<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements
Statements of Assets and Liabilities
June 30, 1996 (unaudited)
(In thousands except per unit data)
U.S.
Money Growth and Precious High Real Estate Government
Market Income Metals Income Securities Securities
Fund Fund Fund Fund Fund Fund
------- ------- ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Money Market Fund, 398,601 shares,
cost $398,601.......................................... $398,601 - - - - -
Growth and Income Fund, 55,439 shares,
cost $783,080.......................................... - 899,223 - - - -
Precious Metals Fund, 7,577 shares,
cost $110,698.......................................... - - 113,044 - - -
High Income Fund, 25,605 shares,
cost $326,481.......................................... - - - 330,309 - -
Real Estate Securities Fund, 12,189 shares,
cost $187,133.......................................... - - - - 218,175 -
U.S. Government Securities Fund, 39,660 shares,
cost $512,991.......................................... - - - - - 508,039
-------- ------- ------- ------- ------- -------
Total assets......................................... 398,601 899,223 113,044 330,309 218,175 508,039
-------- ------- ------- ------- ------- -------
Liabilities:
Accrued mortality and expense risk charges............... 49 25 9 16 12 23
Accrued administrative charges........................... 6 3 1 2 1 3
-------- ------- ------- ------- ------- -------
Total liabilities.................................... 55 28 10 18 13 26
-------- ------- ------- ------- ------- -------
Net assets........................................... $398,546 899,195 113,034 330,291 218,162 508,013
======== ======= ======= ======= ======= =======
Contract owners' equity:
Contracts in accumulation period (note 6)................ $398,366 897,554 113,034 330,267 218,132 507,982
Contracts in annuity payment period (note 2)............. 180 1,641 - 24 30 31
-------- ------- ------- ------- ------- -------
Total contract owners' equity........................ $398,546 899,195 113,034 330,291 218,162 508,013
======== ======= ======= ======= ======= =======
Accumulation units outstanding........................... 30,373 49,475 7,430 18,578 11,340 31,853
======== ======= ======= ======= ======= =======
Accumulation unit value per unit......................... $13.116 18.142 15.213 17.777 19.235 15.948
======== ======= ======= ======= ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Assets and Liabilities (cont.)
June 30, 1996 (unaudited)
(In thousands except per unit data)
Templeton Investment
Utility Zero Zero Zero Global Income Grade
Equity Coupon Coupon Coupon Securities Intermediate
Fund Fund - 2000 Fund - 2005 Fund - 2010 Fund Bond Fund
-------- ------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Utility Equity Fund, 68,479 shares,
cost $1,075,761............................... $1,214,138 - - - - -
Zero Coupon Fund - 2000, 7,268 shares,
cost $101,556................................. - 105,532 - - - -
Zero Coupon Fund - 2005, 4,581 shares,
cost $67,112.................................. - - 70,268 - - -
Zero Coupon Fund - 2010, 4,674 shares,
cost $70,608.................................. - - - 69,920 - -
Templeton Global Income Securities Fund,
15,967 shares, cost $202,997.................. - - - - 200,860 -
Investment Grade Intermediate Bond Fund,
10,890 shares, cost $144,237.................. - - - - - 145,928
---------- ------- ------ ------ ------- -------
Total assets............................... 1,214,138 105,532 70,268 69,920 200,860 145,928
---------- ------- ------ ------ ------- -------
Liabilities:
Accrued mortality and expense risk charges...... 40 8 8 8 13 9
Accrued administrative charges.................. 5 1 1 1 1 1
---------- ------- ------ ------ ------- -------
Total liabilities.......................... 45 9 9 9 14 10
---------- ------- ------ ------ ------- -------
Net assets.................................. $1,214,093 105,523 70,259 69,911 200,846 145,918
========== ======= ====== ====== ======= =======
Contract owners' equity:
Contracts in accumulation period (note 6)....... $1,212,889 105,523 70,259 69,911 200,846 145,908
Contracts in annuity payment period (note 2).... 1,204 - - - - 10
---------- ------- ------ ------ ------- -------
Total contract owners' equity.............. $1,214,093 105,523 70,259 69,911 200,846 145,918
========== ======= ====== ====== ======= =======
Accumulation units outstanding.................. 59,785 5,933 3,624 3,512 12,866 9,429
========== ======= ====== ====== ======= =======
Accumulation unit value per unit................ $20.287 17.786 19.387 19.907 15.610 15.475
========== ======= ====== ====== ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Assets and Liabilities (cont.)
June 30, 1996 (unaudited)
(In thousands except per unit data)
Adjustable Templeton Templeton Templeton
Income U.S. Pacific Rising International Developing
Securities Government Growth Dividends Equity Markets Equity
Fund Fund Fund Fund Fund Fund
-------- -------- ------- ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Income Securities Fund, 75,582 shares,
cost $1,122,487................................. $1,216,115 - - - - -
Adjustable U.S. Government Fund, 15,685 shares,
cost $169,163................................... - 160,297 - - - -
Templeton Pacific Growth Fund, 24,302 shares,
cost $331,297................................... - - 362,098 - - -
Rising Dividends Fund, 34,634 shares,
cost $376,653................................... - - - 460,631 - -
Templeton International Equity Fund,
66,570 shares, cost $840,754.................... - - - - 939,298 -
Templeton Developing Markets Equity Fund,
21,811 shares, cost $224,677.................... - - - - - 241,015
---------- ------- ------- ------- ------- -------
Total assets................................. 1,216,115 160,297 362,098 460,631 939,298 241,015
---------- ------- ------- ------- ------- -------
Liabilities:
Accrued mortality and expense risk charges........ 27 11 13 14 59 1
Accrued administrative charges.................... 3 1 1 2 7 -
---------- ------- ------- ------- ------- -------
Total liabilities............................ 30 12 14 16 66 1
---------- ------- ------- ------- ------- -------
Net assets................................... $1,216,085 160,285 362,084 460,615 939,232 241,014
========== ======= ======= ======= ======= =======
Contract owners' equity:
Contracts in accumulation period (note 6)......... $1,213,524 160,281 361,628 460,079 938,369 239,729
Contracts in annuity payment period (note 2)...... 2,561 4 456 536 863 1,285
---------- ------- ------- ------- ------- -------
Total contract owners' equity................ $1,216,085 160,285 362,084 460,615 939,232 241,014
========== ======= ======= ======= ======= =======
Accumulation units outstanding.................... 59,368 13,135 23,821 34,564 63,438 21,734
========== ======= ======= ======= ======= =======
Accumulation unit value per unit.................. $20.441 12.203 15.181 13.311 14.792 11.030
========== ======= ======= ======= ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Assets and Liabilities (cont.)
