Registration No. 33-15974
811-5242
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. _______ [ ]
Post-Effective Amendment No. ___20___ [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. ___21___ [X]
LBVIP VARIABLE ANNUITY ACCOUNT I
(Exact Name of Registrant)
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS COMPANY
(Name of Depositor)
625 Fourth Avenue South, Minneapolis, Minnesota 55415
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (612) 340-7215
It is proposed that this filing will become effective (check appropriate
box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on May 1, 1998 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485
[ ] on ____________ pursuant to paragraph (a)(i) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(ii) of Rule 485
[ ] on (date) pursuant to paragraph (a)(iii) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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<PAGE>
LBVIP VARIABLE ANNUITY ACCOUNT I
CROSS REFERENCE SHEET
Pursuant to Rule 495 under the Securities Act of 1933 indicating the
location in the Prospectus of the information called for by the Items of
Parts A and B of Form N-4.
Part A
Item Number and Caption Location
- ----------------------- --------
1. Cover Page Cover Page
2. Definitions Definitions
3. Synopsis or Highlights Summary
4. Condensed Financial Information Condensed Financial Information
5. General Description of Registrant,
Depositor, and Portfolio Companies LBVIP, Lutheran Brotherhood, the
Variable Account and the Fund;
Voting Rights; Sales and Other
Agreements
6. Deductions Charges and Deductions; Sales and
Other Agreements
7. General Description of
Variable Annuity Contracts LBVIP, Lutheran Brotherhood, the
Variable Account and the Fund --
Addition, Deletion or Substitution
of Investments; The Contracts --
Allocation of Premiums; --
Surrenders (Redemptions); --
Transfers; -- Contract Owner,
Beneficiaries and Annuitants;
Annuity Provisions --
Frequency and Amount of Annuity
Payments; General Provisions --
Postponement of Payments
8. Annuity Period Annuity Provisions
9. Death Benefit The Contracts -- Death Benefit
Before the Maturity Date; -- Death
Benefit After the Maturity Date
10. Purchases and Contract Value The Contracts -- Issuance of a
Contract; -- Allocation of
Premiums; -- Accumulated Value;
Accumulation Units and Accumulation
Unit Value; Sales and Other
Agreements
11. Redemptions The Contracts -- Free Look Period;
-- Surrender (Redemptions); General
Provisions -- Postponement of
Payments
12. Taxes Charges and Deductions -- Premium
Taxes; Other Taxes; Federal Tax
Status
13. Legal Proceedings Legal Proceedings
14. Table of Contents of the Statement
of Additional Information Statement of Additional Information
Table of Contents
Part B
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and History Introduction
18. Services Administration of the Contracts;
Custody of Assets; Independent
Public Accountants and Financial
Statements
19. Purchase of Securities Being
Offered Distribution of the Contracts
20. Underwriters Distribution of the Contracts
21. Calculation of Yield Quotations of
Money Market Sub-Accounts Calculation of Performance
22. Annuity Payments See "Annuity Provisions" in Part A
23. Financial Statements Independent Public Accountants and
Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered in Part C to this Registration Statement.
<PAGE>
PROSPECTUS
------------------------------------
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
Issued By
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South * Minneapolis, Minnesota 55415 * (612) 340-7210
------------------------------------
This Prospectus describes an individual flexible premium variable annuity
contract (the "Contract") being offered by Lutheran Brotherhood Variable
Insurance Products Company ("LBVIP"), a stock life insurance company that is
an indirect subsidiary of Lutheran Brotherhood. LBVIP is offering the
Contract only in situations in which the Annuitant is eligible for
membership in Lutheran Brotherhood, unless otherwise required by state law.
The Contract may be sold to or in connection with retirement plans which may
or may not qualify for special Federal tax treatment under the Internal
Revenue Code. Annuity payments under the Contract are deferred until a
selected later date.
The Contract Owner may elect to have premiums accumulate on a variable basis
and/or on a fixed basis. Premiums may be allocated, as designated by the
Contract Owner, to one or more Subaccounts of LBVIP Variable Annuity Account
I (the "Variable Account"), a separate account of LBVIP, and/or to the Fixed
Account (which is the general account of LBVIP, and which pays interest at a
guaranteed fixed rate). The assets of each Subaccount will be invested
solely in a corresponding Portfolio of LB Series Fund, Inc. (the "Fund"),
which is a diversified, open-end management investment company (commonly
known as a "mutual fund"). The accompanying Prospectus for the Fund
describes the investment objectives and attendant risks of the seven
Portfolios of the Fund -- the Growth Portfolio, the High Yield Portfolio,
the Income Portfolio, the Opportunity Growth Portfolio, the Mid Cap Growth
Portfolio, the World Growth Portfolio, and the Money Market Portfolio.
Additional Subaccounts (together with the related additional Portfolios of
the Fund) may be added in the future. The Accumulated Value of the Contract
in the Subaccounts and, except to the extent fixed amount annuity payments
are elected by the Contract Owner, the amount of annuity payments will vary,
primarily based on the investment experience of the Portfolio whose shares
are held in the Subaccounts designated. Premiums allocated to the Fixed
Account will accumulate at fixed rates of interest declared by LBVIP.
This Prospectus describes only the elements of the Contract pertaining to
the Variable Account except where reference to the Fixed Account of the
Contract is specifically made.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------
This Prospectus sets forth concisely the information about the Contract that
a prospective investor ought to know before investing, and should be read
and kept for future reference. It is valid only when accompanied or
preceded by the current Prospectus of LB Series Fund, Inc.
----------------------------------
The date of this Prospectus is May 1, 1998.
[Continued from cover page]
On the date LBVIP approves the Contract Owner's application, the initial
premium (after deduction of any required premium taxes) and any interest
accumulations accrued during the underwriting period will be allocated among
the Subaccount(s) and the Fixed Account according to the Contract Owner's
instructions. See "THE CONTRACTS--Allocation of Premiums." Subsequent
premiums will be allocated among the Subaccounts and the Fixed Account in
the same proportion as the initial premium, at the end of the Valuation
Period in which the subsequent premium is received by LBVIP.
Additional information about the Contract, LBVIP and the Variable Account,
contained in a Statement of Additional Information dated May 1, 1998, has
been filed with the Securities and Exchange Commission and is available upon
request without charge by writing to Lutheran Brotherhood Variable Insurance
Products Company, 625 Fourth Avenue South, Minneapolis, Minnesota 55415. The
Statement of Additional Information relating to the Contract having the same
date as this Prospectus is incorporated by reference in this Prospectus. The
Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains the Statement of Additional Information material incorporated
by reference herein and other information regarding the Contract. The Table
of Contents for the Statement of Additional Information may be found on page
35 of this Prospectus. Information about the Fixed Account may be found in
the Appendix to this Prospectus.
TABLE OF CONTENTS
Page
DEFINITIONS 4
SUMMARY FEE TABLE 6
SUMMARY 8
LBVIP, LUTHERAN BROTHERHOOD, THE VARIABLE ACCOUNT AND
THE FUND 13
LBVIP and Lutheran Brotherhood 13
The Variable Account 13
LB Series Fund, Inc. 13
Addition, Deletion or Substitution of Investments 16
THE CONTRACTS 16
Issuance of a Contract 16
Free Look Period 16
Allocation of Premium 17
Accumulated Value; Accumulation Units and Accumulation Unit Value 18
Death Benefit Before the Maturity Date 19
Death Benefit After the Maturity Date 20
Surrender (Redemption) 20
Transfers 20
Telephone Transfers 21
Special Transfer Service -- Dollar Cost Averaging 21
Assignments 21
Contract Owner, Beneficiaries and Annuitants 22
CHARGES AND DEDUCTIONS 22
Surrender Charge (Contingent Deferred Sales Charge) 22
Administrative Charge 23
Mortality and Expense Risk Charge 24
Investment Advisory Fee of the Fund 24
Premium Taxes 24
Other Taxes 25
Sufficiency of Charges 25
ANNUITY PROVISIONS 25
Maturity Date 25
Settlement Options 25
Frequency and Amount of Annuity Payments 26
Subaccount Annuity Unit Value 27
Assumed Investment Rate 27
GENERAL PROVISIONS 27
Postponement of Payments 27
Date of Receipt 27
Reports to Contract Owners 28
Contract Inquiries 28
FEDERAL TAX STATUS 28
Introduction 28
LBVIP's Tax Status 28
Taxation of Annuities in General 28
Qualified Plans 29
1035 Exchanges 31
Diversification Requirements 31
Withholding 32
Other Considerations 32
EMPLOYMENT-RELATED BENEFIT PLANS 32
VOTING RIGHTS 32
SALES AND OTHER AGREEMENTS 33
YEAR 2000 34
LEGAL PROCEEDINGS 34
LEGAL MATTERS 34
FINANCIAL STATEMENTS AND EXPERTS 34
FURTHER INFORMATION 34
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS 35
ORDER FORM 35
APPENDIX A -- MORE INFORMATION ABOUT THE GENERAL ACCOUNT 36
APPENDIX B -- ILLUSTRATION OF MONTHLY VARIABLE ANNUITY
SETTLEMENT OPTION 37
DEFINITIONS
Accumulated Value. The total amount of value held under a Contract at any
time prior to and including the Maturity Date. A Contract's Accumulated
Value will reflect the investment experience of the chosen Subaccounts of
the Variable Account, any amount of value in the Fixed Account, any premiums
paid, any surrenders, and any charges assessed in connection with the
Contract.
Accumulation Unit. A unit of measure by which the value of the Contract's
interest in each Subaccount is determined.
Accumulation Unit Value. The value of each Accumulation Unit representing
the Contract's interest in each Subaccount.
Annuitant. The person named in the Contract whose life is used to determine
the duration of annuity payments involving life contingencies.
Annuity Unit. A unit of measure which is used in the calculation of the
second and each subsequent variable annuity payment.
Annuity Unit Value. The value of each Annuity Unit.
Beneficiary. The person named by the Contract Owner to receive the
Contract's death benefit.
Contract. The individual flexible premium variable annuity contract offered
by LBVIP and described in this Prospectus.
Contract Anniversary. The same date in each succeeding year as the Date of
Issue.
Contract Owner. The person who controls all the rights under the Contract
while the Annuitant is alive. The Annuitant is the Contract Owner, unless
another owner is named in the Contract application.
Contract Year. The period from one Contract Anniversary to the next. The
first Contract Year will be the period beginning on the Date of Issue and
ending on the first Contract Anniversary.
Date of Issue. The date on which the application and the first premium are
received by LBVIP at its Home Office.
Fixed Account. The Fixed Account is the general account of LBVIP, which
consists of all assets of LBVIP other than those allocated to a separate
account of LBVIP. Premium payments allocated to the Fixed Account will be
paid a fixed rate of interest (which may not be less than 4.0%) declared by
LBVIP at least annually. Amounts accumulated in the Fixed Account are
guaranteed by LBVIP. (See Appendix A.)
Fund. LB Series Fund, Inc., which is described in the accompanying
Prospectus.
Home Office. LBVIP's office at 625 Fourth Avenue South, Minneapolis,
Minnesota 55415 or such other office as LBVIP shall specify in a notice to
the Contract Owner.
LBSC. Lutheran Brotherhood Securities Corp., which is an indirect subsidiary
of Lutheran Brotherhood and which acts as the principal underwriter of the
Contracts.
LBVIP. Lutheran Brotherhood Variable Insurance Products Company, which is an
indirect subsidiary of Lutheran Brotherhood and which is the issuer of the
Contracts.
LBVIP Representative. A person who is licensed by state insurance officials
to sell the Contracts and who is also a registered representative of LBSC.
Lutheran Brotherhood ("LB"). A fraternal benefit society organized under the
laws of the State of Minnesota and owned by and operated for its members,
and which acts as the investment adviser to the Fund.
Maturity Date. The date on which the annuity payments are to start as
selected by the Contract Owner, which date must be a Contract Anniversary at
least three years after the Date of Issue.
Minimum Death Benefit Date. For purposes of calculating the amount of the
death benefit before the Maturity Date, the first such date is the Date of
Issue of the Contract. Thereafter, such date occurs every six years on the
Contract Anniversary.
Portfolio. A Portfolio of the Fund. Each Subaccount invests exclusively in
the shares of a corresponding Portfolio of the Fund.
Qualified Plan. A retirement plan qualified under Section 401, 403 408 or
408A or similar provisions of the Internal Revenue Code.
Subaccount. A subdivision of the Variable Account. Each Subaccount invests
exclusively in the shares of a corresponding Portfolio of the Fund.
Currently, there are seven Subaccounts: the Growth Subaccount (which invests
exclusively in the Growth Portfolio); the High Yield Subaccount (which
invests exclusively in the High Yield Portfolio); the Income Subaccount
(which invests exclusively in the Income Portfolio); the Opportunity Growth
Subaccount (which invests exclusively in the Opportunity Growth Portfolio);
the Mid Cap Growth Subaccount (which invests exclusively in the Mid Cap
Growth Portfolio); the World Growth Subaccount (which invests exclusively in
the World Growth Portfolio); and the Money Market Subaccount (which invests
exclusively in the Money Market Portfolio).
Valuation Date. Each day the New York Stock Exchange is open for trading and
any other day on which there is sufficient trading in the securities of a
Portfolio of the Fund such that the current net asset value of its shares
might be materially affected.
Valuation Period. The period commencing at the close of business of a
Valuation Date and ending at the close of business of the next Valuation
Date.
Variable Account. LBVIP Variable Annuity Account I, which is a separate
account of LBVIP. The Subaccounts are subdivisions of the Variable Account.
Written Notice. A written request or notice signed by the Contract Owner and
received by LBVIP at its Home Office.
SUMMARY FEE TABLE
The Contract Owner may allocate premiums and transfer Accumulated Value to
any one of seven Subaccounts -- Growth, High Yield, Income , Opportunity
Growth, Mid Cap Growth, World Growth and Money Market -- or to the Fixed
Account or to any combination of the Subaccounts and the Fixed Account. The
following table shows the various fees and expenses associated with the
Contract.
Contract Owner Transaction Expenses
Sales Load Imposed on Purchase (as a percentage of purchase
payments) 0%
Maximum Deferred Sales Load (as a percentage of Excess
Amount surrendered) 6%(1)
Exchange Fee 0%
Annual Contract Fee $30.00(2)
Annual Expenses For Growth, High Yield, Income, Money Market,
Mid Cap Growth and Opportunity Growth Subaccounts
(as a percentage of average daily Accumulated Value or Annuity
Unit Value) Mortality and Expense Risk Fees 1.10%(3)
Total Subaccount Annual Expenses 1.10%
Annual Expenses For Growth, High Yield, Income, Money Market,
Mid Cap Growth and Opportunity Growth Portfolios
(as a percentage of Portfolio average daily net assets)
Management Fees (Investment Advisory Fees) 0.40%(4)
Other Expenses After Expense Reimbursement 0%(5)
Total Portfolio Annual Expenses 0.40%
EXAMPLE (6)
1 year 3 years 5 years 10 years
------ ------- ------- --------
If you surrender or annuitize your
Contract at the end of the
applicable time period:
You would pay the following expenses
on a $1,000 investment, assuming
5% annual return on assets $71 $88 $104 $180
If you do not surrender or annuitize
your Contract:
You would pay the following expenses
on a $1,000 investment, assuming
5% annual return on assets $15 $48 $ 82 $180
Annual Expenses For World Growth Subaccount
(as a percentage of average daily Accumulated Value or Annuity Unit Value)
Mortality and Expense Risk Fees 1.10%(3)
Total Subaccount Annual Expenses 1.10%
Annual Expenses For World Growth Portfolio
(as a percentage of Portfolio average daily net assets)
Management Fees (Investment Advisory Fees) 0.85%(4)
Other Expenses After Expense Reimbursement 0%(5)
Total Portfolio Annual Expenses 0.85%
EXAMPLE (6)
1 year 3 years 5 years 10 years
------ ------- ------- --------
If you surrender or annuitize your
Contract at the end of the
applicable time period:
You would pay the following expenses
on a $1,000 investment, assuming 5%
annual return on assets $76 $101 $127 $229
If you do not surrender or annuitize
your Contract:
You would pay the following expenses
on a $1,000 investment, assuming
5% annual return on assets $20 $ 62 $106 $229
_________________
(1) See "CHARGES AND DEDUCTIONS--Surrender Charge (Contingent Deferred Sales
Charge)". A surrender charge is deducted only if a full or partial surrender
occurs during the first six Contract Years; no surrender charge is deducted
for surrenders occurring in Contract Years seven and later. The surrender
charge will also be deducted at the time annuity payments begin, except
under certain circumstances. Up to 10% of the Accumulated Value existing at
the time the first surrender in a Contract Year is made may be surrendered
without charge; only the Excess Amount will be subject to a surrender
charge. The maximum charge is 6% of the Excess Amount and is in effect for
the first Contract Year. Thereafter, the surrender charge decreases by 1%
each subsequent Contract Year.
(2) See "CHARGES AND DEDUCTIONS--Administrative Charge". A $30 annual
administrative charge is deducted on each Contract Anniversary only if, on
that Contract Anniversary, the total of premiums paid under the Contract
minus all prior surrenders is less than $5,000 and the Accumulated Value is
less than $5,000. The $30 fee is a Contract charge and is deducted
proportionately from the Subaccounts and the Fixed Account that make up the
Contract's Accumulated Value.
(3) See "CHARGES AND DEDUCTIONS--Mortality and Expense Risk Charge".
(4) See "CHARGES AND DEDUCTIONS--Investment Advisory Fee of the Fund".
(5) The amount shown for Fund Annual Expenses does not reflect a deduction
for operating expenses of the Fund, other than the investment advisory fee,
because LBVIP and its affiliate, LB, have agreed to reimburse the Fund for
these operating expenses. For the fiscal year of the Fund ending December
31, 1997, the Fund was reimbursed approximately $2,631,150 for such
operating expenses. See "LBVIP, LUTHERAN BROTHERHOOD, THE VARIABLE ACCOUNT
AND THE FUND--LB Series Fund, Inc.".
(6) In this example, the $30 annual administrative charge is approximated as
a .01% charge based on LBVIP's average contract size.
The purpose of the table is to assist the Contract Owner in understanding
the various costs and expenses that a Contract Owner will bear directly or
indirectly. The table reflects expenses of the Variable Account as well as
the Fund. Cross-references to the relevant sections of the Prospectus for
more complete descriptions of the various costs and expenses have been
provided. Premium taxes may be applicable depending on various states' laws.
THE EXAMPLE SHOWING EXPENSES FOR SURRENDERS AT 1, 3, 5 AND 10-YEAR PERIODS
SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
SUMMARY
The Contracts
Issuance of a Contract. The Contracts are individual flexible premium
variable annuity contracts issued by LBVIP. In order to purchase a Contract,
application must be made to LBVIP through a licensed LBVIP Representative,
who is also a registered representative of LBSC. The Contracts are offered
only in situations in which the Annuitant is eligible for membership in
Lutheran Brotherhood, unless otherwise required by state law. The Contracts
may be sold to or in connection with retirement plans which may or may not
qualify for special Federal tax treatment under the Internal Revenue Code.
Annuity payments under the Contracts are deferred until a selected later
date.
The minimum amount LBVIP will accept as an initial premium is $600 on an
annualized basis. LBVIP may, however, in its sole discretion, waive such
minimum initial premium requirements. Subsequent premiums may be paid under
the Contracts, but LBVIP may choose not to accept any subsequent premium if
it is less than $50.
Free Look Period. The Contract Owner has the right to return the Contract
within 10 days after such Contract Owner receives the Contract. See "THE
CONTRACTS--Free Look Period".
Allocation of Premiums. Premiums under the Contract may be allocated to one
or more Subaccounts of the Variable Account and to the Fixed Account as
designated by the Contract Owner. The assets of each Subaccount will be
invested solely in a corresponding Portfolio of the Fund--the Growth
Portfolio, the High Yield Portfolio, the Income Portfolio, the Opportunity
Growth Portfolio, Mid Cap Growth Portfolio, the World Growth Portfolio, or
the Money Market Portfolio. See "LBVIP, LUTHERAN BROTHERHOOD, THE VARIABLE
ACCOUNT AND THE FUND" and "THE CONTRACTS--Allocation of Premiums". The
Accumulated Value of the Contract in the Subaccounts and, except to the
extent fixed amount annuity payments are elected by the Contract Owner, the
amount of annuity payments will vary, primarily based on the investment
experience of the Portfolios whose shares are held in the Subaccounts
designated. Premiums allocated to the Fixed Account will accumulate at fixed
rates of interest declared by LBVIP. (See Appendix A.) See "THE CONTRACTS--
Accumulated Value; Accumulation Units and Accumulation Unit Value".
On the date LBVIP approves the Contract Owner's application, LBVIP will
transfer from the general account the initial premium (after deduction of
any required premium taxes) and any interest accrued during the underwriting
period among the Subaccount(s) and/or Fixed Account according to the
Contract Owner's instructions. See "THE CONTRACTS--Allocation of Premiums."
Subsequent premiums will be allocated among the Subaccounts and the Fixed
Account in the same proportion as the initial premium, at the end of the
Valuation Period in which the subsequent premium is received by LBVIP. See
"THE CONTRACTS--Allocation of Premiums".
Surrenders. If a Written Notice from the Contract Owner requesting a
surrender is received on or before the Maturity Date, all or part of the
Accumulated Value of a Contract will be paid to the Contract Owner after
deducting any applicable surrender charge. Partial surrenders must be for at
least $500, and may be requested only if the remaining Accumulated Value is
not less than $1,000. Under certain circumstances the Contract Owner may
make surrenders after the Maturity Date. See "THE CONTRACTS--Surrender
(Redemption)".
Transfers. On or before the Maturity Date the Contract Owner may request the
transfer of all or a part of a Contract's Accumulated Value to other
Subaccounts or to the Fixed Account. The total amount transferred each time
must be at least $500 (unless the total value in the Subaccount or the Fixed
Account is less than $500, in which case the entire amount may be
transferred). LBVIP reserves the right to limit the number of transfers in
any Contract Year, provided that at least two such transfers each Contract
Year will always be allowed. With respect to the Fixed Account, transfers
out of the Fixed Account are limited to only one each Contract Year and must
be made on or within 45 days after a Contract Anniversary. After the
Maturity Date, the Contract Owner may, by Written Notice and only once each
Contract Year, change the percentage allocation of variable annuity payments
among the available Subaccounts. See "THE CONTRACTS--Transfers".
Charges and Deductions
The following charges and deductions are made in connection with the
Contracts:
Surrender Charge (Contingent Deferred Sales Charge). No charge for sales
expense is deducted from premiums at the time premiums are paid. However, if
a Contract is surrendered in whole or in part before it has been in force
for six full Contract Years, a surrender charge is deducted from the amount
surrendered; provided that in each Contract Year, a Contract Owner may
surrender without a surrender charge up to 10% of a Contract's Accumulated
Value existing at the time the first surrender is made in that Contract
Year. The maximum charge is 6% of the Excess Amount and is in effect for the
first Contract Year. Thereafter, the surrender charge decreases by 1% each
subsequent Contract Year. In no event will the total surrender charge on any
one Contract exceed 6 1/2% of total gross premiums paid under the Contract.
The surrender charge will also be deducted at the time annuity payments
begin except as set forth under the heading "CHARGES AND DEDUCTIONS--
Surrender Charge (Contingent Deferred Sales Charge)".
Administrative Charge. On each Contract Anniversary prior to and including
the Maturity Date, LBVIP deducts an annual administrative charge of $30 from
the Accumulated Value of each Contract. (This charge will be lower to the
extent legally required in some states.) No such charge is deducted if on
that Contract Anniversary the total amount of premiums paid under the
Contract, less the amount of all prior partial surrenders (which includes
the amount of related surrender charges), is equal to or greater than
$5,000, or the Accumulation Value is greater than $5,000.
Mortality and Expense Risk Charge. LBVIP deducts a daily mortality and
expense risk charge to compensate LBVIP for assuming certain mortality and
expense risks. The charge is deducted from the net assets of the Variable
Account. The charge is currently in an amount equal to an annual rate of
1.10% (approximately 0.80% for mortality risk and approximately 0.30% for
expense risk) of the average daily net assets of each Subaccount in the
Variable Account. This charge is guaranteed not to increase above an annual
rate of 1.25%.
Investment Advisory Fee of the Fund. Because the Variable Account purchases
shares of the Fund, the net assets of the Variable Account will reflect the
investment advisory fee incurred by the Fund. LB is paid a daily fee by the
Fund for its investment management services equal to an annual rate of 0.40%
of the aggregate average daily net assets of the Money Market, Income, High
Yield, Growth, Mid Cap Growth, and Opportunity Growth Portfolios. LB also
receives a daily investment advisory fee from the Fund equal to .85% of the
aggregate average daily net assets of the World Growth Portfolio.
Premium Taxes. If state or other premium taxes are applicable to a Contract,
they will be deducted, depending on when such taxes are paid to the taxing
authority, either (a) from premiums as they are received, or (b) from the
Accumulated Value upon (i) a partial or total surrender of the Contract or
(ii) application of the Accumulated Value to a settlement option at the
Maturity Date.
For a more detailed description of these charges and deductions, see
"CHARGES AND DEDUCTIONS".
Annuity Provisions
The Contract Owner may select an annuity settlement option or options, and
may select whether payments are to be made on a fixed or variable (or a
combination of fixed and variable) basis. The Contract Owner may also elect
to receive a single sum by surrendering the Contract on the Maturity Date
and paying any applicable surrender charge. See "ANNUITY PROVISIONS".
Federal Tax Status
For a description of the Federal income tax status of annuities, see
"FEDERAL TAX STATUS -- Taxation of Annuities in General". Generally, a
distribution from a Contract before the taxpayer attains age 59 1/2 will
result in a penalty tax of 10% of the amount of the distribution which is
includable in gross income.
Condensed Financial Information
The following condensed financial information is derived from the financial
statements of the Variable Account. The data should be read in conjunction
with the financial statements, related notes and other financial information
included in the Statement of Additional Information.
Selected data for Accumulation Units outstanding throughout the period
ending December 31:
Opportunity Growth Subaccount
-----------------------------
1996 1997
---- ----
Accumulation Unit Value:
Beginning of period $10.00** $11.79
End of period 11.79 11.77
Number of Accumulation Units
outstanding at end of period 10,907,991 15,467,334
World Growth Subaccount
-----------------------
1996 1997
---- ----
Accumulation Unit Value:
Beginning of period $10.00** $10.93
End of period 10.93 11.11
Number of Accumulation Units
outstanding at end of period 8,406,625 12,001,805
<TABLE>
<CAPTION>
Growth Subaccount
----------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $29.52 $24.38 $17.95 $19.04 $17.49
End of period 38.02 29.52 24.38 17.95 19.04
Number of Accumulation
Units outstanding at
end of period 40,950,649 39,275,957 37,698,847 34,921,280 26,757,458
Growth Subaccount
----------------------
1992 1991 1990 1989 1988
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $16.34 $11.70 $12.070 $ 9.671 $10.000*
End of period 17.49 16.34 11.70 12.070 9.671
Number of Accumulation
Units outstanding at
end of period 12,462,929 5,373,171 2,596,180 1,125,739 165,584
High Yield Subaccount
--------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $24.35 $22.06 $18.64 $19.71 $16.21
End of period 27.50 24.35 22.06 18.64 19.71
Number of Accumulation
Units outstanding at
end of period 31,175,954 29,861,418 28,924,180 28,230,326 21,866,400
High Yield Subaccount
--------------------------
1992 1991 1990 1989 1988
------ ------ ------ ------ ------
<C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $13.66 $10.21 $10.709 $10.503 $10.000*
End of period 16.21 13.66 10.21 10.709 10.503
Number of Accumulation
Units outstanding at
end of period 9,227,427 3,720,209 2,148,885 1,490,329 248,206
Income Subaccount
----------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $19.39 $18.98 $16.07 $17.05 $15.43
End of period 20.86 19.39 18.98 16.07 17.05
Number of Accumulation
Units outstanding at
end of period 31,175,954 31,200,437 33,922,942 34,668,366 32,678,803
Income Subaccount
----------------------
1992 1991 1990 1989 1988
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $14.29 $12.06 $11.402 $10.275 $10.000*
End of period 15.43 14.29 12.06 11.402 10.275
Number of Accumulation
Units outstanding at
end of period 16,151,473 6,753,120 3,405,565 1,573,113 208,911
Money Market Subaccount
--------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $1.48 $1.43 $1.36 $1.33 $1.30
End of period 1.55 1.48 1.43 1.36 1.33
Number of Accumulation
Units outstanding at
end of period 41,033,991 37,465,708 28,959,961 23,631,217 17,939,270
Money Market Subaccount
--------------------------------
1992 1991 1990 1989 1988
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Accumulation Unit Value:
Beginning of period $1.27 $1.21 $1.137 $1.054 $1.000*
End of period 1.30 1.27 1.21 1.137 1.054
Number of Accumulation
Units outstanding at
end of period 19,709,050 15,364,799 13,983,957 6,831.477 1,708,264
- ----------------------------
*Commencing January 4, 1988, the date the Registration Statement for the
Variable Account was declared effective.
**Commencing January 18, 1996.
Commencing January 30, 1998, the Mid Cap Growth Subaccount was made
available for investment.
The financial statements of LBVIP are also contained in the Statement of
Additional Information.
Calculation of Performance
From time to time the Variable Account advertises the Money Market
Subaccount's "yield" and "effective yield". Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Subaccount refers to the income generated by an investment in
the Subaccount over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized". That is, the amount of
income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of
the investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the Subaccount is assumed
to be reinvested. The "effective yield" will be slightly higher than the
"yield" because of the compounding effect of this assumed reinvestment. The
annualized current yield and effective yield for the seven-day base period
ended December 31, 1997, was 4.51% and 4.61%, respectively. For more
information, see the Statement of Additional Information.
Also, the Variable Account may advertise for the Subaccounts other than the
Money Market Subaccount a yield quotation based on a 30-day (or one month)
period computed by dividing the net investment income per Accumulation Unit
earned during the period (the net investment income earned by the Fund
portfolio attributable to shares owned by the Subaccount less expenses
incurred during the period) by the maximum offering price per Accumulation
Unit on the last day of the period. The current yield for the 30-day based
period ended December 31, 1997 for the High Yield Subaccount was 8.08%. The
current yield for the same 30-day base period for the Income Subaccount was
5.38%. For more information, see the Statement of Additional Information.
From time to time, LBVIP may advertise the average annual total return
quotations for the Subaccounts for the 1, 5 and 10-year periods computed by
finding the average annual compounded rates of return over the 1, 5 and 10-
year periods that would equate the initial amount invested to the ending
redeemable value of a hypothetical $1,000 payment made at the beginning of
the 1, 5 or 10-year periods. If the assumed investment was made less than 10
years from the date of the quotation, the total return from the date of such
investment will be given.
The average annual total returns for the 1, 3 and 5-year periods through
December 31, 1997 and for the period from commencement of operations through
December 31, 1997 for the Subaccounts are as follows:
Commencement
1 Year 3 Year 5 Year of Operations
----- ------ ------ --------------
Opportunity Growth
Subaccount (1/18/96) -5.57% -- -- 6.18%*
World Growth Subaccount (1/18/96) -3.81%* -- -- 3.08%*
Growth Subaccount (3/8/88) 21.83%* 26.86%* 16.38%* 14.56%*
High Yield Subaccount (3/8/88) 6.77%* 12.44%* 10.74%* 10.84%*
Income Subaccount (3/8/88) 1.76%* 7.75%* 5.82%* 7.77%*
Money Market Subaccount (2/18/88) -1.35%* 3.03%* 3.12%* 4.52%*
*Does not include the annual administrative charge of $30 deducted from any
Contract for which the total of premiums paid under such Contract minus all
prior surrenders is less than $5,000 and the Accumulated Value is less than
$5,000. Inclusion of the administrative charge would reduce the total
return figures shown above. Assumes applicable sales charge upon surrender.
Premium taxes may apply depending on various states' laws.
Performance information is not available for the Mid Cap Growth Subaccount
since it is new.
Average annual total return quotations assume a steady rate of growth.
Actual performance fluctuates and will vary from the quoted results for
periods of time with the quoted periods. For more information, see the
Statement of Additional Information.
The Variable Account's performance reported from time to time in
advertisements and sales literature may be compared with that of other
insurance company separate accounts or mutual funds included in the
generally accepted indices, analyses or rankings prepared by Lipper
Analytical Service, Inc., Standard & Poor's Corporation, Morningstar, Inc.,
VARDS, Dow Jones or similar independent rating or statistical investment
services that monitor the performance of insurance company separate accounts
or mutual funds. Performance of the Variable Account may be quoted or
compared to rankings, yields or returns as published or prepared by
independent rating or statistical services or publishers or publications
such as THE BANK RATE MONITOR NATIONAL INDEX, BARRON'S, BUSINESS WEEK,
DONOGHUE'S MONEY MARKET FUND REPORT, FINANCIAL SERVICES WEEK, FINANCIAL
TIMES, FINANCIAL WORLD, FORBES, FORTUNE, GLOBAL INVESTOR, INSTITUTIONAL
INVESTOR, INVESTOR'S DAILY, KIPLINGER'S PERSONAL FINANCE, LIPPER ANALYTICAL
SERVICES, MONEY, MUTUAL FUND FORECASTER, NEWSWEEK, THE NEW YORK TIMES,
PERSONAL INVESTOR, STANGER REPORT, SYLVIA PORTER'S PERSONAL FINANCE, USA
TODAY, U.S. NEWS AND WORLD REPORT, THE WALL STREET JOURNAL and WIESENBERGER
INVESTMENT COMPANIES SERVICE.
LBVIP, LUTHERAN BROTHERHOOD, THE VARIABLE ACCOUNT
AND THE FUND
LBVIP and Lutheran Brotherhood
The Contracts are issued by LBVIP. LBVIP, organized in 1982, is a stock life
insurance company incorporated under the laws of the State of Minnesota.
LBVIP is currently licensed to transact life insurance business in 42 states
and the District of Columbia.
LBVIP is an indirect subsidiary of Lutheran Brotherhood, a fraternal benefit
society owned by and operated for its members. Lutheran Brotherhood was
founded in 1917 under the laws of the State of Minnesota, and at the end of
1997 had total assets of approximately $13.2 billion.
Lutheran Brotherhood has invested approximately $115.8 million in LBVIP, to
help LBVIP meet capitalization requirements of various states, and may
invest additional amounts in LBVIP in the future (though it is not currently
legally obligated to do so). The assets of Lutheran Brotherhood do not
support the benefits payable under the Contracts described in this
Prospectus.
LBVIP is subject to regulation by the Insurance Division of the State of
Minnesota as well as by the insurance departments of all the other states
and jurisdictions in which it does business. LBVIP submits annual reports on
its operations and finances to insurance officials in such states and
jurisdictions. The forms of Contracts described in this Prospectus are filed
with and (where required) approved by insurance officials in each state and
jurisdiction in which Contracts are sold. LBVIP is also subject to certain
Federal securities laws and regulations.
The Variable Account
The Variable Account is a separate account of LBVIP, established by the
Board of Directors of LBVIP in 1987 pursuant to the laws of the State of
Minnesota. The Variable Account meets the definition of a "separate account"
under the federal securities laws. LBVIP has caused the Variable Account to
be registered with the Securities and Exchange Commission (the "SEC") as a
unit investment trust under the Investment Company Act of 1940 (the "1940
Act"). Such registration does not involve supervision by the SEC of the
management or investment policies or practices of the Variable Account.
The assets of the Variable Account are owned by LBVIP, and LBVIP is not a
trustee with respect to such assets. However, the Minnesota laws under which
the Variable Account was established provide that the Variable Account shall
not be chargeable with liabilities arising out of any other business LBVIP
may conduct. LBVIP may transfer to its general account assets of the
Variable Account which exceed the reserves and other liabilities of the
Variable Account.
Income and realized and unrealized gains and losses from each Subaccount of
the Variable Account are credited to or charged against that Subaccount
without regard to any of LBVIP's other income, gains or losses. LBVIP may
accumulate in the Variable Account the charge for expense and mortality
risk, mortality gains and losses and investment results applicable to those
assets that are in excess of net assets supporting the Contracts.
LB Series Fund, Inc.
Each Contract Owner may allocate the premiums paid under the Contract to one
or more of the seven Subaccounts of the Variable Account -- the Growth
Subaccount, the High Yield Subaccount, the Income Subaccount, the
Opportunity Growth Subaccount, the Mid Cap Growth Subaccount, the World
Growth Subaccount and the Money Market Subaccount. The assets of each such
Subaccount will be invested in the corresponding Portfolio (the Growth
Portfolio, the Mid Cap Growth Portfolio, the High Yield Portfolio, the
Income Portfolio, the Opportunity Growth Portfolio, the World Growth
Portfolio or the Money Market Portfolio) of the Fund. The investment
objectives of the Portfolios of the Fund (individually a "Portfolio" and
collectively the "Portfolios") are:
Growth Portfolio. To achieve long-term growth of capital through investment
primarily in common stocks of established corporations that appear to offer
attractive prospects of a high total return from dividends and capital
appreciation.
High Yield Portfolio. To achieve a higher level of income through a
diversified portfolio of high yield securities ("junk bonds") which involve
greater risks than higher quality investments, while also considering growth
of capital as a secondary objective.
Income Portfolio. To achieve a high level of income over the longer term
while providing reasonable safety of capital through investment primarily in
readily marketable intermediate and long-term fixed income securities.
Opportunity Growth Portfolio. To achieve long term growth of capital by
investing primarily in a professionally managed diversified portfolio of
smaller capitalization common stocks.
Mid Cap Growth Portfolio. To achieve long term growth of capital by
investing primarily in a professionally managed diversified portfolio of
common stocks of companies with medium market capitalizations.
World Growth Portfolio. To achieve long-term growth of capital by investing
primarily in a professionally managed diversified portfolio of common stocks
of established, non-U.S. companies.
Money Market Portfolio. To achieve the maximum current income that is
consistent with stability of capital and maintenance of liquidity through
investment in high-quality, short-term debt obligations.
No assurance can be given that the Portfolios of the Fund will achieve their
respective investment objectives.
Shares of the Fund purchased by each Subaccount of the Variable Account will
be held by LBVIP as custodian for the Variable Account.
The Fund is designed to provide an investment vehicle for variable annuity
and variable life insurance contracts. Shares of the Fund will be sold to
other insurance company separate accounts of LBVIP and separate accounts of
its indirect parent, Lutheran Brotherhood ("LB"), and the Fund may in the
future create new portfolios. It is conceivable that in the future it may be
disadvantageous for both variable annuity separate accounts and variable
life insurance separate accounts and for LBVIP and LB to invest
simultaneously in the Fund, although LBVIP does not foresee any such
disadvantages to either variable annuity or variable life insurance contract
owners. The management of the Fund intends to monitor events in order to
identify any material conflicts between such contract owners and to
determine what action, if any, should be taken in response. Such action
could include the sale of Fund shares by one or more of the separate
accounts, which could have adverse consequences. Material conflicts could
result from, for example, (1) changes in state insurance laws, (2) changes
in Federal income tax law, (3) changes in the investment management of the
Fund, or (4) differences in voting instructions between those given by the
contract owners from the different separate accounts. In addition, if LBVIP
believes the Fund's response to any of those events or conflicts
insufficiently protects Contract Owners, it will take appropriate action on
its own.
The Fund is registered with the SEC under the 1940 Act as a diversified,
open-end management investment company (commonly called a "mutual fund").
This registration does not involve supervision by the SEC of the management
or investment practices or policies of the Fund. Shares of the Fund may be
sold to other separate accounts, and the Fund may in the future create new
Portfolios.
The Variable Account will purchase and redeem shares from the Fund at net
asset value. Shares will be redeemed to the extent necessary for LBVIP to
collect charges under the Contracts, to make payments upon surrenders, to
provide benefits under the Contracts, or to transfer assets from one
Subaccount to another as requested by Contract Owners. Any dividend or
capital gain distribution received from a Portfolio of the Fund will be
reinvested immediately at net asset value in shares of that Portfolio and
retained as assets of the corresponding Subaccount.
The Fund receives investment advice with respect to each of its Portfolios
from LB, which acts as investment adviser to the Fund. LB is a registered
investment adviser under the Investment Advisers Act of 1940. Lutheran
Brotherhood Research Corp. ("LBRC"), an indirect subsidiary of Lutheran
Brotherhood, acted as investment adviser to the Fund until January 1994,
when it was replaced by LB. LBRC provided investment advisory services to
the Fund using personnel and services provided by LB. As investment adviser
to the Fund, LB charges the Fund a daily investment advisory fee equal to an
annual rate of .40% of the aggregate average daily net assets of the Money
Market, Income, High Yield, Growth, Mid Cap Growth, and Opportunity Growth
Portfolios. LB also charges the Fund an annual investment advisory fee
equal to .85% of the aggregate average daily net assets of the World Growth
Portfolio.
The Fund has entered into an Investment Advisory Agreement with LB under
which LB will, subject to the direction of the Board of Directors of the
Fund, carry on the day-to-day management of the Fund, and provide advice and
recommendations with respect to investments and the purchase and sale of
securities in accordance with the Fund's investment objectives, policies and
restrictions. LB also furnishes at its own expenses all necessary
administrative services, office space, equipment and clerical personnel for
servicing the investments of the Fund and maintaining its organization, and
investment advisory facilities and executive and supervisory personnel for
managing the investments and effecting the portfolio transactions of the
Fund. The Investment Advisory Agreement provides that the Fund will pay, or
provide for the payment of, all of its own expenses, including, without
limitation, the compensation of the directors who are not affiliated with LB
or its affiliates, governmental fees, interest charges, taxes, membership
dues in the Investment Company Institute allocable to the Fund, fees and
expenses of the independent auditors, of legal counsel and of any transfer
agent, registrar and dividend disbursing agent of the Fund, expenses of
preparing, printing and mailing prospectuses, shareholders' reports,
notices, proxy statements and reports to governmental officers and
commissions, expenses connected with the execution, recording and settlement
of portfolio security transactions, insurance premiums, fees and expenses of
the Fund's custodian for all services to the Fund, including safekeeping of
funds and securities and keeping of books and calculating the net asset
value of the shares of the Portfolios of the Fund, expenses of shareholders'
meetings and expenses relating to the issuance, registration and
qualification of shares of the Fund. LB and LBVIP have agreed with the Fund
to pay, or to reimburse the Fund for the payment of, all of the foregoing
expenses and all other expense associated with operating the Fund pursuant
to a separate written agreement (the "Expense Reimbursement Agreement"). The
Expense Reimbursement Agreement could be terminated at any time by the
mutual agreement of the Fund, LB and LBVIP, but the Fund and LB and LBVIP
currently contemplate that the Expense Reimbursement Agreement will continue
so long as the Fund remains in existence. If the Expense Reimbursement
Agreement were terminated, the Fund would be required to pay those operating
expenses, which would reduce the net investment return on the shares of the
Fund held by the Subaccounts of the Variable Account.
LB has engaged T. Rowe Price Associates, Inc. ("T. Rowe Price") as
investment sub-adviser for the Opportunity Growth Portfolio. T. Rowe Price
was founded in 1937 and has its principal offices in Baltimore, Maryland.
As of December 31, 1997, T. Rowe Price and its affiliates managed over $124
billion. Richard T. Whitney, Managing Director of T. Rowe Price, is
primarily responsible for day-to-day management of the Opportunity Growth
Portfolio and developing and executing the Portfolio's investment program.
LB pays the Sub-adviser for the Opportunity Growth Portfolio an annual sub-
advisory fee for the performance of sub-advisory services. The fee payable
is equal to .30% of that Portfolio's average daily net assets.
LB has engaged Rowe Price-Fleming International, Inc., ("Price-Fleming") as
investment sub-adviser for the World Growth Portfolio. Price-Fleming was
founded in 1979 as a joint venture between T. Rowe Price Associates, Inc.
and Robert Fleming Holdings Limited. Price-Fleming is one of the world's
largest international mutual fund asset managers with approximately the U.S.
equivalent of $30 billion under management as of December 31, 1997 in its
offices in Baltimore, London, Tokyo and Hong Kong. Price-Fleming has an
investment advisory group that has day-to-day responsibility for managing
the World Growth Portfolio and developing and executing the Portfolio's
investment program.
LB pays the Sub-adviser for the World Growth Portfolio an annual sub-
advisory fee for the performance of sub-advisory services. The fee payable
is equal to a percentage of that Portfolio's average daily net assets. The
percentage varies with the size of the Portfolio's net assets, decreasing as
the Portfolio's assets increase. The formula for determining the sub-
advisory fee is described fully in the prospectus for the Fund.
Each Contract Owner should periodically consider the allocation among the
Subaccounts in light of current market conditions and the investment risks
attendant to investing in the Fund's various Portfolios. A full description
of the Fund, its investment objectives, policies and restrictions, its
expenses, the risks attendant to investing in the Fund's Portfolios and
other aspects of its operation is contained in the accompanying Prospectus
for the Fund, which should be carefully read together with this Prospectus.
Addition, Deletion or Substitution of Investments
LBVIP reserves the right, subject to applicable law, to make additions to,
deletions from, or substitutions for the shares that are held in the
Variable Account or that the Variable Account may purchase. If the shares of
a Portfolio of the Fund are no longer available for investment or if in
LBVIP's judgment further investment in any Portfolio should become
inappropriate in view of the purposes of the Variable Account, LBVIP may
redeem the shares, if any, of that Portfolio and substitute shares of
another registered open-end management company. LBVIP will not substitute
any shares attributable to a Contract interest in a Subaccount of the
Variable Account without notice and prior approval of the SEC and state
insurance authorities, to the extent required by applicable law.
LBVIP also reserves the right to establish additional Subaccounts of the
Variable Account, each of which would invest in shares corresponding to a
new Portfolio of the Fund or in shares of another investment company having
a specified investment objective. Subject to applicable law and any required
SEC approval, LBVIP may, in its sole discretion, establish new Subaccounts
or eliminate one or more Subaccounts if marketing needs, tax considerations
or investment conditions warrant. Any new Subaccounts may be made available
to existing Contract Owners on a basis to be determined by LBVIP.
If any of these substitutions or changes are made, LBVIP may by appropriate
endorsement change the Contract to reflect the substitution or change. If
LBVIP deems it to be in the best interest of Contract Owners and Annuitants,
and subject to any approvals that may be required under applicable law, the
Variable Account may be operated as a management company under the 1940 Act,
it may be deregistered under that Act if registration is no longer required,
or it may be combined with other LBVIP separate accounts.
THE CONTRACTS
Issuance of a Contract
In order to purchase a Contract, application must be made to LBVIP through a
licensed LBVIP Representative, who is also a registered representative of
LBSC. LBVIP is offering Contracts only in situations in which the Annuitant
is eligible for membership in Lutheran Brotherhood, unless otherwise
required by state law. Contracts may be sold to or in connection with
retirement plans which may or may not be Qualified Plans. LBVIP reserves the
right to reject an application for any reason permitted by law.
The minimum amount LBVIP will accept as an initial premium is $600 on an
annualized basis. LBVIP may, however, in its sole discretion, waive such
minimum initial premium requirements. Subsequent premiums may be paid under
the Contracts, but LBVIP may choose not to accept any subsequent premium if
it is less than $50.
Free Look Period
The Contract provides for an initial "free look" period. The Contract Owner
has the right to return the Contract within 10 days after such Contract
Owner receives the Contract. When LBVIP receives the returned Contract at
its Home Office, it will be cancelled and LBVIP will refund to the Contract
Owner an amount equal to the sum of (i) the Accumulated Value (as of the
date the returned Contract is received by LBVIP at its Home Office or by the
LBVIP Representative from whom the Contract was purchased) plus (ii) the
amount of any charges made for premium taxes plus (iii) the amount
attributable to the Contract for mortality and expense risk charges and
taxes, if any, deducted from the Variable Account plus (iv) the advisory
fees charged by the Fund against the net asset value in the Fund Portfolios
attributable to the Contract's value in the corresponding Subaccounts of the
Variable Account. If, however, applicable state law so requires, the full
amount of any premium received by LBVIP will be refunded.
For Contracts issued in Pennsylvania, when LBVIP receives the returned
Contract at its Home Office, it will be canceled and LBVIP will refund to
the Contract Owner an amount equal to the sum of (i) the difference between
the premiums paid and the amount allocated to the Variable and Fixed
Accounts plus (ii) the Accumulated Value on the day the Contract is received
by the LBVIP Representative from whom the Contract was purchased.
With respect to individual retirement annuities, under the Employee
Retirement Income Security Act of 1974 ("ERISA") a Contract Owner
establishing an Individual Retirement Account must be furnished with a
disclosure statement containing certain information about the Contract and
applicable legal requirements. This statement must be furnished on or before
the date the individual retirement annuity is established. If the Contract
Owner is furnished with such disclosure statement before the seventh day
preceding the date the individual retirement annuity is established, the
Contract Owner will not have any right of revocation under ERISA. If the
disclosure statement is furnished after the seventh day preceding the
establishment of the individual retirement annuity, then the Contract Owner
may give a notice of revocation to LBVIP at any time within seven days after
the Date of Issue. Upon such revocation, LBVIP will refund the premiums paid
by the Contract Owner. The foregoing right of revocation with respect to an
individual retirement annuity is in addition to the return privilege set
forth in the preceding paragraph, i.e., LBVIP will allow a participant
establishing an individual retirement annuity a "ten day free-look",
notwithstanding the provisions of ERISA.
Allocation of Premium
Until the date LBVIP approves the Contract Owner's application, the initial
premium will be deposited into LBVIP's general account. Interest will be
credited on the initial premium held in LBVIP's general account at a rate of
interest determined by LBVIP. On the date LBVIP approves the Contract
Owner's application, LBVIP will add this accumulation amount to the initial
premium and allocate this amount (after deduction of any required premium
taxes) among the Subaccount(s) and/or the Fixed Account according to the
Contract Owner's instructions. If the Date of Issue and the date of
acceptance by LBVIP are the same day, then the initial premium payment will
be immediately allocated among the chosen Subaccount(s) and/or Fixed Account
according to the Contract Owner's instructions.
This initial premium allocation procedure is designed as a way to give the
Contract Owner interest on the initial premium from the Date of Issue to the
date LBVIP approves the Contract Owner's application, with the interest
payment being paid by LBVIP. Other Contract Owners' interests will not be
adversely affected by this initial premium allocation procedure, because
LBVIP, and not the existing Contract Owners, will bear any expenses in
effecting the procedure, including the expense of crediting the interest
accumulations.
If the application is determined to be in good order, LBVIP will allocate
the premium payment (after deduction of any required premium taxes) to the
chosen subaccount and/or Fixed Account within two days of receipt of the
completed application and premium payment. If the application is determined
by LBVIP not to be in good order, LBVIP will attempt to complete the
application within five business days. If the application is not complete at
the end of this period, LBVIP will inform the applicant of the reason for
the delay and that the initial premium will be returned immediately unless
the applicant specifically consents to LBVIP keeping the initial premium
until the application is complete.
The percentages of each premium that may be allocated to any Subaccount of
the Variable Account or the Fixed Account must be in whole numbers and the
sum of the allocation percentages must be 100%. LBVIP reserves the right to
adjust allocation percentages to eliminate fractional percentages.
Subsequent premiums will be allocated among the Subaccounts and the Fixed
Account in the same proportion as the initial premium, at the end of the
Valuation Period in which the subsequent premium is received by LBVIP. The
allocation proportion for future premiums may, however, be changed without
charge at any time by providing LBVIP with Written Notice or by telephone
(if the Contract Owner has completed the Telephone Transaction Authorization
Form). Premiums paid thereafter will be allocated in the manner provided in
such changed instruction, unless another change is subsequently requested.
The values in the Subaccounts of the Variable Account will vary with the
investment experience of the Subaccounts and the Contract Owner bears the
entire investment risk. Contract Owners should periodically review their
allocations of premiums in light of market conditions and the Contract
Owner's overall financial objectives.
Accumulated Value; Accumulation Units and Accumulation Unit Value
The Accumulated Value of the Contract is the total amount of value held
under the Contract at any time prior to and including the Maturity Date. A
Contract's Accumulated Value will reflect the investment experience of the
chosen Subaccounts of the Variable Account, any amount of value in the Fixed
Account, any premiums paid, any surrenders, and any charges assessed in
connection with the Contract. There is no guaranteed minimum Accumulated
Value, and, because a Contract's Accumulated Value on any future date
depends upon a number of variables, it cannot be predetermined.
Calculation of Accumulated Value. The Accumulated Value of the Contract is
determined on each Valuation Date. The Contract's Accumulated Value will be
the aggregate of the values attributable to the Contract in each of the
Subaccounts, determined for each Subaccount by multiplying the Subaccount's
Accumulation Unit Value on the relevant Valuation Date by the number of
Subaccount Accumulation Units allocated to the Contract, plus any amounts in
the Fixed Account.
Determination of Number of Accumulation Units. Any amounts allocated to the
Subaccounts will be converted into Accumulation Units of the Subaccount. The
number of Accumulation Units to be credited to the Contract is determined by
dividing the dollar amount being allocated by the Accumulation Unit Value as
of the end of the Valuation Period during which the amount was allocated.
The number of Subaccount Accumulation Units in any Subaccount will be
increased by (i) any premiums allocated to the Subaccount during the current
Valuation Period, and (ii) any Accumulated Value transferred to the
Subaccount from another Subaccount or from the Fixed Account during the
current Valuation Period. The number of Subaccount Accumulation Units in any
Subaccount will be decreased by (i) any Accumulated Value transferred from
the Subaccount to another Subaccount or to the Fixed Account during the
current Valuation Period, (ii) the amount of any partial surrender
(including any related surrender charge and any charge for premium taxes)
during the current Valuation Period, and (iii) any administrative charge
taken from the Subaccount during the current Valuation Period.
The Accumulation Unit Value is determined before any Contract transactions
on the Valuation Date that would affect the number of Subaccount
Accumulation Units (see the immediately preceding paragraph). If the
Contract's Accumulated Value in the Variable Account is to be calculated for
a day that is not a Valuation Date, the next following Valuation Date will
be used.
Determination of Accumulation Unit Value. The Accumulation Unit Value for a
Subaccount is calculated on each Valuation Date by dividing (1) by (2),
where
(1) is the net result of:
(a) the net asset value of the corresponding Portfolio of the Subaccount at
the end of the current Valuation Period, plus
(b) the amount of any dividend or capital gain distribution declared by the
Portfolio if the "ex-dividend" date occurs during the Valuation Period, plus
or minus
(c) a charge or credit for any taxes reserved which LBVIP determines to be a
result of the investment operation of the Portfolio, minus
(d) the mortality and expense risk charge (see "CHARGES AND DEDUCTIONS--
Mortality and Expense Risk Charge") for each day during the current
Valuation Period (a current charge of .003014%, but never to exceed
.003425%, of the net assets for each day during the current Valuation
Period), and
(2) is the number of Accumulation Units for the Subaccount attributable to
all Contracts, including Accumulation Units held as reserves.
Death Benefit Before the Maturity Date
If the Annuitant, who is the Contract Owner unless another owner is named in
the application, dies before the Maturity Date, the Beneficiary will be
entitled to receive a death benefit under the Contract calculated on the
later of (a) the date LBVIP receives proof of the Annuitant's death and (b)
the date LBVIP receives a written request from the Beneficiary for either a
single sum payment or a settlement option. If no such request is made within
one year from the date of the Annuitant's death, the Beneficiary will be
deemed to have requested a single sum payment. Any proceeds not subsequently
withdrawn will be paid in a lump sum on the date five years after the date
of death. (If the Beneficiary is the spouse of the deceased Contract Owner,
such spouse may, to the extent permitted by law, elect to continue the
Contract in force, in which case such spouse shall become and be treated as
the Annuitant.)
Amount of Death Benefit. If a death benefit has become payable under a
Contract as described above, the amount of the death benefit will be the
greatest of (i) the Accumulated Value calculated on the later of the date
LBVIP receives the proof of death and the written request referred to above,
(ii) the sum of the premiums received by LBVIP under the Contract to the
date of such receipt, less any previous partial surrenders (including any
applicable charges); and (iii) the Accumulated Value on the preceding
Minimum Death Benefit Date plus the sum of premiums received by LBVIP since
that date, less the amount of any partial surrenders since then (including
any applicable charges).
Manner of Payment -- Contracts Not Issued in Connection with Certain
Qualified Plans. If the Contract in question was not issued in connection
with a Qualified Plan, the following rules govern the manner of payment of
the death benefit if the Annuitant dies before the Maturity Date:
(a) if a single sum is requested, the death benefit will be paid within
seven days after the day LBVIP receives the proof of death and written
request referred to above under "Amount of Death Benefit"; or
(b) if a settlement option is requested, (i) it must be a settlement option
that the Contract Owner could have selected before the Maturity Date, and
(ii) the settlement option must provide that the entire amount due under the
Contract will be distributed (1) within five years from the date of death,
or (2) over the life of the Beneficiary or for a period not in excess of the
Beneficiary's life expectancy, provided that the distributions must begin
within one year from the date of death.
Manner of Payment -- Contracts Issued in Connection with Qualified Plans. If
the Contract in question was issued in connection with a Qualified Plan,
certain restrictions on the manner of payment of the death benefit prior to
the Maturity Date, similar to those described above under "Manner of Payment
- -- Contracts Not Issued in Connection with Certain Qualified Plans", are
applicable. The manner of payment of such death benefit under a Contract
issued in connection with a Qualified Plan will be stated in the Contract or
the plan documents. Purchasers acquiring Contracts pursuant to Qualified
Plans should consult qualified pension or tax advisers.
Death Benefit After the Maturity Date
If the Annuitant dies who is the Contract Owner unless another owner is
named in the application after the Maturity Date, the death benefit shall be
as stated in the settlement option in effect, provided, however, that death
benefit payments must be paid at least as rapidly as payments were being
paid under the settlement option in effect on the date of death. With
respect to a Contract issued in connection with a Qualified Plan, certain
additional restrictions on the manner of payment of the death benefit after
the Maturity Date, similar to those described above under "Death Benefit
Before the Maturity Date -- Manner of Payment -- Contracts Not Issued in
Connection with Certain Qualified Plans", are also applicable.
Surrender (Redemption)
If a Written Notice from the Contract Owner requesting a surrender is
received by LBVIP on or before the Maturity Date, all or part of the
Accumulated Value will be paid to the Contract Owner after deducting any
applicable surrender charge and any applicable premium tax (see "CHARGES AND
DEDUCTIONS--Surrender Charge (Contingent Deferred Sales Charge)").
A surrender will take place at the end of the Valuation Period during which
the requirements for surrender are completed and payment will be made within
seven days after such surrender. If a surrender is partial, the surrender
payments will be taken proportionately from all Subaccounts and the Fixed
Account on a basis that reflects their proportionate percentage of the
Accumulated Value. The Contract Owner may select a different allocation
basis with LBVIP's approval. Partial surrenders must be for at least $200,
and may be requested only if the remaining Accumulated Value is not less
than $1,000.
LBVIP may cancel the Contract on any Contract Anniversary if (a) the
Accumulated Value after all charges is less than $1,000 and no premium
payments have been made under the Contract within the last 24 months or (b)
the Accumulated Value as of the Contract Anniversary is less than the
administrative charge (see "CHARGES AND DEDUCTIONS--Administrative Charge").
LBVIP will notify the Contract Owner 60 days before such Contract
Anniversary and provide the Contract Owner the minimum dollar amount
required to keep the Contract in force. Failure to make sufficient payment
will result in cancellation of the Contract on the Contract Anniversary. If
such Contract Anniversary is not a Valuation Date, then the Accumulated
Value will be determined on the next Valuation Date. Upon cancellation under
(a) above, LBVIP will pay the Contract Owner the Accumulated Value as of
such Valuation Date.
After the Maturity Date, certain of the available settlement options (those
that do not involve a life contingency) also permit surrenders by the
Contract Owner. In such cases, the amount available for surrender is the
commuted value of any unpaid annuity installments, computed on the basis of
the assumed interest rate incorporated in such annuity installments.
However, a surrender charge is deducted at the time of annuitization if
these settlement options are selected (see "CHARGES AND DEDUCTIONS--
Surrender Charge (Contingent Deferred Sales Charge")).
Consideration should be given to the tax implications of a surrender prior
to making a surrender request. See "FEDERAL TAX STATUS--Taxation of
Annuities in General".
Transfers
On or before the Maturity Date, the Contract Owner may request by Written
Notice (or by telephone if the Contract Owner has completed the Telephone
Transaction Authorization Form) the transfer, subject to any conditions the
Portfolio whose shares are involved may impose, of all or a part of a
Contract's Accumulated Value among the Subaccounts of the Variable Account
and the Fixed Account. The transfer will be made by LBVIP without charge on
the day Written Notice (or telephonic instructions) requesting such transfer
is received by LBVIP. To accomplish the transfer from the Variable Account,
the Variable Account will surrender Accumulation Units in the particular
Subaccounts and reinvest that value in Accumulation Units of other
particular Subaccounts and the Fixed Account as directed in the request. The
total amount transferred each time must be at least $200 (unless the total
value in a Subaccount of the Variable Account or the Fixed Account is less
than $200, in which case the entire amount may be transferred). LBVIP
reserves the right to limit the number of transfers in any Contract Year,
provided that at least two such transfers each Contract Year will always be
allowed. (For Contracts issued in the state of Texas, the maximum number of
transfers allowed in any Contract Year is twelve.) With respect to the Fixed
Account, transfers out of the Fixed Account are limited to only one during
each Contract Year and must be made on or within 45 days after a Contract
Anniversary. To accomplish a transfer from the Fixed Account, the Fixed
Account will surrender Accumulated Value from the Fixed Account and reinvest
that value in Accumulation Units of particular Subaccounts of the Variable
Account as directed in the request.
After the Maturity Date, the Contract Owner may, by Written Notice and only
once each Contract Year, change the percentage allocation of variable
annuity payments among the available Subaccounts.
Telephone Transfers
Telephone transfers are available when the Contract Owner completes the
Telephone Transaction Authorization Form. If the Contract Owner elects to
complete the Telephone Transaction Authorization Form, the Contract Owner
thereby agrees that LBVIP, its agents and employees will not be liable for
any loss, liability cost or expense when LBVIP, its agents and employees act
in accordance with the telephone transfer instructions that have been
properly received and recorded on voice recording equipment. If a telephone
authorization or instruction, processed after the Contract Owner has
completed the Telephone Transaction Authorization Form, is later determined
not to have been made by the Contract Owner or was made without the Contract
Owner's authorization, and a loss results from such unauthorized
instruction, the Contract Owner bears the risk of this loss. LBVIP will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. In the event LBVIP does not employ such procedures,
LBVIP may be liable for any losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others, requiring forms of
personal identification prior to acting upon telephone instructions,
providing written confirmation of such instructions and/or tape recording
telephone instructions.
Special Transfer Service -- Dollar Cost Averaging
LBVIP administers a dollar cost averaging program which enables a Contract
Owner to pre-authorize a periodic exercise of the transfer rights described
above. A Contract Owner entering into a dollar cost averaging agreement will
instruct LBVIP to periodically transfer predetermined dollar amounts from
the Money Market Subaccount to as many of the five other Subaccounts or to
the Fixed Account as specified by the Contract Owner until the amount in the
Money Market Subaccount is exhausted or the agreement is terminated by the
Contract Owner. The dollar cost averaging program is generally suitable for
Contract Owners making a substantial deposit to the Contract and who wish to
use the other Subaccounts or the Fixed Account investment option, but desire
to control the risk of investing at the top of a market cycle. The dollar
cost averaging program allows such investments to be made in equal
installments over time in an effort to reduce such risk. Dollar cost
averaging does not guarantee that the Variable Account will gain in value,
nor will it protect against a decline in value if market prices fall.
However, if a Contract Owner can continue to invest regularly throughout
changing market conditions, it can be an effective strategy to help meet
long-term goals. Contract Owners interested in the dollar cost averaging
program may obtain an application and full information concerning the
program and its restrictions from LBVIP.
Assignments
If the Contract is used in a Qualified Plan and the Contract Owner is a
trust, custodian or employer, then the Contract Owner may transfer ownership
to the Annuitant. Otherwise, the Contract may not be sold, assigned,
discounted or pledged as collateral for a loan or as security for
performance of an obligation or for any other purpose to any person other
than LBVIP.
If the Contract is not used in a Qualified Plan, then ownership may be
transferred, but not to a natural person, and the Contract may be assigned
as Collateral.
LBVIP shall not be bound by any sale, assignment, pledge or transfer until
Written Notice thereof is actually received by LBVIP at its Home Office and
shall not be responsible for the validity of any sale, assignment, pledge or
transfer. Any payments made or actions taken by LBVIP before LBVIP actually
receives Written Notice shall not be affected by the sale, assignment,
pledge or transfer.
Considerations should be given to the tax implications of an assignment. See
"FEDERAL TAX STATUS--Taxation of Annuities in General".
Contract Owner, Beneficiaries and Annuitants
Unless another owner is named as the Contract Owner in the application for
the Contract, the Annuitant is the Contract Owner and may exercise all of
the Contract Owner's rights under the Contract.
The Contract Owner may name a Beneficiary to receive the death benefit
payable under the Contract. If the Beneficiary is not living on the date
payment is due or if no Beneficiary has been named, the death benefit will
be paid to the estate of the Annuitant.
The Contract Owner may change the Beneficiary by giving LBVIP Written Notice
of the change, but the change shall not be effective until actually received
by LBVIP at its Home Office. Upon receipt by LBVIP of a notice of change, it
will be effective as of the date it was signed but shall not affect any
payments made or actions taken by LBVIP before LBVIP received the Written
Notice, and LBVIP shall not be responsible for the validity of any change.
CHARGES AND DEDUCTIONS
Surrender Charge (Contingent Deferred Sales Charge)
General. No charge for sales expense is deducted from premiums at the time
premiums are paid. However, within certain time limits described below a
surrender charge is deducted from the Accumulated Value of the Contract in
the case of surrender, in whole or in part, before annuity payments begin
and, if certain settlement options are selected, at the time annuity
payments begin. In the event surrender charges are not sufficient to cover
sales expenses, the loss will be borne by LBVIP; conversely, if the amount
of such charges proves more than enough, the excess will be retained by
LBVIP (see "Sufficiency of Charges" below). LBVIP does not currently believe
that the surrender charges imposed will cover the expected costs of
distributing the Contracts.
If a Contract is surrendered in whole or in part before it has been in force
for six full Contract Years, a surrender charge is deducted from the amount
surrendered; provided that in each Contract Year, a Contract Owner may
surrender without a surrender charge, up to 10% of a Contract's Accumulated
Value existing at the time the first surrender is made in that Contract
Year. For example, if a total surrender is made during a Contract Year in
which a partial surrender has been made, the Contract Owner may surrender
free of charge an amount equal to 10% of the Accumulated Value of the
Contract at the time of the partial surrender less the total of the partial
surrender to which no charge was applied. This right is not cumulative from
Contract Year to Contract Year. In the event that a surrender is made in
excess of the amount which may be surrendered free of charge, only the
excess (the "Excess Amount") will be subject to a surrender charge.
The charge is applied as a percentage of the Excess Amount surrendered, but
in no event will the total surrender charge on any one Contract exceed a
maximum limit of 6 1/2% of total gross premiums paid under the Contract.
Such total charge equals the aggregate of all applicable surrender charges
for total and partial surrenders, including any charges deducted at the time
annuity payments begin (as described below).
Charges for Total and Partial Surrenders. If a Contract is surrendered, in
whole or in part, while the Contract is in force and on or before the
Maturity Date, a surrender charge is imposed on the Excess Amount of such
surrender if such surrender occurs before the Contract has been in force for
six full Contract Years as follows:
Contract Year in which
Total or Partial Charge as Percentage of
Surrender Occurs Excess Amount Surrendered*
----------------------- -------------------------
1 6%
2 5
3 4
4 3
5 2
6 1
7 and after 0
____________________
* Although the charge as a percentage of excess amount surrendered decreases
from 6% to 0 over time, the actual aggregate amount of surrender charge
deducted may be up to the 6 1/2% of total gross premiums paid maximum limit
described above.
For purposes hereof, the amount surrendered is equal to the amount of the
surrender request, and the amount received by the Contract Owner is equal to
the amount of the surrender request less the applicable surrender charge and
any withholding and premium tax if applicable.
No surrender charge is deducted if the surrender occurs after expiration of
the time period applicable to such charge as shown in the table above.
Surrender charges otherwise payable will be waived with respect to
surrenders made by the Contract Owner when the Annuitant is totally disabled
(as defined in the Contract).
Certain surrenders are subject to a 10% Federal tax penalty on the amount of
income withdrawn (see "FEDERAL TAX STATUS--Taxation of Annuities in
General").
Charge at the Time Annuity Payments Begin. Generally, at the time annuity
payments begin, a surrender charge as described above will apply. Such
charge is the same as that which would apply had the Contract been fully
surrendered on the Maturity Date, taking into account the 10% free surrender
provision described above and subject to the maximum 6 1/2% limitation
described above. If, however, the Contract Owner has chosen a settlement
option providing an income for a fixed period (e.g., Option 3V described
under "ANNUITY PROVISIONS--Settlement Options"), for any annuitization made
more than three years after the Date of Issue, no surrender charge will be
deducted from the portion of Accumulated Value annuitized provided that
payments under such a settlement option will be made for at least five years
and that proceeds may not be withdrawn. This surrender charge will be waived
if the Annuitant is totally disabled (as defined in the Contract) on the
Maturity Date. No further surrender charge is deducted with respect to
surrenders during the annuity period under such a settlement option.
No surrender charge is imposed at the time of annuitization (if
annuitization occurs more than three years after the Date of Issue) if a
settlement option involving a life income with a guaranteed period is chosen
(e.g., Option 4V described under "ANNUITY PROVISIONS--Settlement Options"),
but surrenders are not permitted during the annuity period under such a
settlement option.
Administrative Charge
On each Contract Anniversary prior to and including the Maturity Date, LBVIP
deducts from the Accumulated Value, proportionately from the Subaccounts and
the Fixed Account that make up such Accumulated Value, an annual
administrative charge of $30 to reimburse LBVIP for administrative expenses
relating to the Contract, the Variable Account and the Subaccounts. (This
charge will be lower to the extent legally required in some states.) Subject
to LBVIP's approval, the Contract Owner may specify a different allocation
for the administrative charge. No such charge is deducted if on that
Contract Anniversary the total amount of premiums paid under the Contract,
less the amount of all prior partial surrenders (which includes the amount
of related surrender charges), is equal to or greater than $5,000 or the
Accumulated Value is greater than $5,000. LBVIP does not expect to make a
profit on this charge. No administration charge is payable during the
annuity period.
Mortality and Expense Risk Charge
The variable annuity payments made to Annuitants will vary in accordance
with the investment experience of the Subaccounts selected by the Contract
Owner. However, neither such variable annuity payments, nor fixed annuity
payments if fixed annuity payments have been selected, will be affected by
the mortality experience (death rate) of persons receiving annuity payments.
LBVIP assumes this "mortality risk" and has guaranteed the annuity rates
incorporated in the Contract, which cannot be changed. LBVIP also assumes
the mortality risk that Beneficiaries of Contract Owners or Annuitants dying
before the Maturity Date may receive amounts in excess of the then current
Accumulated Value (see "THE CONTRACTS--Death Benefit Before the Maturity
Date"). In addition, LBVIP will not increase charges for administrative
expenses regardless of its actual expenses.
To compensate LBVIP for assuming such mortality and expense risks, LBVIP
deducts a daily mortality and expense risk charge from the average daily net
assets in the Variable Account. LBVIP has determined that a mortality and
expense risk charge at an annual rate of 1.25% of the average daily net
assets of each Subaccount in the Variable Account would be reasonable in
relation to the mortality and expense risks assumed by LBVIP under the
Contract. LBVIP will, however, initially impose a daily mortality and
expense risk charge in an amount that is equal to an annual rate of 1.10%
(approximately 0.80% for mortality risk and approximately 0.30% for expense
risk) of the average daily net assets of each Subaccount in the Variable
Account. The mortality and expense risk charge is guaranteed not to increase
above an annual rate of 1.25%.
If the mortality and expense risk charge is insufficient to cover the actual
cost of the mortality and expense risk undertaken by LBVIP, LBVIP will bear
the loss. Conversely, if the mortality and expense risk charge proves more
than sufficient, the excess will be profit to LBVIP and would be available
for any proper corporate purpose including, among other things, payment of
sales expenses. See "Sufficiency of Charges" below.
Investment Advisory Fee of the Fund
Because the Variable Account purchases shares of the Fund, the net assets of
the Variable Account will reflect the investment advisory fee incurred by
the Fund. LB is paid a daily fee by the Fund for its investment management
services equal to an annual rate of 0.40% of the aggregate average daily net
assets of the Money Market Portfolio, Growth Portfolio, Mid Cap Growth
Portfolio, Income Portfolio, High Yield Portfolio and Opportunity Growth
Portfolio, and .85% of the aggregate average daily net assets of the World
Growth Portfolio. See "LBVIP, LUTHERAN BROTHERHOOD, THE VARIABLE ACCOUNT AND
THE FUND--LB Series Fund, Inc.", and the accompanying current Prospectus for
the Fund.
Premium Taxes
A charge may be deducted for taxes attributable to premiums. Premium taxes
vary from state to state and are subject to change. In many jurisdictions,
there is no tax at all. Various states and other governmental entities levy
a premium tax, currently ranging from 1% to 3.5%, on annuity contracts
issued by insurance companies. If premium taxes are applicable to a
Contract, they will be deducted, depending on when such taxes are paid to
the taxing authority, either (a) from premiums as they are received, or (b)
from the Accumulated Value upon (i) a partial or total surrender of the
Contract or (ii) application of the Accumulated Value to a settlement option
at the Maturity Date. See "Appendix B--State Premium Tax Chart" in the
Statement of Additional Information.
Other Taxes
Currently, no charge will be made against the Variable Account for Federal
income taxes. LBVIP may, however, make such a charge in the future if income
or gains within the Variable Account will result in any Federal income tax
liability to LBVIP. Charges for other taxes, if any, attributable to the
Variable Account may also be made. See "FEDERAL TAX STATUS--LBVIP's Tax
Status".
Sufficiency of Charges
If the amount of all charges assessed in connection with the Contracts as
described above is not enough to cover all expenses incurred in connection
therewith, the loss will be borne by LBVIP. Any such expenses borne by LBVIP
will be paid out of its general account which may include, among other
things, proceeds derived from mortality and expense risk charges deducted
from the Variable Account. Conversely, if the amount of such charges proves
more than enough, the excess will be retained by LBVIP.
ANNUITY PROVISIONS
Maturity Date
The Contract Owner selects the Maturity Date, which must be a Contract
Anniversary at least three years after the date on which the Contract was
issued, when making application for the Contract. The Contract Owner may
change a Maturity Date selection by Written Notice received by LBVIP at
least 30 days before both the Maturity Date currently in effect and the new
Maturity Date. The new date selected must satisfy the requirements for a
Maturity Date.
