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A N N U A L R E P O R T
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S E L I G M A N
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M U T U A L
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B E N E F I T
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P L A N
[LOGO]
December 31, 1995
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[LOGO]
MBL Life
Assurance
Corporation
<PAGE>
SELIGMAN P.O. Box 13326
-----------------------------------------
MUTUAL Kansas City, MO 64199
-----------------------------------------
BENEFIT
-----------------------------------------
PLAN
February 16, 1996
Dear Contract Owner:
As Manager of the Seligman Portfolios, Inc., we are pleased to provide the
enclosed audited financial statements for the Seligman Mutual Benefit Plan (the
"Separate Account") and the Annual Report of the Seligman Portfolios, Inc. for
the 12 months ended December 31, 1995. Total annual returns of the Separate
Account (indicated below) are based on the performance of the Seligman
Portfolios, Inc., the underlying investment vehicle for the Seligman Mutual
Benefit Plan, less separate account charges.
Net assets of the Variable Account for the Seligman Mutual Benefit Plan
totaled $33 million at December 31, 1995. The Plan's equity sub-accounts that
are subject to an asset-based sales charge posted the following total returns
for the 12-month period ended December 31, 1995: The Capital Sub-Account's
accumulation unit value was $23.31 on December 31, 1995, from $18.59 a year ago,
bringing total return for the year to 25.41%; the Common Stock Sub-Account's
accumulation unit value was $23.29 on December 31, 1995, from $18.57 a year ago,
bringing total return for the year to 25.44%; the Income Sub-Account's
accumulation unit value was $18.38 on December 31, 1995, from $15.80 a year ago,
bringing total return for the year to 16.35%.
The 12-month total return for the Cash Management Sub-Account was 4.15%,
following a rise in its accumulation unit value to $1.32 at December 31, 1995,
up from $1.26 at December 31, 1994. The Fixed Income Securities Sub-Account,
whose accumulation unit value was $15.65 on December 31, 1995, from $13.31 at
December 31, 1994, posted a total return of 17.54% for the year.
The Plan's equity sub-accounts that are not subject to an asset-based
sales charge posted the following total returns for the 12-month period ended
December 31, 1995: The Capital Sub-Account's accumulation unit value was $23.77
on December 31, 1995, from $18.93 a year ago, bringing total return for the year
to 25.60%; The Common Stock Sub-Account's accumulation unit value was $23.56 at
December 31, 1995, from $18.75 a year ago, posting a total return of 25.62% for
the year; The Income Sub-Account's accumulation unit value was $18.80 on
December 31, 1995, from $16.14 a year ago, bringing total return for the year to
16.52%.
The 12-month total return for the Cash Management Sub-Account was 4.31%,
following a rise in its accumulation unit value to $1.34 at December 31, 1995,
up from $1.29 at December 31, 1994. The Fixed Income Securities Sub-Account,
whose accumulation unit value was $15.96 on December 31, 1995, from $13.56 at
December 31, 1994, posted a total return of 17.72% for the year.
Turning towards the US financial markets, it can be unanimously concluded
that 1995 was a banner year. After a pessimistic start, many factors, including
low inflation, falling interest rates, and strong corporate earnings, paved the
way for a memorable year.
Overall, the market indices tell the best story. The Standard & Poor's 500
Composite Stock Price Index, the Ibbotson Long-Term Government Bond Index, and
the Wilshire 5000 were up 30% or more for the year. The leading market indices
have only twice, since the end of World War II, risen more than 1995's strong
advance.
In spite of the historic advances, the financial markets did teeter
towards the end of the year due to the Federal budget stalemate between the
White House and Congress. Nevertheless, the deadlock in Washington did not deter
the Federal Reserve Board from lowering short-term interest rates on December 19
- -- a move that quickly rejuvenated the financial markets.
Looking forward, the slowing economy, the budget negotiations, and the
1996 Presidential election are a few of the factors that may create somewhat
more volatile markets in the year ahead. However, we remain optimistic about
each portfolio's performance and will continue to search for, and invest in,
those companies that can sustain earnings growth in a challenging and
competitive global business environment -- a strategy we believe is key to
investment performance.
