AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1999.
REGISTRATION NO. 2-99537
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 24
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
(888) PRU-2888
(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)
COPIES TO:
CHRISTOPHER E. PALMER LEE D. AUGSBURGER
SHEA & GARDNER ASSISTANT GENERAL COUNSEL
1800 MASSACHUSETTS AVENUE, N.W. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
WASHINGTON, D.C. 20036 751 BROAD STREET
NEWARK, NEW JERSEY 07102-3777
----------
Flexible Premium Variable Life Insurance Contracts.
It is proposed that this filing will become effective (check appropriate space):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on April 30, 1999 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
23. Not Applicable
24. Other General Contract Provisions
25. Pruco Life Insurance Company of New Jersey
<PAGE>
N-8B-2 ITEM NUMBER LOCATION
- ------------------ --------
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
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 [DISCOVERY(R) LIFE PLUS LOGO]
MAY 1, 1999
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
SINGLE PREMIUM VARIABLE LIFE ACCOUNT
VARIABLE LIFE INSURANCE CONTRACTS
This prospectus describes the DISCOVERY(R) 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. You must pay an initial premium of at least $10,000. (In some cases,
the minimum initial premium is more than $10,000.)
The Contract provides lifetime insurance coverage, as long as you do not
surrender the Contract and as long as the Contract is not in default beyond its
grace period. The Contract also provides a cash surrender value if the Contract
is surrendered during your 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 charges
and the investment performance of the investment options you select. There is no
guaranteed minimum cash surrender value, and if investment performance is poor
for a sufficiently long time, the cash surrender value could decline to zero.
You may invest your premium and its earnings in the following ways:
o Invest in one or more of 15 available subaccounts of the Pruco Life Single
Premium Variable Life Account, each of which invests in a corresponding
portfolio of The Prudential Series Fund, Inc. (the "Series Fund"). The
portfolios are listed below.
CONSERVATIVE BALANCED PORTFOLIO HIGH YIELD BOND PORTFOLIO
DIVERSIFIED BOND PORTFOLIO MONEY MARKET PORTFOLIO
EQUITY PORTFOLIO NATURAL RESOURCES PORTFOLIO
EQUITY INCOME PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO
FLEXIBLE MANAGED PORTFOLIO SMALL CAPITALIZATION STOCK PORTFOLIO
GLOBAL PORTFOLIO STOCK INDEX PORTFOLIO
GOVERNMENT INCOME PORTFOLIO ZERO COUPON BOND 2000 AND 2005 PORTFOLIO
o Invest in the fixed-rate option, which pays an interest rate periodically
declared by Pruco Life of New Jersey, in its sole discretion. Any such
interest rate will never be less than an effective annual rate of 3%.
o Invest in a real estate investment option. 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 partnership,
invests primarily in income-producing real property.
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 described the Contract generally and the Pruco Life of New
Jersey Single Premium Variable Life Account. The attached prospectus for the
Series Fund and its statement of additional information describe the investment
objectives and the risks of investing in the portfolios. The attached prospectus
for the Pruco Life of New Jersey Variable Contract Real Property Account
describes the real estate investment option and the risks of investing in that
option. Please read this prospectus and the attached prospectuses and keep them
for future reference.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. 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: (888) PRU-2888
PRUDENTIAL ANNUITY SERVICE CENTER
P.O. Box 14215
New Brunswick, NJ 08906-4215
Telephone: (888) PRU-2888
*DISCOVERY is a registered mark of Prudential.
SPVL 2 Ed 5-99
<PAGE>
PROSPECTUS CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
GLOSSARY................................................................................................................ 1
INTRODUCTION AND SUMMARY................................................................................................ 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........................................................ 5
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY...................................................................... 5
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT................................................... 5
THE PRUDENTIAL SERIES FUND, INC................................................................................. 6
PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT................................................ 7
THE FIXED-RATE OPTION........................................................................................... 8
WHICH INVESTMENT SHOULD BE SELECTED?............................................................................ 8
DETAILED INFORMATION FOR PROSPECTIVE CONTRACT OWNERS.................................................................... 9
REQUIREMENTS FOR ISSUANCE OF A CONTRACT......................................................................... 9
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK".................................................................... 9
CONTRACT DATE................................................................................................... 9
ALLOCATION OF THE PREMIUM PAYMENT............................................................................... 10
TRANSFERS....................................................................................................... 11
SURRENDERS...................................................................................................... 11
LOANS........................................................................................................... 11
CHARGES AND EXPENSES............................................................................................ 11
AMOUNT OF LIFE INSURANCE (THE DEATH BENEFIT).................................................................... 15
LAPSE AND REINSTATEMENT......................................................................................... 16
ADDITIONAL PREMIUM PAYMENTS..................................................................................... 17
LIVING NEEDS BENEFIT............................................................................................ 17
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS................................ 18
WHEN PROCEEDS ARE PAID.......................................................................................... 19
REPORTS TO CONTRACT OWNERS...................................................................................... 19
TAX TREATMENT OF CONTRACT BENEFITS.............................................................................. 19
PRE-DEATH DISTRIBUTIONS......................................................................................... 20
VOTING RIGHTS................................................................................................... 21
SALE OF THE CONTRACT AND SALES COMMISSIONS...................................................................... 22
SUBSTITUTION OF SERIES FUND SHARES.............................................................................. 22
LEGAL CONSIDERATIONS RELATING TO SEX-DISTINCT PREMIUMS AND BENEFITS............................................. 22
OTHER GENERAL CONTRACT PROVISIONS............................................................................... 23
STATE REGULATION................................................................................................ 23
EXPERTS......................................................................................................... 23
LITIGATION...................................................................................................... 24
YEAR 2000 COMPLIANCE............................................................................................ 24
ADDITIONAL INFORMATION.......................................................................................... 25
FINANCIAL STATEMENTS............................................................................................ 26
DIRECTORS AND OFFICERS.................................................................................................. 27
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
</TABLE>
<PAGE>
GLOSSARY
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 date as the Contract date in each later year.
CONTRACT DATE--The date Pruco Life of New Jersey received the initial premium
payment and certain required documentation.
CONTRACT FUND--The total amount credited to a specific Contract. On any date, it
is equal to the sum of all amounts in the subaccounts, the amount invested under
the fixed-rate option, the amount invested in the Real Property Account, and the
principal amount and any accrued interest credited with respect to 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".
CONTRACT OWNER--Unless a different owner is named in the application, the owner
of the contract is the insured.
CONTRACT YEAR--A year that starts on the Contract date or on a Contract
anniversary.
DEATH BENEFIT--The amount we will pay upon the death of the insured before the
reduction of any Contract debt and amounts needed to pay charges through the
date of death.
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 allocated at a rate
declared periodically in advance.
MONTHLY DATE--The Contract date and the same date in each subsequent month.
Pruco Life Insurance Company of New Jersey--Us, we, Pruco Life Insurance Company
of New Jersey. The company offering the Contract.
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 4:15p.m. Eastern Standard time on each day during which the New
York Stock Exchange is open.
VARIABLE INVESTMENT OPTIONS--The subaccounts and the Real Property Account.
WE--Pruco Life Insurance Company of New Jersey.
YOU--The owner of the Contract.
1
<PAGE>
INTRODUCTION AND SUMMARY
THIS SUMMARY PROVIDES A BRIEF OVERVIEW OF THE MORE SIGNIFICANT ASPECTS OF THE
CONTRACT. YOU WILL FIND FURTHER DETAIL IN THE FOLLOWING SECTIONS OF THIS
PROSPECTUS AND IN THE CONTRACT. THE CONTRACT, WHICH INCLUDES THE APPLICATION
ATTACHED TO IT, CONSTITUTES THE ENTIRE AGREEMENT BETWEEN YOU AND PRUCO LIFE
INSURANCE COMPANY OF NEW JERSEY. YOU SHOULD RETAIN THESE DOCUMENTS.
As you read this prospectus, you should keep in mind that this is a life
insurance contract. Variable life insurance has significant investment aspects
and requires you to make investment decisions. Therefore, it is also a
"security". Securities that are offered to the public must be registered with
the U.S. Securities and Exchange Commission. The prospectus that is part of the
registration statement must be given to all prospective purchasers. A
substantial part of the premium pays for life insurance that will pay a death
benefit to the beneficiary in the event of the insured's death. This death
benefit generally far exceeds your total premium payments. You should not buy
this contract unless the primary reason for the purchase is to provide life
insurance protection.
BRIEF DESCRIPTION OF THE CONTRACT
The Contract is a form of variable life insurance. It is based on a Contract
Fund, the value of which changes every business day. The chart below described
how the value of your Contract Fund changes.
You can purchase this contract by making an initial premium payment. The minimum
initial payment if $10,000. For insureds aged 76 through 85 the minimum initial
payment is $50,000. You decide the amount of the initial premium (as long as it
meets the minimum requirement) and from this we determine the initial amount of
life insurance. Although the Contract will begin to vary immediately to reflect
the investment results, the amount of life insurance will ordinarily not change
for several years. The amount of life insurance may not change at all. If
investment results are sufficiently favorable the amount of insurance will
eventually increase.
You may invest your premium in one or more of the 15 subaccounts, a real estate
investment option or in the fixed-rate option. The amount invested will be your
initial premium payment minus any charge for taxes attributable to premiums.
Your Contract Fund value changes every day depending upon the change in the
value of the particular investment options that you have selected.
Although the value of your Contract Fund will increase if there is favorable
investment performance in the subaccounts you select, there is a risk that
investment performance will be unfavorable and that the value of your Contract
Fund will decrease. The risk will be different, depending upon which investment
options you choose. See WHICH INVESTMENT OPTION SHOULD BE SELECTED?, page 8. If
you select the fixed-rate option, we credit your account with a declared rate or
rates of interest but you assume the risk that the rate may change.
You may surrender the Contract in full and receive the cash surrender value.
Partial surrenders and contract splits are not permitted. You may borrow against
the value of your Contract. See LOANS, page 12.
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.
CHARGES
The following chart outlines the components of your Contract Fund and the
adjustments which may be made including the maximum charges which may be
deducted from your premium payment and from the amounts held in the designated
investment options. These charges are largely designed to cover insurance costs
and risks as well as sales and administrative expenses. The maximum charges
shown in the chart, as well as the current lower charges, are fully described
under CHARGES AND EXPENSES, page 12.
2
<PAGE>
- --------------------------------------------------------------------------------
PREMIUM PAYMENT
- --------------------------------------------------------------------------------
|
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o Less charge for taxes attributable to premiums. (Under
certain circumstances, this charge may be reduced or
eliminated, see Charges and Expenses, page 12).
-----------------------------------------------------------
|
- --------------------------------------------------------------------------------
INVESTED PREMIUM AMOUNT
o To be invested in one or a combination of:
o 15 investment portfolios of the Series Fund.
o The Real Property Account.
o The Fixed Rate Option.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
CONTRACT FUND
On the Contract Date, the Contract Fund is equal to the invested
premium amount minus any of the charges described below which may be
due on that date. Thereafter, the value of the Contract Fund changes
daily.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
PRUCO LIFE OF NEW JERSEY ADJUSTS THE CONTRACT FUND FOR:
o Addition of any increase due to investment results of the chosen
subaccounts.
o Addition of guaranteed interest at an effective annual rate of 3%
(plus any excess interest if applicable) on the portion of the
Contract Fund allocated to the fixed-rate option.
o Addition of guaranteed interest at an effective annual rate of either
5.5% or 4% on the amount of any Contract loan. (Separately, interest
charged on the loan accrues at an effective annual rate of 6%. See
LOANS, page 11.)
o Subtraction of any decrease due to investment results of the chosen
subaccounts.
o Addition of any new invested premium amounts. (Additional premiums may
be paid daily, in limited circumstances.)
o Subtraction of the charges listed below, as applicable.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
DAILY CHARGES
o ADMINISTRATIVE EXPENSE CHARGE--We deduct a daily administrative
expense charge, equivalent to an annual rate of 0.35% from the
variable investment options.
o MORTALITY AND EXPENSE RISK CHARGE--We deduct a daily mortality and
expense risk charge equivalent to an annual rate of 0.9% from the
variable investment options.
o MANAGEMENT FEES AND EXPENSES--We deduct these fees and expenses
from the Series Fund and Real Property Account assets.
- --------------------------------------------------------------------------------
|
- --------------------------------------------------------------------------------
MONTHLY CHARGES
o INSURANCE PROTECTION CHARGE--We generally deduct an amount equal to
0.05% of the contract fund per month. If the contract fund falls so
low that making a monthly charge of 0.05% inadequate, the charge may
be increased to the amount permitted by the 1980 Commissioners
Standard Ordinary Mortality Table ("980 CSO Table").
- --------------------------------------------------------------------------------
3
<PAGE>
|
- --------------------------------------------------------------------------------
POSSIBLE ADDITIONAL CHARGES
o During the first six years, we will assess a contingent deferred sales
charge if the contract is surrendered. The maximum contingent sales
charge during the first year is 9% of the amount credited under the
contract. This charge is decreased by 1% each year until the sixth
year when it equals 4% of the amount credited under the contract. We
do not assess a charge after the sixth year. This charge will never be
greater than 9% of your initial premium payment.
- --------------------------------------------------------------------------------
REFUND
For a limited time, you may return your contract for a refund in accordance with
the terms of its free-look provision. See SHORT-TERM CANCELLATION RIGHT or "FREE
LOOK", page 9.
For the definition of special terms used in this prospectus, see GLOSSARY, page
1.
THE REPLACEMENT OF LIFE INSURANCE IS GENERALLY NOT IN YOUR INTEREST. IN MOST
CASES, IF YOU REQUIRE ADDITIONAL COVERAGE, THE BENEFITS OF THE EXISTING CONTRACT
CAN BE PROTECTED BY PURCHASING ADDITIONAL COVERAGE OR A SUPPLEMENTAL CONTRACT.
IF YOU ARE CONSIDERING REPLACING A CONTRACT, YOU SHOULD COMPARE THE BENEFITS AND
COSTS OF SUPPLEMENTING YOUR EXISTING CONTRACT WITH THE BENEFITS AND COSTS OF
PURCHASING THE CONTRACT DESCRIBED IN THIS PROSPECTUS AND YOU SHOULD CONSULT WITH
A QUALIFIED TAX ADVISER.
THIS PROSPECTUS MAY ONLY BE OFFERED IN JURISDICTIONS IN WHICH THE OFFERING IS
LAWFUL. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN THE PROSPECTUSES
AND STATEMENT OF ADDITIONAL INFORMATION FOR THE SERIES FUND AND THE PROSPECTUS
FOR THE PRUCO LIFE OF NEW JERSEY VARIABLE CONTRACT REAL PROPERTY ACCOUNT.
4
<PAGE>
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. 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 Insurance Company of America ("Prudential"), a
mutual insurance company founded in 1875 under the laws of the State of New
Jersey. Prudential is currently considering reorganizing itself into a publicly
traded stock company through a process known as "demutualization." On February
10, 1998, the Company's Board of Directors authorized management to take the
preliminary steps necessary to allow the Company to demutualize. On July 1,
1998, legislation was enacted in New Jersey that would permit this conversion to
occur and that specified the process for conversion. Demutualization is a
complex process involving development of a plan of reorganization, adoption of a
plan by the Company's Board of Directors, a public hearing, voting by qualified
policyholders and regulatory approval, all of which could take two or more years
to complete. Prudential's management and Board of Directors have not yet
determined to demutualize and it is possible that, after careful review,
Prudential could decide not to go public.
The plan of reorganization, which hasn't been developed and approved, would
provide the criteria for determining eligibility and the methodology for
allocating shares or other consideration to those who would be eligible.
Generally, the amount of shares or other consideration eligible customers would
receive would be based on a number of factors, including the types, amounts and
issue years of their policies. As a general rule, owners of Prudential-issued
insurance policies and annuity contracts would be eligible, while mutual fund
customers and customers of the Company's subsidiaries, such as the Pruco Life
insurance companies, would not be. It has not yet been determined whether any
exceptions to that general rule will be made with respect to policyholders and
contractowners of Prudential's subsidiaries, including the Pruco Life insurance
companies.
As of December 31, 1998, 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. Prudential may make
additional capital contributions to Pruco Life of New Jersey as needed to enable
it to meet its reserve requirements and expenses. 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 B-1 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 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. Pruco Life of New Jersey will consider any
possible adverse impact the transfer might have on the account before making any
such transfer.
5
<PAGE>
The account is registered with the U.S. 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.
Currently, you may invest in one or a combination of 15 subaccounts within the
account, each of which invests in a single corresponding portfolio of the Series
Fund. We may add additional subaccounts in the future. The account's financial
statements begin on page A-1.
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. The Series
Fund has 15 separate portfolios. The following is a list of those portfolios and
their investment objectives.
o CONSERVATIVE BALANCED PORTFOLIO - The investment objective is a total
investment return consistent with a conservatively managed diversified
portfolio. The portfolio invests in a mix of equity securities, debt
obligations and money market instruments.
o DIVERSIFIED BOND PORTFOLIO - The investment objective is a high level of
income over a longer term while providing reasonable safety of capital. The
portfolio invests primarily in higher grade debt obligations and high
quality money market investments.
o EQUITY PORTFOLIO - The investment objective is capital appreciation. The
portfolio invests primarily in common stocks of major established
corporations as well as smaller companies that offer attractive prospects
of appreciation.
o EQUITY INCOME PORTFOLIO - The investment objective is both current income
and capital appreciation. The portfolio invests primarily in common stocks
and convertible securities that provide good prospects for returns above
those of the Standard & Poor's 500 Composite Stock Price Index (the "S&P
500 Index") or the NYSE Composite Index.
o FLEXIBLE MANAGED PORTFOLIO - The investment objective is a total investment
return consistent with an aggressively managed diversified portfolio. The
portfolio invests in a mix of equity securities, debt obligations and money
market instruments.
o GLOBAL PORTFOLIO - The investment objective is long-term growth of capital.
The portfolio invests primarily in common stocks (and their equivalents) of
foreign and U.S. companies.
o GOVERNMENT INCOME PORTFOLIO - The investment objective is a high level of
income over the longer term consistent with the preservation of capital.
The portfolio invests primarily in U.S. Government securities, including
intermediate and long-term U.S. Treasury securities and debt obligations
issued by agencies or instrumentalities established by the U.S. government.
o HIGH YIELD BOND PORTFOLIO - The investment objective is a high total
return. The portfolio invests primarily in high yield/high risk debt
securities.
o MONEY MARKET PORTFOLIO - The investment objective is maximum current income
consistent with the stability of capital and the maintenance of liquidity.
The portfolio invests in high quality short-term debt obligations that
mature in 13 months or less.
o NATURAL RESOURCES PORTFOLIO - The investment objective is long-term growth
of capital. The portfolio invests primarily in common stocks and
convertible securities of natural resource companies and securities that
are related to the market value of some natural resource.
o PRUDENTIAL JENNISON PORTFOLIO - The investment objective is to achieve
long-term growth of capital. The portfolio invests primarily in equity
securities of major established corporations that offer above-average
growth prospects.
o SMALL CAPITALIZATION STOCK PORTFOLIO - The investment objective is
long-term growth of capital. The portfolio invests primarily in equity
securities of publicly-traded companies with small market capitalization.
o STOCK INDEX PORTFOLIO - The investment objective is investment results that
generally correspond to the performance of publicly-traded common stocks.
The portfolio attempts to duplicate the price and yield performance of the
Standard & Poor's 500 Composite Stock Index (the "S&P 500 Index").
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o TWO ZERO COUPON BOND PORTFOLIOS - 2000 AND 2005 - The investment objective
of these two portfolios is the highest predictable compound investment of a
specific period of time, consistent with the safety of invested capital.
The portfolio invests primarily in debt obligations of the U.S. Treasury
and corporations that have been issued without interest coupons or have
been stripped to their interest coupons, or have interest coupons that have
been stripped from the debt obligations.
Prudential is the investment advisor for the assets of each of the portfolios
within the Series Fund. Prudential's principal business address is 751 Broad
Street, Newark, New Jersey 07102-3777. Prudential has a Service Agreement with
its wholly-owned subsidiary The Prudential Investment Corporation ("PIC"), which
provides that, subject to Prudential's supervision, PIC will furnish investment
advisory services in connection with the management of the Series Fund. In
addition, 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 Prudential Jennison Portfolio. For more information, see the
attached Series Fund prospectus and the Series Fund's statement of additional
information.
As an investment advisor, Prudential charges the Series Fund a daily investment
management fee as compensation for its services. In addition to the investment
management fee, each portfolio incurs certain expenses such as accounting and
custodian fees. These fees and expenses are listed in the table in the
DEDUCTIONS FROM PORTFOLIOS page 12, and are more fully described in the attached
prospectus for the Series Fund.
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 that 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. Material conflicts could
result from such things as:
o changes in state insurance law;
o changes in federal income tax law;
o changes in the investment management of any portfolio of the Series
Fund; or
o differences between voting instructions given by variable life
insurance and variable annuity contract owners.
A FULL DESCRIPTION OF THE SERIES FUND, ITS INVESTMENT OBJECTIVES, MANAGEMENT,
POLICIES, RESTRICTIONS, EXPENSES, INVESTMENT RISKS, 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 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
Prudential, under which Prudential selects the properties and other investments
held by the partnership. 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
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<PAGE>
PROSPECTUS FOR THE REAL PROPERTY ACCOUNT, WHICH SHOULD BE READ TOGETHER WITH
THIS PROSPECTUS IF YOU ARE CONSIDERING THE REAL PROPERTY ACCOUNT AS AN
INVESTMENT OPTION. THERE IS NO ASSURANCE THAT THE INVESTMENT OBJECTIVES WILL BE
MET.
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 SEC HAS NOT REVIEWED
THE DISCLOSURE IN THIS PROSPECTUS RELATING TO THE FIXED-RATE OPTION. ANY
INACCURATE OR MISLEADING DISCLOSURE REGARDING THE FIXED-RATE OPTION MAY,
HOWEVER, SUBJECT PRUCO LIFE OF NEW JERSEY AND ITS OFFICERS TO CIVIL LIABILITY IF
THAT RESULTS IN ANY DAMAGE.
You may elect to allocate, either initially or by transfer, all or part of the
amount credited under the contract to a fixed-rate option. This amount becomes
part of Pruco Life of New Jersey's general account. The general account 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 you 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, you will be advised of the interest rates that currently apply to your
Contract.
Transfers from the fixed-rate option are subject to strict limits. (See
TRANSFERS, page 10). 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,
page 19.
WHICH INVESTMENT OPTION SHOULD BE SELECTED?
Historically, for investments held over relatively long periods, the investment
performance of common stocks has generally been superior to that of short or
long-term debt securities, even though common stocks have been subject to much
more dramatic changes in value over short periods of time. Accordingly,
portfolios such as the Stock Index, Equity Income, Equity, Prudential Jennison,
Small Capitalization Stock or Global may be desirable options if you are willing
to accept such volatility in your Contract values. Each of these equity
portfolios involves different policies and investment risks.
You may prefer the somewhat greater protection against loss of principal (and
reduced chance of high total return) provided by the Diversified Bond,
Government Income or Zero Coupon Bond Portfolios. Or, you may want even greater
safety of principal and may prefer the Money Market Portfolio or the fixed-rate
option, recognizing that the level of short-term rates may change rather
rapidly. If you are willing to take risks and possibly achieve a higher total
return, you may prefer the High Yield Bond Portfolio, recognizing that the risks
are greater for lower quality bonds with higher yields. You may choose to
allocate a portion of your investment to specialized investment options, such as
the Natural Resources Portfolio and the Real Property Account. You may wish to
divide your invested premium among two or more of the investment options. You
may wish to obtain diversification by relying on Prudential's judgment for an
appropriate asset mix by choosing the Conservative Balanced or Flexible Managed
Portfolio.
Your choice should take into account how willing you are to accept investment
risks, how your other assets are invested, and what investment results you may
experience in the future. You should consult your Prudential representative from
time to time about the choices available to you under the Contract. Prudential
recommends AGAINST frequent transfers among the several options. Experience
generally indicates that "market timing" investing, particularly by
non-professional investors, is likely to prove unsuccessful.
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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. Pruco Life of New Jersey requires evidence of insurability, which may
include a medical examination, before issuing any contract. We will only issue
the contract on insureds who are classified as standard risks following Pruco
Life of New Jersey's regular underwriting process. If we do not approve your
application, because the current underwriting requirements are not met, we will
promptly return your premium payment. The company reserves the right to change
these requirements on a non-discriminatory basis.
SHORT-TERM CANCELLATION RIGHT OR "FREE LOOK"
Generally, you can return a contract for a refund within 10 days
o after you receive it,
o within 45 days after you sign Part I of the application, or
o within 10 days after we mail 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. You can request a refund by mailing or delivering the
contract to the representative who sold it or to the Prudential Annuity Service
Center specified in the contract. If you return the contract according to this
provision it shall be deemed void from the beginning. You will then receive a
refund of all premium payments made, plus or minus any change due to investment
experience. 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.
CONTRACT DATE
The Contract date will be the date we receive the initial payment and the
completed application in the Prudential Annuity Service Center. On the Contract
date, the amount credited under the Contract will begin to vary with the
investment results of the variable investment options that you have chosen or
the declared interest rate, if you have selected the fixed-rate option. Your
insurance protection begins on the Contract date. Your Contract date is listed
on your Contract.
ALLOCATION OF THE PREMIUM PAYMENT
You determine how the initial premium payment, after the deduction for any taxes
attributable to premiums, will be allocated among the subaccounts, the
fixed-rate option, and the Real Property Account. You 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 if you 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. Automatic monthly
transfers must be at least 3% of the amount INITIALLY allocated to the Dollar
Cost Averaging account (that is, if $10,000 is INITIALLY ALLOCATED, the minimum
monthly transfer is $300), 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 account.
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 ("NYSE") is
open on that date. If the NYSE is not open on the Monthly date, the
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<PAGE>
transfer will take effect as of the end of the valuation period on the next day
that the NYSE is open. If the Monthly date does not occur in a particular month
(e.g., February 30), the transfer will take effect as of the end of the
valuation period on the last day of the month that the NYSE is open. Automatic
monthly transfers will continue until the amount designated for Dollar Cost
Averaging has been transferred, or until you gives notification of a change in
allocation or cancellation of the account. Currently, there is no charge for
using the Dollar Cost Averaging account.
TRANSFERS
You may, at least four times each Contract year, transfer amounts from one
subaccount to another subaccount, to the fixed-rate option, or to the Real
Property Account. We are not currently enforcing this limit, however, we may do
so in the future if it becomes necessary due to excessive transfer activity. The
amount you transfer from any one subaccount must be at least $300 (unless the
subaccount balance is less than $300, in which case you may transfer the entire
balance).
A transfer will take effect as of the end of the valuation period in which a
proper transfer request is received at the Prudential Annuity Service Center.
You may transfer amounts by proper written notice to the Prudential Annuity
Service Center, or by telephone, provided you are enrolled to use the Telephone
Transfer System. You will automatically be enrolled to use the Telephone
Transfer System unless the contract is jointly owned or you elect not to have
this privilege. Telephone transfers are not available if Pruco Life of New
Jersey has received proper notice that the contract is assigned. See ASSIGNMENT,
page 23.
We will use reasonable procedures, such as asking you to provide certain
personal information provided on your application for insurance, to confirm that
instructions given by phone are genuine. We will not be held liable for
following telephone instructions we reasonably believe to be genuine. Pruco Life
of New Jersey cannot guarantee that you will be able to get through to complete
a transfer during peak periods such as periods of drastic economic or market
change.
In addition, you may transfer the entire amount of the Contract Fund in the
subaccounts to the fixed-rate option at any time. If you wish to convert your
variable contract to a fixed-benefit contract you 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 you direct that it be transferred to another
subaccount. 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
only 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:
o 25% of the amount in the fixed-rate option and
o $5,000.
If we receive a proper request to transfer from the fixed-rate option before the
Contract anniversary, we will process the transfer request as of the Contract
anniversary. If we receive a proper transfer request during the 30-day period
after the Contract anniversary, we will process the transfer request as of the
end of the valuation period in which the request is received at the Prudential
Annuity Service Center. We may change these limits and procedures in the future.
Transfers to and from the Real Property Account are subject to restrictions
described in a separate prospectus for that investment option.
The Contract was not designed for professional market timing organizations or
other organizations or individuals using programmed, large or frequent
transfers. A pattern of exchanges that coincides with a "market timing" strategy
may be disruptive to the Account and the Series Fund and will be discouraged. If
such a pattern were to be
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found, Pruco Life of New Jersey may be required to modify the transfer
procedures, including, but not limited to, not accepting transfer requests of an
agent acting under a power of attorney on behalf of more than one owner.
SURRENDERS
You 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). Partial surrenders and contract splits are permitted. To
surrender a contract, we may require you to deliver or mail it, together with a
written request in a form that meets our needs, to the Prudential Annuity
Service Center. We will determine the cash surrender value of the contract as of
the end of the valuation period during which proper notice is received at the
Prudential Annuity Service Center. See WHEN PROCEEDS ARE PAID, page 15.
Surrender of the contract may have tax consequences. See TAX TREATMENT OF
CONTRACT BENEFITS, page 19.
LOANS
You may borrow from Pruco Life of New Jersey an amount up to the "loan value" of
the contract using only the contract as security for the loan. Your Contract
provides that loans will be made only on or after your first contract
anniversary. However, as an administrative practice, we current allow you to
make a loan during your first contract year. We may change this practice. The
loan value of your contract is 90% of an amount equal to your Contract fund,
reduced by any charges due upon surrender. However, as an administrative
practice, we currently allow you to borrow up to 100% of the portion of your
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. We may change this practice. Loans
will be treated as distributions for tax purposes. See TAX TREATMENT OF CONTRACT
BENEFITS, page 19.
Interest charged on a loan is accrued daily. Interest is due on each Contract
anniversary or when the loan is paid back, whichever comes first. If interest is
not paid when due, it will become part of the loan and we will charge interest
on it too. We charge interest at an effective annual rate of 6%.
When you make a loan, an amount equal to the loan proceeds will be transferred
out of your investment options. We will generally reduce the amount invested in
each investment option 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
the Contract. The amount transferred out of the investment options continues to
be part of your Contract fund. It will be credited daily with interest at an
effective annual rate of either 4% or 5.5%. We determine the rate or rates
applicable to your Contract in the following way. 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%. So the
net cost of the loan to you 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.
Any Contract debt will directly reduce a Contract's cash surrender value and
will be subtracted from the death benefit to determine the amount payable. In
addition, even if the loan is fully repaid, it may have an effect on future
death benefits because the investment results of the selected investment options
will apply only to the amount remaining invested under those options. The longer
the loan is outstanding, the greater the effect is likely to be. The effect
could be favorable or unfavorable. If investment results are greater than the
rate being credited on the amount of the loan while the loan is outstanding,
values under the Contract will not increase as rapidly as they would have if no
loan had been made. If investment results are below that rate, Contract values
will be higher than they would have been had no loan been made.
In addition, you should note 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
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cost of insurance charge (see item 4 under CHARGES AND EXPENSES, below) is not
reduced when you make a contract loan but the amount in the subaccount[s] from
which the charges are deducted is reduced by the amount of the loan.
When you repay all or part of a loan, we will increase the portion of the
Contract fund in the investment options by the amount of the loan you repay. If
loan interest is paid when due, it will not change the portion of the Contract
fund allocated to the investment options.
CHARGES AND EXPENSES
This section provides a detailed description of each charge that is described
briefly in the chart on page 3, and an explanation of the purpose of the charge.
