As filed with the Securities and Exchange Registration No. 33-64277
Commission on August 14, 1997 Registration No. 811-4536
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
- --------------------------------------------------------------------------------
Variable Life Account B of Aetna Life Insurance and Annuity Company
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
Depositor's Telephone Number, including Area Code: (860) 273-4686
- --------------------------------------------------------------------------------
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Name and Complete Address of Agent for Service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
--------
X on August 21, 1997 pursuant to paragraph (b) of Rule 485
--------
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has registered an indefinite number of securities under the Securities Act of
1933. Registrant filed a Rule 24f-2 Notice for the fiscal year ended December
31, 1996 on February 28, 1997.
<PAGE>
VARIABLE LIFE ACCOUNT B
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Cross Reference Sheet
N-8B-2 Part 1 (Prospectus Dated May 1, 1997 and as Amended by
Item No. Supplement dated August 21, 1997)
- -------- ---------------------------------
1 Cover Page, and as amended; The Separate Account; The
Company
2 Cover Page, and as amended; The Separate Account; The
Company
3 Not Applicable
4 Cover Page, and as amended; The Company; Additional
Information - Distribution of the Policy;
5 The Separate Account; The Company
6 The Separate Account; The Company
7 Not Applicable
8 Financial Statements
9 Additional Information - Legal Matters
10 The Separate Account; Charges and Fees, and as amended;
Policy Choices, and as amended; Policy Values; Policy
Rights; Additional Information
11 Allocation of Premiums, and as amended - Fund Additions,
Deletions or Substitutions; Policy Choices, and as amended
12 Cover Page, and as amended; Allocation of Premiums, and as
amended - The Funds
13 Charges & Fees, and as amended; Additional Information -
Distribution of the Policy
14 Policy Values; Additional Information; Miscellaneous
Policy Provisions
15 Policy Summary; Allocation of Premiums, and as amended;
Policy Choices, and as amended; Policy Values
16 Policy Summary; Allocation of Premiums, and as amended -
The Funds; Policy Values
17 Policy Rights
18 Allocation of Premiums, and as amended; Policy Choices,
and as amended; Policy Rights; Tax Matters
19 Additional Information - Reports to Policy Owners
<PAGE>
N-8B-2 Part 1 (Prospectus Dated May 1, 1997 and as Amended by
Item No. Supplement dated August 21, 1997)
- -------- ---------------------------------
20 Not Applicable
21 Policy Rights - Policy Loans
22 Not Applicable
23 Directors & Officers, and as amended
24 Not Applicable
25 The Company
26 Charges and Fees, and as amended
27 The Company
28 Directors & Officers, and as amended
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Additional Information - State Regulation
36 Not Applicable
37 Not Applicable
38 Additional Information - Distribution of the Policy
39 The Company
40 Charges and Fees, and as amended
41 The Company
42 Director and Officers, and as amended
43 Financial Statements
44 Policy Values; Financial Statements
45 Not Applicable
46 The Separate Account; Policy Values
47 The Separate Account; Policy Choices, and as amended;
Policy Values
48 Not Applicable
<PAGE>
N-8B-2 Part 1 (Prospectus Dated May 1, 1997 and as Amended by
Item No. Supplement dated August 21, 1997)
- -------- ---------------------------------
49 Not Applicable
50 The Separate Account
51 Cover Page, and as amended; Policy Choices, and as amended
52 The Separate Account; Allocation of Premiums, and as
amended - Fund Additions, Deletions or Substitutions
53 Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
<PAGE>
PART I
The Prospectus is incorporated into Part I of this Post-Effective Amendment No.
2, respectively, by reference to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-6 (File No. 33-64277), as filed electronically
on April 22, 1997.
<PAGE>
Supplement to Prospectus Dated May 1, 1997
AetnaVest Estate Protector
Aetna Life Insurance and Annuity Company
Variable Life Account B
The prospectus dated May 1, 1997 is amended as follows:
Cover:
The following Funds will be replaced with the designated Substitute Funds
after the close of business of the New York Stock Exchange on November 26,
1997:
<TABLE>
<CAPTION>
Replaced Fund Substitute Fund
<S> <C>
Scudder Variable Life Investment Fund-- Portfolio Partners Scudder International
International Portfolio Class A Shares Growth Portfolio
American Century VP Capital Appreciation Portfolio Partners MFS Research Growth
(Formerly TCI Growth) Portfolio
Alger American Small Capitalization Portfolio Portfolio Partners MFS Emerging Equities Portfolio
Janus Aspen Short-Term Bond Portfolio Aetna Variable Encore Fund (money market)
</TABLE>
SUBJECT TO COMPLETION OR AMENDMENT
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
The Date of this Supplement is August 21, 1997
Form No. X64277-97
1
<PAGE>
Prospectus - Page 4
The table under Charges & Fees--Charges Assessed Against the Underlying
Funds is amended by deleting the Replaced Funds and adding the following
Substitute Funds:
<TABLE>
<CAPTION>
Investment
Advisory Fees Other Expenses
(after expense (after expense Total Annual
reimbursement) reimbursement) Fund Expenses
<S> <C> <C> <C>
Portfolio Partners Scudder International Growth Portfolio ...... .80% .20% 1.00%(1)
Portfolio Partners MFS Emerging Equities Portfolio ............ .70%(2) .13% .83%(1)
Portfolio Partners MFS Research Growth Portfolio ............... .70%(2) .15% .85%(1)
</TABLE>
(1) The Company has agreed to reimburse the Fund for expenses and/or waive its
fees so that the aggregate expenses will not exceed this amount through April
30, 1999. Without such reimbursements or waivers, Total Annual Fund Expenses
are estimated to be as follows: 1.00% for the Scudder International Growth
Portfolio; .87% for the MFS Emerging Equities Portfolio; and .92% for the MFS
Research Growth Portfolio.
(2) The advisory fee is .70% of the first $500 million in assets and .65% on the
excess.
Prospectus - Page 6
In the Section Allocation of Premiums, the Substitute Funds will take the
place of the Replaced Funds after the close of business of the New York Stock
Exchange on November 26, 1997. Any amounts allocated to the Replaced Funds will
automatically be allocated to the Substitute Funds after that date. The
following will be added:
Portfolio Partners Scudder International Growth Portfolio seeks long-term
growth of capital primarily through a diversified portfolio of marketable
foreign equity securities.
Portfolio Partners MFS Emerging Equities Portfolio seeks long-term growth
of capital by investing primarily in common stocks issued by companies that its
subadviser believes are early in their life cycle but which have the potential
to become major enterprises (emerging growth companies).
Portfolio Partners MFS Research Growth Portfolio seeks long-term growth of
capital and future income by investing primarily in common stocks or securities
convertible into common stocks issued by companies that the subadviser believes
to possess better-than-average prospects for long-term growth, and, to a lesser
extent, in income-producing securities including bonds and preferred stock.
Aetna Life Insurance and Annuity Company serves as the investment adviser
to each Portfolio. Scudder, Stevens & Clark, Inc. serves as the subadviser to
the Scudder International Growth Portfolio, and Massachusetts Financial
Services Company serves as the subadviser to the MFS Emerging Equities and MFS
Research Growth Portfolios.
Prospectus - Page 11
The Section in the prospectus discussing Policy Choices is amended by
adding the following to the Subsection on Automated Transfers (Dollar Cost
Averaging):
Amounts being transferred into a Replaced Fund will automatically be
transferred into the Substitute Fund after the close of business of the New
York Stock Exchange on November 26, 1997, unless you have been dollar cost
averaging from the Aetna Variable Encore Fund into the Janus Aspen Short-Term
Bond Portfolio. In that event, your Dollar Cost Averaging will automatically
terminate after November 26, 1997. To continue with Dollar Cost Averaging after
that date, you must select Funds from the then-current list of available Funds.
2
<PAGE>
Prospectus - Page 19--Directors and Officers
The list of directors and officers under Directors and Officers is amended
by deleting Laura R. Estes, Gail P. Johnson and Creed R. Terry from the list.
Prospectus - Page 28--Illustrations of Death Benefit, Total Account Values and
Surrender Values.
The tables have been revised as follows to reflect the applicable fund
expenses of the Substitute Funds instead of the Replaced Funds.