Respectfully,
/S/ William Morris
William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated
-- 1 --
<PAGE>
Seligman Mutual Benefit Plan
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Statement of Assets and Liabilities December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in Seligman Portfolios, Inc.:
Seligman Capital Portfolio -- 349,677 shares at Net Asset Value of $14.91 (cost--$ 4,967,025) ........... $ 5,213,682
Seligman Cash Management Portfolio -- 1,823,996 shares at Net Asset Value of $1.00
(cost -- $1,823,996) .................................................................................. 1,823,996
Seligman Common Stock Portfolio -- 1,096,607 shares at Net Asset Value of $15.44
(cost --$16,661,914) .................................................................................. 16,931,609
Seligman Fixed Income Securities Portfolio-- 253,152 shares at Net Asset Value of $10.44
(cost -- $2,530,963) .................................................................................. 2,642,911
Seligman Income Portfolio -- 624,171 shares at Net Asset Value of $10.56 (cost -- $6,797,186) ........... 6,591,249
-----------
Total Assets ............................................................................................... 33,203,447
LIABILITIES
Due to MBL Life--Note 4 .................................................................................... 29,058
-----------
NET ASSETS ................................................................................................. $33,174,389
===========
Net assets attributable to Variable Annuity Contract Owners -- Note 3 ...................................... $33,174,389
===========
</TABLE>
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See notes to financial statements.
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Combined Statement of Operations Year ended December 31, 1995
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<TABLE>
<CAPTION>
Seligman Seligman
Seligman Cash Seligman Fixed Income Seligman
Capital Management Common Stock Securities Income
Combined Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends .................................. $ 943,510 $ 15,174 $ 111,780 $ 333,087 $ 144,975 $ 338,494
Capital gain distributions ................. 2,398,014 379,664 -- 1,683,779 -- 334,571
----------- ----------- ----------- ----------- ----------- -----------
Total Investment Income .................... 3,341,524 394,838 111,780 2,016,866 144,975 673,065
----------- ----------- ----------- ----------- ----------- -----------
Expenses -- Note 4:
Mortality and expense risk charges ...... 430,782 62,707 25,489 217,922 32,974 91,690
Asset-based sales charge ................... 19,120 2,158 1,690 9,714 973 4,585
Administration charge ...................... 31,140 4,687 2,611 14,783 3,056 6,003
----------- ----------- ----------- ----------- ----------- -----------
Total Expenses ............................. 481,042 69,552 29,790 242,419 37,003 102,278
----------- ----------- ----------- ----------- ----------- -----------
Net investment income ...................... 2,860,482 325,286 81,990 1,774,447 107,972 570,787
----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gain
(loss) on investments -- Note 5:
Net realized gain (loss) on sales of
investments ............................. (241,216) (354,072) -- 403,366 (72,603) (217,907)
Net change in unrealized
appreciation/depreciation
of investments .......................... 4,131,889 1,170,734 -- 1,794,616 392,734 773,805
----------- ----------- ----------- ----------- ----------- -----------
Net gain on investments .................... 3,890,673 816,662 -- 2,197,982 320,131 555,898
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations ............... $ 6,751,155 $ 1,141,948 $ 81,990 $ 3,972,429 $ 428,103 $ 1,126,685
=========== =========== =========== =========== =========== ===========
</TABLE>
- ----------
See notes to financial statements.
-- 2 --
<PAGE>
Seligman Mutual Benefit Plan
- --------------------------------------------------------------------------------
Combined Statements of Changes in Net Assets
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<TABLE>
<CAPTION>
Seligman Seligman
Capital Cash Management
Combined Sub-Account Sub-Account
Year Ended December 31 Year Ended December 31 Year Ended December 31
---------------------------- ---------------------------- ----------------------------
1995 1994 1995 1994 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income .............. $ 2,860,482 $ 2,190,460 $ 325,286 $ 451,489 $ 81,990 $ 68,797
Net realized gain (loss) on sales
of investments .................. (241,216) 1,442,097 (354,072) (27,809) -- --
Net change in unrealized
appreciation/depreciation
of investments .................. 4,131,889 (5,053,892) 1,170,734 (748,857) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) resulting
from operations ................. 6,751,155 (1,421,335) 1,141,948 (325,177) 81,990 68,797
------------ ------------ ------------ ------------ ------------ ------------
From Contract Owners'
transactions -- Note 2:
Net transfers between
sub-accounts ....................... -- -- 99,124 (86,808) (37,710) 292,700
Redemptions and annuity benefits ... (9,687,905) (6,780,980) (810,103) (599,806) (913,272) (701,417)
------------ ------------ ------------ ------------ ------------ ------------
Decrease in net assets resulting
from Contract Owners'
transactions .................... (9,687,905) (6,780,980) (710,979) (686,614) (950,982) (408,717)
------------ ------------ ------------ ------------ ------------ ------------
(Increase) decrease in amount
due MBL Life -- Note 4 .......... (15,212) 5,841 612 210 159 215
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets .. (2,951,962) (8,196,474) 431,581 (1,011,581) (868,833) (339,705)
Net assets:
Beginning of year .................. 36,126,351 44,322,825 4,784,193 5,795,774 2,693,363 3,033,068
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................ $ 33,174,389 $ 36,126,351 $ 5,215,774 $ 4,784,193 $ 1,824,530 $ 2,693,363
============ ============ ============ ============ ============ ============
</TABLE>
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See notes to financial statements.
