UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission file number 33-37587
PRUCO LIFE INSURANCE COMPANY
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 22-1944557
- ------------------------------- ---------------------------------
(State or other jurisdiction, (IRS Employer Identification No.)
incorporation or organization)
213 Washington Street, Newark, New Jersey 07102
----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(973) 802-5740
----------------------------------------------------
(Registrant's Telephone Number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of May 17, 1999. Common stock, par value of $10 per share:
250,000 shares outstanding.
<PAGE>
PRUCO LIFE INSURANCE COMPANY
INDEX TO FINANCIAL STATEMENTS
<TABLE>
PAGE NO.
--------
<S> <C>
COVER PAGE 1
INDEX 2
PART I - FINANCIAL INFORMATION
ITEM 1. (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
STATEMENTS OF FINANCIAL POSITION
MARCH 31, 1999 AND DECEMBER 31, 1998 3
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 4
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
THREE MONTHS ENDED MARCH 31, 1999 AND THE YEAR ENDED DECEMBER 31, 1998 5
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 10
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURE PAGE 13
</TABLE>
2
<PAGE>
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
MARCH 31, 1999 AND DECEMBER 31, 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
------------ ------------
ASSETS
<S> <C> <C>
Fixed maturities
Available for sale, at fair value (amortized cost, 1999: $2,635,172; $ 2,638,138 $ 2,763,926
1998: $2,738,654)
Held to maturity, at amortized cost (fair value, 1999: $421,172;
1998: $421,845) 416,380 410,558
Equity securities - available for sale, at fair value (cost, 1999: $3,714; 3,316 2,847
1998: $2,951)
Mortgage loans on real estate 17,117 17,354
Policy loans 782,714 766,917
Short-term investments 295,639 240,727
Other long-term investments 1,046 1,047
------------ ------------
Total investments 4,154,350 4,203,376
Cash 108,198 89,679
Deferred policy acquisition costs 897,183 861,713
Accrued investment income 65,388 61,114
Other assets 68,275 65,145
Separate Account assets 12,239,534 11,531,754
------------ ------------
TOTAL ASSETS $ 17,532,928 $ 16,812,781
============ ============
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policyholders' account balances $ 2,723,256 $ 2,701,984
Future policy benefits and other policyholder liabilities 512,758 528,806
Cash collateral for loaned securities 128,635 73,336
Securities sold under agreement to repurchase 23,449 49,708
Income taxes payable 11,376 44,524
Net deferred income tax liability 155,058 148,834
Payable to affiliate 51,651 66,568
Other liabilities 67,983 55,038
Separate Account liabilities 12,195,943 11,490,751
------------ ------------
TOTAL LIABILITIES 15,870,109 15,159,549
------------ ------------
CONTINGENCIES (SEE NOTE 2)
STOCKHOLDER'S EQUITY
Common stock, $10 par value;
1,000,000 shares, authorized;
250,000 shares, issued and outstanding at
March 31, 1999 and December 31, 1998 2,500 2,500
Paid-in-capital 439,582 439,582
Retained earnings 1,222,401 1,202,833
Accumulated other comprehensive income
Net unrealized investment gains 32 9,902
Foreign currency translation adjustments (1,696) (1,585)
------------ ------------
Accumulated other comprehensive income (1,664) 8,317
------------ ------------
TOTAL STOCKHOLDER'S EQUITY 1,662,819 1,653,232
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $ 17,532,928 $ 16,812,781
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31,
1999 1998
--------- ---------
REVENUES
Premiums $ 13,708 $ 11,707
Policy charges and fee income 93,013 77,905
Net investment income 69,813 64,115
Realized investment (losses) gains, net (5,023) 5,439
Asset management fee income 11,209 9,410
Other income 1,279 813
--------- ---------
TOTAL REVENUES 183,999 169,389
--------- ---------
BENEFITS AND EXPENSES
Policyholders' benefits 52,910 40,911
Interest credited to policyholders' account balances 31,262 25,359
General, administrative and other expenses 68,980 50,921
--------- ---------
TOTAL BENEFITS AND EXPENSES 153,152 117,191
--------- ---------
Income before income taxes 30,847 52,198
--------- ---------
Income taxes 11,279 19,058
--------- ---------
NET INCOME $ 19,568 $ 33,140
--------- ---------
Other comprehensive income, net of tax:
Unrealized (losses) gains on securities, net
of reclassification adjustment (9,870) (4,784)
Foreign currency translation adjustments (111) (119)
--------- ---------
Other comprehensive income (9,981) (4,903)
--------- ---------
TOTAL COMPREHENSIVE INCOME $ 9,587 $ 28,237
========= =========
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND
THE YEAR ENDED DECEMBER 31, 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMMON PAID-IN- RETAINED COMPREHENSIVE STOCKHOLDER'S
STOCK CAPITAL EARNINGS INCOME EQUITY
---------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 $ 2,500 $ 439,582 $ 1,050,871 $ 12,564 $ 1,505,517
Net income -- -- 151,962 -- 151,962
Change in foreign currency
translation adjustments -- -- -- 2,980 2,980
Change in net unrealized
investment losses,
net of reclassification
adjustment -- -- -- (7,227) (7,227)
---------- ----------- ----------- ------------ -----------
BALANCE, DECEMBER 31, 1998 $ 2,500 $ 439,582 $ 1,202,833 $ 8,317 $ 1,653,232
Net income -- -- 19,568 -- 19,568
Change in foreign currency
translation adjustments -- -- -- (111) (111)
Change in net unrealized
investment losses,
net of reclassification
adjustment -- -- -- (9,870) (9,870)
---------- ----------- ----------- ------------ -----------
BALANCE, MARCH 31, 1999 $ 2,500 $ 439,582 $ 1,222,401 $ (1,664) $ 1,662,819
========== =========== =========== =========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 19,568 $ 33,140
Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
Policy charges and fee income (15,543) (13,365)
Interest credited to policyholders' account balances 31,262 25,359
Realized investment gains, net 5,023 (5,439)
Amortization and other non-cash items 12,611 1,982
Change in:
Future policy benefits and other policyholder liabilities (16,048) 6,881
Accrued investment income (4,274) 1,457
Separate Accounts (2,588) 3,093
Payable to affiliate (14,917) 8,822
Policy loans (15,797) (17,686)
Deferred policy acquisition costs (35,470) (32,252)
Income taxes payable (33,148) 16,295
Deferred income tax liability 6,224 (814)
Other, net 9,815 (2,205)
----------- -----------
CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES (53,282) 25,268
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale/maturity of:
Fixed maturities:
Available for sale 1,299,549 1,398,316
Held to maturity 11,843 20,878
Equity securities 1 27
Mortgage loans on real estate 237 206
Other long-term investments 34 --
Payments for the purchase of:
Fixed maturities:
Available for sale (1,200,898) (1,266,223)
Held to maturity (17,670) (3,855)
Equity securities (764) (146)
Other long-term investments (33) (376)
Cash collateral for loaned securities, net 55,299 (65,959)
Securities sold under agreement to repurchase, net (26,259) --
Short-term investments, net (54,927) (101,614)
----------- -----------
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES 66,412 (18,746)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholders' account balances:
Deposits 665,120 700,997
Withdrawals (659,731) (691,009)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES 5,389 9,988
----------- -----------
Net increase in Cash 18,519 16,510
Cash, beginning of year 89,679 71,358
----------- -----------
CASH, END OF PERIOD $ 108,198 $ 87,868
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
PRUCO LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Pruco Life
Insurance Company (the Company) have been prepared in accordance with the
requirements of Form 10-Q and generally accepted accounting principles (GAAP)
for interim financial information. These statements should be read in
conjunction with the consolidated financial statements and notes thereto for the
year ended December 31, 1998 included in the Company's Annual Report on Form
10-K for that year.
