As filed with the Securities and Exchange Commission on November 8, 2000
FILE NO. 333-44228
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF
1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------
A. Exact name of trust:
JPF SEPARATE ACCOUNT A
B. Name of depositor:
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
C. Complete address of depositor's principal executive offices:
One Granite Place
Concord, NH 03301
D. Name and complete address of agent for service:
Ronald R. Angarella
President
Jefferson Pilot Securities Corporation
One Granite Place
Concord, NH 03301
Copies to:
Charlene Grant, Esq. Joan E. Boros, Esq.
Jefferson Pilot Financial 1025 Thomas Jefferson Street, N.W.
Company Suite 400 East
One Granite Place Washington, D.C. 20007-0805
Concord, NH 03301
------------
E. Title of securities being registered:
Units of Interest in the Separate Account under Individual Flexible Premium
Variable Life Insurance Policies.
F. Approximate date of proposed public offering:
As soon as practicable after the effective date.
The Registrant is registering an indefinite amount of securities pursuant to
Section 24(f) of the Investment Company Act of 1940.
Registrant hereby amends this Registration Statement under the Securities Act
of 1933 on such date or dates as may be necessary to delay its effective date
until Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
November 1, 2000
Ensemble Exec
JPF Separate Account A
Flexible Premium Variable Life Insurance Policy
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
SERVICE OFFICE: One Granite Place, Concord, New Hampshire 03301 800-258-3648
--------------------------------------------------------------------------------
This Prospectus describes the Ensemble Exec Variable Life Insurance Policy
("Ensemble Exec" or "the Policy"), a flexible premium variable life insurance
policy issued and underwritten by Jefferson Pilot Financial Insurance Company
("we" or "JP Financial" or "the Company") and designed primarily for use on a
multi-life basis when the insured people share a common employment or business
relationship. The Policy provides life insurance and pays a benefit, as
described in this Prospectus, upon the Insured's death or surrender of the
Policy. The Policy allows flexible premium payments, Policy Loans, Withdrawals,
and a choice of Death Benefit Options. Your account values may be invested on
either a fixed or variable or combination of fixed and variable basis. You may
allocate your Net Premiums to JPF Separate Account A ("Separate Account A" or
the "Separate Account"), and/or the General Account, or both Accounts. The
Divisions of Separate Account A support the benefits provided by the variable
portion of the Policy. The Accumulation Value allocated to each Division is not
guaranteed and will vary with the investment performance of the associated
Fund. Net Premiums allocated to the General Account will accumulate at rates of
interest we determine; such rates will not be less than 4% per year. Your
Policy may lapse if the Net Accumulation Value is insufficient to pay a Monthly
Deduction. We will send premium reminder notices for Planned Premiums and for
premiums required to continue the Policy in force. If the Policy lapses, you
may reinstate it.
The Policy has a free look period during which you may return the Policy. We
will refund your Premium (See "Right of Policy Examination").
This Prospectus also describes the Divisions used to fund the Policy through
the Separate Account. Each Division invests exclusively in one of the following
Portfolios:
JPVF International Equity Portfolio
JPVF World Growth Stock Portfolio
JPVF Global Hard Assets Portfolio
JPVF Emerging Growth Portfolio
JPVF Capital Growth Portfolio
JPVF Small Company Portfolio
JPVF Growth Portfolio
JPVF S&P 500 Index Portfolio
JPVF Value Portfolio
JPVF Balanced Portfolio
JPVF High Yield Bond Portfolio
JPVF Money Market Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP II Contrafund Portfolio
MFS Research Series
MFS Utilities Series
Oppenheimer Strategic Bond Fund/VA
Oppenheimer Bond Fund/VA
Templeton International Securities Fund: Class 2
Not all Divisions may be available under all Policies or in all jurisdictions.
You may obtain the current Prospectus and Statement of Additional Information
("SAI") for any of the Portfolios by calling (800) 258-3648 x7719.
Replacing existing insurance or supplementing an existing flexible premium
variable life insurance policy with the Policy may not be to your advantage.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR
THE FUNDS. BOTH THIS PROSPECTUS AND THE UNDERLYING FUND PROSPECTUSES SHOULD BE
READ AND RETAINED FOR FUTURE REFERENCE.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
Ensemble Exec 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.
THIS PROSPECTUS AND OTHER INFORMATION ABOUT JPF SEPARATE ACCOUNT A REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE FOUND IN THE SEC'S
WEB SITE AT http://www.sec.gov.
<PAGE>
table of contents
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Page
-----
<S> <C>
DEFINITIONS ....................................... 3
POLICY SUMMARY .................................... 4
THE SEPARATE ACCOUNT .............................. 5
CHARGES & FEES .................................... 6
Charges & Fees Assessed Against
Premium ......................................... 6
Charges & Fees Assessed Against
Accumulation Value .............................. 6
Charges & Fees Assessed Against the
Separate Account ................................ 7
Charges Assessed Against the Underlying
Funds ........................................... 8
ALLOCATION OF PREMIUMS ............................ 9
The Portfolios ................................... 9
Investment Advisers for each of the
Funds ........................................... 10
Mixed and Shared Funding; Conflicts of
Interest ........................................ 11
Fund Additions, Deletions or Substitutions . 11
General Account ................................... 12
POLICY CHOICES .................................... 12
General .......................................... 12
Detailed Information about the Policy ............ 12
Premium Payments ................................. 13
Modified Endowment Contract ...................... 13
Compliance with the Internal Revenue
Code ............................................ 13
Death Benefit Options ............................ 14
Transfers and Allocations to Funding
Options ......................................... 15
Telephone Transfers, Loans and
Reallocations ................................... 16
Automated Transfers (Dollar Cost
Averaging and Portfolio Rebalancing) ............ 16
POLICY VALUES ..................................... 17
Accumulation Value ............................... 17
Unit Values ...................................... 18
Net Investment Factor ............................ 18
Surrender Value .................................. 18
POLICY RIGHTS ..................................... 18
Surrenders ....................................... 18
Withdrawals ...................................... 18
Grace Period ..................................... 19
Reinstatement of a Lapsed or Terminated
Policy .......................................... 19
</TABLE>
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Coverage Beyond Insured's Attained
Age 100 ......................................... 19
Right to Defer Payment ........................... 19
Policy Loans ..................................... 20
Policy Changes ................................... 21
Right of Policy Examination ...................... 22
Supplemental Benefits ............................ 22
DEATH BENEFIT ..................................... 23
POLICY SETTLEMENT ................................. 23
Settlement Options ............................... 24
THE COMPANY ....................................... 25
DIRECTORS & OFFICERS .............................. 26
ADDITIONAL INFORMATION ............................ 27
Reports to Policyowners .......................... 27
Right to Instruct Voting of Fund Shares .......... 27
Disregard of Voting Instructions ................. 28
State Regulation ................................. 28
Legal Matters .................................... 28
The Registration Statement ....................... 28
Financial Statements ............................. 28
Employment Benefit Plans ......................... 28
Distribution of the Policy ....................... 28
Independent Auditors ............................. 29
GROUP OR SPONSORED ARRANGEMENTS 29
TAX MATTERS ....................................... 29
General .......................................... 29
Federal Tax Status of the Company ................ 29
Life Insurance Qualification ..................... 30
Charges for JP Financial Income Taxes ............ 32
MISCELLANEOUS POLICY PROVISIONS ................... 33
The Policy ....................................... 33
Payment of Benefits .............................. 33
Suicide and Incontestability ..................... 33
Protection of Proceeds ........................... 33
Nonparticipation ................................. 33
Changes in Owner and Beneficiary;
Assignment ...................................... 33
Misstatements .................................... 33
ILLUSTRATIONS OF ACCUMULATION
VALUES, CASH VALUES AND DEATH
BENEFITS ......................................... A-1
</TABLE>
--------------------------------------------------------------------------------
This prospectus does not constitute an offer in any jurisdiction in which such
offering may not be lawfully made. No dealer, salesman or other person is
authorized to give any information or make any representations in connection
with this offering other than those contained in this prospectus, and, if given
or made, such other information or representations must not be relied upon. The
purpose of this variable life insurance policy is to provide insurance
protection. Life insurance is a long-term investment. Policyowners should
consider their need for insurance coverage and the policy's long-term investment
potential. No claim is made that the policy is any way similar or comparable to
an investment in a mutual fund.
--------------------------------------------------------------------------------
2
<PAGE>
definitions
--------------------------------------------------------------------------------
Accumulation Value: The total amount that a Policy provides for investment plus
the amount held as collateral for Policy Debt.
Age: The Insured's age at his/her nearest birthday.
Allocation Date: The date when the initial Net Premium is placed in the
Divisions and the General Account as instructed by the Policyowner in the
application. The Allocation Date is the later of 1) 25 days from the date we
mail the Policy to the agent for delivery to you; or 2) the date we receive all
administrative items needed to activate the Policy.
Attained Age: The Insured's age at the last Policy Anniversary.
Beneficiary: The person you designate in the application to receive the Death
Benefit proceeds. If changed, the Beneficiary is as shown in the latest change
filed with us. If no Beneficiary survives the Insured, you or your estate will
be the Beneficiary. The Beneficiary's interest may be subject to that of any
assignee.
Code: The Internal Revenue Code of 1986, as amended.
Company: Jefferson Pilot Financial Insurance Company.
Cost of Insurance: A charge related to our expected mortality cost for your
basic insurance coverage under the Policy, not including any supplemental
benefit provision that you may elect through a Policy rider.
Date of Receipt: Any Company business day, prior to 4:00 p.m. Eastern time, on
which a notice or premium payment is received at our home office.
Death Benefit: The amount which is payable on the Death of the Insured,
adjusted as provided in the Policy.
Death Benefit Options: The methods for determining the Death Benefit.
Division: A separate division of Separate Account A which invests only in the
shares of a specified Portfolio of a Fund.
Fund: An open-end management investment company whose shares are purchased by
the Separate Account to fund the benefits provided by the Policy.
General Account: A non-variable funding option available in the Policy that
guarantees a minimum interest rate of 4% per year.
Grace Period: The 61-day period beginning on the Monthly Anniversary Day on
which the Policy's Net Accumulation Value is insufficient to cover the current
Monthly Deduction. The Policy will lapse without value at the end of the 61-day
period unless we receive a sufficient payment.
Insured: The person on whose life the Policy is issued.
Issue Age: The Age of the Insured on the Policy's Issue Date.
Issue Date: The effective date on which we issue the Policy.
Load Basis Amount: An amount per $1,000 of Specified Amount which varies by
sex, Issue Age (or Attained Age for an increase in Specified Amount) and rating
class of the Insured. This amount is used to calculate the Acquisition Charge.
The maximum Load Basis Amount is $66.65, resulting in an Acquisition Charge of
$.40 per $1000 of Specified Amount in Years 1 through 10.
Loan Value: Generally, 100% of the Policy's Net Accumulation Value on the date
of a loan.
Monthly Anniversary Date: The same day in each month as the Policy Date.
Net Accumulation Value: Accumulation Value less Policy Debt.
Net Premium: The gross premium less a 2.5% State Premium Tax Charge, a 1.25%
Federal DAC Tax Charge and a 3% Premium Load. We currently do not intend to
assess the Premium Load beginning in the 11th Policy Year.
Policy: The life insurance contract described in this Prospectus.
Policy Date: The date set forth in the Policy from which policy years, policy
months and policy anniversaries will be determined. If the Policy Date falls on
the 29th, 30th or 31st of a month, the Policy Date will be the 28th of such
month. You may request the Policy Date. If You do not request a date, it is the
date the Policy is issued.
3
<PAGE>
Policy Debt: The principal of any loans outstanding against the Policy, plus
the accrued loan interest which has not been paid.
Portfolio: A separate investment series of one of the Funds.
Premium Load: A charge we assess against premium payments.
Proof of Death: One or more of: 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; or d) any other proof satisfactory to us.
Refund of Sales Charges: A refund we make of all first-year acquisition
charges, Premium Load and administrative charges you paid if you surrender your
Policy in the first two Policy Years.
SEC: Securities and Exchange Commission.
Separate Account A or the Separate Account: JPF Separate Account A, a separate
investment account we established for the purpose of funding the Policy.
Service Office: Our principal executive offices at One Granite Place, Concord,
New Hampshire 03301.
Specified Amount: The amount you choose at application, which may subsequently
be increased or decreased, as provided in the Policy. The Specified Amount is
used in determining the Death Benefit.
State: Any State of the United States, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands, the Commonwealth of the Northern Mariana Islands or
any other possession of the United States.
Surrender Value: Net Accumulation Value plus Refund of Sales Charges if the
surrender occurs in the first two Policy years.
Target Premium: The premium from which first year commissions will be
determined and which varies by sex, Issue Age, rating class of the Insured and
Specified Amount.
Valuation Date: The date and time at which the Accumulation Value of a variable
investment option is calculated. Currently, this calculation occurs after the
close of business of the New York Stock Exchange on any normal business day,
Monday through Friday, that the New York Stock Exchange and the Company are
open. In addition to being closed on all federal holidays, we will also be
closed on Good Friday, the Friday following Thanksgiving and the day before or
following Christmas.
Valuation Period: The period of time between two successive Valuation Dates,
beginning 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.
policy summary
--------------------------------------------------------------------------------
This Prospectus describes a flexible premium variable life insurance policy.
The Policy provides life insurance and pays a benefit (subject to adjustment
under the Policy's Age and/or Sex, Suicide and Incontestability, and Grace
Period provisions) upon surrender or Death of the Insured. The Policy allows
flexible premium payments, Policy Loans, Withdrawals and a choice of Death
Benefit Options. Account values may be either fixed or variable or a
combination of fixed and variable.
We designed Ensemble Exec primarily to be used in multi-life situations where
the insureds share common employment or have a business relationship. The
Policy may be owned individually or by a corporation, trust, association or
other similar entity. You may use the Policy to informally fund non-qualified
executive deferred compensation, salary continuation plans, retiree medical
benefits or other purposes.
Charges and fees will be assessed against premium payments, Accumulation Value,
the Separate Account, the underlying Funds and upon partial withdrawals.
You must purchase your variable life insurance policy from a registered
representative. The Policy, the initial application on the Insured, any
subsequent applications, endorsements and any riders constitute the entire
contract.
At the time of application, you must choose a Death Benefit Option, decide on
the amount of planned premium and determine how to allocate Net Premiums. You
may elect to supplement the benefits afforded by the Policy through the
addition of riders we make available.
4
<PAGE>
The proceeds payable upon the Death of the Insured depend on the Death Benefit
Option chosen. Under Option 1 the Death Benefit equals the current Specified
Amount. Under Option 2, the Death Benefit equals the current Specified Amount
plus the Accumulation Value on the date of death. Under Option 3, the Death
Benefit equals the Specified Amount plus total premiums paid, less any
withdrawals. We may make other options available. We will reduce the Death
Benefit proceeds by any outstanding Policy Debt.
Although the Policy is designed to allow flexible premiums, you must pay
sufficient premiums to continue the Policy in force. The initial premium must
be paid at issue. The initial premium is based on Issue Age, underwriting class
and Specified Amount. No premium payment may be less than $250 ($50 for
electronic fund transfers). We will send you premium reminder notices for
Planned Premiums and for premiums required to continue the Policy in force.
Should your Policy lapse, you may reinstate it.
You may allocate your Net Premiums to the Separate Account, the General Account
or both Accounts. Net Premiums allocated to the Separate Account must be
allocated to one or more of the Divisions of the Separate Account and
allocations must be in whole percentages. The variable portion of the Policy is
supported by the Divisions you choose and will vary with the investment
performance of the associated Portfolios. Net Premiums allocated to the General
Account will accumulate at rates of interest we determine. The effective rate
of interest will not be less than 4% per year.
the separate account
--------------------------------------------------------------------------------
The Separate Account underlying the Policy is JPF Separate Account A. Amounts
allocated to the Separate Account are invested in the Portfolios. Each
Portfolio is a series of an open-end management investment company whose shares
are purchased by the Separate Account to fund the benefits provided by the
Policy. The Portfolios, including their investment objectives and their
investment advisers, are described in this Prospectus. Complete descriptions of
the Portfolios' investment objectives and restrictions and other material
information relating to the Portfolios are contained in the Funds'
prospectuses, which are delivered with this Prospectus.
Separate Account A was established under New Hampshire law on August 20, 1984.
Under New Hampshire Insurance Law, the income, gains or losses of the Separate
Account are credited without regard to the other income, gains or losses of the
Company. These assets are held for our variable life insurance policies and
variable annuities. Any and all distributions made by the Portfolios with
respect to shares held by the Separate Account will be reinvested in additional
shares at net asset value. The assets maintained in the Separate Account will
not be charged with any liabilities arising out of any other business we
conduct. We are, however, responsible for meeting the obligations of the Policy
to the Policyowner.
No stock certificates are issued to the Separate Account for shares of the
Portfolios held in the Separate Account. Ownership of Portfolio shares is
documented on the books and records of the Portfolios and of the Company for
the Separate Account.
The Separate Account is registered with the SEC as a unit investment trust
under the Investment Company Act of 1940 and meets the definition of separate
account under the federal securities laws. Such registration does not involve
any approval or disapproval by the Commission of the Separate Account or our
management or investment practices or policies. We do not guarantee the
Separate Account's investment performance.
Divisions. The Policies presently offer twenty Divisions but may add or delete
Divisions. You may invest in a total of 17 Divisions over the life of the
Policy. Each Division will invest exclusively in shares of a single Portfolio.
5
<PAGE>
charges & fees
--------------------------------------------------------------------------------
> CHARGES & FEES ASSESSED AGAINST PREMIUM
Premium Charges
Before a premium is allocated to any of the Divisions of Separate Account A
and the General Account, we will deduct the following fees and charges:
o a state premium tax charge of 2.5% unless otherwise required by state law
(1.0% in Oregon and 2.35% in California).
The state premium tax charge reimburses us for taxes we pay to states and
municipalities in which the Policy is sold. The amount of tax assessed by a
state or municipality may be more or less than the charge. We may impose the
premium tax charge in states which do not themselves impose a premium tax.
o a federal income tax charge of 1.25% ("Federal DAC Tax Charge") which
reimburses us for our increased federal tax liability under the federal
tax laws. Subject to state law, we reserve the right to increase these tax
charges due to changes in the state or federal tax laws that increase our
tax liability.
o a Premium Load which we currently do not intend to assess after the 10th
Policy Year and which is guaranteed not to exceed 3% of premium.
> CHARGES & FEES ASSESSED AGAINST ACCUMULATION VALUE
Charges and fees assessed against the Policy's Accumulation Value can be
deducted from any one of the Divisions, the General Account, or pro rata
from each of the Divisions and the General Account. If you do not designate
one Division, we will deduct the charges pro rata from each of the Divisions
and the General Account.
Monthly Deduction
On each Monthly Anniversary Date and on the Policy Date, we will deduct from
the Policy's Accumulation Value an amount to cover certain expenses
associated with start-up and maintenance of the Policy, administrative
expenses, the cost of insurance for the Policy and any optional benefits
added by rider.
The Monthly Deduction equals:
i) the Cost of Insurance for the Policy (as described below), plus
ii) a Monthly Administrative Fee of $10, plus
iii) a monthly Acquisition Charge during the first ten Policy Years equal to
0.6% of the Load Basis Amount, plus
iv) the cost of optional benefits provided by rider.
v) a monthly acquisition charge during the first 120 months following any
increase in Specified Amount.
Cost of Insurance. The Cost of Insurance charge is related to our expected
mortality cost for your basic insurance coverage under the Policy, not
including any supplemental benefit provisions that you may elect through a
Policy rider.
The Cost of Insurance charge equals (i) multiplied by the result of (ii)
minus (iii) where:
i) is the current Cost of Insurance Rate as described in the Policy;
ii) is the death benefit at the beginning of the policy month divided by
1.0032737 (to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4%); and
iii) is the Accumulation Value at the beginning of the policy month, prior
to the monthly deduction for the Cost of Insurance.
The current Cost of Insurance Rate is variable and is based on the Insured's
issue age, sex (where permitted by law), rating class, Policy Year and
Specified Amount. Because the Accumulation Value and the Death Benefit of
the Policy may vary from month to month, the Cost of Insurance charge may
also vary on each day a Monthly Deduction is taken. In addition, you should
note that the Cost of Insurance charge is related to the difference between
the Death Benefit payable under the Policy and the Accumulation Value of the
Policy. An increase in the Accumulation Value or a decrease in the Death
Benefit may result in a smaller Cost of Insurance charge while a decrease in
the Accumulation Value or an increase in the Death Benefit may result in a
larger cost of insurance charge.
6
<PAGE>
The Cost of Insurance rate for standard risks will not exceed those based on
the 1980 Commissioners Standard Ordinary Mortality Tables Male or Female
(1980 Tables). Substandard risks will have monthly deductions based on Cost
of Insurance rates which may be higher than those set forth in the 1980
Tables. A table of guaranteed maximum Cost of Insurance rates per $1,000 of
the Amount at Risk will be included in each Policy. We may adjust the
Monthly Cost of Insurance rates from time to time. Adjustments will be on a
class basis and will be based on our estimates for future factors such as
mortality experience, investment earnings, expenses (including reinsurance
costs), taxes and the length of time Policies stay in force. Any adjustments
will be made on a nondiscriminatory basis. The current Cost of Insurance
rate will not exceed the applicable maximum Cost of Insurance rate shown in
your Policy.
Monthly Administrative Expense Charge. The Monthly Deduction amount also
includes a monthly administration fee of $10.00. This fee may not be
increased.
Acquisition Charge. We will deduct from the Accumulation Value a monthly
acquisition charge of 0.6% of the Load Basis Amount in Policy Years 1
through 10 (7.2% annually). The Load Basis Amount is an amount per $1000 of
Specified Amount, which varies by sex, Issue Age and rating class of the
Insured. The maximum load Basis Amount is $66.65, resulting in a maximum
Acquisition Charge of $.40 per $1000 of Specified Amount in years 1 through
10. This charge does not vary with the amount of premium paid. We will also
deduct a pro-rated acquisition charge on increases in Specified Amount. We
reserve the right to increase or decrease this charge for policies not yet
issued in order to correspond with changes in distribution costs of the
Policy. The charge compensates us for the cost of selling the Policy,
including, among other things, agents' commissions, advertising and printing
of prospectuses and sales literature. Normally this charge compensates us
for total sales expenses for the year. To the extent sales expenses in any
policy year are not recovered by the Acquisition Charges we collect, we may
recover sales expenses from other sources, including profits from the
Mortality Risk and Expense Risk Charges.
Charges for Optional Benefits. If you elect any optional benefits by adding
riders to the Policy, an optional benefits charge will be included in the
Monthly Deduction amount. The amount of the charge will vary depending upon
the actual optional benefits selected and is described on each applicable
Policy rider.
Refund of Sales Charges. If you surrender your Policy within the first two
policy years, we will refund to you all first-year acquisition charges,
Premium Load and administrative charges you paid.
This guaranteed refund is available only upon surrender in the first two
Policy Years. If the Policy has additional coverage due to a Supplementary
Coverage Rider, the refund of Premium Load and Administrative Charges will
be reduced by the percentage of total coverage that is due to the
Supplementary Coverage Rider.
> CHARGES & FEES ASSESSED AGAINST THE SEPARATE ACCOUNT
Mortality and Expense Risk Charge
We will assess a charge on a daily basis against each Division at a current
annual rate of 0.60% in Policy Years 1 through 25 and 0.40% in Policy Years
26 and later of the value of the Divisions to compensate us for mortality
and expense risks we assume in connection with the Policy. We reserve the
right to increase this charge, but guarantee that it will not exceed 0.85%
in Policy Years 1 through 25 and 0.60% in Policy Years 26 and thereafter.
The mortality risk we assume is that Insureds, as a group, may live for a
shorter period of time than estimated and that we will, therefore, pay a
Death Benefit before collecting a sufficient Cost of Insurance charge. The
expense risk assumed is that expenses incurred in issuing and administering
the Policies and operating the Separate Account will be greater than the
administrative charges assessed for such expenses.
The Separate Account is not subject to any taxes. However, if taxes are
assessed against the Separate Account, we reserve the right to assess taxes
against the Separate Account Value.
Administrative Charge for Transfers or Withdrawal
We may impose an Administrative Fee of $50 for each transfer among the
Divisions of the Separate Account or the General Account, after the first 12
transfers in a Policy Year (up to a maximum of 20). We will also charge an
Administrative Fee on withdrawals equal to the lesser of 2% of the
withdrawal amount or $50.
7
<PAGE>
> CHARGES ASSESSED AGAINST THE UNDERLYING FUNDS
Following are the investment advisory and sub-investment management fees,
paid by each of the Funds as a percentage of average net assets.
Jefferson Pilot Variable Fund, Inc.
<TABLE>
<CAPTION>
World Growth Stock,
Global Hard Assets,
Small Company, S&P
Average Daily Money Value, Capital 500
Net Assets Market and Balanced Growth Index
-------------------- -------- -------------------- --------- ---------
<S> <C> <C> <C> <C>
First $200 million .50% .75% 1.00% .24%
Next $1.1 billion .45% .70% .95% .24%
Over $1.3 billion .40% .65% .90% .24%
</TABLE>
<TABLE>
<CAPTION>
Average Daily Emerging High Yield International
Net Assets Growth Bond and Growth Equity
-------------------- ---------- ----------------- --------------
<S> <C> <C> <C>
First $200 million .80% .75% 1.00%
Next $1.1 billion .75% .75% 1.00%
Over $1.3 billion .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 Fees
----------------------------------------------
Templeton Van Eck Lord
Janus World Global Abbett
Average Daily Capital Growth Hard Small
Net Assets Growth Stock Assets Company
-------------------- --------- ----------- --------- --------
<S> <C> <C> <C> <C>
First $200 million .70% .50% .50% .50%
Next $1.1 billion .65% .45% .45% .45%
Over $1.3 billion .60% .40% .40% .40%
</TABLE>
<TABLE>
<CAPTION>
Credit MFS MFS
Suisse Emerging Money
Net Assets Value Growth Market
-------------------- -------- ---------- ---------
<S> <C> <C> <C>
First $100 Million .50% .40% .30%
Next $100 million .50% .40% .30%
Next $300 million .50% .40% .25%
Over $500 million .50% .40% .25%
Over $1 billion .50% .40% .25%
</TABLE>
<TABLE>
<CAPTION>
MFS
High Janus Barclay's
Net Assets Yield Bond Balanced S&P 500 Index
------------------- ---------- -------- -------------
<S> <C> <C> <C>
First $100 Million .40% .55% .05%
Next $100 million .40% .50% .05%
Next $300 million .40% .50% .05%
Over $500 million .40% .45% .025%
Over $1 billion .40% .45% .01%
</TABLE>
<TABLE>
<CAPTION>
Lombard Odier
Strong International
Net Assets Growth Equity
------------------- -------- --------------
<S> <C> <C>
First $25 million .60% .50%
Next $75 million .50% .50%
Next $50 million .40% .50%
Over $150 million .30% .50%
</TABLE>
Templeton International Securities Fund: Class 2.
<TABLE>
<CAPTION>
Total
Other Annual
Expenses Distribution Expenses
Management (After Expense Fee (After Expense
Fee Reimbursement) (12b-1) Reimbursement)
------------ ---------------- -------------- ---------------
<S> <C> <C> <C>
.69% .19% .25% 1.13%
</TABLE>
The fund's class 2 distribution plan or "rule 12b-1 plan" is described in
the fund's prospectus. On 2/8/00, shareholders approved a merger and
reorganization that combined the fund with the Templeton International
Equity Fund, effective 5/1/00. The shareholders of that fund had approved
new management fees, which apply to the combined fund effective 5/1/00. The
table shows restated total expenses based on the new fees and the assets of
the fund as of 12/31/99, and not the assets of the combined fund. However,
if the table reflected both the new fees and the combined assets, the fund's
expenses after 5/1/00 would be estimated as: Management Fees 0.65%,
Distribution and Service Fees 0.25%, Other Expenses 0.20%, and Total Fund
Operating Expenses 1.10%.
Fidelity VIP and VIP II
<TABLE>
<CAPTION>
Total
Management Other Annual
Fidelity VIP Fee Expenses Expenses
------------ ------------ ---------- ---------
<S> <C> <C> <C>
Equity-Income .48% .08% .56%
Growth .58% .07% .65%
Fidelity VIP II
---------------
Contrafund .58% .07% .65%
</TABLE>
MFS Variable Insurance Trust
<TABLE>
<CAPTION>
Total
Management Other Annual
Fee Expenses Expenses
------------ ---------- ---------
<S> <C> <C> <C>
MFS Research Series .75% .11% .86%
MFS Utilities Series .75% .16% .91%
</TABLE>
Oppenheimer Variable Account Funds
<TABLE>
<CAPTION>
Total
Management Other Annual
Fee Expenses Expenses
------------ ---------- ---------
<S> <C> <C> <C>
Strategic Bond Fund/VA .74% .04% .78%
Bond Fund/VA .72% .01% .75%
</TABLE>
Certain of the unaffiliated Portfolio advisers reimburse us for
administrative costs incurred in connection with administering the Funds as
variable funding options under the Policy. These reimbursements are paid by
the advisers and are not charged to the Portfolios.
For further details on each Portfolio's expenses please refer to that
Portfolio's prospectus. Additional copies of each Portfolio's prospectus
and the Statement of Additional Information for each Portfolio may be
obtained free of charge by calling (800)258-3648 x7719.
8
<PAGE>
Other Charges
We reserve the right to charge the assets of each Division to provide for
any income taxes or other taxes payable by us on the assets attributable to
that Division. Although we currently make no charge, we reserve the right to
charge you an administrative fee, not to exceed $50, to cover the cost of
preparing any additional illustrations of current Accumulation and Surrender
Values and current mortality assumptions which you may request after the
Policy Date.
allocation of premiums
--------------------------------------------------------------------------------
You may allocate all or a part of your Net Premiums to the Divisions
currently available under your Policy or you may allocate all or a part of
your Net Premiums to the General Account.
> THE PORTFOLIOS
The Separate Account currently invests in shares of the Portfolios listed
below. Net Premiums applied to the Separate Account will be invested in the
Portfolios in accordance with your selection. Portfolios may be added or
withdrawn as permitted by applicable law. We reserve the right to limit the
total number of Portfolios you may elect to 17 over the lifetime of the
Policy or to increase the total number of Portfolios you may elect. Shares
of the Portfolios are not sold directly to the general public. Each of the
Portfolios is available only through the purchase of variable annuities or
variable life insurance policies (See Mixed and Shared Funding).