-- 3 --
<PAGE>
<TABLE>
<CAPTION>
Seligman Mutual Benefit Plan
- ------------------------------------------------------------------------------------------------------------------------------------
Combined Statements of Changes in Net Assets (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Seligman Seligman Seligman
Common Stock Fixed Income Income
Sub-Account Securities Sub-Account Sub-Account
---------------------------- ---------------------------- -----------------------------
Year Ended December 31 Year Ended December 31 Year Ended December 31
---------------------------- ---------------------------- -----------------------------
1995 1994 1995 1994 1995 1994
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income .............. $ 1,774,447 $ 1,156,716 $ 107,972 $ 95,674 $ 570,787 $ 417,784
Net realized gain (loss) on sales
of investments .................. 403,366 1,594,669 (72,603) (196,279) (217,907) 71,516
Net change in unrealized
appreciation/depreciation
of investments .................. 1,794,616 (3,023,057) 392,734 (61,683) 773,805 (1,220,295)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) resulting
from operations ................. 3,972,429 (271,672) 428,103 (162,288) 1,126,685 (730,995)
------------ ------------ ------------ ------------ ------------ ------------
From Contract Owners'
transactions -- Note 2:
Net transfers between
sub-accounts .................... (5,440) 82,779 (14,658) (45,966) (41,316) (242,705)
Redemptions and annuity benefits ... (4,837,670) (3,205,217) (526,494) (601,806) (2,600,366) (1,672,734)
------------ ------------ ------------ ------------ ------------ ------------
Decrease in net assets resulting
from Contract Owners'
transactions .................... (4,843,110) (3,122,438) (541,152) (647,772) (2,641,682) (1,915,439)
------------ ------------ ------------ ------------ ------------ ------------
(Increase) decrease in amount
due MBL Life -- Note 4 .......... (13,400) 2,323 (1,411) (577) (1,172) 3,670
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets .. (884,081) (3,391,787) (114,460) (810,637) (1,516,169) (2,642,764)
Net assets:
Beginning of year .................. 17,797,194 21,188,981 2,747,003 3,557,640 8,104,598 10,747,362
------------ ------------ ------------ ------------ ------------ ------------
End of year ........................ $ 16,913,113 $ 17,797,194 $ 2,632,543 $ 2,747,003 $ 6,588,429 $ 8,104,598
============ ============ ============ ============ ============ ============
</TABLE>
- ------------
See notes to financial statements.
-- 4 --
<PAGE>
Seligman Mutual Benefit Plan
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Notes to Financial Statements
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1. The Seligman Mutual Benefit Plan (the "Plan") is a unit investment trust
registered under the Investment Company Act of 1940, as amended, and a separate
account of the MBL Life Assurance Corporation ("MBL Life") established under the
insurance laws of New Jersey. MBL Life provides for variable accumulation and
benefits under the Plan's contract by crediting annuity considerations to one or
more Variable Accumulation Sub-Accounts ("sub-account") within the Plan or the
Fixed Accumulation Account, as elected by the Contract Owner. Significant
accounting policies of the Plan are as follows:
a. Investments -- Investments are valued at net asset value. The Plan invests
exclusively in shares of the following five portfolios of Seligman Portfolios,
Inc. (the "Fund"), a series Fund: Seligman Capital Portfolio, Seligman Cash
Management Portfolio, Seligman Common Stock Portfolio, Seligman Fixed Income
Securities Portfolio and Seligman Income Portfolio. Shares are purchased in each
portfolio, in accordance with the Contract Owner's allocation of net purchase
payments, at the net asset value of such shares on the date monies are received.
