AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 25, 2000.
REGISTRATION NO. 2-99537
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 25
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 100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
----------
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 May 1, 2000 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 A PROSPECTUS
<PAGE>
PROSPECTUS [DISCOVERY(R) LIFE PLUS LOGO]
MAY 1, 2000
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 describes 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 5-2000
<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
VOTING RIGHTS................................................................................................... 7
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............................................................................... 9
TRANSFERS....................................................................................................... 10
SURRENDERS...................................................................................................... 11
LOANS........................................................................................................... 11
CHARGES AND EXPENSES............................................................................................ 12
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
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
ADDITIONAL INFORMATION.......................................................................................... 24
FINANCIAL STATEMENTS............................................................................................ 24
DIRECTORS AND OFFICERS.................................................................................................. 25
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 the amounts invested in the subaccounts, the fixed-rate
option, and the Real Property Account, and the principal amount of any Contract
debt plus any interest earned thereon.
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 4:00 p.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 11.
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
- --------------------------------------------------------------------------------
|
-----------------------------------------------------------
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, 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% is inadequate, the charge may
be increased to the amount permitted by the 1980 Commissioners
Standard Ordinary Mortality Table ("1980 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 contract 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 BEST 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. Prudential is working toward completing
this process in 2001 and currently expects adoption by the Board of Directors to
take place in the latter part of 2000. However, there is no certainty that the
demutualization will be completed in this timeframe or that the necessary
approvals will be obtained. Also it is possible that after careful review,
Prudential could decide not to demutualize or could decide to delay its plans.
The plan of reorganization, which has not been fully 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 the policies. As a general rule, owners of Prudential-issued
insurance policies and annuity contracts would be eligible, provided that their
policies were in force on the date Prudential's Board of Directors adopted a
plan of reorganization, 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. This does not
constitute a proposal, offer, solicitation or recommendation regarding any plan
of reorganization that may be proposed or a recommendation regarding the
ownership of any stock that could be issued in connection with any such
demutualization.
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
We have established a separate account, the Pruco Life of New Jersey Single
Premium Variable Life Account (the "Account") to hold the assets that are
associated with the Contracts. The Account was established on April 15, 1985
under New Jersey law and is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 as a unit investment
trust, which is a type of investment company. 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.
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.
The obligations to Contract owners and beneficiaries arising under the Contract
are general corporate obligations of Pruco Life of New Jersey.
5
<PAGE>
Currently, you may invest in one or a combination of 15 available variable
investment options. When you choose a variable investment option, we purchase
shares of a mutual fund which are held as an investment for that option. We hold
these shares in the Separate Account. The division of the Separate Account of
Pruco Life of New Jersey that invests in a particular mutual fund is referred to
in your contract as the subaccount. Pruco Life of New Jersey may add additional
variable investment options in the future. The Account's financial statements
begin on page A1.
THE PRUDENTIAL SERIES FUND, INC.
The Prudential Series Fund, Inc. (the "Series Fund") is registered under the
1940 Act as an open-end diversified management investment company. 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").
6
<PAGE>
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. On November 15, 2000, the
liquidation date of the Zero Coupon Bond 2000 Portfolio, investments in
that portfolio will be transferred to the Money Market Portfolio.
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.
VOTING RIGHTS
We are the legal owner of the shares in the Funds associated with the variable
investment options. However, we vote the shares in the Funds according to voting
instructions we receive from Contract owners. We will mail you a proxy, which is
a form you need to complete and return to us to tell us how you wish us to vote.
When we receive those instructions, we will vote all of the shares we own on
your behalf in accordance with those instructions. We will vote the shares for
which we do not receive instructions and shares that we own, in the same
proportion as the shares for which instructions are received. We may change the
way your voting instructions are calculated if it is required by federal
regulation. 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 Funds in its own right, it may elect to do so.
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 wholly-owned
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
7
<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.
8
<PAGE>
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 state 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
9
<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 give 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, up to 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 your
allocation instructions regarding any future premiums.
The liquidation date of the Zero Coupon Bond 2000 Subaccount is November 15,
2000, and the liquidation date of the Zero Coupon Bond 2005 Subaccount is
November 15, 2005. 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). The contract debt is the principal amount of all outstanding
loans plus any interest accrued thereon. 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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<PAGE>
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 1999, 1998 and 1997, 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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<PAGE>
The total expenses of each portfolio for the year 1999 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% 0.02%* 0.42%*
DIVERSIFIED BOND PORTFOLIO 0.40% 0.03%* 0.43%*
GOVERNMENT INCOME PORTFOLIO 0.40% 0.04% 0.44%
ZERO COUPON BOND PORTFOLIO 2000 0.40% 0.18%* 0.58%*
ZERO COUPON BOND PORTFOLIO 2005 0.40% 0.19%* 0.59%*
CONSERVATIVE BALANCED PORTFOLIO 0.55% 0.02%* 0.57%*
FLEXIBLE MANAGED PORTFOLIO 0.60% 0.02%* 0.62%*
HIGH YIELD BOND PORTFOLIO 0.55% 0.05% 0.60%
STOCK INDEX PORTFOLIO 0.35% 0.04% 0.39%
EQUITY INCOME PORTFOLIO 0.40% 0.02% 0.42%
EQUITY PORTFOLIO 0.45% 0.02%* 0.47%*
PRUDENTIAL JENNISON PORTFOLIO 0.60% 0.03% 0.63%
SMALL CAPITALIZATION STOCK PORTFOLIO 0.40% 0.05% 0.45%
GLOBAL PORTFOLIO 0.75% 0.09% 0.84%
NATURAL RESOURCES PORTFOLIO 0.45% 0.12% 0.57%
- ----------------------------------------------------------------------------------------
</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 1999, 1998, and 1997, Pruco Life of
New Jersey received a total of approximately $167,000, $171,000, and $167,000,
respectively, in annual administrative charges under the contracts. We
guarantee 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 we expect 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 we
make 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
1999, 1998 and
13
<PAGE>
1997, Pruco Life of New Jersey received a total of approximately $428,000,
$438,000, and $427,000, 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 1999, 1998, and
1997, Pruco Life of New Jersey received a total of $1,000, $0, and $5,000,
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.
14
<PAGE>
Thereafter, assuming a total Series Fund expense ratio of 0.48% (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 $50,000
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.
15
<PAGE>
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.
16
<PAGE>
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.
17
<PAGE>
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 -1.73%,
2.27%, 6.27%, and 10.27%.
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
18
<PAGE>
ILLUSTRATIONS
-------------
DISCOVERY LIFE PLUS CONTRACT
MALE ISSUE AGE 35
$20,000 INITIAL PREMIUM PAYMENT
USING CURRENT SCHEDULE OF MORTALITY CHARGES (1)
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
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 $ 149,824
20 $ 43,822 $133,307 $133,307 $133,307 $ 196,523
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 270,128
30 $ 64,868 $ 0 $133,307 $133,307 $ 384,345
35 $ 78,922 $ 0 $ 0(2) $154,841 $ 564,345
40 $ 96,020 $ 0 $ 0 $193,149 $ 846,812
45 $116,824 $ 0 $ 0 $247,153 $1,303,447
Cash Surrender Value
----------------------------------------------------
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
1 $ 20,800 $17,423 $18,132 $ 18,904 $ 19,684
2 $ 21,632 $17,206 $18,635 $ 20,121 $ 21,748
3 $ 22,497 $16,990 $19,150 $ 21,486 $ 24,011
4 $ 23,397 $16,774 $19,677 $ 22,940 $ 26,594
5 $ 24,333 $16,560 $20,216 $ 24,491 $ 29,460
6 $ 25,306 $16,346 $20,767 $ 26,143 $ 32,631
7 $ 26,319 $16,633 $21,991 $ 28,766 $ 37,257
8 $ 27,371 $16,080 $22,356 $ 30,387 $ 40,838
9 $ 28,466 $15,332 $22,727 $ 32,099 $ 44,763
10 $ 29,605 $14,555 $23,103 $ 33,908 $ 49,064
15 $ 36,019 $10,108 $25,083 $ 44,598 $ 77,629
20 $ 43,822 $ 4,160 $26,548 $ 58,660 $ 122,827
25 $ 53,317 $ 0(2) $22,175 $ 77,155 $ 194,337
30 $ 64,868 $ 0 $12,398 $101,481 $ 307,476
35 $ 78,922 $ 0 $ 0(2) $133,483 $ 486,504
40 $ 96,020 $ 0 $ 0 $175,590 $ 769,828