The investment results of the Portfolios, whose investment objectives are
described below, are likely to differ significantly. There is no assurance
that any of the Portfolios will achieve their respective investment
objectives. Investment in some of the Portfolios involves special risks,
which are described in their respective prospectuses. You should read the
prospectuses for the Portfolios and consider carefully, and on a continuing
basis, which Portfolio or combination of Portfolios is best suited to your
long-term investment objectives. Except where otherwise noted, all of the
Portfolios are diversified, as defined in the Investment Company Act of
1940.
o JPVF International Equity Portfolio seeks long-term capital appreciation
through investments in securities whose primary trading markets are
outside the United States.
o JPVF World Growth Stock Portfolio seeks to achieve long-term capital
growth through a policy of investing primarily in stocks of companies
organized in the United States or in any foreign nation. A portion of the
Portfolio may also be invested in debt obligations of companies and
governments of any nation. Any income realized will be incidental.
o JPVF Global Hard Assets Portfolio seeks long-term capital appreciation by
investing globally, primarily in "Hard Asset Securities". Hard Asset
Securities include equity and debt securities of "Hard Asset Companies",
that are directly or indirectly engaged in the exploration, development,
production or distribution of one or more of the following: precious
metals; ferrous and non-ferrous metals; oil and gas, petroleum,
petrochemicals or other hydrocarbons; forest productions; real estate; and
other basic non-agricultural commodities. Income is a secondary
consideration.
o JPVF Emerging Growth Portfolio seeks to provide long-term growth of
capital. Dividend and interest income from portfolio securities, if any,
is incidental to the Portfolio's investment objective of long-term growth.
o JPVF Capital Growth Portfolio seeks capital growth. Realization of income
is not a significant investment consideration and any income realized will
be incidental.
o JPVF Small Company Portfolio seeks to achieve growth of capital. The
Portfolio pursues its objective by investing primarily in a diversified
portfolio of equity securities issued by small companies, which are
defined as companies with market capitalization equal to or less than the
largest company in the Russell 2000[TM] Index.
o JPVF Growth Portfolio seeks capital growth by investing primarily in
equity securities that the Sub-Investment Manager believes have above-
average growth prospects.
o JPVF S&P 500 Index 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.
9
<PAGE>
o JPVF Value Portfolio (formerly JPVF Growth and Income Portfolio) seeks
long-term growth of capital by investing primarily in a wide range of
equity issues that may offer capital appreciation and, secondarily, seeks
a reasonable level of current income.
o JPVF Balanced Portfolio seeks reasonable current income and long-term
capital growth, consistent with conservation of capital, by investing
primarily in common stocks and fixed income securities.
o JPVF High Yield Bond Portfolio seeks a high level of current income by
investing primarily in corporate obligations with emphasis on higher
yielding, higher risk, lower-rated or unrated securities. These securities
may be considered speculative and involve greater risks, including risk of
default, than higher rated securities.
o JPVF Money Market Portfolio seeks to achieve as high a level of current
income as is consistent with preservation of capital and liquidity. An
investment in the Money Market Portfolio is neither insured nor guaranteed
by the U.S. Government.
o Fidelity Variable Insurance Products Fund-- Growth Portfolio seeks capital
appreciation by investing primarily in common stocks.
o Fidelity Variable Insurance Products Fund-- Equity-Income Portfolio seeks
reasonable income by investing primarily in income-producing equity
securities. In choosing these securities, the Fund will also consider the
potential for capital appreciation.
o Fidelity Variable Insurance Products Fund II--Contrafund Portfolio seeks
maximum total return over the long term by investing its assets mainly in
equity securities of companies that are undervalued or out-of-favor.
o MFS Variable Insurance Trust--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.
o MFS Variable Insurance Trust--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.
o Oppenheimer Variable Account Funds-- Strategic Bond Fund/VA 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. The Portfolio intends to invest principally
in: (i) foreign government and corporate debt securities, (ii) U.S.
Government securities, and (iii) lower-rated high yield domestic debt
securities, commonly known as "junk bonds", which are subject to a greater
risk of loss of principal and nonpayment of interest than higher-rated
securities. These securities may be considered to be speculative.
o Oppenheimer Variable Account Funds-- Bond Fund/VA 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 Standard
& Poor's. Secondarily, this Portfolio seeks capital growth when consistent
with its primary objective.
o Franklin Templeton Variable Insurance Products Trust--Templeton
International Securities Fund seeks long-term capital growth. The fund
will invest in equity securities of companies located outside the U.S.,
including those in emerging markets.
Some of the above Portfolios may use instruments known as derivatives as
part of their investment strategies, as described in their respective
prospectuses. The use of certain derivatives such as inverse floaters and
principal on debt instruments may involve higher risk of volatility to a
Portfolio. The use of leverage in connection with derivatives can also
increase risk of losses. See the prospectus for the Portfolio for a
discussion of the risks associated with an investment in those Portfolios.
You should refer to the accompanying prospectuses of the Portfolios for more
complete information about their investment policies and restrictions.
> INVESTMENT ADVISERS FOR EACH OF THE FUNDS
Jefferson Pilot Variable Fund, Inc. ("JPVF") The investment manager to JPVF
is Jefferson Pilot Investment Advisory Corporation ("JP Investment
10
<PAGE>
Advisory"), an affiliate of the Company. JP Investment Advisory and JPVF
have contracted with nine unaffiliated companies to act as sub-investment
advisers to the Funds. They are:
o JPVF International Equity Portfolio: Lombard Odier International Portfolio
Management Limited ("Lombard Odier")
o JPVF World Growth Stock Portfolio: Templeton Investment Council, Inc.
("TICI")
o JPVF Global Hard Assets Portfolio: Van Eck Associates Corporation ("Van
Eck")
o JPVF Emerging Growth Portfolio: Massachusetts Financial Services Company
("MFS")
o JPVF Capital Growth Portfolio: Janus Capital Corporation ("Janus")
o JPVF Small Company Portfolio: Lord, Abbett & Co. ("Lord Abbett")
o JPVF Growth Portfolio: Strong Capital Management, Inc. ("Strong")
o JPVF S&P 500 Index Portfolio: Barclays Global Fund Advisors ("Barclays")
o JPVF Value Portfolio: Credit Suisse Asset Management, LLC ("Credit
Suisse")
o JPVF Balanced Portfolio: Janus
o JPVF High Yield Bond: MFS
o JPVF Money Market Portfolio: MFS
Fidelity Variable Insurance Products Fund--Fidelity Management and Research
Company ("FMR")
Fidelity Variable Insurance Products Fund II--FMR
MFS Variable Insurance Trust--Massachusetts Financial Services Company
("MFS")
Oppenheimer Variable Account Funds-- OppenheimerFunds, Inc. ("Oppenheimer")
Franklin Templeton Variable Insurance Products Trust--Templeton Investment
Counsel, Inc. ("TICI")
> MIXED AND SHARED FUNDING; CONFLICTS OF INTEREST
Shares of the Funds are available to insurance company separate accounts
which fund variable annuity contracts and variable life insurance policies,
including the Policy described in this Prospectus. Because Fund shares are
offered to separate accounts of both affiliated and unaffiliated insurance
companies, it is conceivable that, in the future, it may not be advantageous
for variable life insurance separate accounts and variable annuity separate
accounts to invest in these Funds simultaneously, since the interests of
such Policyowners or contractholders may differ. Although neither the
Company nor the Funds currently foresees any such disadvantages either to
variable life insurance or to variable annuity Policyowners, each Fund's
Board of Trustees/Directors has agreed to monitor events in order to
identify any material irreconcilable conflicts which may possibly arise and
to determine what action, if any, should be taken in response thereto. If
such a conflict were to occur, one of the separate accounts might withdraw
its investment in a Fund. This might force that Fund to sell portfolio
securities at disadvantageous prices.
> FUND ADDITIONS, DELETIONS OR SUBSTITUTIONS
We reserve the right, subject to compliance with appropriate state and
federal laws, to add, delete or substitute shares of another Portfolio or
Fund for Portfolio shares already purchased or to be purchased in the future
for the Division in connection with the Policy. We may substitute shares of
one Portfolio for shares of another Portfolio if, among other things, (a) it
is determined that a Portfolio no longer suits the purpose of the Policy due
to a change in its investment objectives or restrictions; (b) the shares of
a Portfolio are no longer available for investment; or (c) in our view, it
has become inappropriate to continue investing in the shares of the
Portfolio. Substitution may be made with respect to both existing
investments and the investment of any future premium payments. However, no
substitution, addition or deletion of securities will be made without prior
notice to Policyowners, and without such prior approval of the SEC or other
regulatory authorities as may be necessary, all to the extent required and
permitted by the Investment Company Act of 1940 or other applicable law.
We also reserve the right to make the following changes in the operation of
the Separate Account and the Divisions;
(a) to operate the Separate Account in any form permitted by law;
(b) to take any action necessary to comply with applicable law or obtain and
continue any exemption from applicable laws;
(c) to transfer assets from one Division to another, or from any Division to
our general account;
11
<PAGE>
(d) to add, combine, or remove Divisions in the Separate Account;
(e) to assess a charge for taxes attributable to the operation of the
Separate Account or for other taxes, described in "Charges and Fees--Other
Charges" on page 10 above; and
(f) to change the way we assess other charges, as long as the total other
charges do not exceed the amount currently charged the Separate Account and
the Portfolios in connection with the Policies.
Portfolio shares are subject to certain investment restrictions which may
not be changed without the approval of the majority of the Portfolio's
shareholders. See accompanying Prospectuses for the Portfolios.
> GENERAL ACCOUNT
Interests in the General Account have not been registered with the SEC in
reliance upon exemptions under the Securities Act of 1933, as amended and
the General Account has not been registered as an investment company under
the 1940 Act. However, disclosure in this Prospectus regarding the General
Account may be subject to certain generally applicable provisions of the
federal securities laws relating to the accuracy and completeness of the
statements. Disclosure in this Prospectus relating to the Fixed Account has
not been reviewed by the SEC.
The General Account is a fixed funding option available under the Policy. We
guarantee a minimum interest rate of 4.0% on amounts in the General Account
and assume the risk of investment gain or loss. The investment gain or loss
of the Separate Account or any of the Portfolios does not affect the General
Account Value.
The General Account is secured by our general assets. Our general assets
include all assets other than those held in separate accounts sponsored by
us or our affiliates. We will invest the assets of the General Account in
those assets we chose, as allowed by applicable law. We will allocate
investment income of such General Account assets between ourself and those
policies participating in the General Account.
We guarantee that, at any time, the General Account Value of your Policy
will not be less than the amount of the Net Premiums allocated to the
General Account, plus any monthly accumulation value adjustment, plus
interest at an annual rate of not less than 4.0%, less the amount of any
Withdrawals, Policy Loans or Monthly Deductions, plus interest at an annual
rate of not less than 4.0%.
If you do not accept the Policy issued as applied for or you exercise your
"free look" option, no interest will be credited and we will retain any
interest earned on the initial Net Premium.
policy choices
----------------------------------------------------------------------------
> GENERAL
The Policy is designed to provide the Insured with lifetime insurance
protection and to provide you with flexibility in amount and frequency of
premium payments and level of life insurance proceeds payable under the
Policy. It provides life insurance coverage on the Insured with a Death
Benefit payable on the Insured's Death. You are not required to pay
scheduled premiums to keep the Policy in force and you may, subject to
certain limitations, vary the frequency and amount of premium payments.
To purchase a Policy, you must complete an application and submit it to us
through the agent selling the Policy. The Policy is issued on a guaranteed
or simplified issue basis. The Insured must be no younger than age 15 and no
older than age 70. Smoking status is reflected in the current cost of
insurance rates. Policies issued in certain States will not directly reflect
the Insured's sex in either the premium rates or the charges or values under
the Policy. We may reject an application for any reason.
The minimum Specified Amount at issue is $25,000. We reserve the right to
revise our rules to specify different minimum Specified Amounts at issue. We
may reinsure all or a portion of the Policy.
> DETAILED INFORMATION ABOUT THE POLICY
This prospectus describes the standard Ensemble Exec flexible premium
variable universal life insurance policy. There may be variations in your
policy because of specific state requirements in the
12
<PAGE>
state where your Policy is issued. We will describe any such variations in
your Policy or in Supplements to this Prospectus, as appropriate.
> PREMIUM PAYMENTS
The Policy is a flexible premium life insurance policy. This means that you
may decide when to make premium payments and in what amounts. You must pay
your premiums to us at our home office or through one of our authorized
agents for forwarding to us. There is no fixed schedule of premium payment
on the Policy either as to amount or frequency. You may determine, within
certain limits, your own premium payment schedule. We will not bill premium
payments for less than $250 ($50 for electronic fund transfers).
We may require evidence of insurability if payment of a premium will result
in an immediate increase in the difference between the Death Benefit and the
Accumulation Value.
In order to help you obtain the insurance benefits you desire, we will state
a Planned Periodic Premium and Premium Frequency in the Policy. This premium
will generally be based on your insurance needs and financial abilities, the
Specified Amount of the Policy and the Insured's age, sex and risk class.
You are not required to pay Planned Periodic Premiums. If you do not pay a
Planned Periodic Premium, your Policy will not lapse, so long as the
Policy's Net Accumulation Value is sufficient to pay the Monthly Deduction.
Payment of the Planned Periodic Premiums will not guarantee that your Policy
will remain in force. (See "Grace Period")
> MODIFIED ENDOWMENT CONTRACT
The Policy will be allowed to become a Modified Endowment contract under the
Internal Revenue Code only with your consent. Otherwise, if at any time the
premiums paid under the Policy exceed the limit for avoiding modified
endowment contract status, we will refund the excess premium to you with
interest within 60 days after the end of the Policy Year in which the
premium was received. If, for any reason, we do not refund the excess
premium within that 60-day period, we will hold the excess premium in a
separate deposit fund and credit it with interest until refunded to you. The
interest rate used on any refund, or credited to the separate deposit fund
created by this provision, will be the excess premium's pro rata rate of
return on the contract until the date we notify you that the excess premium
and the earnings on such excess premium have been removed from the Policy.
After the date of such notice, the interest rate paid on the separate
deposit fund will be such rate as we may declare from time to time on
advance premium deposit funds. We may also notify you of other options
available to you to keep the Policy in compliance.
> COMPLIANCE WITH THE INTERNAL REVENUE CODE
The Policy is intended to qualify as life insurance under the Internal
Revenue Code. The Death Benefit provided by the Policy is intended to
qualify for the federal income tax exclusion. If at any time the premium
paid under the Policy exceeds the amount allowable for such qualification,
we will refund the excess premium to you with interest within 60 days after
the end of the Policy Year in which it was received. If, for any reason, we
do not refund the excess premium within the 60-day period, such amount will
be held in a separate deposit fund and will be credited with interest until
refunded to you. The interest rate used on any refund, or credited to the
separate deposit fund created by this provision, will be the excess
premium's pro rata rate of return on the contract until the date we notify
you that the excess premium and the earnings on such excess premium have
been removed from the Policy. After the date of such notice, the interest
rate paid on the separate deposit fund will be such rate as we may declare
from time to time on advance premium deposit funds.
We also reserve the right to refuse to make any change in the Specified
Amount or the Death Benefit Option or any other change if such change would
cause the policy to fail to qualify as life insurance under the Code.
Backdating
Under limited circumstances, we may backdate a Policy, upon request, by
assigning a Policy Date earlier than the date the application is signed but
no earlier than six months prior to state approval of the Policy. Backdating
may be desirable so that you can purchase a particular Policy Specified
Amount for lower Cost of Insurance Rate based on a younger insurance age.
For a backdated Policy, we will assess policy fees and charges from the
Policy Date. Backdating of your Policy will not affect the date on which
your premium payments are credited to the Separate Account.
13
<PAGE>
Allocation of Premiums
We will allocate premium payments, net of the premium tax charge, Federal
DAC tax charge and Premium Load, plus interest earned prior to the
Allocation Date, among the General Account and the divisions of the Separate
Account in accordance with your directions to us. The minimum percentage of
any net premium payment allocated to any division or the General Account is
5% and allocation percentages must be in whole numbers only. Your initial
premium (including any interest) will be allocated, as you instructed, on
the Allocation Date. Your subsequent premiums will be allocated as of the
date they are received in our Service Office. Prior to the Allocation Date,
the initial net premium, and any other premiums received, will be allocated
to the General Account. (See "Right of Policy Examination")
You may change your premium allocation instructions at any time. Your
request may be written or by telephone, so long as the proper telephone
authorization is on file with us. Allocations must be changed in whole
percentages. The change will be effective as of the date of the next premium
payment after you notify us. We will send you confirmation of the change.
(See "Transfers and Allocations to Funding Options")
You will be advised at least annually as to the number of Units which remain
credited to the Policy, the current Unit Values, the Separate Account Value,
the General Account Value, and the Accumulation Value.
> DEATH BENEFIT OPTIONS
At the time of purchase, you must choose between the available Death Benefit
Options. The amount payable upon the Death of the Insured depends upon which
Death Benefit Option you choose.
Option 1: The Death Benefit will be the greater of the current Specified
Amount or the Accumulation Value on the Death of the Insured multiplied by
the corridor percentage, as described below.
Option 2: The Death Benefit equals the greater of the current Specified
Amount plus the Accumulation Value on the Death of the Insured or the
Accumulation Value on the date of death multiplied by the corridor
percentage, as described below.
Option 3: The Death Benefit equals the current specified amount plus the
total premiums paid less any withdrawals to the date of death. If the total
of the withdrawals exceeds the premiums paid then the Death Benefit will be
less than the Specified Amount.
The corridor percentage is used to determine a minimum ratio of Death
Benefit to Accumulation Value. This is required to qualify the Policy as
life insurance under the federal tax laws.
Death Benefit Qualification Test
You will also choose between the two Death Benefit qualification tests, the
cash value accumulation test and the guideline premium test. Once you have
made your choice, the Death Benefit qualification test cannot be changed.
The guideline premium test limits the amount of premium payable for an
Insured of a particular age and sex. It also applies a prescribed corridor
percentage to determine a minimum ratio of Death Benefit to Accumulation
Value.
Following are the Corridor Percentages under the Guideline Premium Test:
Corridor Percentages
(Attained Age of the Insured at the
Beginning of the Contract Year)
<TABLE>
<CAPTION>
Age % Age % Age % Age %
------ ------ ----- ------ ----- ------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94+ 101
</TABLE>
The cash value accumulation test requires that the Death Benefit be
sufficient to prevent the Accumulation Value, as defined in Section 7702 of
the Code, from ever exceeding the net single premium required to fund the
future benefits under the Policy. If the Accumulation Value is ever greater
than the net single premium at the Insured's age and sex for the proposed
Death Benefit, the Death Benefit will be automatically increased by
multiplying the Accumulation Value by a corridor percentage that is defined
as $1000 divided by the net single premium.
The tests differ as follows:
(1) the guideline premium test limits the amount of premium that you can pay
into your Policy; the cash value accumulation test does not.
(2) the factors that determine the minimum Death Benefit relative to the
Policy's Accumulation Value are different. Required increases in the
14
<PAGE>
minimum Death Benefit due to growth in Accumulation Value will generally
be greater under the cash value accumulation test.
(3) If you wish to pay premiums in excess of the guideline premium test
limitation, you should elect the cash value accumulation test. If you do
not wish to pay premiums in excess of the guideline premium test
limitations, you should consider the guideline premium test.
You should consult with a qualified tax adviser before choosing the Death
Benefit Qualification Test.
The following example demonstrates the Death Benefits under Options 1, 2 and
3 for the cash value accumulation test and the guideline premium test. The
example shows an Ensemble III Policy issued to a male, non-smoker, Age 45,
at the time of calculation of the Death Benefit. The Policy is in its 10th
Policy Year and there is no outstanding Policy Debt.
<TABLE>
<CAPTION>
Cash Value Guideline
Accumulation Premium
Test Test
-------------- ----------
<S> <C> <C>
Specified Amount .................... 100,000 100,000
Accumulation Value .................. 52,500 52,500
Corridor Percentage ................. 294% 215%
Total Premiums less Withdrawals..... 15,000 15,000
Death Benefit Option 1 .............. 154,088 112,875
Death Benefit Option 2 .............. 154,088 152,500
Death Benefit Option 3 .............. 154,088 115,000
</TABLE>
Under any of the Death Benefit Options, the Death Benefit will be reduced by
a Withdrawal. (See "Withdrawals") The Death Benefit payable under any of the
Options will also be reduced by the amount necessary to repay the Policy
Debt in full and, if the Policy is within the Grace Period, any payment
required to keep the Policy in force.
The Death Benefit will be set at 101% of the Cash Value on the Policy
Anniversary Date nearest the Insured's Attained Age 100.
After we issue the Policy, you may, subject to certain restrictions, change
the Death Benefit selection by sending us a request in writing. If you
change the Death Benefit Option from Option 2 to Option 1, the Specified
Amount will be increased by the Policy's Accumulation Value on the effective
date of the change. If you change the Death Benefit option from Option 1 to
Option 2, the Specified Amount will be decreased by the Policy's
Accumulation Value on the effective date of the change. If you change the
Death Benefit Option from Option 3 to Option 2, the Specified Amount will be
increased by the Premiums paid to the date of the change less any
withdrawals and then will be decreased by the Accumulation Value in the date
of the change. If you change the Death Benefit from Option 3 to Option 1,
the Specified Amount will be increased by the Premiums paid less any
withdrawals, to the date of the change. You may not change from Options 1 or
2 to Option 3. If a change would result in an immediate change in the Death
Benefit, such change will be subject to evidence of insurability.
> TRANSFERS AND ALLOCATIONS TO FUNDING OPTIONS
You may transfer all or part of the Accumulation Value to any other Division
or to the General Account at any time. Funds may be transferred between the
Divisions or from the Divisions to the General Account. We currently permit
12 transfers per year without imposing any transfer charge. For transfers
over 12 in any Policy Year, we will impose a transfer charge of $50, which
we will deduct on a pro rata basis from the Division or Divisions or the
General Account into which the amount is transferred, unless you specify
otherwise. We will not impose a Transfer Charge on the transfer of any Net
Premium payments received prior to the Allocation Date, plus interest
earned, from the General Account to the Divisions on the Allocation Date, or
on loan repayments. We will not impose a Transfer Charge for transfers under
the Dollar Cost Averaging or Portfolio Rebalancing features. You may
currently make up to 20 transfers per Policy Year. Transfers of any Net
Premium payments received prior to the Allocation Date from the General
Account to the Divisions on the Allocation Date, loan repayments, transfers
in connection with Dollar Cost Averaging and transfers in connection with
Portfolio Rebalancing will not count against the 20 transfers. We reserve
the right to modify transfer privileges and charges.
You may at any time transfer 100% of the Policy's Accumulation Value to the
General Account and choose to have all future premium payments allocated to
the General Account. After you do this, 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, Attained
Age and rating class of the Insured at the time of transfer. The minimum
period will decrease if you choose to surrender the Policy or make a
withdrawal. The minimum period will increase if you choose to decrease the
Specified Amount, make additional premium payments, or we credit a higher
interest rate or charge a lower cost of insurance rate than those guaranteed
for the General Account.
Except for transfers in connection with Dollar Cost Averaging, Automatic
Portfolio Rebalancing and loan
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repayments, we allow transfers out of the General Account to the Divisions
only once in every 180 days and limit their amount to the lesser of (a) 25%
of the Accumulation Value in the General Account not being held as loan
collateral, or (b) $100,000. Any other transfer rules, including minimum
transfer amounts, also apply. We reserve the right to modify these
restrictions.
We will not impose a transfer charge for a transfer of all Accumulation
Value in the Separate Account to the General Account. A transfer from the
General Account to the Divisions of the Separate Account 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 any Net Premium payments received prior
to the Allocation Date, plus interest earned, from the General Account and
loan repayments.
We reserve the right to refuse or restrict transfers made by third-party
agents on behalf of Policyowner or pursuant to market timing services when
we determine that such transfers will be detrimental to the Portfolios,
Policyowner the Separate Account or you.
> TELEPHONE TRANSFERS, LOANS AND REALLOCATIONS
You, your authorized representative, or a member of his/her administrative
staff may request a transfer of Accumulation Value or reallocation of
premiums (including allocation changes relating to existing Dollar Cost
Averaging and Automatic Portfolio Rebalancing programs) either in writing or
by telephone. In order to make telephone transfers, you must complete a
written telephone transfer authorization form and return it to us at our
Home Office. All transfers must be in accordance with the terms of the
Policy. If the transfer instructions are not in good order, we will not
execute the transfer and you will be notified.
We may also permit loans to be made by telephone, provided that your
authorization form is on file with us. Only you may request loans by
telephone.
We will use reasonable procedures, such as requiring identifying information
from callers, recording telephone instructions, and providing written
confirmation of transactions, in order to confirm that telephone
instructions are genuine. Any telephone instructions which we reasonably
believe to be genuine will be your responsibility, including losses arising
from any errors in the communication of instructions. As a result of this
procedure, you will bear the risk of loss. If we do not use reasonable
procedures, as described above, we may be liable for losses due to
unauthorized instructions.
> AUTOMATED TRANSFERS (DOLLAR COST AVERAGING AND PORTFOLIO REBALANCING)
Dollar Cost Averaging describes a system of investing a uniform sum of money
at regular intervals over an extended period of time. Dollar Cost Averaging
is based on the economic fact that buying a security with a constant sum of
money at fixed intervals generally results in acquiring more of the item
when prices are low and less of it when prices are high.
You may establish automated transfers of a specific dollar amount (the
"Periodic Transfer Amount") on a monthly, quarterly or semi-annual basis
from the Money Market Division or the General Account to any other Portfolio
or to the General Account. You must have a minimum of $3,000 allocated to
either the Money Market Division or the General Account in order to enroll
in the Dollar Cost Averaging program. The minimum Periodic Transfer Amount
is $250. A minimum of 5% of the Periodic Transfer Amount must be transferred
to any specified Division. There is no additional charge for the program.
You may start or stop participation in the Dollar Cost Averaging program at
any time, but you must give us at least 30 days' notice to change any
automated transfer instructions that are currently in place. We reserve the
right to suspend or modify automated transfer privileges at any time.
You may elect an Automatic Portfolio Rebalancing feature which provides a
method for reestablishing fixed proportions between various types of
investments on a systematic basis. Under this feature, we will automatically
readjust the allocation between the Divisions and the General Account to the
desired allocation, subject to a minimum of 5% per Division or General
Account, on a quarterly, semi-annual or annual basis. There is no additional
charge for the program.
You may not elect Dollar Cost Averaging and Automatic Portfolio Rebalancing
at the same time. We will make transfers and adjustments pursuant to these
features on the Policy's Monthly Anniversary Date in the month when the
transaction is to take place, or the next succeeding business day if the
Monthly Anniversary Date falls on a holiday or weekend. We must have an
authorization form on file before either feature may begin. Transfers under
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these features are not subject to the transfer fee and do not count toward
the 12 free transfers or the 20 transfer maximum currently allowed per year.
Before participating in the Dollar Cost Averaging or Automatic Portfolio
Rebalancing programs, you should consider the risks involved in switching
between investments available under the Policy. Dollar Cost Averaging
requires regular investments regardless of fluctuating price levels, and
does not guarantee profits or prevent losses. Automatic Portfolio
Rebalancing is consistent with maintaining your allocation of investments
among market segments, although it is accomplished by reducing your
Accumulation Value allocated to the better performing segments. Therefore,
you should carefully consider market conditions and each Portfolio's
investment policies and related risks before electing to participate in the
Dollar Cost Averaging or Automatic Portfolio Rebalancing programs.
policy values
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> ACCUMULATION VALUE
The Accumulation Value of Your Policy is determined on a daily basis.
Accumulation Value is the sum of the values in the Divisions plus the value
in the General Account. We calculate Your Policy's Accumulation Value in the
Divisions by units and unit values under the Policies. Your Policy's
Accumulation Value will reflect the investment experience of the Divisions
investing in the Portfolios, any additional net premiums paid, any
withdrawals, any policy loans, and any charges assessed in connection with
the Policy. We do not guarantee Accumulation Values in the Separate Account
as to dollar amount.
On the Allocation Date, the Accumulation Value in the Separate Account (the
"Separate Account Value") equals the initial premium payments, less the
premium load and the State Premium Tax and Federal DAC Tax Charges, plus
interest earned prior to the Allocation Date, and less the Monthly Deduction
for the first policy month. We will establish the initial number of units
credited to the Separate Account for Your Policy on the Allocation Date. At
the end of each Valuation Period thereafter, the Accumulation Value in a
Division is
(i) the Accumulation Value in the Division on the preceding Valuation Date
multiplied by the net investment factor, described below, for the current
Valuation Period, plus
(ii) any Net Premium we receive during the current Valuation Period which is
allocated to the Division, plus
(iii) all Accumulation Value transferred to the Division from another
Division or the General Account during the current Valuation Period, minus
(iv) the Accumulation Value transferred from the Division to another
Division or the General Account and Accumulation Value transferred to secure
a Policy Debt during the current Valuation Period, minus
(v) all withdrawals from the Division during the current Valuation Period.
Whenever a Valuation Period includes the Monthly Anniversary Date, the
Separate Account Value at the end of such period is reduced by the portion
of the monthly deduction and increased by any Accumulation Value Adjustment
allocated to the Divisions.
We will calculate a guaranteed monthly Accumulation Value Adjustment at the
beginning of the second Policy Year and every Policy Year thereafter. The
adjustment will be allocated among the General Account and the Divisions in
the same proportion as premium payments. The adjustment is calculated as (i)
multiplied by the total of (ii) plus (iii) minus (iv), but not less than
zero, where:
(i) is the lesser of .0333% and the excess of the monthly mortality and
expense risk charge currently assessed over .01666% in Policy Years 2
through 25 and the lesser of .02083% and the excess of the monthly mortality
and expense risk charge currently assessed over .008333% in Policy Years 26
and thereafter;
(ii) is the amount allocated to the Divisions at the beginning of the Policy
Year;
(iii) is the 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
Code, adjusted for any increases in Specified Amount.
See "Policy Loans" for a description of Type B loans.
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> UNIT VALUES
We credit Units to you upon allocation of Net Premiums to a Division. Each
Net Premium payment you allocate to a Division will increase the number of
units in that Division. We credit both full and fractional units. We
determine the number of units and fractional units by dividing the Net
Premium payment by the unit value of the Division to which you have
allocated the payment. We determine each Division's unit value on each
Valuation Date. The number of units credited to your Policy will not change
because of subsequent changes in unit value. The number is increased by
subsequent contributions or transfers allocated to a Division, and decreased
by charges and withdrawals from that Division. The dollar value of each
Division's units will vary depending on the investment performance of the
corresponding Portfolio, as well as any expenses charged directly to the
Separate Account.
The initial Unit Value of each Division's units was $10.00. Thereafter, the
Unit Value of a Division on any Valuation Date is calculated by multiplying
the Division's Unit Value on the previous Valuation Date by the Net
Investment Factor for the Valuation Period then ended.
> NET INVESTMENT FACTOR
The Net Investment Factor measures each Division's investment experience and
is used to determine changes in Unit Value from one Valuation Period to the
next. We calculate the Net Investment Factor by dividing (1) by (2) and
subtracting (3) from the result, where:
(1) is the sum of:
(a) the Net Asset Value of a Fund share held in the Separate Account for
that Division determined at the end of the current Valuation Period;
plus
(b) the per share amount of any dividend or capital gain distributions
made for shares held in the Separate Account for that Division if the
ex-dividend date occurs during the Valuation Period;
(2) is the Net Asset Value of a Fund share held in the Separate Account for
that Division determined as of the end of the preceding Valuation
Period; and
(3) is the daily charge representing the Mortality & Expense Risk Charge.
