As filed with the SEC on . Registration No. 2-99537
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-6
Post-Effective Amendment No. 19
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
----------
PRUCO LIFE OF NEW JERSEY
SINGLE PREMIUM
VARIABLE LIFE ACCOUNT
(Exact Name of Trust)
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Name of Depositor)
213 Washington Street
Newark, New Jersey 07102-2992
(800) 445-4571
(Address and telephone number of principal executive offices)
----------
Thomas C. Castano
Assistant Secretary
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
(Name and address of agent for service)
Copy to:
Jeffrey C. Martin
Shea & Gardner
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
----------
Flexible Premium Variable Life Insurance Contracts The Registrant has registered
an indefinite amount of securities pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Rule 24f-2 notice for fiscal year 1994 was filed on
February 27, 1995.
It is proposed that this filing will become effective (check appropriate space):
|_| immediately upon filing pursuant to paragraph (b) of Rule 485
|X| on May 1, 1995 pursuant to paragraph (b) of Rule 485
(date)
|_| 60 days after filing pursuant to paragraph (a) of Rule 485
|_| on _________ pursuant to paragraph (a) of Rule 485
(date)
<PAGE>
CROSS REFERENCE SHEET
(as required by Form N-8B-2)
N-8B-2 Item Number Location
------------------ --------
1. Cover Page
2. Cover page
3. Not Applicable
4. Sale of the Contract and Sales Commissions
5. Pruco Life of New Jersey Single Premium Variable Life
Account
6. Pruco Life of New Jersey Single Premium Variable Life
Account
7. Not Applicable
8. Not Applicable
9. Litigation
10. Brief Description of the Contract; Short-Term
Cancellation Right or "Free Look"; Pruco Life of New
Jersey Single Premium Variable Life Account; Transfers;
Surrenders; Loans; Amount of Life Insurance; Lapse and
Reinstatement; When Proceeds are Paid; Voting Rights;
Substitution of Series Fund Shares
11. Brief Description of the Contract; Pruco Life of New
Jersey Single Premium Variable Life Account; Amount of
Life Insurance
12. Not Applicable
13. Brief Description of the Contract; Charges; Allocation of
the Premium Payment; Additional Premium Payments; Sale of
the Contract and Sales Commissions
14. Brief Description of the Contract; Short-Term
Cancellation Right or "Free Look"; Requirements for
Issuance of a Contract
15. Brief Description of the Contract; Allocation of the
Premium Payment; Additional Premium Payments
16. Cover Page; Brief Description of the Contract; General
Information About Pruco Life Insurance Company of New
Jersey, Pruco Life of New Jersey Single Premium Variable
Life Account, and The Variable Investment Options
Available Under the Contract
17. Transfers; Surrenders; When Proceeds are Paid
18. Brief Description of the Contract; Pruco Life of New
Jersey Single Premium Variable Life Account; Amount of
Life Insurance
19. Reports to Contract Owners
20. Not Applicable
21. Loans
22. Not Applicable
<PAGE>
N-8B-2 Item Number Location
------------------ --------
23. Not Applicable
24. Other General Contract Provisions
25. Pruco Life Insurance Company of New Jersey
26. Charges
27. Pruco Life Insurance Company of New Jersey; The
Prudential Series Fund, Inc.
28. Pruco Life Insurance Company of New Jersey; Directors and
Officers
29. Pruco Life Insurance Company of New Jersey
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. Pruco Life Insurance Company of New Jersey
36. Not Applicable
37. Not Applicable
38. Sale of the Contract and Sales Commissions
39. Sale of the Contract and Sales Commissions
40. Not Applicable
41. Sale of the Contract and Sales Commissions
42. Not Applicable
43. Not Applicable
44. Brief Description of the Contract; The Prudential Series
Fund, Inc.; Charges; Pruco Life of New Jersey Single
Premium Variable Life Account; Amount of Life Insurance;
Additional Premium Payments
45. Not Applicable
46. Brief Description of the Contract; Pruco Life of New
Jersey Single Premium Variable Life Account; The
Prudential Series Fund, Inc.
47. Pruco Life of New Jersey Single Premium Variable Life
Account
48. Not Applicable
49. Not Applicable
50. Not Applicable
51. Not Applicable
52. Substitution of Series Fund Shares
53. Federal Tax Status
<PAGE>
N-8B-2 Item Number Location
------------------ --------
54. Not Applicable
55. Not Applicable
56. Not Applicable
57. Not Applicable
58. Not Applicable
59. Financial Statements; Financial Statements of Pruco Life
of New Jersey Single Premium Variable Life Account;
Financial Statements of Pruco Life Insurance Company of
New Jersey
<PAGE>
PART I
INFORMATION REQUIRED IN PROSPECTUS
<PAGE>
PROSPECTUS
May 1, 1995
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
SINGLE PREMIUM VARIABLE LIFE ACCOUNT
VARIABLE LIFE INSURANCE CONTRACTS
This prospectus describes the Discovery(SM) Life Plus Contract*, a variable life
insurance contract (the "Contract") issued by Pruco Life Insurance Company of
New Jersey ("Pruco Life of New Jersey"), a stock life insurance company that is
an indirect wholly-owned subsidiary of The Prudential Insurance Company of
America ("The Prudential"). The Contract requires payment of a premium of at
least $10,000 upon issuance.
The Contract provides lifetime insurance coverage, as long as the Contract is
not surrendered or in default beyond its days of grace, and also provides a cash
surrender value if the Contract is surrendered during the insured's lifetime.
The death benefit will be the face amount of insurance stated in the Contract or
under certain circumstances a higher amount. The cash surrender value of the
Contract varies daily to reflect investment performance, and the imposition of
charges. There is no guaranteed minimum cash surrender value, and if investment
performance is sufficiently poor for a sufficiently long time, the cash
surrender value could decline to zero.
Following a deduction for applicable premium taxes, the premium payment will be
allocated as the owner directs in one or more of the following ways. It may be
allocated to one or more of the subaccounts of the Pruco Life of New Jersey
Single Premium Variable Life Account (the "Account"), to a fixed-rate option or
to a real estate investment option funded by another separate account of Pruco
Life of New Jersey. The assets of each subaccount will be invested in a
corresponding portfolio of The Prudential Series Fund, Inc. (the "Series Fund").
The attached prospectus for the Series Fund and the Series Fund's statement of
additional information describe the investment objectives of and risks of
investing in the sixteen portfolios of the Series Fund currently available to
Contract owners: the Money Market Portfolio, the Bond Portfolio, the Government
Securities Portfolio, three Zero Coupon Bond Portfolios with different
liquidation dates 1995 (not available for investment after November 14, 1995),
2000, and 2005, the Conservatively Managed Flexible Portfolio, the Aggressively
Managed Flexible Portfolio, the High Yield Bond Portfolio, the Stock Index
Portfolio, the High Dividend Stock Portfolio, the Common Stock Portfolio, the
Growth Stock Portfolio, the Small Capitalization Stock Portfolio, the Global
Equity Portfolio, and the Natural Resources Portfolio. Interest is credited
daily upon any portion of the premium payment allocated to the fixed-rate option
at a rate periodically declared by Pruco Life of New Jersey in its sole
discretion. Selection of the real estate investment option involves allocation
of part or all of the premium payment to the Pruco Life of New Jersey Variable
Contract Real Property Account (the "Real Property Account"), a separate account
of Pruco Life of New Jersey that, through a partnership, invests primarily in
income-producing real property. The Real Property Account is described in a
prospectus that is attached to this one. This prospectus describes the Contract
generally and the Pruco Life of New Jersey Single Premium Variable Life Account.
The Contract is a Modified Endowment Contract under federal tax law. Any policy
loan, surrender or other pre-death distribution may result in adverse tax
consequences, and, if the insured is less than age 59 1/2, a 10% tax penalty.
---------------------------
This prospectus provides information a prospective investor should know before
deciding to purchase a Contract. It may not be advantageous to replace existing
insurance with a Contract described in this prospectus, and if a prospective
investor already owns a flexible premium life insurance contract, the benefits
and costs of purchasing additional insurance under the existing Contract should
be compared with the benefits and costs of purchasing the Contract described
herein. In making this comparison, a qualified tax advisor should be consulted.
---------------------------
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ATTACHED TO
A CURRENT PROSPECTUS FOR THE PRUDENTIAL SERIES FUND, INC. IT IS ALSO ATTACHED TO
A CURRENT PROSPECTUS FOR THE PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL
PROPERTY ACCOUNT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 445-4571
*Discovery is a service mark of The Prudential.
SPVL-2 Ed 5-95
Catalog No. 640168Y
<PAGE>
PROSPECTUS CONTENTS
Page
DEFINITIONS OF SPECIAL TERMS USED IN THIS
PROSPECTUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
BRIEF DESCRIPTION OF THE CONTRACT . . . . . . . . . . . . . . . . . . . . 2
GENERAL INFORMATION ABOUT PRUCO LIFE
INSURANCE COMPANY OF NEW JERSEY,
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM
VARIABLE LIFE ACCOUNT, AND THE VARIABLE
INVESTMENT OPTIONS AVAILABLE UNDER THE
CONTRACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Pruco Life Insurance Company of New Jersey. . . . . . . . . . . . . . . 4
Pruco Life of New Jersey Single Premium
Variable Life Account. . . . . . . . . . . . . . . . . . . . . . . 4
The Prudential Series Fund, Inc . . . . . . . . . . . . . . . . . . . . 4
Pruco Life of New Jersey Variable Contract Real
Property Account . . . . . . . . . . . . . . . . . . . . . . . . . 6
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT
OWNERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Requirements for Issuance of a Contract . . . . . . . . . . . . . . . . 6
Short-Term Cancellation Right or "Free Look". . . . . . . . . . . . . . 6
Allocation of the Premium Payment . . . . . . . . . . . . . . . . . . . 6
Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Surrenders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Amount of Life Insurance. . . . . . . . . . . . . . . . . . . . . . . . 10
Lapse and Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . 11
Additional Premium Payments . . . . . . . . . . . . . . . . . . . . . . 11
Living Needs Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Illustrations of Cash Surrender Values, Death
Benefits, and Accumulated Premiums . . . . . . . . . . . . . . . . 12
When Proceeds Are Paid. . . . . . . . . . . . . . . . . . . . . . . . . 14
Reports to Contract Owners. . . . . . . . . . . . . . . . . . . . . . . 14
Federal Tax Status. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Fixed-Rate Option . . . . . . . . . . . . . . . . . . . . . . . . . 15
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Sale of the Contract and Sales Commissions. . . . . . . . . . . . . . . 16
Substitution of Series Fund Shares. . . . . . . . . . . . . . . . . . . 17
Legal Considerations Relating to Sex-Distinct
Premiums and Benefits. . . . . . . . . . . . . . . . . . . . . . . 17
Other General Contract Provisions . . . . . . . . . . . . . . . . . . . 17
State Regulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 17
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 18
DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . . 19
FINANCIAL STATEMENTS OF PRUCO LIFE OF
NEW JERSEY SINGLE PREMIUM VARIABLE
LIFE ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1
FINANCIAL STATEMENTS OF PRUCO LIFE
INSURANCE COMPANY OF NEW JERSEY . . . . . . . . . . . . . . . . . . . . B1
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO PERSON IS AUTHORIZED TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR THE
SERIES FUND, AND THE PROSPECTUS FOR THE REAL PROPERTY ACCOUNT.
<PAGE>
DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS
amount credited under the Contract -- See Contract fund below.
cash surrender value -- The amount payable to the Contract owner upon surrender
of the Contract, equal to the Contract fund minus any applicable contingent
deferred sales charge and any Contract debt.
Contract anniversary -- The same day and month as the Contract date in each
later year.
Contract date -- The date Pruco Life of New Jersey received the premium for the
Contract.
Contract fund -- The total value attributable to a specific Contract
representing amounts in all the subaccounts, amounts allocated to the fixed-rate
option, amounts invested under the real-estate option, and the principal amount
of any Contract loan. At times throughout this prospectus, when an alternative
identification may be desirable for complete clarity or to further describe the
role of the Contract fund, we refer to the Contract fund as "the amount credited
under the Contract". The term should not be confused with The Prudential Series
Fund, Inc. (the "Series Fund") defined below.
Contract owner -- The person who purchases a Discovery Life Plus Contract and
pays the premium.
Contract year -- A year that starts on the Contract date or on a Contract
anniversary.
Discovery Life -- A fixed life insurance contract issued by Pruco Life of New
Jersey that is similar to Discovery Life Plus except that the owner may not
invest the Contract fund in variable investment options.
face amount -- The initial amount of life insurance as shown on the cover page
of the Contract.
fixed-rate option -- An investment option under which Pruco Life of New Jersey
guarantees that interest will be added to the amount deposited at a rate
declared periodically in advance.
Monthly date -- The Contract date and the same date in each subsequent month.
Pruco Life of New Jersey Single Premium Variable Life Account (the "Account") --
A separate account of Pruco Life of New Jersey registered as a unit investment
trust under the Investment Company Act of 1940.
Pruco Life of New Jersey Variable Contract Real Property Account (the "Real
Property Account") -- A separate account of Pruco Life of New Jersey which,
through a partnership, invests primarily in income-producing real property.
subaccount -- A division of the Account, the assets of which are invested in
shares of the corresponding portfolio of the Series Fund.
target loan amount -- The amount, equal to 10% of the initial premium for each
completed Contract year, that may be borrowed as a first loan in any year at the
most favorable net cost to the Contract owner.
The Prudential Series Fund, Inc. (the "Series Fund") -- A mutual fund with
separate portfolios, one or more of which may be chosen as an underlying
investment for the Contract.
valuation period -- The period of time from one determination of the value of
the amount invested in a subaccount to the next. Such determinations are made
when the net asset values of the portfolios of the Series Fund are calculated,
which is generally at 4:15 p.m. New York City time on each day during which the
New York Stock Exchange is open.
variable investment options -- The subaccounts and the Real Property Account.
1
<PAGE>
BRIEF DESCRIPTION OF THE CONTRACT
The Discovery Life Plus Contract (the "Contract") provides a way to invest in
one or more securities portfolios with different investment objectives, while at
the same time providing lifetime insurance protection. The Discovery Life Plus
Contract is a variable whole life insurance contract. It is called a "variable"
contract because the value of the Contract depends upon the investment results
of the investment option[s] selected. Under current law, no tax is payable upon
any increase in the value of the Contract until amounts are distributed under
the Contract. The owner may surrender the Contract in full and in that way
withdraw the full cash surrender value of the Contract. Neither partial
surrenders nor Contract splits are permitted. The Contract owner may, however,
borrow against the value of the Contract. See Loans, page 7.
Because the Contract is a Modified Endowment Contract under federal tax law,
loans and other distributions made during the insured's lifetime are includible
in gross income on an income-first basis. A 10% penalty tax may be imposed on
income distributed before the insured attains age 59 1/2. See Federal Tax
Status, page 14.
The Contract is purchased by making an initial premium payment. Generally, the
minimum initial payment is $10,000. For insureds aged 76 through 85, the minimum
initial payment is $50,000. Pruco Life Insurance Company of New Jersey ("Pruco
Life of New Jersey") deducts the amount needed to pay state and/or local premium
taxes attributable to the Contract and allocates the remainder to the variable
investment option[s] selected by the owner and/or to the fixed-rate option. The
assets of each subaccount are invested in a corresponding portfolio of The
Prudential Series Fund, Inc. (the "Series Fund"), a series mutual fund for which
The Prudential Insurance Company of America ("The Prudential") is the investment
advisor. The Series Fund currently has sixteen portfolios available for
investment by Contract owners. The Money Market Portfolio is invested in
short-term debt obligations similar to those purchased by money market funds;
the Bond Portfolio is invested primarily in high quality medium-term corporate
and government debt securities; the Government Securities Portfolio is invested
primarily in U.S. Government securities including intermediate and long-term
U.S. Treasury securities and debt obligations issued by agencies of or
instrumentalities established, sponsored or guaranteed by the U.S. Government;
the Zero Coupon Bond Portfolios 1995 (not available for investment after
November 14, 1995), 2000, and 2005 are invested primarily in debt obligations of
the United States Treasury and investment grade corporations that have been
issued without interest coupons or stripped of their unmatured interest coupons,
interest coupons that have been stripped from such debt obligations, and
receipts and certificates for such stripped debt obligations and stripped
coupons; the Conservatively Managed Flexible Portfolio is invested in a mix of
money market instruments, fixed income securities, and common stocks, in
proportions believed by the investment manager to be appropriate for an investor
who desires diversification of investment who prefers a relatively lower risk of
loss and a correspondingly reduced chance of high appreciation; the Aggressively
Managed Flexible Portfolio is invested in a mix of money market instruments,
fixed income securities, and common stocks, in proportions believed by the
investment manager to be appropriate for an investor desiring diversification of
investment who is willing to accept a relatively high level of loss in an effort
to achieve greater appreciation; the High Yield Bond Portfolio is invested
primarily in high yield fixed-income securities of medium to lower quality, also
known as high risk bonds; the Stock Index Portfolio is invested in common stocks
selected to duplicate the price and yield performance of the Standard & Poor's
500 Composite Stock Price Index; the High Dividend Stock Portfolio is invested
primarily in common stocks and convertible securities that provide favorable
prospects for investment income returns above those of the Standard & Poor's 500
Stock Index or the NYSE Composite Index; the Common Stock Portfolio is invested
primarily in common stocks; the Growth Stock Portfolio is invested primarily in
equity securities of established companies with above-average growth prospects;
the Small Capitalization Stock Portfolio is invested primarily in equity
securities of publicly-traded companies with small market capitalization; the
Global Equity Portfolio is invested primarily in common stocks and common stock
equivalents (such as convertible debt securities) of foreign and domestic
issuers; and the Natural Resources Portfolio is invested primarily in common
stocks and convertible securities of natural resource companies, and in
securities (typically debt securities or preferred stock) the terms of which are
related to the market value of a natural resource. Further information about the
Series Fund portfolios can be found under The Prudential Series Fund, Inc. on
page 4.
The Contract owner may also invest a portion of the premium payment in The Pruco
Life of New Jersey Variable Contract Real Property Account (the "Real Property
Account"), which, through a partnership, invests primarily in income-producing
real property. If a Contract owner elects to invest in the real estate
investment option, the assets will be maintained in a subaccount of the Real
Property Account related to the Contract that provides the mechanism and
maintains the records whereby various Contract charges are made. The investment
objectives of the Real Property Account and the partnership are described
briefly under Pruco Life of New Jersey Variable Contract Real Property Account
on page 6.
All of the premium payment may be allocated to one subaccount, to the fixed-rate
option funded by Pruco Life of New Jersey's general account or to the Real
Property Account. Alternatively, the premium payment may be divided among any of
the subaccounts, the fixed-rate option, and the Real Property Account.
2
<PAGE>
The value of the Contract will vary to reflect the investment results of the
variable investment option[s] in which money is invested and the amount of
interest credited on amounts allocated to the fixed-rate option. The total
amount attributable to a Contract held in the variable investment options and
under the fixed-rate option, plus the principal amount of any Contract loan, is
referred to herein interchangeably as the "Contract fund" or "the amount
credited under the Contract".
The purchaser of a Contract decides what the amount of the initial premium will
be (so long as it is at least $10,000; $50,000 for issue ages 76 through 85) and
from this amount the initial amount of life insurance (i.e., the face amount) is
determined. Although the cash surrender value of the Contract (i.e., the
Contract fund minus any Contract debt and any applicable sales charge deducted
upon surrender) will begin to vary immediately to reflect the investment results
of any amount invested in the variable investment options, the amount of life
insurance will ordinarily not change for several years and may not change at
all. If investment results are sufficiently favorable, however, the amount of
insurance will eventually increase and thereafter will vary in amount reflecting
investment results and the application of factors that vary with the insured's
attained age. But it will never be less than the face amount. See Amount of Life
Insurance, page 10.
