Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
SEPARATE ACCOUNT FP
of
THE EQUITABLE LIFE ASSURANCE Edward D. Miller, President
SOCIETY OF THE UNITED STATES The Equitable Life Assurance Society of
(Exact Name of Trust) the United States
1290 Avenue of the Americas
THE EQUITABLE LIFE ASSURANCE New York, New York 10104
SOCIETY OF THE UNITED STATES (Name and Address of Agent for Service)
(Exact Name of Depositor)
1290 Avenue of the Americas
New York, New York 10104
(Address of Depositor's Principal
Executive Offices)
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Telephone Number, Including Area Code: (212) 554-1234
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Please send copies of all communications to:
ROBIN M. WAGNER, ESQ. with a copy to:
Vice President and Counsel THOMAS C. LAUERMAN
The Equitable Life Assurance Freedman, Levy, Kroll & Simonds
Society of the United States 1050 Connecticut Avenue, N.W. Suite 825
1290 Avenue of the Americas Washington, D.C. 20036
New York, New York 10104
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Securities Being Registered: Units of Interest in Separate Account FP
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Approximate date of proposed public offering: As soon as practical after the
effectiveness of the Registration Statement.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the 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>
SEPARATE ACCOUNT FP OF
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
Reconciliation and Tie
Accumulator Life(SM)
Items of
Form N-8B-2* Captions in Accumulator Life Prospectus
1(a), (b) About Our Separate Account FP.
2 Who is Equitable Life?
3 Inapplicable
4 How We Market the Policies.
5,6 About Our Separate Account FP.
7 Inapplicable**
8 Inapplicable**
9 Inapplicable
10(a) About our Separate Account FP: Policy features and benefits:
Your options for receiving policy proceeds; More information
that applies to your policy: Ways we pay policy proceeds;
Assigning your policy.
(b) Determining your policy's value: Your account value; Your
policy's value in our variable investment options; More
information about other matters: About our separate account
FP.
(c)(d) Charges and Expenses You Will Pay: Changes in charges;
Accessing Your Money: Borrowing from your policy; Making
withdrawals from your policy; Surrendering your policy for its
net cash surrender value; More information about procedures
that apply to your policy: Requirements for surrender
requests; Ways we pay policy proceeds; Assigning your policy;
Tax Treatment of distributions to you; Dates and prices at
which policy events occur.
(e) Policy features and benefits: How you pay for your policy;
Policy "lapse" and termination; --Restoring a terminated
policy; Your death benefit guarantee.
(f) More information about other matters: Your voting privileges.
10(g)(1) 10(g)(2) More information about other matters: Changes we can make;
10(h)(1) 10(h)(2) Your voting privileges.
10(g)(3) 10(g)(4) Inapplicable**
10(h)(3) 10(h)(4)
_________________
*Registrants include this Reconciliation and Tie in their Registration Statement
in compliance with Instruction 4 as to the Prospectus as set out in Form S-6.
Separate Account FP will be an investment company registered under the
Investment Company Act of 1940 on a Form N-8B-2 Registration Statement. Pursuant
to Sections 8 and 30(b)(1) of the Investment Company Act of 1940, Rule 30a-1
under the Act, and Forms N-8B-2 and N-SAR under that Act, the Account keeps its
Form N-8B-2 Registration Statement current through the filing of periodic
reports required by the Securities and Exchange Commission.
**Not required pursuant to either Instruction 1(a) as to the Prospectus as set
out in Form S-6 or the administrative practice of the Commission and its staff
of adapting the disclosure requirements of the Commission's registration
statement forms in recognition of the differences between variable life
insurance policies and other periodic payment plan certificates issued by
investment companies and between separate account organized as management
companies and unit investment trusts.
<PAGE>
10(i) Determining your policy's value; Tax information; Charges and
expenses you will pay; Policy features and benefits: Variable
investment options within your policy; Transferring your money
among our variable investment options.
11 What is Accumulator Life; Variable investment options within
your policy.
12(a) What is Accumulator Life?
12(b) Inapplicable
12(c) About our Separate Account FP.
12(d) How we market the policies.
12(e) Inapplicable**
13(a) Charges and expenses you will pay; More information about
other matters: Deducting Policy Charges.
13(b), (c), (g) Inapplicable**
13(d) Variations among Accumulator Life Policies
13(e), (f) Inapplicable
14,15 Policy features and benefits: How you pay for your policy;
More information about procedures that apply to your policy:
Ways to make premium and loan payments; Dates and prices at
which policy events occur; policy issuance.
16 More information about other matters: About our Separate
Account FP; Determining your policy's value: Your account
value; Transferring your money among our variable investment
options; Accessing your money.
17(a),(b) Captions referenced under Items 10 (c), (d) and (e) above.
17(c) Inapplicable**
18(a) Policy features and benefits; determining your policy's value.
18(b), (d) Inapplicable
18(c) Tax Information: Our taxes.
19 More information about other matters: Reports we will send
you; Your voting privileges.
20(a) Captions referenced under Items 10(g)(1), 10(g)(2), 10(h)(1)
and 10(h)(2).
20(b), 20(c),
20(d), 20(e),
20(f) Inapplicable
21(a), 21(b) Accessing your money: Borrowing from your policy.
21(c) Inapplicable**
<PAGE>
22 More information about other matters: Suicide and certain
misstatements; When we pay policy proceeds; --Delay to
challenge coverage.
23 Inapplicable
24 All prospectus captions.
25 Who is Equitable Life?
26(a), 26(b) Inapplicable**
27 Who is Equitable Life?; More Information about other
matters: How we market the policies.
28 More information about other matters; Directors and principal
officers.
29 Who is Equitable Life?
30 Inapplicable
31, 32, 33, 34 Inapplicable**
35 More information about other matters: Insurance regulation
that applies to Equitable Life.
36 Inapplicable**
37 Inapplicable**
38 More information about other matters: How we market the
policies.
39(a) Who is Equitable Life?
39(b) More information about other matters: How we market the
policies.
40(a) Inapplicable** (But see "More information about other matters:
How we market the policies").
40(b) Inapplicable
41(a) Who is Equitable Life? More information about other
matters: How we market the policies.
41(b),41(c),42 Inapplicable**
43 Inapplicable
44 (a) (1) Policy features and benefits; Determining your policy's
value.
44 (a) (2) More information about other matters: About our Separate
Account FP; About our general account; Transfers of your
account value; Telephone requests; Determining your policy's
value: Your account value; Accessing your money; Policy
features and benefits: About your life insurance benefit.
<PAGE>
44(a)(3) Determining your policy's value; Transferring your money
among our variable investment options; Accessing Your Money.
44(a)(4) Tax Information.
44(a)(5) Charges and expenses you will pay; More information about
other matters: Deducting policy charges.
44(a)(6) Determining your policy's value: Your account value; More
Information about other matters: About our Separate Account
FP; Transfers of your account value; Deducting policy charges;
Charges and expenses you will pay.
44(b) Inapplicable**
44(c) Charges and expenses you will pay: Changes in charges; More
information about other matters: Changes we can make.
45 Inapplicable
46(a) Captions referenced under Item 44(a) above.
46(b) Inapplicable**
47,48,49 Inapplicable
50 More information about other matters: About our Separate
Account FP.
51(a)-(j) Inapplicable**
52(a), (c) More information about other matters: Changes we can make.
52(b), (d) Inapplicable
53(a) Tax Information: Our taxes.
54(b), 54 Inapplicable
55 Inapplicable**
56-59 Inapplicable**
<PAGE>
ACCUMULATOR LIFE(Service Mark)
A modified single premium variable life
insurance policy
PROSPECTUS DATED MAY 12, 2000
Please read this prospectus and keep it for future reference. It contains
important information that you should know before purchasing, or taking any
other action, under a policy. Also, at the end of this prospectus you will find
attached the prospectus for EQ Advisors Trust, which contains important
information about its Portfolios.
This prospectus describes many aspects of an Accumulator Life policy,
but is not itself a policy. The policy is the actual contract that determines
your benefits and obligations under Accumulator Life. To make this prospectus
easier to read, we sometimes use different words than the policy. Equitable Life
or your financial professional can provide any further explanation about your
policy.
WHAT IS ACCUMULATOR LIFE?
Accumulator Life is issued by Equitable Life. It provides life
insurance coverage, plus the opportunity for you to earn a return in one or more
of the following variable investment options:
VARIABLE INVESTMENT OPTIONS:
Fixed income
o Alliance High Yield
o Alliance Intermediate Government Securities
o Alliance Money Market
o Alliance Quality Bond
Domestic stocks
o EQ/Aggressive Stock(1)
o Alliance Common Stock
o Alliance Equity Index
o Alliance Growth and Income
o EQ/Alliance Premier Growth
o Alliance Small Cap Growth
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1 Formerly named "Alliance Aggressive Stock."
121315 1
<PAGE>
o EQ/Alliance Technology(2)
o Capital Guardian Research
o Capital Guardian U.S. Equity
o EQ/Evergreen
o MFS Emerging Growth Companies
o MFS Growth with Income
o MFS Research
o Mercury Basic Value Equity(3)
o EQ/Putnam Growth & Income Value
o T. Rowe Price Equity Income
o Warburg Pincus Small Company Value
International stocks
o Alliance Global
o Alliance International
o Morgan Stanley Emerging Markets Equity
o T. Rowe Price International Stock
Balanced/hybrid
o Alliance Conservative Investors
o Alliance Growth Investors
o EQ/Balanced(4)
o EQ/Evergreen Foundation
o Mercury World Strategy(5)
o EQ/Putnam Balanced
Amounts that you allocate under your policy to any of the variable
investment options are invested in a corresponding "Portfolio" that is part of
EQ Advisors Trust, a mutual fund. Your investment results in a variable
investment option will depend on those of the related Portfolio. Any gains will
generally be tax deferred, and the life insurance benefits we pay if the
policy's insured person dies will generally be income tax free.
Your Accumulator Life policy likely will be a "modified endowment
contract," which may subject you to special tax rules and penalties on any
taxable distributions, including loans. See "Tax information" later in this
prospectus.
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2 Anticipated to become available on or about May 22, 2000. The option may
not be available in California.
3 Formerly named "Merrill Lynch Basic Value Equity."
4 Formerly named "Alliance Balanced."
5 Formerly named "Merrill Lynch World Strategy."
121315 2
<PAGE>
OTHER CHOICES YOU HAVE. You can tailor the policy to your needs. For example,
subject to our rules, you decide (1) how much you contribute to your policy,
which determines how much insurance coverage you initially have, (2) whether to
borrow or withdraw amounts you have accumulated and (3) whether to take
advantage of "free withdrawals," which do not incur surrender charges.
Additionally, if this policy is issued as the result of an exchange of another
policy under Section 1035 of the Internal Revenue Code, you have the option of
carrying over any loan from the exchanged policy to this Accumulator Life
policy, subject to our approval. The amount of loan you may carry over is
limited to 50% of your initial premium.
Your financial professional can provide you with information about all
forms of life insurance available from us and help you decide which may best
meet your needs. Replacing existing insurance with Accumulator Life or another
policy may not be to your advantage.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE POLICIES
ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO
INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
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<PAGE>
Contents of this prospectus
Accumulator Life
What is Accumulator Life? Cover
Who is Equitable Life?
How to reach us
Charges and expenses you will pay
Risks you should consider
Policy features and benefits
How you pay for your policy
Your death benefit guarantee
Policy "lapse" and termination
About your death benefit
Variable investment options within your policy
Your options for receiving policy proceeds
Your right to cancel within a certain number of days
Variations among Accumulator Life policies
Determining your policy's value
Your account value
Transferring your money among our variable investment options
Transfers you can make
Telephone transfers
Our dollar cost averaging service
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<PAGE>
Our asset rebalancing service
Accessing your money
Borrowing from your policy
Making withdrawals from your policy
Surrendering your policy for its net cash surrender value
Tax information
Basic tax treatment for you and your beneficiary
Tax treatment of distributions to you
Effect of policy on interest deductions taken by business entities
Requirement that we diversify investments
Estate, gift, and generation-skipping taxes
Employee benefit programs
Our taxes
When we withhold taxes from distributions
Possibility of future tax changes
More information about procedures that apply to your policy
Ways to make premium and loan payments
Requirements for surrender requests
Ways we pay policy proceeds
Assigning your policy
Dates and prices at which policy events occur
Policy issuance
Gender-neutral policies
121315 5
<PAGE>
More information about other matters
Your voting privileges
About our Separate Account FP
About our general account
Transfers of your account value
Telephone requests
Deducting policy charges
Suicide and certain misstatements
When we pay policy proceeds
Changes we can make
Reports we will send you
Legal proceedings
Illustrations of policy benefits
SEC registration statement
How we market the policies
Insurance regulation that applies to Equitable Life
Directors and principal officers
Financial statements of Separate Account FP and Equitable Life
Separate Account FP financial statements FSA-1
Equitable Life financial statements F-1
Appendices
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<PAGE>
I--Our data on market performance A-1
II--An index of key words and phrases B-1
EQ Advisors Trust Prospectus (follows after page B-1 of this prospectus, but is
not a part of this prospectus)
[THE FOLLOWING ARE THE FOOTNOTES TO THE TABLE OF CONTENTS PAGE:]
"We," "our" and "us" refers to Equitable Life. "Financial professional"
means the registered representative who is offering you this policy.
When we address the reader of this prospectus with words such as "you"
and "your," we mean the person or persons having the right or responsibility
that the prospectus is discussing at that point. This usually is the policy's
owner. If a policy has more than one owner, all owners must join in the exercise
of any rights an owner has under the policy, and the word "owner" therefore
refers to all owners.
When we use the word "state," we also mean any other local jurisdiction
whose laws or regulations affect a policy.
We do not offer Accumulator Life in all states. This prospectus does
not offer Accumulator Life anywhere such offers are not lawful. Equitable Life
does not authorize any information or representation about the offering other
than that contained or incorporated in this prospectus, in any current
supplements thereto, or in any related sales materials authorized by Equitable
Life.
121315 7
<PAGE>
Who is Equitable Life?
We are The Equitable Life Assurance Society of the United States
("Equitable Life"), a New York stock life insurance corporation. We have been
doing business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the policies.
AXA Financial, Inc. and its consolidated subsidiaries managed
approximately $462.7 billion in assets as of December 31, 1999. For more than
100 years Equitable Life has been among the largest insurance companies in the
United States. We are licensed to sell life insurance and annuities in all fifty
states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our
home office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
HOW TO REACH US
To obtain (1) any forms you need for communicating with us, (2) unit
values and other values under your policy, and (3) any other information or
materials that we provide in connection with your policy or the Portfolios, you
can contact us
By mail:
at the Post Office Box for our Administrative Office:
P.O. Box 1047
Charlotte, North Carolina 28201-1047
By express delivery only:
at the Street Address for our Administrative Office:
Equitable Life - National Operations Center
10840 Ballantyne Commons Parkway
Charlotte, North Carolina 28277
By toll-free phone:
1-888-855-5100 (automated system available 22 hours a day, from 6 AM to 4 AM,
Eastern Time; customer service representative available weekdays 8 AM to 9 PM,
Eastern Time)
By e-mail:
[email protected]
121315 8
<PAGE>
By fax:
1-704-540-9714
By Internet:
Our Web site (www.equitable.com) can also provide you information; some of the
forms listed below are available for you to print out through our Web site by
clicking on "Contact Us." You can also access your policy information through
our Web site by enrolling in EQAccess.
We require that the following types of communications be on specific
forms we provide for that purpose:
(1) request for dollar cost averaging (our automatic transfer
service);
(2) authorization for telephone transfers by a person who is not both
the insured person and the owner;
(3) request for asset rebalancing; and
(4) designation of new policy owner(s).
We also have specific forms that we recommend you use for the following:
(a) policy surrenders;
(b) address changes;
(c) beneficiary changes;
(d) transfers between variable investment options; and
(e) changes in allocation percentages for loan repayments, deductions
and any additional premium payment.
You can change your allocation percentages and/or transfer among
investment options (1) by toll-free phone or (2) over the Internet, through
EQAccess. This feature is anticipated to be available in EQAccess by the end of
2000. For more information about transaction requests you can make by phone or
over the Internet, see "Telephone and EQAccess transfers" and "Telephone and
EQAccess requests" later in this prospectus.
Except for properly authorized telephone or Internet transactions, any
notice or request that does not use our standard form must be in writing. It
must be dated and signed by you and should also specify your name, the insured
person's name (if different), your policy number, and adequate details about the
notice you wish to give or other action
121315 9
<PAGE>
you wish us to take. We may require you to return your policy to us before we
make certain policy changes that you may request.
The proper person to sign forms, notices and requests would normally be
the owner or any other person that our procedures permit to exercise the right
or privilege in question. If there are joint owners all must sign. Any
irrevocable beneficiary or assignee that we have on our records also must sign
certain types of requests.
You should send all requests and notices to our Administrative Office
at the addresses specified above. We will also accept requests and notices by
fax at the above number, if we believe them to be genuine. We reserve the right,
however, to require an original signature before acting on any faxed item. You
must send all payments to our Administrative Office at the above addresses;
except that you should send any payments for which we have billed you to the
address on the billing notice.
We reserve the right to limit access to telephone, Internet or fax
services if we determine that you are engaged in a market timing strategy. See
"Transfers of your account value - Market timing" later in this prospectus.
121315 10
<PAGE>
Charges and expenses you will pay
TABLE OF POLICY CHARGES
This table shows the charges that we deduct under the terms of your
policy. For more information about some of these charges, see "Deducting policy
charges" later in this prospectus.
121315 11
<PAGE>
TABLE OF POLICY CHARGES
<TABLE>
<CAPTION>
<S> <C>
CHARGES WE DEDUCT FROM AMOUNTS
YOU CONTRIBUTE TO YOUR POLICY: None
CHARGES WE DEDUCT FROM
YOUR POLICY'S VALUE EACH MONTH:
Cost of insurance charges. . . . . . . . . . . . . The maximum charges are specified in your
policy. We currently limit this charge to
1.15% (effective annual rate) of your
policy's account value(1), unless the
maximum charge specified by your policy is
less. However, we may increase this 1.15%
rate up to the maximum charges specified
in your policy. (2)(3)
Charge for administration and taxes . . . . . . . . 50% (effective annual rate) of your
policy's account value. (3)
Guaranteed minimum death benefit charge. . . . . . . 20% (effective annual rate) of your
policy's account value. (We may increase
this rate up to .50%.) (3)
CHARGES WE DEDUCT FROM YOUR POLICY'S UNIT VALUES EACH DAY:
Mortality and expense risk charge . . . . . . . . . . 1.35% (effective annual rate) of the value
you have in our variable investment
options.
121315 12
<PAGE>
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE
AT THE TIME OF THE TRANSACTION:
Surrender (turning in) of your policy
during its first 9 years. . . . . . . . . . . . . . . A surrender charge based on the policy's
age and a percentage of the initial
premium(4), as follows:
Policy Year Percentage Charge
1 10%
2 9.5
3 9
4 8.5
5 8
6 7
7 5
8 3
9 1
10 and later 0
Partial withdrawal during the first 9 years . . . . . A surrender charge equal to the applicable
percentage specified above, applied to
amounts of partial withdrawals in any
policy year that cumulatively exceed 15%
of: your policy account value less
outstanding loans and loan interest, as of
the end of the previous policy year. (5)
Transfers among investment options . . . . . . . . . No charge for any transfer. (We may,
however, increase this charge up to $25
per transfer.) (6)
Requesting a policy illustration . . . . . . . . . . No charge. (We may, however, increase
this charge up to $25 per illustration
request, if you request more than one in
any policy year.)
</TABLE>
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(1) "Account value" is defined below in "Determining your policy's value". The
account value used to determine the amount of each monthly charge is the
account value on the date the charge is due.
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<PAGE>
(2) See "Monthly cost of insurance charge" later in this prospectus.
(3) Not applicable after the insured person reaches age 100.
(4) For purposes of this calculation, the amount of the initial premium would
be reduced by the amounts of any prior partial withdrawals that were
subject to a surrender charge.
(5) Over the life of your policy, the cumulative amount of your partial
withdrawals on which we impose any surrender charge will not exceed the
amount of your initial premium.
(6) No charge, however, would ever apply to a transfer made through our dollar
cost averaging or asset rebalancing services.
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<PAGE>
YOU ALSO BEAR YOUR PROPORTIONATE SHARE OF ALL FEES AND EXPENSES PAID BY
A "PORTFOLIO" THAT CORRESPONDS TO ANY VARIABLE INVESTMENT OPTION YOU ARE USING:
This table shows the fees and expenses paid by each Portfolio for the
year ended December 31, 1999. These fees and expenses are reflected in the
Portfolio's net asset value each day. Therefore, they reduce the investment
return of the Portfolio and of the related variable investment option. Actual
fees and expenses are likely to fluctuate from year to year. All figures are
expressed as an annual percentage of each Portfolio's daily average net assets.
<TABLE>
<CAPTION>
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1999 FEES AND EXPENSES
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MANAGEMENT 12B-1 FEE OTHER TOTAL FEE WAIVERS NET TOTAL
FEE(1) EXPENSES(2) ANNUAL AND/OR EXPENSE ANNUAL
EXPENSES REIMBURSEMENTS(3) EXPENSES
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89% -- 0.89%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Balanced 0.57% 0.25% 0.05% 0.87% -- 0.87%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 0.46% 0.25% 0.04% 0.75% -- 0.75%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Conservative Investors 0.60% 0.25% 0.07% 0.92% -- 0.92%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Equity Index 0.25% 0.25% 0.05% 0.55% -- 0.55%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Global 0.73% 0.25% 0.09% 1.07% -- 1.07%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth & Income 0.59% 0.25% 0.05% 0.89% -- 0.89%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Growth Investors 0.57% 0.25% 0.05% 0.87% -- 0.87%
- -----------------------------------------------------------------------------------------------------------------------
Alliance High Yield 0.60% 0.25% 0.05% 0.90% -- 0.90%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Intermediate Government Securities 0.50% 0.25% 0.07% 0.82% -- 0.82%
- -----------------------------------------------------------------------------------------------------------------------
Alliance International 0.85% 0.25% 0.20% 1.30% -- 1.30%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Money Market 0.34% 0.25% 0.05% 0.64% -- 0.64%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth(4) 0.90% 0.25% 0.23% 1.38% 0.23% 1.15%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Quality Bond 0.53% 0.25% 0.05% 0.83% -- 0.83%
- -----------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth(5) 0.75% 0.25% 0.07% 1.07% -- 1.07%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology(6) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
- -----------------------------------------------------------------------------------------------------------------------
Capital Guardian Research(4) 0.65% 0.25% 0.47% 1.37% 0.42% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity(4) 0.65% 0.25% 0.34% 1.24% 0.29% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 0.65% 0.25% 1.87% 2.77% 1.82% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 0.60% 0.25% 1.07% 1.92% 0.97% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 0.60% 0.25% 0.17% 1.02% 0.07% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 0.70% 0.25% 0.46% 1.41% 0.21% 1.20%
- -----------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 0.65% 0.25% 0.17% 1.07% 0.07% 1.00%
- -----------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 0.60% 0.25% 0.37% 1.22% 0.27% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
MFS Research 0.65% 0.25% 0.17% 1.07% 0.12% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 1.00% 2.40% 0.65% 1.75%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Balanced 0.60% 0.25% 0.28% 1.13% 0.23% 0.90%
- -----------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.16% 1.01% 0.06% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income 0.60% 0.25% 0.21% 1.06% 0.11% 0.95%
- -----------------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock 0.85% 0.25% 0.30% 1.40% 0.15% 1.25%
- -----------------------------------------------------------------------------------------------------------------------
Warburg Pincus Small Company Value 0.75% 0.25% 0.24% 1.24% 0.14% 1.10%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The management fees shown reflect revised management fees, effective on or
about May 1, 2000, which were approved by shareholders. The management fees
shown for EQ/Putnam Balanced, EQ/Putnam Growth & Income
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Value, Warburg Pincus Small Company Value and T. Rowe Price International
Stock do not reflect the waiver of a portion of each Portfolio's investment
management fees that is currently in effect. The management fee for each
Portfolio cannot be increased without a vote of each Portfolio's
shareholders.
(2) On October 18, 1999 the Alliance Portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) became part of EQ Advisors Trust. Other
Expenses for these Portfolios have been restated to reflect the estimated
expenses that would have been incurred, had these Portfolios been
portfolios of EQ Advisors Trust for the full year ended December 31, 1999.
The restated expenses reflect an increase of 0.01% for each of these
Portfolios.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to certain Portfolios, which is effective
from May 1, 2000 through April 30, 2001. Under this agreement Equitable
Life has agreed to waive or limit its fees and assume other expenses of
each of these Portfolios, if necessary, in an amount that limits each
Portfolio's Total Annual Expenses (exclusive of interest, taxes, brokerage
commissions, capitalized expenditures and extraordinary expenses) to not
more than the amounts specified above as Net Total Annual Expenses.
Portfolios that show "--" in this column have no expense limitation
arrangement in effect. See the EQ Advisors Trust prospectus for more
information about the Expense Limitation Agreement. The expense limitations
for MFS Emerging Growth Companies, MFS Growth with Income, MFS Research,
Mercury Basic Value Equity, EQ/Putnam Growth & Income Value, T. Rowe Price
Equity Income, T. Rowe Price International Stock and Warburg Pincus Small
Company Value Portfolios reflect an increase effective on May 1, 2000. The
expense limitation for the EQ/Evergreen Portfolio reflects a decrease
effective on May 1, 2000.
(4) Initial seed capital was invested in the EQ/Alliance Premier Growth,
Capital Guardian Research and Capital Guardian U.S. Equity Portfolios on
April 30, 1999; thus, Other Expenses for these Portfolios have been
estimated.
(5) Prior to October 18, 1999, Total Annual Expenses for the Alliance Small Cap
Growth Portfolio were limited to 1.20% under an expense limitation
arrangement which is no longer in effect. The amounts shown have been
restated to reflect the expenses that would have been incurred in 1999,
absent the expense limitation arrangement.
(6) Expenses shown are based on estimates for 2000. Initial seed capital will
be invested in the EQ/Alliance Technology Portfolio on or about May 1,
2000.
HOW WE ALLOCATE CHARGES AMONG YOUR VARIABLE INVESTMENT OPTIONS
Generally, all monthly charges will be deducted in the same proportion
as the allocation that you provide in your policy application, unless you
instruct us otherwise. If we cannot deduct the charge as your most current
instructions direct, we will allocate the deduction among your variable
investment options proportionately to your value in each.
CHANGES IN CHARGES
We reserve the right in the future to (1) make a charge for certain
taxes or reserves set aside for taxes (see "Our taxes" below), (2) make a charge
for the operating expenses of our variable investment options (including,
without limitation, SEC registration fees and related legal counsel fees and
auditing fees), (3) make a charge of up to $25 for each transfer among variable
investment options that you make, (4) make a charge of up to $25 each time you
request a policy illustration, if you request more than one in any policy year
or (5) modify your monthly cost of insurance charge or your guaranteed minimum
death benefit charge, but not above the maximum rates stated in your policy.
Any changes that we make in our current charges or charge rates will be
by class of insured person and will be based on changes in future expectations
about such factors as investment earnings, mortality experience, the length of
time policies will remain in effect, expenses and taxes. Any changes in charges
may apply to then outstanding
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policies, as well as to new policies, but we will not raise any charges above
any maximums discussed in this prospectus and shown in your policy.
Risks you should consider
Some of the principal risks of investing in a policy are as follows:
o Your policy's account value and death benefit will increase or
decrease based, in part, on the performance of your variable investment options.
o You may have to pay a surrender charge, taxes or tax penalties if you
make a surrender or partial withdrawal under a policy or take a policy loan.
o We can increase certain charges without your consent, within limits
stated in your policy. See the "Changes in charges" above, which specifies which
charges can be increased.
Your policy permits other transactions that also have risks. These and
other risks and benefits of investing in a policy are discussed in detail
throughout this prospectus.
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<PAGE>
Section 1
Policy features and benefits
HOW YOU PAY FOR YOUR POLICY
INITIAL PREMIUM. We call the amount you contribute to your policy a "premium."
The minimum premium we require is $25,000. This includes any amount of loans
that are being "carried over" from a previous policy. See "Loans transferred
from an old policy" below. The amount of insurance initially provided by your
policy is based on the amount of your premium. Once you make your initial
premium payment under your policy, you may only make one additional premium
payment, subject to the conditions below.
ADDITIONAL PREMIUM. On your 10th policy anniversary, if your death benefit is
below the initial death benefit, subject to our approval as specified below, you
may make one additional premium payment. The amount of the additional premium is
limited to an amount that will restore your initial death benefit. (See "About
your death benefit" below for a discussion of how your death benefit can vary
over time.)
This premium must be received by us within 60 days after your 10th
policy anniversary. Any premium payment received before or after this period, or
any premium payment in excess of the permitted amount, will be returned to you.
You must provide us with satisfactory evidence of insurability for us
to approve this additional payment. We also may refuse to accept any additional
premium payment if this would cause the policy to fail to qualify as life
insurance under federal tax law. See "Tax Information" for a discussion of the
tax consequences of making this additional payment.
SIMPLIFIED QUALIFICATION FOR COVERAGE. We will use a simplified process to
qualify many insured persons for coverage (the "underwriting process") under the
Accumulator Life policies. This process reduces underwriting questions and
requirements. The underwriting procedures we use in any particular case,
however, will depend on the age of the insured person, the amount of the premium
payment and the other risk characteristics of the insured person, and may
involve our full underwriting process.
If we accept your application to purchase Accumulator Life, the cost of
your insurance coverage will be the same regardless of the extent to which we
use a simplified underwriting process in your case. The cost of insurance rate
will be the same for all insured persons of the same gender and age, regardless
of whether they are tobacco users and regardless of their other insurance risk
characteristics. Therefore, you may be able to obtain more economical coverage
by purchasing a policy that uses more traditional underwriting procedures than
Accumulator Life, if the insured person is willing to undergo such procedures
and has relatively favorable insurance risk characteristics. You may consult
your financial professional for further information.
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<PAGE>
LOANS TRANSFERRED FROM AN OLD POLICY. Subject to our discretion and
administrative procedures, we may permit you to pay for your Accumulator Life
policy by an exchange of an existing life insurance policy. We may also permit
you to transfer (or carry over) any existing loan from your old policy to your
new Accumulator Life policy. See "Borrowing from your policy" below for more
information regarding these types of loans.
YOUR DEATH BENEFIT GUARANTEE
Provided that your policy does not have an outstanding loan, we
guarantee that your policy will not terminate, even if your policy's "net cash
surrender value" is not sufficient to pay a monthly deduction that has become
due. ("Net cash surrender value" is explained under "Surrendering your policy
for its net cash surrender value" below.) In this circumstance, we will waive
any monthly deductions (for cost of insurance charges, the charge for
administration and taxes and the guaranteed minimum death benefit charge) in
excess of your policy's account value. We guarantee that your death benefit will
not be less than the guaranteed minimum death benefit, regardless of investment
performance, provided you have no outstanding loans. (See the discussions of
death benefit and guaranteed minimum death benefit below.)
POLICY "LAPSE" AND TERMINATION
If you have an outstanding loan, your policy will lapse (also referred
to in your policy as "default") if it does not have enough "net cash surrender
value" to pay your policy's monthly charges when due. If this occurs, you will
have a 61-day grace period during which you will have to pay a minimum specified
amount to keep your policy from terminating. This amount equals the lesser of
(1) the amount we estimate is needed to increase your net cash surrender value
enough to pay three months of charges (without regard to loan interest or
investment performance) or (2) the amount needed to repay your loan and loan
interest. We will decline any payment less than the minimum specified amount and
treat amounts in excess of this amount as an additional loan repayment. Amounts
in excess of your outstanding loan and accrued interest will be returned to you.
We will mail a notice to you at your last known address if your policy
lapses and enters a grace period. The grace period will start on the date the
notice is mailed. You may not make any transfers or request any other policy
changes during a grace period. If we receive the amount requested before the end
of the grace period, but due to poor investment performance your net cash
surrender value is still insufficient to pay your policy's monthly deductions,
and there is still a loan outstanding, we will send you a written notice that a
new 61-day grace period has begun (starting on the date that the second notice
is mailed) and request an additional payment. If we do not receive your required
payment by the end of a grace period, your policy will terminate without value
and all coverage under your policy will cease. We will mail an additional notice
to you if your policy terminates.
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<PAGE>
You may owe taxes (and tax penalties) if your policy terminates while
you have a loan outstanding, even though you receive no additional money from
your policy at that time. See "Tax information," below.
RESTORING A TERMINATED POLICY. To have your policy "restored" (put back in
force), you must apply within six months after the date of termination. In some
states, you may have a longer period of time. You must also present evidence of
insurability satisfactory to us and make the required payment (which will
include paying back your policy loan in full). Your policy contains additional
information about the required payment and about the values and terms of the
policy after it is restored.
ABOUT YOUR DEATH BENEFIT
In your application to buy an Accumulator Life policy, you tell us the
amount of the premium you want to pay. This determines the amount of your
initial death benefit, as well as your initial guaranteed minimum death benefit.
If the insured person dies, we pay a life insurance "death benefit" to
the "beneficiary" you have named. The death benefit under your policy equals the
greater of (i) the policy's guaranteed minimum death benefit (as described
below) on the date of the insured person's death or (ii) the policy's "account
value" on the date of the insured person's death multiplied by a factor
specified in your policy. The factor depends on the insured person's age and
gender.
Representative factors are as follows:
<TABLE>
<CAPTION>
- ------------- -------- --------- -------- -------- --------- -------- -------- --------- -------- --------
AGE:* 35 40 45 50 55 60 70 80 90 99
-OVER
- ------------- -------- --------- -------- -------- --------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FEMALE: 4.646 3.940 3.363 2.886 2.489 2.157 1.647 1.319 1.140 1.025
- ------------- -------- --------- -------- -------- --------- -------- -------- --------- -------- --------
MALE: 3.971 3.370 2.877 2.472 2.140 1.873 1.488 1.256 1.128 1.025
- ------------- -------- --------- -------- -------- --------- -------- -------- --------- -------- --------
* For the policy year of the insured person's death.
</TABLE>
Your policy's "account value" is the total of the amounts that you have
in the variable investment options, as well as amounts we are holding to secure
any outstanding policy loans (Account value is discussed in more detail under
"Determining your policy's value" below.) Because the amount of the death
benefit is generally based on your policy's account value, the amount of death
benefit generally changes from day to day, as many factors (including investment
performance, charges and partial withdrawals) affect your policy's account
value. As set forth above, the death benefit also depends on the death benefit
factor for the insured person's age at death. This factor decreases as the
insured person grows older. Therefore, the policy's death benefit will also
decrease over time, unless the policy's account value increases by a sufficient
amount to offset the impact of the decreasing death benefit factor.
Your policy's "GUARANTEED MINIMUM DEATH BENEFIT" is equal to the sum of
the initial premium payment and any permitted additional premium payment,
adjusted for any
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<PAGE>
partial withdrawals. A partial withdrawal will result in a reduction in the
guaranteed minimum death benefit; the benefit is reduced by the proportion that
the partial withdrawal amount bears to your policy's account value prior to the
withdrawal.
ADJUSTMENTS TO DEATH BENEFIT PROCEEDS. We will reduce the death benefit proceeds
by the amount of any outstanding policy loan and loan interest and by any amount
of monthly charges under the policy that remain unpaid because the insured
person died during a grace period.
VARIABLE INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all of your account value that is not
attributable to policy loans into our Alliance Money Market variable investment
option. On the first business day following the twentieth day after your policy
is issued (the "Allocation Date"), we will re-allocate that investment in
accordance with the allocation instructions you give in your application to
purchase a policy. These allocation instructions also serve as instructions for
allocating monthly deductions, loan repayments and credited loan interest,
unless you instruct us otherwise. You can change any allocation percentages at
any time, but this will not affect any prior allocations. Changes requested
prior to the Allocation Date are effective on the Allocation Date. The
allocation percentages that you specify must always be in whole numbers and
total exactly 100%.
[Sidebar: You can choose among variable investment options]
VARIABLE INVESTMENT OPTIONS. The available variable investment options are
listed on the front cover of this prospectus. (Your policy and other
supplemental materials may refer to these as "Investment Funds".) The investment
results you will achieve in any one of these options will depend on the
investment performance of the corresponding Portfolio that shares the same name
as that option. That Portfolio follows investment practices, policies and
objectives that are appropriate to the variable investment option you have
chosen. The advisers who make the investment decisions for each Portfolio are as
follows:
o Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance" option;
also, jointly advises EQ/Aggressive Stock and EQ/Balanced)
o Capital Guardian Trust Company (for the "Capital Guardian" options; also,
jointly advises EQ/Balanced)
o Evergreen Asset Management Corp. (for the "EQ/Evergreen" options)
o Jennison Associates LLC (jointly advised EQ/Balanced)
o Massachusetts Financial Services Company (for the "MFS" options; also, jointly
advises EQ/Aggressive Stock)
o Mercury Asset Management US (for both "Mercury" options)
o Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
o Prudential Investments Fund Management LLC (jointly advises EQ/Balanced)
o Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
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o T. Rowe Price Associates, Inc. and Rowe Price-Fleming International, Inc. (for
both "T. Rowe Price" options)
o Warburg Pincus Asset Management, Inc. (for the "Warburg Pincus" option)
Each Portfolio is a part of EQ Advisors Trust. Equitable Life serves as
investment manager of EQ Advisors Trust. As such, Equitable Life oversees the
activities of the above-listed advisers with respect to EQ Advisors Trust and is
responsible for retaining or discontinuing the services of those advisers.
(Prior to September 1999, EQ Financial Consultants, Inc., the predecessor to AXA
Advisors, LLC and an affiliate of Equitable Life, served as investment manager
to EQ Advisors Trust.) You will find other important information about each
Portfolio in the separate prospectus for EQ Advisors Trust attached at the end
of this prospectus. We may add or delete variable investment options or
Portfolios at any time.
YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS
BENEFICIARY OF DEATH BENEFIT. You designate your policy's beneficiary in your
policy application. You can change the beneficiary at any other time during the
insured person's life. If no beneficiary is living when the insured person dies,
we will pay the death benefit proceeds in equal shares to the insured person's
surviving children. If there are no surviving children, we will instead pay the
insured person's estate.
PAYMENT OPTIONS FOR DEATH BENEFIT. In your policy application, or at any other
time during the insured person's life, you may choose among several payment
options for all or part of any death benefit proceeds that subsequently become
payable. These payment options are described in the policy, may result in
varying tax consequences. A payment option selected by the policy's owner cannot
be changed by the beneficiary after the insured person dies. The terms and
conditions of each option are set out in a separate contract that we will send
to the payee when a payment option goes into effect. Equitable Life or your
financial professional can provide you with samples of such contracts on
request.
[Sidebar: You can choose to have the proceeds from the policy's life
insurance benefit paid under one of our payment options, rather than as a single
sum.]
If you have not elected a payment option, we will pay any death benefit
in a single sum. If the beneficiary is a natural person (i.e., not an entity
such as a corporation or trust) we will pay any such single sum death benefit
through an interest-bearing checking account (the "Equitable Access
Account(Trademark)") that we will automatically open for the beneficiary. The
beneficiary will have immediate access to the proceeds by writing a check on the
account. We pay interest on the proceeds from the date of death to the date the
beneficiary closes the Equitable Access Account.
If a financial professional has assisted the beneficiary in preparing
the documents that are required for payment of the death benefit, we will send
the Equitable Access
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<PAGE>
Account checkbook or check to the financial professional within the periods
specified for death benefit payments under "When we pay policy proceeds," below.
Your financial professional will take reasonable steps to arrange for prompt
delivery to the beneficiary.
PAYMENT OPTIONS FOR SURRENDER AND PARTIAL WITHDRAWAL PROCEEDS. You can also
choose to receive all or part of any proceeds from a surrender or partial
withdrawal from your policy under one of the above referenced payment options,
rather than as a single sum.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your policy, you may
return it to us for a full refund of the initial premium you paid, less the
amount of any outstanding policy loan and loan interest. In some states, we will
adjust this amount for any investment performance (whether positive or
negative).
To exercise this cancellation right, you must mail the policy directly
to our Administrative Office with a written request to cancel. Your cancellation
request must be postmarked within 10 days after you receive the policy and your
coverage will terminate as of the date of the postmark. In some states, this
"free look" period is longer than 10 days. Your policy will indicate the length
of your "free look" period.
VARIATIONS AMONG ACCUMULATOR LIFE POLICIES
Time periods and other terms and conditions described in this
prospectus may vary due to legal requirements in your state. These variations
will be reflected in your policy.
Equitable Life also may vary the charges and other terms of Accumulator
Life where special circumstances result in sales or administrative expenses or
mortality risks that are different from those normally associated with
Accumulator Life. We will make such variations only in accordance with uniform
rules that we establish.
Equitable Life or your financial professional can advise you about any
variations that may apply to your policy.
OTHER EQUITABLE LIFE POLICIES
We offer a variety of fixed and variable life insurance policies which
offer policy features, including investment options, that are different from
those offered by this prospectus. Not every policy is offered through your
financial professional. You can contact us to find out more about any other
Equitable Life insurance policy.
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<PAGE>
Section 2
Determining your policy's value
YOUR ACCOUNT VALUE
We credit your initial premium payment (and any permitted additional
premium) to your policy's "account value." We use your instructions to allocate
your unloaned account value to one or more of the policy's variable investment
options indicated on the front cover of this prospectus.
Your account value is the total of (i) your amounts in our variable
investment options, and (ii) any amounts that we are holding to secure policy
loans that you have taken (including any interest on those amounts which has not
yet been allocated to the variable investment options). See "Borrowing from your
policy" below. (Your policy and other supplemental material may refer to (ii)
above as your "Loaned Policy Account.") These amounts are subject to certain
charges discussed in "Charges and expenses you will pay" above.
[Sidebar: Your value in the variable investment options reflects the returns
that are achieved by the Portfolios that you select, as well as any charges we
deduct under the policy.]
YOUR POLICY'S VALUE IN OUR VARIABLE INVESTMENT OPTIONS. We invest the account
value that you have allocated to any variable investment option in shares of the
corresponding Portfolio. Your value in each variable investment option is
measured by "units."
The number of your units in any variable investment option does not
change, absent an event or transaction under your policy that involves moving
assets into or out of that option. Whenever any amount is withdrawn or otherwise
deducted from one of your policy's variable investment options, we "redeem"
(cancel) the number of units that has a value equal to that amount. This can
happen, for example, when all or a portion of monthly deductions and
transaction-based charges are allocated to that option, or when loans,
transfers, and partial withdrawals or full surrenders are made from that option.
Similarly, you "purchase" additional units having the same value as the amount
of your premium, any loan repayment, or a transfer that you allocate to that
option.
The value of each unit will increase or decrease each day, by the same
amount as if you had invested in the corresponding Portfolio's shares directly
(and reinvested all dividends and distributions from the Portfolio in additional
Portfolio shares). The units' values will be reduced, however, by the amount of
the mortality and expense risk charge for that period (See "Table of policy
charges" under "Charges and expenses you will pay" above). On any day, your
value in any variable investment option equals the number of units credited to
your policy under that option, multiplied by that day's value for one such unit.
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<PAGE>
Section 3
Transferring your money among our variable investment options
TRANSFERS YOU CAN MAKE
[Sidebar: You can transfer among our variable investment options.]
After your policy's Allocation Date, you can transfer amounts from one
variable investment option to another. You may submit a written request for a
transfer to our Administrative Office, you can make a telephone request or you
can make a request over the Internet (see below).
TRANSFER CHARGE. We do not currently make any charge for transfers. We reserve
the right, however, to impose up to a $25 charge for each transfer you make.
This charge does not apply to any transfer pursuant to our dollar cost averaging
service or our asset rebalancing service, both discussed below.
TELEPHONE AND EQACCESS TRANSFERS
TELEPHONE TRANSFERS. You can make telephone transfers by following one of two
procedures:
o if you are both the policy's insured person and its owner, by calling
1-888-855-5100 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by sending us a
signed telephone transfer authorization form. Once we have the form on file, we
will provide you with a toll-free telephone number to make transfers.
For more information see "Telephone and EQAccess requests" later in
this prospectus. We allow only one request for telephone transfers each day
(although that request can cover multiple transfers), and we will not allow you
to revoke a telephone transfer. If you are unable to reach us by telephone, you
should send a written transfer request to our Administrative Office.
EQACCESS TRANSFERS. By the end of 2000, we anticipate that you will be able to
make transfers over the Internet. You may do this by visiting our Web site and
enrolling in EQAccess. This service may not always be available. Generally, the
restrictions relating to telephone transfers apply to EQAccess transfers.
MARKET TIMING. We reserve the right to limit your access to telephone or
EQAccess transfers if we determine that you are engaged in a market timing
strategy. See "Transfers of your account value - Market timing" later in this
prospectus.
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<PAGE>
OUR DOLLAR COST AVERAGING SERVICE
We offer a dollar cost averaging service. This service allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low, and fewer units if the unit's value is high. Therefore, you may
get a lower average cost per unit over the long term.
[Sidebar: Using the dollar cost averaging service does not guarantee
that you will earn a profit or be protected against losses.]
Our dollar cost averaging service (also referred to as our "automatic
transfer service") enables you to make automatic monthly transfers from the
Alliance Money Market option to our other variable investment options. You may
elect the dollar cost averaging service with your policy application or at any
later time (provided you are not using the asset rebalancing service described
below). At least $5,000 must be allocated to the Alliance Money Market option to
begin using the dollar cost averaging service. You can choose up to eight other
variable investment options to receive the automatic transfers, but each
transfer to each option must be at least $50.
The service terminates when the Alliance Money Market option is
depleted. You can also cancel the dollar cost averaging service at any time. You
may not simultaneously participate in the asset rebalancing service and the
dollar cost averaging service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in
our variable investment options so that the relative amount of your account
value in each variable option is restored to an asset allocation that you
select. You can accomplish this automatically through our asset rebalancing
service. The rebalancing may be at quarterly, semiannual or annual intervals.
You may specify asset allocation percentages for up to eight variable
investment options. The allocation percentage you specify for each variable
investment option selected must be at least 5% (whole percentage only) of the
total value you hold under the variable investment options, and the sum of the
percentages must equal 100%. You may not simultaneously participate in the asset
rebalancing service and the dollar cost averaging service (discussed above).
You may request the asset rebalancing service in your policy
application or at any later time. You may change your allocation instructions or
discontinue participation in the asset rebalancing service at any time.
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<PAGE>
Section 4
Accessing your money
BORROWING FROM YOUR POLICY
You may borrow up to 90% of the difference between your policy's
account value and any surrender charges that are in effect under your policy.
(In your policy, this "difference" is referred to as your "cash surrender
value".) However, the amount you can borrow will be reduced by any other loans
(and loan interest) you have outstanding. There is a $500 minimum for the
initial loan and for each new policy loan you request. (This minimum loan amount
may vary by state.)
When you take a policy loan, we remove an amount equal to the loan from
one or more of your variable investment options and hold it as collateral for
the loan's repayment. (Your policy may sometimes refer to the collateral as the
"loaned policy account.") We hold this loan collateral as part of our general
assets.
[sidebar: You can use policy loans to obtain funds from your policy
without surrender charges. However, you may be subject to tax consequences and
the borrowed amount is no longer credited with the investment results of any of
our variable investment options under the policy. Instead, you are charged loan
interest on your loan balance while the collateral we hold for the borrowed
amount is credited with interest at rates we determine.]
YOU MAY BE REQUIRED TO CURRENTLY INCLUDE ALL OR A PORTION OF THE AMOUNT
YOU BORROW IN YOUR INCOME FOR TAX PURPOSES AND YOU MAY ALSO BE SUBJECT TO A TAX
PENALTY IF YOU ARE UNDER 59 1/2 YEARS OF AGE IF YOUR POLICY IS CONSIDERED A
"MODIFIED ENDOWMENT CONTRACT" ("MEC"). Even if your policy is not a MEC, and a
loan is not taxable when made, it may later become taxable, for example, upon
termination or surrender. See "Tax information" below for a discussion of the
tax consequences of policy loans.
Note that you cannot make transfers or partial withdrawals of the
collateral and the collateral is not available to pay policy charges.
When you request your loan, you should tell us how much of the loan
collateral you wish to have taken from any amounts you have in each of our
variable investment options. If you do not give us directions (or if we are
making the loan automatically to cover unpaid loan interest), we will take the
loan from your variable investment options in the same proportion as we are then
taking monthly deductions for charges. If that is not possible, we will take the
loan from your variable investment options in proportion to your value in each.
In some cases, your policy may be issued with a loan if your policy was
issued as a result of the exchange of another life insurance policy under
Section 1035 of the
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Internal Revenue Code. If your old policy had an existing loan, we may permit
that loan to be transferred (or carried over) to your new Accumulator Life
policy, subject to our procedures in effect at such time. Any value representing
your transferred loan will be immediately set aside as collateral for your
loan's repayment, and will not be allocated to the variable investment options.
LOAN INTEREST WE CHARGE. The interest we charge on a policy loan accrues daily
at a fixed loan interest rate of 6%. Loan interest payments are due on each
policy anniversary. If not paid when due, we automatically add the interest as a
new policy loan, as described above. This new policy loan will generally have
tax and other consequences as described for policy loans you request, even
though no actual disbursement of loan proceeds occurs. If we add unpaid loan
interest to your loan, and your policy is a modified endowment contract, there
may be adverse tax consequences. See "Tax information" below.
INTEREST THAT WE CREDIT ON LOAN COLLATERAL. The annual interest rate we credit
on your loan collateral will be at least 4%. We guarantee that this rate will
never be less than that unless tax law changes increase the taxes we pay on
policy loans or loan interest.
Currently, after the first policy year, we credit a "preferred"
interest rate on a portion of your loan collateral. This preferred rate is equal
to the interest rate we charge on your loans, 6%. This 6% preferred rate is not
guaranteed and we may at any time reduce or discontinue crediting interest at
any rate above 4%. The maximum amount of loan collateral that can qualify for
preferred status is determined at the end of each policy year for the following
year (or as of the effective date of any restoration, if later). It is the
excess (if any) of your account value on that date over the sum of your initial
and any additional premium payment. The maximum amount at any other time during
the policy year is determined as the maximum amount at the beginning of the
policy year, accumulated at the preferred rate.
We credit interest on your loan collateral daily. On each anniversary
of your policy (or when your policy loan is fully repaid) we allocate that
interest to your policy's variable investment options in the same proportions as
if it were a premium payment.
POSSIBILITY OF POLICY TERMINATION. In addition to the tax and other effects
described above, a loan can reduce the length of time that your insurance
remains in force, because your policy could terminate in certain circumstances
if you fail to repay your loan or to pay loan interest. See "Policy 'lapse' and
termination" above. The amount we set aside as loan collateral cannot be used to
pay policy charges as they become due. See "Failure to repay a loan or loan
interest" below. A loan will also cause your guaranteed minimum death benefit to
become unavailable if the net cash surrender value of your policy is not
sufficient to pay monthly charges as they become due. We will deduct any
outstanding policy loan plus loan interest from any policy's proceeds if you do
not pay it back.
PAYING OFF YOUR LOAN. You can repay all or part of your loan at any time. If you
send us more than all of the loan principal and accrued interest you owe, we
will refund the
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excess portion of the payment. When you send us a loan repayment, we will
transfer an amount equal to such repayment from your loan collateral back to the
variable investment options under your policy. We will allocate any repayments
among variable investment options as you instruct; or, if you don't instruct us,
in the same proportion as your premium allocation percentages then in effect.
FAILURE TO REPAY A LOAN OR LOAN INTEREST. In addition to the effects discussed
above, if you fail to repay a loan and the accrued loan interest, and, at the
beginning of a policy month, the policy's net cash surrender value is less than
the monthly charges then due, (i) your policy could terminate (see "Policy
termination" above) and (ii) you are not permitted to make transfers or to
change allocation instructions for loan repayments or monthly deductions.
MAKING WITHDRAWALS FROM YOUR POLICY
You may make a partial withdrawal of your net cash surrender value at
any time after the first year of your policy. The request must be for at least
$500, and the policy's account value after the partial withdrawal, and after the
deduction of any applicable surrender charge, must be at least $25,000, or we
will decline your request. If your withdrawal is subject to a surrender charge,
we deduct the amount of that charge from your account value in addition to the
amount you requested. If you do not tell us from which variable investment
options you wish us to take the partial withdrawal (as well as any surrender
charge), we will use the same allocation that then applies for the monthly
deductions we make for charges; and, if that is not possible, we will take the
partial withdrawal (and any surrender charge) from all of your variable
investment options in proportion to your value in each.
[Sidebar: You can withdraw all or part of your policy's net cash surrender
value, although you may incur charges and tax consequences by doing so.]
We charge any applicable surrender charge on the portion of any partial
withdrawal that is not treated as a "free withdrawal." The surrender charge we
impose is the applicable surrender charge percentage multiplied by the lesser
of: (i) the amount of the withdrawal that does not qualify as a free withdrawal
(as discussed below), and (ii) the initial premium less the amount of any
previous partial withdrawals that incurred a surrender charge. The applicable
surrender charge percentages are shown under "Charges and expenses you will pay"
above.
FREE WITHDRAWAL. Beginning in the second policy year you can take as a free
withdrawal 15% of your policy's account value (less outstanding loans and loan
interest) as determined as of the end of the previous policy year (or as of the
effective date of any restoration, if later). Multiple withdrawals taken in any
one policy year are aggregated for this purpose. Each year your "free
withdrawal" amount is redetermined, but amounts that were not withdrawn in a
policy year cannot be carried over to the next policy year. A free
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withdrawal is "free" from surrender charges. It is not free from any income tax
consequences resulting from the withdrawal.
EFFECT OF PARTIAL WITHDRAWAL ON INSURANCE COVERAGE. A partial withdrawal
automatically reduces your net cash surrender value on a dollar-for-dollar basis
by the amount of the withdrawal. A partial withdrawal also automatically reduces
your policy's account value on a dollar-for-dollar basis by the amount of the
withdrawal plus any applicable surrender charge. A partial withdrawal also
results in a reduction in your policy's guaranteed minimum death benefit by the
proportion that the partial withdrawal bears to the policy account value just
prior to the partial withdrawal. For example, if the requested partial
withdrawal equals 10% of your policy's account value prior to the withdrawal,
your guaranteed minimum death benefit would be reduced by 10%.
Thus, if you take a partial withdrawal, your policy's death benefit
will be the greater of (i) a multiple of the now-reduced account value or (ii)
its now-reduced guaranteed minimum death benefit.
You should refer to "Tax information" below, for information about
possible tax consequences of partial withdrawals and any associated reduction in
policy benefits. If you have an unpaid policy loan, a partial withdrawal may
also increase the chance that your policy could lapse because of insufficient
value to pay policy charges as they fall due.
SURRENDERING YOUR POLICY FOR ITS NET CASH SURRENDER VALUE
You can fully surrender (give us back) your policy for its "net cash
surrender value" at any time. The net cash surrender value equals your account
value, minus any outstanding loans and unpaid loan interest, and minus any
surrender charge that then remains applicable.
The surrender charge we impose on a full surrender is the applicable
surrender charge percentage multiplied by the amount of the initial premium, as
adjusted for any prior partial withdrawals. For purposes of this calculation,
the amount of the initial premium would be reduced by the amounts of any prior
partial withdrawals that incurred a surrender charge. The surrender charge
percentages are shown in "Charges and expenses you will pay" above.
A full surrender causes your policy and all insurance benefits to
terminate. Please refer to "Tax information" below for the possible tax
consequences of surrendering your policy.
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Section 5
Tax information
This discussion is based on current federal income tax law and
interpretations. It assumes that the policyowner is a natural person who is a
U.S. citizen and resident. The tax effects on corporate taxpayers, non-U.S.
residents or non-U.S. citizens may be different. This discussion is general in
nature, and should not be considered tax advice, for which you should consult a
qualified tax advisor.
BASIC TAX TREATMENT FOR YOU AND YOUR BENEFICIARY
An Accumulator Life policy will be treated as "life insurance" for
federal income tax purposes (a) if it meets the definition of life insurance
under Section 7702 of the Internal Revenue Code (the "Code") and (b) as long as
the investments made by the underlying Portfolios satisfy certain investment
diversification requirements under Section 817(h) of the Code. We believe that
the policies will meet these requirements and, therefore, that
o the death benefit received by the beneficiary under your policy will generally
not be subject to federal income tax; and
o increases in your policy's account value as a result of interest or investment
experience will not be subject to federal income tax, unless and until there is
a distribution from your policy, such as a surrender, a partial withdrawal, loan
or a payment to you.
There may be different tax consequences if you assign your policy or
designate a new owner. See "Assigning your policy" below.
TAX TREATMENT OF DISTRIBUTIONS TO YOU
The federal income tax consequences of a distribution from your policy
depend on whether your policy is a "modified endowment contract" (sometimes also
referred to as a "MEC"). In all cases, however, the character of any income
described below as being taxable to the recipient will be ordinary income (as
opposed to capital gain).
TESTING FOR MODIFIED ENDOWMENT CONTRACT ("MEC") STATUS. In all cases where you
have purchased your policy with a single premium, your policy will be a
"modified endowment contract." Additionally, a life insurance policy that you
receive in exchange for another life insurance policy that was a modified
endowment contract will also be considered a modified endowment contract.
If you acquire your policy through the exchange of an existing life
insurance policy that is not itself a modified endowment contract, your new
policy will generally not be a modified endowment contract. There are two
exceptions:
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(1) if there is a reduction in benefits below the level that would have
caused your existing policy to become a modified endowment. This will not be the
case if the existing policy was not subject to (or was grandfathered from)
modified endowment contract testing or beyond any seven-year testing period. We
will request the issuer of any existing contract being exchanged to provide us
with information necessary to determine the new contract's status.
(2) if you decide to make an additional premium payment at such later
time as the policy may permit.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED ENDOWMENT
CONTRACT. Any distribution from your policy will be taxed on an "income-first"
basis if your policy is a modified endowment contract. Distributions for tax
purposes include a loan (including any increase in the loan amount to pay
interest on an existing loan or an assignment or a pledge to secure a loan) or
partial withdrawal. Any such distributions will be considered taxable income to
you to the extent your account value exceeds your basis in the policy. (For
modified endowment contracts, your basis in the policy is equal to your initial
single premium, increased by any permitted additional premium and reduced by the
amount of any previous distributions from your policy that were not taxable. If
your policy was acquired through a tax free exchange, however, your basis will
generally equal the basis carried over from the policy you exchanged, increased
by any additional premium and reduced by any previous distributions that were
not taxable. Your basis also would be increased by the amount of any prior loan
under your policy that was considered taxable income to you.) For purposes of
determining the taxable portion of any distribution, all modified endowment
contracts issued by Equitable Life (or its affiliate) to the same owner during
any calendar year are treated as if they were a single contract.
A 10% penalty tax also will apply to the taxable portion of most
distributions from a policy that is a modified endowment contract. The penalty
tax will not, however, apply to (i) taxpayers whose actual age is at least 59
1/2, (ii) distributions in the case of a disability (as defined in the Code) or
(iii) distributions received as part of a series of substantially equal periodic
annuity payments for the life (or life expectancy) of the taxpayer or the joint
lives (or joint life expectancies) of the taxpayer and his or her beneficiary.
Interest charged on the loan will generally not be tax deductible,
although interest credited on loan collateral may become taxable if distributed
under the policy. IF YOUR POLICY TERMINATES AFTER A GRACE PERIOD, THE
EXTINGUISHMENT OF ANY THEN OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL
BE TREATED AS A DISTRIBUTION (to the extent the loan was not previously treated
as a distribution) and could be subject to tax, including the 10% penalty tax,
as described above. In addition, upon a full surrender, any excess of the
proceeds we pay (including any amounts we use to discharge any loan) over your
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basis in the policy, will be subject to federal income tax and, unless an
exception applies, the 10% penalty tax.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT
CONTRACT. As long as your policy remains in force as a non-modified endowment
contract, policy loans will be treated as indebtedness, and no part of the loan
proceeds will be subject to current federal income tax. Interest charged on the
loan will generally not be tax deductible, although interest credited on loan
collateral may become taxable under the rules below if distributed.
If you make a partial withdrawal after the first 15 years of your
policy, the proceeds will not be subject to federal income tax except to the
extent such proceeds exceed your "basis" in your policy. (Your basis generally
will equal the basis carried over from the old life policy you exchanged, if the
exchange was a tax free exchange, less the amount of any distributions from your
policy that were not taxable. We need to receive this basis information from the
issuer of the old life policy.) During the first 15 years, however, the proceeds
from a partial withdrawal are likely to be subject to federal income tax, under
a complex formula, to the extent that your account value exceeds your basis.
Upon full surrender, any amount by which the proceeds we pay (including
amounts we use to discharge any policy loan and unpaid loan interest) exceed
your basis in the policy will be subject to federal income tax. IN ADDITION, IF
A POLICY TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF ANY
THEN-OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION AND COULD BE SUBJECT TO TAX UNDER THE FOREGOING RULES. Finally, if
you make an assignment of rights or benefits under your policy, you may be
deemed to have received a distribution from your policy, all or part of which
may be taxable.
Distributions that occur during a year of your policy in which it
becomes a modified endowment contract, and during any subsequent years, will be
taxed as described above for a policy which is a modified endowment contract. In
addition, distributions from a policy within two years before it becomes a
modified endowment contract also will be subject to tax in this manner. This
means that a distribution made from a policy that is not a modified endowment
contract could later become taxable as a distribution from a modified endowment
contract.
RESTORATION OF A TERMINATED POLICY. For tax purposes, some restorations
of a policy that terminated after a grace period may be treated as the purchase
of a new policy.
EFFECT OF POLICY ON INTEREST DEDUCTIONS TAKEN BY BUSINESS ENTITIES
OWNERSHIP OF A POLICY BY A TRADE OR BUSINESS ENTITY CAN LIMIT THE
AMOUNT OF ANY INTEREST ON BUSINESS BORROWINGS THAT ENTITY OTHERWISE COULD DEDUCT
for federal income tax purposes, even though such business borrowings may be
unrelated to the
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policy. To avoid the limit, the insured person must be an officer, director,
employee or 20% owner of the trade or business entity when coverage on that
person commences.
The limit does not generally apply for policies owned by natural
persons (even if those persons are conducting a trade or business as sole
proprietorships), unless a trade or business entity that is not a sole
proprietorship is a direct or indirect beneficiary under the policy. ENTITIES
COMMONLY HAVE SUCH A BENEFICIAL INTEREST, FOR EXAMPLE, IN SO-CALLED "SPLIT
DOLLAR" ARRANGEMENTS. If the trade or business entity has such an interest in a
policy, it will be treated the same as if it owned the policy for purposes of
the limit on deducting interest on unrelated business income.
The limit generally applies only to policies issued after June 8, 1997
in taxable years ending after such date. However, for this purpose, any material
increase in death benefit as a result of any additional premium payment, or
other material change in a policy, will be treated as the issuance of a new
policy.
In cases where the above-discussed limit on deductibility applies, the
non-deductible portion of unrelated interest on business loans is determined by
multiplying the total amount of such interest by a fraction. The numerator of
the fraction is the policy's average account value (excluding amounts we are
holding to secure any policy loans) for the year in question, and the
denominator is the average for the year of the aggregate tax bases of all the
entity's other assets.
Any corporate, trade, or business use of a policy should be carefully
reviewed by your tax advisor with attention to these rules, as well as the other
rules and possible pending legislative proposals which might further restrict
available exceptions to this limit on interest deductions or make other tax law
changes with respect to such coverage.
REQUIREMENT THAT WE DIVERSIFY INVESTMENTS
Under Section 817(h) of the Code, the Treasury Department has issued
regulations that implement investment diversification requirements. Failure to
comply with these regulations would disqualify your policy as a life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to federal income tax on any income and gains under the policy and the
death benefit proceeds would lose their income tax-free status. These
consequences would continue for the period of the disqualification and for
subsequent periods. Through the Portfolios, we intend to comply with the
applicable diversification requirements.
ESTATE, GIFT, AND GENERATION-SKIPPING TAXES
If the policy's owner is the insured person, the death benefit will
generally be includable in the owner's estate for purposes of federal estate
tax. If the owner is not the insured person, and the owner dies before the
insured person, the value of the policy would be includable in the owner's
estate. If the owner is neither the insured person nor
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the beneficiary, the owner will be considered to have made a gift to the
beneficiary of the death benefit proceeds when they become payable.
In general, a person will not owe estate or gift taxes until gifts made
by such person, plus that person's taxable estate, total at least $675,000 (a
figure that is scheduled to rise at periodic intervals to $1 million by the year
2006). For this purpose, however, certain amounts may be deductible or
excludable, such as gifts and bequests to the person's spouse or charitable
institutions and certain gifts of $10,000 or less per year for each recipient.
As a general rule, if you make a "transfer" to a person two or more
generations younger than you, a generation-skipping tax may be payable.
Generation-skipping transactions would include, for example, a case where a
grandparent "skips" his or her children and names grandchildren as a policy's
beneficiaries. In that case, the generation-skipping "transfer" would be deemed
to occur when the insurance proceeds are paid. The generation-skipping tax rates
are similar to the maximum estate tax rate in effect at the time. Individuals,
however, are generally allowed an aggregate generation-skipping tax exemption of
$1 million.
The particular situation of each policyowner, insured person or
beneficiary will determine how ownership or receipt of policy proceeds will be
treated for purposes of federal estate, gift and generation-skipping taxes, as
well as state and local estate, inheritance and other taxes. Because these rules
are complex, you should consult with a qualified tax adviser for specific
information, especially where benefits are passing to younger generations.
EMPLOYEE BENEFIT PROGRAMS
This Accumulator Life policy is not designed, nor intended, to be sold
into employee benefit programs. Special rules apply to sales of life insurance
policies to the following programs:
PENSION AND PROFIT-SHARING PLANS. There are special limits on the
amount of insurance that may be purchased by a trust or other entity that forms
part of a pension or profit-sharing plan qualified under Section 401(a) or 403
of the Code. In addition, the federal income tax consequences will be different
from those described in this prospectus. These rules are complex, and you should
consult a qualified tax advisor.
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OTHER EMPLOYEE BENEFIT PROGRAMS. Complex rules may also apply when a
policy is held by an employer or a trust, or acquired by an employee, in
connection with the provision of other employee benefits. Among other issues,
these policyowners must consider whether the policy was applied for by or issued
to a person having an insurable interest under applicable state law and with the
insured person's consent. The lack of an insurable interest or consent may,
among other things, affect the qualification of the policy as life insurance for
federal income tax purposes and the right of the beneficiary to receive a death
benefit.
ERISA. Employers and employer-created trusts may be subject to
reporting, disclosure and fiduciary obligations under the Employee Retirement
Income Security Act of 1974. You should consult a qualified legal advisor.
OUR TAXES
The operations of our Separate Account FP are reported in our federal
income tax return. The separate account's investment income and capital gains,
however, are, for tax purposes, reflected in our variable life insurance policy
reserves. Therefore, we currently pay no taxes on such income and gains and
impose no charge for such taxes. We reserve the right to impose a charge in the
future for taxes incurred; for example, a charge to the separate account for
income taxes incurred by us that are allocable to the policies.
If our state, local or other tax expenses increase, we may add or
increase our charges for such taxes when they are attributable to Separate
Account FP, based on premiums, or otherwise allocable to the policies.
WHEN WE WITHHOLD TAXES FROM DISTRIBUTIONS
Generally, unless you provide us with a satisfactory written election
to the contrary prior to the distribution, we are required to withhold income
tax from any proceeds we distribute as part of a taxable transaction under your
policy. If you do not wish us to withhold tax from the payment, or if we do not
withhold enough, you may have to pay later, and you may incur penalties under
the estimated income tax rules. In some cases, where generation-skipping taxes
may apply, we may also be required to withhold for such taxes unless we are
provided satisfactory notification that no such taxes are due. States may also
require us to withhold tax on distributions to you. Special withholding rules
apply if you are not a U.S. resident or U.S. citizen.
POSSIBILITY OF FUTURE TAX CHANGES
The U.S. Congress frequently considers legislation that, if enacted,
could change the tax treatment of life insurance policies or increase the taxes
we pay in connection with such policies. In addition, the Treasury Department
may amend existing regulations, issue regulations on the qualification of life
insurance and modified endowment contracts, or adopt new or clarifying
interpretations of existing law. State and local tax law or, if
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you are not a U.S. citizen and resident, foreign tax law, may also affect the
tax consequences to you, the insured person or your beneficiary, and are subject
to change or changes of interpretation. Any changes in federal, state, local or
foreign tax law or interpretations could have a retroactive effect, both on our
taxes and the way your policy is taxed.
The Treasury Department has the authority to issue guidelines
prescribing the circumstances in which your ability to direct your investment to
particular Portfolios within an insurance policy may cause you, rather than the
insurance company, to be treated as the owner of the Portfolio shares
attributable to your policy. In that case, income and gains attributable to such
Portfolio shares would be included in your gross income for federal income tax
purposes. Under current law, however, we believe that Equitable Life, and not
the owner of a policy, would be considered the owner of the Portfolio shares.
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Section 6
More information about procedures that apply to your policy
This section provides further detail about certain subjects that are
addressed in the previous pages. The following discussion generally does not
repeat the information already contained in those pages.
WAYS TO MAKE PREMIUM AND LOAN PAYMENTS
CHECKS AND MONEY ORDERS. Your initial single premium, any permitted additional
premium or any loan repayment generally must be paid by check or money order
drawn on a U.S. bank in U.S. dollars and made payable to "Equitable Life."
We prefer that you make each payment to us with a single check drawn on
your business or personal bank account. We also will accept a single money
order, bank draft or cashier's check payable directly to Equitable Life,
although we must report such "cash equivalent" payments to the Internal Revenue
Service under certain circumstances. Cash and travelers' checks, or any payments
in foreign currency, are not acceptable. We will not accept third-party checks
payable to someone other than Equitable Life.
EXCHANGES OF EXISTING LIFE INSURANCE POLICIES. We may, under certain
circumstances, permit you to exchange an existing life insurance policy for an
Accumulator Life policy. In this regard, we will follow our established
administrative procedures in effect at that time. We will apply these procedures
uniformly and will not unfairly discriminate. We will generally require the use
of special forms for this purpose.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your
tax identification number, the name of the insured person, and the address where
proceeds should be mailed. The request must be signed by you, as the owner, and
by any joint owner, collateral assignee or irrevocable beneficiary. We may also
require you to complete specific tax forms.
Finally, in order for your surrender request to be complete, you must
return your policy to us. Your request will not be deemed complete until we
receive all required items. See "Dates and prices at which policy events occur"
below for information regarding the pricing of your request.
WAYS WE PAY POLICY PROCEEDS
The payee for death benefit or other policy proceeds (e.g. upon
surrenders) may name a successor to receive any amounts that we still owe
following the payee's death. Otherwise, we will pay any such amounts to the
payee's estate.
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We must approve any payment arrangements that involve more than one
payment option, or a payee who is not a natural person (for example, a
corporation), or a payee who is a fiduciary. Also, the details of all payment
arrangements will be subject to our rules at the time the arrangements are
selected and take effect. This includes rules on the minimum amount we will pay
under an option, minimum amounts for installment payments, withdrawals or
commutation rights (your rights to receive payments over time, for which we may
offer a lump sum payment), the naming of payees, and the methods for proving the
payee's age and continued survival.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a policy to someone else as
collateral for a loan, to effect a change of ownership or for some other reason,
if we agree. A copy of the assignment must be forwarded to our Administrative
Office. We are not responsible for any payment we make or any action we take
before we receive notice of the assignment or for the validity of the
assignment. An absolute assignment is a change of ownership.
Certain transfers for value may subject you to income tax and penalties
and cause the death benefit to lose its income-tax free treatment. A gift of a
policy that has a loan outstanding may be treated as part gift and part transfer
for value, which could result in both gift tax and income tax consequences. An
assignment of a life insurance policy that is a modified endowment contract as
collateral for a loan will generally be treated as a distribution under the
policy for income tax purposes. You should consult your tax advisor prior to
making a transfer or other assignment.
DATES AND PRICES AT WHICH POLICY EVENTS OCCUR
We describe below the general rules for when, and at what prices,
events under your policy will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
DATE OF RECEIPT. Where this prospectus refers to the day when we receive a
payment, request, election, or notice from you, we usually mean the day on which
that item (or the last thing necessary for us to process that item) arrives in
complete and proper form at our Administrative Office or via the appropriate
telephone or fax number if the item is a type we accept by those means. There
are two main exceptions: if the item arrives (1) on a day that is not a business
day or (2) after the close of a business day, then, in each case, we are deemed
to have received that item on the next business day.
BUSINESS DAYS. Every day that the New York Stock Exchange is open for regular
trading is a business day for us. Each business day ends at the time regular
trading on the exchange closes (or is suspended) for the day. We compute unit
values for our variable investment options as of the end of each business day.
This usually is 4:00 p.m., Eastern Time.
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PAYMENTS AND REQUESTS YOU MAKE. Loan repayments, any permitted additional
premium payment, and interest payments are reflected in your policy as of the
date we receive them.
The following transactions occur (and receive the prices) as of the
date we receive your request:
o partial withdrawals
o account value and guaranteed minimum death benefit decreases that result
from partial withdrawals
o tax withholding elections
o changes of allocation percentages
o surrenders
o changes of beneficiary
o changes in form of death benefit payment
o loans
o transfers among variable investment options
o assignments
Restoration of terminated policies occurs on your policy's next monthly
anniversary that coincides with or follows the date we approve your request.
DOLLAR COST AVERAGING SERVICE. Transfers pursuant to our dollar cost averaging
service (automatic transfer service) occur as of the first day of each policy
month. If you request the dollar cost averaging service in your original policy
application, the first transfer will occur as of the first day of the second
policy month after your policy's initial Allocation Date. If you request this
service at any later time, we make the first such transfer as of your policy's
first monthly anniversary that coincides with or follows the date we receive
your request.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive your
request, if later. However, no rebalancing will occur prior to your policy's
Allocation Date. Subsequent periodic rebalancings occur quarterly, semiannually
or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or any transfer, for the same reasons stated in
"Delay of variable investment option proceeds" below. We may also delay such
transactions for any other legally permitted purpose.
PRICES APPLICABLE TO POLICY TRANSACTIONS. If a transaction will increase or
decrease the amount you have in a variable investment option as of a certain
date, we process the transaction using the unit values for that option computed
as of that day's close of
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business, unless that day is not a business day. In that case, we use unit
values computed as of the next business day's close.
EFFECT OF DEATH OR SURRENDER. You may not make any policy transactions or
changes after the insured person has died. Also, all insurance coverage ends on
the date as of which we process any request for a full surrender.
POLICY ISSUANCE
REGISTER DATE. When we issue a policy, we assign it a "register date," which
will be shown in the policy. We measure the months, years, and anniversaries of
your policy from your policy's register date. The register date will generally
be the same as the date we actually issue the policy (the "issue date").
Policies that would otherwise receive a register date of the 29th, 30th or 31st
of any month will receive a register date of the 28th of that month.
INVESTMENT START DATE. This is the date your investment first begins to earn a
return for you in our Alliance Money Market option (prior to the Allocation
Date). The investment start date is the issue date.
COMMENCEMENT OF INSURANCE COVERAGE. You must give the entire premium for this
policy to your financial professional before the policy is delivered to you. No
insurance under your policy will take effect unless (1) the insured person is
still living at the time such delivery is completed and (2) unless the
information in the application continues to be true and complete, without
material change, as of the time of such payment. If you submit your entire
premium with your application, we may, subject to certain conditions, provide a
limited amount of temporary insurance on the proposed insured person. You may
request and review a copy of our temporary insurance agreement for more
information about the terms and conditions of that coverage.
NON-ISSUANCE. If, after considering your application, we decide not to issue a
policy, we will refund any premium you have paid (less the amount of any loan)
without interest.
AGE; AGE AT ISSUE. Unless the context in this prospectus requires otherwise, we
consider the insured person's "age" during any policy year be his or her age on
his or her birthday nearest to the beginning of that policy year. For example,
the insured person's age for the first policy year ("age at issue") is that
person's age on whichever birthday is closer to (i.e., before or after) the
policy's register date.
GENDER-NEUTRAL POLICIES
Congress and various states have from time to time considered
legislation that would require insurance rates and the "factors" we use to
compute the policies' death benefits to be the same for males and females.
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<PAGE>
There will be no distinctions based on sex in the death benefit factors
or cost of insurance rates for Accumulator Life policies sold in Montana because
of Montana insurance department regulations. Guaranteed maximum cost of
insurance rates applicable to a gender-neutral policy will not be greater than
the comparable male rates under a gender specific Accumulator Life policy.
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<PAGE>
Section 7
More information about other matters
YOUR VOTING PRIVILEGES
VOTING OF PORTFOLIO SHARES. As the legal owner of any Portfolio shares that
support a variable investment option, we will attend (and have the right to vote
at) any meeting of shareholders of the Portfolio (or the Trust). To satisfy
currently-applicable legal requirements, however, we will give you the
opportunity to tell us how to vote the number of each Portfolio's shares that
are attributable to your policy. We will vote shares attributable to policies
for which we receive no instructions in the same proportion as the instructions
we do receive from all policies that participate in our Separate Account FP
(discussed below). With respect to any Portfolio shares that we are entitled to
vote directly (because we do not hold them in a separate account or because they
are not attributable to policies), we will vote in proportion to the
instructions we have received from all holders of variable annuity and variable
life insurance policies who are using that Portfolio.
Under current legal requirements, we may disregard the voting
instructions we receive from policyowners only in certain narrow circumstances
prescribed by SEC regulations. If we do, we will advise you of the reasons in
the next annual or semiannual report we send to you.
VOTING AS POLICYOWNER. In addition to being able to instruct voting of Portfolio
shares as discussed above, policyowners that use our variable investment options
may in a few instances be called upon to vote on matters that are not the
subject of a shareholder vote being taken by any Portfolio. If so, you will have
one vote for each $100 of account value in any such option; and we will vote our
interest in Separate Account FP in the same proportion as the instructions we
receive from holders of Accumulator Life and other policies that Separate
Account FP supports.
ABOUT OUR SEPARATE ACCOUNT FP
Each variable investment option is a part (or "subaccount") of our
Separate Account FP. We established Separate Account FP under special provisions
of the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable life insurance policies. We are the legal
owner of all of the assets in Separate Account FP and may withdraw any amounts
that exceed our reserves and other liabilities with respect to variable
investment options under our policies. The results of Separate Account FP's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account FP's predecessor was established on April 19, 1985 by
our then wholly owned subsidiary, Equitable Variable Life Insurance Company. We
established
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<PAGE>
our Separate Account FP under New York Law on September 21, 1995. When Equitable
Variable Life Insurance Company merged into Equitable Life, as of January 1,
1997, our Separate Account FP succeeded to all the assets, liabilities and
operations of its predecessor.
Separate Account FP is registered with the SEC under the Investment
Company Act of 1940 and is classified by that act as a "unit investment trust."
The SEC, however, does not manage or supervise Equitable Life or Separate
Account FP.
Each subaccount (variable investment option) of Separate Account FP
available under Accumulator Life invests solely in class IB shares issued by the
corresponding Portfolio of EQ Advisors Trust. Separate Account FP immediately
reinvests all dividends and other distributions it receives from a Portfolio in
additional shares of that Portfolio.
The EQ Advisors Trust sells its shares to Equitable Life separate
accounts in connection with Equitable Life's variable life insurance and annuity
products, to the trustee of a qualified benefit plan for Equitable Life and to
separate accounts of insurance companies, both affiliated and unaffiliated with
Equitable Life. We currently do not foresee any disadvantages to our
policyowners arising out of this. However, the Board of Trustees of EQ Advisors
Trust intends to monitor events to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that the Board's response insufficiently protects our
policyowners, we will see to it that appropriate action is taken to do so. Also,
if we ever believe that any of the Trust's Portfolios is so large as to
materially impair the investment performance of the Portfolio involved, we will
examine other investment alternatives.
ABOUT OUR GENERAL ACCOUNT
Our general account assets support all of our obligations (including
those under the Accumulator Life policies). Our general assets consist of all of
our assets as to which no class or classes of our annuity or life insurance
policies have any preferential claim. You will not share in the investment
experience of our general account assets, however; and we have full discretion
about how we invest those assets (subject only to any requirements of law).
TRANSFERS OF YOUR ACCOUNT VALUE
TRANSFERS NOT IMPLEMENTED. When we cannot process part of a transfer request, we
will not process any other part of the request. This could occur, for example,
where you request transfer of an amount greater than that currently allocated to
a variable investment option. In this circumstance, we will notify you and
explain why we could not process the request.
The dollar cost averaging service will terminate immediately if: (1) your amount
in the Alliance Money Market option is insufficient to cover the automatic
transfer amount; (2)
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<PAGE>
your policy is in a grace period; or (3) we receive notice of the insured
person's death. Similarly, the asset rebalancing program will terminate
immediately if either (2) or (3) occurs.
MARKET TIMING. You should note that the product is not designed for professional
"market timing" organizations, or other organizations or individuals engaging in
a market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
TELEPHONE AND EQACCESS REQUESTS
If you are a properly authorized person, you may make transfers by
telephone or over the Internet as described above under "Telephone and EQAccess
transfers."
Also, if you are both the owner and the insured person under your
policy, you may call 1-888-855-5100 (toll free) from a touch tone phone to make
the following additional types of requests:
o policy loans
o changes of allocation percentages (anticipated to be available through
EQAccess by the end of 2000)
o changes of address
For security purposes, all telephone requests are automatically
tape-recorded and are invalid if the information given is incomplete or any
portion of the request is inaudible. We have established procedures reasonably
designed to confirm that telephone instructions are genuine. These include
requiring personal identification information from the caller and providing
subsequent written confirmation of the instructions.
If you wish to participate in EQAccess, you must first agree to the
terms and conditions set forth in our EQAccess Online Services Agreement, which
you can find at our Web site. For security purposes, you may not initiate any
transactions relating to your policy for five (5) days after you have elected to
use EQAccess. We will send you a letter by first class mail confirming your
enrollment in EQAccess. Additionally, you will be required to use a password and
protect it from unauthorized use. We will provide subsequent written
confirmation of any EQAccess transactions. We will assume that all instructions
received through EQAccess from anyone using your password are given by
121315 45
<PAGE>
you; however, we reserve the right to refuse to process any transaction and/or
block access to EQAccess if we have reason to believe the instructions given are
unauthorized.
If we do not employ reasonable procedures to confirm the genuineness of
telephone or Internet instructions, we may be liable for any losses arising out
of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet
transactions if we have reason to believe that the request compromises the
general security and/or integrity of our automated systems (see discussion of
"Market timing" above).
Any telephone or Internet transaction request that we receive after the
close of a business day (which is usually 4:00 p.m. Eastern Time) will be
processed as of the next business day. During times of extreme market activity,
or for other reasons, you may be unable to contact us to make a telephone or
Internet request. If this occurs, you should submit a written transaction
request to our Administrative Office. We reserve the right to discontinue
telephone or Internet transactions, or modify the procedures and conditions for
such transactions, without notifying you at any time.
DEDUCTING POLICY CHARGES
MONTHLY COST OF INSURANCE CHARGE. The monthly cost of insurance charge is
determined by multiplying the cost of insurance rate by your policy's account
value. A greater policy account value, or a higher cost of insurance rate, will
generally result in a higher current monthly charge. The currently applicable
cost of insurance rate is 1.15%, subject to the maximum charges specified in
your policy.
We reserve the right to change this rate, but we will never charge more
than the guaranteed maximum charge specified in your policy. These maximum
charges are determined by multiplying the maximum cost of insurance rate that is
then applicable to your policy by the amount we have at risk under your policy.
The maximum cost of insurance rates are based on the 1980 Commissioners'
Standard Ordinary Male and Female Mortality Tables. Our amount at risk (also
described in your policy as "net amount at risk") on any date is the difference
between (a) the death benefit that would be payable if the insured person died
on that date and (b) the then total account value under the policy.
Our maximum cost of insurance rates will generally be lower (except in
Montana) if the insured person is a female than if a male.
DATE OF MONTHLY DEDUCTIONS. We make the regular monthly deductions as of the
first day of each policy month.
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<PAGE>
PURPOSES OF POLICY CHARGES. The charges under the policies are designed to
cover, in the aggregate, our direct and indirect costs of selling, administering
and providing benefits under the policies. They are also designed, in the
aggregate, to compensate us for the risks of loss we assume pursuant to the
policies. If, as we expect, the charges that we collect from the policies exceed
our total costs in connection with the policies, we will earn a profit.
Otherwise, we will incur a loss.
The current and maximum rates of certain of our charges have been set
with reference to estimates of the amount of specific types of expenses or risks
that we will incur. In most cases, this prospectus identifies such expenses or
risks in the name of the charge: e.g., charge for administration and taxes, cost
of insurance charge, guaranteed minimum death benefit charge, and mortality and
expense risk charge. However, the fact that any charge bears the name of, or is
designed primarily to defray, a particular expense or risk does not mean that
the amount we collect from that charge will never be more than the amount of
such expense or risk. Nor does it mean that we may not also be compensated for
such expense or risk out of any other charges we are permitted to deduct by the
terms of the policies. The surrender charge, for example, is designed primarily
to defray sales expenses, but may also be used to defray other expenses
associated with your policy that we have not recovered by the time of any
surrender.
SUICIDE AND CERTAIN MISSTATEMENTS
If an insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy. Also,
if an application misstated the age or gender of an insured person, we will
adjust the amount of any death benefit as described in the policy.
WHEN WE PAY POLICY PROCEEDS
GENERAL. We will generally pay any death benefit, surrender, partial withdrawal,
or loan within seven days after we receive the request and any other required
items.
CLEARANCE OF CHECKS. We reserve the right to defer payment of that portion of
your account value that is attributable to a premium payment or loan repayment
made by check for a reasonable period of time (not to exceed 15 days) to allow
the check to clear the banking system.
DELAY OF VARIABLE INVESTMENT OPTION PROCEEDS. We reserve the right to defer
payment of any death benefit, transfer, loan or other distribution that is
derived from a variable investment option if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or trading on that
exchange is restricted; (b) the SEC has declared that an emergency exists, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the account value; or (c) the law
permits the delay for the protection of owners. If we need to defer
121315 47
<PAGE>
calculation of values for any of the foregoing reasons, all delayed transactions
will be processed at the next available unit values.
DELAY TO CHALLENGE COVERAGE. We may challenge the validity of your insurance
policy based on any material misstatements in an application you have made to
us. We cannot make such challenges, however, beyond certain time limits set
forth in the policy. If the insured person dies within one of these limits, we
may delay payment of any proceeds until we decide whether to challenge the
policy.
CHANGES WE CAN MAKE
In addition to any of the other changes described in this prospectus,
we have the right to modify how we or Separate Account FP operate. We intend to
comply with applicable law in making any changes and, if necessary, we will seek
policyowner approval. We have the right to:
o combine two or more variable investment options or withdraw assets
relating to Accumulator Life from one variable investment option and
put them into another;
o end the registration of, or re-register, Separate Account FP under
the Investment Company Act of 1940;
o operate Separate Account FP under the direction of a "committee"
or discharge such a committee at any time;
o restrict or eliminate any voting rights or privileges of
policyowners (or other persons) that affect Separate Account FP;
o operate Separate Account FP, or one or more of the variable
investment options, in any other form the law allows. This includes
any form that allows us to make direct investments, in which case we
may charge Separate Account FP an advisory fee.
We may make any legal investments we wish for Separate Account FP. In
addition, we may disapprove any change in investment advisers or in investment
policy unless a law or regulation provides differently.
If we take any action that results in a material change in the
underlying investments of a variable investment option, we will notify you to
the extent required by law. We may, for example, cause the variable investment
option to invest in a mutual fund other than, or in addition to, EQ Advisors
Trust. If you then wish to transfer the amount you have in that option to
another variable investment option, you may do so.