This charge is equal, on an annual basis, to a percentage of the average
daily Net Asset Value of Fund shares held in the Separate Account for
that Division.
Because the Net Investment Factor may be greater than, less than or equal to
1, values in a Division may increase or decrease from Valuation Period to
Valuation Period.
> GENERAL ACCOUNT VALUE
The General Account Value reflects amounts allocated to the General Account
through payment of premiums or transfers from the Separate Account, plus
interest credited to those amounts. Amounts allocated to the General
Account, and interest thereon, are guaranteed; however there is no assurance
that the Separate Account Value of the Policy will equal or exceed the Net
Premiums paid and allocated to the Separate Account.
> SURRENDER VALUE
The Surrender Value of the Policy is the amount you can receive in cash by
surrendering the Policy. The Surrender Value will equal (a) the Net
Accumulation Value on the date of surrender; plus (b) a Refund of Sales
Charges if the surrender takes place in the first two Policy Years.
policy rights
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> SURRENDERS
By Written Request, you may surrender the Policy for its Surrender Value at
any time while the Insured is alive. All insurance coverage under the Policy
will end on the date of the Surrender. All or part of the Surrender Value
may be applied to one or more of the Settlement Options described in this
Prospectus or in any manner to which we agree and that we make available.
(See Right to Defer Payment, Policy Settlement and Payment of Benefits)
> WITHDRAWALS
By Written Request, you may, at any time after the expiration of the Free
Look Period, make withdrawals from the Policy. A charge equal to the lesser
of $50 or 2% of the Withdrawal will be deducted from the amount of the
Accumulation Value which you withdraw.
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The minimum amount of any withdrawal after the charge is applied is $500.
The amount you withdraw cannot exceed the Net Accumulation Value.
Withdrawals will generally affect the Policy's Accumulation Value and the
life insurance proceeds payable under the Policy as follows.
o The Policy's Accumulation Value will be reduced by the amount of the
withdrawal plus the $50 charge;
o The Death Benefit will be reduced by an amount equal to the reduction in
Accumulation Value.
If the Death Benefit Option for the Policy is Option 1, a withdrawal will
reduce the Specified Amount. However, we will not allow a withdrawal if the
Specified Amount will be reduced below $50,000.
If the Death Benefit Option for the Policy is Option 2, a withdrawal will
reduce the Accumulation Value, usually resulting in a dollar-for-dollar
reduction in the Death Benefit.
If the Death Benefit Option for the Policy is Option 3, a Withdrawal will
result in a dollar-for-dollar reduction in the Death Benefit.
You may allocate a withdrawal among the Divisions and the General Account.
If you do not make such an allocation, we will allocate the withdrawal among
the Divisions and the General Account in the same proportion that the
Accumulation Value in each Division and the General Account Value, less any
Policy Debt, bears to the total Accumulation Value of the Policy, less any
Policy Debt. (See Right to Defer Payment, Policy Changes and Payment of
Benefits)
> GRACE PERIOD
Generally, on any Monthly Anniversary Date, if your Policy's Net
Accumulation Value is insufficient to satisfy the Monthly Deduction, we will
allow you 61 days of grace for payment of an amount sufficient to continue
coverage. We call this "lapse pending status".
Written notice will be mailed to your last known address, according to Our
records, not less than 61 days before termination of the Policy. This notice
will also be mailed to the last known address of any assignee of record.
The Policy will stay in force during the Grace Period. If the Insured dies
during the Grace Period, we will reduce the Death Benefit by the amount of
any Monthly Deduction due and the amount of any outstanding Policy Debt.
If payment is not made within 61 days after the Monthly Anniversary Day, the
Policy will terminate without value at the end of the Grace Period.
> REINSTATEMENT OF A LAPSED OR TERMINATED POLICY
If the Policy terminates as provided in its Grace Period provision, you may
reinstate it. To reinstate the Policy, the following conditions must be met:
o The Policy has not been fully surrendered.
o You must apply for reinstatement within 5 years after the date of
termination and before the Insured's Attained Age 100.
o We must receive evidence of insurability satisfactory to us.
o We must receive a premium payment sufficient to keep the Policy in force
for the current month plus two additional months.
o If a loan was outstanding at the time of lapse, we will require that
either you repay or reinstate the loan.
o Supplemental Benefits will be reinstated only with our consent. (See
Grace Period and Premium Payments)
> COVERAGE BEYOND INSURED'S ATTAINED AGE 100
At the Insured's Attained Age 100, we will make several changes to your
Policy. At that point and thereafter, the Specified Amount will equal the
current Accumulation Value. The Death Benefit will be set to Option 1 and
will equal 101% of the Specified Amount less Policy Debt. We will no longer
deduct any Cost of Insurance charges or monthly Administrative Charges, the
Monthly Accumulation Value Adjustment will cease and no new premiums will be
accepted.
> RIGHT TO DEFER PAYMENT
Payments of any Separate Account Value will be made within 7 days after our
receipt of your Written Request. However, we reserve the right to suspend or
postpone the date of any payment of any benefit or values for any Valuation
Period (1) when the New York Stock Exchange is closed (except holidays or
weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably
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practicable or it is not reasonably practicable to determine the value of
the Funds' net assets; or (4) during any other period when the SEC, by
order, so permits for the protection of security holders. For payment from
the Separate Account in such instances, we may defer payment of Full
Surrender and Withdrawal Values, any Death Benefit in excess of the current
Specified Amount, transfers and any portion of the Loan Value.
Payment of any General Account Value may be deferred for up to six months,
except when used to pay amounts due us.
> POLICY LOANS
We will grant loans at any time after the expiration of the Right of Policy
Examination. The amount of the loan will not be more than the Loan Value.
Unless otherwise required by state law, the Loan Value for this Policy is
100% of Net Accumulation Value at the end of the Valuation Period during
which the loan request is received.
We will usually disburse loan proceeds within seven days from the Date of
Receipt of a loan request, although we reserve the right to postpone
payments under certain circumstances. See "OTHER MATTERS--Postponement of
Payments". We may, in our sole discretion, allow you to make loans by
telephone if you have filed a proper telephone authorization form with us.
So long as your Policy is in force and the Insured is living, you may repay
your loan in whole or in part at any time without penalty.
Accumulation Value equal to the loan amount will be maintained in the
General Account to secure the loan. You may allocate a policy loan among the
Divisions of the Separate Account and the existing General Account value
that is not already allocated to secure a Policy Loan, and we will transfer
Separate Account Value as you have indicated. If you do not make this
allocation, the loan will be allocated among the Divisions and the General
Account in the same proportion that the Accumulation Value in each Division
and the Accumulation Value in the General Account less Policy Debt bears to
the total Accumulation Value of the Policy, less Policy Debt, on the date of
the loan. We will make a similar allocation for unpaid loan interest due. A
policy loan removes Accumulation Value from the investment experience of the
Separate Account, which will have a permanent effect on the Accumulation
Value and Death Benefit even if the loan is repaid. General Account Value
equal to Policy Debt will accrue interest daily at an annual rate of 4%.
We will charge interest on any outstanding Policy Debt with the interest
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
the Accumulation Value held in the General Account to secure loans, which is
an effective annual rate of 4%. The amount available at any time for a Type
A loan is the maximum loan amount, less the Guideline Single Premium at
issue, adjusted on a pro rata basis for increases in Specified Amount, 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 an effective annual interest rate
of 5%. One loan request can result in both a Type A and a Type B loan. A
loan request will first be granted as a Type A loan, to the extent
available, and then as a Type B loan. All loans become Type A loans at
attained age 100. Otherwise, once a loan is granted, it remains a Type A or
Type B loan until it is repaid. Interest is due and payable at the end of
each Policy Year and any unpaid interest due becomes loan principal.
If Policy Debt exceeds Accumulation Value, we will notify you and any
assignee of record. You must make a payment within 61 days from the date
Policy Debt exceeds Accumulation Value or the Policy will lapse and
terminate without value (See "Grace Period"). If this happens, you may be
taxed on the total appreciation under the Policy. However, you may reinstate
the Policy, subject to proof of insurability and payment of a reinstatement
premium. See "Reinstatement of a Lapsed Policy".
You may repay the Policy Debt, in whole or in part, at any time during the
Insured's life, so long as the Policy is in force. The amount necessary to
repay all Policy Debt in full will include any accrued interest. If there is
any Policy Debt, we will apply payments received from you as follows: we
will apply payments as premium in the amount of the Planned Periodic
Premium, received at the Premium Frequency, unless you specifically
designate the payment as a loan repayment. We will apply payments in excess
of the Planned Periodic Premium or payments received other than at the
Premium Frequency, first as policy loan repayments, then as premium when you
have repaid the Policy Debt.
If you have both a Type A and a Type B loan, we will apply repayments first
to the Type B loan and
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then to the Type A loan. Upon repayment of all or part of the Policy Debt,
we will transfer the Policy's Accumulation Value securing the repaid portion
of the debt in the General Account to the Divisions and the General Account
in the same proportion in which the loan was taken.
An outstanding loan amount will decrease the Surrender Value available under
the Policy. If a loan is not repaid, the decrease in the Surrender Value
could cause the Policy to lapse. In addition, the Death Benefit will be
decreased because of an outstanding Policy Loan. Furthermore, even if you
repay the loan, the amount of the Death Benefit and the Policy's Surrender
Value may be permanently affected since the Loan Value is not credited with
the investment experience of the Funds.
> POLICY CHANGES
You may make changes to your Policy, as described below, by submitting a
Written Request to our Home Office. Supplemental Policy Specification pages
and/or a notice confirming the change will be sent to you once the change is
completed.
Increase or Decrease in Specified Amount
You may increase the Specified Amount of this Policy after the 1st Policy
Year, so long as you are under attained age 86 and you send us a written
request and the Policy to Our home office. However:
o Any increase must be at least $25,000 for a fully underwritten issue and
$5,000 for a simplified or guaranteed issue
o Any decrease must be at least $25,000
o Any increase or decrease will affect your cost of insurance charge
o Any increase or decrease may affect the monthly Accumulation Value
Adjustment
o We may require evidence of insurability for an increase
o Any increase will affect the amount available for a Type A loan, but a
decrease will not have any such effect
o Any increase will be effective on the Monthly Anniversary Date after the
Date of Receipt of the request
o We will assess a charge against the Accumulation Value on the Monthly
Anniversary Date that an increase takes effect. This charge is an amount
per $1000 of increase in Specified Amount, which varies by sex, attained
age, and rating class of the Insured at the time of the increase
o Any increase will result in a new Acquisition Charge for the 120 months
following the increase;
o Any decrease may result in federal tax implications (See "Federal Tax
Matters")
o No decrease may decrease the Specified Amount below $25,000.
o Any decrease will first apply to coverage provided by the most recent
increase, then to the next most recent, and so on, and finally to the
coverage under the original application
o We will allow increases in Specified Amount at any time, so long as the
Policy is issued as a 1035 exchange and the increase is needed to avoid
the Policy becoming a modified endowment contract because of additional
1035 exchange money we receive after the policy is issued
Change in Death Benefit Option
Any change in the Death Benefit Option is subject to the following
conditions:
o The change will take effect on the Monthly Anniversary Date on or next
following the date on which your Written Request is received.
o Evidence of insurability may be required if the change would result in
an increase in the difference between the Death Benefit and the
Accumulation Value.
o If you change from Option 1 to Option 2 the Specified Amount will be
decreased by the Accumulation Value.
o If you change from Option 2 to Option 1, the Specified Amount will be
increased by the Accumulation Value.
o If you change from Option 3 to Option 1, the Specified Amount will be
increased by the total premiums paid less any withdrawals.
o If you change from Option 3 to Option 2, the Specified Amount will be
increased by the total premiums paid less any withdrawals, and decreased
by the Accumulation Value.
o Changes from Option 1 to 2 or from Option 3 to Option 1 or 2 will be
allowed at any time while this Policy is in force, We will not require
evidence of insurability for this change, so long as the Specified
Amount is adjusted to make the difference between the Death Benefit and
the Accumulation Value after the change in Death Benefit Option the same
as it was before the change.
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If the change decreases the Specified Amount below the minimum of $25,000,
we will increase the Specified Amount to $25,000.
Changes from Option 2 to 1 will be allowed at any time while this Policy is
in force. The new Specified Amount will be increased to equal the Specified
Amount plus the Accumulation Value as of the date of the change. (See
Surrender Charge and Right of Policy Examination) Changes to Option 3 are
not allowed.
> RIGHT OF POLICY EXAMINATION ("FREE LOOK PERIOD")
The Policy has a free look period during which you may examine the Policy.
If for any reason you are dissatisfied, you may return the Policy to us at
our Service Office or to our representative within 10 days of delivery of
the Policy to you (or within a different period if required by State law).
Return the Policy to Jefferson Pilot Financial Insurance Company at One
Granite Place, Concord, New Hampshire 03301. Upon its return, the Policy
will be deemed void from its beginning. We will return to you within seven
days all payments we received on the Policy. Prior to the Allocation Date,
we will hold the initial Net Premium, and any other premiums we receive, in
our General Account. We will retain any interest earned if the Free Look
right is exercised, unless otherwise required by State law.
> SUPPLEMENTAL BENEFITS
The supplemental benefits currently available as riders to the Policy
include the following:
o Accelerated Benefit Rider--pays a portion of the Death Benefit upon
occurrence of critical or terminal illness or nursing home confinement,
subject to the terms of the rider.
o Accidental Death Benefit Rider--provides a benefit in the event of
accidental death, subject to the terms of the rider.
o Automatic Increase Rider--allows for scheduled annual increases in
Specified Amount, subject to the terms of the rider.
o Children's Term Insurance Rider--provides increments of level term
insurance on the Insured's children, subject to the terms of the rider.
o Death Benefit Maintenance Rider--provides a death benefit beyond the
Insured's age 100, subject to the terms of the rider.
o Disability Waiver of Deductions--waives monthly deductions in the event
of disability before age 65, subject to the terms of the rider.
o Disability Waiver of Specified Premium-- deposits a specified premium
monthly into the Policy if the Insured is disabled before age 65,
subject to the terms of the rider.
o Guaranteed Death Benefit Rider--guarantees that the Policy will stay in
force during the guarantee period with a Death Benefit equal to the
Specified Amount, subject to the terms of the rider.
o Guaranteed Insurability Rider--provides that the Insured can purchase
additional insurance at certain future dates without evidence of
insurability, subject to the terms of the rider.
o Spouse Term Rider--provides coverage on the spouse of the insured,
subject to the terms of the rider.
o Supplemental Coverage Rider--provides additional coverage to the Policy,
subject to the terms of the rider.
These riders may not be available in all states. All riders are available in
Policies issued on an individual basis. For Policies issued on a simplified
issue or guaranteed issue basis, only the Supplementary Coverage Rider, the
Death Benefit Maintenance Rider and the Guaranteed Death Benefit Rider are
available.
Other riders for supplemental benefits may become available under the Policy
from time to time. The charges for each of these riders are described in
Your Policy.
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death benefit
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The Death Benefit under the Policy will be paid in a lump sum unless you or
the beneficiary have elected that they be paid under one or more of the
available Settlement Options.
Payment of the Death Benefit may be delayed if the Policy is being
contested. You may elect a Settlement Option for the beneficiary and deem it
irrevocable. You may revoke or change a prior election. The beneficiary may
make or change an election within 90 days of the Death of the Insured,
unless you have made an irrevocable election.
All or part of the Death Benefit may be applied under one of the Settlement
Options, or such options as we may choose to make available in the future.
If the Policy is assigned as collateral security, we will pay any amount due
the assignee in a lump sum. Any excess Death Benefit due will be paid as
elected.
(See "Right to Defer Payment" and "Policy Settlement")
policy settlement
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We will pay proceeds in whole or in part in the form of a lump sum or the
Settlement Options available under the Policy upon the death of the Insured
or upon Surrender.
A Written Request may be made to elect, change or revoke a Settlement Option
before payments begin under any Settlement Option. This request will take
effect upon its filing at our Home Office. If you have not elected a
Settlement Option when the
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Death Benefit becomes payable to the beneficiary, that beneficiary may make
the election.
> SETTLEMENT OPTIONS
The following Settlement Options are available under the Policy:
Option A--Installments of a specified amount. Payments of an agreed amount
to be made monthly until the proceeds and interest are exhausted.
Option B--Installments for a specified period. Payments to be made monthly
for an agreed number of years.
Option C--Life Income. Payments to be made each month for the lifetime of
the payee. We guarantee that payments will be made for a minimum of 10, 15
or 20 years, as agreed upon.
Option D--Interest. We will pay interest on the proceeds we hold, calculated
at the compound rate of 3% per year. We will make interest payments at 12,
6, 3 or 1 month intervals.
Option E--Interest: Retained Asset Account (Performance Plus Account). We
will pay interest on the proceeds we hold, based on the floating 13-week
U.S. Treasury Bill rate fixed quarterly. The payee can write checks against
such account at any time and in any amount up to the total in the account.
The checks must be for a minimum of $250.
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 2.5% per year. The
interest rate for Option E will not be less than 2% per year.
Unless otherwise stated in the election of any option, the payee of the
policy benefits shall have the right to receive the withdrawal value under
that option. For Options A, D and E, 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. We
will calculate this withdrawal value on the same basis as the original
payments. For Option C, the withdrawal value will be the commuted value of
any remaining guaranteed payments. If the payee is alive at the end of the
guarantee period, we will resume the payment on that date. The payment will
then continue for the lifetime of the payee.
If the 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.
At least $25,000 of Policy proceeds must be applied to each settlement
option chosen. We reserve the right to change payment intervals to increase
payments to $250 each.
Calculation of Settlement Option Values
The value of the Settlement Options will be calculated as set forth in the
Policy.
24
<PAGE>
the company
----------------------------------------------------------------------------
Jefferson Pilot Financial Insurance Company ("JP Financial" or "the
Company") is a stock life insurance company chartered in 1903 in Tennessee,
redomesticated to New Hampshire in 1991 and redomesticated to Nebraska
effective June 12, 2000. Prior to May 1, 1998, JP Financial was known as
Chubb Life Insurance Company of America. In 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 336-691-3000. Chubb Life changed its name to Jefferson
Pilot Financial Insurance Company effective May 1, 1998. JP Financial's
service center is located at One Granite Place, Concord, New Hampshire
03301; its telephone number is 800-258-3648.
We are licensed to do life insurance business in forty-nine states of the
United States, the District of Columbia, Puerto Rico, the U.S. Virgin
Islands, Guam and the Commonwealth of the Northern Mariana Islands.
At December 31, 1999 the Company and its subsidiaries had total assets of
approximately $6.2 billion and had $68 billion of insurance in force, while
total assets of Jefferson-Pilot Corporation and its subsidiaries (including
the Company) were approximately $26.4 billion.
We write individual life insurance and annuities. It is subject to Nebraska
law governing insurance.
Effective August 1, 2000, Alexander Hamilton Life and Guarantee Life
Insurance Company ("GLIC") merged with and into the Company, with the
Company as the surviving entity. Both Alexander Hamilton Life and GLIC were
affiliates of the Company. Alexander Hamilton Life was a stock life company
initially organized under the laws of the State of North Carolina in 1981,
and reincorporated in the State of Michigan in September 1995. GLIC was a
stock life insurance company incorporated under the laws of the state of
Nebraska. GLIC originally was organized in 1901 as a mutual assessment
association and, after a period as a mutual life insurance company, became a
stock life insurance company on December 26, 1995.
Upon the merger, the existence of Alexander Hamilton Life and GLIC ceased,
and the Company became the surviving company. GLIC did not have any separate
accounts or insurance contracts registered with the SEC. All of the
Contracts issued by Alexander Hamilton Life before the merger were, at the
time of the merger, assumed by the Company. The merger did not affect any
provisions of, or rights or obligations under, those Contracts.
In approving the merger on July 14, 2000, the boards of directors of the
Company, Alexander Hamilton Life, and GLIC determined that the merger of
three financially strong stock life insurance companies would result in an
overall enhanced capital position and reduced expenses, which, together,
would be in the long-term interests of their respective contract owners. On
July 14, 2000, the 100% stockholders of the Company, Alexander Hamilton Life
and GLIC voted to approve the merger. In addition, the Nebraska Department
of Insurance has approved the merger.
We are currently rated AAA (Superior) by Duff & Phelps, AAA (Superior) by
Standard & Poor's Corporation and A+ (Superior) by A.M. Best and Company.
These ratings do not apply to JPF Separate Account A, but reflect the
opinion of the rating companies as to our relative financial strength and
ability to meet its contractual obligations to its policyowners.
25
<PAGE>
directors and officers
----------------------------------------------------------------------------
MANAGEMENT OF JP FINANCIAL
Executive Officers and Directors of JP Financial
Directors
<TABLE>
<CAPTION>
Principal Occupation and
Name Business Address
-------------------------------------------------------------------------------------------
<S> <C>
Robert D. Bates .............. Executive Director
8801 Indian Hills Drive
Omaha, Nebraska 68114
Dennis R. Glass .............. Executive Vice President
(also serves as Executive Vice President, Chief Financial
Officer of Jefferson-Pilot Corporation and Jefferson-Pilot
Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401
Kenneth C. Mlekush ........... President
(also serves as Executive Vice President of Jefferson-Pilot
Life Insurance Company)
100 North Greene Street
Greensboro, North Carolina 27401
David A. Stonecipher ......... 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
</TABLE>
Executive Officers (Other Than Directors)
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
Charles C. Cornelio .............. Executive Vice President
Leslie L. Durland ................ Executive Vice President
John D. Hopkins .................. Executive Vice President, General Counsel
John C. Ingram ................... Executive Vice President
Reggie D. Adamson ................ Senior Vice President
Ronald R. Angarella .............. Senior Vice President
Charles P. Elam II ............... Senior Vice President, Annuity Actuary
Bruce G. Parker, Jr. ............. Senior Vice President
Hal B. Phillips, Jr. ............. Senior Vice President, Chief Life Actuary
Hoyt J. Phillips ................. Senior Vice President
Richard T. Stange ................ Senior Vice President, Deputy General Counsel
James R. Abernathy ............... Vice President
George Bentham ................... Vice President
David K. Booth ................... Vice President
H. Lusby Brown ................... Vice President
Margaret O. Cain ................. Vice President
John A. Cindia ................... Vice President
Rebecca M. Clark ................. Vice President
Richard C. Dielensnyder .......... Vice President
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
Kenneth S. Dwyer ................... Vice President
Peter N. Ellinwood ................. Vice President
Ronald H. Emery .................... Vice President
Randal J. Freitag .................. Vice President
Carol. A. Hardiman ................. Vice President
James A. Hoffman, II ............... Vice President and Associate General Counsel
Donald M. Kane ..................... Vice President
Patrick A. Lang .................... Vice President
Shari J. Lease ..................... Vice President
James. E. MacDonald, Jr. ........... Vice President
Marvin L. Maynard .................. Vice President
Donna L. Metcalf ................... Vice President
W. Hardee Mills, Jr. ............... Vice President
Thomas E. Murphy, Jr. M.D. ......... Vice President and Medical Director
Robert A. Reed ..................... Vice President, Secretary
James M. Sandelli .................. Vice President
Russell C. Simpson ................. Vice President and Treasurer
Francis A. Sutherland, Jr. ......... Vice President
John A. Thomas ..................... Vice President
John A. Weston ..................... Vice President
Robert H. Whalen ................... Vice President
</TABLE>
The officers and employees of JP Financial who have access to the assets of
Separate Account A are covered by a fidelity bond issued by American
International Group in the amount of $20,000,000.
additional information
----------------------------------------------------------------------------
> REPORTS TO POLICYOWNERS
We will maintain all records relating to the Separate Account. At least once
in each Policy Year, we will send you an Annual Summary containing the
following information:
1. A statement of the current Accumulation Value and Surrender Value since
the prior report or since the Issue Date, if there has been no prior report;
2. A statement of all premiums paid and all charges incurred;
3. The balance of outstanding Policy Loans for the previous calendar year;
4. Any reports required by the 1940 Act.
We will promptly mail confirmation notices at the time of the following
transactions:
1. policy issue;
2. receipt of premium payments;
3. initial allocation among Divisions on the Allocation Date;
4. transfers among Divisions;
5. change of premium allocation;
6. change between Death Benefit Options;
7. increases or decreases in Specified Amount;
8. withdrawals, surrenders or loans;
9. receipt of loan repayments;
10. reinstatements; and
11. redemptions due to insufficient funds.
> RIGHT TO INSTRUCT VOTING OF FUND SHARES
In accordance with our view of present applicable law, we will vote the
shares of the Funds held in the Separate Account in accordance with
instructions received from Policyowners having a voting interest in the
Funds. Policyowners having such an interest will receive periodic reports
relating to the Fund, proxy material and a form for giving voting
instructions. The number of shares you have a right to vote will be
determined as of a record date established
27
<PAGE>
by the Fund. The number of votes that you are entitled to direct with
respect to a Fund will be determined by dividing your Policy's Accumulation
Value in a Division by the net asset value per share of the corresponding
Portfolio in which the Division invests. We will solicit your voting
instructions by mail at least 14 days before any shareholders meeting.
We will cast the votes at meetings of the shareholders of the Fund and our
votes will be based on instructions received from Policyowners. However, if
the Investment Company Act of 1940 or any regulations thereunder should be
amended or if the present interpretation should change, and as a result we
determine that we are permitted to vote the shares of the Fund in our right,
we may elect to do so.
We will vote Fund shares for which we do not receive timely instructions and
Fund shares which are not otherwise attributable to Policyowners in the same
proportion as the voting instruction which we receive for all Policies
participating in each Fund through the Separate Account.
> DISREGARD OF VOTING INSTRUCTIONS
When required by state insurance regulatory authorities, we may disregard
voting instructions if the instructions require that the shares be voted so
as to cause a change in the sub-classification or investment objectives of a
Fund or to approve or disapprove an investment advisory contract for a Fund.
We may also disregard voting instructions initiated by a Policyowner in
favor of changes in the investment policy or the investment adviser of the
Fund if we reasonably disapprove of such changes.
We only disapprove a change if the proposed change is contrary to state law
or prohibited by state regulatory authorities or if we determine that the
change would have an adverse effect on the Separate Account if the proposed
investment policy for a fund would result in overly speculative or unsound
investments. In the event that we do disregard voting instructions, a
summary of that action and the reasons for such action will be included in
the next annual report to Policyowners.
> STATE REGULATION
The Policy will be offered for sale in all jurisdictions where we are
authorized to do business and where the Policy has been approved by the
appropriate Insurance Department or regulatory authorities.
> LEGAL MATTERS
We know of no pending material legal proceedings pending to which either the
Separate Account or the Company is a party or which would materially affect
the Separate Account. The legal validity of the securities described in the
prospectus has been passed on by our Counsel. The law firm of Jorden Burt
Boros Cicchetti Berenson & Johnson, 1025 Thomas Jefferson Street, Suite 400,
East Lobby, Washington, DC 20007-5201, serves as our Special Counsel with
regard to the federal securities laws.
> THE REGISTRATION STATEMENT
We have filed a Registration Statement under the Securities Act of 1933
relating to the offering described in this Prospectus. This Prospectus does
not include all of the information set forth in the Registration Statement,
certain portions of which have been omitted pursuant to SEC rules and
regulations. You should refer to the instrument as filed to obtain any
omitted information.
> FINANCIAL STATEMENTS
Our financial statements which are included in the Prospectus should be
considered only as bearing on our ability to meet our obligations under the
Policy. They should not be considered as bearing on the investment
experience of the assets held in the Separate Account. Our most current
audited financial statements are as of the end of the most recent fiscal
year.
> EMPLOYMENT BENEFIT PLANS
Employers and employee organizations should consider, in connection with
counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of policy in connection with an employment-related insurance or
benefit plan. The U.S. 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.
> DISTRIBUTION OF THE POLICY
Jefferson Pilot Variable Corporation (JPVC), a North Carolina Corporation
incorporated on January 13, 1970, will serve as principal underwriter of the
securities offered under the Policy as defined by the federal securities
laws. The Policy will be sold by individuals who, in addition to being
licensed as
28
<PAGE>
life insurance agents for us, are also registered representatives of
broker-dealers who have entered into written sales agreements with JPVC. Any
such broker-dealers will be registered with the SEC and will be members of
the National Association of Securities Dealers, Inc. We may also offer and
sell policies directly.
We will pay commissions under various schedules and accordingly commissions
will vary with the form of schedule selected. In any event, commissions to
registered representatives are not expected to exceed the following: 35% of
first year target premium and 10% of first year excess premium; 20% of
second through fifth year target premium and 6% of excess premium; and 3% of
sixth through tenth year premium for target and excess. Compensation
arrangements vary among broker-dealers. 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 compensation. Except as previously described in
this prospectus, no separate deductions from premiums are made to pay sales
commissions or sales expenses.
> INDEPENDENT AUDITORS
Ernst & Young, LLP, 200 Clarendon Street, Boston, Massachusetts are the
independent auditors for the Separate Account and Ernst & Young, LLP, 300
North Greene Street, Greensboro, North Carolina, are the independent
auditors for the Company. The services provided to the Separate Account
include primarily the audits of the Separate Account's financial statements.
group or sponsored arrangements
----------------------------------------------------------------------------
Policies may be purchased under group or sponsored arrangements. 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. 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.
We may modify the following types of charges for Policies issued in
connection with group or sponsored arrangement: the cost of insurance
charge, surrender or withdrawal charges, administrative charges, charges for
withdrawal or transfer and charges for optional rider benefits. We may also
issue Policies in connection with group or sponsored arrangements on a
"non-medical" or 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. We may also
specify different minimum Specified Amounts at issue for Policies issued in
connection with group or sponsored arrangements.
We may also modify or eliminate certain charges or underwriting requirements
for Policies issued in connection with an exchange of another JP Financial
policy or a policy of any JP Financial affiliate.
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.
Reductions and modifications will not be made where prohibited by law and
will not be unfairly discriminatory.
tax matters
----------------------------------------------------------------------------
> GENERAL
Following is a discussion of the federal income tax considerations relating
to the Policy. This discussion is based on our understanding of federal
income tax laws as they now exist and are currently interpreted by the
Internal Revenue Service. These laws are complex and tax results may vary
among individuals. Anyone contemplating the purchase of or the exercise of
elections under the Policy should seek competent tax advice.
29
<PAGE>
> FEDERAL TAX STATUS OF THE COMPANY
We are taxed as a life insurance company in accordance with the Internal
Revenue Code of 1986 as amended ("Code"). For federal income tax purposes,
the operations of each Separate Account form a part of our total operations
and are not taxed separately, although operations of each Separate Account
are treated separately for accounting and financial statement purposes.
Both investment income and realized capital gains of the Separate Account
are reinvested without tax since the Code does not impose a tax on the
Separate Account for these amounts. However, we reserve the right to make a
deduction for such tax should it be imposed in the future.