DEDUCTION FROM PREMIUM PAYMENTS
We will deduct the amount of premium-based taxes applicable to your Contract
from the initial premium payment. These taxes vary from state to state and also
vary in some states by municipalities and counties. The tax rates in those
jurisdictions that impose a tax generally range from 0.75% to 5% (but in some
instances may exceed 5%). The amount remaining after the deduction of premium
taxes is allocated to the investment option(s) as you direct. However, if
o 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
o 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,
we 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. 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
you direct. During 1998, 1997 and 1996, Pruco Life of New Jersey received no
money in charges for payment of state premium taxes.
DEDUCTIONS FROM PORTFOLIOS
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 6. 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.
The account purchases shares of the Series Fund at net asset value. The net
asset value of those shares reflects investment management fees and expenses
already deducted from the assets of the Series Fund. More detailed information
is contained in the attached prospectus for the Series Fund.
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The total expenses of each portfolio for the year 1998 expressed as a percentage
of the average assets during the year are shown below:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
OTHER EXPENSES TOTAL EXPENSES
INVESTMENT (AFTER EXPENSE (AFTER EXPENSE
PORTFOLIO ADVISORY FEE REIMBURSEMENT)* REIMBURSEMENT)*
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
MONEY MARKET PORTFOLIO 0.40% 0%* 0.40%*
DIVERSIFIED BOND PORTFOLIO 0.40% 0%* 0.40%*
GOVERNMENT INCOME PORTFOLIO 0.40% 0.03% 0.43%
ZERO COUPON BOND PORTFOLIO 2000 0.40% 0%* 0.40%*
ZERO COUPON BOND PORTFOLIO 2005 0.40% 0%* 0.40%*
CONSERVATIVE BALANCED PORTFOLIO 0.55% 0%* 0.40%*
FLEXIBLE MANAGED PORTFOLIO 0.60% 0%* 0.40%*
HIGH YIELD BOND PORTFOLIO 0.55% 0.03% 0.58%
STOCK INDEX PORTFOLIO 0.35% 0.02% 0.37%
EQUITY INCOME PORTFOLIO 0.40% 0.02% 0.42%
EQUITY PORTFOLIO 0.45% 0%* 0.40%*
PRUDENTIAL JENNISON PORTFOLIO 0.60% 0.03% 0.63%
SMALL CAPITALIZATION STOCK PORTFOLIO 0.40% 0.07% 0.47%
GLOBAL PORTFOLIO 0.75% 0.11% 0.86%
NATURAL RESOURCES PORTFOLIO 0.45% 0.04% 0.49%
- ----------------------------------------------------------------------------------------
</TABLE>
* 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., in which the account previously invested. For the Money Market,
Diversified Bond, Zero Coupon Bond Portfolio 2000, Zero Coupon Bond
Portfolio 2005, Conservative Balanced, Flexible Managed, and Equity
Portfolios, Pruco Life 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 also makes, on a
non-guaranteed basis, daily adjustments to ensure that the portfolio
expenses indirectly borne by a contract owner investing in the Zero Coupon
Bond Portfolio 2005 will not exceed the investment management fee.
Without such adjustments the portfolio expenses indirectly borne by a contract
owner, expressed as a percentage of the average daily net assets by portfolio,
would have been 0.41% for the Money Market Portfolio, 0.42% for the Diversified
Bond Portfolio, 0.62% for the Zero Coupon Bond Portfolio 2000, 0.61% for the
Zero Coupon Bond Portfolio 2005, 0.57% for the Conservative Balanced Portfolio,
0.61% for the Flexible Managed Portfolio, and 0.47% for the Equity Portfolio in
1998. Pruco Life 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.
DAILY DEDUCTION FROM THE CONTRACT FUND
We impose a charge for the expenses we incur in administering the contracts,
which includes such things as underwriting the contract, conducting any medical
examinations, establishing and maintaining records, and providing reports to
contract owners. We deduct this charge daily from the assets of each of the
variable investment options in an amount equivalent to an effective annual rate
of up to 0.35% (.00095723%, daily). During 1998, 1997, and 1996, Pruco Life of
New Jersey received a total of approximately $170,810, $166,677, and $157,141,
respectively, in annual administrative charges under the contracts. We
guaranteed we will not increase this charge above an effective annual rate of
0.35% over the life of the Contract.
We charge for assuming the risk that our 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
1998, 1997 and
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1996, Pruco Life of New Jersey received a total of approximately $438,033,
$427,432, and $402,978, respectively, in mortality and expense risk charges
under the Contracts.
MONTHLY DEDUCTION FROM CONTRACT FUND
Immediately after your Contract is issued the amount of insurance payable upon
your death (the face amount) will be substantially higher than the initial
premium payment. As you grow 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 your death will
become smaller. But the death benefit will always be higher than the Contract
fund. To enable us to pay this additional amount, we make a monthly charge
commencing on the Contract date. 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 we have 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 we 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 there was a substantial market drop) in
order to bring about an increase in the insurance charge.
SURRENDER CHARGE
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. 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 1998, 1997, and
1996, Pruco Life of New Jersey received a total of $0, $4,638, and $2,163,
respectively, in sales charges on surrenders of the Contracts.
OTHER INFORMATION ABOUT CHARGES
As you can see 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 our standards for elimination or reduction of the premium tax
charge as explained in item 1 above.
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Thereafter, assuming a total Series Fund expense ratio of 0.47% (taking into
account any applicable offsets described under THE PRUDENTIAL SERIES FUND, INC.
on page 6), 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
2.32% to 2.37% lower than the gross investment return of the underlying
portfolio of the Series Fund in which the assets held under the contract are
invested.
The Account is not a separate taxpayer for purposes of the Internal Revenue
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 against the account for
company federal income taxes (excluding any charge for taxes attributable to
premiums). 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 company federal income taxes that would be attributable
to the Account.
Under current law, Pruco Life of New Jersey may incur state and local taxes (in
addition to premium-based taxes) in several states. At present, these taxes are
not significant and they are not charged against the Account. If there is a
material change in the applicable state or local 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.
AMOUNT OF LIFE INSURANCE (THE DEATH BENEFIT)
As stated earlier, when we issue the contract we will determine the initial
amount of life insurance based on the amount of the initial premium payment.
That amount will be shown on the cover page of the contract and is called the
"face amount". We calculate the face amount 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 death of the insured..the death
benefit..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. However, 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%.
- --------------------------------------------------------------------------------
AGE OF FACE AMOUNT FACE AMOUNT
INSURED FOR $10,000 FOR $10,000
ON THE PREMIUM PREMIUM
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 22.
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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. The latter
ensures that the contract will always have a death benefit large enough to be
treated as life insurance for tax purposes under current law. Representative
multiples for insureds are shown in the table below.
- --------------------------------------------------------------------------------
DEATH BENEFIT IS NO LESS THAN
AGE OF THE CONTRACT FUND TIMES THE
INSURED 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 age 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 $123,049 due to a gross return in the selected Series Fund
portfolios of 12%, the death benefit payable will be $196,879 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 22.
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 you a notice of default
setting forth the payment necessary to keep the contract in force. This payment
must be received at the Prudential Annuity Service Center within the 61 day
grace period after the notice of default is mailed or the contract will lapse
and have no value. A contract that lapses with an outstanding contract loan may
have tax consequences. See TAX TREATMENT OF CONTRACT BENEFITS on page 19.
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.
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ADDITIONAL PREMIUM PAYMENTS
After the contract has been in force for several years, you may be allowed the
option of paying additional premium payments in order to increase your 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. Upon request, we will tell you whether an additional
premium payment can be made and its maximum amount. If you 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. We will not accept an additional premium payment if it would, through
the application of the multiples shown on page 16, 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
You may elect to add the Living Needs BenefitSM to your Contract at the time of
issue, provided we receive satisfactory evidence of insurability. The benefit
may vary state-by-state. It 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.
The Living Needs Benefit allows you 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. You should consult with a
Pruco Life of New Jersey representative to determine 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 you as a Living Needs
Benefit. You may:
o elect to receive the benefit in a single sum or
o 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 you as a Living Needs Benefit. You may:
o elect to receive the benefit in a single sum or
o 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.
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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 to the extent regulatory approval has
been obtained. If you want this benefit it 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 you are 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 you, and the adjusted premium payments that would be in effect if less than
the entire death benefit is accelerated.
You should consider whether adding this settlement option is appropriate in your
situation. Adding the Living Needs Benefit to the Contract has no adverse
consequences; however, electing to use it could. With the exception of certain
business-related policies, the Living Needs Benefit is excluded from income if
the insured is terminally ill or chronically ill as defined in the tax law
(although the exclusion in the latter case may be limited). You should consult
with a qualified tax advisor before electing to receive this benefit. Receipt of
a Living Needs Benefit payment may also affect your eligibility for certain
government benefits or entitlements.
ILLUSTRATIONS OF CASH SURRENDER VALUES, DEATH BENEFITS, AND ACCUMULATED PREMIUMS
The following four tables have been prepared to show you 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 0.47%, 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 0.47% 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 -1.72%,
2.28%, 6.28%, and 10.28%.
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 MONTHLY
DEDUCTION FROM CONTRACT FUND, page 14. 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.
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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.
If you are considering the purchase of a variable life insurance contract from
another insurance company, you should not rely upon these tables for comparison
purposes. A comparison between two tables, each showing values for a 35 year old
man, may be useful for a 35 year old man but would be inaccurate if made for
insureds of other ages or sex. Your Pruco Life of New Jersey representative can
provide you with a hypothetical illustration for your own age and sex. You can
obtain an illustration using a premium amount other than those shown in this
prospectus. You may use assumed gross returns different than those shown in the
tables, although currently they may not be higher than 12%.
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 the Prudential Annuity
Service Center 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 NYSE is closed for
other than a regular holiday or weekend, trading is restricted by the SEC or the
SEC declares an emergency.
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, you will be sent statements that provide certain
information pertinent to your contract. These statements detail values and
transactions made and specific contract data that apply only to each particular
contract. On request, you 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.
You will be sent annual and semi-annual reports of the Series Fund showing the
financial condition of the portfolios and the investments held in each.
If a single individual or company invests in the Series Fund through more than
one variable insurance contract, then the individual or company will receive
only one copy of each annual and semi-annual report issued by the Series Fund.
However, if such individual or company wishes to receive multiple copies of any
such report, a request may be made by calling the toll-free telephone number
listed on the cover page of this prospectus.
TAX TREATMENT OF CONTRACT BENEFITS
Introduction
This summary provides general information on the federal income tax treatment of
the contract. It is not a complete statement of what the federal income taxes
will be in all circumstances. It is based on current law and
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interpretations, which may change. It does not cover state taxes or other taxes.
It is not intended as tax advice. You should consult your own qualified tax
adviser for complete information and advice.
Treatment as Life Insurance
This contract must meet certain requirements to qualify as life insurance for
tax purposes. These requirements include certain definitional tests and rules
for diversification of the contract's investments.
We believe we have taken adequate steps to insure that the contract qualifies as
life insurance for tax purposes. Generally speaking, this means that:
you will not be taxed on the growth of the investment options in the contract,
unless you receive a distribution from the contract.
the contract's death benefit will be tax free to your beneficiary.
Although we believe that the contract should qualify as life insurance for tax
purposes, there are some uncertainties, particularly because the Secretary of
the Treasury has not yet issued permanent regulations that bear on this
question. Accordingly, we reserve the right to make changes, which will be
applied uniformly to all Contract owners after advance written notice, that we
deem necessary to insure that the contract will qualify as life insurance.
PRE-DEATH DISTRIBUTIONS
The contract is a modified endowment contract under federal tax law. This means
that:
amounts you receive under the contract before the insured's death, including
loans and withdrawals, are included in your income on an income first basis
(that is, you will have taxable income to the extent that the contract fund
before surrender charges exceeds the premiums paid for the contract increased by
the amount of any loans previously included in income and reduced by any untaxed
amounts previously received other than the amount of any loans excludible from
income). An assignment of a modified endowment contract is taxable in the same
way. These rules also apply to pre-death distributions, including loans, made
during the two-year period before the time that the contract became a modified
endowment contract.
New York taxable income on pre-death distributions (including full surrenders)
is subject to a penalty of 10 percent unless the amount is received on or after
age 59-1/2, on account of you becoming disabled or as a life annuity. It is
presently unclear how the penalty tax provisions apply to the contracts owned by
a business.
all modified endowment contracts issued by us to you during the same calendar
year are treated as a single contract for purposes of applying these rules.
Withholding
You must affirmatively elect that no taxes be withheld from a pre-death
distribution. Otherwise, the taxable portion of any amounts you receive will be
subject to withholding. You are not permitted to elect out of withholding if you
do not provide a social security number or other taxpayer identification number.
You may be subject to penalties under the estimated tax payment rules if your
withholding and estimated tax payments are insufficient to cover the tax due.
Other Tax Considerations
If you transfer or assign the contract to someone else, there may be gift,
estate and/or income tax consequences. If you transfer the contract to a person
two or more generations younger than you (or designate such a younger person as
a beneficiary), there may be generation skipping transfer tax consequences.
Deductions for interest paid
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or accrued on contract debt or on other loans that are incurred or continued to
purchase or carry the contract may be denied. Your individual situation or that
of your beneficiary will determine the federal estate taxes and the state and
local estate, inheritance and other taxes due if you or the insured dies.
Business-Owned Life Insurance
If a business, rather than an individual, is owner of the contract, there are
some additional rules. Business contract owners generally cannot deduct premium
payments. Business contract owners generally cannot take tax deductions for
interest on contract debt paid or accrued after October 13, 1995. An exception
permits the deduction of interest on policy loans on contracts for up to 20 key
persons. The interest deduction for contract debt on these loans is limited to a
prescribed interest rate and a maximum aggregate loan amount of $50,000 per key
insured person. The corporate alternative minimum tax also applies to
business-owned life insurance. This is an indirect tax on additions to the
contract fund or death benefits received under business-owned life insurance
policies.
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 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:
o election of the Board of Directors of the Series Fund;
o ratification of the independent accountant of the Series Fund;
o approval of the investment advisory agreement for a portfolio of the Series
Fund corresponding to the contract owner's selected subaccount[s];
o any change in the fundamental investment policy of a portfolio
corresponding to the contract owner's selected subaccount[s]; and
o 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
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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
Currently, Pruco Securities Corporation ("Prusec"), an indirect wholly-owned
subsidiary of Prudential, which was organized in 1971 under New Jersey law, acts
as the principal underwriter of the Contract. Pruco Life of New Jersey expects
that during 1999 Prusec's responsibilities as principal underwriter will be
assigned to Prudential Investment Management Services LLC ("PIMS"). PIMS, also
an indirect wholly-owned subsidiary of Prudential, is a limited liability
corporation organized under Delaware law in 1996. PIMS will act as principal
underwriter under substantially the same terms as Prusec does currently. Both
Prusec and PIMS are registered as broker-dealers under the Securities Exchange
Act of 1934 and are members of the National Association of Securities Dealers,
Inc. The principal business address of both Prusec and PIMS is 751 Broad Street,
Newark, New Jersey 07102-3777.
The contract is currently sold by registered representatives of the principal
underwriter and may also be sold through other broker-dealers authorized by the
principal underwriter, including broker-dealers otherwise unaffiliated with
Prudential. Registered representatives of such other unaffiliated broker-dealers
may be paid on a different basis than registered representatives of the
principal underwriter or broker-dealers affiliated with Prudential. The maximum
commission that will be paid to the broker-dealer to cover both the individual
representative's commission and other distribution expenses will not exceed 6%
of the purchase payment. In addition, trail commissions based on the size of the
contract fund may be paid.
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.
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. You will be notified of any 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. We may offer the contract with
unisex mortality rates to such prospective purchasers.
22
<PAGE>
OTHER GENERAL CONTRACT PROVISIONS
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 of New Jersey'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 the Prudential Annuity Service
Center.
BENEFICIARY. You designate the beneficiary in the application. Thereafter, you
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 two 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.
SETTLEMENT OPTIONS. The Contract grants you, or your beneficiary, a variety of
ways to receive 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.
SUICIDE EXCLUSION. Generally, if the insured, whether sane or insane, dies by
suicide within two years from the contract date, Pruco Life of New Jersey will
pay no more under the contract than the sum of the premiums paid.
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
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.
EXPERTS
The financial statements of Pruco Life of New Jersey as of December 31, 1998 and
1997 and for each of the three years in the period ended December 31, 1998 and
the financial statements of the Account as of December 31, 1998 and for each of
the three years in the period then ended included in this prospectus have been
so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting. PricewaterhouseCoopers LLP's principal business address
is 1177 Avenue of the Americas, New York, New York 10036.
23
<PAGE>
Actuarial matters included in this prospectus have been examined by Ikwhan Oh,
FSA, MAAA, Vice President and Company Actuary of Pruco Life of New Jersey whose
opinion is filed as an exhibit to the registration statement.
LITIGATION
Several actions have been brought against Pruco Life of New Jersey (the
"Company") alleging that the Company and its agents engaged in improper life
insurance sales practices. Prudential has agreed to indemnify the Company for
losses, if any, resulting from such litigation. No other significant litigation
is being brought against the Company that would have a material effect on its
financial position.
YEAR 2000 COMPLIANCE
The Year 2000 Issue
The services provided to you as a purchaser of Discovery Life Plus depend on the
smooth functioning of numerous computer systems. Many computer systems in use
today are programmed to recognize only the last two digits of a date as the
year. As a result, any systems using this kind of programming can not
distinguish a date using "00" and may treat it as "1900" instead of "2000." This
problem may impact computer systems that store business information, but it
could also affect other equipment used in our business like telephone, fax
machines and elevators. If this problem is not corrected, the "Year 2000" issue
could affect the accuracy and integrity of business records. Prudential's
regular business operations could be interrupted as well as those of other
companies that deal with us.
In addition, the operations of the mutual funds associated with Discovery Life
Plus could experience problems resulting from the Year 2000 issue. Please refer
to the respective mutual fund's prospectus for information regarding their
approach to Year 2000 concerns. The following describes Prudential's effort to
address Year 2000 concerns.
To address this potential problem Prudential, as the parent company of Pruco
Life of New Jersey, organized its Year 2000 efforts around the following three
areas:
BUSINESS SYSTEMS - Computer programs directly used to support our business;
INFRASTRUCTURE - Computers and other business equipment like telephones and fax
machines; and
BUSINESS PARTNERS - Year 2000 readiness of essential business partners.
BUSINESS SYSTEMS. The business systems component includes a wide range of
computer programs that directly support Prudential's business operations
including systems for: insurance product processing, securities trading,
personnel record keeping and general accounting systems. All business systems
were analyzed to determine whether each computer program with a Year 2000
problem should be retired, replaced or renovated. The majority of this work has
been completed. A few remaining programs are currently being tested and
completion of this process is expected by June, 1999.
INFRASTRUCTURE. As with business applications, we established a specific
methodology and process for addressing infrastructure issues. The infrastructure
effort includes mainframe computer system hardware and operating system
software, mid-range systems and servers, telecommunications equipment and
systems, buildings and facilities systems, personal computers, and vendor
hardware and software. Other than desktop systems, substantially all other
infrastructure systems have been thoroughly tested. Presently, a small number of
midrange computers, and building and facilities systems are in the testing
phase. We expect to have the infrastructure implementation process completed by
June, 1999.
24
<PAGE>
BUSINESS PARTNERS. Prudential recognizes the importance of determining the Year
2000 readiness of external business relationships especially those that involve
electronic data transfer products and services, and products that impact our
essential business processes. Prudential first classified each business partner
as "highly critical" or "less critical" to our business and then began to
develop risk assessment and contingency plans to address the potential that a
business partner could experience a Year 2000 failure. All highly critical
business partner relationships have been assessed and contingency and planning
is completed. Risk assessment and contingency planning continues for less
critical business partners, and the target completion date for these
relationships is June 1999.
Prudential believes that the Business Application, Infrastructure and Business
Partners components of the Year 2000 project are substantially on schedule. A
small number of the projects may not meet their targeted completion date.
However, Prudential expects that these projects will be completed by September,
1999. If there are any delays, they should not have a significant impact on the
timing of the project as a whole.
The Cost of Year 2000 Readiness
Prudential is funding the Year 2000 program from internal operating budgets, and
estimates that its total costs to address the Year 2000 issue will total
approximately $220 million. Because these expenses were part of the operating
budget, they did not impact the management of Discovery Life Plus. During the
course of the Year 2000 program, some optional computer projects have been
delayed, but these delays have not affected Discovery Life Plus.
Year 2000 Risks and Contingency Planning
Prudential believes that it is well positioned to lessen the impact of the Year
2000 problem. However, given the nature of this issue, we can not be 100%
certain that we are completely prepared, particularly because we cannot be
certain of Year 2000 readiness of third parties. As a result, we are unable to
determine at this time whether the consequences of Year 2000 failures may have a
material adverse effect on the results of Prudential's operations, liquidity or
financial condition. In the worst case, it is possible that a Year 2000
technology failure, whether internal or external, could have a material impact
on Prudential's results of operations, liquidity, or financial position. If
Prudential is unable to address the Year 2000 problem, we may have difficulty in
responding to your incoming phone calls, calculating your contract value or
processing withdrawals and purchase payments. It is also possible that the
mutual funds associated with Discovery Life Plus will be unable to value their
securities, in turn creating difficulties in purchasing or selling shares of the
respective mutual fund and calculating corresponding unit asset values. The
objective of Prudential's Year 2000 program has been to reduce these risks as
much as possible.
Most of the operations of Discovery Life Plus involve such a large number of
individual transactions that they can only be handled with the help of
computers. As a result, our current contingency plans include responses to the
failure of specific business programs or infrastructure components. However, our
contingency responses are now being reviewed and we expect to finalize them by
June, 1999 to ensure that they are workable under the special conditions of a
Year 2000 failure. Prudential believes that with the completion of its Year 2000
program as scheduled, the possibility of significant interruptions of normal
operations will be reduced.
ADDITIONAL INFORMATION
Pruco Life of New Jersey has filed a registration statement 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 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.
25
<PAGE>
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.
26
<PAGE>
DIRECTORS AND OFFICERS
The directors and major 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
JAMES J. AVERY, JR., CHAIRMAN AND DIRECTOR -- Senior Vice President, Chief
Actuary and CFO, Prudential Individual Insurance since 1997; 1995 to 1997:
President, Prudential Select; 1993 to 1995: Chief Operating Officer, Prudential
Select. Age 47.
WILLIAM M. BETHKE, DIRECTOR -- Chief Investment Officer since 1997; 1992 to
1997: President, Prudential Capital Markets Group. Age 52.
IRA J. KLEINMAN, DIRECTOR -- Executive Vice President, International Insurance
Group since 1997; 1995 to 1997: Chief Marketing and Product Development Officer,
Prudential Individual Insurance Group; 1993 to 1995: President, Prudential
Select. Age 52.
ESTHER H. MILNES, PRESIDENT AND DIRECTOR -- Vice President and Actuary,
Prudential Individual Insurance Group since 1996; 1993 to 1996: Senior Vice
President and Chief Actuary, Prudential Insurance and Financial Services. Age
48.
I. EDWARD PRICE, VICE CHAIRMAN AND DIRECTOR -- Senior Vice President and
Actuary, Prudential Individual Insurance Group since 1995; 1994 to 1995: Chief
Executive Officer, Prudential International Insurance. Age 56.
OFFICERS WHO ARE NOT DIRECTORS
C. EDWARD CHAPLIN, TREASURER -- Vice President and Treasurer of Prudential since
1995; 1993 to 1995: Managing Director and Assistant Treasurer of Prudential. Age
42.
JAMES C. DROZANOWSKI, SENIOR VICE PRESIDENT -- Vice President and Operations
Executive, Prudential Individual Insurance Group since 1996; 1995 to 1996: Vice
President, Credit Card Division, Chase Manhattan Bank. Age 56
CLIFFORD E. KIRSCH, SECRETARY AND CHIEF LEGAL OFFICER -- Chief Counsel, Variable
Products, Law Department of Prudential since 1995. Age 39.
FRANK P. MARINO, SENIOR VICE PRESIDENT -- Vice President, Policyowner Relations
Department, Prudential Individual Insurance Group since 1996; prior to 1996:
Senior Vice President, Prudential Mutual Fund Services. Age 54
EDWARD A. MINOGUE, SENIOR VICE PRESIDENT -- Vice President, Annuity Services,
Prudential Investments since 1997; prior to 1997: Director, Merrill Lynch. Age
56.
IMANTS SAKSONS, SENIOR VICE PRESIDENT -- Vice President, Compliance, Prudential
Individual Financial Services since 1998; prior to 1998, Vice President, Market
Conduct, U.S. Operations, Manulife Financial. Age 48.
SHIRLEY H. SHAO, SENIOR VICE PRESIDENT AND CHIEF ACTUARY -- Vice President and
Associate Actuary, Prudential. Age 44.
DENNIS G. SULLIVAN, VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER -- Vice
President and Deputy Controller, Prudential, since 1998. 1997 to 1998, Vice
President & Controller, ContiFinancial Corporation, prior to 1997, Director,
Salomon Brothers. Age 43.
The business address of all directors and officers of Pruco Life of New Jersey
(PLNJ) is 213 Washington Street, Newark, New Jersey 07102-2992. PLNJ directors
and officers are elected annually.
27
<PAGE>
ILLUSTRATIONS
-------------
DISCOVERY LIFE PLUS CONTRACT
MALE ISSUE AGE 35
$20,000 INITIAL PREMIUM PAYMENT
USING CURRENT SCHEDULE OF MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
DEATH BENEFIT
------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUM ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ------------------------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ --------------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
1 $ 20,800 $133,307 $133,307 $133,307 $ 133,307
2 $ 21,632 $133,307 $133,307 $133,307 $ 133,307
3 $ 22,497 $133,307 $133,307 $133,307 $ 133,307
4 $ 23,397 $133,307 $133,307 $133,307 $ 133,307
5 $ 24,333 $133,307 $133,307 $133,307 $ 133,307
6 $ 25,306 $133,307 $133,307 $133,307 $ 133,307
7 $ 26,319 $133,307 $133,307 $133,307 $ 133,307
8 $ 27,371 $133,307 $133,307 $133,307 $ 133,307
9 $ 28,466 $133,307 $133,307 $133,307 $ 133,307
10 $ 29,605 $133,307 $133,307 $133,307 $ 133,307
15 $ 36,019 $133,307 $133,307 $133,307 $ 150,028
20 $ 43,822 $133,307 $133,307 $133,307 $ 196,879
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 270,741
30 $ 64,868 $ 0 $133,307 $133,307 $ 385,391
35 $ 78,922 $ 0 $ 0(2) $155,351 $ 566,137
40 $ 96,020 $ 0 $ 0 $193,877 $ 849,885
45 $116,824 $ 0 $ 0 $248,201 $1,308,770
<CAPTION>
CASH SURRENDER VALUE
--------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
ANNUAL INVESTMENT RETURN OF
END OF --------------------------------------------------------------------
POLICY 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ -------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
1 $17,424 $18,134 $ 18,906 $ 19,686
2 $17,209 $18,639 $ 20,125 $ 21,752
3 $16,995 $19,155 $ 21,492 $ 24,018
4 $16,781 $19,684 $ 22,949 $ 26,604
5 $16,568 $20,226 $ 24,502 $ 29,473
6 $16,356 $20,779 $ 26,158 $ 32,649
7 $16,644 $22,006 $ 28,785 $ 37,281
8 $16,093 $22,373 $ 30,410 $ 40,868
9 $15,347 $22,746 $ 32,126 $ 44,799
10 $14,571 $23,126 $ 33,940 $ 49,109
15 $10,130 $25,120 $ 44,661 $ 77,734
20 $ 4,184 $26,679 $ 58,770 $ 123,049
25 $ 0(2) $22,345 $ 77,336 $ 194,777
30 $ 0 $12,618 $101,767 $ 308,312
35 $ 0 $ 0(2) $133,923 $ 488,048
40 $ 0 $ 0 $176,251 $ 772,622
45 $ 0 $ 0 $231,963 $1,223,149
</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.
T-1
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
MALE ISSUE AGE 35
$20,000 INITIAL PREMIUM PAYMENT
USING MAXIMUM CONTRACTUAL OF MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
DEATH BENEFIT
-------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUM ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED -------------------------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ --------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
1 $ 20,800 $133,307 $133,307 $133,307 $ 133,307
2 $ 21,632 $133,307 $133,307 $133,307 $ 133,307
3 $ 22,497 $133,307 $133,307 $133,307 $ 133,307
4 $ 23,397 $133,307 $133,307 $133,307 $ 133,307
5 $ 24,333 $133,307 $133,307 $133,307 $ 133,307
6 $ 25,306 $133,307 $133,307 $133,307 $ 133,307
7 $ 26,319 $133,307 $133,307 $133,307 $ 133,307
8 $ 27,371 $133,307 $133,307 $133,307 $ 133,307
9 $ 28,466 $133,307 $133,307 $133,307 $ 133,307
10 $ 29,605 $133,307 $133,307 $133,307 $ 133,307
15 $ 36,019 $133,307 $133,307 $133,307 $ 142,897
20 $ 43,822 $133,307 $133,307 $133,307 $ 187,517
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 257,798
30 $ 64,868 $ 0 $ 0(2) $133,307 $ 366,895
35 $ 78,922 $ 0 $ 0 $133,307 $ 538,805
40 $ 96,020 $ 0 $ 0 $133,307 $ 808,533
45 $116,824 $ 0 $ 0 $164,351 $1,243,578
<CAPTION>
CASH SURRENDER VALUE
------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
ANNUAL INVESTMENT RETURN OF
END OF ------------------------------------------------------------------
POLICY 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
1 $17,306 $18,016 $ 18,777 $ 19,556
2 $16,953 $18,384 $ 19,872 $ 21,480
3 $16,579 $18,742 $ 21,083 $ 23,610
4 $16,180 $19,087 $ 22,362 $ 26,033
5 $15,753 $19,415 $ 23,708 $ 28,711
6 $15,295 $19,721 $ 25,126 $ 31,671
7 $15,259 $20,621 $ 27,440 $ 36,025
8 $14,562 $20,668 $ 28,759 $ 39,354
9 $13,836 $20,680 $ 30,132 $ 43,007
10 $13,079 $20,653 $ 31,562 $ 47,020
15 $ 8,723 $19,800 $ 39,639 $ 74,040
20 $ 2,839 $17,065 $ 49,414 $ 117,198
25 $ 0(2) $10,852 $ 61,057 $ 185,466
30 $ 0 $ 0(2) $ 75,094 $ 293,516
35 $ 0 $ 0 $ 92,595 $ 464,486
40 $ 0 $ 0 $117,028 $ 735,029
45 $ 0 $ 0 $153,599 $1,162,222
</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.
T-2
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
FEMALE ISSUE AGE 55
$100,000 INITIAL PREMIUM PAYMENT
USING CURRENT SCHEDULE MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
DEATH BENEFIT
------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUM ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED ------------------------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ -------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
1 $104,000 $357,468 $357,468 $357,468 $ 357,468
2 $108,160 $357,468 $357,468 $357,468 $ 357,468
3 $112,486 $357,468 $357,468 $357,468 $ 357,468
4 $116,986 $357,468 $357,468 $357,468 $ 357,468
5 $121,665 $357,468 $357,468 $357,468 $ 357,468
6 $126,532 $357,468 $357,468 $357,468 $ 357,468
7 $131,593 $357,468 $357,468 $357,468 $ 357,468
8 $136,857 $357,468 $357,468 $357,468 $ 357,468
9 $142,331 $357,468 $357,468 $357,468 $ 357,468
10 $148,024 $357,468 $357,468 $357,468 $ 360,800
15 $180,094 $357,468 $357,468 $357,468 $ 511,626
20 $219,112 $ 0(2) $357,468 $357,468 $ 734,532
25 $266,584 $ 0 $357,468(2) $434,039 $1,093,142
<CAPTION>
CASH SURRENDER VALUE
---------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
ANNUAL INVESTMENT RETURN OF
END OF ---------------------------------------------------------------------
POLICY 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- ------ -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
1 $88,900 $ 92,668 $ 96,644 $100,620
2 $87,802 $ 95,095 $102,678 $111,166
3 $86,708 $ 97,732 $109,652 $122,726
4 $85,618 $100,430 $117,087 $135,734
5 $84,531 $103,192 $125,011 $150,375
6 $83,449 $106,017 $133,457 $166,576
7 $84,920 $112,277 $146,864 $190,210
8 $82,960 $114,150 $155,153 $208,508
9 $78,562 $116,054 $163,910 $228,567
10 $73,329 $117,989 $173,162 $250,555
15 $40,982 $128,164 $227,865 $396,609
20 $ 0(2) $139,215 $299,849 $627,804
25 $ 0 $151,219(2) $394,581 $993,765
</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 33 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.