45 $116,824 $ 0 $ 0 $230,984 $1,218,174
- -----------------------
(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 MORTALITY CHARGES (1)
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
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 $ 142,685
20 $ 43,822 $133,307 $133,307 $133,307 $ 187,154
25 $ 53,317 $ 0(2) $133,307 $133,307 $ 257,182
30 $ 64,868 $ 0 $ 0(2) $133,307 $ 365,852
35 $ 78,922 $ 0 $ 0 $133,307 $ 537,030
40 $ 96,020 $ 0 $ 0 $133,307 $ 805,505
45 $116,824 $ 0 $ 0 $162,619 $1,238,361
Cash Surrender Value
----------------------------------------------------
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
1 $ 20,800 $17,305 $18,014 $ 18,775 $ 19,554
2 $ 21,632 $16,950 $18,380 $ 19,868 $ 21,476
3 $ 22,497 $16,574 $18,736 $ 21,077 $ 23,603
4 $ 23,397 $16,173 $19,079 $ 22,353 $ 26,023
5 $ 24,333 $15,745 $19,405 $ 23,697 $ 28,697
6 $ 25,306 $15,285 $19,709 $ 25,111 $ 31,653
7 $ 26,319 $15,247 $20,606 $ 27,420 $ 36,001
8 $ 27,371 $14,549 $20,651 $ 28,736 $ 39,324
9 $ 28,466 $13,821 $20,660 $ 30,105 $ 42,970
10 $ 29,605 $13,063 $20,631 $ 31,529 $ 46,975
15 $ 36,019 $ 8,703 $19,763 $ 39,574 $ 73,930
20 $ 43,822 $ 2,817 $17,012 $ 49,297 $ 116,971
25 $ 53,317 $ 0(2) $10,781 $ 60,857 $ 185,023
30 $ 64,868 $ 0 $ 0(2) $ 74,755 $ 292,682
35 $ 78,922 $ 0 $ 0 $ 92,005 $ 462,957
40 $ 96,020 $ 0 $ 0 $115,932 $ 732,277
45 $116,824 $ 0 $ 0 $151,980 $1,157,346
- -----------------------
(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 OF MORTALITY CHARGES (1)
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
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 $ 360,473
15 $180,094 $357,468 $357,468 $357,468 $ 510,931
20 $219,112 $ 0(2) $357,468 $357,468 $ 733,202
25 $266,584 $ 0 $357,468(2) $433,020 $1,090,669
Cash Surrender Value
----------------------------------------------------
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
1 $104,000 $88,891 $ 92,658 $ 96,634 $100,610
2 $108,160 $87,784 $ 95,076 $102,659 $111,144
3 $112,486 $86,682 $ 97,703 $109,622 $122,690
4 $116,986 $85,583 $100,391 $117,043 $135,685
5 $121,665 $84,488 $103,141 $124,953 $150,307
6 $126,532 $83,399 $105,955 $133,382 $166,486
7 $131,593 $84,860 $112,200 $146,768 $190,089
8 $136,857 $82,893 $114,060 $155,037 $208,357
9 $142,331 $78,487 $115,952 $163,772 $228,380
10 $148,024 $73,247 $117,874 $172,999 $250,328
15 $180,094 $40,869 $127,976 $227,543 $396,070
20 $219,112 $ 0(2) $138,943 $299,285 $626,668
25 $266,584 $ 0 $150,850(2) $393,654 $991,517
- -----------------------
(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)
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
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 $ 474,580
20 $219,112 $ 0(2) $357,468 $357,468 $ 680,793
25 $266,584 $ 0 $ 0(2) $357,468 $1,012,204
Cash Surrender Value
----------------------------------------------------
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 (-1.73% Net) (2.27% Net) (6.27% Net) (10.27% Net)
- ------ -------------- ------------ ----------- ----------- ------------
1 $104,000 $87,714 $91,362 $ 95,335 $ 99,308
2 $108,160 $85,276 $92,562 $100,144 $108,416
3 $112,486 $82,686 $93,699 $105,626 $118,505
4 $116,986 $79,940 $94,731 $111,414 $130,140
5 $121,665 $77,018 $95,642 $117,523 $143,064
6 $126,532 $73,888 $96,396 $123,957 $157,425
7 $131,593 $72,686 $99,947 $134,759 $178,750
8 $136,857 $68,162 $99,217 $140,596 $195,033
9 $142,331 $63,334 $98,161 $146,617 $213,009
10 $148,024 $58,146 $96,726 $152,818 $232,898
15 $180,094 $25,708 $82,567 $187,298 $367,891
20 $219,112 $ 0(2) $47,819 $228,777 $581,874
25 $266,584 $ 0 $ 0(2) $279,353 $920,185
- -----------------------
(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>
pages T1 and T3 reflect the deduction of these larger mortality charges in later
years in accordance with this standard. The tables on pages T2 and T4 reflect
the deduction of the maximum cost of insurance charge at all times, even though
Pruco Life of New Jersey does not currently intend to charge the maximum
contractual cost of insurance rates other than under the circumstances where the
contract fund value falls to a specified level, as explained above. All of the
tables reflect the deduction of a sales charge in the calculation of the cash
surrender value during the first 6 contract years.
The tables also reflect the fact that no charges for federal or state income
taxes are currently made against the account. If such a charge is made in the
future, it will take a higher gross rate of return than it does now to produce
the net after-tax returns shown in the tables.
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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<PAGE>
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:
o you will not be taxed on the growth of the investment options in the
contract, unless you receive a distribution from the contract.
o 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:
o 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.
o 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.
o 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
20
<PAGE>
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
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
21
<PAGE>
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 2000 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, 1999 and
1998 and for each of the three years in the period ended December 31, 1999 and
the financial statements of the Account as of December 31, 1999 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.
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<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
We are subject to legal and regulatory actions in the ordinary course of our
businesses, including class actions. Pending legal regulatory actions include
proceedings specific to our practices and proceedings generally applicable to
business practices in the industries in which we operate. In certain of these
lawsuits, large and/or indeterminate amounts are sought, including punitive or
exemplary damages.
In particular, Pruco Life and Prudential have been subject to substantial
regulatory actions and civil litigation involving individual life insurance
sales practices. In 1996, Prudential, on behalf of itself and many of its life
insurance subsidiaries including Pruco Life, entered into settlement agreements
with relevant insurance regulatory authorities and plaintiffs in the principal
life insurance sales practices class action lawsuit covering policyholders of
individual permanent life insurance policies issued in the United States from
1982 to 1995. Pursuant to the settlements, the companies agreed to various
changes to their sales and business practices controls and a series of fines,
and are in the process of distributing final remediation relief to eligible
class members. In many instances, claimants have the right to "appeal" the
decision to an independent reviewer. The bulk of such appeals were resolved in
1999, and the balance is expected to be addressed in 2000. As of January 31,
2000, Prudential and/or Pruco Life remained a party to two putative class
actions and approximately 158 individual actions relating to permanent life
insurance policies issued in the United States between 1982 and 1995. Additional
suits may be filed by individuals who opted out of the settlements. While the
approval of the class action settlement is now final, Prudential and Pruco Life
remain subject to oversight and review by insurance regulators and other
regulatory authorities with respect to their sales practices and the conduct of
the remediation program. The U.S. District Court has also retained jurisdiction
as to all matters relating to the administration, consummation, enforcement and
interpretation of the settlements.
Prudential has indemnified Pruco Life of New Jersey for any liabilities incurred
in connection with sales practices litigation covering policyholders of
individual permanent life insurance policies issued in the United States from
1982 to 1995.
In 1999, 1998, 1997 and 1996, Prudential recorded provision in its Consolidated
Statements of Operation of $100 million, $1,150 million, $2,030 million and
$1,125 million, respectively, to provide for estimated remediation costs, and
additional sales practices costs including related administrative costs,
regulatory fines, penalties and related payments, litigation costs and
settlements, including settlements associated with the resolution of claims of
deceptive sales practices asserted by policyholders who elected to "opt-out" of
the class action settlement and litigate their claims against Prudential
separately, and other fees and expenses associated with the resolution of sales
practices issues.
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.
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.
24
<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 -- President, Prudential Individual
Life Insurance since 1998; 1997 to 1998: Senior Vice President, Chief Actuary
and CFO, Prudential Individual Insurance Group; 1995 to 1997: President,
Prudential Select. Age 48.
IRA J. KLEINMAN, DIRECTOR -- Executive Vice President, Prudential International
Insurance Group since 1997; 1995 to 1997: Chief Marketing and Product
Development Officer, Prudential Individual Insurance Group. Age 53.
ESTHER H. MILNES, PRESIDENT AND DIRECTOR -- Vice President and Chief Actuary,
Prudential Individual Life Insurance since 1999; prior to 1999: Vice President
and Actuary, Prudential Individual Insurance Group. Age 49.
DAVID R. ODENATH, JR., DIRECTOR -- President, Prudential Investments since 1999;
prior to 1999: Senior Vice President and Director of Sales, Investment
Consulting Group, PaineWebber. Age 43.
I. EDWARD PRICE, VICE CHAIRMAN AND DIRECTOR -- Senior Vice President and
Actuary, Prudential Individual Life Insurance since 1998; 1995 to 1998: Senior
Vice President and Actuary, Prudential Individual Insurance Group. Age 57.
OFFICERS WHO ARE NOT DIRECTORS
C. EDWARD CHAPLIN, TREASURER -- Vice President and Treasurer, Prudential since
1995. Age 43.
JAMES C. DROZANOWSKI, SENIOR VICE PRESIDENT -- Vice President, Operations and
Systems, Prudential Individual Financial Services since 1998; 1996 to 1998: Vice
President and Operations Executive, Prudential Individual Insurance Group; 1995
to 1996: President, Credit Card Division, Chase Manhattan Bank. Age 57.
CLIFFORD E. KIRSCH, CHIEF LEGAL OFFICER AND SECRETARY -- Chief Counsel, Variable
Products, Prudential Law Department since 1995. Age 40.
SHIRLEY H. SHAO, SENIOR VICE PRESIDENT AND CHIEF ACTUARY -- Vice President and
Associate Actuary, Prudential since 1996; prior to 1996: Vice President and
Assistant Actuary, Prudential Corporate Risk Management. Age 45.
DENNIS G. SULLIVAN, VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER -- Vice
President and Deputy Controller, Prudential since 1998; 1997 to 1998: Vice
President and Controller, ContiFinancial Corporation; prior to 1997: Director,
Salomon Brothers. Age 44.
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.