Illustrations of Death Benefit, Total Account Values and Surrender Values
The following pages provide a hypothetical illustration of how the Death
Benefit, Total Account Values, and Surrender Values of a Policy can change over
time for a Policy issued to two opposite gender 45-year-old Insureds if the
investment return on the assets held in each Fund were a uniform, gross, annual
rate of 0%, 6%, and 12%, respectively, and are based upon a number of
assumptions.
There are two pages of values. One page illustrates the assumption that the
Guaranteed Maximum Cost of Insurance rates and other charges at guaranteed
rates are charged in all years. The other page illustrates the assumption that
the current scale of Cost of Insurance rates and other charges at current rates
are charged in all years. The Cost of Insurance rates vary by age and sex
(where permitted by state law).
The values shown in these illustrations vary according to assumptions used for
charges and gross rates of investment returns. The actual investment returns
experienced by the Policy and the charges deducted may be higher or lower than
those illustrated. The charges reflected on the first page consist of the
maximum allowable charges under the Policy, including 0.90% for mortality and
expense risks in all Policy Years and 12.35% for Premium Loads; the first page
also reflects 0.71% for expenses of the Funds based on the allocation described
below. The charges reflected on the second page consist of the current charges
imposed under the Policy, including 0.85% for mortality and expense risks in
Policy Years 1 through 20 only and 12.35% for Premium Loads; the second page
also reflects 0.71% for Fund expenses based on the allocation described below.
The charge for Fund expenses reflected in the illustrations assumes that Total
Account Values have been allocated equally among all Funds that will be
available under the Policy after November 26, 1997 and represent a fixed
average of the investment advisory fees and other expenses charged by each of
the Funds.
After deduction of these amounts, the illustrated gross annual investment rates
of return of 0%, 6%, and 12% correspond to approximate net annual rates of
- -1.56%, 4.44% and 10.44%, respectively, during the first 20 Policy Years, and
- -.71%, 5.29%, and 11.29%, respectively, thereafter on a current basis. On a
guaranteed basis, the illustrated gross annual investment rates of return of
0%, 6% and 12% correspond to approximate net annual rates of -1.61%, 4.39% and
10.39%, respectively.
The Death Benefit, Total Account Values, and Surrender Values would be
different from those shown if the gross annual investment rates of return
averaged 0%, 6%, and 12% over a period of years, but fluctuated above and below
those averages for individual Policy Years. The illustrations also assume that
premiums are paid as indicated, no Policy Loans are made, no increases or
decreases in Specified Amount are requested, no Death Benefit Option changes,
and no Partial Surrenders are made.
The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since We are not currently making such
charges. However, such charges may be made in the future, and in that event,
the gross annual investment rate of return would have to exceed 0%, 6%, or 12%
by an amount sufficient to cover the tax charges in order to produce the Death
Benefit, Total Account Values, and Surrender Values illustrated.
3
<PAGE>
Upon request, We will provide a comparable personalized illustration based upon
the age, sex (if necessary), and underwriting classification of the proposed
Insureds, including the Specified Amount and premium requested, the proposed
frequency of premium payments and any available riders requested. A fee of $25
may be charged for each such illustration. The hypothetical gross annual
investment return assumed in such an illustration will not exceed 12%.
4
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS
FEMALE AND MALE ISSUE AGE 45 SELECT NONSMOKER RISK
$2,688 ANNUAL GUARANTEED DEATH BENEFIT TO
THE YOUNGER INSURED'S AGE 100 PREMIUM
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
GUARANTEED CHARGES
<TABLE>
<CAPTION>
Premiums
Accumulated Death Benefit
at Gross Annual
5% Interest Investment Return of
Year per Year Gross 0.0% Gross 6.0% Gross 12.0%
<S> <C> <C> <C> <C>
1 2,822 250,000 250,000 250,000
2 5,786 250,000 250,000 250,000
3 8,898 250,000 250,000 250,000
4 12,165 250,000 250,000 250,000
5 15,596 250,000 250,000 250,000
6 19,198 250,000 250,000 250,000
7 22,980 250,000 250,000 250,000
8 26,951 250,000 250,000 250,000
9 31,121 250,000 250,000 250,000
10 35,500 250,000 250,000 250,000
15 60,903 250,000 250,000 250,000
20 93,325 250,000 250,000 273,675
25 134,705 250,000 250,000 393,638
30 187,517 250,000 250,000 550,738
20 (Age 65) 93,325 250,000 250,000 273,675
</TABLE>
<TABLE>
<CAPTION>
Total Account Value Cash Surrender Value*
Annual Investment Return of Annual Investment Return of
Year Gross 0.0% Gross 6.0% Gross 12.0% Gross 0.0% Gross 6.0% Gross 12.0%
<S> <C> <C> <C> <C> <C> <C>
1 1,346 1,456 1,566 782 892 1,002
2 3,379 3,707 4,049 2,780 3,108 3,450
3 5,372 6,050 6,783 2,066 2,744 3,477
4 7,326 8,488 9,792 3,380 4,542 5,846
5 9,239 11,023 13,105 5,535 7,319 9,401
6 11,109 13,659 16,750 7,647 10,197 13,288
7 12,937 16,397 20,761 9,717 13,177 17,541
8 14,719 19,239 25,173 11,741 16,261 22,195
9 16,452 22,186 30,024 13,716 19,450 27,288
10 18,134 25,239 35,357 15,640 22,745 32,863
15 25,632 42,113 71,084 24,347 40,828 69,799
20 30,932 61,460 128,427 30,932 61,460 128,427
25 31,818 81,980 218,348 31,818 81,980 218,348
30 23,283 100,675 354,582 23,283 100,675 354,582
20 (Age 65) 30,932 61,460 128,427 30,932 61,460 128,427
</TABLE>
Assumes no Policy loan has been made. Guaranteed cost of insurance rates
assumed. Maximum mortality and expense risk and administrative expense charges.
If premiums are paid more frequently than annually, the Death Benefit
could be, and the Account Values and Surrender Values would be, less than those
illustrated.
These investment results are illustrative only and should not be
considered a representation of past or future investment results.
Actual investment results may be more or less than those shown and will
depend on a number of factors including the Policyowner's allocations, and the
Fund's rates of return. The total Account Value and Surrender Value for a
Policy would be different from those shown if the actual investment rates of
return averaged 0%, 6%, and 12% over a period of years, but fluctuated above or
below those averages for individual Policy years. No representations can be
made that these rates of return will definitely be achieved for any one year or
sustained over a period of time.
*The Cash Surrender Values reflect the application of the maximum
Surrender Charge under the Contract and allowed in most states. The Surrender
Charge may be limited to a lower amount in certain states.
5
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ON THE LIVES OF TWO INSUREDS
FEMALE AND MALE ISSUE AGE 45 SELECT NONSMOKER RISK
$2,688 ANNUAL GUARANTEED DEATH BENEFIT TO
THE YOUNGER INSURED'S AGE 100 PREMIUM
FACE AMOUNT $250,000
DEATH BENEFIT OPTION 1
CURRENT CHARGES
<TABLE>
<CAPTION>
Premiums
Accumulated Death Benefit
at Gross Annual
5% Interest Investment Return of
Year per Year Gross 0.0% Gross 6.0% Gross 12.0%
<S> <C> <C> <C> <C>
1 2,822 250,000 250,000 250,000
2 5,786 250,000 250,000 250,000
3 8,898 250,000 250,000 250,000
4 12,165 250,000 250,000 250,000
5 15,596 250,000 250,000 250,000
6 19,198 250,000 250,000 250,000
7 22,980 250,000 250,000 250,000
8 26,951 250,000 250,000 250,000
9 31,121 250,000 250,000 250,000
10 35,500 250,000 250,000 250,000
15 60,903 250,000 250,000 250,000
20 93,325 250,000 250,000 291,728
25 134,705 250,000 250,000 436,643
30 187,517 250,000 250,000 634,956
20 (Age 65) 93,325 250,000 250,000 291,728
</TABLE>
<TABLE>
<CAPTION>
Total Account Value Cash Surrender Value*
Annual Investment Return of Annual Investment Return of
Year Gross 0.0% Gross 6.0% Gross 12.0% Gross 0.0% Gross 6.0% Gross 12.0%
<S> <C> <C> <C> <C> <C> <C>
1 1,466 1,580 1,694 902 1,016 1,130
2 3,618 3,961 4,318 3,019 3,362 3,719
3 5,729 6,441 7,210 2,423 3,135 3,904
4 7,800 9,024 10,396 3,854 5,078 6,450
5 9,829 11,711 13,904 6,125 8,007 10,200
6 11,816 14,507 17,767 8,354 11,045 14,305
7 13,758 17,413 22,021 10,538 14,193 18,801
8 15,653 20,433 26,702 12,675 17,455 23,724
9 17,500 23,567 31,854 14,764 20,831 29,118
10 19,295 26,817 37,522 16,801 24,323 35,028
15 27,345 44,849 75,593 26,060 43,564 74,308
20 33,190 65,721 136,899 33,190 65,721 136,899
25 36,319 92,156 242,202 36,319 92,156 242,202
30 30,125 120,496 408,805 30,125 120,496 408,805
20 (Age 65) 33,190 65,721 136,899 33,190 65,721 136,899
</TABLE>
Assumes no Policy loan has been made. Current cost of insurance rates
assumed. Current mortality and expense risk and administrative expense charges.