> LIFE INSURANCE QUALIFICATION
The Policy contains provisions not found in traditional life insurance
policies. However, we believe that it should qualify under the Code as a
life insurance contract for federal income tax purposes, with the result
that all Death Benefits paid under the Policy will generally be excludable
from the gross income of the Policy's Beneficiary.
Section 7702 of the Code includes a definition of life insurance for tax
purposes. The definition provides limitations on the relationship between
the death benefit and the account value. If necessary, we will increase your
death benefit to maintain compliance with Section 7702.
The Policy is intended to qualify as life insurance under the Code. The
Death Benefit provided by the Policy is intended to qualify for the federal
income tax exclusion. If at any time the premium paid under the Policy
exceeds the amount allowable for such qualification, we will refund the
premium to you with interest within 60 days after the end of the Policy Year
in which the premium was received. If, for any reason, we do not refund the
excess premium within such 60-day period, the excess premium will be held in
a separate deposit fund and credited with interest until refunded to you.
The interest rate used on any refund, or credited to the separate deposit
fund created by this provision will be the excess premiums. We may notify
you of other options available to you to keep your policy in compliance. You
may also choose to have the Policy become 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 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 contract, 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 you request
a refund of the excess premium, as outlined above. Generally, a life
insurance policy which is received in exchange for a modified endowment or a
modified endowment which terminates and is restored, will also be considered
a modified endowment.
If a Policy is deemed to be a modified endowment contract, any distribution
from the Policy will be
30
<PAGE>
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 Accumulation 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 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 you. Also, any distributions within two years before a Policy
becomes a modified endowment contract will also be income taxable to you 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 contracts 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.
If the Insured reaches age 100, the Death Benefit will be set at 101% of the
Accumulation Value of the Policy. We believe the Policy will continue to
qualify as life insurance under the Code, however, there is some uncertainty
regarding this treatment. It is possible, therefore, that you would be
viewed as constructively receiving the Surrender Value in the year in which
the Insured attains age 100 and would realize taxable income at that time,
even if the Policy proceeds were not distributed at that time.
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, 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, you
are advised to consult a tax adviser for more complete tax information,
specifically regarding the applicability of the Code provisions to your
situation.
Under normal circumstances, if the Policy is not a modified endowment
contract, loans received under the Policy will be construed as your
indebtedness. You 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 you. 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 you have paid
that have not been previously withdrawn.
If you make a partial withdrawal, surrender, loan or exchange of the Policy,
we may be required to withhold federal income tax from the portion of the
money you receive that is includible in your 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 we make the payment. In
addition, if you fail to provide us with a correct taxpayer identification
number (usually a social security number) or if the Treasury notifies Us
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, you are 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 you elect not to have federal income
tax withheld, or if the amount withheld is insufficient, then you may be
responsible for payment of estimated tax. You may also incur penalties under
the estimated tax rules if the withholding and estimated tax payments are
31
<PAGE>
insufficient. We suggest that you consult with a tax adviser 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, 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. We believe we presently are and
intend to remain in compliance with the diversification requirements as set
forth in the regulations. If the diversification requirements are not
satisfied, the Policy would not be treated as a life insurance contract. As
a consequence to you, income earned on a Policy would be taxable to you in
the 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 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, investment selection, 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. However, we
have reserved certain rights to alter the Policy and investment alternatives
so as to comply with such regulation or ruling. We believe 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.
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.
> CHARGES FOR JP FINANCIAL INCOME TAXES
We are 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 we will include flexible premium life insurance
operations in our tax return in accordance with these rules.
Currently no charge is made against the Separate Account for our federal
income taxes, or provisions for such taxes, that may be attributable to the
Separate Account. We may charge each Division for its portion of any income
tax charged to us on the Division or its assets. Under present laws, we may
incur state and local taxes (in addition to premium taxes) in several
states. At present these taxes are not significant. However, if they
increase, we may decide to make charges for such taxes or provisions for
such taxes against the Separate Account. We would retain any investment
earnings on any tax charges accumulated in a Division. Any such charges
against the Separate Account or its Divisions could have an adverse effect
on the investment experience of such Division.
32
<PAGE>
miscellaneous policy provisions
----------------------------------------------------------------------------
> THE POLICY
The Policy which you receive, the application you make when you purchase the
Policy, any applications for any changes approved by us and any riders
constitute the whole contract. Copies of all applications are attached to
and made a part of the Policy.
Application forms are completed by the applicants and forwarded to us for
acceptance. Upon acceptance, the Policy is prepared, executed by our duly
authorized officers and forwarded to you.
We reserve the right to make a change in the Policy; however, we will not
change any terms of the Policy beneficial to you.
> PAYMENT OF BENEFITS
All benefits are payable at our Service Office. We may require submission of
the Policy before we grant Policy Loans, make changes or pay benefits.
> SUICIDE AND INCONTESTABILITY
Suicide Exclusion--In most states, if the Insured dies by suicide, while
sane or insane, within 2 years from the Issue Date of this Policy, this
Policy will end and we will refund premiums paid, without interest, less any
Policy Debt and less any withdrawal. If the Insured commits suicide within 2
years of the effective date of any Increase in Specified Amount, our only
liability with regard to the Increase will be for the sum of the Monthly
Deductions for such Increase in Specified Amount.
Incontestability--We will not contest or revoke the insurance coverage
provided under the Policy after the Policy has been in force during the
lifetime of the Insured for two years from the date of issue or
reinstatement.
> PROTECTION OF PROCEEDS
To the extent provided by law, the proceeds of the Policy are not subject to
claims by a Beneficiary's creditors or to any legal process against any
Beneficiary.
> NONPARTICIPATION
The Policy is not entitled to share in our divisible surplus. No dividends
are payable.
> CHANGES IN OWNER AND BENEFICIARY; ASSIGNMENT
Unless otherwise stated in the Policy, you may change the Policyowner and
the Beneficiary, or both, at any time while the Policy is in force. A
request for such change must be made in writing and sent to us at our
Service Office. After we have agreed, in writing, to the change, it will
take effect as of the date on which your Written Request was signed.
The Policy may also be assigned. No assignment of Policy will be binding on
us unless made in writing and sent to us at our Service Office. We will use
reasonable procedures to confirm that the assignment is authentic.
Otherwise, we are not responsible for the validity of any assignment. Your
rights and the Beneficiary's interest will be subject to the rights of any
assignee of record.
> MISSTATEMENTS
If the age or sex of the Insured has been misstated in an application,
including a reinstatement application, we will adjust the benefits payable
to reflect the correct age or sex.
33
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
appendix a
----------------------------------------------------------------------------
> ILLUSTRATIONS OF ACCUMULATION VALUES, CASH VALUES AND DEATH BENEFITS
Following are a series of tables that illustrate how the Accumulation
Values, Surrender Values and Death Benefits of a policy change with the
investment performance of the Portfolios. The tables show how the
Accumulation Values, Surrender 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 annual
rate of 0%, 6%, and 12%. The tables on pages A-3 through A-13 illustrate a
Policy issued to a male, age 45, under a standard rate non-smoker
underwriting risk classification. The Accumulation Values, Surrender Values
and Death Benefits would be different from those shown if the returns
averaged 0%, 6%, and 12% over a period of years, but fluctuated above and
below those averages for individual policy years.
The Surrender Value exceeds the Accumulation Value during the first two
policy years due to the refund of Sales Charges feature.
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
Surrender Values of the Policy over the designated period. The Accumulation
Values shown in the third column and the Surrender 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, and that the mortality
and expense risk charge and Premium Load are charged at current rates. The
current cost of insurance rates are based on the sex, issue age, policy
year, and rating class of the Insured, and the Specified Amount of the
Policy. The Accumulation Values shown in the sixth column and the Surrender
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, and
upon the maximum mortality and expense risk charges and premium load
provided in the Policy, as described below. The current cost of insurance
rates are different for Specified Amounts below $100,000 and above $100,000.
The fifth and eighth columns illustrate the Death Benefit of a Policy over
the designated period on a current and guaranteed basis, respectively. The
illustrations of Death Benefits reflect the same assumptions as the
Accumulation Values and Surrender Values. The Death Benefit values also vary
between tables, depending upon whether Option I, Option II or Option III
death benefits are illustrated.
The amounts shown for the death benefit, Accumulation Values, and Surrender
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 .71% of the aggregate arithmetic
average daily net assets of the Portfolios, plus a charge of .15% of the
aggregate arithmetic average daily net assets to cover expenses incurred by
the Portfolios for the twelve months ended December 31, 1999. The .71%
investment advisory fee is an average of the individual investment advisory
fees of the twenty Portfolios. The .15% expense figure is an average of the
annual expenses of the Jefferson Pilot Variable Fund Portfolios, the
Templeton International Securities Fund, the Fidelity VIP and VIP II
Portfolios, the Oppenheimer Portfolios and the MFS Portfolios. The
investment advisor and Jefferson Pilot Variable Fund have entered into an
expense reimbursement plan with the S&P 500 Index Portfolio whereby the
advisor reimburses the fund at an annual rate of 0.28% of average daily net
assets. The investment advisor to the Fidelity Variable Insurance Products
Fund and the Fidelity Variable Insurance Products Fund II has also entered
into similar expense reimbursement plans with the Equity-Income Portfolio
(.01%), the Growth Portfolio (.01)% and the Contrafund Portfolio (.03%).
Had these arrangements not been in place, the expense ratio would have been
increased by .01% for a total of .16%.
These expense reimbursement arrangements are expected to continue past the
current year. Expenses for the Templeton International Securities Fund:
Class 2, the Fidelity Equity Income, Growth, and Contrafund 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 0.60% (0.85% guaranteed) of the
average daily net assets of the divisions of Separate Account A in Policy
Years 1 through 25 and 0.40% (0.60% guaranteed) thereafter.
A-1
<PAGE>
After deduction of these amounts, the illustrated gross investment rates of
0%, 6%, and 12% correspond to approximate net annual rates of -1.46%, 4.54%
and 10.54%, respectively, on a current basis, and -1.71%, 4.29% and 10.29%
on a guaranteed basis.
The assumed annual premium used in calculating Accumulation Value, Cash
Value, and Death Benefits is net of the 2.5% state premium tax charge, the
1.25% federal DAC tax charge and the Premium Load, which is 3% in Policy
Years 1 through 10 only on a current basis and 3% in all years on a
guaranteed basis. It also reflects deduction of the Monthly Deduction and
addition of the Monthly Accumulation Value Adjustment. As part of the
Monthly Deduction, the Monthly Acquisition Charge of 0.6% of the Load Basis
Amount is per month in Policy Years 1 through 10 has been deducted. The Load
Basis Amount varies by Sex, Issue Age and rating class of the Insured.
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, Surrender 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 that no transfers have been made and
no transfer charges imposed.
Upon request, we will provide 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
Surrender Value at the time of request. We reserve the right to charge an
administrative fee of up to $25 for such illustrations.
A-2
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,513 1,875 100,000 1,345 1,708 100,000
2 4,305 3,169 3,531 100,000 2,798 3,160 100,000
3 6,620 4,983 4,983 100,000 4,367 4,367 100,000
4 9,051 6,981 6,981 100,000 6,065 6,065 100,000
5 11,604 9,187 9,187 100,000 7,903 7,903 100,000
6 14,284 11,628 11,628 100,000 9,895 9,895 100,000
7 17,098 14,328 14,328 100,000 12,052 12,052 100,000
8 20,053 17,313 17,313 100,000 14,387 14,387 100,000
9 23,156 20,619 20,619 100,000 16,917 16,917 100,000
10 26,414 24,271 24,271 100,000 19,659 19,659 100,000
11 29,834 28,483 28,483 100,000 22,750 22,750 100,000
12 33,426 33,142 33,142 100,000 26,116 26,116 100,000
13 37,197 38,305 38,305 100,000 29,793 29,793 100,000
14 41,157 44,036 44,036 100,000 33,833 33,833 100,000
15 45,315 50,403 50,403 100,000 38,288 38,288 100,000
16 49,681 57,446 57,446 100,000 43,212 43,212 100,000
17 54,265 65,300 65,300 100,000 48,668 48,668 100,000
18 59,078 74,063 74,063 100,000 54,731 54,731 100,000
19 64,132 83,854 83,854 103,979(4) 61,491 61,491 100,000
20 69,439 94,718 94,718 115,555(4) 69,060 69,060 100,000
25 100,227 169,065 169,065 196,115(4) 122,320 122,320 141,892(4)
30 139,522 293,704 293,704 314,263(4) 210,107 210,107 224,815(4)
35 189,673 502,916 502,916 528,061(4) 355,015 355,015 372,766(4)
40 253,680 848,413 848,413 890,834(4) 585,735 585,735 615,021(4)
45 335,370 1,412,395 1,412,395 1,483,015(4) 942,874 942,874 990,017(4)
50 439,631 2,352,140 2,352,140 2,375,662(4) 1,524,887 1,524,887 1,540,136(4)
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,513 1,875 100,000 1,345 1,708 100,000
2 4,305 3,169 3,531 100,000 2,798 3,160 100,000
3 6,620 4,983 4,983 100,000 4,367 4,367 100,000
4 9,051 6,981 6,981 100,000 6,065 6,065 100,000
5 11,604 9,187 9,187 100,000 7,903 7,903 100,000
6 14,284 11,628 11,628 100,000 9,895 9,895 100,000
7 17,098 14,328 14,328 100,000 12,052 12,052 100,000
8 20,053 17,313 17,313 100,000 14,387 14,387 100,000
9 23,156 20,619 20,619 100,000 16,917 16,917 100,000
10 26,414 24,271 24,271 100,000 19,659 19,659 100,000
11 29,834 28,483 28,483 100,000 22,750 22,750 100,000
12 33,426 33,142 33,142 100,000 26,116 26,116 100,000
13 37,197 38,305 38,305 100,000 29,793 29,793 100,000
14 41,157 44,036 44,036 100,000 33,833 33,833 100,000
15 45,315 50,403 50,403 100,000 38,288 38,288 100,000
16 49,681 57,411 57,411 109,720(4) 43,212 43,212 100,000
17 54,265 65,126 65,126 121,339(4) 48,668 48,668 100,000
18 59,078 73,607 73,607 133,756(4) 54,731 54,731 100,000
19 64,132 82,934 82,934 147,058(4) 61,399 61,399 108,872(4)
20 69,439 93,195 93,195 161,344(4) 68,616 68,616 118,792(4)
25 100,227 161,694 161,694 250,500(4) 114,422 114,422 177,266(4)
30 139,522 271,012 271,012 380,902(4) 181,298 181,298 254,810(4)
35 189,673 442,344 442,344 574,567(4) 274,888 274,888 357,056(4)
40 253,680 707,621 707,621 861,762(4) 403,506 403,506 491,401(4)
45 335,370 1,114,125 1,114,125 1,292,376(4) 574,156 574,156 666,015(4)
50 439,631 1,737,211 1,737,211 1,925,524(4) 804,215 804,215 891,392(4)
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,507 1,870 101,507 1,338 1,700 101,338
2 4,305 3,152 3,514 103,152 2,774 3,136 102,774
3 6,620 4,946 4,946 104,946 4,315 4,315 104,315
4 9,051 6,915 6,915 106,915 5,971 5,971 105,971
5 11,604 9,079 9,079 109,079 7,747 7,747 107,747
6 14,284 11,464 11,464 111,464 9,654 9,654 109,654
7 17,098 14,091 14,091 114,091 11,694 11,694 111,694
8 20,053 16,982 16,982 116,982 13,874 13,874 113,874
9 23,156 20,169 20,169 120,169 16,199 16,199 116,199
10 26,414 23,670 23,670 123,670 18,673 18,673 118,673
11 29,834 27,688 27,688 127,688 21,419 21,419 121,419
12 33,426 32,098 32,098 132,098 24,341 24,341 124,341
13 37,197 36,941 36,941 136,941 27,455 27,455 127,455
14 41,157 42,264 42,264 142,264 30,776 30,776 130,776
15 45,315 48,114 48,114 148,114 34,326 34,326 134,326
16 49,681 54,459 54,459 154,459 38,117 38,117 138,117
17 54,265 61,442 61,442 161,442 42,159 42,159 142,159
18 59,078 69,107 69,107 169,107 46,456 46,456 146,456
19 64,132 77,534 77,534 177,534 51,014 51,014 151,014
20 69,439 86,809 86,809 186,809 55,837 55,837 155,837
25 100,227 148,823 148,823 248,823 84,265 84,265 184,265
30 139,522 248,787 248,787 348,787 120,383 120,383 220,383
35 189,673 408,765 408,765 508,765 160,639 160,639 260,639
40 253,680 664,997 664,997 764,997 198,557 198,557 298,557
45 335,370 1,076,924 1,076,924 1,176,924 214,970 214,970 314,970
50 439,631 1,743,367 1,743,367 1,843,367 178,653 178,653 278,653
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,507 1,870 101,507 1,338 1,700 101,338
2 4,305 3,152 3,514 103,152 2,774 3,136 102,774
3 6,620 4,946 4,946 104,946 4,315 4,315 104,315
4 9,051 6,915 6,915 106,915 5,971 5,971 105,971
5 11,604 9,079 9,079 109,079 7,747 7,747 107,747
6 14,284 11,464 11,464 111,464 9,654 9,654 109,654
7 17,098 14,091 14,091 114,091 11,694 11,694 111,694
8 20,053 16,982 16,982 116,982 13,874 13,874 113,874
9 23,156 20,169 20,169 120,169 16,199 16,199 116,199
10 26,414 23,670 23,670 123,670 18,673 18,673 118,673
11 29,834 27,688 27,688 127,688 21,419 21,419 121,419
12 33,426 32,098 32,098 132,098 24,341 24,341 124,341
13 37,197 36,941 36,941 136,941 27,455 27,455 127,455
14 41,157 42,264 42,264 142,264 30,776 30,776 130,776
15 45,315 48,114 48,114 148,114 34,326 34,326 134,326
16 49,681 54,459 54,459 154,459 38,117 38,117 138,117
17 54,265 61,442 61,442 161,442 42,159 42,159 142,159
18 59,078 69,107 69,107 169,107 46,456 46,456 146,456
19 64,132 77,534 77,534 177,534 51,014 51,014 151,014
20 69,439 86,809 86,809 186,809 55,837 55,837 155,837
25 100,227 148,823 148,823 248,823 84,265 84,265 184,265
30 139,522 248,787 248,787 349,665 120,383 120,383 220,383
35 189,673 406,961 406,961 528,607 160,639 160,639 260,639
40 253,680 651,939 651,939 793,950 198,557 198,557 298,557
45 335,370 1,027,355 1,027,355 1,191,723 214,970 214,970 314,970
50 439,631 1,602,802 1,602,802 1,776,546 178,653 178,653 278,653
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,506 1,869 102,000 1,336 1,698 102,000
2 4,305 3,148 3,510 104,000 2,766 3,129 104,000
3 6,620 4,938 4,938 106,000 4,298 4,298 106,000
4 9,051 6,902 6,902 108,000 5,941 5,941 108,000
5 11,604 9,060 9,060 110,000 7,699 7,699 110,000
6 14,284 11,440 11,440 112,000 9,583 9,583 112,000
7 17,098 14,063 14,063 114,000 11,597 11,597 114,000
8 20,053 16,953 16,953 116,000 13,747 13,747 116,000
9 23,156 20,142 20,142 118,000 16,038 16,038 118,000
10 26,414 23,653 23,653 120,000 18,477 18,477 120,000
11 29,834 27,690 27,690 122,000 21,188 21,188 122,000
12 33,426 32,135 32,135 124,000 24,081 24,081 124,000
13 37,197 37,035 37,035 126,000 27,174 27,174 126,000
14 41,157 42,445 42,445 128,000 30,489 30,489 128,000
15 45,315 48,424 48,424 130,000 34,057 34,057 130,000
16 49,681 54,969 54,969 132,000 37,901 37,901 132,000
17 54,265 62,230 62,230 134,000 42,044 42,044 134,000
18 59,078 70,278 70,278 136,000 46,514 46,514 136,000
19 64,132 79,221 79,221 138,000 51,340 51,340 138,000
20 69,439 89,180 89,180 140,000 56,559 56,559 140,000
25 100,227 158,959 158,959 184,393 90,825 90,825 150,000
30 139,522 276,864 276,864 296,245 151,014 151,014 161,585
35 189,673 474,767 474,767 498,505 258,357 258,357 271,275
40 253,680 801,595 801,595 841,675 429,342 429,342 450,809
45 335,370 1,335,110 1,335,110 1,401,866 694,111 694,111 728,816
50 439,631 2,224,086 2,224,086 2,246,327 1,125,556 1,125,556 1,136,811
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 12% (10.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 12% (10.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,506 1,869 102,000 1,336 1,698 102,000
2 4,305 3,148 3,510 104,000 2,766 3,129 104,000
3 6,620 4,938 4,938 106,000 4,298 4,298 106,000
4 9,051 6,902 6,902 108,000 5,941 5,941 108,000
5 11,604 9,060 9,060 110,000 7,699 7,699 110,000
6 14,284 11,440 11,440 112,000 9,583 9,583 112,000
7 17,098 14,063 14,063 114,000 11,597 11,597 114,000
8 20,053 16,953 16,953 116,000 13,747 13,747 116,000
9 23,156 20,142 20,142 118,000 16,038 16,038 118,000
10 26,414 23,653 23,653 120,000 18,477 18,477 120,000
11 29,834 27,690 27,690 122,000 21,188 21,188 122,000
12 33,426 32,135 32,135 124,000 24,081 24,081 124,000
13 37,197 37,035 37,035 126,000 27,174 27,174 126,000
14 41,157 42,445 42,445 128,000 30,489 30,489 128,000
15 45,315 48,424 48,424 130,000 34,057 34,057 130,000
16 49,681 54,969 54,969 132,000 37,901 37,901 132,000
17 54,265 62,230 62,230 134,000 42,044 42,044 134,000
18 59,078 70,278 70,278 136,000 46,514 46,514 136,000
19 64,132 79,220 79,220 140,000 51,340 51,340 138,000
20 69,439 89,105 89,105 154,263 56,559 56,559 140,000
25 100,227 155,099 155,099 240,284 90,825 90,825 150,000
30 139,522 260,435 260,435 366,036 145,730 145,730 204,820
35 189,673 425,532 425,532 552,730 223,034 223,034 289,702
40 253,680 681,165 681,165 829,542 329,360 329,360 401,104
45 335,370 1,072,898 1,072,898 1,244,553 470,544 470,544 545,826
50 439,631 1,673,349 1,673,349 1,854,740 660,934 660,934 732,580
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 10.79% on the current basis and 10.54% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 JPF SEPARATE ACCOUNT A, 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-8
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,417 1,779 100,000 1,255 1,617 100,000
2 4,305 2,882 3,245 100,000 2,532 2,894 100,000
3 6,620 4,398 4,398 100,000 3,832 3,832 100,000
4 9,051 5,974 5,974 100,000 5,153 5,153 100,000
5 11,604 7,616 7,616 100,000 6,494 6,494 100,000
6 14,284 9,333 9,333 100,000 7,855 7,855 100,000
7 17,098 11,126 11,126 100,000 9,228 9,228 100,000
8 20,053 12,997 12,997 100,000 10,609 10,609 100,000
9 23,156 14,953 14,953 100,000 11,994 11,994 100,000
10 26,414 16,989 16,989 100,000 13,375 13,375 100,000
11 29,834 19,275 19,275 100,000 14,860 14,860 100,000
12 33,426 21,648 21,648 100,000 16,338 16,338 100,000
13 37,197 24,103 24,103 100,000 17,811 17,811 100,000
14 41,157 26,647 26,647 100,000 19,274 19,274 100,000
15 45,315 29,283 29,283 100,000 20,724 20,724 100,000
16 49,681 31,969 31,969 100,000 22,152 22,152 100,000
17 54,265 34,774 34,774 100,000 23,550 23,550 100,000
18 59,078 37,691 37,691 100,000 24,905 24,905 100,000
19 64,132 40,734 40,734 100,000 26,201 26,201 100,000
20 69,439 43,917 43,917 100,000 27,423 27,423 100,000
25 100,227 62,150 62,150 100,000 31,990 31,990 100,000
30 139,522 86,325 86,325 100,000 31,699 31,699 100,000
35 189,673 119,074 119,074 125,028(4) 16,851 16,851 100,000
40 253,680 159,944 159,944 167,942(4) 0 0 0
45 335,370 209,849 209,849 220,341(4) 0 0 0
50 439,631 273,250 273,250 275,983(4) 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-9
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,417 1,779 100,000 1,255 1,617 100,000
2 4,305 2,882 3,245 100,000 2,532 2,894 100,000
3 6,620 4,398 4,398 100,000 3,832 3,832 100,000
4 9,051 5,974 5,974 100,000 5,153 5,153 100,000
5 11,604 7,616 7,616 100,000 6,494 6,494 100,000
6 14,284 9,333 9,333 100,000 7,855 7,855 100,000
7 17,098 11,126 11,126 100,000 9,228 9,228 100,000
8 20,053 12,997 12,997 100,000 10,609 10,609 100,000
9 23,156 14,953 14,953 100,000 11,994 11,994 100,000
10 26,414 16,989 16,989 100,000 13,375 13,375 100,000
11 29,834 19,275 19,275 100,000 14,860 14,860 100,000
12 33,426 21,648 21,648 100,000 16,338 16,338 100,000
13 37,197 24,103 24,103 100,000 17,811 17,811 100,000
14 41,157 26,647 26,647 100,000 19,274 19,274 100,000
15 45,315 29,283 29,283 100,000 20,724 20,724 100,000
16 49,681 31,969 31,969 100,000 22,152 22,152 100,000
17 54,265 34,774 34,774 100,000 23,550 23,550 100,000
18 59,078 37,691 37,691 100,000 24,905 24,905 100,000
19 64,132 40,734 40,734 100,000 26,201 26,201 100,000
20 69,439 43,917 43,917 100,000 27,423 27,423 100,000
25 100,227 62,150 62,150 100,000 31,990 31,990 100,000
30 139,522 85,218 85,218 119,772(4) 31,699 31,699 100,000
35 189,673 112,263 112,263 145,820(4) 16,851 16,851 100,000
40 253,680 143,410 143,410 174,649(4) 0 0 0
45 335,370 178,792 178,792 207,397(4) 0 0 0
50 439,631 219,256 219,256 243,023(4) 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
h(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-10
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,412 1,774 101,412 1,247 1,610 101,247
2 4,305 2,867 3,229 102,867 2,510 2,873 102,510
3 6,620 4,366 4,366 104,366 3,786 3,786 103,786
4 9,051 5,918 5,918 105,918 5,074 5,074 105,074
5 11,604 7,529 7,529 107,529 6,369 6,369 106,369
6 14,284 9,206 9,206 109,206 7,668 7,668 107,668
7 17,098 10,950 10,950 110,950 8,962 8,962 108,962
8 20,053 12,761 12,761 112,761 10,244 10,244 110,244
9 23,156 14,645 14,645 114,645 11,504 11,504 111,504
10 26,414 16,594 16,594 116,594 12,730 12,730 112,730
11 29,834 18,773 18,773 118,773 14,025 14,025 114,025
12 33,426 21,016 21,016 121,016 15,274 15,274 115,274
13 37,197 23,312 23,312 123,312 16,470 16,470 116,470
14 41,157 25,664 25,664 125,664 17,603 17,603 117,603
15 45,315 28,067 28,067 128,067 18,663 18,663 118,663
16 49,681 30,442 30,442 130,442 19,633 19,633 119,633
17 54,265 32,879 32,879 132,879 20,493 20,493 120,493
18 59,078 35,356 35,356 135,356 21,218 21,218 121,218
19 64,132 37,879 37,879 137,879 21,780 21,780 121,780
20 69,439 40,453 40,453 140,453 22,148 22,148 122,148
25 100,227 53,529 53,529 153,529 20,094 20,094 120,094
30 139,522 66,089 66,089 166,089 7,583 7,583 107,583
35 189,673 74,610 74,610 174,610 0 0 0
40 253,680 73,551 73,551 173,551 0 0 0
45 335,370 54,073 54,073 154,073 0 0 0
50 439,631 3,154 3,154 103,154 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-11
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,412 1,774 101,412 1,247 1,610 101,247
2 4,305 2,867 3,229 102,867 2,510 2,873 102,510
3 6,620 4,366 4,366 104,366 3,786 3,786 103,786
4 9,051 5,918 5,918 105,918 5,074 5,074 105,074
5 11,604 7,529 7,529 107,529 6,369 6,369 106,369
6 14,284 9,206 9,206 109,206 7,668 7,668 107,668
7 17,098 10,950 10,950 110,950 8,962 8,962 108,962
8 20,053 12,761 12,761 112,761 10,244 10,244 110,244
9 23,156 14,645 14,645 114,645 11,504 11,504 111,504
10 26,414 16,594 16,594 116,594 12,730 12,730 112,730
11 29,834 18,773 18,773 118,773 14,025 14,025 114,025
12 33,426 21,016 21,016 121,016 15,274 15,274 115,274
13 37,197 23,312 23,312 123,312 16,470 16,470 116,470
14 41,157 25,664 25,664 125,664 17,603 17,603 117,603
15 45,315 28,067 28,067 128,067 18,663 18,663 118,663
16 49,681 30,442 30,442 130,442 19,633 19,633 119,633
17 54,265 32,879 32,879 132,879 20,493 20,493 120,493
18 59,078 35,356 35,356 135,356 21,218 21,218 121,218
19 64,132 37,879 37,879 137,879 21,780 21,780 121,780
20 69,439 40,453 40,453 140,453 22,148 22,148 122,148
25 100,227 53,529 53,529 153,529 20,094 20,094 120,094
30 139,522 66,089 66,089 166,089 7,583 7,583 107,583
35 189,673 74,610 74,610 174,610 0 0 0
40 253,680 73,551 73,551 173,551 0 0 0
45 335,370 54,073 54,073 154,073 0 0 0
50 439,631 3,154 3,154 103,154 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-12
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,411 1,773 102,000 1,245 1,608 102,000
2 4,305 2,863 3,225 104,000 2,502 2,865 104,000
3 6,620 4,356 4,356 106,000 3,767 3,767 106,000
4 9,051 5,901 5,901 108,000 5,039 5,039 108,000
5 11,604 7,502 7,502 110,000 6,311 6,311 110,000
6 14,284 9,168 9,168 112,000 7,579 7,579 112,000
7 17,098 10,898 10,898 114,000 8,833 8,833 114,000
8 20,053 12,694 12,694 116,000 10,064 10,064 116,000
9 23,156 14,560 14,560 118,000 11,259 11,259 118,000
10 26,414 16,490 16,490 120,000 12,404 12,404 120,000
11 29,834 18,648 18,648 122,000 13,599 13,599 122,000
12 33,426 20,869 20,869 124,000 14,724 14,724 124,000
13 37,197 23,141 23,141 126,000 15,771 15,771 126,000
14 41,157 25,469 25,469 128,000 16,724 16,724 128,000
15 45,315 27,847 27,847 130,000 17,566 17,566 130,000
16 49,681 30,195 30,195 132,000 18,272 18,272 132,000
17 54,265 32,606 32,606 134,000 18,812 18,812 134,000
18 59,078 35,058 35,058 136,000 19,148 19,148 136,000
19 64,132 37,558 37,558 138,000 19,234 19,234 138,000
20 69,439 40,114 40,114 140,000 19,019 19,019 140,000
25 100,227 53,223 53,223 150,000 11,244 11,244 150,000
30 139,522 66,295 66,295 160,000 0 0 0
35 189,673 76,190 76,190 170,000 0 0 0
40 253,680 76,322 76,322 180,000 0 0 0
45 335,370 47,961 47,961 190,000 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-13
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 6% (4.54% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 6% (4.29% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,411 1,773 102,000 1,245 1,608 102,000
2 4,305 2,863 3,225 104,000 2,502 2,865 104,000
3 6,620 4,356 4,356 106,000 3,767 3,767 106,000
4 9,051 5,901 5,901 108,000 5,039 5,039 108,000
5 11,604 7,502 7,502 110,000 6,311 6,311 110,000
6 14,284 9,168 9,168 112,000 7,579 7,579 112,000
7 17,098 10,898 10,898 114,000 8,833 8,833 114,000