June 30, 1996 (unaudited)
(In thousands except per unit data)
Templeton
Templeton Templeton International
Global Global Asset Small Capital Smaller Total
Growth Allocation Cap Growth Companies All
Fund Fund Fund Fund Fund Funds
------- -------- ----- ----- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Investments at net asset value:
Franklin Valuemark Funds:
Templeton Global Growth Fund, 35,996 shares,
cost $403,424........................................... $453,914 - - - -
Templeton Global Asset Allocation Fund, 2,838 shares,
cost $30,473............................................ - 32,269 - - -
Small Cap Fund, 8,157 shares, cost $93,765............... - - 99,113 - -
Capital Growth Fund, 477 shares, cost $4,853............. - - - 4,859 -
Templeton International Smaller Companies Fund,
523 shares, cost $5,285................................. - - - - 5,406
-------- ------ ------ ------ ------
Total assets......................................... 453,914 32,269 99,113 4,859 5,406 8,249,052
-------- ------ ------ ------ ------ ---------
Liabilities:
Accrued mortality and expense risk charges................ 3 5 8 8 12 381
Accrued administrative charges............................ 1 1 1 1 2 46
------- ------ ------ ------ ------ ---------
Total liabilities.................................... 4 6 9 9 14 427
------- ------ ------ ------ ------ ---------
Net assets.. ........................................ $453,910 32,263 99,104 4,850 5,392 8,248,625
======== ====== ====== ====== ====== =========
Contract owners' equity:
Contracts in accumulation period (note 6)................. $451,555 32,064 98,832 4,850 5,369 8,236,951
Contracts in annuity payment period (note 2).............. 2,355 199 272 - 23 11,674
-------- ------ ------ ------ ------ ---------
Total contract owners' equity........................ $453,910 32,263 99,104 4,850 5,392 8,248,625
======== ====== ====== ====== ====== =========
Accumulation units outstanding............................ 36,185 2,817 8,256 478 521 508,515
======== ====== ====== ====== ====== =========
Accumulation unit value per unit.......................... $12.479 11.382 11.971 10.157 10.307
======== ====== ====== ====== ======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Operations
For the period ended June 30, 1996 (unaudited)
(In thousands)
U.S.
Money Growth and Precious High Real Estate Government
Market Income Metals Income Securities Securities
Fund Fund Fund Fund Fund Fund
-------- ------- ------ ------ ------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares.................... $ 10,009 20,139 1,477 27,936 8,702 36,122
-------- ------ ------ ------ ------ ------
Expenses:
Mortality and expense risk charges..................... 2,522 5,299 774 2,030 1,272 3,313
Administrative charges................................. 303 636 93 244 153 398
-------- ------ ------ ------ ------ ------
Total expenses.................................... 2,825 5,935 867 2,274 1,425 3,711
-------- ------ ------ ------ ------ ------
Investment income (loss), net..................... 7,184 14,204 610 25,662 7,277 32,411
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds..... - 71,329 1,354 1,483 - -
-------- ------ ------ ------ ------ ------
Realized gains (losses) on sales of investments:
Proceeds from sales.................................... 198,654 40,662 38,092 53,955 9,534 45,593
Cost of investments sold............................... (198,654) (32,254) (33,792) (48,730) (8,067) (43,154)
-------- ------ ------ ------ ------ ------
Total realized gains (losses) on sales of
investments, net................................. - 8,408 4,300 5,225 1,467 2,439
-------- ------ ------ ------ ------ ------
Realized gains (losses) on investments, net....... - 79,737 5,654 6,708 1,467 2,439
Net change in unrealized appreciation (depreciation)
on investments......................................... - (54,539) (231) (22,452) 4,211 (46,785)
-------- ------ ------ ------ ------ ------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net.. - 25,198 5,423 (15,744) 5,678 (44,346)
-------- ------ ------ ------ ------ ------
Net increase (decrease) in net assets from operations... $ 7,184 39,402 6,033 9,918 12,955 (11,935)
======== ====== ====== ====== ====== ======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Operations (cont.)
For the period ended June 30, 1996 (unaudited)
(In thousands)
Templeton Investment
Utility Zero Zero Zero Global Income Grade
Equity Coupon Coupon Coupon Securities Intermediate
Fund Fund - 2000 Fund - 2005 Fund - 2010 Fund Bond Fund
-------- ------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares............. $ 59,963 5,915 3,734 3,687 15,325 7,793
-------- ----- ----- ------ ------ -----
Expenses:
Mortality and expense risk charges.............. 7,749 672 437 434 1,298 916
Administrative charges.......................... 930 81 52 52 156 110
-------- ----- ----- ------ ------ -----
Total expenses............................. 8,679 753 489 486 1,454 1,026
-------- ----- ----- ------ ------ -----
Investment income (loss), net.............. 51,284 5,162 3,245 3,201 13,871 6,767
Realized gains (losses) and unrealized
appreciation (depreciation) on investments:
Realized capital gain distributions
on mutual funds................................. - 58 - 999 - -
-------- ----- ----- ------ ------ -----
Realized gains (losses) on sales of investments:
Proceeds from sales............................. 153,782 9,460 3,716 19,740 23,446 9,422
Cost of investments sold........................ (135,633) (8,543) (3,292) (17,884) (22,412) (8,896)
-------- ----- ----- ------ ------ -----
Total realized gains (losses) on sales
of investments, net....................... 18,149 917 424 1,856 1,034 526
-------- ----- ----- ------ ------ -----
Realized gains (losses) on investments, net 18,149 975 424 2,855 1,034 526
Net change in unrealized appreciation
(depreciation) on investments................... (27,740) (9,200) (9,018) (14,574) (13,993) (7,195)
-------- ----- ----- ------ ------ -----
Total realized gains (losses) and
unrealized appreciation (depreciation)
on investments, net....................... (9,591) (8,225) (8,594) (11,719) (12,959) (6,669)
-------- ----- ----- ------ ------ -----
Net increase (decrease) in net assets
from operations................................. $ 41,693 (3,063) (5,349) (8,518) 912 98
======== ===== ===== ====== ====== =====
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Operations (cont.)