Pruco Life of New Jersey deducts certain charges from premium payments and from
the amounts held in the designated investment options. In addition, Pruco Life
of New Jersey makes certain additional charges if a Contract is surrendered
during the first 6 Contract years. All these charges, which are largely designed
to cover insurance costs and risks as well as sales and administrative expenses,
are fully described under Charges on page 8. In brief, and subject to that
fuller description, the following diagram outlines the charges which may be
made:
-----------------------------
Premium Payment
-----------------------------
------------------------------------------------------------
o Less charge for premium taxes. (Under
certain circumstances, this charge may
be reduced or eliminated, see item 1
under Charges, page 8).
------------------------------------------------------------
- --------------------------------------------------------------------------------
Invested Premium Amount
o To be invested in one or a combination of:
o One or more of the sixteen available portfolios of the Series Fund.
o The Real Property Account.
o The Fixed Rate Option.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Daily Charges
o A daily charge equivalent to an annual rate of up to 0.35% is deducted from
the assets of each of the variable investment options for administrative
expenses.
o A daily charge equivalent to an annual rate of up to 0.9% is deducted from
the assets of each of the variable investment options for mortality and
expense risks.
o Management fees and expenses are deducted from the assets of the Series
Fund and the Real Property Account.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Monthly Charges
o A charge for insurance protection is deducted monthly. Generally, this
charge is imposed in an amount equal to 0.05% of the Contract fund per
month. However, if the Contract fund falls so low as to make a charge of
0.05% per month inadequate, the charge may be increased to the amount
permitted by the 1980 Commissioners Standard Ordinary Mortality Table
("1980 CSO Table").
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Possible Additional Charges
o If the Contract is surrendered during the first 6 years, a contingent
deferred sales charge is assessed; the maximum contingent deferred sales
charge during the first year is 9% of the amount credited under the
Contract. Thereafter, this charge decreases by one percent per year until,
in the sixth Contract year, it is equal to 4% of the amount credited under
the Contract. In the seventh and subsequent Contract years there is no
charge. The sales charge will never be greater than 9% of the initial
premium payment.
- --------------------------------------------------------------------------------
3
<PAGE>
Because of the charges listed above, and in particular because of the
significant charges deducted upon early surrender, prospective purchasers should
purchase a Contract only if they intend and have the financial capability to
keep it in force for a substantial period.
Funds may be transferred among the subaccounts and to the fixed-rate option and
the Real Property Account up to four times each year. There are limitations on
transfers out of the fixed-rate option and into and out of the Real Property
Account. See Transfers, page 7.
For a limited time, a Contract may be returned for a refund in accordance with
the terms of its "free-look" provision. See Short-Term Cancellation Right or
"Free Look", page 6.
This Brief Description of the Contract is intended to provide a broad overview
of the more significant features of the Contract. More detailed information will
be found in subsequent sections of this prospectus and in the Contract document.
That document, together with its attached application, constitutes the entire
agreement between the owner and Pruco Life of New Jersey and should be retained
by the owner.
GENERAL INFORMATION ABOUT PRUCO LIFE INSURANCE COMPANY OF NEW
JERSEY, PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT,
AND THE VARIABLE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACT
Pruco Life Insurance Company of New Jersey. Pruco Life Insurance Company of New
Jersey ("Pruco Life of New Jersey") is a stock life insurance company, organized
in 1982 under the laws of the State of New Jersey. It is licensed to sell life
insurance and annuities only in the States of New Jersey and New York. These
Contracts are not offered in any state in which the necessary approvals have not
yet been obtained.
Pruco Life of New Jersey is a wholly-owned subsidiary of Pruco Life Insurance
Company, which in turn is a wholly-owned subsidiary of The Prudential, a mutual
insurance company founded in 1875 under the laws of the State of New Jersey. As
of December 31, 1994, The Prudential has invested over $127 million in Pruco
Life of New Jersey through its subsidiary Pruco Life Insurance Company in
connection with Pruco Life of New Jersey's organization and operation. The
Prudential intends from time to time to make additional capital contributions to
Pruco Life of New Jersey as needed to enable it to meet its reserve requirements
and expenses in connection with its business. However, The Prudential is under
no obligation to make such contributions and its assets do not back the benefits
payable under the Contract. Pruco Life of New Jersey's financial statements
begin on page B1 and should be considered only as bearing upon Pruco Life of New
Jersey's ability to meet its obligations under the Contracts.
Pruco Life of New Jersey Single Premium Variable Life Account. The Pruco Life of
New Jersey Single Premium Variable Life Account (the "Account") was established
on April 15, 1985 under New Jersey law as a separate investment account. The
Account meets the definition of a "separate account" under the federal
securities laws. The Account holds assets that are segregated from all of Pruco
Life of New Jersey's other assets.
The obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of Pruco Life of New Jersey. Pruco Life of New
Jersey is also the legal owner of the assets in the Account. Pruco Life of New
Jersey will at all times maintain assets in the Account with a total market
value at least equal to the reserve and other liabilities relating to the
variable benefits attributable to the Account. These assets may not be charged
with liabilities which arise from any other business Pruco Life of New Jersey
conducts. In addition to these assets, the Account's assets may include funds
contributed by Pruco Life of New Jersey to commence operation of the Account and
may include accumulations of the charges Pruco Life of New Jersey makes against
the Account. From time to time these additional assets will be transferred to
Pruco Life of New Jersey's general account. Before making any such transfer,
Pruco Life of New Jersey will consider any possible adverse impact the transfer
might have on the Account.
The Account is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any
supervision by the SEC of the management or investment policies or practices of
the Account. For state law purposes, the Account is treated as a part or
division of Pruco Life of New Jersey. There are currently sixteen subaccounts
within the Account, each of which invests in a single corresponding portfolio of
the Series Fund. Additional subaccounts may be added in the future.
The Account's financial statements begin on page A1.
The Prudential Series Fund, Inc. The Prudential Series Fund, Inc. (the "Series
Fund") is registered under the 1940 Act as an open-end diversified management
investment company. Its shares are currently sold only to separate accounts of
The Prudential and certain other insurers that offer variable life insurance and
variable annuity contracts. On October 31, 1986, the Pruco Life Series Fund,
Inc., an open-end, diversified management investment company which sold its
shares only to separate accounts of Pruco Life of New Jersey and Pruco Life
Insurance
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Company, was merged into the Series Fund. Prior to that date, the
Account invested only in shares of the Pruco Life Series Fund, Inc. The Account
will purchase and redeem shares from the Series Fund at net asset value. Shares
will be redeemed to the extent necessary for Pruco Life of New Jersey to provide
benefits under the Contract and to transfer assets from one subaccount to
another, as requested by Contract owners. Any dividend or capital gain
distribution received from a portfolio of the Series Fund will be reinvested
immediately at net asset value in shares of that portfolio and retained as
assets of the corresponding subaccount.
The Prudential is the investment advisor for the assets of each of the
portfolios of the Series Fund. The Prudential's principal business address is
Prudential Plaza, Newark, New Jersey 07102-3777. The Prudential has a Service
Agreement with its wholly-owned subsidiary The Prudential Investment Corporation
("PIC"), which provides that, subject to The Prudential's supervision, PIC will
furnish investment advisory services in connection with the management of the
Series Fund. In addition, The Prudential has entered into a Subadvisory
Agreement with its wholly-owned subsidiary Jennison Associates Capital Corp.
("Jennison"), under which Jennison furnishes investment advisory services in
connection with the management of the Growth Stock Portfolio. Further detail is
provided in the prospectus and statement of additional information for the
Series Fund. The Prudential, PIC, and Jennison are registered as investment
advisors under the Investment Advisers Act of 1940.
As an investment advisor, The Prudential charges the Series Fund a daily
investment management fee as compensation for its services. The following table
shows the investment management fee charged for each portfolio of the Series
Fund available for investment by Contract owners.
- --------------------------------------------------------------------------------
Annual Investment Management Fee as
Portfolio a Percentage of Average Daily Net Assets
- --------------------------------------------------------------------------------
Stock Index Portfolio 0.35%
Money Market Portfolio 0.40%
Bond Portfolio 0.40%
Government Securities Portfolio 0.40%
High Dividend Stock Portfolio 0.40%
Small Capitalization Stock Portfolio 0.40%
Zero Coupon Bond Portfolios 0.40%
Common Stock Portfolio 0.45%
Natural Resources Portfolio 0.45%
Conservatively Managed Flexible Portfolio 0.55%
High Yield Bond Portfolio 0.55%
Aggressively Managed Flexible Portfolio 0.60%
Growth Stock Portfolio 0.60%
Global Equity Portfolio 0.75%
- --------------------------------------------------------------------------------
Some investment management fees and expenses charged to the Series Fund may be
higher than those that were previously charged to the Pruco Life Series Fund,
Inc. (0.4%), in which the Account previously invested. For the Money Market,
Bond, Conservatively Managed Flexible, Aggressively Managed Flexible, and Zero
Coupon Bond Portfolios 1995 and 2000, and Common Stock, Pruco Life of New Jersey
will make daily adjustments that will offset the effect on Contract owners of
any higher investment management fees and expenses charged against the Series
Fund. Pruco Life of New Jersey also makes, on a non-guaranteed basis, daily
adjustments to ensure that the portfolio expenses indirectly borne by a Contract
owner, expressed as a percentage of the average daily net assets by portfolio,
would have been 0.47% for the Money Market Portfolio, 0.45% for the Bond
Portfolio, 0.60% for the Zero Coupon Bond Portfolios 1995 and 2005, 0.51% for
the Zero Coupon Bond Portfolio 2000, 0.61% for the Conservatively Managed
Flexible Portfolio, 0.66% for the Aggressively Managed Flexible Portfolio, and
0.55% for the Common Stock Portfolio during 1994. Pruco Life of New Jersey does
not intend to discontinue the adjustments for the Zero Coupon Bond Portfolio
2005 in the future, although it retains the right to do so. No such offset will
be made with respect to the remaining portfolios.
It is conceivable that in the future it may become disadvantageous for both
variable life insurance and variable annuity contract separate accounts to
invest in the same underlying mutual fund. Although neither the companies which
invest in the Series Fund, nor the Series Fund currently foresees any such
disadvantage, the Series Fund's Board of Directors intends to monitor events in
order to identify any material conflict between variable life insurance and
variable annuity contract owners and to determine what action, if any, should be
taken in response thereto. Material conflicts could result from such things as:
(1) changes in state insurance law; (2) changes in federal income tax law; (3)
changes in the investment management of any portfolio of the Series Fund; or (4)
differences between voting instructions given by variable life insurance and
variable annuity contract owners.
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A full description of the Series Fund, its investment objectives, management,
policies, and restrictions, its expenses, the risks attendant to investment
therein including any risks associated with investment in the High Yield Bond
Portfolio, and all other aspects of its operation is contained in the attached
prospectus for the Series Fund and in its statement of additional information,
which should be read in conjunction with this prospectus.
There is no assurance that the investment objectives will be met.
Pruco Life of New Jersey Variable Contract Real Property Account. The Pruco Life
of New Jersey Variable Contract Real Property Account (the "Real Property
Account") is a separate account of Pruco Life of New Jersey that, through a
general partnership formed by The Prudential and two of its subsidiaries,
invests primarily in income-producing real property such as office buildings,
shopping centers, agricultural land, hotels, apartments or industrial
properties. It also invests in mortgage loans and other real estate-related
investments, including sale-leaseback transactions. The objectives of the Real
Property Account and the partnership are to preserve and protect capital,
provide for compounding of income as a result of reinvestment of cash flow from
investments, and provide for increases over time in the amount of such income
through appreciation in the value of assets.
The partnership has entered into an investment management agreement with The
Prudential, under which The Prudential selects the properties and other
investments held by the partnership. The Prudential charges the partnership a
daily fee for investment management which amounts to 1.25% per year of the
average daily gross assets of the partnership.
A full description of the Real Property Account, its management, policies, and
restrictions, its charges and expenses, the risks attendant to investment
therein, the partnership's investment objectives, and all other aspects of the
Real Property Account's and the partnership's operations is contained in the
attached prospectus for the Real Property Account, which should be read together
with this prospectus by any Contract owner considering the real estate
investment option. There is no assurance that the investment objectives will be
met.
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS
Requirements for Issuance of a Contract. For insureds below the age of 76, the
minimum initial premium payment is $10,000. For insureds aged 76 through 85, the
minimum initial premium payment is $50,000. Before issuing any Contract, Pruco
Life of New Jersey requires evidence of insurability which may include a medical
examination. The Contract will only be issued on insureds who are classified as
standard risks following Pruco Life of New Jersey's regular underwriting
process. Insurance protection will begin on the date the initial payment and
completed application are received. On the date the initial payment is received
in the Pruco Life of New Jersey Home Office, the amount credited under the
Contract begins to vary to reflect the investment results of the variable
investment option[s] which have been chosen or the interest rate declared for
the fixed-rate option. If the application is not approved, because the current
underwriting requirements are not met, the premium payment will promptly be
returned. The Company reserves the right to change these requirements on a
non-discriminatory basis.
Short-Term Cancellation Right or "Free Look". Generally, a Contract may be
returned for a refund within 10 days after it is received by the Contract owner,
within 45 days after Part I of the application for insurance is signed or within
10 days after Pruco Life of New Jersey mails or delivers a Notice of Withdrawal
Right, whichever is latest. Some states allow a longer period of time during
which a Contract may be returned for a refund. A refund can be requested by
mailing or delivering the Contract to the representative who sold it or to the
Pruco Life of New Jersey Home Office specified in the Contract. A Contract
returned according to this provision shall be deemed void from the beginning.
The Contract owner will then receive a refund of all premium payments made, plus
or minus any change due to investment experience in the value of the invested
portion of the premiums, calculated as if no charges had been made against the
Account or the Series Fund. However, if applicable law so requires, the Contract
owner who exercises his or her short-term cancellation right will receive a
refund of all premium payments made, with no adjustment for investment
experience.
Allocation of the Premium Payment. The Contract owner determines how the initial
premium payment, after the deduction for any applicable state and/or local
premium taxes, will be allocated among the subaccounts, the fixed-rate option,
and the Real Property Account. The owner may choose to allocate nothing to a
particular subaccount or to the fixed-rate option or the Real Property Account,
but any allocation made must be at least 10% and may not be a fractional
percent.
Additionally, a feature called Dollar Cost Averaging is available to Contract
owners who make an allocation to the Money Market Subaccount. Under this
feature, automatic flat dollar amounts will be transferred monthly from the
Money Market Subaccount into other investment options available under the
Contract, excluding the fixed-rate option, but including the Real Property
Account. At issue, the minimum amount initially designated for transfer under
this feature must be the greater of $10,000 and 10% of the initial premium
payment. After issue, Pruco Life of New Jersey will accept an amount less than
$10,000 provided it brings the balance in any current Dollar Cost Averaging
account up to $10,000. Monthly transfers must be at least 3% of the amount
allocated to the Dollar
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Cost Averaging account, with a minimum of $20 transferred into any one
investment option. These amounts are subject to change at Pruco Life of New
Jersey's discretion. The minimum transfer amount will only be recalculated upon
an increase in the amount allocated to the feature.
Each automatic monthly transfer will take effect as of the end of the valuation
period on the Monthly date, provided the New York Stock Exchange is open on that
date. If the New York Stock Exchange is not open on that date, or if the Monthly
date does not occur in that particular month, the transfer will take effect as
of the end of the last valuation period which immediately precedes that Monthly
date. Automatic monthly transfers will continue until the amount designated for
Dollar Cost Averaging has been transferred, or until the Contract owner gives
notification of a change in allocation or cancellation of the feature.
Currently, there is no charge for using the Dollar Cost Averaging feature.
Transfers. The Contract owner may transfer the portion of the Contract fund
allocated to any of the subaccounts, the fixed-rate option or the Real Property
Account without charge and without any federal income tax liability. Transfers
must be in amounts of $300 or more or the total amount in the subaccounts, if
less, and must not cause the amount credited in any subaccount to be less than
$300, unless the entire amount in that subaccount is transferred. The Contract
owner may transfer amounts by proper written notice to a Pruco Life of New
Jersey Home Office, or by telephone, provided the Contract owner is enrolled to
use the Telephone Transfer System. Pruco Life of New Jersey cannot guarantee
that owners will be able to get through to complete a telephone transfer during
peak periods such as periods of drastic economic or market change. Transfers
among subaccounts will take effect as of the end of the valuation period in
which a proper transfer request is received at a Pruco Life of New Jersey Home
Office. The owner may make up to four transfers a year, either among the
subaccounts or from the subaccounts to the fixed-rate option or the Real
Property Account. In addition, the entire amount of the Contract fund in the
subaccounts may be transferred to the fixed-rate option at any time. A Contract
owner who wishes to convert his or her variable Contract to a fixed-benefit
Contract must request a complete transfer of funds to the fixed-rate option and
should also change his or her allocation instructions regarding any future
premiums.
On the liquidation date of a Zero Coupon Bond Subaccount, all the shares held by
it in the corresponding portfolio of the Series Fund will be redeemed and the
proceeds of the redemption applicable to each Contract will be transferred to
the Money Market Subaccount unless the Contract owner directs that it be
transferred to another subaccount. Affected Contract owners will be notified in
writing and given the opportunity to transfer their proceeds to another
subaccount prior to the liquidation date. A transfer that occurs upon the
liquidation date of a Zero Coupon Bond Subaccount will not be counted as one of
the four permissible transfers in a Contract year.
Transfers from the fixed-rate option to the subaccounts are currently permitted
once each Contract year and only during the 30-day period beginning on the
Contract anniversary. The maximum amount which may currently be transferred out
of the fixed-rate option each year is the greater of: (a) 25% of the amount in
the fixed-rate option and (b) $5,000. Such transfer requests received prior to
the Contract anniversary will be effected on the Contract anniversary. Transfer
requests received within the 30-day period beginning on the Contract anniversary
will be effected as of the end of the valuation period in which a proper
transfer request is received at a Pruco Life of New Jersey Home Office. These
limits are subject to change in the future. Transfers to and from the Real
Property Account are subject to restrictions described in a separate prospectus
for that investment option.
Surrenders. The Contract owner may surrender the Contract at any time for its
full cash surrender value (which takes into account the contingent deferred
sales charge, if any, and any Contract debt). Neither partial surrenders nor
Contract splits are permitted. To surrender a Contract, the owner must deliver
or mail it, together with a written request in a form that meets Pruco Life of
New Jersey's needs, to a Pruco Life of New Jersey Home Office. The cash
surrender value of the surrendered Contract will be determined as of the date
such notice is received in the Home Office. See When Proceeds Are Paid, page 14.
Surrender of the Contract may have tax consequences. See Federal Tax Status,
page 14.
Loans. The Contract owner may borrow from Pruco Life of New Jersey up to the
"loan value" of the Contract using only the Contract as security for the loan.
Contractually, loans will be made only on or after the first Contract
anniversary. However, as an administrative practice, Pruco Life of New Jersey
allows loans to be made during the first Contract year. This practice may
change. The loan value of a Contract is 90% of an amount equal to its Contract
fund, reduced by any charges due upon surrender. However, Pruco Life of New
Jersey will, on a non-contractual basis, increase the loan value by permitting a
Contract owner to borrow up to 100% of the portion of the Contract fund
attributable to the fixed-rate option (or any portion of the Contract fund
attributable to a prior loan supported by the fixed-rate option), reduced by any
charges due upon surrender. Loans will be treated as distributions for tax
purposes. See Federal Tax Status, page 14.
When a loan is taken, the amounts allocated to the subaccount[s], the fixed-rate
option or the Real Property Account will be reduced by the amount of any loan.
The reduction will generally be made in the same proportions as the value in
each subaccount, the fixed-rate option, and the Real Property Account bears to
the total value of
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<PAGE>
the Contract. As explained below, however, the principal amount of the loan
continues to be part of the Contract owner's total Contract fund.
