August 8, 1995
Dear Contract Owners,
The first half of 1995 proved to be a very exciting time for investors. We
watched the S&P 500 reach record highs, returning about 22% from the start of
this year. Not to be bested, the Dow Jones Industrial Average kept pace, also
increasing about 22%. And, almost hidden in the stock market revelry were
stellar performances in the bond market supported by robust earnings reports.
Amidst all the excitement, it's easy to forget we started off this year the
same way we ended 1994: with another increase in the Federal Funds rate.
Early in the year, the Federal Reserve instituted a quarter-point increase
with hopes of orchestrating a "soft landing" and warding off any signs of
inflation. Indeed, it appears their attempts may have been successful, and in
July, they lowered the Fed Funds rate a quarter point, sending the market
into a buying frenzy and to new market highs.
We only need to look at several factors to understand what drove the market
over the first half of this year. First, there was the ardent demand for
stocks in the technology sector, an area that is characterized by many as the
new industrial revolution. Next, strong earnings reports bolstered the
confidence of portfolio managers and individual investors alike. And finally,
individual investors continued to pour money into mutual funds at an
unprecedented pace.
<PAGE>
Of course, it is to individual investors such as yourself to whom we write
today. What follows is a report from Dan Smith, who oversees the Strategy
Asset Allocation Model, and reports from the portfolio managers along with the
performance data of each portfolio.
Sincerely,
L. J. Stensrud
President & CEO
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995
ASSETS
INVESTMENTS:
<S> <C>
VAN KAMPEN MERRITT SERIES TRUST:
Quality Income Portfolio - 4,572,751 shares at a net asset value of $10.58 per share (cost $47,876,240) $ 48,378,816
High Yield Portfolio - 2,892,631 shares at a net asset value of $10.26 per share (cost $30,711,238) 29,690,025
Growth and Income Portfolio - 1,102,470 shares at a net asset value of $11.81 per share (cost $12,037,243) 13,017,993
Money Market Portfolio - 38,870,001 shares at a net asset value of $1.00 per share (cost $38,870,000) 38,776,396
Stock Index Portfolio - 4,848,761 shares at a net asset value of $12.58 per share (cost $54,941,075) 60,986,890
LORD ABBETT SERIES FUND, INC:
Growth and Income Portfolio - 9,703,791 shares at a net asset value of $14.93 per share (cost $124,264,345) 144,875,869
Global Equity Portfolio -246,567 shares at a net asset value of $11.03 per share (cost $2,635,439) 2,720,064
------------
TOTAL ASSETS $338,446,053
============
LIABILITIES AND CONTRACT OWNERS' EQUITY
FEES PAYABLE TO COVA FINANCIAL SERVICES LIFE INSURANCE COMPANY $ 129,861
CONTRACT OWNERS' EQUITY:
Trust Quality Income - 3,324,067 accumulation units at $14.549356 per unit 48,363,041
Trust High Yield - 1,610,128 accumulation units at $18.432488 per unit 29,678,657
Trust Growth and Income -1,011,290 accumulation units at $12.867739 per unit 13,013,014
Trust Money Market - 3,476,178 accumulation units at $11.149775 per unit 38,758,607
Trust Stock Index - 4,388,609 accumulation units at $13.891256 per unit 60,963,293
Fund Growth and Income - 7,459,263 accumulation units at $19.414863 per unit 144,820,566
Fund Global Equity - 208,860 accumulation units at $13.018357 per unit 2,719,014
------------
TOTAL CONTRACT OWNERS' EQUITY 338,316,192
------------
TOTAL LIABILITIES AND CONTRACT OWNERS' EQUITY $338,446,053
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1995
(Unaudited)
VAN KAMPEN MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
__________________ _________________
QUALITY HIGH GROWTH & MONEY STOCK GROWTH & GLOBAL
INCOME YIELD INCOME MARKET INDEX INCOME EQUITY
----------- ----------- ----------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividends $1,169,724 $1,188,928 $ 131,094 $2,045,496 $ 491,113 -- --
