2,162 102,539 2,536 2,160 102,536
3 4,717 3,978 3,601 103,978 3,974 3,598 103,974
4 6,449 5,552 5,175 105,552 5,537 5,161 105,537
5 8,268 7,287 6,911 107,287 7,239 6,862 107,239
6 10,177 9,201 8,887 109,201 9,089 8,775 109,089
7 12,182 11,311 11,060 111,311 11,100 10,849 111,100
8 14,288 13,625 13,437 113,625 13,287 13,099 113,287
9 16,498 16,177 16,051 116,177 15,666 15,540 115,666
10 18,820 18,990 18,927 118,990 18,252 18,189 118,252
11 21,257 22,122 22,122 122,122 21,069 21,069 121,069
12 23,816 25,557 25,557 125,557 24,141 24,141 124,141
13 26,503 29,324 29,324 129,324 27,490 27,490 127,490
14 29,324 33,456 33,456 133,456 31,138 31,138 131,138
15 32,287 37,985 37,985 137,985 35,109 35,109 135,109
16 35,398 42,951 42,951 142,951 39,430 39,430 139,430
17 38,664 48,392 48,392 148,392 44,129 44,129 144,129
18 42,093 54,353 54,353 154,353 49,243 49,243 149,243
19 45,694 60,881 60,881 160,881 54,808 54,808 154,808
20 49,475 68,024 68,024 168,024 60,860 60,860 160,860
21 53,445 75,836 75,836 175,836 67,439 67,439 167,439
22 57,613 84,380 84,380 184,380 74,589 74,589 174,589
23 61,990 93,723 93,723 193,723 82,351 82,351 182,351
24 66,586 103,935 103,935 203,935 90,769 90,769 190,769
25 71,412 115,099 115,099 215,099 99,890 99,890 199,890
30 99,409 188,476 188,476 288,476 158,241 158,241 258,241
35 135,142 302,444 302,444 402,444 244,490 244,490 344,490
40 180,747 479,311 479,311 579,311 369,884 369,884 469,884
</TABLE>
- -------
(1) Assumes a $1,425 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR THE FUNDS' SERIES. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JP FINANCIAL, 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>
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 78 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:
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. (Incorporated by reference to Exhibit 3 of Post-Effective
Amendment No. 13 to the Registration Statement on Form S-6 dated April 28,
1997.)
4. Not Applicable.
5 Not Applicable.
6. Actuarial opinion and consent of Richard Dielensnyder, FSA, MAAA.
(Incorporated by reference to Exhibit 6 of Post-Effective Amendment No. 15 to
the Registration Statement on Form S-6 dated December 18, 1997.)
7. Consent of Ernst & Young LLP.
8. Procedures Memorandum, as amended, pursuant to Rule 6e-3(T) (b) (12) (iii)
under the 1940 Act.(Incorporated by reference to Exhibit 8 of Post-Effective
Amendment No. 13 to the Registration Statement on Form S-6 dated April 28,
1997.)
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. 13 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).
(Incorporated by reference to Exhibit 10 of Post-Effective Amendment No. 13
to the Registration Statement on Form S-6 dated April 28, 1997.)
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. Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
JPF Separate Account A certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Post-Effective Amendment No. 16 to the
Registration Statement and, has duly caused this Post-Effective Amendment No. 16
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 15th day of April, 1998.
(SEAL) JPF SEPARATE ACCOUNT A
(Registrant)
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
AMERICA (Depositor)
/s/ Charles C. Cornelio
By:_______________________________
Charles C. Cornelio
Title: Executive Vice President,
-----------------------------
ATTEST:
/s/ Ronald Angarella
- ---------------------------
Ronald Angarella
Senior Vice President
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Jefferson Pilot
Financial Insurance Company certifies that it meets the requirements of the
Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment
No. 16 to the Registration Statement and has duly caused this Post-Effective
Amendment No. 16 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 15th day of April, 1998.