8 20,053 12,694 12,694 116,000 10,064 10,064 116,000
9 23,156 14,560 14,560 118,000 11,259 11,259 118,000
10 26,414 16,490 16,490 120,000 12,404 12,404 120,000
11 29,834 18,648 18,648 122,000 13,599 13,599 122,000
12 33,426 20,869 20,869 124,000 14,724 14,724 124,000
13 37,197 23,141 23,141 126,000 15,771 15,771 126,000
14 41,157 25,469 25,469 128,000 16,724 16,724 128,000
15 45,315 27,847 27,847 130,000 17,566 17,566 130,000
16 49,681 30,195 30,195 132,000 18,272 18,272 132,000
17 54,265 32,606 32,606 134,000 18,812 18,812 134,000
18 59,078 35,058 35,058 136,000 19,148 19,148 136,000
19 64,132 37,558 37,558 138,000 19,234 19,234 138,000
20 69,439 40,114 40,114 140,000 19,019 19,019 140,000
25 100,227 53,223 53,223 150,000 11,244 11,244 150,000
30 139,522 66,295 66,295 160,000 0 0 0
35 189,673 76,190 76,190 170,000 0 0 0
40 253,680 76,322 76,322 180,000 0 0 0
45 335,370 47,961 47,961 190,000 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals 4.79% on the current basis and 4.54% on the guaranteed basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. 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 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-14
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,322 1,684 100,000 1,164 1,527 100,000
2 4,305 2,608 2,971 100,000 2,278 2,641 100,000
3 6,620 3,859 3,859 100,000 3,340 3,340 100,000
4 9,051 5,083 5,083 100,000 4,350 4,350 100,000
5 11,604 6,282 6,282 100,000 5,303 5,303 100,000
6 14,284 7,462 7,462 100,000 6,200 6,200 100,000
7 17,098 8,621 8,621 100,000 7,033 7,033 100,000
8 20,053 9,757 9,757 100,000 7,798 7,798 100,000
9 23,156 10,872 10,872 100,000 8,487 8,487 100,000
10 26,414 11,958 11,958 100,000 9,094 9,094 100,000
11 29,834 13,173 13,173 100,000 9,721 9,721 100,000
12 33,426 14,347 14,347 100,000 10,255 10,255 100,000
13 37,197 15,469 15,469 100,000 10,695 10,695 100,000
14 41,157 16,542 16,542 100,000 11,035 11,035 100,000
15 45,315 17,561 17,561 100,000 11,270 11,270 100,000
16 49,681 18,459 18,459 100,000 11,387 11,387 100,000
17 54,265 19,308 19,308 100,000 11,375 11,375 100,000
18 59,078 20,089 20,089 100,000 11,216 11,216 100,000
19 64,132 20,808 20,808 100,000 10,890 10,890 100,000
20 69,439 21,466 21,466 100,000 10,374 10,374 100,000
25 100,227 23,449 23,449 100,000 4,183 4,183 100,000
30 139,522 22,644 22,644 100,000 0 0 0
35 189,673 16,375 16,375 100,000 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-15
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION I: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,322 1,684 100,000 1,164 1,527 100,000
2 4,305 2,608 2,971 100,000 2,278 2,641 100,000
3 6,620 3,859 3,859 100,000 3,340 3,340 100,000
4 9,051 5,083 5,083 100,000 4,350 4,350 100,000
5 11,604 6,282 6,282 100,000 5,303 5,303 100,000
6 14,284 7,462 7,462 100,000 6,200 6,200 100,000
7 17,098 8,621 8,621 100,000 7,033 7,033 100,000
8 20,053 9,757 9,757 100,000 7,798 7,798 100,000
9 23,156 10,872 10,872 100,000 8,487 8,487 100,000
10 26,414 11,958 11,958 100,000 9,094 9,094 100,000
11 29,834 13,173 13,173 100,000 9,721 9,721 100,000
12 33,426 14,347 14,347 100,000 10,255 10,255 100,000
13 37,197 15,469 15,469 100,000 10,695 10,695 100,000
14 41,157 16,542 16,542 100,000 11,035 11,035 100,000
15 45,315 17,561 17,561 100,000 11,270 11,270 100,000
16 49,681 18,459 18,459 100,000 11,387 11,387 100,000
17 54,265 19,308 19,308 100,000 11,375 11,375 100,000
18 59,078 20,089 20,089 100,000 11,216 11,216 100,000
19 64,132 20,808 20,808 100,000 10,890 10,890 100,000
20 69,439 21,466 21,466 100,000 10,374 10,374 100,000
25 100,227 23,449 23,449 100,000 4,183 4,183 100,000
30 139,522 22,644 22,644 100,000 0 0 0
35 189,673 16,375 16,375 100,000 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-16
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,317 1,679 101,317 1,157 1,520 101,157
2 4,305 2,595 2,957 102,595 2,258 2,621 102,258
3 6,620 3,832 3,832 103,832 3,301 3,301 103,301
4 9,051 5,037 5,037 105,037 4,284 4,284 104,284
5 11,604 6,212 6,212 106,212 5,203 5,203 105,203
6 14,284 7,365 7,365 107,365 6,057 6,057 106,057
7 17,098 8,491 8,491 108,491 6,838 6,838 106,838
8 20,053 9,589 9,589 109,589 7,540 7,540 107,540
9 23,156 10,662 10,662 110,662 8,155 8,155 108,155
10 26,414 11,699 11,699 111,699 8,674 8,674 108,674
11 29,834 12,857 12,857 112,857 9,201 9,201 109,201
12 33,426 13,965 13,965 113,965 9,619 9,619 109,619
13 37,197 15,008 15,008 115,008 9,928 9,928 109,928
14 41,157 15,989 15,989 115,989 10,121 10,121 110,121
15 45,315 16,903 16,903 116,903 10,192 10,192 110,192
16 49,681 17,664 17,664 117,664 10,131 10,131 110,131
17 54,265 18,360 18,360 118,360 9,924 9,924 109,924
18 59,078 18,969 18,969 118,969 9,554 9,554 109,554
19 64,132 19,494 19,494 119,494 9,002 9,002 109,002
20 69,439 19,939 19,939 119,939 8,249 8,249 108,249
25 100,227 20,431 20,431 120,431 949 949 100,949
30 139,522 17,215 17,215 117,215 0 0 0
35 189,673 7,683 7,683 107,683 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-17
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION II: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
PREMIUMS
-----------------------------------
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,317 1,679 101,317 1,157 1,520 101,157
2 4,305 2,595 2,957 102,595 2,258 2,621 102,258
3 6,620 3,832 3,832 103,832 3,301 3,301 103,301
4 9,051 5,037 5,037 105,037 4,284 4,284 104,284
5 11,604 6,212 6,212 106,212 5,203 5,203 105,203
6 14,284 7,365 7,365 107,365 6,057 6,057 106,057
7 17,098 8,491 8,491 108,491 6,838 6,838 106,838
8 20,053 9,589 9,589 109,589 7,540 7,540 107,540
9 23,156 10,662 10,662 110,662 8,155 8,155 108,155
10 26,414 11,699 11,699 111,699 8,674 8,674 108,674
11 29,834 12,857 12,857 112,857 9,201 9,201 109,201
12 33,426 13,965 13,965 113,965 9,619 9,619 109,619
13 37,197 15,008 15,008 115,008 9,928 9,928 109,928
14 41,157 15,989 15,989 115,989 10,121 10,121 110,121
15 45,315 16,903 16,903 116,903 10,192 10,192 110,192
16 49,681 17,664 17,664 117,664 10,131 10,131 110,131
17 54,265 18,360 18,360 118,360 9,924 9,924 109,924
18 59,078 18,969 18,969 118,969 9,554 9,554 109,554
19 64,132 19,494 19,494 119,494 9,002 9,002 109,002
20 69,439 19,939 19,939 119,939 8,249 8,249 108,249
25 100,227 20,431 20,431 120,431 949 949 100,949
30 139,522 17,215 17,215 117,215 0 0 0
35 189,673 7,683 7,683 107,683 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-18
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
GUIDELINE PREMIUM TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,316 1,678 102,000 1,155 1,518 102,000
2 4,305 2,590 2,952 104,000 2,250 2,612 104,000
3 6,620 3,821 3,821 106,000 3,280 3,280 106,000
4 9,051 5,017 5,017 108,000 4,245 4,245 108,000
5 11,604 6,180 6,180 110,000 5,138 5,138 110,000
6 14,284 7,317 7,317 112,000 5,957 5,957 112,000
7 17,098 8,424 8,424 114,000 6,691 6,691 114,000
8 20,053 9,500 9,500 116,000 7,331 7,331 116,000
9 23,156 10,546 10,546 118,000 7,868 7,868 118,000
10 26,414 11,551 11,551 120,000 8,289 8,289 120,000
11 29,834 12,671 12,671 122,000 8,692 8,692 122,000
12 33,426 13,734 13,734 124,000 8,958 8,958 124,000
13 37,197 14,724 14,724 126,000 9,079 9,079 126,000
14 41,157 15,641 15,641 128,000 9,044 9,044 128,000
15 45,315 16,477 16,477 130,000 8,838 8,838 130,000
16 49,681 17,135 17,135 132,000 8,442 8,442 132,000
17 54,265 17,711 17,711 134,000 7,830 7,830 134,000
18 59,078 18,176 18,176 136,000 6,968 6,968 136,000
19 64,132 18,530 18,530 138,000 5,816 5,816 138,000
20 69,439 18,777 18,777 140,000 4,334 4,334 140,000
25 100,227 17,539 17,539 150,000 0 0 0
30 139,522 10,118 10,118 160,000 0 0 0
35 189,673 0 0 0 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-19
<PAGE>
JEFFERSON PILOT FINANCIAL INSURANCE COMPANY
ENSEMBLE EXEC FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
<TABLE>
<S> <C> <C> <C>
DEATH BENEFIT OPTION III: ASSUMED HYPOTHETICAL GROSS ANNUAL
CASH VALUE ACCUMULATION TEST RATE OF RETURN(1): (Current) 0% (-1.46% net)
MALE NON-SMOKER ISSUE AGE 45 (Guaranteed) 0% (-1.71% net)
$100,000 INITIAL SPECIFIED AMOUNT ASSUMED ANNUAL PREMIUM(2): $2,000
</TABLE>
<TABLE>
<CAPTION>
ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
PREMIUMS ----------------------------------------------- ---------------------------------------------
END ACCUMULATED
OF AT 5% INTEREST ACCUMULATION SURRENDER DEATH ACCUMULATION SURRENDER DEATH
YEAR PER YEAR VALUE(3) VALUE(3) BENEFIT(3) VALUE(3) VALUE(3) BENEFIT(3)
------ ------------ -------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 2,100 1,316 1,678 102,000 1,155 1,518 102,000
2 4,305 2,590 2,952 104,000 2,250 2,612 104,000
3 6,620 3,821 3,821 106,000 3,280 3,280 106,000
4 9,051 5,017 5,017 108,000 4,245 4,245 108,000
5 11,604 6,180 6,180 110,000 5,138 5,138 110,000
6 14,284 7,317 7,317 112,000 5,957 5,957 112,000
7 17,098 8,424 8,424 114,000 6,691 6,691 114,000
8 20,053 9,500 9,500 116,000 7,331 7,331 116,000
9 23,156 10,546 10,546 118,000 7,868 7,868 118,000
10 26,414 11,551 11,551 120,000 8,289 8,289 120,000
11 29,834 12,671 12,671 122,000 8,692 8,692 122,000
12 33,426 13,734 13,734 124,000 8,958 8,958 124,000
13 37,197 14,724 14,724 126,000 9,079 9,079 126,000
14 41,157 15,641 15,641 128,000 9,044 9,044 128,000
15 45,315 16,477 16,477 130,000 8,838 8,838 130,000
16 49,681 17,135 17,135 132,000 8,442 8,442 132,000
17 54,265 17,711 17,711 134,000 7,830 7,830 134,000
18 59,078 18,176 18,176 136,000 6,968 6,968 136,000
19 64,132 18,530 18,530 138,000 5,816 5,816 138,000
20 69,439 18,777 18,777 140,000 4,334 4,334 140,000
25 100,227 17,539 17,539 150,000 0 0 0
30 139,522 10,118 10,118 160,000 0 0 0
35 189,673 0 0 0 0 0 0
40 253,680 0 0 0 0 0 0
45 335,370 0 0 0 0 0 0
50 439,631 0 0 0 0 0 0
</TABLE>
-------
(1) For policy years 26 and thereafter, the illustrated net annual rate of
return equals -1.21% on the current basis and -1.46% on the guaranteed
basis.
(2) Assumes a $2,000 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.
(3) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(4) 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. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY JPF SEPARATE ACCOUNT A, 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-20
<PAGE>
Audited Consolidated Financial Statements
Jefferson Pilot Financial Insurance Company and Subsidiaries
As of December 31, 1999 and 1998 and for the two years ended December 31, 1999,
and the eight months ended December 31, 1997
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Audited Consolidated Financial Statements
As of December 31, 1999 and 1998 and for the two years ended December
31, 1999 and the eight months ended December 31, 1997
Contents
Report of Independent Auditors.................................................1
Consolidated Balance Sheets....................................................2
Consolidated Statements of Income..............................................4
Consolidated Statements of Stockholder's Equity................................5
Consolidated Statements of Cash Flows..........................................6
Notes to Consolidated Financial Statements.....................................8
<PAGE>
Report of Independent Auditors
The Board of Directors
Jefferson Pilot Financial Insurance Company and Subsidiaries
We have audited the accompanying consolidated balance sheets of Jefferson Pilot
Financial Insurance Company (a wholly-owned subsidiary of Jefferson-Pilot
Corporation) and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, stockholder's equity, and cash flows for each
of the two years in the period ended December 31, 1999 and for the eight month
period ended December 31, 1997. 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 auditing standards generally accepted
in the United States. 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 Jefferson Pilot
Financial Insurance Company and subsidiaries at December 31, 1999 and 1998, and
the consolidated results of their operations and their cash flows for each of
the two years in the period ended December 31, 1999 and for the eight month
period ended December 31, 1997, in conformity with accounting principles
generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Greensboro, North Carolina
August 1, 2000
1
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Consolidated Balance Sheets
(In Thousands, except for Share Amounts)
<TABLE>
<CAPTION>
Assets December 31,
Invested assets: 1999 1998
-----------------------------------
<S> <C> <C>
Debt securities available-for-sale, at fair value (amortized cost $8,102,384
and $7,029,122) $ 7,827,493 $ 7,305,747
Debt securities held-to-maturity, at amortized cost (fair value $1,762,890 and
$1,862,069) 1,798,897 1,797,798
Equity securities available-for-sale, at fair value (cost $58,615 and $11,475) 55,023 23,631
Policy loans 654,431 1,194,703
Mortgage loans on real estate 1,120,310 772,304
Real estate 41,724 35,897
Other investments 18,749 8,004
-----------------------------------
Total investments 11,516,627 11,138,084
Cash and cash equivalents 156,672 14,663
Accrued investment income 169,244 143,231
Due from reinsurers 1,473,925 1,342,925
Deferred policy acquisition costs 329,513 223,337
Value of business acquired 949,095 568,208
Cost in excess of net assets acquired, net of accumulated amortization
(1999-$12,132; 1998-$9,406) 266,680 192,016
Property and equipment, net of accumulated depreciation (1999-
$53,368; 1998-$56,041) 34,951 16,066
Deferred federal income taxes 123,917 40,528
Assets held in separate accounts 1,483,931 919,493
Other assets 91,581 69,359
-----------------------------------
$16,596,136 $14,667,910
===================================
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Liabilities
Policy liabilities:
Policyholder contract deposits $10,781,694 $10,667,782
Future policy benefits 1,212,866 743,694
Policy and contract claims 173,612 80,832
Premiums paid in advance 2,148 2,851
Other policyholders' funds 243,502 109,102
-----------------------------------------
Total policy liabilities 12,413,822 11,604,261
Payable to affiliates 88,946 124,496
Liabilities related to separate accounts 1,483,931 919,493
Securities sold under repurchase agreements 302,358 150,372
Accrued expenses and other liabilities 255,990 138,194
-----------------------------------------
14,545,047 12,936,816
Commitments and contingencies
Redeemable preferred stock - 3,000
Stockholder's equity
Common stock, par value $5 per share, 600,000 shares authorized, issued
and outstanding 3,000 3,000
Paid in capital 1,714,338 1,288,454
Retained earnings 434,964 330,483
Accumulated other comprehensive income - net unrealized (losses) gains
on securities (101,213) 106,157
-----------------------------------------
2,051,089 1,728,094
-----------------------------------------
$16,596,136 $14,667,910
=========================================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Consolidated Statements of Income
(In Thousands)
<TABLE>
<CAPTION>
Eight months
Year ended ended
December 31, December 31,
1999 1998 1997
-------------------- ------------------- ---------------------
<S> <C> <C> <C>
Revenues
Premiums and policy charges $444,545 $447,388 $328,513
Net investment income 726,928 714,504 515,347
Realized investment (losses) gains (4,333) (355) 5,631
Other income 2,372 3,929 6,413
-------------------- ------------------- ---------------------
Total revenues 1,169,512 1,165,466 855,904
Benefits and expenses
Policy benefits and claims 649,388 675,770 514,470
Commissions and operating
expenses, net of deferrals 54,170 73,581 64,928
Amortization of intangibles 118,368 107,174 63,651
Taxes, licenses and fees 28,335 27,194 18,948
-------------------- ------------------- ---------------------
Total benefits and expenses 850,261 883,719 661,997
-------------------- ------------------- ---------------------
Income before federal income tax and
preferred stock dividends 319,251 281,747 193,907
Federal income tax expense:
Current 69,694 72,868 40,127
Deferred 45,076 28,048 28,623
-------------------- ------------------- ---------------------
114,770 100,916 68,750
-------------------- ------------------- ---------------------
Net income before preferred stock
dividends 204,481 180,831 125,157
Preferred stock dividends - 1,128 2,811
-------------------- ------------------- ---------------------
Net income $204,481 $179,703 $122,346
==================== =================== =====================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Consolidated Statements of Stockholder's Equity
(In Thousands)
<TABLE>
<CAPTION>
Accumulated Other
Comprehensive Income - Total
Common Paid in Retained Net Unrealized (Losses) Stockholder's
Stock Capital Earnings Gains on Securities Equity
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, April 30, 1997 $ - $ - $ - $ - $ -
Purchase of JPFIC by JPCorp 3,000 782,500 - - 785,500
AHL balances at time of affiliation with
JPFIC - 532,388 98,434 (39,249) 591,573
Net income, eight months - - 122,346 - 122,346
Other comprehensive income - - - 128,801 128,801
----------------------------------------------------------
Comprehensive income 251,147
----------------------------------------------------------------------------------------
Balance, December 31, 1997 3,000 1,314,888 220,780 89,552 1,628,220
Net income - - 179,703 - 179,703
Other comprehensive income - - - 16,605 16,605
----------------------------------------------------------
Comprehensive income 196,308
Less dividends paid - - (70,000) - (70,000)
Purchase price adjustment - (26,434) - - (26,434)
----------------------------------------------------------------------------------------
Balance, December 31, 1998 3,000 1,288,454 330,483 106,157 1,728,094
Net income - - 204,481 - 204,481
Other comprehensive income - - - (207,370) (207,370)
----------------------------------------------------------
Comprehensive income (2,889)
Less dividends paid - - (100,000) - (100,000)
Acquisition of GLIC - 425,884 - - 425,884
----------------------------------------------------------------------------------------
Balance, December 31, 1999 $ 3,000 $ 1,714,338 $ 434,964 $ (101,213) $2,051,089
========================================================================================
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Eight months
Year ended ended
December 31, December 31,
1999 1998 1997
-----------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net income $204,481 $179,703 $122,346
Adjustments to reconcile net income to
net cash provided by operating activities:
Change in future policy benefits, policy and
contract claims and premiums paid in advance, net 6,635 (103,826) 15,614
Credits to policyholder accounts, net 52,210 79,661 192,962
Policy acquisition costs deferred,
net of amortization (106,175) (91,387) (47,202)
Net amortization of value of
business acquired 59,607 47,704 (3,159)
Change in accrued investment income (6,250) (2,902) 704
Realized investment losses (gains) 4,333 355 (5,631)
Amortization of investment
premium 14,498 20,905 24,552
Provision for depreciation 6,417 10,737 1,210
Provision for deferred income tax 45,076 28,048 28,623
Change in receivables and asset accruals 5,800 (27,420) 75,840
Change in payables and expense accruals 59,476 73,872 (32,857)
Other operating activities, net (6,629) (16,878) 22,223
-----------------------------------------------------
Net cash provided by operating activities 339,479 198,572 395,225
-----------------------------------------------------
Investing activities
Proceeds from sales of debt securities 693,010 356,442 526,259
Proceeds from maturities of debt securities 978,645 994,576 551,720
Proceeds from sales of equity securities 2,616 11,294 10,386
Purchases of debt securities (1,567,094) (1,347,301) (1,042,253)
Purchases of equity securities (11,354) (13,805) (322)
Mortgage loans originated (279,375) (260,915) (323,058)
Repayments of mortgage loans 40,859 79,556 40,001
Policy loans issued, net of repayments (22,168) (12,004) 15,683
Other investing activities, net 5,896 6,996 1,405
-----------------------------------------------------
Net cash used in investing activities (158,965) (185,161) (220,179)
-----------------------------------------------------
</TABLE>
6
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(In Thousands)
<TABLE>
<CAPTION>
Eight months
Year ended ended
December 31, December 31,
1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C>
Financing activities
Deposits credited to policyholders' funds 834,017 902,909 763,509
Withdrawals from policyholders' funds (965,290) (966,006) (855,580)
Dividends paid (100,000) (70,000) -
Proceeds from securities sold under
repurchase agreements 151,986 150,593 (44,958)
Other financing activities (4,184) (53,068) (43,301)
-----------------------------------------------------------
Net cash used in financing activities (83,471) (35,572) (180,330)
-----------------------------------------------------------
Change in cash and cash equivalents 97,043 (22,161) (5,284)
Cash of GLIC at date of acquisition 44,966 - -
Cash and cash equivalents, beginning
of period 14,663 36,824 42,108
-----------------------------------------------------------
Cash and cash equivalents, end of period $ 156,672 $ 14,663 $ 36,824
===========================================================
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements
1. Basis of Presentation
Principles of Consolidation
The consolidated financial statements presented herein represent the merger of
three insurance companies that previously were affiliated through a common
parent. The merger (reorganization of affiliates) under the common parent has
been accounted for on a basis similar to a pooling-of-interests utilizing the
parent's historical basis. The historical accounting basis includes the "pushed
down" effect of purchase accounting utilized by the common parent to the three
individual companies. The merger was effective August 1, 2000, and included no
additional consideration. The parties to the merger include Jefferson Pilot
Financial Insurance Company (the Company or JPFIC), the survivor in the
reorganization, acquired by the common parent Jefferson-Pilot Corporation
(JPCorp) effective April 30, 1997, Alexander Hamilton Life Insurance Company of
America (AHL), acquired by JPCorp in 1995 and Guarantee Life Insurance Company
(GLIC), a wholly-owned subsidiary of The Guarantee Life Companies, Inc., (TGLCI)
which was acquired by JPCorp effective December 30, 1999. The financial
statements presented include the periods for which each of three companies were
affiliated through common ownership by JPCorp. JPFIC is the survivor company,
and therefore, the related statements of income, stockholder's equity and cash
flows are presented only for the period in which JPCorp owned the Company.
Significant intercompany transactions have been eliminated in consolidation.
Nature of Business
After the merger, the Company is wholly-owned by JPCorp. The merged Company and
subsidiaries are principally engaged in the sale of individual life insurance
products, individual annuity products, individual investment products, and
worksite and group non-medical products (primarily term life and disability).
These products are marketed primarily through personal producing general agents
throughout the Unites States.
Acquisitions
JPCorp acquired the Company on May 13, 1997, with an effective date of April 30,
1997. The acquisition was accounted for as a purchase, utilizing "push down"
accounting, and the assets and liabilities were recorded at fair value as of
April 30, 1997. The original cost of the acquisition as of April 30, 1997 was
$785 million, including all acquisition costs. Subsequent adjustments to the
original purchase price in 1998 resulted in a downward adjustment of the
purchase price to $759 million. The amount allocated to value of business
acquired and cost in excess of net assets acquired was $460 million and $100
million, respectively.
8
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Basis of Presentation (continued)
Acquisitions (continued)
AHL was acquired by JPCorp on October 1, 1995, and included substantially all of
the life insurance and single premium deferred annuity contracts in force as of
the acquisition date. Certain blocks of business including structured
settlements, lottery business and Corporate Owned Life Insurance (COLI) written
prior to the acquisition as well as certain business written in conjunction with
the seller's lending business were 100% reinsured with affiliates of the seller
on a coinsurance basis. The aggregate purchase was $575 million including all
acquisition costs. The value of business acquired resulting from this
acquisition amounted to $325 million while cost in excess of net assets acquired
came to $50 million.
GLIC was acquired by JPCorp through the acquisition of its parent on December
30, 1999 for an aggregate purchase price of $426 million. The preliminary amount
allocated to value of business acquired and cost in excess of net assets
acquired was $206 million and $81 million, respectively.
The following proforma results of operations for the year ended December 31,
1999, assume that the GLIC acquisition occurred as of January 1, 1999. 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, 1999, or which may occur in
the future (in thousands):
Net revenues $1,665,614
Net income $ 207,136
9
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies
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 are classified as either securities held-to-maturity, stated at
amortized cost, or as securities available-for-sale, stated at fair value with
net unrealized gains and losses included in accumulated other comprehensive
income, net of deferred income taxes and adjustments to deferred policy
acquisition costs and value of business acquired.
Equity securities are classified as securities available-for-sale, stated at
fair value with net unrealized gains and losses included in accumulated other
comprehensive income, net of deferred income taxes and adjustments to deferred
policy acquisition costs and value of business acquired.
Policy loans are carried at the unpaid balances.
10
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Invested Assets (continued)
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 (28%) and (33%), apartment (20%) and (18%), industrial (24%) and (17%),
hotel (11%) and (14%), and office (17%) and (16%) properties at December 31,
1999 and 1998, respectively.
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,
1999 and 1998, 29% and 28% are due from borrowers in South Atlantic states, 24%
and 28% are due from borrowers in West South Central states, 10% and 10% are due
from borrowers in West North Central states, 11% and 7% are due from borrowers
in East North Central states, 10% and 7% are due from borrowers in Pacific
states, and 10% and 12% are due from borrowers in Mountain states. No other
geographic region represents as much as 10% of December 31, 1999 and 1998
mortgage loans.
Amortization of premiums and accrual of discounts on investments in debt
securities are reflected in earnings over the contractual terms of the
investments in a manner that produces a constant effective yield. Realized gains
and losses on dispositions of securities are determined by the specific
identification method.
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
11
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Recognition of Revenues, Benefits, Claims and Expenses (continued)
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 accounts 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.
Investment Products
Investment products include variable annuities, fixed premium annuities,
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.
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. 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.
Interest Rate Assumptions
The liability for future policy benefits associated with ordinary life insurance
policies has been determined using initial interest rate assumptions ranging
from 2% to 9.9% and, when applicable, uniform grading over 20 to 30 years to
ultimate rates ranging from 2% to 6%.
12
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Recognition of Revenues, Benefits, Claims and Expenses (continued)
Credited interest rates for universal life-type products ranged from 4.1% to
6.6% in 1999, 3.8% to 6.85% in 1998, and 4% to 7.5% in 1997. The average
credited interest rates for universal life-type products were 5.28%, 5.96% and
6.25% for 1999, 1998 and 1997. For annuity products, credited interest rates
generally ranged from 4% to 6% in 1999, 1998, and 1997.
Accident and health and disability 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.
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 and Value of Business Acquired
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.
13
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Deferred Policy Acquisition Costs and Value of Business Acquired (continued)
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 interest and a constant
amortization rate based on the present value of expected future profits.
The carrying amounts of deferred policy acquisition costs and value of business
acquired related to universal life and investment contracts 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
accumulated other comprehensive income, net of applicable deferred income tax.
The carrying amounts of deferred policy acquisition costs and value of business
acquired are also adjusted for the effect of realized gains and losses.
The carrying amounts of deferred policy acquisition costs and value of business
acquired 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.
Cost in Excess of Net Assets Acquired
The excess of JPCorp's purchase price over the fair value of assets acquired,
which has been "pushed down" to the Company level for financial reporting
purposes, is being amortized on a straight-line basis over 25 to 35 years.
Carrying amounts are regularly reviewed for indications of value impairment,
with consideration given to financial performance and other relevant factors.
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.
14
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Federal Income Taxes
For each of the periods presented, each of the insurance companies, JPFIC, AHL
and TGLCI, have filed separate consolidated tax returns with their wholly-owned
subsidiaries.
Deferred income tax assets and liabilities 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
Effective January 1, 2001, the Company will adopt SFAS 133, "Accounting for
Derivative Instruments and for Hedging Activities". SFAS 133 requires companies
to recognize all derivatives on the balance sheet at fair value and establishes
special accounting rules for hedging activities. The effect of the hedge
accounting rules is to permit a company to offset changes in fair value or cash
flows of both the hedged item and hedging instrument in earnings in the same
period. Changes in the fair value of derivatives that do not qualify for hedge
accounting are reported in earnings in the period of the change. Based on the
limited nature of the Company's use of derivatives and hedging activities,
adoption of this pronouncement is not expected to have a material impact on the
Company's financial position or results of operations.