For the period ended June 30, 1996 (unaudited)
(In thousands)
Adjustable Templeton Templeton Templeton
Income U.S. Pacific Rising International Developing
Securities Government Growth Dividends Equity Markets Equity
Fund Fund Fund Fund Fund Fund
------- -------- ------- ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares............... $62,078 12,299 10,182 9,452 23,741 2,088
------- ------ ------ ------ ------ ------
Expenses:
Mortality and expense risk charges................ 7,447 1,043 2,182 2,714 5,413 1,254
Administrative charges............................ 894 125 262 326 650 151
------- ------ ------ ------ ------ ------
Total expenses............................... 8,341 1,168 2,444 3,040 6,063 1,405
------- ------ ------ ------ ------ ------
Investment income (loss), net................ 53,737 11,131 7,738 6,412 17,678 683
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on
mutual funds...................................... 10,324 - 5,901 - 29,052 3,862
------- ------ ------ ------ ------ ------
Realized gains (losses) on sales of investments:
Proceeds from sales............................... 47,641 30,134 47,463 24,354 19,922 11,058
Cost of investments sold.......................... (42,407) (30,146) (42,210) (20,133) (17,590) (10,534)
------- ------ ------ ------ ------ ------
Total realized gains (losses) on sales
of investments, net......................... 5,234 (12) 5,253 4,221 2,332 524
------- ------ ------ ------ ------ ------
Realized gains (losses) on investments, net.. 15,558 (12) 11,154 4,221 31,384 4,386
Net change in unrealized appreciation
(depreciation) on investments..................... (30,335) (7,661) 17,216 16,782 44,357 19,577
------- ------ ------ ------ ------ ------
Total realized gains (losses) and
unrealized appreciation (depreciation)
on investments, net......................... (14,777) (7,673) 28,370 21,003 75,741 23,963
------- ------ ------ ------ ------ ------
Net increase (decrease) in net assets from operations $38,960 3,458 36,108 27,415 93,419 24,646
======= ====== ====== ====== ====== ======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Operations (cont.)
For the period ended June 30, 1996 (unaudited)
(In thousands)
Templeton
Templeton Templeton International
Global Global Asset Small Capital Smaller Total
Growth Allocation Cap Growth Companies All
Fund Fund Fund Fund Fund Funds
------- -------- ------ ----- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends reinvested in fund shares...................... $ 6,984 14 34 - - 327,674
------- ----- ------ --- --- -------
Expenses:
Mortality and expense risk charges....................... 2,397 145 395 9 13 49,728
Administrative charges................................... 288 17 47 1 2 5,971
------- ----- ------ --- --- -------
Total expenses...................................... 2,685 162 442 10 15 55,699
------- ----- ------ --- --- -------
Investment income (loss), net....................... 4,299 (148) (408) (10) (15) 271,975
Realized gains (losses) and unrealized appreciation
(depreciation) on investments:
Realized capital gain distributions on mutual funds....... 6,984 27 3 - - 131,376
------- ----- ------ --- --- -------
Realized gains (losses) on sales of investments:
Proceeds from sales...................................... 3,062 2,238 16,384 831 17 809,160
Cost of investments sold................................. (2,767) (2,130) (15,671) (846) (16) (745,761)
------- ----- ------ --- --- -------
Total realized gains (losses) on sales
of investments, net................................ 295 108 713 (15) 1 63,399
------- ----- ------ --- --- -------
Realized gains (losses) on investments, net......... 7,279 135 716 (15) 1 194,775
Net change in unrealized appreciation (depreciation)
on investments........................................... 23,705 1,473 5,165 6 122 (111,109)
------- ----- ------ --- --- -------
Total realized gains (losses) and unrealized
appreciation (depreciation) on investments, net.... 30,984 1,608 5,881 (9) 123 83,666
------- ----- ------ --- --- -------
Net increase (decrease) in net assets from operations..... $35,283 1,460 5,473 (19) 108 355,641
======= ===== ====== === === =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Growth and
Money Market Fund Income Fund Precious Metals Fund High Income Fund
---------------- --------------- ---------------- ----------------
1996 1995 1996 1995 1996 1995 1996 1995
------- ------- ------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net....... $ 7,184 17,718 14,204 (1,279) 610 52 25,662 15,167
Realized gains (losses) on
investments, net................... - - 79,737 21,076 5,654 2,150 6,708 3,298
Net change in unrealized appreciation
(depreciation) on investments...... - - (54,539) 147,406 (231) (2,147) (22,452) 27,669
-------- ------- ------- ------- ------- ------ ------- -------
Net increase (decrease) in
net assets from operations..... 7,184 17,718 39,402 167,203 6,033 55 9,918 46,134
-------- ------- ------- ------- ------- ------ ------- -------
Contract transactions (note 6):
Purchase payments................... 88,633 190,018 78,445 98,725 16,558 11,049 27,084 47,086
Transfers between funds............. (35,816) (169,358) 22,023 150,088 (1,501) (17,212) (12,156) 46,491
Surrenders and terminations......... (60,142) (120,722) (51,981) (73,514) (5,588) (11,728) (17,716) (43,591)
Rescissions......................... (1,021) (5,198) (1,811) (1,783) (156) (326) (478) (1,643)
Other transactions (note 2)......... (227) 238 385 240 58 (36) 59 77
-------- ------- ------- ------- ------- ------ ------- -------