Pruco Life of New Jersey will charge interest at the rate of 6% per year on any
outstanding loan and, if the interest is not paid on the Contract anniversary,
the amount of the interest will be added to the loan. Although the amount of the
loan will be withdrawn from the variable investment options and the fixed-rate
option, Pruco Life of New Jersey will nevertheless credit the amount withdrawn
with interest daily at an effective annual rate of either 5.5% or 4%. The loan
plus the interest credited thereon to the Contract owner remain part of the
Contract fund. Determination of the applicable interest rate credited to the
Contract owner on the loan amount is made as follows. The loan amount is divided
into two parts, the "target loan amount" and the remainder. The target loan
amount for any Contract year is 10% of the initial premium for each Contract
year. Thus in the first year it is 10% of the premium payment, in the second
year 20% of the premium payment, and so on. Any borrowed amount that is part of
the target loan amount is credited with interest daily at an effective annual
rate of 5.5%. Amounts borrowed in excess of the target loan amount, and second
loans in any year, are credited daily with interest at an effective annual rate
of 4%. Thus the net cost of the loan to the Contract owner is about 0.5% per
year on the target loan amount and 2% per year on amounts in excess of the
target loan amount and on second loans in any year; however, since the amount
borrowed is not invested in the variable investment option[s] the cash surrender
value does not, to that extent, participate in either favorable or unfavorable
investment performance. Upon each Contract anniversary any outstanding loan up
to the new target loan amount will be credited interest at the 5.5% rate even if
some of that loan had been credited interest at 4% in the prior year.
Repayment of a loan does not restore the Contract fund or cash surrender value
to what it would have been had no loan been taken, since the loaned amount did
not reflect investment experience during the period the loan was outstanding.
This may also have an effect on the death benefit.
In addition, it should be recognized that a Contract loan will increase the
difference between the gross investment return in the underlying portfolio[s] of
the Series Fund and the net return in the selected subaccount[s]. This is
because the cost of insurance charge (see item 4 under Charges, below) is not
reduced by the making of a Contract loan while the amount in the subaccount[s]
from which such charges are deducted is reduced by the amount of the loan.
Charges.
1. Deduction from Premium Payments. Upon purchase of this Contract, a premium
tax is generally payable. Pruco Life of New Jersey will deduct the amount of
statutory rate times the amount of initial premium payment. These statutory
rates vary by state and local jurisdiction. The most common level of premium
taxes is 2% of the premium. The tax rates currently in effect in those states
that impose a tax range from 0.75% to 5%. The amount remaining after the
deduction of premium taxes will be allocated to the investment option[s] as the
owner directs. However, if (a) the sum of the initial premiums under the
Contract and all other Discovery Life Plus and Discovery Life Contracts issued
on the same insured equal $50,000 or more, or (b) Contracts are purchased on all
children of a parent or all grandchildren of a grandparent, each Contract has an
initial premium of $25,000 or more and the total initial premiums add up to
$50,000 or more, Pruco Life of New Jersey will deduct for initial and additional
premium taxes only the portion of the applicable state premium taxes which is in
excess of 4% of the premium, and any applicable local premium taxes. If total
premiums under the Contract and all other Discovery Life Plus and Discovery Life
Contracts issued on the same insured equal or exceed $50,000, any premium taxes
previously deducted will be used to increase the Contract fund on the most
recent Contract. Thus, in many cases, if a Contract is purchased with an initial
premium of $50,000 or more, there will be no deduction from the payment and the
entire amount will be invested as the owner directs. During 1994 and 1993, Pruco
Life of New Jersey received a total of approximately $0 and $310 respectively,
in charges for payment of state premium taxes.
2. Sales charges on surrenders. A contingent deferred sales charge may be
imposed upon surrender of this Contract. This charge compensates Pruco Life of
New Jersey for paying all of the expenses of selling and distributing the
Contracts, including sales commissions, printing of prospectuses, preparation of
sales literature, and other promotional activities. As stated earlier, on page
3, no sales charge will be made if the Contract is surrendered after the sixth
Contract year. If the Contract is surrendered in the first year, the charge will
be 9% of the amount credited under the Contract. For each year after the first
that the Contract is in effect, the contingent deferred sales charge as a
percentage of the Contract fund is reduced by 1% until it reaches 4% in year 6.
However, in no event will the sales charge be greater than 9% of the initial
premium payment. If there is an outstanding loan, the amount of any deferred
sales charge will be computed as if the loan had been repaid immediately before
the surrender. No deferred sales charge is applicable to the death benefit, no
matter when that may become payable. During 1994 and 1993, Pruco Life of New
Jersey received a total of $343,915 and $411,744 respectively, in sales charges
on surrenders of the Contracts.
3. Administrative charge. There is a charge imposed to reimburse Pruco Life of
New Jersey for the expenses it incurs in administering the Contracts, which
includes such things as underwriting the Contract, conducting any
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medical examinations, establishing and maintaining records, and providing
reports to Contract owners. This charge will be assessed by deducting, from the
assets of each of the variable investment options, a percentage of those assets
equivalent to an effective annual rate of up to 0.35% (.00095723%, daily).
During 1994 and 1993, Pruco Life of New Jersey received a total of approximately
$148,697 and $151,470 respectively, in annual administrative charges under the
Contracts.
This administrative charge is guaranteed never to be increased above an
effective annual rate of 0.35% over the life of the Contracts and is intended to
cover the average anticipated administrative expenses to be incurred over the
periods these Contracts are in force. This fee contains no element of
anticipated profit. Because this administrative charge is a percentage of
assets, however, there is no necessary relationship between the amount of the
charge imposed on a particular Contract and the amount of administrative
expenses that may be attributable to that Contract.
4. Charge for insurance protection. Immediately after the Contract is issued the
amount of insurance payable upon death of the insured (the face amount) will be
substantially higher than the initial premium payment. As the insured grows
older, and if investment results (or interest credited) have been reasonably
favorable, the difference between the Contract fund and the amount payable to
the beneficiary in the event of the insured's death will become smaller. But the
death benefit will always be higher than the Contract fund. To enable Pruco Life
of New Jersey to pay this additional amount, it makes a monthly charge
commencing on the Contract date, the date the Contract is issued. The` National
Association of Insurance Commissioners publishes mortality tables from which it
can be determined what an appropriate monthly charge for this purpose should be,
depending upon the insured's age and sex (except where unisex rates apply). One
set of such tables is known as the 1980 CSO Table. Although Pruco Life of New
Jersey has the contractual right to charge maximum cost of insurance rates,
based on the 1980 CSO Table, the actual cost of insurance charge will generally
be lower than that specified by the 1980 CSO Table. Except as explained in the
next paragraph, the charge will be imposed on each of the Contract's Monthly
dates (i.e., the Contract date and the same day of each succeeding month) in an
amount equal to 0.05% per month of the Contract fund on such dates. The sum of
12 monthly mortality charges is likely to be between 0.6% and 0.65% per Contract
year of the Contract fund. The exact percentage is uncertain because the
Contract fund varies in amount daily. If the Contract fund remains level
throughout the entire Contract year, the sum of the charges would be 0.6% of the
Contract fund. If the Contract fund declined uniformly throughout the year, the
sum would be less than 0.6%. If the Contract fund increased uniformly throughout
the year, the sum would be greater than 0.6%. (For example, at a 12% gross rate
of return, the sum of the monthly charges would be approximately 0.65%.)
The monthly insurance charge generally will be assessed at a rate of 0.05% per
month of the Contract fund, unless as a result of very unfavorable investment
experience, the Contract fund falls so low as to make a monthly charge based
upon a rate of 0.05% per month inadequate. In that event, the charge may be
increased to the amount permitted by the 1980 CSO Table. This higher charge
would generally be assessed only when the Contract fund is at least 40% lower
than that which would exist were a net rate of 6% earned in the applicable
variable investment option[s] and maximum mortality charges based on the 1980
CSO Table deducted. In practice, this will require that the return average
somewhat less than 6% for several years or that a substantial depreciation in
the Contract fund occur in a particular year. For example, for a male who buys a
Contract at age 35, investment results could average a net return of 2.22% per
year for about 19 years before Pruco Life of New Jersey will make a higher cost
of insurance charge. As another example, for a male who buys a Contract at age
40 and experiences an average net return of 6% per year for 8 years, it would
take a loss of about 43% in the ninth year (which could occur if the assets were
held in the Common Stock Subaccount and there was a substantial market drop) in
order to bring about an increase in the insurance charge.
5. Charges for assuming mortality and expense risks. Pruco Life of New Jersey
makes a charge for assuming the risk that its estimates of longevity and of the
expenses it expects to incur, over the lengthy periods that this Contract may be
in effect estimates that are the basis for the level of the other charges it
makes under the Contracts will turn out to be incorrect. The mortality and
expense risk charge will be made by deducting daily, from the assets of each of
the subaccounts and/or the Real Property Account, a percentage of those assets
equivalent to an effective annual rate of up to 0.9% (.00245475%, daily). During
1994 and 1993, Pruco Life of New Jersey received a total of approximately
$381,325 and $388,436 respectively, in mortality and expense risk charges under
the Contracts.
6. Expenses incurred by the Series Fund. Subject to certain caps and offsets,
the charges and expenses of the Series Fund are indirectly borne by the Contract
owners. Investment management fees for the available Series Fund portfolios are
briefly described under The Prudential Series Fund, Inc. on page 4. Further
detail about management fees and other Series Fund expenses is provided in the
attached prospectus for the Series Fund and its statement of additional
information. Higher charges and expenses are incurred if the Real Property
Account is selected, as described in the attached prospectus for the Real
Property Account.
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7. Total charges and contract values. As may be seen from the foregoing
description, the amount credited under the Contract at the outset of the
Contract will be less than the initial premium payment by the amount of the
premium tax payable, unless the initial premium payment satisfies Pruco Life of
New Jersey's standards for elimination or reduction of the premium tax charge as
explained in item 1 above. Thereafter, assuming a total Series Fund expense
ratio of 0.54% (taking into account any applicable offsets described under The
Prudential Series Fund, Inc. on page 4), a cost of insurance charge of 0.05% per
month and no Contract debt, the amount credited under the Contract will vary at
a rate that is approximately 2.39% to 2.44% lower than the gross investment
return of the underlying portfolio of the Series Fund in which the assets held
under the Contract are invested.
Amount of Life Insurance. As stated earlier, when the Contract is issued Pruco
Life of New Jersey will determine what the initial amount of life insurance will
be for the initial premium payment. That amount will be shown on the cover page
of the Contract and is called the "face amount". The face amount will be
calculated by Pruco Life of New Jersey as the amount of whole life insurance
that can be provided for the insured by the initial premium, after the deduction
of any applicable state and local premium taxes. This calculation is based on
the 1980 CSO Table and an interest rate of at least 6%. The amount payable to
the beneficiary upon the insured's death will never be less than the face amount
as long as the Contract remains in force, except that it will be reduced by the
amount of any outstanding loan plus interest. But the Contract's death benefit
may be higher than the face amount, depending upon the length of time the
Contract is in force and the Contract's investment results.
1. Some typical face amounts. The following table shows for insureds of various
ages what the face amount of insurance will be for an initial premium payment of
$10,000 or $50,000. The table assumes that at issuance the fixed-rate option is
not being credited more than 6% (if a higher rate is being credited under the
fixed-rate option, the face amount will be slightly higher) and, for the $10,000
premium payment, assumes a total state and local premium tax rate of 2%.
- --------------------------------------------------------------------------------
Face Amount Face Amount
Age of Insured for $10,000 Premium for $50,000 Premium
on the ------------------- -------------------
Contract Date Male Female Male Female
- --------------------------------------------------------------------------------
5 $ 231,211 $ 298,154 $1,179,644 $1,521,193
15 $ 151,173 $ 198,359 $ 771,290 $1,012,032
25 $ 104,157 $ 129,799 $ 531,412 $ 662,236
35 $ 66,654 $ 82,561 $ 340,069 $ 421,229
45 $ 42,601 $ 52,980 $ 217,353 $ 270,304
55 $ 28,260 $ 35,032 $ 144,183 $ 178,734
65 $ 19,832 $ 23,624 $ 101,180 $ 120,529
75 $ 14,982 $ 16,631 $ 76,439 $ 84,850
- --------------------------------------------------------------------------------
In some states the figures in the above table for males will apply to both males
and females. The table does not apply to certain Contracts issued to employers
and employee organizations based on unisex rates. See Legal Considerations
Relating to Sex-Distinct Premiums and Benefits, page 17.
2. Increase in death benefit due to favorable investment experience. It is
likely that the amount of insurance will not change for several years after the
Contract date. Then, if investment experience is sufficiently favorable (by
which is generally meant an average annual net return of greater than 6%), the
death benefit may increase. The Contract provides that the death benefit will
never be less than the face amount or a stated multiple (which changes every
year with the attained age of the insured) of the Contract fund. Representative
multiples for insureds are shown in the table below.
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<PAGE>
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Death Benefit is No Less Than the Contract Fund
Age of Insured Times the Following Multiple (Assumes No Loan)
------------------------------------------------
Male Female
---------------------------------------------------------------------
5 4.80 7.50
15 4.80 7.50
25 4.56 6.11
35 3.76 4.52
45 2.27 2.64
55 1.55 1.82
65 1.23 1.40
75 1.09 1.15
85 1.05 1.05
95 1.02 1.02
---------------------------------------------------------------------
Thus, for a male of 55 who purchased a Contract with a face amount of $133,307
when he was 35 for a premium payment of $20,000, if the Contract fund has
increased to $125,416 due to a gross return in the selected Series Fund
portfolios of 12%, the death benefit payable will be $194,395 at the end of 20
years, based on the assumptions reflected in the table on page T1. If the
Contract fund were to drop subsequently because of unfavorable investment
results, the death benefit would also drop, but not below the face amount. In
some states the figures in the above table for males will apply to both males
and females. The table does not apply to certain Contracts issued to employers
and employee organizations based on unisex rates. See Legal Considerations
Relating to Sex-Distinct Premiums and Benefits, page 17.
Lapse and Reinstatement. If the investment results of a Contract's variable
investment option[s] have been so unfavorable that the net cash surrender value
on any Monthly date has decreased to zero or less, the Contract will go into
default.
Should this happen, Pruco Life of New Jersey will send the Contract owner a
notice of default setting forth the payment necessary to keep the Contract in
force. This payment must be received at the Pruco Life of New Jersey Home Office
within the 61 day grace period after the notice of default is mailed or the
Contract will lapse. A Contract that lapses with an outstanding Contract loan
may have tax consequences. See Federal Tax Status on page 14.
A Contract that has lapsed may be reinstated within 3 years after the date of
default unless the Contract has been surrendered for its cash surrender value.
To reinstate a lapsed Contract, Pruco Life of New Jersey requires renewed
evidence of insurability, and submission of certain payments due under the
Contract.
A Contract that has lapsed has no value and provides no benefits.
Additional Premium Payments. After the Contract has been in force for several
years, the Contract owner may be allowed the option of paying additional premium
payments in order to increase his or her Contract fund. Such premium payments
are allowed when they will not cause the Contract to fail to qualify as life
insurance for tax purposes and will not then increase the amount of insurance.
In the annual statement concerning each individual Contract, and upon request,
Pruco Life of New Jersey will tell the Contract owner whether an additional
premium payment can be made and what its maximum amount is. If the owner does
make an additional premium payment, the amount of that payment, less any
applicable premium taxes which may be payable, will increase the Contract fund
but not the death benefit. These premium payments will not increase the maximum
possible deferred sales charge. An additional premium payment will not be
accepted by Pruco Life of New Jersey if it would, through the application of the
multiples shown on page 10, immediately result in an increase in the death
benefit.
Several factors affect when additional premium payments may be made. For
example, the Contract years in which a female issue age 55 may make additional
payments depend upon investment performance. Based upon a hypothetical gross
annual rate of return of 8% in the selected Series Fund portfolio[s], and upon
the assumptions reflected in the table on page T1, an additional payment may
first be made in year 12, and additional payments may be made as late as year
20.
Living Needs Benefit. Contract applicants may elect to add the Living Needs
Benefit to their Contracts at issue, subject to Pruco Life of New Jersey's
receipt of satisfactory evidence of insurability. The benefit may vary
state-by-state where it is available, and a Pruco Life of New Jersey
representative should be consulted as to whether and to what extent the benefit
is available in a particular state and on any particular Contract. Where
available, the benefit can generally be added only to Contracts with face
amounts of $50,000 or more or when the aggregate face amounts of the insured's
eligible contracts equal $50,000 or more.
11
<PAGE>
The Living Needs Benefit allows the Contract owner to elect to receive an
accelerated payment of all or part of the Contract's death benefit, adjusted to
reflect current value, at a time when certain special needs exist. The adjusted
death benefit will always be less than the death benefit, but will generally be
greater than the Contract's cash surrender value. Depending upon state
regulatory approval, one or both of the following options may be available. A
Pruco Life of New Jersey representative should be consulted as to whether
additional options may be available.
Terminal Illness Option. This option is available if the insured is diagnosed as
terminally ill with a life expectancy of 6 months or less. When satisfactory
evidence is provided, Pruco Life of New Jersey will provide an accelerated
payment of the portion of the death benefit selected by the Contract owner as a
Living Needs Benefit. The Contract owner may (1) elect to receive the benefit in
a single sum or (2) receive equal monthly payments for 6 months. If the insured
dies before all of the payments have been made, the present value of the
remaining payments will be paid to the beneficiary designated in the Living
Needs Benefit claim form in a single sum.
Nursing Home Option. This option is available after the insured has been
confined to an eligible nursing home for 6 months or more. When satisfactory
evidence is provided, including certification by a licensed physician, that the
insured is expected to remain in the nursing home until death, Pruco Life of New
Jersey will provide an accelerated payment of the portion of the death benefit
selected by the Contract owner as a Living Needs Benefit. The Contract owner may
(1) elect to receive the benefit in a single sum or (2) receive equal monthly
payments for a specified number of years (not more than 10 nor less than 2),
depending upon the age of the insured. If the insured dies before all of the
payments have been made, the present value of the remaining payments will be
paid to the beneficiary designated in the Living Needs Benefit claim form in a
single sum.
All or part of the Contract's death benefit may be accelerated under the Living
Needs Benefit. If the benefit is only partially accelerated, a death benefit of
at least $25,000 must remain under the Contract. Pruco Life of New Jersey
reserves the right to determine the minimum amount that may be accelerated.
The Living Needs Benefit is available only in jurisdictions where and to the
extent regulatory approval has been obtained. If desired by a Contract owner,
the benefit must be requested on the Contract's application. There is no charge
for adding the benefit to the Contract. However, an administrative charge (not
to exceed $150) will be made at the time the Living Needs Benefit is paid.
No benefit will be payable if the Contract owner is required to elect it in
order to meet the claims of creditors or to obtain a government benefit. Pruco
Life of New Jersey can furnish details about the amount of Living Needs Benefit
that is available to an eligible Contract owner under a particular Contract, and
the adjusted premium payments that would be in effect if less than the entire
death benefit is accelerated.
The Contract owner should consider whether adding this settlement option is
appropriate in his or her given situation. Adding the Living Needs Benefit to
the Contract has no adverse consequences; however, electing to use it could.
Contract owners should consult a qualified tax advisor before electing to
receive this benefit. Unlike a death benefit received by a beneficiary after the
death of an insured, receipt of a Living Needs Benefit payment may give rise to
a federal or state income tax. Receipt of a Living Needs Benefit payment may
also affect a Contract owner's eligibility for certain government benefits or
entitlements.
Illustrations of Cash Surrender Values, Death Benefits, and Accumulated
Premiums. The tables in this prospectus have been prepared to help show how
values under this Contract change with investment performance of the Account.
The tables assume that no portion of the Contract fund is allocated to the
fixed-rate option or the Real Property Account. The tables illustrate how cash
surrender values (reflecting the deduction of deferred sales charges, if any)
and death benefits under Contracts issued on an insured of a given age would
vary over time if the return on the assets held in the Series Fund portfolios
were a uniform, gross, after tax, annual rate of 0%, 4%, 8%, and 12%. The death
benefits and cash surrender values would be different from those shown if the
returns averaged 0%, 4%, 8%, and 12% but fluctuated over and under those
averages throughout the years. For the hypothetical returns of 0% and 4%, the
tables also show when the Contract would go into default, at which time
additional payments would be needed to keep it in force.