[SEAL APPEARS HERE] JEFFERSON POLOT FINANCIAL INSURANCE COMPANY
By: /s/ Charles C. Cornelio
----------------------------
Charles C. Cornelio
Title: Executive Vice President
-----------------------------
ATTEST:
/s/ Ronald R. Angarella
- --------------------------
Ronald R. Angarella
Senior Vice President
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.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/
- ------------------------------------ Director April 15, 1997
Dennis R. Glass
/s/
- ------------------------------------ Director April 15, 1997
Kenneth C. Mlekush
/s/
- ------------------------------------ Director April 15, 1997
David A. Stonecipher
/s/
- ------------------------------------ Director April 15, 1997
E. Jay Yelton
</TABLE>
<PAGE>
EXHIBIT INDEX
7. Consent of Ernst & Young LLP
Independent Auditors................................
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 1
<NAME> WORLD GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 90,077,064
<INVESTMENTS-AT-VALUE> 104,345,292
<RECEIVABLES> 13,631,418
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 117,976,710
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 103,708,483
<SHARES-COMMON-STOCK> 2,912,218
<SHARES-COMMON-PRIOR> 2,795,358
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,268,228
<NET-ASSETS> 117,976,710
<DIVIDEND-INCOME> 15,769,535
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,001,394
<NET-INVESTMENT-INCOME> 14,768,141
<REALIZED-GAINS-CURRENT> 1,393,920
<APPREC-INCREASE-CURRENT> (2,140,961)
<NET-CHANGE-FROM-OPS> 14,021,100
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,011,924
<NUMBER-OF-SHARES-REDEEMED> 895,063
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 18,884,403
<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> 108,534,508
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 2
<NAME> MONEY MARKET DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 8,669,243
<INVESTMENTS-AT-VALUE> 8,400,312
<RECEIVABLES> 550,284
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,950,596
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,219,527
<SHARES-COMMON-STOCK> 537,384
<SHARES-COMMON-PRIOR> 499,795
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (268,931)
<NET-ASSETS> 8,950,596
<DIVIDEND-INCOME> 425,055
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 90,263
<NET-INVESTMENT-INCOME> 334,792
<REALIZED-GAINS-CURRENT> 61,042
<APPREC-INCREASE-CURRENT> (11,529)
<NET-CHANGE-FROM-OPS> 384,305
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,230,904
<NUMBER-OF-SHARES-REDEEMED> 2,193,315
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 939,441
<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> 8,480,875
<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>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 3
<NAME> GOLD STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 7,860,630
<INVESTMENTS-AT-VALUE> 5,204,654
<RECEIVABLES> 68,750
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,273,404
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,929,380
<SHARES-COMMON-STOCK> 588,243
<SHARES-COMMON-PRIOR> 474,529
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,655,976)
<NET-ASSETS> 5,273,404
<DIVIDEND-INCOME> 207,179
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 60,762
<NET-INVESTMENT-INCOME> 146,417
<REALIZED-GAINS-CURRENT> (1,020,911)
<APPREC-INCREASE-CURRENT> (2,862,423)
<NET-CHANGE-FROM-OPS> (3,736,917)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 589,273
<NUMBER-OF-SHARES-REDEEMED> 475,559
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2,479,985)
<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> 6,513,396
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 4
<NAME> DOMESTIC GROWTH STOCK DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 67,408,202
<INVESTMENTS-AT-VALUE> 81,505,107
<RECEIVABLES> 7,703,656
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89,208,763
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 75,111,858
<SHARES-COMMON-STOCK> 1,965,482
<SHARES-COMMON-PRIOR> 1,890,101
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,096,905
<NET-ASSETS> 89,208,763
<DIVIDEND-INCOME> 8,059,006
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 717,430
<NET-INVESTMENT-INCOME> 7,341,576
<REALIZED-GAINS-CURRENT> 1,112,075
<APPREC-INCREASE-CURRENT> 7,517,633
<NET-CHANGE-FROM-OPS> 15,971,284
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 783,149
<NUMBER-OF-SHARES-REDEEMED> 707,768
