<PAGE> 1
'33 ACT FILE NO. 33-225
'40 ACT FILE NO. 811-405
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. ____ [ ]
POST-EFFECTIVE AMENDMENT NO. 19 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
AMENDMENT NO. 18 [X]
(CHECK APPROPRIATE BOX OR BOXES.)
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
(EXACT NAME OF REGISTRANT
FIDELITY STANDARD LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
11365 WEST OLYMPIC BOULEVARD, LOS ANGELES, CALIFORNIA 90064
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310)312-6100
RICHARD C. PEARSON
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
FIDELITY STANDARD LIFE INSURANCE COMPANY
11365 WEST OLYMPIC BOULEVARD, LOS ANGELES, CALIFORNIA 90064
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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, 1996 PURSUANT TO PARAGRAPH (B) OF RULE 485
______ 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A) OF RULE 485
______ ON [DATE] PURSUANT TO PARAGRAPH (A) OF RULE 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
______ THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.
THE COMPANY HAS ELECTED PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT
OF 1940 TO REGISTER AN INDEFINITE NUMBER OF SECURITIES. THE MOST RECENT RULE
24F-2 NOTICE WAS FILED ON FEBRUARY 23, 1996.
<PAGE> 2
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
CROSS REFERENCE SHEET PART A -
PROSPECTUS
<TABLE>
<CAPTION>
Item Number in Form N-4 Caption in Prospectus
- ----------------------- ---------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Definitions Glossary
3. Synopsis Summary of the Contracts
4. Condensed Financial Information Condensed Financial Information; Financial
Information
5. General Description of Registrant, Description of Fidelity Standard Life Insurance
Depositor and Portfolio Companies Company, The General Account, The Separate Account
and The Funds; Voting Rights; Servicing Agent
6. Deductions and Expenses Contract Charges
7. General Description of Variable Annuity Description of the Contracts; Accumulation Period;
Contracts Annuity Benefits
8. Annuity Period Annuity Benefits
9. Death Benefit Death Benefits
10. Purchases and Contract Value Description of the Contracts; Accumulation Period;
Principal Underwriter
11. Redemptions Accumulation Period
12. Taxes Federal Income Tax Status
13. Legal Proceedings Legal Proceedings
14. Table of Contents of the Table of Contents of the Statement of Additional
Statement of Additional Information Information
</TABLE>
<PAGE> 3
PART B - STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C> <C>
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History The Insurance Company; The Separate Account; The
Funds
18. Services Servicing Agent; Safekeeping of Securities;
Independent Public Accountant; Legal Matters
19. Purchase of Securities Being Offered Purchase of Securities Being Offered
20. Underwriters Distribution of the Contracts
21. Calculation of Yield Quotations of Not Applicable
Money Market Subaccounts
22. Annuity Payments Annuity Payments
23. Financial Statements Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this registration statement.
<PAGE> 4
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
- --------------------------------------------------------------------------------
GROUP FLEXIBLE PAYMENT
VARIABLE ANNUITY CONTRACTS
Fidelity Standard Life Insurance Company
11365 West Olympic Boulevard
Los Angeles, California 90064
- --------------------------------------------------------------------------------
The group flexible payment fixed and variable contracts (the "Contracts")
described in this prospectus are issued by Fidelity Standard Life Insurance
Company ("Fidelity Standard Life"). These Contracts are designed to provide
annuity benefits to employees of public school systems and certain tax-exempt
organizations as tax deferred annuity contracts under the provisions of Section
403(b) of the Internal Revenue Code of 1986 (the "Code"), to retirement plans
that qualify under Section 401 of the Code, to employees covered under employer
deferred compensation plans which are qualified under Section 457 of the Code,
and to individuals as individual retirement annuities.
Participants may allocate premiums and cash value to one or more sub-accounts of
the Separate Account. The assets of the sub-accounts will be used to purchase,
at net asset value, shares of (i) the Money Market Portfolio and Growth
Portfolio of the Variable Insurance Products Fund; (ii) the Asset Manager
Portfolio and Index 500 Portfolio of the Variable Insurance Products Fund II and
(iii) the T. Rowe Price Bond Series (formerly Bond Series) and the T. Rowe Price
Growth and Income Series (formerly Growth and Income Series) of the Security
First Trust (referred herein as the "Funds"). The prospectus for each of these
Funds describes their investment objectives.
This prospectus sets forth information a prospective investor should know before
investing. Additional information about the Contracts has been filed with the
Securities and Exchange Commission ("SEC") in a Statement of Additional
Information, dated May 1, 1996, which information is incorporated herein by
reference and is available without charge upon written request to Fidelity
Standard Life Insurance Company, P.O. Box 92193, Los Angeles, California 90009
or by telephoning 1(800)283-4536.
The table of contents of the Statement of Additional Information appears on Page
21 of the Prospectus.
- --------------------------------------------------------------------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING OF SHARES OF ANY UNDERLYING FUND
FOR WHICH A CURRENT PROSPECTUS HAS NOT BEEN RECEIVED AND IN NO EVENT WILL
DESIGNATION OF AN UNDERLYING FUND FOR WHICH A CURRENT PROSPECTUS HAS NOT BEEN
RECEIVED BE PERMITTED. PLEASE READ AND RETAIN THIS PROSPECTUS FOR FUTURE
REFERENCE.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
Prospectus dated May 1, 1996 FD 224 R1 (5/96)
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Glossary....................................................................................... 3
Summary of the Contract........................................................................ 4
Fee Tables..................................................................................... 6
Condensed Financial Information................................................................ 8
Performance.................................................................................... 8
Financial Information.......................................................................... 9
Description of Fidelity Standard Life Insurance Company,
The Separate Account and The Funds........................................................... 9
The Insurance Company...................................................................... 9
The General Account........................................................................ 9
The Separate Account....................................................................... 9
The Funds.................................................................................. 10
Principal Underwriter.......................................................................... 11
Servicing Agent................................................................................ 11
Custody of Securities.......................................................................... 11
Contract Charges............................................................................... 11
Premium Taxes.............................................................................. 11
Sales Charges.............................................................................. 11
Administrative Fees........................................................................ 12
Transaction Charges........................................................................ 12
Mortality and Administrative Expense Risk Charges.......................................... 12
Distribution Risk Charge (Sales Load)...................................................... 13
20-Day Free Look........................................................................... 13
Description of the Contracts................................................................... 13
General.................................................................................... 13
Purchase Payments.......................................................................... 13
Conversions................................................................................ 14
Loans...................................................................................... 14
Modification of the Contracts.............................................................. 14
Assignment................................................................................. 14
Accumulation Period............................................................................ 15
Crediting Accumulation Units in the Separate Account....................................... 15
Valuation of Accumulation Units............................................................ 15
Net Investment Factor...................................................................... 15
Surrenders................................................................................. 15
Statement of Account....................................................................... 15
Annuity Benefits............................................................................... 16
Variable Annuity Payments.................................................................. 16
Level Payments Varying Annually............................................................ 16
Assumed Investment Return.................................................................. 16
Election of Annuity Date and Form of Annuity............................................... 17
Frequency of Payment....................................................................... 18
Annuity Unit Values........................................................................ 18
Death Benefits................................................................................. 18
Death Benefit Before the Annuity Date...................................................... 18
Death Benefit After the Annuity Date....................................................... 19
Federal Income Tax Status...................................................................... 19
Withholding................................................................................ 20
Multiple Contracts......................................................................... 20
Obtaining Tax Advice....................................................................... 20
Voting Rights.................................................................................. 20
Legal Proceedings.............................................................................. 21
Additional Information......................................................................... 21
Table of Contents of Statement of Additional Information....................................... 21
</TABLE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
the offer described herein and, if given or made, such information or
representations must not be relied upon as having been authorized. This
Prospectus does not constitute an offer in any jurisdiction to any person to
whom such offer would be unlawful therein.
2
<PAGE> 6
GLOSSARY
As used in this Prospectus, these terms have the following meanings:
ACCUMULATION UNIT -- A measuring unit used to determine the value of a
Participant's interest in a General Account or Separate Account Series under a
Contract at any time before Annuity payments commence.
ANNUITANT -- The individual on whose life Annuity payments under a Contract are
based.
ANNUITY -- A series of periodic payments made to an Annuitant for a defined
period of time.
ANNUITY DATE -- The date on which Annuity payments begin.
ANNUITY UNIT -- A measuring unit used to determine the amount of Variable
Annuity payments based on a Separate Account Series after such payments have
commenced.
ASSUMED INVESTMENT RETURN -- The investment rate selected by the Annuitant for
use in determining the Variable Annuity payments.
BENEFICIARY -- The person who has the right to receive a Death Benefit on the
death of the Participant.
BUSINESS DAY -- Each Monday through Friday except for days the New York Stock
Exchange is not open for trading.
CERTIFICATE -- The form given to Participants describing their rights under a
Contract. No Certificates are issued to Participants under deferred compensation
or qualified retirement plans.
CERTIFICATE DATE -- The date a Participant's Certificate is issued, or the date
when a Participant's Account is established where no Certificate is issued.
CERTIFICATE YEAR -- A period of 12 consecutive months beginning on the
Certificate Date and each anniversary of this date.
CONTRACT -- The agreement between Fidelity Standard Life and the group
contractholder covering the rights of the whole group.
FIXED ANNUITY -- An Annuity providing guaranteed level payments. Such payments
are not based upon the investment experience of the Separate Account.
FUND -- An open end management investment company, or series thereof, registered
under the Investment Company Act of 1940 ("1940 Act"), which serves as the
underlying investment medium for a Series of the Separate Account.
GENERAL ACCOUNT -- All assets of Fidelity Standard Life other than those in the
Separate Account or any of its other segregated asset accounts.
NORMAL ANNUITY DATE -- The earlier of (i) the first day of the month coincident
with or immediately preceding the date on which a distribution must commence
under the terms of the Plan to which the Contract is issued, or (ii) the first
day of the month coincident with or next following the anniversary of the
Certificate Date nearest the Participant's 75th birthday.
OWNER -- The person who has title to the Contract.
PARTICIPANT -- The individual by or for whom Purchase Payments are made under a
Contract.
PARTICIPANT'S ACCOUNT -- The sum of the values of all Accumulated Units credited
for a Participant under a Contract.
PLAN -- The 403(b) plan, deferred compensation plan, qualified retirement plan
or individual retirement annuity with respect to which the Contract is issued.
PURCHASE PAYMENT -- The amounts paid to Fidelity Standard Life in order to
provide Annuity benefits under the Contract.
SEPARATE ACCOUNT -- The segregated asset account entitled "Fidelity Standard
Life Separate Account" which has been established by Fidelity Standard Life
pursuant to Delaware law to receive and invest amounts allocated to provide
Variable Annuity benefits under the Contracts. The Separate Account is
registered as a unit investment trust under the 1940 Act.
3
<PAGE> 7
SERIES -- A division of the Separate Account, the assets of which consist of
shares of a Fund, or an accounting series maintained for Fidelity Standard
Life's General Account to determine values used to provide Fixed Annuity
benefits under the Contracts.
SURRENDER CHARGE -- A percentage charge which may be deducted upon full or
partial surrender.
VALUATION DATE -- Any Business Day used by the Separate Account to determine the
value of part or all of its assets for purposes of determining Accumulation and
Annuity Unit values for the Contracts. Fidelity Standard Life will establish
Valuation Dates at its discretion, but until notice to the contrary is given
there will be one Valuation Date in each calendar week for Annuity Unit values,
such date being the last Business Day in a week. Accumulation unit values will
be determined each Business Day.
VALUATION PERIOD -- The period of time from one Valuation Date through the next
Valuation Date.
VARIABLE ANNUITY -- An Annuity providing payments which will vary annually in
accordance with the net investment experience of the applicable Separate Account
Series.
SUMMARY OF THE CONTRACT
THE CONTRACT
The Contract is a combined fixed and variable annuity contract which may be
issued to plans qualified for special tax treatment under Section 403(b) of the
Code (tax shelter annuities), retirement plans which qualify under Section 401
of the Code, Section 457 deferred compensation plans and Section 408, individual
retirement annuities. This prospectus is intended to serve as a disclosure
document only for the variable portion of the Contract.
PURCHASE PAYMENTS
Purchase Payments under the Contract may be made to the General Account, the
Separate Account or allocated between them in accordance with the election of
the Participant. The minimum Purchase Payment is $20 with an annual minimum of
$240. There is no initial sales charge; however, certain charges and deductions
will be made to the Participant's Account. (See "Contract Charges," page 11.)
Amounts allocated to a Series of the Separate Account may be converted to one or
more of the other Separate Account Series at any time and may be transferred to
the General Account at any time before the Annuity Date. Amounts allocated to
the General Account may be transferred to the Separate Account subject to
certain limitations as to time and amount. (See "Conversions," page 13.) The
minimum conversion is the lesser of $500 or the balance of the Participant's
Account in the Series.
SEPARATE ACCOUNT
Pursuant to the Participant's designation, Purchase Payments allocated to
the Separate Account are invested at net asset value in Accumulation Units of
one or more of six series, each of which consists of the Shares of a different
Fund. The Funds presently consist of the Money Market Portfolio and Growth
Portfolio of the Variable Insurance Products Fund, the Asset Manager Portfolio
and Index 500 Portfolio of the Variable Insurance Products Fund II and the T.
Rowe Price Bond Series and the T. Rowe Price Growth and Income Series of the
Security First Trust. The investment adviser of the Variable Insurance Products
Fund and the Variable Insurance Products Fund II is Fidelity Management &
Research Company ("FMR"). The investment adviser and manager of Security First
Trust is Security First Investment Management Corporation ("Security
Management"). T. Rowe Price Associates, Inc., ("Price Associates") is subadvisor
to Security Management with respect to the series of Security First Trust. (See
"The Separate Account," page 9 and "The Funds," page 10.)
CHARGES AND DEDUCTIONS
The Contract permits Fidelity Standard Life to deduct a maximum
administrative fee of $27.50 plus $2.50 for each Series in which the Participant
invests. The fee is payable on each anniversary of the Certificate Date. Until
further notice to the Participant, Fidelity Standard Life will waive these
administrative fees. (See "Administrative Fees," page 12.)
A transaction charge of $10 will be deducted from the Participant's Account
for each conversion from a Separate Account Series or between the Separate
Account and the General Account and upon annuitization of all or a portion of
the Participant's Account. In addition, a transaction charge of the lesser of
$10 or 2% of the amount withdrawn will be deducted from the Participant's
Account upon each partial or full surrender. Effective as of March 8, 1993,
transaction
4
<PAGE> 8
charges for conversions from one series of the Separate Account to another
series of the Separate Account will be waived. (See "Transaction Charges," page
12.)
Daily deductions will be made for mortality risks in the amount of .002192%
(.80% per annum), for expense risks in the amount of .001233% (.45% per annum)
and for distribution risks (sales load) in the amount of .00274% (.10% per
annum).
A surrender charge (contingent deferred sales charge) may be deducted in the
event the Participant requests a full or partial surrender. The charge is based
on a graduated table of charges starting at 7% for Purchase Payments credited
within the calendar year of the surrender and decreasing 1% for each preceding
calendar year or part thereof from the date of receipt and declining to 0% for
Purchase Payments received earlier than the fourth calendar year prior to the
surrender. No charge will be made for that part of the first surrender in a
Certificate Year that does not exceed 10% from the Participant's interest in the
Separate Account and 10% from his or her interest in the General Account. (See
"Sales Charges," page 11.)
Premium taxes payable to any state or other governmental agency may be
deducted from the Participant's Account when incurred. Premium taxes currently
range from 0% to 2.35% (3.5% in Nevada). Until further notice to the
Participant, Fidelity Standard Life will waive deduction of premium taxes. (See
"Premium Taxes," page 11.)
FREE LOOK PERIOD
At any time within twenty days (or such longer period as required by state
law) after the receipt of the Contract it may be returned for cancellation and a
full refund of all Purchase Payments or, if required by state law, the greater
of the Purchase Payments or the account value. (See "Free Look Period," page
13).
VARIABLE ANNUITY PAYMENTS
Annuity payments will start on the Annuity Date. The Participant selects the
Annuity Date, an Annuity payment option, and an Assumed Investment Return. Any
of these selections may be changed prior to the Annuity Date. The Variable
Annuity payment will vary annually based on a comparison of the Assumed
Investment Returns with the investment experience of the Series in which the
Annuity Units are invested. (See "Variable Annuity Payments," page 16.) If
Annuity payments from any one Series would be less than $50, Fidelity Standard
Life reserves the right to change the frequency of the payments from that Series
to such intervals as will result in payments of at least $50 from each Series.
(See "Frequency of Payment," page 18.)
SURRENDERS
If permitted by the Plan, a Participant may surrender all or part of his or
her account before the Annuity Date. However, no partial surrender from a Series
is permitted if it would reduce the Participant's interest in the Series to less
than $200, unless the entire amount allocated to that Series is being
surrendered. A surrender charge may be assessed and a transaction charge will be
assessed. (See "Sales Charges," page 11 and "Transaction Charges," page 12.) In
addition, the amounts surrendered, less any basis, will be taxed as ordinary
income and may be subject to a penalty tax under the Code. Certain restrictions
are applicable to withdrawals from Contracts funding retirement plans qualified
for special tax treatment under the Code. (See "Federal Income Tax Status," page
19.)
LOANS
Participants whose Contracts are issued under a Plan which qualifies under
Section 403(b) of the Code may be entitled to obtain a loan from that portion of
the Participant's Account allocated to the General Account. Fidelity Standard
Life reserves the right to terminate loans and to change the terms under which
loans may be made. Any such action would not affect outstanding loans. (See
"Loans," page 14.)
DEATH BENEFIT
Unless otherwise restricted by the Plan, in the event of the Participant's
death prior to the Annuity Date, the Beneficiary may elect either to receive
death benefits in a lump sum or to apply the Annuity Value under any of the
available Annuity options contained in the Contract. If a Participant who has
not attained age 65 dies before the Annuity Date, the amount of any lump sum
settlement will be the greater of the value of the Participant's Account or the
total of the Participant's Purchase Payments, less any Purchase Payments
previously withdrawn as partial surrenders or applied to annuity options. (See
"Death Benefits," page 18.)