Net increase (decrease)
in net assets resulting from
contract transactions.......... (8,573) (105,022) 47,061 173,756 9,371 (18,253) (3,207) 48,420
-------- ------- ------- ------- ------- ------ ------- -------
Increase (decrease) in net assets..... (1,389) (87,304) 86,463 340,959 15,404 (18,198) 6,711 94,554
-------- ------- ------- ------- ------- ------ ------- -------
Net assets at beginning of period..... 399,935 487,239 812,732 471,773 97,630 115,828 323,580 229,026
-------- ------- ------- ------- ------- ------ ------- -------
Net assets at end of period........... $398,546 399,935 899,195 812,732 113,034 97,630 330,291 323,580
======== ======= ======= ======= ======= ====== ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Real Estate U.S. Government Zero Coupon
Securities Fund Securities Fund Utility Equity Fund Fund - 1995
--------------- --------------- ----------------- ------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net....... $ 7,277 3,361 32,411 30,379 51,284 48,876 - 2,395
Realized gains (losses) on
investments, net................... 1,467 1,477 2,439 2,695 18,149 1,589 - 600
Net change in unrealized appreciation
(depreciation) on investments...... 4,211 22,517 (46,785) 54,968 (27,740) 255,500 - (597)
-------- ------- ------- ------- --------- --------- --- -------
Net increase (decrease) in
net assets from operations..... 12,955 27,355 (11,935) 88,042 41,693 305,965 - 2,398
-------- ------- ------- ------- --------- --------- --- -------
Contract transactions (note 6):
Purchase payments................... 12,992 19,829 23,782 47,766 36,512 73,558 - 1,557
Transfers between funds............. 3,725 (12,435) (28,123) (5,307) (87,436) 10,721 - (36,522)
Surrenders and terminations......... (10,151) (17,397) (34,711) (74,423) (81,772) (141,926) - (13,413)
Rescissions......................... (107) (277) (531) (1,813) (529) (1,891) - (49)
Other transactions (note 2)......... (25) 99 297 132 130 537 - 88
-------- ------- ------- ------- --------- --------- --- -------
Net increase (decrease)
in net assets resulting from
contract transactions......... 6,434 (10,181) (39,286) (33,645) (133,095) (59,001) - (48,339)
-------- ------- ------- ------- --------- --------- --- -------
Increase (decrease) in net assets..... 19,389 17,174 (51,221) 54,397 (91,402) 246,964 - (45,941)
-------- ------- ------- ------- --------- --------- --- -------
Net assets at beginning of period..... 198,773 181,599 559,234 504,837 1,305,495 1,058,531 - 45,941
-------- ------- ------- ------- --------- --------- --- -------
Net assets at end of period........... $218,162 198,773 508,013 559,234 1,214,093 1,305,495 - -
======== ======= ======= ======= ========= ========= === =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Zero Coupon Zero Coupon Zero Coupon Templeton Global
Fund - 2000 Fund - 2005 Fund - 2010 Income Securities Fund
--------------- ------------- ------------- ----------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ----- ------ ------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net........... $ 5,162 2,895 3,245 1,752 3,201 1,068 13,871 5,291
Realized gains (losses) on
investments, net....................... 975 1,081 424 753 2,855 2,987 1,034 (206)
Net change in unrealized appreciation
(depreciation) on investments.......... (9,200) 12,514 (9,018) 13,063 (14,574) 15,696 (13,993) 22,286
-------- ------- ------ ------ ------ ------ ------- -------
Net increase (decrease) in
net assets from operations......... (3,063) 16,490 (5,349) 15,568 (8,518) 19,751 912 27,371
-------- ------- ------ ------ ------ ------ ------- -------
Contract transactions (note 6):
Purchase payments....................... 8,311 16,203 6,696 13,119 7,074 12,239 6,812 13,098
Transfers between funds................. (3,404) 13,339 (1,482) 4,711 (2,704) 9,807 (13,086) (21,421)
Surrenders and terminations............. (7,162) (10,927) (2,765) (4,654) (2,982) (5,624) (13,856) (29,898)
Rescissions............................. (142) (263) (134) (185) (110) (469) (156) (400)
Other transactions (note 2)............. 18 (17) 1 (23) 15 177 77 25
-------- ------- ------ ------ ------ ------ ------- -------
Net increase (decrease) in
net assets resulting from
contract transactions.............. (2,379) 18,335 2,316 12,968 1,293 16,130 (20,209) (38,596)
-------- ------- ------ ------ ------ ------ ------- -------
Increase (decrease) in net assets......... (5,442) 34,825 (3,033) 28,536 (7,225) 35,881 (19,297) (11,225)
-------- ------- ------ ------ ------ ------ ------- -------
Net assets at beginning of period......... 110,965 76,140 73,292 44,756 77,136 41,255 220,143 231,368
-------- ------- ------ ------ ------ ------ ------- -------
Net assets at end of period............... $105,523 110,965 70,259 73,292 69,911 77,136 200,846 220,143
======== ======= ====== ====== ====== ====== ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Investment Grade Adjustable U.S. Templeton
Intermediate Bond Fund Income Securities Fund Government Fund Pacific Growth Fund
---------------- ----------------- -------------- ---------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net.... $ 6,767 3,922 53,737 44,301 11,131 9,723 7,738 1,633
Realized gains (losses) on
investments, net................ 526 624 15,558 7,100 (12) (1,327) 11,154 3,150
Net change in unrealized
appreciation (depreciation)
on investments.................. (7,195) 7,237 (30,335) 145,457 (7,661) 6,258 17,216 14,929
-------- ------- --------- --------- ------- ------- ------- -------
Net increase (decrease) in
