SUPPLEMENT DATED JANUARY 1, 1997
TO
PROSPECTUS DATED MAY 1, 1994
WRL FREEDOM SP PLUS(R)
Effective January 1, 1997, WRL Investment Management, Inc. ("WRL
Management"), a Florida corporation, will replace Western Reserve Life Assurance
Co. of Ohio ("Western Reserve") as the investment adviser for the WRL Series
Fund, Inc. (the "Fund"). WRL Management is a wholly-owned subsidiary of Western
Reserve. Throughout the Prospectus, wherever Western Reserve is referred to as
the Fund's investment adviser, Western Reserve will be replaced with WRL
Management.
THE FOLLOWING INFORMATION SUPPLEMENTS INFORMATION PROVIDED ON PAGES 22, TENTH
PARAGRAPH OF THE PROSPECTUS UNDER THE HEADING "WESTERN RESERVE, THE SERIES
ACCOUNT, AND THE FUND - WRL SERIES FUND, INC.":
WRL Management serves as investment adviser to each Portfolio of the Fund
and manages their assets in accordance with policies, programs and guidelines
established by the Board of Directors of the Fund.
THE FOLLOWING INFORMATION IS MODIFIED ON PAGE 33, UNDER THE HEADING "CHARGES AND
DEDUCTIONS - CHARGES AGAINST THE SERIES ACCOUNT" AS FOLLOWS:
Addition of new sub-heading after the fourth paragraph.
EXPENSES OF THE FUND
Deletion of sub-heading "Investment Advisory Fee."
ADDITION OF A NEW PARAGRAPH BEFORE THE HEADING "GROUP OR SPONSORED ARRANGEMENTS"
AS FOLLOWS:
Effective January 1, 1997, the Fund has adopted a Plan of Distribution
pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan") and pursuant to
the Plan, has entered into a Distribution Agreement with InterSecurities, Inc.
("ISI"), principal underwriter for the Fund.
Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for expenses
incurred in connection with the distribution of a Portfolio's shares, amounts
equal to actual expenses associated with distributing a Portfolio's shares, up
to a maximum rate of 0.15% (fifteen one-hundredths of one percent) on an
annualized basis of the average daily net assets. This fee is measured and
accrued daily and paid monthly. ISI has determined that it will not seek payment
by the Fund of distribution expenses with respect to any Portfolio during the
fiscal year ending December 31, 1997. Prior to ISI's seeking reimbursement,
Policyowners will be notified in advance.
THE ATTACHED FINANCIALS SUPPLEMENT THE FINANCIAL STATEMENTS INCLUDED IN THE MAY
1, 1996 PROSPECTUS BOOKLET.
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Money Market Portfolio
(14,772,612.310 shares;
cost $ 14,772,612) ................................... $14,772,612
Accrued transfers from (to) depositor - net ............... 38,350
-----------
Total assets ......................................... 14,810,962
-----------
LIABILITIES: ................................................ 0
-----------
Total net assets ..................................... $14,810,962
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Money Market sub-account
(968,329.525481 units;
$15.295374 unit value) ............................... $14,810,962
-----------
Total equity ......................................... $14,810,962
===========
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ...................................... $426,457
Capital gain distributions ........................... 0
--------
426,457
EXPENSES:
Mortality and expense risk charges ................... 76,494
--------
Net investment income (loss) ....................... 349,963
--------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................ 0
Change in unrealized appreciation
(depreciation) ..................................... 0
--------
Net gain (loss) on investments ..................... 0
--------
Net increase (decrease) in equity
accounts resulting from operations ............. $349,963
========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)............................... $ 349,963 $ 397,410
Net gain (loss) on investments............................. 0 0
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations............................... 349,963 397,410
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................ 6,152,998 3,139,280
------------- ------------
Less cost of units redeemed:
Administrative charges.................................. 1,753,507 1,356,484
Policy loans............................................ 179,641 219,767
Surrender benefits...................................... 499,065 899,893
Death benefits.......................................... 18,410 7,670
------------- ------------
2,450,623 2,483,814
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions............................. 3,702,375 655,466
------------- ------------
Net increase (decrease) in equity accounts.............. 4,052,338 1,052,876
EQUITY ACCOUNTS:
7Beginning of period....................................... 10,758,624 9,705,748
------------- ------------
End of period.............................................. $ 14,810,962 $ 10,758,624
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
1
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- -----------------------------------------------
1996 1995 1994 1993 1992 1991
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 14.83 $ 14.19 $ 13.84 $ 13.63 $ 13.33 $ 12.78
Income from operations:
Net investment income (loss)........ .47 .64 .35 .21 .30 .55
Net realized and unrealized
gain (loss) on investments........ .00 .00 .00 .00 .00 .00
------- ------- ------- ------- ------- -------
Total income (loss) from operations .47 .64 .35 .21 .30 .55
------- ------- ------- ------- ------- -------
Accumulation unit value, end of period... $ 15.30 $ 14.83 $ 14.19 $ 13.84 $ 13.63 $ 13.33
======= ======= ======= ======= ======= =======
Total return............................. 3.13% 4.49% 2.58% 1.52% 2.24% 4.34%
Ratios and supplemental data:
Net assets at end of period (in thousands) $14,811 $10,759 $ 9,706 $ 4,985 $ 4,619 $ 4,042
Ratio of net investment income (loss) to
average net assets**................ 4.09% 4.37% 2.66% 1.51% 2.12% 4.28%
</TABLE>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
2
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Bond Portfolio
(1,029,776.221 shares;
cost $11,356,557) .................................. $ 11,044,802
Accrued transfers from (to) depositor - net ............. (8,481)
------------
Total assets ....................................... 11,036,321
------------
LIABILITIES: .............................................. 0
------------
Total net assets ................................... $ 11,036,321
============
EQUITY ACCOUNTS:
Policyowners' equity:
Bond sub-account
(580,868.722716 units;
$18.999682 unit value) ............................. $ 11,036,321
------------
Total equity ....................................... $ 11,036,321
============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
------------------
Dividend income ...................................... $ 288,871
Capital gain distributions ........................... 0
---------
288,871
EXPENSES:
Mortality and expense risk charges ................... 69,846
---------
Net investment income (loss) ....................... 219,025
---------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................ (114,753)
Unrealized appreciation (depreciation) ............... (464,520)
---------
Net gain (loss) on investments ..................... (579,273)
---------
Net increase (decrease) in net assets
resulting from operations ...................... $(360,248)
=========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
------------------ -----------------
<S> <C> <C>
Net investment income (loss)............................ $ 219,025 $ 459,977
Net gain (loss) on investments.......................... (579,273) 1,080,157
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations............................ (360,248) 1,540,134
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed):.................... 2,715,612 3,749,029
------------- ------------
Less cost of units redeemed:
Administrative charges............................... 953,693 916,494
Policy loans......................................... 148,082 197,829
Surrender benefits................................... 260,483 357,384
Death benefits....................................... 22,917 10,202
------------- ------------
1,385,175 1,481,909
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions.......................... 1,330,437 2,267,120
------------- ------------
Net increase (decrease) in equity accounts........... 970,189 3,807,254
EQUITY ACCOUNTS:
Beginning of period..................................... 10,066,132 6,258,878
------------- ------------
End of period........................................... $ 11,036,321 $ 10,066,132
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
3
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
SEPT. 30 DECEMBER 31
-------- -----------------------------------------------
1996 1995 1994 1993 1992 1991
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 19.67 $ 16.14 $ 17.50 $ 15.57 $ 14.68 $ 12.48
Income from operations:
Net investment income (loss)........ .40 1.05 .89 2.11 1.00 .48
Net realized and unrealized
gain (loss) on investments........ (1.07) 2.48 (2.25) (.18) (.11) 1.72
------- ------- ------- ------- ------- -------
Total income (loss) from operations (.67) 3.53 (1.36) 1.93 .89 2.20
------- ------- ------- ------- ------- -------
Accumulation unit value, end of period... $ 19.00 $ 19.67 $ 16.14 $ 17.50 $ 15.57 $ 14.68
======= ======= ======= ======= ======= =======
Total return............................. (3.43)% 21.89% (7.77)% 12.40% 6.08% 17.63%
Ratios and supplemental data:
Net assets at end of period (in thousands) $11,036 $10,066 $ 6,259 $ 6,985 $ 4,558 $ 3,055
Ratio of net investment income (loss) to
average net assets**................ 2.86% 5.80% 5.57% 12.92% 6.69% 3.59%
- ----------------
<FN>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
4
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Growth Portfolio
(9,051,069.555 shares;
cost $ 233,268,655) ............................... $ 333,851,051
Accrued transfers from (to) depositor - net ............ (277,798)
-------------
Total assets ...................................... 333,573,253
-------------
LIABILITIES: ............................................. 0
-------------
Total net assets .................................. $ 333,573,253
=============
EQUITY ACCOUNTS:
Policyowners' equity:
Growth sub-account
(6,908,195.647892 units;
$ 48.286596 unit value)............... $ 333,573,253
-------------
Total equity.......................... $ 333,573,253
=============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ..................................... $ 860,787
Capital gain distributions .......................... 1,077,884
------------
1,938,671
EXPENSES:
Mortality and expense risk charges .................. 1,997,056
------------
Net investment income (loss) ...................... (58,385)
------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ........................... 4,232,941
Change in unrealized appreciation
(depreciation) ...................................... 40,880,353
------------
Net gain (loss) on investments ...................... 45,113,294
------------
Net increase (decrease) in equity accounts
resulting from operations ....................... $ 45,054,909
============
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)............................ $ (58,385) $ 23,250,380
Net gain (loss) on investments.......................... 45,113,294 54,801,782
------------- -------------
Net increase (decrease) in equity accounts
resulting from operations............................ 45,054,909 78,052,162
------------- -------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)..................... 62,530,238 61,850,933
------------- -------------
Less cost of units redeemed:
Administrative charges............................... 21,253,460 23,714,204
Policy loans......................................... 6,128,299 5,518,596
Surrender benefits................................... 8,699,115 8,982,170
Death benefits....................................... 398,125 711,078
------------- -------------
36,478,999 38,926,048
------------- -------------
Increase (decrease) in equity accounts from
capital unit transactions.......................... 26,051,239 22,924,885
------------- -------------
Net increase (decrease) in equity accounts........... 71,106,148 100,977,047
EQUITY ACCOUNTS:
Beginning of period..................................... 262,467,105 161,490,058
------------- -------------
End of period........................................... $ 333,573,253 $ 262,467,105
============= =============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
5
<PAGE>
WRL
SERIES LIFE ACCOUNT GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
SEPT. 30 DECEMBER 31
-------- ----------------------------------------------------
1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 41.47 $ 28.44 $ 31.30 $ 30.37 $ 29.95 $ 18.91
Income from operations:
Net investment income (loss)........ (.01) 3.89 .04 .46 1.09 1.72
Net realized and unrealized
gain (loss) on investments........ 6.83 9.14 (2.90) .47 (.67) 9.32
-------- -------- -------- -------- -------- --------
Total income (loss) from operations 6.82 13.03 (2.86) .93 .42 11.04
-------- -------- -------- -------- -------- --------
Accumulation unit value, end of period... $ 48.29 $ 41.47 $ 28.44 $ 31.30 $ 30.37 $ 29.95
======== ======== ======== ======== ======== ========
Total return............................. 16.44% 45.81% (9.13)% 3.06% 1.41% 58.37%
Ratios and supplemental data:
Net assets at end of period (in thousands) $333,573 $262,467 $161,490 $169,757 $146,053 $111,375
Ratio of net investment income (loss) to
average net assets**................ (.03)% 11.05% .16% 1.56% 3.84% 7.14%
- ----------------
<FN>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
6
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Short-to-Intermediate Government Portfolio
(144,126.953 shares;
cost $ 1,484,619) .................................... $ 1,497,493
Accrued transfers from (to) depositor - net ............... (1,871)
-----------
Total assets ......................................... 1,495,622
-----------
LIABILITIES: ................................................ 0
-----------
Total net assets ..................................... $ 1,495,622
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Short-to-Intermediate Government sub-account
(128,515.024738 units;
$11.637719 unit value) ............................... $ 1,495,622
-----------
Total equity ......................................... $ 1,495,622
===========
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30,1996
-----------------
Dividend income ....................................... $ 23,677
Capital gain distributions ............................ 0
--------
23,677
EXPENSES:
Mortality and expense risk charges .................... 10,115
--------
Net investment income (loss) ........................ 13,562
--------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................. 22,518
Change in unrealized appreciation
(depreciation) ....................................... (25,656)
--------
Net gain (loss) on investments ...................... (3,139)
--------
Net increase (decrease) in net assets
resulting from operations ......................... $ 10,423
========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30,1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)........................ $ 13,562 $ 62,086
Net gain (loss) on investments...................... (3,139) 68,387
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations........................ 10,423 130,473
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................ 144,541 679,242
------------- ------------
Less cost of units redeemed:
Administrative charges........................... 130,446 141,954
Policy loans..................................... 27,903 52,521
Surrender benefits............................... 18,978 41,967
Death benefits.................................. 0 144
------------- ------------
177,327 236,586
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions...................... (32,786) 442,656
------------- ------------
Net increase (decrease) in equity accounts....... (22,363) 573,129
EQUITY ACCOUNTS:
Beginning of period................................. 1,517,985 944,856
------------- ------------
End of period....................................... $ 1,495,622 $ 1,517,985
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
7
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
------- -------------------------------------
1996 1995 1994 1993 1992\dagger\
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 11.55 $ 10.27 $ 10.40 $ 10.04 $ 10.00
Income from operations:
Net investment income (loss)........ .10 .61 .40 .14 .01
Net realized and unrealized
gain (loss) on investments........ (.01) .67 (.53) .22 .03
------- ------- ------- ------- -------
Total income (loss) from operations .09 1.28 (.13) .36 .04
------- ------- ------- ------- -------
Accumulation unit value, end of period... $ 11.64 $ 11.55 $ 10.27 $ 10.40 $ 10.04
======= ======= ======= ======= =======
Total return............................. .73% 12.53% (1.32)% 3.64% .38%
Ratios and supplemental data:
Net assets at end of period (in thousands) 1,496 $ 1,518 $ 945 $ 1,408 $ 803
Ratio of net investment income (loss) to
average net assets**................ 1.22% 5.53% 4.06% 1.39% .16%
- ------------
<FN>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period. ** This ratio is
annualized for the period ended September 30, 1996.