T-3
<PAGE>
DISCOVERY LIFE PLUS CONTRACT
FEMALE ISSUE AGE 55
$100,000 INITIAL PREMIUM PAYMENT
USING MAXIMUM CONTRACTUAL MORTALITY CHARGES (1)
<TABLE>
<CAPTION>
DEATH BENEFIT
--------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
PREMIUM ANNUAL INVESTMENT RETURN OF
END OF ACCUMULATED --------------------------------------------------------------------
POLICY AT 4% INTEREST 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR PER YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- --------- -------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
1 $104,000 $357,468 $357,468 $357,468 $ 357,468
2 $108,160 $357,468 $357,468 $357,468 $ 357,468
3 $112,486 $357,468 $357,468 $357,468 $ 357,468
4 $116,986 $357,468 $357,468 $357,468 $ 357,468
5 $121,665 $357,468 $357,468 $357,468 $ 357,468
6 $126,532 $357,468 $357,468 $357,468 $ 357,468
7 $131,593 $357,468 $357,468 $357,468 $ 357,468
8 $136,857 $357,468 $357,468 $357,468 $ 357,468
9 $142,331 $357,468 $357,468 $357,468 $ 357,468
10 $148,024 $357,468 $357,468 $357,468 $ 357,468
15 $180,094 $357,468 $357,468 $357,468 $ 475,293
20 $219,112 $ 0(2) $357,468 $357,468 $ 682,125
25 $266,584 $ 0 $ 0(2) $357,468 $1,014,643
<CAPTION>
CASH SURRENDER VALUE
------------------------------------------------------------------
ASSUMING HYPOTHETICAL GROSS (AND NET)
ANNUAL INVESTMENT RETURN OF
END OF ------------------------------------------------------------------
POLICY 0% GROSS 4% GROSS 8% GROSS 12% GROSS
YEAR (-1.72% NET) (2.28% NET) (6.28% NET) (10.28% NET)
- --------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
1 $87,723 $ 91,371 $ 95,345 $ 99,318
2 $85,294 $ 92,581 $100,164 $108,438
3 $82,713 $ 93,727 $105,657 $118,539
4 $79,975 $ 94,771 $111,458 $130,189
5 $77,061 $ 95,692 $117,582 $143,133
6 $73,939 $ 96,458 $124,033 $157,517
7 $72,746 $100,024 $134,857 $178,873
8 $68,229 $ 99,307 $140,715 $195,187
9 $63,407 $ 98,264 $146,759 $213,201
10 $58,225 $ 96,842 $152,985 $233,135
15 $25,809 $ 82,758 $187,644 $368,444
20 $ $ 48,106 $229,442 $583,012
25 $ 0 $ 0(2) $280,678 $922,403
</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.
T-4
<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF NET ASSETS
December 31, 1998
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------
ZERO COUPON
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE BOND
MARKET BOND EQUITY MANAGED BALANCED 2000
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in The Prudential Series
Fund, Inc. Portfolios at net asset
value [Note 3] ............................... $ 2,203,117 $ 2,854,985 $ 8,386,545 $11,051,392 $15,394,297 $ 257,051
----------- ----------- ----------- ----------- ----------- -----------
Net Assets .................................... $ 2,203,117 $ 2,854,985 $ 8,386,545 $11,051,392 $15,394,297 $ 257,051
=========== =========== =========== =========== =========== ===========
NET ASSETS, representing:
Equity of contract owners ..................... $ 2,203,117 $ 2,854,985 $ 8,386,545 $11,051,392 $15,394,297 $ 257,051
----------- ----------- ----------- ----------- ----------- -----------
$ 2,203,117 $ 2,854,985 $ 8,386,545 $11,051,392 $15,394,297 $ 257,051
=========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------
HIGH ZERO COUPON SMALL
YIELD STOCK EQUITY NATURAL GOVERNMENT BOND PRUDENTIAL CAPITALIZATION
BOND INDEX INCOME RESOURCES GLOBAL INCOME 2005 JENNISON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$1,501,948 $1,529,564 $1,749,736 $224,740 $606,421 $301,270 $114,954 $1,144,097 $449,416
- ---------- ---------- ---------- -------- -------- -------- -------- ---------- --------
$1,501,948 $1,529,564 $1,749,736 $224,740 $606,421 $301,270 $114,954 $1,144,097 $449,416
========== ========== ========== ======== ======== ======== ======== ========== ========
$1,501,948 $1,529,564 $1,749,736 $224,740 $606,421 $301,270 $114,954 $1,144,097 $449,416
- ---------- ---------- ---------- -------- -------- -------- -------- ---------- --------
$1,501,948 $1,529,564 $1,749,736 $224,740 $606,421 $301,270 $114,954 $1,144,097 $449,416
========== ========== ========== ======== ======== ======== ======== ========== ========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A2
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1998, 1997 and 1996
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
--------------------------------------- ---------------------------------------
1998 1997 1996 1998 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ........................ $ 100,142 $ 103,652 $ 104,053 $ 173,873 $ 204,112 $ 194,018
--------- --------- --------- --------- --------- ---------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk and for
administration [Notes 5A and 5B] ...... 23,901 24,188 24,781 35,362 35,031 37,907
Reimbursement for excess expenses
[Note 5C] ............................. (295) (419) (846) (686) (692) (1,493)
--------- --------- --------- --------- --------- ---------
NET EXPENSES ............................ 23,606 23,769 23,935 34,676 34,339 36,414
--------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) ............ 76,536 79,883 80,118 139,197 169,773 157,604
--------- --------- --------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received .. 0 0 0 10,286 32,613 0
Realized gain (loss) on shares
redeemed ............................. 0 0 0 6,794 18,905 14,389
Net change in unrealized gain (loss)
on investments ....................... 0 0 0 2,474 (25,257) (73,579)
--------- --------- --------- --------- --------- ---------
NET GAIN (LOSS) ON INVESTMENTS .......... 0 0 0 19,554 26,261 (59,190)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ............................. $ 76,536 $ 79,883 $ 80,118 $ 158,751 $ 196,034 $ 98,414
========= ========= ========= ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO CONSERVATIVE BALANCED PORTFOLIO
- ----------------------------------------- ----------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 157,172 $ 185,377 $ 165,956 $ 365,349 $ 341,788 $ 328,708 $ 665,334 $ 749,419 $ 674,390
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
108,486 100,463 84,699 142,349 142,081 134,656 199,721 204,550 207,116
(7,589) (6,270) (7,465) (26,007) (25,842) (27,191) (27,698) (26,954) (33,255)
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
100,897 94,193 77,234 116,342 116,239 107,465 172,023 177,596 173,861
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
56,275 91,184 88,722 249,007 225,549 221,243 493,311 571,823 500,529
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
919,510 455,682 646,721 1,126,626 1,749,859 1,042,553 916,632 1,768,494 1,042,887
374,119 279,137 228,498 184,629 268,843 221,247 252,036 392,816 214,639
(689,234) 827,985 117,818 (586,039) (469,700) (203,564) (78,407) (849,547) 60,028
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
604,395 1,562,804 993,037 725,216 1,549,002 1,060,236 1,090,261 1,311,763 1,317,554
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 660,670 $ 1,653,988 $ 1,081,759 $ 974,223 $ 1,774,551 $ 1,281,479 $ 1,583,572 $ 1,883,586 $ 1,818,083
=========== =========== =========== =========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A4
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
<CAPTION>
STATEMENTS OF OPERATIONS
For the years ended December 31, 1998, 1997 and 1996
SUBACCOUNTS
--------------------------------------------------------------------------
ZERO COUPON BOND 2000 PORTFOLIO HIGH YIELD BOND PORTFOLIO
------------------------------------ -----------------------------------
1998 1997 1996 1998 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ....................... $ 12,451 $ 14,974 $ 13,240 $ 149,512 $ 155,751 $ 156,769
--------- --------- --------- --------- --------- ---------
EXPENSES
Charges to contract owners for assuming
mortality risk, expense risk and
for administration [Notes 5A and 5B] 3,248 3,611 3,899 19,892 20,547 20,360
Reimbursement for excess expenses
[Note 5C] ............................ (575) (782) (359) 0 0 0
--------- --------- --------- --------- --------- ---------
NET EXPENSES ........................... 2,673 2,829 3,540 19,892 20,547 20,360
--------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) ........... 9,778 12,145 9,700 129,620 135,204 136,409
--------- --------- --------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received . 3,419 11,873 0 0 0 0
Realized gain (loss) on shares
redeemed ............................ 1,760 1,044 1,347 (2,116) (3,832) (1,765)
Net change in unrealized gain (loss)
on investments ...................... 1,448 (7,788) (11,192) (179,573) 58,986 21,477
--------- --------- --------- --------- --------- ---------
NET GAIN (LOSS) ON INVESTMENTS ......... 6,627 5,129 (9,845) (181,689) 55,154 19,712
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ............................ $ 16,405 $ 17,274 $ (145) $ (52,069) $ 190,358 $ 156,121
========= ========= ========= ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A5
</TABLE>
<PAGE>
<TABLE>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------
STOCK INDEX PORTFOLIO EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
- -------------------------------------- -------------------------------------- -------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- ---------- ---------- ---------- ----------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 19,071 $ 20,822 $ 16,189 $ 48,033 $ 37,284 $ 37,911 $ 2,309 $ 2,490 $ 2,761
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
20,786 16,818 10,731 22,975 17,755 13,869 3,579 6,172 4,796
0 0 0 0 0 0 0 0 0
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
20,786 16,818 10,731 22,975 17,755 13,869 3,579 6,172 4,796
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
(1,715) 4,004 5,458 25,058 19,529 24,042 (1,270) (3,682) (2,035)
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
24,345 44,424 11,410 105,282 152,241 37,439 15,649 47,548 55,713
207,426 106,189 45,690 29,851 39,726 33,765 (21,360) 21,682 10,746
62,489 194,261 101,882 (251,690) 206,374 106,009 (44,360) (130,229) 25,357
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
294,260 344,874 158,982 (116,557) 398,341 177,213 (50,071) (60,999) 91,816
- --------- --------- --------- ---------- --------- ----------- ---------- ---------- ---------
$ 292,545 $ 348,878 $ 164,440 $ (91,499) $ 417,870 $ 201,255 $ (51,341) $ (64,681) $ 89,781
========= ========= ========= =========== ========== =========== ========== ========== =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A6
</TABLE>
<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1998, 1997 and 1996
<CAPTION>
SUBACCOUNTS
-------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
---------------------------------- -----------------------------------
1998 1997 1996 1998 1997 1996
-------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income .................................. $ 7,953 $ 8,942 $ 20,675 $ 12,527 $ 10,477 $ 10,891
-------- -------- -------- -------- -------- --------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk and
for administration [Notes 5A and 5B] ........... 7,528 9,961 9,410 2,468 1,972 2,110
Reimbursement for excess expenses
[Note 5C] ....................................... 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
NET EXPENSES ...................................... 7,528 9,961 9,410 2,468 1,972 2,110
-------- -------- -------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) ...................... 425 (1,019) 11,265 10,059 8,505 8,781
-------- -------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received ............ 25,262 29,175 13,311 0 0 0
Realized gain (loss) on shares
redeemed ....................................... 42,895 85,779 16,057 1,486 (655) 144
Net change in unrealized gain (loss)
on investments ................................. 56,781 (47,732) 86,388 796 4,796 (7,299)
-------- -------- -------- -------- -------- --------
NET GAIN (LOSS) ON INVESTMENTS .................... 124,938 67,222 115,756 2,282 4,141 (7,155)
-------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ....................................... $125,363 $ 66,203 $127,021 $ 12,341 $ 12,646 $ 1,626
======== ======== ======== ======== ======== ========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO SMALL CAPITALIZATION STOCK PORTFOLIO
- --------------------------------------- --------------------------------------- ------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- --------- --------- --------- ---------- ---------- ---------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 5,630 $ 4,811 $ 5,731 $ 1,670 $ 849 $ 524 $ 2,789 $ 2,627 $ 1,069
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
1,336 1,078 1,326 9,532 4,880 2,798 6,141 5,002 1,661
(231) (287) (137) 0 0 0 0 0 0
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
1,105 791 1,189 9,532 4,880 2,798 6,141 5,002 1,661
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
4,525 4,020 4,542 (7,862) (4,031) (2,274) (3,352) (2,375) (592)
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
116 1,907 1,247 16,483 30,119 0 29,229 31,445 2,969
6,039 1,286 1,156 15,972 15,281 19,426 11,182 41,012 8,078
100 661 (8,307) 212,008 41,164 6,197 (30,068) 13,028 8,362
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
6,255 3,854 (5,904) 244,463 86,564 25,623 10,343 85,485 19,409
- --------- --------- --------- ---------- ---------- --------- ---------- ---------- ---------
$ 10,780 $ 7,874 $ (1,362) $ 236,601 $ 82,533 $ 23,349 $ 6,991 $ 83,110 $ 18,817
========= ========= ========== ========== ========== ========= ========== ========== =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A8
</TABLE>
<PAGE>
<TABLE>
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, 1998, 1997 and 1996
SUBACCOUNTS
--------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
----------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ............ $ 76,536 $ 79,883 $ 80,118 $ 139,197 $ 169,773 $ 157,604
Capital gains distributions received .... 0 0 0 10,286 32,613 0
Realized gain (loss) on shares
redeemed ............................... 0 0 0 6,794 18,905 14,389
Net change in unrealized gain (loss) on
investments ............................ 0 0 0 2,474 (25,257) (73,579)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS .............................. 76,536 79,883 80,118 158,751 196,034 98,414
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
PREMIUM PAYMENTS
AND OTHER OPERATING
TRANSFERS [Note 7] ...................... 215,962 (137,071) (671,181) (90,706) (429,478) (222,850)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RETAINED IN THE ACCOUNT
[Note 8] ................................ (15,201) (62,160) 73,753 (1,221) (3,183) (2,737)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS .................................. 277,297 (119,348) (517,310) 66,824 (236,627) (127,173)
NET ASSETS
Beginning of year ....................... 1,925,820 2,045,168 2,562,478 2,788,161 3,024,788 3,151,961
----------- ----------- ----------- ----------- ----------- -----------
End of year ............................. $ 2,203,117 $ 1,925,820 $ 2,045,168 $ 2,854,985 $ 2,788,161 $ 3,024,788
=========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
----------------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO CONSERVATIVE BALANCED PORTFOLIO
------------------------------------------ ----------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 56,275 $ 91,184 $ 88,722 $ 249,007 $ 225,549 $ 221,243 $ 493,311 $ 571,823 $ 500,529
919,510 455,682 646,721 1,126,626 1,749,859 1,042,553 916,632 1,768,494 1,042,887
374,119 279,137 228,498 184,629 268,843 221,247 252,036 392,816 214,639
(689,234) 827,985 117,818 (586,039) (469,700) (203,564) (78,407) (849,547) 60,028
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
660,670 1,653,988 1,081,759 974,223 1,774,551 1,281,479 1,583,572 1,883,586 1,818,083
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
(715,976) (464,113) (379,318) (1,601,731) (1,068,047) (1,020,555) (2,585,555) (2,247,606) (1,492,000)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
2,783 12,326 (45,449) (300) (71,159) 30,020 2,706 (284,171) 262,861
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
(52,523) 1,202,201 656,992 (627,808) 635,345 290,944 (999,277) (648,191) 588,944
8,439,068 7,236,867 6,579,875 11,679,200 11,043,855 10,752,911 16,393,574 17,041,765 16,452,821
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -----------
$ 8,386,545 $ 8,439,068 $ 7,236,867 $ 11,051,392 $ 11,679,200 $ 11,043,855 $ 15,394,297 $ 16,393,574 $17,041,765
============ ============ ============ ============ ============ ============ ============ ============ ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A10
</TABLE>
<PAGE>
<TABLE>
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, 1998, 1997 and 1996
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------------------------------------
ZERO COUPON BOND 2000 PORTFOLIO HIGH YIELD BOND PORTFOLIO
----------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ............ $ 9,778 $ 12,145 $ 9,700 $ 129,620 $ 135,204 $ 136,409
Capital gains distributions received .... 3,419 11,873 0 0 0 0
Realized gain (loss) on shares
redeemed ............................... 1,760 1,044 1,347 (2,116) (3,832) (1,765)
Net change in unrealized gain (loss) on
investments ............................ 1,448 (7,788) (11,192) (179,573) 58,986 21,477
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS .............................. 16,405 17,274 (145) (52,069) 190,358 156,121
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM PREMIUM
PAYMENTS AND OTHER OPERATING
TRANSFERS [Note 7] ...................... (49,141) (25,625) (44,303) (174,662) (111,622) (70,031)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RETAINED IN THE
ACCOUNT [Note 8] ........................ (2,242) 454 (2,158) (2,768) 169 1,391
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS .............................. (34,978) (7,897) (46,606) (229,499) 78,905 87,481
NET ASSETS
Beginning of year ....................... 292,029 299,926 346,532 1,731,447 1,652,542 1,565,061
----------- ----------- ----------- ----------- ----------- -----------
End of year ............................. $ 257,051 $ 292,029 $ 299,926 $ 1,501,948 $ 1,731,447 $ 1,652,542
=========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------
STOCK INDEX PORTFOLIO EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
- ------------------------------------- ------------------------------------- -----------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (1,715) $ 4,004 $ 5,458 $ 25,058 $ 19,529 $ 24,042 $ (1,270) $ (3,682) $ (2,035)
24,345 44,424 11,410 105,282 152,241 37,439 15,649 47,548 55,713
207,426 106,189 45,690 29,851 39,726 33,765 (21,360) 21,682 10,746
62,489 194,261 101,882 (251,690) 206,374 106,009 (44,360) (130,229) 25,357
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
292,545 348,878 164,440 (91,499) 417,870 201,255 (51,341) (64,681) 89,781
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
(346,361) 147,339 173,470 155,719 72,388 (102,250) (78,122) (169,755) 243,946
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
7,664 24,629 (20,762) 1,750 12,335 (29,880) (3,450) 2,927 (53,149)
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
(46,152) 520,846 317,148 65,970 502,593 69,125 (132,913) (231,509) 280,578
1,575,716 1,054,870 737,722 1,683,766 1,181,173 1,112,048 357,653 589,162 308,584
- ---------- ---------- ---------- ---------- ---------- ---------- --------- --------- ---------
$1,529,564 $1,575,716 $1,054,870 $1,749,736 $1,683,766 $1,181,173 $ 224,740 $ 357,653 $ 589,162
========== ========== ========== ========== ========== ========== ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A12
</TABLE>
<PAGE>
<TABLE>
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, 1998, 1997 and 1996
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
------------------------------------- -------------------------------------
1998 1997 1996 1998 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) ................... $ 425 $ (1,019) $ 11,265 $ 10,059 $ 8,505 $ 8,781
Capital gains distributions received ........... 25,262 29,175 13,311 0 0 0
Realized gain (loss) on shares
redeemed ...................................... 42,895 85,779 16,057 1,486 (655) 144
Net change in unrealized gain (loss) on
investments ................................... 56,781 (47,732) 86,388 796 4,796 (7,299)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...................... 125,363 66,203 127,021 12,341 12,646 1,626
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
[Note 7] ....................................... (124,692) (293,076) 62,567 90,960 20,720 (16,098)
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RETAINED IN THE ACCOUNT
[Note 8] ....................................... 883 (13,963) 14,160 (1,854) (3,748) 1,190
--------- --------- --------- --------- --------- ---------
TOTAL INCREASE (DECREASE) IN NET
ASSETS ......................................... 1,554 (240,836) 203,748 101,447 29,618 (13,282)
NET ASSETS
Beginning of year .............................. 604,867 845,703 641,955 199,823 170,205 183,487
--------- --------- --------- --------- --------- ---------
End of year .................................... $ 606,421 $ 604,867 $ 845,703 $ 301,270 $ 199,823 $ 170,205
========= ========= ========= ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO SMALL CAPITALIZATION STOCK PORTFOLIO
- ----------------------------------------- ----------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,525 $ 4,020 $ 4,542 $ (7,862) $ (4,031) $ (2,274) $ (3,352) $ (2,375) $ (592)
116 1,907 1,247 16,483 30,119 0 29,229 31,445 2,969
6,039 1,286 1,156 15,972 15,281 19,426 11,182 41,012 8,078
100 661 (8,307) 212,008 41,164 6,197 (30,068) 13,028 8,362
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
10,780 7,874 (1,362) 236,601 82,533 23,349 6,991 83,110 18,817
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
12,784 (10,956) (11,155) 367,685 208,124 (8,785) (34,901) 189,313 76,342
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(114) (20,950) 16,343 6,868 (15,249) 2,584 8,443 6,997 (19,680)
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
23,450 (24,032) 3,826 611,154 275,408 17,148 (19,467) 279,420 75,479
91,504 115,536 111,710 532,943 257,535 240,387 468,883 189,463 113,984
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 114,954 $ 91,504 $ 115,536 $ 1,144,097 $ 532,943 $ 257,535 $ 449,416 $ 468,883 $ 189,463
=========== =========== =========== =========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A21
A14
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
DECEMBER 31, 1998
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
("Prudential"). The assets of the Account are segregated from Pruco Life
of New Jersey's other assets. Proceeds from sales of the Pruco Life of
New Jersey Discovery Life Plus product are invested in the Account as
directed by the contract owners.
The Account is registered under the Investment Company Act of 1940, as
amended, as a unit investment trust. There are fifteen 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 Prudential.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are prepared in conformity with
generally accepted accounting principles ("GAAP"). The preparation of
the financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts and
disclosures. Actual results could differ from those estimates.
Investments--The investments in shares of the Series Fund are stated at
the net asset value of the respective portfolio.
Security Transactions--Realized gains and losses on security
transactions are reported on an average cost basis. Purchase and sale
transactions are recorded as of the trade date of the security being
purchased or sold.
Distributions Received--Dividend and capital gain distributions received
are reinvested in additional shares of the Series Fund and are recorded
on the ex-dividend date.
A15
<PAGE>
NOTE 3: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS
The net asset value per share (rounded) for each portfolio of the Series
Fund, the number of shares of each portfolio held by the subaccounts and
the aggregate cost of investments in such shares at December 31, 1998
were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
-------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares: 220,312 258,109 282,977 667,324 1,020,804
Net asset value per share (rounded): $ 10.00 $ 11.06 $ 29.64 $ 16.56 $ 15.08
Cost: $ 2,203,117 $ 2,784,683 $ 6,568,559 $10,700,671 $14,421,906
PORTFOLIOS (CONTINUED)
-------------------------------------------------------------------------------
ZERO
COUPON HIGH YIELD STOCK EQUITY NATURAL
BOND 2000 BOND INDEX INCOME RESOURCES
----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares: 20,182 208,375 40,529 87,345 18,754
Net asset value per share (rounded): $ 12.74 $ 7.21 $ 37.74 $ 20.03 $ 11.98
Cost: $ 251,083 $1,689,948 $ 999,892 $1,623,598 $ 333,584
PORTFOLIOS (CONTINUED)
-------------------------------------------------------------------------------
ZERO SMALL
GOVERNMENT COUPON PRUDENTIAL CAPITALIZATION
GLOBAL INCOME BOND 2005 JENNISON STOCK
----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Number of shares: 28,663 25,380 8,553 47,856 30,550
Net asset value per share (rounded): $ 21.16 $ 11.87 $ 13.44 $ 23.91 $ 14.71
Cost: $501,301 $299,566 $108,521 $876,262 $453,449
NOTE 4: CONTRACT OWNER UNIT INFORMATION
Outstanding contract owner units, unit values and total value of
contract owner equity at December 31, 1998 were as follows:
SUBACCOUNTS
-----------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Contract Owner Units Outstanding ............. 1,215,714 1,106,335 1,501,800 2,843,402 4,709,046
Unit Value ................................... $ 1.81220 $ 2.58058 $ 5.58433 $ 3.88668 $ 3.26909
----------- ----------- ----------- ----------- -----------
TOTAL CONTRACT OWNER EQUITY .................. $ 2,203,117 $ 2,854,985 $ 8,386,545 $11,051,392 $15,394,297
=========== =========== =========== =========== ===========
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
ZERO
COUPON HIGH YIELD STOCK EQUITY NATURAL
BOND 2000 BOND INDEX INCOME RESOURCES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Contract Owner Units Outstanding ................ 89,649 678,721 317,730 445,913 111,222
Unit Value ...................................... $ 2.86731 $ 2.21291 $ 4.81403 $ 3.92394 $ 2.02065
---------- ---------- ---------- ---------- ----------
TOTAL CONTRACT OWNER EQUITY ..................... $ 257,051 $1,501,948 $1,529,564 $1,749,736 $ 224,740
========== ========== ========== ========== ==========
SUBACCOUNTS (CONTINUED)
------------------------------------------------------------------------------
ZERO SMALL
GOVERNMENT COUPON PRUDENTIAL CAPITALIZATION
GLOBAL INCOME BOND 2005 JENNISON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Contract Owner Units Outstanding ................ 355,856 149,314 46,169 460,648 263,678
Unit Value ...................................... $ 1.70412 $ 2.01769 $ 2.48986 $ 2.48367 $ 1.70441
---------- ---------- ---------- ---------- ----------
TOTAL CONTRACT OWNER EQUITY ..................... $ 606,421 $ 301,270 $ 114,954 $1,144,097 $ 449,416
========== ========== ========== ========== ==========
A16
</TABLE>
<PAGE>
NOTE 5: 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. Mortality risk is
that contract owners may not live as long as estimated and expense
risk is that the cost of issuing and administering the policies may
exceed related charges by Pruco Life of New Jersey.
B. Administration Charges
The administration charges at an effective annual rate of 0.35% are
applied daily against the net assets representing equity of contract
owners held in each subaccount. Administrative charges include costs
associated with issuing the contract, establishing and maintaining
records, and providing reports to contract owners.
C. Expense Reimbursement
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, Diversified Bond, Equity, Flexible Managed, Conservative
Balanced, and 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.
D. Deferred Sales Charge
Subsequent to a contract owner redemption, a deferred sales charge is
imposed upon 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 year of the contract. No sales charge
will be imposed on death benefits.
NOTE 6: TAXES
Pruco Life of New Jersey is taxed as a "life insurance company" as
defined by the Internal Revenue Code and the results of operations of the
Account form a part of Prudential's consolidated federal tax return.
Under current federal law, no federal income taxes are payable by the
Account. As such, no provision for tax liability has been recorded in
these financial statements.
A17
<PAGE>
NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
The following amounts represent components of contract owner activity
for the years ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
SUBACCOUNTS
--------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
------------------------- --------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ............................................ $ (373) $ 995 $ 172 $ 1,169
Policy Loans ........................................................... (123,141) (18,827) (54,587) (47,894)
Policy Loan Repayments and Interest .................................... 223,228 25,325 36,259 73,309
Surrenders, Withdrawals and Death Benefits ............................. (173,939) (216,097) (47,734) (409,153)
Net Transfers From (To) Other Subaccounts or Fixed Rate Options ........ 303,906 85,301 (4,825) (27,321)
Administrative and Other Charges ....................................... (13,719) (13,768) (19,991) (19,588)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ................... $ 215,962 $(137,071) $ (90,706) $(429,478)
========= ========= ========= =========
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO
-------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ............................................ $ 410 $ 5,305 $ 1,411 $ 31,012
Policy Loans ........................................................... (227,319) (202,847) (502,871) (228,588)
Policy Loan Repayments and Interest .................................... 297,092 233,014 196,000 273,750
Surrenders, Withdrawals and Death Benefits ............................. (540,500) (552,988) (1,073,945) (676,443)
Net Transfers From (To) Other Subaccounts or Fixed Rate Options ........ (185,356) 110,155 (143,900) (389,999)
Administrative and Other Charges ....................................... (60,303) (56,752) (78,426) (77,779)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ................... $ (715,976) $ (464,113) $(1,601,731) $(1,068,047)
=========== =========== =========== ===========
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------
CONSERVATIVE ZERO COUPON
BALANCED PORTFOLIO BOND 2000 PORTFOLIO
--------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ............................................ $ (4,775) $ 25,755 $ 14 $ --
Policy Loans ........................................................... (659,041) (532,693) (42,376) (2,489)
Policy Loan Repayments and Interest .................................... 612,810 430,142 6,096 2,826
Surrenders, Withdrawals and Death Benefits ............................. (1,811,489) (1,891,937) 11 (23,967)
Net Transfers From (To) Other Subaccounts or Fixed Rate Options ........ (607,265) (161,017) (10,788) 67
Administrative and Other Charges ....................................... (115,795) (117,856) (2,098) (2,062)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers .................. $(2,585,555) $(2,247,606) $ (49,141) $ (25,625)
=========== =========== =========== ===========
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------
HIGH YIELD BOND PORTFOLIO STOCK INDEX PORTFOLIO
--------------------------- -------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ............................................ $ (30) $ 15,835 $ 21,155 $ 62,355
Policy Loans ........................................................... (50,514) (55,694) (52,324) (24,090)
Policy Loan Repayments and Interest .................................... 37,163 22,039 57,906 11,027
Surrenders, Withdrawals and Death Benefits ............................. (155,708) (145,247) (584,056) (141,482)
Net Transfers From (To) Other Subaccounts or Fixed Rate Options ........ 6,557 63,760 222,308 248,431
Administrative and Other Charges ....................................... (12,130) (12,315) (11,350) (8,902)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ................... $(174,662) $(111,622) $(346,361) $ 147,339
========= ========= ========= =========
A18
</TABLE>
<PAGE>
NOTE 7: NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS (CONTINUED)
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------
EQUITY INCOME NATURAL RESOURCES
PORTFOLIO PORTFOLIO
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ..................................... $ (2,822) $ 119 $ (18,020) $ 111
Policy Loans .................................................... (101,914) (35,247) (18,301) (6,301)
Policy Loan Repayments and Interest ............................. 16,558 17,209 3,587 12,054
Surrenders, Withdrawals and Death Benefits ...................... (8,731) (31,496) (40,161) (99,530)
Net Transfers From (To) Other Subaccounts or
Fixed Rate Options ............................................. 265,351 131,368 (3,170) (72,752)
Administrative and Other Charges ................................ (12,723) (9,565) (2,057) (3,337)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ............ $ 155,719 $ 72,388 $ (78,122) $(169,755)
========= ========= ========= =========
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------
GOVERNMENT
GLOBAL PORTFOLIO INCOME PORTFOLIO
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ..................................... $ (6,226) $ 7,919 $ 206 $ --
Policy Loans .................................................... (64,791) (9,778) (602) (585)
Policy Loan Repayments and Interest ............................. 71,568 7,391 565 570
Surrenders, Withdrawals and Death Benefits ...................... (100,413) (24) 38 (13)
Net Transfers From (To) Other Subaccounts or
Fixed Rate Options ............................................. (20,157) (292,955) 92,00 121,766
Administrative and Other Charges ................................ (4,673) (5,629) (1,248) (1,018)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ............ $(124,692) $(293,076) $ 90,960 $ 20,720
========= ========= ========= =========
<CAPTION>
SUBACCOUNTS (CONTINUED)
------------------------------------------------
ZERO COUPON PRUDENTIAL JENNISON
BOND 2005 PORTFOLIO PORTFOLIO
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Contract Owner Net Payments ..................................... $ 18,792 $ -- $ 29,453 $ 3,729
Policy Loans .................................................... -- -- (17,836) (2,193)
Policy Loan Repayments and Interest ............................. 5,431 5,102 2,531 3,690
Surrenders, Withdrawals and Death Benefits ...................... -- (12,957) (9) (32,958)
Net Transfers From (To) Other Subaccounts or
Fixed Rate Options ............................................. (10,062) (2,024) 358,643 238,344
Administrative and Other Charges ................................ (1,377) (1,077) (5,097) (2,488)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ............ $ 12,784 $ (10,956) $ 367,685 $ 208,124
========= ========= ========= =========
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------
SMALL CAPITALIZATION
STOCK PORTFOLIO
---------------------
1998 1997
-------- --------
<S> <C> <C>
Contract Owner Net Payments ...................................... $ 8,504 $ 3,727
Policy Loans ..................................................... (20,258) (7,801)
Policy Loan Repayments and Interest .............................. 3,125 11,951
Surrenders, Withdrawals and Death Benefits ....................... (5,357) (152,820)
Net Transfers From (To) Other Subaccounts or
Fixed Rate Options .............................................. (17,590) 336,751
Administrative and Other Charges ................................. (3,325) (2,495)
-------- --------
Net Increase (Decrease) in Net Assets Resulting
From Premium Payments and Other Operating Transfers ............. $(34,901) $189,313
======== ========
</TABLE>
NOTE 8: NET INCREASE (DECREASE) IN NET ASSETS RETAINED IN THE ACCOUNT
The increase (decrease) in net assets retained in the account represents
the net contributions (withdrawals) of Pruco Life of New Jersey to
(from) the Account. Effective October 13, 1998 Pruco Life of New Jersey
no longer maintains a position in the account. Previously, Pruco Life of
New Jersey maintained a position in the Account for liquidity purposes
including unit purchases and redemptions, fund share transactions and
expense processing.