If premiums are paid more frequently than annually, the Death Benefit
could be, and the Account Values and Surrender Values would be, less than those
illustrated.
These investment results are illustrative only and should not be
considered a representation of past or future investment results.
Actual investment results may be more or less than those shown and will
depend on a number of factors including the Policyowner's allocations, and the
Fund's rates of return. The total Account Value and Surrender Value for a
Policy would be different from those shown if the actual investment rates of
return averaged 0%, 6%, and 12% over a period of years, but fluctuated above or
below those averages for individual Policy years. No representations can be
made that these rates of return will definitely be achieved for any one year or
sustained over a period of time.
*The Cash Surrender Values reflect the application of the maximum
Surrender Charge under the Contract and allowed in most states. The Surrender
Charge may be limited to a lower amount in certain states.
6
<PAGE>
Financial Statements
Following are the unaudited financial statements as of March 31, 1997 for
Variable Life Account B and Aetna Life Insurance and Annuity Company.
VARIABLE LIFE ACCOUNT B
FINANCIAL STATEMENTS
Index
<TABLE>
<S> <C>
Statement of Assets and Liabilities as of March 31, 1997 (unaudited) ............... S-2
Statements of Operations and Changes in Net Assets for the three months
ended March 31, 1997 and March 31, 1996 (unaudited) .............................. S-4
Condensed Financial Information for the three months ended March 31, 1997 (unaudited) S-5
Notes to Financial Statements -- March 31, 1997 (unaudited) ......................... S-8
</TABLE>
S-1
<PAGE>
Variable Life Account B
Statement of Assets and Liabilities--March 31, 1997 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at net asset value: (Note 1)
Aetna Variable Fund; 2,960,415 shares (cost $89,278,680) ........................ $ 97,909,299
Aetna Income Shares; 1,045,713 shares (cost $13,363,458) ........................ 13,165,731
Aetna Variable Encore Fund; 1,227,381 shares (cost $15,807,543) .................. 15,746,491
Aetna Investment Advisers Fund, Inc.; 1,091,726 shares (cost $15,188,940) ......... 16,429,385
Aetna Ascent Variable Portfolio; 68,622 shares (cost $854,021) .................. 863,923
Aetna Crossroads Variable Portfolio; 16,359 shares (cost $197,046) ............... 196,092
Aetna Legacy Variable Portfolio; 4,996 shares (cost $56,579) ..................... 56,152
Alger American Small Capitalization Portfolio; 345,556 shares (cost $14,099,553) 12,460,754
American Century VP Capital Appreciation Fund; 652,426 shares (cost $6,893,822) ... 5,558,671
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio; 818,103 shares (cost $15,998,533) ..................... 15,683,029
Growth Portfolio; 187,282 shares (cost $5,537,815) .............................. 5,489,224
Overseas Portfolio; 32,503 shares (cost $569,345) .............................. 577,577
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio; 97,944 shares (cost $1,506,123) ........................ 1,461,329
Contrafund Portfolio; 527,095 shares (cost $8,030,087) ........................... 8,328,106
Janus Aspen Series:
Aggressive Growth Portfolio; 595,943 shares (cost $10,670,058) .................. 9,541,046
Balanced Portfolio; 287,055 shares (cost $4,047,436) ........................... 4,320,181
Growth Portfolio; 530,993 shares (cost $7,746,679) .............................. 8,278,181
Short-Term Bond Portfolio; 390,958 shares (cost $3,872,649) ..................... 3,944,763
Worldwide Growth Portfolio; 656,748 shares (cost $12,087,431) .................. 13,561,854
Scudder Variable Life Investment Fund--
International Portfolio; 847,331 shares (cost $10,042,514) ..................... 11,193,242
-------------
NET ASSETS (cost $235,848,312) ................................................... $244,765,030
=============
Net assets represented by:
Policyholders' account values: (Notes 1 and 5)
Aetna Variable Fund:
Policyholders' account values ................................................... $ 97,909,299
Aetna Income Shares:
Policyholders' account values ................................................... 13,165,731
Aetna Variable Encore Fund:
Policyholders' account values ................................................... 15,746,491
Aetna Investment Advisers Fund, Inc.:
Policyholders' account values ................................................... 16,429,385
Aetna Ascent Variable Portfolio:
Policyholders' account values ................................................... 863,923
Aetna Crossroads Variable Portfolio:
Policyholders' account values ................................................... 196,092
</TABLE>
S-2
<PAGE>
Variable Life Account B
Statement of Assets and Liabilities--March 31, 1997 (unaudited & continued):
Aetna Legacy Variable Portfolio:
Policyholders' account values .............................. $ 56,152
Alger American Small Capitalization Portfolio:
Policyholders' account values .............................. 12,460,754
American Century VP Capital Appreciation Fund:
Policyholders' account values .............................. 5,558,671
Fidelity Investments Variable Insurance Products Fund:
Equity-Income Portfolio:
Policyholders' account values .............................. 15,683,029
Growth Portfolio:
Policyholders' account values .............................. 5,489,224
Overseas Portfolio:
Policyholders' account values .............................. 577,577
Fidelity Investments Variable Insurance Products Fund II:
Asset Manager Portfolio:
Policyholders' account values .............................. 1,461,329
Contrafund Portfolio:
Policyholders' account values .............................. 8,328,106
Janus Aspen Series:
Aggressive Growth Portfolio:
Policyholders' account values .............................. 9,541,046
Balanced Portfolio:
Policyholders' account values .............................. 4,320,181
Growth Portfolio:
Policyholders' account values .............................. 8,278,181
Short-Term Bond Portfolio:
Policyholders' account values .............................. 3,944,763
Worldwide Growth Portfolio:
Policyholders' account values .............................. 13,561,854
Scudder Variable Life Investment Fund--International Portfolio:
Policyholders' account values .............................. 11,193,242
-------------
$244,765,030
=============
See Notes to Financial Statements
S-3
<PAGE>
Variable Life Account B
Statements of Operations and Changes in Net Assets
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
(Unaudited) (Unaudited)
-------------------- -------------------
INVESTMENT INCOME:
<S> <C> <C>
Income: (Notes 1, 3 and 5)
Dividends ...................................................... $ 2,905,983 $ 359,401
Expenses: (Notes 2 and 5)
Valuation Period Deductions .................................... (335,872) (216,034)
------------ ------------
Net investment income .......................................... 2,570,111 143,367
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on sales of investments: (Notes 1, 4 and 5)
Proceeds from sales ............................................. 15,319,304 3,428,998
Cost of investments sold ....................................... 14,300,603 3,005,963
------------ ------------
Net realized gain ............................................. 1,018,701 423,035
Net unrealized gain (loss) on investments: (Note 5)
Beginning of period ............................................. 14,132,669 4,391,574
End of period ................................................... 8,916,718 9,478,418
------------ ------------
Net change in unrealized gain (loss) ........................... (5,215,951) 5,086,844
------------ ------------
Net realized and unrealized gain (loss) on investments ......... (4,197,250) 5,509,879
------------ ------------
Net (decrease) increase in net assets resulting from operations (1,627,139) 5,653,246
------------ ------------
FROM UNIT TRANSACTIONS:
Variable life premium payments ................................. 32,286,413 21,128,211
Sales and administrative charges deducted by the Company ......... (1,105,628) (632,971)