\dagger\ The inception date of this sub-account was December 3, 1992. The
total return is not annualized.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
8
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Global Portfolio
(3,830,440.472 shares;
cost $ 59,223,121) .................................. $72,234,094
Accrued transfers from (to) depositor - net .............. 32,463
-----------
Total assets ........................................ 72,266,557
-----------
LIABILITIES: ............................................... 0
-----------
Total net assets .................................... $72,266,557
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Global sub-account
(4,974,425.092964 units;
$ 14.527620 unit value) ............................. $72,266,557
-----------
Total equity ........................................ $72,266,557
===========
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30,1996
Dividend income ........................................ $ 354,841
Capital gain distributions ............................. 114,391
----------
469,232
EXPENSES:
Mortality and expense risk charges ..................... 368,006
----------
Net investment income (loss) ......................... 101,226
----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions .............................. 282,560
Unrealized appreciation (depreciation) ................. 9,409,784
----------
Net gain (loss) on investments ....................... 9,692,344
----------
Net increase (decrease) in net assets
resulting from operations ........................ $9,793,570
==========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)................................. $ 101,226 $ 1,187,745
Net gain (loss) on investments............................... 9,692,344 4,626,003
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations................................. 9,793,570 5,813,748
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).......................... 32,319,930 15,012,786
------------- ------------
Less cost of units redeemed:
Administrative charges.................................... 4,391,586 4,017,781
Policy loans.............................................. 887,801 666,264
Surrender benefits........................................ 1,309,265 721,584
Death benefits............................................ 38,835 44,234
------------- ------------
6,627,487 5,449,863
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions............................... 25,692,443 9,562,923
------------- ------------
Net increase (decrease) in equity accounts................ 35,486,013 15,376,671
Depositors' equity contribution (redemption).................. (268,153) 0
EQUITY ACCOUNTS:
Beginning of period.......................................... 37,048,697 21,672,026
------------- ------------
End of period................................................ $ 72,266,557 $ 37,048,697
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
9
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- -----------------
1996 1995 1994\dagger\
-------- ------- -------
Accumulation unit value, beginning of period $ 11.95 $ 9.80 $ 10.00
Income from operations:
Net investment income (loss)........ .03 .45 .71
Net realized and unrealized
gain (loss) on investments........ 2.55 1.70 (.91)
------- ------- -------
Total income (loss) from operations 2.58 2.15 (.20)
------- ------- -------
Accumulation unit value, end of period... $ 14.53 $ 11.95 $ 9.80
======= ======= =======
Total return............................. 21.57% 21.96% (2.02)%
Ratios and supplemental data:
Net assets at end of period (in thousands) $72,267 $37,049 $21,672
Ratio of net investment income (loss) to
average net assets**................ .29% 4.25% 7.39%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
\dagger\ The inception date of this sub-account was March 1, 1994. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
10
<PAGE>
WRL SERIES LIFE ACCOUNT
EQUITY-INCOME SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Equity-Income Portfolio
(3,657,160.333 shares;
cost $ 43,154,636) ................................. $ 50,638,542
Accrued transfers from (to) depositor - net ............. (53,412)
------------
Total assets ....................................... 50,585,130
------------
LIABILITIES: .............................................. 0
------------
Total net assets ................................... $ 50,585,130
============
EQUITY ACCOUNTS:
Policyowners' equity:
Equity-Income sub-account
(3,414,735.720554 units;
$ 14.813776 unit value) ............................ $ 50,585,130
------------
Total equity ....................................... $ 50,585,130
============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ...................................... $ 312,575
Capital gain distributions ........................... 84,620
----------
397,195
EXPENSES:
Mortality and expense risk charges ................... 302,955
----------
Net investment income (loss) ....................... 94,240
----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................ 228,689
Unrealized appreciation (depreciation) ............... 3,032,915
----------
Net gain (loss) on investments ..................... 3,261,604
----------
Net increase (decrease) in net assets
resulting from operations ...................... $3,355,844
==========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss).................................. $ 94,240 $ 1,756,089
Net gain (loss) on investments................................ 3,261,604 4,992,475
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations.................................. 3,355,844 6,748,564
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................... 12,500,597 14,236,727
------------- ------------
Less cost of units redeemed:
Administrative charges..................................... 3,263,409 3,380,854
Policy loans............................................... 716,938 657,750
Surrender benefits......................................... 853,076 918,863
Death benefits............................................. 86,163 28,153
------------- ------------
4,919,586 4,985,620
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions................................ 7,581,011 9,251,107
------------- ------------
Net increase (decrease) in equity accounts................. 10,936,855 15,999,671
EQUITY ACCOUNTS:
Beginning of period........................................... 39,648,275 23,648,604
------------- ------------
End of period................................................. $ 50,585,130 $ 39,648,275
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
11
<PAGE>
WRL SERIES LIFE ACCOUNT
EQUITY-INCOME SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- ---------------------------
1996 1995 1994 1993\dagger\
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 13.74 $ 11.12 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss)........ .03 .68 .18 .19
Net realized and unrealized
gain (loss) on investments........ 1.04 1.94 (.34) 1.09
------- ------- ------- -------
Total income (loss) from operations 1.07 2.62 (.16) 1.28
------- ------- ------- -------
Accumulation unit value, end of period... $ 14.81 $ 13.74 $ 11.12 $ 11.28
======= ======= ======= =======
Total return............................. 7.82% 23.55% (1.42)% 12.81%
Ratios and supplemental data:
Net assets at end of period (in thousands) $50,585 $39,648 $23,649 $13,343
Ratio of net investment income (loss) to
average net assets**................ .28% 5.47% 1.93% 1.89%
- ----------------------------
<FN>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
dagger\ The inception date of this sub-account was March 1, 1993. The total
return is not annualized.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
12
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Aggressive Investments at net asset value:
WRL Series Fund, Inc.:
Aggressive Growth Portfolio
(3,454,037.947 shares;
cost $ 45,039,041) ................................. $ 48,078,822
Accrued transfers from (to) depositor - net ............. (46,950)
------------
Total assets ....................................... 48,031,872
------------
LIABILITIES: .............................................. 0
------------
Total net assets ................................... $ 48,031,872
============
EQUITY ACCOUNTS:
Policyowners' equity:
Aggressive Growth sub-account
(3,364,595.750104 units;
$14.275674 unit value) ............................. $ 48,031,872
------------
Total equity ....................................... $ 48,031,872
============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ....................................... $ 614,817
Capital gain distributions ............................ 216,587
----------
831,404
EXPENSES:
Mortality and expense risk charges .................... 278,502
----------
Net investment income (loss) ........................ 552,902
----------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................. 1,954,191
Unrealized appreciation (depreciation) ................ 22,556
----------
Net gain (loss) on investments ...................... 1,976,747
----------
Net increase (decrease) in net assets
resulting from operations ....................... $2,529,649
==========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss).................................. $ 552,902 $ 663,994
Net gain (loss) on investments................................ 1,976,747 4,424,350
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations.................................. 2,529,649 5,088,344
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................... 18,767,881 23,169,917
------------- ------------
Less cost of units redeemed:
Administrative charges..................................... 4,483,421 2,568,298
Policy loans............................................... 609,118 627,821
Surrender benefits......................................... 1,070,651 712,307
Death benefits............................................. 6,437 80,922
------------- ------------
6,169,627 3,989,348
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions................................ 12,598,254 19,180,569
------------- ------------
Net increase (decrease) in equity accounts................. 15,127,903 24,268,913
Depositor's equity contribution (redemption).................. 0 (274,290)
EQUITY ACCOUNTS:
Beginning of period........................................... 32,903,969 8,909,346
------------- ------------
End of period................................................. $ 48,031,872 $ 32,903,969
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
13
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- -----------------
1996 1995 1994\dagger\
-------- ------- -------
Accumulation unit value, beginning of period $ 13.43 $ 9.82 $ 10.00
Income from operations:
Net investment income (loss)........ .18 .37 (.06)
Net realized and unrealized
gain (loss) on investments........ .67 3.24 (.12)
------- ------- -------
Total income (loss) from operations .85 3.61 (.18)
------- ------- -------
Accumulation unit value, end of period... $ 14.28 $ 13.43 $ 9.82
======= ======= =======
Total return............................. 6.33% 36.79% (1.85)%
Ratios and supplemental data:
Net assets at end of period (in thousands) $48,032 $32,904 $ 8,909
Ratio of net investment income (loss) to
average net assets**................ 1.81% 2.93% (.60)%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996
\dagger\ The inception date of this sub-account was March 1, 1994. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
14
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Balanced Portfolio
(478,127.36 shares;
cost $ 4,853,852) .................................. $ 5,273,193
Accrued transfers from (to) depositor - net ............. (6,158)
-----------
Total assets ....................................... 5,267,035
-----------
LIABILITIES: .............................................. 0
-----------
Total net assets ................................... $ 5,267,035
===========
EQUITY ACCOUNTS:
Policyowners' equity:
Balanced sub-account
(456,622.641047 units;
$ 11.534766 unit value) ............................ $ 5,267,035
-----------
Total equity ....................................... $ 5,267,035
===========
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ........................................ $ 31,381
Capital gain distributions ............................. 0
--------
31,381
EXPENSES:
Mortality and expense risk charges ..................... 31,297
--------
Net investment income (loss) ......................... 84
--------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions .............................. 67,906
Unrealized appreciation (depreciation) ................. 106,741
--------
Net gain (loss) on investments ....................... 174,647
--------
Net increase (decrease) in net assets
resulting from operations ........................ $174,731
========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)................................... $ 84 $ 102,635
Net gain (loss) on investments................................. 174,647 401,549
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations................................... 174,731 504,184
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)............................ 2,043,775 1,545,514
------------- ------------
Less cost of units redeemed:
Administrative charges...................................... 404,262 327,290
Policy loans................................................ 55,007 29,025
Surrender benefits.......................................... 63,488 27,726
Death benefits.............................................. 3,933 14,881
------------- ------------
526,690 398,852
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions................................. 1,517,085 1,146,662
------------- ------------
Net increase (decrease) in equity accounts.................. 1,691,816 1,650,846
Depositor's equity contribution (redemption)................... (220,175) 0
EQUITY ACCOUNTS:
Beginning of period............................................ 3,795,394 2,144,548
------------- ------------
End of period.................................................. $ 5,267,035 $ 3,795,394
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- -------------------------------------------------------------------------------
15
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT.30 DECEMBER 31
-------- -----------------------
1996 1995 1994\dagger\
-------- ------- -------------
Accumulation unit value, beginning of period $ 11.13 $ 9.37 $ 10.00
Income from operations:
Net investment income (loss)........ .00 .37 .22
Net realized and unrealized
gain (loss) on investments........ .40 1.39 (.85)
------- ------- -------
Total income (loss) from operations .40 1.76 (.63)
------- ------- -------
Accumulation unit value, end of period... $ 11.53 $ 11.13 $ 9.37
======= ======= =======
Total return............................. 3.68% 18.73% (6.29)%
Ratios and supplemental data:
Net assets at end of period (in thousands) $ 5,267 $ 3,795 $ 2,145
Ratio of net investment income (loss) to
average net assets**................ .00% 3.59% 2.55%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996
\dagger\ The inception date of this sub-account was March 1, 1994. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
16
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Emerging Growth Portfolio
(5,215,027.007 shares;
cost $ 72,827,461) .................................. $104,681,427
Accrued transfers from (to) depositor - net .............. 54,104
------------
Total assets ........................................ 104,735,531
------------
LIABILITIES: ............................................... 0
------------
Total net assets .................................... $104,735,531
============
EQUITY ACCOUNTS:
Policyowners' equity:
Emerging Growth sub-account
(5,143,416.816593 units;
$ 20.363026 unit value) ............................. $104,735,531
------------
Total equity ........................................ $104,735,531
============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income .................................... $ 3,998
Capital gain distributions ......................... 178,386
------------
182,384
EXPENSES:
Mortality and expense risk charges ................. 564,594
------------
Net investment income (loss) ..................... (382,210)
------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions .......................... 858,061
Unrealized appreciation (depreciation) ............. 17,300,721
------------
Net gain (loss) on investments ................... 18,158,782
------------
Net increase (decrease) in net assets
resulting from operations .................... $ 17,776,572
============
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)................................ $ (382,210) $ 2,356,904
Net gain (loss) on investments.............................. 18,158,782 16,180,870
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations................................ 17,776,572 18,537,774
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)......................... 28,842,554 21,556,186
------------- ------------
Less cost of units redeemed:
Administrative charges................................... 6,379,364 5,846,452
Policy loans............................................. 1,447,069 1,387,434
Surrender benefits....................................... 1,930,578 1,602,690
Death benefits........................................... 31,537 38,971
------------- ------------
9,788,548 8,875,547
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions.............................. 19,054,006 12,680,639
------------- ------------
Net increase (decrease) in equity accounts............... 36,830,578 31,218,413
EQUITY ACCOUNTS:
Beginning of period......................................... 67,904,953 36,686,540
------------- ------------
End of period............................................... $ 104,735,531 $ 67,904,953
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
17
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- ---------------------------------
1996 1995 1994 1993\dagger\
-------- ------- ------- -------------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period $ 16.56 $ 11.38 $ 12.40 $ 10.00
Income from operations:
Net investment income (loss)........ (.08) .65 (.09) (.09)
Net realized and unrealized
gain (loss) on investments........ 3.88 4.53 (.93) 2.49
------- ------- ------- -------
Total income (loss) from operations 3.80 5.18 (1.02) 2.40
------- ------- ------- ------
Accumulation unit value, end of period... $ 20.36 $ 16.56 $ 11.38 $ 12.40
======= ======= ======= =======
Total return............................. 22.98% 45.49% (8.18)% 23.96%
Ratios and supplemental data:
Net assets at end of period (in thousands) $104,736 $67,905 $36,687 $18,620
Ratio of net investment income (loss) to
average net assets**................ (.62)% 4.66% (.86)% (.77)%
- ------------------
<FN>
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996
\dagger\ The inception date of this sub-account was March 1, 1993. The total
return is not annualized.