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 19,171,474
<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> 79,623,026
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 5
<NAME> BOND DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 13,430,888
<INVESTMENTS-AT-VALUE> 13,460,497
<RECEIVABLES> 775,796
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14,236,293
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,206,684
<SHARES-COMMON-STOCK> 688,075
<SHARES-COMMON-PRIOR> 642,703
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 29,609
<NET-ASSETS> 14,236,293
<DIVIDEND-INCOME> 766,317
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 114,725
<NET-INVESTMENT-INCOME> 651,592
<REALIZED-GAINS-CURRENT> 31,843
<APPREC-INCREASE-CURRENT> 235,133
<NET-CHANGE-FROM-OPS> 918,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 396,342
<NUMBER-OF-SHARES-REDEEMED> 350,970
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,846,679
<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> 13,312,954
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 6
<NAME> GROWTH AND INCOME DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 31,634,822
<INVESTMENTS-AT-VALUE> 33,669,586
<RECEIVABLES> 8,586,475
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,256,061
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,221,297
<SHARES-COMMON-STOCK> 1,715,173
<SHARES-COMMON-PRIOR> 1,264,705
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,034,764
<NET-ASSETS> 42,256,061
<DIVIDEND-INCOME> 8,969,193
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 298,852
<NET-INVESTMENT-INCOME> 8,670,341
<REALIZED-GAINS-CURRENT> 763,718
<APPREC-INCREASE-CURRENT> (1,791,862)
<NET-CHANGE-FROM-OPS> 7,642,197
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,110,245
<NUMBER-OF-SHARES-REDEEMED> 659,777
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 17,868,820
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 7
<NAME> CAPITAL GROWTH DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 93,619,613
<INVESTMENTS-AT-VALUE> 119,724,549
<RECEIVABLES> 4,051,021
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<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 97,670,634
<SHARES-COMMON-STOCK> 3,905,849
<SHARES-COMMON-PRIOR> 3,344,862
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26,104,936
<NET-ASSETS> 123,775,570
<DIVIDEND-INCOME> 5,577,867
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 962,680
<NET-INVESTMENT-INCOME> 4,615,187
<REALIZED-GAINS-CURRENT> 827,249
<APPREC-INCREASE-CURRENT> 19,770,192
<NET-CHANGE-FROM-OPS> 25,212,628
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,727,504
<NUMBER-OF-SHARES-REDEEMED> 1,166,517
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 41,107,700
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 103,221,720
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 8
<NAME> BALANCED DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 21,515,249
<INVESTMENTS-AT-VALUE> 21,466,699
<RECEIVABLES> 3,353,426
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24,820,125
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<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,868,675
<SHARES-COMMON-STOCK> 1,405,584
<SHARES-COMMON-PRIOR> 1,272,168
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (48,550)
<NET-ASSETS> 24,820,125
<DIVIDEND-INCOME> 3,981,481
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 199,545
<NET-INVESTMENT-INCOME> 3,781,936
<REALIZED-GAINS-CURRENT> 125,127
<APPREC-INCREASE-CURRENT> (829,904)
<NET-CHANGE-FROM-OPS> 3,077,159
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 557,010
<NUMBER-OF-SHARES-REDEEMED> 423,594
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,334,604
<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> 22,152,823
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 9
<NAME> EMERGING GROWTH DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 41,615,418
<INVESTMENTS-AT-VALUE> 47,023,543
<RECEIVABLES> 2,469,013
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,492,556
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 44,084,431
<SHARES-COMMON-STOCK> 2,676,491
<SHARES-COMMON-PRIOR> 1,746,963
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,408,125
<NET-ASSETS> 49,492,556
<DIVIDEND-INCOME> 2,355,925
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 341,819
<NET-INVESTMENT-INCOME> 2,014,106
<REALIZED-GAINS-CURRENT> 528,900
<APPREC-INCREASE-CURRENT> 3,845,746
<NET-CHANGE-FROM-OPS> 6,388,752