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<PAGE>
We may make any changes in the policy or make distributions from the
policy to the extent we deem necessary to ensure that your policy qualifies or
continues to qualify as life insurance for tax purposes. Any such change will
apply uniformly to all policies that are affected. We will give you written
notice of such changes. Subject to all applicable legal requirements, we also
may make other changes in the policies that do not reduce any net cash surrender
value, death benefit, account value, or other accrued rights or benefits.
REPORTS WE WILL SEND YOU
Shortly after the end of each year of your policy, we will send you a
report that includes information about your policy's current death benefit,
account value, cash surrender value (i.e., account value minus any current
surrender charge), policy loans, policy transactions and amounts of charges
deducted. We will send you individual notices to confirm your premium payments,
loan repayments, transfers and certain other policy transactions.
LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal
proceedings. In our view, none of these proceedings would be considered material
with respect to a policyowner's interest in Separate Account FP, nor would any
of these proceedings be likely to have a material adverse effect upon the
Separate Account, our ability to meet our obligations under the policies, or the
distribution of the policies.
ILLUSTRATIONS OF POLICY BENEFITS
In order to help you understand how your policy values would vary over
time under different sets of assumptions, we will provide you with certain
illustrations when you purchase your policy and upon request thereafter. These
will be based on the age and gender of the insured person under your policy, and
such factors as the premium payment amount and assumed rates of return (within
limits) that you request. We have filed an example of such an illustration as an
exhibit to the registration statement referred to below.
SEC REGISTRATION STATEMENT
We have on file with the SEC a registration statement under the
Securities Act of 1933 that relates to the Accumulator Life policies. The
registration statement contains additional information that is not required to
be included in this prospectus. You may obtain this information, for a fee, from
the SEC's Public Reference Section at 450 5th Street, N.W., Washington, D.C.
20549 or, without charge, from the SEC's web site (www.sec.gov).
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<PAGE>
HOW WE MARKET THE POLICIES
We offer variable life insurance policies (including Accumulator Life)
and variable annuity contracts through AXA Advisors, LLC ("AXA Advisors"), the
successor to EQ Financial Consultants, Inc. and an affiliate of Equitable Life.
The Investment Company Act of 1940, therefore, classifies AXA Advisors as a
"principal underwriter" of those policies and contracts. AXA Advisors also
serves as a principal underwriter of EQ Advisors Trust and, prior to September
1999, AXA Advisors' predecessor was the manager of EQ Advisors Trust. AXA
Advisors' address is 1290 Avenue of the Americas, New York, NY 10104. AXA
Advisors is registered with the SEC as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). In 1998 and 1999, AXA
Advisors was paid a fee of $325,380, annually, for its services as principal
underwriter of our policies.
We sell Accumulator Life through financial professionals who are
licensed insurance agents and are also registered representatives of AXA
Advisors. The financial professional who sells you this policy receives sales
commissions from Equitable Life. The commissions don't cost you anything above
the charges and expenses already discussed elsewhere in this prospectus.
Generally, the agents will receive maximum commissions of 4.50% of the amount of
the initial premium you pay. Alternatively, the agents could receive a lower
initial commission, but receive additional commissions in later years based on
the policy's unloaned account value in the variable investment options. The
agent may be required to return to us any commissions on premiums that we have
refunded to a policyowner.
We also sell the policies through financial professionals who are
licensed independent insurance brokers and are also registered representatives
either of AXA Advisors or of another SEC registered broker-dealer. The
commissions for independent brokers will be no more than those for agents. The
commissions will be paid through the registered broker-dealer and may be subject
to our above-noted return policy if premiums are refunded.
INSURANCE REGULATION THAT APPLIES TO EQUITABLE LIFE
We are regulated and supervised by the New York State Insurance
Department. In addition, we are subject to the insurance laws and regulations in
every state where we sell policies. We submit annual reports on our operations
and finances to insurance officials in all of these states. The officials are
responsible for reviewing our reports to see that we are financially sound. Such
regulation, however, does not guarantee or provide absolute assurance of our
soundness.
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Directors and principal officers
Set forth below is information about our directors and, to the extent
they are responsible for variable life insurance operations, our principal
officers. Unless otherwise noted, their address is 1290 Avenue of the Americas,
New York, New York 10104.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
Francoise Colloc'h Director of Equitable Life (since July 1992). Member of the AXA Management
AXA Board and Group Executive President, Human Resources, Communication and
23 Avenue Matignon Synergies of AXA (since January 2000). Prior thereto, Senior Executive Vice
75008 Paris, France President, AXA (1993-2000). Director or officer of various subsidiaries and
affiliates of the AXA Group.
- ------------------------------------------------------------------------------------------------------------------------
Henri de Castries Director of Equitable Life (since September 1993). Chairman of the Board of
AXA AXA Financial (since April 1998); Vice Chairman (February 1996 to April
23 Avenue Matignon 1998). Vice Chairman of AXA's Management Board (since January 2000). Prior
75008 Paris, France thereto, Senior Executive Vice President, Financial Services and Life
Insurance Activities in the United States, Germany, the United Kingdom and
Benelux (1996 to 2000); Executive Vice President, Financial Services and Life
Insurance Activities (1993 to 1996) of AXA. Director or officer of various
subsidiaries and affiliates of the AXA Group. Director of DLJ and Alliance
Capital Management Corporation, the general partner of Alliance Holding and
Alliance.
- ------------------------------------------------------------------------------------------------------------------------
Joseph L. Dionne Director of Equitable Life (since May 1982). Retired Chairman of The
The McGraw-Hill Companies McGraw-Hill Companies (since January 2000); prior thereto, Chairman (April
1221 Avenue of the Americas 1988 to January 2000) and Chief Executive Officer (April 1983 to April 1998).
New York, NY 10020 Director of The McGraw-Hill Companies, Harris Corporation and Ryder System,
Inc. Director of AXA Financial, Inc. (since May, 1992).
- ------------------------------------------------------------------------------------------------------------------------
Denis Duverne Director of Equitable Life (since February 1998). Executive Vice President,
AXA International (US-UK-Benelux) AXA and member of AXA Executive Board (since
23, Avenue Matignon January, 2000). Director, Alliance (since February 1996) and Donaldson Lufkin
75008 Paris, France & Jenrette ("DLJ")(since February 1997).
- ------------------------------------------------------------------------------------------------------------------------
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<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DIRECTORS (continued)
- ------------------------------------------------------------------------------------------------------------------------
Jean-Rene Fourtou Director of Equitable Life (since July 1992). Vice Chairman of the Management
Rhone-Poulenc S.A. Board of Aventis (since December 1999). Prior thereto, Chairman and Chief
25, Quai Paul Doumer Executive Officer of Rhone-Poulenc, S.A. (1986 to December 1999). Member of
92408 Courbevoie Cedex the Supervisory Board of AXA. Director of Schneider S.A., Paribas, and Groupe
France Pernod-Ricard. Member of the Consulting Council of Banque de France.
Director, AXA Financial (since July, 1992).
- ------------------------------------------------------------------------------------------------------------------------
Norman C. Francis Director of Equitable Life (since March 1989). President of Xavier University
Xavier University of Louisiana of Louisiana; Director, First National Bank of Commerce, New Orleans, LA,
7325 Palmetto Street Piccadilly Cafeterias, Inc., and Entergy Corporation.
New Orleans, LA 70125
- ------------------------------------------------------------------------------------------------------------------------
Donald J. Greene Director of Equitable Life (since July 1991). Of Counsel, LeBoeuf, Lamb,
LeBouef, Lamb, Greene & MacRae, L.L.P. Greene & MacRae, L.L.P. (since 1999). Prior thereto, Partner of the firm
125 West 55th Street (1965 to 1999). Director of AXA Financial (since May 1992).
New York, NY 10019-4513
- ------------------------------------------------------------------------------------------------------------------------
John T. Hartley Director of Equitable Life (since August 1987). Currently a Director and
1025 NASA Boulevard retired Chairman and Chief Executive Officer of Harris Corporation (retired
Melbourne, FL 32919 July 1995); previously held other officerships with Harris Corporation.
Director of AXA Financial (since May 1992); Director of the McGraw Hill
Companies.
- ------------------------------------------------------------------------------------------------------------------------
John H.F. Haskell Jr. Director of Equitable Life (since July 1992); Director of AXA Financial
SBC Warburg Dillon Read LLC (since July 1992); Director, Senior Advisor of Warburg Dillon Read LLC (since
535 Madison Avenue 1999); Prior thereto, Managing Director and member of its Board of Directors
New York, NY 10022 (1975-1999); Chairman, Supervisory Board, Dillon Read (France) Gestion (until
1998); Director, Pall Corporation (since November 1998).
- ------------------------------------------------------------------------------------------------------------------------
Mary (Nina) Henderson Director of Equitable Life (since December 1996). Corporate Vice President,
BESTFOODS Core Business Development of Bestfoods (since June 1999). Prior thereto,
International Plaza President, Bestfoods Grocery and Vice President, Bestfoods (formerly CPC
700 Sylvan Avenue International, Inc.)(1997 to 1999). President, Bestfoods Specialty Markets
Englewood Cliffs, NJ 07632-9976 Group (1993 to 1997); Director, Hunt Corporation and PACTIV Corporation.
Director, AXA Financial (since December 1996).
- ------------------------------------------------------------------------------------------------------------------------
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<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
DIRECTORS (continued)
- ------------------------------------------------------------------------------------------------------------------------
W. Edwin Jarmain Director of Equitable Life (since July 1992). President, Jarmain Group Inc.
Jarmain Group Inc. (since 1979); and officer or director of several affiliated companies.
121 King Street West Director, DLJ (since October 1992), AXA Insurance (Canada), Anglo Canada
Suite 2525 General Insurance Company, and AXA Pacific Insurance Company, and Alternate
Toronto, Ontario M5H 3T9 Director, AXA Asia Pacific Holdings Limited. Chairman (non-executive) and
Canada Director, FCA International Ltd. (January 1994 to May 1998). Director of AXA
Financial, Inc. (since July 1992).
- ------------------------------------------------------------------------------------------------------------------------
George T. Lowy Director of Equitable Life (since July 1992). Partner, Cravath, Swaine &
Cravath, Swaine & Moore Moore. Director, Eramet.
825 Eighth Avenue
New York, NY 10019
- ------------------------------------------------------------------------------------------------------------------------
Didier Pineau-Valencienne Director of Equitable Life (since February 1996). Vice Chairman Credit Suisse
Credit Suisse, First Boston First Boston (since March 1999). Chairman and Chief Executive Officer (1981
64, rue de Miromesnel to February 1999)(now Honorary Chairman) Schneider Electric. Member of the
75008 Paris, France Supervisory Board of AXA. Director of CGIP, Aventis (formerly Rhone-Poulenc,
S.A.), Sema Group PLC (UK), Soft Computing and Swiss Helvetic Fund; member of
the Advisory Board of Booz-Allen & Hamilton. Director of AXA Financial, Inc.
(since February 1996).
- ------------------------------------------------------------------------------------------------------------------------
George J. Sella, Jr. Director of Equitable Life (since May 1987). Retired Chairman and Chief
P.O. Box 397 Executive Officer of American Cyanamid Company (retired April 1993);
Newton, NJ 07860 previously held other officerships with American Cyanamid. Director of AXA
Financial (since May 1992) and Coulter Pharmaceutical (since May 1987).
- ------------------------------------------------------------------------------------------------------------------------
Peter J. Tobin Director of Equitable Life (since March 1999); Dean of the Peter J. Tobin
St. John's University College of Business Administration, St. John's University (since August
8000 Utopia Parkway 1998); Chief Financial Officer, Chase Manhattan Corp. (1985 to 1997).
Jamaica, NY 11439
- ------------------------------------------------------------------------------------------------------------------------
Dave H. Williams Director of Equitable Life (since March 1991). Chairman (since 1977) and
Alliance Capital Management former Chief Executive Officer (1977 to January 1999), of Alliance, and
Corporation Chairman or Director of numerous subsidiaries and affiliated companies of
1345 Avenue of the Americas Alliance. Senior Executive Vice President of AXA (since January 1997).
New York, NY 10105 Director of AXA Financial (since May 1992).
- ------------------------------------------------------------------------------------------------------------------------
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<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
OFFICER-DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------
Michael Hegarty Director of Equitable Life (since January 1998). President (since January
1998) and Chief Operating Officer (since February 1998), Equitable Life.
Senior Vice Chairman (since November 1999), Vice Chairman (since April 1998),
Senior Executive Vice President (January 1998 to April 1998), and Director
and Chief Operating Officer (both since January 1998), AXA Financial.
Director, President and Chief Operating Officer, Equitable of Colorado (since
December 1999); AXA Client Solutions & Equitable Distribution Holding Corp.
(since September 1999). Vice Chairman (from 1996 to 1997), Chase Manhattan
Corporation. Vice Chairman (from 1995 to 1996) and Senior Executive Vice
President (from 1991 to 1995), Chemical Bank. Director, ACMC, Inc.
("ACMC")(since March 1998). Trustee, EQ Advisors Trust. Director, Equitable
Capital Management Corporation ("ECMC") (since March 1998); Alliance and DLJ
(both since May 1998).
- ------------------------------------------------------------------------------------------------------------------------
Edward D. Miller Director of Equitable Life (since August 1997). Chairman of the Board (since
January 1998), Chief Executive Officer (since August 1997), President (August
1997 to January 1998), Equitable Life. Director, President and Chief
Executive Officer, (all since August 1997), AXA Financial. Director, Chairman
of the Board and Chief Executive Officer, Equitable of Colorado (since
December 1999); AXA Client Solutions and Equitable Distribution Holding Corp.
(since September 1999). Member of the Management Board of AXA (since January
2000); Senior Vice Chairman, Chase Manhattan Corporation (March 1996 to April
1997). President (January 1994 to March 1996) and Vice Chairman (December
1991 to January 1994), Chemical Bank. Director, Alliance (since August 1997),
DLJ (since November 1997), ECMC (since March 1998), ACMC, Inc. (since March
1998), and AXA Canada (since September 1998). Director, KeySpan Energy.
- ------------------------------------------------------------------------------------------------------------------------
Stanley B. Tulin Director and Vice Chairman of the Board (since February 1998), and Chief
Financial Officer (since May 1996), Equitable Life. Vice Chairman of the
Board (since November 1999) and Chief Financial Officer (since May 1997) and
prior thereto, Senior Executive Vice President (February 1998 to November
1999), AXA Financial. Director, Vice Chairman and Chief Financial Officer
(since December 1999) Equitable of Colorado; AXA Client Solutions, LLC and
Equitable Distributions Holding Corp. (since September 1999). Vice President
(until 1998), EQ Advisors Trust. Director, Alliance (since July 1997), and
DLJ (since June 1997). Prior thereto, Chairman, Insurance Consulting and
Actuarial Practice, Coopers & Lybrand, L.L.P.
- ------------------------------------------------------------------------------------------------------------------------
121315 54
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ------------------------------------------------------------------------------------------------------------------------
Leon B. Billis Executive Vice President (since February 1998) and Chief Information Officer
(since November 1994), Equitable Life. Previously held other officerships
with Equitable Life; Director, J.M.R. Realty Services, Inc.
- ------------------------------------------------------------------------------------------------------------------------
Derry E. Bishop Executive Vice President (since September 1998), Chief Agency Officer, (since
December 1997), and Senior Vice President (January 1995 to September 1998),
Equitable Life; Director and Executive Vice President, AXA Advisors LLC and
Executive Vice President and Chief Agency Officer, AXA Client Solutions, LLC
(all since September 1999). Prior thereto, Director (since 1995) and
Executive Vice President (since 1994) EQF (now AXA Advisors).
- ------------------------------------------------------------------------------------------------------------------------
Harvey Blitz Senior Vice President, Equitable Life. Senior Vice President, AXA Financial.
Director and Chairman, Frontier Trust Company ("Frontier"). Director, EQF
(now AXA Advisors)(until September 1999). Executive Vice President and
Director (since September 1999), AXA Advisors, Director (until May 1996),
Equitable Distributors, Inc. ("EDI"). Director and Senior Vice President, AXA
Network, LLC (formerly EquiSource). Director and Officer of various Equitable
Life affiliates. Previously held other officerships with Equitable Life and
its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Kevin R. Byrne Senior Vice President and Treasurer, Equitable Life and AXA Financial. Senior
Vice President and Treasurer, AXA Client Solutions, LLC and Equitable
Distributors (since September 1999); Equitable of Colorado (since December
1999). Treasurer, Frontier (since 1990) and AXA Network, LLC (since 1999).
President and Chief Executive Officer (since September 1997), and prior
thereto, Vice President and Treasurer, Equitable Casualty Insurance Company
("Casualty"). Vice President and Treasurer, EQ ADVISORS TRUST (since March
1997). Director, Chairman, President and Chief Executive Officer, Equitable
JV Holdings (since August 1997). Director (since July 1997), and Senior Vice
President and Chief Financial Officer (since April 1998), ACMC and ECMC.
Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
John A. Caroselli Executive Vice President (since September 1998), Equitable Life; Senior Vice
President, Equitable Life (February 1998 to September 1998); Senior Vice
President, Chase Manhattan Corp. (1996 to 1998); Vice President, Chemical Bank
(1991 to 1996).
- ------------------------------------------------------------------------------------------------------------------------
121315 55
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------
Judy A. Faucett Senior Vice President, Equitable Life, (since September 1996) and Actuary
(September 1996 to December 1998). Partner and Senior Actuarial Consultant,
Coopers & Lybrand L.L.P. (January 1989 to August 1996).
- ------------------------------------------------------------------------------------------------------------------------
Alvin H. Fenichel Senior Vice President and Controller, Equitable Life and AXA Financial.
Senior Vice President and Controller, The Equitable of Colorado, Inc. (since
December 1999). Previously held other officerships with Equitable Life and
its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Paul J. Flora Senior Vice President and Auditor, Equitable Life. Vice President and
Auditor, AXA Financial.
- ------------------------------------------------------------------------------------------------------------------------
Robert E. Garber Executive Vice President and Chief Legal Officer (since November 1999),
Equitable Life; prior thereto, Executive Vice President and General
Counsel. General Counsel of AXA Financial. Previously held other
officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Donald R. Kaplan Senior Vice President (since September 1999), Chief Compliance
Officer and Associate General Counsel, Equitable Life. Previously held other
officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Michael S. Martin Executive Vice President (since September 1998) and Chief Marketing Officer
(since December 1997), Equitable Life; prior thereto, Senior Vice President
and Chief Marketing Officer. Chairman and Chief Executive Officer, AXA
Advisors LLC (since September 1999). Vice President, EQ Advisors Trust (until
April 1998). Director, Equitable Underwriting and Sales Agency (Bahamas),
Ltd. and AXA Network, LLC; President (since February 2000); Executive Vice
President (since December 1998), Colorado; prior thereto, Director and Senior
Vice President (since December 1998). Previously held other officerships with
Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Richard J. Matteis Executive Vice President, Equitable Life (since May 1998); Executive Vice
President, Chase Manhattan Corporation (January 1983 to June 1997); Director,
EQF (now AXA Advisors)(October 1998 to May 1999).
- ------------------------------------------------------------------------------------------------------------------------
121315 56
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------
Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable Life.
Executive Vice President (since May 1995) and Chief Investment Officer (since
July 1995), AXA Financial. Chairman, President and Trustee (since March
1997), EQ ADVISORS TRUST. Executive Vice President and Chief Investment
Officer, Equitable of Colorado (since December 1999), Executive Vice
President, AXA Client Solutions (since September 1999). Director, Alliance,
and Equitable Real Estate (until June 1997). Executive Vice President, EQF
(now AXA Advisors)(November 1996 to September 1999). Director, EREIM Managers
Corp. (since July 1997), and EREIM LP Corp. (since October 1997).
- ------------------------------------------------------------------------------------------------------------------------
Brian S. O'Neil Executive Vice President, Equitable Life (since June 1998). Executive Vice
President, AXA Financial and AXA Client Solutions (since September 1999).
Director of Investment, AXA Investment Management (January 1998 to June 1998);
Chief Investment Officer, AXA Investment Management (July 1995 to January 1998).
Trustee (since September 1999), EQ ADVISORS TRUST.
- ------------------------------------------------------------------------------------------------------------------------
Anthony C. Pasquale Senior Vice President, Equitable Life and AXA Client Solutions (since
September 1999). Director, Chairman and Chief Operating Officer, Casualty,
(since September 1997). Director, Equitable Agri-Business, Inc. (until June
1997). Previously held other officerships with Equitable Life and its
affiliates.
- ------------------------------------------------------------------------------------------------------------------------
Pauline Sherman Senior Vice President (since February 1999); Vice President, Secretary and
Associate General Counsel, Equitable Life and AXA Financial, (since September
1995). Senior Vice President, Secretary and Associate General Counsel, AXA
Financial and AXA Client Solutions (since November 1999). Senior Vice
President and Secretary, Equitable of Colorado (since December 1999).
Previously held other officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------
Richard V. Silver Senior Vice President (since February 1995) and General Counsel (since
November 1999) Equitable Life; prior thereto, Deputy General Counsel
(1996-1999). Senior Vice President and Associate General Counsel, AXA
Financial (since September 1996). Senior Vice President and General Counsel,
AXA Client Solutions (since November 1999). Vice President and General
Counsel, Equitable of Colorado (since December 1999). Director, AXA Advisors.
Senior Vice President and General Counsel, EIC (June 1997 to March 1998).
Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------
121315 57
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------
Jose S. Suquet Senior Executive Vice President (since February 1998), Chief Distribution
Officer (since December 1997) and Chief Agency Officer (August 1994 to
December 1997), Equitable Life. Senior Executive Vice President and Chief
Distribution Officer, AXA Client Solutions (since September 1999). Senior
Executive Vice President, Equitable of Colorado (since December 1999).
Executive Vice President (since May 1996), AXA Financial. Chairman (since
December 1997), EDI. Prior thereto, Agency Manager.
- ------------------------------------------------------------------------------------------------------------------------
Gregory G. Wilcox Executive Vice President (since September 1998), Senior Vice President (May 1992
to September 1998), Equitable Life. Executive Vice President (since November
1999), AXA Financial; prior thereto, Senior Vice President.
- ------------------------------------------------------------------------------------------------------------------------
R. Lee Wilson Executive Vice President (since May 1998) and Deputy Chief Financial Officer
(September 1998 to July 1999), Equitable Life. Executive Vice President, AXA
Client Solutions (since September 1999). Prior thereto, Executive Vice
President, Chase Manhattan Bank.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
121315 58
<PAGE>
Section 8
Financial statements of Separate Account FP and Equitable Life
The financial statements of Separate Account FP as of December 31, 1999
and for each of the three years in the period ended December 31, 1999 and the
financial statements of Equitable Life as of December 31, 1999 and 1998 and for
each of the three years in the period ended December 31, 1999 included in this
prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing. The financial statements of
Equitable Life have relevance for the policies only to the extent that they bear
upon the ability of Equitable Life to meet its obligations under the policies.
121315 59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Accountants..................................................................... FSA-2
Financial Statements:
Statements of Assets and Liabilities, December 31, 1999............................................ FSA-3
Statements of Operations for the Years Ended December 31, 1999, 1998 and 1997...................... FSA-6
Statements of Changes in Net Assets for the Years Ended December 31, 1999, 1998 and 1997........... FSA-15
Notes to Financial Statements...................................................................... FSA-24
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants..................................................................... F-1
Consolidated Financial Statements:
Consolidated Balance Sheets, December 31, 1999 and 1998............................................ F-2
Consolidated Statements of Earnings, Years Ended December 31, 1999, 1998 and 1997.................. F-3
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1999, 1998 and 1997...... F-4
Consolidated Statements of Cash Flows, Years Ended December 31, 1999, 1998 and 1997................ F-5
Notes to Consolidated Financial Statements......................................................... F-6
+ Formerly known as Equitable Variable Life Insurance Company Separate Account FP.
</TABLE>
FSA-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Policyowners of Separate Account FP
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the following Variable
Investment Options: Alliance Intermediate Government Securities, Alliance Money
Market, Alliance Quality Bond, Alliance High Yield, Alliance Common Stock,
Alliance Equity Index, Alliance Growth & Income, EQ/Alliance Premier Growth,
Capital Guardian Research, Capital Guardian U.S. Equity, Merrill Lynch Basic
Value Equity, MFS Growth with Income, MFS Research, EQ/Putnam Growth & Income
Value, T. Rowe Price Equity Income, Alliance Global, Alliance International,
Morgan Stanley Emerging Markets Equity, T. Rowe Price International Stock,
Alliance Aggressive Stock, Alliance Small Cap Growth, EQ/Evergreen, MFS Emerging
Growth Companies, Warburg Pincus Small Company Value, Alliance Balanced,
Alliance Conservative Investors, Alliance Growth Investors, EQ/Evergreen
Foundation, EQ/Putnam Balanced and Merrill Lynch World Strategy ("EQ Advisors
Trust Variable Investment Options"), 30 of the separate Variable Investment
Options of The Equitable Life Assurance Society of the United States ("Equitable
Life") Separate Account FP at December 31, 1999 and the results of each of their
operations and changes in each of their net assets for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of
Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States of America which 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, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The EQ Advisors Trust at
December 31, 1999 with the transfer agent, provide a reasonable basis for the
opinion expressed above. The rates of return information presented in Note 6 for
the year ended December 31, 1992 and for each of the periods indicated prior
thereto, were audited by other independent accountants whose report dated
February 16, 1993 expressed an unqualified opinion on the financial statements
containing such information.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
FIXED INCOME OPTIONS: EQUITY OPTIONS:
------------------------------------------------------ ----------------------------
ALLIANCE
INTERMEDIATE ALLIANCE ALLIANCE ALLIANCE
GOVERNMENT MONEY ALLIANCE HIGH COMMON ALLIANCE
SECURITIES MARKET QUALITY BOND YIELD STOCK EQUITY INDEX
------------ ------------ ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 80,139,159................. $78,746,672
342,765,909................. $344,082,723
246,885,528................. $233,631,434
177,773,173................. $149,030,820
3,081,451,600................. $3,783,859,850
621,830,916................. $850,584,523
205,101,089.................
46,147,852.................
182,262.................
494,512.................
38,508,013.................
391,533.................
Receivable for Trust shares sold.......... 58,836 -- -- 5,046 -- --
Receivable for policy-related
transactions.......................... 68,831 4,909,455 434,709 798,616 15,840,922 2,266,891
----------- ------------ ------------ ------------ -------------- ------------
Total Assets.............................. $78,874,339 $348,992,178 $234,066,143 $149,834,482 $3,799,700,772 $852,851,414
----------- ------------ ------------ ------------ -------------- ------------
LIABILITIES
Payable for Trust shares purchased........ $ -- $ 4,563,801 $ 161,711 $ -- $ 19,831,580 $ 2,546,878
Payable for policy-related
transactions.......................... -- -- -- -- -- --
----------- ------------ ------------ ------------ -------------- ------------
Total Liabilities......................... -- 4,563,801 161,711 -- 19,831,580 2,546,878
----------- ------------ ------------ ------------ -------------- ------------
NET ASSETS................................ $78,874,339 $344,428,377 $233,904,432 $149,834,482 $3,779,869,192 $850,304,536
=========== ============ ============ ============ ============== ============
Amount retained by Equitable Life
in Separate Account FP (Note 4)....... $ 945,030 $ 16,198 $ 1,326,200 $ 1,280 $ 80,914 $ 121,396
Net Assets Attributable
to Contractowners..................... 77,929,309 344,412,179 232,578,232 149,833,202 3,779,788,278 850,183,140
----------- ------------ ------------ ------------ -------------- ------------
NET ASSETS................................ $78,874,339 $344,428,377 $233,904,432 $149,834,482 $3,779,869,192 $850,304,536
=========== ============ ============ ============ ============== ============
<CAPTION>
EQUITY OPTIONS:
--------------------------------------------------------------------
EQ/ CAPITAL MERRILL MFS
ALLIANCE ALLIANCE CAPITAL GUARDIAN LYNCH GROWTH
GROWTH PREMIER GUARDIAN U.S. BASIC VALUE WITH
& INCOME GROWTH RESEARCH EQUITY EQUITY INCOME
----------- ----------- -------- -------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 80,139,159.................
342,765,909.................
246,885,528.................
177,773,173.................
3,081,451,600.................
621,830,916.................
205,101,089................. $232,271,328
46,147,852................. $51,216,559
182,262................. $193,355
494,512................. $511,837
38,508,013................. $39,778,636
391,533................. $412,169
Receivable for Trust shares sold.......... 160,367 -- -- -- -- --
Receivable for policy-related
transactions.......................... -- 283,944 24,204 -- 23,002 8,035
------------ ----------- -------- -------- ----------- --------
Total Assets.............................. $232,431,695 $51,500,503 $217,559 $511,837 $39,801,638 $420,204
------------ ----------- -------- -------- ----------- --------
LIABILITIES
Payable for Trust shares purchased........ $ -- $ 283,146 $ 24,204 $ -- $ 11,329 $ 4,490
Payable for policy-related
transactions.......................... 112,046 -- -- -- -- --
------------ ----------- -------- -------- ----------- --------
Total Liabilities......................... 112,046 283,146 24,204 -- 11,329 4,490
------------ ----------- -------- -------- ----------- --------
NET ASSETS................................ $232,319,649 $51,217,357 $193,355 $511,837 $39,790,309 $415,714
============ =========== ======== ======== =========== ========
Amount retained by Equitable Life
in Separate Account FP (Note 4)....... $ 434,457 $ 3,545 $ 219 $ 387 $ 81,800 $ 3,570
Net Assets Attributable
to Contractowners..................... 231,885,192 51,213,812 193,136 511,450 39,708,509 412,144
------------ ----------- -------- -------- ----------- --------
NET ASSETS................................ $232,319,649 $51,217,357 $193,355 $511,837 $39,790,309 $415,714
============ =========== ======== ======== =========== ========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONCLUDED):
-----------------------------------------------------------------------------
MORGAN
EQ/PUTNAM T. ROWE STANLEY
GROWTH & PRICE EMERGING
MFS INCOME EQUITY ALLIANCE ALLIANCE MARKETS
RESEARCH VALUE INCOME GLOBAL INTERNATIONAL EQUITY
----------- ----------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 38,563,600..................... $48,597,586
23,253,533..................... $21,780,737
54,114,065..................... $53,161,413
552,424,363..................... $724,986,725
51,584,951..................... $76,876,125
29,914,338..................... $40,958,925
43,913,498.....................
892,630,699.....................
46,097,819.....................
27,230.....................
160,950,031.....................
38,188,722.....................
Receivable for Trust shares sold.............. 252,705 -- -- -- -- --
Receivable for policy-related
transactions.............................. -- 82,740 194,627 1,126,946 92,708 82,278
----------- ----------- ----------- ------------ ----------- -----------
Total Assets.................................. $48,850,291 $21,863,477 $53,356,040 $726,113,671 $76,968,833 $41,041,203
----------- ----------- ----------- ------------ ----------- -----------
LIABILITIES
Payable for Trust shares purchased............ $ -- $ 69,698 $ 154,373 $ 1,211,437 $ 87,078 $ 350,654
Payable for policy-related
transactions.............................. 212,939 -- -- -- -- --
----------- ----------- ----------- ------------ ----------- -----------
Total Liabilities............................. 212,939 69,698 154,373 1,211,437 87,078 350,654
----------- ----------- ----------- ------------ ----------- -----------
NET ASSETS................................... $48,637,352 $21,793,779 $53,201,667 $724,902,234 $76,881,755 $40,690,549
=========== =========== =========== ============ =========== ===========
Amount retained by Equitable Life
in Separate Account FP (Note 4)........... $ 142,291 $ 69,602 $ 126,030 $ 3,388 $ 964,072 $ 1,767,601
Net Assets Attributable
to Policyowners........................... 48,495,061 21,724,177 53,075,637 724,898,846 75,917,683 38,922,948
----------- ----------- ----------- ------------ ----------- -----------
NET ASSETS.................................... $48,637,352 $21,793,779 $53,201,667 $724,902,234 $76,881,755 $40,690,549
=========== =========== =========== ============ =========== ===========
<CAPTION>
EQUITY OPTIONS (CONCLUDED):
----------------------------------------------------------------------------
WARBURG
T. ROWE MFS PINCUS
PRICE ALLIANCE ALLIANCE EMERGING SMALL
INTERNATIONAL AGGRESSIVE SMALL CAP EQ/ GROWTH COMPANY
STOCK STOCK GROWTH EVERGREEN COMPANIES VALUE
------------- -------------- ----------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 38,563,600.....................
23,253,533.....................
54,114,065.....................
552,424,363.....................
51,584,951.....................
29,914,338.....................
43,913,498..................... $53,258,879
892,630,699..................... $1,051,440,590
46,097,819..................... $70,174,096
27,230..................... $28,680
160,950,031..................... $238,027,993
38,188,722..................... $35,893,840
Receivable for Trust shares sold.............. -- 2,154,914 22,666,998 -- -- 71,466
Receivable for policy-related
transactions.............................. 57,539 -- -- -- 1,271,988 --
----------- -------------- ----------- ------- ------------ -----------
Total Assets.................................. $53,316,418 $1,053,595,504 $92,841,094 $28,680 $239,299,981 $35,965,306
----------- -------------- ----------- ------- ------------ -----------
LIABILITIES
Payable for Trust shares purchased............ $ 2,392 $ -- $ -- $ -- $ 1,116,940 $ --
Payable for policy-related
transactions.............................. -- 1,550,441 22,460,673 -- -- 17,093
----------- -------------- ----------- ------- ------------ -----------
Total Liabilities............................. 2,392 1,550,441 22,460,673 -- 1,116,940 17,093
----------- -------------- ----------- ------- ------------ -----------
NET ASSETS................................... $53,314,026 $1,052,045,063 $70,380,421 $28,680 $238,183,041 $35,948,213
=========== ============== =========== ======= ============ ===========
Amount retained by Equitable Life
in Separate Account FP (Note 4)........... $ 178,040 $ 3,855 $ 527,774 $ 18 $ 386,768 $ 164,967
Net Assets Attributable
to Policyowners........................... 53,135,986 1,052,041,208 69,852,647 28,662 237,796,273 35,783,246
----------- -------------- ----------- ------- ------------ -----------
NET ASSETS.................................... $53,314,026 $1,052,045,063 $70,380,421 $28,680 $238,183,041 $35,948,213
=========== ============== =========== ======= ============ ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSET ALLOCATION OPTIONS:
------------------------------------------------------------------------------------
MERRILL
ALLIANCE ALLIANCE EQ/ EQ/ LYNCH
ALLIANCE CONSERVATIVE GROWTH EVERGREEN PUTNAM WORLD
BALANCED INVESTORS INVESTORS FOUNDATION BALANCED STRATEGY
------------ ------------ -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $453,630,311..................... $546,866,262
194,380,806..................... $217,969,178
928,527,892..................... $1,216,541,911
2,749..................... $ 2,848
8,911,255..................... $8,418,996
4,518,718..................... $5,372,189
Receivable for Trust shares sold.............. -- 15,822 -- -- -- --
Receivable for policy-related
transactions.............................. -- 115,963 703,914 -- 16,607 1,267
------------ ------------ -------------- ------- ---------- ----------
Total Assets.................................. $546,866,262 $218,100,963 $1,217,245,825 $ 2,848 $8,435,603 $5,373,456
------------ ------------ -------------- ------- ---------- ----------
LIABILITIES
Payable for Trust shares purchased............ $ 31,321 $ -- $ 353,476 $ -- $ 4,500 $ 1,232
Payable for policy-related
transactions.............................. 123,383 -- -- -- -- --
------------ ------------ -------------- ------- ---------- ----------
Total Liabilities............................. 154,704 -- 353,476 -- 4,500 1,232
------------ ------------ -------------- ------- ---------- ----------
NET ASSETS.................................... $546,711,558 $218,100,963 $1,216,892,349 $ 2,848 $8,431,103 $5,372,224
============ ============ ============== ======= ========== ==========
Amount retained by Equitable Life
in Separate Account FP (Note 4)........... $ 1,088,939 $ 521,116 $ 924,554 $ 2 $ 70,099 $ 494,770
Net Assets Attributable
to Contractowners......................... 545,622,619 217,579,847 1,215,967,795 2,846 8,361,004 4,877,454
------------ ------------ -------------- ------- ---------- ----------
NET ASSETS.................................... $546,711,558 $218,100,963 $1,216,892,349 $ 2,848 $8,431,103 $5,372,224
============ ============ ============== ======= ========== ==========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME OPTIONS:
-------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES ALLIANCE MONEY MARKET
---------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 4,049,521 $3,477,938 $2,914,613 $13,943,193 $10,719,684 $9,754,675
Expenses (Note 3):
Mortality and expense
risk charges..................... 378,916 350,536 282,422 1,613,234 1,204,220 1,101,168
----------- ---------- ---------- ----------- ----------- ----------
NET INVESTMENT INCOME..................... 3,670,605 3,127,402 2,632,191 12,329,959 9,515,464 8,653,507
----------- ---------- ---------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... (194,507) 60,260 (95,509) 517,935 (161,314) (513,800)
Realized gain distribution
from the Trust................... -- -- -- 10,344 7,750 13,435
----------- ---------- ---------- ----------- ----------- ----------
NET REALIZED GAIN (LOSS).................. (194,507) 60,260 (95,509) 528,279 (153,564) (500,365)
----------- ---------- ---------- ----------- ----------- ----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............... 2,391,062 868,053 (141,479) 1,536,450 804,349 24,023
End of period..................... (1,392,487) 2,391,062 868,053 1,316,815 1,536,450 804,349
----------- ---------- ---------- ----------- ----------- ----------
Change in unrealized appreciation
(depreciation) during the period..... (3,783,549) 1,523,009 1,009,532 (219,635) 732,101 780,326
----------- ---------- ---------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ (3,978,056) 1,583,269 914,023 308,644 578,537 279,961
----------- ---------- ---------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ (307,451) $4,710,671 $3,546,214 $12,638,603 $10,094,001 $8,933,468
=========== ========== ========== =========== =========== ==========
<CAPTION>
FIXED INCOME OPTIONS:
----------------------------------------
ALLIANCE QUALITY BOND
---------------------------------------
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 12,542,857 $10,317,238 $ 8,869,740
Expenses (Note 3):
Mortality and expense
risk charges..................... 1,329,147 1,106,136 845,069
------------ ----------- -----------
NET INVESTMENT INCOME..................... 11,213,710 9,211,102 8,024,671
------------ ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... (1,493,664) 34,937 (504,580)
Realized gain distribution
from the Trust................... 870,458 4,596,907 --
------------ ----------- -----------
NET REALIZED GAIN (LOSS).................. (623,206) 4,631,844 (504,580)
------------ ----------- -----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............... 3,367,697 2,395,718 (1,961,822)
End of period..................... (13,254,094) 3,367,697 2,395,718
------------ ----------- -----------
Change in unrealized appreciation
(depreciation) during the period..... (16,621,791) 971,979 4,357,540
------------ ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ (17,244,997) 5,603,823 3,852,960
------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ (6,031,287) $14,814,925 $11,877,631
============ =========== ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME OPTIONS (CONCLUDED): EQUITY OPTIONS:
--------------------------------------- ----------------------------------------
ALLIANCE HIGH YIELD ALLIANCE COMMON STOCK
--------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 17,378,455 $ 18,449,747 $12,918,934 $ 20,107,533 $ 15,939,680 $ 10,668,337
Expenses (Note 3):
Mortality and expense
risk charges..................... 889,065 1,007,106 789,982 19,069,959 14,600,706 11,435,936
------------ ------------ ----------- ------------ ------------ ------------
NET INVESTMENT INCOME..................... 16,489,390 17,442,641 12,128,952 1,037,574 1,338,974 (767,599)
------------ ------------ ----------- ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... (15,192,553) (2,344,392) 936,554 221,690,581 169,109,310 53,841,049
Realized gain distribution
from the Trust................... 161,999 3,396,523 6,365,633 497,324,765 353,834,250 164,814,473
------------ ------------ ----------- ------------ ------------ ------------
NET REALIZED GAIN (LOSS).................. (15,030,554) 1,052,131 7,302,187 719,015,346 522,943,560 218,655,522
------------ ------------ ----------- ------------ ------------ ------------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ (20,898,855) 8,622,836 5,664,824 689,309,204 567,231,009 294,432,897
End of period.................. (28,742,353) (20,898,854) 8,622,836 702,408,250 689,309,204 567,231,009
------------ ------------ ----------- ------------ ------------ ------------
Change in unrealized appreciation
(depreciation) during the period..... (7,843,498) (29,521,690) 2,958,012 13,099,046 122,078,195 272,798,112
------------ ------------ ----------- ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ (22,874,052) (28,469,559) 10,260,199 732,114,392 645,021,755 491,453,634
------------ ------------ ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ (6,384,662) $(11,026,918) $22,389,151 $733,151,966 $646,360,729 $490,686,035
============ ============ =========== ============ ============ ============
<CAPTION>
EQUITY OPTIONS:
---------------------------------------
ALLIANCE EQUITY INDEX
---------------------------------------
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 7,575,355 $ 3,958,217 $ 2,610,223
Expenses (Note 3):
Mortality and expense
risk charges..................... 3,729,959 1,862,376 977,620
------------ ------------ -----------
NET INVESTMENT INCOME..................... 3,845,396 2,095,841 1,632,603
------------ ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 21,008,249 5,460,381 (414,497)
Realized gain distribution
from the Trust................... 6,196,508 128,151 850,437
------------ ------------ -----------
NET REALIZED GAIN (LOSS).................. 27,204,757 5,588,532 435,940
------------ ------------ -----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 136,665,316 63,055,426 21,448,224
End of period.................. 228,753,607 136,665,316 63,055,426
------------ ------------ -----------
Change in unrealized appreciation
(depreciation) during the period..... 92,088,291 73,609,890 41,607,202
------------ ------------ -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 119,293,048 79,198,422 42,043,142
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $123,138,444 $ 81,294,263 $43,675,745
============ ============ ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
---------------------------------------------------------------------------------
CAPITAL
EQ/ALLIANCE CAPITAL GUARDIAN
PREMIER GUARDIAN U.S.
ALLIANCE GROWTH & INCOME GROWTH (C) RESEARCH (d) EQUITY (d)
--------------------------------------- ----------- ------------ ----------
1999 1998 1997 1999 1999 1999
----------- ----------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 530,384 $ 415,436 $ 636,335 $ 30,540 $ 280 $ 1,159
Expenses (Note 3):
Mortality and expense
risk charges..................... 1,048,745 668,795 358,997 63,730 209 378
----------- ----------- ----------- ---------- ------- -------
NET INVESTMENT INCOME..................... (518,361) (253,359) 277,338 (33,190) 71 781
----------- ----------- ----------- ---------- ------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 730,688 7,289,936 530,421 83,605 2,810 451
Realized gain distribution
from the Trust................... 20,855,872 12,146,928 5,006,247 106,890 27 1,508
----------- ----------- ----------- ---------- ------- -------
NET REALIZED GAIN (LOSS).................. 21,586,560 19,436,864 5,536,668 190,495 2,837 1,959
----------- ----------- ----------- ---------- ------- -------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 16,240,511 13,021,603 5,074,338 -- -- --
End of period.................. 27,170,239 16,240,511 13,021,603 5,068,707 11,093 17,325
----------- ----------- ----------- ---------- ------- -------
Change in unrealized appreciation
(depreciation) during the period..... 10,929,728 3,218,908 7,947,265 5,068,707 11,093 17,325
----------- ----------- ----------- ---------- ------- -------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 32,516,288 22,655,772 13,483,933 5,259,202 13,930 19,284
----------- ----------- ----------- ---------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $31,997,927 $22,402,413 $13,761,271 $5,226,012 $14,001 $20,065
=========== =========== =========== ========== ======= =======
<CAPTION>
EQUITY OPTIONS (CONTINUED):
------------------------------------------
MERRILL LYNCH
BASIC VALUE EQUITY (A)
------------------------------------------
1999 1998 1997
---------- --------- --------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 468,257 $ 192,441 $ 35,810
Expenses (Note 3):
Mortality and expense
risk charges..................... 153,456 66,427 9,349
---------- --------- --------
NET INVESTMENT INCOME..................... 314,801 126,014 26,461
---------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 426,168 207,032 6,656
Realized gain distribution
from the Trust................... 1,963,197 667,083 33,738
---------- --------- --------
NET REALIZED GAIN (LOSS).................. 2,389,365 874,115 40,394
---------- --------- --------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ (91,959) 135,003 --
End of period.................. 1,270,622 (91,959) 135,003
---------- --------- --------
Change in unrealized appreciation
(depreciation) during the period..... 1,362,581 (226,962) 135,003
---------- --------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 3,751,946 647,153 175,397
---------- --------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $4,066,747 $ 773,167 $201,858
========== ========= ========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
---------------------------------------------------------------------------------
MFS
GROWTH
WITH EQ/PUTNAM
INCOME (C) MFS RESEARCH (A) GROWTH & INCOME VALUE (A)
---------- --------------------------------- ---------------------------------
1999 1999 1998 1997 1999 1998 1997
---------- ----------- ---------- -------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 1,268 $ 52,831 $ 71,137 $ 20,442 $ 278,910 $ 143,999 $ 33,273
Expenses (Note 3):
Mortality and expense
risk charges..................... 431 208,639 86,044 13,127 110,374 56,995 9,655
------- ----------- ---------- -------- ----------- ---------- --------
NET INVESTMENT INCOME..................... 837 (155,808) (14,907) 7,315 168,536 87,004 23,618
------- ----------- ---------- -------- ----------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... (227) 995,232 494,412 6,989 276,186 209,398 1,078
Realized gain distribution
from the Trust................... -- 1,086,222 -- 81,156 1,499,307 130,047 27,226
------- ----------- ---------- -------- ----------- ---------- --------
NET REALIZED GAIN (LOSS).................. (227) 2,081,454 494,412 88,145 1,775,493 339,445 28,304
------- ----------- ---------- -------- ----------- ---------- --------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ -- 3,313,063 249,382 -- 1,160,602 269,561 --
End of period.................. 20,637 10,033,987 3,313,063 249,382 (1,472,796) 1,160,602 269,561
------- ----------- ---------- -------- ----------- ---------- --------
Change in unrealized appreciation
(depreciation) during the period..... 20,637 6,720,924 3,063,681 249,382 (2,633,398) 891,041 269,561
------- ----------- ---------- -------- ----------- ---------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 20,410 8,802,378 3,558,093 337,527 (857,905) 1,230,486 297,865
------- ----------- ---------- -------- ----------- ---------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $21,247 $ 8,646,570 $3,543,186 $344,842 $ (689,369) $1,317,490 $321,483
======= =========== ========== ======== =========== ========== ========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
------------------------------------
T. ROWE PRICE EQUITY INCOME (A)
------------------------------------
1999 1998 1997
------------ ---------- ----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 998,227 $ 722,954 $ 145,613
Expenses (Note 3):
Mortality and expense
risk charges..................... 272,123 173,802 29,706
----------- ---------- ----------
NET INVESTMENT INCOME..................... 726,104 549,152 115,907
----------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 655,822 341,473 56,634
Realized gain distribution
from the Trust................... 2,081,914 930,853 53,840
----------- ---------- ----------
NET REALIZED GAIN (LOSS).................. 2,737,736 1,272,326 110,474
----------- ---------- ----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 1,585,616 1,073,548 --
End of period.................. (952,652) 1,585,616 1,073,548
----------- ---------- ----------
Change in unrealized appreciation
(depreciation) during the period..... (2,538,268) 512,068 1,073,548
----------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 199,468 1,784,394 1,184,022
----------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 925,572 $2,333,546 $1,299,929
=========== ========== ==========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
-----------------------------------------------------------------------------------
ALLIANCE GLOBAL ALLIANCE INTERNATIONAL
--------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 561,424 $ 5,636,672 $ 8,803,070 $ -- $ 996,913 $ 1,386,732
Expenses (Note 3):
Mortality and expense
risk charges..................... 3,438,444 2,777,697 2,805,310 321,035 289,066 297,278
------------ ----------- ------------ ----------- ----------- -----------
NET INVESTMENT INCOME..................... (2,877,020) 2,858,975 5,997,760 (321,035) 707,847 1,089,454
------------ ----------- ------------ ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 67,795,783 17,406,382 30,411,238 1,164,532 (3,606,669) (57,635)
Realized gain distribution
from the Trust................... 44,485,709 33,241,409 26,426,403 1,299,989 10,663 2,325,403
------------ ----------- ------------ ----------- ----------- -----------
NET REALIZED GAIN (LOSS).................. 112,281,492 50,647,791 56,837,641 2,464,521 (3,596,006) 2,267,768
------------ ----------- ------------ ----------- ----------- -----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 83,560,503 46,113,189 58,618,054 5,502,451 (2,793,834) 1,857,793
End of period.................. 172,562,362 83,560,503 46,113,189 25,291,174 5,502,451 (2,793,834)
------------ ----------- ------------ ----------- ----------- -----------
Change in unrealized appreciation
(depreciation) during the period..... 89,001,859 37,447,314 (12,504,865) 19,788,723 8,296,285 (4,651,627)
------------ ----------- ------------ ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 201,283,351 88,095,105 44,332,776 22,253,244 4,700,279 (2,383,859)
------------ ----------- ------------ ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $198,406,331 $90,954,080 $ 50,330,536 $21,932,209 $ 5,408,126 $(1,294,405)
============ =========== ============ =========== =========== ===========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
------------------------------------
MORGAN STANLEY
EMERGING MARKETS EQUITY (B)
-------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ -- $ 37,240 $ 16,623
Expenses (Note 3):
Mortality and expense
risk charges..................... 66,405 23,921 2,862
----------- ----------- -----------
NET INVESTMENT INCOME..................... (66,405) 13,319 13,761
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 363,825 (637,290) (14,566)
Realized gain distribution
from the Trust................... 394,053 -- --
----------- ----------- -----------
NET REALIZED GAIN (LOSS).................. 757,878 (637,290) (14,566)
----------- ----------- -----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ (2,942,633) (1,079,388) --
End of period.................. 11,044,586 (2,942,633) (1,079,338)
----------- ----------- -----------
Change in unrealized appreciation
(depreciation) during the period..... 13,987,219 (1,863,245) (1,079,388)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 14,745,097 (2,500,535) (1,093,954)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $14,678,692 $(2,487,216) $(1,080,193)
=========== =========== ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
-----------------------------------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK (A) ALLIANCE AGGRESSIVE STOCK
-------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
----------- ---------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 192,580 $ 258,382 $ 2,393 $ 3,163,286 $ 4,461,389 $ 1,311,613
Expenses (Note 3):
Mortality and expense
risk charges..................... 200,684 119,672 26,332 5,481,701 5,581,296 5,299,127
----------- ---------- --------- ------------ ------------ ------------
NET INVESTMENT INCOME..................... (8,104) 138,710 (23,939) (2,318,415) (1,119,907) (3,987,514)
----------- ---------- --------- ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 4,626,661 354,551 (50,331) (27,888,194) (39,688,312) 28,217,939
Realized gain distribution
from the Trust................... 583,215 268 -- 61,642,419 46,528,461 79,729,154
----------- ---------- --------- ------------ ------------ ------------
NET REALIZED GAIN (LOSS).................. 5,209,876 354,819 (50,331) 33,754,225 6,840,149 107,947,093
----------- ---------- --------- ------------ ------------ ------------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 1,603,083 (820,718) -- 26,715,214 32,695,620 46,617,235
End of period.................. 9,345,381 1,603,083 (820,718) 158,809,890 26,715,214 32,695,620
----------- ---------- --------- ------------ ------------ ------------
Change in unrealized appreciation
(depreciation) during the period..... 7,742,298 2,423,801 (820,718) 132,094,676 (5,980,406) (13,921,615)
----------- ---------- --------- ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 12,952,174 2,778,620 (871,049) 165,848,901 859,743 94,025,478
----------- ---------- --------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $12,944,070 $2,917,330 $(894,988) $163,530,486 $ (260,164) $ 90,037,964
=========== ========== ========= ============ ============ ============
<CAPTION>
EQUITY OPTIONS (CONTINUED)
-------------------------------------
ALLIANCE SMALL CAP GROWTH (A)
-------------------------------------
1999 1998 1997
----------- ----------- ---------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ -- $ 4,062 $ 4,189
Expenses (Note 3):
Mortality and expense
risk charges..................... 284,347 215,285 41,540
----------- ----------- ---------
NET INVESTMENT INCOME..................... (284,347) (211,223) (37,351)
----------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 4,345,484 (7,585,521) (609,208)
Realized gain distribution
from the Trust................... -- -- 545,833
----------- ----------- ---------
NET REALIZED GAIN (LOSS).................. 4,345,484 (7,585,521) (63,375)
----------- ----------- ---------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 8,780,955 771,812 --
End of period.................. 24,076,277 8,780,955 771,812
----------- ----------- ---------
Change in unrealized appreciation
(depreciation) during the period..... 15,295,322 8,009,143 771,812
----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 19,640,806 423,622 708,437
----------- ----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $19,356,459 $ 212,399 $ 671,086
=========== =========== =========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONCLUDED):
--------------------------------------------------------------------------------------
EQ/ MFS EMERGING WARBURG PINCUS
EVERGREEN (C) GROWTH COMPANIES (A) SMALL COMPANY VALUE (A)
------------- ---------------------------------- -----------------------------------
1999 1999 1998 1997 1999 1998 1997
------------- ----------- ----------- -------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 99 $ -- $ 969 $ 24,358 $ 67,108 $ 171,716 $ 21,651
Expenses (Note 3):
Mortality and expense
risk charges..................... 18 640,976 157,484 18,835 180,999 168,543 44,889
------ ----------- ----------- -------- ----------- ----------- ---------
NET INVESTMENT INCOME..................... 81 (640,976) (156,515) 5,523 (113,891) 3,173 (23,238)
------ ----------- ----------- -------- ----------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 20 13,577,250 4,270,964 161,034 (1,591,217) (142,969) 29,803
Realized gain distribution
from the Trust................... -- 3,969,879 -- 296,998 -- -- 110,391
------ ----------- ----------- -------- ----------- ----------- ---------
NET REALIZED GAIN (LOSS).................. 20 17,547,129 4,270,964 458,032 (1,591,217) (142,969) 140,194
------ ----------- ----------- -------- ----------- ----------- ---------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ -- 6,996,177 171,320 -- (4,215,341) (228,709) --
End of period.................. 1,450 77,077,961 6,996,177 171,320 (2,294,882) (4,215,340) (228,709)
------ ----------- ----------- -------- ----------- ----------- ---------
Change in unrealized appreciation
(depreciation) during the period..... 1,450 70,081,784 6,824,857 171,320 1,920,459 (3,986,631) (228,709)
------ ----------- ----------- -------- ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 1,470 87,628,913 11,095,821 629,352 329,242 (4,129,600) (88,515)
------ ----------- ----------- -------- ----------- ----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $1,551 $86,987,937 $10,939,306 $634,875 $ 215,351 $(4,126,427) $(111,753)
====== =========== =========== ======== =========== =========== =========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION OPTIONS:
------------------------------------------------------------------------------
ALLIANCE BALANCED ALLIANCE CONSERVATIVE INVESTORS
------------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $14,371,360 $12,467,646 $13,756,520 $ 7,166,906 $ 7,360,794 $ 7,217,860
Expenses (Note 3):
Mortality and expense
risk charges..................... 3,107,759 2,765,767 2,544,300 1,244,722 1,136,634 1,066,078
----------- ----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME..................... 11,263,601 9,701,879 11,212,220 5,922,184 6,224,160 6,151,782
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 9,085,444 2,733,445 5,910,524 2,045,436 1,432,988 818,458
Realized gain distribution
from the Trust................... 50,638,464 41,525,872 21,117,088 9,007,765 10,768,916 5,486,742
----------- ----------- ----------- ----------- ----------- -----------
NET REALIZED GAIN (LOSS).................. 59,723,908 44,259,317 27,027,612 11,053,201 12,201,904 6,305,200
----------- ----------- ----------- ----------- ----------- -----------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 81,344,863 60,878,286 42,382,824 21,507,963 16,228,145 7,700,135
End of period.................. 93,235,951 81,344,863 60,878,286 23,588,372 21,507,963 16,228,145
----------- ----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation) during the period..... 11,891,088 20,466,577 18,495,462 2,080,409 5,279,818 8,528,010
----------- ----------- ----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 71,614,996 64,725,894 45,523,074 13,133,610 17,481,722 14,833,210
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $82,878,597 $74,427,773 $56,735,294 $19,055,794 $23,705,882 $20,984,992
=========== =========== =========== =========== =========== ===========
<CAPTION>
ASSET ALLOCATION OPTIONS:
------------------------------------------
ALLIANCE GROWTH INVESTORS
------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.......... $ 17,092,741 $ 18,252,039 $ 19,280,574
Expenses (Note 3):
Mortality and expense
risk charges..................... 6,207,073 5,194,905 4,570,289
------------ ------------ ------------
NET INVESTMENT INCOME..................... 10,885,668 13,057,134 14,710,285
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments................... 15,284,978 7,745,162 10,531,767
Realized gain distribution
from the Trust................... 104,658,738 78,060,201 42,780,443
------------ ------------ ------------
NET REALIZED GAIN (LOSS).................. 119,943,716 85,805,363 53,312,210
------------ ------------ ------------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............ 167,705,597 115,056,641 67,150,693
End of period.................. 288,014,018 167,705,600 115,056,641
------------ ------------ ------------
Change in unrealized appreciation
(depreciation) during the period..... 120,308,421 52,648,959 47,905,948
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS........................ 240,252,137 138,454,322 101,218,158
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $251,137,805 $151,511,456 $115,928,443
============ ============ ============
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION OPTIONS (CONCLUDED):
-------------------------------------------------------------------------------
EQ/EVERGREEN MERRILL LYNCH
FOUNDATION (C) EQ/PUTNAM BALANCED WORLD STRATEGY (A)
-------------- ------------------------------- ----------------------------
1999 1999 1998 1997 1999 1998 1997
------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust........... $ 31 $ 42,372 $111,099 $ 46,468 $ 41,786 $ 36,750 $ 17,124
Expenses (Note 3):
Mortality and expense
risk charges...................... 2 39,416 18,744 2,741 18,905 12,469 2,678
------- --------- -------- -------- -------- -------- --------
NET INVESTMENT INCOME...................... 29 2,956 92,355 43,727 22,881 24,281 14,446
------- --------- -------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments.................... 302 185,026 348,952 561 197,727 19,432 (3,626)
Realized gain distribution
from the Trust.................... -- 447,013 71,044 31,119 67,733 -- 38,995
------- --------- -------- -------- -------- -------- --------
NET REALIZED GAIN (LOSS)................... 302 632,039 419,996 31,680 265,460 19,432 35,369
------- --------- -------- -------- -------- -------- --------
Unrealized appreciation
(depreciation) on investments:
Beginning of period............. -- 259,883 270,232 -- 187,734 (37,926) --
End of period................... (1,505) (492,259) 259,882 270,232 853,470 187,734 (37,926)
------- --------- -------- -------- -------- -------- --------
Change in unrealized appreciation
(depreciation) during the period...... (1,505) (752,142) (10,350) 270,232 665,736 225,660 (37,926)
------- --------- -------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS......................... (1,203) (120,103) 409,646 301,912 931,196 245,092 (2,557)
------- --------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.............. $(1,174) $(117,147) $502,001 $345,639 $954,077 $269,373 $ 11,889
======= ========= ======== ======== ======== ======== ========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME OPTIONS:
------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES ALLIANCE MONEY MARKET
------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- ----------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ 3,670,605 $ 3,127,402 $ 2,632,191 $ 12,329,959 $ 9,515,464 $ 8,653,507
Net realized gain (loss).............. (194,507) 60,260 (95,509) 528,279 (153,564) (500,365)
Change in unrealized appreciation
(depreciation) on investments..... (3,783,549) 1,523,009 1,009,532 (219,635) 732,101 780,326
----------- ----------- ----------- ------------ ------------- -------------
Net increase (decrease) in net assets
from operations................... (307,451) 4,710,671 3,546,214 12,638,603 10,094,001 8,933,468
----------- ----------- ----------- ------------ ------------- -------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 16,691,635 11,828,290 8,749,531 231,007,033 229,608,273 234,059,930
Benefits and other policy-related
transactions (Note 3)............. (8,904,461) (9,081,050) (5,971,751) (63,463,349) (41,370,215) (40,687,124)
Net transfers among funds and
guaranteed interest account....... (3,762,164) 9,141,659 7,704,724 (91,919,848) (128,607,686) (259,049,840)
----------- ----------- ----------- ------------ ------------- -------------
Net increase (decrease) in net assets
from policy-related transactions.. 4,025,010 11,888,899 10,482,504 75,623,836 59,630,372 (65,677,034)
----------- ----------- ----------- ------------ ------------- -------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... 184,108 (335,126) 13,307 1,075,796 (387,161) 46,036
----------- ----------- ----------- ------------ ------------- -------------
INCREASE (DECREASE) IN NET ASSETS ........ 3,901,667 16,264,444 14,042,025 89,338,235 69,337,212 (56,697,530)
NET ASSETS
BEGINNING OF PERIOD................... 74,972,672 58,708,229 44,666,204 255,090,142 185,752,930 242,450,460
----------- ----------- ----------- ------------ ------------- -------------
NET ASSETS
END OF PERIOD......................... $78,874,339 $74,972,673 $58,708,229 $344,428,377 $ 255,090,142 $ 185,752,930
=========== =========== =========== ============ ============= =============
<CAPTION>
FIXED INCOME OPTIONS:
-----------------------------------------
ALLIANCE QUALITY BOND
-----------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ 11,213,710 $ 9,211,102 $ 8,024,671
Net realized gain (loss).............. (623,206) 4,631,844 (504,580)
Change in unrealized appreciation
(depreciation) on investments..... (16,621,791) 971,979 4,357,540
------------ ------------ ------------
Net increase (decrease) in net assets
from operations................... (6,031,287) 14,814,925 11,877,631
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 19,416,861 14,952,560 8,423,097
Benefits and other policy-related
transactions (Note 3)............. (9,082,840) (5,388,113) (3,002,993)
Net transfers among funds and
guaranteed interest account....... 1,195,276 49,220,715 12,678,032
------------ ------------ ------------
Net increase (decrease) in net assets
from policy-related transactions.. 11,529,297 58,785,162 18,098,136
------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... (553,219) (402,883) 38,587
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ........ 4,944,791 73,197,204 30,014,354
NET ASSETS
BEGINNING OF PERIOD................... 228,959,641 155,762,437 125,748,083
------------ ------------ ------------
NET ASSETS
END OF PERIOD......................... $233,904,432 $228,959,641 $155,762,437
============ ============ ============
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
FIXED INCOME OPTIONS (CONCLUDED):
-----------------------------------------
ALLIANCE HIGH YIELD
----------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ 16,489,390 $ 17,442,641 $ 12,128,952
Net realized gain (loss).............. (15,030,554) 1,052,131 7,302,187
Change in unrealized appreciation
(depreciation) on investments..... (7,843,498) (29,521,690) 2,958,012
------------ ------------ ------------
Net increase (decrease) in net assets
from operations................... (6,384,662) (11,026,918) 22,389,151
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 30,001,760 36,502,728 26,933,221
Benefits and other policy-related
transactions (Note 3)............. (21,018,230) (20,288,710) (14,530,462)
Net transfers among funds and
guaranteed interest account....... (25,281,076) 2,677,159 26,385,799
------------ ------------ ------------
Net increase (decrease) in net assets
from policy-related transactions.. (16,297,546) 18,891,177 38,788,558
------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... 2,143,697 (832,263) 40,026
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS......... (20,538,511) 7,031,996 61,217,735
NET ASSETS
BEGINNING OF PERIOD................... 170,372,993 163,340,997 102,123,262
------------ ------------ ------------
NET ASSETS
END OF PERIOD......................... $149,834,482 $170,372,993 $163,340,997
============ ============ ============
<CAPTION>
EQUITY OPTIONS:
----------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK ALLIANCE EQUITY INDEX
---------------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997
-------------- -------------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ 1,037,574 $ 1,338,974 $ (767,599) $ 3,845,396 $ 2,095,841 $ 1,632,603
Net realized gain (loss).............. 719,015,346 522,943,560 218,655,522 27,204,757 5,588,532 435,940
Change in unrealized appreciation
(depreciation) on investments..... 13,099,046 122,078,195 272,798,112 92,088,291 73,609,890 41,607,202
-------------- -------------- -------------- ------------ ------------ ------------
Net increase (decrease) in net assets
from operations................... 733,151,966 646,360,729 490,686,035 123,138,444 81,294,263 43,675,745
-------------- -------------- -------------- ------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 361,261,385 322,874,015 282,279,826 123,310,198 82,390,480 53,262,239
Benefits and other policy-related
transactions (Note 3)............. (302,304,428) (250,079,870) (199,662,183) (60,880,027) (34,756,406) (18,975,147)
Net transfers among funds and
guaranteed interest account....... 49,877,173 24,136,275 56,849,823 222,120,321 74,806,928 67,867,827
-------------- -------------- -------------- ------------ ------------ ------------
Net increase (decrease) in net assets
from policy-related transactions.. 108,834,130 96,930,420 139,467,466 284,550,492 122,441,002 102,154,919
-------------- -------------- -------------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... (5,343,344) (2,780,348) 516,970 (1,148,745) (430,965) 54,423
-------------- -------------- -------------- ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS......... 836,642,752 740,510,801 630,670,471 406,540,191 203,304,300 145,885,087
NET ASSETS
BEGINNING OF PERIOD................... 2,943,226,440 2,202,715,639 1,572,045,168 443,764,345 240,460,045 94,574,958
-------------- -------------- -------------- ------------ ------------ ------------
NET ASSETS
END OF PERIOD......................... $3,779,869,192 $2,943,226,440 $2,202,715,639 $850,304,536 $443,764,345 $240,460,045
============== ============== ============== ============ ============ ============
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
---------------------------------------------------------------------------------
CAPITAL
EQ/ALLIANCE CAPITAL GUARDIAN
PREMIER GUARDIAN U.S.
ALLIANCE GROWTH & INCOME GROWTH (C) RESEARCH (D) EQUITY (D)
--------------------------------------- ----------- ------------ ----------
1999 1998 1997 1999 1999 1999
------------ ------------ ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ (518,361) $ (253,359) $ 277,338 $ (33,190) $ 71 $ 781
Net realized gain (loss).............. 21,586,560 19,436,864 5,536,668 190,495 2,837 1,959
Change in unrealized appreciation
(depreciation) on investments..... 10,929,728 3,218,908 7,947,265 5,068,707 11,093 17,325
------------ ------------ ----------- ----------- -------- --------
Net increase (decrease) in net assets
from operations................... 31,997,927 22,402,413 13,761,271 5,226,012 14,001 20,065
------------ ------------ ----------- ----------- -------- --------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 43,151,141 30,251,270 17,923,903 6,362,938 63,883 115,934
Benefits and other policy-related
transactions (Note 3)............. (19,321,951) (12,461,722) (6,498,823) (1,028,342) (503) (15,128)
Net transfers among funds and
guaranteed interest account....... 25,186,273 23,343,531 25,301,886 40,652,847 115,765 390,588
------------ ------------ ----------- ----------- -------- --------
Net increase (decrease) in net assets
from policy-related transactions.. 49,015,463 41,133,079 36,726,966 45,987,443 179,145 491,394
------------ ------------ ----------- ----------- -------- --------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... (144,843) (617,058) 19,921 3,902 209 378
------------ ------------ ----------- ----------- -------- --------
INCREASE (DECREASE) IN NET ASSETS......... 80,868,547 62,918,434 50,508,158 51,217,357 193,355 511,837
NET ASSETS
BEGINNING OF PERIOD................... 151,451,102 88,532,668 38,024,510 -- -- --
------------ ------------ ----------- ----------- -------- --------
NET ASSETS
END OF PERIOD......................... $232,319,649 $151,451,102 $88,532,668 $51,217,357 $193,355 $511,837
============ ============ =========== =========== ======== ========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
--------------------------------------
MERRILL LYNCH
BASIC VALUE EQUITY (A)
--------------------------------------
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................. $ 314,801 $ 126,014 $ 26,461
Net realized gain (loss).............. 2,389,365 874,115 40,394
Change in unrealized appreciation
(depreciation) on investments..... 1,362,581 (226,962) 135,003
----------- ----------- ----------
Net increase (decrease) in net assets
from operations................... 4,066,747 773,167 201,858
----------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................. 10,931,366 6,388,355 1,097,822
Benefits and other policy-related
transactions (Note 3)............. (3,171,744) (1,430,414) (135,034)
Net transfers among funds and
guaranteed interest account....... 7,845,599 8,794,685 4,661,128
----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions.. 15,605,221 13,752,626 5,623,916
----------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).......... (43,053) (1,392,853) 1,202,680
----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS......... 19,628,915 13,132,940 7,028,454
NET ASSETS
BEGINNING OF PERIOD................... 20,161,394 7,028,454 --
----------- ----------- ----------
NET ASSETS
END OF PERIOD......................... $39,790,309 $20,161,394 $7,028,454
=========== =========== ==========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
--------------------------------------------------------------
MFS
GROWTH
WITH
INCOME (C) MFS RESEARCH (A)
--------------- ----------------------------------------------
1999 1999 1998 1997
--------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income....................... $ 837 $ (155,808) $ (14,907) $ 7,315
Net realized gain (loss).................... (227) 2,081,454 494,412 88,145
Change in unrealized appreciation
(depreciation) on investments........... 20,637 6,720,924 3,063,681 249,382
-------- ----------- ---------- ----------
Net increase (decrease) in net assets
from operations......................... 21,247 8,646,570 3,543,186 344,842
-------- ----------- ---------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)....................... 44,806 12,506,780 6,795,257 1,177,137
Benefits and other policy-related
transactions (Note 3)................... (6,607) (4,808,292) (1,705,211) (162,042)
Net transfers among funds and
guaranteed interest account............. 326,238 4,280,012 12,108,388 6,389,251
-------- ----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions........ 364,437 11,978,500 17,198,434 7,404,346
-------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)................ 30,030 (9,698) (2,472,499) 2,003,671
-------- ----------- ------------ ----------
INCREASE (DECREASE) IN NET ASSETS............... 415,714 20,615,372 18,269,121 9,752,859
NET ASSETS
BEGINNING OF PERIOD......................... 0 28,021,980 9,752,859 0
-------- ----------- ----------- ----------
NET ASSETS
END OF PERIOD............................... $415,714 $48,637,352 $28,021,980 $9,752,859
======== =========== =========== ==========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
---------------------------------------------------
EQ/PUTNAM
GROWTH & INCOME VALUE (A)
---------------------------------------------------
1999 1998 1997
-------------- ------------- ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................ $ 168,536 $ 87,004 $ 23,618
Net realized gain (loss)..................... 1,775,493 339,445 28,304
Change in unrealized appreciation
(depreciation) on investments............ (2,633,398) 891,041 269,561
----------- ----------- ----------
Net increase (decrease) in net assets
from operations.......................... (689,369) 1,317,490 321,483
----------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................ 7,146,178 5,099,897 1,149,748
Benefits and other policy-related
transactions (Note 3).................... (2,808,209) (1,485,166) (154,351)
Net transfers among funds and
guaranteed interest account.............. 1,469,187 6,086,532 4,539,465
----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions......... 5,807,156 9,701,263 5,534,862
----------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)................. (67,263) (1,334,566) 1,202,723
----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS................ 5,050,524 9,684,187 7,059,068
NET ASSETS
BEGINNING OF PERIOD.......................... 16,743,255 7,059,068 0
----------- ----------- ----------
NET ASSETS
END OF PERIOD................................ $21,793,779 $16,743,255 $7,059,068
=========== =========== ==========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
-----------------------------------------------------
T. ROWE PRICE EQUITY INCOME (A)
-----------------------------------------------------
1999 1998 1997
------------- -------------- ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................ $ 726,104 $ 549,152 $ 115,907
Net realized gain (loss)..................... 2,737,736 1,272,326 110,474
Change in unrealized appreciation
(depreciation) on investments............ (2,538,268) 512,068 1,073,548
----------- ----------- -----------
Net increase (decrease) in net assets
from operations.......................... 925,572 2,333,546 1,299,929
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................ 14,411,461 11,367,975 2,540,460
Benefits and other policy-related
transactions (Note 3).................... (5,261,454) (4,190,748) (351,660)
Net transfers among funds and
guaranteed interest account.............. (470,263) 16,615,531 14,259,773
----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions......... 8,679,744 23,792,758 16,448,573
----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)................. (93,180) (1,149,701) 1,308,426
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS................ 9,512,136 24,632,603 19,056,928
NET ASSETS
BEGINNING OF PERIOD.......................... 43,689,531 19,056,928 0
----------- ----------- -----------
NET ASSETS
END OF PERIOD................................ $53,201,667 $43,689,531 $19,056,928
=========== =========== ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
--------------------------------------------------------
ALLIANCE GLOBAL
--------------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (2,877,020) $ 2,858,975 $ 5,997,760
Net realized gain (loss)............... 112,281,492 50,647,791 56,837,641
Change in unrealized appreciation
(depreciation) on investments...... 89,001,859 37,447,314 (12,504,865)
------------ ------------ ------------
Net increase (decrease) in net assets
from operations.................... 198,406,331 90,954,080 50,330,536
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 71,950,825 78,722,218 85,714,413
Benefits and other policy-related
transactions (Note 3).............. (63,170,211) (52,796,664) (48,793,564)
Net transfers among funds and
guaranteed interest account........ (8,015,060) (21,919,102) (89,131,113)
------------ ------------ ------------
Net increase (decrease) in net assets
from policy-related transactions... 765,554 4,006,452 (52,210,264)
------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... 23,216 (854,897) 103,777
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS.......... 199,195,101 94,105,635 (1,775,951)
NET ASSETS
BEGINNING OF PERIOD.................... 525,707,133 431,601,498 433,377,449
------------ ------------ ------------
NET ASSETS
END OF PERIOD.......................... $724,902,234 $525,707,133 $431,601,498
============= ============ ============
<CAPTION>
EQUITY OPTIONS (CONTINUED):
-------------------------------------------------------
MORGAN STANLEY
ALLIANCE INTERNATIONAL
-------------------------------------------------------
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (321,035) $ 707,847 $ 1,089,454
Net realized gain (loss)............... 2,464,521 (3,596,006) 2,267,768
Change in unrealized appreciation
(depreciation) on investments...... 19,788,723 8,296,285 (4,651,627)
----------- ----------- -----------
Net increase (decrease) in net assets
from operations.................... 21,932,209 5,408,126 (1,294,405)
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 11,367,096 13,567,993 14,198,839
Benefits and other policy-related
transactions (Note 3).............. (6,261,836) (5,406,284) (4,716,765)
Net transfers among funds and
guaranteed interest account........ (5,340,816) (4,357,456) (3,886,303)
----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions... (235,556) 3,804,253 5,595,771
----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... (49,840) (109,052) 11,328
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS.......... 21,646,813 9,103,327 4,312,694
NET ASSETS
BEGINNING OF PERIOD.................... 55,234,942 46,131,615 41,818,921
----------- ----------- -----------
END OF PERIOD.......................... $76,881,755 $55,234,942 $46,131,615
=========== =========== ===========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
-------------------------------------------------------
MORGAN STANLEY
EMERGING MARKETS EQUITY (B)
-------------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (66,405) $ 13,319 $ 13,761
Net realized gain (loss)............... 757,878 (637,290) (14,566)
Change in unrealized appreciation
(depreciation) on investments...... 13,987,219 (1,863,245) (1,079,388)
----------- ----------- ----------
Net increase (decrease) in net assets
from operations.................... 14,678,692 (2,487,216) (1,080,193)
----------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 4,138,455 2,442,975 323,739
Benefits and other policy-related
transactions (Note 3).............. (1,720,293) (488,932) (7,501)
Net transfers among funds and
guaranteed interest account........ 16,198,446 4,158,460 2,483,527
----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions... 18,616,608 6,112,503 2,799,765
----------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... (1,953,290) 2,496 4,001,184
----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS.......... 31,342,010 3,627,783 5,720,756
NET ASSETS
BEGINNING OF PERIOD.................... 9,348,539 5,720,756 0
----------- ----------- ----------
NET ASSETS
END OF PERIOD.......................... $40,690,549 $ 9,348,539 $5,720,756
=========== =========== ==========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONTINUED):
--------------------------------------------------------
T. ROWE PRICE INTERNATIONAL STOCK (A)
--------------------------------------------------------
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (8,104) $ 138,710 $ (23,939)
Net realized gain (loss)............... 5,209,876 354,819 (50,331)
Change in unrealized appreciation
(depreciation) on investments...... 7,742,298 2,423,801 (820,718)
----------- ----------- -----------
Net increase (decrease) in net assets
from operations.................... 12,944,070 2,917,330 (894,988)
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 10,327,110 7,881,587 2,268,440
Benefits and other policy-related
transactions (Note 3).............. (3,787,076) (2,527,577) (295,221)
Net transfers among funds and
guaranteed interest account........ 3,167,992 8,401,386 12,953,165
----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions... 9,708,026 13,755,396 14,926,384
----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... 1,577 (4,050,846) 4,007,078
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS.......... 22,653,673 12,621,880 18,038,474
NET ASSETS
BEGINNING OF PERIOD.................... 30,660,353 18,038,474 --
----------- ----------- -----------
NET ASSETS
END OF PERIOD.......................... $53,314,026 $30,660,353 $18,038,474
=========== =========== ===========
<CAPTION>
EQUITY OPTIONS (CONTINUED):
---------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK
---------------------------------------------------------
1999 1998 1997
------------- --------------- ---------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (2,318,415) $ (1,119,907) $ (3,987,514)
Net realized gain (loss)............... 33,754,225 6,840,149 107,947,093
Change in unrealized appreciation
(depreciation) on investments...... 132,094,676 (5,980,406) (13,921,615)
-------------- ------------- -------------
Net increase (decrease) in net assets
from operations.................... 163,530,486 (260,164) 90,037,964
-------------- ------------- -------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 145,241,493 172,792,283 179,662,167
Benefits and other policy-related
transactions (Note 3).............. (117,102,087) (115,442,947) (107,529,554)
Net transfers among funds and
guaranteed interest account........ (113,016,006) (43,660,488) 1,712,877
-------------- ------------- ------------
Net increase (decrease) in net assets
from policy-related transactions... (84,876,600) 13,688,848 73,845,490
-------------- ------------- ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... 2,197,124 (541,559) 223,792
-------------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS.......... 80,851,010 12,887,125 164,107,246
NET ASSETS
BEGINNING OF PERIOD.................... 971,194,053 958,306,928 794,199,683
-------------- ------------- ------------
NET ASSETS
END OF PERIOD.......................... $1,052,045,063 $971,194,053 $958,306,929
============== ============ ============
<CAPTION>
EQUITY OPTIONS (CONTINUED):
------------------------------------------------------
ALLIANCE SMALL CAP GROWTH (A)
------------------------------------------------------
1999 1998 1997
------------ ------------ -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (284,347) $ (211,223) $ (37,351)
Net realized gain (loss)............... 4,345,484 (7,585,521) (63,375)
Change in unrealized appreciation
(depreciation) on investments...... 15,295,322 8,009,143 771,812
----------- ----------- -----------
Net increase (decrease) in net assets
from operations.................... 19,356,459 212,399 671,086
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 16,092,219 14,863,783 2,947,848
Benefits and other policy-related
transactions (Note 3).............. (5,542,747) (3,897,615) (599,875)
Net transfers among funds and
guaranteed interest account........ (8,085,585) 15,043,596 19,670,856
----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions... 2,463,887 26,009,764 22,018,829
----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... (99,856) (1,460,161) 1,208,014
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS.......... 21,720,490 24,762,002 23,897,929
NET ASSETS
BEGINNING OF PERIOD.................... 48,659,931 23,897,929 --
----------- ----------- -----------
NET ASSETS
END OF PERIOD.......................... $70,380,421 $48,659,931 $23,897,929
=========== =========== ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
EQUITY OPTIONS (CONCLUDED):
------------------------------------------------------------------
EQ/ MFS EMERGING
EVERGREEN (C) GROWTH COMPANIES (A)
------------- --------------------------------------------------
1999 1999 1998 1997
------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ 81 $ (640,976) $ (156,515) $ 5,523
Net realized gain (loss)............... 20 17,547,129 4,270,964 458,032
Change in unrealized appreciation
(depreciation) on investments...... 1,450 70,081,784 6,824,857 171,320
------- ------------ ----------- -----------
Net increase (decrease) in net assets
from operations.................... 1,551 86,987,937 10,939,306 634,875
------- ------------ ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 6,341 32,825,036 11,533,783 1,598,358
Benefits and other policy-related
transactions (Note 3).............. (434) (13,737,378) (2,705,605) (294,924)
Net transfers among funds and
guaranteed interest account........ 21,204 76,182,753 25,975,152 8,886,415
------- ------------ ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions... 27,111 95,270,411 34,803,330 10,189,849
------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... 18 (72,131) (2,575,513) 2,004,977
------- ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS.......... 28,680 182,186,217 43,167,123 12,829,701
NET ASSETS
BEGINNING OF PERIOD.................... -- 55,996,824 12,829,701 --
------- ------------ ----------- -----------
NET ASSETS
END OF PERIOD.......................... $28,680 $238,183,041 $55,996,824 $12,829,701
======= ============ =========== ===========
<CAPTION>
EQUITY OPTIONS (CONCLUDED):
-------------------------------------------------
WARBURG PINCUS
SMALL COMPANY VALUE (A)
-------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (113,891) $ 3,173 $ (23,238)
Net realized gain (loss)............... (1,591,217) (142,969) 140,194
Change in unrealized appreciation
(depreciation) on investments...... 1,920,459 (3,986,631) (228,709)
----------- ----------- -----------
Net increase (decrease) in net assets
from operations.................... 215,351 (4,126,427) (111,753)
----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 11,009,658 13,378,658 4,397,634
Benefits and other policy-related
transactions (Note 3).............. (4,607,292) (4,042,103) (608,891)
Net transfers among funds and
guaranteed interest account........ (7,372,698) 7,112,708 20,737,304
----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions... (970,332) 16,449,263 24,526,047
----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... (23,731) (622,058) 611,853
----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS.......... (778,712) 11,700,778 25,026,147
NET ASSETS
BEGINNING OF PERIOD.................... 36,726,925 25,026,147 --
----------- ----------- -----------
NET ASSETS
END OF PERIOD.......................... $35,948,213 $36,726,925 $25,026,147
=========== =========== ===========
</TABLE>
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION OPTIONS:
----------------------------------------------------
ALLIANCE BALANCED
----------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income......................... $ 11,263,601 $ 9,701,879 $ 11,212,220
Net realized gain (loss)...................... 59,723,908 44,259,317 27,027,612
Change in unrealized appreciation
(depreciation) on investments............. 11,891,088 20,466,577 18,495,462
------------ ------------ ------------
Net increase (decrease) in net assets
from operations........................... 82,878,597 74,427,773 56,735,294
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)......................... 45,762,044 46,234,769 48,722,966
Benefits and other policy-related
transactions (Note 3)..................... (55,698,939) (48,368,610) (48,611,396)
Net transfers among funds and
guaranteed interest account............... (25,094,055) (4,765,223) (55,377,177)
------------ ------------ ------------
Net increase (decrease) in net assets
from policy related-transactions.......... (35,030,950) (6,899,064) (55,265,607)
------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4)............... 34,900 (601,644) 106,438
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS................. 47,882,547 66,927,065 1,576,125
NET ASSETS
BEGINNING OF PERIOD........................... 498,829,011 431,901,946 430,325,821
------------ ------------ ------------
NET ASSETS
END OF PERIOD................................. $546,711,558 $498,829,011 $431,901,946
============ ============ ============
<CAPTION>
ASSET ALLOCATION OPTIONS:
----------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS
----------------------------------------------------------
1999 1998 1997
------------ ------------ -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income......................... $ 5,922,184 $ 6,224,160 $ 6,151,782
Net realized gain (loss)...................... 11,053,201 12,201,904 6,305,200
Change in unrealized appreciation
(depreciation) on investments............. 2,080,409 5,279,818 8,528,010
------------ ------------ ------------
Net increase (decrease) in net assets
from operations........................... 19,055,794 23,705,882 20,984,992
------------ ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)......................... 27,333,794 26,438,125 30,425,833
Benefits and other policy-related
transactions (Note 3)..................... (25,964,810) (23,690,706) (24,998,155)
Net transfers among funds and
guaranteed interest account............... (4,292,515) (6,267,736) (18,978,233)
------------ ------------ ------------
Net increase (decrease) in net assets
from policy related-transactions.......... (2,923,531) (3,520,317) (13,550,555)
------------ ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4)............... (195,000) (365,872) 44,115
------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS................. 15,937,263 19,819,693 7,478,552
NET ASSETS
BEGINNING OF PERIOD........................... 202,163,700 182,344,007 174,865,455
------------ ------------ ------------
NET ASSETS
END OF PERIOD................................. $218,100,963 $202,163,700 $182,344,007
============= ============ ============
<CAPTION>
ASSET ALLOCATION OPTIONS:
----------------------------------------------------------
ALLIANCE GROWTH INVESTORS
----------------------------------------------------------
1999 1998 1997
-------------- ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income......................... $ 10,885,668 $ 13,057,134 $ 14,710,285
Net realized gain (loss)...................... 119,943,716 85,805,363 53,312,210
Change in unrealized appreciation
(depreciation) on investments............. 120,308,421 52,648,959 47,905,948
-------------- ------------ ------------
Net increase (decrease) in net assets
from operations........................... 251,137,805 151,511,456 115,928,443
-------------- ------------ ------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)......................... 118,892,312 128,264,748 139,280,509
Benefits and other policy-related
transactions (Note 3)..................... (114,804,492) (99,015,298) (95,656,635)
Net transfers among funds and
guaranteed interest account............... (15,949,611) (25,554,600) (35,207,298)
-------------- ------------ ------------
Net increase (decrease) in net assets
from policy related-transactions.......... (11,861,791) 3,694,850 8,416,576
-------------- ------------ ------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4)............... (471,570) (418,319) 194,270
-------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS................. 238,804,444 154,787,987 124,539,289
NET ASSETS
BEGINNING OF PERIOD........................... 978,087,905 823,299,918 698,760,629
-------------- ------------ ------------
NET ASSETS
END OF PERIOD................................. $1,216,892,349 $978,087,905 $823,299,918
============== ============ ============
</TABLE>
- ------------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
ASSET ALLOCATION OPTIONS (CONCLUDED):
---------------------------------------------------------------------
EQ/EVERGREEN
FOUNDATION (C) EQ/PUTNAM BALANCED
-------------- -------------------------------------------------
1999 1999 1998 1997
-------------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income................... $ 29 $ 2,956 $ 92,355 $ 243,727
Net realized gain (loss)................ 302 632,039 419,996 31,680
Change in unrealized appreciation
(depreciation) on investments....... (1,505) (752,142) (10,350) 270,232
------- ---------- ----------- ----------
Net increase (decrease) in net assets
from operations..................... (1,174) (117,147) 502,001 345,639
------- ---------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)................... 93 2,976,182 1,733,126 213,829
Benefits and oth`er policy-related
transactions (Note 3)............... (53) (738,901) (429,944) (60,092)
Net transfers among funds and
guaranteed interest account......... 2,377 381,163 2,537,998 1,458,185
------- ---------- ----------- ----------
Net increase (decrease) in net assets
from policy related-transactions.... 2,417 2,618,444 3,841,180 1,611,922
------- ---------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4)......... 1,605 (79,687) (2,292,055) 2,000,806
------- ---------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS........... 2,848 2,421,610 2,051,126 3,958,367
NET ASSETS
BEGINNING OF PERIOD..................... -- 6,009,493 3,958,367 --
------- ---------- ----------- ----------
NET ASSETS
END OF PERIOD........................... $ 2,848 $8,431,103 $ 6,009,493 $ 3,958,367
======= ========== =========== ===========
<CAPTION>
ASSET ALLOCATION OPTIONS (CONCLUDED):
-----------------------------------------------
MERRILL LYNCH
WORLD STRATEGY (A)
-----------------------------------------------
1999 1998 1997
------------- ---------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income...................... $ 22,881 $ 24,281 $ 14,446
Net realized gain (loss)................... 265,460 19,432 35,369
Change in unrealized appreciation
(depreciation) on investments.......... 665,736 225,660 (37,926)
---------- ---------- ----------
Net increase (decrease) in net assets
from operations........................ 954,077 269,373 11,889
---------- ---------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)...................... 1,304,821 1,050,984 334,133
Benefits and oth`er policy-related
transactions (Note 3).................. (511,416) (294,100) (41,646)
Net transfers among funds and
guaranteed interest account............ (504,202) 1,271,852 1,374,499
---------- ---------- ----------
Net increase (decrease) in net assets
from policy related-transactions....... 289,203 2,028,736 1,666,986
---------- ---------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4)............ (999,768) (849,043) 2,000,771
---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS.............. 243,512 1,449,066 3,679,646
NET ASSETS
BEGINNING OF PERIOD........................ 5,128,712 3,679,646 --
----------- ----------- ----------
NET ASSETS
END OF PERIOD.............................. $5,372,224 $5,128,712 $3,679,646
========== ========== ==========
</TABLE>
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. General
Equitable Life Separate Account FP (the "Account") is organized as a unit
investment trust, a type of investment company, and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940.