net assets from operations.. 98 11,783 38,960 196,858 3,458 14,654 36,108 19,712
-------- ------- --------- --------- ------- ------- ------- -------
Contract transactions (note 6):
Purchase payments................ 8,204 15,136 92,086 145,910 21,783 43,555 20,493 27,022
Transfers between funds.......... (4,453) 364 (17,930) 33,034 (28,098) (75,287) 16,757 (52,319)
Surrenders and terminations...... (7,582) (16,323) (70,315) (125,202) (10,863) (27,666) (18,066) (35,125)
Rescissions...................... (226) (379) (2,308) (3,470) (525) (1,087) (177) (1,057)
Other transactions (note 2)...... (5) (24) 449 670 23 296 126 (45)
-------- ------- --------- --------- ------- ------- ------- -------
Net increase (decrease) in
net assets resulting from
contract transactions....... (4,062) (1,226) 1,982 50,942 (17,680) (60,189) 19,133 (61,524)
-------- ------- --------- --------- ------- ------- ------- -------
Increase (decrease) in net assets.. (3,964) 10,557 40,942 247,800 (14,222) (45,535) 55,241 (41,812)
-------- ------- --------- --------- ------- ------- ------- -------
Net assets at beginning of period.. 149,882 139,325 1,175,143 927,343 174,507 220,042 306,843 348,655
-------- ------- --------- --------- ------- ------- ------- -------
Net assets at end of period........ $145,918 149,882 1,216,085 1,175,143 160,285 174,507 362,084 306,843
======== ======= ========= ========= ======= ======= ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Templeton
Rising Templeton International Developing Markets Templeton
Dividends Fund Equity Fund Equity Fund Global Growth Fund
---------------- --------------- --------------- --------------
1996 1995 1996 1995 1996 1995 1996 1995
------- ------ ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net....... $ 6,412 2,452 17,678 1,998 683 (1,241) 4,299 (2,008)
Realized gains (losses) on
investments, net................... 4,221 1,323 31,384 20,155 4,386 (277) 7,279 303
Net change in unrealized appreciation
(depreciation) on investments...... 16,782 81,539 44,357 42,587 19,577 3,149 23,705 26,429
-------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in
net assets from operations..... 27,415 85,314 93,419 64,740 24,646 1,631 35,283 24,724
-------- ------- ------- ------- ------- ------- ------- -------
Contract transactions (note 6):
Purchase payments................... 29,824 42,756 58,128 99,403 32,123 42,027 78,353 119,490
Transfers between funds............. 2,245 50,303 34,652 (30,418) 41,320 22,865 33,116 46,237
Surrenders and terminations......... (21,337) (35,907) (41,253) (72,338) (7,370) (7,387) (14,362) (15,658)
Rescissions......................... (634) (750) (737) (2,115) (257) (1,069) (832) (1,966)
Other transactions (note 2)......... 110 131 353 59 71 (55) 68 64
-------- ------- ------- ------- ------- ------- ------- -------
Net increase (decrease) in
net assets resulting from
contract transactions.......... 10,208 56,533 51,143 (5,409) 65,887 56,381 96,343 148,167
-------- ------- ------- ------- ------- ------- ------- -------
Increase (decrease) in net assets..... 37,623 141,847 144,562 59,331 90,533 58,012 131,626 172,891
-------- ------- ------- ------- ------- ------- ------- -------
Net assets at beginning of period..... 422,992 281,145 794,670 735,339 150,481 92,469 322,284 149,393
-------- ------- ------- ------- ------- ------- ------- -------
Net assets at end of period........... $460,615 422,992 939,232 794,670 241,014 150,481 453,910 322,284
======== ======= ======= ======= ======= ======= ======= =======
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Templeton Templeton
Global Asset International Smaller
Allocation Fund Small Cap Fund Capital Growth Fund Companies Fund
-------------- ------------- ------------- --------------
1996 1995 1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net................ $ (148) 127 (408) (25) (10) - (15) -
Realized gains (losses) on investments, net.. 135 71 716 - (15) - 1 -
Net change in unrealized appreciation
(depreciation) on investments............... 1,473 323 5,165 183 6 - 122 -
------- ------ ------ ----- ----- ----- ----- ----
Net increase (decrease) in net assets
from operations......................... 1,460 521 5,473 158 (19) - 108 -
------- ------ ------ ----- ----- ----- ----- ----
Contract transactions (note 6):
Purchase payments............................ 9,444 5,580 23,676 2,140 1,223 - 942 -
Transfers between funds...................... 8,050 9,316 59,891 11,013 3,650 - 4,385 -
Surrenders and terminations.................. (884) (1,163) (3,183) (36) (4) - (22) -
Rescissions.................................. (36) (27) (165) (19) - - (21) -
Other transactions (note 2).................. (5) 7 152 4 - - - -
------- ------ ------ ------ ----- ----- ----- ----
Net increase (decrease) in net assets
resulting from contract transactions.... 16,569 13,713 80,371 13,102 4,869 - 5,284 -
------- ------ ------ ------ ----- ----- ----- ----
Increase (decrease) in net assets.............. 18,029 14,234 85,844 13,260 4,850 - 5,392 -
------- ------ ------ ------ ----- ----- ----- ----
Net assets at beginning of period.............. 14,234 - 13,260 - - - - -
------- ------ ------ ------ ----- ----- ----- ----
Net assets at end of period.................... $32,263 14,234 99,104 13,260 4,850 - 5,392 -
======= ====== ====== ====== ===== ===== ===== ====
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
===========================================================================================================================
Financial Statements (cont.)
Statements of Changes in Net Assets (cont.)