The amounts shown for the death benefit and cash surrender value as of each
Contract anniversary reflect the fact that the net investment return on the
assets held in the subaccounts is lower than the gross after tax return of the
portfolios. This is because these tables assume a total Series Fund expense
ratio of 0.54% (taking into account the offsets described under The Prudential
Series Fund, Inc. on page 4) and also reflect the daily charge to the Account
for the cost of administration, which is equivalent to an effective annual
charge of 0.35%, and the daily charge to the Account for assuming mortality and
expense risks, which is equivalent to an effective annual charge of 0.9%. The
actual fees and expenses of the portfolios associated with a particular Contract
may be more or less than 0.54% and will depend on which subaccounts are
selected. Based on the above assumptions, gross annual rates of return of 0%,
4%, 8%, and 12% thus correspond in the tables to approximate net annual rates of
return of -1.79%, 2.21%, 6.21%, and 10.21%.
12
<PAGE>
The tables on pages T1 and T3 also reflect the fact that Pruco Life of New
Jersey generally makes its monthly charge for providing insurance protection at
an amount equal to 0.05% per month (approximately 0.6% to 0.65% per year) of the
assets in the subaccounts attributable to the Contract, even though it has the
contractual right to charge a higher amount. Where the amount credited under a
Contract falls to such a level as to make this monthly charge inadequate in
Pruco Life of New Jersey's judgment (i.e., where the Contract fund value is at
least 40% below that which would exist were a net rate of 6% earned in the
applicable subaccounts and maximum mortality charges deducted), Pruco Life of
New Jersey will deduct the maximum monthly mortality charge. See Charge for
insurance protection, page 9. The 0% and 4% columns in the tables on pages T1
and T3 reflect the deduction of these larger mortality charges in later years in
accordance with this standard. The tables on pages T2 and T4 reflect the
deduction of the maximum cost of insurance charge at all times, even though
Pruco Life of New Jersey does not currently intend to charge the maximum
contractual cost of insurance rates other than under the circumstances where the
Contract fund value falls to a specified level, as explained above. All of the
tables reflect the deduction of a sales charge in the calculation of the cash
surrender value during the first 6 Contract years.
The tables also reflect the fact that no charges for federal or state income
taxes are currently made against the Account. If such a charge is made in the
future, it will take a higher gross rate of return than it does now to produce
the net after-tax returns shown in the tables.
13
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
MALE ISSUE AGE 35
$20,000 INITIAL PREMIUM PAYMENT
USING CURRENT SCHEDULE OF MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
---------------------------------------------------- ----------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premium Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ----------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net) (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 20,800 $133,307 $133,307 $133,307 $ 133,307 $17,412 $18,121 $ 18,893 $ 19,672
2 $ 21,632 $133,307 $133,307 $133,307 $ 133,307 $17,185 $18,613 $ 20,098 $ 21,723
3 $ 22,497 $133,307 $133,307 $133,307 $ 133,307 $16,958 $19,116 $ 21,449 $ 23,969
4 $ 23,397 $133,307 $133,307 $133,307 $ 133,307 $16,733 $19,631 $ 22,889 $ 26,536
5 $ 24,333 $133,307 $133,307 $133,307 $ 133,307 $16,509 $20,157 $ 24,422 $ 29,380
6 $ 25,306 $133,307 $133,307 $133,307 $ 133,307 $16,286 $20,694 $ 26,054 $ 32,525
7 $ 26,319 $133,307 $133,307 $133,307 $ 133,307 $16,562 $21,901 $ 28,653 $ 37,116
8 $ 27,371 $133,307 $133,307 $133,307 $ 133,307 $15,973 $22,251 $ 30,250 $ 40,661
9 $ 28,466 $133,307 $133,307 $133,307 $ 133,307 $15,217 $22,607 $ 31,937 $ 44,544
10 $ 29,605 $133,307 $133,307 $133,307 $ 133,307 $14,432 $22,968 $ 33,717 $ 48,798
15 $ 36,019 $133,307 $133,307 $133,307 $ 148,606 $ 9,957 $24,863 $ 44,222 $ 76,998
20 $ 43,822 $133,307 $133,307 $133,307 $ 194,395 $ 3,994 $25,781 $ 58,001 $ 121,497
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 266,477 $ 0(2) $21,182 $ 76,073 $ 191,710
30 $ 64,868 $ 0 $133,307 $133,307 $ 378,120 $ 0 $11,112 $ 99,776 $ 302,496
35 $ 78,922 $ 0 $ 0(2) $151,810 $ 553,695 $ 0 $ 0(2) $130,870 $ 477,323
40 $ 96,020 $ 0 $ 0 $188,834 $ 828,573 $ 0 $ 0 $171,667 $ 753,248
45 $116,824 $ 0 $ 0 $240,950 $1,271,907 $ 0 $ 0 $225,187 $1,188,698
</TABLE>
(1) Illustrated values assume 2% state and/or local premium taxes, no
Contract loan, and the deduction of the monthly cost of insurance charge
in accordance with the standard explained in the prospectus. The cash
surrender values reflect the contingent deferred sales charges applicable
to surrenders within the first 6 Contract years. The face amount is based
upon the assumption that at issuance the fixed-rate option is not being
credited more than 6%.
(2) Based on a gross return of 0%, the Contract would go into default in
policy year 23 unless an additional premium payment was made. Based on a
gross return of 4%, the Contract would go into default in policy year 34
unless an additional premium payment was made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING
INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES
OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF NEW JERSEY OR THE SERIES FUND
THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
T1
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
MALE ISSUE AGE 35
$20,000 INITIAL PREMIUM PAYMENT
USING MAXIMUM CONTRACTUAL MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
---------------------------------------------------- ----------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premium Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ----------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net) (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $ 20,800 $133,307 $133,307 $133,307 $ 133,307 $17,294 $18,003 $ 18,763 $ 19,543
2 $ 21,632 $133,307 $133,307 $133,307 $ 133,307 $16,929 $18,358 $ 19,845 $ 21,450
3 $ 22,497 $133,307 $133,307 $133,307 $ 133,307 $16,542 $18,703 $ 21,041 $ 23,564
4 $ 23,397 $133,307 $133,307 $133,307 $ 133,307 $16,132 $19,033 $ 22,301 $ 25,965
5 $ 24,333 $133,307 $133,307 $133,307 $ 133,307 $15,694 $19,346 $ 23,627 $ 28,617
6 $ 25,306 $133,307 $133,307 $133,307 $ 133,307 $15,225 $19,636 $ 25,022 $ 31,546
7 $ 26,319 $133,307 $133,307 $133,307 $ 133,307 $15,177 $20,516 $ 27,306 $ 35,858
8 $ 27,371 $133,307 $133,307 $133,307 $ 133,307 $14,470 $20,546 $ 28,598 $ 39,143
9 $ 28,466 $133,307 $133,307 $133,307 $ 133,307 $13,735 $20,540 $ 29,940 $ 42,747
10 $ 29,605 $133,307 $133,307 $133,307 $ 133,307 $12,970 $20,495 $ 31,336 $ 46,702
15 $ 36,019 $133,307 $133,307 $133,307 $ 141,418 $ 8,583 $19,544 $ 39,188 $ 73,273
20 $ 43,822 $133,307 $133,307 $133,307 $ 184,987 $ 2,685 $16,698 $ 48,604 $ 115,617
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 253,514 $ 0(2) $10,361 $ 59,670 $ 182,384
30 $ 64,868 $ 0 $ 0(2) $133,307 $ 359,654 $ 0 $ 0(2) $ 72,745 $ 287,723
35 $ 78,922 $ 0 $ 0 $133,307 $ 526,497 $ 0 $ 0 $ 88,518 $ 453,876
40 $ 96,020 $ 0 $ 0 $133,307 $ 787,560 $ 0 $ 0 $109,465 $ 715,963
45 $116,824 $ 0 $ 0 $151,812 $1,207,481 $ 0 $ 0 $141,880 $1,128,487
</TABLE>
(1) Illustrated values assume 2% state and/or local premium taxes, no
Contract loan, and the deduction of maximum monthly cost of insurance
charges. The cash surrender values reflect the contingent deferred sales
charges applicable to surrenders within the first 6 Contract years. The
face amount is based upon the assumption that at issuance the fixed-rate
option is not being credited more than 6%.
(2) Based on a gross return of 0% and the deduction of maximum cost of
insurance charges, the Contract would go into default in policy year 22
unless an additional premium payment was made. Based on a gross return of
4% and the deduction of maximum cost of insurance charges, the Contract
would go into default in policy year 30 unless an additional premium
payment was made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING
INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES
OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF NEW JERSEY OR THE SERIES FUND
THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
T2
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
FEMALE ISSUE AGE 55
$100,000 INITIAL PREMIUM PAYMENT
USING CURRENT SCHEDULE OF MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
---------------------------------------------------- ----------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premium Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ----------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net) (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $104,000 $357,468 $357,468 $357,468 $ 357,468 $88,836 $ 92,598 $ 96,575 $100,551
2 $108,160 $357,468 $357,468 $357,468 $ 357,468 $87,677 $ 94,965 $102,543 $111,013
3 $112,486 $357,468 $357,468 $357,468 $ 357,468 $86,523 $ 97,531 $109,436 $122,475
4 $116,986 $357,468 $357,468 $357,468 $ 357,468 $85,374 $100,156 $116,779 $135,390
5 $121,665 $357,468 $357,468 $357,468 $ 357,468 $84,231 $102,839 $124,600 $149,898
6 $126,532 $357,468 $357,468 $357,468 $ 357,468 $83,094 $105,583 $132,931 $165,943
7 $131,593 $357,468 $357,468 $357,468 $ 357,468 $84,498 $111,740 $146,188 $189,366
8 $136,857 $357,468 $357,468 $357,468 $ 357,468 $82,489 $113,526 $154,338 $207,451
9 $142,331 $357,468 $357,468 $357,468 $ 357,468 $77,790 $115,341 $162,941 $227,264
10 $148,024 $357,468 $357,468 $357,468 $ 358,516 $72,507 $117,184 $172,024 $248,969
15 $180,094 $357,468 $357,468 $357,468 $ 506,776 $39,951 $126,854 $225,624 $392,849
20 $219,112 $ 0(2) $357,468 $357,468 $ 725,263 $ 0(2) $137,322 $295,924 $619,882
25 $266,584 $ 0 $357,468(2) $426,949 $1,075,928 $ 0 $148,653(2) $388,135 $978,116
</TABLE>
(1) Illustrated values assume no deduction for state and/or local premium
taxes, no Contract loan, and the deduction of the monthly cost of
insurance charge in accordance with the standard explained in the
prospectus. The cash surrender values reflect the contingent deferred
sales charges applicable to surrenders within the first 6 Contract years.
The face amount is based upon the assumption that at issuance the
fixed-rate option is not being credited more than 6%.
(2) Based on a gross return of 0%, the Contract would go into default in
policy year 20 unless an additional premium payment was made. Based on a
gross return of 4%, the Contract would go into default in policy year 32
unless an additional premium payment was made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING
INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES
OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF NEW JERSEY OR THE SERIES FUND
THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
T3
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
FEMALE ISSUE AGE 55
$100,000 INITIAL PREMIUM PAYMENT
USING MAXIMUM CONTRACTUAL MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
---------------------------------------------------- ----------------------------------------------------
Assuming Hypothetical Gross (and Net) Assuming Hypothetical Gross (and Net)
Premium Annual Investment Return of Annual Investment Return of
End of Accumulated ---------------------------------------------------- ----------------------------------------------------
Policy at 4% Interest 0% Gross 4% Gross 8% Gross 12% Gross 0% Gross 4% Gross 8% Gross 12% Gross
Year Per Year (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net) (-1.79% Net) (2.21% Net) (6.21% Net) (10.21% Net)
------ -------------- ------------ ----------- ----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 $104,000 $357,468 $357,468 $357,468 $357,468 $87,660 $91,302 $ 95,275 $ 99,249
2 $108,160 $357,468 $357,468 $357,468 $357,468 $85,169 $92,451 $100,029 $108,285
3 $112,486 $357,468 $357,468 $357,468 $357,468 $82,528 $93,527 $105,440 $118,305
4 $116,986 $357,468 $357,468 $357,468 $357,468 $79,732 $94,496 $111,149 $129,843
5 $121,665 $357,468 $357,468 $357,468 $357,468 $76,762 $95,339 $117,168 $142,652
6 $126,532 $357,468 $357,468 $357,468 $357,468 $73,585 $96,023 $123,503 $156,875
7 $131,593 $357,468 $357,468 $357,468 $357,468 $72,327 $99,486 $134,174 $178,014
8 $136,857 $357,468 $357,468 $357,468 $357,468 $67,763 $98,681 $139,887 $194,104
9 $142,331 $357,468 $357,468 $357,468 $357,468 $62,897 $97,547 $145,770 $211,855
10 $148,024 $357,468 $357,468 $357,468 $357,468 $57,674 $96,031 $151,818 $231,481
15 $180,094 $357,468 $357,468 $357,468 $470,311 $25,105 $81,423 $185,234 $364,582
20 $219,112 $ 0(2) $357,468 $357,468 $672,836 $ 0(2) $46,114 $224,814 $575,073
25 $266,584 $ 0 $ 0(2) $357,468 $997,654 $ 0 $ 0(2) $271,473 $906,957
</TABLE>
(1) Illustrated values assume no deduction for state and/or local premium
taxes, no Contract loan, and the deduction of maximum monthly cost of
insurance charges. The cash surrender values reflect the contingent
deferred sales charges applicable to surrenders within the first 6
Contract years. The face amount is based upon the assumption that at
issuance the fixed-rate option is not being credited more than 6%.
(2) Based on a gross return of 0% and the deduction of maximum cost of
insurance charges, the Contract would go into default in policy year 18
unless an additional premium payment was made. Based on a gross return of
4% and the deduction of maximum cost of insurance charges, the Contract
would go into default in policy year 24 unless an additional premium
payment was made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN
THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A
REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS INCLUDING THE INVESTMENT ALLOCATIONS MADE BY AN OWNER, PREVAILING
INTEREST RATES, AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH SURRENDER
VALUE FOR A CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL RATES
OF RETURN AVERAGED 0%, 4%, 8%, AND 12% OVER A PERIOD OF YEARS BUT ALSO
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATIONS CAN BE MADE BY PRUCO LIFE OF NEW JERSEY OR THE SERIES FUND
THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
T4
<PAGE>
When Proceeds Are Paid. Pruco Life of New Jersey will generally pay any death
benefit, cash surrender value or loan proceeds within 7 days after receipt at a
Pruco Life of New Jersey Home Office of all the documents required for such a
payment. Other than the death benefit, which is determined as of the date of
death, the amount will be determined as of the end of the valuation period in
which the necessary documents are received. However, Pruco Life of New Jersey
may delay payment of proceeds from the subaccount[s] and the portion of the
death benefit due under the Contract in excess of the face amount if the
disposal or valuation of the Account's assets is not reasonably practicable
because the New York Stock Exchange is closed for other than a regular holiday
or weekend, trading is restricted by the SEC or the SEC declares that an
emergency exists.
With respect to the amount of any cash surrender value allocated to the
fixed-rate option, Pruco Life of New Jersey expects to pay the cash surrender
value promptly upon request. However, Pruco Life of New Jersey has the right to
delay payment of such cash surrender value for up to 6 months (or a shorter
period if required by applicable law). Pruco Life of New Jersey will pay
interest of at least 3% a year if it delays such a payment for 30 days or more
(or a shorter period if required by applicable law).
Reports to Contract Owners. Once each Contract year, Contract owners will be
sent statements that provide certain information pertinent to their own
Contract. These statements detail values and transactions made and specific
Contract data that apply only to each particular Contract. On request, a
Contract owner will be sent a current statement in a form similar to that of the
annual statement described above, but Pruco Life of New Jersey may limit the
number of such requests or impose a reasonable charge if such requests are made
too frequently.
Each Contract owner will be sent an annual report for the Account. Contract
owners will also be sent annual and semi-annual reports of the Series Fund
showing the financial condition of the portfolios and the investments held in
each.
Federal Tax Status. Each prospective purchaser is urged to consult a qualified
tax advisor. The following discussion is not intended as tax advice, and it is
not a complete statement of what the effect of federal income taxes will be
under all circumstances. Rather, it provides information about how Pruco Life of
New Jersey believes the current laws apply in the most commonly occurring
circumstances. There is no guarantee, however, that the current federal income
tax laws, regulations or interpretations will not change.
Treatment as Life Insurance. Under provisions of the Internal Revenue Code (the
"Code"), life insurance policies like the Contract will be treated as life
insurance for tax purposes as long as the Contract satisfies certain
definitional tests set forth in Section 7702 of the Code and as long as the
underlying investments for the Contract satisfies diversification requirements
under Section 817(h) of the Code. (For further detail on diversification
requirements, see DIVIDENDS, DISTRIBUTIONS, AND TAXES in the attached prospectus
for the Series Fund.)
Pruco Life of New Jersey believes that the Contract meets these definitional and
diversification requirements and accordingly will be treated as life insurance
for tax purposes. This means that: (1) the death benefit should be excludible
from the gross income of the beneficiary under Section 101(a) of the Code; and
(2) except as noted below, the Contract owner should not be taxed on any part of
the Contract fund, including additions attributable to interest, dividends or
appreciation, until amounts are distributed under the Contract.
However, Section 7702 of the Code which defines life insurance for tax purposes
gives the Secretary of the Treasury authority to prescribe regulations to carry
out the purposes of the Section. In this regard, proposed regulations governing
mortality charges were issued in 1991 and proposed regulations under Sections
101, 7702 and 7702A governing the treatment of life insurance policies that
provide accelerated death benefits were issued in 1992. None of these proposed
regulations has yet been finalized. Additional regulations under Section 7702
may also be promulgated in the future. Moreover, in connection with the issuance
of temporary regulations relating to diversification requirements under Section
817(h), the Treasury Department announced that such regulations do not provide
guidance concerning the extent to which Contract owners may direct their
investments to particular divisions of a separate account. Such guidance will be
included in regulations or rulings under Section 817(d) relating to the
definition of a variable contract.
Pruco Life of New Jersey intends to comply with final regulations issued under
Sections 7702 and 817. Therefore, it reserves the right to make such changes as
it deems necessary to assure that the Contract continues to qualify as life
insurance for tax purposes. Any such changes will apply uniformly to affected
Contract owners and will be made only after advance written notice to affected
Contract owners.
Pre-Death Distributions. Section 7702A of the Code provides rules regarding the
federal income tax treatment of loans and other pre-death distributions from the
Contract if issued after June 20, 1988. It provides that, with respect to life
insurance policies issued after June 20, 1988, which, like the Contract, provide
for the payment of premiums faster than would be allowed under a policy
providing for paid-up insurance after the payment of seven level annual
premiums: (1) policy loans are treated as distributions; (2) all distributions
from the policy before the death of the insured are generally includible in
gross income on an income first basis (i.e., distributions are includible in
income to the extent the Contract fund exceeds the gross premiums paid for the
Contract increased by the
14
<PAGE>
amount of any loans previously includible in income and reduced by any untaxed
amounts previously received other than the amount of any loans excludible from
income). In addition, pre-death distributions from such Contracts (including
full surrenders) will be subject to a penalty of 10 percent of the amount
includible in income unless the amount is distributed on or after age 59 1/2, on
account of the taxpayer's disability, or as a life annuity. It is presently
unclear how the penalty tax provisions apply to Contracts owned by nonnatural
persons such as corporations.
Under certain circumstances, Modified Endowment Contracts issued during any
calendar year will be treated as a single contract for purposes of applying the
above rules.