</FN>
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
18
<PAGE>
WRL SERIES LIFE ACCOUNT
UTILITY SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Utility Portfolio
(398,719.984 shares;
cost $ 4,334,954) .................................... $4,481,093
Accrued transfers from (to) depositor - net ............... 315
----------
Total assets ......................................... 4,481,408
----------
LIABILITIES: ................................................ 0
----------
Total net assets ..................................... $4,481,408
==========
EQUITY ACCOUNTS:
Policyowners' equity:
Utility sub-account
(376,602.892904 units;
$ 11.899559 unit value) .............................. $4,481,408
----------
Total equity ......................................... $4,481,408
==========
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ...................................... $ 24,453
Capital gain distributions ........................... 1,948
---------
26,401
EXPENSES:
Mortality and expense risk charges ................... 24,289
---------
Net investment income (loss) ....................... 2,112
---------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................ 108,198
Unrealized appreciation (depreciation) ............... (98,824)
---------
Net gain (loss) on investments ..................... 9,374
---------
Net increase (decrease) in net assets
resulting from operations ...................... $ 11,486
=========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED YEAR ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
Net investment income (loss)............................... $ 2,112 $ 88,634
Net gain (loss) on investments............................. 9,374 336,528
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations............................... 11,486 425,162
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................ 2,489,074 1,368,262
------------- ------------
Less cost of units redeemed:
Administrative charges.................................. 303,641 221,419
Policy loans............................................ 43,852 26,862
Surrender benefits...................................... 67,364 126,576
Death benefits.......................................... 2,733 2,896
------------- ------------
417,590 377,753
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions............................. 2,071,484 990,509
------------- ------------
Net increase (decrease) in equity accounts.............. 2,082,970 1,415,671
Depositors' equity contribution (redemption)............ (232,644) 0
EQUITY ACCOUNTS:
Beginning of period........................................ 2,631,082 1,215,411
------------- ------------
End of period.............................................. $ 4,481,408 $ 2,631,082
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
19
<PAGE>
WRL SERIES LIFE ACCOUNT
UTILITY SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
-------- -----------------
1996 1995 1994\dagger
-------- ------- -------
Accumulation unit value, beginning of period $ 11.77 $ 9.49 $ 10.00
Income from operations:
Net investment income (loss)........ .01 .49 .29
Net realized and unrealized
gain (loss) on investments........ .12 1.79 (.80)
------- ------- -------
Total income (loss) from operations .13 2.28 (.51)
------- ------- -------
Accumulation unit value, end of period... $ 11.90 $ 11.77 $ 9.49
======= ======= =======
Total return............................. 1.06% 24.14% (5.15)%
Ratios and supplemental data:
Net assets at end of period (in thousands) $4,481 $2,631 $ 1,215
Ratio of net investment income (loss) to
average net assets.................. .08% 4.57% 3.09%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996
\dagger\ The inception date of this sub-account was March 1, 1994. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
20
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Tactical Asset Allocation Portfolio
(1,217,272.416 shares;
cost $ 13,823,979) ................................. $ 14,885,662
Accrued transfers from (to) depositor - net ............. (21,556)
Total assets ....................................... 14,864,106
------------
LIABILITIES: .............................................. 0
------------
Total net assets ................................... $ 14,864,106
============
EQUITY ACCOUNTS:
Policyowners' equity:
Tactical Asset Allocation sub-account
(1,173,005.980111 units;
$ 12.671808 unit value) ............................ $ 14,864,106
------------
Total equity ....................................... $ 14,864,106
============
STATEMENT OF OPERATIONS
NINE MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996
Dividend income ....................................... $ 99,486
Capital gain distributions ............................ 0
--------
99,486
EXPENSES:
Mortality and expense risk charges .................... 86,544
--------
Net investment income (loss) ........................ 12,942
--------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................. 296,655
Unrealized appreciation (depreciation) ................ 445,964
--------
Net gain (loss) on investments ...................... 742,619
--------
Net increase (decrease) in net assets
resulting from operations ....................... $755,561
========
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
NINE MONTHS ENDED PERIOD ENDED
OPERATIONS: SEPTEMBER 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
Net investment income (loss)............................... $ 12,942 $ 314,171
Net gain (loss) on investments............................. 742,619 733,874
------------- ------------
Net increase (decrease) in equity accounts
resulting from operations............................... 755,561 1,048,045
------------- ------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)........................ 6,456,969 9,081,189
------------- ------------
Less cost of units redeemed:
Administrative charges..................................... 767,103 434,848
Policy loans............................................... 253,319 145,685
Surrender benefits......................................... 773,024 70,630
Death benefits............................................. 835 22,440
------------- ------------
1,794,281 673,603
------------- ------------
Increase (decrease) in equity accounts from
capital unit transactions............................... 4,662,688 8,407,586
------------- ------------
Net increase (decrease) in equity accounts................. 5,418,249 9,455,631
Depositor's equity contribution (redemption)............... 0 (9,774)
EQUITY ACCOUNTS:
Beginning of period........................................ 9,445,857 0
------------- ------------
End of period.............................................. $ 14,864,106 $ 9,445,857
============= ============
</TABLE>
* The inception date of this sub-account was January 3, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
21
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPT. 30 DECEMBER 31
1996 1995\dagger\
Accumulation unit value, beginning of period $ 11.90 $ 10.00
Income from operations:
Net investment income (loss)........ .01 .61
Net realized and unrealized
gain (loss) on investments........ .76 1.29
------- -------
Total income (loss) from operations .77 1.90
------- -------
Accumulation unit value, end of period... $ 12.67 $ 11.90
======= =======
Total return............................. 6.46% 19.03%
Ratios and supplemental data:
Net assets at end of period (in thousands) $14,864 $ 9,446
Ratio of net investment income (loss) to
average net assets**................ .14% 5.47%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
\dagger\ The inception date of this sub-account was January 3, 1995. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
22
<PAGE>
WRL SERIES LIFE ACCOUNT
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
C.A.S.E. Growth Portfolio
(211,216.975 shares;
cost $ 2,608,808) ................................... $ 2,715,157
Accrued transfers from (to) depositor - net .............. (56,062)
-----------
Total assets ........................................ 2,659,095
-----------
LIABILITIES: ............................................... 0
-----------
Total net assets .................................... $ 2,659,095
===========
EQUITY ACCOUNTS:
Policyowners' equity:
C.A.S.E. Growth sub-account
(258,931.483192 units;
$ 10.171290 unit value) ............................. $ 2,633,667
Depositor's equity:
C.A.S.E. Growth sub-account
(2,500.000000 units;
$ 10.171290 unit value .............................. 25,428
-----------
Total equity ........................................ $ 2,659,095
===========
STATEMENT OF OPERATIONS
PERIOD ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996*
Dividend income ....................................... $ 739
Capital gain distributions ............................ 0
---------
739
EXPENSES:
Mortality and expense risk charges .................... 4,077
---------
Net investment income (loss) ........................ (3,338)
---------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................. (2,194)
Unrealized appreciation (depreciation) ................ 106,349
---------
Net gain (loss) on investments ...................... 104,155
---------
Net increase (decrease) in net assets
resulting from operations ....................... $ 100,817
=========
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
PERIOD ENDED
OPERATIONS: SEPTEMBER 30, 1996*
Net investment income (loss) ............................. $ (3,338)
Net gain (loss) on investments ........................... 104,155
-----------
Net increase (decrease) in equity accounts
resulting from operations ............................. 100,817
-----------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed) ...................... 2,590,910
-----------
Less cost of units redeemed:
Administrative charges ................................ 47,280
Policy loans .......................................... 0
Surrender benefits .................................... 10,352
Death benefits ........................................ 0
-----------
57,632
Increase (decrease) in equity accounts from
capital unit transactions ........................... 2,533,278
-----------
Net increase (decrease) in equity accounts ............ 2,634,095
Depositor's equity contribution (redemption) ............. 25,000
EQUITY ACCOUNTS:
Beginning of period ...................................... 0
-----------
End of period ............................................ $ 2,659,095
===========
* The inception date of this sub-account was May 1, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
23
<PAGE>
WRL SERIES LIFE ACCOUNT
C.A.S.E. GROWTH SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPTEMBER 30
1996\dagger\
Accumulation unit value, beginning of period $ 10.00
Income from operations:
Net investment income (loss)........ (.05)
Net realized and unrealized
gain (loss) on investments........ .22
-------
Total income (loss) from operations .17
-------
Accumulation unit value, end of period... $ 10.17
=======
Total return............................. 1.71%
Ratios and supplemental data:
Net assets at end of period (in thousands) $ 2,659
Ratio of net investment income (loss)
to average net assets**............. (1.67)%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
\dagger\ The inception date of this sub-account was May 1, 1996. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
24
<PAGE>
WRL SERIES LIFE ACCOUNT
VALUE EQUITY SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
ASSETS: SEPTEMBER 30, 1996
Investments at net asset value:
WRL Series Fund, Inc.:
Value Equity Portfolio
(503,729.939 shares;
cost $ 5,170,272) ................................ $5,351,399
Accrued transfers from (to) depositor - net ........... 31,656
----------
Total assets ..................................... 5,383,055
----------
LIABILITIES: ............................................ 0
----------
Total net assets ................................. $5,383,055
==========
EQUITY ACCOUNTS:
Policyowners' equity:
Value Equity sub-account
(488,616.296490 units;
$ 10.583725 unit value) .......................... $5,171,381
Depositor's equity:
Value Equity sub-account
(20,000.000000 units;
$ 10.583725 unit value ........................... 211,674
----------
Total equity ..................................... $5,383,055
==========
STATEMENT OF OPERATIONS
PERIOD ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1996*
Dividend income ...................................... $ 0
Capital gain distributions ........................... 0
---------
0
EXPENSES:
Mortality and expense risk charges ................... 5,878
---------
Net investment income (loss) ....................... (5,878)
---------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from
securities transactions ............................ 3,604
Unrealized appreciation (depreciation) ............... 181,127
---------
Net gain (loss) on investments ..................... 184,731
---------
Net increase (decrease) in net assets
resulting from operations ...................... $ 178,853
=========
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
PERIOD ENDED
OPERATIONS: SEPTEMBER 30, 1996*
Net investment income (loss) ............................ $ (5,878)
Net gain (loss) on investments .......................... 184,731
-----------
Net increase (decrease) in equity accounts
resulting from operations ............................ 178,853
-----------
EQUITY TRANSACTIONS:
Proceeds from units sold (repurchased):
Net payments (redemptions) ........................... 5,063,012
-----------
Less cost of units redeemed:
Cost of insurance and administrative charges ......... 38,783
Policy loans ......................................... 0
Surrender benefits ................................... 20,027
Death benefits ....................................... 0
-----------
58,810
Increase (decrease) in equity accounts from
capital unit transactions .......................... 5,004,202
-----------
Net increase (decrease) in equity accounts ........... 5,183,055
Depositor's equity contribution (redemption) ............ 200,000
EQUITY ACCOUNTS:
Beginning of period ..................................... 0
-----------
End of period ........................................... $ 5,383,055
===========
* The inception date of this sub-account was May 1, 1996
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
25
<PAGE>
WRL SERIES LIFE ACCOUNT
VALUE EQUITY SUB-ACCOUNT
(UNAUDITED)
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
SEPTEMBER 30
1996\dagger\
------------
Accumulation unit value, beginning of period $ 10.00
Income from operations:
Net investment income (loss)........ (.15)
Net realized and unrealized
gain (loss) on investments........ .73
-------
Total income (loss) from operations .58
-------
Accumulation unit value, end of period... $ 10.58
=======
Total return............................. 5.84%
Ratios and supplemental data:
Net assets at end of period (in thousa $ 5,383
Ratio of net investment income to
average net assets**................ (3.64)%
* The above table illustrates the change for a unit outstanding computed
using average units outstanding through each period.
** This ratio is annualized for the period ended September 30, 1996.
\dagger\ The inception date of this sub-account was May 1, 1996. The total
return is not annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
26
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Life Account (the "Life Account") was established as a
variable life insurance separate account of the Western Reserve Life Assurance
Co. of Ohio ("WRL") and is registered as a unit investment trust ("Trust") under
the Investment Company Act of 1940, as amended. The Life Account contains
thirteen investment options referred to as sub-accounts. Each sub-account
invests in the corresponding portfolio of the WRL Series Fund, Inc. (the
"Fund"), a registered management investment company under the Investment Company
Act of 1940, as amended. These portfolios and their respective investment
management organizations are as follows:
PORTFOLIO INVESTMENT MANAGER
- --------- ------------------
Money Market J.P. Morgan Investment
Management Inc.
Bond Janus Capital Corporation
(JCC)
Growth JCC
Short-to-Intermediate AEGON USA Investment
Government Management, Inc.
("AEGON Management")
Global JCC
Equity-Income Luther King Asset
Management Inc.
Emerging Growth Van Kampen/American
Capital Asset
Management,Inc.
Aggressive Growth Fred Alger Management,Inc.
Balanced AEGON Management
Utility Federated Investment
Counseling
Tactical Asset Dean Investment Associates
Allocation
C.A.S.E. Growth C.A.S.E. Management, Inc.
Value Equity NWQ Investment
Management Company, Inc.
WRL and AEGON Management are indirectly wholly-owned subsidiaries of AEGON
USA, Inc., which is an indirect wholly-owned subsidiary of AEGON nv, a
Netherlands Corporation.
On May 1, 1996, WRL made an initial contribution to the Life Account
C.A.S.E. Growth and Value Equity sub-accounts, which in turn invested in the
respective portfolios. The amount of the contribution and the units received are
as follows:
SUB-ACCOUNT CONTRIBUTION UNITS
- ----------- ------------ -------------
C.A.S.E. Growth $ 25,000 2,500.000000
Value Equity 200,000 20,000.000000
The Life Account holds assets to support the benefits under flexible premium
variable universal life insurance policies (the "Policies") issued by WRL, which
issued the first of such Policies on October 3, 1986. The Life Account's equity
transactions are accounted for using the appropriate effective date at the
corresponding accumulation unit value.
The preparation of the financial statements in accordance wth generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The following significant accounting policies, which are in conformity with
generally accepted accounting principles for unit investment trusts, have been
consistently used in preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS
The investments in the Fund's shares are stated at the closing net asset
value ("NAV") per share as determined by the Fund on September 30, 1996.
Investment transactions are accounted for on the trade date, using the Fund
NAV per share next determined after receipt of sale or redemption order
without sales charges. Dividend income and capital gain distributions are
recorded on the ex-dividend date. The cost of investments sold is
determined on a first-in first-out basis.
B. FEDERAL INCOME TAXES
The operations of the Life Account are a part of and are taxed with the
total operations of WRL, which is taxed as a life insurance company under
the Internal Revenue Code. Under current law, the investment income of the
Life Account, including realized and unrealized capital gains, is not
taxable to WRL. Accordingly, no provision for Federal income taxes has been
made.
NOTE 2 - CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with issuance and administration
of the Policies.
A. POLICY CHARGES
Under some forms of the Policies, sales and other administrative charges
are deducted by WRL prior to allocation of policyowner payments to the
sub-accounts.
- --------------------------------------------------------------------------------
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
WRL SERIES LIFE ACCOUNT
(UNAUDITED)
- -------------------------------------------------------------------------------
Thereafter, monthly administrative charges are deducted from the
sub-accounts, some of which continue only during the first policy year.
Contingent surrender charges may also apply.
Under the other forms of the Policies, such "front-end" and other
administrative charges are not deducted prior to allocation of the initial
premium payment but may reside as contingent surrender charges.
Under all forms of the Policy, monthly charges against policy cash values
are made to compensate WRL for costs of insurance provided.
B. LIFE ACCOUNT CHARGES
A daily charge equal to an annual rate of 0.90% of average daily net assets
of the Life Account is assessed to compensate WRL for assumption of mortality
and expense risks in connection with issuance and administration of the
Policies. This charge (not assessed at the individual policy level) effectively
reduces the value of a unit outstanding during the year.
NOTE 3 - DIVIDENDS AND DISTRIBUTIONS
Dividends of the Fund's Money Market Portfolio are declared daily and
reinvested monthly. Dividends of the remaining portfolios are declared and
reinvested semi-annually, while capital gain distributions are declared and
reinvested annually. Dividends and distributions of the Fund are generally paid
to and reinvested by the Life Account the next business day after declaration.
NOTE 4 - OTHER MATTERS
As of September 30, 1996 the equity accounts include net unrealized
appreciation (depreciation) on investments of:
SUB-ACCOUNT
-----------
Money Market.............................. $ n/a
Bond...................................... (311,755)
Growth.................................... 100,582,396
Short-to-Intermediate Government.......... 12,874
Global.................................... 13,010,973
Equity-Income............................. 7,483,906
Emerging Growth........................... 31,853,966
Aggressive Growth......................... 3,039,781
Balanced.................................. 419,341
Utility................................... 146,139
Tactical Asset Allocation................. 1,061,683
C.A.S.E. Growth........................... 106,349
Value Equity.............................. 181,127
- --------------------------------------------------------------------------------
28
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
BALANCE SHEET - STATUTORY BASIS
AS OF SEPTEMBER 30, 1996
(IN THOUSANDS) (UNAUDITED)
ASSETS
------
Bonds $ 397,320
Common stocks and mutual funds 610
Mortgage loans on real estate 6,079
Real estate 7,289
Policy loans 47,942
Cash and short-term investments (8,163)
Separate account assets 3,295,321
Other assets 17,235
----------
Total assets $3,763,633
==========
LIABILITIES AND CAPITAL AND SURPLUS
-----------------------------------
Policy reserves $ 299,797
Other policy liabilities 30,655
Amounts due or accrued 14,118
Separate account liabilities 3,290,269
Borrowed money 25,900
Asset valuation reserve 6,033
---------
Total liabilities 3,666,772
Total capital and surplus 96,861
---------
Total liabilities, capital, and surplus $3,763,633
==========
See note to financial statements
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF OPERATIONS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS) (UNAUDITED)
Premium income $750,143
Net investment income 27,905
Net realized capital gains (losses) 89
Other income 10,172
Benefit payments incurred (241,024)
Decrease in policy
and contract reserves 94,965
Net transfers to separate accounts (491,331)
Operating costs (143,580)
--------
Income before income taxes 7,339
Federal income taxes (6,002)
--------
Net income (loss) $ 1,337
========
See note to financial statements
<PAGE>
<TABLE>
<CAPTION>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CHANGES IN CAPITAL AND SURPLUS-STATUTORY BASIS
(IN THOUSANDS) (UNAUDITED)
ADDITIONAL TOTAL
COMMON PAID-IN UNASSIGNED CAPITAL AND
STOCK CAPITAL SURPLUS SURPLUS
------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $1,500 $68,015 $28,424 $97,939
Net income 1,337 1,337
Change in reserve valuation basis - - (2,246) (2,246)
Change in Unrealized gains (losses) - - 147 147
Change in non-admitted assets - - 96 96
Change in asset valuation reserves - - (444) (444)
Change in separate accounts surplus - - 32 32
------ ------- ------- -------
Balance at September 30, 1996 $1,500 $68,015 $27,346 $96,861
====== ======= ======= =======
</TABLE>
See note to financial statements
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
STATEMENT OF CASH FLOWS - STATUTORY BASIS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(IN THOUSANDS) (UNAUDITED)
Operations:
Cash from insurance operations $(126,122)
Investment income received 28,529
Federal income taxes (5,624)
---------
Cash provided (used) by operations (103,217)
---------
Investment activities:
Proceeds from sale or maturity of
long-term invested assets 92,739
Cost of long-term investments acquired (32,327)
Other, net 10,243
---------
Cash provided (used) by
investment activities 70,655
---------
Financing activities:
Increase (decrease) in borrowed money 25,900
---------
Cash provided by (used in)
financing activities 25,900
---------
Net increase (decrease) in cash
and short-term investments (6,662)
Cash and short-term investments:
Beginning of year (1,501
---------
End of period $ (8,163)
=========
See note to financial statements
<PAGE>
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
NOTE TO FINANCIAL STATEMENTS - STATUTORY BASIS
AS OF SEPTEMBER 30, 1996 (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited statutory basis financial statements have been
prepared in accordance with statutory accounting principles for interim
financial information and the instructions to Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and notes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1996. For further information, refer to the accompanying statutory
basis financial statements and notes thereto for the year ended December 31,
1995.