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<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF NET ASSETS
December 31, 1999
<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] ......................... $2,439,764 $2,557,371 $7,686,931 $10,615,819 $14,958,549 $255,549
Receivable from (Payable to)
Pruco Life Insurance Company
of New Jersey [Note 2] ................. 28,010 (78) (175) (8,085) 172 (12)
---------- ---------- ---------- ----------- ----------- --------
Net Assets ............................... $2,467,774 $2,557,293 $7,686,756 $10,607,734 $14,958,721 $255,537
========== ========== ========== =========== =========== ========
NET ASSETS, representing:
Equity of contract owners ................ $2,467,774 $2,557,293 $7,686,756 $10,607,734 $14,958,721 $255,537
---------- ---------- ---------- ----------- ----------- --------
$2,467,774 $2,557,293 $7,686,756 $10,607,734 $14,958,721 $255,537
========== ========== ========== =========== =========== ========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A1
<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>
$1,033,393 $2,451,702 $1,694,112 $321,120 $960,791 $165,486 $188,671 $2,863,601 $450,656
0 (4,901) 137 0 (10,213) (38) 0 (8,086) (5,119)
- ---------- ---------- ---------- -------- -------- -------- -------- ---------- --------
$1,033,393 $2,446,801 $1,694,249 $321,120 $950,578 $165,448 $188,671 $2,855,515 $445,537
========== ========== ========== ======== ======== ======== ======== ========== ========
$1,033,393 $2,446,801 $1,694,249 $321,120 $950,578 $165,448 $188,671 $2,855,515 $445,537
- ---------- ---------- ---------- -------- -------- -------- -------- ---------- --------
$1,033,393 $2,446,801 $1,694,249 $321,120 $950,578 $165,448 $188,671 $2,855,515 $445,537
========== ========== ========== ======== ======== ======== ======== ========== ========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A2
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
---------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
--------- --------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income .................................. $ 95,928 $ 100,142 $ 103,652 $ 0 $ 173,873 $ 204,112
--------- --------- --------- ----------- ---------- ----------
EXPENSES
Charges to contract owners for assuming
mortality risk and expense risk and for
administration [Notes 5A and 5B] ................ 24,405 23,901 24,188 33,654 35,362 35,031
Reimbursement for excess expenses
[Note 5C] ....................................... (496) (295) (419) (707) (686) (692)
--------- --------- --------- ----------- ---------- ----------
NET EXPENSES ....................................... 23,909 23,606 23,769 32,947 34,676 34,339
--------- --------- --------- ----------- ---------- ----------
NET INVESTMENT INCOME (LOSS) ....................... 72,019 76,536 79,883 (32,947) 139,197 169,773
--------- --------- --------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received ........... 0 0 0 7,513 10,286 32,613
Realized gain (loss) on shares
redeemed ..................................... 0 0 0 4,315 6,794 18,905
Net change in unrealized gain (loss)
on investments ............................... 0 0 0 (32,905) 2,474 (25,257)
--------- --------- --------- ----------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS ..................... 0 0 0 (21,077) 19,554 26,261
--------- --------- --------- ----------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS ....................................... $ 72,019 $ 76,536 $ 79,883 $ (54,024) $ 158,751 $ 196,034
========= ========= ========= =========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A3
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO CONSERVATIVE BALANCED PORTFOLIO
- --------------------------------------- --------------------------------------- ----------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 136,663 $ 157,172 $ 185,377 $ 496 $ 365,349 $ 341,788 $ 606,614 $ 665,334 $ 749,419
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
102,202 108,486 100,463 135,012 142,349 142,081 185,917 199,721 204,550
(6,755) (7,589) (6,270) (25,362) (26,007) (25,842) (26,797) (27,698) (26,954)
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
95,447 100,897 94,193 109,650 116,342 116,239 159,120 172,023 177,596
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
41,216 56,275 91,184 (109,154) 249,007 225,549 447,494 493,311 571,823
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
922,608 919,510 455,682 125,881 1,126,626 1,749,859 84,625 916,632 1,768,494
476,646 374,119 279,137 68,774 184,629 268,843 124,783 252,036 392,816
(585,082) (689,234) 827,985 595,692 (586,039) (469,700) 167,404 (78,407) (849,547)
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
814,172 604,395 1,562,804 790,348 725,216 1,549,002 376,812 1,090,261 1,311,763
- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
$ 855,388 $ 660,670 $1,653,988 $ 681,193 $ 974,223 $1,774,551 $ 824,306 $1,583,572 $1,883,586
========== ========== ========== ========= ========== ========== ========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A4
<PAGE>
<TABLE>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
<CAPTION>
SUBACCOUNTS
----------------------------------------------------------------------------------
ZERO COUPON BOND 2000 PORTFOLIO HIGH YIELD BOND PORTFOLIO
------------------------------------- --------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ............................. $ 0 $ 12,451 $ 14,974 $ 3,462 $ 149,512 $ 155,751
--------- ---------- ---------- ---------- ---------- ----------
EXPENSES
Charges to contract owners for assuming
mortality risk, expense risk and
for administration [Notes 5A and 5B] ....... 3,169 3,248 3,611 16,386 19,892 20,547
Reimbursement for excess expenses
[Note 5C] .................................. (472) (575) (782) 0 0 0
--------- ---------- ---------- ---------- ---------- ----------
NET EXPENSES .................................. 2,697 2,673 2,829 16,386 19,892 20,547
--------- ---------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS) .................. (2,697) 9,778 12,145 (12,924) 129,620 135,204
--------- ---------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions received ...... 478 3,419 11,873 0 0 0
Realized gain (loss) on shares
redeemed ................................ 279 1,760 1,044 (73,373) (2,116) (3,832)
Net change in unrealized gain (loss)
on investments .......................... 4,747 1,448 (7,788) 125,684 (179,573) 58,986
--------- ---------- ---------- ---------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS ................ 5,504 6,627 5,129 52,311 (181,689) 55,154
--------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS .................................. $ 2,807 $ 16,405 $ 17,274 $ 39,387 $ (52,069) $ 190,358
========= ========== ========== ========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A5
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ----------------------------------------------------------------------------------------------------------------------------------
STOCK INDEX PORTFOLIO EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
- ------------------------------------- ------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 23,028 $ 19,071 $ 20,822 $ 38,528 $ 48,033 $ 37,284 $ 1,900 $ 2,309 $ 2,490
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
25,390 20,786 16,818 20,946 22,975 17,755 3,322 3,579 6,172
0 0 0 0 0 0 0 0 0
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
25,390 20,786 16,818 20,945 22,975 17,755 3,322 3,579 6,172
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
(2,362) (1,715) 4,004 17,582 25,058 19,529 (1,422) (1,270) (3,682)
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
28,562 24,345 44,424 187,634 105,282 152,241 0 15,649 47,548
115,978 207,426 106,189 48,028 29,851 39,726 (16,486) (21,360) 21,682
212,498 62,489 194,261 (78,782) (251,690) 206,374 106,702 (44,360) (130,229)
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
357,038 294,260 344,874 156,880 (116,557) 398,341 90,216 (50,071) (60,999)
- ---------- ---------- --------- ---------- --------- --------- --------- --------- ---------
$ 354,676 $ 292,545 $ 348,878 $ 174,462 $ (91,499) $ 417,870 $ 88,794 $ (51,341) $ (64,681)
========== ========== ========= ========== ========= ========= ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A6
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
STATEMENTS OF OPERATIONS
For the years ended December 31, 1999, 1998 and 1997
SUBACCOUNTS
------------------------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
----------------------------------------- ------------------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ..................... $ 2,672 $ 7,953 $ 8,942 $ 0 $12,527 $10,477
-------- -------- -------- -------- ------- -------
EXPENSES
Charges to contract owners for
assuming mortality risk and expense
risk and for administration
[Notes 5A and 5B] ................. 8,620 7,528 9,961 3,390 2,468 1,972
Reimbursement for excess expenses
[Note 5C] ......................... 0 0 0 0 0 0
-------- -------- -------- -------- ------- -------
NET EXPENSES .......................... 8,620 7,528 9,961 3,390 2,468 1,972
-------- -------- -------- -------- ------- -------
NET INVESTMENT INCOME (LOSS) .......... (5,948) 425 (1,019) (3,390) 10,059 8,505
-------- -------- -------- -------- ------- -------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Capital gains distributions
received ........................ 4,686 25,262 29,175 0 0 0
Realized gain (loss) on shares
redeemed ........................ 43,643 42,895 85,779 (1,985) 1,486 (655)
Net change in unrealized gain
(loss) on investments ........... 243,341 56,781 (47,732) (5,219) 796 4,796
-------- -------- -------- -------- ------- -------
NET GAIN (LOSS) ON INVESTMENTS ........ 291,670 124,938 67,222 (7,204) 2,282 4,141
-------- -------- -------- -------- ------- -------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS .......................... $285,722 $125,363 $ 66,203 $(10,594) $12,341 $12,646
======== ======== ======== ======== ======= =======
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A7
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO SMALL CAPITALIZATION STOCK PORTFOLIO
- ----------------------------------- ----------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- -------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 5,630 $ 4,811 $ 3,375 $ 1,670 $ 849 $ 0 $ 2,789 $ 2,627
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
1,934 1,336 1,078 23,633 9,532 4,880 5,353 6,141 5,002
(285) (231) (287) 0 0 0 0 0 0
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
1,649 1,105 791 23,633 9,532 4,880 5,353 6,141 5,002
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
(1,649) 4,525 4,020 (20,258) (7,862) (4,031) (5,353) (3,352) (2,375)
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
0 116 1,907 109,845 16,483 30,119 8,172 29,229 31,445
100 6,039 1,286 129,709 15,972 15,281 (4,080) 11,182 41,012
(6,456) 100 661 481,466 212,008 41,164 44,553 (30,068) 13,028
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
(6,356) 6,255 3,854 721,020 244,463 86,564 48,645 10,343 85,485
- ------- --------- --------- --------- --------- --------- --------- --------- ---------
$(8,005) $ 10,780 $ 7,874 $ 700,762 $ 236,601 $ 82,533 $ 43,292 $ 6,991 $ 83,110
======= ========= ========= ========= ========= ========= ========= ========= =========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A8
<PAGE>
<TABLE>
<CAPTION>
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, 1999, 1998 and 1997
SUBACCOUNTS
---------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
----------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997
----------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .......... $ 72,019 76,536 $ 79,883 (32,947) $ 139,197 $ 169,773
Capital gains distributions received .. 0 0 0 7,513 10,286 32,613
Realized gain (loss) on shares
redeemed ............................ 0 0 0 4,315 6,794 18,905
Net change in unrealized gain (loss)
on investments ...................... 0 0 0 (32,905) 2,474 (25,257)
----------- ------------ ------------ ---------- ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ............................ 72,019 76,536 79,883 (54,024) 158,751 196,034
----------- ------------ ------------ ---------- ------------ ------------
PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
Contract Owner Net Payments ........... (14,902) (373) 995 (45,142) 172 1,169
Policy Loans .......................... (34,652) (123,141) (18,827) (32,451) (54,587) (47,894)