For the period ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
(In thousands)
Total All Funds
-------------------
1996 1995
------ ------
<S> <C>
Increase (decrease) in net assets:
Operations:
Investment income (loss), net...................................................................... $ 271,975 188,557
Realized gains (losses) on investments, net........................................................ 194,775 68,622
Net change in unrealized appreciation (depreciation) on investments................................ (111,109) 896,966
---------- ---------
Net increase (decrease) in net assets from operations.......................................... 355,641 1,154,145
---------- ---------
Contract transactions (note 6):
Purchase payments.................................................................................. 689,178 1,087,266
Transfers between funds............................................................................ (6,375) (11,990)
Surrenders and terminations........................................................................ (484,067) (884,622)
Rescissions........................................................................................ (11,093) (26,236)
Other transactions (note 2)........................................................................ 2,130 2,644
---------- ---------
Net increase (decrease) in net assets resulting from contract transactions..................... 189,773 167,062
---------- ---------
Increase (decrease) in net assets.................................................................... 545,414 1,321,207
---------- ---------
Net assets at beginning of period.................................................................... 7,703,211 6,382,004
---------- ---------
Net assets at end of period.......................................................................... $8,248,625 7,703,211
========== =========
<FN>
See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
================================================================================
Notes to Financial Statements
June 30, 1996 (unaudited)
1. Organization
Allianz Life Variable Account B (Variable Account) is a segregated investment
account of Allianz Life Insurance Company of North America (Allianz Life) and is
registered with the Securities and Exchange Commission as a unit investment
trust pursuant to the provisions of the Investment Company Act of 1940 (as
amended). The Variable Account was established on May 31, 1985 and commenced
operations January 24, 1989. Accordingly, it is an accounting entity wherein
all segregated account transactions are reflected.
The Variable Account's assets are the property of Allianz Life and are held for
the benefit of the owners and other persons entitled to payments under variable
annuity contracts issued through the Variable Account and underwritten by
Allianz Life. The assets of the Variable Account, equal to the reserves and
other liabilities of the Variable Account, are not chargeable with liabilities
that arise from any other business which Allianz Life may conduct.
The Variable Account's sub-accounts may invest, at net asset values, in one or
more of the funds of the Franklin Valuemark Funds (FVF), managed by Franklin
Advisers, Inc., in accordance with the selection made by the contract owner.
Not all funds are available as investment options for the products which
comprise the Variable Account.
Certain officers and trustees of the FVF are also officers and/or directors
of Franklin Advisers, Inc. and/or Allianz Life.
2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investments
Investments of the Variable Account are valued daily at market value using net
asset values provided by Franklin Advisers, Inc.
Realized investment gains include realized gain distributions received from the
respective funds and gains on the sale of fund shares as determined by the
average cost method. Realized gain distributions are reinvested in the
respective funds. Dividend distributions received from the FVF are reinvested in
additional shares of the FVF and are recorded as income to the Variable Account
on the ex-dividend date.
A Fixed Account investment option is available to deferred annuity contract
owners. This account is comprised of equity and fixed income investments which
are part of the general assets of Allianz Life. The liabilities of the Fixed
Account are part of the general obligations of Allianz Life and are not included
in the Variable Account. The guaranteed minimum rate of return on the Fixed
Account is 3%.
The Templeton Global Asset Allocation Fund, Fixed Account and Small Cap Fund
were added as available investment options on May 1, 1995, October 1, 1995 and
November 1, 1995, respectively. The Zero Coupon - 1995 Fund matured and was
closed on December 15, 1995. The Capital Growth Fund and Templeton International
Smaller Companies Fund were added as available investment options on May 1,
1996.
On May 1, 1995, the Equity Growth Fund name was changed to Growth and Income
Fund. The Global Income Fund name was changed to Templeton Global Income
Securities Fund on May 1, 1996.
Contracts in Annuity Payment Period
Annuity reserves are computed for currently payable contracts according to the
1983 Individual Annuity Mortality Table, using an assumed investment return
(AIR) equal to the AIR of the specific contracts, either 3% or 5%. Charges to
annuity reserves for mortality and risk expense are reimbursed to Allianz Life
if the reserves required are less than originally estimated. If additional
reserves are required, Allianz Life reimburses the account.
Expenses
Asset Based Expenses
A mortality and expense risk charge is deducted from the Variable Account on a
daily basis equal, on an annual basis, to 1.25% of the daily net assets of the
Variable Account.
An administrative charge is deducted from the Variable Account on a daily basis
equal, on an annual basis, to 0.15% of the daily net assets of the Variable
Account.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
================================================================================
Notes to Financial Statements (cont.)
June 30, 1996 (unaudited)
2. Significant Accounting Policies (cont.)
Expenses (cont.)
Contract Based Expenses
A contract maintenance charge is paid by the contract owner annually from each
deferred annuity contract by liquidating contract units at the end of the
contract year and at the time of full surrender. The amount of the charge is $30
each year. Contract maintenance charges paid by the contract owners during the
period ended June 30, 1996 (unaudited) and the year ended December 31, 1995 were
$2,250,020 and $4,294,361, respectively. These contract charges are reflected in
the Statements of Changes in Net Assets as other transactions.
A contingent deferred sales charge is deducted from the contract value at the
time of a surrender. This charge applies only to a surrender of purchase
payments received within five years of the date of surrender. For this purpose,
purchase payments are allocated on a first-in, first-out basis. The amount of
the contingent deferred sales charge is calculated by: (a) allocating purchase
payments to the amount surrendered; and (b) multiplying each allocated purchase
payment that has been held under the contract for the period shown below by the
charge shown below:
<TABLE>
<CAPTION>
Valuemark II Valuemark III
--------------------------- ----------------------------
Years Since Payment Charge Years Since Payment Charge
------------------- ------ ------------------- ------
<S> <C> <C>
0-1 5% 0-1 6%
1-2 5% 1-2 5%
2-3 4% 2-3 4%
3-4 3% 3-4 3%
4-5 1.5% 4-5 1.5%
5+ 0% 5+ 0%
</TABLE>
and (c) adding the products of each multiplication in (b) above.