<PAGE>
WRL SERIES LIFE ACCOUNT
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Western Reserve Life Assurance Co. of Ohio
and Policyholders of the WRL Series Life Account
In our opinion, the accompanying statements of assets, liabilities and
equity accounts and the related statements of operations and of changes in
equity accounts and the selected per unit data and ratios present fairly, in all
material respects, the financial position of the Money Market, Bond, Growth,
Short-to-Intermediate Government, Global, Equity-Income, Emerging Growth,
Aggressive Growth, Balanced, Utility and Tactical Asset Allocation Sub-Accounts
of the WRL Series Life Account (a separate account of Western Reserve Life
Assurance Co. of Ohio, hereafter referred to as the "Life Account") at December
31, 1995, the results of each of their operations, the changes in each of their
equity accounts and the selected per unit data and ratios for each of the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and selected per unit data and ratios (hereafter
referred to as "financial statements") are the responsibility of the Life
Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
January 31, 1996
- --------------------------------------------------------------------------------
1
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Money Market Portfolio
(10,819,939.810 shares;
cost $ 10,819,940)..................... $ 10,819,940
Accrued transfers from (to)
depositor - net.......................... (61,316)
-----------------
Total assets........................... 10,758,624
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 10,758,624
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Money Market sub-account
(725,394.862557 units;
$ 14.831403 unit value)................ $ 10,758,624
-----------------
Total equity........................... $ 10,758,624
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 478,782
Capital gain distributions............... 0
-----------------
478,782
EXPENSES:
Mortality and expense risk charges....... 81,372
-----------------
Net investment income (loss)........... 397,410
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... 0
Change in unrealized appreciation
(depreciation)......................... 0
-----------------
Net gain (loss) on investments......... 0
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 397,410
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ 397,410 $ 185,968
Net gain (loss) on investments......................................................... 0 0
---------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations............................................................ 397,410 185,968
---------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).................................................... 3,139,280 6,263,945
---------------- -----------------
Less cost of units redeemed:
Administrative charges............................................................... 1,356,484 1,261,165
Policy loans......................................................................... 219,767 57,873
Surrender benefits................................................................... 899,893 409,880
Death benefits....................................................................... 7,670 562
---------------- -----------------
2,483,814 1,729,480
---------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions.......................................................... 655,466 4,534,465
---------------- -----------------
Net increase (decrease) in equity accounts........................................... 1,052,876 4,720,433
EQUITY ACCOUNTS:
Beginning of period.................................................................... 9,705,748 4,985,315
---------------- -----------------
End of period.......................................................................... $ 10,758,624 $ 9,705,748
================ =================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
2
<PAGE>
WRL SERIES LIFE ACCOUNT
MONEY MARKET SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------------------------------------
1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 14.19 $ 13.84 $ 13.63 $ 13.33 $ 12.78
Income from operations:
Net investment income (loss)................ .64 .35 .21 .30 .55
Net realized and unrealized
gain (loss) on investments................ .00 .00 .00 .00 .00
-------- ------- ------- ------- -------
Total income (loss) from operations....... .64 .35 .21 .30 .55
-------- ------- ------- ------- -------
Accumulation unit value, end of period.......... $ 14.83 $ 14.19 $ 13.84 $ 13.63 $ 13.33
======== ======== ======== ======== ========
Total return.................................... 4.49% 2.58% 1.52% 2.24% 4.34%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 10,759 $ 9,706 $ 4,985 $ 4,619 $ 4,042
Ratio of net investment income (loss)
to average net assets....................... 4.37% 2.66% 1.51% 2.12% 4.28%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
3
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Bond Portfolio
(886,633.291 shares;
cost $ 9,906,273)...................... $ 10,059,038
Accrued transfers from (to)
depositor - net.......................... 7,094
-----------------
Total assets........................... 10,066,132
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 10,066,132
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Bond sub-account
(511,648.226174 units;
$ 19.673931 unit value)................ $ 10,066,132
-----------------
Total equity........................... $ 10,066,132
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 531,010
Capital gain distributions............... 0
-----------------
531,010
EXPENSES:
Mortality and expense risk charges....... 71,033
-----------------
Net investment income (loss)........... 459,977
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... (127,916)
Change in unrealized appreciation
(depreciation)......................... 1,208,073
-----------------
Net gain (loss) on investments......... 1,080,157
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 1,540,134
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 459,977 $ 346,531
Net gain (loss) on investments........................................................ 1,080,157 (901,953)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 1,540,134 (555,422)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 3,749,029 678,317
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 916,494 595,277
Policy loans........................................................................ 197,829 57,084
Surrender benefits.................................................................. 357,384 194,018
Death benefits...................................................................... 10,202 2,326
----------------- -----------------
1,481,909 848,705
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 2,267,120 (170,388)
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 3,807,254 (725,810
EQUITY ACCOUNTS:
Beginning of period................................................................... 6,258,878 6,984,688
----------------- -----------------
End of period......................................................................... $ 10,066,132 $ 6,258,878
================= =================
</TABLE>
The notes to the financial statements are an integral part of this report
- --------------------------------------------------------------------------------
4
<PAGE>
WRL SERIES LIFE ACCOUNT
BOND SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------------------------------------
1995 1994 1993 1992 1991
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 16.14 $ 17.50 $ 15.57 $ 14.68 $ 12.48
Income from operations:
Net investment income (loss)................ 1.05 .89 2.11 1.00 .48
Net realized and unrealized
gain (loss) on investments................ 2.48 (2.25) (.18) (.11) 1.72
-------- ------- ------- ------- -------
Total income (loss) from operations....... 3.53 (1.36) 1.93 .89 2.20
-------- ------- ------- ------- -------
Accumulation unit value, end of period.......... $ 19.67 $ 16.14 $ 17.50 $ 15.57 $ 14.68
========= ======== ======== ======== ========
Total return.................................... 21.89% (7.77)% 12.40% 6.08% 17.63%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 10,066 $ 6,259 $ 6,985 $ 4,558 $ 3,055
Ratio of net investment income (loss)
to average net assets....................... 5.80% 5.57% 12.92% 6.69% 3.59%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
5
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Growth Portfolio
(8,285,195.096 shares;
cost $ 202,613,364).................. $ 262,315,405
Accrued transfers from (to)
depositor - net........................ 151,700
-----------------
Total assets......................... 262,467,105
-----------------
LIABILITIES:............................... 0
-----------------
Total net assets..................... $ 262,467,105
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Growth sub-account
(6,329,021.828348 units;
$ 41.470406 unit value).............. $ 262,467,105
-----------------
Total equity......................... $ 262,467,105
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
INVESTMENT INCOME:
<S> <C>
Dividend income......................... $ 1,182,462
Capital gain distributions.............. 23,952,283
----------------
25,134,745
EXPENSES:
Mortality and expense risk charges...... 1,884,365
----------------
Net investment income (loss).......... 23,250,380
----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions.......................... 5,296,297
Change in unrealized appreciation
(depreciation)........................ 49,505,485
----------------
Net gain (loss) on investments........ 54,801,782
----------------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 78,052,162
================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ 23,250,380 $ 242,685
Net gain (loss) on investments......................................................... 54,801,782 (16,096,859)
---------------- ----------------
Net increase (decrease) in equity accounts
resulting from operations............................................................ 78,052,162 (15,854,174)
---------------- ----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).................................................... 61,850,933 37,295,869
---------------- ----------------
Less cost of units redeemed:
Administrative charges............................................................... 23,714,204 20,971,223
Policy loans......................................................................... 5,518,596 2,955,838
Surrender benefits................................................................... 8,982,170 5,498,322
Death benefits....................................................................... 711,078 282,972
---------------- ----------------
38,926,048 29,708,355
---------------- ----------------
Increase (decrease) in equity accounts from
capital unit transactions.......................................................... 22,924,885 7,587,514
---------------- ----------------
Net increase (decrease) in equity accounts........................................... 100,977,047 (8,266,660)
EQUITY ACCOUNTS:
Beginning of period.................................................................... 161,490,058 169,756,718
---------------- ----------------
End of period.......................................................................... $ 262,467,105 $ 161,490,058
================ ================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
6
<PAGE>
WRL SERIES LIFE ACCOUNT
GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------------------
1995 1994 1993 1992
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 28.44 $ 31.30 $ 30.37 $ 29.95
Income from operations:
Net investment income (loss)................ 3.89 .04 .46 1.09
Net realized and unrealized
gain (loss) on investments................ 9.14 (2.90) .47 (.67)
--------- --------- --------- ---------
Total income (loss) from operations....... 13.03 (2.86) .93 .42
--------- --------- --------- ---------
Accumulation unit value, end of period.......... $ 41.47 $ 28.44 $ 31.30 $ 30.37
========== ========== ========== ==========
Total return.................................... 45.81% (9.13)% 3.06% 1.41%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 262,467 $ 161,490 $ 169,757 $ 146,053
Ratio of net investment income (loss)
to average net assets....................... 11.05% .16% 1.56% 3.84%
<CAPTION>
1991
---------
<S> <C>
Accumulation unit value, beginning of period.... $ 18.91
Income from operations:
Net investment income (loss)................ 1.72
Net realized and unrealized
gain (loss) on investments................ 9.32
---------
Total income (loss) from operations....... 11.04
---------
Accumulation unit value, end of period.......... $ 29.95
==========
Total return.................................... 58.37%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 111,375
Ratio of net investment income (loss)
to average net assets....................... 7.14%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
7
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Short-to-Intermediate Government
Portfolio
(142,006.075 shares;
cost $ 1,440,621)...................... $ 1,479,151
Accrued transfers from (to)
depositor - net.......................... 38,834
-----------------
Total assets........................... 1,517,985
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 1,517,985
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Short-to-Intermediate Government
sub-account
(131,385.750734 units;
$ 11.553647 unit value)................ $ 1,517,985
-----------------
Total equity........................... $ 1,517,985
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 72,133
Capital gain distributions............... 0
-----------------
72,133
EXPENSES:
Mortality and expense risk charges....... 10,047
-----------------
Net investment income (loss)........... 62,086
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... 2,109
Change in unrealized appreciation
(depreciation)......................... 66,278
-----------------
Net gain (loss) on investments......... 68,387
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 130,473
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 62,086 $ 37,124
Net gain (loss) on investments........................................................ 68,387 (49,327)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 130,473 (12,203)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 679,242 515,009
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 141,954 108,685
Policy loans........................................................................ 52,521 3,307
Surrender benefits.................................................................. 41,967 11,985
Death benefits...................................................................... 144 15,256
----------------- -----------------
236,586 139,233
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 442,656 375,776
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 573,129 363,573
Depositor's equity contribution (redemption).......................................... 0 (826,666)
EQUITY ACCOUNTS:
Beginning of period................................................................... 944,856 1,407,949
----------------- -----------------
End of period......................................................................... $ 1,517,985 $ 944,856
=================== ===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
8
<PAGE>
WRL SERIES LIFE ACCOUNT
SHORT-TO-INTERMEDIATE GOVERNMENT SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------------------
1995 1994 1993 1992/dagger/
------- ------- ------- -------
<S> <C> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 10.27 $ 10.40 $ 10.04 $ 10.00
Income from operations:
Net investment income (loss)................ .61 .40 .14 .01
Net realized and unrealized
gain (loss) on investments................ .67 (.53) .22 .03
------- ------- ------- -------
Total income (loss) from operations....... 1.28 (.13) .36 .04
------- ------- ------- -------
Accumulation unit value, end of period.......... $ 11.55 $ 10.27 $ 10.40 $ 10.04
======== ======== ======== ========
Total return.................................... 12.53% (1.32)% 3.64% .38%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 1,518 $ 945 $ 1,408 $ 803
Ratio of net investment income (loss)
to average net assets....................... 5.53% 4.06% 1.39% .16%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was December 3, 1992. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
9
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Global Portfolio
(2,386,494.041 shares;
cost $ 33,426,846)..................... $ 37,028,035
Accrued transfers from (to)
depositor - net.......................... 20,662
-----------------
Total assets........................... 37,048,697
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 37,048,697
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Global sub-account
(3,080,374.719544 units;
$ 11.949748 unit value)................ $ 36,809,702
Depositors' equity:
Global sub-account
(20,000.000000 units;
$ 11.949748 unit value)................ 238,995
-----------------
Total equity........................... $ 37,048,697
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 37,966
Capital gain distributions............... 1,399,851
-----------------
1,437,817
EXPENSES:
Mortality and expense risk charges....... 250,072
-----------------
Net investment income (loss)........... 1,187,745
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... 153,618
Change in unrealized appreciation
(depreciation)......................... 4,472,385
-----------------
Net gain (loss) on investments......... 4,626,003
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 5,813,748
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 1,187,745 $ 763,643
Net gain (loss) on investments........................................................ 4,626,003 (875,349)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 5,813,748 (111,706)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 15,012,786 23,149,750
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 4,017,781 1,181,608
Policy loans........................................................................ 666,264 142,084
Surrender benefits.................................................................. 721,584 234,323
Death benefits...................................................................... 44,234 8,003
----------------- -----------------
5,449,863 1,566,018
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 9,562,923 21,583,732
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 15,376,671 21,472,026
Depositor's equity contribution (redemption).......................................... 0 200,000
EQUITY ACCOUNTS:
Beginning of period................................................................... 21,672,026 0
----------------- -----------------
End of period......................................................................... $ 37,048,697 $ 21,672,026
=================== ===================
</TABLE>
* The inception date of this sub-account was March 1, 1994.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
10
<PAGE>
WRL SERIES LIFE ACCOUNT
GLOBAL SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------
1995 1994/dagger/
-------- -----------
<S> <C> <C>
Accumulation unit value, beginning of period.... $ 9.80 $ 10.00
Income from operations:
Net investment income (loss)................ .45 .71
Net realized and unrealized
gain (loss) on investments................ 1.70 (.91)
-------- -----------
Total income (loss) from operations....... 2.15 (.20)
-------- -----------
Accumulation unit value, end of period.......... $ 11.95 $ 9.80
========= ===========
Total return.................................... 21.96% (2.02)%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 37,049 $ 21,672
Ratio of net investment income (loss)
to average net assets....................... 4.25% 7.39%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was March 1, 1994. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
11
<PAGE>
WRL SERIES LIFE ACCOUNT
EQUITY-INCOME SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Equity-Income Portfolio
(3,079,777.685 shares;
cost $ 35,168,616)..................... $ 39,619,606
Accrued transfers from (to)
depositor - net.......................... 28,669
----------------
Total assets........................... 39,648,275
----------------
LIABILITIES:................................. 0
----------------
Total net assets....................... $ 39,648,275
================
EQUITY ACCOUNTS:
Policy Owners' equity:
Equity-Income sub-account
(2,885,803.576534 units;
$ 13.739076 unit value)................ $ 39,648,275
----------------
Total equity........................... $ 39,648,275
================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 1,009,870
Capital gain distributions............... 1,034,053
---------------
2,043,923
EXPENSES:
Mortality and expense risk charges....... 287,834
---------------
Net investment income (loss)........... 1,756,089
---------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... 220,725
Change in unrealized appreciation
(depreciation)......................... 4,771,750
---------------
Net gain (loss) on investments......... 4,992,475
---------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 6,748,564
===============
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 1,756,089 $ 347,798
Net gain (loss) on investments........................................................ 4,992,475 (596,517)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 6,748,564 (248,719)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 14,236,727 13,516,053