Cost represents the aggregate of such purchases at net asset value. Dividends
from net investment income and capital gain distributions are recognized on the
ex-dividend date. Except for the Seligman Cash Management Portfolio, which
declares daily dividends, dividends and capital gain distributions, if any, are
declared annually.
b. Federal Income Taxes -- The Plan does not provide for Federal income taxes
since the operations of the Plan form a part of, and are taxed with, the total
operations of MBL Life which is taxed as a "life insurance company" under the
Internal Revenue Code. Earnings and realized capital gains and losses, if any,
of the Plan attributable to the Contract Owners, are excluded in the
determination of the Federal income tax liability of MBL Life.
c. Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from these estimates.
2. On July 16, 1991, the Superior Court of New Jersey (the "Court") entered an
Order appointing the New Jersey Insurance Commissioner as Rehabilitator of the
Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual Benefit Life").
The Commissioner was granted immediate exclusive possession and control of, and
title to, the business and assets of Mutual Benefit Life, including the assets
and liabilities of the Plan. As a separate account, the assets and liabilities
of the Plan are maintained separate and apart from the sponsoring insurance
company's other assets and liabilities.
On November 10, 1993, the Court issued an Order of Confirmation which provided
for the implementation of the Third Amended Plan of Rehabilitation of Mutual
Benefit Life (the "Plan of Rehabilitation"). The Plan of Rehabilitation, as
confirmed, reaffirmed the status of the Seligman Mutual Benefit Plan as a
separate account.
On April 29, 1994, the Plan of Rehabilitation was implemented. Substantially,
all of the assets and liabilities of Mutual Benefit Life were transferred to MBL
Life. In addition, the assets and liabilities of the Plan were transferred to a
new separate account of MBL Life. Also, as of April 29, 1994, the ownership of
the stock of MBL Life was transferred to a Trust, of which the Commissioner is
the sole Trustee.
MBL Life has decided that it will not accept applications for new contracts nor
will it accept additional purchase payments under existing contracts including
transfers from the Fixed Accumulation Account to any sub-account of the Plan. In
addition, requests for transfers of amounts to the Fixed Accumulation Account
from the Plan will not be accepted. The ultimate impact of this decision on the
level of the Plan's assets cannot currently be determined. However, the impact
is not expected to be material. Annuity payments which commenced prior to July
16, 1991 and any death benefits payable, both before and after July 16, 1991,
are unaffected and will continue to be paid under the terms of the Plan of
Rehabilitation. In addition, the Plan of Rehabilitation permits redemptions of
amounts from any sub-account of the Plan to continue, as requested, along with
transfers between sub-accounts within the Plan.
-- 5 --
<PAGE>
Seligman Mutual Benefit Plan
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3. The net assets of the Plan, attributable to Variable Annuity Contract Owners at December 31, 1995, are as follows:
Unit Accumulation
Variable Accumulation Sub-Account Units Owned Value Value
--------------------------------- ----------- ----- -----
<S> <C> <C> <C>
SUB-ACCOUNTS SUBJECT TO ASSET-BASED SALES CHARGE
Seligman Capital Sub-Account ....................................... 31,047 $23.307 $ 723,632
Seligman Cash Management Sub-Account ............................... 326,424 1.316 429,565
Seligman Common Stock Sub-Account .................................. 133,833 23.288 3,116,745
Seligman Fixed Income Securities Sub-Account ....................... 22,755 15.650 356,105
Seligman Income Sub-Account ........................................ 102,007 18.379 1,874,825
-----------
Net assets attributable to sub-accounts subject
to asset-based sales charge ........................................ 6,500,872
-----------
SUB-ACCOUNTS NOT SUBJECT TO ASSET-BASED SALES CHARGE
Seligman Capital Sub-Account ....................................... 188,990 23.769 4,492,142
Seligman Cash Management Sub-Account ............................... 1,039,973 1.341 1,394,965
Seligman Common Stock Sub-Account .................................. 585,625 23.558 13,796,368
Seligman Fixed Income Securities Sub-Account ....................... 142,633 15.960 2,276,438
Seligman Income Sub-Account ........................................ 250,690 18.803 4,713,604
-----------
Net assets attributable to sub-accounts not subject
to asset-based sales charge ........................................ 26,673,517
-----------
Net assets attributable to Variable Annuity Contract Owners ........... $33,174,389
===========
</TABLE>
4. A charge, at the annual rate of 1.25% of the asset value of each sub-account,
is made daily against Plan assets for mortality and expense risks assumed by MBL
Life and for provision of the minimum death benefit. During each of the first
five years of a plan contract, MBL Life deducts from the Plan an Asset-Based
Sales Charge, at the annual rate of 0.15% of the asset value of each
sub-account, for expenses incurred in the distribution of contracts.
