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NATIONAL INTEGRITY LIFE INSURANCE COMPANY
NOTICE TO OWNERS OF PORTFOLIO LIFE-TM-FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICIES:
PROPOSED SUBSTITUTION OF PORTFOLIOS
JULY 12, 1999
On July 1, 1999, we asked the Securities and Exchange Commission ("SEC") to
approve the substitution of newly created Portfolios of EQ Advisors Trust for
each of The Hudson River Trust Portfolios currently available under our
Portfolio Life Flexible Premium Variable Life Insurance policies (the "Portfolio
Life Substitution"). The EQ Advisors Trust Portfolios will have substantially
identical investment objectives, strategies, and policies to those of The Hudson
River Trust Portfolios they would replace. The assets of each Hudson River Trust
Portfolio underlying your contract would be transferred to the corresponding EQ
Advisors Trust Portfolio.
The overwhelming portion of The Hudson River Trust's assets are attributable to
variable life insurance policies and annuity contracts issued by The Equitable
Life Assurance Society of the United States ("Equitable") and certain of its
affiliated companies. On April 30, 1999, Equitable and its affiliates filed an
application seeking SEC approval to transfer all of these assets into newly
created Portfolios of EQ Advisors Trust (the "Equitable Substitution"). The
Equitable Substitution, therefore, would, in our opinion, deprive The Hudson
River Trust of the economies of scale and portfolio management flexibility
necessary for it to continue to be a suitable funding medium for our Portfolio
Life policies.
Due to the drastic reduction in the size of The Hudson River Trust as a result
of the Equitable Substitution, we believe that the Portfolio Life Substitution
is in your best interest. The Portfolio Life Substitution should, however, have
little impact on you as a holder of a Portfolio Life policy. Alliance Capital
Management L.P., an Equitable affiliate, currently is the manager of The Hudson
River Trust. EQ Financial Consultants, Inc., also an Equitable affiliate, will
be the manager of the new EQ Advisors Trust Portfolios, and Alliance Capital
Management L.P. will continue to provide the day-to-day advisory services to
each of the new Portfolios.
You should note that:
- No action is required on your part. You will not need to vote a
proxy, file a new election, or take any other action if the SEC
approves the Portfolio Life Substitution.
- The elections you have on file for allocating your account value,
premium payments, and deductions will remain unchanged until you
direct us otherwise.
- You will not bear any expenses relating to the Portfolio Life
Substitution transaction.
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- The management fees for the new Portfolios will be the same as
those for the corresponding Portfolios of The Hudson River Trust.
The new EQ Advisors Trust Portfolios are expected to have slightly
higher expense rations.
- On the effective date of the Portfolio Life Substitution
transaction, your account value in the variable investment options
will be the same as before the transaction.
- The Portfolio Life Substitution will have no tax consequences for
you.
Subject to SEC approval, we expect the Portfolio Life Substitution to be
completed in the fall of 1999. It will affect everyone who has a balance in The
Hudson River Trust Portfolios at that time. Of course, you may transfer amounts
in your policy among the investment options, as usual. The Portfolio Life
Substitution transaction itself will not be treated as a transfer for purposes
of the transfer provisions of your policy.
We will send you a prospectus for the new Portfolios of the EQ Advisors Trust,
and notice of the actual date of the Portfolio Life Substitution, after we
receive SEC approval. You will also receive confirmation when the Portfolio Life
Substitution is complete.
