SAFECO LIFE INSURANCE COMPANY
Safeco Life Variable Annuity Account
Composite Deferred Series, Inc.
Growth & Income Portfolio
Income Portfolio
Northwest Portfolio
Notice of Substitutions
Supplement Dated April 7, 2000
to the
Prospectus Dated May 1, 1998
This is to notify you that SAFECO Life Insurance Company will substitute shares
of portfolios of the SAFECO Resource Series Trust ("RST") for shares of
portfolios of the Composite Deferred Series, Inc. ("CDS") on April 22, 2000, as
follows:
Shares of the RST Growth Portfolio* for shares of the CDS Growth
& Income Portfolio; Shares of the RST Bond Portfolio for shares
of the CDS Income Portfolio; Shares of the RST Northwest
Portfolio for shares of the CDS Northwest Portfolio.
As a result of the substitution, your contract value in portfolios of the
Composite Deferred Series Inc. will be automatically transferred to the
applicable SAFECO Resource Series Trust portfolio. SAFECO Resources Series Trust
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company consisting of six separate portfolios.
The investment adviser for the RST is SAFECO Asset Management Company. These
substitutions were approved by an Order of the Securities and Exchange
Commission issued on December 29, 1999.
Both prior to and after the substitution occurs, you will be able to transfer
among the available investment options without charge. However, the RST
portfolios will not be available investment options prior to April 22, 2000, and
the CDS portfolios will not be available investment options after that date. All
transfers must be at least $1,000 or the entire value in a portfolio.
A confirmation statement showing the amount of your contract value that was
transferred, as a result of the substitution, to the RST Growth Portfolio, RST
Bond Portfolio, and/or RST Northwest Portfolio respectively, will be sent to you
shortly after the substitution is completed. Please review the confirmation and
the enclosed prospectuses for RST Growth Portfolio, RST Bond Portfolio, and the
RST Northwest Portfolio.
Expense ratios for these RST portfolios are currently higher than the
corresponding expense ratios of the CDS portfolios. To prevent owners with
contract values allocated to the CDS portfolios as of April 22, 2000, from
paying higher expenses as a result of the substitution, SAFECO Life will reduce
the mortality and expense charge for affected owners to the extent necessary to
offset the amount by which the respective RST portfolio expense ratio, after the
substitution, exceeds the 1998 expense ratio of the CDS portfolio it replaced
SAFECO Life guarantees that this mortality and expense risk charge reduction
will remain in effect until January 1, 2003. After this date, SAFECO Life will
waive any remaining contingent deferred sales charge applicable to the
contracts.
Included with the prospectuses for the substituted RST portfolios are
prospectuses for additional portfolios of the SAFECO Resource Series Trust. The
RST Equity Portfolio and the RST Small Company Stock Portfolio** will be made
available to you as investment options under your contract as of April 22, 2000.
The reduction in the mortality and expense charge does not apply to these two
RST portfolios. The RST Money Market Portfolio will not be made available
under your contract at this time.
*Effective May 1, 2000, the RST Growth Portfolio will change its name to RST
Growth Opportunities Portfolio.
**Effective May 1, 2000, the RST Small Company Stock Portfolio will change its
name to RST Small Company Value Portfolio.