The accompanying consolidated financial statements have not been audited by
independent accountants in accordance with generally accepted auditing
standards, but in the opinion of management such financial statements include
all adjustments, consisting only of normal recurring accruals and elimination of
intercompany balances and transactions, necessary to summarize fairly the
Company's financial position and results of operations. The results of
operations for the three months ended March 31, 1999 may not be indicative of
the results that may be expected for the year ending December 31, 1999.
Certain amounts in the prior years have been reclassified to conform to current
year presentation.
2. CONTINGENCIES
Several actions have been brought against the Company on behalf of those persons
who purchased life insurance policies based on complaints about sales practices
engaged in by Prudential, the Company and agents appointed by Prudential and the
Company. Prudential has agreed to indemnify the Company for any and all losses
resulting from such litigation.
In the normal course of business, the Company is subject to various claims and
assessments. Management believes the settlement of these matters would not have
a material effect on the financial position or results of operations of the
Company.
3. RELATED PARTY TRANSACTIONS
Prudential and the Company have an agreement with respect to administrative
services for the Prudential Series Fund. The Company invests in the various
portfolios of the Series Fund through the Separate Accounts. Under this
agreement, Prudential pays compensation to the Company in the amount equal to a
portion of the gross investment advisory fees paid by the Prudential Series
Fund. This is recorded as "Asset management fee income" on the Statements of
Operations and Comprehensive Income.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
- --------------------------------------------------------------------------------
The following analysis should be read in conjunction with the notes to
Consolidated Financial Statements.
The Company markets individual life insurance, variable life insurance, variable
annuities, fixed annuities, and a group annuity program primarily through
Prudential's sales force in the United States and markets individual life
insurance through its branch office in Taiwan.
The Company markets its products in the life insurance and annuity sectors of
the insurance industry. These markets are subject to regulatory oversight with
particular emphasis placed on company solvency and sales practices. These
markets are also subject to increasing competitive pressure as the legal
barriers which have historically segregated the markets of the financial
services industry are being challenged through both legislative and judicial
processes. Regulatory changes have opened the insurance industry to competition
from other financial institutions, particularly banks and mutual funds that are
positioned to deliver competing investment products through large, stable
distribution channels.
The Company held $17.5 billion in assets at March 31, 1999 compared to $16.8
billion at December 31, 1998, of which $12.2 billion and $11.5 billion were held
in Separate Accounts in 1999 and 1998, respectively, under variable life
insurance policies and variable annuity contracts. The remaining assets
consisted primarily of general account investments and deferred policy
acquisition costs.
1. RESULTS OF OPERATIONS
Net income for the three months ended March 31, 1999 was $19.6 million, a
decrease of $13.5 million or 40.8% from $33.1 million earned in the three months
ended March 31, 1998.
Total insurance revenues, consisting of premiums and policy charges and fee
income, increased $17.1 million for the three months ended March 31, 1999 to
$106.7 million from $89.6 million for the three months ended March 31, 1998. The
Discovery Select Variable Annuity has been a successful product which continues
to generate significant sales. The Company also has a relatively new variable
universal life (VUL) insurance product, which provides an option to the customer
to select proprietary or non-proprietary mutual fund investments. Favorable
market conditions have provided a stimulus to investors to purchase mutual fund
shares and annuities, including the VUL and Discovery Select products. Increased
sales and appreciation in Separate Account asset values contributed to the
growth in assets under management and consequently on fees earned. For Discovery
Select, the growth in Separate Account assets under management surpassed March
31, 1998 balances by $2.6 billion for a total of $5.1 billion as of March 31,
1999. VUL assets under management also exhibited a dramatic increase from March
31, 1998, as these assets grew $308.0 million resulting in a March 31, 1999
balance of $352.0 million. In addition, the Company's Taiwan branch generated
continued growth in premiums for traditional insurance products. Sales and the
number of life planners grew by 20% and 31%, respectively.
The Company's consolidated net investment income increased $5.7 million for the
three months ended March 31, 1999 to $69.8 million from $64.1 million for the
three months ended March 31, 1998. The increase was a result of higher beginning
of year fixed maturity portfolio assets resulting from sales of a new
non-participating guaranteed investment contract product, Prudential Credit
Enhanced (PACE) during 1998. In addition, income carried on the General Account
for net gains on Separate Accounts have also contributed to the increase.
