BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
OFFERED BY
BANKERS SECURITY LIFE INSURANCE SOCIETY
4601 FAIRFAX DRIVE, ARLINGTON, VIRGINIA 22203
TELEPHONE: 703-875-3500
FOR TAX QUALIFIED AND NON-TAX QUALIFIED ANNUITY PLANS
This Prospectus describes individual flexible payment variable annuity
contracts (the "Contracts") issued by Bankers Security Life Insurance Society
("Bankers Security"). The Contracts provide for: (i) an Immediate Variable
Annuity, or (ii) a Deferred Variable Annuity with an Accumulation Period on a
variable or fixed basis and for payment of annuity benefits on a fixed basis, a
variable basis or a combination thereof as selected by the Contract Owner. The
Contracts may be purchased for individual retirement plans which qualify for
Federal tax benefits available under Sections 401, 403(a), 403(b), 408 or 457 of
the Internal Revenue Code ("Qualified Plans"). They may also be issued for
deferred compensation and other individual retirement plans which do not qualify
under such Code Sections ("Non-Qualified Plans"). Purchase payments, after
deductions for any applicable premium taxes, are allocated to Bankers Security
Variable Annuity Fund P ("Separate Account P") for Non-Qualified Plans and
Bankers Security Variable Annuity Fund Q ("Separate Account Q") for Qualified
Plans. The Owner of the Contract directs Bankers Security to allocate such net
purchase payments to one or more of seventeen accounts ("Sub-Accounts") that are
established within each Separate Account. The Owner may also accumulate Contract
values on a fixed basis in a Fixed Account. Each Sub-Account invests exclusively
in shares of one of the following portfolios of the mutual funds (collectively
the "Funds"). THE EIGHT OPPENHEIMER FUNDS ARE: MONEY FUND, HIGH INCOME FUND,
BOND FUND, STRATEGIC BOND FUND, CAPITAL APPRECIATION FUND, GROWTH FUND, MULTIPLE
STRATEGIES FUND AND GLOBAL SECURITIES FUND. THE TWO ALLIANCE PORTFOLIOS ARE:
GROWTH AND INCOME PORTFOLIO AND SHORT-TERM MULTI-MARKET PORTFOLIO. THE FIVE
FIDELITY PORTFOLIOS ARE: EQUITY INCOME PORTFOLIO, GROWTH PORTFOLIO, INVESTMENT
GRADE BOND PORTFOLIO, ASSET MANAGER PORTFOLIO AND THE INDEX 500 PORTFOLIO. THE
TWO NORTHSTAR FUNDS ARE: INCOME AND GROWTH FUND AND HIGH YIELD BOND FUND.
THE MINIMUM INITIAL PURCHASE PAYMENT FOR SEPARATE ACCOUNT P IS $1,000 ($100
FOR AUTOMATIC PAYMENT PLANS). SUBSEQUENT PURCHASE PAYMENTS MUST BE AT LEAST $100
UNLESS WAIVED BY BANKERS SECURITY. THE MINIMUM INITIAL PURCHASE PAYMENT FOR
SEPARATE ACCOUNT Q IS $250 ($50 FOR AUTOMATIC PAYMENT PLANS). SUBSEQUENT
PURCHASE PAYMENTS MUST BE AT LEAST $50 UNLESS WAIVED BY BANKERS SECURITY. NO
CONTRACT PAYMENTS WILL BE ACCEPTED WITH RESPECT TO AN ANNUITANT OR CONTRACT
OWNER WHO IS OLDER THAN EIGHTY YEARS OF AGE.
This Prospectus provides information a prospective investor should know
before investing and should be kept for future reference.
Additional information about the Contracts has been filed with the
Securities and Exchange Commission in a Statement of Additional Information,
dated April 30, 1996, which is incorporated herein by reference. The Statement
of Additional Information, the table of contents of which is set forth on page
35 of this Prospectus, is available without charge upon request by writing or
telephoning Bankers Security at the above address or telephone number (703)
875-3623.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS ACCOMPANIED BY THE CURRENT PROSPECTUS OF OPPENHEIMER VARIABLE
ACCOUNT FUNDS, ALLIANCE VARIABLE PRODUCTS SERIES FUNDS, FIDELITY INVESTMENTS
VARIABLE INSURANCE PRODUCTS FUND, FIDELITY INVESTMENTS VARIABLE INSURANCE
PRODUCTS FUND II AND NORTHSTAR/NWNL TRUST. NO OFFER IS BEING MADE OF A CONTRACT
FUNDED BY ANY OF THE UNDERLYING FUNDS FOR WHICH A CURRENT PROSPECTUS HAS NOT
BEEN DELIVERED.
The date of this Prospectus is April 30, 1996
<PAGE>
TABLE OF CONTENTS
<PAGE>
Heading Page
GLOSSARY OF SPECIAL TERMS................................ 3
SUMMARY.................................................. 4
FEE TABLE................................................ 8
CONDENSED FINANCIAL INFORMATION.......................... 10
BANKERS SECURITY
LIFE INSURANCE SOCIETY.............................. 12
THE SEPARATE ACCOUNTS.................................... 12
THE FUNDS................................................ 13
PURCHASE OF CONTRACTS.................................... 18
CHARGES AND OTHER DEDUCTIONS............................. 19
A. Contingent Deferred Sales Charge...................... 19
B. Surrenders Without Charge............................. 20
C. Mortality and Expense Risk Charges.................... 21
D. Contract Maintenance Charge........................... 21
E. Premium Taxes......................................... 22
F. Other Charges......................................... 22
ACCUMULATION PERIOD - DEFERRED
VARIABLE ANNUITIES....................................... 22
A. Crediting Accumulation Units.......................... 22
B. Value of an Accumulation Unit......................... 22
C. Death Benefit During the Accumulation Period.......... 23
D. Transfers Between Sub-Accounts........................ 23
E. Dollar Cost Averaging................................. 24
F. Systematic Withdrawal Program......................... 24
G. Surrender and Termination............................. 24
ANNUITY PERIOD........................................... 25
A. Commencement Date..................................... 25
B. Annuity Options....................................... 25
C. Allocation of Annuity................................. 26
D. Value of an Annuity Unit.............................. 26
E. Frequency and Amount of Annuity Payments.............. 26
F. Assumed Investment Rate............................... 27
Heading Page
MISCELLANEOUS CONTRACT PROVISIONS........................ 27
A. Time of Payments................................... 27
B. Right to Examine Contract.......................... 27
C. Amendment of Contract.............................. 27
D. Reports to Contract Owners......................... 27
E. Assignment......................................... 28
F. Substitution of Fund Shares........................ 28
G. Ownership of the Contract.......................... 28
FEDERAL INCOME TAX STATUS............................... 28
A. Introduction....................................... 28
B. Tax Status......................................... 28
C. Taxation of Annuities in General/
Non-Qualified Plans............................. 28
D. Additional Considerations.......................... 30
E. Diversification Standards.......................... 30
F. Qualified Plans.................................... 31
REGULATION............................................... 32
A. State.............................................. 32
B. Proposed Unisex Legislation........................ 33
VOTING RIGHTS............................................ 33
TEXAS OPTIONAL RETIREMENT PROGRAM........................ 33
LITIGATION............................................... 33
REGISTRATION STATEMENT................................... 33
LEGAL OPINIONS........................................... 34
PERFORMANCE DATA......................................... 34
FINANCIAL STATEMENTS..................................... 35
STATEMENTS OF ADDITIONAL INFORMATION 35
THE FIXED ACCOUNT........................................ 35
APPENDIX I............................................... A-1
APPENDIX II.............................................. A-2
APPENDIX III............................................. A-2
<PAGE>
2
GLOSSARY OF SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
Accumulation Period - The period between the Date of Issue and the Annuity
Commencement Date.
Accumulation Unit - An accounting unit of measure used to calculate the value
of a Contract Owner's interest prior to the Annuity Commencement Date.
Accumulated Value - See the definition of Contract Value.
Alliance Variable Products Series Fund, Inc. - A mutual fund with separate
portfolios, the shares of one or more of which may be chosen as the underlying
investment for a Contract.
Annuitant - The person designated to receive or who is receiving annuity
payments.
Annuity Commencement Date - The date on which annuity payments are to commence.
Annuity Option - The provisions under which a series of annuity payments is made
to the Annuitant.
Annuity Unit - An accounting unit of measure used to calculate the value of
second and subsequent variable annuity payments.
Beneficiary - The person to receive benefits under a Contract upon the
Annuitant's death.
Contract Anniversary - The same day and month as the Date of Issue in each later
year.
Contract Owner - The person or entity with legal rights of ownership of the
Contract.
Contract Owner's Individual Account - The sum of all values in the Sub-Accounts
of the Separate Accounts and the Fixed Account credited to a Contract Owner
during the Accumulation Period.
Contract Value - The value of the Contract Owner's Individual Account, also
referred to as the Accumulated Value.
Date of Issue - Two business days following the day on which the minimum initial
Purchase Payment for the Contract is received by Bankers Security.
Fidelity Variable Insurance Products Fund and Fund II - Mutual funds with
separate portfolios, the shares of one or more of which may be chosen as the
underlying investment for a Contract.
Fixed Account - Assets of Bankers Security other than those allocated to any
separate account of Bankers Security.
Fixed Account Values - The Contract values which the Owner allocates to the
Fixed Account, and which accumulates in the General Account of Bankers Security.
Fixed Annuity - An annuity with payments which remain fixed as to dollar amount
throughout the annuity period and which does not vary with investment
experience.
Joint Annuitant - The designated second person under a joint and survivor life
annuity.
Northstar/NWNL Trust - A mutual fund with separate portfolios, the shares of one
or more of which may be chosen as the underlying investment for a Contract.
Oppenheimer Variable Account Funds - A mutual fund with separate portfolios, the
shares of one or more of which may be chosen as the underlying investment for a
Contract.
Purchase Payment - An initial or subsequent Purchase Payment to purchase an
annuity.
Separate Accounts P and Q - Segregated investment accounts established by
Bankers Security pursuant to applicable law and registered as a unit investment
trust under the Investment Company Act of 1940, as amended.
Sub-Account - A division of the Separate Accounts used in connection with the
Contracts the assets of which are invested in the shares of the corresponding
underlying portfolios.
Sub-Account Accumulated Value - The value of the Sub-Account Accumulation Units
credited to a Contract Owner for the Sub-Account for any given Valuation Period.
Valuation Date - Each day that the New York Stock Exchange is open for trading.
Valuation Period - The interval of time between two consecutive Valuation
Dates measured from the closing of the New York Stock Exchange.
Variable Annuity - An annuity with payments varying as to dollar amount
in relation to the investment experience of the Sub-Account.
SUMMARY
Individual Variable Annuity Contracts
The individual flexible purchase payment variable annuity contracts
("Contracts") offered by Bankers Security Life Insurance Society ("Bankers
Security" or the "Company") provide a retirement planning vehicle designed to
give you maximum flexibility in attaining your investment goals. The Contract
Owner determines the investment objective of each Contract on a continuing basis
by directing the allocation of Purchase Payments and Sub-Account Accumulated
Value among seventeen Sub-Accounts established within each Separate Account.
These Contracts are called "variable" annuity contracts because the value of the
Contracts depends upon the investment results of the Sub-Account or Sub-Accounts
you choose. Contrary to a fixed annuity contract, the Contract Owner and
Annuitant under a Contract assume the risk of investment gain or loss during the
Accumulation Period rather than Bankers Security. The Owner may also elect part
or all of the Contract values to accumulate in a Fixed Account (see "Fixed
Account" page 35). Amounts held under the Contract may be withdrawn, in whole or
in part, if needed at a time prior to retirement years. Withdrawn amounts may be
subject to a penalty tax imposed by the Internal Revenue Code and a contingent
deferred sales charge.
The Contracts may be purchased for individual retirement plans which
qualify for Federal tax benefits available under Sections 401, 403(a), 403(b),
408 or 457 of the Internal Revenue Code ("Qualified Plans"). They may also be
issued for deferred compensation and other individual retirement plans which do
not qualify under such Code Sections ("Non-Qualified Plans").
Purchase Payments
The minimum initial Purchase Payment for Separate Account P is $1,000 ($100
for automatic payment plans). Subsequent purchase payments must be at least $100
unless waived by Bankers Security. The minimum initial Purchase Payment for
Separate Account Q is $250 ($50 for automatic payment plans). Subsequent
Purchase Payments of at least $50 must be made unless waived by Bankers
Security.
Allocation of Purchase Payments
Purchase payments, after deductions for any applicable premium taxes, are
allocated to Bankers Security Variable Annuity Fund P ("Separate Account P") for
Non-Qualified Plans and Bankers Security Variable Annuity Fund Q ("Separate
Account Q") for Qualified Plans. A Contract Owner directs Bankers Security to
allocate such net purchase payments to up to seventeen accounts ("Sub-Accounts")
that are established within each Separate Account and/or the Fixed Account.
Shares of eight of the portfolios of Oppenheimer Variable Account Funds, shares
of two of the portfolios of the Alliance Variable Products Series Fund, Inc.,
shares of five of the portfolios of the Fidelity Variable Insurance Products
Fund and Fund II and shares of two of the portfolios of the Northstar/NWNL Trust
are available to each Separate Account as funding vehicles for the Contracts:
Oppenheimer Money Fund ("Money Fund"), Oppenheimer High Income Fund ("High
Income Fund"), Oppenheimer Bond Fund ("Bond Fund"), Oppenheimer Strategic Bond
Fund ("Strategic Bond Fund"), Oppenheimer Capital Appreciation Fund ("Capital
Appreciation Fund"), Oppenheimer Growth Fund ("Growth Fund"), Oppenheimer
Multiple Strategies Fund ("Multiple Strategies Fund"), Oppenheimer Global
Securities Fund ("Global Securities Fund"), Alliance Growth and Income Portfolio
("Growth and Income Portfolio"), Alliance Short-Term Multi-Market Portfolio
("Short-Term Multi-Market Portfolio"), Fidelity Equity Income Portfolio ("Equity
Income Portfolio"), Fidelity Growth Portfolio ("Growth Portfolio"), Fidelity
Investment Grade Bond Portfolio ("Investment Grade Bond Portfolio"), Fidelity
Asset Manager Portfolio ("Asset Manager Portfolio"), Fidelity Index 500
Portfolio ("Index 500 Portfolio"), Northstar Income and Growth Fund ("Income and
Growth Fund") and Northstar High Yield Bond Fund ("High Yield Bond Fund")
(collectively the "Funds"). Each Fund is a series of a no-load, diversified,
open-end investment company whose shares are not sold directly or indirectly to
the general public but are available only through the purchase of a contract
issued by Bankers Security or of a variable annuity contract or variable life
insurance policy issued by another insurance company. (See the prospectus of
each of the Funds for a discussion of the risks in connection with the use of
shares of the Funds as the investment medium for annuity contracts or insurance
policies issued by another insurance company.)
Investment Objectives of the Funds
The investment objective of the MONEY FUND is to seek the maximum current
income from investments in "money market" securities that is consistent with low
capital risk and the maintenance of liquidity. The investment objective of the
HIGH INCOME FUND is to earn a high level of current income by investing in a
diversified portfolio of high yield, fixed income securities (debt issues and
preferred stock) believed by this Fund's management not to involve undue risk.
Such securities, commonly known as "junk bonds," may be considered to be
speculative, are subject to a greater risk of loss of principal, and ordinarily
include those in the lower rating categories of the established rating services.
This Fund may not be appropriate for all retirement programs. Purchasers should
carefully assess the risks associated with an investment in this Fund. For a
description of risk factors of the High Income Fund, please read the
accompanying Prospectus for the Oppenheimer Variable Account Funds under the
heading "Investment Policies - High Income Fund - Risk Factors" of that
Prospectus. The BOND FUND primarily seeks a high level of current income from
investments in high yield fixed-income securities rated "Baa" or better by
Moody's or "BBB" or better by Standard & Poor's. Secondarily, this Fund seeks
capital growth when consistent with its primary objective. The STRATEGIC BOND
FUND seeks a high level of current income principally from interest on debt
securities and seeks to enhance such income by writing covered call options on
debt securities. The Fund intends to invest principally in: (i) foreign
government and corporate debt securities, (ii) U.S. Government securities, and
(iii) lower-rated high yield domestic debt securities, commonly known as "junk
bonds," which are subject to a greater risk of loss of principal and nonpayment
of interest than higher-rated securities. This Fund's investments may be
considered to be speculative. The investment objective of the CAPITAL
APPRECIATION FUND is to seek capital appreciation through investment in
securities of "growth type" companies or in special situations or cyclical
industries when its management believes they present opportunities for capital
growth. The GROWTH FUND seeks to achieve capital appreciation by investing in
securities of well-known established companies. The MULTIPLE STRATEGIES FUND
seeks a total investment return (which includes current income and capital
appreciation in the value of its shares) from investments in common stocks and
other equity securities, bonds and other debt securities, and "money market"
securities. The GLOBAL SECURITIES FUND seeks long-term capital appreciation by
investing a substantial portion of assets in securities of foreign issuers,
"growth-type" companies, cyclical industries and special situations which are
considered to have appreciation possibilities. Current income is not an
objective. The GROWTH AND INCOME PORTFOLIO seeks to balance the objectives of
reasonable current income and reasonable opportunities for appreciation through
investments primarily in dividend-paying common stocks of good quality. The
SHORT-TERM MULTI-MARKET PORTFOLIO seeks the highest level of current income,
consistent with what the Fund's Adviser considers to be prudent investment risk,
that is available from a portfolio of high-quality debt securities having
remaining maturities of not more than three years. The investment objective of
the EQUITY INCOME PORTFOLIO is to seek reasonable income by investing primarily
in income-producing equity securities. In choosing these securities the
Investment Adviser will also consider the potential for capital appreciation.
The Fund's goal is to achieve a yield which exceeds the composite yield on the
securities comprising the Standard & Poor's 500 Composite Stock Price Index. The
investment objective of the GROWTH PORTFOLIO is to seek to achieve capital
appreciation. This Fund normally will purchase common stocks, although its
investments are not restricted to any one type of security. Capital appreciation
may also be found in other types of securities, including bonds and preferred
stocks. The emphasis on a particular security will depend on the Adviser's
interpretation of underlying economic, financial and security trends. The Fund
does not place any emphasis on dividend income from its investments except when
The Adviser believes this income will have a favorable influence on the market
value of the security. The investment objective of the INVESTMENT GRADE BOND
PORTFOLIO is to seek as high a level of current income as is consistent with the
preservation of capital. Under normal conditions, it invests at least 65% of the
Fund's total assets in investment-grade fixed-income securities such as bonds,
notes and debentures. The Fund's dollar-weighted average portfolio maturity may
not exceed ten years. The Fund may purchase individual securities with
maturities of more than ten years, as long as its average maturity remains
within this limit. The investment objective of the ASSET MANAGER PORTFOLIO is to
seek to obtain high total return with reduced risk over the long-term by
allocating its assets among domestic and foreign stocks, bonds and short-term
fixed-income instruments. The Adviser will normally allocate the Fund's assets
among the three asset classes within the following investment parameters: 0-70%
in short-term instruments; 20-60% in bonds (intermediate to long-term debt
securities); and 10-60% in stocks (equities). The investment objective of the
INDEX 500 PORTFOLIO is to seek investment results that correspond to the total
return (i.e., the combination of capital changes and income) of common stocks
publicly traded in the United States, as represented by the Standard & Poor's
Composite Stock Price Index (the S&P 500 or Index), while keeping transaction
costs and other expenses low. The investment objective of the INCOME AND GROWTH
FUND is to seek current income balance with the objective of achieving capital
appreciation. Under normal circumstances, the Fund will invest at least 65% of
its total assets in income-producing securities. Securities are also purchased
on the basis of fundamental attraction regarding capital appreciation prospects.
In this way, income is "balanced" with capital. To achieve its objective, the
Fund will invest in common and preferred stocks of domestic and foreign issuers
that have prospects for dividend income and growth of capital, as well as
selected fixed-income securities of domestic and foreign private and government
issuers. The investment objective of the HIGH YIELD BOND FUND is to seek high
income. Under normal market conditions, the Fund will seek to achieve its
investment objective by investing at least 65% of its total assets in
higher-yielding, lower-rated U.S. dollar-denominated debt securities, which may
involve high risk and are predominantly speculative in character. These
securities are commonly known as "junk bonds." For a description of each of
these Funds, see page 13 and the accompanying Prospectus for each of the Funds,
which describes more fully each Fund and which should be read before investment.
There is no assurance that the investment objectives of any of these Funds will
be met.
Investment Manager
The investment manager for the Oppenheimer Variable Account Funds is
Oppenheimer Funds, Inc. The investment manager for the Alliance Variable
Products Series Funds, Inc. is Alliance Capital Management L.P. The investment
manager for the Fidelity Variable Life Insurance Products Fund and Fund II is
Fidelity Management & Research Company. The investment manager for the
Northstar/NWNL Trust is Northstar Investment Management Corporation.
Federal Income Tax
In general, under current law the Owner of a Variable Annuity Contract is
not taxed on increases in the Contract Value until payments are received by him
under the Contract. Partial surrenders or cash withdrawals made before the
Annuity Commencement Date are treated as income to the extent that the cash
value of the Contract (determined without regard to any surrender charge)
exceeds the investment in the Contract. A direct or indirect loan against the
Contract or the pledging or assigning of any portion of its value is treated the
same as a cash withdrawal. Taxable distributions will be subject to withholding
(unless the Contract Owner elects otherwise). In addition, a penalty is imposed
(with certain exceptions) by the Internal Revenue Service ("IRS") on certain
taxable distributions (surrenders or withdrawals). The penalty imposed by the
IRS, if applicable, is separate and distinct from and may be in addition to the
Contract's contingent deferred sales charge described on p. 19 of the
Prospectus. (For a discussion of amount and manner of the penalty tax imposed on
surrenders and withdrawals, see "Federal Income Tax Status Penalty Tax on
Surrenders or Withdrawals" on p. 29.)
From time to time proposals are introduced in Congress which, if adopted,
would adversely affect the tax treatment of annuities. For example, in January,
1992, the Bush Administration included in its budget for fiscal year 1993 a
proposal to modify the tax treatment of annuities that do not contain
substantial life contingencies. Under the proposal, annuity contracts issued
after the proposal's effective date, would lose tax deferral on the inside
buildup unless the purchaser, as of the date the contract is entered into,
irrevocably chooses as a settlement option a series of substantially equal
periodic payments (not less frequently than annually) made for the life of the
annuitant or the joint lives of the annuitants. The proposal was not intended to
affect the tax status of pension annuities, which includes 403(b)s, IRAs and
other qualified annuity contracts. The Congress did not accept the proposal.
(See "Federal Income Tax Status" on p. 28 for additional information on the
proposal.)
Variable Annuities
Payment of annuity benefits will be on a fixed basis, a variable basis or a
combination of variable and fixed basis as selected by the Contract Owner. The
Contracts provide for the accumulation of values on a variable and/or fixed
basis. The Accumulated Value credited to a Contract Owner, and therefore the
amount of the first annuity payment, whether fixed or variable, will vary with
the investment performance and return of the amounts allocated to the
Sub-Accounts of Separate Accounts P and Q during the Accumulation Period, and
the amount of the second and each subsequent Variable Annuity payment will vary
with the investment performance of the Sub-Accounts subsequent to the
commencement of annuity payments. However, the dollar amount of the payments
under a Fixed Annuity, determined at the Annuity Commencement Date, is
guaranteed by Bankers Security. There can be no assurance that the Accumulated
Value prior to the Annuity Commencement Date or the aggregate amount of Variable
Annuity payments received after such date will equal or exceed the Purchase
Payments that were made. Unless otherwise stated, this Prospectus describes only
the variable aspects of the Contracts. The Contracts contain information on the
fixed aspects.