Premiums allocated to the fixed account ........................ (706,230) (1,644,459)
------------ ------------
Net premiums allocated to the variable account .................. 30,474,555 18,850,781
Transfers to the Company for monthly deductions .................. (4,828,049) (3,306,575)
Redemptions by contract holders ................................. (2,187,917) (1,152,122)
Transfers on account of policy loans ........................... (187,877) (422,131)
Other ............................................................ (52,426) 43,265
------------ ------------
Net increase in net assets from unit transactions (Note 5) ...... 23,218,286 14,013,218
------------ ------------
Change in net assets ............................................. 21,591,147 19,666,464
NET ASSETS:
Beginning of period ............................................. 223,173,883 126,515,779
------------ ------------
End of period ................................................... $244,765,030 $146,182,243
============ ============
</TABLE>
See Notes to Financial Statements
S-4
<PAGE>
Variable Life Account B
Condensed Financial Information--Three Months Ended March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Value
Per Unit Increase
(Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- -------------------- ------------
<S> <C> <C> <C> <C>
Aetna Variable Fund:
Aetna Vest ........................ $34.932 $35.579 1.85% $52,790,404
Aetna Vest II ..................... 19.507 19.868 1.85% 15,918,571
Aetna Vest Plus .................. 16.389 16.692 1.85% 24,193,440
Aetna Vest Estate Protector ...... 11.675 11.896 1.89% 343,196
Corporate Specialty Market ...... 14.805 15.080 1.85% 4,663,688
Aetna Income Shares:
Aetna Vest ........................ $21.850 $21.739 (0.51%) 5,779,308
Aetna Vest II ..................... 14.691 14.616 (0.51%) 964,510
Aetna Vest Plus .................. 11.764 11.704 (0.51%) 1,573,435
Aetna Vest Estate Protector ...... 10.452 10.403 (0.47%) 110,600
Corporate Specialty Market ...... 11.354 11.297 (0.51%) 4,737,878
Aetna Variable Encore Fund:
Aetna Vest ........................ $16.577 $16.743 1.00% 2,617,424
Aetna Vest II ..................... 12.117 12.238 1.00% 162,807
Aetna Vest Plus .................. 11.388 11.502 1.00% 5,475,885
Aetna Vest Estate Protector ...... 10.333 10.441 1.04% 391,865
Corporate Specialty Market ...... 10.895 11.004 1.00% 7,098,510
Aetna Investment Advisers Fund, Inc.:
Aetna Vest ........................ $17.547 $17.424 (0.70%) 1,901,583
Aetna Vest II ..................... 17.742 17.618 (0.70%) 4,157,201
Aetna Vest Plus .................. 14.880 14.775 (0.70%) 6,002,453
Aetna Vest Estate Protector ...... 11.340 11.086 (2.24%) (1) 2,571
Corporate Specialty Market ...... 12.954 12.863 (0.70%) 4,365,577
Aetna Ascent Variable Portfolio:
Aetna Vest ........................ $11.828 $11.771 (0.48%) 135,740
Aetna Vest II ..................... 11.828 11.771 (0.48%) 99,315
Aetna Vest Plus .................. 11.828 11.771 (0.48%) 626,288
Aetna Vest Estate Protector ...... 11.886 11.789 (0.82%) (2) 2,580
Aetna Crossroads Variable
Portfolio:
Aetna Vest ........................ $11.474 $11.453 (0.18%) 28,023
Aetna Vest II ..................... 11.544 11.453 (0.79%) (1) 1,917
Aetna Vest Plus .................. 11.474 11.453 (0.18%) 165,657
Aetna Vest Estate Protector ...... 11.487 11.470 (0.14%) 495
Aetna Legacy Variable Portfolio:
Aetna Vest II ..................... $11.263 $11.076 (1.66%) (2) 9,557
Aetna Vest Plus .................. 11.118 11.076 (0.38%) 46,595
</TABLE>
S-5
<PAGE>
Variable Life Account B
Condensed Financial Information--Three Months Ended March 31, 1997 (unaudited &
continued)
<TABLE>
<CAPTION>
Increase
Value Per Unit (Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- -------------- ------------
<S> <C> <C> <C> <C>
Alger American Small
Capitalization Portfolio:
Aetna Vest ........................ $16.051 $14.113 (12.07%) 1,043,585
Aetna Vest II ..................... 16.052 14.114 (12.07%) 635,959
Aetna Vest Plus .................. 16.043 14.106 (12.07%) 5,680,005
Aetna Vest Estate Protector ...... 9.982 8.780 (12.04%) 253,395
Corporate Specialty Market ...... 13.201 11.607 (12.07%) 4,847,810
American Century VP Capital
Appreciation Fund:
Aetna Vest ........................ $12.534 $10.646 (15.06%) 840,154
Aetna Vest II ..................... 12.590 10.694 (15.06%) 310,402
Aetna Vest Plus .................. 12.419 10.548 (15.06%) 3,515,587
Aetna Vest Estate Protector ...... 9.511 8.082 (15.03%) 2,691
Corporate Specialty Market ...... 11.358 9.647 (15.06%) 889,837
Fidelity Investments Variable
Insurance Products Fund:
Equity-Income Portfolio:
Aetna Vest ........................ $10.871 $10.968 0.90% 87,359
Aetna Vest II ..................... 10.871 10.968 0.90% 48,971
Aetna Vest Plus .................. 10.871 10.968 0.90% 2,014,106
Aetna Vest Estate Protector ...... 10.883 10.985 0.93% 252,126
Corporate Specialty Market ...... 12.512 12.624 0.90% 13,280,467
Growth Portfolio:
Corporate Specialty Market ...... $11.255 $10.952 (2.69%) 5,489,224
Overseas Portfolio:
Corporate Specialty Market ...... $11.241 $11.578 2.99% 577,577
Fidelity Investments Variable
Insurance Products Fund II:
Asset Manager Portfolio:
Corporate Specialty Market ...... $12.022 $11.987 (0.30%) 1,461,329
Contrafund Portfolio:
Aetna Vest ........................ $11.525 $11.309 (1.88%) 305,794
Aetna Vest II ..................... 11.525 11.309 (1.88%) 94,053
Aetna Vest Plus .................. 11.525 11.309 (1.88%) 1,620,391
Aetna Vest Estate Protector ...... 11.538 11.326 (1.84%) 158,332
Corporate Specialty Market ...... 12.396 12.164 (1.88%) 6,149,536
Janus Aspen Series:
Aggressive Growth Portfolio:
Aetna Vest ........................ $16.153 $14.143 (12.44%) 737,026
Aetna Vest II ..................... 16.153 14.143 (12.44%) 458,338
</TABLE>
S-6
<PAGE>
Variable Life Account B
Condensed Financial Information--Three Months Ended March 31, 1997 (unaudited &
continued):
<TABLE>
<CAPTION>
Increase
Value Per Unit (Decrease)
in Value of Reserves
Beginning End of Accumulation at End
of Period Period Unit of Period
----------- --------- ----------------- -----------
<S> <C> <C> <C> <C>
Aetna Vest Plus .................. $16.153 $14.143 (12.44%) $3,517,794
Aetna Vest Estate Protector ...... 9.797 8.581 (12.41%) 311,336
Corporate Specialty Market ...... 12.120 10.611 (12.44%) 4,516,552
Balanced Portfolio:
Aetna Vest ........................ $13.966 $14.196 1.64% $ 97,246
Aetna Vest II ..................... 14.075 14.306 1.64% 84,618
Aetna Vest Plus .................. 13.960 14.189 1.64% 2,082,733
Aetna Vest Estate Protector ...... 11.101 11.288 1.68% 35,062
Corporate Specialty Market ...... 12.242 12.443 1.64% 2,020,522
Growth Portfolio:
Aetna Vest ........................ $14.898 $14.938 0.27% $ 541,273
Aetna Vest II ..................... 14.884 14.924 0.27% 1,002,167
Aetna Vest Plus .................. 14.863 14.903 0.27% 4,160,826
Aetna Vest Estate Protector ...... 10.857 10.890 0.31% 146,512
Corporate Specialty Market ...... 12.232 12.265 0.27% 2,427,403
Short-Term Bond Portfolio:
Aetna Vest ........................ $11.289 $11.397 0.95% $ 6,924
Aetna Vest II ..................... 11.277 11.385 0.95% 1,372
Aetna Vest Plus .................. 11.247 11.354 0.95% 273,539
Aetna Vest Estate Protector ...... 10.389 10.465 0.73% (1) 1,539
Corporate Specialty Market ...... 10.468 10.568 0.95% 3,661,389
Worldwide Growth Portfolio:
Aetna Vest ........................ $16.364 $17.339 5.96% $1,547,127
Aetna Vest II ..................... 16.368 17.344 5.96% 940,957
Aetna Vest Plus .................. 16.348 17.322 5.96% 6,185,375
Aetna Vest Estate Protector ...... 11.811 12.519 6.00% 310,828
Corporate Specialty Market ...... 13.459 14.262 5.96% 4,577,567
Scudder Variable Life Investment
Fund--International Portfolio:
Aetna Vest ........................ $14.543 $14.813 1.86% $2,402,152
Aetna Vest II ..................... 14.453 14.722 1.86% 675,216
Aetna Vest Plus .................. 14.373 14.640 1.86% 5,406,958
Aetna Vest Estate Protector ...... 10.898 11.105 1.90% 99,911
Corporate Specialty Market ...... 12.043 12.267 1.86% 2,609,005
</TABLE>
Notes to Condensed Financial Information:
(1)--Reflects less than a full year of performance activity. Funds were
first received in this option during January 1997.