EQ Advisors Trust ("EQAT" or "Trust") commenced operations on May 1, 1997.
EQAT is an open-ended diversified management investment company that sells
shares to separate accounts of insurance companies. Each portfolio has
separate investment objectives.
For periods prior to October 18, 1999, the Alliance portfolios (other than
EQ/Alliance Premier Growth) were part of The Hudson River Trust ("HRT"). On
October 18, 1999, a Substitution of new portfolios of EQAT for the
portfolios of HRT was performed. At that time assets of each of the HRT
portfolios were transferred to the corresponding new portfolios of EQAT.
Class IA shares and Class IB shares of the HRT became Class IA shares and
Class IB shares of EQAT.
Prior to the Substitution, Alliance Capital Management L.P., an indirect,
majority-owned subsidiary of Equitable Life, was investment adviser for all
HRT portfolios. Post substitution, Alliance continues as investment adviser
for the Alliance portfolios (including EQ/Alliance Premier Growth).
Effective September 1999, Equitable Life serves as investment manager of
EQAT. As such, Equitable Life oversees the activities of the investment
advisers with respect to EQAT and is responsible for retaining or
discontinuing the services of those advisers. Prior to September 1999, AXA
Advisors, LLC (formerly EQ Financial Consultants, Inc.), a subsidiary of
Equitable Life, served as investment manager to EQAT.
AXA Advisors, LLC, and Equitable Distributors, Inc., earn fees from EQAT
under distribution agreements held with the Trust. Equitable Life also earns
fees under an investment management agreement with EQAT. Alliance earns fees
under an investment advisory agreement with Equitable Life.
The Account consists of thirty variable investment options:
FIXED INCOME OPTIONS:
Domestic Fixed Income:
o Alliance Intermediate Government Securities
o Alliance Money Market
o Alliance Quality Bond
Aggressive Fixed Income:
o Alliance High Yield
EQUITY OPTIONS:
Domestic Equity:
o Alliance Common Stock
o Alliance Equity Index
o Alliance Growth & Income
o EQ/Alliance Premier Growth
o Capital Guardian Research
o Capital Guardian U.S. Equity
o Merrill Lynch Basic Value Equity
o MFS Growth with Income
o MFS Research
o EQ/Putnam Growth & Income Value
o T. Rowe Price Equity Income
International Equity:
o Alliance Global
o Alliance International
o Morgan Stanley Emerging Markets Equity
o T. Rowe Price International Stock
Aggressive Equity:
o Alliance Aggressive Stock
o Alliance Small Cap Growth
o EQ/Evergreen
o MFS Emerging Growth Companies
o Warburg Pincus Small Company Value
ASSET ALLOCATION OPTIONS:
o Alliance Balanced
o Alliance Conservative Investors
o Alliance Growth Investors
o EQ/Evergreen Foundation
o EQ/Putnam Balanced
o Merrill Lynch World Strategy
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
1. General (Continued)
The assets in each fund are invested in Class IA shares or Class IB shares
of a corresponding mutual fund portfolio ("Portfolio") of EQAT. Class IA and
IB shares are offered by EQAT at net asset value. Both classes of shares are
subject to fees for investment management and advisory services and other
Trust expenses. Class IA shares are not subject to distribution fees imposed
pursuant to a distribution plan. Class IB shares are subject to distribution
fees imposed under a distribution plan (herein the "Rule 12b-1 Plans")
adopted in 1997 pursuant to Rule 12b-1 under the 1940 Act, as amended. The
Rule 12b-1 Plans provide that EQAT, on behalf of each Fund, may charge
annually up to 0.25% of the average daily net assets of a Fund attributable
to its Class IB shares in respect of activities primarily intended to result
in the sale of the Class IB shares. These fees are reflected in the net
asset value of the shares.
The Account supports the operations of Incentive Life, Incentive Life 2000,
Incentive Life Plus(SM), IL Protector(SM) and IL COLI, flexible premium
variable life insurance policies, Champion 2000, modified premium variable
whole life insurance policies; Survivorship 2000, Survivorship Incentive
Life, flexible premium joint survivorship variable life insurance policies;
and SP-Flex, variable life insurance policies with additional premium option
(collectively, the "Policies"). The Incentive Life 2000, Champion 2000 and
Survivorship 2000 policies are herein referred to as the "Series 2000
Policies." Incentive Life Plus(SM) policies offered with a prospectus dated
on or after September 15, 1995, are referred to as Incentive Life Plus(SM)
Second Series. Incentive Life Plus policies issued with a prior prospectus
are referred to as Incentive Life Plus Original Series. Incentive Life
policies sold during 1999 and thereafter ("Incentive Life sales 1999 and
after") reflect an investment in Class IB of the Alliance portfolios and are
different from Incentive Life products (see Note 6).
All Policies are issued by Equitable Life. The assets of the Account are the
property of Equitable Life. However, the portion of the Account's assets
attributable to the Policies will not be chargeable with liabilities arising
out of any other business Equitable Life may conduct.
Receivable/payable for policy-related transactions represent amount due
to/from General Account predominately related to premiums, surrenders and
death benefits.
Policyowners may allocate amounts in their individual accounts to the
variable investment options and/or (except for SP-Flex policies) to the
guaranteed interest account of Equitable Life's General Account. Net
transfers to (from) the guaranteed interest account of the General Account
and other Separate Accounts of $(140,321,294), $56,300,263, and $165,714,430
for the years ended 1999, 1998 and 1997, respectively, are included in Net
Transfers among variable investment options. The net assets of any variable
investment option may not be less than the aggregate of the policyowners'
accounts allocated to that variable investment option. Additional assets are
set aside in Equitable Life's General Account to provide for (1) the
unearned portion of the monthly charges for mortality costs, and (2) other
policy benefits, as required under the state insurance law.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Investments are made in shares of EQAT and are valued at the net asset
values per share of the respective Portfolios. The net asset value is
determined by EQAT using the market or fair value of the underlying assets
of the Portfolio less liabilities.
Investment transactions are recorded on the trade date. Dividend and capital
gains are declared and distributed by the Trust at the end of each year and
are automatically reinvested on the ex-dividend date. Realized gains and
losses include (1) gains and losses on redemptions of EQAT shares
(determined on the identified cost basis) and (2) Trust distributions
representing the net realized gains on Trust investment transactions.
The operations of the Account are included in the consolidated federal
income tax return of Equitable Life. Under the provisions of the Policies,
Equitable Life has the right to charge the Account for federal income tax
attributable to the Account. No charge is currently being made against the
Account for such tax since, under current tax law, Equitable Life pays no
tax on investment income and capital gains reflected in variable life
insurance policy reserves. However, Equitable Life retains the right to
charge for any federal income tax incurred which is attributable to the
Account if the law is changed. Charges for state and local taxes, if any,
attributable to the Account also may be made.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-25
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
3. Asset Charges
Under the Policies, Equitable Life assumes mortality and expense risks and,
to cover these risks, charges the daily net assets of the Account currently
at annual rates of:
<TABLE>
<CAPTION>
Mortality
and Expense Mortality Administrative Total
-------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
Incentive Life,
Incentive Life 2000,
Incentive Life Plus
Second Series,
Champion 2000 (a) .60% -- -- .60%
IL Plus Original
Series, IL COLI (b) .85% -- -- .85%
Survivorship
Incentive Life (a) .60% -- -- .60%
Survivorship 2000 (a) .90% -- -- .90%
IL Protector (a) .80% -- -- .80%
SP Flex (a) .85% .60% .35% 1.80%
</TABLE>
----------------------
(a) Charged to daily net assets of the Account.
(b) Charged to Policy Account and is included in Benefits and other
policy-related transactions in the Statement of Changes in Net
Assets.
Before amounts are remitted to the Account for Incentive Life, Incentive
Life Plus, IL COLI, Survivorship Incentive Life and the Series 2000
Policies, Equitable Life deducts a charge for taxes and either an initial
policy fee (Incentive Life) or a premium sales charge (Incentive Life Plus,
Survivorship Incentive Life, Incentive Life Sales 1999 and after, and Series
2000 Policies) from premiums. Under SP-Flex, the entire initial premium is
allocated to the Account. Before any additional premiums under SP-Flex are
allocated to the Account, however, an administrative charge is deducted.
The amounts attributable to Incentive Life, Incentive Life Plus, IL
Protector, IL COLI, and the Series 2000 policyowners' accounts are assessed
monthly by Equitable Life for mortality and administrative charges. These
charges are withdrawn from the Accounts along with amounts for additional
benefits. Under the Policies, amounts for certain policy-related
transactions (such as policy loans and surrenders) are transferred out of
the Separate Account.
Included in the Withdrawals and Administrative Charges line of the Statement
of Changes in Net Assets are certain administrative charges which are
deducted from the policyowners account value.
4. Amounts Retained by Equitable Life in Separate Account FP
The amount retained by Equitable Life (surplus) in the Account arises
principally from (1) contributions from Equitable Life, (2) mortality and
expense charges and administrative charges accumulated in the account, and
(3) that portion, determined ratably, of the Account's investment results
applicable to those assets in the Account in excess of the net assets for
the Policies. Amounts retained by Equitable Life are not subject to charges
for mortality and expense charges and administrative charges.
Amounts retained by Equitable Life in the Account may be transferred at any
time by Equitable Life to its General Account.
The following table shows the surplus contributions (withdrawals) by
Equitable Life by investment fund:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------
VARIABLE INVESTMENT OPTIONS 1999 1998 1997
--------------------------- ---- ---- ----
<S> <C> <C> <C>
FIXED INCOME OPTIONS:
Alliance Intermediate Government Securities $ (194,809) $ (685,662) $ --
Alliance Money Market (531,900) (1,591,380) --
Alliance Quality Bond (1,882,364) (1,509,018) --
Alliance High Yield 1,254,634 (1,839,368) --
</TABLE>
+ Formerly known as Equitable Variable Life Insurance Company Separate
Account FP.
FSA-26
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
4. Amounts Retained by Equitable Life in Separate Account FP (Continued)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------
VARIABLE INVESTMENT OPTIONS 1999 1998 1997
--------------------------- ---- ---- ----
<S> <C> <C> <C>
EQUITY OPTIONS:
Alliance Common Stock $(24,309,506) $(17,381,053) $ --
Alliance Equity Index (4,878,705) (2,293,340) --
Alliance Growth & Income (1,193,588) (1,285,852) --
EQ/Alliance Premier Growth (60,529) -- --
Capital Guardian Research -- -- --
Capital Guardian U.S. Equity -- -- --
Merrill Lynch Basic Value Equity (196,510) (1,459,281) 1,200,000
MFS Growth with Income 29,599 -- --
MFS Research (218,336) (2,558,541) 2,000,000
EQ/Putnam Growth & Income Value (177,637) (1,391,562) 1,200,000
T. Rowe Price Equity Income (365,303) (1,667,503) 1,300,000
Alliance Global (3,414,228) (3,632,595) --
Alliance International (370,877) (398,118) --
Morgan Stanley Emerging Markets Equity (2,019,694) (21,425) 4,000,000
T. Rowe Price International Stock (194,106) (4,170,518) 4,000,000
Alliance Aggressive Stock (3,284,577) (6,122,856) --
Alliance Small Cap Growth (384,204) (1,675,446) 1,200,000
EQ/Evergreen -- -- --
MFS Emerging Growth Companies (713,109) (2,732,997) 2,000,000
Warburg Pincus Small Company Value (204,730) (790,600) 600,000
ASSET ALLOCATION OPTIONS:
Alliance Balanced $(3,060,971) $(3,367,411) $ --
Alliance Conservative Investors (1,439,722) (1,502,507) --
Alliance Growth Investors (6,678,645) (5,613,223) --
EQ/Evergreen Foundation -- -- --
EQ/Putnam Balanced (119,105) (2,310,799) 2,000,000
Merrill Lynch World Strategy (1,018,674) (861,511) 2,000,000
</TABLE>
5. Distribution and Servicing Agreements
Equitable Life has entered into Distribution and Servicing Agreements with
AXA Advisors, LLC, an affiliate of Equitable Life, and EDI, whereby
registered representatives of AXA Advisors, LLC, authorized as variable life
insurance agents under applicable state insurance laws, sell the Policies.
The registered representatives are compensated on a commission basis by
Equitable Life.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-27
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
6. Investment Returns
The tables on the following pages show the gross and net investment returns
with respect to the variable investment options for the periods shown. The
net return for each variable investment option is based upon beginning and
ending net unit value for a policy and is not based on the average net
assets in the variable investment option during such period. Gross return is
equal to the total return earned by the underlying EQAT investment which is
after deduction of EQAT expense.
The Separate Account rates of return attributable to Incentive Life,
Survivorship Incentive Life, Incentive Life 2000, Incentive Life Plus Second
Series and Champion 2000 policyowners are different than those attributable
to Survivorship 2000, Incentive Life Plus Original Series, IL Protector, IL
COLI, and to SP-Flex policyowners because asset charges are deducted at
different rates under each policy (see Note 3). The Separate Account rates
of return attributable to Incentive Life Sales 1999 and after, Survivorship
Incentive Life and Survivorship 2000 for the Alliance Money Market, Alliance
Intermediate Government Securities, Alliance Quality Bond, Alliance High
Yield, Alliance Growth & Income, Alliance Equity Index, Alliance Common
Stock, Alliance Global, Alliance International, Alliance Aggressive,
Alliance Small Cap Growth, Alliance Conservative Investors, Alliance
Balanced, Alliance Growth Investors are different from other products in the
same variable investment option because distribution fees of 0.25% of the
average daily assets of the variable investment option are deducted (see
Note 1).
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-28
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE,
- ---------------
INCENTIVE LIFE 2000,
- --------------------
INCENTIVE LIFE PLUS SECOND SERIES
- ---------------------------------
AND CHAMPION 2000*
- -----------------
FIXED INCOME OPTIONS:
<TABLE>
<CAPTION>
APRIL 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
ALLIANCE INTERMEDIATE ------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES 1999 1998 1997 1996 1995 1994 1993 1992 1991
- --------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 0.02% 7.74% 7.29% 3.78% 13.33% (4.37)% 10.58% 5.60% 12.26%
Net return........................ (0.46)% 7.10% 6.65% 3.15% 12.65% (4.95)% 9.88% 4.96% 11.60%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ---------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 4.96% 5.34% 5.42% 5.33% 5.74% 4.02% 3.00% 3.56% 6.18% 8.24%
Net return........................ 4.35% 4.71% 4.79% 4.70% 5.11% 3.39% 2.35% 2.94% 5.55% 7.59%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------------------- -----------------
ALLIANCE QUALITY BOND 1999 1998 1997 1996 1995 1994 1993
- --------------------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... (2.00)% 8.69% 9.14% 5.36% 17.02% (5.10)% (0.51)%
Net return........................ (2.59)% 8.03% 8.49% 4.73% 16.32% (5.67)% (0.66)%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------ ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... (3.35)% (5.15)% 18.47% 22.89% 19.92% (2.79)% 23.15% 12.31% 24.46% (1.12)%
Net return........................ (3.93)% (5.72)% 17.76% 22.14% 19.20% (3.37)% 22.41% 11.64% 23.72% (1.71)%
</TABLE>
EQUITY OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ----------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 25.19% 29.39% 29.40% 24.28% 32.45% (2.14)% 24.84% 3.22% 37.88% (8.12)%
Net return........................ 24.44% 28.61% 28.44% 23.53% 31.66% (2.73)% 24.08% 2.60% 37.06% (8.67)%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30 (A)
YEARS ENDED DECEMBER 31, TO DECEMBER 31,
----------------------------------------------- -----------------
ALLIANCE EQUITY INDEX 1999 1998 1997 1996 1995 1994
- --------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return...................... 20.38% 28.07% 32.58% 22.39% 36.48% 1.08%
Net return........................ 19.66% 27.30% 31.77% 21.65% 35.66% 0.58%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------------------- -----------------
ALLIANCE GROWTH & INCOME 1999 1998 1997 1996 1995 1994 1993
- ------------------------ ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 18.66% 20.86% 26.90% 20.09% 24.07% (0.58)% (0.25)%
Net return........................ 17.95% 20.14% 25.99% 19.36% 23.33% (1.17)% (0.41)%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return and net return reflects
performance for the periods indicated, and are not annualized rates of
return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-29
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE,
- ---------------
INCENTIVE LIFE 2000,
- --------------------
INCENTIVE LIFE PLUS SECOND SERIES
- ---------------------------------
AND CHAMPION 2000*
- -----------------
EQUITY OPTIONS (CONTINUED):
JUNE 4 (C) TO
DECEMBER 31,
----------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return....................... 18.97%
Net return......................... 18.52%
AUGUST 30 (C) TO
DECEMBER 31,
----------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return....................... 7.10%
Net return......................... 6.67%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- ---------------------------- ----
Gross return...................... 3.76%
Net return........................ 3.32%
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MERRILL LYNCH BASIC VALUE EQUITY 1999 1998 1997
- -------------------------------- ---- ---- ----
Gross return...................... 19.00% 11.59% 16.99%
Net return........................ 18.23% 10.91% 16.55%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return...................... 8.76%
Net return........................ 8.06%
MAY 1 (A) to
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MFS RESEARCH 1999 1998 1997
- -------------- ---- ---- ----
Gross return...................... 23.12% 24.11% 16.07%
Net return........................ 22.38% 23.36% 15.59%
MAY 1 (A) to
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
EQ/PUTNAM GROWTH & INCOME VALUE 1999 1998 1997
- ------------------------------- ---- ---- ----
Gross return...................... (1.27)% 12.75% 16.23%
Net return........................ (1.95)% 12.14% 15.75%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return and net return reflects
performance for the periods indicated, and are not annualized rates of
return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-30
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE,
- ---------------
INCENTIVE LIFE 2000,
- --------------------
INCENTIVE LIFE PLUS SECOND SERIES
- ---------------------------------
AND CHAMPION 2000*
- -----------------
EQUITY OPTIONS (CONTINUED):
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
T. ROWE PRICE EQUITY INCOME 1999 1998 1997
- --------------------------- ---- ---- ----
Gross return...................... 3.54% 9.11% 22.11%
Net return........................ 2.93% 8.42% 21.64%
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- --------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 38.53% 21.80% 11.66% 14.60% 18.81% 5.23% 32.09% (0.50)% 30.55% (6.07)%
Net return........................ 37.70% 21.07% 10.88% 13.91% 18.11% 4.60% 31.33% (1.10)% 29.77% (6.63)%
</TABLE>
<TABLE>
<CAPTION>
APRIL 3 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------- -----------------
ALLIANCE INTERNATIONAL 1999 1998 1997 1996 1995
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return...................... 37.31% 10.57% (2.98)% 9.82% 11.29%
Net return........................ 36.96% 9.90% (3.63)% 9.15% 10.79%
</TABLE>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31 DECEMBER 31,
MORGAN STANLEY EMERGING ----------------------------- ---------------
MARKETS EQUITY 1999 1998 1997
- -------------- ---- ---- ----
Gross return...................... 95.82% (27.10)% (20.16)%
Net return........................ 94.57% (27.46)% (20.37)%
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
T. ROWE PRICE INTERNATIONAL
STOCK 1999 1998 1997
- --------------------------- ---- ---- ----
Gross return...................... 31.92% 13.68% (1.49)%
Net return........................ 31.08% 13.01% (1.90)%
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 18.84% 0.29% 10.94% 22.20% 31.63% (3.81)% 16.77% (3.16)% 86.86% 8.17%
Net return........................ 18.13% (0.31)% 10.14% 21.46% 30.85% (4.39)% 16.05% (3.74)% 85.75% 7.51%
</TABLE>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
ALLIANCE SMALL CAP GROWTH 1999 1998 1997
- ------------------------- ---- ---- ----
Gross return...................... 27.75% (4.28)% 26.74%
Net return........................ 27.14% (4.85)% 26.18%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-31
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE,
- ---------------
INCENTIVE LIFE 2000,
- --------------------
INCENTIVE LIFE PLUS SECOND SERIES
- ---------------------------------
AND CHAMPION 2000*
- -----------------
EQUITY OPTIONS (CONCLUDED):
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return...................... 9.70%
Net return........................ 9.06%
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MFS EMERGING GROWTH COMPANIES 1999 1998 1997
- ----------------------------- ---- ---- ----
Gross return...................... 73.62% 34.57% 22.42%
Net return........................ 72.63% 33.71% 21.95%
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
WARBURG PINCUS
SMALL COMPANY VALUE 1999 1998 1997
- ------------------- ---- ---- ----
Gross return...................... 1.80% (10.02)% 19.15%
Net return........................ 1.19% (10.55)% 18.65%
ASSET ALLOCATION OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
ALLIANCE BALANCED 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 17.79% 18.11% 15.06% 11.68% 19.75% (8.02)% 12.28% (2.84)% 41.26% 0.24 %
Net return........................ 17.09% 17.40% 14.30% 11.00% 19.03% (8.57)% 11.64% (3.42)% 40.42% (0.36)%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE
INVESTORS 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ----------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 10.14% 13.88% 13.25% 5.21% 20.40% (4.10)% 10.76% 5.72% 19.87% 6.37%
Net return........................ 9.48% 13.20% 12.55% 4.57% 19.68% (4.67)% 10.15% 5.09% 19.16% 5.73%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return...................... 26.58% 19.13% 16.87% 12.61% 26.37% (3.15)% 15.26% 4.90% 48.89% 10.66%
Net return........................ 25.82% 18.41% 16.07% 11.93% 25.62% (3.73)% 14.58% 4.27% 48.01% 10.00%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return..................... 7.38%
Net return....................... 6.72%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-32
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE,
- ---------------
INCENTIVE LIFE 2000,
- --------------------
INCENTIVE LIFE PLUS SECOND SERIES
- ---------------------------------
AND CHAMPION 2000*
- -----------------
ASSET ALLOCATION OPTIONS (CONCLUDED):
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
EQ/PUTNAM BALANCED 1999 1998 1997
- ------------------ ---- ---- ----
Gross return...................... 0.01% 11.92% 14.38%
Net return........................ (0.56)% 11.14% 14.02%
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MERRILL LYNCH WORLD STRATEGY 1999 1998 1997
- ---------------------------- ---- ---- ----
Gross return...................... 21.35% 6.81% 4.70%
Net return........................ 20.62% 6.18% 4.29%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-33
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE SALES 1999 AND AFTER
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ---------------------------
FIXED INCOME OPTIONS:
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 1999
- ---------------------- ----
Gross return...................... (0.23)%
Net return........................ 0.32%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE MONEY MARKET 1999
- --------------------- ----
Gross return...................... 4.71%
Net return........................ 4.10%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE QUALITY BOND 1999
- --------------------- ----
Gross return...................... (2.25)%
Net return........................ (0.95)%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE HIGH YIELD 1999
- ------------------ ----
Gross return...................... (3.58)%
Net return........................ (4.16)%
EQUITY OPTIONS:
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE COMMON STOCK 1999
- --------------------- ----
Gross return...................... 24.88%
Net return........................ 24.13%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE EQUITY INDEX 1999
- --------------------- ----
Gross return...................... 20.08%
Net return........................ 9.66%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE GROWTH & INCOME 1999
- ------------------------ ----
Gross return...................... 18.37%
Net return........................ 6.33%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-34
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE SALES 1999 AND AFTER,
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ---------------------------
EQUITY OPTIONS (CONTINUED):
JUNE 4 (C) TO
DECEMBER 31,
-----------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return...................... 18.97%
Net return........................ 18.52%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return...................... 7.10%
Net return........................ 6.67%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- ---------------------------- ----
Gross return...................... 3.76%
Net return........................ 3.32%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MERRILL LYNCH BASIC VALUE EQUITY 1999
- -------------------------------- ----
Gross return...................... 19.00%
Net return........................ 18.23%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return...................... 8.76%
Net return........................ 8.06%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MFS RESEARCH 1999
- ------------ ----
Gross return...................... 23.12%
Net return........................ 22.38%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/PUTNAM GROWTH & INCOME VALUE 1999
- ------------------------------- ----
Gross return...................... (1.27)%
Net return........................ (1.95)%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-35
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE SALES 1999 AND AFTER
- -----------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ---------------------------
EQUITY OPTIONS (CONTINUED):
JUNE 4 (B) TO
DECEMBER 31,
--------------
T. ROWE PRICE EQUITY INCOME 1999
- --------------------------- ----
Gross return........................... 3.54%
Net return............................. 2.93%
JUNE 4 (B) TO
DECEMBER 31,
--------------
ALLIANCE GLOBAL 1999
- --------------- ----
Gross return........................... 38.17%
Net return............................. 27.23%
JUNE 4 (B) TO
DECEMBER 31,
--------------
ALLIANCE INTERNATIONAL 1999
- --------------------- ----
Gross return........................... 36.90%
Net return............................. 34.41%
JUNE 4 (B) TO
DECEMBER 31,
--------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999
- -------------------------------------- ----
Gross return........................... 95.82%
Net return............................. 94.57%
JUNE 4 (B) TO
DECEMBER 31,
--------------
T. ROWE PRICE INTERNATIONAL STOCK 1999
- --------------------------------- ----
Gross return........................... 31.92%
Net return............................. 31.08%
JUNE 4 (B) TO
DECEMBER 31,
--------------
ALLIANCE AGGRESSIVE STOCK 1999
- ------------------------- ----
Gross return........................... 18.55%
Net return............................. 17.83%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-36
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE SALES 1999 AND AFTER,
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ---------------------------
EQUITY OPTIONS (CONCLUDED):
JUNE 4 (B) TO
DECEMBER 31,
--------------
ALLIANCE SMALL CAP GROWTH 1999
- ------------------------- ----
Gross return........................... 27.46%
Net return............................. 26.86%
JUNE 4 (B) TO
DECEMBER 31,
--------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return........................... 9.70%
Net return............................. 9.06%
JUNE 4 (B) TO
DECEMBER 31,
--------------
MFS EMERGING GROWTH COMPANIES 1999
- ----------------------------- ----
Gross return........................... 73.62%
Net return............................. 72.63%
JUNE 4 (B) TO
DECEMBER 31,
--------------
WARBURG PINCUS SMALL COMPANY VALUE 1999
- ---------------------------------- ----
Gross return........................... 1.80%
Net return............................. 1.19%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-37
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE SALES 1999 AND AFTER,
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ---------------------------
ASSET ALLOCATION OPTIONS:
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE BALANCED 1999
- ----------------- ----
Gross return...................... 17.50%
Net return........................ 10.98%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE CONSERVATIVE INVESTORS 1999
- ------------------------------- ----
Gross return...................... 9.87%
Net return........................ 5.79%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
ALLIANCE GROWTH INVESTORS 1999
- ------------------------- ----
Gross return...................... 26.27%
Net return........................ 15.36%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return...................... 7.38%
Net return........................ 6.72%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/PUTNAM BALANCED 1999
- -------------------- ----
Gross return...................... 0.01%
Net return........................ (0.56)%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MERRILL LYNCH WORLD STRATEGY 1999
- ---------------------------- ----
Gross return...................... 21.35%
Net return........................ 20.62%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-38
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
FIXED INCOME OPTIONS:
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- -----------------
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES 1999 1998 1997 1996 1995 1994 1993 1992
- ------------------------------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 0.02% 7.74% 7.29% 3.78% 13.33% (4.37)% 10.58% 0.90%
Net return.................................... (0.76)% 6.78% 6.33% 2.84% 12.31% (5.23)% 9.55% 0.56%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- -----------------
ALLIANCE MONEY MARKET 1999 1998 1997 1996 1995 1994 1993 1992
- --------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 4.96% 5.34% 5.42% 5.33% 5.74% 4.02% 3.00% 1.11%
Net return.................................... 4.04% 4.39% 4.47% 4.38% 4.80% 3.08% 2.04% 0.77%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------- -----------------
ALLIANCE QUALITY BOND 1999 1998 1997 1996 1995 1994 1993
- --------------------- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. (2.00)% 8.69% 9.14% 5.36% 17.02% (5.10)% (0.51)%
Net return.................................... (2.88)% 7.71% 8.16% 4.41% 15.97% (5.95)% (0.73)%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- ----------------
ALLIANCE HIGH YIELD 1999 1998 1997 1996 1995 1994 1993 1992
- ------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. (3.35)% (5.15)% 18.47% 22.89% 19.92% (2.79)% 23.15% 1.84%
Net return.................................... (4.22)% (6.00)% 17.40% 21.77% 18.84% (3.66)% 22.04% 1.50%
</TABLE>
EQUITY OPTIONS:
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- -----------------
ALLIANCE COMMON STOCK 1999 1998 1997 1996 1995 1994 1993 1992
- ---------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 25.19% 29.39% 29.40% 24.28% 32.45% (2.14)% 24.84% 5.28%
Net return.................................... 24.07% 28.22% 28.06% 23.15% 31.26% (3.02)% 23.70% 4.93%
</TABLE>
<TABLE>
<CAPTION>
MARCH 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------------ -----------------
ALLIANCE EQUITY INDEX 1999 1998 1997 1996 1995 1994
- -------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.................................. 20.38% 28.07% 32.58% 22.39% 36.48% 1.08%
Net return.................................... 19.30% 26.92% 31.38% 21.28% 35.26% 0.33%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------- -----------------
ALLIANCE GROWTH & INCOME 1999 1998 1997 1996 1995 1994 1993
- ------------------------ ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 18.66% 20.86% 26.90% 20.09% 24.07% (0.58)% (0.25)%
Net return.................................... 17.60% 19.78% 25.61% 19.00% 22.96% (1.47)% (0.48)%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-39
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
EQUITY OPTIONS (CONTINUED):
JUNE 4 (C) TO
DECEMBER 31,
-----------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return.................................. 18.97%
Net return.................................... 18.28%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return.................................. 7.10%
Net return.................................... 6.46%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- -------------------------- ----
Gross return.................................. 3.76%
Net return.................................... 3.11%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MERRILL LYNCH BASIC VALUE EQUITY 1999 1998 1997
- -------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 19.00% 11.59% 16.99%
Net return.................................... 17.87% 10.58% 16.32%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return.................................. 8.76%
Net return.................................... 7.74%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
MFS RESEARCH 1999 1998 1997
- ------------ ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 23.12% 24.11% 16.07%
Net return.................................... 22.01% 22.99% 15.36%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
EQ/PUTNAM GROWTH & INCOME VALUE 1999 1998 1997
- ------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. (1.27)% 12.75% 16.23%
Net return.................................... (2.25)% 11.81% 15.52%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ --------------
T. ROWE PRICE EQUITY INCOME FUND 1999 1998 1997
- -------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 3.54% 9.11% 22.11%
Net return.................................... 2.62% 8.09% 21.40%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-40
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
EQUITY OPTIONS (CONTINUED):
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------------- ----------------
ALLIANCE GLOBAL 1999 1998 1997 1996 1995 1994 1993 1992
- --------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return................................. 38.53% 21.80% 11.66% 14.60% 18.81% 5.23% 32.09% 4.87%
Net return................................... 37.28% 20.70% 10.54% 13.56% 17.75% 4.29% 30.93% 44.52%
</TABLE>
<TABLE>
<CAPTION>
APRIL 3 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
-------------------------------------------------- ----------------
ALLIANCE
INTERNATIONAL 1999 1998 1997 1996 1995
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return................................. 37.31% 10.57% (2.98)% 9.82% 11.29%
Net return................................... 36.55% 9.57% (3.93)% 8.82% 10.55%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------- ---------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999 1998 1997
- -------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 95.82% (27.10)% (20.16)%
Net return.................................... 93.98% (27.68)% (20.46)%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ ------------
T. ROWE PRICE INTERNATIONAL STOCK 1999 1998 1997
- --------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 31.92% 13.68% (1.49)%
Net return.................................... 30.68% 12.67% (2.10)%
</TABLE>
<TABLE>
<CAPTION>
MARCH 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- --------------
ALLIANCE AGGRESSIVE STOCK 1999 1998 1997 1996 1995 1994 1993 1992
- ------------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 18.84% 0.29% 10.94% 22.20% 31.63% (3.81)% 16.77% 11.49%
Net return.................................... 17.77% (0.62)% 9.81% 21.09% 30.46% (4.68)% 15.70% 11.11%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
ALLIANCE SMALL CAP GROWTH 1999 1998 1997
- ------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 27.75% (4.28)% 26.74%
Net return.................................... 26.76% (5.14)% 25.92%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
-----------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return.................................. 9.70%
Net return.................................... 8.73%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
MFS EMERGING GROWTH COMPANIES 1999 1998 1997
- ----------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 73.62% 34.57% 22.42%
Net return.................................... 72.11% 33.31% 21.70%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-41
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
EQUITY OPTIONS (CONCLUDED):
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
WARBURG PINCUS SMALL COMPANY VALUE 1999 1998 1997
- ---------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 1.80% (10.02)% 19.15%
Net return.................................... 0.88% (10.82)% 18.41%
</TABLE>
ASSET ALLOCATION OPTIONS:
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- ----------------
ALLIANCE BALANCED 1999 1998 1997 1996 1995 1994 1993 1992
- ----------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 17.79% 18.11% 15.06% 11.68% 19.75% (8.02)% 12.28% 5.37%
Net return.................................... 16.73% 17.05% 13.96% 10.67% 18.68% (8.84)% 11.30% 5.02%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- ----------------
ALLIANCE CONSERVATIVE INVESTORS 1999 1998 1997 1996 1995 1994 1993 1992
- ------------------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 10.14% 13.88% 13.25% 5.21% 20.40% (4.10)% 10.76% 1.38%
Net return.................................... 9.15% 12.85% 12.21% 4.26% 19.32% (4.96)% 9.81% 1.04%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 17 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- ----------------
ALLIANCE GROWTH INVESTORS 1999 1998 1997 1996 1995 1994 1993 1992
- ------------------------- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................................. 26.58% 19.13% 16.87% 12.61% 26.37% (3.15)% 15.26% 6.89%
Net return.................................... 25.44% 18.06% 15.72% 11.59% 25.24% (4.02)% 14.24% 6.53%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
----------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return.................................. 7.38%
Net return.................................... 6.14%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
EQ/PUTNAM BALANCED 1999 1998 1997
- ------------------ ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 0.01% 11.92% 14.38%
Net return.................................... (0.86)% 10.81% 13.79%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------ -------------
MERRILL LYNCH WORLD STRATEGY 1999 1998 1997
- ---------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.................................. 21.35% 6.81% 4.70%
Net return.................................... 20.25% 5.86% 4.08%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-42
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS ORIGINAL SERIES*(B)
- ---------------------------------------
FIXED INCOME OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
ALLIANCE INTERMEDIATE GOVERNMENT
SECURITIES 1999 1998 1997 1996 1995
- -------------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 0.02% 7.74% 7.29% 3.78% 13.31%
Net return ........................... 0.02% 7.74% 7.29% 3.78% 13.31%
ALLIANCE MONEY MARKET
- ----------------------
Gross return ......................... 4.96% 5.34% 5.42% 5.33% 5.69%
Net return ........................... 4.96% 5.34% 5.42% 5.33% 5.69%
ALLIANCE QUALITY BOND
- ---------------------
Gross return ......................... (2.00)% 8.69% 9.14% 5.36% 17.13%
Net return ........................... (2.00)% 8.69% 9.14% 5.36% 17.13%
ALLIANCE HIGH YIELD
- -------------------
Gross return ......................... (3.35)% (5.15)% 18.47% 22.89% 19.95%
Net return ........................... (3.35)% (5.15)% 18.47% 22.89% 19.95%
</TABLE>
EQUITY OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 1999 1998 1997 1996 1995
- --------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 25.19% 29.39% 29.40% 24.28% 33.07%
Net return ........................... 25.19% 29.39% 29.40% 24.28% 33.07%
ALLIANCE EQUITY INDEX
- ---------------------
Gross return ......................... 20.38% 28.07% 32.57% 22.38% 36.53%
Net return ........................... 20.38% 28.07% 32.57% 22.38% 36.53%
ALLIANCE GROWTH & INCOME
- ------------------------
Gross return ......................... 18.66% 20.86% 26.90% 20.09% 24.38%
Net return ........................... 18.66% 20.86% 26.90% 20.09% 24.38%
</TABLE>
JUNE 4 (C) TO
DECEMBER 31,
------------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return ......................... 18.97%
Net return ........................... 19.55%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life Plus Original Series commenced on January 6, 1995.
Date as of which net premiums under the policies were first allocated to the
variable investment option. The returns for the periods indicated are not
annual rates of return. There are no Separate Account asset charges for this
policy and therefore the gross and net rates of return are the same. The
rate of return for the year ended December 31, 1995 indicated is not an
annualized rate of return.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-43
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS ORIGINAL SERIES*(B)
- ---------------------------------------
EQUITY OPTIONS (CONTINUED):
AUGUST 30 (C) TO
DECEMBER 31,
------------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return ......................... 7.10%
Net return ........................... 8.04%
CAPITAL GUARDIAN U.S. EQUITY
- ----------------------------
Gross return ......................... 3.76%
Net return ........................... 3.56%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MERRILL LYNCH BASIC VALUE EQUITY 1999 1998 1997
- -------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 19.00% 11.59% 17.02%
Net return ........................... 19.00% 11.59% 17.02%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
------------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return ......................... 8.76%
Net return ........................... 3.50%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MFS RESEARCH 1999 1998 1997
- ------------ ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 23.12% 24.11% 16.05%
Net return ........................... 23.12% 24.11% 16.05%
EQ/PUTNAM GROWTH & INCOME VALUE
- -------------------------------
Gross return ......................... (1.27)% 12.75% 14.48%
Net return ........................... (1.27)% 12.75% 14.48%
T. ROWE PRICE EQUITY INCOME
- ---------------------------
Gross return ......................... 3.54% 9.11% 22.13%
Net return ........................... 3.54% 9.11% 22.13%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life Plus Original Series commenced on January 6, 1995.
Date as of which net premiums under the policies were first allocated to the
variable investment option. The returns for the periods indicated are not
annual rates of return. There are no Separate Account asset charges for this
policy and therefore the gross and net rates of return are the same. The
rate of return for the year ended December 31, 1995 indicated is not an
annualized rate of return.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-44
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS ORIGINAL SERIES*(B)
- ---------------------------------------
EQUITY OPTIONS (CONTINUED):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
ALLIANCE GLOBAL 1999 1998 1997 1996 1995
- --------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 38.53% 21.80% 11.66% 14.60% 19.38%
Net return ........................... 38.53% 21.80% 11.66% 14.60% 19.38%
</TABLE>
<TABLE>
<CAPTION>
APRIL 30 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
--------------------------------------------------- --------------------------------
ALLIANCE INTERNATIONAL 1999 1998 1997 1996 1995
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 37.31% 10.57% (3.05)% 9.81% 11.29%
Net return ........................... 37.31% 10.57% (3.05)% 9.81% 11.29%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 20 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ----------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999 1998 1997
- -------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 95.82% (27.10)% (20.19)%
Net return ........................... 95.82% (27.10)% (20.19)%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
T. ROWE PRICE INTERNATIONAL STOCK 1999 1998 1997
- --------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 31.92% 13.68% (1.50)%
Net return ........................... 31.92% 13.68% (1.50)%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life Plus Original Series commenced on January 6, 1995.
Date as of which net premiums under the policies were first allocated to the
variable investment option. The returns for the periods indicated are not
annual rates of return. There are no separate account asset charges for this
policy and therefore the gross and net rates of return are the same. The
rate of return for the year ended December 31, 1998 indicated is not an
annualized rate of return.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-45
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS ORIGINAL SERIES*(B)
- ---------------------------------------
EQUITY OPTIONS (CONCLUDED):
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK 1999 1998 1997 1996 1995
- ------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 18.84% 0.29% 10.94% 22.20% 33.00%
Net return ........................... 18.84% 0.29% 10.94% 22.20% 33.00%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 20 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ----------------
ALLIANCE SMALL CAP GROWTH 1999 1998 1997
- ------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 27.75% (4.28)% 26.69%
Net return ........................... 27.75% (4.28)% 26.69%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
------------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return ......................... 9.70%
Net return ........................... 7.10%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MFS EMERGING GROWTH COMPANIES 1999 1998 1997
- ----------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 73.62% 34.57% 22.44%
Net return ........................... 73.62% 34.57% 22.44%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
WARBURG PINCUS SMALL COMPANY VALUE 1999 1998 1997
- ---------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 1.80% (10.02)% 19.13%
Net return ........................... 1.80% (10.02)% 19.13%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life Plus Original Series commenced on January 6, 1995.
Date as of which net premiums under the policies were first allocated to the
variable investment option. The returns for the periods indicated are not
annual rates of return. There are no separate account asset charges for this
policy and therefore the gross and net rates of return are the same. The
rate of return for the year ended December 31, 1998 indicated is not an
annualized rate of return.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-46
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS ORIGINAL SERIES*(B)
- ---------------------------------------
ASSET ALLOCATION OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
ALLIANCE BALANCED 1999 1998 1997 1996 1995
- ----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return ......................... 17.79% 18.11% 15.06% 11.68% 20.32%
Net return ........................... 17.79% 18.11% 15.06% 11.68% 20.32%
ALLIANCE CONSERVATIVE INVESTORS
- -------------------------------
Gross return ......................... 10.14% 13.88% 13.25% 5.21% 20.59%
Net return ........................... 10.14% 13.88% 13.25% 5.21% 20.59%
ALLIANCE GROWTH INVESTORS
- -------------------------
Gross return ......................... 26.58% 19.13% 16.87%% 12.61% 26.92%
Net return ........................... 27.58% 19.13% 16.87%% 12.61% 26.92%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
------------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return ......................... 7.38%
Net return ........................... 6.97%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- --------------
EQ/PUTNAM BALANCED 1999 1998 1997
- ------------------ ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 0.01% 11.92% 14.48%
Net return ........................... 0.01% 11.92% 14.48%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MERRILL LYNCH WORLD STRATEGY 1999 1998 1997
- ---------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 21.35% 6.81% 4.71%
Net return ........................... 21.35% 6.81% 4.71%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life Plus Original Series commenced on January 6, 1995.
Date as of which net premiums under the policies were first allocated to the
variable investment option. The returns for the periods indicated are not
annual rates of return. There are no separate account asset charges for this
policy and therefore the gross and net rates of return are the same. The
rate of return for the year ended December 31, 1998 indicated is not an
annualized rate of return.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-47
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
IL PROTECTOR*
- -------------
FIXED INCOME OPTIONS:
<TABLE>
<CAPTION>
AUGUST 5 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------- ---------------------------
ALLIANCE INTERMEDIATE
GOVERNMENT SECURITIES 1999 1998 1997 1996
- --------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross return ......................... 0.02% 7.74% 7.29% 3.78%
Net return ........................... (0.66)% 6.88% 6.43% 4.49%
ALLIANCE MONEY MARKET
- ---------------------
Gross return ......................... 4.96% 5.34% 5.42% 5.33%
Net return ........................... 4.14% 4.50% 4.57% 2.98%
ALLIANCE QUALITY BOND
- ---------------------
Gross return ......................... (2.00)% 8.69% 9.14% 5.36%
Net return ........................... (2.78)% 7.82% 8.27% 7.86%
ALLIANCE HIGH YIELD
- -------------------
Gross return ......................... (3.35)% (5.15)% 18.47% 22.89%
Net return ........................... (4.13)% (5.91)% 17.52% 13.90%
</TABLE>
EQUITY OPTIONS:
<TABLE>
<CAPTION>
AUGUST 5 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------- ---------------------------
ALLIANCE COMMON STOCK 1999 1998 1997 1996
- --------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross return ......................... 25.19% 29.39% 29.40% 24.28%
Net return ........................... 24.19% 28.35% 28.18% 17.44%
ALLIANCE EQUITY INDEX
- ---------------------
Gross return ......................... 20.38% 28.07% 32.58% 22.39%
Net return ........................... 19.42% 27.05% 31.51% 16.25%
ALLIANCE GROWTH AND INCOME
- --------------------------
Gross return ......................... 18.66% 20.86% 26.90% 20.09%
Net return ........................... 17.71% 19.90% 25.74% 15.63%
</TABLE>
JUNE 4 (C) TO
DECEMBER 31,
-------------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return ......................... 18.97%
Net return ........................... 18.36%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-48
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
IL PROTECTOR*
- -------------
EQUITY OPTIONS (CONTINUED):
AUGUST 30 (C) TO
DECEMBER 31,
-------------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return ......................... 7.10%
Net return ........................... 6.53%
AUGUST 30 (C) TO
DECEMBER 31,
-------------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- ---------------------------- ----
Gross return ......................... 3.76%
Net return ........................... 3.28%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- -----------------
MERRILL LYNCH BASIC VALUE EQUITY 1999 1998 1997
- -------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return ......................... 19.00% 11.59% 16.99%
Net return ........................... 17.99% 10.69% 16.40%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
-------------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return ......................... 8.76%
Net return ........................... 7.85%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MFS RESEARCH 1999 1998 1997
- ------------ ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 23.12% 24.11% 16.07%
Net return............................ 22.13% 23.11% 15.43%
EQ/PUTNAM GROWTH & INCOME VALUE
- ---------------------------------
Gross return.......................... (1.27)% 12.75% 16.23%
Net return............................ (2.15)% 11.92% 13.87%
T. ROWE PRICE EQUITY INCOME
- ---------------------------
Gross return.......................... 3.54% 9.11% 22.11%
Net return............................ 2.73% 8.20% 21.48%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-49
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
IL PROTECTOR*
- -------------
EQUITY OPTIONS (CONTINUED):
<TABLE>
<CAPTION>
AUGUST 5 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------- ----------------
ALLIANCE GLOBAL 1999 1998 1997 1996
- --------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross return ......................... 38.53% 21.80% 11.66% 14.60%
Net return ........................... 37.42% 20.83% 10.65% 6.78%
ALLIANCE INTERNATIONAL
- ----------------------
Gross return ......................... 37.31% 10.57% (2.98)% 9.82%
Net return ........................... 36.68% 9.68% (3.83)% 2.11%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999 1998 1997
- -------------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 95.82% (27.10)% (20.16)%
Net return............................ 94.18% (27.60)% (20.43)%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
T. ROWE PRICE INTERNATIONAL STOCK 1999 1998 1997
- --------------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 31.92% 13.68% (1.49)%
Net return............................ 30.81% 12.79% (2.03)%
</TABLE>
<TABLE>
<CAPTION>
AUGUST 5 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------------------------- ---------------
ALLIANCE AGGRESSIVE STOCK 1999 1998 1997 1996
- ------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross return ......................... 18.84% 0.29% 10.94% 22.20%
Net return ........................... 17.89% (0.52)% 9.92% 6.22%
</TABLE>
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
ALLIANCE SMALL CAP GROWTH 1999 1998 1997
- ------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 27.75% (4.28)% 26.74%
Net return............................ 26.89% (5.04)% 26.01%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
------------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return.......................... 9.70%
Net return............................ 6.81%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-50
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
IL PROTECTOR*
- -------------
EQUITY OPTIONS: (CONCLUDED):
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
MFS EMERGING GROWTH COMPANIES 1999 1998 1997
- ----------------------------- ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 73.62% 34.57% 22.42%
Net return............................ 72.28% 33.44% 21.78%
WARBURG PINCUS SMALL COMPANY VALUE
- -----------------------------------
Gross return.......................... 1.80% (10.02)% 19.15%
Net return............................ 0.99% (10.73)% 18.49%
</TABLE>
ASSET ALLOCATION OPTIONS:
<TABLE>
<CAPTION>
AUGUST 5 (A)
TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
------------------------------------------------------- ---------------
ALLIANCE BALANCED 1999 1998 1997 1996
- ----------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross return ......................... 17.79% 18.11% 15.06% 11.68%
Net return ........................... 16.85% 17.17% 14.07% 8.67%
ALLIANCE CONSERVATIVE INVESTORS
- -------------------------------
Gross return ......................... 10.14% 13.88% 13.25% 5.21%
Net return ........................... 9.26% 12.97% 12.32% 7.94%
ALLIANCE GROWTH INVESTORS
- -------------------------
Gross return ......................... 26.58% 19.13% 16.87% 12.61%
Net return ........................... 25.57% 18.18% 15.84% 9.38%
</TABLE>
JUNE 4 (B) TO
DECEMBER 31,
-------------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return.......................... 7.38%
Net return............................ 9.83%
<TABLE>
<CAPTION>
MAY 1 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
----------------------------------- ---------------
EQ/PUTNAM BALANCED 1999 1998 1997
- ------------------ ---- ---- ----
<S> <C> <C> <C>
Gross return.......................... 0.01% 11.92% 14.38%
Net return............................ (0.76)% 10.92% 13.87%
MERRILL LYNCH WORLD STRATEGY
- ----------------------------
Gross return.......................... 21.35% 6.81% 4.70%
Net return............................ 20.37% 5.97% 4.15%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-51
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SP-FLEX
- -------
FIXED INCOME OPTIONS:
<TABLE>
<CAPTION>
APRIL 1 (A) TO
ALLIANCE INTERMEDIATE YEARS ENDED DECEMBER 31, DECEMBER 31,
GOVERNMENT --------------------------------------------------------------------------- -------------------
SECURITIES 1999 1998 1997 1996 1995 1994 1993 1992 1991
- ---------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 0.02% 7.74% 7.29% 3.78% 13.33% (4.37)% 10.58% 5.60% 12.10%
Net return................ (1.65)% 5.82% 5.38% 1.91% 11.31% (6.08)% 8.57% 3.71% 10.59%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- --------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 4.96% 5.34% 5.42% 5.33% 5.74% 4.02% 3.00% 3.56% 6.17% 8.24%
Net return................ 3.11% 3.46% 3.54% 3.44% 3.86% 2.17% 1.13% 1.71% 4.29% 6.30%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1 (A) TO
YEARS ENDED DECEMBER 31 DECEMBER 31,
--------------------------------------------------------------------------- -------------------
ALLIANCE QUALITY BOND 1999 1998 1997 1996 1995 1994
- --------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.............. (2.00)% 8.69% 9.14% 5.36% 17.02% (2.20)%
Net return................ (3.75)% 6.75% 7.19% 3.47% 14.94% (2.35)%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE HIGH YIELD 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. (3.35)% (5.15)% 18.47% 22.89% 19.92% (2.79)% 23.15% 12.31% 24.46% (1.12)%
Net return................ (5.08)% (6.84)% 16.35% 20.68% 17.79% (4.52)% 20.96% 10.30% 22.25% (2.89)%
</TABLE>
EQUITY OPTIONS:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- --------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 25.19% 29.39% 29.40% 24.28% 32.45% (2.14)% 24.84% 3.23% 37.87% (8.12)%
Net return................ 22.96% 27.08% 26.91% 22.04% 30.10% (3.88)% 22.60% 1.38% 35.43% (9.76)%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1 (A) TO
YEARS ENDED DECEMBER 31 DECEMBER 31,
--------------------------------------------------------------------------- -------------------
ALLIANCE EQUITY INDEX 1999 1998 1997 1996 1995 1994
- --------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.............. 20.38% 28.07% 32.58% 22.39% 36.48% (2.54)%
Net return................ 18.24% 25.79% 30.21% 20.19% 34.06% (2.69)%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1 (A) TO
YEARS ENDED DECEMBER 31 DECEMBER 31,
--------------------------------------------------------------------------- -------------------
ALLIANCE GROWTH & INCOME 1999 1998 1997 1996 1995 1994
- ------------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.............. 18.66% 20.86% 26.90% 20.09% 24.07% (3.40)%
Net return................ 16.55% 18.71% 24.50% 17.93% 21.87% (3.55)%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE GLOBAL 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- --------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 38.53% 21.80% 11.66% 14.60% 18.81% 5.23% 32.09% (0.50)% 30.55% (6.07)%
Net return................ 36.06% 19.63% 9.56% 12.54% 16.70% 3.36% 29.77% (2.28)% 28.23% (7.75)%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
FSA-52
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1999
RATES OF RETURN (CONCLUDED):
SP-FLEX
- -------
EQUITY OPTIONS (CONCLUDED):
<TABLE>
<CAPTION>
APRIL 3 (A) TO
YEARS ENDED DECEMBER 31, DECEMBER 31,
---------------------------------------------------------------- ----------------
ALLIANCE INTERNATIONAL 1999 1998 1997 1996 1995
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross return.............. 37.31% 10.57% (3.05)% 9.82% 11.29%
Net return................ 35.33% 8.60% (4.78)% 7.84% 9.82%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.............. 18.84% 0.29% 10.94% 22.20% 31.63% (3.81)% 16.77% (3.16)% 86.86% 8.17%
Net return................ 16.72% (1.50)% 8.83% 20.00% 29.30% (5.53)% 14.67% (4.89)% 83.54% 6.23%
</TABLE>
ASSET ALLOCATION SERIES:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
ALLIANCE BALANCED 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
- ----------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gross return.................. 17.79% 18.11% 15.06% 11.68% 19.75% (8.02)% 12.28% (2.83)% 41.27% 0.24 %
Net return.................... 15.69% 16.01% 12.94% 9.67% 17.62% (9.66)% 10.31% (4.57)% 38.75% (1.56)%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1 (A) TO
ALLIANCE YEARS ENDED DECEMBER 31 DECEMBER 31,
CONSERVATIVE --------------------------------------------------------------------------- -------------------
INVESTORS 1999 1998 1997 1996 1995 1994
- --------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.................. 10.14% 13.88% 13.25% 5.21% 20.40% (1.83)%
Net return.................... 8.18% 11.85% 11.21% 3.32% 18.26% (1.98)%
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 1 (A) TO
YEARS ENDED DECEMBER 31 DECEMBER 31,
--------------------------------------------------------------------------- -------------------
ALLIANCE GROWTH INVESTORS 1999 1998 1997 1996 1995 1994
- ------------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Gross return.................. 26.58% 19.13% 16.87% 12.61% 26.37% (3.16)%
Net return.................... 24.33% 17.00% 14.69% 10.58% 24.12% (3.31)%
</TABLE>
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to the
Fund. The gross return and the net return for the periods indicated are not
annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to the
variable investment option. The gross return reflects performance from the
Portfolio's commencement date of April 30, 1999 and are not annualized rates
of return. The net return reflects performance for the periods indicated.
- ------------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company Separate Account
FP.
FSA-53
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and comprehensive
income and of cash flows present fairly, in all material respects, the financial
position of The Equitable Life Assurance Society of the United States and its
subsidiaries ("Equitable Life") at December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of Equitable Life's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- --------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,599.7 $ 18,993.7
Held to maturity, at amortized cost..................................... 133.2 125.0
Mortgage loans on real estate............................................. 3,270.0 2,809.9
Equity real estate........................................................ 1,160.2 1,676.9
Policy loans.............................................................. 2,257.3 2,086.7
Other equity investments.................................................. 671.2 713.3
Investment in and loans to affiliates..................................... 1,201.8 928.5
Other invested assets..................................................... 911.6 808.2
------------- -------------
Total investments..................................................... 28,205.0 28,142.2
Cash and cash equivalents................................................... 628.0 1,245.5
Deferred policy acquisition costs........................................... 4,033.0 3,563.8
Other assets................................................................ 3,868.3 3,054.6
Closed Block assets......................................................... 8,607.3 8,632.4
Separate Accounts assets.................................................... 54,453.9 43,302.3
------------- -------------
TOTAL ASSETS................................................................ $ 99,795.5 $ 87,940.8
============= =============
LIABILITIES
Policyholders' account balances............................................. $ 21,351.4 $ 20,857.5
Future policy benefits and other policyholders' liabilities................. 4,777.6 4,726.4
Short-term and long-term debt............................................... 1,407.9 1,181.7
Other liabilities........................................................... 3,133.6 3,474.3
Closed Block liabilities.................................................... 9,025.0 9,077.0
Separate Accounts liabilities............................................... 54,332.5 43,211.3
------------- -------------
Total liabilities..................................................... 94,028.0 82,528.2
------------- -------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 3,557.2 3,110.2
Retained earnings........................................................... 2,600.7 1,944.1
Accumulated other comprehensive (loss) income............................... (392.9) 355.8
------------- -------------
Total shareholder's equity............................................ 5,767.5 5,412.6
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 99,795.5 $ 87,940.8
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,257.5 $ 1,056.2 $ 950.6
Premiums...................................................... 558.2 588.1 601.5
Net investment income......................................... 2,240.9 2,228.1 2,282.8
Investment (losses) gains, net................................ (96.9) 100.2 (45.2)
Commissions, fees and other income............................ 2,177.9 1,503.0 1,227.2
Contribution from the Closed Block............................ 86.4 87.1 102.5
------------ ------------- -------------
Total revenues.......................................... 6,224.0 5,562.7 5,119.4
------------ ------------- -------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,078.2 1,153.0 1,266.2
Policyholders' benefits....................................... 1,038.6 1,024.7 978.6
Other operating costs and expenses............................ 2,797.3 2,201.2 2,203.9
------------ ------------- -------------
Total benefits and other deductions..................... 4,914.1 4,378.9 4,448.7
------------ ------------- -------------
Earnings from continuing operations before Federal
income taxes and minority interest.......................... 1,309.9 1,183.8 670.7
Federal income taxes.......................................... 332.0 353.1 91.5
Minority interest in net income of consolidated subsidiaries.. 199.4 125.2 54.8
------------ ------------- -------------
Earnings from continuing operations........................... 778.5 705.5 524.4
Discontinued operations, net of Federal income taxes.......... 28.1 2.7 (87.2)
------------ ------------- -------------
Net Earnings.................................................. $ 806.6 $ 708.2 $ 437.2
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
------------ ------------- -------------
Capital in excess of par value, beginning of year............. 3,110.2 3,105.8 3,105.8
Additional capital in excess of par value..................... 447.0 4.4 -
------------ ------------- -------------
Capital in excess of par value, end of year................... 3,557.2 3,110.2 3,105.8
------------ ------------- -------------
Retained earnings, beginning of year.......................... 1,944.1 1,235.9 798.7
Net earnings.................................................. 806.6 708.2 437.2
Dividend paid to the Holding Company.......................... (150.0) - -
------------ ------------- -------------
Retained earnings, end of year................................ 2,600.7 1,944.1 1,235.9
------------ ------------- -------------
Accumulated other comprehensive income,
beginning of year........................................... 355.8 516.3 177.0
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
Accumulated other comprehensive (loss) income, end of year.... (392.9) 355.8 516.3
------------ ------------- -------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 5,767.5 $ 5,412.6 $ 4,860.5
============ ============= ============
COMPREHENSIVE INCOME
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
------------ ------------- -------------
Change in unrealized (losses) gains, net of reclassification
adjustment.................................................. (776.9) (149.5) 343.7
Minimum pension liability adjustment.......................... 28.2 (11.0) (4.4)
------------ ------------- -------------
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
COMPREHENSIVE INCOME.......................................... $ 57.9 $ 547.7 $ 776.5
============ ============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,078.2 1,153.0 1,266.2
Universal life and investment-type product
policy fee income......................................... (1,257.5) (1,056.2) (950.6)
Investment losses (gains)................................... 96.9 (100.2) 45.2
Change in Federal income tax payable........................ 157.4 123.1 (74.4)
Change in property and equipment............................ (256.3) (81.8) (9.6)
Change in deferred acquisition costs........................ (260.7) (314.0) (220.7)
Other, net.................................................. (168.8) 70.9 399.7
------------ ------------- -------------
Net cash provided by operating activities..................... 195.8 503.0 893.0
------------ ------------- -------------
Cash flows from investing activities:
Maturities and repayments................................... 2,019.0 2,289.0 2,702.9
Sales....................................................... 7,572.9 16,972.1 10,385.9
Purchases................................................... (10,737.3) (18,578.5) (13,205.4)
(Increase) decrease in short-term investments............... (178.3) 102.4 (555.0)
Decrease in loans to discontinued operations................ - 660.0 420.1
Sale of subsidiaries........................................ - - 261.0
Other, net.................................................. (134.8) (341.8) (612.6)
------------ ------------- -------------
Net cash (used) provided by investing activities.............. (1,458.5) 1,103.2 (603.1)
------------ ------------- -------------
Cash flows from financing activities: Policyholders'
account balances:
Deposits.................................................. 2,366.2 1,508.1 1,281.7
Withdrawals............................................... (1,765.8) (1,724.6) (1,886.8)
Net increase (decrease) in short-term financings............ 378.2 (243.5) 419.9
Repayments of long-term debt................................ (41.3) (24.5) (196.4)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... - (87.2) (83.9)
Dividend paid to the Holding Company........................ (150.0) - -
Other, net.................................................. (142.1) (89.5) (62.7)
------------ ------------- -------------
Net cash provided (used) by financing activities.............. 645.2 (661.2) (528.2)
------------ ------------- -------------
Change in cash and cash equivalents........................... (617.5) 945.0 (238.3)
Cash and cash equivalents, beginning of year.................. 1,245.5 300.5 538.8
------------ ------------- -------------
Cash and Cash Equivalents, End of Year........................ $ 628.0 $ 1,245.5 $ 300.5
============ ============= =============
Supplemental cash flow information
Interest Paid............................................... $ 92.2 $ 130.7 $ 217.1
============ ============= =============
Income Taxes Paid........................................... $ 116.5 $ 254.3 $ 170.0
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is an indirect, wholly owned subsidiary of AXA Financial, Inc. (the
"Holding Company," and collectively with its consolidated subsidiaries,
"AXA Financial"). Equitable Life's insurance business is conducted
principally by Equitable Life and its wholly owned life insurance
subsidiaries, Equitable of Colorado ("EOC"), and, prior to December 31,
1996, Equitable Variable Life Insurance Company ("EVLICO"). Effective
January 1, 1997, EVLICO was merged into Equitable Life. Equitable Life's
investment management business, which comprises the Investment Services
segment, is conducted principally by Alliance Capital Management L.P.
("Alliance"), and Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an investment
banking and brokerage affiliate. AXA, a French holding company for an
international group of insurance and related financial services companies,
is the Holding Company's largest shareholder, owning approximately 58.0% at
December 31, 1999 (53.0% if all securities convertible into, and options
on, common stock were to be converted or exercised).
On September 20, 1999, as part of AXA Financial's "branding" strategic
initiative, EQ Financial Consultants, Inc., a broker-dealer subsidiary of
Equitable Life, was merged into a new company, AXA Advisors, LLC ("AXA
Advisors"). Also, on September 21, 1999, AXA Advisors was transferred by
Equitable Life to AXA Distribution Holding Corporation ("AXA
Distribution"), a wholly owned indirect subsidiary of the Holding Company,
for $15.3 million. The excess of the sales price over AXA Advisors' book
value has been recorded in Equitable Life's books as a capital
contribution. Equitable Life will continue to develop and market the
"Equitable" brand of life and annuity products, while AXA Distribution and
its subsidiaries begin to assume responsibility for providing financial
advisory services, product distribution and customer relationship
management.
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and
small groups. It also administers traditional participating group annuity
contracts with conversion features, generally for corporate qualified
pension plans, and association plans which provide full service retirement
programs for individuals affiliated with professional and trade
associations. This segment includes Separate Accounts for individual
insurance and annuity products.
The Investment Services segment includes Alliance and the results of DLJ
which are accounted for on an equity basis. In 1999, Alliance reorganized
into Alliance Capital Management Holding L.P. ("Alliance Holding") and
Alliance (the "Reorganization"). Alliance Holding's principal asset is its
interest in Alliance and it functions as a holding entity through which
holders of its publicly traded units own an indirect interest in the
operating partnership. The Company exchanged substantially all of its
Alliance Holding units for units in Alliance ("Alliance Units"). As a
result of the reorganization, the Company was the beneficial owner of
approximately 2% of Alliance Holding and 56% of Alliance. Alliance provides
diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes institutional
Separate Accounts which provide various investment options for large group
pension clients, primarily deferred benefit contribution plans, through
pooled or single group accounts. At December 31, 1999, Equitable Life has a
31.7% ownership interest in DLJ. DLJ's businesses include securities
underwriting, sales and trading, merchant banking, financial advisory
services, investment research, venture capital, correspondent brokerage
services, online interactive brokerage services and asset management. DLJ
serves institutional, corporate, governmental and individual clients both
domestically and internationally. Through June 10, 1997, this segment also
includes Equitable Real Estate Investment Management Inc. ("EREIM") which
was sold. EREIM provided real estate investment management services,
property management services, mortgage servicing and loan asset management,
and agricultural investment management.
F-6
<PAGE>
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which
require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts of
Equitable Life and certain of its subsidiaries engaged in insurance related
business (collectively, the "Insurance Group"); other subsidiaries,
principally Alliance and through June 10, 1997, EREIM (see Note 5); and
those partnerships and joint ventures in which Equitable Life or its
subsidiaries has control and a majority economic interest (collectively,
including its consolidated subsidiaries, the "Company"). The Company's
investment in DLJ is reported on the equity basis of accounting. Closed
Block assets, liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block, DLJ and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1999," "1998" and "1997" refer to
the years ended December 31, 1999, 1998 and 1997, respectively. Certain
reclassifications have been made in the amounts presented for prior periods
to conform these periods with the 1999 presentation.
Closed Block
------------
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force on
that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
reasonably expected to be sufficient to support such business, including
provision for payment of claims, certain expenses and taxes, and for
continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of assets
can be made between the Closed Block and other portions of Equitable Life's
General Account, any of its Separate Accounts or any affiliate of Equitable
Life without the approval of the New York Superintendent of Insurance (the
"Superintendent"). Closed Block assets and liabilities are carried on the
same basis as similar assets and liabilities held in the General Account.
The excess of Closed Block liabilities over Closed Block assets represents
the expected future post-tax contribution from the Closed Block which would
be recognized in income over the period the policies and contracts in the
Closed Block remain in force.
Discontinued Operations
-----------------------
Discontinued operations at December 31, 1999, principally consists of the
Group Non-Participating Wind-Up Annuities ("Wind-Up Annuities"), for which
a premium deficiency reserve has been established. Management reviews the
adequacy of the allowance each quarter and believes the allowance for
future losses at December 31, 1999 is adequate to provide for all future
losses; however, the quarterly allowance review continues to involve
numerous estimates and subjective judgments regarding the expected
performance of Discontinued Operations Investment Assets. There can be no
assurance the losses provided for will not differ from the losses
ultimately realized. To the extent actual results or future projections of
the discontinued operations differ from management's current best estimates
and assumptions underlying the allowance for future losses, the difference
would be reflected in the consolidated statements of earnings in
discontinued operations. In particular, to the extent income, sales
proceeds and holding periods for equity real estate differ from
management's previous assumptions, periodic adjustments to the allowance
are likely to result (see Note 8).
F-7
<PAGE>
Accounting Changes
------------------
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," which
requires capitalization of external and certain internal costs incurred to
obtain or develop internal-use computer software during the application
development stage. The Company applied the provisions of SOP 98-1
prospectively effective January 1, 1998. The adoption of SOP 98-1 did not
have a material impact on the Company's consolidated financial statements.
Capitalized internal-use software is amortized on a straight-line basis
over the estimated useful life of the software.
New Accounting Pronouncements
-----------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which establishes
accounting and reporting standards for derivative instruments, including
certain derivatives embedded in other contracts, and for hedging
activities. It requires all derivatives to be recognized on the balance
sheet at fair value. The accounting for changes in the fair value of a
derivative depends on its intended use. Derivatives not used in hedging
activities must be adjusted to fair value through earnings. Changes in the
fair value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings. In June 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133," which defers the effective date of SFAS
No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company expects to adopt SFAS No. 133 effective January 1, 2001.
Adjustments resulting from initial adoption of the new requirements will be
reported in a manner similar to the cumulative effect of a change in
accounting principle and will be reflected in net income or accumulated
other comprehensive income based upon existing hedging relationships, if
any. Management currently is assessing the impact of adoption. However,
Alliance's adoption of the new requirements is not expected to have a
significant impact on the Company's consolidated balance sheet or statement
of earnings. Also, since most of DLJ's derivatives are carried at fair
values, the Company's consolidated earnings and financial position are not
expected to be significantly affected by DLJ's adoption of the new
requirements.
Valuation of Investments
------------------------
Fixed maturities identified as available for sale are reported at estimated
fair value. Fixed maturities, which the Company has both the ability and
the intent to hold to maturity, are stated principally at amortized cost.
The amortized cost of fixed maturities is adjusted for impairments in value
deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which they
apply.
Mortgage loans on real estate are stated at unpaid principal balances, net
of unamortized discounts and valuation allowances. Valuation allowances are
based on the present value of expected future cash flows discounted at the
loan's original effective interest rate or the collateral value if the loan
is collateral dependent. However, if foreclosure is or becomes probable,
the measurement method used is collateral value.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired in
satisfaction of debt is valued at estimated fair value. Impaired real
estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Valuation allowances on real
estate held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale.
F-8
<PAGE>
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not have
control or a majority economic interest are reported on the equity basis of
accounting and are included either with equity real estate or other equity
investments, as appropriate.
Equity securities, comprised of common stock classified as both trading and
available for sale securities, are carried at estimated fair value and are
included in other equity investments.
Short-term investments are stated at amortized cost which approximates fair
value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.
All securities are recorded in the consolidated financial statements on a
trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment
----------------------------------------------------------------------
Gains (Losses)
--------------
Net investment income and realized investment gains (losses) (collectively,
"investment results") related to certain participating group annuity
contracts which are passed through to the contractholders are reflected as
interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized gains (losses) on publicly-traded common equity securities
classified as trading securities are reflected in net investment income.
Unrealized investment gains (losses) on fixed maturities and equity
securities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("DAC") related to universal life and investment-type
products and participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders'
account balances for mortality charges, policy administration charges and
surrender charges. Policy benefits and claims that are charged to expense
include benefit claims incurred in the period in excess of related
policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as income
when due. Benefits and expenses are matched with such income so as to
result in the recognition of profits over the life of the contracts. This
match is accomplished by means of the provision for liabilities for future
policy benefits and the deferral and subsequent amortization of policy
acquisition costs.
For contracts with a single premium or a limited number of premium payments
due over a significantly shorter period than the total period over which
benefits are provided, premiums are recorded as income when due with any
excess profit deferred and recognized in income in a constant relationship
to insurance in force or, for annuities, the amount of expected future
benefit payments.
Premiums from individual health contracts are recognized as income over the
period to which the premiums relate in proportion to the amount of
insurance protection provided.
F-9
<PAGE>
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions, underwriting,
agency and policy issue expenses, all of which vary with and are primarily
related to the production of new business, are deferred. DAC is subject to
recoverability testing at the time of policy issue and loss recognition
testing at the end of each accounting period.
For universal life products and investment-type products, DAC is amortized
over the expected total life of the contract group (periods ranging from 25
to 35 years and 5 to 17 years, respectively) as a constant percentage of
estimated gross profits arising principally from investment results,
mortality and expense margins and surrender charges based on historical and
anticipated future experience, updated at the end of each accounting
period. The effect on the amortization of DAC of revisions to estimated
gross profits is reflected in earnings in the period such estimated gross
profits are revised. The effect on the DAC asset that would result from
realization of unrealized gains (losses) is recognized with an offset to
accumulated other comprehensive income in consolidated shareholder's equity
as of the balance sheet date.
As part of its asset/liability management process, in second quarter 1999,
management initiated a review of the matching of invested assets to
Insurance product lines given their different liability characteristics and
liquidity requirements. As a result of this review, management reallocated
the current and prospective interests of the various product lines in the
invested assets. These asset reallocations and the related changes in
investment yields by product line, in turn, triggered a review of and
revisions to the estimated future gross profits used to determine the
amortization of DAC for universal life and investment-type products. The
revisions to estimated future gross profits resulted in an after-tax
writedown of DAC of $85.6 million (net of a Federal income tax benefit of
$46.1 million).
For participating traditional life policies (substantially all of which are
in the Closed Block), DAC is amortized over the expected total life of the
contract group (40 years) as a constant percentage based on the present
value of the estimated gross margin amounts expected to be realized over
the life of the contracts using the expected investment yield. At December
31, 1999, the expected investment yield, excluding policy loans, generally
ranged from 7.75% grading to 7.5% over a 20 year period. Estimated gross
margin includes anticipated premiums and investment results less claims and
administrative expenses, changes in the net level premium reserve and
expected annual policyholder dividends. The effect on the amortization of
DAC of revisions to estimated gross margins is reflected in earnings in the
period such estimated gross margins are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
For non-participating traditional life DAC is amortized in proportion to
anticipated premiums. Assumptions as to anticipated premiums are estimated
at the date of policy issue and are consistently applied during the life of
the contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account values
represents an accumulation of gross premium payments plus credited interest
less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis of
actuarial assumptions equal to guaranteed mortality and dividend fund
interest rates. The liability for annual dividends represents the accrual
of annual dividends earned. Terminal dividends are accrued in proportion to
gross margins over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on the
basis of actuarial assumptions as to mortality, persistency and interest
established at policy issue. Assumptions established at policy issue as to
mortality and persistency are based on the Insurance Group's experience
which, together with interest and expense assumptions, includes a margin
for adverse deviation. When the liabilities for future policy benefits plus
the present value of expected future gross premiums for a product are
insufficient to provide for expected future policy benefits
F-10
<PAGE>
and expenses for that product, DAC is written off and thereafter, if
required, a premium deficiency reserve is established by a charge to
earnings. Benefit liabilities for traditional annuities during the
accumulation period are equal to accumulated contractholders' fund balances
and after annuitization are equal to the present value of expected future
payments. Interest rates used in establishing such liabilities range from
2.25% to 11.5% for life insurance liabilities and from 2.25% to 8.35% for
annuity liabilities.
Individual health benefit liabilities for active lives are estimated using
the net level premium method and assumptions as to future morbidity,
withdrawals and interest. Benefit liabilities for disabled lives are
estimated using the present value of benefits method and experience
assumptions as to claim terminations, expenses and interest. While
management believes its disability income ("DI") reserves have been
calculated on a reasonable basis and are adequate, there can be no
assurance reserves will be sufficient to provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $948.4 million and $951.7 million at December 31,
1999 and 1998, respectively. Incurred benefits (benefits paid plus changes
in claim reserves) and benefits paid for individual DI and major medical
are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 150.7 $ 140.1 $ 132.3
Incurred benefits related to prior years........... 64.7 84.2 60.0
------------- ------------ ------------
Total Incurred Benefits............................ $ 215.4 $ 224.3 $ 192.3
============= ============ ============
Benefits paid related to current year.............. $ 28.9 $ 17.0 $ 28.8
Benefits paid related to prior years............... 189.8 155.4 146.2
------------- ------------ ------------
Total Benefits Paid................................ $ 218.7 $ 172.4 $ 175.0
============= ============ ============
</TABLE>
Policyholders' Dividends
------------------------
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by Equitable
Life's board of directors. The aggregate amount of policyholders' dividends
is related to actual interest, mortality, morbidity and expense experience
for the year and judgment as to the appropriate level of statutory surplus
to be retained by Equitable Life.
At December 31, 1999, participating policies, including those in the Closed
Block, represent approximately 23.0% ($47.0 billion) of directly written
life insurance in force, net of amounts ceded.
Federal Income Taxes
--------------------
The Company files a consolidated Federal income tax return with the Holding
Company and its consolidated subsidiaries. Current Federal income taxes are
charged or credited to operations based upon amounts estimated to be
payable or recoverable as a result of taxable operations for the current
year. Deferred income tax assets and liabilities are recognized based on
the difference between financial statement carrying amounts and income tax
bases of assets and liabilities using enacted income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that arise
from any other business of the Insurance Group. Separate Accounts assets
are subject to General Account claims only to the extent the value of such
assets exceeds Separate Accounts liabilities.
F-11
<PAGE>
Assets and liabilities of the Separate Accounts, representing net deposits
and accumulated net investment earnings less fees, held primarily for the
benefit of contractholders, and for which the Insurance Group does not bear
the investment risk, are shown as separate captions in the consolidated
balance sheets. The Insurance Group bears the investment risk on assets
held in one Separate Account; therefore, such assets are carried on the
same basis as similar assets held in the General Account portfolio. Assets
held in the other Separate Accounts are carried at quoted market values or,
where quoted values are not available, at estimated fair values as
determined by the Insurance Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For 1999, 1998 and 1997, investment results of such
Separate Accounts were $6,045.5 million, $4,591.0 million and $3,411.1
million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are included
in revenues.
Employee Stock Option Plan
--------------------------
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. In accordance with the opinion,
compensation expense is recorded on the date of grant only if the current
market price of the underlying stock exceeds the option strike price at the
grant date. See Note 22 for the pro forma disclosures for the Holding
Company, DLJ and Alliance required by SFAS No. 123, "Accounting for
Stock-Based Compensation".
F-12
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
------------- ------------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1999
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,866.8 $ 139.5 $ 787.0 $ 14,219.3
Mortgage-backed.................... 2,554.5 2.3 87.8 2,469.0
U.S. Treasury, government and
agency securities................ 1,194.1 18.9 23.4 1,189.6
States and political subdivisions.. 110.0 1.4 4.9 106.5
Foreign governments................ 361.8 16.2 14.8 363.2
Redeemable preferred stock......... 286.4 1.7 36.0 252.1
------------- ------------- ------------ -------------
Total Available for Sale............... $ 19,373.6 $ 180.0 $ 953.9 $ 18,599.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 133.2 $ - $ - $ 133.2
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... 25.5 1.5 17.8 9.2
Common stock trading securities...... 7.2 9.1 2.2 14.1
------------- ------------- ------------ -------------
Total Equity Securities................ $ 32.7 $ 10.6 $ 20.0 $ 23.3
============= ============= ============ =============
December 31, 1998
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury, government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
------------- ------------- ------------ -------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... $ 58.3 $ 114.9 $ 22.5 $ 150.7
============= ============= ============ =============
</TABLE>
For publicly traded fixed maturities and equity securities, estimated fair
value is determined using quoted market prices. For fixed maturities
without a readily ascertainable market value, the Company determines an
estimated fair value using a discounted cash flow approach, including
provisions for credit risk, generally based on the assumption such
securities will be held to maturity. Estimated fair values for equity
securities, substantially all of which do not have a readily ascertainable
market value, have been determined by the Company. Such estimated fair
values do not necessarily represent the values for which these securities
could have been sold at the dates of the consolidated balance sheets. At
December 31, 1999 and 1998, securities without a readily ascertainable
market value having an amortized cost of $3,322.2 million and $3,539.9
million, respectively, had estimated fair values of $3,177.7 million and
$3,748.5 million, respectively.
F-13
<PAGE>
The contractual maturity of bonds at December 31, 1999 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 479.1 $ 477.8
Due in years two through five.......................................... 2,991.8 2,921.2
Due in years six through ten........................................... 7,197.9 6,813.0
Due after ten years.................................................... 5,864.0 5,666.5
Mortgage-backed securities............................................. 2,554.4 2,469.1
------------ ------------
Total.................................................................. $ 19,087.2 $ 18,347.6
============ ============
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated fair
value of $133.2 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher than
normal credit risks associated with such securities by monitoring
concentrations in any single issuer or a particular industry group. Certain
of these corporate high yield securities are classified as other than
investment grade by the various rating agencies, i.e., a rating below Baa
or National Association of Insurance Commissioners ("NAIC") designation of
3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near
default). At December 31, 1999, approximately 14.9% of the $18,344.3
million aggregate amortized cost of bonds held by the Company was
considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to be
other than investment grade. The carrying values at December 31, 1999 and
1998 were $647.9 million and $562.6 million, respectively.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 230.6 $ 384.5 $ 137.1
Additions charged to income........................ 68.2 86.2 334.6
Deductions for writedowns and
asset dispositions............................... (150.2) (240.1) (87.2)
------------- ------------ ------------
Balances, End of Year.............................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 27.5 $ 34.3 $ 55.8
Equity real estate............................... 121.1 196.3 328.7
------------- ------------ ------------
Total.............................................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
</TABLE>
F-14
<PAGE>
At December 31, 1999, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $152.1 million.
The payment terms of mortgage loans on real estate may from time to time be
restructured or modified. The investment in restructured mortgage loans on
real estate, based on amortized cost, amounted to $106.0 million and $115.1
million at December 31, 1999 and 1998, respectively. Gross interest income
on restructured mortgage loans on real estate that would have been recorded
in accordance with the original terms of such loans amounted to $9.5
million, $10.3 million and $17.2 million in 1999, 1998 and 1997,
respectively. Gross interest income on these loans included in net
investment income aggregated $8.2 million, $8.3 million and $12.7 million
in 1999, 1998 and 1997, respectively.
Impaired mortgage loans along with the related provision for losses were as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1999 1998
-------------- --------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 142.4 $ 125.4
Impaired mortgage loans without provision for losses............... 2.2 8.6
-------------- --------------
Recorded investment in impaired mortgage loans..................... 144.6 134.0
Provision for losses............................................... (23.0) (29.0)
-------------- --------------
Net Impaired Mortgage Loans........................................ $ 121.6 $ 105.0
============== ==============
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected
future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on loans where the collateral value is
used to measure impairment is recorded on a cash basis. Interest income on
loans where the present value method is used to measure impairment is
accrued on the net carrying value amount of the loan at the interest rate
used to discount the cash flows. Changes in the present value attributable
to changes in the amount or timing of expected cash flows are reported as
investment gains or losses.
During 1999, 1998 and 1997, respectively, the Company's average recorded
investment in impaired mortgage loans was $141.7 million, $161.3 million
and $246.9 million. Interest income recognized on these impaired mortgage
loans totaled $12.0 million, $12.3 million and $15.2 million ($0.0 million,
$.9 million and $2.3 million recognized on a cash basis) for 1999, 1998 and
1997, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1999 and 1998, the carrying value of equity real estate held
for sale amounted to $382.2 million and $836.2 million, respectively. For
1999, 1998 and 1997, respectively, real estate of $20.5 million, $7.1
million and $152.0 million was acquired in satisfaction of debt. At
December 31, 1999 and 1998, the Company owned $443.9 million and $552.3
million, respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate held for production of income is computed using
the straight-line method over the estimated useful lives of the properties,
which generally range from 40 to 50 years. Accumulated depreciation on real
estate was $251.6 million and $374.8 million at December 31, 1999 and 1998,
respectively. Depreciation expense on real estate totaled $21.8 million,
$30.5 million and $74.9 million for 1999, 1998 and 1997, respectively.
F-15
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 individual ventures at both December 31, 1999 and 1998) and for limited
partnership interests accounted for under the equity method, in which the
Company has an investment of $10.0 million or greater and an equity
interest of 10% or greater, follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 861.1 $ 913.7
Investments in securities, generally at estimated fair value........... 678.4 636.9
Cash and cash equivalents.............................................. 68.4 85.9
Other assets........................................................... 239.3 279.8
------------- -------------
Total Assets........................................................... $ 1,847.2 $ 1,916.3
============= =============
Borrowed funds - third party........................................... $ 354.2 $ 367.1
Borrowed funds - AXA Financial......................................... 28.9 30.1
Other liabilities...................................................... 313.9 197.2
------------- -------------
Total liabilities...................................................... 697.0 594.4
------------- -------------
Partners' capital...................................................... 1,150.2 1,321.9
------------- -------------
Total Liabilities and Partners' Capital................................ $ 1,847.2 $ 1,916.3
============= =============
Equity in partners' capital included above............................. $ 316.5 $ 365.6
Equity in limited partnership interests not included above and other... 524.1 390.1
------------- -------------
Carrying Value......................................................... $ 840.6 $ 755.7
============= =============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 180.5 $ 246.1 $ 310.5
Revenues of other limited partnership interests.... 455.1 128.9 506.3
Interest expense - third party..................... (39.8) (33.3) (91.8)
Interest expense - AXA Financial................... (2.5) (2.6) (7.2)
Other expenses..................................... (139.0) (197.0) (263.6)
------------- ------------ ------------
Net Earnings....................................... $ 454.3 $ 142.1 $ 454.2
============= ============ ============
Equity in net earnings included above.............. $ 10.5 $ 44.4 $ 76.7
Equity in net earnings of limited partnership
interests not included above..................... 76.0 37.9 69.5
Other.............................................. - - (.9)
------------- ------------ ------------
Total Equity in Net Earnings....................... $ 86.5 $ 82.3 $ 145.3
============= ============ ============
</TABLE>
F-16
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,499.8 $ 1,489.0 $ 1,459.4
Mortgage loans on real estate...................... 253.4 235.4 260.8
Equity real estate................................. 250.2 356.1 390.4
Other equity investments........................... 165.1 83.8 156.9
Policy loans....................................... 143.8 144.9 177.0
Other investment income............................ 161.3 185.7 181.7
------------- ------------ ------------
Gross investment income.......................... 2,473.6 2,494.9 2,626.2
Investment expenses.............................. (232.7) (266.8) (343.4)
------------- ------------ ------------
Net Investment Income.............................. $ 2,240.9 $ 2,228.1 $ 2,282.8
============= ============ ============
</TABLE>
Investment (losses) gains, net, including changes in the valuation
allowances, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ (290.9) $ (24.3) $ 88.1
Mortgage loans on real estate...................... (3.3) (10.9) (11.2)
Equity real estate................................. (2.4) 74.5 (391.3)
Other equity investments........................... 88.1 29.9 14.1
Sale of subsidiaries............................... - (2.6) 252.1
Issuance and sales of Alliance Units............... 5.5 19.8 -
Issuance and sales of DLJ common stock............. 106.0 18.2 3.0
Other.............................................. .1 (4.4) -
------------- ------------ ------------
Investment (Losses) Gains, Net..................... $ (96.9) $ 100.2 $ (45.2)
============= ============ ============
</TABLE>
Writedowns of fixed maturities amounted to $223.2 million, $101.6 million
and $11.7 million for 1999, 1998 and 1997, respectively, and writedowns of
equity real estate amounted to $136.4 million for 1997. In fourth quarter
1997, the Company reclassified $1,095.4 million depreciated cost of equity
real estate from real estate held for the production of income to real
estate held for sale. Additions to valuation allowances of $227.6 million
were recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of income
were recorded.
For 1999, 1998 and 1997, respectively, proceeds received on sales of fixed
maturities classified as available for sale amounted to $7,138.6 million,
$15,961.0 million and $9,789.7 million. Gross gains of $74.7 million,
$149.3 million and $166.0 million and gross losses of $214.3 million, $95.1
million and $108.8 million, respectively, were realized on these sales. The
change in unrealized investment (losses) gains related to fixed maturities
classified as available for sale for 1999, 1998 and 1997 amounted to
$(1,313.8) million, $(331.7) million and $513.4 million, respectively.
On January 1, 1999, investments in publicly-traded common equity securities
in the General Account portfolio within other equity investments amounting
to $102.3 million were transferred from available for sale securities to
trading securities. As a result of this transfer, unrealized investment
gains of $83.3 million ($43.2 million net of related DAC and Federal income
taxes) were recognized as realized investment gains in the consolidated
statements of earnings. Net unrealized holding gains of $7.0 million were
included in net investment income in the consolidated statements of
earnings for 1999. These trading securities had a carrying value of $14.1
million and costs of $7.2 million at December 31, 1999.