For a Contract issued in Pennsylvania on or after March 11, 1991, the
following requirements for maximum maturity ages of the Contract will be
used. Maturity age is the last birthday of the Annuitant on the Contract
Anniversary on or immediately prior to the Maturity Date.
PENNSYLVANIA MAXIMUM MATURITY AGES
Age on Maximum
Date of Issue Maturity Age
--------------- --------------
70 or less 85
71 - 75 86
76 - 80 88
81 - 85 90
86 - 90 93
91 - 93 96
94 - 95 98
96 99
Settlement Options
The Contract Owner may select an annuity settlement option or options, and
may select whether payments are to be made on a fixed or variable (or a
combination of fixed and variable) basis. To the extent a fixed annuity is
selected, Accumulated Value will be transferred to the Fixed Account, and
the annuity payments will be guaranteed as to minimum dollar amount. See
APPENDIX -- MORE INFORMATION ABOUT THE FIXED ACCOUNT. The Contract Owner may
also change a choice of settlement option by Written Notice received by
LBVIP at least 30 days before the Maturity Date.
The following variable annuity settlement options are generally available
under the Contract:
Option 3V--Income for a Fixed Period. Income for a fixed number of years
will be paid, not to exceed 30.
Option 4V--Life Income with Guaranteed Period. Income will be paid for the
lifetime of the payee. If the payee dies during the guaranteed period,
payments will be continued to the named Beneficiary to the end of that
period. A period of 10 or 20 years may be selected. After the first payment
is made, this option may not be revoked or changed.
Payments may be made under any other settlement option suggested by the
Contract Owner that is agreed to by LBVIP.
LBVIP also provides fixed annuity options, which are not described here. Any
one of the variable annuity options or any one of the fixed annuity options
may be selected, or any one of the variable annuity options may be selected
in combination with any one of the fixed annuity options.
If no valid selection of a settlement option has been made by the Maturity
Date, the Life Income with 10-Year Guarantee Period fixed annuity settlement
option shall be automatically effective.
It should be noted that under a settlement option providing an income for a
fixed period (e.g., Option 3V described above), for any annuitization made
more than three years after the Date of Issue, no surrender charge will be
deducted from the portion of Accumulated Value annuitized, provided that
payments under such settlement option will be made for at least five years
and that proceeds may not be withdrawn. Also, no surrender charge will be
imposed at the time of annuitization (if annuitization occurs more than
three years after the Date of Issue) under a settlement option providing a
life income with a guaranteed period (e.g., Option 4V above). Surrenders
after the Maturity Date are permitted only in connection with settlement
options that do not involve a life contingency (see "THE CONTRACTS--
Surrender (Redemption)").
The Contract Owner may elect the receipt of a single sum, rather than
payment pursuant to annuity settlement options, by surrendering the Contract
in full on the Maturity Date. In such case, a surrender charge will be
deducted from the Accumulated Value of the Contract if the Maturity Date
occurs at any time during the surrender charge period, taking into account
the 10% free surrender provision and subject to the maximum 6 1/2%
limitation described under "CHARGES AND DEDUCTIONS--Surrender Charge
(Contingent Deferred Sales Charge)".
Frequency and Amount of Annuity Payments
Annuity payments under a settlement option will be paid as monthly
installments, unless the Contract Owner and LBVIP agree to a different
payment schedule. However, if the Accumulated Value at the Maturity Date is
less than $2,000, LBVIP may pay the Accumulated Value in a single sum and
the Contract will be canceled. Also, if annuity payments would be or become
less than $25 ($20 for Contracts issued in the state of Texas) if a single
settlement option is chosen, or $25 ($20 for Contracts issued in the state
of Texas) on each basis if a combination of variable and fixed options is
chosen, LBVIP may change the frequency of payments to intervals that will
result in payments of at least $25 ($20 for Contracts issued in the state of
Texas) each from each option chosen.
The amount of the first variable annuity payment (and, in the case of fixed
annuities, the amount of subsequent payments) is determined by applying the
Accumulated Value to be applied to the settlement option at the Maturity
Date, less any premium tax due (see "CHARGES AND DEDUCTIONS--Premium Taxes")
and any surrender charge due (see "Settlement Options" above), to the
annuity table in the Contract for the settlement option selected. The table
shows the amount of the initial annuity payment for each $1,000 applied.
Subsequent variable annuity payments vary in amount in accordance with the
investment experience of the selected Subaccount(s). Assuming annuity
payments are based on the unit values of a single Subaccount, the dollar
amount of the first annuity payment, determined as set forth above, is
divided by the Annuity Unit Value as of the Maturity Date to establish the
number of Annuity Units representing each annuity payment. This number of
Annuity Units remains fixed during the annuity payment period. The dollar
amount of the second and subsequent variable annuity payments is not
predetermined and may change from payment to payment. The dollar amount of
the second and each subsequent variable annuity payment is determined by
multiplying the fixed number of Annuity Units by the Annuity Unit Value (see
"Subaccount Annuity Unit Value" below) with respect to such Subaccount at
the end of the last Valuation Date of the period with respect to which the
payment is due. If the payment is based upon the Annuity Unit Values of more
than one Subaccount, the foregoing procedure is repeated for each applicable
Subaccount and the sum of the payments based on each Subaccount is the
amount of the annuity payment.
The annuity tables in the Contracts are based on the mortality table
specified in the Contract. Under such tables, the longer the life expectancy
of the Annuitant under any life annuity option or the duration of any period
for which payments are guaranteed under the option, the smaller will be the
amount of the first monthly variable annuity payment. LBVIP guarantees that
the dollar amount of each fixed and variable annuity payment after the first
payment will not be affected by variations in expenses or in mortality
experience from the mortality assumptions used to determine the first
payment.
Subaccount Annuity Unit Value
The value of an Annuity Unit is determined independently for each
Subaccount.
For each Subaccount, the Annuity Unit Value on any Valuation Date is
determined by multiplying the Annuity Unit Value at the end of the
immediately preceding Valuation Date by the net investment factor for the
Valuation Date for which the Annuity Unit Value is being calculated, and
multiplying the result by an interest factor which offsets the effect of the
assumed investment earnings rate of 3 1/2% per annum which is assumed in the
annuity tables contained in the Contract.
The net investment factor for each Subaccount for a Valuation Date is
determined by dividing the value of an Accumulation Unit for the applicable
Subaccount as of the end of the current Valuation Period by the value of an
Accumulation Unit for the applicable Subaccount as of the end of the
immediately preceding Valuation Period.
Assumed Investment Rate
A 3 1/2% assumed investment rate is built into the annuity tables contained
in the Contracts. A higher assumption would mean a higher initial payment
but more slowly rising and more rapidly falling subsequent payments. A lower
assumption would have the opposite effect. If the actual net investment rate
were at the annual rate of 3 1/2%, the annuity payments would be level.
GENERAL PROVISIONS
Postponement of Payments
General. LBVIP may defer payment of any surrender and annuity payment
amounts, or death benefit amounts that are in the Variable Account if (a)
the New York Stock Exchange is closed other than customary weekend and
holiday closings, or trading on the New York Stock Exchange is restricted as
determined by the SEC, or (b) an emergency exists, as determined by the SEC,
as a result of which disposal of securities is not reasonably practicable or
it is not reasonably practicable to determine the value of the Variable
Account's net assets. Transfers and allocations of Accumulated Value to and
against the Subaccounts of the Variable Account may also be postponed under
these circumstances.
Payment by Check. Payments under the Contract of any amounts derived from
premiums paid by check may be delayed until such time as the check has
cleared the Contract Owner's bank.
Date of Receipt
Except as otherwise stated herein, the date of receipt by LBVIP of any
Written Notice, premium payment, telephone instruction or other
communication is the actual date it is received at LBVIP's Home Office in
proper form unless received (1) after the close of the New York Stock
Exchange, or (2) on a date which is not a Valuation Date. In either of these
two cases, the date of receipt will be deemed to be the next Valuation Date.
Reports to Contract Owners
LBVIP will mail each Contract Owner, at such Contract Owner's last known
address of record, at least annually after the first Contract Year, a report
containing the Accumulated Value or current value of the Contract as of a
date not more than two months prior to the date of mailing and any further
information required by any applicable law or regulation.
Contract Inquiries
Inquiries regarding a Contract may be made by writing to LBVIP at its Home
Office, 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
FEDERAL TAX STATUS
Introduction
The ultimate effect of Federal income taxes on a Contract's Accumulated
Value, on annuity payments and on the economic benefit to the Contract
Owner, the Annuitant or the Beneficiary depends upon the tax status of such
person, LBVIP, and, if the Contract is purchased under a retirement plan,
upon the type of retirement plan and upon the tax and employment status of
the individual concerned. The discussion contained herein is general in
nature and is not intended as tax advice. No attempt is made to consider any
applicable state or other tax laws. Moreover, the discussion contained
herein is based on LBVIP's understanding of Federal income tax laws as
currently interpreted. No representation is made regarding the likelihood of
continuation of these interpretations by the Internal Revenue Service. LBVIP
does not make any guarantee regarding the tax status of any Contract. Each
person concerned should consult a qualified tax adviser.
LBVIP's Tax Status
LBVIP is taxed as a life insurance company under the Internal Revenue Code
of 1986, as amended (the "Code"). Although the Variable Account is not a
separate entity from LBVIP and its operations form a part of LBVIP, the Code
in effect provides that the income and gains and losses from separate
account investments are not income to the insurance company issuing the
variable contracts so long as the contracts and the separate account meet
certain requirements set forth in the Code. Because the Contracts and the
Variable Account intend to meet such requirements, LBVIP anticipates no tax
liability resulting from the Contracts, and consequently no reserve for
income taxes is currently charged against, or maintained by LBVIP with
respect to, the Contracts.
LBVIP may also incur state and local taxes, in addition to premium taxes, in
several states. At present, these taxes are not significant. If there is a
material change in state or local tax laws, charges for such taxes, if any,
attributable to the Variable Account may be made.
Taxation of Annuities in General
Section 72 of the Code governs taxation of annuities in general.
Contracts Held by Individuals. An individual Contract Owner is not taxed on
increases in the value of a Contract until a distribution occurs, either in
the form of a single sum payment or as annuity payments under the settlement
option selected.
Upon receipt of a single sum payment or of an annuity payment under the
Contract, the recipient is taxed on the portion of such payment that exceeds
the investment in the Contract.
For single sum payments, the taxable portion is generally the amount in
excess of the premiums paid under the Contract. Such taxable portion is
taxed at ordinary income tax rates. The investment in the Contract is not
affected by loans or assignments of the Contract but is increased by any
amount included in gross income as a result of the loan or assignment.
Payments in partial or full surrender of a Contract generally will be taxed
as ordinary income to the extent that the Accumulated Value exceeds the
taxpayer's investment in the Contract. An assignment of the Contract (other
than a gift to the Contract Owner's spouse or incident to a divorce) or the
use of the Contract as collateral for a loan will be treated in the same
manner as a surrender.
For annuity payments, the taxable portion is generally determined by a
formula which establishes the ratio that the investment in the Contract
bears to the expected return under the Contract as of the Maturity Date.
Where annuity payments are made under certain Qualified Plans, the portion
of each payment that is excluded from gross income will generally be equal
to the total amount of any investment in the Contract as of the Maturity
Date, divided by the number of anticipated payments, which are determined by
reference to the age of the Annuitant. The taxable portion is taxed at
ordinary income tax rates. For certain types of Qualified Plans there may be
no investment in the Contract within the meaning of Section 72 of the Code.
In such event, the total payments received may be taxable. Contract Owners,
Annuitants and Beneficiaries under such Contracts should seek qualified tax
and financial advice about the tax consequences of distributions under the
retirement plan in connection with which such Contracts are purchased.
Generally, a distribution from a Contract before the taxpayer attains age 59
1/2 will result in an additional tax of 10% of the amount of the
distribution which is includable in gross income. The penalty tax will not
apply if the distribution is made as follows:
(1) in connection with death or disability as described in section 72(q)(2)
of the Code;
(2) from certain Qualified Plans;
(3) under a qualified funding trust (commonly referred to as structured
settlement plans); or
(4) it is one of a series of substantially equal periodic annual payments
for the life or life expectancy of the taxpayer or the joint lives or joint
life expectancies of the taxpayer and the beneficiary; for this purpose, if
there is a significant modification of the payment schedule before the
taxpayer is age 59 1/2 or before the expiration of five years from the time
of the annuity starting date, the taxpayer's income shall be increased by
the amount of tax and deferred interest that otherwise would have been
incurred.
Depending on the type of Qualified Plan, distributions may be subject to a
10% penalty tax.
Contracts Held by Other Than Individuals. The Tax Reform Act of 1986
provides that, except as hereafter noted, a Contract held by other than a
natural person, such as a corporation, estate or trust, will not be treated
as an annuity contract for Federal income tax purposes. The income on such a
Contract will be taxable in the year received or accrued by the Contract
Owner. The provision does not apply if the Contract Owner is acting as an
agent for an individual, if the Contract Owner is an estate which acquired
the Contract as a result of the death of the decedent, if the Contract is
held by certain Qualified Plans, if the Contract is held pursuant to a
qualified funding trust (commonly referred to as structured settlement
plans), if the Contract was purchased by an employer with respect to a
terminated Qualified Plan or if the Contract is an immediate annuity.
Multiple Contracts. Section 72(e)(11) of the Code provides that for the
purposes of determining the amount includable in gross income, all non-
qualified annuity contracts entered into on or after October 22, 1988 by the
same company with the same contract owner during any calendar year shall be
treated as one contract. This section will likely accelerate the recognition
of income by a Contract Owner owning multiple contracts and may have the
further effect of increasing the portion of income that will be subject to
the ten percent penalty tax.
Qualified Plans
The Contracts are designed for use with several types of Qualified Plans.
The tax rules applicable to participants in such Qualified Plans vary
according to the type of plan and the terms and conditions of the plan.
Therefore, no attempt is made herein to provide more than general
information about the use of the Contracts with the various types of
Qualified Plans. Participants under such Qualified Plans as well as Contract
Owners, Annuitants and Beneficiaries are cautioned that the rights of any
person to any benefits under such Qualified Plans may be subject to the
terms and conditions of the plans themselves regardless of the terms and
conditions of the Contracts issued in connection therewith. Following are
brief descriptions of the various types of Qualified Plans and of the use of
the Contracts in connection therewith.
Tax-Sheltered Annuities. Section 403(b) of the Code permits employers of
public school employees and of employees of certain types of charitable,
educational and scientific organizations specified in Section 501(c)(3) of
the Code to purchase on behalf of their employees annuity contracts and,
subject to certain limitations, have the amount of purchase payments
excluded from the employees' gross income for tax purposes. These annuity
contracts are commonly referred to as "tax-sheltered annuities". Purchasers
of the Contracts for such purposes should seek qualified advice as to
eligibility, limitations on permissible amounts of purchase payments and tax
consequences on distribution.
An amendment to Section 403(b) of the Code, adopted pursuant to the Tax
Reform Act of 1986, imposes restrictions on certain distributions from tax-
sheltered annuity contracts meeting the requirements of Section 403(b),
which will apply to tax years beginning on or after January 1, 1989. The
amendment adds a new Section 403(b)(11) that requires that distributions
from Section 403(b) tax-sheltered annuities that are attributable to
contributions made pursuant to a salary reduction agreement may be paid only
when the employee reaches age 59 1/2, separates from service, dies or
becomes disabled, or in the case of hardship (hardship, for this purpose, is
generally defined as an immediate and heavy financial need, such as for
paying for medical expenses, for the purpose of a principal residence, or
for paying certain tuition expenses).
A participant in a Contract purchased as a tax-sheltered Section 403(b)
annuity contract will not, therefore, be entitled to exercise the surrender
right, described under the heading "THE CONTRACTS--Surrender (Redemption)",
in order to receive Accumulated Value attributable to elective contributions
credited under the Contract to such participant after December 31, 1988
unless one of the above-described conditions has been satisfied. The
restriction on the right to receive a distribution does not affect the
availability of the Accumulated Value credited to the Contract as of
December 31, 1988. A participant may, however, be able to transfer
Accumulated Value under the Contract to certain other investment
alternatives that are available under an employer's Section 403(b)
arrangement and that meet the requirements of Section 403(b).
The restrictions imposed by Section 403(b)(11) of the Code conflict with
certain sections of the 1940 Act that are applicable to the Contracts. In
this regard, LBVIP is relying on a no-action letter issued by the Office of
Insurance Products and Legal Compliance of the SEC, and the requirements for
such reliance have been complied with by LBVIP.
H.R. 10 Plans. The Self-Employed Individuals Tax Retirement Act of 1962,
which is commonly referred to as "H.R. 10", permits self-employed
individuals to establish Qualified Plans for themselves and their employees.
The tax consequences to participants under such plans depend upon the plan
itself. In addition, such plans are limited by law to maximum permissible
contributions, distribution dates, nonforfeitability of interest and tax
rates applicable to distributions. In order to establish such a plan, a plan
document, usually in prototype form pre-approved by the Internal Revenue
Service, is adopted and implemented by the employer. Purchasers of the
Contracts for use with H.R. 10 plans should seek qualified advice as to the
suitability of the proposed plan document and of the Contracts to their
specific needs.
Individual Retirement Annuities. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
"individual retirement annuity". These individual retirement annuities are
subject to limitations on the amount that may be contributed, on the persons
who may be eligible, and on the time when distributions may commence. In
addition, distributions from certain other types of Qualified Plans may be
placed on a tax-deferred basis into an individual retirement annuity. When
issued in connection with an individual retirement annuity, the Contracts
will be specifically amended to conform to the requirements under such
plans. Sales of the Contracts for use with individual retirement annuities
may be subject to special requirements imposed by the Internal Revenue
Service. Purchasers of the Contracts for such purposes will be provided with
such supplementary information as may be required by the Internal Revenue
Service or other appropriate agency.
Roth IRAs. Section 408A of the Code permits eligible individuals to make
nondeductible contributions to an individual retirement program known as a
Roth IRA. Section 408A includes limits on how much an individual may
contribute to a Roth IRA and when distributions may commence. Qualified
distributions from Roth IRAs are excluded from gross income if (a) made more
than five years after the taxable year of the first contribution to the Roth
IRA, and (b) meet any of the following conditions: (1) the annuity owner
has reached age 59 1/2; (2) the distribution is paid to a beneficiary after
the owner's death; (3) the annuity owner is disabled; or (4) the
distribution (not exceeding $10,000) will be used for a first time home
purchase. Nonqualified distributions are includible in gross income only to
the extent they exceed contributions made to the Roth IRA. The taxable
portion of a nonqualified distribution may be subject to a 10% penalty tax.
Subject to certain limitations, a traditional individual retirement account
or annuity may be converted into a Roth IRA and upon such a conversion, an
individual is required to include the taxable portion of the conversion in
gross income, but is not subject to a 10% penalty tax.
Corporate Pension and Profit-Sharing Plans. Sections 401(a) and 403(a) of
the Code permit corporate employers to establish various types of retirement
plans for employees. Such retirement plans may permit the purchase of the
Contracts to provide benefits under the plans. Corporate employers intending
to use the Contracts in connection with such plans should seek qualified
advice in connection therewith.
1035 Exchanges
Section 1035(a) of the Code permits the exchange of certain life insurance,
endowment and annuity contracts for an annuity contract without a taxable
event occurring. Thus, potential purchasers who already own such a contract
issued by another insurer are generally able to exchange that contract for a
Contract issued by LBVIP without a taxable event occurring. There are
certain restrictions which apply to such exchanges, including that the
contract surrendered must truly be exchanged for the Contract issued by
LBVIP and not merely surrendered in exchange for cash. Further, the same
person or persons must be the obligee or obligees under the Contract
received in the exchange as under the original contract surrendered in the
exchange. Careful consideration must be given to compliance with the Code
provisions and regulations and rulings relating to exchange requirements,
and potential purchasers should be sure that they understand any surrender
charges or loss of benefits which might arise from terminating a contract
they hold. Owners considering such an exchange should consult their tax
advisers to insure that the requirements of Section 1035 are met.
Diversification Requirements
The Code imposes certain diversification standards on the underlying assets
of variable annuity contracts. The Code provides that a variable annuity
contract shall not be treated as an annuity contract for any period (and any
subsequent period) for which the investments are not "adequately
diversified". The Code contains a safe harbor provision which provides that
annuity contracts such as the Contract meet the diversification requirements
if, as of the end of each quarter, the underlying assets of the Variable
Account meet the diversification requirements applicable to regulated
investment companies and no more than fifty-five percent (55%) of the total
assets underlying the Variable Account consist of cash, cash items, U.S.
government securities and securities of other regulated investment
companies.
On March 1, 1989, the Treasury Department adopted regulations (Treas. Reg.
1.817-5) which established diversification requirements for the investments
underlying variable contracts such as the Contract. The regulations amplify
the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described
above. Under the regulations, the Variable Account will be deemed
adequately diversified if: (1) no more than 55% of the value of the total
assets of the account is represented by any one investment; (2) no more than
70% of the value of the total assets of the account is represented by any
two investments; (3) no more than 80% of the value of the total assets of
the account is represented by any three investments; and (4) no more than
90% of the value of the total assets of the account is represented by any
four investments.
The assets of the Fund are expected to meet the diversification
requirements. The Company will monitor the Contracts and the regulations of
the Treasury Department to ensure that the Contract will continue to qualify
as a variable annuity contract. Disqualification of the Contract as an
annuity contract would result in imposition of Federal income tax on the
Contract Owner with respect to earnings allocable to the Contract prior to
the receipt of payments under the Contract.
Withholding
The taxable portion of a distribution to an individual is subject to Federal
income tax withholding unless the taxpayer elects not to have withholding.
LBVIP will provide the Contract Owner with the election form and further
information as to withholding prior to the first distribution. Generally,
however, amounts are withheld from periodic payments at the same rate as
wages and at the rate of 10% from non-periodic payments.
Also, effective January 1, 1993, certain distributions from retirement plans
qualified under Section 401 or 403(b) of the Code, that are not directly
rolled over to another eligible retirement plan or individual retirement
account or individual retirement annuity, are subject to a mandatory 20%
withholding for Federal income tax. The 20% withholding requirement does not
apply to: a) distributions for the life or life expectancy of the
participant or joint and last survivor expectancy of the participant and a
designated beneficiary; b) distributions for a specified period of 10 years
or more; or c) distributions which are required minimum distributions. For
complete information on withholding, a qualified tax adviser should be
consulted.
Other Considerations
Because of the complexity of the law and its application to a specific
individual, tax advice may be needed by a person contemplating purchase of a
Contract or the exercise of elections under a Contract. The above comments
concerning Federal income tax consequences are not exhaustive, and special
rules are provided with respect to situations not discussed in this
Prospectus.
The preceding description is based upon LBVIP's understanding of current
Federal income tax law. LBVIP cannot assess the probability that changes in
tax laws, particularly affecting annuities, will be made.
The preceding comments do not take into account state income or other tax
considerations which may be involved in the purchase of a Contract or the
exercise of elections under the Contract. For complete information on such
Federal and state tax considerations, a qualified tax adviser should be
consulted.
EMPLOYMENT-RELATED BENEFIT PLANS
The Contracts described in this Prospectus (except for Contracts issued in
the state of Montana) involve settlement option rates that distinguish
between men and women. Montana has enacted legislation requiring that
optional annuity benefits offered pursuant to Contracts purchased in Montana
not vary on the basis of sex. On July 6, 1983, the Supreme Court held in
Arizona Governing Committee v. Norris that optional annuity benefits
provided under an employer's deferred compensation plan could not, under
Title VII of the Civil Rights Act of 1964, vary between men and women on the
basis of sex. Because of this decision, the settlement option rates
applicable to Contracts purchased under an employment-related insurance or
benefit program may in some cases not vary on the basis of sex. Any unisex
rates to be provided by LBVIP will apply for tax-qualified plans and those
plans where an employer believes that the Norris decision applies. Employers
and employee organizations should consider, in consultation with legal
counsel, the impact of Norris, and Title VII generally, and any comparable
state laws that may be applicable, on any employment-related insurance or
benefit plan for which a Contract may be purchased.
VOTING RIGHTS
To the extent required by law, LBVIP will vote the Fund shares held in the
Variable Account at regular and special shareholder meetings of the Fund in
accordance with instructions received from persons having voting interests
in the corresponding Subaccounts of the Variable Account. If, however, the
1940 Act or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result LBVIP determines that
it is permitted to vote the Fund shares in its own right, it may elect to do
so.
Before the Maturity Date, the Contract Owner shall have the voting interest
with respect to Fund shares attributable to the Contract. On and after the
Maturity Date, the person entitled to receive annuity payments shall have
the voting interest with respect to such shares, which voting interest will
generally decrease during the annuity period.
The number of votes which a Contract Owner or person entitled to receive
annuity payments has the right to instruct will be calculated separately for
each Subaccount. The number of votes which each Contract Owner has the right
to instruct will be determined by dividing a Contract's Accumulated Value in
a Subaccount by the net asset value per share of the corresponding Portfolio
in which the Subaccount invests. The number of votes which each person
entitled to receive annuity payments has the right to instruct will be
determined by dividing the Contract's reserves in a Subaccount by the net
asset value per share of the corresponding Portfolio in which the Subaccount
invests. Fractional shares will be counted. The number of votes of the
Portfolio which the Contract Owner or person entitled to receive annuity
payments has right to instruct will be determined as of the date coincident
with the date established by the Portfolio for determining shareholders
eligible to vote at the meeting of the Fund. Voting instructions will be
solicited by written communications prior to such meeting in accordance with
procedures established by the Fund.
Any Portfolio shares held in the Variable Account for which LBVIP does not
receive timely voting instructions, or which are not attributable to
Contract Owners, will be voted by LBVIP in proportion to the instructions
received from all Contract Owners. Any Portfolio shares held by LBVIP or its
affiliates in general accounts will, for voting purposes, be allocated to
all separate accounts of LBVIP and its affiliates having a voting interest
in that Portfolio in proportion to each such separate account's votes.
Voting instructions to abstain on any item to be voted upon will be applied
on a pro rata basis to reduce the votes eligible to be cast.
Each person having a voting interest in a Subaccount will receive proxy
materials, reports and other materials relating to the appropriate
Portfolio.
SALES AND OTHER AGREEMENTS
Lutheran Brotherhood Securities Corp. ("LBSC"), 625 Fourth Avenue South,
Minneapolis, Minnesota 55415, an indirect subsidiary of Lutheran
Brotherhood, acts as the principal underwriter of the Contracts pursuant to
a Distribution Agreement to which LBVIP and the Variable Account are also
parties. The Contracts are sold through LBVIP Representatives who are
licensed by state insurance officials to sell the Contracts. These LBVIP
Representatives are also registered representatives of LBSC. The Contracts
are offered in all states where LBVIP is authorized to sell variable
annuities.
Compensation of LBVIP Representatives. Commissions and other distribution
compensation to be paid to LBVIP Representatives on the sale of Contracts
will be paid by LBVIP and will not result in any charge to Contract Owners
or to the Variable Account in addition to the charges described in this
Prospectus. LBVIP Representatives selling the Contracts will be paid a
commission of not more than 4% of the premiums paid on the contracts.
Further, LBVIP Representatives may be eligible to receive certain benefits
based on the amount of earned commissions.
Service Agreement. Lutheran Brotherhood performs certain investment and
administrative duties for LBVIP pursuant to a written agreement. The
agreement is automatically renewed each year, unless either party terminates
it. Under this agreement, LBVIP pays Lutheran Brotherhood for salary costs
and other services and an amount for indirect costs incurred through LBVIP's
use of Lutheran Brotherhood's personnel and facilities.
YEAR 2000
LBVIP has conducted a review of its computer systems to identify systems
that could be affected by the "Year 2000" problem and is developing an
implementation plan to resolve the issue. The Year 2000 problem is the
result of computer programs being written using two digits (rather than
four) to define the applicable year. Any of LBVIP's computer programs that
have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a major system failure
or miscalculations. LBVIP presently believes that, with modifications to
its existing software and conversion to new software, the Year 2000 problem
will not pose significant operational problems for its computer systems as
so modified and converted. If, however, such modifications and conversions
are not completed timely, the Year 2000 problem may have a material impact
on the operations of LBVIP. The Year 2000 readiness of other third parties
whose system failures could have an impact on LBVIP's operations is
currently being evaluated. The potential materiality of any such impact is
not known at this time. A description of the Fund's preparations for the
"Year 2000" is contained in the accompanying prospectus for the Fund.
LEGAL PROCEEDINGS
LBVIP is not involved in any legal proceedings.
LEGAL MATTERS
All matters of applicable state law pertaining to the Contracts, including
LBVIP's right to issue the Contracts thereunder, have been passed upon by
James M. Odland, counsel for LBVIP. Certain legal matters relating to the
Federal securities laws have been passed upon by the law firm of Jones &
Blouch L.L.P., Washington, D.C.
FINANCIAL STATEMENTS AND EXPERTS
Financial statements of LBVIP and the Variable Account are contained in the
Statement of Additional Information.
The financial statements of LBVIP and the Variable Account included in the
Statement of Additional Information have been so included in reliance of
Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in accounting and auditing.
FURTHER INFORMATION
A Registration Statement under the Securities Act of 1933 has been filed
with the SEC with respect to the Contracts described herein. This Prospectus
does not contain all of the information set forth in the Registration
Statement and exhibits thereto, to which reference is hereby made for
further information concerning the Variable Account, LBVIP and the
Contracts. The information so omitted may be obtained from the SEC's
principal office located at 450 Fifth Street, N.W., Washington, D.C. 20549,
upon payment of the fee prescribed by the SEC, or examined there without
charge. Statements contained in this Prospectus as to the provisions of the
Contracts and other legal documents are summaries, and reference is made to
the documents as filed with the SEC for a complete statement of the
provisions thereof.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Page
Introduction 2
Administration of the Contracts 2
Custody of Assets 2
Independent Accountants and Financial Statements 2
Distribution of the Contracts 3
Calculation of Performance 3
Money Market Subaccount 3
Other Subaccounts 4
Financial Statements of Variable Account 7
Comment on Financial Statements of LBVIP 17
Financial Statements of LBVIP 17
Appendix C - State Premium Tax Chart C-1
How To Obtain the INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
Statement of Additional Information
Send this request form to:
Lutheran Brotherhood Variable
Insurance Products Company
P.O. Box 288
Minneapolis, MN 55440-9041
Please send me a copy of the most recent INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT SAI.
- ----------------------------------------------------------------------------
(Name) (Date)
- ----------------------------------------------------------------------------
(Street Address)
- ----------------------------------------------------------------------------
(City) (State) (Zip Code)
<PAGE>
APPENDIX A
MORE INFORMATION ABOUT THE FIXED ACCOUNT
Because of exemptive and exclusionary provisions, interests in the Fixed
Account have not been registered under the Securities Act of 1933 ("1933
Act"), nor is the Fixed Account registered as an investment company under
the Investment Company Act of 1940 ("1940 Act"). Accordingly neither the
Fixed Account nor any interests therein are generally subject to the
provisions of the 1933 or 1940 Acts. Disclosures regarding the Fixed Account
option and the Fixed Account, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements in prospectuses. LBVIP has been
advised that the staff of the Securities and Exchange Commission has not
reviewed disclosure relating to the Fixed Account.
Accumulated Values allocated to the Fixed Account are combined with all the
general assets of LBVIP and are invested in those assets chosen by LBVIP and
allowed by applicable law. LBVIP allocates the investment income of the
Fixed Account to the Contracts covered by the Fixed Account in the amounts
guaranteed in such Contracts. Immediately prior to the Maturity Date, the
Accumulated Value of the Contract in the Fixed Account is subject to a
reduction for any surrender charge or premium taxes, if applicable.
Under the Fixed Account option, LBVIP allocates premium payments to the
Fixed Account, guarantees the amounts allocated to the Fixed Account, and
pays a declared interest rate. The guaranteed minimum interest credited to
the Fixed Account will be at the effective rate of 4% per year, compounded
daily. LBVIP may credit interest at a rate in excess of 4% per year;
however, LBVIP is not obligated to credit any interest in excess of 4% per
year. There is no specific formula for the determination of excess interest
credits. Such credits, if any, will be determined by LBVIP based on
information as to expected investment yields. Some of the factors that LBVIP
may consider in determining whether to credit interest above 4% to amounts
allocated to the Fixed Account, and the amount thereof, are general economic
trends, rates of return currently available and anticipated on LBVIP's
investments, regulatory and tax requirements and competitive factors. ANY
INTEREST CREDIT TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 4%
PER YEAR WILL BE DETERMINED AT THE SOLE DISCRETION OF LBVIP. THE CONTRACT
OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS
MAY NOT EXCEED THE MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR.
Nonetheless, for any amount allocated or transferred to the Fixed Account,
LBVIP guarantees that the initial interest rate will be effective for at
least 12 months, and subsequent interest rates will not be changed more
often than once every 12 months.
To the extent a fixed annuity payment option is selected by the Contract
Owner, Accumulated Value at the Maturity Date will be transferred to the
Fixed Account, which supports the insurance and annuity obligations of
LBVIP.
Contract Owners have no voting rights in the Variable Account with respect
to Fixed Account values.
<PAGE>
APPENDIX B
ILLUSTRATION OF MONTHLY VARIABLE ANNUITY SETTLEMENT OPTION
The illustration included in this appendix shows how the monthly variable
annuity settlement option income may change with the investment experience
of the Variable Account. The illustration shows how the monthly income
would vary over time if the investment return on the assets held in each
Portfolio of the Fund were a uniform, gross, after-tax annual rate of 0
percent, 5.06 percent and 12 percent. The incomes would be different from
those shown if the gross annual investment returns average 0 percent, 5.06
percent and 12 percent over a period of years, but fluctuated above and
below these averages for individual Contract years.
The monthly incomes reflect the fact that the net investment return of the
Subaccounts of the Variable Account is lower than the gross, after-tax
return on the assets held in the Fund as a result of the advisory fee paid
by the Fund and charges made against the Subaccounts. The incomes shown
take into account the following fees: Growth (0.40%); High Yield (0.40%);
Income (0.40%); Money Market (0.40%); Opportunity Growth (0.40%); Mid Cap
Growth (0.40%); and World Growth (0.85%); and the daily charge to each
Subaccount for assuming mortality and expense risks which is equivalent to a
charge at an annual current rate of 1.10% of the average assets of the
Subaccounts and which is guaranteed never to exceed an annual rate of 1.25%.
After deduction of these amounts, the illustrated gross investment rates of
return 0%, 5.06% and 12% correspond to net annual rates of -1.56%, 3.50% and
10.44%, respectively, assuming an average investment advisory fee of 0.46%.
The illustration assumes 100% of the assets are invested in Subaccounts of
the Variable Account. For comparison purposes, a current fixed annuity
income, available through the Fixed Account, is also provided. The first
variable payment is always based on an investment rate of 3.50%. After the
first variable annuity payment, future variable payments will increase if
the annualized net rate of return exceeds the 3.50%, and will decrease if
the annualized net rate of return is less than the 3.50%.
The hypothetical values shown are based upon a male, age 65 selecting a life
income with a 10-year guaranteed period and having $100,000 of non-qualified
funds at settlement. Upon request, LBVIP will provide a comparable
illustration based upon the proposed Annuitant's age, gender (except for
Contracts issued in the state of Montana), settlement option, type of funds
and cash available at settlement. Contracts purchased in Montana cannot
vary on the basis of the Annuitant's gender.
<PAGE>
Variable Annuity Payout Illustration
Prepared for: Prospect Commencement Date: 4/30/1998
Prepared by: Lutheran Brotherhood Cash Available at Settlement: $100,000
Variable Insurance
Products Company
Sex: Male Date of Birth: 4/30/1933 Funds: Nonqualified
State: MN Initial Monthly Income: $608
Income Option: Life Income with 10 Year Guaranteed Period
The monthly variable annuity income amount shown below assumes a
constant annual investment return. The assumed investment rate of 3.50% is
used to calculate the first monthly payment. Thereafter, monthly payments
will increase or decrease based upon the relationship between 3.50% and the
performance of the Subaccounts selected. The investment returns shown are
hypothetical and not a representation of future results.
Annual Rate of Return
--------------------------------------
0% Gross 5.06% Gross 12.00% Gross
Date Age (-1.56% Net) (3.50% Net) (10.44% Net)
- ----------------------- --- ------------ ------------ ------------
April 30, 1998 65 $608 $608 $ 608
April 30, 1999 66 578 608 649
April 30, 2000 67 550 608 692
April 30, 2001 68 523 608 739
April 30, 2002 69 498 608 788
April 30, 2007 74 387 608 1,090
April 30, 2012 79 301 608 1,508
April 30, 2017 84 235 608 2,087
April 30, 2022 89 183 608 2,886
April 30, 2027 94 142 608 3,993
April 30, 2032 99 111 608 5,524
April 30, 2033 100 105 608 5,894
If 100% of your cash available at settlement was applied to provide a fixed
annuity on the commencement date of this illustration, the fixed annuity
income amount would be $687.
Net rates of return reflect expenses totaling 1.56%, which consist of the
current 1.10% Variable Account mortality and expense risk charge and 0.46%
for the Fund advisory fee (this is an average with the actual varying from
0.40% to 0.85%).
This is an illustration only and not a contract.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INDIVIDUAL FLEXIBLE PREMIUM
VARIABLE ANNUITY CONTRACT
ISSUED BY
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
This Statement of Additional Information is not a prospectus, but should be
read in conjunction with the Prospectus dated May 1, 1998 (the "Prospectus")
describing an individual flexible premium variable annuity contract (the
"Contract") being offered by Lutheran Brotherhood Variable Insurance
Products Company ("LBVIP"). Purchase payments will be allocated to one or
more Subaccounts of LBVIP Variable Annuity Account I (the "Variable
Account"), a separate account of LBVIP and/or to the Fixed Account (which is
the general account of LBVIP, and which pays interest at a guaranteed fixed
rate). Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus. A copy of
the Prospectus may be obtained from Lutheran Brotherhood Variable Insurance
Products Company, 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
Capitalized terms used in this Statement of Additional Information that are
not otherwise defined herein shall have the meanings given to them in the
Prospectus.
------------------------------------------------
TABLE OF CONTENTS
Page
INTRODUCTION 2
ADMINISTRATION OF THE CONTRACTS 2
CUSTODY OF ASSETS 2
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS 2
DISTRIBUTION OF THE CONTRACTS 3
CALCULATION OF PERFORMANCE 3
Money Market Subaccount 3
Other Subaccounts 4
FINANCIAL STATEMENTS OF VARIABLE ACCOUNT 7
COMMENT ON FINANCIAL STATEMENTS OF LBVIP 17
FINANCIAL STATEMENTS OF LBVIP 17
APPENDIX C - STATE PREMIUM TAX CHART C-1
------------------------------------------------
The date of this Statement of Additional Information
is May 1, 1998.
INTRODUCTION
The Contracts are being offered by LBVIP, a stock life insurance company
that is an indirect subsidiary of Lutheran Brotherhood. LBVIP is offering
the Contract only to persons who are eligible for membership in Lutheran
Brotherhood, unless otherwise required by state law. The Contract may be
sold to or in connection with retirement plans which may or may not qualify
for special federal tax treatment under the Internal Revenue Code. Annuity
payments under the Contract are deferred until a selected later date.
Premiums will be allocated, as designated by the Contract Owner, to one or
more Subaccounts of the Variable Account, a separate account of LBVIP and/or
to the Fixed Account (which is the general account of LBVIP, and which pays
interest at a guaranteed fixed rate). The assets of each Subaccount will
be invested solely in a corresponding Portfolio of LB Series Fund, Inc. (the
"Fund"), which is a diversified, open-end management investment company
(commonly known as a "mutual fund"). The Prospectus for the Fund that
accompanies the Prospectus describes the investment objectives and attendant
risks of the seven Portfolios of the Fund-the Growth Portfolio, the Mid Cap
Growth Portfolio, the High Yield Portfolio, the Income Portfolio, the
Opportunity Growth Portfolio, the World Growth Portfolio and the Money
Market Portfolio. Additional Subaccounts (together with the related
additional Portfolios of the Fund) may be added in the future. The
Accumulated Value of the Contract and, except to the extent fixed amount
annuity payments are elected by the Contract Owner, the amount of annuity
payments will vary, primarily based on the investment experience of the
Portfolios whose shares are held in the Subaccounts designated. Premiums
allocated to the Fixed Account will accumulate at fixed rates of interest
declared by LBVIP.
ADMINISTRATION OF THE CONTRACTS
Lutheran Brotherhood performs certain investment and administrative duties
for LBVIP pursuant to a written agreement. This agreement includes services
performed for the administration of the Contracts along with other insurance
products issued by LBVIP. The agreement is automatically renewed each year,
unless either party terminates it. Under this agreement, LBVIP pays Lutheran
Brotherhood for salary costs and other services and an amount for indirect
costs incurred through LBVIP's use of Lutheran Brotherhood's personnel and
facilities. During 1997, LBVIP paid Lutheran Brotherhood $14.95 million for
all services provided pursuant to this agreement.
CUSTODY OF ASSETS
LBVIP, whose address appears on the cover of the Prospectus, maintains
custody of the assets of the Variable Account.
INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS
The financial statements of LBVIP and the Variable Account included in this
Statement of Additional Information have been so included in reliance of
Price Waterhouse LLP, independent accountants, given on authority of said
firm as experts in accounting and auditing.
The financial statements of LBVIP should be distinguished from those of the
Variable Account, and should be considered only as bearing upon the ability
of LBVIP to meet its obligations under the Contracts. The financial
statements of LBVIP should not be considered as bearing on the investment
experience of the assets held in the Variable Account.
DISTRIBUTION OF THE CONTRACTS
Lutheran Brotherhood Securities Corp. ("LBSC"), an indirect subsidiary of
Lutheran Brotherhood, acts as the principal underwriter of the Contracts
pursuant to a Distribution Agreement to which LBVIP and the Variable Account
are also parties. The Contracts are sold through LBVIP Representatives who
are licensed by state insurance officials to sell the Contracts. These LBVIP
Representatives are also registered representatives of LBSC. The Contracts
are offered in all states where LBVIP is authorized to sell variable
annuities.
The offering of the Contracts is continuous.
There are no special purchase plans or exchange privileges not described in
the Prospectus (see "THE CONTRACTS--Transfers" in the Prospectus).
No charge for sales expense is deducted from premiums at the time premiums
are paid. However, a surrender charge, which may be deemed to be a
contingent deferred sales charge, is deducted from the Accumulation Value of
the Contract in the case where the Contract is surrendered, in whole or in
part, before annuity payments begin and, if certain settlement options are
selected, at the time annuity payments begin, under the circumstances
described in, and in amounts calculated as described in, the Prospectus
under the heading "CHARGES AND DEDUCTIONS--Surrender Charge (Contingent
Deferred Sales Charge)".
CALCULATION OF PERFORMANCE
Money Market Subaccount
The Prospectus contains information with respect to the yield and effective
yield of a hypothetical preexisting account having a balance of one Money
Market Portfolio Subaccount Accumulation Unit at the beginning of a
specified seven-day period. Such yield quotations have been calculated by
determining the net change, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one Accumulation Unit
of the Subaccount at the beginning of the period, subtracting a hypothetical
charge reflecting deductions from Contract Owner accounts, dividing the net
change by the value of the account at the beginning of the period to obtain
the base period return, and multiplying the base period return by 365/7. The
effective yield has been calculated by compounding the yield quotation for
such period by adding 1 and raising the sum to a power equal to 365/7, and
subtracting 1 from the result.
In determining the net change in the value of the account as described in
the preceding paragraph, all deductions that are charged to all Contract
Owner accounts have been reflected in proportion to the length of the seven-
day base period and the Subaccount's mean (or median) account size.
Deductions from purchase payments and surrender charges assessed have not
been reflected in, and realized gains and losses from the sale of securities
and unrealized appreciation and depreciation of the Subaccount and the
related portfolio company have been excluded from, the computation of yield.
This example illustrates the yield quotation for the Money Market Subaccount
for the seven-day period ended December 31, 1997:
Value of hypothetical pre-existing account with exactly
one Accumulation Unit at the beginning of the period $1.545282
Value of same account (excluding capital changes) at end
of the seven-day period $1.546619
Net change in account value $0.001336
Base Period Return:
Net change in account value divided by beginning account value $0.000865
Annualized Current Yield [0.000865 X (365/7)] 4.51%
Effective Yield (0.000865 + 1)365/7-1 4.61%
The annualization of a seven-day average yield is not a representation of
future actual yield.
Other Subaccounts
The Prospectus contains information with respect to yield quotations by
Subaccounts other than the Money Market Subaccount. These yield quotations
are based on a 30-day (or one month) period computed by dividing the net
investment income per accumulation unit earned during the period (the net
investment income earned by the Fund portfolio attributable to shares owned
by the Subaccount less expenses incurred during the period) by the maximum
offering price per Accumulation Unit on the last day of the period, by
setting yield equal to two times the difference between the sixth power of
one plus the designated ratio and one, where the designated ratio is the
difference between the net investment income earned during the period and
the expenses accrued for the period (net of reimbursement) divided by the
product of the average daily number of Accumulation Units outstanding during
the period and the maximum offering price per Accumulation Unit on the last
day of the period.
For fees that vary with the size of the Contract, a Contract size equal to
the mean (or median) Contract size has been assumed.
The following example illustrates the annualized current yield calculation
for the High Yield Subaccount for the 30-day base period ended December 31,
1997:
Dividends and interest earned by the High Yield Subaccount
during the base period $6,714,928
Expenses accrued for the base period $1,050,235
----------
$5,664,693(A)
----------
Product of the maximum public offering price on the
last day of the base period and the average daily
number of Units outstanding during the base period
that were entitled to receive dividends
($27.484585 x 31,127,720 Units) = $855,532,466(B)
============
Quotient of dividends and interest earned minus expenses
accrued divided by product of maximum public offering
price multiplied by average Units outstanding
(A divided by B) = 0.006621(C)
Adding one and raising total to the 6th power (C + 1)6= 1.040389(D)
Annualized current yield [2(D - 1) X 100] = 8.08%
The following example illustrates the annualized current yield calculation
for the Income Subaccount for the 30-day base period ended December 31,
1997:
Dividends and interest earned by the Income Subaccount
during the base period $3,450,191
Expenses accrued for the base period $ 748,448
------------
$2,701,743(A)
============
Product of the maximum public offering price on the
last day of the base period and the average daily
number of Units outstanding during the base period
that were entitled to receive dividends
($20.855134 x 29,214,314 Units) = $609,268,433(B)
============
Quotient of dividends and interest earned minus expenses
accrued divided by product of maximum public offering
price multiplied by average Units
outstanding (A divided by B) = 0.004434(C)
Adding one and raising total to the 6th power (C + 1)6 = 1.026901(D)
Annualized current yield [2(D-1) X 100] = 5.38%
Annualized current yield of any specific base period is not a representation
of future actual yield.
The Prospectus contains information with respect to performance data for the
Subaccounts of the Variable Account. Such performance data includes average
annual total return quotations for the 1, 5 and 10-year periods (or such
shorter time period during which the Contracts have been offered) computed
by finding the average annual compounded rates of return over the 1, 5 and
10-year periods (or such shorter time period during which the Contracts have
been offered) that would equate the initial amount invested to the ending
redeemable value, by equating the ending redeemable value to the product of
a hypothetical initial payment of $1,000, and one plus the average annual
total return raised to a power equal to the applicable number of years.
Such performance data assumes that any applicable charges have been deducted
from the initial $1,000 payment and includes all recurring fees that are
charged to all Contract Owners. If recurring fees charged to Contract Owners
are paid other than by redemption of Accumulation Units, such fees will be
appropriately reflected.
Average annual total return for any specific period is not a representation
of future actual results. Average annual total return assumes a steady rate
of growth. Actual performance fluctuates and will vary from the quoted
results for periods of time within the quoted periods.
The following example illustrates the average annual total return for the
Growth Subaccount from the date of inception through December 31, 1997:
Hypothetical $1,000 initial investment on March 8, 1988 $1,000
Ending redeemable value of the investment on December 31,
1997 (after deferred sales charge) $3,802
Total return for the period is the difference between the
ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed in terms
of a percentage (For example, 2 equals 200%) 280.19%*
Average annual total return from inception through
December 31, 1997 is the sum of the total return calculated
above plus one; such sum is raised to the power of 1/n where
n is expressed as nine years and 10 months; the result is
reduced by one and is expressed in terms of a percentage
(For example, 0.2 equals 20%) 14.56%*
The following example illustrates the average annual total return for the
High Yield Subaccount from the date of inception through the period ended
December 31, 1997:
Hypothetical $1,000 initial investment on March 8, 1988 $1,000
Ending redeemable value of the investment on December 31, 1997
(after deferred sales charge) $2,747
Total return for the period is the difference between the
ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed in terms of
a percentage (For example, 2 equals 200%) 174.85%*
Average annual total return from inception through
December 31, 1997 is the sum of the total return
calculated above plus one; such sum is raised to the
power of 1/n where n is expressed as nine years
and 10 months; the result is reduced by one and is
expressed in terms of a percentage
(For example, 0.2 equals 20%) 10.84%*
The following example illustrates the average annual total return for the
Income Subaccount from the date of inception through December 31, 1997:
Hypothetical $1,000 initial investment on March 8, 1988 $1,000
Ending redeemable value of the investment on December 31, 1997
(after deferred sales charge) $2,086
Total return for the period is the difference between
the ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed in
terms of a percentage (For example, 2 equals 200%) 108.55%*
Average annual total return from inception through
December 31, 1997 is the sum of the total return
calculated above plus one; such sum is raised to the
power of 1/n where n is expressed as nine years
and 10 months; the result is reduced by one and is
expressed in terms of a percentage
(For example, 0.2 equals 20%) 7.77%*
The following example illustrates the average annual total return for the
Money Market Subaccount from the date of inception through December 31,
1997:
Hypothetical $1,000 initial investment on February 18, 1988 $1,000
Ending redeemable value of the investment on December 31, 1997
(after deferred sales charge) $1,547
Total return for the period is the difference between
the ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed
in terms of a percentage (For example, 2 equals 200%) 54.70%*
Average annual total return from inception through
December 31, 1997 is the sum of the total return
calculated above plus one; such sum is raised to the
power of 1/n where n is expressed as nine years
and 11 months; the result is reduced by one and is
expressed in terms of a percentage
(For example, 0.2 equals 20%) 4.52%*
- -----------------------
The following example illustrates the average annual total return for the
Opportunity Growth Subaccount from the date of inception through the period
ended December 31, 1997:
Hypothetical $1,000 initial investment on January 18, 1996 $1,000
Ending redeemable value of the investment on
December 31, 1997 (after deferred sales charge) $1,124
Total return for the period is the difference between the
ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed in terms of
a percentage (For example, 2 equals 200%) 12.42%*
Average annual total return from inception through December
31, 1997 is the sum of the total return calculated above
plus one; such sum is raised to the power of 1/n where n
is expressed as one year and 347 days; the result is
reduced by one and is expressed in terms of a percentage
(For example, 0.2 equals 20%)...................................... 6.18%
The following example illustrates the average annual total return for the
World Growth Subaccount from the date of inception through December 31,
1997:
Hypothetical $1,000 initial investment on January 18, 1996 $1,000
Ending redeemable value of the investment on December 31, 1997
(after deferred sales charge) $1,061
Total return for the period is the difference between the
ending redeemable value and the hypothetical $1,000
initial investment divided by the hypothetical $1,000
initial investment; the result is expressed in terms
of a percentage (For example, 2 equals 200%) 6.10%*
Average annual total return from inception through December
31, 1997 is the sum of the total return calculated above
plus one; such sum is raised to the power of 1/n where n
is expressed as one year and 347 days; the result is
reduced by one and is expressed in terms of a percentage
(For example, 0.2 equals 20%)..................................... 3.08%
- -----------------------------
*Does not include the annual administrative charge of $30 deducted from any
Contract for which the total of premiums paid under such Contract minus all
prior surrenders is less than $5,000 or the Accumulated Value is less than
$5,000. Premium taxes may apply depending on various states' laws.
Inclusion of the administrative charge would reduce the total return figures
shown above.
FINANCIAL STATEMENTS OF VARIABLE ACCOUNT
Set forth on the following pages are the audited financial statements of the
Variable Account.
3100 Multifoods Tower
33 South Sixth Street
Minneapolis, MN 55402-3795
Price Waterhouse
[GRAPHIC OMITTED: LOGO]
Report of Independent Accountants
To Lutheran Brotherhood Variable Insurance
Products Company and Contract Owners of
LBVIP Variable Annuity Account I
In our opinion, the accompanying statement of assets and liabilities
and the related statements of operations and of changes in net
assets present fairly, in all material respects, the financial
position of the Opportunity Growth, World Growth, Growth, High
Yield, Income, and Money Market subaccounts of LBVIP Variable
Annuity Account I at December 31, 1997, the results of each of their
operations for the year then ended and the changes in each of their
net assets for each of the two years in the period then ended, in
conformity with generally accepted accounting principles. These
financial statements are the responsibility of Lutheran Brotherhood
Variable Insurance Products Company's management; our responsibility
is to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/S/Price Waterhouse LLP
March 20, 1998
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
Opportunity Growth Subaccount
Financial Statements
Statement of Assets and Liabilities
December 31, 1997
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 15,739,271
shares at net asset value of $11.55 per share
(cost $183,480,242) $181,764,690
Receivable from LBVIP for units issued 559,516
Receivable from LBVIP for annuity
reserve adjustment 655
------------
Total assets 182,324,861
------------
LIABILITIES:
Payable to LBVIP for mortality and expense
risk charge 177,828
------------
Total liabilities 177,828
------------
NET ASSETS $182,147,033
============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 15,467,334 $182,083,091
Reserves for contracts in annuity payment
period (note 2) 63,942
------------
NET ASSETS $182,147,033
============
Unit Value (net assets divided by units outstanding) $11.77
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $983,665
Mortality and expense risk charge (1,738,086)
------------
Net investment loss (754,421)
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments 34,347
Net change in unrealized appreciation
of investments 2,307,213
------------
Net gain on investments 2,341,560
------------
Net increase in net assets resulting
from operations $1,587,139
============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment loss $(754,421) $(597,846)
Net realized gain on investments 34,347 4,264,709
Net change in unrealized appreciation or depreciation
of investments 2,307,213 (4,022,765)
------------ ------------
Net change in net assets resulting from operations 1,587,139 (355,902)
------------ ------------
UNIT TRANSACTIONS:
Proceeds from units issued 33,692,902 43,517,652
Net asset value of units redeemed (7,479,333) (2,892,479)
Annuity benefit payments (4,103) (268)
Adjustments to annuity reserves 598 57
Transfers from other subaccounts 57,634,622 102,374,029
Transfers to other subaccounts (32,568,302) (18,280,708)
Transfers from fixed account 1,178,152 4,483,673
Transfers to fixed account (548,419) (192,277)
------------ ------------
Net increase in net assets from unit transactions 51,906,117 129,009,679
------------ ------------
Net increase in net assets 53,493,256 128,653,777
NET ASSETS:
Beginning of period 128,653,777 --
------------ ------------
End of period $182,147,033 $128,653,777
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
World Growth Subaccount
Financial Statements
Statement of Assets and Liabilities
December 31, 1997
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 12,013,470
shares at net asset value of $11.12 per share
(cost $127,627,101) $133,596,755
Receivable from LBVIP for annuity
reserve adjustment 513
------------
Total assets 133,597,268
------------
LIABILITIES:
Payable to LBVIP for units redeemed 24,492
Payable to LBVIP for mortality and expense
risk charge 131,601
------------
Total liabilities 156,093
------------
NET ASSETS $133,441,175
============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 12,001,805 $133,337,778
Reserves for contracts in annuity payment
period (note 2) 103,397
------------
NET ASSETS $133,441,175
============
Unit Value (net assets divided by units outstanding) $11.11
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $1,512,594
Mortality and expense risk charge (1,321,226)
------------
Net investment income 191,368
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments 262,685
Net change in unrealized appreciation
of investments 378,998
------------
Net gain on investments 641,683
------------
Net increase in net assets resulting
from operations $833,051
============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $191,368 $202,761
Net realized gain on investments 262,685 4,234
Net change in unrealized appreciation or depreciation
of investments 378,998 5,590,656
------------ ------------
Net increase in net assets resulting from operations 833,051 5,797,651
------------ ------------
UNIT TRANSACTIONS:
Proceeds from units issued 27,277,486 30,629,123
Net asset value of units redeemed (5,445,427) (2,173,209)
Annuity benefit payments (5,294) (348)
Adjustments to annuity reserves 453 60
Transfers from other subaccounts 36,771,421 62,246,080
Transfers to other subaccounts (18,590,541) (7,526,736)
Transfers from fixed account 1,108,601 2,999,363
Transfers to fixed account (376,927) (103,632)
------------ ------------
Net increase in net assets from unit transactions 40,739,772 86,070,701
------------ ------------
Net increase in net assets 41,572,823 91,868,352
NET ASSETS:
Beginning of period 91,868,352 --
------------ ------------
End of period $133,441,175 $91,868,352
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
Growth Subaccount
Financial Statements
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 72,272,585
shares at net asset value of $21.58 per share
(cost $1,108,075,175) $1,559,907,110
Receivable from LBVIP for units issued 179,583
--------------
Total assets 1,560,086,693
--------------
LIABILITIES:
Payable to LBVIP for mortality and expense
risk charge 1,530,627
Payable to LBVIP for annuity reserve adjustment 245
--------------
Total liabilities 1,530,872
--------------
NET ASSETS $1,558,555,821
==============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 40,950,649 $1,556,887,866
Reserves for contracts in annuity payment
period (note 2) 1,667,955
--------------
NET ASSETS $1,558,555,821
==============
Unit value (net assets divided by units outstanding) $38.02
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $15,211,978
Mortality and expense risk charge (15,260,092)
------------
Net investment loss (48,114)
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments 171,878,498
Net change in unrealized appreciation
or depreciation of investments 170,093,329
------------
Net gain on investments 341,971,827
------------
Net increase in net assets resulting
from operations $341,923,713
==============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $(48,114) $3,013,161
Net realized gain on investments 171,878,498 125,045,509
Net change in unrealized appreciation or depreciation
of investments 170,093,329 70,854,414
-------------- --------------
Net increase in net assets resulting from operations 341,923,713 198,913,084
-------------- --------------
UNIT TRANSACTIONS:
Proceeds from units issued 121,715,660 119,207,994
Net asset value of units redeemed (72,781,744) (46,253,842)
Annuity benefit payments (113,156) (64,069)
Adjustments to annuity reserves 3,514 5,294
Transfers from other subaccounts 116,505,569 112,569,202
Transfers to other subaccounts (107,949,338) (147,948,021)
Transfers from fixed account 3,858,748 6,967,990
Transfers to fixed account (5,054,325) (2,630,709)
-------------- --------------
Net increase in net assets from unit transactions 56,184,928 41,853,839
-------------- --------------
Net increase in net assets 398,108,641 240,766,923
NET ASSETS:
Beginning of period 1,160,447,180 919,680,257
-------------- --------------
End of period $1,558,555,821 $1,160,447,180
============== ==============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
High Yield Subaccount
Financial Statements
Statement of Assets and Liabilities
December 31, 1997
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 82,257,157
shares at net asset value of $10.44 per share
(cost $827,583,877) $858,485,916
Receivable from LBVIP for units issued 664,652
Receivable from LBVIP for annuity
reserve adjustment 1,629
------------
Total assets 859,152,197
------------
LIABILITIES:
Payable to LBVIP for mortality and expense
risk charge 847,345
------------
Total liabilities 847,345
------------
NET ASSETS $858,304,852
============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 31,175,954 $857,438,917
Reserves for contracts in annuity payment
period (note 2) 865,935
------------
NET ASSETS $858,304,852
============
Unit value (net assets divided by units outstanding) $27.50
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $75,476,621
Mortality and expense risk charge (8,725,501)
------------
Net investment income 66,751,120
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments 371,340
Net change in unrealized appreciation
of investments 29,696,530
------------
Net gain on investments 30,067,870
------------
Net increase in net assets resulting
from operations $96,818,990
============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $66,751,120 $59,515,516
Net realized gain (loss) on investments 371,340 (19,094)
Net change in unrealized appreciation or depreciation
of investments 29,696,530 7,891,668
------------ ------------
Net increase in net assets resulting from operations 96,818,990 67,388,090
------------ ------------
UNIT TRANSACTIONS:
Proceeds from units issued 83,390,722 81,132,453
Net asset value of units redeemed (54,543,335) (40,686,138)
Annuity benefit payments (83,214) (60,442)
Adjustments to annuity reserves 400 3,946
Transfers from other subaccounts 69,936,982 74,935,240
Transfers to other subaccounts (64,860,132) (97,051,120)
Transfers from fixed account 2,785,388 5,263,179
Transfers to fixed account (2,996,124) (1,410,377)
------------ ------------
Net increase in net assets from unit transactions 33,630,687 22,126,741
------------ ------------
Net increase in net assets 130,449,677 89,514,831
NET ASSETS:
Beginning of period 727,855,175 638,340,344
------------ ------------
End of period $858,304,852 $727,855,175
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
Income Subaccount
Financial Statements
Statement of Assets and Liabilities
December 31, 1997
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 61,499,533
shares at net asset value of $9.92 per share
(cost $610,714,480) $609,879,058
Receivable from LBVIP for units issued 134,074
Receivable from LBVIP for annuity
reserve adjustment. 3,764
------------
Total assets 610,016,896
------------
LIABILITIES:
Payable to LBVIP for mortality and expense
risk charge 603,779
------------
Total liabilities 603,779
------------
NET ASSETS $609,413,117
============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 29,190,381 $608,769,304
Reserves for contracts in annuity payment
period (note 2) 643,813
------------
NET ASSETS $609,413,117
============
Unit Value (net assets divided by units outstanding) $20.86
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $39,845,352
Mortality and expense risk charge (6,554,127)
------------
Net investment income 33,291,225
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments (1,147,328)
Net change in unrealized appreciation
of investments 11,260,158
------------
Net gain on investments 10,112,830
------------
Net increase in net assets resulting
from operations $43,404,055
============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $33,291,225 $33,554,390
Net realized loss on investments (1,147,328) (2,022,418)
Net change in unrealized appreciation or depreciation
of investments 11,260,158 (19,505,625)
------------ ------------
Net increase in net assets resulting from operations 43,404,055 12,026,347
------------ ------------
UNIT TRANSACTIONS:
Proceeds from units issued 47,699,752 55,916,013
Net asset value of units redeemed (50,716,293) (43,936,380)
Annuity benefit payments (61,071) (45,486)
Adjustments to annuity reserves 2,027 5,427
Transfers from other subaccounts 28,562,567 35,547,064
Transfers to other subaccounts (64,107,347) (99,484,197)
Transfers from fixed account 1,415,714 4,215,137
Transfers to fixed account (2,158,631) (3,061,354)
------------ ------------
Net decrease in net assets from unit transactions (39,363,282) (50,843,776)
------------ ------------
Net change in net assets 4,040,773 (38,817,429)
NET ASSETS:
Beginning of period 605,372,344 644,189,773
------------ ------------
End of period $609,413,117 $605,372,344
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
LBVIP Variable Annuity Account I
Money Market Subaccount
Financial Statements
Statement of Assets and Liabilities
December 31, 1997
<S> <C>
ASSETS:
Investment in LB Series Fund, Inc. 63,974,300
shares at net asset value of $1.00 per share
(cost $63,974,300) $63,974,300
Receivable from LBVIP for annuity
reserve adjustment 464
------------
Total assets 63,974,764
------------
LIABILITIES:
Payable to LBVIP for units redeemed 91,479
Payable to LBVIP for mortality and expense
risk charge 63,228
------------
Total liabilities 154,707
------------
NET ASSETS $63,820,057
============
NET ASSETS APPLICABLE TO ANNUITY
CONTRACT OWNERS:
Contracts in accumulation period, accumulation
units outstanding of 41,033,991 $63,463,936
Reserves for contracts in annuity payment
period (note 2) 356,121
------------
NET ASSETS $63,820,057
============
Unit Value (net assets divided by units outstanding) $1.55
======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year ended December 31, 1997
<S> <C>
INVESTMENT INCOME:
Dividend Income $3,119,876
Mortality and expense risk charge (651,479)
------------
Net investment income $2,468,397
============
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Years Ended December 31, 1997 and 1996
1997 1996
------------ ------------
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
OPERATIONS:
Net investment income $2,468,397 $1,850,162
------------ ------------
UNIT TRANSACTIONS:
Proceeds from units issued 35,436,541 30,645,088
Net asset value of units redeemed (8,971,221) (4,147,845)
Annuity benefit payments (90,013) (702)
Adjustments to annuity reserves 429 66
Transfers from other subaccounts 70,342,109 43,450,403
Transfers to other subaccounts (91,677,608) (60,831,236)
Transfers from fixed account 3,773,988 5,526,699
Transfers to fixed account (3,052,394) (2,202,304)
------------ ------------
Net increase in net assets from unit transactions 5,761,831 12,440,169
------------ ------------
Net increase in net assets 8,230,228 14,290,331
NET ASSETS:
Beginning of period 55,589,829 41,299,498
------------ ------------
End of period $63,820,057 $55,589,829
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
LBVIP Variable Annuity Account I
Notes to Financial Statements
December 31, 1997
(1) ORGANIZATION
The LBVIP Variable Annuity Account I (the Variable Account), a unit
investment trust registered under the Investment Company Act of
1940, was established as a separate account of Lutheran Brotherhood
Variable Insurance Products Company (LBVIP) in 1987, pursuant to the
laws of the State of Minnesota. LBVIP offers financial services to
Lutherans and through its parent, Lutheran Brotherhood Financial
Corporation, is a wholly owned subsidiary of Lutheran Brotherhood, a
fraternal benefit society. The Variable Account contains six
subaccounts--Opportunity Growth, World Growth, Growth, High Yield,
Income and Money Market--each of which invests only in a
corresponding portfolio of the LB Series Fund, Inc. (the Fund). The
Fund is registered under the Investment Company Act of 1940 as a
diversified open-end investment company.
The Variable Account is used to support only flexible premium
deferred variable annuity contracts issued by LBVIP. Under
applicable insurance law, the assets and liabilities of the Variable
Account are clearly identified and distinguished from the other
assets and liabilities of LBVIP. The assets of the Variable Account
will not be charged with any liabilities arising out of any other
business conducted by LBVIP.
(2) SIGNIFICANT ACCOUNTING POLICIES
Investments
The investments in shares of the Fund are stated at the net asset
value of the Fund. The cost of shares sold and redeemed is
determined on the average cost method. Dividend distributions
received from the Fund are reinvested in additional shares of the
Fund and recorded as income by the Variable Account on the ex-
dividend date.
Federal Income Taxes
LBVIP is taxed as a life insurance company and includes its flexible
premium deferred variable annuity operations in its tax return.
LBVIP anticipates no tax liability resulting from the operations of
the Variable Account. Consequently, no provision for income taxes
has been charged against the Variable Account.
Annuity Reserves
Annuity reserves are computed for currently payable contracts
according to the 1983 Table A mortality table. The assumed interest
is 3.5 percent. Changes to annuity reserves are based on actual
mortality and risk experience. If the reserves required are less
than the original estimated reserve amount held in the Variable
Account, the excess is reimbursed to LBVIP. If additional reserves
are required, LBVIP reimburses the Variable Account.
Other
The preparation of financial statements in conformity with generally
accepted accounting principals requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results
could differ from those estimates.
(3) RELATED PARTY TRANSACTIONS
Proceeds received by the Variable Account from units issued
represent gross contract premiums received by LBVIP less any
applicable premium taxes. Premium tax deductions were $2,590 and
$2,217 in 1997 and 1996, respectiverly. No charge for sales
distribution expense is deducted from premiums received.
A surrender charge is deducted from the accumulated value of the
contract to compensate LBVIP if a contract is surrendered in whole
or in part during the first six years the contract is in force. The
surrender charge is 6% during the first contract year, and decreases
by 1% each subsequent contract year. For purposes of the surrender
charge calculation, up to 10% of a contract's accumulated value may
be excluded from the calculation each year. This charge is deducted
by redeeming units of the subaccounts of the Variable Account.
Surrender charges of $1,434,930 and $1,161,902 were deducted in 1997
and 1996, respectively.
An annual administrative charge of $30 is deducted on each contract
anniversary from the accumulated value of the contract to compensate
LBVIP for administrative expenses relating to the contract and the
Variable Account. This charge is deducted by redeeming units of the
subaccounts of the Variable Account. No such charge is deducted from
contracts which total premiums paid, less surrenders, equals or
exceeds $5,000. No administrative charge is payable during the
annuity period. Administrative charges of $372,139 and $407,495 were
deducted in 1997 and 1996, respectively.
A daily charge is deducted from the value of the net assets of the
Variable Account to compensate LBVIP for mortality and expense risks
assumed in connection with the contract and is equivalent to an
annual rate of 1.1% of the average daily net assets of the Variable
Account. Mortality and expense risk charges of $34,250,511 and
$27,568,167 were deducted in 1997 and 1996, respectively.
A fixed account investment option is available for Contract Owners
of the flexible premium deferred variable annuity. Assets of the
fixed account are combined with the general assets of LBVIP and
invested by LBVIP as allowed by applicable law. Accordingly, the
fixed account assets are not included in the Variable Account
financial statements. The asset value of net transfers to the fixed
account was ($66,229) and $19,855,388 in 1997 and 1996,
respectively.
<TABLE>
<CAPTION>
(4) UNIT ACTIVITY
Transactions in accumulation units (including transfers among subaccounts) were as follows:
Subaccounts
----------------------------------------------------------------------------------------------------------
Opportunity World High Money
Growth Growth Growth Yield Income Market
---------------- -------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding at
December 31, 1995 N/A N/A 37,698,847 28,924,180 33,922,942 28,959,961
Units issued 12,847,883 9,458,349 9,323,597 7,236,285 5,452,779 55,255,678
Units redeemed (1,939,892) (1,051,724) (7,746,487) (6,299,047) (8,175,284) (46,750,231)
-------------- -------------- -------------- -------------- -------------- --------------
Units outstanding at
December 31, 1996 10,907,991 8,406,625 39,275,957 29,861,418 31,200,437 37,465,408
Units issued 8,253,738 5,912,478 7,471,667 6,371,968 4,180,641 72,622,680
Units redeemed (3,694,395) (2,317,298) (5,796,975) (5,057,432) (6,190,697) (69,054,097)
-------------- -------------- -------------- -------------- -------------- --------------
Units outstanding at
December 31, 1997 15,467,334 12,001,805 40,950,649 31,175,954 29,190,381 41,033,991
============== ============== ============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
(5) PURCHASES AND SALES OF INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments in the LB Series Fund, Inc. were as
follows:
Subaccounts
----------------------------------------------------------------------------------------------------------
Opportunity World High Money
Growth Growth Growth Yield Income Market
---------------- -------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
For the year ended
December 31, 1996
Purchases $132,537,116 $86,244,541 $188,813,231 $101,093,639 $47,511,313 $36,361,216
Sales 194,277 230,057 23,151,710 19,309,270 64,467,771 22,527,444
For the year ended
December 31, 1997
Purchases 57,799,961 43,916,921 249,475,346 118,503,484 46,920,269 44,184,828
Sales 6,693,213 2,488,675 27,449,765 18,155,728 53,150,762 35,707,381
</TABLE>
COMMENTS ON FINANCIAL STATEMENTS OF LBVIP
The financial statements of LBVIP included in this Statement of Additional
Information should be considered as bearing only upon the ability of LBVIP
to meet its obligations under the Contracts. The value of the interests of
Contract Owners, Annuitants and Beneficiaries under the Contracts are
affected primarily by the investment experience of the Subaccounts of the
Variable Account. The financial statements of LBVIP should not be considered
as bearing on the investment performance of the assets held in the Variable
Account.
FINANCIAL STATEMENTS OF LBVIP
Set forth on the following pages are the audited financial statements of
LBVIP.
3100 Multifoods Tower Telephone 612 332 7000
33 South Sixth Street Facsimile 612 332 6711
Minneapolis, MN 55402-3795
Price Waterhouse LLP [LOGO]
Report of Independent Accountants
March 12, 1998
To The Board of Directors and Stockholder
of Lutheran Brotherhood Variable
Insurance Products Company
In our opinion, the accompanying balance sheet and the related statements of
income, of stockholder's equity and of cash flows present fairly, in all
material respects, the financial position of Lutheran Brotherhood Variable
Insurance Products Company (the Company) at December 31, 1997 and 1996, and
the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1997 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with generally accepted auditing standards
which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ Price Waterhouse LLP
Price Waterhouse
1997 1996
Assets
Investments:
Fixed income securities available
for sale, at fair value $ 230,063 $ 170,500
Loans to contract holders 5,617 4,322
---------- ----------
Total investments 235,680 174,822
Cash and cash equivalents 6,747 18,535
Deferred policy acquisition costs 160,697 144,493
Investment income due and accrued 2,733 2,001
Other assets 5,244 4,881
Separate account assets 3,580,001 2,903,551
---------- ----------
Total assets $3,991,102 $3,248,283
========== ==========
Liabilities and Stockholder's Equity
Liabilities:
Contract reserves $ 222,243 $ 180,092
Benefits in the process of payment 7,516 5,166
Other liabilities 19,398 14,972
Separate account liabilities 3,580,001 2,903,551
---------- ----------
Total liabilities 3,829,158 3,103,781
Stockholder's equity:
2,000,000 shares authorized,
issued and outstanding 2,000 2,000
Additional paid-in capital 113,800 118,800
Net unrealized gains 2,501 292
Retained earnings 43,643 23,410
---------- ----------
Total stockholder's equity 161,944 144,502
---------- ----------
Total liabilities and stockholder's equity $3,991,102 $3,248,283
========== ==========
The accompanying notes are an
integral part of these financial statements.
1997 1996 1995
Revenues:
Net investment income $14,771 $11,402 $10,666
Net realized investment gains 374 2,751 49
Contract charges 46,523 38,983 32,664
Other income 3,332 2,717 1,106
------- ------- -------
Total revenues 65,000 55,853 44,485
Benefits and other deductions:
Net additions to contract reserves 2,121 2,567 275
Contractholder benefits 13,718 11,763 10,241
Commissions 17,076 16,960 11,395
Operating expenses 22,561 18,513 15,310
Increase in deferred policy
acquisition costs (17,799) (15,757) (13,599)
------- ------- -------
Total benefits and other deductions 37,677 34,046 23,622
Income (loss) from operations before
income taxes 27,323 21,807 20,863
Provision for income taxes 7,090 7,479 3,722
------- ------- -------
Net income (loss) $20,233 $14,328 $17,141
======= ======= =======
The accompanying notes are an
integral part of these financial statements.