(2)--Reflects less than a full year of performance activity. Funds were
first received in this option during February 1997.
S-7
<PAGE>
Variable Life Account B
Notes to Financial Statements--March 31, 1997 (Unaudited):
1. Summary of Significant Accounting Policies
Variable Life Account B ("Account") is a separate account established by
Aetna Life Insurance and Annuity Company and is registered under the
Investment Company Act of 1940 as a unit investment trust. The Account is
sold exclusively for use with variable life insurance product contracts as
defined under the Internal Revenue Code of 1986, as amended.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported therein. Although actual results
could differ from these estimates, any such differences are expected to be
immaterial to the net assets of the Account.
a. Valuation of Investments
Investments in the following Funds are stated at the closing net asset
value per share as determined by each fund on March 31, 1997:
Aetna Variable Fund Fidelity Investments Variable
Aetna Income Shares Insurance Products Fund II:
Aetna Variable Encore Fund [bullet] Asset Manager Portfolio
Aetna Investment Advisers Fund, Inc. [bullet] Contrafund Portfolio
Aetna Ascent Variable Portfolio Janus Aspen Series:
Aetna Crossroads Variable Portfolio [bullet] Aggressive Growth Portfolio
Aetna Legacy Variable Portfolio [bullet] Balanced Portfolio
Alger American Small Capitalization [bullet] Growth Portfolio
Portfolio [bullet] Short-Term Bond Portfolio
American Century VP Capital [bullet] Worldwide Growth Portfolio
Appreciation Fund Scudder Variable Life Investment
Fidelity Investments Variable Fund--International Portfolio
Insurance Products Fund:
[bullet] Equity-Income Portfolio
[bullet] Growth Portfolio
[bullet] Overseas Portfolio
b. Other
Other Investment transactions are accounted for on a trade date basis and
dividend income is recorded on the ex-dividend date. The cost of
investments sold is determined by specific identification.
c. Federal Income Taxes
The operations of the Account form a part of, and are taxed with, the total
operations of Aetna Life Insurance and Annuity Company ("Company") which is
taxed as a life insurance company under the Internal Revenue Code of 1986,
as amended.
2. Valuation Period Deductions
Deductions by the Account for mortality and expense risk charges are made
in accordance with the terms of the policies and are paid to the Company.
S-8
<PAGE>
Variable Life Account B
Notes to Financial Statements--March 31, 1997 (unaudited & continued):
3. Dividend Income
On an annual basis the Funds distribute substantially all of their taxable
income and realized capital gains to their shareholders. Distributions paid
to the Account are automatically reinvested in shares of the Funds. The
Account's proportionate share of each Fund's undistributed net investment
income (distributions in excess of net investment income) and accumulated
net realized gain (loss) on investments is included in net unrealized gain
(loss) on investments in the Statements of Operations and Changes in Net
Assets.
4. Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments other than
short-term investments for the three months ended March 31, 1997 and 1996
aggregated $41,107,702 and $15,319,304 and $17,583,396 and $3,428,998,
respectively.
S-9
<PAGE>
Variable Life Account B
Notes to Financial Statements--March 31, 1997 (unaudited & continued):
5. Supplemental Information to Statements of Operations and Changes in Net
Assets--Three-Months Ended March 31, 1997
<TABLE>
<CAPTION>
Valuation Proceeds Cost of Net
Period from Investments Realized
Dividends Deductions Sales Sold Gain (Loss)
------------ --------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Aetna Variable Fund:
PolicyHolder's account values ............... $ 0 $ (138,689) $ 2,085,493 $ 1,533,994 $ 551,499
Aetna Income Shares:
PolicyHolders' account values ............... 0 (19,010) 862,682 883,816 (21,134)
Aetna Variable Encore Fund:
PolicyHolder's account values ............... 372,968 (15,420) 5,214,143 5,282,921 (68,778)
Aetna Investment Advisers Fund, Inc.:
PolicyHolder's account values ............... 0 (23,413) 326,908 270,907 56,001
Aetna Ascent Variable Portfolio:
PolicyHolder's account values ............... 0 (1,012) 719,965 718,546 1,419
Aetna Crossroads Variable Portfolio:
PolicyHolder's account values ............... 0 (219) 151,692 151,595 97
Aetna Legacy Variable Portfolio:
PolicyHolder's account values ............... 0 (45) 31,294 31,283 11
Alger American Small Capitalization Portfolio:
PolicyHolder's account values ............... 0 (18,952) 1,610,023 1,464,966 145,057
American Century VP Capital Appreciation Fund:
PolicyHolder's account values ............... 132,455 (9,411) 628,578 573,692 54,886
Fidelity Investments Variable Insurance
Products Fund:
Equity-Income Portfolio:
PolicyHolder's account values ............... 1,485,715 (20,823) 95,203 90,944 4,259
Growth Portfolio:
PolicyHolder's account values ............... 192,233 (7,619) 105,973 100,096 5,877
Overseas Portfolio:
PolicyHolder's account values ............... 46,706 (768) 6,580 5,914 666
Fidelity Investments Variable Insurance
Products Fund II:
Asset Manager Portfolio:
PolicyHolder's account values ............... 175,953 (2,076) 36,869 35,726 1,143
Contrafund Portfolio:
PolicyHolder's account values ............... 235,708 (10,954) 181,301 150,422 30,879
Janus Aspen Series:
Aggressive Growth Portfolio:
PolicyHolder's account values ............... 0 (13,717) 2,488,643 2,394,608 94,035
Balanced Portfolio:
PolicyHolder's account values ............... 0 (5,499) 141,829 115,577 26,252
Growth Portfolio:
PolicyHolder's account values ............... 0 (11,143) 130,246 96,623 33,623
Short-Term Bond Portfolio:
PolicyHolder's account values ............... 0 (5,429) 30,221 29,518 703
Worldwide Growth Portfolio:
PolicyHolder's account values ............... 0 (16,324) 128,784 88,357 40,427
Scudder Variable Life Investment Fund -
International Portfolio:
PolicyHolder's account values ............... 264,245 (15,349) 342,877 281,098 61,779
----------- ----------- ------------ ------------ ----------
Total Variable Life Account B ............... $2,905,983 $ (335,872) $15,319,304 $14,300,603 $1,018,701
=========== =========== ============ ============ ==========
</TABLE>
S-10
<PAGE>
<TABLE>
<CAPTION>
Net Increase
Net Unrealized Net (Decrease) In
Gain (Loss) Change in Net Assets Net Assets
Beginning End Unrealized from Unit Beginning End
of Period of Period Gain (Loss) Transactions of Period of Period
- --------------- --------------- ---------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
$ 7,294,643 $ 8,630,619 $ 1,335,976 $ 3,288,887 $ 92,871,626 $ 97,909,299
(190,180) (197,727) (7,547) 33,635 13,179,787 13,165,731
106,394 (61,052) (167,446) 6,532,982 9,092,185 15,746,491
1,383,931 1,240,445 (143,486) 748,742 15,791,541 16,429,385
15,645 9,902 (5,743) 323,881 545,378 863,923
(191) (954) (763) 73,285 123,692 196,092
20 (427) (447) 42,670 13,963 56,152
172,057 (1,638,799) (1,810,856) 1,059,422 13,086,083 12,460,754
(146,911) (1,335,151) (1,188,240) 86,456 6,482,525 5,558,671
1,096,283 (315,504) (1,411,787) 2,315,452 13,310,213 15,683,029
294,867 (48,591) (343,458) 589,662 5,052,529 5,489,224
37,941 8,232 (29,709) 28,355 532,327 577,577
134,978 (44,794) (179,772) 55,895 1,410,186 1,461,329
730,883 298,019 (432,864) 1,593,647 6,911,690 8,328,106
249,074 (1,129,012) (1,378,086) 1,175,887 9,662,927 9,541,046
243,163 272,745 29,582 695,501 3,574,345 4,320,181
566,478 531,502 (34,976) 1,116,030 7,174,647 8,278,181
26,773 72,114 45,341 76,300 3,827,848 3,944,763
872,277 1,474,423 602,146 3,020,469 9,915,136 13,561,854
1,244,544 1,150,728 (93,816) 361,128 10,615,255 11,193,242
----------- ------------ ------------ ------------ ------------- -------------
$14,132,669 $ 8,916,718 $ (5,215,951) $23,218,286 $223,173,883 $244,765,030
=========== ============ ============ ============ ============= =============
</TABLE>
S-11
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
<TABLE>
<CAPTION>
Page
<S> <C>
Consolidated Statements of Income for the three months ended March 31, 1997 and 1996 F-2
(unaudited) .