F-17
<PAGE>
During 1999, DLJ completed its offering of a new class of its Common Stock
to track the financial performance of DLJdirect, its online brokerage
business. As a result of this offering, the Company recorded a non-cash
pre-tax realized gain of $95.8 million.
For 1999, 1998 and 1997, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $131.5 million, $136.9 million
and $137.5 million, respectively.
In 1997, Equitable Life sold EREIM (other than its interest in Column
Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend Lease"),
for $400.0 million and recognized an investment gain of $162.4 million, net
of Federal income tax of $87.4 million. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale. Through June 10, 1997, the businesses sold reported combined
revenues of $91.6 million and combined net earnings of $10.7 million.
On June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's 1996 acquisition of Cursitor Holdings
L.P. and Cursitor Holdings Limited (collectively, "Cursitor") by $120.9
million since Cursitor's business fundamentals no longer supported the
carrying value of its investment. The Company's earnings from continuing
operations for 1997 included a charge of $59.5 million, net of a Federal
income tax benefit of $10.0 million and minority interest of $51.4 million.
The remaining balance of intangible assets is being amortized over its
estimated useful life of 20 years.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and the
changes for the corresponding years, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 384.1 $ 533.6 $ 189.9
Changes in unrealized investment (losses) gains.... (1,486.6) (242.4) 543.3
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... 24.7 (5.7) 53.2
DAC............................................ 208.6 13.2 (89.0)
Deferred Federal income taxes.................. 476.4 85.4 (163.8)
------------- ------------ ------------
Balance, End of Year............................... $ (392.8) $ 384.1 $ 533.6
============= ============ ============
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ (773.9) $ 539.9 $ 871.2
Other equity investments....................... (16.3) 92.4 33.7
Other, principally Closed Block................ 46.8 111.1 80.9
------------- ------------ ------------
Total........................................ (743.4) 743.4 985.8
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ - (24.7) (19.0)
DAC.......................................... 80.8 (127.8) (141.0)
Deferred Federal income taxes................ 269.8 (206.8) (292.2)
------------- ------------ ------------
Total.............................................. $ (392.8) $ 384.1 $ 533.6
============= ============ ============
</TABLE>
Changes in unrealized gains (losses) reflect changes in fair value of only
those fixed maturities and equity securities classified as available for
sale and do not reflect any changes in fair value of policyholders' account
balances and future policy benefits.
F-18
<PAGE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) represents cumulative gains
and losses on items that are not reflected in earnings. The balances for
the past three years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Unrealized (losses) gains on investments........... $ (392.8) $ 384.1 $ 533.6
Minimum pension liability.......................... (.1) (28.3) (17.3)
------------- ------------ ------------
Total Accumulated Other
Comprehensive (Loss) Income...................... $ (392.9) $ 355.8 $ 516.3
============= ============ ============
</TABLE>
The components of other comprehensive income (loss) for the past three
years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Net unrealized (losses) gains on investment
securities:
Net unrealized (losses) gains arising during
the period..................................... $ (1,682.3) $ (186.1) $ 564.0
Adjustment to reclassify losses (gains)
included in net earnings during the period..... 195.7 (56.3) (20.7)
------------- ------------ ------------
Net unrealized (losses) gains on investment
securities..................................... (1,486.6) (242.4) 543.3
Adjustments for policyholder liabilities,
DAC and deferred Federal income taxes.......... 709.7 92.9 (199.6)
------------- ------------ ------------
Change in unrealized losses (gains), net of
adjustments.................................... (776.9) (149.5) 343.7
Change in minimum pension liability................ 28.2 (11.0) (4.4)
------------- ------------ ------------
Total Other Comprehensive (Loss) Income............ $ (748.7) $ (160.5) $ 339.3
============= ============ ============
</TABLE>
F-19
<PAGE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C
BALANCE SHEETS
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,144.8 and $4,149.0)........................................... $ 4,014.0 $ 4,373.2
Mortgage loans on real estate........................................ 1,704.2 1,633.4
Policy loans......................................................... 1,593.9 1,641.2
Cash and other invested assets....................................... 194.4 86.5
DAC.................................................................. 895.5 676.5
Other assets......................................................... 205.3 221.6
------------ ------------
Total Assets......................................................... $ 8,607.3 $ 8,632.4
============ ============
Future policy benefits and policyholders' account balances........... $ 9,011.7 $ 9,013.1
Other liabilities.................................................... 13.3 63.9
------------ ------------
Total Liabilities.................................................... $ 9,025.0 $ 9,077.0
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Premiums and other revenue......................... $ 619.1 $ 661.7 $ 687.1
Investment income (net of investment
expenses of $15.8, $15.5 and $27.0).............. 574.2 569.7 574.9
Investment (losses) gains, net..................... (11.3) .5 (42.4)
------------- ------------ ------------
Total revenues............................... 1,182.0 1,231.9 1,219.6
------------- ------------ ------------
Policyholders' benefits and dividends.............. 1,024.7 1,082.0 1,066.7
Other operating costs and expenses................. 70.9 62.8 50.4
------------- ------------ ------------
Total benefits and other deductions.......... 1,095.6 1,144.8 1,117.1
------------- ------------ ------------
Contribution from the Closed Block................. $ 86.4 $ 87.1 $ 102.5
============= ============ ============
</TABLE>
Impaired mortgage loans along with the related provision for losses
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 26.8 $ 55.5
Impaired mortgage loans without provision for losses................... 4.5 7.6
------------- -------------
Recorded investment in impaired mortgages.............................. 31.3 63.1
Provision for losses................................................... (4.1) (10.1)
------------- -------------
Net Impaired Mortgage Loans............................................ $ 27.2 $ 53.0
============= =============
</TABLE>
During 1999, 1998 and 1997, the Closed Block's average recorded investment
in impaired mortgage loans was $37.0 million, $85.5 million and $110.2
million, respectively. Interest income recognized on these impaired
mortgage loans totaled $3.3 million, $4.7 million and $9.4 million ($.3
million, $1.5 million and $4.1 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
F-20
<PAGE>
Valuation allowances amounted to $4.6 million and $11.1 million on mortgage
loans on real estate and $24.7 million and $15.4 million on equity real
estate at December 31, 1999 and 1998, respectively. Writedowns of fixed
maturities amounted to $3.5 million for 1997. Writedowns of equity real
estate amounted to $28.8 million for 1997.
In fourth quarter 1997, $72.9 million depreciated cost of equity real
estate held for production of income was reclassified to equity real estate
held for sale. Additions to valuation allowances of $15.4 million were
recorded upon these transfers. Also in fourth quarter 1997, $28.8 million
of writedowns on real estate held for production of income were recorded.
Many expenses related to Closed Block operations are charged to operations
outside of the Closed Block; accordingly, the contribution from the Closed
Block does not represent the actual profitability of the Closed Block
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside of the Closed Block.
F-21
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Mortgage loans on real estate........................................ $ 454.6 $ 553.9
Equity real estate................................................... 426.6 611.0
Other equity investments............................................. 55.8 115.1
Other invested assets................................................ 87.1 24.9
------------ ------------
Total investments.................................................. 1,024.1 1,304.9
Cash and cash equivalents............................................ 164.5 34.7
Other assets......................................................... 213.0 219.0
------------ ------------
Total Assets......................................................... $ 1,401.6 $ 1,558.6
============ ============
Policyholders' liabilities........................................... $ 993.3 $ 1,021.7
Allowance for future losses.......................................... 242.2 305.1
Other liabilities.................................................... 166.1 231.8
------------ ------------
Total Liabilities.................................................... $ 1,401.6 $ 1,558.6
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Investment income (net of investment
expenses of $49.3, $63.3 and $97.3).............. $ 98.7 $ 160.4 $ 188.6
Investment (losses) gains, net..................... (13.4) 35.7 (173.7)
Policy fees, premiums and other income............. .2 (4.3) .2
------------- ------------ ------------
Total revenues..................................... 85.5 191.8 15.1
Benefits and other deductions...................... 104.8 141.5 169.5
(Losses charged) earnings credited to allowance
for future losses................................ (19.3) 50.3 (154.4)
------------- ------------ ------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) the allowance for future
losses........................................... 43.3 4.2 (134.1)
Federal income tax (expense) benefit............... (15.2) (1.5) 46.9
------------- ------------ ------------
Earnings (Loss) from Discontinued Operations....... $ 28.1 $ 2.7 $ (87.2)
============= ============ ============
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued operations
against the allowance, re-estimates future losses and adjusts the
allowance, if appropriate. Additionally, as part of the Company's annual
planning process which takes place in the fourth quarter of each year,
investment and benefit cash flow projections are prepared. These updated
assumptions and estimates resulted in a release of allowance in 1999 and
1998 and strengthening of allowance in 1997.
In fourth quarter 1997, $329.9 million depreciated cost of equity real
estate was reclassified from equity real estate held for production of
income to real estate held for sale. Additions to valuation allowances of
$79.8 million were recognized upon these transfers. Also in fourth quarter
1997, $92.5 million of writedowns on real estate held for production of
income were recognized.
F-22
<PAGE>
Benefits and other deductions includes $26.6 million and $53.3 million of
interest expense related to amounts borrowed from continuing operations in
1998 and 1997, respectively.
Valuation allowances of $1.9 million and $3.0 million on mortgage loans on
real estate and $54.8 million and $34.8 million on equity real estate were
held at December 31, 1999 and 1998, respectively. Writedowns of equity real
estate were $95.7 million in 1997.
During 1999, 1998 and 1997, discontinued operations' average recorded
investment in impaired mortgage loans was $13.8 million, $73.3 million and
$89.2 million, respectively. Interest income recognized on these impaired
mortgage loans totaled $1.7 million, $4.7 million and $6.6 million ($.0
million, $3.4 million and $5.3 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
At December 31, 1999 and 1998, discontinued operations had real estate
acquired in satisfaction of debt with carrying values of $24.1 million and
$50.0 million, respectively.
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ 557.0 $ 179.3
------------ ------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95% due 2005...................................... 399.5 399.4
Surplus notes, 7.70% due 2015...................................... 199.7 199.7
Other.............................................................. .4 .3
------------ ------------
Total Equitable Life........................................... 599.6 599.4
------------ ------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.43% - 9.5%, due through 2017..................... 251.3 392.2
------------ ------------
Alliance:
Other.............................................................. - 10.8
------------ ------------
Total long-term debt................................................. 850.9 1,002.4
------------ ------------
Total Short-term and Long-term Debt.................................. $ 1,407.9 $ 1,181.7
============ ============
</TABLE>
Short-term Debt
---------------
Equitable Life has a $700.0 million bank credit facility available to fund
short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of borrowing
options with varying interest rates and expires in September 2000. The
interest rates are based on external indices dependent on the type of
borrowing and at December 31, 1999 range from 5.76% to 8.5%. There were no
borrowings outstanding under this bank credit facility at December 31,
1999.
Equitable Life has a commercial paper program with an issue limit of $1.0
billion. This program is available for general corporate purposes used to
support Equitable Life's liquidity needs and is supported by Equitable
Life's existing $700.0 million bank credit facility. At December 31, 1999,
there were $166.9 million outstanding under this program.
Alliance has a $425.0 million five-year revolving credit facility with a
group of commercial banks. Under the facility, the interest rate, at the
option of Alliance, is a floating rate generally based upon a defined prime
rate, a rate related to the London Interbank Offered Rate ("LIBOR") or the
Federal Funds Rate. A facility fee is payable on the total facility. During
July 1999, Alliance increased the size of its commercial paper program by
$200.0 million from $425.0 million for a total available limit of $625.0
million. Borrowings from the revolving credit facility and the original
commercial paper program may not exceed $425.0 million in the aggregate.
The revolving credit facility provides backup liquidity for commercial
paper issued under
F-23
<PAGE>
Alliance's commercial paper program and can be used as a direct source of
borrowing. The revolving credit facility contains covenants that require
Alliance to, among other things, meet certain financial ratios. At December
31, 1999, Alliance had commercial paper outstanding totaling $384.7 million
at an effective interest rate of 5.9%; there were no borrowings outstanding
under Alliance's revolving credit facility.
In December 1999, Alliance established a $100.0 million extendible
commercial notes ("ECN") program to supplement its commercial paper
program. ECN's are short-term debt instruments that do not require any
back-up liquidity support.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants related
to the total amount of debt, net tangible assets and other matters. At
December 31, 1999, the Company is in compliance with all debt covenants.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $323.6 million and $640.2 million at December 31, 1999 and
1998, respectively, as collateral for certain short-term and long-term
debt.
At December 31, 1999, aggregate maturities of the long-term debt based on
required principal payments at maturity was $3.0 million for 2000 and
$848.7 million for 2005 and thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated statements
of earnings follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 174.0 $ 283.3 $ 186.5
Deferred......................................... 158.0 69.8 (95.0)
------------- ------------ ------------
Total.............................................. $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
F-24
<PAGE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal income
tax rate of 35%. The sources of the difference and their tax effects
follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 458.4 $ 414.3 $ 234.7
Non-taxable minority interest...................... (47.8) (33.2) (38.0)
Non-taxable subsidiary gains....................... (37.1) (6.4) -
Adjustment of tax audit reserves................... 27.8 16.0 (81.7)
Equity in unconsolidated subsidiaries.............. (64.0) (39.3) (45.1)
Other.............................................. (5.3) 1.7 21.6
------------- ------------ ------------
Federal Income Tax Expense......................... $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 December 31, 1998
----------------------------- -----------------------------
ASSETS LIABILITIES Assets Liabilities
----------- ------------ ------------ -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ - $ 37.7 $ 235.3 $ -
Other.................................. - 20.6 27.8 -
DAC, reserves and reinsurance.......... - 329.7 - 231.4
Investments............................ 115.1 - - 364.4
----------- ------------ ------------ -----------
Total.................................. $ 115.1 $ 388.0 $ 263.1 $ 595.8
=========== ============ ============ ===========
</TABLE>
At December 31, 1999, in conjunction with the non-qualified employee
benefit plans, $236.8 million in deferred tax asset was transferred to the
Holding Company. See Note 12 for discussion of the benefit plans
transferred.
The deferred Federal income taxes impacting operations reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes. The sources of these temporary differences and their
tax effects follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ 83.2 $ (7.7) $ 46.2
Investments........................................ 3.2 46.8 (113.8)
Compensation and related benefits.................. 21.0 28.6 3.7
Other.............................................. 50.6 2.1 (31.1)
------------- ------------ ------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 158.0 $ 69.8 $ (95.0)
============= ============ ============
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining the
Holding Company's consolidated Federal income tax returns for the years
1992 through 1996. Management believes these audits will have no material
adverse effect on the Company's results of operations.
F-25
<PAGE>
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer of
liability. The effect of reinsurance (excluding group life and health) is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 420.6 $ 438.8 $ 448.6
Reinsurance assumed................................ 206.7 203.6 198.3
Reinsurance ceded.................................. (69.1) (54.3) (45.4)
------------- ------------ ------------
Premiums........................................... $ 558.2 $ 588.1 $ 601.5
============= ============ ============
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 69.7 $ 75.7 $ 61.0
============= ============ ============
Policyholders' Benefits Ceded...................... $ 99.6 $ 85.9 $ 70.6
============= ============ ============
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 38.5 $ 39.5 $ 36.4
============= ============ ============
</TABLE>
Since 1997, the Company reinsures on a yearly renewal term basis 90% of the
mortality risk on new issues of certain term, universal and variable life
products. The Company's retention limit on joint survivorship policies is
$15.0 million. All in force business above $5.0 million is reinsured. The
Insurance Group also reinsures the entire risk on certain substandard
underwriting risks and in certain other cases.
The Insurance Group cedes 100% of its group life and health business to a
third party insurer. Premiums ceded totaled $.1 million, $1.3 million and
$1.6 million for 1999, 1998 and 1997, respectively. Ceded death and
disability benefits totaled $44.7 million, $15.6 million and $4.3 million
for 1999, 1998 and 1997, respectively. Insurance liabilities ceded totaled
$510.5 million and $560.3 million at December 31, 1999 and 1998,
respectively.
F-26
<PAGE>
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified part-time
employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance
formula or years of service and final average earnings, if greater, under
certain grandfathering rules in the plans. Alliance's benefits are based on
years of credited service, average final base salary and primary social
security benefits. The Company's funding policy is to make the minimum
contribution required by the Employee Retirement Income Security Act of
1974 ("ERISA").
Effective December 31, 1999, the Holding Company legally assumed primary
liability from Equitable Life for all current and future obligations of its
Excess Retirement Plan, Supplemental Executive Retirement Plan and certain
other employee benefit plans that provide participants with medical, life
insurance, and deferred compensation benefits; Equitable Life remains
secondarily liable. The amount of the liability associated with employee
benefits transferred was $676.5 million, including $183.0 million of
non-qualified pension benefit obligations and $394.1 million of
postretirement benefits obligations at December 31, 1999. This transfer was
recorded as a non-cash capital contribution to Equitable Life.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 36.7 $ 33.2 $ 32.5
Interest cost on projected benefit obligations..... 131.6 129.2 128.2
Actual return on assets............................ (189.8) (175.6) (307.6)
Net amortization and deferrals..................... 7.5 6.1 166.6
------------- ------------ ------------
Net Periodic Pension Cost (Credit)................. $ (14.0) $ (7.1) $ 19.7
============= ============ ============
</TABLE>
The projected benefit obligations under the qualified and non-qualified
pension plans were comprised of:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Benefit obligations, beginning of year................................. $ 1,933.4 $ 1,801.3
Service cost........................................................... 36.7 33.2
Interest cost.......................................................... 131.6 129.2
Actuarial (gains) losses............................................... (53.3) 108.4
Benefits paid.......................................................... (123.1) (138.7)
------------ ------------
Subtotal before transfer............................................... 1,925.3 1,933.4
Transfer of Non-qualified Pension Benefit Obligation
to the Holding Company............................................... (262.5) -
------------ ------------
Benefit Obligation, End of Year........................................ $ 1,662.8 $ 1,933.4
============ ============
</TABLE>
F-27
<PAGE>
The funded status of the qualified and non-qualified pension plans was as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 2,083.1 $ 1,867.4
Actual return on plan assets........................................... 369.0 338.9
Contributions.......................................................... .1 -
Benefits paid and fees................................................. (108.5) (123.2)
------------ ------------
Plan assets at fair value, end of year................................. 2,343.7 2,083.1
Projected benefit obligations.......................................... 1,925.3 1,933.4
------------ ------------
Excess of plan assets over projected benefit obligations............... 418.4 149.7
Unrecognized prior service cost........................................ (5.2) (7.5)
Unrecognized net (gain) loss from past experience different
from that assumed.................................................... (197.3) 38.7
Unrecognized net asset at transition................................... (.1) 1.5
------------ ------------
Subtotal before transfer............................................... 215.8 182.4
Transfer of Accrued Non-qualified Pension Benefit Obligation
to the Holding Company............................................... 183.0 -
------------ ------------
Prepaid Pension Cost, Net.............................................. $ 398.8 $ 182.4
============ ============
</TABLE>
The prepaid pension cost for pension plans with assets in excess of
projected benefit obligations was $412.2 million and $363.9 million and the
accrued liability for pension plans with projected benefit obligations in
excess of plan assets was $13.5 million and $181.5 million at December 31,
1999 and 1998, respectively.
The pension plan assets include corporate and government debt securities,
equity securities, equity real estate and shares of group trusts managed by
Alliance. The discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of projected benefit
obligations were 8.0% and 6.38%, respectively, at December 31, 1999 and
7.0% and 3.83%, respectively, at December 31, 1998. As of January 1, 1999
and 1998, the expected long-term rate of return on assets for the
retirement plan was 10.0% and 10.25%, respectively.
The Company recorded, as a reduction of shareholder's equity, an additional
minimum pension liability of $.1 million, $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1999, 1998 and 1997,
respectively, primarily representing the excess of the accumulated benefit
obligation of the non-qualified pension plan over the accrued liability.
The aggregate accumulated benefit obligation and fair value of plan assets
for pension plans with accumulated benefit obligations in excess of plan
assets were $325.7 million and $36.3 million, respectively, at December 31,
1999 and $309.7 million and $34.5 million, respectively, at December 31,
1998.
Prior to 1987, the qualified plan funded participants' benefits through the
purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $30.2 million,
$31.8 million and $33.2 million for 1999, 1998 and 1997, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining age
55 who have at least 10 years of service or (ii) on or after attaining age
65 or (iii) whose jobs have been abolished and who have attained age 50
with 20 years of service. The life insurance benefits are related to age
and salary at retirement. The costs of postretirement benefits are
recognized in accordance with the provisions of SFAS No. 106. The Company
continues to fund postretirement benefits costs on a pay-as-you-go basis
and, for 1999, 1998 and 1997, the Company made estimated postretirement
benefits payments of $29.5 million, $28.4 million and $18.7 million,
respectively.
F-28
<PAGE>
The following table sets forth the postretirement benefits plan's status,
reconciled to amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.7 $ 4.6 $ 4.5
Interest cost on accumulated postretirement
benefits obligation.............................. 34.4 33.6 34.7
Unrecognized prior service costs................... (7.0) - -
Net amortization and deferrals..................... 8.4 .5 1.9
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 40.5 $ 38.7 $ 41.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.4 $ 490.8
Service cost........................................................... 4.7 4.6
Interest cost.......................................................... 34.4 33.6
Contributions and benefits paid........................................ (29.5) (28.4)
Actuarial gains........................................................ (29.0) (10.2)
------------ ------------
Accumulated postretirement benefits obligation, end of year............ 471.0 490.4
Unrecognized prior service cost........................................ 26.9 31.8
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (86.0) (121.2)
------------ ------------
Subtotal before transfer............................................... 411.9 401.0
Transfer to the Holding Company........................................ (394.1) -
------------ ------------
Accrued Postretirement Benefits Cost................................... $ 17.8 $ 401.0
============ ============
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those offered
to active employees and medical benefits will be limited to 200% of 1993
costs for all participants.
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefits obligation was 7.5% in 1999, gradually declining to
4.75% in the year 2010, and in 1998 was 8.0%, gradually declining to 2.5%
in the year 2009. The discount rate used in determining the accumulated
postretirement benefits obligation was 8.0% and 7.0% at December 31, 1999
and 1998, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1999
would be increased 3.55%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 3.91%. If the health
care cost trend rate assumptions were decreased by 1% the accumulated
postretirement benefits obligation as of December 31, 1999 would be
decreased by 4.38%. The effect of this change on the sum of the service
cost and interest cost would be a decrease of 4.96%.
F-29
<PAGE>
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap transactions
are amortized as yield adjustments over the remaining life of the
underlying hedged security. Income and expense resulting from interest rate
swap activities are reflected in net investment income. The notional amount
of matched interest rate swaps outstanding at December 31, 1999 and 1998,
respectively, was $797.3 million and $880.9 million. The average unexpired
terms at December 31, 1999 ranged from two months to 5.0 years. At December
31, 1999, the cost of terminating swaps in a loss position was $1.8
million. Equitable Life maintains an interest rate cap program designed to
hedge crediting rates on interest-sensitive individual annuities contracts.
The outstanding notional amounts at December 31, 1999 of contracts
purchased and sold were $7,575.0 million and $875.0 million, respectively.
The net premium paid by Equitable Life on these contracts was $51.6 million
and is being amortized ratably over the contract periods ranging from 1 to
4 years. Income and expense resulting from this program are reflected as an
adjustment to interest credited to policyholders' account balances.
DLJ enters into certain contractual agreements referred to as derivatives
or off-balance-sheet financial instruments primarily for trading purposes
and to provide products for its clients. DLJ performs the following
activities: writing over-the-counter ("OTC") options to accommodate
customer needs; trading in forward contracts in U.S. government and agency
issued or guaranteed securities; trading in futures contracts on equity
based indices, interest rate instruments, and currencies; and issuing
structured products based on emerging market financial instruments and
indices. DLJ also enters into swap agreements, primarily equity, interest
rate and foreign currency swaps. DLJ is not significantly involved in
commodity derivative instruments.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases where
quoted market prices are not available, fair values are estimated using
present value or other valuation techniques. The fair value estimates are
made at a specific point in time, based on available market information and
judgments about the financial instrument, including estimates of the timing
and amount of expected future cash flows and the credit standing of
counterparties. Such estimates do not reflect any premium or discount that
could result from offering for sale at one time the Company's entire
holdings of a particular financial instrument, nor do they consider the tax
impact of the realization of unrealized gains or losses. In many cases, the
fair value estimates cannot be substantiated by comparison to independent
markets, nor can the disclosed value be realized in immediate settlement of
the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts. Fair
market value of off-balance-sheet financial instruments of the Insurance
Group was not material at December 31, 1999 and 1998.
F-30
<PAGE>
Fair values for mortgage loans on real estate are estimated by discounting
future contractual cash flows using interest rates at which loans with
similar characteristics and credit quality would be made. Fair values for
foreclosed mortgage loans and problem mortgage loans are limited to the
estimated fair value of the underlying collateral if lower.
Fair values of policy loans are estimated by discounting the face value of
the loans from the time of the next interest rate review to the present, at
a rate equal to the excess of the current estimated market rates over the
current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account balances,
and guaranteed interest contracts are estimated using projected cash flows
discounted at rates reflecting expected current offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in policyholders'
account balances, are estimated by discounting the account value back from
the time of the next crediting rate review to the present, at a rate equal
to the excess of current estimated market rates offered on new policies
over the current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which takes
into account the level of current market interest rates and collateral
risk. The estimated fair values for recourse mortgage debt are determined
by discounting contractual cash flows at a rate based upon current interest
rates of other companies with credit ratings similar to the Company. The
Company's carrying value of short-term borrowings approximates their
estimated fair value.
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1999 1998
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,270.0 $ 3,239.3 $ 2,809.9 $ 2,961.8
Other limited partnership interests.... 647.9 647.9 562.6 562.6
Policy loans........................... 2,257.3 2,359.5 2,086.7 2,370.7
Policyholders' account balances -
investment contracts................. 12,740.4 12,800.5 12,892.0 13,396.0
Long-term debt......................... 850.9 834.9 1,002.4 1,025.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 1,704.2 $ 1,650.3 $ 1,633.4 $ 1,703.5
Other equity investments............... 36.3 36.3 56.4 56.4
Policy loans........................... 1,593.9 1,712.0 1,641.2 1,929.7
SCNILC liability....................... 22.8 22.5 25.0 25.0
Discontinued Operations Financial
---------------------------------
Instruments:
------------
Mortgage loans on real estate.......... $ 454.6 $ 467.0 $ 553.9 $ 599.9
Fixed maturities....................... 85.5 85.5 24.9 24.9
Other equity investments............... 55.8 55.8 115.1 115.1
Guaranteed interest contracts.......... 33.2 27.5 37.0 34.0
Long-term debt......................... 101.9 101.9 147.1 139.8
</TABLE>
F-31
<PAGE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements include
commitments by the Company, under certain conditions: to make capital
contributions of up to $59.4 million to affiliated real estate joint
ventures; and to provide equity financing to certain limited partnerships
of $373.8 million at December 31, 1999, under existing loan or loan
commitment agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance companies
and beneficiaries. To satisfy its obligations under these agreements,
Equitable Life owns single premium annuities issued by previously wholly
owned life insurance subsidiaries. Equitable Life has directed payment
under these annuities to be made directly to the beneficiaries under the
structured settlement agreements. A contingent liability exists with
respect to these agreements should the previously wholly owned subsidiaries
be unable to meet their obligations. Management believes the satisfaction
of those obligations by Equitable Life is remote.
The Insurance Group had $24.9 million of letters of credit outstanding at
December 31, 1999.
15) LITIGATION
The Company
-----------
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported class
actions against Equitable Life, its subsidiary insurance company and a
former insurance subsidiary. These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice misrepresentation
primarily involving: the number of premium payments required; the propriety
of a product as an investment vehicle; the propriety of a product as a
replacement of an existing policy; and failure to disclose a product as
life insurance. Some actions are in state courts and others are in U.S.
District Courts in different jurisdictions, and are in varying stages of
discovery and motions for class certification.
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in the
award of substantial judgments, including material amounts of punitive
damages, or in substantial settlements. Although the outcome of litigation
cannot be predicted with certainty, particularly in the early stages of an
action, the Company's management believes that the ultimate resolution of
these cases should not have a material adverse effect on the financial
position of the Company. The Company's management cannot make an estimate
of loss, if any, or predict whether or not any such litigation will have a
material adverse effect on the Company's results of operations in any
particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action in
September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination on
the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation. Although
the outcome of litigation cannot be predicted with certainty, the Company's
management believes that the ultimate resolution of this matter should not
have a material adverse effect on the financial position of the Company.
The Company's management cannot make an estimate of loss, if any, or
predict whether or not such matter will have a material adverse effect on
the Company's results of operations in any particular period.
Agent Health Benefits Case
Equitable Life is a defendant in an action, certified as a class action in
March 1999, in the United States District Court for the Northern District
of California, alleging, among other things, that Equitable Life violated
ERISA by eliminating certain alternatives pursuant to which agents of
Equitable Life could qualify for health care coverage. The class consists
of "[a]ll current, former and retired Equitable agents, who while
F-32
<PAGE>
associated with Equitable satisfied [certain alternatives] to qualify for
health coverage or contributions thereto under applicable plans."
Plaintiffs allege various causes of action under ERISA, including claims
for enforcement of alleged promises contained in plan documents and for
enforcement of agent bulletins, breach of unilateral contract, breach of
fiduciary duty and promissory estoppel. The parties are currently engaged
in discovery. Although the outcome of any litigation cannot be predicted
with certainty, the Company's management believes that the ultimate
resolution of this matter should not have a material adverse effect on the
financial position of the Company. The Company's management cannot make an
estimate of loss, if any, or predict whether or not such matter will have a
material adverse effect on the Company's results of operations in any
particular period.
Prime Property Fund Case
In January 2000, the California Supreme Court denied the Company's petition
for review of an October 1999 decision by the California Superior Court of
Appeal. Such decision reversed the dismissal by the Supreme Court of Orange
County, California of an action which was commenced in 1995 by a real
estate developer in connection with a limited partnership formed in 1991
with the Company on behalf of Prime Property Fund ("PPF"). The Company
serves as investment manager for PPF, an open-end, commingled real estate
separate account of the Company for pension clients. Plaintiff alleges
breach of fiduciary duty and other claims principally in connection with
PPF's 1995 purchase and subsequent foreclosure of the loan which financed
the partnership's property. Plaintiff seeks compensatory and punitive
damages. The case has been remanded to the Superior Court for further
proceedings. Although the outcome of litigation cannot be predicted with
certainty, the Company's management believes that the ultimate resolution
of this matter should not have a material adverse effect on the financial
position of the Company. The Company's management cannot make an estimate
of loss, if any, or predict whether or not this matter will have a material
adverse effect on the Company's results of operations in any particular
period.
Alliance Capital
----------------
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance Holding and
certain other defendants affiliated with Alliance, including the Holding
Company, alleging violations of Federal securities laws, fraud and breach
of fiduciary duty in connection with the Fund's investments in Mexican and
Argentine securities. The original complaint was dismissed in 1996; on
appeal, the dismissal was affirmed. In October 1996, plaintiffs filed a
motion for leave to file an amended complaint, alleging the Fund failed to
hedge against currency risk despite representations that it would do so,
the Fund did not properly disclose that it planned to invest in
mortgage-backed derivative securities and two Fund advertisements
misrepresented the risks of investing in the Fund. In October 1998, the
U.S. Court of Appeals for the Second Circuit issued an order granting
plaintiffs' motion to file an amended complaint alleging that the Fund
misrepresented its ability to hedge against currency risk and denying
plaintiffs' motion to file an amended complaint containing the other
allegations. In December 1999, the United States District Court for the
Southern District of New York granted the defendants' motion for summary
judgment on all claims against all defendants. Later in December 1999, the
plaintiffs filed motions for reconsideration of the Court's ruling. These
motions are currently pending with the Court.
In connection with the Reorganization; Alliance assumed any liabilities
which Alliance Holding may have with respect to this action. Alliance and
Alliance Holding believe that the allegations in the amended complaint are
without merit and intend to vigorously defend against these claims. While
the ultimate outcome of this matter cannot be determined at this time,
management of Alliance Holding and Alliance do not expect that it will have
a material adverse effect on Alliance Holding's or Alliance's results of
operations or financial condition.
DLJSC
-----
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") is a
defendant along with certain other parties in a class action complaint
involving the underwriting of units, consisting of notes and warrants to
purchase common shares, of Rickel Home Centers, Inc. ("Rickel"), which
filed a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code. The complaint seeks unspecified compensatory and punitive
damages from DLJSC, as an underwriter and as an owner of 7.3% of the common
stock, for alleged violation of Federal securities laws and common law
fraud for alleged misstatements and omissions contained in the prospectus
and registration statement used in the offering of the units. In April
1999, the complaint against DLJSC and the other defendants was dismissed.
The plaintiffs have appealed. DLJSC intends to defend itself vigorously
against all the allegations contained in the complaint.
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum Corporation
("NGC"). The debentures were canceled in connection with a Chapter 11 plan
of reorganization for NGC consummated in July 1993. The litigation seeks
compensatory and punitive damages for DLJSC's activities as financial
advisor to NGC in the course of NGC's Chapter 11 proceedings. In March
1999, the Court granted motions for summary judgment filed by DLJSC and the
other defendants. The plaintiffs have appealed. DLJSC intends to defend
itself vigorously against all the allegations contained in the complaint.
In November 1998, three purported class actions were filed in the U.S.
District Court for the Southern District of New York against more than 25
underwriters of initial public offering securities, including DLJSC. The
complaints allege that defendants conspired to fix the "fee" paid for
underwriting initial public offering securities by setting the
underwriters' discount or "spread" at 7%, in violation of the Federal
antitrust laws. The complaints seek treble damages in an unspecified amount
and injunctive relief as well as attorneys' fees and costs. In March 1999,
the plaintiffs filed a consolidated amended complaint. A motion by all
defendants
F-33
<PAGE>
to dismiss the complaints on several grounds is pending. Separately, the
U.S. Department of Justice has issued a Civil Investigative Demand to
several investment banking firms, including DLJSC, seeking documents and
information relating to "alleged" price-fixing with respect to underwriting
spreads in initial public offerings. The Justice Department has not made
any charges against DLJSC or the other investment banking firms. DLJSC is
cooperating with the Justice Department in providing the requested
information and believes that no violation of law by DLJSC has occurred.
Although there can be no assurance, DLJ's management does not believe that
the ultimate resolution of the litigations described above to which DLJSC
is a party will have a material adverse effect on DLJ's consolidated
financial condition. Based upon the information currently available to it,
DLJ's management cannot predict whether or not such litigations will have a
material adverse effect on DLJ's results of operations in any particular
period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings have
been brought on behalf of various alleged classes of claimants and certain
of these claimants seek damages of unspecified amounts. While the ultimate
outcome of such matters cannot be predicted with certainty, in the opinion
of management no such matter is likely to have a material adverse effect on
the Company's consolidated financial position or results of operations.
16) LEASES
The Company has entered into operating leases for office space and certain
other assets, principally information technology equipment and office
furniture and equipment. Future minimum payments under noncancelable leases
for 2000 and the four successive years are $111.2 million, $93.3 million,
$78.3 million, $71.9 million, $66.5 million and $523.7 million thereafter.
Minimum future sublease rental income on these noncancelable leases for
2000 and the four successive years is $5.2 million, $4.1 million, $2.8
million, $2.8 million, $2.8 million and $23.8 million thereafter.
At December 31, 1999, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 2000 and
the four successive years is $120.7 million, $113.5 million, $96.0 million,
$79.7 million, $74.1 million and $354.6 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 1,010.6 $ 772.0 $ 721.5
Commissions........................................ 549.5 478.1 409.6
Short-term debt interest expense................... 16.7 26.1 31.7
Long-term debt interest expense.................... 76.3 84.6 121.2
Amortization of policy acquisition costs........... 314.5 292.7 287.3
Capitalization of policy acquisition costs......... (709.9) (609.1) (508.0)
Writedown of policy acquisition costs.............. 131.7 - -
Rent expense, net of sublease income............... 113.9 100.0 101.8
Cursitor intangible assets writedown............... - - 120.9
Other.............................................. 1,294.0 1,056.8 917.9
------------- ------------ ------------
Total.............................................. $ 2,797.3 $ 2,201.2 $ 2,203.9
================= ================ =================
</TABLE>
F-34
<PAGE>
During 1997, the Company restructured certain operations in connection with
cost reduction programs and recorded a pre-tax provision of $42.4 million.
The amount paid during 1999 associated with cost reduction programs totaled
$15.6 million. At December 31, 1999, the remaining liabilities associated
with cost reduction programs was $8.8 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as shareholder
dividends. Under the New York Insurance Law, the Superintendent has broad
discretion to determine whether the financial condition of a stock life
insurance company would support the payment of dividends to its
shareholders. For 1999, 1998 and 1997, statutory net income (loss) totaled
$547.0 million, $384.4 million and ($351.7) million, respectively.
Statutory surplus, capital stock and Asset Valuation Reserve ("AVR")
totaled $5,570.6 million and $4,728.0 million at December 31, 1999 and
1998, respectively. In September 1999, $150.0 million in dividends were
paid to the Holding Company by Equitable Life, the first such payment since
Equitable Life's demutualization in 1992.
At December 31, 1999, the Insurance Group, in accordance with various
government and state regulations, had $26.8 million of securities deposited
with such government or state agencies.
The differences between statutory surplus and capital stock determined in
accordance with Statutory Accounting Principles ("SAP") and total
shareholder's equity under GAAP are primarily: (a) the inclusion in SAP of
an AVR intended to stabilize surplus from fluctuations in the value of the
investment portfolio; (b) future policy benefits and policyholders' account
balances under SAP differ from GAAP due to differences between actuarial
assumptions and reserving methodologies; (c) certain policy acquisition
costs are expensed under SAP but deferred under GAAP and amortized over
future periods to achieve a matching of revenues and expenses; (d) external
and certain internal costs incurred to obtain or develop internal use
computer software during the application development stage is capitalized
under GAAP but expensed under SAP; (e) Federal income taxes are generally
accrued under SAP based upon revenues and expenses in the Federal income
tax return while under GAAP deferred taxes provide for timing differences
between recognition of revenues and expenses for financial reporting and
income tax purposes; (f) the valuation of assets under SAP and GAAP differ
due to different investment valuation and depreciation methodologies, as
well as the deferral of interest-related realized capital gains and losses
on fixed income investments; and (g) differences in the accrual
methodologies for post-employment and retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services. The
Company's management evaluates the performance of each of these segments
independently and allocates resources based on current and future
requirements of each segment. Management evaluates the performance of each
segment based upon operating results adjusted to exclude the effect of
unusual or non-recurring events and transactions and certain revenue and
expense categories not related to the base operations of the particular
business net of minority interest. Information for all periods is presented
on a comparable basis.
Intersegment investment advisory and other fees of approximately $75.6
million, $61.8 million and $84.1 million for 1999, 1998 and 1997,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued operations
of $.5 million, $.5 million and $4.2 million for 1999, 1998 and 1997,
respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations before
Federal income taxes and cumulative effect of accounting change as reported
on the consolidated statements of earnings and the segments' assets to
total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Segment revenues..................... $ 4,283.0 $ 2,052.7 $ (23.8) $ 6,311.9
Investment (losses) gains............ (199.4) 111.5 - (87.9)
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,083.6 $ 2,164.2 $ (23.8) $ 6,224.0
============= ============ ============ ============
Pre-tax operating earnings........... $ 895.7 $ 427.0 $ - $ 1,322.7
Investment (losses) gains , net of
DAC and other charges.............. (208.4) 110.5 - (97.9)
Non-recurring DAC adjustments........ (131.7) - - (131.7)
Pre-tax minority interest............ - 216.8 - 216.8
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 555.6 $ 754.3 $ - $ 1,309.9
============= ============ ============ ============
Total Assets......................... $ 86,842.7 $ 12,961.7 $ (8.9) $ 99,795.5
============= ============ ============ ============
1998
----
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
============= ============ ============ ============
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains, net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... 730.3 453.5 - 1,183.8
============= ============ ============ ============
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
============= ============ ============ ============
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1997
----
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment (losses) gains............ (318.8) 255.1 - (63.7)
------------- ------------ ------------ ------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
============= ============ ============ ============
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment (losses) gains, net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
============= ============ ============ ============
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
============= ============ ============ ============
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1999 and 1998 are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------- ------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Total Revenues................ $ 1,484.3 $ 1,620.3 $ 1,512.1 $ 1,607.3
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 187.3 $ 222.6 $ 186.5 $ 182.1
============= ============= ============ ============
Net Earnings.................. $ 182.0 $ 221.3 $ 183.1 $ 220.2
============= ============= ============ ============
1998
----
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 212.8 $ 197.0 $ 136.8 $ 158.9
============= ============= ============ ============
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
============= ============= ============ ============
</TABLE>
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1999, the Company's ownership of DLJ interest was
approximately 31.71%. The Company's ownership interest in DLJ will continue
to be reduced upon the exercise of options granted to certain DLJ employees
and the vesting of forfeitable restricted stock units acquired by DLJ
employees. DLJ restricted stock units represent forfeitable rights to
receive approximately 5.2 million shares of DLJ common stock through
February 2000.
The results of operations of DLJ are accounted for on the equity basis and
are included in commissions, fees and other income in the consolidated
statements of earnings. The Company's carrying value of DLJ is included in
investment in and loans to affiliates in the consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the Company's
carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 27,982.4 $ 13,195.1
Securities purchased under resale agreements........................... 29,538.1 20,063.3
Broker-dealer related receivables...................................... 44,998.1 34,264.5
Other assets........................................................... 6,493.5 4,759.3
------------ ------------
Total Assets........................................................... $ 109,012.1 $ 72,282.2
============ ============
Liabilities:
Securities sold under repurchase agreements............................ $ 56,474.4 $ 35,775.6
Broker-dealer related payables......................................... 37,207.4 26,161.5
Short-term and long-term debt.......................................... 6,518.6 3,997.6
Other liabilities...................................................... 4,704.5 3,219.8
------------ ------------
Total liabilities...................................................... 104,904.9 69,154.5
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 3,907.2 2,927.7
------------ ------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 109,012.1 $ 72,282.2
============ ============
DLJ's equity as reported............................................... $ 3,907.2 $ 2,927.7
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 22.9 23.7
The Holding Company's equity ownership in DLJ.......................... (1,341.4) (1,002.4)
Minority interest in DLJ............................................... (1,479.3) (1,118.2)
------------ ------------
The Company's Carrying Value of DLJ.................................... $ 1,109.4 $ 830.8
============ ============
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
Commission, fees and other income..................... $ 4,145.1 $ 3,150.5 $ 2,430.7
Net investment income................................. 2,175.3 2,189.1 1,652.1
Principal Transactions, net........................... 825.9 67.4 557.7
------------ ------------ -------------
Total revenues........................................ 7,146.3 5,407.0 4,640.5
Total expenses including income taxes................. 6,545.6 5,036.2 4,232.2
------------ ------------ -------------
Net earnings.......................................... 600.7 370.8 408.3
Dividends on preferred stock.......................... 21.2 21.3 12.2
------------ ------------ -------------
Earnings Applicable to Common Shares.................. $ 579.5 $ 349.5 $ 396.1
============ ============ =============
DLJ's earnings applicable to common shares as
reported............................................ $ 579.5 $ 349.5 $ 396.1
Amortization of cost in excess of net assets
acquired in 1985.................................... (.9) (.8) (1.3)
The Holding Company's equity in DLJ's earnings........ (222.7) (136.8) (156.8)
Minority interest in DLJ.............................. (172.9) (99.5) (109.1)
------------ ------------ -------------
The Company's Equity in DLJ's Earnings................ $ 183.0 $ 112.4 $ 128.9
============ ============ =============
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock incentive plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option plans
for certain employees. The Company has elected to continue to account for
stock-based compensation using the intrinsic value method prescribed in APB
No. 25. Had compensation expense for the Holding Company, DLJ and Alliance
Stock Option Incentive Plan options been determined based on SFAS No. 123's
fair value based method, the Company's pro forma net earnings for 1999,
1998 and 1997 would have been $757.1 million, $678.4 million and $426.3
million, respectively.
The fair values of options granted after December 31, 1994, used as a basis
for the pro forma disclosures above, were estimated as of the grant dates
using the Black-Scholes option pricing model. The option pricing
assumptions for 1999, 1998 and 1997 follow:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
------------------------------ ------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
--------- ---------- --------- ---------- --------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.31% 0.32% 0.48% 0.56% 0.69% 0.86% 8.70% 6.50% 8.00%
Expected volatility. 28% 28% 20% 36% 40% 33% 29% 29% 26%
Risk-free interest
rate.............. 5.46% 5.48% 5.99% 5.06% 5.53% 5.96% 5.70% 4.40% 5.70%
Expected life
in years.......... 5 5 5 5 5 5 7 7.2 7.2
Weighted average
fair value per
option at
grant-date........ $10.78 $11.32 $6.13 $17.19 $16.27 $10.81 $3.88 $3.86 $2.18
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1997........ 13.4 $10.40 22.2 $14.03 10.0 $ 9.54
Granted................ 6.4 $20.93 6.4 $30.54 2.2 $18.28
Exercised.............. (3.2) $10.13 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.8) $11.72 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 15.8 $14.53 28.2 $17.78 10.6 $11.41
Granted................ 8.6 $33.13 1.5 $38.59 2.8 $26.28
Exercised.............. (2.2) $10.59 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.8) $23.51 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 21.4 $22.00 28.2 $19.04 12.3 $14.92
Granted................ 4.3 $31.70 4.8 $45.23 2.0 $30.18
Exercised.............. (2.4) $13.26 (2.2) $34.61 (1.5) $ 9.51
Forfeited.............. (.6) $24.29 (.1) $15.85 (.3) $17.79
--------------- ------------- ---------------
Balance as of
December 31, 1999...... 22.7 $24.60 30.7 $23.30 12.5 $17.95
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31, 1999
follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------------------- -------------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
- -------------------- ------------------ ---------------- --------------- ------------------ ----------------
Holding
Company
- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9.06 -$13.88 5.6 4.2 $10.50 10.9 $18.98
$14.25 -$22.63 5.2 7.7 $20.95 - -
$25.32 -$34.59 8.2 8.7 $29.08 - -
$40.97 -$41.28 3.7 8.6 $41.28 - -
----------------- ------------------
$ 9.06 -$41.28 22.7 7.3 $24.60 10.9 $18.98
================= ================ =============== ================== ================
DLJ
- --------------------
$13.50 -$25.99 20.2 8.4 $14.61 20.6 $16.62
$26.00 -$38.99 4.9 7.8 $33.99 - -
$39.00 -$52.875 4.8 9.0 $43.28 - -
$53.00 -$76.875 .8 9.7 $57.09 - -
----------------- ------------------
$13.50 -$76.875 30.7 8.4 $23.30 20.6 $16.62
================= ================ =============== ================== ================
Alliance
- --------------------
$ 3.66 -$ 9.81 2.6 3.8 $ 8.31 2.2 $ 8.12
$ 9.88 -$12.56 3.3 5.6 $11.16 2.6 $10.92
$13.75 -$18.47 1.8 7.9 $18.34 .7 $18.34
$18.78 -$26.31 2.8 8.9 $26.16 .6 $26.06
$27.31 -$30.94 2.0 9.9 $30.24 - -
----------------- ------------------
$ 3.66 -$30.94 12.5 7.0 $17.95 6.1 $12.12
================= ================ =============== ================== ================
</TABLE>
F-41
<PAGE>
Appendix I: Our data on market performance
In reports or other communications to policyowners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those of other insurance company separate accounts or mutual funds included
in the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc.
or similar investment services that monitor the performance of insurance company
separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective policyowners
advertisements or other communications that include evaluations of a variable
investment option or Portfolio by nationally recognized financial publications.
Examples of such publications are:
Barron's
Morningstar's Variable Annuities/Life
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
121315 61
<PAGE>
Lipper Analytical Services, Inc. (Lipper) compiles performance data for
peer universes of Portfolios with similar investment objectives in its Lipper
Variable Insurance Products Performance Analysis Service (Lipper Survey).
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over
800 mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "Separate Account" universe reports performance data net of
investment management fees, direct operating expenses and asset-based charges
applicable under variable insurance and annuity contracts; and
o The "Mutual Fund" universe reports performance net only of investment
management fees and direct operating expenses, and therefore reflects only
charges that relate to the underlying mutual fund.
The Morningstar Report consists of nearly 700 variable life and annuity
portfolios, all of which report their data net of investment management fees,
direct operating expenses and separate account level charges.
LONG-TERM MARKET TRENDS
The following chart presents historical return trends for various types
of securities. The information presented does not directly relate to the
performance of our variable investment options or the Trust. Nevertheless, it
may help you gain a perspective on the potential returns of different asset
classes over different periods of time. By combining this information with your
knowledge of your own financial needs, you may be able to better determine how
you wish to allocate your Accumulator Life premium(s).
Historically, the investment performance of common stocks over the long
term has generally been superior to that of long- or short-term debt securities.
However, common stocks have also experienced dramatic changes in value over
short periods of time. One of our variable investment options that invests
primarily in common stocks may, therefore, be a desirable selection for owners
who are willing to accept such risks. If, on the other hand, you wish to limit
your short-term risk, you may find it preferable to allocate a smaller
percentage of net premiums to those options that invest primarily in common
stock. All investments in securities, whether equity or debt, involve varying
degrees of risk. They also offer varying degrees of potential reward.
The chart below illustrates the average annual compound rates of return
over selected time periods between December 31, 1926 and December 31, 1999 for
the types of securities indicated in the chart. These rates of return assume the
reinvestment of dividends, capital gains and interest. The Consumer Price Index
is also shown as a
121315 62
<PAGE>
measure of inflation for comparison purposes. The investment return information
presented is an historical record of unmanaged categories of securities. In
addition, the rates of return shown do not reflect either (1) investment
management fees and expenses, or (2) costs and charges associated with ownership
of a variable life insurance policy.
The rates of return illustrated do not represent returns of our
variable investment options or the Portfolios and do not constitute a
representation that the performance of those options or the Portfolios will
correspond to rates of return such as those illustrated in the chart.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN
FOR THE FOLLOWING PERIODS COMMON LONG-TERM LONG-TERM INTERMEDIATE- U.S. TREASURY CONSUMER
ENDING STOCKS GOVERNMENT CORPORATE TERM GOV'T BILLS PRICE INDEX
December 31, 1999 BONDS BONDS BONDS
<S> <C> <C> <C> <C> <C> <C>
1 YEAR 21.04% (8.96)% (7.45)% (1.77)% 4.68% 2.81%
3 YEARS 27.56% 6.04% 5.01% 5.47% 4.93% 2.04%
5 YEARS 28.55% 9.24% 8.35% 6.95% 5.12% 2.39%
10 YEARS 18.20% 8.79% 8.36% 7.20% 4.92% 2.94%
20 YEARS 17.87% 10.69% 10.66% 9.53% 6.89% 4.01%
30 YEARS 13.72% 8.94% 9.17% 8.68% 6.69% 5.12%
40 YEARS 12.22% 7.01% 7.24% 7.35% 5.98% 4.46%
50 YEARS 13.61% 5.56% 5.97% 6.12% 5.15% 4.01%
60 YEARS 12.86% 5.17% 5.42% 5.39% 4.34% 4.24%
SINCE 1926 11.35% 5.12% 5.61% 5.22% 3.79% 3.07%
INFLATION ADJUSTED SINCE 8.03% 1.98% 2.46% 2.08% 0.69% 0.00%
1926
</TABLE>
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 2000
YEARBOOK (Trademark), Ibbotson Associates, Inc., Chicago. All rights reserved.
Common Stocks (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
Long-Term Government Bonds -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
Long-Term Corporate Bonds -- For the period 1969-1999, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers' Index was backdated using Salomon Brothers'
monthly yield data and a methodology similar to that used by Salomon for
1969-1999; for the period 1926-1945, the Standard and Poor's monthly High-Grade
Corporate Composite yield data were used, assuming a 4 percent coupon and a
twenty-year maturity.
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<PAGE>
Intermediate-Term Government Bonds -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. Treasury Bills -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
Consumer Price Index -- Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
121315 64
<PAGE>
Appendix II: An index of key words and phrases
This index should help you locate more information on the terms used in
this prospectus.
PAGE
account value
Accumulator Life
Administrative Office
age
Allocation Date
amount at risk
anniversary
assign; assignment
automatic transfer service
AXA Advisors, LLC
AXA Financial, Inc.
basis
beneficiary
business day
cash surrender value
Code
collateral
cost of insurance charge
cost of insurance rates
day
default
dollar cost averaging service
EQ Advisors Trust
Equitable Life
Equitable Access Account
grace period
guaranteed minimum death benefit
insured person
Investment Funds
issue date
lapse
loan, loan interest
modified endowment contract
month, year
monthly deduction
net cash surrender value
our
owner
partial withdrawal
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<PAGE>
payment option
policy
Portfolio
premium payment
prospectus
rebalancing
receive
restore, restoration
SEC
Separate Account FP
state
subaccount
surrender
surrender charge
telephone transfer
transfers
Trust
units
unit values
us
variable investment option
we
you, your
121315 66
<PAGE>
ACCUMULATOR LIFE (Service Mark)
A modified single premium variable life
insurance policy
PROSPECTUS DATED MAY 12, 2000
Please read this prospectus and keep it for future reference. It contains
important information that you should know before purchasing, or taking any
other action, under a policy. Also, at the end of this prospectus you will find
attached the prospectus for EQ Advisors Trust, which contains important
information about its Portfolios.
This prospectus describes many aspects of an Accumulator Life policy,
but is not itself a policy. The policy is the actual contract that determines
your benefits and obligations under Accumulator Life. To make this prospectus
easier to read, we sometimes use different words than the policy. Equitable Life
or your financial professional can provide any further explanation about your
policy.
WHAT IS ACCUMULATOR LIFE?
Accumulator Life is issued by Equitable Life. It provides life
insurance coverage, plus the opportunity for you to earn a return in one or more
of the following variable investment options:
VARIABLE INVESTMENT OPTIONS:
o EQ/Aggressive Stock(1)
o Alliance Money Market
o Alliance High Yield
o Alliance Common Stock
o Alliance Small Cap Growth
o EQ/Alliance Premier Growth
o EQ/Alliance Technology(2)
o BT Equity 500 Index
o BT Small Company Index
o BT International Equity Index
- --------
1 Formerly named "Alliance Aggressive Stock."
2 Anticipated to become available on or about May 22, 2000. This option may
not be available in California.
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<PAGE>
o Capital Guardian U.S. Equity
o Capital Guardian Research
o Capital Guardian International
o EQ/Evergreen
o EQ/Evergreen Foundation
o J. P. Morgan Core Bond(3)
o Lazard Large Cap Value
o Lazard Small Cap Value
o Mercury Basic Value Equity(4)
o Mercury World Strategy(5)
o MFS Growth with Income
o MFS Research
o MFS Emerging Growth Companies
o Morgan Stanley Emerging Markets Equity
o EQ/Putnam Growth & Income Value
o EQ/Putnam Investors Growth
o EQ/Putnam International Equity
Amounts that you allocate under your policy to any of the variable
investment options are invested in a corresponding "Portfolio" that is part of
EQ Advisors Trust, a mutual fund. Your investment results in a variable
investment option will depend on those of the related Portfolio. Any gains will
generally be tax deferred, and the life insurance benefits we pay if the
policy's insured person dies will generally be income tax free.
Your Accumulator Life policy likely will be a "modified endowment
contract," which may subject you to special tax rules and penalties on any
taxable distributions, including loans. See "Tax information" later in this
prospectus.
- --------
3 Formerly named "JPM Core Bond."
4 Formerly named "Merrill Lynch Basic Value Equity."
5 Formerly named "Merrill Lynch World Strategy."
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<PAGE>
OTHER CHOICES YOU HAVE. You can tailor the policy to your needs. For example,
subject to our rules, you decide (1) how much you contribute to your policy,
which determines how much insurance coverage you initially have, (2) whether to
borrow or withdraw amounts you have accumulated and (3) whether to take
advantage of "free withdrawals," which do not incur surrender charges.
Additionally, if this policy is issued as the result of an exchange of another
policy under Section 1035 of the Internal Revenue Code, you have the option of
carrying over any loan from the exchanged policy to this Accumulator Life
policy, subject to our approval. The amount of loan you may carry over is
limited to 50% of your initial premium.
Your financial professional can provide you with information about
all forms of life insurance available from us and help you decide which may best
meet your needs. Replacing existing insurance with Accumulator Life or another
policy may not be to your advantage.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE POLICIES
ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY. THEY ARE NOT DEPOSITS OR OTHER
OBLIGATIONS OF ANY BANK AND ARE NOT BANK GUARANTEED. THEY ARE SUBJECT TO
INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
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<PAGE>
Contents of this prospectus
Accumulator Life
What is Accumulator Life? Cover
Who is Equitable Life?
How to reach us
Charges and expenses you will pay
Risks you should consider
Policy features and benefits
How you pay for your policy
Your death benefit guarantee
Policy "lapse" and termination
About your death benefit
Variable investment options within your policy
Your options for receiving policy proceeds
Your right to cancel within a certain number of days
Variations among Accumulator Life policies
Determining your policy's value
Your account value
Transferring your money among our variable investment options
Transfers you can make
Telephone transfers
Our dollar cost averaging service
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<PAGE>
Our asset rebalancing service
Accessing your money
Borrowing from your policy
Making withdrawals from your policy
Surrendering your policy for its net cash surrender value
Tax information
Basic tax treatment for you and your beneficiary
Tax treatment of distributions to you
Effect of policy on interest deductions taken by business entities
Requirement that we diversify investments
Estate, gift, and generation-skipping taxes
Employee benefit programs
Our taxes
When we withhold taxes from distributions
Possibility of future tax changes
More information about procedures that apply to your policy
Ways to make premium and loan payments
Requirements for surrender requests
Ways we pay policy proceeds
Assigning your policy
Dates and prices at which policy events occur
Policy issuance
Gender-neutral policies
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<PAGE>
More information about other matters
Your voting privileges
About our Separate Account FP
About our general account
Transfers of your account value
Telephone requests
Deducting policy charges
Suicide and certain misstatements
When we pay policy proceeds
Changes we can make
Reports we will send you
Legal proceedings
Illustrations of policy benefits
SEC registration statement
How we market the policies
Insurance regulation that applies to Equitable Life
Directors and principal officers
Financial statements of Separate Account FP and Equitable Life
Separate Account FP financial statements FSA-1
Equitable Life financial statements F-1
Appendices
121315v6
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<PAGE>
I--Our data on market performance A-1
II--An index of key words and phrases B-1
EQ Advisors Trust Prospectus (follows after page B-1 of this prospectus, but is
not a part of this prospectus)
[THE FOLLOWING ARE THE FOOTNOTES TO THE TABLE OF CONTENTS PAGE:]
"We," "our" and "us" refers to Equitable Life. "Financial
professional" means the registered representative who is offering you this
policy.
When we address the reader of this prospectus with words such as
"you" and "your," we mean the person or persons having the right or
responsibility that the prospectus is discussing at that point. This usually is
the policy's owner. If a policy has more than one owner, all owners must join in
the exercise of any rights an owner has under the policy, and the word "owner"
therefore refers to all owners.
When we use the word "state," we also mean any other local
jurisdiction whose laws or regulations affect a policy.
We do not offer Accumulator Life in all states. This prospectus does
not offer Accumulator Life anywhere such offers are not lawful. Equitable Life
does not authorize any information or representation about the offering other
than that contained or incorporated in this prospectus, in any current
supplements thereto, or in any related sales materials authorized by Equitable
Life.
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<PAGE>
Who is Equitable Life?
We are The Equitable Life Assurance Society of the United States
("Equitable Life"), a New York stock life insurance corporation. We have been
doing business since 1859. Equitable Life is a subsidiary of AXA Financial, Inc.
(previously The Equitable Companies Incorporated). The majority shareholder of
AXA Financial, Inc. is AXA, a French holding company for an international group
of insurance and related financial services companies. As a majority
shareholder, and under its other arrangements with Equitable Life and Equitable
Life's parent, AXA exercises significant influence over the operations and
capital structure of Equitable Life and its parent. No company other than
Equitable Life, however, has any legal responsibility to pay amounts that
Equitable Life owes under the policies.
AXA Financial, Inc. and its consolidated subsidiaries managed
approximately $462.7 billion in assets as of December 31, 1999. For more than
100 years Equitable Life has been among the largest insurance companies in the
United States. We are licensed to sell life insurance and annuities in all fifty
states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Our
home office is located at 1290 Avenue of the Americas, New York, N.Y. 10104.
HOW TO REACH US
To obtain (1) any forms you need for communicating with us, (2) unit
values and other values under your policy, and (3) any other information or
materials that we provide in connection with your policy or the Portfolios, you
can contact us
By mail:
at the Post Office Box for our Administrative Office:
Equitable Life Client Services
Radio City Station
P.O. Box 808
New York, New York 10101-0808
By express delivery only:
at the Street Address for our Administrative Office:
Equitable Life Client Services
135 W. 50th St., 10th Fl.
New York, New York 10020
By toll-free phone:
1-888-855-5100
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<PAGE>
By fax:
1-212-641-7075
By Internet:
Our Web site (www.equitable.com) can also provide you information. You can
access your policy information through our Web site by enrolling in EQAccess.
We require that the following types of communications be on specific
forms we provide for that purpose:
(1) request for dollar cost averaging (our automatic transfer
service);
(2) authorization for telephone transfers by a person who is not both
the insured person and the owner;
(3) request for asset rebalancing; and
(4) designation of new policy owner(s).
We also have specific forms that we recommend you use for the following:
(a) policy surrenders;
(b) address changes;
(c) beneficiary changes;
(d) transfers between variable investment options; and
(e) changes in allocation percentages for loan repayments, deductions
and any additional premium payment.
You can change your allocation percentages and/or transfer among
investment options (1) by toll-free phone or (2) over the Internet, through
EQAccess. This feature is anticipated to be available in EQAccess by the end of
2000. For more information about transaction requests you can make by phone or
over the Internet, see "Telephone and EQAccess transfers" and "Telephone and
EQAccess requests" later in this prospectus.
Except for properly authorized telephone or Internet transactions,
any notice or request that does not use our standard form must be in writing. It
must be dated and signed by you and should also specify your name, the insured
person's name (if different), your policy number, and adequate details about the
notice you wish to give or other action you wish us to take. We may require you
to return your policy to us before we make certain policy changes that you may
request.
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<PAGE>
The proper person to sign forms, notices and requests would normally
be the owner or any other person that our procedures permit to exercise the
right or privilege in question. If there are joint owners all must sign. Any
irrevocable beneficiary or assignee that we have on our records also must sign
certain types of requests.
You should send all requests and notices to our Administrative Office
at the addresses specified above. We will also accept requests and notices by
fax at the above number, if we believe them to be genuine. We reserve the right,
however, to require an original signature before acting on any faxed item. You
must send all payments to our Administrative Office at the above addresses;
except that you should send any payments for which we have billed you to the
address on the billing notice.
We reserve the right to limit access to telephone, Internet or fax
services if we determine that you are engaged in a market timing strategy. See
"Transfers of your account value - Market timing" later in this prospectus.
121315v6
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<PAGE>
Charges and expenses you will pay
TABLE OF POLICY CHARGES
This table shows the charges that we deduct under the terms of your
policy. For more information about some of these charges, see "Deducting policy
charges" later in this prospectus.
121315v6
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<PAGE>
TABLE OF POLICY CHARGES
<TABLE>
<S> <C>
CHARGES WE DEDUCT FROM AMOUNTS
YOU CONTRIBUTE TO YOUR POLICY: None
CHARGES WE DEDUCT FROM
YOUR POLICY'S VALUE EACH MONTH:
Cost of insurance charges. . . . . . . . . . . . . . . . . . . . The maximum charges are specified in your policy.
We currently limit this charge to 1.15% (effective
annual rate) of your policy's account value(1),
unless the maximum charge specified by your policy
is less. However, we may increase this 1.15% rate
up to the maximum charges specified in your
policy. (2)(3)
Charge for administration and taxes. . . . . . . . . . . . . . . .50% (effective annual rate) of your policy's
account value. (3)
Guaranteed minimum death benefit charge. . . . . . . . . . . . . .20% (effective annual rate) of your policy's
account value. (We may increase this rate up to
.50%.) (3)
CHARGES WE DEDUCT FROM YOUR POLICY'S UNIT VALUES EACH DAY:
Mortality and expense risk charge. . . . . . . . . . . . . . . . 1.35% (effective annual rate) of the value you
have in our variable investment options.
</TABLE>
121315v6
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<PAGE>
<TABLE>
<S> <C> <C>
CHARGES WE DEDUCT FROM YOUR ACCOUNT VALUE
AT THE TIME OF THE TRANSACTION:
Surrender (turning in) of your policy
during its first 9 years . . . . . . . . . . . . . . . . . . . . A surrender charge based on the policy's age and a
percentage of the initial premium(4), as follows:
Policy Year Percentage Charge
1 10%
2 9.5
3 9
4 8.5
5 8
6 7
7 5
8 3
9 1
10 and later 0
Partial withdrawal during the first 9 years. . . . . . . . . . . A surrender charge equal to the applicable
percentage specified above, applied to amounts of
partial withdrawals in any policy year that
cumulatively exceed 15% of: your policy account
value less outstanding loans and loan interest, as
of the end of the previous policy year. (5)
Transfers among investment options . . . . . . . . . . . . . . . No charge for any transfer. (We may, however,
increase this charge up to $25 per transfer.) (6)
Requesting a policy illustration . . . . . . . . . . . . . . . . No charge. (We may, however, increase this charge
up to $25 per illustration request, if you request
more than one in any policy year.)
</TABLE>
- ------------------------
(1) "Account value" is defined below in "Determining your policy's value".
The account value used to determine the amount of each monthly charge
is the account value on the date the charge is due.
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<PAGE>
(2) See "Monthly cost of insurance charge" later in this prospectus.
(3) Not applicable after the insured person reaches age 100.
(4) For purposes of this calculation, the amount of the initial premium
would be reduced by the amounts of any prior partial withdrawals that
were subject to a surrender charge.
(5) Over the life of your policy, the cumulative amount of your partial
withdrawals on which we impose any surrender charge will not exceed
the amount of your initial premium.
(6) No charge, however, would ever apply to a transfer made through our
dollar cost averaging or asset rebalancing services.
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<PAGE>
YOU ALSO BEAR YOUR PROPORTIONATE SHARE OF ALL FEES AND EXPENSES PAID
BY A "PORTFOLIO" THAT CORRESPONDS TO ANY VARIABLE INVESTMENT OPTION YOU ARE
USING:
This table shows the fees and expenses paid by each Portfolio for the
year ended December 31, 1999. These fees and expenses are reflected in the
Portfolio's net asset value each day. Therefore, they reduce the investment
return of the Portfolio and of the related variable investment option. Actual
fees and expenses are likely to fluctuate from year to year. All figures are
expressed as an annual percentage of each Portfolio's daily average net assets.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
1999 FEES AND EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT 12B-1 FEE OTHER TOTAL FEE WAIVERS NET TOTAL
FEE(1) EXPENSES(2) ANNUAL AND/OR EXPENSE ANNUAL
EXPENSES REIMBURSEMENTS(3) EXPENSES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.60% 0.25% 0.04% 0.89% -- 0.89%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Common Stock 0.46% 0.25% 0.04% 0.75% -- 0.75%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance High Yield 0.60% 0.25% 0.05% 0.90% -- 0.90%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Money Market 0.34% 0.25% 0.05% 0.64% -- 0.64%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Premier Growth(4) 0.90% 0.25% 0.23% 1.38% 0.23% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Small Cap Growth(5) 0.75% 0.25% 0.07% 1.07% -- 1.07%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Alliance Technology(6) 0.90% 0.25% 0.10% 1.25% 0.10% 1.15%
- ----------------------------------------------------------------------------------------------------------------------------------
BT Equity 500 Index 0.25% 0.25% 0.18% 0.68% 0.08% 0.60%
- ----------------------------------------------------------------------------------------------------------------------------------
BT Small Company Index 0.25% 0.25% 0.71% 1.21% 0.46% 0.75%
- ----------------------------------------------------------------------------------------------------------------------------------
BT International Equity Index 0.35% 0.25% 0.49% 1.09% 0.09% 1.00%
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian International(4) 0.85% 0.25% 0.66% 1.76% 0.56% 1.20%
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian Research(4) 0.65% 0.25% 0.47% 1.37% 0.42% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Guardian U.S. Equity(4) 0.65% 0.25% 0.34% 1.24% 0.29% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen 0.65% 0.25% 1.87% 2.77% 1.82% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Evergreen Foundation 0.60% 0.25% 1.07% 1.92% 0.97% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Core Bond 0.45% 0.25% 0.20% 0.90% 0.10% 0.80%
- ----------------------------------------------------------------------------------------------------------------------------------
Lazard Large Cap Value 0.65% 0.25% 0.21% 1.11% 0.16% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
Lazard Small Cap Value 0.75% 0.25% 0.26% 1.26% 0.16% 1.10%
- ----------------------------------------------------------------------------------------------------------------------------------
Mercury Basic Value Equity 0.60% 0.25% 0.17% 1.02% 0.07% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
Mercury World Strategy 0.70% 0.25% 0.46% 1.41% 0.21% 1.20%
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Emerging Growth Companies 0.65% 0.25% 0.17% 1.07% 0.07% 1.00%
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Growth with Income 0.60% 0.25% 0.37% 1.22% 0.27% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
MFS Research 0.65% 0.25% 0.17% 1.07% 0.12% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity 1.15% 0.25% 1.00% 2.40% 0.65% 1.75%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Growth & Income Value 0.60% 0.25% 0.16% 1.01% 0.06% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam Investors Growth 0.65% 0.25% 0.19% 1.09% 0.14% 0.95%
- ----------------------------------------------------------------------------------------------------------------------------------
EQ/Putnam International Equity 0.85% 0.25% 0.32% 1.42% 0.17% 1.25%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The management fees shown reflect revised management fees, effective on or
about May 1, 2000, which were approved by shareholders. The management fees
shown for EQ/Putnam Growth & Income Value and Lazard Large Cap Value do not
reflect the waiver of a portion of each Portfolio's investment management fees
that is currently in effect. The management fee for each Portfolio cannot be
increased without a vote of each Portfolio's shareholders.
121315v6
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<PAGE>
(2) On October 18, 1999, the Alliance Portfolios (other than EQ/Alliance Premier
Growth and EQ/Alliance Technology) became part of EQ Advisors Trust. Other
Expenses for these Portfolios have been restated to reflect the estimated
expenses that would have been incurred, had these Portfolios been portfolios of
EQ Advisors Trust for the full year ended December 31, 1999. The restated
expenses reflect an increase of 0.01% for each of these Portfolios.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to certain Portfolios, which is effective from
May 1, 2000 through April 30, 2001. Under this Agreement, Equitable Life has
agreed to waive or limit its fees and assume other expenses of each of these
Portfolios, if necessary, in an amount that limits each Portfolio's Total Annual
Expenses (exclusive of interest, taxes, brokerage commissions, capitalized
expenditures and extraordinary expenses) to not more than the amounts specified
above as Net Total Annual Expenses. Portfolios that show "__" in this column
have no expense limitation arrangement in effect. See the EQ Advisors Trust
prospectus for more information about the Expense Limitation Agreement. The
expense limitations for the BT Equity 500 Index, MFS Emerging Growth Companies,
MFS Growth with Income, MFS Research, Mercury Basic Value Equity, EQ/Putnam
International Equity and EQ/Putnam Growth & Income Value Portfolios reflect an
increase effective on May 1, 2000. The expense limitation for the EQ/Evergreen
and Lazard Small Cap Value Portfolios reflects a decrease effective on May 1,
2000.
(4) Initial seed capital was invested in the EQ/Alliance Premier Growth, Capital
Guardian U.S. Equity, Capital Guardian Research and Capital Guardian
International Portfolios on April 30, 1999; thus, Other Expenses for these
Portfolios have been estimated.
(5) Prior to October 18, 1999, Total Annual Expenses for the Alliance Small Cap
Growth Portfolio were limited to 1.20% under an expense limitation arrangement
which is no longer in effect. The amounts shown have been restated to reflect
the expenses that would have been incurred in 1999, absent the expense
limitation arrangement.
(6) Expenses shown are based on estimates for 2000. Initial seed capital was
invested in the EQ/Alliance Technology Portfolio on May 2, 2000.
HOW WE ALLOCATE CHARGES AMONG YOUR VARIABLE INVESTMENT OPTIONS
Generally, all monthly charges will be deducted in the same proportion
as the allocation that you provide in your policy application, unless you
instruct us otherwise. If we cannot deduct the charge as your most current
instructions direct, we will allocate the deduction among your variable
investment options proportionately to your value in each.
CHANGES IN CHARGES
We reserve the right in the future to (1) make a charge for certain
taxes or reserves set aside for taxes (see "Our taxes" below), (2) make a charge
for the operating expenses of our variable investment options (including,
without limitation, SEC registration fees and related legal counsel fees and
auditing fees), (3) make a charge of up to $25 for each transfer among variable
investment options that you make, (4) make a charge of up to $25 each time you
request a policy illustration, if you request more than one in any policy year
or (5) modify your monthly cost of insurance charge or your guaranteed minimum
death benefit charge, but not above the maximum rates stated in your policy.
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Any changes that we make in our current charges or charge rates will
be by class of insured person and will be based on changes in future
expectations about such factors as investment earnings, mortality experience,
the length of time policies will remain in effect, expenses and taxes. Any
changes in charges may apply to then outstanding policies, as well as to new
policies, but we will not raise any charges above any maximums discussed in this
prospectus and shown in your policy.
Risks you should consider
Some of the principal risks of investing in a policy are as follows:
o Your policy's account value and death benefit will increase or
decrease based, in part, on the performance of your variable investment options.
o You may have to pay a surrender charge, taxes or tax penalties if
you make a surrender or partial withdrawal under a policy or take a policy loan.
o We can increase certain charges without your consent, within limits
stated in your policy. See the "Changes in charges" above, which specifies which
charges can be increased.
Your policy permits other transactions that also have risks. These
and other risks and benefits of investing in a policy are discussed in detail
throughout this prospectus.
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Section 1
Policy features and benefits
HOW YOU PAY FOR YOUR POLICY
INITIAL PREMIUM. We call the amount you contribute to your policy a "premium."
The minimum premium we require is $25,000. This includes any amount of loans
that are being "carried over" from a previous policy. See "Loans transferred
from an old policy" below. The amount of insurance initially provided by your
policy is based on the amount of your premium. Once you make your initial
premium payment under your policy, you may only make one additional premium
payment, subject to the conditions below.
ADDITIONAL PREMIUM. On your 10th policy anniversary, if your death benefit is
below the initial death benefit, subject to our approval as specified below, you
may make one additional premium payment. The amount of the additional premium is
limited to an amount that will restore your initial death benefit. (See "About
your death benefit" below for a discussion of how your death benefit can vary
over time.)
This premium must be received by us within 60 days after your 10th
policy anniversary. Any premium payment received before or after this period, or
any premium payment in excess of the permitted amount, will be returned to you.
You must provide us with satisfactory evidence of insurability for us
to approve this additional payment. We also may refuse to accept any additional
premium payment if this would cause the policy to fail to qualify as life
insurance under federal tax law. See "Tax Information" for a discussion of the
tax consequences of making this additional payment.
SIMPLIFIED QUALIFICATION FOR COVERAGE. We will use a simplified process to
qualify many insured persons for coverage (the "underwriting process") under the
Accumulator Life policies. This process reduces underwriting questions and
requirements. The underwriting procedures we use in any particular case,
however, will depend on the age of the insured person, the amount of the premium
payment and the other risk characteristics of the insured person, and may
involve our full underwriting process.
If we accept your application to purchase Accumulator Life, the cost
of your insurance coverage will be the same regardless of the extent to which we
use a simplified underwriting process in your case. The cost of insurance rate
will be the same for all insured persons of the same gender and age, regardless
of whether they are tobacco users and regardless of their other insurance risk
characteristics. Therefore, you may be able to obtain more economical coverage
by purchasing a policy that uses more traditional underwriting procedures than
Accumulator Life, if the insured person is willing to undergo such procedures
and has relatively favorable insurance risk characteristics. You may consult
your financial professional for further information.
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LOANS TRANSFERRED FROM AN OLD POLICY. Subject to our discretion and
administrative procedures, we may permit you to pay for your Accumulator Life
policy by an exchange of an existing life insurance policy. We may also permit
you to transfer (or carry over) any existing loan from your old policy to your
new Accumulator Life policy. See "Borrowing from your policy" below for more
information regarding these types of loans.
YOUR DEATH BENEFIT GUARANTEE
Provided that your policy does not have an outstanding loan, we
guarantee that your policy will not terminate, even if your policy's "net cash
surrender value" is not sufficient to pay a monthly deduction that has become
due. ("Net cash surrender value" is explained under "Surrendering your policy
for its net cash surrender value" below.) In this circumstance, we will waive
any monthly deductions (for cost of insurance charges, the charge for
administration and taxes and the guaranteed minimum death benefit charge) in
excess of your policy's account value. We guarantee that your death benefit will
not be less than the guaranteed minimum death benefit, regardless of investment
performance, provided you have no outstanding loans. (See the discussions of
death benefit and guaranteed minimum death benefit below.)
POLICY "LAPSE" AND TERMINATION
If you have an outstanding loan, your policy will lapse (also
referred to in your policy as "default") if it does not have enough "net cash
surrender value" to pay your policy's monthly charges when due. If this occurs,
you will have a 61-day grace period during which you will have to pay a minimum
specified amount to keep your policy from terminating. This amount equals the
lesser of (1) the amount we estimate is needed to increase your net cash
surrender value enough to pay three months of charges (without regard to loan
interest or investment performance) or (2) the amount needed to repay your loan
and loan interest. We will decline any payment less than the minimum specified
amount and treat amounts in excess of this amount as an additional loan
repayment. Amounts in excess of your outstanding loan and accrued interest will
be returned to you.
We will mail a notice to you at your last known address if your policy
lapses and enters a grace period. The grace period will start on the date the
notice is mailed. You may not make any transfers or request any other policy
changes during a grace period. If we receive the amount requested before the end
of the grace period, but due to poor investment performance your net cash
surrender value is still insufficient to pay your policy's monthly deductions,
and there is still a loan outstanding, we will send you a written notice that a
new 61-day grace period has begun (starting on the date that the second notice
is mailed) and request an additional payment. If we do not receive your required
payment by the end of a grace period, your policy will terminate without value
and all coverage under your policy will cease. We will mail an additional notice
to you if your policy terminates.
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You may owe taxes (and tax penalties) if your policy terminates while
you have a loan outstanding, even though you receive no additional money from
your policy at that time. See "Tax information," below.
RESTORING A TERMINATED POLICY. To have your policy "restored" (put back in
force), you must apply within six months after the date of termination. In some
states, you may have a longer period of time. You must also present evidence of
insurability satisfactory to us and make the required payment (which will
include paying back your policy loan in full). Your policy contains additional
information about the required payment and about the values and terms of the
policy after it is restored.
ABOUT YOUR DEATH BENEFIT
In your application to buy an Accumulator Life policy, you tell us
the amount of the premium you want to pay. This determines the amount of your
initial death benefit, as well as your initial guaranteed minimum death benefit.
If the insured person dies, we pay a life insurance "death benefit"
to the "beneficiary" you have named. The death benefit under your policy equals
the greater of (i) the policy's guaranteed minimum death benefit (as described
below) on the date of the insured person's death or (ii) the policy's "account
value" on the date of the insured person's death multiplied by a factor
specified in your policy. The factor depends on the insured person's age and
gender.
Representative factors are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
AGE:* 35 40 45 50 55 60 70 80 90 99 - OVER
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FEMALE: 4.646 3.940 3.363 2.886 2.489 2.157 1.647 1.319 1.140 1.025
- ----------------------------------------------------------------------------------------------------------------------------
MALE: 3.971 3.370 2.877 2.472 2.140 1.873 1.488 1.256 1.128 1.025
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the policy year of the insured person's death.
Your policy's "account value" is the total of the amounts that you
have in the variable investment options, as well as amounts we are holding to
secure any outstanding policy loans (Account value is discussed in more detail
under "Determining your policy's value" below.) Because the amount of the death
benefit is generally based on your policy's account value, the amount of death
benefit generally changes from day to day, as many factors (including investment
performance, charges and partial withdrawals) affect your policy's account
value. As set forth above, the death benefit also depends on the death benefit
factor for the insured person's age at death. This factor decreases as the
insured person grows older. Therefore, the policy's death benefit will also
decrease over time, unless the policy's account value increases by a sufficient
amount to offset the impact of the decreasing death benefit factor.
Your policy's "GUARANTEED MINIMUM DEATH BENEFIT" is equal to the sum
of the initial premium payment and any permitted additional premium payment,
adjusted for any
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partial withdrawals. A partial withdrawal will result in a reduction in the
guaranteed minimum death benefit; the benefit is reduced by the proportion that
the partial withdrawal amount bears to your policy's account value prior to the
withdrawal.
ADJUSTMENTS TO DEATH BENEFIT PROCEEDS. We will reduce the death benefit proceeds
by the amount of any outstanding policy loan and loan interest and by any amount
of monthly charges under the policy that remain unpaid because the insured
person died during a grace period.
VARIABLE INVESTMENT OPTIONS WITHIN YOUR POLICY
We will initially put all of your account value that is not
attributable to policy loans into our Alliance Money Market variable investment
option. On the first business day following the twentieth day after your policy
is issued (the "Allocation Date"), we will re-allocate that investment in
accordance with the allocation instructions you give in your application to
purchase a policy. These allocation instructions also serve as instructions for
allocating monthly deductions, loan repayments and credited loan interest,
unless you instruct us otherwise. You can change any allocation percentages at
any time, but this will not affect any prior allocations. Changes requested
prior to the Allocation Date are effective on the Allocation Date. The
allocation percentages that you specify must always be in whole numbers and
total exactly 100%.
[Sidebar: You can choose among variable investment options]
VARIABLE INVESTMENT OPTIONS. The available variable investment options are
listed on the front cover of this prospectus. (Your policy and other
supplemental materials may refer to these as "Investment Funds".) The investment
results you will achieve in any one of these options will depend on the
investment performance of the corresponding Portfolio that shares the same name
as that option. That Portfolio follows investment practices, policies and
objectives that are appropriate to the variable investment option you have
chosen. The advisers who make the investment decisions for each Portfolio are as
follows:
o Alliance Capital Management L.P. (for each "Alliance" or "EQ/Alliance" option;
also, jointly advises EQ/Aggressive Stock)
o Bankers Trust Company (for the "BT" options)
o Capital Guardian Trust Company (for the "Capital Guardian" options)
o Evergreen Asset Management Corp. (for the "EQ/Evergreen" options)
o J.P. Morgan Investment Management Inc. (for the "J. P. Morgan" option)
o Lazard Asset Management (for both "Lazard" options)
o Massachusetts Financial Services Company (for the "MFS" options; also, jointly
advises EQ/Aggressive Stock)
o Mercury Asset Management US (for both "Mercury" options)
o Morgan Stanley Asset Management Inc. (for the "Morgan Stanley" option)
o Putnam Investment Management, Inc. (for both "EQ/Putnam" options)
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Each Portfolio is a part of EQ Advisors Trust. Equitable Life serves
as investment manager of EQ Advisors Trust. As such, Equitable Life oversees the
activities of the above-listed advisers with respect to EQ Advisors Trust and is
responsible for retaining or discontinuing the services of those advisers.
(Prior to September 1999, EQ Financial Consultants, Inc., the predecessor to AXA
Advisors, LLC and an affiliate of Equitable Life, served as investment manager
to EQ Advisors Trust.) You will find other important information about each
Portfolio in the separate prospectus for EQ Advisors Trust attached at the end
of this prospectus. We may add or delete variable investment options or
Portfolios at any time.
YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS
BENEFICIARY OF DEATH BENEFIT. You designate your policy's beneficiary in your
policy application. You can change the beneficiary at any other time during the
insured person's life. If no beneficiary is living when the insured person dies,
we will pay the death benefit proceeds in equal shares to the insured person's
surviving children. If there are no surviving children, we will instead pay the
insured person's estate.
PAYMENT OPTIONS FOR DEATH BENEFIT. In your policy application, or at any other
time during the insured person's life, you may choose among several payment
options for all or part of any death benefit proceeds that subsequently become
payable. These payment options are described in the policy, may result in
varying tax consequences. A payment option selected by the policy's owner cannot
be changed by the beneficiary after the insured person dies. The terms and
conditions of each option are set out in a separate contract that we will send
to the payee when a payment option goes into effect. Equitable Life or your
financial professional can provide you with samples of such contracts on
request.
[Sidebar: You can choose to have the proceeds from the policy's life
insurance benefit paid under one of our payment options, rather than as a single
sum.]
If you have not elected a payment option, we will pay any death
benefit in a single sum. If the beneficiary is a natural person (i.e., not an
entity such as a corporation or trust) we will pay any such single sum death
benefit through an interest-bearing checking account (the "Equitable Access
Account(Trademark)") that we will automatically open for the beneficiary. The
beneficiary will have immediate access to the proceeds by writing a check on the
account. We pay interest on the proceeds from the date of death to the date the
beneficiary closes the Equitable Access Account.
If a financial professional has assisted the beneficiary in preparing
the documents that are required for payment of the death benefit, we will send
the Equitable Access Account checkbook or check to the financial professional
within the periods specified for death benefit payments under "When we pay
policy proceeds," below. Your financial professional will take reasonable steps
to arrange for prompt delivery to the beneficiary.
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PAYMENT OPTIONS FOR SURRENDER AND PARTIAL WITHDRAWAL PROCEEDS. You can also
choose to receive all or part of any proceeds from a surrender or partial
withdrawal from your policy under one of the above referenced payment options,
rather than as a single sum.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your policy, you may
return it to us for a full refund of the initial premium you paid, less the
amount of any outstanding policy loan and loan interest. In some states, we will
adjust this amount for any investment performance (whether positive or
negative).
To exercise this cancellation right, you must mail the policy directly
to our Administrative Office with a written request to cancel. Your cancellation
request must be postmarked within 10 days after you receive the policy and your
coverage will terminate as of the date of the postmark. In some states, this
"free look" period is longer than 10 days. Your policy will indicate the length
of your "free look" period.
VARIATIONS AMONG ACCUMULATOR LIFE POLICIES
Time periods and other terms and conditions described in this
prospectus may vary due to legal requirements in your state. These variations
will be reflected in your policy.
Equitable Life also may vary the charges and other terms of
Accumulator Life where special circumstances result in sales or administrative
expenses or mortality risks that are different from those normally associated
with Accumulator Life. We will make such variations only in accordance with
uniform rules that we establish.
Equitable Life or your financial professional can advise you about any
variations that may apply to your policy.
OTHER EQUITABLE LIFE POLICIES
We offer a variety of fixed and variable life insurance policies which
offer policy features, including investment options, that are different from
those offered by this prospectus. Not every policy is offered through your
financial professional. You can contact us to find out more about any other
Equitable Life insurance policy.
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Section 2
Determining your policy's value
YOUR ACCOUNT VALUE
We credit your initial premium payment (and any permitted additional
premium) to your policy's "account value." We use your instructions to allocate
your unloaned account value to one or more of the policy's variable investment
options indicated on the front cover of this prospectus.
Your account value is the total of (i) your amounts in our variable
investment options, and (ii) any amounts that we are holding to secure policy
loans that you have taken (including any interest on those amounts which has not
yet been allocated to the variable investment options). See "Borrowing from your
policy" below. (Your policy and other supplemental material may refer to (ii)
above as your "Loaned Policy Account.") These amounts are subject to certain
charges discussed in "Charges and expenses you will pay" above.