Policy Loan Repayments and Interest ... 23,846 223,228 25,325 35,700 36,259 73,309
Surrenders, Withdrawals and Death
Benefits ............................ (383,371) (173,939) (216,097) (20,695) (47,734) (409,153)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option .... 615,335 303,906 85,301 (162,021) (4,825) (27,321)
Deferred Sales Charges ................ (13,618) (13,719) (13,768) (19,059) (19,991) (19,588)
----------- ------------ ------------ ---------- ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM PREMIUM
PAYMENTS AND OTHER OPERATING
TRANSFERS ............................. 192,638 215,962 (137,071) (243,668) (90,706) (429,478)
----------- ------------ ------------ ---------- ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RETAINED IN THE ACCOUNT
[Note 7] .............................. 0 (15,201) (62,160) 0 (1,221) (3,183)
----------- ------------ ------------ ---------- ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS ................................ 264,657 277,297 (119,348) (297,692) 66,824 (236,627)
NET ASSETS
Beginning of year ..................... 2,203,117 1,925,820 2,045,168 2,854,985 2,788,161 3,024,788
----------- ------------ ------------ ---------- ------------ ------------
End of year ........................... $ 2,467,774 $ 2,203,117 $ 1,925,820 $2,557,293 $ 2,854,985 $ 2,788,161
=========== ============ ============ ========== ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A9
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-----------------------------------------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO CONSERVATIVE BALANCED PORTFOLIO
--------------------------------------- ---------------------------------------- -------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 41,216 $ 56,275 $ 91,184 $ (109,154) $ 249,007 $ 225,549 $ 447,494 $ 493,311 $ 571,823
922,608 919,510 455,682 125,881 1,126,626 1,749,859 84,625 916,632 1,768,494
476,646 374,119 279,137 68,774 184,629 268,843 124,783 252,036 392,816
(585,082) (689,234) 827,985 595,692 (586,039) (469,700) 167,404 (78,407) (849,547)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
855,388 660,670 1,653,988 681,193 974,223 1,774,551 824,306 1,583,572 1,883,586
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
21,976 410 5,305 (57,912) 1,411 31,012 (101,906) (4,775) 25,755
(211,096) (227,319) (202,847) (249,310) (502,871) (228,588) (479,741) (659,041) (532,693)
200,323 297,092 233,014 224,892 196,000 273,750 427,916 612,810 430,142
(751,649) (540,500) (552,988) (390,051) (1,073,945) (676,443) (925,499) (1,811,489) (1,891,937)
(756,710) (185,356) 110,155 (575,424) (143,900) (389,999) (68,453) (607,265) (161,017)
(58,021) (60,303) (56,752) (77,046) (78,426) (77,779) (112,199) (115,795) (117,856)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(1,555,177) (715,976) (464,113) (1,124,851) (1,601,731) (1,068,047) (1,259,882) (2,585,555) (2,247,606)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
0 2,783 12,326 0 (300) (71,159) 0 2,706 (284,171)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(699,789) (52,523) 1,202,201 (443,658) (627,808) 635,345 (435,576) (999,277) (648,191)
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
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 7,686,756 $ 8,386,545 $ 8,439,068 $ 10,607,734 $ 11,051,392 $ 11,679,200 $ 14,958,721 $ 15,394,297 $ 16,393,574
============ ============ ============ ============ ============ ============ ============ ============ ============
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A10
<PAGE>
<TABLE>
<CAPTION>
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, 1999, 1998 and 1997
SUBACCOUNTS
-------------------------------------------------------------------------
ZERO COUPON BOND 2000 PORTFOLIO HIGH YIELD BOND PORTFOLIO
---------------------------------- -------------------------------------
1999 1998 1997 1999 1998 1997
-------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .......... $ (2,697) $ 9,778 $ 12,145 $ (12,924) $ 129,620 $ 135,204
Capital gains distributions received .. 478 3,419 11,873 0 0 0
Realized gain (loss) on shares
redeemed ............................ 279 1,760 1,044 (73,373) (2,116) (3,832)
Net change in unrealized gain (loss)
on investments ...................... 4,747 1,448 (7,788) 125,684 (179,573) 58,986
-------- --------- --------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS ............................ 2,807 16,405 17,274 39,387 (52,069) 190,358
-------- --------- --------- ---------- ---------- ----------
PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
Contract Owner Net Payments ........... 0 14 0 (14,481) (30) 15,835
Policy Loans .......................... (5,518) (42,376) (2,489) (38,993) (50,514) (55,694)
Policy Loan Repayments and Interest ... 14,482 6,096 2,826 25,772 37,163 22,039
Surrenders, Withdrawals and Death
Benefits ............................ (11,252) 11 (23,967) (7,076) (155,708) (145,247)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option .... 0 (10,788) 67 (463,543) 6,557 63,760
Deferred Sales Charges ................ (2,033) (2,098) (2,062) (9,621) (12,130) (12,315)
-------- --------- --------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM PREMIUM
PAYMENTS AND OTHER OPERATING
TRANSFERS ............................. (4,321) (49,141) (25,625) (507,942) (174,662) (111,622)
-------- --------- --------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RETAINED IN THE
ACCOUNT [Note 7] ...................... 0 (2,242) 454 0 (2,768) 169
-------- --------- --------- ---------- ---------- ----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS ............................ (1,514) (34,978) (7,897) (468,555) (229,499) 78,905
NET ASSETS
Beginning of year ..................... 257,051 292,029 299,926 1,501,948 1,731,447 1,652,542
-------- --------- --------- ---------- ---------- ----------
End of year ........................... $255,537 $ 257,051 $ 292,029 $1,033,393 $1,501,948 $1,731,447
======== ========= ========= ========== ========== ==========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A11
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ---------------------------------------- --------------------------------------------------------------------------------------
STOCK INDEX PORTFOLIO EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
- ---------------------------------------- ----------------------------------------- -----------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (2,362) $ (1,715) $ 4,004 $ 17,582 $ 25,058 $ 19,529 $ (1,422) $ (1,270) $ (3,682)
28,562 24,345 44,424 187,634 105,282 152,241 0 15,649 47,548
115,978 207,426 106,189 48,028 29,851 39,726 (16,486) (21,360) 21,682
212,498 62,489 194,261 (78,782) (251,690) 206,374 106,702 (44,360) (130,229)
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
354,676 292,545 348,878 174,462 (91,499) 417,870 88,794 (51,341) (64,681)
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(24,188) 21,155 62,355 (18,226) (2,822) 119 (45,139) (18,020) 111
(107,547) (52,324) (24,090) (64,882) (101,914) (35,247) (2,888) (18,301) (6,301)
134,292 57,906 11,027 45,355 16,558 17,209 23,771 3,587 12,054
(183,519) (584,056) (141,482) (21,574) (8,731) (31,496) (5,765) (40,161) (99,530)
758,108 222,308 248,431 (158,301) 265,351 131,368 40,186 (3,170) (72,752)
(14,585) (11,350) (8,902) (12,321) (12,723) (9,565) (2,579) (2,057) (3,337)
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
562,561 (346,361) 147,339 (229,949) 155,719 72,388 7,586 (78,122) (169,755)
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
0 7,664 24,629 0 1,750 12,335 0 (3,450) 2,927
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
917,237 (46,152) 520,846 (55,487) 65,970 502,593 96,380 (132,913) (231,509)
1,529,564 1,575,716 1,054,870 1,749,736 1,683,766 1,181,173 224,740 357,653 589,162
- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$2,446,801 $ 1,529,564 $ 1,575,716 $ 1,694,249 $ 1,749,736 $ 1,683,766 $ 321,120 $ 224,740 $ 357,653
========== =========== =========== =========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A12
<PAGE>
<TABLE>
<CAPTION>
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, 1999, 1998 and 1997
SUBACCOUNTS
-----------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
---------------------------------- ---------------------------------------
1999 1998 1997 1999 1998 1997
-------- --------- --------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .......... $ (5,948) $ 425 $ (1,019) $ (3,390) $ 10,059 $ 8,505
Capital gains distributions received .. 4,686 25,262 29,175 0 0 0
Realized gain (loss) on shares
redeemed ............................ 43,643 42,895 85,779 (1,985) 1,486 (655)
Net change in unrealized gain (loss)
on investments ...................... 243,341 56,781 (47,732) (5,219) 796 4,796
-------- --------- --------- --------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............. 285,722 125,363 66,203 (10,594) 12,341 12,646
-------- --------- --------- --------- ----------- -----------
PREMIUM PAYMENTS
AND OTHER OPERATING TRANSFERS
Contract Owner Net Payments ........... 37,778 (6,226) 7,919 (2) 206 0
Policy Loans .......................... (20,327) (64,791) (9,778) (584) (602) (585)
Policy Loan Repayments and Interest ... 10,238 71,568 7,391 563 565 570
Surrenders, Withdrawals and Death
Benefits ............................ (17,335) (100,413) (24) 0 38 (13)
Net Transfers From (To) Other
Subaccounts or Fixed Rate Option .... 53,193 (20,157) (292,955) (123,493) 92,001 21,766
Deferred Sales Charges ................ (5,112) (4,673) (5,629) (1,712) (1,248) (1,018)
-------- --------- --------- --------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM PREMIUM
PAYMENTS AND OTHER OPERATING
TRANSFERS ............................. 58,435 (124,692) (293,076) (125,228) 90,960 20,720
-------- --------- --------- --------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RETAINED IN THE
ACCOUNT [Note 7] ...................... 0 883 (13,963) 0 (1,854) (3,748)
-------- --------- --------- --------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS ................................ 344,157 1,554 (240,836) (135,822) 101,447 29,618
NET ASSETS
Beginning of year ..................... 606,421 604,867 845,703 301,270 199,823 170,205
-------- --------- --------- --------- ----------- -----------
End of year ........................... $950,578 $ 606,421 $ 604,867 $ 165,448 $ 301,270 $ 199,823
======== ========= ========= ========= =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A13
<PAGE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO SMALL CAPITALIZATION STOCK PORTFOLIO
- ------------------------------------------ ----------------------------------------- ------------------------------------------
1999 1998 1997 1999 1998 1997 1999 1998 1997
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (1,649) $ 4,525 $ 4,020 $ (20,258) $ (7,862) $ (4,031) $ (5,353) $ (3,352) $ (2,375)
0 116 1,907 109,845 16,483 30,119 8,172 29,229 31,445
100 6,039 1,286 129,709 15,972 15,281 (4,080) 11,182 41,012
(6,456) 100 661 481,466 212,008 41,164 44,553 (30,068) 13,028
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(8,005) 10,780 7,874 700,762 236,601 82,533 43,292 6,991 83,110
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
3 18,792 -- 104,197 29,453 3,729 (10,689) 8,504 3,727
(5,832) -- -- (67,604) (17,836) (2,193) (19,515) (20,258) (7,801)
11,123 5,431 5,102 83,647 2,531 3,690 9,042 3,125 11,951
0 -- (12,957) (75,249) (9) (32,958) (10,503) (5,357) (152,820)
77,940 (10,062) (2,024) 977,081 358,643 238,344 (12,589) (17,590) 336,751
(1,512) (1,377) (1,077) (11,416) (5,097) (2,488) (2,917) (3,325) (2,495)
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
81,722 12,784 (10,956) 1,010,656 367,685 208,124 (47,171) (34,901) 189,313
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
0 (114) (20,950) 0 6,868 (15,249) 0 8,443 6,997
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
73,717 23,450 (24,032) 1,711,418 611,154 275,408 (3,879) (19,467) 279,420
114,954 91,504 115,536 1,144,097 532,943 257,535 449,416 468,883 189,463
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 188,671 $ 114,954 $ 91,504 $ 2,855,515 $ 1,144,097 $ 532,943 $ 445,537 $ 449,416 $ 468,883
=========== =========== =========== =========== =========== =========== =========== =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES A15 THROUGH A19
</TABLE>
A14
<PAGE>
NOTES TO FINANCIAL STATEMENTS OF
PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
DECEMBER 31, 1999
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
accounting principles generally accepted in the United States
("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.