Consolidated Balance Sheets as of March 31, 1997 (unaudited) and December 31, 1996 ...... F-3
Consolidated Statements of Changes in Shareholder's Equity for the three months ended
March 31, 1997 and 1996 (unaudited) ................................................ F-4
Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996
(unaudited) ........................................................................ F-5
Condensed Notes to Consolidated Financial Statements as of March 31, 1997 (unaudited) ... F-7
</TABLE>
F-1
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Income
(millions)
(unaudited)
3 Months Ended
March 31,
------------------
1997 1996
-------- -------
Revenue:
Premiums $ 52.3 $ 34.0
Charges assessed against policyholders 109.7 92.0
Net investment income 267.8 257.6
Net realized capital gains 5.0 14.9
Other income 9.7 12.2
------- -------
Total revenue 444.5 410.7
Benefits and expenses:
Current and future benefits 272.0 236.9
Operating expenses 78.2 87.2
Amortization of deferred policy acquisition costs 19.9 17.5
------- -------
Total benefits and expenses 370.1 341.6
Income before income taxes 74.4 69.1
Income taxes 24.0 20.6
------- -------
Net income $ 50.4 $ 48.5
======= =======
See Condensed Notes to Consolidated Financial Statements.
F-2
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Balance Sheets
(millions, except share data)
<TABLE>
<CAPTION>
(unaudited)
March 31, December 31,
Assets 1997 1996
- ------ ------------ -------------
<S> <C> <C>
Investments:
Debt securities, available for sale, at fair value
(amortized cost: $12,378.5 and $12,539.1) $12,428.6 $12,905.5
Equity securities, available for sale:
Non-redeemable preferred stock (cost: $141.3 and $107.6) 152.1 119.0
Investment in affiliated mutual funds (cost: $64.2 and $77.3) 67.9 81.1
Common stock (cost: $0.0 and $0.0) 0.1 0.3
Short-term investments 45.5 34.8
Mortgage loans 12.9 13.0
Policy loans 408.4 399.3
---------- ----------
Total investments 13,115.5 13,553.0
Cash and cash equivalents 758.9 459.1
Accrued investment income 185.3 159.0
Premiums due and other receivables 32.6 26.6
Deferred policy acquisition costs 1,560.1 1,515.3
Reinsurance loan to affiliate 593.7 628.3
Other assets 32.6 33.7
Separate Accounts assets 16,460.1 15,318.3
---------- ----------
Total assets $32,738.8 $31,693.3
========== ==========
Liabilities and Shareholder's Equity
- ------------------------------------
Liabilities:
Future policy benefits $ 3,613.3 $ 3,617.0
Unpaid claims and claim expenses 37.4 28.9
Policyholders' funds left with the Company 10,529.2 10,663.7
---------- ----------
Total insurance reserve liabilities 14,179.9 14,309.6
Other liabilities 392.8 354.7
Income taxes:
Current 29.1 20.7
Deferred 62.1 80.5
Separate Accounts liabilities 16,460.1 15,318.3
---------- ----------
Total liabilities 31,124.0 30,083.8
---------- ----------
Shareholder's equity:
Common stock, par value $50 (100,000 shares authorized; 55,000
shares issued and outstanding) 2.8 2.8
Paid-in capital 418.0 418.0
Net unrealized capital gains 13.6 60.5
Retained earnings 1,180.4 1,128.2
---------- ----------
Total shareholder's equity 1,614.8 1,609.5
---------- ----------
Total liabilities and shareholder's equity $32,738.8 $31,693.3
========== ==========
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
F-3
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Changes in Shareholder's Equity
(millions)
(unaudited)
3 Months Ended March 31,
-----------------------------
1997 1996
------------- -------------
Shareholder's equity, beginning of year $ 1,609.5 $ 1,583.0
Net change in unrealized capital gains (46.9) (75.9)
Net income 50.4 48.5
Other changes 1.8 -
--------- ---------
Shareholder's equity, end of period $ 1,614.8 $ 1,555.6
========= =========
See Condensed Notes to Consolidated Financial Statements.
F-4
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Cash Flows
(millions)
<TABLE>
<CAPTION>
(unaudited)
3 Months Ended March 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 50.4 $ 48.5
Adjustments to reconcile net income to net cash
provided by (used for) operating activities:
Increase in accrued investment income (26.3) (10.9)
(Increase) decrease in premiums due and other receivables (3.2) 0.5
Increase in policy loans (9.1) (6.0)
Increase in deferred policy acquisition costs (44.8) (34.3)
Decrease in reinsurance loan to affiliate 34.6 9.5
Net increase in universal life account balances 63.6 53.0
Decrease in other insurance reserve liabilities (22.0) (52.4)
Net decrease in other liabilities and other assets (4.9) (85.3)
Increase in income taxes 18.4 11.8
Net accretion of discount on investments (16.9) (16.9)
Net realized capital gains (5.0) (14.9)
---------- ----------
Net cash provided by (used for) operating activities 34.8 (97.4)
---------- ----------
Cash Flows from Investing Activities:
Proceeds from sales of:
Debt securities available for sale 1,380.4 1,634.8
Equity securities 14.8 48.7
Mortgage loans 0.1 --
Investment maturities and collections of:
Debt securities available for sale 227.4 255.4
Short-term investments 10.4 10.0
Cost of investment purchases in:
Debt securities available for sale (1,376.5) (1,918.0)
Equity securities (33.8) (26.1)
Short-term investments (21.1) (19.5)
---------- ----------
Net cash provided by (used for) investing activities 201.7 (14.7)
---------- ----------
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
F-5
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Consolidated Statements of Cash Flows (Continued)
(millions)
<TABLE>
<CAPTION>
(unaudited)
3 Months Ended March 31,
---------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash Flows from Financing Activities:
Deposits and interest credited for investment contracts 390.2 429.9
Withdrawals of investment contracts (326.9) (332.0)
--------- ---------
Net cash provided by financing activities 63.3 97.9
--------- ---------
Net increase (decrease) in cash and cash equivalents 299.8 (14.2)
Cash and cash equivalents, beginning of period 459.1 568.8
--------- ---------
Cash and cash equivalents, end of period $ 758.9 $ 554.6
========= =========
Supplemental cash flow information:
Income taxes paid, net $ 9.4 $ 12.0
========= =========
</TABLE>
See Condensed Notes to Consolidated Financial Statements.