[Sidebar: Your value in the variable investment options reflects the returns
that are achieved by the Portfolios that you select, as well as any charges we
deduct under the policy.]
YOUR POLICY'S VALUE IN OUR VARIABLE INVESTMENT OPTIONS. We invest the account
value that you have allocated to any variable investment option in shares of the
corresponding Portfolio. Your value in each variable investment option is
measured by "units."
The number of your units in any variable investment option does not
change, absent an event or transaction under your policy that involves moving
assets into or out of that option. Whenever any amount is withdrawn or otherwise
deducted from one of your policy's variable investment options, we "redeem"
(cancel) the number of units that has a value equal to that amount. This can
happen, for example, when all or a portion of monthly deductions and
transaction-based charges are allocated to that option, or when loans,
transfers, and partial withdrawals or full surrenders are made from that option.
Similarly, you "purchase" additional units having the same value as the amount
of your premium, any loan repayment, or a transfer that you allocate to that
option.
The value of each unit will increase or decrease each day, by the same
amount as if you had invested in the corresponding Portfolio's shares directly
(and reinvested all dividends and distributions from the Portfolio in additional
Portfolio shares). The units' values will be reduced, however, by the amount of
the mortality and expense risk charge for that period (See "Table of policy
charges" under "Charges and expenses you will pay" above). On any day, your
value in any variable investment option equals the number of units credited to
your policy under that option, multiplied by that day's value for one such unit.
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Section 3
Transferring your money among our variable investment options
TRANSFERS YOU CAN MAKE
[Sidebar: You can transfer among our variable investment options.]
After your policy's Allocation Date, you can transfer amounts from one
variable investment option to another. You may submit a written request for a
transfer to our Administrative Office, you can make a telephone request or you
can make a request over the Internet (see below).
TRANSFER CHARGE. We do not currently make any charge for transfers. We reserve
the right, however, to impose up to a $25 charge for each transfer you make.
This charge does not apply to any transfer pursuant to our dollar cost averaging
service or our asset rebalancing service, both discussed below.
TELEPHONE AND EQACCESS TRANSFERS
TELEPHONE TRANSFERS. You can make telephone transfers by following one of two
procedures:
o if you are both the policy's insured person and its owner, by calling
1-888-855-5100 (toll free) from a touch tone phone; or
o if you are not both the insured person and owner, by sending us a signed
telephone transfer authorization form. Once we have the form on file, we will
provide you with a toll-free telephone number to make transfers.
For more information see "Telephone and EQAccess requests" later in
this prospectus. We allow only one request for telephone transfers each day
(although that request can cover multiple transfers), and we will not allow you
to revoke a telephone transfer. If you are unable to reach us by telephone, you
should send a written transfer request to our Administrative Office.
EQACCESS TRANSFERS. By the end of 2000, we anticipate that you will be able to
make transfers over the Internet. You may do this by visiting our Web site and
enrolling in EQAccess. This service may not always be available. Generally, the
restrictions relating to telephone transfers apply to EQAccess transfers.
MARKET TIMING. We reserve the right to limit your access to telephone or
EQAccess transfers if we determine that you are engaged in a market timing
strategy. See "Transfers of your account value - Market timing" later in this
prospectus.
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OUR DOLLAR COST AVERAGING SERVICE
We offer a dollar cost averaging service. This service allows you to
gradually allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low, and fewer units if the unit's value is high. Therefore, you may
get a lower average cost per unit over the long term.
[Sidebar: Using the dollar cost averaging service does not guarantee
that you will earn a profit or be protected against losses.]
Our dollar cost averaging service (also referred to as our "automatic
transfer service") enables you to make automatic monthly transfers from the
Alliance Money Market option to our other variable investment options. You may
elect the dollar cost averaging service with your policy application or at any
later time (provided you are not using the asset rebalancing service described
below). At least $5,000 must be allocated to the Alliance Money Market option to
begin using the dollar cost averaging service. You can choose up to eight other
variable investment options to receive the automatic transfers, but each
transfer to each option must be at least $50.
The service terminates when the Alliance Money Market option is
depleted. You can also cancel the dollar cost averaging service at any time. You
may not simultaneously participate in the asset rebalancing service and the
dollar cost averaging service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in
our variable investment options so that the relative amount of your account
value in each variable option is restored to an asset allocation that you
select. You can accomplish this automatically through our asset rebalancing
service. The rebalancing may be at quarterly, semiannual or annual intervals.
You may specify asset allocation percentages for up to eight variable
investment options. The allocation percentage you specify for each variable
investment option selected must be at least 5% (whole percentage only) of the
total value you hold under the variable investment options, and the sum of the
percentages must equal 100%. You may not simultaneously participate in the asset
rebalancing service and the dollar cost averaging service (discussed above).
You may request the asset rebalancing service in your policy
application or at any later time. You may change your allocation instructions or
discontinue participation in the asset rebalancing service at any time.
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Section 4
Accessing your money
BORROWING FROM YOUR POLICY
You may borrow up to 90% of the difference between your policy's
account value and any surrender charges that are in effect under your policy.
(In your policy, this "difference" is referred to as your "cash surrender
value".) However, the amount you can borrow will be reduced by any other loans
(and loan interest) you have outstanding. There is a $500 minimum for the
initial loan and for each new policy loan you request. (This minimum loan amount
may vary by state.)
When you take a policy loan, we remove an amount equal to the loan
from one or more of your variable investment options and hold it as collateral
for the loan's repayment. (Your policy may sometimes refer to the collateral as
the "loaned policy account.") We hold this loan collateral as part of our
general assets.
[sidebar: You can use policy loans to obtain funds from your policy
without surrender charges. However, you may be subject to tax consequences and
the borrowed amount is no longer credited with the investment results of any of
our variable investment options under the policy. Instead, you are charged loan
interest on your loan balance while the collateral we hold for the borrowed
amount is credited with interest at rates we determine.]
YOU MAY BE REQUIRED TO CURRENTLY INCLUDE ALL OR A PORTION OF THE
AMOUNT YOU BORROW IN YOUR INCOME FOR TAX PURPOSES AND YOU MAY ALSO BE SUBJECT TO
A TAX PENALTY IF YOU ARE UNDER 59 1/2 YEARS OF AGE IF YOUR POLICY IS CONSIDERED
A "MODIFIED ENDOWMENT CONTRACT" ("MEC"). Even if your policy is not a MEC, and a
loan is not taxable when made, it may later become taxable, for example, upon
termination or surrender. See "Tax information" below for a discussion of the
tax consequences of policy loans.
Note that you cannot make transfers or partial withdrawals of the
collateral and the collateral is not available to pay policy charges.
When you request your loan, you should tell us how much of the loan
collateral you wish to have taken from any amounts you have in each of our
variable investment options. If you do not give us directions (or if we are
making the loan automatically to cover unpaid loan interest), we will take the
loan from your variable investment options in the same proportion as we are then
taking monthly deductions for charges. If that is not possible, we will take the
loan from your variable investment options in proportion to your value in each.
In some cases, your policy may be issued with a loan if your policy
was issued as a result of the exchange of another life insurance policy under
Section 1035 of the
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Internal Revenue Code. If your old policy had an existing loan, we may permit
that loan to be transferred (or carried over) to your new Accumulator Life
policy, subject to our procedures in effect at such time. Any value representing
your transferred loan will be immediately set aside as collateral for your
loan's repayment, and will not be allocated to the variable investment options.
LOAN INTEREST WE CHARGE. The interest we charge on a policy loan accrues daily
at a fixed loan interest rate of 6%. Loan interest payments are due on each
policy anniversary. If not paid when due, we automatically add the interest as a
new policy loan, as described above. This new policy loan will generally have
tax and other consequences as described for policy loans you request, even
though no actual disbursement of loan proceeds occurs. If we add unpaid loan
interest to your loan, and your policy is a modified endowment contract, there
may be adverse tax consequences. See "Tax information" below.
INTEREST THAT WE CREDIT ON LOAN COLLATERAL. The annual interest rate we credit
on your loan collateral will be at least 4%. We guarantee that this rate will
never be less than that unless tax law changes increase the taxes we pay on
policy loans or loan interest.
Currently, after the first policy year, we credit a "preferred"
interest rate on a portion of your loan collateral. This preferred rate is equal
to the interest rate we charge on your loans, 6%. This 6% preferred rate is not
guaranteed and we may at any time reduce or discontinue crediting interest at
any rate above 4%. The maximum amount of loan collateral that can qualify for
preferred status is determined at the end of each policy year for the following
year (or as of the effective date of any restoration, if later). It is the
excess (if any) of your account value on that date over the sum of your initial
and any additional premium payment. The maximum amount at any other time during
the policy year is determined as the maximum amount at the beginning of the
policy year, accumulated at the preferred rate.
We credit interest on your loan collateral daily. On each anniversary
of your policy (or when your policy loan is fully repaid) we allocate that
interest to your policy's variable investment options in the same proportions as
if it were a premium payment.
POSSIBILITY OF POLICY TERMINATION. In addition to the tax and other effects
described above, a loan can reduce the length of time that your insurance
remains in force, because your policy could terminate in certain circumstances
if you fail to repay your loan or to pay loan interest. See "Policy `lapse' and
termination" above. The amount we set aside as loan collateral cannot be used to
pay policy charges as they become due. See "Failure to repay a loan or loan
interest" below. A loan will also cause your guaranteed minimum death benefit to
become unavailable if the net cash surrender value of your policy is not
sufficient to pay monthly charges as they become due. We will deduct any
outstanding policy loan plus loan interest from any policy's proceeds if you do
not pay it back.
PAYING OFF YOUR LOAN. You can repay all or part of your loan at any time. If you
send us more than all of the loan principal and accrued interest you owe, we
will refund the
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excess portion of the payment. When you send us a loan repayment, we will
transfer an amount equal to such repayment from your loan collateral back to the
variable investment options under your policy. We will allocate any repayments
among variable investment options as you instruct; or, if you don't instruct us,
in the same proportion as your premium allocation percentages then in effect.
FAILURE TO REPAY A LOAN OR LOAN INTEREST. In addition to the effects discussed
above, if you fail to repay a loan and the accrued loan interest, and, at the
beginning of a policy month, the policy's net cash surrender value is less than
the monthly charges then due, (i) your policy could terminate (see "Policy
termination" above) and (ii) you are not permitted to make transfers or to
change allocation instructions for loan repayments or monthly deductions.
MAKING WITHDRAWALS FROM YOUR POLICY
You may make a partial withdrawal of your net cash surrender value at
any time after the first year of your policy. The request must be for at least
$500, and the policy's account value after the partial withdrawal, and after the
deduction of any applicable surrender charge, must be at least $25,000, or we
will decline your request. If your withdrawal is subject to a surrender charge,
we deduct the amount of that charge from your account value in addition to the
amount you requested. If you do not tell us from which variable investment
options you wish us to take the partial withdrawal (as well as any surrender
charge), we will use the same allocation that then applies for the monthly
deductions we make for charges; and, if that is not possible, we will take the
partial withdrawal (and any surrender charge) from all of your variable
investment options in proportion to your value in each.
[Sidebar: You can withdraw all or part of your policy's net cash surrender
value, although you may incur charges and tax consequences by doing so.]
We charge any applicable surrender charge on the portion of any
partial withdrawal that is not treated as a "free withdrawal." The surrender
charge we impose is the applicable surrender charge percentage multiplied by the
lesser of: (i) the amount of the withdrawal that does not qualify as a free
withdrawal (as discussed below), and (ii) the initial premium less the amount of
any previous partial withdrawals that incurred a surrender charge. The
applicable surrender charge percentages are shown under "Charges and expenses
you will pay" above.
FREE WITHDRAWAL. Beginning in the second policy year you can take as a free
withdrawal 15% of your policy's account value (less outstanding loans and loan
interest) as determined as of the end of the previous policy year (or as of the
effective date of any restoration, if later). Multiple withdrawals taken in any
one policy year are aggregated for this purpose. Each year your "free
withdrawal" amount is redetermined, but amounts that were not withdrawn in a
policy year cannot be carried over to the next policy year. A free
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withdrawal is "free" from surrender charges. It is not free from any income tax
consequences resulting from the withdrawal.
EFFECT OF PARTIAL WITHDRAWAL ON INSURANCE COVERAGE. A partial withdrawal
automatically reduces your net cash surrender value on a dollar-for-dollar basis
by the amount of the withdrawal. A partial withdrawal also automatically reduces
your policy's account value on a dollar-for-dollar basis by the amount of the
withdrawal plus any applicable surrender charge. A partial withdrawal also
results in a reduction in your policy's guaranteed minimum death benefit by the
proportion that the partial withdrawal bears to the policy account value just
prior to the partial withdrawal. For example, if the requested partial
withdrawal equals 10% of your policy's account value prior to the withdrawal,
your guaranteed minimum death benefit would be reduced by 10%.
Thus, if you take a partial withdrawal, your policy's death benefit
will be the greater of (i) a multiple of the now-reduced account value or (ii)
its now-reduced guaranteed minimum death benefit.
You should refer to "Tax information" below, for information about
possible tax consequences of partial withdrawals and any associated reduction in
policy benefits. If you have an unpaid policy loan, a partial withdrawal may
also increase the chance that your policy could lapse because of insufficient
value to pay policy charges as they fall due.
SURRENDERING YOUR POLICY FOR ITS NET CASH SURRENDER VALUE
You can fully surrender (give us back) your policy for its "net cash
surrender value" at any time. The net cash surrender value equals your account
value, minus any outstanding loans and unpaid loan interest, and minus any
surrender charge that then remains applicable.
The surrender charge we impose on a full surrender is the applicable
surrender charge percentage multiplied by the amount of the initial premium, as
adjusted for any prior partial withdrawals. For purposes of this calculation,
the amount of the initial premium would be reduced by the amounts of any prior
partial withdrawals that incurred a surrender charge. The surrender charge
percentages are shown in "Charges and expenses you will pay" above.
A full surrender causes your policy and all insurance benefits to
terminate. Please refer to "Tax information" below for the possible tax
consequences of surrendering your policy.
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Section 5
Tax information
This discussion is based on current federal income tax law and
interpretations. It assumes that the policyowner is a natural person who is a
U.S. citizen and resident. The tax effects on corporate taxpayers, non-U.S.
residents or non-U.S. citizens may be different. This discussion is general in
nature, and should not be considered tax advice, for which you should consult a
qualified tax advisor.
BASIC TAX TREATMENT FOR YOU AND YOUR BENEFICIARY
An Accumulator Life policy will be treated as "life insurance" for
federal income tax purposes (a) if it meets the definition of life insurance
under Section 7702 of the Internal Revenue Code (the "Code") and (b) as long as
the investments made by the underlying Portfolios satisfy certain investment
diversification requirements under Section 817(h) of the Code. We believe that
the policies will meet these requirements and, therefore, that
o the death benefit received by the beneficiary under your policy will generally
not be subject to federal income tax; and
o increases in your policy's account value as a result of interest or investment
experience will not be subject to federal income tax, unless and until there is
a distribution from your policy, such as a surrender, a partial withdrawal, loan
or a payment to you.
There may be different tax consequences if you assign your policy or
designate a new owner. See "Assigning your policy" below.
TAX TREATMENT OF DISTRIBUTIONS TO YOU
The federal income tax consequences of a distribution from your policy
depend on whether your policy is a "modified endowment contract" (sometimes also
referred to as a "MEC"). In all cases, however, the character of any income
described below as being taxable to the recipient will be ordinary income (as
opposed to capital gain).
TESTING FOR MODIFIED ENDOWMENT CONTRACT ("MEC") STATUS. In all cases where you
have purchased your policy with a single premium, your policy will be a
"modified endowment contract." Additionally, a life insurance policy that you
receive in exchange for another life insurance policy that was a modified
endowment contract will also be considered a modified endowment contract.
If you acquire your policy through the exchange of an existing life
insurance policy that is not itself a modified endowment contract, your new
policy will generally not be a modified endowment contract. There are two
exceptions:
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(1) if there is a reduction in benefits below the level that would
have caused your existing policy to become a modified endowment. This will not
be the case if the existing policy was not subject to (or was grandfathered
from) modified endowment contract testing or beyond any seven-year testing
period. We will request the issuer of any existing contract being exchanged to
provide us with information necessary to determine the new contract's status.
(2) if you decide to make an additional premium payment at such later
time as the policy may permit.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED ENDOWMENT
CONTRACT. Any distribution from your policy will be taxed on an "income-first"
basis if your policy is a modified endowment contract. Distributions for tax
purposes include a loan (including any increase in the loan amount to pay
interest on an existing loan or an assignment or a pledge to secure a loan) or
partial withdrawal. Any such distributions will be considered taxable income to
you to the extent your account value exceeds your basis in the policy. (For
modified endowment contracts, your basis in the policy is equal to your initial
single premium, increased by any permitted additional premium and reduced by the
amount of any previous distributions from your policy that were not taxable. If
your policy was acquired through a tax free exchange, however, your basis will
generally equal the basis carried over from the policy you exchanged, increased
by any additional premium and reduced by any previous distributions that were
not taxable. Your basis also would be increased by the amount of any prior loan
under your policy that was considered taxable income to you.) For purposes of
determining the taxable portion of any distribution, all modified endowment
contracts issued by Equitable Life (or its affiliate) to the same owner during
any calendar year are treated as if they were a single contract.
A 10% penalty tax also will apply to the taxable portion of most
distributions from a policy that is a modified endowment contract. The penalty
tax will not, however, apply to (i) taxpayers whose actual age is at least 59
1/2, (ii) distributions in the case of a disability (as defined in the Code) or
(iii) distributions received as part of a series of substantially equal periodic
annuity payments for the life (or life expectancy) of the taxpayer or the joint
lives (or joint life expectancies) of the taxpayer and his or her beneficiary.
Interest charged on the loan will generally not be tax deductible,
although interest credited on loan collateral may become taxable if distributed
under the policy. IF YOUR POLICY TERMINATES AFTER A GRACE PERIOD, THE
EXTINGUISHMENT OF ANY THEN OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL
BE TREATED AS A DISTRIBUTION (to the extent the loan was not previously treated
as a distribution) and could be subject to tax, including the 10% penalty tax,
as described above. In addition, upon a full surrender, any excess of the
proceeds we pay (including any amounts we use to discharge any loan) over your
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basis in the policy, will be subject to federal income tax and, unless an
exception applies, the 10% penalty tax.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT
CONTRACT. As long as your policy remains in force as a non-modified endowment
contract, policy loans will be treated as indebtedness, and no part of the loan
proceeds will be subject to current federal income tax. Interest charged on the
loan will generally not be tax deductible, although interest credited on loan
collateral may become taxable under the rules below if distributed.
If you make a partial withdrawal after the first 15 years of your
policy, the proceeds will not be subject to federal income tax except to the
extent such proceeds exceed your "basis" in your policy. (Your basis generally
will equal the basis carried over from the old life policy you exchanged, if the
exchange was a tax free exchange, less the amount of any distributions from your
policy that were not taxable. We need to receive this basis information from the
issuer of the old life policy.) During the first 15 years, however, the proceeds
from a partial withdrawal are likely to be subject to federal income tax, under
a complex formula, to the extent that your account value exceeds your basis.
Upon full surrender, any amount by which the proceeds we pay
(including amounts we use to discharge any policy loan and unpaid loan interest)
exceed your basis in the policy will be subject to federal income tax. IN
ADDITION, IF A POLICY TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF ANY
THEN-OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION AND COULD BE SUBJECT TO TAX UNDER THE FOREGOING RULES. Finally, if
you make an assignment of rights or benefits under your policy, you may be
deemed to have received a distribution from your policy, all or part of which
may be taxable.
Distributions that occur during a year of your policy in which it
becomes a modified endowment contract, and during any subsequent years, will be
taxed as described above for a policy which is a modified endowment contract. In
addition, distributions from a policy within two years before it becomes a
modified endowment contract also will be subject to tax in this manner. This
means that a distribution made from a policy that is not a modified endowment
contract could later become taxable as a distribution from a modified endowment
contract.
RESTORATION OF A TERMINATED POLICY. For tax purposes, some
restorations of a policy that terminated after a grace period may be treated as
the purchase of a new policy.
EFFECT OF POLICY ON INTEREST DEDUCTIONS TAKEN BY BUSINESS ENTITIES
OWNERSHIP OF A POLICY BY A TRADE OR BUSINESS ENTITY CAN LIMIT THE
AMOUNT OF ANY INTEREST ON BUSINESS BORROWINGS THAT ENTITY OTHERWISE COULD DEDUCT
for federal income tax purposes, even though such business borrowings may be
unrelated to the
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policy. To avoid the limit, the insured person must be an officer, director,
employee or 20% owner of the trade or business entity when coverage on that
person commences.
The limit does not generally apply for policies owned by natural
persons (even if those persons are conducting a trade or business as sole
proprietorships), unless a trade or business entity that is not a sole
proprietorship is a direct or indirect beneficiary under the policy. ENTITIES
COMMONLY HAVE SUCH A BENEFICIAL INTEREST, FOR EXAMPLE, IN SO-CALLED "SPLIT
DOLLAR" ARRANGEMENTS. If the trade or business entity has such an interest in a
policy, it will be treated the same as if it owned the policy for purposes of
the limit on deducting interest on unrelated business income.
The limit generally applies only to policies issued after June 8, 1997
in taxable years ending after such date. However, for this purpose, any material
increase in death benefit as a result of any additional premium payment, or
other material change in a policy, will be treated as the issuance of a new
policy.
In cases where the above-discussed limit on deductibility applies, the
non-deductible portion of unrelated interest on business loans is determined by
multiplying the total amount of such interest by a fraction. The numerator of
the fraction is the policy's average account value (excluding amounts we are
holding to secure any policy loans) for the year in question, and the
denominator is the average for the year of the aggregate tax bases of all the
entity's other assets.
Any corporate, trade, or business use of a policy should be carefully
reviewed by your tax advisor with attention to these rules, as well as the other
rules and possible pending legislative proposals which might further restrict
available exceptions to this limit on interest deductions or make other tax law
changes with respect to such coverage.
REQUIREMENT THAT WE DIVERSIFY INVESTMENTS
Under Section 817(h) of the Code, the Treasury Department has issued
regulations that implement investment diversification requirements. Failure to
comply with these regulations would disqualify your policy as a life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to federal income tax on any income and gains under the policy and the
death benefit proceeds would lose their income tax-free status. These
consequences would continue for the period of the disqualification and for
subsequent periods. Through the Portfolios, we intend to comply with the
applicable diversification requirements.
ESTATE, GIFT, AND GENERATION-SKIPPING TAXES
If the policy's owner is the insured person, the death benefit will
generally be includable in the owner's estate for purposes of federal estate
tax. If the owner is not the insured person, and the owner dies before the
insured person, the value of the policy would be includable in the owner's
estate. If the owner is neither the insured person nor
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the beneficiary, the owner will be considered to have made a gift to the
beneficiary of the death benefit proceeds when they become payable.
In general, a person will not owe estate or gift taxes until gifts
made by such person, plus that person's taxable estate, total at least $675,000
(a figure that is scheduled to rise at periodic intervals to $1 million by the
year 2006). For this purpose, however, certain amounts may be deductible or
excludable, such as gifts and bequests to the person's spouse or charitable
institutions and certain gifts of $10,000 or less per year for each recipient.
As a general rule, if you make a "transfer" to a person two or more
generations younger than you, a generation-skipping tax may be payable.
Generation-skipping transactions would include, for example, a case where a
grandparent "skips" his or her children and names grandchildren as a policy's
beneficiaries. In that case, the generation-skipping "transfer" would be deemed
to occur when the insurance proceeds are paid. The generation-skipping tax rates
are similar to the maximum estate tax rate in effect at the time. Individuals,
however, are generally allowed an aggregate generation-skipping tax exemption of
$1 million.
The particular situation of each policyowner, insured person or
beneficiary will determine how ownership or receipt of policy proceeds will be
treated for purposes of federal estate, gift and generation-skipping taxes, as
well as state and local estate, inheritance and other taxes. Because these rules
are complex, you should consult with a qualified tax adviser for specific
information, especially where benefits are passing to younger generations.
EMPLOYEE BENEFIT PROGRAMS
This Accumulator Life policy is not designed, nor intended, to be sold
into employee benefit programs. Special rules apply to sales of life insurance
policies to the following programs:
PENSION AND PROFIT-SHARING PLANS. There are special limits on the
amount of insurance that may be purchased by a trust or other entity that forms
part of a pension or profit-sharing plan qualified under Section 401(a) or 403
of the Code. In addition, the federal income tax consequences will be different
from those described in this prospectus. These rules are complex, and you should
consult a qualified tax advisor.
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OTHER EMPLOYEE BENEFIT PROGRAMS. Complex rules may also apply when a
policy is held by an employer or a trust, or acquired by an employee, in
connection with the provision of other employee benefits. Among other issues,
these policyowners must consider whether the policy was applied for by or issued
to a person having an insurable interest under applicable state law and with the
insured person's consent. The lack of an insurable interest or consent may,
among other things, affect the qualification of the policy as life insurance for
federal income tax purposes and the right of the beneficiary to receive a death
benefit.
ERISA. Employers and employer-created trusts may be subject to
reporting, disclosure and fiduciary obligations under the Employee Retirement
Income Security Act of 1974. You should consult a qualified legal advisor.
OUR TAXES
The operations of our Separate Account FP are reported in our federal
income tax return. The separate account's investment income and capital gains,
however, are, for tax purposes, reflected in our variable life insurance policy
reserves. Therefore, we currently pay no taxes on such income and gains and
impose no charge for such taxes. We reserve the right to impose a charge in the
future for taxes incurred; for example, a charge to the separate account for
income taxes incurred by us that are allocable to the policies.
If our state, local or other tax expenses increase, we may add or
increase our charges for such taxes when they are attributable to Separate
Account FP, based on premiums, or otherwise allocable to the policies.
WHEN WE WITHHOLD TAXES FROM DISTRIBUTIONS
Generally, unless you provide us with a satisfactory written election
to the contrary prior to the distribution, we are required to withhold income
tax from any proceeds we distribute as part of a taxable transaction under your
policy. If you do not wish us to withhold tax from the payment, or if we do not
withhold enough, you may have to pay later, and you may incur penalties under
the estimated income tax rules. In some cases, where generation-skipping taxes
may apply, we may also be required to withhold for such taxes unless we are
provided satisfactory notification that no such taxes are due. States may also
require us to withhold tax on distributions to you. Special withholding rules
apply if you are not a U.S. resident or U.S. citizen.
POSSIBILITY OF FUTURE TAX CHANGES
The U.S. Congress frequently considers legislation that, if enacted,
could change the tax treatment of life insurance policies or increase the taxes
we pay in connection with such policies. In addition, the Treasury Department
may amend existing regulations, issue regulations on the qualification of life
insurance and modified endowment contracts, or adopt new or clarifying
interpretations of existing law. State and local tax law or, if
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you are not a U.S. citizen and resident, foreign tax law, may also affect the
tax consequences to you, the insured person or your beneficiary, and are subject
to change or changes of interpretation. Any changes in federal, state, local or
foreign tax law or interpretations could have a retroactive effect, both on our
taxes and the way your policy is taxed.
The Treasury Department has the authority to issue guidelines
prescribing the circumstances in which your ability to direct your investment to
particular Portfolios within an insurance policy may cause you, rather than the
insurance company, to be treated as the owner of the Portfolio shares
attributable to your policy. In that case, income and gains attributable to such
Portfolio shares would be included in your gross income for federal income tax
purposes. Under current law, however, we believe that Equitable Life, and not
the owner of a policy, would be considered the owner of the Portfolio shares.
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Section 6
More information about procedures that apply to your policy
This section provides further detail about certain subjects that are
addressed in the previous pages. The following discussion generally does not
repeat the information already contained in those pages.
WAYS TO MAKE PREMIUM AND LOAN PAYMENTS
CHECKS AND MONEY ORDERS. Your initial single premium, any permitted additional
premium or any loan repayment generally must be paid by check or money order
drawn on a U.S. bank in U.S. dollars and made payable to "Equitable Life."
We prefer that you make each payment to us with a single check drawn
on your business or personal bank account. We also will accept a single money
order, bank draft or cashier's check payable directly to Equitable Life,
although we must report such "cash equivalent" payments to the Internal Revenue
Service under certain circumstances. Cash and travelers' checks, or any payments
in foreign currency, are not acceptable. We will not accept third-party checks
payable to someone other than Equitable Life.
EXCHANGES OF EXISTING LIFE INSURANCE POLICIES. We may, under certain
circumstances, permit you to exchange an existing life insurance policy for an
Accumulator Life policy. In this regard, we will follow our established
administrative procedures in effect at that time. We will apply these procedures
uniformly and will not unfairly discriminate. We will generally require the use
of special forms for this purpose.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your
tax identification number, the name of the insured person, and the address where
proceeds should be mailed. The request must be signed by you, as the owner, and
by any joint owner, collateral assignee or irrevocable beneficiary. We may also
require you to complete specific tax forms.
Finally, in order for your surrender request to be complete, you must
return your policy to us. Your request will not be deemed complete until we
receive all required items. See "Dates and prices at which policy events occur"
below for information regarding the pricing of your request.
WAYS WE PAY POLICY PROCEEDS
The payee for death benefit or other policy proceeds (e.g. upon
surrenders) may name a successor to receive any amounts that we still owe
following the payee's death. Otherwise, we will pay any such amounts to the
payee's estate.
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We must approve any payment arrangements that involve more than one
payment option, or a payee who is not a natural person (for example, a
corporation), or a payee who is a fiduciary. Also, the details of all payment
arrangements will be subject to our rules at the time the arrangements are
selected and take effect. This includes rules on the minimum amount we will pay
under an option, minimum amounts for installment payments, withdrawals or
commutation rights (your rights to receive payments over time, for which we may
offer a lump sum payment), the naming of payees, and the methods for proving the
payee's age and continued survival.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a policy to someone else as
collateral for a loan, to effect a change of ownership or for some other reason,
if we agree. A copy of the assignment must be forwarded to our Administrative
Office. We are not responsible for any payment we make or any action we take
before we receive notice of the assignment or for the validity of the
assignment. An absolute assignment is a change of ownership.
Certain transfers for value may subject you to income tax and
penalties and cause the death benefit to lose its income-tax free treatment. A
gift of a policy that has a loan outstanding may be treated as part gift and
part transfer for value, which could result in both gift tax and income tax
consequences. An assignment of a life insurance policy that is a modified
endowment contract as collateral for a loan will generally be treated as a
distribution under the policy for income tax purposes. You should consult your
tax advisor prior to making a transfer or other assignment.
DATES AND PRICES AT WHICH POLICY EVENTS OCCUR
We describe below the general rules for when, and at what prices,
events under your policy will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
DATE OF RECEIPT. Where this prospectus refers to the day when we receive a
payment, request, election, or notice from you, we usually mean the day on which
that item (or the last thing necessary for us to process that item) arrives in
complete and proper form at our Administrative Office or via the appropriate
telephone or fax number if the item is a type we accept by those means. There
are two main exceptions: if the item arrives (1) on a day that is not a business
day or (2) after the close of a business day, then, in each case, we are deemed
to have received that item on the next business day.
BUSINESS DAYS. Every day that the New York Stock Exchange is open for regular
trading is a business day for us. Each business day ends at the time regular
trading on the exchange closes (or is suspended) for the day. We compute unit
values for our variable investment options as of the end of each business day.
This usually is 4:00 p.m., Eastern Time.
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PAYMENTS AND REQUESTS YOU MAKE. Loan repayments, any permitted additional
premium payment, and interest payments are reflected in your policy as of the
date we receive them.
The following transactions occur (and receive the prices) as of the
date we receive your request:
o partial withdrawals
o account value and guaranteed minimum death benefit decreases that result from
partial withdrawals
o tax withholding elections
o changes of allocation percentages
o surrenders
o changes of beneficiary
o changes in form of death benefit payment
o loans
o transfers among variable investment options
o assignments
Restoration of terminated policies occurs on your policy's next
monthly anniversary that coincides with or follows the date we approve your
request.
DOLLAR COST AVERAGING SERVICE. Transfers pursuant to our dollar cost averaging
service (automatic transfer service) occur as of the first day of each policy
month. If you request the dollar cost averaging service in your original policy
application, the first transfer will occur as of the first day of the second
policy month after your policy's initial Allocation Date. If you request this
service at any later time, we make the first such transfer as of your policy's
first monthly anniversary that coincides with or follows the date we receive
your request.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive your
request, if later. However, no rebalancing will occur prior to your policy's
Allocation Date. Subsequent periodic rebalancings occur quarterly, semiannually
or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or any transfer, for the same reasons stated in
"Delay of variable investment option proceeds" below. We may also delay such
transactions for any other legally permitted purpose.
PRICES APPLICABLE TO POLICY TRANSACTIONS. If a transaction will increase or
decrease the amount you have in a variable investment option as of a certain
date, we process the transaction using the unit values for that option computed
as of that day's close of
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business, unless that day is not a business day. In that case, we use unit
values computed as of the next business day's close.
EFFECT OF DEATH OR SURRENDER. You may not make any policy transactions or
changes after the insured person has died. Also, all insurance coverage ends on
the date as of which we process any request for a full surrender.
POLICY ISSUANCE
REGISTER DATE. When we issue a policy, we assign it a "register date," which
will be shown in the policy. We measure the months, years, and anniversaries of
your policy from your policy's register date. The register date will generally
be the same as the date we actually issue the policy (the "issue date").
Policies that would otherwise receive a register date of the 29th, 30th or 31st
of any month will receive a register date of the 28th of that month.
INVESTMENT START DATE. This is the date your investment first begins to earn a
return for you in our Alliance Money Market option (prior to the Allocation
Date). The investment start date is the issue date.
COMMENCEMENT OF INSURANCE COVERAGE. You must give the entire premium for this
policy to your financial professional before the policy is delivered to you. No
insurance under your policy will take effect unless (1) the insured person is
still living at the time such delivery is completed and (2) unless the
information in the application continues to be true and complete, without
material change, as of the time of such payment. If you submit your entire
premium with your application, we may, subject to certain conditions, provide a
limited amount of temporary insurance on the proposed insured person. You may
request and review a copy of our temporary insurance agreement for more
information about the terms and conditions of that coverage.
NON-ISSUANCE. If, after considering your application, we decide not to issue a
policy, we will refund any premium you have paid (less the amount of any loan)
without interest.
AGE; AGE AT ISSUE. Unless the context in this prospectus requires otherwise, we
consider the insured person's "age" during any policy year be his or her age on
his or her birthday nearest to the beginning of that policy year. For example,
the insured person's age for the first policy year ("age at issue") is that
person's age on whichever birthday is closer to (i.e., before or after) the
policy's register date.
GENDER-NEUTRAL POLICIES
Congress and various states have from time to time considered
legislation that would require insurance rates and the "factors" we use to
compute the policies' death benefits to be the same for males and females.
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There will be no distinctions based on sex in the death benefit
factors or cost of insurance rates for Accumulator Life policies sold in Montana
because of Montana insurance department regulations. Guaranteed maximum cost of
insurance rates applicable to a gender-neutral policy will not be greater than
the comparable male rates under a gender specific Accumulator Life policy.
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Section 7
More information about other matters
YOUR VOTING PRIVILEGES
VOTING OF PORTFOLIO SHARES. As the legal owner of any Portfolio shares that
support a variable investment option, we will attend (and have the right to vote
at) any meeting of shareholders of the Portfolio (or the Trust). To satisfy
currently-applicable legal requirements, however, we will give you the
opportunity to tell us how to vote the number of each Portfolio's shares that
are attributable to your policy. We will vote shares attributable to policies
for which we receive no instructions in the same proportion as the instructions
we do receive from all policies that participate in our Separate Account FP
(discussed below). With respect to any Portfolio shares that we are entitled to
vote directly (because we do not hold them in a separate account or because they
are not attributable to policies), we will vote in proportion to the
instructions we have received from all holders of variable annuity and variable
life insurance policies who are using that Portfolio.
Under current legal requirements, we may disregard the voting
instructions we receive from policyowners only in certain narrow circumstances
prescribed by SEC regulations. If we do, we will advise you of the reasons in
the next annual or semiannual report we send to you.
VOTING AS POLICYOWNER. In addition to being able to instruct voting of Portfolio
shares as discussed above, policyowners that use our variable investment options
may in a few instances be called upon to vote on matters that are not the
subject of a shareholder vote being taken by any Portfolio. If so, you will have
one vote for each $100 of account value in any such option; and we will vote our
interest in Separate Account FP in the same proportion as the instructions we
receive from holders of Accumulator Life and other policies that Separate
Account FP supports.
ABOUT OUR SEPARATE ACCOUNT FP
Each variable investment option is a part (or "subaccount") of our
Separate Account FP. We established Separate Account FP under special provisions
of the New York Insurance Law. These provisions prevent creditors from any other
business we conduct from reaching the assets we hold in our variable investment
options for owners of our variable life insurance policies. We are the legal
owner of all of the assets in Separate Account FP and may withdraw any amounts
that exceed our reserves and other liabilities with respect to variable
investment options under our policies. The results of Separate Account FP's
operations are accounted for without regard to Equitable Life's other
operations.
Separate Account FP's predecessor was established on April 19, 1985
by our then wholly owned subsidiary, Equitable Variable Life Insurance Company.
We established
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our Separate Account FP under New York Law on September 21, 1995. When Equitable
Variable Life Insurance Company merged into Equitable Life, as of January 1,
1997, our Separate Account FP succeeded to all the assets, liabilities and
operations of its predecessor.
Separate Account FP is registered with the SEC under the Investment
Company Act of 1940 and is classified by that act as a "unit investment trust."
The SEC, however, does not manage or supervise Equitable Life or Separate
Account FP.
Each subaccount (variable investment option) of Separate Account FP
available under Accumulator Life invests solely in class IB shares issued by the
corresponding Portfolio of EQ Advisors Trust. Separate Account FP immediately
reinvests all dividends and other distributions it receives from a Portfolio in
additional shares of that Portfolio.
The EQ Advisors Trust sells its shares to Equitable Life separate
accounts in connection with Equitable Life's variable life insurance and annuity
products, to the trustee of a qualified benefit plan for Equitable Life and to
separate accounts of insurance companies, both affiliated and unaffiliated with
Equitable Life. We currently do not foresee any disadvantages to our
policyowners arising out of this. However, the Board of Trustees of EQ Advisors
Trust intends to monitor events to identify any material irreconcilable
conflicts that may arise and to determine what action, if any, should be taken
in response. If we believe that the Board's response insufficiently protects our
policyowners, we will see to it that appropriate action is taken to do so. Also,
if we ever believe that any of the Trust's Portfolios is so large as to
materially impair the investment performance of the Portfolio involved, we will
examine other investment alternatives.
ABOUT OUR GENERAL ACCOUNT
Our general account assets support all of our obligations (including
those under the Accumulator Life policies). Our general assets consist of all of
our assets as to which no class or classes of our annuity or life insurance
policies have any preferential claim. You will not share in the investment
experience of our general account assets, however; and we have full discretion
about how we invest those assets (subject only to any requirements of law).
TRANSFERS OF YOUR ACCOUNT VALUE
TRANSFERS NOT IMPLEMENTED. When we cannot process part of a transfer request, we
will not process any other part of the request. This could occur, for example,
where you request transfer of an amount greater than that currently allocated to
a variable investment option. In this circumstance, we will notify you and
explain why we could not process the request.
The dollar cost averaging service will terminate immediately if: (1) your amount
in the Alliance Money Market option is insufficient to cover the automatic
transfer amount; (2)
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your policy is in a grace period; or (3) we receive notice of the insured
person's death. Similarly, the asset rebalancing program will terminate
immediately if either (2) or (3) occurs.
MARKET TIMING. You should note that the product is not designed for professional
"market timing" organizations, or other organizations or individuals engaging in
a market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of the underlying
mutual fund portfolio. Market timing strategies are disruptive to the underlying
mutual fund portfolios in which the variable investment options invest. If we
determine that your transfer patterns among the variable investment options
reflect a market timing strategy, we reserve the right to take action including,
but not limited to: restricting the availability of transfers through telephone
requests, facsimile transmissions, automated telephone services, Internet
services or any electronic transfer services. We may also refuse to act on
transfer instructions of an agent acting under a power of attorney who is acting
on behalf of more than one owner.
TELEPHONE AND EQACCESS REQUESTS
If you are a properly authorized person, you may make transfers by
telephone or over the Internet as described above under "Telephone and EQAccess
transfers."
Also, if you are both the owner and the insured person under your
policy, you may call 1-888-228-6690 (toll free) from a touch tone phone to make
the following additional types of requests:
o policy loans
o changes of allocation percentages (anticipated to be available through
EQAccess by the end of 2000)
o changes of address
For security purposes, all telephone requests are automatically
tape-recorded and are invalid if the information given is incomplete or any
portion of the request is inaudible. We have established procedures reasonably
designed to confirm that telephone instructions are genuine. These include
requiring personal identification information from the caller and providing
subsequent written confirmation of the instructions.
If you wish to participate in EQAccess, you must first agree to the
terms and conditions set forth in our EQAccess Online Services Agreement, which
you can find at our Web site. For security purposes, you may not initiate any
transactions relating to your policy for five (5) days after you have elected to
use EQAccess. We will send you a letter by first class mail confirming your
enrollment in EQAccess. Additionally, you will be required to use a password and
protect it from unauthorized use. We will provide subsequent written
confirmation of any EQAccess transactions. We will assume that all instructions
received through EQAccess from anyone using your password are given by
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you; however, we reserve the right to refuse to process any transaction and/or
block access to EQAccess if we have reason to believe the instructions given are
unauthorized.
If we do not employ reasonable procedures to confirm the genuineness
of telephone or Internet instructions, we may be liable for any losses arising
out of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet
transactions if we have reason to believe that the request compromises the
general security and/or integrity of our automated systems (see discussion of
"Market timing" above).
Any telephone or Internet transaction request that we receive after
the close of a business day (which is usually 4:00 p.m. Eastern Time) will be
processed as of the next business day. During times of extreme market activity,
or for other reasons, you may be unable to contact us to make a telephone or
Internet request. If this occurs, you should submit a written transaction
request to our Administrative Office. We reserve the right to discontinue
telephone or Internet transactions, or modify the procedures and conditions for
such transactions, without notifying you at any time.
DEDUCTING POLICY CHARGES
MONTHLY COST OF INSURANCE CHARGE. The monthly cost of insurance charge is
determined by multiplying the cost of insurance rate by your policy's account
value. A greater policy account value, or a higher cost of insurance rate, will
generally result in a higher current monthly charge. The currently applicable
cost of insurance rate is 1.15%, subject to the maximum charges specified in
your policy.
We reserve the right to change this rate, but we will never charge
more than the guaranteed maximum charge specified in your policy. These maximum
charges are determined by multiplying the maximum cost of insurance rate that is
then applicable to your policy by the amount we have at risk under your policy.
The maximum cost of insurance rates are based on the 1980 Commissioners'
Standard Ordinary Male and Female Mortality Tables. Our amount at risk (also
described in your policy as "net amount at risk") on any date is the difference
between (a) the death benefit that would be payable if the insured person died
on that date and (b) the then total account value under the policy.
Our maximum cost of insurance rates will generally be lower (except
in Montana) if the insured person is a female than if a male.
DATE OF MONTHLY DEDUCTIONS. We make the regular monthly deductions as of the
first day of each policy month.
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PURPOSES OF POLICY CHARGES. The charges under the policies are designed to
cover, in the aggregate, our direct and indirect costs of selling, administering
and providing benefits under the policies. They are also designed, in the
aggregate, to compensate us for the risks of loss we assume pursuant to the
policies. If, as we expect, the charges that we collect from the policies exceed
our total costs in connection with the policies, we will earn a profit.
Otherwise, we will incur a loss.
The current and maximum rates of certain of our charges have been set
with reference to estimates of the amount of specific types of expenses or risks
that we will incur. In most cases, this prospectus identifies such expenses or
risks in the name of the charge: e.g., charge for administration and taxes, cost
of insurance charge, guaranteed minimum death benefit charge, and mortality and
expense risk charge. However, the fact that any charge bears the name of, or is
designed primarily to defray, a particular expense or risk does not mean that
the amount we collect from that charge will never be more than the amount of
such expense or risk. Nor does it mean that we may not also be compensated for
such expense or risk out of any other charges we are permitted to deduct by the
terms of the policies. The surrender charge, for example, is designed primarily
to defray sales expenses, but may also be used to defray other expenses
associated with your policy that we have not recovered by the time of any
surrender.
SUICIDE AND CERTAIN MISSTATEMENTS
If an insured person commits suicide within certain time periods, the
amount of death benefit we pay will be limited as described in the policy. Also,
if an application misstated the age or gender of an insured person, we will
adjust the amount of any death benefit as described in the policy.
WHEN WE PAY POLICY PROCEEDS
GENERAL. We will generally pay any death benefit, surrender, partial withdrawal,
or loan within seven days after we receive the request and any other required
items.
CLEARANCE OF CHECKS. We reserve the right to defer payment of that portion of
your account value that is attributable to a premium payment or loan repayment
made by check for a reasonable period of time (not to exceed 15 days) to allow
the check to clear the banking system.
DELAY OF VARIABLE INVESTMENT OPTION PROCEEDS. We reserve the right to defer
payment of any death benefit, transfer, loan or other distribution that is
derived from a variable investment option if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or trading on that
exchange is restricted; (b) the SEC has declared that an emergency exists, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the account value; or (c) the law
permits the delay for the protection of owners. If we need to defer
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calculation of values for any of the foregoing reasons, all delayed transactions
will be processed at the next available unit values.
DELAY TO CHALLENGE COVERAGE. We may challenge the validity of your insurance
policy based on any material misstatements in an application you have made to
us. We cannot make such challenges, however, beyond certain time limits set
forth in the policy. If the insured person dies within one of these limits, we
may delay payment of any proceeds until we decide whether to challenge the
policy.
CHANGES WE CAN MAKE
In addition to any of the other changes described in this prospectus,
we have the right to modify how we or Separate Account FP operate. We intend to
comply with applicable law in making any changes and, if necessary, we will seek
policyowner approval. We have the right to:
o combine two or more variable investment options or withdraw
assets relating to Accumulator Life from one variable
investment option and put them into another;
o end the registration of, or re-register, Separate Account FP
under the Investment Company Act of 1940;
o operate Separate Account FP under the direction of a
"committee" or discharge such a committee at any time;
o restrict or eliminate any voting rights or privileges of
policyowners (or other persons) that affect Separate Account
FP;
o operate Separate Account FP, or one or more of the variable
investment options, in any other form the law allows. This
includes any form that allows us to make direct investments,
in which case we may charge Separate Account FP an advisory
fee.
We may make any legal investments we wish for Separate Account FP. In
addition, we may disapprove any change in investment advisers or in investment
policy unless a law or regulation provides differently.
If we take any action that results in a material change in the
underlying investments of a variable investment option, we will notify you to
the extent required by law. We may, for example, cause the variable investment
option to invest in a mutual fund other than, or in addition to, EQ Advisors
Trust. If you then wish to transfer the amount you have in that option to
another variable investment option, you may do so.
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We may make any changes in the policy or make distributions from the
policy to the extent we deem necessary to ensure that your policy qualifies or
continues to qualify as life insurance for tax purposes. Any such change will
apply uniformly to all policies that are affected. We will give you written
notice of such changes. Subject to all applicable legal requirements, we also
may make other changes in the policies that do not reduce any net cash surrender
value, death benefit, account value, or other accrued rights or benefits.
REPORTS WE WILL SEND YOU
Shortly after the end of each year of your policy, we will send you a
report that includes information about your policy's current death benefit,
account value, cash surrender value (i.e., account value minus any current
surrender charge), policy loans, policy transactions and amounts of charges
deducted. We will send you individual notices to confirm your premium payments,
loan repayments, transfers and certain other policy transactions.
LEGAL PROCEEDINGS
Equitable Life and its affiliates are parties to various legal
proceedings. In our view, none of these proceedings would be considered material
with respect to a policyowner's interest in Separate Account FP, nor would any
of these proceedings be likely to have a material adverse effect upon the
Separate Account, our ability to meet our obligations under the policies, or the
distribution of the policies.
ILLUSTRATIONS OF POLICY BENEFITS
In order to help you understand how your policy values would vary
over time under different sets of assumptions, we will provide you with certain
illustrations when you purchase your policy and upon request thereafter. These
will be based on the age and gender of the insured person under your policy, and
such factors as the premium payment amount and assumed rates of return (within
limits) that you request. We have filed an example of such an illustration as an
exhibit to the registration statement referred to below.
SEC REGISTRATION STATEMENT
We have on file with the SEC a registration statement under the
Securities Act of 1933 that relates to the Accumulator Life policies. The
registration statement contains additional information that is not required to
be included in this prospectus. You may obtain this information, for a fee, from
the SEC's Public Reference Section at 450 5th Street, N.W., Washington, D.C.
20549 or, without charge, from the SEC's web site (www.sec.gov).
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HOW WE MARKET THE POLICIES
We offer variable life insurance policies (including Accumulator
Life) and variable annuity contracts through Equitable Distributors Inc.
("EDI"). The Investment Company Act of 1940, therefore, classifies EDI as a
"principal underwriter" of those policies and contracts. EDI also serves as a
principal underwriter of EQ Advisors Trust. EDI is a wholly owned subsidiary of
Equitable Life, with its address at 1290 Avenue of the Americas, New York, NY
10104. EDI is registered with the SEC as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. ("NASD"). In 1998 and 1999, we
paid EDI fees of $35,582,313 and $46,957,345, respectively, for its services
under a Distribution Agreement with Equitable Life and its separate accounts.
We sell Accumulator Life through licensed insurance agencies (both
affiliated and unaffiliated with Equitable Life) and their affiliated
broker-dealers (who are registered with the SEC and are members of the NASD).
Such agencies and their affiliated broker-dealers have entered into selling
agreements with EDI. The licensed insurance agents who sell our policies are
appointed as agents of Equitable Life, and are financial professionals of the
agencies' affiliated broker-dealer. Sales commissions will be paid by Equitable
Life to the agency which sells you this policy. The commissions don't cost you
anything above the charges and expenses already discussed elsewhere in this
prospectus. Generally, the agencies will receive maximum commissions of 4.50% of
the amount of the initial premium you pay. Alternatively, the agencies could
receive a lower initial commission, but receive additional commissions in later
years based on the policy's unloaned account value in the variable investment
options. The agency may be required to return to us any commissions on premiums
that we have refunded to a policyowner.
INSURANCE REGULATION THAT APPLIES TO EQUITABLE LIFE
We are regulated and supervised by the New York State Insurance
Department. In addition, we are subject to the insurance laws and regulations in
every state where we sell policies. We submit annual reports on our operations
and finances to insurance officials in all of these states. The officials are
responsible for reviewing our reports to see that we are financially sound. Such
regulation, however, does not guarantee or provide absolute assurance of our
soundness.
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Directors and principal officers
Set forth below is information about our directors and, to the extent
they are responsible for variable life insurance operations, our principal
officers. Unless otherwise noted, their address is 1290 Avenue of the Americas,
New York, New York 10104.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Francoise Colloc'h Director of Equitable Life (since July 1992). Member of the AXA Management Board and Group
AXA Executive President, Human Resources, Communication and Synergies of AXA (since January
23 Avenue Matignon 2000). Prior thereto, Senior Executive Vice President, AXA (1993-2000). Director or officer
75008 Paris, France of various subsidiaries and affiliates of the AXA Group.
- ------------------------------------------------------------------------------------------------------------------------------------
Henri de Castries Director of Equitable Life (since September 1993). Chairman of the Board of AXA Financial
AXA (since April 1998); Vice Chairman (February 1996 to April 1998). Vice Chairman of AXA's
23 Avenue Matignon Management Board (since January 2000). Prior thereto, Senior Executive Vice President,
75008 Paris, France Financial Services and Life Insurance Activities in the United States, Germany, the United
Kingdom and Benelux (1996 to 2000); Executive Vice President, Financial Services and Life
Insurance Activities (1993 to 1996) of AXA. Director or officer of various subsidiaries and
affiliates of the AXA Group. Director of DLJ and Alliance Capital Management Corporation,
the general partner of Alliance Holding and Alliance.
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph L. Dionne Director of Equitable Life (since May 1982). Retired Chairman of The McGraw-Hill Companies
The McGraw-Hill Companies (since January 2000); prior thereto, Chairman (April 1988 to January 2000) and Chief
1221 Avenue of the Americas Executive Officer (April 1983 to April 1998). Director of The McGraw-Hill Companies, Harris
New York, NY 10020 Corporation and Ryder System, Inc. Director of AXA Financial, Inc. (since May, 1992).
- ------------------------------------------------------------------------------------------------------------------------------------
Denis Duverne Director of Equitable Life (since February 1998). Executive Vice President, International
AXA (US-UK-Benelux) AXA and member of AXA Executive Board (since January, 2000). Director,
23, Avenue Matignon Alliance (since February 1996) and Donaldson Lufkin & Jenrette ("DLJ")(since February 1997).
75008 Paris, France
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Jean-Rene Fourtou Director of Equitable Life (since July 1992). Vice Chairman of the Management Board of
Rhone-Poulenc S.A. Aventis (since December 1999). Prior thereto, Chairman and Chief Executive Officer of
25, Quai Paul Doumer Rhone-Poulenc, S.A. (1986 to December 1999). Member of the Supervisory Board of AXA.
92408 Courbevoie Cedex Director of Schneider S.A., Paribas, and Groupe Pernod-Ricard. Member of the Consulting
France Council of Banque de France. Director, AXA Financial (since July, 1992).
- ------------------------------------------------------------------------------------------------------------------------------------
Norman C. Francis Director of Equitable Life (since March 1989). President of Xavier University of Louisiana;
Xavier University of Louisiana Director, First National Bank of Commerce, New Orleans, LA, Piccadilly Cafeterias, Inc.,
7325 Palmetto Street and Entergy Corporation.
New Orleans, LA 70125
- ------------------------------------------------------------------------------------------------------------------------------------
Donald J. Greene Director of Equitable Life (since July 1991). Of Counsel, LeBoeuf, Lamb, Greene & MacRae,
LeBouef, Lamb, Greene & MacRae, L.L.P. L.L.P. (since 1999). Prior thereto, Partner of the firm (1965 to 1999). Director of AXA
125 West 55th Street Financial (since May 1992).
New York, NY 10019-4513
- ------------------------------------------------------------------------------------------------------------------------------------
John T. Hartley Director of Equitable Life (since August 1987). Currently a Director and retired Chairman
1025 NASA Boulevard and Chief Executive Officer of Harris Corporation (retired July 1995); previously held other
Melbourne, FL 32919 officerships with Harris Corporation. Director of AXA Financial (since May 1992); Director
of the McGraw Hill Companies.
- ------------------------------------------------------------------------------------------------------------------------------------
John H.F. Haskell Jr. Director of Equitable Life (since July 1992); Director of AXA Financial (since July 1992);
SBC Warburg Dillon Read LLC Director, Senior Advisor of Warburg Dillon Read LLC (since 1999); Prior thereto, Managing
535 Madison Avenue Director and member of its Board of Directors (1975-1999); Chairman, Supervisory Board,
New York, NY 10022 Dillon Read (France) Gestion (until 1998); Director, Pall Corporation (since November 1998).
- ------------------------------------------------------------------------------------------------------------------------------------
Mary (Nina) Henderson Director of Equitable Life (since December 1996). Corporate Vice President, Core Business
BESTFOODS Development of Bestfoods (since June 1999). Prior thereto, President, Bestfoods Grocery and
International Plaza Vice President, Bestfoods (formerly CPC International, Inc.)(1997 to 1999). President,
700 Sylvan Avenue Bestfoods Specialty Markets Group (1993 to 1997); Director, Hunt Corporation and PACTIV
Englewood Cliffs, NJ 07632-9976 Corporation. Director, AXA Financial (since December 1996).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
W. Edwin Jarmain Director of Equitable Life (since July 1992). President, Jarmain Group Inc. (since 1979);
Jarmain Group Inc. and officer or director of several affiliated companies. Director, DLJ (since October
121 King Street West 1992), AXA Insurance (Canada), Anglo Canada General Insurance Company, and AXA Pacific
Suite 2525 Insurance Company, and Alternate Director, AXA Asia Pacific Holdings Limited. Chairman
Toronto, Ontario M5H 3T9 (non-executive) and Director, FCA International Ltd. (January 1994 to May 1998). Director
Canada of AXA Financial, Inc. (since July 1992).
- ------------------------------------------------------------------------------------------------------------------------------------
George T. Lowy Director of Equitable Life (since July 1992). Partner, Cravath, Swaine & Moore. Director,
Cravath, Swaine & Moore Eramet.
825 Eighth Avenue
New York, NY 10019
- ------------------------------------------------------------------------------------------------------------------------------------
Didier Pineau-Valencienne Director of Equitable Life (since February 1996). Vice Chairman Credit Suisse First Boston
Credit Suisse, First Boston (since March 1999). Chairman and Chief Executive Officer (1981 to February 1999)(now
64, rue de Miromesnel Honorary Chairman) Schneider Electric. Member of the Supervisory Board of AXA. Director of
75008 Paris, France CGIP, Aventis (formerly Rhone-Poulenc, S.A.), Sema Group PLC (UK), Soft Computing and Swiss
Helvetic Fund; member of the Advisory Board of Booz-Allen & Hamilton. Director of AXA
Financial, Inc. (since February 1996).
- ------------------------------------------------------------------------------------------------------------------------------------
George J. Sella, Jr. Director of Equitable Life (since May 1987). Retired Chairman and Chief Executive Officer
P.O. Box 397 of American Cyanamid Company (retired April 1993); previously held other officerships with
Newton, NJ 07860 American Cyanamid. Director of AXA Financial (since May 1992) and Coulter Pharmaceutical
(since May 1987).
- ------------------------------------------------------------------------------------------------------------------------------------
Peter J. Tobin Director of Equitable Life (since March 1999); Dean of the Peter J. Tobin College of
St. John's University Business Administration, St. John's University (since August 1998); Chief Financial
8000 Utopia Parkway Officer, Chase Manhattan Corp. (1985 to 1997).
Jamaica, NY 11439
- ------------------------------------------------------------------------------------------------------------------------------------
Dave H. Williams Director of Equitable Life (since March 1991). Chairman (since 1977) and former Chief
Alliance Capital Management Executive Officer (1977 to January 1999), of Alliance, and Chairman or Director of numerous
Corporation subsidiaries and affiliated companies of Alliance. Senior Executive Vice President of AXA
1345 Avenue of the Americas (since January 1997). Director of AXA Financial (since May 1992).
New York, NY 10105
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICER-DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Michael Hegarty Director of Equitable Life (since January 1998). President (since January 1998) and Chief
Operating Officer (since February 1998), Equitable Life. Senior Vice Chairman (since
November 1999), Vice Chairman (since April 1998), Senior Executive Vice President (January
1998 to April 1998), and Director and Chief Operating Officer (both since January 1998),
AXA Financial. Director, President and Chief Operating Officer, Equitable of Colorado
(since December 1999); AXA Client Solutions & Equitable Distribution Holding Corp. (since
September 1999). Vice Chairman (from 1996 to 1997), Chase Manhattan Corporation. Vice
Chairman (from 1995 to 1996) and Senior Executive Vice President (from 1991 to 1995),
Chemical Bank. Director, ACMC, Inc. ("ACMC")(since March 1998). Trustee, EQ Advisors Trust.
Director, Equitable Capital Management Corporation ("ECMC") (since March 1998); Alliance
and DLJ (both since May 1998).
- ------------------------------------------------------------------------------------------------------------------------------------
Edward D. Miller Director of Equitable Life (since August 1997). Chairman of the Board (since January 1998),
Chief Executive Officer (since August 1997), President (August 1997 to January 1998),
Equitable Life. Director, President and Chief Executive Officer, (all since August 1997),
AXA Financial. Director, Chairman of the Board and Chief Executive Officer, Equitable of
Colorado (since December 1999); AXA Client Solutions and Equitable Distribution Holding
Corp. (since September 1999). Member of the Management Board of AXA (since January 2000);
Senior Vice Chairman, Chase Manhattan Corporation (March 1996 to April 1997). President
(January 1994 to March 1996) and Vice Chairman (December 1991 to January 1994), Chemical
Bank. Director, Alliance (since August 1997), DLJ (since November 1997), ECMC (since March
1998), ACMC, Inc. (since March 1998), and AXA Canada (since September 1998). Director,
KeySpan Energy.
- ------------------------------------------------------------------------------------------------------------------------------------
Stanley B. Tulin Director and Vice Chairman of the Board (since February 1998), and Chief Financial Officer
(since May 1996), Equitable Life. Vice Chairman of the Board (since November 1999) and
Chief Financial Officer (since May 1997) and prior thereto, Senior Executive Vice President
(February 1998 to November 1999), AXA Financial. Director, Vice Chairman and Chief
Financial Officer (since December 1999) Equitable of Colorado; AXA Client Solutions, LLC
and Equitable Distributions Holding Corp. (since September 1999). Vice President (until
1998), EQ Advisors Trust. Director, Alliance (since July 1997), and DLJ (since June 1997).
Prior thereto, Chairman, Insurance Consulting and Actuarial Practice, Coopers & Lybrand,
L.L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Leon B. Billis Executive Vice President (since February 1998) and Chief Information Officer (since
November 1994), Equitable Life. Previously held other officerships with Equitable Life;
Director, J.M.R. Realty Services, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Derry E. Bishop Executive Vice President (since September 1998), Chief Agency Officer, (since December
1997), and Senior Vice President (January 1995 to September 1998), Equitable Life; Director
and Executive Vice President, AXA Advisors LLC and Executive Vice President and Chief Agency
Officer, AXA Client Solutions, LLC (all since September 1999). Prior thereto, Director
(since 1995) and Executive Vice President (since 1994) EQF (now AXA Advisors).
- ------------------------------------------------------------------------------------------------------------------------------------
Harvey Blitz Senior Vice President, Equitable Life. Senior Vice President, AXA Financial. Director and
Chairman, Frontier Trust Company ("Frontier"). Director, EQF (now AXA Advisors)(until
September 1999). Executive Vice President and Director (since September 1999), AXA
Advisors, Director (until May 1996), Equitable Distributors, Inc. ("EDI"). Director and
Senior Vice President, AXA Network, LLC (formerly EquiSource). Director and Officer of
various Equitable Life affiliates. Previously held other officerships with Equitable Life
and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Kevin R. Byrne Senior Vice President and Treasurer, Equitable Life and AXA Financial. Senior Vice
President and Treasurer, AXA Client Solutions, LLC and Equitable Distributors (since
September 1999); Equitable of Colorado (since December 1999). Treasurer, Frontier (since
1990) and AXA Network, LLC (since 1999). President and Chief Executive Officer (since
September 1997), and prior thereto, Vice President and Treasurer, Equitable Casualty
Insurance Company ("Casualty"). Vice President and Treasurer, EQ ADVISORS TRUST (since
March 1997). Director, Chairman, President and Chief Executive Officer, Equitable JV
Holdings (since August 1997). Director (since July 1997), and Senior Vice President and
Chief Financial Officer (since April 1998), ACMC and ECMC. Previously held other
officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
John A. Caroselli Executive Vice President (since September 1998), Equitable Life; Senior Vice President,
Equitable Life (February 1998 to September 1998); Senior Vice President, Chase Manhattan
Corp. (1996 to 1998); Vice President, Chemical Bank (1991 to 1996).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
121315v6
55
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Judy A. Faucett Senior Vice President, Equitable Life, (since September 1996) and Actuary (September 1996
to December 1998). Partner and Senior Actuarial Consultant, Coopers & Lybrand L.L.P.
(January 1989 to August 1996).
- ------------------------------------------------------------------------------------------------------------------------------------
Alvin H. Fenichel Senior Vice President and Controller, Equitable Life and AXA Financial. Senior Vice
President and Controller, The Equitable of Colorado, Inc. (since December 1999). Previously
held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Paul J. Flora Senior Vice President and Auditor, Equitable Life. Vice President and Auditor, AXA
Financial.
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Garber Executive Vice President and Chief Legal Officer (since November 1999), Equitable Life;
prior thereto, Executive Vice President and General Counsel. General Counsel of AXA
Financial. Previously held other officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Donald R. Kaplan Senior Vice President (since September 1999), Chief Compliance Officer and Associate General
Counsel, Equitable Life. Previously held other officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------------------
Michael S. Martin Executive Vice President (since September 1998) and Chief Marketing Officer (since December
1997), Equitable Life; prior thereto, Senior Vice President and Chief Marketing Officer.
Chairman and Chief Executive Officer, AXA Advisors LLC (since September 1999). Vice
President, EQ Advisors Trust (until April 1998). Director, Equitable Underwriting and Sales
Agency (Bahamas), Ltd. and AXA Network, LLC; President (since February 2000); Executive
Vice President (since December 1998), Colorado; prior thereto, Director and Senior Vice
President (since December 1998). Previously held other officerships with Equitable Life and
its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard J. Matteis Executive Vice President, Equitable Life (since May 1998); Executive Vice President, Chase
Manhattan Corporation (January 1983 to June 1997); Director, EQF (now AXA Advisors)(October
1998 to May 1999).
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
121315v6
56
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable Life. Executive Vice
President (since May 1995) and Chief Investment Officer (since July 1995), AXA Financial.
Chairman, President and Trustee (since March 1997), EQ ADVISORS TRUST. Executive Vice
President and Chief Investment Officer, Equitable of Colorado (since December 1999),
Executive Vice President, AXA Client Solutions (since September 1999). Director, Alliance,
and Equitable Real Estate (until June 1997). Executive Vice President, EQF (now AXA
Advisors)(November 1996 to September 1999). Director, EREIM Managers Corp. (since July
1997), and EREIM LP Corp. (since October 1997).
- ------------------------------------------------------------------------------------------------------------------------------------
Brian S. O'Neil Executive Vice President, Equitable Life (since June 1998). Executive Vice President, AXA
Financial and AXA Client Solutions (since September 1999). Director of Investment, AXA
Investment Management (January 1998 to June 1998); Chief Investment Officer, AXA Investment
Management (July 1995 to January 1998). Trustee (since September 1999), EQ ADVISORS TRUST.
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony C. Pasquale Senior Vice President, Equitable Life and AXA Client Solutions (since September 1999).
Director, Chairman and Chief Operating Officer, Casualty, (since September 1997). Director,
Equitable Agri-Business, Inc. (until June 1997). Previously held other officerships with
Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
Pauline Sherman Senior Vice President (since February 1999); Vice President, Secretary and Associate General
Counsel, Equitable Life and AXA Financial, (since September 1995). Senior Vice President,
Secretary and Associate General Counsel, AXA Financial and AXA Client Solutions (since
November 1999). Senior Vice President and Secretary, Equitable of Colorado (since December
1999). Previously held other officerships with Equitable Life.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard V. Silver Senior Vice President (since February 1995) and General Counsel (since November 1999)
Equitable Life; prior thereto, Deputy General Counsel (1996-1999). Senior Vice President
and Associate General Counsel, AXA Financial (since September 1996). Senior Vice President
and General Counsel, AXA Client Solutions (since November 1999). Vice President and General
Counsel, Equitable of Colorado (since December 1999). Director, AXA Advisors. Senior Vice
President and General Counsel, EIC (June 1997 to March 1998). Previously held other
officerships with Equitable Life and its affiliates.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
121315v6
57
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL BUSINESS EXPERIENCE
BUSINESS ADDRESS WITHIN PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER OFFICERS (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Jose S. Suquet Senior Executive Vice President (since February 1998), Chief Distribution Officer (since
December 1997) and Chief Agency Officer (August 1994 to December 1997), Equitable Life.
Senior Executive Vice President and Chief Distribution Officer, AXA Client Solutions (since
September 1999). Senior Executive Vice President, Equitable of Colorado (since December
1999). Executive Vice President (since May 1996), AXA Financial. Chairman (since December
1997), EDI. Prior thereto, Agency Manager.
- ------------------------------------------------------------------------------------------------------------------------------------
Gregory G. Wilcox Executive Vice President (since September 1998), Senior Vice President (May 1992 to
September 1998), Equitable Life. Executive Vice President (since November 1999), AXA
Financial; prior thereto, Senior Vice President.
- ------------------------------------------------------------------------------------------------------------------------------------
R. Lee Wilson Executive Vice President (since May 1998) and Deputy Chief Financial Officer (September
1998 to July 1999), Equitable Life. Executive Vice President, AXA Client Solutions (since
September 1999). Prior thereto, Executive Vice President, Chase Manhattan Bank.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
121315v6
58
<PAGE>
Section 8
Financial statements of Separate Account FP and Equitable Life
The financial statements of Separate Account FP as of December 31,
1999 and for each of the three years in the period ended December 31, 1999 and
the financial statements of Equitable Life as of December 31, 1999 and 1998 and
for each of the three years in the period ended December 31, 1999 included in
this prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing. The financial statements of
Equitable Life have relevance for the policies only to the extent that they bear
upon the ability of Equitable Life to meet its obligations under the policies.
121315v6
59
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Report of Independent Accountants.................................................................................. FSA-2
Financial Statements:
Statements of Assets and Liabilities, December 31, 1999......................................................... FSA-3
Statements of Operations for the Years Ended December 31, 1999, 1998 and 1997................................... FSA-6
Statements of Changes in Net Assets for the Years Ended December 31, 1999, 1998 and 1997........................ FSA-11
Notes to Financial Statements................................................................................... FSA-17
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants.................................................................................. F-1
Consolidated Financial Statements:
Consolidated Balance Sheets, December 31, 1999 and 1998......................................................... F-2
Consolidated Statements of Earnings, Years Ended December 31, 1999, 1998 and 1997............................... F-3
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1999, 1998 and 1997................... F-4
Consolidated Statements of Cash Flows, Years Ended December 31, 1999, 1998 and 1997............................. F-5
Notes to Consolidated Financial Statements...................................................................... F-6
</TABLE>
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
The Equitable Life Assurance Society of the United States
and Policyowners of Separate Account FP
of The Equitable Life Assurance Society of the United States
In our opinion, the accompanying statements of assets and liabilities and the
related statements of operations and of changes in net assets present fairly, in
all material respects, the financial position of the following Variable
Investment Options: Alliance Money Market, Alliance High Yield, Alliance Common
Stock, EQ/Alliance Premier Growth, Capital Guardian Research, Capital Guardian
U.S. Equity, Merrill Lynch Basic Value Equity, MFS Growth with Income, MFS
Research, EQ/Putnam Growth & Income Value, Morgan Stanley Emerging Markets
Equity, Alliance Aggressive Stock, Alliance Small Cap Growth, EQ/Evergreen, MFS
Emerging Growth Companies, EQ/Evergreen Foundation, Merrill Lynch World
Strategy, BT Equity 500 Index, BT International Equity Index, JPM Core Bond,
EQ/Putnam Investors Growth and EQ/Putnam International Equity ("EQ Advisors
Trust Variable Investment Options"), 22 of the separate Variable Investment
Options of The Equitable Life Assurance Society of the United States ("Equitable
Life") Separate Account FP at December 31, 1999 and the results of each of their
operations and changes in each of their net assets for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements are the responsibility of
Equitable Life's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted in
the United States of America which 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, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of shares owned in The EQ Advisors Trust at
December 31, 1999 with the transfer agent, provide a reasonable basis for the
opinion expressed above. The rates of return information presented in Note 6 for
the year ended December 31, 1992 and for each of the periods indicated prior
thereto, were audited by other independent accountants whose report dated
February 16, 1993 expressed an unqualified opinion on the financial statements
containing such information.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
FSA-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
EQ/
ALLIANCE CAPITAL
ALLIANCE ALLIANCE ALLIANCE PREMIER GUARDIAN
MONEY MARKET HIGH YIELD COMMON STOCK GROWTH RESEARCH
------------ ------------ -------------- ----------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 342,765,909............................. $344,082,723
177,773,173............................. $149,030,820
3,081,451,600............................. $3,783,859,850
46,147,852............................. $51,216,559
182,262............................. $193,355
494,512.............................
38,508,013.............................
391,533.............................
38,563,600.............................
23,253,533.............................
Receivable for Trust shares sold ................... -- 5,046 -- -- --
Receivable for policy-related
transactions..................................... 4,909,455 798,616 15,840,922 283,944 24,204
------------ ------------ -------------- ----------- --------
Total Assets........................................ $348,992,178 $149,834,482 $3,799,700,772 $51,500,503 $217,559
------------ ------------ -------------- ----------- --------
LIABILITIES
Payable for Trust shares purchased.................. $ 4,563,801 $ -- $ 19,831,580 $ 283,146 $ 24,204
Payable for policy-related transactions............. -- -- -- -- --
------------ ------------ -------------- ----------- --------
Total Liabilities................................... 4,563,801 -- 19,831,580 283,146 24,204
------------ ------------ -------------- ----------- --------
NET ASSETS.......................................... $344,428,377 $149,834,482 $3,779,869,192 $51,217,357 $193,355
============ ============ ============== =========== ========
Amount retained by Equitable
Life in Separate Account FP (Note 4)............... $ 16,198 $ 1,280 $ 80,914 $ 3,545 $ 219
Net Assets Attributable
to Contractowners................................ 344,412,179 149,833,202 3,779,788,278 51,213,812 193,136
------------ ------------ -------------- ----------- --------
NET ASSETS.......................................... $344,428,377 $149,834,482 $3,779,869,192 $51,217,357 $193,355
============ ============ ============== =========== ========
<CAPTION>
---------------------------------------------------------------------------
MFS EQ/PUTNAM
CAPITAL MERRILL LYNCH GROWTH GROWTH &
GUARDIAN BASIC VALUE WITH MFS INCOME
U.S. EQUITY EQUITY INCOME RESEARCH VALUE
----------- ------------ --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 342,765,909.............................
177,773,173.............................
3,081,451,600.............................
46,147,852.............................
182,262.............................
494,512............................. $511,837
38,508,013............................. $39,778,636
391,533............................. $412,169
38,563,600............................. $48,597,586
23,253,533............................. $21,780,737
Receivable for Trust shares sold ................... -- -- -- 252,705 --
Receivable for policy-related
transactions..................................... -- 23,002 8,035 -- 82,740
-------- ----------- -------- ----------- -----------
Total Assets........................................ $511,837 $39,801,638 $420,204 $48,850,291 $21,863,477
-------- ----------- -------- ----------- -----------
LIABILITIES
Payable for Trust shares purchased.................. $ -- $ 11,329 $ 4,490 $ -- $ 69,698
Payable for policy-related transactions............. -- -- -- 212,939 --
-------- ----------- -------- ----------- -----------
Total Liabilities................................... -- 11,329 4,490 212,939 69,698
-------- ----------- -------- ----------- -----------
NET ASSETS.......................................... $511,837 $39,790,309 $415,714 $48,637,352 $21,793,779
======== =========== ======== =========== ===========
Amount retained by Equitable
Life in Separate Account FP (Note 4)............... $ 387 $ 81,800 $ 3,570 $ 142,291 $ 69,602
Net Assets Attributable
to Contractowners................................ 511,450 39,708,509 412,144 48,495,061 21,724,177
-------- ----------- -------- ----------- -----------
NET ASSETS.......................................... $511,837 $39,790,309 $415,714 $48,637,352 $21,793,779
======== =========== ======== =========== ===========
</TABLE>
- ---------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
MORGAN
STANLEY MFS
EMERGING ALLIANCE ALLIANCE EMERGING
MARKETS AGGRESSIVE SMALL CAP EQ/ GROWTH
EQUITY STOCK GROWTH EVERGREEN COMPANIES
----------- -------------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 29,914,338.................... $40,958,925
892,630,699.................... $1,051,440,590
46,097,819.................... $70,174,096
27,230.................... $28,680
160,950,031.................... $238,027,993
2,749....................
4,518,718....................
17,648....................
1,191....................
Receivable for Trust shares sold........... -- 2,154,914 22,666,998 -- --
Receivable for policy-related
transactions............................ 82,278 -- -- -- 1,271,988
----------- -------------- ----------- ------- ------------
Total Assets............................... $41,041,203 $1,053,595,504 $92,841,094 $28,680 $239,299,981
----------- -------------- ----------- ------- ------------
LIABILITIES
Payable for Trust shares purchased......... $ 350,654 $ -- $ -- $ -- $ 1,116,940
Payable for policy-related
transactions............................ -- 1,550,441 22,460,673 -- --
----------- -------------- ----------- ------- ------------
Total Liabilities.......................... 350,654 1,550,441 $22,460,673 -- 1,116,940
----------- -------------- ----------- ------- ------------
NET ASSETS.................................. $40,690,549 $1,052,045,063 $70,380,421 $28,680 $238,183,041
=========== =============== =========== ======= ============
Amount retained by Equitable Life
in Separate Account FP (Note 4).......... $ 1,767,601 $ 3,855 $ 527,774 $ 18 $ 386,768
Net Assets Attributable
to Policyowners.......................... 38,922,948 1,052,041,208 69,852,647 28,662 237,796,273
----------- -------------- ----------- ------- ------------
NET ASSETS.................................. $40,690,549 $1,052,045,063 $70,380,421 $28,680 $238,183,041
=========== =============== =========== ======= ============
<CAPTION>
-----------------------------------------------------------------
BT BT INTER-
EQ/ MERRILL EQUITY NATIONAL
EVERGREEN LYNCH 500 EQUITY
FOUNDATION WORLD STRATEGY INDEX INDEX
----------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 29,914,338.....................
892,630,699.....................
46,097,819.....................
27,230.....................
160,950,031.....................