Administration charges are made against the Contract Owner's account by
redemption of variable accumulation units.
Any portion of the above charges, retained in the Plan and due to MBL Life,
participates ratably in the investment performance of the Plan.
5. Aggregate purchases and proceeds from the sales of investments for the year
ended December 31, 1995 amounted to $17,793,564 and $24,620,987, respectively.
The net realized gain (loss) on sales of investments was calculated as follows:
<TABLE>
<CAPTION>
Seligman Seligman
Seligman Cash Seligman Fixed Income Seligman
Capital Management Common Stock Securities Income
Combined Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Proceeds from sales of investments . $24,620,987 $2,513,414 $2,765,275 $12,701,989 $1,277,996 $5,362,313
Cost of investments sold ........... 24,862,203 2,867,486 2,765,275 12,298,623 1,350,599 5,580,220
----------- ---------- ---------- ----------- ---------- ----------
Net realized gain (loss)
on investments. ................. $ (241,216) $ (354,072) $ -- $ 403,366 $ (72,603) $ (217,907)
=========== ========== ========== =========== ========== ==========
</TABLE>
The net change in unrealized appreciation/depreciation was calculated as
follows:
<TABLE>
<CAPTION>
Seligman Seligman
Seligman Cash Seligman Fixed Income Seligman
Capital Management Common Stock Securities Income
Combined Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Unrealized appreciation (depreciation)
of investments:
Beginning of year .................. $(3,709,526) $ (924,077) $ -- $(1,524,921) $ (280,786) $ (979,742)
End of year ........................ 422,363 246,657 -- 269,695 111,948 (205,937)
----------- ---------- ---------- ----------- ---------- ----------
Net change in unrealized
appreciation/depreciation
of investments .................. $ 4,131,889 $1,170,734 $ -- $ 1,794,616 $ 392,734 $ 773,805
=========== ========== ========== =========== ========== ==========
</TABLE>
-- 6--
<PAGE>
Seligman Mutual Benefit Plan
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. The changes in the number of accumulation units outstanding were as follows,
see Note 2:
<TABLE>
<CAPTION>
Seligman Seligman
Seligman Cash Seligman Fixed Income Seligman
Capital Management Common Stock Securities Income
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1994
Balance at beginning of year ....................... 292,156 2,461,559 1,124,873 253,208 629,500
Issued as a result of sub-account transfers ........ 115,411 828,425 362,289 95,041 157,985
Redemptions and sub-account transfers .............. (152,766) (1,169,846) (532,771) (144,302) (278,746)
---------- ---------- ---------- ---------- ----------
Balance at end of year ............................. 254,801 2,120,138 954,391 203,947 508,739
========== ========== ========== ========== ==========
For the year ended December 31, 1995
Balance at beginning of year ....................... 254,801 2,120,138 954,391 203,947 508,739
Issued as a result of sub-account transfers ........ 80,026 1,329,745 369,393 39,943 142,243
Redemptions and sub-account transfers .............. (114,790) (2,083,486) (604,326) (78,502) (298,285)
---------- ---------- ---------- ---------- ----------
Balance at end of year ............................. 220,037 1,366,397 719,458 165,388 352,697
========== ========== ========== ========== ==========
</TABLE>
-- 7 --
<PAGE>
Seligman Mutual Benefit Plan
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
The Variable Annuity Contract Owners
Seligman Mutual Benefit Plan
We have audited the accompanying statement of assets and liabilities of the
Seligman Mutual Benefit Plan (the "Plan") as of December 31, 1995, the related
combined statement of operations for the year then ended and the combined
statements of changes in net assets for each of the two years in the period then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Seligman Mutual Benefit
Plan as of December 31, 1995, the results of its operations for the year then
ended and the changes in its net assets for each of the two years in the period
then ended in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
February 16, 1996
-- 8 --