A19
<PAGE>
NOTE 9: UNIT ACTIVITY
Transactions in units (including transfers among subaccounts) for the
years ended December 31, 1998, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
---------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
----------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
-------- ---------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 981,797 924,445 770,463 44,078 37,991 44,945
Contract Owner
Redemptions: (863,669) (1,004,731) (1,186,529) (80,896) (222,446) (144,479)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO
----------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 104,232 121,424 193,181 148,881 143,246 195,495
Contract Owner
Redemptions: (235,745) (215,745) (294,417) (584,099) (464,817) (548,497)
<CAPTION>
SUBACCOUNTS (CONTINUED)
-----------------------------------------------------------------------------------------------
CONSERVATIVE BALANCED PORTFOLIO ZERO COUPON BOND 2000 PORTFOLIO
------------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
---------- ---------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 249,847 204,624 275,196 2,174 1,120 1,387
Contract Owner
Redemptions: (1,083,702) (1,017,306) (869,449) (20,257) (11,054) (19,752)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------------
HIGH YIELD BOND PORTFOLIO STOCK INDEX PORTFOLIO
----------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 79,042 51,563 73,460 119,428 159,486 175,960
Contract Owner
Redemptions: (153,795) (106,259) (107,775) (216,834) (116,894) (112,059)
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
---------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 84,855 85,762 84,060 5,480 63,146 114,750
Contract Owner
Redemptions: (52,628) (67,566) (123,886) (38,814) (127,876) (23,154)
<CAPTION>
SUBACCOUNTS (CONTINUED)
---------------------------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
----------------------------------------- -----------------------------------------
1998 1997 1996 1998 1997 1996
-------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 144,103 161,641 225,664 127,332 24,482 2,765
Contract Owner
Redemptions: (224,970) (358,283) (173,474) (83,748) (14,055) (12,257)
</TABLE>
A20
<PAGE>
NOTE 9: UNIT ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
--------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNSION PORTFOLIO
---------------------------------------- ------------------------------------------
1998 1997 1996 1998 1997 1996
------- ------ ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 40,169 2,518 9,007 291,195 229,343 191,490
Contract Owner
Redemptions: (34,868) (8,108) (13,950) (121,877) (109,539) (205,417)
------- ------ ------- -------- -------- --------
<CAPTION>
SUBACCOUNTS (CONTINUED)
-----------------------------------------
SMALL CAPITALIZATION STOCK PORTFOLIO
-----------------------------------------
1998 1997 1996
-------- -------- -------
<S> <C> <C> <C>
Contract Owner
Contributions: 258,613 395,533 136,383
Contract Owner
Redemptions: (264,541) (266,381) (81,879)
</TABLE>
NOTE 10: PURCHASES AND SALES OF INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments
in the Series Fund for the year ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
PORTFOLIOS
-----------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Purchases $ 1,590,815 $ 78,230 $ 395,594 $ 366,972 $ 80,570
Sales $(1,413,660) $(204,834) $ (1,189,665) $(2,081,789) $(2,820,815)
----------- --------- ------------ ----------- -----------
<CAPTION>
PORTFOLIOS (CONTINUED)
-----------------------------------------------------------------------------------------
ZERO COUPON
BOND HIGH YIELD STOCK EQUITY NATURAL
2000 BOND INDEX INCOME RESOURCES
----------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Purchases $ 2,370 $ 136,880 $ 484,416 $ 332,779 $ 20,714
Sales $ (56,425) $(334,203) $ (819,749) $ (197,318) $ (105,865)
<CAPTION>
PORTFOLIOS (CONTINUED)
------------------------------------------------------------------------------------------
ZERO COUPON SMALL
GOVERNMENT BOND PRUDENTIAL CAPITALIZATION
GLOBAL INCOME 2005 JENNISON STOCK
----------- ----------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
Purchases $ 202,507 $ 221,822 $ 97,775 $ 587,324 $ 433,796
Sales $ (333,845) $(135,184) $ (84,907) $ (221,307) $ (458,085)
</TABLE>
A21
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of the
Pruco Life of New Jersey Single Premium Variable Life Account
and the Board of Directors of
Pruco Life Insurance Company of New Jersey
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets present fairly, in all
material respects, the financial position of the subaccounts (Money Market
Portfolio, Diversified Bond Portfolio, Equity Portfolio, Flexible Managed
Portfolio, Conservative Balanced Portfolio, Zero Coupon Bond 2000 Portfolio,
High Yield Bond Portfolio, Stock Index Portfolio, Equity Income Portfolio,
Natural Resources Portfolio, Global Portfolio, Government Income Portfolio, Zero
Coupon Bond 2005 Portfolio, Prudential Jennison Portfolio and Small
Capitalization Stock Portfolio) of the Pruco Life of New Jersey Single Premium
Variable Life Account at December 31, 1998, the results of each of their
operations and the changes in each of their net assets for each of the three
years in the period then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of Pruco Life
Insurance Company of New Jersey's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of fund shares owned at December 31, 1998,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
March 19, 1999
<PAGE>
<TABLE>
Pruco Life Insurance Company of New Jersey
Statements of Financial Position
December 31, 1998 and 1997 (In Thousands)
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Fixed maturities
Available for sale, at fair value (amortized cost, 1998: $617,758; and
1997: $585,109) $ 622,990 $ 592,361
Policy loans 139,443 127,306
Short-term investments 53,761 52,464
---------- ----------
Total investments 816,194 772,131
Cash 45 3
Deferred policy acquisition costs 113,923 101,625
Accrued investment income 12,209 14,075
Other assets 15,379 4,037
Separate Account assets 1,453,407 1,110,561
---------- ----------
TOTAL ASSETS $2,411,157 $2,002,432
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Policyholders' account balances $ 413,848 $ 402,601
Future policy benefits and other policyholder liabilities 90,530 85,220
Cash collateral for loaned securities 34,424 33,663
Securities sold under agreements to repurchase 27,210 --
Income taxes payable 1,610 12,963
Net deferred income tax liability 23,715 22,188
Payable to affiliate 3,492 4,307
Other liabilities 19,489 17,103
Separate Account liabilities 1,450,986 1,108,994
---------- ----------
Total liabilities 2,065,304 1,687,039
Contingencies - (See Note 10) ---------- ----------
Stockholder's Equity
Common stock, $5 par value;
400,000 shares, authorized;
issued and outstanding at
December 31, 1998 and 1997 2,000 2,000
Paid-in-capital 125,000 125,000
Retained earnings 217,260 185,437
Accumulated other comprehensive income 1,593 2,956
---------- ----------
Total stockholder's equity 345,853 315,393
---------- ----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $2,411,157 $2,002,432
========== ==========
</TABLE>
See Notes to Financial Statements
B-1
<PAGE>
<TABLE>
Pruco Life Insurance Company of New Jersey
Statements of Operations
Years Ended December 31, 1998, 1997, and 1996 (In Thousands)
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
REVENUES
Premiums $ 1,345 $ 1,105 $ 1,345
Policy charges and fee income 56,247 56,382 58,571
Net investment income 47,032 46,324 43,784
Realized investment gains, net 8,446 1,707 1,221
Other income 5,755 5,286 4,047
--------- --------- ---------
Total revenues 118,825 110,804 108,968
--------- --------- ---------
BENEFITS AND EXPENSES
Policyholders' benefits 28,342 33,999 28,653
Interest credited to policyholders' account balances 18,985 19,372 20,069
General, administrative and other expenses 22,105 27,236 12,848
--------- --------- ---------
Total benefits and expenses 69,432 80,607 61,570
--------- --------- ---------
Income from operations before income taxes 49,393 30,197 47,398
--------- --------- ---------
Income taxes
Current 15,309 13,279 12,682
Deferred 2,261 (2,305) 2,929
--------- --------- ---------
Total income taxes 17,570 10,974 15,611
--------- --------- ---------
NET INCOME $ 31,823 $ 19,223 $ 31,787
========= ========= =========
Net unrealized investment gains (losses) on securities,
net of reclassification adjustment (1,363) 924 (4,556)
--------- --------- ---------
TOTAL COMPREHENSIVE INCOME $ 30,460 $ 20,147 $ 27,231
========= ========= =========
</TABLE>
See Notes to Financial Statements
B-2
<PAGE>
<TABLE>
Pruco Life Insurance Company of New Jersey
Statements of Changes in Stockholder's Equity
Years Ended December 31, 1998, 1997, and 1996 (In Thousands)
- --------------------------------------------------------------------------------
<CAPTION>
Accumulated
other Total
Common Paid-in- Retained comprehensive stockholder's
stock capital earnings income equity
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1996 $ 2,000 $ 125,000 $ 134,427 $ 6,588 $ 268,015
Net income -- -- 31,787 -- 31,787
Change in net unrealized
investment gains, net of
reclassification adjustment -- -- -- (4,556) (4,556)
--------- --------- --------- --------- ---------
Balance, December 31, 1996 2,000 125,000 166,214 2,032 295,246
Net income -- -- 19,223 -- 19,223
Change in net unrealized
investment gains, net of
reclassification adjustment -- -- -- 924 924
--------- --------- --------- --------- ---------
Balance, December 31, 1997 2,000 125,000 185,437 2,956 315,393
Net income -- -- 31,823 -- 31,823
Change in net unrealized
investment gains, net of
reclassification adjustment -- -- -- (1,363) (1,363)
--------- --------- --------- --------- ---------
Balance, December 31, 1998 $ 2,000 $ 125,000 $ 217,260 $ 1,593 $ 345,853
========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
B-3
<PAGE>
<TABLE>
Pruco Life Insurance Company of New Jersey
Statements of Cash Flows
Years Ended December 31, 1998, 1997, and 1996 (In Thousands)
- --------------------------------------------------------------------------------
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 31,823 $ 19,223 $ 31,787
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Policy charges and fee income (10,871) (7,841) (9,963)
Interest credited to policyholders' account balances 18,985 19,372 20,069
Realized investment gains, net (8,446) (1,707) (1,221)
Amortization and other non-cash items 2,491 (1,046) 10,065
Change in:
Future policy benefits and other policyholders' liabilities 5,310 8,981 7,461
Accrued investment income 1,866 (1,167) (1,329)
Policy loans (12,137) (13,388) (15,724)
Separate Accounts (854) 1,629 (1,335)
Payable to affiliates (815) (1,752) 4,300
Deferred policy acquisition costs (12,298) 5,340 (10,934)
Income taxes payable (11,353) 10,993 1,970
Deferred income tax liability 1,527 (1,987) 366
Other, net (8,955) 2,812 4,669
----------- ----------- -----------
Cash Flows (Used in) From Operating Activities (3,727) 39,462 40,181
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities:
Available for sale 1,001,096 645,355 901,775
Payments for the purchase of:
Fixed maturities:
Available for sale (1,029,988) (679,709) (956,483)
Cash collateral for loaned securities, net 761 33,663 --
Securities sold under agreements to repurchase, net 27,210 -- --
Short term investments, net (1,297) (35,461) 28,306
----------- ----------- -----------
Cash Flows Used in Investing Activities (2,218) (36,152) (26,402)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 300,536 134,020 16,754
Withdrawals (294,549) (141,255) (26,605)
----------- ----------- -----------
Cash Flows From (Used in) Financing Activities 5,987 (7,235) (9,851)
----------- ----------- -----------
Net increase (decrease) in Cash 42 (3,925) 3,928
Cash, beginning of year 3 3,928 --
----------- ----------- -----------
CASH, END OF PERIOD $ 45 $ 3 $ 3,928
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 27,083 $ 1,896 $ 11,673
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
B-4
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. BUSINESS
Pruco Life Insurance Company of New Jersey (the Company) is a stock life
insurance company organized in 1982 under the laws of the state of New Jersey.
It is licensed to sell individual life insurance, variable life insurance,
variable annuities, and fixed annuities (the Contracts) only in the states of
New Jersey and New York.
The Company is a wholly owned subsidiary of Pruco Life Insurance Company (Pruco
Life), a stock life insurance company organized in 1971 under the laws of the
state of Arizona. Pruco Life, in turn, is a wholly owned subsidiary of The
Prudential Insurance Company of America (Prudential), a mutual insurance company
founded in 1875 under the laws of the state of New Jersey. Pruco Life intends to
make additional capital contributions to the Company, as needed, to enable it to
comply with its reserve requirements and fund expenses in connection with its
business. Generally, Pruco Life is under no obligation to make such
contributions and its assets do not back the benefits payable under the
Contracts.
The Company is engaged in a business that is highly competitive because of the
large number of stock and mutual life insurance companies and other entities
engaged in marketing insurance products, and individual annuities. There are
approximately 1,620 stock, mutual and other types of insurers in the life
insurance business in the United States.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements include the accounts of the Company, a stock life
insurance company. The financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP").
Use of Estimates
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from those estimates.
Investments
Fixed maturities classified as "available for sale" are carried at estimated
fair value. The amortized cost of fixed maturities is written down to estimated
fair value if a decline in value is considered to be other than temporary.
Unrealized gains and losses on fixed maturities "available for sale" including
the effect on deferred policy acquisition costs and participating annuity
contracts that would result from the realization of unrealized gains and losses,
net of income taxes, are included in a separate component of equity,
"Accumulated other comprehensive income."
Policy loans are carried at unpaid principal balances.
Short-term investments, consists primarily of highly liquid debt instruments
purchased with an original maturity of twelve months or less and are carried at
amortized cost, which approximates fair value.
Realized investment gains, net, are computed using the specific identification
method. Costs of fixed maturity are adjusted for impairments considered to be
other than temporary.
Cash
Cash includes cash on hand, amounts due from banks, and money market
instruments.
Deferred Policy Acquisition Costs
The costs which vary with and that are related primarily to the production of
new insurance business are deferred to the extent that they are deemed
recoverable from future profits. Such costs include certain commissions, costs
of policy issuance and underwriting, and certain variable field office expenses.
Deferred policy acquisition costs are subject to recoverability testing at the
time of policy issue and loss recognition testing at the end of each accounting
period. Deferred policy acquisition costs are adjusted for the impact of
unrealized gains or losses on investments as if these gains or losses had been
realized, with corresponding credits or charges included in equity.
B-5
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Acquisition costs related to interest-sensitive life products and
investment-type contracts are deferred and amortized in proportion to total
estimated gross profits arising principally from investment results, mortality
and expense margins and surrender charges based on historical and anticipated
future experience. Amortization periods range from 15 to 30 years. Deferred
policy acquisition costs are analyzed to determine if they are recoverable from
future income, including investment income. If such costs are determined to be
unrecoverable, they are expensed at the time of determination. The effect of
revisions to estimated gross profits on unamortized deferred acquisition costs
is reflected in earnings in the period such estimated gross profits are revised.
Securities loaned
Securities loaned are treated as financing arrangements and are recorded at the
amount of cash received as collateral. The Company obtains collateral in an
amount equal to 102% of the fair value of the securities. The Company monitors
the market value of securities loaned on a daily basis with additional
collateral obtained as necessary. Non-cash collateral received is not reflected
in the statements of financial position. Substantially all of the Company's
securities loaned are with large brokerage firms.
Securities sold under agreements to repurchase
Securities sold under agreements to repurchase are treated as financing
arrangements and are carried at the amounts at which the securities will be
subsequently reacquired, including accrued interest, as specified in the
respective agreements. The Company's policy is to take possession of securities
purchased under agreements to resell. The market value of securities to be
repurchased is monitored and additional collateral is requested, where
appropriate, to protect against credit exposure.
Securities lending and securities repurchase agreements are used to generate net
investment income and facilitate trading activity. These instruments are
short-term in nature (usually 30 days or less). Securities loaned are
collateralized principally by U.S. Government and mortgage-backed securities.
Securities sold under repurchase agreements are collateralized principally by
cash. The carrying amounts of these instruments approximate fair value because
of the relatively short period of time between the origination of the
instruments and their expected realization.
Separate Account Assets and Liabilities
Separate Account assets and liabilities are reported at estimated fair value and
represent segregated funds which are invested for certain policyholders and
other customers. Separate Account assets include common stocks, fixed
maturities, real estate related securities, and short-term investments. The
assets of each account are legally segregated and are not subject to claims that
arise out of any other business of the Company. Investment risks associated with
market value changes are borne by the customers, except to the extent of minimum
guarantees made by the Company with respect to certain accounts. The investment
income and gains or losses for Separate Accounts generally accrue to the
policyholders and are not included in the Statement of Operations. Mortality,
policy administration and surrender charges on the accounts are included in
"Policy charges and fee income."
Separate Accounts represent funds for which investment income and investment
gains and losses accrue directly to, and investment risk is borne by, the
policyholders, with the exception of the Pruco Life of New Jersey Modified
Guaranteed Annuity Account. The Pruco Life of New Jersey Modified Guaranteed
Annuity Account is a non-unitized Separate Account, which funds the Modified
Guaranteed Annuity Contract and the Market Value Adjustment Annuity Contract.
Owners of the Pruco Life of New Jersey Modified Guaranteed Annuity and the
Market Value Adjustment Annuity Contracts do not participate in the investment
gain or loss from assets relating to such accounts. Such gain or loss is borne,
in total, by the Company.
Insurance Revenue and Expense Recognition
Premiums from insurance policies are generally recognized when due. Benefits are
recorded as an expense when they are incurred. For traditional life insurance
contracts, a liability for future policy benefits is recorded using the net
level premium method. For individual annuities in payout status, a liability for
future policy benefits is recorded for the present value of expected future
payments based on historical experience.
B-6
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Amounts received as payment for interest sensitive life, investment contracts
and variable annuities are reported as deposits to "Policyholders' account
balances." Revenues from these contracts are reflected as "Policy charges and
fee income" and consist primarily of fees assessed during the period against the
policyholders' account balances for mortality charges, policy administration
charges, and surrender charges. In addition, interest earned from the investment
of these account balances is reflected in "Net investment income." Benefits and
expenses for these products include claims in excess of related account
balances, expenses of contract administration, interest credited and
amortization of deferred policy acquisition costs.
Other Income
Other income consists primarily of asset management fees which are received by
the Company from Prudential for services Prudential provides to the Prudential
Series Fund, an underlying investment option of the Separate Accounts.
Derivative Financial Instruments
Derivatives are financial instruments whose values are derived from interest
rates, foreign exchange rates, various financial indices, or the value of
securities or commodities. Derivative financial instruments used by the Company
are futures and can be exchange-traded or contracted in the over-the-counter
market. The Company uses derivative financial instruments to hedge market risk
from changes in interest rates and to alter interest rate or currency exposures
arising from mismatches between assets and liabilities. All derivatives used by
the Company are for other than trading purposes.
To qualify as a hedge, derivatives must be designated as hedges for existing
assets, liabilities, firm commitments, or anticipated transactions which are
identified and probable to occur, and effective in reducing the market risk to
which the Company is exposed. The effectiveness of the derivatives must be
evaluated at the inception of the hedge and throughout the hedge period.
When derivatives qualify as hedges, the changes in the fair value or cash flows
of the derivatives and the hedged items are recognized in earnings in the same
period. If the Company's use of other than trading derivatives does not meet the
criteria to apply hedge accounting, the derivatives are recorded at fair value
in "Other liabilities" in the Statements of Financial Position, and changes in
their fair value are recognized in earnings in "Realized investment gains, net"
without considering changes in the hedged assets or liabilities. Cash flows from
other than trading derivative assets and liabilities are reported in the
operating activities section in the Statements of Cash Flows.
Income Taxes
The Company is a member of the consolidated federal income tax return of
Prudential and files separate company state and local tax returns. Pursuant to
the tax allocation arrangement, total federal income tax expense is determined
on a separate company basis. Members with losses record tax benefits to the
extent such losses are recognized in the consolidated federal tax provision.
Deferred income taxes are generally recognized, based on enacted rates, when
assets and liabilities have different values for financial statement and tax
reporting purposes. A valuation allowance is recorded to reduce a deferred tax
asset to that portion that is expected to be realized.
New Accounting Pronouncements
In June 1996, the Financial Accounting Standards Board ("FASB") issued the
Statement of Financial Accounting Standards ("SFAS") No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities"
("SFAS 125"). The statement provides accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of liabilities
and provides consistent standards for distinguishing transfers of financial
assets that are sales from transfers that are secured borrowings. SFAS 125
became effective January 1, 1997 and was applied prospectively. Subsequent to
June 1996, FASB issued SFAS No. 127 "Deferral of the Effective Date of Certain
Provisions of SFAS 125" ("SFAS 127"). SFAS 127 delays the implementation of SFAS
125 for one year for certain transactions, including repurchase agreements,
dollar rolls, securities lending and similar transactions. Adoption of SFAS 125
did not have a material impact on the Company's results of operations, financial
position and liquidity.
On January 1, 1999, the Company adopted the American Institute of Certified
Public Accountants ("AICPA") Statement of Position 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments" ("SOP 97-3").
This statement provides guidance for determining when an insurance company or
other enterprise should recognize a liability for guaranty-fund assessments as
well as guidance for measuring the liability. The adoption of SOP 97-3 is not
expected to have a material effect on the Company's financial position or
results of operations.
B-7
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires that companies recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. SFAS No. 133 provides, if certain conditions
are met, that a derivative may be specifically designated as (1) a hedge of the
exposure to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment (fair value hedge), (2) a hedge of the exposure to
variable cash flows of a forecasted transaction (cash flow hedge), or (3) a
hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale security or a
foreign-currency-denominated forecasted transaction (foreign currency hedge).
SFAS No. 133 does not apply to most traditional insurance contracts. However,
certain hybrid contracts that contain features which can affect settlement
amounts similarly to derivatives may require separate accounting for the "host
contract" and the underlying "embedded derivative" provisions. The latter
provisions would be accounted for as derivatives as specified by the statement.
Under SFAS No. 133, the accounting for changes in fair value of a derivative
depends on its intended use and designation. For a fair value hedge, the gain or
loss is recognized in earnings in the period of change together with the
offsetting loss or gain on the hedged item. For a cash flow hedge, the effective
portion of the derivative's gain or loss is initially reported as a component of
other comprehensive income and subsequently reclassified into earnings when the
forecasted transaction affects earnings. For a foreign currency hedge, the gain
or loss is reported in other comprehensive income as part of the foreign
currency translation adjustment. For all other items not designated as hedging
instruments, the gain or loss is recognized in earnings in the period of change.
The Company is required to adopt this statement by the first quarter of 2000 and
is currently assessing the effect of the new standard.
In October, 1998, the AICPA issued Statement of Position 98-7, "Deposit
Accounting: Accounting for Insurance and Reinsurance Contracts That Do Not
Transfer Insurance Risk," ("SOP 98-7"). This statement provides guidance on how
to account for insurance and reinsurance contracts that do not transfer
insurance risk. SOP 98-7 is effective for fiscal years beginning after June 15,
1999. The adoption of this statement is not expected to have a material effect
on the Company's financial position or results of operations.
Reclassifications
Certain amounts in the prior years have been reclassified to conform to current
year presentations.
B-8
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS
Fixed Maturities
The following tables provide additional information relating to fixed maturities
as of December 31:
<TABLE>
<CAPTION>
1998
-----------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Fixed maturities available for sale
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 51,663 $ 260 $ 318 $ 51,605
Foreign government bonds 34,744 887 236 35,395
Corporate Securities 531,351 7,273 2,634 535,990
-------- -------- -------- --------
Total fixed maturities available for sale $617,758 $ 8,420 $ 3,188 $622,990
======== ======== ======== ========
<CAPTION>
1997
-----------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Fixed maturities available for sale
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 42,885 $ 340 $ 3 $ 43,222
Foreign government bonds 38,332 551 -- 38,883
Corporate securities 503,892 6,545 181 510,256
-------- -------- -------- --------
Total fixed maturities available for sale $585,109 $ 7,436 $ 184 $592,361
======== ======== ======== ========
</TABLE>
B-9
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
The amortized cost and estimated fair value of fixed maturities, categorized by
contractual maturities at December 31, 1998, are shown below:
Available for Sale
---------------------------
Amortized Estimated
Cost Fair Value
-------- ----------
(In Thousands)
Due in one year or less $ 13,645 $ 13,767
Due after one year through five years 269,252 271,525
Due after five years through ten years 255,280 257,992
Due after ten years 79,581 79,706
-------- --------
Total $617,758 $622,990
======== ========
Actual maturities will differ from contractual maturities because, in certain
circumstances, issuers have the right to call or prepay obligations.
Proceeds from the sale of fixed maturities available for sale during 1998, 1997,
and 1996 were $990.7 million, $635.4 million and $854.8 million, respectively.
Gross gains of $8.8 million, $2.9 million, and $3.9 million and gross losses of
$1.8 million, $1.2 million, and $3.8 million were realized on those sales during
1998, 1997, and 1996, respectively. Proceeds from maturities of fixed maturities
available for sale during 1998, 1997, and 1996 were $10.4 million, $10.0
million, and $47.0 million, respectively.
Writedowns for impairments of fixed maturities which were deemed to be other
than temporary were $.6 million for 1998. There were no impairments of fixed
maturities for the years 1997 and 1996.
The following table describes the credit quality of the fixed maturity
portfolio, based on ratings assigned by the National Association of Insurance
Commissioners ("NAIC") or Standard & Poor's Corporation, an independent rating
agency as of December 31, 1998:
Available for Sale
-------------------------------
Amortized Estimated
Cost Fair Value
--------- ----------
NAIC Standard & Poor's (In Thousands)
1 AAA to AA- $ 303,209 $ 306,693
2 BBB+ to BBB- 286,640 287,888
3 BB+ to BB- 27,134 27,692
4 B+ to B- 704 638
5 CCC or lower 71 79
6 In or near default -- --
--------- ---------
Total $ 617,758 $ 622,990
========= =========
B-10
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
The fixed maturity portfolio consists largely of investment grade assets (rated
"1" or "2" by the NAIC), with such investments accounting for 95% and 96% of the
portfolio at December 31, 1998 and 1997, respectively, based on fair value. As
of both of those dates, no fixed maturities in the portfolio were rated "6" by
the NAIC, defined as public and private placement securities which are currently
non-performing or believed subject to default in the near-term.
The Company continually reviews fixed maturities and identifies potential
problem assets which require additional monitoring. The Company defines
"problem" fixed maturities as those for which principal and/or interest payments
are in default. The Company defines "potential problem" fixed maturities as
assets which are believed to present default risk associated with future debt
service obligations and therefore require more active management. No problem or
potential problem fixed maturities were identified in 1998 or 1997.
Special Deposits
Fixed maturities of $.5 million at both December 31, 1998 and 1997,
respectively, were on deposit with governmental authorities or trustees as
required by certain insurance laws.
Investment Income and Investment Gains and Losses
Net investment income arose from the following sources for the years ended
December 31:
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Fixed maturities - available for sale $ 39,478 $ 37,563 $ 36,193
Policy loans 7,350 6,596 5,761
Short-term investments 3,502 3,023 2,504
Other (842) 333 28
-------- -------- --------
Gross investment income 49,488 47,515 44,486
Less investment expenses (2,456) (1,191) (702)
-------- -------- --------
Net investment income $ 47,032 $ 46,324 $ 43,784
======== ======== ========
</TABLE>
Realized investment gains, net, including charges for other than temporary
reductions in value, for the years ended December 31, were as follows:
1998 1997 1996
-------- -------- --------
(In Thousands)
Realized investment gains $ 17,957 $ 2,898 $ 5,232
Realized investment losses (9,511) (1,191) (4,011)
-------- -------- --------
Realized investment gains, net $ 8,446 $ 1,707 $ 1,221
======== ======== ========
B-11
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
Net Unrealized Investment Gains
Net unrealized investment gains on fixed maturities available for sale are
included in the Statements of Financial Position as a component of accumulated
other comprehensive income. Changes in these amounts include adjustments to
avoid double-counting in comprehensive income, items that are included as part
of net income for a period that also have been part of other comprehensive
income in earlier periods. The amounts for the years ended December 31, net of
tax, are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Net unrealized investment gains, beginning of year $ 2,956 $ 2,032 $ 6,588
Changes in net unrealized investment gains attributable to:
Investments:
Net unrealized investment gains on investments arising during the period 3,227 3,228 (6,403)
Reclassification adjustment for gains included in net income 4,539 1,109 860
------- ------- -------
Change in net unrealized investment gains, net of adjustments (1,312) 2,119 (7,263)
Impact of net unrealized investment gains on:
Future policy benefits 57 216 (776)
Deferred policy acquisition costs (108) (1,411) 3,483
------- ------- -------
Change in net unrealized investment gains (1,363) 924 (4,556)
------- ------- -------
Net unrealized investment gains, end of year $ 1,593 $ 2,956 $ 2,032
======= ======= =======
</TABLE>
Unrealized gains (losses) on investments arising during the periods reported in
the above table are net of income tax expense (benefit) of $1.7 million, $1.7
million and $(3.6) million for the years ended December 31, 1998, 1997, and
1996, respectively.
Reclassification adjustments reported in the above table for the years ended
December 31, 1998, 1997, and 1996 are net of income tax expense of $(2.4)
million, $(.6) million and $(.5) million, respectively.
The future policy benefits reported in the above table are net of income tax
expense (benefit) of $.03 million, $0, and $(.4) million for the years ended
December 31, 1998, 1997 and 1996, respectively.
Deferred policy acquisition costs in the above tables for the years ended
December 31, 1998, 1997 and 1996 are net of income tax expense (benefit) of
$(.06) million, $(.8) million and $2.0 million, respectively.
4. POLICYHOLDERS' LIABILITIES
Future policy benefits and other policyholder liabilities at December 31 are as
follows:
1998 1997
------- -------
(In Thousands)
Life insurance $85,523 $80,464
Annuities 5,007 4,756
------- -------
$90,530 $85,220
======= =======
Life insurance liabilities include reserves for death and endowment policy
benefits. Annuity liabilities include reserves for immediate annuities.