2,749..................... $2,848
4,518,718..................... $5,372,189
17,648..................... $18,699
1,191..................... $1,260
Receivable for Trust shares sold............ -- -- -- --
Receivable for policy-related
transactions............................. -- 1,267 -- --
------ ---------- ------- ------
Total Assets................................ $2,848 $5,373,456 $18,699 $1,260
------ ---------- ------- ------
LIABILITIES
Payable for Trust shares purchased.......... $ -- $ 1,232 $ -- $ --
Payable for policy-related
transactions............................. -- -- -- --
------ ---------- ------- ------
Total Liabilities........................... -- 1,232 -- --
------ ---------- ------- ------
NET ASSETS.................................. $2,848 $5,372,224 $18,699 $1,260
====== ========== ======= ======
Amount retained by Equitable Life
in Separate Account FP (Note 4).......... $ 2 $ 494,770 $ 11 $ --
Net Assets Attributable
to Policyowners.......................... 2,846 4,877,454 18,688 1,260
------ ---------- ------- ------
NET ASSETS.................................. $2,848 $5,372,224 $18,699 $1,260
====== ========== ======= ======
</TABLE>
- ---------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF ASSETS AND LIABILITIES (CONCLUDED)
DECEMBER 31, 1999
<TABLE>
<CAPTION>
---------------------------------------------------
JPM EQ/PUTNAM EQ/PUTNAM
CORE INVESTORS INTERNATIONAL
BOND GROWTH EQUITY
------- ------- -------------
<S> <C> <C> <C>
ASSETS
Investments in shares of
the Trust -- at market
value (Notes 2 and 6)
Cost: $ 2,308.......................................... $2,192
10,674.......................................... $11,411
715.......................................... $716
Receivable for Trust shares sold............................ -- -- --
Receivable for policy-related
transactions............................................. -- -- --
------ ------- ----
Total Assets................................................ $2,192 $11,411 $716
------ ------- ----
LIABILITIES
Payable for Trust shares purchased.......................... $ -- $ -- $ --
Payable for policy-related
transactions............................................. -- -- --
------ ------- ----
Total Liabilities........................................... -- -- --
------ ------- ----
NET ASSETS.................................................. $2,192 $11,411 $716
====== ======= ====
Amount retained by Equitable Life
in Separate Account FP (Note 4).......................... -- $ 5 $ 0
Net Assets Attributable
to Contractowners........................................ 2,192 11,406 716
------ ------- ----
NET ASSETS.................................................. $2,192 $11,411 $716
====== ======= ====
</TABLE>
- ---------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET ALLIANCE HIGH YIELD
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ------------ ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust............... $13,943,193 $ 10,719,684 $ 9,754,675 $ 17,378,455 $ 18,449,747 $12,918,934
Expenses (Note 3):
Mortality and expense risk charges..... 1,613,234 1,204,220 1,101,168 889,065 1,007,106 789,982
----------- ------------ ----------- ------------ ------------ -----------
NET INVESTMENT INCOME........................ 12,329,959 9,515,464 8,653,507 16,489,390 17,442,641 12,128,952
----------- ------------ ----------- ------------ ------------ -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss)
on investments........................ 517,935 (161,314) (513,800) (15,192,553) (2,344,392) 936,554
Realized gain distribution
from the Trust........................ 10,344 7,750 13,435 161,999 3,396,523 6,365,633
----------- ------------ ----------- ------------ ------------ -----------
NET REALIZED GAIN (LOSS)..................... 528,279 (153,564) (500,365) (15,030,554) 1,052,131 7,302,187
----------- ------------ ----------- ------------ ------------ -----------
Unrealized appreciation (depreciation)
on investments:
Beginning of period.................... 1,536,450 (804,349) 24,023 (20,898,855) 8,622,836 5,664,824
----------- ------------ ----------- ------------ ------------ -----------
End of period.......................... 1,316,815 (1,536,450) (804,349) (28,742,353) (20,898,854) 8,622,836
----------- ------------ ----------- ------------ ------------ -----------
Change in unrealized appreciation
(depreciation) during the period......... (219,635) (732,101) (780,326) (7,843,498) (29,521,690) 2,958,012
----------- ------------ ----------- ------------ ------------ -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS.................. 308,644 (578,537) (279,961) (22,874,052) (28,469,559) 10,260,199
----------- ------------ ----------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................... $12,638,603 $(10,094,001) $(8,933,468) $ (6,384,662) $(11,026,918) $22,389,151
=========== ============ =========== ============ ============ ===========
</TABLE>
- -------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-6
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
------------------------------------------------------------------------
EQ/
ALLIANCE CAPITAL
PREMIER GUARDIAN
ALLIANCE COMMON STOCK GROWTH (C) RESEARCH (D)
----------------------------------------- ----------- -----------
1999 1998 1997 1999 1999
------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust................... $ 20,107,533 $ 15,939,680 $ 10,668,337 $ 30,540 $ 280
Expenses (Note 3):
Mortality and expense risk charges......... 19,069,959 14,600,706 11,435,936 63,730 209
------------ ------------ ------------ ---------- -------
NET INVESTMENT INCOME............................ 1,037,574 1,338,974 (767,599) (33,190) 71
------------ ------------ ------------ ---------- -------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments........ 221,690,581 169,109,310 53,841,049 83,605 2,810
Realized gain distribution from the Trust.. 497,324,765 353,834,250 164,814,473 106,890 27
------------ ------------ ------------ ---------- -------
NET REALIZED GAIN (LOSS)......................... 719,015,346 522,943,560 218,655,522 190,495 2,837
------------ ------------ ------------ ---------- -------
Unrealized appreciation (depreciation)
on investments:
Beginning of period..................... 689,309,204 567,231,009 294,432,897 -- --
End of period........................... 702,408,250 689,309,204 567,231,009 5,068,707 11,093
------------ ------------ ------------ ---------- -------
Change in unrealized appreciation
(depreciation) during the period........... 13,099,046 122,078,195 272,798,112 5,068,707 11,093
------------ ------------ ------------ ---------- -------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS......................... 732,114,392 645,021,755 491,453,634 5,259,202 13,930
------------ ------------ ------------ ---------- -------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS..................... $733,151,966 $646,360,729 $490,686,035 $5,226,012 $14,001
============ ============ ============ ========== =======
<CAPTION>
----------------------------------------------------
CAPITAL
GUARDIAN
U.S. MERRILL LYNCH
EQUITY (D) BASIC VALUE EQUITY (A)
--------- ---------------------------------------
1999 1999 1998 1997
--------- --------- -------- --------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust................... $ 1,159 $ 468,257 $192,441 $ 35,810
Expenses (Note 3):
Mortality and expense risk charges......... 378 153,456 66,427 9,349
------- ---------- -------- --------
NET INVESTMENT INCOME............................ 781 314,801 126,014 26,461
------- ---------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments........ 451 426,168 207,032 6,656
Realized gain distribution from the Trust.. 1,508 1,963,197 667,083 33,738
------- ---------- -------- --------
NET REALIZED GAIN (LOSS)......................... 1,959 2,389,365 874,115 40,394
------- ---------- -------- --------
Unrealized appreciation (depreciation)
on investments:
Beginning of period..................... -- (91,959) 135,003 --
End of period........................... 17,325 1,270,622 (91,959) 135,003
------- ---------- -------- --------
Change in unrealized appreciation
(depreciation) during the period........... 17,325 1,362,581 (226,962) 135,003
------- ---------- -------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS......................... 19,284 3,751,946 647,153 175,397
------- ---------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS..................... $20,065 $4,066,747 $773,167 $201,858
======= ========== ======== ========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-7
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
------------------------------------------------------
MFS
GROWTH
WITH
INCOME (C) MFS RESEARCH (A)
--------- ---------------------------------------
1999 1999 1998 1997
--------- ---------- ---------- --------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 1,268 $ 52,831 $ 71,137 $ 20,442
Expenses (Note 3):
Mortality and expense risk charges.......... 431 208,639 86,044 13,127
------- ---------- ---------- --------
NET INVESTMENT INCOME............................. 837 (155,808) (14,907) 7,315
------- ---------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... (227) 995,232 494,412 6,989
Realized gain distribution from the Trust... -- 1,086,222 -- 81,156
------- ---------- ---------- --------
NET REALIZED GAIN (LOSS).......................... (227) 2,081,454 494,412 88,145
------- ---------- ---------- --------
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... -- 3,313,063 249,382 --
End of period............................ 20,637 10,033,987 3,313,063 249,382
------- ---------- ---------- --------
Change in unrealized appreciation
(depreciation) during the period............ 20,637 6,720,924 3,063,681 249,382
------- ---------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... 20,410 8,802,378 3,558,093 337,527
------- ---------- ---------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $21,247 $8,646,570 $3,543,186 $344,842
======= ========== ========== ========
<CAPTION>
-----------------------------------------------------------------------------
EQ/PUTNAM MORGAN STANLEY
GROWTH & INCOME VALUE (A) EMERGING MARKETS EQUITY (B)
------------------------------------ --------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- -------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 278,910 $ 143,999 $ 33,273 $ -- $ 37,240 $ 16,623
Expenses (Note 3):
Mortality and expense risk charges.......... 110,374 56,995 9,655 66,405 23,921 2,862
----------- ---------- --------- ----------- ----------- -----------
NET INVESTMENT INCOME............................. 168,536 87,004 23,618 (66,405) 13,319 13,761
----------- ---------- --------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... 276,186 209,398 1,078 363,825 (637,290) (14,566)
Realized gain distribution from the Trust... 1,499,307 130,047 27,226 394,053 -- --
----------- ---------- --------- ----------- ----------- -----------
NET REALIZED GAIN (LOSS).......................... 1,775,493 339,445 28,304 757,878 (637,290) (14,566)
----------- ---------- --------- ----------- ----------- -----------
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... 1,160,602 269,561 -- (2,942,633) (1,079,388) --
End of period............................ (1,472,796) 1,160,602 269,561 11,044,586 (2,942,633) (1,079,338)
----------- ---------- --------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation) during the period............ (2,633,398) 891,041 269,561 13,987,219 (1,863,245) (1,079,388)
----------- ---------- --------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... (857,905) 1,230,486 297,865 14,745,097 (2,500,535) (1,093,954)
----------- ---------- --------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $ (689,369) $1,317,490 $321,483 $14,678,692 $(2,487,216) $(1,080,193)
=========== ========== ======== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-8
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
ALLIANCE
ALLIANCE AGGRESSIVE STOCK SMALL CAP GROWTH (A)
----------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 3,163,286 $ 4,461,389 $ 1,311,613 $ -- $ 4,062 $ 4,189
Expenses (Note 3):
Mortality and expense risk charges.......... 5,481,701 5,581,296 5,299,127 284,347 215,285 41,540
------------ ------------ ------------ ----------- ----------- ---------
NET INVESTMENT INCOME............................. (2,318,415) (1,119,907) (3,987,514) (284,347) (211,223) (37,351)
------------ ------------ ------------ ----------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... (27,888,194) (39,688,312) 28,217,939 4,345,484 (7,585,521) (609,208)
Realized gain distribution from the Trust... 61,642,419 46,528,461 79,729,154 -- -- 545,833
------------ ------------ ------------ ----------- ----------- ---------
NET REALIZED GAIN (LOSS).......................... 33,754,225 6,840,149 107,947,093 4,345,484 (7,585,521) (63,375)
------------ ------------ ------------ ----------- ----------- ---------
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... 26,715,214 32,695,620 46,617,235 8,780,955 771,812 --
End of period............................ 158,809,890 26,715,214 32,695,620 24,076,277 8,780,955 771,812
------------ ------------ ------------ ----------- ----------- ---------
Change in unrealized appreciation
(depreciation) during the period............ 132,094,676 (5,980,406) (13,921,615) 15,295,322 8,009,143 771,812
------------ ------------ ------------ ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... 165,848,901 859,743 94,025,478 19,640,806 423,622 708,437
------------ ------------ ------------ ----------- ----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $163,530,486 $ (260,164) $ 90,037,964 $19,356,459 $ 212,399 $ 671,086
============ ============ ============ =========== =========== =========
<CAPTION>
-----------------------------------------------------------
EQ/
EVER- MFS EMERGING
GREEN (C) GROWTH COMPANIES(A)
-------- --------------------------------------------
1998 1999 1998 1997
-------- ----------- ----------- --------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 99 $ -- $ 969 $ 24,358
Expenses (Note 3):
Mortality and expense risk charges.......... 18 640,976 157,484 18,835
------ ----------- ----------- --------
NET INVESTMENT INCOME............................. 81 (640,976) (156,515) 5,523
------ ----------- ----------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... 20 13,577,250 4,270,964 161,034
Realized gain distribution from the Trust... -- 3,969,879 -- 296,998
------ ----------- ----------- --------
NET REALIZED GAIN (LOSS).......................... 20 17,547,129 4,270,964 458,032
------ ----------- ----------- --------
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... -- 6,996,177 171,320 --
End of period............................ 1,450 77,077,961 6,996,177 171,320
------ ----------- ----------- --------
Change in unrealized appreciation
(depreciation) during the period............ 1,450 70,081,784 6,824,857 171,320
------ ----------- ----------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... 1,470 87,628,913 11,095,821 629,352
------ ----------- ----------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $1,551 $86,987,937 $10,939,306 $634,875
====== =========== =========== ========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-9
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
-----------------------------------------------------------------
EQ/
EVERGREEN MERRILL LYNCH BT EQUITY
FOUNDATION (C) WORLD STRATEGY (A) 500 INDEX
-------------- -------------------------------- ----------
1999 1999 1998 1997 1999
----------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 31 $ 41,786 $ 36,750 $17,124 $ 102
Expenses (Note 3):
Mortality and expense risk charges.......... 2 18,905 12,469 2,678 31
----------- -------- -------- ------- ----------
NET INVESTMENT INCOME............................. 29 22,881 24,281 14,446 71
----------- -------- -------- ------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... 302 197,727 19,432 (3,626) 24
Realized gain distribution from the Trust... -- 67,733 -- 38,995 29
----------- -------- -------- ------- ----------
NET REALIZED GAIN (LOSS).......................... 302 265,460 19,432 35,369 53
----------- -------- -------- ------- ----------
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... -- 187,734 (37,926) -- --
End of period............................ (1,505) 853,470 187,734 (37,926) 1,051
----------- -------- -------- ------- ----------
Change in unrealized appreciation
(depreciation) during the period............ (1,505) 665,736 225,660 (37,926) 1,051
----------- -------- -------- ------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... (1,203) 931,196 245,092 (2,557) 1,104
----------- -------- -------- ------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $ (1,174) $954,077 $269,373 $11,889 $ 1,175
=========== ======== ======== ======= ==========
<CAPTION>
-----------------------------------------------------------------
BT INTER-
NATIONAL EQ/PUTNAM EQ/PUTNAM
EQUITY JPM CORE INVESTORS INTERNATIONAL
INDEX BOND GROWTH EQUITY
-------- --------- -------- --------
1999 1999 1999 1999
-------- --------- -------- --------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Investment Income (Note 2):
Dividends from the Trust.................... $ 9 $ 100 $ -- $ 12
Expenses (Note 3):
Mortality and expense risk charges.......... 1 1 5 --
-------- --------- -------- --------
NET INVESTMENT INCOME............................. 8 99 (5) 12
-------- --------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2):
Realized gain (loss) on investments......... 0 -- 1 --
Realized gain distribution from the Trust... 9 -- 223 37
-------- --------- -------- --------
NET REALIZED GAIN (LOSS).......................... 9 -- 224 37
Unrealized appreciation (depreciation)
on investments:
Beginning of period...................... -- -- -- --
End of period............................ 69 (116) 736 1
-------- --------- -------- --------
Change in unrealized appreciation
(depreciation) during the period............ 69 (116) 736 1
-------- --------- -------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.......................... 78 (116) 960 38
-------- --------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS...................... $ 86 $ (17) $ 955 $ 50
======== ========= ======== ========
</TABLE>
- ------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-10
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET ALLIANCE HIGH YIELD
----------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income..................... $ 12,329,959 $ 9,515,464 $ 8,653,507 $ 16,489,390 $ 17,442,641 $ 12,128,952
Net realized gain (loss).................. 528,279 (153,564) (500,365) (15,030,554) 1,052,131 7,302,187
Change in unrealized appreciation
(depreciation) on investments.......... (219,635) 732,101 780,326 (7,843,498) (29,521,690) 2,958,012
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in net assets
from operations........................ 12,638,603 10,094,001 8,933,468 (6,384,662) (11,026,918) 22,389,151
------------ ------------ ------------ ------------ ------------ -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)..................... 231,007,033 229,608,273 234,059,930 30,001,760 36,502,728 26,933,221
Benefits and other policy-related
transactions (Note 3).................. (63,463,349) (41,370,215) (40,687,124) (21,018,230) (20,288,710) (14,530,462)
Net transfers among funds and
guaranteed interest account............ (91,919,848) (128,607,686) (259,049,840) (25,281,076) 2,677,159 26,385,799
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in net assets
from policy-related transactions....... 75,623,836 59,630,372 (65,677,034) (16,297,546) 18,891,177 38,788,558
------------ ------------ ------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).............. 1,075,796 (387,161) 46,036 2,143,697 (832,263) 40,026
------------ ------------ ------------ ------------ ------------ -----------
INCREASE (DECREASE) IN NET ASSETS ........... 89,338,235 69,337,212 (56,697,530) (20,538,511) 7,031,996 61,217,735
NET ASSETS
BEGINNING OF PERIOD....................... 255,090,142 185,752,930 242,450,460 170,372,993 163,340,997 102,123,262
------------ ------------ ------------ ------------ ------------ -----------
NET ASSETS
END OF PERIOD............................. $344,428,377 $255,090,142 $185,752,930 $149,834,482 $170,372,993 $163,340,997
============ ============ ============ ============ ============ ============
<CAPTION>
-------------------------------------------------------
ALLIANCE COMMON STOCK
-------------------------------------------------------
1999 1998 1997
-------------- -------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income..................... $ 1,037,574 $ 1,338,974 $ (767,599)
Net realized gain (loss).................. 719,015,346 522,943,560 218,655,522
Change in unrealized appreciation
(depreciation) on investments.......... 13,099,046 122,078,195 272,798,112
-------------- -------------- --------------
Net increase (decrease) in net assets
from operations........................ 733,151,966 646,360,729 490,686,035
-------------- -------------- --------------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)..................... 361,261,385 322,874,015 282,279,826
Benefits and other policy-related
transactions (Note 3).................. (302,304,428) (250,079,870) (199,662,183)
Net transfers among funds and
guaranteed interest account............ 49,877,173 24,136,275 56,849,823
-------------- -------------- --------------
Net increase (decrease) in net assets
from policy-related transactions....... 108,834,130 96,930,420 139,467,466
-------------- -------------- --------------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4).............. (5,343,344) (2,780,348) 516,970
-------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS ........... 836,642,752 740,510,801 630,670,471
NET ASSETS
BEGINNING OF PERIOD....................... 2,943,226,440 2,202,715,639 1,572,045,168
-------------- -------------- --------------
NET ASSETS
END OF PERIOD............................. $3,779,869,192 $2,943,226,440 $2,202,715,639
============== ============== ==============
</TABLE>
- -------------------------
See Notes to Financial Statements.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-11
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
CAPITAL
EQ/ALLIANCE CAPITAL GUARDIAN
PREMIER GUARDIAN U.S. MERRILL LYNCH
GROWTH (C) RESEARCH (D) EQUITY (D) BASIC VALUE EQUITY (A)
------------ --------- --------- ------------------------------------
1999 1999 1999 1999 1998 1997
------------ --------- --------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income...................... $ (33,190) $ 71 $ 781 $ 314,801 $ 126,014 $ 26,461
Net realized gain (loss)................... 190,495 2,837 1,959 2,389,365 874,115 40,394
Change in unrealized appreciation
(depreciation) on investments........... 5,068,707 11,093 17,325 1,362,581 (226,962) 135,003
----------- -------- -------- ----------- ----------- ----------
Net increase (decrease) in net assets
from operations......................... 5,226,012 14,001 20,065 4,066,747 773,167 201,858
----------- -------- -------- ----------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)...................... 6,362,938 63,883 115,934 10,931,366 6,388,355 1,097,822
Benefits and other policy-related
transactions (Note 3)................... (1,028,342) (503) (15,128) (3,171,744) (1,430,414) (135,034)
Net transfers among funds and
guaranteed interest account............. 40,652,847 115,765 390,588 7,845,599 8,794,685 4,661,128
----------- -------- -------- ----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions........ 45,987,443 179,145 491,394 15,605,221 13,752,626 5,623,916
----------- --------- -------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)............... 3,902 209 378 (43,053) (1,392,853) 1,202,680
----------- --------- -------- ----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS............. 51,217,357 193,355 511,837 19,628,915 13,132,940 7,028,454
NET ASSETS
BEGINNING OF PERIOD........................ -- -- -- 20,161,394 7,028,454 --
----------- --------- -------- ----------- ----------- ----------
NET ASSETS
END OF PERIOD.............................. $51,217,357 $193,355 $511,837 $39,790,309 $20,161,394 $7,028,454
=========== ======== ======== =========== =========== ==========
<CAPTION>
---------------------------------------------------------
MFS
GROWTH
AND
INCOME (C) MFS RESEARCH (A)
---------- -----------------------------------------
1998 1999 1998 1997
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income...................... $ 837 $ (155,808) $ (14,907) $ 7,315
Net realized gain (loss)................... (227) 2,081,454 494,412 88,145
Change in unrealized appreciation
(depreciation) on investments........... 20,637 6,720,924 3,063,681 249,382
-------- ----------- ----------- ----------
Net increase (decrease) in net assets
from operations......................... 21,247 8,646,570 3,543,186 344,842
-------- ----------- ----------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)...................... 44,806 12,506,780 6,795,257 1,177,137
Benefits and other policy-related
transactions (Note 3)................... (6,607) (4,808,292) (1,705,211) (162,042)
Net transfers among funds and
guaranteed interest account............. 326,238 4,280,012 12,108,388 6,389,251
-------- ----------- ----------- ----------
Net increase (decrease) in net assets
from policy-related transactions........ 364,437 11,978,500 17,198,434 7,404,346
-------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)............... 30,030 (9,698) (2,472,499) 2,003,671
-------- ----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS............. 415,714 20,615,372 18,269,121 9,752,859
NET ASSETS
BEGINNING OF PERIOD........................ -- 28,021,980 9,752,859 --
-------- ----------- ----------- ----------
NET ASSETS
END OF PERIOD.............................. $415,714 $48,637,352 $28,021,980 $9,752,859
======== =========== =========== ==========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-12
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
EQ/PUTNAM MORGAN STANLEY
GROWTH & INCOME VALUE (A) EMERGING MARKETS EQUITY (B)
---------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997
----------- ----------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ 168,536 $ 87,004 $ 23,618 $ (66,405) $ 13,319 $ 13,761
Net realized gain (loss)............... 1,775,493 339,445 28,304 757,878 (637,290) (14,566)
Change in unrealized appreciation
(depreciation) on investments....... (2,633,398) 891,041 269,561 13,987,219 (1,863,245) (1,079,388)
----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net assets
from operations..................... (689,369) 1,317,490 321,483 14,678,692 (2,487,216) (1,080,193)
----------- ----------- ---------- ----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 7,146,178 5,099,897 1,149,748 4,138,455 2,442,975 323,739
Benefits and other policy-related
transactions (Note 3)............... (2,808,209) (1,485,166) (154,351) (1,720,293) (488,932) (7,501)
Net transfers among funds and
guaranteed interest account......... 1,469,187 6,086,532 4,539,465 16,198,446 4,158,460 2,483,527
----------- ----------- ---------- ----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions.... 5,807,156 9,701,263 5,534,862 18,616,608 6,112,503 2,799,765
----------- ----------- ---------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... (67,263) (1,334,566) 1,202,723 (1,953,290) 2,496 4,001,184
----------- ----------- ---------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS......... 5,050,524 9,684,187 7,059,068 31,342,010 3,627,783 5,720,756
NET ASSETS
BEGINNING OF PERIOD.................... 16,743,255 7,059,068 -- 9,348,539 5,720,756 --
----------- ----------- ---------- ----------- ----------- -----------
NET ASSETS
END OF PERIOD.......................... $21,793,779 $16,743,255 $7,059,068 $40,690,549 $ 9,348,539 $ 5,720,756
=========== =========== ========== =========== =========== ===========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-13
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK ALLIANCE SMALL CAP GROWTH (A)
--------------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
-------------- ------------- ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.................. $ (2,318,415) $ (1,119,907) $ (3,987,514) $ (284,347) $ (211,223) $ (37,351)
Net realized gain (loss)............... 33,754,225 6,840,149 107,947,093 4,345,484 (7,585,521) (63,375)
Change in unrealized appreciation
(depreciation) on investments....... 132,094,676 (5,980,406) (13,921,615) 15,295,322 8,009,143 771,812
-------------- ------------- ------------- ----------- ----------- -----------
Net increase (decrease) in net assets
from operations..................... 163,530,486 (260,164) 90,037,964 19,356,459 212,399 671,086
-------------- ------------- ------------- ----------- ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).................. 145,241,493 172,792,283 179,662,167 16,092,219 14,863,783 2,947,848
Benefits and other policy-related
transactions (Note 3)............... (117,102,087) (115,442,947) (107,529,554) (5,542,747) (3,897,615) (599,875)
Net transfers among funds and
guaranteed interest account......... (113,016,006) (43,660,488) 1,712,877 (8,085,585) 15,043,596 19,670,856
-------------- ------------- ------------- ----------- ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions.... (84,876,600) 13,688,848 73,845,490 2,463,887 26,009,764 22,018,829
-------------- ------------- ------------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)........... 2,197,124 (541,559) 223,792 (99,856) (1,460,161) 1,208,014
-------------- ------------- ------------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS......... 80,851,010 12,887,125 164,107,246 21,720,490 24,762,002 23,897,929
NET ASSETS
BEGINNING OF PERIOD.................... 971,194,053 958,306,928 794,199,683 48,659,931 23,897,929 --
-------------- ------------- ------------- ----------- ----------- -----------
NET ASSETS
END OF PERIOD.......................... $1,052,045,063 $ 971,194,053 $ 958,306,929 $70,380,421 $48,659,931 $23,897,929
============== ============= ============= =========== =========== ===========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-14
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
--------------------------------------------------------------
EQ/ MFS EMERGING
EVERGREEN (C) GROWTH COMPANIES (A)
------------- ---------------------------------------------
1999 1999 1998 1997
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.......................... $ 81 $ (640,976) $ (156,515) $ 5,523
Net realized gain (loss)....................... 20 17,547,129 4,270,964 458,032
Change in unrealized appreciation
(depreciation) on investments............... 1,450 70,081,784 6,824,857 171,320
--------- ------------ ----------- -----------
Net increase (decrease) in net assets
from operations............................. 1,551 86,987,937 10,939,306 634,875
--------- ------------ ----------- -----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).......................... 6,341 32,825,036 11,533,783 1,598,358
Benefits and other policy-related
transactions (Note 3)....................... (434) (13,737,378) (2,705,605) (294,924)
Net transfers among funds and
guaranteed interest account................. 21,204 76,182,753 25,975,152 8,886,415
--------- ------------ ----------- -----------
Net increase (decrease) in net assets
from policy-related transactions............ 27,111 95,270,411 34,803,330 10,189,849
--------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)................... 18 (72,131) (2,575,513) 2,004,977
--------- ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS................. 28,680 182,186,217 43,167,123 12,829,701
NET ASSETS
BEGINNING OF PERIOD............................ -- 55,996,824 12,829,701 --
--------- ------------ ----------- -----------
NET ASSETS
END OF PERIOD.................................. $ 28,680 $238,183,041 $55,996,824 $12,829,701
========= ============ =========== ===========
<CAPTION>
----------------------------------------------------------
EQ/
EVERGREEN MERRILL LYNCH
FOUNDATION(C) WORLD STRATEGY (A)
------------------------- --------------------------
1999 1999 1998 1997
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.......................... $ 29 $ 22,881 $ 24,281 $ 14,446
Net realized gain (loss)....................... 302 265,460 19,432 35,369
Change in unrealized appreciation
(depreciation) on investments............... (1,505) 665,736 225,660 (37,926)
--------- ---------- ---------- ----------
Net increase (decrease) in net assets
from operations............................. (1,174) 954,077 269,373 11,889
--------- ---------- ---------- ----------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3).......................... 93 1,304,821 1,050,984 334,133
Benefits and other policy-related
transactions (Note 3)....................... (53) (511,416) (294,100) (41,646)
Net transfers among funds and
guaranteed interest account................. 2,377 (504,202) 1,271,852 1,374,499
--------- ---------- ---------- ----------
Net increase (decrease) in net assets
from policy-related transactions............ 2,417 289,203 2,028,736 1,666,986
--------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE IN
SEPARATE ACCOUNT FP (Note 4)................... 1,605 (999,768) (849,043) 2,000,771
--------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS................. 2,848 243,512 1,449,066 3,679,646
NET ASSETS
BEGINNING OF PERIOD............................ -- 5,128,712 3,679,646 --
--------- ---------- ---------- ----------
NET ASSETS
END OF PERIOD.................................. $ 2,848 $5,372,224 $5,128,712 $3,679,646
========= ========== ========== ==========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-15
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
-------------------------------------------------------------------
EQ/PUTNAM
BT EQ/PUTNAM INTER-
BT EQUITY INTERNATIONAL JPM CORE INVESTORS NATIONAL
500 INDEX EQUITY INDEX BOND GROWTH EQUITY
--------- -------------- ---------- --------- --------
1999 1999 1999 1999 1999
--------- -------------- ---------- --------- --------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income........................ $ 71 $ 8 $ 99 $ (5) $ 12
Net realized gain (loss)..................... 53 9 0 224 37
Change in unrealized appreciation
(depreciation) on investments............. 1,051 69 (116) 736 1
-------- ----------- ---------- --------- --------
Net increase (decrease) in net assets
from operations........................... 1,175 86 (17) 955 50
-------- ----------- ---------- --------- --------
FROM POLICY-RELATED TRANSACTIONS:
Net premiums (Note 3)........................ 9,476 -- -- 10,348 666
Benefits and other policy-related
transactions (Note 3)..................... (1,279) (8) (70) (96) --
Net transfers among funds and
guaranteed interest account............... 9,316 1,182 2,277 199 --
-------- ----------- ---------- --------- --------
Net increase (decrease) in net assets
from policy related-transactions.......... 17,513 1,174 2,207 10,451 666
-------- ----------- ---------- --------- --------
NET INCREASE (DECREASE) IN AMOUNT
RETAINED BY EQUITABLE LIFE
IN SEPARATE ACCOUNT FP (Note 4).............. 11 -- 2 5 --
-------- ----------- ---------- --------- --------
INCREASE (DECREASE) IN NET ASSETS............... 18,699 1,260 2,192 11,411 716
NET ASSETS
BEGINNING OF PERIOD.......................... -- -- -- -- --
-------- ----------- ---------- --------- --------
NET ASSETS
END OF PERIOD................................ $ 18,699 $ 1,260 $ 2,192 $ 11,411 $ 716
======== =========== ========== ========= ========
</TABLE>
- -------------------------
See Notes to Financial Statements.
(a) Commencement of Operations on May 1, 1997.
(b) Commencement of Operations on August 20, 1997.
(c) Commencement of Operations on June 4, 1999.
(d) Commencement of Operations on August 30, 1999.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-16
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. General
Equitable Life Separate Account FP (the "Account") is organized as a unit
investment trust, a type of investment company, and is registered with the
Securities and Exchange Commission under the Investment Company Act of
1940. EQ Advisors Trust ("EQAT" or "Trust") commenced operations on May 1,
1997. EQAT is an open-ended diversified management investment company that
sells shares to separate accounts of insurance companies. Each portfolio
has separate investment objectives.
For periods prior to October 18, 1999, the Alliance portfolios (other than
EQ/Alliance Premier Growth) were part of The Hudson River Trust ("HRT"). On
October 18, 1999, a Substitution of new portfolios of EQAT for the
portfolios of HRT was performed. At that time assets of each of the HRT
portfolios were transferred to the corresponding new portfolios of EQAT.
Class IA shares and Class IB shares of the HRT became Class IA shares and
Class IB shares of EQAT.
Prior to the Substitution, Alliance Capital Management L.P., an indirect,
majority-owned subsidiary of Equitable Life, was investment adviser for all
HRT portfolios. Post substitution, Alliance continues as investment adviser
for the Alliance portfolios (including EQ/Alliance Premier Growth).
Effective September 1999, Equitable Life serves as investment manager of
EQAT. As such, Equitable Life oversees the activities of the investment
advisers with respect to EQAT and is responsible for retaining or
discontinuing the services of those advisers. Prior to September 1999, AXA
Advisors, LLC (formerly EQ Financial Consultants, Inc.), a subsidiary of
Equitable Life, served as investment manager to EQAT.
AXA Advisors, LLC, and Equitable Distributors, Inc., earn fees from EQAT
under distribution agreements held with the Trust. Equitable Life also
earns fees under an investment management agreement with EQAT. Alliance
earns fees under an investment advisory agreement with Equitable Life.
The Account consists of thirty-five variable investment options of which
twenty-two are reported herein:
o Alliance Money Market
o Alliance High Yield
o Alliance Common Stock
o EQ/Alliance Premier Growth
o Capital Guardian Research
o Capital Guardian U.S. Equity
o Merrill Lynch Basic Value Equity
o MFS Growth with Income
o MFS Research
o EQ/Putnam Growth & Income Value
o Morgan Stanley Emerging Markets Equity
o Alliance Aggressive Stock
o Alliance Small Cap Growth
o EQ/Evergreen
o MFS Emerging Growth Companies
o EQ/Evergreen Foundation
o Merrill Lynch World Strategy
o BT Equity 500 Index
o BT International Equity Index
o JPM Core Bond
o EQ/Putnam Investors Growth
o EQ/Putnam International Equity
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-17
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
1. General (Continued)
The assets in each fund are invested in Class IA shares or Class IB shares
of a corresponding mutual fund portfolio ("Portfolio") of EQAT. Class IA
and IB shares are offered by EQAT at net asset value. Both classes of
shares are subject to fees for investment management and advisory services
and other Trust expenses. Class IA shares are not subject to distribution
fees imposed pursuant to a distribution plan. Class IB shares are subject
to distribution fees imposed under a distribution plan (herein the "Rule
12b-1 Plans") adopted in 1997 pursuant to Rule 12b-1 under the 1940 Act, as
amended. The Rule 12b-1 Plans provide that EQAT, on behalf of each Fund,
may charge annually up to 0.25% of the average daily net assets of a Fund
attributable to its Class IB shares in respect of activities primarily
intended to result in the sale of the Class IB shares. These fees are
reflected in the net asset value of the shares.
The Account supports the operations of various Equitable life insurance
products. These products are sold through both Equitable's Agent
Distribution Channel and Equitable's Independent Broker Dealer Distribution
Channel. These financial statement footnotes discuss the products, charges
and investment return applicable to those life insurance products
(Incentive Life, Incentive Life Plus, Survivorship Incentive Life and
Survivorship 2000) which are sold through Equitable's Independent Broker
Dealer Distribution Channel.
All Policies are issued by Equitable Life. The assets of the Account are
the property of Equitable Life. However, the portion of the Account's
assets attributable to the Policies will not be chargeable with liabilities
arising out of any other business Equitable Life may conduct.
Receivable/payable for policy-related transactions represent amount due
to/from General Account predominately related to premiums, surrenders and
death benefits.
Policyowners may allocate amounts in their individual accounts to the
variable investment options and/or (except for SP-Flex policies) to the
guaranteed interest account of Equitable Life's General Account. Net
transfers to (from) the guaranteed interest account of the General Account
and other Separate Accounts of $(140,321,294), $56,300,263, and
$165,714,430 for the years ended 1999, 1998 and 1997, respectively, are
included in Net Transfers among variable investment options. The net assets
of any variable investment option may not be less than the aggregate of the
policyowners' accounts allocated to that variable investment option.
Additional assets are set aside in Equitable Life's General Account to
provide for (1) the unearned portion of the monthly charges for mortality
costs, and (2) other policy benefits, as required under the state insurance
law.
2. Significant Accounting Policies
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles (GAAP). The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Investments are made in shares of EQAT and are valued at the net asset
values per share of the respective Portfolios. The net asset value is
determined by EQAT using the market or fair value of the underlying assets
of the Portfolio less liabilities.
Investment transactions are recorded on the trade date. Dividend and
capital gains are declared and distributed by the Trust at the end of each
year and are automatically reinvested on the ex-dividend date. Realized
gains and losses include (1) gains and losses on redemptions of EQAT shares
(determined on the identified cost basis) and (2) Trust distributions
representing the net realized gains on Trust investment transactions.
The operations of the Account are included in the consolidated federal
income tax return of Equitable Life. Under the provisions of the Policies,
Equitable Life has the right to charge the Account for federal income tax
attributable to the Account. No charge is currently being made against the
Account for such tax since, under current tax law, Equitable Life pays no
tax on investment income and capital gains reflected in variable life
insurance policy reserves. However, Equitable Life retains the right to
charge for any federal income tax incurred which is attributable to the
Account if the law is changed. Charges for state and local taxes, if any,
attributable to the Account also may be made.
Under the Policies, Equitable Life assumes mortality and expense risks and,
to cover these risks, charges the daily net assets of the Account. These
charges apply to all products supported by the Account. The products sold
through Equitable's Independent Broker Dealer Distribution Channel have
charges currently for Incentive Life, Incentive Life Plus and Survivorship
Incentive Life of .60% , and for Survivorship 2000 of .90%. The products
sold through Equitable Life's Agent Distribution Channel have charges
ranging from 0.60% to 1.80% depending on the features of those products.
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-18
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
3. Asset Charges
Under the Policies, Equitable Life assumes mortality and expense risks and,
to cover these risks, charges the daily net assets of the Account currently
at annual rates of:
<TABLE>
<CAPTION>
Mortality and
Expense Mortality Administrative Total
---------------- ----------- ---------------- --------
<S> <C> <C> <C> <C>
Incentive Life,
Incentive Life 2000,
Incentive Life Plus
Second Series,
Champion 2000 (a) .60% -- -- .60%
IL Plus Original
Series, IL COLI (b) .85% -- -- .85%
Survivorship Incentive
Life (a) .60% -- -- .60%
Survivorship 2000 (a) .90% -- -- .90%
IL Protector (a) .80% -- -- .80%
SP Flex (a) .85% .60% .35% 1.80%
</TABLE>
-----------------------------
(a) Charged to daily net assets of the Account.
(b) Charged to Policy Account and is included in Benefits and other
policy-related transactions in the Statement of Changes in
Net Assets.
Before amounts are remitted to the Account for Incentive Life, Incentive
Life Plus, IL COLI, Survivorship Incentive Life and the Series 2000
Policies, Equitable Life deducts a charge for taxes and either an initial
policy fee (Incentive Life) or a premium sales charge (Incentive Life Plus,
Survivorship Incentive Life, Incentive Life Sales 1999 and after, and
Series 2000 Policies) from premiums. Under SP-Flex, the entire initial
premium is allocated to the Account. Before any additional premiums under
SP-Flex are allocated to the Account, however, an administrative charge is
deducted.
The amounts attributable to Incentive Life, Incentive Life Plus, IL
Protector, IL COLI, and the Series 2000 policyowners' accounts are assessed
monthly by Equitable Life for mortality and administrative charges. These
charges are withdrawn from the Accounts along with amounts for additional
benefits. Under the Policies, amounts for certain policy-related
transactions (such as policy loans and surrenders) are transferred out of
the Separate Account.
Included in the Withdrawals and Administrative Charges line of the
Statement of Changes in Net Assets are certain administrative charges which
are deducted from the policyowners account value.
4. Amounts Retained by Equitable Life in Separate Account FP
The amount retained by Equitable Life (surplus) in the Account arises
principally from (1) contributions from Equitable Life, (2) mortality and
expense charges and administrative charges accumulated in the account, and
(3) that portion, determined ratably, of the Account's investment results
applicable to those assets in the Account in excess of the net assets for
the Policies. Amounts retained by Equitable Life are not subject to charges
for mortality and expense charges and administrative charges.
Amounts retained by Equitable Life in the Account may be transferred at any
time by Equitable Life to its General Account.
The following table shows the surplus contributions (withdrawals) by
Equitable Life by investment fund:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------
VARIABLE INVESTMENT OPTIONS 1999 1998 1997
--------------------------- ---- ---- ----
<S> <C> <C> <C>
Alliance Money Market $ (531,900) $(1,591,380) --
Alliance High Yield 1,254,634 (1,839,368) --
</TABLE>
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-19
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
4. Amounts Retained by Equitable Life in Separate Account FP (Continued)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------
VARIABLE INVESTMENT OPTIONS 1999 1998 1997
--------------------------- ---- ---- ----
<S> <C> <C> <C>
Alliance Common Stock $(24,309,506) $(17,381,053) $ --
EQ/Alliance Premier Growth (60,529) -- --
Capital Guardian Research -- -- --
Capital Guardian U.S. Equity -- -- --
Merrill Lynch Basic Value Equity (196,510) (1,459,281) 1,200,000
MFS Growth with Income 29,599 -- --
MFS Research (218,336) (2,558,541) 2,000,000
EQ/Putnam Growth & Income Value (177,637) (1,391,562) 1,200,000
Morgan Stanley Emerging Markets Equity (2,019,694) (21,425) 4,000,000
Alliance Aggressive Stock (3,284,577) (6,122,856) --
Alliance Small Cap Growth (384,204) (1,675,446) 1,200,000
EQ/Evergreen -- -- --
MFS Emerging Growth Companies (713,109) (2,732,997) 2,000,000
ASSET ALLOCATION OPTIONS
------------------------
EQ/Evergreen Foundation -- -- --
Merrill Lynch World Strategy (1,018,674) (861,511) 2,000,000
BT Equity 500 Index (21) -- --
BT International Equity Index -- -- --
JPM Core Bond -- -- --
EQ/Putnam Investors Growth -- -- --
EQ/Putnam International Equity -- -- --
</TABLE>
5. Distribution and Servicing Agreements
Equitable Life has entered into Distribution and Servicing Agreements with
AXA Advisors, LLC, an affiliate of Equitable Life, and EDI, whereby
registered representatives of AXA Advisors, LLC, authorized as variable
life insurance agents under applicable state insurance laws, sell the
Policies. The registered representatives are compensated on a commission
basis by Equitable Life.
6. Investment Returns
The tables on the following pages show the gross and net investment returns
with respect to the variable investment options for the periods shown. The
net return for each variable investment option is based upon beginning and
ending net unit value for a policy and is not based on the average net
assets in the variable investment option during such period. Gross return
is equal to the total return earned by the underlying EQAT investment which
is after deduction of EQAT expense.
The Separate Account rates of return attributable to Incentive Life,
Survivorship Incentive Life and Incentive Life Plus policyowners are
different than those attributable to Survivorship 2000 policyowners
because asset charges are deducted at different rates under each policy
(see Note 3).
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
FSA-20
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS, INCENTIVE LIFE,
- -----------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ----------------------------
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE MONEY MARKET 1999
- --------------------- ----
Gross return..................... 4.71%
Net return....................... 4.10%
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE HIGH YIELD 1999
- ------------------- ----
Gross return..................... (3.58)%
Net return....................... (4.16)%
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE COMMON STOCK 1999
- ---------------------- ----
Gross return..................... 24.88%
Net return....................... 24.13%
JUNE 4 (C) TO
DECEMBER 31,
-----------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return..................... 18.97%
Net return....................... 18.52%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return..................... 7.10%
Net return....................... 6.67%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- ---------------------------- ----
Gross return..................... 3.76%
Net return....................... 3.32%
YEAR ENDED
DECEMBER 31,
-----------------
MERRILL LYNCH BASIC VALUE EQUITY 1999
- -------------------------------- ----
Gross return..................... 19.00%
Net return....................... 18.23%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-21
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS, INCENTIVE LIFE,
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ----------------------------
YEAR ENDED
DECEMBER 31,
-------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return......................... 8.76%
Net return........................... 8.06%
YEAR ENDED
DECEMBER 31,
--------------
MFS RESEARCH 1999
- ------------ ----
Gross return......................... 23.12%
Net return........................... 22.38%
YEAR ENDED
DECEMBER 31,
--------------
EQ/PUTNAM GROWTH & INCOME VALUE 1999
- ------------------------------- ----
Gross return......................... (1.27)%
Net return........................... (1.95)%
YEAR ENDED
DECEMBER 31,
--------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999
- -------------------------------------- ----
Gross return......................... 95.82%
Net return........................... 94.57%
YEAR ENDED
DECEMBER 31,
--------------
ALLIANCE AGGRESSIVE STOCK 1999
- ------------------------- ----
Gross return......................... 18.55%
Net return........................... 17.83%
YEAR ENDED
DECEMBER 31,
--------------
ALLIANCE SMALL CAP GROWTH 1999
- ------------------------- ----
Gross return......................... 27.46%
Net return........................... 26.86%
YEAR ENDED
DECEMBER 31,
--------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return......................... 9.70%
Net return........................... 9.06%
YEAR ENDED
DECEMBER 31,
---------------
MFS EMERGING GROWTH COMPANIES 1999
- -------------------------------- ----
Gross return......................... 73.62%
Net return........................... 72.63%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-22
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
INCENTIVE LIFE PLUS, INCENTIVE LIFE,
- ------------------------------------
SURVIVORSHIP INCENTIVE LIFE*
- ----------------------------
YEAR ENDED
DECEMBER 31,
-----------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return..................... 7.38%
Net return....................... 6.72%
YEAR ENDED
DECEMBER 31,
-----------------
MERRILL LYNCH WORLD STRATEGY 1999
- ---------------------------- ----
Gross return..................... 21.35%
Net return....................... 20.62%
YEAR ENDED
DECEMBER 31,
-----------------
BT EQUITY 500 INDEX 1999
- ------------------- ----
Gross return..................... 20.30%
Net return....................... 19.58%
YEAR ENDED
DECEMBER 31,
-----------------
BT INTERNATIONAL EQUITY INDEX 1999
- ----------------------------- ----
Gross return..................... 27.50%
Net return....................... 26.70%
YEAR ENDED
DECEMBER 31,
-----------------
JPM CORE BOND 1999
- --------------- ----
Gross return..................... (1.64)%
Net return....................... (2.19)%
YEAR ENDED
DECEMBER 31,
-----------------
EQ/PUTNAM INVESTORS GROWTH 1999
- -------------------------- ----
Gross return..................... 30.24%
Net return....................... 29.48%
YEAR ENDED
DECEMBER 31,
-----------------
EQ/PUTNAM INTERNATIONAL EQUITY 1999
- ------------------------------ ----
Gross return..................... 60.24%
Net return....................... 59.29%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-23
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE MONEY MARKET 1999
- --------------------- ----
Gross return..................... 4.71%
Net return....................... 3.78%
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE HIGH YIELD 1999
- ------------------- ----
Gross return..................... (3.35)%
Net return....................... (4.45)%
YEAR ENDED
DECEMBER 31,
-----------------
ALLIANCE COMMON STOCK 1999
- ---------------------- ----
Gross return..................... 24.88%
Net return....................... 23.76%
JUNE 4 (C) TO
DECEMBER 31,
-----------------
EQ/ALLIANCE PREMIER GROWTH 1999
- -------------------------- ----
Gross return..................... 18.97%
Net return....................... 18.28%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN RESEARCH 1999
- ------------------------- ----
Gross return..................... 7.10%
Net return....................... 6.46%
AUGUST 30 (C) TO
DECEMBER 31,
-----------------
CAPITAL GUARDIAN U.S. EQUITY 1999
- ---------------------------- ----
Gross return..................... 3.76%
Net return....................... 3.11%
JUNE 4 (B) TO
DECEMBER 31,
-----------------
MERRILL LYNCH BASIC VALUE EQUITY 1999
- -------------------------------- ----
Gross return..................... 19.00%
Net return....................... 18.23%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-24
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
YEAR ENDED
DECEMBER 31,
--------------
MFS GROWTH WITH INCOME 1999
- ---------------------- ----
Gross return......................... 8.76%
Net return........................... 7.74%
YEAR ENDED
DECEMBER 31,
--------------
MFS RESEARCH 1999
- -------------- ----
Gross return......................... 23.12%
Net return........................... 22.01%
YEAR ENDED
DECEMBER 31,
--------------
EQ/PUTNAM GROWTH & INCOME VALUE 1999
- --------------------------------- ----
Gross return......................... (1.27)%
Net return........................... (2.25)%
YEAR ENDED
DECEMBER 31,
--------------
MORGAN STANLEY EMERGING MARKETS EQUITY 1999
- -------------------------------------- ----
Gross return......................... 95.82%
Net return........................... 93.98%
YEAR ENDED
DECEMBER 31,
---------------
ALLIANCE AGGRESSIVE STOCK 1999
- ------------------------- ----
Gross return......................... 18.55%
Net return........................... 17.43%
YEAR ENDED
DECEMBER 31,
--------------
ALLIANCE SMALL CAP GROWTH 1999
- ------------------------- ----
Gross return......................... 27.46%
Net return........................... 26.47%
YEAR ENDED
DECEMBER 31,
--------------
EQ/EVERGREEN 1999
- ------------ ----
Gross return......................... 9.70%
Net return........................... 8.73%
YEAR ENDED
DECEMBER 31,
--------------
MFS EMERGING GROWTH COMPANIES 1999
- ----------------------------- ----
Gross return......................... 73.62%
Net return........................... 72.11%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-25
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SEPARATE ACCOUNT FP+
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1999
RATES OF RETURN:
SURVIVORSHIP 2000
- -----------------
YEAR ENDED
DECEMBER 31,
-----------------
EQ/EVERGREEN FOUNDATION 1999
- ----------------------- ----
Gross return..................... 7.38%
Net return....................... 6.14%
YEAR ENDED
DECEMBER 31,
-----------------
MERRILL LYNCH WORLD STRATEGY 1999
- ---------------------------- ----
Gross return..................... 21.35%
Net return....................... 20.62%
YEAR ENDED
DECEMBER 31,
-----------------
BT EQUITY 500 INDEX 1999
- ------------------- ----
Gross return..................... 20.30%
Net return....................... 19.22%
YEAR ENDED
DECEMBER 31,
-----------------
BT INTERNATIONAL EQUITY INDEX 1999
- ----------------------------- ----
Gross return..................... 27.50%
Net return....................... 26.32%
YEAR ENDED
DECEMBER 31,
-----------------
JPM CORE BOND 1999
- ------------- ----
Gross return..................... (1.64)%
Net return....................... (2.48)%
YEAR ENDED
DECEMBER 31,
-----------------
EQ/PUTNAM INVESTORS GROWTH 1999
- -------------------------- ----
Gross return..................... 30.24%
Net return....................... 29.09%
YEAR ENDED
DECEMBER 31,
-----------------
EQ/PUTNAM INTERNATIONAL EQUITY 1999
- ------------------------------ ----
Gross return..................... 60.24%
Net return....................... 58.81%
- -------------------
+ Formerly known as Equitable Variable Life Insurance Company
Separate Account FP.
* Sales of Incentive Life 2000 and Champion 2000 commenced on March 2, 1992.
Sales of Incentive Life Plus Second Series commenced on September 15, 1995.
(a) Date as of which net premiums under the policies were first allocated to
the Fund. The gross return and the net return for the periods indicated are
not annualized rates of return.
(b) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflect performance on an
annualized basis. The net return reflects performance for the periods
indicated.
(c) Date as of which net premiums under the policies were first allocated to
the variable investment option. The gross return reflects performance from
the Portfolio's commencement date of April 30, 1999 and are not annualized
rates of return. The net return reflects performance for the periods
indicated.
FSA-26
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
The Equitable Life Assurance Society of the United States
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings, of shareholder's equity and comprehensive
income and of cash flows present fairly, in all material respects, the financial
position of The Equitable Life Assurance Society of the United States and its
subsidiaries ("Equitable Life") at December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of Equitable Life's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates
made by management and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 1, 2000
F-1
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- --------------
(IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities:
Available for sale, at estimated fair value............................. $ 18,599.7 $ 18,993.7
Held to maturity, at amortized cost..................................... 133.2 125.0
Mortgage loans on real estate............................................. 3,270.0 2,809.9
Equity real estate........................................................ 1,160.2 1,676.9
Policy loans.............................................................. 2,257.3 2,086.7
Other equity investments.................................................. 671.2 713.3
Investment in and loans to affiliates..................................... 1,201.8 928.5
Other invested assets..................................................... 911.6 808.2
------------- -------------
Total investments..................................................... 28,205.0 28,142.2
Cash and cash equivalents................................................... 628.0 1,245.5
Deferred policy acquisition costs........................................... 4,033.0 3,563.8
Other assets................................................................ 3,868.3 3,054.6
Closed Block assets......................................................... 8,607.3 8,632.4
Separate Accounts assets.................................................... 54,453.9 43,302.3
------------- -------------
TOTAL ASSETS................................................................ $ 99,795.5 $ 87,940.8
============= =============
LIABILITIES
Policyholders' account balances............................................. $ 21,351.4 $ 20,857.5
Future policy benefits and other policyholders' liabilities................. 4,777.6 4,726.4
Short-term and long-term debt............................................... 1,407.9 1,181.7
Other liabilities........................................................... 3,133.6 3,474.3
Closed Block liabilities.................................................... 9,025.0 9,077.0
Separate Accounts liabilities............................................... 54,332.5 43,211.3
------------- -------------
Total liabilities..................................................... 94,028.0 82,528.2
------------- -------------
Commitments and contingencies (Notes 11, 13, 14, 15 and 16)
SHAREHOLDER'S EQUITY
Common stock, $1.25 par value 2.0 million shares authorized, issued
and outstanding........................................................... 2.5 2.5
Capital in excess of par value.............................................. 3,557.2 3,110.2
Retained earnings........................................................... 2,600.7 1,944.1
Accumulated other comprehensive (loss) income............................... (392.9) 355.8
------------- -------------
Total shareholder's equity............................................ 5,767.5 5,412.6
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 99,795.5 $ 87,940.8
============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
REVENUES
Universal life and investment-type product policy fee
income...................................................... $ 1,257.5 $ 1,056.2 $ 950.6
Premiums...................................................... 558.2 588.1 601.5
Net investment income......................................... 2,240.9 2,228.1 2,282.8
Investment (losses) gains, net................................ (96.9) 100.2 (45.2)
Commissions, fees and other income............................ 2,177.9 1,503.0 1,227.2
Contribution from the Closed Block............................ 86.4 87.1 102.5
------------ ------------- -------------
Total revenues.......................................... 6,224.0 5,562.7 5,119.4
------------ ------------- -------------
BENEFITS AND OTHER DEDUCTIONS
Interest credited to policyholders' account balances.......... 1,078.2 1,153.0 1,266.2
Policyholders' benefits....................................... 1,038.6 1,024.7 978.6
Other operating costs and expenses............................ 2,797.3 2,201.2 2,203.9
------------ ------------- -------------
Total benefits and other deductions..................... 4,914.1 4,378.9 4,448.7
------------ ------------- -------------
Earnings from continuing operations before Federal
income taxes and minority interest.......................... 1,309.9 1,183.8 670.7
Federal income taxes.......................................... 332.0 353.1 91.5
Minority interest in net income of consolidated subsidiaries.. 199.4 125.2 54.8
------------ ------------- -------------
Earnings from continuing operations........................... 778.5 705.5 524.4
Discontinued operations, net of Federal income taxes.......... 28.1 2.7 (87.2)
------------ ------------- -------------
Net Earnings.................................................. $ 806.6 $ 708.2 $ 437.2
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Common stock, at par value, beginning and end of year......... $ 2.5 $ 2.5 $ 2.5
------------ ------------- -------------
Capital in excess of par value, beginning of year............. 3,110.2 3,105.8 3,105.8
Additional capital in excess of par value..................... 447.0 4.4 -
------------ ------------- -------------
Capital in excess of par value, end of year................... 3,557.2 3,110.2 3,105.8
------------ ------------- -------------
Retained earnings, beginning of year.......................... 1,944.1 1,235.9 798.7
Net earnings.................................................. 806.6 708.2 437.2
Dividend paid to the Holding Company.......................... (150.0) - -
------------ ------------- -------------
Retained earnings, end of year................................ 2,600.7 1,944.1 1,235.9
------------ ------------- -------------
Accumulated other comprehensive income,
beginning of year........................................... 355.8 516.3 177.0
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
Accumulated other comprehensive (loss) income, end of year.... (392.9) 355.8 516.3
------------ ------------- -------------
TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 5,767.5 $ 5,412.6 $ 4,860.5
============ ============= ============
COMPREHENSIVE INCOME
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
------------ ------------- -------------
Change in unrealized (losses) gains, net of reclassification
adjustment.................................................. (776.9) (149.5) 343.7
Minimum pension liability adjustment.......................... 28.2 (11.0) (4.4)
------------ ------------- -------------
Other comprehensive (loss) income............................. (748.7) (160.5) 339.3
------------ ------------- -------------
COMPREHENSIVE INCOME.......................................... $ 57.9 $ 547.7 $ 776.5
============ ============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------- -------------
(IN MILLIONS)
<S> <C> <C> <C>
Net earnings.................................................. $ 806.6 $ 708.2 $ 437.2
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Interest credited to policyholders' account balances........ 1,078.2 1,153.0 1,266.2
Universal life and investment-type product
policy fee income......................................... (1,257.5) (1,056.2) (950.6)
Investment losses (gains)................................... 96.9 (100.2) 45.2
Change in Federal income tax payable........................ 157.4 123.1 (74.4)
Change in property and equipment............................ (256.3) (81.8) (9.6)
Change in deferred acquisition costs........................ (260.7) (314.0) (220.7)
Other, net.................................................. (168.8) 70.9 399.7
------------ ------------- -------------
Net cash provided by operating activities..................... 195.8 503.0 893.0
------------ ------------- -------------
Cash flows from investing activities:
Maturities and repayments................................... 2,019.0 2,289.0 2,702.9
Sales....................................................... 7,572.9 16,972.1 10,385.9
Purchases................................................... (10,737.3) (18,578.5) (13,205.4)
(Increase) decrease in short-term investments............... (178.3) 102.4 (555.0)
Decrease in loans to discontinued operations................ - 660.0 420.1
Sale of subsidiaries........................................ - - 261.0
Other, net.................................................. (134.8) (341.8) (612.6)
------------ ------------- -------------
Net cash (used) provided by investing activities.............. (1,458.5) 1,103.2 (603.1)
------------ ------------- -------------
Cash flows from financing activities: Policyholders'
account balances:
Deposits.................................................. 2,366.2 1,508.1 1,281.7
Withdrawals............................................... (1,765.8) (1,724.6) (1,886.8)
Net increase (decrease) in short-term financings............ 378.2 (243.5) 419.9
Repayments of long-term debt................................ (41.3) (24.5) (196.4)
Payment of obligation to fund accumulated deficit of
discontinued operations................................... - (87.2) (83.9)
Dividend paid to the Holding Company........................ (150.0) - -
Other, net.................................................. (142.1) (89.5) (62.7)
------------ ------------- -------------
Net cash provided (used) by financing activities.............. 645.2 (661.2) (528.2)
------------ ------------- -------------
Change in cash and cash equivalents........................... (617.5) 945.0 (238.3)
Cash and cash equivalents, beginning of year.................. 1,245.5 300.5 538.8
------------ ------------- -------------
Cash and Cash Equivalents, End of Year........................ $ 628.0 $ 1,245.5 $ 300.5
============ ============= =============
Supplemental cash flow information
Interest Paid............................................... $ 92.2 $ 130.7 $ 217.1
============ ============= =============
Income Taxes Paid........................................... $ 116.5 $ 254.3 $ 170.0
============ ============= =============
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) ORGANIZATION
The Equitable Life Assurance Society of the United States ("Equitable
Life") is an indirect, wholly owned subsidiary of AXA Financial, Inc. (the
"Holding Company," and collectively with its consolidated subsidiaries,
"AXA Financial"). Equitable Life's insurance business is conducted
principally by Equitable Life and its wholly owned life insurance
subsidiaries, Equitable of Colorado ("EOC"), and, prior to December 31,
1996, Equitable Variable Life Insurance Company ("EVLICO"). Effective
January 1, 1997, EVLICO was merged into Equitable Life. Equitable Life's
investment management business, which comprises the Investment Services
segment, is conducted principally by Alliance Capital Management L.P.
("Alliance"), and Donaldson, Lufkin & Jenrette, Inc. ("DLJ"), an investment
banking and brokerage affiliate. AXA, a French holding company for an
international group of insurance and related financial services companies,
is the Holding Company's largest shareholder, owning approximately 58.0% at
December 31, 1999 (53.0% if all securities convertible into, and options
on, common stock were to be converted or exercised).
On September 20, 1999, as part of AXA Financial's "branding" strategic
initiative, EQ Financial Consultants, Inc., a broker-dealer subsidiary of
Equitable Life, was merged into a new company, AXA Advisors, LLC ("AXA
Advisors"). Also, on September 21, 1999, AXA Advisors was transferred by
Equitable Life to AXA Distribution Holding Corporation ("AXA
Distribution"), a wholly owned indirect subsidiary of the Holding Company,
for $15.3 million. The excess of the sales price over AXA Advisors' book
value has been recorded in Equitable Life's books as a capital
contribution. Equitable Life will continue to develop and market the
"Equitable" brand of life and annuity products, while AXA Distribution and
its subsidiaries begin to assume responsibility for providing financial
advisory services, product distribution and customer relationship
management.
The Insurance segment offers a variety of traditional, variable and
interest-sensitive life insurance products, disability income, annuity
products, mutual fund and other investment products to individuals and
small groups. It also administers traditional participating group annuity
contracts with conversion features, generally for corporate qualified
pension plans, and association plans which provide full service retirement
programs for individuals affiliated with professional and trade
associations. This segment includes Separate Accounts for individual
insurance and annuity products.
The Investment Services segment includes Alliance and the results of DLJ
which are accounted for on an equity basis. In 1999, Alliance reorganized
into Alliance Capital Management Holding L.P. ("Alliance Holding") and
Alliance (the "Reorganization"). Alliance Holding's principal asset is its
interest in Alliance and it functions as a holding entity through which
holders of its publicly traded units own an indirect interest in the
operating partnership. The Company exchanged substantially all of its
Alliance Holding units for units in Alliance ("Alliance Units"). As a
result of the reorganization, the Company was the beneficial owner of
approximately 2% of Alliance Holding and 56% of Alliance. Alliance provides
diversified investment fund management services to a variety of
institutional clients, including pension funds, endowments, and foreign
financial institutions, as well as to individual investors, principally
through a broad line of mutual funds. This segment includes institutional
Separate Accounts which provide various investment options for large group
pension clients, primarily deferred benefit contribution plans, through
pooled or single group accounts. At December 31, 1999, Equitable Life has a
31.7% ownership interest in DLJ. DLJ's businesses include securities
underwriting, sales and trading, merchant banking, financial advisory
services, investment research, venture capital, correspondent brokerage
services, online interactive brokerage services and asset management. DLJ
serves institutional, corporate, governmental and individual clients both
domestically and internationally. Through June 10, 1997, this segment also
includes Equitable Real Estate Investment Management Inc. ("EREIM") which
was sold. EREIM provided real estate investment management services,
property management services, mortgage servicing and loan asset management,
and agricultural investment management.
F-6
<PAGE>
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
-----------------------------------------------------
The accompanying consolidated financial statements are prepared in
conformity with generally accepted accounting principles ("GAAP") which
require management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The accompanying consolidated financial statements include the accounts of
Equitable Life and certain of its subsidiaries engaged in insurance related
business (collectively, the "Insurance Group"); other subsidiaries,
principally Alliance and through June 10, 1997, EREIM (see Note 5); and
those partnerships and joint ventures in which Equitable Life or its
subsidiaries has control and a majority economic interest (collectively,
including its consolidated subsidiaries, the "Company"). The Company's
investment in DLJ is reported on the equity basis of accounting. Closed
Block assets, liabilities and results of operations are presented in the
consolidated financial statements as single line items (see Note 7). Unless
specifically stated, all other footnote disclosures contained herein
exclude the Closed Block related amounts.
All significant intercompany transactions and balances except those with
the Closed Block, DLJ and discontinued operations (see Note 8) have been
eliminated in consolidation. The years "1999," "1998" and "1997" refer to
the years ended December 31, 1999, 1998 and 1997, respectively. Certain
reclassifications have been made in the amounts presented for prior periods
to conform these periods with the 1999 presentation.
Closed Block
------------
On July 22, 1992, Equitable Life established the Closed Block for the
benefit of certain individual participating policies which were in force on
that date. The assets allocated to the Closed Block, together with
anticipated revenues from policies included in the Closed Block, were
reasonably expected to be sufficient to support such business, including
provision for payment of claims, certain expenses and taxes, and for
continuation of dividend scales payable in 1991, assuming the experience
underlying such scales continues.
Assets allocated to the Closed Block inure solely to the benefit of the
Closed Block policyholders and will not revert to the benefit of the
Holding Company. No reallocation, transfer, borrowing or lending of assets
can be made between the Closed Block and other portions of Equitable Life's
General Account, any of its Separate Accounts or any affiliate of Equitable
Life without the approval of the New York Superintendent of Insurance (the
"Superintendent"). Closed Block assets and liabilities are carried on the
same basis as similar assets and liabilities held in the General Account.
The excess of Closed Block liabilities over Closed Block assets represents
the expected future post-tax contribution from the Closed Block which would
be recognized in income over the period the policies and contracts in the
Closed Block remain in force.
Discontinued Operations
-----------------------
Discontinued operations at December 31, 1999, principally consists of the
Group Non-Participating Wind-Up Annuities ("Wind-Up Annuities"), for which
a premium deficiency reserve has been established. Management reviews the
adequacy of the allowance each quarter and believes the allowance for
future losses at December 31, 1999 is adequate to provide for all future
losses; however, the quarterly allowance review continues to involve
numerous estimates and subjective judgments regarding the expected
performance of Discontinued Operations Investment Assets. There can be no
assurance the losses provided for will not differ from the losses
ultimately realized. To the extent actual results or future projections of
the discontinued operations differ from management's current best estimates
and assumptions underlying the allowance for future losses, the difference
would be reflected in the consolidated statements of earnings in
discontinued operations. In particular, to the extent income, sales
proceeds and holding periods for equity real estate differ from
management's previous assumptions, periodic adjustments to the allowance
are likely to result (see Note 8).
F-7
<PAGE>
Accounting Changes
------------------
In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," which
requires capitalization of external and certain internal costs incurred to
obtain or develop internal-use computer software during the application
development stage. The Company applied the provisions of SOP 98-1
prospectively effective January 1, 1998. The adoption of SOP 98-1 did not
have a material impact on the Company's consolidated financial statements.
Capitalized internal-use software is amortized on a straight-line basis
over the estimated useful life of the software.
New Accounting Pronouncements
-----------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities," which establishes
accounting and reporting standards for derivative instruments, including
certain derivatives embedded in other contracts, and for hedging
activities. It requires all derivatives to be recognized on the balance
sheet at fair value. The accounting for changes in the fair value of a
derivative depends on its intended use. Derivatives not used in hedging
activities must be adjusted to fair value through earnings. Changes in the
fair value of derivatives used in hedging activities will, depending on the
nature of the hedge, either be offset in earnings against the change in
fair value of the hedged item attributable to the risk being hedged or
recognized in other comprehensive income until the hedged item affects
earnings. For all hedging activities, the ineffective portion of a
derivative's change in fair value will be immediately recognized in
earnings. In June 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133," which defers the effective date of SFAS
No. 133 to all fiscal quarters of all fiscal years beginning after June 15,
2000. The Company expects to adopt SFAS No. 133 effective January 1, 2001.
Adjustments resulting from initial adoption of the new requirements will be
reported in a manner similar to the cumulative effect of a change in
accounting principle and will be reflected in net income or accumulated
other comprehensive income based upon existing hedging relationships, if
any. Management currently is assessing the impact of adoption. However,
Alliance's adoption of the new requirements is not expected to have a
significant impact on the Company's consolidated balance sheet or statement
of earnings. Also, since most of DLJ's derivatives are carried at fair
values, the Company's consolidated earnings and financial position are not
expected to be significantly affected by DLJ's adoption of the new
requirements.
Valuation of Investments
------------------------
Fixed maturities identified as available for sale are reported at estimated
fair value. Fixed maturities, which the Company has both the ability and
the intent to hold to maturity, are stated principally at amortized cost.
The amortized cost of fixed maturities is adjusted for impairments in value
deemed to be other than temporary.
Valuation allowances are netted against the asset categories to which they
apply.
Mortgage loans on real estate are stated at unpaid principal balances, net
of unamortized discounts and valuation allowances. Valuation allowances are
based on the present value of expected future cash flows discounted at the
loan's original effective interest rate or the collateral value if the loan
is collateral dependent. However, if foreclosure is or becomes probable,
the measurement method used is collateral value.
Real estate, including real estate acquired in satisfaction of debt, is
stated at depreciated cost less valuation allowances. At the date of
foreclosure (including in-substance foreclosure), real estate acquired in
satisfaction of debt is valued at estimated fair value. Impaired real
estate is written down to fair value with the impairment loss being
included in investment gains (losses), net. Valuation allowances on real
estate held for sale are computed using the lower of depreciated cost or
current estimated fair value, net of disposition costs. Depreciation is
discontinued on real estate held for sale.
F-8
<PAGE>
Policy loans are stated at unpaid principal balances.
Partnerships and joint venture interests in which the Company does not have
control or a majority economic interest are reported on the equity basis of
accounting and are included either with equity real estate or other equity
investments, as appropriate.
Equity securities, comprised of common stock classified as both trading and
available for sale securities, are carried at estimated fair value and are
included in other equity investments.
Short-term investments are stated at amortized cost which approximates fair
value and are included with other invested assets.
Cash and cash equivalents includes cash on hand, amounts due from banks and
highly liquid debt instruments purchased with an original maturity of three
months or less.
All securities are recorded in the consolidated financial statements on a
trade date basis.
Net Investment Income, Investment Gains, Net and Unrealized Investment
----------------------------------------------------------------------
Gains (Losses)
--------------
Net investment income and realized investment gains (losses) (collectively,
"investment results") related to certain participating group annuity
contracts which are passed through to the contractholders are reflected as
interest credited to policyholders' account balances.
Realized investment gains (losses) are determined by specific
identification and are presented as a component of revenue. Changes in
valuation allowances are included in investment gains (losses).
Unrealized gains (losses) on publicly-traded common equity securities
classified as trading securities are reflected in net investment income.
Unrealized investment gains (losses) on fixed maturities and equity
securities available for sale held by the Company are accounted for as a
separate component of accumulated comprehensive income, net of related
deferred Federal income taxes, amounts attributable to discontinued
operations, participating group annuity contracts and deferred policy
acquisition costs ("DAC") related to universal life and investment-type
products and participating traditional life contracts.
Recognition of Insurance Income and Related Expenses
----------------------------------------------------
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenues from these contracts
consist of amounts assessed during the period against policyholders'
account balances for mortality charges, policy administration charges and
surrender charges. Policy benefits and claims that are charged to expense
include benefit claims incurred in the period in excess of related
policyholders' account balances.
Premiums from participating and non-participating traditional life and
annuity policies with life contingencies generally are recognized as income
when due. Benefits and expenses are matched with such income so as to
result in the recognition of profits over the life of the contracts. This
match is accomplished by means of the provision for liabilities for future
policy benefits and the deferral and subsequent amortization of policy
acquisition costs.
For contracts with a single premium or a limited number of premium payments
due over a significantly shorter period than the total period over which
benefits are provided, premiums are recorded as income when due with any
excess profit deferred and recognized in income in a constant relationship
to insurance in force or, for annuities, the amount of expected future
benefit payments.
Premiums from individual health contracts are recognized as income over the
period to which the premiums relate in proportion to the amount of
insurance protection provided.
F-9
<PAGE>
Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions, underwriting,
agency and policy issue expenses, all of which vary with and are primarily
related to the production of new business, are deferred. DAC is subject to
recoverability testing at the time of policy issue and loss recognition
testing at the end of each accounting period.
For universal life products and investment-type products, DAC is amortized
over the expected total life of the contract group (periods ranging from 25
to 35 years and 5 to 17 years, respectively) as a constant percentage of
estimated gross profits arising principally from investment results,
mortality and expense margins and surrender charges based on historical and
anticipated future experience, updated at the end of each accounting
period. The effect on the amortization of DAC of revisions to estimated
gross profits is reflected in earnings in the period such estimated gross
profits are revised. The effect on the DAC asset that would result from
realization of unrealized gains (losses) is recognized with an offset to
accumulated other comprehensive income in consolidated shareholder's equity
as of the balance sheet date.
As part of its asset/liability management process, in second quarter 1999,
management initiated a review of the matching of invested assets to
Insurance product lines given their different liability characteristics and
liquidity requirements. As a result of this review, management reallocated
the current and prospective interests of the various product lines in the
invested assets. These asset reallocations and the related changes in
investment yields by product line, in turn, triggered a review of and
revisions to the estimated future gross profits used to determine the
amortization of DAC for universal life and investment-type products. The
revisions to estimated future gross profits resulted in an after-tax
writedown of DAC of $85.6 million (net of a Federal income tax benefit of
$46.1 million).
For participating traditional life policies (substantially all of which are
in the Closed Block), DAC is amortized over the expected total life of the
contract group (40 years) as a constant percentage based on the present
value of the estimated gross margin amounts expected to be realized over
the life of the contracts using the expected investment yield. At December
31, 1999, the expected investment yield, excluding policy loans, generally
ranged from 7.75% grading to 7.5% over a 20 year period. Estimated gross
margin includes anticipated premiums and investment results less claims and
administrative expenses, changes in the net level premium reserve and
expected annual policyholder dividends. The effect on the amortization of
DAC of revisions to estimated gross margins is reflected in earnings in the
period such estimated gross margins are revised. The effect on the DAC
asset that would result from realization of unrealized gains (losses) is
recognized with an offset to accumulated comprehensive income in
consolidated shareholder's equity as of the balance sheet date.
For non-participating traditional life DAC is amortized in proportion to
anticipated premiums. Assumptions as to anticipated premiums are estimated
at the date of policy issue and are consistently applied during the life of
the contracts. Deviations from estimated experience are reflected in
earnings in the period such deviations occur. For these contracts, the
amortization periods generally are for the total life of the policy.
Policyholders' Account Balances and Future Policy Benefits
----------------------------------------------------------
Policyholders' account balances for universal life and investment-type
contracts are equal to the policy account values. The policy account values
represents an accumulation of gross premium payments plus credited interest
less expense and mortality charges and withdrawals.
For participating traditional life policies, future policy benefit
liabilities are calculated using a net level premium method on the basis of
actuarial assumptions equal to guaranteed mortality and dividend fund
interest rates. The liability for annual dividends represents the accrual
of annual dividends earned. Terminal dividends are accrued in proportion to
gross margins over the life of the contract.
For non-participating traditional life insurance policies, future policy
benefit liabilities are estimated using a net level premium method on the
basis of actuarial assumptions as to mortality, persistency and interest
established at policy issue. Assumptions established at policy issue as to
mortality and persistency are based on the Insurance Group's experience
which, together with interest and expense assumptions, includes a margin
for adverse deviation. When the liabilities for future policy benefits plus
the present value of expected future gross premiums for a product are
insufficient to provide for expected future policy benefits
F-10
<PAGE>
and expenses for that product, DAC is written off and thereafter, if
required, a premium deficiency reserve is established by a charge to
earnings. Benefit liabilities for traditional annuities during the
accumulation period are equal to accumulated contractholders' fund balances
and after annuitization are equal to the present value of expected future
payments. Interest rates used in establishing such liabilities range from
2.25% to 11.5% for life insurance liabilities and from 2.25% to 8.35% for
annuity liabilities.
Individual health benefit liabilities for active lives are estimated using
the net level premium method and assumptions as to future morbidity,
withdrawals and interest. Benefit liabilities for disabled lives are
estimated using the present value of benefits method and experience
assumptions as to claim terminations, expenses and interest. While
management believes its disability income ("DI") reserves have been
calculated on a reasonable basis and are adequate, there can be no
assurance reserves will be sufficient to provide for future liabilities.
Claim reserves and associated liabilities for individual DI and major
medical policies were $948.4 million and $951.7 million at December 31,
1999 and 1998, respectively. Incurred benefits (benefits paid plus changes
in claim reserves) and benefits paid for individual DI and major medical
are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Incurred benefits related to current year.......... $ 150.7 $ 140.1 $ 132.3
Incurred benefits related to prior years........... 64.7 84.2 60.0
------------- ------------ ------------
Total Incurred Benefits............................ $ 215.4 $ 224.3 $ 192.3
============= ============ ============
Benefits paid related to current year.............. $ 28.9 $ 17.0 $ 28.8
Benefits paid related to prior years............... 189.8 155.4 146.2
------------- ------------ ------------
Total Benefits Paid................................ $ 218.7 $ 172.4 $ 175.0
============= ============ ============
</TABLE>
Policyholders' Dividends
------------------------
The amount of policyholders' dividends to be paid (including those on
policies included in the Closed Block) is determined annually by Equitable
Life's board of directors. The aggregate amount of policyholders' dividends
is related to actual interest, mortality, morbidity and expense experience
for the year and judgment as to the appropriate level of statutory surplus
to be retained by Equitable Life.
At December 31, 1999, participating policies, including those in the Closed
Block, represent approximately 23.0% ($47.0 billion) of directly written
life insurance in force, net of amounts ceded.
Federal Income Taxes
--------------------
The Company files a consolidated Federal income tax return with the Holding
Company and its consolidated subsidiaries. Current Federal income taxes are
charged or credited to operations based upon amounts estimated to be
payable or recoverable as a result of taxable operations for the current
year. Deferred income tax assets and liabilities are recognized based on
the difference between financial statement carrying amounts and income tax
bases of assets and liabilities using enacted income tax rates and laws.
Separate Accounts
-----------------
Separate Accounts are established in conformity with the New York State
Insurance Law and generally are not chargeable with liabilities that arise
from any other business of the Insurance Group. Separate Accounts assets
are subject to General Account claims only to the extent the value of such
assets exceeds Separate Accounts liabilities.
F-11
<PAGE>
Assets and liabilities of the Separate Accounts, representing net deposits
and accumulated net investment earnings less fees, held primarily for the
benefit of contractholders, and for which the Insurance Group does not bear
the investment risk, are shown as separate captions in the consolidated
balance sheets. The Insurance Group bears the investment risk on assets
held in one Separate Account; therefore, such assets are carried on the
same basis as similar assets held in the General Account portfolio. Assets
held in the other Separate Accounts are carried at quoted market values or,
where quoted values are not available, at estimated fair values as
determined by the Insurance Group.
The investment results of Separate Accounts on which the Insurance Group
does not bear the investment risk are reflected directly in Separate
Accounts liabilities. For 1999, 1998 and 1997, investment results of such
Separate Accounts were $6,045.5 million, $4,591.0 million and $3,411.1
million, respectively.
Deposits to Separate Accounts are reported as increases in Separate
Accounts liabilities and are not reported in revenues. Mortality, policy
administration and surrender charges on all Separate Accounts are included
in revenues.
Employee Stock Option Plan
--------------------------
The Company accounts for stock option plans sponsored by the Holding
Company, DLJ and Alliance in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. In accordance with the opinion,
compensation expense is recorded on the date of grant only if the current
market price of the underlying stock exceeds the option strike price at the
grant date. See Note 22 for the pro forma disclosures for the Holding
Company, DLJ and Alliance required by SFAS No. 123, "Accounting for
Stock-Based Compensation".
F-12
<PAGE>
3) INVESTMENTS
The following tables provide additional information relating to fixed
maturities and equity securities:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
------------- ------------- ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1999
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,866.8 $ 139.5 $ 787.0 $ 14,219.3
Mortgage-backed.................... 2,554.5 2.3 87.8 2,469.0
U.S. Treasury, government and
agency securities................ 1,194.1 18.9 23.4 1,189.6
States and political subdivisions.. 110.0 1.4 4.9 106.5
Foreign governments................ 361.8 16.2 14.8 363.2
Redeemable preferred stock......... 286.4 1.7 36.0 252.1
------------- ------------- ------------ -------------
Total Available for Sale............... $ 19,373.6 $ 180.0 $ 953.9 $ 18,599.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 133.2 $ - $ - $ 133.2
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... 25.5 1.5 17.8 9.2
Common stock trading securities...... 7.2 9.1 2.2 14.1
------------- ------------- ------------ -------------
Total Equity Securities................ $ 32.7 $ 10.6 $ 20.0 $ 23.3
============= ============= ============ =============
December 31, 1998
-----------------
Fixed Maturities:
Available for Sale:
Corporate.......................... $ 14,520.8 $ 793.6 $ 379.6 $ 14,934.8
Mortgage-backed.................... 1,807.9 23.3 .9 1,830.3
U.S. Treasury, government and
agency securities................ 1,464.1 107.6 .7 1,571.0
States and political subdivisions.. 55.0 9.9 - 64.9
Foreign governments................ 363.3 20.9 30.0 354.2
Redeemable preferred stock......... 242.7 7.0 11.2 238.5
------------- ------------- ------------ -------------
Total Available for Sale............... $ 18,453.8 $ 962.3 $ 422.4 $ 18,993.7
============= ============= ============ =============
Held to Maturity: Corporate......... $ 125.0 $ - $ - $ 125.0
============= ============= ============ =============
Equity Securities:
Common stock available for sale...... $ 58.3 $ 114.9 $ 22.5 $ 150.7
============= ============= ============ =============
</TABLE>
For publicly traded fixed maturities and equity securities, estimated fair
value is determined using quoted market prices. For fixed maturities
without a readily ascertainable market value, the Company determines an
estimated fair value using a discounted cash flow approach, including
provisions for credit risk, generally based on the assumption such
securities will be held to maturity. Estimated fair values for equity
securities, substantially all of which do not have a readily ascertainable
market value, have been determined by the Company. Such estimated fair
values do not necessarily represent the values for which these securities
could have been sold at the dates of the consolidated balance sheets. At
December 31, 1999 and 1998, securities without a readily ascertainable
market value having an amortized cost of $3,322.2 million and $3,539.9
million, respectively, had estimated fair values of $3,177.7 million and
$3,748.5 million, respectively.
F-13
<PAGE>
The contractual maturity of bonds at December 31, 1999 is shown below:
<TABLE>
<CAPTION>
AVAILABLE FOR SALE
-------------------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less................................................ $ 479.1 $ 477.8
Due in years two through five.......................................... 2,991.8 2,921.2
Due in years six through ten........................................... 7,197.9 6,813.0
Due after ten years.................................................... 5,864.0 5,666.5
Mortgage-backed securities............................................. 2,554.4 2,469.1
------------ ------------
Total.................................................................. $ 19,087.2 $ 18,347.6
============ ============
</TABLE>
Corporate bonds held to maturity with an amortized cost and estimated fair
value of $133.2 million are due in one year or less.
Bonds not due at a single maturity date have been included in the above
table in the year of final maturity. Actual maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
The Insurance Group's fixed maturity investment portfolio includes
corporate high yield securities consisting of public high yield bonds,
redeemable preferred stocks and directly negotiated debt in leveraged
buyout transactions. The Insurance Group seeks to minimize the higher than
normal credit risks associated with such securities by monitoring
concentrations in any single issuer or a particular industry group. Certain
of these corporate high yield securities are classified as other than
investment grade by the various rating agencies, i.e., a rating below Baa
or National Association of Insurance Commissioners ("NAIC") designation of
3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near
default). At December 31, 1999, approximately 14.9% of the $18,344.3
million aggregate amortized cost of bonds held by the Company was
considered to be other than investment grade.
In addition, the Insurance Group is an equity investor in limited
partnership interests which primarily invest in securities considered to be
other than investment grade. The carrying values at December 31, 1999 and
1998 were $647.9 million and $562.6 million, respectively.
Investment valuation allowances and changes thereto are shown below:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balances, beginning of year........................ $ 230.6 $ 384.5 $ 137.1
Additions charged to income........................ 68.2 86.2 334.6
Deductions for writedowns and
asset dispositions............................... (150.2) (240.1) (87.2)
------------- ------------ ------------
Balances, End of Year.............................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
Balances, end of year comprise:
Mortgage loans on real estate.................... $ 27.5 $ 34.3 $ 55.8
Equity real estate............................... 121.1 196.3 328.7
------------- ------------ ------------
Total.............................................. $ 148.6 $ 230.6 $ 384.5
============= ============ ============
</TABLE>
F-14
<PAGE>
At December 31, 1999, the carrying value of fixed maturities which are
non-income producing for the twelve months preceding the consolidated
balance sheet date was $152.1 million.
The payment terms of mortgage loans on real estate may from time to time be
restructured or modified. The investment in restructured mortgage loans on
real estate, based on amortized cost, amounted to $106.0 million and $115.1
million at December 31, 1999 and 1998, respectively. Gross interest income
on restructured mortgage loans on real estate that would have been recorded
in accordance with the original terms of such loans amounted to $9.5
million, $10.3 million and $17.2 million in 1999, 1998 and 1997,
respectively. Gross interest income on these loans included in net
investment income aggregated $8.2 million, $8.3 million and $12.7 million
in 1999, 1998 and 1997, respectively.
Impaired mortgage loans along with the related provision for losses were as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1999 1998
-------------- --------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses.................. $ 142.4 $ 125.4
Impaired mortgage loans without provision for losses............... 2.2 8.6
-------------- --------------
Recorded investment in impaired mortgage loans..................... 144.6 134.0
Provision for losses............................................... (23.0) (29.0)
-------------- --------------
Net Impaired Mortgage Loans........................................ $ 121.6 $ 105.0
============== ==============
</TABLE>
Impaired mortgage loans without provision for losses are loans where the
fair value of the collateral or the net present value of the expected
future cash flows related to the loan equals or exceeds the recorded
investment. Interest income earned on loans where the collateral value is
used to measure impairment is recorded on a cash basis. Interest income on
loans where the present value method is used to measure impairment is
accrued on the net carrying value amount of the loan at the interest rate
used to discount the cash flows. Changes in the present value attributable
to changes in the amount or timing of expected cash flows are reported as
investment gains or losses.
During 1999, 1998 and 1997, respectively, the Company's average recorded
investment in impaired mortgage loans was $141.7 million, $161.3 million
and $246.9 million. Interest income recognized on these impaired mortgage
loans totaled $12.0 million, $12.3 million and $15.2 million ($0.0 million,
$.9 million and $2.3 million recognized on a cash basis) for 1999, 1998 and
1997, respectively.
The Insurance Group's investment in equity real estate is through direct
ownership and through investments in real estate joint ventures. At
December 31, 1999 and 1998, the carrying value of equity real estate held
for sale amounted to $382.2 million and $836.2 million, respectively. For
1999, 1998 and 1997, respectively, real estate of $20.5 million, $7.1
million and $152.0 million was acquired in satisfaction of debt. At
December 31, 1999 and 1998, the Company owned $443.9 million and $552.3
million, respectively, of real estate acquired in satisfaction of debt.
Depreciation of real estate held for production of income is computed using
the straight-line method over the estimated useful lives of the properties,
which generally range from 40 to 50 years. Accumulated depreciation on real
estate was $251.6 million and $374.8 million at December 31, 1999 and 1998,
respectively. Depreciation expense on real estate totaled $21.8 million,
$30.5 million and $74.9 million for 1999, 1998 and 1997, respectively.
F-15
<PAGE>
4) JOINT VENTURES AND PARTNERSHIPS
Summarized combined financial information for real estate joint ventures
(25 individual ventures at both December 31, 1999 and 1998) and for limited
partnership interests accounted for under the equity method, in which the
Company has an investment of $10.0 million or greater and an equity
interest of 10% or greater, follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Investments in real estate, at depreciated cost........................ $ 861.1 $ 913.7
Investments in securities, generally at estimated fair value........... 678.4 636.9
Cash and cash equivalents.............................................. 68.4 85.9
Other assets........................................................... 239.3 279.8
------------- -------------
Total Assets........................................................... $ 1,847.2 $ 1,916.3
============= =============
Borrowed funds - third party........................................... $ 354.2 $ 367.1
Borrowed funds - AXA Financial......................................... 28.9 30.1
Other liabilities...................................................... 313.9 197.2
------------- -------------
Total liabilities...................................................... 697.0 594.4
------------- -------------
Partners' capital...................................................... 1,150.2 1,321.9
------------- -------------
Total Liabilities and Partners' Capital................................ $ 1,847.2 $ 1,916.3
============= =============
Equity in partners' capital included above............................. $ 316.5 $ 365.6
Equity in limited partnership interests not included above and other... 524.1 390.1
------------- -------------
Carrying Value......................................................... $ 840.6 $ 755.7
============= =============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Revenues of real estate joint ventures............. $ 180.5 $ 246.1 $ 310.5
Revenues of other limited partnership interests.... 455.1 128.9 506.3
Interest expense - third party..................... (39.8) (33.3) (91.8)
Interest expense - AXA Financial................... (2.5) (2.6) (7.2)
Other expenses..................................... (139.0) (197.0) (263.6)
------------- ------------ ------------
Net Earnings....................................... $ 454.3 $ 142.1 $ 454.2
============= ============ ============
Equity in net earnings included above.............. $ 10.5 $ 44.4 $ 76.7
Equity in net earnings of limited partnership
interests not included above..................... 76.0 37.9 69.5
Other.............................................. - - (.9)
------------- ------------ ------------
Total Equity in Net Earnings....................... $ 86.5 $ 82.3 $ 145.3
============= ============ ============
</TABLE>
F-16
<PAGE>
5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES)
The sources of net investment income follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ 1,499.8 $ 1,489.0 $ 1,459.4
Mortgage loans on real estate...................... 253.4 235.4 260.8
Equity real estate................................. 250.2 356.1 390.4
Other equity investments........................... 165.1 83.8 156.9
Policy loans....................................... 143.8 144.9 177.0
Other investment income............................ 161.3 185.7 181.7
------------- ------------ ------------
Gross investment income.......................... 2,473.6 2,494.9 2,626.2
Investment expenses.............................. (232.7) (266.8) (343.4)
------------- ------------ ------------
Net Investment Income.............................. $ 2,240.9 $ 2,228.1 $ 2,282.8
============= ============ ============
</TABLE>
Investment (losses) gains, net, including changes in the valuation
allowances, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Fixed maturities................................... $ (290.9) $ (24.3) $ 88.1
Mortgage loans on real estate...................... (3.3) (10.9) (11.2)
Equity real estate................................. (2.4) 74.5 (391.3)
Other equity investments........................... 88.1 29.9 14.1
Sale of subsidiaries............................... - (2.6) 252.1
Issuance and sales of Alliance Units............... 5.5 19.8 -
Issuance and sales of DLJ common stock............. 106.0 18.2 3.0
Other.............................................. .1 (4.4) -
------------- ------------ ------------
Investment (Losses) Gains, Net..................... $ (96.9) $ 100.2 $ (45.2)
============= ============ ============
</TABLE>
Writedowns of fixed maturities amounted to $223.2 million, $101.6 million
and $11.7 million for 1999, 1998 and 1997, respectively, and writedowns of
equity real estate amounted to $136.4 million for 1997. In fourth quarter
1997, the Company reclassified $1,095.4 million depreciated cost of equity
real estate from real estate held for the production of income to real
estate held for sale. Additions to valuation allowances of $227.6 million
were recorded upon these transfers. Additionally, in fourth quarter 1997,
$132.3 million of writedowns on real estate held for production of income
were recorded.
For 1999, 1998 and 1997, respectively, proceeds received on sales of fixed
maturities classified as available for sale amounted to $7,138.6 million,
$15,961.0 million and $9,789.7 million. Gross gains of $74.7 million,
$149.3 million and $166.0 million and gross losses of $214.3 million, $95.1
million and $108.8 million, respectively, were realized on these sales. The
change in unrealized investment (losses) gains related to fixed maturities
classified as available for sale for 1999, 1998 and 1997 amounted to
$(1,313.8) million, $(331.7) million and $513.4 million, respectively.
On January 1, 1999, investments in publicly-traded common equity securities
in the General Account portfolio within other equity investments amounting
to $102.3 million were transferred from available for sale securities to
trading securities. As a result of this transfer, unrealized investment
gains of $83.3 million ($43.2 million net of related DAC and Federal income
taxes) were recognized as realized investment gains in the consolidated
statements of earnings. Net unrealized holding gains of $7.0 million were
included in net investment income in the consolidated statements of
earnings for 1999. These trading securities had a carrying value of $14.1
million and costs of $7.2 million at December 31, 1999.
F-17
<PAGE>
During 1999, DLJ completed its offering of a new class of its Common Stock
to track the financial performance of DLJdirect, its online brokerage
business. As a result of this offering, the Company recorded a non-cash
pre-tax realized gain of $95.8 million.
For 1999, 1998 and 1997, investment results passed through to certain
participating group annuity contracts as interest credited to
policyholders' account balances amounted to $131.5 million, $136.9 million
and $137.5 million, respectively.
In 1997, Equitable Life sold EREIM (other than its interest in Column
Financial, Inc.) ("ERE") to Lend Lease Corporation Limited ("Lend Lease"),
for $400.0 million and recognized an investment gain of $162.4 million, net
of Federal income tax of $87.4 million. Equitable Life entered into
long-term advisory agreements whereby ERE continues to provide
substantially the same services to Equitable Life's General Account and
Separate Accounts, for substantially the same fees, as provided prior to
the sale. Through June 10, 1997, the businesses sold reported combined
revenues of $91.6 million and combined net earnings of $10.7 million.
On June 30, 1997, Alliance reduced the recorded value of goodwill and
contracts associated with Alliance's 1996 acquisition of Cursitor Holdings
L.P. and Cursitor Holdings Limited (collectively, "Cursitor") by $120.9
million since Cursitor's business fundamentals no longer supported the
carrying value of its investment. The Company's earnings from continuing
operations for 1997 included a charge of $59.5 million, net of a Federal
income tax benefit of $10.0 million and minority interest of $51.4 million.
The remaining balance of intangible assets is being amortized over its
estimated useful life of 20 years.
Net unrealized investment gains (losses), included in the consolidated
balance sheets as a component of accumulated comprehensive income and the
changes for the corresponding years, follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year......................... $ 384.1 $ 533.6 $ 189.9
Changes in unrealized investment (losses) gains.... (1,486.6) (242.4) 543.3
Changes in unrealized investment losses
(gains) attributable to:
Participating group annuity contracts.......... 24.7 (5.7) 53.2
DAC............................................ 208.6 13.2 (89.0)
Deferred Federal income taxes.................. 476.4 85.4 (163.8)
------------- ------------ ------------
Balance, End of Year............................... $ (392.8) $ 384.1 $ 533.6
============= ============ ============
Balance, end of year comprises:
Unrealized investment (losses) gains on:
Fixed maturities............................... $ (773.9) $ 539.9 $ 871.2
Other equity investments....................... (16.3) 92.4 33.7
Other, principally Closed Block................ 46.8 111.1 80.9
------------- ------------ ------------
Total........................................ (743.4) 743.4 985.8
Amounts of unrealized investment gains
attributable to:
Participating group annuity contracts........ - (24.7) (19.0)
DAC.......................................... 80.8 (127.8) (141.0)
Deferred Federal income taxes................ 269.8 (206.8) (292.2)
------------- ------------ ------------
Total.............................................. $ (392.8) $ 384.1 $ 533.6
============= ============ ============
</TABLE>
Changes in unrealized gains (losses) reflect changes in fair value of only
those fixed maturities and equity securities classified as available for
sale and do not reflect any changes in fair value of policyholders' account
balances and future policy benefits.
F-18
<PAGE>
6) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Accumulated other comprehensive income (loss) represents cumulative gains
and losses on items that are not reflected in earnings. The balances for
the past three years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Unrealized (losses) gains on investments........... $ (392.8) $ 384.1 $ 533.6
Minimum pension liability.......................... (.1) (28.3) (17.3)
------------- ------------ ------------
Total Accumulated Other
Comprehensive (Loss) Income...................... $ (392.9) $ 355.8 $ 516.3
============= ============ ============
</TABLE>
The components of other comprehensive income (loss) for the past three
years follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Net unrealized (losses) gains on investment
securities:
Net unrealized (losses) gains arising during
the period..................................... $ (1,682.3) $ (186.1) $ 564.0
Adjustment to reclassify losses (gains)
included in net earnings during the period..... 195.7 (56.3) (20.7)
------------- ------------ ------------
Net unrealized (losses) gains on investment
securities..................................... (1,486.6) (242.4) 543.3
Adjustments for policyholder liabilities,
DAC and deferred Federal income taxes.......... 709.7 92.9 (199.6)
------------- ------------ ------------
Change in unrealized losses (gains), net of
adjustments.................................... (776.9) (149.5) 343.7
Change in minimum pension liability................ 28.2 (11.0) (4.4)
------------- ------------ ------------
Total Other Comprehensive (Loss) Income............ $ (748.7) $ (160.5) $ 339.3
============= ============ ============
</TABLE>
F-19
<PAGE>
7) CLOSED BLOCK
Summarized financial information for the Closed Block follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C
BALANCE SHEETS
Fixed Maturities:
Available for sale, at estimated fair value (amortized cost,
$4,144.8 and $4,149.0)........................................... $ 4,014.0 $ 4,373.2
Mortgage loans on real estate........................................ 1,704.2 1,633.4
Policy loans......................................................... 1,593.9 1,641.2
Cash and other invested assets....................................... 194.4 86.5
DAC.................................................................. 895.5 676.5
Other assets......................................................... 205.3 221.6
------------ ------------
Total Assets......................................................... $ 8,607.3 $ 8,632.4
============ ============
Future policy benefits and policyholders' account balances........... $ 9,011.7 $ 9,013.1
Other liabilities.................................................... 13.3 63.9
------------ ------------
Total Liabilities.................................................... $ 9,025.0 $ 9,077.0
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Premiums and other revenue......................... $ 619.1 $ 661.7 $ 687.1
Investment income (net of investment
expenses of $15.8, $15.5 and $27.0).............. 574.2 569.7 574.9
Investment (losses) gains, net..................... (11.3) .5 (42.4)
------------- ------------ ------------
Total revenues............................... 1,182.0 1,231.9 1,219.6
------------- ------------ ------------
Policyholders' benefits and dividends.............. 1,024.7 1,082.0 1,066.7
Other operating costs and expenses................. 70.9 62.8 50.4
------------- ------------ ------------
Total benefits and other deductions.......... 1,095.6 1,144.8 1,117.1
------------- ------------ ------------
Contribution from the Closed Block................. $ 86.4 $ 87.1 $ 102.5
============= ============ ============
</TABLE>
Impaired mortgage loans along with the related provision for losses
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1999 1998
------------- -------------
(IN MILLIONS)
<S> <C> <C>
Impaired mortgage loans with provision for losses...................... $ 26.8 $ 55.5
Impaired mortgage loans without provision for losses................... 4.5 7.6
------------- -------------
Recorded investment in impaired mortgages.............................. 31.3 63.1
Provision for losses................................................... (4.1) (10.1)
------------- -------------
Net Impaired Mortgage Loans............................................ $ 27.2 $ 53.0
============= =============
</TABLE>
During 1999, 1998 and 1997, the Closed Block's average recorded investment
in impaired mortgage loans was $37.0 million, $85.5 million and $110.2
million, respectively. Interest income recognized on these impaired
mortgage loans totaled $3.3 million, $4.7 million and $9.4 million ($.3
million, $1.5 million and $4.1 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
F-20
<PAGE>
Valuation allowances amounted to $4.6 million and $11.1 million on mortgage
loans on real estate and $24.7 million and $15.4 million on equity real
estate at December 31, 1999 and 1998, respectively. Writedowns of fixed
maturities amounted to $3.5 million for 1997. Writedowns of equity real
estate amounted to $28.8 million for 1997.