----------- ----------- ----------- ---------- ---------- ------------ ---------
Total Income 1,169,724 1,188,928 131,094 2,045,496 491,113 -- --
----------- ----------- ----------- ---------- ---------- ------------ ---------
EXPENSES:
Mortality and Expense
Risk Fee 221,686 160,310 73,254 432,303 261,307 800,558 18,262
Other Operating
Expenses 26,603 19,237 8,790 51,876 31,357 96,067 2,191
----------- ----------- ----------- ---------- ---------- ------------ ---------
Total Expenses 248,289 179,547 82,044 484,179 292,664 896,625 20,453
----------- ----------- ----------- ---------- ---------- ------------ ---------
Net Investment Income 921,435 1,009,381 49,050 1,561,317 198,449 (896,625) (20,453)
----------- ----------- ----------- ---------- ---------- ------------ ---------
Net Realized Gain/(Loss)
on Investments (107,496) (105,501) (36) -- 65,852 176,147 10,785
Net Change in Unrealized
Gain/(Loss) on Investments 2,633,261 1,225,952 1,592,668 16,299 6,908,148 20,326,546 (62,372)
----------- ----------- ----------- ---------- ---------- ------------ ---------
Net Realized and Unrealized
Gain/(Loss) on Investments 2,525,765 1,120,451 1,592,632 16,299 6,974,000 20,502,693 (51,587)
----------- ----------- ----------- ---------- ---------- ------------ ---------
<PAGE>
Net Increase/(Decrease) in
Contract Owners' Equity
Resulting From Operations $3,447,200 $2,129,832 $1,641,682 $1,577,616 $7,172,449 $19,606,068 $(72,040)
=========== =========== =========== ========== ========== ============ =========
TOTAL
-----------
<S> <C> <C>
INVESTMENT INCOME:
INCOME:
Dividends $5,026,355
-----------
Total Income 5,026,355
-----------
EXPENSES:
Mortality and Expense
Risk Fee 1,967,680
Other Operating
Expenses 236,121
-----------
Total Expenses 2,203,801
-----------
Net Investment Income 2,822,554
-----------
Net Realized Gain/(Loss)
on Investments 39,751
Net Change in Unrealized
Gain/(Loss) on Investments 32,640,502
-----------
Net Realized and Unrealized
Gain/(Loss) on Investments 32,680,253
-----------
Net Increase/(Decrease) in
Contract Owners' Equity
Resulting From Operations $35,502,807
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
STATEMENT OF CHANGES IN CONTRACT OWNERS' EQUITY
For the Six Months Ended June 30, 1995
(Unaudited)
VAN KAMPEN MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
__________________ _________________
QUALITY HIGH GROWTH & MONEY STOCK GROWTH &
INCOME YIELD INCOME MARKET INDEX INCOME
------------ ------------ ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income $ 921,435 $ 1,009,381 $ 49,050 $ 1,561,317 $ 198,449 $ (896,625)
Net Realized Gain/(Loss)
on Investments (107,496) (105,501) (36) -- 65,852 176,147
Net Unrealized Loss
on Investments 2,633,261 1,225,952 1,592,668 16,299 6,908,148 20,326,546
------------ ------------ ------------ ------------- ------------ -------------
NET INCREASE IN CONTRACT
Owners' Equity
Resulting from
Operations 3,447,200 2,129,832 1,641,682 1,577,616 7,172,449 19,606,068
------------ ------------ ------------ ------------- ------------ -------------
From Account Unit Transactions:
Redemptions by Cova
Financial Services Life
Insurance Company -- -- -- -- -- --
Proceeds from Units of
the Account Sold 1,128,141 1,276,409 487,529 5,158,223 483,802 10,856,229
Payments for Units of the
Account Redeemed (2,541,562) (893,220) (257,484) (2,757,496) (1,308,555) (8,718,128)
Account Transfers 12,396,762 7,512,309 200,606 (41,097,501) 17,808,934 8,660,144
------------ ------------ ------------ ------------- ------------ -------------
Net Increase/(Decrease) in
Contract Owners' Equity
From Account Unit
Transactions 10,983,341 7,895,498 430,651 (38,696,774) 16,984,181 10,798,245
------------ ------------ ------------ ------------- ------------ -------------
Net Increase/(Decrease) in
Contract Owners' Equity 14,430,541 10,025,330 2,072,333 (37,119,158) 24,156,630 30,404,313
<PAGE>
Contract Owners' Equity:
Beginning of Period 33,932,500 19,653,327 10,940,681 75,877,765 36,806,663 114,416,253