F-6
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements
(unaudited)
1. Basis of Presentation
The consolidated financial statements include Aetna Life Insurance and Annuity
Company and its wholly owned subsidiaries, Aetna Insurance Company of America
and Aetna Private Capital, Inc. (collectively, the "Company"). Aetna Life
Insurance and Annuity Company is a wholly owned subsidiary of Aetna Retirement
Holdings, Inc. ("HOLDCO"). HOLDCO is a wholly owned subsidiary of Aetna
Retirement Services, Inc., whose ultimate parent is Aetna Inc. ("Aetna").
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and are unaudited. Certain
reclassifications have been made to 1996 financial information to conform to
the 1997 presentation. These interim statements necessarily rely heavily on
estimates, including assumptions as to annualized tax rates. In the opinion of
management, all adjustments necessary for a fair statement of results for the
interim periods have been made. All such adjustments are of a normal, recurring
nature. The accompanying condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and related
notes as presented in the Company's 1996 Annual Report on Form 10-K. Certain
financial information that is normally included in annual financial statements
prepared in accordance with generally accepted accounting principles, but that
is not required for interim reporting purposes, has been condensed or omitted.
2. Future Application of Accounting Standards
Financial Accounting Standard ("FAS") No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, was issued in
June 1996 and provides accounting and reporting standards for transfers of
financial assets and extinguishments of liabilities.
FAS No. 125 is effective for 1997 financial statements; however, certain
provisions relating to accounting for repurchase agreements and securities
lending are not effective until January 1, 1998. Provisions effective in 1997
did not have a material effect on the Company's financial position or results
of operations. The Company does not expect adoption of this statement for
provisions effective in 1998 to have a material effect on its financial
position or results of operations.
3. Financial Instruments
The Company engages in hedging activities to manage interest rate and price
risks. Such hedging activities have principally consisted of using off-balance
sheet instruments such as futures and forward contracts and interest rate swap
agreements. There were no such contracts or agreements open as of March 31,
1997.
4. Severance and Facilities Charges
In the second quarter of 1996, the Company was allocated severance and
facilities reserves from Aetna to reflect actions taken or to be taken to
reduce the level of corporate expenses and other costs previously absorbed by
Aetna's property-casualty operations.
F-7
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY AND SUBSIDIARIES
(A wholly owned subsidiary of Aetna Retirement Holdings, Inc.)
Condensed Notes to Consolidated Financial Statements (Continued)
(unaudited)
4. Severance and Facilities Charges (Continued)
In the third quarter of 1996, the Company established severance and facilities
reserves in the Financial Services and Individual Life Insurance segments to
reflect actions taken or to be taken in order to make its businesses more
competitive.
Activity for the three months ended March 31, 1997 within the severance and
facilities reserves (pretax, in millions) and positions eliminated related to
such actions were as follows:
Reserve Positions
---------- ----------
Balance at December 31, 1996 ...... $ 47.9 524
Actions taken (1) .................. (10.9) (88)
-------- -----
Balance at March 31, 1997 ......... $ 37.0 436
======== =====
(1) Includes $6.3 million of the Company's severance-related actions and $3.9
million of corporate allocation-related actions.
The Company's severance actions are expected to be substantially completed by
March 31, 1998. The corporate allocation actions and vacating of certain leased
office space are expected to be substantially completed in 1997.
5. Related Party Transactions
Effective December 31, 1988, the Company entered into a reinsurance agreement
with Aetna Life Insurance Company ("Aetna Life") in which substantially all of
the non-participating individual life and annuity business written by Aetna
Life prior to 1981 was assumed by the Company. Effective January 1, 1997, this
agreement has been amended to transition (based on underlying investment
rollover in Aetna Life) from a modified coinsurance to a coinsurance
arrangement. As a result of this change, reserves will be ceded to the Company
from Aetna Life as investment rollover occurs and the loan previously
established will be reduced.
6. Litigation
The Company is involved in numerous lawsuits arising, for the most part, in the
ordinary course of its business operations. While the ultimate outcome of
litigation against the Company cannot be determined at this time, after
consideration of the defenses available to the Company and any related reserves
established, it is not expected to result in liability for amounts material to
the financial condition of the Company, although it may adversely affect
results of operations in future periods.
Form No. X64277-97
F-8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKING PURSUANT TO RULE 484
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A) OF
THE INVESTMENT COMPANY ACT OF 1940
Aetna Life Insurance and Annuity Company represents that the fees and charges
deducted under the policies covered by this registration statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the insurance company.
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 2 TO
REGISTRATION STATEMENT
This Post-Effective Amendment No. 2 to Registration Statement No. 33-64277 is
comprised of the following papers and documents:
(bullet) The facing sheet.
(bullet) One Supplement to the Prospectus for the AetnaVest Estate Protector
Variable Life Insurance Policy consisting of 26 pages
(bullet) The undertaking to file reports
<PAGE>
(bullet) The undertaking pursuant to Rule 484
(bullet) Representation pursuant to Section 26(e)(2)(A) of the Investment
Company Act of 1940
(bullet) The signatures
(bullet) Written consents of the following persons:
A. Consent of Counsel (included as part of Exhibit No. 2 below)
B. Actuarial Consent (included as part of Exhibit No. 6 below)
C. Consent of Independent Auditors (included as Exhibit No. 7 below)
The following Exhibits:
1. Exhibits required by paragraph A of instructions to exhibits for
Form N-8B-2:
(1) Resolution establishing Variable Life Account B(1)
(2) Not Applicable
(3)(i) Master General Agent Agreement(1)
(3)(ii) Life Insurance General Agent Agreement(1)
(3)(iii) Broker Agreement(1)
(3)(iv) Life Insurance Broker-Dealer Agreement(1)
(4) Not Applicable
(5)(i) Form of AetnaVest Estate Protector Policy (70225-95)(2)
(5)(ii) Form of Disability Benefit Rider(2)
(5)(iii) Form of Four Year Term Rider(2)
(5)(iv) Form of Split Option Amendment Rider(2)
(6)(i) Certificate of Incorporation and By-laws of Aetna Life
Insurance and Annuity Company(3)
(6)(ii) Amendment of Certificate of Incorporation of Aetna Life
Insurance and Annuity Company(4)
(7) Not Applicable
(8)(i) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company, Variable Insurance
Products Fund and Fidelity Distributors Corporation
dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996
and March 1, 1996(4)
(8)(ii) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company, Variable Insurance
Products Fund II and Fidelity Distributors Corporation
dated February 1, 1994 and amended on December 15,
1994, February 1, 1995, May 1, 1995, January 1, 1996
and March 1,1996(4)
(8)(iii) Service Agreement between Aetna Life Insurance and
Annuity Company and Fidelity Investments Institutional
Operations Company dated as of November 1, 1995(6)
(8)(iv) Fund Participation Agreement between Aetna Life
Insurance and Annuity Company and Janus Aspen Series
dated April 19, 1994 and amended March 1, 1996(5)
<PAGE>
(9) Not Applicable
(10)(i) Form of Application (70059)(7)
(10)(ii) Supplement to Form of Application(2)
(10)(iii) Supplement (70268-97) to Form of Application No.
70059(8)
(11) Issuance, Transfer and Redemption Procedures(9)
2. Opinion and Consent of Counsel
3. Not Applicable
4. Not Applicable
5. See Item No. (27)
6. Actuarial Opinion and Consent
7. Consent of Independent Auditors
8. Copy of Power of Attorney(10)
(27) Financial Data Schedule
1. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on
February 16, 1996.
2. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 33-64277), as filed electronically on
November 15, 1995.
3. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed electronically on April
15, 1996.
4. Incorporated by reference to Post-Effective Amendment No. 12 to
Registration Statement on Form N-4 (File No. 33-75964), as filed
electronically on February 11, 1997
5. Incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996.
6. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-88720), as filed electronically on June
28, 1996.
7. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form S-6 (File No. 33-2339), as filed on April 25, 1995.
8. Incorporated by reference to Registration Statement on Form S-6 (File No.
333-27337), as filed electronically on May 16, 1997.
9. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 33-64277), as filed electronically on June
3, 1996.