5
<PAGE> 9
FEE TABLES
PARTICIPANT TRANSACTION EXPENSES
<TABLE>
<CAPTION>
Calendar
Year of
Purchase
Payment Percentage
------------ ----------
<C> <S> <C> <C>
(a) Contingent Deferred Sales less than 1 7%
Charge
(as a percentage of amount
surrendered) 1 but not 2 6%
2 but not 3 5%
3 but not 4 4%
4 but not 5 3%
5 or more 0%
(b) Transaction Charge $10 for each surrender or
annuitization
(c) Administrative Charges Maximum $45 per year
(Fidelity Standard Life
currently waives these fees)
(d) Conversion Charge (applies $10 per conversion
to election to convert
Accumulation or Annuity
Units from any one Series
to another)
</TABLE>
SEPARATE ACCOUNT EXPENSES
(AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE.
DEDUCTED DAILY FROM THE SEPARATE ACCOUNT.)
<TABLE>
<S> <C>
Mortality Risk Fees .80% per annum
Expense Risk Fees .45% per annum
Distribution Risk Charge (Sales Load) .10% per annum
Total Separate Account 1.35% per annum
</TABLE>
FUND ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
T. T. Rowe
Rowe Price
Money Asset Index Price Growth
Market Growth Manager 500 Bond & Income
Portfolio Portfolio Portfolio Portfolio* Series Series
--------- --------- --------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
(a) Management Fee........... 0.24% 0.61% 0.71% 0.09% 0.50% 0.50%
(b) Other Expenses........... 0.09% 0.09% 0.08% 0.19% 0.79% 0.24%
(c) Total Annual Expenses.... 0.33% 0.70% 0.79% 0.28% 1.29% 0.74%
</TABLE>
- --------------------------------------------------------------------------------
* Effective August 27, 1992 (commencement of operations), the Portfolio's
investment advisor voluntarily agreed to limit expenses to .28% of average
net assets.
6
<PAGE> 10
EXAMPLES
<TABLE>
<CAPTION>
CONDITIONS
SEPARATE A PARTICIPANT WOULD PAY THE FOLLOWING EXPENSES ON A TIME PERIODS
ACCOUNT $1,000 INVESTMENT ASSUMING 5% ANNUAL RETURN ON ----------------------------------
SERIES ASSETS: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------- --------------------------------------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Money (a) upon surrender at the end of the stated time (a) $ 99 $ 116 $ 132 $199
Market period
Portfolio
(b) if the Certificate WAS NOT surrendered (b) 16 50 87 189
- ----------- --------------------------------------------------- ------ ------- ------- --------
Growth SAME (a) 103 128 153 244
Portfolio
Series
(b) 21 63 109 234
- ----------- --------------------------------------------------- ------ ------- ------- --------
Asset SAME (a) 103 130 158 254
Manager
Portfolio
Series
(b) 21 66 113 244
- ----------- --------------------------------------------------- ------ ------- ------- --------
Index SAME (a) 99 116 133 200
500
Portfolio
Series
(b) 16 51 87 190
- ----------- --------------------------------------------------- ------ ------- ------- --------
T. Rowe SAME (a) 108 145 182 304
Price
Bond
Series
(b) 26 81 138 294
- ----------- --------------------------------------------------- ------ ------- ------- --------
T. Rowe SAME (a) 103 129 155 249
Price
Growth &
Income
Series
(b) 21 65 111 239
- ----------- --------------------------------------------------- ------ ------- ------- --------
</TABLE>
EXPLANATION OF FEE TABLE AND EXAMPLES
1. The purpose of the foregoing tables and examples is to assist the Participant
in understanding the various costs and expenses that he or she will bear
directly or indirectly. The table reflects expenses of the Separate Account
as well as the underlying funds. For additional information see "Contract
Charges," beginning on page 11.
2. The investment adviser to the Index 500 Portfolio voluntarily reimbursed
certain expenses of the Portfolio. If there had been no reimbursement, total
expenses would have been 0.81% (see the Variable Insurance Products Fund II
prospectus for more information).
3. The examples assume that there were no transactions that would result in the
imposition of Transfer Charges or the Conversion Charge. Premium taxes are
not reflected. Presently, premium taxes ranging from 0% to 2.35% (3.5% in
Nevada) may be deducted from each Purchase Payment, or upon annuitization.
Until further notice, Fidelity Standard Life currently absorbs these charges.
4. NEITHER THE TABLE NOR THE EXAMPLES ARE REPRESENTATIONS OF FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
7
<PAGE> 11
CONDENSED FINANCIAL INFORMATION
The following table sets forth condensed financial information on
accumulation units respecting Contracts issued under this prospectus through the
Separate Account. This information is derived from the financial statements of
the Separate Account which have been audited by Ernst & Young LLP, the Separate
Account's independent auditors. The information should be read in conjunction
with the financial statements, related notes and other financial information in
the Statement of Additional Information.
<TABLE>
<CAPTION>
January 26,
1988
(Commencement Twelve Twelve Twelve Twelve Twelve Five Twelve Twelve
of Months Months Months Months Months Months Months Months
Operations) Ended Ended Ended Ended Ended Ended Ended Ended
to July 31, July 31, July 31, July 31, July 31, July 31, December 31, December 31, December 31,
1988 1989 1990 1991 1992 1993 1993 1994 1995
------------- -------- -------- -------- --------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Separate Account
Series(1)
Series B (T. Rowe
Price Bond
Series)
Beg. AUV $....... 5.00 5.04 5.60 5.72 6.07 6.84 7.40 7.51 7.15
End. AUV $....... 5.04 5.60 5.72 6.07 6.84 7.40 7.51 7.15 8.24
End. No.
Qualified
AUs............ 1,029 13,739 74,947 115,425 163,381 226,030 243,826 237,043 246,163
Series G (T. Rowe
Price Growth and
Income Series)
Beg. AUV $....... 5.00 5.50 7.39 6.66 7.25 8.14 8.74 9.19 9.33
End. AUV $....... 5.50 7.39 6.66 7.25 8.14 8.74 9.19 9.33 12.07
End. No.
Qualified
AUs............ 9,442 177,341 588,086 974,187 1,292,981 1,721,138 1,852,764 1,979,176 2,137,371
Series FA (Asset
Manager
Portfolio)
Beg. AUV $
(5/24/93)...... 5.00 5.10 5.58 5.17
End. AUV $....... 5.10 5.58 5.17 5.96
End. No.
Qualified
AUs............ 52,046 509,685 2,368,855 3,532,949
Series FG (Growth
Portfolio)
Beg. AUV $
(5/24/93)...... 5.00 5.05 5.39 5.32
End. AUV $....... 5.05 5.39 5.32 7.11
End. No.
Qualified
AUs............ 28,939 270,590 1,095,305 1,953,592
Series FI (Index
500 Portfolio)
Beg. AUV $
(6/17/93)...... 5.00 5.01 5.24 5.22
End. AUV $....... 5.01 5.24 5.22 7.07
End. No.
Qualified
AUs............ 563 21,047 78,856 217,621
Series FM (Money
Market Portfolio)
Beg. AUV $
(7/15/93)...... 5.00 5.00 5.04 5.18
End. AUV $....... 5.00 5.04 5.18 5.41
End. No.
Qualified
AUs............ 92 2,203 87,571 104,205
Yield............ 1.85% 4.35% 3.80%
</TABLE>
- ---------------
AUV -- Accumulation Unit Value
AUs -- Accumulation Units
PERFORMANCE
Fidelity Standard Life from time to time advertises the yield and effective
yield on the Series invested in the Money Market Portfolio of the Separate
Account and the average annual total returns for the other Series in the
Separate Account. Yields and average annual total returns are determined in
accordance with the methods of computation set forth by the SEC in the Form N-4
Registration Statement and are more particularly described in the Statement of
8
<PAGE> 12
Additional Information. Yields are expressed for a seven day period, and average
annual total returns are expressed for at least one, five and ten year periods
(or from inception if shorter).
The yields of the Series invested in Money Market Portfolio are determined
based upon the change in the value of an outstanding unit in the Separate
Account over a seven day period and annualizing the result. The computation
takes into account recurring deductions from account values, but no deduction is
made for transaction or surrender charges which may apply upon a full or partial
surrender. These charges are described in "Sales Charges," page 11 and
"Transaction Charges," page 12. In the event of a surrender of the Contract, the
imposition of surrender and transaction charges will have the effect of reducing
the yield earned over the period of ownership.
The computation of average annual total returns do take into consideration
recurring charges and any non-recurring charges applicable to a Contract which
is surrendered in full at the end of the stated holding period.
FINANCIAL INFORMATION
Financial statements of the Separate Account and Fidelity Standard Life are
contained in the Statement of Additional Information.
DESCRIPTION OF FIDELITY STANDARD LIFE INSURANCE COMPANY,
THE SEPARATE ACCOUNT AND THE FUNDS
THE INSURANCE COMPANY
Fidelity Standard Life is a stock life insurance company founded in 1981 and
organized under the laws of the state of Delaware. Its principal executive
offices are located at 11365 West Olympic Boulevard, Los Angeles, California
90064. Fidelity Standard Life is a wholly owned subsidiary of Security First
Life Insurance Company, Inc. ("SFLIC"), which is a wholly owned subsidiary of
Security First Group, Inc. ("SFG") (formerly The Holden Group, Inc.). The
outstanding voting common stock of SFG is owned by London Insurance Group, Inc.,
a Canadian insurance service corporation and a publicly traded subsidiary of the
Trilon Financial Corporation of Toronto, Canada. Fidelity Standard Life is
authorized to transact business of life insurance, including annuities. Fidelity
Standard Life presently is licensed to do business in 49 states and the District
of Columbia.
THE GENERAL ACCOUNT
The General Account is made up of all of the assets of Fidelity Standard
Life, other than those in the Separate Account and any other segregated asset
account. The Participant may allocate amounts to the General Account at the time
of purchase or by subsequent transfers from the Separate Account. Amounts
allocated to the General Account will be credited with interest on the basis of
interest rates guaranteed or declared by Fidelity Standard Life under the terms
of the Contract. Instead of the Participant bearing the risk of fluctuations in
the value of the assets as is the case for amounts invested in the Separate
Account, Fidelity Standard Life bears the full investment risk for amounts in
the General Account. Fidelity Standard Life has sole discretion to invest the
assets of the General Account, subject to applicable law. The General Account
provisions of the Contract are not intended to be offered by this Prospectus.
THE SEPARATE ACCOUNT
The Separate Account was established by Fidelity Standard Life pursuant to a
resolution of its Board of Directors on May 13, 1985, in accordance with the
provisions of the Delaware Insurance Code. It is registered with the SEC as a
unit investment trust under the 1940 Act. Registration with the SEC does not
involve supervision by the Commission of the management or investment practices
or policies of the Separate Account or Fidelity Standard Life.
The Separate Account and each Series therein are administered and accounted
for as part of the general business of Fidelity Standard Life, but the income
and realized capital gains or losses of each Series are credited to or charged
against the assets held for that Series in accordance with the terms of the
Contracts. This is done without regard to the income, realized capital gains or
losses of any other Series or the experience of Fidelity Standard Life in any
other business it may conduct. The assets of each of these Series are not
chargeable with the liabilities of any other Series, or arising out of any other
business Fidelity Standard Life may conduct.
All obligations under the Contracts, including the guarantee to make Annuity
payments, are general corporate obligations of Fidelity Standard Life, and all
of Fidelity Standard Life's assets are available to meet its expenses and
obligations to make the Variable Annuity payments. However, while Fidelity
Standard Life is obligated to make the
9
<PAGE> 13
Variable Annuity payments under the Contract, the amount of such payments is
guaranteed only to the extent of the level amount calculated at the beginning of
each Annuity year. (See "Level Payments Varying Annually," page 16.)
The Funds consist of (i) the Money Market Portfolio and Growth Portfolio of
the Variable Insurance Products Fund, (ii) the Asset Manager Portfolio and Index
500 Portfolio of the Variable Insurance Products Fund II and (iii) the T. Rowe
Price Bond Series and the T. Rowe Price Growth and Income Series of the Security
First Trust. The shares of each Fund are purchased, without sales charge, for
the corresponding Series at the net asset value per share next for each Fund
following receipt of the applicable payment. Any dividend or capital gain
distributions received from a Fund are reinvested in Fund shares which are
retained as assets of the applicable Series. Fund shares will be redeemed
without fee to the Series to the extent necessary for Fidelity Standard Life to
make Annuity or other payments under the Contracts.
If shares of any Fund should no longer be available for investment by a
Series or if in the judgment of Fidelity Standard Life's management further
investment in shares of any Fund should become inappropriate in view of the
purposes of the Contracts, Fidelity Standard Life may substitute for each Fund
share already purchased, and apply future Purchase Payments under the Contracts
to the purchase of shares of another Fund or other securities. No substitution
of securities of any Series may take place, however, without the prior approval
of the SEC.
THE FUNDS
Each of the Funds is a portfolio or series of an open-end management
investment company registered with the SEC under the 1940 Act. Registration does
not involve supervision by the SEC of the investments or investment policies of
the Funds. There can be no assurance that the investment objectives of the Funds
will be achieved.
Variable Insurance Products Fund and Variable Insurance Products Fund II are
Massachusetts business trusts. Each is divided into separate portfolios. The
following portfolios are available under the Contracts:
Money Market Portfolio seeks to obtain as high a level of current income as
is consistent with preserving capital and providing liquidity. The portfolio
will invest only in high quality U.S. dollar denominated money market securities
of domestic and foreign issuers.
Growth Portfolio seeks to achieve capital appreciation normally through the
purchase of common stocks (although the portfolio's investments are not
restricted to any one type of security). Capital appreciation may also be found
in other types of securities, including bonds and preferred stocks.
Asset Manager Portfolio seeks high total return with reduced risk over the
long-term by allocating its assets among stocks, bonds and short-term, fixed
income instruments.
Index 500 Portfolio seeks investment results that correspond to the total
return (i.e., the combination of capital changes and income) of common stocks
publicly traded in the United States, as represented by the Standard & Poor's
500 Composite Stock Price Index while keeping transaction costs and other
expenses low.
FMR is the investment adviser to each of the portfolios of the Variable
Insurance Products Fund and the Variable Insurance Products Fund II.
The Security First Trust is a Massachusetts business trust which presently
has four series, two of which are available under the Contracts.
T. Rowe Price Bond Series (formerly Bond Series) seeks to achieve the
highest investment income over the long-term consistent with the preservation of
principal through investment primarily in marketable debt instruments. Growth of
principal and income will also be objectives with respect to up to 10% of the T.
Rowe Price Bond Series' assets which may be invested in common and preferred
stocks.
T. Rowe Price Growth and Income Series (formerly Growth and Income Series)
seeks capital growth and a reasonable level of current income. While this series
will generally invest in common stocks and other equities, it may, depending on
economic conditions, reduce such investments and substitute fixed income
instruments.
Security Management, a subsidiary of SFG and an affiliate of Fidelity
Standard Life and Security First Financial, Inc., provides investment advice and
management services to the two Funds. Under a Subadvisory agreement with
Security Management, Price Associates provides investment management services to
each of the two Funds described above.
Funds are available to registered separate accounts offering variable
annuity and variable life products of participating insurance companies and
entities permitted under Section 817(h) of the Code. Although it is not
anticipated that any disadvantage will result, there is a possibility that a
material conflict may arise between the interest
10
<PAGE> 14
of the Separate Account and one or more of the other separate accounts
participating in the Funds. A conflict may occur due to a change in law
affecting the operations of variable life and variable annuity separate
accounts, differences in the voting instructions of our Owners and those of
other companies, or some other reason. In the event of a conflict, the Separate
Account will take any steps necessary to protect Owners and variable annuity
payees, which may include withdrawal of amounts invested in the Fund by the
Separate Account.
The rights of Participants or Beneficiaries to instruct Fidelity Standard
Life on voting shares of the Funds are described under "Voting Rights," page 20.
Detailed information about the Funds, their investment objectives,
investment portfolios and the charges may be found in the prospectuses of the
Funds. An investor should carefully read the Funds' prospectuses before
investing. Prospectuses for the Variable Insurance Products Fund, the Variable
Insurance Products Fund II and the Security First Trust may be obtained without
charge by written request to Fidelity Standard Life Insurance Company, P.O. Box
92193, Los Angeles, California 90009.
PRINCIPAL UNDERWRITER
Security First Financial, Inc., 11365 West Olympic Boulevard, Los Angeles,
California 90064, a broker-dealer registered under the Securities Exchange Act
of 1934 and a member of the National Association of Securities Dealers, Inc., is
the principal underwriter for the Contract. Security First Financial, Inc., is a
Delaware corporation and a subsidiary of SFG.
SERVICING AGENT
Fidelity Standard Life receives certain administrative services such as
office space, supplies, utilities, office equipment, travel expenses and
periodic reports pursuant to an agreement with SFG.
CUSTODY OF SECURITIES
The custodian of assets of the Separate Account is Fidelity Standard Life.
The assets of each Series will be kept physically segregated by Fidelity
Standard Life and held separate from the assets of the other Series and of any
other firm, person, or corporation. Additional protection for the assets of the
Separate Account is afforded by fidelity bonds covering all of Fidelity Standard
Life's officers and employees.
CONTRACT CHARGES
Charges under the Contract are assessed for the following: (i) premium
taxes; (ii) surrenders, part of which may be deemed to be a sales charge; (iii)
administrative charges; (iv) certain transactions; and (v) assumption of
mortality risks, administrative expense risks and distribution risks with
respect to the Separate Account. These charges may not be changed under the
Contract, and Fidelity Standard Life may profit from these charges.
A Participant should note that there are deductions from and expenses paid
out of the assets of the Funds that are described in the Funds' prospectuses.
PREMIUM TAXES
Certain state and governmental entities impose a premium tax of up to 2.35%
(3.50% in Nevada) of Purchase Payments or amounts applied to an Annuity option.
The Contract permits Fidelity Standard Life to deduct any applicable premium
taxes from the Participant's Account at the time they are incurred. Until
further notice, such premium taxes will be absorbed by Fidelity Standard Life
and will not be charged against a Participant's Account.
SALES CHARGES
No sales charge is deducted from any Purchase Payment. However, a surrender
charge (contingent deferred sales charge) may be imposed upon a partial or full
surrender of the Participant's Account. The surrender charge covers expenses
relating to the sale of the Contract, including commissions paid to sales
personnel and other promotional costs.
Up to 10% of the Participant's Account in both the Separate Account and
General Account paid in the first surrender in a calendar year will not be
subject to the surrender charge ("Free Withdrawal Amount"). Amounts
11
<PAGE> 15
surrendered in excess of the Free Withdrawal Amount may be subject to the
surrender charge, and each surrender will be subject to a transaction charge.
(See "Transaction Charges," page 12).