Section 7702A does not change the treatment of death benefit proceeds under the
Contract. Accordingly, as stated previously, such amounts are excludible from
the gross income of the beneficiary. Also, Section 7702A does not change the
general rule that a Contract owner is not taxed on any part of the Contract
fund, including additions attributable to interest, dividends or appreciation,
unless amounts are distributed.
Withholding. The taxable portion of any amounts received under the Contract will
be subject to withholding to meet federal income tax obligations. If the
Contract owner fails to elect that no taxes be withheld, Pruco Life of New
Jersey will withhold from each payment the appropriate percentage of the taxable
portion of the payment. Pruco Life of New Jersey will provide the Contract owner
with forms and instructions concerning the right to elect that no taxes be
withheld from the taxable portion of any payment. All recipients may be subject
to penalties under the estimated tax payment rules if withholding and estimated
tax payments are not sufficient. Contract owners who do not provide a social
security number or other taxpayer identification number will not be permitted to
elect out of withholding.
Other Tax Considerations. Transfer of the Contract to a new owner or assignment
of the Contract may have tax consequences depending on the circumstances. In the
case of a transfer of the contract for a valuable consideration, the death
benefit may be subject to federal income taxes under section 101(a) of the Code.
In addition, designation of a beneficiary who is either 37 1/2 years younger
than the Contract owner or a grandchild of the Contract owner may have
Generation Skipping Transfer tax consequences under Section 2601 of the Code.
The individual situation of each owner or beneficiary will determine the federal
estate taxes and the state and local estate, inheritance, and other taxes due if
the owner or insured dies.
Deductions for interest paid or accrued on Contract debt or on other loans
incurred or continued to purchase or carry the Contract will be disallowed under
Section 264 of the Code. For business-owned life insurance, Section 264(a)(1) of
the Code also precludes business Contract owners from deducting premium
payments. The code also imposes an indirect tax upon additions to the Contract
fund or the receipt of death benefits under business-owned life insurance
policies under certain circumstances by way of the corporate alternative minimum
tax.
Taxes on Pruco Life of New Jersey. Although the Account is registered as an
investment company, it is not a separate taxpayer for purposes of the Code. The
earnings of the Account are taxed as part of the operations of Pruco Life of New
Jersey. No charge is currently being made to the Account for company federal
income taxes. Pruco Life of New Jersey will review the question of a charge to
the Account for company federal income taxes periodically. Such a charge may be
made in future years for any federal income taxes that would be attributable to
the Account.
Under current laws Pruco Life of New Jersey may incur state and local taxes (in
addition to premium taxes). At present, these other taxes are not significant
and they are not charged against the Contracts or the Account. If there is a
material change in applicable state or local tax laws, the imposition of any
such taxes upon Pruco Life of New Jersey that are attributable to the Account
may result in a corresponding charge against the Account.
The Fixed-Rate Option. Because of exemptive and exclusionary provisions,
interests in the fixed-rate option under the Contract have not been registered
under the Securities Act of 1933 and the general account has not been registered
as an investment company under the Investment Company Act of 1940. Accordingly,
interests in the fixed-rate option are not subject to the provisions of these
Acts, and Pruco Life of New Jersey has been advised that the staff of the
Securities and Exchange Commission has not reviewed the disclosure in this
prospectus relating to the fixed-rate option. Disclosure regarding the
fixed-rate option may, however, be subject to certain generally applicable
provisions of federal securities laws relating to the accuracy and completeness
of statements made in prospectuses.
As explained earlier, a Contract owner may elect to allocate, either initially
or by transfer, all or part of the amount credited under the Contract to a
fixed-rate option, and the amount so allocated or transferred becomes part of
Pruco Life of New Jersey's general assets. Sometimes this is referred to as
Pruco Life of New Jersey's general account, which consists of all assets owned
by Pruco Life of New Jersey other than those in the Account and in other
separate accounts that have been or may be established by Pruco Life of New
Jersey. Subject to applicable law, Pruco Life of New Jersey has sole discretion
over the investment of the assets of the general account, and
15
<PAGE>
Contract owners do not share in the investment experience of those assets.
Instead, Pruco Life of New Jersey guarantees that the part of the Contract fund
allocated to the fixed-rate option will accrue interest daily at an effective
annual rate that Pruco Life of New Jersey declares periodically, but not less
than an effective annual rate of 3%. Currently, declared interest rates remain
in effect from the date money is allocated to the fixed-rate option until the
third Contract anniversary following the date of the allocation. Thereafter, a
new crediting rate will be declared each year, and will remain in effect for the
calendar year. Pruco Life of New Jersey reserves the right to change this
practice. Pruco Life of New Jersey is not obligated to credit interest at a
higher rate than 3%, although in its sole discretion it may do so. Different
crediting rates may be declared for different portions of the Contract fund
allocated to the fixed-rate option. On request, a Contract owner will be advised
of the interest rates that currently apply to his or her Contract.
Transfers from the fixed-rate option are subject to strict limits. (See
Transfers, page 7). The payment of any cash surrender value attributable to the
fixed-rate option may be delayed up to 6 months (see When Proceeds Are Paid,
14).
Voting Rights. As stated above, all of the assets held in the subaccounts of the
Account will be invested in shares of the corresponding portfolios of the Series
Fund. Pruco Life of New Jersey is the legal owner of those shares and as such
has the right to vote on any matter voted on at Series Fund shareholders
meetings. However, Pruco Life of New Jersey will, as required by law, vote the
shares of the Series Fund at any regular and special shareholders meetings it is
required to hold in accordance with voting instructions received from Contract
owners. The Series Fund will not hold annual shareholders meetings when not
required to do so under Maryland law or the Investment Company Act of 1940.
Series Fund shares for which no timely instructions from Contract owners are
received, and any shares attributable to general account investments of Pruco
Life of New Jersey will be voted in the same proportion as shares in the
respective portfolios for which instructions are received. Should the applicable
federal securities laws or regulations, or their current interpretation, change
so as to permit Pruco Life of New Jersey to vote shares of the Series Fund in
its own right, it may elect to do so.
Matters on which Contract owners may give voting instructions include the
following: (1) election of the Board of Directors of the Series Fund; (2)
ratification of the independent accountant of the Series Fund; (3) approval of
the investment advisory agreement for a portfolio of the Series Fund
corresponding to the Contract owner's selected subaccount[s]; (4) any change in
the fundamental investment policy of a portfolio corresponding to the Contract
owner's selected subaccount[s]; and (5) any other matter requiring a vote of the
shareholders of the Series Fund. With respect to approval of the investment
advisory agreement or any change in a portfolio's fundamental investment policy,
Contract owners participating in such portfolios will vote separately on the
matter, pursuant to the requirements of Rule 18f-2 under the 1940 Act.
The number of Series Fund shares for which instructions may be given by a
Contract owner is determined by dividing the portion of the value of the
Contract derived from participation in a subaccount, by the value of one share
in the corresponding portfolio of the Series Fund. The number of votes for which
each Contract owner may give Pruco Life of New Jersey instructions will be
determined as of the record date chosen by the Board of Directors of the Series
Fund. Pruco Life of New Jersey will furnish Contract owners with proper forms
and proxies to enable them to give these instructions. Pruco Life of New Jersey
reserves the right to modify the manner in which the weight to be given voting
instructions is calculated where such a change is necessary to comply with
current federal regulations or interpretations of those regulations.
Pruco Life of New Jersey may, if required by state insurance regulations,
disregard voting instructions if such instructions would require shares to be
voted so as to cause a change in the sub-classification or investment objectives
of one or more of the Series Fund's portfolios, or to approve or disapprove an
investment advisory contract for the Series Fund. In addition, Pruco Life of New
Jersey itself may disregard voting instructions that would require changes in
the investment policy or investment advisor of one or more of the Series Fund's
portfolios, provided that Pruco Life of New Jersey reasonably disapproves such
changes in accordance with applicable federal regulations. If Pruco Life of New
Jersey does disregard voting instructions, it will advise Contract owners of
that action and its reasons for such action in the next annual or semi-annual
report to Contract owners.
Sale of the Contract and Sales Commissions. Pruco Securities Corporation
("Prusec"), an indirect wholly-owned subsidiary of The Prudential, acts as the
principal underwriter of the Contract. Prusec, organized in 1971 under New
Jersey law, is registered as a broker and dealer under the Securities Exchange
Act of 1934 and is a member of the National Association of Securities Dealers,
Inc. Prusec's principal business address is 1111 Durham Avenue, South
Plainfield, New Jersey 07080. The Contract is sold by registered representatives
of Prusec who are also authorized by state insurance departments to do so. The
Contract may also be sold through other broker-dealers authorized by Prusec and
applicable law to do so. Registered representatives of such other broker-dealers
may be paid on a different basis than described below. The maximum commission
that will be paid to the representative is 3% of the premium received, and the
amount paid to the broker-dealer to cover both the individual representative's
commission and other distribution expenses will not exceed 5.5% of the premium.
The
16
<PAGE>
representative may be required to return all of the first year commission if the
Contract is not continued through the first year. Representatives who meet
certain productivity, profitability, and persistency standards with regard to
the sale of the Contract will be eligible for additional compensation.
Sales expenses in any year are not equal to the deduction for sales load in that
year. Pruco Life of New Jersey expects to recover its total sales expenses over
the periods the Contracts are in effect. To the extent that the sales charges
are insufficient to cover total sales expenses, the sales expenses will be
recovered from Pruco Life of New Jersey's surplus, which may include the amounts
derived from the mortality and expense risk charge, described in Item 5 under
Charges, page 8.
Substitution of Series Fund Shares. Although Pruco Life of New Jersey believes
it to be unlikely, it is possible that in the judgment of its management, one or
more of the portfolios of the Series Fund may become unsuitable for investment
by Contract owners because of investment policy changes, tax law changes or the
unavailability of shares for investment. In that event, Pruco Life of New Jersey
may seek to substitute the shares of another portfolio or of an entirely
different mutual fund. Before this can be done, the approval of the SEC, and
possibly one or more state insurance departments, will be required. Contract
owners will be notified of such substitution.
Legal Considerations Relating to Sex-Distinct Premiums and Benefits. The
Contract generally employs mortality tables that distinguish between males and
females. Thus, initial amounts of insurance that a given premium will buy, cost
of insurance charges, and benefits under Contracts issued on males and females
of the same age will generally differ. However, in those states that have
adopted regulations prohibiting sex-distinct insurance rates, initial amounts of
insurance, cost of insurance charges and benefits will be based on male
mortality tables whether the insured is male or female. In addition, employers
and employee organizations considering purchase of a Contract should consult
their legal advisors to determine whether purchase of a Contract based on
sex-distinct actuarial tables is consistent with Title VII of the Civil Rights
Act of 1964 or other applicable law. Pruco Life of New Jersey may offer the
Contract with unisex mortality rates to such prospective purchasers.
Other General Contract Provisions.
Beneficiary. The beneficiary is designated and named in the application by the
Contract owner. Thereafter, the owner may change the beneficiary, provided it is
in accordance with the terms of the Contract. Should the insured die with no
surviving beneficiary, the insured's estate will become the beneficiary.
Incontestability. After the Contract has been in force during the insured's
lifetime for 2 years from the Contract date, Pruco Life of New Jersey will not
contest its liability under the Contract in accordance with its terms.
Misstatement of Age or Sex. If the insured's stated age or sex (except where
unisex rates apply) or both are incorrect in the Contract, Pruco Life of New
Jersey will adjust the benefits payable, as required by law, to reflect what the
premium would have purchased for the correct age and sex.
Suicide Exclusion. Generally, if the insured, whether sane or insane, dies by
suicide within 2 years from the Contract date, Pruco Life of New Jersey will pay
no more under the Contract than the sum of the premiums paid.
Assignment. This Contract may not be assigned if such assignment would violate
any federal, state or local law or regulation. Generally, the Contract may not
be assigned to another insurance company without Pruco Life's consent. Pruco
Life of New Jersey assumes no responsibility for the validity or sufficiency of
any assignment, and it will not be obligated to comply with any assignment
unless it has received a copy at one of its Home Offices.
Settlement Options. The Contract grants to most owners, or to the beneficiary, a
wide variety of optional ways of receiving Contract proceeds, other than in a
lump sum. Any Pruco Life of New Jersey representative authorized to sell this
Contract can explain these options upon request.
State Regulation. Pruco Life of New Jersey is subject to regulation and
supervision by the Department of Insurance of the State of New Jersey, which
periodically examines its operations and financial condition. It is also subject
to the insurance laws and regulations of all jurisdictions in which it is
authorized to do business.
Pruco Life of New Jersey is required to submit annual statements of its
operations, including financial statements, to the insurance departments of the
various jurisdictions in which it does business to determine solvency and
compliance with local insurance laws and regulations.
In addition to the annual statements referred to above, Pruco Life of New Jersey
is required to file with New Jersey and other jurisdictions a separate statement
with respect to the operations of all its variable contract accounts, in a form
promulgated by the National Association of Insurance Commissioners.
Additional Information. A registration statement has been filed with the SEC
under the Securities Act of 1933, relating to the offering described in this
prospectus. This prospectus does not include all of the information set forth in
the registration statement. Certain portions have been omitted pursuant to the
rules and regulations of the
17
<PAGE>
SEC. The omitted information may, however, be obtained from the SEC's principal
office in Washington, D.C., upon payment of a prescribed fee.
Further information may also be obtained from Pruco Life of New Jersey's office.
The address and telephone number are set forth on the cover of this prospectus.
Experts. The financial statements included in this prospectus have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein, and are included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing. Deloitte &
Touche LLP's principal business address is Two Hilton Court, Parsippany, New
Jersey 07054-0319. Actuarial matters included in this prospectus have been
examined by Paul Haley, FSA, CLU, and ChFC, whose opinion is filed as an exhibit
to the registration statement.
Litigation. No litigation is pending that would have a material effect upon the
Account or the Series Fund.
Financial Statements. The financial statements of Pruco Life of New Jersey
included herein should be distinguished from the financial statements of the
Account and should be considered only as bearing upon the ability of Pruco Life
of New Jersey to meet its obligations under the Contracts.
18
<PAGE>
DIRECTORS AND OFFICERS
The directors and officers of Pruco Life of New Jersey, listed with their
principal occupations during the past 5 years, are shown below.
DIRECTORS OF PRUCO LIFE OF NEW JERSEY
E. MICHAEL CAULFIELD, Director. -- Chief Executive Officer, Prudential Preferred
Financial Services since 1995; 1993 to 1995: President, Prudential Preferred
Financial Services; 1992 to 1993: President, Prudential Property and Casualty
Insurance Company*; Prior to 1992: President of Investment Services of The
Prudential.
ROBERT P. HILL, Chairman and Director. -- Executive Vice President of The
Prudential.
GARNETT L. KEITH, JR., Director. -- Vice Chairman of The Prudential.
IRA J. KLEINMAN, Director. -- President, Prudential Select Marketing since 1993;
1992 to 1993: Senior Vice President of The Prudential; Prior to 1992: Vice
President of The Prudential.
ESTHER H. MILNES, President and Director. -- Senior Vice President and Chief
Actuary, Prudential Insurance and Financial Services since 1993; Prior to 1993:
Vice President and Associate Actuary of The Prudential.
I. EDWARD PRICE, Vice Chairman and Director. -- Chief Executive Officer,
International Insurance of The Prudential since 1994; 1993 to 1994: President,
International Insurance of The Prudential; Prior to 1993: Senior Vice President
and Company Actuary of The Prudential.
DONALD G. SOUTHWELL, Director. -- President, Prudential Insurance and Financial
Services since 1993; Prior to 1993: Senior Vice President of The Prudential.
OFFICERS WHO ARE NOT DIRECTORS
BEVERLY R. BARNEY, Senior Vice President. -- Vice President and Associate
Actuary, Prudential Insurance and Financial Services since 1995; 1993 to 1995:
Senior Vice President and Associate Actuary, Prudential Direct; 1991 to 1993:
Senior Vice President and Actuary of Pruco Life of New Jersey *; Prior to 1991:
Vice President and Actuary of Pruco Life of New Jersey *.
ROBERT EARL, Senior Vice President. -- Vice President, Strategic Initiatives,
Prudential Preferred Financial Services since 1993; Prior to 1993: Vice
President Regional Marketing of The Prudential.
JOHN P. GUALTIERI, Senior Vice President and General Counsel. -- Vice President
and Insurance Counsel of The Prudential since 1993. Prior to 1993: Senior Vice
President and General Counsel of Pruco Life of New Jersey *.
RICHARD F. LAMBERT, Senior Vice President, Chief Actuary, Appointed Actuary. --
Vice President and Associate Actuary, Prudential Preferred Financial Services
since 1993; 1991 to 1993: Vice President and Actuary of The Prudential. Prior to
1991: Vice President, Prudential Select Marketing.
DOROTHY K. LIGHT, Secretary. -- Vice President and Secretary of The Prudential.
DIANE M. MCGOVERN, Vice President and Actuary. -- Vice President and Assistant
Actuary of The Prudential.
MARTIN PFINSGRAFF, Treasurer. -- Vice President and Treasurer of The Prudential
since 1991; Prior to 1991: Managing Director, Corporate Finance of The
Prudential.
MICHAEL R. SHAPIRO, Senior Vice President. -- Senior Vice President, Prudential
Select Brokerage.
LAWRENCE J. SUNDRAM, Senior Vice President. -- Senior Vice President of Property
and Casualty, Prudential Insurance and Financial Services since 1994; 1993 to
1994: Vice President, Prudential Insurance and Financial Services; Prior to
1993: Vice President, District Agencies Marketing for The Prudential.
STEPHEN P. TOOLEY, Vice President, Comptroller and Chief Accounting Officer. --
Vice President and Comptroller, Prudential Insurance and Financial Services
since 1993; Prior to 1993: Director, Financial Analysis for The Prudential.
The business address of all directors and officers of Pruco Life of New Jersey *
is 213 Washington Street, Newark, New Jersey 07102-2992.