Consolidated net realized investment gains decreased $10.4 million for the three
months ended March 31, 1999 to a $5.0 million loss from a $5.4 million gain for
the three months ended March 31, 1998. This decrease was primarily due to net
sales of fixed maturities during a period of increasing interest rates. These
sales are a result of a strategic decision to reallocate money to short term
investments.
Asset management fee income increased $1.8 million for the three months ended
March 31, 1999 to $11.2 million from $9.4 million for the three months ended
March 31, 1998. The portfolio of mutual fund investments related to the
Company's Separate Account products are known as The Prudential Series Fund. The
Company receives an allocated portion of investment management fees that
Prudential earns from The Prudential Series Fund. The increased sales and
appreciation in the Separate Account products have generated an increase in the
asset management fee income.
8
<PAGE>
Policyholders' benefits increased $12.0 million for the three months ended March
31, 1999 to $52.9 million from $40.9 million for the three months ended March
31, 1998. This change is attributable to an increase in death claims reflecting
the overall aging of the business in force as well as an increase in disability
reserves and Taiwan new business reserves.
Interest credited to policyholders' account balances increased by $5.9 million
for the three months ended March 31, 1999 to $31.3 million from $25.4 million
for the three months ended March 31, 1998. Accounting for more than half of this
quarter's increase is the new PACE product. The remaining increase is
attributable to the rise in policyholder account balances, largely due to
Discovery Select and VUL, as well as increased interest credited pertaining to
policy loans.
General, administrative and other expenses increased $18.1 million for the three
months ended March 31, 1999 to $69.0 million compared to $50.9 million for the
three months ended March 31, 1998. The primary reason for the higher level of
expenses in 1999 is an increase in deferred policy acquisition costs
amortization. The level of deferred policy acquisition costs and, consequently,
the amortization of such costs, increased significantly over the past year
reflecting strong growth in sales of VUL and the Discovery Select Variable
Annuity. In addition, amortization of deferred policy acquisition costs in 1998
was reduced as a result of a refinement in estimated gross profit margins.
2. THE YEAR 2000 ISSUE
Prudential has addressed the Year 2000 issue on an enterprise-wide basis;
therefore, it is not possible to differentiate Pruco Life's Year 2000 issue from
that of the Prudential. Refer to management's discussion of the Year 2000 issue
in the December 31, 1998 Form 10-K for the steps taken by Prudential to mitigate
the Year 2000 risks.
Prudential believes that the Business Application, Infrastructure and Business
Partners components of the Year 2000 project are substantially on schedule.
While management expects that a small number of projects may not meet their
targeted completion dates, it is anticipated that these projects will be
completed by September 1999 so that any delays, if experienced, would not have a
significant impact on the timing of the project as a whole.
Prudential is enhancing existing business contingency plans to mitigate Year
2000 risk. These responses are being reviewed and are expected to be finalized
by June 1999 to ensure that they are workable under the special conditions of a
Year 2000 failure. The contingency plans are substantially on schedule and will
be implemented prior to year-end.
The Year 2000 costs allocated to Pruco Life to date are not material to its
operations and financial position. Moreover, the forecasted allocated Year 2000
costs are not expected to have a material impact on Pruco Life's ability to meet
its contractual commitments. The discussion of the Year 2000 issue herein, and
in particular the Company's plans to remediate this issue and estimated costs
thereof, are forward-looking in nature. See cautionary statement below relating
to forward-looking statements.
3. INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in Management's Discussion and Analysis may
be considered forward-looking statements. Words such as "expects," "believes,"
"anticipates," "intends," "plans," or variations of such words are generally
part of forward-looking statements. Forward-looking statements are made based
upon management's current expectations and beliefs concerning future
developments and their potential effects upon the Company. There can be no
assurance that future developments affecting the Company will be those
anticipated by management. There are certain important factors that could cause
actual results to differ materially from estimates or expectations reflected in
such forward-looking statements including without limitation, changes in general
economic conditions, including the performance of financial markets and interest
rates; market acceptance of new products and distribution channels; competitive,
regulatory or tax changes that affect the cost or demand for the Company's
products; and adverse litigation results. While the Company reassesses material
trends and uncertainties affecting its financial position and results of
operations, it does not intend to review or revise any particular
forward-looking statement referenced in this Management's Discussion and
Analysis in light of future events. The information referred to above should be
considered by readers when reviewing any forward-looking statements contained in
this Management's Discussion and Analysis.
9
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
------------------------------------------------------------
The Company's exposure to market risks and the way these risks are managed, are
summarized in Item 7a of the 1998 Form 10K.
10
<PAGE>
PART II
-------
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
------------------------------------------
(d) Information required by Item 701(f) of Regulation S-K:
The information below pertains to modified guaranteed annuity contracts
issued by the Company in two distinct variable annuity products,
Discovery Preferred Variable Annuity and Discovery Select Variable
Annuity. However, because the modified guaranteed annuity option of
each of these products is identical, the Company has aggregated the
registration of these securities.
(1) The original effective date of the Registration Statement of
the Company for the Discovery Preferred Variable Annuity on
Form S-1 was declared effective on November 27, 1995
(Registration No. 33-61143). The Discovery Select prospectus
was added through filings under Rule 424 of the Securities Act
of 1993. The registration statement continues to be effective
through annual amendments, the most recent filed April 16,
1999 and declared effective April 30, 1999.
(2) Offering commenced immediately upon effectiveness of the
registration statement.
(3) Not applicable.
(4) (i) The offering has not been terminated.
(ii) The managing underwriter of the offering is
Prudential Investment Management Services LLC.
(iii) Market-Value Adjustment Annuity Contracts (also known
as modified guaranteed annuity contracts).
(iv) Securities registered and sold for the account of the
Company:
<TABLE>
<S> <C>
Amount registered*: $ 500,000,000
Aggregate price of the offering amount registered: $ 500,000,000
Amount sold*: $ 205,783,000
Aggregate offering price of amount sold to date: $ 205,783,000
* Securities not issued in predetermined units
No securities have been registered for the account of
any selling security holder.