<PAGE>
<TABLE>
Additional Unrealized Total
Common Paid-in Gains Retained Stockholder's
Stock Capital (Losses) Earnings Equity
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $2,000 $118,800 $ (33) $ (8,059) $112,708
1995 transactions:
Net income 17,141 17,141
Unrealized gains 1,988 1,988
------ -------- ------ -------- --------
Balance at December 31, 1995 2,000 118,800 1,955 9,082 131,837
1996 transactions:
Net income 14,328 14,328
Unrealized losses (1,663) (1,663)
------ -------- ------ -------- --------
Balance at December 31, 1996 2,000 118,800 292 23,410 144,502
1997 transactions:
Net income 20,233 20,233
Return of capital (5,000) (5,000)
Unrealized gains 2,209 2,209
------ -------- ------ -------- --------
Balance at December 31, 1997 $2,000 $113,800 $2,501 $43,643 $161,944
====== ======== ====== ======= ========
The accompanying notes are an
integral part of these financial statements.
</TABLE>
1997 1996 1995
Cash flows from operating activities:
Net income (loss) $20,233 $14,328 $17,141
Adjustments to reconcile net
income to net cash provided by
operating activities:
Deferred policy acquisition costs (17,799) (15,757) (13,599)
Realized net investment gains (374) (2,751) (49)
Change in operating assets and liabilities:
Loans to contract holders (1,294) (1,633) (1,009)
Other assets (1,095) 1,705 (4,321)
Contract reserves 42,151 16,307 55,765
Other liabilities 3,288 9,572 2,047
Increase in benefits in process of payment 2,350 1,545 147
Bond amortization 99 59 22
------- ------- -------
Net cash provided by operating activities 47,559 23,375 56,144
------- ------- -------
Cash flows from investing activities:
Proceeds from sale of fixed income
securities available for sale 27,888 63,535 2,911
Purchase of fixed income securities
available for sale (82,235) (93,737) (54,411)
------- ------- -------
Net cash used in investing activities (54,347) (30,202) (51,500)
------- ------- -------
Cash flows from financing activities:
Return of capital (5,000)
------- ------- -------
Net cash used in financing activities (5,000)
------- ------- -------
Net (decrease) increase in cash
and cash equivalents (11,788) (6,827) 4,644
Cash and cash equivalents, beginning of year 18,535 25,362 20,718
------- ------- -------
Cash and cash equivalents, end of year $ 6,747 $18,535 $25,362
======= ======= =======
The accompanying notes are an
integral part of these financial statements.
1. Organization
Lutheran Brotherhood Variable Insurance Products Company (the Company)
offers financial services to Lutherans. The Company, through its parent,
Lutheran Brotherhood Financial Corporation (LBFC or Parent), is a wholly
owned subsidiary of Lutheran Brotherhood, a fraternal benefit organization.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, money market instruments and
other debt issues with an original maturity of 90 days or less.
Investments
See disclosures regarding the determination of fair value of financial
instruments at Note 10.
Carrying value of investments is determined as follows:
Fixed income securities Fair value
Loans to contractholders Amortized cost
Fixed income securities which may be sold prior to maturity are classified
as available for sale.
Realized investment gains and losses on sales of securities are determined
on a first in, first out method for fixed income securities and are reported
in the Statement of Income. Unrealized investment gains and losses on fixed
income securities classified as available for sale, net of the impact of
unrealized investment gains and losses on deferred policy acquisitions
costs, are excluded from net income and reported in a separate component of
stockholder's equity.
Deferred Policy Acquisition Costs
Those costs of acquiring new business, which vary with and are primarily
related to the production of new business, have been deferred to the extent
that such costs are deemed recoverable from future profits. Such costs
include commissions, certain costs of contract issuance and underwriting,
and certain variable agency expenses.
For universal life-type and investment-type contracts, deferred acquisition
costs are amortized in proportion to estimated gross profits from mortality,
investment, and expense margins. The effects of revisions to experience on
previous amortization of deferred acquisition costs are reflected in
earnings and change in unrealized investment gains (losses) in the period
estimated gross profits are revised.
Separate Accounts
Separate account assets include segregated funds invested by the Company for
the benefit of variable life insurance and variable annuity contract owners.
The assets (principally investments) and liabilities (principally to
contractholders) of each account are clearly identifiable and
distinguishable from other assets and liabilities of the Company. Assets
are valued at market. The investment income, gains and losses of these
accounts generally accrue to the contractholders, and, therefore, are not
included in the Company's net income.
Future Contract Benefits
Liabilities for future contract and contract benefits on universal life-type
and investment-type contracts are based on the contract account balance.
Premium Revenue and Benefits to Contractholders
Recognition of Universal Life-Type Contracts Revenue and Benefits to
Contractholders
Universal life-type contracts are insurance contracts with terms that are
not fixed and guaranteed. The terms that may be changed could include one
or more of the amounts assessed the contractholder, premiums paid by the
contractholder or interest accrued to contractholder balances. Amounts
received as payments for such contracts are not reported as premium
revenues.
Revenues for universal-type contracts consist of investment income, charges
assessed against contract account values for deferred contract loading, the
cost of insurance and contract administration. Contract benefits and claims
that are charged to expense include interest credited to contracts and
benefit claims incurred in the period in excess of related contract account
balances.
Recognition of Investment Contract Revenue and Benefits to Contractholders
Contracts that do not subject the Company to risks arising from
contractholder mortality or morbidity are referred to as investment
contracts. Certain deferred annuities are considered investment contracts.
Amounts received as payments for such contracts are not reported as premium
revenues.
Revenues for investment products consist of investment income and contract
administration charges. Contract benefits that are charged to expense
include benefit claims incurred in the period in excess of related contract
balances, and interest credited to contract balances.
3. Income Taxes
The Company's tax provision and related balance sheet accounts are
determined in accordance with a tax sharing agreement with its Parent, which
allocates federal income taxes to the Company as if it filed a separate tax
return. Federal income taxes are charged or credited to operations based on
amounts estimated to be payable or recoverable as a result of taxable
operations for the current year. Deferred income tax assets and liabilities
are recognized based on the temporary differences between financial
statement carrying amounts and income tax bases of assets and liabilities
using enacted income tax rates and laws.
The 1997 and 1996 provisions for income taxes reflected on the Statement of
Income consisted entirely of deferred federal and state income tax expense.
Net deferred income tax liabilities are included on the balance sheet in
"Other Liabilities" and consist of the following:
1997 1996
Deferred policy acquisition costs $(49.4) $(43.6)
Reserves for future benefits 25.4 26.9
Net operating loss carryforwards 9.1 9.4
Other (4.7) (3.7)
------ ------
Net deferred income tax liability $(19.6) $(11.0)
During 1997, the Company utilized $3 million of its net operating loss
carryforward and $3 million of its alternative minimum tax net operating
loss carryforward. The Company has net operating loss carryforwards for tax
purposes of approximately $26 million at December 31, 1997, which expire
between 2005 and 2009. For alternative minimum tax calculation purposes,
the Company has net operating loss carryforwards of $27 million at December
31, 1997, which expire between 2005 and 2009.
The Company's effective tax rate of 26% differs from the statutory rate due
to dividends received deductions.
4. Investments
Fixed Income Securities
Investments in fixed income securities are primarily intended to back long-
term liabilities; therefore, care should be exercised in drawing any
conclusions from market value information.
Investments in fixed income securities at December 31, 1997 and 1996 follow:
Available for Sale (Carried at Fair Value)
December 31, 1997
-----------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Fixed income securities:
U.S. government $113,407 $3,990 $ 70 $117,327
Mortgage-backed securities 32,398 487 32,885
All other corporate bonds 78,523 1,412 84 79,851
-------- ------ ---- --------
Total available for sale $224,328 $5,889 $154 $230,063
======== ====== ====== ========
Available for Sale (Carried at Fair Value)
December 31, 1998
-----------------------------------------
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
Fixed income securities:
U.S. government $96,080 $2,128 $ 715 $97,493
Mortgage-backed securities 29,718 -- 292 29,426
All other corporate bonds 43,909 53 381 43,581
-------- ------ ---- --------
Total available for sale $169,707 $2,181 $1,388 $170,500
======== ====== ====== ========
Contractual Maturity of Fixed Income Securities
The amortized cost and fair value of fixed income securities available for
sale as of December 31, 1997 are shown below by contractual maturity.
Actual maturities may differ from contractual maturities because securities
may be restructured, called or prepaid.
Amortized Fair
Years to Maturity Cost Value
One year or less $ 12,007 $ 12,086
After one year through five years 57,881 59,556
After five years through ten years 86,817 89,245
After ten years 35,225 36,291
Mortgage-backed securities 32,398 32,885
-------- --------
Total available for sale $224,328 $230,063
======== ========
5. Investment Income and Realized Gains and Losses
Investment income summarized by type of investment was as follows:
Year Ended December 31,
---------------------------
1997 1996 1995
Fixed income securities $13,472 $ 9,061 $ 8,582
Contract loans 367 267 165
Cash and cash equivalents 952 2,093 1,940
------- ------- -------
Gross investment income 14,791 11,421 10,687
Investment expenses 20 19 21
------- ------- -------
Net investment income $14,771 $11,402 $10,666
======= ======= =======
Gross realized investment gains and losses on sales of all types of
investments are as follows:
Year Ended December 31,
------------------------
1997 1996 1995
Fixed income securities:
Realized gains $426 $2,913 $57
Realized losses 53 160 2
Other investments:
Realized gains 1 1 -
Realized losses 3 6
---- ------ ---
Total net realized investment gains $374 $2,751 $49
==== ====== ===
6. Statutory Deposit
Bonds with a carrying value of $2.5 million and $2.2 million and a market
value of $2.7 million and $2.3 million at December 31, 1997 and 1996,
respectively, are on deposit with various state insurance departments as
required by law.
7. Separate Account Business
Separate account assets include segregated funds invested by the Company for
the benefit of variable life insurance and variable annuity contract owners.
A portion of the contract owner's premium payments are invested by the
Company into the LBVIP Variable Insurance Account, the LBVIP Variable
Insurance Account II, or the LBVIP Variable Annuity Account I (the Variable
Accounts). The Company records these payments as assets in the separate
accounts. Separate account liabilities represent reserves held related to
the separate account business.
The Variable Accounts are unit investment trusts registered under the
Investment Company Act of 1940. Each Variable Account has six subaccounts,
each of which invests only in a corresponding portfolio of the LB Series
Fund, Inc. (the Fund). The Fund is a diversified, open-end management
investment company. The shares of the Fund are carried in the Variable
Accounts' financial statements at the net asset value.
Effective January 22, 1991, a fixed account was added as an investment
option for variable annuity contract owners. Net premiums allocated to the
fixed account are invested in the assets of the Company.
The assets and liabilities of the Variable Accounts are clearly identified
and distinguished from the other assets and liabilities of the Company. The
assets of the Variable Accounts will not be applied to the liabilities
arising out of any other business conducted by the Company.
The Company assumes the mortality and expense risk associated with these
contracts for which it is compensated by the separate accounts. The daily
charges to the separate accounts are based on the average daily net assets
at the following annual rates:
1997 1996 1995
Rate Charges Charges Charges
Variable Insurance Account .06% $ 911 $ 696 $ 516
Variable Insurance Account II 2.3% 55 52 48
Variable Annuity Account I 1.1% 34,251 27,568 21,891
------- ------- -------
$35,217 $28,316 $22,455
======= ======= =======
Income from these charges is included in the Statement of Income.
In addition, the Company deducts certain amounts from the cash value of the
accounts invested in the separate accounts for surrender charges and annual
administrative charges as follows:
1997 1996 1995
Variable Insurance Account $ 9,030 $8,206 $7,307
Variable Insurance Account II - - -
Variable Annuity Account I 1,807 1,569 1,861
------- ------ ------
$10,837 $9,775 $9,168
======= ====== ======
8. Related Party Transactions
Lutheran Brotherhood provides administrative services to and collects
premiums for the Company. The net payable at December 31, 1997 represents
the unpaid balance of these administrative services net of the premiums
collected but not transferred to the Company.
Lutheran Brotherhood allocated approximately $18.2 million, $12.8 million
and $13.6 million of operating expenses to the Company in 1997, 1996 and
1995, respectively, which includes the costs for corporate officers, human
resources, and other administrative and operating functions. Lutheran
Brotherhood has agreed to provide the Company with capital requirements, if
necessary.
Payables to affiliates includes the following:
1997 1996
Lutheran Brotherhood:
Operating expenses payable $ 1,620 $ 1,523
Premium income (1,159) (1,264)
Lutheran Brotherhood Securities Corp.:
Operating expenses payable 10 11
------- -------
$ 471 $ 270
======= =======
Lutheran Brotherhood Securities Corp. (LBSC) is an affiliate of the Company.
The payable represents operating expenses of the Company paid by LBSC that
have not been reimbursed as of December 31, 1997 and 1996.
LBSC allocated $.4 million, $0.3 million and $0.4 million of operating
expenses to the Company in 1997, 1996 and 1995, respectively, which includes
the costs for various administrative and operating functions. In addition,
LBSC, as principal underwriter of the Company's variable products, received
commission income from the Company of approximately $17 million, $16.9
million and $11.5 million in 1997, 1996 and 1995, respectively.
9. Disclosures About Fair Value of Financial Instruments
The following methods and assumptions were used in estimating fair value
disclosures for financial instruments. In cases where quoted market prices
are not available, fair values are based on estimates using present value or
other valuation techniques. Those techniques are significantly affected by
the assumptions used, including the discount rate and estimates of future
cash flows. In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, could
not be realized in immediate settlement of the instrument.
The following methods and assumptions were used in estimating its fair value
disclosures for financial instruments.
FIXED INCOME SECURITIES: Fair values for fixed income securities are based
on quoted market prices, where available. For fixed maturities not actively
traded in the market, fair values are estimated using market quotes from
brokers or internally developed pricing methods.
LOANS ON INSURANCE CONTRACTS: The carrying amount reported in the balance
sheet approximates fair value since loans on insurance contracts reduce the
amount payable at death or at surrender of the contract.
CASH AND CASH EQUIVALENTS: The carrying amounts for these assets
approximate the assets' fair values.
OTHER FINANCIAL INSTRUMENTS REPORTED AS ASSETS: The carrying amounts for
these financial instruments (primarily premiums and other accounts
receivable and accrued investment income), approximate those assets' fair
values.
INVESTMENT CONTRACT LIABILITIES: The fair value for deferred annuities was
estimated to be the amount payable on demand at the reporting date as those
investment contracts have no defined maturity and are similar to a deposit
liability. The amount payable at the reporting date was calculated as the
account balance less applicable surrender charges.
The fair values for supplementary contracts without life contingencies and
immediate annuities were estimated using discounted cash flow analyses using
similar maturities or by using cash surrender value.
The carrying amounts and estimated fair values of the Company's financial
instruments are as follows:
1997 1996
---------------------- -----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
Financial instruments
recorded as assets:
Fixed income securities $ 230,063 $ 230,063 $ 170,500 $ 170,500
Contract loans 5,617 5,617 4,322 4,322
Cash and cash equivalents 6,747 6,747 18,535 18,535
Other financial instruments
recorded as assets 7,977 7,977 6,882 6,882
Financial instruments recorded
as liabilities:
Investment contracts:
Deferred annuities 3,510,194 3,442,622 2,876,818 2,804,151
Supplementary contracts
and immediate annuities 41,068 41,068 22,258 22,258
10. Statutory Financial Information
Accounting practices used to prepare statutory financial statements for
regulatory filing of fraternal life insurance companies differ from GAAP.
The following reconciles the Company's statutory net change in surplus and
statutory surplus determined in accordance with accounting practices
prescribed or permitted by the Insurance Department of the State of
Minnesota with net income and stockholder's equity on a GAAP basis (in
thousands).
Year Ended
December 31,
------------------
1997 1996
Net change in statutory accumulated deficit $ 8,642 $ 13,316
Change in asset valuation reserves 118 176
------- --------
Net change in statutory accumulated deficit and
asset valuation reserves 8,760 13,492
Adjustments:
Future contract benefits and contractholders'
account balances 1,739 (4,232)
Deferred policy acquisition costs 17,799 15,756
Investment losses (132) 2,465
Other, net (7,933) (13,153)
------ -------
Net income $20,233 $14,328
======= =======
Year Ended
December 31,
-------------------
1997 1996
Statutory stockholder's equity $ 80,583 $ 76,941
Asset valuation reserves 417 299
-------- --------
Statutory stockholder's equity and asset
valuation reserves 81,000 77,240
Adjustments:
Future contract benefits and contractholders'
account balances (64,060) (65,798)
Deferred policy acquisition costs 160,696 144,843
Interest maintenance reserves 2,583 2,714
Valuation of investments 5,735 792
Unearned revenue liability (4,825) (3,801)
Tax adjustment (19,580) (11,351)
Other, net 395 (137)
-------- --------
Stockholder's equity $161,944 $144,502
======== ========
<PAGE>
APPENDIX B
STATE PREMIUM TAX CHART
Premium taxes vary according to the state and are subject to change. In
many jurisdictions there is no tax at all. For current information, a tax
adviser should be consulted.
The current premium tax rates are a guide only and should not be relied on
to determine actual premium taxes on any premium payment or Contract because
the taxes are subject to change from time to time by legislative and other
governmental action. In addition, other governmental units within a state
may levy such taxes. The timing of tax levies also varies from one taxing
authority to another. Consequently, in many cases the purchaser of a
Contract will not be able to accurately determine the premium tax applicable
to the Contract by reference to the state tax rates described below.
RATE OF TAX
----------------
QUALIFIED NON-QUALIFIED
STATE PLANS PLANS
------ --------
California .50% 2.35%*
District of Columbia 2.25% 2.25%*
Florida -- 1.00%
Kansas -- 2.00%*
Kentucky 2.00%* 2.00%*
Maine -- 2.00%
Nevada -- 3.50%*
South Dakota -- 1.25%
West Virginia 1.00% 1.00%
Wyoming -- 1.00%
* Taxes become due when annuity benefits commence, rather than when the
premiums are collected. At the time of annuitization, the premium tax
payable will be charged against the Accumulated Value.
[This page intentionally left blank]
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A: None.
Part B: Financial Statements of Lutheran Brotherhood Variable
Insurance Products Company. (1)
Financial Statements of LBVIP Variable Annuity Account I.
(1)
(b) Exhibits:
1. Resolution of the Board of Directors of Lutheran Brotherhood
Variable Insurance Products Company ("Depositor") authorizing
the establishment of LBVIP Variable Annuity Account I
("Registrant"). (1)
2. Not Applicable.
3.(a) Form of Distribution Agreement between Depositor and
Lutheran Brotherhood Securities Corp ("LBSC"). (1)
(b) Forms of General Agent's Agreement and Selected Registered
Representative Agreement between LBSC and agents with
respect to the sale of Contracts. (1)
4. Form of Contract. (1)
5. Contract Application Form. (1)
6.(a) Articles of Incorporation of Depositor (incorporated by
reference to Exhibit A(6)(a) to Registrant's Registration
Statement No. 33-3243). (1)
(b) Bylaws of Depositor (incorporated by reference to Exhibit
A(6)(b) to Registrant's Registration Statement No. 33-
3243). (1)
7. Not Applicable.
8. Form of Management Service Agreement among Lutheran
Brotherhood, LBSC and Depositor. (1)
9. Opinion of Counsel as to the legality of the securities being
registered (including written consent). (1)
10. Not Applicable.
11. Not Applicable.
12. Not Applicable.
13. Computations of Performance Data. (1)
14. Consent of Independent Accountant. (1)
15. Powers of Attorney. (1)
16. Consent of Counsel. (1)
________________________________
(1) Filed herewith.
Item 25. Directors and Officers of the Depositor
NAME POSITIONS AND OFFICES WITH DEPOSITOR
Directors
Robert P. Gandrud President and Chief Executive Officer of
Lutheran Brotherhood
Bruce J. Nicholson Executive Vice President and Chief Financial
Officer of Lutheran Brotherhood
Rolf F. Bjelland Executive Vice President of Lutheran
Brotherhood
David W. Angstadt Executive Vice President and Chief Marketing
Officer of Lutheran Brotherhood
David J. Larson Senior Vice President, Secretary and General
Counsel of Lutheran Brotherhood
Jennifer H. Martin Senior Vice President of Lutheran Brotherhood
Jerald E. Sourdiff Senior Vice President and Chief Financial
Officer of Lutheran Brotherhood
EXECUTIVE OFFICERS POSITIONS WITH THE DEPOSITOR
Robert P. Gandrud President, Chairman and Chief Executive
Officer
Bruce J. Nicholson Chief Operating Officer
Jerald E. Sourdiff Vice President and Chief Financial Officer
David K. Stewart Treasurer
David W. Angstadt Vice President and Chief Marketing Officer
Rolf F. Bjelland Vice President and Chief Investment Officer
David J. Larson Vice President and Secretary
David J. Christianson Vice President--Insurance Services (Vice
President of Lutheran Brotherhood)
Otis F. Hilbert Vice President and Assistant Secretary (Vice
President and Associate General Counsel of
Lutheran Brotherhood)
Randall L. Boushek Vice President
James R. Olson Vice President (Vice President of Lutheran
Brotherhood)
Susan Oberman Smith Vice President
Richard B. Ruckdashel Vice President
James M. Walline Vice President--Investments (Vice President
of Lutheran Brotherhood)
The principal business address of each of the foregoing directors and
officers is 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
Item 26. Persons Controlled by or Under Common Control with Depositor or
Registrant
Registrant is a separate account of Depositor, established by the Board of
Directors of Depositor in 1987 pursuant to the laws of the State of
Minnesota.
Depositor is an indirect subsidiary of Lutheran Brotherhood, a fraternal
benefit society founded under the laws of the State of Minnesota. Lutheran
Brotherhood's other direct and indirect subsidiaries are (a) Lutheran
Brotherhood Financial Corporation, a Minnesota corporation which is a
holding company that has no independent operations, (b) LBSC, a Pennsylvania
corporation which is a registered broker-dealer, (c) Lutheran Brotherhood
Research Corp., a Minnesota corporation which is a licensed investment
adviser, and (d) Lutheran Brotherhood Real Estate Products Company, a
Minnesota corporation.
Item 27. Number of Contract Owners
There were 90,774 Contract Owners at April 14, 1998.
Item 28. Indemnification
Reference is hereby made to Section 4.01 of Depositor's Bylaws, filed as an
Exhibit to this Registration Statement, and to Section 5 of LBSC's By-Laws,
which mandate indemnification by Depositor and LBSC of directors, officers
and certain others under certain conditions. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of Depositor or LBSC, pursuant
to the foregoing provisions or otherwise, Depositor and LBSC have 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 Depositor or LBSC of
expenses incurred or paid by a director or officer or controlling person of
Depositor or LBSC in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person of
Depositor or LBSC in connection with the securities being registered,
Depositor or LBSC 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 or not such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
An insurance company blanket bond is maintained providing $10,000,000
coverage for officers and employees of Lutheran Brotherhood, Depositor and
LBSC, and $750,000 coverage for their general agents and Depositor's
Representatives, both subject to a $100,000 deductible.
Item 29. Principal Underwriters
(a) LBSC, the principal underwriter of the Contracts, is also named as
distributor of the stock of The Lutheran Brotherhood Family of Funds, a
diversified open-end investment company organized as a Delaware business
trust, consisting of the following series: Lutheran Brotherhood Money Market
Fund, Lutheran Brotherhood Opportunity Growth Fund, Lutheran Brotherhood
Fund, Lutheran Brotherhood World Growth Fund, Lutheran Brotherhood Mid Cap
Growth Fund, Lutheran Brotherhood Income Fund, Lutheran Brotherhood High
Yield Fund, and Lutheran Brotherhood Municipal Bond Fund. LBSC also acts or
will act as the principal underwriter of the following variable contracts:
flexible premium variable life insurance contracts issued by Lutheran
Brotherhood through LB Variable Insurance Account I, a separate account of
Lutheran Brotherhood registered as a unit investment trust under the
Investment Company Act of 1940; flexible premium deferred variable annuity
contracts issued by Lutheran Brotherhood through LB Variable Annuity Account
I, a separate account of Depositor registered as a unit investment trust
under the Investment Company Act of 1940; flexible premium variable life
insurance contracts issued by Depositor through LBVIP Variable Insurance
Account, a separate account of Depositor registered as a unit investment
trust under the Investment Company Act of 1940; and of single premium
variable life insurance contracts issued by Depositor through LBVIP Variable
Insurance Account II, a separate account of Depositor registered as a unit
investment trust under the Investment Company Act of 1940.
(b) The directors and officers of LBSC are as follows:
Robert P. Gandrud Chairman and Director
Rolf F. Bjelland Director
Bruce J. Nicholson Director
David W. Angstadt President and Director
David J. Larson Director
Jennier H. Martin Director
Jerald E. Sourdiff Chief Financial Officer and Director
David K. Stewart Treasurer
Otis F. Hilbert Vice President and Secretary
Larry A. Borlaug Vice President
Colleen Both Vice President
J. Keith Both Vice President
Craig R. Darrington Vice President
Mitchell F. Felchle Vice President
Wayne A. Hellbusch Vice President
Douglas B. Miller Vice President
C. Theodore Molen Vice President
James R. Olson Vice President
William H. Reichwald Vice President
Richard B. Ruckdashel Vice President
Vicki R. Brandt Assistant Vice President
Stephen R. Grinna Assistant Vice President
Douglas J. Halvorson Assistant Vice President
Katie S. Kloster Assistant Vice President
Frederick P. Johnson Assistant Vice President
Brenda J. Pederson Assistant Vice President
Marie A. Sorensen Assistant Vice President
John C. Bjork Assistant Secretary
James M. Odland Assistant Secretary
The principal business address of each of the foregoing officers is 625
Fourth Avenue South, Minneapolis, Minnesota 55415.
(c) Not Applicable.
Item 30. Location of Accounts and Records
The accounts and records of Registrant are located, in whole or in part, at
the office of Depositor at 625 Fourth Avenue South, Minneapolis, Minnesota
55415.
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
Registrant will file a post-effective amendment to this Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in this Registration Statement are never more than 16 months old
for so long as payments under the Contracts may be accepted.
Registrant will include either (1) as part of any application to purchase a
Contract offered by the Prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information.
Registrant will deliver any Statement of Additional Information and any
financial statements required to be made available under this form promptly
upon written or oral request.
Registrant understands that the restrictions imposed by Section 403(b)(11)
of the Internal Revenue Code conflict with certain sections of the
Investment Company Act of 1940 that are applicable to the Contracts. In
this regard, Registrant is relying on a no-action letter issued by the
Office of Insurance Product and Legal Compliance of the SEC and the
requirements for such reliance have been complied with by Registrant.
Lutheran Brotherhood Variable Insurance Products Company hereby represents
that, as to the individual flexible premium variable annuity contracts that
are the subject of this registration statement, File Number 33-15974, that
the fees and charges deducted under the contracts, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by Lutheran Brotherhood Variable Insurance
Products Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all of the requirements for effectiveness of this
amendment to the Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis and State of Minnesota
on the 28th day of April, 1998.
LBVIP VARIABLE ANNUITY ACCOUNT I
(Registrant)
By LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
(Depositor)
By /s/ Robert P. Gandrud
----------------------------
Robert P. Gandrud, President
Pursuant to the requirements of the Securities Act of 1933, the Depositor
has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Minneapolis and State of Minnesota on the 28th day of April, 1998.
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
(Depositor)
By /s/ Robert P. Gandrud
----------------------------
Robert P. Gandrud, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed on the 28th day of April, 1998
by the following directors and officers of Depositor in the capacities
indicated:
/s/ Robert P. Gandrud President, Chairman (Chief Executive
----------------------- Officer)
Robert P. Gandrud
/s/ Jerald E. Sourdiff Chief Financial Officer (Principal
----------------------- Financial Officer)
Jerald E. Sourdiff
/s/ David K. Stewart Treasurer (Principal Accounting
----------------------- Officer)
David K. Stewart
Robert P. Gandrud
Bruce J. Nicholson A Majority of the
Rolf F. Bjelland Board of Directors
David W. Angstadt
David J. Larson
Jerald E. Sourdiff
Jennifer H. Martin
Otis F. Hilbert, by signing his name hereto, does hereby sign this document
on behalf of each of the above-named directors of Lutheran Brotherhood
Variable Insurance Products Company pursuant to powers of attorney duly
executed by such persons.
/s/ Otis F. Hilbert
------------------------------
Otis F. Hilbert, Attorney-in-Fact
<PAGE>
INDEX TO EXHIBITS
LBVIP VARIABLE ANNUITY ACCOUNT I
EXHIBIT NO.
- -----------
1 Resolution of the Board of Directors of Lutheran
Brotherhood Variable Insurance Products Company
("Depositor") authorizing the establishment of LBVIP
Variable Annuity Account I ("Registrant").
3(a) Form of Distribution Agreement between Depositor and
Lutheran Brotherhood Securities Corp ("LBSC").
3(b) Forms of General Agent's Agreement and Selected
Registered Representative Agreement between LBSC and
agents with respect to the sale of Contracts.
4 Form of Contract.
5 Contract Application Form.
6(a) Articles of Incorporation of Depositor (incorporated by
reference to Exhibit A(6)(a) to Registrant's
Registration Statement No. 33-3243).
6(b) Bylaws of Depositor (incorporated by reference to
Exhibit A(6)(b) to Registrant's Registration Statement
No. 33-3243).
8 Form of Management Service Agreement among Lutheran
Brotherhood, LBSC and Depositor.
9 Opinion of Counsel as to the legality of the securities
being registered (including written consent).
13 Computations of Performance Data.
14 Consent of Independent Accountant.
15 Powers of Attorney.
16 Consent of Counsel.
#20831
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 20 to the
registration statement on Form N-4 (the "Registration Statement") of our
report dated March 20, 1998 relating to the financial statements of LBVIP
Variable Annuity Account I, which appears in such Statement of Additional
Information, and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement. We also
consent to the references to us under the heading "Financial Statements and
Experts" in such Prospectus and under the heading "Independent Accountants
and Financial Statements" in such Statement of Additional Information.
We also consent to the use in such Statement of Additional Information of
our report dated March 12, 1998, relating to the financial statements of
Lutheran Brotherhood Variable Insurance Products Company which appears in
such Statement of Additional Information.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
April 28, 1998
#20602
<PAGE>
EXHIBIT 15
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
LBVIP VARIABLE ANNUITY ACCOUNT I
POWER OF ATTORNEY OF
DIRECTORS AND OFFICERS
KNOW ALL MEN BY THESE PRESENTS, that the each of the undersigned
directors and/or officers of LUTHERAN BROTHERHOOD VARIABLE INSURANCE
PRODUCTS COMPANY, a Minnesota corporation (the "Company"), the Depositor of
LBVIP VARIABLE ANNUITY ACCOUNT I, does hereby make, constitute and appoint
Randall L. Wetherille, James M. Odland, Otis F. Hilbert and John C. Bjork,
and each or any of them, the undersigned's true and lawful attorneys-in-
fact, with power of substitution, for the undersigned and in the
undersigned's name, place and stead, to sign and affix the undersigned's
name as such director and/or officer of such Company to a Registration
Statement or Registration Statements, on Form N-4 or other applicable form,
and all amendments, including post-effective amendments, thereto, to be
filed by such Company with the Securities and Exchange Commission,
Washington, D.C., in connection with the registration under the Securities
Act of 1933, as amended, and the Investment Company Act of 1940, as amended,
of shares of such Company, and to file the same, with all exhibits thereto
and other supporting documents, with such Commission, granting unto such
attorneys-in-fact, and each of them, full power and authority to do and
perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his
or her hand this 28th day of April, 1998.
/s/ROBERT P. GANDRUD
- --------------------------
Robert P. Gandrud President, Chief Executive Officer,
Chairman (Principal Executive Officer)
and Director
/s/BRUCE J. NICHOLSON
- --------------------------
Bruce J. Nicholson Chief Operating Officer (Principal
Financial Officer) and Director
/s/DAVID K. STEWART
- --------------------------
David K. Stewart Treasurer (Principal Accounting Officer)
/s/ROLF F. BJELLAND
- --------------------------
Rolf F. Bjelland Director
/s/DAVID W. ANGSTADT
- --------------------------
David W. Angstadt Director
/s/DAVID J. LARSON
- --------------------------
David J. Larson Director
/s/JENNIFER H. MARTIN
- --------------------------
Jennifer H. Martin Director
/s/JERALD E. SOURDIFF
- --------------------------
Jerald E. Sourdiff Director
#20542
<PAGE>
EXHIBIT 16
JONES & BLOUCH L.L.P.
SUITE 405 WEST
1025 THOMAS JEFFERSON STREET, N.W.
WASHINGTON, D.C. 20007-0805
JORDEN BURT BERENSON & JOHNSON LLP TELEPHONE (202) 223-3500
AFFILIATED COUNSEL TELECOPIER (202) 223-4593
April 27, 1998
Lutheran Brotherhood Variable Insurance
Products Company
625 Fourth Avenue South
Minneapolis, Minnesota 55415
Re: LBVIP Variable Annuity Account I
Gentlemen:
We hereby consent to the reference to this firm under the caption "Legal
Matters" in the prospectus contained in Post-Effective Amendment No. 20 to
the registration statement, on Form N-4, File No. 33-15974, to be filed with
the Securities and Exchange Commission.
Very truly yours,
/s/ Jones & Blouch L.L.P.
Jones & Blouch L.L.P.
#20604
<PAGE>
EXHIBIT 16
625 Fourth Avenue South
Minneapolis, Minnesota 55415
[logo] LUTHERAN BROTHERHOOD
VARIABLE INSURANCE
PRODUCTS COMPANY
April 28, 1998
Lutheran Brotherhood Variable
Insurance Products Company
625 Fourth Avenue South
Minneapolis, MN 55415
Ladies and Gentlemen:
I consent to the use of my name under the heading "Legal Matters" in the
Prospectuses constituting part of the Registration Statement, on Form N-4
(File No. 33-15974), of LBVIP Variable Annuity Account I.
Very truly yours,
/s/ James M. Odland
James M. Odland
Assistant Secretary
(612) 340-5727
#20603
<PAGE>
EXHIBIT 1
-----
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
CERTIFICATE OF RESOLUTION
-------------------------
I, James M. Odland, being the duly elected Assistant Secretary of
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS COMPANY, An insurance
company organized and existing under and by virtue of the laws of the State
of Minnesota (hereinafter called "the Company") having its principal office
at 625 Fourth Avenue South, Minneapolis, do hereby certify that the
following is a true and complete copy of resolutions duly adopted at a
meeting of the Board of Directors of the Company duly called and held on May
1, 1987, at which a quorum was present and voting; that said resolutions are
still in full force and effect and have not been rescinded; and that said
resolutions are not in conflict with the Articles of Incorporation or the
Bylaws of the Company:
IN WITNESS WHEREOF, I have hereunto set my hand and the Seal of the
Company this 24th day of April, 1998.
Corporate Seal Attached
/s/ James M. Odland /initials/
----------------------------------
Assistant Secretary
Signed and subscribed to before me
this 24th day of April, 1998.
/s/ Kaye L. Penfield
- --------------------------------
Notary Public
/Notary Seal/
KAYE L. PENFIELD
NOTARY PUBLIC - MINNESOTA
HENNEPIN COUNTY
My Commission Expires Jan. 31, 2000
<PAGE>
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
RESOLUTION
----------
WHEREAS, this Company desires to develop, sell and administer
flexible premium deferred variable annuity contracts, and
WHEREAS, the Company desires to establish such separate accounts as
may be necessary and appropriate for the Company's planned flexible premium
deferred variable annuity contracts and to authorize management of the
Company to proceed with the development of this product and obtain the
necessary state and federal approvals for the issuance of such product.
NOW THEREFORE BE IT RESOLVED, that pursuant to Minnesota Statutes,
Sections 61A.13 to 61A.22, the Company hereby establishes a separate account
under the name "LBVIP Variable Annuity Account I" (the "Account"), for
assets to be held and applied exclusively for the benefit of the holders of
flexible premium deferred variable annuity contracts issued by the Company
and designated by the Company as contracts under which the dollar amount of
annuity payments, death benefits may and the accumulated value thereof shall
vary so as to reflect the investment results of the Account, and the assets
held in the Account shall not be chargeable with liabilities arising out of
any other business the Company may conduct but shall be held and applied
exclusively for the benefit of the holders of such contracts.
RESOLVED, that the Account be registered as a unit investment trust
under the Investment Company Act of 1940, as amended (the "1940 Act"), and
that application be made for exemptions from such provisions of the 1940 Act
as the Chief Executive Officer, President, any Executive Vice President, any
Senior Vice President, Secretary or the Treasurer of the Company may deem
necessary or advisable.
RESOLVED, that the Chief Executive Officer, President, any Vice
President, the Secretary or the Treasurer of the Company is hereby
authorized, for and on behalf of the Company and with respect to the
Account, to execute and file with the Securities and Exchange Commission a
notification of registration and a registration statement on Form N-4 or
other applicable form, for the registration of the Account under the 1940
Act and to execute and file notification of claim of exemptions, or
application for exemptions, from provisions of the 1940 Act, all in such
form as such officer may approve, with such amendments, exhibits and other
supporting documents thereto, and to execute and deliver all such other and
further instruments, and to take such other and further action in connection
therewith, as such officer may deem necessary or advisable.
RESOLVED, that the Chief Executive Officer, President, any Vice
President, the Secretary or the Treasurer of the Company is hereby
authorized, for and on behalf of the Company, to execute and file with the
Securities and Exchange Commission a registration statement on Form N-4, or
other applicable form, for the registration under the Securities Act of
1933, as amended (the "1933 Act"), of flexible premium deferred variable
annuity contracts to be issued by the Company in connection with the Account
and other interests in the Account, in such form as such officer may
approve, with such amendments, exhibits and other supporting documents
thereto, and to execute and deliver all such other and further instruments,
and to take such other and further action in connection therewith, as such
officer may deem necessary or advisable.
RESOLVED, that David J. Larson is hereby designated as the person
authorized to receive notices and communications from the Securities and
Exchange Commission with respect to such registration statements to be filed
under the 1933 Act, with the powers conferred upon him as such person by the
1933 Act and the rules and regulations of such Commission issued thereunder.
RESOLVED, that the Chief Executive Officer, President, any Vice
President, the Secretary or the Treasurer of the Company, and such other
officers and employees of the Company as the President of the Company may
designate, and each of them, are hereby authorized, for and on behalf of the
Company, to execute such other and further instruments (including, without
limitation, a distribution agreement with respect to sale of the contracts),
and to take such other and further action, as they, or any of them, may deem
necessary or advisable to carry out the purposes of the foregoing
resolutions.
#20753
<PAGE>
EXHIBIT 3(a)
DISTRIBUTION AGREEMENT
----------------------
AGREEMENT made this 1st day of November, 1987 by and between Lutheran
Brotherhood Variable Insurance Products Company, a Minnesota corporation
("LBVIP"), on its own behalf and on behalf of the LBVIP Variable Annuity
Account I (the "Variable Account"), and Lutheran Brotherhood Securities
Corp., a Pennsylvania corporation ("LBSC").
WITNESSETH:
-----------
WHEREAS, LBVIP has established and maintains the Variable Account, a
separate investment account, pursuant to the laws of Minnesota for the
purpose of selling flexible premium variable annuity contracts
("Contracts"), to commence after the effectiveness of the Registration
Statement relating thereto filed with the Securities and Exchange Commission
on Form N-4 pursuant to the Securities Act of 1933, as amended (the "1933
Act") and the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Variable Account will be registered as a unit investment
trust under the 1940 Act; and
WHEREAS, LBSC is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") and is a member of the
National Association of Securities Dealers, Inc. ("NASD"); and
WHEREAS, LBVIP and LBSC wish to enter into an agreement to have LBSC
act as the Company's principal underwriter for the sale of the Contracts
through the Variable Account;
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR
LBVIP agrees that during the term of this Agreement it will take
all action which is required to cause the Contracts to comply as
an insurance product and a registered security with all applicable
federal and state laws and regulations. LBVIP appoints LBSC and
LBSC agrees to act as the principal underwriter for the sale of
Contracts to the public, during the term of this Agreement, in
each state and other jurisdiction in which such Contracts may
lawfully be sold. LBSC shall offer the Contracts for sale and
distribution at premium rates set by LBVIP. Applications for the
Contracts shall be solicited only by representatives duly and
appropriately licensed or otherwise qualified for the sale of such
Contracts in each state or other jurisdiction. LBVIP shall
undertake to appoint LBSC's qualified registered representatives
as life insurance agents of LBVIP. Completed applications for
Contracts shall be transmitted directly to LBVIP for acceptance or
rejection in accordance with underwriting rules established by
LBVIP. Initial premium payments under the Contracts shall be made
by check payable to LBVIP and shall be held at all times by LBSC
or its registered representatives in a fiduciary capacity and
remitted promptly to LBVIP. Anything in this Agreement to the
contrary notwithstanding, LBVIP retains the ultimate right to
control the sale of the Contracts and to appoint and discharge
life insurance agents of LBVIP. LBSC shall be held to the
exercise of reasonable care in carrying out the provisions of this
Agreement.
2. SALES AGREEMENTS
LBSC is hereby authorized to enter into separate written
agreements, on such terms and conditions as LBSC may determine not
inconsistent with this Agreement, with one or more registered
representatives who agree to participate in the distribution of
Contracts. Such registered representatives shall be registered as
securities agents with the NASD. LBSC and its registered
representatives soliciting applications for Contracts shall also
be duly and appropriately licensed, registered or otherwise
qualified for the sale of such Contracts (and the riders and other
policies offered in connection therewith) under the insurance laws
and any applicable blue sky laws of each state or other
jurisdiction in which LBVIP is authorized to offer the Contracts.
LBSC shall have the responsibility for ensuring that its
registered representatives are properly supervised. LBSC shall
assume any legal responsibilities of LBVIP for the acts,
commissions or defalcations of such registered representatives
insofar as they relate to the sale of the Contracts. Applications
for Contracts solicited by LBSC through its registered
representatives shall be transmitted directly to LBVIP. All
premium payments under the Contracts shall be made by check to
LBVIP and, if received by LBSC, shall be held at all times in a
fiduciary capacity and remitted promptly to LBVIP.
3. LIFE INSURANCE LICENSING
LBVIP shall be responsible for ensuring that the registered
representatives are duly qualified under the insurance laws of the
applicable jurisdictions to sell the Contracts.
4. SUITABILITY
LBVIP wishes to ensure that Contracts sold by LBSC will be issued
to purchasers for whom the Contract will be suitable. LBSC shall
take reasonable steps to ensure that the various registered
representatives appointed by it shall not make recommendations to
an applicant to purchase a Contract in the absence of reasonable
grounds to believe that the purchase of the Contract is suitable
for such applicant. While not limited to the following, a
determination of suitability shall be based on information
furnished to a registered representative after reasonable inquiry
of such applicant concerning the applicant's insurance and
investment objectives, financial situation and needs, and the
likelihood that the applicant will continue to make the premium
payments contemplated by the Contracts.
5. PROMOTION MATERIALS
LBVIP shall have the responsibility for furnishing to LBSC and its
registered representatives sales promotion materials and
individual sales proposals related to the sale of the Contracts.
LBSC shall not use any such materials that have not been approved
by LBVIP.
6. COMPENSATION
LBVIP shall arrange for the payment of commissions directly to
those registered representatives of LBSC who are entitled thereto
in connection with the sale of the Contracts on behalf of LBSC, in
the amounts and on such terms and conditions as LBVIP and LBSC
have determined in the VARIABLE PRODUCTS SCHEDULE OF
COMMISSION RATES attached hereto as Exhibit A and Exhibit B and
incorporated by reference herein; provided, however, that such
terms, conditions and commissions as are set forth in or as are
not inconsistent with the Prospectus included as part of the
Registration Statement for the Contracts and effective under the
1933 Act. LBVIP may, at its option, adjust VARIABLE PRODUCTS
SCHEDULE OF COMMISSION RATES for contracts and
riders hereafter sold, by giving written notice to LBSC thirty
days in advance of such change.
LBVIP shall reimburse LBSC for the costs and expenses incurred by
LBSC in furnishing or obtaining the services, materials and
supplies required by the terms of this Agreement, in the initial
sales efforts and the continuing obligations hereunder.
7. RECORDS
LBSC shall have the responsibility for maintaining the records of
representatives licensed, registered and otherwise qualified to
sell the Contracts. LBSC shall maintain such other records as are
required of it by applicable laws and regulations. The books,
accounts and records of LBVIP, the Variable Account and LBSC shall
be maintained so as to clearly and accurately disclose the nature
and details of the transactions. All records maintained by LBSC
or in connection with this Agreement shall be the property of
LBVIP and shall be returned to LBVIP upon termination of this
Agreement, free from any claims or retention of rights by LBSC.
LBSC shall keep confidential any information obtained pursuant to
this Agreement and shall disclose such information, only if LBVIP
has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
8. INVESTIGATIONS AND PROCEEDINGS
(a) LBSC and LBVIP agree to cooperate fully in any insurance
regulatory investigation, proceeding or judicial proceeding
arising in connection with the Contracts distributed under
this Agreement. LBSC and LBVIP further agree to cooperate
fully in any securities regulatory investigation, proceeding
or judicial proceeding with respect to LBVIP, LBSC, their
affiliates and their agents or representatives to the extent
that such investigation or proceeding is in connection with
Contracts distributed under this Agreement. LBSC shall
furnish applicable federal and state regulatory authorities
with any information or reports in connection with its
services under this Agreement which such authorities may
request in order to ascertain whether the LBVIP's operations
are being conducted in a manner consistent with any
applicable law or regulation.
(b) In the case of a written customer complaint, LBSC and LBVIP
will cooperate in investigating such complaint and any
response to such complaint will be sent to the other party to
this Agreement for approval not less than five business days
prior to its being sent to the customer or regulatory
authority, except that if a more prompt response is required,
the proposed response shall be communicated by telephone or
telegraph.
9. TERMINATION
This Agreement shall terminate automatically upon its assignment
by either party without the prior written consent of both parties.
This Agreement may be terminated at any time by either party on
60 days' written notice to the other party, without the payment of
any penalty. Upon termination of this Agreement all
authorizations, rights and obligations shall cease except the
obligation to settle accounts hereunder, including commissions on
premiums subsequently received for Contracts in effect at time of
termination, and the agreements contained in paragraph 8 hereof.
10. REGULATION
This Agreement shall be subject to the provisions of the 1933 Act,
the 1940 Act and the Securities Exchange Act and the rules,
regulations and rulings promulgated thereunder and of the
applicable rules and regulations of the NASD, from time to time in
effect, and the terms hereof shall be interpreted and construed in
accordance therewith.
11. SEVERABILITY
If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
12. APPLICABLE LAW
This Agreement shall be construed and enforced in accordance with
and governed by the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LUTHERAN BROTHERHOOD VARIABLE INSURANCE
PRODUCTS COMPANY
By
-------------------------------------
LUTHERAN BROTHERHOOD SECURITIES CORP.
By
-------------------------------------
SCHEDULE OF COMMISSION RATES
EXHIBIT I
EXHIBIT IA
LUTHERAN BROTHERHOOD
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS
Minneapolis, Minnesota
Please file in Compensation Section 7, of the DR Planner
<PAGE>
THIS PAGE IS INTENTIONALLY BLANK
<PAGE>
SCHEDULE OF COMMISSION RATES
TABLE OF CONTENTS
Cover Page and Table of Contents
EXHIBIT I:
I Payment Provisions
II. Life Insurance Contracts (Excluding Flexible Premium Adjustable Life)
A. Permanent
Life; Presidential Plus, Life Paid-Up at 96;
Partners Presidential Plus, Survivor Presidential Plus
B. Renewable and Convertible Term
C. Other Term
Juvenile Protection
III. Life Insurance Riders (Excluding Riders on Flexible Premium
Adjustable Life)
A. Issued with Basic Contract
Renewable and Convertible Term
Other Term: Child Term Life Ins. Benefit
Additional Premium Option (PUA Rider)
B. Issued after Basic Contract
Renewable and Convertible Term
Other Term: Child Term Life Ins. Benefit
Additional Premium Option (PUA Rider)
IV. Flexible Premium Adjustable Life (UL) - Series I
A. 1st Year Commission
B. Service Commission
C. Special Renewal Commission
D. Increase Commission per $1,000
E. Cost of Living Increase Commission per $1,000
F. Riders Added After Issue Commission per $1,000
V. Flexible Premium Adjustable Life (UL) - Series II
A. 1st Year Commission
B. Service Commission
C. Renewal Commission per $1,000
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
3. Spouse Insurance Benefit
D. Increase Commission per $1,000
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
E. Cost of Living Increase Commission per $1,000
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
F. Riders Increased/Added After Issue Commission per $1,000
VI. Flexible Premium Adjustable Life Series (UL) - III, IV and
Juvenile-Issue
A. 1st Year Commission
B. Additional Commission (Based on Premium)
C. Renewal Commission per $1,000 of face amount
1. Face Amount Less Than $250,000 and Juvenile-Issue
2. Face Amount More Than $249,999 and Less Than $500,000
3. Face Amount More Than $499,000
4. Spouse Insurance Benefit
D. Increase Commission per $1,000
1. Face Amount Less Than $250,000 and Juvenile-Issue
2. Face Amount More Than $249,999 and Less Than $500,000
3. Face Amount More Than $499,000
E. Cost of Living Increase Commission per $1,000
1. Face Amount Less Than $250,000 and Juvenile-Issue
2. Face Amount More Than $249,999 and Less Than $500,000
3. Face Amount More Than $499,999
F. Riders Increased/Issued After Basic Contract
VII. Flexible Premium Variable Life (VUL)
A. 1st Year Commission
B. Additional Commission (Based on Premium)
C. Renewal Commission per $1,000 of face amount
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
3. Spouse Insurance Benefit
D. Increase Commission per $1,000
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
E. Cost of Living Increase Commission per $1,000
1. Face Amount Less Than $250,000
2. Face Amount More Than $249,999
F. Riders Increased/Issued After Basic Contract
VIII. Annuity Contracts
A. Single Premium
B. Flexible Premium Deferred Annuity '89
Variable Annuity
C. Flexible Premium Deferred Annuity - TSA Qualified
D. FPDA other than FPDA '89 - Nonqualified
IX. Health Insurance
A. Contracts
B. Riders
X. Supplemental Benefits
XI. Settlement Options
EXHIBIT IA: Target Premiums
I. Flexible Premium Adjustable Life - Series II
A. Face Amount Less Than $250,000
B. Face Amount More Than $249,999
II. Flexible Premium Adjustable Life - Series III, IV and Juvenile-Issue
A. Face Amount Less Than $250,000 and Juvenile-Issue
B. Face Amount More Than $249,000 and Less Than $500,000
C. Face Amount More Than $499,999
III. Riders and Supplemental Benefits
IV. Special Class
V. Flexible Premium Variable Life Insurance Riders
Amendments
<PAGE>
[BLANK PAGE]
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
I. PAYMENT PROVISIONS
A. First Year Commissions, Renewal Commissions, Increase Commissions,
Rider Commissions and for Flexible Premium Variable Life contracts
written on or after June 1, 1990, Rollover Commissions are payable
to the Representative* who sold the coverage.
B. Service Commissions, Special Service Commissions, Rollover
Commissions for all products except Flexible Premium Variable Life
(VUL) written after June 1, 1990, and Cost of Living Increase
Commissions are payable to the Representative* who is assigned to
service the contract at the time the commission is payable.
C. FREQUENCY OF COMMISSION PAYMENTS
Commissions will be paid at the same frequency as the related
premiums are paid except
1) First Year Commissions that are expressed as a percent of
premiums and all Increase Commissions on contracts for which
premiums are paid by Pre-Authorized Collection will be
annualized and payable when the contract is issued or increased;
except that the additional 3% of all premium paid on Flexible
Premium Adjustable Life and Flexible Premium Variable Life and
the First Year Commissions on Flexible Premium Annuity and
Variable Annuity contracts paid by Pre-Authorized Collection
will not be annualized.
2) Renewal Commissions which are expressed as an amount per $1,000
will be paid monthly.
D. Recovery of Commissions Previously Paid
1) If the Society returns all or any portion of a premium payment,
any commissions paid to the Representative* on this premium
shall be repaid to the Society and the Society shall have the
right to recover such commission from any compensation
thereafter due and payable to the Representative*.
2) On Flexible Premium Adjustable Life and Flexible Premium
Variable Life Insurance contracts which terminate during the
first contract year, First Year Commission will not exceed the
sum of a) 3% of all premium paid plus b) the pro rata portion
of the First Year Commission based on premium up to target that
would be paid if the contract remained in force for the year.
On Flexible Premium Adjustable Life Insurance Series II, III, IV
and Juvenile-Issue and Flexible Premium Variable Life contracts
which terminate during the first contract year, First Year
Commissions based on premiums up to target will be the product
of the First Year Commission rate and the lesser of
(1) premiums paid and credited on the contract, and
(2) one-twelfth of the Target Premium times the number of full
months the contract remained in force.
First year Commissions paid will be reduced by the amounts, if
any, in excess of those determined above.
E. Contract Changes and Conversions
The Society will determine the amount of compensation and which
Representative* will be paid the compensation on contract changes
(except for the addition of term insurance and health insurance
riders) and conversions, the continuation of Juvenile Term
Insurance contracts and the rollover of Modified Premium Whole Life
contracts. If a contract replaces in whole or in part a contract
previously issued by Lutheran Brotherhood or any subsidiary or
affiliate, the Society shall have the right to determine what, if
any, compensation shall be allowed.
F. All variable products will be subject to the vesting provisions of
Section II.C. of the District Representative Agreement.
- ---------------------------------------
* All references to a Representative include a District Representative
and/or a Registered Representative. An appropriate Registered
Representative license is required before the sale of any variable
product.
II. LIFE INSURANCE CONTRACTS (Excluding Flexible Premium Adjustable Life)
Commissions are a percentage of the premium due and payable on the
basic contract during each contract year (excluding any extra premium
paid for aviation or temporary extra premium).
A. Permanent Life
<TABLE>
<CAPTION>
WHOLE LIFE
(Presidential Plus)
LIFE PAID UP AT 96 Survivor
$50,000 AND OVER Presidential Plus
LIFE* PARTNER PRES.PLUS (SPLUS)
================ ===================== =====================
Number of
Annual 1st Year 1st Renewal 1st Year 1st Renewal 1st Year 1st Renewal
Premiums Commission Commission Commission Commission Commission Commission
- ---------- --------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
45 and over 65 % 17 % 55 % 17 % 50 % 13 %
42-44 65 16.5 55 16.5 50 13
35-41 65 16 55 16 50 13
32-34 65 15.5 55 15.5 47.5 13
30-31 62.5 15.5 53 15.5 45 12.5
27-29 62.5 15 53 15 42.5 12.5
25-26 60 14.5 51 14.5 40 12
23-24 57.5 14.5 49 14.5 40 12
22 55 14.5 47 14.5 40 12
21 52.5 14.5 46 14.5 40 12
20 52.5 14.5 45 14.5 40 12
18-19 50 14 44 14 40 12
17 50 14 43 14 40 12
15-16 47.5 14 41 14 40 12
14 44.5 13.5 39 13.5 40 12
13 42.5 13.5 37 13.5 N/A N/A
12 39 13.5 35 13.5 N/A N/A
11 37 13.5 33 13.5 N/A N/A
10 35 13.5 31 13.5 N/A N/A
9 33 13.0 29 13.0 N/A N/A
8 31 13.0 27 13.0 N/A N/A
7 29 13.0 25 13.0 N/A N/A
6 27 13.0 23 13.0 N/A N/A
5 25 13.0 21 13.0 N/A N/A
*Except as otherwise provided in this schedule.
</TABLE>
2ND AND 3RD RENEWAL COMM.: One-half of the 1st Renewal
Commission rate.
4TH RENEWAL COMM.: 5%
5TH, 6TH AND 7TH RENEWAL COMM.: 2%
On any plan other than Survivor Presidential Plus with premium
payable beyond age 85, the number of annual premiums to be paid is
determined as though premiums were payable to age 85.
On a Survivor Presidential Plus plan the number of annual premiums
to be paid is the number of annual premiums payable from the joint
issue age to age 100.
1st Year Renewal
Commission Commissions
---------- -----------
Single Premium Life 3% None
B. Renewable and Convertible Term Insurance Contracts
<TABLE>
<CAPTION>
Commission Rates
Commission Rates for Initial Face Commission Rates
for Initial Face Amount More for Initial Face
Amount Less Than Than $499,999 and Amount More
$500,000 Less Than $1,000,000 Than $999,999
================= ===================== ====================
First First First 1st - 7th First 1st - 7th
Issue Year Renewal Year Renewal Year Renewal
Age Commission Commission Commission Commissions Commission Commissions
- ---------- --------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
16-40 45 % 14 % 30 % 10 % 25 % 10 %
41-43 45 13.5 30 10 25 10
44-53 45 13 30 10 25 10
54 43 13 30 10 25 10
55 43 13 28 10 23.5 10
56-58 43 12.5 28 10 23.5 10
59 41.5 12 28 10 23.5 10
60 41.5 12 26 10 21.5 10
61-62 40 12 26 10 21.5 10
63 38.5 12 26 10 21.5 10
64 37 12 26 10 21.5 10
65 37 12 24 10 20 10
66-68 35.5 12 24 10 20 10
69-70 34 12 24 10 20 10
</TABLE>
Renewal Commission Rates for Initial Face Amount Less
Than $500,000:
2ND AND 3RD RENEWAL COMM.: One-half of the 1st Renewal
Commission rate.
4TH RENEWAL COMMISSION: 5%
5TH, 6TH AND 7TH RENEWAL COMMISSIONS: 2%
C. Other Term Insurance Contracts
First Year First Renewal
Commission Commission
---------- ----------
Juvenile Protector 45% 14%
At Attained Age 5 At Attained Age 6
----------------- -----------------
JumpStart 45% 14%
2ND AND 3RD RENEWAL COMM.: One-half of the 1st Renewal
Commission rate.
4TH RENEWAL COMMISSION: 5%
5TH, 6TH AND 7TH RENEWAL COMMISSIONS: 2%
III. LIFE INSURANCE RIDERS (Excluding Riders On
Flexible Premium Adjustable Life)
Commissions are a percentage of the premium due and payable on the
rider during the rider year (excluding any extra premium paid for
aviation or temporary extra premium).
A. Riders issued with the basic contract.
RENEWABLE AND CONVERTIBLE TERM INSURANCE RIDER: BASIC AND SPOUSE
<TABLE>
Commission Rates
Commission Rates for Initial Face Commission Rates
for Initial Face Amount More for Initial Face
Amount Less Than Than $499,999 and Amount More
$500,000 Less Than $1,000,000 Than $999,999
================ ====================== ==================
First First First 1st - 7th First 1st - 7th
Issue Year Renewal Year Renewal Year Renewal
Age Commission Commission Commission Commissions Commission Commissions
- ---------- --------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
16-40 45 % 14 % 30 % 10 % 25 % 10 %
41-43 45 13.5 30 10 25 10
44-53 45 13 30 10 25 10
54 43 13 30 10 25 10
55 43 13 28 10 23.5 10
56-58 43 12.5 28 10 23.5 10
59 41.5 12 28 10 23.5 10
60 41.5 12 26 10 21.5 10
61-62 40 12 26 10 21.5 10
63 38.5 12 26 10 21.5 10
64 37 12 26 10 21.5 10
65 37 12 24 10 20 10
66-68 35.5 12 24 10 20 10
69-70 34 12 24 10 20 10
</TABLE>
Issue
Age of First Year First Renewal
Rider Commission Commission
----- ---------- ----------
CHILD TERM LIFE INSURANCE BENEFIT: All Ages 45% 14%
Renewal Commission rates for Renewable and Convertible Term
Insurance Riders with Initial Face Amount Less Than $500,000 and
Child Term Life Insurance Benefit issued with the basic contract:
2ND AND 3RD RENEWAL COMM.: One-half of the 1st Renewal
Commission rate.
4TH RENEWAL COMMISSION: 5%
5TH, 6TH AND 7TH RENEWAL COMMISSIONS: 2%
ADDITIONAL PREMIUM OPTION (PUA RIDER)
The commission is a service commission equal to 3% of all premium
paid and credited by the Society whenever paid and credited.
B. Riders added after issue of the basic contract.
RENEWABLE AND CONVERTIBLE TERM INSURANCE RIDER: BASIC AND SPOUSE
<TABLE>
Commission Rates
Commission Rates for Initial Face Commission Rates
for Initial Face Amount More for Initial Face
Amount Less Than Than $499,999 and Amount More
$500,000 Less Than $1,000,000 Than $999,999
================ ====================== ==================
First First First 1st - 7th First 1st - 7th
Issue Year Renewal Year Renewal Year Renewal
Age Commission Commission Commission Commissions Commission Commissions
- ---------- --------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
16-53 41.5 % 8 % 27.5 % 9 % 22.5 % 9 %
54 40 8 27.5 9 22.5 9
55-58 40 8 25.5 9 21 9
59 38 8 25.5 9 21 9
60 38 8 23.5 9 19 9
61-62 36.5 8 23.5 9 19 9
63 34.5 8 23.5 9 19 9
64 33 8 23.5 9 19 9
65 33 8 21.5 9 17.5 9
66-68 31.5 8 21.5 9 17.5 9
69-70 30 8 21.5 9 17.5 9
</TABLE>
Issue
Age of First Year First Renewal
Rider Commission Commission
----- ---------- ----------
CHILD TERM LIFE
INSURANCE BENEFIT: All Ages 45% 14%
Renewal Commission rates for Renewable and Convertible Term
Insurance Riders with Initial Face Amount less than $500,000, Child
Term Life Insurance Benefit added after the basic contract:
2ND AND 3RD RENEWAL COMM.: One-half of the 1st Renewal
Commission rate.
4TH RENEWAL COMMISSION: 4% except Child Rider. Child Rider = 5%
5TH, 6TH AND 7TH RENEWAL COMMISSIONS: 2%
ADDITIONAL PREMIUM OPTION (PUA RIDER):
The commission is a service commission equal to 3% of the premium
paid to and credited by the Society whenever paid and credited.
IV. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES I
A. First Year Commission
Issue Age Commission Rate
--------- ---------------
0-63 50 %
64-68 47.5
69-70 45
71-72 42.5
73 40
74-75 37.5
First Year Commission is a percentage of all premium paid and
credited in the first contract year up to but not exceeding the
amount required to pay the annual cost of insurance, the cost of
any supplemental benefits and riders issued with the basic contract
and first year loads. Premium paid and credited includes amounts
paid for supplemental benefits and riders issued with the basic
contract.
B. Service Commission
5% of all premium paid and credited whenever paid and credited.
C. Special Renewal Commission
This Commission is payable only upon termination of this Agreement
on or after the Qualified Early Retirement Date or upon termination
of this Agreement due to death as specified in the District
Representative Agreement.
Issue Age Commission Per $1,000*
--------- ----------------------
0-25 $.12
26-50 .24
51-75 .36
* One-twelfth of the Special Renewal Commission is paid monthly on
the portion of the initial face amount remaining in force each
month during the first four renewal years.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IV. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES ICONTINUED
D. Increase Commission per $1,000* of increase in face amount
<TABLE>
Attained Male Female Attained Male Female
Age Std. Nsmkr. Std. Nsmkr. Age Std. Nsmkr. Std. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.68 1.56 38 2.88 2.52 2.28 2.04
1 1.44 1.32 39 3.12 2.76 2.52 2.16
2 1.20 1.20 40 3.36 2.88 2.64 2.28
3 1.08 1.08 41 3.60 3.00 2.88 2.40
4 .96 .96 42 3.96 3.24 3.12 2.64
5 .84 .84 43 4.32 3.48 3.36 2.76
6 .72 .72 44 4.80 3.72 3.60 3.00
7 .72 .72 45 5.16 3.96 3.84 3.24
8 .72 .72 46 5.64 4.32 4.20 3.48
9 .72 .72 47 6.12 4.68 4.44 3.84
10 .72 .72 48 6.60 5.16 4.80 4.08
11 .84 .72 49 7.08 5.64 5.16 4.44
12 .96 .84 50 7.56 6.00 5.52 4.68
13 1.08 .84 51 8.04 6.36 5.88 4.92
14 1.20 .84 52 8.40 6.72 6.12 5.16
15 1.32 .96 53 8.88 7.08 6.48 5.40
16 1.44 1.08 54 9.36 7.56 6.72 5.76
17 1.44 1.08 55 9.84 7.92 7.08 6.00
18 1.44 1.20 56 10.32 8.40 7.44 6.36
19 1.56 1.32 57 10.92 8.76 7.80 6.60
20 1.56 1.44 1.32 1.08 58 11.52 9.24 8.28 6.96
21 1.56 1.44 1.32 1.20 59 12.12 9.84 8.64 7.32
22 1.56 1.44 1.32 1.20 60 12.72 10.32 9.12 7.80
23 1.68 1.56 1.32 1.32 61 13.32 10.92 9.72 8.40
24 1.68 1.56 1.32 1.32 62 13.92 11.40 10.32 9.00
25 1.68 1.56 1.32 1.32 63 14.52 12.12 11.04 9.72
26 1.68 1.56 1.32 1.32 64 15.12 12.72 11.76 10.44
27 1.80 1.68 1.44 1.32 65 15.84 13.44 12.48 11.16
28 1.92 1.80 1.56 1.44 66 16.68 14.40 13.20 12.00
29 1.92 1.80 1.56 1.44 67 17.52 15.36 14.04 12.72
30 2.04 1.80 1.56 1.44 68 18.48 16.32 14.76 13.56
31 2.16 1.92 1.68 1.56 69 19.20 17.28 15.36 14.28
32 2.16 1.92 1.68 1.56 70 19.68 17.88 15.84 14.76
33 2.16 1.92 1.68 1.56 71 19.44 17.76 15.60 14.64
34 2.28 2.04 1.80 1.68 72 19.32 17.64 15.48 14.64
35 2.40 2.16 1.92 1.80 73 19.08 17.64 15.36 14.64
36 2.52 2.28 2.04 1.90 74 18.84 17.64 15.24 14.64
37 2.76 2.40 2.16 1.92 75 18.72 17.52 15.12 14.52
Age used is attained age of the insured on the effective date of the
increase in face amount of contract or attained age of spouse on the
effective date of the increase in the Spouse Insurance Benefit rider. Std.
includes contracts and riders with increased face amounts having premium
class "Standard" or "Special"; Nsmkr. includes contracts and riders with
increased face amounts having premium class "Nonsmoker" or Nonsmoker
Special".
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IV. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES I
E. Cost of Living Increase Commission per $1,000* of increase in face amount
<TABLE>
Attained Male Female Attained Male Female
Age Std. Nsmkr. Std. Nsmkr. Age Std. Nsmkr. Std. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 .48 .36 36 .84 .72 .60 .60
2 .36 .36 37 .96 .84 .72 .60
3 .36 .36 38 .96 .84 .72 .60
4 .24 .24 39 1.08 .96 .84 .72
5 .24 .24 40 1.08 .96 .84 .72
6 .24 .24 41 1.20 .96 .96 .72
7 .24 .24 42 1.32 1.08 .96 .84
8 .24 .24 43 1.44 1.20 1.08 .96
9 .24 .24 44 1.56 1.20 1.20 .96
10 .24 .24 45 1.68 1.32 1.32 1.08
11 .24 .24 46 1.80 1.44 1.44 1.20
12 .36 .24 47 1.92 1.56 1.56 1.32
13 .36 .36 48 2.04 1.68 1.56 1.32
14 .48 .36 49 2.28 1.92 1.68 1.44
15 .48 .36 50 2.52 2.04 1.80 1.56
16 .48 .36 51 2.76 2.16 1.92 1.68
17 .48 .36 52 2.88 2.28 2.04 1.80
18 .48 .48 53 3.00 2.40 2.16 1.80
19 .48 .48 54 3.12 2.52 2.28 1.92
20 .48 .48 .48 .36 55 3.24 2.64 2.40 2.04
21 .48 .48 .48 .36 56 3.48 2.76 2.52 2.16
22 .48 .48 .48 .36 57 3.60 3.00 2.64 2.28
23 .60 .48 .48 .48 58 3.84 3.24 2.76 2.40
24 .60 .48 .48 .48 59 4.08 3.36 2.88 2.52
25 .60 .48 .48 .48 60 4.20 3.48 3.00 2.64
26 .60 .48 .48 .48 61 4.32 3.60 3.12 2.76
27 .72 .60 .48 .48 62 4.32 3.60 3.24 2.76
28 .72 .60 .48 .48 63 4.32 3.60 3.24 2.88
29 .72 .60 .48 .48 64 4.32 3.60 3.36 3.00
30 .72 .60 .48 .48 65 4.32 3.60 3.36 3.00
31 .72 .60 .48 .48 66 4.32 3.72 3.36 3.12
32 .72 .60 .48 .48 67 4.44 3.72 3.48 3.12
33 .84 .72 .60 .60 68 4.44 3.72 3.48 3.12
34 .84 .72 .60 .60 69 4.20 3.60 3.36 3.00
35 .84 .72 .60 .60 70 3.96 3.60 3.12 3.00
* One-twelfth of Cost of Living Increase Commission on the portion of the
increase remaining in force each month after the effective date of the
increase is paid monthly for one year after the effective date of the
increase. Age used is attained age of the insured on the effective
date of the increase in face amount. Std. includes increased face
amounts with premium class "Standard" or "Special"; Nsmkr. includes
increased face amounts with premium class "Nonsmoker" or "Nonsmoker
Special".
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IV. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES I
F. Riders Issued After Basic Contract
Spouse Insurance Benefit Commission per $1,000* of face amount
<TABLE>
Issue Male Female Issue Male Female
Age Std. Nsmkr. Std. Nsmkr. Age Std. Nsmkr. Std. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
18 2.16 1.80 47 9.00 7.08 6.72 5.64
19 2.28 1.80 48 9.84 7.80 7.20 6.12
20 2.28 2.16 1.92 1.68 49 10.56 8.40 7.80 6.60
21 2.28 2.16 1.92 1.80 50 11.28 9.00 8.28 7.08
22 2.40 2.16 2.04 1.80 51 12.00 9.60 8.76 7.44
23 2.40 2.16 2.04 1.80 52 12.60 10.08 9.12 7.80
24 2.52 2.28 2.04 1.92 53 13.32 10.68 9.60 8.16
25 2.52 2.28 2.04 1.92 54 14.04 11.28 10.08 8.64
26 2.64 2.40 2.04 1.92 55 14.76 11.88 10.56 9.00
27 2.64 2.40 2.16 2.04 56 15.60 12.48 11.04 9.48
28 2.76 2.52 2.16 2.04 57 16.32 13.20 11.64 9.84
29 2.88 2.52 2.16 2.04 58 17.28 13.92 12.24 10.32
30 3.00 2.64 2.28 2.16 59 18.12 14.64 12.84 10.92
31 3.12 2.76 2.40 2.28 60 19.08 15.48 13.68 11.64
32 3.24 2.88 2.52 2.28 61 20.04 16.44 14.64 12.60
33 3.36 3.00 2.64 2.40 62 21.12 17.40 15.72 13.68
34 3.48 3.12 2.76 2.52 63 22.20 18.36 16.92 14.88
35 3.60 3.2 2.88 2.64 64 23.28 19.56 18.12 16.08
36 3.84 3.36 3.00 2.76 65 24.48 20.76 19.32 17.28
37 4.08 3.60 3.24 2.88 66 25.80 22.20 20.52 18.60
38 4.32 3.84 3.48 3.12 67 27.36 23.88 21.84 19.92
39 4.68 4.08 3.72 3.24 68 28.80 25.56 23.16 21.24
40 5.04 4.32 3.96 3.48 69 30.24 27.12 24.36 22.56
41 5.52 4.56 4.32 3.72 70 31.44 28.56 25.32 23.64
42 6.00 4.92 4.56 3.96 71 32.52 29.88 26.28 24.72
43 6.48 5.16 4.92 4.20 72 33.48 30.96 27.00 25.56
44 7.08 5.52 5.40 4.44 73 34.20 31.92 27.60 26.28
45 7.68 6.00 5.76 4.80 74 34.56 32.40 27.96 26.76
46 8.40 6.48 6.24 5.16 75 34.68 32.64 28.08 27.00
* One-twelfth of the commission on the portion of the face amount of the
rider remaining in force each month is paid monthly for one year after
the effective date of the rider. Age used is issue age of the spouse.
Std. includes riders issued with premium class "Standard" or
"Special"; Nsmkr. includes riders issued with premium class "Nonsmoker"
or "Nonsmoker Special".
Child Insurance Benefit Commission per $1,000 of face amount
Commission is $2.76 per $1,000. One-twelfth of the commission is paid
monthly.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
A. First Year Commission
First Year Commission is a percentage of all premiums paid and
credited in the first contract year up to but not exceeding the
Target Premium. (Target Premiums are illustrated in Exhibit IA).
Issue Age Commission Rate
--------- ---------------
0-53 52%
54-58 50
59-60 48
61-62 46
63 44
64 43
65 42
66-67 41
68 40
69-70 38
71 36
72 34
73 32
74 30
75 28
B. Service Commission
3% of all premium paid and credited whenever paid and credited.