* Subsidiary of The Prudential
19
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF NET ASSETS
December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------
AGGRESSIVELY
MONEY COMMON MANAGED
TOTAL MARKET BOND STOCK FLEXIBLE
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 41,016,333 $ 2,164,431 $ 2,899,499 $ 5,206,182 $ 9,956,008
Receivable from Related Separate Account........ 47,436 37,197 0 9,759 0
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $ 41,063,769 $ 2,201,628 $ 2,899,499 $ 5,215,941 $ 9,956,008
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 4,824 0 0 0 0
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $ 41,058,945 $ 2,201,628 $ 2,899,499 $ 5,215,941 $ 9,956,008
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 40,899,534 $ 2,198,031 $ 2,896,631 $ 5,215,941 $ 9,944,583
Equity of Pruco Life Insurance Company of New
Jersey........................................ 159,411 3,597 2,868 0 11,425
-------------- -------------- -------------- -------------- --------------
$ 41,058,945 $ 2,201,628 $ 2,899,499 $ 5,215,941 $ 9,956,008
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
ZERO ZERO
CONSERVATIVELY COUPON COUPON HIGH
MANAGED BOND BOND YIELD STOCK
FLEXIBLE 1995 2000 BOND INDEX
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 16,800,898 $ 298,943 $ 268,367 $ 1,180,476 $ 505,690
Receivable from Related Separate Account........ 0 0 0 480 0
-------------- -------------- -------------- -------------- --------------
Total Assets.................................. $ 16,800,898 $ 298,943 $ 268,367 $ 1,180,956 $ 505,690
-------------- -------------- -------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 0 0 0 0
-------------- -------------- -------------- -------------- --------------
NET ASSETS........................................ $ 16,800,898 $ 298,943 $ 268,367 $ 1,180,956 $ 505,690
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 16,782,902 $ 294,217 $ 263,752 $ 1,180,956 $ 474,980
Equity of Pruco Life Insurance Company of New
Jersey........................................ 17,996 4,726 4,615 0 30,710
-------------- -------------- -------------- -------------- --------------
$ 16,800,898 $ 298,943 $ 268,367 $ 1,180,956 $ 505,690
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------
HIGH
DIVIDEND NATURAL GLOBAL
STOCK RESOURCES EQUITY
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 704,625 $ 342,464 $ 341,148
Receivable from Related Separate Account........ 0 0 0
-------------- -------------- --------------
Total Assets.................................. $ 704,625 $ 342,464 $ 341,148
-------------- -------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 4,824 0
-------------- -------------- --------------
NET ASSETS........................................ $ 704,625 $ 337,640 $ 341,148
-------------- -------------- --------------
-------------- -------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 701,490 $ 322,180 $ 301,628
Equity of Pruco Life Insurance Company of New
Jersey........................................ 3,135 15,460 39,520
-------------- -------------- --------------
$ 704,625 $ 337,640 $ 341,148
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------
AGGRESSIVELY
MONEY COMMON MANAGED
TOTAL MARKET BOND STOCK FLEXIBLE
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 1,496,669 $ 89,259 $ 193,401 $ 115,830 $ 282,537
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk and for
administration [Notes 3A and 3C].............. 527,924 27,508 40,100 64,201 128,738
Reimbursement for excess expenses [Note 3D]..... (76,088) (1,431) (1,774) (7,265) (27,075)
-------------- -------------- -------------- -------------- --------------
NET EXPENSES...................................... 451,836 26,077 38,326 56,936 101,663
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 1,044,833 63,182 155,075 58,894 180,874
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 737,795 0 7,032 215,201 289,966
Realized gain (loss) on shares redeemed
[average cost basis].......................... 369,820 0 1,263 104,549 77,644
Net unrealized loss on investments.............. (3,112,253) 0 (320,009) (293,926) (990,977)
-------------- -------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (2,004,638) 0 (311,714) 25,824 (623,367)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (959,805) $ 63,182 $ (156,639) $ 84,718 $ (442,493)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
ZERO ZERO
CONSERVATIVELY COUPON COUPON HIGH
MANAGED BOND BOND YIELD STOCK
FLEXIBLE 1995 2000 BOND INDEX
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 594,554 $ 18,678 $ 18,244 $ 119,255 $ 12,492
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk and for
administration [Notes 3A and 3C].............. 219,362 3,766 3,540 15,233 6,569
Reimbursement for excess expenses [Note 3D]..... (37,375) (642) (295) 0 0
-------------- -------------- -------------- -------------- --------------
NET EXPENSES...................................... 181,987 3,124 3,245 15,233 6,569
-------------- -------------- -------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 412,567 15,554 14,999 104,022 5,923
-------------- -------------- -------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 180,224 66 506 0 800
Realized gain (loss) on shares redeemed
[average cost basis].......................... 136,852 1,475 3,691 (4,705) 26,101
Net unrealized loss on investments.............. (1,089,272) (20,352) (46,137) (148,585) (33,405)
-------------- -------------- -------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (772,196) (18,811) (41,940) (153,290) (6,504)
-------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (359,629) $ (3,257) $ (26,941) $ (49,268) $ (581)
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------
HIGH
DIVIDEND NATURAL GLOBAL
STOCK RESOURCES EQUITY*
-------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 25,599 $ 3,393 $ 569
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk and for
administration [Notes 3A and 3C].............. 8,858 4,127 1,173
Reimbursement for excess expenses [Note 3D]..... 0 0 0
-------------- -------------- --------------
NET EXPENSES...................................... 8,858 4,127 1,173
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 16,741 (734) (604)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 37,048 6,890 35
Realized gain (loss) on shares redeemed
[average cost basis].......................... 12,270 3,595 0
Net unrealized loss on investments.............. (62,466) (28,200) (20,456)
-------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (13,148) (17,715) (20,421)
-------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ 3,593 $ (18,449) $ (21,025)
-------------- -------------- --------------
-------------- -------------- --------------
*Commenced
Business
on 5/1/94
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A1-A2
<PAGE>
STATEMENTS OF NET ASSETS (CONTINUED)
December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------
ZERO
COUPON
GOVERNMENT BOND
SECURITIES 2005
-------------- --------------
<S> <C> <C>
ASSETS
Investment in shares of The Prudential Series
Fund, Inc.
Portfolios at net asset value [Note 2]........ $ 247,784 $ 99,818
Receivable from Related Separate Account........ 0 0
-------------- --------------
Total Assets.................................. $ 247,784 $ 99,818
-------------- --------------
LIABILITIES
Payable to Related Separate Account............. 0 0
-------------- --------------
NET ASSETS........................................ $ 247,784 $ 99,818
-------------- --------------
-------------- --------------
NET ASSETS, representing:
Equity of Contract owners....................... $ 224,177 $ 98,066
Equity of Pruco Life Insurance Company of New
Jersey........................................ 23,607 1,752
-------------- --------------
$ 247,784 $ 99,818
-------------- --------------
-------------- --------------
</TABLE>
STATEMENTS OF OPERATIONS (CONTINUED)
For the year ended December 31, 1994
<TABLE>
<CAPTION>
SUBACCOUNTS
------------------------------
ZERO
COUPON
GOVERNMENT BOND
SECURITIES 2005
-------------- --------------
<S> <C> <C>
INVESTMENT INCOME
Dividend distributions received................. $ 16,539 $ 6,319
EXPENSES
Charges to Contract owners for assuming
mortality risk and expense risk and for
administration [Notes 3A and 3C].............. 3,376 1,373
Reimbursement for excess expenses [Note 3D]..... 0 (231)
-------------- --------------
NET EXPENSES...................................... 3,376 1,142
-------------- --------------
NET INVESTMENT INCOME (LOSS)...................... 13,163 5,177
-------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Capital gains distributions received............ 0 27
Realized gain (loss) on shares redeemed
[average cost basis].......................... (1,648) 8,733
Net unrealized loss on investments.............. (30,859) (27,609)
-------------- --------------
NET GAIN (LOSS) ON INVESTMENTS.................... (32,507) (18,849)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS....................... $ (19,344) $ (13,672)
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A3
<PAGE>
(This page intentionally left blank.)
A4
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------
MONEY
TOTAL MARKET BOND
------------------------------ ------------------------------ ------------------------------
1993
1994 (AS RESTATED) 1994 1993 1994 1993
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 1,044,833 $ 1,038,065 $ 63,182 $ 49,541 $ 155,075 $ 173,767
Capital gains distributions
received....................... 737,795 1,580,576 0 0 7,032 51,586
Realized gain (loss) on shares
redeemed
[average cost basis]........... 369,820 429,900 0 0 1,263 29,642
Net unrealized gain (loss) on
investments.................... (3,112,253) 1,954,096 0 0 (320,009) 65,962
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (959,805) 5,002,637 63,182 49,541 (156,639) 320,957
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... (2,579,601) (1,586,283) (244,736) (747,953) (767,709) (202,283)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (181,165) 66,584 (31,990) (82,676) (4,966) (6,686)
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (3,720,571) 3,482,938 (213,544) (781,088) (929,314) 111,988
NET ASSETS:
Beginning of year................ 44,779,516 41,296,578 2,415,172 3,196,260 3,828,813 3,716,825
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 41,058,945 $ 44,779,516 $ 2,201,628 $ 2,415,172 $ 2,899,499 $ 3,828,813
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A5
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------
AGGRESSIVELY
COMMON MANAGED
STOCK FLEXIBLE
------------------------------ ------------------------------
1994 1993 1994 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 58,894 $ 39,500 $ 180,874 $ 235,242
Capital gains distributions
received....................... 215,201 250,369 289,966 560,164
Realized gain (loss) on shares
redeemed
[average cost basis]........... 104,549 70,693 77,644 77,970
Net unrealized gain (loss) on
investments.................... (293,926) 511,282 (990,977) 495,241
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 84,718 871,844 (442,493) 1,368,617
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... (94,354) 296,325 (308,218) (213,182)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (6,951) (7,861) (134,119) 129,453
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (16,587) 1,160,308 (884,830) 1,284,888
NET ASSETS:
Beginning of year................ 5,232,528 4,072,220 10,840,838 9,555,950
-------------- -------------- -------------- --------------
End of year...................... $ 5,215,941 $ 5,232,528 $ 9,956,008 $ 10,840,838
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------
ZERO
CONSERVATIVELY COUPON
MANAGED BOND
FLEXIBLE 1995
------------------------------ ------------------------------
1994 1993 1994 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 412,567 $ 365,241 $ 15,554 $ 18,598
Capital gains distributions
received....................... 180,224 692,634 66 0
Realized gain (loss) on shares
redeemed
[average cost basis]........... 136,852 133,095 1,475 666
Net unrealized gain (loss) on
investments.................... (1,089,272) 680,450 (20,352) 1,868
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (359,629) 1,871,420 (3,257) 21,132
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... (1,263,406) (560,145) (22,618) (136)
-------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (6,607) 3,352 (25,259) 20,314
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (1,629,642) 1,314,627 (51,134) 41,310
NET ASSETS:
Beginning of year................ 18,430,540 17,115,913 350,077 308,767
-------------- -------------- -------------- --------------
End of year...................... $ 16,800,898 $ 18,430,540 $ 298,943 $ 350,077
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A6
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------------------------
ZERO
COUPON HIGH
BOND YIELD STOCK
2000 BOND INDEX
------------------------------ ------------------------------ ------------------------------
1993
1994 1993 1994 (AS RESTATED) 1994 1993
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 14,999 $ 15,427 $ 104,022 $ 102,983 $ 5,923 $ 6,020
Capital gains distributions
received....................... 506 123 0 0 800 1,356
Realized gain (loss) on shares
redeemed
[average cost basis]........... 3,691 10,111 (4,705) (6,633) 26,101 56,368
Net unrealized gain (loss) on
investments.................... (46,137) 17,788 (148,585) 125,922 (33,405) (5,451)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (26,941) 43,449 (49,268) 222,272 (581) 58,293
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... (46,949) (14,473) (69,722) (228,953) (89,546) (294,541)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 1,193 (8,399) (777) (13,200) (23,885) 41,804
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (72,697) 20,577 (119,767) (19,881) (114,012) (194,444)
NET ASSETS:
Beginning of year................ 341,064 320,487 1,300,723 1,320,604 619,702 814,146
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 268,367 $ 341,064 $ 1,180,956 $ 1,300,723 $ 505,690 $ 619,702
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A7
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------------------------------------------------------
HIGH
DIVIDEND NATURAL GLOBAL GOVERNMENT
STOCK RESOURCES EQUITY* SECURITIES
------------------------------ ------------------------------ -------------- --------------
1994 1993 1994 1993 1994 1994
-------------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 16,741 $ 9,349 $ (734) $ 446 $ (604) $ 13,163
Capital gains distributions
received....................... 37,048 17,834 6,890 5,304 35 0
Realized gain (loss) on shares
redeemed
[average cost basis]........... 12,270 7,372 3,595 4,713 0 (1,648)
Net unrealized gain (loss) on
investments.................... (62,466) 31,097 (28,200) 20,755 (20,456) (30,859)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 3,593 65,652 (18,449) 31,218 (21,025) (19,344)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... 92,943 309,220 69,185 164,781 324,291 (103,004)
-------------- -------------- -------------- -------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (5,084) 5,739 9,118 (4,632) 37,882 13,379
-------------- -------------- -------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 91,452 380,611 59,854 191,367 341,148 (108,969)
NET ASSETS:
Beginning of year................ 613,173 232,562 277,786 86,419 0 356,753
-------------- -------------- -------------- -------------- -------------- --------------
End of year...................... $ 704,625 $ 613,173 $ 337,640 $ 277,786 $ 341,148 $ 247,784
-------------- -------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- -------------- --------------
*Commenced
Business on
5/1/94
<CAPTION>
SUBACCOUNTS (CONTINUED)
-----------------------
GOVERNMENT
SECURITIES
--------------
1993
--------------
<S> <C>
OPERATIONS:
Net investment income (loss)..... $ 12,155
Capital gains distributions
received....................... 1,177
Realized gain (loss) on shares
redeemed
[average cost basis]........... 2,003
Net unrealized gain (loss) on
investments.................... 4,977
--------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ 20,312
--------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... 163,970
--------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ 2,123
--------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... 186,405
NET ASSETS:
Beginning of year................ 170,348
--------------
End of year...................... $ 356,753
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A8
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
For the years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------
ZERO
COUPON
BOND
2005
------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 5,177 $ 9,796
Capital gains distributions
received....................... 27 29
Realized gain (loss) on shares
redeemed
[average cost basis]........... 8,733 43,900
Net unrealized gain (loss) on
investments.................... (27,609) 4,205
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM OPERATIONS........ (13,672) 57,930
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS.... (55,758) (258,913)
-------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS
RESULTING FROM SURPLUS
TRANSFERS........................ (3,099) (12,747)
-------------- --------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.................... (72,529) (213,730)
NET ASSETS:
Beginning of year................ 172,347 386,077
-------------- --------------
End of year...................... $ 99,818 $ 172,347
-------------- --------------
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A10 AND A11.
A9
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
FOR THE YEARS ENDED DECEMBER 31, 1994 AND DECEMBER 31, 1993
NOTE 1: GENERAL
Pruco Life of New Jersey Single Premium Variable Life Account (the "Account")
was established on April 15, 1985 under New Jersey law as a separate investment
account of Pruco Life Insurance Company of New Jersey ("Pruco Life of New
Jersey") which is a wholly-owned subsidiary of Pruco Life Insurance Company (an
Arizona domiciled company) and is indirectly wholly-owned by The Prudential
Insurance Company of America ("The Prudential"). The assets of the Account are
segregated from Pruco Life of New Jersey's other assets.
The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. There are fourteen subaccounts within the Account,
each of which invests only in a corresponding portfolio of The Prudential Series
Fund, Inc. (the "Series Fund"). The Series Fund is a diversified open-end
management investment company, and is managed by The Prudential.
NOTE 2: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS
The net asset value per share for each portfolio of the Series Fund, the number
of shares of each portfolio held by the subaccounts of the Account and the
aggregate cost of investments in such shares at December 31, 1994 were as
follows:
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------
AGGRESSIVELY CONSERVATIVELY
PORTFOLIO MONEY COMMON MANAGED MANAGED
INFORMATION MARKET BOND STOCK FLEXIBLE FLEXIBLE
- ---------------------------- ------------ ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Number of shares: 216,443 288,842 251,964 642,488 1,191,979
Net asset value per share: $ 10.0000 $ 10.0384 $ 20.6624 $ 15.4960 $ 14.0950
Cost: $ 2,164,431 $ 3,084,483 $4,707,885 $ 9,615,356 $ 16,054,637
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
------------------------------------------------------------------------
ZERO ZERO
COUPON COUPON HIGH HIGH
PORTFOLIO BOND BOND YIELD STOCK DIVIDEND
INFORMATION 1995 2000 BOND INDEX STOCK
- ---------------------------- ------------ ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
Number of shares: 28,221 22,624 160,176 33,809 48,648
Net asset value per share: $ 10.5929 $ 11.8620 $ 7.3655 $ 14.9571 $ 14.4842
Cost: $ 306,251 $ 275,658 $1,340,621 $ 466,486 $ 724,439
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
-------------------------------------------------------
ZERO
COUPON
PORTFOLIO NATURAL GLOBAL GOVERNMENT BOND
INFORMATION RESOURCES EQUITY SECURITIES 2005
- ---------------------------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Number of shares: 23,711 24,580 23,686 9,290
Net asset value per share: $ 14.4432 $ 13.8789 $ 10.4614 $ 10.7441
Cost: $ 349,611 $ 361,603 $ 271,881 $ 99,638
</TABLE>
NOTE 3: CHARGES AND EXPENSES
A. Mortality Risk and Expense Risk Charges
The mortality risk and expense risk charges at an effective annual rate of
0.90% are applied daily against the net assets representing equity of
Contract owners held in each subaccount.
A10
<PAGE>
B. Deferred Sales Charge
A deferred sales charge is imposed upon the surrender of certain variable
life insurance contracts to compensate Pruco Life of New Jersey for sales
and other marketing expenses. The amount of any sales charge will depend on
the number of years that have elapsed since the Contract was issued. No
sales charge will be imposed after the sixth Contract year. No sales charge
will be imposed on death benefits.
C. Administrative Charge
The administrative charge at an effective annual rate of 0.35% is applied
daily against the net assets representing equity of Contract owners held in
each subaccount.
D. Expense Reimbursement
Pursuant to a prior merger agreement, the Account is reimbursed by Pruco
Life of New Jersey for expenses in excess of 0.40% of the average daily net
assets incurred by the Money Market, Bond, Common Stock, Aggressively
Managed Flexible, Conservatively Managed Flexible, Zero Coupon Bond 1995 and
the Zero Coupon Bond 2000 Portfolios of the Series Fund. In addition, the
Account is reimbursed by Pruco Life of New Jersey, on a non-guaranteed
basis, for expenses incurred by the Series Fund in excess of the effective
rate of 0.40% of the average daily net assets of the Zero Coupon Bond 2005
Portfolio.
NOTE 4: TAXES
The operations of the subaccounts form a part of, and are taxed with, the
operations of Pruco Life of New Jersey. Under the Internal Revenue Code, all
ordinary income and capital gains allocated to the Contract owners are not taxed
to Pruco Life of New Jersey. As a result, the net asset values of the
subaccounts are not affected by federal income taxes on distributions received
by the subaccounts.
NOTE 5: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SURPLUS TRANSFERS
The increase (decrease) in net assets resulting from surplus transfers
represents the net contributions of Pruco Life of New Jersey to the Account.
NOTE 6: RESTATEMENT
Subsequent to the issuance of the Account's previously issued December 31, 1993
financial statements, Pruco Life of New Jersey determined that in the High Yield
Bond subaccount, net assets and net increase in net assets resulting from
operations were overstated by approximately $7,795 due to the overvaluation of a
security held in the High Yield Bond Portfolio of the Series Fund at December
31, 1993. Accordingly, the comparative 1993 financial information included in
the statements of changes in net assets of the Account has been restated.
A11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners of
Pruco Life of New Jersey Single
Premium Variable Life Account and the
Board of Directors of Pruco Life
Insurance Company of New Jersey
Newark, New Jersey
We have audited the accompanying statements of net assets of Pruco Life of New
Jersey Single Premium Variable Life Account of Pruco Life Insurance Company of
New Jersey (comprising, respectively, the Money Market, Bond, Common Stock,
Aggressively Managed Flexible, Conservatively Managed Flexible, Zero Coupon Bond
1995, Zero Coupon Bond 2000, High Yield Bond, Stock Index, High Dividend Stock,
Natural Resources, Global Equity, Government Securities and Zero Coupon Bond
2005 subaccounts) as of December 31, 1994, the related statements of operations
for the periods presented in the year then ended, and the statements of changes
in net assets for each of the periods presented in the two years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1994. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of each of the respective subaccounts
constituting the Pruco Life of New Jersey Single Premium Variable Life Account
as of December 31, 1994, the results of their operations, and the changes in
their net assets for the respective stated periods in conformity with generally
accepted accounting principles.
As discussed in Note 6, the 1993 financial statements of Pruco Life of New
Jersey Single Premium Variable Life Account have been restated.