(v) Expenses associated with the issuance of the
securities:
Underwriting discounts and commissions** $ 7,202,000
Other expenses** $ 10,427,000
---------------
Total $ 17,629,000
** Amounts are estimated and are paid to affiliated parties.
(vi) Net offering proceeds: $ 188,154,000
</TABLE>
(vii) Not applicable.
(viii) Not applicable.
11
<PAGE>
PART II
-------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) EXHIBITS
---------
3(i)(a) The Articles of Incorporation of Pruco Life Insurance Company
(as amended through October 19, 1993) are incorporated by
reference to the initial Registration Statement on Form S-6 of
Pruco Life Variable Appreciable Account as filed July 2, 1996,
Registration No. 333-07451.
3(ii) By-Laws of Pruco Life Insurance Company (as amended through
May 6, 1997) are incorporated by reference to Form 10-Q as
filed by the Company on August 15, 1997.
4(a) Modified Guaranteed Annuity Contract is filed herewith
(previously filed as an exhibit to the Company's Registration
Statement on Form S-1 as filed November 2, 1990, Registration
No. 33-37587).
4(b) Market-Value Adjustment Annuity Contract is incorporated by
reference to the Company's registration statement on Form S-1,
Registration No. 333-18053, as filed November 17, 1995.
27 Financial Data Schedule is filed herewith in accordance with
EDGAR instructions.
(b) REPORTS ON FORM 8K
------------------
None
12
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf of the
undersigned, thereunto duly authorized.
PRUCO LIFE INSURANCE COMPANY
(Registrant)
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ ESTHER H. MILNES President and Director May 17, 1999
- --------------------------
Esther H. Milnes
/s/ DENNIS G. SULLIVAN Principal Financial Officer and May 17, 1999
- -------------------------- Chief Accounting Officer
Dennis G. Sullivan
13
================================================================================
[PRUDENTIAL LOGO] PRUCO LIFE INSURANCE COMPANY
Phoenix, Arizona 85014
A STOCK COMPANY SUBSIDIARY OF
The Prudential Insurance Company of America
ANNUITANT(S) JOHN DOE XX XXX XXX CONTRACT NUMBER
MARY DOE JUNE 4, 1990 CONTRACT DATE
ANNUITY DATE JUNE 4, 2020
AGENCY R-NK 1
This is an annuity contract. Subject to the provisions of this contract, and in
consideration of any purchase payment you make and we accept under the terms of
this contract (see List of Contract Limitations), we will make annuity payments
starting on the annuity date we show above.
Please read this contract with care. If there is ever a question about it, or if
there is a claim, just see one of our representatives or get in touch with one
of our offices.
BENEFITS AND VALUES UNDER THIS CONTRACT MAY BE ADJUSTED UPWARD OR DOWNWARD BY
THE APPLICATION OF A MARKET VALUE ADJUSTMENT FORMULA. SEE MARKET VALUE
ADJUSTMENT FOR A DESCRIPTION OF THE FORMULA, ITS APPLICATION, AND THE BENEFITS
AND VALUES AVAILABLE WITHOUT AN ADJUSTMENT.
RIGHT TO CANCEL CONTRACT.--Not later than ten days after you get this contract,
you may return it to us. All you have to do is take it or mail it to one of our
offices or to the representative who sold it to you. The contract will be
cancelled and we will give back any purchase payment promptly.
Signed for Pruco Life Insurance Company,
an Arizona Corporation.
/s/ DORATHY K. LIGHT /s/ ESTHER H. MILNES
-------------------- --------------------
SECRETARY PRESIDENT
RETIREMENT ANNUITY CONTRACT.--MONTHLY ANNUITY PAYMENTS STARTING ON ANNUITY DATE.
PAYMENT AS STATED UPON DEATH BEFORE ANNUITY DATE. ELIGIBLE FOR ANNUAL DIVIDENDS
AS STATED UNDER PARTICIPATION.
================================================================================
FAC--G--101--NJ
<PAGE>
GUIDE TO CONTENTS
PAGE
----
Contract Data........................................ 3
Basic Contract Data; Interest; List of Contract
Limitations; Adjustments to Purchase Payments;
Adjustments to the Contract Fund; Withdrawal
Charge
Endorsements......................................... 4
Definitions.......................................... 5
Contract Fund........................................ 5
Market Value Adjustment.......................... 6 & 7
Market Value Adjustment Formula
Withdrawals.......................................... 7
Cash Value; Condition for Withdrawal
Death of Annuitant................................... 8
Before the annuity date; After the annuity date
Beneficiary.......................................... 8
Payout Provisions.................................... 9
Choosing an Option; Options Described; Other
Methods of Payments; When No Option
Chosen; Conditions; Interest Rate; Withdrawal
Charges
Annuity Settlement Tables........................... 10
General Provisions............................. 11 & 12
Annual Report; The Contract; Contract
Modifications; Change of Annuity Date;
Removal of an Annuitant; Ownership and
Control; Currency; Misstatement of Age and/or
Sex; Incontestability; Proof of Life or Death;
Assignment; Changes; Requested Transactions;
Minimum Benefits
Dividends........................................... 12
Participation; Dividend Options
FAC--G--101--NJ Page 2
<PAGE>
CONTRACT DATA
Annuitant(s) JOHN DOE XX XXX XXX Contract Number
MARY DOE June 4, 1990 Contract Date
Annuity Date June 4, 2020
Agency R-NK I
First Annuitant
Name JOHN DOE
Sex and Issue Age M-35
Co-Annuitant:
Name MARY DOE
Sex and Issue Age F-32
Beneficiary:
CLASS 1 - Robert Doe
Son of Annuitants
CLASS 2 - Barbara Smith
Sister of Co-Annuitant
Purchase Payment Paid on the Contract Date: $10,000.00
INTEREST
o Guaranteed Interest Rate--This is the effective annual interest rate we
will credit for an interest rate period. Your interest rate for the initial
interest rate period is 8.3%. We will tell you the effective annual rate
for each subsequent interest rate period within one month after it begins.
o Interest Rate Period--This is the period for which we guarantee an interest
rate. Your initial interest rate period is 3 years, beginning on the
contract date. Each subsequent interest rate period is one year and begins
on the contract anniversary following the end of the immediately preceding
interest rate period.
o The minimum guaranteed interest rate we will declare for any interest rate
period will be at an effective annual rate of 3.0%.