Annuity Payments
The Contracts obligate Bankers Security to make payments for the lifetime
of the Annuitant in accordance with the annuity rates contained in the Contract,
regardless of actual mortality experience.
Annuity payments under the Contracts may be elected to start either at a
future date (deferred annuity) or at a date no more than approximately 31 days
after the Contract is issued (immediate annuity). Annuity payments will be made
in monthly installments except that proceeds of less than $2,000 may be paid in
a single sum or the schedule of installment payments may be changed to avoid
payments of less than $20.
Upon the death of the Annuitant or the Contract Owner under a Contract
before the Annuity Commencement Date, Bankers Security will pay a death benefit
under the terms of the Contract. For a discussion of amount and manner of
payment of this benefit, see "Death Benefit When Annuitant or Contract Owner
Dies During the Accumulation Period," page 23. Also, see "Federal Income Tax
Status," for rules concerning spousal beneficiaries, page 28.
Charges and Deductions
No sales charge is deducted from any Purchase Payment; only State premium
taxes, where applicable, are deducted (see "Premium Taxes," page 22). All or a
portion of the Accumulated Value of the Contract may be withdrawn during the
Accumulation Period. However, Purchase Payments that are partially or totally
withdrawn prior to eight years from their date of deposit into the Contract will
be charged (with certain exceptions) a contingent deferred sales charge
("Charge") which is a percentage of the amount of the Purchase Payments
withdrawn. Each payment is treated separately to determine if any Charge is
applicable. A withdrawal within two years of the payment is charged 7% of the
withdrawn amount. Thereafter, charges decline 1% per year (see Page 20 for a
table of charges and withdrawal rights). Withdrawn amounts shall be considered
withdrawals of Purchase Payments until the total amounts of all Purchase
Payments in the Accumulated Value have been withdrawn. No such Charge will be
imposed against withdrawals of Purchase Payments if the Purchase Payment was in
the Contract for at least eight years or against that portion of withdrawals
which are in excess of the total of all Purchase Payments. In addition, within
the eight year period applicable to the Charge, the Owner may surrender, during
each contract year, up to 10% of each such Purchase Payment held in the Contract
for at least one year, without paying a Charge. To the extent that the Owner
does not utilize withdrawals that are not subject to the Charge, they may be
carried forward to the extent that 20% may be withdrawn during a two-year
period. (See "Contingent Deferred Sales Charge," page 19).
Bankers Security deducts a daily charge equal to an annual rate of 1.25% of
the daily asset value of each Sub-Account as a charge for mortality and expense
risks assumed by Bankers Security. In addition, on each Contract Anniversary,
the Company will deduct an annual maintenance charge of $30 from the Accumulated
Value under the Contract. Any applicable premium taxes (which presently range
from 0% to 3.5%) are deducted when Purchase Payments are made or at the Annuity
Commencement Date, depending on state requirements (see "Charges and Other
Deductions," page 19; see each of the prospectuses of the Funds for the
applicable charges imposed by the Funds).
Right to Examine Contract
A Contract Owner may revoke a Contract for any reason at any time between
the date of application and the date 20 days after receipt of the Contract. Upon
revocation, Bankers Security will pay the Contract Value for the Contract unless
otherwise required by state and/or federal law. Therefore the Contract Owner may
receive more or less than the initial Purchase Payment depending on investment
experience within the Sub-Account during the period in which he has the right to
revoke. The Value is determined as of the close of business the business day the
Contract is received at the Company's Executive Office. (see "Right to Examine
Contract," page 27).
The foregoing information should be read in conjunction with detailed
information appearing elsewhere in this Prospectus.
<PAGE>
FEE TABLE
CONTRACT OWNER TRANSACTION EXPENSES
Sales load imposed on purchases (as a percentage of purchase payments).......0%
Contingent Deferred Sales Load (as a percentage of purchase payments) when:
a. Surrendered purchase payments less than eight years old:
YEARS RATE YEARS RATE
0-2 7% 5-6 3%
2-3 6% 6-7 2%
3-4 5% 7-8 1%
4-5 4% 8+ 0%
b. Purchase payments more than 8 years old..............................0%
Charge for transfers among sub-accounts......................................0%
ANNUAL CONTRACT FEE........................................................$30
SEPARATE ACCOUNT ANNUAL EXPENSES
Mortality and expense risk charge (as percentage of the average
Sub-Account value).......................................1.25%
Account Fees and Expenses...............................................0%
Total Separate Account Annual Expenses...............................1.25%
FUND ANNUAL CHARGES AND EXPENSES (as percentage of Portfolio's average net
assets) paid by each Fund in its fiscal year ended December 31, 1995. Total
expenses for Oppenheimer Funds are restated to reflect current management
charges.
Total Fund
Management Other Annual
Fees Expenses Expenses
---------- --------- -----------
Oppenheimer Money Fund .45% .06% .51%
Oppenheimer High Income Fund .75% .06% .81%
Oppenheimer Bond Fund .75% .05% .80%
Oppenheimer Strategic Bond Fund .75% .10% .85%
Oppenheimer Capital Appreciation Fund .74% .04% .78%
Oppenheimer Growth Fund .75% .04% .79%
Oppenheimer Multiple Strategies Fund .74% .03% .77%
Oppenheimer Global Securities Fund .74% .15% .89%
Alliance Growth and Income Portfolio .63% .16% .79%
Alliance Short-Term Multi-Market Portfolio .20% .75% .95%
Fidelity Equity Income Portfolio .51% .10% .61%
Fidelity Growth Portfolio .61% .09% .70%
Fidelity Investment Grade Bond Portfolio .45% .14% .59%
Fidelity Asset Manager Portfolio .71% .08% .79%
Fidelity Index 500 Portfolio 0% .28% .28%
Northstar Income and Growth Fund .75% .05% .80%
Northstar High Yield Bond Fund .75% .05% .80%
EXAMPLES
If you surrender 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:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------
Money Fund $ 89 119 142 220
High Income Fund $ 92 129 157 252
Bond Fund $ 92 128 157 251
Strategic Bond Fund $ 93 130 159 256
Capital Appreciation $ 92 128 156 249
Growth Fund $ 92 128 156 250
Multiple Strategies $ 92 127 155 248
Global Securities $ 93 131 162 260
Growth and Income Portfolio $ 92 127 154 246
Short-Term Multi-Market $ 94 133 165 267
Equity Income Portfolio $ 90 122 147 231
Growth Portfolio $ 91 125 152 241
Investment Grade Bond Portfolio $ 90 122 146 229
Asset Manager Portfolio $ 92 128 156 250
Index 500 Portfolio $ 87 112 130 195
Income and Growth Fund $ 92 128 157 251
High Yield Bond Fund $ 92 128 157 251
If you annuitize 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:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------
Money Fund $ 89 119 102 220
High Income Fund $ 92 129 117 252
Bond Fund $ 92 128 117 251
Strategic Bond Fund $ 93 130 119 256
Capital Appreciation $ 92 128 116 249
Growth Fund $ 92 128 116 250
Multiple Strategies $ 92 127 115 248
Global Securities $ 93 131 122 260
Growth and Income Portfolio $ 92 127 114 246
Short-Term Multi-Market $ 94 133 125 267
Equity Income Portfolio $ 90 122 107 231
Growth Portfolio $ 91 125 112 241
Investment Grade Bond Portfolio $ 90 122 106 229
Asset Manager Portfolio $ 92 128 116 250
Index 500 Portfolio $ 87 112 90 195
Income and Growth Fund $ 92 128 117 251
High Yield Bond Fund $ 92 128 117 251
If you do not surrender your contract:
You would pay the following expenses on a 1,000 investment, assuming 5%
annual return on assets:
SUBACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------
Money Fund $ 19 59 102 220
High Income Fund $ 22 69 117 252
Bond Fund $ 22 68 117 251
Strategic Bond Fund $ 23 70 119 256
Capital Appreciation $ 22 68 116 249
Growth Fund $ 22 68 116 250
Multiple Strategies $ 22 67 115 248
Global Securities $ 23 71 122 260
Growth and Income Portfolio $ 22 67 114 246
Short-Term Multi-Market $ 24 73 125 267
Equity Income Portfolio $ 20 62 107 231
Growth Portfolio $ 21 65 112 241
Investment Grade Bond Portfolio $ 20 62 106 229
Asset Manager Portfolio $ 22 68 116 250
Index 500 Portfolio $ 17 52 90 195
Income and Growth Fund $ 22 68 117 251
High Yield Bond Fund $ 22 68 117 251
The purpose of the above table is to assist the Contract Owner in understanding
the various costs and expenses that a Contract Owner will bear directly or
indirectly. In calculating the expenses in the above examples, the $30 annual
contract fee has been converted to a .11% annual asset charge by dividing the
total contract fees collected in 1995 by the total average net assets of all of
the Sub-Accounts. The actual amount of the Annual Contract fee attributable to a
$1,000 investment depends on the value of the Contract. The table reflects
expenses of the Variable Account as well as the Fund. (See "Charges and Other
Deductions" of this Prospectus and "Management of the Fund" in each Fund's
Prospectus).
Any premium or other taxes levied by any governmental entity with respect to the
Contract will be charged against the Contract Values based on a percentage of
premiums paid. Premium taxes currently imposed by certain states on the
Contracts range from 0% to 3.5% of premiums paid. (see "Charges and Other
Deductions-Premium Taxes.")
"Other Expenses" are based upon the expenses outlined under the section
describing the Management of the Fund in each Fund's Prospectus. Total Fund
expenses are assessed at the underlying mutual fund level.
* The expenses listed in the table for the Short-Term Multi-Market Portfolio,
the Asset Manager Portfolio, the Index 500 Portfolio, the Income and Growth Fund
and the High Yield Bond Fund are net of voluntary expense reimbursements, which
are not required to be continued indefinitely, however, the Advisers intend to
continue such reimbursements for the foreseeable future. The estimated expenses
of these Portfolios, before expense reimbursements, would be: Short-Term
Multi-Market Portfolio: Management Fees -- .55%, Other Expenses -- .75% and
Total Portfolio Operating Expenses -- 1.30%. The total expenses for the other
funds would be: Asset Manager -- .81%, Index 500 -- .47%, Income and Growth --
1.74%, and High Yield Bond -- 2.11%.
After a Purchase Payment has been in the Contract for 12 months, a
Contract Owner may surrender up to 10% per year of that Purchase Payment
without a surrender charge.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
<PAGE>
CONDENSED FINANCIAL INFORMATION
(Unaudited)
<TABLE>
<CAPTION>
Total No. of
Accumulation Accumulation Accumulation
Unit Value Unit Value Units Outstanding
Account* Fund Beginning of Year End of Year at End of Year
<S> <C> <C> <C>
120 Northstar Income and Growth Fund
1995...................................... 1.00000000 1.083402 8,476.00
127 Northstar High Yield Bond Fund
1995...................................... 1.00000000 1.008179 24,738.00
144 Oppenheimer Money Fund
1987...................................... 1.00000000 1.03414227 93,217.95
1988...................................... 1.03414227 1.09512918 1,795,769.51
1989...................................... 1.09512918 1.18007579 3,264,825.73
1990...................................... 1.18007579 1.26079665 4,137,386.96
1991...................................... 1.26079665 1.32359126 3,530,844.29
1992...................................... 1.32359126 1.35942824 2,492,442.82
1993...................................... 1.35942824 1.38463844 3,998,003.26
1994...................................... 1.38463844 1.424860 5,478,469.39
1995...................................... 1.424860 1.489863 2,852,045.00
145 Oppenheimer Capital Appreciation Fund
1987...................................... 1.00000000 0.88729633 153,418.15
1988...................................... 0.88729633 0.97130386 1,264,130.44
1989...................................... 0.97130386 1.22404922 2,899,407.46
1990...................................... 1.22404922 1.01385655 5,576,327.25
1991...................................... 1.01385655 1.53407324 7,348,756.54
1992...................................... 1.53407324 1.73051326 9,997,201.06
1993...................................... 1.73051326 2.17199536 9,363,537.96
1994...................................... 2.17199536 1.982724 9,302,670.08
1995...................................... 1.982724 2.595032 8,372,729.00
146 Oppenheimer High Income Fund
1987...................................... 1.00000000 0.98408308 24,585.86
1988...................................... 0.98408308 1.11498564 2,063,276.85
1989...................................... 1.11498564 1.15490005 3,053,726.57
1990...................................... 1.15490005 1.19401690 3,507,425.84
1991...................................... 1.19401690 1.57736186 5,011,404.44
1992...................................... 1.57736186 1.83450598 6,112,911.93
1993...................................... 1.83450598 2.28703524 6,654,354.40
1994...................................... 2.28703524 2.186664 7,029,355.90
1995...................................... 2.186664 2.599449 5,723,847.00
147 Oppenheimer Multiple Strategies Fund
1987...................................... 1.00000000 0.98738383 153,630.00
1988...................................... 0.98738383 1.17395859 7,038,184.78
1989...................................... 1.17395859 1.33787777 14,688,008.99
1990...................................... 1.33787777 1.29608212 14,398,614.47
1991...................................... 1.29608212 1.50412476 11,822,309.04
1992...................................... 1.50412476 1.61878574 11,763,608.32
1993...................................... 1.61878574 1.85449482 11,614,087.98
1994...................................... 1.85449482 1.795649 11,651,992.48
1995...................................... 1.795649 2.152196 9,941,909.00
148 Oppenheimer Global Securities Fund
1990...................................... 1.00000000 1.00216909 481,915.29
1991...................................... 1.00216909 1.02748725 2,717,932.86
1992...................................... 1.02748725 0.94271149 4,148,982.03
1993...................................... 0.94271149 1.57878303 7,844,806.26
1994...................................... 1.57878303 1.468976 9,907,933.30
1995...................................... 1.468976 1.483269 7,628,233.00
149 Alliance Short-Term Multi Market Portfolio
1990...................................... 1.00000000 1.00164787 62,463.14
1991...................................... 1.00164787 1.05991838 2,860,674.31
1992...................................... 1.05991838 1.05669642 2,130,062.14
1993...................................... 1.05669642 1.11323613 1,651,992.74
1994...................................... 1.11323613 1.027825 1,302,875.55
1995...................................... 1.027825 1.083723 610,597.00
143 Alliance Growth and Income Portfolio
1991...................................... 1.00000000 1.01688779 491,096.52
1992...................................... 1.01688779 1.08024231 1,127,368.68
1993...................................... 1.08024231 1.18973636 1,397,687.80
1994...................................... 1.18973636 1.170066 1,613,227.08
1995...................................... 1.170066 1.568764 1,716,168.00
150 Oppenheimer Strategic Bond Fund
1995...................................... 1.00000000 1.120590 2,896,090.00
151 Oppenheimer Bond Fund
1995...................................... 1.00000000 1.045657 62,264.00
152 Oppenheimer Growth Fund
1995...................................... 1.00000000 1.247353 1,176,022.00
171 Fidelity Growth Portfolio
1995...................................... 1.00000000 1.154697 1,600,070.00
172 Fidelity Equity-Income Portfolio
1995...................................... 1.00000000 1.165930 1,330,026.00
174 Fidelity Investment Grade Bond Portfolio
1995...................................... 1.00000000 1.055919 57,961.00
175 Fidelity Asset Manager Portfolio
1995...................................... 1.00000000 1.111989 167,816.00
176 Fidelity Index 500 Portfolio
1995...................................... 1.00000000 1.173139 400,667.00
020 Northstar Income and Growth Fund
1995...................................... 1.00000000 1.037935 43,086.00
</TABLE>
10
<TABLE>
<CAPTION>
<S> <C> <C> <C>
027 Northstar High Yield Bond Fund
1995...................................... 1.00000000 1.003279 35,156.00
044 Oppenheimer Money Fund
1987...................................... 1.00000000 1.02907340 123,844.49
1988...................................... 1.02907340 1.08867100 1,145,741.26
1989...................................... 1.08867100 1.17264224 2,501,592.66
1990...................................... 1.17264224 1.25045430 4,718,105.39
1991...................................... 1.25045430 1.31260602 2,539,827.20
1992...................................... 1.31260602 1.34755391 2,258,557.95
1993...................................... 1.34755391 1.37294947 2,679,574.22
1994...................................... 1.37294947 1.411485 2,717,189.97
1995...................................... 1.411485 1.469386 1,475,816.00
045 Oppenheimer Capital Appreciation Fund
1987...................................... 1.00000000 0.93422980 213,796.14
1988...................................... 0.93422980 1.04107013 1,106,060.23
1989...................................... 1.04107013 1.30802487 2,700,696.27
1990...................................... 1.30802487 1.07922455 4,309,195.29
1991...................................... 1.07922455 1.63695589 5,852,712.51
1992...................................... 1.63695589 1.86107868 7,560,094.40
1993...................................... 1.86107868 2.34049976 8,411,689.39
1994...................................... 2.34049976 2.136212 10,183,605.42
1995...................................... 2.136212 2.795902 8,254,376.00
046 Oppenheimer High Income Fund
1987...................................... 1.00000000 1.00281334 55,650.09
1988...................................... 1.00281334 1.13677870 1,301,095.46
1989...................................... 1.13677870 1.17525867 2,275,672.27
1990...................................... 1.17525867 1.21562536 2,217,519.67
1991...................................... 1.21562536 1.60724359 2,779,649.91
1992...................................... 1.60724359 1.87089795 3,479,720.72
1993...................................... 1.87089795 2.33099421 4,822,115.80
1994...................................... 2.33099421 2.228140 5,483,048.17
1995...................................... 2.228140 2.648742 4,795,757.00
047 Oppenheimer Multiple Strategies Fund
1987...................................... 1.00000000 0.95100070 416,459.85
1988...................................... 0.95100070 1.14701805 4,438,166.53
1989...................................... 1.14701805 1.30453816 15,240,153.19
1990...................................... 1.30453816 1.26411101 16,667,402.48
1991...................................... 1.26411101 1.46684285 14,730,777.34
1992...................................... 1.46684285 1.57903751 14,941,044.43
1993...................................... 1.57903751 1.80779375 15,125,832.25
1994...................................... 1.80779375 1.750564 14,855,639.06
1995...................................... 1.750564 2.098159 14,609,651.00
048 Oppenheimer Global Securities Fund
1990...................................... 1.00000000 1.00313586 195,425.02
1991...................................... 1.00313586 1.02831527 2,387,359.19
1992...................................... 1.02831527 0.94353695 3,490,049.47
1993...................................... 0.94353695 1.58469105 6,051,325.90
1994...................................... 1.58469105 1.469802 8,959,731.09
1995...................................... 1.469802 1.484107 6,517,492.00
049 Alliance Short-Term Multi Market Portfolio
1990...................................... 1.00000000 1.00204466 240,021.64
1991...................................... 1.00204466 1.05721360 2,013,738.94
1992...................................... 1.05721360 1.05348327 2,217,276.68
1993...................................... 1.05348327 1.11045894 902,190.95
1994...................................... 1.11045894 1.025319 524,724.19
1995...................................... 1.025319 1.081083 221,712.00
043 Alliance Growth and Income Portfolio
1990...................................... 1.00000000 0.99982907
1991...................................... 0.99982907 1.02160729 928,701.65
1992...................................... 1.02160729 1.08954194 1,246,481.47
1993...................................... 1.08954194 1.20301515 1,376,517.99
1994...................................... 1.20301515 1.184543 1,613,227.08
1995...................................... 1.184543 1.588168 1,778,121.00
050 Oppenheimer Strategic Bond Fund
1995...................................... 1.00000000 1.129835 1,201,509.00
051 Oppenheimer Bond Fund
1995...................................... 1.00000000 1.110013 67,637.00
052 Oppenheimer Growth Fund
1995...................................... 1.00000000 1.267073 382,509.00
071 Fidelity Growth Portfolio
1995...................................... 1.00000000 1.181778 906,399.00
072 Fidelity Equity- Income Portfolio
1995...................................... 1.00000000 1.159308 635,475.00
074 Fidelity Investment Grade Bond Portfolio
1995...................................... 1.00000000 1.044655 5,779.00
075 Fidelity Asset Manager Portfolio
1995...................................... 1.00000000 1.107043 166,628.00
076 Fidelity Index 500 Portfolio
1995...................................... 1.00000000 1.174503 301,011.00
</TABLE>
* The 1987 dates of the first investments for funds 144, 145, 146, 147, 044,
045, 046, and 047 were June 2, July 30, August 28, June 2, May 27, June 16, June
16, and May 27, respectively. For Funds 148, 149, 048 and 149, the dates of the
first investments were November 9, November 23, November 12 and November 26,
1990, respectively. For Funds 143 and 043, the dates of the first investment
were January 31, 1991 and December 27, 1990, respectively. The accumulation unit
value for all Sub-Accounts at inception was 1.00.
In conjunction with a 1994 administrative system conversion, the fund names were
changed as follows:
P-4 = 144
P-5 = 145
P-6 = 146
P-7 = 147
P-8 = 148
P-9 = 149
P-A = 143
Q-4 = 044
Q-5 = 045
Q-6 = 046
Q-7 = 047
Q-8 = 048
Q-9 = 049
Q-A = 043
11
<PAGE>
BANKERS SECURITY LIFE INSURANCE SOCIETY
Bankers Security Life Insurance Society ("Bankers Security" or the
"Company") is a stock life insurance company incorporated under the laws of the
State of New York in 1917 under the name The Morris Plan Insurance Society. It
adopted its present name in 1946. It is authorized to transact business in all
states, the District of Columbia and the Dominican Republic. Bankers Security
was the first company to write credit life insurance and until 1950 its business
was confined to credit life insurance on a group and individual basis initiated
in connection with loans made by banks and other lenders. In 1950 it began
writing ordinary life insurance. In 1962 Bankers Security acquired, through
merger, Postal Life Insurance Company, a New York chartered stock life insurance
company. In 1971 Bankers Security acquired, through merger, Congressional Life
Insurance Company, also a New York chartered stock life insurance company.
Bankers Security's principal office is located at 1000 Woodbury Road, Suite
102, P.O. Box 9004, Woodbury, New York 11797. Its administrative offices are
located at 4601 Fairfax Drive, Arlington, Virginia 22203, where its business is
administered and most phases of its operations are conducted. Bankers Security
writes all forms of life insurance.
On December 20, 1979, Bankers Security became a wholly-owned subsidiary of
United Services Life Insurance Company ("United Services") which became an
indirect, wholly-owned subsidiary of ReliaStar Financial Corp. ("ReliaStar"),
formerly The NWNL Companies, Inc., when it acquired USLICO Corporation on
January 20, 1995. ReliaStar is a holding company whose subsidiaries specialize
in life insurance and related financial services businesses.
THE SEPARATE ACCOUNTS
Separate Accounts P and Q were established in December, 1981 and September,
1982, respectively, under the provisions of the New York Insurance Law. The
Separate Accounts are registered, as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"), but such registration does not
involve any supervision of the management or investment practices or policies of
the Separate Accounts.
The assets of Separate Accounts P and Q are held separately from the assets
of Bankers Security. Under New York Insurance Law, all income, gains or losses
of the Separate Accounts, whether realized or not, must be credited to or
charged against the amounts placed in the Separate Accounts without regard to
the other income, gains and losses of Bankers Security. The assets of the
Sub-Accounts of the Separate Accounts attributable to the Contracts may not be
charged with liabilities arising out of any other business that Bankers Security
may conduct. They may, however, be subject to liabilities arising from
sub-accounts whose assets are attributable to other variable annuity contracts
offered by Separate Accounts P and Q. All obligations under the Contracts are
general corporate obligations of Bankers Security.