<PAGE>
<TABLE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
C. Renewal Commission per $1,000* of face amount (initial or increase)
1. Basic Contract - Highest Total Face Amount** Less Than $250,000
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.12 0.12 38 0.36 0.36 0.36 0.24
1 0.12 0.12 39 0.36 0.36 0.36 0.24
2 0.12 0.12 40 0.48 0.36 0.36 0.24
3 0.12 0.12 41 0.48 0.36 0.36 0.36
4 0.12 0.12 42 0.48 0.36 0.36 0.36
5 0.12 0.12 43 0.60 0.48 0.48 0.36
6 0.12 0.12 44 0.60 0.48 0.48 0.36
7 0.12 0.12 45 0.60 0.48 0.48 0.36
8 0.12 0.12 46 0.72 0.48 0.48 0.36
9 0.12 0.12 47 0.72 0.48 0.60 0.48
10 0.12 0.12 48 0.84 0.60 0.6 0.48
11 0.12 0.12 49 0.84 0.60 0.60 0.48
12 0.12 0.12 50 0.84 0.60 0.60 0.48
13 0.12 0.12 51 0.96 0.72 0.72 0.60
14 0.12 0.12 52 0.96 0.72 0.72 0.60
15 0.12 0.12 53 1.08 0.84 0.84 0.60
16 0.12 0.12 54 1.20 0.84 0.84 0.72
17 0.12 0.12 55 1.20 0.96 0.84 0.72
18 0.12 0.12 56 1.32 0.96 0.96 0.72
19 0.12 0.12 57 1.44 1.08 0.96 0.84
20 0.12 0.12 0.12 0.12 58 1.44 1.08 1.08 0.84
21 0.24 0.12 0.12 0.12 59 1.56 1.20 1.08 0.96
22 0.24 0.12 0.12 0.12 60 1.68 1.32 1.20 0.96
23 0.24 0.12 0.12 0.12 61 1.80 1.32 1.32 1.08
24 0.24 0.24 0.12 0.12 62 1.80 1.44 1.44 1.20
25 0.24 0.24 0.12 0.12 63 1.92 1.56 1.44 1.32
26 0.24 0.24 0.12 0.12 64 2.04 1.68 1.56 1.32
27 0.24 0.24 0.12 0.12 65 2.16 1.80 1.68 1.44
28 0.24 0.24 0.24 0.12 66 2.28 1.92 1.80 1.56
29 0.24 0.24 0.24 0.12 67 2.40 2.04 1.80 1.68
30 0.24 0.24 0.24 0.12 68 2.52 2.16 1.92 1.80
31 0.24 0.24 0.24 0.24 69 2.64 2.28 2.04 1.80
32 0.24 0.24 0.24 0.24 70 2.76 2.40 2.16 1.92
33 0.24 0.24 0.24 0.24 71 2.88 2.64 2.28 2.04
34 0.24 0.24 0.24 0.24 72 3.12 2.76 2.40 2.16
35 0.36 0.24 0.24 0.24 73 3.24 3.00 2.52 2.28
36 0.36 0.24 0.24 0.24 74 3.48 3.12 2.64 2.40
37 0.36 0.24 0.24 0.24 75 3.60 3.24 2.76 2.64
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first four renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
C. Renewal Commission per $1,000* of face amount (initial or increase)
2. Basic Contract - Highest Total Face Amount** More Than $249,999
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.12 0.12 46 0.48 0.36 0.36 0.36
17 0.12 0.12 47 0.60 0.36 0.36 0.36
18 0.12 0.12 48 0.60 0.48 0.48 0.36
19 0.12 0.12 49 0.60 0.48 0.48 0.36
20 0.12 0.12 0.12 0.12 50 0.72 0.48 0.48 0.36
21 0.12 0.12 0.12 0.12 51 0.72 0.48 0.48 0.36
22 0.12 0.12 0.12 0.12 52 0.84 0.60 0.60 0.48
23 0.12 0.12 0.12 0.12 53 0.84 0.60 0.60 0.48
24 0.12 0.12 0.12 0.12 54 0.84 0.60 0.60 0.48
25 0.12 0.12 0.12 0.12 55 0.96 0.72 0.72 0.60
26 0.12 0.12 0.12 0.12 56 0.96 0.72 0.72 0.60
27 0.12 0.12 0.12 0.12 57 1.08 0.84 0.72 0.60
28 0.24 0.12 0.12 0.12 58 1.20 0.84 0.84 0.72
29 0.24 0.12 0.12 0.12 59 1.20 0.96 0.84 0.72
30 0.24 0.12 0.12 0.12 60 1.32 0.96 0.96 0.72
31 0.24 0.12 0.12 0.12 61 1.32 1.08 0.96 0.84
32 0.24 0.24 0.12 0.12 62 1.44 1.08 1.08 0.96
33 0.24 0.24 0.12 0.12 63 1.56 1.20 1.20 0.96
34 0.24 0.24 0.12 0.12 64 1.56 1.32 1.20 1.08
35 0.24 0.24 0.24 0.12 65 1.68 1.32 1.32 1.08
36 0.24 0.24 0.24 0.12 66 1.80 1.44 1.32 1.20
37 0.24 0.24 0.24 0.24 67 1.80 1.56 1.44 1.32
38 0.24 0.24 0.24 0.24 68 1.92 1.68 1.56 1.32
39 0.36 0.24 0.24 0.24 69 2.04 1.80 1.56 1.44
40 0.36 0.24 0.24 0.24 70 2.16 1.80 1.68 1.44
41 0.36 0.24 0.24 0.24 71 2.28 2.04 1.80 1.56
42 0.36 0.36 0.36 0.24 72 2.40 2.16 1.80 1.68
43 0.48 0.36 0.36 0.24 73 2.52 2.28 1.92 1.80
44 0.48 0.36 0.36 0.24 74 2.64 2.40 2.04 1.92
45 0.48 0.36 0.36 0.24 75 2.76 2.52 2.16 2.04
* One-twelfth of the Renewal Commission on the portion of the initial
face amount or increase in face amount remaining in force each month is
paid monthly during the first four renewal years after issue or
requested increase. Age used is issue age of contract or, for
increases in face amount, attained age of the insured on the effective
date of the increase. Smkr. includes contracts with face
amounts/increased face amounts having premium class "Smoker" or
"Smoker Special"; Nsmkr. includes contracts with face amounts/increased
face amounts having premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
C. Renewal Commission per $1,000* of face amount (initial or increase)
3. Spouse Insurance Benefit
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.12 0.00 46 0.24 0.12 0.12 0.12
17 0.12 0.00 47 0.24 0.12 0.24 0.12
18 0.12 0.00 48 0.36 0.12 0.24 0.12
19 0.12 0.00 49 0.36 0.12 0.24 0.12
20 0.12 0.12 0.00 0.00 50 0.36 0.24 0.24 0.12
21 0.12 0.12 0.00 0.00 51 0.36 0.24 0.24 0.12
22 0.12 0.12 0.00 0.00 52 0.48 0.24 0.24 0.24
23 0.12 0.12 0.00 0.00 53 0.48 0.24 0.36 0.24
24 0.12 0.12 0.12 0.00 54 0.48 0.24 0.36 0.24
25 0.12 0.12 0.12 0.00 55 0.60 0.36 0.36 0.24
26 0.12 0.12 0.12 0.00 56 0.60 0.36 0.36 0.24
27 0.12 0.12 0.12 0.00 57 0.72 0.36 0.36 0.24
28 0.12 0.12 0.12 0.00 58 0.72 0.48 0.36 0.24
29 0.12 0.12 0.12 0.00 59 0.84 0.48 0.48 0.24
30 0.12 0.12 0.12 0.00 60 0.84 0.48 0.48 0.36
31 0.12 0.12 0.12 0.00 61 0.96 0.60 0.48 0.36
32 0.12 0.12 0.12 0.00 62 0.96 0.60 0.60 0.36
33 0.12 0.12 0.12 0.12 63 1.08 0.72 0.60 0.48
34 0.12 0.12 0.12 0.12 64 1.08 0.72 0.60 0.48
35 0.12 0.12 0.12 0.12 65 1.20 0.84 0.72 0.48
36 0.12 0.12 0.12 0.12 66 1.32 0.96 0.72 0.60
37 0.12 0.12 0.12 0.12 67 1.44 1.08 0.84 0.60
38 0.12 0.12 0.12 0.12 68 1.56 1.08 0.84 0.72
39 0.12 0.12 0.12 0.12 69 1.68 1.20 0.96 0.72
40 0.12 0.12 0.12 0.12 70 1.80 1.32 0.96 0.84
41 0.12 0.12 0.12 0.12 71 1.92 1.56 1.08 0.96
42 0.24 0.12 0.12 0.12 72 2.04 1.68 1.20 0.96
43 0.24 0.12 0.12 0.12 73 2.28 1.80 1.32 1.08
44 0.24 0.12 0.12 0.12 74 2.40 2.04 1.32 1.20
45 0.24 0.12 0.12 0.12 75 2.64 2.16 1.44 1.20
* One-twelfth of the Renewal Commission on the portion of the initial
rider face amount or increase in rider face amount remaining in force
each month is paid monthly during the first four renewal years after
issue of the rider or increase of the rider. Age used is issue age of
spouse or, for increases in face amount, attained age of the spouse on
the effective date of the increase. Smkr. includes riders with face
amounts/increased face amounts having premium class "Smoker" or
"Smoker Special"; Nsmkr. includes riders with face amounts/increased
face amounts having premium class "Nonsmoker" or Nonsmoker Special".
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
D. Increase Commission per $1,000* of increase in face amount
1. Basic Contract - Highest Total Face Amount** Less Than $250,000
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.56 1.56 38 5.04 4.08 3.96 3.48
1 1.56 1.56 39 5.28 4.20 4.20 3.72
2 1.56 1.56 40 5.64 4.44 4.44 3.84
3 1.56 1.56 41 6.12 4.80 4.80 4.08
4 1.56 1.56 42 6.72 5.16 5.16 4.32
5 1.56 1.56 43 7.20 5.52 5.52 4.44
6 1.56 1.56 44 7.68 5.76 5.76 4.80
7 1.56 1.56 45 8.28 6.12 6.12 4.92
8 1.56 1.56 46 8.88 6.60 6.60 5.28
9 1.56 1.56 47 9.60 6.96 7.08 5.52
10 1.56 1.56 48 10.20 7.44 7.44 5.88
11 1.68 1.56 49 10.80 7.92 7.92 6.24
12 1.68 1.56 50 11.52 8.40 8.28 6.60
13 1.68 1.68 51 12.36 9.00 8.88 7.08
14 1.80 1.68 52 13.20 9.72 9.60 7.56
15 1.80 1.68 53 14.16 10.32 10.20 8.16
16 1.92 1.68 54 14.52 10.68 10.44 8.28
17 2.04 1.68 55 15.36 11.28 11.04 8.76
18 2.16 1.68 56 16.44 12.24 11.76 9.48
19 2.16 1.80 57 17.52 13.20 12.60 10.20
20 2.28 2.04 1.80 1.56 58 18.60 14.04 13.44 10.92
21 2.40 2.16 1.80 1.68 59 18.84 14.40 13.68 11.04
22 2.52 2.16 1.92 1.80 60 19.92 15.24 14.40 11.76
23 2.52 2.28 2.04 1.80 61 20.16 15.72 14.88 12.36
24 2.64 2.40 2.16 1.92 62 21.36 16.80 15.96 13.44
25 2.76 2.40 2.16 2.04 63 21.48 17.16 16.32 13.92
26 2.88 2.52 2.28 2.04 64 22.08 17.76 16.92 14.52
27 3.00 2.64 2.28 2.16 65 22.56 18.36 17.52 15.24
28 3.00 2.64 2.40 2.16 66 23.28 19.32 18.00 15.84
29 3.24 2.76 2.52 2.28 67 24.48 20.76 18.96 16.92
30 3.36 2.88 2.52 2.28 68 25.20 21.60 19.44 17.52
31 3.48 3.00 2.64 2.40 69 25.08 21.72 19.44 17.52
32 3.60 3.00 2.76 2.52 70 26.28 23.04 20.28 18.48
33 3.72 3.24 2.88 2.64 71 26.40 23.40 20.28 18.72
34 3.84 3.24 3.00 2.64 72 26.28 23.64 20.16 18.72
35 3.96 3.36 3.12 2.76 73 26.16 23.52 20.04 18.60
36 4.32 3.60 3.36 3.00 74 25.80 23.40 19.68 18.48
37 4.56 3.84 3.60 3.24 75 25.20 23.04 19.20 18.12
Age used is attained age of the insured on the effective date of the
requested increase in face amount. Smkr. includes increased face amounts
with premium class "Smoker" or "Smoker Special"; Nsmkr. includes increased
face amounts with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
D. Increase Commission per $1,000* of increase in face amount
2. Basic Contract - Highest Total Face Amount** More Than $249,999
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 1.44 1.20 46 6.84 5.04 5.16 4.08
17 1.56 1.32 47 7.32 5.40 5.40 4.32
18 1.68 1.32 48 7.92 5.76 5.76 4.56
19 1.68 1.32 49 8.40 6.12 6.00 4.80
20 1.80 1.68 1.32 1.20 50 8.88 6.48 6.48 5.04
21 1.92 1.68 1.44 1.20 51 9.60 6.96 6.84 5.40
22 1.92 1.68 1.44 1.32 52 10.20 7.44 7.32 5.88
23 2.04 1.80 1.56 1.44 53 10.92 8.04 7.92 6.24
24 2.16 1.92 1.68 1.44 54 11.16 8.28 8.04 6.48
25 2.16 1.92 1.68 1.56 55 11.88 8.76 8.52 6.84
26 2.28 1.92 1.80 1.68 56 12.72 9.48 9.12 7.32
27 2.28 2.04 1.80 1.68 57 13.56 10.20 9.72 7.92
28 2.40 2.16 1.92 1.68 58 14.40 10.92 10.32 8.40
29 2.52 2.16 1.92 1.80 59 14.62 11.16 10.56 8.52
30 2.52 2.28 2.04 1.80 60 15.36 11.76 11.16 9.12
31 2.64 2.28 2.16 1.92 61 15.60 12.12 11.52 9.60
32 2.76 2.40 2.16 1.92 62 16.44 13.08 12.36 10.32
33 2.88 2.52 2.28 2.04 63 16.68 13.32 12.60 10.80
34 3.00 2.52 2.28 2.16 64 16.92 13.68 12.96 11.16
35 3.12 2.64 2.40 2.16 65 17.40 14.28 13.56 11.76
36 3.36 2.76 2.64 2.28 66 17.88 14.88 13.92 12.24
37 3.60 2.88 2.76 2.52 67 18.84 15.96 14.64 13.08
38 3.84 3.12 3.00 2.64 68 19.56 16.68 15.12 13.56
39 4.08 3.36 3.24 2.88 69 19.08 16.68 14.88 13.44
40 4.32 3.48 3.48 3.00 70 20.04 17.64 15.48 14.16
41 4.80 3.72 3.72 3.12 71 20.52 18.24 15.84 14.52
42 5.16 3.96 3.96 3.36 72 20.16 18.00 15.48 14.28
43 5.52 4.20 4.20 3.48 73 20.04 18.12 15.36 14.28
44 6.00 4.44 4.44 3.72 74 19.80 18.00 15.12 14.16
45 6.36 4.80 4.80 3.84 75 19.32 17.76 14.76 13.92
Age used is attained age of the insured on the effective date of the
requested increase in face amount. Smkr. includes increased face amounts
with premium class "Smoker" or "Smoker Special"; Nsmkr. includes increased
face amounts with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
E. Cost of Living Increase Commission per $1,000* of increase in face amount
1. Highest Total Face Amount** Less Than $250,000 (Band 1)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.48 0.48 33 1.08 0.96 0.84 0.72
1 0.48 0.48 34 1.08 0.96 0.84 0.72
2 0.48 0.48 35 1.20 0.96 0.84 0.84
3 0.48 0.48 36 1.20 1.08 0.96 0.84
4 0.48 0.48 37 1.32 1.08 1.08 0.96
5 0.48 0.48 38 1.44 1.20 1.08 0.96
6 0.48 0.48 39 1.56 1.20 1.20 1.08
7 0.48 0.48 40 1.56 1.32 1.32 1.08
8 0.48 0.48 41 1.80 1.44 1.44 1.20
9 0.48 0.48 42 1.92 1.44 1.44 1.20
10 0.48 0.48 43 2.04 1.56 1.56 1.32
11 0.48 0.48 44 2.28 1.68 1.68 1.32
12 0.48 0.48 45 2.40 1.80 1.80 1.44
13 0.48 0.48 46 2.52 1.92 1.92 1.56
14 0.48 0.48 47 2.76 2.04 2.04 1.56
15 0.48 0.48 48 2.88 2.16 2.16 1.68
16 0.60 0.48 49 3.12 2.28 2.28 1.80
17 0.60 0.48 50 3.36 2.40 2.40 1.92
18 0.60 0.48 51 3.60 2.64 2.52 2.04
19 0.60 0.48 52 3.84 2.76 2.76 2.16
20 0.72 0.60 0.48 0.48 53 4.08 3.00 2.88 2.28
21 0.72 0.60 0.48 0.48 54 4.20 3.12 3.00 2.40
22 0.72 0.60 0.60 0.48 55 4.44 3.24 3.12 2.52
23 0.72 0.72 0.60 0.48 56 4.68 3.48 3.36 2.76
24 0.72 0.72 0.60 0.60 57 5.04 3.84 3.60 2.88
25 0.84 0.72 0.60 0.60 58 5.40 4.08 3.84 3.12
26 0.84 0.72 0.60 0.60 59 5.40 4.20 3.96 3.24
27 0.84 0.72 0.72 0.60 60 5.76 4.44 4.20 3.36
28 0.84 0.72 0.72 0.60 61 5.88 4.56 4.32 3.60
29 0.96 0.84 0.72 0.60 62 6.12 4.80 4.56 3.84
30 0.96 0.84 0.72 0.72 63 6.24 4.92 4.68 3.96
31 0.96 0.84 0.72 0.72 64 6.36 5.16 4.92 4.20
32 1.08 0.84 0.84 0.72
Age used is attained age of the insured on the effective date of the
increase in face amount. Smkr. includes increased face amounts with premium
class "Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts
with premium class "Nonsmoker" or "Nonsmoker Special.
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
Please note: A COLA increase alone will not trigger a change to the next
higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
E. Cost of Living Increase Commission per $1,000* of increase in face amount
2. Highest Total Face Amount** More Than $249,999 (Band 2)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.48 0.36 41 1.32 1.08 1.08 0.84
17 0.48 0.36 42 1.44 1.20 1.20 0.96
18 0.48 0.36 43 1.56 1.20 1.20 0.96
19 0.48 0.36 44 1.68 1.32 1.32 1.08
20 0.48 0.48 0.36 0.36 45 1.80 1.32 1.44 1.08
21 0.48 0.48 0.36 0.36 46 1.92 1.44 1.44 1.20
22 0.60 0.48 0.48 0.36 47 2.16 1.56 1.56 1.20
23 0.60 0.48 0.48 0.36 48 2.28 1.68 1.68 1.32
24 0.60 0.48 0.48 0.48 49 2.40 1.80 1.80 1.44
25 0.60 0.48 0.48 0.48 50 2.52 1.92 1.80 1.44
26 0.60 0.60 0.48 0.48 51 2.76 2.04 1.92 1.56
27 0.72 0.60 0.48 0.48 52 3.00 2.16 2.16 1.68
28 0.72 0.60 0.48 0.48 53 3.12 2.28 2.28 1.80
29 0.72 0.60 0.60 0.48 54 3.24 2.40 2.28 1.80
30 0.72 0.60 0.60 0.48 55 3.36 2.52 2.40 1.92
31 0.72 0.72 0.60 0.48 56 3.60 2.76 2.64 2.16
32 0.84 0.72 0.60 0.60 57 3.84 2.88 2.76 2.28
33 0.84 0.72 0.60 0.60 58 4.08 3.12 3.00 2.40
34 0.84 0.72 0.72 0.60 59 4.20 3.24 3.00 2.40
35 0.84 0.72 0.72 0.60 60 4.44 3.36 3.24 2.64
36 0.96 0.84 0.72 0.72 61 4.56 3.48 3.36 2.76
37 1.08 0.84 0.84 0.72 62 4.80 3.72 3.60 3.00
38 1.08 0.84 0.84 0.72 63 4.80 3.84 3.60 3.12
39 1.20 0.96 0.96 0.84 64 4.92 3.96 3.72 3.24
40 1.20 0.96 0.96 0.84
Age used is attained age of the insured on the effective date of the
increase in face amount. Smkr. includes increased face amounts with premium
class "Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts
with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
Please note: A COLA increase alone will not trigger a change to the next
higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
V. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE -- SERIES II
F. Riders Increased/Issued After Basic Contract
Spouse Insurance Benefit Commission per $1,000* of face amount
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.96 0.48 46 3.36 1.92 2.28 1.44
17 0.96 0.48 47 3.60 1.92 2.40 1.68
18 0.96 0.48 48 3.96 2.16 2.52 1.68
19 0.96 0.48 49 4.32 2.16 2.64 1.80
20 1.08 0.84 0.60 0.48 50 4.68 2.40 2.88 1.92
21 1.08 0.84 0.60 0.48 51 5.16 2.52 3.12 2.28
22 1.08 0.84 0.60 0.48 52 5.76 3.00 3.48 2.40
23 1.20 0.84 0.60 0.48 53 6.36 3.36 3.96 2.64
24 1.20 0.84 0.84 0.60 54 6.72 3.60 4.20 2.76
25 1.20 0.84 0.84 0.60 55 7.32 3.96 4.44 3.00
26 1.20 0.84 0.84 0.60 56 7.92 4.44 4.80 3.12
27 1.20 0.84 0.84 0.60 57 8.52 4.92 5.04 3.24
28 1.20 0.84 0.84 0.60 58 9.24 5.28 5.28 3.36
29 1.32 0.96 0.84 0.60 59 9.48 5.52 5.16 3.48
30 1.44 0.96 0.96 0.60 60 10.32 6.24 5.52 3.60
31 1.44 0.96 0.96 0.60 61 10.68 6.72 5.88 3.84
32 1.56 0.96 0.96 0.72 62 11.40 7.32 6.36 4.32
33 1.56 0.96 1.08 0.84 63 11.64 7.68 6.48 4.68
34 1.56 0.96 1.20 0.96 64 12.24 8.16 6.96 5.04
35 1.68 1.08 1.20 0.96 65 12.84 8.76 7.32 5.40
36 1.68 1.08 1.32 0.96 66 13.56 9.48 7.68 5.88
37 1.80 1.08 1.44 1.08 67 14.52 10.44 8.28 6.48
38 1.92 1.20 1.56 1.20 68 15.36 11.28 8.64 6.96
39 2.04 1.20 1.56 1.20 69 15.72 11.76 8.88 7.20
40 2.16 1.32 1.56 1.20 70 17.04 13.08 9.60 7.92
41 2.28 1.32 1.68 1.20 71 17.52 13.56 9.84 8.16
42 2.40 1.44 1.68 1.20 72 17.76 14.04 9.96 8.28
43 2.64 1.56 1.80 1.20 73 18.00 14.52 10.08 8.52
44 2.88 1.68 1.92 1.20 74 18.36 14.88 10.20 8.64
45 3.12 1.68 2.04 1.32 75 18.48 15.36 10.20 8.76
Age used is issue age of the spouse or, for increases in face amount,
attained age of the spouse on the effective date of the increase.
Smkr. includes riders with face amounts/increased face amounts having
premium class "Smoker" or "Smoker Special"; Nsmkr. includes riders with
face amounts/increased face amounts having premium class "Nonsmoker" or
"Nonsmoker Special".
Child Insurance Benefit Commission per $1,000 of face amount
Commission is $3.00 per $1,000.
One-twelfth of the commission is paid monthly.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES III, IV AND
JUVENILE-ISSUE
A. First Year Commission
First Year Commission is a percentage of all premium paid and
credited in the first contract year up to but not exceeding the
Target Premium. (Target Premiums are illustrated in Exhibit IA).
Issue Age Commission Rate
--------- ---------------
0-53 52 %
54-58 50
59-60 48
61-62 46
63 44
64 43
65 42
66-67 41
68 40
69-70 38
71 36
72 34
73 32
74 30
75 28
76 26
77 24.5
78 23
79 21.5
80 20
For contracts issued on or after June 1, 1990, an additional First
Year Commission is 3% of all premium paid and credited whenever
paid and credited during the first year.
B. Additional commission based on premium
1. For contracts issued on or after June 1, 1990, a Renewal
Commission based on premium is paid equal to 3% of all premium
paid and credited whenever paid and credited in contract
year 2 or later.
2. For contracts issued before June 1, 1990, a Service Commission
is paid equal to 3% of all premium paid and credited whenever
paid and credited.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
C. Renewal Commission per $1,000* of face amount (initial or increase)
1. Basic Contract - Highest Total Face Amount** of
Series III and IV Less Than $250,000
(No limit on face amount of Juvenile-Issue contract)
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.12 0.12 41 0.48 0.36 0.36 0.36
1 0.12 0.12 42 0.48 0.36 0.36 0.36
2 0.12 0.12 43 0.60 0.48 0.48 0.36
3 0.12 0.12 44 0.60 0.48 0.48 0.36
4 0.12 0.12 45 0.60 0.48 0.48 0.36
5 0.12 0.12 46 0.72 0.48 0.48 0.36
6 0.12 0.12 47 0.72 0.48 0.60 0.48
7 0.12 0.12 48 0.72 0.60 0.60 0.48
8 0.12 0.12 49 0.84 0.60 0.60 0.48
9 0.12 0.12 50 0.84 0.60 0.60 0.48
10 0.12 0.12 51 0.96 0.72 0.72 0.60
11 0.12 0.12 52 0.96 0.72 0.72 0.60
12 0.12 0.12 53 1.08 0.72 0.84 0.60
13 0.12 0.12 54 1.20 0.84 0.84 0.72
14 0.12 0.12 55 1.20 0.84 0.84 0.72
15 0.12 0.12 56 1.32 0.96 0.96 0.72
16 0.12 0.12 57 1.44 0.96 0.96 0.84
17 0.12 0.12 58 1.44 1.08 1.08 0.84
18 0.12 0.12 59 1.56 1.20 1.08 0.96
19 0.12 0.12 60 1.68 1.32 1.20 0.96
20 0.12 0.12 0.12 0.12 61 1.80 1.32 2.04 1.08
21 0.24 0.12 0.12 0.12 62 1.80 1.44 1.44 1.20
22 0.24 0.12 0.12 0.12 63 1.92 1.56 1.44 1.32
23 0.24 0.12 0.12 0.12 64 2.04 1.68 1.56 1.32
24 0.24 0.24 0.12 0.12 65 2.16 1.80 1.68 1.44
25 0.24 0.24 0.12 0.12 66 2.28 1.92 1.80 1.56
26 0.24 0.24 0.12 0.12 67 2.40 2.04 1.80 1.68
27 0.24 0.24 0.12 0.12 68 2.52 2.16 1.92 1.80
28 0.24 0.24 0.24 0.12 69 2.64 2.28 2.04 1.80
29 0.24 0.24 0.24 0.12 70 2.76 2.40 2.16 1.92
30 0.24 0.24 0.24 0.12 71 2.88 2.64 2.28 2.04
31 0.24 0.24 0.24 0.24 72 3.12 2.76 2.40 2.16
32 0.24 0.24 0.24 0.24 73 3.24 3.00 2.52 2.28
33 0.24 0.24 0.24 0.24 74 3.48 3.12 2.64 2.40
34 0.24 0.24 0.24 0.24 75 3.60 3.24 2.76 2.64
35 0.36 0.24 0.24 0.24 76 3.72 3.48 2.88 2.76
36 0.36 0.24 0.24 0.24 77 3.96 3.60 3.00 2.88
37 0.36 0.24 0.24 0.24 78 4.08 3.84 3.12 3.00
38 0.36 0.36 0.36 0.24 79 4.32 3.96 3.24 3.12
39 0.36 0.36 0.36 0.24 80 4.44 4.20 3.36 3.24
40 0.48 0.36 0.36 0.24
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first four renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
C. Renewal Commission per $1,000* of face amount (initial or increase)
2. Basic Contract - Highest Total Face Amount**
More Than $249,999 and Less Than $500,000
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 0.12 0.12 0.12 0.12 51 0.72 0.48 0.48 0.36
21 0.12 0.12 0.12 0.12 52 0.72 0.60 0.60 0.48
22 0.12 0.12 0.12 0.12 53 0.84 0.60 0.60 0.48
23 0.12 0.12 0.12 0.12 54 0.84 0.60 0.60 0.48
24 0.12 0.12 0.12 0.12 55 0.96 0.72 0.72 0.60
25 0.12 0.12 0.12 0.12 56 0.96 0.72 0.72 0.60
26 0.12 0.12 0.12 0.12 57 1.08 0.84 0.72 0.60
27 0.12 0.12 0.12 0.12 58 1.08 0.84 0.84 0.72
28 0.24 0.12 0.12 0.12 59 1.20 0.96 0.84 0.72
29 0.24 0.12 0.12 0.12 60 1.32 0.96 0.96 0.72
30 0.24 0.12 0.12 0.12 61 1.32 1.08 0.96 0.84
31 0.24 0.12 0.12 0.12 62 1.44 1.08 1.08 0.96
32 0.24 0.24 0.12 0.12 63 1.56 1.20 1.20 0.96
33 0.24 0.24 0.12 0.12 64 1.56 1.32 1.20 1.08
34 0.24 0.24 0.12 0.12 65 1.68 1.32 1.32 1.08
35 0.24 0.24 0.24 0.12 66 1.80 1.44 1.32 1.20
36 0.24 0.24 0.24 0.12 67 1.80 1.56 1.44 1.32
37 0.24 0.24 0.24 0.24 68 1.92 1.68 1.56 1.32
38 0.24 0.24 0.24 0.24 69 2.04 1.80 1.56 1.44
39 0.36 0.24 0.24 0.24 70 2.16 1.80 1.68 1.44
40 0.36 0.24 0.24 0.24 71 2.28 2.04 1.80 1.56
41 0.36 0.24 0.24 0.24 72 2.40 2.16 1.80 1.68
42 0.36 0.36 0.36 0.24 73 2.52 2.28 1.92 1.80
43 0.48 0.36 0.36 0.24 74 2.64 2.40 2.04 1.92
44 0.48 0.36 0.36 0.24 75 2.76 2.52 2.16 2.04
45 0.48 0.36 0.36 0.24 76 2.88 2.64 2.16 2.04
46 0.48 0.36 0.36 0.36 77 3.00 2.76 2.28 2.16
47 0.60 0.36 0.36 0.36 78 3.12 3.00 2.40 2.28
48 0.60 0.48 0.48 0.36 79 3.24 3.12 2.52 2.40
49 0.60 0.48 0.48 0.36 80 3.48 3.24 2.64 2.52
50 0.72 0.48 0.48 0.36
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first four renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
C. Renewal Commission per $1,000* of face amount (initial or increase)
3. Basic Contract - Highest Total Face Amount** More Than $499,999
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 0.12 0.12 0.12 0.12 51 0.48 0.36 0.36 0.24
21 0.12 0.12 0.12 0.12 52 0.48 0.36 0.36 0.36
22 0.12 0.12 0.12 0.12 53 0.60 0.36 0.36 0.36
23 0.12 0.12 0.12 0.12 54 0.60 0.48 0.48 0.36
24 0.12 0.12 0.12 0.12 55 0.60 0.48 0.48 0.36
25 0.12 0.12 0.12 0.12 56 0.72 0.48 0.48 0.36
26 0.12 0.12 0.12 0.12 57 0.72 0.60 0.48 0.48
27 0.12 0.12 0.12 0.12 58 0.84 0.60 0.60 0.48
28 0.12 0.12 0.12 0.12 59 0.84 0.60 0.60 0.48
29 0.12 0.12 0.12 0.12 60 0.96 0.72 0.60 0.48
30 0.12 0.12 0.12 0.12 61 0.96 0.72 0.72 0.60
31 0.12 0.12 0.12 0.12 62 0.96 0.84 0.72 0.60
32 0.12 0.12 0.12 0.12 63 1.08 0.84 0.84 0.72
33 0.12 0.12 0.12 0.12 64 1.08 0.96 0.84 0.72
34 0.12 0.12 0.12 0.12 65 1.20 0.96 0.96 0.84
35 0.12 0.12 0.12 0.12 66 1.20 1.08 0.96 0.84
36 0.12 0.12 0.12 0.12 67 1.32 1.08 0.96 0.96
37 0.24 0.12 0.12 0.12 68 1.32 1.20 1.08 0.96
38 0.24 0.12 0.12 0.12 69 1.44 1.20 1.08 0.96
39 0.24 0.12 0.12 0.12 70 1.56 1.32 1.20 1.08
40 0.24 0.24 0.12 0.12 71 1.68 1.44 1.20 1.20
41 0.24 0.24 0.24 0.12 72 1.80 1.56 1.32 1.20
42 0.24 0.24 0.24 0.12 73 1.92 1.68 1.44 1.32
43 0.24 0.24 0.24 0.24 74 2.04 1.80 1.56 1.44
44 0.36 0.24 0.24 0.24 75 2.16 2.04 1.68 1.56
45 0.36 0.24 0.24 0.24 76 2.28 2.16 1.80 1.68
46 0.36 0.24 0.24 0.24 77 2.40 2.28 1.92 1.80
47 0.36 0.24 0.24 0.24 78 2.64 2.40 1.92 1.92
48 0.36 0.24 0.24 0.24 79 2.76 2.52 2.04 1.92
49 0.48 0.36 0.36 0.24 80 2.88 2.64 2.16 2.04
50 0.48 0.36 0.36 0.24
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first four renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
C. Renewal Commission per $1,000* of face amount (initial or increase)
4. Spouse Insurance Benefit
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.00 0.00 49 0.24 0.12 0.12 0.12
17 0.00 0.00 50 0.36 0.24 0.24 0.12
18 0.12 0.00 51 0.36 0.24 0.24 0.12
19 0.12 0.00 52 0.36 0.24 0.24 0.12
20 0.12 0.00 0.00 0.00 53 0.36 0.24 0.24 0.12
21 0.12 0.00 0.00 0.00 54 0.48 0.24 0.24 0.12
22 0.12 0.00 0.00 0.00 55 0.48 0.24 0.24 0.12
23 0.12 0.00 0.00 0.00 56 0.48 0.24 0.24 0.24
24 0.12 0.00 0.00 0.00 57 0.60 0.36 0.24 0.24
25 0.12 0.00 0.00 0.00 58 0.60 0.36 0.36 0.24
26 0.12 0.00 0.00 0.00 59 0.60 0.36 0.36 0.24
27 0.12 0.00 0.00 0.00 60 0.72 0.36 0.36 0.24
28 0.12 0.00 0.00 0.00 61 0.72 0.48 0.36 0.24
29 0.12 0.00 0.00 0.00 62 0.84 0.48 0.36 0.24
30 0.12 0.00 0.12 0.00 63 0.84 0.48 0.36 0.24
31 0.12 0.00 0.12 0.00 64 0.84 0.48 0.48 0.36
32 0.12 0.12 0.12 0.00 65 0.96 0.60 0.48 0.36
33 0.12 0.12 0.12 0.00 66 0.96 0.60 0.48 0.36
34 0.12 0.12 0.12 0.00 67 1.08 0.72 0.48 0.36
35 0.12 0.12 0.12 0.00 68 1.20 0.72 0.60 0.36
36 0.12 0.12 0.12 0.00 69 1.32 0.84 0.60 0.48
37 0.12 0.12 0.12 0.12 70 1.44 0.96 0.72 0.48
38 0.12 0.12 0.12 0.12 71 1.56 1.08 0.72 0.60
39 0.12 0.12 0.12 0.12 72 1.68 1.20 0.84 0.60
40 0.12 0.12 0.12 0.12 73 1.80 1.32 0.84 0.72
41 0.12 0.12 0.12 0.12 74 1.92 1.44 0.96 0.72
42 0.24 0.12 0.12 0.12 75 2.16 1.56 0.96 0.84
43 0.24 0.12 0.12 0.12 76 2.52 1.80 1.20 0.84
44 0.24 0.12 0.12 0.12 77 2.76 1.92 1.44 0.96
45 0.24 0.12 0.12 0.12 78 3.00 2.16 1.56 1.08
46 0.24 0.12 0.12 0.12 79 3.24 2.28 1.68 1.20
47 0.24 0.12 0.12 0.12 80 3.48 2.52 1.92 1.44
48 0.24 0.12 0.12 0.12
* The twelfth of the Renewal Commission on the portion of the rider face
amount or increase in rider face amount remaining in force each month is
paid monthly during the first four renewal years after issue of the rider
or increase of the rider. Age used is issue age of spouse or, for
increases in face amount, attained age of the spouse on the effective
date of the increase. Smkr. includes riders with face amounts/increased
face amounts having premium class "Smoker" or "Smoker Special"; includes
riders with face amounts/increased face amounts having premium class
"Nonsmoker" or "Nonsmoker Special".
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
D. Increase Commission per $1,000* of increase in face amount
1. Basic Contract - Highest Total Face Amount** of
Series III and IV Less Than $250,000
(No limit on face amount of Juvenile-Issue contract)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.32 1.32 41 6.12 4.80 4.80 4.08
1 1.32 1.32 42 6.60 5.16 5.16 4.32
2 1.32 1.32 43 7.08 5.52 5.52 4.44
3 1.32 1.32 44 7.68 5.76 5.76 4.80
4 1.32 1.32 45 8.28 6.12 6.12 4.92
5 1.32 1.32 46 8.88 6.60 6.60 5.28
6. 1.32 1.32 47 9.48 6.96 7.08 5.52
7. 1.32 1.32 48 9.96 7.44 7.44 5.88
8 1.32 1.32 49 10.56 7.92 7.92 6.24
9 1.32 1.32 50 11.28 8.40 8.28 6.60
10 1.32 1.32 51 12.12 8.88 8.88 7.08
11 1.32 1.32 52 12.96 9.36 9.60 7.56
12 1.44 1.32 53 13.92 9.96 10.20 8.16
13 1.44 1.32 54 14.52 10.20 10.44 8.28
14 1.68 1.44 55 15.36 10.92 11.04 8.76
15 1.80 1.44 56 16.44 11.76 11.76 9.48
16 1.92 1.56 57 17.52 12.60 12.60 10.20
17 2.04 1.68 58 18.60 13.56 13.44 10.92
18 2.16 1.68 59 18.84 14.04 13.68 11.04
19 2.16 1.80 60 19.92 15.24 14.40 11.76
20 2.28 2.04 1.80 1.56 61 20.16 15.72 14.88 12.36
21 2.40 2.16 1.80 1.68 62 21.36 16.80 15.96 13.44
22 2.52 2.16 1.92 1.80 63 21.48 17.16 16.32 13.92
23 2.52 2.28 2.04 1.80 64 22.08 17.76 16.92 14.52
24 2.64 2.40 2.16 1.92 65 22.56 18.36 17.52 15.24
25 2.76 2.40 2.16 2.04 66 23.28 19.32 18.00 15.84
26 2.88 2.52 2.28 2.04 67 24.48 20.76 18.96 16.92
27 3.00 2.64 2.28 2.16 68 25.20 21.60 19.44 17.52
28 3.00 2.64 2.40 2.16 69 25.08 21.72 19.44 17.52
29 3.24 2.76 2.52 2.28 70 26.28 23.04 20.28 18.48
30 3.36 2.88 2.52 2.28 71 26.40 23.40 20.28 18.72
31 3.48 3.00 2.64 2.40 72 26.28 23.64 20.16 18.72
32 3.60 3.00 2.76 2.52 73 26.16 23.52 20.04 18.60
33 3.72 3.24 2.88 2.64 74 25.80 23.40 19.68 18.48
34 3.84 3.24 3.00 2.64 75 25.20 23.04 19.20 18.12
35 3.96 3.36 3.12 2.76 76 24.48 22.56 18.60 17.64
36 4.32 3.60 3.36 3.00 77 24.12 22.32 18.24 17.40
37 4.56 3.84 3.60 3.24 78 23.64 21.96 17.88 17.04
38 5.04 4.08 3.96 3.48 79 22.92 21.48 17.28 16.56
39 5.28 4.20 4.20 3.72 80 22.20 20.88 16.68 16.08
40 5.64 4.44 4.44 3.84
Age used is attained age of the insured on the effective date of the
requested increase in face amount. Smkr. includes increased face amounts
with premium class "Smoker" or "Smoker Special"; Nsmkr. includes increased
face amounts with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
D. Increase Commission per $1,000* of increase in face amount
2. Basic Contract - Highest Total Face Amount**
More Than $249,999 and Less Than $500,000
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 1.80 1.68 1.32 1.20 51 9.36 6.96 6.84 5.40
21 1.92 1.68 1.44 1.20 52 10.08 7.32 7.32 5.88
22 1.92 1.68 1.44 1.32 53 10.80 7.68 7.92 6.24
23 2.04 1.80 1.56 1.44 54 11.16 7.92 8.04 6.48
24 2.16 1.92 1.68 1.44 55 11.88 8.52 8.52 6.84
25 2.16 1.92 1.68 1.56 56 12.72 9.12 9.12 7.32
26 2.28 1.92 1.80 1.68 57 13.56 10.20 9.72 7.92
27 2.28 2.04 1.80 1.68 58 14.40 10.92 10.32 8.40
28 2.40 2.16 1.92 1.68 59 14.52 11.04 10.56 8.52
29 2.52 2.16 1.92 1.80 60 15.36 11.76 11.16 9.12
30 2.52 2.28 2.04 1.80 61 15.60 12.12 11.52 9.60
31 2.64 2.28 2.16 1.92 62 16.44 13.08 12.36 10.32
32 2.76 2.40 2.16 1.92 63 16.68 13.32 12.60 10.80
33 2.88 2.52 2.28 2.04 64 16.92 13.68 12.96 11.16
34 3.00 2.52 2.28 2.16 65 17.40 14.28 13.56 11.76
35 3.12 2.64 2.40 2.16 66 17.88 14.88 13.92 12.24
36 3.36 2.76 2.64 2.28 67 18.84 15.96 14.64 13.08
37 3.60 2.88 2.76 2.52 68 19.56 16.68 15.12 13.56
38 3.84 3.12 3.00 2.64 69 19.08 16.68 14.88 13.44
39 4.08 3.36 3.24 2.88 70 20.04 17.64 15.48 14.16
40 4.32 3.48 3.48 3.00 71 20.52 18.24 15.84 14.52
41 4.80 3.72 3.72 3.12 72 20.16 18.00 15.48 14.28
42 5.16 3.96 3.96 3.36 73 20.04 18.12 15.36 14.28
43 5.52 4.20 4.20 3.48 74 19.80 18.00 15.12 14.16
44 6.00 4.44 4.44 3.72 75 19.32 17.76 14.76 13.92
45 6.36 4.80 4.80 3.84 76 18.84 17.40 14.28 13.56
46 6.84 5.04 5.16 4.08 77 18.60 17.16 14.04 13.44
47 7.20 5.40 5.40 4.32 78 18.24 16.92 13.80 13.20
48 7.68 5.76 5.76 4.56 79 17.64 16.56 13.44 12.84
49 8.28 6.12 6.00 4.80 80 17.16 16.08 12.96 12.48
50 8.76 6.48 5.04
Age used is attained age of the insured on the effective date of the
requested increase in face amount. Smkr. includes increased face amounts
with premium class "Smoker" or "Smoker Special"; Nsmkr. includes increased
face amounts with premium class "Nonsmoker" or "Nonsmoker" or
"Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
D. Increase Commission per $1,000* of increase in face amount
3. Basic Contract - Highest Total Face Amount** More Than $499,999
<TABLE>
Attained Male Female Attained Male Female
Age Smkr Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 1.32 1.08 0.96 0.84 51 6.36 4.68 4.68 3.72
21 1.32 1.20 0.96 0.84 52 6.84 5.04 5.04 3.96
22 1.32 1.20 1.08 0.96 53 7.32 5.28 5.28 4.20
23 1.32 1.20 1.08 0.96 54 7.68 5.52 5.52 4.44
24 1.44 1.32 1.20 1.08 55 8.16 5.88 5.88 4.68
25 1.44 1.32 1.20 1.08 56 8.76 6.36 6.24 5.04
26 1.44 1.32 1.20 1.08 57 9.36 6.84 6.72 5.40
27 1.56 1.44 1.32 1.20 58 10.08 7.44 7.20 5.76
28 1.68 1.44 1.32 1.20 59 10.20 7.68 7.32 5.88
29 1.68 1.44 1.32 1.20 60 10.80 8.28 7.80 6.36
30 1.80 1.44 1.32 1.20 61 11.04 8.52 8.04 6.72
31 1.80 1.56 1.44 1.32 62 11.64 9.12 8.64 7.32
32 1.92 1.68 1.44 1.32 63 11.64 9.24 8.88 7.56
33 1.92 1.68 1.44 1.32 64 12.00 9.72 9.24 8.04
34 2.04 1.68 1.56 1.44 65 12.36 10.08 9.60 8.40
35 2.16 1.80 1.68 1.44 66 12.72 10.56 9.84 8.76
36 2.28 1.92 1.80 1.68 67 13.32 11.16 10.32 9.24
37 2.40 2.04 1.92 1.80 68 13.68 11.76 10.56 9.60
38 2.52 2.16 2.04 1.92 69 13.68 11.88 10.68 9.60
39 2.76 2.28 2.16 2.04 70 14.52 12.72 11.16 10.32
40 2.88 2.40 2.28 2.04 71 14.64 13.08 11.28 10.44
41 3.24 2.52 2.52 2.16 72 14.76 13.32 11.40 10.56
42 3.48 2.64 2.64 2.28 73 15.00 13.56 11.52 10.68
43 3.72 2.88 2.88 2.40 74 15.12 13.92 11.64 10.92
44 4.08 3.00 3.12 2.52 75 15.36 14.04 11.64 11.04
45 4.32 3.24 3.24 2.52 76 15.12 13.92 11.52 10.80
46 4.56 3.48 3.48 2.76 77 15.00 13.92 11.40 10.80
47 4.92 3.60 3.72 2.88 78 14.88 13.80 11.28 10.68
48 5.16 3.84 3.84 3.00 79 14.64 13.68 11.04 10.56
49 5.52 4.08 4.08 3.24 80 14.28 13.32 10.80 10.32
50 5.88 4.32 4.32 3.48
Age used is attained age of the insured on the effective date of the
requested increase in face amount. Smkr. includes increased face amounts
with premium class "Smoker" or "Smoker Special"; Nsmkr. includes increased
face amounts with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
E. Cost of Living Increase Commission per $1,000* of increase in face amount
1. Highest Total Face Amount** of
Series III and IV Less Than $250,000 (Band 1)
(No limit on face amount of Juvenile-Issue contract)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.36 0.36 33 1.08 0.96 0.84 0.72
1 0.36 0.36 34 1.08 0.96 0.84 0.72
2 0.36 0.36 35 1.20 0.96 0.96 0.84
3 0.36 0.36 36 1.20 1.08 0.96 0.84
4 0.36 0.36 37 1.32 1.08 1.08 0.96
5 0.36 0.36 38 1.44 1.20 1.08 0.96
6 0.36 0.36 39 1.56 1.20 1.20 1.08
7 0.36 0.36 40 1.68 1.32 1.32 1.08
8 0.36 0.36 41 1.80 1.44 1.44 1.20
9 0.36 0.36 42 1.92 1.44 1.44 1.20
10 0.36 0.36 43 2.04 1.56 1.56 1.32
11 0.36 0.36 44 2.28 1.68 1.68 1.32
12 0.36 0.36 45 2.40 1.80 1.80 1.44
13 0.48 0.36 46 2.52 1.92 1.92 1.56
14 0.48 0.36 47 2.76 2.04 2.04 1.56
15 0.48 0.48 48 2.88 2.16 2.16 1.68
16 0.60 0.48 49 3.00 2.28 2.28 1.80
17 0.60 0.48 50 3.24 2.40 2.40 1.92
18 0.60 0.48 51 3.48 2.52 2.52 2.04
19 0.60 0.48 52 3.72 2.76 2.76 2.16
20 0.72 0.60 0.48 0.48 53 3.96 2.88 2.88 2.40
21 0.72 0.60 0.48 0.48 54 4.20 3.00 3.00 2.40
22 0.72 0.60 0.60 0.48 55 4.44 3.12 3.12 2.52
23 0.72 0.72 0.60 0.48 56 4.68 3.36 3.36 2.76
24 0.72 0.72 0.60 0.60 57 5.04 3.60 3.60 2.88
25 0.84 0.72 0.60 0.60 58 5.40 3.96 3.84 3.12
26 0.84 0.72 0.60 0.60 59 5.40 4.08 3.96 3.24
27 0.84 0.72 0.72 0.60 60 5.76 4.44 4.20 3.36
28 0.84 0.72 0.72 0.60 61 5.88 4.56 4.32 3.60
29 0.96 0.84 0.72 0.60 62 6.12 4.80 4.56 3.84
30 0.96 0.84 0.72 0.72 63 6.24 4.92 4.68 3.96
31 0.96 0.84 0.72 0.72 64 6.36 5.16 4.92 4.20
32 1.08 0.84 0.84 0.72
Age used is attained age of the insured on the effective date of the
increase in face amount. Smkr. includes increased face amounts with premium
class "Smoker" or "Smoker Special"; Nsmkr, includes increased face amounts
with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
Please note: A COLA increase alone will not trigger a change to the
next higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
E. Cost of Living Increase Commission per $1,000* of increase in face amount
2. Highest Total Face Amount** More Than $249,999 and
Less Than $500,000 (Band 2)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 0.48 0.48 0.36 0.36 42 1.44 1.20 1.20 0.96
21 0.60 0.48 0.36 0.36 43 1.56 1.20 1.20 0.96
22 0.60 0.48 0.48 0.36 44 1.68 1.32 1.32 1.08
23 0.60 0.48 0.48 0.36 45 1.80 1.32 1.44 1.08
24 0.60 0.60 0.48 0.48 46 1.92 1.44 1.44 1.20
25 0.60 0.60 0.48 0.48 47 2.04 1.56 1.56 1.20
26 0.60 0.60 0.48 0.48 48 2.28 1.68 1.68 1.32
27 0.72 0.60 0.48 0.48 49 2.40 1.80 1.80 1.44
28 0.72 0.60 0.60 0.48 50 2.52 1.92 1.80 1.44
29 0.72 0.60 0.60 0.48 51 2.76 2.04 2.04 1.56
30 0.72 0.60 0.60 0.48 52 2.88 2.16 2.16 1.68
31 0.72 0.72 0.60 0.60 53 3.12 2.28 2.28 1.80
32 0.84 0.72 0.60 0.60 54 3.24 2.28 2.28 1.80
33 0.84 0.72 0.60 0.60 55 3.36 2.40 2.40 1.92
34 0.84 0.72 0.72 0.60 56 3.60 2.64 2.64 2.16
35 0.96 0.72 0.72 0.60 57 3.84 2.88 2.76 2.28
36 0.96 0.84 0.72 0.72 58 4.08 3.12 3.00 2.40
37 1.08 0.84 0.84 0.72 59 4.20 3.12 3.00 2.40
38 1.08 0.96 0.84 0.72 60 4.44 3.36 3.24 2.64
39 1.20 0.96 0.96 0.84 61 4.56 3.48 3.36 2.76
40 1.32 0.96 0.96 0.84 62 4.80 3.72 3.60 3.00
41 1.32 1.08 1.08 0.96 63 4.80 3.84 3.60 3.12
64 4.92 3.96 3.72 3.24
Age used is attained age of the insured on the effective date of the
increase in face amount. Smkr. includes increased face amounts with premium
class "Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts
with premium class "Nonsmoker" or "Nonsmoker" or Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
Please Note: A COLA increase will not trigger a change to the
next higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
E. Cost of Living Increase Commission per $1,000* of increase in face amount
3. Highest Total Face Amount** More Than $499,999 (Band 3)
<TABLE>
Attained Male Female Attained Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 0.36 0.36 0.24 0.24 42 0.96 0.72 0.72 0.60
21 0.36 0.36 0.24 0.24 43 1.08 0.84 0.84 0.72
22 0.36 0.36 0.36 0.24 44 1.20 0.84 0.84 0.72
23 0.36 0.36 0.36 0.24 45 1.20 0.96 0.96 0.72
24 0.36 0.36 0.36 0.36 46 1.32 0.96 0.96 0.84
25 0.36 0.36 0.36 0.36 47 1.44 1.08 1.08 0.84
26 0.48 0.36 0.36 0.36 48 1.44 1.08 1.08 0.84
27 0.48 0.36 0.36 0.36 49 1.56 1.20 1.20 0.96
28 0.48 0.36 0.36 0.36 50 1.68 1.32 1.32 0.96
29 0.48 0.48 0.36 0.36 51 1.80 1.32 1.32 1.08
30 0.48 0.48 0.36 0.36 52 2.04 1.44 1.44 1.20
31 0.48 0.48 0.36 0.36 53 2.16 1.56 1.56 1.20
32 0.60 0.48 0.48 0.36 54 2.16 1.56 1.56 1.32
33 0.60 0.48 0.48 0.36 55 2.40 1.68 1.68 1.32
34 0.60 0.48 0.48 0.36 56 2.52 1.80 1.80 1.44
35 0.60 0.48 0.48 0.48 57 2.76 1.92 1.92 1.56
36 0.60 0.60 0.48 0.48 58 2.88 2.16 2.04 1.68
37 0.72 0.60 0.60 0.48 59 3.00 2.28 2.16 1.68
38 0.72 0.60 0.60 0.60 60 3.12 2.40 2.28 1.80
39 0.84 0.60 0.60 0.60 61 3.12 2.52 2.28 1.92
40 0.84 0.72 0.72 0.60 62 3.36 2.64 2.52 2.16
41 0.96 0.72 0.72 0.60 63 3.36 2.64 2.52 2.16
64 3.48 2.76 2.64 2.28
Age used is attained age of the insured on the effective date of the
increase in face amount. Smkr. includes increased face amounts with premium
class "Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts
with premium class "Nonsmoker" or "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the total Face Amount after a requested increase.
Please note: A COLA increase alone will not trigger a change to the
next higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VI. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
F. Riders Increased/Issued after Basic Contract
Spouse Insurance Benefit Commission per $1,000* of face amount
<TABLE>
Male Female Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.60 0.36 49 3.60 2.28 2.28 1.68
17 0.72 0.36 50 3.96 2.40 2.40 1.80
18 0.84 0.36 51 4.32 2.52 2.64 1.80
19 0.84 0.48 52 4.80 2.64 2.88 1.92
20 0.96 0.60 0.48 0.36 53 5.28 2.88 3.12 2.04
21 0.96 0.60 0.48 0.36 54 5.52 3.00 3.12 2.04
22 0.96 0.60 0.48 0.48 55 6.12 3.36 3.36 2.16
23 0.96 0.72 0.48 0.48 56 6.60 3.60 3.48 2.28
24 0.96 0.72 0.48 0.48 57 6.96 3.84 3.72 2.40
25 0.96 0.72 0.48 0.48 58 7.56 4.20 3.96 2.64
26 1.08 0.72 0.60 0.48 59 7.80 4.32 3.96 2.64
27 1.08 0.72 0.60 0.48 60 8.28 4.68 4.08 2.76
28 1.08 0.72 0.60 0.48 61 8.40 4.92 4.20 2.76
29 1.08 0.72 0.72 0.48 62 9.00 5.28 4.56 3.12
30 1.08 0.72 0.84 0.48 63 9.00 5.28 4.56 3.12
31 1.20 0.72 0.84 0.48 64 9.36 5.52 4.80 3.36
32 1.20 0.84 0.84 0.60 65 9.72 5.76 4.92 3.48
33 1.32 0.84 0.96 0.60 66 10.20 6.24 5.04 3.60
34 1.44 0.84 0.96 0.60 67 11.16 6.84 5.40 3.96
35 1.56 0.84 1.08 0.60 68 11.88 7.44 5.76 4.20
36 1.56 0.96 1.08 0.72 69 12.24 7.92 5.88 4.44
37 1.68 0.96 1.20 0.84 70 13.32 8.88 6.48 4.92
38 1.80 1.08 1.20 0.84 71 13.68 9.36 6.60 5.28
39 1.92 1.08 1.32 0.84 72 14.16 9.96 6.84 5.40
40 2.16 1.20 1.32 0.96 73 14.52 10.44 6.96 5.64
41 2.28 1.20 1.56 0.96 74 14.76 10.80 6.96 5.76
42 2.40 1.32 1.68 1.08 75 15.00 11.16 6.96 5.76
43 2.52 1.56 1.80 1.20 76 16.56 11.40 8.16 5.76
44 2.64 1.56 1.80 1.20 77 16.92 11.88 8.52 6.00
45 2.88 1.68 1.92 1.32 78 17.16 12.24 8.88 6.24
46 3.00 1.92 2.16 1.44 79 17.28 12.48 9.12 6.60
47 3.24 1.92 2.16 1.56 80 17.28 12.72 9.36 6.96
48 3.36 2.16 2.28 1.56
Age used is issue age of the spouse or, for increases in face amount,
attained age of the spouse on the effective date of the increase. Smkr.
includes riders issued with face amounts/increased face amounts having
premium class "Smoker" or "Smoker Special"; Nsmkr. includes riders with face
amounts/increased face amounts having premium class "Nonsmoker" or
"Nonsmoker Special".
Child Insurance Benefit Commission per $1,000 of face amount
Commission is $3.00 per $1,000. One-twelfth of the commission is
paid monthly.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
A. First Year Commission
1. First year commission is a percentage of all premiums paid and
credited in the first contract year up to but not exceeding the
Target Premium.*
Commission Rate for Initial
Face Amount Less than Commission Rate
$250,000; Spouse and Child for Initial Face
Riders Issued with the Amount Greater
Issue Age** Basic Contract Than $249,999
--------- -------------- -------------
0-51 47 % 40 %
52-53 47 39
54-55 45 38
56-57 45 37
58-59 45 36
60 45 35
61 43 35
62 43 34
63 41 34
64-65 41 33
66-67 40 32
68 39 31
69 37 30
70 36 29
71 34 28
72 32 27
73 30 26
74 28 25
75 27 24
76 25.5 22
77 24 20.5
78 22.5 19
79 21.5 17.5
80 20 16
* The total Target Premium is equal to the initial Death Benefit
Guarantee Premium for the contract excluding any extra premium paid
for aviation or temporary extra premium. Target Premiums for the
rider coverages are found in Exhibit IA. The Target Premium that
is apportioned to the basic coverage is the total Target Premium
less any rider Target Premium.
** Issue Age is the issue age of the insured for the basic coverage;
the age at issue of the spouse for the spouse rider.
2. For contracts issued on or after June 1, 1990, an additional
First Year Commission is 3% of all premium paid and credited in
the first contract year.
B. Additional commission based on premium
1. For contracts issued on or after June 1, 1990, a Renewal
Commission based on premium is paid equal to 3% of all premium
paid and credited whenever paid and credited in contract year
two or later.
2. For contracts issued before June 1, 1990, a Service Commission
is paid equal to 3% of all premium paid and credited whenever
paid and credited.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
C. Renewal Commissions per $1,000* of Face Amount (Initial or Increase)
1. Basic Contract - Highest Total Face Amount** Less Than $250,000
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.24 0.12 41 0.96 0.72 0.60 0.48
1 0.24 0.12 42 1.08 0.72 0.60 0.48
2 0.24 0.12 43 1.08 0.72 0.72 0.48
3 0.24 0.12 44 1.20 0.84 0.72 0.60
4 0.24 0.12 45 1.32 0.84 0.72 0.60
5 0.24 0.12 46 1.32 0.96 0.84 0.60
6 0.24 0.12 47 1.44 0.96 0.84 0.72
7 0.24 0.12 48 1.56 1.08 0.84 0.72
8 0.24 0.24 49 1.68 1.20 0.96 0.72
9 0.24 0.24 50 1.68 1.20 0.96 0.72
10 0.36 0.24 51 1.80 1.32 1.08 0.84
11 0.36 0.24 52 1.92 1.32 1.08 0.84
12 0.36 0.24 53 2.04 1.44 1.20 0.96
13 0.36 0.24 54 2.16 1.56 1.20 0.96
14 0.36 0.24 55 2.28 1.68 1.32 1.08
15 0.36 0.24 56 2.40 1.80 1.32 1.08
16 0.36 0.24 57 2.52 1.92 1.44 1.20
17 0.36 0.24 58 2.64 2.04 1.44 1.20
18 0.36 0.24 59 2.88 2.28 1.56 1.32
19 0.48 0.24 60 3.00 2.40 1.68 1.44
20 0.48 0.36 0.24 0.24 61 3.24 2.52 1.80 1.56
21 0.48 0.36 0.24 0.24 62 3.36 2.64 1.92 1.56
22 0.48 0.36 0.36 0.24 63 3.60 2.88 1.92 1.68
23 0.48 0.36 0.36 0.24 64 3.84 3.12 2.16 1.80
24 0.48 0.36 0.36 0.24 65 3.96 3.24 2.16 1.92
25 0.48 0.36 0.36 0.24 66 4.20 3.36 2.28 2.04
26 0.48 0.36 0.36 0.24 67 4.56 3.72 2.52 2.28
27 0.60 0.36 0.36 0.24 68 4.68 3.84 2.64 2.40
28 0.60 0.36 0.36 0.24 69 4.92 4.08 2.76 2.52
29 0.60 0.36 0.36 0.24 70 5.28 4.44 3.00 2.76
30 0.60 0.36 0.36 0.36 71 5.64 4.68 3.12 2.88
31 0.60 0.48 0.48 0.36 72 5.88 5.04 3.36 3.00
32 0.72 0.48 0.48 0.36 73 6.36 5.40 3.60 3.36
33 0.72 0.48 0.48 0.36 74 6.60 5.64 3.84 3.48
34 0.72 0.48 0.48 0.36 75 6.96 6.00 3.96 3.72
35 0.72 0.48 0.48 0.36 76 7.32 6.36 4.20 3.96
36 0.84 0.48 0.48 0.36 77 7.68 6.72 4.44 4.20
37 0.84 0.60 0.48 0.36 78 8.04 6.96 4.68 4.44
38 0.84 0.60 0.60 0.36 79 8.40 7.32 4.92 4.68
39 0.84 0.60 0.60 0.48 80 8.76 7.68 5.16 4.92
40 0.96 0.60 0.60 0.48
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first two renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special". Std. includes
contracts with face amounts/increased face amounts having premium class
"Standard" or "Standard Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
C. Renewal Commissions per $1,000* of Face Amount (Initial or Increase)
2. Basic Contract - Highest Total Face Amount** More Than $249,999
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.24 0.12 41 0.84 0.60 0.48 0.36
1 0.24 0.12 42 0.84 0.60 0.48 0.36
2 0.24 0.12 43 0.96 0.60 0.60 0.48
3 0.24 0.12 44 0.96 0.60 0.60 0.48
4 0.24 0.12 45 1.08 0.72 0.60 0.48
5 0.24 0.12 46 1.08 0.72 0.60 0.48
6 0.24 0.12 47 1.20 0.84 0.72 0.48
7 0.24 0.12 48 1.20 0.84 0.72 0.60
8 0.24 0.12 49 1.32 0.96 0.72 0.60
9 0.24 0.12 50 1.44 0.96 0.84 0.60
10 0.24 0.12 51 1.44 1.08 0.84 0.72
11 0.24 0.12 52 1.56 1.08 0.84 0.72
12 0.24 0.12 53 1.68 1.20 0.96 0.72
13 0.24 0.24 54 1.80 1.32 0.96 0.84
14 0.24 0.24 55 1.92 1.44 1.08 0.84
15 0.36 0.24 56 1.92 1.44 1.08 0.84
16 0.36 0.24 57 2.16 1.56 1.20 0.96
17 0.36 0.24 58 2.16 1.68 1.20 0.96
18 0.36 0.24 59 2.40 1.80 1.32 1.08
19 0.36 0.24 60 2.52 1.92 1.32 1.20
20 0.36 0.24 0.24 0.24 61 2.64 2.04 1.44 1.20
21 0.36 0.24 0.24 0.24 62 2.76 2.16 1.56 1.32
22 0.36 0.24 0.24 0.24 63 2.88 2.28 1.56 1.32
23 0.36 0.24 0.24 0.24 64 3.12 2.52 1.68 1.56
24 0.36 0.24 0.24 0.24 65 3.24 2.64 1.80 1.56
25 0.36 0.24 0.24 0.24 66 3.48 2.76 1.92 1.68
26 0.48 0.24 0.24 0.24 67 3.72 3.00 2.04 1.80
27 0.48 0.36 0.24 0.24 68 3.84 3.24 2.16 1.92
28 0.48 0.36 0.36 0.24 69 4.08 3.36 2.28 2.04
29 0.48 0.36 0.36 0.24 70 4.32 3.60 2.40 2.16
30 0.48 0.36 0.36 0.24 71 4.56 3.84 2.52 2.40
31 0.48 0.36 0.36 0.24 72 4.80 4.08 2.76 2.52
32 0.60 0.36 0.36 0.24 73 5.16 4.44 3.00 2.76
33 0.60 0.36 0.36 0.24 74 5.40 4.68 3.12 2.88
34 0.60 0.36 0.36 0.24 75 5.64 4.92 3.24 3.00
35 0.60 0.36 0.36 0.24 76 6.00 5.16 3.48 3.24
36 0.60 0.48 0.36 0.36 77 6.24 5.40 3.60 3.36
37 0.72 0.48 0.48 0.36 78 6.60 5.76 3.84 3.60
38 0.72 0.48 0.48 0.36 79 6.84 6.00 4.08 3.72
39 0.72 0.48 0.48 0.36 80 7.08 6.24 4.20 3.96
40 0.72 0.48 0.48 0.36
* One-twelfth of the Renewal Commission on the portion of the initial face
amount or increase in face amount remaining in force each month is paid
monthly during the first two renewal years after issue or requested
increase. Age used is issue age of contract or, for increases in face
amount, attained age of the insured on the effective date of the
increase. Smkr. includes contracts with face amounts/increased face
amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes contracts with face amounts/increased face amounts having
premium class "Nonsmoker" or "Nonsmoker Special". Std. includes
contracts with face amounts/increased face amounts having premium class
"Standard" or "Standard Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
C. Renewal Commissions per $1,000* of Face Amount (Initial or Increase)
3. Spouse Insurance Benefit
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 0.36 0.24 49 1.68 1.20 0.84 0.72
17 0.36 0.24 50 1.68 1.20 0.96 0.72
18 0.36 0.24 51 1.92 1.32 0.96 0.72
19 0.36 0.24 52 1.92 1.32 0.96 0.84
20 0.48 0.24 0.24 0.24 53 2.16 1.56 1.08 0.84
21 0.48 0.24 0.24 0.24 54 2.16 1.56 1.08 0.84
22 0.48 0.36 0.24 0.24 55 2.40 1.68 1.20 0.96
23 0.48 0.36 0.24 0.24 56 2.52 1.80 1.20 0.96
24 0.48 0.36 0.24 0.24 57 2.64 1.92 1.32 1.08
25 0.48 0.36 0.36 0.24 58 2.76 2.04 1.32 1.08
26 0.48 0.36 0.36 0.24 59 3.00 2.28 1.44 1.20
27 0.48 0.36 0.36 0.24 60 3.12 2.40 1.44 1.32
28 0.60 0.36 0.36 0.24 61 3.24 2.52 1.56 1.32
29 0.60 0.36 0.36 0.24 62 3.60 2.76 1.68 1.44
30 0.60 0.36 0.36 0.24 63 3.72 2.88 1.68 1.56
31 0.60 0.36 0.36 0.24 64 3.84 3.00 1.80 1.56
32 0.60 0.48 0.36 0.36 65 4.20 3.24 1.92 1.68
33 0.72 0.48 0.48 0.36 66 4.32 3.48 2.04 1.80
34 0.72 0.48 0.48 0.36 67 4.56 3.60 2.16 1.92
35 0.72 0.48 0.48 0.36 68 4.92 3.96 2.28 2.16
36 0.72 0.48 0.48 0.36 69 5.16 4.20 2.52 2.16
37 0.84 0.48 0.48 0.36 70 5.40 4.44 2.64 2.40
38 0.84 0.48 0.48 0.36 71 5.76 4.80 2.76 2.52
39 0.84 0.60 0.48 0.36 72 6.12 5.04 3.00 2.76
40 0.96 0.60 0.60 0.48 73 6.36 5.28 3.12 2.88
41 0.96 0.72 0.60 0.48 74 6.84 5.76 3.48 3.24
42 1.08 0.72 0.60 0.48 75 7.44 6.36 3.84 3.60
43 1.20 0.72 0.60 0.48 76 7.80 6.72 4.08 3.84
44 1.20 0.84 0.72 0.48 77 8.16 6.96 4.32 4.08
45 1.32 0.84 0.72 0.60 78 8.52 7.32 4.56 4.32
46 1.32 0.96 0.72 0.60 79 8.76 7.68 4.80 4.56
47 1.44 0.96 0.84 0.60 80 9.12 8.04 5.04 4.80
48 1.56 1.08 0.84 0.60
* One-twelfth of the Renewal Commission on the portion of the initial rider
face amount or increase in rider face amount remaining in force each
month is paid monthly during the first two renewal years after issue of
the rider or increase of the rider. Age used is issue age of spouse or,
for increases in face amount, attained age of the spouse on the effective
date of the increase. Smkr. includes riders with face amounts/increased
face amounts having premium class "Smoker" or "Smoker Special"; Nsmkr.
includes riders with face amounts/increased face amounts/increased face
amounts having premium class "Nonsmoker" or "Nonsmoker Special". Std.
includes riders with face amounts/increased face amounts having premium
class "Standard" or "Standard Special".