Receivable from (Payable to) Pruco Life Insurance Company of New
Jersey--At times, Pruco Life of New Jersey may owe an amount to or
expect to receive an amount from the Account primarily related to
processing contract owner payments, surrenders, withdrawals and death
benefits. This amount is reflected in the Account's Statement of Net
Assets as either a receivable from or payable to Pruco Life of New
Jersey. The receivable and or payable does not have an effect on the
Contract owner's account or the related unit value.
A15
<PAGE>
NOTE 3: INVESTMENT INFORMATION FOR THE PRUDENTIAL SERIES FUND, INC. PORTFOLIOS
The net asset value per share for each portfolio of the Series Fund,
the number of shares (rounded) of each portfolio held by the
subaccounts of the Account and the aggregate cost of investments in
such shares at December 31, 1999 were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Number of shares (rounded): 243,976 233,550 265,984 601,803 973,864
Net asset value per share: $ 10.00 $ 10.95 $ 28.90 $ 17.64 $ 15.36
Cost: $ 2,439,764 $ 2,519,974 $ 6,454,027 $ 9,669,406 $13,818,754
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
----------------------------------------------------------------------------------------
ZERO
COUPON HIGH YIELD STOCK EQUITY NATURAL
BOND 2000 BOND INDEX INCOME RESOURCES
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Number of shares (rounded): 19,673 137,419 55,156 86,789 18,476
Net asset value per share: $ 12.99 $ 7.52 $ 44.45 $ 19.52 $ 17.38
Cost: $ 244,834 $ 1,095,709 $ 1,709,532 $ 1,646,756 $ 323,262
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
----------------------------------------------------------------------------------------
ZERO SMALL
GOVERNMENT COUPON PRUDENTIAL CAPITALIZATION
GLOBAL INCOME BOND 2005 JENNISON STOCK
----------- ----------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Number of shares (rounded): 31,013 14,328 14,879 88,410 27,733
Net asset value per share: $ 30.98 $ 11.55 $ 12.68 $ 32.39 $ 16.25
Cost: $ 612,330 $ 169,001 $ 188,694 $ 2,114,300 $ 410,136
</TABLE>
NOTE 4: CONTRACT OWNER UNIT INFORMATION
Outstanding contract owner units (rounded), unit values and total
value of contract owner equity at December 31, 1999 were as follows:
<TABLE>
<CAPTION>
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 (rounded): 1,313,002 1,010,524 1,237,986 2,558,016 4,334,165
Unit Value $ 1.87949 $ 2.53066 $ 6.20908 $ 4.14686 $ 3.45135
------------ ----------- ----------- ------------ ------------
TOTAL CONTRACT OWNER EQUITY $ 2,467,774 $ 2,557,293 $ 7,686,756 $ 10,607,734 $ 14,958,721
============ =========== =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
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 (rounded): 88,143 452,012 426,894 388,515 110,210
Unit Value $ 2.89913 $ 2.28621 $ 5.73164 $ 4.36083 $ 2.91371
----------- ----------- ----------- ----------- ----------
TOTAL CONTRACT OWNER EQUITY $ 255,537 $ 1,033,393 $ 2,446,801 $ 1,694,249 $ 321,120
=========== =========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
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 (rounded): 380,906 85,334 81,176 818,492 234,869
Unit Value $ 2.49557 $ 1.93883 $ 2.32423 $ 3.48875 $ 1.89696
---------- ---------- ---------- ----------- ----------
TOTAL CONTRACT OWNER EQUITY $ 950,578 $ 165,448 $ 188,671 $ 2,855,515 $ 445,537
========== ========== ========== =========== ==========
</TABLE>
A16
<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 Charges
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.
NOTE 7: 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.
A17
<PAGE>
NOTE 8: UNIT ACTIVITY
Transactions in units (including transfers among subaccounts) for the
years ended December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
SUBACCOUNTS
-------------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO DIVERSIFIED BOND PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 960,822 981,797 924,445 0 44,078 37,991
Contract Owner
Redemptions: (863,534) (863,669) (1,004,731) (95,811) (80,896) (222,446)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-------------------------------------------------------------------------------------------------
EQUITY PORTFOLIO FLEXIBLE MANAGED PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 97,623 104,232 121,424 52,876 148,881 143,246
Contract Owner
Redemptions: (361,437) (235,745) (215,745) (338,262) (584,099) (464,817)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-------------------------------------------------------------------------------------------------
CONSERVATIVE BALANCED PORTFOLIO ZERO COUPON BOND 2000 PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 186,285 249,847 204,624 5,054 2,174 1,120
Contract Owner
Redemptions: (561,166) (1,083,702) (1,017,306) (6,560) (20,257) (11,054)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-------------------------------------------------------------------------------------------------
HIGH YIELD BOND PORTFOLIO STOCK INDEX PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 142,762 79,042 51,563 203,902 119,428 159,486
Contract Owner
Redemptions: (369,471) (153,795) (106,259) (94,738) (216,834) (116,894)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-------------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO NATURAL RESOURCES PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 49,919 84,855 85,762 25,859 5,480 63,146
Contract Owner
Redemptions: (107,317) (52,628) (67,566) (26,871) (38,814) (127,876)
</TABLE>
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-------------------------------------------------------------------------------------------------
GLOBAL PORTFOLIO GOVERNMENT INCOME PORTFOLIO
------------------------------------------ -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 195,400 144,103 161,641 29,271 127,332 24,482
Contract Owner
Redemptions: (170,350) (224,970) (358,283) (93,251) (83,748) (14,055)
</TABLE>
A18
<PAGE>
NOTE 8: UNIT ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
SUBACCOUNTS (CONTINUED)
-----------------------------------------------------------------------------------------------
ZERO COUPON BOND 2005 PORTFOLIO PRUDENTIAL JENNISON PORTFOLIO
----------------------------------------- -------------------------------------------------
1999 1998 1997 1999 1998 1997
--------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Contract Owner
Contributions: 41,617 40,169 2,518 613,133 291,195 229,343
Contract Owner
Redemptions: (6,610) (34,868) (8,108) (255,289) (121,877) (109,539)
</TABLE>
SUBACCOUNTS (CONTINUED)
---------------------------------------------
SMALL CAPITALIZATION STOCK PORTFOLIO
---------------------------------------------
1999 1998 1997
--------- --------- ------------
Contract Owner
Contributions: 171,468 258,613 395,533
Contract Owner
Redemptions: (200,277) (264,541) (266,381)
NOTE 9: 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, 1999
were as follows:
<TABLE>
<CAPTION>
PORTFOLIOS
-----------------------------------------------------------------------------------------
MONEY DIVERSIFIED FLEXIBLE CONSERVATIVE
MARKET BOND EQUITY MANAGED BALANCED
------------- -------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Purchases ........ $ 1,611,843 $ 6,187 $ 418,075 $ 253,246 $ 305,881
Sales ............ $(1,471,124) $ (282,725) $ (2,068,523) $ (1,479,663) $ (1,725,054)
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
-----------------------------------------------------------------------------------------
ZERO COUPON
BOND HIGH YIELD STOCK EQUITY NATURAL
2000 BOND INDEX INCOME RESOURCES
------------- -------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Purchases ........ $ 2,561 $ 332,761 $ 942,260 $ 206,368 $ 56,511
Sales ............ $ (9,568) $ (857,088) $ (400,188) $ (457,399) $ (52,247)
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIOS (CONTINUED)
-----------------------------------------------------------------------------------------
ZERO COUPON SMALL
GOVERNMENT BOND PRUDENTIAL CAPITALIZATION
GLOBAL INCOME 2005 JENNISON STOCK
------------- -------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Purchases ........ $ 310,063 $ 57,810 $ 95,755 $ 1,599,051 $ 285,112
Sales ............ $ (250,035) $ (186,390) $ (15,701) $ (603,942) $ (332,517)
</TABLE>
A19
<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, 1999, 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 accounting principles
generally accepted in the United States. 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 auditing standards generally accepted in the United States, 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, 1999, provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
March 17, 2000
A20
<PAGE>
<PAGE>
Pruco Life Insurance Company of New Jersey
Statements of Financial Position
December 31, 1999 and 1998 (In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
----------------- ---------------
<S> <C> <C>
ASSETS
Fixed maturities
Available for sale, at fair value (amortized cost, 1999: $604,223; and $ 585,271 $ 622,990
1998: $617,758)
Held to maturity, at amortized cost (fair value, 1999: $6,938) 7,470 -
Policy loans 143,815 139,443
Short-term investments 27,473 53,761
Other long-term investments 2,520 2,421
----------------- ---------------
Total investments 766,549 818,615
Cash 117 45
Deferred policy acquisition costs 129,184 113,923
Accrued investment income 12,492 12,209
Receivables from affiliate 16,231 -
Other assets 474 15,379
Separate Account assets 1,827,484 1,450,986
----------------- ---------------
TOTAL ASSETS $2,752,531 $2,411,157
================= ===============
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities
Policyholders' account balances $ 414,917 $ 414,546
Future policy benefits and other policyholder liabilities 105,861 89,832
Cash collateral for loaned securities 17,900 34,424
Securities sold under agreements to repurchase - 27,210
Income taxes payable 27,829 25,325
Payables to affiliate - 3,492
Other liabilities 7,571 19,489
Separate Account liabilities 1,827,484 1,450,986
----------------- ---------------
Total liabilities 2,401,562 2,065,304
----------------- ---------------
Contingencies - (See Footnote 11)
Stockholder's Equity