FAC--G--101--NJ Page 3
<PAGE>
Contract No. XX XXX XXX
LIST OF CONTRACT LIMITATIONS
o The minimum contract fund after a withdrawal without our prior consent is
$10,000.
o The minimum withdrawal amount is $500. The withdrawal amount is the amount
you receive as a result of the transaction.
o Purchase payments subsequent to the first are not permitted.
ADJUSTMENTS TO PURCHASE PAYMENTS
We will deduct a charge for any applicable state and local premium taxes if
applicable.
The remainder of the purchase payment is the invested purchase payment amount.
ADJUSTMENTS TO THE CONTRACT FUND
On the contract date the contract fund is equal to the invested purchase payment
amount credited on that date. On any day after that date, to the previous days'
contract fund, we will:
o add any Interest
o reduce your contract fund by an amount necessary to produce any amount
withdrawn that day, considering the market value adjustment (see Market
Value Adjustment) and deduction of any withdrawal charge.
o deduct any amount charged against the contract fund for federal or state
income taxes.
o deduct an administration charge of up to $30 on each contract anniversary
and when a full withdrawal is made if the value of your contract fund is
less than $10,000 at either of those times.
FAC--G--101--NJ Page 3A
<PAGE>
WITHDRAWAL CHARGE
A withdrawal charge is a charge applied against the amount withdrawn when you
make a full or partial withdrawal. To determine this charge, we first reduce
your withdrawal by any amount not subject to a withdrawal charge. These amounts
are:
- - any charge-free withdrawal amount not previously withdrawn. The charge-free
withdrawal amount that is available in a given contract year is equal to
10% of your contract fund, after any market value adjustment, (see Market
Value Adjustment) as of the first withdrawal in a contract year. These
amounts may not be accumulated from contract year to contract year.
- - earnings not previously withdrawn. Earnings are the excess, if any, of the
contract fund after any market value adjustment, over the total purchase
payment amounts less (1) any prior purchase payments withdrawn, and (2) any
associated withdrawal charges.
- - any amount used to provide income under option 2, Life Income (See Payout
Provisions).
- - any payment withdrawn during the one-month period following the end of an
interest rate period.
The withdrawal charge is found by multiplying the balance of the withdrawal, if
any, by the appropriate charge rate found below. The charge rate depends on the
payment year during which a purchase payment is withdrawn. The withdrawal charge
rates are:
Payment Year of Withdrawal
1 2 3 4 5 6 7 8 and after
- ---------------------------------------------------------
7% 7% 7% 7% 6% 5% 4% 0% (INIT. GUAR. PERIOD OF 7-10 YRS)
7% 7% 6% 5% 4% 3% 1% 0% (6-YEAR INITIAL GUAR. PERIOD)
6% 6% 5% 4% 3% 1% 1% 0% (5-YEAR INITIAL GUAR. PERIOD)
5% 4% 3% 2% 1% 1% 1% 0% (4-YEAR INITIAL GUAR. PERIOD)
4% 3% 2% 1% 1% 1% 1% 0% (3-YEAR INITIAL GUAR. PERIOD)
3% 2% 1% 1% 1% 1% 1% 0% (2-YEAR INITIAL GUAR. PERIOD)
FAC--G--101--NJ Page 3B
<PAGE>
CONTRACT NO. XX XXX XXX
ENDORSEMENTS
(only we can endorse this contract.)
FAC--G--101--NJ Page 4
<PAGE>
- -----------------------=========================================================
DEFINITIONS
We define here some of the words and phrases used in
this contract. We explain others, not defined here, in
other parts of the text.
We, Our and Us.--The company issuing this contract.
You and Your.--The owner of the contract.
Annuitant(s).--The person or persons named on the first
page. If two persons are named, one of the two is named
on page 3 as First Annuitant, the other as Co-Annuitant.
In that case, the beneficiary provisions of the contract
will be based on the death of the last survivor of the
persons so named.
Payee.--A beneficiary who has a right to receive a
settlement under this contract.
Annuity Date.--The date the first annuity payment is
due. We show the annuity date on page 3.
Attained Age.--An Annuitant's attained age at any time
is his or her issue age plus the length of time since
the contract date. You will find the issue age(s) on
page 3.
Contract Date.--The date we receive the initial purchase
payment at our Home Office. We show the contract date on
page 3.
Contract Anniversary.--The same day and month as the
contract date in each later year.
Contract Year.--A. year which starts on the contract
date or on a contract anniversary.
Payment Date.--The payment date for a given purchase
payment is the date we receive that payment at our Home
Office.
Payment Anniversary.--The payment anniversary for a
given purchase payment is the same day and month as the
Payment Date in each later year.
Payment Year.--The payment year for a given purchase
payment is a year which starts on the Payment Date or on
a Payment Anniversary.
- -----------------------=========================================================
CONTRACT FUND
When you make your purchase payment, the invested
purchase payment amount becomes your contract fund.
Amounts are added to and subtracted from the contract
fund as described in the contract data pages. The value
of your contract fund, adjusted as described below, is
used to determine the amount you may withdraw, the
amount we pay upon the death of the sole or last
surviving Annuitant prior to the annuity date, and the
amount of any payment under an option (See Payout
Provisions).
FAC--G--101--NJ Page 5
<PAGE>
- -----------------------=========================================================
MARKET VALUE ADJUSTMENT
The market value adjustment is made when you request a
withdrawal at any time other than the one month period
that follows the end of a guaranteed interest rate
period.
In order to do a market value adjustment we work with
four different numbers.
They are:
1. The value of your contract fund.
2. The interest rate we guaranteed you.
3. The interest rate we would guarantee you today (if
you bought this same contract for the number of
whole years, plus one additional year, that you
now have left in your interest rate period).
4. The number of whole months (but not less than one
month) you now have left in your interest rate
period.
Here is how we do it.
First, we divide the number of months you now have left
in your 4 interest rate period by 12.
Second, we subtract the interest rate we would guarantee
today, on the same type of contract for the number of
years you have left, plus one additional year, from the
interest rate we guaranteed you. This answer could be
negative.