The surrender charge is a percentage charge which varies according to the
period of time that Purchase Payments have remained with Fidelity Standard Life
prior to surrender. These charges amount to:
7% for Purchase Payments received in the calendar year of the surrender;
6% for Purchase Payments received in the calendar year before the surrender;
5% for Purchase Payments received in the 2nd calendar year before the
surrender;
4% for Purchase Payments received in the 3rd calendar year before the
surrender;
3% for Purchase Payments received in the 4th calendar year before the
surrender;
0% for Purchase Payments received prior to the 4th calendar year before the
surrender.
These charges are applied by reducing the Series from which the surrender
will be taken by an amount determined by dividing the amount elected to be
surrendered plus transactions fees by a factor derived from the above percentage
charges. This factor is equivalent to (a) -- (b) where (a) is 1 and (b) is the
percentage charge expressed as a decimal. Accumulation Units are cancelled on a
first-in, first-out basis. The effect of this varying schedule of percentage
charges is that amounts left in the Separate Account for longer periods of time
are subject to lower charges than amounts immediately surrendered.
In the event of a partial surrender, the Participant will receive a check in
the amount requested. Surrender charges, if any, will be deducted from the
Series from which the partial surrender was taken, or proportionally from the
remaining Series in the event that the Series is fully surrendered. Deductions
from the Participant's interest in the General Account, if any, will be from
Purchase Payments and accumulations thereon on a first-in, first-out basis.
ADMINISTRATIVE FEES
At the end of each Certificate year Fidelity Standard Life may deduct an
administrative fee. This fee will not exceed $27.50 plus $2.50 for each Series
for which there are Accumulation Units included in the value of the
Participant's Account. Therefore, the maximum fee on an annual basis will not
exceed $42.50. The fee will be prorated between Series in the Participant's
Account on the basis of their respective values on the date of the deduction.
Administrative expenses include the cost of policy issuance, salaries, postage,
telephone, travel expenses, legal, administrative, actuarial, management and
accounting fees, periodic reports, office equipment, stationery, office space
and custodial expenses. Until further notice, Fidelity Standard will waive the
deduction of administrative fees.
TRANSACTION CHARGES
A $10 transaction charge will be deducted from the Participant's Account for
each conversion from a Series (see "Conversions," page 13) and upon
annuitization of all or a portion of the Participant's Account (see "Annuity
Benefits," page 16). Similarly, in the event of a surrender, a transaction
charge will be deducted from the Participant's Account in an amount equal to the
lesser of $10 or 2% of the amount surrendered. These charges are at cost, and
Fidelity Standard Life does not anticipate profiting from them. Effective as of
March 8, 1993, transaction charges for conversions from one series of the
Separate Account to another series of the Separate Account will be waived.
MORTALITY AND ADMINISTRATIVE EXPENSE RISK CHARGES
The minimum death benefit provided for by the Contract requires Fidelity
Standard Life to assume a mortality risk that the Participant's Account will be
less than the Participant's Purchase Payments adjusted for prior surrenders
and/or amounts applied to Annuity options. (See "Death Benefit Before the
Annuity Date," page 18.) In addition, because the Contract provides life Annuity
options, Fidelity Standard Life assumes a mortality risk that the death rate of
Participants as a group will be lower than the death rate upon which the
mortality table specified in the Contract are based. A fee will be charged to
compensate Fidelity Standard Life for assuming these mortality risks. Fidelity
Standard Life will make a deduction for mortality risks in an amount equal to
.002192% on a daily basis (.80% per year) from the Separate Account assets
funding the Contract.
Fidelity Standard Life also assumes the risk that the amount, if any,
deducted for administrative fees will be insufficient to cover its actual costs
for administrative services. Contract administration expenses include the cost
of policy issuance, salaries, rent, postage, travel expenses, legal,
administrative, actuarial and accounting fees, periodic
12
<PAGE> 16
reports, office equipment, stationery, office space and custodial expenses.
There is no assurance that the margins will be sufficient to absorb the expenses
during the term of the Contract. As compensation for assuming this risk,
Fidelity Standard Life will make a deduction of .001233% on a daily basis (.45%
per year) from the value of the Separate Account assets funding the Contract.
DISTRIBUTION RISK CHARGE (SALES LOAD)
Fidelity Standard Life also assumes the risk that surrender charges
described above will be insufficient to cover the actual cost of distribution.
These costs include commissions, fees, registration costs, direct and indirect
selling expenses including advertising, sales materials, illustrations,
marketing personnel, printing and related overhead expenses. As compensation for
assuming this risk, Fidelity Standard Life will make a deduction of .000274% on
a daily basis (.10% per year) from the value of the Separate Account assets
funding the Contract. The distribution risk charge (sales load) together with
any contingent deferred sales charge imposed will never exceed 9% of purchase
payments.
If Fidelity Standard Life has gains from the mortality, administrative
expense and distribution risk charges over its costs of assuming these risks, it
may profit from these gains. Any gains derived from the mortality and
administrative expense risk charges may be used to cover shortfalls in amounts
available to pay distribution expenses.
Fidelity Standard Life may, in its discretion, voluntarily waive a portion
of the mortality, administrative expense, and/or distribution fees, which waiver
may be terminated at any time.
FREE LOOK PERIOD
The Contract provides for an initial "Free Look" period. The Owner has the
right to return the Contract within 20 days (or such longer period as required
by state law) after the Owner receives the Contract by delivering or mailing it
to Fidelity Standard Life at its administrative office. If the Contract is
mailed, it will be deemed mailed on the date of the postmark or, if sent by
certified or registered mail, the date of certification or registration. The
returned Contract will be treated as if the Company never issued it, and the
Company will refund the Purchase Payments or, if required by state law, the
greater of the Purchase Payments or the account value.
DESCRIPTION OF THE CONTRACTS
GENERAL
The Contracts are group contracts designed to provide annuity benefits to
employees of public school systems, churches and certain tax-exempt
organizations as tax deferred annuity contracts under the provisions of Section
403(b) of the Code, to employees covered under various types of employer
deferred compensation plans which qualify under the provisions of Section 457 of
the Code, to trusts under retirement plans which qualify under Section 401 of
the Code and to individuals as individual retirement annuities. (See "Federal
Income Tax Status," page 19.) Since the Contracts are designed to fulfill
long-term financial needs, purchasers should not consider them as short-term or
temporary investments.
A group Contract is issued to an employer, to a trustee of a qualified
retirement plan, or to another organization, which will be the Owner, covering
all present and future Participants. Except as described below, after completing
an enrollment form and arranging for Purchase Payments to begin, each enrolled
Participant receives a Certificate which summarizes the provisions of the group
contract and evidences his or her participation in the Plan. The group contracts
described below may be restricted by the governing instrument of the Plan as to
the exercise by the Participant of certain rights provided in such contracts.
Owners and Participants should refer to the Plan for information concerning such
restrictions, if any. No Certificates are issued to Participants under deferred
compensation or qualified retirement Plans.
PURCHASE PAYMENTS
Purchase Payments may be made on an annual, semi-annual, quarterly, or
monthly basis, or at such intervals as may be agreed to by Fidelity Standard
Life. The frequency of Purchase Payments may be changed if permitted by the
Plan. The minimum Purchase Payment is $20, with an annual minimum of $240.
Purchase Payments may be allocated to the Separate Account, the General Account
or between them in accordance with the election of the Participant. Confirmation
of each Purchase Payment received will be periodically sent to the Participant
as appropriate.
13
<PAGE> 17
CONVERSIONS
Accumulation Units may be converted among the Series of the Separate Account
or from the Separate Account to the General Account at any time. In addition,
Accumulation Units in the General Account may be converted to the Separate
Account subject to the following limitations: (i) conversions are limited to
once per Certificate year; (ii) unless otherwise permitted by Fidelity Standard
Life, the total value converted from the General Account may not exceed 20% of
the accumulated payment value of the Participant's interest in the General
Account and (iii) the amount converted will be based upon accumulated payment
value less transaction fees, and a proportional reduction will be made in the
annuity value of the Participant's interest in the General Account.
Conversion instructions may be communicated in writing or, if permitted by
Fidelity Standard Life, by telephone. If telephone conversions of Accumulation
Units are permitted, the Participant will be required to complete a prior
authorization on a form provided by Fidelity Standard Life. Fidelity Standard
Life will employ reasonable procedures to confirm that telephone instructions
are genuine (including requiring one or more forms of personal identification),
and Fidelity Standard Life will not be liable for following instructions it
reasonably believes to be genuine.
Accumulation Units will be converted on the first Valuation Date after
receipt of written or telephone instructions. Because Accumulation Unit values
are determined at the close of the New York Stock Exchange (currently 4:00 P.M.
Eastern Time) on a Valuation Date, conversion instructions received after that
time will be effected as of the next Valuation Date.
Annuity Units may be converted among the Series of the Separate Account at
any time. Annuity Units may not be converted to the General Account. However,
amounts in the General Account that have not been applied to a Fixed Annuity
income option may be converted to Annuity Units in one or more Series of the
Separate Account for a Variable Annuity payout. Conversions of Annuity Units
must be elected in writing and will be effective on the first Valuation Date
following receipt of the instructions.
A minimum of $500 or the value of the Series must be converted from any
Series of the Separate Account or from the General Account. The value of the
Accumulation and Annuity Units converted will be calculated as of the close of
business on the date the conversion occurs.
LOANS
Participants in Plans which qualify under Section 403(b) may obtain a loan
under the Contract from that portion of the Participant's Account which is
allocated to the General Account. Accumulation Units in the Separate Account
will be taken into account in determining the maximum amount of any loan, and
the Participant would be permitted to convert Accumulation Units from the
Separate Account to the General Account prior to any loan. The Participant's
Account will serve as sole security for a loan, and Fidelity Standard Life may
terminate a loan, in its discretion, in the event of a request for a surrender.
Fidelity Standard Life may modify or terminate the granting of loans at any
time, provided that any such modification or termination will not affect
outstanding loans. Fees may be charged for loan set-up and administration.
MODIFICATION OF THE CONTRACTS
The Contract guarantees that Annuity payments involving life contingencies
will be based on the minimum guaranteed Annuity purchase rates incorporated in
the Contracts, regardless of actual mortality experience. The Contract also
includes provisions legally binding on Fidelity Standard Life with respect to
surrenders, death benefits and maximum charges, fees and deductions from a
Participant's Account. Fidelity Standard Life may only change these provisions:
(i) with respect to terms which apply to Participants after the effective date
of the change; (ii) with respect to terms which apply to the excess of any
Purchase Payments received in any Certificate Year over the Purchase Payments
received in the first Certificate Year; or (iii) to the extent necessary to
conform the Contract to any federal or state law, regulation or ruling.
A Contract may also be modified by written agreement between Fidelity
Standard Life and the Owner.
ASSIGNMENT
If permitted by the Plan, the Contracts may be assigned by the Participant,
provided written notice of such assignment is received by Fidelity Standard
Life. In the case of Contracts issued in connection with a deferred compensation
plan, all rights, discretion and powers under the Contract are vested in the
Owner and not the Participant.
14
<PAGE> 18
Inquiries as to any Contract provisions should be made in writing to
Fidelity Standard Life Insurance Company, P.O. Box 92193, Los Angeles,
California 90009 or by telephoning 1(800)283-4536.
ACCUMULATION PERIOD
CREDITING ACCUMULATION UNITS IN THE SEPARATE ACCOUNT
Accumulation Units are credited to a Series upon receipt of each Purchase
Payment or conversion, as the case may be. The number of Accumulation Units to
be credited is determined by dividing the net amount allocated to a Series by
the value of an Accumulation Unit in the Series next computed following receipt
of the Purchase Payment or conversion.
In the event that an application for a Contract fails to recite all of the
necessary information, Fidelity Standard Life will promptly request that the
Participant furnish further instructions and will hold any Purchase Payment in a
suspense account, without interest, for a period not exceeding five Business
Days pending receipt of such information. If the necessary information is not
received by Fidelity Standard Life within five Business Days of receipt of the
application, Fidelity Standard Life will return the Purchase Payment.
VALUATION OF ACCUMULATION UNITS
The current value of Accumulation Units of a Series of the Separate Account
varies with the investment experience of the Fund in which the assets of the
Series are invested. Such value is determined each business day at the close of
the New York Stock Exchange (currently 4:00 P.M. Eastern Time) by multiplying
the value of an Accumulation Unit in the Series on the immediately preceding
Valuation Date by the net investment factor for the period since that day. (See
"Net Investment Factor," below.) The Participant bears the investment risk that
the current value of Accumulation Units invested in a Series may at any time be
less than the amounts originally allocated to the Series.
NET INVESTMENT FACTOR
The net investment factor is an index of the percentage change (adjusted for
distributions by the Fund and the deduction of the mortality, administrative
expense and distribution risk fees) in the net asset value of the Fund in which
a Series is invested, since the preceding Valuation Date. The net investment
factor may be greater or less than one, depending upon the Fund's investment
performance.
SURRENDERS
To the extent permitted by the Plan, a Participant may surrender all or a
portion of the Participant's Account at any time prior to the Annuity Date. The
value of any partial surrender must be at least $200. A surrender may result in
adverse federal income tax consequences to the Participant including current
taxation of the distribution and a penalty tax on a premature distribution. (See
"Federal Income Tax Status," page 19.) The Participant should consult his or her
tax adviser before requesting a surrender.
The cash value of a Participant's interest in the Separate Account prior to
the Annuity Date may be determined at any time by multiplying the number of
Accumulation Units for each Series credited to the Contract by the current value
of an Accumulation Unit in the Series and subtracting the surrender charges, if
any, and the transaction charges. Upon receipt of a written request for a full
or partial surrender, Fidelity Standard Life will calculate the surrender using
the value of Accumulation Units computed after receipt of such request.
A request for a partial surrender from more than one Series must specify the
allocation of the partial surrender among the Series. No partial surrender may
be made that would cause a Participant's interest in any Series to have a value
after the surrender of less than $200, unless the entire amount allocated to
such Series is being surrendered.
Payment of any amount surrendered from the Series will be made within seven
days of the date the written request is received by Fidelity Standard Life.
Surrenders may be suspended when: (i) trading on the New York Stock Exchange is
restricted by the SEC or such Exchange is closed for other than weekends or
holidays; (ii) the SEC has by order permitted such suspension; or (iii) an
emergency as determined by the SEC exists making disposal of portfolio
securities or valuation of assets of the Funds not reasonably practicable.
STATEMENT OF ACCOUNT
Prior to the Annuity Date, each Participant will be provided with a written
statement of account each calendar quarter in which a transaction occurs. In no
event will a statement of account be provided less often than once annually.
15
<PAGE> 19
The statement of account will show all transactions for the period being
reported. It will also show the number of Accumulation Units of each Series in
the Participant's Account, the current Accumulation Unit value for each Series,
and the value of the Participant's Account as of the end of the reporting
period.
ANNUITY BENEFITS
VARIABLE ANNUITY PAYMENTS
Unless otherwise elected by the Participant, the Participant's interest in
the Separate Account will be applied to provide a Variable Annuity. The dollar
amount of Variable Annuity payments will reflect the investment experience of
the Series but will not be affected by adverse mortality experience which may
exceed the mortality risk charge provided for under the Contract.
LEVEL PAYMENTS VARYING ANNUALLY
Under the Contract, Variable Annuity payments are determined annually rather
than monthly so that Annuity payments, uniform in amount, are made monthly
during each Annuity year. The level of payments for each year is based on the
investment performance of the Series up to the Valuation Date as of which the
payments are determined for the year. Thus, amounts of the Annuity payments vary
with the investment performance of the Series from year to year rather than from
month to month.
The monthly Variable Annuity payments for the first year will be determined
on the last Valuation Date of the second calendar week preceding the Annuity
Date by using a formula described in the Contract. On each anniversary of the
Annuity Date, Fidelity Standard Life will determine the amount of monthly
payments for the year then beginning. These payments will be determined by
multiplying the number of Annuity Units in each Series from which payments are
to be made by the Annuity Unit value of that Series for the Valuation Period in
which the first payment for that year is due.
The amount of the year's Variable Annuity payments is transferred to the
General Account at the beginning of the Annuity year. Although an amount in the
Separate Account is credited to an Annuitant and transferred to the General
Account to make Annuity payments, it should not be inferred that the Annuitant
has any property rights in this amount. The Annuitant has only a contractual
right to Annuity payments from the amount credited to him or her in the Separate
Account.
The monthly Annuity payments are made from the General Account with interest
credited using the Assumed Investment Return of 4.25% or the alternative Assumed
Investment Return selected by Participant. Fidelity Standard Life will
experience profit or loss on the amounts placed in the General Account to
provide level monthly payments during the year to the extent that net investment
income and gains in the General Account exceed or are lower than the Assumed
Investment Return selected.
Because Annuity payments for the year are set at the beginning of the year,
the Annuitant will not benefit from increases in Annuity Unit values during the
year. However, such increases and decreases will be reflected in the calculation
of Annuity payments for the subsequent year.
ASSUMED INVESTMENT RETURN
Variable Annuity payments will vary from payments based on the Assumed
Investment Return if the actual investment experience of the Series is better or
worse than the Assumed Investment Return. The choice of the Assumed Investment
Return can affect the level of Annuity payments from year to year. Over a period
of time, if the Separate Account achieves a net investment result equal to the
Assumed Investment Return applicable to a particular option, the amount of the
Annuity payments would be level. However, if the Separate Account achieves a net
investment result greater than the Assumed Investment Return, the amount of the
Annuity payments would increase in value each year. Similarly, if the Separate
Account achieves a net investment result smaller than the Assumed Investment
Return, the amount of the Annuity payments would decrease each year.
Although a higher initial payment would be received under a higher Assumed
Investment Return, there is a point of time after which payments under a lower
Assumed Investment Return would be greater, assuming payments continue through
that point in time. The effect of a higher or lower Assumed Investment Return
can be summarized as follows: a higher Assumed Investment Return will result in
a larger initial payment but more slowly rising or more rapidly falling
subsequent payments than a lower Assumed Investment Return.
16
<PAGE> 20
Unless otherwise elected the Assumed Investment Return will be 4.25% per
annum. To the extent permitted by state law and regulations, Fidelity Standard
Life will permit an election of an Assumed Investment Return of 3.50%, 5% or 6%.
It should not be inferred, however, that such returns will bear any relationship
to the actual net investment experience of the Series.
ELECTION OF ANNUITY DATE AND FORM OF ANNUITY
The Annuity Date and the form of Annuity payment are elected by the
Participant. Unless an earlier date is elected in accordance with the Plan,
Annuity payments must begin on the Normal Annuity Date.
To the extent not prohibited by the Plan, an optional Annuity Date may be
elected which date may be the first day of any month prior to the Normal Annuity
Date. The election must be made at least 31 days before the optional Annuity
Date.