A deferred annuity contract owner may, not more frequently than once annually on
a cumulative basis, make a surrender each contract year of fifteen percent (15%)
of purchase payments paid, less any prior surrenders, without incurring a
contingent deferred sales charge. For a partial surrender, the contingent
deferred sales charge will be deducted from the remaining contract value, if
sufficient; otherwise it will be deducted from the amount surrendered. Total
contingent deferred sales charges paid by the contract owners for the period
ended June 30, 1996 (unaudited) and the year ended December 31, 1995 were
$5,444,241 and $12,373,225, respectively.
Currently, twelve transfers are permitted each contract year. Thereafter, the
fee is $25 per transfer, or 2% of the amount transferred, if less. Currently,
transfers associated with the dollar cost averaging program are not counted.
Total transfer charges paid by the contract owners for the period ended June 30,
1996 (unaudited) and the year ended December 31, 1995 were $44,417 and $119,180,
respectively. Transfer charges are reflected in the Statements of Changes in Net
Assets as other transactions. Transfers to the Fixed Account for the period
ended June 30, 1996 (unaudited) and the year ended December 31, 1995 were
$6,375,180 and $11,989,631, respectively.
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the contract values. Allianz Life may, in its sole
discretion, pay taxes when due and deduct that amount from the contract value at
a later date. Payment at an earlier date does not waive any right Allianz Life
may have to deduct such amounts at a later date.
On certain contracts, a systematic withdrawal plan is available which allows an
owner to withdraw up to 9% of purchase payments less prior surrenders annually,
paid monthly or quarterly, without incurring a contingent deferred sales charge.
The exercise of the systematic withdrawal plan in any contract year replaces the
15% penalty free privilege for that year.
A rescission is defined as a contract that is returned to the Company by the
Contract Owner and canceled within the free-look period, generally within 10
days.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
================================================================================
Notes to Financial Statements (cont.)
June 30, 1996 (unaudited)
3. Capitalization
Allianz Life provides capital for the establishment of new funds as investment
options of the Variable Account. The capitalization transactions were as follows
during the period ended June 30, 1996 (unaudited) and the year ended December
31, 1995:
<TABLE>
<CAPTION>
Capitalization Date of Market Value Date of Current
Fund Amount Capitalization at Withdrawal Withdrawal Market Value
- ------------------------------------------------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Templeton Global Asset Allocation Fund........... $500,000 4/18/95 $525,500 12/21/95 -
Small Cap Fund................................... 250,000 9/18/95 313,250 5/29/96 -
Capital Growth Fund.............................. 250,000 4/30/96 - - $254,500
Templeton International Smaller Companies Fund... 250,000 4/30/96 - - 258,250
</TABLE>
4. Investment Transactions
The sub-account purchases of fund shares, including reinvestment of dividend
distributions, were as follows during the period ended June 30, 1996 (unaudited)
(in thousands):
<TABLE>
<CAPTION>
<S> <C>
Money Market Fund................................. $197,013
Growth and Income Fund............................ 172,871
Precious Metals Fund.............................. 49,380
High Income Fund.................................. 77,724
Real Estate Securities Fund....................... 23,116
U.S. Government Securities Fund................... 38,439
Utility Equity Fund............................... 71,297
Zero Coupon Fund - 2000........................... 12,244
Zero Coupon Fund - 2005........................... 9,240
Zero Coupon Fund - 2010........................... 25,197
Templeton Global Income Securities Fund........... 16,998
Investment Grade Intermediate Bond Fund........... 12,041
Income Securities Fund............................ 113,097
Adjustable U.S. Government Fund................... 23,493
Templeton Pacific Growth Fund..................... 80,084
Rising Dividends Fund............................. 40,727
Templeton International Equity Fund............... 117,341
Templeton Developing Markets Equity Fund.......... 81,419
Templeton Global Growth Fund...................... 110,534
Templeton Global Asset Allocation Fund............ 18,579
Small Cap Fund.................................... 96,332
Capital Growth Fund............................... 5,699
Templeton International Smaller Companies Fund.... 5,301
</TABLE>
5. Federal Income Taxes
Operations of the Variable Account form a part of, and are taxed with,
operations of Allianz Life, which is taxed as a life insurance company under the
Internal Revenue Code.
Allianz Life does not expect to incur any federal income taxes in the operation
of the Variable Account. If, in the future, Allianz Life determines that the
Variable Account may incur federal income taxes, it may then assess a charge
against the Variable Account for such taxes.
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
================================================================================
Notes to Financial Statements (cont.)