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
D. Increase Commissions per $1,000* of Increase in Face Amount
1. Basic Contract - Highest Total Face Amount** Less Than $250,000
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.44 1.08 41 6.72 4.56 4.20 3.24
1 1.56 1.08 42 7.08 4.80 4.44 3.36
2 1.56 1.08 43 7.56 5.16 4.68 3.60
3 1.56 1.08 44 7.92 5.40 4.80 3.72
4 1.68 1.08 45 8.52 5.88 5.16 3.96
5 1.68 1.08 46 9.00 6.24 5.40 4.08
6 1.80 1.20 47 9.60 6.72 5.76 4.44
7 1.80 1.20 48 10.08 7.08 6.00 4.68
8 1.92 1.20 49 10.92 7.68 6.36 4.92
9 1.92 1.32 50 11.40 8.04 6.60 5.16
10 2.04 1.32 51 12.24 8.76 7.08 5.64
11 2.16 1.44 52 12.84 9.24 7.32 5.76
12 2.16 1.44 53 13.80 10.08 7.80 6.36
13 2.28 1.56 54 13.80 10.08 7.68 6.24
14 2.40 1.56 55 14.76 11.04 8.28 6.84
15 2.52 1.56 56 15.48 11.52 8.64 7.08
16 2.52 1.68 57 16.56 12.60 9.24 7.68
17 2.64 1.68 58 17.28 13.20 9.60 8.04
18 2.76 1.80 59 18.60 14.40 10.32 8.64
19 2.88 1.80 60 19.44 15.12 10.68 9.12
20 2.88 2.04 1.92 1.44 61 19.92 15.72 11.04 9.48
21 3.00 2.04 1.92 1.56 62 20.88 16.56 11.52 9.96
22 3.12 2.16 2.04 1.56 63 20.88 16.56 11.52 9.96
23 3.24 2.16 2.04 1.68 64 22.32 18.00 12.36 10.80
24 3.36 2.28 2.16 1.68 65 23.40 18.96 12.96 11.40
25 3.48 2.28 2.28 1.68 66 24.00 19.44 13.20 11.64
26 3.60 2.40 2.40 1.80 67 25.68 21.12 14.40 12.72
27 3.72 2.52 2.40 1.92 68 26.40 21.72 14.64 13.08
28 3.84 2.64 2.52 1.92 69 26.28 21.72 14.64 13.08
29 3.96 2.76 2.64 1.92 70 27.48 22.92 15.48 14.04
30 4.20 2.76 2.76 2.04 71 27.24 22.92 15.36 13.92
31 4.32 2.88 2.88 2.04 72 27.00 22.80 15.24 13.92
32 4.56 3.00 2.88 2.16 73 27.12 23.16 15.48 14.28
33 4.68 3.12 3.00 2.28 74 26.64 22.80 15.24 14.04
34 4.80 3.24 3.12 2.40 75 26.88 23.16 15.48 14.40
35 5.04 3.36 3.24 2.40 76 26.64 22.56 15.48 14.28
36 5.28 3.60 3.36 2.52 77 26.28 22.32 15.24 14.28
37 5.52 3.72 3.60 2.64 78 25.68 21.96 15.12 14.04
38 5.76 3.84 3.72 2.76 79 25.68 21.48 15.24 14.04
39 6.00 3.96 3.84 2.88 80 24.96 20.88 14.88 13.92
40 6.24 4.20 3.96 3.00
* One-twelfth of the Increase Commission on the portion of the increase
remaining in force each month is paid monthly for one year after the
effective date of the requested increase in face amount. Age used is
attained age of the insured on the effective date of the increase in face
amount. Smkr. includes increased face amounts with premium class
"Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts with
premium class "Nonsmoker" or "Nonsmoker Special". Std. includes
increased face amounts with premium class "Standard" or
"Standard "Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
D. Increase Commissions per $1,000* of Increase in Face Amount
2. Basic Contract - Highest Total Face Amount** More Than $249,999
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 1.20 0.84 41 5.52 3.72 3.36 2.52
1 1.20 0.84 42 5.76 3.84 3.60 2.64
2 1.20 0.84 43 6.12 4.20 3.72 2.88
3 1.32 0.84 44 6.48 4.32 3.84 3.00
4 1.32 0.96 45 6.96 4.80 4.20 3.12
5 1.44 0.96 46 7.20 5.04 4.32 3.36
6 1.44 0.96 47 7.80 5.52 4.56 3.60
7 1.44 0.96 48 8.16 5.76 4.80 3.72
8 1.56 0.96 49 8.88 6.24 5.04 3.96
9 1.56 1.08 50 9.24 6.60 5.28 4.20
10 1.68 1.08 51 9.96 7.20 5.64 4.56
11 1.68 1.08 52 10.20 7.32 5.76 4.56
12 1.80 1.20 53 10.92 7.92 6.12 4.92
13 1.92 1.20 54 11.04 8.16 6.24 5.04
14 1.92 1.20 55 11.88 8.88 6.60 5.40
15 2.04 1.32 56 12.12 9.12 6.72 5.52
16 2.04 1.32 57 12.96 9.84 7.20 6.00
17 2.16 1.44 58 13.20 10.08 7.32 6.00
18 2.16 1.44 59 14.16 10.92 7.80 6.60
19 2.28 1.44 60 14.40 11.16 7.80 6.72
20 2.40 1.56 1.56 1.20 61 15.48 12.24 8.52 7.32
21 2.40 1.68 1.56 1.20 62 15.72 12.48 8.64 7.44
22 2.52 1.68 1.68 1.20 63 16.56 13.08 9.00 7.80
23 2.64 1.68 1.68 1.32 64 17.16 13.80 9.48 8.28
24 2.64 1.80 1.80 1.32 65 18.00 14.52 9.96 8.76
25 2.76 1.92 1.80 1.44 66 18.36 14.88 10.08 8.88
26 2.88 1.92 1.92 1.44 67 19.68 16.08 10.92 9.72
27 3.00 2.04 1.92 1.44 68 20.04 16.44 11.04 9.96
28 3.12 2.04 2.04 1.56 69 20.40 16.80 11.28 10.08
29 3.24 2.16 2.16 1.56 70 21.12 17.64 11.88 10.68
30 3.36 2.28 2.16 1.68 71 21.48 18.00 12.00 10.92
31 3.48 2.28 2.28 1.68 72 21.72 18.36 12.24 11.16
32 3.60 2.40 2.40 1.68 73 22.44 19.08 12.84 11.76
33 3.84 2.52 2.40 1.80 74 22.68 19.44 12.96 12.00
34 3.96 2.64 2.52 1.92 75 22.80 19.56 13.08 12.12
35 4.08 2.76 2.64 1.92 76 21.96 18.96 12.60 11.76
36 4.32 2.88 2.76 2.04 77 21.36 18.60 12.48 11.52
37 4.44 3.00 2.88 2.16 78 20.76 18.12 12.12 11.28
38 4.68 3.12 3.00 2.16 79 19.92 17.52 11.76 11.04
39 4.80 3.24 3.12 2.28 80 18.96 16.80 11.28 10.56
40 5.04 3.36 3.24 2.40
* One-twelfth of the Increase Commission on the portion of the increase
remaining in force each month is paid monthly for one year after the
effective date of the requested increase in face amount. Age used is
attained age of the insured on the effective date of the increase in face
amount. Smkr. includes increased face amounts with premium class
"Smoker" or "Smoker Special"; Nsmkr. includes increased face amounts with
premium class "Nonsmoker" or "Nonsmoker Special". Std. includes
increased face amounts with premium class "Standard" or
"Standard Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
E. Cost of Living Increase Commissions per $1,000* of
Increase in Face Amount
1. Highest Total Face Amount** Less Than $250,000
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.48 0.36 41 2.16 1.44 1.32 1.08
1 0.48 0.36 42 2.28 1.56 1.44 1.08
2 0.48 0.36 43 2.40 1.68 1.44 1.08
3 0.48 0.36 44 2.52 1.68 1.56 1.20
4 0.48 0.36 45 2.76 1.92 1.68 1.32
5 0.60 0.36 46 2.88 2.04 1.68 1.32
6 0.60 0.36 47 3.12 2.16 1.80 1.44
7 0.60 0.36 48 3.24 2.28 1.92 1.44
8 0.60 0.36 49 3.48 2.40 2.04 1.56
9 0.60 0.36 50 3.60 2.52 2.16 1.68
10 0.72 0.48 51 3.96 2.76 2.28 1.80
11 0.72 0.48 52 4.08 3.00 2.28 1.80
12 0.72 0.48 53 4.44 3.24 2.52 2.04
13 0.72 0.48 54 4.56 3.36 2.52 2.04
14 0.72 0.48 55 4.92 3.72 2.76 2.28
15 0.84 0.48 56 5.16 3.84 2.88 2.40
16 0.84 0.48 57 5.52 4.20 3.12 2.52
17 0.84 0.60 58 5.76 4.44 3.24 2.64
18 0.84 0.60 59 6.24 4.80 3.48 2.88
19 0.96 0.60 60 6.48 5.04 3.60 3.00
20 0.96 0.60 0.60 0.48 61 6.96 5.52 3.84 3.24
21 0.96 0.72 0.60 0.48 62 7.32 5.76 3.96 3.48
22 0.96 0.72 0.60 0.48 63 7.68 6.12 4.20 3.60
23 1.08 0.72 0.72 0.48 64 8.16 6.60 4.56 3.96
24 1.08 0.72 0.72 0.60 65 8.52 6.96 4.68 4.20
25 1.08 0.72 0.72 0.60 66 9.00 7.32 4.92 4.32
26 1.08 0.72 0.72 0.60 67 9.60 7.92 5.40 4.80
27 1.20 0.84 0.72 0.60 68 10.08 8.40 5.64 5.04
28 1.20 0.84 0.84 0.60 69 10.68 8.88 5.88 5.28
29 1.32 0.84 0.84 0.60 70 11.40 9.60 6.48 5.88
30 1.32 0.84 0.84 0.60 71 12.00 10.08 6.72 6.12
31 1.44 0.96 0.96 0.72 72 12.60 10.68 7.08 6.48
32 1.44 0.96 0.96 0.72 73 13.56 11.52 7.80 7.20
33 1.44 0.96 0.96 0.72 74 14.28 12.24 8.16 7.56
34 1.56 1.08 0.96 0.72 75 15.00 12.84 8.64 7.92
35 1.68 1.08 1.08 0.72 76 15.72 13.56 9.12 8.40
36 1.68 1.08 1.08 0.84 77 16.44 14.28 9.60 8.88
37 1.80 1.20 1.08 0.84 78 17.16 15.00 10.08 9.36
38 1.80 1.20 1.20 0.84 79 17.88 15.72 10.56 9.96
39 1.92 1.32 1.20 0.96 80 18.72 16.56 11.16 10.44
40 2.04 1.32 1.32 0.96
* One-twelfth of the Cost of Living Increase Commission on the portion of
the increase remaining in force each month is paid monthly for one year
after the effective date of the increase. Age used is attained age of
the insured on the effective date of the increase in face amount. Smkr.
includes increased face amounts with premium class "Smoker" or
"Smoker Special"; Nsmkr. includes increased face amounts with premium
class "Nonsmoker" or "Nonsmoker Special". Std. includes increased face
amounts with premium class "Standard" or "Standard Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
Please note: A COLA increase alone will not trigger a change to the
next higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
E. Cost of Living Increase Commissions per $1,000* of
Increase in Face Amount
2. Highest Total Face Amount** More Than $249,999
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.48 0.36 41 2.04 1.44 1.32 0.96
1 0.48 0.36 42 2.16 1.44 1.32 0.96
2 0.48 0.36 43 2.28 1.56 1.44 1.08
3 0.48 0.36 44 2.40 1.68 1.44 1.08
4 0.48 0.36 45 2.64 1.80 1.56 1.20
5 0.48 0.36 46 2.76 1.92 1.68 1.20
6 0.60 0.36 47 2.88 2.04 1.68 1.32
7 0.60 0.36 48 3.12 2.16 1.80 1.44
8 0.60 0.36 49 3.36 2.40 1.92 1.44
9 0.60 0.36 50 3.48 2.52 2.04 1.56
10 0.60 0.36 51 3.72 2.64 2.16 1.68
11 0.60 0.36 52 3.96 2.76 2.16 1.80
12 0.72 0.48 53 4.20 3.12 2.40 1.92
13 0.72 0.48 54 4.32 3.24 2.40 2.04
14 0.72 0.48 55 4.68 3.48 2.64 2.16
15 0.72 0.48 56 4.92 3.72 2.76 2.28
16 0.72 0.48 57 5.28 3.96 2.88 2.40
17 0.84 0.48 58 5.52 4.20 3.00 2.52
18 0.84 0.60 59 5.88 4.56 3.24 2.76
19 0.84 0.60 60 6.24 4.80 3.36 2.88
20 0.84 0.60 0.60 0.48 61 6.60 5.28 3.60 3.12
21 0.96 0.60 0.60 0.48 62 6.96 5.52 3.84 3.24
22 0.96 0.60 0.60 0.48 63 7.32 5.76 3.96 3.48
23 0.96 0.60 0.60 0.48 64 7.80 6.24 4.32 3.72
24 0.96 0.72 0.72 0.48 65 8.16 6.60 4.56 3.96
25 1.08 0.72 0.72 0.48 66 8.64 6.96 4.68 4.20
26 1.08 0.72 0.72 0.60 67 9.24 7.56 5.16 4.56
27 1.08 0.72 0.72 0.60 68 9.72 7.92 5.40 4.80
28 1.20 0.72 0.72 0.60 69 10.20 8.40 5.64 5.04
29 1.20 0.84 0.84 0.60 70 10.92 9.12 6.12 5.52
30 1.32 0.84 0.84 0.60 71 11.52 9.60 6.48 5.88
31 1.32 0.84 0.84 0.60 72 12.12 10.20 6.72 6.12
32 1.32 0.96 0.84 0.60 73 12.96 11.04 7.44 6.84
33 1.44 0.96 0.96 0.72 74 13.56 11.64 7.80 7.20
34 1.44 0.96 0.96 0.72 75 14.28 12.24 8.16 7.56
35 1.56 1.08 0.96 0.72 76 15.00 12.96 8.64 8.04
36 1.56 1.08 1.08 0.72 77 15.60 13.56 9.12 8.52
37 1.68 1.08 1.08 0.84 78 16.32 14.28 9.60 8.88
38 1.80 1.20 1.08 0.84 79 17.04 15.00 10.08 9.36
39 1.80 1.20 1.20 0.84 80 17.88 15.72 10.56 9.96
40 1.92 1.32 1.20 0.96
* One-twelfth of the Cost of Living Increase Commission on the portion of
the increase remaining in force each month is paid monthly for one year
after the effective date of the increase. Age used is attained age of
the insured on the effective date of the increase in face amount. Smkr.
includes increased face amounts with premium class "Smoker" or
"Smoker Special"; Nsmkr. includes increased face amounts with premium
class "Nonsmoker" or "Nonsmoker Special". Std. includes increased face
amounts with premium class "Standard" or "Standard Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a Requested Increase.
Please note: A COLA increase alone will not trigger a change to the
next higher band.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VII. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
F. Riders Increased/Issued After Basic Contract
Spouse Insurance Benefit Commissions per $1,000* of Face Amount
<TABLE>
Male Female Male Female
Std./ Std./ Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 2.52 1.56 49 11.16 7.68 5.88 4.56
17 2.64 1.56 50 11.64 8.04 6.12 4.80
18 2.76 1.68 51 12.60 8.76 6.48 5.16
19 2.76 1.68 52 13.20 9.24 6.72 5.40
20 2.88 1.92 1.80 1.32 53 14.16 10.08 7.08 5.76
21 3.00 1.92 1.80 1.44 54 14.16 10.20 7.08 5.76
22 3.00 2.04 1.92 1.44 55 15.24 11.04 7.56 6.12
23 3.12 2.04 1.92 1.44 56 15.96 11.64 7.80 6.48
24 3.24 2.16 1.92 1.56 57 17.28 12.72 8.28 6.96
25 3.36 2.16 2.04 1.56 58 18.00 13.32 8.64 7.20
26 3.48 2.28 2.16 1.68 59 19.44 14.64 9.12 7.68
27 3.60 2.40 2.16 1.68 60 20.28 15.36 9.48 8.16
28 3.72 2.40 2.28 1.80 61 20.28 15.48 9.48 8.16
29 3.84 2.52 2.40 1.80 62 21.72 16.80 10.20 8.88
30 4.08 2.64 2.52 1.92 63 21.72 16.80 10.20 8.88
31 4.20 2.76 2.64 1.92 64 22.68 17.76 10.68 9.36
32 4.44 2.88 2.76 2.04 65 24.36 19.20 11.52 10.20
33 4.56 2.88 2.88 2.04 66 24.96 19.80 11.76 10.44
34 4.68 3.00 2.88 2.16 67 26.04 20.76 12.36 11.04
35 4.92 3.12 3.00 2.28 68 27.36 22.08 12.96 11.76
36 5.16 3.36 3.12 2.28 69 27.24 22.08 12.96 11.76
37 5.40 3.48 3.24 2.40 70 27.72 22.56 13.32 12.12
38 5.64 3.60 3.36 2.52 71 28.20 23.28 13.68 12.48
39 6.00 3.84 3.60 2.76 72 27.84 23.04 13.68 12.48
40 6.36 4.08 3.72 2.88 73 27.36 22.80 13.56 12.48
41 6.84 4.56 3.96 3.00 74 27.60 23.28 13.92 12.84
42 7.08 4.68 4.08 3.12 75 28.68 24.48 14.64 13.68
43 7.68 5.16 4.32 3.36 76 28.32 24.36 14.64 13.80
44 8.04 5.40 4.56 3.48 77 27.84 24.00 14.64 13.80
45 8.64 5.76 4.80 3.72 78 27.24 23.52 14.52 13.68
46 9.12 6.12 5.04 3.84 79 27.12 23.52 14.52 13.68
47 9.84 6.60 5.28 4.08 80 26.16 22.92 14.40 13.56
48 10.32 6.96 5.52 4.32
* One-twelfth of the Spouse Insurance Benefit Commission on the portion of
the rider face amount remaining in force each month is paid monthly for
one year after the effective date on increases in face amount of the
rider and on riders issued after the basic contract. Age used is issue
age of the spouse or, for increases in face amount, attained age of the
spouse on the effective date of the increase. Smkr. includes riders with
face amounts/increased face amounts having premium class "Smoker" or
"Smoker Special"; Nsmkr. includes riders with face amounts/increased face
amounts having premium class "Nonsmoker" or "Nonsmoker Special". Std.
includes riders with face amounts/increased face amounts having premium
class "Standard" or "Standard Special".
CHILD INSURANCE BENEFIT COMMISSION PER $1,000 OF FACE AMOUNT
Commission is $2.76 per $1,000. One-twelfth of
the commission is paid monthly.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
VIII. ANNUITY CONTRACTS
A. SINGLE PREMIUM ANNUITY CONTRACTS
First Year Renewal
Commission Commissions
---------- -----------
1. Single Premium Immediate Annuity
a. Life Annuity 2.50% None
b. Fixed Period Installment Annuity
Tier One
(Fixed period: 5-9 yrs.) 1.00% None
Tier Two
(Fixed period: 10-14 yrs.) 1.75 None
Tier Three (Fixed
period: 15 or more yrs.) 2.50 None
2. Single Premium Deferred Annuity 3.00% None
The commission is a percentage of the single premium paid and
credited to the contract.
B. FLEXIBLE PREMIUM DEFERRED ANNUITY '89 CONTRACTS
VARIABLE ANNUITY CONTRACTS
Qualified (other than TSA) and Non-qualified
CONTRACT YEAR 1 SUCCEEDING YEARS
=============== ================
First Year Service
Commission Commission
---------- ----------
3% 3%
The commission is a percentage of all premium paid and credited to
the contract whenever paid and credited.
C. FLEXIBLE PREMIUM DEFERRED ANNUITY CONTRACTS -- TSA QUALIFIED
PRE-FPA '89 QUALIFIED
1. On Rollover Premium
3% of any premiums paid to and credited by the Society which are
transfers of distribution from other tax-qualified plans
(Rollover Premium).
2. On premiums not in excess of the Stipulated Annual Premium or
the premium paid during the first contract year, whichever is
less (excluding Rollover Premium).
CONTRACT YEAR 1 SUCCEEDING YEARS
=============== ==============================
1st Year Renewal Service
Age* Commission Commission Commission
--- ----------- ---------- ----------
0-59 6 Continuous at 1% 1%
60 and up 3 Continuous at 1% 1%
3. On premiums in excess of the Stipulated Annual Premium or the
premium paid in the first contract year, whichever is less
(excluding Rollover Premium).
CONTRACT YEAR 1 SUCCEEDING YEARS
======================== =========================
Special
Renewal Service Service Service
Age* Commission Commission Commission Commission**
--- ---------- ---------- ---------- ----------
0-59 1% 1% 2% 6%
60 and up 1 1 2 3
D. FLEXIBLE PREMIUM DEFERRED ANNUITY CONTRACTS -- NONQUALIFIED
(PRE-FPA '89)
1. On premiums not in excess of the Stipulated Annual Premium or
the premium paid during the first contract year, whichever is
less.
CONTRACT YEAR 1 SUCCEEDING YEARS
=============== ================
1st Year Service
Age* Commission Commission
--- ---------- ----------
0-59 3% 3%
60 and up 3 2
2. On premiums in excess of the Stipulated Annual Premium or the
premium paid in the first contract year, whichever is less.
CONTRACT YEAR 1 SUCCEEDING YEARS
=============== ===============================
Service Service Special Service
Age* Commission Commission Commission**
--- ---------- ---------- ----------
0-59 3% 3% 3%
60 and up 2 2% 3%
* Age of annuitant on contract anniversary prior to date of premium
payment for Service Commission. Age at issue for Renewal
Commission and 1st year Commission.
** Paid in lieu of any other Service Commission on premium paid to
and credited by the Society in a renewal contract year in excess
of the highest total premium paid in any prior contract year.
The total premium paid in the first contract year is the lesser
of the Stipulated Annual Premium and the premiums paid in that
year. Rollover premium is excluded from consideration in all
contract years.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IX. HEALTH INSURANCE
Commissions are a percentage of the premium due and payable on the
coverage during each year (excluding any extra premium paid for
aviation or temporary extra premium).
A. Health Contracts
Disability Income and BOE (1988 Series)
1st - 4th Continuous
Level Premium First Renewal Renewals
Contracts: DI/BOE Year Commission Thereafter
------------------ ---- ---------- ----------
Noncancellable - DI/BOE
Occ Classes 4A, 5A 50 10 3
Occ Classes 1A*, 2A, 3A 45 8 3
Guaranteed Renewable - DI/BOE
Occ Classes 4A, 5A 45 10 3
Occ Classes 1A*, 2A, 3A 40 8 3
*BOE available for Occ. Class 2A through 5A only.
Renewal Continuous
Step Rate First Commission Commission Renewals
Contracts: DI Year Until Step At Step Thereafter
-------------- ---- ---------- ------- ----------
Noncancellable-
All Classes 45 3 35** 3
Guaranteed Renewable-
All Classes 40 3 35** 3
** The commission at the step and the renewal commissions thereafter
are paid to the DR assigned at the time of the step.
<PAGE>
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INTENTIONALLY BLANK
<PAGE>
THIS PAGE IS
INTENTIONALLY BLANK
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IX. HEALTH INSURANCE
Surrender Value:
Combined DI Contract and SV Rider
---------------------------------
Commissions for the SV product are calculated using Level Premium
Commission rates for the base contract and at least a 3% commission
rate for the surrender value rider. Blended commission rates are
listed below.
<TABLE>
Occ. Class 4A,5A Occ. Class 1A,2A,3A
================ ===================
1st-4th 1st-4th
First Year Renewal First Year Renewal
---------- ------- ---------- -------
Issue
Age NC GR NC&GR NC GR NC&GR
--- -- -- ----- -- -- -----
<S> <C> <C> <C> <C> <C> <C>
18-26 37 33 8 33 30 7
27 36 33 8 33 29 7
28 36 32 8 32 29 7
29 35 32 8 32 28 7
30 35 31 8 31 28 7
31 34 31 8 31 28 7
32 34 31 8 31 27 7
33 34 30 8 30 27 7
34 33 30 8 30 27 7
35 33 30 8 30 27 7
36 32 29 8 29 26 7
37 32 29 8 29 26 6
38 31 28 8 28 25 6
39 31 28 8 28 25 6
40 30 27 7 27 24 6
41 29 27 7 27 24 6
42 28 26 7 26 23 6
43 28 25 7 25 23 6
44 27 24 7 24 22 6
45 26 23 7 23 21 6
46 25 23 7 23 20 6
47 24 22 6 22 20 6
48 23 21 6 21 19 6
49 22 20 6 20 18 5
50 21 19 6 19 17 5
51 20 18 6 18 16 5
52 19 17 6 17 16 5
53 18 17 6 17 15 5
54 17 16 6 16 14 5
55 17 15 5 15 14 5
Renewals thereafter are continuous at 3%.
NC = Noncancellable Disability Income
GR = Guaranteed Renewable Disability Income
SV = Surrender Value
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
IX. HEALTH INSURANCE
CONTRACT YEAR 1 RENEWAL YEARS
=============== =============================
Continuous***
1st Renewal
First Year Renewal Commissions
Commission Commission Thereafter
---------- ---------- -----------
Disability Income (1980 Series)
Noncancellable -
Occ. Classes 4A,5A 50% l7% 5%
Occ. Classes 3A,2A 45 17 5
Guaranteed Renewable
Occ. Classes 2A,1A 40 10 4
Business Overhead (1980 Series) 45 17 5
Long Term Care (1992 Series)* 35** 5 3
Long Term Care (1990 Series)* 35** 5 5***
Long Term Care (1987 Series) 35 5 5***
Family Hospital
Issue Ages 60 and Under 40 10 4
Issue Age 61 35 10 4
Issue Age 62 30 10 4
Issue Age 63 25 10 4
Issue Age 64 20 10 4
MagniMed
Issue Ages 60 and Under 15 None 7
Issue Age 61 13 None 7
Issue Age 62 11 None 7
Issue Age 63 9 None 7
Issue Age 64 7 None 7
MagniMed ElectaCare
Issue Ages 60 and Under 20 None 5
Issue Age 61 18 None 5
Issue Age 62 15 None 5
Issue Age 63 12 None 5
Issue Age 64 9 None 5
InterMed 15 None None
InterMed ElectaCare 15 None None
SuppliMed - 83 Series 15 None 5
SupliMed, SuppliMed Plus,
and SuppliMed Premiere 20 None 3
* State variations are given in the Amendment section at the end of
this Schedule.
** The Long Term Care (1992 and 1990 Series) First Year Commission Rate
for issue ages higher than 70 reduces 1% per year until it reaches 21%
at issue age 84. (The first year commission percent = 35-(Issue
Age - 70) for issue ages higher than 70.)
*** Exception: Renewal commissions for Long Term Care (1987 and 1990
Series) are paid through renewal year 4; zero thereafter.
B. Health Insurance Riders
The First Year, Renewal and Service Commission rates for any Health
Insurance riders, except the Maternity Benefit rider, attached to a
Health Insurance contract will be the same as the corresponding
commission rates for the Health Insurance contract. No commission
is paid on the Maternity Benefit rider.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT I
X. SUPPLEMENTAL BENEFITS
Commission rates for supplemental benefits issued with the basic
contract will be the same as the corresponding commission rates for
the basic contract.
Commission rates for supplemental benefits issued after the basic
contract will be determined by the Society.
XI. SETTLEMENT OPTIONS
The commission is a percentage of the proceeds applied under one of
the following Income Settlement Options.
First Year
Commission
----------
A. Current Life Income Settlement Options 2.50%
B. Non-withdrawable Fixed Period Settlement Options
Tier One (Fixed period: 5 through 9 yrs.) 1.00%
Tier Two (Fixed period: 10 through 14 yrs.) 1.75
Tier Three (Fixed period: 15 or more yrs.) 2.50
No commission is payable on amounts left on Deposit or on amounts
applied under withdrawable Fixed Amount or Fixed Period Settlement
Options.
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
I. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES II
A. Basic Contract* - Highest Total Face Amount** Less Than $250,000
<TABLE>
Issue Male Female Issue Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 3.00 3.00 38 9.60 7.80 7.56 6.60
1 3.00 3.00 39 10.20 8.16 8.04 7.08
2 3.00 3.00 40 10.80 8.64 8.52 7.44
3 3.00 3.00 41 11.76 9.24 9.24 7.80
4 3.00 3.00 42 12.84 9.84 9.84 8.28
5 3.00 3.00 43 13.80 10.56 10.56 8.64
6 3.00 3.00 44 14.88 11.16 11.16 9.12
7 3.00 3.00 45 15.84 11.76 11.88 9.48
8 3.00 3.00 46 17.04 12.60 12.72 10.08
9 3.00 3.00 47 18.36 13.44 13.56 10.68
10 3.00 3.00 48 19.56 14.40 14.28 11.40
11 3.12 3.00 49 20.88 15.24 15.12 12.00
12 3.24 3.00 50 22.08 16.08 15.96 12.60
13 3.24 3.12 51 23.76 17.40 17.16 13.56
14 3.36 3.12 52 25.44 18.72 18.36 14.52
15 3.48 3.12 53 27.24 19.92 19.56 15.60
16 3.72 3.12 54 28.92 21.24 20.76 16.56
17 3.84 3.24 55 30.60 22.56 21.96 17.52
18 4.08 3.24 56 32.76 24.36 23.52 18.96
19 4.20 3.36 57 34.92 26.28 25.20 20.28
20 4.44 3.96 3.36 3.00 58 37.50 28.08 26.76 21.72
21 4.56 4.08 3.48 3.12 59 39.36 30.00 28.44 23.04
22 4.80 4.20 3.72 3.36 60 41.52 31.80 30.00 24.48
23 4.92 4.44 3.84 3.48 61 43.92 34.20 32.28 26.88
24 5.16 4.56 4.08 3.72 62 46.32 36.60 34.68 29.16
25 5.28 4.68 4.20 3.84 63 48.84 39.00 36.96 31.56
26 5.52 4.80 4.32 3.96 64 51.24 41.40 39.36 33.84
27 5.76 5.04 4.44 4.08 65 53.64 43.80 41.64 36.24
28 5.88 5.16 4.68 4.20 66 56.76 47.16 44.04 38.76
29 6.12 5.40 4.80 4.32 67 59.76 50.52 46.32 41.28
30 6.36 5.52 4.92 4.44 68 62.88 53.88 48.72 43.68
31 6.60 5.76 5.16 4.68 69 65.88 57.24 51.00 46.20
32 6.84 5.88 5.40 4.80 70 69.00 60.60 53.40 48.72
33 7.20 6.12 5.52 5.04 71 73.20 64.92 56.40 51.84
34 7.44 6.24 5.76 5.16 72 77.40 69.36 59.40 55.08
35 7.68 6.48 6.00 5.40 73 81.60 73.68 62.52 58.20
36 8.28 6.96 6.48 5.76 74 85.80 78.12 65.52 61.44
37 8.88 7.32 6.96 6.24 75 90.00 82.44 68.52 64.56
* Smkr. includes premium class "Smoker" and "Smoker Special"; Nsmkr.
includes premium class "Nonsmoker" and "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a requested increase.
Add $31.56 per contract to cover the monthly expense.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
I. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE - SERIES II
B. Basic Contract* - Highest Total Face Amount** More Than $249,999
<TABLE>
Issue Male Female Issue Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
============================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 2.88 2.40 46 13.20 9.72 9.84 7.80
17 3.00 2.52 47 14.16 10.44 10.44 8.28
18 3.24 2.52 48 15.12 11.16 11.04 8.88
19 3.24 2.64 49 16.08 11.76 11.64 9.24
20 3.48 3.12 2.64 2.40 50 17.04 12.48 12.36 9.72
21 3.60 3.24 2.76 2.40 51 18.36 13.44 13.20 10.44
22 3.72 3.24 2.88 2.64 52 19.68 14.40 14.16 11.28
23 3.84 3.48 3.00 2.76 53 21.00 15.36 15.12 12.00
24 4.08 3.60 3.24 2.88 54 22.32 16.44 16.08 12.84
25 4.08 3.60 3.24 3.00 55 23.64 17.40 16.92 13.56
26 4.32 3.72 3.36 3.12 56 25.32 18.84 18.12 14.64
27 4.44 3.96 3.48 3.24 57 27.00 20.28 19.44 15.72
28 4.56 4.08 3.60 3.24 58 28.68 21.72 20.64 16.80
29 4.80 4.20 3.72 3.36 59 30.36 23.16 21.96 17.76
30 4.92 4.32 3.84 3.48 60 32.04 24.60 23.16 18.96
31 5.16 4.44 4.08 3.60 61 33.96 26.40 24.96 20.76
32 5.28 4.56 4.20 3.72 62 35.76 28.32 26.88 22.56
33 5.64 4.80 4.32 3.96 63 37.80 30.24 28.56 24.48
34 5.76 4.80 4.44 4.08 64 39.36 31.80 30.24 26.04
35 6.00 5.04 4.68 4.20 65 41.52 33.96 32.28 28.08
36 6.48 5.40 5.04 4.44 66 43.68 36.24 33.84 29.88
37 6.84 5.64 5.40 4.80 67 45.96 38.88 35.64 31.80
38 7.44 6.00 5.88 5.16 68 48.84 41.76 37.80 33.96
39 7.92 6.36 6.24 5.52 69 50.28 43.80 39.00 35.28
40 8.40 6.72 6.60 5.76 70 52.68 46.32 40.80 37.20
41 9.12 7.20 7.20 6.00 71 57.00 50.52 43.92 40.32
42 9.96 7.68 7.68 6.48 72 59.28 53.04 45.48 42.12
43 10.68 8.16 8.16 6.72 73 62.52 56.52 47.88 44.64
44 11.52 8.64 8.64 7.08 74 65.88 60.00 50.28 47.16
45 12.24 9.12 9.24 7.32 75 69.12 63.36 52.68 49.68
* Smkr. includes premium class "Smoker" and "Smoker Special"; Nsmkr.
includes premium class "Nonsmoker" and "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a requested increase.
Add $31.56 per contract to cover the monthly expense.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
II. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV AND JUVENILE-ISSUE
A. Basic Contract* - Highest Total Face Amount** of
Series III and IV Less Than $250,000
(No limit on face amount of Juvenile-Issue Contract)
<TABLE>
Issue Male Female Issue Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 2.52 2.52 41 11.76 9.24 9.24 7.80
1 2.52 2.52 42 12.72 9.84 9.84 8.28
2 2.52 2.52 43 13.68 10.56 10.56 8.64
3 2.52 2.52 44 14.88 11.16 11.16 9.12
4 2.52 2.52 45 15.84 11.76 11.88 9.48
5 2.52 2.52 46 17.04 12.60 12.72 10.08
6 2.52 2.52 47 18.12 13.44 13.56 10.68
7 2.52 2.52 48 19.20 14.40 14.28 11.40
8 2.52 2.52 49 20.40 15.24 15.12 12.00
9 2.52 2.52 50 21.72 16.08 15.96 12.60
10 2.52 2.52 51 23.28 17.04 17.16 13.56
11 2.64 2.52 52 24.96 18.00 18.36 14.52
12 2.76 2.52 53 26.76 19.20 19.56 15.60
13 2.88 2.64 54 28.92 20.40 20.76 16.56
14 3.12 2.76 55 30.60 21.84 21.96 17.52
15 3.36 2.88 56 32.76 23.40 23.52 18.96
16 3.60 3.00 57 34.92 25.08 25.20 20.28
17 3.84 3.12 58 37.20 27.12 26.76 21.72
18 4.08 3.24 59 39.36 29.28 28.44 23.04
19 4.20 3.36 60 41.52 31.80 30.00 24.48
20 4.44 3.96 3.36 3.00 61 43.92 34.20 32.28 26.88
21 4.56 4.08 3.48 3.12 62 46.32 36.60 34.68 29.16
22 4.80 4.20 3.72 3.36 63 48.84 39.00 36.96 31.56
23 4.92 4.44 3.84 3.48 64 51.24 41.40 39.36 33.84
24 5.16 4.56 4.08 3.72 65 53.64 43.80 41.64 36.24
25 5.28 4.68 4.20 3.84 66 56.76 47.16 44.04 38.76
26 5.52 4.80 4.32 3.96 67 59.76 50.52 46.32 41.28
27 5.76 5.04 4.44 4.08 68 62.88 53.88 48.72 43.68
28 5.88 5.16 4.68 4.20 69 65.88 57.24 51.00 46.20
29 6.12 5.40 4.80 4.32 70 69.00 60.60 53.40 48.72
30 6.36 5.52 4.92 4.44 71 73.20 64.92 56.40 51.84
31 6.60 5.76 5.16 4.68 72 77.40 69.36 59.40 55.08
32 6.84 5.88 5.40 4.80 73 81.60 73.68 62.52 58.20
33 7.20 6.12 5.52 5.04 74 85.80 78.12 65.52 61.44
34 7.44 6.24 5.76 5.16 75 90.00 82.44 68.52 64.56
35 7.68 6.48 6.00 5.40 76 94.20 86.88 71.64 67.80
36 8.28 6.96 6.48 5.76 77 98.40 91.20 74.64 70.92
37 8.88 7.32 6.96 6.24 78 102.60 95.64 77.64 74.16
38 9.60 7.80 7.56 6.60 79 106.80 99.96 80.64 77.28
39 10.20 8.16 8.04 7.08 80 111.00 104.28 83.64 80.40
40 10.80 8.64 8.52 7.44
* Smkr. includes premium class "Smoker" and "Smoker Special"; Nsmkr.
includes premium class "Nonsmoker" and "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a requested increase.
Add $22.08 per Juvenile-Issue contract and $28.32 per "Series III or IV"
contract to cover the monthly administrative charge.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
II. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
B. Basic Contract* - Highest Total Face Amount** More
Than $249,999 and Less Than $500,000
<TABLE>
Issue Male Female Issue Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 3.48 3.12 2.64 2.40 51 18.00 13.32 13.20 10.44
21 3.60 3.24 2.76 2.40 52 19.32 14.04 14.16 11.28
22 3.72 3.24 2.88 2.64 53 20.76 14.88 15.12 12.00
23 3.84 3.48 3.00 2.76 54 22.20 15.84 16.08 12.84
24 4.08 3.60 3.24 2.88 55 23.64 16.92 16.92 13.56
25 4.08 3.60 3.24 3.00 56 25.32 18.24 18.12 14.64
26 4.32 3.72 3.36 3.12 57 27.00 20.28 19.44 15.72
27 4.44 3.96 3.48 3.24 58 28.68 21.72 20.64 16.80
28 4.56 4.08 3.60 3.24 59 30.36 22.92 21.96 17.76
29 4.80 4.20 3.72 3.36 60 32.04 24.60 23.16 18.96
30 4.92 4.32 3.84 3.48 61 33.96 26.40 24.96 20.76
31 5.16 4.44 4.08 3.60 62 35.76 28.32 26.88 22.56
32 5.28 4.56 4.20 3.72 63 37.80 30.24 28.56 24.48
33 5.64 4.80 4.32 3.96 64 39.36 31.80 30.24 26.04
34 5.76 4.80 4.44 4.08 65 41.52 33.96 32.28 28.08
35 6.00 5.04 4.68 4.20 66 43.68 36.24 33.84 29.88
36 6.48 5.40 5.04 4.44 67 45.96 38.88 35.64 31.80
37 6.84 5.64 5.40 4.80 68 48.84 41.76 37.80 33.96
38 7.44 6.00 5.88 5.16 69 50.28 43.80 39.00 35.28
39 7.92 6.36 6.24 5.52 70 52.68 46.32 40.80 37.20
40 8.40 6.72 6.60 5.76 71 57.00 50.52 43.92 40.32
41 9.12 7.20 7.20 6.00 72 59.28 53.04 45.48 42.12
42 9.96 7.68 7.68 6.48 73 62.52 56.52 47.88 44.64
43 10.68 8.16 8.16 6.72 74 65.88 60.00 50.28 47.16
44 11.52 8.64 8.64 7.08 75 69.12 63.36 52.68 49.68
45 12.24 9.12 9.24 7.32 76 72.48 66.84 55.08 52.20
46 13.08 9.72 9.84 7.80 77 75.72 70.20 57.48 54.72
47 13.92 10.44 10.44 8.28 78 79.08 73.68 59.88 57.24
48 14.88 11.16 11.04 8.88 79 82.32 77.04 62.28 59.76
49 15.84 11.76 11.64 9.24 80 85.56 80.40 64.56 62.16
50 16.80 12.48 12.36 9.72
* Smkr. includes premium class "Smoker" and "Smoker Special"; Nsmkr.
includes premium class "Nonsmoker" and "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a requested increase.
Add $28.32 per contract to cover the monthly administrative charge.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
II. FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III AND IV
C. Basic Contract* - Highest Total Face Amount** More Than $499,999
<TABLE>
Issue Male Female Issue Male Female
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
20 2.64 2.16 1.80 1.56 51 12.24 9.00 9.00 7.08
21 2.64 2.28 1.92 1.68 52 13.20 9.60 9.60 7.68
22 2.64 2.40 2.04 1.80 53 14.16 10.20 10.20 8.16
23 2.64 2.40 2.16 1.92 54 15.24 10.92 10.92 8.76
24 2.76 2.52 2.28 2.04 55 16.32 11.64 11.64 9.36
25 2.76 2.52 2.28 2.04 56 17.52 12.60 12.48 10.08
26 2.88 2.64 2.40 2.16 57 18.72 13.68 13.32 10.80
27 3.00 2.76 2.52 2.28 58 20.04 14.88 14.28 11.52
28 3.12 2.76 2.52 2.28 59 21.36 16.08 15.36 12.36
29 3.24 2.88 2.64 2.40 60 22.56 17.28 16.32 13.32
30 3.36 2.88 2.64 2.40 61 23.88 18.60 17.52 14.52
31 3.48 3.00 2.76 2.52 62 25.20 19.80 18.84 15.84
32 3.60 3.12 2.88 2.64 63 26.52 21.12 20.16 17.16
33 3.72 3.12 2.88 2.64 64 27.96 22.56 21.48 18.60
34 3.96 3.24 3.00 2.76 65 29.40 24.00 22.80 19.92
35 4.08 3.36 3.12 2.88 66 30.96 25.68 24.12 21.24
36 4.32 3.60 3.36 3.12 67 32.40 27.36 25.20 22.56
37 4.68 3.84 3.60 3.36 68 34.08 29.28 26.52 23.88
38 4.92 4.08 3.84 3.60 69 36.00 31.20 27.96 25.32
39 5.28 4.32 4.20 3.84 70 38.16 33.60 29.52 27.00
40 5.64 4.56 4.44 3.96 71 40.68 36.24 31.44 28.92
41 6.12 4.92 4.80 4.20 72 43.56 39.24 33.48 31.08
42 6.60 5.16 5.16 4.32 73 46.80 42.48 35.88 33.48
43 7.20 5.52 5.52 4.56 74 50.52 46.20 38.64 36.24
44 7.80 5.76 6.00 4.80 75 54.72 50.16 41.64 39.24
45 8.28 6.12 6.24 4.92 76 58.08 53.52 44.16 41.76
46 8.88 6.60 6.72 5.28 77 61.44 56.88 46.56 44.16
47 9.36 6.96 7.08 5.52 78 64.68 60.12 48.96 46.68
48 9.96 7.44 7.44 5.88 79 68.04 63.48 51.36 49.08
49 10.56 7.92 7.92 6.24 80 71.28 66.72 53.76 51.48
50 11.28 8.40 8.40 6.60
* Smkr. includes premium class "Smoker" and "Smoker Special"; Nsmkr.
includes premium class "Nonsmoker" and "Nonsmoker Special".
** The Highest Total Face Amount is the greater of 1) the Initial Face
Amount or 2) the Total Face Amount after a requested increase.
Add $28.32 per contract to cover the monthly administrative charge.
</TABLE>
<PAGE>
SCHEDULE OF COMMISSION RATES
EXHIBIT IA
TARGET PREMIUMS
III. RIDERS AND SUPPLEMENTAL BENEFITS
Target Premium equals the annual cost of the rider or supplemental
benefit divided by 0.95.
IV. SPECIAL CLASS
Target Premium for a special class table rating equals the extra
annual cost for the table rating divided by 0.95.
Premiums paid for aviation coverage and temporary extra premiums are
not commissionable.
<PAGE>
EXHIBIT IA
SCHEDULE OF COMMISSION RATES
V. FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE RIDERS
TARGET PREMIUMS
A. SPOUSE RIDER
<TABLE>
Male Female Male Female
Issue Std./ Std./ Issue Std./ Std./
Age Smkr. Nsmkr. Smkr. Nsmkr. Age Smkr. Nsmkr. Smkr. Nsmkr.
===========================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
16 5.40 3.24 49 23.76 16.32 12.48 9.72
17 5.52 3.36 50 24.84 17.16 12.96 10.20
18 5.76 3.48 51 26.76 18.72 13.68 10.92
19 5.88 3.60 52 27.96 19.68 14.28 11.40
20 6.12 4.08 3.72 2.88 53 30.24 21.48 15.12 12.24
21 6.36 4.20 3.84 3.00 54 31.56 22.56 15.72 12.72
22 6.48 4.32 3.96 3.12 55 33.96 24.60 16.68 13.68
23 6.72 4.44 4.08 3.12 56 35.52 25.92 17.28 14.28
24 6.96 4.56 4.20 3.24 57 38.28 28.20 18.36 15.36
25 7.08 4.68 4.44 3.36 58 39.96 29.64 19.08 15.96
26 7.44 4.80 4.56 3.48 59 43.08 32.40 20.28 17.16
27 7.68 5.04 4.68 3.60 60 45.00 34.08 21.12 18.12
28 7.92 5.16 4.92 3.72 61 47.04 35.88 22.08 18.96
29 8.28 5.40 5.04 3.84 62 50.64 39.12 23.76 20.64
30 8.64 5.52 5.28 3.96 63 52.92 41.04 24.84 21.72
31 9.00 5.76 5.52 4.20 64 55.32 43.20 26.16 22.80
32 9.36 6.00 5.76 4.32 65 59.52 46.92 28.08 24.84
33 9.72 6.24 6.00 4.44 66 62.28 49.44 29.40 26.16
34 10.08 6.48 6.12 4.56 67 65.16 51.96 30.96 27.60
35 10.56 6.72 6.36 4.80 68 70.20 56.64 33.36 30.00
36 10.92 7.08 6.72 4.92 69 73.56 59.64 35.16 31.68
37 11.40 7.32 6.96 5.16 70 77.04 62.76 37.08 33.60
38 11.88 7.68 7.20 5.40 71 82.92 68.40 40.20 36.72
39 12.84 8.28 7.68 5.76 72 86.88 72.12 42.60 39.00
40 13.44 8.76 7.92 6.00 73 91.08 75.84 45.00 41.52
41 14.52 9.60 8.40 6.36 74 98.52 83.04 49.56 45.96
42 15.12 9.96 8.76 6.60 75 106.20 90.72 54.36 50.88
43 16.32 10.92 9.24 7.08 76 111.00 95.28 57.60 54.12
44 17.04 11.40 9.60 7.32 77 115.92 99.96 61.08 57.36
45 18.48 12.36 10.32 7.92 78 120.84 104.76 64.56 60.84
46 19.44 12.96 10.68 8.16 79 125.88 109.68 68.28 64.44
47 21.00 14.16 11.28 8.76 80 130.92 114.84 72.12 68.04
48 21.96 14.88 11.76 9.12
* Smkr. includes premium class "Smoker" or "Smoker Special";
Nsmkr. includes premium class "Nonsmoker" or "Nonsmoker Special".
Std. includes premium class "Standard" or "Standard Special".
CHILD RIDER
TARGET PREMIUM EQUALS $5.76 PER $1,000 OF FACE AMOUNT.
<PAGE>
DISTRICT REPRESENTATIVE AGREEMENT
LUTHERAN BROTHERHOOD
Minneapolis, Minnesota
AMENDMENT TO EXHIBIT I, IA
SCHEDULE OF COMMISSION RATES
FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE
SERIES III, IV, AND JUVENILE-ISSUE
Exhibit I, Section VI and Exhibit IA, Section II
1. All columns headed by "Male" are amended to read "Male/Unisex**"
2. Add a footnote which reads:
**Unisex rates are used for contracts which prohibit discrimination on
the basis of gender.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Exhibit I, Section VII. C1,C2,D1,D2,E1,E2 -- Basic Contract
C3, F-Spouse Insurance Benefit (except in Montana)
and Exhibit IA, Section V.
1. All columns headed by "Male" are amended to read "Male/Unisex**"
2. Add a footnote which reads:
**Unisex rates are used for contracts which prohibit discrimination on
the basis of gender.
C3, F-SPOUSE INSURANCE BENEFIT: MONTANA ONLY
1. All columns headed by "Female" are amended to read "Female/Unisex**"
2. Add a footnote which reads:
**Unisex rates are used for contracts which prohibit discrimination on
the basis of gender.
<PAGE>
DISTRICT REPRESENTATIVE AGREEMENT
LUTHERAN BROTHERHOOD
Minneapolis, Minnesota
SCHEDULE OF COMMISSION RATES
AMENDMENT TO EXHIBIT I
Section VIII. HEALTH INSURANCE
The following rates apply to Long Term Care (1992 Series) contracts sold to
residents of the indicated state.
INDIANA WISCONSIN MICHIGAN
COMMISSIONS COMMISSIONS COMMISSIONS
Continuous Continuous Continuous
Issue Renewal Renewal Renewal
Age Year 1 Year 2+ Year 1 Year 2+ Year 1-3 Year 4+
--- ------ ------- ------ ------- -------- -------
50-71 18% 9% 24% 7% 18% 3%
72 18 9 24 7 17 3
73 17 9 23 7 17 3
74 16 9 23 7 16 3
75 16 9 23 6 16 3
76 16 8 23 6 16 3
77 16 8 23 6 15 3
78 16 8 22 6 15 3
79 16 8 21 6 14 3
80 15 8 20 6 14 3
81 15 8 20 5 14 3
82 14 8 20 5 13 3
83 14 7 20 5 13 3
84 14 7 19 5 12 3
<PAGE>
DISTRICT REPRESENTATIVE AGREEMENT
LUTHERAN BROTHERHOOD
Minneapolis, Minnesota
SCHEDULE OF COMMISSION RATES
AMENDMENT TO EXHIBIT I
Section VIII. HEALTH INSURANCE
The following rates apply to Long Term Care (1990 Series) contracts sold to
residents of the indicated state.
Commissions Commissions
MICHIGAN Issue Ages Years 1,2&3 Years 4&5
---------- -------------- -----------
50-70 17% 5%
71-73 16 5
74-76 15 5
77-79 14 5
80-82 13 5
82-84 12 5
1st Year Commissions
WISCONSIN Issue Ages Commissions Years 2,3,4,5&6
---------- ----------- -----------------
50-70 27% 7%
71 26 7
72 25 7
73-74 24 7
75-76 24 6
77 23 6
78 22 6
79 21 6
80-81 20 6
82-83 20 5
84 19 5
1st Year Commissions
INDIANA Issue Ages Commissions Years 2,3,4,5&6
---------- ----------- -----------------
50-70 18% 10%
71-72 18 9
73 17 9
74-75 16 9
76-77 16 8
78-79 15 8
80 14 8
81-82 14 7
83-84 13 7
<PAGE>
DISTRICT REPRESENTATIVE AGREEMENT
LUTHERAN BROTHERHOOD
Minneapolis, Minnesota
SCHEDULE OF COMMISSION RATES
AMENDMENT TO EXHIBIT I
Section VIII. HEALTH INSURANCE
The following rates apply to Long Term Care (1992 Series) contracts sold to
residents of the indicated state.
DELAWARE
COMMISSIONS
Issue
Age Year 1 Year 2 Year 3 Year 4 Year 5+
--- ------ ------ ------ ------ -------
50-72 16% 16% 16% 8% 3%
73 16 16 16 5 3
74 16 16 16 3 3
75 16 16 13 3 3
76 16 16 11 3 3
77 16 16 10 3 3
78 16 16 9 3 3
79 16 16 7 3 3
80 16 16 5 3 3
81 16 16 4 3 3
82 16 16 3 3 3
83 16 13 3 3 3
84 16 12 3 3 3
<PAGE>
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</TABLE>
<PAGE>
EXHIBIT 1.A.(3)(b)
GENERAL AGENT'S AGREEMENT
-------------------------
AGREEMENT dated _________________, by and between Lutheran Brotherhood
Securities Corp. hereinafter referred to as "LBSC", a Pennsylvania
corporation, and ___________________ hereinafter referred to as "General
Agent", an individual.
WHEREAS, General Agent is a registered representative of LBSC pursuant
to a General Agent's Agreement; and
WHEREAS, General Agent is a General Agent of Lutheran Brotherhood, a
Minnesota Corporation, the parent of LBSC and of Lutheran Brotherhood
Variable Insurance Products Company, hereinafter referred to as "LBVIP", a
Minnesota Corporation; and
WHEREAS, the parties hereto desire that General Agent represent LBSC
and LBVIP in the sale of LBVIP's products;
WITNESSETH: In consideration of the mutual promises contained herein,
the parties hereto agree as follows:
A. DEFINITIONS
(1) Contracts - The variable universal life insurance contracts which
LBVIP proposes to issue and for which LBSC has been appointed the
principal underwriter pursuant to a Distribution Agreement, a copy
of which has been furnished to General Agent.
(2) The Variable Account - The separate account established and
maintained by LBVIP pursuant to the laws of Minnesota to fund the
benefits under the Contracts.
(3) The Fund - An open-end management investment company registered
under the 1940 Act, shares of which are sold to the Variable
Account in connection with the sale of the Contracts.
(4) Registration Statement - The registration statements and
amendments thereto relating to the Contracts, the Variable Account,
and the Fund, including financial statements and all exhibits.
(5) Prospectus - The prospectuses included within the registration
statements referred to herein.
(6) 1933 Act - The Securities Act of 1933, as amended.
(7) 1934 Act - The Securities Exchange Act of 1934, as amended.
(8) SEC - The Securities and Exchange Commission.
B. AGREEMENTS OF LBSC
(1) Pursuant to the authority delegated to it by LBVIP, LBSC hereby
authorizes General Agent during the term of this Agreement to
solicit and obtain applications for Contracts directly or through
LBSC Registered Representatives obtained by and holding under
General Agent a written selected Registered Representative
Agreement and appointed by LBVIP from eligible persons provided
that there is an effective Registration Statement relating to such
Contracts and provided further that General Agent has been notified
by LBSC that the Contracts are qualified for sale under all
applicable securities and insurance laws of the state or
jurisdiction in which the application will be solicited. In
connection with the solicitation of applications for Contracts,
General Agent is hereby authorized to offer riders and benefits
that are available with the Contracts in accordance with
instructions furnished by LBSC or LBVIP.
(2) LBSC, during the term of this Agreement, will notify General Agent
of the issuance by the SEC of any stop order with respect to the
Registration Statement or any amendments thereto or the initiation
of any proceedings for that purpose or for any other purpose
relating to the registration and/or offering of the Contracts and
of any other action or circumstances that may prevent the lawful
sale of the Contracts in any state or jurisdiction.
(3) During the term of this Agreement, LBSC shall advise General Agent
of any amendment to the Registration Statement of any amendment or
supplement to any Prospectus.
C. AGREEMENTS OF GENERAL AGENT
(1) It is understood and agreed that General Agent is a duly registered
representative of LBSC pursuant to a General Agent's Agreement.
General Agent agrees to comply with all of the terms and agreements
of said General Agent's Agreement which is hereby incorporated
herein by reference to the extent it is not inconsistent with the
terms herein.
(2) Commencing at such time as LBSC and General Agent shall agree upon,
General Agent agrees to use his/her best efforts to find purchasers
for the contracts acceptable to LBVIP. In meeting his/her
obligation to use his/her best efforts to solicit applications for
Contracts, General Agent shall, during the term of this Agreement,
engage in the following activities:
(a) Continuously utilize training, sales and promotional
materials which have been approved by LBVIP;
(b) Permit periodic inspection and supervision of his/her
sales practices and submit periodic reports to LBSC as may
be requested on the results of such inspections and the
compliance with procedures.
(c) General Agent shall not make recommendations to an
applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the
Contract is suitable for such applicant. While not
limited to the following, a determination of suitability
shall be based on information furnished to General Agent
after reasonable inquiry of such applicant concerning the
applicant's insurance and investment objectives, financial
situation and needs, and the likelihood that the applicant
will continue to make the premium payments contemplated by
the Contract.
(3) All payments for Contracts collected by General Agent shall be held
at all times in a fiduciary capacity and shall be remitted promptly
in full together with such applications, forms and other required
documentation to LBVIP as designated by LBSC. Checks or money
orders in payment of initial premiums shall be drawn to the order
of "Lutheran Brotherhood Variable Insurance Products Company."
General Agent acknowledges that the LBVIP retains the ultimate
right to control the sale of the Contracts and that the LBSC or
LBVIP shall have the unconditional right to reject, in whole or in
part, any application for the Contract. In the event LBVIP or LBSC
rejects an application, LBVIP immediately will return all payments
directly to the purchaser and General Agent will be notified of
such action. In the event that any purchaser of a Contract elects
to return such Contract pursuant to Rule 6e-3T(b)(13)(viii) of the
1940 Act, any premium paid will be refunded to the purchaser and
General Agent will be notified of such action. General Agent will
comply with Lutheran Brotherhood's policy on Field Force Fiduciary
Responsibility.
(4) General Agent shall act at all times as an independent contractor
in carrying out the duties hereunder and shall not be considered an
employee of LBVIP or LBSC. As such General Agent shall have full
control of his or her daily activities, with the right to exercise
independent judgment as to the time, place, and manner of
soliciting applications, servicing Contracts, and otherwise
carrying out the provisions of this Agreement. General Agent and
his/her employees and Registered Representatives obtained by and
holding under General Agent shall not hold themselves out to be
employees of LBVIP or LBSC in this connection or in any dealings
with the public.
(5) General Agent agrees that any material he or she develops, approves
or uses for sales, training, explanatory or other purposes in
connection with the solicitation of applications for Contracts
hereunder (other than generic advertising materials which do not
make specific reference to the Contracts) will not be used without
the prior written consent of LBSC and, where appropriate, the
endorsement of LBVIP to be obtained by LBSC.
(6) Solicitation and other activities by General Agent shall be
undertaken only in accordance with applicable laws and regulations.
General Agent shall not solicit applications for the contracts
until duly licensed and appointed by LBVIP as a life insurance and
variable contract agent of LBVIP in the appropriate states or other
jurisdictions. General Agent shall fulfill any training
requirements necessary to be licensed. General Agent understands
and acknowledges that he/she is not authorized by LBSC or LBVIP to
give any information or make any representation in connection with
this Agreement or the offering of the Contracts other than those
contained in the Prospectus or other solicitation material
authorized in writing by LBSC or LBVIP.
(7) General Agent shall not represent himself or herself as having any
nor shall he or she have authority on behalf of LBSC or LBVIP to:
make, alter or discharge any Contract or other form; waive any
forfeiture, extend the time of paying any premium, or to alter,
waive, or forfeit any of the rights of the LBVIP or LBSC; receive
any monies or premiums due, or to become due, to LBVIP, except as
set forth in Section C(3) of this Agreement. General Agent shall
not expend, nor contract for the expenditure of the funds of LBSC
or LBVIP, nor shall General Agent possess or exercise any authority
on behalf of LBSC or LBVIP by this Agreement.
(8) General Agent shall maintain such records as are required of
him/her by applicable laws and regulations. The books, accounts
and records of LBVIP, the Variable Account, LBSC and General Agent
relating to the sale of the Contracts shall be maintained so as to
clearly and accurately disclose the nature and details of the
transactions. All records maintained by General Agent in
connection with this Agreement shall be the property of LBVIP and
shall be returned to LBVIP upon termination of this Agreement, free
from any claims or retention of rights by General Agent. General
Agent shall keep confidential any information obtained pursuant to
this Agreement and shall disclose such information, only if LBVIP
has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
(9) All business produced and serviced under this Agreement is the
property of LBVIP and no attempt will be made by General Agent to
prejudice the Contract Owners or interfere with the collection of
premiums or transfer any existing Contracts to another company or
organization. Information regarding names, addresses, ages and all
other information and records of Contract owners acquired from
LBVIP or LBSC and coming into the possession of General Agent
during the effective period of this Agreement, or any prior
Agreement, are trade secrets wholly owned by LBVIP. All forms and
other material, including electronic data, whether furnished by
LBVIP or LBSC or purchased by General Agent, upon which this
information is recorded shall be the sole and exclusive property of
LBVIP. General Agent shall return any part or all of such
information and records upon the request of LBVIP or LBSC. General
Agent will safeguard and protect all such information within his or
her control from any unauthorized access and use.
(10) LBVIP and LBSC may furnish to General Agent, without charge,
certain manuals, forms, records, electronic data, and such other
materials and supplies as they may deem advisable to provide. All
such property furnished by them shall remain the property of LBVIP.
In addition, they may offer at General Agent's expense such
additional materials and supplies as they believe may be helpful to
General Agent.
(11) The expense of any office, including rental, furniture, and
equipment; signs; supplies not furnished by LBVIP or LBSC; the
salaries of the employees of General Agent; automobile;
transportation; telephone; postage; advertising; and all other
charges or expense incurred by General Agent in the performance of
this Agreement shall be incurred at his/her discretion and paid for
by him/her.
(12) General Agent expressly covenants and agrees that after termination
of this Agreement, for any reason, he/she shall not for a period of
one year thereafter, nor shall he/she assist, encourage or induce
others to do, any of the following things: induce, or attempt to
induce, any of the Contract owners to whom he/she or any Registered
Representative in his/her General Agency was assigned while this
Agreement was in effect, to cancel, lapse, or surrender their
contracts with LBVIP.
(13) Upon termination of this Agreement, General Agent will deliver to
LBVIP, or its authorized representatives, all records, materials,
supplies, advertising, licenses, and all other documents pertaining
to LBVIP, used in carrying out this Agreement.
(14) General Agent will, at the option of LBVIP or LBSC, furnish a
fidelity bond for such sum and with such surety as they may
require.
(15) General Agent shall maintain an errors and omissions insurance
policy in an amount, form, and surety acceptable to LBVIP for the
performance of his or her professional services, duties, and
obligations.
C. COMPENSATION
(1) Pursuant to the Distribution Agreement between LBSC and LBVIP, LBSC
shall cause LBVIP to arrange for the payment of commissions to
General Agent as compensation for the sale of each contract sold by
General Agent or Registered Representative obtained by and holding
under General Agent. The amount of such compensation shall be
based on a schedule to be determined by agreement of LBVIP and
LBSC.
(2) General Agent shall have no right to withhold or deduct any part of
any premium he/she shall receive for purposes of payment of
commission or otherwise. General Agent shall have no interest in
any compensation paid by LBVIP to LBSC, now or hereafter, in
connection with the sale of any Contracts hereunder.
(3) LBVIP is hereby given a paramount and prior lien and security
interest upon any commissions payable under or as a result of this
or any previous agreement and under all agreements amendatory
hereof or supplementary hereto, as security for the payment of any
claim or indebtedness or reimbursement whatsoever due or to become
due to LBVIP, LBSC, or Lutheran Brotherhood or any of its
subsidiaries or affiliates, from General Agent. Any sums becoming
due to General Agent at any time may be applied, directly, by the
LBVIP to the liquidation of any indebtedness or obligation of
General Agent to any of the secured parties, but the failure to so
apply any sum shall not be deemed a waiver of LBVIP's lien on or
security interest in any other sums becoming due nor impair its
right to so apply such sums.
(4) Notwithstanding the vesting provisions provided for in the
Distribution Agreement and/or the schedule referred to in
section D(1) herein, General Agent will forfeit all compensation
and any other payments which have otherwise been vested or reserved
to General Agent by this or any previous or related Agreement, if
this Agreement terminates and any of the following events have
occurred or subsequently occur:
(a) General Agent engages in any form of rebating, directly or
indirectly, or if General Agent defaults in the payment to
LBVIP of any premiums collected by him/her, demands or
accepts any remuneration from a Contract Owner,
beneficiary, or their representative for services in
connection with the payment of any claim under any
contract issued by LBVIP;
(b) General Agent fails to deliver to LBVIP or its authorized
representative any of the following: all records,
including electronic data, materials, supplies,
advertising, licenses, and all other documents containing
LBVIP confidential information and/or trade secrets, upon
the written request of LBVIP;
(c) General Agent violates any of the applicable federal and
state laws, regulations or rules, or commits any fraud, in
connection with his or her duties as a General Agent or as
a registered representative; or
(d) General Agent violates any of the covenants set forth in
section C(12) herein.
E. COMPLAINTS AND INVESTIGATIONS
General Agent and LBSC jointly agree to cooperate fully in any
insurance regulatory investigation or proceeding or judicial proceeding
arising in connection with the Contracts marketed under this Agreement.
General Agent and LBSC further agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial
proceeding with respect to General Agent, LBSC, or their affiliates and
their agents or representatives to the extent that such investigation
or proceeding is in connection with Contracts marketed under this
Agreement.
F. TERM OF AGREEMENT
(1) This Agreement shall continue in force for one year from its
effective date and thereafter shall automatically be renewed every
year for a further one year period; provided that either party may
unilaterally terminate this Agreement upon thirty (30) days'
written notice to the other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations under this agreement shall cease except (a) the
agreements contained in Section E hereof; (b) the indemnity set
forth in Section G hereof; (c) the obligations to settle accounts
hereunder, including payments on premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant
to applications received by General Agent prior to termination;
and (d) the covenants set forth in Sections C(9), C(12) and C(13).
(3) This Agreement will automatically terminate on the first day of the
month next following the seventieth birthday of General Agent.
(4) In the event that the General Agent's Agreement between General
Agent and Lutheran Brotherhood or the General Agent's Agreement
between General Agent and LBSC is terminated, this Agreement will
also terminate.
(5) LBSC may immediately terminate this agreement for breach of any of
the covenants and agreements herein by General Agent.
G. INDEMNITY
(1) General Agent shall be held to the exercise of reasonable care in
carrying out the provisions of this Agreement.
(2) General Agent agrees to indemnify and hold harmless LBVIP and LBSC
and each of their current and former directors and officers and
each person, if any, who controls or has controlled LBVIP or LBSC
within the meaning of the 1933 Act or the 1934 Act, against any
losses, claims, damages or liabilities to which LBVIP or LBSC and
any such director or officer or controlling person may become
subject, under the 1933 Act or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or
written misrepresentations or any unlawful sales practices
concerning the Contracts by General Agent; or
(b) The failure of General Agent, his/her employees or
Registered Representatives obtained by and holding under
General Agent, to comply with the provisions or this
Agreement; and General Agent will reimburse LBVIP, LBSC,
or such director, officer or controlling person in
connection with investigating or defending any such loss,
claims, damage, liability or action. This indemnity
agreement will be in addition to any liability which
General Agent may otherwise have.
H. GENERAL TERMS
(1) This Agreement shall not be assigned by either party without the
written consent of the other.
(2) This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota.
(3) The forbearance or neglect of LBSC to insist upon strict compliance
by General Agent with any of the provisions of this Agreement,
whether continuing or not, shall not be construed as a waiver of
LBSC's rights or privileges hereunder. No waiver of any right or
privilege of LBSC arising from any default or failure of
performance by General Agent shall affect the LBSC's rights or
privileges in the event of a further default or failure of
performance.
(4) Whenever required for proper interpretation of this Agreement, the
singular number shall include the plural, the plural the singular,
and the use of any gender shall include all genders.
(5) The unenforceability or invalidity of any provisions hereof shall
not render any other provision or provisions herein contained
unenforceable or invalid.
(6) This Agreement contains the entire understanding of the parties
hereto, and no modification hereof or addition hereto shall be
binding unless the same is in writing and signed by the parties
hereto.
(7) This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permissive
assigns, and General Agent's estate, heirs and personal
representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LUTHERAN BROTHERHOOD SECURITIES CORP. (LBSC)
By
-----------------------------------------
-----------------------------------------
(General Agent)
<PAGE>
EXHIBIT 1.A.3(b)
SELECTED REGISTERED REPRESENTATIVE AGREEMENT
--------------------------------------------
AGREEMENT dated _____________, by and between Lutheran Brotherhood
Securities Corp. hereinafter referred to as "LBSC", a Pennsylvania
corporation, and ______________________ hereinafter referred to as
"Registered Representative", an individual.
WHEREAS, Registered Representative is a registered representative of
LBSC pursuant to a Registered Representative's Agreement; and
WHEREAS, Registered Representative is a District Representative of
Lutheran Brotherhood, a Minnesota Corporation, the parent of LBSC and of
Lutheran Brotherhood Variable Insurance Products Company, hereinafter
referred to as "LBVIP", a Minnesota Corporation; and
WHEREAS, the parties hereto desire that Registered Representative
represent LBSC and LBVIP in the sale of LBVIP's products;
WITNESSETH: In consideration of the mutual promises contained herein,
the parties hereto agree as follows:
A. DEFINITIONS
(1) Contracts - The variable universal life insurance contracts which
LBVIP proposes to issue and for which LBSC has been appointed the
principal underwriter pursuant to a Distribution Agreement, a copy
of which has been furnished to Registered Representative, together
with the Registered Representative Commission Schedule.
(2) The Variable Account - The separate account established and
maintained by LBVIP pursuant to the laws of Minnesota to fund the
benefits under the Contracts.
(3) The Fund - An open-end management investment company registered
under the 1940 Act, shares of which are sold to the Variable
Account in connection with the sale of the Contracts.
(4) Registration Statement - The registration statements and
amendments thereto relating to the Contracts, the Variable Account,
and the Fund, including financial statements and all exhibits.
(5) Prospectus - The prospectuses included within the registration
statements referred to herein.
(6) 1933 Act - The Securities Act of 1933, as amended.
(7) 1934 Act - The Securities Exchange Act of 1934, as amended.
(8) SEC - The Securities and Exchange Commission.
B. AGREEMENTS OF LBSC
(1) Pursuant to the authority delegated to it by LBVIP, LBSC hereby
authorizes Registered Representative during the term of this
Agreement to solicit applications for Contracts from eligible
persons provided that there is an effective Registration Statement
relating to such Contracts and provided further that Registered
Representative has been notified by LBSC that the Contracts are
qualified for sale under all applicable securities and insurance
laws of the state or jurisdiction in which the application will be
solicited. In connection with the solicitation of applications for
Contracts, Registered Representative is hereby authorized to offer
riders and benefits that are available with the Contracts in
accordance with instructions furnished by LBSC or LBVIP.
(2) LBSC, during the term of this Agreement, will notify Registered
Representative of the issuance by the SEC of any stop order with
respect to the Registration Statement or any amendments thereto or
the initiation of any proceedings for that purpose or for any other
purpose relating to the registration and/or offering of the
Contracts and of any other action or circumstances that may prevent
the lawful sale of the Contracts in any state or jurisdiction.
(3) During the term of this Agreement, LBSC shall advise Registered
Representative of any amendment to the Registration Statement of
any amendment or supplement to any Prospectus.
C. AGREEMENTS OF REGISTERED REPRESENTATIVE
(1) It is understood and agreed that Registered Representative is a
duly registered representative of LBSC pursuant to a Registered
Representative's Agreement. Registered Representative agrees to
comply with all of the terms and agreements of said Registered
Representative's Agreement which is hereby incorporated herein by
reference to the extent it is not inconsistent with the terms
herein.
(2) Commencing at such time as LBSC and Registered Representative shall
agree upon, Registered Representative agrees to use his/her best
efforts to find purchasers for the contracts acceptable to LBVIP.
In meeting its obligation to use its best efforts to solicit
applications for Contracts, Registered Representative shall, during
the term of this Agreement, engage in the following activities:
(a) Continuously utilize training, sales and promotional
materials which have been approved by LBVIP;
(b) Permit periodic inspection and supervision of his/her
sales practices and submit periodic reports to LBSC as may
be requested on the results of such inspections and the
compliance with procedures.
(c) Registered Representative shall not make recommendations
to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that the purchase of the
Contract is suitable for such applicant. While not
limited to the following, a determination of suitability
shall be based on information furnished to Registered
Representative after reasonable inquiry of such applicant
concerning the applicant's insurance and investment
objectives, financial situation and needs, and the
likelihood that the applicant will continue to make the
premium payments contemplated by the Contract.
(3) All payments for Contracts collected by Registered Representative
shall be held at all times in a fiduciary capacity and shall be
remitted promptly in full together with such applications, forms
and other required documentation to LBVIP as designated by LBSC.
Checks or money orders in payment of initial premiums shall be
drawn to order of "Lutheran Brotherhood Variable Insurance Products
Company." Registered Representative acknowledges that the LBVIP
retains the ultimate right to control the sale of the Contracts and
that the LBSC or LBVIP shall have the unconditional right to
reject, in whole or in part, any application for the Contract. In
the event LBVIP or LBSC rejects an application, LBVIP immediately
will return all payments directly to the purchaser and Registered
Representative will be notified of such action. In the event that
any purchaser of a Contract elects to return such Contract pursuant
to Rule 6e-3T(b)(13)(viii) of the 1940 Act, any premium paid will
be refunded to the purchaser and Registered Representative will be
notified of such action. Registered Representative will comply
with Lutheran Brotherhood's policy on Field Force Fiduciary
Responsibility.
(4) Registered Representative shall act at all times as an independent
contractor in carrying out the duties hereunder and shall not be
considered an employee of LBVIP or LBSC, except for purposes of the
Federal Insurance Contributions Act (26 U.S.C. 3101 et. seq.), and
Title II, of the Social Security Act (42 U.S.C. 401 et. seq.). As
such Registered Representative shall have full control of his or
her daily activities, with the right to exercise independent
judgment as to the time, place, and manner of soliciting
applications, servicing Contracts, and otherwise carrying out the
provisions of this Agreement. Registered Representative and
his/her employees shall not hold themselves out to be employees of
LBVIP or LBSC in this connection or in any dealings with the
public.
(5) Registered Representative agrees that any material he or she
develops, approves or uses for sales, training, explanatory or
other purposes in connection with the solicitation of applications
for Contracts hereunder (other than generic advertising materials
which do not make specific reference to the Contracts) will not be
used without the prior written consent of LBSC and, where
appropriate, the endorsement of LBVIP to be obtained by LBSC.
(6) Solicitation and other activities by Registered Representative
shall be undertaken only in accordance with applicable laws and
regulations. Registered Representative shall not solicit
applications for the contracts until duly licensed and appointed by
LBVIP as a life insurance and variable contract agent of LBVIP in
the appropriate states or other jurisdictions. Registered
Representative shall fulfill any training requirements necessary to
be licensed. Registered Representative understands and
acknowledges that he/she is not authorized by LBSC or LBVIP to give
any information or make any representation in connection with this
Agreement or the offering of the Contracts other than those
contained in the Prospectus or other solicitation material
authorized in writing by LBSC or LBVIP.
(7) Registered Representative shall not represent himself or herself as
having any nor shall he or she have authority on behalf of LBSC or
LBVIP to: make, alter or discharge any Contract or other form;
waive any forfeiture, extend the time of paying any premium, or
to alter, waive, or forfeit any of the rights of LBVIP or LBSC;
receive any monies or premiums due, or to become due, to LBVIP,
except as set forth in Section C(3) of this Agreement. Registered
Representative shall not expend, nor contract for the expenditure
of the funds of LBSC or LBVIP, nor shall Registered Representative
possess or exercise any authority on behalf of LBSC or LBVIP by
this Agreement.
(8) Registered Representative shall maintain such records as are
required of him/her by applicable laws and regulations. The books,
accounts and records of LBVIP, the Variable Account, LBSC and
Registered Representative relating to the sale of the Contracts
shall be maintained so as to clearly and accurately disclose the
nature and details of the transactions. All records maintained by
Registered Representative in connection with this Agreement shall
be the property of LBVIP and shall be returned to LBVIP upon
termination of this Agreement, free from any claims or retention of
rights by Registered Representative. Registered Representative
shall keep confidential any information obtained pursuant to this
Agreement and shall disclose such information, only if LBVIP has
authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
(9) All business produced and serviced under this Agreement is the
property of LBVIP and no attempt will be made by Registered
Representative to prejudice the Contract Owners or interfere with
the collection of premiums or transfer any existing Contracts to
another company or organization.
Information regarding names, addresses, ages and all other
information and records of Contract Owners acquired from LBVIP or
LBSC and coming into the possession of Registered Representative
during the effective period of this Agreement, or any prior
Agreement, are trade secrets wholly owned by LBVIP. All forms and
other material, including electronic data, whether furnished by
LBVIP or LBSC or purchased by Registered Representative, upon which
this information is recorded shall be the sole and exclusive
property of LBVIP. Registered Representative shall return any part
or all of such information and records upon the request of LBVIP or
LBSC. Registered Representative will safeguard and protect all
such information within his or her control from any unauthorized
access and use.
(10) LBVIP and LBSC may furnish to Registered Representative, without
charge, certain manuals, forms, records, electronic data, and such
other materials and supplies as they may deem advisable to provide.
All such property furnished by them shall remain the property of
LBVIP. In addition, they may offer at Registered Representative's
expense such additional materials and supplies as they believe may
be helpful to Registered Representative.
(11) The expense of any office, including rental, furniture, and
equipment; signs; supplies not furnished by LBVIP or LBSC; the
salaries of the employees of Registered Representative; automobile;
transportation; telephone; postage; advertising; and all other
charges or expense incurred by Registered Representative in the
performance of this Agreement shall be incurred at his/her
discretion and paid for by him/her.
(12) Registered Representative expressly covenants and agrees that after
termination of this Agreement, for any reason, he/she shall not for
a period of one year thereafter, nor shall he/she assist, encourage
or induce others to do, any of the following things: induce, or
attempt to induce, any of the Contract holders to whom he/she was
the "Writing Registered Representative" or was assigned as the
"Servicing or Correspondent Registered Representative" while this
Agreement was in effect, to cancel, lapse, or surrender their
contracts with LBVIP.
(13) Upon termination of this Agreement, Registered Representative will
deliver to LBVIP, or its authorized representatives, all records,
materials, supplies, advertising, licenses, and all other documents
pertaining to LBVIP, used in carrying out this Agreement.
(14) Registered Representative will, at the option of LBVIP or LBSC,
furnish a fidelity bond for such sum and with such surety as they
may require.
(15) Registered Representative shall maintain an errors and omissions
insurance policy in an amount, form, and surety acceptable to LBVIP
for the performance of his or her professional services, duties,
and obligations.
D. COMPENSATION
(1) Pursuant to the Distribution Agreement between LBSC and LBVIP, LBSC
shall cause LBVIP to arrange for the payment of commissions to
Registered Representative as compensation for the sale of each
contract sold by Registered Representative. The amount of such
compensation shall be based on a schedule to be determined by
agreement of LBVIP and LBSC.
(2) Registered Representative shall have no right to withhold or deduct
any part of any premium he/she shall receive for purposes of
payment of commission or otherwise. Registered Representative
shall have no interest in any compensation paid by LBVIP to LBSC,
now or hereafter, in connection with the sale of any Contracts
hereunder.
(3) LBVIP is hereby given a paramount and prior lien and security
interest upon any commissions payable under or as a result of this
or any previous agreement and under all agreements amendatory
hereof or supplementary hereto, as security for the payment of any
claim or indebtedness or reimbursement whatsoever due or to become
due to LBVIP, LBSC, or Lutheran Brotherhood or any of its
subsidiaries or affiliates, from Registered Representative. Any
sums becoming due to Registered Representative at any time may be
applied, directly, by LBVIP to the liquidation of any indebtedness
or obligation of Registered Representative to any of the secured
parties, but the failure to so apply any sum shall not be deemed a
waiver of LBVIP's lien on or security interest in any other sums
becoming due nor impair its right to so apply such sums.
(4) Notwithstanding the vesting provisions provided for in the
Distribution Agreement and/or the schedule referred to in
section D(1) herein, Registered Representative will forfeit all
compensation and any other payments which have otherwise been
vested or reserved to Registered Representative by this or any
previous or related Agreement, if this Agreement terminates and any
of the following events have occurred or subsequently occur:
(a) Registered Representative engages in any form of rebating,
directly or indirectly, or if Registered Representative
defaults in the payment to LBVIP of any premiums collected
by him/her, demands or accepts any remuneration from a
Contract Owner, beneficiary, or their representative for
services in connection with the payment of any claim under
any contract issued by LBVIP;
(b) Registered Representative fails to deliver to LBVIP or its
authorized representative any of the following: all
records, including electronic data, materials, supplies,
advertising, licenses, and all other documents containing
LBVIP confidential information and/or trade secrets, upon
the written request of LBVIP;
(c) Registered Representative violates any of the applicable
federal and state laws, regulations or rules, or commits
any fraud, in connection with his or her duties as a
Registered Representative; or
(d) Registered Representative violates any of the covenants
set forth in section C(12) herein.