The normal form of Annuity payment under the Contract is Option 2, a life
Annuity with 120 monthly payments certain. Unless indicated otherwise, Option 2
will be automatically applied. Changes in the optional form of Annuity payment
may be made at any time up to 31 days prior to the date on which Annuity
payments are to begin. Options 1 through 4 may be elected as either Variable
Annuities or Fixed Annuities, while Option 5 may be elected only as a Fixed
Annuity. The first year's Annuity payments described in Option 1 through 4 are
determined on the basis of: (i) the mortality table specified in the Contract,
(ii) the age and, where permitted, the sex of the Annuitant, (iii) the type of
Annuity payment option(s) selected, and (iv) the Assumed Investment Return
selected. Fixed Annuity payments described in Option 5 are determined on the
basis of: (i) the number of years in the payment period and (ii) the interest
rate guaranteed with respect to the option.
The United States Supreme Court in its decision entitled Arizona Governing
Committee for Tax Deferred Annuity and Deferred Compensation Plans v. Norris
determined that an employer subject to Title VII of the Civil Rights Act of 1964
may not offer to its employees the option of receiving retirement benefits
calculated on the basis of sex. The Company will issue contracts which comply
with the Norris decision and state law.
OPTION 1 -- LIFE ANNUITY
An Annuity payable monthly during the lifetime of an individual, ceasing
with the last payment due prior to the death of an individual. This option
offers the maximum level of monthly payments since there is no guarantee of a
minimum number of payments or of death benefits for Beneficiaries.
OPTION 2 -- LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
An Annuity payable monthly during the lifetime of an individual with a
guaranteed minimum number of monthly payments not less than 120, 180 or 240
months, as elected. If at the death of the individual the specified number of
payments have not been made, Annuity payments will be continued during the
remainder of such period to the designated Beneficiary.
OPTION 3 -- INSTALLMENT REFUND LIFE ANNUITY
An Annuity payable monthly during the lifetime of an individual with a
guaranteed minimum number of monthly payments equal to the amount applied under
this option divided by the first monthly payment. If the payee dies before
receiving the "minimum number" of payments, the remaining payments will continue
to the designated beneficiary.
OPTION 4 -- JOINT AND LAST SURVIVOR ANNUITY
An Annuity payable monthly during the joint lifetime of two individuals and
thereafter during the lifetime of the survivor, ceasing with the last payment
due prior to the death of the survivor.
OPTION 5 -- PAYMENTS FOR A DESIGNATED PERIOD
A fixed dollar Annuity payable monthly for a specified number of years from
5 to 30. The amount of each payment will be based on an interest rate determined
by Fidelity Standard Life, that will not be less than 3.50% per annum. Fixed
Annuity payments under this option may not be commuted to a lump sum, except as
provided under "Death Benefits".
17
<PAGE> 21
FREQUENCY OF PAYMENT
At the election of the Payee, payments under any option may be made
annually, semi-annually, quarterly or monthly except that payments under the
special 36 month designated period described in Option 5 must be made on a
monthly basis. If at any time any payments to be made to any payee from any
Series are or become less than $50 each, Fidelity Standard Life shall have the
right to decrease the frequency of payments to such interval as will result in a
payment of at least $50.
ANNUITY UNIT VALUES
The value of an Annuity Unit at a Valuation Date is determined by
multiplying the value of the Annuity Unit at the preceding Valuation Date by an
"Annuity Change Factor". The Annuity Change Factor is an adjusted measurement of
the investment performance of the Fund since the end of the preceding Valuation
Period. The Annuity Change Factor is determined by dividing the value of the
Accumulation Unit at the Valuation Date by the value of the Accumulation Unit at
the preceding Valuation Date and multiplying the result by a neutralization
factor.
The neutralization factor is determined by dividing 1 by the weekly
equivalent of the Assumed Investment Return previously selected by the
Annuitant. For example, the neutralization factor for the Assumed Investment
Return of 4.25% is 0.9991999.
The number of Annuity Units for a Series is determined by dividing the
monthly Annuity payment for the first year by that Series' Annuity Unit value on
the same date as the first year's Annuity payments are calculated. The number of
Annuity Units will not change unless the Participant converts Annuity Units to
or from other Series of the Separate Account.
DEATH BENEFITS
DEATH BENEFIT BEFORE THE ANNUITY DATE
If the Participant dies before the Annuity Date, the Participant's Account
will be applied in accordance with the terms set forth below.
For Contracts issued other than in connection with a Plan which qualifies
under Sections 401, 403(b), 408 or 457 of the Code, the following provisions
apply:
1. If the Beneficiary is the Participant's spouse, the spouse shall be
deemed to be the Participant and succeeds to all Contract rights.
2. If the Beneficiary is not the Participant's spouse, the Beneficiary may
elect to receive a lump sum settlement, or to receive Annuity income
under Annuity options 1, 2, or 5. (See "Election of Annuity Date and
Form of Annuity," page 17). The lump sum settlement must be made within
5 years of the Participant's death. Annuity payments must begin within
one year of the Participant's death, and the period of payments may not
be longer than the Beneficiary's life expectancy as specified by the
Internal Revenue Service tables.
For Contracts issued with respect to Plans which qualify under Sections 401,
403(b), 408 and 457 of the Code, the following provisions apply:
1. If the Beneficiary is the Participant's spouse, the spouse may elect to
receive Annuity options 1, 2, or 5, or to treat the Contract as his or
her own. Payments under the Annuity options must begin prior to the date
on which the deceased Participant would have attained age 70 1/2.
2. If the Beneficiary is not the Participant's spouse, the Beneficiary may
elect to receive a lump sum settlement (cash value) or to receive
Annuity income under Annuity options 1, 2, or 5. The lump sum settlement
must be made within 5 years of the death of the Participant. Payments
under the Annuity Options must begin within one year of the
Participant's death and the period of payments may not be longer than
the Beneficiary's life expectancy as specified by the Internal Revenue
Service tables.
If a Participant who has not attained age 65 dies before the Annuity Date
the amount of any lump sum settlement will be the greater of the Participant's
Account less transaction fees or the total of the Participant's Purchase
Payments reduced by any Purchase Payments previously surrendered or applied to
Annuity income. If a Participant who has attained age 65 dies before the Annuity
Date only the cash value will be paid as a death benefit.
18
<PAGE> 22
DEATH BENEFIT AFTER THE ANNUITY DATE
If the Annuitant under a Contract dies on or after the Annuity Date, the
remaining portion of his or her interest will be distributed to the Beneficiary
at least as rapidly as under the method of distribution being used at the date
of the Annuitant's death. If no designated Beneficiary survives the Annuitant,
the present value of any remaining payments certain on the date of the death of
the Annuitant, calculated on the basis of the Assumed Investment Return
previously elected, may be paid in one sum to the estate of the Annuitant unless
other provisions have been made and approved by Fidelity Standard Life. This
value is calculated as of the date of payment following receipt of due proof of
death.
Unless otherwise restricted, a Beneficiary receiving variable payments under
Options 2 or 3 after the death of an Annuitant may elect at any time to receive
the present value of the remaining number of Annuity payments certain in a
single payment, calculated on the basis of the Assumed Investment Return
previously selected. However, such election is not available to a Beneficiary
receiving Fixed Annuity payments.
FEDERAL INCOME TAX STATUS
The operations of the Separate Account form part of the operations of
Fidelity Standard Life. Under the Code as it is now written no federal income
tax is payable by Fidelity Standard Life on the investment income and capital
gains of the Separate Account. Moreover, as long as the Separate Account meets
the diversification requirements of Section 817(h) of the Code, no federal
income tax is payable by the Participant on the investment income and capital
gains under a Certificate until Annuity payments commence or a full or partial
withdrawal is made. It is intended that the Separate Account will continue to
meet the requirements of Section 817(h) of the Code.
Employers may deduct their contributions to self-employed and corporate
pension and profit-sharing plans described in Section 401 of the Code and tax
sheltered annuities described in Section 403(b) in the year when made up to the
limits specified in the Code. In addition, some employer plans may permit
nondeductible employee contributions.
All distributions, with the exception of a return of permitted nondeductible
employee contributions, are included in gross income. In the case of Sections
401 and 403(b) plans and IRAs, a distribution is includible in the year in which
it is paid. In the case of a 457 plan, a distribution is includible in the year
it is paid or made available. Under certain limited circumstances, a lump sum
distribution from a Section 401 plan may qualify for special 5-year or 10-year
forward income averaging or long-term capital gains treatment.
In the case of Section 401, Section 403(b), Section 457 plans and IRAs,
Annuity payments for life or a period not exceeding the life expectancy of the
Participant or the Participant and a designated beneficiary must commence by
April 1 of the calendar year following the calendar year in which the employee
attains age 70 1/2 (or retires in the case of government plans) (excluding
account values in a 403(b) plan at December 31, 1986). Distributions under
Sections 401, 403(b) and 457 plans must also meet the minimum incidental death
benefit requirements of the Code.
Except as described below, the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including both 401
and 403(b) plans. To the extent amounts are not includable in gross income
because they have been rolled over to an IRA or to another 403(b) annuity, no
tax penalty will be imposed. The tax penalty will not apply to the following
distributions: (a) if distribution is made on or after the date on which the
Participant reaches age 59 1/2; (b) distributions following the death or
disability of the Participant (for this purpose disability is defined in Section
72(m)(7) of the Code); (c) after separation from service, distributions that are
part of substantially equal periodic payments, not less frequently than
annually, made for the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of such Participant and his designated
beneficiary; (d) distributions to a Participant who has separated from service
after attaining age 55; (e) distributions made to the Participant to the extent
such distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the Participant for amounts paid during the taxable year for
medical care; and (f) distributions made to an alternate payee pursuant to a
qualified domestic relations order.
Similar rules apply to IRAs, but there are fewer exceptions to the 10%
penalty tax. The taxable portion of an IRA distribution will not be subject to
the tax penalty if: (a) it is made on or after the date on which the Participant
reaches age 59 1/2; (b) it is made following the death or disability of the
Participant; or (c) it is part of substantially equal periodic payments, not
less frequently than annually, made for the life (or life expectancy) of the
Participant or the joint lives (or joint life expectancies) of such Participant
and his or her designated beneficiary. The 10% penalty tax does not apply to
Section 457 plans.
19
<PAGE> 23
The Code prohibits the withdrawal of amounts contributed or earned under a
403(b) annuity on or after January 1, 1989, except in these circumstances: (a)
the Participant attains age 59 1/2, separates from service, dies, becomes
disabled (within the meaning of Section 72(m)(7) of the Code), or (b) in the
case of hardship as determined in accordance with applicable regulations.
Withdrawals for hardship are restricted to the portion of the Participant's
Account which represents contributions by the Participant and does not include
any investment results. These limitations on withdrawals apply only to salary
reduction contributions made after December 31, 1988 and to income attributable
to such contributions and to income attributable to amounts held as of December
31, 1988. The limitations on withdrawals do not effect rollovers or exchanges
between Section 403(b) annuities.
Providing certain requirements of the Code are met, distributions from a
plan may be rolled over tax free to another plan. Distributions from a Section
401 plan may be rolled over to a Section 401 defined contribution plan, a
Section 403(a) annuity or an IRA. Distributions from a tax sheltered annuity may
be rolled over to another tax sheltered annuity or an IRA. Distributions from an
IRA may be rolled over to another IRA and, if the IRA contains only permissible
rollover amounts, to a Section 401 plan.
Distributions from plans other than 401, 403(b), 408 or 457 prior to age
59 1/2 will be subject to an additional tax of 10%, unless otherwise exempt.
The discussion contained in the Prospectus regarding withdrawals and other
distributions from a Participant's Account should be considered in light of the
above.
WITHHOLDING
Fidelity Standard Life is required to withhold federal income tax on
distributions such as Annuity payments, lump sum distributions and partial
surrenders. However, recipients of distributions are allowed to make an election
not to have federal income tax withheld. After an election is made with respect
to Annuity payments, an Annuitant may revoke the election at any time, and
thereafter commence withholding. Fidelity Standard Life will notify the payee at
least annually of his or her right to revoke the election.
Security First Life is required to withhold 20% of certain taxable amounts
constituting "eligible rollover distributions" to participants (including lump
sum distributions) in retirement plans under Code Section 401 and tax deferred
annuities under Code Section 403(b). This withholding requirement does not apply
to distributions from such plans and annuities in the form of a life and life
expectancy annuity (individual or joint), an annuity with a designated period of
10 years or more, or any distribution required by the minimum distribution
requirements of Code Section 401(a)(9). Withholding on these latter types of
distribution will continue to be made under the rules described in the prior
paragraph. A participant cannot elect out of the 20% withholding requirement.
However, if an eligible rollover distribution is rolled over into an eligible
retirement plan or IRA in a direct trustee-to-trustee transfer, no withholding
will be required.
Payees are required by law to provide Fidelity Standard Life (as payor) with
their correct taxpayer identification number ("TIN"). If the payee is an
individual, the TIN is the same as his or her social security number.
MULTIPLE CONTRACTS
Code Section 72(e)(11) provides that multiple deferred annuity contracts
which are issued within a calendar year to the same Contract Owner by one
company or its affiliates are treated as one annuity contract for purposes of
determining the tax consequences of any distribution. Such treatment may result
in adverse tax consequences.
OBTAINING TAX ADVICE
It should be recognized that the federal income tax information in this
prospectus is not exhaustive and is for information purposes only. The
discussion above does not purport to cover all situations involving the purchase
of an Annuity or the election of an option under the Contract. Tax results may
vary depending upon individual situations and special rules may apply in certain
cases. State and local tax results may also vary. For these reasons a qualified
tax adviser should be consulted.
VOTING RIGHTS
Unless otherwise restricted by the Plan, each Participant holding a
Certificate will have the right to instruct Fidelity Standard Life with respect
to voting the Fund shares which are the assets underlying his or her interest in
the Separate Account, at all regular and special shareholders meetings. Fidelity
Standard Life will mail to each Participant, at his last
20
<PAGE> 24
known address, all periodic reports and proxy material of the applicable Fund
and a form with which to give voting instructions. Fund shares as to which no
timely instructions are received will be voted by Fidelity Standard Life in
proportion according to the instructions received from all the Participants
giving timely instructions. Fidelity Standard Life is under no duty to inquire
as to the instructions received or the authority of persons to instruct the
voting of Fund shares, and unless Fidelity Standard Life has actual knowledge to
the contrary, the instructions given it will be valid as they affect Fidelity
Standard Life or the Funds.
Even though Annuity payments have begun, the Annuitant will continue to have
any voting rights exercisable with respect to the Funds shares.
The number of votes to be cast by each person having the right to vote will
be determined as of a record date within 90 days prior to the meeting of the
Fund, and voting instructions will be solicited by written communication at
least 10 days prior to such meeting. To be entitled to vote, a Participant or
Annuitant must have been such on the record date. The number of shares as to
which voting instructions may be given to Fidelity Standard Life is determined
by dividing the value on the record date on that portion of the Participant's
Account then allocated to a Series for a Fund by the net asset value of a Fund
share as of the same date.
LEGAL PROCEEDINGS
Fidelity Standard Life, in the ordinary course of its business, is engaged
in litigation of various kinds which in its judgment is not of material
importance in relation to its total assets. There are no present or pending
material legal proceedings affecting the Separate Account.
ADDITIONAL INFORMATION
For further information contact Fidelity Standard Life at the address and
phone number on the cover of this Prospectus. A copy of the Statement of
Additional Information, dated May 1, 1996, which provides more detailed
information about the Contracts, may also be obtained. Set forth below is the
table of contents for the Statement of Additional Information.
A registration statement has been filed with the SEC under the Securities
Act of 1933 with respect to the Contracts offered hereby. This Prospectus does
not contain all the information set forth in the registration statement, to all
of which reference is made for further information concerning the Separate
Account, Fidelity Standard Life and the Contracts offered hereby. Statements
contained in this Prospectus as to the contents of the Contracts and other legal
instruments are summaries. For a complete statement of the terms thereof
reference is made to such instruments as filed.
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
The Insurance Company........................................................ 3
The Separate Account......................................................... 3
The Funds.................................................................... 3
Purchase of Securities Being Offered......................................... 6
Surrender Charges............................................................ 6
Net Investment Factor........................................................ 7
Annuity Payments............................................................. 7
Additional Federal Income Tax Information.................................... 9
Underwriters, Distribution of the Contracts.................................. 10
Calculation of Performance Data.............................................. 10
Voting Rights................................................................ 11
Safekeeping of the Securities................................................ 12
Servicing Agent.............................................................. 12
Independent Auditors......................................................... 12
Legal Matters................................................................ 12
State Regulation of Fidelity Standard Life................................... 12
Financial Statements......................................................... 13
</TABLE>
21
<PAGE> 25
'33 Act File No. 33-225
STATEMENT OF
ADDITIONAL INFORMATION
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
___________________________________________________________
GROUP FLEXIBLE PAYMENT FIXED AND
VARIABLE ANNUITY CONTRACTS
___________________________________________________________
FIDELITY STANDARD LIFE INSURANCE COMPANY
MAY 1, 1996
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus. A copy of the prospectus, dated May 1,
1996, may be obtained without charge by writing to Fidelity Standard Life
Insurance Company, P.O. Box 92193, Los Angeles, California 90009 or by
telephoning (800)283-4536.
FD 224R1
<PAGE> 26
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Insurance Company 3
The Separate Account 3
The Funds 3
Purchase of Securities Being Offered 6
Surrender Charges 6
Net Investment Factor 7
Annuity Payments 7
Additional Federal Income Tax Information 9
Underwriters, Distribution of the Contracts 10
Calculation of Performance Data 10
Voting Rights 11
Safekeeping of Securities 12
Servicing Agent 12
Independent Auditors 12
Legal Matters 12
State Regulation of Fidelity Standard Life 12
Financial Statements 13
</TABLE>
2
<PAGE> 27
THE INSURANCE COMPANY
Fidelity Standard Life Insurance Company ("Fidelity Standard Life") is a
wholly-owned subsidiary of Security First Life Insurance Company, a Delaware
life insurance company, which, in turn is a wholly owned subsidiary of Security
First Group, Inc. ("SFG"). The common shares of SFG are held by London
Insurance Group, Inc., a Canadian insurance service corporation and publicly
traded subsidiary of the Trilon Financial Corporation of Toronto, Canada.