This Prospectus offers Contracts issued through Separate Accounts P and Q,
which invest only in funds whose shares are not sold directly or indirectly to
the general public. Separate Accounts P and Q are designed for individuals who
wish to obtain the benefits of a variable annuity funded by money market, equity
or debt securities, including the advantageous tax treatment usually
attributable to annuities. From March 6 to September 25, 1981, Bankers
Security's Account M offered Contracts funded by Daily Cash Accumulation Fund,
Inc., a money-market mutual fund whose shares are sold directly to the general
public. On September 25, 1981, the IRS announced Revenue Rule 81-225 which
concluded, in part, that variable annuity contracts funded by mutual funds whose
shares were also available for purchase by the general public were subject to
current income taxation (see "Federal Income Tax Status," page 18). The Ruling
applied retroactively to January 1, 1981. Bankers Security ceased issuing
variable annuity contracts funded through Separate Account M on September 25,
1981.
Bankers Security reserves the right to invest the assets of either Separate
Account in the shares of other investment companies or any other investment
permitted by law. Such substitutions would be made in accordance with the
provisions of the 1940 Act. If deemed by Bankers Security to be in the best
interest of Contract Owners, either Separate Account may be operated as a
management company under the 1940 Act or it may be unregistered under the 1940
Act in the event such registration is no longer required.
Any and all distributions received from the chosen Fund(s) will be
reinvested to purchase additional Fund shares at net asset value for the
Sub-Account.
Until March 31, 1994, Shareholder Services, Inc., an affiliate of
Oppenheimer Fund Distributor, Inc. ("OFDI"), performed certain administrative
services for the Separate Accounts including monitoring the number of
outstanding Contracts, calculating mortality and expense risk charges, and
determining the number of Accumulation Units which may be purchased for the
Separate Accounts. The charges for these services from 1991 to 1994 were
approximately $579,608 and were paid by Bankers Security. The principal business
address of Shareholders Services, Inc. is 3410 South Galena Street, Denver,
Colorado 80201. Beginning on April 1, 1994, these services are performed by
Bankers Security Life Insurance Society.
THE FUNDS
OPPENHEIMER VARIABLE ACCOUNT FUNDS
Oppenheimer Variable Account Funds (the "Funds") is an open-end,
diversified investment company organized as a Massachusetts business trust in
1984. The Contracts use eight separate Funds - the Money Fund, was offered in
1984, the Growth and Bond began in 1985, the High Income Fund, the Capital
Appreciation Fund and the Multiple Strategies Fund, were offered in 1986, the
Global Securities Fund organized in 1990 and Strategic Bond began in 1993. On
August 15, 1986, the Capital Appreciation Fund acquired all the assets of
Centennial Capital Appreciation Fund, Inc., another investment company, and the
Trust's name changed from Oppenheimer Variable Life Funds to its present name.
Each of the Oppenheimer Funds has separate assets and liabilities and a
separate net asset value per share, and the value of an Accumulation Unit for a
Sub-Account is limited to the value of the shares of the Fund in which the
Sub-Account's assets are invested. Since market risks are inherent in all
securities to varying degrees, assurance cannot be given that the investment
objective of any of the Funds will be met.
The fundamental investment objective and policies of each of the Funds is
as follows:
(1) Money Fund. The investment objective of the Money Fund is to provide
maximum current income consistent with capital preservation and liquidity. The
Money Fund will invest only in short-term (maturing in one year or less) debt
obligations payable in U.S. dollars issued or guaranteed by the Federal
government or its agencies or instrumentalities, or certain banks, savings and
loan associations, and corporations. The types of instruments that will form the
major part of the Fund's investments are certificates of deposit, bankers'
acceptances, commercial paper (including variable amount master demand notes,
described in the Funds' Statement of Additional Information), U.S. treasury
bills, securities of U.S. government agencies or instrumentalities and other
debt instruments (including bonds) issued by corporations, including variable
and floating rate instruments; some of such instruments may be supported by
letters of credit or subject to repurchase transactions. Under certain
conditions, as described in the Prospectus of the Funds, the Money Fund may
purchase securities of foreign branches of United States banks.
(2) High Income Fund. The objective of the High Income Fund is to realize a
high level of current income. The High Income Fund will invest primarily in a
diversified portfolio of high-yield, fixed-income securities (long-term debt and
preferred stock issues, including convertible securities) believed by the
Manager not to involve undue risk. The investments, commonly known as "junk
bonds," principally will be in the lower rating categories. However, this Fund
will not invest in securities in the lowest rating categories ("Ca" for Moody's
Investors Service, Inc. and "CC" for Standard & Poor's Corporation) or unrated
securities unless the Manager believes that the financial condition of the
issuer or the protection afforded to the particular securities is stronger than
would otherwise be indicated by such low ratings. Issuers of lower-rated or
unrated securities are generally not as financially secure or creditworthy as
issuers of higher-rated securities. The securities in which the High Income Fund
may invest, which may be considered to be speculative, may be subject to greater
market fluctuations and risk of loss of income and principal than
lower-yielding, higher-rated fixed income securities, while providing higher
yield than such securities. Owners should carefully assess the risks associated
with an investment in this Fund. For risk factors see the accompanying
Prospectus of the Funds under the heading "Investment Policies - High Income
Fund - Risk Factors."
(3) Bond Fund. The investment objective is also to earn a high level of
current income by investing primarily in a diversified portfolio of high yield
fixed-income securities. As a secondary objective, Bond Fund seeks capital
growth when consistent with its primary objective. As a matter of
non-fundamental policy, Bond Fund will, under normal market conditions, invest
at least 65% of its total assets in bonds. Bond Fund will invest only in
securities rated "Baa" or better by Moody's or "BBB" or better by Standard &
Poor's. However, Bond Fund is not obligated to dispose of securities if the
rating is reduced, and therefore will from time to time hold securities rated
lower than "Baa" by Moody's or "BBB" by Standard & Poor's.
(4) Strategic Bond Fund. The investment objective of Strategic Bond Fund is
to seek a high level of current income principally derived from interest on debt
securities and to enhance such income by writing covered call options on debt
securities. Although the premiums received by Strategic Bond Fund from writing
covered calls are a form of capital gain, the Fund will not make investments in
securities with the objective of seeking capital appreciation. The Fund intends
to invest principally in: (i) lower-rated high yield domestic debt securities;
(ii) U.S. Government securities, and (iii) foreign government and corporate debt
securities. Under normal circumstances, the Fund's assets will be invested in
each of these three sectors. However, Strategic Bond Fund may from time to time
invest up to 100% of its total assets in any one sector if, in the judgment of
the Manager, the Fund has the opportunity of seeking a high level of current
income without undue risk to principal. Accordingly, the Fund's investments
should be considered speculative. Distributable income will fluctuate as the
Fund assets are shifted among the three sectors.
(5) Capital Appreciation Fund. In seeking its objective of capital
appreciation, with income as a secondary objective, the Capital Appreciation
Fund will emphasize investments in securities of "growth-type" companies. Such
companies are believed to have relatively favorable long-term prospects for
increasing demand for their goods or services, or to be developing new products,
services or markets, and normally retain a relatively larger portion of their
earnings for research, development and investment in capital assets.
"Growth-type" companies may also include companies developing industrial
applications for recent scientific advances. The Capital Appreciation Fund may
also invest in cyclical industries and in "special situations" that present
opportunities for capital growth. "Special situations" are anticipated
acquisitions, mergers or other unusual developments which, in the opinion of
management, will increase the price of a security, regardless of general
business conditions or market movements. An additional risk is present in this
type of investment since the price of the security may be expected to decline if
the anticipated development fails to occur. The Capital Appreciation Fund may
depart from its policy and assume a defensive position by either (i) seeking
appreciation in equity securities other than those described above, or (ii)
investing in debt securities or cash and cash equivalents (identified above as
the types of instruments in which the Money Fund may invest). It is expected
that the emphasis of defensive security selection will be on debt securities
maturing in one year or less from the date of purchase, since such securities
usually may be disposed of quickly at prices not involving significant gains or
losses.
(6) Growth Fund. In seeking its objective of capital appreciation, Growth
Fund will emphasize investments in securities of well-known and established
companies. Such securities generally have a history of earnings and dividends
and are issued by seasoned companies (having an operating history of at least
five years, including predecessors). Current income is a secondary consideration
in the selection of Growth Fund's portfolio securities.
(7) Multiple Strategies Fund. The objective of the Multiple Strategies Fund
is to seek a high total investment return, which includes current income as well
as capital appreciation in the value of its shares. In seeking that objective,
the Multiple Strategies Fund may invest in equity securities (including common
stocks, preferred stocks, convertible securities and warrants), debt securities
(including bonds and U.S. government obligations) and cash and cash equivalents
(identified above as types of instruments in which the Money Fund may invest).
The composition of the Multiple Strategies Fund's portfolio among the different
types of permitted investments will vary from time to time based upon the
Manager's evaluation of economic and market trends and perceived relative total
anticipated return from such types of securities. Accordingly, there is neither
a minimum nor a maximum percentage of the Multiple Strategies Fund's assets that
may, at any given time, be invested in any of the types of investments
identified above. In the event future economic or financial conditions adversely
affect equity securities, it is expected that the Multiple Strategies Fund would
assume a defensive position by investing in debt securities (with an emphasis on
securities maturing in one year or less from the date of purchase), or cash and
cash equivalents.
The Capital Appreciation Fund and the Multiple Strategies Fund may each
purchase foreign equity securities only if they are listed on a domestic or
foreign securities exchange or are represented by American depository receipts
("ADRs") listed on a domestic securities exchange or traded on the
over-the-counter market, and will hold foreign currency only in connection with
the purchase or sale of foreign securities.
The High Income Fund and Multiple Strategies Fund may each invest in debt
obligations (which may be denominated in U.S. dollars or non-U.S. currencies)
issued or guaranteed by foreign corporations, certain supranational entities and
foreign governments or their agencies or instrumentalities, and in debt
obligations issued by U.S. corporations in non-currencies.
(8) Global Securities Fund. The objective of the Global Securities Fund is
to seek long-term capital appreciation. Current income is not an objective. In
seeking its objective, the Fund will invest a substantial portion of its
invested assets in securities of foreign issuers, "growth-type" companies,
cyclical industries and special situations which are considered to have
appreciation possibilities. The Fund has no restrictions on the amount of its
assets that may be invested in securities of foreign issuers, and thus the
relative amount of such investments will change from time to time. It is
currently anticipated that the Fund may invest as much as 80% or more of its
total assets in foreign securities. However, the Fund has undertaken that, with
certain exceptions, the Fund will have no more than 20% of its net assets
invested in securities of issuers located in any one country. In its operation,
the Global Securities Fund may utilize the following special techniques when
appropriate: hedging, borrowing money for investment in securities, short-term
trading, and investment up to 10% of the Fund's assets in illiquid securities.
The Fund is designed for investors who are willing to accept greater risks of
loss in hopes of greater gains and it is not intended for those who desire
assumed income and conservation of capital.
Management of the Oppenheimer Variable Account Funds
The Funds' Board of Trustees has general overall responsibility for the
management of each Fund under the laws of Massachusetts governing the
responsibilities of trustees of business trusts. Subject to the authority of the
Board of Trustees, Oppenheimer Funds, Inc. (the "Manager") is responsible for
overall management of the Funds' business. The Manager supervises the investment
operations of each Fund and the composition of its portfolio and furnishes
advice and recommendations with respect to investments, investment policies and
the purchase and sale of securities, pursuant to an investment advisory
agreement with each Fund (the "Agreements"). The Board monitors events for any
irreconcilable conflicts because both variable life and variable annuity
contracts invest in the Funds - see "Investment Restrictions of the Funds" in
the Funds' prospectus.
Subject to the authority of the Board of Trustees, the Manager is
responsible for overall management for the Funds' business affairs. The monthly
management fee payable to the Manager is computed based on the net asset value
of all the Funds as of the close of business each day at the annual rate of .50%
on the first $250 million of aggregate net assets, .45% on the next $50 million,
.40% on the next $100 million, .35% on the next $400 million and .30% on
aggregate net assets in excess of $800 million. Each Fund's share of the
management fee is determined by the ratio of its net assets to the aggregate net
assets of all the Funds. The Money Fund's management fee is then reduced by .05%
on the first $250 million of its net assets, no reduction on the next $3,750
million of net assets and .05% on net assets in excess of $4 billion of that
Fund. The High Income Fund pays an additional management fee to the Manager at
the annual rate of .15% of its net assets. For 1995, the management fees (after
expense reimbursement for High Income Fund) paid by the Money Fund, the High
Income Fund, the Capital Appreciation Fund, the Multiple Strategies Fund and the
Global Securities Fund, restated to reflect current management charges, equals
.45%, .75%, .74%, .74% and .74% of their average net assets respectively.
Current management charges for the Bond, Strategic Bond and Growth Funds are
.75%, .75% and .75% respectively.
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC.
Alliance Variable Products Series Fund, Inc. ("the Fund") is an open-end
series investment company designed to fund variable annuity contracts and
variable life insurance policies to be offered by the separate accounts of
certain life insurance companies. The Contracts use two of its fifteen separate
portfolios - the Growth and Income Portfolio and the Short-Term Multi-Market
Portfolio, both offered in 1990.
Each of the Alliance Portfolios has separate assets and liabilities and a
separate net asset value per share, and the value of an Accumulation Unit for a
Sub-Account is limited to the value of the shares of the Portfolio in which the
Sub-Account's assets are invested. Since market risks are inherent in all
securities to varying degrees, assurance cannot be given that the investment
objective of any of the Portfolios will be met.
The fundamental investment objective and policies of each Portfolio is as
follows:
(1) Growth and Income Portfolio. The Growth and Income Portfolio's
objective is reasonable current income and reasonable opportunity for
appreciation through investments primarily in dividend-paying common stocks of
good quality. It may invest whenever the economic outlook is unfavorable for
common stock investments in other types of securities, such as bonds,
convertible bonds, preferred stocks and convertible preferred stocks. The
Portfolio may also write covered call options listed on domestic securities
exchanges. The Portfolio engages primarily in holding securities for investment
and not for trading purposes. Purchases and sales of portfolio securities are
made at such times and in such amounts as are deemed advisable in the light of
market, economic and other conditions, irrespective of the volume of portfolio
turnover. Ordinarily the annual portfolio turnover rate will not exceed 100%.
(2) Short-Term Multi-Market Portfolio. The Short-Term Multi-Market
Portfolio seeks the highest level of current income, consistent with what the
Adviser considers to be prudent investment risk, that is available from a
portfolio of high-quality debt securities having remaining maturities of not
more than three years. The Portfolio seeks high current yields by investing in
debt securities denominated in the U.S. Dollar and a range of foreign
currencies. Accordingly, the Portfolio will seek investment opportunities in
foreign, as well as domestic, securities markets. While the Portfolio normally
will maintain a substantial portion of its assets in debt securities denominated
in foreign currencies, the Portfolio will invest at least 25% of its total
assets in U.S. Dollar-denominated securities. The Portfolio is designed for the
investor who seeks a higher yield than a money market fund and less fluctuation
in net asset value than a long-term bond fund.
Management of the Alliance Variable Products Series Fund, Inc.
Alliance Capital Management L.P. (the "Adviser"), a Delaware limited
partnership with principal offices at 1345 Avenue of the Americas, New York, New
York 10105, provides investment advice and, in general, conducts the management
and investment program of each of the Fund's Portfolios subject to the general
supervision and control of the Board of Directors of the Fund. The Adviser
provides investment advisory services and order placement facilities for each of
the Fund's Portfolios and pays all compensation of Directors and Officers of the
Fund who are affiliated persons of the Adviser. The Adviser or its affiliates
also furnish the Fund, without charge, management supervision and assistance and
office facilities and provide persons satisfactory to the Fund's Board of
Directors to serve as the Fund's officers. In 1995 the Portfolios paid the
Adviser at the following annual percentage rate of its average daily net asset
value: Growth and Income Portfolio, .63%; Short-Term Multi-Market, .80%.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND AND FUND II
Fidelity Variable Insurance Products Fund is an open-end, diversified
management investment company organized as a Massachusetts business trust on
November 13, 1981. The Fidelity Variable Insurance Products Fund II is also an
open-end, diversified, management investment company organized as a
Massachusetts business trust on March 21, 1988. The Contracts use two of the
separate Funsd - the Equity Income Portfolio and the Growth Portfolio from the
Variable Insurance Products Fund. The Contracts use all of the separate Funds
offers in the Variable Insurance Products Fund II; Investment Grade Bond
Portfolio, Asset Manager Portfolio and Index 500 Portfolio.
Each of the Fidelity Funds has separate assets and liabilities and a
separate net asset value per share, and the value of an Accumulation Unit for a
Sub-Account is limited to the value of the shares of the Portfolio in which the
Sub-Account's assets are invested. Since market risks are inherent in all
securities to varying degrees, assurance cannot be given that the investment
objective of any of the Portfolios will be met.
The fundamental investment objective and policies of each of the Funds is
as follows:
(1) Equity Income Portfolio. The investment objective of the Equity Income
Portfolio is to seek reasonable income by investing primarily in
income-producing equity securities. In choosing these securities the Investment
Adviser will also consider the potential for capital appreciation. The Fund's
goal is to achieve a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's 500 Composite Stock Price Index.
(2) Growth Portfolio. The investment objective of the Growth Portfolio is
to seek to achieve capital appreciation. The Adviser normally will purchase
common stocks for the Fund, although its investments are not restricted to any
one type of security. Capital appreciation may also be found in other types of
securities, including bonds and preferred stocks. The emphasis on a particular
security will depend on the Adviser's interpretation of underlying economic,
financial and security trends. The Fund does not place any emphasis on dividend
income from its investments except when the Adviser believes this income will
have a favorable influence on the market value of the security.
(3) Investment Grade Bond Portfolio. The investment objective of the
Investment Grade Bond Portfolio is to seek as high a level of current income as
is consistent with the preservation of capital. Under normal conditions, the
Adviser invests at least 65% of the Fund's total assets in investment-grade
fixed-income securities such as bonds, notes and debentures. The Fund's
dollar-weighted average portfolio maturity may not exceed ten years. The Fund
may purchase individual securities with maturities of more than ten years, as
long as its average maturity remains within this limit.
(4) Asset Manager Portfolio. The investment objective of the Asset Manager
Portfolio is to seek to obtain high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks, bonds and
short-term fixed-income instruments. The Adviser will normally allocate the
Fund's assets among the three asset classes within the following investment
parameters: 0-70% in short-term instruments; 20-60% in bonds (intermediate to
long-term debt securities); and 10-60% in stocks (equities).
(5) Index 500 Portfolio. The investment objective of the Index 500
Portfolio is to seek investment results that correspond to the total return
(i.e., the combination of capital changes and income) of common stocks publicly
traded in the United States, as represented by the Standard & Poor's Composite
Stock Price Index (the S&P 500 or Index), while keeping transaction costs and
other expenses low.
Management of the Fidelity Variable Insurance Products Fund and Fund II
Fidelity Management & research Company (the "Adviser") was founded in 1946,
with its principal business address at 82 Devonshire Street, Boston,
Massachusetts.
For the Equity Income and Growth Portfolios the annual fee rate is the sum
of two components: (1) a group fee rated based on the monthly average net assets
of all the mutual funds advised by FMR. This rate cannot rise above .52% and it
drops as total assets in all these funds rise; (2) an individual fund fee rate
of .20% for Equity Income Portfolios and .30% for Growth Portfolio. For the
Investment Grade Bond Portfolio's annual fee rate it is the sum of two
components: (1) a group fee based on the monthly average net assets of all the
mutual funds advised by FMR. The rate cannot rise above .37%, and it drops as
total assets in all these funds rise; (2) an individual fund fee rate of .30%.
One-twelfth of the combined annual fee rate is applied to the fund's net assets
averaged over the most recent month, giving a dollar amount which is the fee for
that month. For the Asset Manager Portfolio's annual fee rate it is the sum of
two components: (1) a group fee rate based on the monthly average net assets of
all the mutual funds advised by FMR. This rate cannot rise above .52% and it
drops as total assets in all these funds rise; (2) an individual fund fee rate
of .40%. One-twelfth of the combined annual fee rate is applied to the fund's
net assets averaged over the most recent month, giving a dollar amount which is
the fee for that month. The Index 500 Portfolio pays a monthly management fee to
FMR at the annual rate of .28% of the fund's average net assets. One-twelfth of
this annual fee rate is applied to the net assets over the most recent month,
giving a dollar amount which is the management fee for that month.
NORTHSTAR/NWNL TRUST
Northstar/NWNL Trust (the "Trust") is a Massachusetts business trust,
organized as an open-end, diversified, series, management investment company.
Currently the Trust offers four series comprising four separate investment
portfolios. The Contracts use two of the four separate portfolios - the Income
and Growth Fund and the High Yield Bond Fund.
Each of the Northstar Funds has separate assets and liabilities and a
separate net asset value per share, and the value of an Accumulation Unit for a
Sub-Account is limited to the value of the shares of the Portfolio in which the
Sub-Account's assets are invested. Since market risks are inherent in all
securities to varying degrees, assurance cannot be given that the investment
objective of any of the Portfolios will be met.
The fundamental investment objective and policies of each of the Funds is
as follows:
(1) Income and Growth Fund. The investment objective of the Income and
Growth Fund is to seek current income balance with the objective of achieving
capital appreciation. Under normal circumstances, the Fund will invest at least
65% of its total assets in income-producing securities. Securities are also
purchased on the basis of fundamental attraction regarding capital appreciation
prospects. In this way, income is "balanced" with capital. To achieve its
objective, the Fund will invest in common and preferred stocks of domestic and
foreign issuers that have prospects for dividend income and growth of capital,
as well as selected fixed-income securities of domestic and foreign private and
government issuers.
(2) High Yield Bond Fund. The investment objective of the High Yield Bond
Fund is to seek high income. Under normal market conditions, the Fund will seek
to achieve its investment objective by investing at least 65% of its total
assets in higher-yielding, lower-rated U.S. dollar-denominated debt securities,
which may involve high risk and are predominantly speculative n character. These
securities are commonly known as "junk bonds".
Management of the Northstar/NWNL Trust
Northstar Investment Management Corporation acts as the investment adviser
to each Fund. In this capacity, the Adviser, subject to the authority of the
Trustees, is responsible for furnishing continuous investment supervision to the
Funds and is responsible for the management of the Funds' portfolios. The
address of the Adviser is Two Pickwich Plaza, Greenwich, Connecticut 06830.
The Adviser's fee is accrued daily against the value of each Fund's net
assets and is payable by each Fund monthly. The fee is computed daily and
payable monthly, at an annual rate of .75 of 1% on the first $250 million of the
Fund's average daily net assets, scaled down to .55 of 1% for assets over $1
billion. This fee is higher than the fee paid by most funds for advisory
services.
Required Delivery of Mutual Fund Prospectus
No offer will be made of a Contract funded by any of the above Funds for
which a current prospectus of the Oppenheimer Variable Account Funds, the
Alliance Variable Products Series Fund, Inc., the Fidelity , or the Northstar
has not been delivered. An investor's order to purchase a Contract under a
Separate Account will be accepted only if the investor has received the current
prospectuses.
For more complete information about Oppenheimer Money Fund, Oppenheimer
Bond Fund, Oppenheimer Strategic Bond Fund, Oppenheimer Capital Appreciation
Fund, Oppenheimer Growth Fund, Oppenheimer High Income Fund, Oppenheimer
Multiple Strategies Fund, and/or Oppenheimer Global Securities Fund, including
management fees and other expenses and any risks associated with mixed and/or
shared funding, see the prospectus of the Oppenheimer Variable Account Funds.