15
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Invested Assets
Aggregate amortized cost, aggregate fair value and gross unrealized gains and
losses of debt securities were as follows (in thousands):
<TABLE>
<CAPTION>
December 31, 1999
------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available-for-sale carried
at fair value
U.S. Treasury obligations and direct
obligations of U.S. government
agencies $ 156,185 $ 439 $ (275) $ 156,349
Corporate bonds 5,116,508 8,135 (211,387) 4,913,256
Obligations of states and political
subdivisions 7,582 - (883) 6,699
Mortgage-backed securities 2,809,367 9,564 (80,794) 2,738,137
Redeemable preferred stocks 12,742 381 (71) 13,052
------------------------------------------------------------------------
Total debt securities $8,102,384 $18,519 $(293,410) $7,827,493
========================================================================
Held-to-maturity carried
at amortized cost
U.S. Treasury obligations and
direct obligations of U.S.
government agencies $ 6,616 $ - $ - $ 6,616
Corporate bonds 1,735,122 1,999 (37,650) 1,699,471
Obligations of states and
political subdivisions 11,091 - - 11,091
Mortgage-backed securities 2,985 - - 2,985
Affiliate bonds 43,083 3 (359) 42,727
------------------------------------------------------------------------
Total debt securities $1,798,897 $2,002 $(38,009) $1,762,890
========================================================================
</TABLE>
16
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Invested Assets (continued)
<TABLE>
<CAPTION>
December 31, 1998
---------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Available for sale carries
at fair value
U.S. Treasury obligations
and direct obligations of
U.S. government agencies $ 127,215 $ 6,425 $ - $ 133,640
Corporate bonds 4,194,389 202,304 (31,262) 4,365,431
Obligations of states and
political subdivisions 12,225 97 (165) 12,157
Mortgage-backed securities 2,681,474 104,692 (6,599) 2,779,567
Redeemable preferred stocks 13,819 1,154 (21) 14,952
----------------- ---------------- ---------------- -----------------
Total debt securities $7,029,122 $ 314,672 $ (38,047) $7,305,747
================= ================ ================ =================
Held to maturity carried
at amortized cost
Corporate bonds $1,752,631 $63,498 $ (2,235) $1,813,894
Affiliate bonds 45,167 3,008 - 48,175
----------------- ---------------- ---------------- -----------------
Total debt securities $1,797,798 $ 66,506 $ (2,235) $1,862,069
================= ================ ================ =================
</TABLE>
Affiliate bonds consist of securities issued by Jefferson-Pilot Communications
Company, an affiliate. Interest earned on these bonds totaled $3.1 million, $3.3
million and $2.9 million in 1999, 1998 and 1997, respectively.
17
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Invested Assets (continued)
Aggregate amortized cost and aggregate fair value of debt securities at December
31, 1999 by contractual maturity were as follows (in thousands):
<TABLE>
Available-for-Sale Held-to-Maturity
----------------------------------------------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
----------------------------------------------------------------
<S> <C> <C> <C> <C>
Due in one year or less $ 178,084 $ 178,114 $ 222,498 $ 222,543
Due after one year through five years 1,197,090 1,181,542 726,094 716,731
Due after five years through ten years 1,761,089 1,681,859 189,634 183,210
Due after ten years 963,539 922,923 123,780 121,722
Amounts not due at a single maturity date 4,002,582 3,863,055 536,891 518,684
----------------------------------------------------------------
$8,102,384 $7,827,493 $1,798,897 $1,762,890
================================================================
</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.
The sources of net investment income were as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
----------------------------------------------------------------
<S> <C> <C> <C>
Debt securities $648,201 $647,093 $470,786
Equity securities 2,817 2,710 3,477
Policy loans 27,098 24,598 16,086
Mortgage loans 71,170 53,549 28,851
Other 7,086 11,316 9,439
----------------------------------------------------------------
Gross investment income 756,372 739,266 528,639
Investment expenses 29,444 24,762 13,292
----------------------------------------------------------------
Net investment income $726,928 $714,504 $515,347
================================================================
</TABLE>
18
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Invested Assets (continued)
Realized investment gains and (losses) were as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
-----------------------------------------------------------
<S> <C> <C> <C>
Debt securities $(4,932) $ 7,679 $ 4,826
Equity securities (95) 2,899 1,534
Real estate 157 1,640 532
Increase in mortgage loan valuation allowance (411) (9,800) -
Amortization of value of business acquired
and deferred policy acquisition costs 1,643 (2,365) (444)
Other (695) (408) (817)
------------------------------------------------------------
$(4,333) $ (355) $ 5,631
============================================================
</TABLE>
Information about gross realized gains and losses on available-for-sale
securities transactions is as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
----------------- ------------------- -------------------
<S> <C> <C> <C>
Gross realized:
Gains $ 6,786 $17,299 $15,388
Losses (12,354) (7,247) (8,699)
----------------- ------------------- -------------------
Net realized (losses) gains on available-for-
sale securities $ (5,568) $10,052 $ 6,689
================= =================== ===================
</TABLE>
19
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Invested Assets (continued)
The changes in unrealized gains and (losses) on securities classified as
available-for-sale for the Company were as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
--------------------------------------------------------------
<S> <C> <C> <C>
Change in equity securities $ (1,902) $ (1,697) $ 3,842
Change in debt securities (551,516) 44,398 315,835
Change in value of business acquired
adjustment 234,387 (17,156) (121,522)
--------------------------------------------------------------
(319,031) 25,545 198,155
Deferred income taxes 111,661 (8,940) (69,354)
--------------------------------------------------------------
Change in net unrealized gains $(207,370) $ 16,605 $ 128,801
==============================================================
</TABLE>
The Company participates in a securities lending program. The Company generally
receives cash collateral in an amount that is in excess of the market value of
the securities loaned. Market values of securities loaned and collateral are
monitored daily, and additional collateral is obtained as necessary. At December
31, 1999, the market value of securities loaned and collateral received amounted
to $59.7 million and $63.1 million, respectively. At December 31, 1998, the
market value of securities loaned and collateral received amounted to $99.7
million and $104.3 million, respectively.
The allowance for credit losses on mortgage loans increased from $0 at April 30,
1997 to $9.8 million at December 31, 1998 to $10.2 million at December 31, 1999.
20
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Derivatives
Use of Derivatives
The Company's investment policy permits the use of derivative financial
instruments such as interest rate swaps in certain circumstances. The following
summarizes open interest rate swaps at December 31 (in thousands):
<TABLE>
<CAPTION>
1999 1998
------------------ --- ------------------
<S> <C> <C>
Received-fixed swaps held as hedges of direct
investments
Notional amount $137,440 $137,440
Average rate received 7.28% 7.28%
Average rate paid 5.62% 5.55%
Received-fixed swaps held to modify annuity
crediting rates
Notional amount $17,500 $17,500
Average rate received 6.78% 6.78%
Average rate paid 5.33% 5.31%
</TABLE>
Hedging Direct Investments
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 swaps 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 accumulated other comprehensive income in stockholder's
equity as of December 31, 1999 and 1998.
21
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Derivatives (continued)
Modifying Annuity Crediting Rates
Interest rate swaps are used to modify the interest characteristics of certain
blocks of annuity contract deposits. Interest is exchanged periodically on the
notional value, with the Company receiving a fixed rate and paying various
short-term LIBOR rates on a net exchange basis. The net amount received or paid
under these swaps is reflected as an adjustment to annuity benefits.
Hedging Equity Indexed Annuity Crediting Rates
GLIC marketed an equity indexed annuity product which has an equity market
component, where interest credited to the contracts is linked to the performance
of the S&P 500 index. GLIC historically managed this risk by purchasing call
options that mirrored the interest credited to the contracts. As of December 31,
1999, the fair value of these options totaled $5 million. The fair value equaled
the carrying value due to the mark-to-market adjustment made to GLIC's assets as
of the acquisition date.
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.
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 is terminated or loses
correlation, any related hedging instrument that remained would be
marked-to-market through income. If the hedging instrument is terminated, any
gain or loss is deferred and amortized over the remaining life of the hedged
asset.
22
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Deferred Policy Acquisition Costs and Value of Business Acquired
Policy acquisition costs deferred and the related amortization charged to income
were as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
------------------------------------------------------
<S> <C> <C> <C>
Beginning balance $ 223,337 $ 132,215 $ -
AHL balance at time of affiliation with JPFIC - - 64,658
Deferral:
Commissions 104,033 78,759 49,865
Other 30,801 29,960 23,218
------------------------------------------------------
134,834 108,719 73,083
Amortization (29,273) (17,332) (5,526)
Adjustment related to realized losses (gains) on debt
securities 615 (265) -
------------------------------------------------------
Ending balance $ 329,513 $ 223,337 $132,215
======================================================
</TABLE>
Changes in the value of business acquired were as follows (in thousands):
<TABLE>
<CAPTION>
Eight months
ended
Year ended December 31, December 31,
1999 1998 1997
-----------------------------------------------------
<S> <C> <C> <C>
Beginning balance $568,208 $622,438 $ -
Purchase of JPFIC by JPCorp. - - 481,600
AHL balance at time of affiliation with JPFIC - - 279,556
Deferral of commissions and accretion
of interest 22,142 37,281 36,809
Amortization (82,778) (83,518) (53,561)
Adjustment related to purchase accounting
adjustments 206,108 11,263 -
Adjustment related to realized losses (gains) on
debt securities 1,028 (2,100) (444)
Adjustment related to unrealized losses (gains) on
securities available-for-sale 234,387 (17,156) (121,522)
-----------------------------------------------------
Ending balance $949,095 $568,208 $ 622,438
=====================================================
</TABLE>
23
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Deferred Policy Acquisition Costs and Value of Business Acquired (continued)
Expected approximate amortization percentages of the value of business acquired
as of December 31, 1999 over the next five years were as follows:
<TABLE>
<CAPTION>
Year ending December 31:
<S> <C>
2000 9.8%
2001 8.7%
2002 7.8%
2003 7.1%
2004 6.4%
</TABLE>
6. Federal Income Taxes
The tax effects of temporary differences that gave rise to deferred income tax
assets and liabilities are as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1999 1998
-----------------------------------
<S> <C> <C>
Deferred income tax assets:
Difference in policy liabilities $ 253,904 $ 266,372
Net unrealized losses on securities 54,699 -
Obligation for postretirement benefits 650 -
Depreciation differences - 2,263
Deferred compensation 20,577 19,445
Differences in investment basis 7,754 -
Other deferred tax assets 80,677 38,186
-----------------------------------
Gross deferred tax assets 418,261 326,266
Deferred income tax liabilities:
Net unrealized gains on securities - (57,162)
Deferral of policy acquisition costs and value of business acquired (251,052) (184,861)
Deferred gain recognition for income tax purposes - (11,115)
Obligation for postretirement benefits - (40)
Depreciation differences (3,678) -
Other deferred tax liabilities (39,614) (32,560)
-----------------------------------
Gross deferred tax liabilities (294,344) (285,738)
-----------------------------------
Net deferred income tax assets $ 123,917 $ 40,528
===================================
</TABLE>
24
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. Federal Income Taxes (continued)
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 $15.8 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 Clinton
administration is proposing to tax, as part of its 2001 budget initiative, the
"Policyholders' Surplus" over a five-year period. No related deferred tax
liability has been recognized for the potential tax which would approximate $5.5
million under current proposed rates.
Federal income taxes paid in 1999 and 1998 were $52 million and $70 million,
respectively. Federal income taxes paid in the eight month period ended December
31, 1997 were $47 million.
7. Retirement Benefit Plans
Pensions
The Company's employees participate in JPCorp's defined benefit pension plans
covering substantially all employees. The plans are noncontributory and are
funded through group annuity contracts issued by Jefferson-Pilot Life Insurance
Company, an affiliate. The assets of the plan are those of the related
contracts, and are primarily held in the separate accounts of Jefferson-Pilot
Life Insurance Company. The plans provide benefits based on annual compensation
and years of service. The funding policy is to contribute annually no more than
the maximum amount deductible for federal income tax purposes. The plans are
administered by JPCorp. Pension expense for all years presented was not
significant.
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. The Company contributes to a welfare benefit trust from
which future benefits will be paid. The Company accrues the cost of providing
postretirement benefits other than pensions during the employees' active service
period. Plan expense for all years presented was not significant.
Defined Contribution Plans
Defined contribution retirement plans cover most employees and full time agents.
The Company matches a portion of participant contributions and makes profit
sharing contributions to a fund that acquires and holds shares of JPCorp's
common stock. Most plan assets are invested under a group variable annuity
contract issued by Jefferson-Pilot Life Insurance Company. Plan expense for all
years presented was not significant.
25
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Commitments and Contingent Liabilities
The Company leases electronic data processing equipment and field office space
under noncancelable operating lease agreements. The lease terms generally range
from three to five years. Neither annual rent nor future rental commitments are
significant.
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 $4.5 million as of December 31, 1999.
The Company is a defendant in a proposed class action suit. The suit alleges
deceptive practices, fraudulent and negligent misrepresentation and breach of
contract in the sale of certain life insurance policies using policy
illustrations which plaintiffs claim were misleading. Unspecified compensatory
and punitive damages, costs and equitable relief are sought in the case. While
management is unable to make a meaningful estimate of the amount or range of
loss that could result from an unfavorable outcome in the case, management
believes that it has made appropriate disclosures to policyholders as a matter
of practice, and intends to vigorously defend its position.
In the normal course of business, the Company and its subsidiaries are parties
to various lawsuits. Because of the considerable uncertainties that exist, the
Company cannot predict the outcome of pending or future litigation. However,
management believes that the resolution of pending legal proceedings will not
have a material adverse effect on the Company's financial position or liquidity,
although it could have a material adverse effect on the results of operations
for a specific period.
9. 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 $1.5 million.
26
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Reinsurance (continued)
The effect of reinsurance in the consolidated statements of income for the year
ended December 31, 1999 was as follows (in thousands):
<TABLE>
<CAPTION>
Eight months ended
Year ended December 31, December 31,
1999 1998 1997
-------------------------------------------------------
<S> <C> <C> <C>
Direct premiums and other considerations $561,978 $557,495 $370,897
Less premiums and other
considerations ceded 118,336 140,998 43,588
Plus premiums and other
considerations assumed 903 30,891 1,204
-------------------------------------------------------
Net premiums and other
considerations $444,545 $447,388 $328,513
=======================================================
Policy benefits and claims ceded $232,886 $263,789 $ 89,643
=======================================================
</TABLE>
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 any
period presented.
The Company reinsured 100% of the Periodic Payment Annuities (PPA), COLI and
Affiliated credit insurance business written prior to the AHL acquisition by
JPCorp in 1995 with affiliates of Household International, Inc. on a coinsurance
basis. Balances are settled monthly, and the Company is compensated by the
reinsurers for administrative services related to the reinsured business. The
amounts due from reinsurers in the consolidated balance sheets include $1,080
million and $1,057 million due from the Household affiliates at December 31,
1999 and 1998.
27
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Reinsurance (continued)
Assets related to the reinsured PPA and COLI business have been placed in
irrevocable trusts formed to hold the assets for the benefit of the Company and
are subject to investment guidelines which identify (1) the types and standards
of securities in which new investments are permitted, (2) prohibited new
investments, (3) individual credit exposure limits and (4) portfolio
characteristics. Household has unconditionally and irrevocably guaranteed, as
primary obligor, full payment and performance by its affiliated reinsurers. The
Company has the right to terminate the PPA and COLI reinsurance agreements by
recapture of the related assets and liabilities if Household does not take a
required action under the guarantee agreements within 90 days of a triggering
event. The Company has the option to terminate the PPA and COLI reinsurance
agreements on the seventh anniversary of the acquisition, by recapturing the
related assets and liabilities at an agreed-upon price or their then current
fair values as independently determined.
As of December 31, 1999 and 1998, the Company had a reinsurance recoverable of
$87 million and $95 million, respectively, from a another reinsurer, pursuant to
a 50% coinsurance agreement. The Company and the reinsurer are joint and equal
owners in $191 million of securities and short-term investments as of December
31, 1999 and 1998, respectively, 50% of which is included in investments in the
accompanying consolidated balance sheets.
10. Statutory Financial Information
The Company prepares financial statements on the basis of statutory accounting
practices (SAP) prescribed or permitted by the Nebraska 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.
28
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Statutory Financial Information (continued)
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 (including GLIC at December
31, 1999 only) at December 31, 1999 and 1998 was $874 million and $651 million.
Reported statutory net income (excluding GLIC) for the years ended December 31,
1999 and 1998 was $198 million and $191 million, respectively, and for the eight
months ended December 31, 1997 was $95 million.
Prior to the acquisition of GLIC by JPCorp, GLIC converted from a mutual form to
a stock life company. In connection with that conversion, GLIC agreed to
segregate certain assets to provide for dividends on participating policies
using dividend scales in effect at the time of the conversion, providing that
the experience underlying such scales continued. The assets, including the
revenue therefrom, allocated to the participating policies will accrue solely to
the benefit of those policies. At December 31, 1999, the assets and liabilities
relating to these participating policies amounted to $332 million and $371
million. The excess of liabilities over the assets represents the total
estimated future earnings expected to emerge from these participating policies.
29
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Statutory Financial Information (continued)
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.
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, insurance risk, interest rate risk and
general business risk. As of December 31, 1999, JPFIC, AHL, and GLIC each had
adjusted capital and surplus that exceeded authorized control level RBC.
The NAIC Codification of Statutory Accounting Principles (Codification) has been
completed. The purpose of Codification is to create uniformity in statutory
financial reporting across states. Codification must be adopted by individual
states before it will have any bearing on the statutory reporting requirements
of their domiciliary companies. The NAIC is encouraging the states to adopt
Codification as soon as possible, with an implementation date of January 1,
2001. The Company does not expect implementation to have a material impact on
its statutory surplus; however, implementation is expected to result in a net
reduction of statutory surplus and RBC throughout the insurance industry.
11. Transactions with Affiliated Companies
The Company has entered into service agreements with JPCorp and other
subsidiaries of JPCorp for personnel and facilities usage, general management
services and investment management services. The Company expensed $75.7 million,
$83.3 million, and $73.8 million in 1999, 1998, and the eight months ended
December 31, 1997 for general management and investment services provided by
Jefferson-Pilot Life Insurance Company, another wholly-owned subsidiary of
JPCorp of which $55.9 million and $60.7 million remained payable as of December
31, 1999 and 1998, respectively. The remainder of the payable to affiliates at
year end was due to other affiliates.
30
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. 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:
o 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.
o Fair values of equity securities are based on quoted market prices.
o The carrying value of cash and cash equivalents approximates fair
value due to the short maturities of these assets.
o Fair values of policy loans and mortgage loans are estimated using
discounted cash flow analyses.
o Fair values of separate account assets and liabilities are reflected
in the consolidated balance sheets.
o Annuity contracts do not generally have defined maturities. Therefore,
fair values of the liabilities under annuity contracts, the carrying
amounts of which are included with policyholder contract deposits in
the consolidated balance sheets, are estimated to equal the cash
surrender values of the contracts.
o Fair value of the Company's redeemable preferred stock approximates
its stated amount because its dividend rate is adjustable.
o Fair values of securities sold under repurchase agreements approximate
carrying values, which include accrued interest.
31
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Fair Values of Financial Instruments (continued)
The carrying value and fair value of financial instruments were as follows (in
thousands):
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
-----------------------------------------------------------------
Carrying Fair Carrying Fair
Value Value Value Value
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial Assets
Debt securities available-for-sale $7,827,862 $7,827,862 $7,295,526 $7,295,526
Interest rate swaps available-for-sale (369) (369) 10,221 10,221
Debt securities held-to-maturity 1,798,897 1,763,127 1,797,798 1,860,736
Interest rate swaps held-to-maturity - (237) - 1,333
Equity securities available-for-sale 55,023 55,023 23,631 23,631
Cash and cash equivalents 156,672 156,672 14,663 14,663
Policy loans 654,431 714,121 1,194,703 1,238,437
Mortgage loans on real estate 1,120,310 1,064,177 772,304 814,707
Financial Liabilities
Annuity contracts in accumulation phase 2,969,170 2,904,528 3,275,463 3,184,119
Redeemable preferred stock - - 3,000 3,000
Securities sold under repurchase agreements 302,358 302,358 150,372 150,372
</TABLE>
Securities sold under repurchase agreements with a single counterparty, Credit
Suisse First Boston Corporation, totaled $149 million at December 31, 1999, and
had maturity dates ranging from January to March, 2000.
32
<PAGE>
Jefferson Pilot Financial Insurance Company and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Other Comprehensive Income
Comprehensive income and its components are displayed in the accompanying
statements of stockholder's equity. Currently, the only element of other
comprehensive income applicable to the Company is changes in unrealized gains
and losses on securities classified as available-for-sale, which are displayed
in the following table, along with related tax effects. See Note 3 for further
detail of changes in unrealized gains on securities available-for-sale (in
thousands):
<TABLE>
<CAPTION>
Eight months
ended
December 31,
Year ended December 31, 1997
------------------------------------------------------
1999 1998
------------------------------------------------------
<S> <C> <C> <C>
Unrealized holding (losses) gains arising during
period, before taxes $(322,415) $ 33,758 $204,071
Income taxes 112,845 (11,815) (71,425)
------------------------------------------------------
Unrealized holding (losses) gains arising during
period, net of taxes (209,570) 21,943 132,646
Less reclassification adjustment:
(Losses) gains realized in net income, before taxes (3,384) 8,213 5,916
Income taxes 1,184 (2,875) (2,071)
------------------------------------------------------
Reclassification adjustment for (losses) gains
realized in net income (2,200) 5,338 3,845
------------------------------------------------------
Other comprehensive income - net unrealized (losses) gains $(207,370) $ 16,605 $128,801
======================================================
</TABLE>
14. Impact of Year 2000 (Unaudited)
The Company's administrative and financial reporting systems are shared among
numerous insurance affiliates within the consolidated Jefferson-Pilot
Corporation group. In prior years, JPCorp discussed the nature and progress of
its plans to become Year 2000 ready. In late 1999, JPCorp completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, JPCorp experienced no significant disruptions in
critical information technology systems and believes those systems successfully
responded to the Year 2000 date change. JPCorp expensed approximately $20.6
million to date in connection with remediating its systems. JPCorp is not aware
of any material problems resulting from Year 2000 issues, either with its
products, its internal systems, or the products and services of third parties.
JPCorp will continue to monitor its critical computer applications and those of
its vendors throughout the Year 2000 to ensure that any latent Year 2000 matters
that arise are addressed promptly.
33
<PAGE>
Jefferson Pilot Financial Insurance Company
Unaudited Pro Forma Condensed Consolidated Statements of Income
Introduction
On December 30, 1999, Jefferson-Pilot Corporation, the parent company of
Jefferson Pilot Financial Insurance Company (JPFIC) acquired Guarantee Life
Insurance Company (GLIC) through the acquisition of GLIC's parent. The
acquisition was accounted for using the purchase method. Accordingly, no results
of operations for GLIC for 1999 or before are included in the audited JPFIC
financial statements included in this document. The following pro forma
condensed consolidated statements of income have been prepared assuming the
acquisition of GLIC had taken place on January 1, 1999.
The total purchase price paid for GLIC was $426 million, including debt assumed
of GLIC's parent. Preliminary estimates of the allocation of the purchase price
to GLIC's tangible and intangible assets and liabilities resulted in $81 million
of cost in excess of net assets acquired and $206 million of value of business
acquired.
The pro forma adjustments include adjustments for financing costs of GLIC,
investment differences and the changes resulting from the intangibles relating
from purchase accounting adjustments. The parent company does not allocate
interest costs to the operating subsidiaries, and therefore, no adjustments for
the interest cost associated with the acquisition are reflected in these
statements. There are also no adjustments relating to expected savings in
expenses from either personnel or efficiencies of operations shown in these pro
forma statements.
<PAGE>
Jefferson Pilot Financial Insurance Company
Unaudited Pro Forma Condensed Consolidated Statements of Income
Year Ended December 31, 1999
(Dollars in thousands)
<TABLE>
<CAPTION>
REVENUE: JPFIC GLIC Adjustments Pro Forma
------------- -------------- -------------------- ----------------
<S> <C> <C> <C> <C>
Premium and other considerations $ 444,545 $393,439 $ (12,092) (5) $ 825,892
Net investment income 726,928 85,258 776 (1) 812,962
Realized investment gains (losses) (4,333) (381) (4,714)
Other income 2,372 29,102 31,474
------------- -------------- -------------- ----------------
1,169,512 507,418 (11,316) 1,665,614
BENEFITS AND EXPENSES:
Policy benefits 649,388 316,713 (10,020) (5) 956,081
Commissions and operating expenses,
net of deferrals 82,505 108,649 (7,518) (1)
298 (4) 183,934
Amortization of intangibles 118,368 79,677 (79,677) (2)
68,381 (3)
11,954 (3)
2,314 (3) 201,017
------------- -------------- -------------- ----------------
850,261 505,039 (14,268) 1,341,032
Income before income taxes 319,251 2,379 2,952 324,582
Provision for income taxes 114,770 833 1,843 (6) 117,446
------------- -------------- -------------- ----------------
Net income $ 204,481 $ 1,546 $ 1,109 $ 207,136
============= ============== ============== ================
</TABLE>
See notes to Unaudited Pro Forma Condensed Consolidated Statements of Income
<PAGE>
Jefferson Pilot Financial Insurance Company
Notes to Unaudited Pro Forma Condensed Consolidated Statements of Income
Year Ended December 31, 1999
(Dollars in thousands)
Background Information:
No pro forma balance sheet information is provided as the December 31, 1999
balance sheet is presented with the purchase accounting adjustments already
made.
<TABLE>
<S> <C>
Note 1 - Adjustment to increase investment income and reduce GLIC interest
expense
Increase in investment income from amortization of market value
adjustment of invested assets 776
Decrease in interest expense of GLIC due to pay off of debt (reflected as operating expense) 7,518
-----------------
8,294
Note 2 - Adjustment to reduce historical amortization of intangible assets
Decrease in amortization of deferred acquisition costs 79,677
Note 3 - Adjustments to record amortization of purchase accounting adjustments
to intangible assets
Amortization of deferred acquisition costs associated with costs deferred
subsequent to January 1, 1999 (68,381)
Amortization of the value of business acquired over the related
contract periods (11,954)
Amortization of the cost in excess of net assets acquired
over a 35 year period (2,314)
-----------------
(82,649)
Note 4 - Adjustment to record additional depreciation expense on purchase
accounting adjustments
Depreciation expense on properties (298)
Note 5 - Adjustment to remove the impact of AGL Life Assurance Company (AGL)
from 1999 operating results, as GLIC sold AGL prior to Jefferson-Pilot
Corporation's acquisition of GLIC
Decrease in revenue ( reflected as premiums and other considerations) (12,092)
Decrease in expenses ( reflected as policy benefits) 10,020
-----------------
(2,072)
Note 6 - Pro forma income tax effect of the foregoing adjustments based on the
statutory tax rate of 35%, except that the amortization of cost in
excess of net assets acquired is not tax effected
Federal income tax expense 1,843
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Contractholders of JPF Separate Account A
JPF Separate Account A
The Board of Directors, JPF Separate Account A
We have audited the accompanying statements of assets and liabilities of the JPF
Separate Account A as of December 31, 1999, and the related statements of
operations and changes in net assets for each of the periods indicated therein.
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 the auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the fund managers. 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 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 JPF Separate Account A at
December 31, 1999, and the results of its operations and the changes in its net
assets for the periods indicated therein in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
March 23, 2000
F-16
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JPF SEPARATE ACCOUNT A
December 31, 1999
<TABLE>
<CAPTION>
JPVF JPVF JPVF
International World Global
Equity Growth Stock Hard Assets
Division Division Division
--------------- ---------------- -------------
<S> <C> <C> <C>
ASSETS
Investments at cost ....................... $ 16,851,415 $102,201,447 $6,226,361
============ ============ ==========
Investments at market value ............... $ 21,417,249 $127,656,364 $5,498,877
Net premiums receivable (payable) ......... 4,149 (98,543) (3,488)
------------ ------------ ----------
TOTAL NET ASSETS ...................... $ 21,421,398 $127,557,821 $5,495,389
============ ============ ==========
NET ASSET DISTRIBUTION
Ensemble ................................ $ 1,998,819 $ 79,803
Ensemble II ............................. $ 21,421,398 125,559,002 5,415,586
------------ ------------ ----------
TOTAL NET ASSETS ...................... $ 21,421,398 $127,557,821 $5,495,389
============ ============ ==========
UNITS OUTSTANDING
Ensemble ................................ 38,941 8,506
Ensemble II ............................. 1,324,511 2,539,786 599,530
NET ASSET VALUE PER UNIT
Ensemble ................................ $ 51.331 $ 9.382
Ensemble II ............................. $ 16.174 $ 49.441 $ 9.034
<CAPTION>
JPVF JPVF JPVF
Emerging Capital Small JPVF
Growth Growth Company Growth
Division Division Division Division
----------------- ----------------- -------------- ----------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost ....................... $ 68,466,574 $ 163,241,350 $86,427,896 $ 14,656,170
============= ============= =========== ============
Investments at market value ............... $ 150,071,069 $ 313,132,843 $90,708,885 $ 21,821,774
Net premiums receivable (payable) ......... 111,456 186,518 (32,214) 82,843
------------- ------------- ----------- ------------
TOTAL NET ASSETS ...................... $ 150,182,525 $ 313,319,361 $90,676,671 $ 21,904,617
============= ============= =========== ============
NET ASSET DISTRIBUTION
Ensemble ................................ $ 606,977
Ensemble II ............................. $ 150,182,525 $ 313,319,361 90,069,694 $ 21,904,617
------------- ------------- ----------- ------------
TOTAL NET ASSETS ...................... $ 150,182,525 $ 313,319,361 $90,676,671 $ 21,904,617
============= ============= =========== ============
UNITS OUTSTANDING
Ensemble ................................ 13,010
Ensemble II ............................. 3,524,253 5,025,427 2,005,820 940,853
NET ASSET VALUE PER UNIT
Ensemble ................................ $ 46.658
Ensemble II ............................. $ 42.617 $ 62.351 $ 44.908 $ 23.283
</TABLE>
See notes to financial statements.
F-17
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES--(Continued)
JPF SEPARATE ACCOUNT A
December 31, 1999
<TABLE>
<CAPTION>
JPVF
Growth & JPVF JPVF
Income Balanced High Yield
Division Division Division
-------------- ---------------- --------------
<S> <C> <C> <C>
ASSETS
Investments at cost ................. $51,407,209 $ 33,635,926 $5,701,471
=========== ============ ==========
Investments at market value ......... $59,159,239 $ 42,340,461 $5,289,222
Accrued investment income ........... -- -- 434,055
Net premiums receivable ............. (30,855) 10,802 (5,770)
----------- ------------ ----------
TOTAL NET ASSETS ................ $59,128,384 $ 42,351,263 $5,717,507
=========== ============ ==========
NET ASSET DISTRIBUTION
Ensemble .......................... --
Ensemble II ....................... $59,128,384 $ 42,351,263 $5,717,507
----------- ------------ ----------
TOTAL NET ASSETS ................ $59,128,384 $ 42,351,263 $5,717,507
=========== ============ ==========
UNITS OUTSTANDING
Ensemble ..........................