B-12
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. POLICYHOLDERS' LIABILITIES (continued)
The following table highlights the key assumptions generally utilized in
calculating these reserves:
<TABLE>
<CAPTION>
Product Mortality Interest Rate Estimation Method
- ---------------------- ----------------------- ---------------------- ---------------------------
<S> <C> <C> <C>
Life insurance Generally rates 2.5% to 7.5% Net level premium based
guaranteed in on non-forfeiture
calculating interest rate
cash surrender values
Individual immediate 1983 Individual Annuity 6.25% to 8.75% Present value of
annuities Mortality Table with expected future payment
certain modifications based on historical experience
</TABLE>
Policyholders' account balances at December 31, are as follows:
1998 1997
-------- --------
(In Thousands)
Individual annuities $148,327 $145,120
Interest-sensitive life contracts 265,521 257,481
-------- --------
$413,848 $402,601
======== ========
Policyholders' account balances for interest-sensitive life, individual
annuities, and guaranteed investment contracts are equal to policy account
values plus unearned premiums. The policy account values represent an
accumulation of gross premium payments plus credited interest less withdrawals,
expenses, mortality charges.
Certain contract provisions that determine the policyholder account balances are
as follows:
<TABLE>
<CAPTION>
Product Interest Rate Withdrawal / Surrender Charges
------- ------------- ------------------------------
<S> <C> <C>
Interest sensitive life contracts 4.0% to 5.4% Various up to 10 years
Individual annuities 3.0% to 5.6% 0% to 8% for up to 8 years
</TABLE>
B-13
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. REINSURANCE
The Company participates in reinsurance, with Prudential and other companies, in
order to provide greater diversification of business, provide additional
capacity for future growth and limit the maximum net loss potential arising from
large risks. Reinsurance ceded arrangements do not discharge the Company or the
insurance subsidiaries as the primary insurer, except for cases involving a
novation. Ceded balances would represent a liability to the Company in the event
the reinsurers were unable to meet their obligations to the Company under the
terms of the reinsurance agreements. The likelihood of a material reinsurance
liability reassumed by the Company is considered to be remote.
Reinsurance amounts included in the Statement of Operations for the year ended
December 31 are below.
1998 1997 1996
------- ------- -------
(In Thousands)
Direct Premiums $ 1,373 $ 1,117 $ 1,345
Reinsurance ceded-affiliated (28) (12) --
------- ------- -------
Premiums $ 1,345 $ 1,105 $ 1,345
======= ======= =======
Policyholders' benefits ceded $ 15 $ 14 $ 13
======= ======= =======
Reinsurance recoverables, included in "Other assets" in the Company's Statements
of Financial Position, at December 31 include amounts recoverable on unpaid and
paid losses and were as follows:
1998 1997
---- ----
(In Thousands)
Life insurance - affiliated $31 $30
--- ---
$31 $30
=== ===
B-14
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
6. INCOME TAXES
The components of income taxes for the years ended December 31, are as follows:
1998 1997 1996
-------- -------- --------
(In Thousands)
Current tax expense (benefit):
U.S. $ 14,786 $ 12,880 $ 13,589
State and local 523 399 (907)
-------- -------- --------
Total 15,309 13,279 12,682
-------- -------- --------
Deferred tax expense (benefit):
U.S. 2,198 (2,305) 2,848
State and local 63 -- 81
-------- -------- --------
Total 2,261 (2,305) 2,929
-------- -------- --------
Total income tax expense $ 17,570 $ 10,974 $ 15,611
======== ======== ========
The Company's income tax expense for the years ended December 31, differs from
the amount computed by applying the expected federal income tax rate of 35% to
income from operations before income taxes for the following reasons:
1998 1997 1996
-------- -------- --------
(In Thousands)
Expected federal income tax expense $ 17,288 $ 10,569 $ 16,589
State and local income taxes 381 259 (537)
Other (99) 146 (441)
-------- -------- --------
Total income tax expense $ 17,570 $ 10,974 $ 15,611
======== ======== ========
Deferred tax assets and liabilities at December 31, resulted from the items
listed in the following table:
1998 1997
------- -------
(In Thousands)
Deferred income tax assets:
Insurance reserves $10,016 $ 6,907
Other -- --
------- -------
Deferred tax assets $10,016 $ 6,907
------- -------
Deferred income tax liabilities:
Deferred acquisition costs 28,509 24,725
Net investment gains 2,847 4,284
Other 2,375 86
------- -------
Deferred tax liabilities 33,731 29,095
------- -------
Net deferred federal tax liability $23,715 $22,188
======= =======
B-15
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
6. INCOME TAXES (continued)
Management believes that based on its historical pattern of taxable income, the
Company will produce sufficient income in the future to realize its deferred tax
assets after valuation allowance. Adjustments to the valuation allowance will be
made if there is a change in management's assessment of the amount of the
deferred tax asset that is realizable. At December 31, 1998 and 1997,
respectively, the Company had no federal or state operating loss carryforwards
for tax purposes.
The Internal Revenue Service (the "Service") has completed examinations of the
consolidated federal income tax returns through 1989. The Service has examined
the years 1990 through 1992. Discussions are being held with the Service with
respect to proposed adjustments. Management, however, believes there are
adequate defenses against, or sufficient reserves to provide for, such
adjustments. The Service has begun their examination of the years 1993 through
1995.
B-16
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. EQUITY
Reconciliation of Statutory Surplus and Net Income
Accounting practices used to prepare statutory financial statements for
regulatory purposes differ in certain instances from GAAP. The following table
reconciles the Company's statutory net income and surplus as of and for the
years ended December 31, determined in accordance with accounting practices
prescribed or permitted by the New Jersey Department of Banking and Insurance
with net income and equity determined using GAAP.
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Statutory net income $ 18,704 $ 18,306 $ 24,774
Adjustments to reconcile to net income on a GAAP basis:
Deferred acquisition costs 12,464 (3,170) 5,656
Deferred premium 534 198 221
Insurance liabilities (808) 2,324 4,784
Deferred taxes (2,261) 2,305 (2,929)
Valuation of investments 3,794 (143) (765)
Other, net (604) (597) 46
-------- -------- --------
GAAP net income $ 31,823 $ 19,223 $ 31,787
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
1998 1997
--------- ---------
(In Thousands)
<S> <C> <C>
Statutory surplus $ 252,530 $ 235,958
Adjustments to reconcile to equity on a GAAP basis:
Valuation of investments 20,799 18,540
Deferred acquisition costs 113,923 101,625
Deferred premium (1,473) (2,007)
Insurance liabilities (18,141) (19,120)
Deferred taxes (23,715) (22,188)
Other, net 1,930 2,585
--------- ---------
GAAP stockholder's equity $ 345,853 $ 315,393
========= =========
</TABLE>
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values presented below have been determined using available
information and valuation methodologies. Considerable judgment is applied in
interpreting data to develop the estimates of fair value. Accordingly, such
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 approximates estimated
fair value).
Fixed maturities
Estimated fair values for fixed maturities are based on quoted market prices or
estimates from independent pricing services.
Policy loans
Estimated fair value of policy loans is calculated using a discounted cash flow
model based upon current U.S. Treasury rates and historical loan repayments.
B-17
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
8. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Policyholders' account balances
Estimated fair values of policyholders' account balances are derived by using
discounted projected cash flows, based on interest rates being offered for
similar contracts, with maturities consistent with those remaining for the
contracts being valued.
Derivative financial instruments
The fair value of futures is estimated based on market quotes for transactions
with similar terms. The following table discloses the carrying amounts and
estimated fair values of the Company's financial instruments at December 31,:
<TABLE>
<CAPTION>
1998 1997
--------------------------- ---------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
---------- ---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Financial Assets:
Fixed maturities available for sale $ 622,990 $ 622,990 $ 592,361 $ 592,361
Policy loans 139,443 146,504 127,306 126,262
Short-term investments 53,761 53,761 52,464 52,464
Cash 45 45 3 3
Separate Accounts assets 1,453,407 1,453,407 1,110,561 1,110,561
Financial Liabilities:
Policyholders'
account balances $ 413,848 $ 414,602 $ 402,601 $ 401,267
Cash collateral for loaned
securities 61,634 61,634 33,663 33,663
Separate Accounts liabilities 1,450,986 1,450,986 1,108,994 1,108,994
Derivatives -- -- 83 83
</TABLE>
9. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS
Futures
The Company uses exchange-traded Treasury futures to reduce market risks from
changes in interest rates, to alter mismatches between the duration of assets in
a portfolio and the duration of liabilities supported by those assets, and to
hedge against changes in the value of securities it owns or anticipates
acquiring. The Company enters into exchange-traded futures with regulated
futures commissions merchants who are members of a trading exchange. The fair
value of futures is estimated based on market quotes for a transaction with
similar terms.
Under exchange-traded futures, the Company agrees to purchase a specified number
of contracts with other parties and to post variation margin on a daily basis in
an amount equal to the difference in the daily market values of those contracts.
Futures are typically used to hedge duration mismatches between assets and
liabilities by replicating Treasury performance. Treasury futures move
substantially in value as interest rates change and can be used to either
generate new or hedge existing interest rate risk. This strategy protects
against the risk that cash flow requirements may necessitate liquidation of
investments at unfavorable prices resulting from increases in interest rates.
This strategy can be a more cost effective way of temporarily reducing the
Company's exposure to a market decline than selling fixed income securities and
purchasing a similar portfolio when such a decline is believed to be over.
B-18
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
9. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (continued)
For futures that meet hedge accounting criteria, changes in their fair value are
deferred and recognized as an adjustment to the carrying value of the hedged
item. Deferred gains or losses from the hedges for interest-bearing financial
instruments are amortized as a yield adjustment over the remaining lives of the
hedged item. Futures that do not qualify as hedges are carried at fair value
with changes in value reported in current period earnings. The fair value of
futures contracts was immaterial at December 31, 1998 and 1997.
Credit Risk
The current credit exposure of the Company's derivative contracts is limited to
the fair value at the reporting date. Credit risk is managed by entering into
transactions with creditworthy counterparties and obtaining collateral where
appropriate and customary. The Company also attempts to minimize its exposure to
credit risk through the use of various credit monitoring techniques. All of the
net credit exposure for the Company from derivative contracts is with
investment-grade counterparties.
10. CONTINGENCIES
Several actions have been brought against the Company on behalf of those persons
who purchased life insurance policies based on complaints about sales practices
engaged in by Prudential, the Company and agents appointed by Prudential and the
Company. Prudential has agreed to indemnify the Company for any and all losses
resulting from such litigation.
In the normal course of business, the Company is subject to various claims and
assessments. Management believes the settlement of these matters would not have
a material effect on the financial position or results of operations of the
Company.
11. DIVIDENDS
The Company is subject to New Jersey law which requires any shareholder dividend
or distribution must be filed with the New Jersey Commissioner of Insurance.
Cash dividends may only be paid out of surplus derived from realized net
profits.
12. RELATED PARTY TRANSACTIONS
Service Agreements
Prudential and Pruco Life of New Jersey operate under service and lease
agreements whereby services of officers and employees, supplies, use of
equipment and office space are provided by Prudential. The net cost of these
services allocated to the Company were $23.5 million, $16.2 million, and $12.2
million for the years ended December 31, 1998, 1997, and 1996, respectively.
These costs are treated in a manner consistent with the Company's policy on
deferred acquisition costs.
Prudential and Pruco Life of New Jersey have an agreement with respect to
administrative services for the Prudential Series Fund. The Company invests in
the various portfolios of the Series Fund through the Separate Accounts. Under
this agreement, Prudential pays compensation to Pruco Life of New Jersey in the
amount equal to a portion of the gross investment advisory fees paid by the
Prudential Series Fund. The Company received from Prudential its allocable
shares of such compensation in the amount of $5.6 million, $5.0 million, and
$3.5 million during 1998, 1997, and 1996 respectively, recorded in "Other
income."
B-19
<PAGE>
Pruco Life Insurance Company of New Jersey
Notes to Financial Statements
- --------------------------------------------------------------------------------
12. RELATED PARTY TRANSACTIONS (continued)
Reinsurance
The Company currently has a reinsurance agreement in place with Prudential (the
reinsurer). The reinsurance agreement is a yearly renewable term agreement in
which the Company may offer and the reinsurer may accept reinsurance on any life
in excess of the Company's maximum limit of retention. The Company is not
relieved of its primary obligation to the policyholder as a result of these
reinsurance transactions. These agreements had no material effect on net income
for the years ended December 31, 1998, 1997, and 1996.
Debt Agreements
In July 1998, the Company established a revolving line of credit facility with
Prudential Funding Corporation, a wholly-owned subsidiary of Prudential. There
is no outstanding debt relating to this credit facility as of December 31, 1998.
B-20
<PAGE>
Report of Independent Accountants
---------------------------------
To the Board of Directors of
Pruco Life Insurance Company of New Jersey
In our opinion, the accompanying statements of financial position and the
related statements of operations, of changes in stockholder's equity and of cash
flows present fairly, in all material respects, the financial position of Pruco
Life Insurance Company of New Jersey at December 31, 1998 and 1997, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles. 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 of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
New York, New York
February 26, 1999
B-21
<PAGE>
[DISCOVERY(R) LIFE PLUS [LOGO]
SINGLE PREMIUM VARIABLE LIFE ACCOUNT
VARIABLE LIFE INSURANCE CONTRACTS
- ----------------------------------==============================================
A Subsidiary of
[PRUDENTIAL LOGO]
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
213 Washington Street
Newark, New Jersey 07102-2992
Telephone: (888) PRU-2888
<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.
REPRESENTATION WITH RESPECT TO CHARGES
Pruco Life Insurance Company of New Jersey represents that the fees and
charges deducted under the variable life insurance contracts registered by this
registration statement, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Pruco Life Insurance Company of New Jersey.
UNDERTAKING WITH RESPECT TO INDEMNIFICATION
The Registrant, in conjunction with certain affiliates, maintains
insurance on behalf of any person who is or was a trustee, director, officer,
employee, or agent of the Registrant, or who is or was serving at the request of
the Registrant as a trustee, director, officer, employee or agent of such other
affiliated trust or corporation, against any liability asserted against and
incurred by him or her arising out of his or her position with such trust or
corporation.
New Jersey, being the state of organization of Pruco Life Insurance
Company of New Jersey ("PLNJ"), permits entities organized under its
jurisdiction to indemnify directors and officers with certain limitations. The
relevant provisions of New Jersey law permitting indemnification can be found in
Section 14A:3-5 of the New Jersey Statutes Annotated. The text of PLNJ's By-law
V, which related to indemnification of officers and directors, is incorporated
by reference to Exhibit 3(ii) to its Form 10-Q filed August 15, 1997.
Insofar as indemnification for liabilities arising under the Securities
Act of 1993 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 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 74 pages.
The undertaking to file reports.
The signatures.
The undertaking with respect to charges.
The undertaking with respect to indemnification.
Written consent of the following persons:
1. PricewaterhouseCoopers, LLP, independent accountants.
2 Clifford E. Kirsch, Esq.
3 Ikwhan Oh, FSA, MAAA, 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 5)
(2) Not Applicable
(3) Distributing Contracts
(a) Distribution Agreement between Pruco Securities
Corporation and Pruco Life Insurance Company of New
Jersey. (Note 5)
(b) Proposed form of Agreement between Pruco Securities
Corporation and independent brokers with respect to the
Sale of the Contracts. (Note 5)
(c) Revised Schedule of Sales Commissions. (Note 1)
(4) Not Applicable
(5) (a) Flexible Premium Variable Life Insurance Contract.
(b) Contract page 5 for use in New York. (Note 1)
(c) Contract page 6 for use in New York. (Note 1)
(d) Contract jacket for use in New Jersey.
(e) Contract page 5 for use in New Jersey. (Note 1)
(f) Contract page 6 for use in New Jersey. (Note 1)
(g) Contract page 7 for use in New York. (Note 1)
(h) Contract page 8 for use in New York. (Note 1)
(i) Contract page 9 for use in New York. (Note 1)
(j) Contract page 10 for use in New York. (Note 1)
(k) Contract page 9 for use in New Jersey. (Note 1)
(l) Contract page 11 for use in New York. (Note 1)
(m) Contract page 17 for use in New Jersey and New York.
(Note 1)
II-2
<PAGE>
(n) Contract page 10 for use in New Jersey. (Note 1)
(o) Contract jacket for use in New York. (Note 1)
(p) Contract page 7 for use in New Jersey. (Note 1)
(q) Contract page 8 for use in New Jersey. (Note 1)
(r) Contract page 13 for use in New York. (Note 1)
(6) (a) Articles of Incorporation of Pruco Life Insurance
Company of New Jersey, as amended February 12, 1998.
(Note 7)
(b) By-laws of Pruco Life Insurance Company of New Jersey,
as amended May 5, 1997. (Note 2)
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) (a) Application Form for Flexible Premium Variable Life
Insurance Contract. (Note 1)
(b) Supplement to the Application for Flexible Premium
Variable Life Insurance Contract.
(c) Supplement to the Application for Flexible Premium
Variable Life Insurance Contract. (Note 1)
(11) Form of Notice of Withdrawal Right.
(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 1)
(13) Living Needs Benefit Rider
(a) for use in New Jersey. (Note 1)
(b) for use in New York. (Note 3)
2. See Exhibit 1.A.(5).
3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality of
the securities being registered. (Note 1)
4. None
5. Not Applicable
6. Opinion and Consent of Ikwhan Oh, FSA, MAAA, as to actuarial matters
pertaining to the securities being registered. (Note 1)
7. Powers of Attorney:
(a) William M. Bethke, Ira J. Kleinman,
Esther H. Milnes, I. Edward Price. (Note 3)
(b) James J. Avery, Jr. (Note 4)
(c) Dennis G. Sullivan (Note 7)
(Note 1) Filed herewith
(Note 2) Incorporated by reference to Exhibit 3(ii) to Form 10-Q, Registration
No. 333-18053, filed August 15, 1997 on behalf of the Pruco Life
Insurance Company of New Jersey.
(Note 3) Incorporated by reference to Form N-4, Registration No. 333-18117 on
Form N-4 filed December 18, 1996, on behalf of the Pruco Life of New
Jersey Flexible Premium Variable Annuity Account.
II-3
<PAGE>
(Note 4) Incorporated by reference to Post-Effective Amendment No. 10 to Form
S-1, Registration No. 33-20018 filed April 9, 1998 on behalf of the
Pruco Life of New Jersey Variable Contract Real Property Account.
(Note 5) Incorporated by reference to Post-Effective Amendment No. 23 to this
Registration Statement, filed April 27, 1998.
(Note 6) Incorporated by reference to Post-Effective Amendment No. 26 for Form
S-6, Registration No. 2-89780, filed April 28, 1997, on behalf of the
Pruco Life of New Jersey Variable Appreciable Account.
(Note 7) Incorporated by reference to Post-Effective Amendment No. 12 to Form
S-1, Registration No. 33-20018, filed April 19, 1999 on behalf of the
Pruco Life of New Jersey Variable Contract Real Property Account.
II-4
<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 29 day of April, 1999.
(Seal) PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
(Registrant)
BY: PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Depositor)
Attest: CLIFFORD E. KIRSCH *By: ESTHER H. MILNES
----------------------------------- -------------------
CLIFFORD E. KIRSCH ESTHER H. MILNES
CHIEF LEGAL OFFICER AND SECRETARY PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 22 to the Registration Statement has been signed
below by the following persons in the capacities indicated on this 28 day of
April, 1999.
SIGNATURE AND TITLE
-------------------
/s/ *
- ---------------------------------------
ESTHER H. MILNES
PRESIDENT AND DIRECTOR (PRINCIPAL
EXECUTIVE OFFICER)
/s/ *
- ---------------------------------------
DENNIS G. SULLIVAN
VICE PRESIDENT AND CHIEF ACCOUNTING
OFFICER (PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/ * *By: CLIFFORD E. KIRSCH
- --------------------------------------- -------------------
JAMES J. AVERY, JR. CLIFFORD E. KIRSCH
DIRECTOR
/s/ *
- ---------------------------------------
WILLIAM M. BETHKE
DIRECTOR
/s/ *
- ---------------------------------------
IRA J. KLEINMAN
DIRECTOR
/s/ *
- ---------------------------------------
I. EDWARD PRICE
DIRECTOR
II-5
<PAGE>
EXHIBIT INDEX
1.A.(10)(b) Contract page 5 for use in New York..................
(c) Contract page 6 for use in New York..................
(e) Contract page 5 for use in New Jersey................
(f) Contract page 6 for use in New Jersey................
(g) Contract page 7 for use in New York. ................
(h) Contract page 8 for use in New York. ................
(i) Contract page 9 for use in New York. ................
(j) Contract page 10 for use in New York. ...............
(k) Contract page 9 for use in New Jersey. ..............
(l) Contract page 11 for use in New York. ...............
(m) Contract page 17 for use in New Jersey and New York..
(n) Contract page 10 for use in New Jersey...............
(o) Contract jacket for use in New York..................
(p) Contract page 7 for use in New Jersey................
(q) Contract page 8 for use in New Jersey. ..............
(r) Contract page 13 for use in New York.................
3. Opinion and Consent of Clifford E. Kirsch, Esq., as to the legality of
the securities being registered ...........................................
6. Opinion and Consent of Ikwhan Oh, FSA, MAAA, as to actuarial matters
pertaining to the securities being registered .............................
24. Consent of PricewaterhouseCoopers, LLP, independent accountants ...........
II-6
Exhibit A(3)(c)
<PAGE>
Exhibit A(3)(c)
Commission Schedule For
Discovery Life Plus Insurance Contracts
I. District Aqencies
A. First year commissions on contracts issued are equal to 2% of the
initial premium plus $20 per contract.
B. On any additional premiums which are paid, there are no commissions
payable.
II. Ordinary Aqencies
A. First year commissions on contracts issued are equal to 3% of the
initial premium.
B. On any additional premiums which are paid, there are no commissions
payable.
III. The registered representatives of Prudential-Bache Securities, Inc. will be
paid up to 2% of the initial premium on contracts they sell. On any
additional premiums which are paid, there are no commissions payable.
IV. In the event a contract lapses or is surrendered within the first contract
year, the entire first year commission is subject to recapture by the Pruco
Life Insurance Company of New Jersey.
II-11
EXHIBIT A (5)
II-12
<PAGE>
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. It calls for the payment of an initial
premium. Additional premiums may be payable as described on page 8. The initial
premium minus any applicable deductions for state and/or local premium taxes is
the contract kind at the start. The value of the contract fund will vary with
the payment of premiums, the investment performance of those subaccounts of the
Pruco Life Single Premium Variable Life Account that you select, the extent to
which interest is credited to any portion allocated to the fixed account, and
the extent to which the monthly mortality charges are less than the guaranteed
maximums.
We describe on page 8 the way in which the contract may go into default. If the
contract remains in default at the end of is days of grace, the contract will
end and have no value.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan. The table below tells what the basic amount is. The table will
refer you to the parts of the contract that tell you how we may adjust the basic
amount. If you surrender the contract, the proceeds will be the net cash value.
We describe it under Cash Value Option on page 11.
Proceeds often are not taken in one sum. For instance, on surrender, you may be
able to put proceeds under a settlement option to provide retirement income or
for some other purpose. Also, for all or part of the proceeds that arise from
the Insured's death, you may be able to choose a manner of payment for the
beneficiary. If the Insured dies and an option has not been chosen, the
beneficiary may be able to choose one. We will pay interest under Option 3 from
the date of death on any proceeds to which no other manner of payment applies.
This will be automatic as we state on page 17. There is no need to ask for it.
You and we may agree on a change in the ownership of this contract. Also, unless
we endorse it to say otherwise, the contract gives you these rights, among
others:
o You may change the beneficiary under it.
o You may borrow on it up to its loan value.
o You may surrender it for its net cash value.
o You may change the allocation of additional premiums, minus any deductions
for state and/or local premium taxes, among the subaccounts and the fixed
account.
o You may transfer amounts among subaccounts and the fixed account.
- --------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- --------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- --------------------------------------------------------------------------------
And the Contract Is Then The Basic And We Adjust The
In Force: Amount Is: Basic Amount For:
- --------------------------------------------------------------------------------
other than during the the insurance amount contract debt
days of grace (see page 8) (see page 10) (see page 12)
- --------------------------------------------------------------------------------
during the days the insurance amount contract debt and any
of grace additional premium due
in the days of grace
(see pages 12 and 8)
- --------------------------------------------------------------------------------
The table is part of the Contract Summary and of the Contract.
II-13
GENERAL PROVISIONS
Definitions.--We define here some of the words and phrases used all through this
contract. We explain others, not defined here, in other parts of the text.
We, Our, Us, and Company.--Pruco Life Insurance Company, an Arizona Corporation.
You and Your.--The owner of the contract.
Insured.--The person named as the Insured on the first page. He or she need not
be the owner.
Example: Suppose we issue a contract on the life of your spouse. You applied for
it and named no one else as owner. Your spouse is the Insured and you are the
owner.
SEC.--The Securities and Exchange Commission.
Issue Date.--The contract date.
Monthly Date.--The contract date and the same day as the contract date in each
later month. But if the contract date is the 29th, 30th or 31st day of the month
and the later month has fewer days, then the monthly date will be the first day
of the next month.
Example: If the contract date is March 9, 1986 the Monthly Dates are each March
9, April 9, May 9 and so on.
Anniversary or Contract Anniversary.--The same day and month as the contract
date in each later year.
Example: It the contract date is March 9, 1986, the first anniversary is March
9, 1987. The second is March 9, 1988, and so on.
Contract Year.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988 and so on.
Contract Month.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
Attained Age.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
The Contract.--This policy and the application, a copy of which is attached,
form the whole contract. We assume that all statements in the application were
made to the best of the knowledge and belief of the person(s) who made them; in
the absence of fraud they are deemed to be representations and not warranties.
We relied on those statements when we issued the contract. We will not use any
statement, unless made in the application, to try to void the contract or to
deny a claim.
Contract Modifications.--Only a Company officer may agree to modify this
contract, and then only in writing.
Non-participating.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
Service Office.--This is the office that will service this contract. Its mailing
address is the one we show in the Contract Data pages, unless we notify you of
another one.
Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
Suicide Exclusion.--If the Insured dies by suicide within two years from the
issue date, we will pay no more under this contract than the sum of the premiums
paid.
Currency.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
(Continued on Next Page)
Page 6 (VFL-85)-Y
Pruco Life Insurance Company of New Jersey
Newark, New Jersey
A Stock Company Subsidiary of The Prudential insurance Company of America
================================================================================
Insured Contract Number
Contract Date
Face Amount
Agency
================================================================================
We will pay the beneficiary the proceeds of this contract promptly if
we receive due proof that the Insured died. We make this promise
subject to all the provisions of the contract.
The cash value may increase or decrease daily depending on the payment
of premiums, the investment experience of the separate account and the
level of mortality charges made. There is no guaranteed minimum.
The Death Benefit will be the insurance amount which is the greater of
(1) the face amount we show above, and (2) the contract fund times the
attained age factor that applies.
Please read this contract with care. A guide to its contents is on the
last page before the back cover. A summary is on page 5. If there is
ever a question about it, or if there is a claim, just see a Company
representative or get in touch with one of our offices.
Right to Cancel Contract.--You may return this contract to us within
(1) 10 days after you get it, or (2) 45 days after Part 1 of the
application was signed, or (3) 10 days after we mail or deliver the
Notice of Withdrawal Right, whichever is latest. All you have to do is
take the contract or mail it to one of our offices or to the
representative who sold it to you. It will be canceled from the start
and we will promptly give you the value of your Contract Fund on the
date you return the contract to us. We will also give back any charges
we made in accord with this contract.
Signed for Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
/s/ Isabelle L. Kirchner /s/ Donald G. [ILLEGIBLE]
Secretary President
Variable Life Insurance Policy with Premium Flexibility. Initial premium, with
additional premiums payable during Insured's lifetime as stated in the contract.
Benefits reflect premium payments, investment results and mortality charges.
Insurance payable only upon death. Non-participating.
CONTRACT SUMMARY
We offer this summary to help you understand this contract. We do not intend
that it change any of the provisions of the contract.
This is a contract of life insurance. It calls for the payment of an initial
premium. Additional premiums may be payable as described on page 8. The initial
premium, minus any applicable deductions for state and/or local premium taxes
minus the mortality charge deducted on the contract date is the contract fund at
the start. The value of the contract Fund will vary with the payment of
premiums, the investment performance of those subaccounts of the Pruco Life
Single Premium Variable Life Account that you select, the extent to which
interest is credited to any portion allocated to the fixed account, and the
extent to which the monthly mortality charges are less than the guaranteed
maximums.
We describe on page 8 the way in which the contract may go into
default. If the contract remains in default at the end of its days
of grace, the contract will end and have no value.
Proceeds is a word we use to mean the amount we would pay if we were to settle
the contract in one sum. To compute the proceeds that may arise from the
Insured's death, we start with a basic amount. We may adjust that amount if
there is a loan. The table below tells what the basic amount is. The table will
refer you to the parts of the contract that tell you how we may adjust the basic
amount. If you surrender the contract, the proceeds will be the net cash
value. We describe it under Cash Value Option on page 11.
Proceeds often are not taken in one sum. For instance, on
surrender, you may be able to put proceeds under a settlement
option to provide retirement income or for some other purpose.
Also, for all or part of the proceeds that arise from the Insured's
death, you may be able to choose a manner of payment for the
beneficiary. If the Insured dies and an option has not been chosen,
the beneficiary may be able to choose one. We will pay interest
under Option 3 from the date of death on any proceeds to which no
other manner of payment applies. This will be automatic as we state
on page 17. There is no need to ask for it.
You and we may agree on a change in the ownership of this contract.
Also, unless we endorse it to say otherwise, the contract gives you
these rights, among others:
o You may change the beneficiary under it.
o You may borrow on it up to its loan value.
o You may surrender it for its net cash value.
o You may change the allocation of additional premiums, minus any deductions
for state and/or local premium taxes, among the subaccounts and the fixed
account.
o You may transfer amounts among subaccounts and the fixed account.
- --------------------------------------------------------------------------------
TABLE OF BASIC AMOUNTS
- --------------------------------------------------------------------------------
When the proceeds arise from the Insured's death:
- --------------------------------------------------------------------------------
And the Contract Is Then the Basic And We Adjust The
In Force: Amount Is: Basic Amount For:
- --------------------------------------------------------------------------------
other than during the the insurance amount contract debt
days of grace (see page 8) (see page 10) (see page 12)
- --------------------------------------------------------------------------------
during the days the insurance amount contract debt and any
of grace additional premium due
in the days of grace
(see pages 12 and 8)
- --------------------------------------------------------------------------------
This table is part of the Contract Summary and of the Contract.
II-14
GENERAL PROVISIONS
Definitions.--We define here some of the words and phrases used all through
this contract. We explain others, not defined here, in other parts of the text.
We, Our, Us, and Company.--Pruco Life Insurance Company of New Jersey, a New
Jersey Corporation.
You and Your.--The owner of the contract.
Insured.--The person named as the Insured on the first page. He or she need not
be the owner.
Example: Suppose we issue a contract on the life of your spouse. You applied for
it and named no one else as owner. Your spouse is the Insured and you are the
owner.
SEC.--The Securities and Exchange Commission.
Issue Date.--The contract date.
Monthly Date.--The contract date and the same day as the contract date in each
later month. But if the contract date is the 29th, 30th or 31st day of the month
and the later month has fewer days, then the monthly date will be the first day
of the next month.
Example: If the contract date is March 9, 1986, the Monthly Dates are each March
9, April 9, May 9 and so on.
Anniversary or Contract Anniversary.--The same day and month as the contract
date in each later year.
Example: If the contract date is March 9, 1986, the first anniversary is March
9, 1987, The second is March 9, 1988, and so on.