Deloitte & Touche LLP
Parsippany, New Jersey
February 10, 1995
A12
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF FINANCIAL POSITION
December 31,
----------------------
1994 1993
---------- ----------
($000'S)
ASSETS
Fixed maturities (market value
$509,821 and $606,543)............ $ 527,304 $ 587,213
Policy loans........................ 85,277 69,766
Short-term investments.............. 41,695 29,599
---------- ----------
Total Investments................. 654,276 686,578
Cash................................ 17 37
Accrued investment income........... 11,262 10,583
Premiums due and deferred........... 2,753 3,021
Receivable from affiliates.......... 1,827 1,695
Federal income taxes--from
affiliate......................... 8,597 149
Other assets........................ 1,549 4,309
Assets held in Separate Accounts.... 642,049 646,083
---------- ----------
TOTAL ASSETS.......................... $1,322,330 $1,352,455
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Policy liabilities and insurance
reserves:
Future policy benefits and
claims.......................... $ 497,353 $ 537,725
Other policy claims and benefits
payable......................... 3,268 3,132
Interest Maintenance Reserve
(IMR)........................... 6,931 14,440
Payable to affiliates............... 4,568 7,987
Other liabilities................... 14,117 3,595
Asset Valuation Reserve (AVR)....... 5,512 5,306
Liabilities related to Separate
Accounts.......................... 627,515 630,328
---------- ----------
Total Liabilities..................... 1,159,264 1,202,513
---------- ----------
STOCKHOLDER'S EQUITY:
Common Stock, $5 par value; 400,000
shares authorized, issued and
outstanding....................... 2,000 2,000
Paid-in capital..................... 125,000 125,000
Unassigned surplus.................. 36,066 22,942
---------- ----------
Total Stockholder's Equity............ 163,066 149,942
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY................ $1,322,330 $1,352,455
========== ==========
STATEMENTS OF OPERATIONS
Years ended
December 31,
--------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
REVENUE
Premiums and annuity
considerations............. $ 106,117 $ 105,390 $ 100,371
Net investment income........ 44,381 47,700 53,063
Net realized investment
gains/(losses)............. (2,825) 6,066 10,296
Other income................. 3,201 2,831 2,570
--------- --------- ---------
Total Revenue.................. 150,874 161,987 166,300
--------- --------- ---------
BENEFITS AND EXPENSES
Current and future benefits
and claims................. 100,555 100,514 98,016
Commission expenses.......... 3,075 3,038 2,766
General, administrative and
other expenses............. 17,149 19,182 19,371
--------- --------- ---------
Total Benefits And
Expenses..................... 120,779 122,734 120,153
--------- --------- ---------
Income before provision in
lieu of federal income
tax........................ 30,095 39,253 46,147
Provision in lieu of federal
income tax................. (16,765) (19,460) (22,701)
--------- --------- ---------
NET INCOME..................... $ 13,330 $ 19,793 $ 23,446
========= ========= =========
SEE NOTES TO THE FINANCIAL STATEMENTS
B1
<PAGE>
FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
STATEMENTS OF STOCKHOLDER'S EQUITY
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
Common Stock
Balance, beginning of year... $ 2,000 $ 2,000 $ 2,000
Issued during year........... - - -
--------- --------- ---------
Balance, end of year......... 2,000 2,000 2,000
--------- --------- ---------
Paid-in Capital
Balance, beginning of year... 125,000 125,000 125,000
Paid-in during year.......... - - -
--------- --------- ---------
Balance, end of year......... 125,000 125,000 125,000
--------- --------- ---------
Unassigned Surplus
Balance, beginning of year... 22,942 29,333 33,255
Net income................... 13,330 19,793 23,446
Net unrealized investment
gains...................... - - 810
Increase in AVR.............. (206) (184) (1,016)
Dividends to stockholder..... - (26,000) (27,162)
--------- --------- ---------
Balance, end of year......... 36,066 22,942 29,333
--------- --------- ---------
TOTAL STOCKHOLDER'S EQUITY..... $ 163,066 $ 149,942 $ 156,333
========= ========= =========
STATEMENTS OF CASH FLOWS
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
CASH FLOW FROM OPERATING
ACTIVITIES
Net income................. $ 13,330 $ 19,793 $ 23,446
Adjustments to reconcile
net income to net cash
from operations:
Increase (decrease) in
policy liabilities and
insurance reserves..... (40,237) (13,998) 22,323
Net decrease in Separate
Accounts............... 1,220 3,426 1,336
Net realized
investment(gains)/
losses................. 2,825 (6,066) (10,296)
Amortization and other
non-cash items......... 1,696 1,791 108
(Increase) decrease in operating assets:
Policy loans........... (15,511) (13,921) (15,177)
Accrued investment
income............... (679) 500 534
Premiums due and
deferred............. 268 115 11,596
Receivable from
affiliates........... (132) (953) (5)
Federal income
taxes--from
affiliate............ (8,448) 4,065 (3,876)
Other assets........... 2,760 (3,808) (501)
Increase (decrease) in
operating liabilities:
Payable to
affiliates............. (3,419) 732 (1,012)
Other liabilities...... 10,522 (1,271) 985
--------- --------- ---------
Cash Flow From (Used For)
Operating Activities......... (35,805) (9,595) 29,461
--------- --------- ---------
CASH FLOW FROM INVESTING
ACTIVITIES
Proceeds from the sale/
maturity of:
Fixed maturities......... 705,889 443,879 578,236
Payments for the purchase
of:
Fixed maturities......... (658,008) (391,561) (642,511)
Net proceeds (payments)
of short-term
investments............ (12,096) (17,838) 35,792
--------- --------- ---------
Cash Flow From (Used For)
Investing Activities....... 35,785 34,480 (28,483)
--------- --------- ---------
CASH FLOW FROM FINANCING
ACTIVITIES
Dividends paid............. - (26,000) -
--------- --------- ---------
Net increase (decrease) in
Cash..................... (20) (1,115) 978
Cash, beginning of year.... 37 1,152 174
--------- --------- ---------
CASH, END OF YEAR............ $ 17 $ 37 $ 1,152
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid in lieu of income
taxes.................... $ 17,679 $ 15,396 $ 26,576
========= ========= =========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES
Dividends paid in the form
of fixed maturities...... $ - $ - $ 27,162
========= ========= =========
SEE NOTES TO THE FINANCIAL STATEMENTS
B2
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
1. General
Pruco Life Insurance Company of New Jersey (the Company), a stock life insurance
company domiciled in the State of New Jersey, is an indirect subsidiary of The
Prudential Insurance Company of America (The Prudential), a mutual life
insurance company, and a direct subsidiary of Pruco Life Insurance Company
(Pruco Life), a stock life insurance company domiciled in the State of Arizona.
The Company markets individual life insurance and single-pay deferred annuities
through The Prudential's sales force.
2. Summary of Significant Accounting Policies and Principles
A. Basis of Presentation
The financial statements are presented in conformity with Generally
Accepted Accounting Principles (GAAP), which for mutual life insurance
companies and their life insurance subsidiaries are statutory accounting
practices prescribed or permitted by state regulatory authorities in the
domiciliary states. Certain reclassifications have been made to the 1992
and 1993 financial statements and footnotes to conform to the 1994
presentation. Included in the Statement of Operations are certain items
which, under statutory accounting practices, are charged or credited
directly to surplus.
In 1994, The American Institute of Certified Public Accountants issued
Statement of Position 94-5 "Disclosures of Certain Matters in the
Financial Statements of Insurance Enterprises",("SOP 94-5"), which
requires insurance enterprises to disclose in their financial statements
the accounting methods used in their statutory financial statements that
are permitted by the state insurance departments rather than prescribed
statutory accounting practices.
Pruco Life Insurance Company of New Jersey, domiciled in the State of New
Jersey, prepares its statutory financial statements in accordance with
accounting practices prescribed or permitted by the New Jersey Department
of Insurance ("The Department"). Prescribed statutory accounting practices
include publications of the National Association of Insurance
Commissioners (NAIC), state laws, regulations, and general administrative
rules. Permitted statutory accounting practices encompass all accounting
practices not so prescribed.
The Company has established guaranty fund liabilities for the insolvencies
of certain life insurance companies. The liabilities were established net
of premium tax credits and federal income tax. Prescribed statutory
accounting practices do not address the establishment of liabilities for
guaranty fund assessments.
The Company, with permission from the Department, prepares an Annual
Report that differs from the Annual Statement filed with the Department in
that certain financial statement captions are presented differently.
The following is a reconciliation of statutory net income with net income
per the financial statements.
<TABLE>
<CAPTION>
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
<S> <C> <C> <C>
Statutory net income including net gains and losses
on sales of investments............................ $ 16,309 $ 20,075 $ 29,432
Adjustments to reconcile to net income as follows:
Change in determination of deferred premiums....... - - (5,529)
Income tax applicable to other than current year... (7,534) - -
Net gain/(loss) from operations in Separate
Accounts......................................... 1,372 (458) 433
Other.............................................. 3,183 176 (890)
--------- --------- ---------
Net Income........................................... $ 13,330 $ 19,793 $ 23,446
========= ========= =========
</TABLE>
B. Future Application of Accounting Standards
The Financial Accounting Standards Board (the "FASB") issued Financial
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises" which, as
amended is effective for fiscal years beginning after December 15, 1995.
Interpretation No. 40 changes the current practice of the Company with
respect to utilizing statutory basis financial statements for general
B3
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
purposes in that it would not allow such financial statements to be
referred to as having been prepared in accordance with GAAP.
Interpretation No. 40 requires GAAP financial statements to apply all GAAP
pronouncements, unless specifically exempted. Implementation of the
Interpretation will require significant effort and judgement as to
determining GAAP for insurance operations. The Company is currently unable
to determine the impact of Interpretation No. 40 on its financial
statements.
C. Investments
Fixed maturities are stated at amortized cost. Short-term investments are
stated at amortized cost, which approximates fair value.
Policy loans are stated primarily at unpaid principal balances.
Realized investment gains and losses are reported based on specific
identification of the investments sold.
D. Future Policy Benefits, Losses, and Claims
Reserves for individual life insurance are calculated using various
methods, interest rates and mortality tables which produce reserves that
meet the aggregate requirements of state laws and regulations.
Approximately 7% of individual life insurance reserves are determined
using the net level premium method, or by using the greater of a net level
premium reserve or the policy cash value. About 93% of individual life
insurance reserves are calculated according to the Commissioner's Reserve
Valuation Method ("CRVM"), or methods which compare CRVM reserves to
policy cash values.
Reserves for individual annuity contracts are determined using the
Commissioner's Annuity Reserve Valuation Method.
For life insurance, unpaid claims include estimates of both death benefits
on reported claims and those which are incurred but not reported.
E. Revenue Recognition and Related Expenses
Premium revenues are recognized as income over the premium paying period
of the related policies. Annuity considerations are recognized as revenue
when received. Expenses, including new business acquisition costs such as
commissions, are charged to operations as incurred.
F. Federal Income Taxes
The Company is a member of a group of affiliated companies which join in
filing a consolidated federal tax return. Pursuant to a tax allocation
agreement, current tax liabilities are determined for individual companies
based upon their separate return basis taxable income. Members with
taxable income incur an amount in lieu of the separate return basis
federal tax. Members with a loss for tax purposes recognize a current
benefit in proportion to the amount of their losses utilized in computing
consolidated taxable income. Differences between estimated liabilities and
actual payments are included in the current year's operations as an
adjustment to the provision in lieu of income taxes. For the years 1993
and 1992, the Company was allocated a portion of the consolidated income
tax liability attributable to Section 809 in the Internal Revenue Code
(commonly referred to as the "Equity Tax"). Beginning in 1994, the Company
will no longer be allocated this Equity Tax.
Taxes on the Company are calculated under the Internal Revenue Code of
1986 which provides that life insurance companies be taxed on their gain
from operations after dividends to policyholders. In calculating this tax,
the Code requires the capitalization and amortization of policy
acquisition expenses.
G. Asset Valuation Reserve and Interest Maintenance Reserve
The Asset Valuation Reserve (AVR) and the Interest Maintenance Reserve
(IMR) are required reserves for assets of life insurance companies. The
AVR is calculated based on a statutory formula and designed to mitigate
the effect of valuation and credit related losses on unassigned surplus.
The IMR is designed to reduce the fluctuations of surplus resulting from
market interest rate movements. Predominantly all interest rate related
realized capital gains and losses are deferred and amortized into
investment income over the remaining life of the investment sold. The IMR
balance was $6.9 million and $14.4
B4
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
million at December 31, 1994 and 1993 respectively. "Net realized
investment gains/(losses) of $(5.5)million and $7.2 million were deferred
in 1994 and 1993, respectively. Amortized into "Net investment income"
were $2.0 million and $2.4 million of IMR for the year ended December 31,
1994 and 1993, respectively.
H. Separate Accounts
Separate accounts represent funds for which investment income and
investment gains and losses accrue directly to, and investment risk is
borne by, the policyholders. Each account has specific investment
objectives. Assets are carried at market value. Deposits to such accounts
are included in revenues with a corresponding liability increase included
in benefits and expenses. The assets of each account are legally
segregated and are not subject to claims that arise out of any other
business of the Company. Consequently, management believes that it is
appropriate to combine Separate Account policyholder net investment income
and net realized and unrealized capital gains/(losses) along with benefit
payments and change in reserves in "Current and future benefits and
claims". Policyholder net investment income and net realized and
unrealized gains/(losses) for the years ended December 31, 1994, 1993 and
1992 were ($7) million, $86 million and $45 million, respectively.
3. Federal Income Taxes
The following is a reconciliation of the Company's federal tax provision
as computed at the federal tax rate with that computed at the Company's
effective tax rate. The below amounts include federal income tax
applicable to prior years, where appropriate.
<TABLE>
<CAPTION>
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
<S> <C> <C> <C>
Operating income before federal income taxes............. $ 30,095 $ 39,253 $ 46,147
Statutory tax rate....................................... 35% 35% 34%
--------- --------- ---------
Expected federal income taxes............................ 10,533 13,739 15,690
Tax effect of:
Statutory/tax policy reserve difference................ 4,279 1,367 (4,059)
Timing differences in tax/book income recognition on
investments.......................................... (2,743) 2,151 3,758
Timing differences in tax/book income
recognition--other................................... (78) (25) (87)
Change in determination of deferred premiums........... - - 1,880
Decrease in life insurance premium deferred and
uncollected.......................................... 94 40 726
Capitalization of policy acquisition expenses.......... 4,680 1,541 2,047
Allocated equity tax................................... - 647 2,746
--------- --------- ---------
Federal income taxes..................................... $ 16,765 $ 19,460 $ 22,701
========= ========= =========
Effective tax rate....................................... 56% 50% 49%
========= ========= =========
</TABLE>
B5
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
4. NET INVESTMENT INCOME
Net investment income consisted of:
<TABLE>
<CAPTION>
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
<S> <C> <C> <C>
Gross investment income
Fixed maturities.................................... $ 36,565 $ 40,546 $ 47,722
Policy loans........................................ 4,290 3,506 2,644
Short-term investments.............................. 2,364 1,817 2,834
Other............................................... 44 25 30
--------- --------- ---------
43,263 45,894 53,230
Investment expenses................................... (906) (581) (996)
--------- --------- ---------
42,357 45,313 52,234
Amortization of Interest Maintenance Reserve.......... 2,024 2,387 829
--------- --------- ---------
Net investment income................................. $ 44,381 $ 47,700 $ 53,063
========= ========= =========
</TABLE>
5. Investments and Investment Gains/(Losses)
Net realized and unrealized gains/(losses) were as follows:
<TABLE>
<CAPTION>
Years ended
December 31,
-------------------------------
1994 1993 1992
--------- --------- ---------
($000'S)
<S> <C> <C> <C>
Realized Gains
Fixed maturities.................................... $ (8,311) $ 13,225 $ 20,767
Short-term investments.............................. 1 26 -
Tax effected amounts transferred to Interest
Maintenance Reserve................................. 5,485 (7,185) (10,471)
--------- --------- ---------
Net realized investment gains......................... $ (2,825) $ 6,066 $ 10,296
========= ========= =========
Unrealized Gains
Fixed maturities.................................... $ - $ - $ 810
--------- --------- ---------
Net unrealized investment gains....................... - - 810
Balance beginning of year............................. - - (810)
--------- --------- ---------
Balance end of year................................... $ - $ - $ -
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Fixed Maturities
($000'S)
At December 31,
Increase (Decrease) in
Amortized Market difference between market value
cost value and amortized cost during the year
----------- --------- ----------------------------------
<S> <C> <C> <C>
1994............................... $ 527,304 $ 509,821 $ (36,813)
1993............................... 587,213 606,543 (1,472)
1992............................... 630,484 651,286 (21,101)
</TABLE>
B6
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
The amortized cost and estimated market values of investments in debt securities
at December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994
--------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
($000'S) ($000'S) ($000'S) ($000'S)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.... $ 116,502 $ 10 $ 11,641 $ 104,871
Debt securities issued by foreign governments
and their agencies........................... 34,554 1,631 723 35,462
Corporate securities........................... 336,641 1,261 7,524 330,378
Mortgage-backed securities..................... 39,607 180 677 39,110
--------- --------- --------- ---------
Total.......................................... $ 527,304 $ 3,082 $ 20,565 $ 509,821
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
1993
------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
($000'S) ($000'S) ($000'S) ($000'S)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.... $ 153,304 $ 62 $ 616 $ 152,750
Debt securities issued by foreign governments
and their agencies........................... 35,034 2,017 - 37,051
Corporate securities........................... 364,158 17,792 533 381,417
Mortgage-backed securities..................... 34,717 793 185 35,325
--------- --------- --------- ---------
Total.......................................... $ 587,213 $ 20,664 $ 1,334 $ 606,543
========= ========= ========= =========
</TABLE>
The amortized cost and estimated market value of debt securities at December 31,
1994 by contractual maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Amortized market
cost value
($000'S) ($000'S)
----------- -----------
<S> <C> <C>
Due in one year or less............................................ $ 30,132 $ 30,029
Due after one year through five years.............................. 404,859 395,195
Due after five years through ten years............................. 42,489 35,368
Due after ten years................................................ 10,217 10,120
--------- ---------
487,697 470,712
Mortgage-backed securities......................................... 39,607 39,109
--------- ---------
Total.............................................................. $ 527,304 $ 509,821
========= =========
</TABLE>
Proceeds from the sale/maturity of debt securities during 1994, 1993 and
1992 were $705.9 million, $443.9 million and $578.2 million, respectively.
Gross gains of $3.3 million, $13.4 million and $23.5 million and gross
losses of $11.6 million, $.2 million and $2.7 million were realized on
those sales during 1994, 1993 and 1992, respectively.
The Company invests in both investment grade and non-investment grade
securities. The SVO of the NAIC rates fixed maturities held by insurers
(SVO rated securities accounted for approximately 99.0% of the Company's
total fixed maturities balances at both December 31, 1994 and 1993) for
regulatory purposes and groups investments into six categories ranging from
highest quality bonds to those in or near default. The
B7
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
lowest three NAIC categories represent, for the most part, high yield
securities and are defined by the NAIC as including any security with a
public agency rating of B+, B1 or less. At December 31, 1994 and 1993, the
Company held no securities in the three lowest NAIC categories.
6. Related Party Transactions
A. Service Agreements
The Company, The Prudential, Pruco Life, and Pruco Securities Corporation,
an indirect wholly-owned subsidiary of The Prudential, operate under
service and lease agreements whereby services of officers and employees,
supplies, use of equipment and office space are provided. The net cost of
these services allocated to the Company were $15 million, $17.1 million,
and $17.2 million for the years ended December 31, 1994, 1993 and 1992,
respectively.
B. Employees Benefit Plans
Pension Plans
The Company is a wholly-owned subsidiary of The Prudential which sponsors
a defined benefit pension plan. The defined benefit pension plan is
generally based on career average earnings and credit length of service.
The Prudential's funding policy is to contribute annually the amount
necessary to satisfy the Internal Revenue Service contribution guidelines.
No pension expense for contributions to the plan was allocated to the
Company in 1994, 1993 or 1992 because the plan was subject to the full
funding limitation under the Internal Revenue Code.
Postretirement Life and Health Benefits
The Prudential also sponsors postretirement defined benefit plans which
provide certain life insurance and health care benefits. Substantially all
employees may become eligible to receive a benefit if they retire after
age 55 with at least 10 years of service. Prior to 1993, The Prudential's
policy was to fund the cost of providing these benefits in the years that
the employees were providing services to the Company. Effective for 1993,
The Prudential has recognized the cost of these benefits in accordance
with the accounting policy issued by the National Association of Insurance
Commissioners (NAIC). The NAIC's policy is similar to SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
except that the NAIC policy excludes non-vested employees and only allows
the transition obligation to be recognized immediately or amortized over
twenty years. The Prudential has elected to amortize its transition
obligation over twenty years. A provision for contributions to the
postretirement fund is included in the net cost of services allocated to
the Company discussed above for the years ended December 31, 1994, 1993
and 1992.