For more complete investment policies and restrictions, information about the
Alliance Growth and Income Portfolio and the Alliance Short-Term Multi-Market
Portfolio, including investment policies and restrictions, management fees and
other expenses and any risks associated with mixed and/or shared funding, see
the prospectus of the Alliance Variable Product Series Fund, Inc. For more
complete information about Fidelity Equity Income Portfolio, Fidelity Growth
Portfolio, Fidelity Investment Grade Bond Portfolio, Fidelity Asset Manager
Portfolio and/or Fidelity Index 500 Portfolio, including management fees and
other expenses and any risks associated with mixed and/or shared funding, see
the prospectus of the Fidelity Variable Insurance Products Fund and Fund II. For
more complete investment policies and restrictions, information about the
Northstar Income and Growth Fund and/or the Northstar High Yield Bond Fund,
including investment policies and restrictions, management fees and other
expenses and any risks associated with mixed and/or shared funding, see the
prospectus of the Northstar/NWNL Trust. It is important to read each prospectus
carefully before you decide to invest. An additional copy of these prospectuses
may be obtained by writing to Bankers Security Life Insurance Society, 4601
Fairfax Drive, Arlington, Virginia 22203. Send no money.
PURCHASE OF CONTRACTS
Purchase Payments
This Prospectus offers individual flexible Purchase Payment Contracts which
provide for an initial Purchase Payment and for subsequent Purchase Payments, if
desired. However, the Contract Owner assumes no obligation to make additional
payments.
Investors in each Separate Account will be purchasing Accumulation Units
only of the Sub-Account which they have chosen and not shares of the Fund in
which that Sub-Account invests.
Bankers Security uses a "two day/five day" procedure for the pricing of the
initial Purchase Payments. The Purchase Payment, less any deduction for premium
taxes if applicable, is applied to purchase Accumulation Units not later than
two business days after receipt of the purchase order by Bankers Security if the
application and all information necessary for processing the purchase order is
complete. The Purchase Payment may be retained for the benefit of Bankers
Security up to five business days to complete an incomplete application. If the
information necessary to process an application within the five business days
cannot be obtained, Bankers Security will inform the applicant of the reason for
the delay and immediately return the payment unless applicant requests that
Bankers Security retain his money and application until it is made complete.
When it is complete, applicant's funds will be invested within two business
days.
The minimum initial Purchase Payment must accompany the application. The
initial minimum required for Separate Accounts P (non-qualified plans) and Q
(qualified plans) is: $1,000 and $250, respectively (except $100 initially will
be accepted for Separate Account P and $50 for Separate Account Q for all
automatic payment plans, such as payroll deduction and automatic bank check
plans). Subsequent Purchase Payments for Separate Accounts P and Q must be at
least $100 and $50, respectively, but may be waived by Bankers Security. The
purchaser is cautioned that investment return on smaller Purchase Payments may
be less because of certain charges assessed by Bankers Security. (See "Charges
and Other Deductions," page 19.) A payment may not exceed $250,000 without the
Company's consent.
Allocation of Net Purchase Payments
Purchase payments, after deductions for any applicable premium taxes, will
be allocated among the Sub-Accounts for the designated Separate Account, in
accordance with the allocation percentage specified by the Contract Owner. If no
allocation is indicated, the total initial purchase payment is allocated to the
Oppenheimer Money Fund and notification is given to the Owner. The percentage
allocation of future Purchase Payments may be changed by the owner at any time
prior to the Annuity Commencement Date by providing written notice to Bankers
Security at its Executive Office or other designated office. (For a discussion
of transfer rights between Funds, see "Transfers Between Sub-Accounts," page
23.) Purchase payments, after any applicable premium tax deductions, may also be
allocated to the Fixed Account (see "Fixed Account" at page 35).
Immediate Variable Annuities
Initial payments allocated to the Separate Accounts for immediate variable
annuities will be credited, after deductions for any applicable premium taxes
(See "Charges and Other Deductions," page 19), to the Contract Owner's
Individual Account and will be converted to Annuity Units (see "Annuity Period,"
page 25).
CHARGES AND OTHER DEDUCTIONS
A. Contingent Deferred Sales Charge (Surrender Charge)
No deduction for a sales charge is made from the Purchase Payments for
these Contracts. However, a contingent deferred sales charge, when applicable,
will be used to help defray expenses relating to the sale of the Contracts,
which include commissions paid to sales personnel, the cost of preparation of
sales literature and other promotional activity (for recovery of any shortfall,
see page 21, "Mortality and Expense Risk Charges"). Commissions paid on the sale
of these Contracts do not exceed 6% of the Purchase Payments. This does not
include any payments the Company may make to Wholesalers.
During the Accumulation Period, prior to receiving an annuity, a Contract
Owner may make as many Purchase Payments as desired. Each Purchase Payment is
treated separately to figure out if any surrender charge is due upon a partial
or complete withdrawal. Any surrender charge imposed upon a withdrawal of
Purchase Payments is on a "first in - first out" basis. The charge, if it
applies, is as follows:
1. Any Purchase Payment left in this Contract for 96 months or longer is
not subject to a surrender charge.
2. During the first 96 months after a Purchase Payment is made under the
Contract, a partial or complete surrender of that Payment will be charged a
surrender charge, the amount depending upon the length of time the Purchase
Payment was in the Contract. The surrender charge imposed in connection with
partial surrenders will be deducted from the Accounts on a pro-rata basis unless
instructed otherwise by the Contract Owner.
Percentage of Purchase
Length of Time Purchase Payments Withdrawn in
Payment was Left Excess of the "No
in Contract Charge Amount"
----------------------- -------------------
Years
0-1 7%
1-2 7
2-3 6
3-4 5
4-5 4
5-6 3
6-7 2
7-8 1
8 and thereafter 0
3. If a "first-in" Purchase Payment is fully withdrawn, these rules apply
to the next-in Purchase Payment made under the Contract and continue thereafter
in this manner. The surrender charge only applies to Purchase Payments made
under the Contracts. If the total of the Contract Owner's Purchase Payments have
been withdrawn, which may or may not have been subject to surrender charges, the
Contract may have value from accumulated earnings. There is no surrender charge
on these earnings.
4. The surrender charge at the percentage listed above also applies at the
time annuity payments begin unless (a) the first annuity payment begins after
the fourth Contract year; (b) the first annuity payment begins after the second
Contract year and the Annuitant has attained age 59 1/2 at such time; or (c)
annuity payments are being made as part of the death proceeds during the
Accumulation Period or as part of a distribution upon death of the Annuitant or
the Contract Owner during the Accumulation Period; or (d) this Contract is an
immediate annuity, i.e., annuity payments are starting at a date no more than
approximately 31 days after the Contract is issued.
The tax code places (with certain exceptions) an additional IRS tax penalty
on withdrawals prior to age 59 1/2. (See "Federal Income Tax Status - Penalty
Tax on Surrenders or Withdrawals," page 29). That amount, if applicable, would
be separate and distinct from the contingent deferred sales charge. The
Contracts may be sold without a contingent deferred sales charge to directors,
officers, and bona fide full-time employees of Bankers Security and its
affiliated insurance companies, Oppenheimer Fund Management, Inc., Oppenheimer
Management Corporation, Alliance Capital Management Corporation, Alliance
Capital Management L.P., Fidelity Management & Research Company, and Northstar
Investment Management Corporation, who qualify under rules adopted by the
Securities and Exchange Commission. If applicable, such sales will be made only
upon the written assurance of the purchaser that the purchase is made for
investment purposes and that the Contract will not be sold or assigned except
through surrender to Bankers Security.
B. Surrenders Without Charge (The "No Charge Amount")
After a Purchase Payment has been in the Contract for 12 months, a Contract
Owner may surrender, during each Contract Year, up to 10% of that Purchase
Payment without a surrender charge. However, such "no fee" withdrawals may be
subject to a penalty tax under the Internal Revenue Code. "No charge amounts"
are fixed at 10% of the Purchase Payment and are cumulative up to 20%. For
example, if in a particular year, the withdrawal option is not exercised, the
"free" withdrawal for the next year is up to 20%. Withdrawals of more than 10%
(except where the 20% cumulative withdrawal right applies) are subject to a
surrender charge, if applicable (see chart below).
<PAGE>
ILLUSTRATION OF WITHDRAWAL RIGHTS FOR EACH PURCHASE PAYMENT
(Assumes $10,000 Purchase Payment And Withdrawals of $1,000
(10%) every 12 months)
Percentage and Amount
of Purchase Payment
Length of Time that may be withdrawn
Each Purchase Payment each 12 months without Amount and Rate Subject
left in Contract a Surrender Charge to a Surrender Charge
Years % Amount Amount Rate
0-1 0% 0 10,000 7%
1-2 10 1,000 9,000 7
2-3 10 1,000 8,000 6
3-4 10 1,000 7,000 5
4-5 10 1,000 6,000 4
5-6 10 1,000 5,000 3
6-7 10 1,000 4,000 2
7-8 10 1,000 3,000 1
8 and thereafter 100 Total -- 0
Contract
Value
C. Mortality and Expense Risk Charges
Although the amount of the annuity payment made to an Annuitant will vary
in accordance with the investment performance of the Sub-Account, it will not be
affected by the mortality experience (death rate) of persons receiving such
payments or of the general population. Bankers Security assumes this "mortality
risk" by virtue of annuity rates incorporated in the Contracts which cannot be
changed.
The mortality risk assumed by Bankers Security arises from its obligation
to continue to make annuity payments, determined in accordance with the annuity
tables and other provisions of the Contracts, to each Annuitant regardless of
how long he lives and regardless of how long all payees as a group live. This
assures an Annuitant that neither his own longevity nor an improvement in life
expectancy generally will have any adverse effect on the annuity payments he
will receive under the Contract, and relieves the Annuitant of the risk that he
will outlive the funds that he has accumulated for retirement.
In addition, Bankers Security assumes the risk that the charges for
administrative expenses may not be adequate to cover such expenses and assures
that it will not increase the amount charged for administrative expenses. In
consideration for its assumption of these mortality and expense risks, Bankers
Security deducts an amount equal on an annual basis to 1.25% of the daily asset
value of the Sub-Accounts of each Separate Account (approximately 1.00% for
mortality and .25% for expenses). As a percentage of average net assets, the
mortality and expense risk charge this year is expected to be 1.25%.
If the charge is insufficient to cover the actual cost of the mortality and
expense risks, the loss will fall on Bankers Security; conversely, if the
deduction proves more than sufficient, the excess will be a profit to Bankers
Security. Any profits resulting to Bankers Security from the mortality and
expense risk charges can be used by Bankers Security for any business purpose,
including, among other things, the payment of distribution, sales and other
expenses to the extent that the contingent deferred sales charge may not be
sufficient to recover these costs.
D. Contract Maintenance Charge
Each year on the Contract Anniversary, Bankers Security will deduct an
annual contract maintenance charge of $30 from the Contract Value to reimburse
its expenses relating to maintenance of the Contract. In this respect Bankers
Security, among other things, establishes and maintains records, and provides
reports to Contract Owners. This charge is designed only to reimburse Bankers
Security for such maintenance expenses and Bankers Security does not expect to
recover from this charge any amount in excess of accumulative expenses. In any
Contract year when the Contract is surrendered for its full value on other than
the Contract Anniversary, the Contract maintenance charge will be deducted at
the time of such surrender. The amount of the maintenance charge under the
Contract is contractual and may not be changed by Bankers Security. If an
individual has more than one Contract in The USA Plan, the $30 charge will be
charged on only one Contract. Each participant in a qualified plan is charged
the contract maintenance charge.
E. Premium Taxes
Any applicable premium tax will be deducted when incurred. Premium taxes
imposed by some states or municipalities presently range from 0% to 3.5% and may
be imposed at the time a payment is made or at the Annuity Commencement Date.
When permitted by state law, it is Bankers Security's policy to postpone the
computation and deduction of premium taxes until the Annuity Commencement Date.
The amount of any applicable premium taxes will then be deducted from the
accumulated value under the Contract; otherwise, such taxes will be deducted
from Purchase Payments when received. If any premium taxes are deducted, but are
subsequently determined not due, Bankers Security will apply the amount
previously deducted to increase the number of Accumulation Units or Annuity
Units under the Contract at the time the determination is made. If premium taxes
are deducted but the amount deducted is subsequently determined to be
insufficient, or if no premium tax was deducted but is subsequently determined
due, Bankers Security reserves the right to reduce the Accumulation Units or
Annuity Units under the Contract by the amount of the tax due. Please see
Appendix A to the Statement of Additional Information for the table of premium
taxes by state.
F. Other Charges
Charges for investment management are paid out of the assets of the Funds.
(See "Management of the Oppenheimer Variable Account Funds," page 15,
"Management of the Alliance Variable Products Series Fund, Inc.," page 16,
"Management of the Fidelity Variable Insurance Products Fund and Fund II" page
17, see "Management of the Northstar/NWNL Trust," page 18, and each of the
Fund's prospectuses.)
ACCUMULATION PERIOD-DEFERRED VARIABLE ANNUITIES
A. Crediting Accumulation Units
During the Accumulation Period, Purchase Payments on deferred Variable
Annuity Contracts, after deductions for any premium taxes, where applicable (See
"Charges and Other Deductions," page 19), are credited to the Contract Owner's
account in the form of Accumulation Units. The number of Accumulation Units
credited to a Contract Owner for the Sub-Account is determined by dividing the
net Purchase Payment allocated to the Sub-Account by the value of an
Accumulation Unit for the Sub-Account for the Valuation Period during which the
Purchase Payment is received by Bankers Security at its principal office.
The value of the Contract Owner's Individual Account varies with the value
of the assets of the Sub-Account and the performance of the chosen Fund of the
Oppenheimer, Alliance, Fidelity and Northstar Funds. There is no assurance that
the value of a Contract Owner's Individual Account will equal or exceed purchase
payments. The value of a Contract Owner's Individual Account for a Valuation
Period can be determined by multiplying the total number of Accumulation Units
credited to his account for the Sub-Account by the value of an Accumulation Unit
for the Sub-Account for that Valuation Period and adding the value of the
Sub-Accounts.
B. Value of an Accumulation Unit
The value of an Accumulation Unit of the Sub-Accounts was arbitrarily set
initially at $1.00. The value of an Accumulation Unit for any subsequent
Valuation Period is determined by multiplying the value of an Accumulation Unit
for the immediately preceding Valuation Period by the net investment factor, as
described below, for the Valuation Period for which the Accumulation Unit Value
is being calculated (see Appendix 1, Example B on page A-1). The value of an
Accumulation Unit for the Sub-Account may increase or decrease from Valuation
Period to Valuation Period and will be affected by, among other things, the
investment performance of the Funds and their expenses.
Net Investment Factor
The net investment factor for the Sub-Account for any Valuation Period is
determined by dividing (a) by (b) and subtracting (c) from the result, where (a)
is the result of:
(1) the net asset value per share of the Fund invested in by the
Sub-Account determined at the end of the current Valuation Period, plus
(2) the per share amount of any dividend or capital gains distributions
made by the corresponding Fund if the "ex-dividend" date occurs during the
current Valuation Period, minus or plus
(3) a per share charge or credit for any taxes reserved for, which is
determined by Bankers Security to have resulted from the maintenance of the
Sub-Account (see "Federal Income Tax Status," page 24).
(b) is the net result of:
(1) the net asset value per share of the corresponding Fund determined as
of the end of the immediately preceding Valuation Period, minus or plus
(2) the per share charge or credit for any taxes reserved for the
immediately preceding Valuation Period (see "Federal Income Tax Status," page
28).
(c) is a factor representing the charges deducted for mortality and expense
risks (See "Charges and Other Deductions Mortality and Expense Risk Charges,"
page 21). The net investment factor may be greater or less than one; and,
therefore, the value of an Accumulation Unit for the Sub-Account may increase or
decrease. (For an illustration of this calculation, see Appendix 1, Example A on
page A-1.)
C. Death Benefit When Annuitant or Contract Owner Dies During the
Accumulation Period.
If the Annuitant or Contract Owner dies prior to the Annuity Commencement
Date generally the Contract ends. A payment will be made by Bankers Security
under the terms of the Contract upon receipt of due proof of the death of the
Annuitant or Contract Owner. The amount of the payment will be determined as of
the Valuation Date on or next following the date on which due proof of death is
received by Bankers Security at its Executive Office or other designated office.
During the first eight years of the Contract, the death benefit will be the
greater of (1) the sum of all Purchase Payments (gross, prior to any deductions
or charges) made under an individual Contract less any amounts surrendered, or
(2) the Accumulated Value. After you have been in the Contract for more than
eight years, we will determine your accumulated value on the eighth anniversary
of your Contract, and on each eighth anniversary thereafter, until the Annuitant
or Owner reaches 75 years of age. If your contract is in force for eight years
or longer, and if permitted by state and/or federal law, the amount of the death
benefit will be the greater of (1) the sum of all Purchase Payments (gross,
prior to any deductions or charges) made under an individual Contract less any
amounts surrendered, or (2) the Accumulated Value, or (3) the Accumulated Value
as of the last eighth year Contract anniversary date occurring prior to the
Annuitant's or Owner's 75th birthday, less any amounts surrendered after that
last eighth year Contract anniversary date.
If the Contract Owner did not elect payment of the death benefit under one
of the Annuity Options prior to the Annuitant's death, the Beneficiary may elect
to have the death benefit paid in a single sum or applied to provide an annuity
under one of the Annuity Options or as otherwise permitted by Bankers Security.
If a single sum settlement is requested, the proceeds will be paid within seven
days of receipt of such election and due proof of death. If an Annuity Option is
desired, election may be made by the Beneficiary during a ninety day period
commencing with the date of receipt of notification of death. If such an
election is not made, a single sum settlement will be made to the Beneficiary at
the end of such ninety day period. If an Annuity Option is elected, the Annuity
Commencement Date shall be the date specified in the election but no later than
ninety days after receipt by Bankers Security of notification of death. No
deduction is made for sales or other expenses upon the election of an Annuity
Option.
D. Transfers Between Sub-Accounts
During the Accumulation Period under deferred annuity Contracts, Contract
Owners may transfer within either Separate Account P or within Separate Account
Q a portion or all of a Sub-Accounts Accumulated Value from one Sub-Account to
another Sub-Account within that Separate Account without payment of any fee or
charge subject to the following conditions: (a) the dollar amount of a transfer
from any one Sub-Account may not be less than $250 except that an entire
Sub-Account Accumulated Value may be transferred if less than $250; and (b) no
transfer may be made after the Annuity Commencement Date or the date of receipt
by Bankers Security of notification of death of the Annuitant prior to the
Annuity Commencement Date. Normally, such transfers shall be made as of the end
of the Valuation Period during which the request for transfer is received by
Bankers Security at its Executive Office or other designated office, or a later
Valuation Period if requested. However, such transfers may be delayed by Bankers
Security up to five business days if it determines that the Sub-Account would be
disadvantaged by the transfer into it of the Accumulated Value. Bankers Security
in its discretion reserves the right to refuse or reduce any transfer request
that will disadvantage a Sub-Account.
A transfer may be made by either: (1) submitting a written request to
Bankers Security at its Executive Office or other designated office, or (2)
telephone exchange instructions to Bankers Security by the Contract Owner or the
broker of record for an account, if Bankers Security has received an Application
or Telephone Exchange Form authorizing telephone exchanges for the account. The
amount of the Accumulated Value transferred may be less than the amount
requested if the amount requested would be subject to a restriction cited above.
Bankers Security reserves the right to reject telephone or written requests
submitted in bulk on behalf of 10 or more accounts, and also reserves the right
to amend, suspend or discontinue this privilege at any time without prior
notice. No telephone transfers are permitted in states where they are not
allowed. To place a telephone transfer request, call Bankers Security at
1-800-338-7737. Telephone transfers may be recorded by Bankers Security.
Telephone transfers are subject to the rules described above. If all telephone
transfer lines are busy (which might occur, for example, during periods of
substantial market fluctuations) Contract Owners might not be able to request
telephone transfers and would have to submit written requests.
E. Dollar Cost Averaging
A Dollar Cost Averaging program is available to Contractholders who want to
automatically transfer, at regular intervals, specified dollar amounts from any
one Sub-Account or the Fixed Account to any other investment options available
under the Contract.
This feature is available at the time of initial purchase of the Contract
or thereafter during the accumulation period. The Contract owner specifies a
dollar amount of Contract value in the Account to be automatically transferred
on a monthly basis to the other available variable or fixed account investment
options. The minimum transfer amount is $100, but this may be divided and
allocated into two or more accounts. Transfers are not available if the
Sub-Account or Fixed Account has less than $100 of value.
Dollar Cost Averaging may also be selected for 12, 24 or 36 month periods.
The total Fund Account value at the time this method is selected must be at
least $5,000 for the 12 month period and at least $10,000 for the 24 or 36 month
period. Transfers will be made on a monthly basis into available investment
options offered by the Contract, as selected by the owner, and in the amount(s)
designated by the owner. A minimum transfer of $100 is required, and this amount
may also be allocated among the variable and fixed account options.
Transfers under the Dollar Cost Averaging program will be made on the first
business day of each month based on a valuation of the unit accumulation values
of the accounts involved as of that day, provided the New York Stock Exchange is
open on that valuation date. If the Exchange is closed, valuation will be
determined in the same manner described above as of the next day the Exchange is
open.
The Dollar Cost Averaging program is elected by the owner completing an
Automated Dollar Cost Averaging Form and returning it to the Company. We require
20 days after receipt to begin the program for the Contract Owner.
Dollar Cost Averaging will terminate upon any of the following events: (1)
the designated number of transfers are completed; (2) the Contract value in the
designated Sub-Account or Fixed Account falls below $100 or is insufficient to
complete the next transfer for the amount designated by the owner; (3) the owner
requests termination in writing; in this event termination of the Dollar Cost
Averaging program will occur 20 days after the Company receives the termination
notice; or (4) surrender of the Contract.
Dollar Cost Averaging may be reinstated or changed, subject to the
above terms, as of the end of 20 days after the Company receives a new election
form.
F. Systematic Withdrawal Program
During the Accumulation Period a Contractholder may elect, in writing, to
take systematic withdrawals from one or more of the Sub-Accounts. The
withdrawals may occur monthly, quarterly, semi-annually or annually, but the
amount to be systematically withdrawn must be at least $100. Withdrawals up to
the "No Charge Amount" (see page 20) would not be subject to any contractual
surrender charges. Additional withdrawals are subject to such charges. The Owner
may choose to withdraw a specified dollar amount or a percentage of the Contract
Value.
Systematic payments will be made within the first ten business days of the
month. To begin the program, Bankers Security needs to receive your written
request by the first day of the month. The program may be cancelled by the Owner
at any time by written notice to the Company. After a five (5) day notice to you
the program will automatically be cancelled by the Company should the Contract
Value fall below $250.