Contract Year.--A year that starts on the contract date or on an anniversary.
Example: If the contract date is March 9, 1986, the first contract year starts
then and ends on March 8, 1987. The second starts on March 9, 1987 and ends on
March 8, 1988, and so on.
Contract Month.--A month that starts on a Monthly Date.
Example: If March 9, 1986 is a Monthly Date, a contract month starts then and
ends on April 8, 1986. The next contract month starts on April 9, 1986 and ends
on May 8, 1986, and so on.
Attained Age.--The Insured's attained age at any time is the issue age plus the
length of time since the contract date. You will find the issue age near the top
of page 3.
The Contract.--This policy and the application, a copy of which is attached,
form the whole contract. We assume that all statements in the application were
made to the best of the knowledge and belief of the person(s) who made them; in
the absence of fraud they are deemed to be representations and not warranties.
We relied on those statements when we issued the contract. We will not use any
statement, unless made in the application, to try to void the contract or to
deny a claim.
Contract Modifications.--Only a Company officer may agree to modify this
contract, and then only in writing.
Non-participating.--This contract will not share in our profits or surplus
earnings. We will pay no dividends on it.
Service Office.--This is the office that will service this contract. Its mailing
address is the one we show in the Contract Data pages, unless we notify you of
another one.
Ownership and Control.--Unless we endorse this contract to say otherwise: (1)
the owner of the contract is the Insured; and (2) while the Insured is living
the owner alone is entitled to (a) any contract benefit and value, and (b) the
exercise of any right and privilege granted by the contract or by us.
Suicide Exclusion.--If the Insured, whether sane or insane, dies by suicide
within two years from the issue date, we will pay no more under this contract
than the sum of the premiums paid.
Currency.--Any money we pay, or that is paid to us, must be in United States
currency. Any amount we owe will be payable at our Service Office.
(Continued on Next Page)
II-15
GENERAL PROVISIONS (Continued)
Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. To do so, we will compute the face amount of insurance
which the initial premium would have bought at the correct age and sex. We will
reconstruct the contract fund and death benefit of the contract, assuming the
insured made the same allocations and paid the same additional premiums, if any,
as under the incorrect contract.
It is possible that, when we reconstruct values, we will find that the correct
contract would be in default past its days of grace while the incorrect contract
was not. In that event, if the insured has died, we will pay what the death
benefit of the correct contract would have been if the insured had died on the
day before the default occurred. If the insured is living, we will inform him or
her of the payment needed to end the default, and a 61 day grace period will
begin on the day we mail that notice.
Incontestability.--Except for default, we will not contest this contract after
it has been in force during the Insured's lifetime for two years from the issue
date.
Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. This contract may not be assigned to
another insurance company.
Annual Report.--Once each contract year after the first we will send you a
report. It will show: (1) the insurance amount; (2) the amount of the contract
fund; (3) the investment amount in each subaccount; (4) the amount in the fixed
account; (5} the net cash value; (6) the premiums paid, interest credited and
monthly charges made during the year; (7) the interest rate that will be
credited until further notice to the amount in the Fixed Account; (8) any
additional premium which you have the right to pay; and (9) any outstanding
contract debt. The report will include any other data that may be currently
required where this contract is delivered. You may ask for a report like this at
any time. But, except for the report we send you once a year, we have the right
to charge a fee for each report.
Payment of Death Claim.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But we
have the right to defer paying any portion of the proceeds greater than the face
amount shown on page 3 if (1) the New York Stock Exchange is closed; or (2) the
SEC requires that trading be restricted or declares an emergency; or (3) the SEC
lets us defer payment to protect our contract owners.
BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form which meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:
1. One who survives the Insured will have the right to be paid only if no one in
a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
II-16
PREMIUMS
Initial Premium.--The initial premium, which we show on page 3, is due on the
contract date. It may be paid at our Service Office or to one of our
representatives. If we are asked to do so, we will give a signed receipt. The
initial premium minus any applicable deductions for state and/or local premium
taxes, becomes the contract fund. (See page 10.)
Additional Premiums.--Additional premiums may be paid as we describe below:
1. An additional premium may be paid if (1) it is permitted according to the
definition of life insurance contained in the applicable federal tax law, and
(2) it does not result in an increase in the insurance amount. If you ask us to
do so, we will let you know the amount of any additional premium allowed and
when it can be paid. We will also include that information as part of the annual
report. (See page 7.)
2. If the contract goes into default, an additional premium sufficient to bring
the contract out of default may be paid during the grace period.
Additional premiums paid in accord with 1 or 2 above minus any applicable
deductions for state and/or local premium taxes, will be added to the contract
fund but will not increase the insurance amount.
Premium Taxes.--State and local taxes on premiums paid vary according to
jurisdiction. We will deduct from each premium paid the appropriate amount
applicable for these taxes.
Default.--If on any monthly date the net cash value equals zero, this contract
is in default. In this case we will send you a notice within 10 days to tell you
what premium payment is needed to bring the contract out of default and the
length of the grace period for the payment of that premium.
Grace Period.--We grant 61 days of grace from any Monthly Date on which the
contract goes into default. We will send you a notice of default and state the
amount to pay that will bring the contract out of default. This amount is the
amount that, after deduction of any state and/or local premium taxes, is
sufficient to pay the mortality charges (See page 11.) for the Monthly Date on
which the contract goes into default and the next Monthly Date. If that amount
has not been paid by the end of the grace period the contract will end and have
no value.
The insured might die while the contract is in default during its days of grace.
If so, the proceeds will be reduced by the amount that, after deduction of any
state and/or local premium taxes, is sufficient to pay the mortality charges
which have not yet been deducted for Monthly Dates prior to the date on which
death occurred.
Reinstatement.--If this contract ends as we describe under Grace Period, you may
reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must give us any facts we need to satisfy us that the Insured is
insurable for the contract.
3. We must be paid an amount that, after deduction of any state and/or local
premium taxes, leaves the balance equal to the sum of:
(a) the mortality charges not previously made for the grace period; and
(b) the mortality charges for the first two monthly dates on or after the date
of reinstatement.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required premium
is paid, if later. The face amount will be the same as it was at the end of the
grace period. The contract debt will be equal to the contract debt at the end of
the grace period. The contract fund as of the date of reinstatement will be
equal to the amount paid to reinstate the contract, minus any applicable
deductions for state and/or local premium taxes, minus the charges in (a) above,
and plus the contract debt. And we will start to make monthly charges and
credits again as of the first Monthly Date on or after the date of
reinstatement.
II-17
Exhibit A(5)(i)
SEPARATE ACCOUNT
The Account.--The word account, where we use it in this contract without
qualification, means the Pruco Life Single Premium Variable Life Account. This
is a unit investment trust registered with the SEC under the investment Company
Act of 1940. It is also subject to the laws of New Jersey and New York. We own
the assets of the account; we keep them separate from the assets of our general
investment account. We established the account to support variable life
insurance contracts.
Subaccounts.--The account has several subaccounts. We list them on the Contract
Data page(s). You determine, using percentages, how invested premium amounts
will be allocated among the subaccounts. You may choose to allocate nothing to a
particular subaccount. But any allocation you make must be at least 10%; you may
not choose a fractional percent.
Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percent that is not a whole number.
You may change the allocation for additional invested premium amounts at any
time if the contract is not in default To do so, you must notify us in writing
in a form that meets our needs. The change will take effect on the date we
receive your notice at our Service Office.
Transfers Among Subaccounts and the Fixed Account.--You may transfer amounts
among subaccounts and to the fixed account as often as four times in a contract
year if the contract is not in default. You may transfer amounts from the fixed
account to the subaccounts only once in each contract year and only during the
contract month which begins on a contract anniversary. The maximum amount which
you may transfer out of the fixed account during any such contract month is the
greater of: (a) 25% of the amount in the fixed account; and (b) $2,500. To make
a transfer you must notify us in writing in a form that meets our needs. The
transfer will take effect on the date we receive your notice at our Service
Office.
The Fund.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
the account. We list these portfolios in the Contract Data pages.
Account Investments.--We use the assets of the account to buy shares in the
fund. Each subaccount is invested in a corresponding specific portfolio. Income
and realized and unrealized gains and losses from assets in each subaccount are
credited to, or charged against, the subaccount. This is without regard to
income, gains, or losses in our other investment accounts.
We will determine the value of the assets in the account at the end of each
business day. When we use the term business day, we mean a day when the New York
Stock Exchange is open for trading. We might need to know the value of an asset
on a day that is not a business day or on which trading in that asset does not
take place. In this case, we will use the value of that asset as of the end of
the last prior business day on which trading took place.
Example: If we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the account with a total value at least equal to
the amount of the investment amounts under contracts like this one. (See page
10.) To the extent those assets do not exceed this amount, we use them only to
support those contracts; we do not use those assets to support any other
business we conduct. We may use any excess over this amount in any way we
choose.
Change in Investment Policy.--A portfolio of the fund might make a material
change in its investment policy. No such change will take effect until approved
by the Superintendent of Insurance of New York. In that case, we will send you a
notice of the change.
Change of Fund.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show on the Contract Data page(s). But we would first
seek approval from the SEC and, where required, the insurance regulator where
this contract is delivered.
FIXED ACCOUNT
The Fixed Account.--In addition to allocating your invested premium amount to
one or more of the subaccounts described above, you may direct all or part of
your invested premium amount into the fixed account. The fixed account is funded
by the general account of Pruco Life. The fixed account is credited with
interest as described under Guaranteed Interest and Excess Interest on pages 10
and 11. As described above, you may also transfer amounts from the subaccounts
to the fixed account. Transfers from the fixed account to the
II-18
FIXED ACCOUNT (Continued)
subaccounts may be made only with the consent of and to the extent allowed by
the Company.
Right to Transfer.--You may at any time transfer that portion of your contract
fund allocated to one or more of the subaccounts into the fixed account. The
fixed account earns a fixed rate of interest as described on page 10.
INSURANCE AMOUNT AND CONTRACT FUND
Insurance Amount.--The insurance amount at any time is the greater of (1) the
face amount which we show on page 3, and (2) the contract fund times the
attained age factor that applies. We show the attained age factors on page 18.
Contract Fund.--On the contract date the contract fund is equal to the invested
premium amounts received, (see below), minus any of the charges described in
items (f) through (i) below which may have been due on that date. On any day
after that the contract fund is equal to what it was on the previous day, plus
any invested premium amounts received, plus these items:
(a) any increase due to investment results in the value of the subaccounts to
which that portion of the contract fund that is in the investment amount is
allocated; (we explain investment amount below); and
(b) interest at the rates shown below on that portion of the contract fund that
is equal to any contract loan; and
(c) guaranteed interest at 3% on that portion of the contract fund that is in
the fixed account; and
(d) any excess interest on that portion of the contract fund that is in the
fixed account. (See page 11.)
Minus these items:
(e) any decrease due to investment results in the value of the subaccounts to
which that portion of the contract fund that is in the investment amount is
allocated;
(f) a charge against the investment amount at a rate of .00245475% a day (.90%
a year) for mortality and expense risks that we assume;
(g) a charge against the investment amount at a rate of .00095723% a day (.35%
a year) for the cost of administering the contract;
(h) any amount charged against the Contract Fund for Federal or State income
taxes;
(i) a charge for the cost of expected mortality;
We describe under Reinstatement on page 8 what the contract fund will be equal
to on any reinstatement date.
Invested Premium Amount.--This is the portion of each premium paid that we add
to the contract fund. It is equal to the premium paid, minus any applicable
deduction for state and/or local premium taxes.
Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment return. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate invested premium amounts;
(2) whether or not you transfer amounts among subaccounts; (3) the investment
performance of the subaccounts to which amounts are allocated or transferred;
(4) the amount and timing of any additional premium payments you make; and (5)
whether or not you take any loan. The account, subaccounts and account
investments are described on page 9.
The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund equal to any contract loan, minus the portion of
the contract fund that is in the fixed account.
Interest Credit.--On the portion of the contract fund equal to any contract
loan: During each contract year we will use a monthly rate that is equivalent to
an effective annual rate of 5 1/2% on the part of the contract fund equal to the
first amount you borrow in each contract year up to the excess of the target
loan amount over any existing loan. Interest due but not paid on any loan amount
eligible for the 5 1/2% crediting rate will become part of the loan and will
also be credited with interest at 5 1/2%.
For any part of the contract fund equal to the loan amount not eligible for the
5 1/2% crediting rate as described above, we will use a monthly rate that is
equivalent to an effective annual rate of not less than 4%.
On each contract anniversary, we will transfer the part of the contract fund
equal to any contract loan (up to the target loan amount) not eligible for the
5 1/2% crediting rate to the portion of the contract fund eligible for the
5 1/2% crediting rate.
Target loan amount means an amount equal to 10% of the initial premium for each
completed contract year since the contract date.
Example: Suppose the initial premium is $20,000 and the loan value is enough to
provide the amounts stated here. The target loan amount in the second contract
year is $2,000 (10% of $20,000). In that year you borrow $1,000. Since it is the
first amount you have borrowed, we will
II-19
SEPARATE ACCOUNT
The Account.--The word account, where we use it in this contract without
qualification, means the Pruco Life Single Premium Variable Life Account. This
is a unit investment trust registered with the SEC under the Investment Company
Act of 1940. It is also subject to the laws of New Jersey. We own the assets of
the account: we keep them separate from the assets of our general investment
account. We established the account to support variable life insurance
contracts. We guarantee that the expense and mortality results of the Account
will not adversely affect the dollar amounts of value, benefits or payments
under this contract.
Subaccounts.--The account has several subaccounts. We list them on the Contract
Data page(s). You determine, using percentages, how invested premium amounts
will be allocated among the subaccounts. You may choose to allocate nothing to a
particular subaccount. But any allocation you make must be at least 10%: you may
not choose a fractional percent.
Example: You may choose a percentage of 0, or 100 or 10, 11, 12, and so on, up
to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or
any percent that is not a whole number.
You may change the allocation for additional invested premium amounts at any
time if the contract is not in default. To do so, you must notify us in writing
in a form that meets our needs. The change will take effect on the date we
receive your notice at our Service Office.
Transfers Among Subaccounts and the Fixed Account.--You may transfer amounts
among subaccounts and to the fixed account as often as four times in a contract
year, if the contract is not in default. In addition, at any time in the first
two contract years, the entire amount in the subaccounts may be transferred to
the Fixed Account. Transfers out of the fixed account to the subaccounts will be
allowed only with the Company's consent. To do so, you must notify us in writing
in a form that meets our needs. The transfer will take effect on the date we
receive your notice at our Service Office.
The Fund.--The word fund, where we use it in this contract without
qualification, means the fund we identify in the Contract Data pages. The fund
is registered with the SEC under the Investment Company Act of 1940 as an
open-end diversified management investment company. The fund has several
portfolios; there is a portfolio that corresponds to each of the subaccounts of
the account. We list these portfolios in the Contract Data pages.
Account Investments.--We use the assets of the account to buy shares in the
fund. Each subaccount is invested in a corresponding specific portfolio. Income
and realized and unrealized gains and losses from assets in each subaccount are
credited to, or charged against, the subaccount. This is without regard to
income, gains, or losses in our other investment accounts.
We will determine the value of the assets in the account at the end of each
business day. When we use the term business day, we mean a day when the New York
Stock Exchange is open for trading. We might need to know the value of an asset
on a day that is not a business day or on which trading in that asset does not
take place. In this case, we will use the value of that asset as of the end of
the last prior business day on which trading took place.
Example: If we need to know the value of an asset on a Sunday, we will normally
use the value of the asset as of the end of business on Friday.
We will always keep assets in the account with a total value at least equal to
the amount of the investment amounts under contracts like this one. (See page
10.) To the extent those assets do not exceed this amount, we use them only
to support those contracts: we do not use those assets to support any other
business we conduct. We may use any excess over this amount in any way we
choose.
Change in Investment Policy.--A portfolio of the fund might make a material
change in its investment policy. In that case, we will send you a notice of the
change.
Change of Fund.--A portfolio might, in our judgment, become unsuitable for
investment by a subaccount. This might happen because of a change in investment
policy, or a change in the laws or regulations, or because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the fund, or to invest in a
fund other than the one we show on the Contract Data page(s). But we would first
seek approval from the SEC and, where required, the insurance regulator where
this contract is delivered.
FIXED ACCOUNT
The Fixed Account.--In addition to allocating your invested premium amount to
one or more of the subaccounts described above, you may direct all or part of
your invested premium amount into the fixed account. The fixed account is funded
by the general account of Pruco Life. The fixed account is credited with
interest as described under Guaranteed Interest and Excess Interest on pages 10
and 11. As described above, you may also transfer amounts from the subaccounts
to the fixed account. Transfers from the fixed account to the subaccounts may be
made only with the consent of and to the extent allowed by the Company.
Right to Transfer.--You may at any time transfer that portion of your contract
fund allocated to one or more of the subaccounts into the fixed account. The
fixed account earns a fixed rate of interest as described on page 10.
II-20
INSURANCE AMOUNT AND CONTRACT FUND (Continue)
credit interest on that part of the contract fund equal to $1,000 at a monthly
rate equivalent to an effective annual rate of 5 1/2%. If you borrow an
additional amount in that contract year, we will credit interest on that part of
the contract fund equal to the additional loan at a monthly rate equivalent to
an effective annual rate of not less than 4%. In the next contract year your
target loan amount would be $4,000 ($2,000 for each of the two completed
contract years since the Contract Date).
Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.
Excess Interest.--Excess interest on that portion of the contract fund in the
fixed account may be credited in addition to the 3% guaranteed interest rate.
The rate of any excess interest is not guaranteed. It will be determined from
time to time and will continue thereafter until a new rate is determined. We may
use different rates of excess interest for different portions of the contract
fund that are in the fixed account.
Mortality Charge.--At the beginning of each contract month we will deduct a
mortality charge from the contract fund. The maximum charge we can deduct is
determined by applying to the coverage amount a monthly rate determined as
indicated in the Basis of Computation. The coverage amount is the difference
between the insurance amount and the contract fund.
We may deduct a lower monthly charge than we describe above. The actual monthly
mortality charges we deduct are based on our expectations as to future mortality
experience. At least once every five years, but not more often than once a year,
we will consider the need to change the basis for the charges. We will make such
a change only if we do so for all contracts like this one dated in the same year
as this one.
Where required, we have given the insurance regulator where this contract is
delivered, a detailed description of our method for determining mortality
charges.
CASH VALUE OPTION
Cash Value Option.--You may surrender this contract for its net cash value. To
do so, you must ask us in writing and in a form that meets our needs. You must
also send the contract to us.
As of any date the net cash value is the cash value minus any contract debt.
(See page 12.) The cash value is equal to the contract fund minus any surrender
charge that applies.
We will usually pay any net cash value within 7 days after we receive your
request and the contract at our Service Office.
But we have the right to defer paying that portion of the payment to be taken
from the subaccounts if (1) the New York Stock Exchange is closed; or (2) the
SEC requires that trading be restricted or declares an emergency; or (3) the SEC
lets us defer payments to protect our contract owners.
We also reserve the right to postpone paying any cash value or withdrawal from
the fixed account for up to six months. If we do so for more than 10 days, we
will pay interest at the rate of at least 3% a year.
Surrender Charge.--For each of the first six contract years the surrender charge
is the contract fund times the surrender factor that applies. We show the
surrender factors below but the surrender charge will not exceed 9% of the
initial premium. For the seventh and later contract years there is no surrender
charge.
- --------------------------------------------------------------------------------
TABLE OF SURRENDER FACTORS
- --------------------------------------------------------------------------------
Contract Surrender Contract Surrender
Year Factor Year Factor
- --------------------------------------------------------------------------------
1 .09 5 .05
2 .08 6 .04
3 .07 7 and later .00
4 .06
- --------------------------------------------------------------------------------
II-21
Applicability.--These provisions apply to proceeds arising from the Insured's
death and payable in one sum to a Payee who is a beneficiary. They do not apply
to any periodic payment.
Interest on Proceeds.--We will hold the proceeds at interest under Option 3 of
the Settlement Options provision. The Payee may withdraw the residue. We will
pay it promptly on request. We will pay interest annually unless we agree to pay
it more often. We have the right to pay the residue in one sum after one year if
(1) the Payee is not a natural person who will be paid in his or her own right;
(2) the Payee will be paid as assignee; or (3) the original amount we hold under
Option 3 for the Payee is less than $1,000.
Settlement at Payee's Death.--If the Payee dies and leaves an Option 3 residue,
we will honor any contingent payee provision then in effect. If there is none,
here is what we will do. We will look to the beneficiary designation of the
contract; we will see what other beneficiary(ies), if any, would have been
entitled to the portion of the proceeds that produced the Option 3 residue if
the Insured had not died until immediately after the Payee died. Then we will
pay the residue in one sum to such other beneficiary(ies), in accord with that
designation. But if, as stated in that designation, payment would be due the
estate of someone else, we will instead pay the estate of the Payee.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. Jane was living when the Insured died. Jane later died
without having chosen an option or naming someone other than Paul and John as
contingent payee. If Paul and John are living at Jane's death we owe them the
residue. If only one of them is living then, and if the contract called for
payment to the survivor of them, we owe him the residue. If neither of them is
living then, we owe Jane's estate.
Spendthrift and Creditor.--A beneficiary or contingent payee may not, at or
after the Insured's death, assign, transfer, or encumber any benefit payable. To
the extent allowed by law, the benefits will not be subject to the claims of any
creditor of any beneficiary or contingent payee.
ENDORSEMENTS
(Only we can endorse this contract.)
BASIS OF COMPUTATION
Mortality Table Described.--We base premiums and values to which we refer in
this contract on the Insured's issue age and sex and on the length of time since
the contract date. We use (1) the Commissioners 1980 Standard Ordinary Mortality
Table; and (2) continuous functions based on age last birthday.
Minimum Legal Values.--The cash, loan and other values in this contract are at
least as large as those set by law where it is delivered. Where required, we
have given the insurance regulation a detailed statement of how we compute
values and benefits.
Pruco Life Insurance Company of New Jersey,
By /s/ Isabelle L. Kirchner
Secretary
II-22
Exhibit A(5)(n)
INSURANCE AMOUNT AND CONTRACT FUND
Insurance Amount--The insurance amount at any time is the greater of (1) the
face amount which we show on page 3, and (2) the contract fund times the
attained age factor that applies. We show the attained age factors on page 18.
Contract Fund.--On the contract date the contract fund is equal to the invested
premium amounts received, (see below), minus any of the charges described in
items (f) through (i) below which may have been due on that date. On any day
after that the contract fund is equal to what it was on the previous day, plus
any invested premium amounts received, plus these items:
(a) any increase due to investment results in the value of the subaccounts
to which that portion of the contract fund that is in the investment amount
is allocated: (we explain investment amount below); and
(b) interest at the rates shown below on that portion of the contract fund
that is equal to any contract loan; and
(c) guaranteed interest at 3% on that portion of the contract fund that is
in the fixed account; and
(d) any excess interest on that portion of the contract fund that is in the
fixed account. (See page 11.)
Minus these items:
(e) any decrease due to investment results in the value of the subaccounts to
which that portion of the contract fund that is in the investment amount is
allocated;
(f) a charge against the investment amount at a rate of .00245475% a day (.90% a
year) for mortality and expense risks that we assume;
(g) a charge against the investment amount at a rate of .00095723% a day (.35% a
year) for the cost of administering the contract;
(h) any amount charged against the Contract Fund for Federal or State
income taxes;
(i) a charge for the cost of expected mortality; and
(j) any fees we charge for additional reports.
We describe under Reinstatement on page 8 what the contract fund will be equal
to on any reinstatement date.
Invested Premium Amount.--This is the portion of each premium paid that we add
to the contract fund. It is equal to the premium paid, minus any applicable
deduction for state and/for local premium taxes.
Investment Amount.--The investment amount for this contract is the amount we use
to compute the investment return. The investment amount is allocated among the
subaccounts. The amount of the investment amount and its allocation to
subaccounts depend on (1) how you choose to allocate invested premium amounts;
(2) whether or not you transfer amounts among subaccounts; (3) the investment
performance of the subaccounts to which amounts are allocated or transferred;
(4) the amount and timing of any additional premium payments you make; and (5)
whether or not you take any loan. The account, subaccounts, and account
investments are described on page 9.
The investment amount at any time is equal to the contract fund, minus the
portion of the contract fund equal to any contract loan, minus the portion of
the contract fund that is in the fixed account.
Interest Credit.--On the portion of the contract fund equal to any contract
loan: During each contract year we will use a monthly rate that is equivalent to
an effective annual rate of 5 1/2% on the part of the contract fund equal to the
first amount you borrow in each contract year up to the excess of the target
loan amount over any existing loan. Interest due but not paid on any loan amount
eligible for the 5 1/2% crediting rate will become part of the loan and will
also be credited with interest at 5 1/2%.
For any part of the contract fund equal to the loan amount not eligible for the
5 1/2% crediting rate as described above we will use a monthly rate that is
equivalent to an effective annual rate of not less than 4%.
On each contract anniversary, we will transfer the part of the contract fund
equal to any contract loan (up to the target loan amount) not eligible for the
5 1/2% crediting rate to the portion of the contract fund eligible for the
5 1/2% crediting rate.
Target loan amount means an amount equal to 10% of the initial premium for each
completed contract year since the contract date.
Example: Suppose the initial premium is $20,000 and the loan value is enough to
provide the amounts stated here. The target loan amount in the second contract
year is $2,000 (10% of $20,000). In that year you borrow $1000. Since it is the
first amount you have borrowed, we will credit interest on that part of the
contract fund equal to $1,000 at a monthly rate equivalent to an effective
annual rate of 5 1/2%. If you borrow an additional amount in that contract year,
we will credit interest on that part of the contract fund equal to the
additional loan at a monthly rate equivalent to an effective annual rate of not
less than 4%. In the next contract year your target loan amount would be $4,000
($2,000 for each of the two completed contract years since the Contract Date).
Guaranteed Interest.--The guaranteed interest rate credited on that portion of
the contract fund in the fixed account is an effective rate of 3% a year.
II-11
Exhibit A(5)(o)
Pruco Life Insurance Company of New Jersey
Newark, New Jersey
A Stock Company Subsidiary of The Prudential Insurance Company of America
================================================================================
Insured Contract Number
Contract Date
Face Amount
Agency
================================================================================
We will pay the beneficiary the proceeds of this contract promptly if we receive
due proof that the Insured died. We make this promise subject to all the
provisions of the contract.
The cash value may increase or decrease daily depending on the payment of
premiums, the investment experience of the separate account and the level of
mortality charges made. There is no guaranteed minimum. The Death Benefit will
vary in amount and may vary in duration depending upon the payment of premiums,
the investment experience of the separate account and the level of mortality
charges made.
The Death Benefit will be the insurance amount which is the greater of (1) the
face amount we show above, and (2) the contract fund times the attained age
factor that applies, if the contract is not in default and if there is no
contract debt.
Please read this contract with care. A guide to its contents is on the last page
before the back cover. A summary is on page 5. If there is ever a question about
it, or if there is a claim, just see a Company representative or get in touch
with one of our offices.
Right to Cancel Contract.--You may return this contract to us within (1) 10 days
after you get it, or (2) 45 days after Part 1 of the application was signed, or
(3) 10 days after we mail or deliver the Notice of Withdrawal Right, whichever
is latest. All you have to do is take the contract or mail it to one of our
offices or to the representative who sold it to you. It will be canceled from
the start and we will give back your money within ten days after we receive the
contract.
Signed for Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
/s/ ISABELLE L. KIRCHNER /s/ [ILLEGIBLE]
Secretary President
Modified Single Premium Variable Life Insurance Policy with Limited Premium
Flexibility. Initial premium, with additional premiums payable during Insured's
lifetime as stated in the contract. See Additional Premiums, page 8. Benefits
reflect premium payments, investment results and mortality charges. Insurance
payable only upon death. Non-participating.
II-12
Exhibit A(5) (p)
----------------
GENERAL PROVISIONS (Continued)
Misstatement of Age or Sex.--If the Insured's stated age or sex or both are not
correct, we will adjust each benefit and any amount to be paid to reflect the
correct age and sex. Where required, we have given the insurance regulator a
detailed statement of how we will make these adjustments.
Incontestability.--Except for default, we will not contest this contract after
it has been in force during the Insured's lifetime for two years from the issue
date.
Assignment.--We will not be deemed to know of an assignment unless we receive
it, or a copy of it, at our Service Office. We are not obliged to see that an
assignment is valid or sufficient. This contract may not be assigned to another
insurance company without our consent.
Annual Report.--Once each contract year after the first we will send you a
report. It will show (1) the insurance amount; (2) the amount of the contract
fund; (3) the investment amount in each subaccount; (4) the amount in the fixed
account; (5) the net cash value; (6) the premiums paid, interest credited and
monthly charges made during the year; (7) the interest rate that will be
credited until further notice to the amount in the Fixed Account; (8) any
additional premium which you have the right to pay; and (9) any outstanding
contract debt. The report will include any other data that may be currently
required where this contract is delivered. You may ask for a report like this at
any time. But, except for the report we send you once a year, we have the right
to charge a fee for each report.
Payment of Death Claim.--If we settle this contract in one sum as a death claim,
we will usually pay the proceeds within 7 days after we receive at our Service
Office proof of death and any other information we need to pay the claim. But we
have the right to defer paying any portion of the proceeds greater than the face
amount shown on page 3 if (1) the New York Stock Exchange is closed; or (2) the
SEC requires that trading be restricted or declares an emergency; or (3) the SEC
lets us defer payment to protect our contract owners.
BENEFICIARY
You may designate or change a beneficiary. Your request must be in writing and
in a form which meets our needs. It will take effect only when we file it at our
Service Office; this will be after you send the contract to us to be endorsed,
if we ask you to do so. Then any previous beneficiary's interest will end as of
the date of the request. It will end then even if the Insured is not living when
we file the request. Any beneficiary's interest is subject to the rights of any
assignee of whom we know.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:
1. One who survives the Insured will have the right to be paid only if no one in
a prior class survives the Insured.
2. One who has the right to be paid will be the only one paid if no one else in
the same class survives the Insured.
3. Two or more in the same class who have the right to be paid will be paid in
equal shares.
4. If none survives the Insured, we will pay in one sum to the Insured's estate.
Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries
are Paul and John. We owe Jane the proceeds if she is living at the Insured's
death. We owe Paul and John the proceeds if they are living then but Jane is
not. But if only one of them is living, we owe him the proceeds. If none of them
is living we owe the Insured's estate.
Beneficiaries who do not have a right to be paid under these terms may still
have a right to be paid under the Automatic Mode of Settlement.
Before we make a payment, we have the right to decide what proof we need of the
identity, age or any other facts about any persons designated as beneficiaries.
If beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
Page 7 (VFL--85) - N
II-13
Exhibit A(5)(q)
PREMIUMS
Initial Premium.--The initial premium, which we show on page 3, is due on the
contract date. It may be paid at our Service Office or to one of our
representatives. If we are asked to do so, we will give a signed receipt. The
initial premium, minus any applicable deductions for state and/or local premium
taxes, minus the mortality charge deducted on the contract date becomes the
contract fund. (See page 10.)
Additional Premiums.--Additional premiums may be paid as we describe below:
1. An additional premium may be paid if (1) it is permitted according to the
definition of life insurance contained in the applicable federal tax law, and
(2) it does not result in an increase in the insurance amount. If you ask us to
do so, we will let you know the amount of any additional premium allowed and
when it can be paid. We will also include that information as part of the annual
report. (See page 7.)
2. If the contract goes into default, an additional premium sufficient to bring
the contract out of default may be paid during the grace period.
Additional premiums paid in accord with 1 or 2 above minus any applicable
deductions for state and/or local premium taxes, will be added to the contract
fund as of the date of receipt at our Service Office but will not increase the
insurance amount.