Ensemble II ....................... 2,051,583 1,696,392 552,664
NET ASSET VALUE PER UNIT
Ensemble ..........................
Ensemble II ....................... $ 28.823 $ 24.967 $ 10.346
<CAPTION>
JPVF Fidelity Fidelity
Money VIP II VIP Fidelity
Market Contrafund Equity Income VIP Growth
Division Division Division Division
---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost ................. $ 23,308,344 $ 47,379,961 $ 9,295,439 $ 35,954,839
============ ============ =========== ============
Investments at market value ......... $ 23,799,898 $ 64,970,351 $ 9,348,655 $ 45,268,975
Accrued investment income ........... -- -- -- --
Net premiums receivable ............. 111,369 30,150 258,023 179,000
------------ ------------ ----------- ------------
TOTAL NET ASSETS ................ $ 23,911,267 $ 65,000,501 $ 9,606,678 $ 45,447,975
============ ============ =========== ============
NET ASSET DISTRIBUTION
Ensemble .......................... $ 30,774
Ensemble II ....................... 23,880,493 $ 65,000,501 $ 9,606,678 $ 45,447,975
------------ ------------ ----------- ------------
TOTAL NET ASSETS ................ $ 23,911,267 $ 65,000,501 $ 9,606,678 $ 45,447,975
============ ============ =========== ============
UNITS OUTSTANDING
Ensemble .......................... 1,652
Ensemble II ....................... 1,331,669 2,985,507 809,036 2,383,455
NET ASSET VALUE PER UNIT
Ensemble .......................... $ 18.632
Ensemble II ....................... $ 17.934 $ 21.774 $ 11.875 $ 19.070
</TABLE>
See notes to financial statements.
F-18
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES--(Continued)
JPF SEPARATE ACCOUNT A
December 31, 1999
<TABLE>
<CAPTION>
Fidelity Fidelity
VIP VIP II MFS
High Income Index 500 Research
Division Division Division
------------- ----------------- ----------------
<S> <C> <C> <C>
ASSETS
Investments at cost ....................... $1,920,397 $ 88,763,029 $ 8,640,649
========== ============= ============
Investments at market value ............... $1,757,092 $ 118,016,279 $ 10,681,214
Net premiums receivable (payable) ......... (1,234) 34,569 23,798
---------- ------------- ------------
TOTAL NET ASSETS ...................... $1,755,858 $ 118,050,848 $ 10,705,012
========== ============= ============
NET ASSET DISTRIBUTION
Ensemble ................................
Ensemble II ............................. $1,755,858 $ 118,050,848 $ 10,705,012
---------- ------------- ------------
TOTAL NET ASSETS ...................... $1,755,858 $ 118,050,848 $ 10,705,012
========== ============= ============
UNITS OUTSTANDING
Ensemble ................................
Ensemble II ............................. 137,722 5,182,440 703,899
NET ASSET VALUE PER UNIT
Ensemble ................................
Ensemble II ............................. $ 12.750 $ 22.781 $ 15.209
<CAPTION>
MFS Oppenheimer Oppenheimer Templeton
Utilities Bond Strategic Bond International
Division Division Division Division
---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Investments at cost ....................... $ 10,400,906 $ 20,267,178 $3,031,062 $57,221,420
============ ============ ========== ===========
Investments at market value ............... $ 12,769,955 $ 19,430,460 $3,033,798 $68,583,089
Net premiums receivable (payable) ......... 3,857 1,630 (77,951) (38,659)
------------ ------------ ---------- -----------
TOTAL NET ASSETS ...................... $ 12,773,812 $ 19,432,090 $2,955,847 $68,544,430
============ ============ ========== ===========
NET ASSET DISTRIBUTION
Ensemble ................................ $ 26,936
Ensemble II ............................. $ 12,773,812 19,405,154 $2,955,847 $68,544,430
------------ ------------ ---------- -----------
TOTAL NET ASSETS ...................... $ 12,773,812 $ 19,432,090 $2,955,847 $68,544,430
============ ============ ========== ===========
UNITS OUTSTANDING
Ensemble ................................ 1,217
Ensemble II ............................. 814,809 910,153 288,268 3,342,285
NET ASSET VALUE PER UNIT
Ensemble ................................ $ 22.139
Ensemble II ............................. $ 15.678 $ 21.322 $ 10.255 $ 20.510
</TABLE>
See notes to financial statements.
F-19
<PAGE>
STATEMENT OF OPERATIONS
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF
International
Equity
Division
-----------------------------------
Period from JPVF World Growth Stock Division
January 15, 1998(a) -------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, -------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ................................ $ -- $ -- $ 359,571 $2,325,200 $ 2,476,350
Distributions of realized gains ................ -- 27,704 1,324,887 7,901,423 13,293,185
---------- -------- ----------- ---------- -----------
-- 27,704 1,684,458 10,226,623 15,769,535
Expenses:
Mortality and expense risk charge .............. 129,696 29,866 1,061,262 1,080,424 1,001,394
---------- -------- ----------- ---------- -----------
Net investment income (loss) ................. (129,696) (2,162) 623,196 9,146,199 14,768,141
---------- -------- ----------- ---------- -----------
Gain (loss) on investments:
Net realized gain (loss) on investments ........ 720,386 (1,410) 1,558,287 1,498,732 1,393,920
Change in net unrealized gain (loss)
on investments ................................ 4,015,470 550,363 19,480,089 (8,293,399) (2,140,961)
---------- -------- ----------- ---------- -----------
Net gain (loss) on investments ................. 4,735,856 548,953 21,038,376 (6,794,667) (747,041)
---------- -------- ----------- ---------- -----------
Increase (decrease) in
net assets from operations .................... $4,606,160 $546,791 $21,661,572 $2,351,532 $14,021,100
========== ======== =========== ========== ===========
<CAPTION>
JPVF Global Hard Assets Division
----------------------------------------------
Year Ended December 31,
----------------------------------------------
1999 1998 1997
--------------- ------------- ---------------
<S> <C> <C> <C>
Investment Income:
Dividend income ................................. $ 5,738 $ 72,099 $ 52,180
Distributions of realized gains ................. -- -- 154,999
---------- ---------- -----------
5,738 72,099 207,179
Expenses:
Mortality and expense risk charge ............... 51,987 43,859 60,762
---------- ---------- -----------
Net investment income (loss) .................. (46,249) 28,240 146,417
---------- ---------- -----------
Gain (loss) on investments:
Net realized gain (loss) on investments ......... (1,083,450) (826,362) (1,020,911)
Change in net unrealized gain (loss)
on investments ................................. 1,807,479 121,013 (2,862,423)
---------- ---------- -----------
Net gain (loss) on investments .................. 724,029 (705,349) (3,883,334)
---------- ---------- -----------
Increase (decrease) in
net assets from operations ..................... $ 677,780 $ (677,109) $(3,736,917)
========== ========== ===========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-20
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF Emerging Growth Division
-------------------------------------------
Year Ended December 31,
-------------------------------------------
1999 1998 1997
--------------- -------------- ------------
<S> <C> <C> <C>
Investment Income:
Dividend income ................................ $ -- $ -- $ --
Distributions of realized gains ................ -- 562,053 2,355,925
----------- ----------- ----------
-- 562,053 2,355,925
Expenses:
Mortality and expense risk charge .............. 821,544 549,991 341,819
----------- ----------- ----------
Net investment income (loss) ................. (821,544) 12,062 2,014,106
----------- ----------- ----------
Gain on investments:
Net realized gain on investments ............... 3,161,020 1,477,889 528,900
Change in net unrealized gain on investments ... 59,901,442 16,294,927 3,845,746
----------- ----------- ----------
Net gain on investments ........................ 63,062,462 17,772,816 4,374,646
----------- ----------- ----------
Increase in net assets from operations ....... $62,240,918 $17,784,878 $6,388,752
=========== =========== ==========
<CAPTION>
JPVF Capital Growth Division
--------------------------------------------
Year Ended December 31,
--------------------------------------------
1999 1998 1997
-------------- -------------- --------------
Investment Income:
<S> <C> <C> <C>
Dividend income ................................ $ -- $ -- $ 21,278
Distributions of realized gains ................ 5,837,977 9,631,854 5,556,589
----------- ----------- -----------
5,837,977 9,631,854 5,577,867
Expenses:
Mortality and expense risk charge .............. 2,091,275 1,396,476 962,680
----------- ----------- -----------
Net investment income (loss) ................. 3,746,702 8,235,378 4,615,187
----------- ----------- -----------
Gain on investments:
Net realized gain on investments ............... 1,944,106 2,650,023 827,249
Change in net unrealized gain on investments ... 85,575,214 38,211,343 19,770,192
----------- ----------- -----------
Net gain on investments ........................ 87,519,320 40,861,366 20,597,441
----------- ----------- -----------
Increase in net assets from operations ....... $91,266,022 $49,096,744 $25,212,628
=========== =========== ===========
</TABLE>
See notes to financial statements.
F-21
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF
Growth
Division
-----------------------------------
JPVF Small Company Division Period from
----------------------------------------------- January 20, 1998(a)
Year Ended December 31, Year Ended to
----------------------------------------------- December 31, December 31,
1999 1998 1997 1999 1998
--------------- ---------------- -------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income .......................... $ 102,370 $ 888,637 $ 377,561 $ -- $ --
Distributions of realized gains .......... 1,905,734 7,682,840 7,681,445 36,111 --
------------ ------------- ----------- ---------- ---------
2,008,104 8,571,477 8,059,006 36,111 --
Expenses:
Mortality and expense risk charge ........ 698,842 791,529 717,430 63,641 6,809
------------ ------------- ----------- ---------- ---------
Net investment income (loss) ........... 1,309,262 7,779,948 7,341,576 (27,530) (6,809)
------------ ------------- ----------- ---------- ---------
Gain (loss) on investments:
Net realized gain (loss) on investments .. (1,289,759) 939,643 1,112,075 101,362 (46,655)
Change in net unrealized gain (loss)
on investments .......................... 10,478,964 (20,294,880) 7,517,633 6,934,317 231,287
------------ ------------- ----------- ---------- ---------
Net gain (loss) on investments ........... 9,189,205 (19,355,237) 8,629,708 7,035,679 184,632
------------ ------------- ----------- ---------- ---------
Increase (decrease) in
net assets from operations ............ $ 10,498,467 $ (11,575,289) $15,971,284 $7,008,149 $ 177,823
============ ============= =========== ========== =========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-22
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF Growth & Income Division JPVF Balanced Division
------------------------------------------- ----------------------------------------
Year Ended December 31, Year Ended December 31,
------------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
------------- ------------- --------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ......................... $ -- $ 404,228 $ 294,059 $ 6,369 $ 554,007 $ 547,519
Distributions of realized gains ......... 408,080 -- 8,675,134 589,559 2,074,977 3,433,962
---------- ---------- ------------- ---------- ---------- ----------
408,080 404,228 8,969,193 595,928 2,628,984 3,981,481
Expenses:
Mortality and expense risk charge ....... 513,429 435,459 298,852 322,184 256,295 199,545
---------- ---------- ------------- ---------- ---------- ----------
Net investment income (loss) .......... (105,349) (31,231) 8,670,341 273,744 2,372,689 3,781,936
---------- ---------- ------------- ---------- ---------- ----------
Gain (loss) on investments:
Net realized gain (loss) on investments . 1,036,064 781,929 763,718 250,283 111,626 125,127
Change in net unrealized gain (loss)
on investments ......................... 1,596,857 4,120,409 (1,791,862) 6,776,884 1,976,202 (829,904)
---------- ---------- ------------- ---------- ---------- ----------
Net gain (loss) on investments .......... 2,632,921 4,902,338 (1,028,144) 7,027,167 2,087,828 (704,777)
---------- ---------- ------------- ---------- ---------- ----------
Increase (decrease) in
net assets from operations ........... $2,527,572 $4,871,107 $ 7,642,197 $7,300,911 $4,460,517 $3,077,159
========== ========== ============= ========== ========== ==========
<CAPTION>
JPVF High Yield
Division
----------------------------------
Period from
January 8, 1998(a)
Year Ended to
December 31, December 31,
1999 1998
-------------- -------------------
<S> <C> <C>
Investment Income:
Dividend income ......................... $ 434,055 $ 296,661
Distributions of realized gains ......... -- --
----------- ----------
434,055 296,661
Expenses:
Mortality and expense risk charge ....... 55,669 32,443
----------- ----------
Net investment income (loss) .......... 378,386 264,218
----------- ----------
Gain (loss) on investments:
Net realized gain (loss) on investments . (40,844) (77,480)
Change in net unrealized gain (loss)
on investments ......................... (124,383) (287,866)
----------- ----------
Net gain (loss) on investments .......... (165,227) (365,346)
----------- ----------
Increase (decrease) in
net assets from operations ........... $ 213,159 $ (101,128)
=========== ==========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-23
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF Money Market Division Fidelity VIP II Contrafund Division
------------------------------------- ----------------------------------------
Year Ended December 31, Year Ended December 31,
------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
------------- ----------- ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ............................ $ -- $507,941 $ 425,055 $ 215,838 $ 141,812 $ 53,570
Distributions of realized gains ............ -- -- -- 1,582,814 1,043,329 141,577
----------- -------- --------- ----------- ---------- ----------
-- 507,941 425,055 1,798,652 1,185,141 195,147
Expenses:
Mortality and expense risk charge .......... 177,261 111,692 90,263 461,629 246,378 112,772
----------- -------- --------- ----------- ---------- ----------
Net investment income (loss) ............. (177,261) 396,249 334,792 1,337,023 938,763 82,375
----------- -------- --------- ----------- ---------- ----------
Gain (loss) on investments:
Net realized gain (loss) on investments..... 142,086 53,452 61,042 1,161,891 381,646 143,362
Change in net unrealized gain (loss)
on investments ............................ 740,327 20,157 (11,529) 9,007,322 6,265,813 1,928,296
----------- -------- --------- ----------- ---------- ----------
Net gain (loss) on investments ............. 882,413 73,609 49,513 10,169,213 6,647,459 2,071,658
----------- -------- --------- ----------- ---------- ----------
Increase in net assets
from operations ......................... $ 705,152 $469,858 $ 384,305 $11,506,236 $7,586,222 $2,154,033
=========== ======== ========= =========== ========== ==========
<CAPTION>
Fidelity
VIP Equity Income
Division
----------------------------------
Period from
January 8, 1998(a)
Year Ended to
December 31, December 31,
1999 1998
-------------- -------------------
<S> <C> <C>
Investment Income:
Dividend income ............................ $ 69,348 $ 8,570
Distributions of realized gains ............ 153,295 30,500
----------- -----------
222,643 39,070
Expenses:
Mortality and expense risk charge .......... 67,673 38,308
----------- -----------
Net investment income (loss) ............. 154,970 762
----------- -----------
Gain (loss) on investments:
Net realized gain (loss) on investments..... 85,743 (114,816)
Change in net unrealized gain (loss)
on investments ............................ (139,539) 192,755
----------- -----------
Net gain (loss) on investments ............. (53,796) 77,939
----------- -----------
Increase in net assets
from operations ......................... $ 101,174 $ 78,701
=========== ===========
</TABLE>
(a) Commencement of operations.
See notes to financial statements.
F-24
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
Fidelity
VIP Growth
Division
----------------------------------
Period from Fidelity VIP High Income Division
January 8, 1998(a) ---------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, ---------------------------------------
1999 1998 1999 1998 1997
-------------- ------------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ........................ $ 17,820 $ 141 $ 224,955 $ 398,490 $248,474
Distributions of realized gains ........ 1,120,427 3,709 8,409 253,207 30,711
---------- ---------- ----------- ---------- --------
1,138,247 3,850 233,364 651,697 279,185
Expenses:
Mortality and expense risk charge ...... 233,111 18,771 19,003 35,359 45,794
---------- ---------- ----------- ---------- --------
Net investment income (loss) ......... 905,136 (14,921) 214,361 616,338 233,391
---------- ---------- ----------- ---------- --------
Gain (loss) on investments:
Net realized gain (loss) on investments. 59,375 (10,197) (120,010) 97,475 71,464
Change in net unrealized gain (loss)
on investments ........................ 8,178,073 1,136,063 63,150 (784,352) 451,237
---------- ---------- ----------- ---------- --------
Net gain (loss) on investments ......... 8,237,448 1,125,866 (56,860) (686,877) 522,701
---------- ---------- ----------- ---------- --------
Increase (decrease) in net assets
from operations ..................... $9,142,584 $1,110,945 $ 157,501 $ (70,539) $756,092
========== ========== =========== ========== ========
<CAPTION>
Fidelity VIP II Index 500 Division
------------------------------------------
Year Ended December 31,
------------------------------------------
1999 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
Investment Income:
Dividend income ........................ $ 781,774 $ 371,052 $ 101,288
Distributions of realized gains ........ 530,490 859,422 205,527
----------- ----------- ----------
1,312,264 1,230,474 306,815
Expenses:
Mortality and expense risk charge ...... 887,561 431,588 164,470
----------- ----------- ----------
Net investment income (loss) ......... 424,703 798,886 142,345
----------- ----------- ----------
Gain (loss) on investments:
Net realized gain (loss) on investments. 3,073,138 551,714 435,364
Change in net unrealized gain (loss)
on investments ........................ 14,391,208 10,456,961 3,844,079
----------- ----------- ----------
Net gain (loss) on investments ......... 17,464,346 11,008,675 4,279,443
----------- ----------- ----------
Increase (decrease) in net assets
from operations ..................... $17,889,049 $11,807,561 $4,421,788
=========== =========== ==========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-25
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
MFS Research MFS Utilities
Division Division
----------------------------------- -----------------------------------
Period from Period from
January 8, 1998(a) January 12, 1998(a)
Year Ended to Year Ended to
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
-------------- -------------------- -------------- --------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividend income ................................. $ 13,020 $ 3,768 $ 60,485 $ 13,390
Distributions of realized gains ................. 68,803 49,416 304,120 60,878
---------- ----------- ---------- --------
81,823 53,184 364,605 74,268
Expenses:
Mortality and expense risk charge ............... 65,517 22,916 68,471 17,630
---------- ----------- ---------- --------
Net investment income ......................... 16,306 30,268 296,134 56,638
---------- ----------- ---------- --------
Gain (loss) on investments:
Net realized gain (loss) on investments ......... 107,800 (192,250) 154,941 38,000
Change in net unrealized gain (loss)
on investments ................................. 1,704,948 335,616 2,096,308 272,742
---------- ----------- ---------- --------
Net gain (loss) on investments .................. 1,812,748 143,366 2,251,249 310,742
---------- ----------- ---------- --------
Increase (decrease) in net assets
from Operations .............................. $1,829,054 $ 173,634 $2,547,383 $367,380
========== =========== ========== ========
<CAPTION>
Oppenheimer Bond Division
----------------------------------------
Year Ended December 31,
----------------------------------------
1999 1998 1997
--------------- ----------- -----------
<S> <C> <C> <C>
Investment Income:
Dividend income ................................. $ 861,797 $229,399 $754,014
Distributions of realized gains ................. 82,763 207,606 12,303
------------- -------- --------
944,560 437,005 766,317
Expenses:
Mortality and expense risk charge ............... 173,390 145,903 114,725
------------- -------- --------
Net investment income ......................... 771,170 291,102 651,592
------------- -------- --------
Gain (loss) on investments:
Net realized gain (loss) on investments ......... (134,605) 296,390 31,843
Change in net unrealized gain (loss)
on investments ................................. (1,114,314) 247,987 235,133
------------- -------- --------
Net gain (loss) on investments .................. (1,248,919) 544,377 266,976
------------- -------- --------
Increase (decrease) in net assets
from Operations .............................. $ (477,749) $835,479 $918,568
============= ======== ========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-26
<PAGE>
STATEMENT OF OPERATIONS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
Oppenheimer
Strategic Bond
Division
-----------------------------------
Period from Templeton International Division
January 12, 1998(a) ------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, ------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividend income ............................. $ 109,302 $ 5,696 $ 1,540,020 $1,024,661 $ 678,464
Distributions of realized gains ............. -- 3,670 5,349,542 1,831,974 272,716
--------- -------- ----------- ---------- ----------
109,302 9,366 6,889,562 2,856,635 951,180
Expenses:
Mortality and expense risk charge ........... 20,608 8,104 529,156 429,430 301,799
--------- -------- ----------- ---------- ----------
Net investment income ..................... 88,694 1,262 6,360,406 2,427,205 649,381
--------- -------- ----------- ---------- ----------
Gain (loss) on investments:
Net realized gain (loss) on investments ..... (19,086) (2,048) 338,691 776,195 828,887
Change in net unrealized gain (loss)
on investments ............................ (22,018) 24,753 5,803,054 295,855 2,126,633
--------- -------- ----------- ---------- ----------
Net gain (loss) on investments .............. (41,104) 22,705 6,141,745 1,072,050 2,955,520
--------- -------- ----------- ---------- ----------
Increase in net assets
from operations .......................... $ 47,590 $ 23,967 $12,502,151 $3,499,255 $3,604,901
========= ======== =========== ========== ==========
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF
International
Equity
Division
----------------------------------- JPVF World Growth Stock Division
Period from -------------------------------------------------
Year Ended January 15, 1998(a) Year Ended December 31,
December 31, to -------------------------------------------------
1999 December 31, 1998 1999 1998 1997
-------------- -------------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .............. $ (129,696) $ (2,162) $ 623,196 $ 9,146,199 $ 14,768,141
Net realized gain (loss) on investments ... 720,386 (1,410) 1,558,287 1,498,732 1,393,920
Change in net unrealized gain (loss)
on investments ........................... 4,015,470 550,363 19,480,089 (8,293,399) (2,140,961)
------------ ---------- ------------- ------------ ------------
Increase (decrease) in net assets from
operations ................................ 4,606,160 546,791 21,661,572 2,351,532 14,021,100
Contractholder transactions--Note F:
Transfers of net premiums ................. 3,996,999 1,201,519 16,845,423 19,624,937 20,387,148
Transfers from/to General Account
and within Separate Account, net ......... 5,710,860 6,623,800 (19,163,711) (12,458,969) (4,647,630)
Transfers of cost of insurance ............ (1,006,092) (238,990) (7,185,745) (7,802,232) (7,901,778)
Transfers on account of death ............. (1,803) (12,068) (284,192) (329,223) (143,565)
Transfers on account of other --
terminations ............................. (22,117) 16,339 (1,514,073) (2,164,208) (2,830,872)
------------ ---------- ------------- ------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions .. 8,677,847 7,590,600 (11,302,298) (3,129,695) 4,863,303
Net increase (decrease) in net assets ...... 13,284,007 8,137,391 10,359,274 (778,163) 18,884,403
------------ ---------- ------------- ------------ ------------
Balance at beginning of year ............... 8,137,391 -- 117,198,547 117,976,710 99,092,307
------------ ---------- ------------- ------------ ------------
Balance at end of year ..................... $ 21,421,398 $8,137,391 $ 127,557,821 $117,198,547 $117,976,710
============ ========== ============= ============ ============
<CAPTION>
JPVF Global Hard Assets Division
----------------------------------------------
Year Ended December 31,
---------------- ------------- ---------------
1999 1998 1997
--------------- ------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ..................... $ (46,249) $ 28,240 $ 146,417
Net realized gain (loss) on investments .......... (1,083,450) (826,362) (1,020,911)
Change in net unrealized gain (loss)
on investments .................................. 1,807,479 121,013 (2,862,423)
------------- ---------- -------------
Increase (decrease) in net assets from
operations ....................................... 677,780 (677,109) (3,736,917)
Contractholder transactions--Note F:
Transfers of net premiums ........................ 1,235,187 1,192,112 1,487,487
Transfers from/to General Account
and within Separate Account, net ................ (275,408) (854,463) 594,080
Transfers of cost of insurance ................... (460,243) (412,766) (522,160)
Transfers on account of death .................... (5,186) (4,158) (5,118)
Transfers on account of other
terminations .................................... (80,350) (113,411) (297,357)
------------- ---------- -------------
Net increase (decrease) in net assets
derived from contractholder transactions ......... 414,000 (192,686) 1,256,932
Net increase (decrease) in net assets ............. 1,091,780 (869,795) (2,479,985)
------------- ---------- -------------
Balance at beginning of year ...................... 4,403,609 5,273,404 7,753,389
------------- ---------- -------------
Balance at end of year ............................ $ 5,495,389 $4,403,609 $ 5,273,404
============= ========== =============
</TABLE>
(a) Commencement of operations
See notes to financial statements.
F-28
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF Emerging Growth Division JPVF Capital Growth Division
----------------------------------------- -------------------------------------------
Year Ended December 31, Year Ended December 31,
----------------------------------------- -------------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .............. $ (821,544) $ 12,062 $ 2,014,106 $ 3,746,702 $ 8,235,378 $ 4,615,187
Net realized gain (loss)
on investments ........................... 3,161,020 1,477,889 528,900 1,944,106 2,650,023 827,249
Change in net unrealized gain (loss)
on investments ........................... 59,901,442 16,294,927 3,845,746 85,575,214 38,211,343 19,770,192
------------ ----------- ----------- ------------ ------------ ------------
Increase (decrease) in net assets from
operations ................................ 62,240,918 17,784,878 6,388,752 91,266,022 49,096,744 25,212,628
Contractholder transactions--Note F:
Transfers of net premiums ................. 17,827,633 15,940,085 12,081,437 36,826,017 29,497,989 23,605,444
Transfers from/to General Account
and within Separate Account, net ......... (2,063,189) 893,513 7,761,806 11,080,254 358,425 2,703,509
Transfers of cost of insurance ............ (5,826,562) (4,518,851) (3,150,610) (13,445,085) (10,254,190) (7,961,359)
Transfers on account of death ............. (165,890) (55,398) (29,914) (341,019) (314,463) (104,089)
Transfers on account of other
terminations ............................. (732,498) (634,670) (617,379) (2,211,653) (2,015,250) (2,348,433)
------------ ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net assets
derived from contractholder transactions .. 9,039,494 11,624,679 16,045,340 31,908,514 17,272,511 15,895,072
Net increase (decrease) in net assets ...... 71,280,412 29,409,557 22,434,092 123,174,536 66,369,255 41,107,700
------------ ----------- ----------- ------------ ------------ ------------
Balance at beginning of year ............... 78,902,113 49,492,556 27,058,464 190,144,825 123,775,570 82,667,870
------------ ----------- ----------- ------------ ------------ ------------
Balance at end of year ..................... $150,182,525 $78,902,113 $49,492,556 $313,319,361 $190,144,825 $123,775,570
============ =========== =========== ============ ============ ============
<CAPTION>
JPVF Small Company Division
------------------------------------------------
Year Ended December 31,
------------------------------------------------
1999 1998 1997
-------------------------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .............. $ 1,309,262 $ 7,779,948 $ 7,341,576
Net realized gain (loss)
on investments ........................... (1,289,759) 939,643 1,112,075
Change in net unrealized gain (loss)
on investments ........................... 10,478,964 (20,294,880) 7,517,633
-------------- -------------- ------------
Increase (decrease) in net assets from
operations ................................ 10,498,467 (11,575,289) 15,971,284
Contractholder transactions--Note F:
Transfers of net premiums ................. 13,211,682 15,832,378 15,002,595
Transfers from/to General Account
and within Separate Account, net ......... (11,233,252) (1,321,696) (3,643,068)
Transfers of cost of insurance ............ (5,181,027) (6,129,383) (5,977,445)
Transfers on account of death ............. (207,494) (182,629) (138,279)
Transfers on account of other
terminations ............................. (940,537) (1,303,312) (2,043,613)
-------------- -------------- ------------
Net increase (decrease) in net assets
derived from contractholder transactions .. (4,350,628) 6,895,358 3,200,190
Net increase (decrease) in net assets ...... 6,147,839 (4,679,931) 19,171,474
-------------- -------------- ------------
Balance at beginning of year ............... 84,528,832 89,208,763 70,037,289
-------------- -------------- ------------
Balance at end of year ..................... $ 90,676,671 $ 84,528,832 $ 89,208,763
============== ============== ============
</TABLE>
(a) Commencement of operations.
See notes to financial statements.
F-29
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF
Growth
Division
-----------------------------------
Period from JPVF World Growth & Income Division
January 20, 1998(a) ----------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, ----------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) .............. $ (27,530) $ (6,809) $ (105,349) $ (31,231) $ 8,670,341
Net realized gain (loss) on investments ... 101,362 (46,655) 1,036,064 781,929 763,718
Change in net unrealized gain (loss)
on investments ........................... 6,934,317 231,287 1,596,857 4,120,409 (1,791,862)
----------- ---------- ------------ ------------ ------------
Increase in net assets from operations ..... 7,008,149 177,823 2,527,572 4,871,107 7,642,197
Contractholder transactions--Note F:
Transfers of net premiums ................. 2,139,922 509,810
Transfers from/to General Account 10,779,535 10,756,077 8,132,090
and within Separate Account, net ......... 11,691,084 1,036,375
Transfers of cost of insurance ............ (554,122) (70,647) (2,106,086) (1,037,359) 5,643,742
Transfers on account of death ............. (857) -- (3,899,334) (3,696,570) (2,745,042)
Transfers on account of other (104,919) (92,605) (45,431)
terminations.............................. (35,596) 2,676
----------- ---------- (534,017) (591,078) (658,736)
Net increase in net assets derived ------------ ------------ ------------
from contractholder transactions .......... 13,240,431 1,478,214
Net increase in net assets ................. 20,248,580 1,656,037 4,135,179 5,338,465 10,326,623
----------- ---------- 6,662,751 10,209,572 17,968,820
Balance at beginning of year ............... 1,656,037 -- ------------ ------------ ------------
----------- ---------- 52,465,633 42,256,061 24,287,241
Balance at end of year ..................... $21,904,617 $1,656,037 ------------ ------------ ------------
=========== ========== $ 59,128,384 $ 52,465,633 $ 42,256,061
============ ============ ============
<CAPTION>
JPVF Balanced Division
----------------------------------------------
Year Ended December 31,
----------------------------------------------
1999 1998 1997
--------------- --------------- --------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. $ 273,744 $ 2,372,689 $ 3,781,936
Net realized gain (loss) on investments .. 250,283 111,626 125,127
Change in net unrealized gain (loss)
on investments .......................... 6,776,884 1,976,202 (829,904)
------------ ------------ ------------
Increase in net assets from operations .... 7,300,911 4,460,517 3,077,159
Contractholder transactions--Note F:
Transfers of net premiums ................ 5,826,918 5,092,290 4,506,381
Transfers from/to General Account
and within Separate Account, net ........ (749,285) 631,049 (154,536)
Transfers of cost of insurance ........... (2,143,582) (1,897,240) (1,580,912)
Transfers on account of death ............ (33,556) (107,286) (32,682)
Transfers on account of other
terminations............................. (372,514) (477,084) (480,806)
------------ ------------ ------------
Net increase in net assets derived
from contractholder transactions ......... 2,527,981 3,241,729 2,257,445
Net increase in net assets ................ 9,828,892 7,702,246 5,334,604
------------ ------------ ------------
Balance at beginning of year .............. 32,522,371 24,820,125 19,485,521
------------ ------------ ------------
Balance at end of year .................... $ 42,351,263 $ 32,522,371 $ 24,820,125
============ ============ ============
</TABLE>
See notes to financial statements.