G. Surrender and Termination
A Contract Owner, during the Accumulation Period under a deferred annuity
Contract, may elect, at any time before the earlier of the Annuity Commencement
Date or the death of the Annuitant, to surrender the Contract for all or any
part of his Individual Account. Participants in Tax-Sheltered Annuities (IRC
Section 403(b) Plans) and in the Texas Optional Retirement Program are subject
to the restrictions thereunder concerning the payment of amounts surrendered
(see "Tax-Sheltered Annuities" and "Texas Optional Retirement Program," pages 31
and 33). The Company will, upon receipt of a request for a partial surrender,
redeem a number of Accumulation Units necessary to equal the dollar amount
requested, plus any applicable contingent deferred sales charge, contract
maintenance charge and premium taxes. For complete surrenders, the entire
contract value will be surrendered, the said applicable charges deducted, and
the balance sent to the Contract Owner. (See "Charges and Other Deductions,"
page 19). The value of the Accumulation Units under a partial surrender and of
the Contract Value under a complete surrender will be determined as of the end
of the Valuation Period during which the written request is received by Bankers
Security at its Executive Office. Payment of proceeds in connection with a
partial or complete surrender will generally be made within seven days after
receipt of request for a surrender. Postponement of payments may occur in
certain circumstances. (See "Time of Payments," page 27). (For information as to
Federal tax consequences resulting from surrenders, see "Federal Income Tax
Status," page 28; for information as to State premium tax consequences, see
"Premium Taxes," page 22 and Appendix A of the Statement of Additional
Information.)
ANNUITY PERIOD
A. Commencement Date
Annuity payments will begin on the maturity date of the Contract which is
the first day of the calendar month following the Annuitant's 85th birthday, or
10 years after the Contract Issue Date if later, if permitted by applicable
state law, or on an earlier Annuity Commencement Date as selected by the
Contract Owner. Not later than 30 days prior to the Annuity Commencement Date,
the Contract Owner may elect in writing to advance or defer the Annuity
Commencement Date.
B. Annuity Options
The Contract Owner may, at any time at least 30 days prior to the Annuity
Commencement Date upon written notice to Bankers Security at its Executive
Office, elect to have payments made under any one of the Annuity Options
provided in the Contract. If one of the Annuity Options is not selected by the
Contract Owner at least 30 days prior to the Annuity Commencement Date, the
amounts held under the Contract on the date of maturity will automatically be
applied to provide a variable joint and one-half to survivor life annuity under
Option 2c described below.
On the Annuity Commencement Date, Bankers Security shall apply the
Accumulated Value, reduced by any applicable premium taxes not previously
deducted, to provide a Variable Annuity, a Fixed Annuity, or any combination
thereof, as elected by the Contract Owner.
The Contracts provide for the four Annuity Options described below. The
payments under the Annuity Options may be fixed, variable, or any combination
thereof, as determined by the Contract Owner, except for Option 4 under which
the payments must be variable.
Option 1 - Life Annuity - An annuity payable during the lifetime of the
Annuitant, ceasing with the last payment due prior to the death of the
Annuitant. If this Option is elected, annuity payments terminate automatically
and immediately upon the death of the Annuitant without regard to the number or
total amount of payments received. (For example, if the Annuitant dies before
the due date of the second payment, no further payments will be made).
Generally, however, the monthly payment amount during the Annuitant's lifetime
is greater under Option 1 than the monthly payment amount where payments for a
guaranteed number of months (Option 3) has been selected.
Option 2a - Joint and 100% Survivor Life Annuity - An annuity payable
monthly during the joint lifetime of the Annuitant and the Joint Annuitant and
continuing thereafter at the same amount during the lifetime of the survivor,
ceasing with the last payment due prior to the death of the survivor.
Option 2b - Joint and Two-Thirds to Survivor Life Annuity - An annuity
payable monthly during the lifetime of the Annuitant and the Joint Annuitant and
continuing thereafter during the lifetime of the survivor at an amount equal to
two-thirds of the joint annuity payment, ceasing with the last payment due prior
to the death of the survivor.
Option 2c - Joint and One-Half to Survivor Life Annuity - An annuity
payable monthly during the joint lifetime of the Annuitant and the Joint
Annuitant and continuing thereafter during the lifetime of the survivor at an
amount equal to one-half of the joint annuity payment, ceasing with the last
payment due prior to the death of the survivor.
Under Options 2a, 2b, 2c, annuity payments terminate automatically and
immediately on the deaths of both the Annuitant and the Joint Annuitant without
regard to the number or total amount of payments received, even if only one
payment has been received.
Option 3 - Life Annuity with 60, 120 or 240 Monthly Payments Guaranteed -
An annuity payable monthly during the life of the Annuitant with the guarantee
that if, upon the death of the Annuitant, annuity payments have been made for
less than 60, 120 or 240 monthly periods, as elected, payments will be made as
follows:
1. Any guaranteed annuity payments will be continued during the remainder
of the selected period to the Beneficiary. The Beneficiary may, at any time,
elect to have the present value of the unpaid guaranteed number of annuity
payments commuted in the manner specified in 2 below, paid in a lump sum.
2. If a Beneficiary receiving annuity payments under this Option dies after
the death of the Annuitant, the present value, computed as of the Valuation
Period in which notice of death of the Beneficiary is received by Bankers
Security at its Executive Office, of the guaranteed number of annuity payments
remaining after the receipt of such notice and to which such deceased
Beneficiary would have been entitled had he not died, commuted at the effective
annual interest rate, assumed in determining the Annuity Tables contained in the
Contract, shall be paid in a lump sum in accordance with the Contract.
Option 4 - Unit Refund Life Annuity - An annuity payable monthly during the
lifetime of the Annuitant, terminating with the last payment due prior to the
death of the Annuitant. An additional annuity payment will be made to the
Beneficiary equal to the value of an Annuity Unit Value of the Separate Account
as of the date that notice of death in writing is received by Bankers Security
at its Executive Office, multiplied by the excess if any, of (a) over (b) where:
(a) is the net Accumulated Value allocated to Sub-Accounts and applied under the
Option at the Annuity Commencement Date, divided by the corresponding Annuity
Unit Value as of the Annuity Commencement Date, and (b) is the product of the
number of Annuity Units applicable under the Sub-Account represented by each
annuity payment and the number of annuity payments made. The additional payment
will be equal to the combined results, if any, for the Separate Account. (For an
illustration of this Option see Appendix II on page A-2.)
C. Allocation of Annuity
The Contract Owner may elect to have the net Accumulated Value, as
determined below in Paragraph E, applied at the Annuity Commencement Date to
provide a Fixed Annuity, a Variable Annuity, or any combination thereof. Such
elections must be made, or modified if previously made, in writing to Bankers
Security at its Executive Office or other designated office, at least 30 days
prior to the Annuity Commencement Date. After the Annuity Commencement Date,
redemptions are not allowed.
D. Value of an Annuity Unit
For the Separate Accounts, the value of an Annuity Unit was arbitrarily set
initially at $1.00. The value of an Annuity Unit for any subsequent Valuation
Period is determined by multiplying the value of the Annuity Unit for the
immediately preceding Valuation Period by the net investment factor (see
"Accumulation Period - Deferred Variable Annuities: Net Investment Factor," page
22) for the Valuation Period for which the value of the Annuity Unit is being
calculated, and multiplying the result by an interest factor to offset the
effect of an investment earnings rate of 3.5% per annum, which is assumed in the
Annuity Tables contained in the Contract. (For an illustration of this
calculation see Appendix III, Example A, on page A-2.)
E. Frequency and Amount of Annuity Payments
When annuity payments are to commence, the Accumulated Value to be applied
to a Variable Annuity Option will be determined by multiplying the value of an
Accumulation Unit for the Valuation Date on or immediately preceding the seventh
day before the Annuity Commencement Date by the number of Accumulation Units
owned. This seven day period is used to permit calculation of amounts of annuity
payments and mailing of checks in advance of the due date. At that time any
applicable premium taxes not previously deducted will be deducted from the
Accumulated Value to determine the net Accumulated Value. The resultant value is
then applied to the Annuity Tables set forth in the Contract to determine the
amount of the monthly installment for each $1,000 of accumulated value applied.
These Annuity Tables vary according to the Annuity Option selected by the
Contract Owner and according to the sex and adjusted age of the Annuitant and
any joint Annuitant at the Annuity Commencement Date. The Contract contains a
formula for determining the adjusted age, and the Annuity Tables are determined
from the Progressive Annuity Table assuming births in the year 1900 and a net
investment rate of 3.5% per annum.
Because statistically women as a class live longer than men, the annuity
payout rates for women under Annuity Tables which differentiate between men and
women are less, at the same age, than they are for men. On July 6, 1983, the
United States Supreme Court ruled that employer-based retirement benefits
derived from contributions made after August 1, 1983 may not differentiate
between men and women. In calculating benefits derived from contributions made
after August 1, 1983 for employer-based retirement plans funded by Contracts
offered by this prospectus, we will not use values which differentiate between
men and women. We will increase the guaranteed annuity payment rates in the
Annuity Tables for women so that they will equal the guaranteed annuity rates
for men. However, we will continue to use Annuity Tables which differentiate
between men and women for Contracts which are not associated with employer-based
retirement plans.
The dollar amount of the first monthly payment of a Variable Annuity,
determined as above, is divided by the value of an Annuity Unit for the
Sub-Account for the Valuation Date on or immediately preceding the seventh day
before the Annuity Commencement Date to establish the number of Annuity Units
representing each monthly payment under the Sub-Account. This seven day period
is used to permit calculation of amounts of annuity payments and mailing of
checks in advance of the due date. This number of Annuity Units remains fixed
for all variable annuity payments. The dollar amount of the second and
subsequent variable annuity payments is determined by multiplying the fixed
number of Annuity Units for the Sub-Account by the applicable value of an
annuity unit for the Valuation Date on or immediately preceding the seventh day
before the due date of the payment. The value of an Annuity Unit is determined
on each Valuation Date and will vary with the investment performance of the
Fund, and, therefore, the dollar amount of the second and subsequent variable
annuity payments may change from month to month. (For an illustration of the
calculation of the first and subsequent Variable Payments, see Appendix III,
Examples B, C, and D on page A-3.)
If the net Accumulated Value on the Annuity Commencement Date is less than
$2,000, Bankers Security may pay such value in one sum in lieu of annuity
payments. If the net Accumulated Value is not less than $2,000 but the annuity
payments provided for would be or become less than $20, Bankers Security may
change the frequency of annuity payments to such intervals as will result in
payments of at least $20.
F. Assumed Investment Rate
A 3.5% assumed investment rate is built into the Annuity Tables in the
Contract. This is based on Bankers Security's opinion that it is the average
investment result to be expected from a diversified portfolio of securities
during a relatively stable economy. A higher assumption would mean a higher
initial payment but more slowly rising and more rapidly falling subsequent
variable annuity payments. A lower assumption would have the opposite effect. If
the actual net investment rate of the Sub-Account is at the annual rate of 3.5%,
the variable annuity payments will be level.
MISCELLANEOUS CONTRACT PROVISIONS
A. Time of Payments
All payments due under the Contracts will ordinarily be made within seven
days of the payment due date or within seven days after the date of receipt of a
request for a partial surrender or termination. However, Bankers Security
reserves the right to postpone payment of any amounts derived from Purchase
Payments paid by check or bank draft until Bankers Security is reasonably
assured that the check or draft has cleared, normally thirty days from the date
of receipt of the check or draft. Bankers Security further reserves the right to
suspend or postpone the date of any payment due under the Contracts (1) for any
period during which the New York Stock Exchange is closed (other than customary
weekend and holiday closings) or during which trading on the Exchange, as
determined by the Securities and Exchange Commission (the "Commission"), is
restricted, (2) for any period during which an emergency, as determined by the
Commission, exists as a result of which disposal of securities held in the
Separate Account is not reasonably practical or it is not reasonably practical
to determine the value of the Separate Account's net assets; or (3) for such
other periods as the Commission may by order permit for the protection of
security holders or as may be permitted under the Investment Company Act of
1940.
B. Right to Examine Contract
Any Contract Owner may revoke the Contract at any time between the date of
application and the date 20 days after receipt of the Contract. In order to
revoke the Contract, it must be mailed or delivered (if it has already been
received), to the agent through whom the Contract was purchased, or to the
Executive Office of the Company at 4601 Fairfax Drive, Arlington, Virginia
22203. Mailing or delivery must occur on or before 20 days after receipt of the
Contract for revocation to be effective.
Upon revocation, Bankers Security will pay, unless otherwise required by
state and/or federal law, the Contract Value for the Contract based on the
accumulation unit value as of the close of the business day when the contract is
received at Bankers Security's Executive Office. The liability of the Separate
Account under this provision is limited to the Contract Owner's Accumulated
Value in the Separate Account on the date of receipt.
C. Amendment of Contract
Contracts may be amended to conform to changes in applicable law or
interpretations of applicable law, or to accommodate design changes. Changes in
the Contract may need to be approved by Contract Owners and state insurance
departments.
D. Reports to Contract Owners
Bankers Security will mail to each Contract Owner, at the last known
address of record, at least annually, a report containing such information as
may be required by any applicable law or regulation and a statement of the
Accumulation Units credited to the Contract for the Sub-Accounts and the values
of the Accumulation Unit. In addition, latest available reports of the Fund
invested in by the Sub-Account will be mailed to each Contract Owner.
E. Assignment
Any amounts payable under the Contracts may not be commuted, alienated,
assigned or otherwise encumbered before they are due. To the extent permitted by
law, no such payments shall be subject in any way to any legal process to be
used for payment of any claims against any Annuitant, joint annuitant or
Beneficiary. Separate Account P Contracts may be assigned. Separate Account Q
Contracts may not be assigned.
F. Substitution of Fund Shares
Although Bankers Security believes it to be highly unlikely, it is possible
that in the judgment of its management, one or more of the Funds may become
unsuitable for investment by Contract Owners because of a change in investment
policy, or a change in the tax laws, or because the shares are no longer
available for investment. In that event, Bankers Security may seek to substitute
the shares of another Fund or the shares of an entirely different mutual fund.
Before this can be done, the approval of the Securities and Exchange Commission,
and possibly one or more state insurance departments, will be required.
G. Ownership of the Contract
Ordinarily, the Purchaser of a Contract is both the Owner and the Annuitant
and is entitled to exercise all the rights under the Contract. However, the
Owner may be a person other than the Annuitant. This is frequently the case with
respect to Contracts issued in connection with corporate retirement plans and
Keogh Plans. Transfer of the ownership of a Contract may involve federal income
tax consequences, and a qualified advisor should be consulted before any such
transfer is attempted.
FEDERAL INCOME TAX STATUS
A. Introduction
The Contracts may be purchased for use by individuals in retirement plans
which qualify for Federal tax benefits available under Sections 401, 403(a),
403(b), 408 or 457 plans under the provisions of the Internal Revenue Code of
1986 (the "Code") ("Qualified Plans"). They may also be issued for deferred
compensation and other individual retirement plans which do not qualify under
such provisions of the Code ("Non-Qualified Plans"). The ultimate effect of
Federal income taxes on the amounts held under a Contract, on annuity payments,
and on the economic benefits of the Contract Owner, Annuitant or Beneficiary
depends on Bankers Security's tax status, on the type of retirement plan for
which the Contract is purchased, and upon the tax and employment status of the
individual concerned.
The following discussion is general in nature and is not intended as tax
advice. Each person concerned should consult a competent tax advisor. No attempt
is made to consider any applicable state or other tax laws. Moreover, the
discussion is based upon Bankers Security's understanding of the Federal income
tax laws as they are currently interpreted. No representation is made regarding
the likelihood of continuation of the Federal income tax laws or the current
interpretations by the Internal Revenue Service (the "Service"). For a
discussion of Federal income taxes as they relate to the mutual funds, please
see the accompanying Prospectuses for the Oppenheimer and Alliance Funds.
References are made in this discussion to the tax Acts of the last several years
that have significantly affected taxation of these products: the Deficit
Reduction Act of 1984 (the "DRA"), the Tax Reform Act of 1986 (the "TRA") and
the Technical and Miscellaneous Revenue Act of 1988 (the "TAMRA"). The TRA and
the TAMRA tax Acts also include technical corrections to the DRA, some of which
are discussed in the material below.
B. Tax Status
Bankers Security is taxed as a life insurance company under Subchapter L of
the Code. Since Separate Accounts P and Q are not separate entities from Bankers
Security and their operations form a part of Bankers Security, they will not be
taxed separately as a "regulated investment company" under Subchapter M of the
Code. Investment income and realized capital gains on the assets of the account
are reinvested and taken into account in determining the value of an
Accumulation Unit held under the Contracts. As a result, such investment income
and realized capital gains are automatically applied to increase reserves under
the Contract. Under existing Federal income tax law, as amended by the income
tax provisions of the DRA, the Separate Accounts' investment income, including
realized net capital gains, is not taxed to Bankers Security to the extent it is
applied to increase reserves under a Contract. Bankers Security's basis in the
assets underlying the Contracts will be adjusted for appreciation or
depreciation, to the extent the reserves are so adjusted.
C. Taxation of Annuities in General - Non-Qualified Plans
Section 72 of the Code governs taxation of annuities. In general, a
Contract Owner is not taxed on increases in value of the Accumulation Units held
under a Contract until some form of distribution is made under the Contract.
However, in some cases, the increase in value may be subject to tax currently.
In the case of Contracts not owned by natural persons, see page 30. In the case
of Contracts not meeting the diversification requirements, see page 30.
1. Surrenders or Withdrawals Prior to Contract Maturity.
Code Section 72 provides that a complete surrender or a withdrawal from a
Contract prior to the date of maturity of the Contract will, as a general rule,
be treated as taxable income to the extent the amounts held under the Contract
exceed the "investment in the Contract." The remainder will be treated as a
return of capital. For these purposes, loans against the Contract or the
pledging of the Contract are treated as withdrawals. The "investment in the
Contract" is the aggregate amount of Purchase Payments by or on behalf of an
individual under a contract minus the amounts received under the Contract that
have been excludable from the individual's gross income. The taxable portion is
taxed at ordinary income tax rates.
2. Surrenders or Withdrawals on or after the Contract Annuity Commencement
Date.
Upon receipt of a lump sum payment upon the surrender or redemption of the
Contract on or after the Contract Annuity Commencement Date, the recipient is
taxed on the portion of the payment that exceeds the "investment in the
Contract." Ordinarily, such taxable portion is taxed at ordinary income tax
rates.
For fixed annuity payments, the taxable portion of each payment is
determined by a formula known as the "exclusion ratio," which establishes the
ratio that the investment in the Contract bears to the total expected amount of
annuity payments for the term of the Contract. That ratio is then applied to
each payment to determine the non-taxable portion of the payment. The remaining
portion of each payment is taxed at ordinary income rates. For variable annuity
payments, the taxable portion is determined by a formula which establishes a
specific dollar amount of each payment that is not taxed. The dollar amount is
determined by dividing the investment in the Contract by the total number of
expected periodic payments. The remaining portion of each payment is taxed at
ordinary income rates. Withholding of Federal income taxes on all distributions
may be required unless the recipient elects not to have any amounts withheld and
properly notifies Bankers Security of that election. Once the excludable portion
of annuity payments to date equals the investment in the Contract, the balance
of the annuity payments will be fully taxable.
3. Penalty Tax on Surrenders or Withdrawals.
Generally, a 10 percent (10%) penalty tax is imposed on premature taxable
distributions (surrenders or withdrawals). The penalty is 10 percent (10%) of
the amount received that is includable in income by the Contract Owner. The
penalty tax is not imposed on amounts received (i) after the Contract Owner
attains age 59 1/2, (ii) after the death of the Contract Owner, (iii) that are
attributable to the Contract Owner becoming totally disabled, (iv) in a series
of substantially equal periodic payments made for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of such taxpayer
and his beneficiary, and (v) under an immediate annuity contract (an annuity
which is purchased with a single premium, the annuity starting date of which
commences no later than one year from the date of the purchase of the annuity
and which provides for a series of substantially equal periodic payments to be
made not less frequently than annually).
For distributions made on or after April 23, 1987, the exception for
distributions made after death applies to payments on or after the death of the
Contract Owner of the Contract (rather than the annuitant). In the event that
the Contract Owner is not an individual, the exception applies to payments on or
after the death of the primary annuitant.
4. Prior Proposal Would have Required Substantially Equal Periodic
Payments.
From time to time proposals are introduced in Congress which, if adopted,
would adversely affect the tax treatment of annuities. In January, 1992, the
Bush Administration included in its budget for fiscal year 1993 a proposal to
modify the tax treatment of annuities that do not contain substantial life
contingencies. Under the proposal, annuity contracts issued after the proposal's
effective date, would lose tax deferral on the inside buildup unless the
purchaser, as of the date the contract is entered into, irrevocably chooses as a
settlement option a series of substantially equal periodic payments (not less
frequently than annually) made for the life of the annuitant or the joint lives
of the annuitants. If the settlement option contains a term certain feature,
that feature may not guarantee that periodic payments will be made for a period
of time that exceeds one-third of the life expectancy of the annuitant
determined as of the annuity starting date. If the settlement option contains an
amount certain feature, that feature may not guarantee that an amount will be
paid that exceeds one-third of the cash value of the contract (determined
without regard to any surrender charge) determined as of the annuity starting
date (or date of annuitant's death, if earlier).
The proposal was not intended to affect the tax status of pension
annuities, which includes 403(b)s, IRAs and other qualified annuity contracts.
The Congress did not accept the proposal.
D. Additional Considerations
1. Distribution-at-Death Rules.
In order to be treated as an annuity contract, a Contract issued on or
after January 19, 1985 must provide that if the Contract Owner dies on or after
the Contract Annuity Commencement Date, and before the entire interest in the
Contract has been distributed, the remainder of his interest will be distributed
at least as quickly as the method in effect on the Owner's death. If a Contract
Owner dies before the Annuity Commencement Date, his entire interest must
generally be distributed within five (5) years after the date of death, or must
be annuitized for some period (not extending beyond the life of a designated
beneficiary) within one (1) year after the date of death. If the beneficiary is
the spouse of the Contract Owner, the Contract (together with the deferral of
tax on the accrued and future income thereunder) may be continued in the name of
the spouse as Contract Owner.
For Contracts issued on or after April 23, 1987, the following changes
apply. Where the individual is not the Contract Owner, the primary annuitant is
considered the Contract Owner. The primary annuitant is defined as the
individual, the events in whose life which are of primary importance in
affecting the timing and amount of the payout under the Contract. In addition,
when an individual is not the Contract Owner, a change in the primary annuitant
is treated as the death of the Contract Owner. Finally, in the case of joint
Contract Owners, the distribution will be required at the death of the first of
the Contract Owners.
2. Gift of annuity contracts.
With respect to Contracts issued on or after April 23, 1987, gifts of
non-qualified annuity contracts prior to the Annuity Commencement Date will
trigger tax on the gain in the Contract, with the donee getting a step-up in
basis for the amount included in the donor's income. This provision does not
apply to transfers between spouses or incident to a divorce.
3. Contracts Owned by Non-Natural Persons.
In the case of contributions after February 28, 1986, where the Contract is
held by a non-natural person (for example, a corporation) the income on that
Contract (generally the increase in the net surrender value less the premium
paid) is includable in income each year. The rule does not apply where the
non-natural person is the nominal owner of a Contract and the beneficial owner
is a natural person. The rule also does not apply where the annuity contract is
acquired by the estate of a decedent, where the Contract is held under a
Qualified Plan, a TSA program, or an IRA, where the Contract is a qualified
funding asset for structured settlements, where the Contract is purchased on
behalf of an employee upon termination of a Qualified Plan, and in the case of
an immediate annuity.
4. Section 1035 Exchanges.
Code 1035 provides that no gain or loss shall be recognized on the exchange
of one annuity contract for another. A replacement contract obtained in a
tax-free exchange of contracts succeeds to the status of the surrendered
contract. If the surrendered contract was issued prior to August 14, 1982, the
tax rules which formerly provided that the surrender was taxable only to the
extent the amount received exceeds the Contract Owner's investment in the
Contract, will continue to apply. In contrast, Contracts issued on or after
January 19, 1985, in a Code Section 1035 exchange, are treated after exchange as
new Contracts for purposes of the penalty and distribution-at-death rules.