June 30, 1996 (unaudited)
6. Contract Transactions - Accumulation Unit Activity (In thousands)
Transactions in units for each fund for the period ended June 30, 1996
(unaudited) and the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Growth Real U.S. Zero
Money and Precious High Estate Government Utility Coupon
Market Income Metals Income Securities Securities Equity Fund -
Fund Fund Fund Fund Fund Fund Fund 1995
------ ----- ------ ----- ------ ------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1994.......................... 39,437 35,695 8,285 15,679 11,645 36,490 70,082 3,195
Contract transactions:
Purchase payments.......................... 15,069 6,403 796 2,877 1,233 3,115 4,303 106
Transfers between funds.................... (13,495) 9,757 (1,290) 2,959 (792) (266) 736 (2,398)
Surrenders and terminations................ (9,580) (4,859) (846) (2,661) (1,077) (4,916) (8,372) (905)
Rescissions................................ (410) (118) (24) (102) (17) (118) (113) (3)
Other transactions......................... 19 15 (2) 4 6 8 33 5
------ ------ ------ ------ ------ ------ ------ -----
Net increase (decrease) in
accumulation units resulting
from contract transactions........... (8,397) 11,198 (1,366) 3,077 (647) (2,177) (3,413) (3,195)
------ ------ ------ ------ ------ ------- ------ -----
Accumulation units outstanding at
December 31, 1995.......................... 31,040 46,893 6,919 18,756 10,998 34,313 66,669 -
====== ====== ====== ====== ====== ====== ====== =====
Contract transactions (unaudited):
Purchase payments.......................... 6,764 4,407 1,008 1,537 696 1,484 1,865 -
Transfers between funds.................... (2,733) 1,193 (152) (685) 198 (1,759) (4,535) -
Surrenders and terminations................ (4,603) (2,939) (341) (1,006) (545) (2,171) (4,194) -
Rescissions................................ (78) (102) (9) (27) (6) (33) (27) -
Other transactions......................... (17) 23 5 3 (1) 19 7 -
------ ------ ----- ------ ------ ------ ------ -----
Net increase (decrease) in
accumulation units resulting
from contract transactions........... (667) 2,582 511 (178) 342 (2,460) (6,884) -
------ ------ ----- ------ ------ ------ ------ -----
Accumulation units outstanding at
June 30, 1996 (unaudited).................. 30,373 49,475 7,430 18,578 11,340 31,853 59,785 -
====== ====== ===== ====== ====== ====== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Zero Zero Zero Templeton Investment Adjustable Templeton
Coupon Coupon Coupon Global Income Grade Income U.S. Pacific
Fund - Fund - Fund - Securities Intermediate Securities Government Growth
2000 2005 2010 Fund Bond Fund Fund Fund Fund
----- ----- ----- --------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding at
December 31, 1994................... 4,953 2,780 2,589 16,855 9,772 56,569 19,865 27,231
Contract transactions:
Purchase payments................... 966 715 652 904 1,016 7,979 3,753 2,065
Transfers between funds............. 800 269 511 (1,494) 30 1,879 (6,551) (4,013)
Surrenders and terminations......... (636) (249) (297) (2,058) (1,099) (6,965) (2,397) (2,714)
Rescissions......................... (16) (10) (27) (28) (25) (192) (95) (82)
Other transactions.................. (1) (1) 9 2 (2) 39 25 (4)
----- ----- ----- ------ ----- ------ ------ ------
Net increase (decrease) in
accumulation units resulting
from contract transactions.... 1,113 724 848 (2,674) (80) 2,740 (5,265) (4,748)
----- ----- ----- ------ ----- ------ ------ ------
Accumulation units outstanding at
December 31, 1995................... 6,066 3,504 3,437 14,181 9,692 59,309 14,600 22,483
===== ===== ===== ====== ===== ====== ====== ======
Contract transactions (unaudited):
Purchase payments................... 463 340 348 443 533 4,563 1,807 1,383
Transfers between funds............. (192) (73) (124) (852) (289) (903) (2,331) 1,175
Surrenders and terminations......... (398) (140) (146) (902) (492) (3,509) (900) (1,217)
Rescissions......................... (8) (7) (5) (10) (15) (115) (44) (12)
Other transactions.................. 2 - 2 6 - 23 3 9
----- ----- ----- ------ ----- ------ ------ ------
Net increase (decrease) in
accumulation units resulting
from contract transactions.... (133) 120 75 (1,315) (263) 59 (1,465) 1,338
----- ----- ----- ------ ----- ------ ------ ------
Accumulation units outstanding at
June 30, 1996 (unaudited)........... 5,933 3,624 3,512 12,866 9,429 59,368 13,135 23,821
===== ===== ===== ====== ===== ====== ====== ======
</TABLE>
<PAGE>
ALLIANZ LIFE VARIABLE ACCOUNT B
OF ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
================================================================================
Notes to Financial Statements (cont.)
June 30, 1996 (unaudited)
6. Contract Transactions - Accumulation Unit Activity (In thousands) (cont.)
<TABLE>
<CAPTION>
Templeton Templeton Templeton
Templeton Developing Templeton Global International
Rising International Markets Global Asset Small Capital Smaller Total
Dividends Equity Equity Growth Allocation Cap Growth Companies All
Fund Fund Fund Fund Fund Fund Fund Fund Funds
------ -------- ------- ------- ------- ----- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Accumulation units outstanding
at December 31, 1994......... 28,778 60,464 9,774 14,637 - - - - 474,775
Contract transactions:
Purchase payments............ 3,782 7,774 4,364 10,991 538 212 - - 79,613
Transfers between funds...... 4,493 (2,530) 2,372 4,306 916 1,096 - - (2,705)
Surrenders and
terminations................ (3,208) (5,662) (773) (1,448) (114) (4) - - (60,840)
Rescissions.................. (68) (168) (112) (183) (3) (2) - - (1,916)
Other transactions........... 12 5 (7) 6 1 - - - 172
------ ------ ------ ------ ----- ----- --- --- ------
Net increase (decrease)
in accumulation units
resulting from
contract transactions.. 5,011 (581) 5,844 13,672 1,338 1,302 - - 14,324
------ ------ ------ ------ ----- ----- --- --- ------
Accumulation units outstanding
at December 31, 1995......... 33,789 59,883 15,618 28,309 1,338 1,302 - - 489,099
====== ====== ====== ====== ===== ===== === === =======
Contract transactions
(unaudited):
Purchase payments............ 2,304 4,071 2,980 6,415 837 2,034 121 92 46,495
Transfers between funds...... 160 2,413 3,839 2,710 725 5,205 357 433 3,780
Surrenders and
terminations................ (1,649) (2,903) (686) (1,185) (80) (284) - (2) (30,292)
Rescissions.................. (49) (52) (24) (69) (3) (14) - (2) (711)
Other transactions........... 9 26 7 5 - 13 - - 144
------ ------ ------ ------ ----- ----- --- --- -------
Net increase (decrease)
in accumulation units
resulting from
contract transactions.. 775 3,555 6,116 7,876 1,479 6,954 478 521 19,416
------ ------ ------ ------ ----- ----- --- --- -------
Accumulation units outstanding
at June 30, 1996 (unaudited). 34,564 63,438 21,734 36,185 2,817 8,256 478 521 508,515
====== ====== ====== ====== ===== ===== === === =======
</TABLE>