F-30
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
JPVF
High Yield Bond
Division
---------------------------------- JPVF
Period from Money Market Division
January 8, 1998(a) ----------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, ----------------------------------------------
1999 1998 1999 1998 1997
-------------- ------------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .................. $ 378,386 $ 264,218 $ (177,261) $ 396,249 $ 334,792
Net realized gain (loss) on investments ....... (40,844) (77,480) 142,086 53,452 61,042
Change in net unrealized gain (loss)
on investments ............................... (124,383) (287,866) 740,327 20,157 (11,529)
---------- ---------- ------------ ----------- -------------
Increase (decrease) in net assets from
operations .................................... 213,159 (101,128) 705,152 469,858 384,305
Contractholder transactions--Note F:
Transfers of net premiums ..................... 1,611,508 599,541 7,019,291 4,544,085 4,688,133
Transfers from/to General Account
and within Separate Account, net ............. (711,546) 4,764,419 2,287,638 2,798,249 (2,751,900)
Transfers of cost of insurance ................ (376,460) (255,751) (1,446,885) (915,629) (782,134)
Transfers on account of death ................. (342) -- (7,579) (578) (6,947)
Transfers on account of other
terminations ................................. (2,318) (23,575) (190,803) (302,128) (592,016)
---------- ---------- ------------ ----------- -------------
Net increase in net assets derived
from contractholder transactions .............. 520,842 5,084,634 7,661,662 6,123,999 555,136
Net increase in net assets ..................... 734,001 4,983,506 8,366,814 6,593,857 939,441
---------- ---------- ------------ ----------- -------------
Balance at beginning of year ................... 4,983,506 -- 15,544,453 8,950,596 8,011,155
---------- ---------- ------------ ----------- -------------
Balance at end of year ......................... $5,717,507 $4,983,506 $ 23,911,267 $15,544,453 $ 8,950,596
========== ========== ============ =========== =============
<CAPTION>
Fidelity VIP II Contrafund Division
----------------------------------------------
Year Ended December 31,
-----------------------------------------------
1999 1998 1997
--------------- --------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) .................. $ 1,337,023 $ 938,763 $ 82,375
Net realized gain (loss) on investments ....... 1,161,891 381,646 143,362
Change in net unrealized gain (loss)
on investments ............................... 9,007,322 6,265,813 1,928,296
------------ ------------ ------------
Increase (decrease) in net assets from
operations .................................... 11,506,236 7,586,222 2,154,033
Contractholder transactions--Note F:
Transfers of net premiums ..................... 12,582,864 9,182,744 4,532,969
Transfers from/to General Account
and within Separate Account, net ............. 3,316,146 8,458,498 8,789,832
Transfers of cost of insurance ................ (3,837,642) (2,365,397) (1,101,248)
Transfers on account of death ................. (52,782) (42,331) (1,382)
Transfers on account of other
terminations ................................. (255,359) (262,093) (153,334)
------------ ------------ ------------
Net increase in net assets derived
from contractholder transactions .............. 11,753,227 14,971,421 12,066,837
Net increase in net assets ..................... 23,259,463 22,557,643 14,220,870
------------ ------------ ------------
Balance at beginning of year ................... 41,741,038 19,183,395 4,962,525
------------ ------------ ------------
Balance at end of year ......................... $ 65,000,501 $ 41,741,038 $ 19,183,395
============ ============ ============
</TABLE>
(a) Commencement of operations.
See notes to financial statements.
F-31
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
Fidelity Fidelity
VIP Equity Income VIP Growth
Division Division
----------------------------------- ----------------------------------
Period from Period from
January 8, 1998(a) January 8, 1998(a)
Year Ended to Year Ended to
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
-------------- -------------------- -------------- -------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ 154,970 $ 762 $ 905,136 $ (14,921)
Net realized gain (loss) on investments ........ 85,743 (114,816) 59,375 (10,197)
Change in net unrealized gain
on investments ................................ (139,539) 192,755 8,178,073 1,136,063
---------- ---------- ------------ ----------
Increase (decrease) in net assets from
operations ..................................... 101,174 78,701 9,142,584 1,110,945
Contractholder transactions--Note F:
Transfers of net premiums ...................... 3,054,942 1,459,008 7,194,482 925,584
Transfers from/to General Account
and within Separate Account, net .............. 3,139,659 2,814,317 23,690,440 5,643,806
Transfers of cost of insurance ................. (699,983) (305,514) (1,881,297) (177,953)
Transfers on account of death .................. -- -- (4,024) --
Transfers on account of other
terminations .................................. (34,625) (1,001) (161,248) (35,344)
Net increase (decrease) in net assets derived
from contractholder transactions ............... 5,459,993 3,966,810 28,838,353 6,356,093
Net increase (decrease) in net assets ........... 5,561,167 4,045,511 37,980,937 7,467,038
---------- ---------- ------------ ----------
Balance at beginning of year .................... 4,045,511 -- 7,467,038 --
---------- ---------- ------------ ----------
Balance at end of year .......................... $9,606,678 $4,045,511 $ 45,447,975 $7,467,038
========== ========== ============ ==========
<CAPTION>
Fidelity VIP High Income Division
--------------------------------------------
Year Ended December 31,
--------------------------------------------
1999 1998 1997
------------- --------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ 214,361 $ 616,338 $ 233,391
Net realized gain (loss) on investments ........ (120,010) 97,475 71,464
Change in net unrealized gain
on investments ................................ 63,150 (784,352) 451,237
---------- ------------- ----------
Increase (decrease) in net assets from
operations ..................................... 157,501 (70,539) 756,092
Contractholder transactions--Note F:
Transfers of net premiums ...................... 4,917 82,028 1,344,308
Transfers from/to General Account
and within Separate Account, net .............. (837,892) (4,577,188) 3,119,835
Transfers of cost of insurance ................. (102,685) (264,842) (362,364)
Transfers on account of death .................. (11) (219) (3,474)
Transfers on account of other
terminations .................................. (8,950) (126,841) (173,019)
Net increase (decrease) in net assets derived
from contractholder transactions ............... (944,621) (4,887,062) 3,925,286
Net increase (decrease) in net assets ........... (787,120) (4,957,601) 4,681,378
---------- ------------- ----------
Balance at beginning of year .................... 2,542,978 7,500,579 2,819,201
---------- ------------- ----------
Balance at end of year .......................... $1,755,858 $ 2,542,978 $7,500,579
========== ============= ==========
</TABLE>
(a) Commencement of operations.
See notes to financial statements.
F-32
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
MFS Research
Division
-----------------------------------
Fidelity VIP II Index 500 Division Period from
----------------------------------------------- January 8, 1998(a)
Year Ended December 31, Year Ended to
----------------------------------------------- December 31, December 31,
1999 1998 1997 1999 1998
--------------- --------------- --------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income ..................... $ 424,703 $ 798,886 $ 142,345 $ 16,306 $ 30,268
Net realized gain (loss)
on investments ........................... 3,073,138 551,714 435,364 107,800 (192,250)
Change in net unrealized gain
on investments ........................... 14,391,208 10,456,961 3,844,079 1,704,948 335,616
------------ ----------- ----------- ----------- ----------
Increase (decrease) in net assets from
operations ................................ 17,889,049 11,807,561 4,421,788 1,829,054 173,634
Contractholder transactions--Note F:
Transfers of net premiums ................. 26,012,390 14,424,002 5,355,400 2,385,029 1,035,071
Transfers from/to General Account
and within Separate Account, net ......... 9,053,639 22,523,380 13,090,735 2,897,902 3,239,091
Transfers of cost of insurance ............ (7,515,597) (3,847,370) (1,230,424) (629,066) (193,228)
Transfers on account of death ............. (157,655) (63,585) (41,017) (1,372) (12,135)
Transfers on account of other
terminations ............................. (668,878) (380,850) (149,305) (19,098) 130
Net increase in net assets derived from
contractholder transactions ............... 26,723,899 32,655,577 17,025,389 4,633,395 4,068,929
Net increase in net assets ................. 44,612,948 44,463,138 21,447,177 6,462,449 4,242,563
------------ ----------- ----------- ----------- ----------
Balance at beginning of year ............... 73,437,900 28,974,762 7,527,585 4,242,563 --
------------ ----------- ----------- ----------- ----------
Balance at end of year ..................... $118,050,848 $73,437,900 $28,974,762 $10,705,012 $4,242,563
============ =========== =========== =========== ==========
<CAPTION>
MFS Utilities
Division
-----------------------------------
Period from Oppenheimer Bond Division
January 12, 1998(a) -----------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, -----------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income ..................... $ 296,134 $ 56,638 $ 771,170 $ 291,102 $ 651,592
Net realized gain (loss)
on investments ........................... 154,941 38,000 (134,605) 296,390 31,843
Change in net unrealized gain
on investments ........................... 2,096,308 272,742 (1,114,314) 247,987 235,133
----------- ---------- ----------- ----------- -----------
Increase (decrease) in net assets from
operations ................................ 2,547,383 367,380 (477,749) 835,479 918,568
Contractholder transactions--Note F:
Transfers of net premiums ................. 1,869,430 730,856 3,187,323 3,736,503 2,691,506
Transfers from/to General Account
and within Separate Account, net ......... 4,892,184 3,166,986 146,154 595,445 (394,592)
Transfers of cost of insurance ............ (641,737) (145,371) (1,282,193) (1,076,884) (918,928)
Transfers on account of death ............. (6,552) -- (54,423) (43,142) (65,768)
Transfers on account of other
terminations ............................. (37,493) 30,746 (143,229) (227,487) (384,107)
Net increase in net assets derived from
contractholder transactions ............... 6,075,832 3,783,217 1,853,632 2,984,435 928,111
Net increase in net assets ................. 8,623,215 4,150,597 1,375,883 3,819,914 1,846,679
----------- ---------- ----------- ----------- -----------
Balance at beginning of year ............... 4,150,597 -- 18,056,207 14,236,293 12,389,614
----------- ---------- ----------- ----------- -----------
Balance at end of year ..................... $12,773,812 $4,150,597 $19,432,090 $18,056,207 $14,236,293
=========== ========== =========== =========== ===========
</TABLE>
(a) Commencement of operations.
F-33
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--(Continued)
JPF SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
Oppenheimer
Strategic Bond
Division
-----------------------------------
Period from ) Templeton International I Division
January 12, 1998(a) -----------------------------------------------
Year Ended to Year Ended December 31,
December 31, December 31, -----------------------------------------------
1999 1998 1999 1998 1997
-------------- -------------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income ..................... $ 88,694 $ 1,262 $ 6,360,406 $ 2,427,205 $ 649,381
Net realized gain
on investments ........................... (19,086) (2,048) 338,691 776,195 828,887
Change in net unrealized gain
on investments ........................... (22,018) 24,753 5,803,054 295,855 2,126,633
---------- ---------- ----------- ----------- -----------
Increase in net assets from operations ..... 47,590 23,967 12,502,151 3,499,255 3,604,901
Contractholder transactions--Note F:
Transfers of net premiums ................. 636,974 452,931 11,137,465 11,772,271 9,182,098
Transfers from/to General Account
and within Separate Account, net ......... 781,202 1,307,674 (5,910,457) 2,942,895 7,333,435
Transfers of cost of insurance ............ (196,836) (74,702) (3,422,189) (3,185,143) (2,324,520)
Transfers on account of death ............. -- -- (128,201) (31,916) (64,977)
Transfers on account of other
terminations ............................. (16,951) (6,002) (391,045) (356,684) (437,273)
---------- ---------- ----------- ----------- -----------
Net increase in net assets derived
from contractholder transactions ......... 1,204,389 1,679,901 1,285,573 11,141,423 13,688,763
Net increase in net assets ................. 1,251,979 1,703,868 13,787,724 14,640,678 17,293,664
---------- ---------- ----------- ----------- -----------
Balance at beginning of year ............... 1,703,868 -- 54,756,706 40,116,028 22,822,364
---------- ---------- ----------- ----------- -----------
Balance at end of year ..................... $2,955,847 $1,703,868 $68,544,430 $54,756,706 $40,116,028
========== ========== =========== =========== ===========
</TABLE>
(a) Commencement of operations.
See notes to consolidated financial statements.
F-34
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE A--ORGANIZATION OF ACCOUNT
Jefferson Pilot Financial Separate Account A (the "Separate Account") is a
separate account of Jefferson Pilot Financial Insurance Company ("JP
Financial"). The Separate Account is organized as a unit investment trust
registered under the Investment Act of 1940 as amended. It was established for
the purpose of funding flexible premium variable life insurance policies issued
by JP Financial. As of December 31, 1999, the Separate Account is comprised of
twenty-one investment divisions, eleven of which invest exclusively in the
corresponding portfolios of the Jefferson-Pilot Variable Fund, Inc., one of
which invests in the Templeton International Fund, five of which invest in
certain Fidelity Portfolios, two of which invest in certain Oppenheimer Funds,
and two of which invest in certain MFS Funds, all diversified Series Investment
Companies. 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 JP Financial 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 JP Financial 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.
Use of Estimates: The accompanying financial statements of the Separate
Account have been prepared in accordance with generally accepted accounting
principles. The preparation of financial statements requires management to make
estimates that affect amounts reported in the financial statements and
accompanying notes. Such estimates could change in the future as more
information becomes known, which could impact the amounts reported and
disclosed herein.
NOTE C--AFFILIATED COMPANY TRANSACTIONS
Administrative services necessary for the operation of the Separate Account are
provided by Jefferson Pilot Life Insurance Company, an affiliate of JP
Financial. JP Financial is the principal underwriter of the variable insurance
contracts that utilize the Separate Account. Jefferson Pilot Variable
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-35
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
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, 1999 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, 1999.
<TABLE>
<CAPTION>
Net Asset
Value
Shares Per Share
----------- ----------------
<S> <C> <C>
JPVF International Equity Division 1,332,798 $ 16.069385
JPVF World Growth Stock Division 4,895,518 26.076172
JPVF Global Hard Assets Division 611,602 8.990947
JPVF Emerging Growth Division 3,689,566 40.674453
JPVF Capital Growth Division 7,974,859 39.265001
JPVF Small Company Division 5,024,169 18.054505
JPVF Growth Division 933,447 23.377614
JPVF Growth & Income Division 2,948,651 20.063152
JPVF Balanced Division 2,772,661 15.270695
JPVF High Yield Division 575,664 9.188039
JPVF Money Market Division 2,194,261 10.846432
Fidelity VIP II Contrafund Division 2,228,829 29.150000
Fidelity VIP Equity Income Division 363,619 25.710000
Fidelity VIP Growth Division 824,121 54.930000
Fidelity VIP High Income Division 155,357 11.310000
Fidelity VIP II Index 500 Division 704,954 167.410000
MFS Research Division 457,636 23.340000
MFS Utilities Division 528,558 24.160000
Oppenheimer Bond Division 1,686,672 11.520000
Oppenheimer Strategic Division 610,422 4.970000
Templeton International I Division 3,082,386 22.250000
</TABLE>
F-36
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE F--CONTRACTHOLDER TRANSACTIONS
<TABLE>
<CAPTION>
For the period
January 15, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
-------------------------- -------------------------
Units Amount Units Amount
----------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
JPVF International Equity Division
Issuance of units 1,586,816 $21,345,389 806,326 $ 9,244,760
Redemptions of units 923,203 12,667,542 145,428 1,654,160
--------- ----------- -------- -----------
Net Increase 663,613 $ 8,677,847 660,898 $ 7,590,600
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF World Growth Stock Division
Issuance of units 710,815 $31,376,896 943,836 $39,051,743 1,011,924 $39,798,520
Redemptions of units 970,125 42,679,194 1,018,017 42,181,438 895,063 34,935,217
--------- ------------ --------- ----------- --------- -----------
Net Increase (decrease) (259,310) $(11,302,298) (74,181) $(3,129,695) 116,861 $ 4,863,303
========= ============ ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Global Hard Assets Division
Issuance of units 806,194 $ 7,003,824 437,515 $ 3,764,642 589,273 $ 6,878,213
Redemptions of units 773,498 6,589,824 450,418 3,957,328 475,559 5,621,281
--------- ----------- --------- ----------- --------- -----------
Net Increase 32,696 $ 414,000 (12,903) $ (192,686) 113,714 $ 1,256,932
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Emerging Growth Division
Issuance of units 1,754,220 $49,040,558 2,202,083 $45,173,868 2,187,207 $37,160,174
Redemptions of units 1,468,922 40,001,064 1,639,619 33,549,189 1,257,679 21,114,834
--------- ----------- --------- ----------- --------- -----------
Net Increase 285,298 $ 9,039,494 562,464 $11,624,679 929,528 $16,045,340
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Capital Growth Division
Issuance of units 1,885,588 $92,037,794 1,791,255 $66,165,409 1,727,504 $49,693,896
Redemptions of units 1,232,624 60,129,280 1,324,641 48,892,898 1,166,517 33,798,824
--------- ----------- --------- ----------- --------- -----------
Net Increase 652,964 $31,908,514 466,614 $17,272,511 560,987 $15,895,072
========= =========== ========= =========== ========= ===========
</TABLE>
(a) Commencement of operations
F-37
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE F--CONTRACTHOLDER TRANSACTIONS (Continued)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Small Company Division
Issuance of units 730,490 $27,595,578 916,453 $39,034,264 783,149 $32,220,885
Redemptions of units 845,859 31,946,206 747,736 32,138,906 707,768 29,020,695
--------- ----------- --------- ----------- --------- -----------
Net Increase (decrease) (115,369) $(4,350,628) 168,717 $ 6,895,358 75,381 $ 3,200,190
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
For the period
January 20, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
-------------------------- -------------------------
Units Amount Units Amount
----------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
JPVF Growth Division
Issuance of units 1,109,124 $17,796,382 289,470 $ 3,260,004
Redemptions of units 295,421 4,555,951 162,322 1,781,790
--------- ----------- -------- -----------
Net Increase 813,703 $13,240,431 127,148 $ 1,478,214
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Growth & Income Division
Issuance of units 1,018,584 $29,500,940 1,240,410 $32,593,480 1,110,245 $24,846,023
Redemptions of units 874,919 25,365,761 1,047,665 27,255,015 659,777 14,619,400
--------- ----------- --------- ----------- --------- -----------
Net Increase 143,665 $ 4,135,179 192,745 $ 5,338,465 450,468 $10,226,623
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Balanced Division
Issuance of units 578,685 $12,521,166 622,617 $11,686,604 557,010 $ 9,238,539
Redemptions of units 460,757 9,993,185 449,737 8,444,875 423,594 6,981,094
--------- ----------- --------- ----------- --------- -----------
Net Increase 117,928 $ 2,527,981 172,880 $ 3,241,729 133,416 $ 2,257,445
========= =========== ========= =========== ========= ===========
</TABLE>
(a) Commencement of operations
F-38
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE F--CONTRACTHOLDER TRANSACTIONS (Continued)
<TABLE>
<CAPTION>
For the period
January 8, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
------------------------- ---------------------------
Units Amount Units Amount
---------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
JPVF High Yield Division
Issuance of units 825,411 $ 8,463,868 1,187,107 $ 11,940,568
Redemptions of units 773,012 7,943,026 686,842 6,855,934
-------- ----------- --------- ------------
Net Increase 52,399 $ 520,842 500,265 $ 5,084,634
======== =========== ========= ============
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
JPVF Money Market
Issuance of units 3,240,917 $57,033,996 3,082,919 $52,304,400 2,230,904 $36,446,460
Redemptions of units 2,805,821 49,372,334 2,722,078 46,180,401 2,193,315 35,891,324
--------- ----------- --------- ----------- --------- -----------
Net Increase 435,096 $ 7,661,662 360,841 $ 6,123,999 37,589 $ 555,136
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Fidelity VIP II Contrafund Division
Issuance of units 1,754,276 $33,244,625 2,028,731 $31,008,560 1,533,238 $19,271,804
Redemptions of units 1,129,685 21,491,398 1,065,432 16,037,139 580,340 7,204,967
--------- ----------- --------- ----------- --------- -----------
Net Increase 624,591 $11,753,227 963,299 $14,971,421 952,898 $12,066,837
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Fidelity VIP II Index 500 Division
Issuance of units 3,771,476 $77,313,900 3,405,171 $57,232,632 2,094,648 $28,323,380
Redemptions of units 2,439,500 50,590,001 1,486,670 24,577,055 822,768 11,297,991
--------- ----------- --------- ----------- --------- -----------
Net Increase 1,331,976 $26,723,899 1,918,501 $32,655,577 1,271,880 $17,025,389
========= =========== ========= =========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Fidelity VIP High Income Division
Issuance of units 23,042 $ 283,589 71,621 $ 908,088 797,876 $ 9,316,213
Redemptions of units 99,119 1,228,210 455,698 5,795,150 462,054 5,390,927
--------- ----------- --------- ----------- --------- -----------
Net Increase (decrease) (76,077) $ (944,621) (384,077) $(4,887,062) 335,822 $ 3,925,286
========= =========== ========= =========== ========= ===========
</TABLE>
(a) Commencement of operations
F-39
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE F--CONTRACTHOLDER TRANSACTIONS (Continued)
<TABLE>
<CAPTION>
For the period
January 8, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
----------------------------- --------------------------
Units Amount Units Amount
----------- --------------- --------- --------------
<S> <C> <C> <C> <C>
Fidelity VIP Growth Division
Issuance of units 2,522,313 $39,479,910 655,774 $ 7,806,648
Redemptions of units 672,246 10,641,557 122,386 1,450,555
--------- ----------- ------- -----------
Net Increase 1,850,067 $28,838,353 533,388 $ 6,356,093
========= =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
For the period
January 8, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
----------------------------- --------------------------
Units Amount Units Amount
----------- --------------- --------- --------------
<S> <C> <C> <C> <C>
Fidelity VIP Equity Income Division
Issuance of units 1,131,302 $13,584,576 982,482 $10,549,873
Redemptions of units 681,291 8,124,583 623,457 6,583,063
--------- ----------- ------- -----------
Net Increase 450,011 $ 5,459,993 359,025 $ 3,966,810
========= =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
For the period
January 8, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
--------------------------- --------------------------
Units Amount Units Amount
---------- -------------- --------- --------------
<S> <C> <C> <C> <C>
MFS Reseach Division
Issuance of units 672,625 $ 8,701,356 631,245 $ 7,154,159
Redemptions of units 311,684 4,067,961 288,287 3,085,230
------- ----------- ------- -----------
Net Increase 360,941 $ 4,633,395 342,958 $ 4,068,929
======== =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
For the period
January 12, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
---------------------------- --------------------------
Units Amount Units Amount
---------- --------------- --------- --------------
<S> <C> <C> <C> <C>
MFS Utilities Division
Issuance of units 930,122 $11,856,880 667,553 $ 7,474,706
Redemptions of units 458,547 5,781,048 324,319 3,691,489
------- ----------- ------- -----------
Net Increase 471,575 $ 6,075,832 343,234 $ 3,783,217
======= =========== ======= ===========
</TABLE>
(a) Commencement of operations
F-40
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JPF SEPARATE ACCOUNT A
DECEMBER 31, 1999
NOTE F--CONTRACTHOLDER TRANSACTIONS (Continued)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Oppenheimer Bond Division
Issuance of units 646,006 $13,940,162 1,052,232 $22,601,035 396,342 $7,858,820
Redemptions of units 561,178 12,086,530 913,765 19,616,600 350,970 6,930,709
--------- ----------- --------- ----------- ------- ----------
Net Increase 84,828 $ 1,853,632 138,467 $ 2,984,435 45,372 $ 928,111
========= =========== ========= =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
For the period
January 12, 1998(a)
Year Ended December 31, through
1999 December 31, 1998
------------------------ -------------------------
Units Amount Units Amount
---------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
Oppenheimer Strategic Division
Issuance of units 369,193 $ 3,720,887 374,307 $ 3,726,685
Redemptions of units 250,262 2,516,498 204,970 2,046,784
--------- ----------- ------- -----------
Net Increase 118,931 $ 1,204,389 169,337 $ 1,679,901
========= =========== ======= ===========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------
1999 1998 1997
--------------------------- --------------------------- ---------------------------
Units Amount Units Amount Units Amount
----------- --------------- ----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Templeton International Division
Issuance of units 1,586,916 $28,116,196 2,289,338 $37,928,398 2,174,212 $32,480,846
Redemptions of units 1,515,331 26,830,623 1,615,048 26,786,975 1,245,865 18,792,083
--------- ----------- --------- ----------- --------- -----------
Net Increase 71,585 $ 1,285,573 674,290 $11,141,423 928,347 $13,688,763
========= =========== ========= =========== ========= ===========
</TABLE>
(a) Commencement of operations
F-41
<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 SEC
such supplementary and periodic information, documents, and reports as may be
prescribed by any rule or regulation of the Securities and Exchange Commission
heretofore, or hereafter duly adopted pursuant to authority conferred in that
section.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Rule 484(b)(1) of the Securities Act of 1933, 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 THE REASONABLENESS OF FEES AND CHARGES
Jefferson Pilot Financial Insurance Company hereby represents that the fees and
charges deducted under the Flexible Premium Variable Life Insurance Policies
hereby registered by this Registration Statement in the aggregate are reasonable
in relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by Jefferson Pilot Financial Insurance Company.
REPRESENTATION PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rule 6e-3(T) under the Investment Company Act of
1940, as amended (the "1940 Act").
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following pages and documents:
The facing sheet
The prospectus consisting of 63 pages
The undertaking to file reports
The undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
regarding indemnification
The representation as to fees and charges.
The representation pursuant to Rule 6e-3(T)
The signatures
Written consents of the following persons:
(a) Richard Dielensnyder, FSA, MAAA, contained in Exhibit 6 below.
(b) Ernst & Young, LLP, contained in Exhibit 7 below.
The following exhibits:
<PAGE>
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:
(a) (i) Certified Copy of Resolution of the Executive Committee of the Board
of Directors of JP Financial Insurance Company establishing Chubb Separate
Account A. (Incorporated by reference to Registrant's Registration Statement on
Form S-6, filed on December 10, 1993, File No. 33-72830).
(ii) Certified Copy of Resolution of the Board of Directors of JP Financial
Insurance Company authorizing the registration of a new policy offered through
the Chubb Separate Account A (Incorporated by reference to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on Form S-6, filed on
March 13, 1996, File No. 33-01781).
(b) Not Applicable
(c) (i) Form of Distribution Agreement among JP Financial Insurance Company,
Chubb Separate Account A, and Chubb Securities Corporation. (Incorporated by
reference to Registrant's Registration Statement on Form S-6, filed on December
10, 1993, File No. 33-72830).
(ii) Specimen Variable Contracts Selling Agreement between Jefferson Pilot
Variable Corporation and Selling Broker-Dealers (Incorporated by reference to
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6, filed
on April 21, 2000, File No. 333-93367).
(iii) Schedule of Sales Commissions (to be filed by Amendment)
(d) Not Applicable
(e)
(i) Specimen last survivor flexible premium variable life insurance policy
(ii) Forms of Riders (Incorporated by reference to Pre-Effective Amendment
No. 1 to the Registration Statement on Form S-6, filed on April 21, 2000, File
No. 333-93367).
(f) (i) Amended and Restated Charter, with all amendments, of JP Financial
Insurance Company. Incorporated by reference to Exhibit 1(f)(i) of Registrant's
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6, filed
March 13, 1996, File No. 33-01781.
(ii) By-Laws of JP Financial Insurance Company. (Incorporated by reference to
Exhibit 1(f)(i) of Registrant's Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6, filed March 13, 1996, File No. 33-01781).
(g) Not Applicable
(h) (i) Participation Agreement by and among Oppenheimer Variable Account
Funds, Chubb Life Insurance Company and Oppenheimer Funds Inc., dated January 8,
1998.*
(ii) Participation Agreement among MFS Variable Trust, Chubb Life Insurance
Company and Massachusetts Financial Services Company dated December 9, 1997.*
(iii) Participation Agreement among Templeton Variable Products Series Fund,
Franklin Templeton Distributors Inc., and Chubb Life Insurance Company, dated
May 1, 1995.*
(iv) Participation Agreement among Variable Insurance Products Fund, Fidelity
Distributors Corporation and Chubb Life Insurance Company dated May 1, 1996.*
(v) Participation Agreement among Variable Insurance Products Fund II,
Fidelity Distributors Corporation and Chubb Life Insurance Company
dated May 1, 1996.*
* Incorporated by reference to Post-Effective Amendment No. 3 to Registrant's
Registration Statement on Form S-6 dated December 1, 1998, File No. 33-01781.
<PAGE>
(i) Not applicable
(j) Specimen Application (Incorporated by reference to Pre-Effective Amendment
No. 1 to the Registration Statement on Form S-6, filed on April 21, 2000, File
No. 333-93367).
2. Opinion of counsel as to securities being registered.
3. Not applicable.
4. Not applicable.
5. Actuarial opinions and consents of Richard Dielensnyder, FSA, MAAA.
6. N/A
7. Consent of Independent Auditors.
8. Form of Reinsurance Agreement. (Incorporated by reference to Registrant's
Pre-effective Amendment No. 1 to the Registration Statement on Form S-6, filed
May 24, 1994, File No. 33-72830).
9. Memorandum regarding reliance on Order of the Commission to deduct the DAC
Tax Charge (Incorporated by reference to Pre-Effective Amendment No.1 to the
Registration Statement on Form S-6 filed on March 13, 1996, File No. 33-01781).
27. Financial Data Schedule. Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
JPF Separate Account A, has caused this Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-6 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 6th day of November, 2000.
(Seal) JPF Separate Account A
(Registrant)
Jefferson Pilot Financial Insurance Company
(Depositor)
By: /s/ Dennis R. Glass
---------------------------
Dennis R. Glass
Title: Chief Financial Officer
Attest: /s/ Reggie D. Adamson
---------------------------
Reggie D. Adamson
Chief Accounting Officer
II-58t
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Jefferson
Pilot Financial Insurance Company has caused this Pre-Effective Amendment No. 1
Registration Statement on Form S-6 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 6th day of November, 2000.
(Seal) Jefferson Pilot Financial Insurance Company
By: /s/ Dennis R. Glass
----------------------------
Dennis R. Glass
Title: Chief Financial Officer
Attest: /s/ Reggie D. Adamson
--------------------------------
Reggie D. Adamson
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signatures Title
/s/ Dennis R. Glass November 6, 2000
----------------------------------- Date ------------------------
Dennis R. Glass Director
/s/ Kenneth C. Mlekosh November 6, 2000
----------------------------------- Date ------------------------
Kenneth C. Mlekosh Director
/s/ David A. Stonecipher November 6, 2000
----------------------------------- Date ------------------------
David A. Stonecipher Director
/s/ Robert D. Bates November 6, 2000
----------------------------------- Date ------------------------
Robert D. Bates Director
II-59t