Special rules and procedures apply to Code 1035 transactions. Purchasers wishing
to take advantage of Code 1035 should consult their tax advisors.
5. Anti-Abuse Rules.
To discourage abusive situations, the Technical and Miscellaneous Revenue
Act of 1988 ("TAMRA"), provides that all annuity contracts (possibly including
immediate contracts as well as deferred contracts) issued after October 21, 1988
by the same insurer (or its affiliates) to the same contract owner during any
12-month period will be aggregated in figuring how much of any distribution is
includable in gross income. TAMRA also gives the Treasury Department regulatory
authority to prevent avoidance of TAMRA's rules concerning how much of any
distribution is includable in gross income.
E. Diversification Standards
The DRA introduced Section 817(h) into the Code, which provides that
variable annuity contracts will not receive annuity treatment under the Code
unless investments made by separate accounts underlying those contracts are
adequately diversified. Code Section 817(h) authorizes the Treasury Department
to promulgate diversification standards, and it also sets forth the following
safe harbor rule. If the separate account investment (the Oppenheimer Funds or
Alliance Portfolios) has no more than 55% of its assets held in cash, cash
items, Government securities or securities of other regulated investment
companies, and at the close of each quarter of the taxable year (A) at least 50%
of the value of its total assets is represented by (i) cash, cash items,
Government securities and securities of other regulated investment companies,
and (ii) other securities (limited in respect of any one issuer to an amount not
greater in value than five percent of the value of the total assets and to not
more than ten percent of the outstanding voting securities of such issuer) and
(B) not more than 25% of the value of its total assets is invested in securities
(other than Government securities or securities of other regulated investment
companies) of any one issuer, or of two or more issuers which the Fund controls
and which are engaged in the same, similar or related trades or businesses, then
the separate account will be deemed to be adequately diversified, without
further showing.
1. Final Regulations.
On March 1, 1989, the Treasury issued final diversification regulations
("Final Regulations"). Under the Final Regulations, the diversification
provisions will apply to Separate Accounts P and Q beginning with the quarter
ending December 31, 1986 because Bankers Security believes that at all times
after December 31, 1983, it would be considered the owner of the assets of the
Account under the principles of Rev. Rul. 81-225. Under Rev. Rul. 81-225,
generally the insurance company was treated as the owner of separate account
assets underlying a variable annuity contract where those assets were invested
in mutual fund shares which are not sold directly or indirectly to the general
public but are available only through the purchase of an annuity contract. Where
the underlying assets were invested in a "public" mutual fund, the Company was
not treated as the owner.
The Final Regulations provide that the investments (the Oppenheimer Funds
or Alliance Portfolios) of a segregated asset account (Separate Accounts P and
Q), underlying a variable annuity contract (the Contract) will be adequately
diversified if no more than 55% of the value of its assets is represented by any
one investment, no more than 70% is represented by any two investments, no more
than 80% is represented by any three investments, and no more than 90% is
represented by any four investments. A "look-through" rule applies to treat a
pro-rata portion of each asset of the Oppenheimer or Alliance funds as an asset
of the Separate Accounts. Each fund of Oppenheimer or Alliance will be tested
for compliance with the percentage limitations. Generally, all securities of the
same issuer are treated as a single investment. However, for purposes of these
limitations, each U.S. Government agency and instrumentality is to be treated as
a separate issuer for purposes of Section 817(h). Bankers Security will take the
necessary steps to insure that the investments of Separate Accounts P and Q will
be adequately diversified.
2. Diversification, Final Regulations and Qualified Plans.
Code 817(h) applies to a variable annuity contract other than a pension
plan contract. The Final Regulations reiterate that the diversification
requirements do not apply to a pension plan contract. All of the Qualified Plans
(described below) are defined as pension plan contracts for these purposes.
Notwithstanding the exception of Qualified Plan Contracts from application of
the diversification rules, the investments of the Bankers Security Qualified
Plan Contracts will be structured to comply with the diversification standards.
F. Qualified Plans
The Contracts may be used with several types of Qualified Plans. TSAs,
Keoghs, Individual Retirement Arrangements ("IRAs"), Corporate Pension and
Profit-Sharing Plans and Section 457 Deferred Compensation Plans will be
treated, for purposes of this discussion, as 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 itself. 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 Contract issued in connection therewith.
The TRA has made numerous changes in the tax rules governing Qualified
Plans including rules with respect to: maximum contributions, minimum, maximum
and timing of distributions, anti-discrimination, coverage and vesting. The TRA
also generally increased the penalty tax on premature distributions,
substantially revised the general rules for the taxation of distributions, and
added a new penalty tax on large distributions. The following are brief
descriptions of the various types of Qualified Plans and of the use of the
Contracts in connection therewith.
1. Tax-Sheltered Annuities.
Code 403(b) permits public school employees and employees of certain types
of charitable, educational and scientific organizations, specified in Code
501(c)(3) to purchase annuity contracts and, subject to certain limitations,
exclude the amount of purchase payments from gross income for Federal income tax
purposes. These annuity contracts are commonly referred to as "TSAs". In
accordance with the requirements of Section 403(b), any Contract used for a
403(b) plan will restrict distributions of (i) elective contributions made in
years beginning after December 31, 1989, and (ii) earnings on those
contributions, and (iii) earnings on amounts attributable to elective
contributions held as of the end of the last year beginning before January 1,
1990. However, distributions of such amounts will be allowed upon death of the
employee, attainment of age 59 1/2, separation from service, disability, or
financial hardship, except that income attributable to elective contributions
may not be distributed in the case of hardship. Purchasers of the Contracts for
these purposes should seek competent advice as to eligibility, applicable
non-discrimination rules, limitations on permissible amounts of purchase
payments, required distributions and tax consequences upon distribution.
2. Keogh Plans.
The Self-Employed Individual Tax Retirement Act of 1962, as amended,
permits self-employed individuals to establish "Keoghs," or qualified plans for
themselves and their employees. The tax consequences to participants under such
a plan depend upon the terms of the plan. In addition, special rules apply to
such plans with respect to maximum permissible contributions, required
distributions, nonforfeitability of interests, nondiscrimination, and the
taxation of distributions. Restrictions on the availability of the amounts may
be applicable. In order to establish such a plan, a plan document must be
adopted and implemented by the employer, and advance approval by the Service is
often requested. Purchasers of the Contracts for use with Keogh plans should
seek competent advice as to the suitability of the proposed plan document and of
the Contracts to those specific needs.
3. Individual Retirement Arrangements.
Code 408 permits eligible individuals to contribute to an individual
retirement arrangement known as an "IRA". These IRAs are subject to limitations
on the amount which may be contributed, the deductibility of contributions, the
persons who may be eligible, the time when distributions must commence and the
taxation of distributions. In addition, distributions from certain other types
of Qualified Plans may be placed on a tax-deferred basis into an IRA. Purchasers
of the Contracts for such purposes should seek competent advice as to the
suitability of the Contracts therefore.
4. Corporate Pension and Profit Sharing Plans.
Code 401(a) and 403(a) permit corporate employers to establish various
types of retirement plans for employees. The rules applicable to such plans of
corporate employers are similar to the rules applicable to Keogh plans. Such
retirement plans may permit the purchase of Contracts to provide benefits
thereunder. Corporate employers, intending to use the Contracts in connection
with such plans, should seek competent advice in connection therewith.
5. Section 457 Deferred Compensation Plans With Respect to Service for
State and Local Governments and Tax-Exempt Entities.
Code 457 provides for certain deferred compensation plans with respect
to service for state and local governments and tax-exempt entities. The
Contracts may be used in connection with these plans; however, under these
plans, the Contract Owner is the plan sponsor, and the individual participants
in the plans are the annuitants. Under such Contracts, the rights of individual
plan participants are governed solely by their agreements with the plan sponsor
and not by the terms of the Contracts. A number of special rules apply to
deferred compensation plans described in Code section 457, relating to items
such as ownership of plan assets, persons allowed to participate, maximum
contributions, permitted distributions, required distributions, and taxation of
distributions. Accordingly, state and local governments and tax-exempt entities
intending to use the Contracts in connection with such plans should seek
competent advice in connection therewith.
6. Withholding Requirements Where Rollovers are Distributed Directly to the
Participant
A qualified retirement or annuity plan must permit participants to elect to
have any distribution that is eligible for rollover treatment ("Eligible
Rollover Distributions") transferred directly to another qualified plan, IRA or
individual retirement annuity specified by the participant. Direct transfers are
sometimes referred to as Trustee-to-Trustee transfer.
Beginning January 1, 1993, when Eligible Rollover Distributions are made
directly to the participants, rather than Trustees-to-Trustee, 20% of the
distribution will be withheld and paid to the IRS.
7. Seek Tax Advice
The above description of Federal income tax consequences of the different
types of Qualified Plans which may be funded by the Contracts offered by this
Prospectus is only a brief summary and is not intended as tax advice. The rules
relating to Qualified Plans are extremely complex and often difficult to
comprehend. Many of these rules were changed by the TRA. Anything less than full
compliance with the applicable rules, all of which are subject to change, may
trigger severe adverse tax consequences. A prospective purchaser considering
adoption of a Qualified Plan should first consult a qualified and competent tax
advisor.
REGULATION
A. State
Bankers Security is subject to the laws of the State of New York governing
insurance companies and to regulation by the New York State Insurance
Department. An annual statement in a prescribed form is filed with the
Department of Insurance each year covering the operations of Bankers Security
for the preceding year and its financial condition as of the end of such year.
Bankers Security's books and accounts are subject to review by the
Department of Insurance at anytime and a full examination of its operations is
conducted periodically. Such regulation does not, however, involve any
supervision of management or investment practices or policies except to
determine compliance with the requirements of New York Insurance Law. In
addition, Bankers Security is subject to regulation under the insurance laws of
other jurisdictions in which it may operate.
B. Proposed Unisex Legislation
From time to time, legislation in several forms is considered to prohibit
insurers from using rates or factors which distinguish on the basis of sex in
determining premium rates and benefit payments under insurance policies and
annuity contracts. (See "Annuity Period," page 21). If "unisex" insurance
requirements are enacted, Bankers Security may be required to utilize contract
annuity rate tables which do not differentiate in the amount of annuity benefits
on the basis of sex. If enacted, one aspect of such legislation might result in
a Contract change which provides for either an increase in the initial rate
amounts of monthly benefits to be applied for females or a decrease in such rate
amounts for males or a combination of both. Bankers Security may be required to
amend existing policies to reflect such changes.
VOTING RIGHTS
As stated above, all of the assets held in the Sub-Accounts of the Separate
Accounts will be invested in shares of the corresponding Fund (the "Fund
Shares"). In accordance with its view of present applicable law, Bankers
Security will vote the Fund Shares held in the Separate Account at meetings of
shareholders of the Fund in accordance with instructions received from persons
having the voting interest in the Separate Account. The person having the voting
interest shall be the Contract Owner. Fund Shares as to which no timely
instructions are received and Fund shares that are not otherwise attributable to
Contract Owners will be voted by Bankers Security in proportion to the
instructions received from all persons furnishing timely instructions. However,
if the Investment Company Act of 1940 or any regulation thereunder should be
amended or if the present interpretation thereof should change, and as a result
Bankers Security determines that it is permitted to vote the Fund Shares in its
own right, it may elect to do so.
Prior to the Annuity Commencement Date, the number of Fund Shares held in
the Sub-Accounts of the Separate Accounts which is attributable to each Contract
Owner is determined by dividing the Sub-Account Accumulated Value by the net
asset value of one Fund Share. After the Annuity Commencement Date, the number
of Fund Shares held in the Sub-Account of the Separate Account which is
attributable to each Contract is determined by dividing the reserve held in the
Sub-Account for the variable annuity payment under such Contract by the net
asset value of one Fund Share. As this reserve fluctuates, the number of votes
fluctuates, although generally they will decrease causing the votes attributable
to a Contract to decrease.
The number of votes which a person has the right to cast will be determined
as of the record date established by each Fund. Voting instructions will be
solicited by written communication prior to the date of the meeting at which
votes are to be cast.
Each person having a voting interest in the Separate Account will receive
reports and other materials relating to the Funds.
TEXAS OPTIONAL RETIREMENT PROGRAM
Participants in the Texas Optional Retirement Program may not receive the
proceeds of a withdrawal from, or complete surrender of, a Contract, or apply
them to provide annuity options prior to retirement except in the case of
termination of employment in the Texas public institutions of higher education,
death or total disability. Such proceeds may, however, be used to fund another
eligible retirement vehicle.
LITIGATION
No litigation is pending that would have a material effect upon the
Separate Accounts.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to the
Contracts. This Prospectus does not contain all the information set forth in the
registration statement and amendments thereto and the exhibits filed as a part
thereof, to all of which reference is hereby made for further information
concerning the Separate Accounts, Bankers Security, and the Contracts.
Statements contained in this Prospectus as to the content of the Contract and
other legal instruments are summaries. For a complete statement of the terms
thereof, reference is made to such instruments as filed.
LEGAL OPINIONS
Legal matters in connection with the Contracts described in this Prospectus
have been passed upon by Francis A. Podlesney, Assistant Vice President and
Counsel of Bankers Security.
PERFORMANCE DATA
From time to time, the Bankers Security Variable Annuity accounts ("The USA
Plan") may advertise several types of performance measures relating both to the
underlying funds (the Oppenheimer Money Fund, Oppenheimer High Income Fund,
Oppenheimer Bond Fund, Oppenheimer Strategic Bond Fund, Oppenheimer Capital
Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies
Fund, Oppenheimer Global Securities Fund, Alliance Growth and Income Portfolio,
Alliance Short-Term Multi-Market Portfolio, Fidelity Equity Income Portfolio,
Fidelity Growth Portfolio, Fidelity Investment Grade Bond Portfolio, Fidelity
Asset Manager Portfolio, Fidelity Index 500 Portfolio, Northstar Income and
Growth Fund and Northstar High Yield Bond Fund) and to the sub-accounts
themselves for specified periods, assuming current contract charges and actual
fund performance. Methods of quoting performance will include standardized
calculations of average annual total return for one, five and ten years, ending
on a recent calendar quarter, or if such periods have not yet elapsed, at the
end of a shorter period corresponding to the life of the sub-account. The USA
Plan may also use nonstandardized performance measures, comparisons of
investment results to various indices including the Dow Jones Average of 30
Industrial Stocks, the Standard and Poor's 500 Stock Index, the Consumer Price
Index, the Salomon Brothers High Grade Bond Index, the Lehman Brothers
Government/Corporate Bond Index and the Merrill Lynch Government/Corporate
Master Index, all of which are widely recognized indices of stock market
performance but which do not include the reinvestment of income dividends and do
not consider tax consequences. In addition, The USA Plan may be compared to the
performance of other fixed income or government bond mutual funds or mutual fund
indices such as reported by Lipper Analytical Services, Inc. ("Lipper") or CDA
Investment Technologies, Inc. ("CDA"). Lipper and CDA are widely recognized
independent mutual fund reporting services. Their performance calculations are
based upon changes in net asset value with all dividends reinvested, but do not
include the effect of any sales charges. Comparisons may also be made with
results of other mutual funds or groups of mutual funds in advertisements or in
reports furnished to present or prospective shareholders. Standardized measures
of performance are based on several assumptions which may or may not apply to an
individual investor's account. Because the average annual total return figures
are annualized, they represent an average percentage change over an annual
period which may be based on less than 12 months of actual data, whereas
previously reported total return figures may not have been annualized and
represented in those cases the aggregate percentage or dollar-value change over
the period in question.
The USA Plan's method for computing average annual total return is to
compute the average annual compounded rate of return that equates a purchase
payment to the market value of such purchase payment on the last day of the
period for which such return is calculated. For purposes of the calculation, it
is assumed that an initial payment of $1,000 is made on the first day of the
period for which the return is calculated. All recurring charges are reflected
in the calculations. The asset charges are reflected in the changes in unit
values. The $30 administration fee is deducted by dividing the total amount of
contract fees collected in the prior year by the total average net assets.
Certain sub-accounts may quote current yield and effective yield. The
current yield refers to the income generated by an investment over a 7-day
period (which period will be stated in the advertisement). This income is then
assumed to be earned each week over a 52-week period. The effective yield is
calculated similarly, but the income earned by the sub-account investments are
assumed to be reinvested.
Each of the other sub-accounts may also quote yield. The yield of these
sub-accounts refers to the net income earned by the underlying mutual fund over
a 30-day period (which period will be stated in the advertisement). This income
is then assumed to be earned for a full year and to be reinvested each month or
six months. The resulting semi-annual yield is doubled.
Other reportable performance measures may include income production rates,
percentage changes in accumulation unit values, and distribution rates. A
distribution rate is simply a measure of the level of income and short-term
capital gain dividends distributed for a specified period. It is, therefore, not
intended to be a complete measure of performance. The distribution rate may
sometimes be greater than yield since, for instance, it may include short-term
gains (which may be nonrecurring) and may not include the effect of amortization
of bond premiums. A distribution rate will be accompanied by a disclosure
explaining (i) the components of the distribution rate that differ from yield,
(ii) where components consist of capital gains, they are nonrecurring, and (iii)
where a component consists of option premiums, what potential effect on overall
performance option writing might have.
Any of the indicators mentioned in the section entitled "Performance Data"
may be included in sales literature and shareholder reports when accompanied by
required standardized calculations. More detailed information on performance
data is set forth in the Statement of Additional Information.
FINANCIAL STATEMENTS
The financial statements of Bankers Security Life Insurance Society set
forth in the Statement of Additional Information are separate and apart from the
financial statements of Separate Accounts P and Q and should be considered only
as bearing upon the ability of Bankers Security to meet its obligations under
the Contracts.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information
and financial statements relating to the Separate Accounts and Bankers Security.
The Table of Contents of the Statement of Additional Information is set forth
below:
1. General Information About the Company
2. Custodian and Accountants
3. Underwriter
4. Calculation of Performance Data
5. Financial Statements
Contract Owner inquiries and requests for a Statement of Additional Information
should be directed to Bankers Security in writing at 4601 Fairfax Drive,
Arlington, Virginia 22203, or by telephoning Bankers Security at (703) 875-3623.
THE FIXED ACCOUNT
During the accumulation period, the Owner may elect to have Contract values
accumulate on a fixed basis in the Fixed Account within the Company's General
Account, which consists of all assets of Bankers Security other than allocated
to any separate account of Bankers Security. Because of exemptive and
exclusionary provisions, interests in the Fixed Account have not been registered
under the Securities Act of 1933 and the Fixed Account has not been registered
as an investment company under the Investment Company Act of 1940. Accordingly,
neither the Fixed Account nor any interest therein are subject to the provisions
of these acts and, as a result, the staff of the Securities and Exchange
Commission has not reviewed the disclosures in this Prospectus relating to the
Fixed Account. Disclosures regarding the Fixed Account may, however, be subject
to certain generally applicable provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
This Prospectus is generally intended to serve as a disclosure document only for
the aspects of the Contract involving Separate Accounts P and Q and their
sub-accounts and contains only selected information regarding the Fixed Account.
More information regarding the Fixed Account may be obtained from Bankers
Security's Executive Office or from your sales representative.
General Description
Bankers Security's obligations with respect to the Fixed Account are
supported by its General Account. Subject to applicable law, Bankers Security
has sole discretion over the investment of the assets in its General Account.
Bankers Security guarantees that Contract Values in the Fixed Account will
accrue interest at an effective rate of at least 4%, independent of the actual
investment experience of the General Account. Bankers Security may, at its sole
discretion, credit a higher rate of interest, although it is not obligated to
credit interest in excess of 4% per year. Any interest rate in excess of 4% per
year with respect to any amount in the Fixed Account pursuant to a Contract will
be declared by Bankers Security for a specific period of time as follows. On the
issue date and on any contract anniversary, the excess interest, if any, will be
set on the Fixed Account Value and guaranteed until the next contract
anniversary. Net purchase payments and transfers into the Fixed Account during
the contract year will be credited with an excess interest rate as then declared
and such excess interest rate will be guaranteed until the next Contract
Anniversary.
Once credited, such interest will be guaranteed and become part of the
Contract Value in the Fixed Account from which deductions for fees and charges
may be made.
Charges under the Contract are the same as when a Separate Account is being
used, except that the 1.25% per annum charged for mortality and expense risk is
not imposed on amounts of Contract Value in the Fixed Account.
Fixed Account Value
The Contract's Fixed Account Value on any Valuation Date is the sum of the
Net Purchase Payments allocated to the Fixed Account, plus any transfers from
the Separate Accounts, plus interest credited to the Fixed Account, less any
surrenders, any applicable contingent deferred sales charges, any applicable
premium taxes, annual maintenance charges allocated to the Fixed Account, and/or
transfers to the Separate Accounts.
Transfers, Total and Partial Surrenders
Amounts in Fixed Account are generally subject to the same rights and
limitations and will be subject to the same charges as are amounts allocated to
the Sub-accounts of the Separate Account with respect to total and partial
surrenders (see page 19 of prospectus, "Charges and Other Deductions").
Transfers out of the Fixed Account have special limitations. The owner may
make partial or total transfers of Contract Values from the Fixed Account to one
or more variable Sub-Accounts available in the Contract, as long as the amounts
to be transferred have been in the Fixed Account for at least six months, unless
transfers are being made as a part of an automatic dollar cost averaging
program. The following conditions are also applicable: (a) all transfers within
the Contract are without payment of any fee or charge; (b) the dollar amount of
a transfer may not be less than $250 except that the entire Fixed Account Value
may be transferred if less than $250; and (c) no transfer may be made after the
Annuity Commencement Date or the date of receipt by Bankers Security of
notification of death of the Annuitant. All transfers shall be made as of the
end of the Valuation Period during which the request for transfer is received by
Bankers Security at its Executive Office, or later Valuation Period if
requested.
<PAGE>
APPENDIX I
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
THE NET INVESTMENT FACTOR OF A
SUB-ACCOUNT FOR ALL CONTRACTS
A + B - C
Net Investment Factor = --------- - F
D - E
Where:
A = The Net Asset Value of the Fund as of the end of the current
Valuation Period.
Assume......................................................= $11.570000
B = The per share amount of any dividend or capital gains
distribution since the end of the immediately preceding
Valuation Period.
Assume......................................................= 0
C = The per share charge or credit for any taxes reserved for at
the end of the current Valuation Period.
Assume......................................................= 0
D = The Net Asset Value of a Fund share at the end of the
immediately preceding Valuation Period.
Assume......................................................= 11.400000
E = The per share amount of any taxes reserved for at the end of
the immediately preceding Valuation Period.
Assume......................................................= 0
F = The daily deduction for mortality and expense risks, which
totals 1.25% on an annual basis
On a Daily Basis............................................= 0.000034
Then, the Net Investment Factor = 11.570000 - 0.000034
---------
11.400000
EXAMPLE B
FORMULA AND ILLUSTRATION FOR DETERMINING
ACCUMULATION UNIT VALUE OF A
SUB-ACCOUNT
Accumulation Unit Value = A x B
Where:
A = The Accumulation Unit Value for the immediately preceding
Valuation Period.
Assume......................................................= $ 1.347125
B = The Net Investment Factor for the current Valuation Period.
Assume......................................................= 1.014878
Then, the Accumulation Unit Value
= $1.347125 x 1.014878
= $1.367167
A-1
APPENDIX II
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
DEATH BENEFIT PAYABLE UNDER
SETTLEMENT OPTION 4 - UNIT REFUND LIFE ANNUITY
Upon the death of the Annuitant the designated Beneficiary under this option
will receive under each applicable Separate Account a lump sum death benefit of
the then dollar value of a number of Annuity Units computed using the following
format:
Annuity Units Payable = A - (C x D), if A is greater then C x D
- -
B B
Where:
A = The net benefit applied on the Annuity Commencement Date
to purchase the Variable Annuity.