------------ ------------ ------------ ------------- ------------ -------------
End of Period $48,363,041 $29,678,657 $13,013,014 $ 38,758,607 $60,963,293 $144,820,566
============ ============ ============ ============= ============ =============
GLOBAL
EQUITY TOTAL
----------- -------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income $ (20,453) $ 2,822,554
Net Realized Gain/(Loss)
on Investments 10,785 39,751
Net Unrealized Loss
on Investments (62,372) 32,640,502
----------- -------------
NET INCREASE IN CONTRACT
Owners' Equity
Resulting from
Operations (72,040) 35,502,807
----------- -------------
From Account Unit Transactions:
Redemptions by Cova
Financial Services Life
Insurance Company (131,875) (131,875)
Proceeds from Units of
the Account Sold 219,674 19,610,007
Payments for Units of the
Account Redeemed (345,242) (16,821,687)
Account Transfers (59,824) 5,421,430
----------- -------------
Net Increase/(Decrease) in
Contract Owners' Equity
From Account Unit
Transactions (317,267) 8,077,875
----------- -------------
Net Increase/(Decrease) in
Contract Owners' Equity (389,307) 43,580,682
<PAGE>
Contract Owners' Equity:
Beginning of Period 3,108,321 294,735,510
----------- -------------
End of Period $ 2,719,014 $338,316,192
=========== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
STATEMENT OF CHANGES IN CONTRACT OWNERS' EQUITY
For the Year Ended December 31, 1994
VAN KAMPEN MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
__________________ _________________
QUALITY HIGH GROWTH & MONEY STOCK GROWTH &
INCOME YIELD INCOME MARKET INDEX INCOME
------------- ------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income $ 1,794,835 $ 1,616,623 $ 200,951 $ 1,709,296 $ 1,118,347 $ 5,410,145
Net Realized Gain/(Loss)
on Investments (2,599,245) (362,967) (21,660) -- 278,818 186,013
Net Unrealized Loss
on Investments (1,443,581) (2,525,492) (780,493) (77,617) (3,006,374) (4,137,519)
------------- ------------ ------------ ------------ ------------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT
CONTRACT OWNERS' EQUITY
RESULTING FROM OPERATIONS (2,247,991) (1,271,836) (601,202) 1,631,679 (1,609,209) 1,458,639
------------- ------------ ------------ ------------ ------------- -------------
FROM ACCOUNT UNIT TRANSACTIONS:
Redemptions by Xerox
Financial Services Life -- -- -- -- -- (165,388)
Insurance Co.
Proceeds from Units of
the Account Sold 3,457,661 3,581,861 1,768,546 26,599,639 3,204,514 12,735,754
Payments for Units of the
Account Redeemed (3,008,336) (1,363,592) (262,226) (3,948,250) (4,010,323) (4,233,747)
Account Transfers (15,379,369) (139,118) 3,508,016 45,042,209 (52,047,260) 22,587,520
------------- ------------ ------------ ------------ ------------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT OWNERS' EQUITY
FROM ACCOUNT UNIT
TRANSACTIONS (14,930,044) 2,079,151 5,014,336 67,693,598 (52,853,069) 30,924,139
------------- ------------ ------------ ------------ ------------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT OWNERS' EQUITY (17,178,035) 807,315 4,413,134 69,325,277 (54,462,278) 32,382,778
<PAGE>
CONTRACT OWNERS' EQUITY:
Beginning of Period 51,110,535 18,846,012 6,527,547 6,552,488 91,268,941 82,033,475
------------- ------------ ------------ ------------ ------------- -------------
End of Period $ 33,932,500 $19,653,327 $10,940,681 $75,877,765 $ 36,806,663 $114,416,253
============= ============ ============ ============ ============= =============
GLOBAL
EQUITY TOTAL
----------- -------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net Investment Income $ 334,697 $12,184,894
Net Realized Gain/(Loss)
on Investments 142,294 (2,376,747)
Net Unrealized Loss
on Investments (449,794) (12,420,870)
----------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT
CONTRACT OWNERS' EQUITY
RESULTING FROM OPERATIONS 27,197 (2,612,723)
----------- -------------
FROM ACCOUNT UNIT TRANSACTIONS:
Redemptions by Xerox
Financial Services Life -- (165,388)
Insurance Co.