In fourth quarter 1997, $72.9 million depreciated cost of equity real
estate held for production of income was reclassified to equity real estate
held for sale. Additions to valuation allowances of $15.4 million were
recorded upon these transfers. Also in fourth quarter 1997, $28.8 million
of writedowns on real estate held for production of income were recorded.
Many expenses related to Closed Block operations are charged to operations
outside of the Closed Block; accordingly, the contribution from the Closed
Block does not represent the actual profitability of the Closed Block
operations. Operating costs and expenses outside of the Closed Block are,
therefore, disproportionate to the business outside of the Closed Block.
F-21
<PAGE>
8) DISCONTINUED OPERATIONS
Summarized financial information for discontinued operations follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEETS
Mortgage loans on real estate........................................ $ 454.6 $ 553.9
Equity real estate................................................... 426.6 611.0
Other equity investments............................................. 55.8 115.1
Other invested assets................................................ 87.1 24.9
------------ ------------
Total investments.................................................. 1,024.1 1,304.9
Cash and cash equivalents............................................ 164.5 34.7
Other assets......................................................... 213.0 219.0
------------ ------------
Total Assets......................................................... $ 1,401.6 $ 1,558.6
============ ============
Policyholders' liabilities........................................... $ 993.3 $ 1,021.7
Allowance for future losses.......................................... 242.2 305.1
Other liabilities.................................................... 166.1 231.8
------------ ------------
Total Liabilities.................................................... $ 1,401.6 $ 1,558.6
============ ============
</TABLE>
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF EARNINGS
Investment income (net of investment
expenses of $49.3, $63.3 and $97.3).............. $ 98.7 $ 160.4 $ 188.6
Investment (losses) gains, net..................... (13.4) 35.7 (173.7)
Policy fees, premiums and other income............. .2 (4.3) .2
------------- ------------ ------------
Total revenues..................................... 85.5 191.8 15.1
Benefits and other deductions...................... 104.8 141.5 169.5
(Losses charged) earnings credited to allowance
for future losses................................ (19.3) 50.3 (154.4)
------------- ------------ ------------
Pre-tax loss from operations....................... - - -
Pre-tax earnings from releasing (loss from
strengthening) the allowance for future
losses........................................... 43.3 4.2 (134.1)
Federal income tax (expense) benefit............... (15.2) (1.5) 46.9
------------- ------------ ------------
Earnings (Loss) from Discontinued Operations....... $ 28.1 $ 2.7 $ (87.2)
============= ============ ============
</TABLE>
The Company's quarterly process for evaluating the allowance for future
losses applies the current period's results of the discontinued operations
against the allowance, re-estimates future losses and adjusts the
allowance, if appropriate. Additionally, as part of the Company's annual
planning process which takes place in the fourth quarter of each year,
investment and benefit cash flow projections are prepared. These updated
assumptions and estimates resulted in a release of allowance in 1999 and
1998 and strengthening of allowance in 1997.
In fourth quarter 1997, $329.9 million depreciated cost of equity real
estate was reclassified from equity real estate held for production of
income to real estate held for sale. Additions to valuation allowances of
$79.8 million were recognized upon these transfers. Also in fourth quarter
1997, $92.5 million of writedowns on real estate held for production of
income were recognized.
F-22
<PAGE>
Benefits and other deductions includes $26.6 million and $53.3 million of
interest expense related to amounts borrowed from continuing operations in
1998 and 1997, respectively.
Valuation allowances of $1.9 million and $3.0 million on mortgage loans on
real estate and $54.8 million and $34.8 million on equity real estate were
held at December 31, 1999 and 1998, respectively. Writedowns of equity real
estate were $95.7 million in 1997.
During 1999, 1998 and 1997, discontinued operations' average recorded
investment in impaired mortgage loans was $13.8 million, $73.3 million and
$89.2 million, respectively. Interest income recognized on these impaired
mortgage loans totaled $1.7 million, $4.7 million and $6.6 million ($.0
million, $3.4 million and $5.3 million recognized on a cash basis) for
1999, 1998 and 1997, respectively.
At December 31, 1999 and 1998, discontinued operations had real estate
acquired in satisfaction of debt with carrying values of $24.1 million and
$50.0 million, respectively.
9) SHORT-TERM AND LONG-TERM DEBT
Short-term and long-term debt consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Short-term debt...................................................... $ 557.0 $ 179.3
------------ ------------
Long-term debt:
Equitable Life:
Surplus notes, 6.95% due 2005...................................... 399.5 399.4
Surplus notes, 7.70% due 2015...................................... 199.7 199.7
Other.............................................................. .4 .3
------------ ------------
Total Equitable Life........................................... 599.6 599.4
------------ ------------
Wholly Owned and Joint Venture Real Estate:
Mortgage notes, 5.43% - 9.5%, due through 2017..................... 251.3 392.2
------------ ------------
Alliance:
Other.............................................................. - 10.8
------------ ------------
Total long-term debt................................................. 850.9 1,002.4
------------ ------------
Total Short-term and Long-term Debt.................................. $ 1,407.9 $ 1,181.7
============ ============
</TABLE>
Short-term Debt
---------------
Equitable Life has a $700.0 million bank credit facility available to fund
short-term working capital needs and to facilitate the securities
settlement process. The credit facility consists of two types of borrowing
options with varying interest rates and expires in September 2000. The
interest rates are based on external indices dependent on the type of
borrowing and at December 31, 1999 range from 5.76% to 8.5%. There were no
borrowings outstanding under this bank credit facility at December 31,
1999.
Equitable Life has a commercial paper program with an issue limit of $1.0
billion. This program is available for general corporate purposes used to
support Equitable Life's liquidity needs and is supported by Equitable
Life's existing $700.0 million bank credit facility. At December 31, 1999,
there were $166.9 million outstanding under this program.
Alliance has a $425.0 million five-year revolving credit facility with a
group of commercial banks. Under the facility, the interest rate, at the
option of Alliance, is a floating rate generally based upon a defined prime
rate, a rate related to the London Interbank Offered Rate ("LIBOR") or the
Federal Funds Rate. A facility fee is payable on the total facility. During
July 1999, Alliance increased the size of its commercial paper program by
$200.0 million from $425.0 million for a total available limit of $625.0
million. Borrowings from the revolving credit facility and the original
commercial paper program may not exceed $425.0 million in the aggregate.
The revolving credit facility provides backup liquidity for commercial
paper issued under
F-23
<PAGE>
Alliance's commercial paper program and can be used as a direct source of
borrowing. The revolving credit facility contains covenants that require
Alliance to, among other things, meet certain financial ratios. At December
31, 1999, Alliance had commercial paper outstanding totaling $384.7 million
at an effective interest rate of 5.9%; there were no borrowings outstanding
under Alliance's revolving credit facility.
In December 1999, Alliance established a $100.0 million extendible
commercial notes ("ECN") program to supplement its commercial paper
program. ECN's are short-term debt instruments that do not require any
back-up liquidity support.
Long-term Debt
--------------
Several of the long-term debt agreements have restrictive covenants related
to the total amount of debt, net tangible assets and other matters. At
December 31, 1999, the Company is in compliance with all debt covenants.
The Company has pledged real estate, mortgage loans, cash and securities
amounting to $323.6 million and $640.2 million at December 31, 1999 and
1998, respectively, as collateral for certain short-term and long-term
debt.
At December 31, 1999, aggregate maturities of the long-term debt based on
required principal payments at maturity was $3.0 million for 2000 and
$848.7 million for 2005 and thereafter.
10) FEDERAL INCOME TAXES
A summary of the Federal income tax expense in the consolidated statements
of earnings follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Federal income tax expense (benefit):
Current.......................................... $ 174.0 $ 283.3 $ 186.5
Deferred......................................... 158.0 69.8 (95.0)
------------- ------------ ------------
Total.............................................. $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
F-24
<PAGE>
The Federal income taxes attributable to consolidated operations are
different from the amounts determined by multiplying the earnings before
Federal income taxes and minority interest by the expected Federal income
tax rate of 35%. The sources of the difference and their tax effects
follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Expected Federal income tax expense................ $ 458.4 $ 414.3 $ 234.7
Non-taxable minority interest...................... (47.8) (33.2) (38.0)
Non-taxable subsidiary gains....................... (37.1) (6.4) -
Adjustment of tax audit reserves................... 27.8 16.0 (81.7)
Equity in unconsolidated subsidiaries.............. (64.0) (39.3) (45.1)
Other.............................................. (5.3) 1.7 21.6
------------- ------------ ------------
Federal Income Tax Expense......................... $ 332.0 $ 353.1 $ 91.5
============= ============ ============
</TABLE>
The components of the net deferred Federal income taxes are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999 December 31, 1998
----------------------------- -----------------------------
ASSETS LIABILITIES Assets Liabilities
----------- ------------ ------------ -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Compensation and related benefits...... $ - $ 37.7 $ 235.3 $ -
Other.................................. - 20.6 27.8 -
DAC, reserves and reinsurance.......... - 329.7 - 231.4
Investments............................ 115.1 - - 364.4
----------- ------------ ------------ -----------
Total.................................. $ 115.1 $ 388.0 $ 263.1 $ 595.8
=========== ============ ============ ===========
</TABLE>
At December 31, 1999, in conjunction with the non-qualified employee
benefit plans, $236.8 million in deferred tax asset was transferred to the
Holding Company. See Note 12 for discussion of the benefit plans
transferred.
The deferred Federal income taxes impacting operations reflect the net tax
effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for
income tax purposes. The sources of these temporary differences and their
tax effects follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
DAC, reserves and reinsurance...................... $ 83.2 $ (7.7) $ 46.2
Investments........................................ 3.2 46.8 (113.8)
Compensation and related benefits.................. 21.0 28.6 3.7
Other.............................................. 50.6 2.1 (31.1)
------------- ------------ ------------
Deferred Federal Income Tax
Expense (Benefit)................................ $ 158.0 $ 69.8 $ (95.0)
============= ============ ============
</TABLE>
The Internal Revenue Service (the "IRS") is in the process of examining the
Holding Company's consolidated Federal income tax returns for the years
1992 through 1996. Management believes these audits will have no material
adverse effect on the Company's results of operations.
F-25
<PAGE>
11) REINSURANCE AGREEMENTS
The Insurance Group assumes and cedes reinsurance with other insurance
companies. The Insurance Group evaluates the financial condition of its
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies. Ceded reinsurance does not relieve the originating insurer of
liability. The effect of reinsurance (excluding group life and health) is
summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Direct premiums.................................... $ 420.6 $ 438.8 $ 448.6
Reinsurance assumed................................ 206.7 203.6 198.3
Reinsurance ceded.................................. (69.1) (54.3) (45.4)
------------- ------------ ------------
Premiums........................................... $ 558.2 $ 588.1 $ 601.5
============= ============ ============
Universal Life and Investment-type Product
Policy Fee Income Ceded.......................... $ 69.7 $ 75.7 $ 61.0
============= ============ ============
Policyholders' Benefits Ceded...................... $ 99.6 $ 85.9 $ 70.6
============= ============ ============
Interest Credited to Policyholders' Account
Balances Ceded................................... $ 38.5 $ 39.5 $ 36.4
============= ============ ============
</TABLE>
Since 1997, the Company reinsures on a yearly renewal term basis 90% of the
mortality risk on new issues of certain term, universal and variable life
products. The Company's retention limit on joint survivorship policies is
$15.0 million. All in force business above $5.0 million is reinsured. The
Insurance Group also reinsures the entire risk on certain substandard
underwriting risks and in certain other cases.
The Insurance Group cedes 100% of its group life and health business to a
third party insurer. Premiums ceded totaled $.1 million, $1.3 million and
$1.6 million for 1999, 1998 and 1997, respectively. Ceded death and
disability benefits totaled $44.7 million, $15.6 million and $4.3 million
for 1999, 1998 and 1997, respectively. Insurance liabilities ceded totaled
$510.5 million and $560.3 million at December 31, 1999 and 1998,
respectively.
F-26
<PAGE>
12) EMPLOYEE BENEFIT PLANS
The Company sponsors qualified and non-qualified defined benefit plans
covering substantially all employees (including certain qualified part-time
employees), managers and certain agents. The pension plans are
non-contributory. Equitable Life's benefits are based on a cash balance
formula or years of service and final average earnings, if greater, under
certain grandfathering rules in the plans. Alliance's benefits are based on
years of credited service, average final base salary and primary social
security benefits. The Company's funding policy is to make the minimum
contribution required by the Employee Retirement Income Security Act of
1974 ("ERISA").
Effective December 31, 1999, the Holding Company legally assumed primary
liability from Equitable Life for all current and future obligations of its
Excess Retirement Plan, Supplemental Executive Retirement Plan and certain
other employee benefit plans that provide participants with medical, life
insurance, and deferred compensation benefits; Equitable Life remains
secondarily liable. The amount of the liability associated with employee
benefits transferred was $676.5 million, including $183.0 million of
non-qualified pension benefit obligations and $394.1 million of
postretirement benefits obligations at December 31, 1999. This transfer was
recorded as a non-cash capital contribution to Equitable Life.
Components of net periodic pension (credit) cost for the qualified and
non-qualified plans follow:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 36.7 $ 33.2 $ 32.5
Interest cost on projected benefit obligations..... 131.6 129.2 128.2
Actual return on assets............................ (189.8) (175.6) (307.6)
Net amortization and deferrals..................... 7.5 6.1 166.6
------------- ------------ ------------
Net Periodic Pension Cost (Credit)................. $ (14.0) $ (7.1) $ 19.7
============= ============ ============
</TABLE>
The projected benefit obligations under the qualified and non-qualified
pension plans were comprised of:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Benefit obligations, beginning of year................................. $ 1,933.4 $ 1,801.3
Service cost........................................................... 36.7 33.2
Interest cost.......................................................... 131.6 129.2
Actuarial (gains) losses............................................... (53.3) 108.4
Benefits paid.......................................................... (123.1) (138.7)
------------ ------------
Subtotal before transfer............................................... 1,925.3 1,933.4
Transfer of Non-qualified Pension Benefit Obligation
to the Holding Company............................................... (262.5) -
------------ ------------
Benefit Obligation, End of Year........................................ $ 1,662.8 $ 1,933.4
============ ============
</TABLE>
F-27
<PAGE>
The funded status of the qualified and non-qualified pension plans was as
follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Plan assets at fair value, beginning of year........................... $ 2,083.1 $ 1,867.4
Actual return on plan assets........................................... 369.0 338.9
Contributions.......................................................... .1 -
Benefits paid and fees................................................. (108.5) (123.2)
------------ ------------
Plan assets at fair value, end of year................................. 2,343.7 2,083.1
Projected benefit obligations.......................................... 1,925.3 1,933.4
------------ ------------
Excess of plan assets over projected benefit obligations............... 418.4 149.7
Unrecognized prior service cost........................................ (5.2) (7.5)
Unrecognized net (gain) loss from past experience different
from that assumed.................................................... (197.3) 38.7
Unrecognized net asset at transition................................... (.1) 1.5
------------ ------------
Subtotal before transfer............................................... 215.8 182.4
Transfer of Accrued Non-qualified Pension Benefit Obligation
to the Holding Company............................................... 183.0 -
------------ ------------
Prepaid Pension Cost, Net.............................................. $ 398.8 $ 182.4
============ ============
</TABLE>
The prepaid pension cost for pension plans with assets in excess of
projected benefit obligations was $412.2 million and $363.9 million and the
accrued liability for pension plans with projected benefit obligations in
excess of plan assets was $13.5 million and $181.5 million at December 31,
1999 and 1998, respectively.
The pension plan assets include corporate and government debt securities,
equity securities, equity real estate and shares of group trusts managed by
Alliance. The discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of projected benefit
obligations were 8.0% and 6.38%, respectively, at December 31, 1999 and
7.0% and 3.83%, respectively, at December 31, 1998. As of January 1, 1999
and 1998, the expected long-term rate of return on assets for the
retirement plan was 10.0% and 10.25%, respectively.
The Company recorded, as a reduction of shareholder's equity, an additional
minimum pension liability of $.1 million, $28.3 million and $17.3 million,
net of Federal income taxes, at December 31, 1999, 1998 and 1997,
respectively, primarily representing the excess of the accumulated benefit
obligation of the non-qualified pension plan over the accrued liability.
The aggregate accumulated benefit obligation and fair value of plan assets
for pension plans with accumulated benefit obligations in excess of plan
assets were $325.7 million and $36.3 million, respectively, at December 31,
1999 and $309.7 million and $34.5 million, respectively, at December 31,
1998.
Prior to 1987, the qualified plan funded participants' benefits through the
purchase of non-participating annuity contracts from Equitable Life.
Benefit payments under these contracts were approximately $30.2 million,
$31.8 million and $33.2 million for 1999, 1998 and 1997, respectively.
The Company provides certain medical and life insurance benefits
(collectively, "postretirement benefits") for qualifying employees,
managers and agents retiring from the Company (i) on or after attaining age
55 who have at least 10 years of service or (ii) on or after attaining age
65 or (iii) whose jobs have been abolished and who have attained age 50
with 20 years of service. The life insurance benefits are related to age
and salary at retirement. The costs of postretirement benefits are
recognized in accordance with the provisions of SFAS No. 106. The Company
continues to fund postretirement benefits costs on a pay-as-you-go basis
and, for 1999, 1998 and 1997, the Company made estimated postretirement
benefits payments of $29.5 million, $28.4 million and $18.7 million,
respectively.
F-28
<PAGE>
The following table sets forth the postretirement benefits plan's status,
reconciled to amounts recognized in the Company's consolidated financial
statements:
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- -----------------
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 4.7 $ 4.6 $ 4.5
Interest cost on accumulated postretirement
benefits obligation.............................. 34.4 33.6 34.7
Unrecognized prior service costs................... (7.0) - -
Net amortization and deferrals..................... 8.4 .5 1.9
----------------- ---------------- -----------------
Net Periodic Postretirement Benefits Costs......... $ 40.5 $ 38.7 $ 41.1
================= ================ =================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefits obligation, beginning
of year.............................................................. $ 490.4 $ 490.8
Service cost........................................................... 4.7 4.6
Interest cost.......................................................... 34.4 33.6
Contributions and benefits paid........................................ (29.5) (28.4)
Actuarial gains........................................................ (29.0) (10.2)
------------ ------------
Accumulated postretirement benefits obligation, end of year............ 471.0 490.4
Unrecognized prior service cost........................................ 26.9 31.8
Unrecognized net loss from past experience different
from that assumed and from changes in assumptions.................... (86.0) (121.2)
------------ ------------
Subtotal before transfer............................................... 411.9 401.0
Transfer to the Holding Company........................................ (394.1) -
------------ ------------
Accrued Postretirement Benefits Cost................................... $ 17.8 $ 401.0
============ ============
</TABLE>
Since January 1, 1994, costs to the Company for providing these medical
benefits available to retirees under age 65 are the same as those offered
to active employees and medical benefits will be limited to 200% of 1993
costs for all participants.
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefits obligation was 7.5% in 1999, gradually declining to
4.75% in the year 2010, and in 1998 was 8.0%, gradually declining to 2.5%
in the year 2009. The discount rate used in determining the accumulated
postretirement benefits obligation was 8.0% and 7.0% at December 31, 1999
and 1998, respectively.
If the health care cost trend rate assumptions were increased by 1%, the
accumulated postretirement benefits obligation as of December 31, 1999
would be increased 3.55%. The effect of this change on the sum of the
service cost and interest cost would be an increase of 3.91%. If the health
care cost trend rate assumptions were decreased by 1% the accumulated
postretirement benefits obligation as of December 31, 1999 would be
decreased by 4.38%. The effect of this change on the sum of the service
cost and interest cost would be a decrease of 4.96%.
F-29
<PAGE>
13) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Derivatives
-----------
The Insurance Group primarily uses derivatives for asset/liability risk
management and for hedging individual securities. Derivatives mainly are
utilized to reduce the Insurance Group's exposure to interest rate
fluctuations. Accounting for interest rate swap transactions is on an
accrual basis. Gains and losses related to interest rate swap transactions
are amortized as yield adjustments over the remaining life of the
underlying hedged security. Income and expense resulting from interest rate
swap activities are reflected in net investment income. The notional amount
of matched interest rate swaps outstanding at December 31, 1999 and 1998,
respectively, was $797.3 million and $880.9 million. The average unexpired
terms at December 31, 1999 ranged from two months to 5.0 years. At December
31, 1999, the cost of terminating swaps in a loss position was $1.8
million. Equitable Life maintains an interest rate cap program designed to
hedge crediting rates on interest-sensitive individual annuities contracts.
The outstanding notional amounts at December 31, 1999 of contracts
purchased and sold were $7,575.0 million and $875.0 million, respectively.
The net premium paid by Equitable Life on these contracts was $51.6 million
and is being amortized ratably over the contract periods ranging from 1 to
4 years. Income and expense resulting from this program are reflected as an
adjustment to interest credited to policyholders' account balances.
DLJ enters into certain contractual agreements referred to as derivatives
or off-balance-sheet financial instruments primarily for trading purposes
and to provide products for its clients. DLJ performs the following
activities: writing over-the-counter ("OTC") options to accommodate
customer needs; trading in forward contracts in U.S. government and agency
issued or guaranteed securities; trading in futures contracts on equity
based indices, interest rate instruments, and currencies; and issuing
structured products based on emerging market financial instruments and
indices. DLJ also enters into swap agreements, primarily equity, interest
rate and foreign currency swaps. DLJ is not significantly involved in
commodity derivative instruments.
Fair Value of Financial Instruments
-----------------------------------
The Company defines fair value as the quoted market prices for those
instruments that are actively traded in financial markets. In cases where
quoted market prices are not available, fair values are estimated using
present value or other valuation techniques. The fair value estimates are
made at a specific point in time, based on available market information and
judgments about the financial instrument, including estimates of the timing
and amount of expected future cash flows and the credit standing of
counterparties. Such estimates do not reflect any premium or discount that
could result from offering for sale at one time the Company's entire
holdings of a particular financial instrument, nor do they consider the tax
impact of the realization of unrealized gains or losses. In many cases, the
fair value estimates cannot be substantiated by comparison to independent
markets, nor can the disclosed value be realized in immediate settlement of
the instrument.
Certain financial instruments are excluded, particularly insurance
liabilities other than financial guarantees and investment contracts. Fair
market value of off-balance-sheet financial instruments of the Insurance
Group was not material at December 31, 1999 and 1998.
F-30
<PAGE>
Fair values for mortgage loans on real estate are estimated by discounting
future contractual cash flows using interest rates at which loans with
similar characteristics and credit quality would be made. Fair values for
foreclosed mortgage loans and problem mortgage loans are limited to the
estimated fair value of the underlying collateral if lower.
Fair values of policy loans are estimated by discounting the face value of
the loans from the time of the next interest rate review to the present, at
a rate equal to the excess of the current estimated market rates over the
current interest rate charged on the loan.
The estimated fair values for the Company's association plan contracts,
supplementary contracts not involving life contingencies ("SCNILC") and
annuities certain, which are included in policyholders' account balances,
and guaranteed interest contracts are estimated using projected cash flows
discounted at rates reflecting expected current offering rates.
The estimated fair values for variable deferred annuities and single
premium deferred annuities ("SPDA"), which are included in policyholders'
account balances, are estimated by discounting the account value back from
the time of the next crediting rate review to the present, at a rate equal
to the excess of current estimated market rates offered on new policies
over the current crediting rates.
Fair values for long-term debt are determined using published market
values, where available, or contractual cash flows discounted at market
interest rates. The estimated fair values for non-recourse mortgage debt
are determined by discounting contractual cash flows at a rate which takes
into account the level of current market interest rates and collateral
risk. The estimated fair values for recourse mortgage debt are determined
by discounting contractual cash flows at a rate based upon current interest
rates of other companies with credit ratings similar to the Company. The
Company's carrying value of short-term borrowings approximates their
estimated fair value.
The following table discloses carrying value and estimated fair value for
financial instruments not otherwise disclosed in Notes 3, 7 and 8:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------
1999 1998
--------------------------------- ---------------------------------
CARRYING ESTIMATED Carrying Estimated
VALUE FAIR VALUE Value Fair Value
--------------- ---------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Consolidated Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 3,270.0 $ 3,239.3 $ 2,809.9 $ 2,961.8
Other limited partnership interests.... 647.9 647.9 562.6 562.6
Policy loans........................... 2,257.3 2,359.5 2,086.7 2,370.7
Policyholders' account balances -
investment contracts................. 12,740.4 12,800.5 12,892.0 13,396.0
Long-term debt......................... 850.9 834.9 1,002.4 1,025.2
Closed Block Financial Instruments:
-----------------------------------
Mortgage loans on real estate.......... $ 1,704.2 $ 1,650.3 $ 1,633.4 $ 1,703.5
Other equity investments............... 36.3 36.3 56.4 56.4
Policy loans........................... 1,593.9 1,712.0 1,641.2 1,929.7
SCNILC liability....................... 22.8 22.5 25.0 25.0
Discontinued Operations Financial
---------------------------------
Instruments:
------------
Mortgage loans on real estate.......... $ 454.6 $ 467.0 $ 553.9 $ 599.9
Fixed maturities....................... 85.5 85.5 24.9 24.9
Other equity investments............... 55.8 55.8 115.1 115.1
Guaranteed interest contracts.......... 33.2 27.5 37.0 34.0
Long-term debt......................... 101.9 101.9 147.1 139.8
</TABLE>
F-31
<PAGE>
14) COMMITMENTS AND CONTINGENT LIABILITIES
The Company has provided, from time to time, certain guarantees or
commitments to affiliates, investors and others. These arrangements include
commitments by the Company, under certain conditions: to make capital
contributions of up to $59.4 million to affiliated real estate joint
ventures; and to provide equity financing to certain limited partnerships
of $373.8 million at December 31, 1999, under existing loan or loan
commitment agreements.
Equitable Life is the obligor under certain structured settlement
agreements which it had entered into with unaffiliated insurance companies
and beneficiaries. To satisfy its obligations under these agreements,
Equitable Life owns single premium annuities issued by previously wholly
owned life insurance subsidiaries. Equitable Life has directed payment
under these annuities to be made directly to the beneficiaries under the
structured settlement agreements. A contingent liability exists with
respect to these agreements should the previously wholly owned subsidiaries
be unable to meet their obligations. Management believes the satisfaction
of those obligations by Equitable Life is remote.
The Insurance Group had $24.9 million of letters of credit outstanding at
December 31, 1999.
15) LITIGATION
The Company
-----------
Life Insurance and Annuity Sales Cases
A number of lawsuits are pending as individual claims and purported class
actions against Equitable Life, its subsidiary insurance company and a
former insurance subsidiary. These actions involve, among other things,
sales of life and annuity products for varying periods from 1980 to the
present, and allege, among other things, sales practice misrepresentation
primarily involving: the number of premium payments required; the propriety
of a product as an investment vehicle; the propriety of a product as a
replacement of an existing policy; and failure to disclose a product as
life insurance. Some actions are in state courts and others are in U.S.
District Courts in different jurisdictions, and are in varying stages of
discovery and motions for class certification.
In general, the plaintiffs request an unspecified amount of damages,
punitive damages, enjoinment from the described practices, prohibition
against cancellation of policies for non-payment of premium or other
remedies, as well as attorneys' fees and expenses. Similar actions have
been filed against other life and health insurers and have resulted in the
award of substantial judgments, including material amounts of punitive
damages, or in substantial settlements. Although the outcome of litigation
cannot be predicted with certainty, particularly in the early stages of an
action, the Company's management believes that the ultimate resolution of
these cases should not have a material adverse effect on the financial
position of the Company. The Company's management cannot make an estimate
of loss, if any, or predict whether or not any such litigation will have a
material adverse effect on the Company's results of operations in any
particular period.
Discrimination Case
Equitable Life is a defendant in an action, certified as a class action in
September 1997, in the United States District Court for the Northern
District of Alabama, Southern Division, involving alleged discrimination on
the basis of race against African-American applicants and potential
applicants in hiring individuals as sales agents. Plaintiffs seek a
declaratory judgment and affirmative and negative injunctive relief,
including the payment of back-pay, pension and other compensation. Although
the outcome of litigation cannot be predicted with certainty, the Company's
management believes that the ultimate resolution of this matter should not
have a material adverse effect on the financial position of the Company.
The Company's management cannot make an estimate of loss, if any, or
predict whether or not such matter will have a material adverse effect on
the Company's results of operations in any particular period.
Agent Health Benefits Case
Equitable Life is a defendant in an action, certified as a class action in
March 1999, in the United States District Court for the Northern District
of California, alleging, among other things, that Equitable Life violated
ERISA by eliminating certain alternatives pursuant to which agents of
Equitable Life could qualify for health care coverage. The class consists
of "[a]ll current, former and retired Equitable agents, who while
F-32
<PAGE>
associated with Equitable satisfied [certain alternatives] to qualify for
health coverage or contributions thereto under applicable plans."
Plaintiffs allege various causes of action under ERISA, including claims
for enforcement of alleged promises contained in plan documents and for
enforcement of agent bulletins, breach of unilateral contract, breach of
fiduciary duty and promissory estoppel. The parties are currently engaged
in discovery. Although the outcome of any litigation cannot be predicted
with certainty, the Company's management believes that the ultimate
resolution of this matter should not have a material adverse effect on the
financial position of the Company. The Company's management cannot make an
estimate of loss, if any, or predict whether or not such matter will have a
material adverse effect on the Company's results of operations in any
particular period.
Prime Property Fund Case
In January 2000, the California Supreme Court denied the Company's petition
for review of an October 1999 decision by the California Superior Court of
Appeal. Such decision reversed the dismissal by the Supreme Court of Orange
County, California of an action which was commenced in 1995 by a real
estate developer in connection with a limited partnership formed in 1991
with the Company on behalf of Prime Property Fund ("PPF"). The Company
serves as investment manager for PPF, an open-end, commingled real estate
separate account of the Company for pension clients. Plaintiff alleges
breach of fiduciary duty and other claims principally in connection with
PPF's 1995 purchase and subsequent foreclosure of the loan which financed
the partnership's property. Plaintiff seeks compensatory and punitive
damages. The case has been remanded to the Superior Court for further
proceedings. Although the outcome of litigation cannot be predicted with
certainty, the Company's management believes that the ultimate resolution
of this matter should not have a material adverse effect on the financial
position of the Company. The Company's management cannot make an estimate
of loss, if any, or predict whether or not this matter will have a material
adverse effect on the Company's results of operations in any particular
period.
Alliance Capital
----------------
In July 1995, a class action complaint was filed against Alliance North
American Government Income Trust, Inc. (the "Fund"), Alliance Holding and
certain other defendants affiliated with Alliance, including the Holding
Company, alleging violations of Federal securities laws, fraud and breach
of fiduciary duty in connection with the Fund's investments in Mexican and
Argentine securities. The original complaint was dismissed in 1996; on
appeal, the dismissal was affirmed. In October 1996, plaintiffs filed a
motion for leave to file an amended complaint, alleging the Fund failed to
hedge against currency risk despite representations that it would do so,
the Fund did not properly disclose that it planned to invest in
mortgage-backed derivative securities and two Fund advertisements
misrepresented the risks of investing in the Fund. In October 1998, the
U.S. Court of Appeals for the Second Circuit issued an order granting
plaintiffs' motion to file an amended complaint alleging that the Fund
misrepresented its ability to hedge against currency risk and denying
plaintiffs' motion to file an amended complaint containing the other
allegations. In December 1999, the United States District Court for the
Southern District of New York granted the defendants' motion for summary
judgment on all claims against all defendants. Later in December 1999, the
plaintiffs filed motions for reconsideration of the Court's ruling. These
motions are currently pending with the Court.
In connection with the Reorganization; Alliance assumed any liabilities
which Alliance Holding may have with respect to this action. Alliance and
Alliance Holding believe that the allegations in the amended complaint are
without merit and intend to vigorously defend against these claims. While
the ultimate outcome of this matter cannot be determined at this time,
management of Alliance Holding and Alliance do not expect that it will have
a material adverse effect on Alliance Holding's or Alliance's results of
operations or financial condition.
DLJSC
-----
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") is a
defendant along with certain other parties in a class action complaint
involving the underwriting of units, consisting of notes and warrants to
purchase common shares, of Rickel Home Centers, Inc. ("Rickel"), which
filed a voluntary petition for reorganization pursuant to Chapter 11 of the
Bankruptcy Code. The complaint seeks unspecified compensatory and punitive
damages from DLJSC, as an underwriter and as an owner of 7.3% of the common
stock, for alleged violation of Federal securities laws and common law
fraud for alleged misstatements and omissions contained in the prospectus
and registration statement used in the offering of the units. In April
1999, the complaint against DLJSC and the other defendants was dismissed.
The plaintiffs have appealed. DLJSC intends to defend itself vigorously
against all the allegations contained in the complaint.
DLJSC is a defendant in a purported class action filed in a Texas State
Court on behalf of the holders of $550 million principal amount of
subordinated redeemable discount debentures of National Gypsum Corporation
("NGC"). The debentures were canceled in connection with a Chapter 11 plan
of reorganization for NGC consummated in July 1993. The litigation seeks
compensatory and punitive damages for DLJSC's activities as financial
advisor to NGC in the course of NGC's Chapter 11 proceedings. In March
1999, the Court granted motions for summary judgment filed by DLJSC and the
other defendants. The plaintiffs have appealed. DLJSC intends to defend
itself vigorously against all the allegations contained in the complaint.
In November 1998, three purported class actions were filed in the U.S.
District Court for the Southern District of New York against more than 25
underwriters of initial public offering securities, including DLJSC. The
complaints allege that defendants conspired to fix the "fee" paid for
underwriting initial public offering securities by setting the
underwriters' discount or "spread" at 7%, in violation of the Federal
antitrust laws. The complaints seek treble damages in an unspecified amount
and injunctive relief as well as attorneys' fees and costs. In March 1999,
the plaintiffs filed a consolidated amended complaint. A motion by all
defendants
F-33
<PAGE>
to dismiss the complaints on several grounds is pending. Separately, the
U.S. Department of Justice has issued a Civil Investigative Demand to
several investment banking firms, including DLJSC, seeking documents and
information relating to "alleged" price-fixing with respect to underwriting
spreads in initial public offerings. The Justice Department has not made
any charges against DLJSC or the other investment banking firms. DLJSC is
cooperating with the Justice Department in providing the requested
information and believes that no violation of law by DLJSC has occurred.
Although there can be no assurance, DLJ's management does not believe that
the ultimate resolution of the litigations described above to which DLJSC
is a party will have a material adverse effect on DLJ's consolidated
financial condition. Based upon the information currently available to it,
DLJ's management cannot predict whether or not such litigations will have a
material adverse effect on DLJ's results of operations in any particular
period.
Other Matters
In addition to the matters described above, the Holding Company and its
subsidiaries are involved in various legal actions and proceedings in
connection with their businesses. Some of the actions and proceedings have
been brought on behalf of various alleged classes of claimants and certain
of these claimants seek damages of unspecified amounts. While the ultimate
outcome of such matters cannot be predicted with certainty, in the opinion
of management no such matter is likely to have a material adverse effect on
the Company's consolidated financial position or results of operations.
16) LEASES
The Company has entered into operating leases for office space and certain
other assets, principally information technology equipment and office
furniture and equipment. Future minimum payments under noncancelable leases
for 2000 and the four successive years are $111.2 million, $93.3 million,
$78.3 million, $71.9 million, $66.5 million and $523.7 million thereafter.
Minimum future sublease rental income on these noncancelable leases for
2000 and the four successive years is $5.2 million, $4.1 million, $2.8
million, $2.8 million, $2.8 million and $23.8 million thereafter.
At December 31, 1999, the minimum future rental income on noncancelable
operating leases for wholly owned investments in real estate for 2000 and
the four successive years is $120.7 million, $113.5 million, $96.0 million,
$79.7 million, $74.1 million and $354.6 million thereafter.
17) OTHER OPERATING COSTS AND EXPENSES
Other operating costs and expenses consisted of the following:
<TABLE>
<CAPTION>
1999 1998 1997
------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C>
Compensation costs................................. $ 1,010.6 $ 772.0 $ 721.5
Commissions........................................ 549.5 478.1 409.6
Short-term debt interest expense................... 16.7 26.1 31.7
Long-term debt interest expense.................... 76.3 84.6 121.2
Amortization of policy acquisition costs........... 314.5 292.7 287.3
Capitalization of policy acquisition costs......... (709.9) (609.1) (508.0)
Writedown of policy acquisition costs.............. 131.7 - -
Rent expense, net of sublease income............... 113.9 100.0 101.8
Cursitor intangible assets writedown............... - - 120.9
Other.............................................. 1,294.0 1,056.8 917.9
------------- ------------ ------------
Total.............................................. $ 2,797.3 $ 2,201.2 $ 2,203.9
================= ================ =================
</TABLE>
F-34
<PAGE>
During 1997, the Company restructured certain operations in connection with
cost reduction programs and recorded a pre-tax provision of $42.4 million.
The amount paid during 1999 associated with cost reduction programs totaled
$15.6 million. At December 31, 1999, the remaining liabilities associated
with cost reduction programs was $8.8 million. The 1997 cost reduction
program included costs related to employee termination and exit costs.
18) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION
Equitable Life is restricted as to the amounts it may pay as shareholder
dividends. Under the New York Insurance Law, the Superintendent has broad
discretion to determine whether the financial condition of a stock life
insurance company would support the payment of dividends to its
shareholders. For 1999, 1998 and 1997, statutory net income (loss) totaled
$547.0 million, $384.4 million and ($351.7) million, respectively.
Statutory surplus, capital stock and Asset Valuation Reserve ("AVR")
totaled $5,570.6 million and $4,728.0 million at December 31, 1999 and
1998, respectively. In September 1999, $150.0 million in dividends were
paid to the Holding Company by Equitable Life, the first such payment since
Equitable Life's demutualization in 1992.
At December 31, 1999, the Insurance Group, in accordance with various
government and state regulations, had $26.8 million of securities deposited
with such government or state agencies.
The differences between statutory surplus and capital stock determined in
accordance with Statutory Accounting Principles ("SAP") and total
shareholder's equity under GAAP are primarily: (a) the inclusion in SAP of
an AVR intended to stabilize surplus from fluctuations in the value of the
investment portfolio; (b) future policy benefits and policyholders' account
balances under SAP differ from GAAP due to differences between actuarial
assumptions and reserving methodologies; (c) certain policy acquisition
costs are expensed under SAP but deferred under GAAP and amortized over
future periods to achieve a matching of revenues and expenses; (d) external
and certain internal costs incurred to obtain or develop internal use
computer software during the application development stage is capitalized
under GAAP but expensed under SAP; (e) Federal income taxes are generally
accrued under SAP based upon revenues and expenses in the Federal income
tax return while under GAAP deferred taxes provide for timing differences
between recognition of revenues and expenses for financial reporting and
income tax purposes; (f) the valuation of assets under SAP and GAAP differ
due to different investment valuation and depreciation methodologies, as
well as the deferral of interest-related realized capital gains and losses
on fixed income investments; and (g) differences in the accrual
methodologies for post-employment and retirement benefit plans.
F-35
<PAGE>
19) BUSINESS SEGMENT INFORMATION
The Company's operations consist of Insurance and Investment Services. The
Company's management evaluates the performance of each of these segments
independently and allocates resources based on current and future
requirements of each segment. Management evaluates the performance of each
segment based upon operating results adjusted to exclude the effect of
unusual or non-recurring events and transactions and certain revenue and
expense categories not related to the base operations of the particular
business net of minority interest. Information for all periods is presented
on a comparable basis.
Intersegment investment advisory and other fees of approximately $75.6
million, $61.8 million and $84.1 million for 1999, 1998 and 1997,
respectively, are included in total revenues of the Investment Services
segment. These fees, excluding amounts related to discontinued operations
of $.5 million, $.5 million and $4.2 million for 1999, 1998 and 1997,
respectively, are eliminated in consolidation.
The following tables reconcile each segment's revenues and operating
earnings to total revenues and earnings from continuing operations before
Federal income taxes and cumulative effect of accounting change as reported
on the consolidated statements of earnings and the segments' assets to
total assets on the consolidated balance sheets, respectively.
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Segment revenues..................... $ 4,283.0 $ 2,052.7 $ (23.8) $ 6,311.9
Investment (losses) gains............ (199.4) 111.5 - (87.9)
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,083.6 $ 2,164.2 $ (23.8) $ 6,224.0
============= ============ ============ ============
Pre-tax operating earnings........... $ 895.7 $ 427.0 $ - $ 1,322.7
Investment (losses) gains , net of
DAC and other charges.............. (208.4) 110.5 - (97.9)
Non-recurring DAC adjustments........ (131.7) - - (131.7)
Pre-tax minority interest............ - 216.8 - 216.8
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 555.6 $ 754.3 $ - $ 1,309.9
============= ============ ============ ============
Total Assets......................... $ 86,842.7 $ 12,961.7 $ (8.9) $ 99,795.5
============= ============ ============ ============
1998
----
Segment revenues..................... $ 4,029.8 $ 1,438.4 $ (5.7) $ 5,462.5
Investment gains..................... 64.8 35.4 - 100.2
------------- ------------ ------------ ------------
Total Revenues....................... $ 4,094.6 $ 1,473.8 $ (5.7) $ 5,562.7
============= ============ ============ ============
Pre-tax operating earnings........... $ 688.6 $ 284.3 $ - $ 972.9
Investment gains, net of
DAC and other charges.............. 41.7 27.7 - 69.4
Pre-tax minority interest............ - 141.5 - 141.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... 730.3 453.5 - 1,183.8
============= ============ ============ ============
Total Assets......................... $ 75,626.0 $ 12,379.2 $ (64.4) $ 87,940.8
============= ============ ============ ============
</TABLE>
F-36
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT
INSURANCE SERVICES ELIMINATION TOTAL
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
1997
----
Segment revenues..................... $ 3,990.8 $ 1,200.0 $ (7.7) $ 5,183.1
Investment (losses) gains............ (318.8) 255.1 - (63.7)
------------- ------------ ------------ ------------
Total Revenues....................... $ 3,672.0 $ 1,455.1 $ (7.7) $ 5,119.4
============= ============ ============ ============
Pre-tax operating earnings........... $ 507.0 $ 258.3 $ - $ 765.3
Investment (losses) gains, net of
DAC and other charges.............. (292.5) 252.7 - (39.8)
Non-recurring costs and expenses..... (41.7) (121.6) - (163.3)
Pre-tax minority interest............ - 108.5 - 108.5
------------- ------------ ------------ ------------
Earnings from Continuing
Operations......................... $ 172.8 $ 497.9 $ - $ 670.7
============= ============ ============ ============
Total Assets......................... $ 67,762.4 $ 13,691.4 $ (96.1) $ 81,357.7
============= ============ ============ ============
</TABLE>
20) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The quarterly results of operations for 1999 and 1998 are summarized below:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------- ------------- ------------ ------------
(IN MILLIONS)
<S> <C> <C> <C> <C>
1999
----
Total Revenues................ $ 1,484.3 $ 1,620.3 $ 1,512.1 $ 1,607.3
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 187.3 $ 222.6 $ 186.5 $ 182.1
============= ============= ============ ============
Net Earnings.................. $ 182.0 $ 221.3 $ 183.1 $ 220.2
============= ============= ============ ============
1998
----
Total Revenues................ $ 1,470.2 $ 1,422.9 $ 1,297.6 $ 1,372.0
============= ============= ============ ============
Earnings from Continuing
Operations.................. $ 212.8 $ 197.0 $ 136.8 $ 158.9
============= ============= ============ ============
Net Earnings.................. $ 213.3 $ 198.3 $ 137.5 $ 159.1
============= ============= ============ ============
</TABLE>
F-37
<PAGE>
21) INVESTMENT IN DLJ
At December 31, 1999, the Company's ownership of DLJ interest was
approximately 31.71%. The Company's ownership interest in DLJ will continue
to be reduced upon the exercise of options granted to certain DLJ employees
and the vesting of forfeitable restricted stock units acquired by DLJ
employees. DLJ restricted stock units represent forfeitable rights to
receive approximately 5.2 million shares of DLJ common stock through
February 2000.
The results of operations of DLJ are accounted for on the equity basis and
are included in commissions, fees and other income in the consolidated
statements of earnings. The Company's carrying value of DLJ is included in
investment in and loans to affiliates in the consolidated balance sheets.
Summarized balance sheets information for DLJ, reconciled to the Company's
carrying value of DLJ, are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------
1999 1998
------------ ------------
(IN MILLIONS)
<S> <C> <C>
Assets:
Trading account securities, at market value............................ $ 27,982.4 $ 13,195.1
Securities purchased under resale agreements........................... 29,538.1 20,063.3
Broker-dealer related receivables...................................... 44,998.1 34,264.5
Other assets........................................................... 6,493.5 4,759.3
------------ ------------
Total Assets........................................................... $ 109,012.1 $ 72,282.2
============ ============
Liabilities:
Securities sold under repurchase agreements............................ $ 56,474.4 $ 35,775.6
Broker-dealer related payables......................................... 37,207.4 26,161.5
Short-term and long-term debt.......................................... 6,518.6 3,997.6
Other liabilities...................................................... 4,704.5 3,219.8
------------ ------------
Total liabilities...................................................... 104,904.9 69,154.5
DLJ's company-obligated mandatorily redeemed preferred
securities of subsidiary trust holding solely debentures of DLJ...... 200.0 200.0
Total shareholders' equity............................................. 3,907.2 2,927.7
------------ ------------
Total Liabilities, Cumulative Exchangeable Preferred Stock and
Shareholders' Equity................................................. $ 109,012.1 $ 72,282.2
============ ============
DLJ's equity as reported............................................... $ 3,907.2 $ 2,927.7
Unamortized cost in excess of net assets acquired in 1985
and other adjustments................................................ 22.9 23.7
The Holding Company's equity ownership in DLJ.......................... (1,341.4) (1,002.4)
Minority interest in DLJ............................................... (1,479.3) (1,118.2)
------------ ------------
The Company's Carrying Value of DLJ.................................... $ 1,109.4 $ 830.8
============ ============
</TABLE>
F-38
<PAGE>
Summarized statements of earnings information for DLJ reconciled to the
Company's equity in earnings of DLJ is as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ -------------
(IN MILLIONS)
<S> <C> <C> <C>
Commission, fees and other income..................... $ 4,145.1 $ 3,150.5 $ 2,430.7
Net investment income................................. 2,175.3 2,189.1 1,652.1
Principal Transactions, net........................... 825.9 67.4 557.7
------------ ------------ -------------
Total revenues........................................ 7,146.3 5,407.0 4,640.5
Total expenses including income taxes................. 6,545.6 5,036.2 4,232.2
------------ ------------ -------------
Net earnings.......................................... 600.7 370.8 408.3
Dividends on preferred stock.......................... 21.2 21.3 12.2
------------ ------------ -------------
Earnings Applicable to Common Shares.................. $ 579.5 $ 349.5 $ 396.1
============ ============ =============
DLJ's earnings applicable to common shares as
reported............................................ $ 579.5 $ 349.5 $ 396.1
Amortization of cost in excess of net assets
acquired in 1985.................................... (.9) (.8) (1.3)
The Holding Company's equity in DLJ's earnings........ (222.7) (136.8) (156.8)
Minority interest in DLJ.............................. (172.9) (99.5) (109.1)
------------ ------------ -------------
The Company's Equity in DLJ's Earnings................ $ 183.0 $ 112.4 $ 128.9
============ ============ =============
</TABLE>
22) ACCOUNTING FOR STOCK-BASED COMPENSATION
The Holding Company sponsors a stock incentive plan for employees of
Equitable Life. DLJ and Alliance each sponsor their own stock option plans
for certain employees. The Company has elected to continue to account for
stock-based compensation using the intrinsic value method prescribed in APB
No. 25. Had compensation expense for the Holding Company, DLJ and Alliance
Stock Option Incentive Plan options been determined based on SFAS No. 123's
fair value based method, the Company's pro forma net earnings for 1999,
1998 and 1997 would have been $757.1 million, $678.4 million and $426.3
million, respectively.
The fair values of options granted after December 31, 1994, used as a basis
for the pro forma disclosures above, were estimated as of the grant dates
using the Black-Scholes option pricing model. The option pricing
assumptions for 1999, 1998 and 1997 follow:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
------------------------------ ------------------------------- ----------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
--------- ---------- --------- ---------- --------- ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend yield...... 0.31% 0.32% 0.48% 0.56% 0.69% 0.86% 8.70% 6.50% 8.00%
Expected volatility. 28% 28% 20% 36% 40% 33% 29% 29% 26%
Risk-free interest
rate.............. 5.46% 5.48% 5.99% 5.06% 5.53% 5.96% 5.70% 4.40% 5.70%
Expected life
in years.......... 5 5 5 5 5 5 7 7.2 7.2
Weighted average
fair value per
option at
grant-date........ $10.78 $11.32 $6.13 $17.19 $16.27 $10.81 $3.88 $3.86 $2.18
</TABLE>
F-39
<PAGE>
A summary of the Holding Company, DLJ and Alliance's option plans follows:
<TABLE>
<CAPTION>
HOLDING COMPANY DLJ ALLIANCE
----------------------------- ----------------------------- -----------------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Price of Price of Price of
Shares Options Shares Options Units Options
(In Millions) Outstanding (In Millions) Outstanding (In Millions) Outstanding
--------------- ------------- --------------- ------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of
January 1, 1997........ 13.4 $10.40 22.2 $14.03 10.0 $ 9.54
Granted................ 6.4 $20.93 6.4 $30.54 2.2 $18.28
Exercised.............. (3.2) $10.13 (.2) $16.01 (1.2) $ 8.06
Forfeited.............. (.8) $11.72 (.2) $13.79 (.4) $10.64
--------------- ------------- ---------------
Balance as of
December 31, 1997...... 15.8 $14.53 28.2 $17.78 10.6 $11.41
Granted................ 8.6 $33.13 1.5 $38.59 2.8 $26.28
Exercised.............. (2.2) $10.59 (1.4) $14.91 (.9) $ 8.91
Forfeited.............. (.8) $23.51 (.1) $17.31 (.2) $13.14
--------------- ------------- ---------------
Balance as of
December 31, 1998...... 21.4 $22.00 28.2 $19.04 12.3 $14.92
Granted................ 4.3 $31.70 4.8 $45.23 2.0 $30.18
Exercised.............. (2.4) $13.26 (2.2) $34.61 (1.5) $ 9.51
Forfeited.............. (.6) $24.29 (.1) $15.85 (.3) $17.79
--------------- ------------- ---------------
Balance as of
December 31, 1999...... 22.7 $24.60 30.7 $23.30 12.5 $17.95
=============== ============= ===============
</TABLE>
F-40
<PAGE>
Information about options outstanding and exercisable at December 31, 1999
follows:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------------------- -------------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices (In Millions) Life (Years) Price (In Millions) Price
- -------------------- ------------------ ---------------- --------------- ------------------ ----------------
Holding
Company
- --------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9.06 -$13.88 5.6 4.2 $10.50 10.9 $18.98
$14.25 -$22.63 5.2 7.7 $20.95 - -
$25.32 -$34.59 8.2 8.7 $29.08 - -
$40.97 -$41.28 3.7 8.6 $41.28 - -
----------------- ------------------
$ 9.06 -$41.28 22.7 7.3 $24.60 10.9 $18.98
================= ================ =============== ================== ================
DLJ
- --------------------
$13.50 -$25.99 20.2 8.4 $14.61 20.6 $16.62
$26.00 -$38.99 4.9 7.8 $33.99 - -
$39.00 -$52.875 4.8 9.0 $43.28 - -
$53.00 -$76.875 .8 9.7 $57.09 - -
----------------- ------------------
$13.50 -$76.875 30.7 8.4 $23.30 20.6 $16.62
================= ================ =============== ================== ================
Alliance
- --------------------
$ 3.66 -$ 9.81 2.6 3.8 $ 8.31 2.2 $ 8.12
$ 9.88 -$12.56 3.3 5.6 $11.16 2.6 $10.92
$13.75 -$18.47 1.8 7.9 $18.34 .7 $18.34
$18.78 -$26.31 2.8 8.9 $26.16 .6 $26.06
$27.31 -$30.94 2.0 9.9 $30.24 - -
----------------- ------------------
$ 3.66 -$30.94 12.5 7.0 $17.95 6.1 $12.12
================= ================ =============== ================== ================
</TABLE>
F-41
<PAGE>
Appendix I: Our data on market performance
In reports or other communications to policyowners or in advertising
material, we may describe general economic and market conditions affecting our
variable investment options and the Portfolios and may compare the performance
or ranking of those options and the Portfolios with:
o those of other insurance company separate accounts or mutual funds included in
the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc. or
similar investment services that monitor the performance of insurance company
separate accounts or mutual funds;
o other appropriate indices of investment securities and averages for peer
universes of mutual funds; or
o data developed by us derived from such indices or averages.
We also may furnish to present or prospective policyowners
advertisements or other communications that include evaluations of a variable
investment option or Portfolio by nationally recognized financial publications.
Examples of such publications are:
Barron's
Morningstar's Variable Annuities/Life
Business Week
Forbes
Fortune
Institutional Investor
Money
Kiplinger's Personal Finance
Financial Planning
Investment Adviser
Investment Management Weekly
Money Management Letter
Investment Dealers Digest
National Underwriter
Pension & Investments
USA Today
Investor's Daily
The New York Times
The Wall Street Journal
The Los Angeles Times
The Chicago Tribune
121315v6
61
<PAGE>
Lipper Analytical Services, Inc. (Lipper) compiles performance data
for peer universes of Portfolios with similar investment objectives in its
Lipper Variable Insurance Products Performance Analysis Service (Lipper Survey).
Morningstar, Inc. compiles similar data in the Morningstar Variable Annuity/Life
Report (Morningstar Report).
The Lipper Survey records performance data as reported to it by over
800 mutual funds underlying variable annuity and life insurance products. It
divides these actively managed portfolios into 25 categories by portfolio
objectives. The Lipper Survey contains two different universes, which reflect
different types of fees in performance data:
o The "Separate Account" universe reports performance data net of
investment management fees, direct operating expenses and asset-based charges
applicable under variable insurance and annuity contracts; and
o The "Mutual Fund" universe reports performance net only of
investment management fees and direct operating expenses, and therefore reflects
only charges that relate to the underlying mutual fund.
The Morningstar Report consists of nearly 700 variable life and
annuity portfolios, all of which report their data net of investment management
fees, direct operating expenses and separate account level charges.
LONG-TERM MARKET TRENDS
The following chart presents historical return trends for various
types of securities. The information presented does not directly relate to the
performance of our variable investment options or the Trust. Nevertheless, it
may help you gain a perspective on the potential returns of different asset
classes over different periods of time. By combining this information with your
knowledge of your own financial needs, you may be able to better determine how
you wish to allocate your Accumulator Life premium(s).
Historically, the investment performance of common stocks over the
long term has generally been superior to that of long- or short-term debt
securities. However, common stocks have also experienced dramatic changes in
value over short periods of time. One of our variable investment options that
invests primarily in common stocks may, therefore, be a desirable selection for
owners who are willing to accept such risks. If, on the other hand, you wish to
limit your short-term risk, you may find it preferable to allocate a smaller
percentage of net premiums to those options that invest primarily in common
stock. All investments in securities, whether equity or debt, involve varying
degrees of risk. They also offer varying degrees of potential reward.
The chart below illustrates the average annual compound rates of
return over selected time periods between December 31, 1926 and December 31,
1999 for the types of securities indicated in the chart. These rates of return
assume the reinvestment of dividends, capital gains and interest. The Consumer
Price Index is also shown as a
121315v6
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<PAGE>
measure of inflation for comparison purposes. The investment return information
presented is an historical record of unmanaged categories of securities. In
addition, the rates of return shown do not reflect either (1) investment
management fees and expenses, or (2) costs and charges associated with ownership
of a variable life insurance policy.
The rates of return illustrated do not represent returns of our
variable investment options or the Portfolios and do not constitute a
representation that the performance of those options or the Portfolios will
correspond to rates of return such as those illustrated in the chart.
<TABLE>
<CAPTION>
AVERAGE ANNUAL RATES OF RETURN
FOR THE FOLLOWING COMMON LONG-TERM LONG-TERM INTERMEDIATE- U.S. TREASURY CONSUMER
PERIODS ENDING STOCKS GOVERNMENT CORPORATE TERM GOV'T BILLS PRICE INDEX
DECEMBER 31, 1999 BONDS BONDS BONDS
<S> <C> <C> <C> <C> <C> <C>
1 YEAR 21.04% (8.96)% (7.45)% (1.77)% 4.68% 2.81%
3 YEARS 27.56% 6.04% 5.01% 5.47% 4.93% 2.04%
5 YEARS 28.55% 9.24% 8.35% 6.95% 5.12% 2.39%
10 YEARS 18.20% 8.79% 8.36% 7.20% 4.92% 2.94%
20 YEARS 17.87% 10.69% 10.66% 9.53% 6.89% 4.01%
30 YEARS 13.72% 8.94% 9.17% 8.68% 6.69% 5.12%
40 YEARS 12.22% 7.01% 7.24% 7.35% 5.98% 4.46%
50 YEARS 13.61% 5.56% 5.97% 6.12% 5.15% 4.01%
60 YEARS 12.86% 5.17% 5.42% 5.39% 4.34% 4.24%
SINCE 1926 11.35% 5.12% 5.61% 5.22% 3.79% 3.07%
INFLATION ADJUSTED SINCE 1926 8.03% 1.98% 2.46% 2.08% 0.69% 0.00%
</TABLE>
Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND
INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 2000
YEARBOOK (Trademark), Ibbotson Associates, Inc., Chicago. All rights reserved.
Common Stocks (S&P 500) -- Standard and Poor's Composite Index, an unmanaged
weighted index of the stock performance of 500 industrial, transportation,
utility and financial companies.
Long-Term Government Bonds -- Measured using a one-bond portfolio constructed
each year containing a bond with approximately a twenty-year maturity and a
reasonably current coupon.
Long-Term Corporate Bonds -- For the period 1969-1999, represented by the
Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period
1946-1968, the Salomon Brothers' Index was backdated using Salomon Brothers'
monthly yield data and a methodology similar to that used by Salomon for
1969-1999; for the period 1926-1945, the Standard and Poor's monthly High-Grade
Corporate Composite yield data were used, assuming a 4 percent coupon and a
twenty-year maturity.
121315v6
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<PAGE>
Intermediate-Term Government Bonds -- Measured by a one-bond portfolio
constructed each year containing a bond with approximately a five-year maturity.
U.S. Treasury Bills -- Measured by rolling over each month a one-bill portfolio
containing, at the beginning of each month, the bill having the shortest
maturity not less than one month.
Consumer Price Index -- Measured by the Consumer Price Index for all Urban
Consumers (CPI-U), not seasonally adjusted.
121315v6
64
<PAGE>
Appendix II: An index of key words and phrases
This index should help you locate more information on the terms used
in this prospectus.
PAGE
account value
Accumulator Life
Administrative Office
age
Allocation Date
amount at risk
anniversary
assign; assignment
automatic transfer service
AXA Financial, Inc.
basis
beneficiary
business day
cash surrender value
Code
collateral
cost of insurance charge
cost of insurance rates
day
default
dollar cost averaging service
EQ Advisors Trust
Equitable Distributors
Equitable Life
Equitable Access Account
grace period
guaranteed minimum death benefit
insured person
Investment Funds
issue date
lapse
loan, loan interest
modified endowment contract
month, year
monthly deduction
net cash surrender value
our
owner
partial withdrawal
121315v6
65
<PAGE>
payment option
policy
Portfolio
premium payment
prospectus
rebalancing
receive
restore, restoration
SEC
Separate Account FP
state
subaccount
surrender
surrender charge
telephone transfer
transfers
Trust
units
unit values
us
variable investment option
we
you, your
121315v6
66
<PAGE>
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES -- SUPPLEMENT DATED
______, 2000, TO PROSPECTUSES FOR:
ACCUMULATOR LIFE INCENTIVE LIFE PLUS(R)
INCENTIVE LIFE SURVIVORSHIP 2000
SURVIVORSHIP INCENTIVE LIFE SPECIAL OFFER POLICY
IL PROTECTOR INCENTIVE LIFE 2000
IL COLI CHAMPION 2000
- -------------------------------------------------------------------------------
This supplement modifies certain information in the above-referenced
prospectuses, as supplemented to date (together, the "Prospectuses"), by adding
information about five new variable investment options. Unless otherwise
indicated, all other information included in the Prospectuses remains unchanged.
The terms and section headings we use in this supplement have the same meaning
as in the Prospectuses.
1. We anticipate making available the variable investment options described
below on or about October 6, 2000, subject to regulatory approval.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
VARIABLE INVESTMENT MANAGEMENT 12B-1 OTHER TOTAL
INVESTMENT ADVISOR (1) FEE FEE EXPENSES(2) ANNUAL
OPTION EXPENSES (3)
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Large Cap The Equitable 1.00% 0.25% 0.05% 1.30%
Growth Life Assurance
Society of the
United States
------------------------------------------------------------------------------------
EQ/Fidelity Fidelity 0.70% 0.25% 0.05% 1.00%
Mid Cap Management &
Research
Company
------------------------------------------------------------------------------------
EQ/AXP New American 0.65% 0.25% 0.05% 0.95%
Dimensions Express
Financial
Corporation
------------------------------------------------------------------------------------
EQ/AXP American 0.70% 0.25% 0.05% 1.00%
Strategy Express
Aggressive Financial
Corporation
------------------------------------------------------------------------------------
</TABLE>
(1) The investment results you achieve in any one of these variable investment
options will depend on the investment performance of the corresponding
Portfolio of the EQ Advisors Trust that shares the same name as that
option. The advisor shown is the advisor who makes the investment decisions
for the Portfolio.
(2) Initial seed capital will be invested for each of these Portfolios on or
about September 1, 2000; therefore, the Other Expenses shown are estimated.
(3) Equitable Life, EQ Advisors Trust's manager, has entered into an Expense
Limitation Agreement with respect to these Portfolios that will begin on or
about September 1, 2000 and end on August 30, 2001. Under this agreement,
Equitable Life has agreed to waive or limit its fees and assume other
expenses of each of these Portfolios, if necessary, in an amount that
limits each Portfolio's Total Annual Expenses (exclusive of interest,
taxes, brokerage commissions, capitalized expenditures and extraordinary
expenses) to not more than the amounts specified above under Total Annual
Expenses. Each of these Portfolios will commence operations on or about
September 1, 2000 and we have estimated that their actual Total Annual
Expenses will not exceed their respective Expense Limitations.
<PAGE>
Part II
REPRESENTATION REGARDING REASONABLENESS OF
AGGREGATE POLICY FEES AND CHARGES
Equitable represents that the fees and charges deducted under the Policies
described in this Registration Statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses to be incurred, and the risks
assumed by Equitable under the Policies. Equitable bases its representation on
its assessment of all of the facts and circumstances, including such relevant
factors as: the nature and extent of such services, expenses and risks, the need
for Equitable to earn a profit, the degree to which the Policies include
innovative features, and regulatory standards for the grant of exemptive relief
under the Investment Company Act of 1940 used prior to October 1996, including
the range of industry practice. This representation applies to all policies sold
pursuant to this Registration Statement, including those sold on the terms
specifically described in the prospectus contained herein, or any variation
therein, based on supplements, data pages or riders to any policies or
prospectuses or otherwise.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(a) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
the authority conferred in that section.
UNDERTAKING PURSUANT TO RULE 484(b) (1)
UNDER THE SECURITIES ACT OF 1933
Equitable Life Assurance Society of the United States' By-Laws provide,
in Article VII, as follows:
7.4 Indemnification of Directors, Officers and Employees. (a) To the
extent permitted by the law of the State of New York and subject
to all applicable requirements thereof:
(i) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that
he, his testator or intestate, is or was a director, officer
employee or incorporator of the Company shall be indemnified by
the Company:
(ii) any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that
he, his testator or intestate serves or served any other
organization in any capacity at the request of the Company may be
indemnified by the Company; and
(iii) The related expenses of any such person in any of said categories
may be advanced by the Company.
(b) To the extent permitted by the law of the State of New York, the
Company may provide for further indemnification or advancement of
expenses by resolution of shareholders of the Company or the Board
of Directors by amendment of these By-Laws or by agreement.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, 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 or 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 person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Reconciliation and Tie.
The Prospectus for Accumulator Life (retail channel) dated May 12, 2000
consisting of 160 pages.
The Prospectus for Accumulator Life (wholesale channel) dated May 12, 2000
consisting of 133 pages.
The Prospectus Supplement consisting of 1 page.
Representation regarding reasonableness of aggregate policy fees and charges.
Undertaking to file reports.
Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933.
The signatures.
Written Consents of the following persons:
Robin M. Wagner, Esq.,
Vice President and Counsel of Equitable
(see Exhibit 2(a)(i)).
Barbara Fraser, F.S.A., M.A.A.A.,
Vice President and Senior Actuary of Equitable (see Exhibit 2(b)(i)).
Independent Public Accountants (see Exhibit 6).
The following exhibits: Exhibits required by Article IX, paragraph A of Form
N-8B-2:
1-A(1)(a)(i) Certified resolutions re Authority to Market Variable
Life Insurance and Establish Separate Accounts,
incorporated herein by reference to Exhibit No.
1-A(1)(a)(i) to Registration Statement (File No.
333-17637), filed on December 11, 1996.
1-A(2) Inapplicable.
1-A(3)(a) See Exhibit 1-A(8).
1-A(3)(b) Broker-Dealer and General Agent Sales Agreement,
incorporated herein by reference to Exhibit No.
1-A(3)(b) to Registration Statement (File No.
333-17637), filed on December 11, 1996.
1-A(3)(c) See Exhibit 1-A(8)(i).
1-A(4) Inapplicable.
1-A(5)(a) Specimen of Equitable's Modified Single Premium
Variable Life Insurance Policy (Accumulator Life),
Form No. 99-100.
1-A(5)(b) Guaranteed Minimum Death Benefit Endorsement
(S.99-50).
1-A(6)(a) Declaration and Charter of Equitable, as amended,
incorporated herein by reference to Exhibit No.
1-A(6)(a) to Registration Statement (File No.
333-17637), filed on December 11, 1996.
1-A(6)(b) By-Laws of Equitable, as amended, incorporated herein
by reference to Exhibit No. 1-A(6)(b) to Registration
Statement (File No. 333-17637), filed on December 11,
1996.
1-A(7) Inapplicable.
1-A(8) Distribution and Servicing Agreement among EQ
Financial Consultants, Inc. (now AXA Advisors, LLC),
Equitable and Equitable Variable dated as of May 1,
1994, incorporated herein by reference to Exhibit
No. 1-A(8) to Registration Statement (File No.
333-17637), filed on December 11, 1996.
1-A(8)(i) The information concerning commissions included in
the prospectus forming part of this registration
statement under "How we market the policies" is
incorporated herein by reference.
II-1
<PAGE>
1-A(10)(a) Form of Application for Modified Single Premium
Variable Life Insurance Policy.
Other Exhibits:
2(a)(i) Opinion and Consent of Robin M. Wagner, Vice
President and Counsel of Equitable.
2(b)(i) Opinion and Consent of Barbara Fraser, F.S.A.,
M.A.A.A., Vice President and Senior Actuary of
Equitable.
3 Inapplicable.
4 Inapplicable.
6 Consent of Independent Public Accountant.
7(a) Powers of Attorney.
8 Description of Equitable's Issuance, Transfer and
Redemption Procedures for Policies pursuant to Rule
6e-3(T)(b)(12)(iii) under the Investment
Company Act of 1940, incorporated herein by reference
to Exhibit No. 8 to registration statement
(File No. 333-17637), filed on December 11, 1996.
9 Form of Illustration of Policy Benefits.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, in the City and State of New York, on the 10th
day of May, 2000.
SEPARATE ACCOUNT FP OF THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED
STATES. (REGISTRANT)
[SEAL]
By: THE EQUITABLE LIFE
ASSURANCE SOCIETY OF
THE UNITED STATES,
(DEPOSITOR)
By: /s/ Mildred M. Oliver
------------------------------
(Mildred M. Oliver)
Vice President
Attest: /s/ Linda Galasso
------------------------
(Linda Galasso)
Assistant Secretary
May 10, 2000
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Depositor
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City and State of
New York, on the 10th day of May, 2000.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
(DEPOSITOR)
By: /s/ Mildred M. Oliver
--------------------------------
(Mildred M. Oliver)
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
PRINCIPAL EXECUTIVE OFFICERS:
*Edward D. Miller Chairman of the Board and
Chief Executive Officer
*Michael Hegarty President and Chief Operating Officer
PRINCIPAL FINANCIAL OFFICER:
*Stanley B. Tulin Vice Chairman of the Board
and Chief Financial Officer
PRINCIPAL ACCOUNTING OFFICER:
*Alvin H. Fenichel Senior Vice President and Controller
*DIRECTORS:
Francoise Colloc'h Donald J. Greene George T. Lowy
Henri de Castries John T. Hartley Edward D. Miller
Joseph L. Dionne John H.F. Haskell, Jr. Didier Pineau-Valencienne
Denis Duverne Michael Hegarty George J. Sella, Jr.
Jean-Rene Fourtou Mary R. (Nina) Henderson Peter J. Tobin
Norman C. Francis W. Edwin Jarmain Stanley B. Tulin
Dave H. Williams
*By: /s/ Mildred M. Oliver
-----------------------
(Mildred M. Oliver)
Attorney-in-Fact
May 10, 2000
II-4
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT TAG
- ---------- ------------
<S> <C> <C>
1-A(5)(a) Specimen of Modified Single Premium Variable Life Insurance
Policy (policy form no. 99-100). EX-99.1A5a
1-A(5)(b) Guaranteed Minimum Death Benefit Endorsement (S.99-50). EX-99.1A5b
1-A(10)(a) Form of Application for Modified Single Premium Variable
Life Insurance Policy. EX-99.1A10a
2(a)(i) Opinion and Consent of Counsel. EX-99.2Ai
2(b)(i) Opinion and Consent of Barbara Fraser, F.S.A., M.A.A.A. EX-99.2Bi
6 Consent of Independent Accountants. EX-99.6
7(a) Powers of Attorney. EX-99.7a
9 Form of Illustration of Policy Benefits. EX-99.9
</TABLE>
7275H/21
INSURED PERSON RICHARD ROE
POLICY OWNER RICHARD ROE
INITIAL DEATH
BENEFIT $99,275.00
INITIAL PREMIUM $25,000.00
POLICY NUMBER XX XXX XXX
VARIABLE LIFE
INSURANCE
POLICY
WE AGREE to pay the Insurance Benefit of this policy to the beneficiary upon
receiving proof of the insured person's death while this policy is in force.
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY
This is a modified single premium variable life insurance policy. We put your
initial premium and any additional premium into your Policy Account. You may
allocate this to one or more investment funds of our Separate Account(s) (SA).
We make monthly deductions from your Policy Account and take daily charges from
your Separate Account assets to cover the cost of benefits provided by this
policy. You can transfer amounts among your investment options.
All of these rights and benefits are subject to the terms and conditions of this
policy.
THE AMOUNT AND DURATION OF THE DEATH BENEFIT ARE VARIABLE. SEE THE DEATH BENEFIT
PROVISION FOR A DESCRIPTION OF THE VARIABLE DEATH BENEFIT.
YOUR POLICY ACCOUNT WILL INCREASE OR DECREASE IN VALUE DEPENDING ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT INVESTMENT FUNDS IN WHICH YOUR
POLICY ACCOUNT IS INVESTED.
This is a non-participating policy.
RIGHT TO EXAMINE POLICY. YOU MAY EXAMINE THIS POLICY AND IF FOR ANY REASON YOU
ARE NOT SATISFIED WITH IT, YOU MAY CANCEL IT BY RETURNING THIS POLICY WITH A
WRITTEN REQUEST FOR CANCELLATION TO OUR ADMINISTRATIVE OFFICE BY THE 10TH DAY
AFTER YOU RECEIVE THE POLICY. IF YOU DO THIS, WE WILL REFUND THE PREMIUM THAT
WAS PAID, MINUS ANY POLICY LOAN AND ACCRUED LOAN INTEREST.
READ YOUR POLICY CAREFULLY. It is a legal contract between you and The Equitable
Life Assurance Society of the United States.
Pauline Sherman, Senior Vice President, Secretary
& Associate General Counsel
Michael Hegarty, President & Chief Operating Officer
No. 99-100
<PAGE>
CONTENTS
- --------
Policy Information 3
Table of Maximum Expense Charges 3
Table of Surrender Charges 3
Table of Maximum Monthly Cost of
Insurance Rates 4
Those Who Benefit from this Policy 5
The Insurance Benefit We Pay 5
Your Policy Account and How it Works 6
Your Investment Options 8
The Value of Your Policy Account 8
The Cash Surrender Value of this
Policy 9
How a Loan Can Be Made 10
Our Separate Account(s) (SA) 11
Our Report to You 12
How Benefits are Paid 12
Other Important Information 13
Table of Guaranteed Payments 15
IN THIS POLICY:
- ---------------
"We", "our" and "us" mean The Equitable Life Assurance Society of the United
States.
"You" and "your" mean the owner of this policy at the time an owner's right is
exercised.
"Financial professional" means the registered representative who sold you this
policy.
Unless otherwise stated, all references to interest in this policy are effective
annual rates of interest.
Attained age means age on the birthday nearest to the beginning of the current
policy year.
ADMINISTRATIVE OFFICE
- ---------------------
The address of our Administrative Office is shown on Page 3. You should send
correspondence to that office. Any payments should be sent to the address listed
on your billing notice.
A copy of the application for this policy is attached to the policy.
No. 99-100 Page 2
<PAGE>
POLICY INFORMATION
INSURED PERSON RICHARD ROE
POLICY OWNER RICHARD ROE
INITIAL
DEATH BENEFIT $99,275.00 SEPARATE ACCOUNT [FP]
INITIAL PREMIUM $25,000.00 ISSUE AGE 35
POLICY NUMBER XX XXX XXX SEX MALE
BENEFICIARY MARGARET H. ROE
REGISTER DATE FEBRUARY 1, 2000
DATE OF ISSUE FEBRUARY 1, 2000
THE INITIAL PREMIUM SHOWN ABOVE IS DUE ON OR BEFORE DELIVERY OF THE POLICY.
THE PERIOD FOR WHICH LIFE INSURANCE COVERAGE WILL CONTINUE IN FORCE DURING THE
LIFETIME OF THE INSURED PERSON WILL DEPEND ON: (1) THE INVESTMENT PERFORMANCE OF
THE INVESTMENT FUNDS OF OUR SA; (2) CHANGES IN THE MONTHLY DEDUCTIONS FROM THE
POLICY ACCOUNT; (3) PAYMENT OF ANY ADDITIONAL PREMIUM, IF PERMITTED; AND (4)
LOAN AND PARTIAL NET CASH SURRENDER VALUE WITHDRAWAL ACTIVITY.
[THE INITIAL GUARANTEED MINIMUM DEATH BENEFIT IS $25,000.00. SEE THE GUARANTEED
MINIMUM DEATH BENEFIT ENDORSEMENT FOR INFORMATION REGARDING GUARANTEES AS TO
PAYMENT OF THE POLICY DEATH BENEFIT.]
99-100-3 PAGE 3
(CONTINUED ON NEXT PAGE)
<PAGE>
POLICY INFORMATION CONTINUED - POLICY NUMBER XX XXX XXX
-------- TABLE OF MAXIMUM EXPENSE CHARGES ---------
DEDUCTIONS FROM YOUR POLICY ACCOUNT:
FOR ADMINISTRATION AND TAXES: WE DEDUCT A MONTHLY CHARGE AT AN ANNUAL
RATE NOT TO EXCEED .50% OF THE POLICY ACCOUNT.
DEDUCTIONS FROM SEPARATE ACCOUNT ASSETS:
FOR MORTALITY AND EXPENSE RISKS: WE DEDUCT A DAILY CHARGE AT AN ANNUAL
RATE NOT TO EXCEED 1.35% OF YOUR SEPARATE ACCOUNT ASSETS.
-------- TABLE OF SURRENDER CHARGES ---------
POLICY YEAR PERCENTAGE
----------- ----------
1 10
2 9.5
3 9
4 8.5
5 8
6 7
7 5
8 3
9 1
10 AND LATER 0
WE WILL DEDUCT A SURRENDER CHARGE FROM YOUR POLICY ACCOUNT IF THIS POLICY
TERMINATES WITHIN THE FIRST NINE POLICY YEARS FOR ANY REASON EXCEPT THE DEATH
OF THE INSURED. THE SURRENDER CHARGE DURING A POLICY YEAR EQUALS A PERCENTAGE,
AS SHOWN IN THE TABLE ABOVE, OF THE INITIAL PREMIUM PAID FOR THIS POLICY.
DURING EACH OF THE FIRST NINE POLICY YEARS, WE WILL ALSO DEDUCT A SURRENDER
CHARGE IF AN EXCESS PARTIAL WITHDRAWAL IS MADE DURING THAT POLICY YEAR. AN
EXCESS PARTIAL WITHDRAWAL EXISTS WHEN THE CUMULATIVE AMOUNT OF PARTIAL
WITHDRAWALS MADE DURING A POLICY YEAR EXCEEDS 15% OF THE POLICY ACCOUNT
VALUE, MINUS ANY POLICY LOAN AND ACCRUED LOAN INTEREST, AS OF THE END OF THE
PREVIOUS POLICY YEAR. SEE THE "PARTIAL WITHDRAWALS" PROVISION FOR MORE
INFORMATION ABOUT THIS CHARGE.
ADMINISTRATIVE OFFICE: EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
SPECIMEN LIFE INSURANCE CENTER
100 SPECIMEN STREET
CITY, STATE 10001
(800) 123-4567
99-100-3 PAGE 3 - CONTINUED
<PAGE>
POLICY INFORMATION CONTINUED--POLICY NUMBER XX XXX XXX
-------- TABLE OF MAXIMUM MONTHLY COST OF INSURANCE RATES ---------
PER $1,000 OF NET AMOUNT AT RISK (SEE "MONTHLY DEDUCTIONS" PROVISION)
INSURED INSURED INSURED
PERSON'S PERSON'S PERSON'S
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
- -------- ---- -------- ---- -------- ----
35 0.17583 55 0.87667 75 5.51250
36 0.18667 56 0.96000 76 6.07583
37 0.20000 57 1.04667 77 6.66500
38 0.21500 58 1.13917 78 7.27583
39 0.23250 59 1.23917 79 7.92333
40 0.25167 60 1.34917 80 8.63500
41 0.27417 61 1.47333 81 9.43000
42 0.29667 62 1.61333 82 10.33833
43 0.32250 63 1.77167 83 11.37333
44 0.34917 64 1.94833 84 12.51333
45 0.37917 65 2.14333 85 13.73750
46 0.41083 66 2.35083 86 15.02167
47 0.44417 67 2.57250 87 16.35583
48 0.47917 68 2.80833 88 17.73750
49 0.51833 69 3.06500 89 19.17167
50 0.56083 70 3.35333 90 20.67750
51 0.61000 71 3.68167 91 22.28667
52 0.66500 72 4.06000 92 24.06333
53 0.72833 73 4.49583 93 26.11917
54 0.80000 74 4.98333 94 28.81250
95 32.81750
96 39.64250
97 53.06583
98 83.33250
99 83.33250
100 AND 00.00000
OVER
99-100-4 PAGE 4
(CONTINUED ON NEXT PAGE)
<PAGE>
POLICY INFORMATION CONTINUED-POLICY NUMBER XX XXX XXX
-------- TABLE OF FACTORS USED FOR ---------
CALCULATING DEATH BENEFITS
AGE FACTOR AGE FACTOR
--- ------ --- ------
35 3.971 70 1.488
36 3.841 71 1.458
37 3.717 72 1.430
38 3.597 73 1.403
39 3.481 74 1.378
40 3.370 75 1.355
41 3.263 76 1.333
42 3.161 77 1.312
43 3.062 78 1.292
44 2.968 79 1.274
45 2.877 80 1.256
46 2.789 81 1.239
47 2.705 82 1.223
48 2.624 83 1.208
49 2.547 84 1.194
50 2.472 85 1.181
51 2.400 86 1.169
52 2.331 87 1.158
53 2.265 88 1.148
54 2.201 89 1.138
55 2.140 90 1.128
56 2.082 91 1.118
57 2.027 92 1.108
58 1.974 93 1.098
59 1.923 94 1.087
60 1.873 95 1.074
61 1.826 96 1.061
62 1.781 97 1.047
63 1.738 98 1.034
64 1.697 99 AND OVER 1.025
65 1.658
66 1.621
67 1.585
68 1.551
69 1.519
99-100-4 PAGE 4 - CONTINUED
<PAGE>
- --------------------------------------------------------------------------------
THOSE WHO BENEFIT FROM THIS POLICY
OWNER. The owner of this policy is the insured person unless otherwise stated
in the application, or later changed.
As the owner, you are entitled to exercise all the rights of this policy while
the insured person is living. To exercise a right, you do not need the consent
of anyone who has only a conditional or future ownership interest in this
policy.
BENEFICIARY. The beneficiary is as stated in the application, unless later
changed. The beneficiary is entitled to the Insurance Benefit of this policy.
One or more beneficiaries for the Insurance Benefit can be named in the
application. If more than one beneficiary is named, they can be classed as
primary or contingent. If two or more persons are named in a class, their shares
in the benefit can be stated. The stated shares in the Insurance Benefit will be
paid to any primary beneficiaries who survive the insured person. If no primary
beneficiaries survive, payment will be made to any surviving contingent
beneficiaries. Beneficiaries who survive in the same class will share the
Insurance Benefit equally, unless you have made another arrangement with us.
If there is no designated beneficiary living at the death of the insured person,
we will pay the Insurance Benefit to the insured person's surviving children
in equal shares. If none survive, we will pay the insured person's estate.
CHANGING THE OWNER OR BENEFICIARY. While the insured person is living, you may
change the owner or beneficiary by written notice in a form satisfactory to us.
You can get such a form from your financial professional or by writing to us at
our Administrative Office. The change will take effect on the date you sign the
notice; however, it will not apply to any payment we make or other action we
take before we receive the notice. If you change the beneficiary, any previous
arrangement you made as to a payment option for benefits is cancelled. You may
choose a payment option for the new beneficiary in accordance with the "How
Benefits Are Paid" section of this policy.
ASSIGNMENT. You may assign this policy, if we agree; however, we will not be
bound by an assignment unless we have received it in writing at our
Administrative Office. Your rights and those of any other person referred to in
this policy will be subject to the assignment. We assume no responsibility for
the validity of an assignment. An absolute assignment will be considered as a
change of ownership to the assignee.
- --------------------------------------------------------------------------------
THE INSURANCE BENEFIT WE PAY
We will pay the Insurance Benefit of this policy to the beneficiary when we
receive at our Administrative Office (1) proof that the insured person died
while the policy was in force; and (2) all other requirements we deem necessary.
The Insurance Benefit includes the following amounts, which we will determine as
of the date of the insured person's death:
o the benefit described in the Death Benefit provision;
o MINUS any policy loan and accrued loan interest;
o MINUS any overdue deductions from your Policy Account if the insured
person dies during a grace period.
We will add interest to the resulting amount in accordance with applicable law.
We will compute the interest at a rate we determine, but not less than the
greater of (a) the rate we are paying on the date of payment under the Deposit
Option provision, or (b) the rate required by any applicable law. Payment of the
Insurance Benefit may also be affected by other provisions of this policy; see
the "Other Important Information" section, where we specify our right to contest
the policy, the suicide exclusion, and what happens if age or sex has been
misstated.
DEATH BENEFIT. The initial death benefit on the Register Date is shown in the
Policy Information section. At any time thereafter, the death benefit of this
policy on the date of death of the insured person is equal to the amount in your
Policy Account on such date multiplied by the applicable factor. The factor
referred to is from the Table of Factors Used For Calculating Death Benefits,
shown in the Policy Information section, for the insured person's age (nearest
birthday) at the beginning of the policy year of determination.
A partial withdrawal of net cash surrender value will result in a reduction of
the death benefit; see the "Partial Withdrawals" provision for more information.
99-100-5 Page 5
<PAGE>
This policy is designed to satisfy the definition of life insurance for Federal
income tax purposes under Section 7702 of the Internal Revenue Code of 1986, as
amended (i.e., the "Code"). Accordingly, even if this policy states otherwise,
at no time will the death benefit under the policy be less than the Policy
Account value of the policy, divided by the net single premium per dollar of
insurance which would have to be paid at such time to fund such benefits
consistent with the definition of such terms in the Code. In addition, we may
take certain actions, described here and elsewhere in the policy, to meet the
definitions and limitations in the Code, based on our interpretation of the
Code. Please see "Policy Changes -- Applicable Tax Law" for more information.
- --------------------------------------------------------------------------------
YOUR POLICY ACCOUNT AND HOW IT WORKS
PREMIUM PAYMENT. The initial premium shown in the Policy Information section is
due on or before delivery of this policy. No insurance will take effect before
this premium is paid. We put this premium into your Policy Account as of the
date we receive it at our Administrative Office, but not earlier than the
Register Date of the Policy.
ADDITIONAL PREMIUM PAYMENT. You may make one additional premium payment for
this policy, subject to all of the following conditions:
o The additional payment may be made only during the period starting
on the tenth policy anniversary and ending 60 days thereafter; and
o You provide evidence of insurability satisfactory to us; and
o The amount of any additional premium that will be accepted by us may
not exceed that amount that will increase the death benefit as of the
tenth policy anniversary to the amount of the initial death benefit
shown in the Policy Information section.
We reserve the right not to accept any additional premium payment if this
would cause the policy to fail to qualify as life insurance under applicable
tax law, as interpreted by us.
We will put any additional premium payment approved by us into your Policy
Account as of the date we receive it at our Administrative Office, and will
allocate it to the investment funds of our SA in accordance with your most
recent allocation instructions on our records (unless you provide us with
different allocation instructions for the additional premium payment).
MONTHLY DEDUCTIONS. At the beginning of each policy month we make a deduction
from your Policy Account to cover monthly charges for expenses and insurance
coverage. The first deduction is made on the Register Date. No deduction is made
after age 100 of the insured person. Such deduction for any policy month is the
sum of the following amounts determined as of the beginning of that month:
o the monthly cost of insurance for the insured person; and
o the monthly charge for administration and taxes.
We charge on a current basis a percentage of the Policy Account value for cost
of insurance. The maximum monthly cost of insurance is equal to the maximum
monthly cost of insurance rate shown in the Policy Information section times the
net amount at risk at the beginning of the policy month, divided by $1,000. The
net amount at risk at any time is equal to the difference between the death
benefit (calculated as of that time) and the Policy Account value. The use of a
percentage of the Policy Account value is done for simplicity and may not always
bear a close relationship to the actual cost of providing the coverage. Changes
in this insurance charge will be based on our expectations of future investment
earnings, mortality, persistency, expenses and taxes. Such changes may also be
affected by past investment performance to the extent that it affects our
expectations as to the future insurance risk. For example, we may increase the
percentage of Policy Account value used in determining the insurance charge
solely as a result of poor past investment performance.