THE SEPARATE ACCOUNT
Amounts transferred to the Separate Account under the Contracts are invested in
the securities of six Funds: (i) the Money Market Portfolio and Growth
Portfolio of the Variable Insurance Products Fund; (ii) the Asset Manager
Portfolio and Index 500 Portfolio of the Variable Insurance Products Fund II;
and (iii) the T. Rowe Price Bond Series and the T. Rowe Price Growth and Income
Series of the Security First Trust. The Separate Account is divided into a
number of Series of Accumulation and Annuity Units, which correspond
respectively to these six funds.
THE FUNDS
The Variable Insurance Products Fund and Variable Insurance Products Fund II
are Massachusetts business trusts and are registered with the Securities and
Exchange Commission as open-end, diversified management investment companies.
Four of the series from these investment companies are offered under the
contracts.
The Money Market Portfolio from the Variable Insurance Products Fund seeks to
obtain as high a level of current income as is consistent with preserving
capital and providing liquidity. The Portfolio will invest only in high
quality U.S. dollar denominated money market securities of domestic and foreign
issuers.
The Growth Portfolio from the Variable Insurance Products Fund seeks to achieve
capital appreciation. The Portfolio normally purchases common stocks, although
its investments are not restricted to any one type of security. Capital
appreciation may also be found in other types of securities, including bonds
and preferred stocks.
The Asset Manager Portfolio from the Variable Insurance Products Fund II seeks
high total return with reduced risk over the long-term by allocating its assets
among stocks, bonds and short-term fixed-income instruments.
The Index 500 Portfolio from the Variable Insurance Products Fund II seeks to
provide investment results that correspond to the total return (i.e., the
combination of capital changes and income) of common stocks publicly traded in
the United States. In seeking this objective, the Portfolio attempts to
duplicate the composition and total return of the Standard & Poor's 500
Composite Stock Price Index while keeping transaction costs and other expenses
low. The Portfolio is designed as a long-term investment option.
The Security First Trust is a Massachusetts business trust which was formed on
February 13, 1987. Two of the series of the Trust are offered under the
Contracts:
The T. Rowe Price Bond Series (formerly Bond Series) seeks to achieve the
highest investment income over the long-term consistent with the preservation
of capital through investment primarily in marketable debt instruments. Growth
of principal and
3
<PAGE> 28
income will also be objectives with respect to up to 10% of the Bond Series'
assets, which may be invested in common and preferred stocks.
The T. Rowe Price Growth and Income Series (formerly Growth and Income Series)
seeks growth of principal and a reasonable level of current income. While this
series will generally invest in common stock and other equities, it may,
depending on economic conditions, reduce such investments and substitute
fixed-income instruments. Through flexible and aggressive portfolio
management, this series will attempt to take advantage of opportunities for
both growth of principal and current income.
Fidelity Variable Insurance Products Fund and Fidelity Insurance Products Fund
II have entered into investment advisory agreements with Fidelity Management
and Research Company ("FMR") under which it received investment advisory fees.
Money Market Portfolio's advisory fee is made up of two components: (a) a basic
fee rate and (b) an income-based component. The basic fee rate is the sum of
the following two components:
a. A group fee rate based on the monthly average net assets of all the
mutual funds advised by FMR. This rate cannot rise above .37%, and it
drops as total assets in all these funds rise. The effective group fee
rate for December 1995 was .1482%.
b. An individual fund fee rate of 0.03%.
One-twelfth of the combined annual fee rate is applied to the fund's net assets
averaged over the most recent month, giving dollar amount which is the fee for
that month. If the fund's gross yield is 5% or less, the basic fee is the
total management fee. The income-based component is added to the basic fee
only when the fund's yield is greater than 5%. The income-based fee is 6% of
that portion of the fund's yield that represents a gross yield of more than 5%
per year. The maximum income-based component is .24%.
For fiscal year 1995, the Portfolio's Management fee was .24% of the average
net assets of the Portfolio, approximately $2.40 for every $1,000 of the
Portfolio's average net assets.
Growth Portfolio's annual fee rate is the sum of two components:
a. A group fee rate based on the monthly average net assets of all the
mutual funds advised by FMR. This rate cannot rise above .52%, and
it drops as total assets in all these funds rise. The effective
group fee rate for December 1995 was .3097%.
b. An individual fund fee rate of .30%.
One-twelfth of the combined annual rate is applied to each Portfolio's net
assets averaged over the most recent month, giving a dollar amount which is the
fee for that month.
In fiscal year 1995, FMR's fee was .61% of Growth Portfolio's average net
assets, or $6.10 for every $1,000 of the Portfolio's average net assets.
4
<PAGE> 29
Asset Manager Portfolio's annual fee is the sum of two components:
a. A group fee rate based on the monthly average net assets of all the
mutual funds advised by FMR. This rate cannot rise above .52%, and
it drops as total assets in all these funds rise. The effective
group fee rate for December 1995 was .3097%.
b. An individual fund fee rate of .40%.
One-twelfth of the combined annual fee rate is applied to the Portfolio's net
assets averaged over the most recent month, giving a dollar amount which is the
fee for that month.
In fiscal year 1995, FMR's fee was .71% of the Portfolio's average net assets
or $7.10 for every $1,000 of the Portfolio's average net assets.
Index 500 Portfolio pays a monthly management fee to FMR at the annual rate of
.28% of the Portfolio's average net assets. One-twelfth of this annual fee
rate is applied to the net assets averaged over the most recent month, giving a
dollar amount which is the management fee for that month. In fiscal year 1995,
FMR reimbursed to the Portfolio its management fee.
The mutual funds advised by FMR have over 25 million shareholder accounts with
a total value of more than $374 billion.
The two series of the Security First Trust have contracted to receive
investment advice and management from Security First Investment Management
Corporation ("Security Management"), a wholly-owned subsidiary of SFG, and an
affiliate of Security First Life and Security First Financial, Inc. Security
Management receives an annual fee, accrued daily and payable in monthly
installments, based on 0.50% of the average daily net assets of each series.
Security Management has entered into a Sub-Advisory Agreement with T. Rowe
Price Associates, Inc. ("Price Associates") under which Price Associates
provides investment advisory services to each of the two series of Security
First Trust. Price Associates receives an annual fee from Security Management,
accrued daily and payable in monthly installments, equal to 0.35% of average
daily net assets of each of the series.
The Money Market Portfolio of the Variable Insurance Products Fund has
determined to maintain a stable net asset value per share at $1.00 by virtue of
the penny rounding method permitted by Rule 2a-7 under the 1940 Act, and this
method will continue to be used so long as the Board of Trustees believes that
this value fairly reflects the market-based net asset per share. No assurance
can be given that the Money Market Portfolio will be able to maintain a stable
net asset value of $1.00 per share.
The primary objective of a variable annuity having Separate Account assets
chiefly invested in a portfolio of common stocks is to provide Annuitants with
Annuity payments which will tend to remain level during a period when the
economy is relatively stable and to provide increased Annuity payments during
periods of economic growth and inflation. It is believed that the value of
such Separate Account investment will, over the long term, tend to reflect
changes in the general economic price level. Historically, the value of a
diversified portfolio of common stocks held for an extended period of time has
tended to rise during the periods of economic growth and inflation. However,
there is no exact correlation between the two. In some periods, the value of a
common stock portfolio has declined while the cost of living has increased.
5
<PAGE> 30
The primary objective of a variable annuity having Separate Account assets
chiefly invested in fixed-income securities (such as the T. Rowe Price Bond
Series) is to provide Annuitants with annuity payments which will be higher in
amount than those provided by conventional Fixed Annuities. It should be
recognized, however, that a portfolio consisting of non-convertible
fixed-income securities and which is designed to obtain a high level of current
yield involves market risks that are not found in a fixed annuity and that
differ from those found in a variable annuity invested primarily in common and
preferred stocks. Certain securities (high yield bonds) in the portfolio will
be very sensitive to adverse economic changes and corporate developments;
however, to date none of the funds have invested in high yield securities.
Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of high yield bonds, especially
in a thin market. In addition, periods of economic uncertainty and change may
result in increased volatility of both the market prices of high yield bonds
and the fund's net asset value.
The market value of non-convertible fixed-income securities usually reflects
yields then generally available in securities of similar quality and type.
Based upon historical analysis, when interest rates decline, the market value
of a portfolio already invested at higher interest rates may be expected to
rise if such securities are not subject to call at the option of the issuer.
Conversely, when such interest rates increase, the market value of a portfolio
already invested at lower interest rates may be expected to decline. The Asset
Manager Portfolio, T. Rowe Price Bond Series and T. Rowe Price Growth and
Income Series may, pursuant to the investment policies, invest a significant
portion of their assets in long-term fixed-income securities. Because of this,
Participants who select one of these series as the basis for Annuity Payments
should recognize that Annuity Payments may decrease during periods when
interest rates and general prices are rising.
Participants should carefully consider which of the underlying series is best
suited to their long-term needs.
PURCHASE OF SECURITIES BEING OFFERED
Except as may be limited by the Plan, Purchase Payments may be made at any
time. The minimum Purchase Payment is $20.00 with an annual minimum of $240.
Purchase Payments will be allocated to Series of the Separate Account or to the
General Account at the election of the Participant. Amounts in Separate
Account Series may be converted to amounts in any one or more Separate Account
Series at any time.
Each transfer is subject to a $10 transaction charge. This charge is applied
by reducing the Participant's interest in the Series from which the conversion
is made on a pro rata basis.
SURRENDER CHARGES
Subject to the Plan, all or a portion of the Participant's Account may be
surrendered at any time prior to the Annuity Date. A surrender charge
(contingent deferred sales charge) may be deducted in the event the Participant
requests a full or partial surrender from the Separate Account. The charge is
based on a graduated table of charges starting at 7% for Purchase Payments
credited within the calendar year of the surrender and decreasing 1% for each
succeeding calendar year and declining to 0% for Purchase Payments received
more than four calendar years prior to the surrender. In no event, however,
will surrender charges imposed exceed 9% of the Purchase Payments. No
6
<PAGE> 31
charge will be made for that part of the first surrender in a Certificate Year
that does not exceed 10% of the Participant's interest in the Separate Account
and 10% of his or her interest in the General Account.
NET INVESTMENT FACTOR
The Separate Account net investment factor is an index of the percentage change
(adjusted for distributions by the series and the deduction of the mortality,
administrative expense and distribution risk fees) in the net asset value of
each series in which the series is invested, since the preceding Business Day.
The Separate Account net investment factor for each series of Accumulation
Units is determined for any Business Day by dividing (i) the net asset value
of a share of the series which is represented by such series at the close of
the business on such day, plus the per share amount of any distributions made
by such series on such day by (ii) the net asset value of share of such Series
determined as of the close of business on the preceding Business Day and then
subtracting from this result the mortality, administrative expense and
distribution risk fees factor of .003699% for each calendar day between the
preceding Business Day and the end of the current Business Day.
ANNUITY PAYMENTS
Basis of Variable Annuity Benefits
The Variable Annuity benefit rates used in determining Annuity Payments under
the Contract are based on actuarial assumptions, reflected in tables in the
Contract, as to the expected mortality and adjusted age and the form of Annuity
selected. The mortality basis for these tables is Fidelity Standard Life's
Modified Select Annuity Mortality Table, projected to the year 2000 on
Projection Scale C, with interest at 4.25% for all functions involving life
contingencies and the portion of any period certain beyond 10 years, and 3.25%
for the first 10 years of any certain period. Adjusted age in those tables
means actual age to the nearest birthday at the time the first payment is due,
adjusted according to the following table:
<TABLE>
<CAPTION>
Calendar Year Adjusted
of Birth Age Is
-------- ------
Before 1916 Actual Age
<S> <C>
1916 - 1935 Actual Age Minus 1
1936 - 1955 Actual Age Minus 2
1956 - 1975 Actual Age Minus 3
1976 - 1995 Actual Age Minus 4
</TABLE>
Determination of Amount of Monthly Variable Annuity Payments for First Year
The Separate Account value used to establish the monthly Variable Annuity
Payment for the first year consists of the value of Accumulation Units of each
Series of the Separate Account credited to a Participant on the last day of the
second calendar week before the Annuity Date. The Contract contains tables
showing monthly payment factors and Annuity premium rates per $1,000 of
Separate Account value to be applied under Options 1 through 4.
At the beginning of the first payment year, an amount is transferred from the
Separate Account to Fidelity Standard Life's General Account and level monthly
Annuity
7
<PAGE> 32
payments for the year are made out of the General Account. The amount to be
transferred is determined by multiplying the Annuity premium rate per $1,000
set forth in the Contract tables by the number of thousands of dollars of
Separate Account Value credited to a Participant. The level monthly payment
for the first payment year is then determined by multiplying the amount
transferred (the "Annuity Premium") by the monthly payment factor in the same
table. In the event the Contract involved has Separate Account Accumulation
Units in more than one Series, the total monthly Annuity payment for the first
year is the sum of the monthly Annuity payments, determined in the same manner
as above, for each Series.
At the time the first year's monthly payments are determined, a number of
Annuity Units for each Separate Account Series is also established for the
Annuitant by dividing the monthly payment derived from that series for the
first year by the Separate Account Annuity Unit values for the series on the
last Business Day of the second calendar week before the first Annuity payment
is due. The number of Annuity Units remains fixed during the Annuity period
unless Annuity Units are converted to another series.
Determination of Amount of Monthly Variable Annuity Payments for Second and
Subsequent Years
As of each anniversary of the Annuity Date, Fidelity Standard Life will
determine the amount of the monthly Variable Annuity Payments for the year then
beginning. Separate determinations will be made for each Separate Account
Series in which the Annuitant has Annuity Units, with the total Annuity Payment
being the sum of the payments derived from the series. The amount of monthly
payments for any Separate Account series for any year after the first will be
determined by multiplying the number of Annuity Units for that series by the
Annuity Unit value for that series for the Valuation Period in which the first
payment for the year is due. It will be Fidelity Standard Life's practice to
mail Variable Annuity payments no later than seven days after the last day of
the Valuation Period upon which they are based or the monthly anniversary
thereof.
The objective of a Variable Annuity contract is to provide level payments
during periods when the economy is relatively stable and to reflect as
increased payments only the excess of investment results flowing from inflation
or an increase in productivity. The achievement of this objective will depend,
in part, upon the validity of the assumption that the net investment return of
the Separate Account equals the Assumed Investment Return during periods of
stable prices. Subsequent years' payments will be smaller than, equal to or
greater than the first year's payments depending on whether the actual net
investment return for the Separate Account is smaller than, equal to or greater
than the Assumed Investment Return.
Annuity Unit Values
The Separate Account annuity unit values for each series was originally
established at $5 per unit. The value of an annuity unit for each series for
any subsequent valuation period is determined by multiplying the value of an
annuity unit at the end of the preceding valuation period by the "Annuity
Change Factor" for the second preceding valuation period. The Annuity Change
Factor is an adjusted measurement of the investment performance of the Series
since the end of the preceding valuation period. The Annuity Change Factor for
any valuation period is determined by dividing the value of an accumulation
unit at the end of the valuation period and multiplying the result by a
neutralization factor.
8
<PAGE> 33
Variable annuity payments for each year after the first reflect variations in
the investment performance of the Separate Account above and below an assumed
investment return. This assumed investment rate is included for purposes of
actuarial computations and does not relate to the actual investment performance
of the underlying series. Therefore, the Assumed Investment Return must be
"neutralized" in computing the Annuity Change Factor. The Interest
Neutralization Factor is determined by dividing 1 by the effective weekly
equivalent of the assumed investment return previously selected by the
annuitant. For example, the Interest Neutralization Factor for the assumed
investment return of 4.25% is calculated as follows:
Interest Neutralization Factor: 1/[1 + 0.0425)1/52] = 0.9991999
ADDITIONAL FEDERAL INCOME TAX INFORMATION
Fidelity Standard Life is required to withhold federal income tax on any
Contract distributions to Participants (such as Annuity payments, lump sum
distributions or partial surrenders). However, Participants are allowed to
make an election not to have federal income tax withheld. After such election
is made with respect to Annuity payments, an Annuitant may revoke the election
at any time, and thereafter commence withholding. In such a case, Fidelity
Standard Life will notify the payee at least annually of his or her right to
change such election.
The withholding rate followed by Fidelity Standard Life will be applied only
against the taxable portion of the Contract distributions. Federal tax will be
withheld from Annuity payments pursuant to the recipient's withholding
certificate. If no withholding certificate is filed with Fidelity Standard
Life, federal tax will be withheld from Annuity payments on the basis that the
payee is married with three withholding exemptions. Federal tax on the taxable
portion of a partial or total surrender (i.e., non-periodic distribution)
generally will be withheld at a flat rate 10% rate. In the case of a plan
qualified under Sections 401(a) or 403(a) of the Code, if the balance to the
credit of a participant in a plan is distributed within one taxable year to the
recipient ("total distribution"), the amount of withholding will approximate
the federal income tax on a lump sum distribution. If a total distribution is
made from such a plan or a tax-sheltered annuity on account of the
Participant's death, the amount of withholding will reflect the exclusion from
federal income tax for employer-provided death benefits.
Fidelity Standard Life will be required to withhold 20% of certain taxable
amounts constituting "eligible rollover distributions" to participants
(including lump sum distributions) in retirement plans under Code Section 401
and tax deferred annuities under Code Section 403(b). This new withholding
requirement does not apply to distributions from such plans and annuities in
the form of a life and life expectancy annuity (individual or joint), an
annuity with a designated period of 10 years or more, or any distributions
required by the minimum distributions requirements of Code Section 401(a)(9).
Withholding on these latter types of distribution will continue to be made
under the rules described in the prior paragraph. A participant cannot elect
out of the new 20% withholding requirement. However, if an eligible rollover
distribution is rolled over into an eligible retirement plan or IRA in a direct
trustee-to-trustee transfer, no withholding will be required.
Payees are required by law to provide Fidelity Standard Life (as payor) with
their correct taxpayer identification number ("TIN"). If the payee is an
individual, the TIN is the same as his or her Social Security number. If the
payee elects not to have federal income tax withheld on an Annuity payment or a
non-periodic distribution and a
9
<PAGE> 34
correct TIN has not been provided, such election is ineffective, and such
payment will be subject to withholding as noted above.
Obtaining Tax Advice
It should be recognized that the federal income tax information in the
prospectus and this Statement of Additional Information is not exhaustive and
is for information purposed only. The discussions do not purport to cover all
situations involving the purchase of an annuity or the election of an option
under the Contract. Tax results may vary depending upon individual situations
and special rules may apply in certain cases. State and local tax results may
also vary. For these reasons a qualified tax adviser should be consulted.