Common stock, $5 par value;
400,000 shares, authorized;
issued and outstanding at
December 31, 1999 and 1998 2,000 2,000
Paid-in-capital 125,000 125,000
Retained earnings 230,057 217,260
Accumulated other comprehensive (loss) income (6,088) 1,593
----------------- ---------------
Total stockholder's equity 350,969 345,853
----------------- ---------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $2,752,531 $2,411,157
================= ===============
</TABLE>
See Notes to Financial Statements
B1
<PAGE>
Pruco Life Insurance Company of New Jersey
Statements of Operations and Comprehensive Income
Years Ended December 31, 1999, 1998, and 1997 (In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
---------------- ----------------- ----------------
<S> <C> <C> <C>
REVENUES
Premiums $ 6,742 $ 7,282 $ 6,832
Policy charges and fee income 52,714 53,152 56,687
Net investment income 47,600 47,032 46,324
Realized investment (losses) gains, net (5,013) 8,446 1,707
Asset management fees 7,407 5,641 5,287
Other income 386 114 -
---------------- ----------------- ----------------
Total revenues 109,836 121,667 116,837
---------------- ----------------- ----------------
BENEFITS AND EXPENSES
Policyholders' benefits 26,237 30,679 39,727
Interest credited to policyholders' account 18,846 19,038 19,372
balances
General, administrative and other expenses 45,065 22,557 27,541
---------------- ----------------- ----------------
Total benefits and expenses 90,148 72,274 86,640
---------------- ----------------- ----------------
Income from operations before income taxes 19,688 49,393 30,197
---------------- ----------------- ----------------
Income tax provision 6,891 17,570 10,974
---------------- ----------------- ----------------
NET INCOME $ 12,797 $ 31,823 $ 19,223
================ ================= ================
Net unrealized investment (losses) gains on
securities, net of reclassification adjustment and
taxes (7,681) (1,363) 924
---------------- ----------------- ----------------
TOTAL COMPREHENSIVE INCOME $ 5,116 $ 30,460 $ 20,147
================ ================= ================
</TABLE>
See Notes to Financial Statements
B2
<PAGE>
Pruco Life Insurance Company of New Jersey
Statements of Changes in Stockholder's Equity
Years Ended December 31, 1999, 1998, and 1997 (In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Accumulated
other Total
Common Paid - in - Retained comprehensive stockholder's
stock capital earnings income (loss) equity
------------ ----------- --------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1997 $ 2,000 $ 125,000 $ 166,214 $ 2,032 $ 295,246
Net income - - 19,223 - 19,223
Change in net unrealized
investment (losses) gains,
net of reclassification
and taxes 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 (losses) gains,
net of reclassification
and taxes - - - (1,363) (1,363)
--------- --------- --------- --------- ---------
Balance, December 31, 1998 2,000 125,000 217,260 1,593 345,853
Net income - - 12,797 - 12,797
Change in net unrealized
investment (losses) gains,
net of reclassification
and taxes - - - (7,681) (7,681)
--------- --------- --------- --------- ---------
Balance, December 31, 1999 $ 2,000 $ 125,000 $ 230,057 $ (6,088) $ 350,969
========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
B3
<PAGE>
Pruco Life Insurance Company of New Jersey
Statements of Cash Flows
Years Ended December 31, 1999, 1998, and 1997 (In Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998 1997
--------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,797 $ 31,823 $ 19,223
Adjustments to reconcile net income to net cash (used in)
provided by
operating activities:
Policy charges and fee income (11,399) (5,180) (7,841)
Interest credited to policyholders' account balances 18,846 19,038 19,372
Realized investment losses (gains), net 5,013 (8,446) (1,707)
Amortization and other non-cash items 18,092 2,497 (342)
Change in:
Future policy benefits and other policyholders' 16,029 5,304 8,277
liabilities
Accrued investment income (283) 1,866 (1,167)
Policy loans (4,372) (12,137) (13,388)
Payable to affiliates (19,723) (815) (1,752)
Deferred policy acquisition costs (15,261) (12,298) 5,340
Income taxes payable 2,504 (9,826) 9,006
Other, net 2,987 (8,954) 2,812
----------- ----------- -----------
Cash Flows From Operating Activities 25,230 2,872 37,833
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities:
Available for sale 702,380 1,001,096 645,355
Payments for the purchase of:
Fixed maturities:
Available for sale (695,198) (1,029,988) (679,709)
Held to maturity (7,470) -- --
Other long term investments, net 99 (854) 1,629
Cash collateral for loaned securities, net (16,524) 761 33,663
Securities sold under agreements to repurchase, net (27,210) 27,210 --
Short term investments, net 26,296 (1,297) (35,461)
----------- ----------- -----------
Cash Flows Used in Investing Activities (17,627) (3,072) (34,523)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 256,842 298,391 134,020
Withdrawals (264,373) (298,149) (141,255)
----------- ----------- -----------
Cash Flows (Used in) From Financing Activities (7,531) 242 (7,235)
----------- ----------- -----------
Net increase (decrease) in Cash 72 42 (3,925)
Cash, beginning of year 45 3 3,928
----------- ----------- -----------
CASH, END OF PERIOD $ 117 $ 45 $ 3
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 480 $ 27,083 $ 1,896
=========== =========== ===========
</TABLE>
See Notes to Financial Statements
B4
<PAGE>
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. Prudential is currently considering reorganizing itself into a
publicly traded stock company through a process known as "demutualization."
On February 10, 1998, Prudential's Board of Directors authorized management
to take the preliminary steps necessary to allow Prudential 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 Prudential's Board of Directors, a
public hearing, approval by two-thirds of the qualified policyholders who
vote on the plan review and approval by the New Jersey Department of Banking
and Insurance. Prudential's management is in the process of developing a
proposed plan of demutualization, although there can be no assurance that
Prudential's Board of Directors will approve such a plan. Prudential's
decision whether to demutualize is not expected to have a material effect on
the Company's operations.
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.
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 accounting principles generally accepted in the United States ("GAAP").
The Company has extensive transactions and relationships with Prudential and
other affiliates, as more fully described in Footnote 13. Due to these
relationships, it is possible that the terms of those transactions are not
the same as those that would result from transactions among wholly unrelated
parties.
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, in particular deferred policy acquisition costs
("DAC") and future policy benefits, 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 DAC and policyholders' account balances 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, including 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 (losses), net, are computed using the specific
identification method. Costs of fixed maturities are adjusted for impairments
considered to be other than temporary.
Cash
Cash includes cash on hand, amounts due from banks, and money market
instruments.
B5
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
Policy acquisition costs related to interest-sensitive products and certain
investment-type products are deferred and amortized over the expected life of
the contracts (periods ranging from 15 to 30 years) in proportion to
estimated gross profits arising principally from investment results,
mortality and expense margins, and surrender charges based on historical and
anticipated future experience, which is updated periodically. The effect of
changes to estimated gross profits on unamortized deferred acquisition costs
is reflected in "General and administrative expenses" 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% and 105% of the fair value of the domestic and
foreign securities, respectively. 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 because the debtor typically has the right to redeem the
collateral on short notice. 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. Assets to be repurchased are the same, or
substantially the same, as the assets transferred and the transferor, through
right of substitution, maintains the right and ability to redeem the
collateral on short notice. The market value of securities to be repurchased
is monitored and additional collateral is obtained, 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
Consolidated Statements of Operations. Mortality, policy administration and
surrender charges on the accounts are included in "Policy charges and fee
income."
B6
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 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.
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 DAC.
Asset Management Fees
The Company receives asset management fee income from Separate Account
policyholder account balances invested in the Prudential Series Fund ("PSF").
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
seek to reduce 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 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 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.
B7
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("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 does not
apply to most traditional insurance contracts. However, certain hybrid
contracts that contain features which may 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.
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).
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
derivatives 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, as amended, as of January 1, 2001 and is currently
assessing the effect of the new standard.
In October 1998, the American Institute of Certified Public Accountants
("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 presentation.