Premium Taxes.--State and local taxes on premiums paid vary according to
jurisdiction. We will deduct from each premium paid the appropriate amount
applicable for these taxes.
Default.--If on any monthly date the net cash value equals zero, this contract
is in default. In this case we will tell you what premium payment is needed to
bring the contract out of default.
Grace Period.--We grant 61 days of grace from any Monthly Date on which the
contract goes into default. We will send you a notice of default and state the
amount to pay that will bring the contract out of default. This amount is the
amount that, after deduction of any state and/or local premium taxes, is
sufficient to pay the mortality charges (See page 11.) for the Monthly Date on
which the contract goes into default and the next Monthly Date. If that amount
has not been paid by the end of the grace period the contract will end and have
no value.
The Insured might die while the contract is in default during its days of grace.
If so, the proceeds will be reduced by the amount that, after deduction of any
state and/or local premium taxes, is sufficient to pay the mortality charges
which have not yet been deducted for Monthly Dates prior to the date on which
death occurred.
Reinstatement.--if this contract ends as we describe under Grace Period, you may
reinstate it, if all these conditions are met:
1. No more than three years must have elapsed since the date of default.
2. You must give us any facts we need to satisfy us that the Insured is
insurable for the contract.
3. We must be paid an amount that, after deduction of any state and/or local
premium taxes, leaves the balance equal to the sum of:
(a) the mortality charges not previously made for the grace period: and
(b) the mortality charges for the first two monthly dates on or after the date
of reinstatement.
If we approve the reinstatement, these statements apply. The date of
reinstatement will be the date of your request or the date the required premium
is paid, if later. The face amount will be the same as it was at the end of the
grace period. The contract debt will be equal to the contract debt at the end of
the grace period. The contract fund as of the date of reinstatement will be
equal to the amount paid to reinstate the contract, minus any applicable
deductions for state and/or local premium taxes, minus the charges in (a) above,
plus the contract debt, and plus a refund of that part of any surrender charge
paid at the time of default which would be charged if the contract were
surrendered immediately after reinstatement. And we will start to make monthly
charges and credits again as of the first Monthly Date on or after the date of
reinstatement.
II-14
Exhibit A(5)(r)
Loans (Continued)
We will allocate loans and repayments among the subaccounts and the fixed
account in proportion to the amount in each as of the date of loan or repayment.
Only the investment amount will reflect the investment results of the
subaccounts. Since the amount you borrow is removed from the investment amount
and/or the fixed account, a loan may have a permanent effect on the net cash
value of this contract. The longer the loan is outstanding the greater this
effect is likely to be.
Excess Contract Debt.--If, on a monthly date, contract debt is ever equal to or
more than the cash value, all the contract's benefits will end 61 days after
that monthly date. We will mail a notice to you and any assignee of whom we
know. Also we may send a notice to the Insured's last known-address. In the
notice we will state the amount that, if paid to us, will reduce the contract
debt enough to keep the contract's benefits from ending for a limited time.
Postponement of Loan.--We will usually make a loan within 7 days after we
receive your request at our Service Office. But we have the right to defer
making the loan if (1) the New York Stock Exchange is closed; or (2) the SEC
requires that trading be restricted or declares an emergency. We also reserve
the right to postpone paying you the proceeds of a loan for up to six months
unless it will be used to pay premiums on this or other contracts with us.
II-15
Exhibit A(10)(a)
II-57
<PAGE>
Prudential
- ----------
- --------------------------------------------------------------------------------
Application for Life Insurance
__________________________
____________________
Proposed Insured
__________________________
- --------------------------------------------------------------------------------
Submitted By
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
____________________ ____________________ ____________________ ____________________ ____________________
Name & Title Contract No. Agcy. No./Rep. Init. Office Code Detached Office
_____%
Credit ____________________ ____________________ ____________________ ____________________ ____________________
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
|_| Debit Ord. |_| New Acct. |_| Existing Acct. No. of Apps.______ Fam. Acct. No.
-----------------------------------------------------------------------------------------------------
|_| Reg. Ord. Premium Quoted/Scheduled Premium Payment $________________________ (According to mode selected)
-----------------------------------------------------------------------------------------------------
|_| Pruco FOR FIELD OFFICE STAFF TO COMPLETE: Control No. __________ County Code __________
-----------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
II-58
- ---------
ORD 84376 82 NEW JERSEY
- ---------
<PAGE>
Part 1 Application to |_| The Prudential Insurance Company of America No.
|_| Pruco Life Insurance Company*
|_| Pruco Life Insurance Company of New Jersey* -------
* A Subsidiary of the Prudential Insurance Company
of America
- --------------------------------------------------------------------------------
1a. Proposed Insured's name - first, initial, last (Print)
- --------------------------------------------------------------------------------
lb. Sex 2a. Date of birth 2b. Age 2c. Place of birth
|_| M |_| F Mo. | Day | Yr.
- --------------------------------------------------------------------------------
3. |_| Single |_| Married |_| Widowed |_| Separated |_| Divorced
- --------------------------------------------------------------------------------
4. Occupation(s)
- --------------------------------------------------------------------------------
5. Address for mail
No. Street City State Zip
- --------------------------------------------------------------------------------
6a. Kind of policy 6b. Initial amount
$
- --------------------------------------------------------------------------------
7. Accidental death coverage initial amount $
- --------------------------------------------------------------------------------
8. Beneficiary: (Include name, age and relationship.)
a. Primary (Class 1): b. Contingent (Class 2) if any:
---------------------------------------------------------------------------
(For insurance payable upon death of (1) the Insured, and (2) an insured
child after the death of the Insured if there is no insured spouse.)
- --------------------------------------------------------------------------------
9. List all life insurance on proposed Insured. (If NONE, so state.)
Initial Yr. Kind Medical
Company amt. issued (Indiv., Group) Yes No
|_| |_|
---------------------------------------------------------------------------
|_| |_|
---------------------------------------------------------------------------
|_| |_|
---------------------------------------------------------------------------
|_| |_|
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
10. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)
<S> <C> <C> <C> <C> <C> <C>
Relationship to Date of Birth Total life insurance
Name - first, initial, last Sex proposed Insured Mo. | Day | Yr. Age Place of birth in all companies
Spouse
a. $
- ------------------------------------------------------------------------------------------------------------------------------------
b. $
- ------------------------------------------------------------------------------------------------------------------------------------
c. $
- ------------------------------------------------------------------------------------------------------------------------------------
d. $
- ------------------------------------------------------------------------------------------------------------------------------------
e. $
- ------------------------------------------------------------------------------------------------------------------------------------
f. $
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
11. Supplementary benefits:
a. For proposed insured
Type and duration of benefit Amount
$
---------------------------------------------------------------------------
$
---------------------------------------------------------------------------
$
---------------------------------------------------------------------------
|_| Option to Purchase Additional Ins. $
---------------------------------------------------------------------------
b. For spouse, children, Applicant for AWP
Type and duration of benefit Amount
$
---------------------------------------------------------------------------
$
---------------------------------------------------------------------------
$
---------------------------------------------------------------------------
|_| Applicant's Waiver of Premium benefit
- --------------------------------------------------------------------------------
12. State any special request
- --------------------------------------------------------------------------------
13. Will this insurance replace or change any existing insurance Yes No
or annuity in any company on any person named in 1a or 10?
If "Yes", give their names, name of company, plan, amount and |_| |_|
policy numbers.
- --------------------------------------------------------------------------------
14. Is anyone applying for, or trying to reinstate, life or Yes No
health insurance on any person named in 1a or 10 in this
or any company? If "Yes", give details. |_| |_|
- --------------------------------------------------------------------------------
15. Does any person named in 1a or 10 plan to live or travel outside Yes No
the United States and Canada within the next 12 months? If
"Yes", give details. |_| |_|
- --------------------------------------------------------------------------------
16. Has any person named in 1a or 10 operated or had any Yes No
duties aboard an aircraft, glider, balloon, or like device,
within the last 2 years, or does any such person have any plans |_| |_|
to do so in the future? If "Yes", complete Aviation Questionnaire.
- --------------------------------------------------------------------------------
17. Has any person named in 1a or 10, within the last 12 months: Yes No
a. been treated by a doctor for or had known heart attack,
stoke or cancer other than of the skin?...................... |_| |_|
b. had an electrocardiogram for any physical complaint, or
taken medication for high blood pressure?.................... |_| |_|
- --------------------------------------------------------------------------------
18. Premiums payable |_| Ann. |_| Quar. |_| Mon. |_| Pay. Budg.
|_| Pru-Matic |_| Gov't. Allot.
- --------------------------------------------------------------------------------
19. Amount paid $______ |_| None (Must be "None" if either 17a or 17b
is answered "Yes".)
- --------------------------------------------------------------------------------
20. Is a medical examination to be made on
a. the proposed Insured?.................................. Yes |_| No |_|
b. spouse (if proposed for coverage)?..................... Yes |_| No |_|
- --------------------------------------------------------------------------------
21. If 20a or 20b is "Yes", is it agreed that no insurance will Yes No
take effect on anyone proposed for coverage until the person(s)
indicated in 20 have been examined, even if 19 shows that an |_| |_|
amount has been paid?
- --------------------------------------------------------------------------------
22. Changes made by the Company.
- --------------------------------------------------------------------------------
- ------------
ORD 84376-82 NEW JERSEY
- ------------
II-59
<PAGE>
Continuation of Part 1 of Application
Complete on all persons named in 1a and 10 if any one of them can have insurance
on a non-medical basis.
- --------------------------------------------------------------------------------
23. Height and weight of:
a. Proposed Insured Ht._____ Wt._____ b. Spouse Ht._____ Wt._____
c. Applicant for AWP Ht._____ Wt._____
Has the weight changed more than 10 pounds in the past year? Yes |_| No |_|
If "Yes", give details in 30.
- --------------------------------------------------------------------------------
24. Has the proposed Insured or spouse ever smoked?
a. Proposed Insured Yes |_| No |_| b. Spouse Yes |_| No |_|
If "Yes", give date(s) last smoked:
Cigarettes Cigars Pipe
Proposed Insured Mo.____ Yr.____ Mo.____ Yr.____ Mo.____ Yr.____
Spouse Mo.____ Yr.____ Mo.____ Yr.____ Mo.____ Yr.____
- --------------------------------------------------------------------------------
25. When was a doctor last consulted by:
a. Proposed Insured? b. Spouse? c. Applicant for AWP?
Mo.____ Yr.____ Mo.____ Yr.____ Mo.____ Yr.____
- --------------------------------------------------------------------------------
26. Is any person to be covered now being treated or taking medicine for any
condition or disease?..................................... Yes |_| No |_|
- --------------------------------------------------------------------------------
27. Has any person to be covered ever: Yes No
a. had any surgery or been advised to have surgery and
has not done so?.............................................. |_| |_|
b. been in a hospital, sanitarium or other institution for
observation, rest, diagnosis or treatment?.................... |_| |_|
c. regularly used or is any such person now using barbiturates
or amphetamines, marijuana or other hallucinatory drugs, or
heroin, opiates or other narcotics, except as prescribed by a
doctor?....................................................... |_| |_|
d. been treated or counseled for alcoholism?..................... |_| |_|
e. had life or health insurance declined, postponed, changed,
rated-up or withdrawn?........................................ |_| |_|
f. had life or health insurance canceled, or its renewal or
reinstatement refused?........................................ |_| |_|
- --------------------------------------------------------------------------------
28. Other than as shown above, in the past 5 years has any person Yes No
to be covered:
a. consulted or been attended or examined by any doctor or
other practitioner?........................................... |_| |_|
b. had electrocardiograms, X-rays for diagnosis or treatment,
or blood, urine, or other medical tests?...................... |_| |_|
c. made claim for or received benefits, compensation, or a
pension because of sickness or injury?........................ |_| |_|
- --------------------------------------------------------------------------------
29. Does any person to be covered now have a known sign of any physical
disorder, disease or defect not shown above? Yes |_| No |_|
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
29. What are the full details of the answer to 25 and to each part of 23 and 26 thru 29 which is answered "Yes"?
<S> <C> <C> <C> <C>
Full names and addresses of
Name & Question No. Illness or other reason Dates and duration of illness doctors and hospitals
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Those who signed below declare, to the best of their knowledge and belief, that
the statements in this application are complete and true.
When the Company gives a Temporary Insurance Agreement form, ORD 84376A-82 NEW
JERSEY, of the same date as this Part 1, coverage will start as shown in that
form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it
is accepted, and (3) the full first premium is paid while all persons to be
covered are living and their health remains as stated in Part 1. If all these
take place, coverage will start on the contract date. If the Company makes a
change as indicated in 22 it will be approved by acceptance of the contract. But
where the law requires written consent for any change in the application, such a
change can be made only if those who sign this form approve the change in
writing. No agent can make or change a contract, or waive any of the Company's
rights or needs.
OWNERSHIP: Unless otherwise asked for above, the owner of the contract will be
(1) the applicant if other than the proposed Insured, otherwise (2) the proposed
Insured. But this is subject to any automatic transfer of ownership stated in
the contract.
Signature of Proposed Insured (If Age 8 or over)
__________________________________________________________________
Signature of Applicant (If other than proposed Insured)
__________________________________________________________________
(If applicant is a firm or corporation, show that company's name)
By________________________________________________________________
(Signature and title of officer signing for that company)
Dated at________________________on___________,19____
(City/State)
Witness
____________________________________________________
(Licensed agent must witness where required by law)
- --------------------------------------------------------------------------------
- ------------
ORD 84376-82 NEW JERSEY
- ------------
II-60
<PAGE>
- --------------------------------------------------------------------------------
ACKNOWLEDGEMENT
I have received and read a copy of the IMPORTANT NOTICE ABOUT YOUR APPLICATION
FOR INSURANCE.
Date
_________________________19,_______
AUTHORIZATION For the Release of Information to:
|_| The Prudential Insurance Company of America
|_| Pruco Life Insurance Company
|_| Pruco Life Insurance Company of New Jersey
To: Any licensed physician, medical practitioner, hospital, clinic or like
facility, insurance company or the Medical Information Bureau, Inc. or other
organization, institution or person.
To determine eligibility for life insurance coverage, I authorize you to give
the Company checked above and, through it, to its reinsurers and the Medical
Information Bureau, any data or records you have about me or my mental or
physical health. This also applies to any child proposed for insurance in the
application.
This authorization is valid until two years after the effective date of any
contract issued in connection with this authorization. A photo of this form will
be as valid as the original. (The person who signs this form may have a copy of
it upon request.)
Signature of Proposed Insured (if age 15 or over) otherwise Applicant
____________________________________________________________________
Signature of Spouse (if proposed for coverage)
____________________________________________________________________
- ---------
ORD 84377 82 NEW JERSEY
- ---------
- --------------------------------------------------------------------------------
|_| The Prudential Insurance Company of America
|_| Pruco Life Insurance Company |_| Pruco Life Insurance Company of New Jersey
IMPORTANT NOTICE ABOUT YOUR APPLICATION FOR INSURANCE
-----------------------------------------------------
Before we can issue a policy we must first underwrite your application. This
means that we evaluate all the information necessary to determine if you qualify
for the insurance.
In addition to the information on the application, a medical examination may be
required. We also ask you to authorize any doctor, hospital or other
organization or person who has any data about you to give us any such
information.
We may ask for a report from a consumer reporting agency. These reports provide
information about a person's character, residence, activities, general
reputation, personal characteristics and mode of living. The agency may get this
information through interviews with friends, neighbors and associates. Any
person on whom we ask for a report has the right to ask to be interviewed. You
may also get a copy of the report from the consumer reporting agency which
completed it. An agency may keep the information it has about you and disclose
it to other persons. If you would like further information as to the nature and
scope of these reports, it will be provided upon request.
Any information which we obtain about you will be treated as confidential.
However, we may give this information, as necessary, to: your doctor, if we find
a serious health problem which you do not know about; persons conducting
mortality or morbidity studies; and affiliate companies for marketing purposes.
If you ask, we will describe any other circumstances when we may disclose
information about you without your prior authorization.
- ------------
ORD 84376-82 NEW JERSEY (Continued on reverse)
- ------------
- --------------------------------------------------------------------------------
|_| The Prudential Insurance Company of America
|_| Pruco Life Insurance Company*
|_| Pruco Life Insurance Company of New Jersey*
* A Subsidiary of The Prudential Insurance Company of America
TEMPORARY INSURANCE AGREEMENT
We, the Company, agree to provide temporary insurance as follows:
1. It will start on the latest of these dates: (a) the date of this agreement,
(b) the date of completion of all medical examinations agreed to, and (c)
any date asked for in the application.
2. This insurance is subject to the terms of the contract applied for.
3. The sum of all death benefits for any person who is to be covered by this
insurance will be the amount asked for on that person or $250,000,
whichever is less.
The temporary insurance will end:
1. When we issue a contract as applied for, it will replace the temporary
insurance.
2. When we issue a contract other than as applied for. It will replace the
temporary insurance if: (a) it is accepted on delivery (this includes
paying at the same time any excess of the correct first premium over the
amount shown below); and (b) the persons who are to be covered are living
when the contract is delivered. If the contract is not accepted on
delivery, the temporary insurance will end at once.
3. When we tell you that we rejected the application or when we tell you that
we will not consider it on a prepaid basis.
4. At the end of 60 days if the temporary insurance has not been ended as we
state in 1, 2 or 3.
(Continued on reverse)
- -------------
ORD 84376A-82 NEW JERSEY Printed in U.S.A.
- -------------
- --------------------------------------------------------------------------------
Names and addresses of three Friends or Business Associates:
1. Name_________________________________________________________________________
Address______________________________________________________________________
2. Name_________________________________________________________________________
Address______________________________________________________________________
- --------------------------------------------------------------------------------
II-61
<PAGE>
- --------------------------------------------------------------------------------
We may also make a brief report to the Medical Information Bureau (MIB) which
provides an information exchange for its member insurance companies. When you
apply for life or health insurance or submit a claim for benefits to any member
company, MIB will, on request, give that company the information in its file. If
you wish to know if there is an MIB report about you or if you question its
accuracy, you may contact MIB at Post Office Box 105, Essex Station, Boston, MA
02112, (617) 426-3660.
If you have any questions concerning any of the personal information which we
obtain or report, let us know. You have the right to see this information and to
correct, amend or delete any information which may be wrong. We will tell you
how to do this if you ask us.
If we are unable to issue the policy you requested, we will tell you and explain
the reasons.
Thank you for applying to us for insurance.
Corporate Offices, Newark, N.J.
These Regional Home Offices of The Prudential Insurance Company of America are
also Service Offices of Pruco Life Insurance Company. Asterisk (*) designates
Service Offices of Pruco Life Insurance Company of New Jersey.
Central Atlantic Home Office, Northeastern Home Office, Boston, Mass.*
Fort Washington, Pa. South-Central Home Office,
Eastern Home Office, South Jacksonville, Fla.
Plainfield, N.J.* Southwestern Home Office,
Mid-America Home Office, Chicago, Ill. Houston, Tex.
North Central Home Office, Western Home Office, Los Angeles, Calif.
Minneapolis, Minn.
- --------------------------------------------------------------------------------
We received $_____________ on ___________, 19_____ from _______________________.
This amount was paid when a life insurance application was signed, on the same
date, in which _________________________ is named as the proposed Insured.
This agreement is issued on the condition that any check, draft or other order
for the payment of money is good and can be collected. All checks must be drawn
only to the Company and not to any other party.
No change may be made in the terms and conditions of this form. No statement
which claims to make such a change will bind the Company.
Field Office Writing Representative (Agent)
________________________________ _____________________________________________
The Prudential Insurance Company of America
Pruco Life Insurance Company Pruco Life Insurance Company of New Jersey
Corporate Offices, Newark, N.J.
These Regional Home Offices of The Prudential Insurance Company of America are
also Service Offices of Pruco Life Insurance Company. Asterisk (*) designates
Service Offices of Pruco Life Insurance Company of New Jersey.
Central Atlantic Home Office, Northeastern Home Office, Boston, Mass.*
Fort Washington, Pa. South-Central Home Office,
Eastern Home Office, South Jacksonville, Fla.
Plainfield, N.J.* Southwestern Home Office,
Mid-America Home Office, Chicago, Ill. Houston, Tex.
North Central Home Office, Western Home Office, Los Angeles, Calif.
Minneapolis, Minn.
- --------------------------------------------------------------------------------
Note--Unless you get a contract, or your money back within eight weeks from the
date of this agreement, please notify the Company. Give the amount paid, date of
payment, and name of person to whom paid. (Locations are shown above.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. Name_________________________________________________________________________
Address______________________________________________________________________
Furnished by__________________________________________________________
(Name of Proposed Insured/Applicant)
Proposed Insured's Expiration Dates: Auto_____________ Homeowners_____________
- --------------------------------------------------------------------------------
II-62
<PAGE>
<TABLE>
<CAPTION>
AGENT'S SUPPLEMENTARY INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
1. Give current and last previous HOME and BUSINESS addresses.
<S> <C> <C> <C> <C> <C> <C> <C>
From To Employer No. Street City or Town State
Mo. Yr. Mo. Yr.
Home ________________Present________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
Bus. ________________Present________________________________________________________________________________________________________
____________________________________________________________________________________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
2. If an Investigative Consumer Report is necessary, is a direct interview desired?.............................. Yes |_| No |_|
- ------------------------------------------------------------------------------------------------------------------------------------
3. What is the total yearly income of: a. Proposed Insured? $________________ b. Spouse? $________________
- ------------------------------------------------------------------------------------------------------------------------------------
4. Does more than 50% of the proposed Insured's support come from someone else? Yes |_| No |_| If "Yes", give that person's:
Full name______________________________ Relationship____________________________ Amt. of Life ins. in force $________________
- ------------------------------------------------------------------------------------------------------------------------------------
5. Who is to pay the premium? (Check one) |_| Insured |_| Employer |_| Spouse |_| Parent |_| Other_____________________
- ------------------------------------------------------------------------------------------------------------------------------------
6. a. Did someone other than you suggest this insurance? Yes |_| No |_| If "Yes", state who and what prompted the request?
_______________________________________________________________________________________________________________________________
b. What was the primary source of the Sales Lead? (Check one) (1) |_| Policyholder Service (2) |_| Referred Lead
|_| Cold call
- ------------------------------------------------------------------------------------------------------------------------------------
7. What Sales Services did you use? (Check appropriate boxes)
a. |_| FACTOR 1 b. |_| FACTOR 2 c. |_| Other CPI d. |_| CNA e. |_| FNA f. |_| Business Security Analysis
g. |_| Employer's Advisory Service h. |_| Estate Conservation Service i. |_| Other________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
8. Complete if this application is for business insurance:
a. Is firm a: (1) |_| Sole Proprietorship (2) |_| Partnership (3) |_| Corporation
b. Is proposed Insured:
|_| Owner of firm (state_____________%) |_| Employee
c. Amount of business insurance in force and applied for in all companies on each officer or member of the firm.
Name Age Position Inforce Applied for
_______________________________________________________$__________________$___________
- ------------------------------------------------------------------------------------------------------------------------------------
9. Do you have, from any source, facts which you have not stated any place else in the application which indicate
that any person named in 1a or 10 of the application may: (Give details of "Yes" answers in "REMARKS".) Yes No
a. replace or change any current insurance or annuity in any company?........................................... |_| |_|
b. have in the last 3 years participated in hazardous sports (such as auto racing or parachuting), or have been
arrested for driving recklessly drunk or while intoxicated?.................................................. |_| |_|
c. Have frequently drunk to excess, illegally used habit forming drugs or have a record of indictment or
conviction of any crime?..................................................................................... |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
10. Has the last name of any person named in 1a or 10 of the application been changed in the last 5 years (marriage, Yes No
court order, etc.)? If "Yes", who, and what was your previous last name?_______________________________________ |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
11. Are the proposed Insured's and agent related? Yes |_| No |_| If "Yes", state relationship: |_| Self |_| Other____________
- ------------------------------------------------------------------------------------------------------------------------------------
12. a. Proposed Insured's telephone no.______________________________ b. Social Security no.________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
Complete 13 if proposed Insured is age 0-14
13. Family Name Date of Present Pending Family Name Date of Present Pending
details birth insurance Pru app.? details birth insurance Pru app.?
Father Brothers
Mother & Sisters
- ------------------------------------------------------------------------------------------------------------------------------------
Complete 14 and 15 if dependent children are proposed for coverage (Give details of "Yes" answers in "REMARK".)
14. Are any children named in 10 of the application: Yes No
a. foster children or children whose legal adoption has not yet been made final?................................ |_| |_|
b. living in a household other than the proposed Insured's or dependent on someone other than the proposed
Insured?..................................................................................................... |_| |_|
- ------------------------------------------------------------------------------------------------------------------------------------
15. Are there any other children less than 18 years of age who have not been named in 10 of the application?...... Yes |_| No |_|
- ------------------------------------------------------------------------------------------------------------------------------------
CERTIFICATION
I certify that (a) on this date I saw the proposed Insured and (b), except as stated in "REMARKS". I am not aware of any information
not shown in the answers to the questions in any Part of this application, that would adversely affect the eligibility,
acceptability or insurability of any person proposed for coverage. I recommend that the Company accept the risks proposed for
coverage.
Date Signature of Writing Representative (Agent) Mgr., Asst. Mgr. or Sales Mgr. must sign if present
when application signed
___________, 19___ ____________________________________________ ______________________________________________________________
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
REMARKS:
- ---------
ORD 84376 82
- ---------
II-63
Exhibit A(1O)(b)
II-64
<PAGE>
No.
------------------
Pruco Life Insurance Company of New Jersey
A Subsidiary of The Prudential Insurance Company of America
- --------------------------------------------------------------------------------
Supplement to the Application for:
|_| Flexible Premium Variable Life Insurance
|_| Single Pay Variable Annuity
in which_____________________________is named as the proposed insured/annuitant.
- --------------------------------------------------------------------------------
A. To be Completed for a11 Applicants:
YES NO
1. Did the applicant receive the current prospectus for the
contract checked above and the Pruco Life Series Fund,
Inc.? |_| |_|
2. Does the person who signs below understand that the contract
values may go up or down depending on the contract's
investment experience and that there is no minimum cash
value? |_| |_|
- --------------------------------------------------------------------------------
B. For Applicants for Flexible Premium Variable Life Insurance:
1. Does the applicant believe that this contract will meet
insurance needs and objectives? |_| |_|
2. Does the person who signs below understand that the death
benefit may go up or down depending on the contract's
investment experience and that there is no guaranteed
minimum death benefit? |_| |_|
- --------------------------------------------------------------------------------
C. Investment Allocations:
The net premium payment (purchase payment) is to be allocated to the
appropriate Pruco Life variable contract account for the contract checked
above as follows:
<TABLE>
<CAPTION>
Subaccount Allocation*
<S> <C> <C>
Money Market __________% (MMKT)
Bond __________% (BOND)
Common Stock __________% (CSTK)
Aggressively Managed Flexible __________% (AFLX)
Conservatively Managed Flexible __________% (CFLX)
Not available for { Zero Coupon Bond (1990) __________% (ZC9O)
Single Pay Variable { Zero Coupon Bond (1995) __________% (ZC95)
Annuity { Zero Coupon Bond (2000) __________% (ZCOO)
_______________________________ __________% ( )
Fixed Account __________% (FIXD)
100%
</TABLE>
* If any portion of a net premium payment (purchase payment) is allocated to
a particular subaccount, that portion must be at least 10% on the date the
allocation takes effect. All % allocations must be expressed in whole
numbers (e.g. 33% can be used but 33 1/3% cannot).
Date:________________ Signature of Applicant:________________________________
- --------------------------------------------------------------------------------
II-65
Exhibit A (10) (c)
Pruco Life Insurance Company of New Jersey No.
____________________
A Supplement to the Life Insurance Application for a variable contract in which
_____________________________ is named as the proposed Insured.
________________________________________________________________________________
I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I
ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT
THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S
INVESTMENT EXPERIENCE, BUT THE INSURANCE AMOUNT WILL NEVER BE LESS THAN THE FACE
AMOUNT AS LONG AS THE POLICY IS IN FORCE...................... YES [ ] NO [ ]
Note: Upon request, we will furnish illustrations of benefits, including death
benefits and cash values, for (a) the variable life insurance contract applied
for and (b) a fixed benefit life insurance contract for the same premium.
Date Signature of Applicant
__________________________,19____ __________________________________________
II-11
Exhibit A(11)
II-66
<PAGE>
XXX XXX XXX PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
PRUCO LIFE SERVICE OFFICE
XXXXXXXXXXXXXXXXXXXXX P.O. BOX 2925, PHOENIX, AZ 85062
XXXXXXXXXXXXXXXXXXXXX FOR INSURANCE SERVICE CONTACT YOUR
XXXXXXXXXXXXXXXXXXXXX REPRESENTATIVE.
XXXXXXXXXXXXXXXXXXXXX
X - XXXX (REGION - AGENCY CODE)
NOTICE OF WITHDRAWAL RIGHT
IN ORDER TO COMPLY WITH THE LAWS ADMINISTERED BY THE SECURITIES AND EXCHANGE
COMMISSION, WE ARE SENDING YOU THIS NOTICE. PLEASE READ IT CAREFULLY AND KEEP IT
WITH YOUR RECORDS.
YOU HAVE RECENTLY PURCHASED A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT
FROM PRUCO LIFE. THE BENEFITS OF THIS CONTRACT DEPEND ON THE INVESTMENT
EXPERIENCE OF THE MONEY MARKET, BOND, COMMON STOCK, AGGRESSIVELY MANAGED
FLEXIBLE, CONSERVATIVELY MANAGED FLEXIBLE AND ZERO COUPON BOND SUBACCOUNTS OF
PRUCO LIFE'S SINGLE PREMIUM VARIABLE LIFE ACCOUNT. THESE SUBACCOUNTS ARE
DESCRIBED IN THE PROSPECTUS THAT WAS GIVEN TO YOU AT THE TIME OF SALE.
YOU HAVE THE RIGHT TO EXAMINE AND CANCEL THIS CONTRACT. UPON ITS RETURN, YOU ARE
ENTITLED TO A REFUND OF ALL PREMIUMS PAID, PLUS OR MINUS ANY CHANGE DUE TO
INVESTMENT PERFORMANCE IN THE VALUE OF THE INVESTED PORTIONS OF SUCH PREMIUMS.
THE CANCELLATION DEADLINE IS THE LATEST OF:
1. 10 DAYS AFTER YOU HAVE RECEIVED THE CONTRACT.
2. 45 DAYS FROM THE DATE YOU COMPLETED PART 1 OF THE APPLICATION.
3. 10 DAYS FROM THE DATE OF DELIVERY OF THIS NOTICE.
IN DETERMINING WHETHER OR NOT TO CANCEL YOUR CONTRACT, YOU SHOULD CONSIDER,
ALONG WITH OTHER FACTORS SUCH AS THE NEEDS AND OTHER REASONS WHICH MOTIVATED YOU
TO PURCHASE THIS CONTRACT, THE PROJECTED COST AND YOUR ABILITY TO MAKE THE
SCHEDULED PREMIUM PAYMENTS AS STATED IN YOUR CONTRACT. PLEASE CONSULT AND REVIEW
THE PROSPECTUS YOU HAVE RECEIVED. THE PROSPECTUS DESCRIBES THE DEDUCTION FROM
PREMIUMS BEFORE AMOUNTS ARE ALLOCATED TO THE SUBACCOUNTS MENTIONED ABOVE. THE
DEDUCTION IS FOR STATE AND/OR LOCAL PREMIUM TAXES AND IS EQUAL TO THE EXACT
AMOUNT OF ANY SUCH TAXES.
IN ADDITION, THE PROSPECTUS DESCRIBES CERTAIN CHARGES THAT ARE DEDUCTED
PERIODICALLY FROM AMOUNTS ALLOCATED TO THE SUBACCOUNTS. THE PROSPECTUS ALSO
DESCRIBES CHARGES THAT MAY BE ASSESSED UPON SURRENDER.