UNDERWRITERS, DISTRIBUTION OF THE CONTRACTS
The Contracts will be sold as a continuous offering by individuals who are
appropriately licensed as insurance agents of Fidelity Standard Life for the
sale of life insurance and variable annuity contracts in the state where the
sale is made. In addition, these individuals will be registered
representatives of the principal underwriter, Security First Financial, Inc.,
or of other broker-dealers registered under the Securities Exchange Act of 1934
whose registered representatives are authorized by applicable law to sell
variable annuity contracts issued by Fidelity Standard Life. Commissions on
sales of contracts range from 0% to 7.5%. Agents are paid from the General
Account of Fidelity Standard Life. Such commissions bear no direct
relationship to any of the charges under the Contracts. It is expected that
the Contracts will be sold in all states where Fidelity Standard Life is
qualified to sell insurance. No direct underwriting commissions are paid to
Security First Financial, Inc.
CALCULATION OF PERFORMANCE DATA
a. Money Market Portfolio. The yield of the Money Market Portfolio of the
Separate Account for the seven day period ended December 31, 1995 was 3.80%.
This yield was computed by determining the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance
of one accumulation unit of the Series at the beginning of the period,
subtracting a hypothetical charge reflecting deductions from account values,
and dividing the difference by the value of the account at the beginning of the
base period to obtain the base period return, and multiplying the base period
return by (365/7) with the resulting yield figure carried to a least the
nearest hundredth of one percent.
The effective yield of the Money Market Portfolio of the Separate Account for
the seven day period ended December 31, 1995 was 3.88%. This effective yield
was computed by determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account having a balance of one
accumulation unit of the Series at the beginning of the period, subtracting a
hypothetical charge reflecting deductions from account values, and dividing the
difference by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base period return by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula:
EFFECTIVE YIELD = (BASE PERIOD RETURN + 1)365/7 - 1.
10
<PAGE> 35
b. Other Funds. The average annual total return of the other Funds in the
Separate Account as of December 31, 1995 are as follows:
Average Annual Total Returns
<TABLE>
<CAPTION>
Inception
1 Year 3 Years 5 Years to Date
------ ------- ------- -------
<S> <C> <C> <C> <C>
Growth Portfolio 33.69% 14.34%
Asset Management Portfolio 15.40% 6.92%
Index 500 Portfolio 35.39% 14.54%
T. Rowe Price Bond Series 15.22% 5.82% 7.10% 6.39%
T. Rowe Price Growth and Income 29.37% 13.94% 14.76% 11.64%
Series
</TABLE>
Average annual total return was computed by finding the average annual
compounded rates of return over the one year and inception to date periods that
would equate the initial amount invested to the ending redeemable value,
according to the following formula:
P(1+T)n = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made
at the beginning of the 1, 5, or 10 year and inception to date
periods (or fractional portion thereof)
The computation of average annual total returns does take into consideration
recurring charges and any non-recurring charges applicable to a Contract which
is surrendered in full at the end of the stated holding period.
From inception to July 1983, Security Management reimbursed the T. Rowe Price
Growth and Income Series for expenses in excess of the maximum expense
limitation. These reimbursements were repaid from August 1983 to July 1986.
The T. Rowe Price Bond Series was reimbursed for excess expenses from inception
to July 1985, and continues to repay such reimbursements since August 1985.
Likewise, certain expenses of the Index 500 Portfolio have been reimbursed by
the portfolio's investment adviser. Reimbursement of expenses to a series
increases average annual total returns, and repayment of such reimbursements
reduces these returns.
VOTING RIGHTS
Unless otherwise restricted by the Plan under which a Contract is issued, each
Participant will have the right to instruct Fidelity Standard Life with respect
to voting the Fund shares which are the assets underlying the Participant's
interest in the Separate Account, at all regular and special shareholder
meetings. An Annuitant's
11
<PAGE> 36
voting power with respect to Fund shares held by the Separate Account declines
during the time the Annuitant is receiving a Variable Annuity based on the
investment performance of the Separate Account, because amounts attributable to
the Annuitant's interest are being transferred annually to the General Account
to provide the variable payments.
SAFEKEEPING OF SECURITIES
All assets of the Separate Account are held in the custody of Fidelity Standard
Life. The assets of each Separate Account Series will be kept physically
segregated by Fidelity Standard Life and held separate from the assets of any
other firm, person or corporation. Additional protection for the assets of the
Separate Account is afforded by fidelity bonds covering all of Fidelity
Standard Life's officers and employees.
SERVICING AGENT
An Administrative Services Agreement has been entered into between Fidelity
Standard Life and SFG under which the latter has agreed to perform certain of
the administrative services relating to the Contracts and for the Separate
Account. SFG performs substantially all of the recordkeeping and
administrative services for the Separate Account.
INDEPENDENT AUDITORS
The financial statements of Fidelity Standard Life Insurance Company and
Fidelity Standard Life Separate Account included in this Statement of
Additional Information and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, for the periods indicated in their reports
thereon which appear elsewhere herein and in the Registration Statement. The
financial statements audited by Ernst & Young LLP have been included in
reliance on their reports, given on their authority as experts in accounting
and auditing.
LEGAL MATTERS
Legal matters concerning federal securities laws applicable to the issue and
sale of the Variable Annuity contracts have been passed upon by Routier and
Johnson, P.C., 1700 K Street, N.W., Washington, D.C. 20006.
STATE REGULATION OF FIDELITY STANDARD LIFE
Fidelity Standard Life is subject to the laws of the State of Delaware
governing insurance companies and to regulation by the Delaware Commissioner of
Insurance. An annual statement, in a prescribed form, is filed with the
Commissioner on or before March 1 each year covering the operations of Fidelity
Standard Life for the preceding year and its financial condition on December 31
of such year. Fidelity Standard Life's books and assets are subject to review
or examination by the Commissioner or his agents at all times, and a full
examination of its operations is usually conducted by the National Association
of Insurance Commissioners at least once in every three years. Fidelity
Standard Life was last examined as of December 31, 1993. While Delaware
insurance law prescribes permissible investments for Fidelity Standard Life,
it does not prescribe permissible investments for the Separate Account, nor
does it involve supervision of the investment management or policy of Fidelity
Standard Life.
12
<PAGE> 37
In addition, Fidelity Standard Life is subject to the insurance laws and
regulations of other jurisdictions in which it is licensed to operate. State
insurance laws generally provide regulations for the licensing of insurers and
their agents, govern the financial affairs of insurers, require approval of
policy forms, impose reserve requirements and require filing of an annual
statement. Generally, the insurance departments of these other jurisdictions
apply the laws of Delaware in determining permissible investments for Fidelity
Standard Life.
FINANCIAL STATEMENTS
The financial statements of Fidelity Standard Life contained herein should be
considered only for the purposes of informing investors as to its ability to
carry out the contractual obligations as depositor under the Contracts as
described elsewhere herein and in the prospectus. The financial statements of
the Separate Account are also included in this Statement of Additional
Information.
13
<PAGE> 38
[LETTERHEAD]
Report of Independent Auditors
To the Board of Directors
Fidelity Standard Life Insurance Company
and Contract Owners
Fidelity Standard Life Separate Account
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Fidelity Standard Life Separate
Account (comprised of Series B, G, FA, FG, FI and FM) as of December 31, 1995,
and the related statements of operations for the year or period then ended and
changes in net assets for each of the two years or periods then ended. These
financial statements are the responsibility of the Separate Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1995,
by correspondence with the respective mutual fund managers. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fidelity Standard Life
Separate Account (comprised of the above referenced Series) at December 31,
1995, the results of their operations for the year or period then ended, and
the changes in their net assets for each of the two years or periods then
ended, in conformity with generally accepted accounting principles.
/s/ Ernst & Young
-----------------
Ernst & Young
Los Angeles, California
April 5, 1996
<PAGE> 39
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Series B Series G Series FA Series FG Series FI Series FM
----------- ----------- ------------- ---------- ----------- ----------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments
Security First Trust - Bond Series
(514,847 shares at net asset value
of $3.94 per share; cost $2,019,483) $2,029,992
Security First Trust - Growth and
Income Series (2,243,551 shares
at net asset value of $11.52 per
share; cost $19,846,793) $25,840,773
Fidelity Investments - VIP Asset
Manager (1,335,929 shares at net
asset value of $15.79 per share;
cost $19,201,714) $21,094,325
Fidelity Investments - VIP Growth
Portfolio (476,406 shares at net
asset value of $29.20; cost
$11,310,713) $13,911,070
Fidelity Investments - VIP Index
500 (20,348 shares at net asset value
of $75.71; cost $1,306,402) $1,540,571
Fidelity Investments - VIP Money Market
Portfolio (564,798 shares at net asset
value of $1.00; cost $564,798) $564,798
Receivable from The Fidelity Standard
Life Insurance Company for purchases 1,033 12,713 34,040 26,421 506 137
Other assets 7,080 972 1,688 475 821 2
----------- ----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $ 2,038,105 $ 25,854,458 $ 21,130,053 $13,937,966 $ 1,541,898 $ 564,937
</TABLE>
1
<PAGE> 40
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES (continued)
<TABLE>
<CAPTION>
Series B Series G Series FA Series FG Series FI Series FM
----------- ----------- ----------- ------------ ----------- ------------
LIABILITIES
<S> <C> <C> <C> <C> <C> <C>
Payable to The Fidelity Standard
Life Insurance Company for
mortality and expense risk $ 2,305 $ 29,264 $ 23,653 $ 15,674 $ 1,701 $ 646
Payable to The Fidelity Standard
Life Insurance Company for
redemptions 52 3,421 9,622 6,756 276
Other liabilities 8,033 12,699 26,290 23,759 506 137
--------- ---------- ------------ ---------- ---------- ----------
TOTAL LIABILITIES 10,390 45,384 59,565 46,189 2,483 783
NET ASSETS
Cost to Investors:
Series B Accumulation Units 2,017,206
Series G Accumulation Units 19,815,094
Series FA Accumulation Units 19,177,877
Series FG Accumulation Units 11,291,420
Series FI Accumulation Units 1,305,246
Series FM Accumulation Units 564,154
Accumulated Undistributed Income:
Net unrealized appreciation 10,509 5,993,980 1,892,611 2,600,357 234,169
----------- ---------- ------------ ----------- ----------- -----------
NET ASSETS APPLICABLE TO
OUTSTANDING UNITS OF CAPITAL $ 2,027,715 $ 25,809,074 $ 21,070,488 $13,891,777 $ 1,539,415 $ 564,154
=========== ============ ============ =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 41
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Series B Series G Series FA Series FG Series FI Series FM
---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 115,394 $ 749,557 $ 273,221 $ 34,241 $ 8,546 $ 27,963
Other income 340 6,332 3,937 46,698 2,581 748
------------ ----------- ----------- ----------- ----------- ----------
115,734 755,889 277,158 80,939 11,127 28,711
EXPENSES
Charges for mortality and
expense risk 24,956 297,299 228,695 135,329 11,733 6,643
------------ ----------- ----------- ----------- ---------- ----------
Net Investment Income (Loss) 90,778 458,590 48,463 (54,390) (606) 22,068
REALIZED AND UNREALIZED INVESTMENT GAINS:
Net realized investment gains 3,827 365,372 59,576 38,627 17,179
Unrealized investment appreciation
during the year 165,614 4,854,875 2,415,124 2,560,415 231,370
------------ ------------- ---------- ----------- ----------
Net investment gains 169,441 5,220,247 2,474,700 2,599,042 248,549
------------ ------------- ----------- ----------- ---------- ----------
Increase in net assets resulting
from operations $ 260,219 $ 5,678,837 $ 2,523,163 $ 2,544,652 $ 247,943 $ 22,068
============ ============ =========== =========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 42
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Series B Series G Series FA Series FG Series FI Series FM
----------- ----------- ----------- ---------- ---------- -----------
Operations:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 90,778 $ 458,590 $ 48,463 $ (54,390) $ (606) $ 22,068
Realized investment gains 3,827 365,372 59,576 38,627 17,179
Unrealized investment appreciation
during the year 165,614 4,854,875 2,415,124 2,560,415 231,370
----------- ----------- ----------- ---------- ---------- ---------
Increase in net assets resulting
from operations 260,219 5,678,837 2,523,163 2,544,652 247,943 22,068
Increase in net assets resulting from
capital unit transactions 72,858 1,657,435 6,304,914 5,521,360 879,454 88,837
----------- ----------- ----------- ----------- ---------- ---------
Total Increase 333,077 7,336,272 8,828,077 8,066,012 1,127,397 110,905
Net Assets at December 31, 1994 1,694,638 18,472,802 12,242,411 5,825,765 412,018 453,249
----------- ---------- ----------- ----------- ---------- ---------
Net Assets at December 31, 1995 $ 2,027,715 $25,809,074 $21,070,488 $13,891,777 $1,539,415 $ 564,154
=========== =========== =========== =========== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 43
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Series B Series G Series M Series FA Series FG Series FI Series FM
----------- ----------- ---------- ----------- --------- --------- ----------
Operations:
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income (loss) $ 76,140 $ 396,054 $ 445 $ 75,295 $ 62,083 $ (3,270) $ 10,967
Realized investment gains (losses) 27,104 868,219 3,196 (1,165) 135
Unrealized investment appreciation
(depreciation) during the year (187,457) (986,514) (668,849) 9,279 4,384
--------- --------- --------- ----------- ---------- -------- --------
Increase (decrease) in net assets
resulting from operations (84,213) 277,759 445 (590,358) 70,197 1,249 10,967
Increase (decrease) in net assets
resulting from capital unit
transactions (52,773) 1,164,465 (349,125) 9,989,064 4,296,923 300,454 431,181
---------- ----------- --------- ----------- ---------- -------- --------
Total Increase (Decrease) (136,986) 1,442,224 (348,680) 9,398,706 4,367,120 301,703 442,148
Net Assets at December 31, 1993 1,831,624 17,030,578 348,680 2,843,705 1,458,645 110,315 11,101
---------- ----------- --------- ----------- ---------- -------- --------
Net Assets at December 31, 1994 $1,694,638 $18,472,802 $ 0 $12,242,411 $5,825,765 $412,018 $453,249
========== =========== ========= =========== ========== ======== ========
</TABLE>
5
<PAGE> 44
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
SCHEDULE I
Carrying
Value Unrealized Cost
Name of Issue Shares (Note A) Appreciation (Note B)
- --------------------------- ------- ------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Security First Trust Bond
Series - capital shares 514,847 $ 2,029,992 $ 10,509 $ 2,019,483
Security First Trust Growth
and Income Series - capital
shares 2,243,551 $ 25,840,773 $ 5,993,980 $ 19,846,793
Fidelity Investments VIP
Asset Manager - capital
shares 1,335,929 $ 21,094,325 $ 1,892,611 $ 19,201,714
Fidelity Investments VIP
Growth Portfolio -
capital shares 476,406 $ 13,911,070 $ 2,600,357 $ 11,310,713
Fidelity Investments VIP
Index 500 - capital shares 20,348 $ 1,540,571 $ 234,169 $ 1,306,402
Fidelity Investments Money
Market Portfolio - capital
shares 564,798 $ 564,798 $ 564,798
</TABLE>
Note A The carrying value of the investments is the reported net asset
value of the investment companies capital shares.
Note B Cost is determined by using the first-in, first-out cost method.
6
<PAGE> 45
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 -- BASIS OF PRESENTATION
Fidelity Standard Life Separate Account (Separate Account) was established on
May 13, 1985, as a separate account of The Fidelity Standard Life Insurance
Company (Fidelity Life), the sponsor company, and is registered under the
Investment Company Act of 1940 as a unit investment trust. Commencement of
operations occurred on January 26, 1988, with the first sales of variable
annuity contracts. The Separate Account is designed to provide annuity
benefits pursuant to variable annuity contracts (the Contracts) issued by
Fidelity Life.
In accordance with the terms of the Contracts, all payments to the Separate
Account by the contract owners must be allocated to purchase shares of any or
all of two series of Security First Trust (the Trust), a Massachusetts business
trust, and four mutual funds (investment companies). The series of the Trust
are Bond Series, and Growth and Income Series. The mutual funds are Fidelity
Investments: VIP Asset Manager, VIP Growth Portfolio, VIP Index 500, and VIP
Money Market Portfolio.
The investment companies are registered as diversified, open-end management
investment companies under the Investment Company Act of 1940. The Separate
Account is correspondingly divided into six series of Accumulation Units,
Series B, G, FA, FG, FI, and FM, relating to investments in each of the
investment companies, respectively.
All Series of the Trust receive administrative services for a fee from Security
First Investment Management Corporation (Security Management). Security First
Financial, Inc. is the principal underwriter for the Contracts. Fidelity Life,
Security Management, and Security First Financial, Inc. are wholly-owned
subsidiaries of Security First Group, Inc. Investment advice is provided to
the Trust by T. Rowe Price Associates, Inc.
The Separate Account and each series therein are administered and accounted for
as part of the business of Fidelity Life, but the investment income and capital
gains and losses of each Separate Account series are identified with the assets
held for that series in accordance with the terms of the Contracts, without
regard to investment income and capital gains and losses arising out of any
other business Fidelity Life may conduct.
7
<PAGE> 46
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 1 -- BASIS OF PRESENTATION (continued)
The Separate Account incurs no liability for remuneration to directors,
advisory boards, officers or such other persons who may from time to time
perform services for the Separate Account.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS -- Investments are carried at market value, which is
determined by multiplying the investment company's shares owned by the Separate
Account by the reported net asset value per share of each respective investment
company. Realized investment gains and losses of Separate Account investments
are determined on the first-in, first-out cost basis.
EXPENSES AND CHARGES -- The Separate Account accrues charges incurred for the
mortality and expense risk assumed by Fidelity Life. The Charges are
calculated daily by multiplying the value of the assets of the Separate Account
by .0000370 (1.35% on an annual basis). Fidelity Life has the option of
calling for payment of such charges at any time.
The following charges are deducted from a contract holder's account by Fidelity
Life as a capital transaction by reducing the separate account units held, and
such charges are not an expense of the Separate Account. An administration
charge is deducted from each contract and paid to Fidelity Life at the end of
each contract year prior to the annuity date, and when the entire contract
value is withdrawn on any date other than a contract anniversary. Currently,
the maximum contract charge is $45.00. Fidelity Life currently waives these
fees. In addition, transaction charges of $10 are incurred for each surrender
or annuitization. Upon conversion of either accumulation or annuity units from
one series to another, a $10 conversion charge is incurred. In the event that
a participant withdraws all or a portion of the participant's account, a
contingent deferred sales charge (CDSC) may be applied to the amount of the
contract value withdrawn to cover certain expenses relating to the sale of
contracts. The amount of the CDSC is based upon elapsed time since the premium
was received and disappears in the fifth year. The amount deducted for
contract charges and CDSC was $107,585 for year ended December 31 1995, and
$74,374 for year ended December 31, 1994.