Assume......................................................= $ 15,000
B = The Annuity Unit Value at the Annuity Commencement Date.
Assume......................................................= 1.103300
C = The number of Annuity Units represented by each payment made.
Assume......................................................= 82.933019
D = The total number of monthly Variable Annuity Payments made
prior to the Annuitant's death.
Assume......................................................= 24
Then the number of Annuity Units Payable
$15,00000 - (82.933019 x 24)
---------
$1.103300
= 13,595.576905 - 1990.392456
= 11,605.184449 Annuity Unit
If the value of an Annuity Unit on the date of receipt of notification of
death was $1.130529 then the amount of the benefit under each applicable
Separate Unit would be:
11,605.18449 x $1.130529 = $13,120.00
This calculation will be made for each Separate Account upon which Variable
Annuity Payments were based.
APPENDIX III
EXAMPLE A
FORMULA AND ILLUSTRATION FOR DETERMINING
ANNUITY VALUE OF A
SEPARATE ACCOUNT
Annuity Unit Value = A x B x C
Where:
A = Annuity Unit Value for the immediately preceding
Valuation Period.
Assume......................................................= $1.097696
B = Net Investment Factor for the Valuation Period for which the
Annuity Unit is being calculated.
Assume......................................................= 1.005200
C = A factor to neutralize the assumed interest of 3 1/2% built
into the Annuity tables used.
Daily factor equals.........................................= 0.999906
Then, the Annuity Value is:
$1.097696 x 1.005200 x 0.999906 = $1.103300
A-2
EXAMPLE B
FORMULA AND ILLUSTRATION FOR DETERMINING
AMOUNT OF FIRST MONTHLY VARIABLE ANNUITY PAYMENT FROM
ONE SEPARATE ACCOUNT
First Monthly Variable Annuity Payment = A x B
-----
$1,000
Where:
A = The Accumulated Value allocated to a Separate Account for
the Valuation Date or immediately preceding the seventh
day before the Annuity Commencement Date.
Assume......................................................= $15,000.00
B = The Annuity purchase rate per $1,000 based upon the option
selected, the sex and adjusted age of the Annuitant
according to the tables contained in the Contract.
Assume......................................................= 6.100000
Then, the first Monthly Variable Payment
= $15,000 x $6.10 = $91.50
-------
$ 1,000
EXAMPLE C
FORMULA AND ILLUSTRATION FOR DETERMINING
THE NUMBER OF ANNUITY UNITS FOR ONE SEPARATE ACCOUNT
REPRESENTED BY EACH MONTHLY VARIABLE ANNUITY PAYMENT
Number of Annuity Units = A
-
B
Where:
A = The dollar amount of the first monthly Variable Annuity Payment.
Assume......................................................= $91.50
B = The Annuity Unit Value for the Valuation Date on or immediately
preceding the seventh day before the Annuity Commencement Date.
Assume......................................................= $1.103300
Then, the number of Annuity Units
= $91.50 = 82.933019
------
$1.103300
EXAMPLE D
FORMULA AND ILLUSTRATION FOR DETERMINING
THE AMOUNT OF SECOND AND SUBSEQUENT MONTHLY VARIABLE
ANNUITY PAYMENTS FROM ONE SEPARATE ACCOUNT
Second Monthly Variable Annuity Payment = A x B
Where:
A = The number of Annuity Units represented by each monthly
Variable Annuity Payment.
Assume......................................................= $82.933019
B = The Annuity Unit Value for the Valuation Date on or immediately
preceding the seventh day before the date on which the second
(or subsequent) Variable Annuity Payment is due.
Assume......................................................= $ 1.128621
Then, the second monthly Variable Annuity Payment
= 82.933019 x $1.128621 = $93.60
The above example was based upon the assumption of an increase in the Annuity
Unit Value since the initial Variable Annuity Payment due to favorable
investment results of the Separate Account and the Fund. If the investment
results were less favorable, a decrease in the Annuity Unit Value and in the
second monthly Variable Annuity Payment could result. Assume B above was
$1.074360.
Then, the second monthly Variable Annuity Payment
= 82.933019 $1.074360 = $89.10
A-3
<PAGE>
This Prospectus is accompanied by the following Prospectus for the Funds:
FUND PROSPECTUS CIK ACCESSION NUMBER
=============== ===== ================
Fidelity Investments 0000356494 0000927384-96-000024
Variable Insurance
Products Funds Dated
April 30, 1996
Fidelity Investments 0000831016 0000927384-96-000022
Variable Insurance
Products Funds II Dated
April 30, 1996
Northstar/NWNL Trust 0000916403 0000912052-96-003160
Dated April 30, 1996
Oppenheimer Variable 0000752737 0000752737-96-000017
Account Funds
Dated April 30, 1996
Alliance Variable 0000825316 0000919574-96-000463
Products Series
Fund, Inc.
Dated April 30, 1996
General Distributor:
USLICO Securities Corp.
4601 N. Fairfax Drive
Arlington, VA 22203
[LOGO] Bankers Security Life
A ReliaStar Company
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS M, P AND Q
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY CONTRACTS
OFFERED BY
BANKERS SECURITY LIFE INSURANCE SOCIETY
4601 Fairfax Drive
Arlington, Virginia 22203
Telephone: (703)875-3500
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 1996
This Statement of Additional Information is not a Prospectus and should be
read in conjunction with the Contract's Prospectus, dated April 30, 1996, which
is available without charge by contacting Bankers Security Life at the above
address or telephone number.
<PAGE>
TABLE OF CONTENTS
Heading Page
GENERAL INFORMATION ABOUT THE COMPANY....................................3
CUSTODIAN AND ACCOUNTANTS................................................3
UNDERWRITER..............................................................3
CALCULATION OF PERFORMANCE DATA..........................................3
FINANCIAL STATEMENTS.....................................................5
2
<PAGE>
GENERAL INFORMATION ABOUT THE COMPANY
In 1979, Bankers Security became a wholly-owned subsidiary of United
Services Life Insurance Company ("United Services") which in turn is
wholly-owned by Northwestern National Life Insurance Company, a subsidiary of
ReliaStar Financial Corp. ("ReliaStar"). ReliaStar is a holding company
incorporated under the laws of the State of Delaware and is engaged in life and
health insurance and financial services.
CUSTODIAN AND ACCOUNTANT
A. Custodian
Bankers Security, subject to applicable laws and regulations, is the
custodian of the assets of the Separate Accounts.
B. Accountants
The financial statements with assets and liabilities as of December 31,
1995 and the related statements for the year ended December 31, 1995, of Bankers
Security Variable Annuity Funds M, P and Q and Bankers Security Life Insurance
Society, which are included in the Statement of Additional Information, have
been audited by Deloitte & Touche LLP, 120 South 6th Street, Minneapolis,
Minnesota 55402 independent auditors, and are included herein in reliance upon
the reports of such firm with reports are given upon their authority as experts
in accounting and auditing. The Statements of Operations and Changes in Net
Assets for the year ended December 31, 1994 were audited by KPMG Peat Marwick
LLP, 2001 M Street, N.W., Washington, DC 20036 independent auditors and are
included herein in reliance upon the reports of such firm which reports re given
upon their authority as experts in accounting and auditing.
UNDERWRITER
The Contracts are distributed by the principal underwriter, USLICO
Securities Corporation ("USC"), an affiliate of Bankers Security and a
subsidiary of ReliaStar Financial Corp. The Contracts are sold by state licensed
insurance agents of Bankers Security who are also registered representatives of
broker/dealers who have sales agreements with USC. Commissions paid to these
other broker/dealers obtaining applications for Contracts accepted by Bankers
Security will not exceed 6% of the Purchase Payments. USC is a registered
broker/dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The principal business address
of USC is 4601 Fairfax Drive, Arlington, VA 22203. The contracts are sold in
those states where their sale is lawful. Under certain circumstances, dealers
may, in the calendar year in which they qualify, receive their commissions in
advance of Contract Owner purchase payments. During 1994 and 1995, USC received
$907,648.12 and approximately $370,000 respectively of commission income for the
sale of variable annuity contracts issued by Bankers Security.
CALCULATION OF PERFORMANCE DATA
Average annual total return calculations for each of the subaccounts are based
on the formula shown below:
T = [(ERV/P) 1/n] - 1
Where:
T = The average annual total return net of subaccount recurring charges.
ERV = The ending redeemable value of the hypothetical account at the end of the
period.
P = A hypothetical initial investment of $1,000.
n = The number of years or fractional years in the period.
Under this formula the time period used in advertising would be based on a
rolling 12 month calendar, updated to the last day of the most recent month end
period to submission of the advertising publication and will cover 1, 5 or 10
year periods or a shorter period if the investment company with respect to which
comparison is being made has not been in existence for all those time periods.
3
<PAGE>
THE USA PLAN VARIABLE ANNUITY
SEPARATE ACCOUNTS P AND Q
<TABLE>
<CAPTION>
WITHOUT REDEMPTION WITH REDEMPTION INCEPTION
------------------------------------ ----------------------- -----------
ANN AVER
LATEST 12 LIFE OF RET SINCE LATEST 12 LIFE OF
ACCOUNT MONTHS SUB-ACCT INCEPTION MONTHS SUB-ACCT DATES
- --------- ---------- ---------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
120 : NS INC. & GRO ERR 8.703 10.575 ERR 1.095 31-May-95
127 : NS HIGH YIELD BOND ERR 2.120 3.845 ERR -5.032 08-Sep-95
143 : CAP. GRO. & INC. 30.400 63.884 10.043 21.264 57.374 31-Jan-91
144 : MONEY FUND. 4.089 50.049 4.703 -3.203 50.089 02-Jun-87
145 : CAP. APPREC. 36.541 180.261 12.620 26.976 180.405 30-Jul-87
146 : HIGH INCOME 17.613 168.450 12.180 9.373 168.585 28-Aug-87
147 : MULTI. STRAT. 16.400 121.652 9.433 8.245 121.749 02-Jun-87
148 : GLOBAL SEC. 4.520 53.362 8.258 0.918 48.800 09-Nov-90
149 : CAP. S-T MM 11.249 10.296 1.848 3.455 6.992 23-Nov-90
150 : STRAT. BOND ERR 13.443 13.602 ERR 5.507 03-Apr-95
151 : BOND FUND ERR 2.811 3.667 ERR -4.389 22-Jun-95
152 : OPP. GROWTH 31.004 31.800 31.212 21.826 22.592 24-Mar-95
171 : FID. GROWTH ERR 21.214 25.515 ERR 12.739 25-May-95
172 : EQUITY-INCOME ERR 21.177 25.469 ERR 12.705 25-May-95
174 : INV. GRD. BOND ERR 3.122 4.031 ERR -4.099 19-Jun-95
175 : ASSET MGR. ERR 14.044 17.657 ERR 6.066 08-Jun-95
176 : INDEX 500 ERR 23.236 27.789 ERR 14.622 23-May-95
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
WITHOUT REDEMPTION WITH REDEMPTION INCEPTION
------------------------------------ ----------------------- -----------
ANN AVER
LATEST 12 LIFE OF RET SINCE LATEST 12 LIFE OF
ACCOUNT MONTHS SUB-ACCT INCEPTION MONTHS SUB-ACCT DATES
- --------- ---------- ---------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
020 : NS INC. & GRO ERR 4.141 5.955 ERR -3.152 17-Jul-95
027 : NS HIGH YIELD BOND ERR 1.624 2.612 ERR -5.596 14-Aug-95
043 : CAP. GRO. & INC. 30.399 65.911 10.109 21.264 60.983 27-Dec-90
044 : MONEY FUND. 3.773 47.998 4.540 -3.497 48.037 02-Jun-87
045 : CAP. APPREC. 36.541 201.955 13.394 26.976 190.029 16-Jun-87
046 : HIGH INCOME 17.613 173.540 12.126 9.373 173.679 16-Jun-87
047 : MULTI. STRAT. 16.400 116.087 9.100 8.245 116.180 27-May-87
048 : GLOBAL SEC. 8.520 53.448 8.283 0.917 48.883 12-Nov-90
049 : CAP. S-T MM 11.249 10.027 1.805 3.455 6.731 26-Nov-90
050 : STRAT. BOND 13.443 14.380 13.971 5.495 6.378 20-Mar-95
051 : BOND FUND 8.823 9.139 8.738 1.199 1.500 14-Mar-95
052 : OPP. GROWTH 31.004 33.883 32.252 21.826 24.531 14-Mar-95
071 : FID. GROWTH ERR 24.057 29.651 ERR 15.385 31-May-95
072 : EQUITY-INCOME ERR 20.488 23.853 ERR 12.064 16-May-95
074 : INV. GRD. BOND ERR 2.022 3.629 ERR -5.123 06-Sep-95
075 : ASSET MGR. ERR 13.537 16.584 ERR 5.594 01-Jun-95
076 : INDEX 500 ERR 23.379 27.270 ERR 14.755 16-May-95
</TABLE>
THESE FIGURES ARE CALCULATED BASED ON CHANGES IN THE ACCUMULATION UNIT VALUE
NET OF ALL SEPARATE ACCOUNT APPLICABLE EXPENSES AND DEDUCTIONS FOR STATED
TIME PERIODS. 'YEAR TO DATE' FIGURES REFLECT CONTINUED INVESTMENT AND ARE NOT
ANNUALIZED. 'LATEST 12 MONTH' AND 'LIFE OF SUB-ACCOUNT WITH REDEMPTION'
FIGURES, WHICH USE THE SEC AVERAGE ANNUAL TOTAL RETURN FORMULAS, MUST PRECEDE
OR ACCOMPANY ANY OTHER PERFORMANCE REPRESENTATION. THE 'LIFE OF SUB-ACCOUNT'
FIGURES DEMONSTRATE A CUMULATIVE RETURN WHILE THE 'ANNUAL AVERAGE SINCE
INCEPTION' FIGURES REFLECT AN AVERAGE ONE-YEAR RETURN BASED ON THE SUB-ACCOUNTS
PERFORMANCE SINCE INCEPTION.
5
<PAGE>
Yield calculations for the money market subaccount are based on the following
two formulae:
Current Yield = ((NCS - ES)/UV)*)365/7)
Where:
NCS = The net charge in the value of the Portfolio (exclusive of realized
gains and losses on the sale of securities and unrealized
appreciation and depreciation) for the 7-day period attributable to a
hypothetical account having a balance of 1 Subaccount unit.
ES = Per unit expenses of the Subaccount for the 7-day period.
UV = The unit value on the first day of the 7-day period.
Effective yield = (1 + ((NCS - ES)/UV)) ^ (365/7) - 1
Where:
NCS = The net charge in the unit value of the Portfolio (exclusive of
realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) for the 7-day period attributable to a
hypothetical account having a balance 1 Subaccount unit.
ES = Per unit expenses of the Subaccount for the 7-day period.
UV = The unit value on the first day of the 7-day period.
Yield calculations for the remaining subaccounts are based on the formula
shown below.
Yield = 2 * ((((NI - ES)/(U * UV)) + 1) ^ 6) - 1)
Where:
NI = Net income of the portfolio for the 30-day period attributable to the
Subaccount's units.
ES = Expenses of the Subaccount for the 30-day period.
U = The average of units outstanding.
UV = The unit value at the close (highest) of the last day in the 30-day period.
Investment results will vary from time to time depending upon market
conditions, the allocation chosen by the client of the underlying Fund's
portfolio(s) and operating expenses of the Fund, so that any investment results
reported shall not be considered representative of what an investment will earn
in any future period. These factors and possible differences in calculation
methods should be considered when comparing any investment results with those
published for other investment companies, other investment vehicles and any
index. Performance results also should be considered relative to the risks
associated with the stated investment objective and policies.
6
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
Oppenheimer
--------------------------------------------------------------------
NON-QUALIFIED FUNDS - (P) Capital High Multiple Global
Money Appreciation Income Strategies Securities
ASSETS Fund 144 Fund 145 Fund 146 Fund 147 Fund 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 4,515,891 $ 21,969,901 $ 14,028,974 $ 21,576,180 $ 11,351,280
Net receivable from Bankers Security for contract
charges and reserve transfers.................. - - 853,029 - -
------------- ------------- ------------- ------------- -------------
4,515,891 21,969,901 14,882,003 21,576,180 11,351,280
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 59,946 200,805 - 23,005 61,495
------------- ------------- ------------- ------------- -------------
Net Assets $ 4,455,945 $ 21,769,096 $ 14,882,003 $ 21,553,175 $ 11,289,785
============= ============= ============= ============= =============
Accumulation Units Outstanding 2,852,045 8,372,729 5,723,847 9,941,909 7,628,233
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.49 $ 2.60 $ 2.60 $ 2.15 $ 1.48
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 4,515,891 642,207 1,319,753 1,482,899 756,752
Net Asset Value $ 1.00 $ 34.21 $ 10.63 $ 14.55 $ 15.00
Cost $ 4,515,891 $ 12,086,267 $ 12,244,685 $ 16,929,602 $ 8,458,704
Oppenheimer Alliance
----------------------------------------- ---------------------------
NON-QUALIFIED FUNDS - (P) Strategic Short-Term Growth and
Bond Bond Growth Multi-Market Income
ASSETS Fund 150 Fund 151 Fund 152 Fund 149 Fund 143
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 3,201,904 $ 33,993 $ 1,474,371 $ 660,340 $ 2,680,210
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 41,717 31,385 - - 14,174
------------- ------------- ------------- ------------- -------------
3,243,621 65,378 1,474,371 660,340 2,694,384
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 4,344 895 -
------------- ------------- ------------- ------------- -------------
Net Assets $ 3,243,621 $ 65,378 $ 1,470,027 $ 659,445 $ 2,694,384
============= ============= ============= ============= =============
Accumulation Units Outstanding 2,896,090 62,264 1,176,022 610,597 1,716,168
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.12 $ 1.05 $ 1.25 $ 1.08 $ 1.57
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 652,119 2,871 62,606 62,414 169,741
Net Asset Value $ 4.91 $ 11.84 $ 23.55 $ 10.58 $ 15.79
Cost $ 3,108,065 $ 33,597 $ 1,316,006 $ 747,186 $ 1,868,856
Fidelity
---------------------------------------------------------------------
NON-QUALIFIED FUNDS - (P) Investment Asset Equity Index
Grade Manager Income 500 Growth
ASSETS Fund 174 Fund 175 Fund 172 Fund 176 Fund 171
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 61,427 $ 186,259 $ 1,556,438 $ 468,796 $ 1,840,272
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 12 17 - - -
------------- ------------- ------------- ------------- -------------
61,439 186,276 1,556,438 468,796 1,840,272
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 308 16 191
------------- ------------- ------------- ------------- -------------
Net Assets $ 61,439 $ 186,276 $ 1,556,130 $ 468,780 $ 1,840,081
============= ============= ============= ============= =============
Accumulation Units Outstanding 57,961 167,816 1,330,026 400,667 1,600,070
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.06 $ 1.11 $ 1.17 $ 1.17 $ 1.15
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 4,922 11,796 80,770 6,192 63,023
Net Asset Value $ 12.48 $ 15.79 $ 19.27 $ 75.71 $ 29.20
Cost $ 59,162 $ 177,619 $ 1,448,643 $ 431,174 $ 1,873,746
</TABLE>
Northstar
---------------------------
NON-QUALIFIED FUNDS - (P) Income and High
Growth Yield Bond
ASSETS Fund 120 Fund 127
------------- -------------
Investments (see below)...........................$ 9,158 $ 25,059
Net receivable from Bankers Security for contract
charges and reserve transfers.................. - -
------------- -------------
9,158 25,059
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 3 73
------------- -------------
Net Assets $ 9,155 $ 24,986
============= =============
Accumulation Units Outstanding 8,476 24,738
============= =============
Accumulation Unit Value $ 1.08 $ 1.01
============= =============
Investments basis data:
Shares Owned 804 4,972
Net Asset Value $ 11.39 $ 5.04
Cost $ 9,052 $ 24,759
<TABLE>
Oppenheimer
---------------------------------------------------------------------
QUALIFIED FUNDS - (Q) Capital High Multiple Global
Money Appreciation Income Strategies Securities
ASSETS Fund 044 Fund 045 Fund 046 Fund 047 Fund 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 2,093,920 $ 24,638,487 $ 12,965,804 $ 31,002,573 $ 9,740,355
Net receivable from Bankers Security for contract
charges and reserve transfers................. 75,529 - - - -
------------- ------------- ------------- ------------- -------------
2,169,449 24,638,487 12,965,804 31,002,573 9,740,355
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - 1,488,152 257,049 290,120 88,592
------------- ------------- ------------- ------------- -------------
Net Assets $ 2,169,449 $ 23,150,335 $ 12,708,755 $ 30,712,453 $ 9,651,763
============= ============= ============= ============= =============
Accumulation Units Outstanding 1,475,816 8,254,376 4,795,757 14,609,651 6,517,492
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.47 $ 2.80 $ 2.65 $ 2.10 $ 1.48
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 2,093,920 720,213 1,219,737 2,130,761 649,357
Net Asset Value $ 1.00 $ 34.21 $ 10.63 $ 14.55 $ 15.00
Cost $ 2,093,920 $ 14,742,368 $ 11,534,191 $ 25,087,365 $ 7,395,113
Oppenheimer Alliance
---------------------------------------- ----------------------------
QUALIFIED FUNDS - (Q) Strategic Short-Term Growth and
Bond Bond Growth Multi-Market Income
ASSETS Fund 050 Fund 051 Fund 052 Fund 049 Fund 043
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 1,426,527 $ 74,959 $ 485,318 $ 243,837 $ 2,865,380
Net receivable from Bankers Security for contract
charges and reserve transfers................. - 118 468 - -
------------- ------------- ------------- ------------- -------------
1,426,527 75,077 485,786 243,837 2,865,380
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... 68,822 - - 4,388 16,627
------------- ------------- ------------- ------------- -------------
Net Assets $ 1,357,705 $ 75,077 $ 485,786 $ 239,449 $ 2,848,753
============= ============= ============= ============= =============
Accumulation Units Outstanding 1,201,509 67,637 382,509 221,712 1,778,121
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.13 $ 1.11 $ 1.27 $ 1.08 $ 1.59
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 290,535 $ 6,331 20,608 23,047 181,468
Net Asset Value $ 4.91 $ 11.84 $ 23.55 $ 10.58 $ 15.79
Cost $ 1,371,771 $ 73,170 $ 428,900 $ 224,698 $ 1,977,328
Fidelity
---------------------------------------------------------------------
QUALIFIED FUNDS - (Q) Investment Asset Equity Index
Grade Manager Income 500 Growth
ASSETS Fund 074 Fund 075 Fund 072 Fund 076 Fund 071
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Investments (see below)...........................$ 5,940 $ 184,301 $ 736,326 $ 351,597 $ 1,068,749
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 70 656 825 586 802
------------- ------------- ------------- ------------- -------------
6,010 184,957 737,151 352,183 1,069,551
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - - - -
------------- ------------- ------------- ------------- -------------
Net Assets $ 6,010 $ 184,957 $ 737,151 $ 352,183 $ 1,069,551
============= ============= ============= ============= =============
Accumulation Units Outstanding 5,779 166,628 635,475 301,011 906,399
============= ============= ============= ============= =============
Accumulation Unit Value $ 1.04 $ 1.11 $ 1.16 $ 1.17 $ 1.18
============= ============= ============= ============= =============
Investments basis data:
Shares Owned 476 11,672 38,211 4,644 36,601
Net Asset Value $ 12.48 $ 15.79 $ 19.27 $ 75.71 $ 29.20
Cost $ 5,782 $ 173,612 $ 687,956 $ 322,576 $ 1,071,785
Northstar
---------------------------
QUALIFIED FUNDS - (Q) Income and High
Growth Yield Bond Combined
ASSETS Fund 020 Fund 027 (P & Q)
------------- ------------- -------------
<S> <C> <C> <C>
Investments (see below)...........................$ 44,205 $ 35,018 $ 173,603,749
Net receivable from Bankers Security for contract
charges and reserve transfers.................. 605 138 1,020,131
------------- ------------- -------------
44,810 35,156 174,623,880
LIABILITIES
Net payable to Bankers Security for contract charges
and reserve transfers.......................... - - 2,564,831
------------- ------------- -------------
Net Assets $ 44,810 $ 35,156 $ 172,059,049
============= ============= =============
Accumulation Units Outstanding 43,086 35,156 85,967,772
============= ============= =============
Accumulation Unit Value $ 1.04 $ 1.00
============= =============
Investments basis data:
Shares Owned 3,881 6,948
Net Asset Value $ 11.39 $ 5.04
Cost $ 43,498 $ 34,739
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1995
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
144 145 146 147 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 308,717 $ 95,215 $ 1,407,975 $ 1,803,482 $ 342,019
Expenses -