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 3,380,854 1,893,532
Policy loans........................................................................ 657,750 296,848
Surrender benefits.................................................................. 918,863 406,848
Death benefits...................................................................... 28,153 19,871
----------------- -----------------
4,985,620 2,617,099
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 9,251,107 10,898,954
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 15,999,671 10,650,235
Depositor's equity contribution (redemption).......................................... 0 (344,138)
EQUITY ACCOUNTS:
Beginning of period................................................................... 23,648,604 13,342,507
----------------- -----------------
End of period......................................................................... $ 39,648,275 $ 23,648,604
================= =================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
12
<PAGE>
WRL SERIES LIFE ACCOUNT
EQUITY-INCOME SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------
1995 1994 1993/dagger/
-------- -------- --------
<S> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 11.12 $ 11.28 $ 10.00
Income from operations:
Net investment income (loss)................ .68 .18 .19
Net realized and unrealized
gain (loss) on investments................ 1.94 (.34) 1.09
-------- -------- --------
Total income (loss) from operations....... 2.62 (.16) 1.28
-------- -------- --------
Accumulation unit value, end of period.......... $ 13.74 $ 11.12 $ 11.28
========= ========= =========
Total return.................................... 23.55% (1.42)% 12.81%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 39,648 $ 23,649 $ 13,343
Ratio of net investment income (loss)
to average net assets....................... 5.47% 1.93% 1.89%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was March 1, 1993. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
13
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Emerging Growth Portfolio
(4,177,036.054 shares;
cost $ 53,301,177)..................... $ 67,854,423
Accrued transfers from (to)
depositor - net.......................... 50,530
----------------
Total assets........................... 67,904,953
----------------
LIABILITIES:................................. 0
----------------
Total net assets....................... $ 67,904,953
================
EQUITY ACCOUNTS:
Policy Owners' equity:
Emerging Growth sub-account
(4,100,892.510689 units;
$ 16.558579 unit value)................ $ 67,904,953
----------------
Total equity........................... $ 67,904,953
================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 10,599
Capital gain distributions............... 2,799,377
-----------------
2,809,976
EXPENSES:
Mortality and expense risk charges....... 453,072
-----------------
Net investment income (loss)........... 2,356,904
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... 276,206
Change in unrealized appreciation
(depreciation)......................... 15,904,664
-----------------
Net gain (loss) on investments......... 16,180,870
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 18,537,774
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 2,356,904 $ (242,847)
Net gain (loss) on investments........................................................ 16,180,870 (2,055,599)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 18,537,774 (2,298,446)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 21,556,186 25,803,270
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 5,846,452 3,746,668
Policy loans........................................................................ 1,387,434 725,423
Surrender benefits.................................................................. 1,602,690 533,353
Death benefits...................................................................... 38,971 42,065
----------------- -----------------
8,875,547 5,047,509
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 12,680,639 20,755,761
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 31,218,413 18,457,315
Depositor's equity contribution (redemption).......................................... 0 (390,327)
EQUITY ACCOUNTS:
Beginning of period................................................................... 36,686,540 18,619,552
----------------- -----------------
End of period......................................................................... $ 67,904,953 $ 36,686,540
=================== ===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
14
<PAGE>
WRL SERIES LIFE ACCOUNT
EMERGING GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------
1995 1994 1993/dagger/
-------- -------- --------
<S> <C> <C> <C>
Accumulation unit value, beginning of period.... $ 11.38 $ 12.40 $ 10.00
Income from operations:
Net investment income (loss)................ .65 (.09) (.09)
Net realized and unrealized
gain (loss) on investments................ 4.53 (.93) 2.49
-------- -------- --------
Total income (loss) from operations....... 5.18 (1.02) 2.40
-------- -------- --------
Accumulation unit value, end of period.......... $ 16.56 $ 11.38 $ 12.40
========= ========= =========
Total return.................................... 45.49% (8.18)% 23.96%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 67,905 $ 36,687 $ 18,620
Ratio of net investment income (loss)
to average net assets....................... 4.66% (.86)% (.77)%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was March 1, 1993. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
15
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Aggressive Growth Portfolio
(2,477,941.266 shares;
cost $ 29,816,384)................... $ 32,833,608
Accrued transfers from (to)
depositor - net........................ 70,361
-----------------
Total assets......................... 32,903,969
-----------------
LIABILITIES:............................... 0
-----------------
Total net assets..................... $ 32,903,969
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Aggressive Growth sub-account
(2,450,804.260823 units;
$ 13.425784 unit value).............. $ 32,903,969
-----------------
Total equity......................... $ 32,903,969
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
INVESTMENT INCOME:
<S> <C>
Dividend income......................... $ 103
Capital gain distributions.............. 866,971
----------------
867,074
EXPENSES:
Mortality and expense risk charges...... 203,080
----------------
Net investment income (loss).......... 663,994
----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions.......................... 1,785,515
Change in unrealized appreciation
(depreciation)........................ 2,638,835
----------------
Net gain (loss) on investments........ 4,424,350
----------------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 5,088,344
================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ 663,994 $ (27,542)
Net gain (loss) on investments......................................................... 4,424,350 384,517
---------------- ----------------
Net increase (decrease) in equity accounts
resulting from operations............................................................ 5,088,344 356,975
---------------- ----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).................................................... 23,169,917 8,797,727
---------------- ----------------
Less cost of units redeemed:
Administrative charges............................................................... 2,568,298 379,087
Policy loans......................................................................... 627,821 72,785
Surrender benefits................................................................... 712,307 48,513
Death benefits....................................................................... 80,922 4,971
---------------- ----------------
3,989,348 505,356
---------------- ----------------
Increase (decrease) in equity accounts from
capital unit transactions.......................................................... 19,180,569 8,292,371
---------------- ----------------
Net increase (decrease) in equity accounts........................................... 24,268,913 8,649,346
Depositor's equity contribution (redemption)........................................... (274,290) 260,000
EQUITY ACCOUNTS:
Beginning of period.................................................................... 8,909,346 0
---------------- ----------------
End of period.......................................................................... $ 32,903,969 $ 8,909,346
================ ================
</TABLE>
* The inception date of this sub-account was March 1, 1994.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
16
<PAGE>
WRL SERIES LIFE ACCOUNT
AGGRESSIVE GROWTH SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1995 1994/dagger/
-------- --------
<S> <C> <C>
Accumulation unit value, beginning of period.... $ 9.82 $ 10.00
Income from operations:
Net investment income (loss)................ .37 (.06)
Net realized and unrealized
gain (loss) on investments................ 3.24 (.12)
-------- --------
Total income (loss) from operations....... 3.61 (.18)
-------- --------
Accumulation unit value, end of period.......... $ 13.43 $ 9.82
======== ========
Total return.................................... 36.79% (1.85)%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 32,904 $ 8,909
Ratio of net investment income (loss)
to average net assets....................... 2.93% (.60)%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was March 1, 1994. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
17
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Balanced Portfolio
(356,742.991 shares;
cost $ 3,481,188)...................... $ 3,793,788
Accrued transfers from (to)
depositor - net.......................... 1,606
-----------------
Total assets........................... 3,795,394
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 3,795,394
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Balanced sub-account
(321,143.504151 units;
$ 11.125506 unit value)................ $ 3,572,884
Depositors' equity:
Balanced sub-account
(20,000.000000 units;
$ 11.125506 unit value)................ 222,510
-----------------
Total equity........................... $ 3,795,394
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
INVESTMENT INCOME: DECEMBER 31, 1995
<S> <C>
Dividend income.......................... $ 128,272
Capital gain distributions............... 0
-----------------
128,272
EXPENSES:
Mortality and expense risk charges....... 25,637
-----------------
Net investment income (loss)........... 102,635
-----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions........................... (6,199)
Change in unrealized appreciation
(depreciation)......................... 407,748
-----------------
Net gain (loss) on investments......... 401,549
-----------------
Net increase (decrease) in equity
accounts resulting from
operations......................... $ 504,184
=================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 102,635 $ 30,401
Net gain (loss) on investments........................................................ 401,549 (115,505)
----------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations........................................................... 504,184 (85,104)
----------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed)................................................... 1,545,514 2,131,962
----------------- -----------------
Less cost of units redeemed:
Administrative charges.............................................................. 327,290 84,481
Policy loans........................................................................ 29,025 0
Surrender benefits.................................................................. 27,726 15,378
Death benefits...................................................................... 14,811 2,451
----------------- -----------------
398,852 102,310
----------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions......................................................... 1,146,662 2,029,652
----------------- -----------------
Net increase (decrease) in equity accounts.......................................... 1,650,846 1,944,548
Depositor's equity contribution (redemption).......................................... 0 200,000
EQUITY ACCOUNTS:
Beginning of period................................................................. 2,144,548 0
----------------- -----------------
End of period....................................................................... $ 3,795,394 $ 2,144,548
=================== =================
</TABLE>
* The inception date of this sub-account was March 1, 1994.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
18
<PAGE>
WRL SERIES LIFE ACCOUNT
BALANCED SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1995 1994/dagger/
------- -------
<S> <C> <C>
Accumulation unit value, beginning of period.... $ 9.37 $ 10.00
Income from operations:
Net investment income (loss)................ .37 .22
Net realized and unrealized
gain (loss) on investments................ 1.39 (.85)
------- -------
Total income (loss) from operations....... 1.76 (.63)
------- -------
Accumulation unit value, end of period.......... $ 11.13 $ 9.37
======== ========
Total return.................................... 18.73% (6.29)%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $ 3,795 $ 2,145
Ratio of net investment income (loss)
to average net assets....................... 3.59% 2.55%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was March 1, 1994. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
19
<PAGE>
WRL SERIES LIFE ACCOUNT
UTILITY SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Utility Portfolio
(236,391.086 shares;
cost $ 2,384,572)...................... $ 2,629,535
Accrued transfers from (to)
depositor - net.......................... 1,547
-----------------
Total assets........................... 2,631,082
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 2,631,082
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Utility sub-account
(203,453.934332 units;
$ 11.774605 unit value)................ $ 2,395,590
Depositors' equity:
Utility sub-account
(20,000.000000 units;
$ 11.774605 unit value)................ 235,492
-----------------
Total equity........................... $ 2,631,082
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1995
INVESTMENT INCOME:
<S> <C>
Dividend income......................... $ 86,266
Capital gain distributions.............. 19,740
----------------
106,006
EXPENSES:
Mortality and expense risk charges...... 17,372
----------------
Net investment income (loss).......... 88,634
----------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions.......................... 44,646
Change in unrealized appreciation
(depreciation)........................ 291,882
----------------
Net gain (loss) on investments........ 336,528
----------------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 425,162
================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ 88,634 $ 23,434
Net gain (loss) on investments......................................................... 336,528 (58,002)
---------------- -----------------
Net increase (decrease) in equity accounts
resulting from operations............................................................ 425,162 (34,568)
---------------- -----------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).................................................... 1,368,262 1,102,522
---------------- -----------------
Less cost of units redeemed:
Administrative charges............................................................... 221,419 42,870
Policy loans......................................................................... 26,862 0
Surrender benefits................................................................... 126,576 6,295
Death benefits....................................................................... 2,896 3,378
---------------- -----------------
377,753 52,543
---------------- -----------------
Increase (decrease) in equity accounts from
capital unit transactions.......................................................... 990,509 1,049,979
---------------- -----------------
Net increase (decrease) in equity accounts........................................... 1,415,671 1,015,411
Depositor's equity contribution (redemption)........................................... 0 200,000
EQUITY ACCOUNTS:
Beginning of period.................................................................... 1,215,411 0
---------------- -----------------
End of period.......................................................................... $ 2,631,082 $ 1,215,411
================== ===================
</TABLE>
* The inception date of this sub-account was March 1, 1994.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
20
<PAGE>
WRL SERIES LIFE ACCOUNT
UTILITY SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31
------------------------
1995 1994/dagger/
------- --------
<S> <C> <C>
Accumulation unit value, beginning of period.... $ 9.49 $ 10.00
Income from operations:
Net investment income (loss)................ .49 .29
Net realized and unrealized
gain (loss) on investment................. 1.79 (.80)
------- --------
Total income (loss) from operations....... 2.28 (.51)
------- --------
Accumulation unit value, end of period.......... $11.77 $ 9.49
======== ========
Total return.................................... 24.14% (5.15)%
Ratios and supplemental data:
Net assets at end of period (in thousands).... $2,631 $ 1,215
Ratio of net investment income (loss)
to average net assets....................... 4.57% 3.09%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date for this sub-account was March 1, 1994. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
21
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS, LIABILITIES AND EQUITY ACCOUNTS
<TABLE>
<CAPTION>
ASSETS: DECEMBER 31, 1995
<S> <C>
Investments, at net asset value:
WRL Series Fund, Inc.:
Tactical Asset Allocation Portfolio
(822,390.362 shares;
cost $ 8,835,438)...................... $ 9,451,157
Accrued transfers from (to)
depositor - net.......................... (5,300)
-----------------
Total assets........................... 9,445,857
-----------------
LIABILITIES:................................. 0
-----------------
Total net assets....................... $ 9,445,857
=================
EQUITY ACCOUNTS:
Policy Owners' equity:
Tactical Asset Allocation sub-account
(793,585.197167 units;
$ 11.902763 unit value)................ $ 9,445,857
-----------------
Total equity........................... $ 9,445,857
=================
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: DECEMBER 31, 1995*
<S> <C>
Dividend income......................... $ 193,985
Capital gain distributions.............. 171,580
------------------
365,565
EXPENSES:
Mortality and expense risk charges...... 51,394
------------------
Net investment income (loss).......... 314,171
------------------
Net realized and unrealized gain (loss) on investments:
Net realized gain (loss) from securities
transactions.......................... 118,155
Change in unrealized appreciation
(depreciation)........................ 615,719
------------------
Net gain (loss) on investments........ 733,874
------------------
Net increase (decrease) in equity
accounts resulting from
operations........................ $ 1,048,045
==================
</TABLE>
STATEMENT OF CHANGES IN EQUITY ACCOUNTS
<TABLE>
<CAPTION>
PERIOD ENDED
DECEMBER 31, 1995*
<S> <C>
OPERATIONS:
Net investment income (loss)................................................................................. $ 314,171
Net gain (loss) on investments............................................................................... 733,874
------------------
Net increase (decrease) in equity accounts
resulting from operations.................................................................................. 1,048,045
------------------
EQUITY TRANSACTIONS:
Proceeds from units sold (redeemed).......................................................................... 9,081,189
------------------
Less cost of units redeemed:
Administrative charges..................................................................................... 434,848
Policy loans............................................................................................... 145,685
Surrender benefits......................................................................................... 70,630
Death benefits............................................................................................. 22,440
------------------
673,603
------------------
Increase (decrease) in equity accounts from
capital unit transactions................................................................................ 8,407,586
------------------
Net increase (decrease) in equity accounts................................................................. 9,455,631
Depositor's equity contribution (redemption)................................................................. (9,774)
EQUITY ACCOUNTS:
Beginning of period.......................................................................................... 0
------------------
End of period................................................................................................ $ 9,445,857
====================
</TABLE>
* The inception of this sub-account was January 3, 1995.
The notes to the financial statements, are an integral part of this report.