8
<PAGE> 47
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME RECOGNITION AND REINVESTMENT -- Income is recognized as declared payable
by the investment companies. All distributions received are reinvested in the
investment companies.
NOTE 3 -- FEDERAL INCOME TAXES
The operations of the Separate Account form a part of, and are taxed with, the
operations of Fidelity Life, which is taxed as a "life insurance company" under
the Internal Revenue Code, and as such, Fidelity Life is liable for income
taxes, if any, which become payable with respect to the Separate Account's
operations.
Separate accounts are generally required to meet certain diversification
requirements for their assets. However, separate accounts which solely provide
benefits for "pension plan contracts" are exempt from the diversification
requirements. Pension plan contracts include: (i) tax qualified plans; (ii)
employee annuities; (iii) plans for employees of life insurance companies; (iv)
tax sheltered annuities of exempt organizations; (v) individual retirement
accounts or annuities; and (vi) deferred compensation plans of certain
governmental or tax-exempt organizations. The Contracts issued by Fidelity
Life are only offered in connection with pension plan contracts, therefore the
Separate Account is exempt from the diversification requirements.
NOTE 4 -- CAPITAL TRANSACTIONS
Additions and deductions to Units of Capital consisting of the effect of
capital unit transactions were as follows:
<TABLE>
<CAPTION>
Additions to Capital Deductions From Capital
$ Units $ Units
------------- ---------- ------------ -----
Year Ended
December 31, 1995
-------------------
<S> <C> <C> <C> <C>
Series B Accumulation Units 305,853 39,673 232,995 30,553
Series G Accumulation Units 3,717,713 352,021 2,060,278 193,826
Series FA Accumulation Units 8,966,217 1,643,639 2,661,303 479,545
Series FG Accumulation Units 6,181,245 957,378 659,885 99,091
Series FI Accumulation Units 942,638 148,496 63,184 9,731
Series FM Accumulation Units 230,630 43,306 141,793 26,672
</TABLE>
9
<PAGE> 48
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4 -- CAPITAL TRANSACTIONS (continued)
<TABLE>
<CAPTION>
Additions to Capital Deductions From Capital
$ Units $ Units
------------- ---------- ------------ -----
Year Ended
December 31, 1994
----------------------------
<S> <C> <C> <C> <C>
Series B Accumulation Units 398,194 54,858 450,967 61,641
Series G Accumulation Units 3,833,279 412,995 2,668,814 286,583
Series M Accumulation Units 2,942 468 352,067 56,048
Series FA Accumulation Units 10,308,625 1,919,300 319,561 60,130
Series FG Accumulation Units 4,388,159 842,239 91,236 17,524
Series FI Accumulation Units 303,551 58,416 3,097 607
Series FM Accumulation Units 513,471 101,470 82,290 16,102
</TABLE>
NOTE 5 -- UNITS OF CAPITAL
The following are the units outstanding and corresponding unit values as of
December 31, 1995:
<TABLE>
<CAPTION>
Units Unit Value
Description Outstanding $
---------------------------- ----------- ------------
<S> <C> <C>
Series B Accumulation Units 246,163 8.24
Series G Accumulation Units 2,137,371 12.07
Series FA Accumulation Units 3,532,949 5.96
Series FG Accumulation Units 1,953,592 7.11
Series FI Accumulation Units 217,621 7.07
Series FM Accumulation Units 104,205 5.41
</TABLE>
NOTE 6 -- SECURITY FIRST TRUST - MONEY MARKET SERIES INVESTMENT OPTION
Effective January 31, 1994, the Security First Trust Money Market Series
(Series M) was closed and liquidated. Policyholders were made aware of this
and allowed to transfer their funds. The Fidelity Investments VIP Money Market
Fund has similar investment objectives and many policyholders elected to
transfer their Security First Trust Money Market investments into it.
10
<PAGE> 49
[LETTERHEAD]
Report of Independent Auditors
Board of Directors
Fidelity Standard Life Insurance Company
We have audited the accompanying balance sheets of Fidelity Standard Life
Insurance Company as of December 31, 1995 and 1994, and the related statements
of income, stockholder's equity, and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fidelity Standard Life
Insurance Company at December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
As discussed in Notes 3 and 5 to the financial statements, Fidelity Standard
Life Insurance Company made certain accounting changes in 1994 and 1993.
/s/ Ernst & Young
-----------------
Ernst & Young
February 9, 1996
<PAGE> 50
FIDELITY STANDARD LIFE INSURANCE COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
1995 1994
---- ----
(In thousands)
<S> <C> <C>
ASSETS
INVESTMENTS
Fixed maturities:
Available-for-sale $ 374,409 $ 286,908
Held-for-investment 26,718
Policy loans 7,365 5,860
Short-term investments 249 5,987
----------- -----------
382,023 325,473
CASH AND CASH EQUIVALENTS 1,259 1,360
ACCRUED INVESTMENT INCOME 4,211 3,954
DEFERRED POLICY ACQUISITION COSTS 4,195 5,860
OTHER ASSETS
Assets held in separate accounts 65,058 39,085
Other 2,420 1,475
----------- -----------
$ 459,166 $ 377,207
=========== ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policyholder liabilities $ 211,917 $ 179,877
Funds withheld on reinsurance ceded 139,614 130,097
Federal income taxes 6,096 2,566
Liabilities related to separate accounts 65,058 39,085
Other 5,760 3,278
----------- -----------
428,445 354,903
COMMITMENTS
STOCKHOLDER'S EQUITY
Common stock, $2,000 par value
Authorized, issued and outstanding --
1,000 shares 2,000 2,000
Additional paid-in capital 10,490 10,490
Net unrealized investment gains (losses) 4,068 (2,078)
Retained earnings 14,163 11,892
----------- -----------
30,721 22,304
----------- -----------
$ 459,166 $ 377,207
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 51
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 52
FIDELITY STANDARD LIFE INSURANCE COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993
---- ---- ----
(In thousands)
<S> <C> <C> <C>
REVENUES
Net investment income $ 25,597 $ 24,320 $ 23,093
Annuity product income 1,535 537 146
Net realized investment gains (losses) 46 (145) 353
Other income 643
---------
TOTAL REVENUES 27,178 24,712 24,235
BENEFITS AND EXPENSES
Interest credited to policyholders 9,503 9,193 10,243
Interest credited on reinsurance funds withheld 10,060 9,728 9,066
Benefits in excess of policyholder liabilities 605 1,077 477
Amortization of deferred policy acquisition costs 1,054 595 799
Operating expenses 3,000 2,124 1,802
-------- --------- ---------
TOTAL BENEFITS AND EXPENSES 24,222 22,717 22,387
-------- --------- ---------
2,956 1,995 1,848
Income tax expense
Current 90 26 606
Deferred 595 652 37
-------- --------- ---------
685 678 643
-------- --------- ---------
INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE 2,271 1,317 1,205
Cumulative effect of change in accounting for income taxes (236)
---------
NET INCOME $ 2,271 $ 1,317 $ 969
======== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 53
FIDELITY STANDARD LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
Net
Additional Unrealized Total
Common Paid-in Investment Retained Stockholder's
Stock Capital Gains (Losses) Earnings Equity
----- ------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 $ 2,000 $ 10,490 $ 9,606 $ 22,096
Net income 969 969
--------- ---------- -------- ----------
Balance at December 31, 1993 2,000 10,490 10,575 23,065
Net income 1,317 1,317
Cumulative effect of change
in accounting principle at
January 1 $ 3,404 3,404
Net unrealized investment
losses (5,482) (5,482)
--------- ---------- --------- -------- ----------
Balance at December 31, 1994 2,000 10,490 (2,078) 11,892 22,304
Net income 2,271 2,271
Net unrealized investment
gains 6,146 6,146
--------- ---------- --------- -------- ----------
Balance at December 31, 1995 $ 2,000 $ 10,490 $ 4,068 $ 14,163 $ 30,721
========= ========== ========= ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 54
FIDELITY STANDARD LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993
---- ---- ----
(In thousands)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 2,271 $ 1,317 $ 969
Adjustments to reconcile net income to net
cash provided by operations:
Cumulative effect of accounting change 236
Net realized investment losses (gains) (46) 1,483 (1,953)
Depreciation and amortization 43 43 43
Accretion of discount and
amortization of premium on
investments 310 (368) (718)
Changes in operating assets and liabilities:
Accrued investment income (257) (328) (113)
Deferred policy acquisition costs (2,148) (150) (425)
Other assets (962) 4,431 (886)
Funds withheld on reinsurance ceded 9,517 11,351 17,226
Other liabilities 2,836 167 (1,219)
---------- ----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 11,564 17,946 13,160
INVESTING ACTIVITIES
Fixed maturity securities -- available-for-sale
Purchases (102,642) (202,553)
Sales and maturities 72,858 179,039
Fixed maturity securities -- held-for-investment
Purchases (182,724)
Sales and maturities 145,620
Issuance of policy loans, net (1,505) (3,047) (680)
Net sale (purchase) of short-term investments 5,738 (5,987)
---------- ----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES (25,551) (32,548) (37,784)
FINANCING ACTIVITIES
Receipts credited to policyholder accounts 54,381 50,996 49,856
Amounts returned to policyholders (40,495) (37,004) (24,377)
---------- ----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 13,886 13,992 25,479
---------- ----------- -----------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (101) (610) 855
Cash and cash equivalents at beginning of year 1,360 1,970 1,115
---------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 55
<TABLE>
<S> <C> <C> <C>
CASH AND CASH
EQUIVALENTS AT END OF YEAR $ 1,259 $ 1,360 $ 1,970
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 56
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION -- Fidelity Standard Life Insurance Company (the Company)
is a wholly-owned subsidiary of Security First Life Insurance Company (parent)
which is a subsidiary of Security First Group, Inc. (SFG). SFG has been a
wholly-owned subsidiary of London Insurance Group, Inc. since May 1994. The
Company sells fixed and variable annuity contracts. The Company's financial
statements have been prepared in conformity with generally accepted accounting
principles (GAAP) which vary in some respects from statutory accounting
practices prescribed or permitted by regulatory authorities (statutory basis).
INVESTMENTS -- Investments are reported on the following bases:
Fixed Maturities:
Available-for-sale -- at fair value, which differs from the amortized
cost of such investments. Unrealized gains and losses on these
investments (net of related adjustments for deferred policy
acquisition costs and applicable deferred income taxes) are credited
or charged to stockholder's equity and, accordingly, have no effect on
net income.
Held-for-investment -- at cost, adjusted for amortization of premium
or accretion of discount and other-than-temporary declines in fair
value. The amortized cost of such investments differs from their fair
values. See Note 3 for reclassification in 1995 of
held-for-investment securities to available-for-sale.
For those fixed maturities which are mortgage-backed, the Company
recognizes income using a constant effective yield based on
anticipated prepayments and the estimated economic life of the
securities. When actual prepayments differ significantly from
anticipated prepayments, the effective yield is recalculated to
reflect actual payments to date and anticipated future payments. The
net investment in the security is adjusted to the amount that would
have existed had the new effective yield been applied since the
acquisition of the security. Such adjustment is included in net
investment income.
The Company does not maintain a trading portfolio, or at December 31,
1995, a held-for-investment portfolio.
Policy loans -- at unpaid balances.
Short-term investments -- at cost, which approximates fair value.
Realized gains and losses on disposal of investments are determined on a
specific identification basis.
8
<PAGE> 57
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
CASH EQUIVALENTS -- Cash equivalents consist of investments in money market
funds. The carrying amount of cash equivalents approximates fair value.
DEFERRED POLICY ACQUISITION COSTS -- As of January 1, 1995, the Company adopted
the account value deposit method of reporting for two-tier annuities (those
annuities that have a different interest credited rate for annuitization as
compared to withdrawal). The Company had previously adopted this method for
single-tier annuities. Under this method, commissions and other costs of
acquiring annuities that vary with and are primarily related to the acquisition
of such business are reported as deferred policy acquisition costs. Prior to
that date, certain commission costs for two-tier annuities were reported as a
component of policyholder liabilities. As a result of this change, deferred
policy acquisition costs and policyholder liabilities increased by $8,700,000
on January 1, 1995 with no effect on stockholder's equity. Additionally, the
presentation of certain revenue and expense items in the consolidated statement
of income for the year ended December 31, 1995 has been effected by this change
with no significant impact on net income.
Deferred policy acquisition costs are being amortized in proportion to the
present value of estimated future gross margins which includes the impact of
realized investment gains and losses.
POLICYHOLDER LIABILITIES -- As indicated previously, the Company adopted the
account value deposit method for reporting for two-tier annuities as of January
1, 1995. Under this method, the policyholder liabilities for two-tier
annuities are the lower tier account values. Prior to that date, policyholder
liabilities for the Company's two-tier fixed annuity products were calculated
using a prospective approach. Under the prospective approach, the policyholder
liability was equal to the present value of future benefits using a
"break-even" discount rate which resulted in no gain or loss when a policy was
issued. This method allowed profits to emerge in relation to the difference
between actual investment earnings and the break-even discount rate used in the
calculation of the policyholder liabilities. Policyholder liabilities for the
Company's single-tier fixed annuity products are the account values.
The fair value of policyholder liabilities is estimated assuming that all
policyholders surrender their policies. The carrying amounts and estimated
fair values are as follows (in thousands):
<TABLE>
<CAPTION>
Carrying Amount Estimated Fair Value
--------------- --------------------
<S> <C> <C>
December 31, 1995 $ 211,917 $ 205,535
December 31, 1994 179,877 182,139
</TABLE>
9
<PAGE> 58
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES -- The Company and its parent file consolidated federal income tax
returns with SFG. Income taxes are provided as if the companies filed
separately.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Such differences are related principally to the deferral of policy
acquisition costs, the valuation of fixed maturities and the provision for
policyholder liabilities. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
SEPARATE ACCOUNTS -- The assets held in separate accounts represent funds which
are separately administered by the Company pursuant to variable annuity
contracts. The liabilities related to separate accounts consist of
policyholder liabilities for variable annuities. The separate account assets
and liabilities are recorded at fair value. The Company receives a fee for
administrative services provided to the separate accounts. Investment risks
associated with fair value changes are borne by the contract holders.
ANNUITY REVENUES AND BENEFITS -- Annuity product income represents fees earned
from policyholders of annuity contracts, including separate account risk fees,
surrender charges, annuitization charges and administration fees. Benefits in
excess of policyholder liabilities consists of the difference between the
policyholder account values surrendered or annuitized during the period and the
related policyholder liability balances.
ESTIMATES -- Certain amounts reported in the accompanying financial statements
are based on management's best estimates and judgments. Actual results could
differ from those estimates.
NEW ACCOUNTING STANDARD -- In March 1995, the Financial Accounting Standards
Board (FASB) issued a new standard on accounting for long-lived assets which
are impaired or to be disposed of. The Company must adopt the standard by
1996. The standard requires that an impaired long-lived asset be measured
based on the fair value of the asset to be held and used or the fair value less
cost to sell the asset to be disposed of. When adopted, this standard is not
expected to have a material effect on the financial position or results of
operations of the Company.
RECLASSIFICATIONS -- Certain reclassifications of prior-year amounts have been
made to conform with current-year classifications.
10
<PAGE> 59
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2 -- STATUTORY CAPITAL AND RESTRICTIONS
The Company is required to file annual statements with various state regulatory
authorities on a statutory basis.
The Company's statutory-basis capital and surplus was $15,573,000 and
$14,894,000 at December 31, 1995 and 1994, respectively. The Company's
statutory-basis net income (loss) was $831,000, $409,000 and $(160,000), for
1995, 1994 and 1993, respectively.
The difference between statutory-basis net income and net income reported based
on GAAP relates primarily to different reserving methods used to calculate
policyholder liabilities, the recognition of deferred policy acquisition costs
and deferred income taxes.
The Company is incorporated and domiciled in Delaware. The payment of
dividends is subject to statutory limitations which are based on
statutory-basis net income and surplus levels. At December 31, 1995, the
maximum amount of dividends the Company could pay to its parent without prior
approval from state insurance regulatory authorities is $1,358,000.
NOTE 3 -- INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No. 115 (SFAS
No. 115), Accounting for Certain Investments in Debt and Equity Securities, as
of January 1, 1994. In accordance with SFAS No. 115, prior period financial
statements were not restated to reflect the change in accounting principle.
The cumulative effect as of January 1, 1994 of adopting SFAS No. 115 was an
increase in stockholder's equity of $3,404,000 -- net of related adjustments
for deferred policy acquisition costs of $15,473,000 which was recorded as an
adjustment to policyholder liabilities, and deferred income taxes of $1,754,000
- -- to reflect the net unrealized gains on securities previously carried at
amortized cost. There was no effect on net income as a result of the adoption
of SFAS No. 115.
In November 1995, the FASB issued a Special Report, A Guide to Implementation
of Statement 115 on Accounting for Certain Investments in Debt and Equity
Securities. In accordance with provisions in that Special Report, the Company
chose to reclassify securities from held-for-investment to available-for-sale.
At the date of transfer, the amortized cost of those securities was $22,560,000
and the unrealized gain on those securities was $239,000, which is included in
stockholder's equity.
11
<PAGE> 60
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3 -- INVESTMENTS (continued)
Unrealized investment gains (losses) reported in the accompanying financial
statements are as follows (in thousands):
<TABLE>
<CAPTION>
December 31
1995 1994
---- ----
<S> <C> <C>
Unrealized investment gains (losses) $ 18,676 $ (12,593)
Less: Adjustments for deferred policy acquisition costs 12,513 (9,445)
Deferred income taxes (benefit) 2,095 (1,070)
------------ ------------
Net unrealized investment gains (losses) $ 4,068 $ (2,078)
============ ============
</TABLE>
The adjustment for deferred policy acquisition costs of $9,445,000 in 1994 was
recorded as an adjustment to policyholder liabilities.
The amortized cost and fair value of fixed maturities are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- -------- -------
December 31, 1995
-----------------
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies
(including mortgage-backed
securities) $ 355,733 $ 19,108 $ (432) $ 374,409
========== ========== =========== ============
December 31, 1994
-----------------
Available-for-sale:
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies
(including mortgage-backed
securities) $ 299,502 $ 4,252 $ (16,846) $ 286,908
========== ========== =========== ============
Held-for-investment:
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies
(including mortgage-backed
securities) $ 26,718 $ 170 $ (2,122) $ 24,766
========== ========== =========== ============
</TABLE>
12
<PAGE> 61
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3 -- INVESTMENTS (continued)
All investment securities of the Company consist of securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
Accordingly, at December 31, 1995, the Company had no concentration of credit
risk.