C. Other Transactions
The Company has issued approximately 375 variable appreciable life
contracts to The Prudential for the purpose of funding non-qualified
pension benefits for certain employees. Included in insurance premiums and
annuity considerations for the years ended December 31, 1994, 1993 and
1992 are respectively, $12 million, $12 million, and $13 million, which
are attributable to these contracts.
7. Dividends
The Company is subject to New Jersey law which limits the amount of dividends
that insurance companies can pay to stockholders. The maximum dividend that
may be paid in any 12 month period without prior approval of the New Jersey
Commissioner of Insurance is limited to the greater of 10% of surplus as of
December 31 of the preceding year or the net gain from operations of the
preceding calendar year. Based on these limitations, the Company would be
permitted a maximum of $16 million in dividend distributions in 1995, all of
which could be paid in cash, without the approval from The Department of
Insurance of the State of New Jersey.
8. Fair Value Information
The fair value amounts have been determined by the Company using available
information and reasonable valuation methodologies for only those accounts
for which fair value disclosures are required. Considerable
B8
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
For the Years Ended December 31, 1994, 1993, and 1992
judgment is necessarily applied in interpreting data to develop the estimates
of fair value. Accordingly, the estimates presented may not be realized in a
current market exchange. The use of different market assumptions and/or
estimation methodologies could have a material effect on the estimated fair
values.
The following methods and assumptions were used in calculating the fair
values. For all other financial instruments presented in the table, the
carrying value is a reasonable estimate of fair value.
Fixed Maturities. Fair values for fixed maturities, other than private
placement securities, are based on quoted market prices or estimates from
independent pricing services. Fair values for private placement securities
are estimated using a discounted cash flow model which considers the current
market spreads between the U.S. Treasury yield curve and corporate bond yield
curve adjusted for the type of issue, its current quality and its remaining
average life. The fair value of certain non-performing private placement
securities is based on amounts provided by state regulatory authorities.
Policy Loans. The estimated fair value is calculated using a discounted cash
flow model based upon current U.S. Treasury rates and historical loan
repayments.
Investment-Type Insurance Contract Liabilities. Fair values for the Company's
investment-type insurance contract liabilities are estimated using a
discounted cash flow model, based on interest rates currently being offered
for similar contracts.
The following table discloses the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 1994 and 1993.
<TABLE>
<CAPTION>
($000'S) ($000'S)
1994 1993
-------------------- --------------------
Carrying Fair Carrying Fair
Value Value Value Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Financial Assets:
Fixed maturities ........................ $ 527,304 $ 509,821 $ 587,213 $ 606,543
Policy loans ............................ 85,277 76,734 69,766 71,821
Short-term investments .................. 41,695 41,695 29,599 29,599
Financial Liabilities:
Investment-type insurance contracts ..... $ 166,183 $ 159,463 $ 231,203 $ 226,982
</TABLE>
9. Contingencies
Various lawsuits against the Company have arisen in the course of the
Company's business. In certain of these matters, large and/or indeterminate
amounts are sought. In the opinion of the Company, any ultimate liability
which would result from such litigation would not have a material adverse
effect on the Company's financial position.
B9
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Pruco Life Insurance Company of New Jersey
Newark, New Jersey
We have audited the accompanying statements of financial position of Pruco Life
Insurance Company of New Jersey as of December 31, 1994 and 1993, and the
related statements of operations, stockholder's equity, and cash flows for each
of the three years in the period ended December 31, 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Pruco Life Insurance Company of New Jersey
as of December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Parsippany, New Jersey
March 6, 1995
B10
<PAGE>
SINGLE PREMIUM VARIABLE LIFE ACCOUNT
VARIABLE LIFE INSURANCE CONTRACTS
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (800) 445-4571
<PAGE>
PART II
OTHER INFORMATION
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKING WITH RESPECT TO INDEMNIFICATION
The Prudential Directors' and Officers' Liability and Corporation Reimbursement
Program, purchased by The Prudential from Aetna Casualty & Surety Company, CNA
Insurance Company, Lloyds of London, Great American Insurance Company, Reliance
Insurance Company, Corporate Officers & Directors Assurance Ltd., A.C.E.
Insurance Company, Ltd., XL Insurance Company, Ltd., and Zurich-American
Insurance Company, provides coverage for "Loss" (as defined in the policies)
arising from any claim or claims by reason of any actual or alleged act, error,
misstatement, misleading statement, omission, or breach of duty by persons in
the discharge of their duties solely in their capacities as directors or
officers of The Prudential, any of its subsidiaries, or certain investment
companies affiliated with The Prudential. Coverage is also provided to the
individual directors or officers for such Loss, for which they shall not be
indemnified. Loss essentially is the legal liability on claims against a
director or officer, including adjudicated damages, settlements and reasonable
and necessary legal fees and expenses incurred in defense of adjudicatory
proceedings and appeals therefrom. Loss does not include punitive or exemplary
damages or the multiplied portion of any multiplied damage award, criminal or
civil fines or penalties imposed by law, taxes or wages, or matters which are
insurable under the law pursuant to which the policies are construed.
There are a number of exclusions from coverage. Among the matters excluded are
Losses arising as the result of (1) claims brought about or contributed to by
the criminal or deliberate fraudulent acts of a director or officer, and (2)
claims arising from actual or alleged performance of, or failure to perform,
services as, or in any capacity similar to, an investment adviser, investment
banker, underwriter, broker or dealer, as those terms are defined in the
Securities Act of 1933, the Securities Exchange Act of 1934, the Investment
Advisers Act of 1940, the Investment Company Act of 1940, any rules or
regulations thereunder, or any similar federal, state or local statute, rule or
regulation.
The limit of coverage under the Program for both individual and corporate
reimbursement coverage is $150,000,000. The retention for corporate
reimbursement coverage is $10,000,000 per loss.
The relevant provisions of New Jersey law permitting or requiring
indemnification, New Jersey being the state of organization of The Prudential
and Pruco Life of New Jersey, can be found in Section 14A:3-5 of the New Jersey
Statutes Annotated. The text of The Prudential's by-law 27 permitting or
requiring indemnification, which relates to indemnification of officers and
directors, is incorporated by reference to Exhibit (8)(ii) of Post-Effective
Amendment No. 26 to Form N-3, Registration No. 2-76580, filed April __, 1995, on
behalf of The Prudential Variable Contract Account-10. The text of Pruco Life of
New Jersey's by-laws, Article V, which relates to indemnification of officers
and directors, is incorporated by reference to Exhibit (8)(ii) to this
Registration Statement.
Insofar as indemnification for liabilities 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 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.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Cross-reference to items required by Form N-8B-2.
The prospectus consisting of 48 pages.
The undertaking to file reports.
The signatures.
The undertaking with respect to indemnification.
Written consents of the following persons:
1. Deloitte and Touche, LLP, independent auditors.
2. Clifford E. Kirsch
3. Paul Haley, FSA, CLU, and ChFC, actuarial expert.
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B-2:
A. (1) Resolution of Board of Directors of Pruco Life Insurance Company
of New Jersey establishing the Pruco Life of New Jersey Single
Premium Variable Life Account. (Note 2)
(2) Not Applicable
(3) Distributing Contracts
(a) Distribution Agreement between Pruco Securities Corporation
and Pruco Life Insurance Company of New Jersey. (Note 2)
(b) Proposed form of Agreement between Pruco Securities
Corporation and independent brokers with respect to the Sale
of the Contracts. (Note 2)
(c) Revised Schedule of Sales Commissions. (Note 6)
(4) Not Applicable
(5) (a) Flexible Premium Variable Life Insurance Contract. (Note 2)
(b) Contract page 5 for use in New York. (Note 4)
(c) Contract page 6 for use in New York. (Note 4)
(d) Contract jacket for use in New Jersey. (Note 4)
(e) Contract page 5 for use in New Jersey. (Note 4)
(f) Contract page 6 for use in New Jersey. (Note 4)
(g) Contract page 7 for use in New York. (Note 4)
(h) Contract page 8 for use in New York. (Note 4)
(i) Contract page 9 for use in New York. (Note 4)
(j) Contract page 10 for use in New York. (Note 4)
(k) Contract page 9 for use in New Jersey. (Note 4)
(l) Contract page 11 for use in New York. (Note 4)
(m) Contract page 17 for use in New Jersey and New York. (Note 4)
(n) Contract page 10 for use in New Jersey. (Note 5)
(o) Contract jacket for use in New York. (Note 6)
(p) Contract page 7 for use in New Jersey. (Note 6)
(q) Contract page 8 for use in New Jersey. (Note 6)
(r) Contract page 13 for use in New York. (Note 6)
(6) (a) Articles of Incorporation of Pruco Life Insurance Company of
New Jersey, as amended March 11, 1983. (Note 8)
(b) By-laws of Pruco Life Insurance Company of New Jersey, as
amended February 1, 1991. (Note 8)
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
II-2
<PAGE>
(10) (a) Application Form for Flexible Premium Variable Life Insurance
Contract. (Note 3)
(b) Supplement to the Application for Flexible Premium Variable
Life Insurance Contract. (Note 3)
(c) Supplement to the Application for Flexible Premium Variable
Life Insurance Contract. (Note 7)
(11) Form of Notice of Withdrawal Right. (Note 3)
(12) Memorandum describing Pruco Life Insurance Company of New Jersey's
issuance, transfer, and redemption procedures for the Contracts
pursuant to Rule 6e-3(T)(b)(12)(ii) and method of computing cash
adjustment upon exercise of right to exchange for fixed-benefit
insurance pursuant to Rule 6e-3(T)(b)(13)(v)(B). (Note 4)
(13) Living Needs Benefit Rider
(a) for use in New Jersey. (Note 9)
(b) for use in New York. (Note 10)
2. See Exhibit 1.A.(5).
3. Opinion and Consent of Clifford E. Kirsch as to the legality of the
securities being registered. (Note 1)
4. None.
5. Not Applicable.
6. Opinion and Consent of Paul Haley, FSA, CLU, ChFC, as to actuarial matters
pertaining to the securities being registered. (Note 1)
7. Powers of Attorney. (Note 11).
8. Pruco Life Insurance Company of New Jersey's representations regarding
mortality and expense risks and sales load. (Note 4)
27. Financial Data Schedule (Note 1)
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Registrant's Form S-6, filed August 8,
1985.
(Note 3) Incorporated by reference to Pre-Effective Amendment No. 1 to this
Registration Statement, filed December 19, 1985.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 1 to this
Registration Statement, filed March 19, 1986.
(Note 5) Incorporated by reference to Post-Effective Amendment No. 2 to this
Registration Statement, filed April 29, 1986.
(Note 6) Incorporated by reference to Post-Effective Amendment No. 3 to this
Registration Statement, filed October 28, 1986.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 4 to this
Registration Statement, filed April 27, 1987.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 17 to
Form S-6, Registration No. 2-89780, filed March 1, 1991, on behalf of
the Pruco Life of New Jersey Variable Appreciable Account.
(Note 9) Incorporated by reference to Post-Effective Amendment No. 12 to this
Registration Statement, filed April 26, 1990.
(Note 10) Incorporated by reference to Post-Effective Amendment No. 15 to this
Registration Statement, filed March 2, 1993.
(Note 11) Incorporated by reference to Form S-1, Registration No. 33-86780,
filed November 23, 1994 on behalf of the Pruco Life Real Property
Account.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that this Amendment is filed solely for one or more of the purposes
specified in Rule 485(b)(1) under the Securities Act of 1933 and that no
material event requiring disclosure in the Prospectus, other than one listed in
Rule 485(b)(1), has occurred since the effective date of the most recent
Post-Effective Amendment to the Registration Statement which included a
Prospectus, and has caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, and its seal hereunto
affixed and attested, all in the city of Newark and the State of New Jersey, on
this 24th day of April, 1995.
(Seal) Pruco Life of New Jersey Single Premium Variable Life Account
(Registrant)
By: Pruco Life Insurance Company of New Jersey
(Depositor)
Attest: /s/ Thomas C. Castano By: /s/ Esther H. Milnes
--------------------- --------------------
Thomas C. Castano Esther H. Milnes
Assistant Secretary President
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 19 to the Registration Statement has been signed below by the
following persons in the capacities indicated on this 24th day of April, 1995.
Signature and Title
-------------------
/s/ *
- ----------------------------------------
Robert P. Hill
Chairman of the Board
/s/ *
- ----------------------------------------
Esther Milnes
President and Director
/s/ *
- ----------------------------------------
Stephen Tooley
Chief Accounting Officer and Comptroller
/s/ * *By: /s/ Thomas C. Castano
- ---------------------------------------- -----------------------------
E. Michael Caulfield Thomas C. Castano
Director (Attorney-in-Fact)
/s/ *
- ----------------------------------------
Garnett L. Keith, Jr.
Director
/s/ *
- ----------------------------------------
Ira J. Kleinman
Director
/s/ *
- ----------------------------------------
I. Edward Price
Director
/s/ *
- ----------------------------------------
Donald G. Southwell
Director
II-4
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 19 to Registration
Statement No. 2-99537 on Form S-6 of Pruco Life of New Jersey Single Premium
Variable Life Account of Pruco Life Insurance Company of New Jersey our report
dated February 10, 1995, relating to the financial statements of Pruco Life of
New Jersey Single Premium Variable Life Account, and of our report dated March
6, 1995, relating to the consolidated financial statements of Pruco Life
Insurance Company of New Jersey and subsidiaries appearing in the Prospectus,
which is part of such Registration Statement, and to the reference to use under
the heading "Experts" in such Prospectus.
/S/ Deloitte and Touche LLP
Parsippany, New Jersey
April 24, 1995
II-5
<PAGE>
EXHIBIT INDEX
Consent of Deloitte and Touche LLP, independent auditors. Page II-5
3. Opinion and Consent of Clifford E. Kirsch, as to the legality
of the securities being registered. Page II-7
6. Opinion and Consent of Paul Haley, FSA, CLU, and ChFC, as to
actuarial matters pertaining to the securities being registered. Page II-8
27. Financial Data Schedule Page II-9
II-6
Exhibit 3
April 24, 1995
Pruco Life Insurance Company
of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
Gentlemen:
In my capacity as Senior Vice President and General Counsel of Pruco Life
Insurance Company of New Jersey ("Pruco Life of New Jersey"), I have reviewed
the establishment of Pruco Life of New Jersey Single Premium Variable Life
Account (the "Account") on April 15, 1985 by the Executive Committee of the
Board of Directors of Pruco Life of New Jersey as a separate account for assets
applicable to certain single premium variable life insurance contracts, pursuant
to the provisions of Section 17B:28-7 of the Revised Statutes of New Jersey. I
was responsible for oversight of the preparation and review of the Registration
Statement on Form S-6, as amended, filed by Pruco Life of New Jersey with the
Securities and Exchange Commission (Registration Number 2-99537) under the
Securities Act of 1933 for the registration of certain single premium variable
life insurance contracts issued with respect to the Account.
I am of the following opinion:
(1) Pruco Life of New Jersey was duly organized under the laws of New
Jersey and is a validly existing corporation.
(2) The Account has been duly created and is validly existing as a
separate account pursuant to the aforesaid provisions of New Jersey
law.
(3) The portion of the assets held in the Account equal to the reserve
and other liabilities for variable benefits under the single
premium variable life insurance contracts is not chargeable with
liabilities arising out of any other business Pruco Life of New
Jersey may conduct.
(4) The single premium variable life insurance contracts are legal and
binding obligations of Pruco Life of New Jersey in accordance with
their terms.
In arriving at the foregoing opinion, I have made such examination of law and
examined such records and other documents as I judged to be necessary or
appropriate.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Clifford E. Kirsch
II-7
Exhibit 6
April 24, 1995
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
To Pruco Life Insurance Company of New Jersey:
This opinion is furnished in connection with the registration by Pruco Life
Insurance Company of New Jersey of flexible premium variable life insurance
contracts ("Contracts") under the Securities Act of 1933. The prospectus
included in Post-Effective Amendment No. 19 to Registration Statement No.
2-99537 on Form S-6 describes the Contracts. I have reviewed the Contract form
and I have participated in the preparation and review of the Registration
Statement and Exhibits thereto. In my opinion:
(1) The illustrations of face amounts of insurance included in the
section entitled "Some typical face amounts" ("Amount of Life
Insurance"), based on the assumptions stated in the illustrations,
are consistent with the provisions of the Contract.
(2) The illustrations of the death benefits included in the section
entitled "Increase in death benefit due to favorable investment
experience" ("Amount of Life Insurance"), based on the assumptions
stated in the illustrations, are consistent with the provisions of
the Contract.
(3) The illustrations of cash surrender values and death benefits
included in the section entitled "Illustrations", based on the
assumptions stated in the illustrations, are consistent with the
provisions of the Contract. The rate structure of the Contract has
not been designed so as to make the relationship between the
premium and benefits, as shown in the illustrations, appear more
favorable to a prospective purchaser of a Contract for male age 35
or female age 55, than to prospective purchasers of Contracts on
insureds of other ages.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
prospectus.
Very truly yours,
Paul Haley FSA, CLU, ChFC
Vice President
The Prudential Insurance Company of America
II-8
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<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> $39,823
<INVESTMENTS-AT-VALUE> $41,016
<RECEIVABLES> $47
<ASSETS-OTHER> $(5)
<OTHER-ITEMS-ASSETS> $0
<TOTAL-ASSETS> $41,063
<PAYABLE-FOR-SECURITIES> $0
<SENIOR-LONG-TERM-DEBT> $0
<OTHER-ITEMS-LIABILITIES> $0
<TOTAL-LIABILITIES> $0
<SENIOR-EQUITY> $0
<PAID-IN-CAPITAL-COMMON> $0
<SHARES-COMMON-STOCK> 2,967
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> $0
<OVERDISTRIBUTION-NII> $0
<ACCUMULATED-NET-GAINS> $0
<OVERDISTRIBUTION-GAINS> $0
<ACCUM-APPREC-OR-DEPREC> $0
<NET-ASSETS> $41,059
<DIVIDEND-INCOME> $1,497
<INTEREST-INCOME> $0
<OTHER-INCOME> $738
<EXPENSES-NET> $452
<NET-INVESTMENT-INCOME> $1,045
<REALIZED-GAINS-CURRENT> $370
<APPREC-INCREASE-CURRENT> $(3,112)
<NET-CHANGE-FROM-OPS> $(960)
<EQUALIZATION> $0
<DISTRIBUTIONS-OF-INCOME> $0
<DISTRIBUTIONS-OF-GAINS> $0
<DISTRIBUTIONS-OTHER> $0
<NUMBER-OF-SHARES-SOLD> $0
<NUMBER-OF-SHARES-REDEEMED> $0
<SHARES-REINVESTED> $0
<NET-CHANGE-IN-ASSETS> $(3,721)
<ACCUMULATED-NII-PRIOR> $0
<ACCUMULATED-GAINS-PRIOR> $0
<OVERDISTRIB-NII-PRIOR> $0
<OVERDIST-NET-GAINS-PRIOR> $0
<GROSS-ADVISORY-FEES> $0
<INTEREST-EXPENSE> $0
<GROSS-EXPENSE> $0
<AVERAGE-NET-ASSETS> $0
<PER-SHARE-NAV-BEGIN> $0
<PER-SHARE-NII> $0
<PER-SHARE-GAIN-APPREC> $0
<PER-SHARE-DIVIDEND> $0
<PER-SHARE-DISTRIBUTIONS> $0
<RETURNS-OF-CAPITAL> $0
<PER-SHARE-NAV-END> $0
<EXPENSE-RATIO> $0
<AVG-DEBT-OUTSTANDING> $0
<AVG-DEBT-PER-SHARE> $0
</TABLE>