- --------------------------------------------------------------------------------
22
<PAGE>
WRL SERIES LIFE ACCOUNT
TACTICAL ASSET ALLOCATION SUB-ACCOUNT
- --------------------------------------------------------------------------------
SELECTED PER UNIT DATA AND RATIOS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
DECEMBER 31, 1995/dagger/
-----------------
<S> <C>
Accumulation unit value, beginning of period................. $ 10.00
Income from operations:
Net investment income (loss)............................. .61
Net realized and unrealized
gain (loss) on investments............................. 1.29
-----------
Total income (loss) from operations.................... 1.90
-----------
Accumulation unit value, end of period....................... $ 11.90
===========
Total return................................................. 19.03%
Ratios and supplemental data:
Net assets at end of period (in thousands)................. $ 9,446
Ratio of net investment income (loss)
to average net assets.................................... 5.47%
</TABLE>
* The above table illustrates the change for a unit outstanding computed using
average units outstanding throughout each period.
/dagger/ The inception date of this sub-account was January 3, 1995. The total
return and ratio of net investment income to average net assets are not
annualized.
The notes to the financial statements, are an integral part of this report.
- --------------------------------------------------------------------------------
23
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Life Account (the "Life Account") was established as a
variable life insurance separate account of Western Reserve Life Assurance Co.
of Ohio ("WRL") and is registered as a unit investment trust ("Trust") under the
Investment Company Act of 1940, as amended. The Life Account contains eleven
investment options referred to as sub-accounts. Each sub-account invests in the
corresponding portfolio of the WRL Series Fund, Inc. (the "Fund"), a registered
management investment company under the Investment Company Act of 1940, as
amended. These portfolios and their respective investment management
organizations are as follows:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT MANAGER
--------- ------------------------
<S> <C>
Money Market Janus Capital Corporation
("JCC")
Bond JCC
Growth JCC
Short-to-Intermediate AEGON USA Investment
Government Management, Inc. ("AEGON
Management")
Global JCC
Equity-Income Luther King Capital
Management Corporation
Emerging Growth Van Kampen American Capital
Asset Management, Inc.
Aggressive Growth Fred Alger Management, Inc.
Balanced AEGON Management
Utility Federated Investment
Counseling
Tactical Asset Dean Investment Associates
Allocation
</TABLE>
WRL and AEGON Management are indirectly wholly-owned subsidiaries of AEGON
USA, Inc., which is an indirect wholly-owned subsidiary of AEGON nv, a
Netherlands corporation.
On January 3, 1995, WRL made an initial contribution of $200,000 to the
Life Account, Tactical Asset Allocation sub-account, for which WRL received
20,000.000000 units. On April 20, 1995, WRL redeemed the initial contribution in
the Life Account, Tactical Asset Allocation sub-account, for $209,775.
The Life Account holds assets to support the benefits under flexible
premium variable universal life insurance policies (the "Policies") issued by
WRL, which issued the first of such Policies on October 3, 1986. The Life
Account's equity transactions are accounted for using the appropriate effective
date at the corresponding accumulation unit value.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The following significant accounting policies, which are in conformity with
generally accepted accounting principles for unit investment trusts, have been
consistently used in preparation of the Trust's financial statements.
A. VALUATION OF INVESTMENTS
The investments in the Fund's shares are stated at the closing net asset
value ("NAV") per share as determined by the Fund on December 31, 1995.
Investment transactions are accounted for on the trade date, using the Fund
NAV next determined after receipt of sale or redemption order without sales
charges. Dividend income and capital gain distributions are recorded on the
ex-dividend date. The cost of investments sold is determined on a first-in,
first-out basis.
B. FEDERAL INCOME TAXES
The operations of the Life Account are a part of and are taxed with the
total operations of WRL, which is taxed as a life insurance company under
the Internal Revenue Code. Under current law, the investment income of the
Life Account, including realized and unrealized capital gains, is not
taxable to WRL. Accordingly, no provision for Federal income taxes has been
made.
NOTE 2 - CHARGES AND DEDUCTIONS
Charges are assessed by WRL in connection with issuance and administration
of the Policies.
A. POLICY CHARGES
Under some forms of the Policies, sales and other administrative charges are
deducted by WRL prior to allocation of policyowner payments to the
sub-accounts. Thereafter, monthly administrative charges are deducted from
the sub-accounts, some of which continue only during the first policy year.
Contingent surrender charges may also apply.
- --------------------------------------------------------------------------------
24
<PAGE>
WRL SERIES LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 2 - CHARGES AND DEDUCTIONS (CONTINUED)
Under the other forms of the Policies, such "front-end" and other
administrative charges are not deducted prior to allocation of the initial
premium payment but may reside as contingent surrender charges.
Under all forms of the Policy, monthly charges against policy cash values
are made to compensate WRL for costs of insurance provided.
B. LIFE ACCOUNT CHARGES
A daily charge equal to an annual rate of 0.90% of average daily net assets
of the Life Account is assessed to compensate WRL for assumption of
mortality and expense risks in connection with issuance and administration
of the Policies. This charge (not assessed at the individual policy level)
effectively reduces the value of a unit outstanding during the year.
NOTE 3 - DIVIDENDS AND DISTRIBUTIONS
Dividends of the Fund's Money Market Portfolio are declared daily and
reinvested monthly. Dividends of the remaining portfolios are declared and
reinvested semiannually, while capital gain distributions are declared and
reinvested annually. Dividends and distributions of the Fund are generally paid
to and reinvested by the Life Account the next business day after declaration.
NOTE 4 - OTHER MATTERS
As of December 31, 1995 the equity accounts include net unrealized
appreciation (depreciation) on investments as follows:
<TABLE>
<S> <C>
SUB-ACCOUNT
- -----------------
Money Market.......................... $ n/a
Bond.................................. 152,765
Growth................................ 59,702,041
Short-to-Intermediate Government...... 38,530
Global................................ 3,601,189
Equity-Income......................... 4,450,990
Emerging Growth....................... 14,553,246
Aggressive Growth..................... 3,017,224
Balanced.............................. 312,600
Utility............................... 244,963
Tactical Asset Allocation............. 615,719
</TABLE>
- --------------------------------------------------------------------------------
25
<PAGE>
Report of Independent Auditors
The Board of Directors
Western Reserve Life Assurance Co. of Ohio
We have audited the accompanying statutory-basis balance sheets of Western
Reserve Life Assurance Co. of Ohio as of December 31, 1995 and 1994, and the
related statutory-basis statements of operations, changes in capital and
surplus, and cash flows for each of the three years in the period ended December
31, 1995. Our audits also included the statutory-basis financial statement
schedules required by Regulation S-X, Article 7. These financial statements and
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our audits. We
did not audit the "Separate Account Assets" and "Separate Account Liabilities"
in the balance sheet of the Company. The Separate Account financial statements
were audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the data included for the Separate Account, is
based solely upon the reports of the other auditors.
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 and the reports of other auditors provide a
reasonable basis for our opinion.
The Company presents its financial statements in conformity with the accounting
practices prescribed or permitted by the Insurance Department of the State of
Ohio. The variances between such practices and generally accepted accounting
principles are described in Note 1. The effects of these variances are not
reasonably determinable but we believe they are material.
In our opinion, because of the materiality of the effects of the variances
between generally accepted accounting principles and the accounting practices
referred to in the preceding paragraph, the financial statements referred to
above are not intended to and do not present fairly, in conformity with
generally accepted accounting principles, the financial position of Western
Reserve Life Assurance Co. of Ohio at December 31, 1995 and 1994, or the results
of its operations or its cash flows for each of the three years in the period
ended December 31, 1995.
<PAGE>
In addition, in our opinion, based on our audits and the reports of other
auditors, the financial statements referred to above present fairly, in all
material respects, the financial position of Western Reserve Life Assurance Co.
of Ohio 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 accounting practices prescribed or permitted by the Insurance
Department of the State of Ohio. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic statutory-basis
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
ERNST & YOUNG LLP
Des Moines, Iowa
February 23, 1996
<PAGE>
<TABLE>
<CAPTION>
Western Reserve Life Assurance Co. of Ohio
Balance Sheets - Statutory Basis
(Dollars in thousands, except per share data)
DECEMBER 31
1995 1994
----------------------------
<S> <C> <C>
ADMITTED ASSETS
Cash and invested assets:
Cash and short-term investments $ 4,999 $ 46,722
Bonds 452,474 423,758
Stocks:
Preferred, at market (cost: $78 in 1994) - 14
Common, at market (cost: $473 in 1995 and
$1,944 in 1994) 834 2,541
Mortgage loans on real estate 6,181 9,539
Home office properties, at cost less accumulated
depreciation ($1,505 in 1995 and $1,358 in 1994 5,121 4,818
Policy loans 37,125 27,520
----------------------------
Total cash and invested assets 506,734 514,912
Premiums deferred and uncollected 1,787 1,763
Accrued investment income 7,565 7,505
Receivable from affiliates 4,337 481
Other assets 4,264 3,504
Separate account assets 2,419,205 1,596,736
----------------------------
Total admitted assets $ 2,943,892 $2,124,901
============================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
DECEMBER 31
1995 1994
-----------------------------
LIABILITIES AND CAPITAL AND SURPLUS
Liabilities:
Aggregate reserves for policies and contracts:
Life $ 73,163 $ 84,689
Annuity 319,353 314,124
Policy and contract claim reserves 6,612 5,119
Other policyholders' funds 2,384 2,495
Remittances and items not allocated 5,136 4,613
Federal income taxes payable 1,417 96
Asset valuation reserve 5,590 8,491
Interest maintenance reserve 6,392 6,720
Payable to affiliate - 674
Other liabilities 10,102 8,239
Separate account liabilities 2,415,804 1,594,621
-----------------------------
Total liabilities 2,845,953 2,029,881
Commitments and contingencies
Capital and surplus:
Common stock, $1.00 par value, 1,500 shares
authorized, issued and outstanding 1,500 1,500
Paid-in surplus 68,015 68,015
Unassigned surplus 28,424 25,505
-----------------------------
Total capital and surplus 97,939 95,020
=============================
Total liabilities and capital and surplus $2,943,892 $2,124,901
=============================
SEE ACCOMPANYING NOTES.
<PAGE>
<TABLE>
<CAPTION>
Western Reserve Life Assurance Co. of Ohio
Statements of Operations - Statutory Basis
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1995 1994 1993
----------------------------------------
<S> <C> <C> <C>
Revenues:
Premiums and other considerations, net of
reinsurance:
Life $ 191,508 $150,991 $107,008
Annuity 378,390 449,141 449,361
Net investment income 40,891 40,139 46,197
Amortization of interest maintenance reserve 882 726 618
Commissions and expense allowances on
reinsurance ceded 11 12 14
Other income 8,237 6,354 4,322
---------------------------------------
619,919 647,363 607,520
Benefits and expenses:
Benefits paid or provided for:
Death, surrender and other life insurance and
annuity benefits 243,658 230,511 111,785
Increase (decrease) in aggregate reserves for
policies and contracts:
Life (15,023) (11,332) (4,259)
Annuity 5,229 (78,590) (12,486)
---------------------------------------
233,864 140,589 95,040
Insurance expenses:
Net transfers to separate accounts 242,427 386,174 414,357
Commissions 82,903 78,168 60,975
General insurance expenses 37,246 33,100 24,701
Taxes, licenses and fees 8,919 5,931 5,682
---------------------------------------
371,495 503,373 505,715
---------------------------------------
605,359 643,962 600,755
---------------------------------------
Gain from operations before federal income
taxes and realized capital gains (losses) on
investments 14,560 3,401 6,765
Federal income tax expense 8,917 3,406 4,206
---------------------------------------
Gain (loss) from operations before realized capital
gains (losses) on investments 5,643 (5) 2,559
Netrealized capital gains (losses) on investments
(net of related federal income taxes and
amounts transferred to interest maintenance
reserve) (1,678) (1,133) 2,348
---------------------------------------
Net income (loss) $ 3,965 $ (1,138) $ 4,907
=======================================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
<TABLE>
<CAPTION>
Western Reserve Life Assurance Co. of Ohio
Statements of Changes in Capital and Surplus - Statutory Basis
(Dollars in thousands)
Additional Total
Common Paid-In Unassigned Capital and
Stock Capital Surplus Surplus
---------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at January 1, 1993 $1,500 $23,015 $19,109 $43,624
Net income for 1993 - - 4,907 4,907
Net unrealized capital gains - - 1,503 1,503
Decrease in non-admitted assets - - 5,535 5,535
Increase in asset valuation reserves - - (1,706) (1,706)
Increase in surplus in separate accounts - - 633 633
Dividend to stockholder - - (5,600) (5,600)
Other adjustments - - 513 513
--------------------------------------------------------
Balance at December 31, 1993 1,500 23,015 24,894 49,409
Capital contribution - 45,000 - 45,000
Net loss for 1994 - - (1,138) (1,138)
Net unrealized capital losses - - (9) (9)
Decrease in non-admitted assets - - 368 368
Decrease in asset valuation reserves - - 4,321 4,321
Decrease in surplus in separate accounts - - (748) (748)
Other adjustments - - (2,183) (2,183)
--------------------------------------------------------
Balance at December 31, 1994 1,500 68,015 25,505 95,020
Net income for 1995 - - 3,965 3,965
Net unrealized capital losses - - (500) (500)
Decrease in non-admitted assets - - 903 903
Decrease in asset valuation reserve - - 2,901 2,901
Decrease in surplus in separate accounts - - 541 541
Change in reserve valuation - - (3,496) (3,496)
Other adjustments - - (1,395) (1,395)
--------------------------------------------------------
Balance at December 31, 1995 $1,500 $68,015 $28,424 $97,939
========================================================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
<TABLE>
<CAPTION>
Western Reserve Life Assurance Co. of Ohio
Statements of Cash Flows - Statutory Basis
(Dollars in thousands)
YEAR ENDED DECEMBER 31
1995 1994 1993
-----------------------------------
<S> <C> <C> <C>
SOURCES OF CASH
Premiums and other considerations, net of reinsurance $ 569,934 $ 600,405 $ 556,353
Net investment income 42,359 41,977 47,424
Other income 8,052 6,311 4,245
-----------------------------------
620,345 648,693 608,022
Life claims (16,759) (14,660) (12,820)
Surrender benefits and other fund withdrawals (206,250) (196,169) (81,902)
Other benefits to policyholders (19,041) (18,251) (17,385)
Commissions, other expenses and taxes (128,314) (119,755) (92,572)
Dividends to policyholders (26) (22) (44)
Federal income taxes (7,531) (3,378) (3,573)
Net increase in policy loans (9,605) (4,496) (4,686)
Net transfers to separate accounts (242,427) (386,174) (414,357)
-----------------------------------
Net cash used by operations (9,608) (94,212) (19,317)
Proceeds from investments sold, matured or repaid:
Bonds and redeemable preferred stock 108,554 99,241 203,547
Common stocks 2,108 80,066 81,391
Mortgage loans on real estate 1,954 132 764
Real estate -- -- 109
Miscellaneous -- (28) --
-----------------------------------
Total cash from investments 112,616 179,411 285,811
Capital contribution -- 45,000 --
Other sources 2,830 6,135 5,899
-----------------------------------
Total sources of cash 105,838 136,334 272,393
APPLICATIONS OF CASH
Cost of investments acquired:
Bonds and redeemable preferred stock 139,402 47,214 165,967
Common stocks 589 65,911 82,767
Mortgage loans on real estate 6 1,004 290
Real estate 449 37 478
-----------------------------------
Total investments acquired 140,446 114,166 249,502
Dividend to stockholder -- -- 5,600
Other applications, net 7,115 6,086 1,959
-----------------------------------
Total applications of cash 147,561 120,252 257,061
-----------------------------------
Net change in cash and short-term investments (41,723) 16,082 15,332
Cash and short-term investments at beginning of year 46,722 30,640 15,308
-----------------------------------
Cash and short-term investments at end of year $ 4,999 $ 46,722 $ 30,640
===================================
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis
(Dollars in thousands)
December 31, 1995
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Western Reserve Life Assurance Co. of Ohio ("the Company") is a stock life
insurance company and is a wholly-owned subsidiary of First AUSA Life Insurance
Company which, in turn, is a wholly-owned subsidiary of AEGON USA, Inc.
("AEGON"). AEGON is a wholly-owned subsidiary of AEGON nv, a holding company
organized under the laws of the Netherlands.