Proceeds from Units of
the Account Sold -- 51,347,975
Payments for Units of the
Account Redeemed (507,347) (17,333,821)
Account Transfers (46,118) 3,525,880
----------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT OWNERS' EQUITY
FROM ACCOUNT UNIT
TRANSACTIONS (553,465) 37,374,646
----------- -------------
NET INCREASE/(DECREASE) IN
CONTRACT OWNERS' EQUITY (526,268) 34,761,923
<PAGE>
CONTRACT OWNERS' EQUITY:
Beginning of Period 3,634,589 259,973,587
----------- -------------
End of Period $ 3,108,321 $294,735,510
=========== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period per sub-account and presented below:
VAN KAMPEN MERRITT SERIES TRUST - QUALITY INCOME PORTFOLIO
For the Six Months For the Year For the Year For the Year For the Year
Ended 6/30/95 Ended Ended Ended Ended
(Unaudited) 12/31/94 12/31/93 12/31/92 12/31/91
-------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 13.17 $ 13.97 $ 12.75 $ 12.02 $ 10.62
-------------------- -------------- -------------- -------------- --------------
Net Investment Income .34 .60 1.00 .64 .67
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions 1.04 (1.40) .22 .09 .73
-------------------- -------------- -------------- -------------- --------------
Total from Investment Operations 1.38 (.80) 1.22 .73 .140
-------------------- -------------- -------------- -------------- --------------
Accumulation Unit Value,
End of Period $ 14.55 $ 13.17 $ 13.97 $ 12.75 $ 12.02
==================== ============== ============== ============== ==============
Total Return* 22.24%* (5.70%) 9.50% 6.10% 13.02%
Net Assets, End of Period
(in thousands) $ 48,379 $ 33,936 $ 51,118 $ 24,138 $ 6,783
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%
Ratio of Net Investment Income
to Average Contract
Owners' Equity 5.18%* 4.48% 8.30% 5.45% 6.09%
<PAGE>
Number of Units Outstanding
at End of Period 3,324,067 2,576,412 3,659,656 1,891,499 563,960
<FN>
* Investment returns do not reflect any annual contract maintenance fees
or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the period
per sub-account and presented below:
VAN KAMPEN MERRITT SERIES TRUST - HIGH YIELD PORTFOLIO
For the Six Months For the Year For the Year For the Year For the Year
Ended 6/30/95 Ended Ended Ended Ended
(Unaudited) 12/31/94 12/31/93 12/31/92 12/31/91
-------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 16.98 $ 18.02 $ 14.99 $ 12.75 $ 10.06
-------------------- -------------- -------------- -------------- --------------
Net Investment Income .68 1.38 1.80 2.26 1.14
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions .77 (2.42) 1.23 (.02) 1.55
-------------------- -------------- -------------- -------------- --------------
Total from Investment Operations 1.45 (1.04) 3.03 2.24 2.69
-------------------- -------------- -------------- -------------- --------------
Accumulation Unit Value,
End of Period $ 18.43 $ 16.98 $ 18.02 $ 14.99 $ 12.75
==================== ============== ============== ============== ==============
Total Return* 18.04%* (5.79)% 20.21% 17.53% 26.73%
Net Assets, End of Period
(in thousands) $ 29,690 $ 19,656 $ 18,849 $ 5,419 $ 3,806
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%
Ratio of Net Investment Income
to Average Contract
Owners' Equity 7.85%* 7.92% 13.05% 16.04% 9.83%
<PAGE>
Number of Units Outstanding
at End of Period 1,610,128 1,157,642 1,045,815 361,296 298,202
<FN>
* Investment returns do not reflect any annual contract maintenance fees or
withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the period
per sub-account and presented below:
VAN KAMPEN MERRITT SERIES TRUST - GROWTH & INCOME PORTFOLIO
For the Period From
For the Six Months For the Year For the Year 5/1/92
Ended 6/30/95 Ended Ended (Commencement of Operations)
(Unaudited) 12/31/94 12/31/94 Through 12/31/92
-------------------- -------------- -------------- -----------------------------
<S> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 11.20 $ 11.92 $ 10.47 $ 10.00
-------------------- -------------- -------------- -----------------------------
Net Investment Income .05 .19 .54 .19
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions 1.62 (.91) .91 .28
-------------------- -------------- -------------- -----------------------------
Total from Investment Operations 1.67 (.72) 1.45 .47
-------------------- -------------- -------------- -----------------------------
Accumulation Unit Value,
End of Period $ 12.87 $ 11.20 $ 11.92 $ 10.47
==================== ============== ============== =============================
Total Return** 32.40%* (6.07)% 13.84% 7.09%*
Net Assets, End of Period
(in thousands) $ 13,018 $ 10,942 $ 6,529 $ 2,629
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40%*
<PAGE>
Ratio of Net Investment Income
to Average Contract
Owners' Equity .84%* 2.05% 7.54% 3.82%*
Number of Units Outstanding
at End of Period 1,011,290 977,209 547,643 250,919
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance fees or
withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the period
per sub-account and presented below:
VAN KAMPEN MERRITT SERIES TRUST - MONEY MARKET PORTFOLIO
For the Period
For the Six Months For the Year For the Year For the Year From 11/1/91
Ended 6/30/95 Ended Ended Ended Through 12/31/91
(Unaudited) 12/31/94 12/31/93 12/31/92 12/31/91
-------------------- -------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 10.90 $ 10.61 $ 10.46 $ 10.21 $ 10.00
-------------------- -------------- -------------- -------------- ------------------
Net Investment Income .25 .30 .19 .25 .21
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions -- (.01) (.04) -- --
-------------------- -------------- -------------- -------------- ------------------
Total from Investment Operations .25 .29 .15 .25 .21
-------------------- -------------- -------------- -------------- ------------------
Accumulation Unit Value,
End of Period $ 11.15 $ 10.90 $ 10.61 $ 10.46 $ 10.21
==================== ============== ============== ============== ==================
Total Return** (4.74%)* 2.70% 1.45% 2.44% 4.19%
Net Assets, End of Period
(in thousands) $ 38,776 $ 75,887 $ 6,554 $ 4,033 $ 5,390
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%*
Ratio of Net Investment Income
to Average Contract
Owners' Equity 4.53%* 2.90% 1.78% 2.46% 4.04%*
<PAGE>
Number of Units Outstanding
at End of Period 3,476,178 6,963,421 617,575 385,448 527,571
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the period
per sub-account and presented below:
VAN KAMPEN MERRITT SERIES TRUST - STOCK INDEX PORTFOLIO
For the Six Months For the Year For the Year For the Year For the Period
Ended 6/30/95 Ended Ended Ended From 11/1/91
(Unaudited) 12/31/94 12/31/93 12/31/92 Through 12/31/91
-------------------- -------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 11.68 $ 11.87 $ 11.05 $ 10.55 $ 10.00
-------------------- -------------- -------------- -------------- ------------------
Net Investment Income .02 .37 .22 .52 (.02)
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions 2.19 (.56) .60 (.02) .57
-------------------- -------------- -------------- -------------- ------------------
Total from Investment Operations 2.21 (.19) .82 .50 .55
-------------------- -------------- -------------- -------------- ------------------
Accumulation Unit Value,
End of Period $ 13.89 $ 11.68 $ 11.87 $ 11.05 $ 10.55
==================== ============== ============== ============== ==================
Total Return** 41.87%* (1.58%) 7.35% 4.75% 38.03%*
Net Assets, End of Period
(in thousands) $ 60,987 $ 36,811 $ 91,283 $ 35,000 $ 6,761
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%*
<PAGE>
Ratio of Net Investment Income
to Average Contract
Owners' Equity .95%* 2.10% 2.99% 10.02% (1.40%)*
Number of Units Outstanding
at End of Period 4,388,609 3,151,443 7,691,151 3,164,251 639,923
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period per sub-account and presented below:
LORD ABBETT SERIES FUND, INC. - GROWTH AND INCOME PORTFOLIO
For the Six Months For the Year For the Year For the Year For the Year
Ended 6/30/95 Ended Ended Ended Ended
(Unaudited) 12/31/94 12/31/93 12/31/92 12/31/91
-------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value,
Beginning of Period $ 16.64 $ 16.42 $ 14.50 $ 12.73 $ 10.15
-------------------- -------------- -------------- -------------- --------------
Net Investment Income (.13) .76 .88 1.06 .85
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions 2.90 (.54) 1.04 .71 1.73
-------------------- -------------- -------------- -------------- --------------
Total from Investment Operations 2.77 .22 1.92 1.77 2.58
-------------------- -------------- -------------- -------------- --------------
Accumulation Unit Value,
End of Period $ 19.41 $ 16.64 $ 16.42 $ 14.50 $ 12.73
==================== ============== ============== ============== ==============
Total Return* 36.45%* 1.32% 13.24% 13.98% 25.42%
Net Assets, End of Period
(in thousands) $ 144,876 $ 114,429 $ 82,046 $ 37,168 $ 18,166
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%
Ratio of Net Investment Income
to Average Contract
Owners' Equity (1.40%)* 5.40% 8.12% 10.59% 9.05%
<PAGE>
Number of Units Outstanding
at End of Period 7,459,263 6,875,139 4,994,582 2,560,999 1,426,577
<FN>
* Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
SUPPLEMENTARY INFORMATION - FINANCIAL HIGHLIGHTS
Financial Highlights for each accumulation unit outstanding throughout the
period per sub-account and presented below:
LORD ABBETT SERIES FUND, INC. - GLOBAL EQUITY PORTFOLIO
For the Six Months For the Year For the Year For the Year For the Period
Ended 6/30/95 Ended Ended Ended From 4/9/90
(Unaudited) 12/31/94 12/31/93 12/31/92 Through 12/31/91
-------------------- -------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value, $ 13.33 $ 13.29 $ 10.64 $ 10.97 $ 9.79