Mortality and expense guarantee fees............. (69,694) (230,596) (184,254) (286,370) (157,079)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 239,023 (135,381) 1,223,721 1,517,112 184,940
Net realized gain (loss)........................... - 306,187 90,363 397,552 (432,042)
Net unrealized gain (loss) ........................ - 4,985,498 1,157,816 2,394,473 361,987
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 239,023 5,156,304 2,471,900 4,309,137 114,885
Net contracts purchased............................ 681,182 1,265,872 747,847 1,058,369 713,226
Transfers among funds, net......................... (1,677,501) (2,081,250) 11,275 905,073 (3,212,686)
Reserve transfers from Bankers Security............ 62,214 - - 32,242 -
Payments to contract owners -
surrenders and other benefits.................... (2,338,436) (1,184,523) (4,104,406) (5,630,195) (1,235,437)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. (3,033,518) 3,156,403 (873,384) 674,626 (3,620,012)
Net assets, beginning of year...................... 7,489,463 18,612,693 15,755,387 20,878,549 14,909,797
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 4,455,945 $ 21,769,096 $ 14,882,003 $ 21,553,175 $ 11,289,785
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
150 151 152 149 143
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 135,731 $ 1,184 $ - $ - $ 41,930
Expenses -
Mortality and expense guarantee fees............. (18,635) (184) (7,948) (13,558) (28,188)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 117,096 1,000 (7,948) (13,558) 13,742
Net realized gain (loss)........................... 27 4 (4) 381 5,680
Net unrealized gain (loss) ........................ 93,839 396 158,365 58,090 624,379
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 210,962 1,400 150,413 44,913 643,801
Net contracts purchased............................ 253,733 61,001 550,732 12,698 210,540
Transfers among funds, net......................... 2,778,966 2,977 771,998 (446,422) 211,499
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... (40) - (3,116) (238,102) (248,664)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 3,243,621 65,378 1,470,027 (626,913) 817,176
Net assets, beginning of year...................... - - - 1,286,358 1,877,208
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 3,243,621 $ 65,378 $ 1,470,027 $ 659,445 $ 2,694,384
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
174 175 172 176 171
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ - $ - $ 11,881 $ - $ -
Expenses -
Mortality and expense guarantee fees............. (208) (476) (5,507) (1,816) (6,612)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... (208) (476) 6,374 (1,816) (6,612)
Net realized gain (loss)........................... - - (5) (21) (1,345)
Net unrealized gain (loss) ........................ 2,265 8,640 107,795 37,622 (33,474)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 2,057 8,164 114,164 35,785 (41,431)
Net contracts purchased............................ 34,319 127,865 776,410 311,444 546,943
Transfers among funds, net......................... 25,063 50,253 699,031 121,581 1,353,543
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... - (6) (33,475) (30) (18,974)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 61,439 186,276 1,556,130 468,780 1,840,081
Net assets, beginning of year...................... - - - - -
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 61,439 $ 186,276 $ 1,556,130 $ 468,780 $ 1,840,081
============= ============= ============= ============= =============
</TABLE>
NON-QUALIFIED FUNDS - (P) Fund Fund
120 127
------------- -------------
Income -
Reinvested dividends............................$ 341 $ 1,214
Expenses -
Mortality and expense guarantee fees............. (35) (86)
------------- -------------
Net investment income (expense).................... 306 1,128
Net realized gain (loss)........................... - -
Net unrealized gain (loss) ........................ 106 300
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 412 1,428
Net contracts purchased............................ 8,743 23,558
Transfers among funds, net......................... - -
Reserve transfers from Bankers Security............ - -
Payments to contract owners -
surrenders and other benefits.................... - -
------------- -------------
Net increase (decrease) in net assets.............. 9,155 24,986
Net assets, beginning of year...................... - -
------------- -------------
Net assets, end of year...........................$ 9,155 $ 24,986
============= =============
<TABLE>
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1994
NON-QUALIFIED FUNDS - (P) Fund Fund Fund Fund Fund
144 145 146 147 148
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 341,002 $ 2,347,070 $ 1,226,382 $ 1,140,285 $ 235,425
Expenses -
Mortality and expense guarantee fees............. (113,899) (216,228) (180,288) (273,755) (181,855)
------------- ------------- ------------- ------------- -------------
Net investment income.............................. 227,103 2,130,842 1,046,094 866,530 53,570
Net realized gain (loss)........................... - (277,296) (88,139) (52,152) (279,966)
Net unrealized loss ............................... - (3,637,398) (1,566,200) (1,520,836) (1,241,239)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 227,103 (1,783,852) (608,245) (706,458) (1,467,635)
Net contracts purchased............................ 1,974,999 2,419,715 2,546,011 2,281,668 3,839,231
Transfers among funds, net......................... 800,298 (1,196,284) 84,209 (454,708) 995,699
Payments to contract owners -
surrenders and other benefits.................... (1,048,726) (1,164,447) (1,485,331) (1,780,219) (842,745)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 1,953,674 (1,724,868) 536,644 (659,717) 2,524,550
Net assets, beginning of year...................... 5,535,789 20,337,561 15,218,743 21,538,266 12,385,247
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 7,489,463 $ 18,612,693 $ 15,755,387 $ 20,878,549 $ 14,909,797
============= ============= ============= ============= =============
NON-QUALIFIED FUNDS - (P) Fund Fund
149 143
Income - ------------- -------------
Reinvested dividends............................. $ 69,106 $ 41,582
Expenses -
Mortality and expense guarantee fees............. (21,089) (22,843)
------------- -------------
Net investment income.............................. 48,017 18,739
Net realized gain (loss)........................... 23,509 (2,100)
Net unrealized loss ............................... (178,660) (49,907)
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... (107,134) (33,268)
Net contracts purchased............................ 38,135 359,991
Transfers among funds, net......................... (178,128) 24,123
Payments to contract owners -
surrenders and other benefits.................... (305,573) (136,518)
------------- -------------
Net increase (decrease) in net assets.............. (552,700) 214,328
Net assets, beginning of year...................... 1,839,058 1,662,880
------------- -------------
Net assets, end of year............................ $ 1,286,358 $ 1,877,208
============= =============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
YEAR ENDED DECEMBER 31, 1995
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
044 045 046 047 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 178,527 $ 111,627 $ 1,280,419 $ 2,283,891 $ 282,598
Expenses -
Mortality and expense guarantee fees............. (40,392) (260,575) (154,887) (377,774) (134,920)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 138,135 (148,948) 1,125,532 1,906,117 147,678
Net realized gain (loss)........................... - (172,992) (51,148) 172,578 (436,789)
Net unrealized gain (loss) ........................ - 6,248,990 1,136,063 3,493,622 393,144
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 138,135 5,927,050 2,210,447 5,572,317 104,033
Net contracts purchased............................ 294,904 1,663,338 1,307,706 1,811,501 855,562
Transfers among funds, net......................... (1,479,439) (1,692,185) (504,794) 2,428,172 (2,924,746)
Reserve transfers from Bankers Security............ - 45 - 5,948 703
Payments to contract owners -
surrenders and other benefits.................... (555,713) (4,286,192) (2,517,478) (5,052,251) (1,540,007)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. (1,602,113) 1,612,056 495,881 4,765,687 (3,504,455)
Net assets, beginning of year...................... 3,771,562 21,538,279 12,212,874 25,946,766 13,156,218
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 2,169,449 $ 23,150,335 $ 12,708,755 $ 30,712,453 $ 9,651,763
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
050 051 052 049 043
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 69,702 $ 2,192 $ 668 $ - $ 45,965
Expenses -
Mortality and expense guarantee fees............. (10,439) (348) (2,781) (5,263) (30,062)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... 59,263 1,844 (2,113) (5,263) 15,903
Net realized gain (loss)........................... 1,279 229 409 565 6,527
Net unrealized gain (loss) ........................ 54,756 1,789 56,418 21,618 679,794
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 115,298 3,862 54,714 16,920 702,224
Net contracts purchased............................ 68,595 31,462 153,426 7,296 248,183
Transfers among funds, net......................... 1,282,435 39,768 290,304 (91,928) 247,265
Reserve transfers from Bankers Security............ - - - - (552)
Payments to contract owners -
surrenders and other benefits.................... (108,623) (15) (12,658) (224,057) (367,438)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 1,357,705 75,077 485,786 (291,769) 829,682
Net assets, beginning of year...................... - - - 531,218 2,019,071
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 1,357,705 $ 75,077 $ 485,786 $ 239,449 $ 2,848,753
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
074 075 072 076 071
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ - $ - $ 6,510 $ - $ -
Expenses -
Mortality and expense guarantee fees............. (12) (717) (2,378) (1,294) (2,793)
------------- ------------- ------------- ------------- -------------
Net investment income (expense).................... (12) (717) 4,132 (1,294) (2,793)
Net realized gain (loss)........................... - 9 58 129 (1,949)
Net unrealized gain (loss) ........................ 158 10,689 48,370 29,021 (3,036)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 146 9,981 52,560 27,856 (7,778)
Net contracts purchased............................ 5,226 90,952 313,279 101,983 262,907
Transfers among funds, net......................... 638 84,972 372,505 222,442 820,266
Reserve transfers from Bankers Security............ - - - - -
Payments to contract owners -
surrenders and other benefits.................... - (948) (1,193) (98) (5,844)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 6,010 184,957 737,151 352,183 1,069,551
Net assets, beginning of year...................... - - - - -
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 6,010 $ 184,957 $ 737,151 $ 352,183 $ 1,069,551
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund Combined
020 027 (P & Q)
------------- ------------- -------------
<S> <C> <C> <C>
Income -
Reinvested dividends............................$ 1,622 $ 1,781 $ 8,415,191
Expenses -
Mortality and expense guarantee fees............. (171) (150) (2,036,202)
------------- ------------- -------------
Net investment income (expense).................... 1,451 1,631 6,378,989
Net realized gain (loss)........................... - - (114,318)
Net unrealized gain (loss) ........................ 707 279 22,130,479
------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 2,158 1,910 28,395,150
Net contracts purchased............................ 4,377 583 14,605,762
Transfers among funds, net......................... 38,292 32,678 (1,319,955)
Reserve transfers from Bankers Security............ - - 100,600
Payments to contract owners -
surrenders and other benefits.................... (17) (15) (29,707,951)
------------- ------------- -------------
Net increase (decrease) in net assets.............. 44,810 35,156 12,073,606
Net assets, beginning of year...................... - - 159,985,443
------------- ------------- -------------
Net assets, end of year...........................$ 44,810 $ 35,156 $ 172,059,049
============= ============= =============
STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS (continued)
YEAR ENDED DECEMBER 31, 1994
QUALIFIED FUNDS - (Q) Fund Fund Fund Fund Fund
044 045 046 047 048
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income -
Reinvested dividends............................$ 165,703 $ 2,369,636 $ 952,734 $ 1,423,396 $ 186,273
Expenses -
Mortality and expense guarantee fees............. (53,785) (252,668) (137,245) (337,351) (156,657)
------------- ------------- ------------- ------------- -------------
Net investment income.............................. 111,918 2,116,968 815,489 1,086,045 29,616
Net realized gain (loss)........................... - (226,803) (362,902) (81,626) (119,418)
Net unrealized loss ............................... - (3,663,040) (939,711) (1,892,482) (1,014,770)
------------- ------------- ------------- ------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... 111,918 (1,772,875) (487,124) (888,063) (1,104,572)
Net contracts purchased............................ 1,706,431 4,222,899 1,906,540 3,350,261 4,775,010
Transfers among funds, net......................... (1,107,476) 1,254,822 1,016,356 (1,106,208) 873,452
Payments to contract owners -
surrenders and other benefits.................... (618,231) (1,854,124) (1,463,222) (2,753,609) (977,154)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets.............. 92,642 1,850,722 972,550 (1,397,619) 3,566,736
Net assets, beginning of year...................... 3,678,920 19,687,557 11,240,324 27,344,385 9,589,482
------------- ------------- ------------- ------------- -------------
Net assets, end of year...........................$ 3,771,562 $ 21,538,279 $ 12,212,874 $ 25,946,766 $ 13,156,218
============= ============= ============= ============= =============
QUALIFIED FUNDS - (Q) Fund Fund
049 043
------------- -------------
<S> <C> <C>
Income -
Reinvested dividends............................. $ 37,377 $ 43,298
Expenses -
Mortality and expense guarantee fees............. (10,564) (23,946)
------------- -------------
Net investment income.............................. 26,813 19,352
Net realized gain (loss)........................... 14,436 (5,091)
Net unrealized loss ............................... (94,532) (45,186)
------------- -------------
Increase (decrease) in net assets resulting from
operations....................................... (53,283) (30,925)
Net contracts purchased............................ 62,245 329,393
Transfers among funds, net......................... (387,337) 201,034
Payments to contract owners -
surrenders and other benefits.................... (92,253) (136,403)
------------- -------------
Net increase (decrease) in net assets.............. (470,628) 363,099
Net assets, beginning of year...................... 1,001,846 1,655,972
------------- -------------
Net assets, end of year............................ $ 531,218 $ 2,019,071
============= =============
QUALIFIED FUNDS - (Q) Combined
(P & Q)
-------------
<S> <C>
Income -
Reinvested dividends.............................. $ 10,579,269
Expenses -
Mortality and expense guarantee fees.............. (1,982,173)
-------------
Net investment income............................... 8,597,096
Net realized gain (loss)............................ (1,457,548)
Net unrealized loss ................................ (15,843,961)
-------------
Increase (decrease) in net assets resulting from
operations........................................ (8,704,413)
Net contracts purchased............................. 29,812,529
Transfers among funds, net.......................... 819,852
Payments to contract owners -
surrenders and other benefits..................... (14,658,555)
-------------
Net increase (decrease) in net assets............... 7,269,413
Net assets, beginning of year....................... 152,716,030
-------------
Net assets, end of year............................. $ 159,985,443
=============
See accompanying notes to financial statements.
</TABLE>
BANKERS SECURITY VARIABLE ANNUITY FUNDS P AND Q FOR THE USA PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
Bankers Security Variable Annuity Funds P and Q for The USA Plan (the
"Separate Accounts") were established under the provisions of New York
insurance laws by Bankers Security Life Insurance Society ("Bankers Security")
in April 1987 (Funds 144, 145, 146, 147, 044, 045, 046 and 047), in November
1990 (Funds 148, 149, 048 and 049), in December 1990 (Fund 043), in January
1991 (Fund 143), in April 1995 (Funds 150, 151, 152, 050, 051, and 052), and
in May 1995 (Funds 174, 175, 172, 176, 171, 120, 127, 074, 075, 072, 076, 071,
020 and 027). The Separate Accounts are registered with the Securities and
Exchange Commission as a unit investment trust under the Investment Company
Act of 1940, as amended (the "Act"), and are used to fund certain benefits for
variable annuity policies issued by Bankers Security. The assets of the
Separate Accounts are invested in open-end diversified management investment
companies registered under the Act.
NOTE 2 - INVESTMENTS
Security transactions are recorded on the trade date at the purchase cost or
sales proceeds, as applicable. Investments owned are valued at closing market
quotations. The difference between beginning of year value and current market
value of investments owned is recorded as an unrealized gain (loss) on
investments. Dividends received are generally recorded as income on the record
date and are reinvested to purchase additional mutual fund shares. The
aggregate cost of shares acquired and the aggregate proceeds from shares sold
for the year ended December 31, 1995, were:
<TABLE>
Cost of Proceeds Cost of Proceeds Cost of Proceeds
Shares from Shares from Shares from
Fund Acquired Shares Sold Fund Acquired Shares Sold Fund Acquired Shares Sold
<S> <C> <C> <S> <C> <C> <S> <C> <C>
144 $9,508,913 $14,986,006 175 $ 177,619 $ - 050 $ 1,516,340 $ 145,848
145 8,360,599 8,013,824 172 1,491,320 42,672 051 87,233 14,292
146 6,895,733 7,500,788 176 435,133 3,938 052 494,496 66,005
147 8,282,284 10,960,144 171 1,889,683 14,592 049 22,263 433,686
148 3,147,993 7,866,686 120 9,052 - 043 586,569 453,027
150 3,119,035 10,997 127 24,759 - 074 5,782 -
151 34,772 1,179 044 4,836,039 7,674,735 075 174,406 803
152 1,466,668 150,658 045 3,236,969 6,689,888 072 695,759 7,861
149 - 685,181 046 4,437,272 3,906,275 076 332,613 10,166
143 505,789 355,775 047 8,056,231 7,158,728 071 1,137,984 64,250
174 59,162 - 048 3,242,073 7,168,353 020 43,498 -
027 34,739 -
</TABLE>
NOTE 3 - TAXES
Bankers Security is taxed as a life insurance company under the Internal
Revenue Code of 1986, as amended (the "Code"). Since the Separate Accounts
are not separate entities from Bankers Security, and their operations form a
part of Bankers Security, they will not be taxed separately as a "regulated
investment company" under Sub-chapter M of the Code. Under existing Federal
income tax law, investment income of the Separate Accounts, to the extent that
it is applied to increase reserves under a contract, is not taxed and may be
compounded through reinvestment without additional tax to Bankers Security.
NOTE 4 - CHARGES AND TRANSFERS
Bankers Security does not deduct a sales charge from purchase payments made for
these contracts. All or a portion of the accumulated value may be withdrawn
during the accumulation period. However, purchase payments that are partially
or totally withdrawn from the contract prior to eight years from their date of
payment will be charged (with certain exceptions) a contingent deferred sales
charge of a percentage of the amount of the purchase payment withdrawn. No
such charge will be imposed against withdrawals of purchase payments held for
at least eight years. The withdrawn amounts shall be considered withdrawals
of purchase payments until the total of all purchase payments in the
accumulated value have been withdrawn. A contingent deferred sales charge will
not be made against that portion of withdrawals which are in excess of the
total of all purchase payments.
Within the period applicable to the contingent deferred sales charge for
purchase payments, the contract owner may surrender up to 10% of such purchase
payments held for at least one year, within stated guidelines, without paying a
contingent deferred sales charge. This "free withdrawal" amount is cumulative
to 20% of such purchase payments if no withdrawals are taken for a two year
period.
Bankers Security deducts a daily charge equal to an annual rate of 1.25% of the
daily asset value of the Separate Accounts for mortality and expense risks
assumed. In addition, on each contract anniversary, Bankers Security will
deduct an annual maintenance charge of $30 from the accumulated value of the
contract. Where applicable, premium taxes are charged.
The amount of reserves for contracts in the distribution period is determined
by actuarial assumptions which meet statutory requirements. Gains and losses
resulting from actual mortality experience, the full responsibility for which
is assumed by Bankers Security, are offset by transfers to, or from, Bankers
Security.
NOTE 5 - TRANSFERS AMONG FUNDS
Bankers Security established a fixed fund in 1989 to which contract owners in
the Separate Accounts could transfer all or part of their contract equity.
This fund is reported in the General Account of Bankers Security.
Transfer activity to/from the fixed annuity fund is included in Transfers
Among Funds in the Statements of Operations and Changes in Net Assets. Net
transfers to the fixed fund approximated $1,345,000 for the year ended December
31, 1995.
NOTE 6 - RELATED PARTIES
On January 17, 1995, Bankers Security became an indirect wholly-owned
subsidiary of ReliaStar Financial Corp. ("ReliaStar"), an insurance holding
company based in Minneapolis, Minnesota. In conjunction with this merger, in
May 1995, the Northstar Income and Growth, and High Yield Bond Funds were added
as investment options. These Funds are affiliates of Bankers Security
through ReliaStar.
NOTE 7 - SUPPLEMENTARY INFORMATION
Accumulation unit values for a unit of the funds outstanding at December 31,
were:
<TABLE>
<CAPTION>
Fund 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
144 $ 1.49 $ 1.42 $ 1.38 $ 1.36 $ 1.32 $ 1.26 $ 1.18 $ 1.10 $ 1.03
145 2.60 1.98 2.17 1.73 1.53 1.01 1.22 0.97 0.89
146 2.60 2.19 2.29 1.83 1.58 1.19 1.15 1.11 0.98
147 2.15 1.80 1.85 1.62 1.50 1.30 1.34 1.17 0.99
148 1.48 1.47 1.58 0.94 1.03 1.00 n/a n/a n/a
150 1.12 n/a n/a n/a n/a n/a n/a n/a n/a
151 1.05 n/a n/a n/a n/a n/a n/a n/a n/a
152 1.25 n/a n/a n/a n/a n/a n/a n/a n/a
149 1.08 1.03 1.11 1.06 1.06 1.00 n/a n/a n/a
143 1.57 1.17 1.19 1.08 1.02 n/a n/a n/a n/a
174 1.06 n/a n/a n/a n/a n/a n/a n/a n/a
175 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
172 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
176 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
171 1.15 n/a n/a n/a n/a n/a n/a n/a n/a
120 1.08 n/a n/a n/a n/a n/a n/a n/a n/a
127 1.01 n/a n/a n/a n/a n/a n/a n/a n/a
044 1.47 1.41 1.37 1.35 1.31 1.25 1.17 1.09 1.03
045 2.80 2.14 2.34 1.86 1.64 1.08 1.31 1.04 0.93
046 2.65 2.23 2.33 1.87 1.61 1.22 1.18 1.14 1.00
047 2.10 1.75 1.81 1.58 1.47 1.26 1.30 1.15 0.95
048 1.48 1.47 1.58 0.94 1.03 1.00 n/a n/a n/a
050 1.13 n/a n/a n/a n/a n/a n/a n/a n/a
051 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
052 1.27 n/a n/a n/a n/a n/a n/a n/a n/a
049 1.08 1.03 1.11 1.05 1.06 1.00 n/a n/a n/a
043 1.59 1.18 1.20 1.09 1.02 1.00 n/a n/a n/a
074 1.04 n/a n/a n/a n/a n/a n/a n/a n/a
075 1.11 n/a n/a n/a n/a n/a n/a n/a n/a
072 1.16 n/a n/a n/a n/a n/a n/a n/a n/a
076 1.17 n/a n/a n/a n/a n/a n/a n/a n/a
071 1.18 n/a n/a n/a n/a n/a n/a n/a n/a
020 1.04 n/a n/a n/a n/a n/a n/a n/a n/a
027 1.00 n/a n/a n/a n/a n/a n/a n/a n/a
</TABLE>