E. COMPLAINTS AND INVESTIGATIONS
Registered Representative and LBSC jointly agree to cooperate fully in
any insurance regulatory investigation or proceeding or judicial
proceeding arising in connection with the Contracts marketed under this
Agreement. Registered Representative and LBSC further agree to
cooperate fully in any securities regulatory investigation or
proceeding or judicial proceeding with respect to Registered
Representative, LBSC, or their affiliates and their agents or
representatives to the extent that such investigation or proceeding is
in connection with Contracts marketed under this Agreement.
F. TERM OF AGREEMENT
(1) Either party may unilaterally terminate this Agreement upon
thirty (30) days' written notice to the other party of its
intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations under this agreement shall cease except (a) the
agreements contained in Section E hereof; (b) the indemnity set
forth in Section G hereof; (c) the obligations to settle accounts
hereunder, including payments on premiums subsequently received for
Contracts in effect at the time of termination or issued pursuant
to the applications received by Registered Representative prior to
termination; and (d) the covenants set forth in Sections C(9),
C(12) and C(13).
(3) This Agreement will automatically terminate on the first day of the
month next following the seventieth birthday of Registered
Representative.
(4) In the event that either the District Representative's Agreement
between Registered Representative and Lutheran Brotherhood or the
Registered Representative's Agreement between Registered
Representative and LBSC is terminated, this Agreement will also
terminate.
(5) LBSC may immediately terminate this agreement for breach of any of
the covenants and agreements herein by Registered Representative.
G. INDEMNITY
(1) Registered Representative shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement.
(2) Registered Representative agrees to indemnify and hold harmless
LBVIP and LBSC and each of their current and former directors and
officers and each person, if any, who controls or has controlled
LBVIP or LBSC within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages or liabilities to which LBVIP
or LBSC and any such director or officer or controlling person may
become subject, under the 1933 Act or otherwise insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon:
(a) Any unauthorized use of sales materials or any verbal or
written misrepresentations or any unlawful sales practices
concerning the Contracts by Registered Representative; or
(b) The failure of Registered Representative or his/her
employees, to comply with the provisions of this
Agreement; and Registered Representative will reimburse
LBVIP, LBSC, or such director, officer or controlling
person in connection with investigating or defending any
such loss, claims, damage, liability or action. This
indemnity agreement will be in addition to any liability
which Registered Representative may otherwise have.
H. GENERAL TERMS
(1) This Agreement shall not be assigned by either party without the
written consent of the other.
(2) This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota.
(3) The forbearance or neglect of LBSC to insist upon strict compliance
by Registered Representative with any of the provisions of this
Agreement, whether continuing or not, shall not be construed as a
waiver of LBSC's rights or privileges hereunder. No waiver of any
right or privilege of LBSC arising from any default or failure of
performance by Registered Representative shall affect the LBSC's
rights or privileges in the event of a further default or failure
of performance.
(4) Whenever required for proper interpretation of this Agreement, the
singular number shall include the plural, the plural the singular,
and the use of any gender shall include all genders.
(5) The unenforceability or invalidity of any provisions hereof shall
not render any other provision or provisions herein contained
unenforceable or invalid.
(6) This Agreement contains the entire understanding of the parties
hereto, and no modification hereof or addition hereto shall be
binding unless the same is in writing and signed by the parties
hereto.
(7) This Agreement shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permissive
assigns, and Registered Representative's estate, heirs and personal
representatives.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LUTHERAN BROTHERHOOD SECURITIES CORP. (LBSC)
By
------------------------------------------
------------------------------------------
(Registered Representative)
#20526
<PAGE>
EXHIBIT 4
-----
LUTHERAN BROTHERHOOD
[LOGO] VARIABLE INSURANCE
PRODUCTS COMPANY
A Stock Life Insurance Company
Minneapolis, Minnesota 55415
FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY
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This is a legal contract between the contract owner and Lutheran Brotherhood
Variable Insurance Products Company. We issue this contract based on the
Application signed by the applicant(s) and the payment of the first premium.
We will pay you the Annuity Income if an Annuitant is living on the Maturity
Date (see page 3). The income will begin on the Maturity Date and, unless
you change the settlement option, will be paid until the Annuitant dies.
However, if the Annuitant dies during a Guarantee Period, income will
continue to the beneficiary for the balance of that period. We will pay the
Death Proceeds to the beneficiary upon receiving proof that the death of the
Annuitant occurred before the Maturity Date. The Annuity Income and Death
Proceeds will be paid according to the provisions of this contract.
THE ACCUMULATED VALUE AND THE DEATH PROCEEDS MAY INCREASE OR DECREASE DAILY
BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT. ANNUITY
PAYMENTS PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE
OF THE VARIABLE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO MINIMUM
DOLLAR AMOUNT.
RIGHT TO CANCEL. PLEASE READ THIS CONTRACT CAREFULLY. You may cancel the
contract before midnight of the 10th day after you first receive it. Do
this by (1) sending a telegram or mailing or delivering written notice to
Lutheran Brotherhood Variable Insurance Products Company, 625 Fourth Avenue
South, Minneapolis, MN 55415 or to the representative through whom you
bought it, and (2) returning the contract. Notice given by mail and return
of the contract by mail are effective on being postmarked, properly
addressed and postage prepaid. If you cancel the contract, it will be
deemed void from the beginning. Within 7 days after we receive it, we will
refund the sum of: (1) The Accumulated Value on the day the contract is
first received by us or our representative; and (2) The amount attributable
to this contract for risk charges deducted from the Variable Account and for
advisory fees charged against the net asset value in the Fund portfolios.
Annuity Income payable at maturity.
Death Proceeds payable at death before maturity.
Flexible premiums.
Return on investments reflected in contract benefits.
Annual dividends payable if earned.
Signed for the Company at Minneapolis, Minnesota
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President SAMPLE /s/ Robert P. Gandrud
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Secretary SAMPLE /s/ David J. Larson
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ANNUITANT: JOHN DOE AGE: 35 SEX: MALE
ANNUITANT: JANE DOE AGE: 35 SEX: FEMALE
CONTRACT NUMBER: C1234567 DATE OF ISSUE: JANUARY 1, 1991
V2-VY-FPVA-1
CONTRACT NUMBER: C1234567
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TABLE OF CONTENTS
- ----------------------------------------------------------------------------
Cover Page
Index
Contract Schedule, Contract Data
SECTION 1 Definitions
SECTION 2 General Provisions
SECTION 3 Ownership
SECTION 4 Premiums
SECTION 5 Accumulated Value
SECTION 6 Surrender
SECTION 7 Accounts and Unit Values
SECTION 8 Beneficiary
SECTION 9 Settlement Provisions
Additional Benefits, Amendments, Application
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INDEX
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SECTION
Accumulated Value .................................................... 5
Accumulation Unit Value .............................................. 7
Administrative Charge ................................................ 5
Allocation of Premiums ............................................... 7
Annual Report ........................................................ 5
Annuity Income ....................................................... 2
Annuity Unit Value ................................................... 7
Beneficiary .......................................................... 8
Cash Surrender Value ................................................. 6
Change in Annuity Unit Allocation .................................... 7
Change in Contract ................................................... 2
Change of Investment Policy .......................................... 7
Death Proceeds ....................................................... 2
Deferment ............................................................ 2
Entire Contract ...................................................... 2
Exchange Provision ................................................... 3
Fixed Account ........................................................ 7
General Account ...................................................... 7
Incontestability ..................................................... 2
Minimum Accumulated Value Required ................................... 5
Misstatement of Age or Sex ........................................... 2
Ownership ............................................................ 3
Premiums ............................................................. 4
Settlement Options ................................................... 9
Surrender ............................................................ 6
Cash Surrender Value ............................................... 6
Full Surrender ..................................................... 6
Partial Surrender .................................................. 6
Surrender Charge ................................................... 6
Transfer and Assignment .............................................. 3
Transfer of Accumulated Values ....................................... 7
Variable Account ..................................................... 7
V2-VY-FPVA-2 page 2
<PAGE>
LUTHERAN BROTHERHOOD For information about this
[LOGO] VARIABLE INSURANCE contract, consult your
PRODUCTS COMPANY Lutheran Brotherhood
625 Fourth Avenue South Variable Insurance Products
Minneapolis, Minnesota 55415 Company Representative or
write to us at our home
office.
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CONTRACT SCHEDULE PLANNED ANNUAL
PREMIUM
BASIC BENEFIT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY $1,000
PREMIUMS PAYABLE TO THE CONTRACT ANNIVERSARY AFTER AGE 65
MATURITY DATE: JANUARY 1, 2021
GUARANTEED PERIOD: 10 YEARS
DATE OF INITIAL PREMIUM ALLOCATION: JANUARY 1, 1991
(SEE SECTION 7.4)
ACCUMULATED VALUES IN THE VARIABLE ACCOUNT DEPEND ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT.
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ADMINISTRATIVE CHARGE: $30.00 PER YEAR (SEE SECTION 5.2)
SURRENDER CHARGES*
CONTRACT YEAR PERCENT APPLIED
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
THEREAFTER 0%
*SEE SECTION 6.4 FOR A FULL DESCRIPTION OF THE SURRENDER CHARGE.
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ANNUITANT: JOHN DOE AGE: 35 SEX: MALE
CONTRACT NUMBER: C1234567 DATE OF ISSUE: JANUARY 1, 1991
V2-VY-FPVA-3 page 3
DATE OF ISSUE: JANUARY 1, 1991 CONTRACT NUMBER: C1234567
ANNUITANT: JOHN DOE
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY
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VARIABLE ACCOUNT INFORMATION
Investment Company - LB Series Fund, Inc.
Variable Account -- LBVIP Variable Annuity Account I
Each subaccount of the LBVIP Variable Annuity Account I invests in
a specific portfolio of LB Series Fund, Inc. Subaccounts of the
Variable Account and the portfolios in which they invest are as
follows:
GROWTH SUBACCOUNT -- Amounts credited to this
subaccount are invested in the
Growth Portfolio. This portfolio
invests primarily in equity
securities.
HIGH YIELD SUBACCOUNT -- Amounts credited to this
subaccount are invested in the
High Yield Portfolio. This
portfolio invests primarily in
high yield securities.
INCOME SUBACCOUNT -- Amounts credited to this
subaccount are invested in the
Income Portfolio. This portfolio
invests primarily in fixed income
securities.
MONEY MARKET SUBACCOUNT -- Amounts credited to this
subaccount are invested in the
Money Market Portfolio. This
portfolio invests primarily in
money market instruments.
The LB Series Fund, Inc. receives investment advice for each
portfolio from Lutheran Brotherhood. As investment advisor,
Lutheran Brotherhood charges the LB Series Fund, Inc. a daily
investment advisory fee equal to an annual rate of 0.4% of the
aggregate average daily net assets of LB Series Fund, Inc.
For a complete description of the Variable Account and the
designated portfolios, please refer to the current prospectus for
LB Series Fund, Inc.
FIXED ACCOUNT INFORMATION
Invests in the General Account of LBVIP.
V2-VY-FPVA-4 page 4
Contract Number: C1234567
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1. DEFINITIONS
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ANNUITANT. The person(s) named as Annuitant on page 3.
APPLICATION. The application(s) and all amendments and supplements.
CONTRACT ANNIVERSARY. The Date of Issue on page 3 and the same month and
day for years after issue as in the Date of Issue.
CONTRACT YEAR. The period of time from one Contract Anniversary to the next
Contract Anniversary.
FIXED ANNUITY. An annuity whose payments are:
1) Guaranteed as to minimum amount; and
2) Not dependent on the investment experience of the Variable
Account.
SEC. Securities and Exchange Commission.
VALUATION DAY. Any day, except the day after Thanksgiving Day and the day
before Christmas Day, that the New York Stock Exchange is open for trading
or there is sufficient trading in a Fund portfolio's securities to affect
the accumulation unit value of the corresponding subaccount of the Variable
Account.
VALUATION PERIOD. The period of time from the end of one Valuation Day to
the end of the next Valuation Day.
VARIABLE ANNUITY. An annuity whose payments vary depending on the
investment experience of the Variable Account.
WE, OUR, US, LBVIP. Lutheran Brotherhood Variable Insurance Products
Company.
WRITTEN NOTICE. A written request or notice signed by you and received by
us at our Home Office in Minneapolis, Minnesota.
YOU, YOUR, YOURS. The owner(s) of this contract.
V2-VY-FPVA-5 page 5
Contract Number: 1234567
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2. GENERAL PROVISIONS
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2.1 ENTIRE CONTRACT. The Entire Contract consists of:
1) This contract including any attached riders, amendments or
endorsements; and
2) The Application attached to this contract.
2.2 CHANGE OF CONTRACT. No change in this contract is valid unless it is
made in writing and signed by our President and Secretary.
2.3 DEATH PROCEEDS. We will pay the Death Proceeds to the beneficiary
upon receiving proof that the death of the Annuitant occurred before the
Maturity Date. Death Proceeds are paid according to Section 9.1 Payment of
Proceeds.
The amount of Death Proceeds is calculated on the later of:
1) The date we receive proof of death; and
2) The date we receive signed notice of the Beneficiary's election
to receive Death Proceeds.
The amount is the greatest of:
1) The Accumulated Value on the date Death Proceeds are calculated;
2) The sum of the premiums received by us, less the amount of any
Partial Surrenders; and
3) The Accumulated Value on the preceding Minimum Death Benefit Date
plus the sum of premiums received by us since that date, less the
amount of any Partial Surrenders since then. The first Minimum
Death Benefit Date is the Date of Issue of this contract.
Thereafter, Minimum Death Benefit Dates occur every 6 years on
the Contract Anniversary.
The Death Proceeds are not less than the minimum values required by law.
2.4 ANNUITY INCOME. The Annuity Income will be the amount provided by
the Cash Surrender Value on the Maturity Date. This income may be paid
under a Fixed Annuity, Variable Annuity, or both. Unless you elect
otherwise, the income will be determined according to Option 4 of Section
9.2 Optional Plans of Settlement with the Guaranteed Period shown on page 3.
2.5 MATURITY DATE. The Maturity Date is shown on page 3. We will pay
you the Annuity Income beginning on the Maturity Date if the Annuitant is
then living. You may change this date by giving Written Notice before the
Maturity Date.
2.6 STATEMENTS IN THE APPLICATION. We will not use any statement to
contest a claim or to have this contract declared invalid unless the
statement is contained in the Application. All statements made in the
Application are representations, not warranties.
2.7 INCONTESTABILITY. We will not contest the validity of this contract
after it has been in force during the Annuitant's lifetime for two years
from the Date of Issue.
2.8 MISSTATEMENT OF AGE OR SEX. If an Annuitant's age or sex has been
misstated, any amount payable will be that which the premiums paid would
have bought at the correct age and sex. If we make any underpayment as a
result of misstatement of age or sex, we will pay you the underpayment with
interest compounded at the rate of 4% per year. If we make any overpayment,
future payments will be reduced until we have recovered the amount of the
overpayment plus interest compounded at 4% per year.
V2-VY-FPVA-6 page 6
Contract Number: 1234567
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2. GENERAL PROVISIONS (continued)
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2.9 EXEMPTIONS FROM CLAIMS OF CREDITORS. To the extent permitted by law,
the proceeds of this contract and any payments under it will not be subject
to the claims of creditors or to any legal proceedings.
2.10 DEFERMENT. The Cash Surrender Value and Partial Surrenders will
normally be paid within 7 days after we receive Written Notice of surrender.
The Death Proceeds and Annuity Income will be paid as in Sections 2.3 and
2.4 respectively. However, we may defer the payment of any portion of
surrender amounts, Death Proceeds or Annuity Income which is in the Variable
Account while:
1) The New York Stock Exchange is closed for trading; or
2) The SEC requires that trading be restricted or declares an
emergency.
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3. OWNERSHIP
- ----------------------------------------------------------------------------
3.1 OWNERSHIP. The Annuitant is the owner unless another owner is named
in the Application. While an Annuitant is living, the owner may exercise
all rights set out in this contract.
3.2 EXCHANGE PROVISION. If Death Proceeds become payable and the owner's
spouse is the sole primary beneficiary, then the spouse may elect, to the
extent permitted by law, to continue this contract in force as the Annuitant
in lieu of receiving Death Proceeds. Election must be made by giving
Written Notice within 60 days after we receive due proof of death.
3.3 TRANSFER AND ASSIGNMENT. If this contract is used in a qualified
plan under Section 401, 403, 408 or 457 of the Internal Revenue Code, as
amended, then:
1) If the owner is a trust, custodian or employer, you may transfer
ownership to the Annuitant, otherwise
2) This contract may not be sold, assigned, discounted or pledged as
collateral for a loan or as security for performance of an
obligation or for any other purpose to any person other than us.
If this contract is not used in a qualified plan as described above, then:
1) Ownership may be transferred but not to a natural person; and
2) This contract may be assigned as collateral.
We are not bound by any assignment unless it is in writing and filed at our
Home Office. We are not responsible for the validity or effect of any
assignment.
V2-VY-FPVA-7 page 7
Contract Number: C1234567
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4. PREMIUMS
- ----------------------------------------------------------------------------
4.1 PREMIUM PAYMENTS. The amount of the Planned Annual Premium is shown
on page 3. The initial premium is due and payable on the Date of Issue.
You may pay more or less than the Planned Annual Premium in any Contract
Year. Premiums may be paid at any time before the Maturity Date and in any
amount except that we reserve the right to require that each premium payment
must be at least $50.
Premiums are payable at our Home Office. Upon request we will give you a
receipt, signed by an officer of the Company, for the premium paid.
4.2 NET PREMIUM. The Net Premium is the portion of each premium which is
allocated to the subaccounts of the Variable Account and to the Fixed
Account. The Net Premium is equal to the premium paid less any charge for
state and local premium taxes.
4.3 PREMIUM BILLING. We will send premium billings based on the amount
and frequency of premium payments which you request. You may change the
amount and, subject to our published rules, the frequency or method of
billing by giving Written Notice. If we do not receive any premium payments
for 24 consecutive months, we will stop billings.
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5. ACCUMULATED VALUE
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5.1 ACCUMULATED VALUE. On or before the Maturity Date, the Accumulated
Value of this contract is equal to the sum of the accumulated values for
this contract in the subaccounts and in the Fixed Account.
The accumulated value in any subaccount on a Valuation Day is equal to:
1) The number of accumulation units for this contract in that
subaccount (see Section 7.6); multiplied by
2) The accumulation unit value for that subaccount (see
Section 7.7).
The accumulated value for any day that is not a Valuation Day will be
determined on the next Valuation Day.
The accumulated value in the Fixed Account on any day is the sum of:
1) Net Premiums allocated to the Fixed Account;
2) Accumulated value transferred to the Fixed Account from a
subaccount; and
3) Interest credited;
Less
4) Partial Surrenders which are applied against the Fixed Account;
5) Accumulated value transferred from the Fixed Account to a
subaccount; and
6) Administrative Charges that are taken from the Fixed Account.
5.2 ADMINISTRATIVE CHARGE. On each Contract Anniversary prior to and
including the Maturity Date, if the sum of premiums received by us less the
amount of any Partial Surrenders is less than $5,000, we will deduct an
Administrative Charge from the Accumulated Value. The charge will be
applied against each subaccount of the Variable Account and against the
Fixed Account according to the ratio for this contract of the accumulated
value in the subaccount or Fixed Account to the sum of the accumulated
values in all the subaccounts and the Fixed Account. With our approval, you
may choose other allocations of the Administrative Charge. The amount of
the Administrative Charge is shown on page 3.
V2-VY-FPVA-8 page 8
Contract Number: 1234567
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5. ACCUMULATED VALUE (continued)
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5.3 MINIMUM ACCUMULATED VALUE REQUIRED. We will terminate this contract
on any Contract Anniversary if:
1) The Accumulated Value is less than $1,000 and no premium payment
has been received in the Home Office for at least 24 months; or
2) The Accumulated Value (before any Administrative Charge is
applied) is less than the Administrative Charge.
Upon termination under paragraph (1) of this provision we will pay you the
Accumulated Value.
5.4 ANNUAL REPORT. We will mail you a statement of the value of this
contract at least once each year until the Maturity Date. The report will
show the Accumulated Value and any additional information required by law.
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6. SURRENDER
- ----------------------------------------------------------------------------
6.1 FULL SURRENDER. On or before the Maturity Date, you may surrender
this contract for its Cash Surrender Value by giving Written Notice before
the Maturity Date and while the Annuitant is alive. The surrender will be
effective on the later of:
1) The date we receive Written Notice; and
2) The date you specify.
6.2 CASH SURRENDER VALUE. The Cash Surrender Value on any date is equal
to:
1) The Accumulated Value;
Less
2) Any Surrender Charge (see Section 6.4); and.
3) Any charges made for state and local taxes at the time of surrender.
The Cash Surrender Values are not less than the minimum values required by
law.
6.3 PARTIAL SURRENDER. On or before the Maturity Date, you may surrender
a portion of the Accumulated Value by giving Written Notice before the
Maturity Date and while the Annuitant is alive. The portion surrendered is
the Partial Surrender. We will deduct any Surrender Charge (see Section
6.4) and any charge for state and local premium taxes from the Partial
Surrender, as determined on the date we receive Written Notice.
A Partial Surrender:
1) Must be at least $500;
2) Will reduce the Accumulated Value by the amount of the Partial
Surrender. The reduction will be applied against each subaccount
of the Variable Account and against the Fixed Account according
to the ratio for this contract of the accumulated value in the
subaccount or Fixed Account to the sum of the accumulated values
in all the subaccounts and the Fixed Account. With our approval,
you may choose other allocations to the subaccounts and the Fixed
Account;
3) Must not reduce the remaining Accumulated Value to less than
$1,000; and
4) Will be effective on the date we receive Written Notice.
V2-VY-FPVA-9 page 9
Contract Number: 1234567
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6. SURRENDER (continued)
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6.4 SURRENDER CHARGE. A Surrender Charge will be applied to Full and
Partial Surrenders. The charge is made as a percentage of the Accumulated
Value surrendered. The percent applied is shown on page 3. However:
1) On any date, the sum of all Surrender Charges applied up to that
date will not exceed 6 1/2% of the total of premiums paid to
that date;
2) For any surrender made more than three years after the Date of
Issue, no Surrender Charge will be deducted from the portion of
the Accumulated Value surrendered which is paid under:
a) Option 2, 3 or 3V of Section 9.2 provided that payments will
be made for at least 5 years and that the proceeds may not be
withdrawn; or
b) Option 4 or 4V of Section 9.2 or any other life income
option agreed to by us;
3) In each Contract Year you may surrender without a Surrender
Charge up to 10% of the Accumulated Value existing at the time
the first surrender is made in that Contract Year; and
4) No Surrender Charge will be applied for surrenders made during
Total Disability of the Annuitant.
Total Disability is a disability:
a) Which has continued for six consecutive months;
b) Which results from bodily injury sustained or disease which
first appears while this contract is in force; and
c) Which completely prevents the Annuitant from engaging in an
Occupation for gain or profit. During the first 24 months of
disability, Occupation is the Annuitant's regular occupation
when the disability begins. After this, it is any
occupation for which the Annuitant is or becomes qualified
by reason of education, training or experience. However:
i) If the Annuitant is a full-time student under age 18 when
Total Disability begins, Occupation for gain or profit
means attending school outside the home This definition
applies until the disabled Annuitant reaches age 18, or
24 months if later.
ii) If the Annuitant is primarily a homemaker when Total
Disability begins, Occupation for gain or profit means
performing household duties.
V2-VY-FPVA-10 page 10
Contract Number: 1234567
- ----------------------------------------------------------------------------
7. ACCOUNTS AND UNIT VALUES
- ----------------------------------------------------------------------------
7.1 VARIABLE ACCOUNT. We have established the Variable Account shown on
page 4 as a separate investment account according to Minnesota laws. The
Variable Account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940.
The Variable Account has subaccounts which invest in shares of the LB Series
Fund, Inc. (the Fund). The Fund is registered with the SEC under the
Investment Company Act of 1940 as a diversified open-end management
investment company. Each subaccount purchases shares in a specified
portfolio of the Fund. Amounts allocated to each subaccount buy shares of
the portfolio for that subaccount at net asset value. The portfolios and
subaccounts are shown on page 4. We may add additional subaccounts to invest
in a new portfolio of the Fund or in a different investment company.
We own the assets of the Variable Account. Assets equal to the reserves and
other liabilities of the Variable Account may not be charged with
liabilities from any other business we conduct. However, we may transfer
assets of the Variable Account in excess of account reserves and liabilities
to our General Account.
Income and realized and unrealized gains and losses from each subaccount of
the Variable Account are credited to or charged against that subaccount.
The value of the assets in the Variable Account is determined at the end of
each Valuation Day.
7.2 FIXED ACCOUNT. Amounts allocated to the Fixed Account are invested
with our General Account assets. Interest will be credited on Net Premiums
allocated to the Fixed Account and on accumulated value transferred to the
Fixed Account from the date of allocation or transfer. The rate applied to
amounts in the Fixed Account depends on the date of allocation or transfer
to the Fixed Account. For any amount allocated or transferred to the Fixed
Account, we guarantee that the initial interest rate will be effective for
at least 12 months, and subsequent interest rates will not be changed more
often than once every 12 months. Interest will be compounded daily.
Interest rates will never be less than an effective rate of 4.0% per year.
The last-in, first-out accounting method will be used to credit interest for
Partial Surrenders, transfers and the Administrative Charge.
7.3 GENERAL ACCOUNT. The General Account includes all assets we own that
are not in the Variable Account or any other separate account of the
Society. Reserves for any Fixed Annuity are maintained in the General
Account.
7.4 ALLOCATION OF PREMIUMS. The first premium payment is applied on the
Date of Issue. After the Date of Issue, payments are applied on the date we
receive them.
The Date of Issue of this contract is the date the first premium is received
in our Home Office. The Date of Initial Premium Allocation is the date we
approve your Application. Both of these dates are shown on page 3.
Premiums are allocated to the subaccounts of the Variable Account and to the
Fixed Account as follows:
1) For each premium received before the Date of Initial Premium
Allocation, the Net Premium will be applied to the Money Market
Subaccount as of the Date of Issue. On the Date of Initial
Premium Allocation, the accumulated value in the Money Market
Subaccount will be allocated to the subaccounts of the Variable
Account and to the Fixed Account.
2) For each premium received on or after the Date of Initial
Premium Allocation, the Net Premium will be allocated to the
subaccounts of the Variable Account and to the Fixed Account.
Premiums are allocated according to the premium allocation percentages for
this contract. The initial premium allocation percentages are specified in
the Application. You may change these premium allocation percentages by
giving Written Notice. The change will be effective for each premium
received with or after your notice. The sum of the premium allocation
percentages must be 100%, and each premium allocation percentage must be a
whole number not more than 100%. We reserve the right to adjust your
allocation to eliminate fractional percentages.
V2-VY-FPVA-11 page 11
Contract Number: 1234567
- ----------------------------------------------------------------------------
7. ACCOUNTS AND UNIT VALUES (continued)
- ----------------------------------------------------------------------------
7.5 TRANSFER OF ACCUMULATED VALUES. On or before the Maturity Date, you
may transfer some or all of the accumulated values among the subaccounts of
the Variable Account and the Fixed Account. You do this by giving Written
Notice. The transfer of accumulated value is subject to the following:
1) The total amount transferred cannot be less than the smaller of:
a) $500; and
b) The accumulated value in the subaccount(s) or Fixed Account
from which the transfer is being made.
2) The transfer will occur at the end of the day on which we receive
Written Notice.
3) We reserve the right to limit the number of transfers in each
Contract Year. However, subject to the limit on Fixed
Account transfers stated in (4), we will always allow at least
two transfers per Contract Year.
4) Transfers from the Fixed Account must be made on or within 45
days after a Contract Anniversary. Only one transfer from the
Fixed Account will be allowed per Contract Year.
We may defer making transfers subject to the same conditions as in Section
2.10 Deferment.
7.6 NUMBER OF ACCUMULATION UNITS. The number of accumulation units for
this contract in any subaccount may increase or decrease at the end of each
Valuation Period. The number of accumulation units increases when, during
the period:
1) Premiums are allocated to the subaccount; or
2) Accumulated value is transferred to the subaccount from another
subaccount or from the Fixed Account.
The number of accumulation units decreases when, during the Valuation
Period:
1) Accumulated value is transferred from the subaccount to another
subaccount or to the Fixed Account;
2) Partial Surrenders are applied against the subaccount; or
3) Administrative Charges are taken from the subaccount.
The increase or decrease in the number of accumulation units for this
contract in any subaccount is equal to:
1) The dollar amount allocated or transferred to or from that
subaccount;
Divided by
2) The accumulation unit value for that subaccount at the end of the
Valuation Period during which the amounts are allocated or
transferred.
V2-VY-FPVA-12 page 12
Contract Number: 1234567
- ----------------------------------------------------------------------------
7. ACCOUNTS AND UNIT VALUES (continued)
- ----------------------------------------------------------------------------
7.7 ACCUMULATION UNIT VALUE. The accumulation unit value for a
subaccount is equal to (1) divided by (2) where:
1) Is the sum of:
a) The net asset value of the corresponding portfolio of the
subaccount at the end of the current Valuation Period; plus
b) The amount of any dividend or capital gain distribution made
by the portfolio if the "ex-dividend" date occurs during the
Valuation Period; plus or minus
c) A charge or credit for any taxes reserved for that we
determine to be a result of the investment operation of the
portfolio;
Less
d) The risk charge we deduct for each day in the Valuation
Period. This charge for mortality and expense risks is
guaranteed not to exceed, on an annual basis, 1.25% of the
daily value of the subaccount.
2) Is the number of accumulation units of that subaccount for all
contracts, including accumulation units held as reserves for
Variable Annuities.
Accumulation unit values are determined at the end of each Valuation Day
before the transfer or allocation of any amounts to or from the subaccounts.
The accumulation unit values may increase or decrease on each Valuation Day.
7.8 NUMBER OF ANNUITY UNITS. If a Variable Annuity is payable, each
annuity payment is defined in terms of annuity units. The total amount
payable is the sum of the payments from each subaccount. The number of
annuity units payable from any subaccount is equal to:
1) The dollar amount of the first annuity payment provided by that
subaccount;
Divided by
2) The annuity unit value for that subaccount on the Valuation Day
on which the first payment is calculated.
After the first payment, the number of annuity units payable from each
subaccount will not change unless you request a change in allocation as
provided in Section 7.11. The dollar amount payable from any subaccount
will be equal to:
1) The number of units payable from that subaccount;
Multiplied by
2) The annuity unit value for that subaccount on the Valuation Day
on which the payment is calculated.
7.9 ANNUITY UNIT VALUE. On any Valuation Day, the annuity unit value for a
subaccount is equal to:
1) The annuity unit value for the subaccount at the end of the prior
Valuation Day;
Multiplied by
2) The Investment Factor (see Section 7.10) for the subaccount for
that day;
Multiplied by
3) A discount factor equivalent to an assumed interest rate of
3 1/2% per year.
Annuity unit values are determined at the end of each Valuation Day before
the transfer or allocation of any amounts to or from the subaccounts. The
annuity unit values may increase or decrease on each Valuation Day.
V2-VY-FPVA-13 page 13
Contract Number: 1234567
- ----------------------------------------------------------------------------
7. ACCOUNTS AND UNIT VALUES (continued)
- ----------------------------------------------------------------------------
7.10 INVESTMENT FACTOR. The Investment Factor for a subaccount measures
the investment performance of that subaccount. The Investment Factor for a
subaccount is equal to:
1) The accumulation unit value of the subaccount at the end of the
current Valuation Period;
Divided by
2) The accumulation unit value of the subaccount at the end of the
last prior Valuation Period.
7.11 CHANGE IN ANNUITY UNIT ALLOCATION. You may change the allocation of
Annuity Units among the subaccounts of the Variable Account. Any change in
Annuity Unit allocations:
1) Will occur at the end of the day on which we receive Written
Notice;
2) Will be based on annuity unit values for the subaccounts on that
day; and
3) May be made only once each contract year.
7.12 CHANGE OF INVESTMENT POLICY. The investment policy for the Variable
Account is described on page 4. We may change the investment policy of the
Variable Account with the approval of the insurance supervisory officials of
the State of Minnesota. The approval process has been filed with the
insurance department of the state in which this contract is delivered. We
will notify you if there is a material change in investment policy.
7.13 CHANGE OF PORTFOLIO. We may determine that a portfolio has become
unsuitable for investment by a subaccount or shares of a portfolio may cease
to be available for investment. In such event, we may substitute another
portfolio of the investment company or invest in a different investment
company. This change would not be made unless approved by:
1) The SEC; and
2) If required, the insurance supervisory officials in the state
where this contract is delivered.
- ----------------------------------------------------------------------------
8 BENEFICIARY
- ----------------------------------------------------------------------------
8.1 BENEFICIARY. The beneficiary is named in the Application. You may
change the beneficiary by giving Written Notice. The change will become
effective if:
1) We receive Written Notice; and
2) We acknowledge the change.
The effective date of the change will be the date the notice was signed. We
will not be liable for any payment made or action taken by us before we
receive the notice.
8.2 RIGHTS OF BENEFICIARIES. Unless you designate otherwise, a surviving
beneficiary entitled to receive Annuity Income may:
1) Designate a contingent beneficiary; or
2) Take as a lump sum the commuted value of the Annuity Income
remaining payable to the end of the Guaranteed Period. The
commuted value will be based on the interest rate used to
determine the Annuity Income.
8.3 SUCCESSION OF BENEFICIARIES. You may designate one or more
beneficiaries to receive any Death Proceeds payable or any Annuity Income
remaining payable upon the Annuitant's death. You will classify each
beneficiary as primary or contingent. Upon the Annuitant's death, we will
pay to the primary beneficiaries who survive the Annuitant any proceeds or
income payable. If none survive, we will pay the surviving contingent
beneficiaries. In the event no beneficiary survives the Annuitant, any
Death Proceeds payable or the commuted value of any Annuity Income remaining
payable will be paid to the Annuitant's estate.
Other designations or successions of beneficiaries may be arranged with us.
8.4 SHARE OF PROCEEDS. Unless you specify otherwise, each beneficiary
receiving payments will have an equal share in any Death Proceeds payable or
any Annuity Income remaining payable.
V2-VY-FPVA-14 page 14
Contract Number: 1234567
- ----------------------------------------------------------------------------
9. SETTLEMENT PROVISIONS
- ----------------------------------------------------------------------------
9.1 PAYMENT OF PROCEEDS. Proceeds from death or surrender are payable in
a lump sum unless otherwise provided. On Death Proceeds, we will pay
interest at the rate payable in Option 1 - Interest Income. Interest is
payable from the date the amount of Death Proceeds is calculated (see
Section 2.3) until the date of settlement. Instead of a lump sum, proceeds
of $2,000 or more may be paid under any settlement option in Section 9.2 by
means of a supplementary contract which we will issue.
9.2 OPTIONAL PLANS OF SETTLEMENT. Proceeds payable under a settlement
option may be paid under one or more of the following options.
OPTION 1 - INTEREST INCOME. The proceeds may be left on deposit. Interest
will be paid at a rate of not less than 3% per year. These proceeds may be
withdrawn upon request.
FIXED ANNUITY OPTION 2 - INCOME OF A FIXED AMOUNT. We will pay an income of
a fixed amount at agreed upon intervals. This income is subject to these
conditions:
1) Income per year must not be less than 6% of the proceeds.
2) Income is paid until the proceeds, with interest credited at the
rate of 3 1/2% per year on the unpaid balance, are paid in full.
This income may be increased by the crediting of additional
interest.
FIXED ANNUITY OPTION 3 AND VARIABLE ANNUITY OPTION 3V - INCOME FOR A FIXED
PERIOD. We will pay an income for a fixed number of years, not to exceed
30. Guaranteed payments for Options 3 and 3V are shown in the table on page
16. We use an effective annual interest rate of 3 1/2%. Under Option 3,
the income per $1,000 of proceeds will not be less than the amount shown.
Under Option 3V, the first monthly payment per $1,000 of proceeds in any
subaccount will be the amount shown.
FIXED ANNUITY OPTION 4 AND VARIABLE ANNUITY OPTION 4V - LIFE INCOME WITH
GUARANTEED PERIOD. We will pay an income for the lifetime of the payee. If
the payee dies during the guaranteed period, payments will be continued to
the end of that period and will be paid to the beneficiary. A period of 10
or 20 years may be elected. Guaranteed payments for Options 4 and 4V are
shown in the table on page 17. The incomes are based on the 1983 Table A
for Annuity Valuation using an effective annual interest rate of 3 1/2%.
Under Option 4, the income per $1,000 of proceeds will not be less than the
amount shown. Under Option 4V, the first monthly payment per $1,000 of
proceeds in any subaccount will be the amount shown. After the first
payment is made, Options 4 and 4V may not be revoked or changed.
OPTION 5 - OTHER OPTIONS. The proceeds may be paid under any other
settlement option agreeable to us.
V2-VY-FPVA-15 page 15
Contract Number: 1234567
- ----------------------------------------------------------------------------
9. SETTLEMENT PROVISIONS (continued)
- ----------------------------------------------------------------------------
9.3 ELECTION OF AN OPTION. You may elect an option by Written Notice
during the Annuitant's lifetime. The option must be elected before proceeds
become payable. Assignees and third-party owners may elect an option only
with our consent. Election of Options 4 or4V may be made only if the payee
is a natural person who is the Annuitant or a beneficiary.
If Death Proceeds are payable, the beneficiary may elect a settlement option
other than Option 1 - Interest Income within one year from the date of death
provided that:
1) The manner of settlement has not been restricted before the
Annuitant's death;
2) The Death Proceeds have not been paid; and
3) Either:
a) The principal and interest are completely distributed
within 5 years after the date of death; or
b) If you have designated a natural person as beneficiary,
distribution of the principal and interest is made by means of
a periodic payment which:
i) Begins within one year after the date of death; and
ii) Is not guaranteed for a period which extends beyond the
life expectancy of the beneficiary.
Election of an option is subject to these conditions:
1) Payments must not be less than $25;
2) Payments are made only at annual, semiannual, quarterly or
monthly intervals; and
3) The first payment, except under Option 1 - Interest Income, is
payable as of the date the option becomes effective. Under
Option 1, interest is payable at the end of the first payment
interval.
If annuity payments would be or become less than $25, we reserve the right
to change the frequency of payments to an interval such that payments are
not less than $25.
<PAGE>
<TABLE>
<CAPTION>
OPTIONS 3 AND 3V
Option 3 - Guaranteed Monthly Payments for Each $1,000 of Proceeds
Option 3V - First Monthly Payment for Each $1,000 of Proceeds
- -----------------------------------------------------------------------------------------------------
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment Payable Payment Payable Payment
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 84.65 7 13.37 13 7.93 19 5.96 25 4.96
2 43.05 8 11.89 14 7.48 20 5.75 26 4.84
3 29.19 9 10.75 15 7.10 21 5.56 27 4.73
4 22.26 10 9.83 16 6.76 22 5.39 28 4.62
5 18.11 11 9.08 17 6.46 23 5.23 29 4.53
6 15.34 12 8.46 18 6.20 24 5.09 30 4.44
- -----------------------------------------------------------------------------------------------------
Annual, Semiannual or Quarterly payments are 11.813, 5.957 and 2.991 respectively,
times the Monthly payments.
- -----------------------------------------------------------------------------------------------------
</TABLE>
V2-VY-FPVA-16 page 16
<TABLE>
<CAPTION>
Contract Number: 1234567
OPTIONS 4 AND 4V
Male Payee - Monthly Life Income
- -----------------------------------------------------------------------------------------------------
Option 4 - Guaranteed Monthly Life Income for Each $1,000 of Proceeds
Option 4V - First Monthly Life Income Payment for Each $1,000 of Proceeds
- -----------------------------------------------------------------------------------------------------
Payments Payments Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
40 3.94 3.89 70 6.87 5.52
45 4.20 4.11 71 7.05 5.55
50 4.51 4.36 72 7.22 5.59
55 4.91 4.66 73 7.40 5.62
60 5.42 4.97 74 7.57 5.64
61 5.54 5.04 75 7.75 5.65
62 5.67 5.10 76 7.92 5.65
63 5.80 5.16 77 8.09 5.65
64 5.94 5.22 78 8.26 5.65
65 6.08 5.28 79 8.42 5.65
66 6.23 5.33 80 8.57 5.65
67 6.38 5.38 85 9.20 5.65
68 6.54 5.43 90 9.59 5.65
69 6.71 5.48 95 9.73 5.65
- -----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Female Payee - Monthly Life Income
- -----------------------------------------------------------------------------------------------------
Option 4 - Guaranteed Monthly Life Income for Each $1,000 of Proceeds
Option 4V - First Monthly Life Income Payment for Each $1,000 of Proceeds
- -----------------------------------------------------------------------------------------------------
Payments Payments Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
40 3.72 3.70 70 6.23 5.37
45 3.92 3.88 71 6.40 5.43
50 4.18 4.11 72 6.58 5.48
55 4.51 4.38 73 6.76 5.52
60 4.93 4.70 74 6.95 5.57
61 5.03 4.77 75 7.14 5.60
62 5.14 4.84 76 7.34 5.63
63 5.25 4.91 77 7.54 5.65
64 5.37 4.98 78 7.74 5.65
65 5.50 5.05 79 7.94 5.65
66 5.63 5.12 80 8.13 5.65
67 5.77 5.19 85 8.97 5.65
68 5.91 5.25 90 9.48 5.65
69 6.07 5.32 95 9.73 5.65
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
V2-VY-FPVA-17 page 17
LUTHERAN BROTHERHOOD
[LOGO] VARIABLE INSURANCE
PRODUCTS COMPANY
A Stock Life Insurance Company
Minneapolis, Minnesota 55415
FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY
- ----------------------------------------------------------------------------
Annuity Income payable at maturity.
Death Proceeds payable at death before maturity.
Flexible premiums.
Return on investments reflected in contract benefits.
Annual dividends payable if earned.
#20757
28
<PAGE>
EXHIBIT 5
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South PART I
Minneapolis, Minnesota 55415 APPLICATION FOR INSURANCE OR ANNUITY
============================================================================
COMPLETE THIS SECTION FOR ALL APPLICATIONS
============================================================================
1. Print full name of Proposed Insured
- ----------------------------------------------------------------------------
LAST FIRST MIDDLE SOC SEC NO.
- ----------------------------------------------------------------------------
STREET ADDRESS (ENTER OTHER BILLING INSTRUCTIONS IN NO. 20)
- ----------------------------------------------------------------------------
CITY STATE ZIP
- ----------------------------------------------------------------------------
a. BIRTHDATE b .AGE c. SEX d. BIRTH STATE e. MARITAL STATUS
MO DA YR
2.
============================================================================
QUESTIONS 3-7 AGES 18 & OVER
============================================================================
3. EMPLOYER
- ----------------------------------------------------------------------------
4. BUSINESS ADDRESS
- ----------------------------------------------------------------------------
5. OCCUPATIONAL DUTIES
- ----------------------------------------------------------------------------
6. GROSS INCOME 7. HOW LONG AT THIS OCCUPATION?
$ YEARS MONTHS
============================================================================
8. IS EACH PERSON TO BE INSURED (OR ANNUITANT) AN ADULT OR JUVENILE CONTRACT
MEMBER OF LUTHERAN BROTHERHOOD?
/ / YES / / NO
(IF NO, COMPLETE MEMBERSHIP APPLICATION IF APPLICABLE)
============================================================================
9. Insurance in force on persons proposed for life coverage
Answer all items. If none, state "None"
============================================================================
NAME OF PERSON COMPANY LIFE AMOUNT ACC. DEATH AMT.
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
10. Do you intend replacement or change of or borrowing on any existing
life, annuity or health insurance because of this application for
insurance?
/ / Yes / / No
If "Yes" give details in number 20 and complete
Disclosure Statement if applicable
============================================================================
11. COMPLETE THIS SECTION FOR FAMILY MEMBER(S) INCLUDED ON LIFE COVERAGE
============================================================================
FULL NAME SEX BIRTHDATE AGE HEIGHT WEIGHT RELATIONSHIP
MO DA YR
- ----------------------------------------------------------------------------
SPOUSE
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Unless otherwise requested in number 20, life insurance proceeds for covered
family members will be paid to the Insured, if living; otherwise to the
covered family member's estate.
Child Rider -- Reduced Death Benefits:
Birth through 14 days - $0
15 days to Age 6 months - 50% of the Child Rider amount
Age 6 months and up - amount of the Child Rider.
============================================================================
12. COMPLETE FOR LIFE AGE 16 AND OVER
============================================================================
Give details for "Yes" answers under number 20. Yes No
Has any person to be insured:
a. Applied elsewhere, either currently
or within the past 6 months, for Life
or Health Insurance? / / / /
b. Flown in the past 3 years, or have any
intent to fly as a pilot, co-pilot,
student pilot, or crew member? / / / /
(If "Yes", complete an Aviation Supplement).
c. In the past 3 years been refused a drivers
license, had a license suspended or had a
moving violation or accident? / / / /
If "Yes", Drivers license No.
-----------------
d. Participated in skydiving, skin or scuba
diving, hang gliding, or vehicle racing or
does any person intend to? / / / /
============================================================================
13. Complete for Persons Smoke Formerly Smoke If Yes, Use other form
20 and Over Cigarettes? Cigarettes? Date of tobacco?
Discontinued
============================================================================
First Name Yes No Yes No Yes No Details
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
============================================================================
14. In the past 10 years, has any person to be insured had or been told they
had Acquired Immune Deficiency Syndrome ("AIDS"), AIDS Related Complex
("ARC") or any other immunosuppressive condition or had a positive test
for antibodies to the AIDS Virus?
/ / Yes / / No
If "Yes" give details in number 20.
============================================================================
15. COMPLETE FOR ALL APPLICATIONS
============================================================================
a. Plan b. Amount $ c. / / Nonsmoker
------------- -------------
d. Death Benefit Option / / A / / B
e. Planned Annual Premium $
------------------------------------------------
f. Additional Benefits
/X/ Waiver of Monthly Deduction
/ / Accidental Death
/ / Guaranteed Increase Option $
--------------------------------------
/X/ COLA
---------------------------------------------------
---------------------------------------------------
g. / / Spouse Rider $
-------------------------------
/ / Child Rider $
-------------------------------
h. / / Other
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
16. Premium Allocation
a. Growth Subaccount %
------------
b. Income Subaccount %
------------
c. Money Market Subaccount %
------------
d. %
----------------------- ------------
Allocations must total 100 %
============================================================================
17. SUITABILITY
============================================================================
a. Has the Proposed Insured and has the Applicant Owner, if other than
the Proposed Insured, received a current prospectus for the contract
applied for?
/ / Yes / / No
b. Do you understand that under the contract applied for the amount of
the Accumulated Value may increase or decrease daily based on the
investment experience of the Separate Account and that the amount or
duration of the Death Benefit may vary with the Accumulated Value?
/ / Yes / / No
c. With this in mind, is the contract in accord with your investment
objectives and your anticipated insurance and financial needs?
/ / Yes / / No
- ------------------------------------------------- ----------------
Applicant/Owner Signature Date
- ------------------------------------------------- ----------------
Registered Principal Signature Date
(Home Office use only)
============================================================================
18. BENEFICIARY
============================================================================
BASIC INSURED ONLY
For other covered family members, see number 11. (Unless otherwise directed,
proceeds will be paid equally to those living at the death of insured.)
Primary Relationship
First Contingent
Second Contingent
I include as part of my beneficiary: CHECK ONLY ONE CLASS DESIGNATION
/ / 1st Contingent -- My children born by my spouse named above or
legally adopted by us
/ / 2nd Contingent -- My children born by my spouse named above or
legally adopted by us.
/ / 1st Contingent -- My brothers and sisters born by my parents named
above or legally adopted by them.
/ / 2nd Contingent -- My brothers and sisters born by my parents named
above or legally adopted by them.
/ / Add Interest Income Settlement Option
/ / Add Day Survival Provision
---------
/ / Primary / / Entire Beneficiary
============================================================================
19. ENDORSEMENTS
============================================================================
(Home Office use only. Acceptance of the contract shall ratify changes
entered here.)
============================================================================
20. DETAILS & INSTRUCTIONS
============================================================================
/ / Third Party Owner (Complete Third Party App.)
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South THIRD PARTY
Minneapolis, Minnesota 55415 OWNERSHIP APPLICATION
============================================================================
21. COMPLETE FOR THIRD PARTY OWNERSHIP - LIFE OR ANNUITY
============================================================================
OWNER: Except as stated in Ownership -- Juvenile Insurance of Part I, the
Proposed Insured or Annuitant will be the Owner of any contract issued on
this application, unless another owner is listed below. The Owner has every
right and privilege otherwise given the Insured or Annuitant under any such
contract except the right to purchase additional insurance under any
Guaranteed Insurability Benefit included in any contract. The Insured will
retain this right. Contract transactions between Lutheran Brotherhood
Variable Insurance Products Company and the Owner do not require the
Insured's or Annuitant's notice or consent.
APPLICANT/OWNER NAME(S)
(If corporation give state and date of incorporation)
Social Security or
Name Tax ID Number
------------------------------------- ------------------
Address Birthdate Sex
--------------------------------- ----------- ------
Social Security or
Name Tax ID Number
------------------------------------- ------------------
Address Birthdate Sex
--------------------------------- ----------- ------
If more than one Applicant/Owner * indicate type of ownership
/ / Joint tenancy with right of survivorship, or / / Tenancy in common
ENTER PREMIUM BILLING INSTRUCTIONS UNDER DETAILS AND INSTRUCTIONS PART I
In states where applicable, the Applicant/Owner herein represents that he or
she is (check only one)
/ / a. Eligible for membership in Lutheran Brotherhood, the same as if
application were being made for insurance or annuity in
Lutheran Brotherhood on the Applicant/Owner; or
/ / b. A trustee or custodian, its successors or assigns purchasing
the contract for a qualified retirement plan; or
/ / c. An employer purchasing the contract pursuant to a deferred
compensation or split dollar plan; or
/ / d. An employer or individual purchasing the contract pursuant to a
keyperson or business continuation agreement; or
/ / e. The trustee of a trust or custodial account, its successors or
assigns, established for the benefit of the Insured/Annuitant
and or the Insured/Annuitant's family; or
/ / f. An Internal Revenue Code Section 501(c)(3) organization
purchasing the contract in order to complete a charitable gift
by the Insured/Annuitant to the Applicant/Owner.
Applicant/Owner Signature(s)
(if corporation, give title of officer)
- ------------------------------------
Proposed Insured/Annuitant Signature (1)
-----------------------------------
- ------------------------------------
Date (2)
-----------------------------------
- ------------------------------------
Dated at
(3)
- ------------------------------------ -----------------------------------
Reg. Rep Signature No.
* If more than one Applicant/Owner, all must act
in concert to exercise ownership rights.
<PAGE>
PART I (Continued)
============================================================================
COMPLETE FOR LIFE INSURANCE AGES 0 - 17
============================================================================
22. Present Height Weight
------------------- --------------------
23. Birth Weight (if under age 1)
--------------------------------
24. Name/Address -- child's personal physician
------------------------------------------------------------------------
------------------------------------------------------------------------
25. Date/Reason last consulted
------------------------------------------------------------------------
------------------------------------------------------------------------
26. Treatment given or medication prescribed.
------------------------------------------------------------------------
------------------------------------------------------------------------
Yes No
27. Does child have, or in the past five years had,
any physical, mental or nervous disorder or
abnormality or attended a special school? / / / /
28. In the past five years has child had (or had
medical advice to have) any examination, X-ray,
EKG, heart study, blood test or other diagnostic
test or ever had an operation? / / / /
29. In the past five years, has child had any
medical care, consulted a physician or been
hospitalized for any illness, disease or injury
or for any reason not already noted? / / / /
30. Is child taking treatment or medicine? / / / /
- ----------------------------------------------------------------------------
DETAILS OF "YES" ANSWERS
- ----------------------------------------------------------------------------
Question No.
============================================================================
Parent Signature (Only if parent not applicant)
Date
- ------------------------------------------------- -------------------
============================================================================
OWNERSHIP -- JUVENILE INSURANCE
============================================================================
31. If Proposed Insured is a minor, Applicant will be owner to Proposed
Insured's age 18. If the applicant dies before the Proposed Insured's
age 18, the owner will be the surviving beneficiary, or if none survive,
a surviving parent or legally appointed guardian of the Proposed Insured
Ownership will pass to the Proposed Insured at age 18 unless amended by
the applicant owner.
============================================================================
COMPLETE FOR ALL APPLICATIONS
============================================================================
32. Premiums will be paid / / A / / SA / / Q / / New PAC
/ / Existing PAC #
-------------------------
33. Payment with the application $ / / None
----------------------
34. IT IS UNDERSTOOD THAT UNDER THE CONTRACT APPLIED FOR THE AMOUNT OF THE
ACCUMULATED VALUE MAY INCREASE OR DECREASE DAILY BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT AND THAT THE AMOUNT OR DURATION OF
THE DEATH BENEFIT MAY VARY WITH THE ACCUMULATED VALUE.
35. I have read the statements and answers recorded on this Part I of my
application. They are given to obtain this insurance and are, to the
best of my knowledge and belief, true and complete and correctly
recorded. I agree that they will become part of this application and
any contract issued. I also agree that
a. Except as provided in the Conditional Life Insurance Agreement,
issued if the full first premium is paid in advance, no insurance
will take effect unless and until:
1. A contract of insurance is issued and delivered;
2. The full first premium is paid; and
3. The health of all Proposed Insureds remains as stated in
Part I and Part II of the application.
b. No Registered Representative has the authority to waive any
question contained in the application or to modify the
application in any way.
c. Changes in amount, plan, benefits, classification, or issue age
applied for must be agreed to in writing by me.
- ----------------- -------------------------------------------
Date Proposed Insured/Annuitant Signature
(Age 18 or over) or Applicant Signature if
Proposed Insured below age 18
- ---------------------- -------------------------------------------
Dated at Spouse Signature (if coverage applied for)
- ------------------------------ -------------------------------------------
Reg. Rep. Signature No. Third Party Applicant/Owner Signature
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 4th Ave. South
Minneapolis, Minnesota 55415 APPLICATION -- PART II
============================================================================
1. Proposed Insured
LAST FIRST MIDDLE
- ----------------------------------------------------------------------------
2. Height ft. in. Weight lbs.
--------- --------- -------------
3. List below (a.) name & address of personal physician,
(b.) date & reason last consulted, and
(c.) results.
Proposed Insured
a.
------------------------------------------------------------------
b.
------------------------------------------------------------------
c.
------------------------------------------------------------------
Spouse (If coverage applied for)
a.
------------------------------------------------------------------
b.
------------------------------------------------------------------
c.
------------------------------------------------------------------
============================================================================
COMPLETE THIS SECTION FOR ALL PERSONS TO BE INSURED.
DETAILS
OF
"YES" ANSWERS
============================================================================
YES NO QUES. PERSON
NO.
4. IN THE PAST 10 YEARS HAS ANY PERSON
TO BE INSURED BEEN TREATED FOR OR
HAD ANY INDICATION OF:
a. Disorder of eyes, ears, nose,
throat or skin? / / / /
b. Dizziness, fainting, convulsions,
epilepsy, paralysis, stroke, mental
or any nervous disorder? / / / /
c. Shortness of breath, blood spitting,
allergies, asthma, emphysema, or
other respiratory disorder? / / / /
d. Chest pain, high blood pressure,
heart attack, heart murmur, or
heart disorder? / / / /
e. Anemia, varicose veins, disorder
of blood or blood vessels, or
immune disorder? / / / /
f. Intestinal bleeding, ulcer,
colitis, hernia, hemorrhoids,
chronic diarrhea, or other
disorder of stomach, pancreas,
intestines, liver or gallbladder? / / / /
g. Diabetes, thyroid, or other
glandular disorder? / / / /
h. Sugar, albumin, blood in urine;
stone or other disorder of the
kidneys, bladder, or prostate? / / / /
i. Disorder of reproductive
organs, (male or female), breasts,
menstruation, pregnancy (including
complications of pregnancy and
caesarean section)? / / / /
j. Arthritis, gout, back disorder,
sciatica, disorder of muscles,
bones, nerves, joints, or
chiropractic or therapist
consultations? / / / /
k. Cancer, tumor, cyst, growth
or disorder of lymph glands? / / / /
- ----------------------------------------------------
5. OTHER THAN ABOVE, WITHIN THE PAST
5 YEARS, HAS ANY PERSON TO BE INSURED:
a. Had a checkup, physical,
consultation, or any other
illness or surgery? / / / /
(state specific reason why done
or what prompted)
b. Been treated or evaluated at a
hospital, clinic or other facility,
or been advised to have any test or
surgery not completed? / / / /
c. Had an EKG, X-ray, blood
studies or other tests? / / / /
d. Received treatment or any
medication for any reason? / / / /
- ----------------------------------------------------
6. IN THE PAST 10 YEARS, HAS ANY
PERSON TO BE INSURED:
a. Ever requested or received a
pension, benefits or payment
because of any injury, sickness,
or disability? / / / /
b. Been treated or advised to seek
counseling or treatment or joined
a support organization because of
alcohol or drug usage? / / / /
7. HAVE PROPOSED INSURED'S PARENTS,
BROTHERS, OR SISTERS EVER HAD DIABETES,
CANCER, HIGH BLOOD PRESSURE, HEART
DISEASE OR CONGENITAL DISORDER? / / / /
(Give relationship, condition,
current age or age at death)
============================================================================
I have read the statements and answers recorded above. They are, to the
best of my knowledge and belief, true and complete and correctly recorded
and shall be a basis of any contract issued.
- ----------- ------------------ ------------------------------------------
Date Dated at Proposed Insured Signature
- ------------------------------- ------------------------------------------
Reg. Rep. Signature No. Spouse Signature (If coverage applied for)
<PAGE>
============================================================================
REGISTERED REPS. REPORT (AGES 16 & OVER - COMPLETE 1 THRU 15)
============================================================================
YES NO
1. Were all proposed insureds present
when non-medical was completed? / / / /
2. If family coverage applied for has
any family member, who qualifies by
age, been omitted? / / / /
If yes, give details under No. 14.
3. How long have you known proposed insured? How well?
------------- ---------
4. Former address (if not at present address at least 2 years)
------------------------------------------------------------------------
------------------------------------------------------------------------
5. Former employer and address
(if not with present employer at least 2 years)
------------------------------------------------------------------------
------------------------------------------------------------------------
6. Maiden name:
------------------------------------------------------------
7. If proposed insured is now in military service
Branch Rank
---------------------------- ------------------------------
Duties
---------------------------------------------------------------
Alerted for overseas duty?
-------------------------------------------
If yes, include details in No. 14.
8. Proposed Insured Only.
Alternate / /
(LBVIP Products only)
Additional / /
=========================================================================
LIFE PLAN
ADD. BENEFITS
=========================================================================
9. Is application the result of proposed insured's inquiry? / / Yes / / No
10. Does any member of the household receive the BOND? / / Yes / / No
11. I have arranged for:
/ / Medical by the following examiner/Para Med.
/ / Fees have been discussed
Name
-------------------------------------------------
City/State
------------------------------------------------
/ / Urine Specimen / / X-Ray / / EKG / / Blood Chemistry
12. Split Commissions (if applicable)
% Reg. Rep of Record No.
------ -------------------------------- ------------
% Reg. Rep of Record No.
------ -------------------------------- ------------
% Reg. Rep of Record No.
------ -------------------------------- ------------
Signatures of all Registered Reps
Reg. Rep
----------------------------------------------------------------
Reg. Rep
----------------------------------------------------------------
Reg. Rep
----------------------------------------------------------------
13. Phone Interview Information
Telephone Numbers Home ( ) Work ( )
----------------- ---------------
Most convenient time and place for the phone interview:(your time AM/PM)
------------------------------------------------------------------------
May we talk to the Proposed Insured's spouse?
---------------------------
Comments or special instructions
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
14. Details and Instructions
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
15. SOURCE OF BUSINESS (Complete for all cases -- Check box)
/1/ ELNA /H/ SPLIT DOLLAR
/5/ BUY-SELL /I/ KEY PERSON
/7/ FSA /J/ PENSION
/D/ LEAP /K/ DEFERRED COMP.
/E/ FEE PLAN /L/ CH. GIVE-CAP. REPLACE
/F/ PENSION MAX /M/ CH. GIVE-GIFT LIFE INS.
/G/ FSNAR /N/ TSA/IRA
============================================================================
COMPLETE FOR LIFE INS. AGES 0 - 15
ALSO COMPLETE 1, 9, 10 AND 15
============================================================================
16. If other than child's parent, what is applicant's relationship?
------------------------------------------------------------------------
17. Does child reside with both parents? / / Yes / / No
18. Is child being adopted? / / Yes / / No
============================================================================
I CERTIFY THAT I PERSONALLY SOLICITED AND SECURED THIS APPLICATION; THAT I
HAVE READ EACH QUESTION ON IT TO ALL PERSONS TO BE INSURED AND HAVE TRULY
AND ACCURATELY RECORDED THE ANSWERS EXACTLY AS GIVEN. THE UNDERSIGNED
REPRESENTATIVE STATES TO THE BEST OF HIS/HER KNOWLEDGE THIS APPLICATION IS
(NOT) FOR THE PURCHASE OF INSURANCE THAT WILL REPLACE OR CHANGE EXISTING
INSURANCE OR ANNUITY.
--------------------- -------------------------------------------
DATE REG. REP. SIGNATURE
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South AUTHORIZATION TO OBTAIN
Minneapolis, Minnesota 55415 AND DISCLOSE INFORMATION
============================================================================
A. Lutheran Brotherhood Variable Insurance Products Company (LBVIP), its
reinsurers, insurance support organizations and their authorized
representatives, may obtain medical and other information in order to
evaluate my (our) application for insurance or to determine eligibility
for benefits.
B. Any physician, practitioner, hospital, clinic, other medical or medically
related facility, the Veterans Administration, the Medical Information
Bureau, Inc., my employer and consumer reporting agency or insurance
company who possesses information of care, treatment or advice of me or
my children may furnish such information to LBVIP upon presenting this
authorization or a photocopy.
C. This authorization includes information about drugs, alcoholism, or
mental illness.
D. LBVIP or its reinsurers may make a brief report regarding me or my
children to other companies to whom I have applied or may apply.
E. This authorization will be valid from the date signed for a period of two
and one half years.
F. I have read this authorization and know that I may request to receive a
copy. I have received Lutheran Brotherhood Variable Insurance Products
Company's Notice regarding Consumer Reports and the Medical Information
Bureau, Inc.
G. In connection with any investigative consumer report which may be
obtained, I ( / / do or / / do not ) request a personal interview.
- -------------- ------------------------------------------------------
Date Signature of Applicant/Proposed Insured
------------------------------------------------------
Spouse Signature (If coverage applied for)
------------------------------------------------------
Names of Minor Children to be Insured
<PAGE>
============================================================================
CERTIFICATION OF AGE
============================================================================
This is to certify that
-----------------------------------------------------
(Print) First Middle Last
was born on
-----------------------------------------------------------------
Month Day Year
- ---------------------- -------------------------------------
Dated Signature of Annuitant
Age certified by (Registered Representative review of)
/ / Birth Certificate / / Baptism Record
If neither available - two of the following:
/ / Life Insurance Contract / / Passport
/ / Driver's License / / Hospital Record
/ / Confirmation Record / /
------------------------
/ / Marriage Record / /
------------------------
- ----------------------------------------------- ------------------------
Reg. Rep. Signature No. Dated
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Ave South RECEIPT FOR
Minneapolis, Minnesota 55415 ANNUITY APPLICATION
============================================================================
NAME OF ANNUITANT DATE OF RECEIPT AMOUNT RECEIVED
============================================================================
DATED AT SIGNATURE OF REG. REP.
============================================================================
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South, Minneapolis, Minnesota 55415
============================================================================
APPLICATION FOR ASSOCIATE MEMBERSHIP IN LUTHERAN BROTHERHOOD
============================================================================
Name(s) Basis for Membership Identify Organization or Service
- ----------------------------------------------------------------------------
No.
- -------------------- ---------------------- --------------------------------
No.
- -------------------- ---------------------- --------------------------------
No.
- -------------------- ---------------------- --------------------------------
No.
- -------------------- ---------------------- --------------------------------
No.
- -------------------- ---------------------- --------------------------------
BASIS FOR MEMBERSHIP
1. Current Adult or Juvenile Contract Member of Lutheran Brotherhood.
2. Current Associate member of Lutheran Brotherhood.
3. Current member of a Lutheran church congregation.
4. Baptized in the Christian faith under the auspices of a Lutheran
church and professes to be Lutheran. Adult applicant declares that
proposed members below age 18 are Lutheran.
5. Baptized in the Christian faith, confirmed Lutheran and professes to
be Lutheran. Adult applicant declares that proposed members below
age 18 are Lutheran.
6. Baptized in the Christian faith, prior member of a Lutheran church
congregation and professes to be Lutheran. Adult applicant declares
that proposed members below age 18 are Lutheran.
7. Affiliated with a Lutheran church organization and professes to be
Lutheran. Adult applicant declares that proposed members below age 18
are Lutheran.
8. Is a juvenile under six (6) months of age who will be baptized in the
Christian faith under the auspices of a Lutheran church.
It is understood and agreed that if the concurrent application for
insurance, annuity or other service for a proposed member is declined or if
the contract issued as a result of such application is not accepted, then
this application for membership shall be deemed to be amended to exclude
such proposed member.
I hereby recommend the above person(s) for associate membership.
- -------------------- ------------------------------------------
Date Applicant/Annuitant Signature
- ------------------------------ ------------------------------------------
Reg. Rep. Signature No. Spouse Signature (If coverage applied for)
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South APPLICATION FOR LIMITED MEMBERSHIP
Minneapolis, Minnesota 55415 SUPPLEMENT TO APPLICATION PART I
============================================================================
APPLICATION FOR LIMITED MEMBERSHIP IN LUTHERAN BROTHERHOOD
============================================================================
1. I am sponsoring the following person(s) for limited membership. I am
sponsoring these person(s) based on my membership in Lutheran Brotherhood
as described in number 2 below.
Last Name First Name Middle Name Relationship to Applicant
Spouse
- ------------ ----------------- ----------------
Dependent Child
- ------------ ----------------- ----------------
Dependent Child
- ------------ ----------------- ----------------
Dependent Child
- ------------ ----------------- ----------------
Dependent Child
- ------------ ----------------- ----------------
2. My membership basis in Lutheran Brotherhood is:
a./ / I am an Adult Benefit Contract Member under Contract number
--------
b./ / I am applying for adult benefit contract membership. If I do not
become a member because my application is declined or because I do
not accept the contract issued, this application for limited
membership will be considered withdrawn.
c./ / I am an Adult Associate Member under contract number or
--------
fund account number .
--------------------
d./ / I am applying for adult associate membership. If I do not become
an associate member because I do not accept the contract issued,
this application for limited membership will be considered
withdrawn.
3. Notwithstanding any provisions in the application and the contract being
applied for, membership of the named spouse and/or dependent children is
limited by the terms of this limited membership application.
a. The membership rights provided to the Adult Benefit Contract Member or
the Adult Associate Member are not provided to the Limited Member.
b. Limited membership will not entitle the Limited Member to any other
rights or privileges of membership in Lutheran Brotherhood except as
granted by resolution of the Lutheran Brotherhood Board of Directors.
c. Limited membership will not entitle the Limited Member to purchase
additional insurance or annuity unless a new application for limited
membership is completed.
d. Limited membership may be changed to adult benefit contract membership
or adult associate membership if the Limited Member later qualifies
under the rules of Lutheran Brotherhood.
On the basis of the above, I hereby make limited membership application on
behalf of the above named person(s).
Dated , 19
------------------------- ---- -----------------------------------
Signature of Sponsor
- --------------------------------------
Signature of Registered Representative
<PAGE>
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY RECEIPT AND
625 Fourth Avenue South CONDITIONAL LIFE INSURANCE
Minneapolis, Minnesota 55415 AGREEMENT
============================================================================
NAME OF PROPOSED INSURED DATE OF RECEIPT AMOUNT RECEIVED
============================================================================
IMPORTANT -- READ CAREFULLY
THE LIFE INSURANCE CONTRACT YOU HAVE APPLIED FOR WILL NOT BECOME EFFECTIVE
UNLESS AND UNTIL A CONTRACT IS DELIVERED TO YOU AND YOU ACCEPT IT. HOWEVER,
IF YOU HAVE PAID US THE MINIMUM CONDITIONAL INSURANCE PREMIUM, WE WILL
PROVIDE THE FOLLOWING CONDITIONAL INSURANCE. IN NO EVENT WILL ANY INSURANCE
EVER BE IN FORCE UNLESS THE PROPOSED INSURED IS AN ACCEPTABLE RISK UNDER OUR
RULES.
CONDITIONAL LIFE INSURANCE
We will pay the beneficiary the amount of life insurance applied for (not
including any Accidental Death Benefit applied for), if:
1. Part I and Part II of the application and the first of any medical
examinations required for the Proposed Insured by our published
underwriting rules have been completed;
2. All representations on Part I and Part II are true and complete;
3. The Proposed Insured is acceptable under our rules for the plan and
amount of insurance applied for;
4. The Proposed Insured dies as the result of any cause other than
suicide; and
5. The agreement has not terminated.
We will pay the beneficiary an amount equal to any Accidental Death Benefit
applied for, if the above conditions are met and the Insured's death results
solely from accidental causes but not including death resulting from
operating or descending from any aircraft.
INSURANCE APPLIED FOR:
In determining whether we will issue the insurance applied for, we agree
that if Part I and Part II of the application are fully completed and if all
representations are true and correct, we will determine the insurability of
each Proposed Insured as of the date of the application. However, if one or
more medical examinations are initially required for a Proposed Insured by
our published underwriting rules, we will determine the insurability of that
Proposed Insured as of the date of the first such examination, if that date
is later than the date of the application. When we determine the
insurability of each Proposed Insured, we will not consider any change in
health that occurs after the date upon which we agree to determine that
person's insurability. Each Proposed Insured's insurability will be
determined at our Home Office according to our underwriting rules.
TERMINATION OF CONDITIONAL INSURANCE:
This agreement will terminate on the earliest of:
1. The date we refund your premium payment or notify you that we have
rejected your application for life insurance.
2. The date we issue a contract of life insurance.
3. 30 days after a contract is mailed from our Home Office if the plan
and amount of insurance applied for can be issued only at a higher
premium stated in the receipt or issued on a basis other than as you
applied for or you accept or reject such a contract.
In no event will coverage exist under both this agreement and the contract
we offer you.
OTHER CONDITIONS:
No Registered Representative can determine the insurability of any Proposed
Insured, or bind us by making any promise or representation other than as
contained in this agreement.
We make this agreement in consideration of receiving the first full premium
payment.
We will refund your premium payment unless you accept delivery of the
contract we offer or unless we pay a claim under this agreement.
DEFINITIONS:
YOU, YOUR -- the Applicant.
WE, OUR, US -- Lutheran Brotherhood Variable Insurance Products Company
(LBVIP)
DATE OF THE APPLICATION -- the date shown on Part I or Part II, whichever
is later.
BENEFICIARY -- the beneficiary or beneficiaries named in the application.
============================================================================
I UNDERSTAND AND AGREE TO ALL THE TERMS AND CONDITIONS SATED.
============================================================================
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO LBVIP; DO NOT MAKE CHECKS PAYABLE
TO THE REGISTERED REPRESENTATIVE OR LEAVE THE PAYEE BLANK.
============================================================================
DATED AT SIGNATURE OF REG. REP. SIGNATURE OF APPLICANT
============================================================================
<PAGE>
To be delivered to Proposed Insureds/Applicant when Application is written
============================================================================
LUTHERAN BROTHERHOOD
VARIABLE INSURANCE PRODUCTS COMPANY
625 Fourth Avenue South
Minneapolis, Minnesota 55415
============================================================================
NOTICE OF INFORMATION PRACTICES, CONSUMER REPORTS
AND MEDICAL INFORMATION BUREAU, INC.
============================================================================
ARE YOU CONCERNED WITH YOUR PRIVACY? WE ARE.
============================================================================
WELCOME TO THE LUTHERAN BROTHERHOOD FAMILY
============================================================================
Lutheran Brotherhood Variable Insurance Products Company (LBVIP) is a wholly
owned subsidiary of Lutheran Brotherhood. Welcome to the Lutheran
Brotherhood family.
Thank you for providing us with information necessary to complete your
application. Are you wondering why we asked so many questions? They were
necessary to calculate the cost of insurance you applied for. We'll take
care to use the information for that purpose. We take that responsibility
and your rights seriously.
============================================================================
WHERE OUR INFORMATION COMES FROM
============================================================================
The application you just completed is our main source. Your health history
and lifestyle are two of the most important factors we work with in
evaluating your application. Sometimes it is necessary that we verify or
secure more information in addition to what you provide us. Information may
be obtained by correspondence, telephone or personal contact - at our
expense we may:
* Ask you to take an examination, have a special test such as an
electrocardiogram, x-ray, or blood study completed.
* Write to your doctor or any clinic or hospital you may have received
health care from.
* Obtain information from the Medical Information Bureau (MIB) and/or
a consumer reporting agency. More about these organizations later.
* We may correspond with other insurance or reinsurance companies only
to aid us properly in evaluating your application. Your LBVIP
registered representative may ask you questions to help us improve
your insurance program.
* We may contact you by telephone for additional or clarifying
information.
============================================================================
GUARDING YOUR PRIVACY
============================================================================
The information we obtain about you is considered confidential and is
gathered only for the purpose of establishing your insurability.
There will be some rare instances where it would be required of us to
furnish information without your consent. For example, a state insurance
department or law enforcement facility might request information as part of
their regulatory or enforcement duties.
If a medical condition is discovered by us that you are not aware of, we may
inform your physician.
Information on you may be used for statistical purposes or marketing
research but you would not be identified individually.
It may be necessary to provide information to certain industry-support
organizations to allow them to perform their functions. An example would be
a consumer reporting agency that may need some basic identifying data before
it may collect information for us that is needed to evaluate your
application or process your claim.
============================================================================
CAN I REVIEW MY FILE INFORMATION?
============================================================================
Yes, on your written request, LBVIP will send you a summary of relevant
information we obtained in connection with your application. Detailed
medical record information will only be provided to your physician. We will
not send you information gathered in expectation or in connection with any
claim, civil or criminal proceeding.
============================================================================
CAN I CORRECT INFORMATION?
============================================================================
If after reviewing our information you feel it is not correct or complete,
you may ask us for a review. If we agree to make a change, we will make the
necessary correction or addition. We will also inform anyone else to whom
we have disclosed the original information of this correction.
If we don't agree to make any changes, you may file a statement with us
which states what you believe to be correct. We'll send that statement to
anyone to whom we sent the information in the past and include it in any
future disclosures.
============================================================================
CONSUMER REPORTS
============================================================================
An investigative consumer report may be requested to help us determine your
insurability. This report would include information on your lifestyle,
character, general reputation and personal characteristics such as health,
occupation and finances. The consumer reporting agency would gather this
information through interviews with you, your family, business associates,
friends and financial institutions.