B8
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS
Fixed Maturities
The following tables provide additional information relating to fixed
maturities as of December 31:
<TABLE>
<CAPTION>
1999
--------------------------------------------------------------
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 $ 9,489 $ - $ 63 $ 9,426
Foreign government bonds 5,000 - 68 4,932
Corporate Securities 588,695 681 19,499 569,877
Mortgage-backed securities 1,039 - 3 1,036
--------- ------- -------- ---------
Total fixed maturities available for $ 604,223 $ 681 $ 19,633 $ 585,271
sale
Fixed Maturities held to maturity
Corporate Securities $ 7,470 $ - $ 531 $ 6,938
--------- ------- -------- ---------
Total fixed maturities held to $ 7,470 $ - $ 532 $ 6,938
maturity
========= ======== ======== =========
</TABLE>
<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 529,844 7,273 2,633 534,484
Mortgage-backed securities 1,507 - 1 1,506
--------- ------- -------- ---------
Total fixed maturities available for
sale $ 617,758 $ 8,420 $ 3,188 $ 622,990
========= ======== ======== =========
</TABLE>
B9
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. INVESTMENTS (continued)
The amortized cost and estimated fair value of fixed maturities, categorized
by contractual maturities at December 31, 1999, are shown below:
<TABLE>
<CAPTION>
Available for Sale Held to Maturity
------------------------------------ ---------------------------------------
Amortized Estimated Fair Amortized Estimated Fair
Cost Value Cost Value
------------------------------------ ------------------- ------------------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Due in one year or less $ 78,150 $ 76,922 $ - $ -
Due after one year through five 187,710 183,686 - -
years
Due after five years through ten 268,224 257,241 7,470 6,938
years
Due after ten years 70,139 67,422 - -
---------- ----------- --------- ----------
Total $ 604,223 $ 585,271 $ 7,470 $ 6,938
========== =========== ========= ==========
</TABLE>
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 1999,
1998, and 1997 were $698.8 million, $990.7 million, and $635.4 million,
respectively. Gross gains of $3.5 million, $8.8 million, and $2.9 million,
and gross losses of $8.0 million, $1.8 million, and $1.2 million were
realized on those sales during 1999, 1998, and 1997, respectively. Proceeds
from maturities of fixed maturities available for sale during 1999, 1998, and
1997 were $3.6 million, $10.4 million, and $10.0 million, respectively.
During the years ended December 31, 1999, 1998, and 1997, there were no
securities classified as held to maturity that were sold.
Special Deposits
Fixed maturities of $.5 million at both December 31, 1999 and 1998
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>
1999 1998 1997
---------- ---------- -----------
(In Thousands)
<S> <C> <C> <C>
Fixed maturities - AFS & HTM $ 39,538 $ 39,478 $ 37,563
Policy loans 7,641 7,350 6,596
Short-term investments 2,516 3,502 3,023
Other 60 (842) 333
--------- --------- ----------
Gross investment income 49,755 49,488 47,515
Less investment expenses (2,155) (2,456) (1,191)
--------- --------- ----------
Net investment income $ 47,600 $ 47,032 $ 46,324
========= ========== ==========
Realized investment gains (losses), net, including charges for other than
temporary reductions in value, for the years ended December 31, were as
follows:
1999 1998 1997
------------------ ------------------ -------------------
(In Thousands)
Realized investment gains $ 6,436 $ 17,957 $ 2,898
Realized investment losses (11,449) (9,511) (1,191)
---------- ---------- ---------
Realized investment (losses) gains, net $ (5,013) $ 8,446 $ 1,707
========== ========== =========
</TABLE>
B10
<PAGE>
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 including in "Other comprehensive income (loss)" those
items that are included as part of "net income" for a period that also had
been part of "Other comprehensive income (loss)" in earlier periods. The
amounts for the years ended December 31, net of tax, are as follows:
<TABLE>
<CAPTION>
Accumulated
other
comprehensive
income (loss)
Deferred Deferred related to net
Unrealized policy Policyholders' income tax unrealized
gains (losses) acquisition Account (liability) investment
on investments costs Balances benefit gains (losses)
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ 4,170 $ (1,209) $330 $ (1,259) $ 2,032
Net investment gains on investments
arising during the period 4,788 (1,676) 3,112
Reclassification adjustment for
(losses) included in net income (1,706) 597 (1,109)
Impact of net unrealized investment
(losses) on deferred policy
acquisition costs (2,170) 759 (1,411)
Impact of net unrealized investment
gains on policyholders' account
balances 519 (187) 332
--------- -------- --------- --------- --------
Balance, December 31, 1997 $ 7,252 $ (3,379) $ 849 $ (1,766) $ 2,956
Net investment gains on investments
arising during the period 4,966 (1,662) 3,304
Reclassification adjustment for
(losses) included in net income (6,985) 2,338 (4,647)
Impact of net unrealized investment
(losses) on deferred policy
acquisition costs (166) 58 (108)
Impact of net unrealized investment
gains on policyholders' account
balances 138 (50) 88
--------- -------- --------- --------- --------
Balance, December 31, 1998 $ 5,233 $(3,545) $ 987 $ (1,082) $ 1,593
Net investment (losses) on investments
arising during the period (28,794) 10,366 (18,428)
Reclassification adjustment for gains
included in net income 4,610 (1,660) 2,950
Impact of net unrealized investment
gains on deferred policy acquisition
costs 14,681 (5,285) 9,396
Impact of net unrealized investment
(losses) on policyholders' account
balances (2,499) 900 (1,599)
--------- -------- --------- --------- --------
Balance, December 31, 1999 $ (18,951) $ 11,136 $ (1,512) $ 3,239 $ (6,088)
========= ========= ========= ========= ========
</TABLE>
B11
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
4. DEFERRED POLICY ACQUISITION COSTS
The balance of and changes in deferred policy acquisition costs for the year
ended December 31, are as follows:
<TABLE>
<CAPTION>
1999
---------------------
(In Thousands)
<S> <C>
Balance, beginning of year $ 113,923
Capitalization of commissions, sales and issue 13,439
expenses
Amortization (12,859)
Change in unrealized investment losses 14,681
---------------------
Balance, end of year $ 129,184
=====================
</TABLE>
5. POLICYHOLDERS' LIABILITIES
Future policy benefits and other policyholder liabilities at December 31 are
as follows:
<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
(In Thousands)
<S> <C> <C>
Life insurance $ 100,686 $ 84,825
Annuities 5,175 5,007
------------------- -------------------
$ 105,861 $ 89,832
=================== ===================
</TABLE>
Life insurance liabilities include reserves for death and endowment policy
benefits. Annuity liabilities include reserves for immediate annuities.
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 3.5% to 8.75% Present value of
annuities Mortality Table with expected future payment
certain modifications based on historical
experience
Policyholders' account balances at December 31, are as follows:
<CAPTION>
1999 1998
------------------- -------------------
(In Thousands)
<S> <C> <C>
Individual annuities $ 150,687 $ 148,327
Interest-sensitive life contracts 264,230 266,219
------------------- -------------------
$ 414,917 $ 414,546
=================== ===================
</TABLE>
Policyholders' account balances for interest-sensitive life and individual
annuities 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.
B12
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. POLICYHOLDERS' LIABILITIES (continued)
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 4.0% to 5.4 % Various up to 10 years
contracts
Individual annuities 3.0% to 5.6% 0% to 8% for up to 8 years
</TABLE>
6. REINSURANCE
The Company participates in reinsurance with Prudential 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 of 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.
<TABLE>
<CAPTION>
1999 1998 1997
------------------ ------------------ -------------------
(In Thousands)
<S> <C> <C> <C>
Reinsurance premiums ceded - affiliated $ (17) $ (28) $ (12)
================== ================== ===================
Policyholders' benefits ceded $ 0 $ 0 $ 0
================== ================== ===================
</TABLE>
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:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
(In Thousands)
<S> <C> <C>
Life insurance - affiliated $16 $ 31
============ ============
</TABLE>
B13
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. INCOME TAXES
The components of income taxes for the years ended December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- -----------------
(In Thousands)
<S> <C> <C> <C>
Current tax expense (benefit):
U.S. $ 6,769 $14,786 $12,880
State and local 178 523 399
----------------- ---------------- -----------------
Total 6,947 15,309 13,279
----------------- ---------------- -----------------
Deferred tax expense (benefit):
U.S. (54) 2,198 (2,305)
State and local (2) 63 -
----------------- ---------------- -----------------
Total (56) 2,261 (2,305)
----------------- ---------------- -----------------
Total income tax expense $ 6,891 $17,570 $10,974
================= ================ =================
</TABLE>
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:
<TABLE>
<CAPTION>
1999 1998 1997
----------------- ---------------- -----------------
(In Thousands)
<S> <C> <C> <C>
Expected federal income tax expense $6,891 $17,288 $10,569
State and local income taxes 115 381 259
Other (115) (99) 146
----------------- ---------------- -----------------
Total income tax expense $6,891 $17,570 $10,974
================= ================ =================
</TABLE>
Deferred tax assets and liabilities at December 31, resulted from the items
listed in the following table:
<TABLE>
<CAPTION>
1999 1998
---------------- ----------------
(In Thousands)
<S> <C> <C>
Deferred tax assets:
Insurance reserves $ 9,711 $10,016
Net unrealized (gains) losses on 6,823 (1,884)
securities
Investment gains 2,083 -
---------------- ----------------
Deferred tax assets $18,617 $8,132
---------------- ----------------
Deferred tax liabilities:
Deferred acquisition costs 37,174 28,509
Investment gains - 963
Other 879 2,375
---------------- ----------------
Deferred tax liabilities 38,053 31,847
---------------- ----------------
Net deferred tax liability $19,436 $23,715
================ ================
</TABLE>
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, 1999 and
1998, respectively, the Company had no federal or state operating loss
carryforwards for tax purposes.
B14
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
7. INCOME TAXES (continued)
The Internal Revenue Service (the "Service") has completed examinations of
the consolidated federal income tax returns through 1992. The Service has
begun their examination of the years 1993 through 1995.