-------------------- -------------- -------------- -------------- ------------------
Beginning of Period
Net Investment Income (.09) 1.45 .24 .18 .14
Net Realized and Unrealized
Gain/(Loss) from Security
Transactions (.22) (1.41) 2.41 (.51) 1.04
-------------------- -------------- -------------- -------------- ------------------
Total from Investment Operations (.31) .04 2.65 (.33) 1.18
-------------------- -------------- -------------- -------------- ------------------
Accumulation Unit Value,
End of Period $ 13.02 $ 13.33 $ 13.29 $ 10.64 $ 10.97
==================== ============== ============== ============== ==================
Total Return** (4.66%)* .27% 24.91% (2.98%) 12.02%*
Net Assets, End of Period
(in thousands) $ 2,720 $ 3,109 $ 3,635 $ 3,252 $ 4,295
-------------------- -------------- -------------- -------------- ------------------
Ratio of Expenses to Average
Contract Owners' Equity 1.40%* 1.40% 1.40% 1.40% 1.40%*
<PAGE>
Ratio of Net Investment Income
to Average Contract
Owners' Equity (1.40%)* 9.78% 1.88% 1.38% 2.19%
Number of Units Outstanding
at End of Period 208,860 233,186 273,399 305,314 391,234
<FN>
* Annualized
** Investment returns do not reflect any annual contract maintenance
fees or withdrawal charges.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
COVA VARIABLE ANNUITY ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
and for the year ended December 31, 1994
1. ORGANIZATION:
Cova Variable Annuity Account One (the "Separate Account") is a separate
investment account established by a resolution of the Board of Directors of
Cova Financial Services Life Insurance Company ("Cova Life") formerly known as
Xerox Financial Services Life Insurance Company ("Xerox Life") (See Note 5).
The Separate Account operates as a Unit Investment Trust under the Investment
Company Act of 1940.
The Separate Account is divided into sub-accounts, with the assets of each
sub-account invested in either the Van Kampen Merritt Series Trust ("Trust")
or the Lord Abbett Series Fund, Inc. ("Fund"). The Trust is managed by Van
Kampen Merritt Investment Advisory Corp. Currently, the Van Kampen Merritt
Series Trust consists of five portfolios available for investment; the
Quality Income, High Yield, Growth & Income, Money Market, and Stock Index
Portfolios. The Lord Abbett Series Fund currently has two portfolios
available for investment; the Growth and Income Portfolio and the Global
Equity Portfolio. Not all portfolios of the Trust and Fund are available for
investment depending upon the nature and specific terms of the different
contracts currently being offered for sale. Both the Trust and Fund are
diversified, open-end, management investment companies which are intended to
meet differing investment objectives.
The Trust Quality Income Portfolio invests in U.S. Government issued debt
obligations and in various investment-grade debt instruments. The Trust High
Yield Portfolio invests in medium and lower-grade debt securities and futures
and options contracts. The Trust Growth and Income Portfolio invests in
common stocks and futures and options contracts. The Trust Money Market
Portfolio invests in short-term money market instruments. The Trust Stock
Index Portfolio invests in common stocks, stock index futures and options, and
short-term securities. The Fund Growth and Income Portfolio invests in common
stocks. The Fund Global Equity Portfolio invests in both domestic and foreign
common stocks and forward currency contracts.
2. SIGNIFICANT ACCOUNTING POLICIES:
A. INVESTMENT VALUATION
Investments in shares of the Trust and Fund are carried in the statement of
assets and liabilities at the underlying net asset value of the Trust and
Fund. The net asset value of the Trust and Fund has been determined on the
market value basis.
<PAGE>
B. REINVESTMENT OF DIVIDENDS
Dividends received from net investment income and net realized capital gains
are reinvested in additional shares of the portfolio of the Trust or Fund
making the distribution or, at the election of the Separate Account, received
in cash. Dividend income and capital gain distributions are recorded as
income on the ex-dividend date.
C. FEDERAL INCOME TAXES
Operations of the Separate Account form a part of Cova Life, which is taxed as
a "Life Insurance Company" under the Internal Revenue Code ("Code"). Under
current provisions of the Code, no Federal income taxes are payable by Cova
Life with respect to earnings of the Separate Account.
Under the principles set forth in Internal Revenue Ruling 81-225 and Section
817(h) of the Code and regulations thereunder, Cova Life believes that it will
be treated as the owner of the assets invested in the Separate Account for
Federal Income Tax purposes, with the result that earnings and gains, if any,
derived from those assets will not be included in a contract owners' gross
income until amounts are withdrawn or received pursuant to an Optional Payment
Plan.