NATURE OF BUSINESS
The Company operates predominantly in the variable universal life and variable
annuity areas of the life insurance business. The Company is licensed in 49
states and the District of Columbia. Sales of the Company's products are through
financial planners, independent representatives, financial institutions and
stockbrokers. The majority of the Company's new life insurance written and a
substantial portion of new annuities written is done through one marketing
organization; the Company expects to maintain this relationship for the
foreseeable future.
BASIS OF PRESENTATION
The preparation of financial statements of insurance companies requires
management to make estimates and assumptions that affect amounts reported in the
financial statements and accompanying notes. Such estimates and assumptions
could change in the future as more information becomes known, which could impact
the amounts reported and disclosed herein.
The accompanying financial statements have been prepared on the basis of
accounting practices prescribed or permitted by the Insurance Department of the
State of Ohio, which practices differ in some respects from generally accepted
accounting principles. The more significant of these differences are as follows:
(a) bonds are generally carried at amortized cost rather than segregating the
portfolio into held-to-maturity (carried at amortized cost), available-for-sale
(carried at fair value), and trading (carried at fair value) classifications;
(b) acquisition costs of acquiring new business are charged to current
operations as incurred rather than deferred and amortized over the life of the
policies; (c) policy reserves on traditional life products are based on
statutory mortality rates and interest which may differ from reserves based on
reasonable assumptions of expected mortality, interest, and withdrawals which
include a provision for possible unfavorable deviation from such assumptions;
(d) policy reserves on certain investment products use discounting methodologies
utilizing statutory interest rates rather than full account values; (e)
reinsurance amounts are netted against the corresponding receivable or payable
rather than shown as gross amounts on the balance sheet; (f) deferred income
taxes are not provided for the difference between the financial statement and
income tax bases of assets and liabilities; (g) net realized gains or losses
attributed to changes in the
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
level of interest rates in the market are deferred and amortized over the
remaining life of the bond or mortgage loan, rather than recognized as gains or
losses in the statement of operations when the sale is completed; (h) declines
in the estimated realizable value of investments are provided for through the
establishment of a formula-determined statutory investment reserve (carried as a
liability) changes to which are charged directly to surplus, rather than through
recognition in the statement of operations for declines in value, when such
declines are judged to be other than temporary; (i) certain assets designated as
"non-admitted assets" have been charged to surplus rather than being reported as
assets; (j) revenues for universal life and investment products consist of
premiums received rather than policy charges for the cost of insurance, policy
administration charges, amortization of policy initiation fees and surrender
charges assessed; and (k) pension expense is recorded as amounts are paid. The
effects of these variances have not been determined by the Company.
The National Association of Insurance Commissioners (NAIC) currently is in the
process of recodifying statutory accounting practices, the result of which is
expected to constitute the only source of "prescribed" statutory accounting
practices. Accordingly, that project, which is expected to be completed in 1996,
will likely change, to some extent, prescribed statutory accounting practices
and may result in changes to the accounting practices that the Company uses to
prepare its statutory-basis financial statements.
CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company considers all highly
liquid investments with remaining maturities of one year or less when purchased
to be cash equivalents. This amount includes $6,500 of short-term intercompany
notes receivable at December 31, 1995.
INVESTMENTS
Investments in bonds (except those to which the Securities Valuation Office of
the NAIC has ascribed a value), mortgage loans on real estate and short-term
investments are reported at cost adjusted for amortization of premiums and
accrual of discounts. Amortization is computed using methods which result in a
level yield over the expected life of the security. The Company reviews its
prepayment assumptions on mortgage and other asset backed securities at regular
intervals and adjusts amortization rates prospectively when such assumptions are
changed due to experience and/or expected future patterns. Investments in
preferred stocks in good standing are reported at cost. Investments in preferred
stocks not in good standing are reported at the lower of cost or market. Common
stocks are carried at market and include shares of mutual funds (money market
and other). Real estate is reported at cost less allowances for depreciation.
Depreciation is computed principally by the straight-line method. Policy loans
are reported at unpaid principal. Other "admitted assets" are valued,
principally at cost, as required or permitted by Ohio Insurance Laws.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Realized capital gains and losses are determined on the basis of specific
identification and are recorded net of related federal income taxes. The Asset
Valuation Reserve (AVR) is established by the Company to provide for anticipated
losses in the event of default by issuers of certain invested assets. These
amounts are determined using a formula prescribed by the NAIC and are reported
as a liability. The formula for the AVR provides for a corresponding adjustment
for realized gains and losses, net of amounts attributed to changes in the
general level of interest rates. Under a formula prescribed by the NAIC, the
Company defers, in the Interest Maintenance Reserve (IMR), the portion of
realized gains and losses on sales of fixed income investments, principally
bonds and mortgage loans, attributable to changes in the general level of
interest rates and amortizes those deferrals over the remaining period to
maturity of the security.
During 1995, 1994 and 1993, net realized capital gains of $554, $436 and $4,270,
respectively, were credited to the IMR rather than being immediately recognized
in the statements of operations. Amortization of these net gains aggregated
$882, $726 and $618 for the years ended December 31, 1995, 1994 and 1993,
respectively.
Interest income is recognized on an accrual basis. The Company does not accrue
income on bonds in default, mortgage loans on real estate in default and/or
foreclosure or which are delinquent more than twelve months, or real estate
where rent is in arrears for more than three months. Further, income is not
accrued when collection is uncertain. At December 31, 1995, 1994 and 1993, the
Company excluded investment income due and accrued of $1, $237 and $0,
respectively, with respect to such practices.
AGGREGATE RESERVES FOR POLICIES
Life and annuity reserves are developed by actuarial methods and are determined
based on published tables using statutorily specified interest rates and
valuation methods that will provide, in the aggregate, reserves that are greater
than or equal to the minimum required by law.
The aggregate policy reserves for traditional life insurance policies are based
principally upon the 1941, 1958, and 1980 Commissioners' Standard Ordinary
Mortality Tables. The reserves are calculated using interest rates ranging from
2.25% to 5.50% and are computed principally on the Net Level Valuation and the
Commissioner's Reserve Valuation Method (CRVM). Reserves for universal life
policies are based on account balances adjusted for the CRVM.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred annuity reserves are calculated according to the Commissioners' Annuity
Reserve Valuation Method plus excess interest reserves to cover situations where
the future interest guarantees plus the decrease in surrender charges are in
excess of the maximum valuation rates of interest. Reserves for immediate
annuities and supplementary contracts with and without life contingencies are
equal to the present value of future payments assuming interest rates ranging
from 7.00% to 9.25% and mortality rates, where appropriate, from a variety of
tables.
POLICY AND CONTRACT CLAIM RESERVES
Claim reserves represent the estimated accrued liability for claims reported to
the Company and claims incurred but not yet reported through the statement date.
These reserves are estimated using either individual case-basis valuations or
statistical analysis techniques. Because estimates are subject to the effects of
trends in claim severity and frequency, the estimates are continually reviewed
and adjusted as necessary as experience develops or new information becomes
available.
SEPARATE ACCOUNT
Assets held in trust for purchases of variable universal life and variable
annuity contracts and the Company's corresponding obligation to the contract
owners are shown separately in the balance sheets. The assets in the separate
accounts are valued at market. Income and gains and losses with respect to the
assets in the separate accounts accrue to the benefit of the policyholders. The
Company received variable contract premiums of $467,142, $533,536 and $489,243
in 1995, 1994 and 1993, respectively. All variable account contracts are subject
to discretionary withdrawal by the policyholder at the market value of the
underlying assets less the current surrender charge.
RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 and 1993 financial
statements to conform to the 1995 presentation.
2. FAIR VALUES OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments", requires disclosure of fair value information
about financial instruments, whether or not recognized in the statutory-basis
balance sheet, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques are
significantly affected by the assumptions used, including the
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
discount rate and estimates of future cash flows. In that regard, the derived
fair value estimates cannot be substantiated by comparisons to independent
markets and, in many cases, could not be realized in immediate settlement of the
instrument. Statement of Financial Accounting Standards No. 107 excludes certain
financial instruments and all nonfinancial instruments from its disclosure
requirements and allows companies to forego the disclosures when those estimates
can only be made at excessive cost. Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the Company.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS: The carrying amounts
reported in the statutory-basis balance sheet for these instruments
approximate their fair values.
INVESTMENT SECURITIES: Fair values for fixed maturity securities (including
redeemable preferred stocks) are based on quoted market prices, where
available. For fixed maturity securities not actively traded, fair values are
estimated using values obtained from independent pricing services or (in the
case of private placements) are estimated by discounting expected future cash
flows using a current market rate applicable to the yield, credit quality,
and maturity of the investments. The fair values for equity securities are
based on quoted market prices and are recognized in the statutory-basis
balance sheet.
MORTGAGE LOANS AND POLICY LOANS: The fair values for mortgage loans are
estimated utilizing discounted cash flow analyses, using interest rates
reflective of current market conditions and the risk characteristics of the
loans. The fair value of policy loans are assumed to equal their carrying
value.
INVESTMENT CONTRACTS: Fair values for the Company's liabilities under
investment-type insurance contracts are estimated using discounted cash flow
calculations, based on interest rates currently being offered for similar
contracts with maturities consistent with those remaining for the contracts
being valued.
Fair values for the Company's insurance contracts other than investment
contracts are not required to be disclosed. However, the fair values of
liabilities under all insurance contracts are taken into consideration in the
Company's overall management of interest rate risk, which minimizes exposure to
changing interest rates through the matching of investment maturities with
amounts due under insurance contracts.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
2. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONTINUED)
The following sets forth a comparison of the fair values and carrying values of
the Company's financial instruments subject to the provisions of Statement of
Financial Accounting Standards No. 107:
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
---------------------------- ---------------------------
CARRYING CARRYING
VALUE FAIR VALUE VALUE FAIR VALUE
-----------------------------------------------------------
<S> <C> <C> <C> <C>
ADMITTED ASSETS
Bonds $ 452,474 $ 479,656 $ 423,758 $ 414,541
Stocks 834 834 2,555 2,555
Mortgage loans on real estate 6,181 6,536 9,539 7,915
Policy loans 37,125 37,125 27,520 27,520
Cash and short-term investments 4,999 4,999 46,722 46,722
Separate account assets 2,419,205 2,419,205 1,596,736 1,596,736
LIABILITIES
Investment contract liabilities 309,556 279,347 302,890 245,161
Separate account annuities 1,930,590 1,930,590 1,316,237 1,316,237
</TABLE>
3. INVESTMENTS
The carrying value and estimated fair value of investments in debt securities
are as follows:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Bonds:
United States Government and
agencies $ 11,611 $ 64 $129 $ 11,546
State, municipal and other
government 15,079 940 - 16,019
Public utilities 16,143 1,425 - 17,568
Industrial and miscellaneous 219,764 17,444 550 236,658
Mortgage-backed securities 189,877 8,228 240 197,865
---------------------------------------------------------
Total bonds $ 452,474 $28,101 $919 $479,656
=========================================================
</TABLE>
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
Bonds:
United States Government and
agencies $ 11,277 $ 17 $ 1,048 $ 10,246
State, municipal and other
government 13,117 - 423 12,694
Public utilities 13,296 75 432 12,939
Industrial and miscellaneous 238,389 3,668 7,543 234,514
Mortgage-backed securities 147,679 1,597 5,128 144,148
---------------------------------------------------------
Total bonds 423,758 5,357 14,574 414,541
Preferred stock 14 - - 14
---------------------------------------------------------
$ 423,772 $ 5,357 $14,574 $414,555
=========================================================
</TABLE>
Preferred stock required writedowns for the securities not in good standing to
fair values of $64 in 1994.
The carrying value and fair value of bonds at December 31, 1995 by contractual
maturity are shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalties.
ESTIMATED
CARRYING FAIR
VALUE VALUE
--------------------------
Due in one year or less $ 23,820 $ 23,842
Due one through five years 109,362 114,336
Due five through ten years 91,534 101,034
Due after ten years 37,881 42,579
--------------------------
262,597 281,791
Mortgage and other asset backed securities 189,877 197,865
--------------------------
$ 452,474 $479,656
==========================
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
3. INVESTMENTS (CONTINUED)
A detail of net investment income is presented below:
YEAR ENDED DECEMBER 31
1995 1994 1993
----------------------------------
Interest on bonds $38,047 $37,318 $43,744
Dividends on equity investments 30 700 1,533
Interest on mortgage loans 573 616 832
Interest on policy loans 2,353 1,830 1,465
Other investment income 1,919 1,802 1,010
----------------------------------
Gross investment income 42,922 42,266 48,584
Investment expenses (2,031) (2,127) (2,387)
----------------------------------
Net investment income $40,891 $40,139 $46,197
==================================
Proceeds from sales and maturities of debt securities and related gross realized
gains and losses were as follows:
YEAR ENDED DECEMBER 31
1995 1994 1993
-------------------------------------
Proceeds $108,554 $99,241 $203,547
=====================================
Gross realized gains $ 1,631 $ 2,019 $ 7,584
Gross realized losses 1,346 1,362 703
-------------------------------------
Net realized gains $ 285 $ 657 $ 6,881
=====================================
At December 31, 1995, bonds with an aggregate carrying value of $4,483 were on
deposit with certain state regulatory authorities or were restrictively held in
bank custodial accounts for benefit of such state regulatory authorities, as
required by statute.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
3. INVESTMENTS (CONTINUED)
Realized investment gains (losses) and changes in unrealized gains (losses) for
investments are summarized below:
<TABLE>
<CAPTION>
REALIZED
------------------------------------------
YEAR ENDED DECEMBER 31
1995 1994 1993
------------------------------------------
<S> <C> <C> <C>
Debt securities $ 285 $ 657 $6,881
Equity securities - (1,579) -
Mortgage loans (1,409) - -
Real estate - - (37)
------------------------------------------
(1,124) (922) 6,844
Tax effect - 225 (226)
Transfer to interest maintenance reserve (554) (436) (4,270)
------------------------------------------
Net realized gains (losses) $(1,678) $(1,133) $2,348
==========================================
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
------------------------------------
YEAR ENDED DECEMBER 31
1995 1994 1993
------------------------------------
<S> <C> <C> <C>
Debt securities $36,399 $(43,354) $5,598
Common stock (236) 1,009 1,581
------------------------------------
Change in unrealized appreciation (depreciation) $36,163 $(42,345) $7,179
====================================
</TABLE>
Gross unrealized gains (losses) on common stocks were as follows:
UNREALIZED
---------------------------------
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------
Unrealized gains $361 $597 $1,045
Unrealized losses - - 1,457
---------------------------------
Net unrealized gains (losses) $361 $597 $ (412)
=================================
The Company issued no mortgage loans during 1995. The maximum percentage of any
one mortgage loan to the value of the underlying real estate at origination was
73%. The Company requires all mortgagees to carry fire insurance equal to the
value of the underlying property.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
3. INVESTMENTS (CONTINUED)
During 1995, 1994 and 1993, no mortgage loans were foreclosed and transferred to
real estate. During 1994, a mortgage loan loss reserve of $1,033 was
established. This reserve was released in 1995 coincident with the loss
recognition of $1,409 on a loan payoff.
At December 31, 1995, the Company had no investments (excluding U. S. Government
guaranteed or insured issues) which individually represented more than ten
percent of capital and surplus and the asset valuation reserve.
4. REINSURANCE
The Company reinsures portions of certain insurance policies which exceed its
established limits, thereby providing a greater diversification of risk and
minimizing exposure on larger risks. The Company remains contingently liable
with respect to any insurance ceded, and this would become an actual liability
in the event that the assuming insurance company became unable to meet its
obligations under the reinsurance treaty.
