VIP *P3
Supplement Dated January 15, 1999
to the Prospectus Dated May 1, 1998
of
FRANKLIN(R) TEMPLETON(R) VALUEMARK(R) INCOME PLUS
Individual Immediate Variable Annuity
Allianz Life Variable Account B
I.The following replaces the first sentence under Section 4 "Investment Options"
on page 2 of the Profile: You may invest in the Allianz Life fixed payment
annuity and the following Class 1 shares of the portfolios of Franklin Valuemark
Funds:
II. YEAR 2000 Allianz Life has initiated programs to ensure that all of the
computer systems utilized to provide services and administer policies will
function properly in the year 2000. An assessment of the total expected costs
specifically related to the year 2000 conversion has been completed; the total
amounts to be expensed over the next two years are not expected to have a
significant effect on Allianz Life's financial position or results of
operations. Allianz Life believes it has taken steps that are reasonably
designed to address the potential failure of computer systems used by its
service providers and to ensure its year 2000 program is completed on a timely
basis.
III. The following information replaces the section entitled "Contract Owner
Transaction Fees" under the section entitled "Allianz Life Variable Account B
Fee Table" contained in the Prospectus:
Contract Owner Transaction Fees
Commutation Fee*
(as a percentage of the Total Liquidation Value liquidated)
Contract Year Charge
- -------------------------------------------------------------------------------
1 ..................................... 5%
2 ..................................... 5%
3 ..................................... 4%
4 ..................................... 3%
5 ..................................... 2%
6 (& thereafter) ............................. 1%
*After the first Contract Year, a Contract Owner may request one liquidation
from the Contract each Contract year if Annuity Options 2 or 4 have been
selected. If Annuity Option 6 has been selected, the Contract Owner may
request a liquidation once each Contract Year beginning in the first year. See
also "Annuity Provisions - Contract Liquidations (Withdrawals)".
IV. The following changes are made to the fee table under Franklin Valuemark
Funds' Annual Expenses: a) The following chart restates information about
certain Portfolios, as shown below:
Management Total
and Portfolio Other Annual
Portfolio Administration Fees Expenses Expenses
- --------------------------------------------------------------------------------
Mutual Discovery Securities Fund ............... .95%* .11% 1.06%
Mutual Shares Securities Fund .................. .75%* .05% .80%
Templeton Global Asset Allocation Fund ......... .80%* .14% .94%
Templeton International Smaller Companies Fund 1.00%* .06% 1.06%
*Includes a .15% Administration Fee which is a direct expense of the Portfolio.
b) The following footnote is restated as follows:
3For the year ended December 31, 1997, Franklin Advisers, Inc. ("Advisers")
agreed in advance to waive a portion of its management fees and, if
necessary, to pay certain expenses of the Money Market Fund. With this
reduction, management fees and total annual expenses, including management
and portfolio administration fees, paid by the Portfolio represented .43% and
.45% of the Portfolio's average net assets, respectively. The voluntary
expense reduction was discontinued by Advisers effective January 1, 1999.
V.The following replaces the fist sentence under the "Franklin Valuemark Funds"
section of the Prospectus: Seventeen of the twenty-five Class 1 shares of the
Portfolios currently constituting the Franklin Valuemark Funds are available
under the Contracts described in the Prospectus.