The amortized cost and fair value of fixed maturities by contractual maturity
at December 31, 1995, are summarized below. Actual maturities will differ from
contractual maturities because certain borrowers have the right to call or
prepay obligations.
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
---- ------
(In thousands)
<S> <C> <C>
Available-for-sale:
Due in one year or less $ 9,257 $ 9,331
Due after one year through five years 28,908 30,505
Due after five years through ten years 61,646 65,992
Due after ten years 15,036 19,941
Mortgage-backed securities 240,886 248,640
------------- ------------
$ 355,733 $ 374,409
============= ============
</TABLE>
Proceeds from sales of fixed maturities are $74,751,000 in 1995, $139,094,000
in 1994 and $91,155,000 in 1993.
The Company reports realized gains (losses) on investment transactions net of
any adjustment to the amortization of deferred policy acquisition costs when
such amortization is accelerated or decelerated as a result of the realization
of gains or losses other than as originally anticipated on the sale of
investments associated with annuity products. Net realized investment gains
(losses) reported in the accompanying financial statements are as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Fixed maturities -- available-for-sale
Gross gains $ 335 $ 366
Gross losses (289) (1,011)
Fixed maturities -- held-for-investment
Gross gains $ 2,060
Gross losses (107)
Decelerated (accelerated) amortization
of deferred policy acquisition costs 500 (1,600)
---------- ---------- ----------
Net realized investment gains (losses) $ 46 $ (145) $ 353
========== ========== ==========
</TABLE>
12
<PAGE> 62
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3 -- INVESTMENTS (continued)
The fair values for fixed maturities are based on values obtained from
independent pricing services.
The carrying amount of policy loans approximates fair value because the
interest rates on these loans approximate market rates.
The Company places its temporary cash investments with high-credit quality
financial institutions and, by corporate policy, limits the amount of credit
exposure to any one financial institution.
At December 31, 1995, investment securities having an amortized cost of
$3,521,000 were on deposit with various states in accordance with state
insurance department requirements.
Investment income by major category of investment is summarized as follows (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Fixed maturities $25,787 $24,823 $23,612
Policy loans 246 189 133
Short-term investments 402 148
Cash and cash equivalents 22 150
-- ---
26,435 25,182 23,895
Investment expenses (838) (862) (802)
------- ------- -------
Net investment income $25,597 $24,320 $23,093
======= ======= =======
</TABLE>
The Company has no non-income producing investments or investments that exceed
10% of stockholder's equity as of December 31, 1995.
NOTE 4 -- COMMITMENTS
The Company has forward contracts with commitments to purchase mortgage-backed
securities with total par values of $5,100,000 at December 31, 1995. The
Company uses these contracts to hedge the interest rate risk on future
investments that match policyholder liabilities, primarily related to
guaranteed-rate products. Gains or losses realized on such contracts are
included in the carrying value of the underlying anticipated investment. The
Company is subject to the risk that the counterparties to such contracts would
fail to deliver the securities to the Company on settlement date, if the
Company were to hold the contract on that date. The Company's current cash
balances and expected future cash flows are sufficient to settle the
commitments under these forward contracts.
14
<PAGE> 63
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 5 -- INCOME TAXES
The Company files a consolidated federal income tax return with the Company's
parent and SFG and its subsidiaries. Taxes are provided for and paid to the
parent as if the Company filed separately.
The Company adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, effective January 1, 1993 and, as permitted under
the new rules, did not restate prior years' financial statements. The
cumulative effect of this change in accounting for income taxes as of January
1, 1993 of $236,000 is reported separately in the statement of income for the
year ended December 31, 1993.
Included in the Company's liability for federal income taxes are deferred taxes
of $6,287,000 and $2,498,000 at December 31, 1995 and 1994, respectively.
Significant components of these deferred taxes are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax liabilities:
Deferred policy acquisition costs $6,174 $1,970
Policyholder liabilities 1,896
Fixed maturities 2,026
------ ------
Total deferred tax liabilities 8,200 3,866
Deferred tax assets:
Fixed maturities 652
Policyholder liabilities 974
Other liabilities 939 688
Other 28
------ ------
Total deferred tax assets 1,913 1,368
------ ------
Net deferred tax liabilities $6,287 $2,498
====== ======
</TABLE>
Income taxes paid by (refunded to) the Company were $320,000, $(126,000) and
$796,000 in 1995, 1994 and 1993, respectively.
In 1995, the Company's income tax provision differs from the statutory rate of
34%. The following is a reconciliation of the federal income tax at statutory
rates with the income tax provision as shown in the statement of income for the
year ended December 31, 1995 (in thousands):
<TABLE>
<S> <C>
Federal income tax at 34% $990
Dividends received deduction (83)
True up of prior year taxes (222)
----
Provision for income tax expense $685
====
</TABLE>
15
<PAGE> 64
FIDELITY STANDARD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 6 -- RELATED PARTY TRANSACTIONS
Under a funds withheld quota share coinsurance agreement, the Company cedes a
portion of specific annuity contracts to its parent. At December 31, 1995 and
1994, policyholder liabilities are reported net of $139,613,000 and
$130,097,000, respectively, for this ceded reinsurance. However, these amounts
are reported as liabilities on the accompanying statements.
The Company has marketing and administrative agreements with SFG and formerly
with its subsidiary, Holden Financial Company, under which these companies
provide all of the Company's marketing and policyholder administration
services. Amounts incurred under these agreements were $7,358,000 for 1995,
$7,420,000 for 1994 and $7,215,000 for 1993.
The Company has a management agreement with SFG under which the latter provides
certain personnel, administrative services, and office space to the Company.
The amount incurred under this contract was $424,800 in 1995, 1994 and 1993.
The Company also has an investment advisory agreement with Security First
Investment Management Corporation, a subsidiary of SFG. Fees of $836,000,
$801,000 and $762,000 were paid pursuant to this agreement in 1995, 1994 and
1993, respectively.
16
<PAGE> 65
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements contained herein
(1) Fidelity Standard Life Separate Account
Part A - Condensed Financial Information
Part B - Statement of Assets and Liabilities,
Statement of Operations, Statement of
Changes in Net Assets, Statement of
Investments
(2) Fidelity Standard Life Insurance Company
Part B - Depositor's financial statements with notes
(b) Exhibits
(10) Consent of Independent Auditors - herewith
(13) Organizational Chart - herewith
(27) Financial Data Schedule - herewith
All previously filed Exhibits to Fidelity Standard Life Separate Account
registration statement thereto are specifically incorporated herein by
reference.
Item 25. Directors and Officers of the Depositor
The officers and directors of Fidelity Standard Life Insurance Company are
listed below. Their principal business address is 11365 West Olympic
Boulevard, Los Angeles, California 90064.
<TABLE>
<CAPTION>
Name Position and Offices with Depositor
---- -----------------------------------
<S> <C>
R. Brock Armstrong Chairman of the Board and Director
Gordon R. Cunningham Director
Frank E. Farella Director
Melvin M. Hawkrigg Director
General P.X. Kelley Director
Robert G. Mepham Director, President and Chief Executive Officer
Richard C. Pearson Director, Senior Vice President, General Counsel
and Secretary
Howard H. Kayton Executive Vice President and Chief Actuary
Robert D. Badun Senior Vice President, Investments
Jane F. Eagle Senior Vice President, Finance
Peter R. Jones Senior Vice President, Public Services
Cheryl M. MacGregor Senior Vice President, Administration
Alex H. Masson Senior Vice President, Information Systems
Michael R. McCoy Senior Vice President, Banking
</TABLE>
<PAGE> 66
<TABLE>
<S> <C>
Robert L. Pina Senior Vice President, Human Resources
George R. Bateman Vice President, Public Employees Services
James C. Turner Vice President, Taxation
George J. Olah Treasurer
</TABLE>
Item 26. Persons Controlled by or under Common Control with Depositor
of Registrant
The Registrant is a Separate Account of Fidelity Standard Life Insurance
Company ("depositor"). For a complete listing and diagram of all persons
directly or indirectly controlled by or under common control with the
depositor, see Exhibit 13.
Item 27. Number of Contractowners
As of December 31, 1995, there were 19,325 owners of the Contracts which are
the subject of this post-effective amendment.
Item 28. Indemnification
None
Item 29. Principal Underwriters
Security First Financial, Inc., the principal underwriter for Fidelity Standard
Life Separate Account, also acts as principal underwriter for Security First
Life Separate Account A.
The following are the directors and officers of Security First Financial, Inc.
Their principal business address is 11365 West Olympic Boulevard, Los Angeles,
California 90064.
<TABLE>
<CAPTION>
Name Position with Underwriter
---- -------------------------
<S> <C>
Robert Grant Mepham Director and Chairman of the Board
Richard Carl Pearson Director, President, General Counsel and
Secretary
Jane Frances Eagle Director, Senior Vice President, Finance and
Treasurer
Howard H. Kayton Senior Vice President and Chief Actuary
James Cyrus Turner Vice President, Taxation and Assistant Secretary
</TABLE>
<TABLE>
<CAPTION>
Net Underwriting Compensation on
Name of Principal Discount and Redemption or Brokerage
Underwriter Commissions* Annuitization Commission Compensation
----------- ------------ ------------- ---------- ------------
<S> <C> <C> <C> <C>
Security First None None None None
Financial, Inc.
</TABLE>
*Fee paid by Security First Life Insurance Company for serving as underwriter.
<PAGE> 67
Item 30. Location of Accounts and Records
Security First Financial, Inc., underwriter for the registrant, is located at
11365 West Olympic Boulevard, Los Angeles, California 90064. It maintains
those accounts and records required to be maintained by it pursuant to Section
31(a) of the Investment Company Act and the rules promulgated thereunder.
Fidelity Standard Life Insurance Company, the depositor for the registrant, is
located at 11365 West Olympic Boulevard, Los Angeles, California 90064. It
maintains those accounts and records required to be maintained by it pursuant
to Section 31(a) of the Investment Company Act and the rules promulgated
thereunder and as custodian for the Registrant.
Security First Group, Inc. is located at 11365 West Olympic Boulevard, Los
Angeles, California 90064. It performs substantially all of the recordkeeping
and administrative services in connection with the Registrant.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
<PAGE> 68
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485 (b) for effectiveness of this Registration Statement and has duly
caused this amended Registration Statement to be signed on its behalf in the
City of Los Angeles and State of California on this 26th day of April 1996.
FIDELITY STANDARD LIFE SEPARATE ACCOUNT
(Registrant)
By FIDELITY STANDARD LIFE INSURANCE COMPANY
(Sponsor)
By /s/ Robert G. Mepham
-----------------------------------------
Robert G. Mepham, President
As required by the Securities Act of 1933, this amended Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert G. Mepham
- -------------------------- President, Director April 26, 1996
Robert G. Mepham
/s/ Jane F. Eagle
- -------------------------- Principal Financial and April 26, 1996
Jane F. Eagle Accounting Officer
R. Brock Armstrong* Director April 26, 1996
- ---------------------------
R. Brock Armstrong
Gordon R. Cunningham* Director April 26, 1996
- ---------------------------
Gordon R. Cunningham
Melvin M. Hawkrigg* Director April 26, 1996
- --------------------------
Melvin M. Hawkrigg
Paul X. Kelley* Director April 26, 1996
- --------------------------
Paul X. Kelley
</TABLE>
<PAGE> 69
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Frank E. Farella* Director April 26, 1996
- --------------------------
Frank E. Farella
/s/ Richard C. Pearson Director April 26, 1996
- ---------------------------
Richard C. Pearson
/s/ Richard C. Pearson
- --------------------------- April 26, 1996
*(Richard C. Pearson as
Attorney-in-Fact for each
of the persons indicated)
</TABLE>
<PAGE> 1
EXHIBIT 10
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Independent Auditors" and to the use of our report
on Fidelity Standard Life Separate Account dated April 5, 1996 and our report
on Fidelity Standard Life Insurance Company dated February 9, 1996 in the
Registration Statement (Form N-4 Post-Effective Amendment No. 19 under the
Securities Act of 1933 and No. 18 under the Investment Company Act of 1940)
contained in the Statement of Additional Information.
/s/ ERNST & YOUNG LLP
----------------------
ERNST & YOUNG LLP
Los Angeles, California
April 26, 1996
<PAGE> 1
EXHIBIT 13
ORGANIZATIONAL CHART
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------
Trilon Financial Corporation
(Canada)
------------------------------
------------------------------
London Insurance Group, Inc.
(Canada)
------------------------------
---------------------------- ----------------------------
London Life Security First Group, Inc.
Insurance Company
(Canada) 95-3947585
---------------------------- ----------------------------
----------------- -------------- --------------- -------------- -------------- ------------------- -------------- -----------------
Security First Security First Security First Security First Security First
Insurance Agency, Group of Ohio, Security First Life Insurance Investment Insurance Agency, Security First Security First
(Nevada) Inc. Financial, Inc. Company Management Inc. Management Real Estate, Inc.
Corporation (Massachusetts) Corporation
88-0272002 34-1737227 95-2869421 DE 61050 95-2844896 95-3476150 95-4087137 95-4087153
----------------- -------------- --------------- 54-0696644 --------------- ------------------- ------------- -----------------
--------------
----------------- -------------------
Fidelity Standard Security First Life
Life Insurance Insurance
Company Company
of Arizona
DE 93246 AZ 89010
51-0258372 86-0676035
----------------- -------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> B
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 2,019,483
<INVESTMENTS-AT-VALUE> 2,029,992
<RECEIVABLES> 1,033
<ASSETS-OTHER> 7,080
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,038,105
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,390
<TOTAL-LIABILITIES> 10,390
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 246,163
<SHARES-COMMON-PRIOR> 237,043
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,509
<NET-ASSETS> 2,027,715
<DIVIDEND-INCOME> 115,394
<INTEREST-INCOME> 0
<OTHER-INCOME> 340
<EXPENSES-NET> 24,956
<NET-INVESTMENT-INCOME> 90,778
<REALIZED-GAINS-CURRENT> 3,827
<APPREC-INCREASE-CURRENT> 165,614
<NET-CHANGE-FROM-OPS> 260,219
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 39,673
<NUMBER-OF-SHARES-REDEEMED> 30,553
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 333,077
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 24,956
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 02
<NAME> G
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 19,846,793
<INVESTMENTS-AT-VALUE> 25,840,773
<RECEIVABLES> 12,713
<ASSETS-OTHER> 972
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 25,854,458
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,384
<TOTAL-LIABILITIES> 45,384
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2,137,371
<SHARES-COMMON-PRIOR> 1,979,176
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,993,980
<NET-ASSETS> 25,809,074
<DIVIDEND-INCOME> 749,557
<INTEREST-INCOME> 0
<OTHER-INCOME> 6,332
<EXPENSES-NET> 297,299
<NET-INVESTMENT-INCOME> 458,590
<REALIZED-GAINS-CURRENT> 365,372
<APPREC-INCREASE-CURRENT> 4,854,875
<NET-CHANGE-FROM-OPS> 5,678,837
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 352,021
<NUMBER-OF-SHARES-REDEEMED> 193,826
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 7,336,272
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 297,299
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 03
<NAME> FA
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 19,201,714
<INVESTMENTS-AT-VALUE> 21,094,325
<RECEIVABLES> 34,040
<ASSETS-OTHER> 1,688
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,130,053
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59,565
<TOTAL-LIABILITIES> 59,565
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 3,532,949
<SHARES-COMMON-PRIOR> 2,368,855
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,892,611
<NET-ASSETS> 21,070,488
<DIVIDEND-INCOME> 273,221
<INTEREST-INCOME> 0
<OTHER-INCOME> 3,937
<EXPENSES-NET> 228,695
<NET-INVESTMENT-INCOME> 48,463
<REALIZED-GAINS-CURRENT> 59,576
<APPREC-INCREASE-CURRENT> 2,415,124
<NET-CHANGE-FROM-OPS> 2,523,163
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,643,639
<NUMBER-OF-SHARES-REDEEMED> 479,545
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,828,077
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 228,695
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 04
<NAME> FG
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 11,310,713
<INVESTMENTS-AT-VALUE> 13,911,070
<RECEIVABLES> 26,421
<ASSETS-OTHER> 475
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,937,966
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,189
<TOTAL-LIABILITIES> 46,189
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,953,592
<SHARES-COMMON-PRIOR> 1,095,305
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 13,891,777
<DIVIDEND-INCOME> 34,241
<INTEREST-INCOME> 0
<OTHER-INCOME> 46,698
<EXPENSES-NET> 135,729
<NET-INVESTMENT-INCOME> (54,390)
<REALIZED-GAINS-CURRENT> 38,627
<APPREC-INCREASE-CURRENT> 2,560,415
<NET-CHANGE-FROM-OPS> 2,544,652
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 957,378
<NUMBER-OF-SHARES-REDEEMED> 99,091
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,066,012
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 135,329
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 05
<NAME> FI
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1,306,402
<INVESTMENTS-AT-VALUE> 1,540,571
<RECEIVABLES> 506
<ASSETS-OTHER> 821
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,541,898
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,483
<TOTAL-LIABILITIES> 2,483
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 217,621
<SHARES-COMMON-PRIOR> 78,856
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 234,169
<NET-ASSETS> 1,539,415
<DIVIDEND-INCOME> 8,546
<INTEREST-INCOME> 0
<OTHER-INCOME> 2,581
<EXPENSES-NET> 11,733
<NET-INVESTMENT-INCOME> (606)
<REALIZED-GAINS-CURRENT> 17,179
<APPREC-INCREASE-CURRENT> 231,370
<NET-CHANGE-FROM-OPS> 247,943
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 148,496
<NUMBER-OF-SHARES-REDEEMED> 9,731
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,127,397
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,733
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
</LEGEND>
<SERIES>
<NUMBER> 06
<NAME> FM
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 564,798
<INVESTMENTS-AT-VALUE> 564,798
<RECEIVABLES> 137
<ASSETS-OTHER> 2
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 564,937
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 783
<TOTAL-LIABILITIES> 783
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 104,205
<SHARES-COMMON-PRIOR> 87,571
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 564,154
<DIVIDEND-INCOME> 27,963
<INTEREST-INCOME> 0
<OTHER-INCOME> 748
<EXPENSES-NET> 6,643
<NET-INVESTMENT-INCOME> 22,068
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 22,068
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 43,306
<NUMBER-OF-SHARES-REDEEMED> 26,672
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 110,905
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,643
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