1995 1994 1993
--------------------------------------------
Direct premiums $570,413 $600,608 $556,641
Reinsurance assumed 1,569 1,232 1,015
Reinsurance ceded (2,084) (1,708) (1,287)
--------------------------------------------
Net premiums earned $569,898 $600,132 $556,369
============================================
The Company received reinsurance recoveries in the amount of $512, $1,146 and
$1,135 during 1995, 1994 and 1993, respectively. At December 31, 1995 and 1994,
estimated amounts recoverable from reinsurers that have been deducted from
policy and contract claim reserves totaled $2 and $85, respectively. The
aggregate reserves for policies and contracts were reduced for reserve credits
for reinsurance ceded at December 31, 1995 and 1994 of $848 and $807,
respectively.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
5. INCOME TAXES
Federal income tax expense differs from the amount computed by applying the
statutory federal income tax rate to gain from operations before taxes and
realized capital gains (losses) for the following reasons:
<TABLE>
<CAPTION>
1995 1994 1993
----------------------------------
<S> <C> <C> <C>
Computed tax at federal statutory rate (35%) $5,096 $1,190 $2,368
Purchase accounting tax adjustments - - (424)
Deferred acquisition costs - tax basis 4,241 4,043 3,395
Tax reserve valuation (49) (1,353) (817)
Investment income differences 85 (109) (192)
Amortization of IMR (309) (254) (216)
Other, net (147) (111) 92
----------------------------------
Federal income tax expense $8,917 $3,406 $4,206
==================================
</TABLE>
Prior to 1984, as provided for under the Life Insurance Company Tax Act of 1959,
a portion of statutory income was not subject to current taxation, but was
accumulated for income tax purposes in a memorandum account referred to as the
policyholders' surplus account. No federal income taxes have been provided for
in the financial statements on income deferred in the policyholders' surplus
account ($293 at December 31, 1995). To the extent dividends are paid from the
amount accumulated in the policyholders' surplus account, net earnings would be
reduced by the amount of tax required to be paid. Should the entire amount in
the policyholders' surplus account become taxable, the tax thereon computed at
current rates would amount to approximately $103.
In 1995, the Company reached a final settlement with the Internal Revenue
Service for 1987 through 1993 resulting in taxes of $1,275 and interest of $120
(net of $65 tax effect). The assessment was charged to surplus as a prior period
adjustment.
During 1994, the Company settled tax years 1980 through 1986 with the Internal
Revenue Service. The agreed upon settlement totaled $2.26 million in taxes and
interest. The Company's former parent company, Kansas City Southern Industries,
is principally liable for reimbursing this amount to the Company under the terms
of an indemnification agreement made coincident with the sale of the Company. A
charge to surplus of $1.8 million was made as a prior period adjustment related
to this assessment.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
6. POLICY AND CONTRACT ATTRIBUTES
Participating life insurance policies are issued by the Company which entitle
policyholders to a share in the earnings of the participating policies, provided
that a dividend distribution, which is determined annually based on mortality
and persistency experience of the participating policies, is authorized by the
Company. Participating insurance constituted approximately 7.7% and 8.2% of life
insurance in force at December 31, 1995 and 1994, respectively.
A portion of the Company's policy reserves and other policyholders' funds relate
to liabilities established on a variety of the Company's products that are not
subject to significant mortality or morbidity risk; however, there may be
certain restrictions placed upon the amount of funds that can be withdrawn
without penalty. The amount of reserves on these products, by withdrawal
characteristics are summarized as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1995 1994
-------------------- -------------------
PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL
-------------------- --------------------
<S> <C> <C> <C> <C>
Subject to discretionary withdrawal with
market value adjustment $ 13,422 1% $ 12,345 1%
Subject to discretionary withdrawal at
book value less surrender charge 60,970 3 73,733 4
Subject to discretionary withdrawal at
market value 1,930,590 85 1,316,237 81
Subject to discretionary withdrawal at
book value (minimal or no charges or
adjustments) 227,549 10 207,779 13
Not subject to discretionary withdrawal
provision 20,034 1 22,788 1
-------------------- -------------------
2,252,565 100% 1,632,882 100%
========= ========
Less reinsurance ceded - -
---------- -----------
Total policy reserves on annuities and
deposit fund liabilities $2,252,565 $1,632,882
========== ==========
</TABLE>
Reserves on the Company's traditional life products are computed using mean
reserving methodologies. These methodologies result in the establishment of
assets for the amount of the net valuation premiums that are anticipated to be
received between the policy's paid-through date to the policy's next anniversary
date. At December 31, 1995 and 1994, these assets (which are reported as
premiums deferred and uncollected) and the amounts of the related gross premiums
and loadings, are as follows:
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
6. POLICY AND CONTRACT ATTRIBUTES (CONTINUED)
GROSS LOADING NET
----------------------------------
DECEMBER 31, 1995
Ordinary direct first year business $ 47 $ 17 $ 30
Ordinary direct renewal business 1,707 229 1,478
Group life direct business 379 - 379
Reinsurance ceded (100) - (100)
----------------------------------
$2,033 $246 $1,787
==================================
DECEMBER 31, 1994
Ordinary direct first year business $ 46 $ 17 $ 29
Ordinary direct renewal business 1,649 252 1,397
Group life direct business 362 - 362
Reinsurance ceded (25) - (25)
----------------------------------
$2,032 $269 $1,763
==================================
At December 31, 1995 and 1994, the Company had insurance in force aggregating
$2,374 and $3,403, respectively, in which the gross premiums are less than the
net premiums required by the standard valuation standards established by the
Insurance Department of the State of Ohio. The Company established policy
reserves of $32 and $40 to cover these deficiencies at December 31, 1995 and
1994, respectively.
In 1994, the NAIC enacted a guideline to clarify reserving methodologies for
contracts that require immediate payment of claims upon proof of death of the
insured. Companies were allowed to grade the effects of the change in reserving
methodologies over five years. A direct charge to surplus of $3,496 and $450 was
made for the years ended December 31, 1995 and 1994, respectively, related to
the change in reserve methodology.
7. DIVIDEND RESTRICTIONS
Generally, an insurance company's ability to pay dividends is limited to the
amount that their net assets, as determined in accordance with statutory
accounting practices, exceed minimum statutory capital requirements. However,
payment of such amounts as dividends may be subject to approval by regulatory
authorities. The maximum dividend payout which may be made without prior
approval in 1996 is approximately $9,644.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
8. RETIREMENT AND COMPENSATION PLANS
The Company's employees participate in a qualified benefit plan sponsored by
AEGON. The Company has no legal obligation for the plan. The Company recognizes
pension expense equal to its allocation from AEGON. The pension expense is
allocated among the participating companies based on the FASB Statement No. 87
expense as a percent of salaries. The benefits are based on years of service and
the employee's compensation during the highest five consecutive years of
employment. Pension expense aggregated $505, $397 and $249 for the years ended
December 31, 1995, 1994 and 1993, respectively. The plan is subject to the
reporting and disclosure requirements of the Employee Retirement and Income
Security Act of 1974.
The Company's employees also participate in a contributory defined contribution
plan sponsored by AEGON which is qualified under Section 401(k) of the Internal
Revenue Service Code. Employees of the Company who customarily work at least
1,000 hours during each calendar year and meet the other eligibility
requirements, are participants of the plan. Participants may elect to contribute
up to fifteen percent of their salary to the plan. The Company will match an
amount up to three percent of the participant's salary. Participants may direct
all of their contributions and plan balances to be invested in a variety of
investment options. The plan is subject to the reporting and disclosure
requirements of the Employee Retirement and Income Security Act of 1974. Pension
expense related to this plan was $305, $250 and $176 for the years ended
December 31, 1995, 1994 and 1993, respectively.
AEGON sponsors supplemental retirement plans to provide the Company's senior
management with benefits in excess of normal pension benefits. The plans are
noncontributory and benefits are based on years of service and the employee's
compensation level. The plans are unfunded and nonqualified under the Internal
Revenue Code. In addition, AEGON has established incentive deferred compensation
plans for certain key employees of the Company. AEGON also sponsors an employee
stock option plan for individuals employed at least three years and a stock
purchase plan for its producers, with the participating affiliated companies
establishing their own eligibility criteria, producer contribution limits and
company matching formula. These plans have been accrued or funded as deemed
appropriate by management of AEGON and the Company.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
8. RETIREMENT AND COMPENSATION PLANS (CONTINUED)
In addition to pension benefits, the Company participates in plans sponsored by
AEGON that provide postretirement medical, dental and life insurance benefits to
employees meeting certain eligibility requirements. Portions of the medical and
dental plans are contributory. The expenses of the postretirement plans
calculated on the pay-as-you-go basis are charged to affiliates in accordance
with an intercompany cost sharing arrangement. The Company expensed $86, $70 and
$0 for the years ended December 31, 1995, 1994 and 1993, respectively.
9. RELATED PARTY TRANSACTIONS
The Company shares certain officers, employees and general expenses with
affiliated companies.
The Company receives investment advisory and management services from certain
affiliates. During 1995, 1994 and 1993, the Company paid $8,825, $7,497 and
$4,583, respectively, for such services, which approximates their costs to the
affiliates. The Company provides office space, marketing and administrative
services to certain affiliates. During 1995, 1994 and 1993, the Company received
$4,545, $3,261 and $1,900, respectively, for such services, which approximates
their cost. The Company had a receivable (payable) with affiliates of $3,625 and
$(674) at December 31, 1995 and 1994, respectively.
The Company paid a cash dividend to its immediate parent, First AUSA Life
Insurance Company, of $5,600 in 1993, and during 1994 received capital
contributions of $45,000.
The Company has an agreement with an affiliate through which net agents debit
balances are sold for cash. The net non-admitted assets sold during 1995, 1994
and 1993 aggregated $5,887, $3,553 and $4,555, respectively.
At December 31, 1995, the Company has a $6,500 short-term note receivable from
an affiliate. Interest on this note accrues at 5.82%.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Notes to Financial Statements - Statutory-Basis (continued)
(Dollars in thousands)
10. COMMITMENTS AND CONTINGENCIES
The Company is a party to legal proceedings incidental to its business. Although
such litigation sometimes includes substantial demands for compensatory and
punitive damages in addition to contract liability, it is management's opinion,
after consultation with counsel and a review of available facts, that damages
arising from such demands will not be material to the Company's financial
position.
The Company is subject to insurance guaranty laws in the states in which it
writes business. These laws provide for assessments against insurance companies
for the benefit of policyholders and claimants in the event of insolvency of
other insurance companies. Assessments are charged to operations when received
by the Company except where right of offset against other taxes paid is allowed
by law; amounts available for future offsets are recorded as an asset on the
Company's balance sheet. The future obligation has been based on the most recent
information available from the National Organization of Life and Health
Insurance Guaranty Association. Potential future obligations for unknown
insolvencies are not determinable by the Company. The Company has established a
reserve of $4,445 at December 31, 1995 for its estimated share of future
guaranty fund assessments related to several post major insurer insolvencies. An
asset of $1,319 at December 31, 1995 has been recorded relating to anticipated
offsets available for certain state premium taxes to be utilized in future
periods. The guaranty fund expense was $1,950, $618 and $329 at December 31,
1995, 1994 and 1993, respectively.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Summary of Investments Other Than
Investments in Related Parties
(Dollars in thousands)
December 31, 1995
<TABLE>
<CAPTION>
SCHEDULE I
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST (1) VALUE BALANCE SHEET
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds:
United States Government and govern-
ment agencies and authorities $108,398 $112,590 $108,213
Foreign governments 15,196 16,019 15,079
Public utilities 16,179 17,568 16,143
All other corporate bonds 315,676 333,479 313,039
------------------------------------------------
Total fixed maturities 455,449 479,656 452,474
EQUITY SECURITIES
Common stocks:
Industrial, miscellaneous and all other 473 834 834
------------------------------------------------
Total equity securities 473 834 834
Mortgage loans on real estate 6,181 6,536 6,181
Real estate 5,121 5,121 5,121
Policy loans 37,125 37,125 37,125
Cash and short-term investments 4,999 4,999 4,999
------------------------------------------------
Total investments $509,348 $534,271 $506,734
================================================
</TABLE>
(1) Original cost of equity securities and, as to fixed maturities, original
cost reduced by repayments and adjusted for amortization of premiums or
accrual of discounts. Real estate is net of accumulated depreciation.
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Supplementary Insurance Information
(Dollars in thousands)
SCHEDULE III
FUTURE POLICY POLICY AND
BENEFITS AND UNEARNED CONTRACT
EXPENSES PREMIUMS LIABILITIES
---------------------------------------------
YEAR ENDED DECEMBER 31, 1995
Individual life $ 65,259 $41 $5,811
Group life and health 7,904 - 701
Annuity 319,353 - 100
-------------------------------------------
$392,516 $41 $6,612
===========================================
YEAR ENDED DECEMBER 31, 1994
Individual life $ 77,366 $52 $4,501
Group life 7,323 - 481
Annuity 314,124 - 137
-------------------------------------------
$ 398,813 $52 $5,119
===========================================
YEAR ENDED DECEMBER 31, 1993
Individual life $ 78,371 $56 $2,757
Group life 17,380 - 488
Annuity 392,714 - 763
-------------------------------------------
$ 488,465 $56 $4,008
===========================================
<PAGE>
<TABLE>
<CAPTION>
NET BENEFITS OTHER
PREMIUM REVENUE INVESTMENT AND CLAIMS OPERATING PREMIUMS
REVENUE INCOME EXPENSES EXPENSES WRITTEN
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$188,143 $ 9,470 $ 36,066 $ 83,675 $ 99,115
3,365 1,054 2,217 946 780
378,390 30,367 205,375 44,447 342,949
- ----------------------------------------------------------------------------------------------
$569,898 $40,891 $243,658 $129,068 $442,844
==============================================================================================
$147,282 $10,146 $ 29,272 $ 71,807 $ 89,467
3,709 372 1,754 1,329 1,846
449,141 29,621 199,485 44,063 421,176
- ----------------------------------------------------------------------------------------------
$600,132 $40,139 $230,511 $117,199 $512,489
==============================================================================================
$101,621 $10,943 $ 24,086 $ 52,514 $ 62,600
5,387 201 1,293 1,104 4,063
449,361 35,053 86,406 37,740 419,037
- ----------------------------------------------------------------------------------------------
$556,369 $46,197 $111,785 $ 91,358 $485,700
==============================================================================================
</TABLE>
<PAGE>
Western Reserve Life Assurance Co. of Ohio
Reinsurance
(Dollars in thousands)
SCHEDULE IV
<TABLE>
<CAPTION>
ASSUMED PERCENTAGE
CEDED TO FROM OF AMOUNT
GROSS OTHER OTHER NET ASSUMED
AMOUNT COMPANIES COMPANIES AMOUNT TO NET
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
Life insurance in force $21,057,581 $1,365,119 $ - $19,692,462 0.0%
=============================================================================
Premiums:
Individual life $ 189,870 $ 1,727 $ - $ 188,143 0.0%
Group life and health 2,153 357 1,569 3,365 46.6
Annuity 378,390 - - 378,390 0.0
-----------------------------------------------------------------------------
$ 570,413 $ 2,084 $ 1,569 $ 569,898 0.2%
=============================================================================
YEAR ENDED DECEMBER 31, 1994
Life insurance in force $14,321,386 $1,090,845 $1,271,402 $14,501,943 8.8%
=============================================================================
Premiums:
Individual life $ 148,766 $ 1,484 $ - $ 147,282 0.0%
Group life 2,701 224 1,232 3,709 33.0
Annuity 449,141 - - 449,141 0.0
-----------------------------------------------------------------------------
$ 600,608 $ 1,708 $ 1,232 $ 600,132 0.4%
=============================================================================
YEAR ENDED DECEMBER 31, 1993
Life insurance in force $ 9,881,904 $ 851,042 $1,009,201 $10,040,063 10.1%
=============================================================================
Premiums:
Individual life $ 102,817 $ 1,196 $ - $ 101,621 0.0%
Group life 4,463 91 1,015 5,387 18.8
Annuity 449,361 - - 449,361 0.0
-----------------------------------------------------------------------------
$ 556,641 $ 1,287 $ 1,015 $ 556,369 0.2%
=============================================================================
</TABLE>