Any change in the cost of insurance rates we use will be as described in the
"Changes in Policy Cost Factors" provision. The current charge will never be
more than the guaranteed maximum charge calculated as described above.
99-100-5 Page 6
<PAGE>
OTHER DEDUCTIONS. We also make the following other deductions from your Policy
Account as they occur:
o We deduct a surrender charge if, before the tenth policy year, partial
withdrawals in a policy year exceed 15% of the Policy Account value, minus
any policy loan and accrued loan interest, as of the end of the previous
policy year, or as of the effective date of any restoration of policy
benefits, if later.
o We deduct a surrender charge if, before the tenth policy year, you give up
this policy for its Net Cash Surrender Value or this policy terminates
without value.
o We may deduct a charge for certain transfers (see "Transfers" provision).
GRACE PERIOD. At the beginning of each policy month, we compare the Net Cash
Surrender Value to the total monthly deductions described in the "Monthly
Deductions" provision. If the Net Cash Surrender Value is sufficient to cover
the total monthly deductions, the policy is not in default.
If the Net Cash Surrender Value at the beginning of any policy month is less
than the total monthly deductions for that month, then the policy is in default
as of the first day of that policy month.
If the policy is in default, we will send you and any assignee on our records at
last known addresses written notice stating that a grace period of 61 days has
begun starting with the date the notice is mailed. The notice will also state
the amount of payment that is due.
The payment required will not be more than an amount sufficient to increase the
Net Cash Surrender Value to cover all monthly deductions for 3 months calculated
assuming no interest or investment performance were credited to or charged
against the Policy Account and no policy changes were made.
If we do not receive such amount at our Administrative Office before the end of
the grace period, we will then (1) withdraw and retain any amount in your Policy
Account; and (2) send a written notice to you and any assignee on our records at
last known addresses stating that this policy has ended without value.
If we receive the requested amount before the end of the grace period, but the
Net Cash Surrender Value is still insufficient to cover total monthly
deductions, we will send a written notice that a new 61-day grace period has
begun and request an additional payment.
If the insured person dies during a grace period, we will pay the Insurance
Benefit as described in "The Insurance Benefit We Pay" section of this policy.
RESTORING YOUR POLICY BENEFITS. If this policy has ended without value, you may
restore policy benefits while the insured person is alive if you:
1. Ask for restoration of policy benefits within 6 months from the end of
the grace period; and
2. Provide evidence of insurability satisfactory to us; and
3. Repay all of any policy loan and accrued loan interest outstanding
at the time that the policy ended without value; and
4. Make a required payment. The required payment will not be more than an
amount sufficient to cover (i) total monthly deductions for 3 months,
calculated from the effective date of restoration; and (ii) any excess
of the applicable surrender charge on the date of restoration over the
surrender charge that was deducted on the date of default. We will
determine the amount of this required payment as if no interest or
investment performance were credited to or charged against your Policy
Account.
We must receive the required payment while the insured person is alive. The
policy account on the date of restoration will be equal to the required payment
(including the amount of any policy loan and accrued loan interest payment) plus
a surrender charge credit. The surrender charge credit will be the surrender
charge that was deducted on the date of default, but not greater than the
applicable surrender charge as of the effective date of restoration.
The effective date of the restoration of policy benefits will be the beginning
of the policy month which coincides with or next follows the date we approve
your request. We will start to make monthly charges again as of the effective
date of restoration.
We reserve the right to decline to restore this policy if it would cause this
policy to fail to qualify as life insurance under applicable tax law, as
interpreted by us.
99-100-7 Page 7
<PAGE>
- --------------------------------------------------------------------------------
YOUR INVESTMENT OPTIONS
ALLOCATIONS. This policy provides investment options for the amount in your
Policy Account. Amounts put into your Policy Account are allocated to the
investment funds of our SA at your direction. You specified your initial premium
allocation in your application for this policy, a copy of which is attached to
this policy. However, any amounts which are put into your Policy Account (minus
any amount put into your Loaned Policy Account) prior to the Allocation Date
will initially be allocated to the Money Market Fund of our SA. The Allocation
Date is the first business day twenty calendar days after the date of issue of
this policy. On the Allocation Date, any such amounts then in the Money Market
Fund will be allocated in accordance with the directions contained in your
policy application.
Allocation percentages must be zero or a whole number not greater than 100. The
sum of the allocation percentages must equal 100.
We will make monthly deductions based on the allocation percentages specified in
the application. You may change such allocation percentages by written notice to
our Administrative Office. A change will take effect on the date we receive it
at our Administrative Office except for changes received on or prior to the
Allocation Date, which will take effect on the first business day following the
Allocation Date. If we cannot make a deduction on the basis of the allocation
percentages then in effect, we will make monthly deductions based on the
proportion that your values in the investment funds of our SA bear to the total
unloaned value in your Policy Account.
TRANSFERS. At your written request to our Administrative Office, we will
transfer amounts from your value in any investment fund of our SA to one or more
other funds of our SA. Any such transfer will take effect on the date we receive
your written request at our Administrative Office. However, no transfers will be
made prior to the Allocation Date. We reserve the right to make a charge of $25
for each transfer of amounts among your investment options. The transfer charge,
if any, is deducted from the amounts transferred from the investment funds of
our SA based on the proportion that the amount transferred from each investment
fund of our SA bears to the total amount being transferred. A transfer from the
Money Market Fund on the Allocation Date will not incur a transfer charge.
- --------------------------------------------------------------------------------
THE VALUE OF YOUR POLICY ACCOUNT
The amount in your Policy Account at any time is equal to the sum of the amounts
you then have in the investment funds of our SA under this policy, plus any
Loaned Policy Account (see "Your Value in the Loaned Policy Account" provision).
YOUR VALUE IN THE INVESTMENT FUNDS OF OUR SA. The amount you have in an
investment fund of our SA under this policy at any time is equal to the number
of units this policy then has in that fund multiplied by the fund's unit value
at that time.
Amounts allocated or transferred to an investment fund of our SA are used to
purchase units of that fund; units are redeemed when amounts are deducted,
loaned, transferred or withdrawn. These transactions are called policy
transactions.
The number of units a policy has in an investment fund at any time is equal to
the number of units purchased minus the number of units redeemed in that fund to
that time. The number of units purchased or redeemed in a policy transaction is
equal to the dollar amount of the policy transaction divided by the fund's unit
value on the date of the policy transaction. Policy transactions may be made on
any day. The unit value that applies to a transaction made on a business day
will be the unit value for that day. The unit value that applies to a
transaction made on a non-business day will be the unit value for the next
business day.
We determine unit values for the investment funds of our SA at the end of each
business day. Generally, a business day is any day the New York Stock Exchange
is open for trading. A business day immediately preceded by one or more
non-business days will include those non-business days as part of that business
day. For example, a business day which falls on a Monday will consist of that
Monday and the immediately preceding Saturday and Sunday.
The unit value of an investment fund on any business day is equal to the unit
value for that fund on the immediately preceding business day multiplied by the
net investment factor for that fund on that business day.
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<PAGE>
The net investment factor for an investment fund of our SA on any business day
is (a) divided by (b), minus (c), where:
(a) is the net asset value of the shares in designated investment companies that
belong to the investment fund at the close of business on such business day
before any policy transactions are made on that day, plus the amount of any
dividend or capital gain distribution paid by the investment companies on that
day;
(b) is the value of the assets in that investment fund at the close of business
on the immediately preceding business day after all policy transactions were
made for that day; and
(c) is a charge for each calendar day in that business day, as defined above,
corresponding to a charge not exceeding 1.35% yearly for mortality and expense
risks, plus any charge for that day for taxes, amounts set aside as a reserve
for taxes, or any operating expenses of our SA (including, without limitation,
SEC registration fees and auditing fees).
The net asset value of an investment company's shares held in each investment
fund shall be the value reported to us by that investment company.
YOUR VALUE IN THE LOANED POLICY ACCOUNT. The amount you have in your Loaned
Policy Account at any time is equal to the amount of any outstanding loan and
interest credited to such Account which has not yet been allocated to the
investment funds of our SA.
On each policy anniversary and at any time you repay all of a policy loan, we
allocate the interest that has been credited to the loaned portion of your
Policy Account to the investment funds of our SA in accordance with your
allocation percentages.
We will credit such Account with interest at rates we determine. We will
determine such interest rates periodically in advance. The interest rates we
credit to the Loaned Policy Account will be at an annual rate up to 2% less than
the loan interest rate we charge. However, we reserve the right to credit rates
lower than this if in the future tax laws change such that our taxes on policy
loans or policy loan interest are increased.
- --------------------------------------------------------------------------------
THE CASH SURRENDER VALUE OF THIS POLICY
CASH SURRENDER VALUE. The Cash Surrender Value on any date is equal to the
amount in your Policy Account on that date minus any surrender charge.
NET CASH SURRENDER VALUE. The Net Cash Surrender Value is equal to the Cash
Surrender Value minus any policy loan and accrued loan interest. You may give up
this policy for its Net Cash Surrender Value at any time while the insured
person is living. You may do this by sending us a written request for it and
this policy to our Administrative Office. Your written request for cancellation
or surrender must include the following:
1. A statement that makes it clear that you intend to surrender the
contract;
2. The policy number of the policy to be surrendered;
3. The name of the insured person and your name (if other than the
insured) and address where proceeds should be mailed;
4. Your signature and, if required by the policy or by a legally binding
document of which we have an actual notice, the signature of a
collateral assignee, irrevocable beneficiary, or other person having
an interest in the policy through the legally binding document.
If this policy has a cash surrender value and is being given up for its net cash
surrender value, a completed withholding authorization must also be included
with your written request. If this form is not provided to us with your written
request for surrender, we will withhold income tax on the taxable portion of
your distribution at the mandated federal and state tax rates. We will compute
the Net Cash Surrender Value as of the date we receive your request for it and
this policy at our Administrative Office. If the policy has been lost, stolen or
destroyed, you must include a statement in the written request that the policy
was lost, stolen or destroyed with an approximate date of when the policy was
lost, stolen or destroyed. All insurance coverage under this policy ends on
the date we receive your written request.
SURRENDER CHARGES. If you give up this policy for its Net Cash Surrender Value
or if it ends without value at the end of a grace period before the tenth policy
year, we will subtract a surrender charge from your Policy Account. A table of
surrender charges is shown in the Policy Information section. The surrender
charge will be equal to (1) the percentage from the table for the applicable
policy year times (2) the initial premium minus any partial withdrawals that
have incurred a surrender charge.
99-100-9 Page 9
<PAGE>
We have filed a detailed statement of the method of computing surrender charges
with the insurance supervisory official of the jurisdiction in which this policy
is delivered.
PARTIAL WITHDRAWALS. After the first policy year and while the insured person is
living, you may ask for a partial withdrawal from your net cash surrender value
by written request to our Administrative Office. Your request will be subject to
our approval based on our rules in effect when we receive your request, and to
the minimum partial withdrawal amount of $500. The Policy Account value
remaining after the partial withdrawal and any applicable surrender charge must
be at least $25,000. We have the right to decline a request for a partial
withdrawal if this would cause this policy to fail to qualify as life insurance
under applicable tax law, as interpreted by us. A partial withdrawal will result
in a reduction in the Cash Surrender Value equal to the amount withdrawn, and a
reduction in your Policy Account equal to the amount withdrawn plus any
applicable surrender charge.
A partial withdrawal will also result in a reduction in your death benefit, by
the proportion that the amount withdrawn plus any applicable surrender charge
bears to the amount in your Policy Account just prior to the withdrawal. For
example, assume that a withdrawal of $15,000 with a corresponding surrender
charge of $300 is made, and that the Policy Account and death benefit just prior
to the withdrawal are $60,000 and $128,400, respectively. The death benefit of
$128,400 will be reduced by the proportion that $15,300 bears to $60,000, or by
25.5%, to $95,658.
During the first nine policy years, we will deduct the applicable surrender
charge on any amounts withdrawn during a policy year that exceed, cumulatively,
15% of the Policy Account value (minus any policy loan and accrued loan
interest) as of the end of the previous policy year, or as of the effective date
of any restoration of policy benefits, if later. The surrender charge will be
equal to the percentage from the table of surrender charges for the applicable
policy year times the lesser of (1) such excess partial withdrawal, and (2) the
initial premium less any previous partial withdrawals that incurred a surrender
charge.
You may tell us how much of each partial withdrawal is to come from your values
in each of the investment funds of our SA. If you do not tell us, we will make
the withdrawal on the basis of your allocation percentages then in effect. Any
applicable surrender charge is deducted from your value remaining in the
investment funds from which the withdrawal was made, based on the proportion
that the amount withdrawn from each fund bears to the total amount withdrawn.
If we cannot make the withdrawal or deduct any surrender charge as indicated
above, we will make the withdrawal and any surrender charge deduction based on
the proportion that your values in the investment funds of our SA bear to the
total unloaned value in your Policy Account.
Such partial withdrawal and resulting reduction in the death benefit, in the
Cash Surrender Value and in your Policy Account will take effect on the date we
receive your written request at our Administrative Office.
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HOW A LOAN CAN BE MADE
POLICY LOANS. You can take a loan on this policy while it has a loan value. This
policy will be the only security for the loan. The initial loan and each
additional loan must be for at least $500. Any amount on loan is part of your
Policy Account. We refer to this as the Loaned Policy Account.
CARRY OVER LOANS. If this policy was issued based, in whole or part, upon a
valid exchange under Section 1035 of the Internal Revenue Code, any transferred
existing loan from the exchanged policy as approved by us will be put into your
Loaned Policy Account. If a premium refund is made under the "Right to Examine
Policy" provision, we will subtract any policy loan and accrued loan interest
from that refund.
LOAN VALUE. The loan value on any date is 90% of the Cash Surrender Value on
that date. The amount of any loan you take may not be more than the loan value,
less any outstanding loan and accrued loan interest.
Your request for a policy loan must be in writing to our Administrative Office.
You may tell us how much of the requested loan is to be taken from your value in
each investment fund of our SA. Such values will be determined as of the date we
receive your request. If you do not tell us, we will take the loan from the
values of each investment fund on the basis of your allocation percentages then
in effect. If we cannot do this on the basis of your direction or those
percentages, we will take the loan from each investment fund based on the
proportion that your values in the investment funds of our SA bear to the total
unloaned value in your Policy Account.
99-100-9 Page 10
<PAGE>
We will redeem units of each investment fund sufficient in value to cover the
amount of the loan so allocated and transfer that amount to your loaned Policy
Account.
LOAN INTEREST. Interest on the loan accrues daily at an annual loan interest
rate of 6%. Loan interest is due on each policy anniversary. If the interest is
not paid when due, it will be added to your outstanding loan and allocated on
the basis of the allocation percentages then in effect. If we cannot make the
allocation on the basis of these percentages, we will make it based on the
proportion that your values in the investment funds of our SA bear to the total
unloaned value in your Policy Account. The unpaid interest will then be treated
as part of the loaned amount and will bear interest at the loan rate.
When unpaid loan interest is allocated to an investment fund of our SA, we will
redeem units of that investment fund sufficient in value to cover the amount of
the interest so allocated and transfer that amount to your loaned Policy
Account.
LOAN REPAYMENT. You may repay all or part of a policy loan at any time while the
insured person is alive and this policy is in force. You may tell us how to
allocate repayments among the investment funds of our SA. If you do not tell us,
we will make the allocation on the basis of the allocation percentages then in
effect.
Failure to repay a policy loan or to pay loan interest will not terminate this
policy unles at the beginning of a policy month the Net Cash Surrender Value is
less than the total monthly deductions then due. In that case, the "Grace
Period" provision will apply.
A policy loan will have a permanent effect on your benefits under this policy
even if it is repaid.
- --------------------------------------------------------------------------------
OUR SEPARATE ACCOUNT(S) (SA)
We established and we maintain our SA under the laws of New York State. Realized
and unrealized gains and losses from the assets of our SA are credited to or
charged against it without regard to our other income, gains, or losses. Assets
are put in our SA to support this policy and other variable life insurance
policies. Assets may be put in our SA for other purposes, but not to support
contracts or policies other than variable contracts.
The assets of our SA are our property. The portion of its assets equal to the
reserves and other policy liabilities with respect to our SA will not be
chargeable with liabilities arising out of any other business we conduct. We may
transfer assets of an investment fund in excess of the reserves and other
liabilities with respect to that fund to another investment fund or to our
General Account.
INVESTMENT FUNDS. Our SA consists of investment funds. Each fund may invest its
assets in a separate class of shares of a designated investment company or
companies or make direct investments in securities. The investment funds of our
SA that you chose for your initial allocations are shown on the application for
this policy, a copy of which is attached to this policy. We may from time to
time make other investment funds available to you or we may create a new SA. We
will provide you with written notice of all material details including
investment objectives and all charges.
We have the right to change or add designated investment companies. We have the
right to add or remove investment funds. We have the right to withdraw assets of
a class of policies to which this policy belongs from an investment fund and put
them in another investment fund. We also have the right to combine any two or
more investment funds. The term investment fund in this policy shall then refer
to any other investment fund in which the assets of a class of policies to which
this policy belongs were placed.
We have the right to operate the Separate Account or any investment fund as a
unit investment trust or management investment company under the Investment
Company Act of 1940, and if operated as a management investment company, charges
and expenses that otherwise would be assessed against an underlying investment
fund would be assessed against the Separate Account.
We have the right to:
1. register or deregister any SA available under this policy under the
Investment Company Act of 1940;
2. run any SA available under this policy under the direction of a committee,
and discharge such committee at any time;
3. restrict or eliminate any voting rights of policy owners, or other persons
who have voting rights as to any SA available under this policy; and
99-100-11 Page 11
<PAGE>
4. operate any SA available under this policy or one or more of its investment
funds by making direct investments or in any other form. If we do so, we
may invest the assets of such SA or one or more of the investment funds in
any legal investments. We will rely upon our own or outside counsel for
advice in this regard. Also, unless otherwise required by law or
regulation, an investment adviser or any investment policy may not be
changed without our consent. If required by law or regulation, the
investment policy of an investment fund of any SA available under this
policy will not be changed by us unless approved by the Superintendent of
Insurance of New York State or deemed approved in accordance with such law
or regulation.
If any of these changes result in a material change in the underlying
investments of an investment fund of our SA, we will notify you of such change,
as required by law. If you have value in that investment fund, we will, if you
wish, transfer it at your written direction from that fund to another fund(s) of
our SA. There will be no charge for such a transfer.
- --------------------------------------------------------------------------------
OUR REPORT TO YOU
For each policy year, we will send you a report for this policy that shows the
current death benefit, the value you have in each investment fund of any SA
available under this policy, the Cash Surrender Value, and any policy loan. It
will also show any other information as may be required by the insurance
supervisory official of the jurisdiction in which this policy is delivered. This
report is furnished without any charge.
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HOW BENEFITS ARE PAID
You can have the Insurance Benefit or your Net Cash Surrender Value withdrawals
paid immediately in one sum. Or, you can choose another form of payment for all
or part of them. If you do not arrange for a specific choice before the insured
person dies, the beneficiary will have this right when the insured person dies.
If you do make an arrangement, however, the beneficiary cannot change it after
the insured person dies.
The options are:
1. DEPOSIT: The sum will be left on deposit for a period mutually agreed upon.
We will pay interest at the end of every month, every 3 months, every 6
months or every 12 months, as chosen.
2. INSTALLMENT PAYMENTS: There are two ways that we pay installments:
FIXED PERIOD: We will pay the sum in equal installments for a specified
number of years (not more than 30). The installments will be at least those
shown in the Table of Guaranteed Payments on the last page of this policy.
FIXED AMOUNT: We will pay the sum in installments as mutually agreed upon
until the original sum, together with interest on the unpaid balance, is
used up.
3. MONTHLY LIFE INCOME: We will pay the sum as a monthly income for life. The
amount of the monthly payment will be at least that shown in the Table of
Guaranteed Payments. The basis for these payments is the 1983 Individual
Annuity Mortality Table "a" projected with modified Scale G. You may choose
any one of three ways to receive monthly life income. We will guarantee
payments for at least 10 years (called "10 Years Certain"); at least 20
years (called "20 Years Certain"); or until the payments we make equal the
original sum (called "Refund Certain").
Payments that we make under options 1-3, above will not be affected by the
investment experience of any investment fund of our SA after proceeds are
applied under such options.
We will also apply the sum under any other option requested that we make
available at the time of payment.
The payee may name and change a successor payee for any amount we would
otherwise pay to the payee's estate.
Any arrangements involving more than one of the options, or a payee who is not a
natural person (for example, a corporation) or who is a fiduciary, must have our
approval. Also, details of all arrangements will be subject to our rules at the
time the arrangement takes effect. These include rules on: the minimum amount we
will apply under an option and minimum amounts for installment payments;
withdrawal or commutation rights; naming payees and successor payees; and
proving age and survival.
99-100-11 Page 12
<PAGE>
Payment choices (or any later changes) will be made and will take effect in the
same way as a change of beneficiary. Amounts applied under these options will
not be subject to the claims of creditors or to legal process, to the extent
permitted by law.
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OTHER IMPORTANT INFORMATION
YOUR CONTRACT WITH US. This policy is issued in consideration of payment of the
initial premium shown in the Policy Information section.
This policy, any riders or endorsements, and the attached copy of the initial
application and all subsequent applications to change this policy, and all
additional Policy Information sections added to this policy, make up the entire
contract. The rights conferred by this policy are in addition to those provided
by applicable Federal and State laws and regulations.
Only our Chairman of the Board, our President or one of our Vice Presidents can
modify this contract or waive any of our rights or requirements under it. The
person making these changes must put them in writing and sign them.
POLICY CHANGES -- APPLICABLE TAX LAW. For you and the beneficiary to receive the
tax treatment accorded to life insurance under Federal law, this policy must
qualify initially and continue to qualify as life insurance under the Code or
successor law. Therefore, we have reserved earlier in this policy the right to
decline to allow partial withdrawals or to decline to accept payment of any
additional premium that, in our opinion, would cause this policy to fail to
qualify as life insurance under applicable tax law. Further, we reserve the
right to make changes in this policy (for example, in the factors in the Policy
Information section), to require additional premium payments or to make
distributions from this policy to the extent we deem it necessary to continue to
qualify this policy as life insurance. Any such changes will apply uniformly to
all policies that are affected. You will be given advance notice of such
changes.
CHANGES IN POLICY COST FACTORS. Changes in policy cost factors (cost of
insurance deductions and expense charges) will be by class and based upon
changes in future expectations for such elements as: investment earnings,
mortality, persistency, expenses and taxes. Any change in policy cost factors
will be determined in accordance with procedures and standards on file, if
required, with the insurance supervisory official of the jurisdiction in which
this policy is delivered.
WHEN THE POLICY IS INCONTESTABLE. We have the right to contest the validity of
this policy based on material misstatements made in the initial application for
this policy. We also have the right to contest the validity of any policy
restoration based on material misstatements made in any application for that
restoration. However, we will not contest the validity of this policy after it
has been in effect during the lifetime of the insured person for two years from
the earlier of the Register Date or Date of Issue shown in the Policy
Information section. We will not contest the validity of any restoration of this
policy after it has been in effect during the lifetime of the insured person for
two years from the effective date of restoration.
We also have the right to contest the validity of any increase in policy death
benefit resulting from payment of an additional premium, based on material
misstatements made in the application for that payment of additional premium.
However, we will not contest the validity of any such increase in death benefit
after it has been in effect during the lifetime of the insured person for two
years from the date of such increase.
No statement shall be used to contest a claim unless contained in an
application.
All statements made in an application are representations and not warranties.
WHAT IF AGE OR SEX HAS BEEN MISSTATED? If the insured person's age or sex has
been misstated on any application, the death benefit shall be that which would
have been applicable based on the Policy Account and the correct factor for
calculating death benefits for the correct attained age and sex.
HOW THE SUICIDE EXCLUSION AFFECTS BENEFITS. If the insured person commits
suicide (while sane or insane) within two years after the earlier of the
Register Date or the Date of Issue shown in the Policy Information section, our
liability will be limited to the payment of a single sum. This sum will be equal
to the premium paid, minus any loan and accrued loan interest and minus any
partial withdrawal of the Net Cash Surrender Value.
99-100-13 Page 13
<PAGE>
If the insured person commits suicide (while sane or insane) within two years
after the payment of an additional premium that resulted in an increase in the
death benefit of this policy, our liability as to the increase in amount will be
limited to the payment of a single sum. This sum will be equal to the additional
premium paid for such increase, minus any policy loan and accrued loan interest
and minus any partial withdrawal of the Net Cash Surrender value.
Under either circumstance detailed in the preceding two paragraphs, our total
liability will never exceed payment of the Insurance Benefit as described in
"The Insurance Benefit We Pay" section of this policy.
HOW WE MEASURE POLICY PERIODS AND ANNIVERSARIES. We measure policy years, policy
months, and policy anniversaries from the Register Date shown in the Policy
Information section. Each policy month begins on the same day in each calendar
month as the day of the month in the Register Date.
HOW, WHEN AND WHAT WE MAY DEFER. We may not be able to obtain the value of the
assets of the investment funds of our SA if: (1) the New York Stock Exchange is
closed; or (2) the Securities and Exchange Commission requires trading to be
restricted or declares an emergency. During such times we may defer:
1. Determination and payment of partial withdrawals;
2. Determination and payment of any death benefit;
3. Payment of loans;
4. Determination of the unit values of the investment funds of our SA; and
5. Any requested transfer or the transfer on the Allocation Date.
THE BASIS WE USE FOR COMPUTATION. We provide Cash Surrender Values that are at
least equal to those required by law. If required to do so, we have filed with
the insurance supervisory official of the jurisdiction in which this policy is
delivered a detailed statement of our method of computing such values. We
compute reserves under this policy by the Commissioners Reserve Valuation
Method.
We base reserves on the Commissioners 1980 Standard Ordinary, Male or Female,
Mortality Tables. We also use these tables as the basis for determining
maximum insurance costs, taking account of the sex and attained age of the
insured person.
POLICY ILLUSTRATIONS. Upon request we will give you an illustration of the
future benefits under this policy based upon both guaranteed and current cost
factor assumptions. However, if you ask us to do this more than once in any
policy year, we reserve the right to charge you a fee of up to $25 for this
service.
99-100-13 Page 14
<PAGE>
TABLE OF GUARANTEED PAYMENTS
(MINIMUM AMOUNT FOR EACH $1,000 APPLIED)
OPTION 2A
FIXED PERIOD INSTALLMENTS
-------------------------
NUMBER MONTHLY ANNUAL
OF YEARS' INSTALL- INSTALL-
INSTALLMENTS MENT MENT
------------ --------- --------
1 $84.28 $1,000.00
2 42.66 506.17
3 28.79 341.60
4 21.86 259.33
5 17.70 210.00
6 14.93 177.12
7 12.95 153.65
8 11.47 136.07
9 10.32 122.40
10 9.39 111.47
11 8.64 102.54
12 8.02 95.11
13 7.49 88.83
14 7.03 83.45
15 6.64 78.80
16 6.30 74.73
17 6.00 71.15
18 5.73 67.97
19 5.49 65.13
20 5.27 62.58
21 5.08 60.28
22 4.90 58.19
23 4.74 56.29
24 4.60 54.55
25 4.46 52.95
26 4.34 51.48
27 4.22 50.12
28 4.12 48.87
29 4.02 47.70
30 3.93 46.61
If installments are paid every 3 months, they will be 25.23% of the annual
installments. If they are paid every 6 months, the will be 50.31% of the annual
installments.
OPTION 3
MONTHLY LIFE INCOME
-------------------
10 YEARS CERTAIN 20 YEARS CERTAIN REFUND CERTAIN
---------------- ---------------- ----------------
AGE MALE FEMALE MALE FEMALE MALE FEMALE
--- ---- ------ ---- ------ ---- ------
50 $3.48 $3.19 $3.42 $3.17 $3.37 $3.14
51 3.54 3.23 3.47 3.21 3.42 3.17
52 3.59 3.28 3.51 3.25 3.46 3.21
53 3.65 3.32 3.56 3.29 3.51 3.25
54 3.70 3.37 3.61 3.33 3.56 3.29
55 3.77 3.42 3.66 3.37 3.61 3.34
56 3.83 3.47 3.72 3.42 3.67 3.38
57 3.90 3.52 3.77 3.47 3.72 3.43
58 3.97 3.58 3.83 3.52 3.78 3.48
59 4.04 3.64 3.88 3.57 3.84 3.53
60 4.12 3.70 3.94 3.62 3.90 3.58
61 4.20 3.76 4.00 3.68 3.97 3.64
62 4.29 3.83 4.06 3.74 4.04 3.69
63 4.38 3.90 4.12 3.79 4.11 3.75
64 4.48 3.98 4.18 3.85 4.19 3.82
65 4.58 4.06 4.25 3.92 4.26 3.88
66 4.68 4.14 4.31 3.98 4.35 3.95
67 4.79 4.23 4.37 4.04 4.43 4.02
68 4.90 4.32 4.43 4.11 4.52 4.10
69 5.02 4.42 4.50 4.18 4.62 4.18
70 5.14 4.52 4.56 4.25 4.71 4.26
71 5.26 4.63 4.62 4.31 4.82 4.35
72 5.39 4.75 4.67 4.38 4.92 4.44
73 5.52 4.87 4.73 4.45 5.03 4.53
74 5.66 4.99 4.78 4.51 5.14 4.63
75 5.80 5.12 4.83 4.58 5.27 4.74
76 5.95 5.26 4.88 4.64 5.39 4.84
77 6.10 5.40 4.93 4.70 5.53 4.96
78 6.25 5.55 4.97 4.75 5.66 5.08
79 6.40 5.70 5.01 4.80 5.80 5.20
80 6.56 5.85 5.04 4.86 5.96 5.33
81 6.72 6.01 5.08 4.90 6.11 5.45
82 6.88 6.18 5.11 4.95 6.27 5.60
83 7.04 6.34 5.13 4.99 6.43 5.73
84 7.20 6.51 5.16 5.03 6.62 5.89
85 & over 7.36 6.67 5.18 5.07 6.81 6.04
Amounts for Monthly Life Income are based on age nearest birthday when income
starts. Amounts for ages not shown will be furnished on request.
99-100-15 Page 15
<PAGE>
THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES
A Stock Life Insurance Company
Home Office: 1290 Avenue of the Americas, New York, New York 10104
Modified Single Premium Variable Life Insurance Policy. Insurance benefit
payable upon the death of the insured person while this policy is in force.
Your policy account will increase or decrease in value depending on the
investment experience of the separate account investment funds in which
your policy account is invested. This is a non-participating policy.
No. 99-100
GUARANTEED MINIMUM DEATH
BENEFIT ENDORSEMENT
In this endorsement "we", "our" and "us" mean The Equitable Life Assurance
Society of the United States. "You" and "your" mean the owner of the policy at
the time an owner's right is exercised.
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This endorsement is made part of this policy as of the Register Date, and
modifies the policy as follows:
1. The following is added to the Table of Maximum Expense Charges in the
Policy Information section as a deduction from your Policy Account:
FOR THE GUARANTEED MINIMUM DEATH BENEFIT: WE DEDUCT A MONTHLY CHARGE AT AN
ANNUAL RATE NOT TO EXCEED .50% OF THE POLICY ACCOUNT.
2. The first paragraph of the Death Benefit provision is deleted and replaced
by the following:
3. The following provision is added to the policy:
DEATH BENEFIT. The initial death benefit on the Register Date is shown in the
Policy Information section. At any time thereafter, the death benefit of this
policy on the date of death of the insured person is equal to the greater of (a)
the Guaranteed Minimum Death Benefit or (b) the amount in your Policy Account on
such date multiplied by the applicable factor. The factor referred to is from
the Table of Factors Used For Calculating Death Benefits, shown in the Policy
Information section, for the insured person's age (nearest birthday) at the
beginning of the policy year of determination.
GUARANTEED MINIMUM DEATH BENEFIT. The guaranteed minimum death benefit of this
policy is equal to the sum of the initial premium and any additional premium
paid for this policy, adjusted for any partial withdrawals. A partial withdrawal
will result in a reduction in the guaranteed minimum death benefit; the benefit
is reduced by the proportion that the withdrawn amount bears to the amount in
your Policy Account just prior to the withdrawal.
For example, assume that a withdrawal of $15,000 is made, and that the Policy
Account and guaranteed minimum death benefit just prior to the withdrawal are
$60,000 and $50,000, respectively. The guaranteed minimum death benefit of
$50,000 will be reduced by the proportion that $15,000 bears to $60,000, or by
25%, to $37,500.
The death benefit will never be less than the guaranteed minimum death benefit,
regardless of investment performance, provided any outstanding policy loan and
accrued loan interest does not exceed the cash surrender value. If the net cash
surrender value at the beginning of a policy month is not sufficient to cover
the monthly deductions for that month (see "Monthly Deductions" provision) and
there is no outstanding policy loan, the policy will remain in force and we will
waive any monthly deductions that are in excess of the Policy Account.
4. The first paragraph of the "Monthly Deductions" provision is deleted and
the following is substituted:
MONTHLY DEDUCTIONS. At the beginning of each policy month we make a deduction
from your Policy Account to cover monthly charges for expenses and insurance
coverage. The first deduction is made on the Register Date. No deduction is made
after age 100 of the insured person. Such deduction for any policy month is the
sum of the following amounts determined as of the beginning of that month:
a) the monthly cost of insurance for the insured person;
b) the monthly charge for the Guaranteed Minimum Death Benefit; and
c) the monthly charge for administration and taxes.
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
Pauline Sherman, Senior Vice President, Michael Hegarty, President and
Secretary and Associate General Counsel Chief Operating Officer
S.99-50
[LOGO]
APPLICATION FOR MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES (EQUITABLE)
Home Office: 1290 Avenue of the Americas, New York, NY 10104
- --------------------------------------------------------------------------------
1. PROSPECTIVE INSURED
[ ] Male [ ] Female
- --------------------------------------------------------------------------------
Name (First, Middle, Last)
- --------------------------------------------------------------------------------
Street Address
- --------------------------------------------------------------------------------
City, State, Zip Code
- --------------------------------------------------------------------------------
Home Telephone No. Office Telephone No.
- --------------------------------------------------------------------------------
U.S. Taxpayer ID No. Citizenship
- --------------------------------------------------------------------------------
Date of Birth Place of Birth (city, state, country)
- --------------------------------------------------------------------------------
Driver's License No. State
- --------------------------------------------------------------------------------
Employer Name Occupation - Position
- --------------------------------------------------------------------------------
Employer's Address (Street, City, State, Zip
Code)
- --------------------------------------------------------------------------------
2. OWNER(S) COMPLETE ONLY IF DIFFERENT THAN INSURED
Type of Owner: [ ] Individual
[ ] Trust Dated: __________________ (enter name of trust below)
[ ] Other Entity:__________________
- --------------------------------------------------------------------------------
Name(s) (First, Middle, Last) Relationship to Insured
- --------------------------------------------------------------------------------
Mailing Address (Street)
- --------------------------------------------------------------------------------
City, State, Zip Code
- --------------------------------------------------------------------------------
Telephone No(s). U.S. Taxpayer ID No.
3. BENEFICIARY(IES)
PRIMARY:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Names(s) Relationship to Insured % of Death Benefit
CONTINGENT:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Names(s) Relationship to Insured % of Death Benefit
- --------------------------------------------------------------------------------
4. PREMIUM AMOUNT: ____________________
METHOD OF PAYMENT: [ ] Check payable to Equitable Life [ ] Wire Transfer
[ ] CD or Mutual Fund Transfer [ ] 1035 Exchange
- --------------------------------------------------------------------------------
5. INFORMATION FROM THE PROPOSED INSURED
Height: Weight:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
a) Have you ever had or been treated for Acquired Immune Deficiency Syndrome Yes [ ] No [ ]
(AIDS), HIV Disease, heart trouble, stroke, high blood pressure, chest pain,
diabetes, tumor, cancer, respiratory, neurological disorder, alcohol abuse or
substance abuse?*
- ---------------------------------------------------------------------------------------------------
b) In the previous 12 months, have you consulted a physician or practitioner, or Yes [ ] No [ ]
been examined or treated at a hospital, clinic or other medical facility, or do
you plan to be treated by a physician or practitioner at a hospital, clinic or
other medical facility in the next 12 months? (Do not include visits for colds,
minor injuries or normal pregnancies.)*
- ---------------------------------------------------------------------------------------------------
c) Are you taking any prescription medication (s)? * Yes [ ] No [ ]
- ---------------------------------------------------------------------------------------------------
d) Have you ever had a driver's license suspended or revoked, been convicted of Yes [ ] No [ ]
driving under influence of alcohol and/or drugs, or in the previous 24 months
been convicted of two or more speeding and/or reckless driving
offenses?
- ---------------------------------------------------------------------------------------------------
e) In the next 12 months, are you planning to travel for a total of more than 2 Yes [ ] No [ ]
weeks to Asia, Africa, Eastern Europe or the Middle East?
- ---------------------------------------------------------------------------------------------------
f) Have you ever been rated or declined in connection with an application for Yes [ ] No [ ]
life or health insurance?
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Details: If you answered "yes" to 5a, 5b or 5c, give details here, and, if
needed, in Special Instructions (No.9). Include name and address (if available)
of physician or practitioner involved, date and reason for consultation,
diagnosis, treatment (including dosage of any medication) and outcome.
MSPVLI-001
- -------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------- -----------------------------
6. INITIAL ALLOCATIONS TO INVESTMENT OPTIONS -
PREMIUM & DEDUCTIONS*
- -------------------------------------------------------------------------------
FUNDS Whole
Percentages
Minimum 5%
- -------------------------------------------------------------------------------
Alliance Money Market %
- -------------------------------------------------------------------------------
Alliance High Yield %
- -------------------------------------------------------------------------------
Alliance Common Stock %
- -------------------------------------------------------------------------------
Alliance Aggressive Stock %
- -------------------------------------------------------------------------------
Alliance Small Cap Growth %
- -------------------------------------------------------------------------------
EQ/Alliance Premier Growth %
- -------------------------------------------------------------------------------
BT Equity 500 Index %
- -------------------------------------------------------------------------------
BT Small Company Index %
- -------------------------------------------------------------------------------
BT International Equity Index %
- -------------------------------------------------------------------------------
Capital Guardian US Equity %
- -------------------------------------------------------------------------------
Capital Guardian Research %
- -------------------------------------------------------------------------------
Capital Guardian International %
- -------------------------------------------------------------------------------
JPM Core Band %
- -------------------------------------------------------------------------------
Lazard Large Cap Value %
- -------------------------------------------------------------------------------
Lazard Small Cap Value %
- -------------------------------------------------------------------------------
MFS Growth with Income %
- -------------------------------------------------------------------------------
MFS Research %
- -------------------------------------------------------------------------------
MFS Emerging Growth Companies %
- -------------------------------------------------------------------------------
Morgan Stanley Emerging Markets Equity %
- -------------------------------------------------------------------------------
EQ Putnam Growth & Income Value %
- -------------------------------------------------------------------------------
EQ Putnam Investors Growth %
- -------------------------------------------------------------------------------
EQ Putnam International Equity %
- -------------------------------------------------------------------------------
Total: 100%
- -------------------------------------------------------------------------------
7. [ ] ACCOUNT REBALANCING NOTE: THIS
PROGRAM MAY NOT BE ELECTED IF YOU CHOOSE DOLLAR COST AVERAGING.
The allocation among the investment funds will be periodically re-adjusted
according to the allocation percentages you indicate in No. 6, for a maximum of
eight funds. Select rebalancing frequency:
[ ] QUARTERLY [ ] SEMI-ANNUALLY [ ] ANNUALLY
8. [ ] DOLLAR COST AVERAGING NOTE: THIS PROGRAM MAY
NOT BE ELECTED IF YOU CHOOSE ACCOUNT REBALANCING.
You may make automatic monthly transfers from the Money Market option to a
maximum of eight other variable options. You may specify the amounts to transfer
(minimum of $50) below.
FUNDS TO RECEIVE TRANSFER: DOLLAR AMOUNT
---------------------------- $--------------
---------------------------- $--------------
---------------------------- $--------------
---------------------------- $--------------
---------------------------- $--------------
---------------------------- $--------------
---------------------------- $--------------
- -------------------------------------------------------------------------------
*Your premium will be allocated and your monthly deductions will be taken
according to these percentages beginning on the first business day on or after
the 20th calendar day from the issue date. Before that time, the premium will be
allocated to and all monthly deductions will be taken from the Alliance Money
Market fund.
- --------------------------------------------------------------------------------
9. SPECIAL INSTRUCTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
- -----------------------------------------------------------------------------------------------------
10. SUITABILITY - QUESTIONS FOR PROSPECTIVE OWNER
<S> <C> <C> <C>
Have you received a prospectus? Yes [ ] No [ ]
Date of Prospectus: Date of any Supplement:
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Do you understand that actual policy values will reflect certain deductions Yes [ ] No [ ]
and charges and may increase or decrease depending on the investment
experience of Separate Account Divisions and that the cash value may be
subject to a surrender charge during the first nine policy years, upon policy
surrender or lapse?
- -----------------------------------------------------------------------------------------------------
With this in mind, is the policy in accord with your insurance and long-term Yes [ ] No [ ]
investment objectives and anticipated financial needs? [ ]
- -----------------------------------------------------------------------------------------------------
Are you replacing or changing any existing insurance or annuity or do you plan to do so, assuming the
insurance applied for will be issued? [ ] Yes [ ] No If yes, complete the following:
Year Issued: ______ Type of Plan: ______________ Company: _________________ Contract No:____________
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
MSPVLI-001
- -------------------------------------------------------------------------------
11. AGREEMENT
Each signer of this application agrees that:
(1) The statements and answers in all parts of this application are true and
complete to the best of my (our) knowledge and belief. Equitable may rely on
them in acting on this application.
(2) Equitable's Temporary Insurance Agreement states the conditions that must be
met before any insurance takes effect if money is paid, or an approved
authorization is signed, before the policy is delivered. Temporary Insurance
is not provided for a policy or benefit applied for under the terms of a
guaranteed insurability option or a conversion privilege.
(3) Except as stated in the Temporary Insurance Agreement, no insurance shall
take effect on this application: (a) until a policy is delivered and the
full initial premium for it is paid, or an approved authorization is signed,
while the person(s) proposed for insurance is (are) living, (b) before any
Register Date specified in this application; and (c) unless to the best of
my (our) knowledge and belief the statements and answers in all parts of
this application continue to be true and complete, without material change,
as of the time such premium is paid.
(4) No Financial Professional or medical examiner has authority to modify this
Agreement or the Temporary Insurance Agreement, nor to waive any of
Equitable's rights or requirements. Equitable shall not be bound by any
information unless it is stated in the Application.
(5) POLICY VALUES INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF
THE SEPARATE ACCOUNT DIVISIONS AND REFLECT CERTAIN DEDUCTIONS AND CHARGES.
THE DEATH BENEFIT MAY BE FIXED OR VARIABLE UNDER SPECIFIED CONDITIONS, AS
DESCRIBED IN THE POLICY.
- -------------------------------------------------------------------------------
VLI Notice: Available upon request are illustrations of benefits, including
death benefits, policy values and cash surrender values.
- -------------------------------------------------------------------------------
12. ACKNOWLEDGEMENT AND AUTHORIZATIONS
UNDERWRITING PRACTICES. I (we) have received a statement of the underwriting
practices of Equitable which describes how and why Equitable obtains information
on my insurability, to whom such information may be reported and how I may
obtain it. The statement also contains the notice required by the Fair Credit
Reporting Act.
AUTHORIZATIONS.
TO OBTAIN MEDICAL INFORMATION. I (we) authorize any physician, hospital, medical
practitioner or other facility, insurance company, and the Medical Information
Bureau to release to Equitable and its legal representative any and all
information they may have about any diagnosis, treatment and prognosis regarding
my physical or mental condition.
TO OBTAIN NON-MEDICAL INFORMATION. I (we) authorize any employer, business
associate, government unit, financial institution, Consumer Reporting Agency,
and the Medical Information Bureau to release to Equitable and its legal
representative any information they may have about my occupation, avocations,
finances, driving record, character and general reputation. I (we) authorize
Equitable to obtain investigative consumer reports, as appropriate.
TO USE AND DISCLOSE INFORMATION. I (we) understand that the information that I
(we) authorize Equitable to obtain will be used by Equitable to help determine
my insurability or my eligibility for benefits under an existing policy. I (we)
authorize Equitable to release information about my insurability to its
reinsurers, contractors and affiliates, my (our) Financial Professional, and to
the Medical Information Bureau, all as described in the statement of Equitable's
underwriting practices or to other persons or businesses performing business or
legal services in connection with my application or claim of eligibility for
benefits, or as may be otherwise lawfully required, or as I (we) may further
authorize. I (we) understand that I (we) have the right to learn the contents of
any report of information (generally through my physician, in the case of
medical information).
COPY OF AUTHORIZATIONS. I (we) have a right to ask for and receive a true copy
of this Acknowledgement and Authorization signed by me (us). I (we) agree that a
reproduced copy shall be as valid as the original.
DURATION. The authorizations shall be valid for 12 months from the date shown
below.
- -------------------------------------------------------------------------------
MSPVLI-001
<PAGE>
13. FRAUD NOTICES
ARKANSAS/KENTUCKY/NEW MEXICO/PENNSYLVANIA/LOUISIANA: Any person who knowingly
and with intent to defraud any insurance company or other person files an
enrollment form/application for insurance or statement of claim containing any
materially false information or conceals for the purpose of misleading,
information concerning any fact material thereto commits a fraudulent insurance
act, which is a crime and subjects such person to criminal and civil penalties.
COLORADO: It is unlawful to knowingly provide false, incomplete, or misleading
facts or information to an insurance company for the purpose of defrauding or
attempting to defraud the company. Penalties may include imprisonment, fines,
denial of insurance, and civil damages. Any insurance company or agent of an
insurance company who knowingly provides false, incomplete, or misleading facts
or information to a contract owner or claimant for the purpose of defrauding or
attempting to defraud the contract owner or claimant with regard to a settlement
or award payable from insurance proceeds shall be reported to the Colorado
Division of Insurance within the Department of Regulatory Agencies.
FLORIDA: Any person who knowingly and with intent to injure, defraud or deceive
an insurer files a statement of claim or an application containing any false,
incomplete, or misleading information is guilty of a felony of the third degree.
MAINE: It is a crime to knowingly provide false, incomplete or misleading
information to an insurance company for the purpose of defrauding the company.
Penalties may include imprisonment, fines, or a denial of insurance benefits.
NEW JERSEY: Any person who knowingly files a statement of claim containing any
false or misleading information is subject to criminal and civil penalties.
OHIO: Any person who, with intent to defraud or knowing that he is facilitating
a fraud against an insurer, submits an enrolment form/application or files a
claim containing a false or deceptive statement is guilty of insurance fraud.
ALL OTHER STATES (EXCEPT VIRGINIA): Any person who knowingly and with intent to
defraud any insurance company files an enrollment form/application or statement
of claim containing any materially false, misleading or incomplete information
is guilty of crime which may be punishable under state or Federal law.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
14. SIGNATURE(S)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
Proposed Insured's Signature Date
- -------------------------------------------------------------------------------------------------------
Owner's Signature (if different from Insured) Date Signed at: City, State
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
15. PROPOSED OWNER INFORMATION
(1) Is the Owner or Insured or an immediate family member thereof (or the person(s) authorized to
transact business on behalf of owner) a member or an associated person of the National Association of
Securities Dealers, Inc. (NASD)? [ ] Yes [ ] No
(2) No. of Wage Earners in Household [ ] 0 [ ] 1 [ ] 2 [ ] 3+
(3) Before-Tax Income a. Individual $__________________ b. Household $________________ c. Business $__________________
(4) Net Worth (If Business, as of last fiscal quarter, check one)
[ ] less than $50,000 [ ] $50,000 - $99,999 [ ] $100,000 - $199,999 [ ] $200,000 - 299,999 [ ] $300,000 - $499,999
[ ] $500,000-$999,999 [ ] $1,000,000 -$4,999,999 [ ] $5,000,000 -$9,999,999 [ ] $10 million +
(5) Number of Dependents or Employees: Children____________ Other ____________ Employees ______________
(6) Purpose of Insurance: ________________________________ (7) Occupation or Type of Business: ______________________
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
16. CERTIFICATION OF FINANCIAL PROFESSIONAL
Will any existing insurance or annuity be replaced or changed assuming the insurance applied for will be issued? [ ] Yes [ ] No I
certify that i) I have asked and recorded completely and accurately the answers to all questions on this application and I know of
nothing affecting the risk that has not been recorded herein, ii) the Prospective Owner(s) has received a prospectus for the policy,
and iii) no written sales materials other than those approved by Equitable have been used.
__________________________________ ___________________________________ ______________ _____________
Financial Professional's Signature Print Financial Professional's Name Tel. No. Date
FOR FINANCIAL PROFESSIONAL USE ONLY: Contact your home office for program information.
[ ] Option I [ ] Option II NOTE: Once selected, program cannot be changed.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
MSPVLI-001
<PAGE>
[LANGUAGE FOR TEAR-OFF SHEET]
UNDERWRITING PRACTICES
UNDERWRITING. Our evaluation of your application begins with the medical history
you furnish. Since we rely on the accuracy and completeness of your answers, we
may verify them both before and after a policy is issued.
SOURCES OF INFORMATION. We may request additional information from physicians,
hospitals, other medical professionals or health care institutions, the Medical
Information Bureau, other insurers to which you have applied, your employer,
business associates, financial institutions, governmental units, consumer
reporting agencies or your Financial Professional.
Your signature on the Acknowledgement and Authorization Form permits us to make
these inquiries. They may be made by personal interview, by telephone or in
writing. We do not ask other insurers for their underwriting decision on your
application. You have the right to know (usually through a physician you name)
what information we have concerning you, and if it is incorrect, to have it
corrected. If you want more information about this, contact your Financial
Professional. If we request information about you from an insurance support
organization, they may also furnish this information to others authorized by
you. In this connection, the federal and various state Fair Credit Reporting
Acts require that you be given this notice:
To help establish the need for insurance, an investigative consumer report
(including information on finances, character and general reputation) may be
requested. It would be based on interviews with your employer, business
associates, financial institutions, governmental units, and references you
name. You may also ask to be interviewed yourself.
You may write to us for more complete details on consumer reports. You also
have the right to know whether a consumer report was made, the name and
address of the agency which made it, and to obtain a copy of the report from
them. You can obtain a summary of all your rights under the Fair Credit
Reporting Act from the Consumer Reporting agency.
REPORT OF ADVERSE SELECTION. If an adverse underwriting decision is made on your
application, you will be notified and given the reason for this as well as
instructions for obtaining further details. If you believe this decision was
based on erroneous information, you should contact your Financial Professional.
RELEASE OF INFORMATION.
The information we obtain concerning you is treated as confidential and will
only be released as follows:
1) To the Equitable employees whose jobs require access to it.
2) To your personal physician, if you request this in writing and furnish the
doctor's full name and address.
3) To another insurer if you apply for life or health coverage or submit a
claim, provided you authorize them to obtain this information.
4) To our reinsurers, contractors or affiliates if necessary to process your
application.
5) To the Medical Information Bureau, if we consider it significant for
underwriting.
6) To your Financial Professional, to the extent needed to service your
application and policy.
WHERE TO WRITE TO US. Your Financial Professional will be pleased to give you
the address of our office to which you can write concerning any of the matters
discussed above.
MEDICAL INFORMATION BUREAU (MIB)
The MIB is a non-profit organization of life insurance companies. Its members
exchange information in order to protect the majority of applicants from the few
who might not disclose significant facts in applying for coverage. Member
companies report to it information of underwriting significance as authorized by
applicants and policyholders. This information is, in turn, available only to
other member companies when appropriately authorized to secure it.
While the MIB may help us identify areas about which we need additional
information for our underwriting evaluation, we do no use MIB reports as the
basis for our underwriting decisions.
Upon request, the MIB will arrange for disclosure to you of any information it
may have concerning you. If you question the accuracy of this information, you
may requests a correction according to the federal Fair Credit Reporting Act.
You may contact MIB at Post Office Box 105, Essex Station, Boston MA 02112.
Telephone: (617) 426-3660.
The Equitable Life Assurance Society of the United States (Equitable)
1290 Avenue of the Americas
New York, NY 10104
MSPVLI-001
ROBIN M. WAGNER
Vice President and Counsel
(212) 314-3962
Fax: (212) 707-7785
[EQUITABLE -- MEMBER OF THE GLOBAL AXA GROUP LOGO]
LAW DEPARTMENT
May 10, 2000
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas
New York, NY 10104
Dear Sirs:
This opinion is furnished in connection with the filing of an initial
Registration Statement on Form S-6 ("Registration Statement") of Separate
Account FP ("Separate Account FP") of The Equitable Life Assurance Society of
the United States ("Equitable"). The Registration Statement covers an indefinite
number of units of interest in Separate Account FP ("Units") funding Accumulator
Life (policy form no. 99-100), modified single premium variable life insurance
policies ("Policies") issued by The Equitable Life Assurance Society of the
United States ("Equitable"). Net premiums received under the Policies are
allocated by Equitable to Separate Account FP to the extent directed by owners
of the Policies. Net premiums under other Equitable variable life insurance
policies will also be allocated to Separate Account FP.
I have examined all such corporate records of Equitable and such other
documents and laws as I consider appropriate as a basis for the opinion
hereinafter expressed. On the basis of such examination, it is my opinion that:
1. Equitable is a corporation duly organized and validly existing under
the laws of the State of New York.
2. Separate Account FP has been duly established by Equitable pursuant to
the laws of the State of New York, under which income, gains and losses, whether
or not realized, from assets allocated to Separate Account FP, are to be, in
accordance with the Policies, credited to or charged against Separate Account FP
without regard to other income, gains or losses of Equitable.
3. Assets allocated to Separate Account FP will be owned by Equitable;
Equitable will not be a trustee with respect thereto. The Policies provide that
the portion of the assets of Separate Account FP equal to the reserves and other
Policy liabilities with respect to Separate Account FP will not be chargeable
with liabilities arising out of any other business Equitable may conduct.
Equitable reserves the right to transfer assets of Separate Account FP in excess
of such reserves and other Policy liabilities to the general account of
Equitable.
4. The Policies (including any Units duly credited thereunder) have been
duly authorized and constitute validly issued and binding obligations of
Equitable in accordance with their terms.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Robin M. Wagner
--------------------------
Robin M. Wagner
51510
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10104
May 10, 2000
The Equitable Life Assurance Society
of the United States
1290 Avenue of the Americas
New York, New York 10104
This opinion is furnished in connection with the initial Registration
Statement on Form S-6 ("Registration Statement") of Separate Account FP
("Separate Account FP") of The Equitable Life Assurance Society of the United
States ("Equitable") covering an indefinite number of units of interest in
Separate Account FP under Accumulator Life (policy form No. 99-100), modified
single premium variable life insurance policies ("Policies"). Net premiums
received under the Policies may be allocated to Separate Account FP as described
in the Prospectuses included in the Registration Statement.
I participated in the preparation of the Policies and I am familiar with
their provisions. I am also familiar with the description contained in the
Prospectuses. In my opinion:
1. The Illustration of Policy Benefits (Exhibit No. 9 to the Registration
Statement) (the "Illustration") is consistent with the provisions of the
Policies. The assumptions upon which the Illustration is based, including the
current cost of insurance and expense charges, are stated in the Prospectuses
and are reasonable. The Policies have not been designed so as to make the
relationship between premiums and benefits, as shown in the Illustration, appear
disproportionately more favorable to prospective purchasers of Policies for
males age 48 than to prospective purchasers of Policies for males at other ages
or for females. The particular Illustration shown was not selected for the
purpose of making the relationship appear more favorable.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours
/s/ Barbara Fraser
-------------------------------
Barbara Fraser,
F.S.A., M.A.A.A.
Vice President
The Equitable Life Assurance Society
of the United States
51503-6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectuses contained in this initial
Registration Statement on Form S-6 of (1) our report dated February 1, 2000
relating to the financial statements of The Equitable Life Assurance Society of
the United States Separate Account FP for the year ended December 31, 1999, and
(2) our report dated February 1, 2000 relating to the consolidated financial
statements of The Equitable Life Assurance Society of the United States for the
year ended December 31, 1999, which reports appear in such Prospectuses. We also
consent to the reference to us under the heading "Financial Statements of
Separate Account FP and Equitable Life" in the Prospectuses.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
New York, New York
May 10, 2000
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Francoise Colloc'h
----------------------------------
Francoise Colloc'h
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Norman C. Francis
----------------------------------
Norman C. Francis
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Michael Hegarty
----------------------------------
Michael Hegarty
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Edward Miller
----------------------------------
Edward Miller
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Denis Duverne
----------------------------------
Denis Duverne
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Donald J. Greene
----------------------------------
Donald J. Greene
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ George T. Lowy
----------------------------------
George T. Lowy
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Peter J. Tobin
----------------------------------
Peter J. Tobin
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Joseph L. Dionne
----------------------------------
Joseph L. Dionne
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ John T. Hartley
----------------------------------
John T. Hartley
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ John H.F. Haskell, Jr.
----------------------------------
John H.F. Haskell, Jr.
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
5th day of April, 2000.
/s/ Dave H. Williams
----------------------------------
Dave H. Williams
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Mary B. (Nina) Henderson
----------------------------------
Mary B. (Nina) Henderson
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
4th day of April, 2000.
/s/ George J. Sella, Jr.
----------------------------------
George J. Sella, Jr.
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ W. Edwin Jarmain
----------------------------------
W. Edwin Jarmain
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
13th day of April, 2000.
/s/ Alvin H. Fenichel
----------------------------------
Alvin H. Fenichel
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
13th day of April, 2000.
/s/ Jean-Rene Fourtou
----------------------------------
Jean-Rene Fourtou
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
23rd day of March, 2000.
/s/ Stanley B. Tulin
----------------------------------
Stanley B. Tulin
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
4th day of April, 2000.
/s/ Henri de Castries
----------------------------------
Henri de Castries
Rev. 2/2000
122055
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or
Director of The Equitable Life Assurance Society of the United States (the
"Company"), a New York stock life insurance company, hereby constitutes and
appoints R. Lee Wilson, Anne M. Katcher, Stuart L. Faust, Nik Malvania, Pauline
Sherman, Naomi J. Weinstein, Mary A. Hyland, Maureen K. Wolfson, Mildred Oliver,
Robin Wagner and each of them (with full power to each of them to act alone),
his or her true and lawful attorney-in-fact and agent, with full power of
substitution to each, for him or her and on his or her behalf and in his or her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any
insurance or annuity contracts or other agreements providing for allocation of
amounts to Separate Accounts of the Company, and related units or interests in
Separate Accounts: registration statements on any form or forms under the
Securities Act of 1933 and the Investment Company Act of 1940 and annual reports
on any form or forms under the Securities Exchange Act of 1934, and any and all
amendments and supplements thereto, with all exhibits and all instruments
necessary or appropriate in connection therewith, each of said attorneys-in-fact
and agents and his, her or their substitutes being empowered to act with or
without the others, and to have full power and authority to do or cause to be
done in the name and on behalf of the undersigned each and every act and thing
requisite and necessary or appropriate with respect thereto to be done in and
about the premises in order to effectuate the same, as fully to all intents and
purposes as the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, may do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this
10th day of April, 2000.
/s/ Didier Pineau Valencienne
----------------------------------
Didier Pineau Valencienne
Rev. 2/2000
122055
[GRAPHIC: EQUITABLE LOGO]
- --------------------------------------------------------------------------------
ACCUMULATOR LIFE(SM)
A MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE PLAN
PREPARED FOR
MR. SAMPLE CLIENT
- --------------------------------------------------------------------------------
Presented by
MR. J. BROKER
1234 ANYSTREET
SUITE B
ANYTOWN, NY 11111
PHONE: (111) 222-3333
FAX: (111) 222-4444
- --------------------------------------------------------------------------------
(C)The Equitable Life Assurance Society of the United States May 04, 2000
New York, NY 10104 (212) 314-4600
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 1 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO]
IMPORTANT INFORMATION YOU SHOULD KNOW ABOUT ACCUMULATOR LIFE(SM)
Thank you for your interest in Equitable's Accumulator Life(SM), a modified
single premium variable life insurance policy. Accumulator Life(SM) is designed
to provide you with a Guaranteed Minimum Death Benefit*, and many variable
investment funding options.
[X] The following pages contain illustrations of death benefits, policy account
values, and cash surrender values that are designed to show you how the
performance of the variable investment options available with Accumulator Life
could affect the cash surrender value and death benefit of your policy. These
columns of numbers use hypothetical investment return assumptions, and are not
intended as estimates of future performance of the investment option selected.
As with any life insurance policy that utilizes variable investment options,
Equitable is not able to predict the future performance of these investment
options.
[X] ABOUT THE GUARANTEED MINIMUM DEATH BENEFIT:*
As reflected in this illustration, your policy's Guaranteed Minimum Death
Benefit (GMDB) is equal to the initial premium adjusted for any partial
withdrawals. Your policy's death benefit will never be less than the GMDB,
regardless of investment performance, as long as any outstanding loan plus
accrued loan interest does not exceed the cash surrender value. The amount of
any outstanding loan and loan interest will be deducted from any death benefit
proceeds we pay. The Policy will lapse at the point at which the loan exceeds
the policy's cash surrender value.
[X] IMPORTANT TAX INFORMATION:
Your policy will be a Modified Endowment Contract (MEC) unless it is issued
pursuant to a Section 1035 Exchange under the Internal Revenue Code of a policy
that is not a MEC and there is no reduction in benefits that would have caused
your prior policy to become a MEC. A MEC classification affects the tax status
of any distributions, including loans taken from the policy. There are many
implications concerning MEC status that are more fully explained along with
other tax information in the "Important Tax Information" section of this
illustration and the tax section of your prospectus.
You may also wish to consult your tax advisor.
[X] PROSPECTUS HIGHLIGHTS
Please consult your prospectus for more complete information about
Accumulator Life including the following topics:
o Your Death Benefit
o Making Loans and Withdrawals from Your Policy
o Charges and Fees related to your Accumulator Life policy
o Available Investment Options
o Investment Strategies of the Investment Options
o Tax Information Including Treatment of Distributions
[X] This illustration must be preceded or accompanied by the current Accumulator
Life Prospectus, which contains more complete information including fees and
charges. Read the prospectus carefully before you invest or send money.
ACCUMULATOR LIFE IS ISSUED BY THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED
STATES (EQUITABLE), AND IS DISTRIBUTED BY AXA ADVISORS, LLC, NEW YORK, NY 10104
(212) 554-1234. ACCUMULATOR LIFE IS A REGISTERED SERVICE MARK OF THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
* MAY NOT BE AVAILABLE IN ALL JURISDICTIONS. CERTAIN RESTRICTIONS APPLY.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 2 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO]
ACCUMULATOR LIFE(SM)
MODIFIED SINGLE PREMIUM VARIABLE LIFE ASSUMPTIONS
- ------------------------------------- -----------------------------------
Prepared for: Mr. Sample Client Initial Premium: $75,000
Requested by: Mr. J. Broker Delivery State: NY
Dated prepared: May 4, 2000 Sex: M Age: 48
Initial Death Benefit: $196,800
- ------------------------------------- -----------------------------------
<TABLE>
ILLUSTRATION OF POLICY VALUES AND BENEFITS
ASSUMING CURRENT CHARGES AND A HYPOTHETICAL
GROSS RATE OF RETURN OF 10.00% (7.52% NET)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Foot End of Year Age Withdrawal Annual Loan Total Loan Taxes on Net Policy Net Cash Net Death
Note Loans/Withdrawals Account Surrender Value Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 49 0 0 0 0 $79,344 71,844 208,197
2 50 0 0 0 0 83,915 76,790 213,731
3 51 0 0 0 0 88,724 81,974 219,326
4 52 0 0 0 0 93,777 87,402 225,065
5 53 0 0 0 0 99,081 93,081 230,957
6 54 0 0 0 0 104,639 99,389 237,007
7 55 0 0 0 0 110,471 106,721 243,146
8 56 0 0 0 0 116,627 114,377 249,583
9 57 0 0 0 0 123,127 122,377 256,351
10 58 0 0 0 0 129,990 129,990 263,489
11 59 0 0 0 0 137,234 137,234 270,900
12 60 0 0 0 0 144,883 144,883 278,610
13 61 0 0 0 0 152,957 152,957 286,489
14 62 0 0 0 0 161,482 161,482 294,867
15 63 0 0 0 0 170,482 170,482 303,629
16 64 0 0 0 0 179,984 179,984 312,811
17 65 0 0 0 0 190,015 190,015 322,455
18 66 0 0 0 0 200,605 200,605 332,602
19 67 0 0 0 0 211,785 211,785 343,303
20 68 0 0 0 0 223,588 223,588 354,387
21 69 0 0 0 0 236,049 236,049 366,113
22 70 0 0 0 0 249,205 249,205 378,543
23 71 0 0 0 0 263,094 263,094 391,484
24 72 0 0 0 0 277,757 277,757 404,970
25 73 0 0 0 0 293,237 293,237 419,329
26 74 0 0 0 0 309,580 309,580 434,341
27 75 0 0 0 0 326,834 326,834 450,377
28 76 0 0 0 0 345,049 345,049 467,542
29 77 0 0 0 0 364,280 364,280 485,585
30 78 0 0 0 0 384,582 384,582 504,572
</TABLE>
This is not an illustration of actual performance. Values shown are not
guaranteed. This page must be accompanied by an illustration of policy
performance assuming guaranteed charges and a hypothetical gross annual
investment return of 0%. See the "Important Information You Should Know," the
"Applicable Footnotes," and the "Notes to Illustration" pages for an explanation
of rates of return, figures shown, and other important policy and tax
information. This sales illustration assumes the proposed owner is in a 28%
income tax bracket, with other assumptions as stated and if the policy is a MEC
and the policy owner is under age 59-1/2, it reflects a 10% federal tax penalty
on the taxable amount of any loan/withdrawal. This presentation must be preceded
or accompanied by a prospectus containing detailed information about Accumulator
Life including further tax information, and expenses.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 3 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO]
ACCUMULATOR LIFE(SM)
MODIFIED SINGLE PREMIUM VARIABLE LIFE ASSUMPTIONS
- ------------------------------------- -----------------------------------
Prepared for: Mr. Sample Client Initial Premium: $75,000
Requested by: Mr. J. Broker Delivery State: NY
Dated prepared: May 4, 2000 Sex: M Age: 48
Initial Death Benefit: $196,800
- ------------------------------------- -----------------------------------
<TABLE>
ILLUSTRATION OF POLICY VALUES AND BENEFITS
ASSUMING CURRENT CHARGES AND A HYPOTHETICAL
GROSS RATE OF RETURN OF 10.00% (7.52% NET)
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Foot End of Year Age Withdrawal Annual Loan Total Loan Taxes on Net Policy Net Cash Net Death
Note Loans/Withdrawals Account Surrender Value Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31 79 0 0 0 0 406,016 406,016 524,573
32 80 0 0 0 0 428,645 428,645 546,093
33 81 0 0 0 0 452,534 452,534 568,383
34 82 0 0 0 0 477,755 477,755 591,939
35 83 0 0 0 0 504,382 504,382 616,859
36 84 0 0 0 0 532,493 532,493 643,251
37 85 0 0 0 0 562,170 562,170 671,231
38 86 0 0 0 0 593,501 593,501 700,925
39 87 0 0 0 0 626,579 626,579 732,471
40 88 0 0 0 0 661,500 661,500 766,017
41 89 0 0 0 0 698,367 698,367 801,726
42 90 0 0 0 0 737,289 737,289 839,035
43 91 0 0 0 0 778,381 778,381 878,013
44 92 0 0 0 0 821,762 821,762 918,730
45 93 0 0 0 0 867,561 867,561 961,258
46 94 0 0 0 0 915,913 915,913 1,005,672
47 95 0 0 0 0 966,959 966,959 1,051,085
48 96 0 0 0 0 1,020,851 1,020,851 1,096,394
49 97 0 0 0 0 1,077,746 1,077,746 1,143,488
50 98 0 0 0 0 1,137,811 1,137,811 1,191,289
51 99 0 0 0 0 1,201,225 1,201,225 1,242,067
52 100 0 0 0 0 1,268,173 1,268,173 1,299,877
</TABLE>
This is not an illustration of actual performance. Values shown are not
guaranteed. This page must be accompanied by an illustration of policy
performance assuming guaranteed charges and a hypothetical gross annual
investment return of 0%. See the "Important Information You Should Know," the
"Applicable Footnotes," and the "Notes to Illustration" pages for an explanation
of rates of return, figures shown, and other important policy and tax
information. This sales illustration assumes the proposed owner is in a 28%
income tax bracket, with other assumptions as stated and if the policy is a MEC
and the policy owner is under age 59-1/2, it reflects a 10% federal tax penalty
on the taxable amount of any loan/withdrawal. This presentation must be preceded
or accompanied by a prospectus containing detailed information about Accumulator
Life including further tax information, and expenses.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 4 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO]
ACCUMULATOR LIFE(SM)
MODIFIED SINGLE PREMIUM VARIABLE LIFE ASSUMPTIONS
- ------------------------------------- -----------------------------------
Prepared for: Mr. Sample Client Initial Premium: $75,000
Requested by: Mr. J. Broker Delivery State: NY
Dated prepared: May 4, 2000 Sex: M Age: 48
Initial Death Benefit: $196,800
- ------------------------------------- -----------------------------------
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES AND BENEFITS
- ------------------------------------------------------------------------------------------------------------------------------------
ASSUMING GUARANTEED CHARGES ASSUMING GUARANTEED CHARGES ASSUMING GUARANTEED CHARGES
AND A HYPOTHETICAL GROSS AND A HYPOTHETICAL GROSS AND A HYPOTHETICAL GROSS
RATE OF RETURN OF 0.00% RATE OF RETURN OF 6.00% RATE OF RETURN OF 10.00%
(-2.26% NET) (3.61% NET) (7.52% NET)
- ------------------------------------------------------------------------------------------------------------------------------------
FOOT END OF AGE LOAN/ NET POLICY NET CASH NET DEATH NET POLICY NET CASH NET DEATH NET POLICY NET CASH NET DEATH
NOTE YEAR WITHDRAWAL ACCOUNT SURRENDER BENEFITS ACCOUNT SURRENDER BENEFIT ACCOUNT SURRENDER BENEFIT
VALUE VALUE VALUE VALUE VALUE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 49 0 71,913 64,413 188,701 76,229 68,729 200,024 79,106 71,606 207,573
2 50 0 68,934 61,809 175,576 77,456 70,331 197,280 83,412 76,287 212,451
3 51 0 66,060 59,310 163,300 78,680 71,930 194,497 87,929 81,179 217,360
4 52 0 63,283 56,908 151,880 79,896 73,521 191,751 92,658 86,283 222,378
5 53 0 60,601 54,601 141,261 81,101 75,101 189,046 97,605 91,605 227,516
6 54 0 58,007 52,757 131,387 82,288 77,038 186,382 102,771 97,521 232,776
7 55 0 55,498 51,748 122,152 83,453 79,703 183,680 108,159 104,409 238,058
8 56 0 53,073 50,823 113,576 84,595 82,345 181,034 113,777 111,527 243,484
9 57 0 50,730 49,980 105,619 85,713 84,963 178,453 119,631 118,881 249,072
10 58 0 48,469 48,469 98,247 86,807 86,807 175,957 125,731 125,731 254,857
11 59 0 46,290 46,290 91,376 87,879 87,879 173,472 132,087 132,087 260,740
12 60 0 44,190 44,190 84,978 88,927 88,927 171,007 138,707 138,707 266,734
13 61 0 42,169 42,169 78,982 89,951 89,951 168,478 145,600 145,600 272,709
14 62 0 40,216 40,216 75,000 90,944 90,944 166,064 152,763 152,763 278,945
15 63 0 38,244 38,244 75,000 91,901 91,901 163,675 160,196 160,196 285,309
16 64 0 36,227 36,227 75,000 92,814 92,814 161,311 167,894 167,894 291,801
17 65 0 34,149 34,149 75,000 93,680 93,680 158,975 175,856 175,856 298,428
18 66 0 31,993 31,993 75,000 94,495 94,495 156,672 184,080 184,080 305,205
19 67 0 29,744 29,744 75,000 95,260 95,260 154,416 192,573 192,573 312,161
20 68 0 27,382 27,382 75,000 95,979 95,979 152,126 201,350 201,350 319,139
21 69 0 24,887 24,887 75,000 96,654 96,654 149,910 210,419 210,419 326,359
22 70 0 22,231 22,231 75,000 97,283 97,283 147,773 219,781 219,781 333,848
23 71 0 19,378 19,378 75,000 97,863 97,863 145,619 229,435 229,435 341,399
24 72 0 16,279 16,279 75,000 98,387 98,387 143,448 239,339 239,369 349,000
25 73 0 12,870 12,870 75,000 98,843 98,843 141,345 249,554 249,554 356,863
26 74 0 9,070 9,070 75,000 99,222 99,222 139,209 259,967 259,967 364,733
27 75 0 4,790 4,790 75,000 99,517 99,517 137,134 270,580 270,580 372,859
E 28 76 0 0 0 75,000 99,725 99,725 135,127 281,378 281,378 381,267
E 29 77 0 0 0 75,000 99,853 99,853 133,105 292,374 292,374 389,734
E 30 78 0 0 0 75,000 99,915 99,915 131,088 303,594 303,594 398,316
</TABLE>
This is not an illustration of actual performance. Values shown are not
guaranteed. See the "Important Information You Should Know," the
"Applicable Footnotes," and the "Notes to Illustration" pages for an explanation
of rates of return, figures shown, and other important policy and tax
information. This presentation must be preceded or accompanied by a prospectus
containing detailed information about Accumulator Life including further tax
information, and expenses.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 5 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO]
ACCUMULATOR LIFE(SM)
MODIFIED SINGLE PREMIUM VARIABLE LIFE ASSUMPTIONS
- ------------------------------------- -----------------------------------
Prepared for: Mr. Sample Client Initial Premium: $75,000
Requested by: Mr. J. Broker Delivery State: NY
Dated prepared: May 4, 2000 Sex: M Age: 48
Initial Death Benefit: $196,800
- ------------------------------------- -----------------------------------
<TABLE>
<CAPTION>
ILLUSTRATION OF POLICY VALUES AND BENEFITS
- ------------------------------------------------------------------------------------------------------------------------------------
ASSUMING GUARANTEED CHARGES ASSUMING GUARANTEED CHARGES ASSUMING GUARANTEED CHARGES
AND A HYPOTHETICAL GROSS AND A HYPOTHETICAL GROSS AND A HYPOTHETICAL GROSS
RATE OF RETURN OF 0.00% RATE OF RETURN OF 6.00% RATE OF RETURN OF 10.00%
(-2.26% NET) (3.61% NET) (7.52% NET)
- ------------------------------------------------------------------------------------------------------------------------------------
FOOT END OF AGE LOAN/ NET POLICY NET CASH NET DEATH NET POLICY NET CASH NET DEATH NET POLICY NET CASH NET DEATH
NOTE YEAR WITHDRAWAL ACCOUNT SURRENDER BENEFITS ACCOUNT SURRENDER BENEFIT ACCOUNT SURRENDER BENEFIT
VALUE VALUE VALUE VALUE VALUE VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
E 31 79 0 0 0 75,000 99,922 99,922 129,099 315,074 315,806 407,076
E 32 80 0 0 0 75,000 99,873 99,873 127,238 326,806 326,806 416,351
E 33 81 0 0 0 75,000 99,777 99,777 125,320 338,813 338,813 425,550
E 34 82 0 0 0 75,000 99,629 99,629 123,440 351,079 351,079 434,987
E 35 83 0 0 0 75,000 99,419 99,419 121,590 363,563 363,563 444,638
E 36 84 0 0 0 75,000 99,139 99,139 119,759 376,219 376,219 454,472
E 37 85 0 0 0 75,000 98,785 98,785 117,949 389,025 389,025 464,495
E 38 86 0 0 0 75,000 98,363 98,363 116,167 401,982 401,982 474,740
E 39 87 0 0 0 75,000 97,881 97,881 114,423 415,109 415,109 485,263
E 40 88 0 0 0 75,000 97,348 97,348 112,729 428,431 428,431 496,123
E 41 89 0 0 0 75,000 96,771 96,771 111,093 441,962 441,962 507,373
E 42 90 0 0 0 75,000 96,173 96,173 109,445 455,809 455,809 518,710
E 43 91 0 0 0 75,000 95,577 95,577 107,811 470,083 470,083 530,253
E 44 92 0 0 0 75,000 95,005 95,005 106,216 484,903 484,903 542,121
E 45 93 0 0 0 75,000 94,471 94,471 104,674 500,376 500,376 554,417
E 46 94 0 0 0 75,000 93,985 93,985 103,195 516,587 516,587 567,212
E 47 95 0 0 0 75,000 93,560 93,560 101,700 533,662 533,662 580,091
E 48 96 0 0 0 75,000 93,226 93,226 100,124 551,821 551,821 592,656
E 49 97 0 0 0 75,000 92,904 92,904 98,571 570,669 570,669 605,480
E 50 98 0 0 0 75,000 92,498 92,498 96,845 589,622 589,622 617,334
E 51 99 0 0 0 75,000 91,719 91,719 94,838 606,723 606,723 627,351
E 52 100 0 0 0 75,000 91,771 91,771 94,066 629,978 629,978 645,727
</TABLE>
This is not an illustration of actual performance. Values shown are not
guaranteed. See the "Important Information You Should Know," the "Applicable
Footnotes," and the "Notes to Illustration" pages for an explanation of rates of
return, figures shown, and other important policy and tax information. This
presentation must be preceded or accompanied by a prospectus containing detailed
information about Accumulator Life including further tax information, and
expenses.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 6 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO] ACCUMULATOR LIFE(SM)
APPLICABLE FOOTNOTES PAGE
FOOTNOTES ARE ILLUSTRATED IN ORDER OF OCCURRENCE FOR THE RANGE OF YEARS FOR
WHICH THEY ARE APPLICABLE
ASSUMING GUARANTEED CHARGES
Footnote: E 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44,
45, 46, 47, 48, 49, 50, 51, 52
FOOTNOTE: EXPLANATION OF FOOTNOTE(S) USED IN THIS ILLUSTRATION:
E WHERE ZERO NET CASH SURRENDER VALUE IS SHOWN, THE POLICY IS BEING KEPT
IN-FORCE UNDER THE GUARANTEED MINIMUM DEATH BENEFIT PROVISION.
We charge on a current basis a percentage of the Policy Account value for cost
of insurance. This charge will never exceed the maximum guaranteed cost based on
the net amount at risk. The net amount at risk is based on the difference
between the death benefit and the policy account value. The use of a percentage
of the Policy Account is done for simplicity and may not always bear a close
relationship to the actual cost of producing the coverage. Changes in this
insurance charge will be based on our expectations of future investment
earnings, mortality, persistency, expenses and taxes. Such changes may also be
affected by past investment performance to the extent that it affects our
expectations as to the future insurance risk. For example, we may increase the
percentage of Policy Account value used in determining the insurance charge
solely as a result of poor past investment performance. Policy loan interest
accrues daily at an annual interest rate of 6%. You have a right to examine your
policy and if for any reason you are not satisfied with it, you may cancel it by
returning this policy with a written request for cancellation sent to our
administrative offices by the 10th day after you receive the policy. If you do
this, we will refund the premium that was paid, minus any policy loan and
accrued loan interest.
BASED ON OUR UNDERSTANDING OF THE CURRENT TAX LAWS, THE POLICY ILLUSTRATED HERE
IS A MODIFIED ENDOWMENT CONTRACT (MEC).
THIS ILLUSTRATION ASSUMES A CLIENT 28% INCOME TAX BRACKET, WITH OTHER
ASSUMPTIONS AS STATED.
See the "Important Information You should Know," the "Applicable Footnotes" and
the "Notes to Illustration" pages for an explanation of rates of return,
figures shown, and other important policy and tax information. This
presentation must be preceded or accompanied by a prospectus containing detailed
information about Accumulator Life including further tax information and
expenses. This is an illustration only, and is not intended to predict actual
performance. Values set forth are not guaranteed.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 7 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO] ACCUMULATOR LIFE(SM)
NOTES TO ILLUSTRATION
You may request an illustration that assumes a hypothetical investment return
ranging from 6.01% to 12.00%. The illustrations are based on hypothetical
constant rates of return and do not illustrate the fluctuations in Death
Benefit, Policy Account Values, and Cash Surrender Value that can occur in an
actual policy. Values shown are not guaranteed. Because the values of the
variable investment options vary up and down, the insurance benefits of this
policy will also vary.
Policy values, death benefits, and ages shown are as of the end of the policy
year. All loans and withdrawals are assumed to be taken at the beginning of the
policy year. Monthly charges are deducted from the Policy Account until age 100.
SURRENDER CHARGE: The difference between the Net Policy Account and the Net Cash
Value is a Surrender Charge. A Surrender Charge will apply during the first 9
years if the policy is terminated, surrendered or a withdrawal is taken in
excess of 15% of the unloaned Policy Account value at the end of the previous
year. See the prospectus for details.
The "ASSUMING CURRENT CHARGES" illustration is based upon the current policy
charges and current interest rates on loan amounts as declared by the Equitable
Life Assurance Society's Board of Directors, and applicable to policies issued
as of the preparation date shown below. "Current charges" and current interest
rates on loaned amounts are not guaranteed and may be changed at the discretion
of the Board of Directors.
The "ASSUMING GUARANTEED CHARGES" illustration uses the guaranteed maximum
charges.
NET RATES OF RETURN SHOWN ON THE ILLUSTRATION take into consideration an assumed
daily charge equivalent to an annual charge of .63% for investment advisory
services (management fee), .33% for other estimated Trust expenses (including
12b-1 distribution fees), plus the daily charge for mortality and expense risks.
The actual charge for advisory services varies with the investment option
selected, and current ranges from .25% to 1.15%. The actual charge for Trust
expenses varies with the investment option selected, and currently ranges from
.25% to .60%. The charge for mortality and expense risks is equivalent to an
annual charge of 1.35%. The illustration also reflects that no charge is
currently made to the Separate Account for Federal income taxes.
IMPORTANT TAX INFORMATION AND INFORMATION ON POLICY LOANS AND WITHDRAWALS:
Unless your policy was acquired solely as a result of a tax free exchange under
Internal Revenue Code Section 1035 of another life policy which was not itself a
modified endowment contract (a "MEC"), your policy will be classified as a MEC.
A MEC classification affects the tax status of any distributions taken from the
policy. Distributions taken from a MEC policy (loans or partial withdrawals)
will first be taxed as ordinary income to the extent your policy has a gain,
that is, the policy account value exceeds your tax basis in your policy. Any
amount withdrawn in excess of the gain will be considered an income tax free
return of premiums paid and will reduce your remaining tax basis in your policy.
You will also be subject to tax on any gain in your policy upon a surrender of
the policy. If the policy owner is under age 59-1/2, a 10% penalty tax will
generally be imposed by the IRS on the taxable amount of gain due to any loan,
partial withdrawal or surrender. See the tax section of your prospectus for
further important tax information.
[GRAPHIC: ELDERLY COUPLE]
If you acquired your policy solely as a result of a tax-free exchange of another
policy which was not itself a MEC, your new policy will generally not be
considered a modified endowment contract (a "MEC"). Certain exceptions may apply
where the death benefit provided under your new policy results in a reduction of
benefits which would have caused your old policy to have become a MEC. For
contracts which are not classified as MEC's, under current Federal tax rules,
during the first fifteen years of policy, a partial withdrawal will generally be
taxable to the extent there is gain in the policy. That is, to the extent, your
policy account value exceeds your tax basis in the contract. After 15 years,
partial withdrawals will generally be income tax free up to your basis in the
contract. Your basis will generally be equal to premiums paid less cumulative
amounts received income tax-free. Because your contract would have been acquired
under an exchange of another life contract, the tax basis is carried over from
your former policy. Loans you take will be free of current income tax as long as
the policy remains in effect until the insured's death, does not lapse or
mature, and does not become a MEC. This assumes the loan will eventually be
satisfied from income tax-free death proceeds. See the tax section of your
prospectus for further important tax information.
Loans and withdrawals reduce the policy's cash value and death benefit and loans
increase the chance that the policy may lapse. If the policy lapses or is
surrendered, the loan balance at such time would generally be viewed as
distributed and taxable under the general rules for distributions of policy cash
values. A policy loan will have a permanent effect on benefits under an
Accumulator Life policy. The loaned amount is not available for investment in
the Separate Account investment options. Variable investment returns apply only
to the unloaned portion of the policy account. The Net Policy Account, Net Cash
Surrender Value and the Net Death Benefit shown are net of policy loans and
withdrawals.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 8 OF 9
<PAGE>
[GRAPHIC: EQUITABLE LOGO] ACCUMULATOR LIFE(SM)
IMPORTANT CONFIRMATIONS
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
1290 AVENUE OF THE AMERICAS, NEW YORK, NY 10104
212-554-1234
PREPARED FOR: MR. SAMPLE CLIENT
POLICY#(IF KNOWN):________________________
I UNDERSTAND THAT EQUITABLE IS RELYING ON ME TO CONFIRM THE FOLLOWING
INFORMATION IN ISSUING THIS POLICY.
____ I intend to replace (lapse, exchange, change, surrender, withdraw or borrow
from) an existing policy [[ ] Yes [ ] No] or annuity contract in connection
with purchasing this policy. I have provided information about the existing
policy or annuity contract on the application as required.
____ I have received a copy of all 9 pages of this illustration. I have reviewed
the illustration and understand:
o Its purpose is to help me understand how the policy works.
o That actual policy values will be different from those shown.
o This illustration is not part of the insurance contract.
o That any non-guaranteed elements illustrated are subject to change and
could be higher or lower and that policy values will be affected by
loans or withdrawals or other policy changes that I make.
____ I acknowledge that the policy I am purchasing will be a Modified Endowment
Contract (MEC)
I UNDERSTAND THAT IF THE INFORMATION ON THIS ILLUSTRATION DOES
NOT CONFORM TO THE POLICY THAT IS ULTIMATELY ISSUED, FOR EXAMPLE,
THE AMOUNT OF THE PREMIUM IS DIFFERENT, I WILL RECEIVE A NEW
ILLUSTRATION THAT MATCHES THE POLICY.
_______________________________________ ____________________
Signature of Applicant Date
_______________________________________ ____________________
Signature of Policyowner, if different Date
____ I certify that this illustration has been presented to the applicant and
that I have explained that any non-guaranteed elements illustrated are
subject to change. I have made no statements that are inconsistent with
the illustration.
The illustration presented to the applicant [ [ ] does [ ] does not ]
conform to the policy as applied for.
J. BROKER ___________________________________ ____________ ____________
Signature of Financial Professional Code Date
1234 ANYSTREET
SUITE B
ANYTOWN, NY 11111
PLEASE REFER TO THE PROSPECTUS FOR A COMPLETE LISTING OF POLICY CHANGES. FOR
QUESTIONS REGARDING THIS ACCUMULATOR LIFE
ILLUSTRATION, PLEASE CONTACT YOUR FINANCIAL PROFESSIONAL.
Accumulator Life is issued by The Equitable Life Assurance Society of the United
States (Equitable), and is distributed by AXA Advisors, LLC, New York, NY 10104,
(212) 554-1234. Accumulator Life is policy form 99-100 in most jurisdictions.
THIS ILLUSTRATION IS NOT COMPLETE WITHOUT ALL NUMBERED PAGES.
VLI-99-19(5/2000) Date prepared: 5/4/2000 v4.05 Quote ID: 20000504900013
PAGE 9 OF 9