You have the right, upon written request, to be informed if an investigative
consumer report was or was not made. If a report was ordered, we'll provide
you with the name and address of the consumer reporting agency. You may
then contact that agency and they will let you inspect and receive a copy of
that report. They will also explain their retention and release practices.
============================================================================
THE MEDICAL INFORMATION BUREAU, INC. (MIB)
============================================================================
The MIB is a non-profit organization which operates as an information
exchange for its members. Lutheran Brotherhood Variable Insurance Products
Company (LBVIP) is a member of the MIB.
We make reports to the MIB on factors affecting your insurability. We will
not inform them of our decision on your application. If you subsequently
apply to another Bureau member company for life or health insurance or
submit a claim for benefits, MIB will, upon request, supply that company
with information in its file. LBVIP or its reinsurer(s) may also release
information in its files to other life insurance companies to whom you may
apply for life or health insurance, or to whom a claim for benefits may be
submitted.
Upon written request, the MIB will arrange for a disclosure to you of any
information it may have on you on file (medical information will be
disclosed only to your physician). If you feel the information in the MIB
file is not correct, you may contact the MIB and seek a correction in
accordance with procedures outlined in the Federal Fair Credit Reporting
Act.
MIB's address is: MIB, Inc., Post Office Box 105 Essex Station,
Boston, Massachusetts 02112. (617)426-3660.
============================================================================
HAVE ANY MORE QUESTIONS?
============================================================================
If you have any further questions about our collection and handling of
information about you as one of our applicants, your LBVIP registered
representative will be happy to assist you or you may write to us at our
Home Office. The address is:
Lutheran Brotherhood
Variable Insurance Products Company
625 Fourth Ave. So.
Minneapolis, Minnesota 55415
<PAGE>
TABLE OF CONTENTS
=================
Part I
Third Party Ownership
Part II
Reg. Rep. Report
Authorization
Certification of Age
Annuity Receipt
Membership Applications
Conditional Receipt
Privacy Information
IMPORTANT REMINDERS
===================
Motor Vehicle Record --
Include details and dates of violations.
Note handling of beneficiaries --
Form 57 (Request for Change Beneficiary and/or Name) and Form 1684
(Beneficiary Change Trustee Designation) can be used if necessary.
Suitability --
These questions must be completed for every application.
Investment Allocation --
Include in whole numbers the percentages of the premium payment to be
allocated to each of the subaccounts. The total of the allocations to
the subaccounts must be equal to 100%.
Money taken with the application?
If so, Receipt and Conditional Insurance Agreement must be delivered to
applicant. If Life amount applied for exceeds $300,000 call the Home
Office Underwriting Department before accepting premium.
Notice of Information Practices, Consumer Reports
and Medical Information Bureau, Inc. --
This must be delivered to the Applicant/Proposed Insured on all
applications and annuities.
#20776
<PAGE>
4/8/82
[4712806]
EXHIBIT 1.A(6)(a)
-----------
ARTICLES OF INCORPORATION
OF
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS COMPANY
The undersigned, for the purpose of forming a corporation under
the provisions of Chapter 300 of the Minnesota Statutes, do hereby establish
a body corporate and adopt the following Articles of Incorporation:
ARTICLE I.
The name of this Corporation shall be Lutheran Brotherhood
Variable Insurance Products Company. The principal office and place for the
transaction of its business shall be in the City of Minneapolis, State of
Minnesota.
ARTICLE II.
This Corporation is formed for the purpose of doing, and shall
have the power to do, any and all of the kinds of insurance business
specified in clauses (4) and (5)(a) of Section 60A.06, Subdivision 1 of the
Minnesota Statutes, and any amendments to such clauses or provisions in
substitution therefor which may be hereafter adopted, together with any kind
or kinds of business to the extent necessarily or properly incidental to the
kinds of insurance business which this Corporation is so authorized to do.
In furtherance of the foregoing, and not in limitation thereof,
this Corporation shall have the power:
1. To make contracts of life and endowment insurance, to
grant, purchase or dispose of annuities or endowments of any kind, and, in
such contracts, or in contracts supplemental thereto, to provide for
additional benefits in event of death of the insured by accidental means,
total permanent disability of the insured, or specific dismemberment or
disablement suffered by the insured;
2. To establish and operate one or more separate accounts and
issue contracts on a variable basis as provided in Sections 61A.13 to 61A.21
of the Minnesota Statutes, and any amendments thereto or provisions in
substitution therefor which may be hereafter adopted.
3. To insure against loss or damage by the sickness, bodily
injury or death by accident of the insured or his dependents;
4. To acquire and carry on all or any part of the business or
property of any corporation engaged in a business similar to that authorized
to be conducted by this Corporation, and to merge or consolidate with any
corporation with which this Corporation shall be authorized to merge or
consolidate under the laws of the State of Minnesota;
5. To acquire, own, hold, buy, sell, lease, mortgage and in
every other manner deal in real and personal property of every kind and
description, wherever situated, including the shares of stock, bonds,
debentures, notes, evidences of indebtedness and other securities, contracts
or obligations of any corporation or corporations, association or
associations, domestic or foreign, and to pay therefor other assets of this
Corporation, stocks, bonds, or other evidences of indebtedness or securities
of this or any other corporation; and
6. To make such investments, borrow such money and own such
property as may now or hereafter be permitted to insurance companies under
the laws of the State of Minnesota.
The business of this Corporation may be conducted in all states,
territories and dependencies of the United States of America, in all
provinces of the Dominion of Canada, and in any other foreign country.
This Corporation shall also have the general rights, powers and
privileges of a corporation as the same now or hereafter are declared by the
laws of the State of Minnesota and any and all other rights, powers and
privileges now or hereafter granted by the laws relating to insurance
adopted by the State of Minnesota or any law or laws of the State of
Minnesota applicable to stock life insurance companies having power to do
the kinds of business hereinabove referred to.
ARTICLE III
The management of this Corporation shall be exercised by a Board
of Directors and by such committees, officers, employees and agents as the
Board of Directors may authorize, elect or appoint. The Board of Directors
shall consist of not less than three (3) nor more than twenty (20)
directors, all of whom shall be stockholders of this Corporation and a
majority of whom shall always be residents of the State of Minnesota.
Directors shall be elected in such manner as the By-Laws of this Corporation
may provide.
The names and addresses of the first directors of this
Corporation are as follows:
NAME ADDRESS
Luther O. Forde 5500 Vagabond Lane
Plymouth, Minnesota 55446
Robert P. Gandrud 2000 Orkla Drive
Golden Valley, Minnesota 55427
David J. Larson 6055 Manchester Drive
Golden Valley, Minnesota 55427
Clair E. Strommen 2215 South Rosewood Lane
St. Paul, Minnesota 55113
David R. Zetzman 5700 Garfield Avenue
Minneapolis, Minnesota 55419
The term of office of such first directors shall be for one year or until
the first annual meeting of the stockholders of this Corporation.
ARTICLE IV.
The total authorized capital of this Corporation shall be
$1,000,000 and shall be evidenced by 1,000,000 shares of Common Stock of the
par value of $1 per share. The holders of shares of this Corporation shall
not have any preemptive or preferential right of subscription to any of the
shares of this Corporation, and the issuance and sale of such shares and the
terms and conditions of such issuance and sale shall be as authorized and
determined by the Board of Directors of this Corporation.
Voting by the holders of shares of Common Stock of this
Corporation for the election of directors shall not be cumulative.
ARTICLE V.
In addition to the contingent and accrued contract liabilities
of this Corporation, the maximum indebtedness to which this Corporation
shall be subject at any one time shall not exceed one billion dollars
($1,000,000,000).
ARTICLE VI.
The business of this Corporation shall be transacted on the
stock plan; and this Corporation may issue contracts upon both the
participating plan and the non-participating plan.
The following persons shall be eligible to purchase contracts
issued by this Corporation:
1. Any member of Lutheran Brotherhood, or any person eligible
for membership in Lutheran Brotherhood;
2. Any Lutheran Church organization, trust, or employee
benefit plan; and
3. Such other persons as may from time to time be approved by
the Board of Directors of this Corporation.
ARTICLE VII.
This Corporation shall have the power to make gifts or
contributions as provided in Section 300.66 of the Minnesota Statutes, and
any amendments thereto or provisions in substitution therefor.
ARTICLE VIII.
The duration of this Corporation shall be perpetual.
ARTICLE IX.
The names and places of residence of the persons forming this
Corporation are:
NAME PLACE OF RESIDENCE
Luther O. Forde 5500 Vagabond Lane
Plymouth, Minnesota 55446
Robert P. Gandrud 2000 Orkla Drive
Golden Valley, Minnesota 55427
David J. Larson 6055 Manchester Drive
Golden Valley, Minnesota 55427
IN WITNESS WHEREOF, we have hereunto set our hands this
20th day of April, 1982.
- -----
/s/LUTHER O. FORDE
---------------------------
/s/ROBERT P. GANDRUD
---------------------------
/s/DAVID J. LARSON
---------------------------
STATE OF MINNESOTA)
) SS.
COUNTY OF HENNEPIN)
On this 20th day of April, 1982, personally appeared before me,
------
Luther O. Forde, Robert P. Gandrud and David J. Larson, to me known to be
the persons described in and who executed the foregoing Articles of
Incorporation, and they acknowledged that they were persons of full age and
that they executed the foregoing Articles of Incorporation for the uses and
purposes therein expressed.
/s/FRANK B. BUTLER
----------------------------------
[SEAL] FRANK B. BUTLER
NOTARY PUBLIC - MINNESOTA
HENNEPIN COUNTY
My Commission Expires Mar. 5, 1987
The within Articles of Incorporation are hereby approved this
20th day of April, 1982.
- ----
[SEAL] /s/
(Insurance Division Seal) ---------------------------------
Commissioner of Insurance
/initials/ State of Minnesota
STATE OF MINNESOTA
DEPARTMENT OF STATE
I hereby certify that the within instrument
was filed for record in this office on
the 20 day of April A.D. 1982
---- ------
at 4:30 o'clock P M and was duly recorded in
------ ---
Book B57 of Incorporations, on page 661
----- -----
/s/
/initials/ Secretary of State
<PAGE>
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
LUTHERAN BROTHERHOOD VARIABLE INSURANCE PRODUCTS COMPANY
We, the undersigned, Clair E. Strommen and David J. Larson,
respectively the President and the Secretary of Lutheran Brotherhood
Variable Insurance Products Company, a Minnesota corporation, do hereby
certify and declare as follows:
1. That a special meeting of the shareholders of said Company
was duly held on November 8, 1982 at 11:30 o'clock A.M. at the offices of
Lutheran Brotherhood, Minneapolis, Minnesota.
2. That, pursuant to action of the Board of Directors of said
Company, one of the purposes of said meeting was to consider and vote upon
an amendment to the Articles of Incorporation of said Company, and that the
Board of Directors of said Company proposed said amendments and approved the
same subject to approval and adoption thereof by the shareholders.
3. That each of the shareholders consented to and waived
notice of said meeting and attended said meeting.
4. That at the date of said meeting said Company had issued an
outstanding 1,000,000 shares of capital stock of the par value of $1 per
share, each of which was entitled to one vote aggregating 1,000,000 votes,
and that 1,000,000 shares, entitled to 1,000,000 votes, were represented in
person or by proxy at said meeting.
5. That at said meeting, by the unanimous affirmative vote of
all of the 1,000,000 votes to which all shareholders were entitled, the
following resolutions were adopted:
RESOLVED, that Article IV of the Articles of Incorporation
of the Corporation is hereby amended to be and read, in its
entirety, as follows:
"ARTICLE IV."
"The total authorized capital of this Corporation
shall be $2,000,000 and shall be evidenced by 2,000,000
shares of Common Stock of the par value of $1 per share.
The holders of shares of this Corporation shall not have
any preemptive or preferential right of subscription to any
of the shares of this Corporation, and the issuance and
sale of such shares and the terms and conditions of such
issuance and sale shall be as authorized and determined by
the Board of Directors of this Corporation."
"Voting by the holders of shares of Common Stock of
this Corporation for the election of directors shall not
be cumulative."
RESOLVED, that these resolutions shall be embraced in a
certificate duly executed by the President and the Secretary of the
Corporation, under its corporate seal, and approved, filed and
published in the manner prescribed for the execution, approval,
filing and publishing of an original certificate of incorporation
under the applicable laws of the State of Minnesota.
IN TESTIMONY WHEREOF, we, as the President and the Secretary,
respectively, of said Company, have hereunto set our hands and affixed the
corporate seal of said Company this Eighth day of November, 1982.
/s/CLAIR E. STROMMEN
CLAIR E. STROMMEN
President
/s/DAVID J. LARSON
(Corporate Seal) Secretary
STATE OF MINNESOTA)
) SS.
COUNTY OF HENNEPIN)
On this Eighth day of November, 1982, before me, a Notary Public
within and for said County, personally appeared Clair E. Strommen and
David J. Larson, to me personally known and known to be the persons
described in and who executed the foregoing certificate, who, being each by
me duly sworn, did say that they are the President and the Secretary,
respectively, of Lutheran Brotherhood Variable Insurance Products Company,
the corporation named in and on behalf of which the foregoing certificate
was made; that the statements contained in the foregoing certificate are
true in substance and in fact; that the seal affixed to the foregoing
certificate is the corporate seal of said corporation, and that said
certificate was executed on behalf of said corporation by authority of its
shareholders and its Board of Directors; and the said Clair E. Strommen and
David J. Larson each acknowledged that he executed the same as his free act
and deed and acknowledged the same to be the free act and deed of said
corporation.
[SEAL] OTIS F. HILBERT
NOTARY PUBLIC - RAMSEY COUNTY, MINN. /s/OTIS F. HILBERT
My commission Expires Sept. 11, 1987 -------------------------------
(Notarial Seal)
The within Amendments to the Articles of Incorporation of
Lutheran Brotherhood Variable Insurance Products Company are hereby approved
this 22nd day of November, 1982.
------
/s/THOMAS O'MALLEY
--------------------------------
/Temporary - Initials/ Commissioner of Insurance
State of Minnesota
(Insurance Division Seal)
#20496
<PAGE>
EXHIBIT 1.A(6)(b)
-----------------
BY-LAWS
OF
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
ARTICLE I. OFFICES
====================
The principal office of the Corporation shall be located in the
City of Minneapolis, State of Minnesota. The Corporation may have such
other offices, either within or without the State of Minnesota, as the Board
of Directors may designate or as the business of the Corporation may require
from time to time.
ARTICLE II. STOCKHOLDERS
==========================
Section 1. ANNUAL MEETINGS. The annual meeting of the
stockholders shall be held on the last Wednesday in the month of May in each
year commencing 1983, at the hour of ten o'clock a.m., or at such other time
on such other day within such month as shall be fixed by the Board of
Directors, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose or purposes, unless otherwise prescribed by
statute, may be called by the President or by the Board of Directors, and
shall be called by the President at the request of the holders of not less
than one-tenth of all outstanding shares of the Corporation entitled to vote
at the meeting.
Section 3. PLACE OF MEETINGS. The Board of Directors may
designate any place, either within or without the State of Minnesota, as the
place of meeting for any annual meeting or for any special meeting called by
the Board of Directors. If no designation is made, or if a special meeting
is otherwise called, the place of meeting shall be the principal office of
the Corporation in the State of Minnesota.
Section 4. NOTICE OF MEETINGS. Written notice stating the
place, day and hour of the meeting and, in case of special meeting, the
purpose or purposes for which the meeting is called, shall, unless otherwise
prescribed by statute, be delivered not less than ten (10) nor more than
fifty (50) days before the date of the meeting, either personally or by
mail, by or at the direction of the President, the Secretary, or the other
officer or persons calling the meeting, to each stockholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited in the United States mail, addressed to the
stockholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
Section 5. WAIVER OF NOTICE. Notice of the place, day, hour
and purpose or purposes of any meeting of the stockholders may be waived in
writing by any stockholder. Such waiver may be given before or after the
meeting and shall be filed with the Secretary or entered upon the records of
the meeting.
Section 6. QUORUM. A majority of the outstanding shares of
the Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at any meeting of stockholders. The stockholders
present, though less than a quorum, may adjourn the meeting to a later day
or hour or to another place without further notice other than by
announcement at the meeting, until a quorum shall be present. At such
adjourned meeting at which a quorum shall be present any business may be
transacted which might have been transacted at the meeting as originally
noticed.
Section 7. PROXIES. At all meetings of stockholders, a
stockholder may vote in person or by proxy executed in writing by the
stockholder or by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary of the Corporation before or at the time of the
meeting.
Section 8. VOTING OF SHARES. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at any meeting of
stockholders.
Section 9. CONDUCT OF MEETINGS. The President, or, in his
absence, the Chairman of the board, shall act as chairman, and the Secretary
shall act as secretary, of each meeting of stockholders. In the absence of
the Secretary, the chairman of the meeting may appoint any person to act as
secretary of the meeting. All matters brought before the meeting shall,
unless otherwise prescribed by statute, be decided by a majority of the
votes represented at the meeting. In the event of a tie vote, the deciding
vote may be cast by the chairman of the meeting in his capacity as chairman,
but this section shall not be construed to prevent the chairman from casting
the number of votes to which he is otherwise entitled.
ARTICLE III. BOARD OF DIRECTORS
=================================
Section 1. GENERAL POWERS. The management of the Corporation
shall be exercised by the Board of Directors and by such committees,
officers, employees and agents as the Board of Directors may authorize,
elect or appoint.
Section 2. NUMBER, QUALIFICATIONS AND TERM OF OFFICE. The
Board of Directors shall consist of not less than three (3) nor more than
twenty (20) directors, all of whom shall be stockholders of the Corporation.
The number of directors to constitute the Board of Directors for the ensuing
year shall be determined by the Board of Directors prior to the annual
meeting of stockholders at which the directors are to be elected, or, in the
absence of such determination, by the stockholders at such annual meeting,
provided that thereafter the authorized number of directors may be increased
by the stockholders or the Board of Directors and decreased by the
stockholders. Directors shall be elected by ballot.
Each director shall be elected to hold office for one year and
until such director's successor is elected and has qualified.
Section 3. REGULAR MEETINGS. A regular meeting of the Board
of Directors shall be held without notice other than this By-Law immediately
after, and at the same place as, the annual meeting of the stockholders.
The Board of Directors may provide, by resolution, the time and place,
either within or without the State of Minnesota, for the holding of
additional regular meetings without notice other than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board
of Directors may be called by or at the request of the Chairman of the Board
or the President and, upon request by any two members of the Board of
Directors, shall be called by the Chairman of the Board or the President.
Section 5. NOTICE. Notice of any special meeting of the
Board of Directors shall be given by written notice mailed to or served upon
each director at least two days in advance of the day when the meeting is to
be held, and such meeting shall be held at such time and place as shall be
specified in such written notice. Waiver of notice of any special meeting
shall be in writing and may be given before, at or after such meeting, and
attendance at a meeting by a director without protesting prior thereto or at
its commencement the lack of notice to such director shall constitute waiver
of such notice. A special meeting of the Board of Directors may also be
held without written notice at such time and place as shall be fixed by the
consent in writing of all directors given before, at or after such meeting.
Section 6. QUORUM. A majority of the members of the entire
Board of Directors shall constitute a quorum for the transaction of
business, but if less than such majority is present at a meeting a majority
of the Directors present may adjourn the meeting from time to time without
further notice other than by announcement at the meeting, until a quorum
shall be present.
Section 7. MANNER OF ACTING. The act of a majority of the
directors present at any meeting of the Board of Directors at which a quorum
is present shall be the act of the Board of Directors, unless a greater
number is required by statute or by the Articles of Incorporation or by
these By-Laws. Any action that might be taken at a meeting of the Board of
Directors may be taken without a meeting if done in writing signed by all of
the directors.
Section 8. VACANCIES. Any vacancy occurring in the Board of
Directors may be filled for the remainder of that term by the affirmative
vote of a majority of the remaining directors though less than a quorum of
the Board of Directors. Newly created directorships resulting from an
increase in the authorized number of directors may be filled by a vote of a
majority of the directors serving at the time of such increase.
Section 9. COMMITTEES. The Board of Directors may, by
resolution or resolutions adopted by a majority of the entire Board of
Directors, designate one or more committees, in addition to the Executive
Committee and the Finance Committee, each committee to consist of two or
more directors, which to the extent provided in such resolutions or
resolutions, or in the By-Laws, shall have and may exercise the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation. Such committee of committees shall have such
name or names as may be stated in these By-Laws, or as may be determined
from time to time by resolutions adopted by the Board of Directors. All
committees shall keep regular minutes of their proceedings. Vacancies in
any committee shall be filled by the Board of Directors. All actions of any
committee shall be reported to the Executive Committee or to the Board of
Directors. All such reports shall be rendered no later than at the second
meeting of the Executive Committee or the Board of Directors, as the case
may be, next succeeding the taking of such actions. Each committee shall
fix its own rules of procedure, and shall meet where and as provided by such
rules, or by resolution of the Board of Directors. Any action that might be
taken at a meeting of any committee may be taken without a meeting if done
in writing signed by all of the members of such committee.
Section 10. GENERAL POWERS. In addition to the powers and
authorities expressly conferred by these By-Laws, the Board of Directors may
exercise all such powers and do all such lawful acts and things as are not
by statute or by the Articles of Incorporation or by these By-Laws directed
or required to be exercised or done by the stockholders.
ARTICLE IV. OFFICERS
======================
Section 1. NUMBER. The executive officers of the Corporation
shall be the Chairman of the Board, the President, one or more Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice
Presidents (the number and titles of such vice presidents to be determined
by the Board of Directors), a Secretary and a Treasurer. The Chairman of
the Board shall be elected from among the members of the Board of Directors.
At its discretion, the Board of Directors may decline to designate and elect
a Chairman of the Board. Such other executive officers as may be deemed
necessary may be elected by the Board of Directors. Any two or more
offices, except those of President and Secretary, may be held by the same
person.
Section 2. ELECTION AND TERM OF OFFICE. The executive
officers of the Corporation to be elected by the Board of Directors shall be
elected annually at the regular meeting of the Board of Directors held after
each annual meeting of stockholders. If the election of executive officers
shall not be held at such meeting, such election of executive officers shall
be held as soon thereafter as conveniently practicable. Each executive
officer shall be elected to hold office until such executive officer's
successor is elected and has qualified.
Section 3. APPOINTIVE OFFICERS. The President may appoint
such additional appointive officers as may be approved by the Board of
Directors.
Section 4. REMOVAL. An executive officer may be removed
either for or without cause by majority vote of the Board of Directors
present at any meeting of the Board of Directors.
Section 5. VACANCIES. Any vacancy occurring in any executive
office may be filled for the remainder of the term by the affirmative vote
of a majority of the Board of Directors.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the board
shall preside at all meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors from time
to time. In the event the Board of Directors has not designated a Chairman
of the Board, or in the event the Chairman of the Board is not present, the
President shall preside at any such meeting of the Board of Directors.
Section 7. PRESIDENT. The President shall be the Chief
Executive Officer of the Corporation and, subject to the control of the
Board of Directors, shall in general supervise and control all of the
business and affairs of the Corporation. In general, the President shall
perform all duties usually vested in the office of the Chief Executive
Officer and such other duties as may be prescribed by the Board of Directors
from time to time.
Section 8. EXECUTIVE VICE PRESIDENT. The Executive Vice
President, or in the event there shall be more than one Executive Vice
President, the Executive Vice Presidents, shall generally assist the
President in the management of the Corporation. In the event of the death,
resignation or inability of the President to act, the Executive Vice
President shall assume and discharge PRO TEMPORE the powers and duties of
the President. In the event there is more than one Executive Vice
President, the Board of Directors, or the Executive Committee, shall
designate which Executive Vice President shall assume and discharge
PRO TEMPORE the powers and the duties of the President.
Section 9. SENIOR VICE PRESIDENTS, VICE PRESIDENTS AND
ASSISTANT VICE PRESIDENTS. The Senior Vice Presidents, Vice Presidents,
and Assistant Vice Presidents and appointive officers shall perform such
duties as may be prescribed by the President or the Board of Directors from
time to time.
Section 10. SECRETARY. The Secretary shall keep the minute
books and seal of the Corporation, record the minutes of the meetings of
stockholders and the Board of Directors, and, in general, perform all duties
and have all powers incident to the office of secretary and perform such
other duties and have such other powers as may be prescribed by the
President or the Board of Directors from time to time.
Section 11. TREASURER. The Treasurer shall have supervision
over the funds, securities, receipts and disbursements of the Corporation,
and, in general, perform all duties and have all powers incident to the
office of Treasurer and perform such other duties and have such other powers
as may be prescribed by the President or the Board of Directors from time to
time.
Section 12. COMPENSATION. The executive officers and the
appointive officers shall receive such salary or other compensation as may
be determined by the Board of Directors. The Board of Directors may
delegate to the President the power to determine the salary or other
compensation of any appointive officer.
Section 13. SURETY BONDS. If the Board of Directors shall so
require, any officer or agent of the Corporation shall execute to the
Corporation a bond in such sum and with such surety or sureties as the Board
of Directors may direct, conditioned upon the faithful performance of such
officer's or agent's duties to the Corporation, including responsibility for
negligence and for the accounting of all property, funds or securities of
the Corporation which may come into such officer's or agent's hands.
ARTICLE V. EXECUTIVE COMMITTEE
================================
The Board of Directors may, by resolution or resolutions adopted
by a majority of the entire Board of Directors, designate three or more of
its members to constitute an Executive Committee and shall designate a
member of the Committee to serve as Chairman of such Executive Committee.
The President shall be a member of the Executive Committee. Vacancies in
the Executive Committee shall be filled by the Board of Directors.
Between meetings of the Board of Directors, the Executive
Committee shall have and may exercise all of the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation with the exception of such limitations as may be imposed by the
Board of Directors or by statute. All actions of the Executive Committee
shall be reported to the Board of Directors. All such reports shall be
rendered no later than at the second meeting of the Board of Directors next
succeeding the taking of such actions.
A majority of the members of the entire Executive Committee
shall constitute a quorum for the transaction of business at any meeting of
the Executive Committee. The act of a majority of the Executive Committee
present at any meeting of the Executive Committee at which a quorum is
present shall be the act of the Executive Committee. Any action which might
be taken at a meeting of the Executive Committee may be taken without a
meeting if done in writing signed by all of the members of the Executive
Committee.
ARTICLE VI. FINANCE COMMITTEE
===============================
The Board of Directors may, by resolution or resolutions adopted
by a majority of the entire Board of Directors, designate three or more of
its members to constitute a Finance Committee. The President shall be a
member of the Finance Committee. The Board of Directors may also designate
one or more of its members as alternate members of the Finance Committee to
serve at meetings of the Finance Committee in the absence of any regular
member or members, and, in case more than one alternate is designated, the
Board of Directors shall designate at the time of such designation the
priorities as between them. Vacancies in the Finance Committee shall be
filled by the Board of Directors.
The Finance Committee shall exercise general control and
supervision of the financial affairs and accounts of the Corporation. It
shall supervise all investments and loans of the Corporation, including
investments in real estate, policy loans, real estate mortgage loans and
investments in housing company securities. Directly, or through such
regulations as it may establish, it shall authorize or approve the making of
all such investments or loans and all sales of such investments or loans.
A majority of the members of the entire Finance Committee shall
constitute a quorum for the transaction of business at any meeting of the
Finance Committee. The act of a majority of the Finance Committee present
at any meeting of the Finance Committee at which a quorum is present shall
be the act of the Finance Committee. Any action which might be taken at a
meeting of the Finance Committee may be taken without a meeting if done in
writing signed by all of the members of the Finance Committee.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
=========================================================
Section 1. CERTIFICATES FOR SHARES. Certificates
representing shares of the Corporation shall be in such form as shall be
determined by the Board of Directors. Such certificates shall be signed by
the President or an Executive Vice President and by the Secretary or an
Assistant Secretary and sealed with the corporate seal or a facsimile
thereof. The signatures of such officers upon a certificate may be
facsimile if the certificate is manually signed on behalf of a transfer
agent and a registrar, other than the Corporation itself or one of its
employees. Each certificate for shares shall be consecutively numbered or
otherwise identified. The mane and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be cancelled
and no new certificate shall be issued until the former certificate for a
like number of shares shall have been surrendered and cancelled, except that
in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the Corporation as the
Board of Directors may prescribe. In the event any officer's signature or
facsimile signature shall appear on any certificate and such officer shall
have ceased to be such officer prior to the issue of such certificate, such
certificate shall be a valid certificate and may, nevertheless, be issued
and delivered.
Section 2. TRANSFER OF SHARES. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal representative,
who shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed and filed
with the Secretary of the Corporation, and on surrender for cancellation of
the certificate for such shares. The person in whose name shares stand on
the books of the Corporation shall be deemed by the Corporation to be the
owner thereof for all purposes.
ARTICLE VIII. EXECUTION OF INSTRUMENTS
========================================
All documents, instruments or writings of any nature shall be
signed, executed, verified, acknowledged and delivered by such officers,
agents or employees of the Corporation, or any one of them, and in such
manner, as from time to time may be determined by the Board of Directors.
ARTICLE IX. CORPORATE SEAL
============================
The seal of the Corporation shall be in the form of a circle and
shall bear the name of the Corporation and the words "Corporate Seal".
ARTICLE X. INDEMNIFICATION
============================
To the full extent permitted by Minnesota Statutes, Section
300.082, as amended from time to time, or by other provisions of law, each
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, wherever
brought, whether civil, criminal, administrative or investigative, by reason
of the fact that he is or was a director, officer or employee of the
Corporation, or he is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall be indemnified by the
Corporation against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually incurred by him in connection with
such action, suit or proceeding. The indemnification provided by hereby
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.
ARTICLE XI. AMENDMENTS
========================
The Board of Directors shall have authority to make and alter
the By-Laws of the Corporation, subject to the power of the stockholders to
change or repeal such By-Laws.
#20498
<PAGE>
EXHIBIT 8
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
MANAGEMENT SERVICE AGREEMENT
----------------------------
This contract is made among Lutheran Brotherhood, a Minnesota
corporation ("LB"), Lutheran Brotherhood Securities Corp., a Pennsylvania
corporation ("LBSC") and Lutheran Brotherhood Variable Insurance Products
Company, a Minnesota corporation, ("LBVIP"), this _______ day of
____________, 1986.
WHEREAS, LB, LBSC and LBVIP each seek to reduce their operation costs
and obtain certain efficiencies available in the equitable and practicable
sharing among them of certain common management and administrative
procedures, and
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, do agree as follows:
1. LB and LBSC shall furnish to LBVIP in such quantities and at such
times as shall be necessary for the efficient and viable operation
of LBVIP, all corporate management and administrative services of
every nature, including but not limited to, the following
categories:
A. General professional, including management, investment, legal,
accounting, and administrative services;
B. General administrative, including purchasing, receiving,
disbursement, bookkeeping, word processing, data processing,
graphics, mail, and secretarial services;
C. Marketing support, including field management, field
compensation, promotion, conferences, education, and training
services; and,
D. Other services which the parties shall from time to time agree
to be necessary and appropriate for the efficient operations of
the parties, including to the extent they are not covered
above, but not limited to, the following:
(1) Compensation procedures, systems and administration of
all management, employees and agents;
(2) Field Force commissions;
(3) Investment procedures, systems and administration;
(4) Taxes and the applicable reporting thereof to local,
state and federal authorities;
(5) Expenses of examination and other governmental expenses,
and fees and expenses of trade associations and bureaus;
(6) Underwriting;
(7) Claims adjustment;
(8) Claims payments;
(9) General books of account;
(10) Appointment and cancellation of agencies;
(11) Policies, endorsements, and related matters;
(12) Accounting, statistics, and records;
(13) Collection and handling of premiums and moneys;
(14) Reinsurance;
(15) General overhead;
(16) Housing, space and furniture and fixtures;
(17) Preparation of financial and other reports;
(18) Advertising, sales promotion and agency development;
(19) Employment and discharge of personnel;
(20) Competition among LB, LBSC and LBVIP;
(21) Allocations of expenses between company operations of
LBVIP and other activities, if any;
(22) Cancellation of policies;
(23) Refusal of risks;
(24) Allocated and unallocated loss adjustment expense;
(25) Amendments to this Agreement.
2. In consideration of receipt of the above described services, LBVIP
shall pay to LB and/or to LBSC in such manner and at such times as
the parties shall agree, but at least annually, the actual costs of
such services.
3. This is a management service agreement only and does not purport to
transfer from one party to another any items of property, either
tangible or intangible and all parties shall continue to own, hold,
completely control and remain in custody of all items of property
to which they are now or in the future entitled without respect to
how such properties or the values thereof were created or enhanced.
4. Notwithstanding anything to the contrary, LBVIP shall:
A. Have custody of, responsibility for and complete control of all
of its investments;
B. Own, have custody of and keep its general corporate accounts
and records;
C. Own all the records of its business;
D. Have an ultimate veto right on underwriting;
E. Have the ultimate right to cancel any risk;
F. Have an ultimate veto on appointment of agents and the ultimate
power to cancel any agency;
G. Have an ultimate responsibility for and general control of
claims adjustment and claims payments;
H. Be entitled to any premiums collected by LB or LBSC which shall
be held in a fiduciary capacity and be paid over to LBVIP
immediately following collection;
I. Retain an adequate right of cancellation of the contract and
discharge of the manager in the event LB or LBSC fails to
satisfactorily perform;
J. Retain the ultimate veto right over commission rates.
5. This Agreement may not be assigned, transferred or amended without
the express written consent of each party.
6. The duration of this Agreement shall be perpetual provided that any
party may at any time call, in writing for a renegotiation of its
provisions and that any party may cancel this agreement upon
reasonable written notice to the other parties.
IN WITNESS WHEREOF, the parties have signed in Minneapolis, Minnesota,
on the date first above written.
LUTHERAN BROTHERHOOD
(SEAL)
By
-----------------------------------
Luther O. Forde
Its President
LUTHERAN BROTHERHOOD SECURITIES CORP.
(SEAL)
By
-----------------------------------
Mitchell F. Felchle
Its President
LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
(SEAL)
By
-----------------------------------
Luther O. Forde
Its President
#20777
<PAGE>
EXHIBIT 9
625 Fourth Avenue South
Minneapolis, Minnesota 55415
(612) 340-5727
[LOGO] LUTHERAN BROTHERHOOD VARIABLE
INSURANCE PRODUCTS COMPANY
April 28, 1998
Lutheran Brotherhood Variable Insurance Products Company
625 Fourth Avenue South
Minneapolis, MN 55415
Gentlemen:
In connection with the proposed registration under the Securities Act of
1933, as amended, of individual flexible premium deferred variable annuity
contracts (the "contracts") and interests in LBVIP Variable Annuity Account
I (the "Separate Account"), I have examined documents relating to the
establishment of the Separate Account by the Board of Directors of Lutheran
Brotherhood Variable Insurance Products Company(the "Company") as a separate
account for assets applicable to variable annuity contracts, pursuant to
Minnesota Statutes Sections 61A.13 to 61A.21, as amended, and the
Registration Statement, on Form N-4, File No. 33-15974 (the "Registration
Statement"), and I have examined such other documents and have reviewed such
matters of law as I have deemed necessary for this opinion and I advise you
that in my opinion:
1. The Separate Account is a separate account of the Conmpany duly
created and validly existing pursuant to the laws of the State of
Minnesota.
2. The contracts, when issued in accordance with the Prospectus
constituting a part of the Registration Statement and upon compliance
with applicable local law, will be legal and binding obligations of
the Company in accordance with their respective terms.
3. The portion of the assets held in the Separate Account equal to
reserves and other contract liabilities with respect to the Separate
Account are not chargeable with liabilities arising out of any other
business the Company may conduct.
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading "Legal Matters" in the
Prospectus constituting a part of the Registration Statement and to the
references wherever appearing therein.
Very truly yours,
/s/James M. Odland
James M. Odland
Assistant Secretary
#20755
<PAGE>
EXHIBIT 13
-----------
LBVIP VARIABLE ANNUITY ACCOUNT I
COMPUTATION OF PERFORMANCE DATA
MONEY MARKET SUBACCOUNT CALCULATION OF YIELD QUOTATION
The Prospectus contains or will contain information with respect
to the yield and effective yield of a hypothetical preexisting account
having a balance of one Money Market Portfolio Subaccount Accumulation Unit
at the beginning of a specified seven-day period. Such yield quotations
have been calculated by determining the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a
balance of one Accumulation Unit of the Subaccount at the beginning of the
period, subtracting a hypothetical charge reflecting deductions from
Contract Owner accounts, dividing the net change by the value of the account
at the beginning of the period to obtain the base period return, and
multiplying the base period return by 365/7. The effective yield has been
calculated by compounding the yield quotation for such period by adding 1
and raising the sum to a power equal to 365/7, and subtracting 1 from the
result.
In determining the net change in the value of the account as
described in the preceding paragraph, all deductions that are charged to all
Contract Owner accounts have been reflected in proportion to the length of
the seven-day base period and the mean (or median) account size under a
variable annuity contract issued by LBVIP. Deductions from purchase
payments and surrender charges assessed have not been reflected in, and
realized gains and losses from the sale of securities and unrealized
appreciation and depreciation of the Subaccount and the related portfolio
company have been excluded from the computation of yield.
Following is an example of a yield calculation by LBVIP Variable
Annuity Account I Money Market Subaccount for the variable annuity contract
issued by Lutheran Brotherhood Variable Insurance Products.
LBVIP VARIABLE ANNUITY ACCOUNT I
MONEY MARKET SUBACCOUNT
CALCULATION OF YIELD QUOTATIONS AS OF 31-Dec-92
Value of a hypothetical pre-existing account having a
balance of one Accumulation Unit at the beginning of
the seven-day period.......................................... $1.302336 (A)
Value of the same account (excluding capital changes)
at the end of the seven-day period............................ 1.302833
----------
Net change in value of one Accumulation Unit.................. $0.000497 (B)
==============
Base Period Return:
Net change in value of one Accumulation Unit
divided by value of one Accumulation Unit at the
beginning of the seven-day period (A)/(B).................. 0.000382 (C)
==============
Annualized Current Net Yield.................................. 1.99%
==============
Effective Yield............................................... 2.01%
==============
Footnotes:
- ----------------------------------------------------------
(a) Annualized Current Net Yield = (C) x (365/7))
365/7
(b) Effective Yield = ((C + 1) -1)
HIGH YIELD SUBACCOUNT AND INCOME SUBACCOUNT STANDARDIZED YIELD CALCULATIONS
The Prospectus contains or will contain information with respect
to yield quotations by Subaccounts other than the Money Market Subaccount.
These yield quotations are based on a 30-day (or one month) period computed
by dividing the net investment income per accumulation unit earned during
the period (the net investment income earned by the Fund portfolio
attributable to shares owned by the Subaccount less expenses incurred during
the period) by the maximum offering price per Accumulation Unit on the last
day of the period, by setting yield equal to two times the difference
between the sixth power of one plus the designated ratio and one, where the
designated ratio is the difference between the net investment income earned
during the period and the expenses accrued for the period (net of
reimbursement) divided by the product of the average daily number of
Accumulation Units outstanding during the period and the maximum offering
price per Accumulation Unit on the last day of the period.
For fees that vary with the size of the Contract, a Contract
size equal to the mean (or median) contract size of a variable annuity
contract issued by LBVIP has been assumed. Annualized current yield of any
specific base period is not a representation of future actual yield.
Following are examples of standardized yield calculations by
LBVIP Variable Annuity Account I High Yield Subaccount and LBVIP Variable
Annuity Account I Income Subaccount for the variable annuity contract issued
by Lutheran Brotherhood Variable Insurance Products Company.
<PAGE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND, INC. - HIGH YIELD PORTFOLIO
STANDARDIZED YIELD CALCULATION
AS OF 31-DEC-92
===================================================================================================================
LBVIP Variable Annuity Account I
LBVIP-HY Portfolio High Yield Subaccount
-------------------- --------------------------------------
% of o/s
Gross Income Earned During Base Period: Amount Yield shares Amount Yield
- -------------------------------------- ---------- ------- --------- ------------- --------
<S> <C> <C> <C> <C> <C>
From Corporate Obligations:
Computed on a Yield to Maturity or
Yield to Call Basis................................ 1,248,057 10.45% 96.446% 1,203,704 10.19%
From Preferred Stock................................. 102,266 0.86% 96.446% 98,632 0.84%
From Short-Term Securities:
Book Income adjusted to reflect a 30-day
base period....................................... 17,394 0.15% 96.446% 16,776 0.14%
------------- -------- ----------- ------
Total Gross Income................................... 1,367,717 11.46% 1,319,112 11.17%
========== ====== ======= ======== ======
Investment advisory fee accrued during
base period........................................ 48,398 0.41% 96.446% 46,678 0.40%
========== ====== ======= ======== ======
Mortality and expense risk charges at the
subaccount level................................... NA 129,101 1.09%
========== ====== ======= ======== ======
Average daily number of shares/units outstanding
during the base period (Schedule 2)............... 15,213,119 8,919,576
=============== ============
Maximum public offering price per share/unit on
the last day of the base period (Schedule 2)..... 9.63 16.209964
=============== ============
Standardized Yield.................................. 11.05%(a) 9.68%(b)
=============== ============
</TABLE>
Footnotes:
==========
(a) Current yield is computed using the following formula:
6
2[ [ (Gross Income - Advisory Fee) +1 ] -1 ] X 100
--------------------------------------------------
[ [ (Average Daily shares x Maximum Offering Price) ] ]
(b) Current Yield is computed using the following formula:
6
2[ [ (Gross Income - Advisory Fee - M&E Charge) +1 ] -1 ] x 100
------------------------------------------------
[ [ (Average Daily Units x Maximum Offering Price) ] ]
Preparer: /s/Jane I Sholtz
----------------------------------
Preparer: /s/Rand Mattsson
----------------------------------
<PAGE>
LBVIP Series Fund - High Yield Portfolio
Calculation of Average Shares Outstanding for
Each Separate Account For Purposes of Computing
SEC Yields for the month end 31-Dec-92
Shares outstanding by separate account:
- ----------------------------------------------------------------------------
Date VUL SPVL VA TOTAL
- ----------------------------------------------------------------------------
12/01/92 482,249.674 45,855.625 14,081,001.473 14,609,106.772
12/02/92 485,721.401 45,867.590 14,125,626.089 14,657,215.080
12/03/92 487,087.089 45,879.484 14,201,449.493 14,734,416.066
12/04/92 487,322.547 45,891.255 14,236,160.957 14,769,374.759
12/07/92 487,681.166 45,902.973 14,278,288.305 14,811,872.444
12/08/92 487,536.723 43,598.800 14,339,028.784 14,870,164.307
12/09/92 488,397.548 43,609.857 14,399,385.655 14,931,393.060
12/10/92 488,894.772 43,620.848 14,426,330.640 14,958,846.260
12/11/92 489,333.526 43,632.051 14,470,789.774 15,003,755.351
12/14/92 490,602.169 43,643.196 14,535,361.773 15,069,607.138
12/15/92 493,160.496 43,685.741 14,617,759.341 15,154,605.578
12/16/92 495,085.959 43,697.040 14,712,491.271 15,251,274.270
12/17/92 498,730.857 43,708.033 14,764,406.766 15,306,845.656
12/18/92 500,127.481 43,720.580 14,823,098.576 15,366,946.637
12/21/92 500,682.882 43,731.736 14,841,440.830 15,385,855.448
12/22/92 495,980.528 43,772.511 14,883,263.069 15,423,016.108
12/23/92 500,275,532 43,783.766 14,942,597.495 15,486,656.793
12/28/92 501,297.538 43,795.184 14,987,920.474 15,533,013.196
12/29/92 503,630.915 43,776.210 15,059,454.782 15,606,861.907
12/30/92 508,885.616 43,845.664 15,122,406.995 15,675,138.275
12/31/92 512,242.641 43,857,105 15,199,657.495 15,755,757.241
0.000
0.000
Average shares
outstanding..... 494,520.336 44,232.155 14,621,329.526 15,160,082.016
=========== ========== ============== ==============
Average shares as a
percentage of total
shares........... 3.262% 0.292% 96.446% 100.000%
========= ======== ======== ========
<PAGE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND, INC. - HIGH YIELD PORTFOLIO
INCOME EARNED FROM COMMON AND PREFERRED STOCKS DURING DECEMBER, 1992
FOR PURPOSES OF COMPUTING SEC STANDARDIZED YIELD
DAILY
ANNUAL DIVIDEND RATE NO. OF GROSS
DIVIDEND PER SHARE DAYS INCOME
EQUITY SHARES RATE (360 DAY DAILY IN BASE FOR BASE
CUSIP ISSUE TYPE OWNED PER SHARE YEAR) INCOME PERIOD PERIOD
- --------- ----------------- ------ ------- --------- ----------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CASH DIVIDEND SECURITIES:
054904107 B & H Maritime
Carriers C/S 12,200 0.800 0.0022 27.11 30 813.33
482727203 K III
Communication Corp P/S 47,000 2.88 0.0080 375.35 30 11,260.42
873098206 TW Holdings P/S 20,000 1.60 0.0044 88.89 30 2,666.67
909214207 Unisys P/S 15,000 5.63 0.0156 234.38 30 7,031.25
909214207 Unisys P/S 1,350 5.63 0.0156 21.09 14 295.31
---------------
22,066.98
---------------
</TABLE>
<TABLE>
<CAPTION>
NO. OF GROSS
DAYS INCOME
EQUITY SHARES DIVIDEND SHARES PRICE AT QUARTERLY DAILY IN BASE FOR BASE
TYPE OWNED RATE EXPECTED 12/31/92 INCOME INCOME PERIOD PERIOD
------- ------- ----- -------- --------- --------- ------- ------ ----------
PIK DIVIDEND SECURITIES:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
077852200 Bell &
Howell Co. P/S 19,149 0.04250 814 25.25 20,554 228.37 30 6,851.17
077852200 Bell &
Howell Co. P/S 1,627 0.04250 69 25.25 1,742 19.36 0 0.00
256128208 Dr. Pepper
Bottling Co. P/S 15,755 0.04250 670 26.50 17,755 197.28 30 5,918.33
417434404 Harvard
Industries P/S 64,161 0.14250 9,143 22.13 202,289 2,247.65 30 67,429.63
--------------
80,199.13
--------------
Gross Income from Common and Preferred stocks 102,266.10
============
</TABLE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND, INC. - HIGH YIELD PORTFOLIO
BOOK INCOME AND EXPENSES BY MONTH
FOR FISCAL YEAR ENDING 12/31/92
=========================================================================================================
MONTHLY INCOME
--------------------------
AMORT. AMORT. AMORT. TOTAL
L-T OF S-T DIVIDEND OF L-T OF OTHER GROSS
MONTH INTEREST DISCOUNT INCOME DISCOUNT PREMIUM INCOME INCOME
- ---------- ----------- ---------- ----------- ----------- ---------- ---------- -----------
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan-92 410,903 24,698 34,672 81,486 2,055 0 549,705
Feb-92 464,798 25,424 3,274 72,931 2,154 0 564,273
Mar-92 568,084 19,816 22,276 82,483 3,491 0 689,168
Apr-92 589,492 17,366 46,628 72,196 3,427 0 722,255
May-92 589,908 17,492 21 79,418 4,092 0 682,747
Jun-92 784,994 17,709 75,663 94,722 4,666 44,111 976,534
Jul-92 759,897 13,289 45,271 126,583 5,312 7,500 947,228
Aug-92 847,921 8,012 10,895 122,940 5,091 183 984,859
Sep-92 888,244 10,731 78,337 117,613 5,118 857 1,090,665
Oct-92 863,490 22,391 50,427 119,673 5,827 2,436 1,052,590
Nov-92 1,087,783 22,158 169,438 148,152 7,108 1,231 1,421,654
Dec-92 1,271,566 17,974 32,347 153,017 8,039 2,697 1,469,562
- --------- ----------- ---------- --------- ------------ ---------- --------- ------------
(Y-T-D)
TOTALS 9,091,080 217,060 569,249 1,271,215 56,378 59,015 11,151,241
======= ========= ======= ======= ========= ====== ====== ==========
.....CONTINUED.. LBVIP SERIES FUND, INC., - HIGH YIELD PORTFOLIO
BOOK INCOME AND EXPENSES BY MONTH
FOR FISCAL YEAR ENDING 12/31/92.....CONTINUED
==================================================================================================
MONTHLY EXPENSES
---------------------------
ADVISORY NET OTHER TOTAL TOTAL NET
FEE FEE ADVISORY ACCRUED NET INVESTMENT
MONTH EXPENSE WAIVER FEE TAXES EXPENSES EXPENSES INCOME
- ---------- ----------- ----------- ---------- ------ ---------- ----------- --------------
----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan-92 20,105 0 20,105 0 0 20,105 529,600
Feb-92 19,950 0 19,950 0 0 19,950 544,323
Mar-92 25,382 0 25,382 0 0 25,382 663,786
Apr-92 25,326 0 25,326 0 0 25,326 696,929
May-92 27,344 0 27,344 0 0 27,344 655,403
Jun-92 32,872 0 32,872 0 0 32,872 943,662
Jul-92 34,781 0 34,781 0 0 34,781 912,447
Aug-92 38,200 0 38,200 0 0 38,200 946,659
Sep-92 39,936 0 39,936 0 0 39,936 1,050,729
Oct-92 42,061 0 42,061 0 0 42,061 1,010,529
Nov-92 46,323 0 46,323 0 0 46,323 1,375,331
Dec-92 50,011 0 50,011 0 0 50,011 1,419,551
- ----------- ----------- -------- ----------- ------ -------- ----------- -------------
(Y-T-D)
TOTALS 402,291 0 402,291 0 0 402,291 10,748,950
======= ==== ======= ==== ==== ======= ==========
</TABLE>
<PAGE>
SCHEDULE 3
LBVIP - HIGH YIELD DECEMBER 1992
- ----------------------------------------------------------------------------
DAILY CUMULATIVE
O/S O/S
DATE DAY SHARES SHARES
============================================================================
DEC 1 TUE 14,612,919 14,612,919
2 WED 14,661,016 29,273,934
3 THU 14,738,196 44,012,131
4 FRI 14,773,146 58,785,277
5 SAT 14,823,180 73,608,457
6 SUN 14,823,180 88,431,637
7 MON 14,823,180 103,254,817
8 TUE 14,873,935 118,128,752
9 WED 14,935,156 133,063,909
10 THU 14,962,688 148,026,597
11 FRI 15,007,588 163,034,185
12 SAT 15,081,124 178,115,309
13 SUN 15,081,124 193,196,433
14 MON 15,081,124 208,277,558
15 TUE 15,158,525 223,436,083
16 WED 15,255,111 238,691,194
17 THU 15,311,240 254,002,434
18 FRI 15,370,868 269,373,302
19 SAT 15,397,680 284,770,982
20 SUN 15,397,680 300,168,662
21 MON 15,397,680 315,566,343
22 TUE 15,426,982 330,993,324
23 WED 15,490,696 346,484,020
24 THU 15,556,460 362,040,480
25 FRI 15,556,460 377,596,940
26 SAT 15,556,460 393,153,400
27 SUN 15,556,460 408,709,861
28 MON 15,556,460 424,266,321
29 TUE 15,631,624 439,897,944
30 WED 15,679,229 455,577,173
DEC 31 THU 16,029,510 471,606,683
AVERAGE OUTSTANDING 15,213,119
VARIABLE ANNUITY-HIGH YIELD (DECEMBER 1992)
-----------------------------------------------
DAILY CUMULATIVE
OUTSTANDING OUTSTANDING
DATE DAY SHARES SHARES
=========================================================================
DECEMBER 1 TUE 8,596,187.136934 8,596,187.136934
2 WED 8,640,128.450160 17,236,315.587094
3 THU 8,659,070.575797 25,895,386.162891
4 FRI 8,682,505.386246 34,577,891.549137
5 SAT 8,712,858.660611 43,290,750.209748
6 SUN 8,712,858.660611 52,003,608.870359
7 MON 8,712,858.660611 60,716,467.530970
8 TUE 8,747,353.063759 69,463,820.594729
9 WED 8,761,555.366137 78,225,375.960866
10 THU 8,786,339.408275 87,011,715.369141
11 FRI 8,823,350.364894 95,835,065.734035
12 SAT 8,866,683.874773 104,701,749.608808
13 SUN 8,866,683.874773 113,568,433.483581
14 MON 8,866,683.874773 122,435,117.358354
15 TUE 8,921,886.811262 131,357,004.169616
16 WED 8,951,178.956619 140,308,183.126235
17 THU 8,984,262.522169 149,292,445.648404
18 FRI 8,993,101.604956 158,285,547.253360
19 SAT 9,011,553.849235 167,297,101.102595
20 SUN 9,011,553.849235 176,308,654.951830
21 MON 9,011,553.849235 185,320,208.801065
22 TUE 9,045,234.129254 194,365,442.930319
23 WED 9,070,345.909488 203,435,788.839807
24 THU 9,107,547.799347 212,543,336.639154
25 FRI 9,107,547.799347 221,650,884.438501
26 SAT 9,107,547.799347 230,758,432.237848
27 SUN 9,107,547.799347 239,865,980.037195
28 MON 9,107,547.799347 248,973,527.836542
29 TUE 9,131,140.190069 258,104,668.026611
30 WED 9,174,772.970938 267,279,440.997549
31 THU 9,227,426.629334 276,506,867.626883
AVERAGE OUTSTANDING: 8,919,576.375061
M & E Charges: 133,404.30
Unit Values: 16.209964
Prepared by: Jill Eriksen - Controllers
Date Prepared: 01/04/93
<PAGE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND, INC. - HIGH YIELD PORTFOLIO STANDARD YIELD CALCULATION
INPUT AREA - PORTFOLIO HOLDINGS
=======================================================================================================================
AS OF 11/30/92 (ADJUSTED FOR UNSETTLED TRADES)
=============================================================
MATURITY 1ST PMT STEP VALUATION ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- ----------- --------- ------ ------- ---------- -------- ------ --------- ------ -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A B C D E F G H I J K L M N
0 002034AB2 ARA GROUP
INC 700,000 12.000 110.375 04/15/2000 11/30/92 10,787 04/15/93 04/15/95 105.000
1 006848AD7 ADELPHIA
COMMUNICATIONS
CORP 2,000,000 11.875 100.500 09/15/2004 11/30/92 53,438 03/15/93
2 016745AA9 ALLBRITTON
COMMUNICATIONS
CO 1,750,000 11.500 98.750 08/15/2004 11/30/92 53,108 02/15/93
3 027429AW9 AMERICAN
MEDICAL
INTL INC 500,000 13.500 109.750 08/15/2001 11/30/92 19,875 02/15/93 08/15/96 103.860
4 027429AY5 AMERICAN MED
INTL INC 300,000 141,000 11/26/2005 11/26/95 15.000 11/30/92 05/26/93 11/26/95 196.717
5 029163AA0 AMERICAN RE
CORP 2,100,000 10.875 104.500 09/15/2004 11/30/92 38,697 03/15/93
AMERICAN
6 029717AE5 STD INC 3,000,000 94.625 06/30/2003 12/30/93 14.250 11/30/92 12/30/92
7 042170AH3 ARMCO INC 1,050,000 11.375 100.500 10/15/99 11/30/92 17,584 04/15/93
8 050297AA8 AUBURN
HILLS TR 1,650,000 16.875 130.000 05/01/2020 11/30/92 23,203 05/01/93
9 066229AA3 BANKERS
LIFE HLDGS
CO 1,300,000 13.000 100.500 11/01/2002 11/30/92 10,328 05/01/93
10 067774AA7 BARNES &
NOBLES INC 900,000 11.875 102.500 01/15/2003 11/30/92 4,453 01/15/93
11 073913AA3 BEATRICE
FOODS INC 1,400,000 12.000 103.250 12/01/2001 11/30/92 84,000 12/01/92
12 077852AA9 BELL &
HOWELL GROUP
INC 599,000 12.875 105.500 05/15/98 11/30/92 3,428 05/15/93
13 088667AA8 BIBB CO DEL 1,000,000 14.000 101.000 10/01/99 11/30/92 23,333 04/01/93
14 131269AA0 CALMAR
SPRAYING SYS
INC 750,000 14.000 105.000 02/15/99 11/30/92 30,917 02/15/93 02/15/93 106.000
15 161241AR5 CHARTER
MEDICAL CORP 840,000 7.500 72.500 02/15/2003 11/30/92 18,550 02/15/93
16 194831AB9 COLLINS &
AIKMAN GROUP
INC 700,000 15.000 98.000 05/01/95 11/30/92 8,750 05/01/93
17 196879AB6 COLTEC INDS
INC 500,000 10.250 102.000 04/01/2002 11/30/92 8,542 04/01/93
18 196879AD2 COLTEC INDS
INC 1,750,000 9.750 101.500 11/01/99 11/30/92 16,589 05/01/93
19 197648BU1 COLUMBIA
GAS SYSTEMS
DEFAULT 1,750,000 10.250 108.250 08/01/2011 11/30/92 02/01/93
20 197709AA6 COLUMBIA
HOSP CORP 900,000 10.875 99.000 03/01/2002 11/30/92 24,469 03/01/93
21 199904AA1 COMCAST
CELLULAR 4,600,000 48.250 03/05/2000 11/30/92 03/05/93
22 211177AE0 CONTINENTAL
CABLEVISION
INC 2,800,000 11.000 106.000 06/01/2007 11/30/92 136,033 12/01/92
23 211642AB9 CONTINENTAL
MED SYS INC 1,400,000 10.875 98.750 08/15/2002 11/30/92 43,983 02/15/93
24 230208AB6 CULLUM COS
INC 2,000,000 89.500 12/01/2003 06/01/94 16.000 11/30/92 12/01/92
25 235529AB0 DALTON B CO 650,000 13.500 107.000 02/01/99 11/30/92 29,250 02/01/93
26 245279AC8 DEL NORTE
FDG CORP
DEFAULT 250,000 11.250 60.232 01/02/2014 11/30/92 01/02/93
27 256128AA7 DR PEPPER
BOTTLING CO
TEX 360,000 15.500 110.500 11/01/98 11/30/92 4,650 05/01/93 11/01/93 105.810
28 256131AD5 DR PEPPER/
SEVEN UP COS
INC 3,500,000 60.125 11/01/2002 05/01/98 11.500 11/30/92 05/01/93
29 269612AA5 EAGLE INDS
INC 1,050,000 13.000 105.000 10/15/98 11/30/92 17,442 04/15/93
30 283681AF1 EL PASO FNDG
DEFAULT 500,000 10.375 62.638 01/02/2011 11/30/92 01/02/93
31 291525AB9 EMMIS
BROADCASTING
CORP 2,350,000 14.625 97.000 12/15/95 11/30/92 158,478 12/15/92
32 29409KAA9 ENVIROSOURCE
INC 2,400,000 14.000 106.500 04/01/98 11/30/92 56,000 04/01/93
33 307669AC5 FARM FRESH
INC 1,750,000 12.250 96.500 10/01/2000 11/30/92 30,965 04/01/93
34 315290AE6 FERRELLGAS
INC 1,350,000 11.625 104.000 12/15/2003 11/30/92 72,366 12/15/92
35 344126AA5 FOAMEX L.P. 1,150,000 11.250 98.000 10/01/2002 11/30/92 17,250 04/01/93
36 344126AB3 FOAMEX L P/
FOAMEX CAP
CORP 800,000 11.875 98.000 10/01/2004 11/30/92 12,667 04/01/93
37 346091AE1 FOREST OIL
CORP 250,000 13.625 96.500 09/15/98 11/30/92 7,191 03/15/93
38 347460AD9 FORT HOWARD
CORP 3,000,000 12.625 104.500 11/01/2000 11/30/92 31,562 05/01/93 11/01/93 105.000
39 368145AE8 GAYLORD
CONTAINER
CORP 590,652 10.250 82.500 12/31/2001 11/30/92 25,226 12/31/92
40 368145AF5 GAYLORD
CONTAINER
CORP 513,440 13.500 99.500 12/31/2003 11/30/92 28,881 12/31/92
41 369330AB1 GENERAL CHEM
CORP 500,000 14.000 111.250 11/01/98 11/30/92 5,833 05/01/93 11/01/94 105.500
42 370064AL1 GENERAL HOST
CORP 750,000 8.000 107.500 02/15/2002 11/30/92 17,667 02/15/93
43 386532AD7 GRAND UN
CO 1,250,000 12.250 99.750 07/15/2002 11/30/92 54,870 07/15/93
44 420877AA0 HAYNES INTL
INC 1,900,000 13.500 91.500 08/15/99 11/30/92 75,525 02/15/93
45 42221HAF4 HEALTHTRUST
INC 1,250,000 10.750 105.750 05/01/2002 11/30/92 11,198 05/01/93
46 42724GAA9 HERITAGE
MEDIA SVCS 2,500,000 11.000 103.000 06/15/2002 11/30/92 121,458 12/15/92
47 431691AA2 HILLS
STORES CO
DEFAULT 267,000 13.500 89.500 12/31/92 11/30/92 12/31/92
48 45167RAC8 IDEX CORP 1,000,000 9.750 102.000 09/15/2002 11/30/92 18,417 03/15/93
49 46624EAG3 JPS TEXTILE
GROUP INC 2,200,000 9.250 89.500 06/01/99 11/30/92 101,750 12/01/92
50 46624EAJ7 JPS TEXTILE
GROUP INC 600,000 7.000 69.500 05/15/2000 11/30/92 1,867 05/15/93
51 540411AA3 LOEHMANNS
HLDS INC 2,100,000 13.750 100.500 02/15/99 11/30/92 85,021 02/15/93
52 541535AA8 LOMAS
FINANCIAL 297,000 9.000 86.875 10/31/2003 11/30/92 2,302 04/30/93
53 559177AE0 MAGNA
COPPER CO 700,000 11.500 106.500 01/15/2002 11/30/92 30,411 01/15/93
54 570387AF7 MARK IV
INDUSTRIES 650,000 6.250 115.250 02/15/2007 11/30/92 11,962 02/15/93
55 586009AF9 MEMOREX
TELEX CORP
PIK 1,663,088 10.000 25.500 02/15/98 11/30/92 02/15/93
56 597520AB1 MIDLAND
FUNDG II 1,900,000 13.250 109.460 07/23/2006 11/30/92 89,511 01/23/93
57 62945JAB2 NWA INC
DEFAULT 1,900,000 8.625 26.244 08/01/96 11/30/92 46,886 02/01/93
58 652478AC2 NEWS AMER
HLDGS INC 750,000 64.500 03/31/2002 11/30/92 03/31/93
59 652478AD0 NEWS AMER
HLDGS INC 1,300,000 9.125 100.250 10/15/99 11/30/92 11,533 04/15/93
60 656559AK7 NORTEK INC 700,000 13.500 100.000 06/15/97 11/30/92 43,575 12/15/92
61 690090AA3 OUTLET
BROADCASTING
INC 350,000 13.250 100.500 02/01/97 11/30/92 15,458 02/01/93
62 690768AX4 OWENS ILL
INC 3,200,000 9.750 98.625 08/15/2004 11/30/92 84,067 02/15/93
63 692766AD0 P & C FOODS
MKTS INC 500,000 13.750 107.000 10/11/98 11/30/92 9,549 04/11/93 10/11/93 104.000
64 692766AE8 P & C FOOD
MKTS INC 400,000 11.500 104.250 10/15/2001 11/30/92 5,878 04/15/93
65 693147AC4 PA HOLDINGS
CORP 500,000 13.750 107.500 07/15/99 11/30/92 25,972 01/15/93 07/15/93 106.880
66 693643AC2 PST HLDGS
INC 2,500,000 13.125 96.000 06/01/97 11/30/92 164,063 12/01/92
67 707832AB7 PENN
TRAFFIC CO 900,000 10.250 99.000 02/15/2002 11/30/92 27,163 02/15/93
68 707832AC5 PENN
TRAFFIC
CO NEW 900,000 10.375 99.000 10/01/2004 11/30/92 13,488 04/01/93
69 727547AA9 PLASTIC
CONTAINER
INC 750,000 10.750 101.500 04/01/2001 11/30/92 13,438 04/01/93
70 744482BF6 PUBLIC SVC
CO N H 458,000 15.230 128.751 07/01/2000 11/30/92 29,064 01/01/93 07/01/95 115.650
71 770685AA3 ROBIN MEDIA
GROUP INC 2,600,000 11.125 91.500 04/01/97 11/30/92 48,208 04/01/93
72 775100AA8 ROGERS
CABLESYSTEMS 1,150,000 9.625 99.500 08/01/2002 11/30/92 35,973 02/01/93
73 775100AB6 ROGERS
CABLESYSTEMS 1,400,000 10.125 99.250 09/01/2012 11/30/92 32,288 03/01/93
74 775103AA2 ROGERS
CANTEL
MOBILE INC 1,850,000 10.750 104.000 11/01/2001 11/30/92 16,573 05/01/93 11/01/96 103.000
75 784628AA7 SPTC HLDG
INC 2,900,000 12.125 95.000 10/01/2000 11/30/92 58,604 04/01/93
76 78462GAF8 SPI HLDG
INC 1,296,000 11.500 92.250 12/01/2002 11/30/92 74,520 12/01/92
77 809388AA9 SCOTT CABLE
COMMUNICATION
INC 1,750,000 12.250 89.500 04/15/2001 11/30/92 27,392 04/15/93
78 818046AA2 SEVEN UP RC
BOTTLING 1,400,000 11.500 99.750 08/01/99 11/30/92 49,194 02/01/93
79 827048AB5 SILGAN
HLDGS INC 3,900,000 62.750 12/15/2002 12/15/96 13.250 11/30/92 12/15/92
80 8595679B7 TELEX
COMMUNICATIONS
INC 1,000,000 14.500 103.000 06/01/99 11/30/92 72,500 12/01/92
81 861589AD1 STONE
CONTAINER
CORP 1,250,000 11.875 101.750 12/01/98 11/30/92 74,219 12/01/92
82 862133AA3 STORER
COMMUNICATIONS
INC 600,000 10.000 96.500 05/15/2003 11/30/92 2,667 05/15/93
83 868446AB1 SUPERMARKETS
GEN HLDGS
CORP 1,000,000 12.625 107.250 06/15/2002 11/30/92 58,215 12/15/92
84 872541AB3 TKR CABLE
INC 1,700,000 10.500 105.750 10/31/2007 11/30/92 10,908 04/30/93
85 873118AD3 T W FOOD
SERVICES
INC 377,775 11.250 100.250 11/01/2004 11/30/92 3,542 05/01/93
86 873118AD5 TW SVCS
INC 650,000 14.750 132.500 05/01/98 11/30/92 7,990 05/01/93
87 873118AE3 TW SVCS
INC 1,500,000 10.875 101.500 12/01/2002 11/30/92 6,344 06/01/93
88 8807799A3 TEREX CORP
NEW 1,400,000 13.000 90.000 08/01/96 11/30/92 60,667 02/01/93
89 893532AG6 TRANSCO
ENERGY CO 3,000,000 11.250 105.250 07/01/99 11/30/92 140,625 01/01/93 07/01/97 101.880
90 8959099A9 TRIANGLE
WIRE &
CABLE INC 500,000 13.500 80.000 01/15/2002 11/30/92 33,750 12/01/92
91 909214AW8 UNISYS
CORP 1,750,000 10.625 98.000 10/01/99 11/30/92 30,990 04/01/93
92 909214AX6 UNISYS
CORP 850,000 8.250 108.250 08/01/2000 11/30/92 23,375 02/01/93
93 909214AY4 UNISYS
CORP 1,000,000 9.750 100.000 09/15/96 11/30/92 18,688 03/15/93
94 930676AE1 WAINOCO
OIL CO 1,250,000 12.000 100.500 08/01/2002 11/30/92 42,917 02/01/93
95 948774AA2 WEIRTON
STL CORP 2,600,000 10.875 83.000 10/15/99 11/30/92 36,129 04/15/93
96 963142AG9 WHEELING
PITTSBURG
CORP 800,000 12.250 99.500 11/15/2000 11/30/92 4,356 05/15/93
97 978093AB8 WOLVERINE
TUBE INC 1,500,000 10.125 101.250 09/01/2002 11/30/92 37,547 03/01/93
------------- -----------
132,311,955 3,248,095
============= ============
</TABLE>
<TABLE>
<CAPTION>
CONTINUED.. PORTFOLIO HOLDINGS - OUTPUT
==================================================================================================================
AS OF 11/30/92 (ADJUSTED FOR UNSETTLED TRADES)..CONTINUED
=========================================================
DAILY MARKET VALUE NO OF GROSS
YIELD AND DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- ---------------------------------- ---------- ----------- -------------- --------- ---- -----------
<S><C> <C> <C> <C> <C> <C> <C><C>
A B C O P Q R S T U
0 002034AB2 ARA GROUP INC 8.9495% 0.024860% 783,411.88 194.75 30 5,842.50
1 006848AD7 ADELPHIA COMMUNICATIONS CORP 11.7511% 0.032642% 2,063,437.50 673.55 30 20,206.50
2 016745AA9 ALLBRITTON COMMUNICATIONS CO 11.7372% 0.032603% 1,781,232.64 580.74 30 17,422.20
3 027429AW9 AMERICAN MEDICAL INTL INC 11.0535% 0.030704% 568,625.00 174.59 30 5,237.70
4 027429AY5 AMERICAN MED INTL INC 12.7839% 0.035511% 423,000.00 150.21 30 4,506.30
5 029163AA0 AMERICAN RE CORP 10.2614% 0.028504% 2,233,196.87 636.55 30 19,096.50
6 029717AE5 AMERICAN STD INC 13.8142% 0.038373% 2,838,750.00 1,089.30 30 32,679.00
7 042170AH3 ARMCO INC 11.2029% 0.031119% 1,072,833.85 333.86 30 10,015.80
8 050297AA8 AUBURN HILLS TR 12.8684% 0.035746% 2,168,203.14 775.04 30 23,251.20
9 066229AA3 BANKERS LIFE HLDGS CO 12.9452% 0.035959% 1,316,827.78 473.52 30 14,205.60
10 067774AA7 BARNES & NOBLES INC 12.1172% 0.033659% 926,953.13 312.00 30 9,360.00
11 073913AA3 BEATRICE FOODS INC 11.4067% 0.031685% 1,529,500.00 484.63 30 14,538.90
12 077852AA9 BELL & HOWELL GROUP INC 11.4758% 0.031877% 635,372.61 202.54 30 6,076.20
13 088667AA8 BIBB CO DEL 13.7376% 0.038160% 1,033,333.33 394.32 30 11,829.60
14 131269AA0 CALMAR SPRAYING SYS INC 17.0573% 0.047381% 818,416.67 387.78 30 11,633.40
15 161241AR5 CHARTER MEDICAL CORP 12.2855% 0.034126% 627,550.01 214.16 30 6,424.80
16 194831AB9 COLLINS AND AIKMAN GROUP INC 15.9675% 0.044354% 694,750.00 308.15 30 9,244.50
17 196879AB6 COLTEC INDS INC 9.9031% 0.027509% 518,541.67 142.64 30 4,279.20
18 196879AD2 COLTEC INDS INC 9.4117% 0.026144% 1,792,838.54 468.71 30 14,061.30
19 197648BU1 COLUMBIA GAS SYSTEMS DEFAULT 0.000000% 1,894,375.00 0.00 30 0.00
20 197709AA6 COLUMBIA HOSP CORP 11.0321% 0.030645% 915,468.75 280.54 30 8,416.20
21 199904AA1 COMCAST CELLULAR 10.2842% 0.028567% 2,219,500.00 634.05 30 19,021.50
22 211177AE0 CONTINENTAL CABLEVISION INC 10.2770% 0.028547% 3,104,033.33 886.12 30 26,583.60
23 211642AB9 CONTINENTAL MED SYS INC 11.0813% 0.030781% 1,426,483.33 439.09 30 13,172.70
24 230208AB6 CULLUM COS INC 15.2620% 0.042394% 1,790,000.00 758.86 30 22,765.80
25 235529AB0 DALTON B CO 11.8405% 0.032890% 724,750.00 238.37 30 7,151.10
26 245279AC8 DEL NORTE FDG CORP DEFAULT 0.000000% 150,579.00 0.00 30 0.00
27 256128AA7 DR PEPPER BOTTLING CO TEX 9.4131% 0.026147% 402,450.00 105.23 30 3,156.90
28 256131AD5 DR PEPPER/SEVEN UP COS INC 11.0052% 0.030570% 2,104,375.00 643.31 30 19,299.30
29 269612AA5 EAGLE INDS INC 11.7723% 0.032701% 1,119,941.66 366.23 30 10,986.90
30 283681AF1 EL PASO FNDG DEFAULT 0.000000% 313,188.50 0.00 30 0.00
31 291525AB9 EMMIS BROADCASTING CORP 15.8697% 0.044083% 2,437,978.14 1,074.72 30 32,241.60
32 29409KAA9 ENVIROSOURCE INC 12.2710% 0.034086% 2,612,000.00 890.33 30 26,709.90
33 307669AC5 FARM FRESH INC 13.0073% 0.036131% 1,719,715.28 621.36 30 18,640.80
34 315290AE6 FERRELLGAS INC 10.9821% 0.030506% 1,476,365.62 450.38 30 13,511.40
35 344126AA5 FOAMEX L.P. 11.6443% 0.032345% 1,144,250.00 370.11 30 11,103.30
36 344126AB3 FOAMEX L P/FOAMEX CAP CORP 12.2499% 0.034028% 796,666.67 271.09 30 8,132.70
37 346091AE1 FOREST OIL CORP 14.4982% 0.040273% 248,440.97 100.05 30 3,001.50
38 347460AD9 FORT HOWARD CORP 12.4903% 0.034695% 3,166,562.49 1,098.65 30 32,959.50
39 368145AE8 GAYLORD CONTAINER CORP 13.6535% 0.037926% 512,513.66 194.38 30 5,831.40
40 368145AF5 GAYLORD CONTAINER CORP 13.5704% 0.037696% 539,753.80 203.46 30 6,103.80
41 369330AB1 GENERAL CHEM CORP 10.0337% 0.027871% 562,083.34 156.66 30 4,699.80
42 370064AL1 GENERAL HOST CORP 6.8790% 0.019108% 823,916.67 157.44 30 4,723.20
43 386532AD7 GRAND UN CO 11.2862% 0.031351% 1,301,744.79 408.10 30 12,243.00
44 420877AA0 HAYNES INTL INC 15.5448% 0.043180% 1,814,025.00 783.30 30 23,499.00
45 42221HAF4 HEALTHTRUST INC 9.7911% 0.027198% 1,333,072.92 362.56 30 10,876.80
46 42724GAA9 HERITAGE MEDIA SVCS 10.5215% 0.029226% 2,696,458.35 788.07 30 23,642.10
47 431691AA2 HILLS STORES CO DEFAULT 0.000000% 238,965.00 0.00 30 0.00
48 45167RAC8 IDEX CORP 9.4539% 0.026261% 1,038,416.67 272.70 30 8,181.00
49 46624EAG3 JPS TEXTILE GROUP INC 11.5869% 0.032186% 2,070,750.00 666.49 30 19,994.70
50 46624EAJ7 JPS TEXTILE GROUP INC 13.6331% 0.037870% 418,866.66 158.62 30 4,758.60
51 540411AA3 LOEHMANNS HLDS INC 13.5921% 0.037756% 2,195,520.83 828.93 30 24,867.90
52 541535AA8 LOMAS FINANCIAL 11.0893% 0.030803% 260,320.50 80.19 30 2,405.70
53 559177AE0 MAGNA COPPER CO 10.3666% 0.028796% 775,911.11 223.43 30 6,702.90
54 570387AF7 MARK IV INDUSTRIES 4.7578% 0.013216% 761,086.80 100.59 30 3,017.70
55 586009AF9 MEMOREX TELEX CORP 10.0000% 0.027778% 424,087.44 117.80 30 3,534.00
56 597520AB1 MIDLAND FUNDG II 11.8197% 0.032833% 2,169,258.71 712.22 30 21,366.60
57 62945JAB2 NWA INC 0.000000% 545,526.26 0.00 30 0.00
58 652478AC2 NEWS AMER HLDGS INC 4.7518% 0.013199% 483,750.00 63.85 30 1,915.50
59 652478AD0 NEWS AMER HLDGS INC 9.1182% 0.025328% 1,314,782.99 333.01 30 9,990.30
60 656559AK7 NORTEK INC 13.4783% 0.037440% 743,575.00 278.39 30 8,351.70
61 690090AA3 OUTLET BROADCASTING INC 13.0490% 0.036247% 367,208.33 133.10 30 3,993.00
62 690768AX4 OWENS ILL INC 9.9749% 0.027708% 3,240,066.67 897.76 30 26,932.80
63 692766AD0 P & C FOODS MKTS INC 9.5528% 0.026536% 544,548.61 144.50 30 4,335.00
64 692766AE8 P & C FOOD MKTS INC 10.7302% 0.029806% 422,877.78 126.04 30 3,781.20
65 693147AC4 PA HOLDINGS CORP 11.7008% 0.032502% 563,472.22 183.14 30 5,494.20
66 693643AC2 PST HLDGS INC 14.3494% 0.039859% 2,564,062.50 1,022.02 30 30,660.60
67 707832AB7 PENN TRAFFIC CO 10.4056% 0.028905% 918,162.50 265.39 30 7,961.70
68 707832AC5 PENN TRAFFIC CO NEW 10.5464% 0.029295% 904,487.50 264.97 30 7,949.10
69 727547AA9 PLASTIC CONTAINER INC 10.4596% 0.029055% 774,687.50 225.08 30 6,752.40
70 744482BF6 PUBLIC SVC CO N H 8.1897% 0.022749% 618,741.67 140.76 30 4,222.80
71 770685AA3 ROBIN MEDIA GROUP INC 13.7559% 0.038211% 2,427,208.33 927.45 30 27,823.50
72 775100AA8 ROGERS CABLESYSTEMS 9.7062% 0.026962% 1,180,223.44 318.21 30 9,546.30
73 775100AB6 ROGERS CABLESYSTEMS 10.2300% 0.028417% 1,421 787.50 404.03 30 12,120.90
74 775103AA2 ROGERS CANTEL MOBILE INC 10.1109% 0.028086% 1,940,572.92 545.03 30 16,350.90
75 784628AA7 SPTC HLDG INC 13.1413% 0.036504% 2,813,604.17 1,027.07 30 30,812.10
76 78462GAF8 SPI HLDG INC 12.8945% 0.035818% 1,270,080.00 454.92 30 13,647.60
77 809388AA9 SCOTT CABLE COMMUNICATION INC 14.4258% 0.040072% 1,593,642.36 638.60 30 19,158.00
78 818046AA2 SEVEN UP RC BOTTLING 11.6018% 0.032227% 1,445,694.44 465.91 30 13,977.30
79 827048AB5 SILGAN HLDGS INC 13.4012% 0.037226% 2,447,250.00 911.00 30 27,330.00
80 8595679B7 TELEX COMMUNICATIONS INC 13.7766% 0.038268% 1,102,500.00 421.91 30 12,657.30
81 861589AD1 STONE CONTAINER CORP 11.4557% 0.031821% 1,346,093.75 428.35 30 12,850.50
82 862133AA3 STORER COMMUNICATIONS INC 10.5530% 0.029314% 581,666.66 170.51 30 5,115.30
83 868446AB1 SUPERMARKETS GEN HLDGS CORP 11.3506% 0.031530% 1,130,715.28 356.51 30 10,695.30
84 872541AB3 TKR CABLE INC 9.7849% 0.027180% 1,808,658.33 491.60 30 14,748.00
85 873118AD3 T W FOOD SERVICES INC 11.2004% 0.031112% 382,261.08 118.93 30 3,567.90
86 873118AD5 TW SVCS INC 7.3546% 0.020429% 869,239.58 177.58 30 5,327.40
87 873118AE3 TW SVCS INC 10.5544% 0.029318% 1,528,843.75 448.22 30 13,446.60
88 8807799A3 TEREX CORP NEW 16.6921% 0.046367% 1,320,666.67 612.35 30 18,370.50
89 893532AG6 TRANSCO ENERGY CO 10.1042% 0.028067% 3,298,125.00 925.69 30 27,770.70
90 8959099A9 TRIANGLE WIRE & CABLE INC 10.4733% 0.029093% 433,750.00 126.19 30 3,785.70
91 909214AW8 UNISYS CORP 11.0296% 0.030638% 1,745,989.58 534.93 30 16,047.90
92 909214AX6 UNISYS CORP 6.8407% 0.019002% 943,500.00 179.28 30 5,378.40
93 909214AY4 UNISYS CORP 9.7842% 0.027178% 1,018,687.50 276.86 30 8,305.80
94 930676AE1 WAINOCO OIL CO 11.9919% 0.033311% 1,299,166.66 432.76 30 12,982.80
95 948774AA2 WEIRTON STL CORP 14.8831% 0.041342% 2,194,129.17 907.10 30 27,213.00
96 963142AG9 WHEELING PITTSBURG CORP 12.3381% 0.034272% 880,355.55 274.30 30 8,229.00
97 978093AB8 WOLVERINE TUBE INC 9.9122% 0.027534% 1,556,296.89 428.51 30 12,855.30
--------------
1,215,668.40
--------------
98
99
100
101
102
103
104
105
106
107
</TABLE>
<TABLE>
<CAPTION>
PURCHASES SETTLING IN DECEMBER
==========================================
PURCHASE MATURITY 1ST PMT STEP SETTLEMENT ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- ------------- -------- ------- ------- ----------- ----- ------- -------- --------- -------- ---- -----
A B C D E F G H I J K L M N
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
115 370064AL1 GENERAL HOST
CORP 150,000 8.000 104.750 02/15/2002 12/01/92 3,533 02/15/93
116 465678AA8 ITHACA
INDUSTRIES 1,150,000 11.125 100.000 12/15/2002 12/10/92 06/15/93
117 465678AA8 ITHACA
INDUSTRIES 300,000 11.125 100.750 12/15/2002 12/10/92 06/15/93
118 527480AG2 LEVITZ
FURNITURE 1,100,000 12.375 100.000 04/15/97 12/10/92 04/15/93
119 527480AG2 LEVITZ
FURNITURE 350,000 12.375 100.750 04/15/97 12/11/92 120 04/15/93
120 465678AA8 ITHACA
INDUSTRIES 250,000 11.125 100.750 12/15/2002 12/14/92 309 06/15/93
121 527480AG2 LEVITZ
FURNITURE 450,000 12.375 100.500 04/15/97 12/14/92 619 04/15/93
122 749084AA7 QUORUM HEALTH
GROUP 1,100,000 11.875 100.000 12/15/2002 12/15/92 06/15/93
123 45812CAA4 INTEGRATED
HEALTH SV 375,000 6.000 100.000 01/01/2003 12/16/92 01/01/93
124 749084AA7 QUORUM HEALTH
GROUP 400,000 11.875 101.125 12/15/2002 12/16/92 132 06/15/93
125 302051AB3 EXIDE CORP 1,100,000 10.750 100.000 12/15/2002 12/17/92 06/15/93
126 465856AA0 IVEX
PACKAGING 800,000 12.500 99.299 12/15/2002 12/17/92 06/15/93
127 91528LAA3 UNIVISION
TELEVISION 1,350,000 11.750 100.000 12/15/2000 12/17/92 06/15/93
128 066229AA3 BANKERS LIFE
HLDGS C 500,000 13.000 101.500 11/01/2002 12/21/92 7,583 05/01/93
129 343172AB8 FLORIDA STL
CORP 1,250,000 11.500 100.000 12/15/2000 12/21/92 06/15/93
130 457472AB4 INLAND STL
INDS INC 2,000,000 12.750 100.000 12/15/2002 12/23/92 06/15/93
131 302051AB3 EXIDE CORP 500,000 10.750 101.000 12/15/2002 12/29/92 1,792 06/15/93
132 315290AE6 FERRELLGAS
INC 750,000 11.625 103.750 12/15/2003 12/29/92 3,391 06/15/93
</TABLE>
<TABLE>
<CAPTION>
CONTINUED..PURCHASES SETTLING IN DECEMBER
=================================================
DAILY MARKET VALUE NO. GROSS
YIELD AND OF DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- --------------------- --------- ----------- ------------- ------- ------ ----------
A B C O P Q R S T U
<S> <C> <C> <C> <C> <C> <C> <C> <C>
115 370064AL1 GENERAL HOST CORP 7.2779% 0.020216% 160,658.33 32.48 30 974.40
116 465678AA8 ITHACA INDUSTRIES 11.1005% 0.030835% 1,150,000.00 354.60 21 7,446.60
117 465678AA8 ITHACA INDUSTRIES 10.9753% 0.030487% 302,250.00 92.15 21 1,935.15
118 527480AG2 LEVITZ FURNITURE 12.9318% 0.035922% 1,100,000.00 395.14 21 8,297.94
119 527480AG2 LEVITZ FURNITURE 12.6997% 0.035277% 352,745.31 124.44 20 2,488.80
120 465678AA8 ITHACA INDUSTRIES 10.9741% 0.030484% 252,184.03 76.87 17 1,306.79
121 527480AG2 LEVITZ FURNITURE 12.7767% 0.035491% 452,868.75 160.73 17 2,732.41
122 749084AA7 QUORUM HEALTH GROUP 11.8750% 0.032986% 1,100,000.00 362.85 16 5,805.60
123 45812CAA4 INTEGRATED HEALTH SV 6.3740% 0.017705% 375,000.00 66.40 15 996.00
124 749084AA7 QUORUM HEALTH GROUP 11.6810% 0.032447% 404,631.94 131.29 15 1,969.35
125 302051AB3 EXIDE CORP 10.7594% 0.029887% 1,100,000.00 328.76 14 4,602.64
126 465856AA0 IVEX PACKAGING 12.6371% 0.035103% 794,392.00 278.86 14 3,904.04
127 91528LAA3 UNIVISION TELEVISION 11.7621% 0.032673% 1,350,000.00 441.08 14 6,175.12
128 066229AA3 BANKERS LIFE HLDGS C 12.7663% 0.035462% 515,083.33 182.66 10 1,826.60
129 343172AB8 FLORIDA STL CORP 11.5354% 0.032043% 1,250,000.00 400.53 10 4,005.30
130 457472AB4 INLAND STL INDS INC 12.7981% 0.035550% 2,000,000.00 711.01 8 5,688.08
131 302051AB3 EXIDE CORP 10.5917% 0.029422% 506,791.67 149.11 2 298.22
132 315290AE6 FERRELLGAS INC 11.0238% 0.030622% 781,515.63 239.31 2 478.62
-----------
60,931.66
-----------
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
141
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
</TABLE>
<TABLE>
<CAPTION>
SALES SETTLING IN DECEMBER
===================================================
SALE MATURITY 1st PMT STEP SETTLEMENT ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- ----------- -------- ------- -------- ---------- ---- ------ --------- -------- -------- ---- -----
A B C D E F G H I J K L M N
<S> <C> <C> <C> <C> <C> <C> <C> <C>
177 344126AB3 FOAMEX L P
/FOAMEX CA 350,000 11.875 98.000 10/01/2004 12/02/92 5,542 04/01/93
178 541535AA8 LOMAS FINL
CORP 297,000 9.000 86.875 10/31/2003 12/02/92 2,302 04/30/93
179 8807799A3 TEREX CORP
NEW 250,000 13.000 90.000 08/01/96 12/04/92 10,833 02/01/93
180 693643AC2 PST HOLDGS
INC 300,000 13.125 96.000 06/01/97 12/09/92 19,688 12/01/92
181 211642AB9 CONTINENTAL
MED SYS 50,000 10.875 98.750 08/15/2002 12/14/92 1,571 02/15/93
182 235529AB0 DALTON
B CO 650,000 13.500 107.000 02/01/99 12/16/92 29,250 02/01/93
183 45812CAA4 INTEGRATED
HEALTH SV 375,000 6.000 100.000 01/01/2003 12/16/92 01/01/93
184 873118AD5 TW SVCS INC 650,000 14.750 132.500 05/01/98 12/16/92 7,990 05/01/93
185 963142AG9 WHEELING
PITTSBURG C 800,000 12.250 99.500 11/15/2000 12/16/92 4,356 05/15/93
186 8807799A3 TEREX CORP
NEW 900,000 13.000 90.000 08/01/96 12/17/92 39,000 02/01/93
</TABLE>
<TABLE>
<CAPTION>
CONTINUED..SALES SETTLING IN DECEMBER
==================================================
DAILY MARKET VALUE NO. GROSS
YIELD AND OF DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- -------------------- -------- ----------- ------------ --------- ----- -----------
A B C O P Q R S T U
<S> <C> <C> <C> <C> <C> <C> <C> <C>
177 344126AB3 FOAMEX L P/FOAMEX CA 12.2499% 0.034028% 348,541.67 118.60 -29 (3,439.40)
178 541535AA8 LOMAS FINL CORP 11.0893% 0.030803% 260,320.50 80.19 -29 (2,325.51)
179 8807799A3 TEREX CORP NEW 16.6921% 0.046367% 235,833.33 109.35 -27 (2,952.45)
180 693643AC2 PST HOLDGS INC 14.3494% 0.039859% 307,687.50 122.64 -22 (2,698.08)
181 211642AB9 CONTINENTAL MED SYS 11.0813% 0.030781% 50,945.83 15.68 -17 (266.56)
182 235529AB0 DALTON B CO 11.8405% 0.032890% 724,750.00 238.37 -15 (3,575.55)
183 45812CAA4 INTEGRATED HEALTH SV 6.3740% 0.017705% 375,000.00 66.40 -15 (996.00)
184 873118AD5 TW SVCS INC 7.3546% 0.020429% 869,239.58 177.58 -15 (2,663.70)
185 963142AG9 WHEELING PITTSBURG C 12.3381% 0.034272% 800,355.55 274.30 -15 (4,114.50)
186 8807799A3 TEREX CORP NEW 16.6921% 0.046367% 849,000.00 393.66 -14 (5,511.24)
------------
(28,542.99)
------------
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
---------------
Total Gross Income Earned from Corporate Obligations
Computed on a Yield to Maturity or Yield to Call Basis....... 1,248,057.07
===============
</TABLE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND, INC. - INCOME PORTFOLIO
STANDARDIZED YIELD CALCULATION
AS OF 31-DEC-92
======================================================================================================================
LBVIP Variable Annuity Account I
LBVIP - Income Port. Income Subaccount
-------------------- --------------------------------
% of o/s
Gross Income Earned During Base Period: Amount Yield shares Amount Yield
- -------------------------------------- ------------ ------ -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
From Corporate Obligations:
Computed on a Yield to Maturity or Yield to Call Basis.... $1,237,481 6.21% 97.639% $1,208,259 6.06%
From Mortgage-Backed Obligations:
Book Income & Amortization for Past 30 Days............... 271,893 1.36% 97.639% 265,473 1.33%
Gain/Loss on Paydowns..................................... (16,998) -0.09% 97.639% (16,597) -0.08%
From Common & Preferred Stock.................................. 3,966 0.02% 97.639% 3,872 0.02%
From Short-Term Securities:
Book Income adjusted to reflect a 30-day base period...... 57,825 0.29% 97.639% 56,460 0.28%
------------ -------- ------------ ----------
TOTAL GROSS INCOME............................................. $1,554,167 7.79% $1,517,467 7.61%
============ ======== ============ ==========
Investment advisory fee accrued during base period............. $80,459 0.40% 97.639% 78,559 0.39%
============ ======== ============ ==========
Mortality and expense risk charges at the subaccount Level..... NA 217,169 1.09%
============ ======== ============ ==========
Average daily number of shares/units outstanding
during the base period (Schedule 2)...................... 24,602,501 15,682,993
============ ============
Maximum public offering price per share/unit
on the last day of the base period (Schedule 2).......... 9.87 15.434223
============ ============
Standardized Yield............................................. 7.39%(a) 6.13%(b)
============ ============
Footnotes:
==========
(a) Current yield is computed using the following formula:
6
2[ [ (Gross Income - Advisory Fee) +1 ] -1 ] X 100
---------------------------------------------------
[ [ (Average Daily shares x Maximum Offering Price) ] ]
(b) Current yield is computed using the following formula:
6
2[ [ (Gross Income - Advisory Fee - M&E Charge) +1 ] -1 ] X 100
--------------------------------------------------
[ [ (Average Daily Units x Maximum Offering Price) ] ]
Preparer: /s/Jane I Sholtz
-----------------------
Reviewer: /s/Rand Mattsson
-----------------------
</TABLE>
<PAGE>
LBVIP Series Fund - Income Portfolio
Calculation of Average Shares Outstanding for
Each Separate Account for Purposes of Computing
SEC Yields for the month end 31-Dec-92
Shares outstanding for purposes of allocating daily income:
- ----------------------------------------------------------------------------
DATE VUL SPVL VA TOTAL
- ------------------- ----------- ------------ --------------- ---------------
12/01/92 498,154.650 68,115.889 23,220,919.688 23,787,190.227
12/02/92 500,366.298 68,129.190 23,317,337.261 23,885,832.749
12/03/92 501,397.287 68,142.293 23,372,318.541 23,941,858.121
12/04/92 501,444.711 68,155.431 23,391,942.066 23,961,542.208
12/07/92 501,786.075 68,168.529 23,449,327.169 24,019,281.773
12/08/92 501,488.111 69,342.218 23,495,572.080 24,066,402.409
12/09/92 502,370.719 69,355.547 23,618,658.579 24,190,384.845
12/10/92 503,774.773 69,368.801 23,669,132.953 24,242,276.527
12/11/92 506,489.395 69,382.066 23,753,230.267 24,329,101.728
12/14/92 507,380.432 69,395.312 23,846,705.192 24,423,480.936
12/15/92 508,772.064 69,434.796 23,955,364.547 24,533,571.407
12/16/92 510,241.637 69,447.526 24,044,245.294 24,623,934.457
12/17/92 517,063.694 69,460.652 24,123,347.222 24,709,871.568
12/18/92 518,414.606 69,473.851 24,218,553.396 24,806,441.853
12/21/92 514,888.872 69,486.910 24,261,968.999 24,846,344.781
12/22/92 515,099.647 69,529.920 24,298,017.889 24,882,647.456
12/23/92 516,586.519 69,542.782 24,401,205.836 24,987,335.137
12/28/92 518,093.696 69,556.070 24,487,168.218 25,074,817.984
12/29/92 515,636.963 69,492.187 24,553,160.953 25,138,290.103
12/30/92 523,842.732 69,500.355 24,635,609.340 25,228,952.427
12/31/92 526,597.357 69,513.730 24,752,807.301 25,348,918.388
0.000
0.000
Average shares
outstanding.........509,994.773 69,142.574 23,946,028.228 24,525,165.575
============ ========== ================ ==============
Average shares as a
percentage of total
shares.............. 2.079% 0.282% 97.639% 100.000%
============ ========== ================ ==============
LBVIP Series Fund, Inc. - Income Portfolio
Income Earned from Common and Preferred Stocks during December, 1992
for purposes of computing SEC Standardized Yield
DAILY
ANNUAL DIVIDEND # OF GROSS
DIVIDEND RATE PER DAYS INCOME
RATE SHARE IN FOR
EQUITY SHARES PER (360 DAY DAILY BASE BASE
CUSIP ISSUE TYPE OWNED SHARE YEAR) INCOME PERIOD PERIOD
- --------- -------------- ----- ------ ----- -------- ------- ------ -------
CASH DIVIDEND SECURITIES:
370442873 General Motors P/S 5,000 3.25 0.0090 45.14 30 1,354.17
370442873 General Motors P/S 2,500 3.25 0.0090 22.57 2 45.14
843444308 Southern
National Corp. P/S 17,500 1.76 0.0049 85.56 30 2,566.67
---------
Gross Income from Common and Preferred stocks 3,965.97
=========
# Use 4 days in October.
* Use 6 days in October.
<PAGE>
<TABLE>
<CAPTION>
LBVIP INCOME PORTFOLIO
BOOK INCOME AND EXPENSES BY MONTH
FOR FISCAL YEAR ENDING 12/31/92
======================================================================================================================
MONTHLY INCOME
-----------------------------
AMORT. AMORT. TOTAL
L-T S-T DIVIDEND OF OF OTHER GROSS
MONTH INTEREST INTEREST INCOME DISCOUNT PREMIUM INCOME INCOME
- -------- ---------- ---------- ---------- ----------- --------- --------- -----------
-----------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan-92 631,102 38,601 (6,250) 34,845 12,622 2,721 688,397
Feb-92 635,605 39,090 0 32,264 13,045 21,438 715,352
Mar-92 812,540 32,284 22,563 45,145 19,059 (20,191) 873,280
Apr-92 816,951 37,617 11,015 39,523 21,008 32,537 916,635
May-92 822,198 56,346 (0) 30,932 17,787 1,097 892,786
Jun-92 1,020,881 69,121 30,625 26,873 29,921 1,831 1,119,410
Jul-92 1,059,053 57,708 7,383 24,197 40,179 2,067 1,110,229
Aug-92 1,139,002 53,542 0 29,082 39,413 1,731 1,183,943
Sep-92 1,216,682 48,634 17,344 35,594 44,638 2,116 1,275,731
Oct-92 1,212,824 65,823 7,383 38,169 40,639 2,022 1,285,582
Nov-92 1,422,281 62,518 0 37,859 41,060 1,623 1,483,221
Dec-92 1,482,032 59,753 4,063 36,302 42,557 2,609 1,542,201
- -------- ----------- ------------ --------- ---------- ----------- --------- -------------
(Y-T-D)
TOTALS 12,271,150 621,037 94,124 410,784 361,927 51,600 13,086,769
======== =========== ============ ========= ========== =========== ========== =============
</TABLE>
<TABLE>
CONTINUED...... LBVIP INCOME PORTFOLIO
BOOK INCOME AND EXPENSES BY MONTH
FOR FISCAL YEAR ENDING 12/31/92.....CONTINUED
===================================================================================================================
MONTHLY EXPENSES
-------------------------------
ADVISORY NET OTHER TOTAL TOTAL NET
FEE FEE ADVISORY ACCRUED NET INVESTMENT
MONTH EXPENSE WAIVER FEE TAXES EXPENSES EXPENSES INCOME
- --------- ----------- ------- ---------- ------ --------- ----------- ------------
----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jan-92 34,739 0 34,739 0 0 34,739 653,658
Feb-92 33,972 0 33,972 0 0 33,972 681,380
Mar-92 42,790 0 42,790 0 0 42,790 830,490
Apr-92 43,974 0 43,974 0 0 43,974 872,661
May-92 46,836 0 46,836 0 0 46,836 845,950
Jun-92 55,793 0 55,793 0 0 55,793 1,063,617
Jul-92 59,004 0 59,004 0 0 59,004 1,051,225
Aug-92 64,301 0 64,301 0 0 64,301 1,119,642
Sep-92 67,011 0 67,011 0 0 67,011 1,208,720
Oct-92 70,828 0 70,828 0 0 70,828 1,214,754
Nov-92 77,900 0 77,900 0 0 77,900 1,405,321
Dec-92 83,141 0 83,141 0 0 83,141 1,459,060
- ---------- ----------- ------- ---------- ------- ------- ------------- --------------
(Y-T-D)
TOTALS 680,289 0 680,289 0 0 680,289 12,406,480
========== =========== ======= ========== ======= ======== ============ ==============
</TABLE>
<TABLE>
<CAPTION>
LBVIP SERIES FUND - INCOME PORTFOLIO
PORTFOLIO SECURITY TRANSACTION JOURNAL
12/1/92 - 12/31/92
TRAN PAR ENTRY TRADE SETTLE
CODE VALUE NAME DATE DATE DATE PRICE
- ---- -------- ----- ------ ------- ------- -------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
SALE 26,890 FED HM LN PC C00152 8.0000000% 20220501 92.214 921201 921215 100.000
SALE 43,286 FED HM LN PC # 17022 8.0000000% 20170401 921214 921201 930115 100.000
SALE 798 FED HM LN PC # 29837 8.0000000% 20170801 921214 921201 930115 100.000
SALE 576 FED HM LN PC D23288 8.0000000% 20220901 921214 921201 921215 100.000
SALE 659 FED HM LN PC D23550 8.0000000% 20220901 921214 921201 921215 100.000
SALE 1,059 FED HM LN PC D23661 8.0000000% 20220901 921214 921201 921215 100.000
SALE 1,482 FED HM LN PC D23741 8.0000000% 20220801 921214 921201 921215 100.000
SALE 8,807 GNMA POOL # 158225 9.5000000% 20160515 921215 921201 921215 100.000
SALE 68,889 GNMA POOL # 182919 9.0000000% 20170215 921215 921201 921215 100.000
SALE 791 GNMA POOL # 187288 9.5000000% 20161115 921215 921201 921215 100.000
SALE 60,595 GNMA POOL # 231281 9.5000000% 20181115 921215 921201 921215 100.000
SALE 857 GNMA POOL # 250306 9.5000000% 20181115 921215 921201 921215 100.000
SALE 107,107 GNMA POOL # 284421 9.5000000% 20200215 921215 921201 921215 100.000
SALE 28,129 GNMA # 286074 9.5000000% 20200515 921215 921201 921215 100.000
SALE 27,453 GNMA POOL # 288709 9.5000000% 20200515 921215 921201 921215 100.000
SALE 39,811 GNMA POOL # 291141 9.5000000% 20200515 921215 921201 921215 100.000
SALE 22,933 GNMA POOL 315074 9.0000000% 20211115 921215 921201 921215 100.000
SALE 754 GNMA POOL 325502 9.5000000% 20220315 921215 921201 921215 100.000
SALE 73,771 GNMA POOL 327453 8.0000000% 20220815 921215 921201 921215 100.000
SALE 309,945 PREMIER AUTO TR 4.5500000% 19980315 921216 921215 921215 100.000
SALE 257,460 PREMIER AUTO TR 4.5500000% 19980315 921222 921215 921215 100.000
SALE 122,072 SPNB HOME EQUITY LN 7.8500000% 19980515 921223 921215 921215 100.000
</TABLE>
<TABLE>
<CAPTION>
CONTINUED.. LBVIP SERIES FUND - INCOME PORTFOLIO
PORTFOLIO SECURITY TRANSACTION JOURNAL
12/1/92 - 12/31/92.....CONTINUED
TRAN PAR TOTAL IDENTIFIED S-T L-T
CODE VALUE NAME PROCEEDS INTEREST COST GAIN/LOSS GAIN/LOSS BROKER
---- ------- ----- ------------ ---------- ------------- ----------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
SALE 26,890 FED HM LN PC C00152 40,093.68 13203.43 26,638.15 252.10 .00 PRINC:
SALE 43,286 FED HM LN PC # 17022 49,971.61 6885.46 41,514.31 .00 1,772.04 PRINC:
SALE 798 FED HM LN PC # 29837 6,170.01 5371.38 765.36 .00 32.67 PRINC:
SALE 576 FED HM LN PC D23288 6,523.95 5947.84 602.03 -25.92 .00 PRINC:
SALE 659 FED HM LN PC D23550 7,443.49 6784.40 688.75 -29.66 .00 PRINC:
SALE 1,059 FED HM LN PC D23661 7,822.83 6763.42 1,107.08 -47.67 .00 PRINC:
SALE 1,482 FED HM LN PC D23741 8,237.99 6756.28 1,548.39 -66.68 .00 PRINC:
SALE 8,807 GNMA POOL # 158225 12,401.26 3594.11 9,544.75 -737.60 .00 PRINC:
SALE 68,889 GNMA POOL # 182919 90,433.47 21544.97 73,667.64 -4,779.14 .00 PRINC:
SALE 791 GNMA POOL # 187288 8,010.37 7219.09 857.55 -66.27 .00 PRINC:
SALE 60,595 GNMA POOL # 231281 68,045.70 7450.68 65,669.85 -5,074.83 .00 PRINC:
SALE 857 GNMA POOL # 250306 7,618.88 6761.81 928.85 -71.78 .00 PRINC:
SALE 107,107 GNMA POOL # 284421 112,365.74 5259.13 106,771.90 .00 334.71 PRINC:
SALE 28,129 GNMA # 286074 34,920.57 6791.78 27,742.02 .00 386.77 PRINC:
SALE 27,453 GNMA POOL # 288709 34,112.47 6659.26 29,675.20 -2,221.99 .00 PRINC:
SALE 39,811 GNMA POOL # 291141 46,744.58 6933.19 43,033.62 -3,222.23 .00 PRINC:
SALE 22,933 GNMA POOL 315074 34,398.48 11465.23 24,201.75 -1,268.50 .00 PRINC:
SALE 754 GNMA POOL 325502 8,127.20 7372.93 817.44 -63.17 .00 PRINC:
SALE 73,771 GNMA POOL 327453 94,263.51 20492.71 77,828.19 -4,057.39 .00 PRINC:
SALE 309,945 PREMIER AUTO TR 309,944.87 .00 309,231.38 713.49 .00 PRINC:
SALE 257,460 PREMIER AUTO TR 257,459.88 .00 254,597.57 2,862.31 .00 PRINC:
SALE 122,072 SPNB HOME EQUITY LN 122,072.15 .00 123,691.51 -1,722.36 103.00 PRINC:
TERM L-T 1,204,125 1,367,182.89 163057.70 1,221,123.29 -19,627.29 2,629.19
TRANSACTION SALE 1,204,125 1,367,182.89 163057.70 1,221,123.29 -19,627.29 2,629.19
1,204,125 1,367,182.89 163057.70 1,221,123.29 -19,627.29 2,629.19
</TABLE>
<TABLE>
<CAPTION>
SCHEDULE OF BOOK INCOME ON MORTGAGE-BACKED SECURITIES FOR Dec-92
# OF DAYS BOOK INCOME
HELD IN EARNED
MATURITY BASE DURING
CUSIP NO. ISSUER PAR COUPON DATE PERIOD DEC-92
- --------- ------------------------ ----------- ------ ---------- ------ --------
GNMA
------------------------
<S> <S> <C> <C> <C> <C> <C>
362159VS1 GNMA POOL # 158225 445185.82 9.5 20160515 30 3,524
362164DY8 GNMA POOL # 182919 2803773.94 9 20170215 30 21,028
3621696Z2 GNMA POOL # 187288 911093.8 9.5 20161115 30 7,213
36218S2N9 GNMA POOL # 231281 880543.22 9.5 20181115 30 6,971
36219JAF6 GNMA POOL # 250306 853266.22 9.5 20181115 30 6,755
36220P4E9 GNMA POOL # 284421 557204.77 9.5 20200215 30 4,411
36220RXB9 GNMA POOL # 286074 829780.8 9.5 20200615 30 6,569
3622OUVA6 GNMA POOL # 288709 813716.99 9.5 20200515 30 6,442
36220XLW3 GNMA POOL # 291141 835959.38 9.5 20200515 30 6,618
36223Q6K8 GNMA POOL 315074 1505763.53 9 20211115 30 11,293
36224DRX5 GNMA POOL 325502 930563.35 9.5 20220315 30 7,367
36224FWN6 GNMA POOL 327453 2819317.71 8.5 20220815 30 19,970
0 0
0 0
-----------
SUBTOTAL FOR GNMA MORTGAGE-BACKED SECURITIES............................... 108,162
-----------
FHLMC
---------------------------
31292GEZ5 FED HM LN PC C00152 1953623.57 8 20220501 30 13,024
313401XQ9 FED HM LN PC # 170220 959532.93 8 20170401 30 6,397
313448JP8 FED HM LN PC # 298370 804998.86 8 20170801 30 5,367
3139595K0 FED HM LN PC D23550 1017000.92 8 20220901 30 6,780
313959UM8 FED HM LN PC D23288 891600.43 8 20220901 30 5,944
313960B62 FED HM LN PC D23661 1013453.88 8 20220901 30 6,756
313960EN2 FED HM LN PC D23741 1011960.1 8 20220801 30 6,746
------------
SUBTOTAL FOR FHLMC SECURITIES.............................................. 51,014
------------
SUBTOTAL OF BOOK INCOME FROM GNMA & FHLMC SECURITIES FOR Dec-92 159,177
------------
31362SZR9 FNMA POOL 707752 4432390.84 9 20011201 8 8,865
31362TZ55 FNMA POOL 070964 2021020.32 9 20061101 8 4,042
------------
SUBTOTAL FOR FNMA MORTGAGE-BACKED SECURITIES............................... 12,907
------------
</TABLE>
<TABLE>
<CAPTION>
# OF DAYS
HELD IN
DISCOUNT BASE
CMO FACTOR PERIOD AMORTIZATION
------------------------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
194196KD2 COLLATERALIZED MTG SECS CORP 500000 9.25 20200720 30 3,854 2.87 30 86
194196KD2 COLLATERALIZED MTG SECS CORP 500000 9.25 20200720 30 3,854 2.73 30 82
312906SR2 FEDERAL HOME LN MTG CORP 1000000 8 20170915 30 6,667 13.93 30 418
312907Z76 FEDERAL HOME LN MTG CORP 3000000 7 20150215 8 4,667 17.18 8 137
31358E6Y3 FEDERAL NATL MTG ASSN 1000000 8.95 20190925 30 7,458 1.57 30 47
31358F5B1 FEDERAL NATL MTG ASSN GTD 1000000 8.25 20171025 30 6,875 9.17 30 275
31358NUH3 FEDERAL NATL MTG ASSN 3000000 7.5 20110625 24 15,000 (111.80) 24 (2,683)
31358NUH3 FEDERAL NATL MTG ASSN 3000000 7.5 20110625 6 3,750 (114.64) 6 (688)
313602E59 FEDERAL NATL MTG ASSN 3382000 8.75 20140225 30 24,660 (143.36) 30 (4,301)
55291DAC7 ML TR XXXVI 1000000 9.55 20150801 30 7,958 (33.00) 30 (990)
902617AF6 UBS MTG TR 1500000 9 20201018 30 11,250 (33.27) 30 (998)
---------- -----------
SUBTOTAL FOR CMO SECURITIES................................................... 95,994 (8,614)
---------- -----------
78462JAB1 SPNB HOME EQUITY LN
ASSET BKD 1900096.9 7.85 19980515 30 12,430
----------
12,430
----------
TOTAL BOOK INCOME AND AMORTIZATION FROM MORTGAGE-BACKED SECURITIES 271,893
---------
---------
MONTHLY CHANGE IN BALANCE FOR INTEREST INCOME FROM MORTGAGE-BACKED
SECURITIES
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
CHANGE IN GENERAL LEDGER ACCOUNT NUMBER 932400
BALANCE AS OF 12/31/92 1,057,694
BALANCE AS OF 11/30/92 898,517
CLOSING ENTRY
------------
CALCULATED CHANGE 159,177
TOTAL FROM ABOVE (159,177)
------------
DIFFERENCE 0
------------
------------
</TABLE>
<PAGE>
SCHEDULE 3
LBVIP - INCOME DECEMBER 1992
- ----------------------------------------------------------------------------
DAILY CUMULATIVE
O/S O/S
DATE DAY SHARES SHARES
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
DEC 1 TUE 23,791,835 23,791,835
2 WED 23,890,426 47,682,261
3 THU 23,946,474 71,628,735
4 FRI 23,966,147 95,594,882
5 SAT 24,033,058 119,627,941
6 SUN 24,033,058 143,660,999
7 MON 24,033,058 167,694,058
8 TUE 24,071,028 191,765,086
9 WED 24,195,008 215,960,094
10 THU 24,246,912 240,207,006
11 FRI 24,333,747 264,540,753
12 SAT 24,437,377 288,978,130
13 SUN 24,437,377 313,415,507
14 MON 24,437,377 337,852,884
15 TUE 24,538,069 362,390,954
16 WED 24,628,588 387,019,542
17 THU 24,714,567 411,734 109
18 FRI 24,811,105 436,545,214
19 SAT 24,860,365 461,405,579
20 SUN 24,860,365 486,265,944
21 MON 24,860,365 511,126,309
22 TUE 24,887,250 536,013,559
23 WED 24,992,110 561,005,669
24 THU 25,099,137 586,104,806
25 FRI 25,099,137 611,203,943
26 SAT 25,099,137 636,303,081
27 SUN 25,099,137 661,402,218
28 MON 25,099,137 686,501,355
29 TUE 25,141,245 711,642,600
30 WED 25,233,808 736,876,408
DEC 31 THU 25,801,109 762,677,517
AVERAGE OUTSTANDING 24,602,501
VARIABLE ANNUITY-INCOME (DECEMBER 1992)
---------------------------------------------
DAILY CUMULATIVE
OUTSTANDING OUTSTANDING
DATE DAY SHARES SHARES
- ------------------ ------- ----------------- -----------------------
- ------------------ ------- ----------------- -----------------------
DECEMBER 1 TUE 15,233,626.998735 15,233,626.998735
2 WED 15,266,671.580947 30,500,298.579682
3 THU 15,276,576.033121 45,776,874.612803
4 FRI 15,311,253.035927 61,088,127.648730
5 SAT 15,332,703.006322 76,420,830.655052
6 SUN 15,332,703.006322 91,753,533.661374
7 MON 15,332,703.006322 107,086,236.667696
8 TUE 15,410,185.460502 122,496,422.128198
9 WED 15,440,197.989256 137,936,620.117454
10 THU 15,492,110.961696 153,428,731.079150
11 FRI 15,550,100.734051 168,978,831.813201
12 SAT 15,612,125.443664 184,590,957.256865
13 SUN 15,612,125.443664 200,203,082.700529
14 MON 15,612,125.443664 215,815,208.144193
15 TUE 15,667,335.715855 231,482,543,860048
16 WED 15,715,988.821853 247,198,532.681901
17 THU 15,775,110.320462 262,973,643.002363
18 FRI 15,800,487.833003 278,774,130.835366
19 SAT 15,815,085.234278 294,589,216.069644
20 SUN 15,815,085.234278 310,404,301.303922
21 MON 15,815,085.234278 326,219,386.538200
22 TUE 15,879,423.557026 342,098,810.095226
23 WED 15,932,354.570556 358,031,164.665782
24 THU 15,973,518.799951 374,004,683.465733
25 FRI 15,973,518.799951 389,978,202.265684
26 SAT 15,973,518.799951 405,951,721.065635
27 SUN 15,973,518.799951 421,925,239.865586
28 MON 15,973,518.799951 437,898,758.665537
29 TUE 16,025,330.408727 453,924,089.074264
30 WED 16,097,222.188901 470,021,311.263165
31 THU 16,151,472.679198 486,172,783.942363
AVERAGE OUTSTANDING: 15,682,993.030399
M & E Charges: 224,408.15
Unit Values: 15.434223
Prepared by: Jill Eriksen - Controllers
Date Prepared: 01/04/93
<PAGE>
LBVIP SERIES FUND, INC. - INCOME PORTFOLIO STANDARD YIELD CALCULATION
<TABLE>
INPUT AREA - PORTFOLIO HOLDINGS
=======================================================================================================================
AS OF 11/30/92 (ADJUSTED FOR UNSETTLED TRADES)
===================================================================
1ST
MATURITY PMT STEP VALUATION ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- ----------------- -------- ------ ------- -------- ----- ------ -------- -------- ------ -------- -------
A B C D E F G H I J K L M N
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 002034AB2 ARA GROUP INC 3,500,000 12.000 110.375 04/15/2000 11/30/92 54,030 04/15/93 04/15/95 105.000
1 02378FAB2 AMERICAN AIRLINES 2,000,000 9.070 95.790 03/11/2016 11/30/92 34,768 03/11/93
2 025818BA2 AMERICAN EXPRESS
CR 1,000,000 9.450 108.207 02/15/96 11/30/92 27,825 02/15/93
3 029717AD7 AMERICAN STD INC 3,000,000 12.875 102.750 06/30/2000 11/30/92 162,010 12/30/92 06/30/93 104.830
4 030177BW8 AMERICAN TEL &
TELEG CO 2,500,000 8.125 99.375 07/15/2024 11/30/92 76,736 01/15/93
5 031678AD7 AMOCO CDA PETE CO 4,500,000 7.950 95.609 10/01/2022 11/30/92 59,625 04/01/93
6 046003DV8 ASSOCIATES CORP
NORTH AMER 1,000,000 7.500 103.850 10/15/96 11/30/92 9,583 04/15/93
7 053015AC7 AUTOMATIC DATA
PROCESSING INC 1,500,000 39.000 02/20/2012 11/30/92 02/20/93
8 066050BW4 BANKAMERICA CORP 2,500,000 7.500 94.793 10/15/2002 11/30/92 28,646 04/15/93
9 067900AD2 BARCLAYS NORTH
AMERN CAP CORP 2,000,000 9.750 108.081 05/15/2021 11/30/92 8,667 05/15/93
10 083739AD4 BERGEN BRUNSWIG
CORP 3,000,000 44.875 11/16/2004 11/30/92 05/16/93 11/16/94 51.486
11 110601BY6 BRITISH COLUMBIA
HYDRO & PWR 1,900,000 15.500 133.342 07/15/2011 11/30/92 111,256 01/15/93 07/15/96 106.640
12 125509AD1 CIGNA CORP 2,000,000 8.750 104.091 10/01/2001 11/30/92 29,167 04/01/93
13 163717FH9 CHEMICAL BK NEW
YORK CO NY 1,000,000 7.250 94.055 09/15/2002 11/30/92 15,306 03/15/93
14 163722AM3 CHEMICAL BKG CORP 2,500,000 8.125 99.765 06/15/2002 11/30/92 93,663 12/15/92
15 191219AT1 COCA COLA
ENTERPRISE 1,500,000 7.000 98.648 11/15/99 11/30/92 3,500 05/15/93
16 196879AA8 COLTEC INDUSTRIES 2,500,000 9.750 101.500 04/01/2000 11/30/92 40,625 04/01/93
17 202795DL1 COMMONWEALTH
EDISON CO 2,000,000 9.625 106.968 07/01/2019 11/30/92 80,208 01/01/93 01/01/93 106.740
18 205887AC6 CONAGRA INC 1,500,000 9.750 111.644 03/01/2021 11/30/92 36,563 03/01/93
19 239753BM7 DAYTON HUDSON 1,500,000 8.800 102.888 05/15/2022 11/30/92 5,867 05/15/93
20 244217AN5 DEERE JOHN CAP
CORP 2,000,000 9.625 110.499 11/01/98 11/30/92 16,042 05/01/93
21 302154AB5 EXPORT IMPORT BK
KOREA 2,500,000 9.000 108.156 05/01/98 11/30/92 18,750 05/01/93
22 315290AE6 FERRELLGAS INC 2,500,000 11.625 104.000 12/15/2003 11/30/92 134,010 12/15/92
23 339018AF0 FLEET NORSTAR
FINL GROUP INC 2,000,000 8.625 101.493 01/15/2007 11/30/92 65,167 01/15/93
24 347460AD9 FORT HOWARD CORP 3,500,000 12.625 104.500 11/01/2000 11/30/92 36,823 05/01/93 11/01/93 105.000
25 361582AC3 GEICO CORP 3,000,000 9.150 103.406 09/15/2021 11/30/92 57,950 03/15/93
26 362320AT0 GTE CORP 3,000,000 8.750 103.435 11/01/2021 11/30/92 21,875 05/01/93
27 369622CH6 GENERAL ELED CR
CORP 3,000,000 8.850 110.119 04/01/2005 11/30/92 44,250 04/01/93
28 370424FW8 GENERAL MTRS
ACCEP CORP 2,000,000 8.750 102.617 07/15/2005 11/30/92 66,111 01/15/93
29 370424GN7 GENERAL MOTOR
ACCEP CORP 3,000,000 4.625 97.450 10/01/99 11/30/92 23,125 04/01/93
30 373298BG2 GEORGIA PAC CORP 4,000,000 9.500 101.386 05/15/2022 11/30/92 16,889 05/15/93
31 417478AA2 HARVARD UNIV 2,000,000 8.125 104.530 04/15/2007 11/30/92 20,764 04/15/93
32 42221HAD9 HEALTHTRUST
INC-THE HOSPITAL 1,000,000 11.250 109.000 12/01/2002 11/30/92 56,250 12/01/92 06/01/93 107.330
33 42221HAF4 HEALTHTRUST INC 1,500,000 10.750 105.750 05/01/2002 11/30/92 13,438 15/01/93
34 500630AD0 KOREAN DEV BANK 1,000,000 7.900 99.375 02/01/2002 11/30/92 26,333 02/01/93
35 501044AZ4 KROGER CO 3,000,000 9.875 99.000 08/01/2002 11/30/92 91,344 02/01/93
36 55262NAA4 MBNA MASTER CR
CARD TR 1,500,000 7.750 103.777 11/01/98 11/30/92 9,688 05/01/93
37 552673AK1 MCI COMMUNICATIONS
CORP 3,000,000 46.625 12/11/2004 11/30/92 12/11/92 12/11/94 52.747
38 593048AQ4 MEXICO UNITED
MEXICAN STS 2,000,000 8.500 94.912 09/15/2002 11/30/92 35,889 03/15/93
39 597520AA3 MIDLAND FUNDING
CORP 2,500,000 11.750 101.281 07/23/2005 11/30/92 104,444 01/23/93
40 669827DM6 NOVA SCOTIA PROV
CDA 2,000,000 8.750 100.294 04/01/2022 11/30/92 29,167 04/01/93
41 674599BD6 OCCIDENTAL PETE
CORP 3,000,000 9.625 106.096 07/01/99 11/30/92 120,313 01/01/93 07/01/96 100.000
42 683234FU7 ONTARIO PROV CDA 2,900,000 8.400 101.556 01/15/2007 11/30/92 92,027 01/15/93 01/15/93 103.020
43 690768AW6 OWENS ILL 2,000,000 10.000 101.500 08/01/2002 11/30/92 66,667 02/01/93
44 693657AD0 PVNGS FDG INC 1,000,000 11.375 107.958 12/30/2012 11/30/92 47,712 12/30/92 12/30/93 106.830
45 708160BA3 PENNEY J C INC 3,000,000 9.750 110.315 06/15/2021 11/30/92 134,875 12/15/92
46 74046RAL5 PREMIER AUTO TR 8,000,000 4.550 98.405 03/15/98 11/30/92 74,822 03/15/93
47 750755AA8 RAIL CAR TRUST 2,972,580 7.750 101.419 06/01/2004 11/30/92 57,594 12/01/92
48 775103AA2 ROGERS CANTEL
MOBILE INC 3,000,000 10.750 104.000 11/01/2001 11/30/92 26,875 05/01/93 11/01/96 103.000
49 792860AB4 ST PAUL COS INC 2,500,000 9.375 109.994 06/15/97 11/30/92 108,073 12/15/92
50 809877AQ6 SCOTT PAPER CO 2,000,000 10.000 116.648 03/15/2005 11/30/92 42,222 03/15/93
51 81232BAA3 SEARS CREDIT
ACCT MASTER TRI 3,000,000 5.900 97.410 11/15/98 11/30/92 7,867 05/15/93
52 814823BB5 SECURITY PACIFIC
CORP 3,000,000 9.750 110.032 05/15/99 11/30/92 13,000 05/15/93
53 868536AA1 SUPER VALUE STORE 3,000,000 5.875 99.529 11/15/95 11/30/92 7,833 05/15/93
54 868536AC7 SUPER VALUE STORE 2,000,000 8.875 101.632 11/15/2022 11/30/92 7,889 05/15/93
55 880357AA6 TENNECO 4,000,000 8.375 102.637 02/01/97 11/30/92 111,667 02/01/93
56 880357AF5 TENNECO CREDIT 1,000,000 9.625 105.793 08/15/2001 11/30/92 28,340 02/15/93
57 882850BL3 TEXAS UTILITIES
ELECTRIC CO 3,000,000 7.125 100.265 06/01/97 11/30/92 106,875 12/01/93
58 909214AW8 UNISYS CORP 2,000,000 10.625 98.000 10/01/99 11/30/92 35,417 04/01/93
59 909283AB9 UNITED AIR LINES 1,200,000 10.020 102.250 03/22/2014 11/30/92 23,046 03/22/93
60 909284AB7 UNITED AIR LINES 2,000,000 2.529 95.250 4/7/2016 4/7/93 9.350 11/30/92 27,671 04/07/93
61 912803AE3 UNITED STATES
TREAS BD 5,000,000 16.629 11/15/2015 11/30/92 05/15/93
62 912810DU9 UNITED STATES
TREAS BD 2,500,000 9.375 117.593 02/15/2006 11/30/92 68,784 02/15/93
63 912810EL8 UNITED STATES
TREAS BND 2,000,000 8.000 103.968 11/15/2021 11/30/92 7,072 05/15/93
64 912810EM6 UNITED STATES
TREAS BND 3,500,000 7.250 95.624 08/15/2022 11/30/92 74,470 02/15/93
65 912810EN4 UNITED STATES
TREAS BND 4,500,000 7.625 100.468 11/15/2022 11/30/92 15,166 05/15/93
66 912827B50 UNITED STATES
TREAS NTS 2,000,000 8.250 108.187 07/15/98 11/30/92 62,323 01/15/93
67 912827G22 UNITED STATES
TREAS NTS 5,000,000 4.250 99.281 07/31/94 11/30/92 71,026 01/31/93
68 912833CY4 UNITED STATES
TREAS SEC 6,000,000 25.021 08/15/2010 11/30/92 02/15/93
69 927804BS2 VIRGINIA ELEC
& PWR CO 3,000,000 9.375 111.367 06/01/98 11/30/92 140,625 12/01/92
------------- -----------
180,972,580 3,346,601
============= ===========
CONTINUED.. PORTFOLIO HOLDINGS - OUTPUT
===================================================================================================================
AS OF 11/30/92 (ADJUSTED FOR UNSETTLED TRADES).....CONTINUED
============================================================
DAILY MARKET VALUE GROSS
YIELD AND # OF DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- --------------------------------------- --------- ---------- ------------- --------- ----- ----------
A B C O P Q R S T U
<S><C> <C> <C> <C> <C> <C> <C> <C>
0 002034AB2 ARA GROUP INC 8.9483% 0.024856% 3,917,155.05 973.66 30 29,209.80
1 02378FAB2 AMERICAN AIRLINES 9.5451% 0.026514% 1,950,568.33 517.18 30 15,515.40
2 025818BA2 AMERICAN EXPRESS CR 6.5514% 0.018198% 1,109,899.00 201.98 30 6,059.40
3 029717AD7 AMERICAN STD INC 15.7720% 0.043811% 3,244,510.43 1,421.46 30 42,643.80
4 030177BW8 AMERICAN TEL & TELEG CO 8.1758% 0.022710% 2,561,111.11 581.64 30 17,449.20
5 031678AD7 AMOCO CDA PETE CO 8.3463% 0.023184% 4,362,007.50 1,011.29 30 30,338.70
6 046003DV8 ASSOCIATES CORP NORTH AMER 6.3513% 0.017642% 1,048,086.33 184.91 30 5,547.30
7 053015AC7 AUTOMATIC DATA PROCESSING INC 4.9586% 0.013774% 585,000.00 80.58 30 2,417.40
8 066050BW4 BANKAMERICA CORP 8.2454% 0.022904% 2,398,475.83 549.35 30 16,480.50
9 067900AD2 BARCLAYS NORTH AMERN CAP CORP 8.9568% 0.024880% 2,170,286.66 539.97 30 16,199.10
10 083739AD4 BERGEN BRUNSWIG CORP 7.1296% 0.019805% 1,346,250.00 266.62 30 7,998.60
11 110601BY6 BRITISH COLUMBIA HYDRO & PWR 6.6275% 0.018410% 2,644,749.75 486.89 30 14,606.70
12 125509AD1 CIGNA CORP 8.0834% 0.022454% 2,110,984.66 474.00 30 14,220.00
13 163717FH9 CHEMICAL BK NEW YORK CO NY 8.1340% 0.022594% 955,850.55 215.97 30 6,479.10
14 163722AM3 CHEMICAL BKG CORP 8.1556% 0.022654% 2,587,780.70 586.25 30 17,587.50
15 191219AT1 COCA COLA ENTERPRISE 7.2600% 0.020167% 1,483,215.50 299.12 30 8,973.60
16 196879AAB COLTEC INDUSTRIES 9.4474% 0.026243% 2,578,125.00 676.57 30 20,297.10
17 202795DL1 COMMONWEALTH EDISON CO 6.0094% 0.016693% 2,219,564.33 370.51 30 11,115.30
18 205887AC6 CONAGRA INC 8.6355% 0.023987% 1,711,221.00 410.48 30 12,314.40
19 239753BM7 DAYTON HUDSON 8.5272% 0.023687% 1,549,186.67 366.95 30 11,008.50
20 244217AN5 DEERE JOHN CAP CORP 7.3928% 0.020535% 2,226,021.66 457.12 30 13,713.60
21 302154AB5 EXPORT IMPORT BK KOREA 7.1483% 0.019856% 2,722,645.00 540.62 30 16,218.60
22 315290AE6 FERRELLGAS INC 10.9821% 0.030506% 2,734,010.42 834.03 30 25,020.90
23 339018AF0 FLEET NORSTAR FINL GROUP INC 8.4351% 0.023431% 2,095,030.67 490.88 30 14,726.40
24 347460AD9 FORT HOWARD CORP 12.4903% 0.034695% 3,694,322.93 1,281.76 30 38,452.80
25 361582AC3 GEICO CORP 8.8154% 0.024487% 3,160,121.00 773.83 30 23,214.90
26 362320AT0 GTE CORP 8.4267% 0.023408% 3,124,931.01 731.47 30 21,944.10
27 369622CH6 GENERAL ELED CR CORP 7.5664% 0.021018% 3,347,805.00 703.63 30 21,108.90
28 370424FW8 GENERAL MTRS ACCEP CORP 8.4022% 0.023339% 2,118,453.11 494.43 30 14,832.90
29 370424GN7 GENERAL MOTOR ACCEP CORP 5.0665% 0.014073% 2,946,625.00 414.69 30 12,440.70
30 373298BG2 GEORGIA PAC CORP 9.3566% 0.025991% 4,072,340.89 1,058.42 30 31,752.60
31 417478AA2 HARVARD UNIV 7.5960% 0.021100% 2,111,353.89 445.49 30 13,364.70
32 42221HAD9 HEALTHTRUST INC-THE HOSPITAL 7.2132% 0.020037% 1,146,250.00 229.67 30 6,890.10
33 42221HAF4 HEALTHTRUST INC 9.7911% 0.027198% 1,599,687.50 435.08 30 13,052.40
34 500630AD0 KOREAN DEV BANK 7.9886% 0.022190% 1,020,083.33 226.36 30 6,790.80
35 501044AZ4 KROGER CO 10.0662% 0.027962% 3,061,343.75 856.00 30 25,680.00
36 55262NAA4 MBNA MASTER CR CARD TR 6.9527% 0.019313% 1,566,341.00 302.51 30 9,075.30
37 552673AK1 MCI COMMUNICATIONS CORP 6.1675% 0.017132% 1,398,750.00 239.63 30 7,188.90
38 593048AQ4 MEXICO UNITED MEXICAN STS 9.2913% 0.025809% 1,934,134.88 499.18 30 14,975.40
39 597520AA3 MIDLAND FUNDING CORP 11.5396% 0.032054% 2,636,459.45 845.10 30 25,353.00
40 669827DM6 NOVA SCOTIA PROV CDA 8.7159% 0.024211% 2,035,048.66 492.70 30 14,781.00
41 674599BD6 OCCIDENTAL PETE CORP 7.6335% 0.021204% 3,303,177.50 700.41 30 21,012.30
42 683234FU7 ONTARIO PROV CDA 19.0248% 0.052847% 3,037,153.57 1,605.03 30 48,150.90
43 690768AW6 OWENS ILL 9.7438% 0.027066% 2,096,666.67 567.49 30 17,024.70
44 693657AD0 PVNGS FDG INC 9.5360% 0.026489% 1,127,294.81 298.61 30 8,958.30
45 708160BA3 PENNEY J C INC 8.7569% 0.024325% 3,444,328.00 837.82 30 25,134.60
46 74046RAL5 PREMIER AUTO TR 4.8956% 0.013599% 7,947,214.26 1,080.73 30 32,421.90
47 750755AA8 RAIL CAR TRUST 7.8162% 0.021712% 3,072,345.73 667.06 30 20,011.80
48 775103AA2 ROGERS CANTEL MOBILE INC 10.1109% 0.028086% 3,146,875.01 883.83 30 26,514.90
49 792860AB4 ST PAUL COS INC 6.7725% 0.018812% 2,857,917.91 537.64 30 16,129.20
50 809877AQ6 SCOTT PAPER CO 7.8543% 0.021818% 2,375,188.22 518.21 30 15,546.30
51 81232BAA3 SEARS CREDIT ACCT MASTER TRI 6.4252% 0.017848% 2,930,166.67 522.97 30 15,689.10
52 814823BB5 SECURITY PACIFIC CORP 7.7390% 0.021497% 3,313,960.00 712.41 30 21,372.30
53 868536AA1 SUPER VALUE STORE 6.0426% 0.016785% 2,993,703.33 502.50 30 15,075.00
54 868536AC7 SUPER VALUE STORE 8.7171% 0.024214% 2,040,536.89 494.10 30 14,823.00
55 880357AA6 TENNECO 7.6089% 0.021136% 4,217,126.66 891.32 30 26,739.60
56 880357AF5 TENNECO CREDIT 8.6520% 0.024033% 1,086,265.28 261.06 30 7,831.80
57 882850BL3 TEXAS UTILITIES ELECTRIC CO 7.0316% 0.019532% 3,114,825.00 608.40 30 18,252.00
58 909214AW8 UNISYS CORP 11.0296% 0.030638% 1,995,416.66 611.35 30 18,340.50
59 909283AB9 UNITED AIR LINES 9.7579% 0.027105% 1,250,046.00 338.83 30 10,164.90
60 909284AB7 UNITED AIR LINES 9.8681% 0.027411% 1,932,671.06 529.77 30 15,893.10
61 912803AE3 UNITED STATES TREAS BD 7.9688% 0.022136% 831,425.00 184.04 30 5,521.20
62 912810DU9 UNITED STATES TREAS BDS 7.2733% 0.020204% 3,008,606.46 607.85 30 18,235.50
63 912810EL8 UNITED STATES TREAS BND 7.6546% 0.021263% 2,086,429.82 443.63 30 13,308.90
64 912810EM6 UNITED STATES TREAS BND 7.6201% 0.021167% 3,421,306.62 724.18 30 21,725.40
65 912810EN4 UNITED STATES TREAS BND 7.5827% 0.021063% 4,536,221.25 955.47 30 28,664.10
66 912827B50 UNITED STATES TREAS NTS 6.4802% 0.018001% 2,226,061.38 400.71 30 12,021.30
67 912827G22 UNITED STATES TREAS NTS 4.6857% 0.013016% 5,035,070.81 655.35 30 19,660.50
68 912833CY4 UNITED STATES TREAS SEC 7.9777% 0.022160% 1,501,266.00 332.68 30 9,980.40
69 927804BS2 VIRGINIA ELEC & PWR CO 6.8546% 0.019040% 3,481,638.00 662.92 30 19,887.60
--------------
1,221,130.50
--------------
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
</TABLE>
<TABLE>
<CAPTION>
PURCHASES SETTLING IN DECEMBER
======================================================================
PURCHASE MATURITY 1ST PMT STEP SETTLEMENT ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- ------------------- ---------- ------ ------- ---------- ---- ------ ---------- ------- ------ ---- -----
A B C D E F G H I J K L M N
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
115 013051BA4 ALBERTA PROV CDA 3,000,000 9.250 111.215 04/01/2000 12/03/92 47,792 04/01/93
116 912810DU9 UNITED STATES TREAS 1,000,000 9.375 117.938 02/15/2006 12/07/92 29,042 02/15/93
117 23329VAA5 DQU FDG CORP 2,000,000 7.230 100.000 12/01/99 12/08/92 06/01/93
118 239753BP0 DAYTON HUDSON CORP 2,500,000 8.500 99.000 12/01/2022 12/09/92 4,722 06/01/93
119 912827G55 UNITED STATES TREAS 1,000,000 6.375 97.422 08/15/2002 12/10/92 20,268 02/15/93
120 013051BA4 ALBERTA PROV CDA 2,000,000 9.250 111.757 04/01/2000 12/15/92 38,028 04/01/93
121 170377AA3 CHOICE CREDIT CARD M 5,000,000 3.775 99.924 10/15/96 12/15/92 04/15/93
122 74155QAA8 PRIME CREDIT CARD MA 3,000,000 7.050 99.844 12/15/97 12/15/92 06/15/93
123 690768AW6 OWENS ILL 500,000 10.000 100.875 08/01/2002 12/17/92 18,889 02/01/93
124 912827YN6 UNITED STATES TREAS 4,000,000 8.500 110.859 02/15/2000 12/17/92 114,565 02/15/93
125 912810EN4 UNITED STATES TREAS 2,500,000 7.625 103.125 11/15/2022 12/28/92 22,643 05/15/93
126 690768AW6 OWENS ILL 500,000 10.000 101.000 08/01/2002 12/29/92 20,556 02/01/93
127 912810EN4 UNITED STATES TREAS 1,500,000 7.625 102.766 11/15/2022 12/29/92 13,902 05/15/93
</TABLE>
<TABLE>
<CAPTION>
CONTINUED..PURCHASES SETTLING IN DECEMBER
==========================================================
DAILY MARKET VALUE NO. OF GROSS
YIELD AND DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- ---------------------- --------- --------- ------------- ------- ------- ----------
A B C O P Q R S T U
<S> <C> <C> <C> <C> <C> <C> <C> <C>
115 013051BA4 ALBERTA PROV CDA 7.2444% 0.020123% 3,384,241.67 681.02 28 19,068.56
116 912810DU9 UNITED STATES TREAS 7.2383% 0.020106% 1,208,417.12 242.97 24 5,831.28
117 23329VAA5 DQU FDG CORP 7.2551% 0.020153% 2,000,000.00 403.06 23 9,270.38
118 239753BP0 DAYTON HUDSON CORP 8.5927% 0.023869% 2,479,722.22 591.88 22 13,021.36
119 912827G55 UNITED STATES TREAS 6.7397% 0.018721% 994,486.34 186.18 21 3,909.78
120 013051BA4 ALBERTA PROV CDA 7.1472% 0.019853% 2,273,167.78 451.30 16 7,220.80
121 170377AA3 CHOICE CREDIT CARD M 3.9727% 0.011035% 4,996,205.00 551.35 16 8,821.60
122 74155QAA8 PRIME CREDIT CARD MA 7.0877% 0.019688% 2,995,311.00 589.72 16 9,435.52
123 690768AW6 OWENS ILL 9.8499% 0.027361% 523,263.89 143.17 14 2,004.38
124 912827YN6 UNITED STATES TREAS 6.5724% 0.018257% 4,548,937.22 830.49 14 11,626.86
125 912810EN4 UNITED STATES TREAS 7.3633% 0.020454% 2,600,768.30 531.95 3 1,595.85
126 690768AW6 OWENS ILL 9.8308% 0.027308% 525,555.56 143.52 2 287.04
127 912810EN4 UNITED STATES TREAS 7.3925% 0.020535% 1,555,385.93 319.39 2 638.78
------------
92,732.19
------------
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
</TABLE>
<TABLE>
<CAPTION>
SALES SETTLING IN DECEMBER
==================================================
SALE MATURITY 1ST PMT STEP SETTLEMENT ACCRUED INT PAY CALL CALL
ROW CUSIP NO. ISSUER PAR COUPON PRICE DATE DATE COUPON DATE INTEREST DATE DATE PRICE
- --- --------- -------------------- --------- ------ ------- ---------- ---- ------ -------- -------- -------- ---- -----
A B C D E F G H I J K L M N
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
177 882850BL3 TEXAS UTILITIES ELEC 3,000,000 7.125 100.265 06/01/97 12/02/92 106,875 12/01/93
178 814823BB5 SECURITY PAC CORP 3,000,000 9.750 110.032 05/15/99 12/03/92 13,000 05/15/93
179 191219AT1 COCA COLA ENTERPRISE 1,500,000 7.000 98.648 11/15/99 12/09/92 3,500 05/15/93
180 912810DU9 UNITED STATES TREAS 1,000,000 9.375 117.593 02/15/2006 12/14/92 27,514 02/15/93
181 912827G22 UNITED STATES TREAS 5,000,000 4.250 99.281 07/31/94 12/14/92 71,026 01/31/93
182 244217AN5 DEERE JOHN CAP CORP 2,000,000 9.625 110.499 11/01/98 12/15/92 16,042 05/01/93
183 912827B50 UNITED STATES TREAS 2,000,000 8.250 108.187 07/15/98 12/17/92 62,323 01/15/93
184 912827G55 UNITED STATES TREAS 1,000,000 6.375 97.422 08/15/2002 12/17/92 20,268 02/15/93
185 302154AB5 EXPORT IMPORT BK KOR 500,000 9.000 108.156 05/01/98 12/18/92 3,750 05/01/93
</TABLE>
<TABLE>
<CAPTION>
CONTINUED..SALES SETTLING IN DECEMBER
===========================================================
DAILY MARKET VALUE NO. OF GROSS
YIELD AND DAYS INCOME
(360 DAY ACCRUED DAILY IN BASE FOR BASE
ROW CUSIP NO. ISSUER YIELD YEAR) INCOME INCOME PERIOD PERIOD
- --- --------- ------------------------ ------- --------- ------------- -------- ------- -------------
A B C O P Q R S T U
<S> <C> <C> <C> <C> <C> <C> <C> <C>
177 882850BL3 TEXAS UTILITIES ELEC 7.0316% 0.019532% 3,114,825.00 608.40 -29 (17,643.60)
178 814823BB5 SECURITY PAC CORP 7.7390% 0.021497% 3,313,960.00 712.41 -28 (19,947.48)
179 191219AT1 COCA COLA ENTERPRISE 7.2600% 0.020167% 1,483,215.50 299.12 -22 (6,580.64)
180 912810DU9 UNITED STATES TREAS 7.2733% 0.020204% 1,203,442.58 243.14 -17 (4,133.38)
181 912827G22 UNITED STATES TREAS 4.6857% 0.013016% 5,035,070.81 655.35 -17 (11,140.95)
182 244217AN5 DEERE JOHN CAP CORP 7.3928% 0.020535% 2,226,021.66 457.12 -16 (7,313.92)
183 912827B50 UNITED STATES TREAS 6.4802% 0.018001% 2,226,061.38 400.71 -14 (5,609.94)
184 912827G55 UNITED STATES TREAS 6.7397% 0.018721% 994,486.34 186.18 -14 (2,606.52)
185 302154AB5 EXPORT IMPORT BK KOR 7.1483% 0.019856% 544,529.00 108.12 -13 (1,405.56)
---------------
(76,381.99)
---------------
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
---------------
Total Gross Income Earned from Corporate Obligations
Computed on a Yield to Maturity or Yield to Call Basis..... 1,237,480.70
============
</TABLE>
<PAGE>
AVERAGE ANNUAL TOTAL RETURN CALCULATIONS
The Prospectus contains or will contain information with respect to
performance data relating to the Contracts. Such performance data includes
average annual total return quotations for the 1, 5 and 10-year periods
computed by finding the average annual compounded rates of return over the
1, 5 and 10-year periods that would equate the initial amount invested to
the ending redeemable value, by equating the ending redeemable value to the
product of a hypothetical initial payment of $1,000, and one plus the
average annual total return raised to a power equal to the applicable number
of years. If the assumed investment was made less than 10 years from the
date of the quotation, the total return from the date of such investment
will be given.
Such performance data assumes that any applicable charges have been
deducted from the initial $1,000 payment and includes all recurring fees
that are charged to all Contract Owners. For fees that vary with the size
of the Contract, a Contract size equal to the mean (or median) contract size
of a variable annuity contract issued by LBVIP has been assumed. If
recurring fees charged to Contract Owners are paid other than by redemption
of Accumulation Units, such fees will be appropriately reflected.
The following examples illustrates the average annual total return
for the variable annuity contract issued by Lutheran Brotherhood Variable
Insurance Products Company invested in the Fund from the date the Fund was
first available for investment through
December 31, 1992:
<PAGE>
<TABLE>
<CAPTION>
LBVIP VARIABLE ANNUITY ACCOUNT I
TOTAL RETURN CALCULATION
This is a hypothetical illustration of an investment
of $1000.00 made in the growth, high yield, and income
subaccounts on 8--Mar--88 and the money market subaccount
on 18--Feb--88, all redeemed on 31--Dec--92 with a 2%
deferred sales charge.
MONEY
GROWTH HIGH YIELD INCOME MARKET
----------- ----------- ----------- -------------
INITIAL $1,000 INVESTMENT:
<S> <C> <C> <C> <C>
Beginning Unit Value $10.000000 $10.000000 $10.000000 $1.000000
Units Purchased 100.000000 100.000000 100.000000 1,000.000000
----------- ----------- ----------- -------------
Total Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
VALUE AT 31--DEC--92 PRIOR TO DEFERRED SALES CHARGE:
Unit Value at 31--Dec--92 $17.485596 $16.209964 $15.434223 $1.302905
Units Owned 100.000000 100.000000 100.000000 1,000.000000
---------- ------------ ----------- -------------
Value prior to deferred sales charge 1,748.56 1,621.00 1,543.42 1,302.91
Less: Deferred sales charge upon surrender (a) (31.47) (29.18) (27.78) (23.45)
----------- ----------- ----------- -------------
Ending redeemable value at 31--Dec--92 $1,717.09 $1,591.82 $1,515.64 $1,279.46
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
TOTAL RETURN FOR THE PERIOD FROM DATE OF
INITIAL INVESTMENT (b) 71.71% 59.18% 51.56% 27.95%
=========== =========== =========== =============
AVERAGE ANNUAL RETURN FOR THE PERIOD FROM DATE
OF INITIAL INVESTMENT (c) 11.81% 10.08% 8.97% 5.14%
=========== =========== =========== =============
</TABLE>
(a) The following formula is used to calculate deferred
sales charge:
Value prior to deferred sales charge x .90 x .02
-- up to 10% of the Accumulated Value may be surrendered
without a sales charge
-- deferred sales charge during the fifth contract year is 2%.
(b) The following formula is used to calculate total return:
(Ending redeemable value -- initial $1,000 investment)
- -----------------------------------------------------------
Initial $1,000 investment
(c) Average annual return is the sum of the total return calculated
above plus one; such sum is raised to the power of 1/n where n is
expressed as 4 years and 10 months (4 years and 11 months for
money market); the result is reduced by one and is expressed in
terms of a percentage.
Prepared by: Jill Eriksen -- Controllers
Date: 04--Jan--93
<TABLE>
<CAPTION>
LBVIP VARIABLE ANNUITY ACCOUNT I
TOTAL RETURN CALCULATION
This is a hypothetical illustration of an investment
of $1000.00 made on 31--Dec--91 and redeemed
on 31--Dec--92 with a 6% deferred sales charge.
MONEY
DESCRIPTION GROWTH HIGH YIELD INCOME MARKET
- --------------------------------------------------------------------- ----------- ----------- ----------- -------------
INITIAL $1,000 INVESTMENT:
<S> <C> <C> <C> <C>
Beginning Unit Value (31--Dec--91) $16.341071 $13.658785 $14.286364 $1.272375
Units Purchased 61.195499 73.212954 69.996817 785.931820
----------- ----------- ----------- -------------
Total Value $1,000.00 $1,000.00 $1,000.00 $1,000.00
=========== =========== =========== =============
VALUE AT 31--DEC--92 PRIOR TO DEFERRED SALES CHARGE:
Unit Value at 31--Dec--92 $17.485596 $16.209964 $15.434223 $1.302905
Units Owned 61.195499 73.212954 69.996817 785.931820
---------- ------------ ----------- -------------
Value prior to deferred sales charge 1,070.04 1,186.78 1,080.35 1,023.99
Less: Deferred sales charge upon surrender (a) (57.78) (64.09) (58.34) (55.30)
----------- ----------- ----------- -------------
Ending redeemable value at 31--Dec--92 $1,012.26 $1,122.69 $1,022.01 $968.69
=========== =========== =========== =============
TOTAL RETURN FOR THE PERIOD FROM 31--DEC--91 TO 31--DEC--92(b) 1.23% 12.27% 2.20% -3.13%
=========== =========== =========== =============
</TABLE>
(a) The following formula is used to calculate deferred
sales charge:
Value prior to deferred sales charge x .90 x .06
-- up to 10% of the Accumulated Value may be surrendered
without a sales charge
-- deferred sales charge during the first contract year is 6%.
(b) The following formula is used to calculate total return:
(Ending redeemable value -- initial $1,000 investment)
- -----------------------------------------------------------
Initial $1,000 investment
Prepared by: Jill Eriksen -- Controllers
Date: 04--Jan--93
#20747
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the LBVIP
Variable Annuity Accout I Annual Report to Shareholders dated December 31,
1997 and is qualified in its entirety by reference to such Annual Report.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 2,921,455,175
<INVESTMENTS-AT-VALUE> 3,407,607,829
<RECEIVABLES> 1,544,850
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,409,152,679
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,470,624
<TOTAL-LIABILITIES> 3,470,624
<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> 3,405,682,055
<DIVIDEND-INCOME> 136,150,086
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 34,250,511
<NET-INVESTMENT-INCOME> 101,899,575
<REALIZED-GAINS-CURRENT> 171,399,542
<APPREC-INCREASE-CURRENT> 213,736,228
<NET-CHANGE-FROM-OPS> 487,035,345
<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> 148,860,053
<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>