IF YOU DECIDE TO CANCEL YOUR CONTRACT, COMPLETE THE ENCLOSED FORM AND RETURN IT
ALONG WITH YOUR CONTRACT. THE POSTMARK OF THE RETURNED CONTRACT MUST BE ON OR
BEFORE THE DEADLINE DESCRIBED ABOVE.
II-67
<PAGE>
INSTRUCTIONS
Please read carefully
If, after reading the enclosed notice, you decide to return your contract for
cancellation, you must:
1. Sign and date the bottom portion of this form.
2. Mail this notice together with your contract to:
Pruco Life Insurance Company of New Jersey
Pruco Life Service Office
P.O. Box 2925
Phoenix, AZ 85062
3. Make certain that the postmark on the envelope is on or before the
latest date permitted for cancellation as described in the enclosed
notice.
4. Check the box at the bottom if you have not yet received your contract
when mailing this form.
To be Filled Out by Owner
To: Pruco Life
Pursuant to the terms of the notice previously furnished me by Pruco Life, I
hereby return the contract numbered below for cancellation and request a refund
of all premiums paid by me, plus or minus any change due to investment
performance in the value of the invested portions of such premiums. I release
Pruco Life from any claims in connection with the sale or issuance of this
contract, and acknowledge that Pruco Life's only liability is the refund of the
premiums paid for the contract, plus or minus any change due to investment
performance in the value of the invested portions of such premiums.
____________________ _____________________________________________
Date Signature of Contract Owner
_____________________________________________
Contract Number
_____________________________________________
Name of Insured
(if other than Owner)
_____ I have not yet received the contract and, should it be received, I will
return it to Pruco Life.
II-68
Exhibit A(12)
II-15
<PAGE>
Exhibit A(12)
Description of Pruco Life's Issuance, Transfer
and Redemption Procedures for
Discovery Life Plus Insurance Contracts
Pursuant to Rule 6e-3(T)(b)(12)(ii)
and
Method of Computing Adjustments in
Payments and Cash Values Upon
Transfer of Entire Amount
from Subaccounts to Fixed-Rate Option
Pursuant to Rule 6e-3(T)(b)(13)(v)(B)
This document sets forth the administrative procedures that will be
followed by Pruco Life Insurance Company of New Jersey ("Pruco Life") in
connection with the issuance of its Discovery Life Plus Insurance Contract
("Contract"), the transfer of assets held thereunder, and the redemption by
Contract Owners of their interests in said Contracts. The document also explains
the method that Pruco Life will follow in making a cash adjustment when the
entire amount in the subaccounts is transferred to a fixed-rate option pursuant
to Rule 6e-3(T)(b)(13)(v)(B).
I. Procedures Relating to Issuance and Purchase of the Contracts
A. Premium Schedules, Face Amounts of Insurance and
Underwriting Standards
Face amounts of insurance for the Contract will not be the same for all
Owners, given the same initial premium. Insurance is based on the principle of
pooling and distribution of mortality risks, which assumes that each Owner pays
a premium and has a face amount of insurance commensurate with
II-16
<PAGE>
- 2 -
the insured's mortality risk as actuarially determined utilizing factors such as
age, sex, health and occupation. A uniform face amount for all insureds, given
the same initial premium, would discriminate unfairly in favor of those insureds
representing greater risks. However, for a given premium, Contracts issued on
insureds of the same age and sex (with the same initial interest guarantee for
the fixed-rate option) who are determined to be insurable will have the same
face amount of insurance.
The underwriting standards and premium processing practices followed by
Pruco Life are similar to those followed in connection with the offer and sale
of fixed-benefit life insurance, modified where necessary to meet the
requirements of the federal securities laws. Pruco Life will have only one
premium class -- "standard". Proposed insureds will either be found to be an
acceptable "standard" risk or will be found to be unacceptable, in which case
the risk will be declined.
B. Application and Initial Premium Processing
Upon receipt of a completed application form from a prospective Owner,
Pruco Life will follow certain insurance underwriting (i.e., evaluation of risk)
procedures designed to determine whether the proposed insured is insurable. In
the majority of cases this will involve both evaluation of the answers to the
questions on the application and a medical examination. In other cases, the
process may involved other verification procedures, and may require that further
information be provided by the proposed insured before a determination can be
made. A Contract cannot be issued, i.e., physically
<PAGE>
- 3 -
issued through Pruco Life's computerized issue system, until this underwriting
procedure has been completed.
These processing procedures are designed to provide immediate benefits to
every prospective Owner who pays the initial premium at the time the application
is submitted, without diluting any benefit payable to any existing Owner.
Although a Contract cannot be issued until after the underwriting process has
been completed, such a proposed insured will receive immediate insurance
coverage for the face amount of the Contract, if he or she proves to be
insurable and the Owner has paid the initial premium.
The Contract Date marks the date on which benefits begin to vary in
accordance with the investment performance of the selected subaccounts of the
Pruco Life Single Premium Variable Life Account ("Account"). It is also the date
as of which the insurance age of the proposed insured is determined. It
represents the first day of the Contract year and therefore determines the
Contract anniversary and also the Monthly Dates. It also represents the
commencement of the suicide and contestable periods for purposes of the
Contract.
If the proposed insured proves to be insurable, the Contract Date will be
the date on which the application and initial premium are received by Pruco Life
at its Service Office.
C. Premium Processing
The owner will, in certain circumstances, have the option of paying
additional premiums, thereby increasing Contract values beyond what they would
be if only the initial premium were paid. Additional premiums will be
<PAGE>
- 4 -
permitted if the qualification of the contract as "life insurance", for
purposes of the Internal Revenue Code, is not thereby jeopardized and if the
payment does not result in an immediate increase in the death benefit payable
under the Contract. Premiums are also permitted to cure defaults and to
reinstate the Contract after it has lapsed. Whenever a premium after the first
is received, unless the Contract is in default past its days of grace, Pruco
Life will subtract the applicable state and/or local premium tax. What is left
will be invested in the Account on the date received (or, if that is not a
business day, on the next business day). There is an exception if the Contract
is in default within its days of grace. Then, to the extent necessary to end the
default, premiums will be credited as of the date of the default or the Monthly
Date after default, and premiums greater than this amount will be credited when
received.
D. Reinstatement
The Contract may be reinstated within three years after default (this
period will be longer if required by state law) unless the Contract has been
surrendered for its cash surrender value. A Contract will be reinstated upon
receipt by Pruco Life of a written application for reinstatement, production of
evidence of insurability satisfactory to Pruco Life and payment of at least the
amount that, after deduction of any state and/or local premium taxes, leaves the
balance equal to the sum of: (a) the mortality charges not previously made for
the grace period, and (b) the mortality charges for the first two Monthly Dates
on or after the date of reinstatesment.
II-19
<PAGE>
- 5 -
Pruco Life will treat the amount paid upon reinstatement as a premium. It
will deduct the applicable state and/or local premium tax. The contract fund of
the reinstated Contract will, immediately upon reinstatement, be equal to this
net premium payment, minus the mortality charges not previously made for the
grace period, plus the contract debt, plus an amount equal to the contingent
deferred sales charge that would be charged were the Contract surrendered
immediately after reinstatement. The face amount will be the same as it was at
the end of the grace period. The contract debt will be equal to the contract
debt at the end of the grace period. The original Contract Date still controls
for purposes of calculating any subsequent contingent deferred sales charges.
The reinstatement will take effect as of the date the required proof of
insurability and payment of the reinstatement amount have been received by Pruco
Life at its Service Office.
E. Repayment of Loan
A loan made under the Contract may be repaid with an amount equal to the
monies borrowed plus interest which accrues daily at a fixed annual rate of 6%.
When a loan is made, the amount of any loan continues to be a part of the
contract fund. However, the amount equal to the amount of the loan is not part
of the Account. Instead, interest will be credited as follows:
1. The part of the loan equal to the first amount borrowed in
each contract year up to the excess of the target loan amount over any
existing loan will be credited with interest at an annual rate of
5-1/2%. Target loan amount means an amount equal to 10% of the initial
premium for each completed contract year.
II-20
<PAGE>
- 6 -
2. The part of the loan not eligible for the 5-1/2% crediting
rate will be credited with interest at an annual rate of 4%.
3. On each contract anniversary, Pruco Life will transfer the
part of the loan (up to the target loan amount) not previously
eligible for the 5-1/2% crediting rate to the amount eligible for that
rate.
Upon repayment of Contract debt, the payment will be added to the Account
and allocated among the subaccounts in proportion to the amounts in each
subaccount attributable to the Contract as of the date of repayment.
II. Transfer Among Subaccounts
The Account will have nine subaccounts, each of which is invested in shares
of a corresponding portfolio of the Pruco Life Series Fund, Inc. ("Fund"), which
is registered under the 1940 Act as an open-end diversified management
investment company. The Owner may, up to four times in each contract year,
transfer amounts from one subaccount to another or to the fixed-rate option. All
or a portion of the amount credited to a subaccount may be transferred, but if
only a portion is transferred out of a subaccount, the transfer may not result
in less than $300 being held on the day of transfer in either the subaccount
from which the transfer is made or the subaccount to which the transfer is made.
Transfers will take effect on the day a proper written request is received
at a Pruco Life Service Office. The request may be in terms of dollars, such as
a request to transfer $10,000 from one subaccount to another
II-21
<PAGE>
- 7 -
or may be in terms of a percentage reallocation among subaccounts. In the later
case, as with premium reallocations, the percentages must be in whole numbers.
Transfers from the fixed-rate option to the subaccounts are permitted once
each contract year and only during the one-month period beginning on the
contract anniversary. The maximum amount which may 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) $2500. Requests received prior to the contract
anniversary will be effected on the contract anniversary. Requests received
within the one-month period beginning on the contract anniversary will be
effected as of the end of the business day on which the request is received.
III. Redemption Procedures: Surrender and Related Transactions
A. Surrender for Cash Value
If the insured party under a Contract is alive, Pruco Life will pay, within
seven days, the Contract's net cash value as of the date of receipt at its
Service Office of the Contract and a signed request for surrender. The
Contract's net cash value (i.e., its cash surrender value) is computed as
follows:
1. If the Contract is not in default: The net cash value or
cash surrender value at any time in the first six contract years
is the contract fund, minus a surrender charge, minus contract
debt. The net cash
<PAGE>
- 8 -
value on surrender at the end of the 6th contract year or later
is the contract fund minus contract debt.
The amount of the surrender charge depends upon the contract
year in which the Contract is surrendered. If the Contract is
surrendered in the first year, the surrender charge will be 9% of
the contract fund. For each year after the first that the
Contract is in effect, the surrender charge as a percent of the
contract fund is reduced by 1% until it reaches 4% in the 6th
contract year. No surrender charge is imposed on surrenders after
the 6th contract year. Also, in no event will the surrender
charge ever exceed 9% of the initial premium.
2. If the Contract is in default during its days of grace,
the net cash value on surrender will be equal to zero.
3. If the Contract is in default beyond its days of grace,
the net cash value on surrender w111 be equal to zero.
In lieu of the payment of the net cash value in a single sum upon surrender
of a Contract, an election may be made by the Owner to apply all or a portion of
the proceeds under one of the fixed benefit settlement options described in the
Contract or, with the approval of Pruco Life, a combination of options. An
option is available only if the proceeds to be applied are
II-23
<PAGE>
- 9 -
$1,000 or more or would result in periodic payments of at least $20.00. The
fixed benefit settlement options are subject to the restrictions and limitations
set forth in the Contract.
B. Death Claims
Pruco Life will pay a death benefit to the beneficiary within seven days
after receipt at its Service Office of due proof of death of the insured, and
all other requirements necessary to make payment.1/ The following describes the
death benefit if the Contract is not in default past its days of grace. The
death benefit is the greater of: (a) the face amount, and (b) the contract fund
times the attained age factor that applies. Attachment 1 to this exhibit shows
the attained age factors. The death benefit will be adjusted for any contract
debt.
The proceeds payable on death also will include interest (at a rate
determined by Pruco Life from time to time) from the date that the death benefit
is computed (the date of death) until the date of payment.
Pruco Life will make payment of the death benefit out of its general
account, and will transfer assets from the Account to the general account in an
amount equal to the portion of the contract fund in the Account.
- ---------------
1/ State insurance laws impose various requirements, such as receipt of a tax
waiver, before payment of the death benefit may be made. In addition, payment of
the death benefit is subject to the provisions of the Contract regarding suicide
and incontestability. In the event Pruco Life should contest the validity of a
death claim, an amount equal to the portion of the Contract's contract fund held
in the Account will be withdrawn from the Account and held
in Pruco Life's general account.
II-24
<PAGE>
- 10 -
In lieu of payment of the death benefit in a single sum, an election may be
mate to apply all or a portion of the proceeds under one of the fixed benefit
settlement options described in the Contract or, with the approval of Pruco
Life, a combination of options. The election may be made by the Owner during the
insured's lifetime, or, if no election is in effect at death, by the
beneficiary. An option in effect at death may not be changed to another form of
benefit after death. An option is available only if the proceeds to be applied
are $1,000 or more or would result in periodic payments of at least $20.00. The
fixed benefit settlement options are subject to the restrictions and limitations
set forth in the Contract.
C. Default and Options on Lapse
The Contract is in default on any Monthly Date on which the net cash value
equals zero. Monthly Dates occur on the Contract Date and in each later month on
the same day in the month as the Contract Date. The Contract provides for a
61-day grace period, commencing with the mailing date of the notice of default,
in which to remedy the default. The insurance coverage continues in force during
the grace period, but if the insured dies during the grace period, any charges
due during the grace period are deducted from the amount payable to the
beneficiary.
If the amount needed to bring the Contract out of default is not paid by
the end of the grace period, the Contract will end and have no value.
D. Loans
The Contract provides that an Owner, if the Contract is in force, may take
out a loan at any time a loan value is available. The owner may
II-25
<PAGE>
- 11 -
borrow money on completion of a form satisfactory to Pruco Life. The Contract is
the only security for the loan. Disbursement of the amount of the loan will be
made within seven days of receipt of the form at Pruco Life's Service Office.
The Account will be debited in the amount of the loan on the day the form is
received. The percentage of the loan withdrawn from each subaccount of the
Account will be equal to the percentage of the value of the assets relating to
the Contract held in such subaccounts to the value of such assets held in the
Account. An Owner may borrow up to the Contract's loan value. During the first
contract year, the loan value is zero. After the first contract year, the loan
value is 90% of the cash value. The loan provisions have previously been
described. See pp. 5-6.
A loan does not affect the amount of any additional premiums which may be
paid. When a loan is made, the contract fund is not reduced but the value of the
assets relating to the Contract held in the Account is reduced. Accordingly, the
daily changes in the net cash value will be different from what they would have
been had no loan been taken. Cash values are thus permanently affected by any
Contract debt, whether or not repaid.
On settlement the amount of any Contract debt is subtracted from the
insurance proceeds.
If Contract debt ever becomes equal to or more than what the net cash value
would be if there were no Contract debt, all the Contract's benefits will end 61
days after notice is mailed to the Owner and any known assignee, unless
repayment of an amount sufficient to end the default is made within that period.
II-26
<PAGE>
E. When Proceeds are Paid
In general, Pruco Life will pay any death benefit, cash surrender value, or
loan proceeds within seven days after receipt at a Pruco Life Service 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 date of receipt. However, Pruco Life may delay payment of the cash surrender
value that is in the subaccounts and any portion of the death benefit due under
the Contract in excess of the face amount if (1) the disposal or valuation of
the Account's assets is not reasonably practicable because the New York Stock
Exchange is closed, trading is restricted by the SEC, or the SEC declares that
an emergency exists; or (2) the SEC by order permits postponement of payment to
protect Pruco Life's contract owners. In those states which require such a
provision in the Contract, Pruco Life has the right to postpone paying the
amount of any cash surrender value allocable to the fixed-rate option for up to
six months. If payment is delayed for more than 30 days, Pruco Life will pay
interest at the rate of at least 3% a year.
IV. Cash Adjustment Pursuant to
Rule 6e-3(T)(b)(13)(v)(B)
At any time during the first 24 months after a Contract is issued, so long
as the Contract is not in default, the Owner may transfer the entire amount in
the subaccounts to the fixed-rate option. This is funded by Pruco Life's general
account, with guaranteed minimum values. No evidence of insurability will be
required to make such a transfer. The policy's contract
II-27
<PAGE>
- 13 -
fund and death benefit will be the same as before the transfer. The policy will
retain the same issue date and risk classification for the insured. It is not
necessary that any outstanding Contract debt be repaid.
At the time of the exchange, Pruco Life will transfer the portion of the
original Contract's contract fund held in the Account to the general account.
II-28
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT 1
------------
- --------------------------------------------------------------------------------------------------
ATTAINED AGE FACTORS
- --------------------------------------------------------------------------------------------------
The Insurance Amount at any time is the greater of (1) the Face Amount (see page
3), and (2) the Contract Fund times the Attained Age Factor for the Insured's
sex and attained age.
- --------------------------------------------------------------------------------------------------
ATTAINED FACTORS ATTAINED FACTORS ATTAINED FACTORS
AGE ------- AGE ------- AGE -------
-------- MALE / FEMALE -------- MALE/FEMALE -------- MALE/FEMALE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15 or 1ess 4.80 7.50 43 2.49 2.88 71 1.14 1.24
16 4.78 7.49 44 2.38 2.75 72 1.12 1.22
17 4.74 7.22 45 2.27 2.64 73 1.11 1.19
18 4.70 7.01 46 2.18 2.53 74 1.10 1.17
19 4.68 6.80 47 2.09 2.44 75 1.09 1.15
20 4.66 6.67 48 2.01 2.34 76 1.09 1.14
21 4.64 6.56 49 1.93 2.26 77 1.08 1.12
22 4.62 6.46 50 1.86 2.17 78 1.07 1.11
23 4.60 6.34 51 1.79 2.10 79 1.07 1.10
24 4.58 6.22 52 1.72 2.02 80 1.06 1.09
25 4.56 6.11 53 1.66 1.95 81 1.06 1.08
26 4.54 5.98 54 1.60 1.88 82 1.05 1.07
27 4.52 5.84 55 1.55 1.82 83 1.05 1.07
28 4.52 5.69 56 1.51 1.77 84 1.05 1.06
29 4.49 5.53 57 1.47 1.73 85 1.05 1.05
30 4.42 5.37 58 1.43 1.69 86 1.05 1.05
31 4.33 5.22 59 1.39 1.66 87 1.05 1.05
32 4.21 5.07 60 1.36 1.62 88 1.05 1.05
33 4.07 4.90 61 1.33 1.57 89 1.05 1.05
34 3.92 4.72 62 1.30 1.53 90 1.05 1.05
35 3.76 4.52 63 1.28 1.48 91 1.04 1.04
36 3.59 4.29 64 1.25 1.44 92 1.03 1.03
37 3.41 4.06 65 1.23 1.40 93 1.03 1.03
38 3.24 3.82 66 1.21 1.36 94 1.02 1.03
39 3.07 3.59 67 1.19 1.34 95 1.02 1.02
40 2.91 3.38 68 1.18 1.31 96 1.02 1.02
41 2.76 3.18 69 1.16 1.29 97 1.02 1.02
42 2.62 3.02 70 1.15 1.26 98 1.01 1.01
- --------------------------------------------------------------------------------------------------
</TABLE>
II-29
Exhibit 1.A(13)
- --------------------------------------------------------------------------------
SETTLEMENT OPTIONS TO PROVIDE ACCELERATION OF DEATH BENEFITS
Subject to all the provisions of this rider and of the rest of the contract, we
will make available the payments described below if the Insured becomes
terminally ill or is confined to a nursing home.
This rider is non-participating. The factors we use to compute the Benefit Base
will be set and changed only prospectively, that is, based on future experience.
We will not change these factors to recoup any prior losses or distribute past
gains under the rider. The insured is not entitled to participate in company
profits.
Definitions
Convertible Proceeds.--The proceeds payable under this contract at the death of
the Insured, reduced by any contract debt, excluding any term insurance arising
from supplementary benefits (except level term insurance riders still in the
conversion period and for which we charge a premium).
Benefit Base.--The value we will use to determine the monthly benefit payable
under the terminal illness option or the nursing home option. It will be
computed based on the amount of convertible proceeds you elect to place under
the option and a reduced life expectancy. We will calculate the life expectancy,
and the resulting benefit base, using our assumptions, which we may change from
time to time. We will consider, among other things, the Insured's age and sex
and which of the options is being applied for. We will also consider, when
applicable:
1. expected future premiums;
2. future dividends according to the scale in effect when we make the
computation;
3. continuation of any reduction in guaranteed charges;
4. continuation of the current rate of any excess interest credited on
contract values; and
5. an expense charge of up to $150.
The benefit base will be at least as great as the net cash value of the contract
multiplied by the percentage of the convertible proceeds placed under the
terminal illness option or the nursing home option, whichever is elected.
Eligible Nursing Home.--An institution or special nursing unit of a hospital
which meets at least one of the following requirements:
1) it is Medicare approved as a provider of skilled nursing care services; or
2) it is licensed as a skilled nursing home or as an intermediate care
facility by the state in which it is located; or
3) it meets all the requirements listed below:
a. it is licensed as a nursing home by the state in which it is located;
b. its main function is to provide skilled, intermediate, or custodial
nursing care;
c. it is engaged in providing continuous room and board accommodations
to 3 or more persons;
d. it is under the supervision of a registered nurse (RN) or licensed
practical nurse (LPN);
e. it maintains a daily medical record of each patient; and
f. it maintains control and records for all medications dispensed.
Institutions which primarily provide residential facilities are not eligible
nursing homes.
Terminal Illness Options
If we receive evidence satisfactory to us, including certification by a licensed
physician, that the Insured's life expectancy is 6 months or less, you may elect
this option to provide equal monthly payments for 6 months. For each $1,000 of
benefit base, each payment will be at least $168.37, which assumes an annual
interest rate of 5%.
II-7
- ----------------
ORD 87241--89--P NJ
- ----------------
<PAGE>
If the Insured dies before all the payments have been made, we will pay the
beneficiary in one sum the present value of the remaining payments, calculated
at the interest rate we used to determine those payments.
If you do not wish to receive monthly payments, you may elect to receive a
single sum equal to the benefit base.
Nursing Home Options
If (1) the Insured is confined to an eligible nursing home and has been confined
there continuously for the preceding six months, and (2) we receive evidence
satisfactory to us, including certification by a licensed physician, that the
Insured is expected to remain in the nursing home until death, you may elect
level monthly payments for the number of years shown in the table that follows.
For each $1,000 of benefit base, each payment will be at least the minimum
amount shown in that table, which assumes an annual interest rate of 5%.
ATTAINED AGE PAYMENT PERIOD MINIMUM MONTHLY PAYMENT FOR
OF INSURED IN YEARS EACH $1,000 OF BENEFIT BASE
64 and under 10 $10.50
65 - 67 8 12.56
68 - 70 7 14.02
71 - 73 6 15.99
74 - 77 5 18.74
78 - 81 4 22.89
82 - 86 3 29.80
87 and over 2 43.64
If the Insured dies before all the payments have been made, we will pay the
beneficiary in one sum the present value of the remaining payments, calculated
at the interest rate we used to determine those payments.
If we agree, you may elect a longer payment period than that shown in the table;
if you do, monthly payments will be reduced so that the present value of the
monthly payments for the longer payment period is equal to the present value of
the payments for the period shown in the table, calculated at an interest rate
of at least 5%.
We reserve the right to set a maximum monthly benefit that we will pay under
this option. If we set a maximum, it will be at least $5,000; we will advise you
of the amount before the payment period begins.
If you do not wish to receive monthly payments, you may elect to receive a
single sum equal to the benefit base.
Effect on Contract
The convertible proceeds will be reduced by any amount converted under one of
these options.
If you convert only a portion of your convertible proceeds under one of these
options, the contract will remain in force and reduced premiums will be payable.
For insurance included in the convertible proceeds, values and the amount of
insurance will be reduced in the same proportion as the reduction in convertible
proceeds. Premiums will be payable as if the contract had been issued at the
reduced amount. Insurance not included in the convertible proceeds will be
unaffected.
If you convert only a portion of your convertible proceeds, the remaining
convertible proceeds must be at least $25,000.
If you convert all of your convertible proceeds, all other benefits under the
contract based on the Insured's life will end. Any insurance under the contract
on the life of someone other than the Insured will remain in effect and we will
waive all future premiums for this insurance.
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ORD 87241--89--P NJ
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II-8
<PAGE>
Conditions
Your right to receive payment under any of these options is subject to the
following conditions:
1. The contract must be in force other than as extended insurance.
2. You must elect the option in writing in a form that meets our needs.
3. The contract must not be assigned except to us as security for a loan.
4. We reserve the right to set a minimum of no more than $50,000 on the
amount of convertible proceeds you may place under an option.
5. You must send us the contract.
6. The primary purpose of life insurance is to meet your estate planning
needs. This benefit provides for the accelerated payment of life insurance
proceeds and is not intended to cause you to involuntarily invade proceeds
ultimately payable to the named beneficiary. Therefore, accelerated death
benefit proceeds will be made available to you on a voluntary basis only.
Accordingly:
(a) If you are required by law to exercise this option to satisfy the
claims of creditors, whether in bankruptcy or otherwise, you are
not eligible for this benefit.
(b) If you are required by a government agency to exercise this
option in order to apply for, obtain, or retain a government
benefit or entitlement, you are not eligible for this benefit.
Right to Cancel
If you ask us in writing and send us the contract, we will cancel this rider.
Rider attached to and made a part of this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ Dorothy K. Light
Secretary
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ORD 87241--89--P NJ
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II-9
Exhibit 1.A(13)(b)
II-6
<PAGE>
SETTLEMENT OPTIONS TO PROVIDE ACCELERATION OF DEATH BENEFITS
Subject to all the provisions of this rider and of the rest of the contract, we
will make the payments described below if the Insured is terminally ill or needs
an organ transplant.
This rider is non-participating. Any dividend we pay under this contract will be
the same as the one we pay under a contract that is like this one in all other
respects but that does not have this rider.
Definitions
Convertible Proceeds.--The proceeds we would pay under this contract at the
death of the Insured, less any contract debt and any term insurance (except
level term insurance still in the conversion period and for which we charge a
premium, or extended term insurance with at least one year remaining in the
term).
Benefit Base.--The amount we will pay under the terminal illness option or the
organ transplant option. It will be computed based on: (1) the amount of
convertible proceeds you place under the option, (2) a reduced life expectancy,
and (3) an interest rate no greater than the greater of:
(i) the yield on 90-day Treasury bills at the time of initial acceleration of
benefits, and
(ii) the current maximum adjustable policy loan interest rate based on the
greater of:
(a) Moody's Corporate Bond Yield Averages--Monthly Average
Corporates--published by Moody's Investors Service, Inc., or any
successor thereto, that is approved by the New York Superintendent of
Insurance, for the calendar month ending two months before the date of
application for an accelerated payment, and
(b) the policy guaranteed cash value interest rate plus one percent per
annum.
When we compute the life expectancy and the benefit base, we will use our
assumptions. We may change those assumptions from time to time. We will
consider, among other things, the Insured's age and sex and which of the options
is being applied for. We will also consider, if they apply:
1. expected future premiums;
2. future dividends at the scale in effect when we make the computation;
3. continuation of any reduction in guaranteed charges;
4. continuation of the current rate of any excess interest credited on
contract values; and
5. a processing charge of up to $150.
The benefit base will be at least as great as the net cash value of the contract
multiplied by the percentage of the convertible proceeds placed under the
terminal illness option or the organ transplant option, whichever is elected.
Terminal Illness Option
To choose this option, you must give us evidence that satisfies us that the
Insured's life expectancy is 6 months or less; part of that evidence must be a
certification by a licensed physician.
We will pay you the benefit base in one sum.
Organ Transplant Option
To choose this option, you must give evidence that satisfies us that the
Insured's life expectancy is 6 months or less unless the Insured receives a
vital organ transplant; part of that evidence must be a certification by a
licensed physician.
We will pay you the benefit base in one sum.
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ORD 87241--91--P NY
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<PAGE>
Effect on Contract
The convertible proceeds will be reduced by any amount converted under one of
these options.
If you convert only a part of your convertible proceeds, the contract will stay
in force and premiums will be reduced. For insurance included in the convertible
proceeds, values and the amount of insurance will be reduced in the same
proportion as the reduction in convertible proceeds. The new premiums will be
the ones that would apply if the contract had been issued at the reduced amount
and the existing provisions for premium payment will continue to apply insurance
not included in the convertible proceeds will not be affected.
If you convert only a part of your convertible proceeds, the convertible
proceeds that remain must be at least $25,000.
If you convert all of your convertible proceeds, all other benefits under the
contract based on the Insured's life will end. Any insurance under the contract
on the life of someone other than the Insured will stay in effect; we will
waive all future premiums for that insurance.
Conditions
Your right to be paid under one of these options is subject to the following
conditions:
1. The contract must be in force other than as extended insurance in the last
year of its term.
2. You must choose the option in writing in a form that meets our needs.
3. The contract must not be assigned except to us as security for a loan.
4. The minimum amount of convertible proceeds you may place under an option is
the amount needed to provide a benefit of either 25% of the face amount of
the contract or a $50,000, whichever is less.
5. You must send us the contract.
6. The main purpose of life insurance is to meet your estate planning needs.
This benefit provides for the accelerated payment of life insurance
proceeds. It is not meant to cause you to involuntarily invade proceeds
ultimately payable to the named beneficiary. Accelerated death benefits
will be made available to you on a voluntary basis only. Therefore:
(a) If you are required by law to use this option to meet the claims of
creditors, whether in bankruptcy or otherwise, you are not eligible
for this benefit.
(b) If you are required by a government agency to use this option in order
to apply for, obtain, or keep a government benefit or entitlement, you
are not eligible for this benefit.
Right to Cancel
If you ask us in writing and send us the contract, we will cancel this rider.
Rider attached to and made a part of this contract on the Contract Date
Pruco Life Insurance Company of New Jersey,
By /s/ Dorothy K. Light
Secretary
CLIFFORD I. KIRSCH
Chief Legal Officer
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
[LOGO] 213 Washington Street, Newark, NJ 07102-2992
201 802-7333 Fax: 201 802-8357
April 29, 1999
Pruco Life Insurance Company
of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
Gentlemen:
In my capacity as Chief Legal Officer 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, Esq.
II-
[LOGO]
IKWAHN OH, FSA, MAAA
Vice President & Actuary
Pruco Life Insurance Company of New Jersey
71 Hanover Road
Florham Park, NJ 07932-1597
Tel (973) 966-3243
EXHIBIT 6
April 29, 1999
Pruco Life Insurance Company of New Jersey
213 Washington Street
Newark, NJ 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 single premium variable life insurance
contracts ("Contracts") under the Securities Act of 1933. The prospectus
included in Post-Effective Amendment No. 24 to Registration Statement No.
2-99537 on form S-6 describes the Contract. 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 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,
Ikwahn OH, FSA, MAAA
Vice President & Actuary
Pruco Life Insurance Company of New Jersey
II-
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 24 to the registration statement on Form S-6 (the
"Registration Statement") of our report dated March 19, 1999, relating to the
financial statements of the Pruco Life of New Jersey Single Premium Variable
Life Account, which appears in such Prospectus.
We also consent to the use in the Prospectus constituting part of this
Registration Statement of our report dated February 26, 1999, relating to the
financial statements of Pruco Life Insurance Company of New Jersey, which
appears in such Prospectus.
We also consent to the reference to us under the heading "Experts" in the
Prospectus.
PricewaterhouseCoopers LLP
New York, New York
April 23, 1999