3. CONTRACT CHARGES:
There are no deductions made from purchase payments for sales charges at the
time of purchase. However, if all or a portion of the contract value is
withdrawn, a withdrawal charge is calculated and deducted from the contract
value. The withdrawal charge is imposed on withdrawals of contract values
attributable to purchase payments within five years after receipt and is equal
to 5% of the purchase payment withdrawn. After the first contract
anniversary, an owner may make a withdrawal each contract year of up to 10% of
the aggregate purchase payments free from withdrawal charges. An annual
contract maintenance charge of $30 is imposed on all contracts on their policy
anniversary. The charge covers the cost of contract administration for the
previous year and is prorated between the sub-accounts to which the contract
value is allocated.
Mortality and expense risks assumed by Cova Life are compensated by a charge
equivalent to an annual rate of 1.25% of the value of net assets.
In addition, the Separate Account bears certain administration expenses, which
are equivalent to an annual rate of .15% of net assets. These charges cover
the cost of establishing and maintaining the contracts and Separate Account.
<PAGE>
4. ACCOUNT TRANSFERS:
Subject to certain restrictions, the contract owner may transfer all or a part
of the accumulated value of the contract among other offered and available
account options of the Separate Account and fixed rate annuities of Cova Life.
If more than 12 transfers have been made in the contract year, a transfer fee
of $25 per transfer or, if less, 2% of the amount transferred will be deducted
from the account value. If the owner is participating in the Dollar Cost
Averaging program, such related transfers are not taken into account in
determining any transfer fee.
5. RELATED PARTIES:
On June 1, 1995, a subsidiary of General American Life Insurance Company
(GALIC) purchased Xerox Life under the terms of a stock purchase agreement.
After closing of the sale transaction, Xerox Life and the Separate Account
were renamed Cova Financial Services Life Insurance Company ("Cova Life"), and
Cova Variable Annuity Account One (the "Separate Account"), respectively.
Operations of the separate account were not affected by this transaction.
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
and for the year ended December 31, 1994
6. GAIN/(LOSS) ON INVESTMENTS:
The table below summarizes realized and unrealized gains and losses on
investments:
REALIZED GAIN/(LOSS) ON INVESTMENTS:
____________________________________
FOR THE SIX MONTHS FOR THE YEAR
ENDED 6/30/95 ENDED
(UNAUDITED) 12/31/94
-------------------- --------------
<S> <C> <C>
Trust Quality Income Portfolio:
Aggregate Proceeds From Sales $ 10,191,998 $ 555,910,839
Aggregate Cost 10,299,494 58,510,084
-------------------- --------------
Net Realized Loss on Investments $ (107,496) $ (2,599,245)
==================== ==============
<PAGE>
Trust High Yield Portfolio:
Aggregate Proceeds From Sales $ 1,236,306 $ 9,145,332
Aggregate Cost 1,341,807 9,508,299
-------------------- --------------
Net Realized Loss on Investments $ (105,501) $ (362,967)
==================== ==============
Trust Growth and Income Portfolio:
Aggregate Proceeds From Sales $ 726,088 $ 1,423,903
Aggregate Cost 726,144 1,445,563
-------------------- --------------
Net Realized Loss on Investments $ (36) $ (21,600)
==================== ==============
Trust Money Market Portfolio:
Aggregate Proceeds From Sales $ 43,094,581 $ 60,198,925
Aggregate Cost 43,094,581 60,198,925
-------------------- --------------
Net Realized Gain/(Loss) on Investments $ -- $ -
==================== ==============
Trust Stock Index Portfolio:
Aggregate Proceeds From Sales $ 3,957,163 $ 67,994,793
Aggregate Cost 3,891,311 67,715,975
-------------------- --------------
Net Realized Gain on Investments $ 65,852 $ 278,818
==================== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
and for the year ended December 31, 1994
GAIN/(LOSS) ON INVESTMENTS, CONTINUED:
REALIZED GAIN/(LOSS) ON INVESTMENTS
___________________________________
FOR THE SIX MONTHS FOR THE YEAR
Ended 6/30/95 Ended
(UNAUDITED) 12/31/94
-------------------- --------------
<S> <C> <C>
Fund Growth and Income Portfolio:
Aggregate Proceeds From Sales $ 2,770,579 $ 3,887,963
Aggregate Cost 2,594,432 3,701,950
-------------------- --------------
Net Realized Gain on Investments $ 176,147 $ 186,013
==================== ==============
Fund Global Equity Portfolio:
Aggregate Proceeds From Sales $ 3,249 $ 738,271