Now we multiply the results of the first two
calculations. Again, the result could be negative. If
the answer is less than -.40 we will use -.40. If the
answer is more than .40 we will use .40.
Next, we multiply the result of the last calculation by
the value of your contract fund.
Finally, we add the result to the contract fund. If the
amount we add is more than 1, your contract fund will go
up in value. If it is less than 1 (a negative number),
your contract fund will go down in value.
It is always true that if the interest rate we would
offer today is more than the guaranteed rate on your
contract, the value of your contract fund will go down.
And, if that newer rate is less then the guaranteed rate
on your contract, the value of your contract fund will
go up.
EXAMPLE: IF YOU ASK FOR A WITHDRAWAL, AND THIS IS NOT
DURING THE 30 DAYS FOLLOWING AN INTEREST RATE
PERIOD--AND
1. You have 30 months left in your interest rate
period, and,
2. Your guaranteed interest rate is 10% (.10),
3. Today we would guarantee an interest rate of 8%
(.08) on the same type of contract if you bought
it for 3 years (the number of whole years you have
left plus 1), then:
4. The value of your contract fund is $ 20,000,
We would divide 30 by 12 for a result of 2.5. Next, we
would subtract .08 from .10 for a result of .02. Next,
we would multiply 2.5 by .02 for a result of .05. Now we
multiply .05 by $20,000 for a result of $ 1,000.00. We
add $1,000 to $20,000 and your market value adjusted
contract fund is $21,000.
FAC--G--101--NJ Page 6
<PAGE>
EXAMPLE: IF YOU ASK FOR A WITHDRAWAL, AND THIS IS NOT
DURING THE 30 DAYS FOLLOWING AN INTEREST RATE
PERIOD--AND
1. You have 30 months left in your interest rate
period, and
2. Your guaranteed interest rate is 10%,
3. Today we would guarantee an interest rate of 12%
(.12) on the same type of contract if you bought
it for 3 years (the number of whole years you have
left plus 1), then:
4. The value of your contract fund is $20,000
We would divide 30 by 12 for a result of 2.5. Next, we
would subtract .12 from .10 for a result of -.02. Next,
we would 3 multiply 2.5 by -.02 for a result of -.05.
Now we multiply -.05 by $20,000 for a result of
-$1,000.00. We add -$1,000 to $20,000 and your market
value adjusted contract fund is $ 19,000.
MARKET VALUE Stated as a formula, the market value adjustment is
ADJUSTMENT FORMULA equal to: (M/12)x(R-C), where:
M is the number of whole months (but not less than one
month) left in the initial or subsequent guaranteed
interest period.
R is the contract's initial or renewal interest rate, in
decimals, and
C is the current initial interest rate, in decimals, we
offer on newly-issued contracts like this one for the
number of whole years, plus one, remaining in the
present initial or subsequent interest rate period as of
the date we receive your request for a withdrawal. If we
no longer offer these contracts, we will use a rate
equal to the most recent Moody's Corporate Bond Yield
Average--Monthly Average Corporates, for that duration,
as published by Moody's Investment Services, Inc. or any
successor to that service. If that average is no longer
published, we will use a substantially similar average,
established by the insurance regulator where this
contract is delivered.
- -----------------------=========================================================
WITHDRAWALS
Before the annuity date, you may be able to make full or
partial withdrawals of your cash value.
The withdrawal amount is any amount you receive as a
result of this transaction.
CASH VALUE The cash value at any time is the contract fund after
any market value adjustment, minus any withdrawal
charge. The withdrawal charge rate(s), how they are
applied, and a description of any withdrawal amounts
excluded from these charges are described in the
contract data pages. Any paid-up annuity, cash surrender
value or death benefits are not less than the minimum
required by statute. Where required, we have given the
insurance regulator a detailed statement of how we
compute values and benefits.
We reserve the right to postpone paying any withdrawal
for up to six months. If we do so for more than 10 days,
we will pay interest at the rate of at least 3% a year.
CONDITION FOR You may make a full withdrawal at any time. You may make
WITHDRAWAL a partial withdrawal if it is at least equal to the
minimum withdrawal amount and the remaining contract
fund is at least equal to the minimum contract fund
amount after withdrawal. Both amounts are shown under
the List of Contract Limitations.
FAC--G--101--NJ Page 7
<PAGE>
- -----------------------=========================================================
DEATH OF ANNUITANT
BEFORE THE ANNUITY If a sole or last surviving Annuitant dies before the
DATE annuity date, we will pay the beneficiary the greater of
(a) the contract fund, after any market value
adjustment, and (b) minimum proceeds, both determined as
of the date we receive due proof of death. The minimum
proceeds is the total invested purchase payment amount,
minus any withdrawals and withdrawal charges,
accumulated at the minimum guaranteed interest rate(s)
shown in the contract data pages.
If two Annuitants are named in the contract and both
have died and there is not sufficient evidence that they
have died otherwise than simultaneously, the proceeds of
the contract will be distributed as if the First
Annuitant had survived the Co-Annuitant.
AFTER THE ANNUITY If the Annuitant dies on or after the annuity date, the
DATE settlement then in effect will govern whether and to
whom we will make any payment(s).
- -----------------------=========================================================
BENEFICIARY
You may designate or change a beneficiary. Your request
must be in writing and in a form which meets our needs.
It will take effect only when we file it at our Home
Office; this will be after you send the contract to us
to be endorsed, if we ask you to do so. Then any
previous beneficiary's interest will end as of the date
of the request. It will end then even if no Annuitant is
living when we file the request. Unless otherwise
stated, we will make payment to the beneficiary only if
the last surviving or sole Annuitant dies before the
annuity date. Any beneficiary's interest is subject to
the rights of any assignee we know of.
When a beneficiary is designated, any relationship shown
is to the Annuitant (First Annuitant if two Annuitants
are named on page 3) unless otherwise stated.
To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the
class with next priority is called class 2, and so on.
When we use numbered classes, these statements apply to
beneficiaries unless the form states otherwise: (In
these provisions and in the Example, the term
"Annuitant" refers, where two Annuitants are named, to
the last surviving Annuitant.)