8. 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>
1999 1998 1997
------- ------ --------
(In Thousands)
<S> <C> <C> <C>
Statutory net income $ 20,221 $ 18,704 $ 18,306
Adjustments to reconcile to net income on a GAAP basis:
Amortization and capitalization of deferred 580 12,464 (3,170)
acquisition costs
Deferred premium (314) 534 198
Insurance revenues and expenses 983 (808) 2,324
Income taxes (139) (2,973) 2,517
Valuation of investments (3,199) 5,896 1,707
Amortization of IMR (2,089) (2,102) (1,850)
Asset management fees (2,050) -- --
Other, net (1,196) 108 (809)
-------- -------- --------
GAAP net income $ 12,797 $ 31,823 $ 19,223
======== ======== ========
<CAPTION>
1999 1998
---------------- ----------------
(In Thousands)
<S> <C> <C>
Statutory surplus $274,437 $252,530
Adjustments to reconcile to equity on a GAAP basis:
Valuation of investments (9,644) 20,799
Deferred acquisition costs 129,184 113,923
Deferred premium (1,159) (1,473)
Insurance liabilities (23,889) (18,141)
Income Taxes (17,977) (21,716)
Asset management fees (2,050) -
Other, net 2,067 (69)
---------------- ----------------
GAAP stockholder's equity $350,969 $345,853
================ ================
</TABLE>
9. 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).
B15
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
9. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
Fixed maturities
Estimated fair values for fixed maturities are based on quoted market prices
or estimates from independent pricing services.
Policy loans
The 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.
Investment contracts
Estimated fair values of investment contracts are derived by using the
policyholder's account balance.
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>
1999 1998
---------------------------------- -----------------------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
---------------- ----------------- ----------------- -----------------
(In Thousands)
<S> <C> <C> <C> <C>
Financial Assets:
Fixed maturities:
Available for sale $ 585,271 $585,271 $622,990 $622,990
Held to maturity 7,470 6,938 - -
Policy loans 143,815 136,990 139,443 146,504
Short-term investments 27,473 27,473 53,761 53,761
Cash 117 117 45 45
Separate Accounts assets 1,827,484 1,827,484 1,450,986 1,450,986
Financial Liabilities:
Investment contracts $ 92,096 $ 92,096 $ 87,948 $ 87,948
Cash collateral for loaned 17,900 17,900 34,424 34,424
securities
Securities sold under
agreements to repurchase - - 27,210 27,210
Separate Accounts liabilities 1,827,484 1,827,484 1,450,986 1,450,986
Derivatives 597 597 - -
</TABLE>
10. 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 and to manage the duration of assets to better
match the duration of liabilities supported by those assets. 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. Treasury futures move substantially in value as interest
rates change and can be used to either modify 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.
B16
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
10. DERIVATIVE AND OFF-BALANCE SHEET CREDIT-RELATED INSTRUMENTS (continued)
If futures 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 notional
and fair value of futures contracts was $46.4 million and $(.6) million at
December 31, 1999, respectively. There were no open futures contracts at
December 31, 1998.
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. As of December 31, 1999
100% of the notional consisted of interest rate derivatives.
11. CONTINGENCIES
Various lawsuits against the Company have arisen in the course of the
Company's business. In certain of these matters, large and/or indeterminate
amounts are sought.
On October 28, 1996, the Company entered into a Stipulation of Settlement
with attorneys for the plaintiffs in a consolidated class action lawsuit
pending in a Multi-District Litigation proceeding in the U.S. District Court
for the District of New Jersey. The class action suit involved alleged
improprieties in connection with the sale, servicing and operation of
permanent life insurance policies from 1982 through 1995. Pursuant to the
settlement, the Company has participated in a remediation program pursuant to
which relief was offered to policyowners who were misled when they purchased
permanent life insurance policies in the United States from 1982 to 1995.
Prudential has agreed to indemnify the Company for any liability incurred in
connection with that litigation.
The balance of the Company's litigation is subject to many uncertainties, and
given the complexity and scope, the outcomes cannot be predicted with
precision. Management believes that any ultimate liability which could result
from such litigation would not have a material adverse effect on the
Company's financial position.
12. 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 earned surplus derived from
realized net profits.
13. RELATED PARTY TRANSACTIONS
Service Agreements
Prudential and the Company operate under service and lease agreements whereby
services of officers and employees, supplies, use of equipment and office
space are provided by Prudential. Prudential periodically reviews its methods
for determining the level of administrative expenses charged to the Company.
Late in 1998, Prudential revised its allocation methodology to more closely
align allocations based on business processes, resulting in increased
allocations from 1998 levels. Management believes that the updated
methodology is reasonable and better reflects actual costs incurred by
Prudential to process transactions on behalf of the Company. The net cost of
these services allocated to the Company were $28.3 million, $23.5 million and
$16.2 million for the years ended December 31, 1999, 1998, and 1997,
respectively.
In addition, the Company received allocated distribution expenses from
Prudential's retail agency network. Beginning in 1999, market based
distribution transfer pricing was the basis for allocating costs to each
product line that distributes products through Prudential's retail agency
channels. A majority of these distribution expenses have been capitalized by
the Company as DAC.
The Company receives asset management fees from Pruco Life for its
policyholder account balances invested in the Prudential Series Fund ("PSF")
managed by Pruco Life. The Company received from Pruco Life its allocable
shares of such compensation in the amount of $7.4 million, $5.6 million, and
$5.3 million, during 1999, 1998, and 1997, respectively, recorded as "Asset
management fee income" in the Statements of Operations and Comprehensive
Income.
B17
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
13. RELATED PARTY TRANSACTIONS (continued)
The Company pays an asset management fee to Prudential Global Asset
Management ("PGAM") for managing the Separate Account investment portfolio.
The expense for the year was $3.0 million, which is shown in general,
administrative and other expenses.
The Company has sold a Corporate Owned Life Insurance ("COLI") policy to
Prudential. The cash surrender value included in Separate Accounts at
December 31, 1999 was $199.0 million.
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, 1999,
1998, and 1997.
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, 1999.
B18
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholder 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 (an indirect, wholly-owned
subsidiary of the Prudential Insurance Company of America) at December 31,
1999 and 1998, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. 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
auditing standards generally accepted in the United States 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
March 21, 2000
B19
<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 7O 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 6)
(c) Contract page 6 for use in New York. (Note 6)
(d) Contract jacket for use in New Jersey.
(e) Contract page 5 for use in New Jersey. (Note 6)
(f) Contract page 6 for use in New Jersey. (Note 6)
(g) Contract page 7 for use in New York. (Note 6)
(h) Contract page 8 for use in New York. (Note 6)
(i) Contract page 9 for use in New York. (Note 6)
(j) Contract page 10 for use in New York. (Note 6)
(k) Contract page 9 for use in New Jersey. (Note 6)
(l) Contract page 11 for use in New York. (Note 6)
(m) Contract page 17 for use in New Jersey and New York.
(Note 6)
II-2
<PAGE>
(n) Contract page 10 for use in New Jersey. (Note 6)
(o) Contract jacket for use in New York. (Note 6)
(p) Contract page 7 for use in New Jersey. (Note 6)
(q) Contract page 8 for use in New Jersey. (Note 6)
(r) Contract page 13 for use in New York. (Note 6)
(6) (a) Articles of Incorporation of Pruco Life Insurance
Company of New Jersey, as amended February 12, 1998.
(Note 7)
(b) By-laws of Pruco Life Insurance Company of New Jersey,
as amended August 4, 1999. (Note 2)
(7) Not Applicable
(8) Not Applicable
(9) Not Applicable
(10) (a) Application Form for Flexible Premium Variable Life
Insurance Contract. (Note 6)
(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 6)
(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 6)
(13) Living Needs Benefit Rider
(a) for use in New Jersey. (Note 6)
(b) for use in New York. (Note 6)
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) Ira J. Kleinman, Esther H. Milnes,
I. Edward Price. (Note 3)
(b) James J. Avery, Jr. (Note 4)
(c) Dennis G. Sullivan (Note 7)
(d) David R. Odenath, Jr. (Note 8)
(Note 1) Filed herewith
(Note 2) Incorporated by reference to Form S-6, Registration No. 333-85117,
filed August 13, 1999, on behalf of the Pruco Life of New Jersey
Variable Appreciable Account.
(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. 24 to Form
S-6, Registration No. 2-99537, filed April 29, 1999, on behalf of the
Pruco Life of New Jersey Single Premium Variable Life 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.
(Note 8) Incorporated by reference to Post-Effective Amendment No. 13 to Form
S-1, Registration No. 33-20018, filed on April 12, 2000 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 25th day of April, 2000.
(Seal) PRUCO LIFE OF NEW JERSEY SINGLE PREMIUM VARIABLE LIFE ACCOUNT
(Registrant)
BY: PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
(Depositor)
Attest: /s/ CLIFFORD E. KIRSCH By: /s/ 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. 25 to the Registration Statement has been signed
below by the following persons in the capacities indicated on this 25th day of
April, 2000.
SIGNATURE AND TITLE
- -------------------
/s/ * April 25, 2000
- ---------------------------------------
ESTHER H. MILNES
PRESIDENT AND DIRECTOR (PRINCIPAL
EXECUTIVE OFFICER)
/s/ *
- ---------------------------------------
DENNIS G. SULLIVAN
VICE PRESIDENT AND CHIEF ACCOUNTING
OFFICER (PRINCIPAL FINANCIAL AND
CHIEF ACCOUNTING OFFICER)
/s/ * *By: /s/ CLIFFORD E. KIRSCH
- --------------------------------------- -----------------------
JAMES J. AVERY, JR. CLIFFORD E. KIRSCH
DIRECTOR (Attorney-in-Fact)
/s/ *
- ---------------------------------------
IRA J. KLEINMAN
DIRECTOR
/s/ *
- ---------------------------------------
DAVID R. ODENATH, JR.
DIRECTOR
/s/ *
- ---------------------------------------
I. EDWARD PRICE
DIRECTOR
II-5
<PAGE>
EXHIBIT INDEX
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
CLIFFORD E. 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 24, 2000
Pruco Life Insurance Company
of New Jersey
213 Washington Street
Newark, New Jersey 07102-2992
Gentlemen:
In my capacity as Chief Legal Officer and Secretary 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,
/s/ CLIFFORD E. KIRSCH
- -----------------------------
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 24, 2000
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. 25 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,
/s/ IKWAHN OH
- -----------------------------------------------
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. 25 to the registration statement on Form S-6 (the
"Registration Statement") of our report dated March 17, 2000, 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 March 21, 2000, 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.
/s/ PricewaterhouseCoopers LLP
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New York, New York
April 24, 2000