Aggregate Cost 372,464 595,977
-------------------- --------------
Net Realized Gain on Investments $ 10,785 $ 142,294
==================== ==============
UNREALIZED GAIN/(LOSS) ON INVESTMENTS
------------------------------------------------------ ==================== ==============
Trust Quality Income Portfolio:
End of Period $ 2,576 $ (2,130,685)
Beginning of Period (2,130,685) (687,104)
-------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ 2,633,261 $ (1,443,581)
==================== ==============
Trust High Yield Portfolio:
End of Period $ (1,021,213) $ (2,247,165)
Beginning of Period (2,247,165) 278,327
-------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ 1,225,952 $ (2,525,492)
==================== ==============
<PAGE>
Trust Growth and Income Portfolio:
End of Period $ 980,750 $ (611,918)
Beginning of Period (611,918) 168,575
-------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ 1,592,668 $ (780,493)
==================== ==============
Trust Money Market Portfolio:
End of Period $ 93,604) $ (109,903)
Beginning of Period (109,903) (32,286)
-------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments 16,299 (77,617)
==================== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
and for the year ended December 31, 1994
GAIN/(LOSS) ON INVESTMENTS, CONTINUED:
______________________________________
UNREALIZED GAIN/(LOSS) ON INVESTMENTS
FOR THE YEAR
FOR THE SIX MONTHS ENDED
ENDED 12/31/94 (UNADUDITED) 12/31/94
---------------------------- --------------
<S> <C> <C>
Trust Stock Index Portfolio:
End of Period $ 6,045,815 $ (862,333)
Beginning of Period (862,333) 2,144,041
---------------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ 6,908,148 $ (3,006,374)
============================ ==============
Fund Growth and Income Portfolio:
End of Period $ 20,611,524 $ 284,978
Beginning of Period 284,978 4,422,497
---------------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ 20,326,546 $ (4,137,519)
============================ ==============
Fund Global Equity Portfolio:
End of Period $ 84,625 $ 146,997
Beginning of Period 146,997 596,791
---------------------------- --------------
Net Change in Unrealized Gain/(Loss) on Investments $ (62,372) $ (449,794)
============================ ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
7. ACCOUNT UNIT TRANSACTIONS:
change in the number of accumulation units resulting from account unit transactions is as follows:
VAN KAMPEN MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
__________________ _________________
QUALITY HIGH GROWTH & MONEY STOCK GROWTH & GLOBAL
INCOME YIELD INCOME MARKET INDEX INCOME EQUITY TOTAL
----------- ---------- --------- ---------- ----------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1993 3,659,656 1,045,815 547,643 617,575 7,691,151 4,994,582 273,399 18,829,821
Redemptions by
Xerox Life -- -- -- -- -- (10,000) -- (10,000)
Units Sold 254,048 200,146 151,404 2,494,509 272,775 783,757 -- 4,156,639
Units Redeemed (226,584) (78,180) (25,238) (367,835) (345,996) (264,803) (36,859) (1,345,495)
Units Transferred (1,110,708) (10,139) 303,400 4,219,172 (4,466,487) 1,371,603 (3,354) 303,487
----------- ---------- --------- ---------- ----------- ---------- -------- -----------
Balance at December 31,
1994 2,576,412 1,157,642 977,209 6,963,421 3,151,443 6,875,139 233,186 21,934,452
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COVA VARIABLE ANNUITY ACCOUNT ONE
NOTES TO FINANCIAL STATEMENTS
For the six months ended June 30, 1995 (Unaudited)
and for the year ended December 31, 1994
7. ACCOUNT UNIT TRANSACTIONS, CONTINUED:
VAN KAMPEN MERRITT LORD ABBETT
SERIES TRUST SERIES FUND, INC.
__________________ _________________
QUALITY HIGH GROWTH & MONEY STOCK GROWTH & GLOBAL
INCOME YIELD INCOME MARKET INDEX INCOME EQUITY TOTAL
---------- ---------- ---------- ----------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1994 2,576,412 1,157,642 977,209 6,963,421 3,151,443 6,875,139 233,186 21,934,452
Redemptions by Xerox Life -- -- -- -- -- -- (10,000) (10,000)
Units Sold 89,379 73,176 40,064 502,951 38,135 614,918 17,430 1,376,053
Units Redeemed (192,532) (53,240) (21,704) (285,888) (104,814) (504,072) (27,123) (1,189,373)
Units Transferred 850,808 432,550 15,721 (3,704,306) 1,303,845 473,278 (4,633) (632,737)
---------- ---------- ---------- ----------- ---------- ---------- -------- -----------
Balance at June 30, 1995
(Unaudited) 3,324,067 1,610,128 1,011,290 3,476,178 4,388,609 7,459,263 208,860 21,478,395
========== ========== ========== =========== ========== ========== ======== ===========
</TABLE>
<PAGE>