1. One who survives the Annuitant will have the right
to be paid only if no one in a prior class
survives the Annuitant.
2. One who has the right to be paid will be the only
one paid if no one else in the same class survives
the Annuitant.
3. Two or more in the same class who have the right
to be paid will be paid in equal shares.
4. If none survives the Annuitant, we will pay in one
sum to the Annuitant's estate.
EXAMPLE: SUPPOSE THE CLASS 1 BENEFICIARY IS JANE AND THE
CLASS 2 BENEFICIARIES ARE PAUL AND JOHN. IF THE
ANNUITANT DIES BEFORE THE ANNUITY DATE, WE OWE JANE THE
PROCEEDS IF SHE IS LIVING AT THE ANNUITANT'S DEATH. WE
OWE PAUL AND JOHN THE PROCEEDS IF THEY ARE LIVING THEN
BUT JANE IS NOT. BUT IF ONLY ONE OF THEM IS LIVING, WE
OWE HIM THE PROCEEDS. IF NONE OF THEM IS LIVING, WE OWE
THE ANNUITANT'S ESTATE.
Before we make a payment, we have the right to decide
what proof we need of the identity, age or any other
facts about any persons designated as beneficiaries. If
beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make
the payment(s) again.
FAC--G--101--NJ Page 8
<PAGE>
- -----------------------=========================================================
PAYOUT PROVISIONS
CHOOSING AN OPTION You may use the contract fund after any market value
adjustment, as of the annuity date to provide an income
to the Annuitant(s) under one or more of the options we
describe below. But, for any annuity option, we will
first deduct from this amount any charge for state and
local premium taxes, and any withdrawal charges
described below. We offer the same annuity options to
the payee that we offer to an Annuitant. And we
determine monthly payments for the payee in the same way
we do for an Annuitant.
Your choice of an option will take effect on the annuity
date but only if: (1) the person on whose life the
annuity is to be based is living on that date; (2) the
first payment under the option will be at least $50; and
(3) you do not void the choice by making a later choice
before the annuity date.
If two Annuitants are named in the Contract and both are
living, settlement will be made on the life of the First
Annuitant, as named on page 3.
OPTIONS DESCRIBED When we use the word Annuitant in the following
paragraphs we mean the Annuitant for whom the annuity
described was chosen and who is to receive settlement
under the annuity.
For an Annuitant, the first payment under these options
is due on the annuity date.
For a payee, unless a later date is requested, the first
payment will be due on the first day of the earliest
calendar month on or after the day the Home Office has
received the request for the settlement and due proof of
the Annuitant's death and such claim forms and other
evidence as may be satisfactory to us.
Here are the options we offer. We may also consent to
other arrangements.
OPTION 1 We will make equal payments for up to 25 years. The
(INSTALLMENTS FOR A Option 1 Table shows the minimum amounts we will pay.
FIXED PERIOD)
OPTION 2 (LIFE INCOME) We will make monthly payments for as long as the person
on whose life the settlement is based lives, with
payments certain for 120 months. The Option 2 Table
shows the minimum amounts we will pay.
OPTION 3 We will hold an amount at interest. We will pay the
(INTEREST PAYMENT) interest annually, semi-annually, quarterly, or monthly.
OTHER METHODS OF We may offer other methods of payment. Contact one of
PAYMENT our representatives or get in touch with one of our
offices for information.
WHEN NO OPTION CHOSEN If no choice takes effect on the annuity date,
settlement under the Interest Payment Option will become
effective.
CONDITIONS Your right to choose an option is subject to all these
conditions: (1) You must ask for the option in writing
and in a form which meets our needs. (2) You must send
the contract to us to be endorsed. (3) If we require it,
you must give us proof of the date of birth of the
person on whose life an annuity payment is based. (4) We
must have your request, the contract and any required
proof(s) of the date(s) of birth before the annuity
date.
INTEREST RATE Payments under any of the options will be calculated
assuming an effective interest rate of at least 3 1/2% a
year. We may include more interest.
WITHDRAWAL CHARGES Before we make payments under options 1 or 3, we will
reduce the contract fund after any market value
adjustment, by a withdrawal charge in the same way as we
would if you had made a withdrawal (see Withdrawals). If
you choose any other method of payment not described in
this contract, we will tell you if it is subject to a
withdrawal charge.
FAC--G--101--NJ Page 9
<PAGE>
AMOUNTS PAYABLE If the annuity date is a contract anniversary, for
Options 1 and 2 we will use the table below to compute
the amount of the annuity payment.
If the annuity date is not a contract anniversary, we
will adjust the amounts accordingly.
When we computed the amounts we show in the Option 2
table, we adjusted the 1983 Table 2 to an age last
birthday basis, less three years; we used an interest
rate of 3 1/2% a year. If the age is over 80, the rate
for age 80 will be used.
<TABLE>
<CAPTION>
OPTION 1 TABLE
- ------------------------------
MINIMUM AMOUNT OF
MONTHLY PAYMENT FOR OPTION 2 TABLE
EACH $1,000, THE FIRST Amount of Annuity Payment for
PAYABLE IMMEDIATELY each $1,000 applied on the Annuity Date
- ------------------------------- ------------------------------------------------------------
Number Monthly
of Years Payment AGE MALE FEMALE AGE MALE FEMALE
- ------------------------------- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
41 $3.88 $3.67 61 $5.25 $4.79
1 $84.65 42 3.92 3.70 62 5.36 4.89
2 43.05 43 3.97 3.74 63 5.48 4.98
3 29.19 44 4.01 3.78 64 5.60 5.09
4 22.27 45 4.06 3.82 65 5.73 5.20
5 18.12 46 4.12 3.86 66 5.87 5.31
47 4.17 3.90 67 6.01 5.43
6 15.35 48 4.23 3.94 68 6.15 5.56
7 13.38 49 4.28 3.99 69 6.30 5.70
8 11.90 50 4.35 4.04 70 6.46 5.84
9 10.75 51 4.41 4.09 71 6.62 5.99
10 9.83 52 4.48 4.15 72 6.79 6.15
53 4.55 4.21 73 6.96 6.31
11 9.09 54 4.62 4.27 74 7.13 6.49
12 8.46 55 4.70 4.33 75 7.30 6.67
13 7.94 56 4.78 4.40 76 7.48 6.85
14 7.49 57 4.68 4.47 77 7.66 7.04
15 7.10 58 4.95 4.54 78 7.83 7.24
59 5.05 4.62 79 8.00 7.44
16 6.76 60 5.15 4.71 80 8.17 7.64
17 6.47 ------------------------------------------------------------
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
- ------------------------------
Multiply the monthly amount
by 2.989 for quarterly,
5.952 for semi-annual or
11.804 for annual.