10. Incorporated by reference to Post-Effective Amendment No. 8 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on July
14, 1997. In addition a certified copy of the resolution adopted by the
Depositor's Board of Directors authorizing filings pursuant to a power of
attorney as required by Rule 478 under the Securities Act of 1933 is
incorporated by reference to Post-Effective Amendment No. 5 to Registration
Statement on Form N-4 (File No. 33-75986), as filed electronically on April
12, 1996.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Variable Life Account B of Aetna Life Insurance and
Annuity Company, certifies that it meets the requirements of Securities Act Rule
485(b) for effectiveness of this Post-Effective Amendment No. 2 to its
Registration Statement on Form S-6 (File No. 33-64277) and has caused this
Post-Effective Amendment No. 2 to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized and the seal of the
Depositor to be hereunto affixed and attested, all in the City of Hartford,
State of Connecticut, on the 14th day of August, 1997.
VARIABLE LIFE ACCOUNT B OF
AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(Registrant)
(SEAL)
ATTEST: /s/ Kirk P. Wickman
------------------------------
Kirk P. Wickman
Secretary
By: AETNA LIFE INSURANCE AND
ANNUITY COMPANY
(Depositor)
By: Daniel P. Kearney*
----------------------------------
Daniel P. Kearney
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 2 to the Registration Statement on Form S-6 (File No. 33-64277)
has been signed below by the following persons in the capacities indicated and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
Daniel P. Kearney* Director and President )
- ------------------------------------ (Principal Executive Officer) )
Daniel P. Kearney )
)
Christopher J. Burns* Director ) August
- ------------------------------------ )
Christopher J. Burns ) 14, 1997
)
<PAGE>
J. Scott Fox* Director )
- ------------------------------------ )
J. Scott Fox )
)
Timothy A. Holt* Director )
- ------------------------------------ )
Timothy A. Holt )
)
John Y. Kim* Director )
- ------------------------------------ )
John Y. Kim )
)
Shaun P. Mathews* Director )
- ------------------------------------ )
Shaun P. Mathews )
)
Glen Salow* Director )
- ------------------------------------ )
Glen Salow )
)
Deborah Koltenuk* Vice President and Treasurer, Corporate Controller )
- ------------------------------------ )
Deborah Koltenuk )
</TABLE>
By: /s/ Julie E. Rockmore
------------------------------------------------------------
*Julie E. Rockmore
Attorney-in-Fact
<PAGE>
VARIABLE LIFE ACCOUNT B
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
99-1.1 Resolution of the Board of Directors of Aetna Life Insurance and Annuity *
Company establishing Variable Life Account B
99-1.3(i) Master General Agent Agreement *
99-1.3(ii) Life Insurance General Agent Agreement *
99-1.3(iii) Broker-Dealer Agreement *
99-1.3(iv) Life Insurance Broker-Dealer Agreement *
99-1.5(i) Form of AetnaVest Estate Protector Policy (70225-95) *
99-1.5(ii) Form of Disability Benefit Rider *
99-1.5(iii) Form of Four Year Term Rider *
99-1.5(iv) Form of Split Option Amendment Rider *
99-1.6(i) Certification of Incorporation and By-Laws of Depositor *
99-1.6(ii) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity *
Company
99-1.8(i) Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994 and
amended on December 15, 1994, February 1, 1995, May 1, 1995,
January 1, 1996 and March 1, 1996
99-1.8(ii) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Variable Insurance Products Fund II *
and Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996 and March 1,1996
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-1.8(iii) Service Agreement between Aetna Life Insurance and Annuity Company and *
Fidelity Investments Institutional Operations Company dated as of November 1,
1995
99-1.8(iv) Fund Participation Agreement between Aetna Life Insurance and Annuity Company *
and Janus Aspen Series dated April 19, 1994 and amended March 1, 1996
99-1.10(i) Form of Application (70059) *
99-1.10(ii) Supplement to Form of Application *
99-1.10(iii) Supplement (70268-97) to Form of Application No. 70059 *
99-1.11 Issuance, Transfer and Redemption Procedures *
99-2 Opinion and Consent of Counsel
------------------
99-6 Actuarial Opinion and Consent
------------------
99-7 Consent of Independent Auditors
------------------
99-8 Copy of Power of Attorney *
99-27 Financial Data Schedule
------------------
</TABLE>
*Incorporated by reference
[Aetna letterhead] 151 Farmington Avenue
Hartford, CT 06156
Julie E. Rockmore
Counsel
Law Division, RE4A
August 14, 1997 Investments & Financial Services
(860) 273-4686
Fax: (860) 273-8340
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Aetna Life Insurance and Annuity Company and its
Variable Life Account B
Post-Effective Amendment No. 2 to Registration
Statement on Form S-6
Prospectus Title: AetnaVest Estate Protector
File Nos. 33-64277 and 811-4536
Dear Sir or Madam:
The undersigned serves as counsel to Aetna Life Insurance and Annuity Company, a
Connecticut life insurance company (the "Company"). It is my understanding that
the Company, as depositor, has registered an indefinite amount of securities
(the "Securities") under the Securities Act of 1933 (the "Securities Act") as
provided in Rule 24f-2 under the Investment Company Act of 1940 (the "Investment
Company Act").
In connection with this opinion, I have reviewed the S-6 Registration Statement,
as amended to date hereof, and this Post-Effective Amendment No. 2. I have also
examined originals or copies, certified or otherwise identified to my
satisfaction, of such documents, trust records and other instruments I have
deemed necessary or appropriate for the purpose of rendering this opinion. For
purposes of such examination, I have assumed the genuineness of all signatures
on original documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, and do not purport to be an expert
on the laws of any other state. My opinion herein as to any other law is based
upon a limited inquiry thereof which I have deemed appropriate under the
circumstances.
<PAGE>
Based upon the foregoing, I am of the opinion that the Securities have been
legally authorized and, assuming that the Securities have been issued and sold
in accordance with the provisions of the prospectus being registered, will be
legally issued.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Julie E. Rockmore
Julie E. Rockmore
[Aetna letterhead] 151 Farmington Avenue
Hartford, CT 06156
Jo-Anne Rankin, FSA, MAAA
Pricing Actuary
Life Products Group, TN41
(860) 273-4436
Fax: (860) 273-4438
June 26, 1997
Re: AetnaVest Estate Protector (File No. 33-64277)
Dear Sir or Madam:
In my capacity as Actuary of Aetna Life Insurance and Annuity Company (ALIAC), I
have provided actuarial advice concerning ALIAC's AetnaVest Estate Protector
Flexible Premium Variable Life Insurance on the Lives of Two Insureds (the
"Policy"). I also provided actuarial advice concerning the preparation of
Post-Effective Amendment No. 2 to Registration Statement on Form S-6, File No.
33-64277 (the "Registration Statement") for filing with the Securities and
Exchange Commission under the Securities Act of 1933 in connection with the
Policy.
In my opinion the illustrations of benefits under the Policy included in the
prospectus under the caption "Illustrations of Death Benefit, Total Account
Values and Surrender Values" are, based on the assumptions stated in the
illustrations, consistent with the provisions of the Policy. Also, in my opinion
the age selected in the illustrations is representative of the manner in which
the Policy operates.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Jo-Anne Rankin
Jo-Anne Rankin
Pricing Actuary
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors of Aetna Life Insurance and Annuity Company and
Policyholders of Aetna Variable Life Account B:
We consent to the use of our reports dated February 4, 1997 and February 14,
1997 incorporated herein by reference in registration statement (No. 33-64277)
on Form S-6.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
August 14, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000785986
<NAME> Aetna Variable Life Account B
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 235,848,312
<INVESTMENTS-AT-VALUE> 244,765,030
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 244,765,030
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 244,765,030
<DIVIDEND-INCOME> 2,905,983
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 335,872
<NET-INVESTMENT-INCOME> 2,570,111
<REALIZED-GAINS-CURRENT> 1,018,701
<APPREC-INCREASE-CURRENT> (5,215,951)
<NET-CHANGE-FROM-OPS> (1,627,139)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000785986
<NAME> Aetna Variable Life Account B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 209,041,214
<INVESTMENTS-AT-VALUE> 223,173,883
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 223,173,883
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 223,173,883
<DIVIDEND-INCOME> 13,813,478
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 1,905,137
<NET-INVESTMENT-INCOME> 11,908,341
<REALIZED-GAINS-CURRENT> 3,222,616
<APPREC-INCREASE-CURRENT> 9,741,095
<NET-CHANGE-FROM-OPS> 24,872,052
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