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,187,207
<NUMBER-OF-SHARES-REDEEMED> 1,257,679
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 22,434,092
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 38,275,510
<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
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 10
<NAME> TEMPLETON DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 34,817,406
<INVESTMENTS-AT-VALUE> 40,080,166
<RECEIVABLES> 35,862
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 40,116,028
<PAYABLE-FOR-SECURITIES> 0
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<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 34,853,268
<SHARES-COMMON-STOCK> 2,596,410
<SHARES-COMMON-PRIOR> 1,668,063
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,262,760
<NET-ASSETS> 40,116,027
<DIVIDEND-INCOME> 951,180
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 301,799
<NET-INVESTMENT-INCOME> 649,381
<REALIZED-GAINS-CURRENT> 828,887
<APPREC-INCREASE-CURRENT> 2,126,633
<NET-CHANGE-FROM-OPS> 3,604,901
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,174,212
<NUMBER-OF-SHARES-REDEEMED> 1,245,865
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 17,293,664
<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> 31,469,196
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 11
<NAME> FIDELITY CONTRA DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 16,821,745
<INVESTMENTS-AT-VALUE> 19,139,001
<RECEIVABLES> 44,394
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19,183,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16,866,139
<SHARES-COMMON-STOCK> 1,397,617
<SHARES-COMMON-PRIOR> 444,719
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,317,256
<NET-ASSETS> 19,183,395
<DIVIDEND-INCOME> 195,147
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 112,772
<NET-INVESTMENT-INCOME> 82,375
<REALIZED-GAINS-CURRENT> 143,362
<APPREC-INCREASE-CURRENT> 1,928,296
<NET-CHANGE-FROM-OPS> 2,154,033
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,533,238
<NUMBER-OF-SHARES-REDEEMED> 580,340
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 14,220,870
<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> 12,072,960
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 12
<NAME> FIDELITY HIGH INCOME DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 6,879,994
<INVESTMENTS-AT-VALUE> 7,437,891
<RECEIVABLES> 62,688
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,500,579
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,942,682
<SHARES-COMMON-STOCK> 597,876
<SHARES-COMMON-PRIOR> 262,053
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 557,897
<NET-ASSETS> 7,500,579
<DIVIDEND-INCOME> 279,185
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 45,794
<NET-INVESTMENT-INCOME> 233,391
<REALIZED-GAINS-CURRENT> 71,464
<APPREC-INCREASE-CURRENT> 451,237
<NET-CHANGE-FROM-OPS> 756,092
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 797,876
<NUMBER-OF-SHARES-REDEEMED> 462,054
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,681,378
<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> 5,159,891
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000757552
<NAME> CHUBB SEPARATE ACCOUNT A
<SERIES>
<NUMBER> 13
<NAME> FIDELITY INDEX 500 DIVISION
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 24,513,790
<INVESTMENTS-AT-VALUE> 28,918,871
<RECEIVABLES> 55,891
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 28,974,762
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 24,569,681
<SHARES-COMMON-STOCK> 1,931,963
<SHARES-COMMON-PRIOR> 660,083
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,405,081
<NET-ASSETS> 28,974,762
<DIVIDEND-INCOME> 306,815
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 164,470
<NET-INVESTMENT-INCOME> 142,345
<REALIZED-GAINS-CURRENT> 435,364
<APPREC-INCREASE-CURRENT> 3,844,079
<NET-CHANGE-FROM-OPS> 4,421,788
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,094,648
<NUMBER-OF-SHARES-REDEEMED> 822,768
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,447,177
<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> 18,251,174
<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>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our reports dated February 9, 1998 for Chubb Life Insurance Company of
America and subsidiaries and March 13, 1998 for Chubb Separate Account A in
Post-Effective Amendment No. 16 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
Greensboro, North Carolina
April 13, 1998