- ------------------------------
</TABLE>
FAC--G--101--NJ Page 10
<PAGE>
- -----------------------=========================================================
GENERAL PROVISIONS
ANNUAL REPORT Starting on the first contract anniversary we will send
you a report each year until the annuity date. It will
show the contract fund, the cash value, interest and any
other credits applied during the year; and charges and
withdrawals during the year. The report will include any
other data that may be currently required where this
contract is delivered. You may ask for a report like
this at any time. But, except for the report we send you
once a year, we have the right to charge a fee for each
report.
THE CONTRACT This document forms the whole contract.
CONTRACT MODIFICATIONS Only one of our officers at the rank of
vice president or above may agree to modify this
contract, and then only in writing.
CHANGE OF ANNUITY You may be able to change your annuity date. But
any change may be DATE made only if we consent, and will
be subject to conditions that are then determined.
REMOVAL OF AN If a First Annuitant and a Co-Annuitant are named, we
ANNUITANT will remove one from the contract upon: (1) receipt of
your written request to remove that Annuitant; or (2)
receipt of due proof that the Annuitant has died.
OWNERSHIP AND CONTROL Unless we endorse this contract to say otherwise: (1 )
the owner of the contract is the Annuitant (the First
Annuitant, if two are named); (2) while any Annuitant is
living the owner alone is entitled to (a) any contract
benefit and value, and (b) the exercise of any right and
privilege granted by the contract or by us; and (3) if
two Annuitants are named and the First Annuitant, dies
while the Co-Annuitant is living, the Co-Annuitant will
become the Owner.
CURRENCY Any money we pay, or which is paid to us, must be in
United States currency. Any amount we owe will be
payable at our Home Office.
MISSTATEMENT OF AGE If any Annuitant's stated sex or date of birth or both
AND/OR SEX are not correct, we will change each benefit and the
amount of each annuity payment to that which the total
purchase payment amounts would have bought for the
correct sex and/or date of birth. Also, we will adjust
the amount of any payments we have already made. Here is
how we will do it: (1) We will deduct any overpayments,
with interest at 5% a year, from any payment(s) due then
or later. (2) We will add any underpayments, with
interest at 5% a year, to the next payment we make after
we receive proof of the correct sex and date of birth.
INCONTESTABILITY We will not contest this contract unless the purchase
payment due on the contract date is not paid.
FAC--G--101--NJ Page 11
<PAGE>
PROOF OF LIFE OR DEATH Before we make a payment, we have the right to require
proof of the life or death of any person whose life or
death determines whether or to whom we must make the
payment.
ASSIGNMENT [CANCELED]
CHANGES We reserve the right, upon 90 days notice to you to:
1. change any or all terms and provisions of the
Annuity Settlement Table, but only with respect to
any portion of an annuity settlement deriving from
purchase payments, if any, made on or after the
effective date of the change and earnings on those
purchase payments; and
2. make any changes required by law.
REQUESTED TRANSACTIONS On any requested transaction, we have the right to
require that your request be in writing. We may also ask
for your contract to endorse it.
- -----------------------=========================================================
DIVIDENDS
PARTICIPATION This contract is eligible to participate in our
divisible surplus. We do not expect that any dividends
will be payable on or before the annuity date. While any
annuity settlement is in effect, the contract will share
in our surplus to the extent and in the way we decide.
DIVIDEND OPTIONS If you ask us in writing at our Home Office and
in a form which meets our needs, you may choose one of
these uses for any dividend we declare:
1. we will pay it to you in cash;
2. we will credit it to the contract fund.
If you have not made a choice by 31 days after we credit
a dividend, we will apply it as we state in 2 above.
FAC--G--101--NJ Page 12
<PAGE>
[Intentionally blank]
FAC--G--101--NJ Page 13
<PAGE>
RETIREMENT ANNUITY CONTRACT.--MONTHLY ANNUITY PAYMENTS STARTING ON ANNUITY DATE.
PAYMENT AS STATED UPON DEATH BEFORE ANNUITY DATE. ELIGIBLE FOR ANNUAL DIVIDENDS
AS STATED UNDER PARTICIPATION.
FAC--G--101--NJ Page 14
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
FINANCIAL DATA SCHEDULE
Article 7 of Regulation S-X
Pruco Life Insurance Company
</LEGEND>
<CIK> 0000777917
<NAME> PRUCO LIFE INSURANCE COMPANY
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 2,638,138
<DEBT-CARRYING-VALUE> 416,380
<DEBT-MARKET-VALUE> 421,172
<EQUITIES> 3,316
<MORTGAGE> 17,117
<REAL-ESTATE> 0
<TOTAL-INVEST> 4,154,350
<CASH> 108,198
<RECOVER-REINSURE> 23,700
<DEFERRED-ACQUISITION> 897,183
<TOTAL-ASSETS> 17,532,928
<POLICY-LOSSES> 2,723,256
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 512,758
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,500
<OTHER-SE> 1,660,319
<TOTAL-LIABILITY-AND-EQUITY> 17,532,928
13,708
<INVESTMENT-INCOME> 69,813
<INVESTMENT-GAINS> (5,023)
<OTHER-INCOME> 1,279
<BENEFITS> 84,172
<UNDERWRITING-AMORTIZATION> 25,240
<UNDERWRITING-OTHER> 43,740
<INCOME-PRETAX> 30,847
<INCOME-TAX> 11,279
<INCOME-CONTINUING> 19,568
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,568
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
